Top 10 Financial Tips for Young Adults in USA and Canada

• Work Hard first and foremost and do well at your job. If you are not working hard at your job, you will lose it and any advice below won’t matter.
• Live a healthy lifestyle. Your health is your most important asset: Any advice below will be useless if you don’t eat healthy, exercise and have a stress free life. Get medical insurance and get a health check up done once every year
• Live within your mean; within your budget; Don’t spend more than you earn.
• Use your credit cards, but always pay them off at the end of the month.
• Never miss a credit card payment: It will affect your credit negatively and cost you money.
• Don’t buy a car unless you really really need one. If you do need a car, don’t buy old cars; You will end up spending more in the long run. Buy new cars at bargain price.
• Take public transit or bike to work: You will save money and exercise and read a lot in the process.
• Rent empty rooms in your apartment or house, and use that rental income to pay off your mortgage.
• Get a side job in an area you are passionate about: If you like team sports, you can become a referee or coach and make extra money. You can help people fix their web site if you are tech savvy; You can buy and sell used items on facebook marketplace or kijiji or craigslist for a profit; you can be a tutor on week ends or evenings, etc…
• After paying all your student loans and more importantly your credit cards debts, save money every single month automatically in your TFSA, RRSP , Roth IRA, 401K accounts.
• Negotiate everything involving money coming in and out of your pocket. There are no rules set in stone about interest rates or pay grade; Negotiate, Research, Negotiate again until you get the best value for anything you are buying. Don’t be a jerk though and don’t come across as cheap: Learn when to stop and accept and appreciate a good value.

• Work hard. The harder you work, the more likely you are to become financially independent.
• Diversify your income. You should never rely on one source of income, you should try and diversify your income streams. On top of your monthly salary at your main job, try to get rental income by renting empty rooms in your house or apartment. Get a side job in an area you have some expertise. Example: Tutoring, Team sport referee, Dance instructor, Handyman, Cleaner, salesman, etc…
• Cancel recurring paying for things you don’t need (Netflix, Spotify, cable, etc…) ; They add up.
• Save as much as possible into your TFSA and RRSP, Roth IRA Account and let them compound.
• Don’t stress too much about anything, particularly finances; Stress is harmful.
• Have self control: Resist the temptation of buying things that you don’t need.
• Start investing early and focus on compounding. Always think about long term. Have your money earn money.
• Read, read and read: Education will help you make and save a lot of money.
• Exercise and invest on your health which is your most important asset.

• As soon as you get paid, transfer at least $100 automatically to your TFSA, or Roth IRA Account every month. Select an aggressive portfolio and forget it. You will likely get a big return after 10 years.
• If you can afford a 5% down payment for a house, buy one and if you are still single, rent the empty rooms and make sure that your rental income can cover at least half of your mortgage payment.
• If you have time to research about stocks market, do your due diligence and buy some good stocks. Don’t invest more than $10000 on stocks from your own pocket. Invest in stocks as if it is lost money and you might be lucky down the road.
• Start saving money monthly in your RRSP, 401K and RESP accounts if you have kids.
• Invest in your physical, mental and emotional health: Yes I am repeating myself. If you are not healthy, any other advice is useless and you might not even be around to enjoy the benefits of your investments.

• Easy to say, but hard to do: Never buy depreciating assets on credit. Cars, RVs, appliances, clothes, trips, leasing, etc. You won’t get rich that way.
• If you’ve ever thought about buying a house, you’ve probably heard it: Don’t take out a mortgage until you’ve saved up at least 20 percent for a down payment. Otherwise, you’ll be forced to pay notorious private mortgage insurance.
• Save 10 percent of your income.
• Don’t rent or throw away money. Buy a house and be the landlord.
• Investing before spending rather than investing after spending.
• Pay all your bills and dues in time so as to never pay them with heavy interest or penalty!
• Don’t invest in anything that you don’t understand. Yourself. Not because someone sold it to you or because others are doing it.
• Don’t focus on the short-term, allow yourself to be unduly influenced by the financial news media, or let news about the market or the economy affect your long-term investing strategy.

• Save and Invest early and aggressively in your 20’s. Time and a higher risk tolerance are extraordinarily valuable and everyone can make this call when they are younger—or do so for their children/family. This also sort of falls under the “rule” of paying yourself first. This is key to maximizing wealth.

• Read , read, read and be curious. This will help you find and execute ideas to make some money on the side.
• Increase your income streams: On top of your day job, try freelancing on the side for a few extra bucks. Identify where you can provide your freelancing services (Referee in team sports, Handyman, Tutor, Buy and Sell used items for a profit, art, etc..). The more sources you have, the better.
• Start saving as early as you can. The earlier you start, the better.
• Make your money work. Start a business, make investments, do something that makes you more money from what you have.
• Make money from your existing assets (rent rooms in yours house, Uber or deliver stuffs with your car or truck, etc..)
• Never spend money on depreciating commodities that doesn’t affect your safety. What you can do with a  used $200 phone, doesn’t have to be bought at $1000 just because it is hip.
• Don’t jeopardize your safety. If you buy old cars that  break down regularly and put you at risk on highway, all the advice above won’t matter.

• Whatever you are buying, put at least 20% down to avoid paying extra insurance fees and be stuck with a high interest rate for years.
• Buy in decent neighbourhood. It usually means better tenants who will be more likely to  pay their rents and not damage the property.
• Buy a mix of multi family and single family homes. It usually results in better tenants and higher equity growth over time.
• Invest on home inspection: Make sure to use an agent who is able to point out potential problems.  Get a home inspection and don’t buy a property that requires extensive repair.  Especially on your first one and when you don’t have a ton of disposable income.
• Build: Contact builder who build properties and buy from them, allowing you to get great discount and customize the house for extra rooms and developed basement.
• Become Part of a Bigger Deal:  By partnering up with others interested in investing and pooling your resources to make a larger deal happen. Do some research online on how you can do this for either a commercial or residential property, which in some cases, requires an investment as small as $1000. The good thing about these deals is that you can hedge your bets by placing multiple investments into various properties.
• Real Estate Investment Trust: Also known as a REIT, you can invest in a publicly traded trust that uses the capital of its investors to acquire and operate properties. You can find REITs in the major Wall Street exchanges and it requires companies to shell out 90% of their taxable profits through dividends to investors in order to retain their position as an REIT.
• Rent A Portion Of Your Existing Home via Airbnb or VRBO: I prefer those options because you it is short term and you can always stop renting when you have family visiting. This gives you a lot of flexibility.

Who won?

• Rushing to accept any financing offer because of the excitement to own your first house: Not good. Get various and competitive financing offer from different institutions and negotiate to get the lowest possible interest rate.
• Don’t just focus on the aesthetic part of the house; Most first houses are never your dream house: Focus on features that will make the house  easily and quickly sellable (Number of rooms, size of rooms, garage, easy to maintain, location, etc..).
• Don’t buy an above average size and price house for your first house, go to the lower end and get a size that is proportional to your family size.
• Using a family or friend for a realtor: Don’t do it. This is your first most important investment and don’t mix it with feelings and emotions.
• Location, location, location: Buy where you can easily access public transit so you don’t have to spend all your savings on driving to work. In the same token, buying closer to public transit will help you get renters easily if you have empty rooms available.
• Inspection, inspection, inspection: Get the best home inspector available. Some of them are really bad. Look for home inspectors reviews before hiring them. If the home inspection misses important defective stuffs like dry rot on the siding, you will end up spending thousands of dollars to fix them.

• As a buyer, if you have  enough money for a 20% down payment and closing costs and has something left over for cash reserves, 20% is fine. But if you carry any consumer debt with rates higher than that of a mortgage, it is far better to pay those more expensive items off with available cash than to put it into a home down payment.
• When you get a conventional mortgage with a down payment of less than 20 percent, you have to get private mortgage insurance, or PMI. The monthly cost of PMI varies, depending on your credit score, the size of the down payment and the loan amount.