Canadian Personal Finance Blog

Archive for October, 2008

This week in the finance blogs we not only got to talk more about the Great Financial Apocalypse of ‘08 we also got to write about a bunch of other interesting financial stuff.

Ghosts, ghouls and Witches are about in the economy this Halowe’en, and what is in store for our retirement funds now? Who knows? Pirates maybe? Some of the mutual fund and financial folk out there certainly act like the Privateers of old, all they need is the Jolly Roger flying over their offices.

Shiver Me Timbers and Hand over your Mutual Funds!

Random Thoughts for A Halowe’en Pirate Style

• All About Nortel is wondering where all the media coverage is for the denouement of Nortel? I have no idea, maybe complete disinterest says loudly that most Canadians, just don’t care any more about this former High Tech darling. Make them walk the plank!
• Michael James on Money came up with his own Mutual Fund Disclosure rules, to help investors have better clarity of where their money goes, I suspect they will not be adopted in the near future. Shiver me timbers!
• Preet at Where Does All My Go published a list of famous (infamous?) investing quotes. I always enjoy, “Buy low, sell high, it’s that simple”, hoist up the Jolly Roger!!!
• Canadian Tax Resource asks one of my favorite questions during these troubled times, “Should I Invest or Pay Off Personal Debt?“.  Neither a borrower nor a lender be! (wait a minute that’s Shakespeare not Piratey).
• The Canadian Capitalist asked, is Thrift Making a Comeback? I don’t think it was ever out of style to keep your money in your pocket, but maybe I am just an Old Salty Dog.
• One Caveman’s Financial journey laments I could Be Rich If I didn’t Have This Debt , it’s kind of like me saying I’d be in great shape if I didn’t have this spare tire around my waste. Remember, Debt Men tell no tales!! (what a great pun).
• Alphablogs mentioned my Twenty Years in One Line post in their Canada 9-5 in October post. 
• Money Smart Life has 5 Tips For Reducing Your Moving Expenses, which frankly those of us who are over 40 will ignore. Rather swallow a gallon of grog before that!

Than the day I bought it about nine years ago, which is not a bad investment. I base this all on the wacky assessment notice that I got from MPAC . I don’t actually believe the evaluation as a real value that I would get if I sold my house (without taking into consideration all of the associated costs with selling a house), however it is an interesting number to start with. 

The actual evaluation will not be implemented right away, it will be gradually raised until 2012 when this value will be in place, which is more interesting, since if the housing market in Ottawa remains robust, my house may be worth even more by then? Maybe not, but it is something else to consider in this wacky equation.

Does this mean I will be paying more property taxes? Given that my evaluation has gone up about 11% from the evaluation I had in 2005, I think my property taxes will not go up that much in reference to this evaluation, however, my guess is other charges from the City of Ottawa will increase my property taxes by a fair amount this coming year. My first property tax bill arrives some time in January.

Percentage of Home Ownership

If I am to assume that this evaluation is relatively close to what the market will pay for my house, it does change how much (as a percentage) of my house that I own. Figuring out how much I still owe on my property, I actually own about 60% of my house currently, which is a reassuring feeling, however, it’s not like I can jettison 40% of the house and thus be out of debt. 

The other problem is, all other houses around me are appreciating in value as well, so the value of my house as an investment is not that great, in that it is unlikely I will move out of it and into a much cheaper house in the near future.

Gas Below 90 cents a Liter

Speaking of wacky, in Ottawa gas dropped below 90 cents a liter for a little while, which is very interesting. The Canadian Dollar has swing like a pendulum, but now with lower gas prices, suddenly traveling becomes much cheaper than it was going to be six months ago. Will gas prices stay down? Don’t know, but it’s nice to see for now, as it makes running my cars (and snow blower) much cheaper right now.

Stocks Still Dropping

The world continues to be jittery about stocks and they continue to drop in value for now. Rate cuts continue in most countries trying to stimulate spending, but a lot of folks are just worried and are going to keep their money in their wallets for now, until they are sure their jobs are safe.

More Job Cuts

Rumor has it that my former employer will soon be adding to the employment pool, by laying off another 18% of their work force (I have heard, this is unsubstantiated rumor), which will make looking for jobs in Ottawa that much harder. Not all the job losses will be in Ottawa, but their continues to be a steady flow out.

Yes the forecast “weather bomb” has appeared and dumped a bunch of snow on Ottawa, thus causing all drivers to lose their brains, forget how to drive in snow and the added excitement that even those who own snow tires most likely do not have them on their cars yet, so today will be a day for accidents and arriving very late at work, if at all (thus causing significant economic hardship for a lot of folks (ok, not really but I needed to connect it back to Finance somehow)).

This kind of weather excitement will cause the CAA to take hours to respond, due to their towing service being overtaxed pulling folks out of ditches, cause the police to answer hundreds of calls about accidents and will have Hydro crews out restoring power to lots of folks, so maybe it would be a good day to be Calm, and pleasant with everyone? Just an idea folks, we are all in it together!

It Snowed In Ottawa

Caution for Ontario Drivers

Put on your snow tires if you live around Ottawa is the first caution, because we really DO need snow tires up here (I don’t think I can convince folks from Toronto that, and if you live in Windsor or Niagara, yes, you can live with all seasons, I guess).

For those of us who can drive across a bridge to Quebec, here is an interesting quandary: Quebec has mandatory snow tire laws, are they going to enforce those laws for out of province vehicles? I would guess they might not, but you never know.

Markets Rebound

But is it a rebound or a respite? Very good question, we shall see,  I have gone back in a little with some index fund purchases, but I am still not sold that this is the bottom, as I mentioned yesterday, I’ll tell you in six months whether this is the stock market bottom. The run at the end of the trading day yesterday was qutie astonishing, but we have seen these kind of runs as sell offs as well.

Frank Folds

For those in Ottawa you will be saddened (or happy) that Frank magazine is shutting down. Frank was a satirical paper that had a lot of “insider” gossip from Parliament hill and was funny only when it went way off the normal path and made outrageous statements, that no normal human being would think was “real news”, however politicians always thought it was, and their reactions were priceless.

Many folks in Ottawa have learned that if you drive in Quebec and your “tag” (date of expiration) on your car is the current month, the S.Q. will pull you over and if your registration is expired, they will hit you with a whopping fine (for driving in Quebec with an expired out of province automobile registration).

Cell Phone Usage Ban in Automobiles in Ontario

Since we are talking about cars, the Ontario Provincial government will make it illegal to be talking on your cell phone while driving your car (without a hands free device), but they have also added if you are TEXTing, doing e-mail on a Crackberry type device or a gaming device. I must admit I am guilty of this on occasion ad I welcome this law to stop me from being so stupid, however, for those of you part of the Crackberry cult, put the darn thing down! No e-mail is so important that you must answer it while driving at 100 KM/hr with your children in the back seat!

My regular readers will remember last week I asked, “What is the Bottom in Stocks” and I pointed out we just will not know what the bottom is until six months afterwards, and I was proven right again yesterday, when I (eternal pessimist) thought there was no way things could drop any lower, yet they did. Canadian financial stocks (banks and financial folks) took a hell of a pounding again, and now I am not even sure why, but TD and BMO both took hits again. 

TD’s drop actually had a minuscule basis in fact as their Ameritrade division announced some fairly neutral numbers, but the whole TSX went “Financial Apocalypse” for the last 45 minutes of trading and a great deal of losses were incurred in that sure time frame (stock value losses I mean).

I keep wondering is this the bottom, but as I have said, we will only know in six months time.

Financial Impact on Me

My RRSP’s continue to drop in value (I haven’t looked really, but am glad it is Dividend time since my DRIPs (Dividend Reinvestment Plan) on most of my stocks will be kicking in and I will be buying some very cheap stock with it). I also continue to collect up old investment vehicles into a single set of investment devices, which are now fairly heavy in cash, which is a good thing, now the only question is when and what to buy, and I continue to “waffle” on what that decision might be.

E.I. Not For You

Got a call yesterday from a lady at the Employment Insurance office asking me a bunch of questions about my severance package and how it had been implemented. She was new on her job, so she and I fumbled around a few questions and I think it has been straightened out for now, but this did bring up an interesting point, which is that you MUST apply for E.I. when you are laid off, not when you think you need it. If you don’t apply right away, you may be disallowed your claim for taking too long to fill in the correct documentation.

At the end of the conversation the nice lady mentioned that I will not be eligible to get E.I. for about a year (the length of my severance package in their calculations). This didn’t surprise me, but I know for sure now that someone at the E.I. office has said it to me out loud.

Weather Bomb

Evidently Ottawa will be the victim of a Weather Bomb in the next day or so. Before you start thinking that the folks at Environment Canada have created a Weapon of Mass Destruction that will cause huge storms, that is not what the term means, it is a real Weather Forecaster term to describe a quick and large drop in the Barometric Pressure which is usually part of a severe storm system.

What does this have to do with Personal Finance? Everything!

• With 15-30 centimeters of snow coming Do You Have Your Snow Tires On? I don’t! If you live in Quebec, remember you need to have them on, it is the law now.
• Do you have enough food at home in case it is hard to get out in the next day or so?
• Is your furnace in good working order?
• What if the power goes off, have any wood in for your fireplace?
• Does your snow-blower work? Does it have any gas?

Good question after the past couple of weeks, asking that question might not be the question to ask, the question might be, “How bad is it going to be this week?”, especially on the financial markets. I have no advice or wisdom for you right now, I simply watch and ask questions and simply react to what happens. Maybe it’s best to follow the Lawyer’s credo, “Never ask any question you don’t know the answer to before hand”.

Cash is Still King

On the personal finance side (micro) we (Mrs. C8j and I) continue to live with the credo “cash is king” and continue to keep our credit cards out of our wallets. How long we can keep this up, I don’t know, but for now, it is important not to allow any credit “build up” to occur thus causing financial haemorrhaging, as we have seen in the past.

More cash is appearing from transferring work related savings vehicles into our own RRSP and savings vehicles, so again, we have decisions to make about WHAT to invest in and WHEN to do that investing. For now, I am in a “wait and see” mode, since I still have little confidence in the current economic apocalypse.

Top 100 Employers in Canada?

Given I am still looking for a job, folks send me interesting information, and one I received from my mother. Evidently there is a company that rates the Top 100 Employers In Canada, with details about every company and why they are such good companies to work for. The information is interesting and is mostly on the “macro” level (i.e. benefits and such), and not much about the work environment itself, but still very useful information to have when searching for a job. Strangely my former employer is not mentioned, curious.

I am not that picky right now, I’ll take work, and not worry as much about whether there is subsidized maternity leave (given it doesn’t really matter to me either).