Jumping to Conclusions

One of the biggest peeves that I have is folks’ inability to listen to a problem description completely before leaping to a conclusion. Given I work with engineers, mathematicians and the like, they can generally be described as “problem solvers”, and they enjoy showing that they can get things done.  Unfortunately, many times they jump to the wrong solution because they have not really listened long enough to figured out what the problem was in the first place (they have not taken the time to listen first and then synthesize a response after they have heard all the facts).

Let’s take a good financial problem, and see what conclusion you jump to?

Say you have a friend (Harvey) who is 52 years old, and he has realized that thanks to bad planning on his part he doesn’t have enough money to retire early (or possibly at all). He was hoping to have $3 million by the time he retired, and he haven’t even cracked the $1 million dollar mark in his RRSPs, and other investments.

A quick solution that I heard one friend blurt out was the following:

“Harvey, you are going to have to take more risks with your investments to try to compensate for the slow growth you are getting currently”

Seriously, this was actually a response, and on the face of it, it sounds like a possible answer, until you think that taking the existing moneys that you have and putting them in a more risky portfolio (with leverage, or something even more hideous) just means you could end up much farther behind.

Another comment was that Harvey was going to have to “beat the market” and of course the commenter knew of an advisor who has great success achieving this holy grail of investing.  My guess is that this is where lots of investors end up; in the Beat the Market trap (as you can tell after 30 years I have seen many folks who thought they were beating the market but didn’t quite get it done).

Finally, I mentioned to Harvey that another solution might be to start saving more money now, and/or paying down debt faster and maybe altering his lifestyle so that he could have a larger retirement fund later.  If neither was  possible, then simply abandon the idea of retiring early, and just stay diligent in your saving plan.

Which idea makes more sense? Oh and yes the Jump to Conclusions title is a reference to one of my favourite movies Office Space.

Office Space

The Jump to Conclusion Game (Click on it to go to Amazon to buy this Great Movie)


Men’s Health

It’s been a bit of a busy week so here is an important post I did a while ago about why men are idiots (about men’s health) when it comes to doctors and how Viagra might save a few men in spite of this.

More studies are coming out that are pointing out that thanks to Erectile Dysfunction medications (like Viagra) men seem to be getting healthier.

I said it, I meant it.

Men's health


Think about it, most men go to the Doctor when their arm falls off or their skin turns purple (i.e. never). “I’ll just walk it off”, or “Nothing to worry about”, are typical excuses by men, who believe that going to the doctor is a sign of being a Wuss.

I don’t remember who wrote this, but she was female, and she pointed out that if men poop’ed blood, they’d simply go to the bathroom with the lights off, so they wouldn’t have to see it (a very true statement about men’s health).

Then the MIRACLE of E.D. medications arrived. All those men who felt that somehow their virility was not what it should be, now started to flock to their Doctors to get themselves a “little blue pill” (or whatever the other pills look like).

How did this stunted (if not weird) conversation go between patient and Doctor?

Patient: Hey Doc.
Doctor: Hey Mr. X haven’t seen you since you stepped on that board with the rusty nail and got gangrene in your foot, what was that like 10 years ago?
Patient: Yeh Doc, I’ve been kind of busy, but I wanted to talk to you about a problem I’ve been having.
Doctor: Really Mr. X? What kind of problem might that be…..
{fill in your favorite uncomfortable explanation about how Mr. X.’s plumbing does not work the same as it did when he was 18}
Doctor: Well, I think we can do something for you, but I’ll have to give you a complete physical first.
Patient: What for?
Doctor: Well, if you have heart problems, or high blood pressure and I give you this medication you might die.
Patient: I guess so Doc, if I might die…

That is why Men may start living longer, because they want to have the ability to bang a nail in without a hammer. Their view that their partners will not love them unless they can do something for 4 hours, that most folks don’t do for more than 3 minutes.

An entire industry is now created around men wanting the ability to hang their hats without a nail, and due to this, men’s health has improved (in spite of themselves). Yes, we men are a very complicated species to understand, but at least now we know what might motivate us to go to the Doctor more than once every 20 years (aside from our Doctor’s having a stunningly beautiful receptionist).

Health is more important than wealth, but most men don’t figure that out until they are very unhealthy (and can’t get back to healthy easily either). Work on your wealth, but remember without health, all you are doing is making sure your estate has lots of money for your kids.

Go see your Doctor, if you haven’t seen him (or her) in more than 5 years.

If they could figure out this kind of association for Financial Health, just think where we might be?

 Oh and to add a financial spin on this, I own stock in Pfizer as well (for full disclosure). 


Pension or LIRA? A decision (redux)

One of the few good (read very lucky) decisions I made was to remove my money from the Nortel Pension and put it into a LIRA for holding purposes after I got laid off in 2008, and this post, I wondered (aloud), whether I had made the right decision, but in hindsight it was an astoundingly good decision (i.e. Pension or LIRA ).

Show me the Money?

pension or LIRA

Now that is some Ca$h (thanks to Bank of Canada)

For those who have read for a while, I had to decide about whether to leave my pension in my former employer’s pension fund (which is under funded) or to take a cash settlement and transfer most of the contents into a Locked In Retirement Account (LIRA) (and take the rest as a cash settlement).

I got a lot of advice from different folk about whether I felt confident enough to invest the money wisely enough to mimic or improve on the growth I might get in the Pension fund, however, in the end I just did not trust that my former employer will:

  1. Exist in 5 years
  2. Whomever buys, or takes over them will not replenish the pension fund short fall

So I have decided to take my money out, and move it to a LIRA (and a small part to a TFSA and whatever else I can into my RRSP, thus the pension or LIRA -> LIRA).

I tried to show as much diligence as I could to the documentation that I had to submit, because the default answer if I do not submit my request in time is for the company to keep the money in the (under funded) Pension. I had the Investment Councilor at the bank that set up the LIRA, check over to make sure all the forms had the correct info and then I had Mrs. C8j check everything over as well. No point in making this big a decision and not being careful with the forms.

I mailed the forms using Registered Canada Post delivery, so I have a tracking number and will know when then the forms were delivered as well (can’t be too careful here). Paranoid? Maybe, but again, it would be imprudent to trust regular mail with these forms.

Luckily the forms got there when they did, and I got the money out a few weeks before the Pension announced a large short fall and they started discounting all pensions. As a bit of background info, here is what Nortel’s demise looked like graphically.

Death of Nortel

Graphically, the Death of Nortel


Best of: The Safe Deposit Box, Our Friend

Another chest nut from the past, however, now with new rules, you will not be allowed to write off your Safety Deposit Box (next year starting March 31 2013 so in 2014) on your investments, keep that in mind!

The Safe Deposit Box, Our Friend

Safety Deposit Boxes

Safety Deposit Boxes

There are very few things in a bank I view as necessary, but one thing I do view as really important is my Safety Deposit Box. In my Safety Deposit box I keep bonds, an old stock certificate, and my wills. Why couldn’t I just keep those things at home? I don’t want to do that thanks. The advantages of a Safety Deposit box are many to me (my opinions follow):

  • I can write off the cost of my box rental as a carrying charge (in Canada you can do this), that’s good. I pay about $30 for the box, before my tax kickback on the write off.
  • This is OFF-SITE storage from my house. I should really put copies of my insurance policies in there as well, that way if someone breaks into my house or my house burns down (God forbid), I have a copy SAFE somewhere else. Might be good to put a home inventory in there too
    • I love writing in this blog, because many times I think of things while writing, I wouldn’t have!
  • The bank is more secure than my house ever will be. Safety of this information is really important, and someone else worrying about it, is one less thing for me to worry about.
    • Who is going to break into a bank and then find my safe deposit box, and then steal what is in it? Maybe someone reading my blog? Hope not :-).

These reasons are why I have a safe deposit box, and not a home strong box, or wall-safe to protect my important papers. No matter HOW you decide to protect your important papers and information, DO IT! Use a Safety deposit box, a strong box, a wall-safe, but keep those papers safe! It’s important. It’s all part of the Financial Plan.



Calendars and Finances

How many times have you missed an important payment because you forgot when it was due? My guess is not that many times for most of you, but still a few folks this will trip up on dates and such (I do it for credit cards once every few years, and then have to phone up and plead to have interest rates reversed).

My wife is starting to learn some of the advantages of using some of the Electronic Calendars that are out there, in my case I use Google Calendar as the center of my scheduling world (it’s free, and Google backs it up for me), and then other clients connect to it (Outlook, iPhone Calendar, etc.,) to get information from it, so if it is not on my Google Calendar, it most likely won’t get noticed. One thing I did notice that Quicken had this “sync with Outlook” button, so I turned that on, so now Quicken adds events, to Outlook, which in turn (hopefully) adds them to Google Calendar, which means I shouldn’t miss too many more bills and such.

A beautiful hand made clock

Time Flies Make Sure You Track It!

The danger with having too many things in your calendar is you may ignore some of them (calendar clutter), but I don’t schedule my day using this, so there are fewer things in my calendar. I know some folks who use their calendar to make rigid schedules, to force themselves to keep on track, I can’t do that, but I do need something to REMIND me when important things need to be done.

I did point out in if it’s not written down, that if you don’t keep records of what you have done financially how can you remember if you did it, and using an electronic calendar that way, also gives you a record of when you did stuff (passe compose), so keep that one in mind as well.

Many times I have forgotten when I visited with the bank or paid bills, but I can now check my electronic time ledger to see when things should have happened (it’s always good to update things to reflect you did it as well (i.e. if you have a Bill on your Calendar update it when you paid it with Credit Card bill *PAID* or something good like that)).

How do you keep track of your important dates and when things need to get paid? Do you simply automate those payments?

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