All posts by Financial Independence Hub

How to be wealthy & healthy, starting this Holiday Season

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Piggy bank balancing on seesaw over a bottle of pills
You can balance Health & Wealth with advisors on both

By Sandy Cardy

Special the Financial Independence Hub

The Holiday season is a very personal balancing act.  Every year we experience the same thing – multiple events featuring gut-bloating menus and Boxing Day blow outs followed by crash dieting for both your waist-line and your bottom line. How do you find that sweet spot between making the season joyful and memorable while avoiding the perils of two to three weeks of over-eating and spending followed by a blizzard of credit card debt?

It’s no secret that Canadians, particularly Baby Boomers in their sixties, are doing a poor job of managing their retirement savings, falling well short of amassing enough retirement funds. Canadians still find it difficult to apply one of the simplest financial planning principles: pay yourself before you pay for anything else.

If, like many boomers, your retirement plan is increasingly looking like harnessing yourself to a full-time job as long as possible, what happens if you fall sick? And when you gaze with furrowed brow at your bloated credit card balances in January, not only are you even further from any savings goals, the sheer shock of the amount owing can add an unwelcome dollop of stress to already overtaxed minds and bodies.  Never knowing when enough is enough, there aren’t any checks and balances on our impulse to over-consume.

Here are some tips to get re-balanced for 2017:

Every money decision you make, even the little ones, will have an impact on your retirement. Perhaps what you need now is a qualified advisor to help you achieve your goals: someone you trust wholeheartedly. A good advisor will ensure you are realizing all cost savings, and applying tax minimization strategies to build your net worth. Put it this way: it’s much more difficult to neglect simple investment principles when a financial planner is looking over your shoulder.

Healthcare advisors as important as financial advisors

Similarly, having one or more health care advisors available is essential. Whether you encounter a health crisis or want to pursue preventative health,  it’s key to find  nurturing and optimistic healers, either conventional or alternative, ones that involve you in your health care discussion.

Continue Reading…

ChangeRangers’ Mark Venning interviews Victory Lap Retirement co-authors

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Mark Venning, ChangeRangers.com

By Mark Venning, ChangeRangers.com

Special to the Financial Independence Hub

“We’re on a bit of a crusade to change the way our society thinks about retirement.” — Jonathan Chevreau & Mike Drak

Mike Drak and Jonathan Chevreau, co-authors of Victory Lap Retirement (published, October 2016) are not the first to head out on this crusade. Apart from the material on the larger subject of aging and longevity, in my library I must have at least 19 books, in addition to the stacks of reports, studies and new models on the subject of Retirement.

Over the twenty years in the career services industry, where I worked directly with business executives in their later life transitions – leaving the corporate crow’s nest, as I call it, I can appreciate where Mike and Jonathan are coming from in their take on this. I have produced three retirement programs since 2001, and in the process suffered from metaphor madness, developing novel ways of reframing the concept of retirement and our later life journey.

However, this Drak & Chevreau volume is a welcomed new addition to this crusade. The book, by way of its novelty, weaves the conversation from the threads of a concept called Findependence, as the cornerstone of a Victory Lap Retirement.  So here we go. Rather than a traditional book review, here in this blog post, I present views of the authors as shared through interview questions with them in late October.

Authors Interview

Mark’s Q: Your co-authored book, early on, takes a shot across the bow at the “financial media & financial services industries” in the way they persist to push “Retirement” as if it were some final destination. (There seems little shift between the 1970’s London Life’s Freedom 55, to Prudential’s 2016 Race for Retirement campaigns for example.) What one new key message should marketers take from reading Victory Lap that could become a differentiator in their marketing?

Mike: The industry is using the same commercials that they used 40 years ago. The only difference is that they are now in color. The world of retirement has changed significantly over the years and most people cannot afford nor do they want to live the lifestyle portrayed in their commercials.

Banks assume more money equals better retirement, which is wrong thinking. Banks are good with the investment piece but they need to become more involved with the lifestyle piece. How can you ever know if you have enough if you do not have a firm handle on what type of retirement lifestyle you want in retirement and what that lifestyle will cost?

Mark’s Q: At one point in Chapter 3, you make the point that: “Compounding the problem is the lack of financial education our children receive in school.” You also say in Chapter 4 that the importance of financial independence is a prerequisite to the new stage of life you call “Victory Lap Retirement.”  Let’s play here. What do you think about an opportunity for you to design/deliver a “Findependence” course relatable to high school teenagers that didn’t use the word Retirement? What then would the main message sound like to them?

Jon: We’d say there is an opportunity there. Continue Reading…

20 tips for getting Life Insurance without a medical

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Lorne Marr

By Lorne Marr, LSM Insurance

Special to the Financial Independence Hub

The No-Medical Life Insurance market in Canada is exploding. More and more people are opting for the convenience of obtaining life insurance without a medical.

No-Medical Life Insurance policies fall into two categories: Guaranteed Issue (no health questions) and Simplified Issue (anywhere from a 2 to 25 + health questions).  No-Med policies are available as Term policies — where the cost starts off low and increases as you get older or Permanent policies — the premiums start off higher but never increase.

There’s a plan for everyone, bu these plans can be an especially good deal for customers that may otherwise be considered hard-to-insure.

Here are 20 points to consider:

1.) Understand the difference between different types of life Insurance.

Simplified issue life insurance: Doesn’t require a medical exam but there are still a number of health-related questions. Typically, the more questions, the lower the premiums. The maximum limit on this type of policy is usually $150,000. You might not qualify for this policy if you have been denied life insurance in the past two years.

Guaranteed issue life insurance: Doesn’t require a medical exam and there are no health-related questions. It is available to everyone, even if you have been declined life insurance within the last 2 years. The coverage limit is typically $25,000 and some payout restrictions may apply during the first two years of coverage. Continue Reading…

Three myths about trading Fixed Income ETFs

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Michael Barrer

By Michael Barrer, WisdomTree Capital Markets

Special to the Financial Independence Hub

Fixed income exchange-traded funds (ETFs) provide the investing world with transparency in an otherwise opaque asset class. Although launched in 2002, fixed income ETFs did not become mainstream until 2008, and today these funds are often considered the growth engine for the ETF industry. However, because of the over-the-counter nature of the fixed income market and the fact that ETFs with fixed income underlying securities were adopted later than their equity-based relatives, there are still myths around the trading and liquidity profiles of these funds. I want to address these myths and explain the realities of the fixed income ETF structure.

Myth 1: Fixed income ETFs are not liquid, and on-screen volume equals ETF liquidity

Reality: ETFs are just an exchange-traded wrapper around a basket of securities. The minimum liquidity available of the ETF is defined by the liquidity of the underlying securities. With equity ETFs, the volume of the underlying securities can be measured and tracked. Implied liquidity is an industry standard metric that quantifies basket liquidity in equity-based ETFs.

In the fixed income market, the over-the-counter trading nature and lack of centralized trade reporting make quantifying fixed income ETF liquidity more challenging. That being said, there is a basic industry practice that assumes 5% of an outstanding issue will turn over daily and a conservative estimate to avoid market impact is to not be more than 25% of that daily turnover.

We recently discussed this subject in a separate blog post, where we quantified the potential daily liquidity in our new “Smart Beta” fixed income strategies. The bottom line remains that fixed income ETFs are designed with liquidity in mind, so they can scale, and the minimum liquidity available will always be based on the liquidity of the underlying asset class. On-screen volume only acts as an additional layer to the overall liquidity profile of the ETF.

Myth 2: Fixed income ETFs have wide spreads

blog-see-more-fixed-incomeReality: The spread of an ETF is a representation of the spread in the underlying asset class, plus the costs and risks associated to the market maker. The exchange-traded and transparent nature of ETFs allows investors to see these spreads in real time. Whereas in a mutual fund, the portfolio spread would mirror that of an ETF with similar characteristics, however, the mutual fund structure does not allow for this level of intraday transparency.

Continue Reading…

Save money with Travel Rewards programs

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Flight bonus points symbol concepts isolatedBy Alyssa Furtado, RateHub.ca

Special to the Financial Independence Hub

Active and casual travelers have long known that one of the best ways to save on their vacations is by using travel rewards credit cards. It’s pretty simple: Sign up for a travel rewards program, collect points, and redeem them when you have enough saved.

What makes travel rewards credit cards so appealing is the fact that many offer huge sign-up bonuses. Usually there’s a minimum spend required within a set amount of time, but that seems pretty minor when you’re getting a few hundred dollars in return.

In addition, many travel credit cards offer additional benefits that help you save on your travel. For instance, many include travel emergency medical and car rental collision/loss damage waiver insurance. That’s easily worth a few hundred dollars a year.

The downside to travel rewards programs is that they can be difficult to understand for some. Here’s a look at three popular programs to help you decide the one that’s best for you.

BMO Rewards

With BMO Rewards, points can be used for flights, hotels, and more. They’re only redeemable on the BMO Rewards website or by calling the BMO Rewards Centre (a $29.95 booking fee applies), but there’s still some decent flexibility here. There are no blackout dates, you can book with any airline or hotel, and you can use your points to pay for taxes and fees. You receive $1 credit for every 100 points you redeem. That values each BMO Rewards point at $0.01 apiece. Continue Reading…