EQ Bank Savings Plus Account

Read Financial Documents Before Signing

Sure I Read It (maybe)

Most financial documentation is treated the same way as the Bible, in that most people claim to have read it, but few really have done so (and even fewer can remember the contents (and still more misinterpret the contents), of those who have claimed to have read it). This is what the financial industry is hoping you will do, so it is in your own best interest to read all documentation over carefully, to at least understand the financial “jist” of the document.

What do I mean by financial “Jist”?

  • Is this a “cover my ass” document from the financial institution so that you cannot sue them later? Most equities/mutual fund/etc., documents are this type of document. The company has lawyers who are trying to get you to absolve the company of any guilt if you lose your family fortune. I have no doubt Bernie M. may have had the exact same documents that folks signed without asking first what they meant.
  • Hope you read the fine print, because you just stepped into a financial leg hold trap, document. These are more insidious documents, in that whoever is trying to get you to sign it is attempting to trap you into terms that are beneficial to them, but not to you. These happen more than you think, so it is important to make sure that what you are being told verbally, matches what you are signing.

The cover my ass document seems to be appearing everywhere, as more interesting litigations appear, and while very annoying, are not as disturbing as the financial leg hold trap documents.

Leghold trap

That is gonna hurt!

Who might have a financial leg hold trap document?

  • A lender who is telling you one set of terms verbally, but putting in writing a different set of numbers, or worse, not telling you about penalty clauses that can be invoked, if you attempt to break the loan agreement. What are the costs of breaking your Mortgage or Loan? Can you answer that question? If not, you had best go find out, you might be unpleasantly surprised by your agreement
  • Car leasing agreements that have many extra penalty clauses, or return fees that they may not mention (and you’d only find out about if you read lease agreement closely). Saying, “You never told me that”, isn’t going to make those charges go away.
  • Warranty agreements that state that the vendor has a right to refuse warranty work, with no excuse. This one I have heard of, and you really do need to read what warranty and return policies are when you buy things. If you haven’t read the warranty statement closely you might be left out in the cold.

If you are really unsure of the contents of a document, simply don’t sign it until you are confident you know what its contents actually mean. Claiming ignorance later is not really a great defense, and if this is something financially important to you maybe you need a lawyer or at least a trusted friend look it over.

In this instance reading is believing (and understanding, hopefully).

My motivation for this article was from two sources:

  • One of my favorite sites is Hanzi Smatter which is dedicated to the misuse of Chinese Characters in Western Culture, where you will find countless examples of folks who have had Chinese character tattoos put on them using the Chinese Gibberish font. If folks don’t check what is being etched onto their body for the rest of their lives, when should they check the validity of a set of characters?
  • A work associate who seems to have been caught in a Mortgage Bear Trap, where if they wish to break their Mortgage agreement they must pay a penalty equal to all interest charges throughout the life of their mortgage contract (not the standard three month, 6 month or remainder of agreement penalty). Yikes!

{ 4 comments }

Glory Days

Was it Better Back Then?

As I get older the expression when I was younger creeps slowly into my vocabulary. Everything seems to be better when I was younger (at least that is what my children have accused me of saying). A typical set of expressions that I use a fair amount are:

  1. When I was younger, I could eat anything and never gain weight.
  2. When I was younger, I seemed to have more disposable income.
  3. When I was younger, Canada Savings Bonds earned over 10% interest.
  4. When I was younger, music wasn’t so weird.

You can add many more to this, and this obsession with nostalgia that I have seems to be an off shoot of my own maturing.

If I look. the statements I have made may actually be true (the music one is debatable, since I did listen to Teenage Head and Jayne County and the Electric Chairs), but the reason for them being true are points that I don’t like to think about.

I used to be able to eat whatever I wanted, because I rode my bike everywhere, and had regular exercise every single day, nothing magical about this, it’s quite simple really. My metabolism has dropped a little, but the fact that I could eat a Large Miss Jean Talon pizza by myself and remain at 165 lbs., was not magical, it was because I exercised, pure and simple.

The same is very true for my money situation. When I was younger I could buy whatever I liked, but what I wanted was a much smaller subset of the things I want now, and I had free room and board. If I went back in time to tell myself how much money I would have now, I would be floored. I may have had more disposable income, but I can do much more about my disposable income now, than I could back then.

It’s easy to lose perspective on our younger days, and keep thinking how much better things seemed back then, but in my case, now is just fine.

Do You Want to Go Back?

Glory Days by Bruce Springsteen boasts of how better things were when someone was younger, but really, in my life at least, I am living in my Glory Days right now, no matter what you may read here to the contrary. To quote one of my favorite movie lines from Randall Pink Floyd “All I’m saying is that if I ever start referring to these as the best years of my life – remind me to kill myself.” (I mean this in reference to my younger days, of course).

I have enough disposable income, I have more treasures in my life than I deserve (and I don’t mean monetary) and I have enough health to appreciate all of this. All I would like to do is go back in time, and tell my younger self to save a little more, and that things will keep getting better.

When are your Glory Days?

{ 5 comments }

Fathers and Money

Unfortunately, my Dad passed away not too long after I wrote this post, but I am glad I wrote it, just to help me remember what he did for me.

My Father turns 8 decades plus one year old, and as usual I almost forgot his birthday. It’s interesting that Fathers always make sure that kids send their Mothers cards and such, but Fathers kind of get lost in the hustle and bustle of daily life. In the days of Long Distance being a big money-maker for phone companies, it used to be that Father’s Day was the day the most collect phone calls were made, but I digress.

What do our Fathers teach us about money (those of us lucky to have Fathers)? That depends on how your Father chooses to teach you things in life. A lot of Today’s Fathers tend to be very hands on and will tend to tell kids about life lessons in general and money in specific, in a very direct manner, which I think has it’s merits. Many times we need to be told about the perils of money directly, because you just might not know what problems you might be creating by a bad decision on your part.

In my case my Father rarely directly said much to me about money, he preferred to teach by example, where he worked hard, and made sure all the bills were paid and we had what we needed to live on. He did on occasion intervene but not directly, usually by asking leading indirect questions or telling stories (remember the The Parable of the Singing Horses), but he rarely intervened directly.

I can’t really say which is the better way for Fathers to advise their kids about money, I think my Father’s ways worked OK, I think I would have liked some more direct advice from him, but then again, would I have taken the advice? Some things are best learned in the school of hard knocks as well.

What have I learned from my Dad?

  • Hard work is rewarded, eventually. He worked hard every day, and sometimes he got the short end of the stick but mostly he reaped the rewards from his hard work.
  • Panic is a luxury that you cannot afford, no matter what. My guess is my Father did have some anxious days in his life financially (in the beginning), but I never knew about it. Do my kids need to know when there are financial issues? I don’t think so, unless it may affect their lives directly, then they need to know.
  • Pay cash for everything, I rarely saw my Dad use a credit card, but I am also paranoid about walking around with large amounts of cash, so that one is a little harder to live up to.
  • Education is power, there was never any discussion about whether I would go to a post secondary institution, most of the discussion was on what I might study. He commented directly here stating, “… there is no bloody way I worked my ass off to get off a farm, to have my son go back to one!”, when I mentioned Guelph Agro-Engineering program.

What did your Father teach you about money?

What did I get my Father for his birthday? Sh*T My Dad Says, it’s not meant as a commentary on his advice to me, it’s just a funny book.

‘Why the f**k would I want to live to 100? I’m 73 and shit’s starting to get boring. By the way, there’s no money left when I go, just fyi.’ – From the book

{ 4 comments }

One Piece at a Time

A friend loaned me a Johnny Cash CD, and I found a Man in Black song that I hadn’t heard before. The song was called One Piece at a Time and it’s about a GM worker who decides to create his own retirement plan, by taking small pieces of a car out one piece at a time, so that at the end he’ll have a car for free. I wish I’d thought of that when I was still working at Nortel, having a DMS Switch or Passport in my basement might help my retirement too (but I digress).

This kind of story reminds me of the importance of the small pieces that make up the Big Plans in Life.

Whither the Pawn Broker
Johnny Cash, the Man in Black

There are two ways to get a Million Dollars into your RRSP:

  • When you turn 65 put $1 Million into your RRSP
  • Put $100 a month away starting at age 22 (I think, don’t quote me, but something like that).

All of the really big hard things to do in life take small deliberate steps and it’s those small steps that build into the entire journey.

I do have a non-financial example that really does bring this point home nicely.

A friend of mine, let’s call him Dave, who is a man who enjoys working on his house, and has done a lot of very good work on it.  One of the hardest things he had to do when he finished his basement was moving a jack post that was in the way of an area where he wanted to put his pool table.  Dave talked to a contractor and got a quote which was quite high to move the jack post, so he decided that if he was careful he could take on this job and get it done (he had help from someone who knew even more about it, I believe).

The job itself was completed with little or no excitement, and Dave got exactly what he wanted, but he also had as residue a fairly large pile of cement that he had to chip out to move the jack post.  I wondered how Dave was going to get rid of this not insignificant pile of rubble, since you aren’t supposed to put that much into your home garbage, but he found a solution which worked quite well.

Every time Dave or his wife was putting out a garbage bag, he took a handful or two of the rubble and threw it into the garbage, and in a short time, the pile of rubble was gone.

This example shows that as long as you are patient (and have the time to get the job done), One Piece at a Time is a perfectly good Financial Strategy for building savings, or reducing debt.

{ 1 comment }

Guest Post: Personal Finance Mistakes

Guest Post Note

Normally I am very leary of guest posts (especially unsolicited ones), but Roger sent me a note asking if he could make my life simpler by writing a post for me, I gave him a topic, and he has done a good honest job of dealing with a very touchy subject for many of us. Roger’s vital info is at the end of the post. Some interesting points made in this post, but the content is solely Roger’s (and may not reflect my point of view), I have not altered it (except for this annoying header).

10 Personal Mistakes as Confessed by a Financially Inept Person

The following list gathers ten of my favorite personal finance mistakes. I look back on these mistakes with a mixture of horror, shame, and humor. I like to think I’ve improved since committing these mistakes. I hope these are both funny and helpful to you. Whatever you do, don’t be like me!

1. The $38 Mocha Latte

I remember this morning well. I was on my way to teach my classes and decided to treat myself to a coffee. I had stayed up quite late the night before grading papers, so I wanted a better-than-average pick me up, something delicious and full of caffeine. I paid the $3 with my debit card because I had no cash, enjoyed my coffee, taught my classes, and then later discovered an overdraft fee on my statement. I now make sure to balance my register every week and leave a cushion in my account. I haven’t over-drafted since.

2. Drunk eBay!

In college, I had a few too many drinks one night and decided that I wanted a motorcycle. I bid on six different auctions, passed out, and awoke to six emails from the sellers congratulating me. They gave me a list of ways they would gladly accept payment. Of course I couldn’t pay the money, so I ignored their emails and eBay shutdown my user account. I no longer shop online after a few drinks, nor do I impulse-buy.

3. No Research, No Title

When I was seventeen, I purchased my first vehicle, a ’92 Ford Explorer, from a man out in the country. He had placed an ad in the paper and was selling cheap. I was so excited by the prospect of owning my own vehicle that I bought it immediately. I paid cash and didn’t get any paper work. I had done no research at all as to what was required in order to buy and license a vehicle, so when it came time to make it legally mine, I was stuck. The truck sat in my parents’ garage for a few years until my father sold it off as a farm truck.

4. No Emergency Budget

I have finally started an emergency budget, a separate savings account that I deposit a certain percentage of my income into each month. I started this because I recently spilled water on my laptop. Of course, I’ll have to replace it now, so the emergency budget won’t help me in that regard. But I figured that had I set aside some money beforehand, I wouldn’t be scrambling to find the money. My error, then, was not being financially ready to deal with emergencies.

5. No Insurance / Protection Plans

I used to turn down options to buy insurance or protection plans. When buying a computer or a phone, I turned down coverage. For my vehicle, I have basic legal coverage. My reasoning was to minimize my expenses upfront. All of that changed when I had to ship a rental violin back to a music store; I had forgotten to return it before I moved. A few days later, the store called to say that the violin was broken and that I would have to pay for a new one. Had I bought a protection plan, I could have avoided this expense.

6. No Haggling

Remember that ’92 Explorer? Well, when I went to pay for it, I handed the guy all my cash at once for the price he had listed it in the paper. He looked down at the cash and said, “Well, okay, but in the future, you should at least make an offer below the price.” This was a revolutionary idea to me, so I said, “Okay, well how about this much?” and he said, “No.” I paid full price on that one. Now I make sure to offer an amount I’m willing to pay, instead of buying a big purchase at advertised value.

7. Poor Record-keeping

When I first began working as a freelance writer, I used to save all of my business correspondence in my email account. This worked for a few jobs, but as I became busier, I began to lose clients because I failed to respond to them in a timely manner. Now I use an invoicing system that reminds me when things are due and what I quoted for the job. In short, my mistake was to not keep my finances, especially my sources of income, organized.

8. Too Many Credit Cards

I went through a stage when I had far too many credit cards. I had five at once, and in my mind I was organized in how I would use them. I thought that by separating my purchases into categories, I could better manage my finances. In fact, this just made everything all the more confusing, which caused me to miss a few payments. Now I only have a debit card and one credit card.

9. I Spent Against Money I Didn’t Have

I have too often succumbed to the temptation to spend against money I don’t have. When finishing a particularly big writing project, I would sometimes treat myself and spend money despite not having received payment yet. Once a client suddenly collapsed financially, couldn’t pay me as much, and because I had already spent against some of that income, I had to take out a loan from my parents in order to get through the month.

10. Delayed Investment

I regret, perhaps most of all, my having not invested any money when I was younger. I was hesitant to do so because I was unsure of how to invest correctly, and I was also more interested in spending my income than putting it away. I always thought that I could start later. Now that I’ve moved back in with my parents, I have a chance to start investing properly. Of course, I’m still relatively young, but I recognize already how much financial damage this delay has caused me.

By-line:

This guest post is contributed by Roger Elmore, who writes on the topics of hospitality management degree.  He welcomes your comments at his email Id: rogerelmore24 @gmail.com.

{ 4 comments }

%d bloggers like this: