All posts by Financial Independence Hub

New data shows location has a big impact on car insurance

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By Andrew Webb

Special to the Financial Independence Hub

We all know that location plays some kind of role in car insurance, and it’s a controversial topic in Ontario. There have been discussions about banning territorial ratings for a while now.

However, it’s been difficult to get a bead on exactly how much location affects those rates. Thanks to a study of 2,800 car insurance policies we now have some facts and figures to work with.

This study reports the average annual cost of auto policies for major towns and cities, so it’s not a substitute for a proper, personalized quote. With that said, the numbers are telling. Location does have a strong correlation to the average rate that Ontarians pay, and that number can vary by more than $2,000 between the most and least expensive cities.

Quantifying average car insurance rates by city

Wasaga Beach comes in with the lowest rate in the study at $1,958, while North York features the highest average rate at $4,261 per year.

That’s a difference of more than $2,000 per year depending on where you live in Ontario. You could pay for a week-long trip to Europe with that money, airfare included.

Here are the numbers, ranked from most to least expensive city:

 

It’s also worth noting that all of these average prices are higher than the official average price of auto insurance in Ontario as reported by the Insurance Bureau of Canada.

Why do cities have different rates?

Insurance underwriting takes many factors into account, but we forget many of them. For instance, we can see that many of the most expensive cities are in the Greater Toronto Area. Continue Reading…

Do you have enough tech in your portfolio?

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By Dale Roberts, Cutthecrapinvesting

Special to the Financial Independence Hub

And perhaps that headline could read: do you have enough growth in your portfolio? Of course tech is where they keep much of the growth these days. And certainly those tech companies have been driving the returns of the S&P 500 and other US stock index funds. For investors who create their own stock portfolio, it’s a reasonable question to ask. Do you have enough tech in your portfolio?

For our accounts we use a mix of individual stocks and ETFs. But for the US allocation it’s all stocks. I had wondered if I was missing out. While I love my dividends and dividend growth, in the end it will all come down to total returns. The most optimal arrangement for retirement funding might be a nice mix of generous and growing dividends and that growth component. We can make our own home-made dividends.

Benchmarking our techs against the Nasdaq 100

I ran our tech basket of 4 companies against the Nasdaq 100. You can read about that exercise in my recent Seeking Alpha post. And yes, I’m going to give away the ending.

Here’s … My tech basket has more growth than the Nasdaq 100.

Apologies for the brag, but that’s how we do it on Seeking Alpha. 🙂

The 4 companies are Apple, Microsoft, Qualcomm and Texas Instruments. As you might expect the tech monsters of Apple and Microsoft are the main drivers of those returns. That said, the tech 4 does not keep up with the fabled FAANG stocks. The group includes Amazon, Netflix and Google (Alphabet) in addition to Apple and Microsoft.

That one ticket portfolio has you covered

If you hold a one ticket asset allocation portfolio, you’ve got tech. Those tech giants dominate the S&P 500 or US total market ETFs that are held by the one ticket ETFs. And in Canada Shopify holds the greatest weight in the TSX 60 or TSX composite ETFs. There are other Canadian tech companies contributing, but the US is certainly the land of tech giants and tech growth.

Tech is now 11.2% of the TSX 60 ETF.

Related post – Why index investing works. Continue Reading…

10 ideas for a Mini-Retirement lasting 6 months to 2 years

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Working a nine-to-five routine can be draining. The practice of taking time away from work for an extended period of time has become increasingly popular among employees. This “mini-retirement” can help professionals recharge and provide a much-needed break from a strenuous daily routine.

Although you may not be planning on taking a mini-retirement, brainstorming ideas of what you’d want to achieve during this period may help you align your purpose and goals within your professional career.

Below, we asked 10 thought leaders to share their ideas for things to enjoy during a mini-retirement.

Explore a new industry

Leave your normal career to explore investing or real estate. Choose something that you might not have the chance to focus on while working full time as a great way to spend a mini-retirement. Diving into topics that you are interested in and really taking the time to research and learn more about these topics could prove to make you money in the long run. – Rex Murphey, Montauk Services

Do something Book Worthy

My barometer for doing anything is considering whether the endeavor is worthy of a book. If I had six to 24 months to do anything, I’d first think about what the topic or title of the book would be. Then, I’d outline the table of contents. After the outline, I’d live out each chapter idea to the extent that I could fill the pages about the desired topic. That framework could be applied to any retirement idea from “The Ultimate Guide To Tapas in Spain” to “Everything To Know About Making a Documentary In a Third World Country.” But, as long as the mini-retirement idea is book-worthy, then I’m guaranteeing myself that the topic is deep enough to keep me continuously engaged and satisfied. — Brett Farmiloe, Markitors

Pursue knowledge

I love learning but due to my hectic work schedule, I usually don’t find time to study. So I’d want to learn and focus on self-development during my mini-retirement. I’d want to apply for a scholarship to fund my postgraduate program. Other than that, I’d want to learn new languages and travel. Maybe I’d go abroad for studies as it’ll give me a chance to travel as well. — William Taylor, VelvetJobs

Take an extended Holiday

Plan a holiday that you have been waiting for. This could be to a domestic location or an international destination. Make sure your finances are sorted and that the holiday fits into your current budget. Set aside enough money to last during this time, then take some time to focus on getting your career back up before the mini-retirement is over. — Joe Flanagan, GetSongbpm

Take a Road Trip in an RV

Retirement would lead to a few exciting travel options. The most exciting would be buying a Cruise America refurbished RV and traveling the United States.  Pack and unpack once for a journey of a lifetime and stay as long as you want in each location.  I think a one year trip around North America would be one of the most bucket list items one could experience and imagine all the amazing places you could visit and the memories that would be created. — Randall Smalley, Cruise America

Switch to freelance or part-time Work

A good way to do this is to either freelance or work as a consultant on a part-time basis. The main benefit of doing this is that, in most fields of work, you’re able to do this online. This means you’ll be able to work from wherever you wish to enjoy life for some time. Whether it be a beach in southeast Asia or in an RV around Europe, working in this way gives you the flexibility to enjoy your time off from full-time work. It also lets you choose just which assignments to accept during this period, allowing you to work as much or as little as you want. Is your budget running a bit low? Maybe it’s time to ramp up your hours. Alternatively, are you about to go off the grid for some time? Close your laptop and off you go. — Anna Barker, LogicalDollar

Revisit your childhood interests

I would dust off my childhood fantasies about what I liked to do. One recurring theme on the Rock Your Retirement podcast is that many of us are not prepared mentally for retirement. We need to have a purpose in life. Continue Reading…

Investing ― not Speculating ― in Growth

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Image courtesy Franklin Templeton; iStock

By John P. Remmert, Franklin Global Growth Fund

(Sponsor Content)

 

Growth stocks attract a lot of attention, especially when momentum markets take share prices to heartpounding new heights. But as growth investors ourselves, we think many investors may be missing the point.

A single-minded focus on momentum is little more than speculation. If you want to invest in growth, rather than simply speculate, sustainable earnings are the key to unlocking value.

Stocks are the longest-duration assets in the capital markets. It may be several years until a stock’s value is fully realized, and as the COVID-19 pandemic has starkly reminded us, a lot can change in the meantime. We think it’s important to develop a mindset with a long time horizon and we seek to own the stocks of attractive companies that will benefit from the secular shifts that we think will shape the fortunes of businesses for many years to come.

Technology crosses all sectors

Technology is increasingly at the core of every business, not just those in the technology sector. If anything, the COVID-19 pandemic has simply sped up adoption of existing trends like ecommerce, machine learning and big data analytics. Health care, especially drug discovery, has surged forward with the rise of machine learning, like the biotech company we’ve owned for years that is now at the cutting edge of COVID-19 drug treatments with an antibody therapy that could help reduce symptoms in severely ill patients.

Within the information technology sector itself, we have invested in many US companies, as they tend to be global leaders with good corporate governance. But when we look at the pervasiveness of technology in other sectors, we find great opportunities in other countries and regions, like the South American stock we bought 10 years ago when ecommerce was non-existent; today the company is a market leader in ecommerce and has developed its own payment and shipping services to facilitate transactions.  Or the education company in China that was able to quickly move their business online when the pandemic hit, because they had been methodically investing in their online offering for years.

Supply chain links surprisingly strong

Although the pandemic and global trade tensions have put supply chains in the spotlight, in the long run, globalization still produces the best products at the cheapest price for the consumer. Continue Reading…

Buying a home in Retirement? You’ll need these Resources

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Photo Credit: Rawpixel

By Sharon Wagner

Special to the Financial Independence Hub

Buying a home and preparing for retirement can be stressful enough on their own, so when the two intersect it can be easy to feel like you’re in over your head. With some careful planning, you can avoid a lot of the headaches that often go with buying a new home. These resources can assist with making informed choices when it comes to budgeting for your new home and your move.

Planning & paying for your new home

Money can be tight in retirement, so it’s important for you to think carefully about all of the potential expenses that can come with purchasing a new home.

Address retirement finance concerns before diving in; you can access reliable information through Financial Independence Hub.

Preparing for the costs of Aging in Place

Aging in place features are important for seniors, so make sure you know which features to look for and what costs to expect.

Decluttering & downsizing your current home

Cut stress and expense by decluttering and budgeting for help.
Continue Reading…