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.

8 ways to protect Seniors from Financial Fraud

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By Mikayla St. Clair

Special to the Financial Independence Hub

There are tons of financial scams aimed at taking advantage of senior citizens. One of the key reasons the elderly are targeted for scams is that many of them grew up when deals were made and based on a person’s word and character. A handshake, many years ago, was enough to trust someone. Many elderly and senior citizens grew up in an era when people were more trustworthy, and scams like financial fraud were not as prevalent as today. There are other reasons why the elderly are targets for financial fraud, and understanding how thieves go about stealing from senior citizens will go a long way in prevention. Here are eight ways to protect seniors from financial fraud.

1.) Shred sensitive documents

A good shredder can go a long way in preventing financial fraud, but it only works if you use it. Many people fail to shred sensitive documents and simply throw them in the trash. Thieves aren’t above going through your trash in hopes of gaining your social security number and other information they can use to open fraudulent accounts or gain access to accounts already open. Shredding the personal documents of seniors helps to prevent others from gaining access to their sensitive information and creating fraudulent accounts in the senior’s name.

2.) Check Credit reports regularly

It’s essential to check the credit reports of older adults under your care. Credit reports should be reviewed twice a year or annually at a minimum. Look for any errors, suspicious charges, or accounts that you don’t recognize. Correct these errors immediately and close any unauthorized accounts. Using a professional credit monitoring service to monitor a senior loved one’s credit is also an excellent way to protect the elderly from financial fraud.

3.) Be cautious of new relationships, friends, and family

Seniors can be more trusting than younger people, especially if they are lonely. Many thieves and fraudsters use loneliness as an entry-point into senior’s life to gain access to financial information or trick them into giving them money. It’s also important to be cautious of friends and family members who may have an addiction or severe financial problems. Sadly, many cases of financial fraud against the elderly are committed by a family member or friend.

4.) Use a Power of Attorney if necessary

In some instances, it may be necessary to take full control of a senior’s finances through a financial power of attorney. A financial power of attorney may be necessary when a person has a mental condition such as dementia or Alzheimer’s. Seniors with these disabilities are often targets because of their health.

A financial power of attorney can give you full control of a person’s finances. If the senior is a family member, discuss the matter with others in the family to determine the best choice for managing the person’s financing.

5.) Watch for changes in Spending

Keep an eye on the spending habits of any older adult in your care. Continue Reading…

Online investment ideas during the Pandemic

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By Veronica Baxter

Special to the Financial Independence Hub

Do you have an extra $500 or $1,000 and want to learn something about investing? This article will explore some interesting online investment vehicles that can teach you something about investing, make you some money, and perhaps even further your social ideals.

But before you invest …

Pay off your Credit Cards

Is that $500 or $1,000 really “extra” money you can afford to play around with? If you have any credit card balances, it’s not. Use that money to pay your credit cards off before you start investing. Why? Because no investment in that amount will bring a return greater than what you’ll save by not paying credit card interest on that revolving balance.

For example, let’s say you have $1,000 in credit card debt at 18% interest. If you pay the minimum of $60 on that debt each month, it will take you 20 months to pay off, and you will have paid $158 in interest.

No investment exists that can make you anything near the $158 you spent borrowing that $1,000 from your credit card lender for 20 months. Pay that credit card balance off with your “extra” money and save up another $500 or $1,000 to play with.

Contribute to your Employer’s 401(k)

If you are not yet contributing to your employer’s 401(k)[in the U.S., Canadian equivalent is a group RRSP or Defined Contribution pension plan], start doing so, especially if your employer offers a matching contribution. Why? First, because if you are not contributing at least the amount your employer matches, you are leaving free money on the table. Second, when you contribute to your employer’s 401(k), you do so with pre-tax dollars, and thereby reduce your taxable income. This lowers your income tax bracket and you pay less income tax overall.

Contributing to your employer’s 402(k) is a win-win for you, so do that before investing “extra” money.

Exploring virtual Investment vehicles

Investment Apps

There are myriad reputable investment apps for your smartphone that vary in the amount of control you have over your investments and trades, and the amount of advice and data available, and the type of accounts you can have. Here are a few, just as examples:

Most control and lowest Fees: Robinhood

Robinhood can be described as a sort of bare-bones app, and while there is no account minimum and there are no commissions on trades, there are also no additional accounts available such as retirement accounts, and there is no data on investments.

This type of app is for the person who wants to save on fees and is not afraid to research investments on their own.

Most Investment data: E*Trade

If you want to do your research and trade in the same app, this is one to consider. You can learn about a company’s earnings, dividends, company news, and metrics like debt-to-equity ratio. You do pay for this feature –  US$6.95 a trade. But beginners and experienced investors alike can appreciate the wide range of investment options available and the ability to invest in a way that is aligned with their risk tolerance.

Most Banking features: Stash

For only US$3 per month, this app offers management of your banking, investment, and retirement accounts in one place. Fractional shares of ETFs and stocks are available, but a limited selection. If you can pay $9 per month, the app offers an upgrade allowing access to investment research, two more accounts, and expanded reward features.

Stock Market Robo Advisors

Do you want professional help with investing but don’t want to pay for a financial advisor? Try a Robo Advisor. These offer varying degrees of assistance, control, automation, investment data, availability of investment types, and fees. Continue Reading…

6 Tax mistakes every family needs to avoid

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Photo Credit: Kelly Sikkema, Unsplash

By Sia Hasan

Special to the Financial Independence Hub

No one looks forward to filing their taxes each year. The process is time-consuming and stressful no matter how many times you’ve done it in the past. Unfortunately, even the most experienced workers make mistakes when filing their returns and those mistakes can really add up.

The last thing anyone wants to deal with is a formal audit by the IRS [or, in Canada, the CRA] and the more mistakes you make, the more likely that audit is. Believe it or not, it’s possible to avoid the most common mistakes year after year. You just need to know what they are in the first place.

Ignoring late or missing W2s

Your employer is required to send out a W2 at the end of the year [the equivalent of a T-4 in Canada.] This is your wage statement that shows your rate of pay, the amount you earned and the amount of money withheld for taxes from your paychecks. While it’s possible to file without the W2, it’s incredibly difficult and often leads to errors when reporting your income. Instead of ignoring a late, missing or lost W2, get another one reissued. Speak with your company’s HR department and get them to print a new one for you. If they can’t, they’ll be able to request a new copy from the business’s accounting department.

Not paying attention to Deadlines

It’s easy to lose track of time when you’re juggling the responsibilities of busy work and social schedules on top of filing a tax return. Unfortunately, filing late can end up earning you a hefty fine and penalty from the IRS [and the CRA]. If you’re having trouble keeping track of tax deadlines, start filling out your return as early as you can. You should be able to complete the return as soon as you receive your wage statements from your employer and any additional income statements for investments or gambling earnings. You can also set reminders on your phone to help you stay on schedule.

Forgetting to double-check your Return

There’s a lot of data entry involved with tax returns. Each number and piece of information you enter needs to be correct. If there are errors, you could end up dealing with a delay or hard inquiries from the IRS. Continue Reading…

Understanding the Chargeback Process to ward off Credit-card Fraud

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By Gary Bordeaux

Special to the Financial Independence Hub

Proper accounting and cash flow management is critical for both big and small business owners. This seems obvious enough, but when we move from accounts receivable into the world of refunds and chargebacks, the water can begin to get muddy, and it can be more difficult to keep track of where you stand. The first action to take towards fixing and preventing the problems this can cause is to understand what chargebacks are, and what to expect when you are presented with one.

The two types of Chargebacks

If you’re a new entrepreneur, you may be asking “what is a chargeback?” A chargeback is a form of fraud dispute that comes in two basic methods. First, a chargeback can be a transaction that is reversed due to activity that may be fraudulent designed to protect a consumer a business or both. In the second type of chargeback, the credit card company demands a vendor replace or make good a loss incurred by the consumer due to a fraudulent charge.

It’s important to mention early that a refund is very different from a chargeback. A refund is instigated by one or both parties, and usually involves the re-exchange of an item for its purchasing price or value. Chargebacks are inherently fraud mitigation processes that may have additional fees that must be paid by the party deemed at fault, usually the retailer.

Who is involved and what is the process?

The key players in the chargeback process begin with the customer, who usually is the one to dispute a charge. They file a complaint with their credit card’s issuing bank, which may be their local branch or a national finance company that has provided them with their card. The issuing bank takes the concern up with their issuing bank processor, which will verify the account balances of the customer and then approve or reject transactions that have come through any of the four major card networks (MasterCard, Visa, Discover, or American Express).

The card networks are responsible for settlement. Their next step is working with an acquiring bank (or acquirer) that accepts funds for the retailer from the buyer. They are responsible for the settling of additional fees like processing, interchange, or network fees. Their merchant account processor does just what their name implies: process payments for the merchant. These go into the merchant commercial bank account, which is simply the retailers’ account; the destination for funds. But this is where funds can be pulled for chargebacks and given back to the customer.

Reason Codes

When dealing with Chargebacks, it’s important for a business to be familiar with reason codes. Reason codes are the shorthand for the card networks, and signify why a charge has been disputed, resulting in a chargeback. Continue Reading…

There Is no greater virus than Fear

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Akaisha feeling the wide-openness!

By Akaisha Kaderli, RetireEarlyLifestyle.com

Special to the Financial Independence Hub

We have a choice; living a life of fear, or one of hope and optimism.

Fear

Dwelling on fears clouds the mind.

It creates anxiety, emotional contraction, judgment of others and it becomes difficult to make a clear decision about anything. Moving forward becomes arduous because there is so much doubt. Fear sees limitation, lack of options, and darkness of mind: it’s called depression.

When we are in the middle of it, fear seems very real. What I’m talking about is not the kind of fear when someone has a knife to your throat, threatens your family, or if a wild bear is chasing you. I’m talking about the fear we manufacture in our minds in response to something that we have little control over.

Optimism

When we consider our abilities, good fortunes, and the possibilities of the future, we are able to see windows instead of walls. It’s the place where we have ideas, dreams, solutions to existing problems, and create new inventions.

Yes, currently we are in the middle of some fear-full stuff that is going on. And how you choose to see it makes all the difference.

There will be hundreds if not thousands of new businesses and inventions born out of this present crisis. Perhaps the next Amazon, eBay or Genentech will be leading us into the future. Human beings are very creative. Remember the saying “Necessity is the Mother of invention”?

This is how society, the human race and free enterprise has propelled us forward through the previous decades and centuries. Even Winston Churchill said “The empires of the future are the empires of the mind.”

A little perspective

Few of us were around in 1918 when the Spanish Flu broke out: specifically called the H1N1 virus. About one third of the global population was infected with approximately 675,000 deaths in the US. At that time the US population was 103 million making the US death rate 0.0066.

Extrapolating this out using today’s population numbers of 331 Million would mean we would have 2,185,000 deaths caused by this pandemic.

This is a big difference from the roughly 140,000 deaths today and back then during the Spanish Flu, no businesses or schools were closed.

More recently

We had the Hong Kong flu, H3N2, in 1968. Many of you were around, including us, through this period. As the name indicates this virus also originated in China and lasted into 1970. Continue Reading…