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Joe Biden this week carrying a copy of Democracy Awakening, via Threads.
While the Hub’s focus is primarily on investing, personal finance and Retirement, Findependence has given me sufficient leisure time to absorb a lot of content on politics and the ongoing battle to preserve democracy and in particular American democracy. What’s the point of achieving Financial Independence for oneself and one’s family, if you find yourself suddenly living in a fascist autocracy?
To that end, I have recently read two excellent books that summarize where we are, where we have come from and where we likely may be going. These books came to my attention from two relatively new social media sites I joined in the past year.
For those who care, I am still on Twitter (now X) but restrict most of my posts there to the financial matters on which this blog focuses. I post there as @JonChevreau, which is the same handle I have on Mastodon (since Nov 6, 2022) and Threads, which I joined a week after its early July launch this summer. Threads is now almost the polar opposite of X politically, a veritable Blue haven: just last week Joe & Jill Biden both signed on as @potus and @flotus respectively, as well as under their real names. So did vice president Kamala Harris (posting as @VP and @kamalaharris).
Amazon.ca
But back to the books. The first must read is Prequel, by the brilliant U.S. broadcaster Rachel Maddow [cover image shown on the left]. Tellingly, it’s subtitled An American Fight Against Fascism.
The second is Democracy Awakening, by Heather Cox Richardson [cover shown below]. Both are available as ebooks on the Libby app, through (hopefully) your local library. I couldn’t find either book on Scribd (now called Everand) but they do have ebook Summaries of both.
An American Hitler?
Given that the 2024 U.S. election is now about 12 months away, there is a certain urgency to these books. The Maddow book I’d read first since it’s a brilliant historical recap of the rise of German Fascism in the 1930s and — the shocking bit! — how close Germany came to installing fascists in America. It’s literally about Germany’s search for an American Hitler it hoped to install. It’s full of sinister characters you’ve probably not heard about before, like the assassinated Huey Long.
Maddow credits the reader with enough intelligence to extrapolate from that period into the current dangerous environment. One is left to infer how she feels about the parallels to the modern GOP and its fascist leader and would-be dictator: she never says their names although she is usually more explicit in her MSNBC and podcast commentaries.
Modern readers could easily substitute Putin’s Russia for Hitler’s Germany and draw their own conclusions about the parallels to collusion with foreign powers. There are also similarities between protracted attempts by the U.S. government to try the perpetrators in court and the protracted Delay tactics of the Defence — including many U.S. senators of the 1930s and early 1940s. And as is currently the case, these tactics largely seemed to work, since the Allies won World War II before most of the collaborators were brought to justice. Frustrating indeed, as many of today’s Americans bristled at the ultimate futility of the Mueller Report around 2019 and other protracted legal proceedings that may not be resolved before the 2024 election.
Maddow of course hints at this right at the end, quoting one frustrated prosecutor (O. John Rogge) from the 1940s:
“The study of how one totalitarian government attempted to penetrate our country may help us with another totalitarian country attempting to do the same thing …the American people should be told about the fascist threat to democracy.”
To help you on your journey towards financial independence, we’ve gathered 15 frugal living tips from financial advisors, founders, and other professionals.
From delaying big-ticket purchases, to asking for deals to save money, these experts share their best practices for frugality and financial independence.
Delay Big-Ticket Purchases
Master Budgeting and Tracking Spending
Align Budget with Personal Values
Plan Meals to Control Food Budget
Distinguish Between Needs and Wants
Prepare Lunch at Home for Savings
Leverage “Stoozing” for Mortgage Savings
Track Expenses for Financial Insight
Eliminate Unnecessary Subscriptions
Use Technology for Financial Management
Prioritize Spending with Budget Tracking
Cut Expenses from Seldom-Used Subscriptions
Invest in Experiences, Not Impulse Buys
Wait a Month Before Impulse Buying
Ask for Deals to Save Money
Delay Big-Ticket Purchases
When climbing the pay ladder, I purposefully delayed purchasing big-ticket items such as a newer or more expensive home, car, or luxury item. When I review my spending in detail, I’ve found it typically isn’t an $8 latte (or several of them) that puts me over the discretionary-spending edge, but rather something like a luxury handbag that I felt I deserved at the time, yet doesn’t bring me sustained happiness.
That is to say, in hindsight, it would feel better to see my investment portfolio increase than to have a closet of designer wares. It’s important to build a budget for yourself, but equally or more important, to reconcile your past spending and decide whether to make an adjustment to the budget or your spending to be more accurate moving forward. — Morgan Jarod, Financial Advisor, Royal Private Wealth
Master Budgeting and Tracking Spending
There are many clever ways to cut expenses or generate extra income, but there is no replacement for the discipline of budgeting. A budget is the daily application of your long-term goals. It serves as a compass for your financial journey, making sure you are consistently moving towards your destination.
There are two parts to every great budget: planning and tracking. First, you need to write out a plan for how you are going to spend every dollar of income you will earn in a given month. Then, you need to track your spending to ensure you are following your plan.
It would amaze most people at how much progress they can make toward their financial goals by simply using a budget to align their spending with their goals.
Luckily, becoming a master budgeter is easier today than it has ever been thanks to several budgeting apps that make the process simple and convenient.
When meeting with someone serious about their financial goals, the first recommendation is almost always a budget. — Ty Johnson, Financial Planner, Peak Financial Management
Align Budget with Personal Values
Review your budget so that it aligns with your values, not what society tells you to value. Many of us get trapped in consumerism and in looking the part. Society tells us that, in order to prove that you are wealthy, you must have an expensive car, home, and wardrobe.
What happens if you value none of those things? You spend more money than necessary, proving you have money. Look at your expenses. Do they truly align with what you care about? If they don’t, change it and be free. — Tremaine Wills, MBA, CFEI, Financial Planner | Investment Advisor, Mind Over Money
Plan Meals to Control Food Budget
Plan your meals for the week on the weekend before. Make your grocery list from your established menu. This habit keeps you from buying groceries you don’t need and helps avoid the late-afternoon query, “What should I make for dinner tonight?” that often ends up with something quick and less healthy, or convenient but more expensive.
Additionally, planning out your menu helps maintain variety. In our home, we have an outline we tend to follow: Sunday’s meal has pork; Monday tends to be a hearty soup or salad; Tuesday is “Breakfast for dinner” (egg bake, blueberry crepes, etc.); Wednesday is a chicken dish; Thursday’s dinner has fish or sausage as a base ingredient; Friday is Pizza night (make yourself or order out), and Saturday is a beef dish. — Keith Piscitello, Certified Financial Planner, S2 Wealth Planning
Distinguish between Needs and Wants
Frugality is about mindset and intentionality more than deprivation. One of the most impactful practices for me has been to shift my mindset around needs versus wants. It’s easy to fall into the trap of feeling like we “need” the latest technology, furniture, clothes, cars, etc. But most of these are simply wants. Focusing on true needs — food, shelter, basic clothing, transportation to work — frees up a lot of money.
I ask myself, “Do I really need this, or just want it? Will this purchase add value and enjoyment to my life, or am I buying it just to have it?” Distinguishing needs from wants has allowed me to dramatically cut discretionary spending. I buy very few material items now, and focus my time and money on experiences, relationships, and personal growth. — Brian Meiggs, Founder, My Millennial Guide
Prepare Lunch at Home for Savings
Wherever possible, prep your lunch at home if you’re eating at the office or somewhere other than your home. Over the course of a month, the savings really stack up! This could be as easy as batch-cooking at the weekends, ready for the week, or just making a homemade sandwich in the morning. — Jordan White, Financial Planner, A Money Thing Happened
Leverage “Stoozing” for Mortgage Savings
In financial strategies, one unique money-saving hack I’ve employed is using an offset mortgage combined with savings. This approach, popularly known in England as “Stoozing,” can significantly reduce monthly mortgage payments.
Stoozing involves utilizing the funds from 0%-interest credit-card offers. Instead of spending this money, one deposits it into a bank account linked to an offset mortgage. This approach effectively reduces the mortgage balance temporarily, leading to significant savings on mortgage interest.
As the 0% period on the credit card nears its end, the “stoozer” then pays off the credit card using the deposited funds, having benefited from reduced mortgage costs in the interim. At one point, I had over £100,000 on credit cards, but this was sitting in my bank account, significantly reducing the interest payments on my mortgage. It accelerated my financial independence by at least 10 years. — Shane McEvoy, MD, Flycast Media
Track Expenses for Financial Insight
As a wealth-management specialist, one frugal-living tip I recommend to new clients is to track and record all your expenses. While this may seem time-consuming, it’s a great way to gain insight into where you are spending your money and how much you’re actually saving each month.
Making sure you can see exactly where your money goes will help keep it in check and prevent impulse purchases that add up quickly. This is especially important when trying to reach financial independence because every dollar saved means more freedom for the future. — Adam Fayed, CEO, AdamFayed.com
Eliminate Unnecessary Subscriptions
Getting rid of subscriptions and simplifying my monthly budget has played a significant role in speeding up my journey towards financial independence.
Subscriptions might seem harmless, but the costs can really sneak up on you if you’re not careful. For years, I was paying over $100 a month for cable. I also was spending $50 on various streaming services, had an expensive gym membership, and would occasionally try services like meal delivery kits. And I hadn’t negotiated my Internet or phone bills in years.
One day, I realized I was spending well over $350 per month on these services, some of which I wasn’t using. I cut cable out completely, got a cheaper phone plan, and moved to a more affordable gym near me. I also scrapped the meal delivery kits and just cook myself now. This saves me $200+ a month easily, and it hasn’t impacted my quality of life.
I suggest other people take a look at their monthly spending to find sneaky recurring charges they can trim quickly. — Tom Blake, Founder, This Online WorldContinue Reading…
My latest MoneySense Retired Money column looks at a topic I cheerfully admit I’d never heard of until the editors drew it to my attention: Infinite Banking (IB). Not to toot my own horn, but that’s unusual, as I have been writing about personal finance for the better part of three decades.
According to a useful primer in Policy Advisor, Infinite banking is “a concept that suggests you can use your whole life insurance policy to ‘be your own bank.’ “ It was created in the 1980s by American economist R. Nelson Nash, who introduced the idea in his book, ‘Becoming Your Own Banker.’ He founded IBC (Infinite Banking Concept) in the U.S. and eventually it migrated to Canada.
One of the sources cited in the column evinced some skepticism when he said of Infinite Banking (IB for short): “those who have sipped rather than chugged the IB Kool-Aid say it’s a strategy that may be too complex to be marketed on a mass scale.”
If you’re not familiar with life insurance, Infinite Banking does seem a bit arcane. Rather than put your money in a traditional bank – which until the last year or so paid next to nothing in interest on accounts – you would invest in a Whole Life or Universal Life insurance product, either of which provides some “cash value” from the investment portion of those policies. Then if you want to borrow money, instead of paying hefty interest payments to a bank, you borrow against your life insurance policy.
Watch this YouTube video primer
Those new to Infinite Banking should definitely look at a YouTube primer made by Philip Setter, CEO of Calgary-based Affinity Life (Affinitylife.ca). There he readily concedes that much of the marketing hype is to portray Infinite Banking as some kind of “massive secret for the wealthy,” which essentially amounts to buying a whole life insurance policy and borrowing against it. In the video he calls out some of the conspiracy-mongering that seems to be attached to infinite banking, including the primary message from some promoters that traditional banks and governments are out to rip off the average consumer. Continue Reading…
By Andrew Lo, President & CEO of Embark Student Corp.
(Sponsored Post)
The pursuit of higher education is a cornerstone of personal and professional growth for many young Canadians. However, this pursuit often comes at a hefty price, with student loans being a significant barrier to financial independence. The burden of student debt can haunt graduates for years, affecting their ability to save, invest, and achieve financial stability. But there’s good news: opening a Registered Educations Savings Plan (RESP) can lighten the burden of student loans and help you help your children start their adult life debt-free by encouraging regular and early savings, offering valuable government grants, and harnessing the power of compound interest.
The Student Loan Conundrum
Canada is home to a world-class education system, but the cost of pursuing post-secondary education can be daunting. Tuition fees, books, accommodation, and other expenses can quickly add up, leaving many students with no choice but to turn to the most common method of affording post-secondary: student loans.
What some students don’t fully understand when they use student loans is that they come with interest rates that accrue after graduation. For many young Canadians, this means they start their careers with substantial debt, and few resources to help them repay their loans.
In a recent poll of Canadian students, 79% admitted that the amount of debt taken on to afford post-secondary can be debilitating. This burden of student debt can have a profound impact on a young graduate’s financial journey, with 57% of students surveyed agreeing that graduating with student debt will make it harder for them to become financially independent from their parents.
Unfortunately, the constant struggle to make loan payments often hampers their ability to save and invest in their futures. Despite this, student loans are still the most normalized way of paying for education in Canada.
There’s a better way pay for post-secondary education
One effective way to combat the student loan conundrum is to start saving for education expenses early. It can be hard to think about university and college when a child is a few years old but by beginning to save as soon as possible, families can significantly reduce their need for student loans. You’re probably thinking, “accumulating savings to cover educational costs while managing the rising cost-of-living is no easy feat.” This is where a Registered Education Savings Plan [RESP] comes into play.
RESPs are powerful tools that Canadians can take advantage of to fit the post-secondary bill. They can be opened by the parents or guardians of a child, other family members, or friends, to save over a total period of 35 years. By contributing regularly to an RESP, families can build substantial savings to cover tuition and related expenses. Starting early allows for smaller, manageable contributions over time, reducing the financial stress associated with higher education. The most valuable part of this savings tool is that it opens your savings up to a world of government grants that you can qualify for.
Unlocking “Free Money” with Grants
One of the most compelling features of RESPs is the opportunity to acquire “free money” in the form of grants. The Canadian government provides a generous grant called the Canada Education Savings Grant (CESG) as a reward for saving, allowing you to collect up to $7200.
This grant matches 20% of your contributions on the first $2,500 saved annually. Over the years, if you contribute $2500 annually to an RESP, this works out to an additional 20% being added to your first $36,000 saved without even considering investment gains. By maximizing these grant opportunities, families can alleviate the financial strain of higher education and better prepare for the future. Continue Reading…
It’s that time of year. The leaves have started to shift to brilliant shades of crimson, orange, and yellow. The days are getting shorter. And, suddenly, it’s “jacket weather” again. For many Canadian families, the transition into cooler months signals a time to begin the process of reviewing their finances from the past year with the goal of being better prepared in the years ahead.
With the cost of living in Canada incrementally higher than it has been in recent memory, there is a renewed opportunity for families to ask a familiar question: what is a simple, one-step investment strategy that they can use to help stretch the most out of their money, both now and for the long haul?
Well, like the changing seasons, it may be a good time for families to consider changing up a dated investment approach in favour of one that will take their money a little further. That is, using a low-fee, low-touch, robo-advisor in place of costly mutual fund investments … and, here are a few reasons why:
Accessibility
Robo-advisors have ushered in a new era of accessible investing. Designed to be user-friendly from the get-go, they are an excellent choice for both novice and experienced investors. With just a few clicks, investors can select a portfolio that matches their risk tolerance and fund it with little to no hassle.
Diversification
A well-constructed portfolio needs variety. Robo-advisors excel at this by spreading investments across different asset classes, thus reducing risk. Mutual funds, while also diversified, often lack the customizability and personalization offered by low-fee robo-advisors.
Automated Rebalancing
Investing with a robo-advisor provides nimble, automated rebalancing, ensuring that investments stay aligned to goals, even as market conditions shift. Mutual fund investors often need to manually (and worse, reactively) adjust their portfolios, potentially missing out on market opportunities or exposing them to unnecessary risk. Continue Reading…
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