By Sheryl Smolkin

In this space we typically provide links to interesting work by our favourite personal finance writers about topics ranging from money-saving tips to retirement savings to retirement lifestyle. But many of these prolific bloggers have also posted great videos on YouTube with helpful tips and tricks for people looking for ways to better manage their money.

So keeping in mind the old adage that “a picture can be worth a thousand words,” this week we identify a series of videos featuring pundits you already know well. While some of these videos are not new, they have stood the test of time.

Take a minute to watch at least a few of them, and let us know whether you would like to see more video content on savewithspp.com.

Sean Cooper is a pension administrator by day and a hard-working personal finance writer by night. Watch him burn the mortgage he paid off in 3 years and reveal his super saver secrets.

One of a kind blogs like How to get married for $239 by Kerry K. Taylor, aka Squawkfox have have been read by thousands of eager fans. In this video she discusses with the Globe and Mail’s Rob Carrick, How to stop wasting money.

In Life After Financial Independence as part of his Tea At Taxevity series, actuary Promod Sharma interviews author and former MoneySense editor Jonathan Chevreau about his post-retirement projects, including the Financial Independence Hub.

TV personality and personal finance guru Gail Vaz-Oxlade is interviewed on Toronto Speaks: Personal Finance about spending beyond your budget.

Studies suggest that 6 out of 10 Canadians do not have a retirement plan. Why is that number so high? Retire Happy’s Jim Yih shares a couple of theories about why it’s hard to plan for retirement.

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.

By Sheryl Smolkin

An interesting new study* by a University of Toronto team led by psychology professor Alison Chasteen reveals that how you feel about getting old can affect your sensory and cognitive functions.

The study published in the December issue of the American Psychological Association Journal was based on testing of 301 participants between ages 56 and 96. Researchers considered the interview subjects’ views on aging, how much they believe they can hear and remember plus their actual performance in both areas.

Standard hearing and recall tests were administered. For example, study participants saw a list of 15 words on a computer screen and heard a series of different words through headphones. Subsequently they were asked to write down as many words as they could remember. In addition, they completed a third test by listening to five words they were asked to recall after a five minute delay.

They were also asked to answer questions and react to phrases describing how they viewed their own ability to hear and remember. For example, participants were asked to agree or disagree with sentences like, “I am good at remembering names” or “I can easily have a conversation on the telephone.”

In addition they were asked to envisage 15 situations and rank how worried they are about each based on age. One example was to imagine they were involved in a car accident where it was unclear who was at fault and specify how concerned they were that they would be held responsible because they were elderly.

“Those who held negative views about getting older and believed they had challenges with their abilities to hear and remember things, also did poorly on the hearing and memory tests,” Chasteen said.

“That’s not to say all older adults who demonstrate poor capacities for hearing and memory have negative views of aging,” she continued. “It’s not that negative views on aging cause poor performance in some functions, but there is simply a strong correlation between the two when a negative view impacts an individual’s confidence in the ability to function.”

She noted that the perceptions older people have about their abilities to function and how they feel about aging must be considered when determining their cognitive and sensory health. She recommends educating older people about ways in which they can influence their aging experience, including providing them with training exercises to enhance their cognitive and physical performance, and dispelling stereotypes about aging.

“Knowing that changing how older adults feel about themselves could improve their abilities to hear and remember will enable the development of interventions to improve their quality of life,” she concludes.

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*This blog is based on materials provided by the University of Toronto.

By Sheryl Smolkin

Even on a vacation cruise in South America for the last several weeks it was difficult to avoid media reports about the plunging stock markets in both the U.S. and Canada and the drop in value of the Canadian dollar.

On the Financial Independence Hub, Ermos Erotocritou, a Regional Director with investors Group Financial Services Inc. reminds readers that it’s reasonable to monitor day-to-day events, but it’s imperative to keep in mind that daily, weekly, monthly, even quarterly market movements are often little more than noise for an investment portfolio that likely has a time horizon of many years. That’s why it’s so important to practice patience and discipline by remaining in the market, as opposed to abandoning it or believing that is the best way to preserve wealth.

Dan from Our Big Fat Wallet shares Lessons from a Financial Downturn from the perspective of an Alberta resident. First of all, he says “cash is king” because the more cash you have, the more flexibility it gives you. He also notes that with stock prices and housing prices falling in some areas, the emergency fund has suddenly taken on more importance. And finally, he acknowledges that investing is emotional but suggests that investors who are able to separate their emotions from investing have the potential to make impressive returns in a downturn.

In the Toronto Star, Gordon Pape also agrees that “cash is king” in times like these. He says it’s fine to be all-in when markets are positive, even if the growth isn’t robust. But in times of great uncertainty and high volatility such as we are currently experiencing, he likes to have some cash in reserve to cushion any stock losses and to deploy as buying opportunities appear.

It’s an economic downturn — not the Apocalypse, Alan Freeman reminds readers of iPolitics. He says, “This isn’t 2008, when we were facing the very real threat of the global financial system collapsing entirely. This is just an old-fashioned economic downturn — even if it will be quite painful for some in the short term.” Freeman comments that because Canadians depend on resources for a big chunk of our economic activity, we shouldn’t be surprised that we’re at the mercy of commodity prices. “Oil and metal prices that soar to unsustainable levels inevitably crash; they’ll recover this time around, as they have in the past, though perhaps not for a few years,” he concludes.

And finally, many people who do not have investments may be less worried about the stock market slide than the plummeting value of the Canadian dollar. In a Canadian Press article published in the National Post, Aleksandra Sagan reports that for every U.S. cent the dollar drops, food like fruits and vegetables that are imported will likely increase one percent or more in cost. While the increased costs have dealt a blow to everyone’s wallet, they have had a more pronounced effect on Canadians living on a tight budget or in remote regions, where fresh fruit and vegetables are more expensive than in more urban areas.

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.

By Sheryl Smolkin

If you are reading this, chances are you have heard about SPP or you are already a member. But even if you make regular contributions, you may have forgotten about some of the key features of the program that make it an excellent retirement savings program for all Canadians. 

Just for fun, we have put this quiz together to test your knowledge about SPP. Give it a try and see how much you really know. And forward it to friends and family members who may still not have heard about “Canada’s best kept secret.”

 

For a full list of contest rules and regulations click here.

By Sheryl Smolkin

While most (94%) Canadians aged 55 to 75 ‘agree’ that they would ‘like to have guaranteed income for life’ when they retire, a new Ipsos poll* conducted on behalf of RBC Insurance finds that just two in ten (22%) Canadians agree that ‘Canadian public pension plans (such as CPP/QPP/OAS) will provide enough retirement income’ for them. In fact, most (78%) disagree that these pension plans will suffice.

It’s no surprise then that six in ten ‘agree’ that they’re ‘worried about outliving their retirement savings’, while four in ten ‘disagree’ that they’re worried. Women (66%) are considerably more likely than men (50%) to be worried about outliving their savings, as are those aged 55 to 64 (62%) compared to those aged 65 to 75 (52%).

Atlantic Canadians (67%) are most worried about outliving their retirement savings, followed by those in Ontario (63%), Alberta (60%), Quebec (59%), Saskatchewan and Manitoba (58%) and finally British Columbia (41%).

One way of supplementing retirement income is through the use of an annuity, but many Canadians aged 55 to 75 appear in the dark about what an annuity is and how it might help them. In fact, six in ten say ‘that they ‘don’t know much about annuities’, while four in ten disagree that they lack knowledge in this area.

Women (71%) are significantly more likely than men (51%) to say they don’t know much about annuities, as are those aged 55 to 64 (66%) compared to those aged 65 to 75 (55%). Albertans (75%) are most likely to admit they don’t know much about annuities, followed by those living in Saskatchewan and Manitoba (71%).

Responses to this quiz also confirm that many Canadians lack fundamental knowledge about annuities. Just 55% of Canadians were able to answer more than half of the questions correctly, and only 6% got all six questions right. British Columbians (62%) were most likely to pass the test, followed by those in Quebec (57%), Ontario (54%), Atlantic Canada (53%), Alberta (52%) and finally Saskatchewan and Manitoba (49%).

• Just four in ten believe that it is true that they need a licensed insurance advisor to buy an annuity. In contrast, six in ten believe this is false – when in fact, it is true.
• Seven in ten correctly believe it’s true that there are potential tax savings to investing in annuities, while 29% incorrectly believe this to be false.
• Half incorrectly believe it’s true that annuities last for a specific period of time, while the other half believes this is false, which is the correct answer.
• Seven in ten correctly believe it’s true that annuities can provide guaranteed income for life, while three in ten incorrectly believe this to be false.
• Half think it’s true that annuities are not a good investment during low interest rate environments, while the other half correctly believes this to be false.
• Three quarters correctly believe it’s true that they can invest in an annuity using their RRSP and/or RRIF savings, while 27% incorrectly think this is false.

Despite the majority being uneasy about their retirement savings, just one in three agrees that they are exploring or considering annuities as part of their retirement plan, while most (65%) are not. One quarter say they have an annuity.

Members of the Saskatchewan Pension Plan can opt at retirement to receive an annuity payable for life. Life only, refund and joint survivor annuities are available.

*These are some of the findings of an Ipsos poll conducted between August 7 to 14, 2015 on behalf of RBC Insurance. For this survey, a sample of 1,000 Canadians aged 55 to 75 from Ipsos’ Canadian online panel was interviewed online.

By Sheryl Smolkin

Today I’m interviewing Bridget Eastgaard for savewithspp.com. Eastgaard blogs on “Money after Graduation,” her financial literacy website for college students and new graduates. She writes about paying off student debt, learning to budget, saving money, and investing for the future. 

She has a B.Sc. and an MBA in finance from the Haskayne School of Business at the University of Calgary. For the last year she’s been a product strategist at Uncommon Innovation. However, in late October she resigned to devote herself to creating new products she plans to sell on her website. Other projected future sources of revenue include speaking engagements and brand partnerships with financial institutions and service providers. 

Thank you for joining me today, Bridget.

Thank you for having me Sheryl.

Q: You live in Calgary, you just quit your full time job in the middle of a provincial economic downturn to devote yourself to developing a risky online business. What made you decide to take the jump?
A: It is pretty dismal here in Calgary right now and it feels a little crazy to take a risk like this, but in all honesty, switching to my own online business isn’t as risky as it looks at first glance. Watching my friends and family members being laid off from jobs – some of them after fifteen or twenty years – I think what’s really risky is relying on a single source of income where your employer can decide, “We don’t need you anymore,” and you’re gone.

Q: So tell me about your blog “Money after Graduation.” When did you start it and why?
A: I started it in 2011 because I graduated from my Bachelor of Science degree in 2010 and I owed almost $21,000 in student loan debt. At the time that was just an astronomical amount of money for me. I never earned more than $10,000 in a year so I couldn’t even fathom how I would pay off that debt. So I started the blog to really track repayments and keep me accountable. 

Q: What do you think are some of the most important lessons about money that young people coming out of school need to learn?
A: How much debt really holds you back. I think I didn’t realize when I borrowed for school and many people don’t realize when they borrow for school how much money that really is. When you’re taking out 20, 30, $40,000 in student loans, that’s 20, 30, $40,000 of your net future income. And I thought, “Oh, well if I just make $50,000 a year, if I make $60,000 a year it will be really easy to pay this off,” and of course I wasn’t accounting for things like taxes, and living expenses. So I think that’s just the general lack of understanding of how little money there really is when you have a lot of financial obligations in adulthood.

Q: How long did it actually take you to pay off that loan?
A: It was pretty fast actually. I was debt free within 22 months.

Q: Terrific. You write about earning more money, paying off debt, and investing to build wealth. How often do you blog and how many hits do you typically get?
A: Now I’m kind of on a pretty relaxed schedule, I’ve taken it down to about once per week. I’ve been crazy busy lately. I got married last month. On days when I post I’ll get as many as 3,000 hits per day, and on days when I don’t post the blog probably gets 2,000 visits a day.

Q: Tell me about some of your most popular blogs.
A: I wrote one that just went viral and it still remains the most popular post on the website. It’s called, “30 financial milestones you need to reach by age 30.” I wrote it at 11:30 one night because I just felt like I needed to get a post and I was in the middle of my MBA and it took off like crazy – totally unexpected – but it’s just a list of financial milestones that you should have in order by the time you turn 30.

Q: What were some of the milestones on the list?
A: Be debt free, check your credit score regularly, start an investing portfolio. Some were really general, some were more specific like I suggested you should save at least $25,000 for retirement by age 30, so it’s a mix of big and small goals.

Q: I see you’ve just completed a 90-day shopping ban. Why did you embark on this project and how has it changed your perspectives about money?
A: So that was actually inspired by my friend Cait Flanders who is the blogger behind BlondeonaBudget.com and she did a one-year shopping ban I was so taken by how much this really changed her – changed her perspective, changed her behavior – it really had a profound effect on her. 

I had done like one month shopping bans in the past and I thought, “Well I’ll try three months this time.” I knew I couldn’t do a year. Part of it is also because I had been planning to leave my job and it’s easier to do that when you have some extra money in the bank. 

And it was also to teach myself to live on a reduced income; because I am pursuing my own online business now, I’m expecting my income will probably go down for the next three to four months.

So it was kind of a test run to teach me how to live with less. It actually had a much bigger impact on me than I expected because I really found that after the first two weeks it was just very easy to live with less and I really don’t need to buy as much as I typically do.

Q: So you have several courses on your website already. The Debt Crusher course is free. Tell me a little bit about it.
A: It’s an eight-module program that I created just to help young people get out of debt. I start with setting a budget, determining your loan repayment, negotiating with your creditors, and actually walk through all the steps that you need to take to pay off your debt. It works if you have a small balance of $5,000 or it works if you have a huge balance of $50,000. I just wanted to create a really solid financial plan for young people who are struggling under the weight of student or consumer debt, so they could have help and a method to get to debt-free.

Q: How has it been received? Have you had a lot of downloads?
A: Oh yes. I think are almost 500 by now. It’s been very popular.

Q: Your “Master Class Money” course is priced at $379 and has twelve modules. What are the goals of the course and how is it structured?
A: That course is the resource I wish I had had when I started investing in the stock market when I was 25 years old. We’re lucky because it has been kind of a bull run for the past almost seven years so I didn’t lose anything, but I didn’t have a strategy. 

There weren’t a lot of resources for young people who want to learn how to invest in the stock market and there are still not a lot of resources for just your average retail investor. It’s really up to the professionals to decide how your money is invested, but a lot of people do want to manage this alone and it is something, I think, everyone should learn and should do. 

So I created the course using my MBA in finance. It really walks the average retail investor through everything from the basics like “What is a stock? What is a bond?” to creating a portfolio based on your investment goals and risk tolerance and it even goes into some more advanced technical analysis. It’s basically a comprehensive resource that gives you the tools you need to start investing in the stock market.

Q: Is it geared only to young people or can people of all ages benefit from the course.
A: Everyone can benefit. I design it primarily for people in their 20s and 30s because they have the longest term investment horizon, but it’s the perfect resource for all ages. 

Q: So how you do market the course and are you pleased with the response to date? Are you on target for projected sales?
A: I haven’t done really aggressive marketing with the course. I’m lucky that I’ve established a presence online over the past almost five years and I have a pretty strong e:mail list so, thus far, I’ve really only pushed it out to my e:mail list and my regular readers. The response to it, honestly, has been so amazing. It was more than I expected. It really what has inspired me to quit my job and go do this full-time.

Q: What other courses do you have on the drawing board?
A: I have a few in mind, but they’re not set in stone yet. I definitely want to develop some resources for people negotiating their salary in their careers because that’s definitely something I feel really passionate about and it’s something that people just don’t know how to do and it’s really scary. I have some other kind of financial boot camp tool kit in the works that I’m developing as well.

Q: What’s your goal in terms of time for generating revenue for your new business comparable to your last full time position?
A: I haven’t thought seriously about that yet. I mean, I’d like to be back to my full-time income within six months and I essentially would love to double my original income with a year. That might be an ambitious goal, but I’m optimistic that if I hustle and work hard it can happen.

Q: What advice do you have for people who want to take control of their own employment and start a business but think they can’t afford to take the leap?
A: Just be sure that taking the leap is not hugely detrimental to your finances. I would never suggest anyone leave their job without a plan. Start your business, make sure it’s generating a little bit of revenue, create a big savings cushion, learn to live on less, and then when you take the leap it’s not going to be as big of a risk.

Q: And where does saving for retirement and a home and all that stuff fall into this business plan?
A: I just set up a fixed amount of savings every month and it’s really important to me to always meet those savings goals regardless of where my income is coming from. You never want to sacrifice your savings to take a risk. I feel that if you set your goals and then you stick to a regular payment plan, it doesn’t really matter where your income is coming from as long as it’s going to the right places.

Q: So are you saving in an RRSP or a TFSA or both?
A: I do both. So I have TSFAs and RRSPs and I’m trying to max out the RRSP but that just seems like a really hard journey when you’re in your 20s.

Q: Thank you very, very much for talking to me today Bridget.
A: Thanks Sheryl.

—
This is an edited transcript of an interview conducted in September 2015.

By Sheryl Smolkin

As the old year draws to a close, many people resolve to reduce stress by getting more sleep, working out more often and eating a healthy diet. But for others, the financial pressure of taking from Peter to pay Paul is what keeps them awake at night.

If they could only find ways to get their finances under control and be sure that their family is properly protected, their anxiety level would plummet. If you fall into that category, here are some resolutions you can make to improve your finances, free up cash to save for longer term goals like retirement and give your family more financial security.

1. Write it down: At the end of a month, do you have any idea where your money went? If you tap your credit or debit card each time you buy a cup of coffee, fork over $20 for every baby shower at the office and bring home take-out three days a week because you are too tired to cook, it’s not surprising that your bank account is running on empty half way through the month. Make a note in your phone or on a spreadsheet of every dollar you spend for a month and you will be able to identify money wasted that could be saved instead.
2. Use cash: It may sound old-fashioned, but if you withdraw a set amount of cash each week to cover transit, lunches, coffee, dry cleaning and other miscellaneous expenses, you will spend much less than if you use your debit card or your credit card to pay for every small expenditure.
3. Avoid credit card debt: Credit cards are a wonderful convenience if you pay them off every month and don’t have to pay interest charges. However, if you do accumulate credit card debt you could be paying as high as 20% or more on your outstanding balance which compounds every month. Furthermore, if you do not make minimum payments on the due date, you may lose your “grace period” and interest will begin to mount from the date of purchase of each item.
4. Pay off high interest debt: If you owe money, resolve to pay off high interest debt as soon as possible. In some cases you may be able to borrow money on a lower interest line of credit to pay down higher interest credit card bills. You may also be able negotiate with creditors to accept a fixed amount each month. If you are stressed because of your debts, struggling to make your minimum payments, and need a plan to get your finances back on track, the Saskatchewan Credit Counselling Society provides free, confidential debt solution services.
5. Pay yourself first: Waiting until the end of the month to direct money into savings is not a productive strategy as by then, the cupboard is typically bare. Decide on the amount you want to add to SPP, your RRSP, TFSA or unregistered savings every month and have the funds automatically transferred. After a few months you won’t even notice the difference.
6. Re-think your needs: Do you still have one or more landlines although every member of your family has a cell phone? Do you really need cable TV when all you have been watching is Netflix? Are two cars a necessity or a luxury if you are on a convenient public transit line? Will the party be more fun if you buy a new dress you may never wear again? There are loads of ways to cut corners without significantly compromising your quality of life.
7. Review your insurance: Is your family protected in the event of the death of you or your spouse or both? Your workplace benefits may include some life, disability and health insurance, but is it enough? Understand your employee benefits and augment them where required. Critical illness insurance can provide peace of mind if you succumb to a listed condition and suddenly have unexpected bills.
8. Talk to your partner: If you have a partner or a spouse, talk regularly about your finances. Make sure you both have access to each other’s computer passwords and any bank or investment accounts that are not joint. If you think managing your finances now is a problem, imagine if only one of you is left behind to provide for the family with no understanding of family finances and where important documents are kept.
9. Teach your kids: None of us were born understanding the value of a dollar or knowing how to manage money. Children learn from their parents. Give them an allowance or pay them for doing chores above and beyond their day-to-day responsibilities. Establish what they are responsible for paying for out of their own money. Don’t be afraid to say, “It’s too expensive,” or “We can’t afford that.” As your children get older and get part-time jobs, require that they save a portion of everything they earn towards their post-secondary education. Encourage them to donate time and money to the charity of their choice.
10. Make a will: Having an up-to-date will is essential to ensuring your estate is distributed as you intend it, and that your death doesn’t create a legal and administrative burden to your family. If you die without a will, a court will appoint someone to administer your estate and distribute the assets according to a formula set out in provincial estate and family laws.

Also see: Financial New Year’s resolutions

By Sheryl Smolkin

This is the last Best from the Blogosphere for 2015 and I’m taking a break, so the next one will be published on January 25, 2016. We wish all savewithspp.com readers a healthy, prosperous New Year.

As we look back on 2015 and ahead to 2016, there is much to think about. We have a new Federal government, the loonie is at an all-time low and Canadians have extended extraordinary hospitality to Syrians and other refugees from war-torn lands.

Here are some interesting stories we are following:

In TFSA vs. RRSP: How are Canadians saving? I interviewed Krystal Yee (Gen X), Tom Drake (Gen Y) and Bonnie Flatt (Boomer) to find out how Canadians are taking advantage of the tax-sheltered savings vehicles available to them.

In What Sean Cooper Really Achieved By Paying Off His Mortgage In 3 Years Robb Engen from Boomer and Echo tells us that Sean Cooper didn’t just pay off his $255,000 mortgage in three years; he taught us all a lesson in personal branding. Mr. Cooper, a pension analyst by day, mild-mannered blogger by night, took an almost Machiavellian-like approach by achieving fame through mortgage freedom at age 30.

Jim Yee offers some Year End Finance Strategies that will take advantage of ongoing changes to our tax rules. For example, in 2016, the new Liberal government will be lowering the tax rate on the middle income bracket from 22% to 20.5% so those individuals making more than $45,283/year but less than $90,563/year, deferring income to next year might save some tax dollars.

On the Financial Independence Hub, Doug Dahmer writes about the timing of CPP benefits. He says the CPP benefit for a couple can be in excess of $700,000 over their lifetime and the study demonstrates that the difference between starting your benefit at the least beneficial date and starting at the best date can be more than $300,000.

And finally, Rob Carrick at the Globe and Mail offers some thoughts on how to prepare for a frugal retirement. Frugality is assumed to be a virtue in the world of personal finance writing, but on the outside, frugality is sometimes a synonym for cheap. He refers to a blogger on Frugalwoods who argues that making the choice to be frugal is about asserting your independent thinking about money.

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.

By Sheryl Smolkin

The Financial and Consumer Affairs Authority (FCAA) is warning Saskatchewan seniors to be aware of investment fraud scams. Roughly 30% of investment fraud claims received by the FCAA’s Securities Enforcement Branch come from seniors. And this number could be significantly higher as much of the investment fraud perpetrated against seniors goes unreported because they feel embarrassed, or are afraid they’ll be judged incapable of handling their own finances.

“They typically have pension plans, RRSPs, TFSAs and home equity so seniors make very appealing targets for fraudsters,” says FCAA Communications Consultant Matthew Barton. “The two big things they always tell seniors is ‘we want you to have enough money for a comfortable retirement’ and ‘You would like to leave a legacy for your children and grandchildren.’”

For example, in May 2014 Ronald Jerry Fast received a seven year sentence in one of the largest fraud schemes in Saskatchewan history.

He and his daughter Danielle Fast-Carlson ran a Ponzi scheme that defrauded approximately 250 investors of nearly $17 million. Most of the victims were elderly people from Fast’s hometown of Saskatoon.

He used money from previous investors in his Marathon Leasing Company to pay off new ones, creating the impression that he was able to deliver higher-than-normal returns to people who put their money into his business.

In another notable case, North Battleford financial advisor Adele Kaminsky entered a guilty plea in January 2015 in a wide-ranging case of investment fraud case. She sold investments in a company called Enviro-Can Private Placement through her company AK Financial Planning Services. Subsequently, she moved more than $500,000 to her personal bank account.

Here are some investment scams the FCAA says that people of all ages should know about and avoid:

Affinity Fraud: Con artists sometimes establish credibility by associating with an affinity group (like churches, sports organizations, or social clubs). They’ll spend some time getting to know the members of the group, and then they’ll ask if anyone’s interested in investing. They’ll also often tell you to keep the deal “hush-hush”, because it’s such a great opportunity. What that usually means is it’s a great opportunity for the con artist, not so great for the victims.

Ponzi Scheme: Ponzi schemes are also known as a “pyramid scheme,” because the people who invest first are at the top of the “pyramid.” They make their money by recruiting more investors to the scheme. These new investors pay fees, which go to the people who invested in the scheme before them. The people, who join the scheme later on (and make up the bottom of the “pyramid”), usually lose out when the scheme runs out of new investors.

Boiler Room Scams: These scams involve individuals claiming to represent a brokerage house and using high-pressure sales tactics, often offering investors an exceptional deal on stock. They’re called “boiler room scams” because the “salespeople” who call to offer you a “once in a lifetime deal” are usually calling from a room, called a “boiler room”, filled with other con artists on the phone doing exactly the same thing. The “brokerage house” typically owns most – or all – of the stock, which it actively promotes to drive the price up. Once the firm has sold its holdings, it stops promoting the stock. The price of the stock falls, and you lose your money.

RRSP Scams: These scams are often promoted in newspaper ads for RRSP “loans” that let you take advantage of a “loophole” in the tax laws to access your locked-in RRSP funds. In reality, the promoter encourages you use your RRSP holdings to purchase stock in a start-up company. In return he or she “promises” to loan you 60-70% of the value of the investment. The stock is often worthless. You can typically expect to get no funds from the promised loan and you may end up paying tax on the money you withdrew from your RRSP, even though you don’t have it.

Nigerian Letter Fraud: These letters have appeared in various forms through the mail or via e-mail since the late 1970s. They appear to be from a government official or higher-up who claims to have access to millions of dollars and needs help getting the money out of the country. All they need is for some kind soul to hold the money in your bank account. The sender of the letter will ask for your banking information and offer to give you a percentage of the proceeds in return for your “help”. Watch out! Once they have your banking information, they’ll empty your account.

“We encourage people even if they’ve called the police to also call the FCAA if they to report suspected fraud especially when it comes to securities, because we can open the investigation and we have tools and resources to help them out,” Barton says.

For more information on investment fraud, visit www.fcaa.gov.sk.ca/investmentfraud/

By Sheryl Smolkin

Recently Rob Carrick at the Globe and Mail wrote Prepare for the worst and make 2016 the year of the emergency fund. According to Carrick, the emergency fund is how you survive a financial setback without raiding your retirement savings, adding to your line of credit debt or borrowing from relatives. “Think of an emergency fund as insurance against a short-term setback that affects your long-term financial goals,” Carrick says.

20 Reasons Why You Need am Emergency Fund by Trent Hamm on thesimpledollar.com lists all of the obvious reasons (job loss, illness, urgent medical expenses) why you may need to tap into an emergency fund plus a few you never thought of. Some more obscure examples are:

• Your identity is stolen, locking you out of your credit cards and/or bank account for a while until the issue gets straightened out.
• An unexpected professional change forces you to relocate quickly.
• A relative or friend of yours passes away suddenly in another part of the country (or the world).
• You discover your partner is cheating on you, and for your own safety and peace of mind you have to pack your bags quickly and go.

How much do you need to save in your emergency fund? Typically financial experts suggest three to six months of fixed (as opposed to completely discretionary expenses). Emergency fund calculators from RBC and moneyunder30.com can help you figure out how much you should set aside.

Jason Heath at MoneySense is not a big fan of emergency funds if that means a substantial amount of cash sitting in a bank account doing nothing. He says, “I’m all for having the potential to cover 6 months of expenses in the event of an emergency. But I’d rather someone be able to do so through a combination of modest savings and ideally, a low-interest rate debt facility like a secured line of credit.”

Gail Vax-Oxlade believes the TFSA is a perfect place to stash your emergency fund. She says, “The best thing about the TFSA is its flexibility. You can take money out of your TFSA at any time for any purpose, without losing the contribution room, which makes this account the number one choice for socking away an emergency fund. So even if you take money out in one year, you can put it back the next, without affecting that year’s contribution limit ($5,500 for 2016).”

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