Airports create and represent obstacles that only delay my travel goal. To put as much time and space between myself and the predictable pattern of life. Which, over the course of time has lulled my brain into a certain complacency. Robbing my soul of the creative energy that only an abrupt departure from can revive.   

You may read that as a dramatic characterization of just needing a break. But, scientific research is on my side, justifying what I’ve always instinctively perceived to be true. Travel is much more than a luxury. Rather, it’s a physiological prerequisite to solving complex problems. 

BREAKING ROUTINE AND PREDICTABILITY

Most days I can, with a reasonable degree of accuracy, predict what my day will be like. 

Wake up. Hop on the subway. Get coffee. Check emails. Meetings. Emails. Coffee. More emails. More meetings. Lunch. Followed by a combination of meetings and emails. Until 5 o’clock when I go home and try to forget it all before repeating the process.  

A study from Indiana University tasked two groups of students with listing as many modes of transportation as they could. One group was told that the task originated from a group of Indiana University students studying in Greece. The second group was told that it was developed by students studying in Indiana. The students who were told that the task originated by Indiana University students abroad listed far more modes of transportation than those who were told the students were local.  

The hypothesis is that distance from a problem allows students to think about that problem more broadly. Distance forces my brain to recalculate details of the issue at hand. It’s the same reason I am convinced I have a solution for the problems in the Middle East and climate change. Yet, somehow can’t figure out how to keep the fiddle leaf fig tree in my apartment alive. 

The human brain is constantly optimizing for efficiency. It identifies repeated patterns and starts to allocate less cognitive resources to those tasks. This results in less creative execution of those tasks. Email, meeting, email, meeting, coffee, email…

ESCAPISM ISN’T THE ANSWER

Travel helps activate the benefits that time and space afford. But, we must travel with the correct mindset. It’s not enough to fly to Cancun and sip margaritas on the beach all day. Nor is it necessary to be completely removed from civilization under an oath of silence with Tibetan monks. Escapism is not going to rejuvenate your creative energy, or give you the perspective you need to solve complex problems. They will only be waiting for you when you get back. It’s only when we embrace the things that stump us from a distance that we can see the problem from a more productive perspective.  

TRAVEL REFRAMES YOUR PERSPECTIVE

But, perspective alone isn’t the only benefit of getting away from it all. Research from France and the Kellog School of Management in Chicago found that students who lived abroad are more likely to overcome ‘functional fixedness bias.’ Meaning, they are able to find new applications for familiar objects and tools. The human brain is infinitely beautiful in its ability to recognize patterns and automate them. Thus, freeing up more resources for more complex problems. The problem is that we can become so fixated on what we know that it makes creatively breaking those patterns more difficult. The brain is generally not good at finding new applications or meanings for familiar objects, concepts, or ideas. 

In the Duncker problem, students are given a cardboard box that contains a candle, some pins, and matches and are told to find a way to fix the candle to the wall so that it can burn normally and not drip any wax on the floor. Less than 25% of students are able to come up with a solution. Most will conclude that the puzzle is impossible and give up. But, students who lived abroad were 20% more likely to find a solution. Broader exposure to cultures, ideas, and traditions around the world expose us to the possibility that an object as familiar and mundane as a cardboard box may be used as much more than a container.  

When you say your brain needs a vacation, you are probably right. However, travel isn’t about turning your brain off. Rather, it’s about engaging it in a new way. Forcing it to relearn common patterns in a different context. Like, having to order your morning coffee in another language. Or, introducing your palate to a new, exciting flavour. Or, simply giving yourself the time and space to reignite your creative energy to return to work refreshed. And, let’s be honest, a cold margarita on the beach doesn’t hurt either.

WRITTEN BY OCTAVIA AHSAN

Dylan Doyle was in Mexico with his partner for a friend’s wedding last November when the emails started to come through: a marketing graphic scheduled to be posted on Twitter contained errors. And, while he thought the issue was under control, the freelancer covering for him had unfortunately taken him up on his offer of being “available over email.” Doyle had planned to go on a 45-minute hike and spend the rest of the day at the beach with friends. But, the emails were coming in so fast and furious that the Toronto-based social media strategist decided to stick close to wifi. He remained at his AirBnB to do damage control instead.

Doyle, 29, spends approximately 20 hours a week on freelance work on top of his demanding full-time job; partly to pay off the egregious amount of student debt he accumulated in school. “There hasn’t been a vacation since 2016 when I haven’t brought my laptop,” he says.

If Doyle’s story sounds unique, it shouldn’t. According to a study done by the business and financial management platform HoneyBook, 92% of freelancers regularly work through vacation. 60% do so because they feel like they don’t have a choice. Celebs like Ed Sheeran, Selena Gomez and Kendall Jenner may tout the benefits of a digital detox, but those with the ability to actually unplug are the lucky ones. The forty-hour workweek, where evenings and weekends represented sacred personal time, is a thing of the past. And for full-time freelancers, which roughly 40% of Canadian millennials have been at some stage of their career, those boundaries between work and life barely existed in the first place.

“The financial uncertainty of freelancing can make it feel impossible to stop hustling even for a day or two,” says Eva Holland, a freelance journalist based in Whitehorse, Yukon. One of the only ways Holland says she’s able to stop working is by physically leaving the house to avoid the gravitational pull of her laptop. “It’s an extreme rarity where I’m not working on a weekend.” Truc Nguyen, a Toronto-based freelance writer and stylist went on a ten day vacation to Japan in 2019 with family and ended up filing 10-15 stories during the trip. Days were spent sightseeing with her daughter, but evenings she stayed up past midnight scrambling to meet deadlines.

Freelancers have difficulties creating firm boundaries between work and life for a number of reasons. According to Dr. Nancy Worth, a geographer at the University of Waterloo, the labour market is becoming more insecure and freelancers feel the need to be consistently available in case a last minute request or gig comes through. Freelancers live in a state of constant flux and often have no idea where their next cheque is coming from, so those with fewer boundaries may be more likely to get work. “There’s a danger of being rewarded for something that might ultimately cause you to burn out,” she says.

Freelancers also take on an increased mental load of responsibilities compared to salaried employees. Worth uses the metaphor of an iceberg to explain the inventory of tasks freelancers must perform: above the water is the paid labour that gets invoiced for; below is an even larger chunk of mass that involves looking for work, chasing down invoices, networking and skills training. The sheer magnitude of tasks that can be considered work-adjacent helps contribute to the sense that freelancers are working all the time.

In a joint paper from the University of British Columbia and Harvard Business School, researchers Alice Lee-Yoon and Ashley Whillans determined that people who prioritize time over money experience greater levels of “subjective well-being” and are more likely to spend leisure time on activities that promote happiness. On the flip side, people who view time as money – aka most freelancers — are liable to spend significantly less time with family and friends. “Specifically, when people are asked to think about the economic value of time, they adopt a mindset focused on maximizing productivity, which increases impatience and even diminishes the meaning people derive from their work – increasing psychological stress.”

As the number of freelancers in the labour market continues to grow steadily, Worth is optimistic that governments and institutions will begin to increase protections for freelance workers, such as California’s newly-introduced AB5 legislation. But until then, it will continue to fall on freelancers themselves to create boundaries that protect them from exploitation. 

Holland says taking time off work is more feasible now that her career has stabilized, “but it’s still easy to fall into a bad cycle of working after dinner every night, working all weekend.” Renee Sylvestre-Williams, another established journalist, takes breaks from work, letting her clients know in advance that she will be unavailable.

For Sylvestre-Williams, this kind of break isn’t a luxury, it’s a necessity. “I can see the quality of work [dip] when I’m stretched too thin,” she says. “I’ve had work come back from a couple of my editors and it’s marked up, really heavily edited.” According to the law of diminishing returns, investing more energy and resources into a process cannot infinitely improve its output. In other words, working constantly isn’t necessarily going to make the work better or more plentiful so we might as well take a break.

This spring, Doyle has planned an upcoming vacation to Iceland with his partner, and has vowed to leave his laptop at home. “I want to go enjoy myself and untether,” he says. He plans to delete Slack from his phone and only check his email once every 48 hours. “I think back to the times I’ve gone on vacation and been super wired about work and nothing actually happens.” In other words, it’s time to let go.

WRITTEN BY VICTORIA BEVILACQUA

Well, folks. It’s here. The last month of 2020. It certainly has not been an easy road for many of us. But, we can confidently say we learned a lot about ourselves, the world around us, and the things that matter the most in life. This month, our team is reflecting on 2020’s lessons and perspective shifts and silver linings. Check it out! 

WHAT I LEARNED

Working on your relationship with yourself should be a priority. You have to find ways to love yourself, rely on yourself, and be comfortable with the person you are. Because when push comes to shove and sh*t hits the fan, that’s what you’re left with – its what will get you through the tough times. 

MY SILVER LINING

A lot of people hated lockdown, and, don’t get me wrong, it definitely took its toll on me too. But, I will say, it was nice to be rid of FOMO for a few months and to feel ok with slowing down, nesting and spending time with myself.

HOW I ADJUSTED MY SPENDING

2020 forced me to examine how my spending wasn’t always aligned with my values. This year put into stark focus why I was no longer ok with carrying on that way. I’m doing the work I need to do to become a more conscious consumer.

WHAT I LEARNED

The importance of spending time with family and friends. Not being able to see people in person really makes you appreciate those face to face moments.

MY SILVER LINING

2020 has forced me to really get serious about my savings. I’ve been able to really nail down my financial and long term goals.

HOW I ADJUSTED MY SPENDING

Since saving has been my main priority I’ve been hyper aware of how I’m spending. I am a huge foodie so I continue to support my favourite local restaurants. And I can confidently say, I have barely spent money on clothing (maybe a few sweatsuits – but who hasn’t?).

WHAT I LEARNED

This year helped me realize that life is too short to settle for anything less than what I’m worthy of. Every day that I’m alive is a gift, so what am I going to do with it?

MY SILVER LINING

2020 has helped me slow down and get very clear with what matters to me. It helped me become more intentional with how I spend my resources (time, energy, and money).

HOW I ADJUSTED MY SPENDING

I spent more money this year on my own personal development than every year before combined. I understood that the person I needed to be had to change for me to have the life I want. This required me to invest in myself.

WHAT I LEARNED

The importance of having an understanding and mission-driven team. We had to scale things back a bit in our business, including cutting a few hours for all the staff in order to keep afloat around the beginning of the pandemic, and everyone was so willing to work together and do whatever it took.

MY SILVER LINING

Both mine and my husband’s work went fully remote, so working from home together, being able to go for morning coffee walks or outdoor lunch dates, or working together from a park bench in the Summer was an amazing blessing and silver lining amidst the tumult of this year.

HOW I ADJUSTED MY SPENDING

I’ve saved hundreds and hundreds of dollars on transportation, take-out coffee and lunches since no longer having to commute to an office. We’d just order in for Friday “date nights” to support local restaurants in our neighbourhood. And, of course, I’m not buying and clothes or make-up, just “elevated sweatpants”, and good sneakers for my much-needed outdoor walks.

WHAT I LEARNED

Something about a global pandemic that closed borders and forced everyone online made me reassess my interaction with/on digital platforms. I am more intentional about community while taking the time to disconnect often digitally

MY SILVER LINING

One word – motorcycle!

HOW I ADJUSTED MY SPENDING

I redirected my spending to focus more on activities that allowed me to explore my local surroundings in new ways.

WHAT I LEARNED

How unimportant my “stuff” is and how very little spending is needed to do the things in life that actually make me happy.

MY SILVER LINING

The pandemic forced me to prioritize my mental and emotional health and was the catalyst I needed to walk away from a very toxic relationship. This was someone I loved deeply for a decade of my life, yet leaving was necessary. It was the hardest, most terrifying yet absolute BEST thing I have ever done for myself.

HOW I ADJUSTED MY SPENDING

I’m making more of a conscious effort to shop/dine local. It actually helps me save money because typically prices can be a little higher and this forces me to think deeply and meaningfully about each purchase.

WHAT I LEARNED

The true importance of having an emergency fund when a pandemic hits and work dries up.

MY SILVER LINING

The pandemic forced me to slow down and focus on my self care and mental/emotional health and I feel so much better than I did a year ago.

HOW I ADJUSTED MY SPENDING

I’m more aware of my needs vs my wants and am a lot more cautious with spending. I’m also more cognizant of my spending being political and spend more on small businesses who need help to stay afloat during the pandemic vs. corporations.

WRITTEN BY VICTORIA BEVILACQUA

Owning and running a small business isn’t for the faint of hard even on the best of days, let alone during a global health and economical crisis ripe with uncertainty and intermittent, inconsistent government mandated closures around every corner.

Whether it’s an independent coffee shop that provides a place of gathering for a community or a clothing shop that gives up-and-coming designers a chance to launch their lines, the small businesses that make up the fabric of our neighborhoods are an essential part of our local, national, and even our global economic well-being. Now, they need help. 

SMALL BUSINESSES HAVE BEEN DISPROPORTIONATELY AFFECTED BY THE COVID-19 PANDEMIC

Canadian small businesses have been disproportionately affected by the economic downturns resulting from the COVID-19 pandemic. Small businesses, particularly in the service industry, like local restaurants and salons, were more likely than big box retailers to see their revenue plummet by more than 40% this year. They were also more likely to have to lay off employees and to have their request for payment deferrals rejected. 

To add salt on the word of systemc economic disparities, female and visible minority business owners have suffered the worst of this downturn.  Black-owned businesses in the United States were hit especially hard while Latinx and Asian businesses also experienced substantial losses. 

UNCERTAINTY IS PLAGUING BOTH BUSINESSES AND CONSUMERS THIS HOLIDAY SEASON

Now, with the uncertainty and miscommunication around the rules of closures and lockdown this holiday season, the financial strain and stress of the future of these small businesses is coming to a boiling point. 

And, as bad as this is for small business owners and the local economy, the negative effects are also affecting consumers. More than half of respondents from a study conducted by PwC reported job loss or reduced hours during the pandemic.  For those who haven’t seen a change to their employment status, there remains the looming fear that it might be coming. Understandably, many are tightening their purse strings this year.

WHY SUPPORTING SMALL BUSINESS MATTERS 

It is more important than ever to carefully consider where we are going to spend each and every dollar, not just over the holiday season, but through the many months that will follow this crisis, during what will undoubtedly be a slow re-build. 

Here are just a few reasons, not that you need convincing, of why small businesses not just need your support, but deserve it.

The recent influx of Instagram-able gratitude journals, and influencers talking about their gratitude practices, comes as no surprise. The principle and practice of gratitude is an incredible mental, emotional, and even spiritual tool that has the power to shift your perspective in so many areas of your life – from your relationships, to your career, as well as with regards to your money. Here’s how the intentional practice of gratitude impacts your financial life, and how it can help you better think about and manage money. 

Defined as the positive emotions you experience when you receive something of value to you — gratitude has been found to stimulate greater overall happiness within people. Research published in The Journal of Positive Psychology, found that materialistic people who experienced the least amount of gratitude or positive emotions also had the least overall life satisfaction. 

So, what are some practical ways that we can practice gratitude in our lives that don’t seem airy fairy? Here are some helpful suggestions from the Paper & Coin team: 

TRAVEL AROUND THE WORLD

This might seem counterintuitive, at first, but, if you can afford to make travel a regular part of your life, experiencing different cultures, lifestyles, and varying levels of socioeconomic situations can shed light and bring perspective on how good you have it, even though you may not always see it that way. – OCTAVIA

GET OUT IN NATURE

I find that getting out into nature inspires gratitude for me because it puts me in a really positive and mindful headspace. I tend to make impulse purchases when I’m feeling down or stressed, so if I can manage my mood I think it helps me manage my spending. – VICTORIA

EXPRESS VERBAL APPRECIATION

I practice gratitude verbally with the people around me who do good things for me, for others, for themselves. To see others light up when being recognized for their small wins and good deeds makes me more conscious of the good I do as well. Financially, it helps to remind me that “stuff” really doesn’t freaking matter. I’ve learned to embrace spending on experiences that uplift me without any shred of guilt, because I worked hard for it, planned for it, and decided that it’s a financial priority for me. – CINDY

HAVE A DAILY REFLECTION JOURNAL

I have a daily practice of reflecting on my day at the end of the night. I look back at all the amazing things that happened and people I had the opportunity to connect with, and write about it in a journal. This gratitude practice helps me get clear about what truly matters to me, and reminds me that money is meant to be spent on things I truly value. – NICO

PRACTICE GENEROSITY

There is also something inexplicably calming about giving money away or randomly splurging on friends/family. It warms my heart, somehow even alleviates the pressure of bills/expenses. I know…it almost makes no sense, but at the same time, it does. – TUTI

MEDITATE AND BE MINDFUL

I’ve been trying to use Headspace, a mindfulness and meditation app, to help me be more present and intune with how I’m feeling. I always stress about getting more money for the future, but with meditation, it’s a reminder to be thankful for what you have in the moment. – JESSICA

Even though the old adage says, “money can’t buy happiness”, it’s really that, though money can buy things, those things ultimately won’t make us happy. Or, if they do, it’s a fleeting happiness. But, having gratitude for the money and possessions you have, is what truly leads to more happiness, not acquiring more stuff. 

So, regardless of whether you have much, or little, try some of the suggestions from our team to align yourself in the right perspective, and center yourself in gratitude before you start chasing for more. WRITTEN BY VICTORIA BEVILACQUA

Making the decision to finally get a handle on your personal finances should feel exciting! Why? Because it’s an opportunity to dream big and take the time to reflect on what you really want to get out of life. Unfortunately, societal norms die hard. Many millennials are still stuck on the same benchmarks of financial success that defined the generations that came before us. Like, for example, owning a home. 

While you might be tempted to stick to the straight and narrow, it’s important to take time to pause and self-reflect; force yourself to dig a little deeper. Often, you will discover that what you really want and what you think you should want are two very different things.  

Maybe instead of owning a home, you’re more interested in having enough money to travel the world. Perhaps, you want to invest in starting up your own business. Or, maybe you want the freedom and flexibility to live and work on your own terms. Paper & Coin client, Emma, pursued all of those things as a self-employed, freelance graphic designer and digital nomad. But, it wasn’t always midday beach breaks and working from coffee shops. Emma’s journey began from the crippling feeling of being stuck, working an uninspiring 9 to 5 job that wasn’t hitting the mark. 

At just 23 years old, she handed in her 2 weeks notice to jump into the unknown world of freelancing with the goal of running her own business and becoming a digital nomad.

“Through all the ups and the downs, I would constantly tell myself, ‘if they can do it, you can do it,’ says Emma.

So, how did she turn that can-do attitude into her dream gig? She started by getting a strong financial plan in place. She spent 6 months working a full-time contract while taking on freelance design projects on the side. She saved up $13,000 and booked a one-way ticket to Palm Springs where she embarked on three months of travel. As she explored, she worked hard to build up her business, M Line Studio. 

Emma recently returned to Canada and met with Paper & Coin for a Money Masterplan session to level up her personal and business finance game. “Before working with Paper & Coin I was DIY-ing my business and personal finances. I had a super basic understanding of money management, but when it came to saving for retirement and how to invest my money, I was completely lost,” she says. 

“My coach walked me through a personalized plan and gave me crystal clear next steps. The in-depth call, paired with a customized Budgeting Template and Master Plan were exactly what I needed! I feel so much more confident knowing that I’m finally investing in my future and setting myself up for financial success, instead of just procrastinating.”

So what’s next for Emma? As she continues to live a life of travel and freedom, eventually she’d love to lay down some roots.

“I feel so at ease knowing that I’m contributing monthly to my RRSP and investing in a TFSA, so that I can buy my dream home by the water!”

When you start to think about your financial goals don’t forget to ask yourself the most important question: “why?” Dig deep and discover what your dream life really looks like. Then, book your FREE 30-minute consultation with a Paper & Coin financial coach, and we’ll help you build a plan to get there! 

Prefer to work through a self-guided course? Our Money Masterclass online course is launching this September. Sign-up for pre-sale notifications today!WRITTEN BY OCTAVIA AHSAN

Impact, revenue, and profits; once the key metrics of business and financial success, have seemingly been replaced with lightning-fast scalability, whopping injections of venture capital, and bloated valuations based on perceived future economic success. But, despite how it may look in the media or your news feeds, there’s no defined path, no right or wrong or one-size-fits-all way to build and scale a successful company. 

In fact, we might actually benefit from taking a step back and re-considering the merits of a slower, steadier, and ultimately, more sustainable approach to scalability and profitability. How might going back to basics and bootstrapping the founding of a company affect the longevity of a company? How might growing at the pace of cash impact business development, as well as the lesser emphasized impact on the health and well-being of founders, executives, and most importantly, the employees doing the day-to-day work? 

WHAT DOES ‘BOOTSTRAPPING’ EVEN MEAN?

The term bootstrapping originated in the early 19th century from the expression “pulling up by one’s own bootstraps”, implying an obviously impossible feat. Later, it became metaphorical for success with no outside assistance. In the context of business, it characterizes building a company from the ground up with nothing but personal savings and the cash generated from its first sales. Studies show that more than 80% of startup operations are funded by the founders’ personal finances, with an average of $10,000 capital to get a company off the ground. 

This traditional, low-budget picture of entrepreneurship stands in stark contrast to the highly publicized and celebrated venture capital (VC) funding stories flooding our LinkedIn and Twitter feeds. While VC funding and start-up accelerator programs were originally launched to help entrepreneurs foster innovation, simply getting an introduction to VC investors these days can take months, or even years. Not to mention the all-consuming process of endless networking and meetings, meticulous market research, carefully crafted business plans, complex financial structures, and quarterly performance reviews. The ideal environment for buttoned-down professionals and MBA graduates –  not the real world of the everyday entrepreneur.

THE NOT-SO-HIDDEN COSTS OF SCALING.

In his bestselling book, Zero to One, famed tech entrepreneur and venture capitalist Peter Thiel said, “If your product requires advertising or salespeople to sell it, it’s not good enough: technology is primarily about product development, not distribution.” Yet, popular tech-driven, direct-to-consumer brands like Away, Glossier, Harry’s, and Casper, which are creating ubiquitous products and rely solely on the model of mass online distribution and social media advertising are being artificially sustained by billions of dollars in venture funding. 

Under the guise of disrupting traditional retailers and sales channels, these millennial-friendly brands were able to capitalize on the breakneck rise of platforms like Facebook and Instagram. Now, these brands are struggling to keep up with the mounting pressures that come with accepting too much capital, the high cost of distribution, and standing out and scaling an increasingly crowded online space. 

The truth is, few entrepreneurs start with a truly original concept. And VCs that are hell-bent on finding and funding the next proverbial unicorn have fostered a toxic, unsustainable, and counterproductive precedent for startups all over the world. 

THE NEGATIVE IMPACT ON YOUR BIGGEST ASSET.

For most entrepreneurs without powerful, cash-laden VCs backing them, or breathing down their necks, startup success looks like landing that first big client, or launching that bootstrapped product. Securing enough revenue to scale to the next level – bringing on production help, hiring more sales staff, or amping up your marketing spend. 

This stands in stark contrast to the “fund now, profit later” model, where companies race to get that foosball and beer cart loaded brick-and-beam office, go on a hiring spree, and only then work on generating any revenue. They’re taking the “it takes money to make money” saying to the nth degree, when in reality, most companies shouldn’t need millions in funding to start making money. A seed-funded startup gets automatically caught up into the fundraising cycle after being injected with cash and expected to grow as fast as possible, only in order to justify the next round of investment. Generating cash flow, or returning a profit is irrelevant – it’s all about hypergrowth and scalability. 

Additionally, many companies fail to recognize the negative impact the pressures rapid scalability has on their most powerful asset – their employees. Elaisha Green, a Toronto-based social media strategist and travel blogger went from working for years at one of Canada’s largest and most successful tech companies, to a fast-growing startup producing online content around the burgeoning cannabis industry. Despite having all the superficial bells and whistles you’d expect from a startup in a hyper-growth sector, Green likened her experience there to working at a sweatshop, and describes an executive staff “that burned through cash like no other company I’d ever seen before, with no plausible business model”. Instead, she claims the company was “spearheaded and propelled forward with flashy headlines, a great PR company, interesting branding, and viral videos”. Green eventually left the startup as a result of her experience there leading to severe anxiety and depression.

Highly skilled and experienced employees that contribute their time and energy to their employers need to understand the inherent, and literal value they hold not just for generating revenue and profits, but also to raise funds. “Many of my former co-workers would be used and leveraged in pitch decks to VCs. ‘So and so worked at Vice, Facebook, Shopify, or Microsoft’…that really helps startups secure funding. People need to understand that they are just pawns in the game when they’re working at a company that’s not profitable”, claims Green. 

THE BENEFITS OF BOOTSTRAPPING YOUR BUSINESS.

In light of the potential financial and mental-health detriments of the sensationalized VC-funded model, what are some of advantages and disadvantages of the lesser publicized bootstrap model?

FINANCIAL CONTROL

Firstly, for better or worse, bootstrapping your own venture means you’ll typically have greater control of your company’s finances because, ultimately, it’s your money that’s being used to fund business activities. Though some might consider this a disadvantage, as they’d rather use and risk “someone else’s” money, self-funding forces you to be more mindful and careful about your spending, investing primarily in areas of the business that are most likely to generate revenue and return a profit. The disadvantage here is that if things don’t work out, you’ve lost that money. But, on the brightside, you wouldn’t be liable for any financial damages, or having to pay back any creditors. 

CREATIVE FREEDOM

Self-funding also enables you to exercise greater executive decision-making power, and creative freedom. Since you aren’t beholden to any investors, you’re able to use your own money as you see fit. But, with great freedom comes great responsibility, and therefore requires diligent financial management. 

SUSTAINABLE GROWTH 

Lastly, and perhaps most importantly, bootstrapping and self-funding forces you to grow at the pace of cash. Though this slower speed may mean you’re unable to release products, scale new divisions, hire, or break into new markets as fast as your competition. It does ensure that as you reinvest revenue back into the company, scale, and grow, you’re doing so in a sustainable way, with enough self-generated runway to approach inevitable business and financial challenges. And, instead having to dilute equity, founders can retain their ownership, and not incur undue pressure on themselves or their employees in order to generate a return for external investors. 

Regardless of whether entrepreneurs choose to bootstrap and self-fund, or raise outside capital, sustainable financial and business development practices are imperative to correcting what’s become an unhealthy, misdirected, and foolish obsession. Founders need to consider the holistic impact of their funding decisions beyond scaling at any cost, and lining the pockets of their investors.

WRITTEN BY OCTAVIA AHSAN

Life is going to throw you some curveballs. But, that doesn’t mean that you can’t be prepared for them. Here’s how having both an emergency fund and the right insurance in place can help protect you during those inevitable rainy days.

SH!T HAPPENS. ARE YOU FINANCIALLY PREPARED? 

Imagine if tomorrow you were no longer able to work, your income decreased substantially or your expenses spiked dramatically. What would you do? 

What would you do if a family member gets sick and you have to take unpaid time off work to care for them? Or, worse, someone you love passes away, and now you’re left with a bill to take care of their final expenses. 

Though this might seem dramatic, maybe even a bit morbid, when it comes to your finances, you have to be ready for anything. These drastic scenarios aside, there are other, more common reasons that you would need to be financially prepared. 

Perhaps you are a freelancer whose income varies wildly from month to month. Maybe your dog just ate something extremely questionable and now your palms are sweaty as the vet receptionist prints up your bill. 

These are just a few examples of exactly why you need to have a fully-funded emergency fund locked and loaded at all times. 

BULK UP YOUR EMERGENCY FUND 

If you had at least three to six months worth of essential living expenses set aside, you would feel a lot better about your situation, wouldn’t you?  This money is designed to function as income replacement in the event that you can no longer work, your income decreases drastically, or your expenses spike drastically. 

It’s important to note that your emergency fund should be kept liquid and safe from market risk.

• Liquidity means your money is readily accessible, so not locked up in an investment you can’t sell or an account you can’t access freely. 
• Safety implies that it is not invested in anything that can cause it to decrease in value. So, ideally you’re looking to store this in a standard high-interest savings account.

Emergencies are almost always an unpleasant surprise. Like that annoying aunt that always visits without calling and tells you how much weight you’ve put on. We recommend eliminating all debts before advancing to investments, and using your emergency fund to serve almost like a self-funded insurance policy to protect against the risk of running up debts and defaulting on bills due to short-term income shortfalls. 

WHAT TO DO WHEN AN EMERGENCY FUND ISN’T ENOUGH

What about instances when the 3 to 6 months worth of basic living expenses in your emergency fund just won’t cut it? This is where an appropriate insurance policy that’s fit to your goals, financial situation, and lifestyle comes in. 

In this case, we’re talking about personal insurance policies that protect your livelihood, not your stuff. There are a few different types of insurance policies that fall under this category. 

Life insurance. In the event of your death, your beneficiary/(ies) receive a tax-free lump sum death benefit.

Critical Illness Insurance. In the event you become diagnosed with a major illness, or suffer from a catastrophic injury, you receive a tax-free lump sum living benefit.

Disability Insurance. In the event you become unable to work for an extended period of time due to injury or illness (including mental health), you receive a monthly tax-free living benefit. 

DEATH BENEFITS AND LIVING BENEFITS

Within the realm of personal insurance policies, there are both death benefits and living benefits. Life insurance provides a death benefit, which implies that you personally won’t be seeing that payout, but your beneficiaries will. 

If there are people who depend on you financially, or if there are huge financial consequences as a result of your death, life insurance serves as a source of financial relief and care for your loved ones. 

Critical Illness & Disability Insurance, on the other hand, provides you with a living benefit, which means you will personally benefit from it should your expenses increase or your income decrease as a result of an accident or injury. So in effect, these policies serve as an additional emergency fund for you and your family. 

DO I NEED AN EMERGENCY FUND OR INSURANCE?

Having an emergency fund is essential for everyone. Purchasing an insurance policy, on the other hand, depends more on your personal circumstances and the potential scenarios you would like to prepare for. 

Here are some questions and considerations to help guide your decision-making process on whether or not you should purchase insurance, and what kind of insurance you should consider. 

1. Do you have financial dependents, such as children or elderly parents who rely on your financial care? Then, you absolutely need life insurance. Though this won’t protect you, per se, it does protect your family by replacing the years of income you would have earned to help support the household and raise your family. 
2. Do you have large debts that cannot be easily or quickly cleared (such as a mortgage, for example)? Life insurance ensures that your partner or your family can pay off the balance in full without selling the house, or keep the cash to maintain ongoing payments.
3. Are you self-employed? Have high expenses? Don’t not have a partner or family member you can financially rely on? Then, you need disability insurance. If you become unable to work for an extended period of time due to injury or illness an emergency fund can help. But, what if the problem is more severe?  How long will that money last before it runs out? As a sole proprietor you are not automatically enrolled in or covered by programs like Employment Insurance (EI) or Workers Compensation. A personal disability plan will ensure that your paycheque keeps coming month after month when you need it the most.

CONSIDER YOUR ODDS OF DEATH AND ILLNESS OR INJURY

We hate to be the bearers of bad news, but, we’re all going to die. It’s not a pleasant thought but it’s the truth. Ask yourself, “what are the odds that my loved ones will suffer financially if I’m not around?” The answer to that should determine your need for life insurance.

Similarly, the most important question when it comes to serious illness or injury is, “what are the odds that I will struggle financially if, due to illness or injury, I was unable to earn an income for longer than 3-6 months?” The answer to that is what determines your need for critical illness or disability insurance. 

DO YOU NEED AN EMERGENCY FUND OR INSURANCE? 

So, to sum it all up, we ALL need a personal emergency fund – that is a non-negotiable.  But, we don’t all necessarily need insurance.  Ultimately, it’s a matter of who you are trying to protect, what scenarios you’re seeking protection from, and what the odds are that that particular scenario would result in drastic financial consequences.

Still have questions? Book a free call with a Paper & Coin Financial Planner. Our financial coaches are Certified Financial Planners (CFP) and licensed insurance brokers who can help you every step of the way. From planning your emergency fund, understanding insurance products, and finding the right solutions for your needs.

WRITTEN BY VICTORIA BEVILACQUA

As a child, the holidays were a cacophony of sounds, bright lights, flashy colours, and the warmth of a house full of extended family, laughter, food, and lots and lots of love. 

All of that changed the year my Dad passed away. 

Suddenly, the holidays became this painful reminder of what was. Wondering if it would ever be as good again. Those years when my Dad would unconvincingly dress up as Santa Claus, with his breath smelling of whatever liquor he’d been indulging in on the side of his turkey. When there were so many kids in the house that the gifts would sprawl out from underneath the Christmas tree all the way to the middle of the living room. And, when my only worry in the world was resisting the urge to open a gift or two while I waited for everyone else’s to be distributed. It was torturous waiting for “Santa” to say “GO!”. But, when he finally did, the whole house would erupt – wrapping paper flying everywhere, squeals of joy, screams of “thank you!”, hugs, kisses, and “Merry Christmas!” wishes all around. 

Perhaps this year, you’re feeling a little bit how I did during those first holidays without my beloved Dad. Perhaps you’re isolated and lonely in a home that is normally buzzing with the energy of loved ones.

Perhaps you’re having to tighten those purse strings at a time where you were once able to shop, gift, and donate generously. 

Perhaps you’re searching for a job during a time when you were usually looking forward to some quality time off. 

Or, perhaps you’re struggling with the sickness of a friend or family member, or worse, mourning their loss. 

I wish I could find the right words to aptly describe what this year has felt like for so many both here at home and around the world. The words nauseating, dizzying, hollow, and gut-punch come to mind. I know this, because that’s how it felt the day the cops showed up at our door and told us that my Dad had been killed in a fatal car accident. I imagine that for some of you, 2020 has felt a little bit like that.

I’m sure this isn’t the holiday message you were expecting. This wasn’t the holiday any of us were expecting. I wish I could tell you that Christmasses were just as good as those years with my Dad’s big smile and belly laughs. They weren’t. But, they did get better. 

Last year, our holiday theme was “All is Calm”, and this year, fittingly, it’s “All is Bright”. Because, though things feel bleak and dark right now, there is hope for brighter days ahead.

Whether you struggled with a job loss, a business closure, sickness, loneliness, financial strain, or the stress of balancing essential or remote work with your mental and physical health, and the well-being of your family – you will come out of this stronger, wiser, and more appreciative of everything that truly matters in life. Things will get better.

I want to take this moment to personally thank all the healthcare heroes and essential workers who have tirelessly kept our cities, towns, and nation running. I want to thank my incredible team for strapping in for the ride and doing whatever needed to be done to weather the storms of this year. And, I want to thank you, our amazing P&C Community. After all, we too, are a small business, so if you signed up for our coaching programs, enrolled in our online or in-person Money Masterclass, ordered a magazine, or early in the year, attended an event, your support truly made a difference and helped keep our digital doors open. We appreciate you, and cannot wait to continue serving you in 2021 and beyond. 

On behalf of everyone on Team P&C, and from my family to yours, I wish you all healthy, safe, and HAPPY HOLIDAYS.

Cheers

If money were no object – what would you be doing? Would you still be working? If so, what job would you have? Where would you be living? Who would you be living with? What would your house look like? What would you do first thing in the morning? How would you spend your weekends? Where would you travel to? What kind of car would you drive? Would you have a pet? A beautiful backyard? A swimming pool? Your own business?

These are the types of questions we are sometimes afraid to ask ourselves. Why? Because dreaming big can be scary. Perhaps you are concerned about setting unrealistic expectations and not being able to earn enough money to make them a reality. Or, maybe you’re afraid to admit to yourself or to others what you really want out of life. It’s time to let those fears go. Because it’s very difficult to motivate yourself to put the hard work in if you’re not excited about where you’re going.  

Give yourself permission to get excited and start to believe that your biggest, wildest dreams can become a reality with a solid plan, the right support, and accountability. 

Aidan Gunda, an investment analyst from Toronto, experienced a major shift in perspective as he worked towards organizing his personal finances.

“Maybe I don’t want to just rent? Maybe I do want to get a place. Maybe I don’t want a simple, used car.  Because of the fact that I would have the cash and have the plan for it, I can now start to buy things more so based on what I value rather than just based on looking at the price tag,” says Gunda. 

Today, he’s working on saving up for his big travel dreams. “Last year in May I took a trip to the Philippines. During that entire time, I was thinking ‘man I wish that my girlfriend was here with me’. That big financial dream I am working towards right now is to have the cash to be able to take her to the places I’ve seen so she can experience them too.”

For others, like Rodrigo Noorani, a student from Toronto, lofty career ambitions are taking the front seat. “My goal is to become a doctor and I know it’s not a very inexpensive journey,” says Noorani. “I can save up, put money aside for exam fees, admissions fees, and, by doing that, develop a bit more maturity around finances.”

No matter what your dreams are the important thing is that you allow yourself to embrace them, visualize them, and believe that they can and will come true. This is the fuel you need to fire up your financial journey and get yourself and your bank account on track. It is what will inspire you to put in the hard work, stay the course, and take back control of your finances.
Get that spark going! Ask yourself: If money were no object, what would you be doing with your life? Share with us in the comments below.WRITTEN BY VICTORIA BEVILACQUA