Canadian Personal Finance Blog

I have the privilege of hosting this week’s version of the Best of Money Carnival . What is this carnival about? I’m glad you asked:

The Best of Money Carnival features the ten best (in the opinion of the carnival host) money-related posts of the past two weeks — giving readers the best of the best in personal finance.

Now this differs from my Random Thoughts posting, because these posts have been sent in and entered for judging by me, so the content is a little different. There were many, many entries and it was hard to get the list down to a “Top 10” format, but I did (and my apologies to those who did  not get chosen, remember there is always next time).

Remember the Quicktax Give-away ends tomorrow night too!

Best of Money Carnival #39 for February 22nd, 2010

There were a lot of great articles posted this week, and it was hard for me to choose a winner and the 9 runner ups, but given I am the “decider” this week, here are the posts:

Entries

These posts were really good, but which one is the best this time?

Clayton presents Free credit report posted at Just Good Financial Advice.
Talks about how you can get Credit Reports (in the states) for free every year, with some info missing, and you know how I loves that free stuff!

Craig Ford presents The Infinite Advantages Of Paying Cash For A New Car posted at Money Help For Christians.
I must admit I do have  a vested interest in this one, because I just did pay cash for my “New to me” car.

Jeff Rose presents Warning Signs You Need to Fire Your Financial Advisor posted at Jeff Rose.
A very good list of points to look for to make sure your Financial Advisor is on the “up and up”, also if your Financial Advisor goes on better vacations than you every year, start wondering about that as well.

GLBL presents Money Saving Mondays: How to know if your loan should be refinanced posted at Gather Little by Little.
OK I am a sucker for any post with a racing car on it, but also some good points about when it might be a good idea to refinance your debt (no, it is not when your bank thinks it would be a good idea).

Jason @ Redeeming Riches presents 6 Ways To Find Free Money posted at Redeeming Riches.
Again, I am a sucker for free things, but this points out areas where you can keep from losing money (which is free money as well).

Wealth Pilgrim presents Why This Boyfriend Doesn?t Need A Valentines Day Gift Idea posted at Wealth Pilgrim: Money Management Advice, Financial Stress Management, & Resources.
The price of the gift is not what matters, it’s the reason for the gift that matters, and that message resonates with me a lot. I still think his girlfriend isn’t going to be very impressed by this, but that is just my opinion.

FIRE Finance presents Annual Fee Introduced for Citi Cash Returns Credit Card posted at FIRE Finance.
I love stories where people simply cancel credit cards or move banks, because the reason they were there changes. A sudden fee change is an excellent reason to change or get rid of a Credit Card!

2 Cents presents Taxes: The Missing Step posted at Balance Junkie.
A good list of things we Canadians should remember during tax time (yes it is Tax time both in Canada and the U.S., who says we don’t share crappy traditions?).

LeanLifeCoach presents Combat The Closing Techniques – The Puppy Dog Close posted at Eliminate The Muda!.
I read this and thought, “… wait a minute, I almost fell for this once as well!”, damn puppies! Another important sales technique to watch for, and be wary of.

The Investor presents Pros and cons of being wealthy posted at Monevator.
So this one has me scratching my head, but it is intriguing, so I include it for your perusal. Any article which says, “It ain’t easy being rich”, is bound to make you stop and think (and possibly cause you to have a violent reaction, which makes it a useful article).

The Winner!

Taxes: The Missing Step

Guess I am a sucker for a set of Canadian Tax tips, during Tax season, thanks to all who participated!

Attention Ottawa-area readers: CBC Ottawa is looking to talk to a regular investor between the ages of 25 and 50, who actively keeps an eye on the stock market and may have lost money during the economic downturn and are changing their investment strategy. If you are interested please contact Sannah Choi at 613-288-6471. You can also reach Sannah via e-mail at Sannah-(dot)-Choi-(at)-cbc-(dot)-ca.

RRSPs are Coming to Town

Yes it is that magical time of the year, where banks and institutions beg you to put more money into your RRSP, because it would be a good thing for you when you get older.

Show of hands: Who believes they do this because they are worried about your Golden Years? None? Not surprised.

Banks (and Insurance companies and whomever else sells Mutual Funds) want you to put money into your RRSP now, so that you go and buy their High MER Mutual funds (with the big fat entry fee, and exit fee as well).

How many times have I heard co-workers or friends say, “I just put my money in the Canadian Stock Fund and will move it later”. When I query about the MER for this Canadian Stock Fund usually the buyer is unaware, and what the front or back load is on these funds is a mystery as well. How many folks will move it from this fund at a later date? Don’t know, but my guess would be not many move the funds ever.

I don’t have time to think about this, is another argument folks have given me for buying some very dubious Mutual Funds, which may be true, but why did you spend your money is the answer I give. Would you buy a car, house or even major appliance without knowing that there were hidden fees to buy it and then a yearly “support” fee?

So I shouldn’t buy RRSPs now? No I didn’t write that either, but wherever you invest your money, be sure you understand the costs of investing in this financial device. This doesn’t mean you should blindly go out and buy ETF’s or Index Funds, if you don’t know where (or how) they invest.

Get educated is what I am saying before you go out and buy your RRSP. If you don’t have time to do it right now, then wait until you can figure it out.

Maybe I should just get a Financial Advisor?Caveat Emptor is my response to that idea. The past few months more and more stories are coming out about Financial Advisors, and how they work, so you need to find one that you trust, and ask them, How do you make money? especially if they are offering you their services for “free” (you would be surprised what free really costs). If the advisor suddenly tries to sell you whole life insurance, get up, get your coat and walk out without a single word, and don’t come back.

The hasty or rushed decisions I have made in my life (financially) are rarely the ones I look back on with fond recollections.

Top 10 lists

I was wandering through yet another Top 10 List, and it struck me just how many Top Ten lists there are out there (not to mention David Letterman’s output of a list every night), so here is:

Top 10 Top 10 Financial Lists

Here in no real order is my Top 10 list of Financial Top 10 Lists I have seen over the past little while:

• Top 10 Reasons why High Tech will recover (published in 2001).
• Top 10 Ponzi Schemes to invest in, and the questions to ask your Advisor about their latest Home acquisition.
• Top 10 Ethical Reasons for failed Bank CEO’s to get their bonuses
• Top 10 Ways to save money by not paying off your credit cards.
• Top 10 Most expensive bank service charges, and why we love them
• Top 10 Matresses to store your money sorted by level of comfort (assuming you are only using paper money, no loonies or twonies please).
• Top 10 Mutual Fund by MER (sorted by highest MER), and why they really are a good investment
• Top 10 ETFs that have nothing to do with any index and why you will outperform the market doing this
• Top 10 Reasons that Whole Life insurance policies are better than term policies.
• Top 10 Why 1,000,000 slugs love Vancouver’s weather (even in the winter) and why they are the only ones who can afford to live there

Did I miss any? (yes this is what happens when I get stuck in long meetings and my mind wanders)

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:

A very busy weekend for all of us and for me in particular:

1. The Winter Olympics started on Friday night, interesting to see the “Winter” Olympics in a city with no snow and it is 10 Celsius, oh well.
2. Valentine’s Day, but we have talked about it’s significance to Personal Finance
3. The Chinese Year of the Tiger began, and my question is, is it a tradition with the Chinese New Year to make resolutions? Happy New Year!
4. My parents celebrated their 58th wedding anniversary, which is the most significant part of the weekend.

In the coming week there will be lots more interesting things happening:

• It is “Family Day” in Ontario and lots of folks have today off, I don’t being a Federal Employee.
• Lent begins on Wednesday, an excellent time to start a new Personal Finance adventure.
• Stats Canada announces their Inflation numbers for January on Thursday.
• Shrove Tuesday means you should also get out and have some pancakes too!
• RRSP and Tax Season continues on

Tax Season

I await the delivery of most of the documentation I need to complete my taxes. I know that this year I will actually be getting tax back (at least that is my guess, I might be wrong), so I am eager to get my taxes submitted (electronically). For those who have RRSP room, or extra cash, they should be weighing the decision about whether to put their money in a TFSA or into an RRSP (or a spousal RRSP), which makes this season stressful as well.

There are some excellent articles out there comparing and contrasting whether you should be using an RRSP for your long term savings goals or a TFSA, and I encourage you to read other financial blogs and articles to figure out what decision is best for you (my guess is this is a personal decision, and there is no real “cut and dry” decision point that everyone can use).

Your T-4’s should arrive some time soon, but make sure you know what forms you will need for your taxes as well.

The Go Go 90’s

Frontline on PBS has an excellent video about someone who tried to cry Wolf, before the great melt-down. The lady who said Greenspan was wrong.

As my regular readers see, sometimes my mind wanders to weird places and I must admit I am not sure where most of this came from. On Sunday night at 5:00 PM I had nothing to write for Monday, but looked at the GPS I had just received from Christmas, started writing about a Financial GPS and from their we got to Financial Shock Collars and here we are Friday with a whole week of very odd postings by me.

I empathize with those in dire financial quandaries, but in some cases the Financial Shock Collar may be the only answer. As Mrs. C8j pointed out in a comment she made, a lot of issues with money in couples comes from lack of communication, so maybe it’s time to start talking to your spouse about money? Just an idea.

Random Shocking Thoughts

This week other Personal Finance Bloggers found more solid issues to write about, and some are well worth checking out in this weeks Random Thoughts:

• Given the C.D. Howe institute put out a very good e-brief Saver’s Choice: Comparing the Marginal Effetive Tax Burdens which has caused many bloggers to discuss this interesting point.
• Michael James spoke of this in his post RRSP versus TFSA where he discusses various scenarios about putting your money in either savings vehicle.
• The Canadian Capitalist also posted talking about the C.D. Howe’s take on TFSA versus RRSP where he talks about the Howe findings specifically.
• Canadian Financial DIY also comments on the Howe findings in New Data on TFSA vs RRSP and Canada’s Rube Goldberg Tax System.
• On a related topic, Larry MacDonald talks about RRSPs and business owners and how business owners might want to think about setting up RRSPs for their retirement, or perhaps even TFSAs?
• Preet wraps up his expose with Severing the Link Between Price and Weight Part IV.
• Million Dollar Journey talks about where they might get the money to put into their RRSP or TFSA with a the post How I saved 70% on my grocery bill, remember 50% off meat should be eaten the day you buy it too!
• Gail Vaz-Oxlade writes an important spiritual posting about Keeping Focus, which is important in this day and age, don’t get distracted from your goals.
• Let’s stop the madness is a very good rant by Ellen Roseman about the dirty tricks being played on some consumers, read this and be warned!
• I hadn’t noticed but Dave over a Investing Intelligently Got Laid Off, now it looks like he has found something, but does bring home that the alleged “recovery” may not be fully entrenched yet!

Enjoy your weekend, and remember, if you think you need a Financial Shock Collar, please get some help!

On Monday, Labor numbers which are out today!