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.

5 surprisingly smart Financial Habits of Millennials

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5-millenialsBy Maricor Bunal

Special to the Financial Independence Hub

Millennials often get a bad rap for a lot of things. They are usually perceived as narcissistic, entitled, lazy, spoiled, and (perhaps the greatest stereotype of all) irresponsible with money. But having grown up in a sluggish economy, millennials may not be as bad with money as most people think. In fact, when it comes to personal finance, millennials are actually making some smart money moves that their older counterparts would do well to emulate.

Here are five surprisingly smart financial habits commonly used by Gen Y-ers that older generations should consider picking up.

1.) Use technology to manage finances

Millennials are a generation that grew up with technology, so it’s only natural that they would tap its power to help them with their personal finance. These days, Gen Y-ers rely on various mobile apps and tools to easily track and manage their money. Some of the most popular budgeting and finance apps today include Mint, GoodBudget, and PocketGuard. These apps are used to record and track purchases, monitor spending patterns, and even make automated, hassle-free payments.

2.) Choose experiences over material possessions

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‘Tis the season of merry debts

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depositphotos_36811637_s-2015“It’s that renowned time when much debt is racked up during the spree of merry.”

The season of joyful giving hovers in our merry midst once again.

Some finances get stressed and stretched to the max — like credit cards creeping past their safe outer limits. The reasons don’t matter, it’s the outcomes that really count.

Easy credit is everywhere. It seems so painless at first. Just sign those tempting card offerings that sail through email and mail slots. Voila, it’s done. I receive at least a couple new flavours every month.

People love to be generous during these merry times. Yet good intentions can lead to frightful finances. A frosty thought that may cost dearly. Possibly, even a brush with financial ruin.

For example, making the minimum monthly payment on credit cards is akin to a slow financial death. With interest rates in the 20% ballpark, it takes a lifetime to pay off balances.

Good Samaritans wanted

Let’s reflect a little on the season that incurs those merry debts. Individuals who spend more than they can afford usually don’t do it intentionally. As we know, stuff happens: all in the spirit of giving.

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Buying a home with an Income suite? What you need to know

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first-time-landlordBy Penelope Graham, Zoocasa

Special to the Financial Independence Hub

 As Canadian real estate becomes steadily more expensive, homebuyers are increasingly exploring new affordability options. Renting out a portion of your home to help offset mortgage costs has become a popular method – and with the price of an average detached house well past the $1 million mark in the Toronto real estate market, it may be the only way some buyers can move beyond condos and townhomes.

For these buyers, assuming the role of landlord in exchange for a bigger house or better neighbourhood seems a smart trade-off. However, renting out part of your property – especially when you also dwell there – can be a complicated undertaking, and requires extensive research and resources. Here’s what those considering the purchase of a home with secondary suite should take note of.

What is a secondary suite?

Also referred to as an income suite, secondary suites are separate units within a principal residence. It must have its own private entrance, kitchen, sleeping and living areas. In order to comply, and be protected by, your province’s Residential Tenancies Act (RTA), you cannot share any of these living facilities with your tenant, as they’re otherwise considered a boarder. Continue Reading…

Robo advisers will expand beyond investing to insurance & lending

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Invisor CEO Pramod Udiaver

By Pramod Udiaver

Special to the Financial Independence Hub

While the online advice industry is still relatively new to Canadian investors, the breadth of online financial services has been evolving quickly. This is good news for investors who are looking for more goal-based investing options and services that consolidate their various financial needs.

Goal-based investing considers a client’s goals and the steps needed to achieve them. This practice helps investors see their financial goals as easy-to-navigate paths, with clear beginnings and ends. It ensures investors fund their accounts based on desired results, rather than how much they think they might need. And it takes the uncertainty out of investing by showing exactly how and when each goal will be achieved.

While investing and insurance goals are not generally planned under the same service, insurance is an important part of any financial plan and the goal-setting process. Progress towards our goals can be thwarted by events like disability, serious illness, or the death of a loved one.

Role of insurance

We see that in many cases, even if one of these events were to occur, clients say they would still want to stay on a path to achieve their goals. Proper insurance can help them stay on track by replacing a portion of their income while they are disabled, allowing them to maintain a desired standard of living and keep saving. Life insurance can ensure that goals set for one’s family, like sending kids to good schools, allowing the surviving spouse to retire comfortably, or the desire to leave a legacy in the form of a charitable donation, can still be achieved.

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When and when not to hedge currency risk

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depositphotos_16811249_s-2015-2By Tyler Mordy, Forstrong Global Asset Management

Special to the Financial Independence Hub

 An old Japanese proverb states “many a false step was made by standing still.”

So it is with currency exposures in investor portfolios. Consider the recent experience of Brazilian, Russian and even Canadian investors — to name a few countries with steeply depreciating exchange rates. By electing to remain invested in their domestic currency, they have all experienced a steep “loss” in their own global purchasing power (even if nominal values held up). An ostensibly conservative position has cost them dearly.

Welcome to the new, hyper-globalized world. Since the financial crisis, unorthodox policies — with central banks trying to outdo the effects of one another by plunging into a subterranean universe of quantitative easing and negative interest rates — have driven currency volatility much higher. Now, capital has a way of swiftly seeking out safe harbours and penalizing others who are not safeguarding their national currencies. Who would have thought the once-august Swiss franc would lose its safe haven status?

currency-chart-1-nov-2016

Indeed, currency exposures are having an outsized impact on portfolio returns. Currency-focused ETF vehicles could not have arrived at a better time, introducing yet another evolution in the portfolio management process.  Today, gaining global currency exposures is as easy as buying stocks.

Beyond the academic view

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