On August 16, 1999, the game show “Who wants to be a Millionaire?” was launched on ABC television. In order to win the grand prize, contestants had to answer a series of multiple-choice questions. Over the 21 years that the show ran, 12 people won the grand prize of $1,000,000. The show was such a big hit both in the United States and Canada that it won seven Daytime Emmy Prizes. The popular magazine, “TV Guide”, ranked it No. 6 in its 2013 list of the 60 greatest game shows of all time. The show was very entertaining and proved the power of the dream of becoming a millionaire.

If you want to become millionaires the old-fashioned way, most of us must earn it by working hard and investing what we can. Having a gap between net income and living expenses is vital to having the seed money to invest. A big question that everyone asks is, “what do I invest in?” That is the $64,000 question that each individual person needs to answer for themselves. The reason that I am answering this question vaguely, is because in the free-market economy in which we Canadians live, each of us must exercise free will to find our way to build wealth and financial freedom. Thomas Stanley’s books, “The Millionaire Next Door” and “The Millionaire Mind” are two excellent books to study if you want to develop the necessary wealth building mentality.

There are several money-making factors that are vital for building wealth. The biggest two, in my opinion, is the rate of return your investment gets you and the other is time in the market. For example, if you were to invest $500.00/month for 45 years and earned an after-tax compound rate of return of 5%, you would become a millionaire. Here’s the math:

Present Value: 0

Interest Rate: 5%

Payment: $500.00

Payment Periods: Monthly for 45 years (540 payments)

Future Value: $1,013,218.65

This illustration, albeit, simplistic, shows that “time” is every investor’s best friend. For most people, finding money to invest and having the discipline to stay invested for a long period of time is the challenge. The proverb, “The journey of a thousand miles, starts with the first step.” It is never too late to start!

Al’s nuggets:

1) If you want an extra $5,000 per year, earn or save $13.70 each day$$

2) If you have a job with a group retirement plan, embrace it!

3) Enjoy this classic advertisement! https://youtu.be/aMPu99_Xvjw

Today we learned of the passing of Queen Elizabeth II.  Our queen was the sovereign of Britain and the Commonwealth for 70 years.  For those of us who went to school in the 60’s and 70’s, it was not uncommon to have seen her picture in our classrooms and to have sung “God save the Queen” after singing,” O Canada” every school day morning.  These traditions are fond memories for many of us and at times, we often wish for those traditions to continue for the benefit of our children and grandchildren.

In July 1982, my wife and I were invited to attend the State Dinner in honour of Princess Ann, Queen Elizabeth’s oldest daughter.  At that time, our Uncle Hazen Argue was Minister of State for the Canadian Wheat Board.  He arranged for us to be invited to this prestigious affair as a belated wedding present.  Our table guests included the pilot of the jet that transported Princess Ann and her entourage across Canada and one of the Princess’s Ladies in Waiting.  This lady had the evening off from her duties, other than she had to be nice to us at the table!  This dinner was the first big event in public life that I attended, and it made an indelible mark on me.  This state dinner exposed me to people and experiences that I did not know existed other than in the newspapers or on television.

This experience got me to read more widely and to seek adventures beyond the normal life around me.  It reinforced my understanding that my small-town experiences, agriculture diploma and camping from the back seat of my car were not the sum of all adventures and opportunities available for me to embrace. 

I was able to build upon my solid rural Saskatchewan foundation by adding both formal and informal education which also included many different experiences. The inspiration of meeting a member of our Royal Family and the entourage that attended them spurred me on to a rich life that I did not know was achievable.  The ability to inspire is perhaps the value that the monarchy offers to Canadians today. 

I have just finished my annual education session by attending the 20^th annual Canadian Institute of Financial Planners.  In order to maintain my Certified Financial Planner (CFP) designation, we need to have 25 continuing education credits each year so that we can continue to add value to our clients and community each year.

This year’s topics included technical information on taxation, family business succession concepts, fixed income and equity investment opportunities and transitioning ideas from one phase of life to another.  We also learned that perfectionism can be overrated as it often leads to procrastination.  In conclusion, we are grounded by solid traditional values while being adventurous in our work and business.

Al’s Nuggets:

1.  Read and study the things that are important in your life.
2. Stopping something is often better than starting something new. 
3. The Niagara Falls are very impressive.      
4. The word “retirement” is not in the bible nor in any other religious book in the world.  We are to be a contribution to those around us for as long as we can function.
5. Don’t rely on your spouse, children, boss, “society” or the “government” for your happiness.
6. Don’t confuse your self-worth with your net worth.
7. Find ways to increase your margins.  Finding the extra dollar either by increasing income and/or reducing costs is where wealth is built.

I have had the benefit of travelling to many places in the world.  In every city and town, one of the common coffee shop conversations is about the state of the roads and how horrible the potholes are.  When we were in Vienna in 2015, the morning radio show, invited people to phone in to describe the state of their roads.  In Ottawa, it was purported that the reason the truckers could not leave was because their trucks could not get out of the potholes!  While in Mazatlán, the joke was to book a massage immediately after taking a taxi ride! 

Recently, while driving on Highway 3, I hit a pothole which resulted in my car’s right front tire to lose its balance.  After banging through the rough spot in the road, I could feel the car shake when I drove faster than 80 kms/hour which made the remainder of my trip home less comfortable.  I took my car to my favorite tire store, where they were able to rebalance my tire by adding a lead counterbalance weight on the rim.  I can now drive my vehicle safely and in comfort.  Thank you to the gang at Integra Tire in Cranbrook, BC!

I relate this real-life incident to illustrate the importance of living a balanced life.  Two favorite business commentators of mine, John Maxwell and Zig Ziglar, write and speak constantly that if you want a long and happy life, one should consider ways to be in harmony in all areas of your being.  Rabbi Daniel Lapin encourages us to consider his 5 “F’s”:  These are:

1. Fitness
2. Friends
3. Family
4. Finances
5. Faith

The Rabbi observes that people that are mindful of these 5 domains are more likely be enjoy a contented and resilient life.  I will share a short illustration of how this did not work well for me.  When I was in my mid thirties, it was common for me to be busy in many different organizations.  The busy-ness of that time resulted in a gradual weight gain to the point that I struggled with seeing my toes on the weigh scale!  The result was that I was making many acquaintances but few friends, I was sacrificing family time for business time, I was making lots of money, but my spiritual life suffered because I sacrificed my day of rest for fleeting success.

Eventually, I figured out that by getting my “tires balanced”, I could enjoy everything in abundance by being more selective in my priorities.  Henry Cloud, the author of the series “Boundaries” encourages us to learn to say “no” to things in order to say “yes” to a good life!

Al’s Nuggets:

1. Focus on living an integrated life
2. People prefer to do business with happy, energetic and rested people
3. Faith matters because it informs your morals and ethics

When we got married in 1981, my wife thought she had landed an up-and-coming guy! This was because I had a nice car, some money in the bank, a job, and some decent clothes. My car loan was only $4,000 and I had $7,000 in the bank. My wife, on the other hand, had just started her career as a teacher. She also had benefits, a pension, and no debt. Her car was a 1967 Meteor Rideau that she owned outright. Its best feature was a massive trunk that could haul hockey equipment and sticks in with no effort at all! Our combined net worth at that time was around $5,000. We felt that we were loaded!

It only took several months to realize that our financial future was not as rosy as we thought. Within two months of our wedding, my car’s transmission died which cost me almost $1,000 to fix. I was thankful that I had cash to pay the bill, but our savings rate was near zero because our fixed costs like rent, utilities, charitable giving, groceries, and the excitement of starting our lives together was using up all our cash flow from our combined wages.

The job that I had at the time was with the Government of Canada. The job was considered a good job in that there was a pension and some benefits. I had been assured by people that seemed to know what a good job was, that if I stuck with it for several years, I would have a secure future. The challenge with the job was that it was monotonous and routine. Each successive day got more and more difficult for me because I was very bored with the humdrum of that job.

When my wife and I talked about our future, we talked about what it would be like when we could have a combined income of over $40,000 per year. That amount of money seemed astronomical to us, as we did not know anyone in our age and social group who earned that much money. This all changed when we met a person who earned over $80,000! (Remember, this was 1981). When we analyzed the person, his skills, and his job, we realized that this person was not much different that we were. The difference was that this person did not let his past life define his future.

I grew up as the 8th child in a family of 10. My worldview was that of a farm boy from rural Saskatchewan who understood that the secret to success was being faithful and diligent to the job at hand. I did have an education and those small-town experiences reinforced that belief. The issue that I came to understand over time was that one can be diligent and faithful to a job that you are not cut out for.

I left the government job in the fall in 1981 and enrolled into the University of Regina in the Winter of 1982. While in university, I took as many classes as I could, while working at different jobs. Some jobs were in labor, some were in retail, one was in social services and the most lucrative was in sales. Once I learned about time management, I always earned more than $25,000 per year. In my fourth year, I surpassed that, earning $30,000, and in my last year of university, I earned over $40,000. In 1987, with no debt other than the mortgage on the house that we had built in 1986 and still driving the Meteor Rideau, our combined net worth on graduation day was just over $100,000.

The big life lesson that I learned was that I was happiest in sales and most discontent when I had a “job”. Whenever I got a “sales” position, I loved the opportunity to serve people and really loved the commission cheques! It took me about a year to make peace with the idea that a good salesperson can be a valuable person in society. I do not know why I wrestled with my self-worth while learning where my talents really lay, but it was a wonderful day when I decided to follow my talent instead of childhood beliefs.

Al’s Nuggets:

1) Opportunity usually shows up in working clothes.

2) Self-employment is about seeking opportunity whereas jobs are usually about security.

3) Bloom where you are planted. If you are not content, it’s your responsibility to be become happy with your position in life.

4) We can do much more than we realize. Being organized, dedicated to a goal, and working energetically can take you a long way!

5) Net worth = Assets – Liabilities (what you own – what you owe)

Financial Planning is as varied and perhaps as weird as the people who engage in it. Everyone who is engaged in the marketplace must organize their financial affairs to some degree. In the classic book, “Basic Economics”, economist and author, Thomas Sowell, asserts that “scarce resources have alternative uses”. Everyone that I have met lives with some sort of a budget. People spend their money in ways that make sense to them. To make this point, just look at your banking transactions over the last six months. You will see patterns of inputs (income) and patterns of outlays (spending). These financial patterns are your budget.

Albert Einstein coined a phrase “a definition of insanity is doing the same thing over and over again and expecting different results”. Many people want different outcomes in their lives, however, cannot or will not make the positive change(s) required to achieve these desires. From the experience I have gathered over the years, habits and beliefs prevent many people from changing their income levels and spending patterns. Small changes can make a big difference over many years. That is the power of compound interest in one’s life. That said, I will recount a story early in my financial planning career.

I went to my first big financial planning conference in 1996. This event was in San Francisco, and it was a big deal for a guy from small town Canada. The event had people attending from all over the world and there were more people at the convention than were living in my hometown! At that conference, I was introduced to a gentleman by the name of Bruce Etherington. Mr. Etherington, a Canadian, was licensed to do business in both Canada and the United States. (I was very impressed by this!) His presentation was simple and easy to understand. His three questions became central to my presentations to my clients for the remainder of my career. Mr. Etherington’s three questions are:

1) What if you live too long? It is not uncommon for Canadians to live on average, well into their mid to late 80’s. This means that people can live in retirement for more than 20 years.

2) What if you get sick or disabled in your working years or in your retirement years? Being sick or infirm can be very costly, either in lost wages or in having increased care costs.

3) What if you die too soon? No one knows the hour of one’s death. Having money in the form of life insurance or substantial cash on hand, is a responsible thing to have.

I recently finished a course that educated me about the Canada Pension Plan. In one chapter on “Longevity”, the author cited that those living in 1800, had an average lifespan of about age 40. Life expectancy has consistently increased since and now stands at 82.7 years in the year 2021. All things being equal, life expectancy is expected to rise by 0.2 years per year for at least the next 20 years or more. This is important because if people are looking to retire in their 60’s, then your money need to last at least 20 years!

Al’s nuggets:

1) See the world as it really is! Loose the rose-colored glasses!

2) Embrace the discipline of developing and following a budget. Spend less than your income and you will have a rosier future! The sooner you start, the better it will be for you and your family.

3) Insurance and Investments work hand in glove as part of sound financial plan.

4) Make time your friend. 30 or 40 years of saving and investing, coupled with debt elimination, is better than getting it going when you are in your 50’s or 60’s.