Golden Girl Finance
Kelley Keehn
Posts (7)

Personal Finance

What high-net worth investors use as an emergency account

June 27th, 2017 by

Break in case of emergency


I was hired by a private bank to conduct a workshop on financial basics for their affluent clients. One of the subjects I always cover in a financial foundations workshop is an emergency fund. It’s considered a must-have for most people but I questioned whether it was as necessary for the very wealthy. That is until I met Ruth* who approached me after one of my talks. (*name changed)

Ruth was in her mid-70s. Tears streamed down her cheeks as she confided that, once her husband passed away, she was unaware of how much money she had.

“We didn’t talk about finances at all.  When I would inquire, he would change the subject, so over the years I stopped asking. My husband was involved in many deals and was often very stressed about them. I never knew where we stood financially. As it turned out, when he passed, I finally discovered that he owned over $10 million in real estate holdings across the country. But none of them had my name attached. Until the will got sorted out, I had to go begging to the bank to help me.”

Ruth had been a homemaker and had no personal credit history. She learned the importance of having a personal emergency fund the hard way. 

Everyone, regardless of net-worth, should have easy access to funds. Here four steps to create your own “break-in-case-of-emergency” account.  

Life lines of the rich and famous

Emergency savings fund: Financial planning experts suggest that individuals have 3-6 months of their household income available in a secure and highly liquid account. However, you need to assess for yourself how much you would need to see yourself through such events as divorce, death of a spouse, family emergency, or health crisis. For some, a fund should cover more than 1-2 years of hardship without the need to dip into registered accounts or growing investments. 

Line of Credit: If the amount you need is large, a line of credit might be a better alternative. You don’t pay any interest until you tap it. If you intend to keep a balance running, talk to your banker about the option of securing it against your home to receive the lowest possible interest rate. The key is to arrange your line-of-credit strategy before you actually need it. As Mark Twain quipped, “a banker is there to lend you an umbrella when it’s sunny and demand it back when it’s raining”.  

Cash on hand: Most of us take easy access to funds as a given. However, it’s wise to remember that technological glitches, or even terrorist actions, do occur and may prevent you from accessing cash when you need it most. Always have cash on hand for these types of emergencies. If you feel uneasy having large amounts of cash at home, consider investing in a home-safe. A good rule of thumb: have enough to sustain you and your family for at least 3-4 days. 

Supplementary credit cards: Ideally everyone should have at least two credit cards in addition to a debit card. As credit card fraud increases, banks are quick to shut access to your account if they suspect foul play. This could leave you without credit until the situation is resolved. This is inconvenient at any time but could be catastrophic when traveling. 

Remember Ruth?  She thought she had her own credit card and was surprised to have the bank take it away as soon as her spouse passed away. Everyone should have at least one credit card in her own name. Even if it is not the “main” card, using it few times a year will help to build up your credit history. 

Rainy day funds

So, whether you have a little or a lot, you need an emergency fund. In everyone’s life a little rain must fall— and we all need to reach for that umbrella.

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; and 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.


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.


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.