The Business of University Fees

For those of us who have kids about to return to University we are about to see the onslaught of fees that are charged by all Universities (in Canada). There are many fees being charged, but the two that caught my eye (on my daughter’s tuition bill from Queen’s University) were:

Grad Health Insurance 2016 Fall 2016/09/30 $280.00
Grad Dental Insurance 2016 Fall 2016/09/30 $220.00

For those who do not want to do the arithmetic, that is $500 for 4 months.

The Noble and Under-appreciated Stubby

Don’t see any beer taxes on the tuition bill (luckily)

Remember that if your child is in school your health insurance plan covers both Health & Dental (if you are covered that is), so you really don’t need to pay this fee, and most universities will allow your child to opt out of the charges (which seem quite high to me). I have checked with our friends at LSM Insurance who think the fees are a little high, but not too bad. Another factor to take into consideration is that a lot of Health Plans have positive enrollment clauses (I am with SUN Life for health insurance and that is the case), where you must every year (after a child turns 19 I think) go to the Insurers web site (or send in a form) stating that your child is still at school, or the child loses their coverage under the plan.

How easy is it to opt-out of the health and dental fees at University ? At most schools, not as simple as you might think, and deciphering which fees are optional, and which are mandatory is a real quagmire of data.

I remember folks opting out of fees when I was at University, but typically those were the folks that were paying their own way, and didn’t want to pay for things they weren’t going to use.

What are some other fees from Queens University ? These add up to almost 25% of the tuition bill we are paying (note that residence or living expenses are not here either). Still think you won’t need an RESP to help your kids go to University? I’d also like to remind those with younger kids that there is no legislation limiting the fee levels (tuition yes) or how much they can increase.

Charge Amount
Student Assistance Levy $40.15
Education Society Fee $10.00
Athletics $168.41
Student Wellness Services $58.93
Campus Observation $0.50
Work Bursary Program $5.38
Student Life Centre $21.50
SGPS Society Fee $45.72
Telephone Aid LIne Kingston $0.75
Legal Aid $5.00
Sexual Assault Crisis Centre $1.25
Canadian Federation of Student $16.24
SGPS Student Advisors $3.81
SGPS Accessibility $3.00
The Queen’s Journal $3.50
CFRC $7.50
Walkhome $19.86
Oxfam $0.87
Bus-It $66.25
Qns Internl Affairs Associatio $1.00
SGPS Sports Fund $2.00
Queen’s Food Centre $1.25
HIV Aids Regional Srvcs. $1.00
Union Gallery $3.00
Queen’s Daycare $1.00
Four Directions Aborig Stdnt C $1.00
Dawn House Women’s Shltr $1.07
Q Intern Stdnt Soc Bursary Pgm $0.71
Student Refugee Support $3.37
Reelout Art Project $1.80
Positive Space Program $0.34
Kingston Youth Shelter Project $1.00
Yellow Bike Action Group $0.60
Ban Righ Foundation $3.00
The Grad Club $20.00
Centre for Teaching & Learning $1.35
Sexual Health Resource Centre $0.92
SGPS Sustainability $1.50
Levana Gender Advocacy Centre $0.81
Kgston Loving Spoonful Charity $2.00
Grad Health Insurance $280.00
Grad Dental Insurance $220.00

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Zap! Electricity Prices Pushes Inflation in June

Stats Canada announced on Friday their monthly CPI report for June 2016, with the following two points:

  • The Consumer Price Index (CPI) rose 1.5% in the 12 months to June, matching the gain in May.
  • Excluding gasoline, the CPI was up 1.9% year over year in June, matching the increase in May.

This cursory overview suggests things are as usual in terms of inflation, however, if you read the detailed June Report, (about the Inflation Rate in Canada) you see a few more telling truths (to turn your financial stomach).

I like this part of the detailed report where we find out what major parts of the categories are contributing to higher prices, note Electricity giving us a big zap.

Main upward contributors:

  1. Purchase of passenger vehicles (+5.6%)
  2. Electricity (+6.9%)
  3. Homeowner’s replacement cost (+3.5%)
  4. Food purchased from restaurants (+2.6%)
  5. Air transportation (+5.1%)

Main downward contributors:

  1. Gasoline (-8.5%)
  2. Natural gas (-12.5%)
  3. Mortgage interest cost (-1.3%)
  4. Fuel oil (-13.2%)
  5. Dairy products (-2.1%)

As usual we see that Fossil Fuels are big downward contributors (although now in Ontario, we will have a Carbon Tax, which will then have the HST on top of it, so that might change here).

Inflation in Canada with and without Gasoline

The 12-month change in the Consumer Price Index (CPI) and the CPI excluding gasoline

Bank of Canada’s core index:

The Bank of Canada’s core index increased 2.1% in the 12 months to June, matching the rise in May.

The Bank of Canada has been saying that inflation is “under control” (for now), but my guess is the fragility of the world economy (and Canadian economy) will continue to keep interest rates lower (for now).

Reports from the Past While.

If you want to have a walk down memory lane about how prices have gone up, here you go.

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More Pensions, New CTC, and #MoneyTalk

According to our friends at Stats Canada more Canadians are in Pensions (up by almost 1.2%), which really surprised me. This would suggest all this palaver and gum-flapping about Canadians not having enough money to retire was just Media over-reaction, however if you read the report a little closer, there is a telling statement:

Dangerous Pension Conditions Ahead

Dangerous Pension Conditions Ahead? More people using different kinds of pensions that is for sure.

In 2014, just over 4,380,000 employees were in defined benefit pension plans, down 0.5% from 2013, and down 8.3% from a high of 4,776,000 in 1992. Defined benefit plans accounted for 70.0% of employees belonging to an RPP in 2014, a drop from 71.2% in 2013, and down from over 90% in the 1980s.

So the Defined Benefit Pension Plan is slowly dying off (except in the Public Sector) and the Defined Contribution (and the hybrid mutations of that concept) are where there is growth. This makes more sense, most private sector companies cannot afford a defined benefit pension system (whether the Government can afford their pension system remains to be seen).

For those of us with kids, that aren’t making too much, the new Child Tax Credit (CTC) just kicked in. The good news it is tax-free, but if you make too much money, you get nothing. There is an old (but still helpful) video from Preet about this exact topic at the end of this article.

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My Writings for Week Ending July 22nd

In summer mode, I am actually accumulating more unfinished titles in my writing pile, but What is Couch Potato Investing? came up as a question a co-worker (who is an occasional reader) asked me what it meant, and to my surprise I have talked about the topic a lot, but I have never really given as simple overview of what it meant, so there it was. I have written about the concepts of Couch Potato investing, but this article let’s folks understand the basics (I hope).

A Money Thought

Given Mr. Trump is now the Republican Candidate for the President, I have been researching some of his more interesting quotes, I like this one from “Trump University Entrepreneurship 101: How to Turn Your Idea into a Money Machine”

If you’re not satisfied with the status quo in your career, read this book, pick one key idea, and implement it. I guarantee it will make you money. —Donald J. Trump

I am reading the book for free on-line, so I feel I am already ahead of the game (i.e. I saved money by not buying the book).

A Tweet to Remember

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What is Couch Potato Investing?

I had a friend ask me this question, What is Couch Potato Investing, and for those starting out, it may not be obvious what I mean when I talk about this variant of an investing concept. I present to you a simplistic primer on Couch Potato Investing.

Couch Potato Investing

Happy Couch Potato Investors

The Couch Potato Investor label is actually quite descriptive, in that it describes investors who do not wish to be bothered by day-to-day investing issues, they simply want to set up their investments and occasionally come back and take simple actions on the investments in place (in military terms, fire and forget).

Most of the time, Couch Potato Investors are typically Index Investors (i.e. they are not investing in individual stocks, or investment vehicles, they will invest in an area), thus single day changes in the markets become less of a concern (to quote a well-known investor, “I am an indexer, I don’t care what the Index did today”). I suppose you could be an individual stock investor and be a couch potato, but you’d have to buy something like Berkshire-Hathaway or something like that.

How big or small your portfolio ends up being, is up to you. It is possible to have the greatest couch potato portfolio, which is a two Index Fund (yes, that is possible), but others might argue that you are not diversified enough, and should have more diversity, so typically your portfolio ends up being:

  • Canadian Index – to invest in your country and such
  • US Index – you may as well invest in the economy that is mostly driving the world’s economy
  • International Index – this is murkier water, as there really is no definitive index, so you will need to do some research in this area
  • A GIC-like fund or a Bond Fund – remember Bonds can go down in value in the short-term
  • Maybe a REIT of some kind (but not for a specific city, or you might really get burned when the inevitable correction happens)
  • Cash? Cash is always nice to have around, but don’t put it in your mattress

How much of each you buy is up to you, but keep track of your initial investment percentages, because you will need to re-balance your portfolio (so you take your profits on occasion). What is re-balancing? Every little while (a period you choose typically either every quarter, 6 months or yearly), you look at your portfolio and either:

  • Add funds to the portfolio, to get back to your original investment percentages, by buying more of the lower total value indexes.
  • Sell off higher valued indexes and buy lower valued indexes to get back to your original investment percentages

That is about it, you re-balance, and you sit back on your Couch and eat potato chips, watch Netflix and Relax.

This is meant as a simply primer on the topic, there are many great articles written by other folks outlining good Couch Potato portfolios (using either Index Funds or ETFs) that you can research and simply choose which one you are comfortable using.

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The Bank of Canada’s opinion is that Brexit is going to hurt the Canadian Economy (and its possible recovery) this year, which isn’t really news, but it is an interesting observation. This and a bunch of other information was reported by the Bank of Canada, when they reported they will not be doing anything to their key overnight rate. The Canadian economy continues to be in a very fragile state, and raising interest rates is unnecessary (or ill-advised, depending on how you read the report) at the moment. There exact statement was:

Inflation in Canada is on track to return to 2 per cent in 2017 as the complex adjustment underway in Canada’s economy proceeds. The fundamentals remain in place for a pickup in growth over the projection horizon, albeit in a climate of heightened uncertainty.

Mailbox in Canada

Open For Delivery (for now)

We do seem to be living in very uncertain times.

So far we have no lock out or Postal Strike, while they keep talking,  but should you really be waiting for the fat to hit the fire? Remember to sign up for Direct Deposit with the Government (although allegedly those cheques will keep going?). Get your bills delivered by E-mail as well (most of your major bills will do that). For your packages, well that might be an issue.

As a practicing Anglican, I was appalled to see that when a motion at Synod (think of Church Parliament) is either defeated or passed by a single vote, there is not an automatic recount. While Anglicans are nice folk (in general), we do seem to have some very odd ways of dealing with issues.

What will Oktoberfest do now? Evidently Polka King Walter Ostanek won a lottery grand prize of $1M, who will be playing Roll out the Barrel or Too Fat Polka in Kitchener in October? Someone call Uncle Franz! Ach, du lieber Gott in Himmel !

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My Writings for Week Ending July 15th

I am slowly getting through my archive of nearly started articles (still over 220) and My Four Best Investments was written on the way back from my daughter’s graduation from Trent University. This isn’t meant as a jab at those who choose not to subsidize their kids post-secondary education, just that if I hadn’t invested in my kids’ education, I most likely would have blown it on something else.

0% Financing On Cars, That’s Good, Right?

Preet has been busy this week and he has a new white board session outlining why 0% financing on your car might not be your best deal. I buy used cars, and you never get 0% financing on those.

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