Canadian Personal Finance Blog

Jim Flaherty is poised to announce his new budget and instead of the tradition of the finance minister buying a new set of shoes, instead he had his existing shoes re-soled, which I think is a message to say, “Tighten your belts folks, leaner times are ahead” (at least that would be my spin on it). Interesting that he can make that statement given the government is about to announce a $13Billion surplus, which will mostly be used to pay down the national debt (which I agree with as a tactic for using surplus spending, however, I am not happy with the enormity of the surplus itself).

Some new measures may be brought in but it is unlikely to effect (affect?) my wallet too much. The fact that this is the 3rd budget for Mr. Flaherty for a Minority government is quite the achievement.

Stock Options

I have worked in High Tech all of my career, but I think I am one of the few folks who never, ever had a chance to cash in a large amount of stock options for their company. I just never got options until very late in the game and then they became worthless quickly. I state this as a preface (and as a whine as well).

Yesterday I sat down with a couple of co-workers and this topic came up and I was shocked to have them both admit to me the amount of money they “left on the table” with their options. I am assuming they did make some money on options, but the amounts they both quoted me as potential profits they didn’t act on caused my head to spin (well over a million dollars combined).

Why would you leave that kind of money on the table? Here are some of the reasons I know of:

1. The options had not fully vested. In this instance I don’t view that as lost money, since you were unable to do anything about this, and you shouldn’t beat yourself up about this “lost potential money”.
2. I thought the stock would recover. I guess we can see that one, was not a good strategy, in hind sight we can see you should have taken the money and run.
3. I was waiting for the Stock Options Tax changes. That one had me scratching my head, but I guess it’s a valid reason.
4. I bought the stock with my options and then held it to live on dividends and capital gains. That one is the most lethal mistake that I have heard. These people really did lose money on this, because they spent the money on the options and then got nothing for that money. The previous three “mistakes” didn’t lose you real money, it just lost you potential money, this one lost real money.
5. My options were never worth more than a $1000 ever . That is my excuse, I feel like the Eunuch at the orgy sometimes, never got anything out of this whole thing, oh well.

At the end of it all, lost potential money is much like Love Lost, not much you can do about it, so you might as well forget about it.

Any other High Tech Stock Option stories out there?

Jim Flaherty fresh from his success with Opera Lyra, on Tuesday will unveil the Tories Budget for 2008, whoo hoo! Most Canadians will be glued to their TV, except it will be to watch the NHL trade deadline shows (will Matts Sundin leave Toronto? Will the Sens pick up Marian Hossa?).

Will the Tories pull out the big guns and introduce Home Income splitting? Will they play it safe and simply stay the status quo and assume Canadians will buy the “we can’t have any more tax cuts, because our surpluses are not big enough” argument? Maybe he can trade an income tax cut and two GST drops to be named later for Peter Forsberg? Who knows?

The best hint I think will be any kind of “poison pill” for the Liberals that will force them into voting the budget down, so that we have, ELECTION 2008, this time, we might decide! or something like that.  The Tories have been spoiling for some kind of issue they can ride into the election, and maybe they have found a rotted plank in the Liberals platform that they can attack with this budget.

R-r-r-roll Up The Rim Returns

For many of us part of our retirement plans, is the Tim Horton’s roll up the rim to win contest. Last year was a fruitful year for me with plenty of winners and such, but who knows what this year may hold. Given I am not buying as much Timmy’s coffee, I may not be as victorious as in previous years, but maybe all it takes is one coffee to win? Remember the old Lottery ticket credo, “There is only 1 winning ticket”.

To quote Chance the Gardner from Being There, and I really do enjoy watching stocks on a ticker (I use the Yahoo Instant Messenger version) but I really am not sure why. I preach that you should stay the course and not make rash decisions, so the worst thing I can do is to sit in my office and every 10 minutes glance over to see how my stocks are doing. For a while I turned it off (and I must admit I did turn it off from 2001 to 2003, because that was just too much to watch). I also remember the heady days of the late 90’s watching stocks jump $2 and $3 a day and having no idea why (and in hindsight, neither did anyone else).

I think it is the part of me that enjoys watching sporting events like Baseball. It is so long and so boring, but occasionally something amazing happens and you don’t want to miss it. Maybe I am hoping to turn and see that suddenly I can retire because all my stocks have doubled (ok, quadrupled at least), but it’s an interesting behavior that I really don’t understand.

Do you stock watch? Why?

Count Floyd Says No Surprises

“AAaaaa-ooooohhhh kids that is some scarey stuff to hear…”, Count Floyd aka Joe Jim Flaherty the Federal finance minister said. Evidently he has reformed and will not be giving us any nice tax breaks or cut spending in the upcoming budget, reports the CBC. An $11.6 Billion surplus is expected for the past year, which he could put on the National Debt (and drive it below $500 Billion) or maybe he’ll put it in the Government’s secret vault and save it for a rainy day?

Keep your receipts

Remember all that spending you did before Christmas? Hope you kept your receipts! Why you may ask? Let’s run down a few of the important points about keeping your receipts (and maybe scanning them into your computer for archiving?):

• You have a record of where you shopped, and this is important because what happens if another charge appears from that same store next month? If you don’t have your receipt, you might think, oh they are just billing slowly and pay it again. This happened to me more than once.
• So you know exactly how much you spent, and you can figure out a plan now of how to pay off the gross national debt of Zimbabwe off (that is my pet name for my Christmas debt hangover).
• You know where you didn’t shop as well. You end up with a strange charge from somewhere you know you didn’t shop, you can have that charge reversed.

Remember this doesn’t mean you have to hoard all those little pieces of paper, just make sure you keep them for a little while, just to be safe.

Random Thoughts for a Friday

• Jim Flaherty is now saying that big income tax cuts are now many years away and the federal government cannot do any more large cuts. His statement is that he thinks there will not be a huge surplus for 2008 and thus no room to cut taxes any more. Gee thanks Jim, hope Santa left you a nice lump of coal in your stocking, and maybe Rudolph left you a plum pudding on your pillow.
• Phased Retirement? Remember Big Caj, we value you and don’t want you to retire, because we don’t trust our younger employees? If I can retire, I will retire, no phases, Hast La Vista and farewell!
• Some nasty happenings in Pakistan I think could forebode some very high gas prices soon. Instability in that whole region is going to really zap us in the pocket books. It will also mean a continued strong Canadian Dollar as well, due to Canada’s oil reserves.