Year: 2009

Categories
Announcements

Overnight Shipping of Meals

Often a big part of home is the food you eat.  I’ve read that people from Thailand often don’t do well when they move to another country, in part because food is such an important part of Thai life and they really miss it.  Pad Thai is one of my favourite meals, so I can understand that you’d miss Thai food if you grew up on it (I miss it if I haven’t had it in a while, and I was well into my 20’s the first time I tried it).  It’s almost a cliché that many first year university students will be homesick, missing something that their mother would regularly make.

Years ago a friend of mine was really missing a dish that her mother made.  She mentioned this on the phone one time, and her mother said she was going to make a tray of it and send it overnight through FedEx.  Of course, the parcel got delayed and arrived 7 days later (and was inedible and pretty nasty once it was opened).

The basic idea for this wacky business idea is to provide worldwide express shipping for food (prepared dishes).  The target customer will be someone who wants to get a special meal to a loved one (this isn’t for standard catering) and is willing to pay a large premium to get the dish there.

When the food is shipped, the sender will have to provide details on what it is, and agree to a method of packaging (with options for keeping it at specific conditions, such as below freezing or vacuum sealed, during the trip).  There could be an optional add-on where the food would be delivered at a precise location at a precise time and would have some final preparation (such as heating) performed en route.  The sender and receiver would have to take full responsibility for spoiled food (since nothing would prevent someone from sending something that was already spoiled), but every reasonable precaution would be taken to prevent this from happening.

FedEx does do specialty shipping, but since this includes things like hazardous materials I suspect it’s VERY expensive.  This seems to imply that they have the facilities to do this, and perhaps a company could be set up re-selling their services (after getting a big discount based on the volume your business will do as a whole).  Dealing with the customers would be one of the biggest challenges (every shipment will be quite unique), which might be a reason why FedEx doesn’t get into this line of shipping (and someone specializing in it might be able to make it work).  Purolator also ships food, but they don’t offer a service guarantee, which is part of the value proposition of this business.

Obviously this isn’t something you’d use regularly (only the very wealthy would send their kids every Sunday dinner through this service), but this would be for the odd time when it’s worth paying more than a decent restaurant meal to have a taste of home.

Categories
RESP

RESP Grants In a Foreign Country – Reader Question

Randy had some questions about RESPs:

Hi, I was wondering what is meant exactly by ‘approved post-secondary school’. I might go back to EU in the next 10 years, so I wasn’t sure what’s needed as proof of education to be able to withdraw including the grant money. I talked to a childrens education fund sales person and he mentioned that it could be any post-secondary school/university, even outside of Canada, all that’s needed is a note from the institution that proves that the kid is enrolled.
Is this true?

He also wanted to know if grants accrued while in Canada would be taken away if the child leaves the country:

Will the government will take back the grants (matched contributions made by the gov) if the kid studies outside of Canada?

He also asked about the specific resp account:

Also, I’m looking into setting up a TD mutual fund RESP account that i’ll then convert into a TD e-series funds account as is described in another blog entry in this series (https://moneysmartsblog.com/resp-how-to-get-started/). Hopefully there’ll be no annual fee. this sounds a bit complicated though, is it to avoid the annual fees?
Most banks have a 50$ annual fee for RESP accounts. For example the TD Waterhouse RESP account (their other RESP product) has a 50$ annual fee if you have below $25K in the account.

RESP grants can only be earned by kids who are living in Canada

While the child is living in Canada, they are eligible to receive grants on any money contributed to the RESP.   If the child moves away from Canada – they can continue to make contributions but can’t get any more grants.  They can keep any grants that they earned while residents of Canada.

RESP grants can be used for post-secondary education in a different country

If the child ends up going to post-secondary school in a different country then they can still use the RESP (including grants) for this purpose.  They don’t need to attend school in Canada.  You need to call the CRA to verify the exact school you want the child to attend.  You just need to show proof of enrolment at the school.

From this document  http://www.cra-arc.gc.ca/E/pub/tg/rc4092/rc4092-08e.pdf

A post-secondary educational institution includes:

  • Aa university, college, or other designated educational
    institution in Canada;
  • An educational institution in Canada certified by HRSDC as offering non-credit courses that develop or improve skills in an occupation; and
  • An university, college, or other educational institution
    outside Canada that has courses at the post-secondary
    school level, as long as the student is enrolled in a course
    that lasts at least 13 consecutive weeks.

One thing to keep in mind is that the RESP is completely tax sheltered while you are in Canada.  This may not be true if you live in a different country.
Example.

Little Johnny lives in Canada from age 0 to 8.  His parents contribute $2500/year for 9 years – total contributions will be $22,500.  Total grants received from government will be $4500.

Johnny and family moves to Germany in the year he turns 8.  At that point they can’t get any more RESP grants.  The RESP + grants will continue to exist in Canada – if Johnny goes to post-secondary school In Germany then he can use the RESP money (including grants) for that purpose.

It’s important to note that the government approves the RESP grants – not your financial institution.  So don’t get the idea that if you “forget” to tell your financial institution you don’t live in Canada any more they will continue to pay the RESP grants.  They won’t.

Why convert your TD mutual fund account to eFund account?

The main benefit to converting the TD mutual fund account to the eFund account is to be able to buy the TD efund index funds.  They are the cheapest index funds around and are the best deal if you are willing to manage the RESP account by yourself without any financial advice.  According to the Canadian Capitalist – there are no annual fees on a TD efund RESP so that would be a huge benefit as well.

Annual account fees are a bad thing – especially for a smaller account (such as a new RESP).  Try to avoid them if possible.

Categories
Money

California Unemployment Benefit Extension – Another 20 Weeks

California currently has an unemployment rate of 12.5% which is one of the highest in the country. Given that it is the most populous state it also stands to reason that California has the highest number of unemployed people living there.

Like every other state, Californians have benefitted from the numerous unemployment benefit extensions that have been created by the federal government. The latest extension provided by bill H3548 will give long-term unemployed Californians an extra 20 weeks of unemployment benefits.

Because of this recent extension the maximum number of benefit weeks available for someone in California is now 99 weeks.

California unemployment benefits are as follows:

  • EUC Tier 1 – 20 weeks  (7 weeks plus 13 weeks)
  • EUC tier 2 – 14 weeks (used to be 13)
  • EB  – 20 weeks
  • EUC tier 3 (new with bill H3548) 13 weeks or 19 weeks (if unemployment rate is greater than 8.5%)

However the extra 20 weeks is divided into 3 parts. 1 week is added to Tier II EUC. 13 weeks are Tier 3 and 6 weeks are Tier 4. Since the latest extensions are set to expire on Dec 31, 2009 it will be virtually impossible for anybody to receive the last 6 weeks.

“How many of those 20 additional weeks you get depends on when you started your claim and the upcoming eligibility deadlines,” says Loree Levy, a spokesman for the California Employment Development Department. Under the deadlines as they now stand, it’s unlikely that anyone in California would get the final six weeks, she says.

It is very possible that Congress will revisit this issue before the end of the year and extend the expiry date so that the full extensions can be utilized.

There are currently thousands of people who have run out of benefits or will run out in the coming months:

Loree Levy, spokesperson for California’s Employment Development Department, said Monday that an estimated 92,000 residents had exhausted all of their available unemployment by the end of October, and roughly 285,000 will be eligible for the newly enacted benefits by the end of the year. Whether they can get 20 weeks or only 14, though, depends on whether Congress extends the filing deadline.


Categories
Business Ideas

Just Because You Like To Do It, Doesn’t Make It A Good Business Idea

There are all sorts of good reasons to want to start a business. Often it’s also possible to start a business doing something that the owner personally enjoys: people who like creating artistic works might become graphic designers, those who enjoy writing might become ProBloggers, authors or copywriters, while those who like talking to people might start some business involving sales or consulting.

While it’s great to start a business doing something the owner loves, this in and of itself doesn’t make a business viable! There has to be a demand for what a business is producing or the endeavor will be for naught. As Thoreau writes (perhaps with racist overtones) in Walden:

Not long since, a strolling Indian went to sell baskets at the house of a well-known lawyer in my neighborhood. “Do you wish to buy any baskets?” he asked. “No, we do not want any,” was the reply. “What!” exclaimed the Indian as he went out the gate, “do you mean to starve us?” Having seen his industrious white neighbors so well off–that the lawyer had only to weave arguments, and, by some magic, wealth and standing followed–he had said to himself: I will go into business; I will weave baskets; it is a thing which I can do. Thinking that when he had made the baskets he would have done his part, and then it would be the white man’s to buy them. He had not discovered that it was necessary for him to make it worth the other’s while to buy them, or at least make him think that it was so, or to make something else which it would be worth his while to buy.

Unfortunately 150 years later people are still making this mistake: “I’ve done my part producing a good or service, now you should do your part and buy it”.

A friend told me about recently going to a craft show and feeling badly when she overheard one of the older women complaining that she’d only made 2 sales that day. My mother really enjoys crafts: she knits, weaves, sews and does all that stuff. Whenever she’s considered selling what she makes, once she factors in her time she knows she couldn’t sell it for anything close to what it cost her to make it. Instead she gives what she makes as gifts and hopes the recipients appreciate all the effort that went into them. The women at this craft fair probably enjoy crafting like my mother does, but they aren’t factoring in their time. After they’ve spent hours making the products, they then spend hours manning their booth to sell it (sometimes paying rent on the booth), and of course they lose money.

Two of my friends recently got married, and she’s planning an on-line crafty business which I predict will suffer the same fate. She may make some things, people may say they’re nice and buy them from her, but she’s never going to be able to make profitable use of her time. I’m *TOTALLY* ok with couples where one makes the money and the other pursues some endeavor that isn’t for monetary reasons (like an artist or writer), but it’s nice if the couple is at least honest with themselves that it’s a personal fulfillment activity, not an income generating activity.

One friend talked about starting a kitten farm, and I teased her that the first step will be developing a market for kitten meat (“The Kinder Alternative to Lamb!™ ” – yes, Mr. Cheap is evil). She wisely ignored my nonsense, but admitted that no one was going to pay her to raise kittens: she’d just be a crazy cat lady – not a business. This did prompt her to refine the idea as a cat rescue (as a non-profit) or a cat kennel. She even had the idea that MIGHT work of a cat spa where there would be cat-specific activities like hunting.

The solution to avoiding this mistake when brainstorming business ideas is fairly simple. Once an owner has thought of something he’d enjoy doing, he needs to honestly put himself in a customer’s shoes and ask “would I want to buy this at a price based on what it costs to produce?”  Friends and family will be blindly encouraging (a point made quite well by the Onion article: Ridiculous Small-Business Plan Encouraged By Friends), so he HAS to be honest with himself.  If he can’t do this (and keeps falling in love with an idea such that he INSISTS people will pay for it because he loves it so much) he’ll have a lot of wasted time, money and effort in his future.

If he is honest with himself and admits no one would buy what he wants to produce, he should keep it a hobby and do something else to earn money.

Categories
Money

Michigan Unemployment Benefits Extension – Bill H3548 – 20 More Weeks

Michigan has the dubious honor of highest unemployment rate in all of America.  At 15.1% as of October, it leads the pack by a full 2 percentage points.  Nevada (13.0%) and Rhode Island (12.9%) are the next highest state and California is the next large state at 12.5% unemployment rate.

The reason the unemployment rate is so high in Michigan is because of the concentration of auto and parts plants in that state.  This industry was part of a high-profile government bailout and GM ended up going bankrupt anyway.  Needless to say this provides for a spike in unemployment as the auto sector will probably take a while to stabilize.

Fortunately the federal government has authorized and funded several unemployment benefit extensions this year and the recent bill H3548 extension is the latest (and probably not the last).  These extensions are part of the national stimulus package for 2009.

Michigan unemployment benefits are as follows:

  • EUC Tier 1 – 20 weeks  (7 weeks plus 13 weeks)
  • EUC tier 2 – 14 weeks (used to be 13)
  • EB  – 20 weeks
  • EUC tier 3 (new with bill H3548) 13 weeks or 19 weeks (if unemployment rate is greater than 8.5%)

This adds up to a total of 99 weeks.

The new benefits were originally planned to start in mid-December:

“We still anticipate that payments will begin on this new extension by mid-December,” Isotalo said. “Letters should be going out with information and instructions about the new extension and what people need to do to report for these new benefit payments” by Nov. 25.

In actual fact payments have already started for Michigan residents and many will get their checks starting just after Thanksgiving Day weekend.

The way things are set up now – these latest extensions will expire at the end of the year which means that not many people will get the full 20 weeks.  You need to use the tier 3 up before Dember 31, 2009 in order to get tier 4 which at this point is difficult to do.  There have been reports in the press that congress will be looking to extend the expiry date before the end of the year.

“Now that we have acted on the extension, we must quickly take up legislation to continue the Emergency Unemployment Compensation program itself, otherwise millions will be left without this important insurance come January,” concluded Rep. Levin.

“The action today responds to the needs of 100,000 in Michigan and one million people nationwide who have exhausted their benefits or will have exhausted them by the end of the year,” said Rep. Levin.  “With six people competing for every available job, unemployed workers need insurance to feed their families and pay their bills.”

In Michigan there are 99,000 people who would have run out of benefits by the end of the year without the latest extension.

Categories
Personal Finance

Tips For Watching The Christmas Parade With Kids

Mr. Potato Head
Mr. Potato Head

I recently took my 3 year old son down to watch the annual Christmas parade for the first time.  I live in Toronto but I imagine that most large cities have their own equivalent.  I was a bit apprehensive since I had never taken him to a large event like that before.  We had a reasonably good time and the weather was fantastic.  I learned a lot from the experience so I figured a post was in order to share some thoughts I had about how to make next year’s parade better.

Bring Food

This is one of the few things I got right.  I brought some snack food along for the little one.  Nothing helps pass time better when there is nothing going on with the parade than some food.

Talk to someone who has gone before for tips

I have no idea why I didn’t do this but after seeing all the other parents there with blankets, coolers, chairs etc I realized that maybe asking around before the parade probably would have helped.

Bring chairs, blankets

If you have foldup chairs for both adults and kids then bring them.  We ended up sitting on the ground while waiting.

If your child is young then don’t stay for Santa

We tried to time it to get to the parade route and not have to wait long.  It didn’t work since the parade was delayed which meant we ended up leaving before the end of the parade.  My son doesn’t even know or care about Santa so no big deal.

Ducks
Ducks

Don’t arrive too early

Some parents and kids will try to arrive at the parade route well before the parade in order to secure a good spot.  If you and your kids can handle waiting 1 hour or more then more power to you.  My son is not capable of waiting around that long.  We went later on and still had to wait too long.  If I could do it again I would have gone much later, stayed for a reasonable amount of time (1 hour max) and then went home.

Don’t drive

In Toronto, the parade is held downtown so driving is not a good idea.  If you do drive then I would follow the following suggestions:

  • Don’t try to cross the parade route.
  • Consider parking a distance from the route and take public transit the rest of the way.  This might be a good approach if you are coming from far away.
  • Ride a bike.  I only mention this one because that’s how we got down there.  20 minutes there, 20 minutes to get home – it was awesome.

Dress appropriately

This rule didn’t matter this year since it was so warm.  However some years it can be cold and wet.  Bring lots of clothes and rainwear!

For you Santa Claus parade vets – can you provide any more tips or experiences you’ve had with the Santa Claus parade?

Most of the floats were more modern than I remember. I have no idea what this float was supposed to be.
Most of the floats were more modern than I remember. I have no idea what this float was supposed to be.

As always – pictures were taken with my Canon 200sx digital camera.

Categories
Money

Social Security Stimulus Check 2010 – FAQ

When will the $250 Social Security stimulus check be mailed?

This is not known at this time but if the bill passes Congress then it is expected that the checks will be mailed sometime in the first quarter of 2010.

Will Social Security Payments Be Paid If United States Defaults On Debt?

Will there be a stimulus check in 2010

Yes, there will be a $250 stimulus check for social security recipients as well as a $250 stimulus check for SSI recipients as well.

How much is the 2010 Social Security raise?

Unfortunately because inflation was so low in 2009 there is no cost of living increase or “raise” in the Social Security payments for 2010.  This has however given rise to the $250 Social Security stimulus check which will be payable in 2010.

Will seniors get the $250 stimulus check?

You have to be receiving Social Security, SSI and a few other select criteria in order to receive the check.

What should I do with my $250 check?

There are many options for this money.  Admittedly it’s not a huge pile of cash but every little bit counts!

  • Reduce debt – If you have any outstanding credit card debt or personal debts then $250 would probably help to pay it down.
  • Buy something – Need some new clothes or want to buy an consumer item?  If your finances allow this then the $250 can be used for that.
  • Donate it – If you don’t need the money then give it to someone who really needs it.  A charity, relative or friend would probably really appreciated the cash.

More info

Will the $250 stimulus check for 2010 be enough money?

Will there be a stimulus check in 2010?]

Will there be a $250 stimulus check in 2011 for Social Security Recipients?

Will there be a $250 stimulus check in 2011 for SSI Recipients?

2011 Social Security No Cost of living adjustment

Categories
Money

Illinois Unemployment Benefits Extension – Bill H3548 Gives 20 More Weeks

Long term unemployment is not something that anyone should have to deal with.  Unfortunately in today’s economy there are more and more unemployed people everyday.  The economic slowdown has been going on for a couple of years with mounting job losses to show for it.  One of the tragic byproducts of an increasing unemployment rate is the large number of people who have been unemployed long enough to run out of the available benefits.

In Illinois the damage to the economy has been significant over the last year or two and this is seen by the unemployment rate which currently sits at 11.0% in October which is up a full half percentage point from 10.5% in September.  The increasing unemployment rate is an indicator that there are less and less jobs which makes it harder for people who were laid of quite a while ago.  The other problem is that long-term unemployed are competing against other workers who haven’t been off as long and might be more attractive to employers.

The good news is that there have been several unemployment extensions and the latest via Bill H3548 is probably not going to be the last.  These extensions are part of the stimulus package for 2009 funded by the federal government.  As many as 40,000 Illinois unemployed would have lost their benefits by the end of the year without Bill H3548.  This bill adds 14 weeks for all states and 20 weeks for states with an unemployment rate higher than 8.5%.

Currently in Illinois the following benefits are offered:

  • EUC Tier 1 – 20 weeks  (7 weeks plus 13 weeks)
  • EUC tier 2 – 14 weeks (used to be 13)
  • EB  – 20 weeks
  • EUC tier 3 (new with bill H3548) 13 weeks or 19 weeks (if > 8.5%)

This adds up to a total of 99 weeks.

For information on how to extend your benefits then please visite your state unemployment website or office.  To be eligible you need to exhaust your benefits by the end of the year (2009).  Because the latest bill has increased tier 2 by 1 week this could affect your eligibility for the extension.  According to NELP (National Employment Law Project) there would have been around 1 million Americans who run out of benefits in January of 2010 and 3 million by March 2010.  Current benefits are in Illinois are a maximum of $559 per week for someone who is married with kids.  Someone single would be eligible for a maximum of $410 per week.

Rep. Debbie Halvorson (IL-11) who voted to pass bill H3548 otherwise known as the Emergency Unemployment Compensation Extension Act had this to say:

”All across our district our friends and neighbors are in danger of losing their unemployment benefits, and our economy is struggling to recover, this bill is a big step in turning that around,” said Halvorson. “By extending these benefits we are helping our communities today so they can be stronger and more prosperous tomorrow.”