Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.
As healthcare costs continue to rise, finding ways to save on health insurance is becoming increasingly important.
In 2025, it is estimated that the average American family will spend over $25,000 a year on healthcare expenses.
This high cost not only affects individuals and families but also puts a strain on the overall economy.
Here are 7 tips to save on health insurance in 2025
Compare Plans
With the rise of online marketplaces, comparing health insurance plans has become easier than ever. Take the time to shop around and compare different plans from various providers. Consider factors such as premiums, deductibles, and coverage options before making your decision. You may find a plan that offers the same coverage for a lower cost.
Consider High-deductible Plans
High-deductible health plans (HDHPs) typically have lower premiums but higher deductibles. This means you will pay less each month for insurance, but will have to pay more out of pocket before your insurance kicks in. If you are generally healthy and do not require frequent medical care, an HDHP could save you money in the long run.
Utilize Preventive Care Services
Many health insurance plans cover preventive care services at no additional cost to the patient. Take advantage of these services — such as check-ups, screenings, and vaccinations — to catch any potential health issues early on and avoid expensive treatments in the future. Continue Reading…
Here’s a look at the different ways investors can express a view on Canada’s banking sector via ETFs.
Getty Images courtesy BMO ETFs
By Skye Collyer
BMO Global Asset Management
(Sponsor Blog)
The first week of December brought a flurry of earnings reports from Canada’s “Big Six” banks: Bank of Montreal (BMO), Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Scotiabank (BNS), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada (NA).
The best way to describe the results? A “mixed bag.” For example, BMO missed earnings expectations and increased provisions for potential loan losses.
Meanwhile, CIBC reported a jump in Q4 profits year-over-year and raised its dividend, a move mirrored by NA and RBC. BNS posted a rise in Q4 profits but warned of headwinds from a slowing economy and decelerating loan growth.
The biggest disappointment came from TD, which fell 7% intraday after adjusted earnings took a hit from penalties tied to anti-money laundering violations in the U.S. and a cap on asset growth for its U.S. retail banking business1.
What’s the takeaway for investors? Short-term fortunes can vary dramatically among the Big Six, so unless you have expertise in this space and the time to stay on top of developments, stock picking might not be ideal.
Historically, Canadian banks as a group have delivered strong earnings and dividend growth, making them a more reliable bet for long-term investors.
Instead of zeroing in on individual names, you might consider investing in the entire industry through ETFs. Here are three ETF options, catering to different risk profiles2 and objectives.
BMO Equal Weight Banks Index ETF (ZEB)
The flagship ETF for investors looking to express a neutral, bullish view on Canada’s banks — without worrying about which one will outperform — is the BMO Equal Weight Banks Index ETF (ZEB).
This ETF is a heavyweight in the space, with just shy of $4 billion in assets under management as of December 19, 2024, and it has been a staple for Canadian bank investors since its launch in October 20093.
It tracks the performance of the Solactive Equal Weight Canada Banks Index, which — as the name suggests — gives equal weight to all six banks regardless of their size. This approach is rebalanced periodically, introducing a natural “buy low, sell high” mechanic.
ZEB charges a 0.28% Management Expense Ratio (MER) and currently pays a 4.00% distribution yield4. What’s particularly attractive for income-focused investors is the monthly distribution schedule, compared to the quarterly payouts of individual bank stocks.
BMO Covered Call Canadian Banks ETF (ZWB)
If you’re seeking higher cash flow and don’t mind capping some potential share price appreciation, the BMO Covered Call Canadian Banks ETF (ZWB) could be an appealing alternative to ZEB.
ZWB holds the exact same six Canadian bank stocks as ZEB and is also well-capitalized, with $3.2 billion in assets under management as of Dec 19, 20245. However, it boasts a higher 6.67% distribution yield as of Dec 19, 2024. How does it achieve this? By employing a covered call strategy. Here’s how it works:
ZWB sells call options on the bank stocks it holds and receives premiums , which generate additional yield for the fund (with premiums taxed favourably at the capital gains rate).
In exchange, ZWB agrees to sell a stock at a set price (the strike price) if the stock’s market price exceeds that level by the option’s expiration. This caps the upside price appreciation of the shares over and above the selected strike price.
However, if the stocks stay flat or decline, ZWB keeps the premium and the underlying shares, adding a layer of enhanced yield while providing a volatility cushion.
While this strategy increases cash flow, it does come with trade-offs. Investors sacrifice some of their potential price gains for enhanced monthly cash flow. The fund charges a 0.71% MER as of June 30, 2023, reflecting the costs associated with managing the options. Read more about our covered call ETF methodology here.
BMO Canadian Bank Income Index ETF (ZBI)
Stocks aren’t the only way to invest in Canada’s banking sector. Banks also issue a variety of securities such as corporate bonds, preferred shares, and limited recourse capital notes (LRCNs).
LRCNs are hybrid securities that function like bonds but are designed to absorb losses in extreme scenarios, providing a layer of stability for the issuing bank.
These instruments often provide returns that are less correlated with bank stocks and typically come with lower volatility. However, accessing them as a retail investor can be challenging. That’s where the BMO Canadian Bank Income Index ETF (ZBI) comes in.
ZBI offers a convenient way to gain exposure to all these securities in a single ETF. As of Dec. 12, its portfolio is diversified as follows: 53.46% in corporate bonds, 26.61% in limited recourse capital notes, 10.83% in preferred stock, and 9.10% in non-viable contingent capital securities7.
Rated as low risk*, ZBI charges a 0.28% MER as of June 30th, 2023 and offers a 3.55% distribution yield as of December 19th, with monthly payouts. It’s an excellent way to complement common bank stocks with quasi-fixed-income exposure.
Want more insights on Canadian bank earnings?
Listen to our deep dive into the fourth quarter earnings from Canada’s Big Six, breaking down recent results and examining key economic variables. Listen here. Continue Reading…
John Tavares of the Toronto Maple Leafs is in a dispute with the Canada Revenue Agency that could impact pro athletes and high-income earners in general.
Financial advisor Darren Coleman, a cross-border expert, discussed the Tavares case in a recent episode of the podcast: Two Way Traffic. His guests were tax lawyer Shlomi Levy and tax accountant Kevyn Nightingale of Levy Salis LLP. The firm, which has NHL players as clients, is dedicated to U.S. and Canadian tax and estate planning for individuals, corporations, and those with cross-border interests.
In 2018 Tavares, then a US resident, left the New York Islanders to sign a seven-year, $77-million (US) contract with the Maple Leafs. For the first year of that contract his base salary was $650,000 (taxed in Canada at 53%) with $15.3 million a signing bonus (taxed in Canada at 15%). But now the CRA says that was all salary and wants back taxes. With penalties that comes to about $8 million US.
“The CRA says it was all employment income,” said Nightingale and his colleague Levy explained what a CRA win might mean. “It would make it harder for Canadian NHL teams to compete with American teams in lower-tax jurisdictions. But it goes beyond that.”
Today I’m joined by my good friends, Kevin Nightingale and Shlomi Levy of Levy Salis LLP. Kevin is one of the top cross-border tax accountants and Shlomi one of the top cross-border tax attorneys in North America.
We’re going to talk about the John Tavares case and his tax issues with CRA. It’s getting a lot of press and attention. Tavares of the Toronto Maple Leafs is a hometown boy and it was a big deal in July 2018 when he went into free agency and signed with the Maple Leafs a seven-year contract that would have paid him $77 million [US] and $15 million of that was an upfront signing bonus.
Six years later, CRA wants millions of dollars of unpaid taxes because of the way the deal was structured. This can have an impact on how NHL teams recruit and could apply to every sports team, but also in the corporate world when trying to bring talent to Canada. I know you guys have players as clients but do not represent Mr. Tavares.
Kevyn Nightingale
The main issue is it’s expensive to get athletes to come to Canada. The tax difference between Canada and the U.S. is wide and has been widening over years, especially since 2015 when the then new Liberal government decided to raise tax rates, particularly on high earners, and they were thinking of your home-grown high earners. But in a world where talent is mobile, particularly in things like sport, if you raise tax rates you lower their effective income and what they care about is the after-tax income.
Compare coming to play for the Toronto Maple Leafs, where tax rates are 53.5% on the vast majority of their income, and going to Florida where the tax rate is 37%. That makes a big difference. Now there are other states where there are significant taxes. California is getting close and New York City is getting close, but there are ways of dealing with that in the US that still make the tax rate effectively lower for many players.
Darren Coleman
So the structuring of the Tavares contract was trying to give him some tax benefit by structuring a signing bonus vs. a salary. Shlomi, can you dig into why that mattered?
Shlomi Levy
Shlomi Levy
Tax paid in the state of New York isn’t credited against the Canadian side, but is based on the Canada-US tax treaty and the potential tax savings were probably $1.3 million. But now, if CRA gets its way between penalties and interest six years down the road, it would be probably three or four times that amount in payment.
So you have to question the strategy. One of the things I like to discuss with clients and athletes is what’s the risk and what is the reward vs. the risk? You want to make sure people take those calculated risks. God knows how long this may take to settle and it might just not be worth it. I represent north of 50 NHL players come training camp and these guys can’t be bothered with legal discussions or tax discussions. They’re focused on playing hockey. This is going to be a huge distraction for John and his family if it doesn’t get settled quickly.
Kevyn Nightingale
He only had to pay Canadian tax of 15% on the signing bonus portion that he received prior to coming to Canada.
Darren Coleman
So I think his assumption was he was not a resident of Canada. I think that’s what CRA is challenging.
Kevyn Nightingale
He was by all accounts a non-resident of Canada because he was living in New York and playing for the Islanders, and had not yet come to Canada when he got this portion of the signing bonus. Now he ultimately did move to Canada, but that was after the fact. So we’re only talking about the part that he received prior to coming to Canada. The deal is if you have a signing bonus and it’s properly authorized as a signing bonus, and you’re a non-resident of Canada and it’s paid by a Canadian team, your Canadian tax goes down from 53.5% to 15% so that is a sizeable savings. As a resident of the US he has to pay US tax on his worldwide income. And he’s paying US tax, and he’s paying New York state tax because he lives in New York state. Now he will get a credit for the Canadian 15% but he’s still paying effectively US and New York rates that may go as high as 45% or even more. So Shlomi is right. The savings are about a million dollars.
Darren Coleman
The difference between the tax rate and what the Canadian tax rate would have been?
Kevyn Nightingale
Yes, he would have been ahead of the game, but not by a huge amount. It’s not like someone who’s living in Texas or Florida, which many athletes do. But CRA says we don’t care what the US aspect is. We lost the difference between 53.5 and 15. That’s what we care about.
Darren Coleman
You mentioned earlier it’s the characterization of a signing bonus. Is that also part of what CRA is saying? That it wasn’t a signing bonus? You received it as income?
Kevyn Nightingale
CRA is arguing that it’s really employment income but you call it a signing bonus. We’re still going to call it employment income. One of the factors that goes into it is whether the employee, in this case, the athlete, has to repay any of it if he doesn’t actually show up to work. So, injured, retired, not feeling like working that kind of stuff. Well, apparently that is not at issue here because if Tavares did not show, he would not get the signing bonus. So that argument is a loser for CRA because they just don’t have the facts on their side.
Shlomi Levy
The nature of the NHL contract is you signed a contract that’s guaranteed and you’re owed the money.
Darren Coleman
Where do you think CRA has ground to stand on this one?
Kevyn Nightingale
CRA is saying it’s just so big compared to everything else. The signing bonus in total is $70 million, almost $71 million and that cannot not be employment income. 71 million of the 77 million has to be employment income and that’s it.
Darren Coleman
How does this affect how you negotiate or how you talk to players about this?
Shlomi Levy
Until there’s a judgment on this, it definitely puts people on their back feet. I want to say only the first 15 million of the signing bonus is being contested here because the following bonuses were paid to him as a Canadian citizen and tax resident. So it’s not really contested. The bulk of the work I’ve done is mostly with Canadian athletes who are resident here. So we haven’t had any of these issues. We do deal with a lot of Canadian athletes who married American girls, so the complexity is still there, but I would say that a lot of free agents, especially when it comes to baseball, and even the CFL in Toronto, are going to be looking at this carefully.
Darren Coleman
Because as a group they have more Americans moving to Canada than hockey players, right?
Shlomi Levy
Correct. Look at Toronto. You’ve got Austin Matthews, who’s an American citizen and he’ll probably straddle that line. He’s never considered a Canadian tax resident. You’ve got some Europeans with Nylander in Toronto as well. Big contract, big signing bonuses. So a lot of people are going to be watching this, and the strategy for Canadian teams might change significantly depending on what this judgment produces.
Darren Coleman
I think fans are watching this because the tax thing can really affect the fortunes of how teams are going to be able to produce. Because if they can’t, if they’ve got such a huge tax hurdle, how are we ever going to recruit top talent if this is an issue?
Kevyn Nightingale
It is an impediment to hiring people, to doing business anywhere if you don’t know what the answer is going to be.
Shlomi Levy
In the US your individual tax rates at the federal level are low, and if you’re lucky enough to play in a state like Florida or Texas where there is no state tax, your maximum tax exposure is 37%. Now assume these guys are all making over a million bucks, so 37% versus 53.5%. There was an issue a few years ago in a Canadian team where a player was negotiating as an unrestricted free agent and ended up signing the same numerical deal, but one season less, with Dallas vs. the Canadian team, and everybody went up in uproars.
The argument is very simple. He was going to make net the same amount of money playing one year less. Agents and players are a lot more sophisticated. There’s a lot more that goes into negotiations, and not just the numerical value. 100 million in Montreal or Toronto is easily 85 million in the US, and add to that life, weather, taxes and probably paying less for the same amount of net money. At the end of the day, these athletes are phenomenal individuals. They’re well-tuned machines, but they also have an expiration date on their career, and they’re trying to optimize it.
Kevyn Nightingale
This is something many governments have trouble coming to terms with, and that is there are limits to tax. And this is the thin edge of the wedge, where you see at the top end, the talent is mobile. And you can’t just say, well, we’re going to raise their tax rates from 45% to 55% and we’re going to get 10 extra points. No. People respond. People respond to incentives.
And if you tell them you’re going to pay that much more here, they’ll say, I’ll go somewhere else where I can do better on a net basis. And that is not just the NHL and NBA and football and basketball and baseball. It is every sport, but it’s also more importantly in business. Business is more and more global, and employment is more and more global at the top end. Major Canadian corporations are hiring a CEO. They’re not just looking at Canada. They’re looking to the US as well. If you’re a new potential CEO coming up from the States you say, Well, I understand your taxes are that much higher. Pay me that much more if you want me. That makes the Canadian company much less competitive.
Darren Coleman
You run into a problem. One, it’s hard to recruit people in the lower-tax jurisdiction to come to our higher-tax jurisdiction. And then we have the way Canadians are taxed. I want to get into this because a lot of people don’t know this nuance. It’s easier for Canadians to leave our tax system. So we not only have trouble recruiting brainpower, but we also can lose talent and brainpower. It’s surprising to me how many people are surprised by this and it’s the difference between how Americans are taxed, which is on citizenship, and Canadians are taxed on residency.
Shlomi Levy
I want to go back to a statement made a bit earlier that one of the other big concerns we should have as Canadians is the attitude of our current government just grabbing as much as they can get. You look at the way the treaty works, and very often there’s a bit of IOU, you know, Canada to the US and US to Canada. It all works on an IOU system and it worked just fine until this current government came and started piling up all kinds of new catches and new grabs to make it much more difficult.
And the recent legislation they pushed forward about businesses and foreign affiliates doing business and foreign tax credits going up and down and the imposition it wishes to impose on dividends from a foreign affiliate and an extra 22% in Canada, and then one day issue a credit on extractions of dividends from that company. These are cash grabs that are telling a guy sitting in his office thinking about expansion to the US and thinking that he’s going to use corporate money and get that taxed like an individual. Next thing you know he says I’m not going to do it. And it takes away from our ability to expand our business and ideas into the US. Our Canadian government just wants to tax the jitters out of us. Continue Reading…
Wealth-building plays a critical role in securing your financial future. More than just having enough money to cover day-to-day expenses, it’s about creating a financial cushion that allows you to navigate life’s uncertainties and enjoy peace of mind in the long term.
Whether your goals are to own a home, provide for your family, or retire comfortably, it’s essential to take steps to build your wealth as soon as you can. Follow the smart financial strategies listed below to help you set a solid foundation for achieving your long-term wealth-building goals.
Start the Process by Creating a Realistic Budget and Sticking to it
Your budget is the cornerstone of your financial plans. As such, it’s important to set a solid foundation for achieving your long-term goals by putting together a realistic budget that reflects your financial needs and capabilities. This means keeping a record of your expenses, categorizing your spending into essential and non-essential items, and using these details to plan your future spending. Having a clear picture of where your money goes can help you identify areas where you might be overspending and adjust your budget if needed. Once you’ve established control over your finances, you’ll have more room to save and invest for the future.
Build an Emergency Fund that can Sustain your Household for several months
There are circumstances, such as illnesses and accidents, that may require you to immediately shell out money or disrupt your source of income for some time. These can quickly derail your finances if you’re not adequately prepared. That’s why building an emergency fund is crucial. Start as early as possible to grow your funds; open a bank account with high-yield savings, such as Maya’s Personal Goals or Time Deposit Plus that let you earn at least 4% p.a. and up to 5.75% p.a., respectively. Aim to set aside 3 to 6 months’ worth of living expenses in such accounts. This fund will serve as a financial buffer so that you won’t need to rely on credit cards or loans when an emergency arises. Having an emergency fund gives you a sense of security and keeps your wealth-building efforts on track.
If you have Debt, make a Priority of Paying off High-Interest Debt First
Debts, particularly high-interest debt like credit card balances, can severely hamper your ability to build wealth. Focus on paying these debts first to prevent your balance from ballooning even further. If you have multiple high-interest debts, consider using either the avalanche method (pay the debt with the highest interest rate first) or the snowball method (start with the smallest debt for quick wins). You may also want to consolidate debts so you only have to worry about one amount and one deadline. Once you’re free from high-interest debt, you’ll have more flexibility to redirect your money toward savings and investments that grow your wealth.
Look into Investing in Retirement Accounts as early as possible
Even though retirement may seem too far into the future, it’s never too early to plan for it. In fact, the sooner you start investing for retirement, the better. Aside from government-backed retirement plans like the Social Security System (SSS) and Personal Equity and Retirement Account (PERA), you can also put some of your money in investment products like time deposits or stocks. Consistently contributing to these accounts over time allows you to benefit from compound interest, which grows your investments faster. Prioritize retirement contributions as part of your wealth-building strategy to ensure that you’ll have a secure financial future when you’re ready to stop working.
Diversify your Investments to Control Risk and earn Long-Term Returns
Instead of putting all your money in one place, spread it across different types of investments, such as stocks, bonds, mutual funds, or real estate. Each type of investment behaves differently under various market conditions, so diversification helps protect your wealth from sudden market downturns. If you’re new to investing, consider working with a financial advisor or using investment apps that provide access to diversified portfolios with lower entry points. Continue Reading…
Retirement planning may not be at the forefront of every twenty or thirty-something’s mind. However, starting early could mean the difference between a retirement spent in comfort or want. With social security’s uncertain future and the rising cost of living, the sooner you embark on saving for retirement, the better. Managing your retirement savings wisely will ensure a peaceful and fructiferous future. Learn the strategies now for building a substantial 401(k) balance [United States.]
Image by Adobe Stock/ juliasudnitskaya
By Dan Coconate
Special to Financial Independence Hub
Today, a robust 401(k) plan is more crucial than ever for securing your retirement. Understanding how to manage your contributions and investments effectively can set you on the path to Financial Independence. As the traditional employer-sponsored pension system becomes less common, individuals are increasingly responsible for their retirement savings.
By taking advantage of employer contributions, understanding investment options, and reviewing your plan, you can cultivate a retirement savings strategy that prepares you for the future and helps you build financial confidence. These strategies for building a substantial 401(k) balance will ensure it becomes a strong pillar of your retirement portfolio.
Choose the Right Investment Options
Most 401(k) plans offer various investment options, and selecting the right mix can directly impact your retirement savings. Investments fall primarily into stocks, bonds, and mutual funds or ETFs, all carrying different risk levels and potential returns. A balanced portfolio that reflects your risk tolerance, investment timeline, and financial goals can better weather market fluctuations. Review your options regularly and consider rebalancing your portfolio to adapt to any changes in the market or your personal situation.
Gradually increase Contributions
If you’re hesitant about contributing a significant portion of your salary to your 401(k) from the outset, consider implementing a gradual increase plan. Many employers allow you to set up automatic annual increases in your contribution percentage. Taking advantage of raises or bonuses to boost your contributions ensures that you consistently increase your savings without feeling the financial strain of a sudden change.
Regularly Review your Plan
Conducting annual reviews of your 401(k) to ensure it remains aligned with your financial objectives is vital. Life changes, such as starting a family or changing careers, can shift your needs and goals, requiring adjustments to your retirement strategy. Continue Reading…
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