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Want to make better financial decisions? Here is a framework that could help.


I recently read an article about a janitor that died at the age of 92 and quietly amassed an 8 million dollar fortune thanks to smart spending and investing habits. If you happen to have goals of reaching a seven-figure net worth, taking on a career path as a janitor is one of the most unconventional ways of getting there. His story however, is a true testament to how a good framework for making financial decisions goes a long way in reaching your goals.

Building mental models that guide how you make decisions is a great way to set boundaries that keep you on track for your long-term financial goals. Having said that, here are a few frameworks that you should consider implementing in your day-to-day decision-making process.  

Consider Carrying Costs

Clearly defining what the carrying costs are of a financial decision is often overlooked by many Canadians. Consider the following question; How much does a puppy cost? At the shelter, you may put down a few hundred dollars or a donation fee. But that’s tiny compared to food, vet bills, time spent walking, chew toys, yak bones, groomers and those ridiculous dog costumes… perhaps $20,000 if you add it all up. This is not to say that owning a dog is a terrible financial decision, but understanding the carrying costs upfront goes a long way in determining if your finances can sustain introducing a pet into your household.

The concept of carrying costs can be applied to several financial decisions we make daily. Making decisions should not solely be based on the cost of acquisition but rather, a combination of purchasing and carrying costs. That, in and of itself can go a long way in helping you get to your financial goals.

What’s the opportunity cost?

Oxford dictionary defines Opportunity cost as the loss of potential gain from other alternatives when one alternative is chosen. Given that we all have a finite amount of money in our bank accounts, our options are limited. With that being said, you want to make sure you’re making the best financial decisions with the money that is available to you. One practice that has made a huge difference to my financial situation is sitting down on a Sunday evening to map out what plans I have for that coming week. This allows me to allocate my money appropriately for that particular week, as well as plan for any unforeseeable expenses that might come my way. Over time, I’ve found that this weekly practice adds perspective to where I really want to spend my money, and I get to ask myself questions like, “does this work for me?” or “does this not work for me?”. Determining what works and what doesn’t comes down to your financial reality and your goals

Value analysis  

If you align your spending with what’s most important, building budgets suddenly becomes much easier. Understanding what is of value to you can result in greater intrinsic motivation to contribute to your savings and investments. Too often, people think in extremes — they’re either hyper-focused on today (#YOLO) or they’re overly concerned about the future(and potentially missing out on life as it happens right now).Clarity on your values and priorities, and acknowledgment of your financial reality can go a long way in finding the right balance between planning for the future and still making the most out of today. There is no fixed and correct path to amassing great wealth in your lifetime, but if you can have clarity on what matters to you , the journey to riches all of a sudden becomes a lot more enjoyable.


Staying on top of your personal finances doesn’t have to be a daunting task.  Coming up with a plan and having a perspective on what you value can have a significant impact on your financial well-being. If you want to get better at making financial decisions, understand that “Right” And “Wrong” aren’t useful labels for determining what to do with your money. It goes back to the concept of having conversations with yourself and getting better at asking questions like “does this work for me?” or “does this not work for me?”. Every choice depends on your situation and the context of your life. What makes perfect sense for you might not make any sense to the next person. One thing to note is if you plan on amassing great wealth, having a framework that automates good financial decisions is a good way of keeping you on track for your long-term goals.

-Kondwelani Kalinda, Financial Planning Assistant

Kondwelani Kalinda is a Licensed Assistant at Endeavour Wealth Management with iA Private Wealth, an award-winning office as recognized by the Carson Group. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families.

This information has been prepared by Kondwelani Kalinda who is a Financial Planning Assistant for iA Private Wealth and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.


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