All posts by Financial Independence Hub

The weightlifting Granny

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By Jessica Walter

Special to the Financial Independence Hub

A few years ago, Shirley Webb of East Alton, Illinois, was unable to get off the floor without the aid of a piece of furniture. Neither could she climb the stairs without holding onto the railing. Her only source of exercise came from mowing the lawn.

Now, the 78-year-old grandmother has learnt how to lift a 225-pound barbell. She no longer needs furniture or railings to help her. She’s a record breaker, setting records in Illinois for deadlifting at 237 pounds and in Missouri for 215 pounds, both in age and weight groups.

Along with her granddaughter, Webb joined Club Fitness in Wood River and, within six months of work with her personal trainer, John Wright, she was lifting in the 200-pound range.

So, what advice can seniors take from the weightlifting grandmother?

1.) Find a workout partner

Fitness experts believe that working out with someone will help you more than if you were to work out alone. Not only is it easier to set goals with someone and then motivate each other to achieve them, it’s more fun. Exercise shouldn’t be a chore!

2.) Choose a senior-friendly gym

You’re more likely to go to a gym if you like the premises and the staff – the more welcome you feel, the more fun it will be to go. In an interview with ESPN, Webb said the staff at Club Fitness explained all the equipment to her and her granddaughter before they signed up so she knew exactly what was what. Don’t forget to visit a few local gyms before you sign a contract! Continue Reading…

“Botched” CRM2 implementation just adding to investor confusion: veteran adviser

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Tim Paziuk

By Tim Paziuk

Special to the Financial Independence Hub

After 37 years in the financial services industry I realize I shouldn’t be surprised, and I’m not. I’m shocked. Shocked by the confusion created by the very people who are charged with the responsibility of watching out for us, mainly the Canadian Securities Administration (CSA).

Here is the first paragraph from the overview on the CSA website

The Canadian Securities Administrators (CSA) is an umbrella organization of Canada’s provincial and territorial securities regulators whose objective is to improve, coordinate and harmonize regulation of the Canadian capital markets.

I draw your attention to the words ‘improve, coordinate and harmonize’. In my opinion, they have done more to hinder and confuse the average Canadian than to provide clear and complete information.

Let me give you some background on the recently implemented program referred to as the Client Relationship Management Model – Phase 2 (CRM2).

According to the Ontario Securities Commission:

The Client Relationship Model – Phase 2 (CRM2) amendments to NI 31-103 that came into effect on July 15, 2013 are being phased-in over a three-year period. These amendments introduce new requirements for reporting to clients about the costs and performance of their investments, and the content of their accounts. The requirements apply to dealers and advisers in all categories of registration, with some application to IFMs as well. For more information about these amendments, see CSA Notice of Amendments to NI 31-103 and to 31-103CP (Cost Disclosure, Performance Reporting and Client Statements). Continue Reading…

Q&A: Stock markets are at all time highs … should we sell?

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By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

Here’s a question I received recently, which rhymes with many I’ve heard before:

Now that the Dow has hit 20,000, we should seriously get out and put the cash under the mattress … don’t you think?

This time it was the Dow’s recent high-water mark. In the past, it’s been the same question in various forms, all of which could be rephrased to this question behind the question: Should the all-time nominal stock market highs be used as some sort of signal to reduce equity holdings?

Or conversely, should it be used as a rationale for holding onto cash balances or deferring new equity purchases (which, in my experience, is an even more common form of market-timing)?

It is human nature to look for shortcuts and/or ways to simplify complex questions. The fact that people predict outcomes by making up stories is what makes us all … humans.

Timing the markets when they’re at all-time highs is a nice, neat and simple story. Unfortunately it’s a fable; it doesn’t work. To use a “baseball story,”  three strikes and you are out.

One.

I can point a couple of my past posts here and here for frowning on these sorts of signals, or treating them as anything other than the noisy blips they are on your financial radar screen. Try to chase them, and you’re more likely to be left flying blind.

Two.

Nominal levels ignore market valuations. That means new market highs may be fun, but they’ve not been worth beans for predicting future returns. Those are expected either way, but for entirely different reasons.

Three.

To take a deeper dive into the subject, Dimensional Fund Advisors has done the heavy lifting for us in “New Market Highs and Positive Expected Returns.”Their conclusion is that it doesn’t work. Give it a read if you want all of the details.

Still not convinced? … then please contact me.

Steve Lowrie holds the CFA designation and has over 20 years of experience dealing with individual investors. Before creating Lowrie Financial in 2009, he worked at various Bay Street brokerage firms both as an advisor and in management. “I help investors ignore the Wall and Bay Street hype and hysteria, and focus on what’s best for themselves.” This blog appeared originally appeared on his site on February 3rd and is republished here with permission. 

 

A retired Advisor’s Open Letter to Bill Morneau on expanding TFSA

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Finance Minister Bill Morneau (bmorneau.liberal.ca)

(To:) Hon. Bill Morneau, Minister of Finance,
House of Commons, Ottawa.

Dear Hon. Minister,

Thank you for your response to my previous letter. I am a strong believer in an enlarged Tax-free Savings Account (TFSA) and have NINE reasons for that belief through my experience as an IA (Investment Advisor).

I think you will agree that the larger TFSA makes retirement savings fair for all levels of Canadians incomes, but helps those who need it most as there is little RRSP deduction benefit for low-income Canadians. I think your background experience will lend itself to agreeing with my nine reasons for restoring the $10,000 TFSA.

Restore the $10,000 TFSA

The $10,000 TFSA [the previous annual contribution level] is the most profound and beneficial social program created in Canada’s 21st century. It benefits the young, seniors and the less fortunate as well as the well off. Its principal benefit is a meaningful and manageable amount of money which can be used as a saving vehicle and a retirement savings account.

1.)  It is especially beneficial to the non-working spouse, by enabling a savings and retirement account not requiring a monthly pay cheque and its commensurate income tax and tax deductions. This was the principal reason for the Americas Roth IRA, (ROTH account withdrawals are tax free,  but after the age of 58.)

2.) The larger TFSA amount is a meaningful savings target by today’s standards in that $400,000 can be accumulated over 40 years of adult life. Continue Reading…

RRSP Gross-up Strategy: Contribute 40-70% more to your RRSP

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“Never put dry pasta into your RRSP.”

By Ed Rempel

Special to the Financial Independence Hub 

Wouldn’t it be great if you could save a lot more for your future without affecting your day-to-day cash flow?

One of the main things people learn when they first have a retirement plan done is that you need to invest more than you thought to have the future that you want. But with all the day-to-day expenses, it can be difficult to find the money to contribute as much as you would like to your RRSP.

The RRSP gross-up strategy is a simple strategy that can make a huge difference for you. It can enable you to easily contribute 40 to 70% more to your RRSP.

The strategy works if you already expect a tax refund. If you contribute monthly to your RRSP or have various tax deductions or credits, you probably expect a tax refund.

It is smart to gross-up every RRSP contribution you make.

You have three options with your tax refund:

  1. Spend it.
  2. Invest it.
  3. RRSP gross-up strategy.

Here is how the RRSP gross-up strategy works. Continue Reading…