Save up to 50% on life insurance.

Quick Financial Thoughts

Just because you may have a pension, doesn’t mean you shouldn’t have an RRSP. You also should have a TFSA and your only financial goal should be to be out of debt by the time you retire.

If you have an emergency fund, do you have a plan on when you might use it? Simply having money sitting somewhere with no plan on when it should be used is really just a savings account.

An RRSP is simply a tax deferral savings program. It works best if you use it for your retirement, but that is the primary goal of it. You can’t use it like a TFSA, but it is not solely for your retirement.

The TFSA is a badly named program. It is Tax-Free, and you can save in it, but it is not only a savings account. Many banks are fooling you into thinking the program is a one savings account. It is not. Open a TFSA with a trading firm like Questrade, Directline or others.

Debt is simply borrowing money from your future self. I know it is not in vogue to say debt is a bad thing, but it is. Your first goal should be to deaden your debt load, the rest of the financial plan is gravy.


Stock Picks 2018 End of Year

At the start of the year, I actually did publish a Stock Picks for 2018 article, which is a rarity for me. I am not in the stock picking business I am into Index Funds, and my stock picks reflected that fact.

Stock Picks
I even made a fancy slide

This year has ended quite nastily for the markets. After 10 years of growth, you had to know something was going to change, and so far the great shart of 2018 continues. We shall see when the bottom hits.

What happened with all of my picks? Let me refresh your memory.

  • Canadian Index Fund based on a TSE index like TDB900 – TD Canadian Index (e-Series)
  • US Index Fund based on the Dow Jones Industrial Average like TDB902 – TD US Index (e-Series)
  • A Canadian Bond Fund like TDB909 – TD Canadian Bond Index (e-Series)
  • International Index Fund like TDB911 – TD International Index (e-Series)
  • A Dividend ETF (if you are so inclined) like FTSE Canadian High Dividend Yield Index ETF (VDY)

A fairly typical Couch Potato portfolio. How much of each you buy is up to you, but let us assume an equal amount bought in each of these funds.

        Jan 2 2018    Dec 26 2018
TDB900 $      1,000.00  $            961.20
TDB902 $      1,000.00  $         1,103.88
TDB909 $      1,000.00  $            995.90
TDB911 $      1,000.00  $            958.60
VDY $      1,000.00  $            959.30
Value $      5,000.00  $         4,978.88     -0.422%

At the end of the year you would have lost about $21 or 0.42% of your investment. Given how the markets are running right now, not too bad really.

If you are an investor in individual stocks, I wish you good luck. For Indexers let us remember the sage words of Preet B., “I am an Indexer, I don’t care what the Index did today!


2016 The Year of Part-time Jobs

Friday, the 2016 year ending Labour Force Survey was published by Stats Canada and it confirmed that 2016 was the year of the part-time jobs.

To quote the survey overview:

In the 12 months to December, employment gains totalled 214,000 or 1.2%, compared with a growth rate of 0.9% observed over the same period one year earlier. A year-end review is presented in a separate section below.

Which sounds wonderful, except when you have a look a little deeper in the Analysis of the data, and find out the following gem:

Part-time employment trended up throughout 2016, rising by 154,000 or 4.5%, while full-time employment was little changed. During the same period, the number of hours worked was virtually unchanged.

So a lot of these new jobs end up being part-time employment. Looking at the graphs you can see how this year is the year of the part-time job in Canada. Is this a good thing? No, not really, but I guess it is better than losing jobs overall, or maybe not. How many multi-job (part-time jobs) folks are out there? That would be an interesting statistic.


Part-time jobs

Employment indexes, Canada, seasonally adjusted

The unemployment rate for the entire year of 2016 ends up down 0.2% to 6.9% which is nowhere near the American numbers (I believe 4%) but still good that the unemployment numbers are dropping (slowly).

British Columbia is the place to be if you are looking for a job (job growth is the strongest there for the past year).

Given the recovery that seems to be starting in the west (in the Oil fields) this could mean the Canadian economy might be getting ready to surge, but there is the omnipresent question about our neighbours down south and what interesting new policies will come forward with their new government? Let us hope that 2017 becomes the year of Full-Time jobs ? (enough of the part-time jobs).


No I Can’t Do Anything About That

That is a direct quote from a TD representative when I asked if anything could be done about the interest rate on my Unsecured Line of Credit.

For the longest of times, this Unsecured Line of Credit was “Prime + 1.5%”, but about 2 years ago, it was raised to “Prime + 2.0%”, which while annoying, was something I could live with, however, about six months ago I got a terse piece of Snail Mail announcing, “Yeh, it will be Prime + 3.0%. I was quite irked by this (as a customer of TD), and decided the next time I was in the Bank (say to cash in an RESP) I would ask about this.

The Answer
The Answer is Always No, if you don’t ask

In the interim, my daughter got her Student Line of Credit from CIBC, which I co-signed, and she got that at Prime, so I figured I’d bring the documentation with me (to TD)  to see if I could motivate my friendly TD rep to do something about my unsecured line of credit rate.  This is where the title of this post came in to play.

First I was easily able to cash out my daughter’s RESP (as I had move all E-series Index Funds into the Money Market fund, won’t get fooled twice on that one), in a relatively quick few minutes. I then had to have my “investing profile” updated to allow me to do what I wanted in another account, again done quite quickly as the rep simply cloned the last time I did this update.

At this point I brought up my Unsecured Line of Credit and the high interest rate (in my opinion) and the fact that I have good enough credit to co-sign a loan for prime only, and the answer was short and to the point:

“No, that is an unsecured line of credit and I cannot lower that rate.”

I asked if there was any chance to discuss it, and was dismissed with, “Your Daughter has a professional line of credit loan, not the same thing, we can’t do anything for you”.  I believe I also asked if anybody else could help, but was told No. Now I have said previously, The Answer is Always No, unless you ask, but evidently it can be No even if you do ask.


If I remember the happy young lady at the CIBC, when she gave us the details about my daughter’s student line of credit, told me that an unsecured line of credit rate for me would have an interest rate depending on my credit rating and how much debt I carry, but she’d gladly check it out for me if I wanted her to do that. I guess I’ll be going to visit CIBC in the near future.


%d bloggers like this: