Personal Finance for Canadians for Dummies is written and updated by Eric Tyson and Tony Martin, the book covers everything from reducing spending, working with financial planners and insurance.
As a personal finance writer, was there anything I could learn from this book? Turns out, there are some great tips in here that everyone should remember whether you’re a professional or just starting in your personal finance journey.
1. Do not let anyone pressure you into making an investing decision
As the book says, you have no reason to rush into an important decision. Always ask questions as to why the advisor is trying to convince you to buy something. Is it because it aligns with your short, medium and long-term goals or is it because they’ll get a larger commission? Pressure often comes packaged as urgency but truly solid financial choices don’t rely on pressure tactics. If someone is making you feel like you only have minutes to decide, that’s usually a red flag.
2. Think before you react
Money decisions are long-term, but emotions are short-term. It’s easy to make a choice based on fear, panic, or excitement and regret it later. Taking just a little time to sit with a decision, consider alternatives, and double-check whether it matches your plan can prevent costly mistakes. There’s a larger conversation about how people pull out of the market when it drops and miss out on the crucial days when it rebounds because they re-enter the market just a bit too late instead of staying the course and not looking at their portfolio.
3. If it’s too good to be true, it probably is
Despite what you see, read and hear, advisors are not fortune tellers, though some of them really try to read a crystal ball. We all want to believe that someone has the answer that will make us rich but that’s not the case. They’re very convincing and are great at creating anxiety that you’re missing out. Anyone who says they have the answer doesn’t. If it sounds like easy money with no risk, it’s usually a sales pitch, not a strategy and they probably want you to buy a course that will teach you how to be rich.
4. Don’t invest if you don’t understand it
Listen, we know private equity, derivative, options, foreign exchange trading (forex) and day trading sound sexy. Who doesn’t want to be the Wolf of Bay Street before they get caught? They carry the promise of quick wins, but if you don’t understand what you’re putting your money into, you’re basically gambling. Even professionals like some of the biggest hedge funds in the world can lose big in these areas. Simplicity and diversification aren’t boring, they’re sound advice.
5. The tried and true may be boring but it might be right for you
At the end of the day, it’s the basics that build real wealth: living within your means, paying down debt, saving consistently, and investing in straightforward, low-cost funds that compound over time. It may not sound cutting edge or make for a dramatic story, but that’s the point. The boring path is often the best path to financial freedom.
