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Achieving Your Financial Goals:
Managing Money and Increasing Wealth

Practical Techniques for Students and Others


Here you learn easy-to-implement techniques to achieve your financial goals and to move toward your full potential. These suggestions often take the perspective of university students, but also have much value to a general audience.

You learn how to increase your income and how to manage and conserve the wealth you have for later use toward specific goals, all while maintaining balance in life.


Tracking what you spend

First of all, you need to gain control of your spending, in order to get maximum enjoyment and fulfilment from resources you have.

You should implement keeping a record of your spending, having a log of the purpose and amounts of each expenditure. Your goal is not asceticism--most people have more than enough of that--but you should know where your money is going. This log you should carry with you, in order not to forget items. Enter every expenditure, no matter how small.

The mere act of tracking helps you spend more wisely, and you may be very surprised--very shocked--at how much money you are wasting. Tracking helps you think about how you should allocate your funds and even how to make your wealth grow.

For example, university students may find that they are spending an inordinate amount of money on food of dubious nutritional value. All too often they may come home and order pizza delivered, the cost of which really adds up over time, instead of quickly preparing a more balanced but pleasing meal. Below, self-proclaimed master chef and pseudo dietitian Dr. Voyageur shows just how easy it is to prepare a savoury healthier alternative meal at a fraction of the cost in very little time. No experience needed.

You should look at all aspects of your spending to determine if your money could be used in better ways. You need to chart exactly where your money is currently going and think seriously about alternative ways of spending and saving.

After a time, you will find that you do not need to formally track any more. You do not want to make an obsession of this over a long period. You will naturally begin to spend more wisely from the experience of tracking.


Earning more

Dr. Voyageur never ceases to be amazed by people who complain about how much debt they have or how they never have enough money to buy what they want, but never think of easy to implement ways to earn more to get back on track. For example, a shocking number of people in the U.S. declare bankruptcy with relatively small amounts of debt, which could have been paid off by merely working a few more hours each week.

Working part-time to supplement government guaranteed educational loans in Canada and the U.S., most domestic full-time students earn enough during the school year to meet basic needs. Earning enough to take extensive trips, to make major purchases, and to have money for emergencies, on the other hand, is another matter, they believe. Saving for a future beyond university is almost unthinkable for most students.

The solutions? Work longer. Work smarter. Earn more during the time you work. These points are explained below.


Maintaining balance of life

While working on your financial goals, please keep in mind that rest is the basis of activity. When we are well rested the day goes better and over the long run we achieve more.

University students must pay particular attention to this point because most are pinched for money. You may need to work more, but you do not want to overdo it.

Some advocate regimes that bottom line result in severe sleep deprivation. Working full-time while engaged in a challenging academic programme may not only be unhealthy, it also denies that there is more value to university life than class work.

Certainly, the friendships (and networks) that you develop, the cultural, social, and charitable activities in which you participate, the extensive physical activity for which you now have time but may not later, and the chance to contemplate realms beyond your immediate existence all have much value. Merely looking at university as a vocational programme (even if your class work is vocational in nature) is not only wrong, it is damaging to your future happiness.

In setting financial goals and prioritizing your time, try to achieve balance. Stop and smell the roses, as the cliche goes.


Knowing how to earn more

If you read and implemented the time management and goal setting section, you should now have ample time to earn more, without sacrificing your academic or social life.

Besides paying off debts, you can increase your income to be able to save for our major goals like starting a business or going on an extensive honeymoon with no debt. This can be accomplished in at least five ways, preferably by a combination of at least two or three.

First, with more careful spending, as discussed above, you have more funds available for items really important in your life. Thus, you "earn" from your time spent tracking and budgeting.

You make sure that these "earnings" stay available for specific goals and real emergencies by segregating them into savings accounts (or into gold coins or whatever), not into your day-to-day chequing account.

Do not worry that you earn little interest on these accounts. You want this money kept safe and ready, and having a savings plan that you stick to cultures discipline needed for success in other areas of life.

You can set up somewhat higher interest "certificates of deposit", which have restrictions and penalties for early withdrawal, and even arrange to have automatic deductions from your paycheques into your savings. "Out of sight and not of mind"— out of temptation's way--is Dr. Voyageur's motto..

Before moving on to more lucrative but riskier investments, you want to have a stable savings plan in place for emergencies.

Second, with your increased free time due to more efficient time management described in the earlier lesson you can work extra hours without a pinch. If necessary, you can have more than one part-time job, while still having more time for social activities. Remember that you are working more now to have a better life later. Surprisingly few people think of working extra hours. We discuss this in greater detail later.

Third--and this is really important--you can seek a higher paying full or part-time job or self employment situation. Preferably, this job should add to your future resume. For example, an accounting student will usually be better off doing simple bookkeeping for a small merchant than frying hamburgers in a fast food restaurant, if for no other reason than her employer can serve as a future work-related reference.

Working at a job related to your interests in life usually results in more income either now or in the future. As a student, wouldn't you rather be a teaching assistant helping a favourite faculty member than serving food in your residence hall? Working with a person such as your professor who may eventually or even now introduce you to many opportunities in your field? This could even result in an ideal summer internship for you, as well.

Too many students and others go with the flow and stay with the first job offered. However, you want a job that looks good in the future and has significant potential for short-term wage increases, as the quality of your work becomes proven. If you choose a job that complements your academic endeavours and passions in life, the sophistication and earning potential of your part-time job or jobs should quickly grow.

Fourth, you can start your own part-time business while in school. If you really want to get rich in Canada or the United States, starting businesses and investing in newer businesses to share in the profits are the routes to go. With rare exceptions, investing in the stocks of more mature companies or mutual funds while working for someone else will never make you truly rich, even if your salary is high. For one thing, your tax situation as a wage earner is far inferior to a business owner's.

As students, we can tutor our peers, teach younger children, paint houses, tend gardens, repair cars or computers, keep company books, sell fitness centre memberships for commissions, translate documents, clean carpets, on and on, all under the umbrella of our own business. And, even as students, we receive the tax advantages of self employment. Our possible tax deductions multiply and thus our income becomes sheltered from taxation in ways not available to routine wage earners.

Note that none of the possible businesses listed here requires significant investment to get started. If you fail, you have risked your time, but not your bank account.

International students without resident visas may find self-employment or other opportunities in Canada and the U.S. Trading informal instruction in their mother tongue for rent reductions and other informal arrangements may not run afoul of immigration laws. Consult legal counsel with extensive experience in immigration law to be sure, in order to avoid deportation. Once out, you may not be allowed back in for a long time, and since the 9/11 attacks you are of course being watched more closely.

In the U.S., for example, international students may be able to set up web-based limited liability companies where their income 1) is paid in the name of their company, and 2) goes to their foreign address. This type of company may qualify for a U.S. tax identification number. If considering this, it is absolutely essential that you discuss the legality of this and the pros and cons of this with competent legal counsel and the tax consequences of this with a chartered accountant (CPA). Make sure that these people know your status in Canada or the U.S.

Also, universities have ties to private companies and governmental departments that give both international and domestic students paid internship and other employment opportunities. You have to ask and keep asking.

For all of us, self employment allows us to control our lives in ways that working for others never do. There is risk, of course, but that is part of the fun for the entrepreneurial personality. There may be greater risk not taking advantage of these opportunities.

Fifth, we can invest wisely. This may never put us on a list of billionaires, as it did Warren Buffet, but it sure can make us comfortable. This is discussed elsewhere.


Building sound financial management

Before we go on, let's go over basic financial management. If you want to assure your financial future, you need to grasp your cash flow. You need not only to accurately know your present situation by tracking current spending but to be able to project cash flows needed to achieve specific goals.

Happily, no great study is needed. You do not need to bend over financial ledgers late at night under a weak light bulb.

Just buy and use Quicken, a system that monitors and records spending. Buy it discounted through various catalogues, student stores, or computer stores, instead of just copying from a friend, as you want to easily take advantage of upgrades and various time-saving tie ins like downloading your banking and credit card transactions, a huge convenience.

Dr. Voyageur loves Quicken. Unlike many programmes that incorporate every customer input and thus become more and more bloated in the process, Quicken continuously becomes more and more of a pleasure to use with each new Mac or PC edition. The tax savings alone from better cash management should pay for it quickly.

For tax reports, you just push several keys. Want to know how much money you will have 30 days from now? Just push several keys.

The secrets to productive use of Quicken are three.

  • First, you have to accurately set up easy to remember taxable and nontaxable expense categories, so that you can have all of the income tax information you need at the end of the year. Quicken has already set up the main categories for you.

  • Second, you must enter your income and expenses on a regular basis, so that items do not get overlooked. Dr. Voyageur does this at least once a week, and then throws the receipts in a box that he does not need to sort through at the end of the year. A lot of these can be download online, without tedious manual data entry.

    As mentioned, all reports needed for tax preparation and other purposes print out. The receipts are saved merely in case of a tax audit. When audited once, Dr. Voyageur whipped out comprehensive receipts and Revenue Canada went away empty handed. He always saves tax-related receipts for a few years.

    You need not set up a complicated filing system for these receipts. You will probably never need to access them. Just put the tax-related ones in one box and the others in another.

  • Third, you should back up your Quicken file each time that you have made entries preferably on more than one DVD or external hard drive.

As a consequence of Quicken reminders and cash flow projections, bills do not get overlooked, and you do not run short of money between paydays.


Increasing our value to others

Non students reading along should have already picked up many points. For example, the ways to earn more and to have money for major goals and other perks apply to everyone. You can work more hours. You can make yourself more valuable to your employers or customers, and thus earn more for the time worked. You can start some type of business that does not require substantial initial investment. In all cases, proper time management is essential.

Let's focus some more on increasing our value to others. If you are a student, you may be already doing this by preparing for a more sophisticated job. What can you do in the short term, however?

A few years ago, someone told Dr. Voyageur that he would enjoy reading a book called How to Sell Anything to Anybody by "The Worlds Greatest Salesman", for an inspiring "rags to riches" story. If there ever has been a title and author nickname to inspire distrust this was it, but based on the recommendation Dr. Voyageur ploughed ahead.

Believe it or not, the title was accurate, or at least to a large degree true.

No business is more competitive than retail auto sales in the U.S., and Joe Girald, the author (with Stanley H. Brown) who came from poverty, sold more new cars on an individual basis than any other person in the United States. Moreover, he sold them to people who for the most part were not wealthy.

Joe retired from the dealership, but over the years, Joe built the habit of using his time effectively. While the other salespeople were socializing between customers, arguing about sports and politics and generally wasting work time, Joe was thinking of ways to promote his business, talking on the phone with previous customers to get leads, and sending out thank you, birthday, and holiday cards to all his customers, which made him fresh in their minds.

Over time, Joe hired others to do the less sophisticated tasks like sending the cards and taking people on test drives. As a result, he was able to spend all of his time doing what he did best, closing sales. Be using his time effectively, the flow of customers through his office became extraordinary. An achievement by a man with little education.

Now, is there any endeavour where Joe's outlook would not produce rewards? If you believe his approach will not work in your employment , it is time to seek better job or to look at your situation more closely. Joe examined the world around him, and so can you.


Increasing your cash flow

Furthermore, if you want to take that ski trip to Switzerland or wherever, be debt free, own a home, and achieve other goals, it is time, as already mentioned, to reevaluate the 40 hour week. Your eventual goal is to work at a regular job as little as possible. Unlike most people, on the other hand, you do not want to wait until age 65 or 70 to achieve this.

In the short term, if you cannot significantly increase your income per hour, Dr. Voyageur again urges that you increase your working hours, but not to the point where this commitment overshadows your essential social life and proper rest. By managing your time, you should have a balanced life, while saving to achieve goals.


Other considerations

You confront other issues in financial planning such as auto insurance, leasing or buying real estate, borrowing for university tuition, and on and on.

One way to get a good overview of these is to watch the hour-long Suze Orman CNBC show available by cable or satellite in many countries every weekend.

Suze also has several fun but very helpful books you may check out at a library or buy.

The Road to Wealth: A Comprehensive Guide to Your Money--Everything You Need to Know in Good and Bad Times

9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying


Dealing with emergencies and prioritizing goals

Well, you're gaining control of your money. However, problems come to mind.

The increased part-time work that Dr. Voyageur advocates for students, for example, may not bring sufficient funds for extreme emergencies, possible increases in rent and tuition, and other unanticipated expenses, while leaving any left over for pleasurable goals.

Many "serious" goals such as buying a new home or car, having money to send children to excellent universities, and others may seem more important than ski trips or similar fun goals. Thus, you may feel guilty about spending your savings on pleasure, even if you have planned and worked hard for what you want.

Well, dear reader, if there is one thing in which Dr. Voyageur excels, it is not feeling guilty.

We cannot put off all pleasure forever. Travel and other out of the ordinary experiences help us grow as persons, and thus are justified as essential to our success and fulfilment in life. For example, Dr. Voyageur is a great believer in the "gap year" taking a year off to travel the world and to engage in new activities. The education received from this types of experiences cannot be emphasized too much.


Go to >> Investing in the stock market.

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Eating your way to financial and physiological good health

As promised, here is an easy to prepare substitute for pizza or other fast food that costs much less and hopefully makes your doctor happy, yet tastes great.

Having pizza at times can be a real treat. Having high-fat pizza or other fast food as your meal most of the time bodes ill for your future well being. So, we're going to make something else. You need

 

  • a fairly large pot,
  • some sort of pasta strainer or filter (although you can make do without),
  • a frying or other large pan,
  • smaller pan or pot,
  • high-protein thin spaghetti or other pasta (preferably whole grain),
  • salt (small amount),
  • pepper,
  • fresh broccoli or another green vegetable rinsed well and cut into bite size pieces (preferably organic),
  • virgin olive oil (expensive but you won't use much each meal),
  • fresh basil broken off from the larger stems or dried basil flakes,
  • one or two chopped dark red vine-ripened tomatoes that feel soft to the touch (try the organic section of your market), and
  • a small amount of grated good quality Parmesan cheese (which should smell good)

(Vegans can use any tasty animal-free protein instead of the cheese.)

  • Fill the large pot with some six inches of water (or more if cooking for a group) and a small amount of salt and bring to a boil.
  • Once boiling, break a handful of spaghetti in half and put it in the pot making sure that all goes under water. Stir frequently until the water comes back to a boil to avoid sticking. Believe it or not, boiling spaghetti can burn if not stirred.
  • Boil for ten to twelve minutes or for the amount of time on the package. Do not overcook.
  • While the spaghetti is boiling, put a small amount of water, salt, pepper, he cut green vegetable into the smaller pan or pot.
  • Bring this to a boil and then reduce to low heat and cover. Be sure that this also does not overcook.
  • When done, add a bit of "good fat" olive oil or "not so good fat" butter and stir. Also, add a bit of liquid from the boiling pasta, which helps the dish bind. Do not drain off the water, which contains nutrients, before serving. If you have a steamer, you may steam this dish instead of boiling.
  • In the smaller pot or pan, now add enough olive oil, put in the chopped tomatoes, a bit of pepper and salt, and cook over moderate heat (Good olive oil does not like extremely high temperatures). Make sure that you do not add too much salt because the pasta cooks in salt water.
  • Once the tomato mixture becomes almost cooked, add the basil and stir.
  • Then sprinkle with the cheese, but do not stir.
  • Drain well (but do not rinse) the spaghetti and pour over the vegetable and tomato mixture. Toss as you would a salad. If you wish, sprinkle with a bit of olive oil and Parmesan cheese, but not too much as you want this to merely coat the pasta, not to overwhelm it. This is true Italian style.

Good? You bet. Healthy? More than before. Dishes? Yes, but if washed before the food sticks, they clean quickly. Enjoy!

This dish, by the way, modifies easily. You may substitute green or yellow squash for the tomatoes (or add these to them), put in small amounts of low-fat turkey sausage or nonfat soy sausage, vary the type of cheese, add oregano, include well-rinsed broken spinach leaves with larger stems removed just before done, add cream for more richness, and on and on.

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