Hub Blogs

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.

Best Investments across different Age Demographics

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Special to the Financial Independence Hub

Investing is a vital part of a person’s financial life. Whether you’re trying to aggressively grow your assets or prepare for retirement, investing is crucial for reaching your goals. There are several different types of investments that you can make throughout your lifetime, depending on your financial situation and what age demographic you’re in. Investment strategy can and should change as you get older, as your focus begins to shift from your career, to retirement, and beyond. Let’s take a look at three different age demographics and some investment tips for each.

20s –30s: Career Focused

At this age, you may be fresh out of college with a heavy amount of loans to pay off while starting at an entry level position with low income. In this situation, your first thought may not be to start investing your money and saving for retirement. This is understandable, but it’s also a mistake. Investing at a young age will better set you up for the future. Start to put some of your money into a retirement account like a Roth IRA. The IRS allows you to put up to $6,000 a year into your Roth IRA. If your company has a 401(k) plan, that’s another easy way to start saving for retirement especially if they’ll match a certain percentage of your paycheck.

Another popular way of investing is in real estate. Unlike stocks, you can assess its value and what profit it will bring you prior to investing. Especially at this young age you can begin to work on improving your credit score so that you’re able to buy homes and earn passive income. If you get lucky enough to find a home or apartment for a low selling price, you can resell or rent it out to make a large profit. Looking for investments that are low risk and high reward may be best for this age, especially when you don’t have a high amount of income.

40s –50s: Retirement Focused

You’re heading toward retirement age, most likely deep into your career, and have a significant increase in your income. Investing in more stocks and bonds is a great way to earn extra cash to prepare for your coming retirement. Along with that, your Roth IRA and/or 401(k) account most likely have a hefty amount accumulated. It’s suggested that you prioritize saving over spending at this age as it can benefit you immensely once you retire. Continue Reading…

11 practical ways Retirees can learn more about Personal Finance

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What is one way a soon-to-be retiree can learn more about personal finance?

To help retirees further their education on personal finance, we asked financial experts and business leaders this question for their best insights. From finding targeted podcasts to taking a class, there are several practical ways for a retiree to learn more about personal finance.

Here are eleven ways retirees can learn more about personal finance:

  • Find Podcasts targeted at soon-to-be Retirees
  • Use Online Resources
  • Look to a Financial Planner for Guidance
  • Lookout for Blogs
  • Join a Group
  • Assemble a Support Team
  • Speak to the Professionals
  • Non-profit Organizations
  • IRS Elderly Benefits
  • Read, Read, Read
  • Take a Class

Find Podcasts targeted at soon-to-be Retirees

There are plenty of great podcasts out there sharing incredibly useful information on retirement, although many these days are on retiring early, which may or may not be you depending on where in your financial journey you are (not to mention your age range!)

This is why it can really help for soon-to-be retirees to find podcasts targeted at their specific circumstances. One good example is Finishing Well with Hans Scheil, which covers all sorts of topics on retirement planning. You may also want to consider the podcast Retirement Answer Man hosted by Roger Whitney. A Certified Financial Planner, Whitney covers both the money-related aspects of retirement as well as some other questions on this stage of your life that you may have. –– Anna Barker, LogicalDollar

Use Online Resources

There are a number of online resources a soon-to-be retiree can make use of in preparation for this next big step in their life. It’s never too late to learn or improve your personal finance skills. I would urge retirees to get on YouTube and search for personal finance videos aimed at retirees. There is, no pun intended, a wealth of information in these videos about what steps to take and which actions to avoid to keep your head above water as you enter retirement. — Carey Wilbur, Charter Capital

Look to a Financial Planner for Guidance

The best thing you could do for yourself in preparation for retirement is going to a financial planner who can help you organize and explain your financial situation. Hopefully, you’ve been preparing for retirement in the form of something like a 401k, but if you haven’t, a financial planner can help to explain your options: which is what you need plenty of. The financial planner will likely emphasize the realm of tax efficiency, which is typically what matters most to people who are retired. If you want to do some independent research, I would look into literature discussing tax-loss harvesting, rebalancing your portfolios, and back-door Roths (while they last). — Tom Mumford, Undergrads

Continue Reading…

Is it ever too early to start thinking about Retirement Income Planning?

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By Ian Moyer,

Co-founder & President of Cascades

(Sponsor Content)

We normally think about it in the few years leading up to the “Retirement Date,” but should we be crunching the numbers at other times?

The short answer is yes and here is when: preceding a change in career or a shift to part time, following a large increase or decrease in annual income. You may also wish to take the measure of a move from salary to self-employment, or upon the death of a spouse or following a divorce.

It is important to keep in mind the difference between Retirement Planning — the amount of money you will have accumulated by a specific retirement date — and Retirement Income Planning, which is the income that you will derive from that accumulated cash. Those are the numbers that really matter and represent the income you will want to live on (and sustainably so) for the rest of your life.

The following commentary is from a user of Cascades software and highlights her specific number-crunching situation:

I am currently in my early fifties, but I had already been worrying for several years about how much I needed for my retirement and how best to plan for it. As academics, we often assume our pension is sufficient: if we are even tenured, as many of us are not; if we have been working at a decent salary for many years, as many of us have not; and if we have been taught to think about or plan for retirement, as most of us have not.

As I spoke to my colleagues, I began to realize that the problem of not planning was widespread. One colleague (and friend) told me she did not even know what an RRSP was. Another colleague and friend revealed she never considered saving money in a TFSA. Still another had no idea what her pension was because she had worked at four different Universities, and so her pensionable earnings were scattered across these institutions.

Going to the bank to gain some insight and assistance was not much better. The bank, one of the largest in Canada and the one with which I have dealt since I was eighteen years of age, could not have been more disappointing. Most institutions are comfortable taking your money to invest it, but they are considerably less interested in helping you plan what to do with it. It’s not just an egregious oversight, it’s bad customer service. So, the bank with which I work did some preliminary planning, but it was largely unsatisfactory. How would I know how much I would have upon retirement? What were the sources of income I could rely on? How long would the money I saved support me? I still had no idea. Continue Reading…

Why Innovation promises to be a consistent tailwind for Healthcare sector leaders

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Photo courtesy Harvest ETFs/Shutterstock

By Paul MacDonald, CIO, Harvest ETFs

(Sponsor Content)

As the MRNA winners of the COVID-19 vaccine race turn their sights to illnesses like shingles and the flu, investors and analysts are renewing their focus on innovation in the healthcare sector. If a technology like MRNA can conquer endemic illness and even go on to combat cancer, what other lifechanging innovations could the healthcare sector provide us with? What opportunities could those innovations open for investors?

The healthcare innovation story is wider, deeper, and richer than MRNA to me. The healthcare sector has been innovating since human beings first started to treat illness. It is a sector built on the use of the scientific method to develop novel solutions to new and ancient problems of human health. Healthcare companies, by nature, push the limits of human knowledge to heal people. That means innovation in the space is a near-constant.

In the healthcare sector large-cap companies play an outsized role. These firms have the scale to innovate a wide range of products and services on their own and are well positioned to capture value from innovations initiated by smaller-scale companies. Our view that these large-caps serve as the fulcrum of healthcare innovation underpins the Harvest Healthcare Leaders Income ETF (HHL).

When we think about large-cap healthcare, we have to see these companies as innovators. They are always innovating on their own, but they’re also the companies that have the ability to extract value from innovation by smaller-cap firms in the sector.

Within HHL we own the dominant companies in the sector, companies with tremendous R&D platforms across subsectors.

How one ETF captures a universe of healthcare innovation

Those subsectors include pharmaceutical companies finding new avenues for MRNA, but they also include the biotech companies like Abbot Labs using phones to better monitor diabetes patients and the med-tech companies like Stryker developing robotic surgery assistants to power less-invasive operations with better outcomes. They even include healthcare providers like United Health, using and developing new technologies to provide better and more efficient patient care. HHL is set up, through a basket of 20 of the best large-cap healthcare companies, to capture healthcare innovation in almost all its forms.

That diversity of innovation is why a large-cap ETF like HHL is so well positioned in the space. We should emphasize that healthcare innovation will generally follow one of two paths. The first is that headline-grabbing, game-changing, blockbuster innovation. That would happen when one company is able to completely change the outcomes for an illness or condition that hasn’t seen much significant improvement. A major leap in Alzheimer’s treatment would be one such blockbuster. Continue Reading…

Book Excerpt: Lessons on Mastering Money

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By Fred Masters

Special to the Financial Independence Hub

We are in the midst of a personal financial crisis in this country from coast to coast to coast.  The Bank of Canada has been sounding the warning alarm for years that Canadians are taking on way more debt than they can afford.  Many are suffering in silence since we just don’t talk about money, and we certainly don’t teach about it.

The goal of my book Lessons on Mastering Money is to empower you – Canadian adults in their 20s and 30s ─ with the core personal financial literacy knowledge needed to control your money on your life’s personal financial journey.

No one should care about your financial well-being more than you.  Delegating your financial decision-making to another person, such as a family member or an advisor, leaves you financially blind.  You need to be able to ask the right questions and stay involved in the conversations; you need to be at the table so as to understand the decisions.

Success in any organization can often be traced back to strong leadership.  Surely, you have witnessed this in your life in countless settings.  Once you view your financial life as a very, very important business, then you will instantly recognize that you must put steps in place to financially prosper. Look in the mirror: the person staring back at you owns your financial success.

Mere Hope isn’t going to cut it

By the way, ‘hoping’ for the best financial outcome isn’t going to cut it; you need to understand the financial game because you play it every day of your adult life, and this is one game that we can all win!

There are many personal financial hurdles to overcome in life.  Three of the biggest financial tests are saving enough for retirement, saving for the kids’ education and solving the housing-affordability puzzle successfully.  These three are crucial.  You MUST pass all three of these major financial tests or you will struggle mightily with your financial life: getting just one right or even two of the three right is just not good enough.

You need to get 100% right on this test, and this book provides help with all three of these pieces.  Saying that Canadians struggle with debt is a total understatement; there’s help here for this too.  A recurring mistake that many Canadians make financially is leasing a brand-new car: there’s guidance around this also.  Getting a handle on how you think about and approach your personal finances – your money mindset ─ is really bedrock learning; all good financial decisions lead right back to this. The book begins by teaching you these key money mindset lessons.

6 major thematic sections

The format of the book aligns with the biggest personal financial hurdles that Canadians face.  It is broken down into six major thematic sections: Continue Reading…