Happy Shrove Tuesday


For those who don’t realize it, today is Shrove Tuesday (aka Pancake Tuesday). This day means Lent starts tomorrow, and in New Orleans we have Mardi Gras festival as well.

The word Shrove, is the past tense of the English verb shrive which means to obtain absolution for one’s sins by way of Confession and doing penance. Doesn’t sound like it is much to do with pancakes, now does it? Evidently we are also supposed to make merry and enjoy ourselves before we go to Lenten confessions (I like the first part, the second is not as likely).

Financial Shrove Tuesday

NO! I am not saying you should go out and blow your finances up before you start your Lenten Financial Journey, far from it. You can have some fun, but all in moderation. If you plan on giving up your daily Latte, then have 1 last one on Tuesday, and savor it. If you plan on brown bagging your lunch for Lent, then maybe a lunch out is OK, however, don’t splurge! If you plan on using cash, maybe it’s time to find a really good hiding spot for your credit cards (or maybe you should visit your bank and put them all away in your safety deposit box). If you are planning on reading some books on Personal Finance, today might be the day to get them out of the Library.

Make sure you have some pancakes too.

Random Acts of Kindness Week?

Forgot to mention that it is getting close to Random Acts of Kindness week (I would not kid about this topic), so if you were thinking about doing a Random Act of Kindness, time to get cracking.

A few ideas:

  • When in line at a Drive Thru (preferably a coffee shop), offer to pay for the next car’s coffee as well
  • Clear your neighbour’s driveway if it is covered in snow (especially if you have a snowblower).
  • Give the toll booth attendant a $20 bill and tell her to pay for as many cars that follow as possible.
  • Phone up a local kids sports team and ask if they have a fund to help pay for less fortunate kids to play, and give them some money.

These are only a few trite examples, you know how you can help out, so do so. Anybody care to comment on what they may have done so far this week?

For my Buddhist readers, a belated Happy Parinirvana Day. May we all reach that level of enlightenment in our lives (some day).

 

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Random Thoughts: Summer is in the Air

With Summer coming very soon (on Sunday in fact), and Father’s Day on the same day this weekend looks to be an eventful one for us all.

Financially the week has seen the Nortel CEO Mike Z. standing in front of a group of Canadian politicians and saying, “It simply wasn’t feasible to pay severance,” , you have to respect his chutzpah, but when he started saying he might not get his sweetheart pension, I think he lost all credibility. With the CPI at 0.1% we are in interesting areas where allegedly our prices are not rising, yet the price of food is up 7.1% over 12 months, so the numbers are actually hiding a big issue (i.e. the poor and fixed income folks dealing with huge food price increases).  Evidently this means our interest rates may stay as low as they are for a while longer, which is just wild (IMHO).

Financial Blogging Views

Some interesting posts from my regular reads on the Financial blogging front:

  • Techcrunch talks about the new Apple iPhone 3GS which is out today, will this entice more Canadians to sign up with Fido and Rogers (and their ridiculously expensive data plans)? I’m sticking with my iPod touch, thanks.
  • Ellen Roseman has a little Fun and Games with her students at U of T’s continuing ed program, with Ellen Degenerates Share Club, she wins the funniest one liner of the week.
  • Michael James points out that the CRA No Longer Taxing Loyalty Programs, with a few caveats added on. I wonder if my PC Points fit this new rule?
  • The Canadian Capitalist points out that ‘Simply Save’ with TD Bank might be a no-brainer to sign up for, for someone like me who already does his banking with TD.
  • Preet from WhereDoesAllMyMoneyGo points out that the Ultimate W Expert Challenge (which he is a part of) starts this weekend on Sunday! Worthwhile just to see and hear what Preet sounds like (since you aren’t likely to see me on the big screen any time soon).
  • Larry MacDonald points out that Ontario Savings Bonds are on Sale (for a few days more), but wonders if it might be better just to go with high yield bank accounts?
  • Riscario muses about The Three Major Obstacles to Growth according to Brian Tracy, which is a very interesting read.

Stay tuned this weekend, there may not be a video interlude, but there might be something even more interesting. Enjoy the start of summer and remember to call your Dad on Father’s Day!

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Money is Cheap so let’s Invest!!!

A comment yesterday caused me to wonder when this kind of salesmanship is going to come forward in the world of investing, especially with RRSP season looming on the horizon. Should we be borrowing to invest if money is cheap?

The comment was a reader pointing out that since money is so gosh darn cheap to borrow, he was going to borrow some money,  invest it and make some money.

It’s Simple Isn’t It?

On the surface it’s a pretty easy scenario to envision:

  1. Borrow $10,000 from a secured line of credit or some cheap credit vehicle that is charging say 4.5% interest (for now)
  2. Buy an Index Fund or Mutual Fund or “Hot Stock” which should easily outperform the regular 6% the stock market usually pays for the next 5 years
  3. The interest on the loan is tax deductible too!
  4. Pocket the at least 1.5% “profit” you make every year

Is it Just That Easy?

Sure, it can be, lots of people can make money this way, all you need is a “sure thing” that is going to pay you more than the interest you pay on your debt vehicle, simple isn’t it?

How many sure things ended up being losers? Ask bookmakers why they love sure things (so many suckers end up betting).

Sure things in the Stock Market is a “suckers’ game”, made up by people trying to make money on  you buying stocks. There are good investments out there, don’t get me wrong, but what we must have learned from Nortel, Enron and the Bank Debacle that you must be wary of “sure things”.

Age Matters

I am too old to deal with the stress of investing AND worrying about the debt I incurred to invest that money and the associated problems too.  If I have spare money I may invest in stocks since I think they are undervalued but I am not sure where as of yet.

If you want to buy or sell on margin, or borrow money to invest, go in with your eyes WIDE open and know this is risky and has serious downsides to it. You are all adults (I hope) you make your own decisions, but make sure you know all the facts first.

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The Gift of Hope (A spiritual and financial point of view)

I was kicking around writing a post about the Financial Apocalypse and whether I could find a really good bible passage from Revelations that might fit what has been going on in the Financial Markets this week and then point out that this might actually be a sign of the Apocalypse (mostly tongue in cheek of course), but I have written enough about this economic cluster flop enough for one week, so let me write about something that we all need to have, and that is Hope.

Romans 12:12 Be joyful in hope, patient in affliction, faithful in prayer.

Hope is what makes me get up in the morning, and what lets me sleep at night. Hope is what makes me believe that I will find a job soon. Hope is what got me through a very tough summer where I could have easily fallen into an ocean of self-pity. Hope helps me realize that I have far too much and should be thankful for all I have, for my family and my good friends.  Hope is hard to hold onto sometimes, but anything worthwhile or worth doing is hard. It’s easy to give up, it’s much harder to keep going.

Hope will be what turns this whole economic mess around as well. There will be changes, things may not get better over night or even soon, but they will be better eventually. I am not giving any advice here, I am saying have Hope and believe in the good things that will come.

Be joyful and have hope too, life is a gift, unwrap it and enjoy it.

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Financial Disappointments

Life always teaches you the oddest things at the oddest times, and this weekend I got reinforced the notion that you “… can’t always get what you want …” to quote Mick Jagger, but sometimes you really do get what you need. I watched my youngest daughter’s basketball team play very hard but just not reach where they’d hope to, and saw that young girls are quite resilient but also quite passionate about things they do.

What does this have to do with your Personal Finances? The same kind of things happen to me on occasion financially, where I have worked hard and am sure I will be rewarded for my hard work, but sometimes circumstances come into play and things just do not happen the way you expected.

What do I mean?

  1. You or your spouse were expecting a raise or a bonus at work, yet when your boss calls you into his/her office you get told no raise is coming.
  2. You thought you were a shoo-in for a promotion, yet it did not transpire.
  3. Your tax rebate turns into taxes owing due to an arithmetic mistake you have made.

All 3 of those disappointments have happened to me (and to people I know).

Financial Disappointments

What do you do about it? Well, a short intense pity parade is fine (with a few drinks), however, you can’t let this stop you from your eventual goals. Short setbacks and battles lost do not mean the end to a war, keep fighting and use this to invigorate your actions. Maybe you have become complacent? Maybe you need to examine why this happened and put in an action plan to make sure it doesn’t happen again (making the same mistakes over and over is a bad thing in life).

Some ways to deal with disappointments financially:

  1. Do a “Root Cause Analysis” of what happened. If you don’t understand why something went wrong, what is stopping you from doing it again? Understanding financial failures or setbacks is the key to any financial planning.
  2. Give yourself a chance to recover, and don’t panic. If you feel like the steps you are taking are “reactive” (i.e. you are simply doing something because you think you should), step back and think about it, or ask someone you trust if something is a good idea. Don’t go off “half cocked”.
  3. Remember financial planning and financial success is a long term thing, you can’t sprint the entire time, sometimes you might have to walk. As long as you aren’t going backwards, you are succeeding.

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