A Great Financial Understatement

I spend a fair amount of time reading and reviewing some of my older posts, mostly to check the awkward writing style, and to repair broken links and such. I tripped across a classic understatement I made in the summer of 2008

Bad Day on the Market

That was the day after the market meltdown that eradicated a great deal of wealth in a few short days. Remember that the real obliteration of wealth happened on September 20th, 2008, but this was a start (thanks to me being laid off I was a little preoccupied, so I didn’t write about the huge market drop on that day).

In a short paragraph I stated:

Figured I’d add my 2 cents to the fray of Bloggers talking about the problems on the Stock Market these past few weeks. Is this an opportunity to buy? Should we be selling? Is it time to crack open skulls and eat the goo inside? Don’t ask me, I am standing pat for now, and we shall see what happens. My portfolio is down a fair amount, but my feeling is, now is the time, just to “Not Look”. Remember most of my stock holdings are in an RRSP, and thus aren’t a short-term investment either. I am watching TD with intent.

I do like the line, “…Is it time to crack open skulls and eat the goo inside? …” (I stole that from Kent Brockman on the Simpsons), but I was a man of my world, I didn’t touch my holdings (and at the time I still held Nortel, that had not gone bankrupt quite yet). This market apocalypse did lead to my Best Financial Decision Ever, but only because I had money from my Severance Package to invest.

Always interesting to review the past, wonder when the next Stock Market Apocalypse will happen? Hope not soon.

 

 

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Elections, Heat, Cheap Oil, and #BestMoneyStories

Here comes the election (evidently)(maybe). Rumor has it that Prime Minister Harper may dissolve parliament and call an election for October the 19th, making this the longest election campaign (ever). Why? Maybe the MPs don’t want to come back from their summer break and to only have the election start after they have done a weeks work? I have no real reason, but I do know that as soon as Mr. Harper announces this, the three suspended Senators all start earning pay cheques again, so that is good, right? The theory seems to be (on why the election campaign is going to be so long) that the Tories want a protracted election campaign as they have more money in their war coffers? Another theory put forward is the Tories are giving either Mulcair or Trudeau as much time as possible to put their foot in their mouths? No matter what reason this is going to get pretty redundant, quickly.

Needless to say it is very hot in Ottawa, but it is almost August, and that is to be expected (and enjoyed, since I moaned so darn much last winter about how Cold it was). Haven’t seen anyone cooking on the road but it is still pretty darn hot.

If Oil stays below $50 a barrel, don’t expect the Canadian economy making a comeback any time soon. The break even for the tar sands is estimated to be around $90 (by some analysts)  a barrel, and if oil stays down not only Russia will be feeling the pain (Alberta will as well).  Interesting that gasoline continues to be well over $1.10 a liter here, even with oil being so cheap, but I would never imply price-fixing for gasoline, that would be irresponsible, wouldn’t it?

Windows 10 is finally here as well, do you have it yet? Do you like it? July is over as well, you do realize there is less than 150 days until Christmas, right?

Symantec CA

My Writings for Week Ending July 31st

It was International Tiger Day this week as well, but don’t tell any Dentists about it :

  • Are Employer Pensions in Canada Dying ? Stats Canada has some numbers that suggest the traditional concept of the pension is certainly changing, and the idea of your employer directly helping your retirement may be transmographying as well.
  • What are your Money Motivations ? I took a run at a motivational quote I found on-line, remember as each minute passes, you are 1 minute closer to the end of the  {Day|Week|Month|Year|Decade|Your Life}.
  • Rob Carrick was kind enough to include me in one of his Best Reads posts and included my oldie Surreal Paragraphs Found in Credit Card Statements, glad he pointed out I pay off my credit card bills.

Kobo Canada


The Holy Potato put up a great graphic on the Twitter Machine:


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Money Motivations

I read on-line a great motivational phrase:

“You will never have more time to achieve your goals than you have right now.”

This phrase is so true, for money, and unfortunately as you read this article, you now have less time than when you first started reading this article. Most motivational phrases like this (for me) are double-edged swords.

A better catchphrase to go with, on your financial journey, is the following:

“The best time to plant a tree was 20 years ago. The second best time, is right now.”

Which is more of a variation on my commentary about Golf (the best way to improve your golf game is go back 20 years and start golfing then)

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Are Employer Pensions in Canada Dying ?

Stats Canada published an interesting study of Pensions last week, entitled, “Pension plans in Canada, as of January 1, 2014 “, and in it was the great news that more Canadians (total) have pensions (from 2012 to 2013). (Remember previously I did ask Do you have a Pension?)

Looking at all sectors and all types of pensions 169 more Canadians had Pensions from 2012 to 2013 (no that is not in hundreds of thousands, or thousands, it is 169). For all intent and purpose there were the same number of folks with pensions, however, the types of pensions that they have, has changed a fair amount.

  • There are 20,868 less folks in Defined Benefit Pension Plans
  • There are 6.428 more folks in Defined Contribution Plans
  • There are 14,609 more folks in Hybrid Pension Plans, where Hybrid means, “Other plans include plans having a hybrid, composite, defined benefit / defined contribution or other component.

So what does this really mean? I think the idea of the work related pension is changing (some might say becoming extinct, but maybe not just yet), and most folks (next generation after me) is going to have to take care of their own retirement savings. I was lucky enough to fall into a pension, but unless you work for the government (or a bank) you are unlikely to have a classic pension plan (private sector pension plans are down 0.2%).

This explains why you have some folks (like the Ontario government) that think that folks need to have more retirement savings, and they are going to impose it on you (with the proposed new Ontario Provincial Pension), whether you want it or not.

What is interesting is in the mid-90’s folks at Nortel wanted out of the Pension Plan (a defined benefit program at the time) because it was screwing up their ability to put money in their RRSPs (many thought they weren’t going to stay at Nortel their entire career (and they were right, in hindsight)).

Is the idea of a company pension dead? Opinions, dear reader?

Registered pension plan membership, by sector and type of plan

From this page at Stats Canada

  2012 2013 2012 to 2013 2012 to 2013
number number net change % change
All sectors: Total 6,184,990 6,185,159 169 0.0
Males 3,092,479 3,108,762 16,283 0.5
Females 3,092,511 3,076,397 -16,114 -0.5
Defined benefit plans 4,422,838 4,401,970 -20,868 -0.5
Males 2,053,060 2,044,367 -8,693 -0.4
Females 2,369,778 2,357,603 -12,175 -0.5
Defined contribution plans 1,030,319 1,036,747 6,428 0.6
Males 616,941 625,165 8,224 1.3
Females 413,378 411,582 -1,796 -0.4
Other plans1 731,833 746,442 14,609 2.0
Males 422,478 439,230 16,752 4.0
Females 309,355 307,212 -2,143 -0.7
Public sector 3,179,312 3,184,276 4,964 0.2
Males 1,183,046 1,185,486 2,440 0.2
Females 1,996,266 1,998,790 2,524 0.1
Defined benefit plans 2,995,771 3,002,068 6,297 0.2
Males 1,104,591 1,107,382 2,791 0.3
Females 1,891,180 1,894,686 3,506 0.2
Defined contribution plans 146,290 143,034 -3,256 -2.2
Males 60,749 59,493 -1,256 -2.1
Females 85,541 83,541 -2,000 -2.3
Other plans1 37,251 39,174 1,923 5.2
Males 17,706 18,611 905 5.1
Females 19,545 20,563 1,018 5.2
Private sector 3,005,678 3,000,883 -4,795 -0.2
Males 1,909,433 1,923,276 13,843 0.7
Females 1,096,245 1,077,607 -18,638 -1.7
Defined benefit plans 1,427,067 1,399,902 -27,165 -1.9
Males 948,469 936,985 -11,484 -1.2
Females 478,598 462,917 -15,681 -3.3
Defined contribution plans 884,029 893,713 9,684 1.1
Males 556,192 565,672 9,480 1.7
Females 327,837 328,041 204 0.1
Other plans1 694,582 707,268 12,686 1.8
Males 404,772 420,619 15,847 3.9
Females 289,810 286,649 -3,161 -1.1

Source(s):

CANSIM table 280-0016.

 

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Diving Loonie

The Dive of the Loonie in January

Welcome back the Family Allowance, as the Tories change the UCCB to become a taxable benefit, and we return to the happy world of the Family Allowance cheque (which at the end of the program was given and then clawed back if you made enough money). Interesting that the new UCCB pays out now, but a lot of folks who don’t realize it is a taxable income source, won’t figure it out until after the election? I know, the Liberals & NDP (and me) will be pointing that out long before the election.

Now there is talk of a real deficit this year (not a big one, but no balanced budget to go into the election with either). What with all the talk of recession (check out the CBC’s panel at the end of this and their views on this) and it looks like the economy may be a liability for the Tories, instead of a rallying point for voters.

Thanks to the drop in Interest rate drops last week, the Canadian Dollar is at an 11 year low, and doesn’t really show any sign of dropping either (so if you were planning a fun trip to the USA, it is going to cost you some more). For our American friends, come on up, everything is now much cheaper than it was last year.

Bell is now being forced to share their high-speed internet home connections? I applaud the CRTC for helping make sure there is competition for home high-speed internet access.


My Writings for Week Ending July 24th

Glad to see I am living in “sin city” in terms of Ashley Madison subscriptions :

Kobo Canada


I am still on this fine list from LSM Insurance:


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