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.”

Eternal Truth #3: Get out of Debt

Posted By Jonathan Chevreau | June 17, 2015

Depositphotos_35796001_xs — Eternal Truth #3

The third of the seven-part series on the Eternal Truths of Personal Finance is in the Wednesday Financial Post today, as well as online under the headline The No. 3 eternal truth of personal finance: Pay off Your Debt First.

Part 1 ran last Wednesday and Part 2 on Saturday. You can find links both in the Hub’s weekly wrap on Saturday.

As I noted this morning on Twitter, it’s ironic that Christie Blatchford’s piece on Mike Duffy today revealed that the beleaguered former broadcaster was unable to live within his means, despite drawing a not-inconsiderable salary of $120,000 a year: Audit shows Mike Duffy was unable to live within his means.

Not for nothing did we kick off the Eternal Truths series with Live within your means!

What is financial freedom?

Posted By Financial Independence Hub | June 14, 2015

By Jack Crew,

Special to the Financial Independence Hub

For the majority of young adults, the most common New Year’s resolution is to earn financial freedom. Unfortunately most of them fail to achieve what they set up as a goal on New Year’s Day.

That’s because they have only a vague idea about what financial freedom is all about. For most of us, financial freedom means having enough money that we can us spend on whatever we want. While earning a lot of income and enjoying control over expenses are important financial objectives, this by itself cannot be a true definition of financial freedom.

A precise definition is not universal, as many pundits have different takes on the subject. Here ’s what I think about ‘Financial Freedom’:

Winning Fear

Weekly wrap: Eternal Money Truths; millionaire bloggers; perils of early retirement

Posted By Jonathan Chevreau | June 13, 2015

On Wednesday, the Financial Post ran the first of seven articles by me that we’re calling The 7 Eternal Truths of Personal Finance: Eternal Truth #1: Live Within Your Means.

The second instalment ran today (Saturday): Eternal Truth # 2: Pay Yourself First.

Some of the background and rationale for the series ran earlier this week here at the Hub. I believe the series will run online and in the paper once or twice a week over the summer. Each episode is accompanied by a one-minute video.

Note that this is being housed under the Post’s “Young Money” category, which makes sense because the need to live within your means is especially apt for millennials and younger folk.

Meanwhile, on a related topic, the Globe & Mail Friday ran on update on a national strategy for financial literacy unveiled this week, titled Count Me In, Canada. The piece is titled To Bridge the Knowledge Gap, Financial LIeracy is a Two-Way Street.

Watch out, Economist warns

The cover story on the latest issue of The Economist, out mid Thursday, warns readers to Watch Out: The World is Not Ready for the Next Recession. But its briefing on the American economy in the same issue is more upbeat: Better Than It Looks.

Millionaire bloggers

Today’s retirement reality

Posted By Financial Independence Hub | June 11, 2015

By Marie Engen, Boomer & Echo

Special to the Financial Independence Hub

We all like to compare ourselves with our peers to see how we measure up to everyone else.

Here are some retirement statistics from the most recent Canadian Census, Statistics Canada and various surveys.

Age statistics

In Canada in 2014 the average age was 58.
The baby boom demographic, representing those born between 1946 and 1966, represents 30% of the population.
Within 10 years, those age 55 and over will outnumber children.
One in seven Canadians are now elderly and two thirds of the very elderly are women.
Average life expectancy is 82.5 years for women and 77.7 years for men.

Retirement statistics

7% of Canadians aged 55 and over had already retired once. Of this group, 17% returned to work.
48% returned to some form of work for financial reasons. The others had new, interesting job offers.
23% retired initially due to personal and family responsibilities or care giving.
8% retired initially due to personal health concerns.
6% retired because they qualified for full pension benefits.

The 7 eternal truths of personal finance

Posted By Jonathan Chevreau | June 10, 2015

The print edition of today’s Financial Post (June 10, page FP9) is running the first of a series of seven articles by me entitled “The Seven Eternal Truths of Personal Finance.”

Eternal Truth No. 1 is Live below Your Means.

The online link is here.

Note there is also a short video accompanying the online article, and a growing number of comments below the piece.

Here is a preamble I wrote for it:

Series Rationale: One of the most experienced personal finance writers in North America is the Wall Street Journal’s Jason Zweig. As he wrote here after writing his 250^th Intelligent Investor column, he confessed that there are only a handful of personal finance stories out there:

“I was once asked, at a journalism conference, how I defined my job. I said: My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself. That’s because good advice rarely changes, while markets change constantly.”

In this seven-part series, I look back on my two decades plus of writing about money to distill it all down to these “seven eternal truths.”

As far as I know, the second instalment will run a week from now.