Year: 2009

Categories
Personal Finance

Gurus

I’ve written before on my opinion of experts.  I definitely think there are times when we need to seek out someone who knows more than us about a subject, but that certain professions cultivate this to a degree that’s detrimental to their clients.  Beyond this, there are people who go even further and try to set themselves up as the guru on the mountain.

Gurus are particularly attracted to real estate, but you come across them in a number of areas.  As well as writing up reviews of particular gurus, John T. Reed also provides general bullshit warning signs (most of which are applicable to gurus in any area).

I come across the occasional blog or website where the author is clearly trying to lay the groundwork to set themselves up as a guru.  Sometime they provide tidbits of worthwhile information, but there seem to be a few glaring warning signs that I think should warn people off.

One of Reed’s points that has shown up in the early information in scams I’ve looked into is #44: Saying they only do it for the love of teaching and sharing their secrets.  It’s amazing to me that people will describe how passionate they are about teaching others then charge a ridiculous premium for what they’re selling.  Books, called courses, will sell for hundreds of dollars.  Courses, called boot camps, will sell for thousands.  Expensive monthly memberships provide a wonderful “passive income” FOR THE GURU.

If someone’s actions are so contradictory to their claims, it’s time to move carefully towards the door.  Why would you trust the information being provided by someone is proving themselves to be dishonest with you from the start?

I was reminded recently of #1: Emphasis on luxurious lifestyle when I was on a woman’s site where she was selling her guru services.  Her site talked about how wonderful it was to be rolling in dough, and showed pictures from around the world of her and her kids and their luxurious vacations.  When I looked her up on Rip-Off Reports there was a litany of complaints about her (claiming she was charming and helpful until she got your check or credit card number).  Digging further she has a criminal record of repeatedly defrauding friends and family.

Anyone can say they’re a millionaire.  Anyone can post pictures of themselves next to fancy cars or in front of a mansion.  I’ve never signed up with any guru (I see enough warning signs that scare me off well before I give them any money), but I imagine it gets harder to as you get deeper in with them.  You have to realize you’ve made a mistake giving them cash, which makes it harder to see the ever more obvious warning signs.

Categories
Money

2009 Stimulus Package Passed – Was There A Stimulus Check?

The 2009 stimulus package bill has been very controversial because nobody knows for sure how much stimulus is needed to get the economy back on track or what form the stimulus should take.  A stimulus check 2009 giving cold, hard cash to the population would certainly be a popular choice but it looks like tax cuts and infrastructure spending will make up the bulk of the stimulus package.  There will however be a $250 stimulus check in 2009 for selected groups.

Let’s take a look at what this bill contains and what was left out:

Tax cuts

This is the 2009 equivalent to the stimulus check of last year – Tax cuts in the order of $400 for individuals and $800 for couples.  This is a bit less than the original stimulus tax cut proposals of $500 per individual and $1000 per couple.  This isn’t as exciting as receiving a stimulus check in the mail but is basically the same thing since it means more cash in your pocket.

$8,000 tax credit for first-time home buyers

This tax credit was originally planned to be a $15,000 tax credit, however it has been reduced to $8,000 which is still a pretty good break.  The tax credit is not a loan so it doesn’t need to be paid back.

This tax credit applies to any houses bought between January 1, 2009 and November 30, 2009.  To qualify individuals must make less than $75,000 and couples must make less than $150,000.

Infrastructure spending

A good portion of the approximately $800 billion package will go to infrastructure projects such as schools, highways, energy and technology projects.

Tax break on AMT

$70 billion of this package will be going towards allowing millions of middle-class Americans from paying the dreaded AMT (alternative minimum tax) which was originally intended to prevent higher income Americans from avoiding the payment of any income tax but due to inflation creep – is now applicable to lower salaries.

Limits on Wall Street bonuses

This applies to financial companies that are accepting government bailout funds.  The rule is that any bonuses for executives can’t be more than 1/3 of their regular salary.  The other catch is that the bonuses have to be paid in company stock which doesn’t vest until the government bailout money is paid back.

I think this is a great idea – these executives are the ones who took too many risks in the first place so reducing their pay makes sense to me.  One could argue of course that maybe those executives shouldn’t still be in charge but apparently that is the case.

This measure will only work in the short term since any new executive contracts will have much higher base salaries if the stimulus limits are applicable.  Hopefully there won’t be a slew of “new contracts” for various executives with higher base pay.

$250 stimulus check for select groups

There will be a $250 stimulus check for select groups.

Update –Will there be a stimulus check in 2010?]

Categories
Announcements

Vote in March Madness Competition

I’m competing in today’s March Madness bracket over at Free Money Finance. This is a big competition which results in money being donated to the winner’s charity – I choose the American diabetes association (it had to be an American charity).
If you want to vote then go over and leave a comment with “trust” – you can also vote in the other game – see the post for details.

Categories
Announcements

Linkstuff Feb 13

Had a hosting problem this week so time for a new host!  I’ll be switching in the next couple of weeks.

On with the links…

Million Dollar Journey tells us How to Take Advantage of the Market After the Crash of 2008.

My Two Dollars warns us not to Bury Our Financial Heads In The Sand.

Preet at Where Does All My Money Go discusses How Much of an RESP Should Be Invested in Fixed Income.

Financial Blogger dreams about Valentine’s Day Dates.

The Consumer Boomer has a timely discussion about Managing Retirement Assets in the Event of a Layoff.

Good Financial Cents lets us in on the Top 6 Reasons Why High School Students Think You Should Invest.

The Oblivious Investor talks about Treating Mutual Funds Like Stocks.

Money Ning reminds us to Buy What We Need.

The Dividend Guy shares 11 Things he Won’t Do in his investment process.

Green Panda Treehouse tells us there is an Upside of the Credit Crunch for Students.

Blunt Money asks Are They Really Conflicting Viewpoints?, buying the cheaper item or not wanting to spend money.

Canadian Capitalist asks How Is The Recession Affecting You?

The Intelligent Speculator explains the reasoning behind Shorting Stocks.

Investing School details The Role of the Securities Investor Protection Corporation – SIPC.

ABCs of Investing wrote about Stock and ETF Symbols and describes Dividend Increases and Cuts.

Carnivals

Dollar Frugal hosted the Carnival of Personal Finance Wizard of Oz Edition.

Categories
Business Ideas

Wacky Business Idea #16: Patrons.com

I recently watched the new “Dead Like Me” movie (it’s awful, I’m not sure if the people who wrote it ever saw the TV series).  On the Pirate Bay a commenter (derrrface) wrote asking everyone to buy the direct-to-DVD movie to encourage Showcase to resume the series.  Other commenters weren’t very supportive about his suggestion, but it reminded me of a business idea I had some time back.

In the past artists, musicians and writers were often support by patrons.  These were rich people who believed in the artist’s work and would provide financial support so they could focus on it.  For example, Emperor Joseph II was Wolfgang Amadeus Mozart’s patron.

Nowadays (perhaps starting with the cancellation of Star Trek: the Original Series) there are mega-fans who passionately believe in the artistic work of an individual or group and mobilize to put pressure on the studios to continue creating content with them.  I recently watched (it’s amazing I get any work done on my PhD, eh?) “Done the Impossible” which details the lengths Firefly fans went to to try to keep Joss Whedon’s series on the air.  Some believe they helped make the Serenity movie possible.

The core of this idea is a site which brings together “micro patrons” with artists to allow them the freedom to work outside the studio / publishing / art world and interact directly with those who want to consume their artistic vision.  Say a bunch of people enjoyed a book released directly by the author (The Metamorphosis of Prime Intellect perhaps – if you start to read it, DON’T STOP after the first chapter, its not representative of the books as a whole).  Instead of them having to go buy 10 copies of it to show their support (and only having a fraction of that purchase go through to the creator) they could get the money directly to the creator to encourage them to keep working.

Either a group of fans could create a project asking the artist to work on what they’re asking, or the artist could offer to work on something if a threshold of donations was reached.  Perhaps an author would say that he could write a book if he had $15,000 to be able to quit his day job and focus on it for the next 5 months, or fans might band together and offer Stephen King $40,000 if he’d write a book about mutant gerbils.

It wouldn’t be any sort of legal contract, and the patrons wouldn’t have any ownership of the idea or final project.  It would just be a way of people who love an artist”s work to say “I want you to keep working, if there’s a way money could help make that happen, here it is”.  That being said, there WOULD be an expectation that the artist WILL work on the project if they accept the funds (and the fund could be tagged as a bounty once the work is completed if the fans are afraid King will take the money then write about hamsters).

The site would function by putting the funds held in a very safe, stable investment (a money market account, high yielding savings account or cashable GICs) and using any interest generated to operate the site.  If an artist rejected a proposal, the funds would be immediately returned to the micro-patrons.

Categories
Announcements

Back In Business

We’ve had some problems with our hosting – you might have noticed the blog has been down all day.  I’m not too confident the blog will stay up so I’ll wait a bit to post again (ie tomorrow).

Categories
Announcements

Great Canadian Book Giveaway Winners!

After many entries – 52 comments and 32 emails with the phrase ‘Orange Sheep’ – the great Canadian book giveaway is over and we have our winners!

In order:

  1. Joel chose New Rules of Retirement
  2. Brandon picked Findependance Day
  3. Blair wanted the RRSP Book.
  4. Wooly Woman
  5. Susan C

If you are a winner and haven’t responded yet then please do so (with your address) so I can get your book off to you.

Categories
Personal Finance

Save On Transfer Fees When Changing Discount Brokers

If you are considering switching from one discount brokerage to another – you should try to get the new broker to pay for the transfer-out fees.  Most brokerages in Canada will pay these fees as long as you have enough assets to make it worth their while.  I believe in most cases $25k in assets would be enough but check with your new institution to find out the exact deal.

Follow through with the transfer fees

Recently I switched from Questrade to RBC Direct to take advantage of their 1% deal (no longer active). Part of the offer was to pay for any transfer fees that are normally charged by the relinquishing institution.  I had assumed this would be taken care of automatically and had forgotten about it until I recently was looking at my Questrade statements for tax purposes and noticed the $125 transfer fees. I decided to check my RBC account for any credit for the fees and sure enough – there wasn’t anything.

I phoned RBC and they told me I had to fax a copy of the statement showing the transfer fee before crediting my account. I wouldn’t be surprised if this is normally the case for where transfer fees are being covered.  For anyone else who did the RBC deal then the fax number is 1-888-722-238.  Indicate your rbc account numbers on the fax.

Summary

  1. Get the new brokerage to pay for any transfer fees.
  2. Follow up and make sure they pay the fees – send documentation if necessary.

If you are planning to move back to Questrade then read about the Returning to Questrade deal on transfer fees.