Doucet, now 36, spent five days in a Majorca hospital before being transported by ambulance to Majorca’s airport and flown to Gatwick Airport in London, England. From there he was transported by ambulance to Heathrow airport and then flown home first class to Brantford, Ont. His insurer, RBC, hired a Canadian nurse to accompany him. The total bill: $22,727.50.

Fortunately, Doucet had spent $63 on travel insurance to cover him for the 11 days he was away. “Best purchase I ever made,” he says. “Quite apart from what it would have cost me if I had to pay for it myself, I don’t know how I would have handled the logistics of getting myself home.”

Indeed, when it comes to preparing for holidays, travel health insurance should be at the top of your list. Provincial health insurance plans offer sparse coverage for travellers outside of Canada and that can mean big trouble if you need hospital care. “It’s really not wise to travel outside of Canada without insurance,” says Milan Korcok, a long-time medical writer and Florida-based editor of Travel Insurance News (travelinsurancefile.com). Even if you’re just popping across the border to do some shopping, he points out, you need to be protected. “Health care is more expensive in the U.S. than pretty much anywhere in the world.”

Fortunately, protecting yourself from medical mishaps on the road doesn’t have to cost a fortune. Herewith our tips on how to keep costs down:

Avoid doubling up on coverage

“We don’t bother with travel medical insurance because we’re both covered through work,” says 35-year-old Alysia Isidros of Mississauga, who co-authors the blog Beachjunkies.blogspot.com with her husband Mike Solon, 33. Similarly, premium credit cards frequently include travel medical insurance and trip cancellation insurance. The caveat: study the policy closely to make sure you know what you’re getting, advises Korcok. Insurers often limit how much they’ll pay out for claims and restrict coverage to shorter trips.

Don’t buy from your travel provider

Most travel agents flog travel insurance, but you can often get it cheaper elsewhere. Consider that an all-inclusive travel insurance package for a 52-year-old on a $1,500 one-week trip to Aruba rang in at $145.80 per passenger through a package tour operator, including up to $5 million in medical coverage. By contrast, online insurance provider travelguard.ca offered an all-inclusive package for $92.88, including $10 million in emergency medical coverage.

My wife and I have a portfolio that is scattered around a bunch of different places—a mutual fund company, a bank investment arm with an advisor, an employer pension-matching plan plus stock options and a self managed discount brokerage account. I am concerned about this. Even though I keep track of the total portfolio using a personal spreadsheet I wonder if I should consolidate all of it into one location?

PS: My wife won’t let me touch her portfolio with the mutual fund company.

Answer:

Imagine taking the contents of your spice rack and scattering them around the kitchen: Cumin by the coffee maker, nutmeg with the knives and paprika peaking out from underneath the potato peeler. While dinner would eventually find its way to the table, it would likely be a time consuming and frustrating cooking experience.

Finding the right level of complexity for your money is one of the most important things you need to do to be a smart person doing more smart things with your money. A lot of people have either too much complexity to keep a handle on everything, or too little to get the results they want.

In your case, it sounds like too much complexity. I have outlined how I suggest you simplify things in this related post, Retirement planning: The question you need to ask yourself. But first let me say that I understand why you’re concerned. Having a portfolio scattered around at different places exposes you to a number of risks. For example:

Over/under diversification

You want some exposure to different asset classes, sectors and geographies—but not too much and not too little. A scattered portfolio makes it harder to gauge how much exposure to a particular stock or sector you actually have. For example, if you hold multiple Canadian Equity mutual funds you might be over diversified—holding a small bit of everything such that your portfolio is unlikely to perform well compared to the benchmark. And you might be under diversified when it comes to your individual stock holdings. You say you have options through your employer, but you’ll want to make sure that those shares don’t dominate your portfolio. That is harder to assess when every thing is scattered around.

My wife and I have a portfolio that is scattered around a bunch of different places—a mutual fund company, a bank investment arm, an employer pension-matching plan plus stock options and a self-managed discount brokerage account.  I am concerned about this. Even though I keep track of the total portfolio using a personal spreadsheet I wonder if I should consolidate all of it into one location.

PS. My wife won’t let me touch her portfolio with the mutual fund company.

Answer:

As I mentioned in my prior post, Retirement savings in different places? Why it’s risky, there are a number of risks to having your portfolio scattered across a number of institutions and/or accounts.

Based on what you’ve told me, it sounds like the issue is only partly that your portfolio is scattered around.  The bigger issue in my opinion is that you don’t have one clear investment plan with one person accountable to execute and track it.  That person could be you but you’ll need to ramp up your involvement significantly.  Or that person could be a financial adviser.  In your case, it might be money well spent.

Here are the steps I recommend you take;

Interview financial advisers

I know you already have one through your bank’s investment arm.  I’d start with him or her, but include others too – a mix of fee-based and fee-only.  The questions I would ask are;

“Are you willing and able to develop an investment plan that takes into account my entire financial picture?”
Some advisers will only include assets that are housed with their company which is understandable given that that is the way fee-based and commission-based advisers are paid.  But some are game to think holistically.

“As an adviser, what would you say you are accountable for?”
Are they accountable for the completion of the investment plan, for the performance of the portfolio, for ensuring that you do what you need to do to meet your goals?  Some advisers take accountability very seriously, and others much less so, preferring to offer only advice which can be taken or discarded.

“How would compensation work?”
For fee-based advisers, the percentage charged typically goes down as the asset level goes up.  For fee-only, it is a flat rate, but goes up with the complexity of the task.

“How do you work with highly-engaged clients?”
Some advisers love people like you, who follow the markets and trade their own stocks.  And others don’t.

“How do you ensure that your recommendations are comparable to the benchmark indexes?”
Some advisors will try to focus you on absolute performance.  But given the stats against active management, I’m a firm believer in looking at performance versus comparable benchmarks over time.

“What does one of your investment plans look like?” Have them show you an example to see if it will meet your needs.

Choose an adviser based on your criteria

Your criteria will likely be different from mine—but to give you an idea, the things I recommend people look for are;

• Delivers performance that meets the benchmark index over time.
• Communicates in a way that works for you.
• Provides solid advice and doesn’t just sell products.
• Understands and works on all your goals.
• Holds you accountable for achieving those goals.

Set expectations with your financial adviser

Unrealized expectations are one of the biggest sources of conflict between clients and their advisers.  This is an opportunity for both of you to talk about how you want things to go.   Have this conversation even if you stay with your current adviser.

• Investment plan: What does it include, how often will we revisit it? Etc.

• Review of results: How often will it occur and how will the performance information be generated given the various accounts?

• Accountability: When something goes awry—and it will—how are we going to handle it?

• Communication: How often will we communicate and by which method—phone, in person, email?

• Trading at the discount brokerage: What do we need to agree on in terms of parameters for the trading at the discount brokerage?

Bottom line:  Have one investment plan and one person accountable to execute and track it.  That is going to be the best way to ensure you avoid the risks of scattered portfolio and get the best results over time.

PS: I would respect your wife’s boundaries on her portfolio.  But you might consider checking out the performance of the funds she holds and see how they stack up versus the benchmark index over time.  She may be in great funds that have been doing well against the benchmark.  Or she may be in funds that aren’t so great and you could help ensure that she’s in the best products her company offers.

• Planning a trip to Tokyo? Here are some the best budget hotels according to the Guardian.

• Save money by taking some time out of your busy schedule to plan your meals. Here’s a blogpost that walks you through what you should consider.

I learned the hard way that if you don’t know what you’re covered for, your home insurance won’t do you much good. Read on, and I’ll fill you in, so you won’t flush good money down the drain like we did.

What kind should you get?

Home insurance generally comes in three different flavours: basic, broad (also called “standard”), and comprehensive. Basic is cheap, but doesn’t protect your home’s contents, so it’s not typically used by homeowners. Broad only covers you from “named perils” that are specified in the policy, and nothing else. Comprehensive, or “all perils” insurance works the opposite way: It covers you for all conceivable calamities except a list of excluded items—typically earthquakes and floods—along with natural wear and tear, mechanical breakdown, settling, and deterioration. This is the kind most homeowners get, and it’s the kind that Fred de Francesco, an insurance agent with Hugh Wood Canada, strongly recommends.

If you get comprehensive insurance, be sure to run a comb through the exclusion list before you sign: “One company may exclude water damage, while another company includes it,” says de Francesco. Similarly, “some policies may restrict coverage during home renovations, while others have no such clause,” he says. Work from your home? Make sure your policy allows for this scenario. Otherwise, your insurer could decline to cover you when you make a claim.

You can pay extra to add “riders” to your policy to cover items on the exclusion list, and if you live in an earthquake-prone region in B.C., says Lindsay Olson, a vice-president at the Insurance Bureau of Canada, there’s a case to be made for purchasing earthquake insurance separately.

Of concern to a broader range of Canadians, sewer backup “has become a big peril for today’s homes,” says Generations Insurance agent Vicki van Santen. If your base policy doesn’t include it, it’s the one extra you should probably always add.

How much coverage do you need?

Don’t confuse the value of your policy with the market value of your home, which includes the land your home is sitting on. Your policy only needs to provide you with the funds to rebuild your home or repair its structure if it gets damaged.

These days most insurance companies assess the cost of rebuilding your home for you, so you don’t have to worry about how much coverage to get. So-called “guaranteed replacement cost” policies cover the cost of rebuilding your home when it gets damaged, no matter what the amount—even if the insurance company underestimated how expensive it would be. Remember, though, that when you renovate, you have to let your insurance company know, says Olson, as that will affect the replacement cost.

A better deal

When you’re buying home insurance, you’re almost always better off using an independent broker who deals with a number of insurance companies, so he or she can get you the best price possible.

To keep your premiums as low as possible, consider bundling your home and auto insurance policies together. “Using the same insurance company for both could shave up to 15% off your total bill,” says personal finance guru and author Gail Vaz-Oxlade. Other measures that could give you a break on premiums: a monitored burglar or fire alarm, a sprinkler system, and—believe it or not—quitting smoking. “Many fires are caused by careless smokers, and insurance companies recognize that non-smokers have a lower risk of fire loss,” says Olson.

Don’t forget what’s inside

Most comprehensive home insurance policies include contents insurance, which covers the cost of replacing your belongings, up to a set amount. But Margot Bai, a former insurance agent and author of the book Spend Smarter, Save Bigger, says this is one area where you could save money by taking the “named peril” route and only insuring big ticket items.

“If you make a claim every time the dog chews on your dining room leg or you drop wine on your laptop, the company could decide not to renew you,” she says. “You get contents insurance to cover the big stuff.”

As everyone knows, an RRSP account is where retirement savings goes. But less people know how to structure the account to make sure there’s something left at retirement. It comes down to one thing, says Gardner; holding long-term assets. Whether it’s a fund, ETF or stock, the investment needs to last for years, if not decades.

That means owning large-cap investments. Typically, larger companies with a market capitalization of at least $10 billion are safer than smaller ones. A mutual fund that holds Canadian bank stocks won’t rise in value as quickly as one that holds junior mining firms, but it won’t fall nearly as quickly either. Not only do large caps decrease volatility, but these companies, especially multinationals, aren’t nearly as likely to go bankrupt. A fund that holds decades old brands such McDonalds and Coca-Cola, for instance, will likely be around for the long-term.

AJ Sull, president and chief investment officer with Vancouver’s Pacifica Partners Capital Management, says dividend-paying companies should also be an integral part of an RRSP portfolio. There’re good for two reasons, he says. The first is that people don’t have to worry too much about whether their investments are increasing in value; regular dividend payments will keep money flowing into account. “You’re getting paid something while you wait for the stock price to rise,” adds Gardner.

The second is that dividend payments allow Canadians to buy more fund units or ETFs without adding to the principal. Ultimately, the more assets you own the more you’ll have when it’s time to retire. Imagine how much larger your portfolio will be after reinvesting dividends for 30 years.

Not only do Canadians have to buy long lasting investments, but a good RRSP also has the right asset allocation. Steven Belchetz, president and chief investment officer with Toronto’s T.E. Wealth, says that retirement portfolios need to be diversified globally. Canada’s market is concentrated in just three sectors, financials, materials and energy, so having too much domestic exposure could be risky.

For the equity part of an RRSP, Belchetz recommends having 50% of assets in Canadian securities, 25% in the U.S. and 25% in international markets. You still want to be more heavily weighted towards domestic securities because of the currency risks around non-Canadian investments.

When it comes to bonds or bond funds, what to buy depends on risk tolerance. Government bonds yield around 2%, but they’re extremely safe. Corporates have a better yield, but they’re riskier. Either way, the basic rules around age and asset allocation remain; own less bonds when you’re younger and more when you’re older. Sull says investors should have, at minimum, 20% of their RRSP assets in fixed income.

By sticking to large-cap, dividend-paying securities your retirement should be secure. Save your risky buying and selling for another account, says Gardner. “No matter if it’s an ETF or mutual fund, RRSPs should hold the core long life assets,” he says. “It’s not for the newest and craziest trading strategy.”

Let’s say you socked away $7,500 in your TFSA so far. Your roof caves in, your car goes bump, your employer decides to chop back your hours through the dog days of summer, so now you’ve got a cash flow problem. Not with your emergency fund in your TFSA you don’t. You can pull as much or as little as you need to keep your budget balanced. Then next year, not only will you be able to put in the normal contribution, you can put back any or all of the money you took out to make ends meet.

The TFSA is a great way for lower-income Canadians to set something extra aside for retirement without having to worry about how it’ll impact on their government benefits. Especially since neither the income earned nor withdrawals from a TFSA affect a person’s eligibility for federal income-tested benefits and credits.

People saving to buy a home will also love the TFSA since there’s no specified repayment plan or tax hit if you miss a repayment, and you can reuse the contribution room for something else once you’ve accomplished your home-buying dream.

Couples who want to income split will love the TFSA because a higher-income spouse can contribute to the TFSA of a lower-income or stay-at-home spouse, without the income earned being attributable to the higher-income spouse.

The TFSA is also the perfect place to park that money you’re eventually going to use to buy a new car, repaint your house, or go on a splendid vacation… any kind of planned spending for a big ticket item.

You can hold any investment you can buy for your RRSP inside your TFSA, including stocks, bonds, GIC, and mutual funds. But you should probably stick with interest-bearing investments. Why? Well since all the capital gains inside a TFSA is tax free, it also means any capital loss can’t be claimed to offset your other capital gains.

The big thing to watch for is the fees levied by the FI’s offering the new TFSA. Don’t be so blinded by the tax-free income that you buy your account from some provider who then gouges you with admin and withdrawal fees. They’ll try. It’s up to you to make sure they don’t succeed on your back.

It’s not as far fetched as it sounds. Toronto’s Mark Skaff recently enlisted his 2003 Mazda Protégé Sport to vouch for him when he joined a trial Pay-How-You-Drive (PHYD) insurance program. He agreed to let his insurance company monitor how he drives using a small electronic recording device in his car, and in return his provider offered him the opportunity to lower his insurance premiums.

Skaff only uses his car to haul groceries and run errands. For the past two years, he shared the tracker data with his insurer every six months. “I knew I would save something,” he says, but the outcome still surprised him.

Such Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD) programs are slowly gaining popularity in the U.S., but they’re not widely available here—yet. Both rely on telematics, or remote information exchange, using trackers and a car’s on-board diagnostic system to create a clearer picture of your driving habits. The system lets your insurance company monitor how often you drive, when you drive, and whether you make a habit of screeching to a stop or roaring down the street.

The program Skaff enlisted in—the only one in Canada so far—is currently on hiatus. But once Canadian insurance companies fully commit to such programs, they would make great sense for value-conscious consumers, says Dave Huber, an insurance telematics expert, and president of Kairos Solutions. Both systems are user friendly: drivers can plug the trackers into their on-board diagnostic (OBD) port themselves. And sharing the information is equally easy. Skaff uploaded his data into his home computer, and newer systems do it wirelessly.

Depending on the policy, a PAYD or PHYD program “could save 20% to 40% if the telematics confirms that you don’t travel at night and you are a cautious driver,” says Clem Driscoll, a telematics expert and managing partner at C.J. Driscoll & Associates in Los Angeles. And a few wrong moves won’t cost you. “Companies who offer this are saying, ‘we will not raise your rates based on the info we gather.’ Even if you’re not the safest driver, it won’t hurt you,” he says.

Some worry about the Big Brother aspect of tracking, and it’s a valid concern. Although the programs don’t record where you go, they do record a lot of personal driving information, and participants should ask their insurance company exactly how that data will be used, and who it will be shared with.

As the programs gain ground here, more drivers will soon face the choice Skaff made—but he says he would do it again in a heartbeat. After all, his $1,500 annual insurance bill quickly shrank to $1,200, netting him $300 a year in savings. “Someone with driving habits that are more risky might not be comfortable sharing their information,” says Skaff. “But that’s exactly how low-risk drivers, like me, are able to save money.”