Here’ a post from my Financial Independence blog at MoneySense.ca, posted this week from the Morningstar annual conference held in Toronto on Wednesday. Pictured is Michael Falk, a partner with Illinois-based Focus Consulting Group, and I’m reporting on his talk entitled Prime Minister, There’s a Hole in My Safety Net.
And as promised a few weeks back, here’s the second-chapter summary of financial lessons learned in the second chapter of the new US edition of Findependence Day:
Chapter 2: Money Money Money: It’s a Rich Man’s World
• The best investment is paying off debt
• A line of credit lets you consolidate high-interest loans at one combined lower interest rate.
• A more effective method is to spend less than you earn.
• Avoid paying only the minimum monthly payment on your credit card. Better yet, pay balances off in full and never pay a dime interest.
• Build a six-month cash cushion.
• Mutual funds offer young investors professional security selection and diversification and through equity funds, exposure to the stock market.
• Financial Independence is not the same thing as Retirement. It means you continue to work because you want to, not because you have to.
• As your portfolio grows, you can lower investment management costs by using a discount brokerage, buying low-cost passively managed investments, and engaging a fee-only financial planner.
• During Semi-Retirement or the “First Retirement” you can give back to the community by volunteering, and discover talents you never knew you had.