Category Archives: Finance

Retirement Advice For Young People, From A 60 Year Old

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No, I am not a financial expert. I’m just a girl who always had the idea that she could retire early, but learnt the lessons I needed to make that a reality, a little too late. All is not lost though, so this is not a pity post. But rather, it is a call to the young persons and my retirement advice for them.

I shared this post over 10 years ago. The writer retired at 27. That’s too early in my opinion, but he explained that it didn’t mean that he would go off to play golf and never work again. What he meant was that work would be optional. I did have a wonderful period in my life when I worked very little, and had peace of mind. From 2003 to 2005, I picked and chose my projects, barely working more than about 8 months in that period, as if I had a Trust fund set up for me! Anyway, it was the most glorious period of my life as it included lots of travel and many cricket matches in the Caribbean and the United Kingdom.

Enough about my mini-retirement. I will share now, the retirement advice that I give any young person who will listen.

1. Start investing and saving early!

No amount is too small to start investing and saving for retirement. Young persons will often say that they do not earn enough to save anything. However, I disagree. If you have even $10 to put aside, it will add up through the power of compound interest. Time is your friend. Any 20 or 30 something person I meet, I tell them to open an account in a Credit Union (in general, banks charges lots of fees and pays almost no interest, unless you have a large amount of money). This is a reminder that it is not about how much you earn, but how much you save and invest.

2. Keep learning and be the best at what you do

The more you know and can do, the better your opportunities for making money in a side hustle. Also, increasing your skills and being a high performer should usually lead to a higher salary you can command whether in your current workplace or another. This brings me to the next point……

3. Don’t stay too long in one workplace, unless you keep being promoted or getting substantial increases

Our parents’ mental model of work was stability through longevity. That no longer obtains, in my opinion. If you really want to set yourself up financially, keep your eyes open for opportunities aligned with your desired career path. Loyalty cannot be used to purchase groceries or pay your children’s school fees.

If you really like your employer, do periodic informal salary surveys and see what the market is offering, then negotiate with your current employer. If they value you, they will match your salary to what you could command elsewhere.

4. Become financially literate and money savvy

Whether you are married or single, it is critical that you understand the basics of money and building wealth. Ask your wealthy friends about the best places to invest, including financial institutions, real estate etc. Watch YouTube videos which break down financial topics into simple language and give useful retirement advice. Learn about investing in the stock market. Find a template that you can use to calculate your Net Worth. The latter really put things into perspective for me.

About 15+ years ago, I used to read Cherryl Hanson Simpson’s Financially Smart Advice articles in the Jamaica Observer and eventually booked a consultation (I mention the meeting in this article, along with why it took me so long to get my finances in order). To this day, I continue to use her Net Work Excel template and every January, I update it to look at my financial situation. I also bought her book, The 3 M’s of Monday. She also told me not to discard the tape recordings from my gazillion interviews with cricketers. In time, they will become assets which will contribute to my retirement income. (In the meantime, you can visit my other website dedicated to cricket, aptly called Cricket Interviews)

In summary….

Take charge of your finances and be diligent in learning all you need to know about money, building wealth and retirement planning. Don’t wait. Start today. That’s my retirement advice for young people.

Unleashing Side Hustles and Passive Income in the Caribbean

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I live in the beautiful Caribbean region, where the sun shines, the leaves blow gently and the waves beckon. Many dream of finding ways to earn some extra cash without breaking a sweat. But Caribbean people have been conditioned to have a 9 to 5 job. If you are not going somewhere consistently 5 or 6 days a week, eyebrows are raised. However, the explosion of the digital economy has perhaps made traditional jobs a thing of the past. Those who stick with that work model, may soon come to realize the world of side hustles and passive income. So let’s explore this concept, about which I was clueless, that can help Caribbean people ride the waves of financial independence.

Caribbean beach
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Getting my finances in order: It’s not too late!

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Emergency fund, passive income, active income, side hustle, stocks, dividends……these were financial terms that I didn’t become acquainted with until I was over 40. That age is significant because you see, my money habits were shaped by what I thought would have been happening around that age.

Let’s go back to when I was around 17 years old. I was speaking with a male friend (not a boyfriend) who was about 22 years old at the time. I can’t recall what we were talking about, but it eventually led to me ask him if he was getting married. His response stuck with me. He said he was not planning to get married because he didn’t think he would live past 40. And so I said to myself, ok, perhaps I won’t live past 40 either. I know. It’s weird, but that thought followed me around for the next 23 years. Every pain, in my mind, was a terminal illness. Imagine my “disappointment” when the test results always came back negative. I know. I know. It’s weird.

Fast forward to my 40th birthday and I started to plan a big fete to celebrate, half thinking “will I be around for it?” In the week leading up to the fete, a friend of mine who had been invited to the fete, passed away. She was younger than me. When the year ended, I thought to myself “maybe it [death] will come a year later.” Writing this now, I am thinking how silly that thought pattern was. But it was my truth, at the time.

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Are You Ready For The Big R

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For many people, the events of the past 10 months have understandably brought certain financial questions to the fore, chief among them being: Is my emergency saving fund in good shape? Am I carrying too much bad debt? Does my budget realistically reflect my current reality? Is my financial portfolio adequately diversified? Do I have enough of a safety net by way of insurance?
— Read on www.jamaicaobserver.com/style/are-you-ready_212630

Budgeting

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There are different schools of thought on budgeting. Some argue that it is pointless to write down everything you spend and that you should strive to earn more money so you don’t have to give up lattes, if that makes you really happy.

Then there are others who feel it is absolutely necessary to know where you money is going. Here is an article which focusses on the latter. In this year of living frugally, I do have to take note of my expenses.

A few years ago, I used the budget template on the Financially Smart website. I was pleased to see that I didn’t have much debt, relative to the other side of the equation.

 

 

Borrowing 101: My Rude Awakening

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Just catching up on my reading today and went back to an article entitled Five Things You Need to Know About Borrowing by Cherryl Hanson Simpson. This paragraph caught my attention.

The method of calculating interest can make a big difference to the total amount you end up paying. Reducing balance loans calculate interest on your principal balance after each payment is made. Other loans work out the total interest over the term, and divide this cost into equal payments.

I chuckled as I remembered the rude awakening I had in the Bank Manager’s office.  Continue reading →