Personal Finance Cartoon Series – Financial Freedom

Financial Freedom


We all want financial freedom…or do we?

If you are new to Personal Finance, here is the list of books I recommend:
1. The Richest Man in Babylon

Talks about many personal finance topics from insurance to investing, with stories set in ancient Babylon.
2. The Millionaire Next Door: The Surprising Secrets of America’s Wealthy

It’s not the high income earners like doctors and investment bankers who are the millionaires – they are often in debt because they spend beyond their means. Your humble neighbour, with the right mindset, could be a hidden millionaire. Talks about what traits are seen in the millionaire. You would’ve never guessed.

3. Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

If you didn’t grow up talking about money with your parents, this is a good start.

BONUS: For Women: Smart Women Finish Rich: 9 Steps to Achieving Financial Security and Funding Your Dreams

The sassy title made me pick up this book. Lots of good examples, particularly recommend to those who just landed a job out of school. It is a practical guide that shows you what to do with the money you earn to finish rich. The concept is not that hard (but practise…that’s the hard part…hence self help books help with personal finance)


Short Selling Cartoon (Election 2016)

Election 2016 result and market reaction cartoon

Most of the media predicted a downfall in the stock market if Trump won, but Dow Jones hit all time high after Trump Victory. I wonder if there were many shortsellers.
I don’t do short selling (too scared) but I bought one gold stock.  My gold stock didn’t go up at all, it actually fell down a bit.  Short selling is motivated by the belief that a security’s price will decline, enabling it to be bought back at a lower price to make a profit (from Investopedia).  So if you thought Trump would win and that market would tank (since it’s not the status quo anymore) you may have short sold and your reaction would be like the above cartoon…because short selling wants the market to tank. That way they can buy back stocks for cheap and return them. BUT it comes with a lot of risk, because the sky is the limit in terms of stock price. You have to eventually buy back a stock you short sold, so if price keeps going up, that makes the short sellers react like the above cartoon.


Comics & Cartoons

Financialtoons: Tracking Your Expenses

Budgeting Cartoon

“Mere act of monitoring expenses tends to reduce spending”. This is a tip from the book Wealthy Barber Returns. How can you monitor spending?
I pay almost everything with my credit card. So tracking my expenses is relatively easy.  Every month I download my credit card statement and categorize all my spending. Grocery, Entertainment, Alcohol, Eating Out, Coffee, etc. Then I sum up how much I spent in each category.  That way if I’m spending too much in one area, I can make a plan on how to minimize my spending. It’s like trying to find out which faucet in the house is leaking.

Here are the steps:

(1) Download credit card statement
When I get notice from my credit card company that my statement is ready, I download the transactions as a .csv file and open it in excel.  For example, since I have a RBC credit card, so I click on download transactions.
Download CSV file (Credit Card)

(2) Categorize Expenses in Excel
I add a “Category” column and add the category of each expense, for example, Grocery, Eating Out, Entertainment, Gas, etc etc.

(3) Calculate the Subtotal of each expense
You can easily achieve this by using excel’s built-in tools:

  1. Click the Data tab in Excel’s ribbon toolbar
  2. Click the Sort button and sort by Category column
  3. Click the Subtotal button and fill in the dialog as appropriate, then click OK

This process subgroups each category and calculates the subtotal. Here is my breakdown for July:

Alcohol – $130 (yikes! I can shave this off)
Coffee – $30 (not bad)
Eating Out – $100 (not bad)
Entertainement – $90 (I think I spent it on DVD, clothes etc)
Gas – $130
Gifts – $320
Grocery – $1300 (OMG definitely I can shave this off!)
Parking – $30

Now I can go over which expenses I can work with.I spent $130 on gas and $28 on parking, both expenses I can’t really do much about, unless I bus for 3 hours.  I spent on (gaaasp!) $130 of alcohol and a whopping $1,300 on grocercies! I did entertain a lot this summer so that is why.  On the other hand, I had thought I spent too much money on coffee in July, but I’ve only spent $30, which isn’t too bad.

What I learned from this exercise: I became AWARE of my spending habits.

In the summer, it looks like I spend too much on alcohol & groceries because of entertaining people. I can be mindful by trying to shop at discount grocery stores like Superstore/Walmart, instead of going to the closest grocery store which is not the cheapest.  Also, instead of buying a bottle of wine and going to the liquor store every time I run out of wine, I could’ve bought boxed wine.  Boxed wine is not too bad, and you can start the evening with a more classy looking bottle, and then serve from the boxed wine. After the second wine, it tastes the same!

What I learned from this exercise: I became less stressed about some areas of spending – I always felt guilty when I grabbed a coffee from a coffee shop, but $30 ain’t too bad. Next time I go to the coffee shop, I won’t be too guilty. And, guilt is not good for stress eating.  Or, if I’m feeling motivated every time I refrain from buying coffee, I can think of the saving I can make in an year – which would be about $360 / year.

By being aware of your spending, you can devise a strategy to save more. That is why, the “Mere act of monitoring expenses tends to reduce spending”. In addition, it makes me want to get a glass of wine, after all the calculation. After you start keeping track of your expenses, now is the time to budget – to allocate how much you should be spending on a particular category.