Tag Archives: Financial Independence

Expect mortgage price war to be sparked by today’s interest-rate cut

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Romana King (MoneySense.ca)

Good news for homeowners today with the surprise announcement interest rates in Canada are being cut by 0.25% (to 0.75%).

In her MoneySense.ca column today, real estate columnist Romana King predicts there will be an imminent price war among financial institutions offering home mortgages.

That can only be good for those renewing mortgages or about to buy their first home. One of the charts Romana describes shows five-year fixed rates could even fall below 5%.

Of course, as someone who preaches that the foundation of Financial Independence is a paid-for home, I’d still rather have no mortgage at all. But rock-bottom rates are the next best thing and it seems they will continue for as long as the eye can see.

My only caveat: be wary of buying more house than you really need. Use the gift of continued low rates as a way to accelerate the paydown of your mortgage.  Because ultimately we value Financial Independence more than having a monster home in which to store more “stuff.” Don’t we?

As I say in my book, “Freedom, Not Stuff!”

Retirement planning would be so much easier if we knew when we’re going to die

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By Jonathan Chevreau

My latest MoneySense blog is on the pros and cons of Extreme Early Retirement, or its opposite, which one reader dubbed “Extreme Working.”  It was in response to my recent column in the magazine about extended longevity, a theme we regularly explore here at the Financial Independence Hub’s “Longevity & Aging” section.

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David Davidson

As mentioned in the MoneySense version of the blog, one of the readers highlighted — Oakville-based David Davidson — also sent along a photograph of himself, which we’re running here (on the left).

What this all comes down to, and as I commented on Twitter after the original MoneySense blog was posted, is that “Retirement planning would be so much easier if we just knew the exact date of our death!”

Of course, few of us know that so there’s always going to be a tradeoff between planning for a long life that never materializes; and under-saving and living in the present, only to find yourself running out of money before you run out of life.  Personally, I’d rather err on the side of the first possibility but as you can see below, some readers (including David shown above), make the case for the second possibility, or a balance between either extreme. Some on Twitter are in the same camp, including Ryan (@simplemoolah):

“LOL.  Since we don’t — Don’t blow it all today. Live in the present & enjoy every moment but also plan for your future.”

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…

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

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10 reasons to quit your job in 2015 (and a few not to)

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Quit job markBy Jonathan Chevreau

Via Linked In comes this insightful article listing ten reasons to quit your job in 2015.

Click above link for the full article. I’ve reproduced the ten headings below, after which I make a few additional observations, based on my own transition in 2014 from employment (21 consecutive years of it.)

The bottom line is this is what Findependence (Financial Independence) is all about, and the raison d’être of this website.  In fact, the cover of the US edition of my book on Financial Independence is very similar to the illustration to the left, except that the calendar date circled is Findependence Day.

As I note below, there may also be good reasons NOT to quit your job in 2015 but instead in 2016 or later. I wrote the original Findependence Day in 2008 but the day didn’t actually arrive until 2014, so you could say it was six years in the making. Sometimes, big life events need to be planned out that far ahead.

In any case, here are the ten reasons for quitting sooner than later:  Continue Reading…