Canadian Personal Finance Blog

The Supreme Court ruled (without formal explanation) that the BCE sale can march ahead, but it is by no means a done deal, as there are still a few obstacles before the sale is finalized. It’s very interesting that there is no formal statement from the court yet about why they are allowing it to go ahead, so it will be interesting to read the reasons, once they are finally available for commentary.

Am I happy about this, for now, yes I am, however, as I said, I think the sale price of $42 may not be achieved due to market pressures, but again, we shall see.

Best Buy Warranties

Thanks to an accident and a pressing need for a new digital camera (the previous one was damaged) we went off to buy a camera at Best Buy. Why Best Buy? Don’t have to pay for 3 months, and I thought their advertising implied don’t pay for 12 months, but we’ll talk about that one in a little while.

For a while no one really bothered us and we decided to pick up another Canon camera (not advertising, just stating a preference). A sales agent finally came over and did some intelligent gabbing about how she owned this camera and it was fabulous (oh really? not sure I bought that part, but what the heck). I asked all the questions that were important to me:

• Does it use “AA” batteries or Lithium Ion (I use “AA” rechargeables), the answer was yes “AA” was normal.
• Does it do video? Yes, it does Full Motion JPEG (a little wonky format, but there are enough translators out there, that it was fine).
• How much for a big memory card, $40 for 4 GB, so that was fine (high speed SD card? I seem to remember this means it may not be easily readable in older systems, but what the heck).

Then we came to the payment. Best Buy standard is don’t pay for anything over $100 for three months for free (but if you don’t pay it off they scalp you with a 28.8% interest rate that is retroactive to the day you are born the day you purchased the item). The advertising in the weekly circular implied that 12 months pay back was “complimentary”, but no, they were simply saying, that if you want to pay $90 you could not pay for 12 months (which added up to about 20% interest paid anyhow).

Then we came to the Warranty, which the young lady pushed on me with great ferocity. Did you want to pay $70 for a 2 year warranty above and beyond Canon’s warranty? No. Long diatribe about all the serious things that can go wrong with my camera (no mention of daughters dropping it and breaking it), I listen politely, no again. There is also a 3 year warranty at $90? No thank you, still more talk of the perils of the lenses and how long it will take to get the camera back from Canon, who most likely won’t fix it, still, “No Thank you”. The young lady finally relented and I left.

I remember reading that while Best Buy employees do not get paid commission on sales (not sure I completely believe that), they do get a BIG percentage on all “extended warranties” that they do sell, and I saw that when I got this camera. I was in a rush, but managed to stay polite but firm in the situation, but I could tell the young lady trying to make the sale had a large stake to be made if I did buy the “warranty”.

Any folks out there with similar stories to tell?

Related Articles

• Extended Warranties a Sucker’s Bet by the Canadian Capitalist
• Class Action Suit Against Canada Post by Michael James on Money
• Pride and the Extended Warranty by me

One of my problems is my complete lack of patience in most things in life (just ask my kids), so there are very few occasions where I think I can say I have been patient. Sometimes I go in the opposite direction and am too patient (as I was in the High Tech implosion), but from what I can tell as long as you are not investing in really risky stocks, patience is a virtue in investing.

As the article in the Globe points out I am fairly heavily into banks, and the past couple of weeks has not been a great time for me to watch the pounding most financial stocks have taken, however, I am proud to say I have stayed the course on that investment strategy. I own these stocks for their Dividend value and for the DRIP capabilities they have. Hopefully the entire Global Monetary system is not imploding (if it is, then there is some serious problems ahead for all of us), and simply holding these stocks and slowly growing my holdings will turn out to be a good investment plan.

Are there other investment concepts I have? Not really, I am fairly conservative right now, I hold a fair amount of short term money (i.e. money I am going to need in the next 1-3 years) in Bonds, because I can’t afford to have that money shrink on me (i.e. RESP money and the like).

I also participate in my company’s matching DPSP plan and am in a small way part of the company stock purchase plan (but only in a very small way, because I think as the Canadian Capitalist has pointed out, I am already heavily invested in my company’s future).

What are Your Investment Plans?

I know some of my readers have some very solid investing plans, so please feel free to post comments about what you are doing in the area of investments and planning for your future. If you have articles that you have posted or you particularly like, please send them to me, or put them in your comments.

Construction Update

The update I did this weekend seems to have worked out fine, however, the blog seemed to disappear on Saturday for a while, so hopefully this is all fixed and up and running this week. Any problems please leave a comment or send me an e-mail.

Hope you are enjoying the day off, and have been to church too!

Our amigo over at the Dividend Guy has challenged financial bloggers to post their top investing mistakes, but my regular readers will remember, I have already bared my soul in this area, however, I report one of my most frank postings My Top 5 Investing Mistakes , for your reading pleasure:

Top 5 Investing Regrets In My Life

As part of a writing concept put forward over at Problogger I am making this posting about my Top 5 Investing Regrets over my lifetime. Thanks to Mrs. C8j for proof reading and suggesting content changes as well.

I offer this as a list for folks to learn from, and maybe not make the same mistakes that I have made.

5. Bought Whole Life Insurance

When I was just married and was quite naive when it came to investing, a gentleman from a very large insurance company sold me on the value of whole life insurance as an investment tool and as a way to protect my wife in case something goes wrong. Lots of flashy graphs showing how it becomes self-sustaining, and all of that stuff.

This was a mistake on my part, if I had bought term insurance at the time (I was in my 20’s) I should have paid somewhere around $10-15 per month but I was paying upwards of $50 to $75 a month (I don’t remember the exact amount it was way too much).

I thought this was investing, but I finally met someone who set me on the straight and narrow, and I cancelled the policy, but if I had invested the $40 or so extra I paid a month in an RRSP back then, I’d be much better off now. The good part of it is that I realized my mistake and corrected it, or I’d be looking at this “investment” wondering why I did this. Mistakes happen, but that is why pencils have erasers.

4. Not Understanding the Tools Available

Even after taking two business courses at University I forgot the tools that were available to me on my on line trading site. I monitored things closely but I did not realize the power of the tools that my on line site gave me:

• Bottom limit rules, which I could set up, to automatically sell my investment if they dropped below a certain price. This can limit losses and save you a basket of money.
• Buy orders to pick up a stock I am looking at, at the price that I wanted to buy it. I just bought with a market order, and it went in as soon as I pressed the “OK” button. If I’d looked at the stock and liked the stock, but thought it was overpriced, I could simply put in an order to buy when if it dropped to the price I wanted to purchase it at.

These two simple tools would have saved me a lot of money, if I’d thought a little bit about the tools that were available. Remember, a good tradesman uses their entire toolbox (not just the hammer).

3. Invested with my Heart and not my Brain

This comes back in my #1 mistake, but it’s important to have a Plan for your investments and have a set of rules to work by (and use the tools available to you). If you set down a clear set of rules about when you buy , and when you sell, then you are not relying on your instincts, and your decisions are easily understood.

It’s not hard to make up some simple rules about when you think you should buy a stock, and as soon as you do that rules for when you are going to sell it (because you eventually are going to do that). Some good rules for when to sell:

• Stock drops below a target price after a certain date (so you aren’t constantly buying and selling).
• Stock has not grown by more than 5% in the past year
• Dividend from the stock has either disappeared or has dropped below your goals for the stock
• Stock is now worth twice as much as when you bought it, and you want to remove your original investment, to protect your money.

These are some pretty simple rules, and you should think of your own, but they are something to think about.

2. Did not start an RRSP or Retirement Fund soon enough

This is a common mistake. Saving for my retirement, using sound investment rules, would have me much farther ahead in my life, I think. Set down a set of concrete goals for investing a certain amount of money every year, when you are much younger and you will not be playing the “catch up” game later in your life (as I and others are doing right now). Did I have the money back then? Well, maybe not, but even a little bit of money put away in your past makes your future that much better (it’s kind of like how to get better at playing Golf, go back in time and start playing earlier).

Time can be your best friend when it comes to investing, especially if your investments are growing over that time.

1. Did not sell out of High Tech in 2000

I have talked about this blunder before, and being a High Tech guy in the industry, I knew this was a bubble, yet, I “drank the Kool-aid” as well. I fell for the stories being told, and I rode that bomb all the way down to the ground. If I had set rules for investing, I would have at least bailed out and only got singed or lightly burnt, instead of completely incinerated the way my investments did. The funny thing is that my employers stock is the one I got burnt on the worst, and you would have thought I would have known better, but, then again in hindsight I can see what I should have done, but at the moment, it seemed like a good idea?

Take your losses, but also take your profits and move forward with them, don’t just leave your money lieing around, make it work for you.

I hope this helps you, dear reader, in your investing plans. Yet another fine, “do as I say, and not as I do” posting by the Big Cajun Man.

Carnivals

The Infamous Sing Horse parable was picked up by Money Hacks for the Carnival of Kids and Money March 21st edition.