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.

The Rising cost of Eldercare: Podcast

Posted By |

The following is an edited transcript of an interview conducted by financial advisor Darren Coleman of the Two Way Traffic podcast with eldercare expert Yvonne Dobronyi of YCD Consulting.  It appeared on September 6th under the title ‘Planning for your parents and what it’s going to cost.’

Click here for full link …

https://twowaytraffic.transistor.fm/episodes/planning-for-your-parents-and-what-it-s-going-to-cost

Coleman says the single biggest financial blind spot for families when planning for the future is the rising cost of eldercare and Yvonne Dobronyi agrees.

An eldercare consultant who counsels individuals and families through her firm, YCD Consulting, Yvonne says the monthly outlay for a retirement home starts at $3,600 for a single studio suite without care, but once in-home resources are included the tab can go up to $20,000 a month.

“Families are in denial and don’t want to ask difficult questions about moving Mom or Dad to assisted-living accommodation,” says Yvonne, who added that more than half the families she sees aren’t prepared for dealing with one, never mind two, elderly parents.

She says many seniors don’t understand they need to sell their home or cottage and sometimes both in order to afford retirement living if they have limited savings. And that seniors may have to work beyond their retirement years to maintain a cash flow to pay their bills even if they’re mortgage-free.

The two experts discussed a range of issues to do with eldercare:

  • Who holds Power of Attorney for both property and healthcare, and what happens when one sibling has it and the other doesn’t?
  • The importance of keeping these documents, along with a will, updated passport and medical records, in a designated file that’s readily accessible by a trusted contact.
  • ‘Free’ (government-funded) resources like personal care and light housekeeping services are available after assessment if you qualify but only for 2-4 hours and when staff is available.
  • Dealing with long wait lists for LTC (long-term care) homes, how to navigate the system, and making decisions during emotional stress.

Below is an edited transcript of the interview, focusing on the cost of eldercare housing services and families being prepared, or not prepared, for what can happen.

Darren Coleman

This is probably the single biggest blind spot most families have when they do their own planning. We can prepare for retirement, but this is where it tends to catch people off guard. I want to explore what life looks like when people suddenly have to figure out, how do I live independently for longer in my home, or what happens if I move into seniors’ housing.

Eldercare expert Yvonne Dobronyi, YCD Consulting Ltd

Yvonne Dobronyi

Some families are well prepared, but more than half are not. They react to a situation, so all of a sudden you have a crisis. Mom has dementia and Dad’s been the caregiver and now Dad falls in the home and breaks his hip, so he has to go to hospital. Who’s going to manage Mom? That’s when families get together to figure out what sort of care is required. So some will go to hospital, and others try to manage Mom. My experience is that a lot of times they haven’t designated a power of attorney, completed a will or made funeral arrangements.

Darren Coleman

The reason I think most find they’re not prepared is that the timing of when people will need care is unknown. And people don’t know what these things cost.

Yvonne Dobronyi

Often, family members don’t know where they have an RRSP or GIC, or whether or not their home is sellable the way it is. It’s something that’s avoided because families are in denial and don’t want to ask difficult questions. But it’s our duty as family members to be well prepared and that might involve asking difficult questions.

Darren Coleman

Someone should take the lead in these things. It might be more of a formal meeting or a conversation with some structure to it.

Yvonne Dobronyi

Absolutely. You sit down and share information that will be kept confidential. And if something happens, family members are prepared and know what to do. But  often this is not the case.

Darren Coleman

People may be dealing with these things while they’re in this emotional crisis. That’s not the best time to have that chat with your brother or sister about who’s going to look after Mom or Dad.

Yvonne Dobronyi

Very often a parent made a decision to give the power of attorney to one child and not the other two. Or two of them have the power of attorney and can’t agree on what the next steps might be. So one family member says we should move Mom and Dad into a retirement community or long-term care, and the other one says no.

Trusted contacts, Wills & Powers of Attorney

Darren Coleman

There’s a new administrative element for financial advisors in Canada now. It’s about adding a trusted contact to your file. So if people listening have not done this with their advisor, I recommend picking up the phone and saying I’d like to add that to my file. You mentioned the power of attorney and the will. We should point out there’s two kinds of power of attorney. Sometimes people will say, I have a will. Well, it doesn’t matter. The will only works once you’re gone, and the power of attorney is the document that works until you’re gone. So you need both of them.

Yvonne Dobronyi

The power of attorney is responsible for making decisions on behalf of that party in a healthcare capacity. Say the resident or patient has an extreme crisis situation and is now on life support. There needs to be that meeting to determine what is the best route. And that’s a difficult decision to make. I recommend you have more than one person be the power of attorney for care, so you can look at it closely and determine together what would be the best route. Continue Reading…

What Exercise has NOT done for me

Posted By |

By Carolyn A. Fox

Special to Financial Independence Hub

When I started riding my stationary bike about a year ago, I had a vision of what exercise would do for me. I’d become a stronger, healthier person. I’d lose weight. My desk would be tidy and my bookshelves in alphabetical order. I’d be taller. I’d be younger.

That last goal was inspired by a book called Younger Next Year, by Chris Crowley and Henry S. Lodge, MD. They wrote that, although everyone is going to die, years of decrepitude at the end of life are avoidable. There was a way to counteract the relentless decline of aging. Unfortunately, the only way to release the rejuvenating chemical was daily physical exertion.

As a woman of a certain age, I no longer focused on whether exercise would help me look good naked. Instead, my goal was to be able to get to the bathroom by myself well past the age of ninety. Caring for my elderly mother, I learned that being able to drive a car isn’t the key to independent living. It’s being able to get to the potty on your own.

One benefit of the stationary bike was its convenience. On my morning commute from the bedroom to the kitchen, I passed the exercise room and could hop on the bike.

I bought my stationary bicycle second hand for $40. I felt frugal saving thousands of dollars compared to the latest high-end stationary bikes. Those gorgeous new machines had a screen that makes it look like you’re biking in the Tour de France or across Tuscany. Or you could take a virtual spin class with a live instructor.

But what those high-tech bikes couldn’t do was distract me from the fact that I was working out. Exercising wasn’t fun for me. I needed distraction. My riding times improved considerably when I started watching Netflix on my tablet. I wanted to peddle vigorously while catching up on episodes of Capote and The Swans. I wanted to forget that I’m on the bike and just have the minutes tick by.

My goal was to ride for an hour. At first, if I rode fifteen minutes, I was exhausted: breathing hard, awash in perspiration, and rubber-legged my first few steps after climbing down. But I kept increasing my time a few minutes each day.

The hour-long ride eluded me for months. At fifty minutes I’d stop and tell myself that I could have ridden for another ten minutes if I really wanted to. Then I pushed through to fifty-five minutes.

When I finally rode a complete sixty-minute hour, it was a huge victory. I jumped off the bike, pumping my fists over my head as I did the Rocky dance. My cat looked at me like I was nuts.

Elated, I called my cousin to brag. “I biked for an hour today.”

“You did?” she said. “You’re an animal.”

“I’m an animal!” I shouted.

My cat shot me a look that seemed to say, “Leap to the top of the refrigerator, then tell me who’s an animal.” But I was in no mood to yield the field. I had done what the go-getters in spin class dog: I rode for an uninterrupted sixty minutes.

As hour-long rides became my routine, some things changed. I could talk on the phone while I was riding. My recovery time became much shorter. My legs wanted to dance, which could be embarrassing if I was standing in line at the bank.

Things that DIDN’T improve with regular exercise

But my life hadn’t become perfect. Here are a few things that didn’t improve with regular exercise. Continue Reading…

What is Quality Investing?

Posted By |

As consumers we prefer higher quality things, and with stocks it may be no different. Learn why Quality may be important to investors.

Image courtesy BMO ETFs/Getty Images

By Erin Allen, Vice President, Direct Distribution, BMO ETFs

(Sponsor Blog)

Quality is a very familiar concept in society. As we know, an item can’t be judged on price alone. If one shirt costs $10, versus another that costs $30, does this mean the cheaper shirt is better based on price alone?  Most likely not, as what matters is the quality of the shirts, and how it will perform in the future!

In investing, Quality is no different. It starts with a base assumption that all stocks aren’t created equal, some are going to be higher quality than others, and as a result may enjoy better risk-adjusted returns. As consumers we prefer higher-quality things, and with stocks it is no different. Indeed, higher-quality stocks have historically shown benefits to investors, outperforming over time.[1]

What makes a company a quality company?

There are different approaches to identifying Quality, with associated pros and cons. Warren Buffett prefers to look for companies with “competitive moats” and companies that exhibit earnings power in excess of its peers. If a business model is easily replicated, one would expect copycats to soon enter, and drive down profitability.  Companies with competitive moats have advantages that competitors find difficult to touch, and would be considered higher quality. Many fundamental investors have a Quality screen in place and will also often look for high-quality management teams, which are assessed by in-person meetings, and other heuristics.

Quality can also be defined by assessing financial metrics in a consistent and disciplined approach. This is an approach BMO GAM has taken for the ETFs listed below, using the MSCI index which BMO’s Quality ETFs are based. Three metrics are assessed: ROE (Return on Equity), Leverage (Debt to Equity), and Earnings stability (the consistency of earnings through time). Having discipline, and a regular rebalancing schedule to assess and make changes, is of tremendous benefit in investing, to mitigate the role of emotion and behavioural biases, and to ensure the portfolio remains on plan, and true to its intended exposure.

ROE – This is a measure of profitability. Companies with higher profitability are winners in their respective industries. In investing, while things do evolve over time, winners tend to remain winners*1. Higher profitability is a good signal a company has a high-Quality business model.

Low Leverage – High Quality companies tend to be cash rich, from driving solid and consistent business results. Apple is a great example, as it is currently sitting on over US$60 billion of cash and short-term investments2. In short, Quality companies often have less need for debt, so BMO GAM screens for companies with less debt overall.

Earnings Stability – Companies with strong competitive advantages tend to have more consistent earnings streams, as competitors find it difficult to take a “bite out of their lunch.” Quality companies tend to show their merits in earnings consistency through time.

When does Quality tend to perform well, and when may it lag?

Quality companies tend to have a risk level at or slightly below broad markets, and can participate in growth, while maintaining a measure of defensiveness should volatility in markets increase.  Investing in higher-profitability stocks tends to give the quality exposure a growth flavour, while in negative equity markets quality stocks will often be preferred due to their strong overall balance sheet strength, with less debt and more consistent earnings. As well, higher interest rate environments tend not to be as much a concern for quality companies, as their debt levels are lower and they are less exposed to higher interest rate impacts.3

Performance wise, like all factors, Quality is best evaluated versus broad market performance through the entire market cycle, or market cycles. However, as a generalization, Quality stocks tend to do well in growth markets. In very strong bull markets Quality stocks tend to participate well, but higher risk/lower quality stocks may outperform when investors are the most exuberant and take on more risk.  In backdrops with higher market volatility, Quality tends to outperform, as company fundamentals and balance sheet strength matter. These are general historical performance trends, and performance in specific market scenarios may vary.

The chart below illustrates factor performance over the past 10 years which shows quality outperforming in many years.

Other considerations

Implementing a quality exposure in your portfolio leads to sector differences and security differences versus the broad index. For example, in the U.S., Quality tends to overweight Technology companies, as many of these companies fit the bill of high profitability/low debt/consistent earnings, and underweight other sectors such as Consumer Discretionary, where the metrics are not as strong. Continue Reading…

Retired Money: Taking RetireMint for a test spin

Posted By |

My latest MoneySense Retired Money column has just been published: you can find the full column by clicking on the highlighted headline here: What is RetireMint? The Canadian online platform shows retirement planning isn’t just about finances.

We provided a sneak preview of RetireMint late in August, which you can read here: Retirement needs a new definition. That was provided by RetireMint founder Ryan Donovan.

The MoneySense column goes into more depth, passing on my initial experiences using the program, as well as highlighting a few social media comments on the product and some user experiences provided by RetireMint.

RetireMint (with a capital M, followed by a small-case letter I rather than an e) is a Canadian retirement tool that just might affect how you plan for Retirement. There’s not a lot of risk as you can try it for free. One thing I liked once I gave it a spin is that it isn’t just another retirement app that tells you how much money you need to retire. It spends as much or more time on the softer aspects of Retirement in Canada: what you’re going to do with all that leisure time, travelling, part-time work, keeping your social networks intact and so on.

In that respect, the ‘beyond financial’ aspects of RetireMint remind me of a book I once co-authored with ex corporate banker Mike Drak: Victory Lap Retirement, or indeed my own financial novel Findependence Day. As I often used to explain, once you have enough money and reach your Financial Independence Day (Findependence), everything that happens thereafter can be characterized as your Victory Lap.

As Donovan puts it, this wider definition must “break free from the tethered association of solely financial planning.”

Donovan says roughly 8,000 Canadians will reach retirement every single week over the next 15 years. And yet more than 60% of them do not know their retirement date one year in advance, and more than a third will delay their retirement because they don’t have a plan in place.

Retirement not calendar date or amount in your bank account

Donovan says  “Retirement has become so synonymous with financial planning, and so associated with ‘old age,’ that they’re practically inseparable. Yet, in reality, retirement is a stage of life, not a date on the calendar, an amount in your bank account, and is certainly not a death sentence.” He doesn’t argue that financial planning is the keystone of retirement preparation, as “you won’t even be able to flirt with the idea of retiring without it.” But it’s much broader in scope than that. As he puts it, this wider definition must “break free from the tethered association of solely financial planning.” Continue Reading…

Real Estate Investments for Findependence

Posted By |
Commercial Real Estate: Image via Pexels: Brett Sayles

By Devin Partida

Special to Financial Independence Hub

Real estate is a powerful investment tool for anyone looking to build wealth and achieve Findependence [Financial Independence], especially in the U.S. and Canada. It offers the potential for passive income, long-term growth and significant tax advantages, making it an attractive option for many investors.

It is crucial to understand the different types of real estate investments — such as residential, commercial and short-term rentals — and how they align with market trends in North America to make the most of this opportunity. Each type comes with risks and rewards, but real estate can be fundamental to a diversified and profitable investment portfolio when approached strategically.

The Role of Real Estate in Diversified Portfolios

Real estate provides a sense of stability that many investors find appealing, especially when compared to the volatility of the stock market and the impact of inflation in the U.S. and Canadian markets. One-third of Americans view real estate as the best long-term investment, even above stocks, gold, savings accounts or bonds.

Balancing properties with traditional investments like stocks and bonds can enhance financial stability and create a more resilient portfolio. However, understanding regional market trends is essential — particularly in high-demand areas like New York, Los Angeles or Toronto — where property values increase steadily. Being informed about these markets allows investors to make practical decisions that support their long-term goals.

Types of Real Estate Investments

Several investment options are available when building wealth through real estate. Here are different types to help investors choose the right path:

Residential Properties

Residential spaces — including single-family homes, duplexes and condos — are popular investment options for those aiming to generate rental income. Investors can also take advantage of property appreciation through this method, especially in fast-growing areas like the suburbs of Toronto, Vancouver or Austin. While the potential for returns is strong, they must consider risks like fluctuating home prices, tenant turnover and maintenance expenses.

One factor to consider is reviewing any restrictive contracts — particularly in spaces with homeowners’ or condominium associations — because these can limit how the space is used. For example, some groups have strict rules about short-term rentals, which can affect an investor’s ability to maximize returns.

Commercial Properties

Commercial properties generally provide investors with the opportunity for longer-term leases and higher rental income than their residential counterparts. Additionally, they can take advantage of tax breaks and deductions — such as depreciating the property over 39 years — which can reduce taxable income. These factors make buying and improving commercial spaces attractive for investors looking to maximize their returns.

However, these investments come with risks, including economic downturns that may affect tenants and the added complexities of managing larger spaces. For those willing to navigate these challenges, commercial real estate can be rewarding to a diversified investment strategy.

Real Estate Investment Trusts (REITs)

REITs provide an accessible way to invest in large-scale commercial properties without needing direct ownership. They’re great options for those seeking regular dividends and diversified exposure.

While REITs offer attractive returns, investors have very little control over individual properties. A recent example of market impact is the decline in the market cap of Canadian REITs, which fell from nearly $59 billion in 2021 to just $38.2 billion in 2023. Despite these risks, they remain popular for those looking to enter commercial real estate quickly.

Expert Tips for Maximizing Returns

Managing a property investment requires careful planning and strategy to maximize returns. Here are tips to help investors stay ahead and ensure long-term success: Continue Reading…