Bank of Canada welcomed Canadians into the month of June with another hike in interest rates, pushing the benchmark rate to 1.5 per cent.
The June 1 hike was the first time in almost 25 years the Canadian central bank has engaged in a back-to-back 50-basis-point increase in interest rates. The central bank was reacting to rising inflation levels.
Statistics Canada had announced weeks ago that the country’s annual inflation rate stood at 6.8 percent for the month April, caused primarily by the rising cost of food, energy, and shelter.
In April, when the Bank of Canada had raised interest rates by 50 basis points, Canada’s big five banks had immediately announced that they would increase the prime rate from 2.70 per cent to 3.20 per cent. It is expected that the banks will respond once more to the latest announcement from the Bank of Canada.
All this talk about the in rates translates to that the money in the hands of the investor is losing its value. What one could buy with ten dollars some months back will no longer be possible today. One will need more than ten dollars to buy the same thing, even though one may not be earning more.
That means that the intelligent investor must devise means of maximizing the available amount of money. One way to do that is to adopt the pay-yourself-first financial strategy.
No amount of money earned is ever enough. As people earn, so do their tastes and wants increase. When inflation bites harder, more money is needed to buy essential needs. Many people may be under pressure to postpone saving and investment and use all the available resources to pay their bills and take care of their present needs. But financial experts advise against that.
“Most people spend their money, and then say ‘Oh, I need to save.’ Then at the end of the month, they just forget and they never really save,” explained Erik Sussman, a certified financial planner and CEO of The Institute of Financial Wellness, as quoted by the Business Insider. “So instead, we implement pay yourself first. That means before you pay the light bill, before you pay your mortgage, before you pay for your clothing, you pay yourself first.”
The pay-yourself-first personal finance philosophy is often called the “reverse budgeting” because it reorders the usual sequence of budgeting. People would usually pay their bills and obligations first. If anything is left over, they then save it. Sadly, all the money is gone before the end of the month, leaving the person who made all that money with nothing to save. That is unjust and unfair to the owner of the money. It’s like a hunting dog not getting anything (but bones) from the game it caught.
But paying yourself first means seeing yourself as the first bill to pay each month. You record yourself as the number one bill to pay every month. That is the reliable way to ensure that something is set aside for you who earned the money. It also creates discipline in people.
Aaron Levitt explained it thus in Investopedia: “Thinking of personal savings as the first bill you must pay each month can help you build significant wealth over time. By starting with a small amount, say $100 each payday, and using automatic payroll deductions, you probably won’t even notice the withdrawal after a few months. Even if you start out with $25 or $50 a month, you’re one step ahead of the game. Eventually, as your salary rises or you tighten your monetary belt, you can increase the amount you set aside.”
But paying yourself first does not mean just keeping money aside for months or years, only to use it to buy a liability. That is the same thing as squandering the money every month. Paying yourself first means setting money aside consistently for investment. The money should promptly go into whatever you and your financial advisor agree upon, so that you are not tempted to it to buy one thing or the other, thereby ruining your efforts.
When this is done religiously, it ensures that even when inflation bites harder and the value of the money in our hands diminishes, we are able to stay afloat now and in our retirement.
Let us now look at the five stories that attracted our readers most this week. This week, our readers showed more interest in the health and technology sectors.
Datametrex AI (TSXV:DM) reports record net earnings in Q1 2022
Datametrex AI Limited (DM) earned over $1.3M on revenues of over $10M in the first quarter of 2022.
Marshall Gunter, CEO of Datametrex sat down with Coreena Robertson to discuss the results.
Datametrex AI Limited is a technology-focused company, using artificial intelligence (AI) to create solutions for the cyber security, telehealth, and electric vehicle (EV) verticals.
Datametrex AI Ltd (DM) was trading at $0.14 at 2:59 p.m. ET.
good natured Products (TSXV:GDNP) reports Q1 results
good natured Products (GDNP) announced its financial results for the three months ended March 31, 2022.
The company reported its second consecutive quarter of positive adjusted EBITDA.
Revenue in Q1 2022 grew on a year-over-year basis by 228 per cent to a record high of $25.9 million. These results were driven by recent strategic acquisitions and strong organic growth.
CEO Paul Antoniadis sat down with Coreena Robertson to discuss the results.
good natured Products Inc (GDNP) was trading at $0.42 at 3:40 p.m. ET
Empower Clinics (CSE:CBDT) exceeds 3000 tests in first month of operation
Empower Clinics (CBDT) has confirmed more than 3000 Covid 19 tests and 750 pending appointments in and around the Port of Vancouver and Canada Place.
All of Empower’s COVID-19 testing solutions are fully accredited by the College of Physicians and Surgeons of British Columbia’s Diagnostic Accreditation Program (DAP)
Steven McAuley, Chairman and CEO of Empower Clinics, sat down with Coreena Robertson to highlight the updates.
Empower Clinics Inc (CBDT) was trading at $0.090 at 3.50 p.m. ET.
SQI Diagnostics (TSXV:SQD) reports record sales in Q2
SQI Diagnostics (SQD) reported its financial and operational results for the first quarter of the fiscal year ending September 30, 2022.
Financial highlights include record sales of $5.6M for Q2 and gross profit of $3.0M.
SQI Diagnostics CEO Andrew Morris sat down with Coreena Robertson to discuss the news.
SQI Diagnostics Inc (SQD) was trading at $0.18 at 3.40 p.m. ET.
GeneTether Therapeutics (CSE:GTTX) receives new patent
GeneTether Therapeutics (GTTX) has been granted a patent from the United States Patent and Trademark Office.
Patent #11,339,385 entitled “Modified Nucleic Acid Editing Systems for Tethering Donor DNA” is related to its GeneTether platform technology.
GeneTether CEO Roland Boivin sat down with Coreena Robertson to discuss the news.
GeneTether Therapeutics Inc (GTTX) was trading at $0.32 at 11:00 a.m. ET
Until next week when we bring you another edition of the Top 5 Stories of the Week, enjoy your weekend.
