Smart, rich....women

We've moved!

2010-04-01T09:56:00.001-07:00

No, it's not an April Fool's joke, we've actually moved to our new blog site. Check out Smart, Rich...Woman!

March To-Do

2010-03-01T09:14:00.000-08:00

It may actually be time to start doing taxes...

Check out Quicktax online if you're doing your own taxes. Look for a link from your online bank to save up to 20%. You can do your taxes for about $14 vs. $40 with a tax preparer.
Wished you'd contributed more to your RRSP or started a TFSA? Start now with monthly contributions! $100/month is a low and modest start (and remember, with a Tax Free Savings Account, you can withdraw the money when you need it with no tax implications).
Spring cleaning! Take a weekend to go through all your papers, drawers, clothes, etc. Donate or swap your unused items.
March break! Schools have a two-week break this year from March 6-March 22 so be aware of extra kids running around your neighbourhood.
Take the time to stop and smell the flowers. :)
As always, email me if you have questions about anything financial or insurance!

It's RRSP time!

2010-02-16T14:58:00.000-08:00

Some people call February "RRSP season" as it is the last month to put money away and get a 2009 tax deduction for the contribution. An RRSP (Registered Retirement Savings Plan) is a vehicle designed to tax-shelter your savings for retirement. Because it is just a shell, you need to actually chose what your money is invested in. Choices include:

savings account (can transfer money at any time)
term deposit (locked-in for a time period)
funds (segregated or mutual)
stocks

March 1st is the last day to make an RRSP contribution for 2009. This will lower your taxable income and result in owing less taxes or a tax refund. You can contribute up to 18% of your income to a maximum of $21,000 or whatever it says on your notice of assessment from last year. Don't forget that you cannot deduct the amount that is designated as a repayment for the Home Buyer's Plan (borrowing to buy a house) or the Lifelong Learning Plan (to go to school).

In some cases, it may make senses to get an RRSP loan. In most cases, it makes more sense to start a monthly contribution (called dollar-cost-averaging). Best of all is a group RRSP - the money is deducted from your paycheque, making it the best bang for your buck as it is taken before taxes.

Speaking of taxes, check these tips out from CRA.

Feburary To-Do

2010-01-31T23:28:00.000-08:00

Some call it "RRSP" season, I call it pre-tax season. What should we be looking at this month?

Groundhog Day is February 2nd - check for the forecast (my guess is, Victoria will have Spring starting next week)
As T4s and RRSP slips start arriving in the mail, file everything in your 2009 tax folder.
Print off/find all your charitable donation receipts.
Try to suss out your tax situation (hint, your bank may have an online version that doesn't charge until you file) and make your RRSP contribution (if needed) before March 1st, 2010.
Don't forget about Valentine's Day! A nice dinner with a bath or movie makes a great night with your lover or friends and doesn't cost gobs of cash in chocolates or flowers.
Now that the New Year's resolutions are starting to fade in memory, head to the less crowded gym!
Gave your credit card a little vacation in January? I bet it wouldn't mind a little more time in hibernation.
Automate your bills and save yourself forgetting or missing it while on vacation in Mexico next week.

January To-Do

2010-01-19T16:33:00.000-08:00

Feeling like this is the month to get things done? Is time slipping by too fast already? Well, let's get to it!

Tackle that mountain of paper! Sort your documents into file folders: Banking, Insurance, Taxes, Investments, Housing, Guarantees/Warranties/big item receipts, Credit card statments/bills, etc.
Renew your dog licence (if applicable)
Make sure your resume is up-to-date (not just for job searches, may be necessary for a promotion, board member position, etc.)
How's the car running? Need an oil change? Brakes fixed? Tires rotated?
Thank you cards from Christmas
Check your property assessment that came this month (if you own) - is it accurate? Go online and check your street's houses
Heading to the gym? Try and go in off-peak times to avoid everyone else trying to work off the holiday treats
Make up a quick meal plan - things you can make and eat within 20 min. One weekend, make a lasagna and chili and store individual portions for lunch or a quick dinner.
Clean out the closet. Ok, you've had it for a year and didn't wear it to that wedding, office function or holiday party, time to say goodbye
Get your finances in order - book an appointment with your advisor to review your insurance, mortgage and RRSPs or other investments

Happy New Year!

2010-01-05T15:20:00.000-08:00

I hope you all had a wonderful December and a great start to 2010!

As the credit card bills start rolling in with the bleak truth of what we spent during the holidays, remember: Spring Break is coming! But really, January is a time to regroup and refocus, not just on your 2010 goals for work, health and finance but on your future goals and how you will achieve them.

The gym last night was packed with those getting back to the treadmill to shed the feeling of overindulgence in the treats department. Many people will be giving their plastic money card a break this month in an effort to trim this month's spending total. And then there are those who restrained themselves and started January feeling fresh-faced (well, January 2nd anyway) and flush with cash to spend on the sales. These are the exceptions, rather than the rule, and to those people I say congratulations!. To everyone, I say 2010 is a new year and it's going to be a great one!

The Christmas Cash Trick

2009-12-27T19:14:00.000-08:00

This holiday season, how did your poor wallet do? I found a funny thing this shopping season. I cashed a paycheque (as in, I got the whole thing in cash). After paying for a face lift for Foxy (the car), I still had a few hundred dollars in my wallet. It was weird. Here I had all this money I could spend...but I didn't want to. I didn't want to part with those $50 dollar bills. I didn't want to watch my hard-earned dough turn from red to green to purple to blue to silver and gold and eventually silver coins. I wanted to hold on to the cash as long as possible. What was wrong with me? I had no problem whipping out the gold visa card whenever possible (but I get airmiles!).

Another thought occurred to me...I hadn't set a Christmas present budget. Here I was at Ikea and I hadn't really written down how much I planned to spend. Certain disaster sure to strike, I mentally did some math and came up with a per person max. Except I'd already bought those Moulin Rouge ballet tickets online for my mom and sister...

Things spiraling out of control, I vowed to hold onto as much of this cash as possible, leaving Ikea with some left, if possible.

Sound like your holiday? And after those boxing day sales? Your wallet got a boxing alright and you left stores with the sound of the cash register's ca-ching in your ears.

The good news is: January is soon upon us and a fresh start to the New Year!

Oh, and Ikea? I finished off the rest of my Christmas shopping and the rest of my cash but didn't go over and resort to putting the excess on plastic.

Movember! Changing the face of men's health

2009-11-03T16:28:00.000-08:00

This month, many men throughout Canada will be sporting fuzzy upper lips when they are usually clean-shaven. This is in support of "Movember" an annual November moustache awareness campaign to raise awareness and funds for prostate cancer research and support.

Prostate cancer is mostly curable (90%+) if caught early enough. With 1 in 6 men being diagnosed in his lifetime, it is crucial that men are aware of how important testing is. Early testing is so important that insurance companies offer an advance benefit for early detection. With critical illness policies, the full amount is payable for life-threatening cancers. However, for early diagnosis of prostate cancer (stage T1a or T1b) an advance of up to $25,000 is given. This is where it pays to get tested!

Be sure to spread the word so that we can reduce the number of men lost to prostate cancer (estimated over 4,000 in 2009). Look around and see who's participating this month and check out www.movember.com.

Insurance that pays you...to live

2009-09-23T18:31:00.000-07:00

We all know that life insurance only pays you once - when you die.
And disability insurance pays you every time you are unable to work because of illness or accident.
And health & dental insurance pays when you need to go to the dentist or physiotherapist.
But what kind of insurance pays when you're really sick but then get better?

This is critical illness insurance. CII (as it's known) was created by Dr. Marius Barnard in 1983 (Dr. Barnard was on the team that did the world's first heart transplant in South Africa in 1967). CII has been sold everywhere around the world as it was designed to help save a person's financial life when their physical life was saved. Dr. Barnard would see heart transplant patients living longer and longer yet their lives in financial ruin due to their inability (or unwillingness) to go back to work and the high cost of their treatment. Even in Canada, where we enjoy "free" health care (we'll ignore the MSP premiums for now), certain cancer drugs are not covered and neither is the cost for your family to take time off/travel and stay with you during treatments.

CII pays a lump sum after you survive a critical illness for 30 days. Covered conditions can include all of the following:

Alzheimer’s Disease
Aortic Surgery
Aplastic Anaemia
Bacterial Meningitis
Benign Brain Tumour
Blindness
Coma
Coronary Artery Bypass Surgery
Deafness
Heart Attack
Heart Valve Replacement
Kidney Failure
Life-Threatening Cancer
Loss of Limbs
Loss of Speech
Major Organ Transplant on Waiting List
Major Organ Transplant
Motor Neuron Disease
Multiple Sclerosis
Occupational HIV Infection
Paralysis
Parkinson’s Disease
Severe Burns
Stroke

Since about 80% of claims arise from stroke, heart attack or cancer, a basic policy can be obtained with just those three conditions covered.

Want to protect your financial life? Apply for Critical Illness insurance and give yourself the benefit of having a plan.

Credit cards tips and tricks

2009-08-18T13:59:00.001-07:00

There's often talk about the perils of credit cards and people drowning in 20%/month interest debt. I think credit cards can be invaluable. They can help you build a credit rating and help you out in an emergency (plane ticket for family emergency, not new shoes). Some cards offer cash back and airmiles. Many couples I know are using their cards for everything and earning enough airmiles to fly back to visit their hometown. These same couples are paying off their balances in full every month. Which leads to some tips:

1) Pay off your balance in full every month. If you can't pay it off, why are you spending the money?
2) If you are carrying a balance, try to pay it off with a lower-interest line of credit or an introductory balance transfer with another card.

And the tricks may be on the part of the credit card companies. The balance protector insurance that many people have (and MBNA tries to get me to authorize every time I'm on the phone with them) isn't as good protection as many think. At about 88cents per $100 of balance, this insurance protects you in case of job loss, for example, and pays your minimum balance while you're out of work. If my balance is $1000 and my mimum payment is about $10, why would I pay $8.88 every month for this insurance? CBC's marketplace did a great 16 min. expose on this.
One last tip: credit cards should be thought of like cash - if you don't have the money, don't spend it. That piece of plastic is not a licence to spend money you don't have.

Where there's a will, there's a way...

2009-07-14T10:58:00.001-07:00

Do you know what a will is and why you should have one? In the news last year was the unfortunate example of what happens when you don’t keep your will updated: Heath Ledger’s will hadn’t been updated in close to five years, meaning that his daughter wasn’t taken into account. Fortunately, the grandparents have pledged to help her out and in most cases when a young person dies, his or her children would be taken care of by the grandparents. But what if this isn’t the case? What if the person who ends up with the assets of your estate is not the same person who becomes the guardian of your child(ren)?

Also mentioned in the article (and others) is the value of Heath Ledger’s assests. Wills are public documents after death and any property, investments, bank accounts, etc. in your name will be revealed. Jointly held assets and trusts are not public and not subject to probate fees. Probate fees arise when your will goes through probate (will approved in court and executor appointed). Many estate planning tools try and reduce the number of assets that will need to go through probate. For small estates, the probate fees are minimal but for estates worth more than $50,000, the cost increases (about 1.4% of value of estate).

For more information about wills and estate planning, check here and an excellent online booklet from the People’s Law School in Vancouver:

Nothing, of course, takes the place of a lawyer and their advice but it is a good idea to have an overview about your needs and terminology before a face-to-face meeting for which you will be billed at an hourly rate.

Every time you have a life event (buy a house, get married, have children, inherit money or property), you should update your will. This is especially important for naming a guardian for your child(ren) or for modifying the bequests if you get divorced.

Remember that your will most likely will not get read until after the funeral so all details about your funeral and burial should be discussed with loved ones or a funeral home (and instructions left with someone).

Planning your affairs for after you pass away shouldn’t be depressing. It’s not about death, it’s about making sure that your wishes are fulfilled and that those you care about are taken care of.

I have resources available if you should need them including lawyer referrals, organ donation contacts, and what to do upon death. If you are interested or in need of anything, please let me know.

A money making machine!

2009-06-22T18:14:00.000-07:00

If you had a $50,000 car, would you insure it with collision insurance? Sure you would. There are crazy people driving around out there.

What about $50,000 worth of stuff in your condo or house? Of course! There's an extremely slim chance of a fire, a robber or an earthquake!

What about if you had a $50,000 money-making machine in your basement? It prints off $50,000 a year but anything could happen to decrease it's money-printing ability to $30,000, or worse - nothing. Would you buy insurance to keep getting almost as much output, even if it was broken?

Since joining the insurance business, I've been pleasantly surprised at the responsibility of some folk and the amazing abilities of many to pay bills and put food on the table while supporting a partner in school and/or three children. For a single gal (well, unmarried) with monthly expenses under $1000/month (phone, food, "rent", insurance, gas for car, savings, taxes), I suffer "cost-cutting" measures by not being able to buy a new pair of shoes. But just because I may have the money to pay for insurance, doesn't mean I want to. But I do. Why? Because I've done the math and I know a few things are true:

Insurance costs go up as you age. I scrambled to get applications in before I was considered a year older because I didn't want to pay even $2 more per month for the rest of my life. This doesn't matter with car insurance - the reverse is true - the older your car, the cheaper it gets!
Death is guaranteed. There is a 100% chance that I will die in the next 100 years (unless there's some crazy medical advancement that keeps people living to 150...but I can't imagine it would be much fun). I like the idea of future spouse and children having money for my funeral and not taking it out of their own pockets.
The statistics for disability and critical illness occurrences are not good. The recovery rates are. As much as I believe in just barely enough life insurance if I pass away, I believe more in as much money as I can insure myself for in case I can't work or get sick. I personally think that if I needed to, I would be on the next flight to the Mayo clinic. It would make it a lot easier to do if I wasn't maxing out my credit card, second mortgaging the condo and raiding my parents' retirement fund.

It baffles me when people tell me they can't afford to protect their family or themselves for a worse case scenario. Do you drink Starbucks, have collision insurance on your car, go out for dinner, buy a drink at the pub, go to the movies? There are way cheaper ways to do any of those things and if you don't have them, it's probably not going to be financially crippling (unless you drive a porche...in which case you may need to sell your house). Having protection insurance on yourself is a no-brainer.

By the way, YOU are the money making machine (so if you're making $75,000+/year, imagine the risk you've put yourself in).

397 Ways to Save money...

2009-06-02T12:04:00.000-07:00

Another blogger reviewed Kerry Taylor's new Book 397 Ways to Save Money. In a recession, books like these are super popular (and I've actually bought a couple - 'Fight for your money' and one on saving money by going green). I am a firm believer that everyone should be managing their finances responsibly all the time, not just when people around them are losing their jobs. However, if the current economic condition is what will spur you to act on savings, then all the power to the books and articles on how to do it.

The key is to actually take action! If a tip says to reduce your debt by calling your credit card company and get your interest rate reduced, do it. If another tip suggests saving hydro costs by unplugging your appliances, turning down the heat and changing the lightbulbs, do it. If there's a tip to save transportation costs by leaving the car at home and cycling to work, seriously do it. For those three things alone, you could save a bundle each month. Paying 9% interest on $5000 will cost you $37.50/mo. vs. $75 at current 18% credit card interest rates. If you can save 10% on the hydro (in a condo, that's only $2.50/mo, but that's a muffin!) and buy one less tank of gas a month (at 1.07/L) that's over $50/month. I just found you $1000/year.

Now, imagine what another 394 ways of saving could do for you...

30 years from now...

2009-05-08T15:00:00.000-07:00

This morning I was talking to a lady who was telling me why she used a walker. She had broken her neck, collar bone, and a tooth in November. She is 86. I said it was great that she was out and about, mobile and still able to volunteer for the MS society's Hope Campaign. She said she'd been volunteering for MS since 1966. That's a long time, I said. Well, I was in my 40s with three kids and needed something to do. And she's been doing it ever since.

This afternoon, I got to thinking: in 1979, this lady was 56. Let's say her and her husband planned to retire 10 years later (1989). 30 years later, how does that money look? Well, a 1979 dollar is now only worth 34 cents. In other words, something that cost $100 back in 1979, now costs $292. That's almost three times as much! Thanks to inflation (check out the inflation calculator), the value of a dollar decreases over time.

Here's the scary part. Let's say a 55-year-old couple today is hoping to retire in the next ten years. They've actually been contributing on and off to RRSPs since they were in their late 30s, ramped it up a bit in their late 40s, lost a chunk last year and now have $100k. They've decided to put in $10k/yr and hope to earn an average 5% over the next ten years. This'll make them about $300,000 by retirement (check out the compound interest calculator). If they plan on living until 95, they'll have about $17,000 per year to live off of (assuming the 5%). To have a combined income of $50,000 (today's dollars) to live off, this couple would need to save an additional $40,000/yr. The numbers don't get much better if the interest rate increases (which it probably will), they still fall short of having a livable income. On the up side, because their income is so low, they won't have any OAS clawbacks.

Assuming an average 2.5% inflation and 10% interest over the next 35 years, if you start now with $350/month (increase with inflation), you'll have just over $1million at retirement. This will fund a $40,000/yr income (indexed to inflation) at 8% return during retirement. If you want more than $40k/yr, you'll have to save more.

Shouldn't we all be trying to max out our RRSPs anyway? Yes! If you make $50,000/yr and max out your RRSP at that income ($9,000/yr), you'll have $2.4 million at retirement. Sound like too much? Not if you're hoping to have an annual draw of $50,000 at retirement...in 2044 dollars, that's almost $120,000 per year! And the illustration assumes an average 10% return...which is fine and dandy until an abnormal year like we just had.

Bottom line: have a plan and save what you can.

Make up the difference in your portfolio

2009-03-19T09:47:00.000-07:00

Tired of reading the doom and gloom headlines leading up to the announcement of a recession and hearing the stories of our friend's grandma who lost half her life savings and now has to eat porridge three meals a day? We're told to keep holding on to the investments we have because selling them would crystalize our losses. Some people are borrowing money to buy stocks at lower values, further leveraging themselves.

Despite the slight rebound we've had, we still have a ways to go. What can be done to make up the shortfall? To earn the money back, you'll need to play smart by reevaluating your investor profile and researching those companies before you buy their shares. In the meantime, if you think there's a possibility you may need this money before the value is back to what it was last summer, you'll need to plan to make up the difference somehow.

Why would you need to draw from, or the full amount of, your portfolio?
* You are leaving it to a beneficiary
* In case of disability
* In case of critical illness

If any of the above happened and your portfolio's down 35%, do you want to start taking money out of it? Unlikely, but you will if you need to. Depending on what your top priority is, you can insure against it. For seniors who hope to leave their full portfolios to grandchildren, they can insure themselves for the difference. For self-employed people who should have disability insurance, they can estimate their basic living costs and insure that. For everyone else who would only tap into their RRSPs if they were critically ill, critical illness insurance can make up that difference.

34 yr old male, smoker, $30,000 life insurance for 10 years = about $10.50/month (female smoker = $9.30)
64 yr old female, non-smoker, $50,000 for 10 years = about $35/month

34 yr old male, non-smoker, $50,000 critical illness for 10 years = about $18/month

33 yr old female, non-smoker, $1200/month disability benefit = about $33/month (male = $26.50)

Is it worth the $35 or less per month to protect your investments? It's up to you.

Smart tips

2009-03-18T15:46:00.000-07:00

As the title of the blog suggests, I like to find good tips or things of interest to help you save money. Here are some things that have worked for me (practice what you preach!).

Never pay the minimum payment. If I paid the minimum payment on my student loans, I'd still be paying them off when my kids started university. Ditto credit cards - if you have a $5000 balance (and don't spend any more on it) at 10% interest and are paying the minimum payment of $54/month, it will take about 15 years to pay off and end up costing over $9,600!
Negotiate your interest rate for your credit card. And not just for balance transfers (those 1.9% promotions that you need to pay off within 6 months or the interest jumps to over 20%). I'm talking about a permanent rate reduction. This only works if you're not drowning in debt, don't have a rewards card and have a good credit record.

Pay off your credit card in full.
Call the credit card company and ask to speak to a supervisor. Why? It's about possibly canceling your card.
Tell supervisor you've got a better rate on your other card or you've been offered a better rate with a competitor. Be honest - know your stuff.
Ask for a matching rate or for your interest rate to be slashed.

Pay off your mortgage faster (or loan or credit card). Increase the frequency of your payments: A $200,000 mortgage at 5% over 25 years can be reduced to just over 21 years by paying bi-weekly and increasing the min. payment. Use your tax refund to put lump sum payments on your mortgage to accelerate the payoff.
Keep your money in your pocket, instead of the government's. Being self-employed I currently have the option of keeping all my hard-earned cash all year and paying it the following April. Do I like writing a cheque to the Receiver General for thousands of dollars? Of course not. Do I like the fact that I have thousands of dollars throughout the year to earn me money? Yes. How can you do the same?

Ask your employer to adjust the amount of tax being deducted. You need a reason for this: school, RRSP contributions, etc.
Contribute to a Group RRSP (and encourage your employer to get one if you don't). By using pre-tax income to put in your RRSP you see less of a difference on your paycheque. In other words, instead of you taking $100 from your pay and putting it into an RRSP, your employer deducts $85 from your paycheque (this amount varies depending on your marginal tax rate, but you get the point). If your employer does RRSP matching that equals free money. And since it doesn't grow on trees, take the free money!

Green-ify

2009-03-09T12:43:00.000-07:00

Want to save the environment while potentially saving yourself time and money?

Save paper.

Eliminate the need to recycle junk mail when it comes - take yourself off the Canadian Marketing Association list.
Stop getting bills! If you pay your bills online, get them online too. Sign up on your provider's secure site. Make sure that you enter your email address so you get notified when your bill is ready. Better yet - make it automatic. $50/month to Bell saves me forgetting. And on the 15th of each month I go through my accounts to see who needs top-ups (overused the credit card or had a long chat with my buddy in California). By paying bills automatically, you can set your savings plan up without worrying what will be left over.

Eat smart.

Buy local. You know how far those Mexican tomatoes traveled? Buying local produce supports the local economy, is better for your health and is better for the environment. Plus, the more you pay attention to what you're eating (ie. start preparing meals at home), the more you save. Making carrot soup is cheaper than buying it (and think of the production/packaging/trucking costs!).
Feed your baby yourself instead of letting Gerber do it. Puree vegetables and save money on the food and the cost and energy of recycling all those little glass jars.
Eat less meat. Raising animals for tasty treats is a drain on our environment. Eat one less serving of meat a week (beans are an excellent alternative) to help reduce the meat impact -- more so than driving a hybrid car.

Green your home.

Bathroom: dual-flush toilets, low-flow showerhead, every other time flushing, tap off while you brush teeth/wash face, 5 minute showers...this will save water and get you to work on time!
Living room: unplug your unused appliances -- 'Phantom loads' can account for over 5% of your energy consumption. Replace your lightbulbs (and turn off lights when you're not in the room!), buy Energy Star appliances, clean with natural ingrediants instead of chemicals, do laundry in cold water and hang to dry. A reader pointed out another key way to save money on heating: programmable thermostats.

Drive less.

If you can't bike/walk to a certain destination, try: carpooling, doing all errands requiring a car on one day, driving a fuel-efficient car, keeping your car in good condition (please don't have a minivan that spews black clouds out the back on the highway!).

This post written with lots of input from David Bach's book Go Green, Live Rich.

Dreams of home ownership

2009-01-12T16:43:00.000-08:00

The 2009 property assessments just came out and they can be good news and bad news. The good news is that your property taxes are probably the same as last year because the assessment is selling price as of July 1, 2007 - which determined 2008 property taxes. Since 2009's property assessments are the lower of 2008 or 2007, most people will have the 2007 value. However, this means that the assessed value of your house/condo/cottage is whatever it would have sold for two summers ago. Ouch. In some cases, this could be a $50,000-$100,000 difference - which matters if you are looking at your mortgage statement and the equity you've built (which could be a negative number if you bought last Spring).

If this isn't enough to scare you away from buying right now, rumours of property values declining by another 20-30% may do it.

When the time comes to get in on the market, though, will you be ready?

What's the best way to save for that down payment (since no-money down mortgages have gone the way of the dodo)?

1) In your RRSP and withdraw through the Home Buyer's Plan
2) With the refund from RRSP contributions, contribute to your Tax-Free Savings Account (tax-free withdrawals)
3) After maxing out your TFSA, in secure investments like T-bills
4) Win the lottery

Book reviews 2009

2009-01-05T12:28:00.001-08:00

Two excellent books that hit the shelves recently:

Findependence Day by Jonathan Chevreau. It's sort of like the Wealthy Barber (which I couldn't get through), but more topical. I found it useful as the couple the book follows is 28 years old in 2008/2009. The first thing their financial advisor tells them is to get rid of their debt before doing any saving. Now, I don't completely agree with this as not all of us happen to have a rich grandparent who conveniently dies right at the time we're putting a down payment on a house. So, saving for a down payment is a first priority, in my mind, in conjunction with aggressively paying down debt.
Fight For Your Money by David Bach. Want to pay less interest on your credit card? Need a cheap vacation? Think you're paying too much for your cell phone bill (know you're paying too much?). Fight For Your Money shares the tips and tricks that some of us know and all of us should employ to keep more money in your pocket.
Rich by Thirty : a young adult's guide to financial success by Lesley Scorgie. Rich by Thirty explains things like mortgages, mutual funds, compounding interest. A good introductory book. The sooner you know this stuff, the better. And it’s not too late!
Go Green, Live Rich by David Bach with Hillary Rosner. If you thought 'going green' was just for us hippy folk, learn how much less you could be paying in car costs, energy costs and baby costs.

I've never lost a million bucks...

2009-01-05T12:02:00.000-08:00

Trying not to get sucked into the YouTube Vortex, here are a couple of good historical videos.

A ten-minute clip from a documentary goes over the lead-up to Black Tuesday. Some very chilling parts: "...the anguished shrieks rose up from the floor of the New York Stock Exchange..." and outside there was a "collective moan of horror and grief" that "echoed off the stone facades..."

Watch this video for a good lesson: "If you buy stocks, buy them with your own money."
And a little extreme, but then again I've never lost a million bucks and I'd never spend $25 grand on a chinchilla fur coat.

Next: Should we all be buying stocks?

Should we all be buying stocks?

2009-01-05T11:53:00.000-08:00

People have been asking me my opinion on buying stocks while they are considered undervalued. I'm not a stock broker nor an economist so the only thing I can say is that if you have money to invest, putting it into stocks may be a good choice for your situation.

I agree that there could be some good opportunities for investing right now for people with money (and money to lose). However, I'm not sure if that would be in oil, etc. as we don't know how things are going to turn out. (Here's some info from the web for investing in oil.)

I can only strongly encourage you to tread very carefully in this investing minefield. Yes, you could be missing out on some great gains but some people just aren't in a position to buy stocks (or futures - where you buy a commodity, hoping it will rise in price).

The bottom line: buying up some cheap stocks would be fabulous if I could see the future and how much I'm going to make before I need the cash. Investing requires cash (and borrowing, called leveraging, can work but it's very risky). I'd rather buy a house in the next couple years than worry about my stock portfolio. The most important thing for most young people is to set the groundwork and foundation so that next time something like this happens (and it will - as history has shown us), we can take advantage of it then. But as far as stocks go, I'd wait. However! If you do find yourself with a few thousand dollars, you could research and find yourself a strong company with shares that pay dividends, for example.

Good luck!

Are you in the bubble?

2008-12-19T13:07:00.000-08:00

We've seen the frightening headlines about the market crashes, the failing economy, the announcement that the States is in a recession...but how does it really affect the average 28-yr-old in Victoria? Well, it doesn't if you live in a bubble.

Who's in the bubble? Single professionals who don't own properties (and therefore don't have giant liabilities) and have secure jobs (mostly government). This includes almost everyone I know. Talking to younger folks (and not-so-young, too) who don't hold RRSPs that are rapidly shrinking (or they don't open their savings statements because they aren't worried), they're cutting back on spending because that's what the media is scaring them into doing. They hear the horror stories and it doesn't affect them...yet.

But, it will start with hearing about your aunt in Oshawa getting laid-off from her GM-related job at the tool&die shop, then you'll hear about all your ex-co-workers in Victoria getting laid-off, then your buddy on the East Coast...and so it continues. So, you start worrying about your job. You thought it was secure...maybe you shouldn't have paid off those debts so aggressively or bought that new snowboard for yourself for Christmas. Then you open those RRSP statements and *shock!* you're down 47%.

Well, what can you do? Prepare. This isn't the first crash and it won't be the last. The best thing to do is learn from this experience and set yourself up so that when it happens again you won't be like your friend's dad - 58 and planning to retire in April...but now can't.

How to prepare? The long quoted advice of budget and don't spend beyond your means still stands. Conservatively, pay off those debts! Start an emergency fund (three month's expenses at the very least). I have bad news for those thinking they could rely on EI: you would get 55% of your salary up to a maximum of $435/wk. Can you pay your expenses receiving 55% of your monthly income? Didn't think so. Oh, and p.s. that $435 (if you make over $41k/yr.) is taxable. Don't get stuck! Plan ahead. Starting a savings plan now (RRSP or TFSA) will start you on the right track and help avoid having to invest heavily in equities at age 55 to try and retire by 65. You want to be sitting pretty 5 years from retirement, not scrambling around to keep working because you lost tens of thousands of dollars in a market crash.

Beware: bubbles can pop.

BC government attempts to stimulate the economy

2008-12-08T20:25:00.000-08:00

Today's mail included a newspaper layout-sized spread about the different initiatives the government is introducing to stimulate the BC economy. Most are fairly significant and I think most residents will benefit in one way or another.

* Tax deferment on property taxes. For 2009 and 2010, the government will pay property taxes, as a loan, for those homeowners who are experiencing financial hardship due to the current economic situation. This deferral of taxes is charged at prime interest rate and does not need to be repaid until the home is sold (but repayment can happen at any time). For individuals who have just lost their job or can't work (because of disability, etc.) and who may have turned to their RRSP to make up the extra $200/month (for example), the property tax deferral could be an option for them.

* Property assessments for 2009 will be the lower of 2007 or 2008 levels to reflect the true (ie. non-overinflated) property values most areas are now seeing.

* BC Ferries winter discount! 33% off all routes until end of January PLUS fuel surcharge has been cut 50% and is being phased out by December 19th. This meant a savings of about $45 return last week when I went to the mainland and back.

* Bank-held RRSPs to get creditor-protection through new legislation. Currently, only insurance company-held RRSPs are protected (among other benefits). This is a move to protect more of BC residents' hard-earned savings -- including deposits to credit unions.

* Lower taxes! Most families will see up to a 37% tax reduction for 2008.

More balanced budget stuff.

Full BC's Economic Plan outline here (online version of above flyer excerpts).
Or, watch the October 22nd, 2008 press conference.

Free money

2008-12-04T17:51:00.000-08:00

If you didn't earn it, can you spend it with reckless abandon?
In other words, unearned money - casino or prize winnings - didn't take your precious time to work to get it. Or did it? If you win a race such as the Royal Victoria Marathon and they give you money for coming first in your age category would you say you didn't earn it? Of course not, you busted your ass for it. Well, then how about casino winnings? Luck? Or skill at reading the cards and other players and hitting when you could've stayed at 15? While lottery winnings like scratch&win and BC649 i'd consider pure luck, your chances of winning these are about a million to one so I wouldn't count them in the discussion anyway. What about online games like Poker? The more you play, the better you get. So isn't it like working in that you're practicing and getting better...just like a running race?

So, if you worked for the money - in some way or another - should you be spending it like free money? Or using it to pay off your credit card debt / save for your next vacation like the rest of your moolah? Wouldn't that feel better than blowing it?

But don't listen to me. I don't know what it's like to get free money.

Give yourself a kick!

2008-12-02T15:39:00.001-08:00

How to motivate yourself...without a boss. This is tricky for all us self-employed people.
The best motivation, of course, is #1) money. If you don't get to work, you won't make any money, won't be able to pay your rent or pay the bills for your wi-fi and hydro. And your parents will get sick of feeding you (hmmmm, maybe that should be #2).
#3) Don't you want to be one of the hottest under-40s that Maclean's reports on in 2018?
#4) Fame! Fortune! Oh wait, those were 1 and 3. How about not living in a cardboard box?
#5) Going for lunch anytime you want is only rewarding when you deserve it.

Blogging and youtube...

2008-12-02T15:27:00.000-08:00

So, today's 25-35 year olds are embracing the facebook networking opportunities and I've been told I MUST have a facebook page and a youtube video and a blog.
So, here's the blog.
And the facebook page.
The youtube video has been suggested to be a funny-ized version of my mortgage insurance presentation (that's right! there's so much you can do with insurance - it's hilarious!). I will work on writing the funniest script in the entire world to do with mortgages and then record something clever (a walking house being dragged away by evil-looking bank men with those fake moustaches you get from Phillips' Blue Buck?).

A special thanks to the other Alex, for helping me start what will soon be the most-read blog (among our friends) on the entire internet.