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.”

16 Financial Habits for a Prosperous New Year

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MarieEngen
Marie Engen

By Marie Engen, Boomer & Echo

Special to the Financial Independence Hub

A Fidelity Investments study discovered that setting specific financial goals does help get your fiscal house in order. 56% of those surveyed said their finances had improved, a much better result than most New Year’s resolutions.

Give yourself a financial checkup and see where you can improve your savings and spending habits.

  1. Increase your savings. Save 16% more than you would normally on all your savings, including your employee pension if you are not contributing the maximum amount already. By making modest adjustments, you won’t miss the money as much.
  1. Automate your savings. One of the easiest and most effective ways to save is to automate the process, and yet less than 40% use this technique. Set up regular transfers with your bank. Some employers will take money directly of your paycheque to invest in RRSPs, Canada Savings Bonds and other savings vehicles. Set up savings for specific expenses such as a new car, home renovations and vacations, as well as children’s education and retirement savings.

Continue Reading…

David Trahair’s contrarian stance: Be a loaner, not an owner

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125_Enough_Bull_High_Res_Cover_FinalBy Jonathan Chevreau

Financial Independence Hub

In this summer’s series on the 7 eternal truths of personal finance, one of the articles was entitled Be an Owner, Not a Loaner, which reflects the usual financial industry advice that stocks are more likely to generate long-term investment returns than cash or bonds.

There is of course a contrary view to this eternal truth and it’s best contained in the new second edition of David Trahair’s book, Enough Bull, originally published early in 2009, right at the bottom of the financial crisis..

Trahair, a chartered accountant and author, could as easily have titled his book Be a Loaner, Not an Owner, because he’s adamant that stocks (i.e. equities), whether individual or pooled through mutual funds or ETFs, are just too risky for the average person.

The book cover includes a small image of a bull (as in a steer), so clearly the title Enough Bull is a double entendre: as in no more bullish prognostications on the stock market, as well as no more bovine excrement, whether dispensed by the animals or financial advisors.

Skeptical about the financial industry and its central belief in stocks Continue Reading…

What’s your car buying strategy?

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 986b71380a0d028a001c660083788ce8By Robb Engen, Boomer & Echo

Special the Financial Independence Hub

When it comes to buying a car, most of us generally fall into two camps: those who buy new for the latest technology and safety features, and those who buy used because they believe that buying new is a waste of money.

We know cars are depreciating assets and lose the most value in the first year or two of ownership – hence the old saying that a car loses 20 to 30 per cent of its value the minute you drive it off the lot.  That’s why, historically, the best deals can be found on used cars that are one or two years old.

The problem is that both car sellers and buyers have figured this out and so supply and demand have caused the prices of used cars to rise accordingly.

New cars, on the other hand, have become increasingly more affordable as car dealer incentives, creative financing, and low interest rates drive prices down.  It’s common to see loans at seven or even eight years today to help buyers take home a new car.

I bought a new car in late 2012.  Being acutely aware of the pitfalls of buying new, I made a few rules before taking the plunge. Continue Reading…

Tips for Older Travelers

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older_travelers3
Akaisha with Billy

By Akaisha Kaderli

Special to the Financial Independence Hub

Billy and I have been on the road meandering through continents for over two decades. While we like to think of ourselves as spry, flexible and ready to take on the world, truth is, we are no longer twenty or thirty years old. Traveling at our age of 63 presents challenges that we didn’t have when we were younger. Energy levels have changed and our bodies require different comforts in order to feel well.

If you are in your fifties and sixties with active wanderlust, independent journeying is still possible. Take advantage of what we have learned over the years.

The Importance of Sleep

The value of sleep is a priority that we protect, since its absence is felt for the next day or two – creating havoc in moods, energy level and even decision making. Whenever possible, we no longer take red-eye flights. Air travel has become more complicated in recent years and it’s enough to handle the new requirements, the lines, and the disorientation of time zones without adding severe sleep schedule interruptions. Besides, what’s the rush? Continue Reading…

The hidden risks of investing money in prepaid funerals

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Patrick McKeough, TSInetwork.ca

By Patrick McKeough, TSINetwork.ca

Special to the Financial Independence Hub

Pat McKeough responds to many requests from members of his Inner Circle – a select group of customers who receive subscriptions to all four of his newsletters and are entitled to ask him specific stock and investment questions. Every week, his comments on the most intriguing questions of the 7 days go out to all Inner Circle members. Below is a highlight from these Q&A sessions.

There’s no limit to the types of financial questions Inner Circle members can ask Pat and his team of investment experts. Aside from asking for advice about investing money in specific investments (such as stocks or exchange-traded funds), members ask a wide range of other investment questions as well.

For example, a member recently asked whether there is any advantage to investing money in a prepaid funeral. So you can get a sense of how the service works, I’d like to share this question, and our answer, with you. I hope you enjoy and profit from it.

Reader Question: What’s your view on prepaid funerals? At 57 years old, it seems reasonable to me to lock in funeral costs at today’s prices and pay for it now. This makes even more sense since I can reasonably expect to live another 25 years. Funeral costs for any level of funeral have doubled every 10 years over the past 30 years, according to the brochure. Does this make sense to you?

Pat McKeough: This sounds like a consumer decision, but it’s really an investment decision, as well. When you prepay a funeral, you are investing money in a highly specialized fixed-return investment. You pay now, and get a fixed return (consisting of preselected funeral services) at an indeterminate point in the future — the few days or weeks after your death. Continue Reading…