All posts by Financial Independence Hub

Looking to treat your loved one this Valentine’s Day? Give the gift of a financial conversation

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Only half of Canadian couples discuss finances in detail, an IG Wealth Management study conducted by Pollard found. This week may be a good time to examine your joint lifestyle and retirement goals.

 

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By Blair Evans

Special to Financial Independence Hub

Valentine’s Day is here and while love may be in the air, there’s an often-overlooked gift that can strengthen your relationship: a meaningful conversation about finances.

Unsurprisingly, many Canadian couples shy away from discussing money with their partners. According to a recent study by IG Wealth Management, in partnership with Pollara Strategic Insights, only half of married or common law Canadians discuss finances with their partner in detail, with roughly a third talking about it only briefly.

Yet, when thinking about your future together, especially retirement, these conversations are crucial. You and your partner should be aligned on your retirement goals and lifestyle to ensure you plan appropriately and are fiscally prepared to enjoy those golden years.

Transparency on Finances can pay off in multiple ways

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Transparency around your finances and having proactive conversations with your partner can also pay off come tax season.

Working together to file each of your tax returns can unlock opportunities to maximize deductions and credits.

You may be able to transfer unused credits, like tuition and disability amounts, to your partner to help alleviate their tax bill.

Couples can also combine their medical expenses and charitable donations together to minimize their overall tax obligation.

If your relationship is built for the long haul, it’s important to plan for life’s uncertainties.  Building an emergency fund, as well as having an updated will and power of attorney, along with proper life and disability insurance plans are essential to prepare for any emergencies or untimely circumstances. Continue Reading…

Why you shouldn’t chase Investment Trends

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Whether it’s a hot stock, a cryptocurrency surge, or a trending investment tip, many retail investors will fall into the trend of what we call FOMO or Fear of Missing Out. But here’s the problem: chasing the crowd often leads to poor financial decisions and ultimately regret. It’s easy to want to chase investment trends, especially when you see others gaining quick returns. Before you jump the gun take a breath and learn why this isn’t a good strategy for retirement.

Adobe Stock Image courtesy Logical Position

By Dan Coconate

Special to Financial Independence Hub

Investing successfully requires a steady hand and a clear plan, especially when you’re planning for retirement or managing your hard-earned savings. However, the allure of hot investment trends is almost always hard to resist. Promises of fast gains or stories of friends capitalizing on can’t-miss opportunities often tempt even the most cautious investors.

For retirees and those approaching retirement, chasing these investment trends might feel like a shortcut to safeguarding financial stability. But the reality is far different. Keep reading as we discuss why you shouldn’t chase investment trends and what to do instead.

The Value of a Long-Term Strategy

A stable, long-term investment plan carries more weight as you near or enter retirement. Unlike younger investors focused on aggressive growth, retirees prioritize income-generation and capital preservation. Chasing short-term trends often contradicts these goals.

Retirement planning requires balancing risk with steady returns. Staying invested in a diversified portfolio of assets tailored to your goals ensures consistency, even during market fluctuations. For example, dividend-paying stocks or well-selected bonds generally offer more stability compared to speculative trends. By adopting a long-term mindset, you’re more likely to see your investments support you throughout your retirement years without the stress of rapid, unpredictable market movements.

Why Trend Chasing feels tempting

The urge to follow trends isn’t purely rational: it’s psychological and herd mentality plays a big role. When you see others profiting from specific investments, it’s natural to feel compelled to follow suit. The fear of missing out, or FOMO, will amplify this instinct, making it hard to stay disciplined. This emotional response, however, often clouds judgment and leads to rash decisions. Continue Reading…

The Ripple Effect of Representation: Elevating Voices in Canadian Finance

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By Sara Loriot

Special to Financial Independence Hub

Representation in our industry matters: a lot. For too long, finance has been associated with a narrow archetype of who belongs.

But in reality, some of the most successful minds in our industry come from different backgrounds and took unconventional paths, bringing unique perspectives that drive innovation. By showcasing these individuals, my goal is to challenge outdated stereotypes and make it clear: finance is for anyone. Seeing real people succeed by being unapologetically themselves can inspire others to recognize their own potential in this space.

Diverse Dividends is a new video series by CFA Society Toronto, the largest association of its kind serving the investment and finance industry in Toronto. At the heart of what we do is helping our members advance in their careers, build connections, and share knowledge and insights through educational programming that fosters growth and empowers the next generation of leaders in finance and investing.

This series is an example of that mission in action and, as host of this series, I have the privilege of amplifying the voices of leaders who aren’t just part of the financial landscape: they’re reshaping it. Many of my guests didn’t study finance, yet they’ve become some of the most influential figures in the industry. Their diverse backgrounds influence how they lead, how they assess risk, and how they solve problems. They don’t fit into a single mold, and that’s precisely why they excel.

When I talk about diversity, I don’t just mean gender or optics: it’s about how people think, lead, and approach challenges. Life experiences shape leadership, and the paths that bring people into finance are as important as the technical skills they acquire along the way. In fact, I often ask my guests about their hobbies because what we do outside of work shapes how we innovate inside of it.

Analytical skills are important in finance, but creativity and emotional intelligence are equally essential. Some of the most innovative financial professionals aren’t the ones following formulas: they’re the ones questioning them.

Diversification the universally accepted principle in Finance

In finance, diversification is a universally accepted principle: no one questions that spreading risk across different assets leads to more resilient portfolios. The same logic applies to leadership and building teams. A team that brings diverse perspectives, experiences, and ways of thinking is better equipped to navigate challenges, adapt to change, and drive innovation. That’s why Diverse Dividends embraces a “go-anywhere” format; because understanding who someone is, rather than just what they do, reveals the true value they bring to the industry. Continue Reading…

A Misunderstanding about Taking CPP Early to Invest

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By Michael J. Wiener

Special to Financial Independence Hub

Recently, Braden Warwick at PWL Capital created an excellent CPP calculator that we can all use.  One of the numbers this calculator reports is the IRR (Internal Rate of Return) you’ll get between your CPP contributions and the CPP pension you’ll collect.  Some financial advisors (but not Braden) decide it makes sense for their clients to take CPP as early as possible (age 60), and invest the proceeds.  Their reasoning is that they believe they can earn a higher return.  Here I explain why this logic compares the wrong returns.

The return you’ll get on your CPP contributions depends on the contributions you and your employer have made and the benefits you’ll get.  These amounts depend on many factors about your life as well as some assumptions about the future.  Typically, the return people get on CPP is between inflation+2% and inflation+4%.  (However, it can go higher if you took time off work with a disability or to raise your children.  It also goes higher if you ignore the CPP contributions your employer made on your behalf, but I think this makes a false comparison.)

If we examine people’s lifetime investment record, not many beat inflation by as much as CPP does.  However, some do.  And many more think they will in the future.  In particular, many financial advisors believe they can do better for their clients.

But what are we comparing here?  These advisors are imagining a world where CPP doesn’t exist.  Instead of making CPP contributions, their clients invest this money with the advisor.  In this fictitious world, the advisor may or may not outperform CPP.  However, this isn’t the world we live in.  CPP is mandatory for those earning a wage.

The choice people have to make is at what age they’ll start collecting their CPP pension.  The CPP rules permit starting anywhere from age 60 to 70.  The longer you wait, the higher the monthly payments get.  Consider an example of twins who are now 70.  The first started CPP a decade ago at 60 and the payments have risen with inflation to be $850 per month now.  The other waited and has just started getting $2000 per month.  The benefit of waiting is substantial if you have enough savings to bridge the gap between retiring and collecting CPP, and don’t have severely compromised health.

Those with enough savings to bridge a gap of a few years have a choice to make.  Should they take CPP immediately upon retiring, or should they spend their savings for a while in return for larger future CPP payments?  Some advisors will say to take CPP right away and invest the money, but this is motivated reasoning.  The more money we invest with advisors, the more they make. Continue Reading…

Building Financial Harmony: Strategies for a Positive Money Mindset

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By Jim McKinley

Special to Financial Independence Hub

Our relationship with money often shapes many aspects of our lives, influencing decisions and perspectives. Developing a healthier connection with finances can lead to greater peace of mind and a stronger sense of control. By exploring thoughtful strategies, individuals can create a balanced approach that fosters both stability and growth.

Align Finances with Personal Values

Developing a personalized financial plan begins with identifying your core values and long-term aspirations. This process ensures that your financial decisions are purpose-driven and aligned with what matters most to you, whether it’s achieving financial independence, supporting family, or pursuing personal passions. Start by assessing your current financial situation, including income, expenses, and debts, and then outline specific, measurable goals that reflect your priorities.

Practice Mindful Spending

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Incorporating mindfulness into your financial habits can transform how you manage money. By consciously evaluating each purchase, you can determine if it aligns with your core values and long-term goals, reducing impulsive buying.

This practice fosters better financial decisions, increased savings, and improved financial security. Understanding the emotional cues that lead to unnecessary expenses allows you to address them effectively, minimizing the risk of falling into debt.

Mindfulness empowers you to make deliberate and informed financial choices, paving the way for a more stable and sustainable financial future.

Manage your Finances with Budget Templates

Mastering the art of budgeting is a crucial step in managing your finances. Creating a budget provides a clear picture of your income and expenses, helping you make informed decisions and avoid overspending. By sticking to a budget, you can save for future goals and reduce financial stress. To simplify this process, consider using budget templates, which offer a variety of styles to fit your circumstances. These templates are customizable, allowing you to tailor them to your unique financial situation and manage your finances more effectively—learn more about the benefits of using a budget template.

Embrace Zero-based Budgeting

Zero-based budgeting is a strategic approach that assigns a purpose to every dollar you earn, ensuring your spending aligns with your financial aspirations. By planning where each dollar goes—whether for essentials like housing and groceries or for savings and debt reduction—you can take charge of your financial destiny. This method is particularly advantageous for those with steady income, but it can be adapted for individuals with variable earnings by making monthly adjustments. Continue Reading…