How to spot a personal finance poseur: they’re the so-called expert who tells you to do your homework when making big financial decisions, to shop around when choosing products and not to panic when things get rough.
The personal finance expert is the one who should be doing the homework and shopping around. As for people panicking about money, there are no two words more useless to people stressed about their finances than “don’t panic.” Try context and practical suggestions instead.
I saw the “don’t panic” line this week in an e-mail pitch from a PR person to write about one financial expert or another -- I can’t recall who because I deleted the e-mail so fast. Then, I invited the people in my Twitter community for their thoughts on the lamest phrases in personal finance. Here are a few of my favourite responses:
- Passive income
- Side hustle
- Stockpicker’s market
- The smart money
- All your eggs in one basket
- People spend more time planning their vacation than their retirement
- Save for rainy days
- Pivot
- Bank of mom and dad
Personal finance coverage has improved a lot in recent decades – it’s better explained, more approachable and more diverse. But the list of personal finance phrases that bugs people shows there’s still work to do in moving behind empty stock phrases and clichés. Every cliché is a failure to better explain.
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Rob’s personal finance reading list
High inflation, record profits
An economics professor looks at whether businesses are profiting from inflation by using it as a cover for increasing profit margins. Is greedflation a thing?
For the hesitant investor
All about high interest savings ETFs, which offer a stable parking place for cash in your investment accounts. The yield on these exchange-traded funds these days is about 3.6 per cent. Now for a look at alternative investments, which are being hyped these days as an answer for investors worried about falling stocks and bonds. For the record, I’m a skeptic on alternatives as marketed to retail investors.
Mortgage wars: Variable versus fixed rates
A Reddit threat where the merits of variable and fixed-rate mortgages are discussed. I have trouble seeing an argument for locking in a rate for five years right now.
Just buy, baby
Thoughts on the bear market for stocks and what investors should do. It all comes down your sense of things. Are stocks plunging, or going on sale?
Ask Rob
Q: What is your opinion of reverse mortgages for retirees? A serviceable option for staying in one’s own home or a bad financial decision?
A: Globe and Mail mortgage specialist Robert McLister tackled reverse mortgages in a recent column. He focused on the harsh effects that rising interest rates are having on this borrowing option. A must read for those considering reverse mortgages.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A look at how the new Canada Post MyMoney loan program works. A way to borrow between $1,000 and $30,000. These loans aren’t cheap – the range is 9.78 per cent to 19.78 per cent for variable rate loans and from 9.98 to 19.98 per cent for fixed interest loans. Rates depend on factors like your credit score and income.
The Money-Free Zone
Make time for this: Wildlife Photographer of the Year winners go deep to see our planet’s inner beauty
Watch this
I was one of the panelists on a recent edition of the TV show The Agenda that looked at how Gen Z will revolutionize the workforce.
From the Twitterverse
The ugliest story in personal finance today is what’s happening with rents.
ICYMI
What I’ve been writing about
- A retired couple wanted out of the stock market. Then, a bank fumbled their account transfer
- Six-per-cent dividend yields from blue chip stocks are there for the taking
- Rising interest rates mean a higher tax bill for savers and investors this year
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Is the middle class dead for millennials and Gen Z? • Gas prices are soaring. Are electric vehicles an affordable solution? • Crypto is booming, but should you invest? • How are young Canadians dealing with soaring rents? • Inflation is squeezing our finances. What can we do about it? • Is a hot housing market squeezing Canadians out of their small towns?
- ✔️ The housing file: How bad is housing affordability? Even a crash won't help • Sell the family home to lock in profit and then rent? Better not • Why young adults can't afford houses: Hard work got you more in the past than it does now • Five reasons you should not buy a house till you're at least 30 • Now more than ever, owning a house is not a retirement plan
- 📈 Investing: The 2022 ETF buyer's guide: Best Canadian equity funds • The 2022 Globe and Mail digital broker ranking: Does the zero-commission revolution flip the script on who's best? • With bonds sinking, conservative investors are waking up to risks they never saw coming • A five-step plan for dealing with the sad fact that almost every investment is falling lately • The best financial advice in advance of retirement? Work on your marriage • One-year GICs are the best deal in town for safety seekers • What to do if the financial plan you paid thousands for disappoints
- 💰 Your money: Are you prepared for the pandemic wealth boom to blow up in our faces? • This hard-working 24-year-old is nailing it financially. But where’s the happiness? • Who should and shouldn’t worry about the wave of rate increases this year, and what every stressed-out borrower should do right now • Don’t make this potentially costly assumption about the CPP Survivor’s pension
Rob Carrick