I just got through reading the Credit Suisse Global Wealth Report. It’s full of facts and figures, like the ones that caught my interest:

“The richest 10% own 83% of the world’s wealth, with the top 1% alone accounting for 43% of global assets.”

What do those 10% do that the average Canadian business owner doesn’t? Here is my best guess:

People who know how to keep (not just earn) their money pay as much attention to the amount of savings and the savings timeframe as they do to expected rates of return. They manage consumer debt and taxes well.

Contrarily, people who can’t keep money tend to focus on expected returns over the amount of savings and timeframe. They ignore taxes in financial decision-making. They tend to fund their lifestyle not with savings but with consumer debt: “Canadian household debt as a percentage of disposable income has grown from 91% of disposable income in 1990 to 111% in 2000 and still further to 142% in 2009″

Take heart: the solution isn’t complicated.

1) Concentrate on answering these questions:
- How much do I commit to save? (Try a percentage of gross income, like 5%)
- How many years do I commit to save this minimum amount (try until age 71, the starting age for minimum RRIF drawdowns)
- When will I commit to stop adding new consumer debt? (give yourself a month)

2) Then calculate your nest egg by clicking here:

3) Then stop thinking about it and just do it.

- AH

Sources:
Credit Suisse Global Wealth Report, Oct 10, 2010
Roger Sauve, The Current State of Canadian Family Finances, Vanier Institute of the Family 2010
A more complicated retirement calculator