From Middle Class To Millionaire
()
About this ebook
From Middle Class to Millionaire is a book that calls out the huge money obstacles that the middle class faces today and helps everyday Canadians build a plan to deal with them. This book will guide Canadians through the challenges of David’s four “P’s” to the middle class that need to be strengthened for us to gain back our prosperity that has been slipping away for the last 20 years.
1.Pensions: If the government isn’t going to secure our futures and allow a dignified retirement, we must step up and do it ourselves. Learn how to navigate the alphabet soup of investing accounts.
2.Property: With average after tax Canadian family incomes at $80k a year and the average Canadian home reaching $500k, how do we keep home ownership as a cornerstone to the Canadian wealth?
3.Perspective: The new generation doesn’t believe that they will do better than their parents! Having a winning attitude is half the battle to success and this misconception must change for success.
4.Pennies: We need to save, invest, and earn them with new vigor to continue growing. A dollar saved on something that you don’t really need or want can contribute to something that is important to you and your family.
David Campbell Lester
Author and President of DCL Capital David Campbell Lester recently launched the United States version of his successful Canadian book I (Heart) Money. After seeing the tremendous response and countless success stories about lives being transformed as a result, Lester has decided it’s time to reach a broader audience. David’s fusion of humor, positive reinforcement, and tangible tips that work, make managing your finances something you love. He is now a personal finance writer and President of DCL Capital. Lester writes for his blog iheartmoney.ca that breaks with traditional attitudes towards finance and describes his own philosophy towards money and life that he has gained through his personal and professional experiences. His philosophy on money applies to many areas of everyday life including: banking, investing, goal setting, shopping, and entertainment. David is a repeat guest as a Financial Relationship Expert on FOX and CW6 San Diego as well at CTV in Canada.
Related to From Middle Class To Millionaire
Related ebooks
Smart Choices For Serious Money Rating: 0 out of 5 stars0 ratingsThe Beginning of Wealth: E-Hero Books, #3 Rating: 0 out of 5 stars0 ratingsMillionaire Real Estate Success Strategies: What They Forgot to Teach You in School Rating: 0 out of 5 stars0 ratingsSelf-Made: How to Win by Investing in Yourself Rating: 0 out of 5 stars0 ratingsSave Yourself: Your Guide to Saving for Retirement and Building Financial Security Rating: 0 out of 5 stars0 ratings95% Broke Don't Let This Happen to You Rating: 0 out of 5 stars0 ratingsMoney Uncensored - CDN Version: Who Do You Trust With Your Money? Rating: 0 out of 5 stars0 ratingsHow to Control Your Financial Destiny Rating: 0 out of 5 stars0 ratingsThe Path to Financial Peace Rating: 0 out of 5 stars0 ratingsMoney Planning and Positivity: A Guide to a Better Financial Life Rating: 0 out of 5 stars0 ratingsMiddle Class To Multi-Millionaire: How I Did It Through Real Estate Before 30 And How You Can Too! Rating: 0 out of 5 stars0 ratingsHOW TO EARN A BILLION OR THE INTELLECTUAL CAPITAL OF AN ENTREPRENEUR Rating: 0 out of 5 stars0 ratingsSeries “I” Bonds vs Roth IRAs: Emergency Cash vs Retirement Funds: MFI Series1, #181 Rating: 0 out of 5 stars0 ratingsMoney Matters: A Simple Guide To Help You Make Ends Meet Rating: 0 out of 5 stars0 ratingsBuilding Wealth: From Shoeshine Boy to Real Estate Magnate Rating: 0 out of 5 stars0 ratingsGenerational Wealth Builder: Building Success While Enjoying Life Rating: 0 out of 5 stars0 ratingsThe Wealth Builder Challenge Rating: 0 out of 5 stars0 ratingsZero to a Million in 12: The 12-Step Guide to Making a Million Dollars in a Year Rating: 4 out of 5 stars4/5The 30-Minute Millionaire: The Smart Way to Achieving Financial Freedom Rating: 0 out of 5 stars0 ratingsThe Financial Domino Effect: How to Profit Now in the Volatile Global Economy Rating: 0 out of 5 stars0 ratingsMaster Your Debt: Slash Your Monthly Payments and Become Debt Free Rating: 5 out of 5 stars5/5The Value of Debt: How to Manage Both Sides of a Balance Sheet to Maximize Wealth Rating: 0 out of 5 stars0 ratingsThe Complete Guide to Buying and Owning a Recreational Property in Canada Rating: 0 out of 5 stars0 ratingsYou Can't Save Your Way to Wealth Rating: 5 out of 5 stars5/5The Money Bridge: How To Fill The Gaps Between Financial Struggle And Financial Freedom? Rating: 5 out of 5 stars5/512 Stupid Mistakes People Make with Their Money: A Step-by-Step Guide to a Secure Financial Future Rating: 2 out of 5 stars2/5Warren Buffett: Learn the Best Leadership Lessons for Entrepreneurs from Buffett Rating: 0 out of 5 stars0 ratingsTime is Money #2: Save By Adding Value in the Present: Financial Freedom, #117 Rating: 0 out of 5 stars0 ratings
Personal Finance For You
Financial Feminist: Overcome the Patriarchy's Bullsh*t to Master Your Money and Build a Life You Love Rating: 5 out of 5 stars5/5Summary of The 48 Laws of Power by Robert Greene Rating: 4 out of 5 stars4/5Girls That Invest: Your Guide to Financial Independence through Shares and Stocks Rating: 5 out of 5 stars5/5Rich Dad Poor Dad Rating: 5 out of 5 stars5/5The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/5Money Hacks: 275+ Ways to Decrease Spending, Increase Savings, and Make Your Money Work for You! Rating: 4 out of 5 stars4/5Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Rating: 5 out of 5 stars5/5The Psychology of Money: Timeless lessons on wealth, greed, and happiness Rating: 5 out of 5 stars5/5Legal Loopholes: Credit Repair Tactics Exposed Rating: 4 out of 5 stars4/5Investing For Dummies Rating: 4 out of 5 stars4/5Personal Finance For Dummies Rating: 4 out of 5 stars4/5The Black Girl's Guide to Financial Freedom: Build Wealth, Retire Early, and Live the Life of Your Dreams Rating: 5 out of 5 stars5/5The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Rating: 4 out of 5 stars4/5The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns Rating: 4 out of 5 stars4/5Money. Wealth. Life Insurance. Rating: 5 out of 5 stars5/5Principles: Life and Work Rating: 4 out of 5 stars4/5Just Keep Buying: Proven ways to save money and build your wealth Rating: 5 out of 5 stars5/5Summary of R. Nelson Nash's Becoming Your Own Banker Rating: 0 out of 5 stars0 ratingsSet for Life: An All-Out Approach to Early Financial Freedom Rating: 4 out of 5 stars4/5The Millionaire Next Door Rating: 4 out of 5 stars4/5Same as Ever: Timeless Lessons on Risk, Opportunity and Living a Good Life Rating: 4 out of 5 stars4/5We Should All Be Millionaires: A Woman’s Guide to Earning More, Building Wealth, and Gaining Economic Power Rating: 4 out of 5 stars4/5Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple Rating: 5 out of 5 stars5/5
Reviews for From Middle Class To Millionaire
0 ratings0 reviews
Book preview
From Middle Class To Millionaire - David Campbell Lester
From Middle Class to Millionaire
The money guidebook for the other 99%
David Campbell Lester
Copyright © 2014 by David Campbell Lester
Smashwords Edition
All rights reserved. No part of this book protected by copyrights may be reproduced or used in any form or by any means without prior written permission from the publisher.
Every effort has been made to ensure no existing copyrighted material has been used in this book. In the event of a question as to the use of any copyrighted material, we will be pleased to make the required corrections in any future printings.
Cover designed by: Niall Kelly
Photography: Ryan Szulc
Retouching: Andrew O’Driscoll
Edited by: Catherine Leek of Green Onion Publishing
Interior designed and formatted by: Heidy Lawrance of WeMakeBooks.ca
Contents
Preface
Where Did the Middle Class Go?
PART ONE
Securing Our PENSIONS!
Chapter One: Government Pensions on Notice
Government Inaction
Some Solutions
Increase RRSP Maximums
Individual Investment in Government Pensions
Norway’s Example
Chapter Two: Become a Millionaire in Retirement
Build a Million-Dollar RRSP
How Much to Invest?
Employer Matching Contributions
What to Invest In?
TFSAs – What Are They?
TFSAs Versus RRSPs
What Should I Put in My TFSA?
TFSA Investment Example
My Kids’ RESP or My RRSP – Which to Choose?
What to Put into an RESP?
Emergency Fund
What to Put in My RRIF?
Success Story: James – Instant Retirement Fund
Appendix 1: Stocks on the XDV (iShares on the TSX)
Appendix 2: CUD – S&P US Dividend Growers Index Fund (CAD Hedged)
Part Two
Let’s Get Some PROPERTY!
Chapter Three: Home Ownership – The Middle-Class Dream
Home Prices on the Rise
Low Interest Rates – Good News
How Much Can You Really Afford?
How to Make an Easy 3% – Pay Your Mortgage
Turning Your Home into Income
Mandatory: Pay Off Mortgage Before Retiring
Success Story: Me – Loft to Luxury
Chapter Four: Develop Other Income Streams
Income from Your Interests
Start Your Own Part-Time Business
Re-Educate Yourself for the New Economy
Lifelong Learning Plan
Success Story: Mary – Cooking Up More Business
Part Three
Saving Those PENNIES!
Chapter Five: Budgeting for Success
Know Your Income
What Are My Expenses?
Emergency! The Way Out
Success Story: Damien – Be Your Own Artist
Chapter Six: Paying Off Debt
How Much Do I Owe?
How Much Do I Pay?
Avoiding Debt
Using the Credit Card Companies to Your Advantage
Success Story: Jazmine – Targeting Debt
Chapter Seven: Insuring Our Families and Our Future
How Much Insurance Do I Need?
What Insurance Does My Company Provide?
What Kind of Insurance Do I Need?
Home and Car Insurance
Mortgage Insurance
Credit Cards
Credit Card Travel Insurance
Life Insurance
Success Story: Ravi - Insurance
Chapter Eight: Money Tips and Tricks
Handling Your Money
Dear Bling
Keep a Money Journal
Don’t Hate but Love Your Bank
Insurance – It Pays to Shop Around
Credit Matters
Crunch All the Numbers
Household Expenses
Smoosh Your Cell Phone Bill
Don’t Brown Bag, Fierce Bag It
How Much Does that New Car Really Cost You?
Buying Car Insurance like a Winner
Top Ten Ways to Exercise for Free
Holiday Shop like a Champ
Cheap Summer Vacations for the Rest of Us
Hockey: Every Kid Needs the Opportunity to Play
Money and Relationship Contracts
Students Starting Off
Tricks for the Backpack
Going Back to School Soon?
Wills and Estates
Checklist for Preparing a Will
What to Consider When Making Your Will
Power of Attorney and Living Wills
Success Story: Jeff – Studying Money
Part Four
Positive PERSPECTIVE!
Chapter Nine: Changing Negative Belief Systems
Loving Your Life
Before the Love
Reaching for the Life You’ll Love
Success Story: Jimmy – Decide What You Love to Do
Chapter Ten: Wadda’ ya Want?
Living by Your Values
Be Better Off, Now
Don’t Chase
How to Discover Your Values
Success Story: Julia – Getting Out of a Rut – Way Out
Chapter Eleven: Kick Your Life in the Bum
Kicked in My Pants
Financial Coaching
Start from Scratch
Brainstorming Personal
Brainstorming Professional
What Do I Want Personally?
What Do I Want Professionally?
How Do You Get Started?
Material Goals
Success Story: David – Work Backwards
Chapter Twelve: Building Your Action Plan
Success Story: Sasha – Focus, Dream and Surge Forward
Chapter Thirteen: If You Feel Needy – Give
LOVE Your World Back
What Does Kiva Do?
How Does Kiva Work?
How They Get their Loans
How Do You Heart Kiva too?
Success Story: Grace’s Peanut Butter
Conclusion
Soups On, Be Happy
Feel the Solution First
Life Status Worksheets
About the Author
Preface
Thank you everyone for making my first book, I (Heart) Money, and blog a huge success! I’d like to thank my big brother Gord, who always encourages and motivates me, Ron McKenna from Cognition LLP for helping me with the Wills and Estates section, and, of course, my Mom and Dad who say they still love me even when I’m grumpy.
The last few years touring and meeting all of you has been really rewarding. I received many e-mails and comments from you telling me of your personal successes. I’ve been from one side of the country to the other and even to California with my US version of I (Heart) Money, and the outpouring of love was truly amazing.
Watching the news and economy over the last few years I’ve seen a disturbing pattern form around the middle class. Stories have described it as the class that is under the most pressure in the coming years. Having grown up middle class and having written the first book to serve this group, I needed to write a second book that was purely about bringing Middle-Class families off the endangered list.
No longer can we rely on the government or business for answers; I truly believe the solutions reside with us – the people. From Middle Class to Millionaire also suggests pension reforms that can help in the future as well as a two-pronged strategy that we can put into action right now.
1. Build a nest egg with every asset class available to us; from investing to buying an affordable home. We need to be smarter to reverse the economical and political pressures that we are all experiencing.
2. Change our money belief system back to the positive one of the past. After years of hearing how we are down and out, we have been saddled with a negative belief system about our future. A more positive outlook will lead to greater success.
In this book, you’ll get more empowering tips and tools that will help you move from being a money moper to money maven/maverick. You’ll get real-life success stories on how everyday people designed their ultimate life, costed it and then implemented it.
This book is intended to show you my philosophies and strategies for saving and growing personal financial wealth. You should know, however, that I am not currently working at a bank or investment brokerage. I have owned and may still own the stocks named in this book.
Let’s all go From Middle Class to Millionaire! Woot!
"Great then is the good fortune of
a state in which the citizens have
a moderate and sufficient property;
for where some possess
much, and the others nothing...
a tyranny may grow out of
either extreme...where the middle
class is large, there
are least likely to be factions
and dissensions."
Aristotle, about 2,400 years ago
Great then is the good fortune of a state in which the citizens have a moderate and sufficient property; for where some possess much, and the others nothing ... a tyranny may grow out of either extreme ... where the middle class is large, there are least likely to be factions and dissensions.
Aristotle, about 2,400 years ago
Where Did the Middle Class Go?
When I was a kid – just a few short years ago – it seemed that everyone was of the middle class. We all seemed to be dropped off at school in recent model Pontiacs or Buicks, we all played hockey on weekends, baseball in the summer, and got to go on a vacation to see the pirates at Disneyland in Florida. My mom stayed home, like most moms in my neighbourhood, and it seemed like everyone was the same as us. At least that was my 6-year-old’s perspective.
So who exactly is the middle class? We employ that term at will, but do we know who the middle class is? And why is there so much talk about them being under attack in the news?
According to the Environics Focus Canada 2012 Report, 93% of their survey considered themselves some sort of Middle Class. Of that, 19% considered themselves Lower Middle Class,
56% considered themselves Middle Class
and 18% considered themselves Upper Middle Class.
Only 5% considered themselves Lower Class
and the infamous 1% had only 1% classifying themselves as Upper Class.
Seeing that perception is reality, it is safe to assume the Middle Class is composed of those who refer to themselves as Middle Class
in one way or another. According to an April 2014 piece in the New York Times, Canada’s Middle Class has been doing better than the rest of the world, but I don’t think that the slowest sinking ship is something to be proud of. Let’s grow and prosper.
It would also be prudent to look at the numbers. According to the Progressive Economics Forum, 59.7% of Canadians fall into the Middle-Class income brackets, from low to upper middle (Figure 1). According to 2009 Statistics Canada data, these families make between $40k and $125k a year.
Figure 1
A Breakdown of Canada’s Middle Class
That means if you declare yourself Middle Class (because perception is half the battle) and also within the $40k to $125k family income range, this book is for you.
The word on the street is that the Middle Class is shrinking, which is alarming. Economists point out that the gap between median and average individual income has been growing. The median educated Canadian’s income increased from $45,800 in 1976 to $48,300 in 2009. This equates to an increase of only 5.5% over 33 years. These figures are in real dollars, which means the 1976 numbers have been converted to 2009 dollars to make an apples to apples comparison.
We have seen that only the top 20% of Canadians have seen a real increase in income. Nationally, the upper class’s income jumped from 36.5% in the 1990s to 39.1% in 2000. The middle and lower classes dropped in their share of the national income according to the 2009 Statistics Canada report. This means that if you divided our population in five, based on how much they earned, only the top 5th increased their income from the 1990s in a significant way.
We are also seeing a loss of confidence in the financial future of Middle-Class kids and parents. In 1990, 60% of those surveyed thought that they would be financially better off than their parents at their age. In 2012 that number had dropped drastically to 52%. Not only are our financial numbers declining but so is our hope for our future.
So what do we do? Kill the rich?!
No, that’s another book. I’m going to be more practical. We need to build a new belief system to make us hopeful again. Let’s develop a strategy to grow the Middle Class and then use proven tactics to