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).

7 things you may not know about TFSAs

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Canadian Tax-Free Savings Account concept word cloudFrom the latest issue of MoneySense comes this list of 7 things you don’t know about Tax Free Savings Accounts. Note to any American readers: Canada’s TFSA is similar to Roth IRAs.

Here are senior writer Julie Cazzin’s seven facts. Click through above link for more complete explanation.

1.) Whatever amount you withdraw from a TFSA is added to your contribution room in the following calendar year.

2.)  Interest, dividends and capital gains in your TFSA are not considered income, even when you withdraw the money. Continue Reading…

Why Boomer & Echo’s Robb Engen dumped stocks to be 100% an indexer

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Robb Engen, Boomer & Echo

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

For a while now I’ve dithered over when to sell my portfolio of dividend stocks and implement my two-fund ETF solution.  The tanking stock market didn’t help – particularly with oil and gas stocks plummeting and a few of my holdings underwater.  Behaviourally, I badly wanted to wait until oil prices recovered so I didn’t have to sell those stocks at a loss.

But last Thursday I finally took the plunge and sold 24 dividend stocks, worth roughly $100,000, and immediately replaced them with two ETFs from Vanguard.  I’m not going to lie; it was hard to sell my babies:

Continue Reading…

Rethinking Retirement and Home Ownership

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Gary Gorr, CHFC

By Gary Gorr, Chartered Financial Consultant

Special to the Financial Independence Hub

Recently I have been doing retirement assessments for several new customers. What amazed me as I spoke with them was how resigned to defeat the clients were. It was like they knew in their guts that they had started saving too little and too late to attain the retirement they wanted.

One answered my question on when do you want to retire by saying “around 120 is the only way I could.”

After the initial meetings I reflected on other circumstances from planning for customers in 2014 and noticed some commonalties.

  • Age range: 45-55
  • They own homes with attractive Fair Market Values
  • Had fairly decent equity positions in homes
  • Most would carry a mortgage into retirement
  • All had projected incomes at retirement far less than their desired outcome

Many Canadians, including these clients, have grown up with the belief that home ownership is an important goal. The home represents a significant part of their net worth.

Not easy to unlock home equity

Continue Reading…

Why do we invest?

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Aman Raina, Sage Investors

By Aman Raina, Sage Investors

Special to the Financial Independence Hub

One day as I was perusing the world wide web, I came across a posting about DRIP investments, which ran in the new blog by PWL Capital’s Justin Bender.

What caught my eye had nothing to do with DRIP investments but more about a comment made at the end of article that really got me thinking. It said:

“…Investors should be focusing their attention to more important investment decisions that are likely to have a bigger impact on overall success (such as savings rate, expenses, risk, fees, taxes, and behaviour)…” 

Make no mistake, these are important factors in developing your investment ideology or strategy. However, these elements just get you into the game of investing; on their own they are not going to guarantee you will be successful. Continue Reading…

4 easy ways to save more this year

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Robb Engen, Boomer & Echo

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

I know it’s tough to save money. It’s even more difficult to up the ante and increase your savings year-after-year. But saving is necessary to meet both our short- and-long-term financial goals. Without any savings, and living paycheque-to-paycheque every month, you’ll either work until you die or else retire in extreme poverty.

So what will it take for you to save more this year? Some people start off small, saving two or three per cent of their salary, and that’s fine – every little bit counts. But many of us short-change our retirement by not finding ways to increase that amount every year. Here are four easy ways to save more in 2015:

  1. Take up a challenge

Continue Reading…