One of the most fiercely independent elements left for every person is how much money the person makes and how they spend it. We report to the government on our individual cases at tax time, but we seldom tell anyone else and since we do not tell, people speculate how much we have or do not have. In many families and schools – somehow speaking about finances seems to be a secondary issue, it comes up only when there is something wrong. Rob Carrick who writes about Personal Finance in magazines, government commissions and in the Globe and Mail asked a variety of people in the financial services industry why do people fail with money? The reasons are varied as the people for there is no correct answer, except for generally the concept is people are earning more than they need or should have savings. Many of the answers do not relate to the people at the low wage income how are barely getting by, with that said, we can move on. The reasons in general are:

1. Finding satisfaction in spending and consuming rather than saving. It is true some spend more than others, they are the drivers of the consumer economy and in general that is a good thing. It is true depending on where you live, there will be a “keeping up with the Jones” meaning if your neighbors have new cars and have done new renovations, you are more likely to do the same. If you lived in a different neighborhood you might do them less. If you do have this problem without savings – you need to do forced savings. One method is set up with a bank and deposit money into a mutual fund once a month and let the fund grow. If you pick a fund ensure its fees are low.
2. Not starting early enough. The idea here is to use compound interest rates to do most of the work. The problem is most people start with a little and it takes years to grow, the largest growth is after the fund has accumulated to a size, for example if there is $1,000 in the fund and you gained 10% (for easy math) you would have $1,100. Ten years later when it goes over $10,000 then you have $11,000 but when it reaches 100,000 then you are getting $10,000 and you can see it easily going up as the years go by. Rather than pay compound interest rates to the credit card company you earn them.
3. A flawed savings program. Most of us expect to live more or less similar to what we are doing now. In terms of income and health and family obligations. When they change most of us have few options and there goes the savings. The solution save regularly not just when it is convenient.
4. Risky investments. Once you accumulated savings a multitude of options are available for you and come to you. You may have a family member or relative in need of capital to invest in their business. Sometimes you win, sometimes you lose. Not losing your money should be (and it is hard) but not losing your money should be your investment strategy.
5. See the title of this blog, many people hope things will take care of themselves. If you own a house and live in the correct neighborhood and housing prices rise before you sell, then the strategy may very well work. If you do not live in the desirable neighborhood then maybe just maybe you have to be proactive or ensure you can live on  less money. There are many free things – the best is a walk in nature.

Linking to dividend paying stocks, these stock will help your investment strategy because you are investing in the profitable companies and be paid a dividend for your holdings. Over the long term, the stock values of the companies will rise and you will have more money to do the things that are important for you.

There are more questions than answers, till the next time – to raising questions.