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Canada Day, 4th of July, Flooding and Some Random Thoughts

A busy long weekend ahead here in Canada with Canada Day actually falling on a Monday, so we all get a lovely long weekend. Given the horrible flooding in Calgary (and in other spots now), it may not be that enjoyable a long weekend for everyone. Will Calgary be able to get ready for the Stampede? They say they will be ready, let’s hope they are right (it hasn’t been cancelled yet).

Thursday next week is the 4th of July down south, so it looks to be an extra long weekend for them as well. There will be a great deal of things blown up here for Canada Day (i.e. fireworks), however our friends down south take that to a whole different level for the 4th of July, and in the words of Big Jim McBob, they blow up things real good!

This won’t be my regular best of post for the week, we are dealing with the death of my Mother-in-Law to Cancer (a long very tough fight), so my apologies for the shortness of the post, the regular Friday post should return next week (or maybe I’ll rethink it and try to make it more interesting, who knows).  Cancer is an insidious and nasty disease, and hopefully one day we can stop losing loved ones to it.

If you wish to make a donation to the Canadian Cancer Society, click here.

You can read about my Mother-in-Law on the Halton Learning Disability Association as well, and if you wish to donate to that organization please do.

“Cancer can take away all of my physical abilities. It cannot touch my mind, it cannot touch my heart, and it cannot touch my soul.”  –Jim Valvano

My Weekly Recap

A sad week for my family, but I did manage to get a few posts out, including Barry’s rather controversial post, seems to have created quite a stir (note, I have edit’ed the comments to not name the insurance company in question, this is mostly to protect ME):

My Writings for Week Ending June 28th

Signs your adviser doesn’t know anything

Barry certainly rattled a lot of cages with this one, lots of entertaining comments too!

Trust no one in this world… with your cash

Conan the Barbarian and financial advice seem odd bed fellows, but I think it works.

No Bank Would Do That!

I resurrected an old chestnut from my archives, about how to be a terrible bank customer.

A Very Topical Video

Jim Valvano was one of my favourite coaches, and his life was cut short, but not before he had a ferocious battle with Cancer, I find hope in this video (Jimmy I try to Laugh, Love and Cry every day):

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No Bank Would Do That! (or the Ideal Bank Customer)

Found this classic post about what a Bank might think is an ideal bank customer .

It has been pointed out that my post yesterday about a Real Service for Chronic Over Spenders is at best naive at worst unlikely to ever happen. Why wouldn’t a bank run a service like this? The answer is simple, it does not make them any money.

The Ideal Bank Customer

Banks make money on:

  • Customers who carry balances on their credit cards.
  • Customers that use the over-draft service available to them.
  • Folks with bad credit that don’t get preferential interest rates.
  • Consumers who do not carry the minimum balances in their bank accounts to get free banking (and thus pay $25 a month in service fees)
  • Debtors who do not pay back their loans quickly (i.e. they do not make over payments)

This is an interesting paradigm for the Banks.

Banks must portray themselves as being helpful, trustworthy and someone who wants you to succeed in your financial journey, when in fact anyone who does succeed, does not make the bank a lot of money. I have friends who have paid off their mortgages in 5 years instead of 25 years, saving themselves tens of thousands of dollars (but in turn costing the bank tens of thousands of dollars in lost interest earnings), yet the bank must publicly say that this is a good customer, even though they are bad for their business.

An ideal bank customer makes minimum payments on their debts (especially their credit cards), incurs many service fees (or penalties) and rarely if ever talks to anyone in the bank about their issues. Reading that sentence it seems to be an oxymoron, in that it seems to be a description for a bad client, but if all you look at is the bottom line banks will fight over getting these customers.

How do they fight over them? They offer interest free credit cards (for the first six months), and lower interest rates on loans (for the first year), and other interesting marketing gimmicks (free iPods even). These customers make banks much more money than someone who is careful about their debt load, and that keep meticulous records of every purchase and pay things off quickly.

Conclusions

This week I have let my imagination run a little wild, on the problem of how to help people who spend too much or that are chronically in debt, but at the end of it the answers are evident:

God helps those that helps themselvesAnonymous

The banks will help you, but be careful of the help you get Big Cajun Man

It is kind of like the guns don’t kill people, people kill people argument the NRA uses, in an obtuse way of thinking. People get into debt trouble because they can’t control their spending, and try to fix their spending issues with more debt, which the bank gladly obliges, and the financial death spiral (TM) begins.

Final conclusion:Getting out of debt is hard work, choose your tools to get out of debt carefully (unless you would like to try out a prototype Financial Shock Collar, then contact me).

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Trust no one in this world… with your cash

I am paraphrasing from Conan the Barbarian, where Conan’s Dad teaches him about life:

Conan’s Father: For no one – no one in this world can you trust. Not men, not women, not beasts. This you can trust (pointing to his sword)

After yesterday’s spirited Guest Post (thanks Barry), I found this in my archive of unfinished articles (I have about 80 of them which vary from a title to a completed article, that I just don’t like the wording), and it does bring up an interesting point that Barry brought forward.

The Joker: And now, folks, it’s time for “Who do you trust!” Hubba, hubba, hubba! Money, money, money! Who do you trust? Me? I’m giving away free money. And where is the Batman? HE’S AT HOME WASHING HIS TIGHTS!

I think the Joker makes an interesting point there, who do you trust?

Are you sure you should trust them with your money? I am astounded to hear the blind faith some friends have placed in “their money guy”, now some have been paid back handsomely for their faith, but many have learned what Conan’s Father was teaching (trust only in steel).

After the rash of “experts” (for lack of a better title) who have ruined their clients through criminal activities (i.e. Ponzi schemes) or incompetency, you should always have skepticism when you are dealing with money experts (even bloggers).

Any expert who doesn’t like you asking questions about how they work, isn’t really worth having (in my opinion). I have read about many interesting cases at the Investment Industry Regulatory Organization of Canada, web site.  You can sign up to read about some of their inquiries, and rulings (there are many very interesting cases to hear about).

I think Conan had it right when it comes to money, Trust only in Steel!

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Signs your adviser doesn’t know anything

Today’s post is a Guest Post, and you know my Opinion of Guest Posts normally, however, I think this post is quite entertaining and a nice follow on to a Podcast by Preet last week. Barry Choi can be found on Twitter as well.

This is a follow-up to my recent interview with Preet Banerjee which can be found here.

After being disappointed with my once a year mutual fund check up at my bank I thought it would be a good idea to switch to a financial institution that dealt with just investments.  I figured my adviser would be looking out for my best interests but in the end I should have paid attention to earlier signs that he was only in it for his own benefit.

Signs your adviser doesn’t know anything:

He wants to be friends – What?  Friends?  I don’t want another friend, nor do I need an invite to your kid’s birthday party, I need someone to help me meet my financial goals.  All my adviser talked about was meeting up for coffee or lunch with my then girlfriend now wife.  It’s now obvious to me he just wanted be friends so he could get into my social circle and get more business.  Plus it was just creepy.

His services are free – Free!  I love Free, where do I sign up?  Okay not free but it was a tiny fraction of a percentage which would cost me nothing according to him.  Oh wait that fraction of a percent comes from a bigger percentage called the Management Expense Ratio.  I would later find out that all my funds also had a Deferred Sales Charge too.  Great, no mention of MER’s or DSC which could cost 10’s of thousands of dollars probably more.  Nothing in life is free.

Old technology – Whenever I met up with him I could not stop staring at his laptop.  This thing was HUGE it was at least 7 years old, he always had to sit by a power outlet, there was no wi-fi so he could never show me up to the minute info and half the time it wouldn’t even boot up.  Did I mention he didn’t own a cell phone and this was the year 2009?

Life Insurance – He kept pushing insurance.  This is one area where I had some knowledge so I stated to him that I have no dependents and no debt so why do I need insurance?  His response, oh it’s a tax shelter.  Okay sure but I still don’t need it now.  His second response, it’s how all the rich people get rich.  I’m pretty sure insurance only makes the people selling it rich.

No Previous Experience – When I met my adviser he was a security guard at my company.  Yes even I’m face palming as I write this.  He always talked about how he had a finance background and was just taking a break.  I now suspect his financial “knowledge” was limited to what his employer sold and a license to sell mutual funds.  Seriously some companies will hire anyone, a fair amount of people working at financial institutions really have no financial knowledge or background.

The Big Picture – He never asked me about my employee benefits.  My employer offered a Defined Benefit pension plan and basic life insurance.  At the time I didn’t understand pensions and I thought I was already doing a good job saving, so I didn’t look into it.  A real financial adviser would take a look at all benefits available to you, if you have a DB plan they would tell you to jump on that.  Actually I’m pretty sure my guy would have continued to push life insurance.

Broken Hand – One meeting he had a cast on his hand.  I asked if he was okay and if he was in an accident?  His response was his hand had met the face of someone he didn’t agree with.  How do I even respond to that?

I was able to leave my adviser and his company in the end without paying any fees because I had evidence, including e-mails and hard copies, that the plan he had set me up with didn’t meet the goals I was trying to reach and seemed to mainly line his pockets.  His superiors agreed with me and I found out six months later he was let go after an internal investigation revealed he had similar problems with other clients.

The upside of this whole situation is that it taught me to take personal finance seriously; no one will care more about your money than yourself.

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Fathers, Corruption, Horton’s Hedgings and Friday #ShoutOuts

Hopefully everyone enjoyed Father’s Day, I know I did, very nice day, lovely meal and some peace and quiet.

Sad to hear that James Gandolfini has passed away. I enjoyed the Sopranos and his body of work in general, guess there isn’t going to be another Sopranos series. A little disconcerting to hear he was a year younger than me.

Montreal (my home town) showed that they can out do Toronto every way (speaking of the Sopranos and corruption). Toronto may have a Mayor suspected of many things, but only in Montreal can you have a Replacement Mayor, that was brought in to clean up corruption, then arrested for corruption (if that is not the definition of Irony, I’ll kiss Alanis Morissette’s feet). Montreal politics is always something special, and this week, the rest of Canada was treated to a plot twist that the writers of the Sopranos would marvel at (come to think of it, Montreal and the Sopranos have a lot in common).

Evidently Hedge Funds are sniffing around Tim Horton’s with an eye towards buying the Coffee Mavens. To think that Tim Horton and his family has made a pittance on this Canadian Success Story, but his name continues to be spoken ahead of Juan Valdez as the pervayor of fine Coffees. Not as Ironic as the corruption mayor thing, but truly a Canadian Success story (boy starts business, sells for a pittance to see it succeed beyond his wildest dreams).

My Weekly Recap

The ending of the Sopranos was so unsatisfying, however, hopefully my posts this works were a little more satisfying:

My Writings for Week Ending June 21st

Corruption in Montreal? Next Thing You’ll Say is the Sun Rises in the Morning!

My Father’s World

Yes, I get a little sentimental about my late Dad, but hey it was Fathers Day.

White ATM Machines Same as Pay Day Loans

The logic is a bit of a stretch, but you are wasting your money if you are using either of these services (IMHO).

Fun with Numbers Redux

Sometimes we mathematicians have fun with arithmetic, especially when you can astound and confuse your friends with it.

Simple Tip to Grow Your Wealth

I am learning how to do animated GIF files, so here is a nice example of one, but is it really a post? Whatever.

Venn Diagrams For Borrowers

What is similar between Loan Sharks and Pay Day Loans? A helpful Venn Diagram in case you weren’t sure.

Links for the Week

Hockey is still going and it is the Summer (really, it happened some time this morning), guess the season is getting a little long:

Top Stories of the Week of June 21st

Will the Blue Jays Make it Back to .500 Before the All-Star Break?

37 Conversation Rules for Gentlemen from 1875

The Art of Manliness points out some very apropos commentary on the art of conversation that I think still hold in the 21st century.

ETF Investors: Avoid the After-Hours Club

Canadian Couch Potato cautions investors to watch out for fly by night ETFs (as it were).

The Cost of Starting and Maintaining a Blog or Website

Million Dollar Journey outlines how much it might cost getting into the blogging game. Yes it does actually cost money!

How to dump your big-bank financial advisor

Mark at My Own Advisor has a helpful set of hints if you are planning on kicking your financial planner to the curb.

New Will Provisions for the 21st Century – Your Digital Life from Facebook to Domain Names

The Blunt Bean Countr had a guest post about what new things you can bequeath in your wills. I will be leaving this web site to science for their study of why I actually kept writing for so long.

 Bosch unveils smartphone enabled self-parking system

Now this is a good use of technology, but I wonder if it can actually park in the snow!

 Thinking Fast and Slow

Michael James reviews a book about our thinking processes. Me I am a very slow thinker, every time I have acted in haste, I have paid for it.

Get A Good Night’s Sleep

Gail Vaz-Oxlade has a good piece of advice, especially for those who really think sleep isn’t that important.

 The Greatest Heists In History [Infographic]

Popular Science has larceny in their hearts with this interesting infographic about the Greatest heists of the 20th century

@BarryChoi explains why his financial adviser wanted him dead (Podcast)

Preet resurrects the Podcast, and watch this site next week as Barry explains things further.

Other Bookkeeping

Remember my RSS feed is available too, and I have added an RSS Comment Feed as well. Have a look at my micro-blog on Twitter, where you can see a whole plethora of good articles and pithy comments by me as well. Twitter feed where I re-tweet many great articles by some of my featured writers (and make the occasional odd or off colour commentary on life (in 140 characters or less)). I am also on reddit, Tumblr, Pinterest and other Social Media sites (look for the BigCajunMan userid) as well. If you have social media accounts, don’t forget to vote for my posts (see the nifty dashboard on the bottom of each article, where you can cast your votes). As they say in Quebec, vote early and vote often! This site is iPhone Friendly (and Android , iPod Touch and iPad Friendly), enjoy it on the go, in a readable format for the device. If you are reading with an iPhone or Android device, drop me a comment and tell me if this needs any improvements. This site is also in the Kindle Blog list, if you are interested.

Golf and Fatherhood Explained

Nothing to do with money this week, except Jerry Seinfeld making fun of rich people, golf and fatherhood:

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