“‘Til Debt Do Us Part?” – Smart Financial Advice?

Lately it seems that financial shows are all focusing on how to get out of debt. There always seems to be stories about people getting deeper and deeper into debt and most everyone on some level can relate. On ‘Til Debt Do Us Part”, Gail Vaz-Oxlade gives financial counseling to couples carrying debt loads ranging from $10, 000 to $250, 000. What Gail does is create a financial plan and gives challenges for these couples to get out of debt. Sounds good right? Even better when she states something like this, “If you put away $100.00 a month in an RRSP savings account for the next 45 years, when you are ready to retire you will have 1.65 million dollars.” Wow, 1.65 million dollars, who wouldn’t want that? Just one problem – you have to wait 45 years by the time you retire? Instead of working hard, saving your money why not invest some of that money? Don’t get me wrong, working hard and saving your money is a noble aspiration, just if you are willing to wait 45 years and retirement to get 1.65 million dollars. And there are other factors that can eat up the cost of the money you put aside. What about inflation? What about those unforeseen costs like medical bills or contributing to a grandchild’s education? What about taxes? The thing about retirement is people have no income so you are never contributing to this amount. But, as these shows are about debt the likely answer proposed by these financial experts just focuses on how to get out of debt, not how you can invest your money. And, when people need more income on the show what Gail suggests is to go out and get a second job! Who wants to work more than they have to? By investing your money wisely this won’t have to happen.

It’s great that people are trying to take control of their finances; but, by getting a second job, working long hours and saving money that may be eaten up by other costs, this doesn’t seem like the right answer. It’d be refreshing to see one of these shows educate people on how else they can achieve their financial dreams in other ways besides saving. That way, instead of 45 years and retirement, you may hear something like this, “If you invest your money wisely, create passive income and get out of the rat race, in a number of years you will be able to retire.” Now, who wouldn’t want that?

Julia Crawford
www.wealthforinvestors.com