Hub Blogs

Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.

Maximizing Income: 15 Strategies for Accelerated Wealth Creation

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Photo by Karolina Grabowska on Pexels

We’ve gathered the wisdom of successful entrepreneurs and financial experts to reveal their strategies for accelerating wealth accumulation. From focusing on high-leverage activities to applying the 50/30/20 budgeting rule, explore the diverse tactics shared by fifteen professionals, including founders and CEOs, on how to maximize income and expedite wealth building.

  • Focus on High-Leverage Activities
  • Diversify Your Income Streams
  • Live Beneath Your Means
  • Invest in Real Estate
  • Turn Passions Into Online Business
  • Leverage Offset Mortgages with Stoozing
  • Build a Collaborative Business Model
  • Pursue Passionate Side Hustles
  • Specialize in In-Demand Niches
  • Invest Earnings in Business Ventures
  • Hire a Specialized Tax Specialist
  • Automate Savings to Investment Transfers
  • Document Achievements in a Brag Book
  • Combine Education with Financial Investing
  • Apply the 50/30/20 Budgeting Rule

Focus on High-Leverage Activities

The best way to maximize your income and expedite the process of building wealth is to focus on your highest-leverage activities and outsource everything else. When you’re doing everything yourself, you can only do so much. But when you delegate as much as possible, you can focus on your core competencies and grow your business faster. This is something I’ve learned the hard way. In the past, I used to do everything myself.

But as my business grew, I realized that I was spreading myself too thin. So instead of trying to do everything, I hired people to do the things I didn’t enjoy or wasn’t good at. This allowed me to focus on my strengths and grow my business faster. For example, I used to spend a lot of time writing blog posts and creating content. But now I have a team of writers who do that for me. This has freed up a lot of my time and allowed me to focus on marketing and growing my business. — Matthew Ramirez, Founder, Rephrasely 

Diversify your Income Streams

One effective approach I’ve used and recommend is diversifying your income streams. By expanding your sources of income beyond a single stream, you can create a more stable and potentially higher-earning financial foundation. Explore avenues such as investing in stocks, real estate, or offering freelance services.

One way I diversified my income streams was through investing in stocks. I researched and identified companies with strong growth potential and invested a portion of my savings in their stocks. Over time, as the companies performed well and their stock prices increased, I earned capital gains and dividends.

This additional income from my investments complemented my primary source of income and contributed to building wealth. By regularly monitoring the market and making informed investment decisions, I was able to maximize my earnings and accelerate my financial goals. — Sacha Ferrandi, Founder & Principal, Source Capital

Live Beneath your Means

Eschew lifestyle creep, which can hamper you from building wealth. Instead, live beneath your means by comparison shopping, creating and sticking to a budget, and funneling savings, raises, and additional monies received into an emergency fund, savings vehicles, and investments.

For example, comparison shopping for your auto and home insurance can save you hundreds of dollars a year. The same goes for negotiating interest rates with credit card companies and rates for other services. Instead of spending that extra money, boost your savings account or open a CD account.

If your employer offers a 401(k) plan, build your wealth by increasing your contribution to it whenever you receive a raise. Be sure to take advantage of the maximum amount if your employer offers a 401(k) match. — Michelle Robbins, Licensed Insurance Agent, Clearsurance.com

Invest in Real Estate

Making real estate investments became my cornerstone strategy for building substantial wealth. Strategically acquiring properties in prime locations and astutely capitalizing on market trends paved the way for a transformative financial journey. Through shrewd decision-making, I cultivated a stream of passive income from rental properties and witnessed significant appreciation in property values over time. The enduring nature of real estate investments proved to be a resilient and effective avenue for wealth accumulation.

By leveraging the power of property ownership, I secured a reliable income source and tapped into the wealth-building potential inherent in real estate. This strategic approach allowed me to navigate the complexities of the real estate market, aligning my investments with long-term growth prospects and contributing significantly to the acceleration of my overall wealth-building objectives. — Bill Lyons, CEO, Griffin Funding

Turn Passions into Online Business

I developed my personal finance site into a thriving business that has been instrumental in helping me build wealth. After paying off my student loans, I launched the site to help other millennials manage money by sharing the frugal tips and repayment strategies that worked for me.

Years later, My Millennial Guide now earns steady revenue through affiliate partnerships and digital consumer banking offers relevant to my audience. I’ve built a sizable audience by providing quality and engaging money advice for free.

My own journey to financial freedom after conquering student loan debt has proven firsthand how lucrative launching an online business around your passions can be. The flexible income from My Millennial Guide provided the runway to leave my corporate job and focus full-time on site growth.

Now, rather than relying on a single income source, multiple automated revenue streams from this one company allow me to maximize earnings while making an impact by sharing financial advice. The wealth-building opportunities entrepreneurship provides are limitless.

I’m proud that the free resources and recommendations I’ve shared on My Millennial Guide have empowered thousands toward financial freedom, while also securing my own prosperous future. Turning my purpose into a business became the ultimate wealth vehicle. — Brian Meiggs, Founder, My Millennial Guide

Leverage Offset Mortgages with Stoozing

A pivotal strategy in my journey to Financial Independence was leveraging an offset mortgage with ‘Stoozing.’ This method, while requiring discipline, has the potential to drastically lower mortgage payments and accelerate wealth accumulation. Taking advantage of 0% interest credit card offers, I redirected these funds into an account linked to my mortgage. This not only reduced the mortgage balance but also minimized interest expenses significantly.

The essence of Stoozing lies in its ability to turn credit into a tool for savings. With over $100,000 deposited from credit cards, my mortgage interest payments plummeted. This approach demands meticulous management to clear the credit card balance before the 0% interest period expires. By doing so, I could fast-track my path to financial freedom by a decade, demonstrating the power of innovative financial strategies in wealth building. — Shane McEvoy, MD, Flycast Media

Build a Collaborative Business Model

To make more money and get rich faster in the legal field, it makes sense to encourage cooperation and build a group law firm instead of a solo practice. Lawyers with different types of skills can work together in collaborative law firms. Because they have different skills, their members provide a range of legal services.

Collaboration allows firms to offer more services, which speeds up growth. When the team is more diverse, the firm can assist more clients and handle more complex legal cases. Working together can bring in more money and help individuals get rich faster. Help desk workers and lawyers share computers, filing cabinets, and office space in a collaborative law firm.

By using the same resources, firms may be able to reduce costs and operate more efficiently. Collaborative lawyers can retain more of their earnings by cutting down on individual expenses. You can get rich faster and make money through smart investments if you know how to manage your finances well. Lawyers can become leaders in their field by focusing on their expertise if they work together. People with specific legal needs should choose this firm because it specializes in those areas of law. Dominating a niche might enhance your legal reputation. Wealthy individuals are drawn to the firm because it has a large market and charges a premium for its specialized services.

Collaborative law firms can showcase their array of services and lawyers’ expertise by representing themselves as a one-stop shop for all your legal needs. This branding strategy makes the firm stand out in the competitive legal market. Effective branding positions the company as an authority, which attracts more clients. As more clients and business opportunities arrive, you make more money and build your wealth. — Martin Gasparian, Attorney and Owner, Maison Law

Pursue Passionate Side Hustles

What I have learned is that as you grow in your career and acquire new skills, this will help you to think about other avenues to travel to bolster your income. Take, for instance, I always wanted to be an adjunct professor, but it was a true process. It did not happen overnight. It took time. We can’t rush the process because once we get there in a hurry, then we can’t stay there. The goal is to get there and have the foundation to remain. Continue Reading…

Managing a Windfall: Sudden increases in Net Worth and how to handle them

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Image courtesy Pexels/Tima Miroshnichenko

By Devin Partida

Special to Financial Independence Hub

The initial excitement of suddenly receiving an inheritance, lottery win or large bonus is palpable, presenting what seems like endless possibilities. However, this euphoria gives way to the daunting reality of managing significant amounts of money.

You face complex decisions that involve managing your new wealth responsibly and planning for your future in ways you might not have considered before. This transformative moment calls for careful consideration and strategic financial planning to ensure your sudden wealth leads to long-term security and success.

The Reality of Sudden Wealth

Many people believe sudden wealth is a one-way ticket to lifelong happiness, but the reality is far more complex. Despite the number of U.S. adults in the upper-income tier rising from 14% in 1971 to 20% in 2019, managing significant financial resources introduces many new challenges.

You might think money will solve all your problems, but it often brings issues, including increased responsibility, potential isolation and the need for meticulous financial planning. Instead of viewing wealth as a simple solution, recognize it as a valuable tool requiring savvy management to benefit your life. This approach ensures you handle your finances wisely, considering the intricate balance between enjoying your wealth and maintaining it for the future.

Understanding the Psychological Impacts

When you receive a sudden windfall, confusion and stress quickly cloud the initial rush of joy as you face unexpected financial decisions. People sometimes refer to this whirlwind of emotions as “sudden wealth syndrome” — a phenomenon that can lead to anxiety, poor judgment and hasty financial decisions.

Taking deliberate steps is crucial to maintaining emotional stability. They include the following:

  • Pause and allow yourself time to adjust
  • Consult with a financial advisor and tax expert
  • Seek support from professionals or support groups

These help you manage your new circumstances wisely and guarantee you make the most of your windfall without emotional turmoil.

Practical steps to manage a Windfall

Create a budget tailored to your new financial situation to manage a sudden windfall adeptly. Start by calculating your net worth to gain a clear understanding of where you stand money-wise. Before making any major decisions, place your funds in a temporary, safe location like a high-yield savings account to ensure they remain secure while you explore your options.

Additionally, take the time to educate yourself on financial management and investment strategies. Enhancing your knowledge in these areas will empower you to make informed decisions that align with your long-term financial goals. This proactive approach will help you maximize the benefits of your newfound wealth.

The Importance of a Structured Financial Plan

A comprehensive financial plan is essential to manage and sustain your wealth effectively. Harness the power of technological advancements like AI and machine learning, which can predict upcoming financial trends and assess investment risks precisely. Moreover, seek the expertise of professional financial advisors who can tailor a plan specifically suited to your unique needs and goals. Continue Reading…

NIA on Canada’s 3-pillar Model of Retirement Income

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The National Institute of Ageing is today releasing the next instalment [“the final Step 1”] of its series of papers on the Canada Pension Plan (CPP/QPP) and the Canadian retirement income system. The link invites readers to click on a download button for a full PDF of the report.

Recall that Findependence Hub’s introductory blog on this was published on April 11th here, and subsequently in my Retired Money column at MoneySense.ca on April 23: How to double your CPP Income. It also summarized in this second Hub blog on April 24th.

Below is a screenshot from the new paper: my comments follow below the graphic, which the NIA defines as a “redefined visual of the Canadian retirement income system.”

 

Recall that the entire series of papers is titled 7 Steps Toward Better CPP/QPP Claiming Decisions: Shifting the paradigm on how we help Canadians.  Step #1 is titled (Re)Introducing the Retirement Income System: A New Framework Tailored to the Retiree’s Perspective.

The accompanying text includes this overview:

“Canada’s retirement income system has traditionally been presented to the public as three pillars, consisting of government-sponsored retirement income programs (CPP/ QPP, OAS and GIS), workplace pension plans and personal savings. However, this traditional framing is a missed opportunity to help workers mentally transition into retirement, encouraging them to shift their attention toward the adequacy of their financial resources to successfully and sustainably finance their entire retirement.”

The paper goes on to point out that here is some irony involved in how the traditional “three pillar” framework of the retirement income system is presented: it does so from the perspective of providers (i.e., government, employers and the financial services industry), rather than those it is intended to inform.

“When viewed from the end user’s perspective, pensions are not a financial pillar of the retirement income system. They are the income foundation on which other financial resources rest.”

By viewing pensions as “a foundation rather than a pillar,” the NIA continues,  “the resulting framework provides a structure that is more focused on spending, with an ‘income’ foundation that securely and sustainably replaces employment income. Private assets accumulated on an individual or collective basis — including tax-deferred savings such as registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs), and defined contribution (DC) pension plans — are ‘spending buckets’ on top of this foundation, providing flexibility to support non-routine spending throughout different retirement stages.” Continue Reading…

Inflation is getting to retirees and some pre-retirees, Fidelity survey finds

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2024 Fidelity Retirement Report (CNW Group/Fidelity Investments Canada ULC)

More than four in five (82%) Canadian retirees say inflation is having a negative financial impact on them in retirement, according to a just-released report from Fidelity Investments Canada ULC.

The 2024 Fidelity Retirement Report also found that 43% of pre-retirees say the rising cost of living is delaying when they think they will retire. In addition, 59% of retirees report helping their non-student adult children in retirement: both with day-to-day expenses as well as big-ticket items like home purchases, weddings and even education savings for their grandchildren.

“It comes as no surprise that retirees are feeling the bite of inflation. Other macroeconomic issues such as a slowing economy, rising rates and volatile markets are also common factors that have negatively affected retirees financially,” says the report, “Pre-retirees are also feeling the pinch. We find that compared with last year, a larger share of pre-retirees are considering delaying their retirement in response to the rising cost of living.”

As you can see from the graphic below, the percentage of pre-retirees who plan to retire later than originally expected rose from 37% in the 2023 survey to 47% in the new 2024 edition.

While less than a third of those already in retirement have worked in some capacity once they have left full-time work, most pre-retirees anticipate that they will work at least part-time once they’re retired, according to the report.

While Fidelity cites rising inflation as one reason for this trend, it also says “most pre-retirees would like extra money for recreational purposes.” Further, the report says, “We also find that there isn’t a clear relationship between those working in retirement and their level of household income, suggesting that in general, many Canadians may be working or anticipating working to maintain a higher material standard of living, rather than just to keep up with the rising cost of essentials.”

 

Continue Reading…

Capital Gains Tax Increase? This new Calculator helps Corporation and Trust accounts

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By Ted Rechtshaffen, CFP

Special to Financial Independence Hub

As you may know, the recent Federal Budget announcement had a few important changes that can have an impact for some, but certainly not all.  The most discussed has been the increase to the capital gains tax.

The most directly impacted are those with investments in a Corporation or a Trust.  Not only will they face an increase in taxes on every dollar of capital gains (not just after $250,000 as it is on personal accounts), but this is forcing some important near term decision making.

For many people in this situation, the question for investments with unrealized capital gains is whether to hold those securities longer term or sell them prior to June 25th to avoid the new higher tax rate.

To help with that choice, we have just launched a new calculator aimed at this group.

It is free for anyone to access.  They don’t have to provide any details.

The calculator can be found at New Capital Gains Tax – Sell or Hold Calculator – TriDelta Private Wealth

Continue Reading…