Category Archives: For Your Information

CPP Expansion: A Rare Opportunity to Fine Tune Your Retirement Plan

By Sandra Mann, MBA Financial Services, CPA, CGA, FPSC Level 1™

I’m sure you’ve heard by now that the Canada Pension Plan (CPP) is set for expansion beginning in 2019, but you may be wondering how the changes will impact how you manage your money today as well as how it will affect your retirement.

Hand Inserting Coin In Pink Piggybank

The changing face of work in Canada

When CPP was introduced in 1965, it was meant to be supplemental retirement income to bolster workplace pensions and personal retirement savings and investments. That intention hasn’t changed. What has changed is the Canadian “workscape.”

Working 30 years for the same company is not likely (or even desirable) for many people at the start of their careers. Climbing one corporate ladder is less common than seeking new opportunities at different companies. (I myself left a traditional financial services position for the fresh challenge offered by Money Coaches Canada and the Women’s Financial Learning Centre). Many Canadians change careers completely, some go back to school or start their own businesses. There is no defined path. Even those who decide to build a dedicated career with one employer are not immune to lay-offs and decreasing pensions. Continue reading →

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Your Money, Your Life – A Discussion with Steadyhand’s Tom Bradley

Tom Bradley, President and co-founder of Steadyhand Investment Management Ltd.

Tom Bradley, President and co-founder of Steadyhand Investment Management Ltd.

Money Coach Noel D’Souza, P.Eng.,CFP® recently sat down with Tom Bradley, President and co-founder of Steadyhand Investment Management Ltd. to talk about what Steadyhand offers Canadian investors how it serves its clients and his perspective on personal finance in Canada.

In addition to Tom Bradley’s leadership at Steadyhand, he selects and monitors Steadyhand fund managers and manages the firm’s Founders Fund. He has over 30 years of experience in the investment industry, including senior leadership roles at other well-known investment management firms. He currently serves as the Chairperson of the Investment Committee of the Vancouver Foundation.

Noel: Tom, who would you say is Steadyhand’s typical client and what services does Steadyhand offer?

Tom: We have a wide variety of clients, but I’d have to say that the bulk of our clients are what we call midlife professionals, in their forties and fifties, busy with kids and careers and the stuff of life. Very smart people who just don’t have the time, interest, or maybe knowledge, on the investment side of their finances, and so they look to us to do that for them.

2016-05-16_1212We also have an increasing number of young clients. Our low minimums, which are ten thousand per fund, have opened that door. But of course we also have many retired clients as well.

Our average client portfolio is around $275 000, but we have many clients under $100,000. We offer them investment management and we offer investment advice, not holistic financial planning.

Noel: I think that’s one of the reasons why Steadyhand’s work resonates with what we do at Money Coaches Canada, and why we work well together; we also typically serve busy mid-to-late career professionals, but we provide that holistic financial planning element.

What would you say is the single greatest benefit that a client will experience when working with Steadyhand?

Tom: I’d say that the single greatest thing we do for our clients is right in our name; we do a very good job of providing a steady hand. Dealing with the ups and downs of the market is crucial to long term returns. We keep people on track. We’ve looked at the data and our clients are letting the power of compounding, which Einstein calls the eighth wonder of the world, work for them in growing their assets over time.

We’re all living longer. We want people to think ahead to what I call the last third of their lives, which is going to start somewhere in their sixties and could very well go into their nineties. We need to get people to think ahead to that last third. Continue reading →

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5 tax filing tips to save you time and money

By Leslie Gardner, FPSC Level 1® Certificant in Financial Planning

Save Time and Money at Tax Time

If the thought of tax season makes you squirm, you’re not alone. But being prepared, filing on time and knowing what you can deduct will help you get the job done with more left over in your pocket.

This year’s income tax filing deadline is still April 30th, but because it falls on a Saturday Canada Revenue Agency (CRA) will consider you have filed on time up until midnight May 2nd. If you’re self-employed you have until June 15th to file, but any amounts owing are due by May 2nd.

While a couple of months would seem like plenty of time, the natural tendency to put off unpleasant tasks can leave you in a last minute scramble to find receipts for children’s activities, medical expenses or other deductible expenses. A lot of tax time stress comes from a time crunch that is avoidable.

If you break the process down into manageable chunks, when it comes time to deliver your documents to your accountant or sit down to file from your computer, you will feel calmer and more organized.

Here are 5 tax filing tips to save you time and money: Continue reading →

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5 Tips for Surviving Economic Uncertainty

Karin M byline photo

By Karin Mizgala, co-founder and CEO Women’s Financial Learning Centre and Money Coaches Canada

It has been a tumultuous start to the year for the stock market and for the various governments trying to keep the world’s economies on the straight and narrow.  For the ordinary person it’s confusing and worrying.

calculator-385506_1280But what we have to remember is that markets always have their ups and downs.  Easier said than done I know, but it’s best not to succumb to emotion or panic selling.

It’s now especially important to take a longer view of investments. If you weren’t planning to cash in all your stocks or mutual funds now, it’s no time to panic and change those plans. Markets move in cycles and this is unlikely to be any exception. There are even some investors, quick to see a silver lining, who are snapping up stocks at these lower prices.

There are things that you can do to cope and we’ve compiled our top five tips to reduce stress during economic uncertainty.

1. Focus on the things you can control — like living within your means and paying down debt

Take interest rates for example. There’s little you can do about them except make sure you’re prepared for whatever may come. If you’ve racked up credit card debt, make a workable plan to pay it off and cut up your credit cards or at least put them in deep freeze. Use cash for your discretionary expenses like eating out and entertainment. Figure out what you spend on those and other frills and take that cash out at the beginning of the week. Once it’s gone, it’s gone — no going back to the ATM before next week’s installment of ‘fun money.’ Continue reading →

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Questions to Ask Your Financial Advisor

By Noel D’Souza, CFP®

iStock_000043073486_MediumGetting good financial advice in Canada is a tricky matter – trickier than it should be, in my opinion. The main challenges facing a seeker of financial advice come down to:

  • Can I find someone qualified to assist me with my particular needs?
  • Can I rely on this person to have my best interests at heart?
  • Are we a good fit to work together?

Given these challenges, what is a person to do?

As with so many things in life, being an informed consumer will serve you well. But again, there’s a bit of a Catch-22 here. There’s an inherent imbalance in knowledge when one is seeking advice of any kind. If you’re like me, think of the last time you visited a mechanic and were told “Your right rear differential thing-a-ma-jig is leaking fluid and needs to be replaced. It will take 2 hours and cost X $. Should I go ahead with the repair?”

Huh?!

After all, you’re seeking advice from an expert because you don’t have the knowledge and experience in that area, right? But there are a few basic principles to remember and questions to ask that will serve you well. Continue reading →

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Is your financial nest egg at risk of being scrambled?

Sheila Walkington Money Coach Vancouver BC

By Sheila Walkington, Co-Founder and CFO Money Coaches Canada, Co-Founder Women’s Financial Learning Centre

Names and minor details have been changed to protect privacy.

Broken gold egg on white background.

Most Canadians recognize the importance of making plans for their future, creating a nest egg through RSPs, TFSAs, company pensions, real estate and other investments, but as the saying goes; Life is what happens to you while you’re busy making other plans. What would happen to your nest egg if life threw you a curve ball, such as an accident or illness?

Insurance is one of those topics that many people avoid talking or even thinking about. There are so many different types of policies that it can easily become overwhelming to sort out what you need and what you don’t need. It’s not uncommon for people to opt into a group plan at work and then tuck the benefits booklet into a filing cabinet without really understanding the coverage they have. But when it comes to insurance the more you know, the better you can find a product that suits your situation and protects your future.

The two most common insurance products are Life Insurance (either Term Insurance or Whole Life/Universal Insurance) and Disability Insurance. A third insurance, Critical Illness, is newer in Canada and unlike disability insurance, which is linked to your ability to work and paid-out over time, Critical Illness insurance pays out in full usually 30 days after your diagnosis.

A financial settlement from insurance can take a lot of stress off a bad situation

The death of a spouse, an illness that keeps you from working, high medical bills from a life threatening illness; when times are tough, no one needs financial stress as well. Money doesn’t take away our problems, but it can sure make things a little easier at times. Disability will cover bills if you can’t work, life insurance can pay off the mortgage or debt or cover education costs if a spouse dies, and critical illness can be used to cover medical bills or to hire some help if you are sick.

I recently had a discussion about insurance with Glennis Deslippe, who has been a living benefits specialist with Integral Financial Services Inc. for the last 12 years. Continue reading →

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Money Coaches in Conversation – What you should understand about fees and financial advice

Recently Women’s Financial Learning Centre and Money Coaches Canada co-founder Karin Mizgala sat down with Money Coach Noel D’Souza to discuss the changing landscape of financial advice in Canada.

Women's Financial Learning Centre and Money Coaches Canada co-founder Karin Mizgala

MCC & WFLC co-founder Karin Mizgala

Karin: As someone in the financial industry, it’s very common to be asked by people outside the industry, to explain the different fee structures of financial advice. So, Noel, let’s start with an overview of the common compensation models available to Canadians today.

Noel: The most prevalent model we see in the industry is the commission-based advice model, where an advisor sells products, typically mutual funds or some other investment product, they may also sell insurance, and they receive a sales commission for making the sale and also quite likely receive a trailing commission which is supposed to cover on-going advice and services. Usually the client never sees the commission fees, and we’ll be discussing how that may change in the future, but usually those fees are hidden within the cost structure of the product they are buying.

The second type is fee-based. An advisor will charge the client fees based on the size of the assets under management, a percentage of the total portfolio.

The third model, which is up and coming, is the model we work under; fee-for-service. Clients pay a fee directly and explicitly to the advisor for services rendered and it’s not tied to product sales, or size of assets, in any way.

Karin: So that will sound pretty straight forward to most people, why does it become murky, what are the implications for someone seeking financial advice? What are the benefits and shortcomings of each model? Continue reading →

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Income tax challenges for the self-employed

By Melanie Buffel BA Psych, MBA Candidate

iStock_000018832279SmallWhen people choose self-employment, they are often attracted to the challenge and excitement of creating a business they are passionate about. They may look forward to a more flexible work schedule, or the possibility of earning more than they did as an employee. The one thing most people don’t get excited about is keeping track of all their expenses and planning for their income taxes.

But procrastination in handling the financial side of your business can result in frustration, or even panic, as the tax deadline looms.

There are some real tax challenges for the self-employed:

  • Your income may vary month-to-month making it difficult to estimate annual earnings and thus the appropriate tax rate.
  • A varied income also makes it hard to create a cash flow plan.
  • Even if you create a plan it can be difficult to honour it when cash flow is tight.

Then there are the pitfalls of inexperience:

  • Losing track of receipts.
  • Mixing personal expenses with business expenses.
  • No clear sense of how much to set aside for income taxes.
  • Falling behind and still trying to catch up on last year’s taxes owing.
  • Missing the filing deadline and incurring penalties.
  • Not using a bookkeeper or professional accountant to help with your tax preparation/filing.

So what do you do if you find yourself unprepared for this year’s return? Continue reading →

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Glossary: Mortgage and Equity terms

Financial literacyEvery profession, sport and hobby has its own expressions, jargon, and acronyms that can leave those less familiar with them a little lost or confused. Helping our clients understand the language of money is one of the things our coaches take pride in, because we want to ensure that we are always talking with you, not at you.

To that end, we’ve decided to start a glossary of terms we are often asked to clarify, and what better time to begin than November, which is Financial Literacy Month in Canada.

Here are four terms related to home ownership:

Term of a Mortgage vs. Amortization period 

The mortgage term is the number of years the loan is valid. Mortgage terms range from six months to 10 years. Mortgage rates vary depending on the term, usually the lower the rate the shorter the term. At the end of the term, if the mortgage is not paid off, it will be renegotiated at a new rate for a new term.

The amortization period is the number of years it will take to pay off the entire mortgage. Usually the more years over which you spread the mortgage, the smaller the monthly payment will be, but, and it’s a big but, the longer you take to pay the mortgage the more you will pay in interest over the long term. Continue reading →

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Cracking your personal money code – the psychology of money

By Karin Mizgala, BA Psyc, MBA, CFP® 

Prescriptive advice is the staple of magazines and blogs. It’s often presented in easy to read lists with catchy headlines like: How to…. 3 ways to… 7 habits of…. We’ve all seen the format, we even use it here on this blog. It’s a popular style because it gets right to the point with actionable steps to make changes in everything from your health, your parenting, and of course your finances.

So why aren’t we all healthy, wealthy, fantastic parents? Well, some people are. But many others find that somewhere between information and action, something disconnects. It’s that space between that motivates Vancouver psychologist turned financial advisor, Tracy Theemes, to explore the psychology of money, especially as it pertains to women. Continue reading →

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