I’m a Loser - The Defeatist Attitude

I was having a discussion recently with a friend of mine who’s monetarily challenged (to say the least). He’s dead broke without a steady job. Of course his outlook on life is understandably sour.

I mentioned to him I’m currently reading a financial advice book by Tony Robbins and that it has some great advice. He also knows I’ve read books by Kevin O’Leary and Preet Banerjee on personal finance.

All these books are great in their own way and are definitely helpful in attaining a goal of financial independence. I told him he should take the time to read them.

His response was either, I know everything already, or, I don’t like Kevin O’Leary, so I’m not going to take his advice. Or he’ll say things like, why bother saving money? We could be hit by a bus tomorrow, so what’s the use?

That’s absolute nonsense. He’s either too proud to take advice or too lazy to bother reading these books. All the while he watches videos on his laptop for most of the day.

Not having a long term financial plan is a serious mistake many people make. It could mean the difference between having a roof over your head when you’re 85 or living on the street not knowing where your next meal will come from. And all because you were too proud or too lazy to even try - To try to save money; to try to invest wisely.

People spend ten of thousands of dollars and years of their lives on their education so they can earn a decent wage. Why not take a few more days/weeks to read a few books that could make an even greater difference on the quality of life in your golden years? Work smart, not hard.

"The journey of a thousand miles begins with one step." - Lao Tzu

The Wealth Gap

According to the Broadbent Institute in 2012 the richest 20% of Canadians owned 70% of the country's wealth. In it's opinion a great inequity, and I tend to agree. But, do I care much about it? No, not really. Why should I?

Why should I care what others have? You know who I'm concerned about? Me. Do I care that you drive a Mercedes SUV and live in a 3,500 square-foot house in Richmond Hill? Well sure, I'm a bit jealous. But, in the big picture, it doesn't really matter.

What matters is that I have a roof over my head, clothes to wear, food to eat and a car to drive. And why do I have these things? Partially because of the generosity of my parents and partially because I'm a cheapskate.

My socks have holes in them. Of course I have good ones without holes if I'm going over to someone's house and I'll be walking around in them. I buy Fruit of the Loom underwear from Walmart. I may buy one or two pairs of new shoes a year on average. Rather than take the subway home I sometimes walk 7 kilometres from downtown.

I rarely buy new clothes. Especially since I just deliver towels for work for my friend, Sid. I wear the sports shirts I've acquired over the years from Cornerstone Sports Night and Ultimate. They're practical and functional.

Now I'm not saying we shouldn't have a social network that helps the poor. Of course we should. I'm all for it. And I believe in Universal Healthcare, a hallmark of Canada. But, I also think people have to take some responsibility for their own financial success or lack thereof.

My friend, Markus, works at the LCBO. He's told me stories about people who are just plain stupid with their money. There was the one young lady who bought a $300 bottle of whiskey or something. My friend thought this was a little extravagant and asked her what she did for a living. Turns out she was just a clerk at a law firm or something. This was a gift for her boss, a woman she really liked. A nice gesture, but I think her boss would have been just as happy with a present that cost half as much.

Then there was the fellow who came in to buy some booze and had his credit card denied. He then tried to put it on his debit card which also barely had any money left in his account. So desperate was he for alcohol that he asked if he could put half on his credit card and half on his debit. Are you kidding? You don't have any money. Walk out of the store; pay off your debts; then come back when you're good and ready.

Some people just aren't very bright. In a recent news item Canadians, on average, were $21,000 in debt, not including mortgages. $21,000! I'm sure part of that included student loans which I consider to be a relatively good investment depending on your field of study. But, I'm sure part of that debt incurred included car loans and credit card debt for things you really didn't need.

All I'm saying is take a look at yourself before comparing what you have to what others have. Because what others have really isn't the issue is it?

Money = Happiness?

I recently watched a few episodes of show on TLC (The Learning Channel) about lottery winners (mostly based in the United States). It was pretty interesting.

One thing I learned is that if you win, say, $35 million, you don't actually get $35 million. They said something about if the winners wanted their money in a lump sum they received only about half of it (I'm not sure why).

As well, the government takes about a third of that amount in taxes so you end up with only about $11-$12 million. Not chump change, but far from what you would get had you won the lottery here in Canada (which is the entire amount).

The second thing I learned is that after you win you'll make a lot of new "friends"... who want your money. And if you're silly enough to give some to them that's the last you'll see of them (until they want more I suppose).

One winner had to move from the small town he grew up in because people were contantly harassing him. If he drove somewhere and parked his truck, upon his return he would find notes stuck to it from strangers asking for money to help them pay their bills or some other sob story.

Another self-described "redneck" woman took her children out of school because the other kids were picking on them after she won the lottery. Greaaaat... home schooled by someone who probably didn't complete high school. At least the kids had fun at "recess" riding around on their ATVs in the yard behind their newly expanded trailer.

For these so called "winners" winning meant isolation. Sure they had big homes and a lot of nice toys. But, they had to either move or close themselves off from many of the people they once knew because of it.

Other people were just plain dumb. One young, 19-year-old winner gave some of his winnings to his mother (which was nice) then moved out and bought a mansion in Florida. While there he "invested" in an all women's pro-wrestling league among other things.

After giving away at least a million dollars he smartened up and sold his place in Florida and moved back home with his mom and brothers. There he would have time to think about all the foolish things he had done.

Then there was this tragic story about an illiterate, Florida man who won about $30 million ($17 million after taxes).

A lot of people took advantage of him. Either he was just too kind or didn't know how to say, no. He gave a lot of people "loans" (which I'm sure they had no intention of paying back).

But his story really took a tragic turn when a stranger conned him into selling her his expensive, newly purchased home and took over all his finances under the pretense of being his advisor.

At one point he dropped out of sight not contacting anyone he knew for a few months. That is until, one day, his mother received a text from him saying, not to worry and that he was alright. Well, of course, that set off alarm bells as he was illiterate and couldn't read or write.

Long story short... authorities found his remains some time later buried in the woman's backyard. She was charged as an accessory after the fact to first-degree murder.

I'm not saying winning the lottery couldn't or wouldn't be great. But, it brings it's own set of problems along with it.

Save your Money

Save your Money–I think this is a statement that's foreign to many people nowadays. The debt level of so many Canadians has grown bigger and bigger in recent times. This has been encouraged by current record low interest rates. But experts fear that if they happen to rise a lot of people won't be able to deal with it. So we all have to be very careful. Don't spend what you don't have.

One way to save your money is to buy only what you need (versus what you want). Let's face it, we all have plenty of wants. That's a problem I've dealt with in the past. I liked clothes and I would often go shopping. At one point I dug through my things at home and discovered I had 20-30 pairs of pants (some of which I rarely wore). I believe many others aren't unlike me in this way. We walk into a store and see something we like and without thinking about it put it on our credit card.

Don't necessarily buy name brand. Sometimes you can save a lot by purchasing generic or less well known brands for certain things. Or, if there's a particular brand you can't live without, try buying off season (for clothes or sports equipment like bicycles or skis etc.) when stores are trying to clear their shelves for new merchandise.

Don't forget–The Little Things Add Up! $3 for that caffè latte and $1.50 for multi-grain bagel in the morning, plus $4 for a juice and blueberry muffin for your mid-afternoon snack may seem like pocket change now. But, it really adds up in the long run. And most people will buy more than that throughout the day. You can be sure of it. Instead of going out, why not bring snacks to work or have them at home? You can save a lot by doing that.

We have to prepare ourselves for the future. It's a fact of life, we're all going to get old. At one point we either won't be able to or won't want to work any more. We can't and shouldn't rely on the government to supplement our income with things like pensions or Old Age Security.

Right now there's a huge number of baby boomers nearing retirement age. Our tax dollars will be stretched to the limit trying to care for them. With the way things are going who knows if there will be anything left when we reach that stage in our lives. The only people we can rely on is ourselves.

It's imperative we save our own money and invest it wisely. It's never too late to start. If you haven't already done so, today is the day to start.