Resoled Shoes and A Budget

Jim Flaherty is poised to announce his new budget and instead of the tradition of the finance minister buying a new set of shoes, instead he had his existing shoes re-soled, which I think is a message to say, “Tighten your belts folks, leaner times are ahead” (at least that would be my spin on it). Interesting that he can make that statement given the government is about to announce a $13Billion surplus, which will mostly be used to pay down the national debt (which I agree with as a tactic for using surplus spending, however, I am not happy with the enormity of the surplus itself).

Some new measures may be brought in but it is unlikely to effect (affect?) my wallet too much. The fact that this is the 3rd budget for Mr. Flaherty for a Minority government is quite the achievement.

Stock Options

I have worked in High Tech all of my career, but I think I am one of the few folks who never, ever had a chance to cash in a large amount of stock options for their company. I just never got options until very late in the game and then they became worthless quickly. I state this as a preface (and as a whine as well).

Yesterday I sat down with a couple of co-workers and this topic came up and I was shocked to have them both admit to me the amount of money they “left on the table” with their options. I am assuming they did make some money on options, but the amounts they both quoted me as potential profits they didn’t act on caused my head to spin (well over a million dollars combined).

Why would you leave that kind of money on the table? Here are some of the reasons I know of:

  1. The options had not fully vested. In this instance I don’t view that as lost money, since you were unable to do anything about this, and you shouldn’t beat yourself up about this “lost potential money”.
  2. I thought the stock would recover. I guess we can see that one, was not a good strategy, in hind sight we can see you should have taken the money and run.
  3. I was waiting for the Stock Options Tax changes. That one had me scratching my head, but I guess it’s a valid reason.
  4. I bought the stock with my options and then held it to live on dividends and capital gains. That one is the most lethal mistake that I have heard. These people really did lose money on this, because they spent the money on the options and then got nothing for that money. The previous three “mistakes” didn’t lose you real money, it just lost you potential money, this one lost real money.
  5. My options were never worth more than a $1000 ever . That is my excuse, I feel like the Eunuch at the orgy sometimes, never got anything out of this whole thing, oh well.

At the end of it all, lost potential money is much like Love Lost, not much you can do about it, so you might as well forget about it.

Any other High Tech Stock Option stories out there?


Back Up Your Computer

Computer Perils

So the cogitations and expletives that have been expounded by me in the past few days have been due to my computer being sick. The hard drive crashed yesterday, but luckily not too badly. I will now spend a day or two cleaning up my system, due to my pack rat software installations.

What does this have to do with Financial Planning? I run Quicken on this machine and I have most of my excel workbooks for finance here as well. If this computer had died with no back up, I would have been SUNK. When was the last time you backed up your computer(s)? If you are doing anything on line for your financial well being, you might want to think about that one.

Long Term Mortgage Rates Going Up

If you haven’t locked in long term, it is going to cost you more today to get a long term Mortgage. Most of the major banks are guessing that interest rates will go up in the long term, so they are raising their long term rates to hedge against this. Long term bond yields have been up, and inflation is still above what the bank of Canada wants, so they may be right.

A Sea of Red

No, not my finances, the Liberals rolled to power again in Ontario. What does this mean? Well I think it means John Tory is as much a success running the Provincial PC Party as he was CFL Commizar. Four more years of Mr. McGuinty, wonder if he’ll start off his new term the way he did the last one (with a massive Tax increase)?

How much for a new house?

Well if you don’t live on the Prairies, your new house price is slowing a great deal, however, if you do live on the prairies, that is another story. Where I live the increase is less than inflation, so that is cool, but in Saskatoon, over 50%?!? Holy crap!

New Housing Price Indexes
August 2007August 2006 to August 2007July to August 2007
(1997=100)% change
Canada total155.16.50.4
House only165.16.00.6
Land only135.67.80.1
St. John’s137.84.51.2
Saint John, Fredericton and Moncton114.40.80.6
Toronto and Oshawa141.72.40.4
St. Catharines–Niagara151.74.31.1
Greater Sudbury and Thunder Bay106.34.10.4
Note:View the census subdivisions that comprise the metropolitan areas online.

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