Tag Archives: Financial Independence

How to Double your Social Security payout

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By Akaisha Kaderli

Special to the Financial Independence Hub

The average monthly 2016 Social Security check is US$1,341, which is US$45 per day, or a little over $16,000 per year.

Stories abound about how people are not able to live – or only struggle to get by – on their Social Security income in the United States. Even if they can manage to walk the budget tightrope, it’s not much of a retirement to look forward to and usually it’s one that is supplemented with work.

You can do better

Now is the time for you to take control of your finances so that you are financially fit for your retirement..

First you need to learn what your benefit will be upon your retirement age. You can do this by contacting social security .gov, opening an account and seeing your work history and future earnings. This can also be done via phone and snail mail but why? It’s much more convenient to do it online.

Once you know your estimated payout you can get to work doubling it by building a portfolio of dividend paying growth stocks. Or you can use an ETF such as DVY ( iShares Select Dividend ) which yields over 3% at its current price. Mix that with VTI ( Vanguard Total Stock Market ) and SPY ( S&P 500 Index ), both paying over 2% and you have a solid dividend growth portfolio.

While you wait for your retirement date

You can reinvest the dividends while you are in your accumulation phase thus compounding them for faster results. Over time you will see your quarterly dividend payments grow and grow as well as your portfolio value.

Why a dividend fund Continue Reading…

Why Baby Boomers like me can’t retire

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Mike Drak

After having talked to numerous Baby Boomers lately, I’m convinced more than ever that the majority of we boomers really don’t want to retire, we just need a change, and some help figuring out what to do with the rest of our lives.

In this article I would like to share my thoughts on why some people feel the need for a significant change late in their careers and why traditional retirement is not the answer. I know these feelings because it happened to me. And I’ve been telling the story at a number of presentations Jonathan and I have conducted at various branches of the Toronto Public Library in recent weeks.

The photo shows  one such presentation at the York Woods branch on Victory Lap Retirement, followed by a Q & A session. I love doing these presentations, as it gives me an opportunity to present to my fellow boomers and find out what is going on out there in the real world.

I Started Feeling Antsy Late In My Career

There were a number of reasons for the change I made and here they are in no particular order:

1.) I became very good at doing my job. This naturally happens when you do the same job for twenty plus years. You get comfortable, there is little challenge and you plateau.

2.)  After 36 years of work I was tired of taking orders and being told what to do.

3.) I became bored with my job. That is what happens when you turtle and continue to play safe. I wasn’t learning anything new and I didn’t derive any satisfaction (happiness) from my job. The thrill was long gone and winning more sales contests and trinkets didn’t matter to me anymore. I remembered laughing a lot more earlier in my career. I knew I needed to laugh more before it was too late.

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Rockstar Finance’s review of Victory Lap Retirement

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By Hélène Massicotte, Rockstar Finance

Mike and Jonathan walk the talk. They both have made sound financial decisions that enabled them to leave their corporate lives (either through retirement or redirection), allowing them to shift their focus toward what they wanted to do next without having to have money be the primary driver.

How can we start stacking the deck in our favor to do the same? By:

  1. Following the “Seven Eternal Truths of Financial Independence”
  2. Focusing on one important formula
  3. Forgetting traditional notions of retirement

#1. The “Seven Eternal Truths of Financial Independence”

When it comes to managing money, most of us want to improve our odds of success. That means ensuring we behave in a way that reduces the financial obligations that work to limit our personal and professional choices. The authors suggest the following behaviors can do a great deal to help us increase our financial flexibility:

  1. Live below your means
  2. Pay yourself first
  3. Get out of debt
  4. Buy a home and pay it off as soon as possible
  5. Be an owner, not a loaner
  6. Never say no to free money from your employer
  7. Take the government up on its few offers of free money

Two of these include interesting twists on the theme beyond what is usually covered in what’s considered mainstream financial advice:

#4. Buy a home and pay it off as soon as possible. This is great advice for those among us who want to own a home, but the authors take it one step further: we should look at our home as part need and part want. Need is the bare minimum of what we need in a home: shelter, basic utilities, safety, minimum square footage, proximity to other needs, etc. Want are the extras beyond what we need: extra space, extra features, better privacy, less noise, better outdoor space, better-than-needed neighborhood, etc.

Looking at housing this way can help us consider the appropriateness of the largest physical asset class we’re likely to ever own. It’s easy to justify buying too much house, thereby turning a good purchase into a bad one, and this “need vs want” can help us keep the inflation in check.

#5. Be an owner, not a loaner. This suggests that, though bonds are lower-risk investment vehicles, they won’t offer the returns that equity can, even when these are risk-adjusted. The authors suggest a diversified portfolio that includes high-quality dividend paying stocks and stress that qualifying dividend-paying stock income also offers some tax advantages over bond-related income for investments that are held in non-tax-sheltered accounts.

#2. The Freedom Formula

Mike and Jonathan managed to increase choice in their lives by focusing on one important formula:

PASSIVE INCOME > NON-DISCRETIONARY EXPENSES = FREEDOM

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The Price of Security

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By akaisha-in-a-longboat-on-the-mekong-riverBilly and Akasha Kaderli, 

RetireEarlyLifestyle.com

Special to the Financial Independence Hub

“Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing.” —  Helen Keller

Recently I have been reading a book called Daring Greatly by Brene Brown. You may have heard of it. The theme of the book is about being vulnerable, taking risks and being willing to expose ourselves to possible failure. It’s an enlightening read.

I bring this up because what I want to share with our readers is that security has a price. Everyone speaks about how risk is dangerous and sometimes unthinkable. It seems that everyone wants unmitigated surety – the 100% guarantee.

But security never makes one courageous nor does it make a person’s heart sing.

We all want our bases covered, and none want to be starving or out in the land of the lost. But there is an energy about taking a risk with the possibility of failure that adds dimension to our lives and creates memories that we share with our children and grandchildren and we can ruminate over when we become old. Having everything laid out, fully unchallenged with no adversary to overcome makes for a dull story.

Personal examples

To make my point, I want to share with you a couple of big risks I took with my life direction over the years.

In 1971 was 19 years old and my then 20-year-old boyfriend wanted to make an extensive summer motorcycle trip across the country from the Midwest through a semi-southern route, up the coast of California to Alaska and back again via northern roads. This sounded like the most exciting thing I could imagine in my life at that time.

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The 6 steps to Financial Independence

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L to R: Ed Rempel, Jon Chevreau, Mike Drak

By Ed Rempel, CFP, CMA

Special to the Financial Independence Hub 

What is financial independence? How do you get there?

Financial independence means work is optional. You have enough money to live the way you want without having to earn money.

When you get there, life changes. You have freedom. You can do only what you enjoy or find meaningful.

If you don’t like your job or your boss, just quit. Your life is full of options. You can make the most of your own life.

When you get there, you can have a quiet confidence. You are financially secure.

Your plan should start with understanding your inner motivation and defining specifically the lifestyle you want to have once you are financially independent. It is your opportunity to determine your future.

Becoming financially independent requires planning and effort, but it is worthwhile to live a more fulfilling life. “It’s not about the money. It’s about your life.”

“Real freedom is financial freedom.” When is your Findependence Day?

Achieving financial independence is a very broad topic. Writing nearly 1,000 comprehensive, professional financial plans specifically for real Canadians has given me a deep insight into what really works.

Seminar in Toronto this Wednesday evening

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