All posts by Financial Independence Hub

Why you might get more for your home in January

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

When it comes to nuggets of real estate wisdom, a persistent adage is that one should avoid selling in the winter at all costs:  after all, bad weather, limited sunlight and poor driving conditions don’t inspire shoppers to peruse open houses.

But while it’s a fact that the winter housing market is a slower one — there were 25 per cent fewer sales in the Toronto real estate market in January 2017 compared to the previous May —  having to list your home in the new year doesn’t necessarily mean compromising on your profits.

In fact, due to a few seasonal phenomena, listing your home for sale in January can translate to a higher sales price; here’s why.

Winter buyers are extra motivated

Just as January sellers are likely listing for a reason, early-winter buyers are also likely driven by a sense of urgency. In fact, a small but persistent bump in activity is typically seen in the weeks following New Year’s Day, as buyers who shelved their holiday home purchases jump back into the market.

January also tends to be a busy season for mortgage pre-approvals, especially for organized buyers seeking every advantage in preparation of the spring market. However, once these buyers have confirmed their maximum buying power, they may be tempted to take a preliminary look at what’s available now, including your listing.

“The fact is, if you’ve waited until spring to get a mortgage pre-approval, you’re already late, and there are a few real estate market factors that will work in your favour if you act now,” says Mike Bricknell, a mortgage broker at CanWise Financial.

“It is very beneficial to get your mortgage pre-approval when the housing market is quieter, especially as there have been many recent industry changes that may have affected what you can afford.”

Low supply means higher prices

Continue Reading…

Your (last) greatest show on earth

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By Heather Compton

Special to the Financial Independence Hub

What do you envision when it comes to your final wishes? Would there be a formal service? If so, who would officiate? Do you wish to be cremated or buried or donate your remains to science?

I get it, end of life conversations are difficult and even if you are prepared to have the discussion, dollars-to-donuts your kids or responsible family members don’t want to go there.

Regretfully I’ve been involved with funeral planning for a number of relatives, and even some clients, and these are the decisions families find most difficult. When the time comes —  and it will —  the question inevitably asked is some variation of “What do you think mom would have wanted?”

If those closest to you know your personal wishes they don’t have to make it up in the funeral director’s showroom while debating between the grand showcase coffin and the budget version you might have preferred!

Bless Mom — she was very clear — cremation by the most frugal means possible, and a nice lunch for our friends.  My Scottish depression-era mother liked the memorial society option because they negotiate funeral cost discounts.

The Memorial Society Association of Canada’s website identifies contacts across the country. A modest membership fee gets you an information package to help document decisions plus they pre-negotiate cost-conscious plans with funeral homes. You can file your wishes with the funeral home or with a memorial society but keep a copy with your other important documents.

Fire Drill Conversations

Because these are difficult conversations, I suggest you treat them like a fire drill: keep it short, discuss what’s needed, make sure everyone understands, document and call it done.  Have another fire drill if your thoughts or wishes change.

Here goes:

► Style of service Continue Reading…

What to do and not to do when with your IRA

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By Sia Hasan

Special to the Financial Independence Hub

If you have decided to invest in a self directed IRA (Individual Retirement Account: the American equivalent of Canada’s RRSP), you have taken the first step to enjoying a better financial future and to preparing for peace of mind in retirement. However, simply opening an IRA account is not all that it takes to benefit from this type of retirement account. If you want to maximize the benefits of your IRA fully, follow these helpful tips:

Choose the right type of Retirement Account

There are several types of IRA accounts that you can open, and two of the most common options are a traditional and Roth IRA. There are significant differences between these accounts. By learning more about these differences, you may be able to find the account type that is best for your financial planning efforts.

Both have similar contribution limits, but a Roth IRA uses money that has already been taxed as contributions. When you withdraw the money after you reach age 59 and a half, you can enjoy tax-free distributions. A traditional IRA, on the other hand, uses pre-tax dollars as contributions, and the money is taxed at a later date when you withdraw the funds. Depending on your current tax rate and your projected tax bracket in retirement, you may find one of these options to be far more useful than the other.. For example, if you expect to be in a lower tax bracket in retirement, a traditional IRA may be a better option for you because it minimizes your tax liability.

Maximize your contributions

If you want your account balance to grow at the fastest rate possible, you should make regular contributions into it each year. More than that, you should maximize your contributions annually to fully take advantage of the tax benefits associated with the account. Any additional investment funds that are available can be invested in another tax advantageous account or in a non-investment stock account.

Be aggressive in your younger years

With a self-directed IRA, you are in complete control over how your funds are invested. This means you can choose to take less risk or more risk. While taking more risk may sound unwise, the reality is that riskier investments generally have a higher return. In your younger years when you have decades before retirement, you can more comfortably take these risks with your investments. When risks are intelligent and moderated, you can grow your nest egg substantially in the younger years of your adult life. Then you can comfortably reduce your risk and return later in life without negatively impacting your financial security in retirement. Continue Reading…

End the year with your taxes in order

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By Lisa Gittens, H&R Block

Special to the Financial Independence Hub

At this time of year, you’re likely occupied with decorating for the holidays, cooking an abundance of food for family, and selecting gifts for your Secret Santa exchange. Amidst the placing of ornaments, stringing of lights and baking of cookies, taxes are probably the last thing on your mind: they’re something you’ll think about next year, when you’re reminded it’s officially tax season.

But, believe it or not, the end of a calendar year is the perfect time to review the current state of your filing and get your taxes in order before flipping the page to 2018. To help you do just that, H&R Block offers these tips:

Agendas make great friends

Treat yourself to the gift that keeps on giving: an agenda. With this new friend in tow, you can take advantage of sporadic free time and update it with all relevant tax-related dates so they don’t sneak up on you in 2018. Examples of entries you’d want to include are: February 26, 2018, which marks the day the Canadian Revenue Agency officially opens.

(As a side note, this is actually the latest opening in Canadian history and means Canadians will have a shorter window to file taxes.) April 30, 2018 is another date to keep in mind: it’s the deadline for filing 2017 personal tax returns. (If you’re self-employed, the deadline is June 15, 2018.)

Organization is in style

Hopefully you’ve been saving bills, tuition receipts, transit passes, charitable contribution receipts, health expenses, and other key tax documents this year. When it comes to your tax return, it literally pays (in the form of a tax return!) to retain and organize these documents. Like agendas, accordion-style folders with tabs to separate by category are great gifts to yourself. Just ensure you keep it in reach — and out of harm’s way — so you’ll be more motivated to use it throughout the year. Continue Reading…