All posts by Financial Independence Hub

Abenomics: A Strong PM, Abe should deliver positive pro-growth policies

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By Jesper Koll, WisdomTree’s Head of Japan
Special to the Financial Independence Hub
Japanese prime minister Shinzo Abe was recently re-elected as the ruling Liberal Democratic Party (LDP) leader, winning by a very solid 70-30 margin against his one internal competitor. Abe thus has a very strong internal party mandate and will continue to be Japan’s prime minister for another three years. This bodes well for Japan’s economy in general and Japanese risk assets in particular. From here, two specific forces should combine to allow a Nikkei rally toward the 30,000 level over the next six months:

1. Pro-growth policy surprises

2. A sharp upturn in the momentum of positive earnings revisions

While the bull case for Japan equities recently has become more of a consensus view, much of the investment case rests on extremely attractive valuations: TOPIX price-to-earnings (P/E) multiples appear to be back toward the bottom 5% of the range in the past decade.

The big worry: Is Japan a “value trap” with no added “positive surprises” in store to unlock the value? This is where PM Abe’s third term plays an important role as a catalyst: against very low expectations that Abe will do anything new or interesting, we expect “Team Abe” to deliver new proactive policy initiatives relatively soon, and with a sense of urgency.

Specifically, we look for the following:

1.) A new supplementary budget, adding as much as ¥5 trillion (about 0.9% of GDP) to domestic demand

The need for this stems from the various natural disasters that hit Japan over the past six months. About half of the funds should go toward regional reconstruction, but the other half is likely to be earmarked for nationwide disaster prevention measures. There appears to be broad-based consensus for the need of added spending within the ruling coalition, and projects are basically “shovel ready.” Expected timeline: mid-October at the latest. Continue Reading…

7 tips for earning extra money from your Driveway

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By Sarah Kearns

Special to the Financial Independence Hub

Do you want to earn a quick extra buck or two with items that are just lying around the house? How about making money off your handyman skills? And, oh, did you know that it’s also possible to earn extra money from your unused driveway space?

If you’re looking to earn some extra cash by running your own business right on your very own driveway, then you might want to consider these seven money-generating tips.

1.) Hold a garage sale

The first thing that comes to mind when you think of earning money from your driveway is the garage sale. Aside from earning a few hundred dollars, you also get to clean out the clutter in your home. A garage sale is also a good weekend family activity and is a great exercise to learn about the basics of entrepreneurship.

2.) Set up a concession stand

Remember those lemonade stands kids put up during summer break? You can set up a concession stand on your own driveway too! It’s even better if your street has lots of foot traffic. Of course, different countries, states, or territories have different laws regarding this; so, always check your local regulations first before you set up.

3.) Rent out your tools

If you have tools that are seldom used, you can rent them out to neighbors and contractors in your area for extra cash. There are websites like ToolMates that let you post your for-rent tools and equipment online. These services let you make some extra money off your tools; which is always better than letting these expensive items just gather dust in the shed.

4.) Start your own handyman business

Since we’re already on the topic of tools, you can also set up your own, independent, handyman business. If you have handyman (or handy woman!) skills like carpentry, ceiling repair, car maintenance, and such, then it might be good to put those skills into work and earn some extra money. Sites like AirTasker allow you to post your services online so that people in your area can get in touch with you whenever they need your skills.

5.) Share your car with neighbors

Now, this is a fairly new concept and companies like Lyft and Uber have taken this innovative idea to the next level. However, if you don’t like driving around that much, it’s also possible to rent out your car to your neighbors when you’re not using it. CarNextDoor is a service that allows neighbors to ‘share’ their cars with each other, thereby offsetting the cost of ownership.   Continue Reading…

Credit Card users tired of complex points programs & value ability to redeem points flexibly: Survey

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A J.D. Power survey found President’s Choice Financial are the most popular credit cards in Canada

By Hyder Owainati

Special to the Financial Independence Hub

Canadians value their credit card rewards programs. According to a recent consumer survey from J.D. Power, over 87% of the country’s credit card holders are enrolled in a rewards program, while 48% of those who switched their primary credit card in the past year did so in active pursuit of better rewards.

The survey, which polled over 6,000 credit card holders, also found that of the credit cards Canadians were satisfied with the most, the President’s Choice Financial series of cards took the top spot. American Express credit cards ranked second while Canadian Tire’s credit cards rounded off the top three. The rankings were based on customer responses to questions on a spectrum of factors that included benefits, rewards, credit card terms and customer interactions.

While the study offers an insightful look into consumers’ opinions about credit cards, it’s important to note the results were categorized based on credit card companies and don’t offer a breakdown of the individual best credit cards in Canada.

Take a brand-agnostic approach to credit cards

Consumers in search of the best credit card should adopt a brand-agnostic approach and identify the individual cards that offer the rewards tailored to their lifestyle and personal financial goals. For example, a person looking to minimize their credit debt would make a more informed decision by searching for a low interest credit card rather than limiting their card options to those offered by an individual bank or credit card issuer.

Credit cards aren’t one-size-fits-all. It’s important to never lose sight of the fact that there’s a range of options out on the market – from cash back credit cards and travel rewards cards to student cards and more. While an individual credit card, company or bank may rank high on one category or list, it doesn’t necessarily mean it’s universally the best option for everyone.

Therefore, picking the right credit card should almost always start by analyzing personal spending habits and your financial standing. That’s why at Ratehub.ca, we feature built-in calculators that allow you to compare the credit cards that offer the highest value based on where and how you spend your money.

Ask yourself these questions

A smart way for consumers to identify which type of credit card is best designed to meet their needs is to ask a few self-directed questions: How do I spend my money? How often do I travel? How quickly can I earn rewards? Do I ever carry over unpaid balances from month to month? Do I have any current debts? Continue Reading…

Aman Raina’s mid-year 2018 Robo Advisor review

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By Aman Raina

Special to the Financial Independence Hub

We’re half-way through the year, so I thought it would be a good time to check back into my ROBO portfolio to see how it’s doing and if there is anything interesting going on.

Three and half years ago I decided to try an experiment and find out for myself. I set up an account with one of the big Robo Adviser firms and invested $5000 of my own money into it. My goal was to go through the process and blog about my experience and more importantly, the results. I said that we need a good five years to really get a handle on how effective these services are compared to traditional wealth management services. Well, we’re coming upon the 4th anniversary of my ROBO account, so let’s take a look at how it’s doing at the mid-year mark.

Performance

Since we last checked in at the 3-year mark in January, the markets had a bit of a throw-up in February and March and so I was curious to see how the ROBO portfolio handled that pressure.

Year to date the portfolio is up 4.2 per cent. Since the January 30th anniversary date the portfolio is up 1.5 per cent. Going back to when setup the portfolio in January of 2015, the portfolio is up 26.6 per cent. The portfolio has increased $92 this year, of which $80 was in dividends.

So far this year ROBO has been rather pedestrian, which it should be. The value proposition of the robo advisor model is steady, consistent implementation of a passive oriented, low cost investment strategy. We haven’t had any adjustments to the weightings of the portfolio unlike last year. There haven’t been any rotation of ETF products.

Despite my concerns about the weighting of the portfolio to Canadian and US equities, the allocation has paid off nicely, especially the US components. In fact all the equity allocations have performed quite well. Fixed income components continue to lag, which makes sense as interest rates continue to track up.

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Given the strong performance I’m curious to see if the ROBO will actually take some profits and redistribute money towards fixed income or whether they will stay the course. In other words, how “emotional” will my ROBO be? It would be a shame to lose all those gains but I guess that’s what this is all about. That’s me the human being talking and when we let emotions into our thinking we often make the wrong decision. Will the ROBO be different and ignore?

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Fees

Year to date I paid my ROBO $20.12 in fees, which represents about 0.32% of my assets. If this trend continues (they charge a couple of dollars a month), the total fees I pay to the ROBO will come in around 0.6-0.7%. This does not include the Management Expense Ratio fees that are paid to each ETF itself, which would add additional costs.

The Missing Piece

I’ve commented frequently that one thing we don’t know about ROBO portfolios is how they behave in a significant market downturn. We got a small glimpse in February and March when the markets appeared to be on the verge of a major correction. The Dow Jones Industrials were dropping 1000 points a day at one point. How did the ROBO behave during that period? Continue Reading…

Have you considered Shared Housing during Retirement?

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By Steve Barker

(Sponsored Content)

Anyone who is approaching the age of retirement or planning for their eventual retirement is likely to give a lot of thought to just how much they’ll need to enjoy their golden years. While affordable life insurance policies are something else to add to the retirement list, so, too, is whether it would be a good idea to look into living with other people in shared housing: not only to reduce living expenses, but for a host of other reasons as well. Ready to learn more?

High cost of living combined with diminished resources

No matter where you live, chances are good that the cost of living has gone up in the past couple of years, a trend that is likely to continue. While you can control how much you save for retirement, you cannot control how expensive everything from food to medication will be when you’re ready to retire. Additionally, there may not be government or federal financial resources available when you reach the age of retirement, cutting off another source of income. Living with roommates can help immensely in cutting down the cost of living without the need for you to go to great financial and personal lengths to make your living situation work.

You have a built-In social circle

Many seniors grow lonely as they age because they aren’t able to get up and about as much as they used to when they were younger. When you live with people you get along with, being social is as easy as walking down the hall. Elderly individuals who have mobility issues don’t have to worry about making special transportation arrangements to spend time with other people, and being social can be mentally and emotionally beneficial for everyone, no matter their age or health.

Share common house chores

Keeping an entire house clean can be quite a task even for married seniors. Rather than hiring house cleaning services, which can drain your retirement funds, you may find it’s better to divide the chores between the people you live with. Besides saving money, chores allow you to move around and keep somewhat active, which senior citizens need to remain healthy. Continue Reading…