http://www.you-first.com/blog/ en odette@you-first.com Copyright 2010 2010-09-07T18:41:37-08:00 http://www.you-first.com/blog/make-sure-to-apply-for-cpp-right-away-at-retirement/ http://www.you-first.com/blog/make-sure-to-apply-for-cpp-right-away-at-retirement/#When:17:41:37Z This is an unbelievable story of the son of a retiree who finds out his dad is not getting CPP. The poor man will only be able to get back 11 months worth of CPP payments instead of the $65,000 he should have received.  Click here for the Vancovuer Sun story 2010-09-07T17:41:37-08:00 http://www.you-first.com/blog/is-the-housing-market-headed-for-market-correction-retirees-in-need-of-cash/ http://www.you-first.com/blog/is-the-housing-market-headed-for-market-correction-retirees-in-need-of-cash/#When:14:11:08Z If you are planning to use the equity in your home to access the money you need to produce income at retirement, now may be the time to downsize or at least secure a home equity line of credit. The following article shows historical data for all major cities as well as three potential scenarios of what may be coming. On top of the article, you will find tabs to click on to view more information. Click here for Globe&Mail article Financial Planning 2010-08-31T14:11:08-08:00 http://www.you-first.com/blog/retired-house-rich-cash-poor/ http://www.you-first.com/blog/retired-house-rich-cash-poor/#When:17:32:25Z Retirement can sneak up on you and come faster than you had time to prepare for.  You worked hard all your life and found it challenging to save.  Life is expensive, the mortgage took a long time to pay down and the cost of providing for children and putting them through post-secondary education was high.  Age 60 or 65 comes around fast and now what?  You find out that the savings you have may not provide enough for the lifestyle you desire or are accustomed to.  What are your alternatives?  Will you be required to continue working for several more years or will you take part-time employment throughout retirement? Will you need to downsize your home or relocate? You may have heard about reverse mortgages but you are not sure if this is a good idea. I see a lot of these cases in my practice.  This financial uncertainty will be the reality for many Canadians without a proper pension plan or who were not disciplined enough to save early and enough. Evaluating your options will be a challenging task requiring the help of a professional. If your savings are really too low you may have to do a combination of some of the above-mentioned options. Fortunately, if you have a home in one of the major Canadian cities, you will likely have built up significant home equity.  Downsizing is often the ideal quick fix.  It will not only provide the capital needed to generate income but will also reduce your costs.  A reverse mortgage is rarely a good idea especially in the early years of retirement. It is inflexible and costly.  The future capital appreciation is partially lost for your estate. If used responsibly, a Home Equity Line of Credit may be a better idea especially if the income short fall is low.  If your needs are for a few thousand dollars a year for travelling for example and the interest rates are low, it will likely be ok for you to draw from your home equity.  There are lines of credit nowadays which combine your chequing accounts with your home equity, allowing you to borrow only what you need when you need it and immediately see the outstanding balance decreased with each income flow.  The interest costs are calculated daily saving you interest charges.  There is no “one size fits all”. Each case is different and requires careful calculations, conservative assumptions and periodic monitoring. Careful planning is essential for you to enjoy a comfortable and stress free retirement.  Consider your options and let us help you in making the best decisions for the best chapter of your life! Here is an article on the subject of Reverse Mortgages versus A Home Equity Line of Credit Click for the article here 2010-08-19T17:32:25-08:00 http://www.you-first.com/blog/how-long-should-a-parent-be-financially-responsible-for-their-chiildren/ http://www.you-first.com/blog/how-long-should-a-parent-be-financially-responsible-for-their-chiildren/#When:17:00:12Z What is it with 20s something? They move back in with their parents. They delay beginning careers. Why are so many young people taking so long to grow up? How long should the parents be responsible? Shouldn’t teaching kids to be responsible and independent really loving them? Click here for the New York Times article 2010-08-19T17:00:12-08:00 http://www.you-first.com/blog/outlook-on-emerging-markets/ http://www.you-first.com/blog/outlook-on-emerging-markets/#When:19:38:47Z Mark Mobius is a well-known emerging market portfolio manager at Franklin Templeton Investments.  In a recent Time Magazine article, he offers his outlook on Asia, Russia, Eastern Europe and Africa. Click here to read the article Investments, The Markets 2010-07-30T19:38:47-08:00 http://www.you-first.com/blog/are-you-really-self-employed/ http://www.you-first.com/blog/are-you-really-self-employed/#When:21:34:44Z If it walks like an employee and it quacks like an employee then it is probably an employee.  That is what the judge ruled in this case. Full article here My feeling is that we are soon going to hear that Canada Revenue is cracking down on employees who are masquerading as independant contractors.  One of the factors that the judge considered in this case was the “potential for profit”; an independant contractor has an unlimited potential for profit (in theory, anyway) whereas an employee is limited to his/her hourly wage. There will be great wailing and gnashing of teeth when Canada Revenue starts to crack down on this. Tax Planning 2010-07-28T21:34:44-08:00 http://www.you-first.com/blog/post-bp-world-are-equity-markets-overvalued/ http://www.you-first.com/blog/post-bp-world-are-equity-markets-overvalued/#When:22:30:53Z Here is one video and one audio which I thought you would be interested in.  THE OIL INDUSTRY IN A POST-BP WORLD Fred Sturm, Chief Investment Strategist, talks to Dan Richards about the implications of the Gulf oil spill, as well as the winners and losers coming out of the oil industry. Watch it here ARE EQUITIES TODAY OVERVALUED, UNDERVALUED, OR PRICED ABOUT RIGHT? Jeremy Siegel, author of the bestseller Stocks for the Long Run, talks about today’s equity market valuations Listen here 2010-07-20T22:30:53-08:00 http://www.you-first.com/blog/the-perspective-of-travel/ http://www.you-first.com/blog/the-perspective-of-travel/#When:15:56:51Z A great advantage of travelling is that you get to see things from a different perspective. Odette and I just returned from a trip to Greece. Before leaving I admit to some apprehension as North American media focused on Greece’s economic uncertainty and our television screens provided multitudes of images of Greek strikers, rioters and all around economic and social upheaval. This is what we see on our television screens. These are sensational images and probably make for “good television”. Looking at this one might conclude that nobody would want to invest in Greece in such chaotic times. What we don’t see on our TVs is the less sensational but profoundly more important news.  For example, Cosco the giant “China Ocean Shipping Company” has recently signed a 3.5 Billion Euro deal for a 35 year concession giving the company control of part of Athens main port of Piraeus.  The company’s chief executive, Wei Jiafu, declares that Cosco has plans to turn Piraeus into the “greatest container hub in the eastern Mediterranean.” Thus far he said he was very happy with his company’s investment in the Piraeus terminals, noting that the first four months of this year had seen an increase of 43 percent in container traffic compared to the same period last year.  As well, in June of this year, less than 24 hours after Moody’s slashed Greece’s sovereign rating to “junk” status, the Chinese vice premier Zhang Dejiang was in Athens to sign 14 commercial agreements.  Premier Dejiang said that Beijing wants to stand by Greece in its moment of crisis. “The government is going to encourage Chinese entrepreneurs to come to Greece to make partnerships and investments,” “We are convinced that the Greek government is capable of overcoming the crisis and returning to stable growth.” So remember what we see on TV in the evenings is only one slice of the real events and probably the most sensationalized one. Investments, The Markets 2010-07-13T15:56:51-08:00 http://www.you-first.com/blog/hst-begins-tomorrow/ http://www.you-first.com/blog/hst-begins-tomorrow/#When:20:24:27Z As most of you know, the HST will take effect starting tomorrow (July 1st, 2010) in BC and Ontario.  The HST will replace the 8% provincial sales tax and 5% GST with a 13% HST in Ontario. and 12% in British Columbia.  HST will affect the prices of various goods and services in each province (even mutual fund fees are impacted).  Here are few links on the matter: National Post summary of HST changes: Comprehensive list of all affected goods and services by the Vancouver Sun Here is a summary of the changes compiled by Dynamic Funds: Mutual Fund Fees Management fees and operating expenses associated with investment funds will be subject to HST.  As an example, a hypothethical fund with a management expense ratio (MER) of 2.31, a typical MER for a Canadian Equity Fund, will have a revised MER of 2.44.  This results in a MER increase of 0.13 percentage points.  Impact on Purchases Those items that have no sales tax on them, such as basic groceries, municipal transit and prescription drugs, will continue to be purchased tax-free. Other products will be eligible for a point-of-sale rebate for the provincial part of the HST. This means you will only pay the 5% federal portion of the HST (equivalent to the current GST). These include print newspapers, books, diapers, children’s clothing and footwear, children’s car seats and booster seats, feminine hygiene products and diapers. Around the House Many household expenses that currently are not subject to the PST will be included under the HST. These include: basic cable TV, local residential phone, landscaping, lawn care, private snow removal, home renovations, and home service calls by an electrician, plumber or carpenter. In addition, for new construction home purchases, the government of British Columbia will offer a rebate of 71.43% of the provincial portion of the proposed HST on the first $525,000 of the purchase price. This will provide a rebate of up to $26,250 for new homes across all price ranges. Resale homes are not affected. You will also have to pay HST on real estate commissions. Home insurance and mortgage interest costs remain tax-free. Travel HST will now be charged on taxi trips, hotel rooms and any domestic air, rail and bus travel originating in British Columbia, effectively making many vacations 7% more expensive. Sports and Health Beginning July 1st, you will be charged HST on gym and athletic memberships, green fees for golf, sports and fi tness lessons (ballet, karate, hockey, soccer, etc.), as well as hockey rink and hall rentals.  Massage therapy and fitness training are also subject to the HST. Professional services Accounting, veterinarian and esthetic services currently subject to just the GST, will be HST-taxable on July 1st. Funeral services will likewise be charging HST. These can present considerable additional expenses. Tax Relief Many British Columbians will be receiving supplemental taxfree payments from the BC government in order to help the transition to the HST: * Individuals with incomes up to $20,000 will receive a $230 HST credit. * Families with incomes up to $25,000 will receive a $230 HST credit per family member. Source: Dynamic Funds, British Columbia’s New HST: What does it mean for your personal finances? Client services, Financial Planning 2010-06-30T20:24:27-08:00 http://www.you-first.com/blog/bullish-on-us-bearish-on-china/ http://www.you-first.com/blog/bullish-on-us-bearish-on-china/#When:20:36:59Z These are the thoughts expressed by fund manager David Fingold in a Financial Post article last week.  Fingold manages the Dynamic Global Discovery Fund, a value-style global fund with 1 year, 3 year, and 5 year returns all in the top quartile amongst its peers (article contains detailed return figures). David currently has no direct exposure to China.  In the short-term, he is concerned over Chinese exports to Europe since the Euro has recently dropped against the Chinese Renminbi.  22% of Chinese exports go to Europe.  However, he does points out that that the CPI in China has fallen recently.  Lower inflation would put the Chinese government in a position to stimulate the economy down the road.  In the long-term, he believes that many people will be surprised by where the growth is.  He points to the stronger demographics in the U.S compared to China as a good reason to stay invested in the U.S. For the full article, click here. 2010-06-17T20:36:59-08:00