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.

RBC finds young Canadians flocking to online DIY investing since pandemic

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By Lori Darlington, President & CEO, RBC Direct Investing 

(Sponsor Content)

I was asked a question recently that made me look at what we’ve been experiencing during the pandemic in a new way.

A colleague asked if we would look back someday and see this as a time when people took more direct control of their finances – driven in part by so much else that feels outside of our control.  Considering the surge in Canadians becoming self-directed investors over the past 18 months, there may be some truth there, but I think there’s more to it than that.

We’re seeing a new age group emerging within this wave of new online investors: increasing numbers of younger Canadians are becoming DIY investors. More than half of the new clients who’ve joined us at RBC Direct Investing over the past 12 months are under the age of 35.

I don’t think this is simply a pandemic spike. I believe this is a generational shift. These younger investors are comfortable with digital platforms and they enjoy doing their own research – two key aspects of being a successful self-directed investor.

What this means for us is that we need to ensure we’re providing comprehensive support for these younger DIY investors, to help them make informed online investing decisions.

Years ago, we realized we needed to connect with younger Canadians who might be interested in investing. We created our own editorial team to produce a digital magazine, Inspired Investor, which features quick reads that show how our everyday lives intersect with investing and to offer ideas and tips for both newer and more experienced investors. We also have a Getting Started Guide and how-to videos in our Investing Academy.

And you don’t need to be a Direct Investing client to access our Inspired Investor or Investing Academy resources. We want to help investors across Canada build their knowledge and ensure that they are making decisions that match their own risk appetite, so they can trade with confidence.

No-risk Practice Accounts

We also understand that each person has a different comfort level with trading online, so we provide a ‘no risk’ Practice Account. Just as it sounds, this account doesn’t use real money; we provide $100,000 in ‘pretend money’ so investors can test out making trades. You don’t need to be an RBC Direct Investing client to do this, but you do need to have an RBC Online Banking account. Continue Reading…

No one saw it coming in 1929 either

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The Roaring 20s

By John De Goey, CIM, CFP

Special to the Financial Independence Hub

Stock market bubbles are not as rare as many people think. They occurred throughout history, with multiple generations seeing large swaths of accumulated wealth evaporate in short order.  With very few exceptions, the shellshocked investors are left to survey the carnage while trying to discern what happened and why they didn’t see it coming.

There are behavioural explanations for this. They include herding (following the herd), optimism bias (my industry always says the markets will rise), recency bias (where people put too much emphasis on things that are top of mind and current), and confirmation bias (where people simply look for information that supports their own pre-existing views). There are others. It’s as if large swaths of people want to be collectively deluded into thinking the warning signs are not to be believed or – worse still – they simply refuse to acknowledge the signs at all.

Investing in a go-go market feels good until it doesn’t

If one were to choose a catch phrase for these people, it might be this – “if it feels good, do it.”  Investing in a go-go market certainly feels good. Until the day when it doesn’t. Warning people to take shelter before the pending storm is a bit of a fool’s errand, however. When times are good, people like to believe things will stay that way indefinitely.

Irving Fisher was unquestionably one of the greatest American economists of all time, but in the summer of 1929, he opined that markets had reached a state of permanently high elevation. In other words, he recognized the warning signs, but chose to dismiss and/or ignore them. The hallmarks of people getting overly optimistic about future returns were all around him and stories of shoeshine boys providing stock tips were just the tip of the iceberg for irrational investor exuberance.  Over ninety years later, little seems to have changed in how people can be duped into what amounts to a form of mass psychosis.

Jeremy Grantham is a Wall Street maven who manages billions of dollars for a firm he co-founded, GMO Capital. When asked where we are now in the market cycle, he suggested we are near a top. Grantham recently said: “Bubbles are unbelievably easy to see; it’s knowing when the bust will come that is trickier. You see it when the markets are on the front pages instead of the financial pages, when the news is full of stories of people getting cheated, when new coins are being created every month. The scale of these things is so much bigger than in 1929 or in 2000.”

Bitcoin, real estate and meme stocks

I’m just wondering, but has anyone noticed stories about bitcoin or real estate prices or the crazy trading activity in Gamestop?  Are those stories consistent with what’s been in the financial press – or do you think they seem a bit disconnected from reality?

The American stock market is in the stratosphere these days and pretty much all the rosy narratives noted about it are based in the United States. There are several metrics that demonstrate this. Warren Buffett’s favourite test is to compare total market capitalization to national GDP. The so-called “Buffett Indicator” now stands at over 200%, which is one of the highest readings of all time. In 1929, it took 22 years for stocks to recover to record highs, so the current reading certainly ought to provide pause, as another massive global downturn seems possible, if not likely. The stakes are enormous. Continue Reading…

10 ways to get Funding for your Start-Up

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What is one way to get funded as a start-up?

To help start-up owners get their projects funded, we asked business owners and investors this question for their best suggestions. From crowdfunding to generating user donations, there are several tips that may help you fund your start-up to scale your business and reach new goals.

Here are 10 pieces of advice for funding a start-up:

  • Seek Specific Funding
  • Know Your Price
  • Establish Key Partnerships
  • Join a Business Accelerator
  • Look Into Crowdfunding
  • Save for Self-Funding
  • Build a Customer Base
  • Reach Out to Your Network
  • Go to the Bank
  • Get User Donations

Seek Specific Funding

When researching the right path for getting funding for your start-up, consider seeking out sector-specific funding that is relevant to your business. Many lenders in the industry specialize in funding specific sectors in order to offer maximized support. Here at AVANA Capital, we actually specialize in the Renewable Energy sector. Our renewable energy lending products include pre-development, development, equipment, construction, and mini-perm financing, as well as distressed debt acquisition. — Allan J. Switalski, AVANA Capital

Know your Price

Funding is an incredibly important yet challenging part of being a founder. We mostly self-funded Kegelbell’s $160,000 that got us to market, including product testing, mold building, and FDA registration. Shortly thereafter, we took a few smaller investments as convertible notes that helped get us to where we are now. Today, we’re in the process of fundraising a larger amount that will help take Kegelbell to the next level. All that to say, I’ve run the spectrum in the world of start-up finances, and one thing I’ll definitely note is that you need to know your “ask.” Prepare and practice ahead of time and always have a success-oriented mindset. — Stephanie Schull, Kegelbell

Establish Key Partnerships

Get funding for your business through strategic partnerships. Especially for business owners with limited experience within the industry, particularly manufacturing-related industries, it makes sense to develop strategic partnerships with the best manufacturing and distribution companies to help secure the success of your business venture. With some stake in the game, these strategic partnerships are almost certain to win out when compared to other approaches. While not related to funding, in digital PR, we rely heavily on strategic partners to help grow companys’ online footprints. — Rronniba Pemberton, Markitors

Join a Business Accelerator

A great way to get funding for your start-up, especially if it’s a tech-heavy business, is to try a business accelerator or incubator. These are located across the country, mainly near colleges with business programs. Continue Reading…

Finance Tools every Business needs to Optimize Accounting Processes

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By Emily Roberts

For the Financial Independence Hub

Without robust accounting procedures in place, companies would go bust almost immediately. They would fail to comply with laws and managerial procedures and ultimately face business closure because of their ignorance and neglect.

In one form or another, poor financial management is often the bane of entrepreneurs and a source of constant regret for them as well. Do not make the same mistakes. Maximize the efficiency of the firm by streamlining your accounting processes. Keep track of your income and expenditures, but also do so in the most competent fashion possible. Otherwise, your company will be undertaking a series of needless fiscal risks.

Fortunately, finance tools can be utilized here, helping businesses to invest in their future with clarity and precision. Keep reading to discover which finance tools can play an important supporting role in your daily accounting processes.

Payroll Software

Late payments can affect staff morale, hampering their work ethics and affinity for your firm. If these problems are left unaddressed, then wronged employees may even launch legal proceedings to get what they are owed.

The question of compensating your staff fairly and on time should never be a roll of the dice. Instead, you should implement payroll software solutions, which can calculate any employee-related expenses accurately and automatically. Additionally, this technology can store all the payment information related to your employees securely, keeping personal records safe.

Payroll software is highly efficient, but it works best when other programs and features complement it. For instance, you should consider adopting state-of-the-art cybersecurity measures also. When sensitive company data is highly encrypted, you can prevent numerous calamities, such as criminals hacking your databases. Workers will also know and appreciate that you take their well-being seriously enough to invest in it further and implement additional measures.

Pension Software

Whether it is budgets or forecasting annual performance metrics, accounting is frequently about anticipating the future. Therefore, you should devote a sizeable portion of your time and resources to your firm’s pension schemes.

Make good use of tried and tested pension administration software for a completely web-based solution to these matters. Employers, trustees, and members can all access these services via their computers or smart technologies. An organization’s pension scheme process can also be fully automated with the right software, enhancing business productivity in unison. Ultimately, administering pension benefits has never been more straightforward.

Further advantages may follow from utilizing pension software also. After all, workers like to know they are being looked after. Invest in their future in this capacity, and you may build staff satisfaction, retain experienced workers, and create a more vibrant work culture.

Tax Software

Tax can be challenging to manage, especially when individual circumstances change what is required here. Tax mistakes can soon become overwhelming and spiral into much worse situations should they be left unaddressed.

Unfortunately, many business owners frequently make mistakes themselves with their business tax arrangements. The common errors of judgment involve registering their business as the wrong type of entity, poorly managing their records, and failing to pay themselves a reasonable salary after all their expenses. In these situations, the pressure can build and render entrepreneurs delirious and miserable. Continue Reading…

Letting go can lead us to Opportunity and Freedom

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Photo by Sebastian Staines on Unsplash

By Akaisha Kaderli, RetireEarlyLifestyle.com

Special to the Financial Independence Hub

Often, we have the idea that letting go means the loss of something valued. This implies that there might be grief and pain involved.

Out of fear we envision ourselves in some barren emotional wilderness, with nothing around that is familiar so there has to be that dreaded chaos, right?

 And who wants that?

But what if letting go leads us to brilliance? To our own personal freedom of expression? What if this is Life’s way of steering our personal growth in a manner where we display our best talents?

Letting go could mean opening up.

Examples

 Art/music

Have you ever heard a musician or singer who is technically perfect: but there seems to be no soul? No felt connection to the audience?

Yes, all the notes are there and in the right place, but … something is missing.

There is no grab at my heart. I could just as well be chopping carrots in the kitchen for soup. It’s just routine, and maybe I should have bought a bag of frozen carrots instead.I always know when I hear someone “Who’s got it.” My eyes well up and I can’t reign it in. That’s my validation signature.

Photo by Daniel Angele on Unsplash

Chills on my arms, my eyes are glued to the performer and I am transported. The artist has whisked me away, and I want to go.

It could be a jazz singer who scats, a sax player having a riff or Billy Joel hitting the high notes for Christy Lee.

They let go and have entered “The Zone.”

Sports

Ok, here’s another example.

We have all seen outfielders throw their bodies at a fly ball just to catch that thing. Or a basketball player speed down a court and ram a ball into a basket. Ballerinas, ice skaters, skateboarders spin incomprehensibly – how can a physical body DO that?

Maybe as a skier you have caught air and you know that sensation of flight for yourself.

That’s my point.

To let go, is to leave the ground and enter genius territory.

Fear and contraction

When we begin to learn something new – cooking, Latin dancing, painting on canvas, surfing – there are basics. We learn the techniques, the rules, the boundaries. And then to develop proficiency, we leave them behind. Continue Reading…