Canadian Personal Finance Blog

Time and Financial Goals

Yesterday I celebrated my daughter’s 20th birthday, by reminiscing about the day she was born (she is out of town at school, so we won’t celebrate with her, but assume she celebrated with friends).

Twenty Years Ago

The decision to have kids was a hotly discussed topic between my wife and myself, since I was positive we could not afford to have kids at the time (as usual, my wife was correct, that we would simply adjust our lifestyle to fit the new costs in).

Twenty years ago, I had little or no thoughts of retirement, and saving, we hadn’t even bought our first house yet (another hotly discussed topic in the apartment we rented at the time).

My parents luckily thought about the future for us, and started buying our kids savings bonds for their post secondary education (or when they moved out of the house). This is something that I hope I can remember to do for my kids when they have kids, and that money has since moved into RESPs and such. This is something that all parents can pass on to their kids, teaching them the importance of saving for the future, because the future comes a lot faster than you think.

I didn’t really even have any RRSP’s set up in 1990, I did have some savings that we were putting away to buy our first house, but that was hard enough to build up. In hindsight I could have made a lot of shrewd investments, but I have also seen over twenty years that “sure things” in the world of investment are not as sure as they look (i.e. Nortel stock and such).

What Would I Change?

It’s easy to be trite in this situation and list out the obvious things that I should have done back then such as:

• Start an RRSP and invest in high tech early and get out early
• Don’t build up credit card debt
• etc., etc., etc.,

but this would imply some degree of regret or sadness about those twenty years, and I don’t wish to portray those years that way.

I have learned more from being a parent than I would have, had I got a PhD. I have had more happiness and joy in those twenty years than I deserve (or merit), but I am unapologetic too.

Yes there are times where I look back and think, “I should have….”, when it comes to some money decisions and some other decisions in my life, but in some ways I learned more from my mistakes than from my (minor) successes in the financial world.

Am I saying, “Don’t worry, be happy!” (to paraphrase Bobby McFerrin) about your money? No! I am saying you should be careful and take the obvious steps to be safe with your money and to avoid debt every which way you can, however, if you think you have done all you can, and you are comfortable, then you should enjoy your life, is all I am saying.

Tempus fugit, and twenty years will fly by in a heartbeat, so make sure you are enjoying it.

For those who don’t realize it, today is Shrove Tuesday (aka Pancake Tuesday). This day means Lent starts tomorrow, and in New Orleans we have Mardi Gras festival as well (although I am not sure they have stopped partying since they won the Super Bowl).

The word Shrove, is the past tense of the English verb shrive which means to obtain absolution for one’s sins by way of Confession and doing penance. Doesn’t sound like it is much to do with pancakes, now does it? Evidently we are also supposed to make merry and enjoy ourselves before we go to Lenten confessions (I like the first part, the second is not as likely).

Financial Shrove Tuesday

NO! I am not saying you should go out and blow your finances up before you start your Lenten Financial Journey, far from it. You can have some fun, but all in moderation. If you plan on giving up your daily Latte, then have 1 last one on Tuesday, and savour it. If you plan on brown bagging your lunch for Lent, then maybe a lunch out is OK, however, don’t splurge! If you plan on using cash, maybe it’s time to find a really good hiding spot for your credit cards (or maybe you should visit your bank and put them all away in your safety deposit box). If you are planning on reading some books on Personal Finance, today might be the day to get them out of the Library.

Make sure you have some pancakes too.

Random Acts of Kindness Week?

Forgot to mention that it is Random Acts of Kindness week (I would not kid about this topic), so if you were thinking about doing a Random Act of Kindness, this would be the week to try them out.

A few ideas:

• When in line at a Drive Thru (preferably a coffee shop), offer to pay for the next car’s coffee as well
• Clear your neighbour’s driveway if it is covered in snow (especially if you have a snowblower).
• Give the toll booth attendant a $20 bill and tell her to pay for as many cars that follow as possible.
• Phone up a local kids sports team and ask if they have a fund to help pay for less fortunate kids to play, and give them some money.

These are only a few trite examples, you know how you can help out, so do so. Anybody care to comment on what they may have done so far this week?

For my Buddhist readers, a belated Happy Parinirvana Day. May we all reach that level of enlightenment in our lives (some day).

Video: Madoff Saga

It seems PBS is being quite liberal with their video library so here is a very interesting clip about the Madoff Affair, an interesting view from one of Bernie’s “partners”, sounding very disingenuous (IMHO). Any time someone claims, “As God is my witness…”, I start getting figity:

Quicken is a useful tool for me, to track my family’s spending habits, but last week was an interesting week for me.

I started working full time in 1986, so some might say more than a generation ago (depending on how you count), and when I was first hired, I was paid a reasonable wage (not an exorbitant one, but reasonable). My wife and I lived on this income in a reasonable apartment, and we lived a frugal but reasonable life.

Flashback to last week, where in two purchases I eclipsed my yearly gross income for 1988 (2 years after I had started working full time). What did I buy? A house? A yacht? Nope, our orgy of spending was on:

• A used Toyota Sienna (stop snickering, it doesn’t have the accelerator pedal issue (at least not yet)).
• A knee brace for my daughter who has damaged both her MCL and ACL

That’s it, yes a fairly big expenditure, but remember this is more than I made gross (before the CRA got a hold of a lot of my income). The knee brace is actually about the price of 3 months rent from back then, but it is a necessary purchase (and I will be reimbursed (I hope) in some way from my health plan).

Other interesting factoids from these purchases:

• The van cost about 43% less than our last van which we purchased new (and paid off, with 0% financing over 5 l-o-n-g years).
• We were offered “financing” from Toyota of 6.5% annually, I pointed out that my bank would give me a rate of nearly half that, they didn’t seem to care.
• The purchase was not financed, and if I assume a 4.0% financing rate I have saved in the neighbourhood of about $4000 in interest charges (assuming a pay back over 4 years or so).
• The knee brace comes in many interesting colours and styles (colour styles), including: Snakeskin, Butterflies and Star Spangled Banner. My daughter chose metallic black (I think Black is the new Black this year).
• Didn’t get any car matts from Toyota, but given the recall issues about the placement of their car matts, maybe it’s a good thing I bought some replacement matts at Canadian Tire
• Believe we got a full tank of gas with the Van (given gas prices that’s about $100 added in)
• Got a reasonable trade in for the my GM Montana (that had a distinct odour of Anti-Freeze), so no complaints there
• Toyota spelled backwards is Atoyot, surprised there isn’t a car called that now.
• Knee Braces should never be worn backwards, or your knee will end up bending like an Ostrich’s knee, which is bad.
• Certified cheques cost more to get from my bank, than a bank draft, so I saved $2.50 by getting a bank draft.
• What is undercoating for, and why does it cost so darn much?

Lots of interesting factoids (where factoid means things interesting to me, and most likely me alone).

For those regular readers, you’ll know that I have gone on a bit of a Joys of Yiddish rant this week, but I can assure you that the site will not be changing to “The Joys of Yiddish Personal Finance” (although it is a catchy name).

In the Personal financial blog-o-sphere much less Chutzpah was written, and I can assure you that these meyvans are most definitely mentshes. Oy, what a week it’s been:

• PBS had a very interesting special on Credit Card practices in the States called The Card Game which has caused a great deal of discussion on a few sites. Again, classic examples of chutzpah in the financial services world.
• The Canadian Capitalist mentions the special directly in The Card Game on PBS.
• Whereas Michael James takes the special and disects one of the many dirty tricks talked about in the show with Many Bank Fees Should be Considered Interest Charges.
• Gail Vaz-Oxlade also mentions the special in This & That: Kids’ Education Edition. Useful hints on RESPs here as well.
• Million Dollar Journey continues the education theme with Talking About Finances with Your Aging Parents … or Grown Kids. Always a touchy topic.
• Preet at WhereDoesAllMyMoneyGo asks the intellectual query about whether it would be good Severing the Link Between Price and Weight Part I, take close note of the comments on this one too, some interesting points brought out.
• Larry MacDonald asks the interesting question Time to Raise interest rates?, and I think maybe it is too late, bubbles are forming all over the place!
• Four Pillars shows the hypocracy of Financial Blogging, writing about something they hate with the post Personal Finance at Ridgemont High, hey I write posts that I detest doing, but someone has to write it! As Mr. Hand might say (my favorite character) Am I hallucinating here? Just what in the hell do you think you’re doing?

The Card Game from PBS Video

Here is the video for your enjoyment as well.

Now that is chutzpah!

Yes the year may only be a few days old, but it can still teach us some important things even in it’s short life.

No Such Thing As a Sure Thing

After watching the Swiss Junior Hockey Team beat a talented Russian team, 2010 has taught me there is no such thing, as a sure thing. If someone had said this might happen before the World Junior Championships started, they would have been laughed at, and when Russia was due to play the Swiss in the Quarter Finals, it was assumed that Russia would win and face Canada next, however, sometimes the sure thing, does not pay off.

Yes this is a real long shot, and the Swiss came back to earth against Team Canada in the Semi-finals, however, it is an example of how there are no sure things, and you should hope for the best but plan for the worst.

This year has already shown it may be a year of big (and hopefully not nasty) surprises. Remember this if you get a “can’t lose” piece of financial advice (or investing tip).

Things Can Change Fast

After leaving Burlington where the grass was green and then arriving in my home in Ottawa which was under 2 feet of snow, this year showed things can change quickly (and not necessarily for the better) very quickly. I looked at my in-laws back yard and saw green grass (OK it was a little cold down there, and there was traces of snow), but I knew that snow was going to be part of the equation, it was just when would we run into it, and how deep would it be. After skiing into my driveway, which was buried, I learned that things can change very fast.

In the world of Financial Advice, be nimble and be ready for things changing really fast (and again, not necessarily for the better).

What will the rest of this year hold for us? I don’t know, but strap in, looks like it might be a very interesting one.