- Hey, welcome back.
It's Nolan Matthias and today we're talking
about seven ways to jumpstart your finances in 2021
so that you can start your journey
to a million dollars this year.
And I'm also gonna tell you about a contest
where you can win your mortgage
or rent payment at the end of this video.
But before we get into it, do me that favor,
hit that subscribe button, hit that notification button,
please hit that like button
so more people like you can see this video
and leave me a comment in the comment section below.
Tell me what you're going to do
to help jumpstart your finances in 2021.
Okay, so let's get into it.
Let's talk about how to jumpstart your finances in 2021.
And I want to start by showing you
something that is very near and dear to me.
This is an autographed copy
of "The Compound Effect" by Darren Hardy.
Darren Hardy is the former editor of Success Magazine.
He's interviewed the best and brightest minds in the world
and he is somebody that even though he may not
realize who I am, even though I've appeared
in his slide deck at HPF forum,
he is somebody that I absolutely consider a mentor.
And this book has had a major impact on my life,
as has his other one, "The Entrepreneur Rollercoaster".
And his HPF forum,
which is about 15000 dollars to attend Canadian,
had a massive amount of effect
on our business in 2020 and also 2019.
So this is a guy that I absolutely consider
to be one of the foremost minds on success
and that I have learned a lot from.
And in his book, "The Compound Effect",
he talks about three individuals who,
at the beginning of a year, make three different decisions.
The first makes the decision to do the status quo
and not change anything.
The second makes the decision to maybe not be as concerned
about his intake and ultimately ends up
having a beer every single day for the entire year.
And the third decides that he's going to watch what he eats
and maybe do a little bit more fitness.
And at the end of the year
the three results are absolutely astonishing.
The original person who did the status quo
maintained his weight.
Pretty much stayed in the exact same place
that he was at the end of the year.
The second person who added a beer
probably gained 15, 30 pounds over the course of the year
without even realizing that he had increased
his calorie intake that much.
And the third person, well,
he looked like an absolute rockstar.
Fit, trim, and looking better than he ever had in his life.
And the only difference that they made
was the small decision at the beginning of the year
to make a tiny little change.
For one of the individuals,
it was to have that extra beer with his buddies.
For another individual,
it was to do a little bit more exercise.
And at the end of 12 months,
the changes in their bodies was absolutely astounding.
Now this of course was a hypothetical conversation,
but we've all seen it.
We've all seen our friends get either super fit
over the course of a year
or get super heavy over the course of a year,
or maybe ourselves, we've gotten fit or heavy
over the course of a year.
And it's directly a result of the decisions that we make,
and it's small decisions that we make
and ultimately how they compound on each other
and end up having a major impact.
And that's as true for fitness and weight loss
as it is for finances.
And it's the small decisions that we make financially
that ultimately add up over years
and end up making us either super financially well off
or in big financial trouble.
So today I want to talk about seven things
that we can do to help us move forward
so that we can start that million dollar journey today
and make sure that we're making the right decisions.
So these are my seven steps to help jumpstart your journey
to a million dollars in 2021.
Okay, so step one, right out of the gate
is to set up an auto-deposit to your investment accounts.
Maybe 50, maybe a 100 dollars.
Some sort of amount of money
that automatically every month comes off your paycheck,
out of your bank account,
and into an investment account of some sort.
Now, if you don't have an investment account,
I highly recommend for Canadians a TFSA
or for Americans a Roth IRA,
and basically take the money and make sure
that it is on autopilot so that every single month
when you get your paycheck,
it is automatically coming out of your account
and going into your investment account.
By the way, if you're Canadian
and you need to set up an investment account,
I highly recommend Questrade.
There's a link below
so that you can get 50 dollars in free trades
and it is super easy to set up.
There are no fees for holding an account
like there are at many financial institutions,
and the other great thing about it
is that buying ETFs is absolutely free.
Now what I'm gonna recommend
is if you're not already an established investor,
that you take the money that you're moving
into your TFSA or your investment account
and you invest it into a ETF or an exchange traded fund
that tracks the S&P 500 in the US.
Now Vanguard makes two of these. (bell rings)
One hedges to the Canadian dollar, the other doesn't.
You can buy a little bit of both,
buy one or the other depending
on what you think's going to happen with currency,
but I highly recommend that you take
a little bit of money every single month
and start applying it to an ETF in a TFS or a Roth IRA
so that you can start building out a portfolio.
Now why a TFS or a Roth IRA?
Well, the reason why is because you're using money
that you've already paid taxes on,
investing it into those accounts,
and then your growth over the next 10, 15, 20, 30 years
is going to be tax-free
as a result of it being in that type of an account.
So we always tell people
that they should be investing in their accounts
to allow their money to grow tax-free first,
then in their accounts
that maybe they get a tax rebate from,
like an RRSP or a 401(K),
but then have taxes down the road,
and then into normal taxable accounts.
The second thing I'm gonna suggest that you do
is to establish your net worth.
It is incredible to me how many people
don't know what their net worth is.
And in my mind if there's one thing
that somebody should be tracking,
if they're only tracking one thing,
it should be your net worth.
Because it is the single financial metric
that tells you exactly what's going on
in your financial world.
And how you do this is very simple.
You add up all the things that you own,
the value of all the things that you own,
and then you subtract all of your debts.
And what you wanna do is you want to take a look at this
at least on a monthly basis.
Back when I was younger I used to look at this
on a day-to-day basis.
Yes, a little bit of a financial nerd here.
And you want to make sure that on a monthly basis
that your net worth is going up.
And if it's not up going up,
it either means that you're spending too much
or you're losing too much on your investments
and you need to reassess your investments.
But it's a real easy way to gauge
how you're doing financially.
And honestly, if there's one thing
you take out of this video,
establish what your net worth is
and make sure that you're continually tracking it
on at least a monthly basis
pretty much for the rest of your life.
Okay, now the third thing I'm gonna suggest that you do
is if you own a home, increase your mortgage payments.
And you can do this by using your prepayment privileges
that allow you to increase your payments,
and do it by as much as you can,
whether it's five, 10, 15, 20 percent, whatever it is,
just increase it by a little bit.
Because that little tiny increase,
even if it's only five percent,
is something that you're not going to notice
coming out of your bank account on a monthly basis,
but it is something that over time will compound on itself
and help you pay off that mortgage significantly faster.
Now don't do what Jen and I did.
I explained this in our video, The Big Mortgage Mistake,
where we increased our payment three times
over three years by 15 percent each year
and ended up increasing our payment by 45 percent,
not even realizing that we'd increased our payment
by that much.
But do it in small increments,
and absolutely a 100 percent
your mortgage will start to pay itself off faster.
And also, every time you pay off your mortgage
a little bit more, that is an increase
to that net worth metric.
Now, if you don't own a home, I'm gonna suggest
that you take 10 percent of your rent payment
and put it into a bank account, a savings account,
every single month.
And the best way to do this is to set it up in an account
that isn't at your normal bank.
So you can use something like Tangerine,
which I'll put a link in the description below,
and ultimately have that money come out of your bank account
and go and sit somewhere where it's a little bit harder
to access by having it in an account
that's not at your normal bank
that's tied to your normal, everyday banking transactions.
And set this up so it's done automatically.
You automatically have Tangerine or whatever the other bank
pull the money out of your account on a monthly basis.
And this is going to become your down payment funds.
And again, the key here is to set it up so it's automatic,
so it's done for you and you don't have to think about it.
The fourth thing I'm gonna suggest
is that you cancel at least one subscription.
Everyone has these, whether it's Netflix or Crave,
or subscriptions to different apps.
Find one that you aren't using and cancel it.
Just get rid of it.
And bonus points if you can find two or three or four
that you aren't using that you can get rid of.
This single piece alone could save you hundreds
if not thousands of dollars every single year.
We've had clients,
when we pull their credit card statements
and looked at them in detail
when we're doing financial coaching,
find six, seven, 800 dollars in a year
that they can save by simply getting rid
of a few things that they don't use.
Now, the fifth thing I'm gonna suggest
is that you find one thing of value
that you don't use and sell it.
Put it on Kijiji, put it on eBay, put it on Marketplace,
put it somewhere and just get rid of it
and consider this the start of your financial decluttering.
Getting rid of the things that you bought
that you no longer need that you can turn into cash
that you can ultimately put into
either your down payment savings account,
apply to your mortgage, or put into your investment account.
By the way, I'd probably put it into my investment account
before I did anything else,
but whatever you're using that money for,
understand that this is what we consider
financial decluttering.
Now bonus points if you can find one thing per day
to sell for the next 30 days,
and leave me in the comment section below
how much money you made selling those 30 things.
Okay, so step number six is to set up
some sort of spending tracking system,
whether it's a Mint or a Quicken,
there are lots of apps that you can use to do this
that will actually connect right to your bank accounts
and your credit cards.
Set them up so that you can track your finances
on a daily basis.
I can tell you unequivocally
that the years where I've tracked my finances
on a regular basis are the years
that I have absolutely a 100 percent
added the most to my net worth.
Because when you're thinking about every single penny
that you can make and every single penny that you can save,
it adds up quickly.
Just like in "The Compound Effect",
small changes create massive results.
And step number seven,
and this one in my mind is my favorite,
is to find the one thing that is not a mandatory expense.
So not housing, not a car,
not something that you absolutely need,
and something that is just something
that you spend money on on a regular basis.
Maybe it's going out to eat.
Maybe it's alcohol, maybe it's your grocery bill,
and take it and reduce it by 25 percent for the next month.
Just see if you can reduce it by 25 percent.
I think you'll be surprised by the fact
that you absolutely can
and that it's not going to make a huge difference
to your lifestyle and how you feel on a daily basis.
In fact, you'll probably feel better
because you're gonna have a pretty significant
amount of cash left in your pocket at the end of the day.
And if you do those seven things,
or some of those seven things,
or just one of those seven things,
I can tell you that absolutely 2021 is going to start you
on your path to your million dollar fortune.
And if you don't,
well, I'm sorry you watched this video
all the way 'til the end and didn't get anything out of it.
But on that note, let's talk about that last piece
which I promised you at the beginning of the video,
which is how you can win
your monthly rent or mortgage payment.
So here's what I'm gonna do.
I am on a mission to hit 10000 subscribers.
And when I do, I'm gonna pay off one lucky subscriber's
monthly rent or mortgage payment.
And all you have to do to enter
is hit the subscribe button below.
That's it.
Hit the subscribe button and you're entered
to win your monthly mortgage payment
when I hit 10000 subscribers.
And on that note, do me that favor,
hit that subscribe button, hit that notification bell,
and please hit that like button
so more people like you can see this video.
And we'll see you on the very next one.
Cheers.