Monthly Archives: July 2015

Credit cards as “survival” tool? This is nuts!

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Attractive girls with bags and credit cards on a white background

By Jonathan Chevreau,

Financial Independence Hub

A disturbing survey was released today from Minneapolis-based Allianz Life Insurance Company of North America. Its press release about the Generations Apart survey led off with the statement that “Living with debt has become a way of life for both Generation X (Gen X) and baby boomers as the stigma of owing money is gradually disappearing.”

Here’s the bit that really got me: it found that 48% of both generations “agree that credit cards now function as a survival tool” and 43% agree that “lots of smart, hardworking people who are careful with spending also have a lot of credit-card debt.”

Allianz Life did note that this alarming “growing comfort with debt” may affect the retirement plans of Gen X: “Twice as many Gen Xers (27% versus 11% of boomers) say they are either unsure about when they plan to retire or don’t plan to retire at all.”

The 2,000 Americans surveyed include 1,000 boomers aged 49 to 67, and 1,000 Gen Xers aged 35 to 48. It found Gen Xers are carrying 38% more in mortgage debt (average of US$144,000 versus $90,000 for boomers) and 45% more in non-mortgage debt, comprised of student loan debt (average of US $12,000 versus $5,000 for boomers) and credit-card debt (average of US $8,000 versus $6,000 for boomers).

It suggested one reason Gen Xers have higher debt is there generally earlier use of credit cards – 76% of Gen Xers got their first credit card between the ages of 18 and 24 versus 68% of baby boomers.

Almost half of GenXers revolve their credit card balances

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The 5 Best Currency Exchange Options For Travellers

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Barry bio 2014
Barry Choi

By Barry Choi

Special to the Financial Independence Hub

You’ve booked your flights, your itinerary is set and now all you need is some local money. Getting foreign currency is easy but choosing the right method could save you a ton of cash.

Here are the best currency exchange options for travellers:

1. Using ATMs

Using ATMs is the best currency exchange option to get cash at the lowest rate. ATMs are everywhere and the best part is they only charge the spot rate of the day plus 2.5%.

Your home bank might charge you an additional $2-5 for using a foreign ATM but this fee can sometimes be waived, depending on your account status. Don’t forget to call your bank and let them know you’ll be travelling;  otherwise they may block your card on suspicion of fraud. If the fee won’t be waived, just max out your daily withdrawal limit each time to avoid making excessive trips to the ATM.

To find out which foreign ATMs are affiliated with your bank, check the back of your debit card and look for the PLUS (VISA) or Cirrus (MasterCard) symbols. When you’re overseas, search for ATMs with the matching networks and you should be fine. Both VISA and MasterCard have ATM locators so you can find the right ATM before you even take off.

Not only is using ATMs the cheapest way to get money, it’s also the safest way since you’ll never be carrying large amounts of cash. Note that internationally, 4-digit pins are the standard for ATM cards so change yours before you depart if it differs.

2. Credit cards

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Ageing rates vary widely — and so may age of traditional retirement

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beauty concept skin aging. anti-aging procedures, rejuvenation, lifting, tightening of facial skin, restoration of youthful skin anti-wrinkleThe BBC is reporting today on a study that shows Ageing rates vary widely. According to the report by the Proceedings of the National Academy of Sciences, even people born within a year of each other experienced a huge gulf in the speed at which their bodies age.

I was particularly struck by the finding that some 38-year olds were ageing so badly that their biological age was “on the cusp of retirement.” The study subjects were 954 people from New Zealand born between 1972 and 1973. 18 ageing-related traits were examined as the members of the group turned 26, 32 and 38. So in the case of the 38-year-old cohort, the “biological age” ranged from the late 20s to “nearly 60” — hence the “cusp of retirement” verbiage.

In some cases, the subjects appeared to virtually stop ageing while they found that others gained almost three years of biological age for every 12 months that passed. Those with older biological ages were found to perform worse in tests of brain function, and also tended to have a weaker grip.

Issues of fairness and egalitarianism

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Some Early Stage Encore Career Observations and Recommendations

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A metal toggle switch with plate reading Change and Same, flipped into the Same position, illustrating the decision to work toward changing or improving your situation in lifeBy Michael Drak

Special to the Financial Independence Hub

I started my own encore career back in February 2015;  here are some of the things you might want to consider when planning your own encore career:

Should you tell your boss you plan to leave and start an Encore Career?

Bosses can start to act a little funny after you tell them you plan to leave the company at some point in the future. For some reason they believe that you are no longer fully committed to your job and that your performance will start to slide as you focus on getting ready for your new career.

This can cause some friction, so it’s best to make sure you have the bulk of your encore job preparation completed prior to dropping the bomb, just in case. In my own situation within three months of having declared I was planning to leave I was pleasantly surprised to receive a buy-out from the company. Was it a coincidence? Who knows, but I’d rather receive a payout versus a gold watch any day, plus it provided me with some liquidity until my new business starts generating a profit.

Do as much advanced preparation as you can prior to leaving your job

My original plan was to tell everyone that I was leaving in two years and during that time learn to run a blog and start working on my retirement book. Getting bought out accelerated things. In hindsight, it might have been better to have started the book and other projects prior to making the announcement.

 Have a safety net in place so you can sleep at night Continue Reading…

Weekly Wrap: Happy Financial Independence Day! Eternal Truth # 7 completes series

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Independence day conceptBy Jonathan Chevreau

Financial Independence Hub

To all our American readers, the Findependence Hub wishes a happy  Independence Day, or  as we like to say around here, Findependence Day.

Bloggers are fond of building posts around the July 4th celebration, and this year several are using the phrase Financial Independence Day. For instance, Forbes.com just published a blog titled Financial Independence Day for Millennials.

In fact, a year ago, Richard Eisenberg of Next Avenue and Forbes.com did just that, writing a similar piece entitled How to Declare Your Financial Independence. And he did make an explicit reference to Findependence Day, more on which below.

This weekend’s Motley Fool Money podcast is titled Declare Your Financial Independence.

And a few days ago, the Energy & Capital Site alos used the same phrase in an online commentary: Financial Independence Day. However, the piece merely outlines 55 trading rules and doesn’t get into the topic the way the Hub does.

The trend is clear and it seems from our vantage point that the next logical step is to use our contraction and call it Findependence Day!  It’s not exactly a new term any more: the original book bearing that name was published in 2008 (more about which  below).

So for those for whom the term may still be unfamiliar,what exactly is Findependence?

It’s simply a contraction for Financial Independence.

And Findependence Day? That’s the day you achieve Financial Independence. Continue Reading…