Canada welcomed over 400,000 new immigrants in 2022, and that number is only expected to increase in 2023 with up to 505,000 new permanent residents.
These record immigration goals require critical planning from a workforce management perspective and should prompt employers to consider how digital transformation and embedded payment processing services can support the transition.
Organizations that intend to set new employees up for success must understand the responsibility to create a structure that supports financial inclusion: a vital consideration, especially amidst ongoing concerns of recession and inflation. If you are unfamiliar with the term financial inclusion, think of it as ensuring individuals have access to the tools and resources which enable them to have control over their financial health: a passion of mine as both a company founder and advocate for easy, affordable and accessible financial services.
Understanding the payment gap
For some of us, we have forgotten (or never experienced) the days of manually paying bills and waiting in line to cash a bi-weekly pay cheque; we’ve discounted the luxuries we have adapted to over the years thanks to automated technology. However, there is a disproportionate number of individuals in Canada, including newcomers, who still need faster and easier access to funds.
It is estimated that 10 to 20 per cent of Canadians are “unbanked” or “underbanked,” meaning they are not accessing the banking services available to them. These Canadians are often from low-income households, specifically those living in remote communities, including Indigenous peoples, people with disabilities and newcomers to Canada.
This means that some newcomers are still relying on cheque-cashing services and payday loans to fund purchases, minimize time gaps between pay periods, and manage their finances. While this is a short-term solution, it poses long-term challenges as cheques are sometimes difficult to deposit, easy to lose and prone to theft. Further, funds are not available immediately, do not allow for online purchases and are heavily reliant on slow payment processing practices such as mail delivery.
How organizations are advancing payments
Across all sectors and businesses, the goal is to ensure all Canadians have control over their financial health. Savvy employers recognize that outdated payment methods, such as cheques, are slowing down economic operations and can cause challenges for the unbanked and the underbanked. In response to this, these organizations are ensuring they welcome new immigrants with real-time payments to help newcomers get “banked” and join the economic ecosystem in Canada.
To help you take control of your finances and improve your credit score, we’ve gathered advice from 11 professionals across various industries. From embracing the snowball method to celebrating debt reduction milestones, these experts share their top strategies for reducing debt and boosting your credit standing.
Embrace the Snowball Method
Develop a Debt Repayment Plan
Make Incremental Financial Changes
Dispute Credit Report Errors
Diversify Your Credit Accounts
Use the Debt Avalanche Method
Avoid Excessive Hard Inquiries
Cut Expenses to Pay Off Debt
Seek Professional Credit Counseling
Request a Higher Credit Limit
Celebrate Debt Reduction Milestones
Embrace the Snowball Method
Debt can feel like a mountain, but there’s a strategy I’ve found effective called the snowball method. Here’s how it works:
Start by listing all your debts from smallest to largest. Forget about the interest rates for now, just focus on the amounts. Then, aggressively pay off the smallest debt while making minimum payments on the rest.
Years ago, I was juggling a couple of credit card debts alongside a student loan. I knocked off the smallest credit card debt first. Seeing that zero balance gave me such a boost, like a minor victory. This momentum propelled me to tackle the next one. I was making consistent payments, which positively affected my credit score. So, it’s a two-pronged approach: reducing debt while improving credit. It’s about gaining momentum and keeping it rolling, just like a snowball! –– Evander Nelson, NASM-Certified Personal Trainer, evandernelson
Develop a Debt Repayment Plan
Creating a debt repayment plan is one strategy for reducing debt and improving your credit score. So here you go. Make a list of all your debts, including outstanding amounts, interest rates, and minimum monthly payments. This will give you an idea of where to start.
Identify which debts have the highest interest rates or the largest balances. You should focus on paying off these debts first, as they cost you the most in the long run.
Develop a budget that allows you to allocate a portion of your income toward debt repayment. Cut unnecessary expenses and use that money towards repaying your debts. Pay more than the minimum monthly payment on your debts. By paying more, you’ll reduce the principal balance faster.
If you have multiple high-interest debts, you may opt for debt consolidation, where you combine your debts into a single loan with a lower interest rate. You can also negotiate with creditors for a lower payoff amount through debt settlement. –– Lyle Solomon, Principal Attorney, Oak View Law Group
Make Incremental Financial Changes
You probably didn’t suddenly fall deeply into debt. That means you’re unlikely to suddenly get out of it. Changing your spending and payment habits will gradually reduce your debt load while improving your credit score.
The first step is to not miss any payments. This can be easier said than done, but it’s key. You might not pay your credit card bills in their entirety each month in the beginning, but you should do whatever you can to exceed the minimum payments.
For other types of bills, it’s helpful to reduce your costs by lowering your level of service, for example by getting a cheaper cell phone plan.
None of these changes by themselves will magically get you out of debt, but they are all steps along the right path that will meaningfully lower your debt. — Temmo Kinoshita, Co-founder, Lindenwood Marketing
Dispute Credit Report Errors
One strategy that has proven quite effective in reducing debt and improving credit scores is disputing credit report errors. A couple of years ago, I noticed an unfamiliar charge on my credit report. Instead of ignoring it, I took prompt action to dispute it with the credit bureau.
I gathered all the documentation and, after some back and forth, they acknowledged the error and corrected it. This removal of an erroneous charge not only reduced my debt but also led to a significant improvement in my credit score. It reminded me that keeping a vigilant eye on your credit report and challenging any inaccuracies can play a significant role in maintaining financial health. –– Hafsa Unnar, Executive Assistant, On-Site First Aid Training
Diversify your Credit Accounts
One effective strategy I will recommend is diversifying your accounts. The idea is not to concentrate on a single type of credit but to have a mix of credit types, like mortgages, credit cards, and loans.
This approach shows your ability to manage different credit responsibly. I once faced a period of financial strain with overwhelming credit-card debt. Instead of sticking to paying off just that, I took out a small, manageable personal loan.
While it might seem counterintuitive to borrow more, the fresh line of credit actually improved my credit mix and overall score. Over time, this strategy, combined with prompt payments, helped me significantly reduce my debt and boost my credit score. –– Ben McInerney, Director and Founder, Home Garden Guides
Use the Debt Avalanche Method
Allow me to share the debt avalanche method and how it’s been my trusted ally on my journey toward financial freedom.
The secret is to prioritize your debts based on their interest rates. Identify the debt with the highest interest rate and focus all your extra resources on closing it. Do this while you continue to make minimum payments on your other debts. Continue Reading…
Today’s economic and job-growth landscape might have you turning to investing as a prominent option.
It takes patience and effort, but anyone can save up enough through intelligent investments.
How do you begin the Investment Process?
As of 2023, the average American makes around US$57,000 annually, which is lower for minority groups. Even if you’re careful with your spending, becoming financially independent with that salary can take a long time.
The average person from the United States only has about $5,000 in savings. Before beginning the process, you must consider how much money you can invest. The ultimate goal is financial independence [aka “Findependence” on this site], but getting there can take a while. Only put in what you’re willing to lose because things might not pan out as expected.
The formula for Findependence takes your yearly spending and divides it by your safe withdrawal rate to calculate your goal savings figure. Then, it subtracts the amount you’ve already saved and divides that amount by how much you can save each year. It’s only an estimation, but it can help you know how much your investments need to make.
What Investments should you Consider?
There are plenty of investment types. The stable ones often have lower returns and you usually need to take some risk to see a high reward quickly.
1.) Real Estate Investment Trust
A real estate investment trust (REIT) receives money from investors to purchase and manage property. Most generate revenue through rental income and pay dividends in return for the initial payment you made. It’s similar to owning by yourself, but you pool funds for the purchase and let someone else take care of the tenants. There are also other REIT types, so you have more options than rental properties.
2.) Stocks
The stock market usually requires more attention to detail because you must keep up with it. Anything from an upcoming brand deal to an overseas political event can affect this investment type. You should frequently check the stocks you hold and the businesses they belong to so you can quickly respond to changes.
The Canadian stock market differs from the United States version. Firstly, you need a brokerage account. Most brokerages charge about $5 to $10 per trade, with average commission fees of $6.95. It might seem minor, but paying to invest or shift your stocks around puts you at a loss before you begin. The flat rate cut you must pay can also make investing smaller amounts challenging because it takes a higher percentage the less you put in. Continue Reading…
Markets are hesitant, but large-cap tech has been resilient. Learn why large-cap technology with an income strategy can help investors now.
By James Learmonth, Senior Portfolio Manager, Harvest ETFs
(Sponsor Content)
After recovering from some of their 2022 shocks early this year, markets have been trepidatious through most of 2023. That recovery and volatility story, on paper, looks broad based. Between January and mid-May, the S&P 500 is up around 8-9%. The S&P 500 Information Technology index, however, is up over 25% in the same rough time period. That outperformance skews even higher when we isolate some of the largest names in the technology sector.
So while overall market performance this year has been steady, turning choppier since the US banking crisis began in March, large-cap tech leaders are doing what they tend to do: lead.
In a macro environment of market uncertainty, high inflation and tech outperformance, one strategy can give investors exposure to large-cap technology companies, while providing income and ballast against volatility.
Why Large-cap Tech has been a leader
To understand how a tech income strategy can help investors, it’s worthwhile to unpack what has made technology a leading sector so far in 2023.
Q1 earnings season for tech shed some light on the sector’s outperformance. Part of that performance is due to a more broadly positive market sentiment in 2023, compared to 2022, in addition to some recovery following the sector’s struggles last year. Notable, however, is the positive reception large-cap companies have received for their artificial intelligence (AI) strategies.
AI has been the hot new topic this year, and large-cap tech companies have been quick to capitalize on the rapid pace of innovation in this space. Whether they are innovating their own AI tech, or applying AI to new areas these companies are creating serious value for shareholders with this technology.
It’s worth emphasizing the dominance of large-caps in this moment, companies like Meta, Apple, and Microsoft. In recent history, major tech leaps have been associated with ‘disruption’ of traditional larger players. So far in the rise of AI we’ve seen the largest companies leading, demonstrating their value as innovators and appliers of innovation.
Why Volatility is persisting in the broader market
Despite all the positivity in large-cap technology, broad markets have been choppy this year. Most of their recovery took place in the first months of 2023, and since the onset of a US banking crisis in March market performance has been choppy up and down, aggregating out flat.
Macro forces are largely to blame. The banking crisis highlighted the ongoing impacts of rapid rate hikes by central bankers starting last year. Even as that hiking period seems to be ending, the consequences of those raised rates will be felt over the next several months. More recently, fears about the US debt ceiling have troubled markets while geopolitics continues to impact sentiment. Continue Reading…
In his role as head of research at Merrill Lynch, Bob Farrell established a reputation as one of the leading market analysts on Wall Street. In his famous “10 Market Rules to Remember,” Farrell summarized his insights on market tendencies.
One of Farrell’s rules states, “When all the experts and forecasts agree — something else is going to happen,” which embodies the essence of contrarianism.
In this month’s missive, I explore the roots and causal factors underlying Farrell’s warning, drawing on historical examples. I also illustrate the potential benefits and pitfalls of going against the crowd. Additionally, I demonstrate that market sentiment is currently approaching levels that have historically preceded broad market declines. Lastly, I suggest that there are specific areas where investors should consider trimming exposure, realizing gains, and paying the taxman.
There is no shortage of historical examples of “sure things” ending badly. In the late 1990s, following two decades of above-average returns, both institutional investors and consultants broadly embraced the dangerous consensus that future stock market returns would be about 11%. Dissenters and naysayers were few and far between.
The basis for these forecasts was the extrapolation of recent results. Stocks had been delivering average annualized returns of 11%, therefore it was assumed they would do so going forward – simple. Few investors contemplated the possibility that the past 15 years were anomalous from a longer-term perspective. More importantly, there was little concern that an extended period of above-average returns might have been borrowed from future returns by pushing up valuations to unsustainable levels.
The sad ending to this ebullience was the first three-year decline in equities since 1930. For the seven years ending March 31, 2007, following the market’s peak in early 2000, the annualized return of the S&P 500 was 0.9%. Importantly, these subpar returns encompassed a bitter and painful peak-trough loss of about 50%.
A similar occurrence of widespread adulation ending badly occurred only a half-decade later in 2005, when everyone “knew” residential real estate was a “surefire” way to amass wealth. Zealots justified unsustainable values with oft-cited mantras such as “They’re not making any more land,” “You can live in it,” etc. This blind optimism pushed real estate prices to unsustainable levels which all but guaranteed the subsequent collapse and some painful experiences for the “it can only go up” crowd.
Sorry, Beatles – All You Need is NOT Love
More often than not, what is obvious to the masses is wrong. There are valid explanations, both financial and behavioral, that cause the things which everyone believes to be true to turn out to be untrue.
In July 1967, the Beatles released their famous single All You Need Is Love. With all due respect to John, Paul, George, and Ringo, nothing could be further from the truth in the world of investing. Specifically, the more popular a particular investment becomes, the less its profit potential, if for no other reason than if everyone likes something, such adulation is likely to be reflected in its price.
In what is referred to as the bandwagon effect, investors often become enthusiastic about a particular investment or asset class after it has already produced strong returns. Believing that past outperformance is a sign of strong future returns, the herd then hops en masse on the proverbial bandwagon. This widespread fervor then causes prices to overshoot any rational approximation of value, thereby setting the stage for inevitable disappointment.
In the world of investing, “everyone knows” should come with a “buyer beware” warning. Investments that are heralded as sure things are bound to be fairly priced at best and often become dangerously overvalued. Great opportunities lead to great prices, which by definition means their greatness has been paid for in full, stripping them of their greatness. Conversely, it’s only when people disagree that opportunities to achieve above-average returns exist.
Risk: Reality vs. Perception
Managing risk is at least as important as (and inextricable from) achieving decent returns. Not only do irrational sentiment and expectations result in poor returns, but also give rise to elevated risk. Risk evolves in the same paradoxical manner as returns. As an asset follows the journey from normal to over-owned and overpriced, not only does its potential return deteriorate, but its risk increases.
When everybody becomes convinced that something will produce spectacular returns, then by extension they also believe that it involves little or no risk. This perception often leads investors to bid it up to the point where it becomes excessively risky. In contrast, when broadly negative opinion drives all the optimism out of an asset’s price, its risk profile becomes relatively small. Put another way, investment risk tends to reside most where it is least perceived, and vice versa.
In the world of investments, Bob Farrell trumps the Fab Four. Good investments are generally associated with skepticism, indifference, and even neglect, which sets the stage for high returns with lower risk. Inversely, widespread acceptance and adulation sow the seeds of high-risk and poor returns.
No Good Deed shall go Unpunished
As is the case with many aspects of markets, both timing and patience play an important role in contrarian investing.
Investment trends regularly go to extremes. It is this very tendency that results in calamities and opportunities. Unfortunately, life for managers is not as simple as buying cheap assets and selling their overvalued counterparts. As John Maynard Keynes stated, “The market can remain irrational longer than you can remain solvent.”
Not only can overvalued assets remain stubbornly so for extended periods of time but can become even more overvalued before they ultimately come back down to earth. By the same token, undervalued assets can remain cheap and become even cheaper before any payoff materializes. Sentiment can be a self-fulfilling prophecy for an indeterminable amount of time before reversing, turning previously favored investments into assets non grata, and the subjects of yesterday’s scorn into tomorrow’s darlings. Continue Reading…
Posted By 
