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Retired Money: Plan for Retirement Income for Life with Fred Vettese’s PERC

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My latest MoneySense Retired Money column focuses on a free retirement calculator called PERC, plus the accompanying new third edition of Fred Vettese’s book, Retirement Income for Life: Getting More Without Saving More.

You can find the full column by clicking on the highlighted headline: Retirement Income for Life: Why Canadian retirees love Frederick Vettese’s books and his PERC. Alternatively, go to MoneySense.ca and click on the latest Retired Money column.

As the column notes, I have previously reviewed the earlier editions of the book but any retiree or near retiree will find it invaluable and well worth the C$26.95 price. Also, there is a free eBook offer.

PERC of course is an acronym and stands for Personal Enhanced Retirement Calculator.

PERC is itself a chapter title (chapter 15 of the third edition) and constitutes the fourth of five “enhancements” Vettese describes for getting more without saving more. Vettese developed PERC while writing the first edition in 2018: it is available at no charge at perc-pro.ca.

In another generous offer, anyone who buys the print edition can get a free ebook version by emailing details of proof of purchase to ebook@ecwpress.com.

I reviewed the previous (second) edition of Fred’s book for the Retired Money column back in October 2020, which you can read by clicking on the highlighted headline: Near retirement without a Defined Benefit pension? Here’s what you need to know. Continue Reading…

Financial Management Simplified

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MoolahMate Dashboard

By Fauzi Zamir, CPA, CA

Special to Financial Independence Hub

I have diabetes so I am careful about eating sugary foods.  In this short statement lies the secret of simple financial management.  You may say that’s an odd conclusion, but you will shortly see the principles underlying the analogy in the first sentence and its applicability to your finances.

The first element (I have diabetes) is “knowing” that I have a problem and the second element (I am careful about eating sugary foods) is “doing something about it.”  In the same way, financial management requires that you first know what you own, what you owe, and what your cash inflows and outflows are.  The second thing is to determine which debts to pay off first and which discretionary expenses you can reduce: in other words, you want to reduce your expenses so that you can generate savings that can subsequently be invested.

Let’s use another analogy.  I need to get in shape.  I enthusiastically join a club and start going regularly.  But soon I am overwhelmed by the choice of machines and different exercises and my visits start to decline and eventually stop.  What happened?  I was probably over ambitious, didn’t have the discipline and made it overly complicated.  I could have taken a simpler approach by focusing first on my diet and then doing something simple like regular walking to create the sustained discipline  that is needed for long-term results.  The message here is, start with something simple and sustain the routine. Continue Reading…

Estate Planning Mistakes that could Jeopardize your Findependence

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Image by Unsplash: Melinda Gimpel

By Devin Partida

Special to Financial Independence Hub

Estate planning is crucial for anyone looking to secure findependence and leave a lasting legacy for their loved ones. It involves making deliberate decisions about who will inherit your assets and how executors should handle your affairs after you’re gone.

However, many overlook the finer details, leading to common mistakes that can have significant financial and emotional impacts on those left behind. Understanding and avoiding these pitfalls ensures your estate plan fulfills your wishes and supports your loved ones without unnecessary stress or financial burden.

Common Estate Planning Oversights

Navigating the complexities of estate planning is no small task, and it’s all too easy to overlook crucial details that can make a big difference. Here are some common estate planning oversights that could derail your intentions and how to steer clear of these potential pitfalls.

Neglecting to Update Beneficiaries

Regularly reviewing and updating beneficiary designations on life insurance, retirement accounts and other financial assets ensures your estate plan reflects your current wishes. Life events — like marriage, divorce, the birth of a child or the death of a designated beneficiary — can alter your intentions for asset distribution.

Failure to update these designations can lead to your assets going to unintended recipients — like an ex-spouse or estranged family members — instead of supporting your current loved ones or preferred charities.

Underestimating the Value of a Comprehensive Will

Having a will that comprehensively covers all assets and wishes is fundamental to effective estate planning. Despite its importance, only about 32% of Americans have taken the step to create a will.

This document ensures your assets are distributed according to your desires, provides clear instructions for caring for minor children and appoints executors to manage your estate. An incomplete will — or the absence of one — can lead to family disputes, as loved ones may have differing opinions on the distribution of assets.

Such disagreements often result in extended legal processes, which can deplete the estate’s value through legal fees and other costs. Additionally, without a will, state laws dictate the distribution of your assets, potentially leading to outcomes that starkly contrast with your wishes.

Failing to Establish an Advanced Health Care Directive

An advanced health care directive guides medical decisions if you can’t communicate your wishes, providing physicians and loved ones with clear written instructions. Healthcare providers especially value this foresight, ensuring your care aligns with your preferences and alleviating the burden of decision-making from your family. Continue Reading…

Why you may wish to own a U.S. Dollar Investment Account

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Royalty-free image courtesy Justwealth

By James Gauthier

(Sponsor Blog)  

 

Many Canadians are aware that you can open a U.S. dollar bank account at most Canadian financial institutions.

But did you know that you can also open a U.S. dollar investment account through many different investment companies?

The following are reasons why you may wish to consider opening a U.S. dollar investment account.

 

Reduce the cost of U.S. dollar conversion

Every time that you convert Canadian dollars to U.S. dollars (or vice versa), you will pay a fee to the financial institution that makes the conversion for you. That fee is known as the currency spread, and can usually be noticed by looking at the difference between the “bid” and the “ask” prices displayed by the financial institution.

For example, if the current spot exchange rate is quoted as $1.35 Canadian for each U.S. dollar, the bid (or price that you will receive for selling U.S. dollars) might be $1.32 and the ask (or price that you must pay to purchase U.S. dollars) might be $1.38. So, every time you buy or sell U.S. currency you lose 3 cents per dollar. If you are regularly converting currency, that becomes very expensive!

Buying or selling U.S.-listed securities in a Canadian dollar investment account is a common example of Canadians paying unnecessary currency conversion costs, allowing the broker to pocket the currency spread on buys and sells, dividends or interest paid. The more that you buy and sell, the more that you lose. These costs can be eliminated by simply owning your U.S.-listed securities in a U.S. dollar investment account instead since there is no need to convert currency on every transaction.

Hedge the impact of currency exchange rates

Have you ever felt like you had to limit your spending on travel to the U.S. because the value of the Canadian dollar was depressingly low? Or how about not ordering that item located in New York on eBay because it was priced in U.S. dollars which made it too expensive? The value of the Canadian dollar relative to the U.S. dollar has fluctuated greatly over time. In the past few decades alone, the exchange rate has ranged from more than $1.60 Canadian per U.S. dollar to less than $1.00 – yes, the Canadian dollar has on occasion been worth more than the U.S. dollar!

But why leave it to chance? If you have a portion of your investments denominated in U.S. dollars, you can always draw from it when you need it. You won’t pay conversion costs, and the current exchange rate should not matter because you don’t have to convert anything. For folks who require the frequent use of U.S. dollars for business, travel, or shopping, a U.S. dollar investment account can make a lot of sense.

For a simple illustration, consider a shrewd Canadian investor who vacations in Orlando, Florida for one week in February every year. The typical expense for this trip each year is about $5,000 U.S. dollars. This investor opened a U.S. dollar investment account and invested $100,000 U.S. dollars in an income-oriented investment portfolio that consistently earns 5% per year. This investor should never have to worry about exchange rates, or conversion costs since $5,000 U.S. dollars can easily be withdrawn every year!

Eliminate PFIC reporting (for U.S. citizens living in Canada)

Unfortunately for U.S. citizens living in Canada, Uncle Sam requires you to continue filing U.S. income tax returns. Also unfortunately, the I.R.S. requires additional reporting requirements for Passive Foreign Investment Corporations (PFICs), which may result in additional taxes owing. If you own any mutual fund or exchange traded fund issued by a Canadian company, it is considered a PFIC. Regulations require that all mutual funds purchased in Canada, must be issued by a Canadian company. Unless you enjoy the extra reporting requirements, this can be problematic for some investors. Continue Reading…

Creating your own Podcast Studio: A Step-by-Step Guide

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Image courtesy Canada’s Podcast/unsplash royalty free

By Philip Bliss

Special to Financial Independence Hub

In the ever-expanding world of podcasting, creating a professional and efficient podcast studio is essential for producing high-quality content that captivates your audience.

Whether you’re a seasoned podcaster or just starting out, building a dedicated podcast studio can elevate your production value and enhance the overall podcasting experience.

In this guide, we’ll walk you through the essential tasks, equipment, and strategies to not only set up your podcast studio but also effectively promote your podcast.

 

 

 

Tasks

  1. Define Your Niche and Audience:
  • Identify your target audience and the niche you want to focus on.
  • Research competitors in your niche and understand what sets your podcast apart.
  1. Create a Content Plan:
  • Develop a content calendar outlining topics, guests, and episode release schedule.
  • Plan for regular, engaging content to keep your audience coming back.
  1. Design Your Studio Layout:
  • Choose a quiet and dedicated space for your podcast studio.
  • Consider acoustic treatment to minimize echo and external noise.
  1. Invest in Quality Recording and Editing Software:
  • Choose reliable recording software like Audacity, GarageBand, or Adobe Audition.
  • Invest time in learning the basics of audio editing for polished episodes.
Image courtesy Canada’s Podcast/unsplash royalty free

Equipment

  1. Microphone:
  • Invest in a high-quality microphone like the Shure SM7B or Blue Yeti.
  • Consider a pop filter and shock mount to enhance audio clarity.
  1. Headphones:
  • Choose closed-back headphones to prevent audio leakage during recording.
  • Opt for comfortable and studio-grade headphones like Audio-Technica ATH-M50x.
  1. Audio Interface:
  • Select a reliable audio interface such as Focusrite Scarlett 2i2 for clear audio signal processing.
  1. Mixing and Monitoring Equipment:
  • Include a mixer if you plan to have multiple hosts or guests.
  • Invest in studio monitors for accurate sound monitoring.
  1. Recording Accessories:
  • Use a sturdy microphone stand or boom arm for convenience.
  • Consider a portable vocal booth or isolation shield for noise reduction.

Promotion Strategies: Continue Reading…