All posts by Jonathan Chevreau

Why you need to share financial responsibilities with your spouse

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Wealth PlanningHub Staff

From the American Family Insurance website, this article focuses on the importance of sharing budgeting and financial responsibilities with your spouse. In many relationships, it seems one party usually takes over much of the financial decision making– knowing important contacts, where money is kept and how it is spent etc. This article stresses the importance of making sure BOTH parties are on the same page with the family finances and, just as importantly, the family’s financial goals.

AmFam provides a few important steps to accomplishing this, beginning with talking to each other about things like saving, bills, retirement planning and debts.
Setting short- and long- term financial goals TOGETHER, knowing where to find your safe deposit box and combinations to the home safe, and finally making sure your loved ones know how to contact important financial contacts are the final steps to being on the same page as your spouse.

The article also discusses the importance of protecting your important papers by using preventative measures such as a safe deposit box, a fire-resistant home safe, a home filing system, and your attorney’s office to keep all your various documents safe.

Hub book reviews: Why the West is Losing the New Cold War with Russia

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By Jonathan Chevreau

Over the holiday break I’ve been reading about Russia and its president, Vladimir Putin, who came to power at the turn of the millennium.  As one of the three books flagged below points out, Russia is the only power that has the capacity to destroy the United States in a nuclear strike. Those who assumed the west “won” the Cold War when the Soviet Union collapsed in 1991 should keep reading. From Ukraine to the War in Syria and the battles over gas pipelines and the plummeting price of oil, Russia is very much in the news as we enter 2015. It’s a fascinating story in itself but investors will find it of particular relevance.

putinbookThe Man Without a Face

Before his surprise appointment by Boris Yeltsin, little was known about the former KGB (now FSB) operative, which is why Masha Gessen titled her 2012 book about him The Man Without a Face. Subtitled The Unlikely Rise of Vladimir Putin, the gutsy Moscow-based veteran journalist pulls no punches about the true nature of Putin’s Russia.

She traces Putin’s formative years in a chapter entitled “Autobiography of a Thug.”   Continue Reading…

And your first financial act of 2015 will be …

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Canadian Tax-Free Savings Account concept word cloud… contributing as much as $5,500 to your TFSA (Tax Free Savings Account) if you’re Canadian.  Launched at this time in 2009 and behaving somewhat like America’s “Roth” IRAs, it’s hard to believe this is already the seventh time you can contribute. By my calculations, that means $36,500 of collective contribution room plus any investment growth. That’s four years at $5,000 and now three years at $5,500: the maximum was boosted by $500 as an inflation adjustment for calendar 2013.

So if you’re one half of a couple, that means $73,000 in joint contribution room, even if you left it in interest-bearing investments paying almost zero. If you’ve been investing mostly in equities (either stocks or equity ETFs), it’s likely your TFSA had reached $40,000 or more by year-end, so it’s quite conceivable that some couples now have close to $100,000 invested in TFSAs between them.

Thursday, Jan. 1 was of course a holiday. While Friday, Jan. 2, 2015 is likely to be a quiet day for most, there’s no reason why you can’t contribute the next $5,500 to your TFSA that day, particularly if you use online banking and/or discount brokerages.

Good place for equity ETFs

What to invest in? In retrospect, those who invested in US investments with unhedged exposure to the US dollar would have done best up till now. Our daughter’s TFSA is more than half invested in US tech stocks and broader ETFs and the exposure to the greenback has boosted her TFSA to several thousand more than our own TFSAs with more exposure to the loonie.

Generally, I think a Couch Potato approach to investing in TFSAs makes the most sense, using broadly based ETFs from firms like Vanguard or iShares. Those closer to retirement may want a healthy exposure to Canadian dividends: foreign dividends will lose a bit of withheld tax in a TFSA and are better held in RRSPs for that reason. But for younger investors it may make sense to hold non-dividend paying US tech stocks in a TFSA for both the extra growth potential and the exposure to a strong US dollar that is showing no signs of weakening.

I still say the TFSA and Roths are the best games in an over-taxed town. While it’s true that many had hoped the 2015 limit would be more than $5,500, remember that unlike RRSPs, you can continue to contribute to TFSAs well past age 70 or 71: in fact, if you live that long you could still be contributing if you’re a hundred or more.

The key is to get the money in there as soon as you can and let it grow. And that means early January each and every year. While I think the benefit is particularly powerful for the young, they should balance the growth potential with debt repayment. There’s not much point in paying close to 20% a year in credit-card interest if you’re only earning 2% interest in a GIC or cash equivalent contained in a TFSA.

 

 

The Scourge of Dementia: Taking Charge of Your Health

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dougdahmer
Doug Dahmer

By Doug Dahmer

Special to the Financial Independence Hub

“Alzheimer’s disease – the degenerative brain condition that is not content to simply kill its victims, it must first snuff out their essence.” – Time Magazine, October 31, 2010

By age 85, an individual has a 50% chance of developing Alzheimer’s disease. It’s a matter of a flipping a coin. Chances are if you don’t have Alzheimer’s, you will be caring for someone who does.

 

The Grim Statistics about Dementia
• The incidence of Alzheimer’s disease is reaching epidemic proportions. Today, 500,000 Canadians have the disease or a related dementia.

• Alzheimer’s disease is considered the second most feared disease of aging.
• While 1: 11 people 65 years of age and older suffer from Alzheimer’s disease, 71,000 Canadians < 65 have the disease.
• It is estimated that one person is diagnosed every five minutes and it is projected that by 2035, 1.1 million Canadians will be living with Alzheimer’ or a related dementia. Continue Reading…

What if you make it to 95?

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Depositphotos_51530003_xsHere’s my column from the print edition of MoneySense magazine that’s being run online today at MoneySense.ca. Regular readers here at the Aging & Longevity section of the Financial Independence Hub will recognize several of the major themes.

In particular, they will note the phrase “Plan for Longevity, Not Retirement,” which I credit to Mark Venning of ChangeRangers.com, whose blog occasionally can be seen in this section.