Canadian Personal Finance Blog

Archive for January, 2006

This is an important thing to remember when it comes to Debt Reduction and Financial Planning in general. Don’t get caught up too much in the whole, “What stocks should I invest in..”, or “Is Ameritrade better than Bob’s Discount Brokers?”, remember, Debt goes FIRST. If you are carrying a large Credit Card debt, who gives a crap about whether you pay $29 or $35 per transaction with your online broker? Whatever money you are thinking of investing, PUT IT ON THE DAMN CREDIT CARD DEBT!

Sometimes we lose focus and get caught up in the whirlwind world of financial planning and fun like that (I plead guilty to this offense as well, I am not pointing fingers at anyone, I am speaking from experience), worry about getting out of debt FIRST, then worry about investing.

We’ll talk about real world examples in the coming weeks and months, since my financial plans are not working as I had hoped, so I figure I might have an epiphany if I vent my spleen on the blog. We’ll see.

–C8j

“If you own Nortel, or a mutual fund holding it, don’t bail out now… If you do not own Nortel, then this is the time to start accumulating it.”

- Garth Turner November 27th 2000

So Garth Turner is a respected Canadian Financial person, and he got it OH so wrong, it hurts, so remember that when someone gives you a “sure fire” stock tip. Oh and in case you were wondering what other interesting things Garth has said:

“I am constantly amazed at the assumption people make that they can manage their own finances… most people can’t. They don’t have a clue how to pick stocks.”

- Garth Turner in a 2002 personal investment column regarding those unfortunate enough to have lost on Nortel

Just remember, that anyone can TELL you what to do with your money (including me) but eventually you are the one that has to live with the decisions, so you had better be doing some research of your own!

Of course there is the “legend” of J.P. Morgan:

Legend has it that when the elevator operator in Baruch’s office building started asking him for stock tips in August 1929, the financier knew it was time to get out of the market. He was dead right!

I found these quotes on Rick Mercer’s Blog, which is a great blog, with lots of interesting information (I think).

–C8j

This post was previously posted as: A very Good Quote for a Sunday

Good Quote For a Sunday

OK, before I get inundated, this is a good biblical quote that I think can work for EVERYONE (even atheists, agnostics, Jews, Muslims, Hindu, Buddhist, Shinto or Snake Handler):

No servant can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. —Luke 16:13

So my interpretation of this in the financial sense is that if you make MONEY, or the pursuit of it, or the management of it your Master (as it were), you are not going to enjoy Life (your real master (if not God, for us spiritual folks)).

I have found that in my own life that if I worry too much about money everything gets out of whack (now yes, you should plan about money, but once you have the plan and are executing it, forget about it, will ya?). Money should not be your Master, or raison d’etre, it is a tool to get things and do things, and that should be it. Debt reduction is a goal not a God, and saving is a past time, not a religion.

OK, I’ll put away the soapbox for now, but I liked that quote –C8J

So FMF in the following post put a staggering point out there, Americans have spent over $4.3 Billion dollars (that is with a B) to take their money out of an ATM machine. Un-believe-able!!!

In my world, the trickery is even more evil (this is in Ottawa, Ontario, Canada, if you don’t remember):

1. If I use my “home” banks machine there is no charge to take money out of my account (well, that isn’t completely true, since I have to pay a monthly charge to leave my money in the bank).
2. If “Interac” at a store, there is no charge for that priviledge (however, there are “white” debit machines appearing that WILL charge you $1.50 per transaction, so BEWARE).
3. If I take money out of my bank at work, using the “Co-op” here, it costs me $1.50 which is charged to my account at the end of the month. So I have to remember that if I need money, I need to go to the branch of my bank which is a mile away from my office, to get money out (usually before I get into my office).
4. If I want to take money out at a local Convenience Store, this will cost me $1.50-$3.00 up front which is taken directly from my account, before I get my money, and then $1.50 service charge from my bank.

WTF?!?! Pardon my rude TLA, but this is INSANE folks. This is MY money, yet I have to pay almost $5.00 to take $20.00 out? An entire INDUSTRY has grown out of this, people can buy ATM machines and run them, and make a living off people taking money out of their own banks?

This isn’t money laundering like the “Pay Cheque Advance” places, this is taking money out that you have earned people. YIKES!

How do you escape this?

1. Don’t use money, buy on credit, and be very careful to pay it all back
2. Take out money only at your bank, and make sure there isn’t a limit to the number of ATM withdrawals you have in a month.
3. Buy with “Interac” and if the store has a “White” machine, leave, and say, sorry, I am not buying then.
4. Carry cash!

Folks this kind of death by a thousand paper cuts is why Debt Reduction is so darn hard these days.

Stay alert folks –C8j

For those of you who are regular readers, Kids Allowances was the original post.

Real World Example: Kids Allowances

OK, so back to what this blog is about, real world financial ranting.

For the longest time my wife and I tried to get the kids on an allowance, so that they could learn what money is, how it works and some responsibility, but inevitably, we’d forget for a couple of weeks, try to catch up and eventually just gave up (much to the kids chagrin). Interesting, we were trying to teach the kids responsibility and all it did was show how irresponsible their parents were (now THAT is ironic).

About 6 years ago I was in the TD on one of my yearly visits, getting my bank fees waived for a year, and get them to fix something they had screwed up (I think it was my mortgage that year), when I asked about kids’ bank accounts. My brother sends the girls money every year, and we had got to the point where we didn’t want to just buy them toys with it. The poor woman who’s life I was ruining for the day, said the accounts could be opened then (since the kids had SIN numbers), and the accounts would show up “under” my account on my on line banking.

A day or two later, a light went on in my head. I called the bank on the phone lady (who I now call once a year, because I do most of my banking on line, but couldn’t figure out how to do what I wanted). I asked her to set up weekly transfers from my account to my kids accounts, thus assuring that the money was paid every week (whether I remembered or not).

Well, it has worked, the kids get their weekly allowances AND they actually do things like:

• Buy clothes that they really want
• Have somewhere to put their uncle’s money and can then buy what they want
• Buy presents for their friends birthdays (that one shocked me the first time it happened).

So it seems this experiment has worked, chalk one up for me.