Author Archives: Brian Poncelet

Why Retirement Planning Requires More Than Numbers

Can You Add By Subtracting?

For many people, this nagging question never goes away. Fortunately, I do have some insight to share. One of the benefits of working exclusively with one particular demographic group (in my case, future retirees) is that I have the ability to see patterns and repeated behaviors in my pre-retired clients.

How to Create a Post-Retirement Lifestyle That Works

While it’s crucial to make sure your finances are solid before you retire, there’s another component to consider. In my opinion, we desperately need to start emotionally planning for retirement well in advance of pulling the plug on our traditional careers. Pre-retirees need to dedicate substantial time to developing habits, hobbies and relationships now to ensure happiness and contentment in retirement.

Finding Your Post-Retirement Purpose

If you don’t have a purpose beyond your career, you won’t magically find one once you quit working. Unfortunately, not having a purpose in retirement can leave you stressed, unhappy and downright bored. My happiest retired clients are the ones who are so busy with part-time work, volunteer work, hobbies and grandparenting that they can barely find a few minutes to come into the office for a visit.

If I’ve seen it once, I’ve seen it a hundred times – a retired person with no life purpose quickly becomes bored. Unfortunately, bored retirees usually try to alleviate their boredom by spending money. Spending money as a part of a written financial plan is fine, but throwing money at an emotional problem is rarely a proper, permanent solution. Not to mention that outsized spending will eventually leave you broke, adding to your problems.

Canada home prices to cool in 2018 as rates rise

While home price gains in Toronto and Vancouver are also expected to slow, they are anticipated to remain stronger than national prices despite recent local government efforts to rein in the hot markets.

Canada’s housing market has been robust in the years since the global financial crisis of 2007-2009, supporting economic growth but also spurring record levels of household debt compared to income.

With tougher new rules on mortgage lending to take effect at the beginning of next year and the Bank of Canada expected to raise interest rates again, economists are watching to see how indebted consumers will cope.

Home prices are expected to grow by just 1.9 percent next year after a gain of 8.5 percent in 2017, according to a Reuters poll of analysts. Home price inflation is expected to pick up slightly from there with a 2.6 percent increase in 2019.

Analysts said the impending mortgage rule changes imposed by Canada’s banking regulator are likely to have the biggest impact on the most expensive markets.

“The rule change will be significant, but largely concentrated in higher-priced markets of Toronto and Vancouver,” said Michael Dolega, senior economist at TD Bank.

Still, the impact in British Columbia may be diluted by the large number of credit unions in the province that are not subject to the rule changes, Dolega said.

Toronto price gains are forecast to cool to 2.0 percent in 2018 and edge up to 3.0 percent the following year.

After touching an annual rate of over 30 percent earlier this year, home prices in Toronto have come off the boil since the Ontario government announced a number of measures in April to cool demand, including a foreign buyers tax.

But Vancouver, which implemented its own tax on foreign buyers last year, is seen notching price gains of 6.0 percent next year before cooling to 4.6 percent in 2019.

The rebound in Vancouver prices since the tax was introduced suggests further measures are needed in British Columbia, said Sebastien Lavoie, chief economist at Laurentian Bank.

Three books to power up your new year

Disrupt Yourself  by Whitney Johnson.

We are living in a time of disruption. Traditional businesses are either being disrupted or – the smart ones – are actively making sure they are ahead of the curve to disrupt themselves.

But most people don’t think about what that means for their own professional lives. Disrupt Yourself takes the concepts of disruption and applies them to personal careers.

Entrepreneurial You by Dorie Clark.

Once you’ve stepped back and assessed your career, you might decide to embed more diversity and self-reliance into it. Entrepreneurial You gives you a guide to do that. (Disclosure: I am profiled in this book.)

Clark says that the way to hedge your career risk is to develop multiple options and multiple revenue streams. In the busy day-to-day of your life you may not be thinking this, so the insight itself is helpful.

Multipliers, by Liz Wiseman.
If your goal for next year is to become a better leader, you can’t do better than Liz Wiseman’s book Multipliers.

The premise of Mulitpliers is simple: as a leader you are either getting the most out of your people or you are in some ways dampening them. Wiseman lays out specific frameworks and tools to help you assess what your actions are doing and to chart a path for you to unlock more smarts and capabilities in your employees.

Retail sales lift bets for rate hike in new year

The annual inflation rate increased to 2.1 percent last month from 1.4 percent in October, Statistics Canada said on Thursday, topping forecasts for 2.0 percent.

It was the highest level since January and the first time inflation has hit the central bank’s 2 percent target since February. Underlying inflation also perked up, with two out of three of the Bank of Canada’s core measures rising on an annual basis.

The data, along with a better-than-expected 1.5 percent jump in October retail sales, sent the Canadian dollar higher against the greenback and raised expectations the Bank of Canada could increase rates as early as January after taking two hikes this year.

“These reports do increase the odds of more aggressive tightening from the Bank of Canada in 2018,” said Sal Guatieri, senior economist at BMO Capital Markets.

Bets in the markets of an increase in January rose to 52.8 percent from 37.9 percent ahead of the data, while a March hike was nearly fully priced in.

Governor Stephen Poloz said last week the central bank is increasingly confident the economy will need less stimulus over time.

Consumer prices were up in seven of the eight main consumer price categories, led by a 5.9 percent annual increase in the transportation component as gasoline prices accelerated.

Food prices were up 1.6 percent as consumers paid more for meat and fresh vegetables.

A 3.3 percent increase in motor vehicle sales lifted retail sales. Vehicle sales have been robust this year, putting 2017 on track to hit 2 million for the first time.

Retail sales volumes were also strong, up 1.4 percent, prompting economists at CIBC to lift their forecast for Friday’s October growth data to 0.3 percent. Economists polled by Reuters expect a 0.2 percent increase.

Winter Is A Great Time To House Hunt

“Mortgage rates are low now, although they are higher than they were six months ago, and higher than they were last March,” Corbett says. “The price increases that were common in metro markets such as Las Vegas, Fort Lauderdale and Orlando are slowing. Even Atlanta, which had an average 19% price increase last year, is showing signs of cooling.”

Corbett explains why the holidays are no time to take a long winter’s nap if you want to buy a home.

There isn’t a lot of competition. People know they’re going to be busy or traveling during the holidays, so most deals have been wrapped up or people have put off looking until after the New Year. There are still homes on the market, but not as many people gunning for them. This is an advantage to both buyers.

If it’s a slow season, doesn’t that mean inventory will be lower?

Yes, but the sellers are motivated. These are likely the homes that for whatever reason didn’t go during the peak season. The sellers will want to get the deal closed, especially for tax purposes. For a lot of people, it’s mental. It’s the end of the year and they want to tie up loose ends. This is an advantage for buyers, especially if there are points to negotiate.

Would other key people in the equation, such as realtors and mortgage brokers, also be scarce?

I know a lot of realtors who love this time of year. They say they get a lot of business done because the people who are out looking are serious. As a buyer, your broker will have more time to focus on you, as opposed to other times of the year when they might be juggling more clients. You may not be able to close before the end of the year, but it’s a good time to get something under contract.