General

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…

Health is true Wealth: How to choose the right diet

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Diets! There are so many of them to choose from! How do you decide which one is right for you? There is no single, without-a-doubt best diet for every person to follow, always and forever. While you may feel like a particular nutrition idea – such as paleo or ketogenic – works for you, it doesn’t mean everyone else should follow the same program.

The human body can survive and thrive on a host of different nutritional conditions, which is clearly demonstrated by the traditional diets of various ethnic groups throughout the world. While there are huge differences in the common diets out there, they can all raise nutritional awareness and attention, they focus on food quality, they help eliminate nutrient deficiencies and they help control appetite and food intake.

The best diet is the one that works for you and takes into account your physical and biochemical differences, as well as your lifestyle such as family, life demands, work situation, income level, cooking experience and food availability. Before jumping onto the next fad diet train, take the time to research what the diet entails, what the pros and cons of the diet are and really think about why you want to consider following a restrictive diet in the first place.

Let’s take a look at some of the more common diets:

THE KETOGENIC DIET

In the early 1920s, the Ketogenic diet was used in experiments on children with epilepsy. By the 1940s the Ketogenic diet made its way into medical textbooks as a treatment for childhood epilepsy.

The Ketogenic diet is a high fat, extremely low carbohydrate diet. A typical balanced meal is about 30 percent protein, 40 percent carbohydrates and 30 percent fat. A Paleo meal would have about 40 percent protein, 20 percent carbohydrates and 40 percent fat. Ketogenic, on the other hand, is 20 percent protein, 5 percent carbohydrates and 75 percent fat.

Just how little is 5 percent carbohydrate? It’s about the equivalent of eating 10-15 grapes for the whole day. Indeed, the Ketogenic diet is the most restrictive and limited style of eating. However on the ketogenic diet, one can typically eat unlimited greens without going over the daily carbohydrate intake. For particular groups of people, ketosis is helpful, but for other people it can actually be harmful. For many populations ketosis has little to no effect, and is much too hard of a diet to follow consistently. Ketosis should not be used to try and cure ailments, it should not be used to randomly “get healthy” and should be done under close medical supervision for a specific objective.

In particular, the Ketogenic diet has probable benefits for those with metabolic diseases, neurodegeneration and brain injuries.

I have been eating a ketogenic diet for a year now – mainly to reduce inflammation and to prevent cancer re-occurrence. I do feel excellent on this diet – heaps of good, even energy all day, great focus and mental clarity, and great sleeps. I will be writing more extensively on this way of eating down the road.

If you have a specific health problem that a Ketogenic diet may help with, consult your doctor first and carefully monitor and track dietary modifications.

For Ketogenic recipes, I recommend a cook book written by Patricia Daly and Domini Kemp called The Ketogenic Kitchen. Continue Reading…

5 sensible steps to improve your 2018 game plan

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“Your future depends on many things, but mostly on you.”
—Frank Tyger (1929–2011), cartoonist, columnist and humourist

Designing the investment plan for the long haul requires much serious thought. Unfortunately, investors shortchange themselves on two fronts. Firstly, they spend far too much time selecting investments. Secondly, and more important, they spend too little time researching and establishing their investment policies and strategies. The ones that the plans should put into effect to reach personal goals.

In my experience, few investors actually have a sensible game plan that is being followed. Too often, this results in a collection of “flavour of the day” investment selections. Designing the appropriate investment plan is essential, particularly the asset mix targets.

“Understanding the major investment risk factors brings perspective to the plan. The ability, willingness and need to take risks are your top three.”

Happily, this situation is easy to rectify. A new year is about to make its grand entrance. Let us take a breather to contemplate a few improvements.

Stewarding the finances is truly a long journey. If you were my client, I would start with this question, “What is important about investing to your family in 2018 and beyond?”

My observation is that many investors opt for preservation of capital. Others focus on portfolio growth. The rest concentrate on the retirement income stream. Lifestyle needs are also high on the pecking order.

I touch on a handful of key steps in designing your game plan:

1.) Retirement prospects

Determine the family’s desired retirement income goal in today’s dollars. Calculate the size of portfolio to reach and sustain the goal. This provides portfolio direction and purpose. Estimate the personal rate of return required to achieve the retirement nest egg ballpark. Then treat that rate of return as the “investment benchmark” for the game plan.

Once the personal rate of return is identified, there is likely no need to incur higher investment risk than necessary. This is especially important to retired investors. Consider all the investment accounts owned as part of the big picture, not in isolation. Revisiting your “asset location” best practices helps fine tune the game plan.

2.) Investor profile

Analyze which type of investor profile suits and feels best. The most familiar ones are labeled as preservation, income, balanced, growth and aggressive. In my experience, investor profiles change infrequently.

The majority of investors are comfortable within 40% to 60% allocated to stocks and the remainder to cash and bond selections. For example, a balanced profile typically allocates about 50% to stocks, 40% to bonds and 10% to cash instruments.

3.) Asset mix 

Asset mix decisions have the greatest impact on portfolio outcomes than any other factor. Studies show that these decisions explain a substantial amount of variations in total portfolio returns. Continue Reading…