There’s a common thread to my top reads this month: disability insurance, moving in together, and annuities are all topics that too many people make too many assumptions about, including professionals who ought to know better. 

If you’ve made your way through those three eye-openers and want more, I’ve got you covered. Read about acting as your portfolio’s CEO, how Facebook and Google are privacy-washing their services, practical tips to overcome the transition from diligent saver to retirement spender, an overlooked truth about financial freedom, a brief history of social assistance in Canada, and how mental rigidity is the enemy of long-term investing success.

Disability Insurance...Because the Odds are Against You

From Russell Sawatsky

Russ launched his advice only planning practice in September 2019, and has been steadily developing a personal finance encyclopedia on his Money Architect site. This one on disability insurance is a very good place to start...but keep reading, because the whole library is great.

Read the full article here. 

Heads Up on "Shacking" Up

From Marly Peikes

"There may be a myriad of reasons for living common law depending on circumstances, but one myth that needs to be unraveled is the notion that it is simpler not to get married. Common law relationships have a unique set of considerations."

Read the full article here.

Evaluate Annuities as a Component of Your Retirement Income Portfolio

From Dirk Cotton

“Nominal (not inflation-adjusted) annuities can still play an important role. Our goal isn't to ensure that inflation does not ravage our annuity income but to ensure that inflation doesn't ravage our retirement income. As Milevsky's comment suggests, the two need not necessarily be the same.” 

(Note that there’s some US-only information in this article that Canadian readers need to be mindful of)

Read the full article here.

You can read this month's entire list below:

Forecasting the Market is Almost Impossible, So Here's What Investors Should Do Instead | Tom Bradley

"I came up with one recommendation that’s guaranteed to produce better investment outcomes — hire yourself as the CEO of your portfolio. That’s right. The buck stops with you, so start playing the role."

At CES, Apple, Facebook and Amazon are preaching privacy. Don’t believe the hype | Geoffrey A. Fowler

“Lots of the companies that have gotten wealthy from selling us data-collecting devices — or from collecting our data — have learned to talk the talk on privacy. But they’re very often defining privacy in ways that serve their own interests first.”

Opening the Spigot | Jonathan Clements

We’ve found that many of our retiree clients have a hard time making the transition from “save diligently” to “spend happily”. Here are five very good (though US-centric) suggestions if you’re experiencing something similar.

What Nobody Told You About Financial Freedom | Safal Niveshak

“The fact is that the more we think that a lot of money is what we need to live happily, and the more we associate money with most things in life, the more we convince ourselves that we are too poor to buy our freedom.”

Bring back cost sharing! End 26 years of social assistance decline | John Stapleton

A brief but thorough history of social assistance in Canada from 1935 to today, with a glimmer of hope in the horizon.

A Common Mistake Many Investors Make: Mental Rigidity | Peter Lazaroff

“It’s one thing to agree to a long-term investment plan at the onset of a relationship with a financial advisor, but the actual experience of riding out different market movements is harder in practice than in theory.”

I thought when I picked up Your Digital Undertaker: Exploring Death in the Digital Age in Canada, that I’d learn more about how digital assets are treated after death, how to plan properly for my own digital assets and to guide clients in planning for theirs, and trends to watch for as the legal landscape changes. 

Lest you think I’m about to complain about this book, I did learn all of that. But I was delighted to learn much more, and in such a practical, applicable way. Organizing your own affairs, preparing your executor, and even preparing to be an executor are enormous, complicated topics, made more so by the fact that each province and territory has its own laws. Sharon Hartung has done a remarkable job of articulating the complexity while still delivering a universally useful guide that covers much more than just the digital aspects of death.

In addition to her simple and personal writing style, Hartung’s particular strength is in applying her project management lens to each part of the process, from what an executor is dealing with in the first few days after death, to pre-planning and pre-paying your own funeral, preparing an asset and account inventory for the benefit of your future executor, final and estate taxes, and winding up the estate and making distributions to beneficiaries. The framework for each step follows this simple structure: 

1. Scope: Why are you doing this? 

2. Options and Trade-Offs: What are the pros and cons?

3. Preferences and Costs: What do you need and what’s it going to cost you? 

4. Procurement of Professional Services: Your body can’t bury itself!

5. Risks: What are the risks? What are the backup plans? 

6. Communication: It’s on a need-to-know basis and someone needs to know!

Even better, Hartung includes multiple checklists designed to either guide you through the decision-making structure, or - my personal favourite - measure your progress against a benchmark for success that you set for yourself!

Who should read it?

Everyone. Every single person old enough to own assets and execute a Will should read this book with a pencil in hand and a running list of to-dos beside them.

If you only have time to read one chapter:

Of course, read Chapter 7: Death with a Side of Digital. This is where Hartung outlines the many ways our ever-expanding digital lives are already making estate planning and administration so much more complex, and where most readers will come away a little surprised and a lot galvanized to get organizing.

If you only have time to read one paragraph:

“Although you may not know much about funerals, wills and filing taxes at death, there are plenty of qualified estate professionals who can explain what you need to know in simple terms, provide you with options, and communicate the issues and risks involved. That said, you’ll need to be actively involved throughout and be able to engage effectively with the estate professionals you hire. This means asking plenty of questions and taking lots of notes because, while you will be dealing with many professionals, you will be the project manager, not them. You may, as many people do, expect a legal advisor to draft a suitable will, with you playing a passive role in developing it. This is not desirable. You might have checked the box, and have a piece of paper called a will, but if you are deeply engaged in the process with the legal advisor, by asking questions, researching, and doing homework, it can result in estate planning documents that better align with your ultimate wishes, intentions and objectives.”

(Chapter 2: Getting Your Affairs in Order - Building Your Death Project in the Digital Age, page 32, emphasis mine)

If you only have time to read one sentence:

“A will, after all, is just a piece of paper until you die; how it survives your death is what really matters.”

(Chapter 4: Your Digital Life Needs a Will, Too, page 63)

If you - like me - recently welcomed a dog into your home and are now suddenly A Person Who Has Time for Podcasts, our reading list this month has a beautiful series about Fred Rogers that’s perfect to start the new decade with. If you like the first episode, check out this one on Helping the Helpers too.  

When you’re back home and ready to read with your eyes instead of your ears, this month’s list includes a masterpiece on the tradeoffs we make in life, ideas for ethical consumption, including a reminder that with great (purchasing) power comes great responsibility (thanks Spidey), and a moving and practical reflection on inheritances from our friend Jason Heath, who recently lost his mother much too soon. 

Other entries to this month’s reading list include how to give an inheritance today while you’re still around to enjoy the act of giving, how to read in a way that opens you up to new ways of thinking (instead of reinforcing your existing mindset), an anecdote from Jason Zweig’s overconfident youth that, uh, left us feeling a bit seen, and interesting research out of the University of California on the power of direct cash transfers in alleviating poverty. 

Happy reading! 

Tradeoffs: The Currency of Decision Making

From Shane Parrish

“If you feel like you’re always behind on some area of your life, it’s probably a sign to reconsider tradeoffs. If you feel like you’re always running in place without making any serious progress on anything you care about, you’re probably making the wrong tradeoffs. We often end up allocating our time, and other scarce resources like money, by default, not in the way that gets us what we want.”

Read the full article here.

Ethical Consumption: How to Pollute the Planet and Exploit Labor Slightly Less

From Piggy

“The plain and simple fact of the matter is that the most ethical form of consumption is sparing, rare. When you make fewer decisions to buy things, you can be more intentional about those decisions, more deliberate in how and what you buy....

“Ethical consumption is generally a goal for the privileged among us. And while we should all do what we can when it comes to preserving the environment and shutting down exploitative labor practices, the key phrase there is what we can. Some of us can do more than others.”

Read the full article here. 

Planning for an inheritance

From Jason Heath

“An inheritance means you have lost a loved one. But it should not mean the difference between being able to retire or not.”

Read the full article here.

You can read this month's entire list below:

[Podcast] Finding Fred Episode 1: Genius of Empathy |Carvell Wallace

“What made Fred Rogers, a sweet kid from Pennsylvania who played with puppets and spoke to his fish, the most important children’s performer of all time. And why are turning to him now, in 2019 when the world feels dark, for a kind of clarity that we can’t seem to find elsewhere.

The answer turns out to be, like Fred preferred, simple and profound.”

Transferring Wealth During Your Lifetime | Steven Frye

On gifting cash or assets during one’s lifetime as an alternative method of distributing your wealth and possibly avoid taxes at the time of death.

How to Read: Lots of Inputs and a Strong Filter | Morgan Housel

“If you only pick up books you know with certainty you’re going to like you’ll confine yourself to reading the same authors on the same topics. It gives fresh oxygen to confirmation bias and limits your ability to connect the dots between different fields and different cultures.”

Overconfidence: An Autobiography | Jason Zweig

“I try not to be sure of much, but I am sure of this: The only thing more ridiculous than a know-it-all is a know-it-all who doesn’t know how ridiculous he is.”

New Study Finds Cash Transfers To Poor Families Lift Up Their Neighbors Too | Nurith Aizenman

“A wealth of research suggests that when families are given the power to decide how to spend it, they manage the money in ways that improve their overall well-being.”

My favourite 19 seconds of any interview I’ve ever done:

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Listen to the whole interview with Ellen Roseman and Lana Sanichar on the MoneySaver Podcast:

Apparently, “Nothing says ‘Time for Therapy’ more than the last few months of the year”, and Dr. Moira Somers has some great tips for how you and your family can protect your mental health this holiday season. 

If you’re a dedicated saver reviewing that long list of holiday gifts and experiencing some trouble actually spending your money - well, I feel you. This may come as a surprise, but I’ve seen it enough to know that hardcore savers often stress over spending through their retirement years. Some even put a portion of their retirement income into… savings… which is where it came from…. out of sheer habit. According to several studies, it’s not an unusual perspective. Are you a reluctant spender? 

For those of you preparing for new additions to the family, Emma Pattee shares the four things she did to prepare for the arrival of her baby - and not all of them were related to money. Find out more here.

Got more time to read throughout the holidays? There’s a new financial planning association (you may recognize some of the instigators), some thoughts on projections versus reality, the power of great planning, and why clever and ingenious isn’t always better than simple and obvious. There is also how to protect your financial boundaries (especially during this spendy time of year!), what you want to know about the Ontario budget - especially if you worry about deficits, and what questions to ask yourself when you’re thinking about giving an early inheritance. 

Happy reading! I will - of course - have more for you in 2020!

The 4 things we did to get ready for our baby

From Emma Pattee

“In our pragmatic, consumer-obsessed culture, getting “ready for a baby” revolves around purchasing, organizing, and making practical decisions (where will baby sleep? Who will watch baby? Who will be baby’s doctor?)

This kind of prepping is important, but it’s also just one element of preparation.

The other kinds of preparation are spiritual, emotional, financial, physical, and relational. Those ways are maybe not as fun as decorating a nursery but IMO, it's a much more meaningful way to prepare for parenthood.”

Read the full article here.

Got clients or workers in distress? Got people who are distressing you? You’re in luck!

From Dr. Moira Somers

“Eggnog plus year-end reports plus psychotherapy. It’s a winning combination. You might want to suggest it at your next family gathering.”

Read the full article here.

Half of Retirees Afraid to Use Savings

From Kimberley Blanton

“Retirees who want to enjoy their hard-earned savings have to learn to live with some uncertainty so they don’t shortchange themselves.”

Read the full article here.

You can read this month's entire list below:

New association aims to raise professionalism among financial planners | Jason Pereira

“Imagine there was a service that, at its best, provided those receiving it with a sense of security, welfare, freedom, and calm – and enabled them to achieve their goals and dreams in life.

Now, picture that the majority of people providing this service were subject to deficient proficiency requirements. They could give themselves whatever title they wanted. They had no legal requirement to act in the best interests of their clients. They were incentivized primarily by selling products that may not be needed or beneficial to a client. They had no incentive beyond their own conscience and sense of benevolence to do what’s best for the client. They were faced with requirements from their employers to meet weekly or monthly targets. And they only had to provide cursory and often incomplete disclosures about their compensation for acting on behalf of the client.

Given these deficiencies, the unfortunate state of financial planning today is no surprise: surveys show that only one in five Canadians would rate financial planners as trustworthy.”

Guessing Game | Jonathan Clements

“The resulting retirement projections imply a degree of precision that’ll likely look hopelessly naïve once the real world intervenes.”

Eliud Kipchoge & The Power of Great Planning | Alex Riley

“You can only meet your personalised future financial goals if you put in place an actionable tailored financial plan. A financial training schedule so to speak, using proven strategies most others overlook”

Finding the Obvious | Jon

“The trouble is clever, ingenious plans are more appealing than the simple, obvious ones. But more often than not, communicating the simple ideas has a bigger impact than some clever, ingenious scheme.”

Do You Need to Create Some New Financial Boundaries? | Jacquette Timmons

“If/when your financial boundary gets tested, it’s an invitation to evaluate your system. Or, set aside time to document it.”

Five things to know about the next Ontario budget | Randy Robinson

“Why do so many Ontarians feel broke? Why is our government acting broke?”

Transferring Wealth During Your Lifetime | Steven Frye

On “gifting cash or assets during one’s lifetime as an alternative method of distributing your wealth and possibly avoid taxes at time of death”