10 Great Ways to Save and Invest

Meet Someone Famous – My personal example is that I met Gary Vaynerchuk at a book signing back when he was promoting his book, “Crush It”. It was incredibly inspiring to meet him, listen to him talk, and get to ask him a few questions. I was on cloud nine for weeks and weeks, full of aspirations and inspired like never before.

Read Books – A recent study found that a majority of millionaires read at least one non-fiction book ever month. If you are a salesman who depends on commissions to make a living, how many books on selling or closing a deal have you read? Finding a great book may be a great way to inspire you. If you are looking for great personal finance books, check out my list of the top ten personal finance books that should be on everyone’s nightstand.

Pay Off A Debt – There are very few things that can inspire someone who is struggling with his finances more than paying off a debt. You can build on your success and turn it into a debt snowball.

Find Someone To Talk To – Do you have a coworker who loves to talk about finances? If you are looking for inspiration to figure out how to finally start investing, maybe you should consider asking that coworker to share some of his or her knowledge with you. Do they have a recommendation for a mutual fund or a discount brokerage.

Read Blogs – One of the biggest reasons bloggers write is to inspire people. How many blogs are you reading? There are some great blogs out there that inspire you to do more, strive for greater things, etc. What are some of your favorites?

Set Goals – Everyone needs goals in their lives, both short-term and long-term ones. You also need goals for your savings and investing. Do you have them? You should set them now that it is a new year.

Plaster Your Goals – Once you have your goals, you should post them all over the place, at your home and at work. I am a big fan of putting my number one goal up on the mirror in my bathroom because I look there first thing every morning. It serves as a great reminder and motivator.

Reward Yourself – Hopefully your goals have smaller sub-steps involved to help you reach your big, ultimate goal in the end. Don’t forget to reward yourself when you reach those smaller goals on your way to the main goal. This will inspire you to keep going and achieve the tough ones.

Teach Friends – Teachers are always one of the first people to point out that if you want to truly know and understand a topic, then you need to teach it to someone. Having to pass on knowledge to someone who is depending on you to be a subject matter expert will quickly make you realize that you need to become that subject matter expert.

Write About It – Are you struggling with your finances? Maybe others around you are struggling to? Have you ever considered starting a blog? Have you ever thought about writing a letter to the editor of your local newspaper? Getting your thoughts down on paper is quite inspiring.

How do you get inspired? Do the same things that inspire you to succeed financially also inspire you to reach your non-financial goals?

Source: www.moneyqanda.com | Hank Coleman

Canadian 30 Year Olds are Screwed

I quite enjoy working with young Canadians on their finances. Often financial advisors refuse to help young people because they don’t have enough money. I don’t look at it that way – at around 30, some of the biggest financial decisions of one’s life are made:
selecting a career, marriage, having children and purchasing a home – for many, the largest financial decisions in their life happen in a pretty tight time window. With so much at stake, making the right structural decisions are vital –for it sets the stage for the rest of your life. Make the wrong decisions and there may be no recovering.

So let me describe my last five years and why I am worried about young people. I feel there are a combination of circumstances that have come together (a perfect storm, so to speak) in recent years to make it almost impossible for young Canadians to get ahead long term. These variables are as follows:

People Spend More Time on the Internet than their Finances

There has been a culture shift in the last 20 years to almost a complete disregard for being responsible with our money. We have all heard about the war and depression era elders who drive their cars for ten years, don’t use credit cards, saved regularly and paid off debt fast. Today’s young even look at these wise old folks as backward, “cheap”
and out of touch. Frankly, it is the young people who are on the road to financial ruin –
today’s attitudes are almost the complete opposite of our grandparents where “put it on
plastic and pay later”, take as much debt as we can get, pay off mortgages over 35 years,
lease cars, $20,000 vacations and $300 shoes or concert tickets is a norm. Since when
does a 16 year old need a $100/month IPhone? Part of this attitude I blame on parents
where, at any income level frankly, the parents give the kid whatever they want –
lucrative allowances with no work behind them or simply jut an attitude of you spend
and daddy & mommy will pay. Unfortunately school budgets (and perhaps priorities)
also leave our high school kids woefully lacking in basic financial knowledge ‐ there are
no courses on how to manage credit cards, how financial institutions work, what a stock
is, when to save for a house deposit, details about disability insurance and so on. After
school, our kids don’t have a clue about basic money management. As one 60 year old
recently told me: “Kurt my 26 year old daughter lives at home with us, only has a part
time job working in a mall, spends $4 every four hours on Latte’s, orders $30 pizza delivery weekly, just came back from a week in Cuba and doesn’t have two dollars in an RRSP, Tax Free Savings
Account or even a basic savings account. Worse she could care less about learning about finances – she is more
concerned about how many friends she has on Facebook”. Folks, these are our young people: you have all seen
them – without the basic common sense around personal finance they eventually turn into 30 year olds that make up
the rest of this story. And then 40 year olds who are swimming in good cash flow (often six figure family incomes)
yet can’t manage an RRSP contribution yearly but are happy to pay a lawn service company $500/year to trim the
shrubs. Education about basic finances should start at 10 years old – take your kids to the instant teller with you
‐ show them how it works and build from there.

I Wish I Had my Grandpa’s Pension – but I Don’t

No one has pensions anymore. When our 80 year old parents worked 30 years ago, most Canadians could count on a sweet defined benefit pension to be waiting for them at retirement at age 55. This guaranteed pension provided a permanent base of cash flow, often inflation indexed as well, alongside CPP and OAS until death. While our parents
didn’t have a lot of money for new cars and big vacations thirty years ago, they did have a fine quality of life and
lived within their means. Today, defined benefit pensions are almost entirely gone – unless you are a teacher, police
offer, nurse or one of the few lucky souls in a couple of big companies that still offer
them. The rest of us have been left to fend for ourselves – either with no pension
plan at all, or a basic group RRSP or defined contribution plan that offers no
guaranteed pension. What you and the company contribute is all there is. This is a
far cry from a defined benefit pension plan and will leave most employees with
shockingly little to live off at age 60 or 65. In 10 years of reviewing DC employer
pension plans I have yet to see a single plan that would provide an exceptional
quality of life in retirement. To make matters worse, most employees in big
companies get no educational planning support around these company savings
plans, and have no clue how bad off they truly are.

Add to this that the typical 30 year old may have six different employers (or careers) due to restlessness or
terminations before they retire – this means that the employee is never anywhere long enough for much pension or
other compensation to accrue. Again, reflect on the past: our parents worked for one employer their entire life,
were extremely loyal and benefited from seniority, unions and growing compensation, pensions and benefits the
longer they were there. Most of that is gone today. It is routine to see 50 year old professionals that have had three
or more employers (so far) and with retirement only ten years away, have little or nothing to show for it financially.

Debt Disaster Cause by Choking Real Estate

People have gone real estate crazy in the last decade as the low cost of mortgages has caused a frenzied market for
the purchase of detached homes, condos, cottages and spurred massive renovations to existing properties. “Starter
homes” in major Canadian cities can cost more than $500,000 today – prices that twenty years ago were considered
only available to the wealthy. Now 30 year old kids making $60,000 a year are getting mortgage approvals to carry
massive mortgages and think nothing about amortizing it over 35 years – ridiculous. Further, thirty five year olds
think nothing about dropping $50,000 on a kitchen upgrade or a bathroom because, after all, it has to be done – we can’t live like this. On top of the monster mortgage, these kids are carrying sometimes six figure lines of credit as well. All these 30 somethings are leveraged to the hilt. No wonder the papers are full of stories of how Canadians now have some of the highest debt levels in the world – I have seen this happen over the last five years – my life has been full of dealing with everyone’s 30 year old kids. The story has been the same every time: recently married or a baby on the way and they want to buy a home. I ask them what they have saved for a deposit – often no more than $10,000 between them both. Perhaps their parents are chipping in some cash. And they want to borrow from their RRSPs through the Home Buyer’s Plan – always a terrible idea – stealing from the longer term goal of retirement.

I pull out my calculator and tell them how much they can afford. Off they
go. A week later I get a call to say they bought a home. Did they stay
within my limit I ask? Well….no, there was a bidding war. I am horrified
to learn that they spent $50,000 more than planned. And that’s before
closing costs and furniture, property taxes, a new roof and a new car to
commute. The stage is set for disaster now. When a couple commits to a
huge mortgage that commits more than one third of their net cash flow to
debt servicing and fixed costs of ownership, the cracks in their life will
start to appear after a few years. Unless they have huge annual incomes,
there may be no extra money for vacations, for renovations, to buy new cars or even basic furniture. Inevitably
these costs end up on lines of credit, adding even more debt, well, because, they have to have it. I have routinely
walked through the homes of couples that are so burdened by big debt that rooms in the home have no furniture.
I know why: there is no money for it. Sometimes this can even lead to divorce.

Interest Rate Ticking Time Bomb

Next is interest rates – Canada is full now of monster levels of mortgage debt for the
average Canadian all financed at floating 1% mortgage rates as Canadians have taken
advantage of the record low rates to buy homes the last few years. So, all the kids with
the mega debt are floating in variable rates at 1%. What happens when (when, not if),
mortgages rates return to traditional levels of 5% to 8% for a five year closed
mortgage? Is this on the horizon? Are we currently the US market three years ago,
slowly heading towards real estate disaster in Canada? Will mortgage rate resets over
the next several years cause mortgage payments to balloon, young couples to declare
bankruptcy as they crumble under the weight of debt and bring our tiny real estate market crashing down to levels never seen before? Never happen right? Let’s hope not.

Not Much Changes at Age 40

Since you left high school and could enter the work force, age 40 is the half way point up the hill towards potential
retirement at age 60. You have already spent 20 years building wealth and what do you have to show for it?

If these 30 year olds do survive the first few years of mega debt levels, what about the long term? Ten years later at
age 40, with so much money going from every pay cheque into mortgage payments, car lease payments and credit
card payments, 40 year olds are often woefully behind in savings for their children (RESPs) behind in their RRSP savings and likely don’t have a dollar in Tax Free Savings Accounts yet.

The Kids Go To College Before You Retire

Let’s start with the kid’s savings – if you had kids around age 30, the kids are now heading to university in only ten
years when the parents are 50 years old. With the cost of four years of university easily approaching $100,000 per
child in 2011, failing to put gobs of money away for the full 18 years of the child’s life could see parents buried under
new debt, school debt, at age 50. You need to be mortgage free by age 50, 55 at the
latest, to create extra cash flow to help the kids through school. That’s why 25, 30
and 35 year mortgages are insane. Twenty years max – or don’t buy the place
because you can’t afford it. If you have any plans to retire around age 60, you need
that last ten years to be putting money into savings during what is supposed to be
the big income years of your life. But if you float through your 50’s paying for the
three major financial goals of paying off debt, retirement savings and kid’s education,
I fear that on a regular wage you won’t be retiring at age 60 – not even close. And, if
you had your kids later in life like many are today, don’t plan on retiring until they
are through post secondary school. That’s a good general rule to follow – not too many folks can afford $10,000 tuition fees on a retiree’s income.

What Do You Need for Retirement?

At age 40, with retirement ideally only 20 years away, you need to save a good $1.5 million dollars quickly. Had you
started at 22 and put the $4 Latte money (and more) into a new RRSP, savings at age 40 would have you well down
the road to proper retirement savings by now. But now, only starting to focus on retirement savings at age 40 is
almost certain doom unless you start to save massive amounts fast and yearly without fail. Even twenty years out
from retirement we are in the homestretch already – there is not even enough time to benefit from the compound‐
ing impact of savings. Add to this that bond yields are at record lows (around 2% for a one year GIC currently,
March 2011) and the new stock market seems to have a major correction every five years, and you need to save
even more than you thought. A lot more.

At 40, with career developing, family established and home purchased, now is the time to buckle down and save for
your financial goals – it is not the time to do a kitchen renovation or buy a second residence. You can retire on plan
but it requires disciplined savings – tying up more money in real estate that I don’t believe you will ever sell or downsize doesn’t help us with your retirement needs. And be careful: planning to work until you are 70 is not the
easy answer either – sure, you can plan to work but a stroke, heart attack or even a car accident can retire you early.
Without proper savings in place, a premature retirement due to illness may leave you with 40 years of a less than ideal quality of life. Practically, we all need to strive to have our financial savings in place by age 60 and work because we want pocket change beyond that, not because we need to work. If you don’t have your core savings levels reached by age 60 and must work to eat, then back up your income by top notch disability and/or critical illness insurance until you do retire.

Waking Up 50 One Day And Getting the Deer in the Headlights Look

Age 50 in Canada is an interesting age today. I do more financial planning for 50 year olds
than any other age. It’s like they woke up one day and a light went off – that after 20 years
of working hard, raising a family and paying off a home they pop their head up and realize
they don’t know where they are. The three major finance issues are suddenly converging
all at once: they are supposed to be mortgage free at age 50, the kids are starting university
next fall and $10,000 of tuition is due now and lastly they realize retirement is supposed to
be ten years away. Holy smoke – all at once. Welcome to age 50. Are you prepared? So in
my practice we prepare a financial plan based on their goals and show them how to achieve
all three major financial needs. Today’s 50 year old will make it – they are the last
generation to get in before the big mortgages hit and they may still get inheritances from
their financially responsible, recession era parents who will die in the next 20 years,
providing money for their retirement thankfully. It’s today’s 30 year olds who will be 50 in
twenty years that are screwed. With little hope of being debt free in 20 years, with a bad
attitude towards savings and debt elimination, with rising costs of children’s education, no
pensions coming, frequent career change, wild stock markets, record low interest rates and longer and longer life with rising health care costs, today’s 30 year olds need to win the lotto to have a hope of achieving their financial retirement as culturally expected in Canada. Working to age 70, albeit part time, may become the norm for many in the next twenty years.

There Is Hope

It doesn’t have to end up this way. Having your cake and eating it too is possible with a bit of fiscal responsibility
starting now – and keeping it in check forever:

Massively limit what you invest in your home. You cannot afford to pay big mortgages for decades. You need to get
debt free fast (by age 50) and move onto the other goals of saving for kids and your retirement. Do not buy bigger
homes. Do not do big renovations. Do not purchase second recreational properties. I am ok with a rental property
as it will contribute to your finances long term. The average Canadian family without pensions cannot afford big
real estate investments and hope to achieve their other goals ‐ plain and simple.

Select employers and careers that offer defined benefit pensions. Ok, this is far fetched, but having the employer
taking care of your retirement savings is a huge weight off your back and allows you to focus on children’s savings
and debt elimination. You may be more likely to achieve all your goals if the most expensive one of all, retirement, is
taken care of by your employer.

Save more – what is remarkable is the number of people I see that have six figure
annual incomes and little or no savings. We all have the ability to save and pay down
debt faster, but we have to want to do it. This all can end up well, if you want it to. I
see families of four living successfully in expensive Toronto off $50,000 a year. I see
folks earning $150,000 a year who cannot save $10,000. Set some rules for savings
and stick to them. No matter what.

Plan to live off less in retirement. I don’t recommend this but it is an option. It is
hard to do because people are living longer and it is getting more and more expensive
to live. Look at how gas prices change day to day – who knows what it may cost to
live forty years from now –plan on living to age 100 ‐ likely one spouse might – it just
may happen and you don’t want to be broke. It bugs me when I read the news and see
so‐called experts telling readers that you don’t need to have a lot of money to retire.
I agree, you don’t. We can move you up to northern Ontario where you can buy a home for $50,000, play cards all
winter, never buy new clothes, a new car or take an out of province vacation. Sure, we can all do that. But in today’s modern age of “me, me, me, buy, buy, buy, want more, want more, want more, who wants to live like that? And there’s the rub: people today want to take big vacations, they want the latest IPad, they want HD cable and a smart phone – all of this costs money. No one wants to live like his or her parents did 30 years ago. Today we all want nice things, always. Well, nice things cost a lot of money – money you don’t have if you don’t follow the rules in this article.

Work longer. Ok, here’s a happy spin on working past the traditional retirement ages of 60 or 65. Plan to work to age 70. But work part time. Do something you love. Limit the commute. Take summers off. You will never regret the freedom you will have – freedom to spend at will, freedom to travel, freedom to help the kids out and freedom to join the country club. But work by your rules and do it longer. If you don’t do this, you’ll have to work by my rules in retirement: a strict budget, where I review your costs and have to approve what you spend. You don’t want this. You don’t want to have to tell your spouse at age 72 there isn’t enough money to winter in Florida this year. You don’t want to have to look at your investment portfolio everyday and wonder if there will be enough. Plan ahead.

Don’t let this be you.

Final Thoughts

In closing, I saw an ad recently that showed that Canadians spend ten times (more actually) more time watching videos on line than they do looking at their finances in a year. In many ways, that really sums up this article and my concerns for today’s 25, 30 and 35 year olds. The solutions are at hand – it comes down to how you play your cards. Look at yourself right now: today, in your career, while the money is flowing, life is good, and it seems like it always will be. You really deserve that week in Barbados and retirement savings can start next year. One more thing on the credit card Kurt, and then I promise I’ll be good.

Living for the short term and then you wake up one day and you are 40 and still living this way with little savings and a lot of debt is showing the signs of problems raised in this article and sadly, possibly creating the potential to not reach your financial goals and dreams long term. Get a financial plan. Establish short term, medium term and long term goals. Write it all down. Implement strategies. Follow up. Measure progress. Adjust the plan. Repeat year after year. Use a financial planner to keep the plan objective and non‐emotional. Good luck Canada.

Source: Kurt Rosentreter, CA, CFP is a Senior Financial Advisor with Manulife Securities Incorporated in Toronto, a Chartered Accountant and national best selling author on personal finance in Canada.

40+? What is most important to you?

What do you do?

You need to figure this out. Your behavior is driven by what you do and more importantly who you are. This starts with a deep analysis of who you are and what is most important to you. Since most of your waking days are spent working, what you do will determine who you are.

What work is most important to you?

Have you thought about this? What is the work that fits you best? What is the work that best aligns your abilities and your interests?

What kind of work gives you a sense of fulfillment and meaning? This is another question no one will ask you at your job today.

You need to figure this out for yourself.
What kind of work culture fits you best?
Do you want to teach? Then work around teachers.
Do you want to design? Then work around engineers.
Do you want to build? Then work around builders.

Design an environment to fit YOU

Many studies have shown that the best work environments include fresh air, windows, soft colors, individualized music, climate controls, cushy chairs and so on. So why do we spend our lives in gray, faceless cubicles with walls that can’t even support hanging pictures of our loved ones? Windows and fresh air are nowhere to be found or have to be earned!

Do you yearn to work in a big building in the city or a small cottage in the country? Do you want to work inside or outdoors? Do you want to work by yourself, with a small group of people or with a large group? Are you an early riser or do you prefer to ease into your day?

Make a list

Start by listing the details that are most important to you in your life.

Write down how you will know when you are following what is most important to you and how you will know when you’re not. With this list in mind you can begin to design short and long term goals that align with what is most important to you.

Your work determines who you are

So many people come to me stuck in a vocational rut. They soon discover that the work they have been doing all their lives no longer fits their self-image and what is most important to them.

I had a friend once who was a painter. He took a day job processing paperwork for an insurance firm to pay the rent. He told me later he came home too exhausted to paint and soon realized he had become an insurance clerk.

So many possibilities for you

There are so many possibilities for you. What bothers you most about the world? What you would like to change? What change do you most want to see in the world, your country, your city, your neighborhood?

You CAN do the work best suited to making changes you want to see but you must start thinking in new possibilities.

What is possible right now?

As you think about the work you are most passionate about, what is possible right now? Be careful—your life is determined by what you do.

Your sense of happiness and your self-worth affect the quality of your life each and every day.

There are no shortcuts to vocational passion.

Retirement is the biggest myth of all

The only people who retire are those who don’t love what they do. If you did what YOU loved each and every day, why would you ever want to stop?

Mid-life is a time to narrow the choices

With the best part of your life remaining, now is the time to focus on what is truly most important to you and what work you are most passionate about.

There is no time to waste

After forty, there is a greater sense of the movement of time and the need to make the best use of it. You have no time to waste on activities that have no meaning to you, especially in your work.

What about the money?

No more excuses. You have a choice right now. You can fill your days with work that lacks meaning and happiness or you can decide NOW to close the gap between what you are doing now and the work you most want to do and are most passionate about.

Life can be rich without the money!

To truly experience a rich life, you must decide NOW to focus on what is most important to you and to take action to move towards it.

The six secret steps to reach your goal (in this order) are:

1. Envision it
2. Write it down
3. Talk to others
4. Take small steps daily towards doing what you love
5. Measure your progress and self-correct your path as you go
6. Reward yourself daily

Your life is a journey

Take the path that seems most interesting, most fun and most meaningful and you’ll never look back. Besides, you will live a richer life and become a wonderful role model for others.

Source: simplysearch4it.com | Craig Nathanson

Green jobs for $30/Hour

Below is a list of well-paid, green gigs with their median annual salary:

1. Regional sales manager.
When companies create new, more energy-efficient products, it’s critical that these products are accepted by customers, says Jim Cassio, career consultant and co-author of “Green Careers: Choosing Work for a Sustainable Future, and the Green Careers Resource Guide.” Sales managers for environmentally conscious companies make sure better products reach their target audience. With stimulus funds going to research and development of more energy-efficient goods, particularly in batteries, growth is expected in green sales-manager jobs, says Cassio.

Regional sales managers oversee sales within an entire territory, often supervising a sales team, providing training and guidance. Many are experienced sales reps who’ve worked their way up to this supervisory post.

Regional sales manager: $87,200 per year / $42 per hour

2. Environmental engineer.
This engineering specialty focuses on developing solutions for better water and air quality, says Laurence Shatkin, author of “200 Best Jobs for Renewing America.” Other fields for environmental engineers include recycling, waste disposal and environmental cleanup. With stimulus funding for many of these areas, demand for environmental engineers is expected to rise, Shatkin predicts.

Most engineers have a bachelor’s degree in engineering from a four-year institution, and participate in continuing education or graduate school to deepen their knowledge or a specialty or learn about emerging best practices in the field. Much of the work ahead, Shatkin notes, will involve devising solutions to clean up nuclear sites left over from World War II.

Environmental engineer: $68,600 per year / $33 per hour

3. Computer systems analyst.
Without systems analysts, Shatkin says, “We’ll never have a smart [electric] grid.” Technological savvy will be needed to design systems that will allow electric transmission systems and broadband networks to operate with greater energy efficiency.

Demand is so great for this IT expertise that the Bureau of Labor Statistics forecasts nearly 50 percent growth in the field from 2006-2016, despite the fact that the existing labor force for this job is unusually young, with few analysts nearing retirement age. Most analysts have a four-year degree in computer science, information science, or management information systems.

Operating systems analyst: $63,000 per year / $30 per hour

4. Urban/regional planner.
Urban and regional planners have a chance to dramatically impact the landscapes under their jurisdictions, says Shatkin. They aid governments in designing and locating schools, roads, and other infrastructure in a city or rural area, with an eye to minimizing environmental impact. They can also design zoning codes to help support environmental goals.

Schooling is rigorous — even entry-level jobs with state, federal or municipal agencies require a master’s degree in urban or regional planning or a similar field. As regulations grow more complex for meeting environmental requirements, more urban planners will be needed, he adds.

Urban/regional planner: $60,600 per year / $29 per hour

5. Hydrologist.
This scientific specialty centers on using your knowledge of geology to locate and study bodies of water and suggests methods for keeping it pure, says Shatkin. Hydrologists use advanced techniques and instruments to assess water quality.

Many work for consulting firms and are often hired to solve water pollution, flooding or other water problems. Entry-level positions may be filled with candidates with a bachelor’s degree in hydrologic science.

Hydrologist: $68,100 per year / $33 per hour

6. Construction project manager.
A great move-up job for workers with construction experience, project managers coordinate and oversee large construction projects. The field of construction management is becoming one where environmental concerns play an increasing role, says Shatkin.

“They’re using recycled materials in building new buildings,” he says, “and then recycling the old building.”

Construction project manager: $68,000 per year / $33 per hour

7. Nonprofit executive director.
This job recently topped a list of the Top 25 Green Dream Jobs compiled by Cassio and Rona Fried, CEO of SustainableBusiness.com. Chief executives at an environmental charity or advocacy group have the opportunity to shape their groups’ agenda, organizing their constituencies to improve the environment, preserve land or ocean habitat, or change environmental laws. It’s a chance to use managerial, marketing, and media skills for green ends, notes Cassio.

At smaller organizations, volunteers may move up into this paying position, while larger nonprofits expect professionally trained executive directors who often have a graduate degree in either business administration, public administration, or nonprofit management.

Nonprofit executive director: $60,000 per year / $29 per hour

Source: Yahoo.com

Top 2 Stocks For Cashing In On Obama’s Stimulus Plan

While the politics behind President Obama’s stimulus plan are debatable…

The potential for making money from this rare $787 billion investment in America is undeniable.

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And this may be your one-time chance to invest in the companies that could see their revenues soar once the stimulus money rolls in…

But a quick word of warning — not all stocks will go up in the months and years ahead. There will be some big names that never recover from this downturn…

Just as the brutal bear market of 1973-74 sounded the death knell for many darling stocks of the day, like Bethlehem Steel and Johns-Mansville…

At the same time that it set the stage for historic run-ups by a handful of companies like Radio Shack (a gain of 1,557% between 1978 and 1983!) and Wal-Mart (a 1,900% surge from 1973 to 1983!).

The bottom line in all this: You can make a very profitable decision right now. By striking at this rare historical moment, you could build for yourself and your family a comfortable lining of wealth.

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And by 2010, Americans will be faithfully handing over $2.6 trillion each year to companies in this industry. Discover how you can profit from this phenomenon…

Overhauling The U.S. Healthcare System

How about a quick quiz to test your healthcare know-how? Pencils, everyone:

1. Approximately what percentage of the U.S. population is uninsured?
1. 1%
2. 5%
3. 15%

Answer: C. The Census Bureau estimates that some 46 million Americans were uninsured in 2007.

2. In 2004 (the year for which the most recent data are available), which location had the lowest infant mortality rate?
1. Cuba
2. Detroit, Mich.
3. Russia

Answer: A. Cuba’s infant mortality rate was 5.8 per 1,000 births, compared with Russia’s 11.5 and Detroit’s 15.5.

3. Which product does Starbucks [Nasdaq: SBUX] spend more money on?
1. Coffee beans
2. Health insurance for employees

Answer: B.

You don’t have to be a neurosurgeon to realize that something seems awry here. When a nation spends more than $2 trillion a year (roughly 16% of the gross domestic product) on health expenditures yet has a healthcare system ranked 37th in performance in the world, according to the World Health Organization, or when “a doctor… can get more data on the starting third baseman on his fantasy baseball team than on the effectiveness of life-and-death medical procedures” — as stated in a New York Times op-ed — something certainly needs revamping.

To bring America’s health care up to speed, the government is investing more than $140 billion into the sector. Some of the money will update the industry’s technological capabilities, some will fund research, and the remainder will increase Medicare and Medicaid budgets. One company clearly stands to benefit: UnitedHealth Group [NYSE: UNH], the country’s largest provider of health care services.

UnitedHealth operates with four divisions, but the bulk of its business ($75.9 billion, out of $81.2 billion in revenue during 2008) comes from its health care services segment. It provides both fee-based and traditional risk-based coverage to small and midsize companies as well as to families and individuals. Under the fee-based plans, UnitedHealth simply acts as an intermediary, collecting fees for administering the plan and leaving insurers with the potential risks of higher costs. With risk-based coverage, UnitedHealth collects monthly premiums that are ideally 15% to 20% higher than the costs it will pay out in claims.

Government-sponsored health plans like Medicare and Medicaid also fall into this division. For these, UnitedHealth bids on contracts from the government and manages the program with the government’s funds. The size of UnitedHealth’s network gives it a competitive edge when bidding for these plans, meaning it’s likely to receive the bulk of the money coming from the stimulus plan.

And then there’s Obama’s campaign promise of universal health care. Bruce Berkowitz, founder of Fairholme Capital Management and manager of the Fairholme Fund [FAIRX], which owns nearly 1.5% of UnitedHealth’s outstanding shares, believes that if this promise comes to fruition, the government could only accomplish it in one way: by using the managed health care companies, of which UnitedHealth is the largest.

Its current share price more than accounts for the possible risks, meaning we believe there is significant value to be found, with high potential reward. This investment is exactly what the doctor ordered.

Our next company is smack-dab in the momentous effort to rebuild America’s transportation infrastructure. Find out the name of the company that’s in the perfect position to cash in…

Rebuilding America’s Highways

Any driver knows that our roads could use some TLC. But just how bad are they?

According to the American Society of Civil Engineers, more than a quarter of our nation’s bridges “are either structurally deficient or functionally obsolete.” As for our roads, we “spend 4.2 billion hours a year stuck in traffic,” sucking some $78 billion out of our economy. Not only does this cause unnecessary damage to our cars, but these road conditions lead to 14,000 deaths a year.

Over the past two decades, as government spending skyrocketed to historic highs, infrastructure spending has plummeted to record lows.

So to bring our roads up to speed, the stimulus plan is slated to invest nearly $30 billion in our highways and bridges, which alone should help create more than 500,000 new jobs. It should also fuel economic growth because, as Gov. Arnold Schwarzenegger of California recently put it, “The faster we can move people and goods, the stronger our economy is.” Some have estimated that every $1 invested into highways generates $5.40 in economic benefits.

Vulcan Materials [NYSE: VMC] is one company whose products will see a significant spike in demand as our roads are revamped. According to company data, Vulcan is the nation’s largest producer of aggregates (think crushed stone, sand, and gravel), a top-five asphalt producer, and a top-10 concrete producer, operating with a strategically significant coast-to-coast distribution network.

About 20% of the company’s revenue comes from the residential market. Growth here will likely stay slow until the housing market recovers — but the overwhelming majority of Vulcan’s revenue comes from public projects such as highways, so the increased demand in this area should more than compensate for the residential slowdown.

This company has an enormously wide moat, with assets that are not easy to come by, making Vulcan a dominant player in a high-demand industry today. It’s trading more than 40% below our estimated intrinsic value, with a 3.8% dividend — now is as good a time as any to buy stock.

Next up is the smartest way to cash in on the coming “Green Energy” boom. Find out its name and ticker symbol…

The Smart Way to Invest in Green Energy

We’re willing to bet the phrase “energy-independent America” was one of the most-used taglines of both Senator McCain’s and President Obama’s campaigns. But it hasn’t disappeared — it just made an appearance in the economic stimulus plan, with nearly $79 billion allocated to this initiative in the form of tax credits, grants, and dedicated research.

Despite many experts claiming to know whether it will be specifically wind power or biofuels that ignite a green revolution, there is simply too much uncertainty and too many unknown variables to discern which technology will emerge as the most profitable. Not to mention that no green energy company has yet to dig a wide moat — heck, many aren’t even profitable at all.

But that’s not to say you should avoid this emerging sector in its entirety.

Rather, we think that if you want exposure, it makes the most sense to not put all your green eggs in one basket. That’s why we think an inexpensive ETF like PowerShares WilderHill Clean Energy [NYSE: PBW] is the smartest way to go if you want to profit from green technology.

This ETF has positions in roughly 50 clean-energy names with business models ranging from manufacturing green-friendly auto parts to manufacturing solar energy equipment. Most of its positions are in small caps, with the weighted average market capitalization clocking in at just $2.3 billion. Even though the portfolio is relatively diverse, an investment in this ETF will likely be volatile. We certainly wouldn’t recommend overweighting your allocation here, but long term it’s sure to be a winner.

But if all this government spending has you worried about inflation, discover an investment that will help you protect your nest egg…

Inflation-Proof Your Portfolio

The stimulus plan’s passage brings the total price tag of the government’s intervention to an astonishing $9.7 trillion. Two Bloomberg columnists calculated that that’s would be enough to pay off more than 90% of America’s mortgages.

That many dollars added into the economic system, coupled with rock-bottom interest rates, means one thing is certain: Inflation is a-comin’.

Knowing that it’s inevitable, we have one final investment recommendation that will counteract the effect inflation could have on your portfolio over the long term: Vanguard Inflation-Protected Securities [VIPSX].

This mutual fund is a cheap and easy way to get access to Treasury Inflation-Protected Securities, or TIPS as they’re known in the bond world. The principal on TIPS is adjusted upward as inflation rises (likewise, it falls during deflationary periods), so your interest payments similarly rise with inflation (or fall with deflation). With inflation on the horizon, this is a smart way to ensure that a portion of your portfolio will keep up with it. It makes sense to have a significant portion of your bond allocation in TIPS, especially if you’re in or nearing retirement, and this Vanguard fund is the cheapest one out there to help you do so.
What to Do Now

There you have it — our five best ideas for how to profit from this momentous economic stimulus package, all arising from our in-depth analysis and independent research.

Truth be told, the same holds true for all the stocks recommended in Motley Fool Inside Value, the investment advisory service behind our top picks: Sprint Nextel, UnitedHealth Group, and Vulcan Materials.

But it doesn’t have to stop there. The Motley Fool just put the finishing touches on its brand new premium report highlighting the very best small-cap stocks, selected for you by some of the nation’s top independent equity analysts.

Source: fool.com

So if you’re looking for ways to accelerate your retirement, here’s how you can move the date of your retirement party up a few years:

1. Add cash.
Yes, it takes money to make money. So the first step in starting and growing your retirement nest egg is finding ways to get more cash into your retirement accounts.

When times are tight, saving more can be a tall order. But you may get some help. If your employer offers a matching contribution to your 401(k) plan, you might double those extra savings. Similarly, Uncle Sam offers benefits in the form of deductions for contributions to 401(k) plans and traditional IRAs, as well as tax credits for low- and middle-income taxpayers who contribute to IRAs.

It takes a little more than $550 per month in savings, earning a 7% return, to get to $1 million over the course of a 35-year career. But if you can add just $100 per month to that — including what your employer puts in and your tax savings — you can cut more than two years off your wait.

2. Embrace stocks.
Saving more is great, but there’s only so much you’ll be able to put aside. You have to make the most of what you have.

People are often too conservative in their retirement investments. Despite the sometimes violent ups and downs of the stock market, the long-term return on stocks far exceeds that of less risky investments like bonds and bank savings accounts. If you have all your money in cash, you won’t lose a penny — but you’re lucky to make 1%-2% right now. Even target funds and other balanced retirement options have sizable portions of their assets in bonds.

A 7% return is a reasonable average for a portfolio that has slightly more in bonds than in stocks. But throughout most of your career, you can afford to take more risk. Owning more stock could raise that return to 9%, lopping off almost five more years from your target.

3. Hit for the fences.
If you only want to match the S&P 500, buying index funds is easy. To get higher returns, however, you’ll have to find stocks that will outperform the index. Here are some examples from the past 20 years:

Those stocks have done particularly well, especially given how badly stocks have done since 2000. But you don’t have to belt all your picks out of the park to retire sooner. If you can eke out just another couple of percentage points on your average return — boosting it to 11% — then that’ll cut another 3 1/2 years off your target.

4. Become a cheapskate.
So far, we’ve only looked at half of the story. How much you spend plays just as important a role in retirement as how much you save. And while many expenses go away when you stop working, new ones quickly take their place — things like travel, entertainment, hobbies, and medical care.

But you have a lot of control over many of these expenses. If it’s worth it to you to spend less in retirement, you won’t have to save as much before you retire. Cutting 10% off your spending means you’ll get to your smaller goal a year earlier.

All in all, combining these four simple tips can let you retire as much as a decade or more sooner than you otherwise would. That thought just might be enough to make even a bad day at work seem brighter.

Source: Fool.com

Investing Lessons from the Poker Table

I hate to disappoint, but I’m not going to stick my neck in the middle of that debate.

But whether we agree that investing and gambling are similar, there are some general ideas from the game of poker that can be adapted quite well for investing. And, heck, if there’s the possibility that it’ll make you a better investor, is it worth fretting about the source?

Lesson 1: You don’t have to play every hand
One of the quickest ways to make your chip stack disappear in poker is to blindly play every hand dealt to you. In a 10-player Texas Hold ‘em game, you’re only forced to bet 20% of the time, and even then they’re only small bets. You can throw away every other hand that’s dealt to you if you want, and it won’t cost you a dime.

But why would you throw away any cards? Well, a two of diamonds and a six of clubs can theoretically become a full house, but you start out with the odds stacked heavily against you when you play a hand like that. Waiting for something like a pair of kings or a queen and jack of spades gives you a much better chance of seeing a return on the money that you’re wagering.

The same holds true for investing. There’s a possibility that CIT Group (NYSE: CIT) could magically avoid bankruptcy and return a bonanza for shareholders. Or Sirius XM Radio (Nasdaq: SIRI) could finally prove the critics wrong, start posting huge profits, and watch its stock fly. But let’s face it, both are long shots, and if you’re looking for solid, predictable returns to build a retirement nest egg, throwing piles of money at either stock is probably not the best idea.

On the flip side, companies like Pfizer (NYSE: PFE) and Honeywell (NYSE: HON) positively ooze predictability and solid returns over the long run. Investing in companies like these — assuming you’re paying a fair price — simply gives shareholders a much higher probability of seeing returns from their investment. And, heck, investors don’t even have to wait for rewards since both currently pay dividends that exceed the yield on 10-year U.S. Treasuries.

Lesson 2: Play your cards right
Kenny Rogers immortalized yet another lesson that we can take from poker when he sang: “You got to know when to hold ‘em / know when to fold ‘em / know when to walk away / and know when to run.”

In both poker and investing, you’re faced with continually changing information. The best poker players and investors are those who not only make the most accurate analysis of the available information, but use that analysis to drive good decision making, whether that’s — in investing — buying, selling, or just sitting tight.

IBM (NYSE: IBM) is a great example of the constantly changing tides that investors can take advantage of. The company had one of the truly great growth stocks in its early years and delivered impressive gains. But not all that long ago it faced some major challenges as the PC market commoditized and its bread-and-butter mainframe market turned into a sleepy niche.

More recently, IBM has found a new life in transitioning to offering higher-margin software and services. Just like recognizing when you have a possible straight flush developing and betting accordingly, investors who figured out what was going on at IBM and invested accordingly have been handsomely rewarded. Over the past five years, its stock has substantially outperformed the S&P index.

Lesson 3: Be choosy with your “all-in” moments
It’s certainly exciting to watch a poker pro push all of his chips into the middle of the table and call “all in.” But it’s important to remember that top-notch players have run through a bunch of mental math to determine that the odds are heavily in their favor when they make a call like that.

Having all of your money invested at all times can be one of the easiest ways to go about investing, but it can also put you at a disadvantage. Not only will you absorb the full brunt of declines such as the one we’ve been living through, but it also leaves you with very little dry powder to invest when stocks do fall. However, with just a little more activity and attention, investors can keep an eye on stock valuations and adjust how much they have invested based on how pricey the market is.

If your all-in moments are restricted to times when the market is trading near or below its long-term average valuation, then you can shift the odds of market-beating returns further in your favor. Fortunately, there are many great tools available for tracking the overall market’s valuation, including my favorite, professor Robert Shiller’s 10-year average P/E spreadsheet.

When it comes to individual stocks, though, the picture is a little bit different. Although elite investors like Berkshire Hathaway’s (NYSE: BRK-A) Warren Buffett can make comments about being willing to go all in on Wells Fargo (NYSE: WFC), most mere mortals are best served by avoiding an all-in call — having their entire portfolio — on a single stock.

Putting away the cards
While having a working knowledge of poker might help bring some of the lessons above to life, you don’t have to ever play a single hand to put them to work. To review, here are three of the investing lessons that we can take from the poker table:

1. Wait for the best investment opportunities — there’s no harm in passing on a stock if you aren’t convinced that it’s a worthwhile investment.
2. Always be on top of new information and be willing to take action when necessary.
3. Going “all in” in your portfolio should be reserved for when market factors are highly attractive.

You can take these three lessons and start putting them to use right now.

Source: Fool.com

How about a credit card that gives cash rebates?

You can book your own flights during seat sales, often a better deal than using the card.

There’s nothing worse than waiting years to collect points for a airline ticket, only to find you still have to pay hefty taxes and surcharges. If you have points piling up, you may be happier with cash rebates paid once a year that you can use to buy anything you like.

There are more cashback credit cards on the Canadian market than ever before. Let’s start with no-fee or low-fee cards.

The CIBC Dividend Card has three tiers of rebates. You get 0.25 per cent on net annual purchases up to $1,500, 0.5 per cent up to $3,000 and 1 per cent over $3,000.

Scotiabank’s Moneyback Visa card has the same three tiers of rebates. It has an $8 annual fee, but gives you an 18.59 per cent interest rate (lower than CIBC’s 19.5 per cent).

The TD Rebate Visa suits low spenders. It has just two tiers: 0.5 per cent on purchases under $3,000 a year and 1 per cent above that (up to $25,000 a year).

RBC’s no-fee Rewards Visa Gold and Rewards Visa Classic cards give you financial rewards. You can pay down an RBC mortgage, loan or line of credit, or contribute to a registered retirement savings plan or education savings plan.

Financial rewards are popular, accounting for 18 per cent of total gift certificate redemptions, says RBC spokeswoman Jackie Braden. People like to pay themselves first and get related tax benefits or grants.

BMO has a no-fee cashback reward option on its Mosaik MasterCard, giving 0.5 per cent on purchases and 1.5 per cent at Shell gas stations. (With the premium cashback option at $49 a year, you get 1 per cent on purchases and 2 per cent at Shell.)

Monty Loree, a blogger who writes about credit at www.canadian-money-advisor.ca, helped me find other cashback cards that looked enticing.

Citizen’s Bank lets you earn points for its financial products. It donates 10 cents to non-profit initiatives worldwide each time you use the card.

At a cost of $45 a year, Citizen’s My Visa Rewards Plus card has a low interest rate of 11.25 per cent.

Capital One’s Cash Back Platinum Plus MasterCard, aimed at big spenders, gives you 1 per cent on purchases up to $10,000, 1.5 per cent up to $20,000 and 2 per cent on $20,000 or more.

It has a $59 annual fee and a variable interest rate of prime plus 15.05 per cent (equal to 19.8 per cent right now).

MBNA’s Premier Rewards Platinum Plus MasterCard gives you a 1 per cent rebate on all purchases with no limits. The annual fee is $29.

Finally, American Express has a Costco cash rebate card with three tiers: 0.25 per cent on the first $2,000, 0.5 per cent on the next $3,000 and 1.5 per cent on any amount over $5,000.

The maximum rebate is $500 a year, which requires $37,000 in spending.

While the Amex card is free, you have to pay for a Costco membership every year ($50). It’s the only credit card accepted by Costco stores. You can juice up your rebate by an extra 0.5 per cent when you carry a balance on the card.

Source: Thestar.com

We feel your pain. So let us reassure you. Despite what you may think, there is a lot of good news about retirement. We’ve talked to a wide-ranging selection of financial experts and we’ve come away with one conclusion — you’re doing far better than you think you are. Join us as we reveal 10 things that most people don’t know about retirement, but should.

1. You’re not behind at all
The ads make it sound as if 55 is a reasonable retirement age. In fact, for most of us it’s not. The median retirement age in Canada is 62 for men and 61 for women, according to Statistics Canada. Who does retire early? By and large, federal government employees, who ditch work at a median age of 58. You can credit their early departures to generous pensions that are indexed for inflation. But even public-sector employees aren’t hanging up their work clothes at 55.

If you look at the math behind retirement, you can see why most of us stick around the office a bit longer than we might like. For every year early that you retire, you pay three penalties: you lose a year of potential savings, you lose a year of growth for your retirement savings, and you gain one more year of retirement expenses.

Consider a woman who hits 55 in good financial shape, with a paid-off condo and $100,000 in savings. She can count on her savings to produce $4,000 or $5,000 a year in returns, but she’s too young to start collecting Old Age Security or Canada Pension Plan. Unless she resorts to desperate measures, such as selling her condo or burning through her savings, retirement is impractical.

But look at what a difference five years can make. If she buckles down and contributes $10,000 a year to her retirement fund during that period, and achieves a 7% annual average return, her savings double to $200,000. That bankroll can generate $8,000 to $10,000 a year in income as long as she lives. At 60, she can also start collecting Canada Pension Plan. If she combines those sources of income with part-time work, a phased-in retirement becomes quite practical.

2. You’ll live longer than you expect
When we’re doing our retirement planning, many of us figure that we’ll live to 80, the average lifespan in Canada. But that average is misleading. It reflects what a newborn baby can expect in the way of lifespan and is dragged down by all the unfortunate people who die relatively young.

If you’ve managed to reach 65 without suffering a terminal illness, you’ll probably live considerably beyond 80. According to StatsCan, a 65-year-old man can expect to live to 83; a 65-year-old woman can look forward to blowing out the candles on her 86th birthday.

And remember — those are averages. Half of retirees live longer, some much longer. Moshe Milevsky, an associate professor of finance at Toronto’s Schulich School of Business at York University, says there is a 41% chance that at least one member of a 65-year-old couple will live to 90. So even if you don’t quit work until 65, there’s a good chance that your retirement could still wind up spanning a quarter or more of your life.

3. You’ll see more of your partner — a lot more
Sure, you love your spouse, but let’s do a little math here. Chances are, for most of your married life at least one of you has worked outside the home. Subtract sleep, travel time and other away time and you’ve seen your beloved for — at most — six hours a day.

In retirement, that figure can easily double. And continued exposure can cause even happy couples to bicker. Fred and Janet Barnes (not their real names) retired to Dickey Lake, Ont., to renovate a cottage after living in and around Toronto for most of their lives. “His perfectionism drove me a little crazy,” says Janet. “My slapdash methods were hard for Fred to take.” The Barneses eventually figured out ways to divide the work so they wouldn’t get on each other’s nerves.

Other retired couples strike different bargains — maybe the kitchen becomes her territory, while the garage becomes his — but whatever the specifics of the deal may be, the important point is to realize that retirement is not just a financial journey. It’s also an emotional odyssey and you should plan ahead to make the most of it.

Beginning in your 50s, you should start thinking about the activities that will fill your day in retirement. “You’re going to need to stay connected,” says Dr. Randy Swedburg, chair of the applied human sciences department at Concordia University in Montreal. Your many options include going back to school, giving your time to charity, or starting your own business.

4. A part-time job is worth $400,000 in the bank
If your retirement savings are a bit smaller than you had hoped, take heart — a part-time job in retirement can go a long way toward making up for an undersized portfolio.

Let’s say that you can make $20,000 a year from your part-time job. That is about what you could reasonably expect a $400,000 investment portfolio to generate in retirement, says Terry Greene, a fee-only planner with MSC Financial Services Ltd. in North Vancouver. So your part-time job is the financial equal of a $400,000 portfolio. Especially if your part-time job consists of doing work you enjoy, you may find that you never want to fully retire.

5. Your employer really does love you
The first wave of baby boomers has already hit 60. Millions more will soon hit retirement age. And there are not that many people coming up behind them. “The demographic trends are suggesting that over the next 10 to 15 years, we’re not going to replace the workforce that currently exists,” says Ted Emond, a senior consultant with Hewitt Associates, a human resources consulting firm in Toronto.

The likely result of Canada’s aging society is a potential labor shortage that will make skilled help more and more valuable with each passing year. HSBC Bank Canada, is already attempting to keep older employees in the workforce by letting them work part-time while collecting pensions. Wal-Mart Canada allows its retirees to come back as consultants or to mentor current employees. Count on more employers to do the same as demographics makes skilled employees tougher to find.

6. Government is more generous than you think
The financial planning industry likes to cast doubt on the future of Canada Pension Plan. In fact, CPP is on solid financial ground after the reforms of a decade ago, according to the federal government’s chief actuary. CPP (or Quebec Pension Plan in the case of Quebecers), combined with Old Age Security, will provide you with an average of $11,500 a year if you’ve worked in Canada your entire life and retire at 65. The maximum you could qualify for is about $16,600 a year.

Don’t forget, too, that you’re eligible for a Guaranteed Income Supplement if you’re a low-income retiree. “For low-income [earners], government programs are going to provide you withthe standard of living you’ve always been used to,” says Malcolm Hamilton, a consulting actuary with Mercer, a benefits consulting firm in Toronto.

7. You may be missing free money
A Sun Life Financial survey found nearly 40% of us have access to savings programs in which our employer kicks in money to supplement what we contribute. But one in five of us who are eligible for such plans doesn’t participate. As a result, we lose guaranteed returns of 25% or more.

You should inquire with your human resources department to make sure you’re not missing out. Many publicly traded companies offer employee stock ownership plans with an employer match. If you buy $80 of your company’s stock each month through such a plan, your employer kicks in an additional $20 a month — an instant investment return of 25%. Other companies offer retirement plans in which the company matches your contribution dollar for dollar — a guaranteed return of 100%. In either case, the money is free and you should grab it.

8. You don’t need a million bucks
Financial planners like to say you’ll need 70% of your current income in retirement. To hit that goal, a middle-class couple will need to amass a million dollars or more in savings. But is the 70% figure truly a good estimate of what you need in retirement?

Probably not. Brian FitzGerald, co-author of The Pension Puzzle and chief executive officer of Capital G Consulting in Toronto, says you have many more costs while you’re working than while you’re retired, so your need for cash in retirement is considerably less than the 70% figure suggests. “There’s a bunch of expenses you don’t have to incur in retirement,” he says. For instance, most retirees no longer have to worry about paying off a house, funding their kids’ education, making RRSP contributions or commuting to work. And they pay substantially less in income tax because they’re earning less.

So how much of your current income do you really need to maintain your standard of living in retirement? “I’m pretty confident that 50% will do the job for most people,” says Hamilton, the actuary. Of course, if you want to live lavishly and travel constantly, you will need more, but if you’re happy to go on living much as you always have, replacing half of your working income should do the job.

9. RRSPs aren’t always the answer
Canada has five seasons: winter, spring, summer, fall, and RRSP time. But while we’re annually bombarded with ads telling us to stuff money into our RRSPs, don’t think of those four-letter contraptions as your only option in retirement planning.

RRSPs are not your best strategy if you have high-interest debt, such as a credit card balance. Given the 18% or more you’re probably paying on your credit card debt, you should first devote every available dollar to paying down that costly debt. RRSPs may also not be your best option if you’re a low-income earner, since the tax savings that result from making an RRSP contribution aren’t worth much if you don’t pay much tax to start with.

If the federal government goes ahead with its proposal to introduce tax-free savings accounts next year, RRSPs will have an additional competitor for your attention. Ottawa’s proposal, as it now stands, would allow each of us to put up to $5,000 a year into a tax-free savings account, or TFSA. You won’t get any tax deduction for doing so, but your money will grow tax-free. And you will be able to withdraw the TFSA money without paying any taxes. While the math gets complicated, “I would think people with below-average incomes are better with TFSAs,” says Hamilton, the actuary.

10. There’s a world of possibilities
One option that can instantly multiply your retirement spending power is to leave Canada behind. Mexico, Costa Rica, Malaysia and Panama all enjoy far better weather than we do, and much lower costs of living. “Overall, there is no question you can live here on one-half to one-third what you could in any Canadian city and have a good lifestyle,” says Tom Dawson, 54, who with his wife, Donna, moved to Panama City nearly two years ago from St. Albert, Alta. The 1,800-sq.-ft. condominium they bought overlooks the Pacific Ocean and the Panama Canal, and cost them less than $200,000. Medical care is excellent, locally grown produce is cheap and foreigners who retire to Panama with a pension can qualify for several tempting tax breaks, including an exemption from property taxes.

The federal government offers primers on retiring abroad (click on www.voyage.gc.ca and search “Retirement Abroad”). Another useful source of information is The Canadian Snowbird Guide by Douglas Gray. But no book or website can fully convey the day-to-day reality of a foreign country. Try out a destination before making any permanent decisions. Rent a home for a year and see what daily life is like. If it matches or exceeds your expectations, you may be able to afford the retirement of your dreams on far less money than you expected.

Source: CanadianBusiness.com

On Monday alone, companies across the employment spectrum announced more than 65,000 job cuts in the United States and around the world, a stark sign that businesses are enduring a painful, protracted downturn.

Monday’s toll included 20,000 cuts at Caterpillar, the world’s largest maker of construction and mining machinery; 8,000 jobs at the wireless provider Sprint Nextel; 7,000 workers at Home Depot, and 8,000 from the expected merger of the pharmaceutical makers Pfizer and Wyeth. The beleaguered automaker General Motors announced that it would cut shifts at plants in Michigan and Ohio, where the downturn has hit hardest, eliminating some 2,000 jobs.

And Texas Instruments said after the market closed on Monday that it would cut 3,400 jobs or 12 percent of its work force through 1,800 layoffs and 1,600 buyouts or retirements.

In Europe, the banking and insurance group ING said it would cut 7,000 jobs; the electronics company Philips, 6,000; and the steel maker Corus, 3,500 worldwide.

“We’re now into the danger zone,” said Brian Bethune, chief United States financial economist at IHS Global Insight. “It really becomes pernicious because the uncertainty increases, corporate confidence is badly battered, and you get these severe measures being taken.”

President Obama cited the layoff announcements in remarks Monday morning as he urged action on an $825 billion economic stimulus package of tax cuts, emergency benefits and public spending projects.

“These are not just numbers on a page,” Mr. Obama said. “As with the millions of jobs lost in 2008, these are working men and women whose families have been disrupted and whose dreams have been put on hold. We owe it to each of them and to every single American to act with a sense of urgency and common purpose. We can’t afford distractions and we cannot afford delays.”

The United States economy has dropped some 2.59 million jobs since the recession began in December 2007, and unemployment rose to 7.2 percent last month. Economists worry that the economy could now be losing as many as 600,000 jobs a month, and they said Monday’s layoff announcements served to underline the stricken state of the labor market.

Last week, the government reported that first-time unemployment claims had risen to 589,000 for the week ending Jan. 17, tying a record high set in December.

The latest job cuts — and the additional announcements likely to come in a cascading pattern as job losses through the economy cause demand to shrink further and thus lead to more layoffs mean more pain for states, as unemployment insurance claims rise and deplete state coffers.

The Obama administration has proposed setting aside $43 billion to help blunt the problem and provide for new recipients of unemployment insurance and existing ones. That money is intended to raise the weekly benefits, to extend how long people can collect those payments and to cover more types of workers, like part-timers. It is largely based upon an estimate that the unemployment rate will peak at 8.3 percent in 2010. But if unemployment reaches the double-digits, as some economists expect, the funding will almost certainly not be enough, economists say.

“The economy is deteriorating at a faster clip than even the most dreary forecasts had expected,” said the economist Joseph Brusuelas. “At the current trend, $43 billion will not be sufficient, should we breach 9 percent unemployment and maybe reach into the double digits.”

Monday’s announcements only added to a grim parade of job cuts from Wall Street to wireless providers to computer companies to retail stores.

Last week, Microsoft announced it would cut 5,000 jobs over the next year and a half; Sony in Japan and Ericcson in Sweden each announced 5,000 layoffs; and the motorcycle maker Harley-Davidson said it was eliminating 1,000 jobs. Carmakers in Japan, South Korea and Europe have also cut jobs in recent months as did the cellphone maker Nokia.

“It steepens the whole downturn,” said Harry Holzer, a labor economist at Georgetown University and the Urban Institute. “The magnitude of these layoffs indicates that the downturn in the labor markets seems to be accelerating.”

“This is a big deal,” said Dean Baker, a director of the Center for Economic and Policy Research. “We’re losing jobs at an incredibly rapid rate, and even with that, I’m worried they’re accelerating. We’re seeing a much more rapid rate of layoff announcements.”

Caterpillar, which has been hurt by falling orders for construction and mining machinery, said Monday morning that it would cull 20,000 workers through layoffs and buyouts. It said it would make “sharp declines” in overtime and eliminate scores of temporary and contract jobs.

The company said 2009 would be one of its weakest years since World War II.

“These are very uncertain times,” the chief executive, James W. Owens, said in a statement. “While it’s painful for our employees and suppliers, it’s absolutely necessary given economic circumstances. We expect to have most of the actions needed to lower employment and cost levels in place by the end of the first quarter.”

“We were whipsawed in the fourth quarter as key industries were hit by a rapidly deteriorating global economy and plunging commodity prices,” Mr. Owens said.

The wireless provider, Sprint Nextel, said its 8,000 job cuts were part of a plan to trim labor costs by $1.2 billion, and said most of the cuts would be completed by March 31. About 850 of the job cuts are expected to come through buyouts, which will cost the company $300 million in severance costs and related expenses.

“Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” Sprint’s chief executive, Daniel R. Hesse, said.

Home Depot, the country’s largest home-supply chain, said it would cut 7,000 jobs, about 2 percent of its work force, and would close its higher-end Expo Design Center business, which includes 34 stores.

Carol B. Tomé, Home Depot’s chief financial officer, said in a telephone interview that the company began exploring ways to save its Expo business months ago, but “as we kept looking at alternatives the business kept getting softer and softer.”

With no sign of consumers cracking open their wallets anytime soon, executives simply realized, “we can’t fix it.”

Souce: Nytimes.com