Canadian Personal Finance Blog

Busy day, so I went back into my archives to find my Tim Horton’s Savings Plan posting from a little while back (a new classic):

Think if you bought Tim Horton’s stock you are doing ok (no I am not saying go out and buy their stock, figure that one out for yourself), but I am saying look at that “Double Double” you have sitting next to you. Ever thought how much those things cost you? I have asked you this question before, so you should know the answer.

Let’s have some fun Arithmetic, shall we?

1. Assume you drink 3 “Double Doubles” a day for 5 days (what you do on the weekend is your trouble not mine). How much is that costing you a week then?3 * $1.39 * 5 = $21.00 per week
2. You work how many weeks? I’ll say 45 weeks to make it easier to calculate for me. So that means you are spending about:45 weeks * $21 / week = $945 per year on coffee
3. Over say 10 working years assuming you took that money made a lump sum payment every year into an investment vehicle that paid a modest 5% (remember if you put it in an RRSP you’d get back tax money too).We have:
   

   Year	Value
   1	$945.00
   2	$1,937.25
   3	$2,979.11
   4	$4,073.07
   5	$5,221.72
   6	$6,427.81
   7	$7,694.20
   8	$9,023.91
   9	$10,420.10
   10	$11,886.11

So after 10 years you’d have almost $12,000 in your pocket (less taxes on the growth, unless you do this inside of an RRSP).

Does that coffee seem so cheap now? Hey, you folks drinking at Starbucks and paying twice as much for your coffee, want me to do the calculations on THAT for you?

Food for thought for a Monday.

Leasing Cars a Thing of the Past?

I have commented previously about why I do not lease cars, and it is mostly because it becomes cyclic and you never have your debt paid off, because you end up getting a new leased car.

It seems our firends and General Motors agree with my view on this. This is not actually true, but as of August 1, you will not be able to lease a GM car from GM any more (I am sure there will be leasing companies out there somewhere, but not directly from GM), instead GM will offer you a 6 year ZERO-Interest loan to take their car home with you.

Why? Resale value of Vans, SUVs (or is that SUKs?), and other monster gas guzzlers is such that leasing has actually become a money losing concept for GM (or someone has figured out it soon will be).  Interesting to see if other large North American car makers will follow suit or not, but the only problem with a GM Lease OR zero-interest loan is, that at the end of it, you still have a GM vehicle (speaking as the owner of a Montana VAN).

Evidently Chrysler in the U.S. is also following suit and will be withdrawing from the Leasing business as well.

Right now, I have to pay off my used Toyota Carolla, but that is about it. I drive cars until they are DEAD and then wait 6 more months after that, so leasing never made a lot of sense to me (I used to drive a 12 year old ‘72 Dodge Dart with black vinyl interior, so no, my car is not an extension of me (or maybe it is)). I am not sad to see leasing, go the way of the “Great Awk”.

Is anyone upset that they won’t be able to lease directly from the manufacturer any more?

Those were the happy thoughts told to me one day at Church. The minister giving the sermon, worked with homeless people and such, so his view might be a little stunted, but that was the point of his statement, “We are all three pay cheques away from living on the streets”.

Is this really the case? Well that all depends on the debt burden that you carry.  If you suddenly had no means of income, but you didn’t have any debt to pay off, you’d simply need money to pay your day to day expenses that may be manageable or controllable. If you are carrying a large credit card debt load, and have minimum payments to make, then your issues are far more complicated and you must find ways to pay spiraling debt as well.

Am I three pay cheques from living on the streets? I don’t think so, I have a fair amount in RRSPs and such, and I also have some savings, but I also have a debt load that does worry me, and given the renewed vigour I have been given from reading good books like: Smoke and Mirrors , I think that is my goal is to kill my debt load while I can.

BCE & Nortel Both Cutting

The news is full of job cuts at BCE as they head towards privatization, and there was the renewed cutting announced by Nortel at the start of the year as well, which may mean some dark times ahead in the High Tech World as well. Hope those folks aren’t three pay cheques away from the streets.

Telus and BCE can both enjoy a new class action suit against them as well for their new texting surcharges. That won’t help BCE, that’s for sure.