What’s the worst money advice you’ve ever received?
Pay off all your debt before you start investing. While high-interest debt is definitely concerning and should be prioritized, I think it’s important to start building your wealth while you pay down your debt. Time is on your side. With the power of compounding interest, getting started 10 years earlier than you would have if you only focused on paying down debt may mean that you retire substantially earlier.
Would you rather receive a large sum of money all at once or a smaller amount of money regularly for life?
I guess it depends on how much it is. Getting a lump sum would probably mean being able to have more impact now, and I’d be able to turn that money into more through investing. That being said, it would be fun to try and plan out what to do with a smaller amount of money that comes every week for the rest of my life. I feel like I would spend more of it, if it was a smaller amount every week, so I’ll stick with my initial answer of lump sum.
What do you think is the most underrated financial advice, tip or strategy?
Automate everything. We have so many decisions to make every single day of our lives, having to manually transfer money to different accounts and remember to pay each and every bill is exhausting. Automate as many of your financial tasks as possible. Your future self will definitely thank you.
What is the biggest misconception people have about growing money?
That you need to have a lot of it to get started. I walked into a bank at age 19 with $100 and started investing in mutual funds. Each month I would add $25 to this investment, and while it seemed abysmal at the time, it really wasn’t about the amount, it was about the habit. I had no idea what I was investing in, but again it was all about getting started.
Can you share a money regret?
I really try not to frame decisions I’ve made as regrets, and I try to tell myself that I made the best decision I could with the information I had at the time. I’ve paid penalties on over-contributions to my TFSA, I’ve had investments that I should have sold earlier, and I’m sure I’ve overpaid for things or purchased things I didn’t actually need. But at the end of the day, we are all human, and we all make money mistakes—each and every one of us is still learning.
What does the word “value” mean to you?
Value to me is something that is going to bring me joy. Travel has always been something that I have loved spending money on, partly because I get to explore and experience new places, and partly because of the people I’m travelling with. I think my answer, though, is connection. I never mind spending money when it comes to spending quality time with someone I love, so we can form amazing memories and develop a deeper connection.
What’s the first major purchase you made as an adult?
Vehicles. I loathe shopping for them, and I’ve had to purchase two in my adult life. They are so expensive and never hold their value, so there is definitely fear that I’m going to choose a vehicle that is going to end up with a ton of issues. This probably also stems from the fact that I am not trained to really understand what makes a good vehicle, or how to fix one, so I have to rely on information from others to make those decisions.
What’s your take on debt?
I’m neutral on debt. I think our society so often paints debt as something that is horrible and that you are a bad person if you have it. The reality is the richest people in our societies use debt to get ahead, to buy properties and invest in companies. Debt can be a great tool that can help you build wealth, but it can also be dangerous if you don’t know what you’re doing.
MoneySense Editors
Source link
