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.

How to practice Frugality: 11 simple ways to live more frugally

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 How do you practice frugality? 

To help you live more frugally, we asked finance professionals and business leaders this question for their best advice. From buying used or refurbished items to cutting down on food spending, there are several practical steps to help you adopt a more frugal lifestyle.

Here are eleven simple ways to practice frugality: 

  • Buy Used or Refurbished Items
  • Understand the Time Value of Money
  • Spend Cash
  • Eliminate Unnecessary Subscriptions
  • Adopt Eco-friendly Lifestyle
  • Understand the Time Value of Money
  • Sell Whatever you don’t Need
  • Invest in Things that Add Value to Your Life
  • Purchase Quality over Quantity
  • Live Within Budget
  • Develop a Habit of Prioritizing
  • Cut Down on Food Spending

Buy Used or Refurbished Items

You can pay a fraction of the price to buy used or refurbished items. From furniture to electronics, books, clothing, and more, you may be surprised how much treasure can be found online or in thrift stores.  A whole house or office could be furnished or decorated with used or refurbished items, and you’ll save hundreds or even thousands of dollars in the process.  Plus, the stock is always changing, so with each visit to a thrift store there’s always a chance to find something unique. You can also look out for neighborhood garage sales and online social media sales groups. –Brian Greenberg, Insurist

Spend Cash

I am a big fan of carrying cash. It’s easy to get into the habit of swiping your debit card for every purchase, but you can lose track of how much money you have if you’re not careful. That’s why I always prefer to withdraw fun money from the bank so I always know exactly how much I have to spend. This strategy really helps me to be more mindful of my purchases. Understanding frugality is a skill everyone should master. —Jae Pak, Jae Pak MD Medical

Eliminate Unnecessary Subscriptions

Try to limit your subscriptions. For instance, if you have both Netflix and Hulu, perhaps you can decide to commit to just one of these, since they both have plenty of movie and TV show options. Consider the things that you do not really need to be spending money on. Once you eliminate these things, the money saved will add up. –Jared Hines, Acre Gold

Adopt Eco-friendly Lifestyle

I have found that adopting an eco-friendly lifestyle can really reduce expenditures. LED bulbs generate the same amount of light while using much less energy, and setting my thermostat lower has reduced both gas and electric bills in winter. It also never hurts to turn off lights whenever you’re not using them. As energy prices go up, an eco-friendly life can help ease some of your financial burden. —Candie Guay, Envida

Continue Reading…

Death of Bonds or time to buy short-term GICs?

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My latest MoneySense Retired Money column looks at a recent spate of media articles proclaiming the “Death of Bonds.” You can find the full column by clicking on the highlighted headline: Do bonds still make sense for retirement savings?

One of these articles was written by the veteran journalist and author, Gordon Pape, writing to the national audience of the Globe & Mail newspaper. So you have to figure a lot of retirees took note of the article when Pape — who is in his 80s — said he was personally “getting out of bonds.”

One of the other pieces, via a YouTube video, was by financial planner Ed Rempel, who similarly pronounced the death of bonds going forward the next 30 years or so and made the case for raising risk tolerance and embracing stocks. The column also passes on the views of respected financial advisors like TriDelta Financial’s Matthew Ardrey and PWL Capital’s Benjamin Felix.

However, there’s no need for those with risk tolerance, whether retired or not, to dump all their fixed-income holdings. While it’s true aggregate bond funds have been in a  de facto bear market, short-term bond ETFs have only negligible losses. And as Pape says, and I agree, new cash can be deployed into 1-year GICs, which are generally paying just a tad under 3% a year;  or at most 2-year GICs, which pay a bit more, often more than 3%.

One could also “park” in treasury bills or ultra short term money market ETFs (one suggested by MoneySense ETF panelist Yves Rebetez is HFR: the Horizons Ultra-Short Term Investment Grade Bond ETF.) It’s expected that the Fed and the Bank of Canada will again raise interest rates this summer, and possibly repeat this a few more times through the balance of 2022. If you stagger short-term funds every three months or so, you can gradually start deploying money into 1-year GICs. Then a year later, assuming most of the interest rate hikes have occurred, you can consider extending term to 3-year or even 5-year GICs, or returning to short-term bond ETFs or possibly aggregate bond ETFs. Watch for the next instalment of the MoneySense ETF All-stars, which addresses some of these issues.

Some 1-year GICs pay close to 3% now

Here’s some GIC ideas from the column: Continue Reading…

How Investors can respond to Ukraine Invasion

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By Sa’ad Rana, Senior Associate – ETF Online Distribution, BMO ETFs

(Sponsor Blog)

It has been almost two months since Russia invaded Ukraine. During this time, we have been witnessing the dramatic impact the war has had on global markets and economies. There is also concern with how these events will impact our portfolios and investments. 

Economic Impact

Inflation numbers are expected to continue rising higher and this war will put more upward pressure on inflation. Russia is a large global oil exporter. Increased sanctions on Russia will undoubtedly cause a supply squeeze in the oil market, which will lead to higher oil prices. In addition, Russia and Ukraine both account for about 25% of total wheat exports, which will now be limited. This can drive up food costs on a global scale. The war will also continue to restrict supply chains. For example, planes are being diverted because Russian air space is closed to more than 35 countries. Having to go around Russia leads to longer travel, resulting in increased fuel consumption and trip costs.  Continue Reading…

Tackling your Stock Market fears

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By Anita Bruinsma, CFA

Special to the Findependence Hub

Investing has become more accessible to more people over the years. The emergence of mutual funds, ETFs, online brokers and robo-advisors has given pretty much everyone the means to invest. So why are so many people still reluctant to invest, and in particular, why don’t they think they can do it themselves? Judging by the people I’ve talked to the answer is: they’re scared. 

This is unfortunate and unnecessary. The investment industry has made investing look so complicated. We are led to believe that we need an MBA, a Bloomberg terminal and a proficiency in Excel modeling to invest. This is absolutely not true. Investing can be simple when you buy and hold broad-market ETFs. 

Compounding the problem are the tales of fortunes lost in the stock market, either by gambles taken or being swindled by an unscrupulous financial sales person. These horror stories, although real, are uncommon, and like many of our fears, are bigger in our imaginations than in reality. 

Investing can be simple

Have you heard of imposter syndrome? That’s when you think you aren’t talented or skilled enough to deserve your job, your income, or the accolades bestowed on you. I had terrible imposter syndrome when I was hired as an equity analyst 16 years ago. I thought everyone around me was way smarter than me when it came to investing in the stock market. 

Over the years, though, I realized that so much of what people were talking about was irrelevant, and the excessive amount of information and analysis was unnecessary. The highly-paid “experts” who came to meet with us couldn’t simply say “The stock market goes up over the long term.” Why would anyone be paid to give that simple piece of insight?

The thing is, that’s all that matters. The fact that the U.S. stock market has, historically, always recovered from dips and crashes and continued the march upward is all that matters. Don’t let all the other market-related noise distract you from this point.

Fewer decisions, better outcomes

Here’s how to de-complicate investing: don’t make predictions. The smartest investors on Bay Street don’t try to guess where the market is going: they buy their investments and hold onto them for the long term. The more decision-making you remove from investing, the better off you’ll be. This means don’t pick stocks and don’t choose when to get in and out of the market. Buy ETFs or index mutual funds that mirror the broad market, buy when you have the money, and sell when you need it.  Continue Reading…