Category: Moneywise

Retirement is often seen as the long-awaited reward after years of hard work. The daily grind of morning alarms, office politics and stressful commutes finally come to an end, regaining full control over your time and how you spend it.

While retirement offers newfound freedom, it also brings some unexpected losses. Some, like a steady paycheque, are obvious. Others, like a sense of purpose, might sneak up on you.

Without proper planning, these changes can leave you feeling unprepared. Here are five major things that tend to disappear in retirement, and what you can do in the present to make sure they don’t catch you off guard in the future.

1. The financial safety of your paycheque

The most immediate change when you retire is the loss of your steady income. For years, your paycheque arrived on a set schedule. In its place, you’ll rely on withdrawals from your RRSP, TFSA, CPP, OAS and any other savings, pension plans or investments you’ve built up over time.

Many Canadians find this transition more jarring than they expected. Moving from earning and saving to withdrawing and budgeting can feel uncomfortable.

A solid withdrawal strategy is key. The traditional “4% rule” has been debated in recent years, with some experts suggesting a lower withdrawal rate for longevity. Diversifying income streams through investments, rental income or part-time work can also help ease financial stress.

If you take the investment route, Masterworks — an investment platform — makes it easy to diversify your portfolio with the inflation-hedging properties of fine art.

Starting with as little as $20, you can buy and sell shares of fine art pieces the same way you’d trade stocks and enjoy the potential of steady, passive income.

2. Your risk tolerance

While working, taking risks with investments can feel manageable because you’re still earning and contributing. If the stock market dips, you have time to recover.

But in retirement, market downturns have a bigger impact on your portfolio and your ability to withdraw funds safely. This is known as the "sequence of returns risk" — when early withdrawals during a market downturn deplete savings more quickly than anticipated.

Many retirees move large portions of their savings into conservative investments, such as GICs or bonds, to minimize risk. However, being too cautious can lead to another risk: outliving your money.

A balanced investment strategy is crucial, and Wealthsimple, a Canadian robo-advisor renowned for its user-friendly platform, low fees and focus on socially responsible investing, can help you navigate this using their managed investing option, starting with as little as $1.

Keeping some exposure to equities ensures continued growth, while maintaining one to two years’ worth of cash reserves can help manage short-term market volatility. By opting for Wealthsimple’s managed investing strategy, you can take a more hands-off approach but still have input on your financial goals and set your risk tolerance.

3. Your sense of purpose

Work isn’t just about earning money. It also provides structure, social interaction and a sense of accomplishment. Retirement can leave many people feeling lost.

A study by the National Library of Medicine found that lacking a sense of purpose can lead to depression, substance use and self-derogation. Social isolation is also a growing concern, particularly for men, who tend to have fewer social connections outside of work; The Government of Canada states how 30% of seniors are at risk of becoming socially isolated.

The best way to avoid this emotional downturn is to plan beyond just your finances. Volunteering, pursuing hobbies or even taking on part-time work can help create structure and fulfillment.

4. Employer-sponsored benefits

Losing a paycheque is one thing, but losing employer-sponsored benefits — especially health insurance — can be even more challenging. In Canada, provincial healthcare covers many medical expenses, but not everything.

Prescription drugs, dental care, vision care and long-term care costs can add up quickly. A report from Innovative Medicines Canada found that nearly 70% of Canadians — or more than 27 million — rely on employer-sponsored health plans for supplemental coverage.

If you retire before 65, you may need to purchase private health insurance or pay out-of-pocket for certain medical expenses. Planning ahead by setting aside savings specifically for healthcare can make a big difference come retirement age. It’s also important to do your research and ensure you’re getting the most affordable coverage possibly. To do this, you can use a tool like PolicyMe.

PolicyMe connects you to the most affordable insurance options available near you. All you need to do is fill in some information about yourself and your needs and they will promptly provide you with quotes for comprehensive insurance policies that align with your needs.

5. Your spending habits

Many retirees enter what financial planners call the “retirement honeymoon” phase — travelling more, dining out frequently and taking on expensive hobbies. While this newfound freedom is well-deserved, it can lead to financial trouble if spending isn’t balanced with long-term needs.

As people age, healthcare costs tend to rise. Without careful planning, early retirement spending can lead to financial strain later in life.

For example, accessing moderate at-home care for 22 hours per week, with an average cost of $37/hour, will translate to $3,000 per month. This is in stark opposition to the nearly half of Canadians assuming that at-home care costs averages around $1,100 per month.

Using a money management app like Monarch Money can help keep you on track both before and during retirement. Monarch Money allows you to track your spending, investments and account balances all in one place so making (and sticking to) a budget is streamlined. The financial transparency it provides can also make it easier to notice if you’re oevrspending or leaning into that honeymoon phase a bit too much.

Sign up for Monarch Money today and Get 50% OFF your first year with code NEWYEAR2025.

Final thoughts

Retirement is a major life transition, and while it brings freedom, it also comes with challenges. By understanding what disappears after retirement and planning accordingly, you can ensure a more secure and fulfilling future.

Making informed decisions about your finances, investments, social life and health coverage will help you navigate retirement with confidence. The key is to prepare early, stay adaptable and make choices that align with your long-term goals.

Sources

1. National Library of Medicine: Purpose in Life in Older Adults: A Systematic Review on Conceptualization, Measures, and Determinants, by PV AshaRani, Damien Lai, JingXuan Koh and Mythily Subramaniam (May 11, 2022)

2. Innovative Medicines Canada: Unlocking the Benefits: Private Drug Coverage’s Role in Canada’s Healthcare Landscape

3. Scotia Wealth Management: Healthcare costs in Canada: Planning for inflation-adjusted care (Jan 14, 2025)

This article 5 big things that disappear after you retire in Canada – Are you prepared? originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

In today’s turbulent economic climate, marked by President Trump’s recent tariffs on Canada, Mexico and China, concerns about a potential recession are escalating.

As markets react to these developments, investors explore strategies to protect their portfolios.

One such strategy involves inverse ETFs.

What are inverse ETFs?

Inverse ETFs, also known as bear or short ETFs, are designed to move in the opposite direction of a specific index or asset. For example, if the S&P/TSX 60 Index declines by 2% daily, an inverse ETF tracking this index would aim to increase by approximately 2%. This mechanism allows investors to hedge against market downturns and presents an opportunity to profit from them, instilling a sense of optimism in the face of market challenges.

Benefits of inverse ETFs

There are two primary benefits to inverse ETFs:

• Accessibility: Inverse ETFs provide a straightforward way for investors to hedge against market declines. Purchasing an inverse ETF is as simple as buying any other stock or traditional ETF through your brokerage account, giving you the power to protect your investments.
• Diversification: These ETFs cover various markets and sectors, enabling investors to target specific areas they anticipate will decline. Whether you’re bearish on the overall market, a particular industry, or even commodities like oil, there’s likely an inverse ETF available.

Risks and considerations

While inverse ETFs can be valuable tools, they come with notable risks, including:

• Short-Term Focus: Inverse ETFs are typically rebalanced daily, aiming to achieve their inverse returns daily. Over more extended periods, due to the effects of compounding, the performance of these ETFs can diverge significantly from the inverse of the target index’s performance. This makes them less suitable for long-term investment strategies.
• Higher Costs: Inverse ETFs often have higher expense ratios compared to traditional ETFs, which can erode returns over time.

Understanding Inverse ETFs through the S&P 500 and the VIX ETF

Suppose you believe the S&P 500 is overvalued and due for a pullback. Instead of shorting individual stocks or buying put options, you could buy an inverse ETF like the ProShares Short S&P 500 ETF (NYSE:SH). This ETF aims to return the inverse of the daily performance of the S&P 500.

• If the S&P 500 drops 1% daily, SH should rise approximately 1%, which is what we mean by ‘inverse returns ‘. This means that for every 1% drop in the S&P 500, SH should increase by 1%. This is the basic principle behind inverse ETFs.
• If the S&P 500 rises 1%, SH will decline roughly 1%.

For more aggressive traders, leveraged inverse ETFs exist, such as ProShares UltraShort S&P 500 (NYSE:SDS), which seeks twice the inverse return (-2x).

The role of the VIX and volatility ETFs

Another way investors hedge against market downturns is through volatility ETFs tied to the VIX, or CBOE Volatility Index, often called the “fear index.” The VIX tends to spike when the market falls, making it a popular hedge.

Instead of shorting the market directly, you could buy an ETF like ProShares VIX Short-Term Futures ETF (NYSE:VIXY).

• When stocks decline and fear rises, the VIX increases, and VIXY typically rises.
• When markets are calm or rising, the VIX drops, and VIXY declines.

However, VIX ETFs come with their risks, as they track VIX futures rather than the actual index, which can lead to significant decay over time.

Key takeaways

• Inverse S&P 500 ETFs like SH or SDS allow investors to bet against the broader market.
• VIX ETFs offer exposure to market volatility but can erode in value due to the structure of futures contracts.

Is investing in inverse ETFs right for you?

Given the complexities and risks associated with inverse ETFs, they may not be suitable for all investors. If you’re considering them as a hedge against potential market downturns, it’s crucial to know how and when to use inverse ETFs. To help, here are three general rules for adding an asset to your investment portfolio.

Understand the Product: Ensure you fully comprehend how inverse ETFs work, including their daily rebalancing feature and the implications for longer-term performance. This knowledge will empower you to make informed investment decisions, enhancing your sense of control and confidence.

Assess Your Risk Tolerance: These instruments can be volatile and are generally intended for short-term strategies. Align their use with your risk tolerance and investment objectives.

Consult a Financial Advisor: Before incorporating inverse ETFs into your portfolio, discuss your plans with a financial advisor to ensure they fit your investment strategy.

While inverse ETFs offer a mechanism to profit from potentially or hedge against market declines, they require careful consideration and understanding. Before proceeding, ensure they align with your investment goals and risk tolerance.

This article Trump’s tariffs, market chaos and the rise of inverse ETFs: How investors are hedging the stormoriginally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Canadians are heading to the polls on April 28. The snap election, called by newly annointed Liberal leader and Prime Minister Mark Carney, comes amid a growing sense of economic uncertainty, driven by the dual challenges of rising prices and the significant risks posed by the current US administration under President Donald Trump.

As the US continues to escalate its protectionist stance, Canadians are increasingly anxious about the potential impact on everything from the prices of goods and services to job stability, especially in sectors highly dependent on cross-border trade. While inflation remains a concern for many, it is the looming trade risks under Trump’s policies that are pushing economic security to the forefront of the election. With these threats now central to economic discussions, Canadians are closely scrutinizing the fiscal strategies put forward by the major political parties and their readiness to manage these unprecedented challenges.

This means this election is not only a referendum on inflation and domestic fiscal policies but also a barometer on how Canadians feel about the current slate of Canada leaders in managing the risks posed by the Trump administration’s unpredictable and aggressive trade tactics. The four party leaders — Prime Minister Mark Carney (Liberal), Pierre Poilievre (Conservative), Jagmeet Singh (NDP) and Yves-François Blanchet (Bloc Québécois) — have outlined different approaches to fortifying Canada’s economy, and their strategies are being weighed heavily by voters in this high-stakes political climate.

With the global trade landscape in flux, the ability of Canada’s next leader to effectively navigate the volatile relationship with the US will be a deciding factor in how Canadians cast their votes this election.

Here is a cheat sheet to help you get a better idea on what each leader and each party promises to do to help Canada’s economy.

Liberal leader: Mark Carney

Since taking over as Liberal leader and Prime Minister in March 2025, Mark Carney has taken a different approach to economic policy than his predecessor, Justin Trudeau. While Trudeau focused on government spending to drive economic growth and social equity, Carney is placing a stronger emphasis on fiscal responsibility and structural reforms.

One of Carney’s major priorities is eliminating internal trade barriers within Canada to create a more unified and efficient national economy. This initiative aims to strengthen domestic markets and reduce reliance on external trade, particularly amid rising protectionist policies abroad.

Unlike Trudeau’s significant deficit spending, Carney has signalled a shift toward balancing budgets while still maintaining targeted investments in infrastructure, innovation, and green technology. He argues that Canada must be more strategic with public funds, ensuring that investments yield long-term productivity gains.

Mark Carney’s professional experience

Mark Carney is not a seasoned politician. However, his long career as an economic leader includes serving as the Governor of the Bank of Canada and Governor of the Bank of England — both terms served during particularly difficult economic climates. During his tenure at both national banks, he gained significant experience managing financial crises and maintaining economic stability. Carney’s expertise in global economic systems, inflation control and financial regulation gives him a solid foundation for navigating the current challenges Canada faces, particularly the risks stemming from external economic pressures. His background in international finance and economic policy would help him guide the country through complex financial issues.

Conservative leader: Pierre Poilievre

Pierre Poilievre has focused on traditional fiscal discipline and the principles of limited government intervention. His platform emphasizes balanced budgets and reduced government spending as key to fostering economic stability. Poilievre advocates for lower taxes and a streamlined public sector, arguing that reducing regulatory burdens will encourage private sector investment and job creation.

Poilievre’s policy proposals are aimed at reducing the national debt and curbing government expenditures, particularly in areas where his party has identified inefficiencies. He argues that fiscal restraint will create a more dynamic economic environment, ultimately benefitting Canadians by fostering job growth and financial security.

Pierre Polievre’s experience

Pierre Poilievre is a seasoned politicians. He has served in various key positions, including as Minister for Employment and Social Development and Minister of State for Finance. Throughout his career, Poilievre has focused on fiscal responsibility, advocating for lower taxes, reduced government spending and balanced budgets. Poilievre’s approach to economic management is grounded in his belief in a smaller government, less-intrusive policies, leaner public sector programs combined with a market-driven economy, which he argues would help Canadians prosper.

NDP leader: Jagmeet Singh

Jagmeet Singh has presented a fiscal policy focused on social equity and robust public investment. He has advocated for increased public spending on healthcare, education and affordable housing. His proposal includes a progressive tax regime that targets higher-income earners to fund expanded social programs and infrastructure projects.

Singh’s emphasis is on expanding social programs and ensuring that government spending is directed toward alleviating the burden of rising living costs. His plan is intended to deliver immediate relief while also investing in long-term structural changes to reduce inequality and promote economic fairness.

Jugmeet Singh’s experience

Jagmeet Singh has been the leader of the NDP since 2017 and has a background in law and public service. His focus has been on addressing inequality through policies aimed at improving public services like healthcare and housing. Singh advocates for a progressive tax system that targets wealthier individuals to help fund current and proposed social programs. His leadership emphasizes the importance of inclusive economic policies, aiming to ensure that Canada’s economic growth benefits all Canadians, particularly those most affected by rising costs. Singh’s experience as a political leader and his advocacy for social justice inform his approach to managing the economy.

Bloc Québécois leader: Yves-François Blanchet

Yves-François Blanchet has outlined a fiscal policy that prioritizes Quebec’s economic autonomy and the protection of provincial interests. His platform focuses on securing greater financial transfers from the federal government to Quebec for healthcare, education, and infrastructure projects. Blanchet argues that Quebec should have more control over its tax revenues and spending to tailor economic policies that best suit the province’s needs.

Blanchet has also proposed measures to support small and medium-sized businesses in Quebec through targeted tax incentives and funding for local industries. His fiscal stance is rooted in advocating for a fairer redistribution of federal funds to ensure Quebec receives what he argues is its fair share of national resources.

Yves-François Blanchet’s experience

Yves-François Blanchet, the leader of the Bloc Québécois, has significant experience in Quebec’s provincial politics, having served as a minister in various departments. He focuses on ensuring that Quebec’s economic needs are addressed within Canada’s broader national policies. Blanchet advocates for greater financial autonomy for Quebec, including securing better federal transfers for the province. His economic approach is shaped by his commitment to protecting Quebec’s industries and ensuring that its economic interests are well-represented in the federal landscape.

Bottom line

As Canada prepares to vote, these different fiscal policies underscore a broader debate about the role of government in economic management during challenging times. With each candidate presenting a distinct vision for how best to navigate the current economic turbulence, Canadians face a critical decision at the ballot box — a decision that will shape the country’s fiscal future for years to come.

This article Canada election 2025: How rising prices and party policies will shape the nation’s economic futureoriginally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Matthew just discovered his 79-year-old mother, Barbara, has found herself deep in an online gift card scam. The retired teacher had received a friend request from an unfamiliar, but friendly fellow named Robert a few months back and quickly struck up a fast friendship.

But one day, Barbara’s new friend promised to teach her how to invest her savings to see 100 times returns. In exchange, she had to send him a few thousand dollars in the form of gift cards to all sorts of stores, including Apple, Target and eBay.

By the time her son got a whiff of it, Barbara had already sent “Robert” close to $400,000 — draining her 401(k) and wracking up some serious credit card debt. And she has yet to cut off contact from her friend, continuing to send him gift cards fairly regularly.

Sadly, their story is far from unusual. In fact, more and more older Americans are falling victim to scams. Here’s what you need to know to protect your family from the “Roberts” of the world.

What you can do to protect yourself and elderly relatives

Cybercrimes are on the rise, but there are many steps you can take to protect yourself and your older loved ones. Sitting down with your loved ones and going over strategies to protect themselves online can go a long way.

For starters, remind them before sending money online to always double-check the recipient’s information. Contact them to confirm that important details, like their address, phone number and bank account information are correct.

Strengthening your online privacy and safety settings is also critical. For example, limiting who can send Facebook messages to your or your family member’s inbox could help keep scammers out.

Emphasize that it’s crucial to report suspicious activity, like requests from strangers to share your personal or financial information. If someone shares a suspicious link with you, don’t click it. Instead, report the message and block their profile.

If you think you or your loved one has become a victim of a scam, file a report with the Federal Trade Commission (FTC) at FTC.gov. Note that victims who are at least 60 years old and need help filing a report can contact the National Elder Fraud Hotline at 1-833-372-8311.

Most common scams targeting seniors

While cybercrime is on the rise, the ways online thieves target older adults and trick them into giving them money are becoming increasingly varied and sophisticated.

The gift card scam is one of the most common ways scammers steal money from older Americans. Often, a thief will send you a text or social media message impersonating a tech company or government organization, saying that you owe them money and that something bad will happen if you don’t immediately pay them with a gift card.

However, when you send the scammer the barcode number and pin on the back of the gift card, they take the money and run. To avoid this scam, remember that no legitimate organization will ask you or your elderly relative to pay them in gift cards.

Another method thieves use to steal money from older people is the grandparent scam. It happens when someone calls you impersonating your grandchild. Older adults may get an unexpected call from someone impersonating their grandchild, saying they’re in danger or trouble and need you to send money to help them. One sign that this is a scam includes a person asking for payment in gift cards or crypto.

Older Americans should also watch out for Medicare scams, which often involve someone pretending to be a Medicare representative to steal your personal information. To guard against this scam, Medicare.gov recommends only giving your Medicare number and other personal info to trusted people, like your doctor or insurer.

Older adults lost around $1.9 billion due to fraud in 2023, according to the most recent data from the FTC. It’s important to arm your loved ones with the information they need to prevent them from becoming a statistic.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

There’s a lot to consider when preparing for retirement. Your savings and investments are often top of mind, but there are a few key dates that must be figured out as well — specifically, when to retire and when to start collecting Canada Pension Plan (CPP) benefits.

Let’s say, for example, that you and your spouse are nearing full retirement age and have $1.5M saved for your golden years. You’re thinking about retiring soon but you want to ensure that you and your partner are well prepared.

You’ve done some quick calculations: Together you have no debt, average health, no mortgage, annual expenses that total $28,000 and a combined CPP benefit that would provide you over $34,000, annually.

On paper, it looks like you and your spouse are doing quite well, but in order to assess whether you two are ready to retire, let’s get into the numbers.

Understanding your CPP benefits

Canadians can start collecting CPP benefits as early as 60, but anyone who does so will see a reduction in the size of their benefit cheques.

To avoid a reduction, Canadian seniors are encouraged to delay collecting CPP until at least 65, but there are advantages to delaying your claim even further. CPP benefits increase by a certain percentage for every month (0.7%) that you delay your claim — up to 8.4% per year or a maximum increase of 42% if you start collecting at 70 or thereafter. Just be mindful that 70 is the cut off age in order to reap the rewards of an increased CPP.

Since you and your spouse are nearing this golden age, the two of you won’t have to wait long to claim your full benefits — which, as you’ve already calculated, would give you $34K per year. With annual expenses totaling $28K, your benefits would barely be able to cover your living costs, but that could change.

But the good news is that you and your partner won’t have to rely solely on CPP in retirement. With $1.5M in savings, the two of you could settle on a safe withdrawal rate of, say, 3.7% — which would give you an additional $55,500 per year. Coupled with the $34K you’d receive in CPP benefits, that’s an annual income of roughly $89,500.

That’s much more than you would need to cover your $28K in annual expenses. In fact, with so much extra annual income, you and your partner may even consider a more conservative safe withdrawal rate of 2% — which would give you $30,000 per year from your savings.

Add that to your $34K in benefits and you’d have roughly $64K in annual income. That’s more than enough to handle your annual expenses, and a lower safe withdrawal rate will help you stretch your savings even further.

Supplementing your CPP benefits

Delaying CPP benefits until age 70 isn’t always an option for everyone. And while that may seem appealing to you and your partner right now, uncertain economic factors derail your plans quite quickly.

If you and your partner were to retire according to plan — $34K in CPP, coupled with a safe withdrawal rate from your savings — the two of you could retire comfortably. But inflation is likely to drive your annual expenses up in the coming years, and the yearly cost of living adjustment on your benefit cheques doesn’t always keep up with inflation.

The good news is, with CPP you are allowed to work as much as you want without your benefit being affected. This means that if you and your partner were to retire as planned, only to realize that your current income stream savings wasn’t enough to keep you afloat, you could always take on a part-time job without it affecting your benefits.

Since you have the freedom to earn as much money as you can without your benefits being affected, you may decide to claim CPP at 70 to give you some retirement income while also working part-time, earning extra income to supplement your benefits.

This could allow you to lean even less on your retirement savings, which means your savings can stretch a little further. And if you’re using less of your savings in retirement, that money can remain in your investments, allowing you to potentially add more to your retirement funds.

Ultimately, you and your partner will need to decide what works for you, but with a nest egg of $1.5M and $34K in CPP annually, you can likely retire quite comfortably.

Sources

1. Government of Canada: When to start your retirement pension

2. Government of Canada: Canada Pension Plan amounts and the Consumer price index

This article My partner and I have $1.5M in savings, no debt and nearing 70. We’re considering retiring and claiming CPP. Do we have enough to retire comfortably? originally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Between rising interest rates, a shaky stock market and the threat of a trade war with the US, it’s no surprise that financial uncertainty has instilled fear in people in recent years.

And unfortunately, this financial uncertainty makes people more vulnerable to falling for get-rich-quick (or “quicker”) schemes in times of need.

More specifically, multi-level marketing (MLM) schemes have proven detrimental for many people. So, before handing money over to a financial MLM, it’s important to take a closer look at what you’re actually getting into.

What is a financial MLM scheme?

Most of us are familiar with MLM schemes (aka “direct sales” or “network marketing”). These companies rely on independent consultants (usually someone you went to school with) to push alleged immune-boosting essential oils or shakes that help you drop 20 pounds.

However, MLMs haven’t just cornered aspects of the wellness market. Now, they’re selling financial products, too — and these companies aren’t new. Some bigger financial MLMs have been selling financial products like mutual funds and annuities since the 1970s.

Like any MLM, when you buy their product, the rep receives a commission, but so does the person who recruited them and their recruiter’s recruiter, and so on.

How to spot an MLM scheme: questions to ask yourself before investing

We are not saying all MLMs are scams. Under Canadian law, if they’re selling you a product or service, then they’re considered legitimate businesses. However, there are some questions you can ask yourself before investing your money in businesses to ensure your financial security.

1. What sort of credentials does the person offering this product have?

MLMs generally rely on their existing representatives to recruit other people as part of their “downline.” This means anyone with a pulse could land themselves a position as an independent rep for a financial MLM.

Ask yourself and them what sort of credentials they have. In Canada, individuals who sell financial products, including mutual funds, securities and insurance, must meet certain educational and employment requirements to be licensed.

When buying mutual funds, you want to deal with a person who has done a Canadian Securities Course (CSC) or Investment Funds in Canada (IFC) course. While you’re at it, do a Google search on the company to see if there are any red flags, such as current or past lawsuits.

2. What are they promising you?

Before you invest in a financial product, ask what the return on investment is, then compare it to what’s available on the market. Is it on par with the return from other mutual funds? Are their rates of return two, or three times what reputable financial products deliver?

Similarly, before signing up for a digital financial scheme, ask for research or materials that prove their claims are credible. If anyone is promising things like “guaranteed high returns” with “no risk,” consider yourself forewarned.

3. Do you feel pressured to invest?

It can be especially challenging to turn down an investment opportunity when it’s a family member or good friend pushing a financial product on you. That’s because MLM recruits are usually encouraged to sell to their “warm market.” The cold hard truth is it’s your cold hard cash — you have a right to invest it how you see fit.

What to do before you sign up with an MLM

MLMs are a mixed bag. Some are reputable with long track records, while others have questionable reputations that should be noted. Protect yourself by doing your homework and taking these steps:

• Research the business. Check different websites for reviews and first-hand experiences. Look at numerous sources. Is there a common denominator? A common complaint that keeps coming up? If something seems fishy, walk away.
• Read the fine print. Know that MLMs must disclose the compensation actually received, or likely to be received, by a typical participant. If you can’t readily find this information, then walk away.
• Ask about compensation plans. With these plans, MLM companies offer a financial incentive to recruit new members. It makes your participation a money-making proposition for the person trying to get you to sign up. That makes it difficult to get unbiased answers from the recruiter.
• Inquire about stock obligations. You don’t want to get stuck with stock. Steer clear of MLMs that don’t have a reasonable buy-back guarantee or refund policy, allowing you to return your extra products when you decide to end your career with that company. If it doesn’t provide details on that policy proactively, ask to see it. Plan operators have to tell you about it.
• Be honest with yourself. Do the promises being made seem too good to be true? Don’t get taken in by the allure of “get rich quick” schemes. These plans may seem an easy way to wealth, but you’ll end up doing as much work as any other job.

The bottom line: should you consider investing in an MLM company?

You know what they say, “If it looks like a duck, swims like a duck, and quacks like a duck…”

If someone is pushing an investment opportunity on to you that sounds too good to be true, it probably is.

The key is to check out opportunities carefully. Some people do quite well when they sign on with an MLM company. Some have long track records and are credible. Others are not and leave those participating in them with less money than when they started. That underscores the importance of taking the time to carefully assess each opportunity and exercise caution and due diligence before you jump in.

This article Financial MLMs: how to spot the difference between a scheme and an actual businessoriginally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Would you trust a company with your most personal data — your DNA — if it was on the brink of collapse? Millions of 23andMe customers are now facing that unsettling reality as the genetic testing company faces an uncertain future.

The California-based company offers DNA self-testing kits for users to explore their ancestry. It went public in 2021 with a $3.5 billion IPO but has faced significant challenges in recent years. In 2023, a major data breach compromised 6.9 million users’ information, leading to a financial settlement. Since then, the company has struggled, with all independent directors resigning in September and a 40% workforce reduction in November.

On March 23, 2024, 23andMe announced it was "entering a voluntary Chapter 11 restructuring and sale process." While the company assured users their data remained protected and operations would continue, concerns grew, especially after California Attorney General Rob Bonta urged customers to delete their information.

"California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” Bonta said. “Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company.”

Bonta isn’t the only attorney general to act. Officials from Arizona, South Carolina and New York have all urged consumers to delete their data, providing instructions to do so by logging in, navigating to the Settings section, choosing the 23andMe data option at the bottom of the page and opening the "Delete Data" section to click "Permanently Delete Data."

However, not all users have been able to successfully remove their information. Here’s what happened when they tried, along with details on the bankruptcy proceedings, their implications for consumers and steps to protect your data.

CEO steps down and stock plummets as 23andMe enters bankruptcy

Sunnyvale’s 23andMe reportedly has $214.7 million in debt compared with $277.4 million in assets. It filed for Chapter 11 bankruptcy in hopes of selling "substantially all of its assets."

Chapter 11 allows struggling businesses to restructure debts while continuing operations, with the goal of facilitating a sale. Board Chair Mark Jensen called bankruptcy "the best path forward," as it could reduce costs and resolve legal and leasehold liabilities. Despite this, the company’s stock lost nearly all its value, now trading below below $1 per share.

As the bankruptcy was announced, CEO and co-founder Anne Wojcicki also stepped down — but not for the reason assumed.

"I am supportive of the company and I intend to be a bidder," Wojcicki stated on social media. "I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder."

The company aims to continue operations, and if Wojcicki successfully acquires the business, it could emerge more financially stable post-restructuring. However, the bankruptcy has severely damaged trust, making recovery an uphill battle for any new owner.

How to protect your personal information

With 23andMe looking for a buyer, many consumers fear their private DNA data and other details will be sold, such as payment information, could be sold. Their concerns are rightly placed.

The company has stated that both it and any future owner must adhere to its privacy policy. However, it also acknowledged that in the event of "bankruptcy, merger, acquisition, reorganization or sale of assets, your personal information may be accessed, sold or transferred as part of that transaction." A new owner could also change the privacy policy going forward.

Sally, many consumers concerned about this issue went to the website to try to delete their data — but so many people tried to take this action at the same time that the computer system struggled to keep up, and consumers got error messages.

"This has been a nightmare," Pauline Long of Alabama told BBC. Long worried 23andMe would retain her data and attempted to delete it, but she had to wait two hours to speak with a customer service agent before successfully closing her account. She remains skeptical that her information was fully erased.

The company claimed the technical issues have been resolved, though users may need to provide additional verification before deletion requests are processed. It also noted "some limited information" would remain. Customers facing issues should contact 23andMe’s Customer Care via [email protected] for help.

If you are concerned about your DNA privacy, follow the deletion steps online, and if you encounter issues trying online first, and then reaching out via email if necessary. This is especially important because, while financial data breaches can be mitigated through measures like credit freezes, there is no comparable sageguard for genetic falling into the wrong hands.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Some or all links contained within this article are paid links.

A 401(k), an employer-sponsored retirement plan with tax benefits, is one of the most popular ways Americans save for their golden years.

Collectively, they hold almost $9 trillion in assets for 70 million participants (active and retired), according to the latest figures from the Investment Company Institute.

The average balance in these accounts is $132,300, according to a recent Fidelity report. The highest average balance is seen among Americans ages 65-69 at $252,800.

It may not surprise you to learn, therefore, that few Americans have a balance topping $1 million in their 401(k) workplace retirement plans. But those who have reached that milestone no doubt worked hard to get there. And with proper planning, you can, too.

A small percentage of savers

According to Fidelity, only 544,000 individuals are 401(k) millionaires, making up less than 3% of the 24.4 million 401(k) participants they surveyed.

But there’s a reason this number is so small. Building wealth for retirement takes effort and time. And if you don’t start early, you might really struggle to catch up.

Seeking professional help from a qualified financial advisor can be a game-changer when it comes to managing your money, offering guidance on investing, budgeting, tax strategy and more.

Advisor.com is an online platform that matches you with a vetted financial advisor suited to your needs.

Once you’re matched with an advisor, you can book a free consultation with no obligation to hire.

What it really takes to build wealth

People who retire with $1 million or more tend to start working toward that milestone early on in their careers. If this is your retirement goal, then one of the most important things you can do is start funding an IRA, 401(k), or another dedicated investment accountat a young age.

Even small, consistent contributions can grow significantly, thanks to compound interest. On the contrary, waiting too long could mean missing out on valuable years of growth.

For example, if you start saving at 25 with a $420 monthly contribution and a 7% return, you’ll have over $1 million by age 65. But watch what happens when you wait until age 35 to start saving that money. Assuming the same monthly contribution and return, you’re looking at roughly $476,000 — losing over $500,000 in potential retirement wealth.

One of the easiest ways to start this habit is by automatically investing your spare change with Acorns.

The app rounds up the price of your everyday purchases to the nearest dollar and invests the difference into a diversified portfolio. This means that every transaction — from your morning coffee to grocery shopping — contributes to building your retirement nest egg.

Sign up now with a recurring contribution and you can get a $20 bonus investment.

Live below your means

Living below your means is one of the most powerful financial habits you can adopt, helping you to save, invest and prepare for life’s unexpected challenges. One often overlooked way to cut costs is by revisiting your insurance policies — whether it’s auto, home, or pet insurance.

OfficialHomeInsurance.com takes the hassle out of insurance shopping. In just under 2 minutes, you can explore competitive rates from top insurance providers and save an average of $482 per year on your plan.

Home insurance premiums aren’t the only thing coming out of homeowners’ pockets. Car insurance rates rose an average of 16.5% in 2024, according to ValuePenguin.

OfficialCarInsurance.com lets you compare quotes from trusted brands, including Progressive, Allstate and GEICO, to make sure you’re getting the best deal.

You can find deals starting at just $29 per month.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.