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.”

Weekly Wrap: Eternal Truths 3 & 4, psyching up for Retirement, best rideshare deals

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Home sweet home concept illustartion with house, ribbon, bird and flowers

This week, two more instalments of my “Eternal Truths of Personal Finance” series were published in the Financial Post.

Wednesday featured Eternal Truth #3: Get out of Debt.

Saturday featured Eternal Truth #4: Buy a Home and Pay if Off as Soon as Possible. At least that was my original headline: you can find it online under the title Eternal Truth #4: Don’t be a Renter.

In my book, Findependence Day, this truth is expressed as “The foundation of financial independence is a paid-for home.”

Of course, in cities like Vancouver, Toronto,  San Francisco and several other California cities, critics of sky-high housing prices continue to argue that renting and putting the difference in the stock market may make more sense. In Friday’s Financial Post, just this argument was made in no uncertain terms: You’d have to be crazy to buy real estate.

I’m not sure I’d be buying at these prices today but am glad we bought a starter home in 1988. It didn’t stop us from building a healthy stock portfolio as well: I don’t see home ownership and investing as mutually exclusive propositions. Continue Reading…

Eternal Truth #3: Get out of Debt

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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?

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Wooden signpost with two opposite arrows over clear blue sky, Debt versus Financial Independence messages, Personal Finance conceptual imageBy 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

Continue Reading…

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

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Young business woman is saving money for the company

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

Continue Reading…

Today’s retirement reality

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MarieEngen
Marie Engen, Boomer & Echo

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.

Continue Reading…