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 Vantage: Unlocking value for things consumers do every day

RBC/Getty Images

By Erica Nielsen, Senior Vice President, RBC

(Sponsor content)

When it comes to everyday banking, our clients have made it clear they want more value for their business. Specifically, they want more value from the things they do every day and to be rewarded for their banking relationship, particularly as it grows with us. They want our help building confidence in making critical financial decisions. And most importantly, they want us to earn their trust by looking out for their best interests and having their backs.

This was the important feedback that we heard from Canadians, and which led to the launch of RBC Vantage.

RBC Vantage is our new way to describe all of the powerful benefits that our clients can enjoy every day, just by having a bank account with us. Through RBC Vantage, we’re transforming the way we approach the client relationship, moving beyond simply selling a chequing account to ensuring that we meet our clients’ needs and expectations holistically.

We’ve taken the best of what we do and have innovated our offering to deliver more value than ever before as well as insights and tools to help our clients make critical financial decisions and confidently manage their money.

So, how can RBC Vantage give Canadians more value every day?

Unlock more value

Our new Value Program, one of the innovations that we’ve launched as part of RBC Vantage, is designed to recognize and reward our clients for banking with us. By simply enrolling their eligible bank accounts, they will be able to enjoy more savings on monthly account fees, and now can earn RBC Rewards points on debit purchases in-store or online. And the deeper the relationship that a client has with us, the more fees they will save and points they will earn.

Earnings points on debit is a great option for clients who spend less on credit but still want an opportunity to earn rewards, or for those who want to up their earning potential by collecting rewards on both debit and credit purchases.

Whether it’s building up points for a big-ticket item or using them to pay for everyday purchases like groceries or to pay bills, having more opportunities to earn points can really make a difference. Continue Reading…

My review of The Boomers Retire

My latest MoneySense Retired Money column reviews the new fifth edition of The Boomers Retire by certified financial planners Alexandra Macqueen and David Field. Click on the highlighted headline here to retrieve full article: Fresh takes on the challenges facing baby boomers as they approach retirement.

As I note in the column, the original edition of The Boomers Retire (which I read at the time) was by Lynn Biscott and was published back in 2008.

Macqueen and Field are both CFPs and the book is aimed at both financial advisors as well as their clients, as indicated in the book’s subtitle.

Clearly, retiring boomers constitute a massive potential readership. I myself co-authored The Wealthy Boomer, way back in 1998. At that time, baby boomers may have started to worry about Retirement but most, including myself, would have been squarely in the Wealth accumulation camp.

Wealthy Boomers now well on way to transition to Decumulation

Here in 2021, Decumulation is the emerging financial focus of Baby Boomers, many of whom will already be retired or semi-retired, and considering new decumulation solutions like the Purpose Longevity Fund, which this site has looked at more than once. (here via Dale Roberts and here via another MoneySense Retired Money column.) Continue Reading…

New 2nd edition of US version of Findependence Day now available; plus an Interview with Myself

Happy Canada Day!

Just in time for America’s Independence Day, I’m happy to announce that a new updated 2021 edition of Findependence Day is now available in the US market. Published by Best Books Media in New York, you can buy the paperback version of the book here through Amazon.com.

Or you can buy the new paperback for US$15.99 or Nook ebook for US$1.99 at Barnes & Noble.

Below is an Interview with Myself, which explains the timing, the differences and other things. If “An Interview with Myself” strikes some as a little bizarre, let me acknowledge that I originally got that idea from British journalist and author Malcolm Muggeridge, who I knew when he was the Writer in Residence at the University of Western Ontario journalism school in 1978-1979.

So without further ado, here’s the Q&A with myself:

 

Jon Chevreau: So Jon, you already had an American edition out in 2013. Why are you updating it eight years later?

Jon Chevreau: Good question, Jon, it’s mostly a matter of timing and the fact that North America, led by the United States, is just starting to emerge from the Covid pandemic. Suddenly, young people are starting to have hope again about their futures, including their financial futures. And, Findependence Day is a novel geared to younger adults, millennials, people just starting out on their life’s journey.

JC-Q: I see. I know Canada is a bit behind the USA in its vaccination program and economic recovery, but why a new US edition and not a new Canadian edition?

JC-A: True but the fact is that while the original Canadian edition has sold well and continues to sell in Canada, the original print run was such that there are still enough copies left that it doesn’t make much sense to make the old version obsolete. And besides, the content in the Canadian edition is still current.

As you know, Jon, the first edition from 2008 was actually written as a North American edition and attempted to include both Canadian and American content. But you decided a few years ago that the US market — which after all is ten times as large — needed its own edition with no reference at all to Canada or to Canadian financial content.

JC-Q: How do the different editions differ?

JC-A: Well, both the 2013 Trafford U.S. edition and the updated 2021 Best Books US edition are what I wanted the original edition to be. The cover concept was always the one you see above: it’s just that when Power Publishers published the first edition, the design team there went with the cover concept of the red balloon in the blue sky.

JC-Q: But you really wanted the image of a calendar set in the future, circling July 4th as the Findependence Day selected by one of your main characters?

JC-A: Correct. The 2013 and 2021 covers are quite similar although Best Books slightly reworked it and we changed the futuristic date from 2027 to 2036.

JC-Q: So the protagonist, Jamie, still has 15 years to achieve his dream of Financial Independence while he’s still young enough to enjoy it?

JC-A: Quite right, Jon.

JC-Q: Any other big differences?

JC-A: Well, the other thing the two US edition incorporated was something some people suggested I include in the original Canadian edition but chose not to at the time. That’s the chapter summary at the end of each chapter of the key lessons that Jamie and his wife Sheena learned. The new 2021 edition retains that feature and updates some of the financial info.

JC-Q: How do you categorize Findependence Day? Is it non-fiction or is it fiction?

JC-A: I wish you hadn’t asked that one, Jon because that’s a tough one to answer. In truth, it’s a hybrid of fiction and non-fiction, which I realize is a bit unusual.

JC-Q: So which is it, if you put a gun to our head?

JC-A: First, I’d say please remove the gun. Second, I’d say it’s primarily a novel but a financial novel.

JC-Q: Like David Chilton’s The Wealthy Barber and its many imitators?

JC-A: Sure, David Chilton established this genre way back in 1989 and no one has sold more copies than him in that niche. Incidentally, David has told us he “believes” in Findependence Day and that it is “excellent.” You can find that among the many laudatory testimonials the book has gathered over the years.

JC-Q: So why the hybrid and how does Findependence Day differ from all those other Wealthy Barber knockoffs?

JC-A: Well, most of the imitators tend to be what I call “information dumps” — the focus tends to be on the financial information and the stories around them tend to be a bit thin when it comes to characterization, plot etc.

JC-Q: And Findependence Day isn’t?

JC-A: We tried to bring traditional novel-writing structure and techniques into the book so that the young people who are its target audience would first be entertained and drawn in sufficiently that they’d want to see what happened to Jamie and Sheena. Yes, we sprinkle in the financial info as the plot proceeds but not at the expense of Story. So the minute any financial dump starts to sound contrived and unlikely to occur in real life, we cut it short and returned to the story.

That’s another reason for the end-of-chapter summaries and incidentally the reason we also created two Amazon ebooks that summarize the plot and reprise the end-of-chapter summaries. They cost just $2.99: they’re called A Novel Approach to Financial Independence. (one for Canada, the other for the US)

JC-Q. In short, we tried to write a “real novel.”

JC-A. We did try and many reviewers seemed to think we pulled it off. One financial planner, Diane McCurdy, said Findependence Day is “the closest you’ll come to a great beach book that helps you make enough money to retire!”

JC-Q: How is it a beach read? Continue Reading…

Mexico: US-style Living at one third the Cost

Chacala Beach, Nayarit, Mexico. Photo credit Billy Kaderli.

By Billy and Akaisha Kaderli, RetireEarlyLifestyle.com

Special to the Financial Independence Hub

Mexico, that constantly media-bashed country to the south of the US, might be your better option for retirement.

One million Americans already call Mexico their home and it’s amazingly easy to obtain your residency visa for full-time living, most receiving theirs in a matter of days.

Snowbirds could easily add another million visitors to this number and can stay 6 months on a no-cost visitors visa!

With its proximity to the United States, both US and Mexican airlines offer non-stop flights to and from many destinations in the US. Or, of course, you could drive. So, visiting family or utilizing Medicare is much easier than if you were to live elsewhere overseas.

There are lots of reasons why Mexico is a great choice for retirement, so let’s list some:

Cost of Living

Mexico has everything that the US offers – along with a better lifestyle – at a fraction of the cost.

The Dollar exchange rate makes for attractive affordability.

The cost of a beer is 30 Pesos or about $1.50 at a bar. A lakeside lunch of grilled salmon with wine or margarita as your beverage plus a generous tip runs about $11USD per person.

Commonly used medicines at pharmacies won’t break the bank, and a consultation with a cardiologist or a surgeon is less than $40USD.

More on Medical Care

Many US doctors train in major Mexican hospitals where the “care” is still part of the healthcare industry.

Most doctors here – including specialists – are easily available through phone, WhatsApp or email and most speak English. Highly skilled dentists are abundant with oral surgeons performing teeth implants for a price less than your dental copay back home.

Assisted Living options run the gamut. Pricing for private rooms in a traditional Mexican mansion with gardens, comfort dogs, meals included, internet, laundry service and social activities and a driver to take you to appointments are about $2,000USD per month.

Housing

Here in Chapala, Mexico, all price ranges are available for both rentals and home ownership. For as little as $300 USD a month you can rent a one-bedroom furnished apartment or you can purchase a house in any of the towns which dot the lake for many times that amount.

Maids and gardeners are commonplace, and the price for plumbers, carpenters and electricians run about the same as a Lakeside lunch. Continue Reading…

Navigating Fixed Income Challenges with Flexibility

By Brian Giuliano

Brandywine Global Investment Management, a specialist investment manager of Franklin Templeton

(Sponsor Content)

Flexibility and adaptability can work to an investor’s advantage in the challenging fixed income markets of 2021. Structural disinflationary trends are now clashing with cyclical inflationary forces in a global economy struggling to recover from the COVID-19 pandemic. Add on interest rates at record lows, demographic pressures, heavy government debt levels, and widespread technological disruption throughout the global economy.

The market environment of low interest rates makes it difficult to generate income while preserving capital. As a result, many investors have taken on additional credit or interest rate risk to try to earn a more attractive income from fixed income assets.

But there are pitfalls to this approach. Without a counterweight to the extra portfolio risk, investors could be vulnerable to an increase in interest rates or a selloff in credit markets.

One option for investors is a multisector strategy with the flexibility to adapt quickly to changing markets. A strategy that’s able to capture opportunities when available but also play defense when market conditions call for it.

Global Income Optimiser strategy

The portfolio team behind the Franklin Brandywine Global Income Optimiser strategy are strong believers in flexibility, which means we try to adapt the income and risk exposures in a portfolio to the market environment. This approach does not have any structural, home country or sectoral biases. We aim to rotate the portfolio across what we believe are the best risk-adjusted return opportunities in the global fixed income universe.

Our goal is to generate high-yield-like returns with investment-grade-like volatility for investors. We want to maximize the income that can safely be earned in a given market environment.

The Franklin Brandywine strategy seeks returns from across the investment universe, including global investment grade and high yield credit, developed market sovereigns, structured credit and emerging market debt. Furthermore, sector rotation, duration management, quality rotation and security selection are employed to meet the strategy’s investment objective. Foreign currency is hedged primarily back to an investor’s base currency, such as the Canadian dollar; however, limited exposure may be used opportunistically to add alpha for a portfolio.

This strategy became available to retail investors in Canada on June 4, when Franklin Templeton introduced the Franklin Brandywine Global Income Optimiser Fund*. Globally, the strategy has a successful track record, dating back to its inception in 2013. In the U.S, a similar fund, to the degree allowed by Canadian regulations, is 5-star rated by Morningstar.** Brandywine Global is a specialist investment manager that was part of Franklin Templeton’s acquisition of asset manager Legg Mason in 2020.

Portfolio positioning for the reopening

Brandywine Global sees growth and inflation returning to the global economy this year. We increased spread duration late in the first quarter of 2020 and began reducing high quality government bond duration; so overall portfolio duration was roughly flat last spring. From last summer through winter, we materially reduced portfolio duration.

Now, the positioning of the strategy is for a short duration, cyclically-oriented portfolio of companies that have some pricing power, given inflationary pressures from the reopening trade. There’s a mix of U.S. and European names with a concentration in the BBB and BB space. The level of credit risk is largely investment grade over the long term; less than 5% of the portfolio is in CCC securities. High quality government bonds can help manage volatility. These and other ‘safe’ assets offer lots of ‘episodic value’ for the portfolio at times, especially during volatile markets, by being sources of alpha and acting as a counterweight to riskier holdings.

Capital protection is a top priority, and the Brandywine team will not reach for yield in this strategy.

Environmental, social, governance assessments

Also, Brandywine Global integrates ESG analysis into our comprehensive assessment of information risk and price risk with this strategy. The focus is on the material ESG issues that can impact a country’s economic growth, the business activities of a corporation, or the integrity of securitized collateral. Continue Reading…