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.

The Great Retirement Con Game

Posted By Michael Drak | September 17, 2016

I don’t like to admit it, but over the years and due to circumstances largely beyond my control, I have turned into a skeptic.

I wasn’t born that way, but who here can blame me for turning into one with all the crazy stuff going on in this world? Today people seem to say anything they want. They just make stuff up. If you want proof of this, just watch the race for the presidency in the US. Enough said.

I discovered I was a skeptic one day while drinking bottled water. I used to get clean drinking water at several places in or outside my house. I just had to pick up the hose and there it was, as much as I wanted and best of all, it was free. I think we can all agree that when healthy things are free that’s a pretty rare and good thing, especially these days.

But things changed after I married the Contessa and became “sophisticated.” Water was no longer free and I began a new routine of driving to the grocery store to buy bottled water. It didn’t stop there, because I now drink a particular brand of water called “Smart Water,” probably not a very smart thing to do as it costs more than regular bottled water.

Have you read about what’s inside your bottle of water? The nutrition label is all zeros, because there’s nothing in it besides water.

It’s incredible how advertisers have been able to convince us to start drinking bottled water when we all have free clean water to drink at home. I would love to meet the person who came up with the idea that we need to drink eight 8-ounce bottles of water a day in order to stay healthy.

In North America bottled water is a $170 billion dollar industry. I don’t know where all this bottled water is coming from, but I can’t get this image out of my head of a couple of people sitting in a bathtub somewhere filling up water bottles. That’s what being skeptical does to you.

Beware The Spin Doctors

Optimizing CPP: the later you start taking it, the better

Posted By Jonathan Chevreau | September 15, 2016

Here’s my latest MoneySense Retired Money blog, which looks at the perennial topic of when to take the Canada Pension Plan, or CPP. Click on the highlighted text that follows: The best time to take CPP to maximize payouts. (It may be necessary to subscribe to get full access to the piece after a certain limited number of monthly views to the site).

In an earlier blog in the series, I revealed why personally I planned to take Old Age Security as soon as it was on offer, at age 65.

In this followup, I come to the diametrically opposite conclusion that the longer you commence deferring the onset of CPP benefits, the better — assuming normal health and longevity expectations.

I consulted three major sources for the piece. One is Doug Dahmer, founder of Burlington-based Emeritus Retirement Solutions. You can also access a useful CPP tool he runs at www.cppoptimizer.com. Run Dahmer’s name in the Hub’s search engine and you can find a number of guest blogs on the topic of decumulation.

In a nutshell, Doug thinks most of us — including me and my wife — should defer CPP as late as 70, choosing instead to start withdrawing from RRSPs in our 60s, assuming the money is needed on.

Another useful source I consulted is Doug Runchey of Victoria-based DR Pensions Consulting. For a small fee, Runchey — who used to work with the CPP — will take your government-issued CPP contribution statements and crunch the numbers to tell you how to optimize your benefits.

Becoming a new Robo-Advisor client may be challenging, Dalbar finds

Posted By Jonathan Chevreau | September 13, 2016

DALBAR has released results for its study of the user experience of North American users of robo-adviser services, dubbed the Robo-advisor Onboarding Experience study.

It found that opening a new account is a critical first point of contact between a service provider and a client.

In this press release, it found that some Canadian robo-advisors are “clearly falling short of peer performance as well as of Canadian investors’ expectations for service in the wealth management space.”

Service gaps identified

Funding the account was the biggest challenge facing Canadian robo-advisors.
Several firms encountered serious technical and logistical challenges using live chat effectively.

Congratulations – Your credit score has just gone up!

Posted By Financial Independence Hub | September 12, 2016

Richard Moxley

By Richard Moxley, eCreditFix.ca

Special to the Financial Independence Hub

Congratulations – Your credit score has just gone up!

I would love to say it increased just because you are reading this article but in reality it is because Equifax has implemented a change in its algorithm (the computer scoring system that banks use to predict the chances of you paying on time).

These changes have had a huge impact on the report and 80 per cent of Canadians have seen a jump in their personal credit score. So if you were declined for financing previously, you might want to try again.

Here are some of the main changes that have been made:

Mortgage Payments now affect your credit score

As of June, your mortgage payment history now affects your credit score. If you are like most Canadians and paying your mortgage is top priority, then this will be one of the main reasons why your score has jumped.

Lines of Credit report different than your Credit Card

Before the recent changes, a high balance (any balance over half of the limit) on a line of credit or a credit card would lower your score the same amount. Now, a high balance on your line of credit will not hurt your score as much as if you have a high balance on a credit card. Continue Reading…

How “Victory Lap” was conceived

Posted By Michael Drak | September 10, 2016

MOSCOW - AUGUST 08: Group Russian unknown golfers shake hands on annual open international event for professionals and fans - VI Moscow Festival Retrostyle in Le Meridien Moscow County Club August 08, 2008 in Moscow, Russia — Victory Lap: Work while you play, play while you work

How did the Victory Lap concept originate? I smile every time I think about the fact that Jonathan and I have written a retirement book about not retiring. I know it’s weird, but weird seems to work in today’s world …

It all started about five years ago: the day I woke up and realized I didn’t want to do my corporate job anymore. Thinking like this was strange for me because I had always liked my job. I was good at it and it paid well, providing security and a good living for my family.

But truth be told, over the last few years the job was starting to have a negative effect both on my health and on my personal well-being. The stress of performing at a high level year in and year out was getting to me. I was reminded of this every morning, when I took my blood pressure medication.

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