Victory Lap

Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.

14 creative ways to make Extra Money on the side

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What is one way to make extra money on the side?

To help you find creative ways to make extra money on the side, we asked career coaches and business leaders this question for their best insights. From doing freelancing through Upwork to engaging in pet care, there are several easy ways to start making extra money in addition to your regular day job.

Here are 14 creative ways these leaders recommend for making extra money on the side:

  • Do Freelancing Through Upwork
  • Put Ads on Your Car
  • Sell Informational Products
  • Offer Gaming Services Online
  • Do Social Media Marketing
  • Become a Food Delivery Driver
  • Donate Blood Plasma
  • Sell Old Electronics
  • Try Random-Rewards Banking
  • Rent Free Space on Airbnb
  • Work as a Virtual Assistant
  • Become a Video Game Tester
  • Teach English Language
  • Engage in Pet Care

 

Do Freelancing through Upwork

We have hired a lot of freelancers from Upwork over the years who have their normal day jobs but do the same type of work on their own through Upwork in their spare time. Upwork makes it very easy to list your skills and have a company hire you for small projects. We have worked with one candidate through Upwork for over 5 years now. We will have website redesign projects and he will help us. I know this is a side gig for him and we work around his schedule, but it also saves us a lot of money not having to hire through a marketing company and getting the same level of talent. If you have any good computer skills you can find a task that you can help someone with through Upwork. It can be as simple as data entry or replying to emails, there are all types of jobs available. Being an online freelancer is nice because all you need is a computer and internet connection, there is very little up front cause to start earning extra money on the side. — Evan McCarthy, SportingSmiles

Put Ads on your Car 

A super easy way to make anywhere from $100-$300 in extra income is by simply driving your car as you normally would through car-wrapping ads. There are usually a few general requirements for legitimate car wrapping ad companies in larger cities: such as a minimum driving time as well as driving a newer car that is still in good condition. Assuming you meet these requirements, however, you can comfortably earn an extra income without making any changes to your day-to-day life. –– Kristine Thorndyke, Test Prep Nerds

Sell Informational Products

If you’ve got enough knowledge or hands-on experience in a particular field of interest, selling informational products like e-books, audiobooks, or courses is a great way to make some extra money. The best part about informational products is that once you’ve poured in your time and energy to create them, they won’t need constant attention or time: literally making you money while you sleep. — Harry Morton, Lower Street

Offer Gaming Services Online

If you’re an ardent gamer or someone who dedicates a lot of time to video games, you could make some extra money by selling gaming services online. There are a few different ways of going about this. You could offer coaching services to help others improve their gameplay or even sell in-game items and currency that you’ve acquired. You could also stream your gameplay on platforms and earn income from advertisements. The amount of income depends on how many hours you’re willing to commit and the type of services you offer. But if you’re able to build up a large following, you could potentially make a career from this side hustle job. –– Demi Yilmaz, Colonist.io

Do Social Media Marketing

In this digital world, businesses are always searching for strong social media marketers. The millennial generation or Gen Z can thrive in these positions as they spend the majority of their time on popular platforms such as Instagram and TikTok. This side gig can easily be done on your own time as freelancers can schedule posts through third-party apps like Later, and work on an influencer marketing strategy through Aspire IQ. Graphics can be made through free websites such as Canva, and all community management can be handled straight from your home office. While a content role such as social media may feel like it’s never-ending, it’s a great side hustle for those looking to advance their digital skills. — Corey Ashton Walters, Here

Become a Food Delivery Driver 

One way to meet fitness goals while making cash on the side is to run food for a food delivery app. Professionals can handily make over a thousand dollars a week part-time by working in busy delivery areas during peak hours. Depending on the area, delivery drivers can bike or use a car to maximize total deliveries during their shifts. In particularly busy cities for food delivery, such as New York, orders are certain to be nonstop on specific days of the week, guaranteeing flexible supplementary income.  Continue Reading…

Retirement, Meet Target Date Funds: The opportunities, and how they work

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By Brian See, Evermore

Special to the Financial Independence Hub

Target date funds are a fantastic investment tool, particularly for Canadians who are saving for retirement. Despite their benefits, though, they have not been made widely available to the masses yet.

If we look at our U.S. neighbor, target date funds are already taking off. In fact, target date funds hit a record US$3.27 trillion in assets in 2021, up from $52 billion in 2020. The market value speaks for itself: target date funds are here to stay, and they’re growing in popularity.

When it comes to retirement, there are many Canadians who don’t save long-term because it seems out of reach. In fact, about 1 in 3 Canadians have never saved a dime for retirement even though the majority of Canadians have expressed concern about not having enough money in retirement. To boot, record-high inflation is leading Canadians to fear a retirement crisis, and 72% of Canadians believe saving for retirement is ‘prohibitively expensive.’

We have seen target date funds play out well in the U.S. If Canada is able to further adopt this form of investing to the market, we can close this retirement investing accessibility gap.

In order to understand the opportunities that target date funds provide for investing for retirement, it’s important to break down how they work.

How Target Date Funds work

At their core, target date funds are a one-stop-shop for long-term saving and investing. Target date funds use a systematic or rules-based asset allocation where the mix of stocks and bonds changes over time as you approach the target date. The funds are a mix of stocks and bonds that increase and decrease their risk levels according to the person’s age. This “glide path” model increases risk as you’re younger, and decreases risk as you get closer to retirement because, simply put, you’ll need that money to draw upon in retirement! Target date funds are also easy to choose. You simply pick the year you want to retire and select the target date fund with that year.

Of course, with any investment strategy, there are risks. The inherent risk here is that you are investing in the market. Stocks and bonds go up and down: they ebb and flow but in the long term, markets have increased in value. A key feature of target date funds is that they are diversified across asset classes, geographies and sectors, and that diversification helps whether there is a downturn in the market or not. Target date funds weather the storm. Continue Reading…

MoneySense Retired Money feature on Canada’s new “Tontine” Retirement solutions

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My latest MoneySense Retired Money column looks at the revolutionary “Tontine” type Retire Solution announced by Guardian Capital and finance professor Moshe Milevsky earlier this month. My initial take was here on the Hub and the more in-depth MoneySense feature story can be viewed by clicking on this highlighted headline: Tontines in Canada — Moving from Theory to Practice as a solution to our Retirement Crisis.

We’ve illustrated this blog with financial projections of one of the three new Guardian Capital Retirement solutions developed in partnership with Milevsky. Some of the ideas were adapted from Milevsky’s latest book: How to Build a Modern Tontine. The theory behind this book is a driving force for Guardian Capital’s efforts to commercize these concepts and put them in the hands of retirees and would-be retirees worried about outliving their money. Nobel Laureate Economist William Sharpe has described this as “the nastiest, hardest problem in finance.”

Milvesky’s book is certainly aimed at industry practitioners and sophisticated financial advisors and investors, and contains a lot of mathematics that may beyond the reach of average investors or retirees. So rather than attempt to review it, we’ll move on to the efforts to bring these ideas to the market. What Milevsky calls “tontine thinking” is belatedly showing up in the marketplace in Canada, starting last year with Purpose Investments’ and now with three different solutions from Guardian Capital. Hub readers also can read an excerpt of the book which ran earlier Wednesday: Longevity Insurance vs Credits — a Primer.

All this has been a long time coming. MoneySense readers may recall two of my Retired Money columns about Milevsky and the future of tontines published in 2015: Part one is here and part two here. Also see my 2018 column that explains tontines in detail: Why Ottawa needs to push for tontine-like annuities.

Last June (2021), Purpose got the tontine ball rolling in Canada with its Purpose Longevity Fund. Here’s my MoneySense take on that one: Is the Longevity Pension Fund a cure for Retirement Income Worries? 

As the MoneySense feature explains, Milevsky is Guardian Capital’s Chief Retirement Architect. It sums up the original 2021 launch of Purpose Longevity Fund, and how it compares to Guardian’s three solutions.

Think of Purpose’s product as a lower-case tontine, and Guardian Capital’s as a Tontine with a capital T.

Guardian Capital’s Modern Tontine  

Guardian Capital’s September 7th press release uses the term “Modern Tontine.” There, Guardian Capital Managing Director and Head of Canadian Retail Asset Management Barry Gordon said “With our modern tontine, investors concerned about outliving their nest egg pool their assets and are entitled to their share of the pool as it winds up 20 years from now … Over that 20-year period, we seek to grow the invested capital as much as possible to maximize the longevity payout.”

 Along the way, investors who redeem early or pass away leave a portion of their assets in the pool to the benefit of surviving unitholders, boosting the rate of return. “All surviving unitholders in 20 years will participate in any growth in the tontine’s assets, generated from compound growth and the pooling of survivorship credits. This payout can be used to fund their later years of life as they see fit, and aims to ensure that investors don’t outlive their investment portfolio.” Continue Reading…

Longevity Insurance vs. Credits: A Primer

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This guest blog is excerpted from Moshe Milevsky’s recently published book, How to Build a Modern Tontine

By Prof. Moshe A. Milevsky, Ph.D.

Special to the Financial Independence Hub

I have been asked about the difference between a tontine – be it modern or medieval – and a conventional life annuity, purchased from a regulated life insurance company. Both might appear to perform similar tasks at first glance, but the differences are subtle and important and get to the essence of the distinction between longevity insurance versus longevity (or survivorship) credits.

One aspect of the life annuity story is the financial benefit of risk pooling, and the other is the insurance benefit and comfort from having a guaranteed income that you can’t outlive. Allow me to elaborate with a statement that some readers might find shocking. If you are 75 years old with $100,000 in your RRIF and would like to guarantee a fixed annual income for the rest of your life, there is absolutely no need to purchase a life annuity from an insurance company to achieve that goal. There are other options.

This might sound like something odd for a long-term annuity advocate to say. But the fact is that a non-insurance financial advisor can design a lovely portfolio of zero-coupon strip bonds that will do the job. That collection of bonds will generate $4,000 per year for the rest of your life, even if you reach the grand old age of 115. Ok, financial advisors need to eat too, so they may not do it for $100,000, but I’m sure that a lump sum of $1,000,000 will pique their interest and in exchange you will get $40,000 per year.

Moreover, with these strips, if you don’t make it all the way to the astonishing age of 115, they will continue to send those $4,000 (or $40K) to your spouse, children or favourite charity until the date you would have reached 115, if you had been alive. This collection of strips would be completely liquid, tradeable and fully reversable, although subject to the vagaries of bond market rates. For this I have assumed a conservative, safe and constant 2.5% discount rate across the entire yield curve, which isn’t entirely unreasonable in today’s increasing environment.

Stated technically, the present value of the $4,000 annual payments, for the 40 years between your current age 75 and your maximum age 115, is exactly equal to $100,000 when discounted at 2.5%. Yes, those numbers and ages were deliberately selected so my numerical example rhymes with the infamous 4% rule of retirement planning but has absolutely nothing to do with it.

Now, I’m sure you must now be thinking (or even yelling) “Moshe, but what if you live beyond age 115, eh? You will run out of money!”

Touché. Let’s unpack that common knee-jerk reaction to non-insurance solutions for a moment. To start with, the probability of reaching age 115 is ridiculously and unquantifiably low. If you do happen to be the one in a 100 million (or perhaps billion) that reaches age 115, I suspect you will have other things on your murky mind. Personally and post-covid, there is a very long list of hazards that worries me more than hitting 115.

Nobody really “runs out of money” in this century

Second and more importantly, nobody really “runs out of money” in retirement in the 21st century. That is plain utter fear-mongering nonsense. With CPP, OAS/GIS, the elderly will continue to receive some income for as long as they live even if they have completely emptied every piggy bank on their personal balance sheet. In fact, with tax-based means-testing you might get more benefits if you actually do empty your bank accounts.

Ok, so back to my prior claim and the supporting numbers, if you want a guaranteed (liquid, reversable, bequeathable) income for the rest of your life, you can exchange your $100,000 for a bunch of strip bonds and voila, you have created a sort of pension plan. My point here is that the primary objective isn’t a guaranteed lifetime of income: which anyone can create with a simple discount brokerage account and a DIY instruction manual. Continue Reading…

New retirement: Case study with Cascades Financial Solutions

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Photo by Gustavo Fring

By Ian Moyer

(Sponsor Content)

A Canadian couple living in Nova Scotia are approaching retirement. Carlos is 64 and his wife Arlene is 61. They have one adult adopted child who lives on their own with the couple’s three grandchildren. Carlos and Arlene live close to their daughter and help with the grandchildren often, so being able to stay in their home is important.

After two extended careers in the public sector with a combined annual income of $180,000, Carlos and his wife Arlene decided it was time to retire beginning March of the following year.

Managing the family finances Carlos and Arlene were able to save the following for retirement:

Carlos

  • $250,000 Registered Retirement Savings Plan (RRSP), contributing $5500 annually until retirement
  • $31,500 annually from a Defined benefit pension
  • $ 21,000 in A Tax-Free Savings Account (TFSA), contributing $1500 annually

Arlene

  • $290,000 Registered Retirement Savings Plan (RRSP), contributing $5500 annually until retirement
  • $33,600 annually from a Defined benefit pension
  • $ 30,000 in A Tax-Free Savings Account (TFSA), contributing $1500 annually

Carlos and Arlene dream of traveling to various countries and plan to take 3 trips a year and assume they would need a total of $15,000 annually to do so for 8 years. After traveling they would like to contribute to Registered Education Savings Plans (RESP) for each of their grandchildren totalling $3000 a year.

More recently, when the market experienced volatility, Carlos’ portfolio took a big hit. Making adjustments to spending, Carlos was able to recuperate most of his losses and is now back on track with his goals.

“The more you learn, the more you earn.”
— Warren Buffett

A key consideration in Cascades is to take a look at the retirement budget: using their employment income as a starting point to determine how much retirement income they require. It is well known and generally accepted that you will require less income in your retirement years, but how much less? In making this determination the couple can consider they no longer have employment income deductions like CPP and employment insurance, retirement savings, costs related to traveling to work, retirement income tax credits, etc. Carlos used their employment income after these deductions, taxes, and employment expenses and compare that with the projected retirement income. Carlos assumes he would need approximately $120,000 annually.

Carlos believes he has a good understanding of financial planning strategies, but he finds decumulation a bit overwhelming and wanted to learn more to personalize his retirement income based on their needs: using Cascades Financial Solutions retirement Income planning software and to plan for his retirement.

After entering his data into Cascades Financial Solutions Carlos’ report determined the best retirement decumulation strategy would only allow him to receive an after-tax amount of $116,945 per year.

The couple has a few options to offset the$3,055 retirement income shortage.

Life Annuity option: The couple can consider allocating some of their savings to a life annuity that could help achieve a higher sustainable retirement income. These vehicles are a great way the shift the burden of making their money last forever and can often have attractive capital payout ratios throughout the retirement years due to their “mortality credits.” Continue Reading…