Building Wealth

For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).

A Q&A with the founders of the new Prosperium Cryptocurrency

Prosperium Inc. CEO Doug Coyle (L); President and COO Tony Humble (R)

The following is a sponsored Q&A with the founders of the firm behind Canada’s new Prosperium cyryptocurrency.

Tony Humble is President and Chief Organizational Officer of Toronto-based Prosperium Inc. and Doug Coyle is Chief Executive Officer (both pictured on the left).

You can find the introductory blog in this series by clicking on Blockchain Revolution, Global Prosperity and Prosperium.  

Also, a new white paper has just been published. The overall Prosperous business model is described on its home page. And for a layperson’s perspective, see Tony’s blog

The Q&A will continue tomorrow. 


Jon Chevreau: In the first blog, we mentioned Ethereum and Prospereum as two examples of cryptocurrencies spawned in Canada. Clearly, the name Ethereum inspired your name and it was a clever stroke to get the word Prosper in there too. Can you confirm this genesis of the name?

Tony Humble

Tony Humble: Well, the name Prosperium was a natural, but we tried a few others first, like Prosperus, as in “prosper us all” and “prosperous” and ProsperX.  But the elemental affinity with Ethereum was irresistible:  like atomic bonds.  Ethereum is named for both a celestial region and an “element” in the periodic table.  On earth, it is both a currency and a platform for smart blockchain contracts: revolutionary and brilliant.

Jon: Can you elaborate on what the name means in practice, relative to Ethereum? Is it the same business model?

Tony: Like Bitcoin, the total number of coins issued by Etherium will be fixed, aiming for continuous growth in value.  In comparison, Prosperium is also named as an element, is a crypto-currency, and is a platform:  for growth in real prosperity.  In contrast, however, once Prosperium has reached a target value it will be fixed in price and supported at that value, but the number of coins issued will continue to grow.  It will be minted for measurable value, created by regional accelerators to generate jobs and production, and its use for transactional purposes will be tracked on the Prosperium blockchain.  It will be 100% open and auditable by governments, and will maintain a large reserve to support the price in the marketplace.

Jon: A prospectus for Canada’s first Bitcoin ETF was recently filed. I’m not sure if that shows your timing is impeccable or whether you’re late to the party?

Doug Coyle: I do see that there are more and more ETF funds being launched in Canada and around the world for Bitcoin.

Jon: Starting with the Winklevoss twins of Facebook fame?

Doug: Yes, they tried to get a Bitcoin ETF going and ran into some barriers but they prepared the ground a great deal. I feel it’s adding infrastructure so I’m in favor of multiple ETFs for Bitcoin or any other crypto currency being established.

Jon: Is Prosperium going that route?

Doug: Not directly. In some ways we do provide the ability for clients who hold Prosperium tokens to trade those tokens and eventually the currency itself will be freely trading; so we have a very sophisticated way of doing a — call it an ETF — but we hold a reserve account that is core to how we stabilize the Prosperium coin. Buyers can find a ready market there at all times; they don’t have to count on any broker to find a match on buying and selling; it’s all done automatically in the software.

Why Prosperium isn’t going the ICO route

Jon: You chose not to go the ICO (Initial Coin Offering) route although it sounds like you were thinking about it. Why not, or are you doing the same thing under a different name? Continue Reading…

Borrowing to invest? Beware of rising interest rates.

Del Chatterson

By Del Chatterson

Special to the Financial Independence Hub

Your financial advisor is probably not recommending it and you may be naturally averse to more borrowing, but it is hard to ignore the basic principles of financial leverage from Finance 101. (The principles have not changed, since I first taught the course in 1972!)

As explained in a chapter on Capital Budgeting, companies and investors should continue to invest in projects until the marginal cost of capital equals the marginal rate of return: assuming you select projects in order from the highest return to the lowest return and that the cost of borrowing increases with the total amount of loans outstanding.

So in the example chart shown to the right, you would borrow and invest up to $1.0 million, which is the point where the expected rate of return declines to meet increasing cost of borrowing at about 5%.

You may have confirmed the theory from your own experience. Your current portfolio has a few investments that are achieving better than 10% or 12% returns, most congregate around the long-term average of 7% to 8% and a few continuing disappointments are returning below 5%, or worse.  Your lowest cost of borrowing is probably the mortgage you signed in 2015 at 2.5% or a car loan at 1.9%, but your subsequent borrowing for a personal line of credit is at 3.25%.

Continue Reading…

Liberal tax changes would spark exodus of Canadian entrepreneurs

By David J Rotfleisch, CA, CPA, JD

Special to the Financial Independence Hub

The proposed changes to the Income Tax Act that the Minister of Finance, the Honourable Bill Morneau, has released have real-world implications. The consultation period ends October 2, 2017, so now is the time to make your voice heard. Call or email your member of Parliament, or Minister Morneau directly.

I recently had a meeting with a high-tech entrepreneur in an internet-based business. He is very conservative and has not carried out any tax planning. His wife helps him but he does not do any income splitting with her. He has about $1 million in his corporate bank account for possible business use, but has not invested it and just earns minimal bank interest. The hype about the proposals has caused him to take notice of his tax affairs and meet with me.

I told him that under the new proposals income splitting with his wife, other than a fair salary for services performed, will be prohibited. His wife will probably not be able to participate in the lifetime capital gains exemption. If he decides to invest his retained earnings, there may be an additional tax on his income. He is now thinking about lifestyle and whether he wants to leave the country. I fully expect to prepare a memo for him about becoming non-resident.

Minister Morneau’s proposed tax changes will have the effect of causing an exodus of Canadian entrepreneurs for more business-friendly jurisdictions.

I had lunch with accountants a few days ago and they reported the same types of conversations with high-tech clients. They are considering leaving the country. Now, some won’t because of the education of their children, to be close to aging parents, adult children,or because they like their Canadian lifestyle. Others will decide it’s more important to maximize after-tax income and that it makes sense to move offshore.

70% of Canadians work for firms with 100 or fewer employees

Remember,  statistics show that the vast majority of Canadians — 70 per cent — who are the economic engine of this country, work for companies with between 1 and 100 employees: the very targets of these new measures, and who are able in many cases to pack up and leave.

This is not just the view of tax professionals. Ryan Holmes, the CEO of social media internet company Hootsuite, was reported as saying on Sept 14, 2017 that the proposals are causing a lot of concern to business owners and that “I think you need to be very favourable at the small end of the market.”

I was recently contacted by a Liberal MP who is very opposed to what his government is doing. He has an entrepreneurial background and he realizes the impact of these proposals.

Continue Reading…

Millennial Retirement: How to maximize long-term savings

By Gabby Revel

Special to the Financial Independence Hub

Being a millennial is both a gift and a curse: we are the most educated generation yet, but saving for the future is harder than it’s ever been. While there are more workers than ever with a college degree, many industries require a graduate degree to get a job that will help you earn enough money to save for retirement.

The St. Louis Federal Reserve revealed in June 2017 that the personal saving rate is at a dismal 3.8%. This figure peaked on May 1975 at 17%, before settling down to a comfortable 10.5% on August 2017, meaning Baby Boomers had more to look forward to once they called it a day in the workforce.

The 2008 economic recession — the worst one since the Great Depression — has caused millennials to approach investing opportunities with caution, avoiding placing their cash in non-liquid assets. Many young professionals don’t feel comfortable entering the stock market — despite being bullish as of late — or investing in unregulated and volatile cryptocurrencies such as Bitcoin. But there are still sound ways to get the most out of our wages without taking unnecessary risks.

How much do I need to save?

 It may not be what you want to hear, but most millennials will have to work for longer than previous generations in order to amass a retirement cushion they you can enjoy through their golden years.

On February 2017, a study conducted by determined that only four in ten adults have a will; only 36% of the 37-52 year-olds that make up Generation X have a will, while 58% of Baby Boomers (ages 53-71) have one. This means most of you will have to rely on the fruits of your labor instead of someone else’s.

A recent JP Morgan study determined what chunk of your wages you will need to save, based on your income bracket. Those earning a median income will have to save 4% to 9% of their pre-tax earnings if they start saving at age 25 and plan to retire at 67. If you’re part of the affluent category, you will need to save between 9% and 14% pre-tax, while those in the high net worth segment will need to keep 14% to 18% of their monthly dough.

Safe and effective ways to plan for retirement

Continue Reading…

Toronto Rentals vs. Hong Kong: A matter of perspective

There’s been plenty of discussion recently surrounding Toronto’s hot housing market. First-time buyers are being priced out and young prospective home buyers are being pushed further and further away from the city’s desirable centre. With all this talk, it’s easy to get caught up and lose perspective, but lucky for you, I’m here to remind you to count those blessings (however meagre they may be).

Sure, the housing situation in cities like Vancouver and Toronto may be less than ideal, and yes, something should be done to improve the way things are going. However, there are far more dire housing situations in other top-tier cities, which, when compared to Toronto, really make everything here seem — dare I say –breezy?

Related Read: INFOGRAPHIC – July GTA Sales Plunge 40%

Taking A Global Rental Perspective

Take, for instance, Hong Kong. As those who’ve read my posts on Findependence Hub may know, I lived in Hong Kong teaching English. It is one of the most bustling, vibrant cities I’ve ever experienced, but I can only defend it so much once the subject of housing prices comes up. Year after year, Hong Kong tops all the lists of ‘most expensive housing,’ and having rented there for a year, I have to concede defeat on that point. For what you get in Hong Kong, there is much to be desired.


Chevreau’s Hong Kong apartment was tight on square footage.

Chevreau’s Hong Kong apartment was tight on square footage

If you’re like most millennials and looking to break into the housing market for the first time –- perhaps in a Toronto condo –- you’ve most likely experienced the disillusionment that inevitably comes when you realize the prices you’re looking at paying, even after this summer’s price correction. In the city of Toronto, the average price per square foot, or PPSF, is around $649 with an average home cost of around $550,000. This number spikes to $800 PSF if you’re looking to put down roots in ‘downtown Toronto’ (anywhere south of Bloor, west of Yonge, east of Bathurst).

Related Read: 5 Ways to Get Ahead in the Toronto Rental Market

Continue Reading…