Author: Mike Holman

Categories
Announcements

Friday LinkStuff and Blog FreeLoaders Edition

The Canadian Capitalist site got a big makeover this week as a result of his new affiliation with MoneySense.ca which is a really good Canadian money magazine.  I’m very happy for Ram but I have to say I was extremely disappointed in some of the comments he received on the announcement.  Numerous commenters said he sold out and they were disappointed and blah, blah, blah, blah….

I think this is ridiculous – first of all, if you read Money Sense and the Canadian Capitalist then you know that they are a great fit.  They both have exactly the same approach to personal finance and investing so I don’t see how there would be any interference from MS.  Second of all – Money Sense doesn’t strike me as big business. I suspect that they need Ram a lot more than he needs them so I don’t think they will be trying to influence him at all.

Ramit from I will teach you to be rich has been promoting some self-made products over the last year or so and has gotten a bit of flack.  His answer is that people who read blogs and don’t want to pay for anything (including even looking at ads) are free loaders and he’s ok if they leave.  I couldn’t agree more – there is nothing wrong with “free” content but you get what you pay for.  I’ve been involved in blogland for about 3 years and I’ve seen a lot of blogs come and go.  One thing I’ve noticed is that the staying power of blogs has a lot to do with the ability of the blog to earn some money and make continuing the blog worthwhile.  Bloggers who aren’t able to monetize their site almost always end up fading away.  Readers who say they want Ram to “not sell out” and not make any money might not be so pushy if the result was a formerly great site that hasn’t been updated in ages like so many others.

The rest of the links

Financial Uproar rated the hottest personal finance blog chicks.  Sure, it’s sexist but I can’t say I disagree with his list.  😉  Check out his blog too – it’s pretty good.

Canadian Dream had a great post about guilt from not being able to get everything done.  He also uses bad words which I liked.  🙂

Krystal got laid off this week – sounds like she got a raw deal.

Million Dollar Journey (aka Kathryn) gave some tips to know when it is time to leave your job.

Squawkfox shows us how to make a budget.

Fiscal Geek asks if there is such a thing as good debt.

Preet has a 4 part series on going bankrupt in Canada.

Financial Blogger says that the media is full of sh*t.  Well duh!

Debt Free Adventure got a refinanced home loan and saved a bundle!

The Wisdom Journal says that Net Quote is a good place to look for home owner insurance quotes.

ABCs of Investing wrote about reasons for doing a Roth IRA conversion as well as explaining how to convert to a Roth IRA.

Carnivals

Carnival of Money Hacks

Festival of Frugality

Carnival of Personal Finance

Categories
Personal Finance

Portable DVD Player To Amuse Kids On Car Trips

We recently bought a Dynex portable dvd player for my son to use in the car on long trips.  This isn’t something that I really wanted to do since I grew up in the era of playing road kill identification games and making fun of people in other cars to help pass the time on long trips.  The idea of watching the “moving pictures” in the car still seems fairly alien to me.

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The problem is that my son is often extremely loud in the car and it drives both my wife and I nuts.  We take a lengthy road trip several times a year to visit my parents so we have to deal with this fairly often.  It got so bad that my wife and I seriously considered drawing straws to see who got to ride the bus on the next trip.  My daughter doesn’t seem to be as loud in the car, although with a bit more training from her older brother – I’m sure that will change.

I bought a fairly cheap player from Best Buy which cost $70.  Even though this will only get used in the car, if it can create some peace and quiet then it would be worth paying $700!  You can pay quite a bit more for these kind of players but the main differences seem to be the screen size (ours is 7″) and battery life. Larger ones with better sound and picture (and more weight) can run $200 or more.  I can tell you and  that the screen and sound quality for our dvd player is quite adequate.

The unit itself is pretty small and light which is great since my son holds it in his lap.  It has an internal rechargeable battery which is supposed to last for a few hours.  It also has a cigarette lighter plugin so you can keep running it after the dvd internal battery has run out of juice.  I believe you can also get some sort of splitter in order to have 2 players plugged in at the same time.

We tried the dvd player out on our last big trip at Christmas and all I can say is wow!  It worked so well that I bought another one for my daughter.  The kids were surprisingly well behaved on that trip so we didn’t whip it out until the last hour of the return trip.  Next time we’ll bring it out a lot sooner!  I’m not a big fan of too much tv for little kids but on road trips things are different.  I don’t care if they watch movies and eat french fries the entire trip – whatever it takes to get them quiet!

What kind should I buy?

Portable dvd players come in all sorts of sizes and quality.  It really depends on your requirements.

Here are some considerations:

Screen size – Ideally it would be nice to have a larger screen size but the drawbacks are more weight, batteries won’t last as long and higher cost.

Battery/plugin – If you are using the player exclusively at home and in the car then the battery life isn’t that important.  On the other hand if you are using it in a plane or camping where you can’t recharge easily, then getting a longer life battery will be more important.

Weight – Obviously, the bigger the unit is and the bigger the battery then the more it will weigh.  A larger player isn’t necessarily ideal in an already crowded car.

Summary

I definitely recommend a portable dvd player for someone who wants to watch movies when they are on the go or don’t have access to a tv.  I can’t state enough how useful they are to get the kids to shut the f*** up in the car.  🙂

The type you buy is really dependent on your usage and needs so think about what is important for what you want it for.  I would suggest that unless you have a specific need that requires a more expensive player then just buy a smaller cheap one.  They don’t cost much so you can always upgrade to a better unit later on.

Categories
Announcements

Introducing A New Writer At Four Pillars – Jay

Hi there, my name is Jay Harris.  I am a 21 year old guy living in Vancouver, B.C. I’ve been considering organizing my finances for a while now, but while I was a student I never felt that I was making/spending enough money to justify the effort of creating/maintaining a budget. However, having run out of money for school and being forced to find gainful employment – and with the hope that I will be able to save up enough money to return to school and finish my degree – I am today starting down the road of financial accountability, and I would like to invite you all to participate with me.

I will be penning a weekly article here on Four Pillars chronicling my exploration of this scary new world of financial accountability. Seeing as you may choose to read these articles from here on out, there are a few things that you should know.

  1. I’m not writing as an expert; I doubt you will ever see me do an “answer the reader’s questions” article on budgeting here on Four Pillars.
  2. I believe that budgeting my time to be at least equally as important as financial budgeting is, and I will be spending equal amounts of time covering the financial costs of things as well as the time cost/benefits of things.
  3. I am young, and while it is true that sometimes I feel like I have all the answers, this is not one of those times. I would greatly appreciate feedback and advice in the comments section. I am – for all intents and purposes – Four Pillar’s very own sentient budget lab rat with access to the internet. Don’t be afraid to blast me if you think I’m wrong, but please offer a counterpoint when you do so.

Okay, that’s about all I’ve got to say for the moment.  Next week I will take an in-depth look at my financial situation, my immediate and long term goals, as well as what kind of budget system I’m using to reach those goals.

Again, I’m really excited to be doing this, and I hope you all can help me as I try to implement solid budgeting skills that will hopefully stick with me for the rest of my life

I can’t promise to make budgeting sexy, but I will try to make it fun.

Many thanks to Mike for allowing me to have this opportunity; I sincerely hope that I can become an excellent addition to Four Pillars.

Categories
Announcements

LinkStuff For Sunday, March 7

One of the scarier parts of being a parent is worrying about safety hazards to your child. Parenting Squad has a list of food choking hazards and surprisingly (to me) is that hotdogs are by far and away the worst for your kid.
Brip Blap had an absolutely brilliant story about a smart couple that got the upper hand in a real estate negotiation by using FaceBook.

Canadian Capitalist discusses the stock option tax break in the recent budget.

Kathryn from Million Dollar Journey says to succeed financially you must know yourself first.

The Financial Bloggers asks what will the Canadian prime interest rate be at the end of 2010?

Thicken My Wallet has some ideas about why some small businesses fail.

Carnivals

Budgets are Sexy!

Festival of Frugality

Money Hackers Carnival

Carnival of Road to Financial Independence

Festival of Frugality

Festival of Stocks

Carnival of Financial Planning

Carnival of Taxes

Carnival of Twenty-Something Finances

Categories
Investing

TFSA Rules And Contribution Limits For 2020 Tax-Free Savings Account

The tax free savings account (TFSA) has been available to Canadians for a while now.  One of the benefits of being a year older is that you now have more contribution room available to invest in your TFSA.

If you turn 18 this year, your contribution limit is $10,000.  If you turned 18 prior to this year, your TFSA contribution room will be $5,000 per year starting from the year you turned 18 or 2009, whichever is later up to to 2012.  2013 and 2014 have $5,500 contribution limits and 2015 is $10,000.  2016, 2017, 2018 the limit was $5,500 and the limit is going up to $6,000 for 2019.

In other words – here are the annual contribution limits per year – keep in mind you have to be 18 to accrue any TFSA contribution room.

2009 – $5,000

2010 – $5,000

2011 – $5,000

2012 – $5,000

2013 – $5,500

2014 – $5,500

2015 – $10,000

2016 – $5,500

2017 – $5,500

2018 – $5,500

2019 – $6,000

2020 – $6,000

My wife and I have made full use of our TFSA room because we have a $20,000 emergency fund which fits our TFSA accounts like a glove.  There are many different potential uses for TFSA accounts, but keeping an emergency fund is a good one, since all interest earned in the account is tax free.  We keep the emergency fund TFSA at ING Direct – see how to get a $25 bonus here from ING.

Use the ING referral code 33089336S1 and get a $25 bonus in your account!

The basic rules and limits haven’t changed since last year.  Make sure you understand how the withdrawal rules work (withdrawal amounts get added to your contribution room starting on Jan 1 of the NEXT year).

Basic TFSA rules for 2015

  • Contribution room increases by $5,000 per year starting in 2009 or the year you turned 18, whichever is later until 2012
  • Contribution room for 2013 and 2014 is $5,500 for the year..
  • Contribution room for 2015 is $10,000.
  • Contribution room for 2016 is $5,500.
  • Unused contribution room carries over indefinitely.
  • Any contributions made to the TFSA will result in a similar reduction to your available contribution room.
  • Any withdrawals from your TFSA will result in a similar addition to your available contribution room, but only effective January 1st of the following year.  See my “December strategy” for details on this.
  • All income earned in the TFSA is not taxable.
  • All withdrawals are not taxable.
  • There is no “contribution receipt” issued for TFSA accounts.  Any money contributed to a TFSA has already been taxed (at your personal income level) and doesn’t get taxed again.
  • You can have multiple TFSA accounts at different financial institutions.  However it is up to YOU to keep track of your contributions.  The government knows if you go over the limit and will charge an over-contribution fee.  Don’t expect any kind of friendly phone call if you go over your limit – the government will just start charging the fee and it will be payable on your next tax return.

Type of investments allowed in TFSA accounts

It’s a common perception that only bank accounts and GICs are allowed in TFSAs.  This is not true – whatever investments are allowed in an RRSP account are also allowed in TFSAs.   Stocks, bonds, mutual funds, index funds, ETFs (Exchange Traded Funds), GICs, high interest savings account are all eligible for TFSAs.

Where to set up a TFSA Account

Plenty of TFSA options:

  1. Discount brokerage – This is the place to buy stocks, ETFs, bonds, mutual funds, index funds.  See my Canadian online discount brokerage comparison for a complete look at options and fees.  Questrade brokerage is my personal favourite.
  2. Banks – This is the most convenient option for high interest savings accounts and GICs.
  3. Financial advisor – If you have an advisor of some sort, they should be able to set up an account for you.
Categories
Money

COBRA Extension 2010 And Unemployment Benefits Extension 2010


On March 3rd, President Obama signed the Temporary Extension Act of 2010 HR4691 after it was passed by Senate with a resounding 78-19 vote.  This bill only creates extensions for one month – until the end of March but it will provide much needed relief for many unemployed Americans.

There were two main sections of this bill which affect many Americans

COBRA extension 2010

COBRA is a medical health care plan for unemployed people which had been 65% subsidized by the government as part of the Stimulus effort of last year.  The unemployed person pays 35% of the COBRA premium and the government pays the other 65% for up to 15 months.

This subsidy had been scheduled to run out for people getting laid off after February 28.  Given the very high national unemployment rate (10.6%) it only makes sense that this program extension is quite necessary.

To qualify for this extension you must have been laid off between September of 2008 and March 31, 2010.

Unemployment Benefits Extension 2010

There have been numerous unemployment benefit extensions as a result of the stimulus package from last year and subsequent extensions as well.  Further extensions would be provided as part of this bill.

Passing of this Bill was delayed by Republican senator Jim Bunning of Kentucky who single-handedly held up the bill because of deficit concerns.

New info

$250 Prescription Drug Rebate Payment For Doughnut Hole Medicaid Gap

Categories
Money

Senate Rejects $250 Stimulus Check For Social Security And SSI

It looks like the proposed $250 Social Security stimulus check which was announced by President Obama late last year is unfortunately not going to be sent out.

On March 3, the Senate voted down the proposal for a $250 bonus check by a score of 50-47.

The reason that the plan was voted down was because of the cost. It was estimated that sending out the $250 checks to Social Security recipients as well as SSI recipients would have cost about $14 billion dollars.  Considering the current deficit is at record levels, the Senate decided that some cuts had to be made.  The other reason is that the Social Security payments are indexed to inflation which is why they were increase 5.8% last year, so to give a bonus when inflation is low, defeats the purpose of the indexing.

Just last week Senator Bunning held up another important vote on extending long term unemployment benefits in a rather bizarre one-man show of fiscal restraint.

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

The government is on pace to run up a record $1.6 trillion deficit this year because of various stimulus spending including $66 billion dollars on various unemployment extension benefits.

The $250 Social Security payment was being considered to make up for the fact that the Social Security payout did not have a cost-of-living increase this year because of low inflation.

The $250 check was paid out last year to Social Security recipients, SSI recipients and a few other groups as well.

Is there any chance of another $250 stimulus check this year?

This Bill is dead in the water but that doesn’t mean a similar Bill couldn’t be created.  I personally doubt that there will be another check this year but if the cost-of-living increase for 2011 is zero or close to zero percent then I think the odds would be quite good that another $250 bonus check would be approved.

How many senior citizens does this effect?

There are about 55 million senior citizens receiving Social Security who would have been eligible for this bonus payment.  Although the check amount is not huge, it will be interesting to see what effect, if any this will have on future elections.  It was widely expected that this stimulus payment would be paid out by March of 2010 and there will be an awful lot of disappointed, and possibly angry senior citizens who might be thinking that they have been short-changed $250 by this vote.

Categories
Business Ideas

How To Start An Online Business

Recently I was discussing with my wife an idea she had for an online business.  One of her hobbies is genealogy, which is basically researching your family tree so she had the idea of offering a genealogy research service for money.  I don’t know if this business idea will ever get going or not, but I thought I would share some of my thoughts for researching and testing this idea.  Hopefully, some of you will have ideas or even experience at this sort of endeavor.

The basic business idea

Offer genealogy services over the internet for a fee.  For example someone who wants to learn more about their family tree but doesn’t have the knowledge or time to do the research might be interested in purchasing this service.

Reasons why she might be good at this business

  • She is interested in the topic.
  • Has quite a bit of experience and expertise.
  • Has access to paid tools and databases. Most of the “free” genealogy databases are fairly limited and you have to pay to see the good stuff.

Potential downsides

  • Can’t get clients.
  • The profit might not be large enough to make it worthwhile.
  • Might lose interest in her own family research.
  • She finds that she hates researching other people’s family trees.

These are the action items I suggested to research the idea

Competitive research: Look around and see what services other people are offering.  If nobody else is offering that kind of service then it might be an underserved niche or more likely – there is no demand.  🙂  If you can find some similar services then try to figure out what exactly they offer and for how much.  You can see their rates on their website or you can email to get quotes from them. This might give you an idea of what kind of hourly rate you can expect.

Determine your services/products

Try to think of specific things you can offer/advertise.  Ie for $N you can do a listing of someone’s grandparents and their siblings.  Or do a family tree up to a certain level.  Or if requests end up being too variable then just advertise an hourly rate or quote for a project.  The competitive research from #1 might help with this.
The problem with genealogy is that it is never “finished” so you have to set boundaries.  It’s also hard to know what people want – will they ask for as much info as possible?  Do they want to know about 1 specific person?  Do they just want to know what countries their predecessors were from?
Pre-packaged “gift” ideas might be a good seller.

Determine rates

This one is easy – look at what others are offering and go from there.  Rates can be changed very easily so just start at a reasonable rate and increase with demand.

Website

In our case I can easily set up a website for her using my existing hosting.  I can also leverage off of 4P traffic to help advertise her services.

I find it interesting to note that this is the type of business which modern technology has enabled.  At one time it would take a huge amount of time to research one line of a family tree going back 200 years so nobody but the richest people could afford it.  Now, access to that info is much more accessible so it is a lot cheaper for someone to offer/buy a service of this type.

I know a lot of our readers have started businesses?  Do you have anything to add?  Have you ever started a business and then quickly stopped when you realized it wasn’t going to work?