Category: Announcements

I bought a few more camping supplies last weekend at Canadian Tire. There were no price discrepancies this time, but it wouldn’t be a CT trip without some kind of incident.

I was walking along the sidewalk to our car with my two kids riding in the shopping cart. Up ahead there were two carts perfectly positioned to completely block the sidewalk. I mentioned this to my kids and they volunteered to move them. My five year old son moved one of the carts, but unfortunately it rolled right off the sidewalk onto the parking lot. There were no cars where the cart rolled onto – I think they were “customer pickup” spots or something.

The parking area has a slope where the cart was and it started rolling towards the driving lane. The three of us stood there and watched as the cart ended up crashing into a mini-van trying to park.

I thought “oh no”, thinking that the driver was going to be mad and expect money or something. However, he didn’t do anything at all. As I got the kids into my car, he had his trunk open and was just acting normal. Later I went over to apologize and the guy was super nice. He said he had two little kids in the back as well and understood what it’s like. It was just an accident, so no problem.

Thanks to the Canadian Tire parking lot stranger for being such a nice guy and sorry about the dents!

The Globe & Mail

I chatted with Roma Luciw of the Globe & Mail recently and she quoted me in two separate articles.

1. A primer on how to withdraw from RESPs.  Find out my little RESP secret.
2. Are you getting the most from your RESP?

I’ll be doing an online chat with the Globe & Mail site answering RESP questions on Wednesday, September 7th at noon.

On with the links

Susan Crossman wrote a beautiful piece on her kids going to summer camp and what it all means.

My buddy Matt Jabs has put together a neat book of 60 natural DIY cleaner products. Matt is really into DIY everything (to put it mildly) and cleaning products are a pretty good application of this.  I might have to make some of these for my housekeeper.  🙂

The Globe reports that schoolyard design is contributing to child obesity. This is the biggest bunch of b.s. I’ve ever read. The schoolyard at my old public school was right out of a prison movie set sans the high walls and guard towers. One big flat expanse of asphalt and black rock gravel with the obligatory basketball court. That was 35 years ago when there was only one fat kid per school. I mean come on – kids today are not as active, they have more access to crappy foods and they are fatter because their parents are fatter. The other problem is that parents won’t let kids do anything on their own anymore. Fine, but it’s up to the parents to stay active, so their kids will stay active.

Canadian Financial DIY says we need to include total returns when talking about stock market returns.

My Own Advisor brags about how old his car is.

The Oblivious Investor explains why markets are relatively efficient. Even if they don’t seem that way at times.

The Wealthy Canadian bought one ounce of gold.

Rob Carrick had a very good list of 20 things I don’t understand about personal finance.

Sustainable Personal Finance advises to pay yourself first.

Canadian Capitalist lists the things he liked about the Wealthy Barber Returns.

Echo explains why he doesn’t need a mortgage broker. I couldn’t get my bank to budge without one.

Michael James doesn’t think that high gas prices are changing behaviour.

Million Dollar Journey wrote a primer on futures contracts part deux.

And a few more links

• Why An Inverse ETF Is A Bad Choice, Even In This Economy
• Preparing for Emergencies- Hurricane Irene in North Carolina
• Should You Start Your Own Business?
• Don’t Waste Your Credit Card Cash Back
• What’s The Best Time & Way to Buy a Home?
• Auto Shopping: Tips For Buying And Getting The Best Price Your Next Used Car
• How To Invest Money For Your Kids
• Will Roth IRA withdrawals be taxed in the future?
• TradeKing Online Discount Brokerage Review

 

We did our big camping trip last weekend at Awenda Provincial Park which is about an hour north of Barrie, Ontario.

It went very well, although Saturday was pretty rainy. Luckily our friends thought to bring a big tarp, so we had a dry place to hang out. The weekend ended up being really fun.

We learned that we need to organize our camping gear better. It was difficult to get everything packed into the car and the fact that we had an extra air mattress and extra tent didn’t help much. We also had a sleeping bag which I’m sure is rated for -100 degrees. It’s very cushy, but we just don’t need something that big for summer camping.

That’s it for camping this season, but we’re hoping to go several times next year.

On with the links

Fascinating article on decision making and how tiring it can be.

Adrian Liston pokes some amusing holes in the US government debt vs family debt debate. Apples and oranges.

Canadian Couch Potato had a very funny post on the suitability of gold as an investment.

Financial Uproar (one of my favourite bloggers) had an excellent piece – debt isn’t evil. He’s right.

Nelson from Financial Uproar wrote another great post on fixed or variable mortgages. Great analysis.

The Oblivious Investor came up with an innovative way to plan for variable withdrawal rates in retirement.

Big congrats to Potato who has finally finished his PH.D.

Boomer & Echo explain real return bonds.

Canadian Capitalist announced that BMO Investorline will allow US$ registered accounts.

Kevin Press didn’t have a successful yard sale. I think he just can’t let go of those couches.

Michael James talks about the problem with currency hedging.

Million Dollar Journey wrote about futures contracts.

My Own Advisor doesn’t like online investment calculators. Probably because most of them lie.

I’m on holiday this week (from the day job at least) and one of our activities was a day trip to Windy Lake Provincial Park.  We had a great time – the lake is beautiful and there is a very nice beach which the kids loved. We checked out the campsite area and it appears that all of the sites are quite large and most are very private.

 

Best of all they have some sites with Yurts – which are basically a cabin in the campground.  A yurt site has a building with electricity along with a propane bbq.  This will make camping a bit easier as you don’t need a tent or stove.

Of course purists will say it’s not “real” camping, but I don’t care.  All I know is that camping with two little kids is a ton of work and if “cheating” a bit allows us to go more often, then that’s what we’ll do.

Media/book stuff

I did an interview with Roma Luciw of the Globe & Mail this week.  She does a weekly “tips” column and I should be in the one next Monday or the week after.  The topic will be “Withdrawing from the RESP”. We are also looking at doing an online discussion on that same topic which should be fun.

Work continues on the RESP Book 2nd edition and related projects.  I have three deliverables:

1. 2nd edition of the RESP Book (print edition).
2. Release a Kindle version of the RESP Book (2nd edition).
3. Release a Kindle mini-book which will just contain the withdrawal information from the RESP Book.  This will be called “How to withdraw money from your RESP” or something similar. This mini-ebook will be aimed at people who are too cheap don’t want to buy the entire book, since they only want to know how withdrawals work.

On with the links

One of my posts with the highest traffic is Why you can’t trust real estate agents. For some reason, most real estate agents don’t like that article. Lots of interesting comments on that post.  My response is the following quote:

It is difficult to get a man to understand something when his salary depends on his not understanding it. – Upton Sinclair

In other news – Mike Holman came up with 8 reasons why you should use a real estate agent.

Squawkfox wrote a hilarious post on the costs of collecting.  Just go read it.

The Finance Buff says that most investors don’t sell everything in a panic.

The Blunt Bean Counter writes about some common investment errors he sees in his practice.

Moshe Milevsky asks the very good question – How long can home prices keep rising?

Five Cent Nickel did an interesting analysis of the stock market last week.  He calculated how much of a loss a buy and hold investor had for the week compared to someone who tried market timing and got it all wrong.  The results are quite interesting.

My University Money reviewed the excellent Michael Lewis book “Liar’s Poker”.

Boomer & Echo has an amusing article of useless gadgets you shouldn’t spend money on.

Jim Yih come up with 5 very good realities of the stock market.

David Swenson who runs the Yale endowment fund, slams the mutual fund industry.

Canadian Capitalist comments on the Swensen article.

Michael James says that mutual fund MER charges are still significant during turbulent market swings.

Million Dollar Journey has 5 tips to buy your dream house.

 

 

 

Pretty exciting week in the markets this week. Maybe a little bit too exciting for some.

I’ve been below my 75% equity allocation for several months due to an RRSP transfer and general portfolio neglect. I find it hard to buy a big chunk of equities all at once after the market has risen so much, so I’ve been waiting for a drop to buy.

I still haven’t reached 75%, but I’m a lot closer than I was.

Have I mentioned I’m doing a 2nd edition of the RESP book?  😉  I’m hoping to announce something on this in the next couple of weeks.

On with the links

A fantastic post about market volatility and how to deal with it. At the Bogle Heads forum.

Barrie McKenna had a great article about taxation levels in the US and how they have plenty of capacity to raise taxes.

Economics of Contempt wrote a scathing article on the compentency of S&P raters, or the lack thereof. Entertaining read.

Rob Carrick says that the recent interest rate “hold” in the US means that if you have a secure job and lots of debt, you’ve got it made.

The Boston Globe reports on a very poorly designed lottery that is easy to game. Very interesting story.

The Oblivious Investor addresses recent market activity with risk tolerance in action. I like how he says that “rebalancing isn’t supposed to be easy”. And neither is investing in equities.

MoneyVille had an article about a good hard drive with an easy backup system. I think I’m going to buy one.

Preet Banerjee says that the debt markets disagreed with the S&P downgrade.

My Own Advisor reveals a love affair with his bond ETFs.

Million Dollar Journey lists the top 5 pension myths.

Michael James says that rebalancing can be hard to do, because there is no instant gratification.

Canadian Capitalist thinks that he is above average – and so are you. 😉

Boomer & Echo had some good thoughts about should you make RRSP contributions if you have a DB pension?

The big drama this week is in Washington as both political parties are fighting over whether the debt ceiling should be raised. At stake are all the various financial obligations of the US government: Social Security payments, government worker wages, interest payments on debt etc.

If the ceiling isn’t raised in time, then the government will have to start cutting back on some of it’s obligations.

Will social security payments be paid if United States defaults on its debt?

One of the obligations of the United States government is to pay out Social Security payments to retired people. If the government has to cut back, it is possible that Social Security payments might not be paid in August.

It’s certainly not guaranteed however that this will happen.  The government has a lot of financial obligations so there are a lot of different areas where cuts could be made before Social Security.

Will Social Security payments be paid later on?

Given that the potential default, isn’t an actual economic default (ie the government isn’t bankrupt), it is very likely that even if the August Social Security payments are not mailed out on time, they will be paid later on, once the debt ceiling situation is resolved.

What is the debt ceiling?

The debt ceiling is a piece of legislation that regulates the amount of dollars of debt the United States government is allowed to borrow. Since the government budget is running a deficit, it is necessary for the government to continually borrow more money to meet its obligations.

Once the total debt equals the debt ceiling figure, the government cannot legally borrow any more money and will have to start making cuts to expenses – even if those expenses are obligations like Social Security to which the government has already committed to paying.

Why isn’t the debt ceiling being raised?

The Republican party is using this opportunity to try to get the government to reduce spending and rein in the deficit.  It is likely that eventually the ceiling will be raised, but for now it is a negotiating game between the Republicans and the Democrats.

Will this be a real economic default?

If the debt ceiling is not raised in time and the US government misses some payments, this will result in a technical default.  However, it should be noted that a “true” default is one where a government can’t make all their payments and does not have the economic strength to make changes in order to remove the default status and can’t borrow enough money.

For example in Greece, the economy is not big enough for the government to be able to pay off all its debts or even make all their payments.  At some point, they will be in a true default.  In other words, they just don’t have enough money and nobody wants to lend them any.

In the US, it is only the debt ceiling legislation that is standing in way of the US government meeting all of its obligations.  This legislation has been raised many times in the past and it will likely get raised again soon – if not by August 2nd, then soon after.

The US government has plenty of money, can easily borrow more money and is not in danger of “running short”.  If necessary they have a lot of power to increase taxes which can help with any budget deficit as well.

 

One of the links below discusses how expensive houses are. I like my house, but when I think of all the money we have to put into the basement (it’s a complete disaster down there) and a new garage, it is a bit discouraging.

We’re going to be mortgage-free next year and while I had hoped that might open up some different career options, in reality I think the fixes we need to do to the house will just be another form of a mortgage for the next several years. Oh well – as they say on Twitter – #FirstWorldProblems

On a more positive note – I have finished the 2nd edition of The RESP Book. I hired an editor to check for grammar and typos and then I will do the formatting necessary for the printer. So my goal of a September release is still possible.

On with the links

The Wealthy Canadian (a brand new Canadian personal finance blog) breaks down his investment portfolio by sector. Go check it out and subscribe!

My University Money wrote a funny inside look at financial literary programs for high school students. Worth a read.

Scott Ronalds from Steadyhand reviews the ironically named “Manulife Simplicity Balanced Portfolio” fund. Simple it ain’t!

Krystal Yee says that there is nothing wrong with not loving your job. Exactly – that’s why it’s called a “job”.

Michael James explains how you can lose money on a leveraged ETF regardless of how the market performs.

My friend Ruth talks about her Mom who passed away one year ago. A great tribute.

Blunt Bean Counter discusses some of the pros and cons of buying vacation property in the United States.

Canadian Business had a great article about why renting a house is better than buying. I like owning a house, but when I think of all the work involved and the huge sums of money we need to fix up our basement and garage, I have to question why we are doing this.

Financial Uproar makes a great case as to why professional athletes are not overpaid.

Jim Yih wrote a very good article about the new PRPPs and how they should look.

The Oblivious Investor questions whether an emergency fund is essential for everyone. Some good points.

Today’s Economy blog discusses the “Grand Experiment” taking place in a country near you.

Boomer & Echo came up with several ways to save inside your TFSA.

Million Dollar Journey talks about getting pre-approved for a mortgage.

I’ve been having trouble finding time for posting lately – work, holidays, exercise, and the Tour de France have all been taking up a lot of my time.

The good news is that I’ve been exercising a ton and I feel like I’m getting into decent shape.  This morning I weighed in at 174.5 pounds which is probably a 15 year low.

On with the links

Krystal Yee from GMBMFB, put up some photos of herself wearing braces. If you’ve ever wondered what she looks like and how she got onto the vaunted Hot Personal Finance Blogger Chicks list, now you can find out. I don’t want to say too much (since my wife reads the blog), but I would definitely recommend that the guys go and check out her braces. 😉

Canadian Couch Potato wrote about his experience with the Scotia iTrade US$-friendly RRSP.  This option is not as good as a proper US$ RRSP which is available at Questrade, Qtrade and RBC, but it’s a reasonable workaround for high currency exchange fees.

MapleMoney wrote a Qtrade Investor Online Broker Review.

Michael James had an interesting article on irrational risk avoidance.

Retire Happy put together a great list of questions to ask potential financial advisors before you hire them.

Million Dollar Journey talks about estate planning.

The Oblivious Investor says that risk means different things to different people.

Boomer & Echo says it’s time to check up on your employer sponsored pension plan.

Today’s Economy blog says We’re not frugal, just tired.

The amazing Preet Banerjee reveals that market research is sometimes just spin.

Canadian Capitalist wrote about John Bogle’s estimate of the behaviour gap. I’m always skeptical of these estimates. I’d like to know the methodology behind the numbers.

Larry Swedroe asks if Meredith Whitney could have been more wrong? She made a prediction that the American municipal bond market would collapse and so far – it hasn’t.

• The 4% Rule: Does It Still Apply for Your Retirement?
• How I’d Spend a Million Dollars
• Why Isn’t My House Selling and How to Finally Get Your House Sold

I’ve been on holiday this week and my best intentions of doing a second (and better) post this week as well as making some progress on the RESP book 2nd edition were thwarted by an illness.  Oh well.  I’m feeling better now and the holiday is not over, so hopefully I can salvage something.

MoneySense

I was quoted in the latest MoneySense edition in the “Ask MoneySense” section. The question had to do with where to put RESP over-contributions – into the RESP or a TFSA?  It’s a great issue with lots of good retirement scenarios, so I would suggest picking it up.

On with the links

My University Money reviews the Wealthy Barber.  I read this book ages ago and thought it was good as well.  I talked on the phone with Mr. Chilton a while ago and he’s a pretty good guy.

Boomer and Echo interviewed the author of “The Big Cook“.  The idea is to do batch cooking once a month or less.  Sounds good to me!  Head over to the post for a chance to enter in the contest.

Michael James has an interesting retirement living strategy that his wife is not so keen on.

Million Dollar Journey had enough of his Rogers cell phone.

Canadian Capitalist reports that TD Waterhouse is not allowing any asset swaps in RRSP accounts, even though most are still legal.  I don’t blame TD for doing this, although they should be honest about why they are discontinuing swaps.