Potholes, Tuition Increases, and #MoneyTalk

February’s new symbol in Ottawa is the Pothole. Due to the quick temperature swings we have been experiencing, the roads are slowly deteriorating and the size of the potholes cannot be discerned until you hit it. I think the big money will be in realignment, hub replacements and tire repair, because some of these pothole (or sinkholes) are quite deep.

Pot Holes are getting out of Control Here in Ottawa (Photo Courtesy CBC News)

My Alma Mater (the University of Waterloo) announced their new fees schedule, and tuition and all associated fees continue to track higher than inflation. Undergraduate tuition will rise by about 3% however, co-op fees will rise by 2.8%. If you are planning to help your kids with University Costs, you need to know that you should plan for these kind of  tuition increases every year. Don’t mean to pick on Yuppy U., but at least they publish this information.

RRSPs continue to be the non-topic for February, with few if any ads being seen. There are more ads for PayDay Loans and Short Term Loans than there are for RRSPs. The only thing people care about less is the Roll up the Rim at Timmy’s, what is going on Canada? Next thing I’ll hear is that a Canadian Tuxedo has gone out of fashion!

The CRTC has rejected a call for a public inquiry into aggressive tactics by the big Telcos and Telecomm companies? Must mean that the frequent visitors at my front door, on my phone and in my mailbox must be my imagination, well that puts my mind at ease. The Canadian Telcos have it too darn easy, and what we pay for Mobile Phone, Internet and Cable is just too damn high.

This Flu season does seem to be a nasty one, with a second round coming at us. I have noticed more folks sick at the office, and more folks coming to work to share their illness too. I got a flu shot for the first time this year, so far I don’t seem to have caught the Flu, but I guess I might be speaking prematurely?

Tangerine went a bit berserk a week or two ago and sent me countless tax forms in my emails (in both languages). I only have 1 account so not sure why I got that many emails, but got an email saying they knew they sent them, but no real explanation why.



My Recent Writings

I guess I got caught up in the Olympics and work, and ended up not writing anything new this week, but as I have mentioned, if you follow my twitter feed you will get a large dose of my archives as well. Remember that RRSP season can also be RRSP Re-Balancing season too.

Micro Blogging on Finance

The City of Hamilton is looking into limiting the number of PayDay loan places, and I am all for it. Our friend Doug Hoyes spoke, but this graphic really did hit me.

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RRSP, Lent, Happy Year of the Dog and #MoneyTalk

RRSP season is here, but there really doesn’t seem to be the hype of previous years. There seems to be an under-current about how the RRSP isn’t all that it is cracked up to be? I don’t understand this, yes it is a before tax savings plan, but it is a savings plan. The TFSA and RRSP both have a place in your savings plans, but remember that paying off debt is more important.

Year of the Dog

Me and my favorite Dog but he isn’t around to celebrate the year of the dog sadly.

Lent began on Wednesday, a new season to try to make some positive changes in your life. You don’t need to be religious or Christian to use this as a time for positive change, just decide to change.

Happy Year of the Dog , it is Chinese New Year today and it is the year of the Dog (specifically the year of the Earth Dog). Might be an omen for investing, as the market has been a bit of a bad dog so far this year. One Astrology site gives very good financial advice for the year of the Dog:

Financially take more precautions with your security and don’t overspend. Get a budget going so you can track where your money goes.

So you can’t argue with that, it’s science!

Tax season is on the go as well folks, in fact TurboTax announced they are certified by the CRA so you can use their application to submit your taxes on-line. Yes, some folks submit early, and get their money back, a better idea than procrastinating and not getting your return in on time.



My Recent Writings

Index Investing Downsides came out of an article I read using the Ottawa Public Library’s free app RBDigital (very useful and free magazines). The article kind of sat on both sides of the argument, but I am really not sold on the value espoused by active management funds and active trading. Yes, when the market tanks, the Index tanks, but do actively managed funds really save you?

Micro Blogging on Finance

If you are reading my RDSP and DTC posts you really need to follow Milburn Drysdale because his site has far better information on how to get all this done.

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Index Investing Downsides

Even though I do Index Investing (mostly) I do realize that with all investing plans there are downsides. I read an interesting article in the Kiplinger magazine (by Elizabeth Leary) that talked about the obvious Index Investing downside, you are investing in the Index. In these raucous days of market corrections, this is a concern to Index Investors

The best quote from the article is:

“By definition, index funds guarantee that you will suffer 100% of the next bear market’s decline,” — Jim Stack, president of InvesTech Research.

Given  you are an Index Investor, you already knew that, but for others the subtleties of the statement is lost. When the Indexes are in a Bull Market, you enjoy the low MER and growth, but when the Bear Market comes (and it has?) you will feel the brunt of the market drop. The argument that actively traded funds make are that they can react quicker to market corrections.

Index Investing

Both of those statements are true, but the losses you incur from Actively Traded funds MERs are usually not mentioned (especially during Bull Markets, so you lose some of your profits). Do all actively traded funds manage to stop-loss during market corrections? No (some do), and some might argue they are some of the market forces that cause the market corrections.

The other point folks forget is that the “Yard Stick” that most Index Funds use correct themselves as well. The S&P (and others) regularly update (add and drop) stocks from their Indexes, depending on what the Index is tracking. They don’t typically do this during a market correction, but the “bad apples” do eventually go away.

Ms. Leary points out that if you buy into the argument about Indexes and how active traders can be more nimble, you are assuming that your Mutual Fund manager are smart enough to deal with rapid market changes. This is a very big assumption to make, you must choose the wisely managed Active Trading Mutual Funds or risk being worse off than if you simply use well-defined indexes. The hard part is figuring out which funds are the wisely managed nimble ones.



My Opinion

I will stick with index investing for now. I tried to be an active investor myself and lost enough money to realize that Market Timing is not possible for an individual investor. Are there Actively Traded Mutual Funds that beat the market (i.e. out strip the Indexes)? Yes, however, it is interesting that it is rare to find any that can make that claim over 10 years.

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Roller Coaster Markets , Olympics and #Moneytalk

The markets went berserk, and now folks are attempting to explain, mansplain or rationalize what happened. Was it bitcoin? Was it American Inflation Concerns? Maybe I wasn’t wearing my lucky socks on Tuesday? Who knows but the mayhem continues. It is now being called a correction, so welcome to the end of the Bull Market of 2009.

Given this started with a 20 minute debacle, I doubt that many humans were involved in this, more like many trading algorithms saw their shadow and they all dumped, stock, causing the sudden deep drop. Another example of FinTech having the promise of doing things well, but has the downside of amplifying and accelerating bad things. Hopefully it will be a sobering event for Millenials who keep saying, “The Market never goes down”.

roller coaster markets

In Ottawa we learned that our LRT is delayed at least 6 months, if not longer. Given that the “Mass” Transit system in Ottawa has been a mess for 4 years, I guess another year of waiting won’t matter. I keep thinking that it shouldn’t take this long to put in a tram system, but I am not a “Mass Transit” expert either.

The Olympics have already started, and not just because Korea is so many hours ahead of us. Mixed Curling has started, and mixed team skating has started as well. Glad to see Curling made it into the Olympics. I hated Curling as a child, but that was because it interfered with watching the Bugs Bunny Road Runner hour. Go Olympics! Go Sports!

Remember it is Tax Season and RRSP season as well. I don’t espouse making those late RRSP additions for the sake of it, but remember you can use a TFSA, an RRSP, or an RESP to save for your future (or your kids’ future). My only argument against using those would be, you should pay your debts off first!



My Recent Writings

A while ago a loved one was duped into changing her Cable TV provider, but thanks to Ellen Roseman I was able to remedy the situation. Slamming Senior Citizens is a growth industry (given the baby boomers are getting older), and I am not happy about it. Don’t let these 21st Century Fuller Brush Salesfolk get fat on duping our seniors.

Micro Blogging on Finance

Crisis? What Crisis? The Markets went berserk for a while this week, but they are fine now? Maybe? Preet has some advice for you.

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Senior Citizen Slamming

For those of you unaware of the marketing concept of slamming, my definition is “tricking” your competition’s customer(s) into changing service, without them being aware they are doing it. The “slam” is done by someone cold calling on the phone or showing up at your door. The tactics are reminiscent of the Fuller Brush Sales techniques (i.e. do anything to get in the front door, and you will have a sale). The bigger problem is that the door-to-door reps are Senior Citizen Slamming (i.e. tricking the elderly into services they don’t need or want).

More and more seniors are being duped, by these new age technology press gangs, into services they may not want. Someone very close to me was switched from one Television “cable” provider to another, and I still don’t know what happened exactly. I have been able to fix the situation, thanks to some help from friends in well placed spaces, but this makes me concerned about what about other seniors?

News services are full of stories of seniors being duped into giving up money to hucksters, this must stop. The first comment I get that goes, “caveat emptor” gets a swift kick in the behind.

Seniors and Technology

At our Church we are trying to help seniors with technology, and a few of us get together on a Saturday morning and try to answer parishioners’ questions about technology. The technology problems that bring these seniors to our get together are usually:

  • A loved one has purchased technology for the senior, thinking it would be a good thing. The problem arises when the Senior isn’t given any instruction or help with the technology, so it usually ends up sitting on a shelf being unused.
  • The senior has been duped into purchasing a different type of technology by a sales
    person who claimed, “it works just like the other thing”. (no an Android phone and an iPhone are not the same to a Senior).
  • The senior inherited the technology from their spouse, who has since passed away.

Inevitably we try to help out as best we can, but it is infuriating to see how many Seniors are being tricked into buying expensive technologies that they are not able to use.

What To Do About Senior Slamming

I may sound dramatic, but I view slamming as senior abuse, but here are some simple things you can do to help your neighbours and loved ones in these situations:

  1. If you buy a Senior loved one technology (no matter how simple) sit with them until they feel comfortable using it. You simply deciding, ” … it is easy to use, they will figure it out …” is arrogance on your part. What would you do if someone gave you a mimeograph machine and told you to put out 100 leaflets with it? Never assume technology is obvious (to anyone). This mentoring may take a while, but it is important to the senior.
  2. If scum bag door to door folks trying to sell services are in your area, and you know you have older neighbours, warn them about these snake oil sales droids. Call your neighbour, or better still walk over to their place before the sales scum get there, and help your neighbours. For those who say my characterization of door to door folks as scumbags is harsh, you are wrong.If someone comes to my door to sell me a service they are either:
    • Viewing me as an idiot because I can’t figure out how to call to get their services
    • Viewing me as an easy mark.My only hope is that folks who do this kind of predatory sales trickery one day fall prey to similar tricks, or in the next life inhabit the same level of Dante’s Inferno reserved for Usurers (Circle 7, I believe)
  3. Follow up with the senior about any phone scams going on too. Remind them that no one from the CRA will ever call them and ask for money, and that if a “loved one” calls asking for money in a foreign country, they should be skeptical.

Help our seniors, I will be one soon, and so will you.

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