How to

dollars

Author of the bestseller HOW TO GET RICH USING OTHER PEOPLE’S MONEY

Advice on RRSP’s,planning and more!

“An insightful & enlightening guide that will take your financial plan to the next level.”

Robert Smith, Retired Warehouse Manager

dollars

Author of the bestseller HOW TO GET RICH USING OTHER PEOPLE’S MONEY

Advice on RRSP’s,planning and more!

SAVE AMILLION

RRSPVERSION

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Introduction

1. Start early and channel Albert Einstein.

2. Create a Financial Plan.

3. Spend less than you earn.

4. Make saving fixed and unavoidable.

5. Reduce your taxes.

6. Use money to make money.

7. How to catch up when life gets in the way.

In Closing

C O N T E N T S

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“Is it possibleto save a

million dollars?With patience,discipline, and

a bit of luck,I would say ‘yes’.”

JAN ARDENCoastal Community

CFP, MBA

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I N T R O D U C T I O N

Everyone has an answer to the question, “What would you do with a

million dollars?” But what’s less known is what a million dollars

actually looks like. Assuming you had 10,000 $100 bills, they would

stack about a metre high, weigh as much as two bowling balls and you

would probably be able to stu� all the bills into a fabric grocery bag.

Now, if you think you’ll never be able to stu� a fabric grocery bag full of

$100 bills, think again. It can be done and we’re going to show you how.

Before you go hunting for a fabric grocery bag, we encourage you to

read the following seven strategies. We assure you they are not

boring and even if you have no intention of saving a million dollars,

you will take away something useful. Hey, maybe you’ll end up saving

$873,456—and that’s still pretty awesome.

Q: Who said: “The most powerful force in the universe is compound

interest?"

A: Albert Einstein. We’re serious. There is a formula for compound

interest (we won’t bore you), but basically it lets your money increase

exponentially over time. The sooner you start saving, the better.

Consider, in Figure 1 (page 6) how quickly $1,000 grows to almost

$2,000 thanks to compounding.

1Start early and channel

Albert Einstein.

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A financial plan is simply a map. You’re at point “A” and you want to

get to point “B.” A financial plan will point you in the direction of

point “B,” tell you how much it’ll require in savings, how much time

it’ll take and what pitfalls to avoid along the way.

How much should you save? Well, a general rule of thumb is 10 to 15%

of your income, but it could be less or more depending on your

situation. What do you invest in? We could elaborate on the intricacies

of of bonds, GICs, mutual funds and stocks, but we said this wouldn’t

be boring—so come and talk to us, and let our experts help you make

sense of what’s right for you.

Finally, you need to review your plan annually. The only constant in

investing is change and the “map” that you create will need to be

reoriented periodically as your situation and the market changes.

Trust us, this is a habit you won’t regret!

2Create a

Financial Plan.

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Figure 1

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It sounds simple, but in order to reach that one million dollar mark,

it has to be part of your financial plan. How do you do this?

First and foremost, establish a budget and stick to it. Figure out all

your must-have expenses, like rent, groceries, vehicle, entertainment

and so on, and if they’re more than what you make, you have to

consider some serious austerity measures. In other words, cut out

crap that you don’t need.

For example, how much is your daily latte? (enough said). If you

have the luxury of making a little more money than your expenses

consume—terrific, save most of it, splurge a little, and always make

your total cash outflow less than your inflow. Simple (yet hard)

and so worth it.

3Spend less than

you earn.

and so worth it.

Latte:

Yes

Maybe

Ah, no

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4Make saving fixed

and automatic.

Make savings a fixed expense—similar to a mortgage or utility bill.

Set up regular automatic deductions from your chequing account

to a dedicated account, such as a GIC (Guaranteed Investment

Certificate), RRSP (Registered Retirement Savings Plan) or TFSA

(Tax-Free Savings Account).

Don’t worry, our experts can guide you through this maze. How much

and how often you contribute is up to you. Out of sight, out of mind:

you’ll be amazed at how little you miss the money—and how quickly

regular contributions, even small ones, add up.

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There are two certain things in life and let’s just say one of them

is taxes. No, you can’t avoid taxes, but yes, you can reduce them.

Obviously, the less tax you pay, the closer you’ll be to filling that

fabric grocery bag full of one million dollars.

RRSPs are great for this. Contributions are tax-deductible (reducing

your taxable income), and reduce the amount of tax you pay. Yeah!

When you contribute to your RRSP, there’s a good chance you will

receive a tax refund. Savvy savers use this refund to jump-start their

savings for the coming year. Just talk to our experts about what an

RRSP can do for you.

5Reduce

your taxes.

TAXE S

MIN MAX

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Oh, you don’t have $5,000 kicking around to transfer into an RRSP?

(who does?). Rather than skip a year’s RRSP contribution, you may want to

consider taking out an RRSP loan. RRSP loans have low rates, easy terms and

we’ll even let you defer your first loan payment for 90 days! You can use your

tax refund to pay o� or significantly reduce your RRSP loan. Leery of debt?

Don’t be. An RRSP is good debt if you use the money to aid retirement

planning, lower your taxable income and encourage tax-deferred growth.

Again, our experts can help you decide if this is the right route for you.

6Use money tomake money.

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7How to catch up when

life gets in the way.

In a perfect world, all of this may seem easy. But in reality, let’s just

say, “things” happen. Life gets in the way and you may fall behind. If

you do, don’t despair, there are ways to catch up.

For starters, meet with one of our experts to review where you’re at

and how much you need to make up. Dollars to donuts, you will find

ways to curb spending to help accelerate savings. And if that’s not

enough, especially as you move into your late 40s and 50s, you may

want to consider downsizing and investing some of the equity from

the sale of your home. Chances are you’ll end up paying less for utilities,

property taxes, home repairs and other expenses. You might also

consider postponing retirement by a few years and/or working

part-time when you retire to supplement your income.

Sound complicated? Talk to our experts. They’ll run di�erent scenarios

and help you find the best way forward.

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I N C L O S I N G

Why is it that so-called “financial gurus” market their investment

programs on late-night TV? After all, if they’re “financial gurus,”

why are they resorting to marketing at 2:00am instead of enjoying

the fruits of their wisdom?

The answer is that there are no quick solutions to becoming financially

secure for retirement.

The real world can be complicated. No one can predict how our lives

will unfold, let alone the market, taxes, inflation and other variables.

These seven strategies may not enable you to stu� a million dollars

into a fabric grocery bag right away, but they just might in the years

ahead if you’re disciplined and patient.

To learn more about how the experts at Coastal Community can

help you, give us a call today at 1.888.744.1010, or visit the branch

nearest you. Together, let’s figure out how we can help you save a

million dollars!