By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

When it comes to buying a home or renewing a mortgage term, many financial experts recommend using a mortgage broker to help find the best mortgage rate and terms. The reason is that mortgage brokers work for you – not the bank (even though they’re paid by the lender and not the client) – and can leverage their large network of lenders to access the most favourable mortgages based on their clients’ needs.

But some mortgage brokers are taking that notion too far; forging documents, creating fake pay-stubs, employment letters, bank statements, and tax documents to help clients qualify for mortgages.

A shocking expose

In this shocking expose, Globe and Mail real estate reporter Tamsin McMahon revealed how mortgage fraud is thriving in Canada’s hot housing market.

The article goes on to suggest that mortgage fraud is so rampant in this country that as many as one-in-10 mortgage applications will have some element of fraud. This happens when would-be homebuyers can’t quite qualify for a conventional loan, a problem that has been exacerbated in recent years by soaring home prices.

An anonymous mortgage broker from Ontario said:

 “It’s happening on such a level that some bank reps, mobile mortgage reps, have said: Call a mortgage broker, they can probably find a way to make your income higher.”

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By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

New research from investment management firm BlackRock suggests Millennials are fearful of the stock market and sitting on too much cash in their accounts. It got me thinking – do Millennials really fear the stock market? Or are there other factors at work?

Millennials came of age during the global financial crisis and Bernie Madoff Ponzi scheme era. They watched their parents lose half their retirement savings in just a few short months between 2008 and 2009.

Related:  A Conversation about Gen Y Money

But sitting on cash may not signal a fear of the stock market. On the contrary; it might be a prudent move, depending on their financial goals.

I started investing when I was 19 years old. The TFSA didn’t exist back then,  so I decided to put small amounts into my RRSP every paycheque, thinking I was wisely getting ahead.

Debt paydown can be a bigger priority than retirement

It turned out that wasn’t such a smart move, after all. Why? Because I was saving for a goal that was at least four decades away. Continue Reading…

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

The SPIVA Canada Scorecard looks at the performance of actively managed Canadian mutual funds versus that of their benchmarks. The results show that the majority of active managers underperform their benchmarks over the long term. And it’s not even close. Here are the biggest losers:

Canadian Dividend & Income Equity Funds – Only 6.67% of the active Canadian Dividend & Income Equity Funds outperformed the S&P/TSX Canadian Dividend Aristocrats over the past 12 months. None of the active funds were able to outperform the S&P/TSX Canadian Dividend Aristocrats over the five-year horizon.

U.S. Equity Funds – Just 2.9% of funds in this category outperformed the S&P 500 (CAD) over the past five years, while only 3.13% beat the index in the three-year period.

Global Equity Funds – Over one- and three-year periods, 5.95% and 4.21% of the funds outperformed the benchmark, the S&P Developed LargeMidCap, respectively. When viewed over the longer five-year period, only 2.83% of active global equity funds able to beat the benchmark.

Conclusion

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by Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

I get plenty of questions about my two-ETF retirement portfolio. Some advisors think it’s too simple – stating that a properly diversified portfolio should contain at least six asset classes. Further to that, some clients and blog readers ask me whether it’s wise to add a dash of gold, REITs, or even farmland to their portfolios – usually after reading doom-and-gloom advice from the likes of Peter Schiff or Jeff Rubin.

My two-ETF solution, which is made up of Vanguard’s VCN and VXC, is about as diversified as it gets when it comes to global equities. VCN holds 231 large-, mid- and small-cap Canadian stocks, while VXC holds 5,150 stocks from across the globe in developed and emerging markets outside of Canada.

Related: Why investors should embrace simple solutions

I’ll concede that an all-equity portfolio is not appropriate for most investors. My portfolio is missing a bond ETF, which is included in the popular three-ETF model portfolio listed on the Canadian Couch Potato blog.

I chose two equity ETFs for a few reasons: Continue Reading…