5 Retirement Mistakes To Avoid

Five Retirement Planning Mistakes

First Published Date : April 11, 2012

Unexpected global economic fluctuations and downturn have made Canadians rethink and reevaluate their retirement strategies. And in a time like this, a mistake can be irreversible and can go a long way. The best suggestion? Avoid mistakes in the first place. Today, I will look at some common mistakes to avoid.

Not Planning Early and Setting Goals – If you have just joined the workforce and happen to bump into this article – congratulations! A lot of us make the mistake to plan and set realistic goals early enough to achieve it. You should have a clear picture of when you want to retire, how you would like to retire, how much income you need to support yourself, where you would like to live, etc.

Investing and Diversifying too Conservatively – If you are too conservative, you may keep all your money, but it is almost guaranteed that you will lose out to inflation. Technology has brought so many modern day investment vehicles (one example is ETF) to regular investors these days, which was unimaginable just 5-10 years ago. You need several considerable investments with a moderate diversification.

Misunderstanding Expenses – Don’t make the mistake of overestimating or underestimating your retirement needs. Make a list of all your expenses and try living on that before your actual retirement. Keep in mind that some expenses will gradually drop out once you retire.

Misunderstanding Debt Management – Don’t look at debt management the traditional way. One simple example is paying off your mortgage or investment loans ASAP. If you have investment loans that earn you more than the interest you pay to carry the loan, it may not make sense to pay off investment loans or mortgage on an accelerated pace as you can earn more money if you use the extra payments towards investments that have higher returns.

Misunderstanding Tax Consequences – You can re-energize your retirement assets and income if you go through proper tax planning. Optimized, tax efficient income retirement assets will last a lot longer than those without proper tax planning.
The best way to handle all these I mentioned above is to educate yourself on various retirement aspects. Although retirement planning looks black and white on the surface, it is complicated and it is unlikely that you will know all the ins and outs by yourself. I always recommend consulting a retirement professional to discuss your unique situations.

China Currency Gets More Freedom start

China Doubles Currency Trading Band

First Published Date: April 19, 2012 ADawnJournal.com

China took another step towards the future to make its currency globally compatible on Saturday, April 14, 2012. The Chinese government announced that it will increase the trading band or range in which the renminbi (or the yuan) can trade against the dollar from 0.5 percent to 1 percent.

The fluctuation will still be done against a fixed benchmark, and this benchmark is set by the central bank. However, allowing it to fluctuate from 0.5 percent to 1 percent will increase China’s currency role in the global financial markets.

Although the U.S. has been demanding more currency freedom from China to ease its unfair advantage to exporters in China, this doubling the size of the renminbi’s trading band against the dollar may not work the same way as the U. S. is expecting.

The yuan increased about 4 percent in 2010 and about 5 percent in 2011. Many Chinese leaders believe that the yuan is close to an equilibrium. The yuan’s outlook among investors in the offshore non-deliverable forward market is not rosy and it is believed that there is room for the currency to depreciate. Also, as China is going through the slowest economy in a decade, Beijing is willing to concentrate more on its domestic economic growth than foreign export. A more flexible currency may give Chinese exporters more room to maneuver, making the currency lower than going higher.

As China wants to see the yuan as a global reserve currency and Shanghai as global financial and banking centre, the Chinese government is gradually allowing its currency to trade more freely and expect more moves from the Chinese government to achieve its dreams.  

The Oasis Hotel Review | Egypt Travel Blog: Day 0 (Part 3)

At The Oasis Hotel, Alexandria Desert Road, Giza, Cairo, Egypt

Egypt Travel Blog: 10 DAYS Egypt Explorer - Felucca Cruise & Red Sea

Upon arriving at the hotel, the driver handed me to another tour guide who was to brief me about my 10-day tour in Egypt and a few other things I needed to know about travelling in Egypt.

The first thing I noticed was the high-security protocol the hotel has in place. Every vehicle has to go through bomb-squad police dogs when entering the hotel boundary. The dogs inspect and sniff the full vehicle before visitors are allowed to go through the main gate. Later, I noticed that those dogs work in  shifts and there are different dogs working throughout a 24-hour period.

Visitors and their luggage then have to go through scanning machines when entering the hotel lobby. My guess was that these security measures were placed by the government to safeguard tourists.

The resort-style hotel sits on 9 acres of landscaped garden full of palm trees and other elements. The location is in Giza, far from the city centre, in the middle of nowhere. You cannot walk anywhere to eat or buy anything, so guests are forced to pay overpriced and often poor-quality foods from hotel restaurants.

The hotel felt like a relic from the ‘80s. It seemed like The Oasis Hotel caters to various tour groups and most of the guests are from tour companies. The tour guides even permanently live and eat at the hotel.

I had the opportunity to experience three different types of rooms. I reached the hotel around 9-10 in the morning and my room was pretty bad: far from the lobby and doing anything involved a lot of walking. Also, I noticed that there was a door connecting my room to the next door, but there was no way to lock it. Needless to say, I requested a better room close to the main lobby. I also felt a little unsafe to spend my first night far away from the lobby, although the hotel had tight security in and out.

The room they switched me to was not bad and much better than the first one. However, at the end of my trip, the room they gave me for my last night was far superior.

The facility had no free Wi-Fi. The only place to get free Wi-Fi was by the pool and the connection was so poor that it would take half an hour to send an email. Later I heard from those who paid to for Internet access that even the paid Wi-Fi was terrible and a waste of money.

I saw lots of cats all over and took pictures. They don’t come too close, but came close enough for some good pictures.

Overall, The Oasis Hotel is not an upscale luxurious hotel, but not bad either. If you get one of the better rooms, don’t mind having no Wi-Fi, and are OK with their food, staying here can be a pleasant experience.

Teaching Kids Not To Spend All Their Money

Kids Should Not Spend All Allowances At Once

First Published Date: April 25, 2012 ADawnJournal.com

Teaching kids about money should start at an early age. The money management skills you teach them today will go along a long way and can make the difference between a well-managed financially successful adult or someone who is living paycheque to paycheque.

Giving kids an allowance should start at an early age. However, the art is to teach them how not to spend it all and save some for the future. The basics of budgeting should be considered while talking to kids about not spending all their money. Instead of leaving them without any guidance after giving allowances, it is recommended that you break down their allowances into pieces in terms of how it should be used. For example, 10% should go to charity, 10% should go to buy a science magazine, 10% should go to the piggy bank, and so on.

Some of the biggest challenges parents will face managing allowances or saved money from past allowances are misbehaviour and identifying the distinctions between wants vs. needs. Misbehaviour can be managed by applying a few rules for violating a good behaviour. Try to explain first that this is (a misbehaviour) something not acceptable and there will be consequences if it happens again next time. If kids do the same misbehavior again, stopping allowances for a few weeks or a deduction can be tried. However, be careful not to implement something too harsh. The differences between wants vs. needs can be addressed by talking to them. If they are asking for something unnecessarily, have a conversation if they are willing to give up (spend) their allowances to buy this, and this is something they need it enough to buy right away.

Parents play the most important role to instill right money habits on kids from the beginning. Whatever you are teaching them now will become a lifetime habit. Habit from childhood is something very hard to break. So it is important to give kids some positive money habits that will lead them to the highway of financial success.

Should You Pay Off High Balance or Low Balance Debt First?

Tips For Paying Off High Balances or Low Balances First

First Published Date : May 13, 2012 ADawnJournal.com

Paying off debts involve making plans and sticking to them vigorously to get rid of all debts. One simple question always comes to mind while making debt payment plans, whether to start paying off low balances or high balances, low interest or high interest debts first. Today, I will discuss which strategies to pick and what to consider in terms of getting rid of your debts.

Let me tell you right up front that there is no best right answer. Paying off high balances and paying off low balances – both strategies have positive and negative sides. I personally like starting with low balances without looking at interest rates.

Pros and Cons of Paying Off Low Balances Without Looking At Interest Rates

– If you start with paying off lower balances, seeing those smaller debts evaporate will keep you motivated to stay on your debt management plan.

– Easier to manage your finances, as you are reducing smaller debts one-by-one.

– This strategy can cost you more money in the end, as you may be carrying higher balances with higher interest longer.

– Makes your life stress free, as you are dealing with less debt accounts day-by-day.

Pros and Cons of Paying Off High-Interest Debts Without Looking At Balances

– Best strategy to save money on interest charges

– You may get discouraged to stay on debt management plan seeing debts not going away soon enough.

– If you have higher balances with lower interest charge, this strategy does not make managing your finances simpler, as you are dragging the low interest debts longer.

Last Word

Which strategy is best to follow? It depends on your situations and objectives. Before deciding on anything, look at the pluses and minuses for both of the strategies and pick the one that makes sense for you. And yes, don’t forget to stop taking on new debts. No debt management plans will work if you don’t stop accumulating new debts first.