All posts by Financial Independence Hub

3 predictions for the future Retirement landscape

By Sia Hasan

Special to the Financial Independence Hub

Retirement should be a time everyone looks forward to embracing. Theoretically, everything becomes easier in time. A retiree doesn’t need to deal with all the pressures of a stressful full-time job. Days can be spent doing more of the things the retiree enjoys. Such imagery, however, may only reflect the most idealized version of retirement years. Relaxation in retirement remains heavily dependent on how much money has been saved for those golden years.

Saving for retirement has to be about more than just putting a set percentage of income away. Careful thinking and planning are required to make sure retirement assets become adequate enough to cover leisure and necessary expenses. The changing future landscape of retirement further necessitates better planning.

Longer Life Spans and Retirement Savings

Increased life spans definitely impact the way people save for retirement. Thanks to insights into healthier living and great strides in healthcare, a larger percentage of people live much longer. Living to the age of 100 may even be possible for a significant number of people. Better retirement planning definitely works to the benefit of someone who lives a very long life.

Working during early Retirement years

Upon retiring at age 70, maybe it would be wise to look for another job. Working a full-time job might not be necessary, but earning a small stream of income from a part-time job could prove very helpful. $10,000 earned from a part-time job covers $10,000 worth of expenses. Working a part-time job until age 75 leads to $50,000 in income. Earning additional money eliminates the need withdrawing an equitable amount of funds from a savings account or social security deposits.

Money saved may draw more interest and be set aside for use during very elder years. After looking at things from this perspective, making plans for a retirement job becomes an important priority.

Examine Annuity Income

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4 truths Business Ownership will teach you

By Sia Hasan

Special to the Financial Independence Hub

Running your own business is equal parts exciting and stressful. No one is telling you what to do, and instead, you need to make the correct decisions if you want your company to be successful. And it won’t just be your life that’s riding on those decisions – if you have employees, they depend on your business’s success, as well.

The responsibility of business ownership brings several important life lessons with it. Here are four of the most significant.

1.) Surround yourself with the right people

This advice is applicable to business success in two ways. The first is that you need the right people around you as either employees or business partners to build and maintain your business. You can’t expect to be successful if you try to do it all. As the business owner, you can’t spend valuable time learning every skill under the sun. Instead, you’ll need to outsource certain things.

The second is that you need to hang out with the right people in your personal life. It’s said that you’re the average of the five people you spend the most time with. If those are driven individuals, they will help raise your game. If they’re unambitious and lazy, they’re just going to hold you back when you’re with them.

2.) Fast, good and cheap: you can have two out of three

So you know you need to outsource certain areas of your business, and you’re thinking of hiring either full-time help, part-time help or a freelancer to work for you on a per-project basis. When you do this, you need to decide what kind of results you want, how quickly you want them and how much you’re willing to pay.

It’s best to look for people who can provide high-quality work quickly, and then pay them what they deserve. If you try to pinch pennies, it will likely end up costing you more in the long run.

3.) Everyone has limits

You’ve probably heard a few crazy stories about famous entrepreneurs and how they work 80 or 100 hours per week. Continue Reading…

3 rookie mistakes that seasoned investors still make

By Neville Joanes

(Sponsor Content)

We’ve all been enjoying the bull market. But getting a historically respectable 6 per cent return, or even doubling it, can feel underwhelming when the economy is roaring ahead and the Nasdaq has gone up 30 per cent.  From what I see, the difference between the big winners and the also-ran-investors often comes down to whether or not they let their biases cloud their judgement. Even experienced investors are not immune.

It’s such a big problem that an entire field of study has sprouted out of this: behavioral economics. Economist Richard Thaler won a Nobel prize for his work looking at how these biases operate among humans in a supposedly rational market.

Here’s a roundup of the worst mistakes I see again and again from DIY investors (which is why a lot of these people would be better off with a set-it-and-forget-it strategy).

Running with the herd

If you want an above-average return, then don’t rush into what the crowd is doing.

Probably the most outrageous example of this mistake is to be found in the irrational exuberance over Bitcoin. Just $1,000 worth of Bitcoin from a few years ago would be over $1 million today. If you threw caution to the wind and invested in this years ago, then you have certainly seen the kind of ROI that Wall Street hedge fund managers can only dream of. But all those gains are in the past, to the benefit of the early adopters.

The vast majority of investors have arrived late to this party. Most of the large gains have already been captured. And while there may be more growth yet to come, experts say that Bitcoin eventually seems destined to repeat its bust cycles of 2011 and 2014. The herd is about to race off a cliff. Usually, by the time your neighbor next door is jumping on the bandwagon, it’s already past time to get off.

Recency bias

We all know that past performance is no guarantee of future returns. And yet, it is basically human nature to ignore that knowledge.

In life, recency bias is actually a useful rule of thumb a lot of the time. Your friend who always shows up late will show up late again. The restaurant you liked years ago, but whose quality keeps declining will continue to suck, in new and intolerable ways.

For investing, recency bias can really do harm. We see a line graph showing a steadily-rising return, like with the Nasdaq: well, why wouldn’t that trend continue? Because it can’t. Over time, as an asset rises in value, we can expect it to fall back down to the mean.

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4 ways to avoid a financial crisis before it happens

By Lidia Staron

Special to the Financial Independence Hub

Do you want to avoid a financial crisis before it happens? Everyone does, but few are willing to take the essential steps. You might have heard rumors of a significant economic crisis just looming around the corner. Whether it happens at a personal or national level, it feels good to know that you have done something to avoid it or at least soften its impact in your life.

In this post, let us take a look at some of the most effective ways to avoid a financial crisis before it happens:

1.) Save before you spend

Benjamin Franklin said “a penny saved is a penny earned.” Nothing can be truer than that! Every time you spend on something, you take out cash from your pocket. It decreases your wealth. Spending on unnecessary things may mean that you could have used precious resources for other things.

Now, it doesn’t mean that enjoying the fruits of your labor and buying things that you love are bad things. The point is that sometimes you just have to make small sacrifices today to enjoy great rewards in the future. And that’s precisely what saving can do for you.

The best way to avoid a financial crisis is as simple as saving a penny a day. You can then gradually increase your savings each month. It may sound small at first, but great things start from little things. The key here is consistency. Just keep on saving, and you will soon see how it can help you become financially secure.

2.) Make a Budget

It’s helpful to be reminded of this adage, “If you failed to plan, you planned to fail.” Budgeting is a form of planning for the future. Some people mistakenly thought that they could go on with their lives without a budget. Almost always, without fail, those who don’t have a budget are the same people who are in a financial strait.

Making a budget does not have to be complicated. It only takes a few minutes. Decide where your money goes and ensure that you track every penny from your wallet. If you made a personal loan online, then make it a point to pay off debt first as much as possible before spending on things that are just optional. Continue Reading…

Why you might get more for your home in January

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

When it comes to nuggets of real estate wisdom, a persistent adage is that one should avoid selling in the winter at all costs:  after all, bad weather, limited sunlight and poor driving conditions don’t inspire shoppers to peruse open houses.

But while it’s a fact that the winter housing market is a slower one — there were 25 per cent fewer sales in the Toronto real estate market in January 2017 compared to the previous May —  having to list your home in the new year doesn’t necessarily mean compromising on your profits.

In fact, due to a few seasonal phenomena, listing your home for sale in January can translate to a higher sales price; here’s why.

Winter buyers are extra motivated

Just as January sellers are likely listing for a reason, early-winter buyers are also likely driven by a sense of urgency. In fact, a small but persistent bump in activity is typically seen in the weeks following New Year’s Day, as buyers who shelved their holiday home purchases jump back into the market.

January also tends to be a busy season for mortgage pre-approvals, especially for organized buyers seeking every advantage in preparation of the spring market. However, once these buyers have confirmed their maximum buying power, they may be tempted to take a preliminary look at what’s available now, including your listing.

“The fact is, if you’ve waited until spring to get a mortgage pre-approval, you’re already late, and there are a few real estate market factors that will work in your favour if you act now,” says Mike Bricknell, a mortgage broker at CanWise Financial.

“It is very beneficial to get your mortgage pre-approval when the housing market is quieter, especially as there have been many recent industry changes that may have affected what you can afford.”

Low supply means higher prices

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