Welcome to my favourite “Monthly Reads” for December, 2022! These are articles, podcasts, or videos from the personal finance community and elsewhere that I found especially illuminating, entertaining, or beneficial for anyone on the path the financial independence.
I hope to make this a recurring feature on my blog, so I hope you enjoy this first edition of my Monthly Reads.
The Important of Financial Literacy
I’ve been a long-time listener of the Rational Reminder podcast, which has taken Canada and the rest of the world by storm with its thoughtful analysis of everyday finance topics “from two Canadians.“
On last week’s episode, they had Dr. Annamaria Lusardi, who host Ben Felix refers to as “the Gene Fama of financial literacy,” on the show to discuss and share the latest research on the topic.
Tune in to learn about the compounding effect financial literacy can have on one’s wealth and common mistakes less financially savvy individuals tend to make.
An interesting thing I learned from this episode is how the optimal amount of financial knowledge can vary greatly between countries. And is largely impacted by the size and scope of their government’s social safety net.
“[The] country which have the lowest level of financial literacy, for example, are also country with more general pension plans.”
Real Estate Market Under Strain
As it relates to financial literacy, one article from the CBC really stood out to me this past month: They purchased homes right before the real estate downturn. Now, they’re struggling to close.
Buyers in a Brampton, Ontario development are struggling to get mortgages now that the real estate market has gone sideways.
A point that stood out to many is that one buyer of a once 2 million dollar home worked as an Uber driver as his primary income source. Later the article was updated to clarify that he earned income from his business outside of Canada—added to the article after flummoxed readers began questioning how an Uber driver could afford such a home.
I’d like to joke that such a story could only take place in Brampton—where the famous “Brampton Mortgage,” as it’s known, has been widely reported on—but the truth is, we’re likely to see similar stories from across Canada if rates stay where they are.
Unfortunately, when rates were so low for so long, it made all too much sense to leverage heavily into real estate. And with our Bank of Canada Governor proclaiming “interest rates will be low for a long time” just a year and a half ago, I can hardly blame Canadians for taking the bait.
Retirement on a Lower Income
On a lighter note, I thoroughly enjoyed reading an older article from Mark Seed over at My Own Advisor titled “Age 60, retirement on a lower income – can I do it?“
In it, Mark and his guest analyzed how a soon-to-be retiree with a low income could pull off a fulfilling retirement—with biannual trips to Florida and all—by delaying his retirement and making modest changes to his future spending.
What I enjoyed most about this article is that it showed just how doable retirement is if you can be smart about your spending. It also highlights how much easier retirement can be when you own your home, even for those on a modest income.
Liquid on Margin
Liquid over at Freedom 35 came out with a great video this month on how exactly to use margin and not totally lose your shirt when the market declines.
As a relative novice with leveraged investing, I find it valuable to learn from others like Liquid who have been using leverage to their advantage for years. And with it, have built up an impressive nest egg at a young age.
Because of his success and ability to use leverage to his advantage, Liquid has been able to retire from his day job—something I think we all fantasize about from time to time!
Check him out if you want to learn more about leverage, alternative investments, and options trading.
Thanks for Reading!
I hope you enjoyed this little look back at my favourite reads for the month of December. Was there anything great I missed? Any new blogs I should be following or YouTube channels to subscribe to? I’m always looking for recommendations, so don’t hesitate to drop them in the comments below.
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I think this monthly reads series will be a great addition to your blog. 🙂 Thanks for mentioning my video and I’m glad you find it useful to help spark leverage ideas you can use for yourself.
Using other people’s money for years was great up until last year where I underperformed the market lol. But as long as there are more positive years ahead I think my portfolio should still hold up okay. The key is to manage risk and not get wiped out. A lesson I’m still learning. In the long run, surviving in the market is what’s important. 🙂
Thanks Liquid! I got this idea after I saw a few others in our community doing a weekly or monthly reads-style post. I find myself reading (or watching, listening) to so much great content every month. Seemed like a good idea to pick out what I like most and share it here.
On leverage, I totally agree! Perhaps that’s why I’ve been a bit hesitant to go “all-in” with my HELOC as of yet. I’ll hopefully come up with a plan for that money in the next few months. Watching your journey has inspired and taught me a lot, so thank you!
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