Tag Archives: Canadian Dream: Free at 45

Oct 23: Best from the blogosphere

Sustaining a blog for months and years is a remarkable achievement. This week we go back to basics and check in on what some of our favourite veteran bloggers are writing about.

If you haven’t heard, Tim Stobbs from Canadian Dream Free at 45 has exceeded his objectives and retired at age 37. You can read about his accomplishment in the Globe and Mail and discover how he spent the first week of financial independence here.

Boomer & Echo’s Robb Engen writes about why he doesn’t have bonds in his portfolio but you probably should. He acknowledges that bonds smooth out investment returns and make it easier for investors to stomach the stock market when it decides to go into roller coaster mode. But he explains that he already has several fixed income streams from a steady public sector job, a successful side business and a defined benefit pension plan so he can afford to take the risk and invest only in equities.

On My Own Advisor, Mark Seed discusses The Equifax Breach – And What You Can do About It. In September, Equifax announced a cybersecurity breach September 7, 2017 that affected about 143 million American consumers and approximately 100,000 Canadians. The information that may have been breached includes name, address, Social Insurance Number and, in limited cases, credit card numbers. To protect yourself going forward, check out Seed’s important list of “Dos” and Don’ts” in response to these events.

Industry veteran Jim Yih recently wrote a piece titled Is there such a thing as estate and inheritance tax in Canada? He clarifies that in Canada, there is no inheritance tax. If you are the beneficiary of money or assets through an estate, the good news is the estate pays all the tax before you inherit the money.

However, when someone passes away, the executor must file a final tax return as of the date of death.  The tax return would include any income the deceased received since the beginning of the calendar year.  Some examples of income include Canada Pension Plan (CPP), Old Age Security (OAS), retirement pensions, employment income, dividend income, RRSP and RRIF income received.

When the Canadian Personal Finance Blog’s Alan Whitton (aka Big Cajun Man) started investing, he was given a few simple rules that he says still ring true today. These Three Investment Credo from the Past are:

  • Don’t invest it if you can’t lose it.
  • Invest for the long term.
  • If you want safety, buy GICs.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Jan 30: Best from the blogosphere

By Sheryl Smolkin

The thing about January is that everyone is either trying to get physically, mentally or financially fit, although some people are closer to the end game than others. Here’s what some of our favourite bloggers wrote about saving money and reaching other goals in 2017.

In How to Save Money on Groceries: 10 Easy Ways to Cut Your Bill in Half Tom Drake gives the usual advice, such as make a list and stick to it, try private label brands and buy case lots of products you use regularly. But he says you can also kill two birds with one stone by eating less so your grocery bill goes down.

Stephan Weyman says one of the reasons he shops at Costco is the company’s “no questions asked, crazy return policy.” For example, the company took back a three year old recumbent bicycle that broke down two years before and he got a $500 refund. He has also successfully returned a bicycle purchased for his wife that turned into a garage ornament for $200; cushioned floor mats, and frying pans that were supposed to be professional quality and didn’t hold up.

On Give me back my five bucks, Krystal says her primary 2017 goals are to have a fun year full of travel and adventure. She plans to stay debt free and continue to save save at least $1,650/month in her RRSP/TFSA. She also resolves to curb impulse spending, continue to be active and keep in better touch with friends.

Cait Flanders (formerly Blonde on a Budget) who paid off her $28,000 of debt in two and a half years and in July 2014 completed a year- long shopping ban, plans to make 2017 the year of slow living.

Each month, she is going to experiment with slowing down in one area of her life. Some of the different things she will experiment with are: slow food, slow mornings, slow evenings, slow movement, slow technology and slow money. “The only thing I won’t do is make a list of what I’m going to work on each month. If I’ve learned anything over the past few years, it’s to trust my gut,” Flanders says.

And finally, Tim Stobbs has documented progress towards his early retirement goal on Canadian Dream: Free at 45 for several years. He hopes 2017 is the last year of his full-time working career. However, he is beginning to notice a new emotion in the people around him: fear. He gets the usual well-meaning queries like:

  • Are you sure you have enough saved?
  • What happens if you don’t get a part time job?
  • What will you do with unexpected expenses?
  • Maybe you should work just one more year?

But Stobbs figures the worse that can happen is that he will have to go back to work for a few years. “I fully admit I may not have enough saved to head into semi-retirement,” he says.  “But I don’t want to live a life based on fear of the unknown.  I’m willing to try out something new and see what happens. “


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Sept 26: Best from the blogosphere

By Sheryl Smolkin

You are back to work after your summer holiday. You have used up all your vacation days for the year. It’s dark outside when you have to get up for work. You’d like to retire early, but life is expensive and forever is a long time.

What are you willing to give up both now and later to achieve your goal? Do you have what it takes to live very frugally? Here are some blogs and blog posts that may give you some ideas if packing it in really early is at the top of your bucket list.

Engineer Tim Stobbs who lives in Regina, Saskatchewan is the author of Canadian Dream: Free at 45. While his objective initially was to retire at age 45, he’s pushed that date back to age 40. His ultimate goal between investments and home equity is a net worth of around $1 million. With a net worth in August 2016 of $883,000, he is getting close to meeting his target. He has some Dark Fears but has come to realize it is impossible to cover off every possible contingency in advance.

Freedom 35 is written by two married engineers in their early 30s living in sunny California to document their journey to financial independence and early retirement. Their Progress to Freedom 35: 2016 Q1 Update reveals that depending on the following projected withdrawal rates, they are less than three years away from bidding adieu to their employers:

Projected retirement date at 3% withdrawal: May 2022
Projected retirement date at 4% withdrawal: Sep. 2019
Projected retirement date at 5% withdrawal: Jan. 2018

Mr. Money Moustache was a thirty-something retiree when he started his blog. He and his wife retired from real work back in 2005 to start a family. “This was achieved not through luck or amazing skill, but simply by living a lifestyle about 50% less expensive than most of our peers and investing the surplus in very boring conservative Vanguard index funds and a rental house or two,” he writes. “Yet the whole country seems to be living ridiculously expensive lifestyles while thinking they are completely normal, and then being baffled when they have no money left over to buy their own freedom.”

getalifetree

Living a FI describes himself as a 38-year old happily retired dude (formerly a software engineer) living in Boston. He says that if you are close to the end of your early retirement journey, what you need to do is Build a Vision of Life Without Work. His favourite approach to managing the transition between work and retirement was created by Ernie Zelinski, author of several early-retirement lifestyle books.  He named the technique the “Get-A-Life-Tree.” (see above). “If you follow this method, you’ll easily wind up with tons of stuff to do, scattered over a few pages,” he explains.

And finally, ThinkSaveRetire is Steve’s blog about financial independence and taking control of his life. He figures that if he is still working at age 43 he has done something wrong. Here are several of his “must reads” if you want to get the most out of his journey.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Sept 21: Best from the blogosphere

By Sheryl Smolkin

Saving for retirement is important, but working for 35 years with only a few weeks of vacation a year is a daunting thought for many people. However, some companies allow employees to take one or more extended leaves during their career and in some cases establish income deferral programs to help them finance a career break.

Here are some of the things you need to know about taking a sabbatical in Canada.

In the Globe and Mail, columnist Tim Cestnick offers Tax and other tips for planning a work sabbatical. He discusses the little known privilege in our tax law that permits your employer to set up a deferred salary leave plan (DSLP). The plan allows you to set aside a portion of your pay each year for a certain period of time and to then take a leave of absence. The money you set aside under the plan is used to pay you during your time off. If the DSLP is set up properly, you won’t face tax on the amounts you set aside until you make withdrawals later during your leave.

In The Sabbatical, a 2009 blog on Canadian Dream: Free at 45, Tim Stobbs explores the pros and cons of taking a sabbatical. He says taking three months off will allow you to take a major trip, build your own cabin or take courses to further your education. But the downside is you may not be able to afford the loss of income or benefits, and there could be career fallout with your boss or co-workers.

If the sabbatical bug has bitten, talk to your manager or human resources department; you may be pleasantly surprised at your options. How to take a break from work by Diana Swift in Canadian Living gives you tips for negotiating time off. She says pick your time, suggest how your workload will be handled in your absence, and tell your boss why you believe you are an asset worth keeping.

Should I Consider Taking a Teaching Sabbatical? Teacher Man asks on Young and Thrifty. His union contract allows him to take a year off at one-third pay after two years in the school division and one-half pay after five years of teaching. He concludes that if he completes his Masters degree during his time off and improves his future earning potential (he is only in his 20s), the investment in time and money could definitely be worthwhile.

Sabbatical Financial Planning 101: How to travel and not get into debt on Aspire Canada has lots of great ideas like: start planning early; continue contributing to your benefits if you can; sell stuff to raise money; draw up a budget; plan to stay with friends/relative where possible during your travels; and, pursue opportunities to work while you are abroad on your sabbatical.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Mar 16: Best from the blogosphere

 

By Sheryl Smolkin

After two weeks away in the sun at a resort with flakey WIFI, I have lots of catching up to do! However, I managed to download the replica edition of several newspapers every day, so I wasn’t completely out of touch.

I was particularly interested in a series of editorials in the Globe and Mail articulating the newspaper’s vision as to how the retirement savings system should be reformed. The editorial team views higher TFSA contributions as an unwarranted future drain on the economy and advocates increasing RRSP contribution limits instead.

They also support ramping up CPP and eliminating RRIF withdrawal rules. You can read the whole series by clicking on the links below.

Reforming Retirement (1): How the TFSA turned into Godzilla
Reforming Retirement (2): Getting Ottawa’s mitts off your RRIF
Reforming Retirement (3): More RRSP, not more TFSA, please
Reforming Retirement (4): Canada needs to ramp up CPP, ASAP

Cait Flanders who writes Blonde on a Budget is in the 8th month of a year-long shopping ban. She says she has never been happier and shares 3 truths she discovered about her minimalist lifestyle plus information about her next minimalist challenge for 2015.

On Money We Have, Barry Choi writes about 10 Signs You’re Living Beyond Your Means. Several of my favourites are: when you have zero savings; low monthly payments are your only option; and, you buy only name brands.

Banking on Your Mobile Phone by Tom Drake on Balance Junkie reminds us that there are smart phone apps for business finance, budgeting, bank accounts and mobile payments. Paypal and Google Wallet are probably the most popular mobile payment apps. Most banks also allow to you pay by mobile with their own apps as well.

And finally, on Canadian Dream: Free at 45 Tim Stobbs writes about how a job in customer service that he was overqualified for in 2002 was a valuable experience because he had great co-workers, the company promoted from within and it had a defined benefit pension plan.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Aug 18: Best from the blogosphere

By Sheryl Smolkin

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In this week’s Best from the blogosphere we revisit some of our old favourites who have appeared repeatedly in this space.

First of all, congratulations to Robb and Marie Engen who are pioneers in the world of personal finance blogging. This week they are Celebrating Four Years Of Boomer & Echo. Their articles have been featured in the Globe and Mail, MoneySense, the National Post, and MSN Money.  They’ve been interviewed and quoted in numerous online and print magazines, and recognized as one of the best personal finance blogs in Canada.  Robb also writes a bi-weekly column in the Toronto Star.

On retirehappy, Jim Yih crunches the numbers to find out if it makes good financial sense to Rent or own vacation property in Vernon, B.C. He concludes that the amount of $16,000/year it would cost to carry the property probably cannot be recouped by renting the unit for part of the year. He also decides that renting makes more sense because the property may not increase significantly in value over time.

Tim Stobbs keeps us up-to-date on his retirement journey on Canadian Dream: Free at 45. Therefore I was initially surprised when I saw I Hate Hard Work is the title of one of his recent blogs. But it makes more sense when he clarifies that he would rather work smart than work hard. That means even at the office he tends to focus most of his efforts on high impact items, so although he doesn’t work hard Tim says he is more effective than the majority of his co-workers.

“I just refuse to spend lots of time working on something when in fact if I focus on the core items I can get 80% of the work done with a mere 20% of my effort,” he says.

The Big Cajun Man, Allen Whitton reminds us that Lifestyle Creep is like “Feature Creep,” a term used in high tech development teams, where someone keeps trying to shove more and more into a release of software or hardware, thus slowing things down, and eventually making the whole thing unusable. In other words, if every time you get a raise or pay off a debt you use the money to buy a bigger house, a newer car or more consumer goods, your financial picture will never really improve.

And on Brighter Life, Kevin Press asks the perennial question, Why is financial literacy such a stubborn problem? He shares the following thoughts:

First, he thinks it’s a mistake to argue that personal finance is uniquely difficult to teach and learn. It is a complex and technical subject certainly, but so are dozens of others. We could just as easily be sweating about why so few Canadians understand how to take care of their cars.

Second, the complexity of the subject is not the issue. The problem is the way we are trying to teach it. Adult learning theory explains a number of things about how adults prefer to be taught new information.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Aug 4: Best from the blogosphere

By Sheryl Smolkin

185936832 blog

It’s hard to believe its August already and before we know it the kids will be back in school. But you know for sure summer is waning when it starts to get dark earlier and the temperatures begin dropping at night.

This week we feature a selection of interesting blogs from some of our favourite personal finance bloggers.

Tim Stobbs from Canadian Dream: Free at 45 has opted to work four days a week instead of five. In 10% Less Pay, But $8 Less on My Paycheque he tells us why at least for now, there has been hardly any impact on his take home pay.

Blonde on a budget’s Cait Flanders has undertaken a massive purge of her possessions starting with her bedroom closet as part of her commitment to a one year “shopping ban.” Find out what’s left and the few necessities she needs that will be exceptions to the rule.

Do you need a little extra money? Tom Drake says on Canadian Finance blog that you might already have it. He suggests Tracking your spending for one to three months. You might find that there are money leaks that are costing you big. Once you plug those up, you can essentially “find” more money in your budget.

In the  Weekend Reading: Banking Bonus Edition Dan Wesley at Our Big Fat Wallet highlights some deals at Tangerine, BMO, Canada Trust and RBC.

And finally, whether you are a new graduate looking for your first job or a seasoned professional looking for new opportunities, take a look at Ten steps to a productive information interview by Kevin Press at BrighterLife.ca.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

June 16: Best from the blogosphere

By Sheryl Smolkin

185936832 blog

This week we have a potpourri of blogs dealing with a variety of money-related topics topics you can read on these long late spring evenings.

On Brighter Life, Dave Dineen brings us up to date on his travels in Slow money: A richer way to travel in retirement. He says renting from a local, not a corporation and adopting a local lifestyle means he and his wife can afford weeks instead of days on a beautiful Italian island.

Retire Happy’s Jim Yih reminds couples getting married this summer that they need to talk about money. You or someone you know can certainly benefit from his list of things to talk about to help build the foundation for a better relationship.

We usually post Robb Engen’s blogs from Boomer & Echo but he also writes about lots of interesting issues on his blog Earn Save Grow. For example, he recently shared How an annoying pop up saved his business. By adding a “pop up” form allowing readers to sign up to receive updates from Boomer & Echo, he increased the number of subscribers from 250 to 1,600 in under six months.

Avoiding and paying off debt is a recurrent theme in all personal finance blogs. In Payday Loans: Think Twice Before Entering This Cycle of Debt Tom Drake reminds us that these high interest, short term loans can turn into serious long-term term debt, because the interest payable is astronomical. For example, the fees for payday loans are between $51 to $72 on a $300 loan, which works out to annual percentage rate of 443% to 626%!

And last but not least, Tim Stobbs finally bit the bullet and accepted a work cell phone because he is more offsite more frequently and he needs it to communicate with the office. However, he has devised A Leash for the Beast and turns it off outside of business hours. He also uses an app that separates his work and personal email.

I’m off to cottage until after Canada Day, so the next Best from the Blogosphere will appear on July 7th. Until then, throw another steak on the barbecue, pour yourself a tall cold one and don’t forget the sun screen and mosquito repellant.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

June 2: Best from the blogosphere

By Sheryl Smolkin

185936832 blog

Summer weather has finally arrived in my part of the world, so fingers crossed that it lasts longer than a weekend! It’s certainly more tempting to head outside than comb the internet for interesting personal finance advice, but I have still managed to pull together some good reads for you when you finally get tired of reading lighter fare poolside.

In We Who Are About To Die, Etc, ex-banker Sandi Martin reminds us that in every relationship there is one spouse who handles the finances and one who does not. Therefore it is important to have a disaster plan plus a comprehensive list of passwords, bank account details and other important financial information easily available to both partners in the event that the unthinkable happens.

Mark Goodfield, the Blunt Bean Counter warns that just because you read personal finance blogs and have become a Do It Yourself (DIY) investor doesn’t mean you should also be Do It Yourself Accountants and Lawyers. He highlights some tax and legal mistakes DIYs often make because they have read general articles that just skim the surface of complex issues.

Tim Stobbs turned 36 this month so on Canadian Retirement: Free at 45 he shares 36 Lessons on 36 Years. My top 10 favourites are:

  1. Spend less than you earn.
  2. When in doubt, start saving. You can figure out the rest while you go.
  3. Keep your regular monthly expenses low and spend money instead on one off items.
  4. Savings shouldn’t stop you from having a life, It should help you have one.
  5. Don’t worry what others think, be yourself and you will be happier.
  6. Even when you fail, you still learn something.
  7. Live in the now when you can.  Embrace the moment.
  8. Remember to tell others you love them.
  9. You need 10,000 hour of practice to be great at something.  So start now.
  10. You always need to like one part of your job, if not find a new one.

The frugal trader on Million Dollar Journey once again tackles the million dollar question: How Much Do You Need to Retire in Canada? He says figuring out how much you need is pretty much a four step process:

  1. Work out a budget of expected expenses during retirement.
  2. Calculate how much the government will provide you during your retirement years. You can use the Canadian government calculator here.
  3. The difference between 1 and 2 is how much income from savings (and/or company pension) that you will need.
  4. Take the number calculated in step 3, and multiply by 25.  That is the amount you will need to have saved.  If you have other sources of income, like from company pensions or rental properties, then reduce step 3 by the other income amounts, then multiply by 25.

And finally, Gail Vaz-Oxlade discusses setting ground rules for boomerang kids. She says they should make a financial contribution to the household if they have a job even if you eventually give them the amount back to by a house. Otherwise they will get used to having a disposable income they can never hope to have again. The exception is if they are putting every extra payment into re-paying their student loans.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

May 26: Best from the blogosphere

By Sheryl Smolkin

185936832 blog

Although it’s been a cold, wet spring the temperature is finally starting to inch up across the country. And with the end of the school year coming up fast, family vacations are top of mind for many people.

That’s why I thought readers might be interested in Tom Drake’s recent Canadian Finance Blog titled 10 Ways to Save Money on Your Vacation. Saving for your vacation in advance is great advice. Comparison shopping, a CAA membership and finding coupons online for local entertainment are other good suggestions.

Kristen Sarah from Hopscotch the Globe advises on How to Avoid Getting Sick During Your Travelling. She says avoid drinking the water and select restaurants that local people frequent. But if you want to enjoy your vacation, don’t be too paranoid!

In the Globe and Mail, Preet Bannerjee says before you hit the beach, it’s time to do a financial spring cleaning. Just like changing the winter tires, getting the flower beds in order, and scrubbing behind the appliances, it’s about getting your whole house in order. It may not be fun, but it needs to be done.

If your spring plans include a major home renovation, both your bank account and your marriage are in for a stressful time. On yummymummyclub Kat Inokai offers hints on How to Survive Months of Construction with Your Marriage Intact. This is one year when a stay-cation is probably not a good idea. If you can afford it, she says plan to get away from the mess for at least a few days.

And finally, after several months of trying the job as a manager on for size, Tim Stobbs realized he didn’t enjoy it. So he killed his career in management and he’s happy about it.  “It feels good to know for sure that I would be a round peg forced into a square hole.  I could do it but it would significantly uncomfortable,” he says.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere. Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.