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In the early days, I wrote a lot of scolding pieces about spending money foolishly. I cringe reading some of these, but here is something I am still reasonably passionate about. Risk and gambling may be part of financial planning in a small way, but Casinos and buying lottery tickets should not. I wrote this back in 2008.

My wife told me about a new episode of “‘Til Debt Do Us Part” which Gail Vaz-Oxlade hosts, where one of the spouse’s financial tactics to paying off their debt was to go to the Casino and try to make some extra cash (no she wasn’t working there, she was gambling). Other folks I know buy lottery tickets or are part of “groups” buying lottery tickets weekly, hoping to hit it big so that they can retire.

Allow me to be clear on this one, neither of these “Financial Plansare efficacious, nor are they prudent.  My opinion is that if you have reached a point in your life where you feel you must gamble to catch up on your financial obligations, you are in dire need of serious help from some professional.

The Gambling Recovery Plan

If the Canadian Government came up with a plan to take $2B and go to one of the larger casinos in Las Vegas and attempt to double it using a “gambling system,” there would be an armed Coup D’Etat. However, if we hear of friends or family going to the Casino, how many of us stop them? Gambling your money on a hot stock tip, a game of no-limit Texas Hold’em or a pyramid scheme is not the way to recover from a financial setback.

It usually takes time to get yourself into a financial bind, and thus it will take time to get yourself out of the financial hole you are in. There are no quick fixes to financial problems, and if there are, usually you’ll be back in the same financial bind quickly if there was a quick fix (i.e. windfall money appears which helps you out, but you don’t fix the cause of the problem).

The only Gambling Recovery Plan I could think that might be a success is if you are a gambler and you have been blowing your money at the Casino. You decide not to go to the Casino anymore, that plan will succeed (as long as you don’t find somewhere else to squander your money).

The Buying Lottery Tickets Retirement Plan

Having worked in the lottery business many years ago, there are three groups of people who make money on the lottery:

  1. The person that runs the lottery makes the most money, hands down. Governments, however, have made it illegal to run your own lottery, so you can’t make money on lotteries this way.
  2. Printing and distributing lottery tickets is a fairly profitable business (look at Canadian Bank Note, or British American Bank note’s financials in this area), but it is a very small percentage compared to how much the lottery commission makes on a Lottery.
  3. Selling lottery tickets makes stores money, and they get to share in winnings of their customers too, but the sellers don’t make as much as the printers do

Note there is no mention on that list of BUYING lottery tickets as being a way to make money on lotteries.

I realize that most readers of this article know someone (a friend of a friend, or something like that) that Won the Big One in the lottery. That is what the Lottery Commission wants you to remember. You don’t realize that you most likely know of someone who was bitten by a shark or hit by lightning (both more likely occurrences than lottery winning).

If you are spending money on Lottery tickets, figure out how much you are paying yearly. Multiply that amount by 20, and that is the money you’d have in hand (plus interest) if you didn’t buy the lottery tickets (or the Cigarettes, or the Coffee, etc., etc.). Keep that in mind the next time you want to buy an “Early Retirement” lottery ticket.

Do you want a winning bet? Put that money in an RRSP or an RESP, or give it to a Charity, not buying lottery tickets.

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If You Hear Hoof Beats

I was discussing with someone about misinterpreting data on the weekend and remembered one of my favourite phrases for this type of activity:

If you hear hoof beats, don’t automatically think Zebras

Badly paraphrasing Occam’s Razor

I believe I first heard this one on CSI, but I do like the sentiment. I view it as a result of Occam’s Razor, but I like the idea of simplicity. Complex ideas and theories always worry me, given I am a superficial thinker.

The simple answers in many areas are the correct answers (especially in personal finance). 

Whose hoof beats are these?

Some of the areas where I have had people hear Zebras when they should have thought horses:

Thundering Hoofs
Thundering Hoofs
  • I am in debt because of the credit crunch. No, you are in debt because you spent more than you made, and you had to borrow to deal with this spending. For some it is borrowing money to buy a house, others borrowed money for a car but the majority, is borrowing money to pay for debts they didn’t need to incur. That ain’t no Zebra!
  • It’s too complicated to stop using Credit Cards. This is a rationalization from folks who really are saying, “I like using credit cards and don’t want to give up my current lifestyle“. You can stop using your credit card tomorrow, put them in the freezer in 2 lbs. of hamburger, and they are gone. That wasn’t a buffalo, just a horse.
  • A budget is too complicated to figure out. No, that is the statement, “I don’t want to use a budget because I will have to give up my current lifestyle” (again), a budget can be very simple and living to it can be simple, don’t make it a complicated thing, or you will fail. That wasn’t a gazelle, just a horse.
  • I can’t save money given my current salary. How many times have all of us said this every time we get a raise? I have made that rationalization myself, you can save it just might be hard to do, that’s all. Wasn’t a wildebeest either, just a horse again.

Don’t make financial planning, personal finance or budgeting more complicated. Please keep it simple and listen for horses, not Zebras.

Written back in 2007 and 2009 on the same hoofy topic.

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Inflation 4.4% September 2021

For those that have not followed me since 2005, allow me to say, I told them so. Back in 2009, I warned Inflation was coming with all this stimulation, and here it is (in 2021).

OK, so I am very much the Blogger who Cried Wolf on Inflation. This does seem to be the beginning of something, maybe even an Inflationary spiral.

Stats Canada thinks:

Prices rose year over year in every major component in September, with transportation prices (+9.1%) contributing the most to the all-items increase. Higher shelter (+4.8%) and food prices (+3.9%) also contributed to the growth in the all-items CPI for September.

From Consumer Price Index, September 2021

This is the highest rate since before I started commenting in 2005? Sounds like this is no longer a bump in the road, it might be a more elongated period of price increases. The Bank of Canada thinks this is going to last more than just a couple of months. Their statement about Interest rates is they may be going up sooner than expected. Interest rates are their only tool to slow inflation (aside from not printing too much money).

In reaction, the Bank of Canada announced the end of their Quantitative Easing program too.

… With the economy once again growing robustly, Governing Council judged that QE is no longer needed. This means we will stop growing our holdings of Government of Canada bonds….

Tiff Macklem – Governor Ottawa, Ontario October 27, 2021

Their commentary about inflation is more telling.

In Canada, inflation is currently running at about 4½ percent. We now expect it will rise to close to 5 percent by the end of this year, before coming back down to around the 2 percent target by the end of next year.

Tiff Macklem – Governor Ottawa, Ontario October 27, 2021
Microsoft Canada

Additional Reads From Stats Canada

Previous Rants About Inflation

And that is just scratching the surface.

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Dude, Where are My Bills?

Went to pay my bills on EasyLine this morning and found the following on my Pay Bills page:

Dude, where are my bills?

Normally I would see about 35 different bills that I could pay. Today I wanted to pay my Bell or Telus bills, but they are not to be found.

Contacted TD via Twitter, who then told me to use their antiquated Secure Message system in EasyLine.

Never thought my list of bill payments was something I should keep a backup of ?

After checking my Phone TD Easyline App, more confusion. There seems to be a list of bills there, but it is very old and inaccurate? This one is an interesting one.

Pay My Bills

Dude, just want to pay bills! Where Dude, is TD.

Not Just Me?

Luckily Resolved

Luckily, the problem was resolved, and my bill list seems to have returned. I will make sure I have a backup copy.

Official TD Statement

We have been notified of an intermittent issue with some customer’s Bill Payees and Bill Payment function on EasyWeb. Please rest assured this issue has been escalated with high priority and our partners are working hard to resolve.

Message from TD Support

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Adieu TD Mutual Fund Account

Thanks to TD’s new stance on using TD E-series Index Funds in TD Mutual Funds account, it is goodbye. I still have two accounts open, and they are both going to move somewhere else.

Estimated reading time: 2 minutes

A while ago, I received a cryptic letter about “changes to my TD Mutual Fund Account.” I could only find out by going into the bank and talking to a TD investing person. Through some “internet research,” I suspected it had to do with TD E-series Index funds. This research included:

My suspicions were confirmed. I spoke to a rep with whom I had to reschedule my appointment. She confirmed with me the E-series Index Funds would no longer be “tradeable” in these accounts. This means:

  1. I could not buy any more of the TD E-series Index Funds in those accounts
  2. I cannot re-balance those accounts, by moving between these funds
  3. It would not be possible to do this at the Bank or Online either. Why online it is removed is bewildering.

So now I am moving my two accounts to TD Directline. I have had TD Mutual Fund accounts (and CT Mutual Fund accounts) for more than 27 years. Maybe I should have done this sooner.

TD E-series Done?

No, I can continue to buy them in my TD Directline accounts. There have always been issues dealing with E-series funds in my TD Mutual Fund Accounts. The Bank investment advisors make little or nothing from them, so there was little motivation to help.

I have also read about other, even lower MER ETFs (e.g. HXT, VCN, ZCN, XIC). I can also use them in a TD Directline account.

Other TD E-series Funds Stories

Questrade

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