Debt & Frugality

As Didi says in the novel (Findependence Day), “There’s no point climbing the Tower of Wealth when you’re still mired in the basement of debt.” If you owe credit-card debt still charging an usurous 20% per annum, forget about building wealth: focus on eliminating that debt. And once done, focus on paying off your mortgage. As Theo says in the novel, “The foundation of financial independence is a paid-for house.”

Robo advisers will expand beyond investing to insurance & lending

Posted By Financial Independence Hub | November 29, 2016

By Pramod Udiaver

Special to the Financial Independence Hub

While the online advice industry is still relatively new to Canadian investors, the breadth of online financial services has been evolving quickly. This is good news for investors who are looking for more goal-based investing options and services that consolidate their various financial needs.

Goal-based investing considers a client’s goals and the steps needed to achieve them. This practice helps investors see their financial goals as easy-to-navigate paths, with clear beginnings and ends. It ensures investors fund their accounts based on desired results, rather than how much they think they might need. And it takes the uncertainty out of investing by showing exactly how and when each goal will be achieved.

While investing and insurance goals are not generally planned under the same service, insurance is an important part of any financial plan and the goal-setting process. Progress towards our goals can be thwarted by events like disability, serious illness, or the death of a loved one.

Role of insurance

We see that in many cases, even if one of these events were to occur, clients say they would still want to stay on a path to achieve their goals. Proper insurance can help them stay on track by replacing a portion of their income while they are disabled, allowing them to maintain a desired standard of living and keep saving. Life insurance can ensure that goals set for one’s family, like sending kids to good schools, allowing the surviving spouse to retire comfortably, or the desire to leave a legacy in the form of a charitable donation, can still be achieved.

Which type of credit card is best for you?

Posted By Financial Independence Hub | November 24, 2016

Travel and tourism concept. Air tickets, passports and credit cards, tourism and planning, vector illustration — Travel a lot? A travel rewards credit card may be just the ticket.

By Alyssa Furtado, RateHub.ca

Special to the Financial Independence Hub

When it comes to choosing a credit card, it’s easy to feel overwhelmed by the number of different options available. Although it might seem simplest to choose one with your current bank or go with whatever your friends use, you could be leaving rewards such as cash back on the table by taking a one-size-fits-all approach.

Here are four common profiles and the best type of credit card for each.

Frequent flyer

Making the most of vacation days can be expensive, especially if you like to travel. However, you can often help offset these costs using a travel rewards credit card. There are some great travel rewards programs in Canada where you can start collecting points. But because each program is different, make sure you know how they work.

The BMO Rewards Program is a good example, because for every dollar you spend you can earn up to two points. You can then redeem 100 points for $1 back on a wide range of categories including flights, hotels, car rentals and even merchandise or gift cards. Your everyday spending can really start to add up – for example, if you spend $1,500 a month using the BMO World Elite MasterCard, after a year you would have enough points to redeem $360 in value.

Travel cards often also offer good value because most come with a range of insurance benefits such as lost or delayed baggage, trip delay or cancellation and medical coverage. You can then relax on your travels, knowing that if something does go wrong, you’ll be covered.

Big spender

If you like to use your credit card for most of your everyday purchases and bills, you should look to maximize your rewards with a premium rewards credit card. Many of these cards have an annual fee, but if you’re a big spender, the net reward from premium cards are often much higher because the earning potential is usually much higher than with no fee credit cards.

The best rewards cards typically fall into two categories – travel and cash back. If you’ve decided that you don’t fit into the frequent flyer category above, consider instead a cash back credit card. With this type of card, the amount you can redeem typically starts at around 1%, but can get as high as 4% or even more with special promotions.

Game-winning shopping hacks for Black Friday & Cyber Monday

Posted By Financial Independence Hub | November 23, 2016

By Sari Friedman, Ebates Canada

Special to the Financial Independence Hub

Get the coffee brewing and put your game face on! Thanks to our American neighbours, Black Friday and Cyber Monday sales are about to kick off the busiest shopping season of the year, with deep discounts and exclusive online offers.

Canadians are feeling pretty generous this holiday season, with 84 per cent saying they plan on spending almost $200 more than last year, according to our recent Ebates.ca poll. Whether looking for deals in Canada or across the border, more Canadians are turning to online shopping to avoid the chaos, with 82 per cent saying they will make at least some holiday purchases online.

While you won’t need a helmet and elbow pads to score a deal for these two big shopping days, a little preparation and some savvy strategies will help make sure you stay ahead of the competition – and within your budget.

Don’t believe the hype

The best way to know whether a deal is really a deal is to do your research beforehand. Make a list of items that you’re interested in, then do some recon to compare prices, features, quality and special offers across various retailers. You may find a similar item to what you’re looking for that is a better deal, or at the very least, you’ll have a solid back-up choice that you can still be confident buying.

Limit your spend

It’s easy to get carried away in the chase for a deal, but it’s important to set yourself limits or you risk blowing your budget: game over! Stick to the items on your budgeted list and avoid impulse purchases. That ‘blowout’ price may seem cheap in the moment, but is it really worth it if your purchase sits in your closet or on a shelf, unused?

Sign up ahead of time

Residential Buy- and Sell-back Agreements: a new option for Boomers?

Posted By Financial Independence Hub | November 19, 2016

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

In today’s real estate market, buying a house is less a traditional rite of passage and more a Herculean feat, especially for Millennials scraping together a down payment in Toronto or Vancouver. To them, the concept of owning a detached dwelling, complete with yard and picket fence, is a faded – and financially unfeasible – memory.

But it was a reality for Canada’s 9.6 million Baby Boomers, many of whom bought in their early 20s, and are still living in the family home. And, given the explosive surge of housing prices over the decades, a fair share of those Boomers have seen their investment grow by hundreds of thousands of dollars. Consider this – according to the Toronto Real Estate Board, the average Toronto home sale price was $75,694 in 1980, compared to September 2016’s average of $755,755 – an 898% increase!

These homeowners face a choice: sell while the market is hot (especially as new mortgage rules designed to cool demand go into effect), or stay put. For many, it’s not an easy decision. They may feel cashing out isn’t worth parting with the beloved family abode. Others may wish to sell, but dread navigating bidding wars and other competitive tactics when buying their next home. For some, “downsizing” may just be a dirty word. So, what options do these Boomers have?

Sell and Lease-back agreements offer an option

To address this conundrum, some seniors have turned to what is traditionally a commercial real estate practice: buy- and sell-back agreements. In these transactions, a home is sold to an investor buyer while the previous owner continues to live in it as a leased tenant. It’s a method growing in popularity, and can seem the best of both worlds, but it certainly comes with its pros and cons. Here’s what Boomers should keep in mind if considering a sell and lease-back agreement:

Pro: It’s attractive for Investors

Survey finds financial security beats milestones like buying a home and a car

Posted By Jonathan Chevreau | November 7, 2016

wuxiznbo — Laurie Campbell, Credit Canada Debt Solutions

In one of my books I’ve argued that young people should adopt the slogan “Freedom, Not Stuff” as a way to remind themselves that financial independence beats accumulating possessions via debt.

Now a survey being released by Credit Canada Debt Solutions and Capital One Canada has released a survey saying Canadians think financial security beats milestones like buying a home or a car. The two organizations are celebrating ten years of building financial literacy through Credit Education Week, which runs this week (Nov 7 to 11th).

The survey of 600 in four major regions of Canada asked consumers to share insights into their financial wins. While there’s a perception that Canadians hold the goal of home ownership above all else, the survey found that in reality, they rank milestones like buying a home (12 per cent) or car (8 per cent) as less important financial wins than feeling financially secure in their daily lives (25 per cent).

“There is so much to learn from the positive, everyday financial experiences of our friends and family,” says Brent Reynolds, Managing Vice President of Capital One Canada. “Milestone moments like a new home or car may garner more ‘likes’, but it’s the experiences not easily shared in 140 characters that are most impactful – like how we took charge of our finances or recovered from a financial stumble.”

80% reported a financial win this year

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