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.

Lower trading fees aren’t an excuse to day-trade

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Stock Trader Overjoyed Looking At MonitorBy Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

As a Canadian investor, I’ve been pleased to see that most of the big bank brokerages lowered their cost per trade from $29 to under $10. Previously, most investors needed a minimum of $50,000 in assets to qualify for lower trade commissions.  This has presumably levelled the playing field for small investors.

When I first opened a discount brokerage account with TD Waterhouse (now TD Direct Investing) back in 2009, high trading commissions were the norm. I chose TD because I had an existing banking relationship and my $25,000 investment met the threshold to waive the $100 annual admin fee.

At the time I wasn’t aware of online brokerages like Questrade – which offered trades for as low as $4.95 with no administration fees.

High costs for small investors

The costs added up over the years. From 2009 to 2011 I made 36 trades and paid a total of $1,044 in fees. Had I been with Questrade, I would have paid a fraction of that amount – just $178.20 in trading fees. Continue Reading…

Incorporated? Don’t overlook TFSAs & RRSPs if your time horizon is long enough

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benfelix
Ben Felix

By Benjamin Felix, PWL Capital Inc.

Special to the Financial Independence Hub

When people have corporations it’s common for them to retain all earnings in excess of their living expenses inside of their corporations to avoid paying personal tax.

This seems logical. By leaving the money in the corporation there is more money to invest in the corporate investment account, and we know that about $50,000 of dividends can be taken out of a corporation nearly tax-free, making the idea of leaving everything in the corporation until it’s time to draw a conservative retirement income appear very attractive. This strategy may have also been motivated by the tax advantage that used to exist for taking a dividend-only income.

Shift to mix of salaries & dividends

Continue Reading…

“Stop Doing” #5: Stop Overpacking for Your Financial Journey

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stevelowrie
Steve Lowrie

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

We still haven’t finished our list of financial “STOP Doing” tips. In fact, the list may well be endless, given the endless supply of popular financial products and promotions continuously appearing, disappearing and reemerging, each one allegedly new & improved.

It’s no wonder so many individual investors end up with so much excess baggage along the way. This month’s post is dedicated to making sense of all those competing investment “opportunities” with our simple advice: STOP overpacking for your financial journey.

During my years as an adviser, most of my clients have come to me weighed down by the volume and complexity of their overly packed portfolios. They desperately want to lighten the load, but they’re unsure what should be preserved and what can be safely jettisoned.

I’ve generally found three areas to focus on, helping clients lighten up after years of stocking up, keeping up, and/or moving up. Raise your hand if any or all of these traits sound familiar to you:

Stocking up

You’ve been knocking around Bay Street for a while and have accumulated quite a packed portfolio. Continue Reading…

Stress test your nest egg

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Adrian
Adrian Mastracci

By Adrian Mastracci, KCM Wealth Management

Special to the Financial Independence Hub

Financial stress testing is an indication of how portfolios fare during tough times.

Some US banks have had difficulty passing their stress tests.

Many a portfolio can also benefit from a form of stress testing. Investors often make high demands on the nest egg.

Our tests may reveal cracks in your financial foundations. The analysis is straightforward with “Yes/No” answers.

We survey all new inquiring clients.
“Will your nest egg pass our battery of simple tests?”

Test on 6 issues

Continue Reading…

How to Choose a Retirement Location

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Lake Chapala, Mexico
Lake Chapala, Mexico

By Billy and Akaisha Kaderli

Special to the Financial Independence Hub

So you and your spouse have decided to retire. At some point in your retirement planning you must ask yourself where you would like to spend your Golden Years. The following questions and insights should place you on the right path for finding just the location that suits your needs.

First things first

The first question you must ask yourselves is whether you want to stay in the home in which you are currently living or would like to move elsewhere. Retirement is a big step and sometimes people feel more secure staying in familiar surroundings because it makes the transition to your new lifestyle smoother.

Others, for financial reasons, a change of pace, health reasons, or for better weather, want to relocate. In this case, the next decision you must make is whether you want to stay in your home country or move overseas.

If you want to stay in your home country you must then decide what sort of climate is most attractive to you. Do you want to experience the four seasons or have a more moderate, year-round climate? Do you like mountains or beaches? What size of city or town do you most enjoy? These questions are important because they will automatically exclude places you won’t need to research. Knowing what you prefer in climate, city size and geographical configuration carries much weight in terms of your happiness quotient.

Another thing to consider is that if you choose a town or small city, are there adequate medical facilities nearby? Larger cities tend to have a full range of medical care. Smaller towns generally have clinics and a variety of doctor’s offices, but perhaps not the equipment needed for complex medical situations.

Narrowing your search

Continue Reading…