Easy Cashflow Cookbook Recipes for Financial Wealth
Simmer your spending, deglaze some debt, noodle your net worth every now and then, and last but not least, toss out toxic ingredients. Acting on dozens of healthy financial recipes could mean your portfolio could be a whopping $2 million bucks!
Seems crazy when you think about it. How 60 easy financial recipes could yield a family a 7-figure portfolio after 20 years of diligent savings and proper investing – but that’s the truth. That’s the premise behind Cashflow Cookbook, a unique personal finance book written by Gordon Stein – who uses ingredients, cooking, and recipes as metaphors to show you how you might be able to amass a small financial fortune.
I previously published a review of Cashflow Cookbook here but for today’s post, I thought I would take Gord’s financial healthy eating makeover myself and see how well I stack up against some of his wealth-building suggestions.
Home expense saving opportunities
- We already bundle our home and car insurance for additional savings.
- We use a home alarm system now but we will drop that expense in the coming year when we move into the condominium. Projected savings ~ $400 per year.
- “Grab a snow shovel” – I wish! Our driveway is too large for heavy snowfall efforts so like all our neighbours we pay for snow removal services each winter. We won’t have that expense in our condo next year. Projected annual savings $400 per year.
- We already use a programmable thermostat and our home is largely energy-efficient with high efficiency appliances throughout. Our lights are all LEDs. Not much more work we can do here.
- “Manage the mortgage” – we’re doing our best on this. We make bi-weekly accelerated payments and we used a mortgage broker to help us negotiate a great rate on our current mortgage.
- We no longer own mortgage life insurance – and neither should you! A bad product for you but a great product for the lender! Focus on these forms of insurance instead for the best coverage for the best price.
- “Fix it yourself” – as much as I can and I’m able, I do it.
- Storage locker? No way for us. That means you have too much crap stuff.
Bottom line? We could probably save another $1,000 per year by making more home expense improvements including our upcoming move in 2019. Saving just $1,000 per year @ 7% rate of return over the next 20 years should deliver almost $44,000 to our portfolio. (For TFSA calculator fun, check out my links to various great calculators and FREE online planning tools here.)
Car & transportation saving opportunities
- We carpool where we can and don’t need to use any navigation app to do so – to cut commuter time or costs.
- We work from home now and then, and will continue to do so over time. Some more savings over time.
- We (luckily) don’t pay for parking at work as part of our commuter costs. We might pay for parking a handful of times per year. Zilch for savings really.
- We have already long since signed-up for a couple of gas retailer loyalty programs and we often use some of our cash-back money earned from our credit cards to buy a handful of car washes every year.
- “Drive gently” – we follow (mostly) eco-driving techniques already.
- Given where we live, just outside the city of Ottawa, we cannot always walk to amenities so a car must do. I suspect when we downsize to one car in the city, associated with our condo move in 2019, we’ll save ~ $300 per month by getting rid of our second vehicle.
Bottom line? Assuming we bank the bulk of our $300 per month auto savings into our TFSAs over the next 20 years, averaging 7% rate of return, we’ll have an additional (and surprisingly!!) $153,000 more to our portfolio. Wild eh?
Food & drink saving opportunities
- “Stop paying for water” – done. Although we buy the odd bottle of water when out at festivals, sporting events, etc. it’s far from a daily occurrence. Savings potential per year $100.
- “Go generic” – we do that, on occasion. If we avoiding brand names I’m sure we could save a few hundred bucks per year but then again, good food and good tastes are important to us.
- Consider frozen fruits and vegetables – rarely. We prefer fresh produce as much as possible. Potential savings ~ $500 or so per year if we avoided that (but we don’t really want to).
- “Eat less meat” – sure, potentially, but we enjoy a nice salmon on the BBQ every now and then. We’re not about to give that up.
- “Love the sale bin” – we have purchased food from it from time to time but we’re far from regulars. Potential savings to increase use of the sale bin ~ $500 per year.
- We don’t often buy coffee or tea when we’re out – so we’re good there.
- We pack of lunches often for work.
- We routinely make grocery lists and stick to them.
Bottom line? We could probably save another $1,000 per year by making better grocery choices. Assuming we bank this amount, saving $1,000 per year on food and drink @ 7% rate of return over the next 20 years should deliver yet another $44,000 to our portfolio.
Household saving opportunities
- We rarely take our clothes to the dry cleaner, not because we don’t wear clean clothes (!) but we don’t buy clothes that need this type of care.
- Get creative with the kid stuff – we don’t have kids. Cats are our kids.
- We avoid wasting money on clothes. We avoid buying what we don’t need or wear. We prefer quality over quantity.
- We often ask or look for things that can be shared, reduced or found for free.
Potential savings? Largely nil.
Lifestyle saving opportunities
This classification of savings looks at what we enjoy (or avoid) accordingly.
- We stream online often for free although we do have an Amazon Prime membership that costs us < $100 per year.
- We take advantage of free sites for our reading. We do buy the odd book and ebook. Negligible savings.
- We already use Groupon and other discount codes when shopping.
- We take advantage of walking trails in our current neighbourhood and I ride my mountain bike twice per week for exercise. No need for a gym membership.
- Although we still have Rogers cable (I love my live sports on TV) we have negotiated for better rates. We use Netflix.
- Not that we’re travel discount pros (yet) but we do take advantage of our modern sharing economy when travelling; using our loyalty points for travelling; getting great deals on Airbnb for accommodations, and more.
Potential savings? Arguably nil but we enjoy travelling so it’s hard to put a price on fun!
Financial saving opportunities
- I do our taxes and for the most part, I’d like to think I’m decent at them; maximizing tax savings opportunities.
- We own term life insurance to get the best coverage for the best price.
- We don’t pay any bank fees.
- We make bi-weekly accelerated mortgage payments (see above) and we make lump sum mortgage payments where we can to reduce our mortgage, faster.
- We avoid making lots of foreign exchange costs.
- We have reduced our investment management costs to less than $500 per year. This includes all ETF fees, buying and selling costs. I figure that’s pretty good. What about you?
- We own some stellar cash back credit cards. Typically, we earn about $500-$600 or so in cash back from our credit cards each year so the money earned back from their use far exceeds the costs of the cards – only one of them has an annual fee anyhow.
Potential savings? Arguably nil given we don’t pay any bank fees, we have largely optimized our investments to reduce money management fees on the funds we own, we do what we can to self-insure, beyond term life insurance coverage and existing coverage provided at work.
We’re far from perfect, and this post is reflective of that!
It’s encouraging to know even though we’re doing a number of things right, there is more to realize when it to comes to a very healthy financial diet. Using the principles found in Cashflow Cookbook, I’ve calculated our future potential savings could be worth close to $250,000 if invested wisely over the next 20 years!!
That’s a huge incentive to make some changes if we want to pursue them.
Small financial changes, made consistently, saved diligently and invested very wisely over time will make a HUGE difference.
What financial changes have you made in recent years? What changes are you considering to improve your family’s financial health? You can check out my review and interview with the author of Cashflow Cookbook here – including a 10% discount while quantities last!