Financial news and advice — January 2018

Financial wizard Keith Schroeder lists the best questions to ask when trying to build your wealth, while a select group of celebrities show that you can be spendthrift even as a multi-millionaire.

FAMOUSLY PARSIMONIOUS

Stars light, stars tight

Reese Witherspoon earns between US$15 million and US$20 million per movie, but that doesn’t mean she’s a spendthrift. Witherspoon has been caught vintage clothes shopping and buying outfits at the GAP. It’s also reported that she recycles by trading clothes with friends her size. (The star wears a 6, btw.) Witherspoon was featured in a recent online feature about penny-pinching celebs, such as Sarah Michelle Gellar, who reportedly clips coupons when buying at Whole Foods. Another rich scrooge? IKEA founder Ingvar Kamprad, who prefers the Swedish meatballs at his stores over other restaurant fare.

 

RICH QUESTIONS

FAQs of the rich and cautious

 

Keith Schroeder 

Accountant Keith Schroeder, who retired for the first time when he was 22, now blogs under the name wealthyaccountant.com and says when he started tracking questions clients asked him, he slotted them into three categories: those with incomes below $50K, those over $400K, and everybody else. He says the very rich tend to ask the same seven questions — questions that reveal financial smarts. The FAQs are: is there anything I can do to optimize my tax return? Can I schedule a consulting session outside tax season? Can you review an investment for me? What am I worth? How much more tax can I defer? Is this a wise expense? Can you negotiate a deal for me? For more, consult www.wealthyaccountant.com/.

 

HIGH 4!

Resolve to get wealthy

Want 2018 to be more lucrative than 2017? Make and stick to these four pecuniary New Year’s resolutions:

• Pay yourself first. According to millionaire author David Bach, “When you earn a dollar, the first person to pay is you.” Most people pay everyone else first — the landlord, the credit card company, the phone company — and pay themselves only what’s left over.

• Stop relying on a single paycheque. “You won’t get rich without multiple flows of income,” says self-made millionaire Grant Cardone. “That starts with the income you currently have. Increase that income and start adding multiple flows.”

• Get paid what you’re worth. If you’re good at your job, ask for a raise.

• Stop trying to get rich quick. Warren Buffett uses the buy-and-hold strategy. “The money is made in investments by investing,” Buffett says, “and by owning good companies for long periods of time. If they buy good companies, they’re going to do fine 10, 20, 30 years from now.”

 

IDLE THREAT

Taking care of busy-ness

Tom Corely, an accountant and financial planner, compared the daily activity of 233 wealthy people to that of 128 not-wealthy people and decided that the key to financial success is dedicating at least 60 minutes each day to a productive activity such as exercising or reading but strictly limiting time for goofing off to an hour a day. “Wealthy, successful people don’t make a habit of [things like] watching TV,” he says. They don’t waste too much time using their phones or the internet, either. “Our daily habits are the reason why we are rich, poor or middle class,” he explains in a book called Rich Kids: How to Raise Our Children to Be Happy and Successful in Life.