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.”

How to enjoy your retirement while getting paid

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By Carlos Blanco

Special to the Findependence Hub

Spending a week in Napa’s wine country, enjoying the good life during retirement, and meeting new friends. Sounds like a dream, right? Having the chance to do all this and be paid might sound too good to be true, but I assure you: it’s possible!

For more than a year, I’ve been using an app called Instawork to pick up shifts whenever and wherever I want. I found the platform through a friend and began using it to pick up shifts in order to build a work schedule that best suits my personal schedule. It’s been a wonderful experience where I’ve been able to meet new people and experience different facets of the world. As a friendly guy who likes socializing, it’s been a perfect fit for me.

Prior to using Instawork, I worked as a journalist. That ranks up there as one of the most stressful careers you can have. That kind of stress can take a toll on you after a while and with me it did. The hospitality shifts I’m working now are much more relaxed and I’m truly enjoying myself. From coordinating and assisting at events throughout the year to interacting with clients and guests at a variety of different locations, no two shifts are the same. As an added bonus, I can expand my budding coaching career and attract new clients from different walks of life.

Despite Great Resignation, many still want to work

There’s a lot of talk right now in the news about the Great Resignation and the Great Reshuffle and how people don’t want to work or how the economy is dying. The pandemic shook everything up and made a lot of people reevaluate how they were living their lives and what they wanted out of work. In my view, the economy is not dying and people absolutely do want to work. They just want to do things their way, on their terms, be treated fairly, and to get paid well while doing it. The country and its hourly workers are in a period post-pandemic, where people are just transitioning from one place to another and deciding what type of jobs works best for them. Continue Reading…

Tax season is over: or is it?

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To reduce future tax bills, now is the time to start planning

By Rob Cordasco

Special to the Financial Independence Hub (American Content)

With this year’s income-tax-filing deadline finally past, you may have sat back with a sigh of relief, happy to forget about taxes for another year. But that’s a mistake because it’s already time to start thinking about taxes for next year if you hope to lower the amount you ultimately will owe, says Rob Cordasco (www.cordasco.cpa), a CPA and author of A Framework for Growth: Smart Financial and Tax Planning Strategies Throughout the Entrepreneurial Life Cycle.

“People often make the error of only worrying about taxes when it’s time to file,” Cordasco says. “By then, your taxes are pretty much locked in. Although you can’t avoid taxes, you can take steps to minimize them. But this requires proactive planning – estimating your tax liability, looking for ways to reduce it and taking timely action.”

And timely, he says, isn’t waiting until the week before the filing deadline. The real deadline for taxes in the United States – at least for taking action that could save you money – is Dec. 31 of the tax year, he says. (One exception is that you may be able to make a tax-deductible IRA contribution right up to the filing deadline if you meet certain criteria.)

Cordasco says some things to consider that can help you reduce the tax bill you will owe come April 2023, include:

“Bunch” charitable donations

Many people take the standard deduction when they file their taxes because that’s higher than their total itemized deductions. But Cordasco says you might benefit from “bunching” your charitable donations in alternating years, raising the amount you could itemize every other year. Here’s how that would work: If you make a large donation on Jan. 1 and another on Dec. 31, those donations are essentially a year apart, but they fall within the same tax year for itemizing purposes. In effect, you make two years worth of charitable donations in one tax year. Continue Reading…

How to practice Frugality: 11 simple ways to live more frugally

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 How do you practice frugality? 

To help you live more frugally, we asked finance professionals and business leaders this question for their best advice. From buying used or refurbished items to cutting down on food spending, there are several practical steps to help you adopt a more frugal lifestyle.

Here are eleven simple ways to practice frugality: 

  • Buy Used or Refurbished Items
  • Understand the Time Value of Money
  • Spend Cash
  • Eliminate Unnecessary Subscriptions
  • Adopt Eco-friendly Lifestyle
  • Understand the Time Value of Money
  • Sell Whatever you don’t Need
  • Invest in Things that Add Value to Your Life
  • Purchase Quality over Quantity
  • Live Within Budget
  • Develop a Habit of Prioritizing
  • Cut Down on Food Spending

Buy Used or Refurbished Items

You can pay a fraction of the price to buy used or refurbished items. From furniture to electronics, books, clothing, and more, you may be surprised how much treasure can be found online or in thrift stores.  A whole house or office could be furnished or decorated with used or refurbished items, and you’ll save hundreds or even thousands of dollars in the process.  Plus, the stock is always changing, so with each visit to a thrift store there’s always a chance to find something unique. You can also look out for neighborhood garage sales and online social media sales groups. –Brian Greenberg, Insurist

Spend Cash

I am a big fan of carrying cash. It’s easy to get into the habit of swiping your debit card for every purchase, but you can lose track of how much money you have if you’re not careful. That’s why I always prefer to withdraw fun money from the bank so I always know exactly how much I have to spend. This strategy really helps me to be more mindful of my purchases. Understanding frugality is a skill everyone should master. —Jae Pak, Jae Pak MD Medical

Eliminate Unnecessary Subscriptions

Try to limit your subscriptions. For instance, if you have both Netflix and Hulu, perhaps you can decide to commit to just one of these, since they both have plenty of movie and TV show options. Consider the things that you do not really need to be spending money on. Once you eliminate these things, the money saved will add up. –Jared Hines, Acre Gold

Adopt Eco-friendly Lifestyle

I have found that adopting an eco-friendly lifestyle can really reduce expenditures. LED bulbs generate the same amount of light while using much less energy, and setting my thermostat lower has reduced both gas and electric bills in winter. It also never hurts to turn off lights whenever you’re not using them. As energy prices go up, an eco-friendly life can help ease some of your financial burden. —Candie Guay, Envida

Continue Reading…

Death of Bonds or time to buy short-term GICs?

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My latest MoneySense Retired Money column looks at a recent spate of media articles proclaiming the “Death of Bonds.” You can find the full column by clicking on the highlighted headline: Do bonds still make sense for retirement savings?

One of these articles was written by the veteran journalist and author, Gordon Pape, writing to the national audience of the Globe & Mail newspaper. So you have to figure a lot of retirees took note of the article when Pape — who is in his 80s — said he was personally “getting out of bonds.”

One of the other pieces, via a YouTube video, was by financial planner Ed Rempel, who similarly pronounced the death of bonds going forward the next 30 years or so and made the case for raising risk tolerance and embracing stocks. The column also passes on the views of respected financial advisors like TriDelta Financial’s Matthew Ardrey and PWL Capital’s Benjamin Felix.

However, there’s no need for those with risk tolerance, whether retired or not, to dump all their fixed-income holdings. While it’s true aggregate bond funds have been in a  de facto bear market, short-term bond ETFs have only negligible losses. And as Pape says, and I agree, new cash can be deployed into 1-year GICs, which are generally paying just a tad under 3% a year;  or at most 2-year GICs, which pay a bit more, often more than 3%.

One could also “park” in treasury bills or ultra short term money market ETFs (one suggested by MoneySense ETF panelist Yves Rebetez is HFR: the Horizons Ultra-Short Term Investment Grade Bond ETF.) It’s expected that the Fed and the Bank of Canada will again raise interest rates this summer, and possibly repeat this a few more times through the balance of 2022. If you stagger short-term funds every three months or so, you can gradually start deploying money into 1-year GICs. Then a year later, assuming most of the interest rate hikes have occurred, you can consider extending term to 3-year or even 5-year GICs, or returning to short-term bond ETFs or possibly aggregate bond ETFs. Watch for the next instalment of the MoneySense ETF All-stars, which addresses some of these issues.

Some 1-year GICs pay close to 3% now

Here’s some GIC ideas from the column: Continue Reading…

Transforming the mortgage experience during inflationary times

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By Rob Shields

Special to the Financial Independence Hub

In a recent Questrade research study conducted by Leger¹, more than 8 in 10 Canadians (84%) expressed worry about the rising costs of inflation; two in five (39%) said they were very worried.

Rising inflation and the impact on mortgage costs have many worried, especially the younger demographic: approximately 45% of those polled.

The survey also found that Canadians aged 18 – 34 understand the importance of investing early and are much more likely to be investing more in their RRSPs to buy a home. Happily, this generation is committed to planning ahead, and will benefit from programs like the Home Buyer’s Plan when the opportunity is right.

Rebuilding the home ownership experience from the ground up

To ease current consumer anxiety, address pain points associated with home buying and mortgages, and help Canadians on their journey to financial independence, QuestMortgage® has been introduced as a direct-to- consumer mortgage offering to help make home ownership easy and affordable.

Designed as a simple, digital service for those looking to buy a first home or renew their mortgage, it is an alternative to traditional mortgages: available online 24/7, without the need to ever visit a branch. A QuestMortgage BetterRate™ offers low rates at the outset, with a team of dedicated mortgage advisors accessible to guide clients through the entire application process. The new service aims to change the status quo, making the process of home ownership straightforward, transparent and stress-free for Canadians of every age.  Continue Reading…