Building Wealth

For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).

Book Review: Blockchain Revolution

Posted By Jonathan Chevreau | June 1, 2016

Technology guru Don Tapscott, together with his investment banker son Alex, makes a bold claim on the subtitle of the pair’s just-published book, Blockchain Revolution (Penguin Canada, Toronto). They promise that the “technology behind Bitcoin is changing money, business and the world.”

Certainly Bitcoin and Blockchain technology are something anyone in the financial services industry needs to pay attention to. The first of seven chapters on Transformations is devoted to reinventing the Financial Services Industry, which the authors dub “the world’s second-oldest profession.”

The global financial system supports a global economy worth more than $100 trillion, making it the world’s most powerful industry and foundation of global capitalism, the authors write. And yet, with some of it still running on 1970s mainframe computers, close up the financial system is a “Rube Goldberg contraption of uneven developments and bizarre contradictions.”

If ever an industry were ready for disruption, this one would appear to be it. In an interview at the book launch, Alex Tapscott told me that true “fin tech” (financial technology) is based on the blockchain. And blockchain itself is what The Economist magazine dubbed “The Trust Machine.” Accordingly, the Tapscotts’ book begins with a chapter titled The Trust Protocol.

Distributed Ledger Technology

ETFs break past $100 billion milestone in Canada

Posted By Financial Independence Hub | May 31, 2016

By Atul Tiwari

Special to the Financial Independence Hub

Last Friday, ETFs (Exchange-traded Funds) surpassed the magic $100 billion mark in assets under management in Canada and hopefully, continued growth in the markets and sales will keep us moving forward. But this milestone signals that many investors are gaining greater appreciation for these powerful, low cost and transparent investment vehicles.

And the industry is growing rapidly with new providers and products joining the ranks, regulatory changes on the horizon and technology changing the investment management field, like it has many others.

But the doubling of assets and tripling of ETF providers since 2010 is an indication that ETFs are being integrated into more investors’ portfolios. We see this every day with a growing number of ETF options and lower costs across the industry.

While there are a multitude of factors for the rising popularity of ETFs, I wanted to take a deeper look into four in particular.

The rise of indexing.
Increased competition.
Regulatory efforts to increase the transparency and awareness of investment fees.
More fee-based financial advisors.

The rise of indexing

Canada was an early innovator in ETFs, as the first ETF in the world was listed here in Canada 26 years ago. Continue Reading…

The 2-letter 4-letter Word

Posted By Financial Independence Hub | May 30, 2016

By Robert M. Gignac

Special to the Financial Independence Hub

One of the things I love about my job is that I get to have interesting and passionate conversations with North Americans regarding money, personal finance and fiscal responsibility. We all have a relationship with money – sometimes it is a good relationship – sometimes not.

I spoke at an event in Victoria, B.C. recently and during the Q&A portion a guest asked the following question: “What is the one biggest thing I can do to improve my financial situation?”

Now, I’m a firm believer that there is no single thing we do that makes us financially successful – it’s the repetition of a variety of little things, done over and over and over that make us successful. I could tell from the way the question was phrased and the rather emphatic index finger in the air as they asked the question – they were looking for “one thing.”

Looking for one big answer

While the silence seemed to hang in the air, an audience of 250+ waited for the answer. I took a sip of water from the glass on the table and hoped they were going to be happy with what I had to say: “There is no one “biggest” thing you can do – but – if you’ll humor me for moment – I’ll share with you what I think the one biggest word is? How’s that?” Continue Reading…

An advisor’s six top tips for personal finances

Posted By Financial Independence Hub | May 25, 2016

By Adrian Mastracci, KCM Wealth

Special to the Financial Independence Hub

Investors know that not all parts of personal finances are created equal. Some areas definitely have more impact on the money strategies.

Questions always arise as to which ones to best consider closely. I’ve identified a half dozen key money moves for practically everyone.

A smart step for individuals and families is to prioritize my six core financial matters. Place them at the front of the line and attend to them in detail.

Try not to start the discussions within the comforts of your home. Instead, plan a few walks with your spouse and, perhaps, Fido.

It’s a great way to enjoy the outdoors and have a relaxed chat about the finances.
Make it a fun outing by indulging in that favourite treat.

My suggestions touch on the core of investing, estate planning and retirement.
Your mission is to ensure that each area delivers.

Explore whether a few tweaks would fortify your foundations.
You want each area to fit like a glove into your total game plan.

I summarize six core areas that benefit from your focus: Continue Reading…

How buying a Home makes you Financially Independent

Posted By Financial Independence Hub | May 20, 2016

By Jam Michael McDonald, Zoocasa

Special to the Financial Independence Hub

Buying a home takes a lot of planning and can be an expensive endeavour. You have to think about your down payment, your mortgage and mortgage payments, your expectations on your space, your timeframe, your closing costs—the list is endless.

So if you’re spending a bunch of money, how can buying a home make you more financially independent?

First, change your perspective

Some investments are a lot clearer: put your money into this GIC and you’ll receive this return in this many days. It’s easy to see, easy to calculate, and easy to do.

Investing in real estate is an entirely different game, so you have to think of it differently. You’ll have initial costs, you’ll be forking out money, and you’ll feel kind of broke. And that’s okay. These “expenses” when buying a home should be looked at as part of the overall investment. There are some that are pure cost—home inspection, lawyer fees, other closing costs—but they all allow the transaction to occur, and they’re not extravagant compared to the cost of the home.

Think of a real estate investment as long-term, not short-term; complex, not simple; hands-on, not passive.

You can make real decisions about your home to save you money

As a renter, have you ever received your hydro bill and become really agitated? It’s a common experience: you can’t control your heat (or you only can to a certain extent), so why should you pay for something you can’t control?

As a homeowner, you can make changes that could save you money, with some even boosting the value of your home. You can put in energy-efficient appliances, or replace the windows, saving you on your heating bill while improving the look and value of your house.

The flexibility to cut costs that you possess as a homeowner is far greater than as a renter.

With the right home, you can rent to tenants