All posts by Jonathan Chevreau

A decade of stagnation scarier than rising rates?

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McGugan
Ian McGugan/Twitter.com/

Good piece in the Globe by Ian McGugan posted Monday night. When I tweeted it out this morning, it was retweeted by some prominent Tweeters. McGugan — back to writing after years of being an editor at MoneySense and the Globe — suggests a major threat for investors is “the possibility that nothing happens … nothing as in a stagnant market, not just for a year or two, but for a decade or more to come.”

Citing the work of Boston-based Ben Inker (of GMO), McGugan says that if interest rates and bond yields remain stubbornly low, it may be hard for institutional investors (pension funds) to generate a return of inflation plus 5%. Stock investors need to be more cautious because the expected reward for taking on risk is getting muted. Long-term returns from both stocks and bonds may disappoint and investors may be lucky to get a 3.5% real return: net of inflation but before taxes and fees.

Scary indeed! But Inker doesn’t suggest parking in cash, seeing some value in the less obvious emerging markets, European value stocks and high-quality American companies.

Happy Money vs. Findependence

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text happy moneyWhile more and more financial pundits seem more inclined to retire the term Retirement, it’s by no means clear what the preferred term should be. Obviously I’m biased since I’ve invested six years in the term “Findependence,” culminating in this web site, the Financial Independence Hub. Over the weekend, we linked to Roger Wohlner’s site and his reposting of a one-year-old posting by me arguing the case for Financial Independence over Retirement. And last week, we posted financial planner Jenya Rose’s piece making the case for Happy Money over Findependence.
I then responded to that piece here at the Hub and now Jenya has reposted that piece over at her own site. She announced this on Twitter on Monday, with this gracious tweet:
responds nimbly to my post that argued is moot if you have Happy Income Touché! :)
Love that use of the hashtag in front of #Findependence!

Guerrilla Frugality & Froogers

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LunchEarlier this fall, I gave a short interview to robo-adviser/light advice firm NestWealth.com about financial independence, ETFs and the term I often use in Findependence Day: guerrilla frugality. You can find it here.

I first used the term “guerrilla frugality” in a personal finance column in the Financial Post. The idea was that early retirement (or findependence) requires a sort of super-frugality.

Guerrilla warfare and guerrilla marketing are both phrases already in the public lexicon. I reasoned that as consumers, we’re constantly besieged by the “guerrilla marketing” efforts of well-heeled advertisers and stealth marketers. So in order to spend less than you earn consistently, in order to save and invest the difference, you need to become super-frugal and practice “guerrilla frugality.”  (Note, it’s not “gorilla,” which some readers have mistakenly used in their correspondence with me. Gorilla is the ape!)

In the book, we talk (in war terms) of donning the battle fatigues of the “Frugality Guerrilla,” which we shortened to “Frooger.”

I’ve used the photo of a brown-bag lunch to illustrate this blog, since the character in the novel starts to brown bag it once he decides he wants to be “findependent” by age 50. In his guest post here at the Hub last week, millennial Sean Cooper also describes how he “brown bagged” it (among many other frugal endeavours) to accelerate his mortgage pay down campaign.

Formal definitions in the Glossary of the new ebooks

In the glossary to two new e-books published earlier this month, we offer these two definitions:

Guerrilla Frugality: A term invented by the author to describe the “warlike” mentality of being super-frugal in order to resist the strong consumption messages of America’s markets and advertisers.

Frooger (Frugality Guerrilla): An invented term in this book describing anyone highly committed to being frugal and saving money.

US fee-only financial planner Sheryl Garrett used the term “frooger” in both her foreword to the US edition of Findependence Day, published in 2013, as well as the new US ebook. Because it appears near the front, you can read Sheryl’s foreword free by clicking on the “Look Inside” feature on either the full book or the abbreviated e-book edition.

5 fears you shouldn’t have about retirement

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This weekend piece from USA Today — 5 Fears you shouldn’t have about retirement — seems worth of inclusion in this section, even though it talks about Retirement instead of Financial Independence, and the list consists merely of five items rather than ten.

Here we’ll just list the five main fears: click on the red type above to go to the full link.

1.) I won’t get Social Security

2.) I won’t have enough money

3.) The transition will be difficult

4.) I’ll be lonely and bored

5.) I’ll become invisible.

I can’t resist adding a bit of comment here. Take a look at the other thread posted this morning about whether Financial Independence is a better term than Retirement. It seems to me that a “Findependent” lifestyle is much less subject to the above common fears than those who are shooting for a traditional “full-stop” retirement in their mid 60s.

Feel free to post any other fears in the Comment section below!

Financial Independence or Retirement … Which is the Better Goal?

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wohlner
Roger Wohlner, TheChicagoFinancialPlanner.com

The Chicago Financial Planner — aka Roger Wohlner — ran a guest editorial written by me on his blog this weekend. If it looks familiar, it’s because the Hub ran it earlier in the weekend under a slightly different headline. Why Financial Independence is a Better Goal than Retirement. That blog was picked up a year ago by the Retirement and Good Living Blog.

I had also run a guest post on Roger’s blog a year ago after the U.S. edition of Findependence Day was published in 2013. After all, both the U.S. and Canadian editions of the book are set in part in Chicago!

After an exchange this weekend on Twitter about the above post, Roger offered to run the blog as a followup to the first one but indicated he preferred to run his own headline. He chose the one used in this post, which is a bit more neutral. So if you missed the earlier one,  please do check out Roger’s version. Apart from the headline, it’s also different because of an extensive preamble Roger wrote to introduce it, with comments about the “Findependence” movement to which this site, The Financial Independence Hub,  is dedicated.

Posting on Twitter as @rwohlner Roger is one of the most followed Certified Financial Planners (CFPs) in the United States. You can also find him listed under our “Getting Help” tab.

What do you think? 

As I posted this Monday morning, there were three comments about the article on Roger’s site. After you read them, it would be great to get some reader feedback about these two terms (Retirement vs. Findependence) here at the Hub. Also note another post from this morning: 5 fears you shouldn’t have about retirement. Read them over and ask yourself how many of those fears would still apply if you substituted the phrase “financial independence” for retirement.

While we’re still tweaking our discussion forums, registered users should be able to use the Comment feature below. If anyone attempts to do so and is having difficulty posting a comment, please email me at jonathan@findependenceday.com.