Reviews

We review books that deal with everything from financial independence topics to politics, and anything in between. We may sometimes stray into films and music if there is a “Findependence” angle.

Read these 2 books if you care about Democracy

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Joe Biden this week carrying a copy of Democracy Awakening, via Threads.

While the Hub’s focus is primarily on investing, personal finance and Retirement, Findependence has given me sufficient leisure time to absorb a lot of content on politics and the ongoing battle to preserve democracy and in particular American democracy. What’s the point of achieving Financial Independence for oneself and one’s family, if you find yourself suddenly living in a fascist autocracy?

To that end, I have recently read two excellent books that summarize where we are, where we have come from and where we likely may be going. These books came to my attention from two relatively new social media sites I joined in the past year.

For those who care, I am still on Twitter (now X) but restrict most of my posts there to the financial matters on which this blog focuses. I post there as @JonChevreau, which is the same handle I have on Mastodon (since Nov 6, 2022) and Threads, which I joined a week after its early July launch this summer. Threads is now almost the polar opposite of X politically, a veritable Blue haven: just last week Joe & Jill Biden both signed on as @potus and @flotus respectively, as well as under their real names. So did vice president Kamala Harris (posting as @VP and @kamalaharris).

Amazon.ca

But back to the books. The first must read is Prequel, by the brilliant U.S. broadcaster Rachel Maddow [cover image shown on the left]. Tellingly, it’s subtitled An American Fight Against Fascism.

The second is Democracy Awakening, by Heather Cox Richardson [cover shown below]. Both are available as ebooks on the Libby app, through (hopefully) your local library. I couldn’t find either book on Scribd (now called Everand) but they do have ebook Summaries of both.

An American Hitler?

Given that the 2024 U.S. election is now about 12 months away, there is a certain urgency to these books. The Maddow book I’d read first since it’s a brilliant historical recap of the rise of German Fascism in the 1930s and — the shocking bit! — how close Germany came to installing fascists in America. It’s literally about Germany’s search for an American Hitler it hoped to install. It’s full of sinister characters you’ve probably not heard about before, like the assassinated Huey Long.

Maddow credits the reader with enough intelligence to extrapolate from that period into the current dangerous environment. One is left to infer how she feels about the parallels to the modern GOP and its fascist leader and would-be dictator: she never says their names although she is usually more explicit in her MSNBC and podcast commentaries.

Modern readers could easily substitute Putin’s Russia for Hitler’s Germany and draw their own conclusions about the parallels to collusion with foreign powers.  There are also similarities between protracted attempts by the U.S. government to try the perpetrators in court and the protracted Delay tactics of the Defence — including many U.S. senators of the 1930s and early 1940s. And as is currently the case, these tactics largely seemed to work, since the Allies won World War II before most of the collaborators were brought to justice. Frustrating indeed, as many of today’s Americans bristled at the ultimate futility of the Mueller Report around 2019 and other protracted legal proceedings that may not be resolved before the 2024 election.

Maddow of course hints at this right at the end, quoting one frustrated prosecutor (O. John Rogge) from the 1940s:

“The study of how one totalitarian government attempted to penetrate our country may help us with another totalitarian country attempting to do the same thing …the American people should be told about the fascist threat to democracy.”

Continue Reading…

How to find your likely estate value and lifetime tax bill (for free!)

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By Ted Rechtshaffen, CFP

Special to Financial Independence Hub

In my role as a Portfolio Manager, Financial Planner and President at TriDelta Private Wealth, the number one question that people ask is “Will I run out of money?”

This question comes from people with a $10 million net worth, a $3 million net worth, and a $300,000 net worth.  There may be different levels of angst involved but they still wonder.

The fundamental issue is fear.  Even if it isn’t rational, there is always a bit of fear about running out of money.  Even if running out may mean different things to different people.

Of course, for those with more wealth, the related question is almost always “Am I paying too much in tax?” and “Is there tax smart things that I should be doing that I am not?”

While we do a lot of work in each area with Canadians, we decided to build a free tool to help answer that number one question.  We have done this through our TriDelta My Estate Value calculator.  By someone entering in several core pieces of financial information, the calculator does some pretty heavy lifting.  Behind the scenes are actuarial tables to show life expectancy, tax tables, and a variety of stated assumptions around inflation, real estate and investment growth expectations.

The output is an estimate of your likely estate value in future dollars, along with a lifetime estimate of your income taxes paid.

You will find the calculator here:

My Estate Value Calculator – TriDelta Private Wealth

Donation Calculator

One other tool we have put together is a donation calculator.  It takes the information from the My Estate Value calculator and provides some ability to see the impact of annual charitable giving.  What if you gave $5,000 a year?  What would be the impact to your likely estate value and to your lifetime tax bill?  What if you gave $10,000 or $20,000 a year?  One of the reasons that we put this together is that many Canadians would give more to charity of they felt confident that they could afford to do so.  This calculator helps to show in real time the impact of higher levels of giving.  The link is here: Donation Planner – TriDelta Private Wealth

We have found that even among the free tools online, most are focused on retirement savings, and deliver a monthly savings target.  The My Estate Planner calculator is focused on the years after retirement, and what potential estate you will be leaving to your family and/or charity. Continue Reading…

Bestselling Beat the Bank celebrates its 5th anniversary

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By Larry Bates

Special to Financial Independence Hub

 

My book, Beat the ​Bank: The Canadian Guide to Simply Successful Investing, was published in September 2018. Five years later it continues to be a best seller among Canadian business/investing books.

The book, along with my website and various articles I’ve written have helped many Canadians learn to invest smarter and build (and maintain) larger retirement nest eggs.

Most Canadians continue to be directed by their banks and other advisors to invest through mutual funds. The vast majority of these mutual funds extract annual​ fees ranging from 1.5% to 2.5% from the value of the investment.

Not only are most Canadians unaware of these fees​, very few investors understand the compound damage these fees do over time. Over a lifetime of investing, these fees can reduce retirement nest eggs by 50% or more.

At the same time, the investment industry, including the same banks that sell high-cost mutual funds, offer very low cost, very efficient investment funds (ETFs) that track market indexes​. (There are many other types of ETFs as well. In my view most investors would be well served by sticking to simple index tracking ETFs).

Smarter investing means getting out of high-cost mutual funds and getting into low-cost investment products and services like index ETFs through do-it-yourself investing, using robo-advisors or finding lower cost traditional advisors.

A lot has happened in the world since​ Beat the ​Bank was published five years ago​. Covid-19 did a lot of damage and led to a great deal of unanticipated change. Inflation spiked dramatically causing central banks to raise interest rates. The full impact of higher rates is yet to be fully felt, especially by homeowners whose mortgages will be renewing in the next year or two.

The good news for investors is that bonds and GICs are finally offering decent returns although we will have to wait and see whether earning 5% interest will outpace inflation. And, despite all the uncertainty and chaos over the past five years, the total return of S&P 500 was a pleasing 70% while the total return of the S&P/TSX was 42%.

What hasn’t changed?

  • Markets continue to be uncertain​ (this never changes!)
  • The majority of “advisors” are under no legal obligation to act in their client’s best interest
  • The majority of “advisors” put millions of Canadians into high-cost mutual funds
  • Many prominent mutual funds have not reduced their fees (Why would they lower fees when investors are unaware of the impact of fees?)
  • Mutual funds continue to underperform simple index ETFs
  • Regulators have made some progress but many critical investor protection measures have yet to be implemented

​The ​Beat the ​Bank project, which was sparked​ 7 years ago by my sister’s experience with mutual funds, has been a ​gratifying experience​. I have received hundreds of messages from readers over the past five years, the great majority with positive feedback.

You can get a sense of reader response by checking out Amazon reviews. I certainly have had negative reaction from some advisors and industry people generally, but most professionals recognize the shortcomings of the industry and want to see investors achieve better outcomes with simpler, more efficient investment products and services.

DIY investing not for everyone

Do-it-yourself investing it’s not for everyone. But if you are considering switching to DIY investing, whether you check out my book​ or other independent ​sources​ (books, blogs, podcasts, etc.), I strongly encourage you to take some time to learn investment basics.

Here are just a few tips from Beat the Bank readers for those considering making the move:

“I have found that ETF equity investing is better for me than buying individual stocks.” Continue Reading…

I Will Teach You to be Rich (Review)

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Amazon.ca

By Michael J. Wiener

Special to Financial Independence Hub

 

There aren’t many financial gurus willing to call out financial companies by name for their bad behaviour, but Ramit Sethi is one of them.  In his book I Will Teach You to be Rich, he promises “a 6-week program that works,” and he includes advice on which banks to use and which to avoid.

The book is aimed at American Millennials; Canadians will learn useful lessons as well, but much of the specific advice would have to be translated to Canadian laws, banking system, and account types.  The book’s style is irreverent, which helps to keep the pages turning.

It may seem impossible to fix a person’s finances in only 6 weeks, but this is how long Sethi says it will take to lay the groundwork for a solid plan and automate it with the right bank accounts and periodic transfers.  The execution of the plan (e.g., eliminating debt or building savings) will take much longer.

Sethi is rare in the financial world because he will say what he really thinks about banks.  “I hate Wells Fargo and Bank of America.”  “These banks are pieces of shit.  They rip you off, charge near-extortionate fees, and use deceptive practices to beat down the average consumer.  Nobody will speak up against them because everyone in the financial world wants to strike a deal with them.  I have zero interest in deals with these banks.”  For the banks he does recommend, “I make no money from these recommendations.  I just want you to avoid getting ripped off.”

People have many reasons why they can’t save and are in debt, but Sethi sees them as just excuses in most cases.  “I don’t have a lot of sympathy for people who complain about their situation in life but do nothing about it.”  “Cynics don’t want results; they want an excuse to not take action.”  He urges readers to “put the excuses aside” and get on with the business of making positive changes.

The Program

The first step in the program is to “Optimize Your Credit Cards.”  I found it interesting that Sethi focused on credit card perks before he covered eliminating credit card debt.  He wants readers to “play offense by using credit cards responsibly and getting as many benefits out of them as possible” instead of “playing defense and avoiding credit cards altogether.”  This approach sets him apart from many other experts on getting out of debt.  While he does teach methods of eliminating debt, his focus is more on building wealth steadily.

The second step is to open “high-interest, low-hassle accounts.”  Interestingly, he wants readers to open a chequing account at one bank and a savings account at another bank.  Among his reasons are that the psychology of a separation between accounts makes us less likely to raid savings.  Some might think opening a savings account is pointless if they have no money to deposit, but Sethi insists that you need to lay the groundwork now for a better future, even if you’ve only got $50 to deposit.

The third step is opening investment accounts.  The author favours very simple investments, such as a Vanguard mutual fund account invested in a target date fund.  “Don’t get fooled by smooth-talking salespeople: You can easily manage your investment account by yourself.”  Unfortunately, Vanguard mutual funds are only available to Americans.  Canadians can find one-fund solutions with certain Exchange-Traded Funds (ETFs).

To create the cash flow to reduce debt and invest, the fourth step is about “conscious spending,” which is “cutting costs mercilessly on the things you don’t love, but spending extravagantly on the things you do.”  Achieving this involves tracking spending in different categories, but not traditional budgeting. Continue Reading…

My 5 picks for classic books on Financial Independence and Retirement

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A book discovery service called Shepherd.com has just published a multi-book review by me about my recommendations for some of the best all-time books on Financial Independence and Retirement. You can find the full review by clicking here. Shepherd.com is a year old; an alternative to older services like Goodreads, it helps readers and authors share and discover books in various genres.

Picking just five books is of course a tricky exercise and having seen this published late in July, I soon thought of several other books I might have included as well or instead, notably David Chilton’s classic The Wealthy Barber. But it’s safe to say that with more than 2 million copies sold, that would not exactly be a ground-breaking new recommendation.

Chilton of course created a monster with the genre of the financial novel: a hybrid that combines a story and characters with an overlay of enduring financial insights and strategies for achieving financial freedom. He has spawned many imitators, such as Robert Gignac’s Rich is a State of Mind and my own Findependence Day, which is also flagged in the Shepherd reviews.

For this exercise, however, I opted to go with straight non-fiction financial books. My thinking was what books influenced me in my own journey to Semi-Retirement and Financial Independence, or the so-called FIRE movement, for Financial Independence Retire Early.

Here are the 5 books I did pick: go to the original link to get my analysis and reasons for each pick. Below I offer just a line each but each explanation is closer to 400 words so be sure to click on the original Shepherd link to get the full take on each. The five titles below each include hypertext to the Shepherd book store where you can order directly.

1.)

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence

By Vicki Robin & Joe Dominguez

Probably first for most other proponents of the FIRE (Financial Independence Retire Early) movement is this classic, subtitled Transforming Your Relationship with Money and Achieving Financial Independence.

 

 

 

2.)

Enough: True Measures of Money, Business, and Life

By John C. Bogle

The late Jack Bogle, founder of Vanguard Group, published this excellent book in 2009. To me, the title speaks for itself. The sooner you realize you have “enough,” the sooner you can quit the rat race.

 

 

 

 

3.)

How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor

By Ernie J. Zelinski

Edmonton-based author Ernie Zelinski is probably best known for this self-published international bestseller and several others, all on the theme of escaping from full-time employment as soon as possible.

 

 

 

 

 

4.)

Pensionize Your Nest Egg: How to Use Product Allocation to Create a Guaranteed Income for Life

By Moshe A. Milevsky, Alexandra C. Macqueen

This book by the famed Finance professor and a certified financial planner caters to anxious would-be retirees who do not have the luxury of having an inflation-indexed, guaranteed-for-life Defined Benefit pension plan offered by an employer.

 

 

 

 

5.)

Work Optional: Retire Early the Non-Penny-Pinching Way

By Tanja Hester

The phrase “Work Optional” describes the state of being financially independent enough that you don’t have to work for money anymore, but nevertheless choose to for reasons like having a purpose, or structure. As the subtitle suggests, it’s about retiring early without having to be a miserly penny pincher.