Reviews

We review books that deal with everything from financial independence topics to politics, and anything in between. We may sometimes stray into films and music if there is a “Findependence” angle.

Retired Money: Plan for Retirement Income for Life with Fred Vettese’s PERC

My latest MoneySense Retired Money column focuses on a free retirement calculator called PERC, plus the accompanying new third edition of Fred Vettese’s book, Retirement Income for Life: Getting More Without Saving More.

You can find the full column by clicking on the highlighted headline: Retirement Income for Life: Why Canadian retirees love Frederick Vettese’s books and his PERC. Alternatively, go to MoneySense.ca and click on the latest Retired Money column.

As the column notes, I have previously reviewed the earlier editions of the book but any retiree or near retiree will find it invaluable and well worth the C$26.95 price. Also, there is a free eBook offer.

PERC of course is an acronym and stands for Personal Enhanced Retirement Calculator.

PERC is itself a chapter title (chapter 15 of the third edition) and constitutes the fourth of five “enhancements” Vettese describes for getting more without saving more. Vettese developed PERC while writing the first edition in 2018: it is available at no charge at perc-pro.ca.

In another generous offer, anyone who buys the print edition can get a free ebook version by emailing details of proof of purchase to ebook@ecwpress.com.

I reviewed the previous (second) edition of Fred’s book for the Retired Money column back in October 2020, which you can read by clicking on the highlighted headline: Near retirement without a Defined Benefit pension? Here’s what you need to know. Continue Reading…

Read these 4 books if you care about Democracy

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 four excellent books that summarize where we are, where we have come from and where we likely may be going. (Note, this blog is an update of what I wrote in late November, but with two books added.)

In contrast to two of the books mentioned below, Heather Cox Richardson’s Democracy Awakening is disturbingly current and explicitly names names. There is an extensive recap of The Former Guy’s attempt to highjack the 2020 election and the subsequent event of January 6th and everything that has occurred since.

Yes, I’m sick of reading about him too, which is why I don’t even name him here (even on social media accounts I prefer to use 45). But after his deranged Thanksgiving rant and an equally insane Christmas greeting on the soon-to-be defunct Truth Social (aka Pravda Social), his behaviour has become nothing short of alarming.

There is of course no shortage of mainstream analysis of this. I refer Globe & Mail readers to Andrew Coyne’s excellent column last weekend (link in highlighted headline, possibly curtailed for non-subscribers; also note the hundreds of reader comments:) First, Trump tried to overthrow Democracy. Now he is attempting to overthrow the Rule of Law. I also suggest reading the following excellent analysis of the disastrous (for Democracy) events of Feb. 8th, a week ago from Thursday: ‘But his Memory’ and the Slow Wreck of American Democracy.

Reclaiming America

Richardson is a history professor at Boston College. For Canadians in particular the book is a valuable primer on the founding of America, the Declaration of Independence, the civil war, the Constitution and its many amendments, the creation of the Democratic and Republican parties, and the politics of the last few centuries. I assume most well-read American readers are taught this in grade school (although maybe not, judging by the millions of deluded MAGA zealots.)

The book itself is divided into three main parts: Undermining Democracy, The Authoritarian Experiment, and Reclaiming America.

Richardson make frequent references to Adolf Hitler and the Nazis. As she writes in the foreword:

“Hitler’s rise to absolute power began with his consolidation of political influence to win 36.8 percent of the vote in 1932, which he parlayed into a deal to become German chancellor. The absolute dictatorship came afterward. Democracies die more often through the ballot box than at gunpoint.”

She goes on to write that a small group of people “have made war on American democracy,” leading the country “toward authoritarianism by creating a disaffected population and promising to re-create an imagined past where those people could feel important again.”  In other words, MAGA.

I’ll skip to the ending but again urge readers to get a copy and read everything between these snippets:

“Once again, we are at a time of testing. How it comes out rests, as it always has, in our own hands.”

Amazon.ca

Hitler: Ascent 1889-1939

Even since I wrote the original version of this blog in November, the press has been full of alarming reports of 45’s Hitler-like rhetoric early in 2024: famously his references to vermin and to immigrants poisoning the blood of the American people, both from the original Hitler playbook. And who can forget his “dictator only on the first day,” an alarming recent example of many a truth said in jest?

A two-book series by Volker Ullrich looks first at Hitler’s political rise and then to his decline and defeat in the second World War that he created.The second book is titled Hitler: Downfall: 1939-1945.

While most of us may think we know this history going back to high-school history classes, not to mention numerous histories, novels and films about World War II, Hitler: Ascent is nevertheless a bracing refresher course.

Ullrich charts Hitler’s improbable rise from failed artist to political rabble rouser, to his failed beerhall putsch in the 1920s, his writing of Mein Kampf after a too-short prison sentence and ultimately his stunning January 1933 manoeuvre to become the Chancellor of Germany, which he soon consolidated as combined chancellor/president and ultimately the dictator he is now known to be.

The book also makes clear his goals for creating a Greater Germany at the expense of most of his European neighbours (famously Poland and France), and his plans for impossibly grandiose architectural structures to be implemented by Albert Speer, with Berlin (to be renamed Germania) the centre of what he hoped would be a global dictatorship.

The second Ullrich book — Hitler: Downfall, 1939-1945 —  is also well worth reading. The final sentences are particularly relevant to today’s environment:

If Hitler’s “life and career teaches us anything, it is how quickly democracy can be prised from its hinges when political institutions fail and civilizing forces in society are too weak to combat the lure of authoritarianism; how thin the mantle separating civilization and barbarism actually is; and what human beings are capable of when the rule of law and ethical norms are suspended and some people are granted unlimited power over the lives of others.”

Of course, for most of us, reading yet another book (or two) about Adolf Hitler doesn’t usually create undue anxiety, since it all seems to be comfortably in the faraway past. Ancient history, as they say. Continue Reading…

Stocks for the Long Run: Review of 6th edition

Amazon.ca

By Michael J. Wiener

Special to Financial Independence Hub

Jeremy Siegel recently wrote, with Jeremy Schwartz, the sixth edition of his popular book, Stocks for the long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies

I read the fifth edition nearly a decade ago, and because the book is good enough to reread, this sixth edition gave me the perfect opportunity to read it again.

I won’t repeat comments from my first review.  I’ll stick to material that either I chose not to comment on earlier, or is new in this edition.

Bonds and Inflation

“Yale economist Irving Fisher” has had a “long-held belief that bonds were overrated as safe investments in a world with uncertain inflation.”  Investors learned this lesson the hard way recently as interest rates spiked at a time when long-term bonds paid ultra-low returns.  This created double-digit losses in bond investments, despite the perception that bonds are safe.  Siegel adds “because of the uncertainty of inflation, bonds can be quite risky for long-term investors.”

The lesson here is that inflation-protected bonds offer lower risk, and long-term bonds are riskier than short-term bonds.

Mean Reversion

While stock returns look like a random walk in the short term, Figure 3.2 in the book shows that the long-term volatility of stocks and bonds refutes the random-walk hypothesis.  Over two or three decades, stocks are less risky than the random walk hypothesis would predict, and bonds are riskier.

Professors Robert Stombaugh and Luboš Pástor disagree with this conclusion, claiming that factors such as parameter and model uncertainty make stocks look riskier a priori than they look ex post.  Siegel disagrees with “their analysis because they assume there is a certain, after inflation (i.e., real) risk-free financial instrument that investors can buy to guarantee purchasing power for any date in the future.”  Siegel says that existing securities based on the Consumer Price Index (CPI) have flaws.  CPI is an imperfect measure of inflation, and there is the possibility that future governments will manipulate CPI. Continue Reading…

Read these 2 books if you care about Democracy

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.”

Continue Reading…

How to find your likely estate value and lifetime tax bill (for free!)


By Ted Rechtshaffen, CFP

Special to Financial Independence Hub

In my role as a Portfolio Manager, Financial Planner and President at TriDelta Private Wealth, the number one question that people ask is “Will I run out of money?”

This question comes from people with a $10 million net worth, a $3 million net worth, and a $300,000 net worth.  There may be different levels of angst involved but they still wonder.

The fundamental issue is fear.  Even if it isn’t rational, there is always a bit of fear about running out of money.  Even if running out may mean different things to different people.

Of course, for those with more wealth, the related question is almost always “Am I paying too much in tax?” and “Is there tax smart things that I should be doing that I am not?”

While we do a lot of work in each area with Canadians, we decided to build a free tool to help answer that number one question.  We have done this through our TriDelta My Estate Value calculator.  By someone entering in several core pieces of financial information, the calculator does some pretty heavy lifting.  Behind the scenes are actuarial tables to show life expectancy, tax tables, and a variety of stated assumptions around inflation, real estate and investment growth expectations.

The output is an estimate of your likely estate value in future dollars, along with a lifetime estimate of your income taxes paid.

You will find the calculator here:

My Estate Value Calculator – TriDelta Private Wealth

Donation Calculator

One other tool we have put together is a donation calculator.  It takes the information from the My Estate Value calculator and provides some ability to see the impact of annual charitable giving.  What if you gave $5,000 a year?  What would be the impact to your likely estate value and to your lifetime tax bill?  What if you gave $10,000 or $20,000 a year?  One of the reasons that we put this together is that many Canadians would give more to charity of they felt confident that they could afford to do so.  This calculator helps to show in real time the impact of higher levels of giving.  The link is here: Donation Planner – TriDelta Private Wealth

We have found that even among the free tools online, most are focused on retirement savings, and deliver a monthly savings target.  The My Estate Planner calculator is focused on the years after retirement, and what potential estate you will be leaving to your family and/or charity. Continue Reading…