This week the Parliamentary Budget Officer (PBO), reported that expenses for the first quarter of fiscal year 2016-17 (April – July, the government’s fiscal year begins in April), were $3.4 billion higher than the same quarter of 2015, or 5.7 per cent higher, the highest in 6 years. Why were they higher? Keep Reading
As a millennial woman, I feel like I exist in an odd gap. The expectations surrounding both my age and my gender are rather contradictory.
With regard to my age, 28 and a half, I am nicely positioned within the millennial spectrum. Up until a couple of years ago, before life got serious and all of a sudden conversation turned to the purchasing of homes, marriage and babies, life as a millennial was pretty simple. Your job didn’t have to represent your career, your partner didn’t necessarily have to represent your husband or wife. As life became more serious I started to notice something frustrating: the glaring gap in the messaging that is directed at our age group. On one end there is the widely held notion that we should follow our passions. On the other there is the idea that as a generation we shouldn’t be so expectant that life will turn out just like our Pinterest boards, we should settle. In regards to career, my understanding is that this means putting our noses to the grind and committing to a stable, maybe corporate, job that we don’t love while after work hobbies serve our needs to be entrepreneurial and creative. The gap in expectation for what kind of life we are, or I am, meant to live has become more evident as decisions have started to carry more impact and the paths we choose become more permanent.
Certainly the belief that a corporate job is the correct choice stems from our parents, grandparents and parents’ friends. These are also the folks who have been known to categorize millennials as lazy for wanting what we want, when we want it. We’ve been accused of not working hard enough, like the boomers say they had to when they were our age. I don’t believe for a second that we are a lazy generation and whoever believes that should go check in with Silicon Valley, or hit up any one of those inspiring 30 Under 30 lists. I can however, understand where the sentiment originated from. Being a generation that has spent nearly the majority of our adult lives on social media, a multitude of platforms that can seem trivial and time-wasting to a boomer, we are trained to believe that our lives should look as we want them to; nicely filtered with pretty things to photograph. And when they don’t, we look elsewhere for opportunities or jobs that will help us to fulfil this need. Perhaps to a boomer, this lack of interest in “sticking it out” may appear as laziness, or a lack of fortitude. Personally, I call it hustle. I don’t think it’s a negative to want a great life for yourself and to look for opportunities that will help you create that life. After all, we only get one, right? May as well make it f*cking amazing.
Perhaps to a boomer, this lack of interest in “sticking it out” may appear as laziness. Personally, I call it hustle.
Guilty, I have a pinterest board dedicated to inspiration, aka motivating and encouraging quotes that remind me everyday to keep working towards bringing my dreams to fruition. And everyday I hustle towards bringing my dream closer; being the founder and operator of a widely read news and financial literacy site that inspires personal confidence when it comes to finance. The life of an entrepreneur is a grind. The ups and downs are taxing and these light little quotes assist a great deal in helping me keep my eye on the prize.
Further, and at the risk of sounding depressing, we really just get a few shots to create lives we love, and the time to do this is now before we really start piling on the financial commitments and big change becomes significantly less realistic. I think that risks are well worth taking, in fact, lately I’ve been living by the mantra of, “what’s the worst that could happen?” Excitement is the spice of life and I can’t imagine anything worse than having regrets about what could have been if only I’d tried. Ever read Napoleon Hill’s Think and Grow Rich? After I put that book down all I could think was, “damn I don’t wanna be the person who stops three feet from gold.” I hope, for all of you entrepreneurs, that your venture takes you all the way to the stars, and in the event that it doesn’t, I hope it was a crazy and exciting ride that you’ll always remember and be proud of.
I hope, for all of you entrepreneurs, that your venture takes you all the way to the stars, and in the event that it doesn’t, I hope it was a crazy and exciting ride that you’ll always remember and be proud of.
Regarding entrepreneurship, I think the gender portion of the gap also comes into play here. Society seems to have different expectations as to what it wants from us. Historically men are the entrepreneurs and that has become society’s proverbial comfort zone. There also seems to be some underlying expectation that as women we aren’t geared towards making money and are working until we choose to begin the next phase; like marriage, or motherhood. Clearly this is false, yet this notion persists. I know this because I feel it everyday. I am not given the same level of seriousness as a male counterpart. This is based on personal experiences where I feel that I am being patronized with a “tut, tut that’s sweet” type of response to what I do, whereas I know that if a guy had said what I just said, he would likely have been recognized for his creativity and gutsy move into entrepreneurship.
Case in point: Donald Trump and Hillary Clinton. His brash and wildly incorrect statements about the economy are actually given authority in that they are allowed to be said without dramatic pushback, whereas Hillary’s detailed and well-informed economic statements and plans are both given question and ignored for other more sensational topics (I’m looking at you, Matt Lauer).
Now, I know that as women we have helped to create the idea that men are better business people than woman: we do not ask for the same rewards that men do. It is statistically proven that we ask for less when it comes to salary, venture capital or opportunities in general (HBR discusses this here). While there are more women enrolled in universities today, there are more men enrolled in the business and science faculties; notably the faculties that will provide an education that leads to a higher paying job. Why? Our education is completely our choice, there is nothing preventing us from choosing what path to take in both secondary and post secondary school (barring personal situations). Perhaps it is because we have been guided by parents who are students of the old school where women were encouraged to pursue more “feminine” pursuits?
I feel that it is now time to disclose that I do not consider myself a feminist.
Going further, I feel that it is now time to disclose that I do not consider myself a feminist. This is not because I do not believe in women’s rights, gender equality, equal pay or any of the other initiatives based around creating a level playing field for men and women. I believe that there is no reason that one person is less than another. Race, religion and gender should not be part of what shapes an opinion of what someone can do or achieve.
The reason that I do not call myself a feminist is the same reason that I am not a proponent of group labels in general. I feel that today labels can often do more harm than good. Calling attention to a group for its societal differences can work against itself in that it has the ability to frame the group as victims who desire special attention. I believe that if I refer to myself as something other than my actual characteristics, then I am actively saying I am unequal to you, whether greater or less than. In the case of feminists, actively calling out women as unequal to men suggests segregation and therefore seems to me to defeat the purpose of the movement’s mission. Then again, opinions are like _______, and everybody has one.
Now speaking more directly to the niche that I have chosen to work in, and as part of this belief that rather than campaigning for existing differences, we campaign for making choices moving forward that will put us on equal footing, I am vehemently against the idea that in order for finance to be interesting to women it needs to be coated in pink and dressed up with some sort of shopping analogy, as it very often is. Why do we do this to ourselves? These personal finance books for women, we all know them, are written by women! Insert face palm here. There is no difference in what men and women need or want to know regarding finance, but both can benefit from a simplified, relaxed approach to the understanding of it (enter The Paper & Coffee and a little self promotion). New York Times writer Tara Siegel Bernard put together an interesting article about this back in 2010.
Information is the great equalizer. I think we can all agree on this, it is why such focus is placed on high school graduates entering into post secondary education (though I would like to note that the most intelligent and sharp people I know are self educated, in addition to time spent in school). This being said, education is a given, especially in a country like Canada where nearly all of the people you know have a university degree or diploma. Yet with the social equalizer that is education and information, a great gap persists between the classes of our society. Even in writing that I feel like I have made some kind of politically incorrect statement, but we all know it to be true and the evidence is parked right outside (I’m writing this from the financial district of downtown Vancouver).
If you look at those who are considered to be wealthy, discounting those with family money that has been passed on, wealth has largely been accrued by thoughtful investing, whether that be in real estate, the markets or a new company. Investing is a learned skill. These people had to gain an understanding of how each investment opportunity works, how our economy will affect their decision and then how to manage the investment. And at the risk of going even further out on a politically incorrect ledge, those who build wealth are typically men. And good on them, after all, financial freedom is not biased in who it partners up with.
So while information is the sundae, financial information and understanding is the chocolate sauce, nuts and cherry on top.
So while information is the sundae, financial information and understanding is the chocolate sauce, nuts and cherry on top. Financial literacy is the great equalizer of the already educated. Men aren’t born with an innate understanding of money, however I do believe that they are inclined to be more interested in it thanks to societal ideologies, the influence of their fathers and the typically male career path that they are introduced to from a young age. Finance isn’t hard. In fact, it’s very interesting and exciting – especially when you’re watching your own money grow and get to start playing with new levels of investments. Presently though, learning about finance can be a challenge what with the very serious tones of the newspaper or the condescending lightness of existing personal finance literature. I’m striving to hit a path right through the middle, where you can take what you just learned and apply it to your banking or financial plans, share it with friends or let the information guide a future-facing decision.
And there you have it, an opinion piece that vaguely follows a theme but really just lets me share all of the things I’m thinking about today. I’m curious to know what you agree with and what you don’t; comment here or email me at info@thepaperandcoffee.com. Perhaps you have some views you’d like to share as well? I’m keen to know and interested in publishing others’ opinions – email me.
Cheers.
Yesterday Federal Finance Minister Bill Morneau shared the federal government’s plans for an overhauled and updated CPP (Canadian Pension Plan). Why’d he do this? Because the government sees that many, many Canadians are not saving enough for retirement and there is concern over 1.1 million Canadians retiring with a significantly lower standard of living compared to when they were working.
Here’s what you need to know, as well as a refresher Q&A in how CPP works: Keep Reading
The article this post stems from is an opinion piece by a New York Times journalist who covers women’s rights, human rights, health and global affairs. Clearly, he is a democrat. This being said, his point is extremely valid regardless of what party he affiliates himself with: the media has a responsibility not to portray candidates within a shallow narrative, as they consistently and frustratingly do. (Billionaire businessman Mark Cuban has recently spoken out about this as well.) Not only is this not fair to the candidates, but it isn’t fair to the audience, the population, who trust journalists and the media to give them a full picture of what is going on in an election cycle.
The media has a responsibility not to portray candidates within a shallow narrative, as they consistently and frustratingly do.
All of that being said, the title of the article is: “When a Crackpot Runs for President.” But, I mean, he has a point.
Here is an excerpt:
On the PolitiFact website, 13 percent of Clinton’s statements that were checked were rated “false” or “pants on fire,” compared with 53 percent of Trump’s. Conversely, half of Clinton’s are rated “true” or “mostly true” compared to 15 percent of Trump statements.
Clearly, Clinton shades the truth — yet there’s no comparison with Trump.
I’m not sure that journalism bears responsibility, but this does raise the thorny issue of false equivalence, which has been hotly debated among journalists this campaign. Here’s the question: Is it journalistic malpractice to quote each side and leave it to readers to reach their own conclusions, even if one side seems to fabricate facts or make ludicrous comments?
President Obama weighed in this week, saying that “we can’t afford to act as if there’s some equivalence here.”
Read the full article by Nicholas Kristof published in The New York Times Opinion Pages on Sept. 15 2016, here.
Feature image via Newsday.com
For starters, we all know what “hedging” means. It means to reduce the amount of risk you are open to, most commonly heard in the phrase, “hedging your bet.” While this definition once applied to the hedge fund, today it totally does not.
Hedge funds and the people who run them are particularly interesting because they are a sensational representation of the very wealthy. Known for being extravagant, highly opinionated, and very happy living in a place of extreme risk, hedge fund managers have been loosely referred to as “masters of the universe.”
Hedge funds were born in 1949 when Alfred Winslow Jones formed the first as a new sort of investing strategy where a fund manager would “hedge,” or try to avoid significant loss by going short in positions (shorting a stock means that you believe the value is going to decrease, so you bet against it – learn more here), as well as going long (invest in securities with the intention that these stocks and bonds are all going to increase in value). By carefully balancing the risk the fund was exposed to, potential risk was mitigated. This part is key, and is where the name hedge fund is derived from.
Today, hedge funds largely make grand scale speculative investments where they are betting on a huge upside based on their predictions for market movements and economic conditions – often with no hedging involved. These funds are playing to beat the market on a macro scale and their ability to do this is referred to as “alpha.” When investments of this scale are made, the potential for upside is massive, but the potential for loss is also massive and can have the ability to shut a hedge fund down. The thing about hedge funds is that they are typically built on the reputation of the managing partner or partners and their ability to beat the market and provide investors with huge returns – it’s similar to stock promoters (smaller scale, and likely more relatable as we all know one); have a few big public losses under your belt and you’re going to have a very challenging time raising money for your fund or next venture.
A particularly memorable hedge fund fail involved Bernie Madoff, the guy who was caught running a Ponzi scheme and highly publicized as the face of American greed culture. In 2008 he was sentenced to 150 years in prison, as well as a $170 billion in restitution fees. Here’s how he scammed investors out of $65 billion.
The details:
Feature image via blog.kosten.co
During a recession, who is it that gets hit the hardest? The average American, aka, the middle class. This is the majority tax-paying class, the group that are the most at risk when economic conditions decrease for they are the ones in the middle; the ones who are most entangled in the economic systems being employees dependent on corporations for income and health care, and carrying considerable debt on mortgages, vehicles and credit cards. This is a generalization, but I think a pretty fair generalization (and can also be said for the Canadian economy).
This means that when stimulus is pushed into the economy (the Federal Reserve and Government leverage their monetary and fiscal policies to inject the economy with more money, cheaper credit, and new tax policies designed to help a limping economy grow with more consumer and commercial spending), it reaches the people at the top first. These people are the heads of banks and corporations and it is then their responsibility to push the stimulus down through the levels of the economy and population mainly through offering easier access to loans, credit and creating new jobs. In theory this works, though certainly a lot of the stimulus is lost on the way down as the Federal Reserve and Government can’t force what is done with the new money and policies (often it is big business and wealthy investors who benefit most), and it does take time for the middle class to feel any financial betterment.
Now finally, after nearly a decade of economic stimulus and expansion, the middle class are feeling some love and it’s time for a semi-celebration.
On Tuesday census data was released “showing that median household income in the US rose a whopping 5.2 percent in 2015, to around $56,500. According to that data, incomes rose for black families, white families, Hispanic families and Asian-American families. It rose for young people and in households headed by middle-aged adults and older people. In short, the improvement was across the board to a remarkable degree.”
5.2 per cent is significant as it is considered fairly strong income growth, but it is still less than the growth that the typical American family experienced back in the mid-1990s, and is still less than the median household made in 2007 before the financial crisis. The New York Times calls these gains “an important milestone for the economic expansion that began in 2009. For the first time in recent years, the benefits of renewed prosperity are spreading broadly.”
Read the original article, The Economic Expansion Is Helping the Middle Class, Finally, by Neil Irwin, and published in The New York Times’s Upshot on Tuesday, September 13 2016. Unless otherwise cited, all quotes are from this article.
Feature image via One Way Ticket featuring model Lily Donaldson photographed by Skye Parrott, Dossier Journal #10 Fall/Winter 2012.
I’d like to make it clear that my intention for this site is to write unbiased articles, even when it comes to politics. However, when it comes to the 2016 US presidential election, I can’t help but feel strongly biased for the simple fact that the US has one candidate who is strongly experienced and suited for the role of president and one who is not based on everything I have read in what I consider to be intelligent publications, including both the Wall Street Journal and the New York Times. It is unfathomable to me that someone like Donald Trump, and to be clear, just because I believe he would make an utterly disastrous buffoon of a president does not mean that I don’t like him – I just don’t like him for this job, is being held to the same standard as her in terms of presidential potential.
I’ve been a Hillary fan for years and as I’ve shared publicly before, spent my 26th birthday on March 5th at a speech she gave here in Vancouver. I didn’t know anybody else who would willingly purchase a ticket to attend the event and so went on my own, and it was a marvellous evening. Hillary is without a doubt one of the most fascinating people I have ever had the pleasure of listening to. And seeing her in person, listening to her be surprisingly frank and candid about her experiences as Secretary of State and her thoughts on various global leaders was incredibly endearing. But as with many things, you had to be there to understand what I am talking about. This Vox video, from Ezra Klein speaks directly to this.
I am not saying Hillary is perfect. She has certainly screwed up as a politician (hello private server debacle), and humans do and as a proponent of hers, I readily admit this. But let’s be rational in our criticism, those who have claimed the White House as theirs for a term or two (or less), have all screwed up, and for the most part, far, far worse. My bottom line here is while I do not get to partake in the election, I do believe she would, and will, make a fantastic president. And one of my favourite publications, Wired, boldly feels the same way.
Lastly, I find this June 12th read from Michael Arnovitz to be very worthwhile, as is his lengthy and well written (IMHO), June 30th follow up piece (because if you write a piece about HRC, you gonna get some unreasonable hate, and boy, his first piece sure did).
Thoughts? What do you think?
Today in New York Bloomberg held a Canadian Fixed Income Conference where Stefane Marion, a Montreal-based economist and strategist at National Bank of Canada commented on the future of the Vancouver housing market. According to Marion, “Vancouver’s housing market may enter a correction with price declines of 10 per cent,” going on to call it a “healthy correction.” Keep Reading
What is the TFSA?
The Tax Free Savings Account is a savings and investment tool that was designed to help encourage savings by way of tax-free capital gains. The name can be somewhat misleading in that when you deposit money into your TFSA, these contributions are not deductible against your income tax the way that an RRSP is. Instead, the TFSA is beneficially used as an investment vehicle where you purchase and sell investments such as mutual funds, ETFs or stocks, (learn more about mutual fund and ETFs here), because the capital gains you make on those investments are tax-free within the TFSA.
Hang on, what is capital gains tax and how much of my investment gains does it take if I don’t use a TFSA??
In Canada, capital gains tax is applied to half of your capital gains, at your marginal (highest) tax rate. This means that say for example if I make a capital gain of $20,000 CAD on investments, then $10,000 of those gains are taxed at my marginal tax rate. If I earn 75k per year, then my marginal tax rate is 20.5% (find your tax rates here), and thus $10,000 of my gains are taxed at 20.5%, equalling $2,050 due in taxes. Alternatively, if it’s simpler, you may also view it as the full capital gains being taxed at half your marginal rate: $20,000 x 10.25% = $2,050 due in taxes. Different equation, same result. With a TFSA, no capital gains tax apply.
Is a TFSA like an RRSP?
Both are savings accounts, but unlike an RRSP (registered retirement savings plan), where taxes do apply once money is withdrawn (with certain exceptions like purchasing your first home), when money is withdrawn from your TFSA, taxes are not applied. The idea with an RRSP, and the reason that it has the word “retirement” in it, is that you contribute savings during your working life, receive tax deductions against your current income tax (much higher now than at retirement), and then when the money is withdrawn as a retired senior, you pay only a minimal amount of tax on withdrawals. These withdrawals are treated as retirement income and come with a rate significantly less than your tax rate as a working citizen. This is the government’s way of incentivizing Canadians to save for retirement = less financial burden on the government.
Can I put as much money as I want into my TFSA?
Unfortunately, no. The government regulates each year the level of contributions eligible for your TFSA, and it varies greatly depending on the government and their federal budget. In 2015 the Conservative government raised the maximum annual contribution to $10,000 CAD – which was great news for Canadians. This year, the new Liberal government has reduced the maximum annual contribution to only $5,500 CAD.
What does annual contribution mean?
It means that each year you are allowed to contribute a maximum amount of money into your TFSA.
If I deposit money and then withdraw, how does that affect my limit?
Regardless of whether or not you deposit and then withdraw money, every contribution counts towards your maximum, or limit. So if I deposit $2,000 in March, and then $1500 in July, but then need some of that cash for a trip and withdraw $2500, I have contributed $3,500 of my $5,500 annual contribution. Even though I withdrew some of my money, the contribution still counts and I only have $2,000 in contribution space left.
What happens if I only contribute some of my limit one year?
Then, kindly, the space you had left is rolled over to the next year. Using that last example, if I didn’t use up that $2,000 in contribution space, I could roll it over, or carry it forward, to the next year and I would now have $7,500 in contribution room (Year 2016 leftover contribution space $2,000 + Year 2017 annual contribution $5,500 = Year 2017 total contribution space $7,500).
How do I use it?
Rather simply. First of all, you can set up a TFSA pretty much anywhere, and you can have many of them. If you have a broker who invests for you, he or she can set up your investment in a TFSA at their brokerage. If you have a financial advisor at your bank, they can also set one up for you and this is where they will purchase investments on your behalf like an ETF so that any gains made are subject to zero capital gains tax, as explained above. You may also hold cash in your TFSA, though the interest rates are not particularly different than a regular savings account and TFSA cash savings are not eligible for any special treatment so it’s not doing much for you.
Feature image via Pinterest.
Today, 15 years after the terrorist attacks of 9/11, the US House of Representatives (here is a chart that explains where the House sits in US government), has passed a bill that would allow victims of terrorist attacks to sue other countries for their alleged involvement. The bill stems from families of 9/11 victims wanting to sue Saudi Arabia on the basis that 15 of the 19 hijackers were Saudi.
Historically, the US has barred lawsuits against foreign governments, and for good reason. According to the various documentaries out there, we can’t be certain who is in fact responsible for the terrorist attacks of 9/11, and certainly allowing US citizens to sue other nations would open up the floodgates for other countries to sue the United States for their significant and often fatal involvement in international conflicts.
While the bill does have broad bipartisan support from both sides of the House, Obama has said he will veto the bill. Then Congress has said they will veto his veto, or look to override it with the needed support from two-thirds of the lawmakers in the House, as well as in the Senate.
Read the original article by Kristina Peterson, published in The Wall Street Journal on September 9, 2016.
Feature image of the US House of Representatives via thinkinghighways.com
