Canadian Personal Finance Blog

One of my daughters is starting to work and has asked me questions about what she should be doing with her money. She is lucky, her student debt is not very high and she has very few expenses, but she has a credit card (more on that later). We started with where she should put her excess savings (but yes she is paying down her student debt too). We decided she should open a TFSA (I will write more about that later).

During these discussions, she asked me, “Should I put more money in my TFSA or pay off my credit card balance?”. Luckily she asked me that in an e-mail, and I was able to delete the, “WHAT ARE YOU INSANE? DON’T YOU READ MY BLOG?!?“, e-mail and simply responded, “Pay off your credit cards balance every month, never carry a balance”.

My daughter took my advice to heart, and she paid off her credit card.

Wait a minute, when did my daughter get a credit card? She never told me she did, maybe she got one when she started working? I was confused.

We started discussing her TFSA again, and she was looking at her on-line banking page, and I asked her, “When did you get a credit card?”. She pointed to her on-line banking, and said, “… there it is…”, so she seemed to have a credit card.

I was still confused, so I asked, “When did you apply for a credit card?”. That was the right question to ask.

As background, about 3 years ago, I decided that as a safety measure, I would give my daughters  credit cards from my account. This was when most of them were in school, so it was very much an emergencies only card.

My daughter’s answer to my question was, “I don’t know, I never applied for a card”, and finally everything fit into place. TD had put my credit card on her on-line banking (using her card number). What is interesting is that she sees the entire balance on the card, and she paid it all off (taking my advice).

In the end she had paid off a couple of Uber trips that one of her other sisters had taken, but luckily I had no charges on there.

My only concern is why did TD put my credit card on her on-line banking? My guess is because it is in her name, so it is actually a group credit card, but I am not sure.

At the start of the year I actually published a Stock Picking post about what to buy this year. It was mostly me being snarky about stock picking done by other bloggers, but I started to think I should continue to eat my own dog food, and figure out what my stock picks did, in terms of return.

Here is where my stock picking stands now:

Losing about 1.4% is nothing to brag about, but, given the volatility of the market it isn’t too bad either. My guess is this could be a volatile year. We shall see what the summer does my stock picking prowess.

It is Friday the 13^th today, it must be true that someone has done something odd financially today, because of this date. If you have, shame on you!

I was intrigued by a statement I saw on Reddit, that the RBC will no longer allow you to buy Crypto Currency with their credit cards. The statement doesn’t give a reason, and simply does the Canadian thing, and apologizes for the inconvenience. I am a big fan of brevity, but that is astoundingly terse for that kind of decision. My guess is they just don’t trust the Crypto-currency marketplaces enough to allow their credit vehicles to be used there. If I can’t use credit cards to buy cryptocurrency how do I pay for it? Gold (Au)? Cash? Other cryptocurrencies? Intriguing.

In other financial news  I threw up in my mouth when I read Mackenzie fined for excessive promotional spending. The money spent is your Management Fees, and that is where that extra money goes? I still feel nauseous .  Your retirement money is giving folks iPads? Wow.

My Recent Writings

What is a Serial Refinancer ? You know someone like this, they keep building up credit card debt, then either getting consolidation loans or adding it to their HELOC or worse their mortgage. This is serial murder for your finances.

I don’t think folks understand that with investing, when you sell is more important than what you buy. I attempt to elaborate on that with 2 Key Investment Strategies. Being a Millionaire “on paper” means nothing, until you have the money in your hands, you are not a millionaire.

Micro Blogging on Finance

More women are filing for bankruptcy, is this a win for women? Truth of the matter is, I don’t think so, but there is a podcast to talk about that one this weekend.

Our #bankruptcy study revealed more women are filing insolvency. To discuss why this is happening, we have guests @GailVazOxlade, @squawkfox, and @alison_petrie3 w/ co-host @sharonhoyes on this Saturday's podcast! Subscribe so you don't miss it: https://t.co/WlupwSpVii

— Hoyes Michalos (@HoyesMichalos) April 5, 2018

💻 If you want more great financial stories click here 💻

There are two key investment strategies that all folks need to have, that are obvious, but rarely ever spoken about. The second strategy is the one that most folks seem to forget about.

A Buy Strategy

Why are you buying? What is the reason you are investing? Is this for a retirement fund, emergency fund, or just savings in your TFSA ? You need to answer that question and that is the cornerstone of your buy strategy.

When are you going to buy can be important, but market timing isn’t going to work out. When are you going to start investing is more important in your buy strategy.

What are you going to buy? Stocks, mutual funds, index funds, ETFs, and GICs are just some of the investment vehicles you can use to invest your money. Depending on what you buy, you will then need to think about how often and when you buy.

How much are you going to buy? How much money do you have to invest? Another important aspect of your buy strategy.

The other aspect of your key investment strategies is one that far too many folks don’t have.

A Sell Strategy

When are you going to sell this investment? I have asked many folks that question, and have received some very vague responses. Unless you are buying something designed to be held forever, you are going to be selling this investment, so you had better have an idea of when you want to sell.

Are you going to ever sell? If you are buying a dividend paying investment or something that pays out regular interest payments, you are going to sell this investment some time. Why you are investing will generally be a key part of the sell decision. If this is for a retirement savings account, are you going to worry about selling before you retire?

What is the lowest price before you sell? What is the max price before you sell? These are the questions to ask if this is a short-term or risky investment. If you have a short-term investment goal, and it is reached, you are going to want to sell. If the investment suddenly goes in the tank what is the lowest price you are willing to hold onto the investment? Wish I’d had that with Nortel, didn’t and I held it until it was worth nothing (well 100 shares of it).

What is the Key Investment Strategy? SELL!

Your Key Investment Strategy is your Sell Strategy

It is relatively simple to get into investing, but if you don’t have a sell strategy, you will end up making uninformed and quick decisions, which is not in your best interests. Your key investment strategy is your Sell strategy.

I knew many millionaires “on paper” in my life, but not many of them are still millionaires today, because they didn’t know when to sell. All a millionaire on paper is, is someone who can’t figure out when to sell, until you execute the sell to give you the millions, you are not a millionaire.

Serial refinancers is a term I heard Scott Terrio use on the Debt Free in 30 podcast, and it really resonated with me.

Much like serial murderers, serial refinancers just keep going back to the well and refinancing their debts with consolidation loans or similar debt vehicles. Much like serial murder (or murder in general) this is very bad! Consolidation or refinancing of a debt is supposed to be something you do once (if ever), not every 2 years.

A good point that Mr. Terrio makes is that with the new credit rules in place, you are more likely to get turned down for a consolidation loan. Yes, credit is still loose, but the rules are tightening things up. Mr. Hoyes and Mr. Terrio are not seeing more folks coming into their offices with these problems, but it is still early. The new financing rules only came into play at the start of the year.

What will happen when this tighter credit takes hold? More folks going to Payday loan and alternate finance firms, most likely, which will simply accelerate the process of insolvency, or the personal finance death-spiral of serial refinancing.

Refinancing is Bad?

Yes, refinancing debt is bad in business and it is bad in your financial life as well. If you are carrying a huge credit card debt, refinancing looks like a life-line. It may be a life-line but if you are not going to delete those credit cards from your financial life, you are setting yourself up to fail.

I know serial refinancers, I have tried to point out the folly of their ways. I have not succeeded in most cases, but I can see the path (i.e. financial death spiral) they will follow, so I am keeping my favorite bankruptcy trustee’s number around in case.