New Year's Financial Resolutions.

In a Nutshell: To become financially independent you just need to do well in school and university, get a good paying job, live below your means, save and invest regularly, get as knowledgeable on personal finances as you can and take the reins of your retirement plan, stick to the plan, and one day retire. All along the way you should enjoy life and all the experiences you can!

Everything you need to know in a Nutshell

“So your resolutions could be...”
So maybe you're good at sticking to your new year resolutions... even if you aren't, if you make sustainable choices instead of unrealistic goals you'll still be better off. So let's set some realistic goals and make them incremental doable changes that add up to a powerful combination down the road. Then you'll be ensuring you're heading to a better financial future.

I discuss some different stages of life and some potential resolutions at each stage. These resolutions will depend on your age, stage in life and financial situation, but it's reflective of what I've done to get to financial independence. In other words, it's worked for me, maybe it will work for you.  But essentially if you follow these steps, chances are you'll be doing better financially.


Welcome to the planet. Welcome to existence. Now try to touch, feel, smell, taste, listen to and look at everything you can. Be curious and learn as much as you can. Don't let people dumb you down with baby talk, you're smarter than you look, make people treat you like the intelligent learning being that you are. Make sure the people around you are stimulating your brain development. Get them to read to you as much as possible. Listen to music as much as possible. Play as much as possible.  Tell them you don't want a device put in front of you, you want to be engaged with and socialized. You don't want to be babysat at the dinner table by a tablet or a smartphone, you want to interact with a live person. Trust me, learning to interact with a live person will come in handy down the road and the earlier you learn how to do it, the better off you'll be.

And if Steve Jobs didn't let his kids have access to an iPad, why should you be having access to one? ( Steve Jobs was a Low Tech Parent)  

Also while you're busy being fed and changed, try to convince your parents to not go crazy buying you stuff you don't really need, and instead to put that money towards an education fund. If you get them to put $2,500 per year in an RESP, the nice guy in socks will give you $500 per year for free. Not bad at all. And it'll help you when you're trying to pay for a university education down the road.

So your resolutions could be:
  • learn as much as you can and get people to treat you as an intelligent being
  • avoid all screens, read books and interact with people and animals
  • get your parents saving $2,500 a year and investing in an RESP for you. (Hopefully your parents will learn how to do a s elf directed RESP to maximize the potential growth.)
  • Oh and enjoy life, play and have fun!


Well now that you're able to speak with your parents and have a full on conversation,  now is the time to ask them if they've gotten you a Social Insurance Number and then take them with you to a bank and get a bank account opened in your name. At this point, since you can't invest in stocks under your own name, unless your parents open a trust account for you, you may as well just open a regular savings account. Make sure they let you do most of the talking with the people at the bank, it's your account after all, and you're an intelligent being. Make sure everyone treats you that way. Just because you're a small child, it doesn't mean you're not intelligent. And the more they encourage you to interact with the real world the more self aware, the more developed, and the more intelligent you'll become.

Now when you get some birthday or Christmas or other special occassion money, you've got somewhere to put at least half of it. It's a good time to learn about saving. Get the pattern set early. The earlier you learn about saving the earlier you'll learn about investing. So if you save half, the rest you can spend on things kids need, like a yo-yo, a can of tennis balls or a comic book, etc... Spending your own money on toys and tickets to the movies will also help you learn the value of a dollar early on. 

Sit down with your parents and make sure they're being good stewards of your RESP if they've decided to go the self directed route. Make sure they don't go crazy on the latest hot stock, just make sure they're diversified with ETFs or a mixture of stable dividend growth businesses and growth companies. Ask them to explain the performance of your RESP portfolio. Maybe you've got a stock idea for them to put in the RESP, like Disney, or McDonald's or Apple or Johnson & Johnson? Or some other company you're aware of. 

Also keep making sure they aren't talking to you with baby talk, you're not even in diapers anymore, tell them you want full sentences, full conversations and non-over-simplified conversations. Your brain is a sponge and it's at its greatest absorption potential right now. Tell them to develop as many neural connections as possible by continuing to engage and speak with you in an intelligent manner. Hopefully they are also helping you follow some interests whether its swimming, tennis, other sports, dance, music, art, etc. or unstructured play. Lots of unstructured play is what you want to make sure they're giving you. This way you'll learn how to deal with your own problems over time without helicopter parents smothering you. You'll be able to spend time with a few friends without each others parents organizing a play date. You'll actually decide when you want a friend to come over and ask them to come over. And you'll be able to occupy yourselves with a bare minimum of toys. You have an imagination to develop, no Toys R Us explosion in the basement required. Tell your folks to save money they spend on an overabundance of toys and to instead invest it for their own retirement. If your parents have a solid retirement plan, that will help you down the road way more than a pile of unwanted toys will.  

Hopefully you'll learn the basics of a business as well at this stage. No not with a toy cash register and a fake store. With a lemonade or cookie stand out in the yard so you learn what your costs are, what your revenues are and what profit you made and how to interact with people who are your customers. Also, make a good product, pouring out some PC lemonade into a cup doesn't count. People will pay up for a nice homemade lemonade on a hot summer day. You'll have the joy of seeing people appreciate and pay for something you created. It's inspiring! Then save at least half of that money in your bank account as well. Warren Buffet as a kid was selling gum and Coca-Cola to make some money. You can do it too. 

So your resolutions could be:
  • open a bank account and save half of the money you get and/or make
  • run a small business like a lemonade stand just to learn the basics
  • learn as much as you can
  • keep toys to a reasonable number, you don't want to be buried in material possessions (and it'll help your parents save more for retirement)
  • spend some of your own money on the things you want, so you can learn the value of a dollar
  • Oh and have fun, play and enjoy!


Well, now you're going to start taking on a little more financial awareness.  When Warren Buffett was 15 he made money from a paper route and then he made more money from figuring out how to sell magazine subscriptions along his route. He also had a pinball machine business by the time he was 17. He invested some of the money he made in a profit share on a 20 acre farm. So, don't count yourself short here. You've got a roof over your head and food in your belly... not much to worry about financially so why not get out there and make some money. Get a part time job during school, get a summer job. Whatever you make you can put away in a savings account. When you turn 18 you can open up a trading account in your own name and start to invest in ETFs, dividend growth stocks and growth companies. 

So let your parents know you can handle a job by doing great in school. That's likely to be what they're most concerned about, along with your general well being and happiness. So excel in school. Do your absolute best. Don't stress about it. Just do your best. The better you do in school the more chances you'll have at getting scholarship money, and the better opportunities you'll have to get into the educational programs of your choice. If you're struggling with subjects in school, that's ok, you're supposed to be learning, you're not supposed to be an expert, ask for help. No shame in asking for help. Just do your best. Have fun as well. Don't take life too seriously.

And if some idiot in your school is giving you a hard time, talk to people about it. Let people know so they can help you figure it out. Life gets a lot easier after high school so don't worry about it too much if you're having a rough go. It will get better. I know a lot of people who had a rough go in school and now as adults they are on top of the world. So hang in there. 

When I was a teenager I worked at my parents store and then once I was a little older I got a job at a grocery store and saved my money. I spent a little here and there, some comics, some junk food, maybe some subs or pizza slices here and there, cans of tennis balls, a bike, but mostly I saved my money. I knew university was coming and I'd need some money for it.

During one of your summers, take some time to do a little reading, at this age, reading "The Wealthy Barber" would be a great thing to do. It will give you a good idea of how to prepare financially for the future. 

Though you're getting older, make sure you've got limits on screen time. Get your parents to research what Steve Jobs, Bill Gates and others do when it comes to their kids and screen time and make sure yours are on top of it with you too. 

So your resolutions could be:
  • get a part time job and summer jobs and save at least half your money
  • read a book on investing (I recommend "The Wealthy Barber")
  • do great in school, have fun and enjoy!
  • Oh and don't take things too seriously. 


Oh the places you will go...

You don't need to know what you're going to do in life yet. There's a lot of exploring to be done. And even if you decide on a path, you can always change the path later. I became a lawyer then changed directions and became a strategy consultant. But find where your interests are. Learn and explore. You can make money doing many different things. So the money will come. No matter what path you take, as long as you earn a decent income and live below your means you should do fine financially. So figure out what direction you want to go in. 

Whatever you do, do your best. At university, do your best to get the best grades. Future employers will be looking at your grades. Though I suggest university as the path to greater financial success, it's not the only path. I believe going to university will open a world of opportunity for you, not to say you can't be successful without it, but the odds are much greater if you go to university.  If you don't go to university, you still need to do your best. If you're in an apprenticeship, do your best at it. Learn everything you can, become an expert. If you start working right out of high school, do the same. Become an expert, be the best you can be.

Now you're going to get a lot of peer pressure on many different categories at this stage in your life... be grounded and confident in who you are and live your life the way you want to live it. This includes spending on the things that actually matter to you and not on the things that don't. Hopefully you have a good sense of what matters and the value of a dollar because at this point if you're going to university, probably during orientation week, you'll have been targeted by various credit card companies offering you more credit cards and levels of credit than you really ought to be taking. If you're susceptible to it, you'll also have pressure to spend on things to keep up with the Joneses. Hopefully you learned from your parents and as a child and teenager that keeping up with the Joneses is a useless pursuit. Avoid using those credit cards. Between money from your student loans, from the RESP your parents invested in for you and money you make from part time and summer jobs, you shouldn't need to dip into credit cards. So avoid spending with credit cards.

So, instead of trying to keep up with the Joneses, remember that you're trying to finish university with as low of a debt burden as you can while still maximizing what you get out of your university experience. So get some used books, get some second hand furniture, don't spend too much on your clothes, food and drink is much cheaper if you have it before you go out. Make coffee and as many meals as possible at home. Those little spends really do add up in university. Get people together, for potlucks, bring a bottle of wine over to a friends, it's cheaper than paying by the glass at a restaurant. Go out to eat with friends at restaurants occassionally and enjoy it. If you are going to spend, spend on experiences not on things you don't need. Go on trips with friends if you can afford it, those memories are priceless. Go out and laugh and build those friendships. They'll last you a lifetime. 

Find work if you can. The kind of work you can be proud of. Good honest work. Something you can put on your resume to help you get a full time job once you graduate. Work part time. Work your summers. Save as much of your income as you can. When you get student loans, try to do what you can to realize you are living on borrowed money and try to reduce the spend so you take on the least amount of debt that you need to. Try also to get as low an interest rate as you can on your loans. 

Now that you're 18+ you can open an investing account in your own name and start to learn the basics of investing. At this stage just investing in a few ETFs would be a great start. So go to your bank and tell them you want to open a self directed account, a TFSA, an RRSP if you've started working and a non-registered cash account. Never take a margin account which means you're borrowing money to invest.  

Find a cheap place to live. Living at home can save you a lot of money but it also keeps you in child mode... can you find a cheap place to live away from your parents roof so you start to learn to become an adult? Can you and some friends share a place and split the cost of the rent? That'll save a lot of money. Can you find a dorm at the university that has a decent price? Can you find a cheap little place on your own? Any way you can, try to minimize all your expenses without minimizing the university experience. It really is an awesome time in life.

Need to tend to a troubled former military guy who is blind to make some extra money? Do it. In the end it seemed to work out for Charlie... Huu-ahh... (If you haven't seen 'Scent of a Woman' starring Al Pacino, you owe it to yourself to watch it...)
Switchfoot dares you to move... on your financial resolutions? 
Make money being a passenger in a car driven by a blind guy? 
​​​Find mentors or other people outside your family to get a broader exposure to the world. Learn what they do. Ask them questions. You're in discovery mode and trying to figure out the direction to take in life. Find every avenue to explore your future direction. And once you figure it out, do your best to acheive your path. 

So your resolutions could be:
  • do great on your grades
  • find some part time work and summer jobs and save as much as you can
  • avoid credit card debt
  • live on the cheap to graduate with as low debt as possible while balancing that with maximizing your university experience as much as possible
  • open an investing account in your own name at your bank and invest in some ETFs
  • Find mentors to help you explore the world of possibilities that your career path can take
  • ​enjoy life and all the great things about university days!


A whole bunch of opportunities are ahead of you. Just in case you're having trouble finding a job, apply everywhere and anywhere. Reach out to as many people as you can. Don't take no for an answer. During my MBA I got a call from a company I had applied to and it was basically a call to say I hadn't gotten the job, but I talked and talked with the guy and convinced him to give me an interview. He turned out to be a great guy and a great boss. I worked for him for a year and learned loads. It may not be easy, but if you reach out to your network there is a good chance you'll find work. If you need to intern, do it. Do whatever it takes to show that you are going to be a great hire. Be personable and genuine and positive. People are looking to hire someone they'll enjoy working with.

Once you get the offer, remember, it's ok to ask for more pay. Just be nice about it. Find out if you can get a sign on bonus, ask if you can get a little more salary. Ask if you can get a little more end of year bonus. Ask if you can get a salary increase review scheduled after a certain amount of time. That starting salary can create a chain reaction throughout your working career. So if you can get it a little higher that's a good thing. If you can't that's ok too. Having a salary when you have a bunch of student debt is a good thing in and of itself. 

In university you used to have two jobs, being a student and working a job. Now you have one job. Your job. Do it really really well. Become as much of an expert as you can. If you have to pay your dues and work long hours, do it. Everyone has to do that. It's the way of the world. Work hard, enjoy working with the people you work with. The people you work with will also become life long friends. Just like your university friends are. Remember to balance all that work with fun. Have lots of fun and enjoy outside of work. 

Now that you're finally working, you're really getting paid. Real pay! Not part time/summer job pay, we're talking real pay now! ...Now calm down, don't spend it all in a money induced fit of consumerism. Remember you still have student debts to pay off and you're going to want to prepare for the future. The earlier you get your savings and investing going the better off you'll be due to compounding returns. 

So set up some automatic money movement. You'll want to set up your automatic student loan payments to make sure you get rid of those debts. Hopefully you never built up any credit card debt in university. If you did, just stop spending on stuff you really don't need, cut up your credit cards so you stop spending on them, and pay down your credit card debt as soon as possible. Credit card debt usually has the highest interest rate so getting rid of that first is key. You should never have credit card balances that go from month to month. If you can't pay off your credit cards in the same month that you spent on them, then you're spending too much on them. Cut them up. 

You'll also want to set up automatic savings. Set up through your company the automatic savings on RRSP (in Canada) or 401k (in the US). Usually a company will provide some matching funds on your retirement savings and so you want to at least get the maximum matching funds from your company that you can. It's free money after all. Hopefully their plan allows you to invest in low fee ETFs or low fee mutual funds. Check among the funds they offer, which have lower fees and which tend to outperform the markets they track. Those are the ones to put your money in. 

If there is an employee stock purchase plan that gives you a guaranteed 15% return as most of them do, that's also a no-brainer, maximize that and then just sell out as soon as you can to get the 15% return without being too exposed to your company. It's your main source of income so you probably don't want it to also become your main stock holding. Use the employee stock purchase plan to get your 15% return and then diversify into other holdings. 

I'd say that you should also put aside a little more automatically on top of all that. Hey you've been living like a student through university, no need to suddenly go crazy in lifestyle. Save a little more money. Take 10% of your take home pay after all those automated removals and put it into the investment account you opened in university when you turned 18. Depending on what tax bracket you're in you could put it in your RRSP or your TFSA or both with any remainder going into your non-registered account.

Then continue to live below your means as you pay down your student debt. If you need a car, buy a used one.  If you're looking for a place to live, live in a place that is below your maximum budget. Find a quaint nice little place you can entertain in. If you know what you're doing when it comes to investing in real estate and the ratios of renting to owning means it makes sense to buy where you live. Then consider buying. If it makes sense maybe you could buy a multi-unit building and live in one unit and rent out the other. If it makes sense to rent where you live, then consider renting. In either case, renting or buying, don't spend more than you need to. Remember you're going for financial freedom. You want to live in a nice place. But you don't want to become house poor. Meaning your roof over your head costs you so much that you become poor in all other aspects of life. Don't buy expensive brands you don't need and now that you're working don't start trying to keep up with the Joneses.

And after all that, take the money that's left and enjoy all the experiences that come with being your own independent person. I've never been one for creating a budget. I find them impossible to follow through on. Instead I do budgeting by default. I save as much as I can by maximizing my RRSP savings based on CRA maximums, I max out my TFSA saving each year, I do the maximum Employee Stock Purchase plan and I save an additional 10% minimum of my take home. Then I live on what remains. I assume my total income is only what remains after all that saving and after my student loan payments. So it forces me to make sure my fixed costs like the cost of rent or mortgage, car payments, insurance, utilities, telecom spend, groceries and my variable costs like going out, entertainment, travel, gifts etc falls within the amount that remains. If I keep my fixed expenses low then I can basically spend all that remains after the saving and debt repayment, as I see fit. But I do make sure my totals are below the rest of my take home pay. 

So with that money you bring home after saving and paying down debt, make your place a home you can entertain in. Entertain people in your home. Build your friendships and relationships to new levels. Go enjoy life. Go travel. Pursue your interests. Then whatever money remains at the end of the month after all that spending can also be added to your investing account.

Now that you've got money coming in, it's also time to educate yourself on investing. Read "The Intelligent Investor" by Benjamin Graham. It's the book Warren Buffett calls the best book on investing. He should know. I'm assuming you've already read "The Wealthy Barber" in high school like I suggested. 

It's also time to start exploring stock investing. Maybe take 10% of everything you have to invest and put it in individual dividend growth stocks and growth stocks, but 90% of what you're investing should go into ETFs until you know what you're doing. Then as you become more experienced, and as your portfolio grows you can take more and more control by making stocks a larger percentage of your portfolio.

Also now that you're building some assets it's probably also time that you got yourself a will and some life and disability insurance. Speak with a professional to get that all going.

So your resolutions could be:
  • find a job and do your best at it, become an expert at it
  • set up autopayments on your student loan debt
  • make sure you're putting in to your company RRSP plan to get the company match
  • make sure you're putting money into the employee stock purchase plan to get the easy 15% return
  • put 10% of your take home pay after all that into an investment account
  • read "The Intelligent Investor" by Benjamin Graham
  • ​enjoy the rest of your money that you take home, make a nice home for yourself, go have great experiences
  • get a will and life/disability insurance going through a professional
  • enjoy life to its fullest


​If you're happy in your career path, stick with it. If you're not, make a change and get yourself on a career path you enjoy. Hopefully you've got a partner in life and you both have a similar approach to finances. And hopefully your finances are doing great because you've been saving all this time, maximizing your RRSP, maximizing your TFSA, you've been getting the 15% employee stock purchase plan gains and you've been saving an additional 10% of your pay on top of all that. Any dividend stocks you invested in you're taking the dividends from and reinvesting them into your growing portfolio.

Your portfolio is growing nicely and you've taught yourself more about investing and now know how to value stocks thanks to reading 'The Intelligent Investor' and doing a lot of research on your own. You've built out a spreadsheet in excel to track your portfolio and to make sure you're hitting your targets of being financially independent. And every now and then you clean house, getting rid of bad investments and getting better value investments in your portfolio

You're continuing to live below your means and avoiding consumer debt while still spending on experiences that bring you joy in life and the occassional consumer purchase for something that you value and helps to bring joy to your life because it enables you to do something you couldn't do without it. For example, a bike allowing you to go for rides, or a guitar allowing you to play music, or a snowboard etc... Things that enable experiences are great consumer purchases. 

So at this point hopefully it's just more of the same. Keep doing great at your job. Keep saving and investing and keep enjoying life. Spend on the things that matter to you. Oh and update your will and insurance needs.

So your resolutions could be:
  • build an excel model to track your portfolio
  • keep growing your investment accounts
  • do some analysis and changes to make sure you're diversified and in healthy investments, clean house every now and then
  • keep avoiding consumer debt
  • update your will and insurance needs
  • enjoy life and have great experiences!


Either you've decided for yourself to stop working, or you've been let go and have decided why not stop working at this point. If you've been let go, you'll make sure you get a good lawyer to review your severance offer to make sure you get the amount you're entitled to under Canadian law (Or the law of whatever country you live in). 

It's time to do some detailed analysis and see whether the income from your portfolio after tax is enough to cover your annual fully loaded fixed and variable expenses. And to assess how long that will go on. Hopefully you've created a portfolio of investments that grows the passive income it provides for you every year, so you can retire and take comfort in knowing you'll never run out of money. 

You'll do the math and see when it makes sense to change your RRSP to an RRIF so that the minimum withdrawals you have to take from it are planned in a way to reduce your tax payments. You'll do the math and see when it makes sense to take your CPP, whether you take a reduced amount early, or an increased amount later. 

If you are retiring from your day job, hopefully it means you're not planning to become a couch potato for the rest of your days but that you're retiring from what you've done all this time to take on a new passion, interest or challenge. Hey you're still young. You've got lots left to do, to give, and to offer. Get out there and do it while enjoying your financial independence that you've worked so hard to acheive. 

Now that you've done a detailed analysis on how much you've got to live on, really try to turn the switch from save and invest mode to spend and invest mode. You're not going to take the money with you when you go, so now's your chance to really do things with the money you have that are meaningful to you. Make sure you keep enough in your portfolio to sustain you the rest of your days. But if your portfolio gives you a passive income of x dollars growing every year. You're free to blow all those x dollars! Enjoy it! Oh and update your will and insurance needs! (Sometimes it's better to gift things while you're alive than to let it pass through a will and probate... speak with a lawyer and financial planner about that stuff...)

So your resolutions could be:
  • do a detailed analysis to make sure you can retire and have funds for a very long life
  • decide if now is the time to stop working
  • figure out the new challenge, passion or interest you are going to pursue
  • switch from saver mentality to spending mentality while keeping enough in your portfolio to sustain you all your days 
  • update your will and insurance needs
  • enjoy life and have great experiences!

No matter what stage of life you're in... Be a SmarterSquirrel... Save. Invest. Enjoy!
Lessons Learned:
  • Financial independence is easy to acheive, all you have to do is the following:
  • do well in school and university
  • get a good paying job
  • live below your means
  • save the maximum you can in your RRSP, TFSA, employee stock purchase plans and an additional 10% of your income
  • make sure your living expenses fall within the amount that remains
  • if you do that you'll never have consumer debt
  • maximize your knowledge of investing so you can take care of your own portfolio
  • never take money out of your retirement account until you retire
  • always stay on top of the math for your financial plan
  • when your finances allow you to retire, and when you want to retire, retire
  • when you retire, find a passion, interest or challenge that you want to take on and go for it
  • ​make a will and get life/disability insurance and keep them up to date
  • always, at every stage of life, enjoy life!

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