It's Time to be a Rich Moose!
Here at The Rich Moose we define being RICH as:
The accumulation of Investment Assets which provide returns to cover your cost of living.
Being RICH is having the ability to do what you want, whether that's working in a career where you make a difference, volunteering, travelling, or leisure - it's up to you! You don't need to worry about money because your investments cover your cost of living.
Getting RICH is easy and requires only 6 main commitments:
- Make good money! This sounds obvious, but it is important to aim for a career where you can earn at least $75,000 per year. Some great career options include sales (especially business-to-business), certain skilled trades (electrical, plumbing, HVAC, welding, mechanic), engineering, law, accounting, medical (doctors and registered nurses), and much more.
- Save like heck! You should aim to save at least 25% of your total income. This is achievable when you spend smart. You would be amazed how many doctors, lawyers, accountants, and engineers out there make lots of money, look rich, but they can not save a dime! True wealth is defined by how much Investment Assets you have relative to your spending.
- Open a brokerage account. We use and recommend Questrade to everyone we know. It’s 100% online, easy to use, and offers great value. Purchasing ETFs is free which makes Questrade an excellent choice when following our portfolios.
- Buy stocks!... or actually buy ETFs! ETFs are a great way to buy diversified stocks at a low cost with reduced risk. Follow one of our portfolios and rebalance regularly. Over time, you should earn 8%+ annual return on your Investment Assets! This compares with most Canadian investors who earn less than 3% return due to poor decision making.
- Keep investment costs very low! This is extremely important. Many Canadian banks and investment firms will charge 1% - 2.5% of your total Investment Assets to manage your money - often with poor results. You don’t have to be a math wizard to realize they are getting rich, not you!
- Be committed to your plan! This is the most important part. To get RICH you must ignore the noise and stick to your plan no matter what. People who stick to their plan over time get RICH because of their discipline. RM Portfolios are designed to be simple and reduce risk so you can stay committed to your investment plan.
I've Never Invested Before
When you start saving, always start out by filling your Questrade TFSA account first. A TFSA brokerage account is the best place to put your money for about 95% of Canadians. If you were 18 years old in 2009, you can contribute $46,500 to your TFSA account in 2016. If you are not sure how much you can contribute to your TFSA this year, open an online account with the CRA. If you have one of those interest-paying TFSA accounts with a local bank, request that it be properly transferred to your Questrade account.
Start putting money into your TFSA until you have contributed your maximum. The most important things right now are start saving consistently, and learn how to use Questrade to purchase ETFs.
Start investing by following the RM Starter Portfolio. All you need to do is buy one ETF: the iShares Core MSCI All Country World ex-Canada Index fund which trades on the stock market as XAW.TO. For a ridiculously cheap included annual fee of about 2 cents for every $1000 of your money, this one fund will give you a fractional share of ownership in more than 5,500 of the largest companies around the world. This means you will own a small piece of companies ranging from Apple Computer to Shell Oil to Toyota Motors to Diageo Liquor. Talk about balance and diversification at a low cost!
I’m Not New at This, What Do I Do Now?
Check out RM Portfolios and see if our free RM Balanced Portfolio is right for you. Simply put money into your Questrade account each month and make your ETF purchases to maintain your balances. No guesswork, no research, no analysis paralysis. The whole purchase process will take you about 10 minutes max and you go on with your day without thinking twice about it!
The information in this site is amateur in nature and should not be interpreted or acted upon as individualized financial advice. Discussions related to specific securities are an example of available options and author opinions only. This site does not derive incomes, sales benefits, or other material gain from the securities mentioned or from their managers.
Neither the authors nor the site are licensed or registered as professionals in any manner with the Alberta Securities Commission, its provincial peers, or industry associations.
Always do your due diligence before acting on the opinions herein shared. While reasonably believed to be accurate, the opinions are not necessarily confirmed by applicable government agencies or licensed professionals. Readers should always consult with the appropriate professionals before acting on information derived from this website.
Neither the authors nor this website assume responsibility for individual actions which may include financial loss, penalties, fines, or other forms of harm.