Personal Finance for Canadians for Dummies : A Reference for the Rest of Us!

by Eric Tyson; Andrew Bell

• ISBN13: 9781894413299
• ISBN10: 1894413296
• Edition: 3rd
• Format: Paperback
• Copyright: 2003-03-01
• Publisher: WILEY

Summary

Make the most of your hard-earned cash. From erasing consumer debt to investing in the stock market - your financial questions answered. Getting control of your finances doesn't have to be complicated. Really! This book is loaded with practical, easy-to-follow advice to help you make smart, profitable financial decisions. Whatever your income level, whatever your financial goals, the updated 3rd edition of this national bestseller is the Canadian sourcebook for sound financial planning. Discover how to: Save more of what you earn Reduce your spending Get out - and stay out - of consumer debt Make the right investments Select the best financial advisers Buy the right insurance coverage

Table of Contents

Introduction.

Why This Book?

Uses for This Book.

The Big Picture.

Part I: Where Do You Go from Here?

Part II: Saving More, Spending Less.

Part III: Investing Crash Course.

Part IV: Protecting What You've Got.

Part V: Where to Go for More Help.

Part VI: The Part of Tens.

Glossary.

Icons Used in This Book.

Part I: Where Do You Go from Here?

Chapter 1: Figuring Your Financial Fitness.

Common Financial Problems.

Bad Debt versus Good Debt.

How Much Bad Debt Is Too Much?

Your Financial Net Worth.

Financial assets.

Financial liabilities.

Your net worth calculation.

Interpreting your net worth results.

Savings Analysis.

How Is Your Investing Knowledge?

How Insurance-Savvy Are You?

Chapter 2: Overcoming Obstacles to Personal Financial Success.

Personal Financial Illiteracy.

Teaching personal finance in schools.

Talking money at home.

Illiteracy and conflicts in financial publishing and advising.

Real and Imaginary Hurdles.

Discovering the real hurdles holding you back.

Practising good habits.

Chapter 3: Establishing and Accomplishing Goals.

Creating Your Own Definition of ""Wealth"".

What money can't buy.

The balancing act.

Prioritizing Your Savings Goals.

Know what's most important to you.

The advantages of retirement plans.

Dealing with competing goals.

Building Emergency Reserves.

Saving to Buy a Home or Business.

Saving for Kids' Educational Expenses.

Saving for Big Purchases.

Preparing for Retirement.

What you need for retirement.

Retirement building blocks.

Government benefits.

Personal savings and investments.

Pensions.

Retirement planning worksheet.

How to make up for lost time.

Overcoming objections to retirement plans.

Part II: Saving More, Spending Less.

Chapter 4: Where Did Your Money Go?

Why You Overspend.

Access to credit.

Using credit cards.

Making minimum monthly payments.

Taking out car loans.

Bending to peer pressure.

Spending to feel good.

Becoming addicted to spending.

Trying to keep current.

Ignoring your financial goals when buying.

Wanting the ""best"" for your children.

Analyzing Your Spending.

Tracking your spending on paper.

Tracking your spending on the computer.

The Secret to Growing Rich on Your Income.

Chapter 5: Dealing with Debt and Credit Problems.

Using Savings to Reduce Your Debt.

How you gain.

Money you may be overlooking.

Decreasing Debt When You Lack Savings.

Transfer to lower-interest-rate credit cards.

Cut 'em up, cut 'em all up.

Debit cards: The Best of both worlds.

Filing for Bankruptcy.

Bankruptcy benefits.

Bankruptcy drawbacks.

""Light"" and ""full"" bankruptcy.

Bankruptcy advice.

Ending the Spend-and-Debt Cycle.

Identifying and treating an addiction.

Resisting the credit temptation.

Consider Using the Credit Counselling Service (CCS).

Dealing with Credit Mistakes.

Obtain a copy of your credit report.

Get others to correct their mistakes.

Tell your side of the story.

Chapter 6: Reducing Your Spending.

Four Keys to Successful Spending.

Live within your means.

Find the best values.

Eliminate fat.

Avoid buying on credit.

Strategies for Reducing Your Spending.

Food.

Shelter.

Transportation.

Clothing and accessories.

Debt repayment.

Indulgences.

Personal business.

Medical care.

Insurance.

Taxes.

Costly addictions.

Chapter 7: Taking the Trauma out of Taxes.

Understanding the Taxes You Pay.

The importance of your marginal tax rate.

Taxable income defined.

Trimming Employment Income Taxes.

RRSP and retirement plan contributions.

Income shifting.

Reducing Investment Income Taxes.

Fill up those retirement plans.

Select other tax-friendly investments.

Strategies to Increase Your Deductions.

Child care expenses.

Alimony and maintenance payments.

Annual union and professional fees.

Business losses.

Interest on investment loans.

Moving expenses.

Strategies to Increase Your Credits.

Personal tax credit.

Spousal credit.

Equivalent-to-married credit.

Charitable donations credit.

Shifting or bunching expenses.

Tuition fees credit.

Medical expenses credit.

Disability credit.

Pension income credit.

Age 65 or older.

Self-employment expenses.

Tax Resources.

Revenue Canada assistance.

Preparation and advice guides.

Software and online help.

Hiring help.

Dealing with an Audit.

Audit preparation.

The day of reckoning.

Part III: Investing Crash Course.

Chapter 8: Important Investment Concepts.

First, Establish Your Goals.

The Major Investment Flavours.

Lending investments.

Ownership investments.

Shun gambling instruments and behaviours.

Investment Returns.

Investment Risks.

Stock and bond risks.

Focus on the risks that you can control.

Low-risk, high-return investments.

Diversification.

Asset allocation: Spreading it around.

Allocating money for the long term.

Stick with your allocations: Don't trade.

Investment Firms Are Not Created Equal.

Where to focus.

Places to consider avoiding.

Experts Who Predict the Future.

Investment newsletters.

Investment gurus.

Final Thoughts.

Chapter 9: Investment Vehicles.

Lending Vehicles for Slow-Trip Money.

Transaction/chequing accounts.

Savings and money market accounts.

Bonds.

Ownership Vehicles to Build Wealth.

Stocks.

Real estate.

Investing in small business.

Investment Odds and Ends.

Precious metals.

Collectibles.

Life insurance with a cash value.

Chapter 10: Mutual Funds: Investments for All of Us.

Mutual Fund Benefits.

Fund Types.

Money market funds.

Bond funds.

Hybrid funds.

Stock funds.

Canadian, U.S., international, and global funds.

Index funds.

Specialty (sector) funds.

Selecting the Best Mutual Funds.

Cost.

Historical performance.

Fund manager and fund family reputation.

Your needs and goals.

Fund Rankings and Performance.

Beware the worst sources.

Understanding your fund's performance.

Following and selling your funds.

Chapter 11: Registered Retirement Savings Plans.

What is an RRSP?

Tax-deferred contributions.

Tax-deferred compound growth.

How to Maximize Your RRSP Savings.

The benefits of starting an RRSP early.

Maximize your returns.

The Different Types of RRSPs.

Guaranteed RRSPs.

Mutual Fund RRSPs.

Self-directed and brokerage-house RRSPs.

Contribution Rules.

Contribution limits.

Calculating your allowable contribution.

RRSP withdrawals.

Spousal RRSPs.

Collapsing (Closing) Your Plan.

Your Three RRSP Maturity Options.

Registered Retirement Income Funds (RRIFs).

Minimum RRIF withdrawals.

Annuities.

Chapter 12: Investing Money Inside Retirement Plans.

Inappropriate Retirement Plan Investments.

Annuities.

Limited partnerships.

Allocating Your Money in Retirement Plans.

Prioritizing retirement contributions.

Setting up an RRSP.

Allocating money when your employer selects the investment options.

Allocating money in plans that you design.

Altamira.

Fidelity.

Self-directed or discount brokerage choices.

Transferring Retirement Plans.

Transferring plans you control.

Moving money from an employer's plan.

Chapter 13: Investing Money Outside Retirement Plans.

Getting Started.

Pay off high-interest debt.

Contribute to retirement plans.

Taxes on Your Investments.

Savings/Emergency Reserve Investments.

Bank, trust company, and credit union accounts.

High-interest savings accounts.

Investing Money for the Longer Term.

Bond funds.

Guaranteed investment certificates (GICs).

Dividend funds.

Stock funds.

Real estate.

Small-business investments.

Chapter 14: Investing for Educational Expenses.

Neglecting RRSPs: A Big Mistake.

How Will You Pay Educational Expenses?

What will university or college cost?

Setting realistic savings goals.

How to Save for Educational Expenses.

RESPs.

In-trust accounts.

Loans, Grants, and Scholarships.

Government student loans program.

Some tips: Loans, grants, and scholarships.

The borrowing versus saving debate.

Good and Bad Investments for Educational Funds.

Good investments: No-load mutual funds.

Bad investments.

Overlooked investments.

Chapter 15: Real Estate.

To Buy or Continue Renting?

What's your timeline?

Can you afford to buy?

How much will lenders allow you to borrow?

What's the cost of owning versus renting?

Consider the lone-term cost of renting.

Financing Your Home.

Understanding the different types of mortgages.

Short-term and long-term mortgages.

Choosing between a short-term and a long-term mortgage.

Open and closed mortgages.

Fixed- and variable-rate mortgages.

Understanding other lender fees.

How to buy with less money down.

The RRSP Home Buyers' Plan.

Cut your costs at renewal time.

Finding the best lender.

Increasing your approval chances.

Finding the Right Property and Location.

Condo, townhouse, co-op, or detached home?

Cast a broad net.

Find out actual sale prices.

Research the neighbourhood and area.

Working with Real Estate Agents.

Real estate agents' top conflicts of interest.

Qualities to look for in real estate agents.

Putting Your Deal Together.

Negotiating 101.

Inspect,inspect, inspect.

After You Buy.

Refinancing early.

Mortgage life insurance.

Is getting a reverse mortgage a good idea?

Selling your house.

Part IV: Protecting What You've Got.

Chapter 16: Insurance Basics.

Insurance: A Big, Inefficient Business.

Eric and Tony's Three Laws of Buying Insurance.

Law I: Insure for the big, not the small, stuff.

Law II: Buy broad coverage.

Law III: Shop around and consider buying direct.

Dealing with Insurance Problems.

Help! I've been denied coverage!

Help! My insurer is hassling me about paying a claim.

Chapter 17: Insurance on You.

Life Insurance.

How much do you need?

Term versus cash-value life insurance.

Buying term insurance.

How to get rid of cash-value life insurance.

If you're considering cash-value life insurance.

Disability Insurance.

How much disability insurance do you need?

Other features you need in disability insurance.

Where to buy disability insurance.

Travel Medical Insurance.

Where to buy travel medical insurance.

The Most Overlooked Form of Insurance.

Chapter 18: Insuring Your Assets.

Homeowner's/Renter's Insurance.

Dwelling coverage: The cost of rebuild.

Personal property coverage.

Liability insurance.

Flood and earthquake insurance.

Deductibles.

Special discounts.

Where to buy homeowner's or renter's insurance.

Auto Insurance.

Third-party liability insurance.

Uninsured or underinsured motorist liability.

Deductibles.

Special discounts.

Little-stuff coverage to skip.

Where to buy auto insurance.

Umbrella Insurance.

Estate Planning.

Wills, living wills, and medical powers of attorney.

Probate and living trusts.

Estate planning to minimize taxes when you die.

Part V: Where to Go for More Help.

Chapter 19: Financial Planners.

Alice in Financial-Planner Land.

Alice's adventures.

Lessons learned from Alice's journey.

Your Financial Management Options.

Doing nothing.

Doing it yourself.

Hiring financial help.

Should You Hire a Financial Planner?

How a good financial planner can help.

Why financial planners aren't for everyone.

The Frustrations of Finding Good Financial Planners.

Regulatory problems.

Letting the Big Bad Wolf guard the Three Little Pigs.

Financial planners' top conflicts of interest.

How to Find a Good Financial Planner.

Personal referrals.

Associations.

Interviewing a Potential Financial Adviser.

What percentage of your income comes from fees paid by your clients versus commissions from the products that you sell?

What percentage of fees paid by your client is for ongoing money management versus hourly financial planning?

What is your hourly fee?

Do you also perform tax or legal services?

What work and educational experience qualifies you to be a financial planner?

Have you ever sold limited partnerships? Future? Commodities?

Do you carry liability insurance?

Can you provide references of clients with needs similar to mine?

Will you provide specific strategies and product recommendations that I can implement on my own if I choose?

How is implementation handled?

Chapter 20: On Air, in Print, on the Internet, and Computer Money Management.

The Mass Media.

Alarmists.

Poor values.

Worship of prognosticating pundits.

Radio and Television.

Newspapers and Magazines.

Books.

Computers and Personal Finance.

The Internet.

Tread carefully on the Web.

Software.

The benefits of using financial software.

Computer Money Tasks.

Pay your bills and track your money.

Plan for retirement.

Prepare your taxes.

Research investments.

Trade online.

Read and search periodicals.

Buy life insurance.

Prepare legal documents.

Part VI: The Part of Tens.

Chapter 21: Eric and Tony's Tips for Ten Life Changes.

Chapter 22: Ten Things More Important than Money.

Glossary.

Index.