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.”

Who gets the Porsche — you or your investment firm? … Fees Matter! Introducing FWB TV

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The Financial Independence Hub is excited to unveil a new Internet video project on investing made possible by FWB TV,  a unit of Toronto based Financial Wealth Builders Securities.

Starting today and on a regular basis, the Hub’s sister site, Findependence.TV, will be housing video content provided by FWB TV Paul Philip CLU, CFP and his associates.  These high-quality videos generally run between two and four minutes and focus on investment strategies that are quite consistent with the content normally run on the Hub blogs.

You can find the first one by clicking on this headline:  Who gets the Porsche — you or your investment firm? … Fees Matter! Expect the next instalment in a week or two.

Q&A on the rationale for FWB TV

To introduce the series and explain the rationale, here is a Q&A between myself and FWB TV owner Paul Philip CLU, CFP:

Continue Reading…

Millennial is mortgage free at 31. Next goal: Findependence Day by 35

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Sean Cooper in front of his paid-for home

My latest MoneySense blog features 30-year old millennial and financial writer Sean Cooper, who is having a mortgage-burning party tonight to celebrate his paying off his mortgage in just three years. See Mortgage free by 31.

In an early guest blog here at the Hub, Cooper credited my financial novel, Findependence Day, with inspiring him to seek early financial independence himself. See also a second millennial’s story at Two millennials well on the way to achieving early Financial Independence.

The book argues in particular that “the foundation of financial independence is a paid-for house.”

Cooper apparently took this message to heart because. He doesn’t even turn 31 for a few more months and has set his next goal to achieve a net worth of $1 million within four years. Well done, Sean, may you serve as an inspiration to your generation!

Click on the above link at MoneySense to find the full Q&A I conducted with Sean, or see this mirror blog at sister site FindependenceDay.com.

Plain-Sight Strategy #3: Controlling Costs — Don’t spend more than you need to

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Paul Philip CLU, CFP

By Paul Philip CLU, CFP Financial Wealth Builders Securities.

Special to the Financial Independence Hub

In the first two installments of our three-part “Hidden in Plain Sight” investment strategy series, we’ve covered the importance of staying invested to earn market returns, while managing the risks involved. We’ll conclude with what may be the most obvious and powerful piece of advice of all, even if it does not seem to receive the attention it deserves.

  1. Being there
  2. Managing for market risks
  3. Controlling costs

Plain-Sight Strategy #3: Controlling Costs

Don’t spend more than you need to.

Why do investors spend more than they need to on their investments?

Revealing the Numbers

While spending less to earn more seems obvious, the costs themselves aren’t nearly as apparent. Continue Reading…

Should you help your Adult Children get out of Debt?

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Doug Hoyes

By Douglas Hoyes

Special to the Financial Independence Hub

We have all heard the expression “once a parent, always a parent,” so it’s not surprising that you may want to help your adult children with their financial problems.

A young adult may be burdened with student loans and other debts, and may have not yet had success in the job market. As a senior adult, perhaps having already achieved Findependence, is it wise to financially help your adult children?

The first question to consider is: will giving them money truly help them? You won’t be around forever, so at some point your offspring must learn to fend for themselves. Letting them deal with their financial problems now, on their own, while you are still around to provide moral support may be in their long-term best interests.

Such assistance could jeopardize your own financial security

Of greater concern is that financially assisting your adult children could jeopardize your own financial security.

In my firm’s recent Joe Debtor study we discovered that, of people who go bankrupt, seniors and pre-retirement debtors have the highest levels of unsecured debt of all age groups. If the only way you can help your children is by going into debt yourself, you put yourself at risk for serious financial problems. Continue Reading…

What it means to Retire with Debt

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doug
Doug Hoyes

By Douglas Hoyes

Special to the Financial Independence Hub

It’s a reality that Canadians are increasing their personal debt load.

Whether or not the debt levels they are carrying are cause for concern depends on who you talk to and on what day. On one day you will see a story that debt-to-income ratios, now at 163%, are at record highs and households are standing on the precipice. The next day you will read an article about how interest rates are at an all-time low, making debt affordable.

I can confidently say that my opinion doesn’t change from season to season or year to year. In my opinion, debt does not go well with either retirement or Findependence.

Seniors accounting for more bankruptcies

Granted, I’m an insolvency professional: a bankruptcy trustee who sees people who have accumulated an extreme amount of debt. Every two years at my firm, Hoyes, Michalos & Associates Inc., we review all of our client files to determine who is carrying debt and why. In our Joe Debtor study this year we discovered that seniors represent an ever increasing percentage of total bankruptcy filings. Even worse, they have the highest level of unsecured debt of any age group at the time of filing, with over $69,000 of unsecured debt. Continue Reading…