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This week, two more instalments of my “Eternal Truths of Personal Finance” series were published in the Financial Post.
Wednesday featured Eternal Truth #3: Get out of Debt.
Saturday featured Eternal Truth #4: Buy a Home and Pay if Off as Soon as Possible. At least that was my original headline: you can find it online under the title Eternal Truth #4: Don’t be a Renter.
In my book, Findependence Day, this truth is expressed as “The foundation of financial independence is a paid-for home.”
Of course, in cities like Vancouver, Toronto, San Francisco and several other California cities, critics of sky-high housing prices continue to argue that renting and putting the difference in the stock market may make more sense. In Friday’s Financial Post, just this argument was made in no uncertain terms: You’d have to be crazy to buy real estate.
I’m not sure I’d be buying at these prices today but am glad we bought a starter home in 1988. It didn’t stop us from building a healthy stock portfolio as well: I don’t see home ownership and investing as mutually exclusive propositions. And I wouldn’t want to enter full-stop retirement with mortgage debt, nor would I want to be paying rent that will inevitably keep getting hiked as inflation creeps higher.
Installment #5 in the Eternal Truths series should run this coming Wednesday, #6 next Saturday and #7 the Wednesday after that.
So what is the end game for the financial preparations outlined in this series of columns? This series is aimed at younger people, which is why the Post is packaging it under the “Young Money” label. Some might view it all as laying the groundwork for an ultimate retirement far later in life, although of course this site prefers to view it as preparation for Financial Independence, which can come years or decades before traditional Retirement.
Millennials should embrace multiple streams of income
The Hub has featured a few guest blogs my millennials aiming to be Financially Independent in their 30s. Clearly, the sooner you’re findependent, the more flexibility you’ll have, particularly if a primary source of income (aka a “job”) suddenly dries up. An emergency fund is always advisable but also consider a suggestion made by Robb Engen a few weeks back in Boomer & Echo: Why Multiple Streams of Income is a Better Emergency Fund for Millennials.
Questions for planning Retirement
I note that at her Retirement Redux site, Sheryl Smolkin has been writing about the imminent arrival of age 65 for her and her husband and whether that means they should start working a bit less and savouring the fruits of Financial Independence a bit more. Find it here under the headline Questions I asked myself when planning for Retirement. I can relate to this myself, as I outline in my column in the latest print edition of MoneySense magazine (no online link yet available). It’s ostensibly about Semi-Retirement but, as it appears is the case with Sheryl, it’s not as easy as it may appear to slow down.
Best rideshare deals
It’s hard not to open up a newspaper these days and hear about Uber, the ride-sharing app. On Friday, the Wisebread blog ran a useful piece titled Uber, Lyft and More: Where to Find the Best Rideshare Deals. It concludes that in the US, owning your own car is still the cheapest and most convenient choice but there are plenty of situations where ride-sharing makes sense.
Boosting your “Coding” Literacy
The current “special double issue” of Bloomberg Business Week is a bit of a strange animal. It features a white cover with a bit of computer code, and is nothing but a long 112-page issue about coding, or computer programming. I was tempted to give it a miss but once I started reading it, realized it’s an important topic — especially for those who are inclined to leave technical issues to the IT department and other IT professionals. You can find it online here under the heading What is Code?
