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.

Findependence — Free at last from the corporate chains

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businessman with handcuffsFriday July 29th will be a day that I will remember for the rest of my life. After thirty-eight years, I finally packed in my banking career. I suppose my co-author Jonathan would call this my Findependence Day!

To be honest, it will take some getting used to as my banking job played an important role in my life. It provided financial security for my family and gave me a good reason to get out of bed most mornings.

My career, like most careers, had its good and bad points. Overall though, it was a good ride and one that I will miss to some degree, but I had to leave in order to publish Victory Lap Retirement and create my blog.

Banks really don’t like it when employees write books or blogs because it might not align with the story that they are trying to convey. Banks get nervous when employees stand out and don’t fit in, when employees invent something that is outside the approved message.

Banks are very protective of their brand. They want the customer experience to be the same in every branch across the country. They want every employee to talk, walk and act the same. They desire a high degree of predictable sameness, as it’s easier to control.

Why banks still sell the old version of Retirement

Continue Reading…

What is Mortgage Insurance?

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mortgage-insurance-cartoon
Cartoon courtesy of LSM Insurance

By Chantal Marr, LSM Insurance

Special to the Financial Independence Hub

Sounds great just lying there on paper, doesn’t it?

Really solid.

The underlying concept of mortgage insurance is that if you die or are incapacitated mortgage insurance will pay off the rest of your mortgage. But be careful: Mortgage Insurance is the most dangerous financial product out there.

Mortgage insurance is the one financial product that declines in value as you continue to pay. Therefore each year you are getting less and less value for your premium.

Why Math is Important

Renting vs. Owning

Let’s start with your house. When you take a mortgage out on your house, it’s a very bad deal to start with. You are just paying interest on the value of the house and in most cases the interest far exceeds the cost of renting the same property.

Here’s an example based on a $500,000 20-year mortgage at 6% on a $600,000 house. We’ll assume rent inflation of 4%/year:

Year 2010: Mortgage payment $3,560/month. Rent: $2,500.

You are leaving over $1,000 in your pocket per month in ready money. That’s a lot of restaurants and vacations twelve months a year.

But let’s take it ten years later: Continue Reading…

Retired Money: Why I won’t defer my OAS past age 65

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OASMy latest MoneySense Retired Money column is about when to take Old Age Security (OAS) benefits and has been posted at MoneySense.ca. Click on the highlighted text to access the full version here: Why I’m taking Old Age Security right at 65.

As the piece goes into in more depth, the Government incentivizes those in their 60s (including Yours Truly) to defer the date for commencing receipt of benefits of the Canada Pension Plan (CPP) and Old Age Security. The longer you delay between 65 and 70 (or in the case of CPP, beyond age 60), the better the ultimate payout: wait till 70 instead of 65 and OAS will be 36% higher and CPP 42% higher.

Reasons for Deferring CPP may not also apply to OAS

However, the circumstances surrounding CPP and OAS are not identical, so in my own case I plan to take OAS as soon as it is on offer, less than two years from now, while I will endeavour to defer starting the receipt of CPP for as long as I won’t need the money.

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The critical role of planning for Cash Flow

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Ennio Longo

By  Ennio Longo

Special to the Financial Independence Hub

Are you like so many Canadians? You have a good paying job, are in a two-income household, own a home and yet you run out money before you run out of month?

The majority of Canadians are spending more than they make.   If this sounds like you, you’re not alone.  We are trying to put some money aside for the future as we have been told we should, but we also want to enjoy today; take that trip, get a new car, renovate the kitchen. We cannot just live for tomorrow.  WE WANT TO ENJOY TODAY.

The reason we have this shared experience is that we never went to school to learn how to “handle” our finances or how to manage our CASH FLOW. With so many different companies from financial institutions to consumer goods vying for our money, managing our cash flow on a monthly basis can be very difficult for many people; myself included.

Certified Cash Flow Specialist

With a four-year business degree and a CFP (Certified Financial Planner) and CLU (Chartered Life Underwriter), one would think that I would have received a formal education in cash flow planning as well, but I didn’t; at least not until I received an actual formal education in cash flow planning and became a CCS (Certified Cash Flow Specialist). Continue Reading…

Tax evasion schemes land “De-taxers” in jail

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David Rotfleisch-03-500W
David Rotfleisch

By David J. Rotfleisch

Special to the Financial Independence Hub

When “de-taxers” use best business practices such as franchising and friends and family of multi-level marketing (MLM) techniques, you know that even fringe thinkers are watching and learning from the likes of “Dragon’s Den” and “Shark Tank.” Entrepreneurialism, it seems, has caught on in the tax evasion industry.

They’re running seminars and courses, and selling books, CDs, and DVDs, to teach fringe thinkers and gullible Canadians that it’s their God-given right not to pay taxes and here’s how to do it:  commit fraud by evading tax. They are “educational,” setting up schools to do this.

And they do this for fees, of course.

Two de-taxer founders now in jail

De-taxers have been on Canada Revenue Agency’s radar for a long time and the founders of two different tax evasion schemes have been jailed recently. Tax protestors have gone from nuisance to serving jail time, plus hefty fines, in short order.

Continue Reading…