Do You Need A Financial Advisor When Going Through Debt Management?

Is A Financial Advisor Right For You?

When you are going through debt management, one of the things you have to look at is how your money is being spent and whether or not it could be spent in a better way. One way you can do this is to create a budget, which is free but the temptation to break your budget is always there.

When you decide to lose weight, you will go to the gym and get a personal trainer. The purpose of the personal trainer will help you lose weight, but at the same time they will help keep you on the straight and narrow, educating you in weight loss and getting fit. From that same philosophy, you can look at getting a financial advisor to help you when you are dealing with debt. A financial advisor will work like a personal trainer. The financial advisor will meet with you and help you do several things. First, and possibly most importantly, the financial advisor will educate you on your finances. They will tell you what you are spending too much money on, what you can save money on and how you can build up a savings that will pay off your debt quickly and easily.

Like a personal trainer, the financial advisor will also keep you on the straight and narrow. When you have a budget, sometimes the desire to go off budget is there but a personal financial advisor will keep that from happening. They will watch your finances and alert you when you are getting close to reaching your budget limit.

A personal financial advisor can be your best friend but you must remember that they will be costing you money. Financial advisors do not do their business for free and it may seem counter-productive to pay someone to help you save money but financial advisors can really do a lot to help you. They are trained to understand finances and debt and to help you understand them as well.

When you are looking for a financial advisor, you may want to talk to friends and family to know who they have gone through. Trusting your personal advisor is very important because that will ensure you will follow their advice. If you are going to work with a financial advisor, do your research and find out what credentials that they have. If they have good references, they may be the best help you can have when dealing with debt management.

Don’t be afraid to talk to other clients of the financial advisor to learn how the advisor does business, how helpful they are, how open they are to questions and more. Just by doing these things, you can find a financial advisor who will help you get rid of your debt, understand your finances and get back on the road to financial recovery. Sure, you pay a bit extra for a financial advisor, but it is well worth it considering how much you can save.

How To Find Extra Money To Pay Off Debt

Ways To Make Cash To Pay Off Debt

First Published Date : March 16, 2011 AdawnJournal.com

If you have too much debt and most of your current income is going to paying off that debt, you may be just treading water as you wait for the debt spiral to pull you down. This is why it is so important that you find ways to bring in some extra cash to help you pay off the debt. The more income you have, the quicker the debt disappears.

So, what can you do to make some extra cash?

The first thing you can do is to lower what you spend on everything. This can be done by not eating out and having dinners at home, using coupons, buying store brands and not name brands. In addition, walk as much as you can, take public transportation and telecommute whenever you can. This will save a lot of money on gas. You should also look at possibly moving to a place where you pay less rent, that will save you a lot of money. You can also talk to your bank about refinancing at a lower interest rate. The bank does not want you to go into foreclosure so they will work with you to make sure you can pay your mortgage.

Also, look at cancelling things you don’t need like cable, internet, any needless cell phones and if you have more vehicles than you need, sell them.

Now, when you want to make some extra cash, the first thing you can do is to talk to your boss about getting a raise. This is not always an easy thing to do but an increase in your income of just $100 per month, or $1200 a year can increase the chances of paying off your debt sooner. For example, if you make $40,000 a year and have a $15,000 debt and get a five per cent raise, you will be making an extra $2,000 per year. That means, using just your raise to pay off the debt, you can pay it off in as little as seven and a half years. Of course, finding other ways to increase your income will help pay it off.

One of the less desirable but most effective ways to pay off your debt is to get a second job. A second job, even on the weekends, can make you a lot of extra money. For example, if you work at a full time job during the week, you can get a part time job on the weekend. If that job pays $10 per hour and you work 10 hours a week, you are now pulling in an extra $400 per month and an extra $4,800 per year. On a $15,000 job, you will be able to pay it off in just over three years.

Just doing these simple things, along with holding garage sales and selling what you don’t need, can result in you paying off a debt in as little as one year. It can be just that easy.

NB – Figures shown above are for illustration purposes only and may not be accurate.

Global X S&P/TSX Venture 30 Canada ETF: First Global ETF Targeting Canadian Emerging Companies

Global X Funds Launches Canadian Junior Mining and Exploration Companies ETF on NYSE Arca Exchange

First Published Date: March 24, 2011 ADawnJournal.com

In these times of worrying investments, many investors want to go with something that is a bit safer. Hence the purpose of exchange-traded funds, which do not try and beat the stock market, which many will tell you is impossible, but only to replicate it. With an exchange traded fund, or ETF, you are trading based on an exchange, rather than individual stocks. This then allows you more security because not all your eggs are in one basket and you can therefore ensure you are okay if the market goes down.

Recently it was announced that Global X S&P/TSX Venture 30 Canada ETF was launched and it focuses on one of the strongest areas of the Canadian economy; energy and commodities. This ETF is split between materials and energy sectors, with slightly more material stocks in it than energy. This gives you a good mix in case one of the sectors goes down. Some of the main stocks on this ETF include Atac Resources, Rainy River Resources and Canacol Energy.

Of course, that is not all the ETFs you can choose from in Canada. One of the most well-known and used is the iShares MSCI Canada ETF. This ETF covers more range than the other ETF mentioned here. ECW, as it is called on the trading floor, has half of its portfolio made up of material and energy stocks, The rest of the portfolio is mostly made up of financial stocks. This is important because it gives you three different sectors that you can work with in order to ensure you get the most diversified portfolio that you can. The main stocks on ECW are Suncor Energy and Canadian Natural Resources.

When you are trading on the market, you want to ensure that you have a bit of relative safety so that you do not lose everything that you have. Many investors put their hopes on risky stocks and ending up losing everything during the financial crisis. If you are in for the long haul and would like to have a few stocks to diversify, then you can look at these ETFs. ETFs are known for providing better level of safely than picking individual stocks. With ETFs, you can invest in specific sectors or even stocks that only match your morale code. For example, you can choose ETFs that only have stocks from companies with good employee records and others that are not related to weapons or tobacco.

If you like to invest in Canadian companies, then you may want to look at investing in these ETFs, which are working on stocks that are in the highly profitable energy and manufacturing industries. In the case of the energy industry, it was one of the few industries in Canada to continue to do well despite the financial meltdown.

If you are thinking of investing with ETFs, then these two ETFs are the ones you can put in your research list Don’t forget to do your research making any financial decisions, and make sure to find the product that best suits your needs.

Link: Global X Funds

Should You Give Your Kids An Allowance?

Kid’s Allowance Teaches Money Management

First Published Date : April 13, 2011 ADawnJournal.com

Prelude

An allowance is an amount of money you give to your kids on a regular basis to cover their expenses. Experts have always debated over whether kids should get an allowance or not. One group says giving an allowance teaches kids nothing and it might even ruin their finances in the future. Another group says an allowance teaches children money management skills (through responsibility and discipline) and prepares them to better handle their finances in the future. I believe in allowances and if used properly, it can be a great tool to teach your kids finances at an early age. Today, I will present my perspective and will provide you some tips on this debated topic.

Why Kids Should Get An Allowance?

Responsible parents look after the family and meet its members’ needs. An allowance helps to meets family members’ needs. An allowance is an example of parents’ responsibility. A lesson kids are practically observing right here – responsibility.

An allowance nurtures the children’s ability to think and act independently. Don’t expect them to always spend their allowance properly. The objective here is to make mistakes and teach them to correct themselves as they go along.

Once kids have their allowance in their hands, it tells them something very important – money is not unlimited. This reinforces the idea that they have to spend it wisely (i.e., it teaches how to best make choices between many things) once they know that each time they spend on something, they will have less than they did before. You will see a significant reduction in their “I want this” items. This is how kids learn the concept of “discipline” and “money is limited.”

At What Age Should Kids Get An Allowance?

Kids start showing coin recognition and interest in basic money concepts as early as four. Depending on your kids’ interest and your comfort level, parents can start giving an allowance as early as age three to five.

How Much Allowance Should Kids Get?

There is a common approach on deciding an allowance – a weekly allowance representing a total amount equal to $1 for every year for age. For example, a four year old would get $4 every week.

However, I think this basic approach will not work in most situations as there are many other allowance deciding factors coming into play. You should consider the following factors when deciding on an allowance:

·    Your Income – Only you know what you can afford to give and what you can’t.

·    Your Kid’s Age – As they grow bigger, the allowance amount should increase as well to cover additional cost kids need to handle every year.

·    What The Allowance Should Cover – Be clear on what it should cover and what not, and then add all expenditures to check if this allowance amount is realistic enough. A good way to do this is to make a list of all items you think their allowance should cover and discuss it with your kids; this ensures that no important items are missing and that your children are kept involved in the process.

·    Where Do You Live? – You may want to consider the neighbourhood you live in when deciding an allowance amount. Do you think a kid living in Red Lake should get the same allowance as a kid living in Toronto? I would keep this is mind while making a decision.

Allowances and Chores Should Not Be Tied

It is not recommended to link allowances and regular household chores. Chores are regular family responsibilities and should not be tied with allowances. However, kids can get paid for special projects for which you would normally seek outside help such as cleaning the backyard, painting jobs, etc.

Keep Clothing Allowance Separate

You may find some type of allowances, such as clothing allowances or book allowances, are not easy to blend into regular allowances. An easy way to handle this is to keep these separate. For example, give your children a clothing allowance in the winter for winter clothing, give them money to buy books when the needs arise, and so on.

Do Not Give an Allowance without Proper Guidelines

The basic purpose of giving an allowance is to teach kids money management skills. If you just throw some money at your kids without proper guidelines, instead of teaching them money management skills, it will teach them indiscipline and bad money management skills. Always give the allowance with proper guidance – show them how to spend it and break it down into small pieces, such as 10% should go to the piggy bank, 10% for a science magazine, 10% for charity, and so on.

Last Word

Money skills are not taught in school. Giving an allowance in a responsible way can open up endless possibilities to teach kids money skills and financial responsibility, and the lifetime results are immeasurable.

Canadian Dividend ETFs

Canadian Income ETFs

First Published Date : June 19, 2011 ADawnJournal.com

Who does not like to sit back, relax, and collect dividends on a regular basis without worrying too much about picking individual stocks or giving hefty fees (MER) to mutual funds? ETFS allow you to do just that, and for income hungry investors the choices to pick income or dividend EFTs are getting noticeably wider in Canada. Today, I am going to discuss my top eight ETFs I like for generating income. ETFs trade on stock exchanges just like stocks and you can buy them through your discount brokerage account or through a licensed financial advisor. For more information on ETFs, please visit A Dawn Journal ETF Section and TMX Money ETF Section.

BMO Covered Call Canadian Banks ETF (TSX: ZWB) – This ETF invests in Canadian banks and writes out of the money covered call options, thus earning premiums on call options. As of this writing, it has a staggering portfolio yield of 9.56 per cent and MER is 0.65 per cent. Before considering this ETF, do understand how the covered call option strategy works and the risks associated with it.

BMO monthly Income ETF (TSX: ZMI) – This ETF, actually, is an ETF of ETFs. It maintains a 50/50 balance of equities and fixed income, investing 50/50 in high yielding equity and fixed income ETFs. Portfolio yield is 5.35 per cent and MER is 0.55 per cent.

Claymore 1 – 5 YR Laddered Corporate Bond ETF (TSX: CBO) – This ETF tracks the DEX 1-5 Yr Laddered Corporate Bond Index. It tries to main a continuous maturity laddered portfolio of securities maturing in a proportional, annual sequential pattern. Portfolio yield is 4.63 per cent and MER is 0.27 per cent.

Claymore S&P/TSX Preferred Share ETF (TSX: CPD) – Simply enough, this ETF tries to match the performance of the S&P/TSX Preferred Share index. Portfolio yield is 4.80 per cent and MER is 0.48 per cent.

Claymore 1 – 5 YR Laddered Government Bond ETF (TSX: CBO) – Similar concept like CBO mentioned above, but this ETF tracks the DEX 1-5 Year Laddered Government Bond index instead of the DEX 1-5 Yr Laddered Corporate Bond Index. Portfolio yield is 4.52 per cent and MER is 0.16 per cent. Notice the MER; it’s really a bargain.

Claymore Canadian Financial Monthly Income ETF (TSX: FIE) – Name says it all. This ETF tries to provide monthly cash distribution of $0.04 per units. Portfolio yield is 6.70 per cent and MER is 1.24 per cent. MER is quiet high.

iShares Diversified Monthly Income (TSX: XTR) – Similar concept like ZMI mentioned above, XTR is an ETF of ETFs and provides consistent monthly cash distribution. Portfolio yield is 5.78 per cent and MER is 0.55 per cent.

iShares S&P/TSX Capped REIT Index ET (TSX: XRE) – This ETF tries to match the performance of the S&P/TSX Capped REIT Index. Portfolio yield is 4.88 per cent and MER is 0.59 per cent.

Disclosure – This article is for information purposes only and No information is intended as investment, tax, accounting or legal advice, or as an offer to sell or buy or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security, ETF, or fund. The author assumes no liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon. You bear responsibility for your own investment research and decisions, and should seek the advice of a qualified financial professional before making any investment decision. I own some of the ETFs mentioned here.