Latest news with #MoneySense
Business Times
5 days ago
- Business
- Business Times
Employers should encourage employees to start retirement planning early
AS A trainer with MoneySense's Institute for Financial Literacy (IFL) for almost eight years, I have taught dozens of retirement planning classes to hundreds of people. One common feature? An overwhelming majority of participants are not prepared for life after full-time work. This gels with virtually all surveys into retirement adequacy. For instance, OCBC's Financial Wellness Index findings, published last November, showed that although more people are investing, retirement planning is still a problem. The survey found that only 54 per cent of respondents have started making financial plans for retirement, down six percentage points from 2023, while 24 per cent said they either intend to start or started planning for their retirement only in their 50s or later, which realistically, does not leave much time to accumulate sufficient funds. OCBC also found the problem to be more acute among 'Dinks'' – those with dual incomes and no kids. These findings have actually been fairly consistent over the years, so nothing new perhaps. But in a rapidly ageing society, it has to be troubling. Although financial planners advise individuals to start investing and planning for their retirement as early as possible in order to maximise the benefits of compound interest and ride out volatility in financial markets, most people do not. Individuals who are in the early stages of their working life and are just starting their families tend to be shouldering numerous financial commitments ranging from mortgage repayments to setting aside funds for children's education, to the point that investing and retirement planning tend to be relegated to secondary importance. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Many also believe they lack the time and funds to do proper planning. The result is the majority relies on simple savings to build retirement nest eggs. This is far from ideal and presents a problem for a greying population that has to grapple with persistent inflation, at least for the foreseeable future. When there is insufficient investment and advance financial planning, what happens is that as retirement looms and people realise they have a significant shortfall in funds, the tendency is to search for quick solutions via complex instruments that offer high returns but come with plenty of risks. If these securities do not perform as hoped, large losses are incurred, and the problem is worsened. But the OCBC study also found that getting proper help, whether in terms of advice or tools, has had a positive impact on improving scores. For instance, almost half of investors who sought qualified financial advice from financial institutions were on track with their investments. In this connection, employers, particularly human resource departments, can play an important role by encouraging employees to start gearing up for retirement from a young age. If cost is a consideration, there are available, for instance, free and unbiased courses offered by IFL on money management, insurance, investing and retirement planning. A key plank of these courses is how the oft-misunderstood Central Provident Fund scheme can provide everyone with the foundation for a comfortable retirement. Also taught is how one's nest egg can be supplemented by investing in various instruments and tapping into government schemes such as the Silver Housing Bonus and Lease Buyback Scheme. Given how pervasive the problem apparently is, employers certainly can help spur awareness and action by including (perhaps even emphasising) retirement planning in their suite of employee benefits.
South Wales Argus
28-05-2025
- Business
- South Wales Argus
New financial platform launched for young people in Wales
NatWest Group has expanded its NatWest Thrive initiative, which started as a youth club programme, into a free online resource. The platform combines more than 30 years of community initiatives, including MoneySense, CareerSense, and Dream Bigger, into one. It offers a range of learning tools for young people and was created in collaboration with teachers, youth workers, and young people. Marg Jobling, chief marketing officer at NatWest, said: "We're on a mission to help young people turn possibilities into progress, helping the next generation grow up money confident and achieve their life goals. "To help us meet that commitment we've made NatWest Thrive bigger and better by combining over 30 years of community programmes to help young people build their financial confidence. "NatWest Thrive gives teachers, parents, and youth workers access to bite-sized pieces of real-world content and resources to help inspire and empower young people to break through barriers and take action towards owning the future they want." NatWest Thrive provides access to new, flexible, real-world learning content to engage young people at home, in the classroom, or in youth clubs in Wales. The content ranges from five-minute clips to full-length lessons, using real-life role models and stories. NatWest Thrive is available free to anyone, whether they are customers or non-customers, online across NatWest, Royal Bank of Scotland, and Ulster Bank Northern Ireland.
Edmonton Journal
22-05-2025
- Business
- Edmonton Journal
Low prices, high incomes boost Edmonton's real estate ranking
Article content Edmonton is on the move as a great place to buy real estate in Canada. The MoneySense annual Where to Buy Real Estate report ranked Alberta's capital as fifth among 44 markets in Canada, a significant increase from 2024. 'Considering that Edmonton ranked 17th the previous year, it's quite a leap,' says Chivon Sterling, realtor for eXp Realty in Edmonton. 'What is propelling that rise is that we have some of the lowest prices among largest cities, along with the highest average incomes.'
Calgary Herald
22-05-2025
- Business
- Calgary Herald
Calgary is the second best market in Canada to buy real estate
Article content Sales may be declining in Calgary compared with previous years, but that doesn't mean it's not among the top markets in Canada to buy a home. Article content Article content In fact, among 24 major Canadian resale real estate markets, it ranks No. 2 in the recently published annual Where to Buy Real Estate report from MoneySense. Article content 'We look at the value of homes across Canada in different municipalities to see what the best value is for Canadians,' says Lisa Hannam, editor in chief at MoneySense. Article content Article content Notably, Calgary offers buyers a lot of value for their dollar despite significant price increases in the past few years, she adds. Article content Article content Those price increases are factored into the study's scoring with Calgary seeing 41 per cent price growth over the last five years. The top market in the study, Fredericton, N.B., saw 72 per cent price growth — though its benchmark price was about $311,000 at the end of 2024 versus about $577,000 for Calgary. Article content Calgary's was $87,000 — the highest for all cities. The next highest income was Guelph, ranked 23rd, at $85,000. Yet the Ontario city's benchmark price was nearly $805,000 at the end of last year. Although its five-year price growth was 46 per cent, Guelph's one- and three-year price growth were minus two and one per cent, respectively. That trend is similar to many other Ontario cities in the study that have cooled dramatically in recent years. Article content Article content 'We're seeing a shift nationally from a sellers market to balance,' Hannam says, noting Calgary and many Ontario markets now have a balance between supply and demand. Article content In Calgary, however, not all markets are in balance, notes Robert Lamb, realtor with eXp Realty in the city. Article content 'If you're listing a good, detached home that's priced reasonably, you're going to attract a lot of attention.' Article content That's likely to result in multiple offers because affordably priced, single-family detached homes — less than $700,000 — remain in a seller's market. Article content 'So we're seeing people dropping out of the detached market and looking at semi-detached or row homes instead,' he says, noting their frustration with finding an affordable detached home.
CNA
16-05-2025
- Business
- CNA
Should you take up a loan to invest? Here's what you need to know
While doing a yearly review of my finances earlier this year, a financial adviser I met suggested buying an insurance policy that might yield attractive returns. It was a tempting prospect but the annual premiums were beyond my means. The financial adviser's suggestion? Take a loan with an interest rate lower than the insurance policy's potential returns. I was bewildered by the notion as I had grown up being taught by my parents that taking on debt was to be avoided at all costs, if possible. I had also read one too many reports warning that people can spiral into debt if they do not manage their loans well. Speaking to this financial adviser, however, made me wonder if I was just being overly fearful of debt and if I could leverage such an option to my advantage. In short, the answer is, don't do it unless you have money you are prepared to lose, because managing an investment and a loan together is double trouble that not many of us common folk are equipped to do. Financial experts told CNA TODAY that debt, which can come in the form of a personal loan, housing loan or even a study loan, can be classified as "healthy" or "unhealthy", depending on the purpose of the loan, the amount borrowed and your financial standing. Mr Lawrence Tan, a senior manager at the Institute for Financial Literacy, the outreach arm of national financial education programme MoneySense, said debts that fall in the "healthy" category should help meet basic needs such as education and housing, or have a productive purpose such as to generate income by starting a business. 'On the other side of the coin, taking on debt to fund something that is not a basic need – for example, to fund lifestyle expenses or buying something that is not core to your daily needs – can be considered unhealthy and even 'bad',' he said. Whether it is "good" or "bad" debt also depends on your income streams and the amount of debt you have. Ms Daphne Lye, financial planning solutions and investment management lead at MoneyOwl, a financial advisory firm that is part of Temasek Trust, said that it is ideal for your total debt servicing ratio to be under 35 per cent. This ratio is the proportion of your gross monthly income that goes into repaying your debt obligations, including your monthly housing loan. For example, if you take home S$3,000 before mandatory contributions to the Central Provident Fund, the amount you pay towards your debts should not be more than S$1,050 ideally. Without the housing loan, Ms Lye said that loan repayments should not be more than 15 per cent of your take-home pay. 'As part of our financial health, we should limit the overall quantum of debt – even good debt – to be manageable so we do not find ourselves in an overly stressed financial situation,' she added. Even with "good" debt, the experts said there are things to look out for before taking a loan. Mr Mark Tan, head of commercial for financial website MoneySmart Financial, said these include the interest rates that are charged and the monthly repayments, which should 'comfortably fit within your budget to avoid financial strain'. Be aware as well of hidden costs such as processing fees, annual fees, early repayment penalties and late payment charges. Beyond that, it is important to consider the loan tenure, which is the amount of time you have to repay your loan. The duration is determined by several factors such as your income and age. Often, those who are nearer to retirement will have a shorter loan tenure than, say, someone in their 20s. 'A shorter tenure typically means lower total interest but higher monthly repayments. "The tip here is to pick the shortest tenure based on your monthly finances and not stretch yourself too thin,' Mr Mark Tan added. SHOULD YOU BORROW TO INVEST? When it comes to taking a loan to invest, theoretically, you could profit if the interest rate of your investment is higher than the cost of the loan, the experts said. 'As a general rule, only borrow what you can comfortably repay and invest amounts you can afford to lose,' Mr Mark Tan said. 'Although investment products may promise returns surpassing the interest on a loan, the unpredictability of markets poses substantial risks,' he warned. It is important to conduct thorough research, consider potential losses and consult a licensed financial adviser before making such investments, he cautioned. Mr Lawrence Tan said that taking a loan to invest doubles the risk. 'Normally, this is not encouraged unless the investor has sufficient buffers to repay the loan at any time should the leverage risk turn out to be unsustainable,' he cautioned. 'It's not about 'appetite' or psychological tolerance for risk – it's about having the means and capacity.' It is especially not advisable when it comes to investing in the stock market or in speculative assets such as cryptocurrency, Ms Lye warned. 'Although stocks are assets, their value is not stable and can be volatile. To benefit from investing in stocks, you need to have the time horizon to ride through volatility,' she said. 'Borrowing means that you may not be able to do so and you can lose more than you invested.' Even if the investment falls, loan repayments will still be due. 'When loan repayments are due, you may be pressured to sell and actualise your loss just to stay afloat. "There could also be potential loss when the cost of the loan shoots up unexpectedly and exceeds the potential profit,' she further warned. 'In today's uncertain macroeconomic environment, it is even less advisable to do so. It creates a lot of unnecessary stress, which can cause you to take desperate action with very bad consequences.' SHOULD YOU PAY OFF YOUR LOAN AS FAST AS POSSIBLE? As far as I can tell, most people will have to take a loan at some point in their life such as for housing. So how does one deal with it? When it comes to repaying your debts, the experts said there are two schools of thought. One is to pay the loan off in full quickly to reduce your liability. The other, if you have spare money, is to invest it at a rate higher than your loan's interest rate – allowing you to profit from this as you make your monthly repayments. There are some things to consider before deciding if you should quickly pay off your loans. This includes early repayment fees and if the interest rates are higher than the potential investment outcomes if you want to invest. Ms Lye said that when it comes to housing loans, they often feature lower interest rates. And because a property is a stable asset that often appreciates over time, it could be worth investing your savings or spare money that you have instead of quickly paying off your loan. 'But even if you do not invest, paying off a housing loan with cash early has a potential downside,' she added. This is because cash and investments are more liquid than property, which is difficult to monetise. 'This loss of flexibility can become a constraint should you lose your job and cash becomes precious.' However, repaying a loan quickly could provide peace of mind, as well as ensure that you don't incur late repayment fees if you forget to make your repayment. Ultimately, the warning is clear. It is important to be prudent when taking up loans and it is always about having the money you can afford to spend – or lose. If this is too late for you and your debt has become too overwhelming, with the unsecured outstanding balance exceeding 12 times your monthly salary, you may want to consider debt consolidation to combine your debts into a single repayment account. This reduces the risk of incurring multiple late fees and interest fees since you can keep track and make repayments in a single account, Ms Lye suggested. Mr Lawrence Tan said that there are free financial literacy courses online that people can take before deciding to take a loan, such as those provided by the Institute of Financial Learning. Considering the risks involved, I probably would not take up a loan to invest in hopes of turning a higher return.
