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The best Cryptocurrency Payment Apps and Wallets in 2021

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Different coins of crypto currency, including ethereum, litecoin, bitcoin, monero, ripple, and dash.

By Hristina Nikolovska

Special to the Financial Independence Hub

The latest Bitcoin bull run made many people want to jump on the train and use or store cryptocurrencies. There are many digital assets to choose from, and while wallets support most of them, the traditional payment apps have just started to experiment. PayPal was the latest company to show interest in allowing users to purchase cryptocurrencies with its app. 

Even though it covers 26 currencies in various countries, PayPal currently allows Bitcoin purchases to US citizens only. Still, that’s a great start. If you’re curious to know how to use crypto or invest in it and hold it, these are some of the best payment apps and crypto wallets to explore. 

Cryptocurrency Payment Apps

Both merchants and private individuals can use these payment apps to send and receive various coins. Fees are minimal, and payments are fast. 

Coinbase Commerce

Coinbase Commerce is one of the most famous cryptocurrency apps to help merchants accept payments. Coinbase Commerce doesn’t charge fees, and it also supports price-stable cryptocurrencies. Payments are irreversible, and merchants can immediately sell earned crypto for cash or USD coin. This app integrates with WooCommerce and Shopify. 

BitPay

BitPay is available for both personal and business users. This app can store and manage BTC, Bitcoin Cash, Ethereum, and other coins. Also, it comes with a BitPay Prepaid Mastercard. Merchants can use this app to accept crypto payments with just a 1% fee. 

Electroneum

Electroneum (ETN) is helping people across the globe pay for goods and services in-store and online. It’s accepted in more than 190 countries and brings benefits to people, merchants, and corporations. It removes the need for a bank account and provides new payment opportunities for all. 

GoCoin

GoCoin is one of the longest-running blockchain invoicing platforms. It supports Bitcoin, Bitcoin Cash, Litecoin, Ethereum, and EOS. The fee is only 1%, and the GoCoin gateway provides ultimate flexibility and security of payments for merchants. Merchants of all sizes, as well as startups, are using GoCoin all over the world.

BTCPay

BTCPay Server is an open-source crypto payment processor. It’s secure, private, and free to use. There’s no usage fee, and merchants can connect their e-commerce store or use other apps to receive payments. BTCPay is excellent for invoicing and supports WordPress, Tor, WooCommerce, Magento, and other platforms. 

The Best Wallets to Store Digital Currencies 

Even though payment apps can also serve as wallets, some cryptocurrency owners prefer to download separate software to store their investments.  Continue Reading…

How much Savings do you need to delay starting CPP and OAS?

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By Michael J. Wiener

Special to the Financial Independence Hub

 

Canadians who take their CPP at age 60 instead of 70 “can expect to lose over $100,000 of secure lifetime income, in today’s dollars, over the course of their retirement,” according to Dr. Bonnie-Jeanne MacDonald in research released by the National Institute on Ageing (NIA) and the FP Canada Research Foundation.

However, those who retire before 70 need savings to tide them over until their larger CPP pensions start if they want to live at least as well in their 60s as they do later in retirement.  Here we look at the amount of savings required by a retired 60-year old to be able to delay CPP and OAS pensions.

Incentive for delaying is strong

We’re used to thinking of CPP and OAS pensions as just a few hundred dollars per month, but a 70-year old couple just starting to receive maximum CPP and OAS pensions (but not any of the new expanded CPP) would get $61,100 per year, rising with inflation for the rest of their lives.  If the same couple were 65 they’d only get $43,700 per year.  If this 65-year old couple had taken CPP at 60, their combined CPP and OAS would be $32,700 per year now.  The incentive for delaying the start of CPP and OAS is strong.

We can think of the savings needed to delay the start of CPP and OAS pensions as the price of buying larger inflation-indexed government pensions.  This price is an absolute bargain compared to the cost of buying an annuity from an insurance company.  Those in good health but worried about “losing” if they delay pensions and die young can focus on the positives.  Delaying pensions allows retirees to spend their savings confidently during their 60s knowing that their old age is secure.  Taking small pensions early can leave retirees penny-pinching in their 60s worried about their savings running out in old age.

The table below shows the amount of savings a retired 60-year old requires to delay starting CPP.  This table is based on a number of assumptions:

  1. The current maximum age 65 CPP pension is $1203.75 per month.  Before you take your CPP pension, it grows based on national wage growth as well as an actuarial formula, but after you take it, it grows with “regular” inflation, the Consumer Price Index (CPI).  We assume wage growth will exceed CPI growth by 0.75% per year.
  2. We assume the retiree is entitled to the maximum CPP pension.  Those with smaller CPP entitlements can scale down the savings amounts.  For example, someone expecting only 50% of the maximum CPP pension can cut the savings amounts in half.
  3. We assume the retiree holds savings in an RRSP/RRIF so that withdrawals will be taxed in the same way that CPP pensions are taxed.  Retirees using savings in non-registered accounts won’t need to save as much because they only need to match the after-tax amount of CPP pensions.
  4. The retiree is able to earn enough on savings to keep up with inflation.  (Online banks offer savings account rates that put the big banks to shame.)  The monthly pension amounts in the table are inflation-adjusted; the retiree’s savings will grow to cover the actual CPP pension payments.
  5. We assume the retiree doesn’t have a workplace pension whose bridge benefits end at age 65.  This bridge benefit replaces some of the savings needed to permit delaying CPP and OAS.
CPP % of  Inflation-Adjusted Months of Savings
 Start  Age 65 CPP Monthly CPP Spending from  Needed at
Age Pension Pension  Personal Savings Age 60
60 64.0% $770 0 0
61 71.2% $863 12 $10,400
62 78.4% $958 24 $23,000
63 85.6% $1054 36 $37,900
64 92.8% $1151 48 $55,200
65 100.0% $1250 60 $75,000
66 108.4% $1365 72 $98,300
67 116.8% $1481 84 $124,400
68 125.2% $1600 96 $153,600
69 133.6% $1720 108 $185,800
70 142.0% $1842 120 $221,000

You can’t start OAS till 65 but can delay it till 70

Unlike CPP, you can’t start your OAS pension until you’re at least 65.  But you can delay it until you’re 70 to get larger payments.  The table below shows the amount of savings a retired 60-year old requires to delay starting OAS.  The table is based on a number of assumptions:

  1. The current maximum age 65 OAS pension is $615.37 per month.
  2. We assume the retiree is entitled to the maximum OAS pension by living in Canada for at least 40 out of 47 years from age 18 to 65.
  3. We assume the retiree won’t want to live poor before age 65, which means spending from savings from age 60 to 64 to make up for not receiving OAS.
  4. We assume the retiree holds savings in an RRSP/RRIF so that withdrawals will be taxed in the same way that OAS pensions are taxed.  Retirees using savings in non-registered accounts won’t need to save as much because they only need to match the after-tax amount of OAS pensions. Continue Reading…

Where to invest 2021 RRSP contributions

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By Graham Priest

Special to the Financial Independence Hub

In today’s low interest rates environment, investors are looking beyond GICs and equities to generate greater returns over the long term. The economic recovery has surpassed expectations, and individuals are looking beyond COVID-19 and a return to some normalcy by the end of the year. With this in mind, there are several different kinds of investments that Canadians could consider making from their RRSP contributions in 2021.

For example, technology stocks and other “work from home” related stocks that performed well in 2020 might take a breather in 2021 if more of us start heading back to the office.  Areas of the market that underperformed in 2020 may exceed expectations this year. For example, recently energy stocks have started to display strength. Emerging markets is another area that will likely perform well in the next year. If the USD declines in value, it will be an added benefit for emerging markets, as a large portion of their debt is denominated in USD.

Additionally, after a rough 2020, Real Estate Investment Trusts (REITs) are gaining a leadership role within the market. Many REITs have strong yields that provide income that exceeds the interest paid on government and corporate bonds. However, REITs are a good investment inside a TFSA. The income distribution from a REIT is generally taxable income, and in a TFSA, there is no tax on that income.

Put high-growth investments outside RRSP

Investments that have the potential for exponential growth may be better suited outside of an RRSP, as withdrawals from an RRSP are taxed as income. Withdrawing large capital gains tax-free from a TFSA is a better option for investors who have RRSP and TFSA accounts. Continue Reading…

The case for caution with cryptocurrencies

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Vanguard Group

Special to the Financial Independence Hub

Republished with permission of Vanguard Canada

The tremendous surge in the price of cryptocurrencies has attracted the attention of many investors, who may be considering the digital currency as a potential substitute for traditional asset classes in diversified portfolios. But Roger Aliaga-Díaz, chief economist for the Americas and head of portfolio construction at Vanguard, cautioned against speculating in cryptocurrencies, which are largely unregulated and accompanied by considerable risks.

“Cryptocurrency prices depend mostly on speculation about their adoption and use,” Mr. Aliaga-Díaz said. “And that speculation creates volatility that, ironically, undermines their potential use as either a currency or asset class in an investment strategy.”

What is a cryptocurrency?

A cryptocurrency is a digital or virtual means of exchange. There are more than 6,700 cryptocurrencies today; among the better known are Bitcoin, Dogecoin, Ethereum, XRP, Tether, and Litecoin.

Unlike traditional currencies, virtual currencies currently operate without central authorities or banks, and they are not backed by any government. Cryptocurrencies are stored in “digital wallets” on a holder’s computer or phone, or in the cloud. The wallet serves as a virtual bank account that enables holders to pay for goods and services or simply store the currency in hopes of an increase in value.

Cryptocurrencies defy neat categorization. They are not a traditional currency, commodity, or asset class, though they share characteristics of each.

There are several reasons why cryptocurrencies are not a traditional currency. Although some merchants have begun to allow cryptocurrency payments, they are generally not accepted as a medium of payment. Cryptocurrencies also are not used as a unit of account because prices, trade invoicing, and contracts are not quoted in digital currency units. Finally, cryptocurrencies’ ability to serve as a store of value—a safe instrument to preserve the value of people’s financial wealth—is severely limited by their notorious volatility.

“The fact that cryptocurrencies are not issued by a central bank is actually the very reason why they can’t achieve the quality of other well-accepted currencies,” Mr. Aliaga-Díaz explained. “The role of a central bank is precisely to preserve the value of the currency by keeping inflation under control. That’s why prices are more predictable under Federal Reserve management of the U.S. dollar money supply.”

Cryptocurrencies share some characteristics of commodities. For example, they can be bought and sold in cash markets or via derivatives. But Mr. Aliaga-Díaz said they are not commodities because they are not physical raw materials.

No substitute for stock and bonds

Some wonder whether cryptocurrencies can be used in strategic portfolios as substitutes for stocks and bonds. “But unlike traditional asset classes, cryptocurrencies lack intrinsic economic value and generate no cash flows, such as interest payments or dividends, which can explain their prices,” Mr. Aliaga-Díaz said.

Mr. Aliaga-Díaz pointed out that as with currencies and spot commodities, such as gold, there is no risk premium expected with cryptocurrencies as compensation for bearing the risk of their price movements. “Because cryptos represent uncompensated risk to the portfolio, they are not a good substitute for stocks and bonds in a long-term portfolio,” he said.

Some investors may be willing to bet on sustained crypto price increases based on the belief that crypto demand will always outpace its supply. And though there might be some valid reasons around projected demand and usage to make a compelling case for a persistent supply shortage that can sustain increasing prices, Mr. Aliaga-Díaz noted, the supply of cryptos has exploded over time, and there is no reason to believe that supply can’t keep up with demand.

“The biggest risk for all investors would be to assume that demand growth will continue just because their prices have recently gone up,” he said. “That’s speculation, not investment.”

Other risks to keep in mind

Despite all the recent attention devoted to cryptocurrencies, Mr. Aliaga-Diaz cautioned that there are a number of additional risks associated with digital currencies, including: Continue Reading…

Spendapalooza 2021: Ottawa unveils first Federal Budget in two years

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CTVNews.ca

The first Federal Budget in more than two years was unveiled shortly after 4 pm Monday. You can get the official documents [all 724 pages of it, with the heft of a big-city telephone book] from the Department of Finance here.

It sports the title A Recovery Plan for Jobs, Growth, and Resilience. 

The last federal budget [“Investing in the Middle Class”] came down on March 19, 2019.

You can find the latest Budget tweets and post-announcement reaction under the hashtag #Budget2021, and on my Twitter feed @JonChevreau, which also scrolls on the right of this site. Minister of Finance Chrystia Freeland tweets as @cafreeland. Earlier Monday she tweeted that “we will finish the fight against COVID-19 and invest in job creation and a resilient economy.”

Here is the initial analysis from the Globe & Mail [possibly subscribers only]; personal finance columnist Rob Carrick focused on the childcare initiative.  Also at the G&M, David Rosenberg rightly construed it as a vote-buying multi-year massive spending binge that Canada is unlikely to afford.

Here is what the National Post has to say; William Watson’s take is here; I love this quote from him: “In terms of taxes, however, ‘over-threaten and under-deliver’ summarizes this budget.” Terry Corcoran characterized it as Canada’s Reverse Perestroika with a shift to centralized planning. Jack Mintz lamented the lack of fiscal anchors to hold back the Liberals. Diane Francis warned the pandemic spending spree is nowhere near being over, thanks to Justin Trudeau’s bungling of the pandemic. Finally, CIBC Wealth’s Jamie Golombek looks at five tax-related measures, notably the three replacements for the original CERB.

Here is the Reuters feed. One focus of the Toronto Star was an extra billion dollars devoted to Broadband infrastructure in rural communities.

Federal Minister of Finance and Deputy Prime Minister Chrystia Freeland. (Twitter.com)

Billed as a post-pandemic Budget, it lived up to the prerelease leaks of a spending marathon the past week. In short it is Justin Trudeau’s pre-election Spendapalooza 2021. More than $100 billion in spending over 3 years was unleashed, including $30 billion over 5 years and $8.3 billion a year thereafter for the centrepiece of it all: a National Childcare and Early Learning Program.

No real help to cool Housing Bubble and other measures that didn’t happen

As interesting as what was announced is what many feared might be announced and didn’t happen. As far as I can see at this point, there was no move to end the tax-free gains of a principal residence, nor did I see any changes in capital gains tax inclusion rates on investments in general. As Watson quipped about taxes, “Overthreaten and underdeliver.”

Also in the category of things we’re glad not to see is, as Global News summarized, no hike to the GST and no imposition of a Universal Basic Income, no broad-brush Wealth Tax [but new taxes on expensive cars, boats and planes] and no increases in Health Transfers to the provinces. There wasn’t even significant help to cool runaway housing markets, apart from a tax on vacant or underused residential property owned by non-residents: as reported by Robyn Urback in the G&M.

Nor was there much about Pharmacare, to the dismay of the NDP.

Apart from that there was billions for everybody. As Andrew Coyne wrote in the G&M, the budget had to be the longest in history because “this budget is about everything.”  He notes that the word “support” appears almost 1,000 times, and benefit/s more than 1,300 times.

OAS sweetener for 3.3 million seniors

A $500 one-time Old Age Security payment for seniors 75 or older [as of June 2022] is coming in August, followed by a 10% rise in regular OAS benefits in July 2022. Continue Reading…