Canadian Personal Finance Blog

This week more fun and excitement on the stock markets and in the world of financial bail outs as well.

Random Thoughts for the Middle of Advent

This week a few very interesting posts:

• I have known Michael James for over 10 years, yet I did not know that he and his wife had Separate Bank Accounts, interesting, you learn something new on the blogosphere every day. I don’t think I’d be telling a secret if I divulged they do not have separate beds.
• All About Nortel echoed the sentiments from the Wall Street Journal about how Nortel was getting legal opinions about their possible bankruptcy. All I can say is I hope they wait until I get all MY money out of them. 
• Wise Bread asks the satirical question Is the Courtesy Flush Dead, but then points out the amount of water wasted by North Americans and their toilets, interesting plot twist.
• Stats Canada put out a worrying post about the very slow increase in the amount of money in Privately Held Pension plans. Given the market volatility is NOT reflected in these numbers yet, it does not bode well for those in these plans.
• Riscaro Insider talked about Fearing the Wrong Risks (with examples), which has some very interesting examples to think about.
• That One Caveman wrote about a comment he received and stated All Life’s Choices have Consequences, but it is interesting to read about this young lady’s quandary.
• Free Money Finance points out that Even the Rich Need Pawn Shops these days. Who stars at the Beverly Hills Pawn Shop? Eddie Murphy?
• Ellen Roseman asked the question, is your New Cellphone or PDA not Working? She wants to know.
• Larry MacDonald wrote about the Myth of Plunging Canadian House Prices, and how that is really not the case in Canada, at least.
• No Debt Plan welcomes us to Excusoria the Land of Incomplete Tasks, I’d like to point out that I am Citizen #1 in Excusoria, thank you.

Advent Financial Calendar Box Day 13

You open today’s box and there is a tiny new pair of shoes, which of course in Canada means a Budget. Advent is an excellent time to think about writing a budget for next year and thus start your financial plan for next year. In some homes Budget is a dirty word, but it is an essential tool if you feel that your spending is out of control, even if you don’t keep the budget exactly, it is still a way to measure your success financially.

Budget in Advent for the New Year.

So one of the major interesting issues financially that I am facing is whether to opt out of my former employers pension plan and take a lump sum payment (which will mostly be transferred to a Locked In Retirement Account (LIRA)) or leave the money in the employers pension plan, and draw from it at either age 55 (at an actuarially lowered rate) or 65.

As I have said previously I will be opting out, as I have very little confidence the money will be available when I get to retiring age, and now I read in the Globe and Mail the following (by Derek DeCloet):

The bad news is that at the start of this year, Nortel’s plans were already short by $1.2-billion (U.S.). The worse news is that 53 per cent of the assets were in stocks, which have been annihilated. So the pension hole has become a cavern – one that will have to be filled with cash that the distressed company would rather use for other things. Like surviving, for instance.

I read this and am not shocked, but I am worried, as I was supposed to receive information within 30 days of my severance about my pension options, however, I have not received anything in the mail as of yet, and I now wonder what new “wrinkles” may arrive in terms of this money.

My view is that this money is mine, and I have earned it over the 20+ years I worked at my former employer, and given they “capped” this pension as of January 1 2007, leaving my money there makes little or no sense to me. If anyone cares to comment or disagree, please feel free I am open to discussion on this issue.

U.S. Elections Tuesday

As the Daily Show’s reporter is fond of saying, “Can we just FINISH THIS NOW!”. I can barely stand Canadian Elections and the campaign is typically only about 6 weeks, how our American Cousins can stand the two years of grind is beyond me. 

Permit me to make the following morbid observation:

• The chance of John McCain dieing each year from his skin cancer is put at around 6%, so cumulatively it is much higher that he will die before the end of his first term as President.
• Senator Obama’s life has already been threatened and as Chris Rock has pointed out, there is gonna be some nut wanting to knock him off, just because of his race.

Errant Wallaby and Personal Finance

I have now been taught how to catch a run away wallaby, evidently you throw a towel over it, hold it by it’s tail (don’t let go) and put it in a bag, and call the Zoo in Kemptville it escaped from. 

What the heck does this have to do with Personal Finance? Be prepared! If I see a wallaby in my backyard I’ll know what to do, just like in Financial Planning, in case of emergencies make sure you have a plan. (Now I sound like Marlin Perkins from Mutual of Omaha’s Wild Kingdom).