Canadian Personal Finance Blog

This week I had some very good feedback and discourse with my readers about the high price of post secondary education and how it pertains to Family Finances and Personal Finance. This topic was suggested by my wife and I didn’t think it would amount to much, but to me, I think it really opened my eyes to the fact that most parents want the best for their kids, and most parents want to help their kids get a post secondary education of some kind. The limiting factors in their ability or inclination to help are varied, but I did not hear from a single person who said they would not help their kids, even though they had the financial means to do so, and I think I was glad to see that.

• Student Debt starts with an introduction of the problem or the discussion point as I saw it.
• Student Debt Part 2 went further into the Pros and Cons of the parent fully paying their child’s way in a post secondary education.
• Student Debt Epilogue is the entry I like the most out of this essay, because it reflects some thought provoking and interesting comments from my readers, and for that I thank you.
• Surprisingly our friend over at Canadian Capitalist did a piece on Still Sour on Group RESPs where he continues his discussion on the topic of Group RESPs. I added my own comment to this topic, so go over and see my comments on this important area of Post Secondary Education Financing.
• Michael James did an unscientific, but effective study of the Interest Rates you can get for your Unsecured Line of Credit. Surprisingly, you are on your own on what kind of deal you can get!
• Ellen Roseman wrote about the Direct Energy home furnace “warranty” program and other horror stories from the world of energy and heating. Spine chilling stuff there.
• Larry MacDonald wrote about a Job surge in the U.S. last month, which is never a bad thing to read about.
• Free Money Finance had a great article on how much you can save throwing stuff out instead of storing it (something I am going to try to live to this year).
• My article on Found Money The Prisoner’s Dilemma was showcased in the Carnival of Financial Planning.

Next week I am thinking of looking closer at my family’s finances and maybe wondering out loud why we are spending money on some of the things we do. We’ll see.

Have a great weekend.

Hope you are enjoying the day off, and have been to church too!

Our amigo over at the Dividend Guy has challenged financial bloggers to post their top investing mistakes, but my regular readers will remember, I have already bared my soul in this area, however, I report one of my most frank postings My Top 5 Investing Mistakes , for your reading pleasure:

Top 5 Investing Regrets In My Life

As part of a writing concept put forward over at Problogger I am making this posting about my Top 5 Investing Regrets over my lifetime. Thanks to Mrs. C8j for proof reading and suggesting content changes as well.

I offer this as a list for folks to learn from, and maybe not make the same mistakes that I have made.

5. Bought Whole Life Insurance

When I was just married and was quite naive when it came to investing, a gentleman from a very large insurance company sold me on the value of whole life insurance as an investment tool and as a way to protect my wife in case something goes wrong. Lots of flashy graphs showing how it becomes self-sustaining, and all of that stuff.

This was a mistake on my part, if I had bought term insurance at the time (I was in my 20’s) I should have paid somewhere around $10-15 per month but I was paying upwards of $50 to $75 a month (I don’t remember the exact amount it was way too much).

I thought this was investing, but I finally met someone who set me on the straight and narrow, and I cancelled the policy, but if I had invested the $40 or so extra I paid a month in an RRSP back then, I’d be much better off now. The good part of it is that I realized my mistake and corrected it, or I’d be looking at this “investment” wondering why I did this. Mistakes happen, but that is why pencils have erasers.

4. Not Understanding the Tools Available

Even after taking two business courses at University I forgot the tools that were available to me on my on line trading site. I monitored things closely but I did not realize the power of the tools that my on line site gave me:

• Bottom limit rules, which I could set up, to automatically sell my investment if they dropped below a certain price. This can limit losses and save you a basket of money.
• Buy orders to pick up a stock I am looking at, at the price that I wanted to buy it. I just bought with a market order, and it went in as soon as I pressed the “OK” button. If I’d looked at the stock and liked the stock, but thought it was overpriced, I could simply put in an order to buy when if it dropped to the price I wanted to purchase it at.

These two simple tools would have saved me a lot of money, if I’d thought a little bit about the tools that were available. Remember, a good tradesman uses their entire toolbox (not just the hammer).

3. Invested with my Heart and not my Brain

This comes back in my #1 mistake, but it’s important to have a Plan for your investments and have a set of rules to work by (and use the tools available to you). If you set down a clear set of rules about when you buy , and when you sell, then you are not relying on your instincts, and your decisions are easily understood.

It’s not hard to make up some simple rules about when you think you should buy a stock, and as soon as you do that rules for when you are going to sell it (because you eventually are going to do that). Some good rules for when to sell:

• Stock drops below a target price after a certain date (so you aren’t constantly buying and selling).
• Stock has not grown by more than 5% in the past year
• Dividend from the stock has either disappeared or has dropped below your goals for the stock
• Stock is now worth twice as much as when you bought it, and you want to remove your original investment, to protect your money.

These are some pretty simple rules, and you should think of your own, but they are something to think about.

2. Did not start an RRSP or Retirement Fund soon enough

This is a common mistake. Saving for my retirement, using sound investment rules, would have me much farther ahead in my life, I think. Set down a set of concrete goals for investing a certain amount of money every year, when you are much younger and you will not be playing the “catch up” game later in your life (as I and others are doing right now). Did I have the money back then? Well, maybe not, but even a little bit of money put away in your past makes your future that much better (it’s kind of like how to get better at playing Golf, go back in time and start playing earlier).

Time can be your best friend when it comes to investing, especially if your investments are growing over that time.

1. Did not sell out of High Tech in 2000

I have talked about this blunder before, and being a High Tech guy in the industry, I knew this was a bubble, yet, I “drank the Kool-aid” as well. I fell for the stories being told, and I rode that bomb all the way down to the ground. If I had set rules for investing, I would have at least bailed out and only got singed or lightly burnt, instead of completely incinerated the way my investments did. The funny thing is that my employers stock is the one I got burnt on the worst, and you would have thought I would have known better, but, then again in hindsight I can see what I should have done, but at the moment, it seemed like a good idea?

Take your losses, but also take your profits and move forward with them, don’t just leave your money lieing around, make it work for you.

I hope this helps you, dear reader, in your investing plans. Yet another fine, “do as I say, and not as I do” posting by the Big Cajun Man.

Carnivals

The Infamous Sing Horse parable was picked up by Money Hacks for the Carnival of Kids and Money March 21st edition.

In Ottawa we have a very flamboyant Mayor who came in to power with the statement that he was not going to raise taxes. This statement (I won’t call it a promise) seems to have disappeared and the latest levy he is talking about is a $50.00 surcharge per tax payer and business due to the high amount of snow in Ottawa this year (the snow clearing budget is over budget at least $23 M so far).

Last year we didn’t have a lot of snow, and this same fund ran a surplus, but I never saw a nickel back in my taxes. In fact this fund has run surpluses for the past N years, yet whenever that happened, no money came back to me directly, but now that Mother Nature has stepped in, I must now find more money to pay for bad planning? If I make the bad plan, I am the one that has to live with it, and I must live with the consequences (yes I still complain), but now I must fork out more money, due to there being no emergency fund for excessive snow? Larry, drop by my house and see if you can convince me I should pay this tax, because I don’t think you’ll get me on side with this one.

Easter Charity

I was very impressed to see John Chow campaigning for donations to a soup kitchen in the Vancouver area. John actually matched all donations, and managed to raise over $7,000 for that charity, and I applaud him for that.

For local Ottawa readers, the Shepherds of Good Hope is a mission that I support when I can, given I used to work up the road from them, and I have seen first hand the good works that they do. Remember Easter is a time of renewal and a time of giving.

Scary Statement for the Day

After the U.S. Fed lowered yet another of their key rates by 3/4% one analyst was actually heard to say, “I wouldn’t be surprised to see a rate of 0%…”, I almost fell out of my chair when I heard that one. I think this constant dropping of interest rate may help in the short run, but it is not resolving the main issues which is massive DEBT problems in North America. People are living outside of their financial capabilities, and it is eventually going to cause something very bad to happen.

Carnivals This Week

This week my posting The Seduction of Spending was mentioned in The Carnival of Everything Financial #15 hosted by Everything Financial .