Canadian Personal Finance Blog

Money is starting to tighten up with the Bank of Canada raising their key overnight rate by ¼ percent to 1.5%, which is great news because that mean savings accounts will go up as well? Sarcasm aside all major credit levels with most banks have gone up a corresponding ¼ %, but there has been no word about Savings account rates going up (and don’t hold your breath about that either).

Personal Financial Reader, I presume?

If this increase has you worried, you really should be paying down your debt, or you need to figure out how to get out of this mess. In earlier years, the Bank of Canada has raised  rates by 1 % or higher, what will happen when these rate levels become a reality? We have a US  President hell-bent on starting a trade war with everyone, will those tariffs cause an inflationary jump? Very possible, is what the “Big C8j Magic Financial 8-Ball” answers.

If you owe $200,000.00 you now owe $500 more for the next 12 months (about), so let’s just say you owe $40 more a month. If the interest rate had gone up 1 %, you’d owe (about) $2,000 more per year or about $160 more a month. Now that is assume a single compounding and simple interest so the real calculations might be higher.

The new Ontario Government is doing what they promised they would do (and have done in the past), yet there is a howl of disbelief. Who did you people think you were electing is my only question?

Would you walk away from a $6 Million a year job, with no severance? Allegedly that is what happened to the now former head of Hydro One (in Ontario). He is getting $400,000 as payout in lieu of post-retirement benefits and allowances, but his agreement states he should have received $10.7 Million if he was fired by the board, wonder what happened there? Glad to see that he won’t be leaving penniless he will get $9 Million in stock options paid out.

Bitcoin the cryptoCurrency (note not cryptolnvestment) continues its downward drop in value. Gone are the days of $20,000 per coin (US), it is now down to around $6200 (US). Will it go back up again? Maybe, but I wouldn’t put any money into it, unless I needed to use it like currency (i.e. to buy something). Will cryptocurrency speculation move into the realm of FOREX speculation? One can only guess.

It is Friday the 13th, time to Celebrate King Friday’s birthday!

My Recent Writings

FUD is a powerful tool used by politicians and other operatives, but FUD Financial Messages is rampant. The entire Fear of Missing Out story is a simple part of the FUD. You need to be confident when you make a decision, don’t do it out of fear.

I must be getting soft because I allowed yet another Guest Post with Everything You Wanted to Know About Credit (But Were Petrified to Ask) by Sean Cooper. Do you know about Credit? Are you confident you know what you need to know?

Bankruptcies Up

Doug Hoyes gives us a worrisome statistic pointing out that bankruptcies are rising in Ontario. With higher interest rates coming, I doubt this will get better before it gets worse.

JUST RELEASED:
Oh crap.
For the first time in six months, the insolvency rate in Ontario increased, by a huge 5.2%.
Biggest monthly year-over-year increase since November 2016.
A blip, or the start of a trend?https://t.co/S77AW9ccSb pic.twitter.com/87DuemJJ1D

— Doug Hoyes (@doughoyes) July 3, 2018

🎱 For more personal finance stories click here 🎱

What is FUD Financial messages? FUD is a technical term from the world of politics where you try to create Fear, Uncertainty and Doubt with your message. FUD is usually a strategy to influence perception by spreading negative and dubious or false information leading to fear-mongering and concerns by the public. Naturally, you do this to create an advantage for yourself, or cast aspersions on an opponent.

It is easy to see the power of FUD in the last few elections, but politics is not the only arena where FUD works well.

FUD financial messages are out there. Usually to cause you to wonder whether you are using the right bank, insurance company or you are missing out on a great deal. All Fear of Missing Out (FOMO) messages are in this genre.

Some might argue this blog is a FUD financial message, however, getting out of debt is not really FUD in my book.

The message continues to be confusing to most folks. The Truth in finances is not clear to many folks (if any), and there are few places where consumers can get clear and truthful financial information.

Investing FUD

I find the entire investment industry seems to be a FUD Factory.

• Cryptocurrency seems to be the leader in FUD. You will miss out on untold riches unless you buy one of the over 200 cryptocurrencies (even though you have no idea what it is).
• In Canada there is tons of FUD swirling around legalized Marijuana, even though most of the companies seem to spend a great deal more than they are making currently.
• Actively managed funds want you to be unsure that you are not making the huge growth they can offer, however, Index Funds point out that actively managed funds can’t keep up their claims (and thus are part of the financial FUD game).

Get the tools you need to comprehend truth from fear-mongering, and create Financial Firewalls to filter out the disinformation.

Remember that sometimes FUD is a good thing, and the sales person you are dealing with is trying to allay your personal FUD, with any lie that will cause you to buy their product.

Another Guest Post from Sean Cooper. Yeh, I am getting kind of slack on my rules.

Unless you’re filthy rich and you can afford to buy your home in cash, maintaining a good credit score is important. Not only does your credit score help you qualify for a mortgage, it can help you obtain the best mortgage rate, saving you thousands of dollars in interest over the life of your mortgage. If your credit score isn’t the greatest, you could pay a higher mortgage rate, or your application could be denied altogether. Not only does a poor credit score make it harder to borrow money, you could have a tough time finding a rental unit, since landlords often look at credit.

Credit has three parts: credit history, credit report and credit score. Your credit history is a lot like your resumé. It’s a summary of any time you’ve borrowed money. From your car loan to that $1,000 cell-phone bill you’d like to forget, your credit history is a tell-all of any time you’ve been extended credit. Your credit report is like an annual performance review of your credit history. This is where the student loan you failed to pay back in college can come back to haunt you.

Last but not least is your credit score. Your credit score is the magic number that lenders care so much about. You credit score is based on your credit history. This number helps lenders decide whether to approve your mortgage. The higher your credit score, the more favourable the mortgage terms will be. Credit scores typically fall somewhere between 300 and 900.

Credit scores don’t just come out of thin air. Credit reporting agencies keep track of your credit history and credit score. You can obtain a copy of your credit report for free, so take advantage of it. The easiest and fastest way is to use Equifax and TransUnion’s interactive phone services. You can also download and complete forms from the Equifax and TransUnion websites. Best of all, it won’t lower your credit score to check. Request a copy of your credit report and find out what your credit score is at least a year ahead of when you’re thinking of buying a home, to avoid any nasty surprises. (If your credit score is poor, you need time to work on improving it. This can take a year or more because of reporting lags.) If you find any inaccuracies or mistakes, get them fixed as soon as possible.

Understanding Your Credit Score

Five main factors affect your credit score. It’s important to understand each of them to help maximize it.

Click here to see those important factors !

With the new Canadian cannabis laws coming into play (October 17^th) it struck me as an excellent opportunity for Canada to enter the world of Ganja Tourism. We must remember that you may only smoke in your home (or a friend’s home), and given that most hotels have a strict No Smoking rule, where could these tourists imbibe ? I think this is a huge opportunity for AirBnB to create a Ganja Tourism section. The guests can buy their legal ganja, and then enjoy it in their friends home. We shall see whether this idea catches on.

I have been busy figuring out how to smuggle more shoes across the border, but #Moneytalk returns this week. Sneaker Smuggling is evidently something else we dastardly Canadians do to our friends down south. I must admit I am guilty of sneaker smuggling about 10 years ago I was on a business trip and bought myself a new pair of shoes and forgot to declare them when I returned. I am thinking of branching out and becoming a Weed and Feed smuggler (the weeds in my front lawn are winning the battle and I can’t buy the good stuff in Canada any more).

The 21^st was the longest day of the year in the Norther Hemisphere, and thus summer begins! Yes the year is about half over, time to start planning for Christmas.

The National Energy Board published Which cities have the highest solar potential in Canada? Where is the best place in Canada to have Solar Power? Regina, of course! Ottawa is better than Montreal and Ottawa (by a small Amount). Surprisingly Yellowknife is up there on the list, and not so surprising St. John’s NFLD is way down there on the list. Might be good to turn all of Saskatchewan into a Solar Array?

My Recent Writings

The next time someone asks which is the Best ETF, I think I have an answer

It has been a while since I wrote one of these so here is the long list of the topics I have hit since my last #Moneytalk.

Risk Profiles and E-series Orders Rejected shows that no matter how optimistic I get about TD Mutual Funds, I end up being wrong. My daughter is still working to clear up the no you can’t have E-series funds fiasco that was set up.

I do enjoy Doug Hoyes’ podcast (remember I was even a guest on it), but I also enjoyed his audiobook as well, and I reviewed it in, Straight Talk on Your Money. Well worth listening to and buying the book too. Hopefully a sobering set of stories for those that are sure they have their financial world figured out.

I actually had a Guest Post but by a friend of the site, Sean Cooper (who I still hate). Qualifying for a Mortgage: The 4 Factors Lenders Consider (and WHY!) is an essay on how to get a mortgage, worth having a look at.

Phishing Phor Phun and Prophit, is a cross-post from my technology site telling you just how vulnerable you are to a Phishing attack. The bad folks are getting quite good at catching you out.

My 5 Best Investments is really just a proud Poppa boasting about his kids, but also the fact that I was smart enough to invest in their educations.

Micro Blogging for Motivation

When was the last time you changed your banking password? You might want to check this one out to figure out what you should change it to?

Our ‘Guidance for Securing Passwords’ provides system designers, operators and end users practical guidance on the design, implementation and use of password-based authentication systems.

Learn more: https://t.co/Sqo2aeF7uM pic.twitter.com/JklsIcVp9F

— CSE 🍁 (@cse_cst) May 30, 2018

💻 If you want more great financial stories click here 💻