Lifestyle Creep

About a year ago I asked Do You Make More than You Did 5 Years Ago and I got some interesting responses on the question, so let us delve a little deeper into what I call Lifestyle Creep™ which seems to be one of the things that may cause the economy to fall over, all by itself.

What do I mean by lifestyle creep? In my interpretation, it is the same as “Feature Creep”, a term used in High Tech Development teams, where someone keeps trying to shove more and more into a release of software or hardware, thus slowing things down, and eventually making the whole thing unusable. This scenario is pretty much what happens with young folks these days:

Lamborghini Gallardo Sports

You Deserve this don’t you?

  • Might graduate with a debt load, which must be paid off in a timely fashion
  • Still need to start saving for a house, and things, because that is what you need to do
  • You need a car to get around
  • That furniture you have is really crappy, after all you aren’t a student any more
  • The laptop stinks, it’s the same one from school, and it isn’t even supported any more
  • Must need a Big Screen TV too, c’mon they are cheap
  • Internet access is important
  • Need to go out with friends, after all you aren’t a hermit, life is short let’s have fun
  • Man, this work thing is hard, must need a fun vacation
  • Getting married, you can’t scrimp on that, after all you only get married once (hopefully)
  • etc., etc.,

Isn’t it easy for all of it to add up? Before you know it, you are now paying off student loans, credit cards, car payments, and rent and thus you have no money to save with any more, but you have great earning potential, you’ll get a raise next year, and it will all be good.

Speaking as a 53-year-old, Lifestyle Creep ensures you never make enough to live up (or down) to your lifestyle.

Image courtesy of  foto76 / FreeDigitalPhotos.net

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“Everybody’s Got Plans…”

The real quote is from Mike Tyson,

‘Everybody got plans … until they get hit.”

Mike Tyson Manteresting

Mike Tyson Speaks the Truth

This is true in all walks of life, not just pugilism.

If I could find a Financial Planner who would help put together the original plan, but have as part of that plan a “Plan B” and/or “Plan C” as part of that original plan, or gave an outline of a “Plan B” as part of Financial Planning, I think I might hire them. I have spoken to folks who were told what the risks were when they started to invest like:

  • The Stock Market is Volatile, if your risk aversion is high, then maybe you should be in Bonds
  • Bonds may not pay as high a rate as you wish
  • Things may go wrong
  • etc., etc., etc.,

However, do planners have other interesting ideas like:

  • If there is a market correction along the way, we will not be getting out of stocks, but we may rebalance things at some point during the adjustment, to make sure there is even distribution, in the portfolio.
  • If you suddenly have a large bill for your house, we can take money from the more liquid areas in your portfolio to pay for it, and then plan on how to pay it all back.

Planning is fine, but all plans change, due to unforeseen circumstances or just “life in general” (i.e. “… until you get hit”), your plan must either be flexible enough to deal with this, or you must be flexible enough in you financial planning to reconsider things, and change your plans.

Photo courtesy of Manteresting (NSFW)

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Happy Civic Holiday

Welcome to the oddest holiday of the year in Ontario. Most holidays have a name, “Labour Day”, “Thanksgiving”, etc.,etc., but not this holiday. This holiday has different names all over Ontario (in Quebec, they call it “the Monday after Construction Holiday”), so no one really gives this holiday the respect it deserves.

The holiday also takes place at the start of August, when a lot of people are already on vacation, so it kind of passes without getting noticed by some folk.

Heck, most stores and the Beer store are open today, so most folks in the retail world, don’t get today off.

Enjoy your “holiday” Ontarians (and others across Canada who give the holiday a name), but maybe we need to give this holiday a name? Here are some that I propose:

  • Ontario The Good Day, it reflects the rest of Canada’s opinion of us.
  • Rene Levesque Day, he did more for the Toronto economy than any one man ever.
  • OHIP Day, no program is more important, coveted or talked about, so let’s have a day for it.
  • Coffee Day , it gives the holiday a multi-cultural feel to it, and is there any one drink that deserves a holiday named after it? It’s also on a Monday!
Coat of Arms of Ontario

Ontario’s Coat of Arms, Cool eh?

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Welcome to August 2014, and for those in Ontario who are soon to celebrate a long weekend, I have one query, what is this weekend called? It has many names, “Colonel By Day”, “August Bank Holiday”, or “August Long Weekend”, how can a glorious long weekend not have an official title?

SDG Carolyn Wilkins reviews bank note signature/Carolyn Wilkins, première sous-gouverneure, examine sa signature sur un billet de banque

Doesn’t look a thing like me… SDG Wilkins Reviews a $20 (don’t loan it to Argentina)

Argentina is now officially in default, to compound the bad news for that country (given they lost the World Cup final as well), but what does this really mean? My feeble understanding of global economics seems to suggest some creditors are not going to get paid, but who loaned them the funds in the first place? China? The US? Russia? Maybe it is like Canada where a great deal of the Government’s debt is actually held by the citizens of the country? No matter how you slice this issue, I suspect this is not going to make things better in a very confused and scary world that we are living in.

For those that enjoyed the writings of Tom Clancy the Ebola epidemic (not the right phrase I know (the book I am referencing is Executive Orders)) in Africa lends itself to some interesting discussion points. The U.S. doesn’t really comprehend how close they came to having someone infected with this disease from landing on their soil (an American Doctor has succumbed to the disease, but he was only diagnosed (i.e.  he collapsed) while leaving one plane to then get on a plane destined for the U.S.. Let us hope the SARS protocols put in place by the Canadian immigration folks will help in case this outbreak turns into a more global problem.

For those not following me on Twitter you have missed one of my favorite quotes from Gail Vaz-Oxlade, and it was aimed at me. We were discussing retirement and such and her final response to me was:

@bigcajunman luckily, you die; I live a long unhealthy life as a woman

This is in response to me whining about not having enough money to retire with, so I guess I should stop saving? No, she didn’t mean that, but it was fun to rib her about it.

Forbes

My Writings for Week Ending August 1st

I had a drier writing week, with only two pieces. I have written or started about 6 ideas, but none of them were really worth publishing yet (that means I have about 160 titles and ideas still to finish off).

  • Financial Anarchy Day is another one of my many rants about the media and retailers attempts to make us go nuts and yell “FESTIVAL!!!” and spend like crazy people (Star Trek reference, for those who are unsure). I am not saying you should go watch the movie mentioned though, it is more of a Metaphor than a Recommendation.
  • Sometimes I get fed up with the “Make Money on the Market Using This Fool Proof Technique” e-mails that clog my inbox, so I figured I’d write the most outrageous Stock Picking Idea I could, and then someone points out in the comments there is one even more outlandish one out there, wow.
  • I did find in my archives one of my favorite phrases “Don’t Mistake Activity for Achievement” (a quote from John Wooden), just because you think you are working hard, doesn’t mean you are achieving your goals.

[click to continue…]

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Fool Proof Market Timing System

Before implementing this ground breaking investing heuristic, please read the important offer at the end, before acting.

Many folks have asked me the best way to out-perform the market by predicting market momentum (i.e. Market Timing or finding market trends), to optimize even a couch potato portfolio, and I was blown away when I came across one of the best fundamental market analysis tools, designed for this exact task. You might be surprised to find out you already have heard of this tool, but not used for market trending. Astoundingly, I found that the best possible way to predict how the market trends is to use the tried and true methodology of Biorhythms.

Biorhythms are a scientifically proven method of seeing the trends, momentum, and rhythms of people and now large systems, and this mathematical tool has been used for decades as an excellent way to see the trends and cycles that rule our world. Some have said that the ancient Egyptians knew of  Biorhythms and the ancient Pharaohs had their Wisemen plot their cycles to maximize their productivity and decisions.

What I am suggesting is that this scientifically devised trend predicting heuristic can easily be expanded to Stock Market momentum and predicting trends, as well. Even if you are an Index investor, if you know the cycles of the Index, then you can time the purchases of your Index in a more natural and empathetic method.

How can biorhythms be used to predict Key Price Levels and avoid trade breakouts? The secret insiders methodology is much simpler than you might think. Let’s say we are talking about the TSE/TSX, we know that that it was founded on October 25, 1861 and if we plot the cycles from this date we end up with these two intriguing graphs:

TSE Biorhythms

TSE Biorhythms Part 1

As you can see right now would be an AWFUL time to buy the TSE Index as it is a Triple Low for Intellectual, Emotional and Physical, however if we look even closer:

TSE Biorhythm

TSE Biorhythm Part 2

Wisdom, Passion and Mastery are also almost a triple low as well, so it might be disastrous decision to buy right now.

If you follow the Biorhythms of your Index you may make more sound investing decisions.

Important Offer (** Spoiler Alert **)

OK, if you are still reading this and wondering if I have lost my mind, this is the Big Cajun Man pulling your leg.

This method is absolute Hokum and me making fun of all those Market Timing (pay me lots of money and I will show you) offers I keep receiving. Do Not Use This heuristic in any Financial Dealings in your life! This is an attempt at humor, and should not be followed as financial advice in any way, shape or form!

I was watching a Hill Street Blues episode and they started talking about Biorhythms (a big thing in the early 80′s) and I decided to take it to its next natural level.

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