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Random Thoughts: Clean Up That Garbage

It seems the City of Toronto may return to its normal smell soon, with the garbage clean up beginning today, thanks to the resolution of the strike which has turned parking lots and outdoor rinks into temporary garbage dumps. I am really astounded at how long this strike was allowed to run, without any intervention by the Provincial government. At the least this was a health issue, why was it allowed to take 5 weeks to get resolved? Luckily it has been a cooler summer, however with all that rain, where did all that run off go, Lake Ontario or the ground water around these temporary dumps?

Another smell is rising in Montreal however with the disclosures coming out of the Earl Jones Ponzi scheme as well. The Bon Vivant lifestyle lived by this “financial advisor” is coming out and naturally his victims are not happy with what they are hearing. To hear that someone in the financial investment world was “Living La Vida Loca” is no surprise, but I guess when folks find out how much of their money was used to support this lifestyle they get a little upset.

From the Financial Blogosphere

With the wet days of summer continuing here in Ottawa, I am sure the sales of immersible pumps and shop vacs has been sky rocketing, but in the financial blogging world other topics were brought up as well:

Have a great long weekend fellow Ontarians! I may or may not post on Monday.

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A Year Ago

This was written in 2009 a year after I had been laid off, and I was about to start a new job, interesting reflections

This is the one year anniversary of my lay off notice from Nortel. A lot has happened in the past year (unfortunately not a job offer for me, but I am still optimistic), that have me thinking that for something bad, it may end up being a good thing.

Nortel
Nortel Once a Giant Now Deceased High Tech Firm

Relaxed

The atmosphere at Nortel had been such that since about 2000, there was a constant feeling of the Sword of Damocles hanging over you. I lived through about 16  lay off rounds in the various groups I had worked in, so the actual lay off was almost a relief in a very odd way.  My minister made that exact comment that since he had first met me every time he spoke to me I mentioned something about impending lay offs, so my eventual lay off was anti-climatic in a perverse way.

Severance Paid

From my calculations I was in the last group (or nearly the last group) that received full severance from Nortel. The people after me are on a long list of creditors who will be paid little or none of what they are owed (or were promised by the company). There are many very sad stories that I have heard from people I used to work with, and I count myself as very fortunate.

The latest stories are sickening to hear that they will be withdrawing payments to people on long term disability, as well as pulling their medical coverage. Hopefully there will be government assistance to these folks, but I am not optimistic.

Pension Losses

I suspect that Nortel’s pension debacle may only be the tip of the ice berg in corporate Canada, with Air Canada already having done this (and doing it again).  I took my pension money out of Nortel when I could, which in hindsight was a great decision but at the time it was more my lack of trust in the company that made me do it, not any great insight.

All pensions these days seem to be under pressure (even the Public Service pension lost $9Billion dollars this past year), which makes me wonder how the retirement of the Baby Boomers is going to go, and whether all pensions can deal with this huge out flux of cash from their reserves?

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Christmas Wishes from the Past

I seem to do this a lot, so here are my Christmas wishes from years gone by:

Reflections So Far

My real view of my lay off last year is that I have been very lucky, and I was lucky to have worked at Nortel/BNR for the time I did. The experience I picked up continues to get me job interviews, and I worked with many wonderful and amazing people, so even at times when I seem to be a “bitter former employee”, I am not, I am grateful for the experience and hope to soon find a new place to ply my trade.

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Summer Reprise: It’s Simple Isn’t It?

To make the summer pass a little easier I give you another one of my favorite and earliest posts from 2005 when I figured the best thing was to talk LOUD and fast and people might listen, maybe that works?

It’s Simple Isn’t It?

So the first and easiest principal of financial planning is to SPEND less than you MAKE. Notice, I am not charging you for this piece of advice, so please no notes saying, “Well D’UH!”, or such. This is so obvious, that maybe it gets obscured with all of the odd plans and peccadillos that we put together in our financial lives. Let’s look at this as the actual equation:

Incoming cash – Outgoing cash = SAVINGS (or Losses if negative)

You are probably thinking, I know that one! Really? Do you know how much money comes IN to your household? It’s not too hard to figure out, if you keep your pay stubs, but the rub is how do you figure out how much is going OUT of your household? Can you figure out where you are spending most of your money? Can you guess? My bet is you might be able to guess approximately, but I have also found that you might be wrong.

I am part of the “Quicken Cult” in that I track most of my expenditures and income in Quicken (no I don’t get any money from Intuit for saying this), and given that I use direct withdrawal to pay for most things, I actually have a pretty good view on what my family spends their money on (I’ll write another article on controlling spending, right now I am more worried about just bookkeeping).

Do you need to use Quicken to do this? No. You can use Microsoft Money, Excel, an accounting practice book, a spiral binder, or just keep your receipts for 2 or 3 months (or as long as you can stand keeping track of all of this). The important thing is that you are keeping track of things, you are watching (let’s not discuss the Heizenberg Principal just yet), and learning about your habits.

“I don’t need to track that, it’s only a coffee.”, think you? NO WAY! Go nuts for a short period and keep track of all that INCIDENTAL spending you have (if you are a smoker, you’ll have a heart attack on how much you spend on those). Let’s do a simple calculation here:

2 Stan Mikita’s Large Coffees per day * 5 days per week * 48 weeks * $1.40 = $672.00

The thing to remember this is AFTER TAX money too, could you use that much extra a year? If not, mail me a cheque for that amount (I sure as heck can).

The longer you do this “watching” of your spending the better a picture you can get about your spending HABITS. If you do it for a month, you’ll have a good snapshot, however, if you do it for 3 months, your picture is a bit clearer (and you are less likely to have “fudged” because you knew you were keeping track), and if you keep track for an entire YEAR, well then you can then plan for an entire year! WOW!!! That’s awesome.

Now that we have all this data, it is time to separate it into categories, the first is easy INCOMING and OUTGOING. Incoming is simple, that is your pay stub (but remember there is outgoing on there as well, taxes, cpp, ei, etc.,), outgoing is pretty much everything else. If you want you can use that big equation:

Incoming – Outgoing = Savings

and see where you stand (and whether it lines up with your bank statement), however, it might be better if you do a little more separation. In the OUTGOING, create subcategories for yourself, here are a few examples:

  • Groceries/Food
  • Transportation (Car/Bus/Moped expenses)
  • Taxes! (no, don’t add up GST unless you are a glutton for punishment)
  • Household
  • Utilities (if you live in an apartment or condo you might not need that)
  • Entertainment
  • Miscellaneous (i.e. all that is left)

OK, so we have done this and we now have a good view of where the money goes, and where it comes in, and hopefully at the end of it, you know why you have the savings (or debt) that you have in that time period. Is this the end of our quest? No way, this is only the beginning, all we have right now is raw data, next we need to use this data to make our financial plan.

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Water and Flooding

Water, Water Everywhere

In 2009, Ottawa had a very damp summer. It was mostly an inconvenience for those who love the outdoors. The volume of rain that fell became an issue, as the summer passed.

For the farmers around Ottawa there was too much water. Crops were ruined by too much rain.  This meant less local produce in our stores, which was disappointing and more expensive for the consumer.

The other issue was basement flooding. Some folks in lower areas were getting water coming into their homes through their foundations. That problem caused a run on contractors who repair and waterproof foundations, and a run on the sale of submersible sump pumps as well. Was the damage covered under their insurance policy?

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The other more fun issue that arose was backing up sewer systems. This is where the drains in the basement of the house backs up. The sewer instead of taking water away from the house, does the opposite and brings the sewer contents into the basement. This damage is much worse and may not be covered under most insurance either. You need to check closely in your insurance policy.

This kind of backup is very bad because not only are your basement contents ruined by the water, you have contamination of your basement by “sewer contents” (if you catch my drift). Your basement becomes a Bio-Hazard and you won’t be allowed back in your house until it is cleaned up.

Evidently there is a “valve” device that you can put on your basement drain (the one in the floor of your foundation) that will attempt to stop this kind of “back up”. If anyone cares to comment on the insurance side of things, or the preventive measure of this valve, please feel free to add your comments in.

Read your home insurance and weigh the value of getting coverage for home flooding.

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What Happened to the Pawn Broker?

Many Pawn Brokers are branching out and take gold, but are also being overrun by PayDay Loan storefronts.

These businesses have a simple model: Send us your unused Gold, Platinum and jewelry by mail and we’ll send you what we think is a fair price for it.

Just reading that line suggests something is not right in this model, at least with a Pawnbroker I can go in and find out (to quote Bo Diddley from Trading Places), “… in Philadelphia it’s worth fifty bucks…“, and I can walk out. Yes these businesses do offer a return policy within a set period of time, but it just screams loudly Financial Pornography!

This is a business for whomever is running it. They are aiming to pay you as little as they can, without you saying, “Hey, that’s a rip off”, but typically folks who send in their gold via the mail to get money, more likely than not, don’t know how much gold is in their jewelry and what the approximate value of it might be, thus they have no basis to figure out whether this is a rip off, or a fair exchange.

Given how much advertising I am seeing for the various services like this out there, I guess this is a growing business and the money must be good, but I also wonder how does the receiving business know if the person sending this jewelry actually owns it? I assume there is a form sent which the sender must sign, saying this is their property (for the the lawyers), but what is stopping thieves from using this service? Are various legal services working with these companies to make sure stolen jewelry doesn’t get turned into cash easily? I don’t know.

If anyone has any stories about dealing with this type of service or similar ones, I’d be curious to hear them in the comments section of this post.

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