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 and

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.


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


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.

Book Review

The RESP Book 2nd Edition Is Out!

After (what seems like) years of talking about it, the 2nd edition of The RESP Book is finally available.

I’ve added a couple of chapters, fixed a few typos, updated a few things and even fixed a couple of errors.

Before you start taking out your chequebooks, I should warn you that although there is some new material and a lot of small changes – if you have read the first edition, it is not worth buying this edition. The new material is available here on the blog and none of the corrections were major.

I need your help getting the word out

If you know anyone who might be interested in the book or is in a position where they can let others know about it – please let them know about the book. I can provide free review copies if appropriate.

So you think you can sell?

I’ve created an affiliate program for the book, which means that if you can get other people to buy the book using your Amazon associate link, I will pay you money.

Email me for details – mike at MoneySmartsBlog dot com.

Note that you don’t need to have a web site to sign up for the Amazon associate program.

Change page

If you read the first edition, you might be interested in the change page which can be found here:

This page indicates all the changes I made to the book and at the bottom you can find links to the new material in the book.

Links page

All the links referenced in the book can be found here:

Book Review

Starting Or Running A Business? E-Myth Revisited Book Review

E-Myth Revisited by Michael Gerber came highly recommended from some fellow small business owners and I’m really glad I read it.

It’s an excellent book which explains how to set up and organize a business so that it is a business and not just a job.

What’s the difference you ask? A proper business is an entity that you run and can sell. A business that is just a job is one where you do all the work and the business can’t survive without you (and can’t be sold).

What is in the book

Gerber uses the example of an over-worked pie shop owner to introduce the idea that we all have a technician, manager and entrepreneur within us.

In order to run a business successfully, we have to let all of the three personalities have a say. In the case study of Sarah, the pie shop owner – she had made the common mistake of letting the technician run the show. She kept very busy baking pies and doing anything else that needed doing, but she wasn’t thinking about how to improve the business or how to hire employees or how to expand or how to set up the business so it could be sold.

Most of the book talks about different ideas and solutions for creating a business that doesn’t rely 100% on the owner doing all the work.

One of the most important themes is that the business is more important than the product. For example MacDonald’s sells hamburgers, but the success of that company is not because they have the best hamburgers – it’s because they have the best business process which they were able to market in the form of franchises.

Who should read this book

I think anyone who has a business or is thinking of starting one should read this book.

If you are serious about your business and hope that it will provide a full time income for you – this book is a must.

If you are just planning to do a bit of freelance dog walking on the side, the book won’t do as much for you, but I think it’s still worth a read.

What I liked

It’s very entertaining and easy to read. The author has decades of experience working with small business owners and knows what he is talking about. I really learned a lot.

What I didn’t like

His definition of a business is fairly rigid. Some people don’t want to create a business they can sell – they just want to make some money on the side in a flexible and fun manner.

He talks a lot about creating a franchise which is a way of thinking about your business so it can be sold. Some of his suggestions for documenting and measurement will apply to McJob employees, but can’t be applied as easily to a professional.


Great book, easy to read. Two thumbs up!

To order this book:

If you are from Canada then please use this link for
From the United States then please use this link for
Book Review

Pensionize Your Nest Egg Book Review – Milevsky and Macqueen

I don’t read a lot of personal finance books.  At one time, I did, but eventually it seemed like I had read them all before.  There are only so many ways to save money and perfect your asset allocation.

When I heard about Pensionize Your Nest Egg, I got excited about a financial book for the first time in a long time.  The book promises to educate the reader on how to use product allocation, namely annuities to pensionize your nest egg – or in other words, create your own guaranteed income stream for life.

Most workers in Canada do not have a guaranteed pension when they retire.  Most of us look longingly at government workers and their gold-plated pensions as we get closer to our own retirements.  Most Canadians will retire using funds from CPP, OAS and likely funds from RRSP, TFSA and eventually RRIF accounts.

There are a number of risks associated with living off a portfolio of mostly stocks, bonds, mutual funds and ETFs.  Poor investment performance would be one significant risk.  What if you have some bad returns early on in your retirement and run out of money?  Annuities are one way to buy a “government pension”.  I’ve been learning a lot about annuities over the past year, and I have to say that they will form part of my retirement plan.

My biggest fear with respect to managing an investment portfolio is that one day, I might not be able to do it.  There will come a time when I would rather trade the potential upside and independence of a personally managed portfolio for a guaranteed income stream.

This book shows you how to do it.

What is in the book

The book starts off explaining the risks of having a non-pensionized retirement plan.

Later, the idea of using annuities to pensionize some or all of your retirement income is introduced.  There is also a brief section on guaranteed lifetime withdrawal benefit (GLWB) products.  Annuities, GLWBs and regular investments are said to form the three silos of your pensionized retirement income.

The last section of the book involves the seven steps of pensionization.  Some of these steps are normal retirement planning steps – estimating retirement income, calculating government pension income.  Other steps are brand new and involve figuring out how much of your portfolio you should convert to annuities to meet your retirement goals.

Who should read this book

I would recommend the book for anyone who is interested in their finances.  However, it will be most useful for individuals who are close to or in retirement since they will be in a position to act on the planning outlined in the book.  While the authors made enormous efforts to make the information accessible to average Canadians, the reality is that this is not a simple subject.  I suspect that someone who doesn’t know much about investing will have a hard time with this book.

What I liked

  • The book is very useful and I don’t know of any similar books on the market.  That could change if I decide to write a retirement planning book.  😉
  • The writers are not dogmatic in their pensionization. They explain how to assess your current retirement plan and suggest a variety of actions which include not making any changes at all.  There is a lot of leeway in terms of your retirement goals – you can follow some of their method or all of it.
  • Does a great job of explaining how annuities work.

What I didn’t like

  • The book deals more with the theory of pensionization, than the actual practice.  This is exactly what the authors promise, so it’s not a complaint about the book, but rather a suggestion for perhaps a followup book.
  • One of the “silos” is made up of GLWB products which are very expensive.  The book explains that this silo is a hybrid of the other two silos, but I’m not sure why they didn’t just use the two silos of annuities and regular investment products.  Canadian Capitalist had similar thoughts.
  • One of the planning steps involves figuring out your legacy – or how much you want to leave the kids.  This is a valid calculation, but I would question how many non-rich Canadians will worry about how much to leave the kids, when they are worrying about how much they will have to live on.  My legacy plan is to leave the house for the kids.


A very good book.  Two thumbs up!

Stay tuned to the blog – on Wednesday, I’ll be announcing a Pensionize Your Nest Egg book giveaway!  It will be a quick contest with the winners being announced on Friday.

Other reviews of this book

Book Review

Great book for Canadian Investors – Rob Carrick’s Guide to What’s Good, Bad and Downright Awful in Canadian Investments Review

I recently picked up Rob Carrick’s new book “Rob Carricks’s Guide to What’s Good, Bad and Downright Awful in Canadian Investments Today“.  For those of you who aren’t familiar with Rob Carrick, he is the top personal finance journalist in Canada.  You can read his articles in the business section of the Globe and Mail.

This book is excellent.  It covers all the topics you need to get started in investing such as how to find a financial advisor, how to do your own investing, recommended discount brokerages, various financial products to buy or avoid and much, much more.  Rob writes with a very casual, easy to read style and explains everything in very clear terms.

I have to admit when I bought the book, I thought that:

  • It was strictly for beginners.
  • I wouldn’t learn anything, because I know everything already.  🙂

While this book is perfect for someone who doesn’t know much about investing, it contains a ton of information, and I would challenge any other self-proclaimed “experts” out there to read this book and not learn at least a few things.  As it turns out, I learned quite a bit of useful information.

What kind of investor should read this book?

The book is aimed at the bookshelf of a beginner to intermediate investor.  Advanced investors will learn a few things, but might want to get the book from the library.  I am keeping my copy for future reference by the way.

What was good about this book?

  • No punches pulled.  In the intro, Rob states that he doesn’t hold back and he wasn’t kidding – he has lists of the worst mutual funds and scathing criticism of the investment industry, especially the idea that advisors are acting on behalf of their clients.  I was impressed, considering that most of the companies he named, probably buy advertising in the Globe and Mail.
  • Complete.  The book covers all the investing topics that are necessary for most investors.
  • Uses examples.  He doesn’t just talk theory – he lists specific examples of investing products to buy and avoid ie specific mutual funds and ETFs.  Rob is clearly a big dividend stock fan and lists quite a few recommended dividend stocks.

What was bad and downright awful about this book?

The fact that Money Smarts Blog wasn’t listed in the “good investing blogs” list!  🙂

Truth be told, MSB hasn’t been doing many investing topics lately.  This will be changing in September.

What else has Rob published?

He has also written another book called “How to Pay Less and Keep More For Yourself: The Essential Consumer Guide to Canadian Banking and Investing“.  I’ll be reading this book in the near future.  It’s a few years old, so I might just see if the library has it.

Have you read this book?  What did you think?

Book Review

Book Review: Your Money or Your Life

There are a few books that are beloved and can be a bit dangerous to review.  YMOYL is the bible to a number of people, so I’ll start with saying that I think there’s a lot of good stuff in there, it’s a solid book and just about everyone should read it.  In spite of this, I think there are some major weaknesses in it.


Joe Dominguez was a Wall Street Analyst who developed a program to retire at age 30, then started teaching a course (and eventually wrote this book) to help others do the same.  Since he passed away in 1997, his co-author Vicki Robin and a new collaborator Monique Tilford have continued updating the book and “spreading the gospel”.

The core of the book is the idea that their is a point of “enough” where your needs and reasonable desires are met and the law of diminishing returns kicks in:  you enjoy each little bit extra less.  They present a plan to identify this point of fulfillment, bring your spending and earning in line with it, and eventually retire early with investment income providing what you need while you devote your life to what you really want to do (instead of whatever you feel forced to do right now).

Apparently “The Complete Tightwad Gazette” author Amy Dacyczyn took their course and it was part of the lifestyle change she followed which led to her excellent newsletter (I actually recognized her from an example in the book where she was just identified as “Amy D.”, then later they made reference to her full name and newsletter.

Specific Strategies

How they recommend getting to this point is the core of the book, and in my opinion what REALLY shines.  Basically they suggest figuring how much you’ve earned in your lifetime (more on this later), your networth, and tracking your income and spending.  From here, they get you to figure out what your REAL hourly pay rate is after you’ve accounted for all the associated costs with your job such as work wardrobe, commuting or buying beers at the pub to decompress.  Combining these two, you see what your spending is on various items in terms of your time (e.g. you might be spending 30 hours of “life energy” every month on rent).  For all your spending, they advocated deciding if your spending is in-line with your values or not, and suggest making changes in areas where it is not.  They advocate maintaining a wall chart where you track this from month-to-month, as well as your investment income, and as a trend line becomes clear, estimate when you can quit your job and do what you really want with your life.

Mixed Philosophies

I think the strategies they present are EXCELLENT, but mixed in with them are some extra world views such as sustainable living, environmentalism, anti-consumerism and anti-capitalism.  I don’t particularly have a huge problem with any of these (I have friends in each of these camps), but they’re all tangential to the core of the book and I would have preferred if the authors had stayed a bit more focused.

Much like Dave Ramsey forces you to take Christianity with your debt-reduction advice, I think the authors are using readers’ interest in getting control of their money to force these other views on them.  Again, it’s fine to be a member of a specific faith or to be an environmentalist, but there are a large number of secular people who are interested in reducing their debt and there are a large number of people with other world views who are interested in getting control of their spending.

It seemed like all of their examples were people who followed this program then went on to get into hippie stuff.


I found in a number of places it was their way or the highway.  You don’t get an explanation:  just do as you’re told.  The first step in their program is to determine ALL the money you’ve made in your entire life.  EVERYTHING.  They expect you to try to account for that 5 dollars you got for Christmas when you were 5 years old and that quarter you found on the street when you were 15.

When you do this step set your sights on impeccability – have you really searched your files and your memory banks for all your income?  Yes, you could settle for a “close enough” answer – but we suggest you go for the former, since the power of this program increases with every ounce of honesty and integrity you invest in.  Rounding to the $100 is looser, but over a lifetime that might be plenty.  Rounding to the $1,000….  well, people who do a halfheated job often get a life to match!

I almost stopped reading at that point.  I’ve worked most of my life (delivering flyers then newspapers then flipping burgers as I got older) and trying to estimate my lifetime earning to the nearest $100 would be an insane amount of work.  The only point to this exercise seems to be to develop a realization of how much money has gone through your hands.  For people who view $100,000 as unimaginable wealth, it makes it more concrete if they realize they’ve earned, and spent, this amount many times over in their life.

I disagree with them about the level of detail needed:  I think someone could complete this part of their program with a FAR, FAR rougher estimate then they insist on.

Focus on Your Strengths

They spend a whole chapter echoing the investment advice some friends have told them about, which seemed like another waste of space to me.  In the original version Joe Dominguez suggested buying treasury bonds exclusively.  In this version, they try to present a larger picture of investing and fail miserably.  I think they would have been far better off to suggest Joe’s approach as a start, and encourage readers to learn themselves about investing once they got to that point.

Final Words

Again, I REALLY love this book and think its focus on making specific measurements about your finances and using these measurement to enact change in your life is first rate.  The accounts of people’s lives who have followed the program are interesting and drive the points home.  I think there are some parts that could be streamlined to make it a better book, but in spite of this I heartily recommend it.

Book Review

Book Review: Nudge

“Nudge:  Improving Decisions About Health, Wealth and Happiness” by Richard Thaler and Cass Sunstein is a book about how presenting choices in a different way can lead to widely differing proportions of people making each selection.  At the very beginning they present an experiment where a nutritionist running cafeterias wanted to provide student with the full range of options, but encourage them to make healthier choices.  She found that simply by having carrot sticks (or a similar nutritious item) FIRST in the line increased choice of these over options like french fries by 25%.

The rest of the book presents numerous case studies where, through actions as simple as the order food is presented in a cafeteria line, the choices GROUPS of people make can be massively swayed.  They don’t make any claim (or express any desire) to change the decision of one person.  Instead their focus is on shifting the number of people from choosing one option to another.

Another example they gave is the default choice (what people are assigned to if they don’t choose anything).  In most situations, regardless of how important the decision is, the default choice will get a disproportionate number of people selecting it (a number won’t get around to making a choice and will just leave it as is).

This has always made me angry in the university environment.  At both schools that I’ve attended there were a number of “optional” fees that were charged to your account, then you were given a window of time to submit paperwork to get your money back.  Even if someone got a refund every term, the next term the funds would be automatically be deducted from their account and they would have to take action to get them back (again).  The people running the show wanted to benefit from the default option (leaving the cash in their pockets, not yours).

A running theme in the book is contrasting what they call Econs (think ultra-rational decision makers like Mr. Spock on “Star Trek”) with Humans (think Homer Simpson on “The Simpsons”).  Many policies are designed for Econs, then all us Humans make choices that are bad for us.

This was one of the most dense economics-style books I’ve read in a while, and it took me a bit longer to work through than most books do.  It was very well cited and provides a lot of information, but someone picking it up should realize that they’re getting something closer to a textbook than a pleasure read.

At the end of the book they summarize that the book is about two things, choice architecture (offering choices such that people have the full range of options but will be pushed towards one option) and what they call “paternal libertarianism”.  By this they mean, offer the full range of choices (libertarianism), but use the power to push towards the option that best helps people (paternalism).  I found this element of the book (if sincere) quite naive.  People architecting choices will, as I’ve seen at my universities and every other situation I can think of, “nudge” people in the direction that’s best for the NUDGER, not the NUDGEE.  I’m certain the people setting up the fee structures at my universities had rationalizations for what they’d done, just as I’m sure businesses and governments can easily rationalize “Nudges” they put in place for their own benefit.

I wonder if the authors introduced this element to the book just so they wouldn’t be accused of writing a Machiavellian book on ways to control groups of people (which, make no mistake, this is in part).

Overall I greatly enjoyed this book.  If you’re at all involved in determining how choices are offered to people (even by something as simple as designing a form, being in sales or administering a company benefit plan) this is a book that is well worth reading.  If you find the general ideas enticing, I think this is a solid book with some good meat to it.  Consumers are certainly being manipulated by techniques detailed in it (and have been since LONG before it was published), so if you’re the type of person who doesn’t like being pushed into a decision, it’s probably also worth reading just so you’ll be more aware of ways this is done to us.

To order this book:

From the United States then please use this link for

If you are from Canada then please use this link for

Book Review

Movie Review: Capitalism: A Love Story

I’ve seen almost every Michael Moore documentary.  I like his movies and I like his persona (he seems like he’d be a lively guest at a dinner party).  I certainly don’t agree with all his politics (but, then, I can’t think of anyone I *do* agree with all their politics).  Recently Preet did an interview with the man himself (which was quite exciting) and it reminded me to watch this.

I tend to assume that it’s easy to tell when I’m joking (although I realize, intellectually, that it’s not), and I think Michael Moore has an element of this.  Often he portrays himself as a dumb hick from Flint, Michigan who just wants someone to explain all this to him.  After he’s sucked them into a discussion, he punches them when they aren’t looking.  It’s an amusing way to get some reality TV footage, but it comes at the expense of the people who never signed up to look foolish.  Sacha Baron Cohen and Brian Flemming also use a similar style, and in many ways on the opposite side of the spectrum Glenn Beck and Bill O’Reilly use the same sort of tactics.  In each case it can be hard to tell when someone is being serious and when they’re being facetious (and trying to draw their victim into making a fool of themselves).  Regardless of who does it, it’s amusing but pretty intellectually dishonest.

Early in the move Michael Moore asks people to explain derivatives and collateralized debt obligations (CDOs), which leads to humming, hawing, and incoherent explanations.  The first paragraph of the Wikipedia entry on the history of future exchanges explains what a derivative is, Moore could have easily whipped up a cartoon (set in ancient Greece) that would have explained it, but it’s better for his narrative if it’s presented as an incoherent evil.

On the face of it the movie sets out to show how the subprime meltdown proves that capitalism doesn’t work.  At the end of the movie, Michael Moore presents his views as honestly as I think he ever has when he sums it up as “Capitalism is an evil.  And you cannot regulate evil.  You have to eliminate it and replace it with something that is good for all people.  And that something is called democracy.”

I guess if capitalism is evil, that makes the Canadian Capitalist Canadian Evil (which is kind of cool!).

This conclusion comes from one piece of anecdotal evidence after another through the film.  There’s the poor farm couple whose house has been foreclosed on, the union shop that fires all its employees and closes it’s doors without paying them their final pay check, a few priests talking about how capitalism is unchristian, and the awful corporate special interest groups who have bought the presidency since Regan, manipulate congress and are going to be exorcised by the great Obama.

I share a number of Moore’s concerns (part of why I enjoy his movies I guess).  I think the level of corporate involvement at all levels of government is very troubling, but it’s strange to me that his solution is bigger government (which seems to just pass more money and power into their control).  I feel bad for people losing their houses or jobs, but I’m not convinced capitalism is to blame.

I found the Catholic priests kind of bizarre.  One of them says:

“The system has built into it what we call propaganda.  I’m in awe of propaganda — the ability to convince people who are victimized by this very system to support the system and see it as good.”

He’s talking, of course, about capitalism (huh?).  His statements would make A LOT more sense to me if he was talking about organized religion.

An important part of every Michael Moore film is when he heads out and makes a dick of himself with some poor security guards (who are earning their pay that day, let me tell you).  In this one he tried to make a citizen’s arrest of the entire board of directors at a number of banks, and then he wraps “crime scene” tape around some corporate headquarters.  Moore has even admitted that he feels bad for the people doing their jobs that he harasses, but feels the points he makes are worth putting them through it (“I do feel bad for them on one level. On another level, they’re the good Germans.“).

If you’ve enjoyed previous Michael Moore movies, you’ll like this one as well!  He’s getting a bit more extreme in his politics, but the choir he preaches to will be saying “hallelujah” and his critics will be frothing at the mouth (which is always amusing too).

Have you seen many Michael Moore movies?  Did you like them? Do you find his rhetorical style persuasive?