Canadian Personal Finance Blog

This post was originally done on March 2006 as Advice: Listen to a Comedian Sometimes.

Advice: Listen to a Comedian sometimes

I don’t remember the comedian, but I remember someone saying (maybe it was a financial advisor, I mix them up with comedians a lot ), that said, you would do better to buy stock in Banks than it would to put your money in them. The following results seems to suggest LOUDLY that this is VERY true. I heard one financial commentator saying that this profit was on the back of user fees, which again screams loudly, to not lose your money to the banks, find a NO-FEE banking somewhere!!!!

One of the few investments I do “crow” about (which is a bad thing to show pride during Lent), was buying shares of TD and BMO with moneys I got from my “high tech” employer. Those shares have paid a lot of money in dividends AND have increased A LOT as well. Is it still good to invest in banks? I don’t know, check with other more informed folks, I am just saying it worked for me 5 years ago.

Here is my question, Why do banks get to gouge us like this? The answer is, because we let them!

This posting was originally done March 2006, but I really like it, and it is one of those stories that makes me smile because I think of my Dad telling this parable to me. What does it really mean? What do you think?

Best Financial Advice Ever Received

My parents have been very helpful in my life, both financially, but also with very wise advice, and with that in mind, I’d like to share you a story my father told me (kind of a parable):

There once was a court jester who enjoyed a good joke, usually at the expense of the King, which got the Jester into deep trouble. One day the Jester was having a particularly “devilish” day and insulted the Queen in a large public forum. The King was OUTRAGED by this and ordered the Jester executed for his insolence and the guards dragged the Jester off to the dungeons.

Hours passed and the Jester (who was a quick thinking man) thought how can I get myself out of this mess? Finally the door to his dungeon opened and the guards dragged him back to the King. The King said, “I have enjoyed your buffooneries over the years, so I will give you one wish before I put you to death for your crimes.”.

The Jester thought what could he wish? Then he came up with a plan, he knew that the King adored his horses so he came up with the following, “Sire, all I ask is that you give me a year’s reprieve, and during that time, I will teach your horses to Sing! This will make you the envy of all other monarchs. If at the end of this year I am unable to get your horses to Sing you can execute me in any gruesome fashion you wish.”. The King looked perplexed and then confused, but finally he thought that he had nothing to lose, he would either be the envy of Europe or the Jester would be executed, either way was fine by him.

The guards then took the Jester towards the Royal stable, when one of the Guards asked the Jester, “Why would you make such an obviously impossible deal, surely you know no one can get a horse to sing?”

The Jester smiled and whispered to the guard, “Many things can transpire in a year my friend, I could die and thus I have cheated the executioner… the King could die and I might get a reprieve… or the horses could sing!”

 

My Dad told me this story after we discussed payments schemes for money he was loaning me to buy my first house. What was he telling me? I’ll leave that to you gentle reader, as usual with a story from my Dad, you get from it, what you think, not necessarily what he thinks you should.

Other Financial Advice Posts

• A parable about advice… not just financial
• Advice: Listen to a Comedian
• Investing: And he’s an EXPERT!

In my life I have had some wonderful friends and acquaintances and I count my blessings for every one that I have met (and will still meet), the following “Best of” posting is from May 2005 and it is about a piece of advice that I gave a dear friend that completely backfired, and I regret to this day (I also regret that this friend is no longer with us either).

A parable about advice (not just financial)

A few years ago I car pooled with a wonderful guy we’ll call Jack for this story.

One day after my wife and I came back from a great vacation in Florida, I told Jack about how to get free tickets to Paramount Studios in Orlando, by attending a “Time Share Condominium Sales Pitch” (my father-in-law told me about it), I told Jack that it was a hoot and also kind of sad seeing the “poor souls” (my opinion) who ended up buying these things. The Sales guy was relentless, he was going to take Canadian money at par, he was going to let us pay with our credit cards, we could stay there right now if we wanted, etc., but we stuck to our guns, got our free tickets and left, laughing as we walked out.

Jack thought it sounded like a good idea because he and his wife were going on vacation to Florida in a couple of weeks.

Fast forward to the day after Jack and his wife came back from vacation. The conversation was mostly about how much fun Jack and his wife had while in Orlando, so then I said, “How about that Time Share sales pitch, what kind of a shmuck would buy those things?”, and after a long pause Jack said, “Well, me, I bought one…”, I think my jaw dropped to the floor, and I might have said two words for the rest of the trip to the office. I never mentioned time shares ever again.

Moral to this parable? Advice is a dangerous thing to hand out, and you had better be ready to take the heat when the advice goes wrong.

This is why I try to always be careful when giving out advice, because I am fully cognizant of the damage ANY advice can do. Most time shares I have seen are not worth the money outlay (my opinion), please don’t construe this posting as me endorsing them in any way shape or form.

I made this posting a while back, but I think it’s worth remembering:

The Safety Deposit Box, Our Friend

There are very few things in a bank I view as necessary, but one thing I do view as really important is my Safety Deposit Box. In my Safety Deposit box I keep bonds, an old stock certificate, and my wills. Why couldn’t I just keep those things at home? I don’t want to do that thanks. The advantages of a Safety Deposit box are many to me (my opinions follow):

• I can write off the cost of my box rental as a carrying charge (in Canada you can do this), that’s good. I pay about $30 for the box, before my tax kickback on the write off.
• This is OFF-SITE storage from my house. I should really put copies of my insurance policies in there as well, that way if someone breaks into my house or my house burns down (God forbid), I have a copy SAFE somewhere else. Might be good to put a home inventory in there too
• I love writing in this blog, because a lot of times I think of things while writing, I wouldn’t have!
• The bank is more secure than my house ever will be. Safety of this information is really important, and someone else worrying about it, is one less thing for me to worry about.
• Who is going to break into a bank and then find my safety deposit box, and then steal what is in it? Maybe someone reading my blog? Hope not :-).

These reasons are why I have a safety deposit box, and not a home strong box, or wall-safe to protect my important papers. No matter HOW you decide to protect your important papers and information, DO IT! Use a Safety deposit box, a strong box, a wall-safe, but keep those papers safe! It’s important. It’s all part of the Financial Plan.

Carnivals this Week

So far:

• Money, Matter and More Musings is hosting the Carnival of Personal Finance (Fun Money Facts Edition) has my posting about How Do You Retire with Kids at Home?