More than half of U.S. working adults say they’re behind in retirement savings — including 37 percent who feel “significantly behind,” according to a recent Bankrate survey.
I’m a debt-free millionaire, and soon-to-be retiree who teaches financial freedom habits to those who feel behind in their money goals. Unfortunately, I learned that many people try to catch up in their retirement savings by investing into the stock market before they can really afford to.
While the stock market can be a powerful way to build wealth, it’s not guaranteed you will make money, especially if you are not able to invest long term because your foundational finances are not solid.
Here are five essential steps you should take before making your next investment into the stock market. These habits helped me to save and invest more than $1.7 million before age 40, as a first-generation, Filipino-American woman and self-taught money nerd.
Keep One Month’s Worth of Expenses In Your Regular Checking Account
Referred to as your cash flow cushion, I recommend you keep one month’s worth of living expenses in your regular checking account where you typically pay your bills. This guarantees easy access to cash for everyday expenses without needing to dip into your savings or investments, and allows your bills to run automatically.
Not only does this make it easier to focus on learning the new skills required to be a great investor. It allows you to move away from living paycheck to paycheck by always being ahead of your monthly bills.
Build a ‘Stuff Happens’ Fund In A High-Yield Savings Account
In addition to your cash flow cushion, I recommend stashing one more month worth of expenses in a high-yield savings account. Rather than referring to this as an emergency fund, I refer to it as my “stuff happens” fund because accessing this financial safety net doesn’t have to be a life-or-death event.
It’s safe to assume that unexpected things will happen regularly, even if they’re not serious in nature. Ensuring you have a buffer for unexpected expenses not only provides peace of mind. It ensures you can afford to lose money in your investments without jeopardizing your daily necessities.
I specifically recommend a high-yield savings account because many of them are offering around 5% in interest. This is a way to grow your cash without much risk, as long as the bank is FDIC-insured.
Maintain A Monthly Budgeting Routine For At Least 6 Months
If you are not willing to commit to a monthly budgeting routine for at least six months, it’s unlikely you will have the patience or discipline to become a strategic investor. Understanding your spending habits and controlling your finances are essential in identifying areas where you can afford more investing in the future.
I’ve budgeted consistently every month since 2016 using three basic categories. Because of this consistent habit, I was able to identify extra funds that I could risk in the stock market without worrying about whether or not my bills would get paid. Consistent budgeting is the cornerstone of building a strong financial foundation before you can seriously invest in the stock market.
Eliminate All Credit Card Debt
I often get asked the same question: Do I pay off debt or do I invest? If the type of debt is credit cards, focus on paying off all of it before you invest any more into the stock market.
Credit card debt often comes with high-interest rates, ranging from 15% to 25% or more. Even a well-performing stock portfolio might net only an average annual return of around 7% to 10% — and that’s if you know what you’re doing.
This is a matter of simple math: The interest you’re paying on your credit card debt is likely far outpacing the returns you’d earn from your investments, leading to a net loss in your overall financial situation. Especially as a casual investor, it is unlikely you will earn any returns in the 15% to 25% range in the short term. Once the credit card debt is eliminated, you’ll have even more cash flow to put toward future investments.
Open An Individual Retirement Account
Consider opening an Individual Retirement Account to take advantage of the tax benefits that can help your retirement savings grow more efficiently. Investing in an IRA allows your stock market investments to save hefty taxes and the penalties from withdrawing early. This will encourage you to keep those dollars invested for the decades required to make any meaningful returns.
Investing in the stock market is a risk. It’s even riskier if you don’t have a solid financial foundation. By following these five steps, you can invest in the stock market with the confidence you need to make it a long-term habit, instead of a short-term fix.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
