Category: Financial Concepts

  • The Rule of 72: How long to double your investment?

    The Rule of 72 is a simple formula used to estimate how many years it will take an investment to double in value, OR the rate of return required to double the investment value in a known period of time (Kenton, 2025). To determine how many years it will take…

  • Emotional Investing

    In Andrew Hallam’s book Balance, he corrects a common misconception about what it means to buy a company’s stock and cautions against emotional investing (Hallam, 2022). Firstly, to buy stock (e.g. shares) of a company means to purchase a portion of the company. Shares of publicly traded companies are traded…

  • The Big Mac Index

    Nineteen years after the introduction of the famous Big Mac sandwich, The Economist introduced the Big Mac Index in 1986. The Big Mac Index compares the cost of a McDonald’s Big Mac hamburger between counties in US dollars. You may be surprised by how much the cost varies from country…

  • Net Worth – How Do You Stack Up?

    On your financial journey, it is helpful to know how you compare to the rest of the population. By understanding how your net worth compared to others, you will know exactly where you stand, since otherwise, it’s impossible to see if you are doing well or poorly in society. Now,…

  • Stop ‘Spaving’

    Spaving is a portmanteau of the words spend and save, and it refers to the act of spending to save money. There are many ways that we may be influenced by retailers to spave, and it can cause us to spend more than we intend to. Have you ever noticed…

  • What is your ‘Monthly Minimum’?

    Everyone should know their ‘Monthly Minimum’ – this is the minimum amount of money it takes for you to live your life. The amount should include all the expenses you incur simply to survive. It should include expenses like rent/mortgage, utilities, groceries, fuel for automobiles, property tax, insurance, health insurance,…

  • ‘Net Worth Mindset’

    It is beneficial to maintain a ‘net worth mindset’. What I mean is that you should consider how each purchase and every item you own impacts your net worth. When you purchase an item, think to yourself: at what rate will the item depreciate? What recurring costs will this item have?…

  • Think Backwards 

    Periodically, I review my items and assets and consider what I should keep and what should be sold off. Generally, the older something gets, the more value it loses, so the longer you hold onto things that are not being used, the more it costs you. Around 5 years ago…

  • Significance of Compound Growth

    The most important factors influencing the growth of your retirement savings are the interest rate on your investments and the number of years you invest. The following chart illustrates the growth rate of an investment account that has $10,000 deposited into it each year from age 25 to 65. The…

  • ‘Minor Asset’ Log

    Items you possess with current liquid (realistic) values between $100 to $2,000 should be tracked on a Minor Asset Log. To create the list, I suggest spending time walking through your home and identifying items that you feel you could realistically sell for over $100 if you needed to and…

  • Track Spending

    One of the most important aspects of personal finance is simply tracking your finances. There are three key things that you should track: all spending (monthly), your net worth (yearly), and your minor assets (yearly). To be successful in personal finance, you must know where your money is coming from,…

  • Net Worth

    Your Net Worth is an important measure of your financial situation. Net worth is not concerned with your income, your expenses, or your budget – it simply looks at what you own (asset value) and who you owe money to (liabilities). When you subtract the sum of your liabilities from…