All posts by Financial Independence Hub

Are Your Elderly Parents Easy Targets For Financial Scammers?

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MarieEngen
Marie Engen, Boomer & Echo

By Marie Engen, Boomer & Echo

I was visiting my parents at the retirement home and prominently displayed on the elevator was a sign warning the residents not to give out personal information on the phone to people claiming to be from the bank, credit card company, or the government.
I find it bizarre that the same old scams keep cropping up time and time again, but they do because they work. 

Older adults are particularly susceptible to financial scams, but the crimes often go unreported because they are embarrassed or don’t even realize they are being scammed.  Also, elderly victims my not report crimes because they may be concerned that their relatives may think they no longer have the capacity to handle their own affairs. Their trusting nature may be their biggest liability.

Are your elderly parents easy prey? How do you protect them from becoming victims? Here are some signs to watch for:

  1. They claim to have won a prize

Ask whether they had to pay anything to claim their winnings. Typically scammers tell victims they have to make some kind of payment – taxes or shipping – in order to get their prize. Or, they may have to agree to some sort or demonstration, e.g. vacuum cleaner, to claim their prize. Then they are pressured into a sale.

Let your parents know that legitimate sweepstakes don’t require any initial payment – or, especially, a bank account or credit card number. And, say “No, thanks” to the demo offer.

  1. They go to “free meal” financial seminars

These seminars target seniors through mailings – and even their church or club – and offer gourmet meals, expert advice and “risk free investment opportunities” with “guaranteed” returns. The food and tips may be free but people who are persuaded to buy these investments end up paying a big price with their unsuitable or risky investment products.

Financial scams are devastating to older adults. It’s not just the wealthy that are targeted and it’s not always strangers who perpetrate them. Especially vulnerable are older widows who may not have had much experience in managing their finances.

  1. They offer personal information over the phone

Watch for signs that they are giving out personal information such as bank account and credit card numbers, and social insurance numbers.

Be aware of things they are buying over the phone, such as low cost prescriptions, funeral services, reverse mortgages. Some scammers promise to provide credit card or identity theft protection. Watch for pledges to donate money, especially automatic withdrawals.

Once information is given out to one scammer it might be shared with others, sometimes defrauding the same person repeatedly.

To help your parents avoid telemarketing scams you can register their phone number on the National Do Not Call Registry, although this is not always successful.

Talk frankly with your parents about common scams and tell them to hang up on anyone calling who isn’t a friend or family member.

Marie Engen is the “Boomer” half of Boomer & Echo. In addition to being co-author of the website, Marie is a fee-only financial planner based in Kelowna, B.C. This article originally ran on the site on July 28th and is republished here with permission.

 

 

Metroland Media Group invests in Nest Wealth

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Toronto-based online robo-adviser Nest Wealth Asset Management Inc. has announced its first strategic investor: Metroland Media Group Ltd.  Metroland is investing $1.5 million into NestWealth.com, which was the first automated financial adviser to have launched in the Canadian market.

In a press release issued Tuesday morning, Metroland Media president Ian Oliver said the company is pleased to be “leveraging our print and digital assets to partner with Nest Wealth in an area of business growth that provides cost savings to the communities we serve.”

The release cited Morningstar’s 2015 Global Fund Investor Experience Study, which found Canadians pay some of the highest fund fees in the world. Nest Wealth invests client portfolios in low-cost exchange-traded funds (ETFs), rebalancing portfolios as markets fluctuate so asset allocation remains in a defined range. Customized portfolios are created based on the current financial situation of clients, their stated goals and tolerance for taking investment risks. Continue Reading…

Building Your Financial “Stop Doing” List. Part 1: Stop feeding on Junk Media

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Steve Lowrie

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

This month’s financial “STOP Doing” advice is inspired by the events in Europe, with Greece at Ground Zero. I wish I could tell you how it’s all going to play out or, better yet, promise you a happy ending, sooner than later.

Unfortunately, I can’t do that. Time alone will tell. The understandable craving to maintain control over your personal and financial well-being may leave you scanning the popular media’s headlines, searching for tidbits on how to protect yourself from the unfolding uncertainty. That’s why this is an excellent time to repeat a theme I’ve covered before: STOP feeding on junk media.

The Media Can’t Protect You from Volatile Markets

As I described in an April 2014 post, “Here’s why you should ignore the [popular] financial media … While I could recommend many things, I think the most important point for everyone to remember is that it is a myth that today’s headline news has a direct effect on the financial markets.”

This point can be hard to wrap your head around. It seems counterintuitive, but here’s the scoop: Any good or bad news reported by the media may feed your curiosity about what’s going on in the world, but it’s of no use with respect to investing.

Continue Reading…

Stocks beat bonds, hands down: Bob Cable

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Here at the Hub we like to present all points of view. On Tuesday, we ran a guest blog by author and chartered accountant David Trahair about the new second edition of his book, Enough Bull, which explained why he is 100% in fixed-income vehicles like GICs. Today, we do the same thing with a guest blog by Scotia McLeod’s Robert S. Cable, who argues almost the polar opposite in his new book, Inevitable Wealth. We’ll review both books formally in the coming weeks. Meanwhile, over to Bob! – – JC

Stocks beat bonds, hands down

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Robert Cable

 By Robert S. Cable

Special to the Financial Independence Hub

All of the research I’ve carried out since I began doing this in 1980 and every piece of research I’ve seen comparing stocks to bonds– every single time comes to the same conclusion — that is that stock returns don’t just beat the returns of bonds, stocks clobber bonds. It’s absolutely no contest.

In my book, Inevitable Wealth, I compare 40 years of returns, from 1975 through 2014. I show $100,000 invested in Government of Canada five-year bonds, with money reinvested every five years, to the same $100,000 invested in stocks by way of the TSX Composite Index.

In 1975, those bonds yielded 7.25% so your annual income started out at $7,250. Stocks paid somewhat less, $5,360. Advantage bonds—initially. However just four years later, the dividends paid on stocks had moved higher to the point where the dividends paid on stocks was greater than the bond’s income.

But check out these numbers. In 2014, your bonds paid an annual income of just $2,770, down from $7,250, 40 years earlier. Talk about taking a pay cut! Meanwhile in 2014, stocks paid dividends of $49,560. Your stock income was more than 17 times what bonds paid.

What’s really interesting though is this: while stocks paid a much superior and growing income, they really aren’t income investments. The dividend income paid is simply a by-product of these companies sharing their profits with shareholders.

But as they say, that’s only half the story. We’ve looked at the income stocks and bonds produced. But what about the value of each of these investments over those 40 years?

Stocks beat bonds by 17 to 1 over 40 years

Well, that $100,000 you invested in bonds back in 1975 is still worth right around the same $100,000. If you took inflation into account, your $100,000 would actually be worth more like $15,000. The $100,000 invested in stocks? Well, not including the dividends, at the end of 2014 your stocks would be worth a bit more, $1,732,060. Continue Reading…

China: Searching for a New Equilibrium

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Hasenstab_Michael
Michael Hasenstab, Templeton Global Macro

By Michael Hasenstab, Ph.D.
Chief Investment Officer
Templeton Global Macro

Special to the Financial Independence Hub

We find that most observers tend to fall into one of two camps on China: the die-hard skeptics and the perma-bulls. The skeptics are convinced that nothing about China—from the data to the banking system to the demographics—bears close inspection. This school of thought argues that the official numbers are too unreliable to follow, and the imbalances too large to warrant detailed analysis.

Skeptics envision an implosion of the Chinese economy, resulting from a bubble in the housing market, in local government debts, in the stock market—or frequently in all three. In their view, the collapse is impending, and has been for the last 10 years.

The smaller group of China bulls takes an extremely benign view of the country’s transformation. This group expects the China growth miracle to continue smoothly, with any moderation lasting only temporarily. This camp tends to shrug off concerns about imbalances, arguing that China has more than enough money, the right policies in place and an unparalleled control over its economy.

We try to take a few steps back and provide an objective assessment of where the Chinese economy currently stands, where we see it going and what risks we foresee in the period ahead.

Optimistic but cautious

Shanghai Lujiazui civic landscape of China national flags
Shanghai Lujiazui civic landscape of China national flags (DepositPhotos)

We take a more nuanced and balanced view than either the die-hard skeptics or the perma-bulls. On balance we remain optimistic about China’s outlook, but we recognize that the country faces formidable policy challenges and substantial risks that bear close monitoring. Continue Reading…