The most important definitions are not found in the dictionary; they are the ones you make for yourself to serve your purposes.
You first encountered this idea when your mother told you to clean your room. When you thought you were done she made you clean it some more. The problem was not with the room; the problem was she had a different idea of what a clean room meant (it didn’t mean shove everything under the bed or into the closet and close the door). Besides, you wanted to get outside to play and she wanted the room tidy.
In a posting titled How Findependence differs from Retirement, Jonathan Chevreau makes a case for how he believes the two words are different and why. He argues that you might be financially independent before you retire because you no longer work for a salary. Some who retire need to continue to work because their income doesn’t meet their needs. His definitions for the words are his own.
A piece on market timing is a “must read” for anyone who takes market-timing gurus and newsletters overly seriously. Read A Visual History of Market Crash Predictions. (Note the reference embedded in the URL to “the clowns of Wall Street.”)
Yes, all the big fear-monger names are there, including Harry Dent Jr., Robert Prechter, Marc Faber and even a few Marketwatch columnists and the generally respected Mark Hulbert.
As the piece says, you need to remember that almost everyone has something to sell, and the pundits mentioned generally are in the business of selling newsletters, books, market-timing services or related items. And since Fear is a more visceral emotion than Greed, the scarier the headlines these prognostications generate, the more publicity the market prognosticators are likely to reap, and with that more sales of their products or services. As they say in the newspaper business, “If it bleeds, it leads.”
And admit it, would YOU buy a book bearing the calm and sensible title “Markets will fluctuate, stay diversified for the long run and have a sensible asset allocation?” A better title might be “Ignore these idiots.”
Your palms are sweaty, your mind is racing! Are you ready for such a commitment? It is the next step in your relationship, isn’t it? Even if the odds are against you, but your love is different … stronger!
Right? If you have been in a serious relationship or are planning to, you will relate to the thoughts and concerns mentioned above. However, I am not talking about marriage; I am referring to joint credit.
How it can hurt
Having joint credit won’t automatically lower your score; however, it does increase your risk. As soon as you put your name on and sign an application, you are fully responsible for the complete balance and paying the minimum payment. The banks and lenders don’t care who spent the money, what it was spent on, who has it now, or what it is now worth. If they don’t get their money back as outlined in the contract you are both on the hook for everything. Even if everything on your credit is great, one collection or one bad account will cost you thousands in high interest and fees. You may even be declined.
The odds are not in your favour!
What are the chances of your relationship ending? I’m not generally a big fan of “what if?” questions but it’s important to weigh risk when it comes to personal finance. It doesn’t matter whether your relationship status is boyfriend, girlfriend, common law, partners, or even married. What are the chances of your relationship ending? Most stats give you around a 50/50 chance. If you are a hopeless romantic or really in love then I’m sure you will give yourself a higher chance of success.
Here is the hard cold truth. There is a 100% chance of your relationship changing. When I talk about joint credit most people assume I am talking just about separation or divorce but there is another “D” word that most people don’t want to think about.
The other “D” word
It doesn’t matter if you are in a relationship with your soul mate — death is still guaranteed. You cannot have a joint account with someone who has passed on. As soon as the bank finds out that one of the applicants is deceased you now have to close that account and apply for a new credit card, line of credit, or loan. If all your established credit is held jointly, you will have to start rebuilding your credit all over again if your spouse passes away.
Joint credit alone doesn’t hurt your credit but you need to know how the scoring system works so you don’t end up in trouble. My advice is to make sure you have built individual accounts if possible to limit your risk and protect yourself from having to start rebuilding your credit later on in life. For more free tips on credit you can visit my blog, www.eCreditFix.ca. If you would like to attend a free event to learn more about the other rules of credit visit our events page.
Richard Moxley is the Author of the book, The Nine Rules of Credit – How to Start, Rebuild, and Always Maintain Great Credit. He is also the founder of eCreditFix.ca. Richard has shared his credit expertise with financial professionals and the Average Joes across Canada and the U.S. His vision is too teach all Canadians the rules of the “Credit Game” so they can play the game to win!
The piece mentions several dividend ETFs from manufacturers like BMO, Vanguard and iShares but also presents the views of a few ETF specialists who are not as enthusiastic about these products.
Well suited to TFSAs
Personally, I think Canadian dividend funds are particularly well suited to Tax-Free Savings Accounts: they’re diversified, provide dividend income, have reasonable fees and don’t result in any withholding of tax that may occur with foreign dividend ETFs. The latter are better held in RRSPs, in my view.
Of course, those who are cautious about the stock market will prefer to stuff registered plans with fixed-income vehicles like GICs and put their dividend ETFs into non-registered (taxable) accounts that let Canadians benefit from the dividend tax credit.
The case for being “an owner, not a loaner” was made by me in the fifth “Eternal Truth” of Personal Finance in the recent series that ran in the Post, both online and in the paper. You can find that piece as well as a short (1-minute) video under the headline Embrace Risk, Pay Less Tax. You can find the whole series here. Continue Reading…
The younger we are, the tougher it is to get our heads around retirement planning.
And rightly so. It’s the last thing we care about when we’re in the midst of life: fresh out of school, starting a family or dealing with moody teenagers.
Instead of thinking “retirement,” why not dream about the wonderful world of “financial freedom?”
A time when we no longer need to work for a paycheque. When we’re free to follow our passions without regard to their earnings potential. Imagine being able to spend time doing what really matters at any age? Who doesn’t want the incredible feeling of true financial independence?
Below is the fourth quiz in my series Tackling Personal Finance — Do You Know What You Don’t Know?Continue Reading…
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