Canadian Personal Finance Blog

Archive for the ‘Lottery Tickets’ Category

This week seems to have been a week where I figured advice was a good theme, not sure where it all came from, but it was an interesting bit of writing to cover some of the “rules” and ideas that have shaped myself. Good advice should never be discounted in value, and bad advice cannot be blamed more for bad choices. This means you should be careful giving out advice, because sometimes you can’t tell whether you are giving good or bad advice.

Advice and Best of The Week

• Canadian Tax resource points out that Ontario’s brand spanking new Harmonized Sales Tax could mean higher costs for all Canadians, due to charges on Mutual Funds.
• Wise Bread points out that for First Time Home Buyers: Learn to Trust is an interesting piece of advice, but remember to hire trustworthy folks first too (as is pointed out).
• No Debt Plan has some good advice about Why Companies Want You to Receive Your Bills Electronically, which has some very good points in it.
• Money Smart Life talks advises about Emergency Funds In Case You Lose Your Job, which is topical and good advice.
• Ellen Roseman wants to hear about your Telecom Complaints, as she is in the same boat right now. 
• The Canadian Capitalist also writes about the Cost of Harmonization, looks like a new cash grab by Ontario.
• Michael James did some serious number crunching and may have a system where you might not lose as much when you buy lottery tickets with the teasing title Winning the Lottery.
• Gail Vaz Oxlade has some good advice about Mortgages in Blending and Extending. 

Watch for the videos this weekend, went back to Financial and enlisted a great Canadian satirist to help out. Unless I win the lottery, see you on Monday.

That was the label I put on the Pay Day Loan and Cheque cashing shops, but I think I will revise my statement, not wanting to put Pornography in a bad light (given how much of the Internet was built because of it, I don’t want to seem to be biting the hand that fed me).

Financial Head Shop

I am revising my statement saying that Pay Day Loan and Cheque Cashing places are actually the same as Head Shops (financially at least). 

Head Shops are where you buy the paraphernalia and “bits and bobs” you need for your drug habit (e.g. bongs, rolling papers, Bob Marley T-Shirts, etc.,  just ask Michael Phelps he can fill you in on this). 

Pay Day Loan establishments are like Financial Head Shops and use the same arguments as well. “…We don’t make our customers use our services, we are simply supplying a needed service to our customers…” (talk to a Head Shop owner, you’ll get about the same statement of business (i.e. if we didn’t do it, someone else would)).

No matter that you are charging at a rate that would make “Olaf the Loan Shark”  blush, or that once someone starts using a Pay Day Loan it is very hard (nearly impossible) to get out of the cycle (sounds like a bad habit, like say, drugs?). It is a service to take a $5 service charge off a Government cheque that any bank SHOULD cash for anyone who has sufficient identification. 

Sorry folks, guess I woke up on the bad side of the financial world this week. I do like the comment yesterday about how the picture I posted looks a lot like an old time strip club (given the amount of Neon lighting used), that comment I had to chuckle at (glad to see my readers have as twisted a sense of humor as I do).

Senators Ticket Sales Down

I enjoy listening to Sports Talk Radio, just because of it’s silly inane nature and you don’t have to think much, but I caught myself getting quite agitated by a statement by the TEAM 1200 morning crew complaining that people aren’t going to games in Ottawa only because the team stinks. Being a Montreal Canadiens fan (sorry, if you grew up in Montreal when I was a kid, you were a Canadiens fan or you got the crap beaten out of you), I thought it was funny, but then I got agitated.

How naive and obtuse to think that the only reason people are not paying from $20 to $200 a ticket to go out to a Hockey game being simply an “I don’t like the team” decision. I rarely go to games, but am still a big fan of Hockey, because I cannot justify spending upwards of $100 to $300 for a single night out (parking, a beer, popcorn and a ticket), it’s as simple as that. Yes the Senators are not playing well this  year (no big revelation there), but I still think another reason every game is not sold out is that folks are worried about money.

If the team’s record had anything to do with folks buying game time tickets, the Maple Leafs would not have sold out pretty much every game in the 80’s (and trust me those were teams it was painful to watch for FREE).

I opened my Ottawa Citizen on Saturday and I saw this picture and I was hit by a combination of revulsion, anger, and lurid curiosity.

Revulsion and Anger

Why am I repulsed? You haven’t really read much of my posts, but I think the Cheque Cashing and Pay Day Loan industry is the worst financial service out there, and shouldn’t just be heavily regulated (which it is not) it should be shut down. Anger because the surcharges and interest rates taken by these modern day Loan Sharks is obscene even at the Loan Shark level. 

Lurid Curiosity

This is the most amazing entrepreneurial set up I can see. Whoever runs this particular business has nailed their clientele exactly and are pandering to their every whim and need.

• Cheques cashed at a fee
• Lottery tickets sold (and given away as incentives to good customers)
• Cigarettes sold
• Foreign Exchange
• Money Transfers
• Income Tax “Refunds Now!”

What other services could they offer?

Modern Day Loan Sharks

It’s staggering that the government allows this kind of “financial pornography” to go on. I must admit I didn’t think there was places like this around my house, but I noticed a  ”Modern Day Money Lender” has opened in my neighbourhood, why? I have no idea.

My guess is over the next year or two, this may be one of the growth industries along with repossession and bill collection, and that is a very sad statement about life in general.

Another Saturday video post from the National Film Board Archives. 

The House That Jack Built is from 1967 and it lays out Suburban Life (at the time), which sounds remarkably like Suburban life now.

Jack’s laments sound much like many of the laments I hear these days, until, some magic beans? Careful for what you wish for Jack, because even though you didn’t have much at the start, what do you have in the end?

Thus endeth our parable about how maybe you have (financially and in life) all you NEED right now.

My wife told me about a new episode of “‘Til Debt Do Us Part” which Gail Vaz-Oxlade hosts, where one of the spouse’s financial tactic to paying off their debt was to go to the Casino and try to make some extra cash (no she wasn’t working there, she was gambling). Other folks I know buy lottery tickets or are part of “groups” that buy lottery tickets weekly, hoping to hit it big so that they can retire.

Allow me to be clear on this one, neither of these “Financial Plans” are effective, nor are they prudent.  My personal opinion is that if you have reached a point in your life where you feel you must gamble to catch up on your financial obligations, you are in dire need of serious help from some kind of professional. 

The Gambling Recovery Plan

If the Canadian Government came up with a plan to take $2B and go to one of the larger Casinos in Las Vegas and attempt to double it using a “gambling system”, there would be an armed Coup D’Etat that night, however, if we hear of friends or family going to the Casino, how many of us stop them? Gambling your money on a hot stock tip, a game of no limit Texas Hold’em or a pyramid scheme is not the way to recover from a financial set back. 

It usually takes time to get yourself into a financial bind, and thus it is going to take time to get yourself out of the financial bind you are in. There are no quick fixes to financial problems, and if there are, usually you’ll be back in the same financial bind quickly, if there was a quick fix (i.e. windfall money appears which helps you out, but you don’t fix the root cause of the problem).

The only Gambling Recovery Plan I could think that might be a success is if, you are a gambler and you have been blowing your money at the Casino and you decide not to go to the Casino any more, that plan will succeed (as long as you don’t find somewhere else to squander your moneys).

The Lottery Retirement Plan

Having worked in the lottery business many years ago, there are three groups of people who make money on the lottery:

1. The person that runs the lottery makes the most money, hands down. Governments, however, have made it illegal to run your own lottery, so you can’t make money on lotteries this way.
2. Printing and distributing lottery tickets is a fairly profitable business (look at Canadian Bank Note, or British American Bank note’s financials in this area), but it is a very small percentage compared to how much the lottery commission makes on a Lottery.
3. Selling lottery tickets makes stores money, and they get to share in winnings of their customers too, but the sellers don’t make as much as the printers do

Note there is no mention on that list of BUYING lottery tickets as being a way to make money on lotteries.

I realize that most likely every reader of this article knows someone (a friend of a friend, or something like that), that Won the Big One in the lottery. That is what the Lottery Commission wants you to remember. What you don’t realize is most likely you know of someone who was bitten by a shark or hit by lightning (both more likely occurances than lottery winning). 

If you are spending money on Lottery tickets, figure out how much you are spending yearly, then multiply that by 20, and that is the money you’d have in hand (plus interest) if you didn’t buy the lottery tickets (or the Cigarettes, or the Coffee, etc., etc.,), keep that in mind the next time you want to buy an “Early Retirement” lottery ticket.

You want a winning bet? Put that money in an RRSP or an RESP, or give it to a Charity.