Successful business people manage their finances in a specific way. AIC has analyzed this approach and boiled it all down to five tried and true principles, known as The Five Laws of Wealth Creation.
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Set a goal – Sit down with your financial advisor and answer these questions:
- Where am I today financially?
- Where do I need to be?
- How will I get there?
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Use other people’s expertise – Without a doubt, the knowledge and experience of your financial advisor, accountant, lawyer or role model can be very helpful in planning for your financial security. |
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Use other people’s money – You do it in the form of a mortgage when you buy a home, and it’s certainly worth considering when investing in your financial future. At AIC, we call this the Upvest® strategy, and it works like this… Rather than setting up a $100 monthly pre-authorized chequing plan to make regular investments in a mutual fund, you could apply for an Upvest loan of up to $14,000. You could then invest this money and get the full amount working for you right from the start. Talk to your financial advisor about the risks and rewards of the Upvest strategy before making your decision. |
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Pay yourself first – Very few of us will get rich quick, so we must be disciplined and consistent in our approach to wealth creation. Here's something many wise investors do, and you should consider following their lead. When paying their bills each month, the first cheque they write is to themselves – before expenses or splurging on any extras. It could be 5, 10, 15% of your gross monthly income – whatever you can realistically afford. The important thing is to pay yourself first to ensure your investment portfolio is always growing. |
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Buy. Hold. And Prosper.® - True investors share three common goals:
- preserve wealth
- grow wealth at an above-average rate of return, and
- minimize the impact of taxes.
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How do they do it? To preserve and grow wealth, true investors strive to own the highest quality businesses in strong, enduring growth industries.
By holding these excellent businesses for the long term and ignoring the daily market noise, their wealth grows and grows – free of the ravages of tax.
Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The purchase of mutual funds using borrowed money (i.e. leverage) magnifies the gain or loss on the cash invested. Investors considering a leveraged purchase of mutual funds should be aware that a leveraged purchase involves greater risk than a purchase using personal cash resources only. The extent of that risk will vary depending on the circumstances of the investor and the type of mutual fund purchased. If you borrow money to purchase mutual funds, your responsibility to repay the loan and pay interest as required by the loan's terms remains the same even if the value of the mutual funds purchased declines. Before investing, read the prospectus and speak to a financial advisor.
