Golden Girl Finance
 
Kelley Keehn
Posts (6)
 
 

Personal Finance

5 little tricks to improving your credit score

February 9th, 2017 by

Make sure you're checking off these boxes each month

 
 

In today’s nearly cashless society, I fear that the upcoming societal outcasts (financially speaking) will be those with poor credit. Today, one can’t travel, rent a car, secure concert tickets in advance or even park in some underground garages without a credit card. Having a strong score or improving it now is paramount.

Keep in mind that your credit score is fluid and changes monthly.  If your score is great, you want to keep it that way. And if it’s less than spectacular, you can improve it. If you’ve never checked your credit report or score before, take a deep breath. Do it today.  (If you’ve never done so, you’re not alone but like most Canadians.)

In Canada, you can request a free credit report as often as you’d like. There are two main reporting agencies in Canada; www.equifax.ca and www.transunion.ca. There may be a small fee to obtain your credit report.

Once you know your score, here’s what you can do to improve it:

5 tips to a top score

  1. Pay at least your minimum loan or credit card payment on time, every time.  Sounds simple, yet I see so many individuals pay their credit card minimum payment each month, but maybe just a day or two late here and there. Each time you’re late, it brings your score down. And remember, if you’re paying online, ensure to allow at least three business days for your payment to arrive (if your credit card isn’t with your bank – if it is, you can usually transfer the funds the same day).
     
  2. Keep your balances low.  The credit reporting agencies see a maxed out card as a big red flag and that drags your score down. If you are close to the max, you might need some help. Talk to your banker about a consolidation loan, or for more serious trouble, visit a non-profit credit counsellor for help.
     
  3. Never go over limit. If you’re nearly maxed out, remember to factor in your interest charge each month along with any pre-authorized payments. Some credit cards might allow you to go over limit by say $5 or $10, but charge a hefty $29 over-limit fee. If this sounds like your situation, call your credit card company and request that they don’t allow your account to go over limit. Not only can it be extremely costly, it hurts your score each month.
     
  4. Pay more than the minimum requested.  Even though your credit card company only requests a certain amount, paying even a few dollars more will get you out of debt sooner. Especially with some cards charging; 20-29%, that interest adds up. 
     
  5. Don’t seek new credit.  If you don’t need it, don’t apply for it.  Each time you apply for credit, it’s registered on your credit bureau and if you apply for too much at once, it’s a red flag.  If you’re moving, for example, and need to make a lot of new purchases on credit, try to space applications out over six or twelve months.

Personal Finance

How to 'win the lottery' without a ticket

February 2nd, 2017 by

May the odds be ever in your favour

 
 

Forget the lottery. Let’s look at the odds:

  • For each $2 Lotto 6/49 ticket, the odds of winning $ 1 million are approximately 1 in 14 million.
  • For each $5 Lotto Max ticket, the odds of winning $15 million are 1 in 28 million.
  • You’re more likely to be die from a wasp sting (1 in 6.1 million).

Here’s the real trick to becoming a millionaire:

The “Born Canadian” Lottery

As of June 2014, there are now approximately 320,000 high net-worth individuals in Canada—that’s people who have at least $1 million in financial assets, excluding their principal residence—according to the World Wealth Report. Their collective wealth is estimated at $979 billion. The number of Canadian millionaires rose by 7.2 per cent last year. Compared to our neighbour to the south, Canada boasts high quality post-secondary institutions and health care, both heavily subsidized. These benefits pay big dividends in terms of creating and maintaining our wealth. 

Save a little, earn a lot

The average annual amount each Canadian spends on some form of gambling, e.g. lotteries, is $678. If, instead, this amount was invested at 7 percent from ages 18 to 65, the compounded value would be close to $250,000. And, if you added just $5 a day, and invested the tax refund each year, you’d have close to $1,200,000! That’s a much better bet than Lotto Max.

You're already a millionaire

Research reveals that lottery winners return to their previous level of happiness not long after their big windfall. They are also more likely to fritter away the funds within seven years. You have a steady money-making device and you own it free and clear. It’s the gold mine between your ears—the amazing multi-million-dollar machine that is you and your ability to earn an income in your lifetime. 

As in sports psychology, winning any game is 90% mental. Money matters are no different. Forget the lottery; you’ve already won the most powerful money-making machine in the world and live in a country where it’s entirely possible to be a millionaire.

Relationships

How to play the 'Banking Game' (and win at relationships)

January 12th, 2017 by

Date night is game night

 
 

Should couples have financial secrets?

Regardless of a couple’s net worth, how a partner spends or invests money can cause friction in a relationship. This brings up issues of control and trust which cut to the core of any union. Money is a sensitive subject and one that many couples would prefer to avoid—until a situation arises, such as divorce or death, that forces the issue. Often this brings unpleasant surprises. For those couples who are ready to tackle communicating about money, here’s one way to make the experience more playful and a lot less stressful. 

Here’s how to play...

Either as a couple or individually, open four separate accounts:

  • Account #1: Income 

    This is where you will deposit earnings and make bill payments. (Treat contributions to RRSPs, TFSAs, and RESPs as “bills”.) Next, withdraw ten percent of your total income from Account #1 and make three equal or unequal distributions to the remaining three accounts.
     
  • Account #2: Financial Independence 

    The only rule associated with this account is you don’t touch the principal. This account sends two very powerful messages to your subconscious: 1) “I always have money”; and 2) “I don’t need to tap the money.”
     
  • Account #3: Spending 

    The only rule for this account is to spend the money in it from time-to-time. This is for guilt-free personal expenses. Do I hear spa vacation?
     
  • Account #4: Couple or Us 

    Spend these funds on things that will enhance your relationship, such as romantic meals, travel, hobbies, charities, etc. 

Playing for keeps

By playing the Banking Game, you'll not only become more relaxed and confident about the wealth you create as a couple; it will also allow your net-worth—as well as your self-worth—to grow.

It's a win-win.

Other

Rich thinking: 3 steps to a wealthier mindset

January 5th, 2017 by

Start investing all that mental energy into your greatest asset: YOU

 
 

A positive mental attitude can increase your chances for greater wealth. The first step is becoming aware of what you need. This acts as a catalyst to searching for a solution. But first, like any fixer-upper project, we need to clear the clutter.   

According to the Institute for Neuroimaging and Informatics at the University of Southern California, the average person thinks 70,000 thoughts a day. Most experts estimate that up to 95% of those thoughts are reruns of past events, or recurring thoughts.   

In focusing our attention, our brains use a process called the Reticular Activating System (RAS). Marilee Sprenger, in her book How Your Brain Controls Your Attention, describes this system as the portal that filters information. How it does this affects what you pay attention to. So, why not use this system to increase your wealth? By simply focusing your attention on what you want more of in life, your brain will seek out opportunities for generating wealth and your well-being.

More than a feeling

Of course, mental habits are not easy to break. However, incremental changes, over time, will create big shifts in how you view the world and yourself. A few little tricks can help put you on a better path to greater clarity about your goals and greater awareness about the actions that will help (or hinder) their achievement. 

Getting started

Step One:  Buy a plastic band in one of your favourite colours and place it on one of your wrists. Each time you catch yourself ruminating on a negative idea, snap the band to help you reset your thinking pattern. At first you may be snapping a lot! But, if you stick with it, you’ll soon find that, as your awareness grows stronger, your snapping decreases.   

Step Two: Like overcoming any addiction, it helps to replace one habit with another, preferably better one. For example, if you find yourself fantasizing about some catastrophic event, (“I’ll run out of money before I die!”), replace it with a positive statement. (“I’ll always have enough.”) Mindset expert, Dr. Carol Dweck, suggests adding “yet” to the end of any self-defeating statement, as in “I’m not financially independent…yet.”  

However, if you find yourself coming back to the same fear, then you may need to do more than simply re-frame your thinking; you may need to take more direct action. For example, if you’re unsure about your retirement readiness, all the positive phrases will not replace the benefit of working with a financial planner on a solid retirement plan. Positive thinking joined with positive action is the key.   

Step Three:  One of the most powerful emotions is gratitude. Instead of focusing on what is not working, give equal time to what is working. Take a moment to give thanks. 

The power of gratitude

Appreciating your life in the here-and-now is an instant wealth builder. 

Investing

Managing your money: How to hire the right person for the job

December 15th, 2016 by

The top questions to ask a potential financial advisor before you invest

 
 

Newsflash! Almost anyone in Canada can market herself as a “financial advisor”. This puts the onus on you, the investor, to ask the right questions before engaging an advisor. 

Question to ask your prospective advisor:

  • Who are your typical clients?
  • Can you provide me with references and the opportunity to speak with a few of your clients?
  • What’s your education and professional experience?
  • How long has your firm been in business?
  • How long have you been with the firm?
  • Are you and your firm registered with the securities regulators (see below)?
  • What products and services do you offer?  Which do you not provide?
  • How will you help me reach my goals?
  • What investment biases do you and your firm hold?
  • How often will we meet in-person and how will I hear from you throughout the year?  
  • Will you personally work with me or will I deal with someone else at your firm?
  • What kind of account reporting will I receive?
  • How do you get paid—specifically?
  • Will you put your recommendations in writing along with fees, commissions, charges, referral fees and more?

Want to find a registered advisor in your area?

Contact your local securities regulator, (Ontario Securities Commission, Alberta Securities Commission, etc.). The Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) can give you a list of registered member firms. You can also contact the Portfolio Management Association of Canada (PMAC), the Financial Planners Standards Council (FPSC), or the Institut quebecois de planification financiere (IQPF) for additional information.

Once you’ve identified a few possible advisors, follow these 3 simple steps:

  1. Check registration (Canadian Securities Association National Registration Search and Local Regulator.)
  2. Check disciplinary history (CSA Disciplined Persons’ List; CSA Cease Trade Orders Database and Local Regulator)
  3. Do an internet search for the latest news.

Question to ask yourself (and your advisor) before making an investment:

  • Do I understand the investment and how it works?
  • What are the risks?
  • What are my goals?  For example: Am I seeking safety, growth, income, or a combination? 
  • Does this investment match my goals?
  • Is the potential return realistic based on the investment type and the amount of risk? 
  • When will I receive payment and in what form?
  • For how long will I be invested?  What if I need the money sooner? 
  • What are the costs to buy, hold, and sell my investments?  
  • Do I understand the tax implications of the purchase, holding period, or eventual sale?

The bottom line

  • Am I comfortable with this person?
  • Is she willing and able to explain investing in a way that I understand?
  • Is he giving me time to think about my decision?
  • Am I encouraged to shop around, get a second opinion, or consult my lawyer or accountant?
  • Am I realistic about the potential gains, losses, and risks of this offer? 
  • How basic or complex are my financial needs, e.g. tax or estate planning?
  • How much investment knowledge do I really have?
  • Would my assets be best managed at the bank, broker, or portfolio manager level?

Investing like a boss

Many people feel intimidated asking direct questions of a potential advisor. However, it’s important to keep in mind that it is your money. You are the CEO of your own money. And, like any good executive, it’s up to you to hire the best person for the job.