All posts by Financial Independence Hub

Polling financial literacy: results both encouraging and worrisome

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graham-bodel
Graham Bodel

By Graham Bodel, Chalten Advisors

Special to the Financial Independence Hub

The Canadian Securities Administrators (CSA) just released its 2016 CSA Investor Education Study, an assessment of financial literacy across the country.

Some of the findings are encouraging while others are a little bit worrying.

There are clearly still key gaps in investor knowledge and behaviour.  For example, while many investors rely exclusively on advisors for investment information and knowledge very few investors actually check to see that their advisor has the appropriate registrations.  Some other key points:

Risk Tolerance

To begin with, findings show that more and more people seem to be paying attention to their risk tolerance, which is great!  Risk tolerance is what should drive the mix of different investments that you hold, often referred to as asset allocation.  Risk tolerance is driven by your need, ability and willingness to take risk and should be informed by your current financial situation as well as near and longer term financial planning goals.  Risk tolerance can definitely change as your circumstances change or as you enter different stages of life so it is worthwhile checking periodically to ensure your investments are suitable for your risk tolerance.

Investment Knowledge

Survey respondents were asked to answer seven questions to assess general investment knowledge.  6 of 10 people answered 4 or more questions correctly, which is about the same as in previous surveys.  25% of respondents answered 6 of 7 questions correctly indicating a “high” level of investment knowledge.

Continue Reading…

Leave an inheritance of cottage relaxation, not taxation

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Cottage On The Carpenter Lake, CanadaBy Tarsem Basraon, TD Wealth 

Special to the Financial Independence Hub

The summer is quickly approaching and for many Canadians that means one thing: cottage season.

While many parents envision leaving the family cottage as part of their inheritance one day, with the value of cottages often appreciating since purchase, there’s also the risk of bestowing the legacy of a large tax bill.

To help make sure you’re leaving an inheritance of cottage relaxation and not taxation, here are three strategies you can discuss with your financial advisor when planning your cottage legacy. These strategies are available to you while you are alive, and there are various other strategies that can be implemented on your death in your will.

• Co-own with your Kids

Adding your children to the deed and making them co-owners of your cottage could help defer capital gains tax and save money. For example, if your cottage value has increased over time, it would trigger a capital gain on the portion of the cottage that your children now own and you would pay the tax on that now. Down the road, your kids would only pay tax on the capital gains owing on the remaining portion of the cottage you own when you die. There is,  however, a risk with this approach. Continue Reading…

Choosing frugality amid social pressures to spend

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Man keeping a woman from entering a store and begging her to stop shoppingBy Helen Chevreau, Hub Staff

As millennials, we often feel pressured by both the media and our peers to look and act a certain way. It’s a general rule of thumb that if you’re in your twenties or thirties, you’ll feel the strain of wanting the newest and best something at least once. Many of us will crack under pressure and eventually purchase that new iPhone (even though our current one works fine), or that new pair of jeans (even though we already have a pair in that colour).

The thing about succumbing to these societal pressures, though, is that for the most part, at the end of the day, we don’t feel better about ourselves after making these big purchases. In fact, a lot of the time, it’s quite the opposite. We see the shiny new product and our first reaction is “I need this now.” We can convince ourselves the price is irrelevant, and that it will pay for itself, or that it’s a necessity. But how frequently is that true? Do we ever really need to bow to those pressures?

Stop, Drop, Don’t Shop

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Mrs. Frugalwoods

It seems there is a trend emerging in the financial millennial blogosphere wherein bloggers enact a “shopping ban.” The terms of the bans vary by site, but the general premise remains the same:  a new consumption philosophy rooted largely in the theory of not purchasing anything.

“Mrs. Frugalwoods” of the blog Frugalwoods, for instance, is well on her way to going three years clothes-purchasing-free. Continue Reading…

How to manage your first Credit Card

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a young business woman holding new credit cardBy Alyssa Furtado, RateHub.ca

Special to the Financial Independence Hub

When you become an adult is a matter of opinion. It could be when you turn 18, move out of your parents’ home, or land your first job. But for some, they joke that you’re not really an adult until you get your first credit card. I don’t know where the joke originated from but from a financial standpoint, getting your first credit card is practically a life event.

Depending on what province or territory you live in, you can legally get a credit card at the age of 18 or 19. Unfortunately, at that age, many of us aren’t making sound financial decisions, which is why you might be tempted to sign up for a new card on your college/university campus or even inside a grocery store or mall.

What credit card you select and the benefits it offers could affect you in the long run. So it’s a good idea to understand how to manage your first credit card before signing up for the first offer available to you.

Picking the right card

Receiving a free t-shirt or a travel mug may be tempting but if that’s the reason you’re signing up for a credit card, you can do a lot better. Continue Reading…

Four fun Side Jobs you can do while still young enough to enjoy them

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Young girl playing piano in music lessonBy Cathy Habas

Special to the Financial Independence Hub

Time is money, as the saying goes. And if you’ve got extra time on your hands but not a lot of extra money, maybe you’ve thought about starting up a side gig. Whether or not you decide to turn your side job into a flourishing career of its own, it won’t really feel like a job if you’re enjoying yourself at the same time. Plus, having multiple streams of income is highly recommended as a safety net.

With the following side jobs, you can prevent yourself from getting run down and ragged by being your own boss. You can set your own schedule, accept or decline jobs as your availability dictates, and adjust your prices so that it’s all worthwhile in the end.

You can start getting clients by reaching out to friends and family and growing via word of mouth from there. In time, you might find that a web presence will help you reach even more people. It doesn’t necessarily have to be a website; a Facebook page can be just as effective if managed well. In some cases, professional certifications can also bolster your reputation.

House Sitting

House sitting is an excellent way to earn some extra cash on the side, and it’s a very relaxed gig. You’ll be responsible for making sure that nothing goes awry while the homeowners are away. Your mere presence will deter would-be burglars, but house sitting goes beyond just sitting in a house, as you may need to handle other emergencies or simply bring in the mail and take out the trash.

In exchange, you get paid a daily fee. However, Continue Reading…