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.

Pay less and get the most out of your Auto Insurance

Posted By |

By Gary Bordeaux

Special to the Financial Independence Hub

Auto insurance can be a costly affair. Getting car insurance is important because it is a legal requirement and it can be a financial benefit if you are involved in an accident. Over 203 million Americans spend about US$125 every month to insure their car. So, what can you do to lower your car insurance cost? Read on to find out.

Shop around

Check out several companies for deals and offers, as insurance cost can differ between motor insurance providers. For example, the average annual rate for drivers insured with State Farm and Geico  is US$1327 and US$1667 respectively. Online sites are a perfect place to research insurance price, discounts, welcome bonus, and other requirements. Keep in mind that a cheaper option for one driver may turn out to be costly for another driver.

Don’t add younger drivers to your policy

Drivers aged 15-25 years are 32% more likely to cause an accident than older drivers. Therefore, younger drivers are likely to pay more for their insurance than older drivers. If your kids are ready to drive, get them their own insurance and encourage them to accumulate their no claims bonus. You can convince your co-workers or parents to become co-driver on your insurance policy. Also, add additional drivers to your insurance policy only when they need to use the vehicle.

Protect your car

Some of the details you will divulge to the insurance company when signing up for a car insurance policy include where you park the car at night and the car’s security features. The insurance companies may use insurance document management software to store your details. Drivers who keep their car in a garage and have installed a plethora of security features are likely to enjoy subsidized insurance premiums.

Group Insurance

 It is common for employers to provide health insurance for their employees. However, it is possible to acquire auto insurance through the same means. Group insurance is when many individuals, usually co-workers or family members, jointly apply for an insurance policy. As a result, the group is able to utilize the benefits of collective bargaining to get discounts and lower premiums. The only downside is that you don’t have the liberty to choose your preferred insurer. Large corporations, alumni associations, fellowships, and hobby groups are some of the entities that are eligible for group insurance.

Do away with unnecessary coverage

Legally, you are only obligated to sign up for liability insurance in the United States. This is the type of insurance required to cater for damages and injuries inflicted on third parties. Some drivers choose to add other types of coverage to the liability coverage. For instance, you may get collision coverage to offset the cost of the destruction your vehicle suffers in a motor accident. Continue Reading…

5 years of Findependence: The Hub celebrates its fifth anniversary

Posted By |

How time flies! Five years ago this Sunday — Nov. 3, 2014 — the Financial Independence Hub [aka “The Hub”] was launched. From the start the idea was to publish a blog every business day, 52 weeks a year. Thanks to a wide variety of guest bloggers and other contributors, that has been achieved: as of this writing, the Hub had published almost 1,700 blogs.

For those curious, this link will take you to the very first Hub blog, which outlined the planned direction. From the get-go we tried to make a distinction between traditional full-stop Retirement and Findependence, which of course is the contraction for Financial Independence. The related book is Findependence Day (available in both Canadian and US editions).

Findependence is different from Retirement

Even some of the republished blogs the past week indicate how much the term Financial Independence has caught on, although sadly, the term Findependence less so. Just a few days ago, regular Hub contributor Mark Seed published a blog on Strive for Financial Independence not Early Retirement.  (We’re working on getting him to use the term Findependence but Rome wasn’t built in a day!)

I wrote much the same thing soon after the Hub was launched in 2014: Why Financial Independence is a better term than Retirement.

I may as well take this opportunity to clarify a few things about how the Hub operates. First though, we’d like to thank our advertisers, some of which (like Vanguard) have been with us since almost the beginning. It’s that kind of support that means the Hub remains free to users, who by now realize that most Hub blogs publish around 9:10 am, with a daily digest going out around 10 am.

Where the Hub’s content comes from

Why daily content? I guess it goes back to my days as a newspaper reporter and columnist, when my personal motto was “A story a day keeps the editor away.” Of course, it wouldn’t be much of a Semi-Retirement if I had to write a blog for the Hub every day all by myself so from the get-go we were open to guest blogs. An early supporter was Robb (and Marie) Engen of Boomer & Echo: skip over to the Hub’s search function and you’ll find dozens of stories by them. And by the way, that search tool can be very useful in accessing any of the 1700 blogs or so that the Hub has published: they’re still there; you just have to retrieve them with the tool.

Also early in giving us permission to republish blogs were Patrick McKeough of The Successful Investor, Adrian Mastracci of KCM Wealth Management, Mike Drak, my co-author on Victory Lap Retirement, Billy and Akaisha Kaderli of RetireEarlyLifestyle.com and many more. Just this year we’ve added a few more excellent bloggers: Mark Seed of MyOwn Advisor, Michael Wiener of Michael James on Money, Dale Roberts of Cut the Crap Investing, Fritz Gilbert, the Plutus award winning blogger behind Retirement Manifesto and a few more I hope I’ve not forgotten.

I can hear critics questioning the rationale of this republishing approach: all I can say is that you can consider it sort of the Greatest Hits of Financial Independence, given that our goal has always been to be — as you can see in our slogan elsewhere on this site — North America’s Portal to Financial Independence. We are chiefly an aggregator, although there is also original content.

Yes, I try to write a blog most weeks, though as regular readers may realize, they tend to be “throws” — summaries of paid columns or blogs I’ve written elsewhere, including MoneySense.ca, the Financial Post, Motley Fool Canada, the Globe & Mail on occasion, and Money.ca. Think of it as a sort of one-stop-shopping for what I personally write, even as I retrench a bit as my Semi-Retirement unfolds. (I’ll be 67 in April). In a way, the outside revenue I get from writing for the mass media helps defray the Hub’s modest costs, and of course helps to promote the site to new readers.

Apart from republished blogs, the Hub also regularly tries to publish at least two pieces a week of fresh content written by a variety of other contributors: financial advisors and other investment professionals, occasionally marketers or  firms representing a cross-section of the financial services industry.

The Hub’s 6 categories for the Human Financial Life Cycle

We try to publish a wide selection of topics corresponding to the human financial life cycle: if you’ve not noticed, take a look at the blue menu near the top of the site and you’ll see that our blogs are categorized in six sections. We start with young people (Millennials) who are just getting started in their financial lives. So we start with Debt and Frugality, followed by Family Formation and Housing: they will be interested in topics like real estate and buying their first home, mortgages, interest rates, credit cards etc. From almost the Hub’s inception, Zoocasa.com’s Penelope Graham has contributed excellent articles monthly on the real estate industry. Continue Reading…

Avoiding blind spots in financial advice

Posted By |

By Darren Coleman

Special to the Financial Independence Hub

In my last blog, I took on those Questrade TV commercials where the client schedules a meeting with their financial advisor to tell them they’re fired. While people don’t normally schedule a meeting with an advisor to do such a thing, I think the real story is that the client does not experience value from the relationship. And if that’s the case, not paying the fee and moving on makes perfect sense.

But that doesn’t mean doing it yourself is the best idea. Investment management and financial planning is more complicated and intricate than people realize. Having access to tools doesn’t make you an expert; I can buy everything I need to renovate my house or rewire my kitchen, but that doesn’t mean I should. Better to leave this to Mike Holmes. Here are some key areas when an excellent financial advisor can add great value.

Fire Drills

We all want to plan for a happy future with a comfortable retirement, maybe a new car, or an exotic holiday. People associate these things with creating a financial plan, largely due to multi-million-dollar ad campaigns by mutual fund companies. But life is not a Cialis commercial and bad things happen.

With Christmas coming get ready for media stories about the family whose house burnt down with all their possessions, including presents under the tree, going up in blazes. Then we’re told they didn’t have insurance and donations are being taken for them at the local bank branch.

To prevent misfortune from turning into tragedy, a good Financial Advisor will first have their client pay attention to planning for things going wrong. Indeed, assessing key risks to one’s financial health (i.e., premature death, disability, loss of employment, liability, critical illness) should be the primary component of a financial plan.

We also must look at documents and processes such as a will and Power of Attorney that describe what happens when we can’t speak for ourselves. Unfortunately, these are things most people do not do on their own. And if they do, they usually don’t do them with skill and adequate preparation.

A great, and valuable, Financial Advisor does more than just inquire about insurance and other documents. They run a ‘fire drill’ on the family.

Let’s say someone doesn’t come home one day because of illness or sudden death. What happens next? Who gets the call? What documents are needed and where exactly are they? Along with all this are other important questions.

  • What income is going to come into the household to replace those lost wages?
  • What paperwork needs to be filed?
  • Who’s going to do it?

Your employer is legally bound to run a fire drill at least once a year. Shouldn’t your financial plan do the same?

Budgets don’t balance themselves

Despite Prime Minister Justin Trudeau’s statement, I can assure you that budgets do not do this. We all have multiple and often competing demands on our time, money and energy. And when we combine the wishes, desires and needs of other family members, things may and will get derailed. Continue Reading…

How to avoid the hidden costs of school

Posted By |

By Tara Thompson

Special to the Financial Independence Hub

If you have school-age children, you know that when fall rolls around there will be additional costs added to your budget. Hopefully, you planned for this increase in the budget when the school year began, but as we all know there are always unexpected costs that we didn’t think of. Here are a few things to expect as well as a few ways to save.

Clothes

When we send our kids off to school we already know about many of the costs. Back-to-school shopping can be crazy. New clothes are important if we want our kids to fit in with their peers. New shoes are also a popular item and they often need multiple pairs. If you live in an area that has cold weather or rain they will need coats and jackets. If possible try to reuse some of your kid’s clothes. I know they always want new clothes but try to mix in some new with some of the old, and don’t forget to utilize hand-me-downs if you have more than one child.

Supplies

Then there are the dreaded school supplies. A long list that never seems to end and probably a new backpack and lunchbox to go with them. There are ways to save money by finding good sales and also by re-using supplies from the previous year. I keep a plastic bin with unused and used school supplies that can still be used during the year and the following year if I still have them. This saves money and is a good way to be green. Continue Reading…

Why chasing a high credit score is a waste of time and money

Posted By |

By Richard Moxley

Special to the Financial Independence Hub

This might sound weird, as our society has become obsessed with this mystical three-digit number, but it is true. Chasing a high credit score is really a waste of time and money. Here’s why.

The score you have access to is not the one the bank uses

While I agree that having good credit is extremely important, the score can be very deceiving. The biggest problem is that consumers do not have access to the credit score that the banks uses. I know that sounds weird and it shocks everyone when they hear it, but Equifax has recently updated its website with the following notice:

The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties may use a different scorewhen evaluating your creditworthiness. (Emphasis mine)

As you can see, the credit score you have access to as a consumer is for “educational” purposes only and can be completely different than what a lender will see.

For example, when you log onto your profile with your bank or a third-party app like Borrowell, Credit Karma, or Mogo the three-digit number you see is for “educational” purposes and not the score the bank will use on your next credit application. It is even worse, when you find out that the score you are paying for directly on Equifax.ca and TransUnion.ca is not what your lenders uses. Unfortunately, it is common to see over a 100-point difference between the “educational score” and what the bank actually uses. This is just one reason why the credit score provided to Canadians is very misleading.

A high score doesn’t mean you have good credit

An 800-credit score (which is really good) doesn’t mean you’ve been approved for best rates and terms. The score is just one aspect the banks are looking for. Continue Reading…