Hub Blogs

Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.

Business Owners Beware!

Posted By |
IRC Photo - Low Resolution
Ian Campbell

By Ian R. Campbell, Business Transition Simplified

Special to the Financial Independence Hub

I recently read a headline that said Business Owners Need To Be Very Afraid. The first line or two of the article paraded a litany of things that were unlikely to frighten a business owner’s dog, let alone a business owner.

However, while the article content was uninspiring the article title was “on the money.” The heading I have chosen for this post likewise wouldn’t frighten a business owner’s dog – but only because dogs can’t read.

If you are a business owner or an advisor to business owners here is a list, with brief reasons, of six things you need to keep front of mind and continually update your opinion on.

Government debt

Debt is higher than it has ever been in most developed and developing countries at the municipal, provincial/state and federal levels. Governments at root are no different than individuals, households or companies – unless of course you are an American who thinks the U.S. Federal Government can print new fiat currency forever without consequence.

Eventually, Peter can no longer rob Paul and debt needs to be repaid. How: by levying multiple forms of taxes on those who can pay. Businesses almost certainly will see both direct and indirect taxes at all levels increase in coming years. This is but one factor that will negatively impact business after-tax free cash flows – and in the end it is current and prospective “after-tax free cash flow” that is the most important business value metric.

Industry consolidation

Continue Reading…

Lower trading fees aren’t an excuse to day-trade

Posted By |

Stock Trader Overjoyed Looking At MonitorBy Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

As a Canadian investor, I’ve been pleased to see that most of the big bank brokerages lowered their cost per trade from $29 to under $10. Previously, most investors needed a minimum of $50,000 in assets to qualify for lower trade commissions.  This has presumably levelled the playing field for small investors.

When I first opened a discount brokerage account with TD Waterhouse (now TD Direct Investing) back in 2009, high trading commissions were the norm. I chose TD because I had an existing banking relationship and my $25,000 investment met the threshold to waive the $100 annual admin fee.

At the time I wasn’t aware of online brokerages like Questrade – which offered trades for as low as $4.95 with no administration fees.

High costs for small investors

The costs added up over the years. From 2009 to 2011 I made 36 trades and paid a total of $1,044 in fees. Had I been with Questrade, I would have paid a fraction of that amount – just $178.20 in trading fees. Continue Reading…

Incorporated? Don’t overlook TFSAs & RRSPs if your time horizon is long enough

Posted By |
benfelix
Ben Felix

By Benjamin Felix, PWL Capital Inc.

Special to the Financial Independence Hub

When people have corporations it’s common for them to retain all earnings in excess of their living expenses inside of their corporations to avoid paying personal tax.

This seems logical. By leaving the money in the corporation there is more money to invest in the corporate investment account, and we know that about $50,000 of dividends can be taken out of a corporation nearly tax-free, making the idea of leaving everything in the corporation until it’s time to draw a conservative retirement income appear very attractive. This strategy may have also been motivated by the tax advantage that used to exist for taking a dividend-only income.

Shift to mix of salaries & dividends

Continue Reading…

“Stop Doing” #5: Stop Overpacking for Your Financial Journey

Posted By |

 

stevelowrie
Steve Lowrie

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

We still haven’t finished our list of financial “STOP Doing” tips. In fact, the list may well be endless, given the endless supply of popular financial products and promotions continuously appearing, disappearing and reemerging, each one allegedly new & improved.

It’s no wonder so many individual investors end up with so much excess baggage along the way. This month’s post is dedicated to making sense of all those competing investment “opportunities” with our simple advice: STOP overpacking for your financial journey.

During my years as an adviser, most of my clients have come to me weighed down by the volume and complexity of their overly packed portfolios. They desperately want to lighten the load, but they’re unsure what should be preserved and what can be safely jettisoned.

I’ve generally found three areas to focus on, helping clients lighten up after years of stocking up, keeping up, and/or moving up. Raise your hand if any or all of these traits sound familiar to you:

Stocking up

You’ve been knocking around Bay Street for a while and have accumulated quite a packed portfolio. Continue Reading…

Stress test your nest egg

Posted By |
Adrian
Adrian Mastracci

By Adrian Mastracci, KCM Wealth Management

Special to the Financial Independence Hub

Financial stress testing is an indication of how portfolios fare during tough times.

Some US banks have had difficulty passing their stress tests.

Many a portfolio can also benefit from a form of stress testing. Investors often make high demands on the nest egg.

Our tests may reveal cracks in your financial foundations. The analysis is straightforward with “Yes/No” answers.

We survey all new inquiring clients.
“Will your nest egg pass our battery of simple tests?”

Test on 6 issues

Continue Reading…