Grow with Shiv

One of the best books on finances. I read this book so many times and summarize it for you. It helps everyone in every path of their life, from a broke 20-year-old to a wealthy 50-year-old There is no quick path to being wealthy, it is all about being consistent and following the plan. Here are the seven baby steps mentioned in the book-

• Make Budget – If you’re struggling with money, it’s because you don’t keep track of your finances. It has nothing to do with anyone’s intelligence. Everyone should create a budget that shows them where their money goes, how much debt they have, and how to save for their dreams.

• Save a $1,000 beginner emergency fund.- Saving 1000$ will start your journey to freedom. You don’t have to borrow if your car breaks down or else. It will boost your confidence and help you in the hardest step, which is step 2.

• Get out of debt using the debt snowball method- This is the hardest part of everyone’s journey. We start living beyond our means and accumulate debt for vacations, cars, eating out, etc. In Canada, if you want to be rich, you have to pay off all of your debt except your mortgage. The average person takes 12 to 18 months to get out of debt. No one becomes a millionaire using credit card points. Use the debt snowball method to pay your debt. In debt snowball, you pay your smallest debt first and then go to the largest. 

• Save a proper emergency fund that is 3-6 months of expenses- We saw in COVID-19 that it is so important to have a few months of expenses saved in liquid money. If some major emergency comes to your life, you don’t have to get credit card debt; you can simply get money from your emergency funds. Yes, there is nothing like an emergency credit card. 

• Invest 15% of household income for retirement- Now, this is the time to invest. Most people invest in a 7% return when they have a 20% interest loan. You should only invest when you are debt-free and have emergency savings. The best places to invest are TFSA and RRSP. Max out these accounts so that you don’t have to pay taxes on your dividends

• Save for children’s college- Bachelor can skip this step, but those who are married should invest in their children’s college funds because their child shouldn’t have to get a student loan to fulfill their dreams. As a parent, you must pay for your children’s college funds.

• Pay off the home early- Rationally, this step sounds bad. If you have a 3% interest on your home, you’re getting a 7% return on your investments. But Dave argues that Imagine your life without any payments, your paycheque will stay with you. When you have no payments, then your return on new business ideas and investments is exponential.

• Build wealth and be generous.- One only does three things with their money: Spend it, save it, or donate it. After step 6, you have made it in life. You can do whatever you want to do.

Dave Rampsy wrote the book for a general audience and I summarized it for you. These simple baby steps will help you get out of the rat race we all are in. 

Here are some of best quotes from the book-

If you will live like no one else, later you can live like no one else

We buy things we don’t need with money we don’t have to impress people we don’t like.

A budget is telling your money where to go instead of wondering where it went.