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.

Debt lifts Gold

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By Nick Barisheff

Special to the Financial Independence Hub

The world is awash in debt, an immense, unfathomable ocean of financial obligations. The stack of IOUs is so enormous, the balances so large, they will never be fully settled without dreadful consequences to the global economy. This tsunami of debt was unleashed in 1971, when Nixon ended the backing of the US dollar with gold.

Since 1971, US debt and gold prices have increased greatly. Traditionally, rampant increases in US debt occur when trying to pull the economy out of an economic downturn as displayed in the spikes that occurred in 2008 and 2020.

Considering the amount of debt that has already been taken on to combat the pandemic — combined with the rising uncertainty involving vaccinations and new strain variants — it can be anticipated that the worst is yet to come. As Democrats push towards passing an additional US$1.9 trillion stimulus package, governments are willing to take on previously unforeseen levels of debt to prop up the economy during the pandemic. This could lead to a promising future for the price of gold.

Manipulation of Precious Metals markets

This divergence has been caused by manipulation of precious metals. A great deal has been written about this and one of the best books on the subject is Rigged – Exposing the Largest Financial Fraud in History, by Stuart Englert.

Price manipulation never lasts, and when it ends there always tends to be a reset to inflation-adjusted levels. The biggest questions are: when and how high will gold and silver prices rise?

However, even with manipulated markets precious metals have outperformed traditional financial markets and have generated over 10% returns in all currencies over the last 20 years.

How soon precious metals rise to normalized levels depends on how rapidly governments and central banks inundate the world with debased dollars and other fiat currencies, and how quickly individuals and institutions lose faith in those increasingly worthless debt-based currencies.

The US national debt alone is nearly US$28 trillion. This doesn’t include the $159 trillion of unfunded liabilities, which brings the total to US$187 trillion or about US$480,000 per American citizen. This number also doesn’t include the $21 trillion in unaccounted federal expenditures discovered by Prof. Mark Skidmore and his economic students at Michigan State University.

Global debt hits 365% of World GDP

Global debt hit $277 trillion last year, or 365% of world gross domestic product (GDP). Public debt as a percentage of GDP has soared to unsustainable and perilous levels. The US debt-to-GDP ratio hit 136% last year. Canada’s debt-to-GDP ratio increased by nearly 80% through the third quarter of 2020, the highest rate among developed nations.

When you translate these incomprehensible and burgeoning debt totals into per capita obligations, it is obvious that they will never be repaid. They can only be inflated away.

Combined with hundreds of trillions in unfunded government liabilities, swelling debt and unregulated financial derivatives form a bottomless abyss that eventually will engulf nations and swamp the entire financial system. Little wonder that in 2002, billionaire investor Warren Buffett dubbed derivatives — which essentially are debt instruments used as collateral to take on more debt — “financial weapons of mass destruction.” At that time derivatives totaled $100 trillion, whereas today they are in excess of $1 quadrillion.

Socialists maintain public debt is acceptable when borrowing is for the common good, and Modern Monetary Theory (MMT) advocates claim unlimited government spending is not a problem. They believe governments can create an infinite amount of currency to fund social services and public works projects. They fail to recognize that debt is not wealth and increasing the currency supply decreases its value and produces price inflation.

Continue Reading…

How to age gracefully

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How can you age gracefully? What exercise, diet, or wellness tips should people in their 50s follow?

To help those in their 50s age gracefully, we asked business professionals and marketing experts this question for their best wellness tips. From meditating every day to keeping up with good dental health, there are several great exercise, diet, and wellness tips that may help you age gracefully.

Here are 10 exercise, diet, and wellness tips for people in their 50s:

  • Give Yourself Permission to Take Care of Yourself
  • Mediate Everyday
  • Give Your Body What It Loves
  • Customize Your Routines
  • Focus on Mental Wellness
  • Minimal Processed Food
  • Get Some Fresh Air
  • Dental Health
  • Realistic Goals and Consistent Action
  • Low Impact Workouts

Give yourself permission to take care of yourself

Adopting healthy habits is key to a lifetime of health and wellness.  Finding ways to reduce stress such as meditation or even a walk and focus on a clean diet that energizes rather than slows you down. In addition to physical exercise, exercising your mind is key to aging gracefully. Reading often, learning new skills and information, social interaction, and even using meditation to clear your mind. Giving yourself permission to take care of you, is key! — Carol Bramson, Side by Side

Meditate every day

It may sound cliche, but meditation is the best way to age gracefully! I am a firm believer that if you want to look better on the outside, you must start on the inside. By meditating every day, you can cleanse your mind and rid yourself of the stress and negative thoughts that weigh you down. You will be surprised by how much of a difference mediation will truly have on your skin, posture, and overall glow: it is the best-kept beauty secret since ancient times. — Nikitha Lokareddy, Markitors

Give your body what it loves

Although I am not in my 50s, I have found that as I have matured, I have gotten to know myself and my body a lot better! For me, aging gracefully is all about simplicity and consistency. I know what foods my body loves, what workouts improve my physical and mental strength, and what products I can’t live without. All in all, my tip is to stick to what you know. — Vanessa Molica, The Lash Professional

Customize your routines

As someone who works in healthcare, I have a unique perspective on how you can age gracefully inside and out! Many people think that copying the workout and skincare routines of beautiful celebrities will do the trick, but the key is to customize your routines for your body. The only way to do that accurately is to consult professionals. Dermatologists, nutritionists, and trainers have the tools and knowledge to ensure that your age is nothing but a number! — Dan Reck, MATClinics

Focus on Mental Wellness

Whether that means tackling daily brain exercises or relaxing your mind on a recreational vacation, focusing on mental wellness is one critical area for people to focus on in their fifties. Keep the mind clear and fresh, because the mind leads the body. — Randall Smalley, Cruise America

Minimal Processed Food

Staying active and reducing stress are two key elements that contribute to aging well. When it comes to diet, there’s a large fixation on certain “superfoods” that are key to longevity. In reality, eating a variety of wholesome, minimally processed foods is key to keeping down inflammation in the body and aging well. Because the eyes can show acute signs of aging, opting for a safe and effective treatment like an eye lift is a great way to age with grace. — Michael Herion, Carrot Eye Center

Get some fresh air

As you get older, lots of people lose their sense of adventure and stop enjoying all the great outdoors have to offer. Regardless of whether you prefer a light hike, a horseback ride, or a day on the water fishing, get outside! Continue Reading…

Valentines Day: Is it easier to find true love or achieve financial independence?

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According to Love and Money – a survey from TD exploring the financial behaviours of more than 3,000 married, in-a-relationship or divorced North Americans – half of Canadians surveyed (49%) believe it’s easier to find true love than financial success.

However, that’s not to say those Canadian couples surveyed aren’t feeling cautiously optimistic about their future financial goals.

Despite challenges from the pandemic, nearly nine in ten (88%) respondents are currently saving for something. For those already in committed relationships, the survey also reveals that for most couples (45%) it has been easy to talk about money during COVID-19.

Nearly half (49%) say the pandemic has led to more open and constructive conversations about their finances, including the need to adjust spending habits by reducing spending on non-essential items (62%) and delaying larger purchases (36%).

With Love and Money revealing that six out of ten (60%) couples surveyed are having trouble meeting their financial goals during the COVID pandemic, it’s clear that having conversations about money are critical. In fact, “not talking about money with my partner on a regular basis” is the top financial mistake noted amongst Canadian respondents.

Fortunately:

  • 77% of Canadian couples surveyed say they typically open up about their finances within the first year of their relationship: including 56% who get very candid within the first six months.
  • Among Canadian married couples and those in a committed relationship, 85% say they talk about money every month.

But even though it seems most Canadians aren’t shying away from the (financial) “talk,” the TD Love and Money survey also shows that some Canadian respondents may be more likely to ask for forgiveness than permission.

  • Among the 8% of who admit to keeping financial secrets from their partner, 62% don’t ever plan to disclose them. Canadian couples surveyed admit to hiding a secret bank account (29%) or significant credit-card debt (22%).
  • Only 53% of Canadian Millennials say they agree with their partner on what expenses constitute a ‘want’ or a ‘need’.
  • 81% of Millennials admit to making unreasonable financial decisions, and one quarter (25%) say excessive and frivolous spending was one of them.

Tying the knot: Insights from both sides of the border

As expected, walking down the aisle looks very different during the pandemic, as many North American couples deal with the impact of lockdowns, gathering restrictions and reduced income. Consequently, Love and Money reveals that of the engaged Canadian couples surveyed whose wedding planning was impacted by the pandemic, more than half (56%) either postponed or downsized their nuptials.

When it comes to the big day, the TD survey also shows:

  • 53% of Millennial respondents in Canada think it’s okay to take financial risks when planning a wedding, versus 63% in the U.S.
  • 46% of Canadian respondents say the couple should pay for all wedding expenses, versus 35% in the U.S.
  • 49% of married Canadian respondents spent less than $5,000 on their wedding and 31% spent between $5,000 and $15,000, versus 49% and 20% respectively in the U.S.
  • 14% of married and engaged Canadians and 11% of their U.S. counterparts did not buy an engagement ring nor see it as necessary.

Biggest concern is not being able to retire

In terms of financial worries, the TD Love and Money survey also reveals that the greatest financial concern among Canadians is the fear of not being able to retire. Despite this concern, only one third (32%) of Canadians say they meet with a financial advisor on an annual basis. Continue Reading…

3 reasons baby boomers should downsize early

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By Keisha Telfer

Special to the Financial Independence Hub

For empty nesters and baby boomers who are planning for their future, this year in particular makes it worth thinking about downsizing early. Downsizing is a proactive, planned transition, leveraging the equity in your home to fund your new lifestyle and renewed purpose, and there are many benefits to having this conversation in 2021.

The key takeaway from the current market situation – driven by the pandemic – is that larger homes are in demand. Now is the perfect time to get started talking about downsizing, and here is why:

1.) Downsizing early is the new way to upsize life

Downsizing is not just a transaction, it’s a transition:  a transition to a new phase of life. Baby boomers who downsize early are able to upsize and experience life on their own terms. While selling the family home comes with its own emotional and physical hurdles, the payoffs of being able to leverage a lifetime of equity and gain years of adventure and freedom are worth it. Downsizing early means there is plenty of time to plan the transition, rather than waiting until life events make the choice for you. One of the top questions I get asked is, “When should I start thinking about downsizing?,” and my answer is “Today.”

 2.) A hot market for detached homes

The pandemic has driven young families to look for bigger homes, many of which are family homes currently owned by the baby boom generation.  Although finances are only one aspect of transitioning to a new phase in life, the increase in demand and prices for detached homes across Canada means there is an added incentive to consider it in 2021.  With the recent increase in younger families purchasing detached homes, baby boomers have the opportunity to sell their homes in a sellers’ market and come out ahead. Continue Reading…

Stickhandling your investing amid fear and greed

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“The fishing was good; it was the catching that was bad.”
— A.K. Best, fishing author.

“Stock markets are swimming in the face of two major investor emotions. They are fear and greed.” — Adrian Mastracci, fiduciary portfolio manager.

All you have to do is rewind to the 2020 investment results. Especially those recorded during the months of February, March and April. They brought new meaning to volatility, in both directions.

Mention 2020 and practically every investor is glad it is in the rear view mirror. Tread carefully as those pesky markets are not known to march to your wishes.

Accordingly, I attempt to highlight some basic ideas that help in portfolio construction. Focus on expanding your knowledge, say of at least three strategies that improve your nest egg.

Each day now brings a new crowd of market optimists and pessimists. Along with various assortments of buyers and sellers. Just playback the last two weeks.

Be aware of the implications in both camps. Successful investing is about stickhandling one’s comfort zone between fear and greed.

Rules to live by

So, rule number one. No knee-jerk reactions please. Regardless of whether you’re buying or selling.

Rule number two. Markets operate on logic. Do you?

If you succeeded with these two rules, step aside and breathe. If not, rewind to rule one. The bigger question is why would you want to?

Some investors may seek to calm their fears by preserving capital. Others prefer to chase their greed by hitching onto growth wagons du jour.

A few more pessimistic data releases could drive the markets lower. Conversely, a few more ounces of optimism could propel investor confidence to higher levels. Continue Reading…