Erica Alini quickly became one of my favourite personal finance writers when she joined Global News as a national money and consumer reporter. Her columns and Money123 newsletter tackle a breadth of financial topics and are must-reads each week.
That’s why I was excited when I heard that Erica planned to write a book. I was even more excited when Erica reached out to me to help contribute to chapters on earning more income and on retirement planning.
The end result is a personal finance book designed to help young Canadians navigate their way through an ever-changing world. Money Like You Mean It: Personal Finance Tactics for the Real World is not your parents’ personal finance book.
It tackles money management and the new ways we can get into debt, not just from excessive borrowing but through behavioural traps like Buy Now, Pay Later and insidious monthly subscriptions.
Erica discusses Canada’s sky-high housing prices and offers readers a framework to help people decide whether to rent or buy. She writes about the stigma of receiving help from the bank of mom and dad, but also how these monetary supports can perpetuate wealth inequality.
The topic of earning income often gets ignored in personal finance books. This is a mistake, and in Money Like You Mean It Erica looks at the issues of working in the gig economy, whether side-hustles are worth the effort, how to negotiate a raise, and why job hopping might lead to better pay raises.
On retirement, Erica says it’s time to let go of the old-fashioned concept of retirement. Instead, she says, “retirement is becoming less and less of a black-and-white pivot from work to non-work.
Increasingly, retirement is more of a slow and gradual downshifting from working all the time to working less. Perhaps that means trading the office for some freelance consulting, giving you longer vacations and more time to smell the roses while still earning an income.
Erica also looks at what she calls nest-egg inequality for women and people of colour – a topic that does not get enough attention in personal finance.
I enjoyed the investing chapter as it aligns with my views on keeping your portfolio simple with low cost index funds or ETFs.
Young parents will get a lot out of the chapters on how to manage finances as a couple, as well as saving for a baby.
The best part of the book is how Erica took a journalistic approach to writing it. The book is incredibly well researched, and I don’t recall ever reading a personal finance book with so many expert quotes on such a wide range of topics.
Money Like You Mean It is a fantastic read. I think Erica did a tremendous job putting together a comprehensive and entertaining guide to managing your finances. It will make a great stocking stuffer for the young adults in your life.
Pre-order a copy today. The book will be officially released on December 9th.
This Week’s Recap:
I’ve updated some of my most widely read articles on CPP to keep the numbers fresh and up-to-date:
- Why You Shouldn’t Take CPP at Age 65
- CPP Payments: How Much Will You Receive From Canada Pension Plan?
- 3 Reasons to Take CPP at Age 70
- 3 Reasons to Take CPP at Age 60
Last week I also shared my 2022 financial goals.
Promo of the Week:
I moved my RRSP and TFSA from TD Direct Investing to Wealthsimple Trade in 2019 to take advantage of their commission-free trading platform. Unlike the meme stock investors that have flocked to the app during the pandemic, I use WS Trade to simply buy more units of Vanguard’s VEQT and hold for the long-term.
Related: Exactly How I Invest My Money
Their latest promotion will give you two free stocks to trade when you sign up and join Wealthsimple.
It sounds like a stock trading gimmick, but in reality you’ll get the cash equivalent of two random stocks (ex. I got Clover Health, Capstone Mining, and Blackberry – but really just got $43.65 deposited into my account). Do with it what you will.
The stocks, and therefore the cash equivalent, will have a value between $5 and $4,500, with an average of $15. Around 95% of people will receive less than $50 based on the stock value at the time of selection.
Again, use this referral link, open and fund a new Wealthsimple Trade account, and your cash bonus will be applied within 24 hours:
Weekend Reading:
Our friends at Credit Card Genius share the best credit card offers, sign-up bonuses, and deals for December 2021.
My Own Advisor Mark Seed shares his financial independence update.
Michael James on Money shares a conversation about wealth inequality.
An interesting debate on whether it’s smarter to buy a vacation home or stick to short-term rentals.
Millionaire Teacher Andrew Hallam explains why you may be happier buying less stuff:
“If you’re tempted to buy something unnecessary, ask yourself if you would still buy it if nobody else could see it. If the answer is yes, go ahead and buy it. But be ruthless with this assessment. Most people buy things, in part, to be seen having them. And the truth is, nobody will love you any more or any less based on the stuff you own.”
Here’s a great podcast interview with author Ramit Sethi on how couples can make peace over money.
Of Dollars and Data blogger Nick Maggiulli explains how difficult it can be to have a truly objective point of view if you never escape your own bubble.
Something I’m getting asked about more and more lately by parents of young teens. Jason Heath explains how to invest as a teenager in Canada.
Active fund managers have a long history of underperforming their benchmarks, but in a pack of laggards Canada’s active managers have been the worst.
Finally, we know that managing longevity risk can be a challenge in retirement but these new products aim to close the retirement income gap.
Have a great weekend, everyone!
Yes, I know it’s not even December yet but I’m going “that guy” – the first to share his 2022 financial goals. First, a quick trip down memory lane.
I’ll never forget attending a ceremony to be recognized for 10 years of service at the University along with dozens of other employees receiving awards for 5 to 50(!) years of service. As I sat there I remember thinking, if I’m still here in five years to receive my 15-year recognition then something has gone horribly wrong in my life plan.
Two months later we embarked on our epic 32-day trip to Scotland and Ireland. After this life changing trip I decided to put in my notice for the end of the year and pursue my entrepreneurial dreams.
It has been two years since I quit my job as a post-secondary fundraiser and turned my long-time online side hustle into a full-time business. Aside from *waves hands at everything* the transition has gone even better than I imagined.
I work side-by-side with my wife, who handles all of the new client communication, scheduling, invoicing, and so much more so I can focus on what I do best – writing, planning, and working one-on-one with our existing clients. It’s a dream come true. Best of all, we’re there for our kids when they leave for and come home from school.
The result is a wildly successful business that does not compromise a healthy work-life balance. We’ll put that to the test next year (fingers crossed) when we can hopefully resume travelling. I may or may not have shed a tear when our youngest daughter got her first dose of vaccine yesterday.
2021 Recap:
We had five financial goals or money moves to make this year. The first was to catch up on unused contribution room in my wife’s TFSA. Our goal was to contribute $50,000 but we’ll end up short of that by about $6,000. Life is about trade-offs and we opted to spend that $6,000 on some backyard landscaping instead.
I’m current with my TFSA contributions and so we were easily able to take care of our second goal of maxing out my annual TFSA limit of $6,000.
Our third goal was to continue investing aggressively inside our corporate investing account. We already have a healthy cash float for our business, and our expenses are quite low after we pay ourselves, so we’re able to invest excess profits inside the corporation. Our goal was to invest $48,000 in 2021, but business revenue was better than anticipated and we were able to invest $70,000.
Our fourth goal was to max out our kids’ RESP contributions ($5,000) and we have done that again this year. A related goal was to rebalance this account, which is 100% invested in equities, by adding bonds. I have not done this yet. That may have been wise in hindsight but the fact is we need to dial down the risk in this account as my kids are now one year closer to needing the money for post-secondary.
The fifth goal was more of a change in philosophy. Before the pandemic I thought it would make sense to start paying down the mortgage more aggressively by 2021, but when the interest rate on our variable mortgage fell to 1.45% I decided to forego any extra mortgage contributions and focus on the other four priorities above.
2022 Financial Goals:
If you’ve been following my journey you know that we reached our $1M net worth milestone last year and now aim to reach Coast FIRE status.
What this means to me is having the flexibility to work and earn less without feeling the pressure of maintaining a high savings rate. The truth is our rich life includes more travel and active leisure, and less time spent in front of a computer working on a spreadsheet or on Zoom calls.
We don’t know yet what 2022 will bring in terms of the ability to safely travel outside of Canada as a fully vaccinated family. I am forever an optimist and have tentatively booked trips to Maui, Italy, and the U.K. (all refundable).
Financially, our 2022 goals will look a lot like this year’s goals.
- Finish catching up on my wife’s unused TFSA room ($37,500)
- Max out my annual TFSA room ($6,000)
- Invest excess profits in the corporate investing account (~$48,000)
- Max out RESP contributions ($5,000) and rebalance for real this time
- Roll the extra $6,500 ($44,000 to TFSA in 2021 – $37,500 to TFSA in 2022) into our travel budget
We can achieve this by continuing to pay ourselves at our regular rate, while intentionally earning less business revenue (taking on fewer clients and fewer writing assignments). Since it can be hard to say no to new business, we’ve already blocked out our calendar for most of April and most of July (when we presume to be travelling).
You can see where this is going. If we’re successful next year then 2023 will shape up to be our first Coast FIRE year where we are only contributing $6,000 each to our TFSAs, plus $5,000 to the kids’ RESP.
I’ve done the math to know that we can just let the rest of our investments ride without ever adding to them again. We’d have the option to spend that extra $31,500, or reduce the amount we pay ourselves, or some combination of the two.
More likely, our business will still continue to do well and so we can keep adding excess profits to our corporate investing account.
That’s the plan, anyway.
This Week’s Recap:
I recapped our trip to Boston in the last edition of Weekend Reading.
Is free trading really free? I explore the issue of trading fees in my latest MoneySense column.
On Young & Thrifty I look at whether stocks are more risky than real estate.
Promo of the Week:
If you’re a business owner then you need to take advantage of the American Express Business Platinum Card and all of the perks that come with it.
New cardmembers can earn 80,000 Membership Rewards points when they spend $6,000 in the first three months. If you keep the card past the 14 month mark and make one purchase then you’ll earn an additional 25,000 Membership Rewards points.
I transfer Membership Rewards 1 to 1 to Aeroplan where I value Aeroplan miles at 2 cents per mile*. That means your initial 80,000 welcome bonus points can be worth up to $1,600.
*Note that I recently redeemed Aeroplan miles for four business class tickets from Calgary to Rome. The tickets would have cost a whopping $33,000 in cash, which means I got an incredible 10.5 cents per mile value out of those Aeroplan miles.
You’ll also get hotel perks and airport lounge access.
The $499 annual fee may be tax deductible as a business expense.
Weekend Reading:
Costco ended its credit card relationship with Capital One and is forging ahead with CIBC. Our friends at Credit Card Genius breakdown the new details on what the CIBC Costco MasterCard is going to offer.
Another plug for Dan Bortolotti’s excellent new book – Andrew Hallam shares how to reboot your portfolio with Canada’s ETF guru. Read my review of Reboot Your Portfolio here.
Has the pandemic ended the dream of retiring abroad? Jon Chevreau says it can still be done.
The odds of you picking a single stock and it becoming one of the big winners of the future are not in your favour. Read why this is the stock picker’s bear market.
Investing is easy just buy shares in companies you know and use every day. pic.twitter.com/vbJalyws0S
— Boomer and Echo (@BoomerandEcho) November 24, 2021
With assets everywhere seemingly overvalued Nick Maggiulli (Of Dollars and Data) shares why this will not last.
PWL Capital’s Justin Bender explains the key concepts of asset location:
My own view is that most DIY investors should ignore asset location and intentionally hold the same asset mix across all accounts for simplicity.
Millionaire Teacher Andrew Hallam tells investors: Don’t worry, be happy.
“Take comfort knowing this: most wealthy retirees didn’t earn their fortune with a single home run. Sure, stories of fast fortunes grab our attention. But they aren’t the norm. Instead, most people grow wealthy because they spend far less than they earn, they invest responsibly…and they’re patient.”
An enjoyable read from Wealthsimple Magazine on the five simple rules to be the absolute worst stock picker.
Steadyhand’s Tom Bradley says investors should be wary of the next big thing in ETFs.
Finally, why millions of Canadians are planning to choose self-employment, and how to make that transition.
Have a great weekend, everyone!
My wife and I travelled to Boston last week and spent four nights in this amazing and historic city. We had a great time, but it felt strange to travel outside of Canada for the first time in almost two years.
We had a lot of anxiety about the requirements for leaving and entering Canada, but everything was relatively painless. We took a rapid antigen test at Shoppers Drug Mart ($40 each) and had our printed out (negative) results three days prior to departure. We also went online and scheduled a PCR test at a CVS in Boston. These tests must be taken no more than 72 hours prior to your return flight to Canada.
Much has been made of the cost of taking a PCR test in the U.S. but the tests are free at Walgreens and CVS Pharmacy locations if booked online. We just used our hotel’s address when we made the appointment, then took an Uber to the drive-thru location. No questions asked about who we were and where we were from. We got the results back in about 36 hours and then showed the negative result when we checked-in to our flight.
That slight hassle aside, the trip was a blast! We went with another couple, friends of ours from Calgary, and stayed downtown at the Courtyard by Marriott – a perfect location for getting around on foot or by train. TD Garden is also right across the street and we watched the Boston Celtics beat the defending champion Milwaukee Bucks in overtime.
The only downside to the trip was our original reason for going – to watch my beloved Cleveland Browns take on the New England Patriots. Unfortunately my Browns decided not to show up and got thoroughly pummelled 45-7. Not fun!
With the news of Health Canada approving the Pfizer vaccine for 5-11 year-olds we can finally clear one of the last hurdles to carefully resuming our travel plans next year and beyond. Our tentative plan is to visit Maui in February, Italy in April, and the U.K. in July.
Reboot Your Portfolio Giveaway:
Thank you to everyone who left a comment and entered to win a copy of Dan Bortolotti’s new book, Reboot Your Portfolio.
We had more than 100 entries and the lucky winner is Devin, who commented on November 8, 2021 at 6:07 am. Congrats, Devin!
I wish I had more copies to give away because this book is a must-read for every investor who is interested in reducing their fees, diversifying their portfolio, simplifying their investment strategy, and ultimately enjoying a more reliable investment outcome over the long term.
This Week’s Recap:
I made my MoneySense writing debut this month with two articles on ETF investing. The first looks at growth investing, while the second article is about how to use your ‘explore’ investments to tame volatility.
Over on Young & Thrifty I wrote about investing FOMO and how to curb your fear of missing out.
I also explained how to decode your investment fees whether you invest in ‘A’ series mutual funds, use a robo advisor, or select your own ETFs.
Back here on Boomer & Echo I shared how to crush your RRSP contributions next year with one simple trick.
Promo of the Week:
This week’s promo is brought to you by Marriott’s Bonvoy rewards program.
Our flight to Boston left in the early morning from Calgary. We live two hours away in Lethbridge, and so we decided to stay at the Calgary Airport Marriott in-terminal hotel the night before.
We used a free night certificate from our Marriott Bonvoy American Express Card benefits to stay for free and then just rolled out of bed and checked-in to our flight. Easy.
We also booked the Courtyard by Marriott Boston on points we’ve saved up over the past two years. We build up hotel points by using the American Express Cobalt Card and then transferring Membership Rewards to Marriott (5 MR points = 6 Bonvoy points).
Right now you can earn 70,000 Marriott Bonvoy points when you charge $1,500 to your card in the first 3 months. You’ll also get a free night certificate to use in a Category 5 hotel.
Weekend Reading:
Our friends at Credit Card Genius compared 20 rewards programs to determine which Canadian rewards program is worth the most in categories ranging from flights, to hotels, to groceries & gas, and more.
Global’s Erica Alini looks at how the new ‘buy now, pay later’ options affect your brain.
This author was scammed out of $15,000. Why didn’t she spot the red flags?
The Irrelevant Investor Michael Batnick has been playing around in the metaverse and also got scammed out of $5,000 from his digital wallet.
A good article from Michael James on Money on why you should invest how he says and not how he does. Michael is, like I am, a big proponent of low cost passive investing using a simple one ETF solution. But he’s comfortable holding multiple ETFs, including U.S.-listed ETFs held inside his RRSP, and tilting his portfolio to small cap value stocks.
I prefer a simpler approach to investing.
In an excerpt from his new book, Reboot Your Portfolio, Dan Bortolotti explains why the best investing move is usually…not to do anything.
Millionaire Teacher Andrew Hallam shares why these Millennial investors want stocks to crash.
Preet Banerjee does a terrific job explaining how it’s possible to offer commission-free stock trading and why it’s bad for investors:
Since Andrew Hallam began investing, every week of every year a famous economist, a famous hedge fund manager or an esteemed journalist from a respected financial publication has headlined, “Stocks are heading for a crash.”
Why tactical asset allocation (switching between different asset classes in response to changing economic conditions) fails to keep up with static index investing.
My Own Advisor Mark Seed explains how to invest for retirement when time is no longer your friend.
Gen Y Money shares the uncomfortable truth about the FIRE movement.
Finally, the CPP earnings cap is increasing at the fastest rate in 30 years. Here’s why that’s happening and what it means.
Have a great weekend, everyone!