Monthly Archives: July 2016

Review: How NOT to Move Back in with Your Parents

51UopHxeZ+L._SX331_BO1,204,203,200_You’re a millennial. You’ve recently graduated from university and are beginning your career. You aren’t making quite as much as you’d hoped for, and as it turns out, rent is crushingly expensive.

Okay, you’ll just put off moving out for six months, save some money, live at home. Everyone’s doing it these days. You’re sure that before you know it you’ll be on track to success, living it up in homeowner-ville, sitting pretty. You’re not quite sure exactly how you’ll get to homeowner-ville, but it can’t be that hard, right?

If any of this sounds plausible, I would seriously consider reading this wonderful book called How Not to Move Back in With Your Parents – The Young Person’s Guide to Financial Empowerment by Globe and Mail personal finance columnist Rob Carrick. I don’t want to be dramatic and say it will be your new finance bible, but it’s definitely a book you’re going to be referencing time and time again throughout those first few post-graduate years.

Something I really love about this book is that it’s broken down into great detail. Not only that, but it’s organized according to when in life you should be needing the advice.

Covering all the financial bases

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Working part-time in Semi-Retirement a boon to finances

Man Hand writing Work Part Time with black marker on visual screen. Isolated on sky. Business, technology, internet concept. Stock PhotoI predict that many aging Baby Boomers will — either by preference or financial necessity — delay traditional full-stop Retirement and instead embrace Semi-Retirement.

My latest Retired Money column, which has just been published at, explores the positive effect on retirement nest eggs of working at least part-time after the traditional retirement age of 65. For full article and chart, click on Should you work part-time in retirement?

It’s based on an analysis by ETF Capital Management, which showed the powerful impact of earning just $1,000 in part-time income each month between the age of 65 and 75; or in the case of couples $2,000 a month between them.

Not working at all after the traditional retirement age of 65 has financial implications, never mind boredom and lack of social interaction. In the case of a retiree with lifestyle expenses of $60,000 who undertakes a full-stop retirement at 65, and earns no extra income, there is a sharp fall in a $500,000 (combined registered and non-registered) portfolio starting at age 65. By the time they reach their early 80s, the nest egg is depleted to zero.

But a couple earning just $2,000 a month between them part-time after 65 and going until 75 will find the extra income delays the portfolio’s drop below zero beyond their early 90s. Not only does the nest egg not decline the first ten years, but it actually rises! By the time you reach 75 and finally stop working even part-time, the portfolio declines from a higher level and much more gradually.

Of course, the more you work, the better: for a couple earning $3,000 a month between them, the portfolio still has more than $200,000 by their 90s!  Similarly, the analysis also shows what happens if you work extra hard, which many might argue wouldn’t even qualify as retirement. At $4,000 a month the portfolio is barely depleted at all by the time they reach 100!

Isn’t this really Semi-Retirement?

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How to win a real estate bidding war

Auction and bidding selling antiques vector illustrationBy Sheila O’Hearn, Zoocasa

Special to the Financial Independence Hub

The real estate industry has a popular saying: “All’s fair in love, war and real estate.”

Nothing could be applied more significantly when it comes to today’s bidding wars on the home of your dreams. Like it or lump it, bidding wars show no signs of waning anytime soon.

Toronto real estate and Vancouver real estate exemplify two of the world’s most sizzling markets that are leading in bidding war trends. Statistics show that sales of existing homes rose by 8% in February, compared to the previous February, and the national average home-price climbed by 17 per cent.

In Toronto, the average price of a detached house capped $1.2-million in February 2016, and house prices rose 15.7 per cent in May 2016, compared to May of last year. In Vancouver, the average selling price of a single-detached home rose to $1.8-million in January, a 40 per cent increase from prices in 2015.

It’s a seller’s ideal market!  As a potential buyer, arm yourself with these three pearls of wisdom:

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The most dangerous asset class may surprise you: Cash!

Depositphotos_16811249_s-2015Investors flee to cash during times of trouble.  However, far from being a safe haven, cash is potentially the most dangerous asset class for investors, luring investors into bigger psychological bubbles than even tech stocks and housing have historically.

We recently wrote about why investors might want to consider holding bonds rather than cash, even at current low and negative yields (see Why on earth would you hold a bond with a negative yield?).  A recent article (see Journey of Cash by Alex Gurevich) and further investor questions have inspired us to think a bit more specifically about cash and its merit (or not!) as an asset class in a well diversified portfolio.

Hold cash for known near-term purchases and an emergency fund

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Contrarian investing near market tops

Stock market positive forecast financial concept and contrarian individual financial symbol as a courageous bull running in the opposite direction of a group of bears as an investing trend symbol.“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is.” — Warren Buffett, the Oracle of Omaha.

Overview: Investing near or at market tops is a skill worth having. Is it time to revisit your approach?

Well, this is a pleasant surprise. Many stock market indices are hovering either at or near the top.

Nearly six weeks ago practically all stocks were getting their wings clipped.
Suddenly, interest in stocks has soared to lofty heights well above the clouds.

The question becomes “how does one invest in stocks now that most people are interested?” Something we have not had to contemplate for about a year.

My view is that contrarian strategy delivers rewards in the long run. Risk is ever present; however, emphasis on quality investments tames the turmoil.

Contrarians know that bulls and bears can swap chairs abruptly with little or no warning.
Contrarians are content with either market direction.

I highlight contrarian investing for both advancing and falling markets: Continue Reading…