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One of the biggest retirement questions and potentially one of the most frequently asked retirement questions is “How much is enough”?  The answer to this question is of course “it depends” but at least there is a new edition of Diane McCurdy’s book to help you out.

In How Much Is Enough? financial educator, speaker, certified financial planner and author, Diane McCurdy helps readers figure out their “Enough” retirement number.

Today’s blogpost will provide you with an overview of Diane’s book and your chance to win a free copy.  I want to thank my supporters at Wiley for this book and of course, Diane for the support of my blog.

 

“If you’re going to be successful, it won’t be because everybody else thinks you are; it’ll be because you’ve set your own goals and taken real, practical steps to make them happen.” – Diane McCurdy

Diane sets the tone for the rest of the book early on, stating our attitudes about money are critical for financial success.  She’s probably right.  My friend Preet Banerjee often remarks money management and successful investing is “…about 90% psychology and about 8% math.”  The other 2% really doesn’t matter because it’s our mindset about money that is so critical to success.  It seems like Diane and Preet are on the same page.  How Much Is Enough? is broken down into two main parts:  What Is Enough? and Getting Enough.

Part One:  What Is Enough?

Continuing the psychology of money theme, Diane states “money is an emotional subject.”  “People have deep-rooted attitudes about money, and their own attitudes have to be taken into account if any financial program is going to work for them.”  Part one explores the four common money attitudes Diane sees in her work with clients.  In the book, you can take Diane’s quiz and find out what your profile is.

Chapter 2 helps you discover where the money goes, if you don’t know already, allowing you to complete some expense worksheets along the way.

Chapter 3 pushes you to determine what you really want.  How much is enough and enough for what?  Diane encourages you to write down “a wish list of things you want to acquire” and then capture a list of “personal, career, financial and relationship goals.  Throughout the year, these two lists will remind you what you’re after and motivate you to get it.”  Wish list favourites can include:

• Your children’s education
• An early retirement
• Renovations
• Moving to a new home
• Taking a vacation
• New household toys
• A new car

Chapter 4 is more tangible than other parts of this book, providing some number crunching examples to determine what could be your “enough” number.  One thing that was nice to read in this chapter was Diane’s conservative estimates for rates of return on investments, recommending 2% annual inflation and 4% annual return for calculations.

Part Two:  Getting Enough

“There are no rules for getting rich quick.  There are, however, rules for getting rich slowly.” – Diane McCurdy

In Chapter 5, Diane encourages you to separate needs from wants, mentioning the “B” word a number of times (budgeting).  To get rich slowly, she suggests you focus on debt before savings and “pay off your highest-interest debts first, then move to the next highest” as soon as you can.

Chapter 6 provides some guidelines for finding a financial advisor, which is not surprising to find in this book, and outlines some decent questions to ask in your quest.

Chapter 7 looks at where you can invest, to make your money grow.  Diane didn’t slam dividend-paying stocks but I disagreed with her when she recommended mutual funds for an investment option; I feel the majority of these products are poor investment choices because of their high fees over other available products.

Chapter 8 is all about registered plans, namely RRSPs, RESPs and TFSAs, and how best to use them.  Diane is also a fan of savings and investments outside these registered plans for many clients.

Chapter 9 looks at financial ages and stages.  For 20- and early 30-somethings, Diane recommends starting a lifetime savings habit; advocating saving 10% of your income every year.  For ages 35-50, Diane suggests you invest in RRSPs, start some non-registered investments, plan for the worst; get an emergency fund and pay down that mortgage.  For ages 50+, clear up your debt and start some aggressive savings if you haven’t already done so – the time is now to get your retirement act together.

Chapter 10 includes some family finance topics, mainly how to have open and frank conversations with your children about money.

Chapter 11 tackles the emotional side of retirement and how you can prepare yourself and your family for this life stage.  Regarding your portfolio, she provides her stance on the RRIF versus annuity debate.

Chapter 12 is about estate planning and includes some strong points about having a will.

Lastly, Chapter 13 summarizes what you should have learned in the book, stating this book was “designed to motivate you by working with your individual needs and desires.”  “If you go off track occasionally, don’t beat yourself up.  Just get back in there and keep at it.”

How Much Is Enough? is a light-hearted look at some basic financial principles that should make many Canadians more comfortable with their financial plan.  In cases where some Canadians don’t have a financial plan, this book will provide some incentive to get one making sure you worry less about finances in retirement than you do today.

Now, it’s your turn to win a free copy of this book.  Enter the draw below and I will select a winner at random.  Yup, it’s that simple.

I hope you enjoyed this blogpost and I look forward to your comments about it here or via social media.   Take some time to Like My Own Advisor, follow me on Twitter @myownadvisor or subscribe via email if you haven’t already done so.

Good luck!

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“Almost every self-help book we have ever forced ourselves to read has been terribly dry and boring.  We did our best to ensure that More Money for Beer and Textbooks didn’t turn out that way.”

-Kyle Prevost and Justin Bouchard, co-authors, More Money for Beer and Textbooks.

You’re right guys, it didn’t happen.  Well done Kyle and Justin.

More Money for Beer and Textbooks – A Financial Guide for Today’s Canadian Student is an entertaining and well-written manual that gives Canadian students some realistic, honest ways to keep more cash in their pockets as they plan their way towards or work their way through post-secondary education.  Today’s blogpost will provide you with an overview of this book and also give you a chance to win your FREE copy.

What to expect?

This book won’t tell you every great beer out there (and there are bunch, trust me) but it will help students better manage their limited finances.  Here are a few of the great chapters you’ll read about in this book.

Chapter 1 – How Much Will School Cost…and Is It Even Worth It?

To answer the question, it is worth it but it costs a bunch (up to $80,000 for a four-year degree if you want to live away from home, in residence and use a meal plan).  Those costs could be much less if you choose to follow some of the advice by Kyle and Justin in this book.

Chapter 4 – Party Like A Rockstar Student

“If we had taken the money that we “invested” in our favourites brews on campus and had put it in an RRSP, it probably would be about $150,000 by the time we were sixty-five.”

Kyle and Justin, you’re not alone.  For those that haven’t been there and done that like the authors of this book (and myself for that matter) they offer some sound advice without spoiling the post-secondary fun that can come along with the academics:

• Partying like a student means figuring out a balance that works for you.
• Partying hard doesn’t have to mean partying expensive.
• Skipping classes is flushing money down the toilet.
• You need to give your body and your bank account the odd day to recover.

Chapter 5 – Gotta Get Away (Student Travel)

If you just have to get away for Spring Break, the co-authors offer some tips:

• Consider being less picky about where you want to go; consider new destinations.
• Look at the websites listed in this book for great travel deals.
• Don’t forget the cost eating out every day; consider going to the supermarket and cooking more of your own meals when travelling.

Chapter 7 – Student Loans…Jackpot!  (Not Really)

In this chapter, the co-authors provide you with a complete roadmap for managing your student loan, from the application, to using the funds wisely, to advising you how best to repay the money borrowed.

Chapter 9 – Free Money When You Need It Most (Student Tax Returns)

Something that probably doesn’t get discussed as much as it should, especially for students, is tax preparation and how to optimize your tax refund.  This chapter has a host of student-oriented tax deductions to consider.  Kyle and Justin also recommend the following:

“We believe students (and everyone else for that matter) should try doing their own taxes at least once, whether it’s on paper or electronically.”

Chapter 12 – Credit Cards and Lines of Credit

While credit cards and lines of credit can throw you off your financial game very quickly, they are not the sole source of evil for students according to the authors.  “Much like any other tool, a credit card has perfectly valid uses and can fill a variety of needs for a student.”  “Credit cards are not inherently bad.  They are a tool that should be used properly but often isn’t.”

Chapter 14 – But I Thought It Wouldn’t Happen To Me (Insurance for Students)

I suspect most students headed to university or college couldn’t care less about insurance, but this is a chapter worth reading.   Kyle and Justin outline what insurance is all about, what you should consider while away at school, including contents insurance for a few of your valuables.

The book begins to close out with some final words from the authors about the “real world” after graduation, suggesting not to “succumb to the barrage of consumerism that will be aimed at you in the next years.  Companies love to target graduates who are getting their first taste of a steady paycheque and believe they should treat themselves after all their frugal years of study.”

In More Money for Beer and Textbooks, Kyle Prevost and Justin Bouchard provide some straight-forward answers to a host of questions for would-be Canadian students.  Heck, if the students don’t have (or care) about these answers, surely their parents will and this book is equally helpful to them.  I congratulate my fellow bloggers on producing such a fine piece of work and filling such an important personal-finance niche.

You can follow the authors of this book at Young and Thrifty and My University Money.

Are you a student who likes beer but also wants to save more money?  Are you a parent of a student who wants your kid to focus on saving more money than drinking more beer?  Then get the book OR win a FREE copy of More Money for Beer and Textbooks – A Financial Guide for Today’s Canadian Student by entering the giveaway below.  Good luck!

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Happy Holidays everyone!

I trust all my readers had a very Merry Christmas and you’re looking forward to ringing-in the New Year.  I know I am.

Before we leave 2012, I wanted to provide you with a review and some takeaways from an extensive investing ebook I read earlier this fall.   Check out this excellent guide for any dividend growth investor:  The Dividend Toolkit.

About the author and ebook

Matt Alden is the knowledgeable investor and blogger behind Dividend Monk and many months ago, he released an ebook entitled The Dividend Toolkit.  I received my copy a while back and I want to thank Matt for it.  A few months ago, I took some time to dig into this book, reading it cover to cover.  Here is my review of this detailed toolkit for the do-it-yourself (DIY) investor and why you might want a copy.

First Impressions

My first impression of this ebook was the volume – as in lots of it.  I expect most ebooks (rightly or wrongly) to be leaner when compared to traditional hardcopy books.  In this case, I was flat out wrong.  An avid investor for about seven years now, Matt didn’t hold back anything to demonstrate his thorough knowledge of the stock market and investing principles; the ebook is 200 pages long.  If you’re a DIY investor who appreciates details then this ebook was written for you.

Here are some of my favourite takeaways and what I enjoyed about The Dividend Toolkit.

Matt on living modestly and lightly

“….we’re living like kings and queens compared to most of the people that have ever lived on this planet, materially speaking. This includes most people that don’t have much money. It takes only a fraction of a decent income to support a comfortable and healthy lifestyle by most historical or global standards.”

“Here’s what we can all do instead: Produce more value than we consume, and make a lot more money than we spend. Reduce expenditure on depreciating assets.  Forget about status symbols. Let ourselves be rich rather than look rich.  We can invest our money to get a good rate of return, and spend money where it actually matters, such as investing in ourselves through school, or knowledge, or training, or experience.”

Matt on dividend investing basics

The Dividend Toolkit provides readers with an overview on how the markets operate, brokers and dividend reinvestment plans.  The book also provides good definitions for company and dividend metrics, such as revenue, free cash flow, interest coverage ratio, dividend payout ratio and dividend growth rate.

Matt on dividend investing and investing psychology

“There isn’t just one way to invest. There are plenty of successful investing strategies that one can utilize, dividend growth investing is just one of those strategies, and this is just one individual investor’s view of dividend growth investing.  However, dividend growth investing combined with other approaches such as index investing, is among the most suitable of strategies for many individual investors. A good strategy not only offers good returns, but also works well with human psychology.”

“The most important aspect of investing is the discipline to consistently add fresh money. Individual investment decisions are secondary. To build wealth, one must be the wealth builder rather than the “dabbler”. Consistently add money to your portfolio, ensure you have adequate asset allocation and diversification, and think strategically far ahead.”

“Dividend Growth Investing is not just about investing in stocks with a high dividend; it’s also about investing in companies that grow their dividends year after year, like clockwork. A passive income stream is typically unimpressive over the long term if it doesn’t grow. By investing in dividend growth companies, you’ll be building passive streams of income that grow over time. Each year with this investment strategy, assuming your companies stay healthy and profitable, your dividend passive income will increase.”

“…unless you’re planning on living off of your dividends right now, you can reinvest your dividends to buy more dividend paying stocks to further increase your passive income. The growth is exponential, and the strategy works over a long period of time to dramatically build your net worth and passive income.”

“With dividend growth investing and aggressive saving habits, a person can benefit from a diversified portfolio of companies that provides enough dividend income to comfortably support all expenses. And investments like bonds and real estate can be included for support as well.”

Matt on how many companies to own

“Personally, I keep my number of individual stock holdings at any given time to under 25. I’d also recommend not putting more than 10% of your liquid net worth into any one company, and preferably less.”

And then so much more…

The first part of The Dividend Toolkit includes six core topics that discuss Matt Alden’s philosophies about living below your means, why dividend growth investing can be a powerful investing approach and how to construct your investment portfolio.  The second part of the book includes six advanced topics that focus on asset allocation, how to value stock investments and some information about alternative investments.  Matt discusses the cost-benefits of share buybacks and reinvested dividends and why companies who have economic moats should be the ones you want to own.

What’s more, Matt has included in his ebook the Pareto Principle Analysis Workbook – a step-by-step guide and workbook to analyze any prospective dividend paying company for your portfolio.  Matt writes:

“This guide explains how to maximize your time: spend a relatively small amount of time to get a rather thorough understanding of the companies you own or want to own. It states specifically what metrics I use when I quickly go through a company’s information to produce a report.”

The Summary

The Dividend Toolkit is a comprehensive, well researched tool for the ardent stock investor. This ebook was written for any DIY investor looking to get the most out of dividend growth investing – just like Matt aspires and writes about passionately on his blog.  More information on The Dividend Toolkit is available here.  To follow Matt, read all his detailed stock analyses for free and follow his investing journey be sure to check out Dividend Monk.

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Right out of the gate, author David Trahair says Canadians are going about their financial future all wrong:  “Our quest to build wealth and secure a comfortable retirement often ends up making us poor and others rich.”  What is your reaction when you read that?

A few years ago, I would have questioned Trahair’s statement.  Now, I’m with him all the way.  In Cash Cows, Pigs and Jackpots, Chartered Accountant David Trahair tells us to run, fast, from traditional wisdom and get off our modern treadmill of excessive borrowing for the homes we live in, stop buying and investing in things that cost us more than we realize and taking too many chances on long-shots because they rarely, if ever, pay off.   Thanks to David and his great team at Wiley, I’m giving you an opportunity to win a FREE copy of Cash Cows, Pigs and Jackpots, David Trahair’s latest book.   Before I do that, here’s an overview of what you’ll read in David’s latest offering.

“From now on, before you spend any more money on anything, before you jump into an investment opportunity, before you sign a deal for a new car or a new house or condo, before you put another cent on your credit card, before you borrow another dime, stop for a moment and consider the cash flow implications of this thing.”  If you do this, Trahair writes, you’ll have a good idea whether you’re making a financial commitment in a cash cow, a cash pig or gambling on a cash jackpot.

Want to know what your biggest cash cow is?  Read chapter 2 and follow David’s advice once you find out.

In chapter 3, David suggests net worth while a viable metric is a poor measure of wealth.   He also suggests (and maybe rightly so) many “wealthy” people are living a mirage.

“It seems to me that many people who became millionaires (at least on paper) got rich by borrowing to do it.  It sounds easy:  take a loan from a bank, invest in something and hope the thing you buy grows in faster value than the interest you have to pay on the debt.  In other words, their wealth is debt-dependent.” Money is not needed for happiness only an enabler to do certain things writes Trahair.

Next, David writes about “the mutual fund fee monster” everyone should be wary about and how borrowing, while it can work for some people is far from a sure bet to secure financial independence.

Probably David’s most blunt perspective on debt is expressed in chapter 5 entitled The Dream of Home Ownership.  While he says we often hear the phrase “the rich don’t rent”, for many people this is absolutely the right thing to do, especially when you factor in the closing costs, land transfer tax, GST/HST and then the ongoing costs of home ownership.  David takes the reader into great detail (and math) about the opportunity costs of investing in a tax-free savings account (TFSA) or a Registered Retirement Savings Plan (RRSP) instead of purchasing a home.  Trahair continues sharing his take on debt when writing about The Condominium Conundrum in chapter 6, making reference to an excellent resource for potential condo buyers, the Condominium Buyer’s Guide produced by the Canadian Mortgage and Housing Corporation (CMHC).

In chapter 7, David demystifies inflation providing definitions for the Consumer Price Index (CPI), deflation and stagflation, the latter a “two-headed beast” that could occur in Canada due to slow economic growth and rising prices.

Even with recent government rule changes to the Canada Pension Plan (CPP), Trahair weighs the pros and cons of taking CCP early, at age 60, how to apply for it and challenges some myths that the plan is underfunded.  In Cash Cows, Pigs and Jackpots, there are also details about Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), including eligibility criteria for each program and a breakdown for folks about annuities – information that would serve any investor nearing retirement well.

Cash Cows, Pigs and Jackpots is another solid publication from Trahair, national best-selling author of Enough Bull who reinforced what sophisticated investors have always known and what novice investors need to know now:  cash flow is the key to financial freedom.  David is passionate about helping you take control of your finances, which is clear when he writes:  ”give yourself a chance of contentment during your retirement years.  If you are already retired, the best time to start taking control of your cash inflows and outflows was in the past.  The second best time is today.”

Dedicated readers and new followers, because the month of November is Financial Literacy month in Canada, I want to do my part to contribute.  I want you to win a FREE copy of David Trahair’s new book Cash Cows, Pigs and Jackpots.  Enter below!  The contest closes in about two weeks from today.  Good luck everyone!

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Over the last few years, dividend investing and dividend growth stocks have roared back into investing favour.  I’m not sure this type of investing ever went out of style but I think one could attribute more severe stock market volatility since 2008 for the heightened awareness about this type of investing. 

Personally, I like this approach, a bunch.  Regarding my own investing journey, many years ago, I didn’t have the portfolio value to own different stocks outright.  I had to stick with mutual funds (don’t ask me why….I’ve since seen the light) and more recently Exchange Traded Funds (ETFs) in my portfolio to obtain diversification. 

Over the years, things have changed and although I’m far from financial independence my portfolio has grown and I continue to use ETFs in my portfolio but also dividend paying stocks to build up my passive income.

Thanks to Mike Heroux, blogger at The Dividend Guy, there is now more help for DIY dividend investors who wish to follow a similar journey – own stocks to build an income portfolio – with an ebook entitled Dividend Growth:  Freedom Through Passive Income.   Mike has a ton of experience in creating and managing his dividend portfolio, and he believes dividend investing can work for you – his ebook is all about showing you how.

What makes this book interesting and valuable?

• You get financial information beyond the typical blogger – Mike Heroux is a Certified Financial Planner and has an MBA in Financial Services.
• Mike offers some simple examples to understand the power of dividend growth, using commonly held and known companies.
• Mike explains some key dividend growth metrics and why they are important for stock investors.
• The author provides details how to leverage the free TMX Stock Screener tool for research purposes.
• Mike delivers a set of how-to instructions to help choose stocks for long-term passive income.
• He explains his stock trading triggers; when to own stocks, when to fold stocks.
• Mike breaks down the tax considerations associated with owning dividend paying stocks in various investment accounts.  As you might already know from experiences with your investment portfolio, not all investment accounts such as RRSPs and TFSAs are created equal.
• He provides portfolio models for his readers to consider, stocks to own if your portfolio is valued from $500-$5,000; $5,000-$25,000 and $25,000 plus.
• The author has done a great job in making this book available in two versions – Canadian and U.S.  From a customer standpoint, this was a refreshing since Mike provides more direct, applicable information to Canadians and Americans.

With technical information and some humour that will inform and entertain, Mike Heroux from The Dividend Guy has published a low-cost, high-quality product that can help you learn more about building a dividend portfolio for passive income.  In closing, I enjoyed this ebook and highly recommend it because of the writing style and actionable guide for beginners and seasoned investors alike.  You buy the ebooks here:

 

 

 

 

 

 

 

 

 

 

 

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