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Author Archives: Kristina Tahnyak

Avatar photo About Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.

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The 7 Aspects of Financial Planning

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financial planning, financial tips, financial advice

chairs on beach

There are 7 aspects to a profitable financial life that require planning for our retirement. These 7 aspects can be summarized into Four Categories; Investment Planning, Tax Planning, Retirement Planning and Estate Planning.

All of our investment decisions should either directly or indirectly involve one of the 7 aspects of financial planning.  Our retirement goals will be focused around some or all of these aspects because they are all areas of our lives that we have to consider when making changes.  Whenever we make a financial decision such as selling a home or buying an investment, we have to consider the tax implications of our financial choices.

Every time we change to a new financial stage in our lives we should consider these 7 aspects of financial planning, but they are especially important in retirement planning because this is when we stop accumulating assets.  During retirement we start to liquidate our assets and live off of our accumulated wealth.

The 7 Aspects of Financial Planning

  1. Our Home. We have to consider if we are going to maintain our current home, downgrade to a smaller home, or if we would like to buy a second home such as a cottage or a winter home in warmer climate.  All of these decisions have financial implications that require planning.
  2. Providing for our Family. We may have someone living with us who is financially dependent on us such as a child, a grandchild, or a parent.  We may also want to plan to provide for the financial needs (education) of a family member who is not living with us.
  3. Our Personal Legacy. Estate Planning is a very important part of any financial plan or retirement plan.  I know it is not pleasant, but we have to decide what will happen to our money after we are gone.  Does it go to our spouse? Will we gift it to a charity? These are all questions that we need to ask ourselves.
  4. Our Work Life. If we are eligible, we may want to plan for an early retirement. Maybe we will leave our full time job and decide to continue working part time.  Maybe we will change our field of work or start our own part time business.  Maybe we will volunteer.
  5. Self Employed Business. If we own our own business we may want to sell the business and stay on as a consultant.  It is often very difficult for self employed people who have built a business from the ground up to fully retire.  The options of selling our business or winding it down and closing the business should be explored in more detail with a tax consultant.
  6. Our Health. We have to be prepared for retirement both physically and mentally. We have to be financially prepared for our special medical needs as well as the possibility of moving into an assisted living residence.
  7. Lifestyle. This may be the root of all retirement plans. Every decision we make and every goal that we plan for revolves around the lifestyle that we want to have in retirement. We need to determine how we will spend our time during retirement.

Photo by Miqspix

Friday Roundup: The DINKS Wedding Edition

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wedding walkwayHappy Friday DINKS!

They say that those who can’t do, teach; and I guess that those who can’t wed, blog.

I am not married to my boyfriend Nick and it is definitely not in our (or should I say his) plans.  After surfing the web this week I found a lot of posts about weddings.  It appears that generally people do two things in the spring time, they buy houses and they get married.

Today we are dedicating this post to all of our personal finance blogger friends who are planning their upcoming nuptials.  I think that I want to get married, but I am not sure.  I like the idea of a wedding, and I think that I like the idea of marriage.  However, that may just be 10 years of living with my boyfriend Nick rubbing off on me.

If you are planning your wedding on behalf of DINKS I would like to say congratulations.  After graduation, our wedding day may be the biggest day of our lives.  My university graduation was a milestone in my life along with the day that I passed the final financial planning exam and became a Certified Financial Planner.  I look forward to my possible wedding day but I am not holding my breath.

Here are some posts that I found around the web on Weddings:

  • Money Crashers gives us some tips about capturing our special wedding moments in their post 20 Ways to Get Cheap Professional Wedding Photographers and Videographers on a Budget.
  • Blonde & Balanced is less than a week away from her wedding (Congrats Girl!).  She shares 15 Things Being Engaged Has Taught (Her) About Life, Love and Money.  This post is only part 1, so be sure to keep reading Blonde & Balanced for part 2.
  • Financial Samurai says that we should choose a mate with similar financial goals, values, and interests in the post Why Do Women Go Out With Deadbeat Losers?
  • Yes I am Cheap rants about all of her coworkers getting married along with her lack of desire to marry her long time boyfriend in the post The Last of the Unmarried Mohicans.  She is frustrated will all of the questions and implications by other people about why she is not yet married to her long time boyfriend.  All I have to say to Yes I am Cheap is that I hear you.  To everyone else who has been asking her about their wedding intentions all I have to say to you is… it’s really none of your business!

Photo by Hamner Fotos

$100 To A New Home

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renovating tips, decorating your home, new home tips

bedFor the last 2 weeks I have been watching the Do It Yourself Network, TLC, and A&E TV to get ideas on how to redecorate our apartment.

My boyfriend Nick’s Mom is coming to visit us from West Africa this summer and I really want our apartment to be welcoming and warm.

I came across a TV show called $100 Makeover on A&E TV.  It caught my attention because I have been redecorating for almost 3 weeks, and although I am not yet finished it has already cost over $500.

I have to admit that the expenses so far have not all been for redecorating. I did buy some furniture for our bedroom which included upgrading our nightstands as well as a new chest of drawers.  I believe that reorganizing and redecorating go hand in hand.  When we start reorganizing the redecorating follows, and if we start redecorating we always find new ways to reorganize.  To date I have spent $477 on furniture and $239 on various home decor.

Redecorating our apartment is a project that is long overdue, but I could never bring myself to spend the money.  Therefore, the visit from Nick’s Mom is the perfect excuse for me to spruce up our apartment with a long overdue makeover.  All I can say is that I wish it was only costing $100.

Here are some Helpful Tips for Redecorating on a Budget from A&E TVs $100 Makeover host Leslie Segrete:

  • We don’t have to buy all new furniture if ours don’t match.  It’s perfectly allowable to mix and match side tables as long as we follow two rules; they have to be the same height and we must match the lamps you place on them.
  • We can breathe new life into a worn or dated piece of furniture by applying a fresh coat of paint. White or black glossy paint is always a safe choice.  Or, we can take a risk by painting a traditional piece in a fun and vibrant color like yellow or turquoise.
  • Simple and inexpensive fabric shades can be made to look like we had them custom made with a simple trick that doesn’t require any sewing. Create a border detail along the fabric shade using gross grain ribbon.  It is available at our local craft store or it is also available on line in a zillion different colors. Attach the ribbon using iron on adhesive tape that is the same width as the ribbon.

Photo by UGG Boy

A Mutual Fund of Funds

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mutual funds, investment options, stock market tips

A Mutual Fund of Funds is often referred to as a Mutual Fund Portfolio or a Select Portfolio.  They are Mutual Fund investments that do not directly buy and hold individual stocks and bonds like other Mutual Funds;   Mutual Funds of Funds are comprised of and invest directly in other Mutual Funds.

A Fund of Funds Offers Diversification

The advantage of investing in a Mutual Fund of Funds gives Investors access to a wide variety of Mutual Funds and several different investment options with the simplicity of buying only one Mutual Fund.  We have access to a variety of different investments, asset classes, and securities all with the purchase of only one Mutual Fund.

Buying a Mutual Fund of Funds allows us to purchase all of the Mutual Funds that we may want without having the required minimum for each individual fund.  If we wish to invest in 5 different Mutual Funds and the minimum required investment is $5000 for each Fund, we would need a minimum of $25,000 to invest.  However, if we buy a Fund of Funds that has all or most of the other Mutual Funds that we want to buy, we only need the required investment minimum for one fund, the Mutual Fund of Funds.

Mutual Fund of Funds Offer Simplified Solutions

Many Mutual Fund Companies offer Mutual Fund of Funds to their investment clients because they know that clients want simplified solutions. If we own several Mutual Funds our quarterly account statement could be several pages long.  The details of our quarterly account statement include our Mutual Fund transactions along with the changes in price valuations.  However, if we only have one Mutual Fund our statement will be just as detailed but it will be less confusing and less complicated because the information is condensed for only one fund.

A Fund of Funds is Available to All Investors

Mutual Fund of Funds are available to all investors regardless of their investment objectives and financial goals.  Mutual Fund of Funds are available in both retirement savings accounts as well as non registered investment accounts.  We can purchase Mutual Fund of Funds in any type of investment account where Mutual Funds are available.

Mutual Fund of Funds offer different investment options for all types of different investors.  Many Mutual Fund Companies offer Income Portfolios, Balanced Portfolios, as well as Equity Portfolios which give Investors access to several different Mutual Funds while having to buy only one Mutual Fund of Funds.

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Find more information on Globe Advisor mutual funds.

How Would You Spend The Last Days of Your Life?

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doomsday, preparation, last days

Doomsday did not come on May 21.  However, that didn’t stop people, the followers of Harold Camping, from giving away their entire life savings to Harold Camping in hopes of eternal rapture.  I thought these stories were crazy, but maybe that is just me.  If you thought that the world was definitely going to end how would you spend your last few days alive on Earth?

Harold Camping is a self proclaimed Doomsday profit who predicted that the world would end on May 21 with a series of fatal natural disasters.  He has tens of thousands of fans and followers who tune in to his radio show that is broadcast on more than 50 different radio stations.

A San Francisco Newspaper reported that followers of Harold Camping quit their jobs, sold all of their personal possessions, and spent their (supposedly) last few days on Earth taking luxurious vacations.  Other sources reported that people stopped paying their bills, sold their homes, and even committed suicide prior to the predicted events on May 21 in order to avoid a possible painful death.

I personally don’t believe that anyone can predict the exact date and time that the world will end.  However if it comes down to it, here are a list of things that I would and definitely would not do if it was the end of the world.

Five Things That I Would Not Do:

  1. I would not quit my job.  If it really was the end of the world no one would have need for a bank or a financial planner and therefore I am sure the bank would be closed.
  2. I would not make plans for the future (just in case).  The lists of things to do in my life would definitely stop.
  3. I would not sell my house, because no one would need it. If it really was the end of the world it would definitely not be a seller’s market.
  4. I would not spend all of my life savings because there wouldn’t be enough time for me to enjoy the money.  If I was going to spend my lifesavings it would be to travel around the world and experience new things, and there just wouldn’t be time for that.
  5. I would not give away my money.  Nobody would need it if we are all going to be dead in a week.  I am not sure why people gave their life savings to Harold Camping because if the end of the world was supposed to be May 21st he would have no need for the money.

Three Things That I Would Do:

  1. I would spend time with my family.  In case it really was the end of the world I would like my last moments to be spent with loved ones.
  2. I would make peace with all of my personal troubles and inner demons.  No one is perfect but I would ask for forgiveness before I enter into the afterlife.
  3. I think that I would hope and pray that it really wasn’t the end of the world because there is still so much more that I want to do in my life.  However, I would also pray that I wouldn’t suffer during the rapture and that I would be with my family in the afterlife.

Preparing for the end of the world is definitely different than preparing for our own death.  We don’t need to get all of our finances and insurance policies in order because there is no one left behind.

How would you spend your last days on Earth before the end of the world?

Photo by CTBTO

I Got Robbed… Again!!!

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getting robbed, bank robbers

That’s right! Last Monday my bank branch got robbed…again. It was exactly the same time and day as the previous week.  I hope this doesn’t mean that every Monday at 11:30 am we are going to get robbed.

I honestly do understand why someone would rob a bank; the reward is definitely not worth the risk.  On both occasions the bank robber walked away with less than $2500.  Both bank robbers were apprehended by the Police and now they are going to jail and bad things are going to happen to them.  This bank robbing duo should have just looked for regular jobs because they could have made $2500 in a couple of weeks, and their income would be sustainable.

It is rumoured that our two bank robbers were brother and sister. My branch manager made a joke that the sister robbed our bank branch because she needed bail money for her brother who was put in jail last week.  We can now joke about the situation because no one was hurt and both bank robbers were caught by the Police.

It was my 4th bank robbery but my first time (at the bank) being interviewed by a Detective.  It was also the first time that my bank branch has been robbed by a woman. She was apprehended by Police the day after the robbery.  The key eye witness? A Taxi Cab Driver.  Last week the female bank robber arrived and left our bank branch in a Taxi Cab.  Needless to say the Taxi Cab Driver provided a description of the female bank robber as well as her home address where he picked her up as well as the address where he dropped her off after the robbery.

There are two things, actually 3 things that I really hate in life. The first is people who use and abuse their power to take advantage of other people.  This usually includes men who attack women and adults who hurt children; however it now includes bank robbers.  The second thing that I really hate in life are people who feel that they have the right to something that is not theirs, this usually includes people who collect welfare as well as people who demand alimony; however this now includes bank robbers.  The third thing that I really hate in life is people who don’t shower and feel it is ok to go out in public unwashed.

I am honestly not sure why people rob bank branches, other than the fact that they don’t get a lot of money, the odds are very high that they will be caught by Police.  Our particular bank branch has 2 security guards present at all times throughout the day.  They don’t have weapons, but having security guards present should be an intimidation tactic; I guess it’s not working. The possibility of being robbed is always a risk that we accept as bank employees, thank goodness usually no one is hurt.

I know that easy access to money may be tempting for some people, but honestly robbing a bank branch is really not worth it.

Photo by Emily Dickenson

Friday Roundup: Let’s save some money

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Happy Friday DINKS! I hope you all had a great week.  Today we are discussing different and easy ways that we can save money.  This includes changing our mentality and taking the time to shop around and find the best deal. Sometimes the effort to try and save money should be taken to the extreme and we should just stay at home.

I personally try to save money by sticking to my personal budget.  This year my goal is to want less.  If I want less then I will spend less, and therefore I will save more money.

FOX News feels that we should always save at least 10% of our pay check.  They list moving back in with our parents as a way to save money.  I believe that if we cut down on all major expenses which include our housing costs, transportation costs, as well as food we can save money.  Moving in with our parents may be a way for us to save on our housing costs.  However it could also include renting out a room in our home or turning our basement into a bachelor apartment and renting it out.

Here are some great posts from around the web about different ways to save money:

  • The Simple Dollar talks about the need to always want nicer things when we have money in the post The Danger of the Rich Act.
  • Moneyville says that the inflated prices of gas and other commodities should automatically prevent us from spending money in the post Gas Price Keep Us Home This Weekend.
  • Money Crashers advises us to save money by shopping around for the best deal in the post The 5 Best Online Tech Deals Sites to Save Money on Discount Electronics.
  • Get Rich Slowly answers a readers question about the moral implication of just spending money on stuff in the post Ask the Readers: But What If I am Materialistic?

Photo by Razor 512.

 

What is the International Monetary Fund, and Who is Dominique Strauss-Kahn?

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International monetary funds, Dominique Strauss-Kahn, money scandals

foreign currencyOver the last week, CNN and many other news channels around the world have been reporting on the arrest and investigation of the sexual assault allegations against (now former) International Monetary Fund Chief Dominique Strauss-Kahn.

Who is Dominique Strauss-Kahn?

Dominique Strauss-Kahn is a French Economist and Banker who recently resigned as Chief of the International Monetary Fund.  On May 14th Dominique Strauss-Kahn was accused of attacking a maid on May 14, 2011 in the Sofitel Hotel in New York City.

The charges against Dominique Strauss-Kahn are two counts of criminal sexual act, two counts of sexual abuse, one count each of attempt to commit rape, unlawful imprisonment, and forcible touching.  Strauss-Kahn is married to Anne Sinclair who has been referred to as the French Barbara Walters.  Both she and her husband are very public figures in France and around the world.

Dominique Strauss-Kahn was in the 4th year of his 5 year term as Chief of the International Monetary Fund.  He recently resigned his position after the news of his sexual assault allegations hit the media worldwide.  Dominique Strauss-Kahn leaves behind an annual salary of over $400,000, as well as a very lucrative travel allowance.

Even though Strauss-Kahn maintains his innocents on all charges, he still resigned his position as Chief of the International Monetary Fund. The IMF will give Strauss-Kahn a departure severance of $250,000 along with an annual pension.  It is definitely a profitable package in the eyes of most people but is a huge pay cut for someone who maintains their innocence.

Strauss-Kahn was arrested at JFK airport in New York on sexual assault charges on Saturday May 14th and released on bail Thursday May 19th.  He is now confined to house arrest in a New York City apartment as he awaits his next court date, which is set for June 6.  His Bail conditions included $1 million in cash as well as $5 million in bonds. Dominique Strauss-Kahn was also required to surrender all of his travel documents.

What is the IMF?

The International Monetary Fund was created in 1944 towards the end of the Second World War to help rebuild global economies from devastation.  Its goal is to promote global monetary cooperation with fair exchange rates, facilitate international trade to ensure that countries can easily transact with each other, as well as promote sustainable economic growth, and reduce poverty around the world.

It is headquartered in Washington DC with approximately 2500 staff members from 160 countries.  There are currently 187 member countries of the IMF.  If a country wishes to become a member of the IMF they are given a quota which dictates their financial contribution, their voting rights, as well as their percentage as a stakeholder in the IMF.

The International Monetary Fund also lends money to its member countries that are experiencing financial difficulties in hopes of rebuilding or stabilizing their economies.  Recent IMF projects include a loan of 26 billion Euros to Portugal to support economic growth and $30 billion US Dollars of financial assistance to Ireland.

What is next for the IMF?

The IMF committee hopes to select the next Chief by the end of June. As for now all processes are business as usual.  The next Chief of the IMF will be voted in by a committee from a pool of nominated candidates.

The European Union currently holds the largest share in the IMF and therefore it is rumoured that they would like to see the new leader of the IMF emerge from Europe.  However, some speculators feel that the new IMF chief should be from an emerging or developing country such as Brazil, India, China, or South Africa. It is interesting to note that of the past 10 IMF 4 of them had been French like Dominique Strauss-Kahn.

Do you think the choosing of the next IMF Chief should be a political decision or it should honestly just be the best person for the job?

Photo by Public Domain Photos

Segregated Funds

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segregated funds, investment options, types of investment

In the past on DINKS Finance we have discussed various investment products such as Mortgage Backed Securities, Discount Brokerage Services, as well as Junk Bonds. Today we are going to explore a not so common type of investment.  The reason I say that Segregated Funds are a less common type of investment is because they are only offered through Insurance companies.  Segregated Funds are not offered in mass by financial institutions.

Segregated Funds are the perfect balance between a life insurance contract and a mutual fund. They are similar to a mutual fund because Segregated Funds are a pooled investment with a daily valuation.  Investors purchase units of a Segregated Fund just as we do a Mutual Fund.  We invest our money into a Segregated Fund and it is mass managed by a professional fund manager.

Segregated Funds are similar to a life insurance contract because they can offer a guaranteed rate of return or guaranteed value upon maturity. Segregated Funds offer a potential death benefit upon death of the investment owner which is similar to an insurance contract.  Segregated Funds are usually purchased for a fixed number of years with a maturity date; this is similar to a term life insurance policy.

The Benefits of Segregated Funds

Professional Management. The money that we invest into Segregated Funds is actively managed by a professional fund manager.  They buy and sell assets within the fund based on the current market conditions as well as the investment objectives of the Segregated Fund.

Portfolio Diversification. Segregated Funds offer a variety of different types of investments with different levels of risk. Segregated Funds invest in a variety of different assets which can include Income investments such as bonds, Balanced Investments, as well as Equity Investments such as Blue Chip Stocks.

Protection against Creditor Insurance. Segregated Funds are not sizeable for professionals or self employed individuals who may be personally liable for malpractice.

Estate Planning Advantages. The beneficiary of a Segregated Fund receives the benefits directly after the plan owner dies.  Benefits from a Segregated Fund do not need to pass through Probate.  This is a great advantage of Segregated Funds because Probate fees can be very costly.

To Learn More About Segregated Funds

Mackenzie Financial offers a Mackenzie Cundill Canadian Security Segregated Fund, a Mackenzie Cundill Canadian Balanced Segregated Fund, as well as the Mackenzie Cundill Value Segregated Fund as part of their fund line up.

RBC Insurance offers a variety of Segregated Funds such as the RBC Balanced Global Fund, the RBC DS Growth Global Fund, as well as the RBC DS Canadian Focus Fund.

 

The Bad Reputation of Pre Nuptial Agreements is Unfair

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pre-nuptial agreements, misconceptions about pre-nups, bad reputation of pre-nup

People usually give Pre Nuptial Agreements a really bad reputation, but I think that this is undue animosity.  Pre Nuptial Agreements are just like any other business deal; they protect the financial interests of all parties involved, as well as provide security of our individual assets.

Pre Nuptial Agreements reveal the intentions of the two people who are entering into a marriage contract.  Marriage is exactly that, a contract between two people and a Pre Nuptial Agreement is the exact same thing.

I am a big fan of and believer in Pre Nuptial Agreements because they guarantee our money, and ensure that our assets remain ours in case the marriage ever dissolves.  My boyfriend Nick comes from a family with money, and I do not.  If we ever decide to get married I would assume that his parents would encourage me to sign a Pre Nuptial Agreement.  I would have absolutely no problem signing a Pre Nuptial Agreement because that is not my money, nor should it ever be.

I am a strong believer that people are never entitled to something that is not ours.  Nick’s parent’s money is theirs, and someday it may be Nick’s, but it will never be my money.  I don’t understand couples who do not get married because of a Pre Nuptial Agreement, or lack thereof.

People should get married for love or companionship; they should definitely not get married for money. We should enter into a marriage with our own good financial habits, and we should leave a marriage the same way. We should leave a marriage with the same possessions and assets that we brought into it, and nothing more.  We should split the value of joint assets only if they were accumulated together.  I would never expect to give Nick half of my retirement savings, just as I would never expect the right to any of his retirement savings.  We should always treat our money like our marriage; we should cherish the relationship and protect it at the same time.

When people get divorced they shouldn’t be entitled to receive alimony payments. I personally feel that paying alimony to a spouse after a divorce is an unfair expense.  Spousal alimony gives someone the legal right to money that isn’t theirs.  We were an independent financial person before we became a couple, and upon divorce we should return to our original state.

The only time that paying alimony to an ex spouse would be acceptable (in my opinion) is if that spouse is the employer.  In other words, if a spouse stays at home because their job is to take care of the house and kids then they are entitled to some form of compensation.  I feel that a couple should be a 50/50 relationship and therefore each spouse is entitled to earn an income.

I do absolutely believe in child support. If a couple ends in divorce and the children spend the majority of their time with one parent, then the other parent retains financial responsibility for those children.  As a child of divorce I am a strong believer that a child should never suffer because the relationship between their parents ended.  Child support is intended to provide financial assistance for the kids, and it should absolutely be enforced by the law.

 

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