Advice from a Rich Man

Why don’t I trust advice infomercials about money, or better still alleged interviews about money on “news” shows? I think my overlaying point of view is a simple one (if not overly paranoid), that, if I knew how to make money (unfailingly) I wouldn’t tell anybody about it, until I couldn’t make any more money from it.

Financial Scam

Wonder if Fish Realize It’s a Scam?

Example, if I devised an algorithm that could beat the market every time, if I told a whole bunch of folks about it, I would then be competing with them and with the market. Unless (of course) my whole scheme was to manipulate the market, by having “dupes” buy the wrong thing.

Under the same reasoning as Groucho Marx’s line, “I would never join a club that would have me as a member” (I am paraphrasing), I cannot believe any “make money fast” scheme, because I think the real scheme is to get you to buy the scheme, not the scheme itself (and from what I can tell there is a lot of money in flogging stupid investing schemes to unsuspecting folk). I guess I am a, “glass is half full (of poison)” kind of guy when it comes to that kind of advice.

Any scheme that claims to be fool-proof, yet they are trying to fool you into buying it, seems to be the greatest dichotomy, isn’t it?

Image courtesy of Stuart Miles at


Do You Have a Money Buddy ?

One of the biggest problems I have is that I think of many great and wonderful ideas during the day, however, my ability to discern whether these are truly any good is when I actually tell someone about the idea (typically my wife). My brain seems to be able to be much more critical of my ideas once it has it as input from my ears, and hence why my wife keeps giving me the look of, “… this is another one of your “great ideas”…”, when I start telling her about things. Most of the time she doesn’t even have to comment on my concept, I will usually end my monologue with the statement, “but that was just a load of cod’s wallop”.

Much Younger Me

I was known to talk to my dog about money, he listened well, but maybe didn’t stop me from making a few financial blunders (not his fault though, after all, he was a dog)

The same is true for money ideas for a lot of folks. You can think about great investing ideas or concepts as much as you want, but if you don’t talk to someone about it, you may be in danger of having a “great idea” that maybe wasn’t as great as you thought. How can you remedy this? Find someone who you respect, who is also discreet (I realize that makes for a very small number of folks for most of us) to have money conversations, and that may help.

For many of us who are married our spouses end up being that “sounding post” for our great ideas, but for single folks, or folks who feel their spouse’s opinions are less than sound, you will need to hunt around to find out who you can “spill your financial guts” to.

I am lucky because I have a few Financial confidants, and have had some excellent advice and/or opinions from many of the finest financial bloggers including Preet Banerjee, Michael James on Money, Mark from Blunt Bean Counter (even if he is a Leafs fan), Mark from My Own Advisor, the Canadian Capitalist and many others. My guess is you don’t have access to as many experts as I do, however, see if you can find someone to hash out your financial peccadilloes.

My other advice is that if your wife or spouse is your Financial Confidant, don’t talk about money at bedtime. I can assure you that it might sound like a great idea, but I can also attest that this is not a great idea, no financial pillow-talk.


Frustratingly Correct Financial Answers

I have already written about Snappy Answers to Stupid Questions (the financial edition), but here are some more fun answers to give folks, that will cause them to comment, “Well that is obvious”, but remember that just because an answer is obvious, doesn’t make it any less correct.

Questions and Answers

You got some Q’s I got some A’s For You

Question: When is the best time to sell my stock ?

Answer: When it reaches the highest price.

Isn’t that annoyingly correct? No, it isn’t actually answering the spirit of the question being asked, but it is giving a very correct answer.

Question: Any tips on how to win the lottery ?

Answer: Yes, buy the winning ticket.

Yes, Captain Obvious is hard at work here, but I enjoy giving these kinds of answers, because folks keep asking me questions like this assuming I might have some amazing insight or karmic understanding about how lotteries work. Yes I did work in the industry briefly over 25 years ago, but no, I have no idea on how to make money on lotteries (unless you can run one, then there is a lot of money in that).

How about some investing advice, I get asked this one regularly:

Question: What are the best places to invest money in our {RRSP|RESP|etc., etc.,}?

Answer : In places that will make you the most money, and make sure that you sell before the price of them drop in value

Great answer, isn’t it?

The final one you have seen me answer so many times before, but, it is still very correct

Question: Is there such a thing as good debt?

Answer: No. If you owe money, you owe money, which is bad.

Did I miss any?


Back to School Week

In some parts of Canada school is already “back in” but in Ottawa, we have another week until school is back in session, and I am enjoying some time off, but for those who may not be up to date with my encyclopedic library of posts, here are a few good ones for your back to school planning this week.

It just all adds up don't it?

It just all adds up don’t it?

When my kids were going to High School I was never very happy with all the hidden costs, little did I know how that was nothing compared to higher eduction:

 I Thought Public School was Free?

I was running low on ideas and asked my wife for a topic for today’s blog and she came up with the cost of our “free” education system. She had been out shopping for back to school supplies (a HUGE industry in itself) and was telling me about all the “bargains” she was going to have to find to pay for all the unwritten educational expenses.

(click here for the many hidden costs in your Public Education)

September is actually a financial mayhem month for those with kids going to school. I am sure one year September will not be like this, and I may even miss it, but not this year.

Wake Me Up When September Ends

Not just a very good song by Green Day, but also an anthem in my personal financial life. September seems to create a “perfect storm” of debt load that appears every year and I think I can give you the list of the things that are the causes:

(to see the list of mayhem click here to read the whole article)

For University Students going back to school:

Advice is Best Served with Water

It is the magical Back to School season so many of my compatriots in the Personal Finance Blog world have taken it upon themselves to pass on sage advice to the future leaders of our world.  The advice given is very good and I wish someone had told me some of this advice before I started off at University, but then again, I most likely wouldn’t have listened (after all I was much smarter back then).

(click here for the rest of this piece of advice all University Students could use)

For more interesting ideas about back to school and RESPs, remember to read my entire RESP Page, which outlines the fun and games I have had setting up, putting money into and then attempting to extricate money from an RESP.


Financial Plimsoll Line

Did you ever feel overloaded with all this financial stuff in life? This used to be a huge problem with shipping until the 1800’s with the implementation of the Water Line mark or the Plimsoll Line. Essentially the Plimsoll Line on a ship’s hull marks that the ship is now full, and no more weight or cargo can be added to it, wouldn’t it be nice if we had the same kind of thing for our own Personal Finance Problems?

Financial Plimsoll Line

Example of a Plimsoll Line

My guess is that all of us have our own Financial Plimsoll Line depending on our income, and our ability to pay off debt (as well as ability to deal with having debt), but my guess is we should all have in mind what that number is.

If you don’t have a number, the real danger is you can go well past that Financial Plimsoll Line without even knowing you were that close?

So how do you think up that line? Here are a couple of examples of how to create a Financial Plimsoll Line:

  • When you buy your first house, after that happens, figure out how much debt you have the first month you own that house, or maybe even better, 6 months after you have bought the house, and say that is the line. At no time in your life will you be that much in debt ever again.
  • Right now you feel you are as far in debt as you can stand, so that is your number, write it down and remember it.
  • Create a number, based on your income: your line is 1.5 times your annual gross income, you will not go into debt any more than that. This does not mean it is a sliding scale (i.e. if your income goes up, the line should not be going up as well).

Sometimes all it takes is to set a limit on debt to get it under control. Set your limit today.

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