For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.
Canada has a bold vision – to build a more accessible, inclusive and effective financial literacy ecosystem for all. The five-year plan, laid out in the National Financial Literacy Strategy 2021-2026, is an important step forward to achieving sweeping financial literacy. But one cohort is noticeably absent from this ambitious strategy – older widowed women.
During Financial Literacy Month in November, we had an opportunity to cast a light on financial education and empowerment for this often overlooked and underserved, but statistically significant, group. In 2022, there were approximately 1.5 million widowed women compared to the roughly 472,000 widowed men, reports Statista Research Department. As our nation nears “super-aged” status, where 20 per cent of our population will be 65 years or older, these numbers will continue to climb.
Longer life expectancies for women, paired with women generally marrying or partnering with older men, leaves them more likely to spend at least some of their retirement in widowhood. As such, it’s estimated that 90 per cent of women will become the sole financial decision-maker at some point in their lifetime, representing a substantial segment of Canada’s wealth management sector.
Lower financial literacy than male counterparts
However, this same group generally reports lower levels of financial literacy than their male counterparts. While many reasons account for this disparity, traditional societal norms play a significant role – older generations of women were more likely to stay home and rear children while men typically joined the workforce, granting them greater financial exposure.
Now, we have an opportunity and a responsibility to change this. Widespread financial literacy matters, but in our effort to educate the masses we can’t leave certain groups behind. By narrowing the knowledge gap, we can empower widowed women from and after the Silent Generation with a voice – we can give them a say in their own financial future.
Women will soon control half of accumulated Wealth
By 2026, women in Canada will control roughly half of all accumulated financial wealth, estimates Strategic Insights, up from one-third a decade earlier. While this is a welcomed shift, many women’s’ lack of core financial understanding and involvement is sobering. Too often, it’s men who assume a leading role in personal wealth management, specifically retirement and estate planning. This despite the fact that women, on average, survive their husbands by roughly five years. Yet, only 17 per cent of women in Canada over the age of 65 have an up-to-date will, according to a survey from LegalWills Canada. Continue Reading…
By Andrew Lo, President & CEO of Embark Student Corp.
(Sponsored Post)
The pursuit of higher education is a cornerstone of personal and professional growth for many young Canadians. However, this pursuit often comes at a hefty price, with student loans being a significant barrier to financial independence. The burden of student debt can haunt graduates for years, affecting their ability to save, invest, and achieve financial stability. But there’s good news: opening a Registered Educations Savings Plan (RESP) can lighten the burden of student loans and help you help your children start their adult life debt-free by encouraging regular and early savings, offering valuable government grants, and harnessing the power of compound interest.
The Student Loan Conundrum
Canada is home to a world-class education system, but the cost of pursuing post-secondary education can be daunting. Tuition fees, books, accommodation, and other expenses can quickly add up, leaving many students with no choice but to turn to the most common method of affording post-secondary: student loans.
What some students don’t fully understand when they use student loans is that they come with interest rates that accrue after graduation. For many young Canadians, this means they start their careers with substantial debt, and few resources to help them repay their loans.
In a recent poll of Canadian students, 79% admitted that the amount of debt taken on to afford post-secondary can be debilitating. This burden of student debt can have a profound impact on a young graduate’s financial journey, with 57% of students surveyed agreeing that graduating with student debt will make it harder for them to become financially independent from their parents.
Unfortunately, the constant struggle to make loan payments often hampers their ability to save and invest in their futures. Despite this, student loans are still the most normalized way of paying for education in Canada.
There’s a better way pay for post-secondary education
One effective way to combat the student loan conundrum is to start saving for education expenses early. It can be hard to think about university and college when a child is a few years old but by beginning to save as soon as possible, families can significantly reduce their need for student loans. You’re probably thinking, “accumulating savings to cover educational costs while managing the rising cost-of-living is no easy feat.” This is where a Registered Education Savings Plan [RESP] comes into play.
RESPs are powerful tools that Canadians can take advantage of to fit the post-secondary bill. They can be opened by the parents or guardians of a child, other family members, or friends, to save over a total period of 35 years. By contributing regularly to an RESP, families can build substantial savings to cover tuition and related expenses. Starting early allows for smaller, manageable contributions over time, reducing the financial stress associated with higher education. The most valuable part of this savings tool is that it opens your savings up to a world of government grants that you can qualify for.
Unlocking “Free Money” with Grants
One of the most compelling features of RESPs is the opportunity to acquire “free money” in the form of grants. The Canadian government provides a generous grant called the Canada Education Savings Grant (CESG) as a reward for saving, allowing you to collect up to $7200.
This grant matches 20% of your contributions on the first $2,500 saved annually. Over the years, if you contribute $2500 annually to an RESP, this works out to an additional 20% being added to your first $36,000 saved without even considering investment gains. By maximizing these grant opportunities, families can alleviate the financial strain of higher education and better prepare for the future. Continue Reading…
Aspiring homeowners and families looking to invest in property often seek expert advice. To provide a range of perspectives, we’ve gathered sixteen pieces of advice from CEOs, founders, and other industry professionals. From understanding the market rather than chasing it, to securing a property warranty, this article offers a wealth of insights for property investment.
Understand, Don’t Chase, the Market
Consider Property’s Rentability
Diversify Your Real Estate Investments
Seek Immediate Return on Investment
Research and Plan Your Investment
Leverage Home Inspection Power
Invest in a Fixer-Upper
Consider Total Cost of Ownership
Have a Clear Exit Strategy
Start Small in Property Investment
Diversify Your Real Estate Portfolio
Think Long-Term for Value Appreciation
Look into Emerging Neighborhoods
Define Your Investment Goals
Establish a Clear Budget
Secure a Property Warranty
Understand, don’t chase, the Market
If there’s one piece of advice I consistently circle back to, it’s this: don’t just chase the market, understand it. Now, that might sound a bit cliche, but let me unpack that for you with an example and a personal anecdote.
Many aspiring homeowners or investors get drawn into this frenzy of buying property anywhere there’s a buzz. You know, a new major employer coming into the area, a big infrastructure project announcement, or maybe where there’s a sudden spike in property values. But here’s the twist: not every “hot” market is suitable for every investor. — Shri Ganeshram, CEO and Founder, Awning.com
Consider Property’s Rentability
I’d suggest considering the “rentability” of the property. If your circumstances change and you need to move, having a property that’s attractive to renters can provide a steady income stream.
Look for properties with features that are in high demand in the rental market, such as a good layout, modern amenities, and proximity to employment centers. I’ve seen clients turn unexpected relocations into opportunities by choosing properties that are easy to rent, thereby securing a secondary income source. — Alexander Capozzolo, CEO, SD House Guys
Diversify your Real Estate Investments
Different types of real estate investments, such as residential properties, commercial properties, or vacation rentals, can react differently to market fluctuations. By spreading your investments across various property types, I’ve seen how it can reduce the overall risk associated with real estate investing.
I’ve witnessed that diversification can provide a more stable income stream. For instance, while one property might experience a vacancy, another may continue to generate rental income.
I’ve found that different markets may perform differently at various times. By advising clients to invest in properties in different geographic locations, I’ve seen them benefit from a broader range of market conditions. — Ritika Asrani, Owner and Head Broker, St Maarten Real Estate
Seek Immediate Return on Investment
One piece of real estate investment advice I’d give is to focus on buying property that can give you a return on investment (ROI) immediately. That’s because when interest rates are high, property prices decrease, making it harder to know what kind of appreciation you can expect in the future.
As a bonus tip, invest where there are median-priced homes to maximize your returns. For example, if you invest in a $300,000 house with an 8% versus a 4% interest rate, the mortgage difference would be just $615 per month.
On the other hand, if you invest in a $1 million property with the same interest rates (8% versus 4%), the mortgage difference you’d pay would be over $2,000 per month.
Ultimately, to maximize your returns and minimize risk as an investor, buy properties that will give you cash flow from day one and limit your mortgage payments. — Ryan Chaw, Founder and Real Estate Investor, Newbie Real Estate Investing
Research and Plan your Investment
Thoroughly research the local real estate market dynamics. Understand not only current property values but also potential growth or decline in the area. In our global property management experience, we’ve seen the value in choosing properties located in areas with growing job opportunities, infrastructure development, and a strong community presence.
Additionally, always factor in the long-term perspective: real estate typically appreciates over time, so patience and a well-planned strategy can yield returns. Consider your investment goals and financial capabilities carefully. Determine whether you seek rental income, capital appreciation, or both. Calculate a budget, including property purchase, maintenance, and potential vacancies.
Finally, don’t underestimate the significance of a property management company, especially if investing in different locations or operating remotely. Their expertise can help navigate property investment complexities and ensure your investment thrives. — Johan Hajji, CEO and Founder, UpperKey
Leverage Home Inspection Power
One tip I’d offer is to leverage the power of “home inspection” before finalizing any deal. A thorough inspection can reveal potential issues like structural damage or outdated electrical systems, allowing you to either negotiate the price or avoid a money pit.
I‘ve had clients who saved thousands by using the findings of a home inspection to negotiate a lower purchase price, turning what could have been a costly mistake into a savvy investment. — Gagan Saini, CEO, JIT Home Buyers
Invest in a Fixer-Upper
My career in remodeling and carpentry started with a real estate investment. I bought a home in disrepair for very little money and began piecing it together, learning how to perform various construction tasks along the way.
At first, I just got one room livable. Then, at night and on weekends, piece by piece, I finished the kitchen, then the bathroom, then the basement. If you enjoy problem-solving and working with your hands, you’ll enjoy a fixer-upper much more than a property that you paint and resell. — Rick Berres, Owner, Honey-Doers
Consider Total Cost of Ownership
One piece of advice would be to think long term and consider the “total cost of ownership,” not just the purchase price. This includes property taxes, maintenance, and potential homeowner association (HOA) fees.
I recommend it to create a detailed budget that accounts for these ongoing costs to ensure the investment is sustainable in the long run. Clients who’ve taken this holistic approach have been better prepared for the financial responsibilities of property ownership, avoiding unexpected financial strain down the line. — Erik Wright, CEO, New Horizon Home Buyers
Have a Clear Exit Strategy
Have a solid exit plan from the get-go. It’s not just about buying a property; it’s about understanding how you’re going to profit from it. Are you looking for long-term rental income, or do you plan to flip the property for a quick return?
Having a clear strategy helps you make informed decisions and ensures that your investment aligns with your financial goals. Real estate can be a fantastic wealth-building tool, but knowing your exit strategy keeps you on the right path to success. — Loren Howard, Founder, Prime Plus Mortgages
Start Small in Property Investment
Start small. For aspiring homeowners or families looking to invest in property, it is important to start small. While it may be tempting to jump into a larger, more expensive property as your first investment, starting with a smaller and more affordable property can be a smarter financial decision in the long run.
By starting small, you will have less risk and financial burden, allowing you to learn and gain experience in the real estate market without being overwhelmed. Additionally, starting small will also give you a better understanding of your financial capabilities and help you make more informed decisions for future investments.
Furthermore, starting with a smaller property can also provide potential for quicker returns on investment. With lower purchase prices and potentially lower maintenance costs, you may be able to see profits sooner than with a larger, more expensive property. — Keith Sant, CMO, Eazy House Sale
Diversify your Real Estate Portfolio
I would advise diversifying your portfolio if you’re searching for real estate investment tips. Think about making investments in a variety of real estate, including commercial, residential, and even holiday rentals. This diversification can create several income streams while reducing risk. Continue Reading…
It’s never a bad idea to carefully organize your belongings. Discover a few important reasons to make estate planning part of your retirement process.
Adobe Image by Daenin
By Dan Coconate
Special to Financial Independence Hub
Retirement may feel like a distant prospect for many, but it’s never too early to start planning for your golden years.
Many people focus solely on their financial savings and investments when it comes to retirement preparations, but estate planning is another crucial element to consider. Estate planning not only protects your hard-earned assets, but it also ensures they go to your specified loved ones. Explore five essential reasons to incorporate estate planning into your retirement strategy.
Protecting your Legacy and Loved Ones
One of the main goals of estate planning is preserving your legacy after you’ve passed. A proper estate plan safeguards your assets for future generations by outlining your wishes for the distribution of your estate. This includes creating a will, designating beneficiaries for your assets, and even making provisions for minor children. By keeping your estate plan up to date, you’re setting your loved ones up for success and protecting them from legal disputes.
Avoiding Probate and Minimizing Taxes
Probate can be a long, costly, and complicated process, draining your estate’s value and leaving your loved ones in limbo. A well-crafted estate plan can help avoid probate by designating beneficiaries and establishing trusts. In addition, estate planning can minimize or eliminate the taxes your heirs will have to pay. By using smart planning strategies during retirement, such as gifting assets to heirs, you can potentially reduce estate taxes and maximize the wealth passed down to your loved ones. Continue Reading…
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