Stepping Up Your Investment Goals
As a 1/2 Marathon Runner, I am always looking at how to get an edge in my training.
There are many straightforward pieces of fitness monitoring equipment. Whether you use a Polar Loop, a Fitbit, a Garmin or one of many other personal fitness monitors you can wear and track your personal fitness 365/24/7 (365 days a year, 24 hours a day, seven days a week)
I have chosen the Polar Loop 2 as my fitness monitoring device. I was attracted to the Polar Loop 2 because of the free app. The app monitors the following areas of my fitness life; how active I include a notice if I have spent too much time inactive, my steps daily, weekly and monthly, calories burnt, the number of hours I have slept including the percentage of my sleep that is restful and restless. Loop 2 also works as a watch.
What Does Your Personal Fitness Have to do with Crushing Your Money Goal?
When I first got my fitness monitoring device, I thought okay take 10,000 steps daily, and I would achieve my fitness goal; wrong!! (Fitness Myth)
Loop 2 works on the principle of the intensity of your actions not the number of steps. I can go for an hour walk that is over 11,000 steps and not hit my daily fitness goal, or I can run for less than 30 minutes, with steps well under 10,000 steps and exceed my fitness goal. The achievement of my daily fitness goal based on intensity.
What is the Intensity of Your Investments Activity?
Many of us have some form of government-sponsored pension; these pensions are not meant to cover your total expenses in retirement.
The other important thing to remember there is a formula calculated by the government to how much you will receive; based on the amount of time you have contributed to the plan and how much you have added. You have no say in how these funds get invested, and the return on these investments are not in your control.
I would suggest reviewing the government’s formula from the government website, and you can get a feel for how much your investment into this vehicle will give you each month in retirement.
If you are in the United States you can visit https://www.usa.gov/retirement This website is beneficial and gives you a ton of retirement information; you get the basics on retirement planning and pension benefits, such as how Social Security works, retiring from the civil service, and managing a private pension.
Although nearly all workers pay into Social Security and would get those benefits which are managed by the government, the benefits provide a lifelong income stream which looks like a pension.
If you are in Canada use the following link https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
According to this website, you can access the following information; a Canadian Retirement Income Calculator that will provide you with retirement income information. This website includes the Old Age Security (OAS) pension and Canada Pension Plan (CPP) retirement benefits.
(Check your own country’s sponsored government pension program)
Company or Employer-Sponsored Pensions
Company or employer pension; you have very little control over these funds. Your employer picks the company to administer and invest your contributions, and you get no or very little say — these funds invested in very safe investment with not much of a return on these funds. Remember your employer provides you with an amount your pension will pay you based on years of service and your contributions; you usually get an employer pension statement that shows you your yearly contribution and projects out your pension amount should you reach your retirement date and years of service.
IRA, Individual Retirement Account (USA) or RRSP, Registered Retirement Savings Account (Canada) each country has its own set of rules on how these funds are handled regarding tax deduction benefits to you as a taxpayer and if these funds are tax deductible.
You as a contributor have a say in the type of financial vehicles these funds invested, but most of us just let the company who has our funds invest our money. Then each year we have to listen to the company’s representative tell us why our funds are not performing the way we had hoped.
Some of us have a non-registered self-directed fund that we generally can not get any tax breaks. These funds can be in stocks, bonds, gold, diamonds, collectables, and a ton of other investments we believe will give us a return on through time. The issue with the intensity of these investments is we are hoping they go up in value over time. In many cases, we buy for equity growth; with no dividend or income generated.
With most of our investments controlled by others, we have little control over the intensity of the return on our investments.
Do you think it is time to get off the couch or bench and take turn up the intensity of how you are investing your money?
How to Crush Your Money Goals; Take Equal Control
- Financial Education
- Balance Your Investment Portfolio; No Control versus Self Directed Funds
- Get Paid Each Month by Your Investments; Dividend or Profit Income
- Investment Interest Earned; promptly; the power of compounding
Match – No Control Investments
At the end of each year add your none controllable investment contribution amounts; your government pension, employer contributions to company pension and IRA or RRSP contribution together. (i.e. Year Contribution; Government Pension $450 plus Employer Pension Contribution $550 and IRA or RRSP Contribution $1000; total $2000)
Here is my recommendation and where you can make a big difference to your financial retirement future.
Stepping Up Your Intensity – Invest Amount in Self-Directed Fund
Use Andrew Carnegie’s philosophy; “Put all your eggs in one basket, and watch that basket.”
The Match-Up Method
Each year you should know what funds invested on your behalf (Government, Company or Registered Investments) which you have no or little control on the returns you earn and create what I call a Match-Up.
The Match-Up Method is where you take an amount equal to the $2000 I described above that you contribute into the none controllable investments.
The Match-Up amount allocated to a separate self-directed fund; ensure this match-up fund is paying you a monthly dividend or monthly profit return.
You need to take the dividend/profit amount earned and reinvest back into the match-up investment.
Should you not have a matching lump sum of funds (i.e. $2000) as I describe above at the beginning of the year to invest; set up an automatic withdrawal based on how you receive your pay cheque; weekly, bi-monthly or monthly into your self-directed investment.
You can’t out invest bad financial advice and low returns; take control of part of your financial portfolio.
Are you ready to step up your financial portfolio’s intensity?
As part of my support to this blog post listen to my guest podcast episode entitled; Ready, Set, Goal EPISODE #38 – Guest Interview – Rick Harris – Ready, Set, Goal©; The Everyday Millionaire Podcast