Show me the Money?

For those who have been reading for a while, I had to decide about whether to leave my pension in my former employer’s pension fund (which is under funded) or to take a cash settlement and transfer most of the contents into a Locked In Retirement Account (LIRA) (and take the remainder as a cash settlement).

I got a lot of advice from different folk about whether I felt confident enough to invest the money wisely enough to mimic or improve on the growth I might get in the Pension fund, however, in the end I just did not trust that my former employer will:

1. Exist in 5 years
2. Whomever buys, or takes over them will not replenish the pension fund short fall

So I have decided to take my money out, and move it to a LIRA (and a small portion to a TFSA and whatever else I can into my RRSP). 

I tried to show as much diligence as I could to the documentation that I had to submit, because the default answer if I do not submit my request in time is for the company to keep the money in the (under funded) Pension. I had the Investment Councilor at the bank that set up the LIRA, check over to make sure all the forms had the correct info and then I had Mrs. C8j check everything over as well. No point in making this big a decision and not being careful with the forms.

I mailed the forms using Registered Canada Post delivery, so I have a tracking number and will know when then the forms were delivered as well (can’t be too careful here). Paranoid? Maybe, but again, it would be imprudent to trust regular mail with these forms.

$20 More on Plumbing

I went out and replaced the fill valve on the water closet, turned the water back on, and so far so good. I am still a bit concerned that the amount of water that leaked into our ceiling, seemed more than a leaky valve might create, but my suspicion is this is a problem, but it may not be the ONLY remaining problem. It’s good that Home Depot is only a 5 minute walk away.

Advent Financial Calendar Box Day 5 

We continue the Safety Deposit box in a box idea, but in that box is an official looking piece of paper, you open it to see it is your Will.

Do you have a Will? Is it up to date? Now is the time to think about updating or writing it, using either a Lawyer or some of the Will at Home kits that are available out there. If you are single, a Will is not as important, but if you have kids and/or Property or substantial holdings, you must have an up to date Will, or your wishes after you are gone will not be followed.

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Continuing on with my story about my home plumbing adventures, we have reached an interesting impasse with our plumbing (the house not my plumbing).

To recap, a simple gasket repair has evolved into a plumbing leak, which caused me to open a large hole in my front hallway ceiling. My wife and I are now are at the point where we have a turned off toilet (at the water valve) a hole in the ceiling and an innate fear of turning the water back on (for the toilet).

Today’s Financial question is: Is Fear a tool, or an impediment?

How many times have you not done something in your financial world because you were afraid of the consequences? Did it turn out that because of this fear you:

1. Didn’t do something that you would have regretted later (and thus fear was a good thing)
2. Didn’t take advantage of something that you now regret (i.e. fear became an impediment and it stopped you from succeeding).

Advent Financial Calendar Box Day 4

This is a trick day because yesterday’s box in a box, is actually today’s box (i.e. Safety Deposit box). What is in your Safety Deposit box (or home safe)? Don’t know? Let’s open the Safety Deposit box and look what is inside and make sure that:

• Whatever is in the box is up to date
• Everything you thought was in the box is there
• You have a list at home of what is in the box currently (which is up to date), and you know where the key is for your box as well (also very important).

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I think that loud bang I heard when I turned the water back on for my toilet repair yesterday was more than “just nothing”, given the huge water stain in the ceiling this morning. Yes, after bragging on this very blog of my great home repair skills, Karma or God or however you want to spin it, came and bit me for being so proud of myself.

We have a hole in the ceiling, but now the “leak” has decided to disappear? Might have been residual from the pre-gasket replacement, but I doubt that, should be interesting anyhow.

Coalition?

OK, I will wade into this murky swamp that is the Canadian Parliament, my guess is this is not going to work no matter what happens and we will be going back to the polls in February or March with a backlash against the Tories and the Liberals, and maybe the NDP making big inroads because the arguments are simple:

• Bloody Tories caused this election, arrogant bastards!
• Liberals kick their leader to the curb, go back and get him to run a government propped up by separatists?
• That Jack Layton, he’s a nice guy and was just trying to govern.

Advent Financial Calendar Box Day 3

Today’s box, is like those Russian stacking dolls, it is a box in a box. The box in the box is a Safety Deposit box, do you have one? If you don’t wear do you keep your important documents? Remember this is a carrying charge for investing, so you can actually write off your box for your taxes.

Safety deposit box, go get one if you don’t have one, or at least have somewhere safe to put your important documents.

Carnivals

Mentioned in a few carnivals this week:

• The Bankruptcy and Debt Blog #13is being hosted by Bankruptcy Acccess where they feature my post about Buying Lottery Tickets and Going to the Casino?
• The Carnival of Twenty Something Finances  - Thanksgiving Hangover edition is being hosted by Broke Grad Student and the same post is mentioned there.

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Yesterday Mrs. Caj and I discovered that our upstairs toilet’s wax gasket was not working and thus it was leaking, so we decided that this was a home repair project we could tackle (we have actually done it before). We have the Time/Life book of complete home repair which does explain in detail how to fix this problem, so I went off to the Hardware store and picked up two wax ring gaskets (or flanges).

Why Buy Two?

Simple, I know my inability to do anything correctly (when it comes to home repair or improvement) the first time. I do usually succeed on the projects I attempt (I don’t try things I know I can’t do), but I usually mess it up the first time, so I have learned the importance of buying back up parts for the project.

This home repair would have cost well over $100 if I could have found a plumber that would have come in on a Sunday, but in the end cost me $13 (for both flanges). It also needed to be done, given the toilet is on the second floor of our house, and this kind of a leak can really make a mess of the main floor ceiling and possibly compromise the home’s structural integrity (water damage to trusses). We also replaced the toilet flapper which caused water to leak, which cost me money as well (water bill).

My wife and I were also still talking to each other afterwards (occasionally we quibble in these kind of projects as well). 

Advent Financial Calendar Box Day 2

For your Financial Advent Calendar, today’s box has a slip of paper in it:

Day 2: Investigate and open a TFSA account for January 1 2009. 

Sort of a Financial Christian Fortune Cookie, really.

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Advent begins today, for those who don’t know, Advent is the start of the New Year in the Christian Church calendar.

Advent starts on the 4th Sunday before December 25 and Advent ends on Christmas Eve (Dec. 24th) so this year Advent is about 25 days long.

What is Advent? The season of waiting and preparing for the Festival of Christmas (i.e. Christ’s birth), and since it nicely fits at the end of most folks’ fiscal year, it’s an excellent metaphor for your preparation for the end of your Financial Year as well. You could spend Advent preparing for Christmas, but also preparing for next year (in terms of Personal Finance) as well.

Advent Wreath

To most people the only exposure to Advent is the calendars that are sold in most stores that have a box that is open each day of Advent (we are guilty of this as well, we have a Playmobil one that will create a Pirate scene for our son (a Christmasy, Pirate scene?)).

To others you have the Advent Wreath at Church (Mrs. Caj is complaining that this graphic has purple candles and they should be BLUE).

Start your fiscal planning for the coming, year, and start planning and preparing for Christmas too (no, that doesn’t mean bankrupt yourself by spending as much as possible (if you thought that is what I meant)).

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Jim Flaherty came through with an interesting and I would say very optimistic Economic Update (mini-budget, whatever), yesterday that took aim at something that all voters love to see under financial siege, Government Agencies and MP’s. 

No Debt Financing?

With some very creative and optimistic accounting the Finance Minister is promising to try to have either balanced budgets or very small surpluses up to 2013, which is very contrary to what most economists are saying is possible in the current economic instability (i.e. Financial Apocalypse). 

Flaherty did couch his optimism with the following cold statement:

“Any additional actions to support the economy will have an impact on the bottom-line numbers in our next budget. These actions, or a further deterioration in global economic conditions, could result in a deficit.”

So he isn’t saying there isn’t going to be deficits, just that there will be measures taken to avoid a deficit if possible.

Take that Ottawa Fat Cats

Not Really an Ottawa Fat Cat

No that is not a real Ottawa fat cat, it’s my cat from when I lived in Kitchener, but he is a good Metaphor for the “Fat Cats” in Ottawa.

Some of the measures against the “Ottawa Fat Cats” taken will be:

• Elimination of the $1.75 per vote allowance to support political parties that receive more than 2 per cent of the vote, staring April 2009. I really like this one, because all of the politicians are howling about it, so it must be a good thing. 
• Wage controls holding increases to public servants, including MPs and senators, to 2.3 per cent for last year and 1.5 per cent for each of the next three years. I really like this one, because the MP’s are mad about this as well, and the public service doesn’t like it either.
• Slash cost overruns on government travel, hospitality, conferences, exchanges and political services, this sounds like something they should have been doing already? What exactly were they doing before this, wait, I don’t want to know the answer to that one, so please don’t answer.
• Provincial equalization payments are gauged to the average GDP growth over a three-year period. Can’t wait to hear Dalton McGuinty tirade about this one.
• No mention of any extra taxes, but since this is not a budget, then I guess nothing has to be mentioned about that (yet).

Some pro-active steps being taken are:

• Giving $350 million in equity into the Export Development Canada and another $350 million in equity into the Business Development Bank of Canada. Interesting, guess I should send my resume in there since they might be hiring soon.
• A scary one for soon to be pensioners is allowing federally regulated pension plans to spend 10 years instead of five to make solvency payments if necessary. This is a slippery slope I think and it could end up like some of the private pensions that are woefully underfunded these days.
• Only allowing seniors to withdraw $7,500 instead of $10,000 from their Registered Retirement Income Funds (RRIFs), which is supposed to slow the cashing in of stocks and mutual funds I guess. 

Good Graphic to Show Canada is Doing Better than Most:

Canada Doing Not Bad with Debt

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Happy Thanksgiving

To my American readers I wish you a Happy Thanksgiving and wish you all the joy and happiness of this holiday season. It’s odd to read that the Thanksgiving weekend is actually a bigger traveling weekend than the Christmas weekend in the U.S., in Canada Thanksgiving is big, but not that big. Black Friday looms on the consumer horizon, with stores in Canada getting into the act!

BCE Not a Well Company

I should have known better but BCE announced atrocious numbers on Tuesday and the stock went into the tank on Wednesday, which is not a big surprise. The company is in limbo, with it’s “sale” still not confirmed yet they are laying off management like it’s the new national pastime (come to think of it, it just might be for 2008).

I have held the stock for some years as a Dividend asset, but now it doesn’t even seem to pay those any more, thanks to this misguided sale (at least last quarter) and now the company itself seems to be trying to follow in the footsteps of Nortel? (I really hope not, but then again, BCE has managed to make some very odd decisions in the past two years as well, so who knows).

TSX a Winner Otherwise

Other than BCE’s plummet, the TSX seems to be at leveling off, and it is trending neutral to positive, which is a good thing to see as well. A leveling off is a good thing, a positive trend is even better but a leveling off may mean most of the panic selling is over, but we shall see.

RSS Feed Issues

For my readers who read over my RSS feed, there have been issues the past few days, and I am not sure what exactly is causing it, but I ask for your patience and hopefully I can get to the root of this issue.

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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.

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I have had this discussion with a few folks, and figured I’d bring this one to my readership:

Why do governments assume we will pay fees to dispose of hazardous waste?

When I first moved to Ottawa every weekend the City of Ottawa would run a hazardous waste drop off at the dump near my house, where you could bring your paint cans, spray paint, old household cleaners and chemicals, etc.,. It was a good system (in my opinion) which made sure a great deal of these chemicals did not make their way into the landfill and were disposed of in a safe manner.

Since then the number of hazardous waste drop offs has been cut to 2 or 3 a year, and I am confident that a great deal of the hazardous wastes are not being disposed of in a safe manner.

CRT’s Disposal Charge by the Pound

My biggest complaint now is the disposal of CRT’s and old Televisions. A year ago I took a 14 inch monitor from my Church to a store that disposed of CRT’s and was horrified to see that I had to pay almost $30 to dispose of this device (I was charged “by the pound”).  My Church gladly paid the fee, but this kind of “fee” to dispose of something hazardous makes me wonder if this is the right way to do it?

Many people I know have voiced the unlikelihood of them paying this fee to dispose of their CRT’s, and instead the CRT’s will be disposed of in more creative ways. I agree that it is wrong to dispose of CRT’s in landfill sites (lead, and other interesting chemicals are some of the by products of CRT’s in landfill sites), however, making it expensive for consumers to dispose of them is not going to encourage folks to be good “ecological citizens” of this planet.

I found a way to dispose of 4 of my CRT’s, but it was at the expense of my former employer. They were having a “clean up the campus” week where you were supposed to clean up work spaces and put the “waste” in appointed areas. I decided to expand the “clean up” to my home office, which had many old CRT’s and I brought them to work, and my former employer disposed of them (I hope).

Solution to this Hazardous Issue?

My opinion is that there should at least be some kind of “amnesty” for folks to be able to drop off old TV’s and monitors without having to pay more than $10 per device (or free would even work better). Anyone care to disagree?

Interesting North American Car Manufacturer Solution?

Completely changing the topic, my mechanic gave me the best bail out idea for the North American car manufacturers. Make all cars sold for the next 4 years tax deductible (the purchase price). You want to see car sales sky rocket, with no money invested by the Government (other than a loss in Tax income)? This intrigued me (I’m sure it is completely impossible, but it was an intriguing idea).

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I have said many times that Cash is King, but I may need to rethink this idea given the odd situation my wife ran into a week or so ago.

The Cash Tale

Our son’s Nursery School was running a Scholastic book fund raising book service, so my wife found a couple of books she figured my son would like, and she filled in the form and gave it in with the exact cash needed to pay for the order.

My wife has decided to see if she uses cash instead of cheques and direct withdrawal, if it will give her the “tactile feedback” she needs for budgeting (I applaud this idea). My wife’s plan is simple once the cash is gone, there is no more spending, but that is a side note to this interesting story.

Mrs. C8j dropped off the order and thought no more about it, until she was cornered by the mother who has volunteered to run the book order. The volunteer told my wife that Scholastic did not accept cash and that my wife needed to write a cheque instead. My wife then asked the woman, why didn’t the volunteer write a cheque on her own account and take the cash as a cash advance and the problem would be solved. The volunteer said she couldn’t do that, and told my wife that she must submit the order with a cheque or the order would be refused. My wife ended up writing a cheque to get the books.

Cash is not Money?

This incident leaves me scratching my head, asking the question, when did Cash stop being currency? I realize there are situations where cash shouldn’t be used (sending cash in the mail is a bad thing), but it seems more and more, society is frowning on the use of cash, or is making it very difficult to use cash.

This made me wonder what would happen if I did the following experiment: Buy a car and walk into the dealership with the entire payment for the car in cash, would the dealership take the money? I am curious to hear if anyone has actually done this.

With counterfeiting of Canadian $100 bills, most establishments do not accept bills over $50, and they don’t really like taking those bills much either (try to pay for a $11.00  charge with a $50 bill and see the reaction of the cashier). How long will it be, before cash and bills in specific stop being accepted as currency?

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