Canadian Personal Finance Blog

After watching athletes work hard to reach their goals, I feel invigorated to attempt new financial goals of my own (OK, that’s pretty lame, but I couldn’t figure out any other way to spin the Olympics into a post over the past two weeks).

Glad to see the Canadian Athletes compete and do the Canadian thing and not win too much and be boastful, we are a very polite nation.

Coming Financial Decisions

The coming week is an important one for me financially because I must make key decisions on how much, and when my severance package is to be executed, and what to do about my pension (whether to leave it in my company’s badly underfunded pension (last time I heard it was funded up to about 87%)) or take the money and run, with some severe tax implications)).

I am meeting with a Financial Planner today (who is also a Chartered Accountant), to hear his ideas on how to make my severance package run as long as it can, and to maximize it’s financial impact for me. Ideally, when I find a job soon, I can simply use it as a debt destruction vehicle, but I must plan in case I have issues finding a job, as well (remember Hope for the Best, Plan for the Worst).

Mostly I am meeting with this gentleman, because it is free, as his services are being paid for (evidently he charges $175 an hour normally) by the Right Management team that I am dealing with. I’ll listen to anyone for free, doesn’t mean I will necessarily follow their advice, but I can listen easily for free.

Interesting questions that may come up:

• Is it better to pay down debt quickly thus having less to deal with, or plan to simply service debt so that my liquidity stays sound?
• Is it worth working at Home Depot in my spare time right now? The easy answer there is NO, not this year, because whatever I earn, I lose about 1/2 of, and we should be able to budget well enough to last that long.
• Should I cash out of my company’s pension plan? Do I think they will exist in twenty years, and will the pension fund ever get back to 100% funding is the real question.

What other questions maybe need to be asked? I am open to suggestions here folks, any good questions, please pass on in the comments section.

Should be an interesting visit.

Sorry for the aliteration, it’s the Sports Broadcaster inside me wanting to get out.

A few weeks back I told the story of The Worst Financial Advice I ever Gave, where I told you about inadvertantly sending a friend off to buy a timeshare condominium (honestly that was not my plan), and after getting some good feedback, I challenged some of my financial bloggers to do the same and the responses were quite interesting.

Carnival of Catastrophic Financial Advice #1

The responses I got were many and varied, but let’s wander through them:

• Larry MacDonald wrote in to say:
  I’ve been holding off giving you a story hoping a incident as humurous (sic) as yours would surface in my memory but so far drawing a blank. All I can think of to this point is visiting my dentist while I was writing my book on Nortel Networks (in early 2000 just as Nortel stock was at its peak),and having read many bullish articles and reports as part of my research, recommend he load up on Nortel. As the crash unfolded and the stock languished in following years, my dental bills seemed to get bigger and bigger every year.
  
• The Canadian Capitalist added in:
  When I first started investing, I read a lot of books (regrettably none from the recommended list) but for some reason, I was most attracted by the Motley Fool books. I mean, if guys wearing joker hats are making a killing on Iomega and writing books about how easy pickings can be had in the stock market, really how hard can this investing thing be?  …. Canadian Capitalist Worst Financial Advice Ever
• The Canadian Money review came up with a group of points where he felt he was not giving the best advice. One great point was: 
  Giving stock advice taken from a newsletter to friends and family without proper disclaimer that this was still risky!…  Canadian Money Review Worst Financial Advice Ever
  
• Michael James on Money commented that he doesn’t give bad advice, but he has had his advice interpreted incorrectly. He did comment:
  The truth is that while I have opinions on just about every financial subject, I don’t advise people directly very often. For example, although I often say that trading stock options is a very bad idea for most people, it could be right for a particular person … Michael James Worst Financial Advice Ever
  
• Loonies and Sense also wrote of their experiences, including this excerpt:
  “Lots of people are in debt; it’s normal.” - The sad thing about this one is that it’s not untrue. Still, justifying my situation to myself in this way really showed a lack of maturity and ambition. Now that I’ve set a goal to get out of debt, I feel like I’m expecting more of myself, and that encourages me to rise to the task.  … Loonies and Sense Worst Financial Advice Ever
  
• Nerd Money had an experience where his good advice wasn’t followed:
  I usually try to give information to anyone who asks a question. To the best of my ability I’ll explain what I know and then send them away telling them that they need to understand for themselves.
  … Nerd Money Worst Financial Advice Ever
• Monty Loree, sent the following: I don’t generally give out financial advice unless I’m pretty sure about it. I have given information that I knew that was right, however wasn’t backed up by the industry. One that comes to mind is when I talk about not having to deal with collection agencies.
  The truth is: There is no law that says you have to deal with a collection agency.  You have to deal with them by contractual agreement only.The reality is: it seems that the collection industry will just keep calling regardless of if they have contracts in place or not.  Collection agencies don’t receive any heat from the regulators as this is a creditor friendly legal system.On the one side, I wish I never mentioned this to people as it gives them false hope.
  On the other side, it’s the truth and I wish collection agencies would heed it.As I was developing my credit repair business, there were a lot of truths that came out.  Many of them were not accepted as the industry had been operating for so long outside of the guidelines that I uncovered.  Regulators are slow to move again as it’s a creditor friendly legal system.  The legal systems favor creditors over debtors.

Have a great long weekend for my readers in Ontario.

No Food During Frosh Week?

So as my daughter’s first terms at University come closer we learn more and more about what we will and will not be paying for during her term(s) there. This week we found out that during Freshman week (or FROSH week in my day), she can move into her dorm room, but the cafeteria will not be serving food until the first day of classes. We now must sleuth out what exactly that might mean. Our guess is there is some food somewhere, but we are not sure how that is going to work, hopefully she won’t have to become a “Hunter Gatherer” for the week.

Voice Over IP or Cell Phone?

The next interesting point is that the University does not supply a phone line, I can arrange to have phone service, but it would be easier for her to simply use her Cell phone as her default phone service and be done with it. That is my guess as to how this could work.

Another option was pointed out to me by a co-worker, which is a new service offered called Free Phone Line which offers a local number for FREE in many areas in Ontario (not K/W yet, but soon).  Free phone line gives you a Voice Over IP (VoIP) client for your PC which you can then use as your local phone, or you can forward that number to another number permanently (say like your cell phone). I have already set up a number in Ottawa for me to try the service out (the number simply forwards to my cell phone right now). Lots of other stuff offered by this firm, but I am still mulling over how this might all work.

I spoke to the Free Phone Line tech folks and they had some suggestions too (and had some input to me about how the University might view the VoIP client as well), given the service is free, I like it so far.

If anyone has suggestions or comments about food or phones, please feel free to chime in.

The Parable of the Long Distance Bill

Things certainly have changed from when I went to University. I had a roommate who had a girlfriend at an out of town university, and thus there only way of communicating was via Canada Post and Telephone (remember this was 1980). They were very much In Love (what is the font for sarcasm?), but they were also trying to be cheap so they only made calls to each other after 11:00 PM during the week (did I mention I am an early sleeper and an early riser? That’s ok, I didn’t deal with it well, and was quite immature, as can be expected from a 19 year old, but that is for other stories).

The first phone bill showed up (I had never seen a phone bill in my life ’til then), so I opened it, and said out loud “WTF” (but not as a TLA either), it was for $125.00. I got back to our room and told my roommate and said, “I can’t afford this big a phone bill, this University is ripping us off!”.

My roommate then calmly looked at the bill and said quietly to me, “Your portion of the bill is $15.00…”, and then he pointed out there were 4 calls to my parents (all on Saturday in the afternoon and each for about 4 minutes). I then did the math and realized my roomie was putting out $110 to stay in touch with his girlfriend. I don’t think he married her, but he sure spent a heck of a lot on her in long distance phone bills.

I have told my daughters this story and pointing out that this had better not happen to them!