The top 10 things our children should know about money

Posted By David Lloyd On May 16th, 2012

Many of my clients have adult children graduating from university and starting a new career. For many it’s the first time they have had to manage finances and plan for the longer term. Now is the time to establish good habits and attitudes that will last a lifetime. Here is my list of the top 10 things I advise young adults to do if they want to build a healthy and successful relationship with money:

  1. Write down your values and goals. You may draw some blanks at first, but these should be your guiding principles. Then work hard to make them happen.
  2. Earn all you can, save all you can and give what you can.
  3. Avoid credit cards until you have a full time job to pay off balances in full each month.
  4. Pay off student loans, credit cards and any other debt on which the interest is not tax deductible.
  5. Contribute to an RRSP early and often. You can’t beat the value of tax deferred compounding.
  6. If you’ve maxed out RRSPs, contribute to a TFSA and invest what you can. If you save and invest your money, you can’t spend it.
  7. If you need a car, buy a used one. It’s a depreciating asset that won’t help you build wealth.
  8. In everything you buy, buy quality, not brand.
  9. Don’t buy a house or condo until you can really afford it.
  10. Be ambitious and courageous; there is no such thing as failure; it’s just experience.

 


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When will natural gas prices turn?

Posted By David Cole On May 9th, 2012

Record warm temperatures made for a comfortable Canadian winter this year. But they’ve caused a chill in the energy market. Particularly natural gas prices which dropped to a 15 year low.

What’s the cure?

“Low gas prices” is the standard response from industry experts. Low prices spur demand and cut off supply. It’s just a lesson in economics.

Natural Gas Demand

Demand for natural gas is increasing on several fronts – electricity generation, manufacturing and transportation.

Electricity generation

U.S. electricity generation consumes 21 BCF/day (billion cubic feet per day) which is 6 BCF/day or 40% more than last year and is trending higher (Fig. 1). This increase of 6 BCF/day represents a full 9% of total US supply of 63.9 BCF/day for 2012.

North America had the warmest winter in 80 years and demand for heating was down 8 BCF/ day through March 2012 compared to a typical year. The net decline in demand over the first 90 days this year of 2 BCF/day (6 less 8 ) will reverse for the balance of 2012 due to the overall higher electricity generation demand. The U.S. National Weather Service has predicted temperatures above normal for July and August throughout most of the country which creates higher demand for natural gas as more electricity is used for air-conditioning.

Manufacturing

Industrial demand for natural gas is on the rise as companies take advantage of lower prices. Plastics and chemical factories are large consumers of natural gas. New facilities are scheduled to open in the next several years as the less expensive U.S. natural gas prices have drawn these industries from Europe and Asia where prices are much higher. For example, a new $6 billion chemical factory was recently announced in Pennsylvania to take advantage of the abundant shale gas from the region. [read more >>]


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Does wealth breed selfishness?

Posted By Kelly Willis, Editor On April 20th, 2012

A guest blog by Dr. Julie A. Morton.

Provocative new research at the University of California, Berkley, suggests that those of means ARE different from their more humble brethren, and NOT in ways that would make one proud.  According to studies conducted by social psychologist Paul Piff and his university colleagues, wealthy individuals are more likely to LIE, to CHEAT and to STEAL then their less fortunate counterparts. They are even more likely to do things as mundane as cutting off other drivers and refusing to wait for pedestrians at crosswalks.

The research points to a number of reasons, but three stand out: [read more >>]


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The 3 most common portfolio woes — and how to fix them

Posted By Kelly Willis, Editor On April 12th, 2012

Earlier this year, our Managing Director and Chief Wealth Management Officer, David Lloyd published a month-by-month Personal Finance Checklist to help readers organize and optimize their financial affairs and it’s been a popular post on this blog.

April is a good month to review your portfolio after first quarter results are in: Perhaps a little ‘spring tune-up’ if you haven’t revisited your strategy in awhile?

On that very subject, here’s a link to an article by Stephen Hafner, one of our Managing Directors & Portfolio Managers, written for the website Accretive Advisor. Stephen identifies the three
most common portfolio problems we see — and how to fix them.


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Is the next generation ready to fund retirement?

Posted By Kevin Dean On April 5th, 2012

Last week’s federal budget included the much anticipated changes to the Old Age Security (OAS) pension. But not nearly as soon as some thought.

With changes being phased in over six years beginning in 2023, the reality is that the majority of Canada’s baby boomer population will be unaffected by the changes. Currently, at over $6,000 per year with a claw back feature reducing the amount received based on income, the reality is that for most of our clients OAS is an afterthought in their retirement planning.

But what this change does signify is a continuation of two societal trends that have been going on for decades. [read more >>]


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Adult Children Returning to the Nest

Posted By David Lloyd On March 21st, 2012

Many of our clients are justifiably concerned for the future welfare of their children. Some are torn between letting children find their own way and accepting that it is, and will likely continue to be, tougher for our kids than we had it. Finding a job, affording to buy a home, uncertainty surrounding government services, caring for an aging demographic and responsibility for an enormous debt burden for which they did not incur, are steep hurdles we did not have to overcome.

One issue facing boomers today is adult children moving back into the family home, indefinitely. So what are some of the issues and practical steps to make sure this family reunion doesn’t turn out to be a like All in the Family (aka Archie Bunker and family)? [read more >>]


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What women want from their financial advisors

Posted By Kelly Willis, Editor On March 15th, 2012

As an independent professional woman, I’ve always bristled at the suggestion that there is somehow a difference in how I approach the management of my assets simply because of my gender.

But having just come back from a Women Advisors’ Forum in the U.S. this week, I have to say there is a lot of research to suggest women do have different expectations than men – and these are not being very well met by the financial industry.

[read more >>]


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