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Best of Money Carnival #39

I have the privilege of hosting this week’s version of the Best of Money Carnival . What is this carnival about? I’m glad you asked:

The Best of Money Carnival features the ten best (in the opinion of the carnival host) money-related posts of the past two weeks — giving readers the best of the best in personal finance.

Now this differs from my Random Thoughts posting, because these posts have been sent in and entered for judging by me, so the content is a little different. There were many, many entries and it was hard to get the list down to a “Top 10” format, but I did (and my apologies to those who did  not get chosen, remember there is always next time).

Best of Money Carnival #39

There were a lot of great articles posted this week, and it was hard for me to choose a winner and the 9 runner ups, but given I am the “decider” this week, here are the posts:

Entries

These posts were really good, but which one is the best this time?

Clayton presents Free credit report posted at Just Good Financial Advice.
Talks about how you can get Credit Reports (in the states) for free every year, with some info missing, and you know how I loves that free stuff!

Craig Ford presents The Infinite Advantages Of Paying Cash For A New Car posted at Money Help For Christians.
I must admit I do have  a vested interest in this one, because I just did pay cash for my “New to me” car.

Jeff Rose presents Warning Signs You Need to Fire Your Financial Advisor posted at Jeff Rose.
A very good list of points to look for to make sure your Financial Advisor is on the “up and up”, also if your Financial Advisor goes on better vacations than you every year, start wondering about that as well.

GLBL presents Money Saving Mondays: How to know if your loan should be refinanced posted at Gather Little by Little.
OK I am a sucker for any post with a racing car on it, but also some good points about when it might be a good idea to refinance your debt (no, it is not when your bank thinks it would be a good idea).

Jason @ Redeeming Riches presents 6 Ways To Find Free Money posted at Redeeming Riches.
Again, I am a sucker for free things, but this points out areas where you can keep from losing money (which is free money as well).

Wealth Pilgrim presents Why This Boyfriend Doesn?t Need A Valentines Day Gift Idea posted at Wealth Pilgrim: Money Management Advice, Financial Stress Management, & Resources.
The price of the gift is not what matters, it’s the reason for the gift that matters, and that message resonates with me a lot. I still think his girlfriend isn’t going to be very impressed by this, but that is just my opinion.

FIRE Finance presents Annual Fee Introduced for Citi Cash Returns Credit Card posted at FIRE Finance.
I love stories where people simply cancel credit cards or move banks, because the reason they were there changes. A sudden fee change is an excellent reason to change or get rid of a Credit Card!

2 Cents presents Taxes: The Missing Step posted at Balance Junkie.
A good list of things we Canadians should remember during tax time (yes it is Tax time both in Canada and the U.S., who says we don’t share crappy traditions?).

LeanLifeCoach presents Combat The Closing Techniques – The Puppy Dog Close posted at Eliminate The Muda!.
I read this and thought, “… wait a minute, I almost fell for this once as well!”, damn puppies! Another important sales technique to watch for, and be wary of.

The Investor presents Pros and cons of being wealthy posted at Monevator.
So this one has me scratching my head, but it is intriguing, so I include it for your perusal. Any article which says, “It ain’t easy being rich”, is bound to make you stop and think (and possibly cause you to have a violent reaction, which makes it a useful article).

The Winner!

Taxes: The Missing Step

Guess I am a sucker for a set of Canadian Tax tips, during Tax season, thanks to all who participated!

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QuickTax Software Give-away Time

It is time for the first major give-away on this site (ever).

Intuit was kind enough to contact me and send me 2 copies of  QuickTax Standard, which I will gladly give away (since I already bought a copy for myself before they sent me these (yes, irony is a good friend of mine)).

Legalities: Please note, I do use Quicktax (and Quicken) but the copies I have I paid for with my own money (more fool me), I think these are useful tools, but I am not being directly paid to run this give-away (in fact I am out of pocket because I have to ship it to you).  I do run advertising for Intuit to sell Quicktax, as you have seen over the past few weeks, but this give-away is not connected to those ads.

How can you win one of these free copies? Well, let’s first start out with some of the ground rules:

Free Software

Ground Rules

  1. I assume  you are a regular reader of this blog, so all you need to do is leave a comment on this post with your e-mail address to enter (no mailing address needed yet, just an e-mail).
  2. Given this software is for Canadian Taxes, you should really be a Canadian, or have a use for it (don’t just enter so that you can re-sell it on E-bay that is just scummy).
  3. Your comment needs to have a good reason why you want this software (if you say you are having problems with the CRA and are thinking about going for a short airplane trip, you are disqualified), yes, I want it is a valid reason, but so dull. Also remember I have ANTI-SPAM filters on my comments, so if your comment looks like SPAM it might not get entered (or if you are a SPAMMER!).
  4. If you subscribe to my feed, you will have my undying respect and your Karmic mojo will increase 3 fold (no, you don’t get another entry, but I figured I’d beg).
  5. Feel free to TWEET this (remember I am on twitter as the BigCajunMan (see the button below), and if I see you tweet this, I will add another entry in for you).
  6. I hope shipping this isn’t too expensive (no it is not going to go Fed Ex or overnight, it will go via Canada Post).
  7. If you are associated with Intuit or are married/related to me, you are not eligible to enter.

Follow bigcajunman on Twitter

Contest will close on Tuesday February 23rd at Midnight.

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Inflation up 1.9% Hold on Bumpy Ride Ahead!

Reader’s Note: Random Thoughts will return next week.

Also, watch for the First Big Cajun RRSP Software Giveaway! Coming real soon (once I figure out how it is going to work 🙂 ).

Gasoline Pumps Inflation

Stats Canada announced the CPI for January and it looks like Inflation is starting to become more of a factor for the Bank of Canada to think about. Year over year for January Consumer Prices were up 1.9% (remember that in December year over year it was 1.3%), so the 0.6% jump is a big one.

CPI with and without energy

The 12-month change in the Consumer Price Index (CPI) and CPI excluding energy

Black Gold, Texas Tea

Yes, it is Gasoline prices that are helping fuel this inflationary jump, and this could mean follow on price increases as this price increase percolates through the system.

The increase in the all-items Consumer Price Index (CPI) was due primarily to gasoline prices. In January, gasoline prices were 23.9% higher than they were in January 2009. This follows a 25.6% rise in the 12 months to December 2009.

energy graph

Energy Graph

Gasoline prices exerted upward pressure on the CPI for the third consecutive month, as a result of price volatility in the second half of 2008 and the first half of 2009. Prices at the pump have been relatively stable since July 2009.

More importantly the Bank of Canada’s Core rate (which is what they start looking at for when they wish to increase interest rates) is now around 2.0% (year over year) up from 1.5% in December, which may cause the Bank of Canada think tank to start re-thinking when they plan on turning on the Interest Rate economy brakes, which most think is June July timeframe, but if we see another Inflationary jump next month, it may be sooner.

The Big Table of CPI

For those who love details and numbers, I present the Big Table for your perusal:

Relative importance Jan-09 Dec-09 Jan-10 Dec 2009 to Jan 2010 Jan 2009 to Jan 2010
% change
All-items 100.002 113 115 115.1 0.3 1.9
Food 17.04 120.6 121.8 122.3 0.4 1.4
Shelter 26.62 123.1 121.3 121.8 0.4 -1.1
Household operations, furnishings and equipment 11.1 105.7 107.5 107.9 0.4 2.1
Clothing and footwear 5.36 91.8 90.6 90.1 -0.6 -1.9
Transportation 19.88 108.8 115.5 117.2 1.5 7.7
Health and personal care 4.73 110.4 113.2 113.8 0.5 3.1
Recreation, education and reading 12.2 99.7 102.8 101.1 -1.7 1.4
Alcoholic beverages and tobacco products 3.07 129.2 131.2 131.1 -0.1 1.5
All-items (1992=100) 134.5 136.6 137 0.3 1.9
Goods 48.78 106.2 107.6 108.4 0.7 2.1
Services 51.22 119.7 121.8 121.8 0 1.8
All-items excluding food and energy 73.57 110.3 111.7 111.6 -0.1 1.2
Energy 9.38 123.8 130.3 133.9 2.8 8.2
Core CPI 82.71 112.2 114.3 114.4 0.1 2

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It’s RRSP Time

RRSPs are Coming to Town

Yes it is that magical time of the year. Banks and institutions beg you to put more money into your RRSP, because it would be a good thing for you when you get older. Unfortunately you don’t get time off for RRSP Time.

Show of hands: Who believes they do this because they are worried about your Golden Years? None? Not surprised.

Banks and Insurance companies and whomever else sells Mutual Funds want you to put money into your RRSP. This is so that you go and buy their High MER Mutual funds . Assume big fat entry fee, and exit fee as well.

How many times have I heard co-workers or friends say, “I just put my money in the Canadian Balanced Stock Fund and will move it later”? When I query about the MER for this Canadian Stock Fund usually the buyer is unaware, and what the front or back load is on these funds is a mystery as well. How many folks will move it from this fund at a later date? Don’t know, but my guess would be not many move the funds ever.

I don’t have time to think about this, is another argument folks have given me for buying some very dubious Mutual Funds, which may be true, but why did you spend your money is the answer I give. Would you buy a car, house or even major appliance without knowing that there were hidden fees to buy it and then a yearly “support” fee?

So I shouldn’t buy RRSPs now? No I didn’t write that either, but wherever you invest your money, be sure you understand the costs of investing in this financial device. This doesn’t mean you should blindly go out and buy ETF’s or Index Funds, if you don’t know where (or how) they invest.

Get educated is what I am saying before you go out and buy your RRSP. If you don’t have time to do it right now, then wait until you can figure it out.

Maybe I should just get a Financial Advisor? Caveat Emptor is my response to that idea. The past few months more and more stories are coming out about Financial Advisors, and how they work, so you need to find one that you trust, and ask them, How do you make money? especially if they are offering you their services for “free” (you would be surprised what free really costs). If the advisor suddenly tries to sell you whole life insurance, get up, get your coat and walk out without a single word, and don’t come back.

Remember if you are a first time home buyer RRSPs can be your friend as well. You can borrow money from there to buy your first house.

The hasty or rushed decisions I have made in my life (financially) are rarely the ones I look back on with fond recollections.

Top 10 lists

I was wandering through yet another Top 10 List, and it struck me just how many Top Ten lists there are out there (not to mention David Letterman’s output of a list every night), so here is:

Top 10 Top 10 Financial Lists

Here in no real order is my Top 10 list of Financial Top 10 Lists I have seen over the past little while:

  • Top 10 Reasons why High Tech will recover (published in 2001).
  • Top 10 Ponzi Schemes to invest in, and the questions to ask your Advisor about their latest Home acquisition.
  • Top 10 Ethical Reasons for failed Bank CEO’s to get their bonuses
  • Top 10 Ways to save money by not paying off your credit cards.
  • Top 10 Most expensive bank service charges, and why we love them
  • Top 10 Mattresses to store your money sorted by level of comfort (assuming you are only using paper money, no loonies or toonies please).
  • Top 10 Mutual Fund by MER (sorted by highest MER), and why they really are a good investment
  • Top 10 ETFs that have nothing to do with any index and why you will outperform the market doing this
  • Top 10 Reasons that Whole Life insurance policies are better than term policies.
  • Top 10 Why 1,000,000 slugs love Vancouver’s weather (even in the winter) and why they are the only ones who can afford to live there

Did I miss any? (yes this is what happens when I get stuck in long meetings and my mind wanders)

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Lent Begins with Tougher Mortgage Rules


As Lent begins today, we now have a different world for Mortgages and lending. This is a classic from 2010, when the new rules for mortgages started. I note these rules have not changed much.

The rules seem to be that you must meet the standards for a 5 year fixed term mortgage, even though you might be getting a variable rate mortgage. Rule 2 is the maximum you can refinance your home is now 90% down from 95%, and finally you’ll need a minimum of 20% down payment for your non-primary home, to make it harder to speculate on homes.

This set of rules may be a good thing, but I am kind of torn.

The bleeding heart liberal side of me thinks this is a great idea, stopping folks from getting in over their heads and then having to give up there homes when (note I say when not if)interest rates go up 3-4% this summer. The banks tend to try to get you to buy more house than you can afford normally, but with micro interest rates, this is a very dangerous thing, so I applaud Count Floyd (Jim Flaherty) the Finance Minister for bringing in these new rules (including an actual formula for figuring out whether someone can afford a mortgage, wow, not just a heuristic that no one will follow, an actual rule).

My Civil Libertarian side is worried about yet another Government intervention into our lives. In the immortal words of Pierre Elliot Trudeau:

“…there’s no place for the state in the bedrooms of the nation…”

Pierre Elliot Trudeau

Yes Mr. Trudeau was talking about Homosexuality laws at the time, but whenever a government agency comes up with yet another rule to help us live happy lives, I get worried. The business side of the argument is, that with more folks able to buy houses by having easier rules for getting mortgages, the market thrives and there is real value set for properties.

I think in the end this will be a good thing, but I am curious, dear reader, what your opinion of these rules are?

Remember Lent begins today too!

Earl Jones only 11 Years?

Earl Jones received an 11 year sentence for his shady financial dealings, defrauding over $50 Million. The down side of the sentence is that he could be out of prison Autumn of next year? Wow, that does not really seem to be a fair term, if that is the case. Spend a year in prison for a $50 Million fraud, and ruin countless retirements?

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