Four Questions About Your Money, and Why They Come Before Any Product

A worry is not a plan and it is not a purchase. Between the two there is a step almost nobody takes, which is simply to look at how the money already moves. These four questions are that step. They name no product because the answers come before any product could be discussed sensibly.

Where does your financing come from, and who sets its terms

Every household finances things. A vehicle, a renovation, a roof, a business season, a child’s first year away. The question is never whether financing happens.

The question is who provides it and who writes the terms. When the answer is an outside lender, the terms are set by somebody whose business it is to set them well for themselves. That is not a criticism. It is their job, and they are good at it.

What most households have never written down is the list. Every obligation, who holds it, what it costs each month, when it renews, and who decides the terms at renewal.

That list takes one evening and a folder of statements. Nothing on this site is more useful than that list, and nothing on this site can be discussed honestly before it exists.

The renewal article on this site exists because a renewal is the one moment when somebody else resets your terms on a date they chose. Knowing the date is the beginning of having a say in it.

When money leaves, does any of it come back under your control

Follow one payment out of the household and ask where it lands.

Some of it lands with somebody who will never send it back and was never going to: a merchant, a supplier, a tax authority. That is trade and it is fine.

Some of it lands as interest with an outside institution. That part is the part worth looking at, because it was not buying anything. It was the price of using somebody else’s capital for a while.

The question is not how to avoid paying interest, which is a fantasy, and this site will not pretend otherwise. The question is how much of a household’s lifetime financing has to be done with somebody else’s capital, and whether any of it could be done with capital the household controls.

That is a question about structure, and it has an honest answer in both directions. For some households the answer is that very little changes. For others it changes a great deal. What decides it is the size and the regularity of the financing they do, not a product and not a preference.

What keeps working on the day the income stops

This is the question the surveys reach last and the one that reorders the other three.

Take the list from question one and put one line through the income. Not forever, just for a stretch. A serious illness, a disability, a death in the household.

Then read the list again. Which obligations pause by themselves. Which obligations do not care. Which arrangements keep paying somebody on your behalf, and for how long, and on what condition.

Most households discover two things in that exercise. The obligations are all still there, and the protections they thought they had are narrower or shorter than they remembered.

That is not a reason to buy anything today. It is a reason to read the documents you already hold, which is free, and to know the answer before the day rather than after it. The living benefits and life insurance sections of this site explain what each kind of protection actually promises, in its own words.

Which money is yours to direct, and which is somebody else’s to approve

Two households can hold the same amount and not have the same freedom, and the difference has nothing to do with the amount.

Some money moves when the household decides. Some money moves only when an institution, an administrator or a set of rules agrees. Both kinds are useful, and a household that does not know which is which will be surprised at the worst possible moment.

The locked in accounts article on this site is the clearest example of that difference. A pension moved into a locked account is real money that belongs to the household and cannot simply be used, and the rules that govern it depend on legislation most people have never been told the name of.

Registered plans sit on the same spectrum. Each one trades a tax advantage for a condition, and the condition is the part that decides whether the money is available on the day it is needed.

The question is not which is better. It is how much of a household’s total capital sits on each side of that line, and whether the balance was chosen or simply accumulated.

What this practice calls the direction

The four questions above are not a strategy. They are a way of reading a situation, and any competent person in this field would recognise them.

What this practice calls the direction they point in is Infinite Financial Sovereignty, a registered trademark of Jose Salloum. It means moving, over years and by ordinary decisions, from a household whose financing terms are set entirely by others toward a household that sets some of them itself.

It is a direction rather than a destination, and that distinction is not modesty. No household in Canada finances everything itself, nobody should try, and any material suggesting otherwise should be read with suspicion.

The specific contracts and mechanisms that can be used in that direction are explained in detail on the strategy pages, and the fullest treatment of the underlying concept lives on our other property, which is where that subject belongs. This page deliberately stops here.

The limits, said before anybody asks

A page like this is worth nothing without its own limits printed on it, so here they are.

None of this reduces the price of groceries, and no arrangement anybody sells does. A household under real monthly pressure should deal with the pressure first, and where the pressure is debt beyond managing, the right person is a licensed insolvency trustee rather than anybody here.

None of it is a substitute for the public floor. The public plans pay what they pay, and the articles on this site set out what that is, because a household cannot sensibly plan around a floor it has never measured.

None of it is investment advice. This practice is licensed in life and health insurance, not securities, and the footer of every page on this site says so.

And none of it happens in one conversation. What can happen in one conversation is the four questions getting answered out loud, which costs nothing and is the only thing this page is asking for.

Where a household actually starts

With paper, and with the questions in order.

The list of obligations, from question one, with the renewal dates on it. Then the interest question, which needs the same list read a second way. Then the income line struck through, which is question three and takes an hour. Then the sorting of capital into what moves freely and what does not.

A household that does those four things has done more than most people ever do with their money, and has bought nothing.

If a conversation is useful after that, it will be a much better conversation, because it will start from a real picture rather than from a worry. And if no conversation is needed, the four answers are still worth having.

Frequently Asked Questions

Continue Learning

The worries these questions answer are set out with their figures in what Canadians are actually worried about with money, the money that is not yours to direct in the LIRA and the LIF, and the public floor in the Canada Pension Plan explained.