Why you may not need any more money advice

A few months ago I read a list of top Canadian personal finance books to read to get smarter about your money.  I think it was in MoneySense magazine.  Anyhow, in no particular order, here are some of those books and a link to them on my site should you want to check them out:

  • The Wealthy Barber Returns, by David Chilton
  • Moolala, by Bruce Sellery
  • Money Talks, by Gail Vaz Oxlade
  • Wealthing Like Rabbits, by Robert Brown
  • The Automatic Millionaire, by David Bach
  • Stop Over-Thinking Your Money, by Preet Banerjee
  • Millionaire Teacher, by Andrew Hallam
  • A Wealth of Common Sense, by Ben Carlson

I’ve read almost all of these books – they’re good.  However the advice you’ll read about in them is – spoiler alert – not new.

  • You should get out of debt.
  • You should spend less than you make.
  • You should establish and maintain an emergency fund.
  • You should make savings automatic.
  • You should invest some of your savings for long-term growth.
  • You should set some long-term investing goals.
  • Once invested, you should stay invested.
  • Once invested, you should keep your investing fees very low.
  • You should diversify your investments.
  • You should mind your taxes.
  • You should obtain adequate life and disability insurance.
  • You should continue to educate yourself.
  • Money doesn’t mean much if you don’t have your health. You should do what you can to stay healthy.

Before I get totally blasted by the authors let me state these authors did a fine job writing about money principles in their own unique way.  That’s what makes these books enjoyable and engaging – their stories were different on these same subjects.

The big takeaway for me after reading my list above is most Canadians don’t need any more personal finance advice.  There is mountains of it.  This blog included!

What most Canadians need is a behavioural change.  Myself included.  I’ve give you some examples of my own bad behaviour:

  • We probably bought too much house for what we need.  We’ll live here for now and enjoy it.
  • I haven’t killed all debt yet (mortgage debt remains). We’re working on it every month with prepayments.
  • We bought a new car many years ago. Buying used would have saved us a couple thousand dollars.
  • It took us years to establish an emergency fund.   It wasn’t a big focus for us until a few years ago.
  • Only in recent years have we made savings fully automatic for investing purposes.  I admit, I was lazy on this one.
  • I wasted 10 years of my investing career (in my 20s) invested in high-priced mutual fund products. I used to sabotage my portfolio.  My wife and I now appreciate the value of low-cost financial products.
  • I recognize every year I get older I need to eat better and exercise more if I want to live longer. I’ve learned this is the greatest asset I’ll ever have.

Damn.  Behavioural change is tough.

For adults it can be especially painful because behaviours (good and bad) get ingrained over time.  We also lose our objectivity as we get older – our perceptions are our reality.  As a result, as we age we find more reasons to avoid change than embrace it.

There are dozens of behavioural change models but knowing what to do with your money is only a small part of the equation.  People need to deeply understand their relationship with money, embrace it or become invested to change it, and then act accordingly.

Personal finance is more like an exercise in psychology than math…

Preet Market

Until behavioural finance can become more mainstream most Canadians will continue to do what they always do when it comes to money.  This is even when they know better.

In closing by subscribing to my site it is my hope you’ll learn about my good (and bad) financial behaviours – so you can reflect on your own relationship with money.  I developed this site to share my flawed existence with money and tell stories about others as well.  It is my hope you embrace it.

What’s your relationship with money?  Do you need more saving and investing advice?  Let me know in a comment.

Mark Seed is the founder and editor of My Own Advisor. As my own financial advisor, I've grown our portfolio from $100,000 to well over $500,000. Our goal is to own a $1 million investment portfolio for an early retirement. Come follow my saving and investing journey by subscribing to my site.

25 Responses to "Why you may not need any more money advice"

  1. My relationship with my money is good, I do what I can with what I have. I could save more but for the moment it seems to be what I can do. I start small but it will growth over time.

    I could maybe use more advise on saving in couple with one that learned to spend a lot since he/she is young.

    Reply
  2. Ah yes, that old adage about knowing then what I know now. It’s too late for me to change my ways to any great extent. Thankfully I got lucky and did a few things right when I was young. Time does help to reduce the effects of some mistakes when it comes to investing. I also don’t beat myself up over some things. Considering the changes in finances over the years there are some things that just either didn’t exist or couldn’t be done when I started out. Remember when we had to buy stocks in board lots through a stock broker?

    I think you’re lucky that you only had seven bad behaviours. I’m considerably higher than that. 😉

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  3. Good Post Mark.
    I agree. For people who know what needs to be done – the fight is all about behavioural in my opinion.
    I do find however, that there are a LOT of people that really have no idea and simply expect the future to work out for them somehow.

    Reply
    1. Personal finance and the relationship with money is absolutely a behavioural battle through and through. I find it challenging myself from time to time but I know I need to stick to my plan.

      I can’t imagine letting just “nature take its course” with me…

      Thanks for your comment.
      Mark

      Reply
  4. While I enjoyed economics in University I always struggled with what I learned as the majority of models pre-supposed that people are rational individuals who would make rational choices. When it comes to money it really does not appear to be the case for the majority (I did find out about behavioural economics, but much later).

    While my knowledge about budgeting and finances has grown in leaps and bounds I am ready for the next step of investing. Specifically, I would like to start with investing for my daughter’s RESP. Any chance you might interview Mike Holman who wrote “The RESP Book”? Or have a book giveaway?

    Great post as usual! Thanks Mark

    Reply
    1. It sounds like you are Heather. Kudos to you. I’ve been meaning to reach out to Mike and interview him, so I’ll do that this weekend and see what I can do to post something with him (if he’s open to that) and of course giveaway a few copies of his book. Thanks for the idea for content 🙂

      Mark

      Reply
  5. I’ve been reading your weekly emails for a couple of months now. On your recommendation, I just read “The Millionaire Teacher” and am going to read the 2nd edition which includes a chapter on “robo-advisors”. I already follow everything you say in this post: save lots, I’m debt free, RSP and TFSA maxed. I need to reduce fees: currently I’m working on getting rid of my mutual funds (two at 2.4% and one at 1.9%) to reduce my fees, and want to be a bit more pro-active investing my term deposits (earning very little). So I need to shift about $100,000, however, though I know I need to invest in ETFs, there are still a number of choices I’m having a hard time making. So here’s how I see my choices: (1) Use a discount brokerage and follow Andrew Hallam’s formula; (2) Invest with a robo-advisor; (3) Index funds (Tangerine or TD e-Series). My other concern is that with markets so high, is now a good time to invest $100K all at once?

    Reply
    1. I forget which book I read this in (might have been Millionaire Teacher) but you have a 60% statistical chance of achieving higher return by investing earlier than later, i.e. one lump sum. In terms of the market being too high – look at it this way. Unless your money is currently sitting in cash under your mattress, chance are the equities you own are also valued high. So you sell high and buy high. Should be a wash… Tangerine is a great option but I personally consider fees of 1.05% a little too high. However, for someone with less experience in trading and less knowledge on using trading platforms etc… it’s probably your best option. Good luck!! Feel free to reach out to anyone on here, always someone ready to help out 🙂

      Reply
      1. What about “robo-advisors”? Cheaper than Tangerine, which did seem expensive, relatively speaking. WealthSimple or WealthBar for example. I have looked into QTrade, but not sure if what I what I would save would make it worth if for me (with zero experience) in comparison to a robo-advisor.

        Reply
        1. I have never tried Robo advisors to be very frank but here are my two cents on it. 1) Index funds 2) Are costs cheap
          If you can put 100% of your money into index funds that have very low management fees (talking .20 at most) then it may well be worth it… I don’t know first hand but would assume that having zero “emotions” is a huge help. I personally stick to questrade and BMO’s investorline. Just my personal preference.

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          1. I’m in full support, like you Max (and Beth) of robo-advisors but personally, at least to date, I’m a full-on DIY investor. I wouldn’t rule out robo-advisor services for myself/for my wife when I no longer have any interest in being as “hands on” as I am now.

    2. Debt-free, RRSP and TFSA maxed? Impressive.

      Absolutely you need to reduce fees Beth. Fees are forever and you never see that money again.

      I’m full-on DIY investor, my situation is likely different than yours, and I can’t give money advice for many reasons on this site – but your choices are good ones:

      (1) Use a discount brokerage via Andrew’s formula – something like 25% each in CDN, US, International and CDN bond index.
      (2) Invest with a robo-advisor – I think this is an excellent choice.
      (3) Index funds (Tangerine or TD e-Series) – good to very good choice but you don’t get any portfolio rebalancing.

      I can appreciate the hesitation but really, the best time to invest was yesterday (at least I believe so).
      http://www.myownadvisor.ca/the-best-time-to-invest-was-yesterday/

      Worse-case, you could always limp in.

      Reply
  6. Mark,
    That is an excellent and very informative summation of those personal finance books.
    If someone is ‘financially lost’ or just doesn’t know where to begin in addressing their finances, I could just point them to your 13 bullet points above. Nice stuff.

    Reply
  7. Excellent post again Mark! The books are all great and I have read most. Can you suggest a book (blog,etc) addressing the de-accumulation (?) phase of life? A lot of info exists about accumulation but not much about drawing down upon retirement. Like many folks we have a basket of dividend paying stocks, etfs, mutual funds, and cash along with a DC pension plan. All scattered amongst RRSP’S, TFSA’s and non- registered accounts. What does one do after drawing their final pay cheque?? Thanks and enjoy you weekend

    Reply
    1. Thanks for being a fan Chuck.

      One of the best decumulation books I’ve read is this one:
      http://www.myownadvisor.ca/daryl-diamond-your-retirement-income-blueprint-review/

      I hope to interview Daryl this year. I have a few questions for him on that front. I’ll see if I can get some copies to giveaway as well.

      For what it’s worth, this is largely our plan although it might change in the coming years to adjust to our needs and wants:
      http://www.myownadvisor.ca/cash-wedge-opening-investment-taps/

      Let me know if you have further questions and I’d be happy to put together a blogpost or two on the subject. Lots of “advice” for accumulation years (i.e., max out TFSA and RRSP), not so much on winding things down and creating a reliable income stream.

      Reply
  8. Completely agree. I’ve been astonished to find how much more mind there is than math when it comes to finances in my own life. However, sometimes one person’s particular story can strike a chord with you and give you just the motivation you need to get the right money mindset.

    Reply
  9. For the longest time my relationship with my money was to ignore it and pretend it didn’t exist. To acknowledge it I would have to acknowledge all the years that I had wasted not having my money work for me, and I’d have to buckle down and actually understand money. I’ve only recently stopped treating it like an unloved, unwanted step-child. Our new relationship has been rewarding, and I’m glad we patched things up.

    Reply
    1. Well put. I’ve finally gotten most of my act together but it took me, sadly, until my early 40s to do so. Such is life. Live and learn and try and pay it forward. Thanks for the comment.

      Reply

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