Author: Mike Holman

Categories
Personal Finance

Will There Be A CoronaVirus (Covid-19) Relief Stimulus Check In 2020?

One of the more common questions I get at this site is “Will there be a stimulus check in 2020?”.  Well, surprise, surprise – it looks like there definitely will be a stimulus check in 2020.  A Corona Virus stimulus check to be exact.

Why do people keep asking this question?  Well, back in 2008, the US government gave out $600 stimulus checks to most Americans.  Needless to say this money was very well received and I’m sure most people wouldn’t mind seeing more of those checks.

Who doesn’t like free money?

History of the stimulus check

In 2008, a $600 stimulus check was paid out to most taxpayers in an effort to boost the economy by getting more cash into the hands of people likely to spend it.

In 2009, a $250 stimulus check was sent to all recipients of Social Security (retired people) and SSI (Supplemental Security Income) for disabled people.

Will there be a CoronaVirus check this year?

The current administration is working on a giant stimulus bill which contains Corona Virus or Covid-19 stimulus checks.  The amount will be $1,200 per person or $2,400 for a couple.  Parents will get $500 per child under the age of 17.

The payouts get phased out if you make enough money.  The stimulus check will start getting reduced if you make more than $75,000 and will be eliminated if you make more than $99,000.

What is a stimulus check?

A stimulus check is a check mailed out to a significant number of Americans in order to give government tax money to those most likely to spend it and help stimulate the economy.

Summary

For the first time in a long time – the American government will be paying out stimulus checks because of the CoronaVirus epidemic.  $1,200 per person is an impressive financial commitment to get the country back on track.

Will there be another $250 stimulus check for SSI recipients?

Will there be another $250 stimulus check for Social Security recipients?

 

 

Categories
Personal Finance

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Personal Finance

Cutting the Cord – Living Without Cable TV

After a multi-year hiatus, Mr. Cheap has returned to blogging at http://moneytimeblog.com.
Posting on topics from investing to careers to arguing with Mike to frugal living such as this post.

Network television and cable TV generally strikes me as one of those things that will seem very strange to the next generation. “What do you mean you had to turn on your TV at a specific time to watch something?!?!” our children will ask us, with the same disdain we asked our grandparents about using an outhouse.

Costs for cable typically range from $11-20 a month for very basic access through to $100 and up for a variety of premium channels and extra features.

While you won’t get the exact same experience living without cable, you can “cut the cord” and get a comparable – and in many ways superior – experience.

Over The Air

Years ago there was talk about phasing out over the air TV, where you use an antennae for reception. When I bought the house my wife and I currently live in, there was a massive antennae running up the side of the building. I mentioned to a friend that I was going to pay to have it removed, and he was horrified. He said it would be an excellent way to get uncompressed, high-definition channels.

After playing around with it and running some cables, it turned out he was right! It dramatically increased the number of channels we could get compared to the little indoor antenna we were using before, and as long as the weather is clear, reception is close to perfect. We get Fox, CBS, ABC, PBS and a bunch of other things. This is pretty well equivalent to the basic cable package, and there’s absolutely no monthly cost to it.

Movies and TV Shows

You don’t get the exactly same selection, but Netflix ($8 / month) and Amazon Prime ($100 / year, with free shipping of Amazon purchases) provide on-demand viewing. My experience with both services is that they don’t have everything you want to see, but they have more than enough that you’ll be willing to watch. Hit shows will often come to these services after a year or two delay, and these days some of the hot shows debut on them – e.g. House of Cards, Orange is the New Black and Mozart in the Jungle.

If you’re willing to walk on the wild side, more options for this below, you can share an account with family or friends and cut your costs further.

DVDs

I never touch the things myself, but DVDs are another alternative. If you’re the type of person who likes to binge watch long running shows, you can inexpensively rent or buy entire series – or borrow them from a friend or library for free.

Sports

For quite a while I told people that cooking and real estate shows would be the biggest things they’d miss without cable. These are now more available than before, so the only big thing I think people will miss is sports. Obviously there will be loads of sports on the network channels, but for people who like to watch things that only air on the specialty sports channels, you pretty well need cable.

I have zero interest in sports, so this isn’t any sort of loss for me.

Children’s Shows

I don’t have kids, but my understanding is that it’s very easy to get banks of whatever show your kid is into – Teletubbies, Barney, The Wiggles or whatever is hot now. I just typed “The Wiggles” into Google and there are 146,000 results, including tons of full episodes. When I was visiting a friend recently, whenever his son would get restless he’d just turn on a 9 hour playlist of Wiggles and his son would be quietly hypnotized.

Watching Video Files

If you’re willing to illegally pirate TV shows and movies, you’ll have an unsurpassed selection of entertainment. Using torrenting or other options, you download video files to your computer and can watch them there. A better set up is to deliver the video files to your television. A Chromecast combined with the free app Videostream is one easy way to do this. In our house we currently use a Roku 3 and Plex software. A media center entails having a computer permanently hooked up to your television. Each of these options will let you use a remote control and easily navigate to find your content. Most of these also let you watch Netflix, Amazon Prime and other options on your TV.

If you like the sounds of this, but aren’t willing to download illegally, there’s a small amount of content that can be legally downloaded and watched. “Star Trek: Phase II” is an example of this, it’s a fan made continuation of the original Star Trek series.

As you may suspect, it’s terrible.

Welcome to the Future!

Other than sports, we’re really in a golden age of entertainment. It’s easily accessible for far less than $100 per month.

Read more by Mr. Cheap over at Money Time.

Categories
Personal Finance

2013 Investment Portfolio Returns – Another Good Year

New year and time for a new post!

I like to measure the performance of my investment portfolio every January to see how I’m doing.  This year was a banner year for equities and my portfolio went up 19.9% which is pretty good for  a 75% equity/25% fixed income mix.

It’s been said that investors who are in the accumulation phase should be happy when markets go down, so they can get more for their investment dollar.  While I don’t disagree with that idea – in practice, it might not work out so well.

As someone who works in the financial industry, I know that my job prospects go down exponentially with the markets.  A prolonged bear market might be good for a long term investment strategy, but if the investor doesn’t have a job, then it’s not really going to matter much, because they won’t be able to make any contributions.

Even if you don’t work in the financial industry, the markets are often loosely tied to the general economic health of a country.  Think of the great stock market crash in 1929 and the ensuing depression.  Did those people in bread lines really appreciate the incredible investing opportunity they were missing out on?  😉

Market returns in 2013

For a more complete set of returns – check out http://www.canadiancapitalist.com/asset-class-returns-for-2013/.

Here are the relevant equity returns for my portfolio:

  • Canada 13%
  • United States (in Canadian dollars) 41.5%
  • Europe/Asia 31.3%
  • Canadian dollar lost 6.5% against the US dollar.  This helps increase any non-Canadian holdings

My allocation

My portfolio allocation is 75% equity and 25% fixed income.  Here are the exact allocations:

Asset class ETF Target (%)
Short term bonds XSB/BSV 20
Real return bonds XRB 5
Canadian equity XIU 11
US equity VTI 32
International equity VEA 32

 

I’ve been a good little indexer this year, so my actual allocations were pretty close to those numbers.  My overall return in 2013 was 19.9%.

Past returns

Here are my returns over the last eight years:

Year Return(%)
2006 14.7
2007 4.1
2008 -17.0
2009 20.24
2010 7.3
2011 -1.8
2012 13.3
2013 19.9

My annualized rate of return over the seven years is 6.9%. At that rate, $100,000 invested eight years ago would now be worth $170,569.

The rate of inflation over the last six years has been pretty low at just under 2%, so my annual real return is almost 5%, which is pretty reasonable.

I have a relatively low amount of Canadian equities (11%) which helped this year as my non-Canadian equities performed much better. This doesn’t mean anything, as there are other years where the Canadian index is the winner. My investment philosophy is to keep my investment fees low and diversify.

How did your investments do last year?

 

 

Categories
Investing

Qtrade Discount Brokerage Review

Qtrade is an independent discount brokerage which has done extremely well in the annual Globe and Mail brokerage rankings. After calling them a number of times, I can see one of the reasons. They are super quick to answer the phone.

Related:  My Canadian discount brokerage comparison

Overall impressions

Qtrade has competitive fees for investors with at least $50,000 to invest or trade at least 30 times per month.  For smaller, less-active investors, the fees are better than the big banks, but not as good as the smaller discount brokerages such at Questrade.  Their customer service is one of, if not the best in the business.

Related:  See my Questrade discount review

They offer US$ RRSP accounts and is one of only two discount brokerages (Questrade being the other one) to offer RESP additional grants, Canada Learning Bond, and ACES grants (but not QESI grants).

Online trading commissions

  • $19.00 – If household assets are less than $50,000 and less than 30 trades executed per quarter.
  • $9.99 – If household assets are greater than $50,000 or 30-149 trades per quarter.
  • $7.00 – If 150 trades completed or more per quarter.

Phone trading commissions

$40 + cost/share

Annual account fees

  • Canadian Registered accounts – Qtrade charges $50 per year on registered accounts (ie RRSP, RRIF etc)  that have a balance less than $15,000.
  • US$ RRSP – $50 regardless of account size.
  • TFSA – No annual fees.
  • Non-registered account – No annual fees.
  • US$ RSP is a separate account from the Cdn$ RRSP, so if your balances are less than $15k then the $50/yr annual fee applies

Foreign exchange fees

Trades with a value of:

  • Less than $10,000 – 1.67%
  • $10,000 to $25,000 – 1.53%
  • Greater than $25,000 – 0.96%

These fees are comparable with other brokerages and in fact the ~1% cost for trades greater than $25,000 is pretty good relative to other brokers.

Mutual funds

Full range of mutual funds available.

Free real-time quotes

Yes

Minimum to open account

$1,000 for registered account.  $2,000 for margin (non-registered) account.

Commission-free ETFs

This applies to select ETFs where the purchase amount is greater than $1,000.

Dividend Reinvestment Plans

Yes

Some opinions on Qtrade

I asked a few existing Qtrade clients to share their experience with QTrade:

Anonymous

For background I’ve got accounts at both TD and Qtrade, so can compare:

  1. I find the interface very user friendly and easy to navigate. When I compare to TD, QTrade wins hands down. The layout is easy to navigate and use in all areas. The only bad thing I would say is on occasion it seems a little slow, usually in the off hours.
  2. Customer service has been very impressive. Phone calls are typically answered in a couple rings, and most of the service reps I’ve spoken to are extremely knowleadgable. They also have a secure email system that is always answered first thing the next day that is very handy. I also find they are willing to give online trading commission when calling in and needing help due to technical issues. EG I had an ETF going through a consolidation and wanted to sell, so they did over the phone for no extra cost.
  3. Research tools are adequate for my needs, although I will say TD has more. That being said I find I’m always using the charting and technical analysis tools at Qtrade as they are much easier to use. If your looking for analyst reports then QTrade doesn’t have a great depth on that, but I haven’t found anything else lacking. This might be a good thing knowing how well analysts can predict stock movement anyway lol.
  4. I’d consider myself a mostly passive investor, but cannot help being a little active. I sell the odd covered call, and have done a couple trades. I also try to be tactical and smart when putting new money to work.
  5. Overall I’ve very happy with QTrade and would highly reccomend it. No company is perfect I guess, a couple nagging things for me though:

The commission free ETF’s switched to a minimum of $1,000 purchase at some point last year. Would have been nice if it stayed at no min, but I understand why they needed to to that.

From a risk management point of view I have 2 thoughts that I probably should clarify with them at some point. 1. Being in Vancouver, I really hope they have a good data backup system in another part of the country in case the big earthquake hits. 2. When calling in I’ve found they don’t ask as many questions as TD to verify the caller is who they say they are, I wonder if they are open to fraudulent action due to this. The secure Email this is not a concern.

ECN fees are also annoying. Good incentive to keep trading to a minimum I guess.

Frase

I switched financial institutions last December and moved from Credential to Qtrade. I don’t trade a lot and find them fine with the only surprise I had was the “per share” cost added to the 9.95 trading fee. One feature I would like to see is a consolidated share report which show the total shares held for my various accounts. My wife and I have several different accounts with, say shares of BCE in several of them. For asset allocation purposes it would be nice to know at a glance my total investment in BCE. I don’t bother with the other features as I am a dividend investor and don’t trade that much.

Feruk

  1. Trading platform/interface – I like it. Easy to use, no delay. I’ve got an account with Interactive Brokers as well, and I prefer the Q-Trade display in almost every way.
  2. Customer service – Had contact with them 10+ times over the years, top notch.
  3. Research reports and tools – Pretty weak. The reports are mostly Morningstar; I don’t rely on them much. My big pet peeve is with their stock screening tool. In theory, you can select from a lot of options. In reality, it must pull from some sort of old data as often the screener results do not reflect the desired search well.
  4. What type of investor are you?  I’m a mix. Most of my assets are passive, but I day trade a small part of my portfolio.

Stephen Heath

1) Trading platform/interface – are these ok/good/bad?

Personally, I love it, to me it seems logically presented and without tons of crap on the screen (other than the opening screen), but if you want detail you can drill down and get whatever you want.

2) Customer service – any impressions you might have.

Crazy amazing. You call and get them right away (and this is on the non-vip line… even though I qualify for the vip line, I never bother looking up the number because the non-vip line guys are great.) I’ve never stumped them on anything and they’ve all solved my problems so fast it’s great. They’re also quite empowered… there were a few times when funds transfers were going slow and I would miss an opportunity. I have no margin or lending facilities on the account, but they saw it was on the way and the person answering the phone authorized the advance on funds. No phone monkeys or layered levels of customer service here!

3) Research reports and tools. Do you use these and are they any good?

They mostly have the Morningstar reports, and I’m ambivalent about them because I feel Morningstar does a terrible job at keeping them up to date promptly… once a month updates on their recommendations, and on specific companies it could be months old. That said their technical tools are pretty good, although I don’t use them a lot, mostly as a way to search new areas I want to invest in to come up with names to research.

4) What type of investor are you? (ie active, passive etc)

Well, mix and match, I also invest for work’s treasury using Qtrade, and we have different parameters, so I tend to do more short term purchases and flips… not quite daytrading, but definitely active trading, so there’s a few volatile companies we’ve moved in and out of, but the bulk of the investments are for our family… and there I’m mostly buy and hold, I’ve got the odd “gamble” stock but that’s < 2% of my portfolio. And I tend to basically just buy the stocks that the ETFs hold rather than buying ETF’s, no point paying the MER. I don’t get into anything fancy like options, margins, or the like, so can’t really comment there.

5) Anything else you want to add.

I can’t really think of anything, I don’t have experience with a lot of other brokers so can’t really compare, but there’s never been anything that would make me want to switch, and even though it’s about a decade away, I’m not looking forward to when I start bumping up on the million dollar insurance limit and need to find a secondary broker. I read this year the Globe picked Virtual Brokers as #1, Qtrade sliding to a close second, so I might check that out, but really, for the service I’m getting I’m quite happy with the VIP prices at Qtrade. (Oh, VIP prices apply when you do a lot of trading… I think 200 transactions? Or when you have over $50k in household assets (all the accounts at a single address)… and it gives you cheaper trades than non-vip.). Personally, I don’t mind paying a bit more for the kind of service I get with Qtrade.

 

 

 

Categories
Announcements Personal Finance

LinkStuff – High Definition TV Edition

I finally upgrade to high definition tv and have been pretty happy with it.  Hockey is pretty good in HD (although it would be a lot better if the Leafs were still playing), but the best improvement has been cycling.  I’m currently watching the Giro d’Italia (Canadian Ryder Hesjedal was the winner last year) and the scenery is fantastic.  It looks good on non-HD as well, but the difference is stunning.

I can’t wait for the Tour de France to start.

On with the links

Ben Rabidoux, a noted real estate bear, wrote a good article called Should everyone consider renting over buying right now?  It’s a reasonable article although personally I wish a smart guy like Ben would use his talents doing something more useful than calling for real estate crashes.  Unless he can tell us when the market will go down, how much it will go down and for how long it will be down – any predictions are completely useless.  See Garth Turner for another example.  Garth has been calling for a real estate crash since sometime after the second world war.

 Tom Bradley, the owner of Steadyhand Investment Funds wrote a letter to the Ontario Securities Commission with some suggestions about separating the cost of financial advice from the cost of  mutual fund management in Canada.   As I wrote back in 2011, I also think separating these fees is a step in the right direction.  It’s interesting that Bradley talks about lack of disclosure of mutual fund fees, but he fails to mention that his firm would likely benefit quite a bit if his suggestions are put in place.

And now for something completely different

Here are a couple of non-financial links:

Making bacon.  Who doesn’t like bacon?  This song video is quite amusing and it might make you hungry.

The Rob Ford story just gets better and better.  Jon Stewart from the Today show did a hilarious skit on Rob Ford which is well worth watching.

 

Categories
Announcements

LinkStuff – More Money For Beer Edition

I did a book giveaway earlier this week for the awesome More Money for Beer & Textbooks book and the two winners were Judy and Siu (who also won the funniest comment award).

If you know someone who is in post-secondary education or about to enter – please buy the book for them.  It’s really good.

On with the links

Mike Piper answers the question – What happens to bond funds when rates go up?  Hint – It’s not as bad as you might think.

Harry Sit says that non-profit companies are not always better to use than for-profit companies.  Some good points.

Tom Drake has a beginner’s guide on how to buy stocks. It includes what to look for in a stock and discount brokerages you could use.

Robb from Boomer & Echo says that a high debt-to-income ratio is misleading and not to worry about it so much.  Of course, as always it depends on your situation.

Michael James wrote about how RRSPs and RRIFs are mis-handled for low-income seniors.

I like this article about a 20-something person who isn’t disappointed they aren’t living the dream and is working their butt off to improve their lives as best they can.

This drives me nuts – EI for seasonal workers is a bad idea.  We are paying people to not work for part of the year.  Dumb!

Categories
Book Review

Great Money Advice For Canadian College & University Students On How To Avoid Student Loans

I recently had a chance to read the book “More Money for Beer and Textbooks” which is a book written for students in post-secondary education or in their last year of high school or CEGEP.

It was written by Kyle Prevost and Justin Bouchard who are both educators and managed to get through their own schooling without any debt. They blog at MyUniversityMoney.com and YoungAndThrifty.ca.

This book is excellent. It provides all the information that a student or about-to-be student needs to know about how to manage money while at school.  It is written in an engaging and realistic style that should appeal to students.

It’s doubtful as to how many young people will buy this book on their own, so I would urge anyone who knows a young person who would benefit from this book to buy it for them. Let’s face it – an 18 year old isn’t going spend $20 on a book, but if you or someone close to them buys it and gets the kid to read it, the returns could be huge.

Some thoughts about the book

Chapter 15 – Choosing an in-demand career

I’m going to start with the best chapter in the book which is chapter 15 (although it should have been chapter 1).  This chapter deals with the topic of choosing an in-demand career.   So many people sign up for a field of study which isn’t likely to turn into a decent career and they put themselves into a big financial hole.  Your choice of career will outweigh any financial decisions you make while at school.

Kyle & Justin do a great job with this sensitive topic by pointing out that degrees that have good employment prospects are not necessarily “better” degrees, but that they tend to lead to better careers and better finances after graduation.   If you know someone who wants to do a degree which will lead to a promising Starbucks barista career – get them to read this chapter.

The cover

I love the cover.  Mmmm…beer.

School Costs

The book starts off with a very sobering and even depressing look at education costs and how much more they are than when old people like myself went to school.  Well worth it for parents to read if they aren’t aware of the ‘new math’ when it comes to paying for post-secondary education costs.

Housing

Great comparison of on and off campus housing.  Don’t assume on-campus housing is always more expensive.

Scholarships

Very valuable information and strategies about scholarships/grants etc.

Summer jobs

Good strategies about how to find a summer job.  The authors also give their opinion on working during the school year.

Other resources for students

For another good money book for students who are nearing the end of their academic careers or have recently graduated – check out Rob Carrick’s How not to move back in with your parents.

For parents of kids who are a bit younger, The RESP Book written by yours truly is a good resource for saving for post-secondary education using RESPs.