10 Money Mistakes Millionaires Don’t Make

10 Money Mistakes Millionaires Don’t Make

So you want to be a millionaire.

Sigh, don’t we all. 

It might feel like a lofty goal but it turns out the underlying principles millionaires follow when it comes to their money are pretty basic. Some of them are downright boring. But they obviously work, so let’s have a look and see what we can learn.

Here’s the 10 money mistakes millionaires don’t make! (say that 5 times fast…)

1. Getting emotional over financial decisions.

Millionaires are cold hearted. The end.

Kidding! I’m kidding…

It’s not that millionaires don’t have emotions when it comes to their finances, they just know how to separate the two. How? By making a plan and automating their money.

Yup, super boring. They take the time to set up a plan for their money—by paying themselves first and automating their savings,investments, and bill payments—so they don’t have to spend time thinking about those things day to day. Having a plan is also what keeps them from freaking out and making irrational decisions when a bear market hits

Millionaires know their time and energy is limited and better used elsewhere. 

2. Thinking of themselves as rich.

Wait a minute, if you’re rich isn’t this the point?

Most millionaires—at least the ones that stay millionaires—don’t walk around thinking they’re rich and can afford anything and everything. They know there are trade offs and are frugal in many areas of their lives. Just because they can afford the most expensive car or bottle of wine doesn’t mean they’ll buy it. 

They’re clear on their priorities. They spend in the areas that matter to them and cut costs in the areas that don’t.

3. Focusing on cost over value.

Speaking of frugality… this one’s important. Millionaires don’t get hung up on the cost of something, instead they focus on value. They think long term. 

They’d rather spend a little more upfront now to buy something they won’t have to replace in a few years time. They have a sense of when things are over or under priced and buy accordingly.

Millionaires still love getting a deal like everyone else. 

4. Thinking your salary is the only way to get rich.

Your salary isn’t the be all end all to building wealth. 

Millionaires have multiple income streams. They don’t expect to make their millions from one day job, they understand the importance of diversification and have set up multiple ways to make money. Both active, through a job or businesses, and passive, through the stock market

They’re always on the lookout for opportunities and know a salary is just one piece of the puzzle. 

5. Not setting goals.

No eye rolling! Goal setting is incredibly powerful. If you’re dreaming of something that feels impossible or crazy that’s all the more reason to make it a goal. 

Be specific and write it down. Your goal might feel like a longshot but breaking it into measurable steps—a plan—roots it in reality. 

Putting a plan on it is the difference between a wish and a goal. 

6. Getting hung up on timing.

Millionaires know it’s about time, not timing. 

When it comes to investing they know focusing on timing is a waste of energy. They don’t try to time the market or pick stocks, they focus on long term strategies that ride out the ups and downs. 

They know it’s better to have time on your side and that’s why they start investing early. Once again, boring wins. 

7. Thinking wealth is a zero sum game.

You earning more doesn’t mean someone else has to earn less. 

Millionaires tend to have an abundance mindset, they see how finding a way to help more people helps them make more money, and that having more money in turn allows them to help more people. 

Look at famous millionaires you know… how did they make their money? By creating a product or service that was valuable to a lot of people. 

So it’s not about taking away from the pie, it’s about making the pie bigger. 

8. Only looking for ways to save money.

Millionaires can be frugal but they know getting ahead isn’t just about finding ways to cut costs, it’s about finding ways to earn more. 

This one also comes down to the difference between an abundance and scarcity mindset—if they want more money for something millionaires will look for a way to make more money to pay for it rather than solely seeing what other areas they can trim back on. 

Millionaires don’t view money as finite resource, they look for opportunities to make more. 

9. Hiding from their problems. 

When it comes to their money millionaires know how they make it and how they spend it. 

They aren’t ones to bury their heads in the sand. At least not the ones that want to stay millionaires. They want to know exactly what’s happening with their money, the good and the bad, because you can only solve problems if you know they exist.

Once you acknowledge something’s not working you can take steps to improve it—and this goes for a lot more than your money. 

10. Thinking it’s about luck.

Short of winning the lottery, millionaires know making and keeping money doesn’t come down to luck. 

Instead of looking at someone with a successful business and thinking,  “They’re just lucky… I could never do that!” they ask, “How did they do that? How can I do that?” They’re curious and want to know how things work so they can put it into practice themselves. 

Millionaires know their wealth isn’t accidental. Their financial success is built on a series of purposeful choices and habits—ones we can all learn something from.



This article was written by Kate Smalley of Nest Wealth, it was originally published here on July 28, 2017.

Advice for Single Homebuyers

Advice for Single Homebuyers

More than a third of first-time homebuyers in Canada are single. If you’re thinking of joining this group, here’s what you need to do and know before jumping into homeownership.

Study the market.

Identify neighbourhoods you want to live in and check to see how much properties in that area are selling for.

Next, figure out how much you can afford. Remember to include estimates for property tax, utilities, insurance and any other expenses you don’t pay as a renter (condo fees, for example).

Assemble your team.

A home purchase should involve financial, legal and real estate professionals. Before first-time homebuyers start exploring properties, they should get a copy of their credit report (www.equifax.ca) and examine it closely.

If there is a history of missed or late payments, both of which can bring your number down, start a plan to change your standing by making regular payments on time. (Caution: there is no quick fix for a credit report; beware of companies that offer to change or “fix” yours for a fee.)

If you don’t already work with a financial advisor, consider booking a meeting with one. Reviewing your entire financial picture—debts and assets, insurance and investments, as well as budgets—is something that a professional can help you understand and offer strategies to improve.

Ramp-up savings.

Pare back expenses before making a home purchase. Why? Finalizing the deal on homeownership will include one-time expenses (closing costs and land transfer taxes, for starters) that need to be paid before move-in day. Homeownership will also bring new on-going expenses (such as property tax and utilities).

Subtract what you currently pay for housing from the estimated cost of living in the new home. Put the difference in a high-interest savings account. Here is a test: if you can make that payment every month, then you likely can afford the home you have your eye on. For tips on creative ways to save for a down payment go to read:

Consider help from family.

According to a recent Genworth Canada First-Time Homeownership Survey, first-time homebuyers in Toronto and Vancouver tend to have higher down payments than buyers in other parts of the country. That is due partly to larger savings of buyers in those areas, but also to larger gifts and loans from family.

A gift or loan from family can be a great help, but this is an arrangement that shouldn’t depend only on a hug and a handshake. Consider drawing up a contract spelling out the specifics of the deal.

How much money is being provided? Does it need to be paid back and, if so, when? If your family member will be sharing the home with you, how much will each of you be putting towards regular expenses, the down payment, or the closing costs? In whose names will the utility bills be set up, and whose name will be on the property title?

Hire a lawyer to do this paper work. That doesn’t have to involve many billable hours, especially if, before meeting the lawyer, you have an open conversation with your family and agree on answers to the above.

Another avenue worth exploring is the Genworth Canada Family Plan, which is meant to help another family member get into a home for a variety of reasons, including a parent who wishes to help an adult entrepreneurial child buy a home, or a parent helping to buy a home for an adult child at a post-secondary educational facility. With the Family Plan it’s important to note that the individual occupying the home must be on title to the property along with the co-applicant. This is not intended for use as a secondary dwelling. The down payment must be from their own resources, so gifts are ineligible.

Protect yourself

Although 35% of first-time homebuyers are buying on their own, many will partner up later.

If you start a relationship and allow another person to move into your home, that person may eventually have legal rights in relation to your home. How does that happen? If you live together long enough, you and your partner may become common-law spouses and that may trigger rights and responsibilities for you both.

When do you and your partner go from couple to common-law? The amount of time you spend living together is the main determining factor and varies from province to province.

How can first-time homeowners protect themselves? With an honest conversation about expectations and specific responsibilities. The main question is what will happen to the home if you split up? Consider a cohabitation agreement (again, with the help of a lawyer) to cover everything you agree to verbally.

Make sure to also outline the nitty-gritty details of day-to-day finances: how will you split the regular bills and when will they be paid? Which one of you will be responsible for making sure those payments are made on time? If there is a major expense, such as a roof repair or furnace replacement, will you both contribute?

For more tips on creative ways to save for a down payment go to www.homeownership.ca. 


This article was written by Marc Shendale, Vice President of Business Development of Genworth Canada.

Should You Keep a Small Balance on Your Credit Card?

Should You Keep a Small Balance on Your Credit Card?

Recently the good people over at Nest Wealth published an article called “The Worst Money Advice We’ve Ever Heard”. On the list was “Always keep a small balance on your credit card”. What they have to say on the subject is spot on:

Someone, somewhere, starting telling people that keeping a small balance on your credit card is a good idea… and unfortunately it stuck. 

Man is that terrible advice. Why would you want to purposely pay interest on something when you don’t have to? People claim it helps your credit score, and although credit utilization is a factor in determining your score (the balance on your card versus your credit limit), the idea that carrying a balance month to month helps you out is a myth. 

Paying your bills on time every time is one of the best things you can do to keep your credit score up. 

So although the idea of carrying a small balance to build your credit is nonsense, it is however a good idea to use your credit card at least once every 3 months (even if you don’t have to). This will ensure the trade line is being reported to the credit agency.

If you have any other questions about your credit, or you would like to discuss your personal financial situation, please don’t hesitate to contact us anytime! 

What the Latest Interest Rate Increase Means for You!

What the Latest Interest Rate Increase Means for You!

After holding steady for two years at 0.50%, the Bank of Canada raised its overnight rate by a quarter-point to 0.75%. This is first rate hike made by the Bank of Canada in almost seven years. Without missing a step, the Big 6 banks increased their prime lending rate by .25% from 2.70% to 2.95% (except TD whose prime rate is 0.15% higher than the other banks). You can read the full bank announcement on our blog here. 

But what does this all mean for you? Well… here is what you need to know. Of course, if you have any questions, please don’t hesitate to contact us anytime, we’d love to hear from you!

If you’re a fixed rate mortgage holder, these latest changes don’t impact you at all. You have selected a fixed rate that does not fluctuate with the prime rate. You’re good to go… let’s talk 6 months before your mortgage is up for renewal! 

If you’re an adjustable rate mortgage holder, a 0.25% increase in the prime lending rate will add $13 more per month, per $100,000 of your mortgage (based on a 25 year amortization). So if you have a $350k mortgage balance, you can expect your payments to increase by $45.50. 

If you have a variable rate mortgage, your payment will stay the same but the allocation of payment to your principal will decrease. It would be a good idea to contact your Bank/Lender to ensure that they increase your payments accordingly. This will ensure you remain on the same amortization schedule. The Big Banks, like TD, RBC, and CIBC, are the most common lenders to offer these types of mortgages (although the terms “Variable” and “Adjustable” are often used interchangeably).

If you’re not sure if you have a variable rate mortgage or an adjustable rate mortgage, feel free to contact us anytime, we can look at your documents and let you know exactly where you stand. 

If you have a Home Equity Line of Credit or a personal line of credit, the 0.25% increase will add $2 of monthly interest to your payments for ever $10k you have outstanding. 

If you have an adjustable/variable rate mortgage, now that rates have started going up, you might be asking yourself, should I lock in? Well, as most fixed rates are going to be 0.75%-1% higher than a rate tied to the prime rate, you have to believe that the prime rate will increase by .75%-1% in the next year in order for locking in to make sense. Given the current state of our national and the global economy, that is highly unlikely.

5 Ways to Boost Your Financial Fitness

5 Ways to Boost Your Financial Fitness

Thinking about buying your first home?

The race to home ownership is more like a marathon than a sprint: diligent planning, pacing and strategy are the keys to success. Are you ready to approach the starting line? Here are five ways to shape up and boost your financial fitness so you’re set for success.

1. Check your credit score

First things first: order a copy of your credit report and credit score. Your credit score, which is calculated using the information in your credit report, is what lenders look at when considering you for a mortgage. Your score impacts whether or not you get approved and what interest rates you’re offered.

2. Reduce (or eliminate) credit card debt

Ideally, your credit card balance should be zero. But if, like 46% of Canadians, you carry a balance each month, make it your priority to chip away at it. You’ll boost your credit score while reducing the amount you’re paying in interest, freeing up more cash for saving and investing.

Use one – or, better yet, both – of the following strategies to make a dent in your debt:

• Make more money (i.e., take on a side gig, work overtime hours, pick up odd jobs)
• Save more money (i.e., sacrifice your satellite TV package, swap your gym membership for running outdoors, cut back on eating out)

3. Bulk up your savings

Now’s the time to save aggressively, stashing that cash in a registered retirement savings plan (RRSP) or tax-free savings account (TFSA). Use automated savings to ensure that money goes straight from your checking account to your savings, investment accounts or both.

Remember: As a first-time homebuyer, you can withdraw money from your RRSP to put toward a down payment. (Generally, you’ll have up to 15 years to pay it back into your RRSP.)

4. Stick to a budget

As points 2 and 3 illustrate, getting financially fit takes determination and commitment. It can feel less overwhelming when you’ve got a snapshot of goals and actions right at your fingertips. Sit down with your partner to create a monthly budget. And stick to it.

A smartphone app can be a game changer in keeping you organized, accountable and on track with your financial fitness plan.

5. Keep your eyes on the prize

Stay inspired, motivated and positive by remembering why you’re working so hard to boost your financial fitness: to buy your first home!
Crunch preliminary figures online to come up with ballpark estimates on how much home you can afford.
Raise your real estate IQ by watching HGTV shows, researching neighbourhoods, perusing listings and attending open houses.
That will make you a more educated shopper once you’re ready to enter the market qualified with a mortgage pre-approval. Do your research now, so you can hit the ground running when you’re ready to buy. 


This article was written by Genworth Canada’s Vice President Business Development, Marc Shendale.

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