Financial Literacy Month

Basic financial skills are a critical part of everyone’s education.  Yet, study after study show that despite all the information available today, many consumers have very little understanding of financial concepts.

You know financial literacy has become a big deal when it has its own month.

Throughout the month of November, Canadians are encouraged to take control of their finances.  The theme for 2018 is “Invest in Your Financial Well-Being.”  You can expect to see all kinds of information about how to be smarter about money from different sources in the weeks to come.

Even though I have worked in the financial services industry for almost three decades – including stints as Investment Advisor, Certified Financial Planner, and co-hosting an investment workshop – I still don’t consider myself an expert.  There is always more to learn.

Finances are the number one concern for people who are retired, or soon will be.  Past generations depended on pension plans to fund the bulk of their retired lives.  Today, we need to make more financial decisions ourselves amid a large range of complex financial products and confusing options.

Too many choices can make it difficult to create and implement a good financial roadmap.  You gain confidence in your choices when you become more informed

1. Take a course

Universities, community colleges and boards of education offer financial courses through their continuing education and night school programs.  Expect to pay around $300 – $400 for a one- or two-day course with materials.

Free courses are usually sponsored by a financial institution.  They can still give good value even though their company and products will be heavily promoted.

The Ontario Securities Commission has good on-line courses at Get Smart About Money that you can do at your own pace in the comfort of home.

2. On-line

 There’s a lot of useful information available on the Internet.  Finding information is not the problem; finding accurate, objective and useful information is the challenge.

There are hundreds of financial blogs, forums and on-line publications.  Some are written by knowledgeable authors, some are just plain wrong, and others promote schemes to separate naïve investors from their money.  Be aware that many “financial experts” are merely expressing their own opinions – not facts.

Here are a few I find worthwhile:

  •  Money Sense was once a magazine and now is strictly on-line. The advantage is you can search the archives for any topic of interest to you.  Articles are written by some of the best financial writers around.
  • The Canadian Couch Potato blog is a complete guide to index investing. You can find sample portfolios, tips on rebalancing, withholding taxes, and more.
  • The Stingy Investor has information on investing, strategies, calculators and top stocks lists.
  • Check out Retire Happy for everything you ever wanted to know about CPP and government benefits, plus retirement income and having a successful retirement.
  • The go-to blog for tax advice is The Blunt Bean Counter which makes the topic of taxes even interesting (well, as much as it can be). Also find posts on estate planning, retirement, dividing family assets and advice for entrepreneurs.

3. Books

I read a lot of finance books, but it’s become hard to glean any useful information that hasn’t been rehashed time and again.

These are some of my favourites:

  • Your Retirement Income Blueprint – Daryl Diamond. This book has the best explanation I’ve found on how to “income layer” the most efficiently.
  • A close second, Retirement Income for Life – Frederick Vettese, gives drawdown strategies for turning your life savings into, well, income for life.
  • Gail vaz-Oxlade has written numerous books on several topics. One recent book, CEO of Everything, focuses on singles – whether single by choice or those who find themselves suddenly single through divorce or death of a spouse.  Lots of financial and practical tips written in Gail’s typical no-nonsense style.
  • Beat the Bank – Larry Bates is a step-by-step investing guide for those interested in improving their financial success and earning more from their investments.
  • They may sound like they’d be a series for pre-schoolers, but the Little Books are a series of short, one-topic books on a variety of subjects from how to manage your money to various investing techniques. You can find a complete list here.

The bottom line

Studies have shown that the average person thinks they have great money management expertise.  DIY investors are often overconfident in their skills.

If someone else manages your money – financial advisor, accountant or your spouse – it’s important to have sufficient knowledge to confirm their strategy is in your best interests.

The successful investor is an educated investor.  Investor education is ongoing and contributes to better investing decisions.

By starting with one course, book or blog, you’ll figure out what you need to learn more about, and then you can go on from there.  Whatever you do, keep reading and learning.


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2 Responses

  1. Jan says:

    Thanks for the book list. I agree with your first choice. When I retired, it changed my attitude towards my finances. From saver to spender with a blueprint. I will read the others too for more info. It seems that 99% of financial advice is geared towards the pre-retirement group. While that is indeed needed, there has been a gaping hole when it comes to the retirement stage of life and for singles. Thanks for your blog.

    • Marie Engen says:

      Thanks Jan. I agree that most advice is geared towards saving for retirement and couples. When you’ve been saving all your life it becomes hard to start spending your nest egg and you need to have a plan (or blueprint) to help you save on fees and taxes to make your money last as long as you do.

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