How to Pay Your Future Self?
If long-term wealth is your goal, how can you best achieve it? Here are some of our favorite financial tips for you to pay your future self.
1. Pay Down Debt First
Interest payments consume your ability to save. With interest rates on the rise, if you have variable-interest debt or high-interest debt, focus on paying it off first. A good strategy is to make this payment a priority after every paycheck so you do not risk spending it on any other expenses.
2. Saving Money Doesn’t Just “Happen”
When it comes to saving towards your goal, one of the easiest methods is to make saving automatic. Regularly putting money into savings is one of the best ways to see your savings grow over time. You can do this by having an automatic savings plan. By setting up how often you would like a certain amount of money to be transferred into your savings account, you don’t have to rely on consistent self-control to save for your future self.
3. Increase Your Retirement Savings
If you have a retirement account through your employer, retirement savings can be deducted automatically from your paycheck which enables you to create savings immediately. By having a portion of your paycheck deducted invisibly, it will feel as though you never had the money in the first place, allowing you to make ongoing contributions. If your organization offers matching contributions, try to maximize that.
Whether you work for a large company that offers a retirement savings plan to its employees or you are self-employed or work for a smaller company that does not have an employee retirement plan, it is a good idea to open your own retirement savings plan account. This can easily be done at any financial institution and can be set up to have automatic monthly transfers to this account based on a prescribed annual amount by the Canada Revenue Agency.
4. Attain Additional Streams of Passive Income
Passive income (e.g. dividends) can create freedom in your financial life today or in the future (when reinvested) with significant impact on your ability to build long-term wealth. Not only can passive income help you achieve an earlier retirement, but also can also allow you to have improved financial stability in your retirement years. Who doesn’t like to see money come into their bank account with minimal or zero commitment of time and effort?
5. Make Your Money Work for You
The best time to start investing is yesterday, the second-best time is now—because it is nearly impossible to time the market. The sooner you can get your money working for you and for your future self, the better, because money can grow and compound when invested prudently, patiently, in the right investments and with the right people.
Established in 1985, Bloom Investment Counsel, Inc. specializes in helping wealthy individuals, family offices, foundations, corporations, institutions and trusts build and actively manage customized Canadian and U.S. dividend-paying portfolios. For nearly 40 years, our belief in the long-term benefits of investing in income generating investments, specifically dividend-paying stocks, has helped provide our clients to invest in the stock market with confidence. Our long-standing clients enjoy both capital gains and a stable stream of independent, passive (dividend) income while staying fully invested in the stock market thereby achieving both points 4 and 5—this can be you too!
Follow Bloom Investment Counsel, Inc. on LinkedIn to stay up to date on our most recent articles. This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.
Follow Bloom Investment Counsel, Inc. on LinkedIn to stay up to date on our most recent articles.
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.