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Retiring a Debt?
2007-10-24 14:36:00
Retiring Debt Plans So what do you do when you retire a debt? I have heard a bunch of folks make the following interesting remarks when they have retired a major debt (car loan, credit card debt, student loan, or mortgage): “Now I can afford to go on vacation” “We can order those new drapes for the living room” “We can afford to buy a new car” All of these statements have the common theme of putting yourself BACK into debt after climbing out of a debt hole. To quote a well known philosopher, “ARE YOU OUT OF YOUR MIND!!!!” . If you have worked hard enough to retire a debt, celebrate that, but don’t use it as an excuse to tie yourself back up in debt! Adding debt load is not your goal, and shuffling debt load shouldn’t be either. Figure out what you can do with the extra money to save, or try to retire another debt (after you have had a modest celebration of retiring this debt). Seems obvious to me, but then again, maybe ...

Younger Rural Home Owners?
2007-10-23 14:39:00
Home Owners hip for Young Adults More Likely In the Country An interesting new survey from our from our friends at Stats Canada outlining that: According to a new study, in 2006, young adults in rural and small towns were more likely to be homeowners than young adults in Canada’s three largest metropolitan areas. This is not surprising to me, but also a little worrisome. I look at the prices of the homes around me, and wonder how anyone just starting out can afford to live in them. With interest rates where they are, there is a fighting chance, but if rates go up, there may be a bubble bursting sound, just because I think the housing prices in larger cities is just getting out of hand. RESPs I need to look up and learn about how you take money out of RESPs and/or whether you can keep putting money in while money is coming out, and a few other interesting questions that I have. If anyone has any insight on this, please leave a comment or send me an e-mail and I will quote you...
More About: Home , Rural

Happy Black Monday Anniversary
2007-10-22 14:06:00
Black Monday , Blue Monday? Yes, it was actually last week, but this is the Monday that it would have happened on 20 years ago. I had just started working when this “market adjustment” happened, and at the time, I didn’t have any investments to lose money on (I’m sure my parents did). The people I worked with at the time were very affected (effected) and I just couldn’t figure out what all the hype was about. The following clip from the CBC (with Knowlton Nash), shows what the news of the day said about this monumental $500B asset drop. An end to the Bull Market of the 80’s (remember, Greed is Good) and made a lot of people get out of stocks for a very long time (and then they came back just in time for the High Tech Bubble and Burst). What does this mean? We are usually not that far from a market crash, but not as close as the experts think either. Some can show reason how they predict these market adjustments, but then again, some people also ...
More About: Anniversary , Black , Happy

Flash: Inflation in September at 2.5%
2007-10-19 13:12:00
Canadian Inflation Rate at 2.5% Stats Canada snuck this one out, before I could put it in my original posting, crafty devils. This is a major jump in the Inflation rate and the steepest in a while, but if you throw out the price of Oil from this, it actually isn’t that bad. Why would you take out Gasoline prices? I have no idea, since it is a major part of my expenses, but the Bank of Canada looks at that, so who knows? Energy jumped 6.1% year over year in this index, the biggest increase (even higher than Shelter) This 0.2% jump could mean a lot of things, and with oil futures continuing to sky rocket, maybe interest rates aren’t going to stay as low as I hoped it would. Maybe it is time to pay down that debt? Consumer Price Index and major components (2002=100) Relative importance1 September 2007 August 2007 September 2006 August to September 2007 September 2006 to September 2007 Unadjusted % change All-items 100.002 111.9 111.7 109.2 0...
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Friday Random Musings
2007-10-19 12:52:00
University Tuition Averages After my own brush with tuition costs this week, University Costs Holy Crap, Stats Canada has come up with a more extensive survey of Post Secondary education Costs across Canada. Worth a read to see just how little folks in Quebec pay for their tuition fees. A more startling graphic is the following that shows just why the cost of Post Secondary education has sky rocketed. Given that post secondary institutions have been allowed to increase their fee structures at such an alarming rate, it explains why it is so much more than when I went to school 25 years ago. Oil Futures over $90 a Barrel Interesting that the price has gone up another 28% in the past little while and no one has said too much? This is going to make for a very interesting winter if it is a cold one, that is for sure. We Canadians are Debt Junkies At least that is what the Certified General Accountants think, with their new report, Where does the Money Go: The Increasing Reliance on H...
More About: Random , Musings , Friday

Get off the Throne Will Ya?
2007-10-18 14:08:00
Stephen Harper Speaks From the Throne I just like that headline, because I have a potty mind. Middle Class Bedrock One good paragraph from the speech is The bedrock of our workforce is middle-class Canadians and their families. These families worry about the rising costs of higher education and the expense of caring for elderly parents. They worry about affordable housing and the number of homeless people on our streets. Our Government is committed to helping Canadian families meet their needs. The Working Income Tax Benefit will help Canadians get back into the workforce, and the registered disability savings plan will help families care for children with severe disabilities. Our Government will continue to invest in our families and our future, and will help those seeking to break free from the cycles of homelessness and poverty. Not sure I completely agree, I think the Small Businessman/woman is the bedrock, but Middle Class workers certainly carry the brunt of the tax load. ...

University Costs Holy Crap!
2007-10-17 13:05:00
As my oldest daughter gets closer to University , I am learning more and more about the relatively high cost of post secondary education in Ontario. Last night was an open house for the Ontario Universities and I attended with my daughter, and came away with a few interesting thoughts: There are a lot of Universities in Ontario, 21 were at this open house, and this does not include the community colleges. University of Western Ontario “Pitch Kid” was the best of the night, he was quick on his feet, polite, but funny and really hit the high points for the kids and the parents. This kid should go into sales, or should get a bonus for the job he is doing. Most of the other presenters were very bland and you could tell reading from a script. This is going to be EXPENSIVE, but the Universities are not trying to hide this fact they all mention the price of an education along with their minimum mark requirements, so it is useful for the parents to hear the actual numbers! How...
More About: Crap , Holy , Costs

Bank of Canada has No Interest (hikes)
2007-10-16 19:22:00
Whoo Hoo, no interest rate increases from our Amigos at the Bank of Canada . Against a backdrop of robust global economic expansion and strong commodity prices, information received since the July Monetary Policy Report Update (MPRU) indicates that the Canadian economy is now operating further above its production potential than had been previously expected. The core rate of inflation, which has been above 2 per cent for the past year, was 2.2 per cent in August. Total consumer price inflation fell temporarily in August to 1.7 per cent, having been above the 2 per cent inflation target since the spring. Good to know, and good to hear. Strong dollar and low(er) inflation is a good thing, and there is no need to increase interest rates (for now). Next time we will hear from these Monetary Mavens is on December the 4th, stay tuned, but enjoy the lower interest rates for now.
More About: Interest

Tourism as Important as Agriculture
2007-10-16 14:59:00
Well in 2002 as a contribution to the GDP, yes Tourism was just as big a contributor to the GDP in Canada as Agriculture was (according to Stats Canada). Mining was 2.5 times more important than both of them, so keep that in mind as well. This is an interesting number to keep in mind, now that the Canadian dollar is above our American neighbours money, what will that do to this sector of Canada’s economy (tourism that is)? More interesting that the Motor Vehicle manufacture is less than both Tourism and Agriculture? Interesting facts to keep in mind. Funny, but strange On the personal finance front, Best Buys has changed who does their credit card, so I went in to re-apply for their card. No, I shouldn’t have, but I wanted one, so let’s get past that part of the story (feel free to flagellate me in the comments section). I got a card for myself and my wife and asked for a relatively small credit limit, or at least I thought so, but the “Instant” cred...

Leading Indicators Still Good for Canada
2007-10-15 14:50:00
Canadian Leading Economic Indicators Unphased by Financial Market Stupidities So the leading indicators are up 0.4% over August, and more importantly don’t seem to reflect any “wear and tear” from the financial market fiascoes of that time frame (i.e. lower than prime mortgage stuff). Household demand remained the driving force behind growth. The housing index leapt by 5.3%, its largest gain in almost six years, due to higher housing starts. Spending on durable goods also accelerated. Strong consumer demand for services was the largest contributor to the growth of services employment. So the Canadian economy continues to chug along happily, which is a good thing. And the Loonie will Dive RBC claims that by next year, the Loonie will be back down to 93 cents American, but I am not so sure about this one. I think the U.S. government has made a conscious decision to force their economy back to a more manufacturing base, and not have to rely on imports as much. A ...
More About: Canada , Good

Sunday a day of rest?
2007-10-14 19:10:00
I always feel guilty when I have my best financial ideas on a Sunday and I start trying to act on them, because I keep thinking that I shouldn’t be working on the sabbath (sometimes I wonder if I’m Jewish, since I don’t do much on Saturday either). My view is that if you have ideas on Sunday, and you are trying to “relax” that is the reason you are having the idea (i.e. your brain is no longer obsessing about the day to day, and is attempting to think about other things, and thus your subconscious is now doing stuff for you). Sunday (or whatever day is your Sabbath), should be a day of rest, but not a day of inaction.
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Friday Random Thoughts
2007-10-12 14:58:00
250K! No not my net worth, what the odometer now reads (in Kilometers) on my 13 year old Honda Accord. The previous owner would point out that there had to be a 50K KM time period where the odometer didn’t work (neither did the Speedometer, but we won’t mention that)). I am looking at a used Corolla to replace it in the next month or two (don’t think the old girl can take another Ottawa winter (and my mechanic agrees)). Gotta love old cars! Oh and it cost me $2500 4 years ago, think I got my money’s worth. Did I Mention Where the Money is In Lotteries Lately? I have said time and time again there are 3 groups that make money on lotteries and they are: The Lottery and Gaming commission (90%) The people who sell the tickets (9%) People who buy tickets (>1%) It seems the (2) people want to make more money, and this clerk claims that God helps him win at the Lottery, however the lottery commizars will be calling All Mighty in for a talk about whether this clerk...
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Back Up Your Computer
2007-10-11 16:09:00
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 ...
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Parable: Money and the McDonald’s Play Structure
2007-10-10 15:34:00
Yesterday on my vacation day, I took my son to McDonald’s, just so we both got out of the house for a little while. He enjoys snarfing back some “hot cakes” and such, and there is a fun play area, with a play structure in it. This play structure is a set of tubes, with more interesting turns than my upper intestine. I sat down and had my coffee and my son ran off and was playing with the kids that were there and generally having a good time. My son is a bit tentative when it comes to taking risks, but if he is with a more rambunctious group he will tend to go with the flow and join in. I read the paper and then realized after about 5 minutes, that I hadn’t seen my son, and I panic’ed. I started to look frantically around the play area, and didn’t see him, but luckily the play structure has see through “windows” in some areas so you might be able to see what is going on inside of it. I looked through 2 portals and saw nothing, but f...
More About: Money , Play , Structure , Parable

En Vacances
2007-10-09 21:24:00
Yes, I have taken an extra day for the long weekend to make it an extra long weekend, which is just fine by me. Luckily I got lots done as well? Is that really a vacation day? Guess not. Christmas is Next It used to be when I worked in downtown Ottawa I knew Christmas was coming because the men’s apparel section in Eatons disappeared and the Toy section expanded into that space. Now that I don’t work downtown I don’t have as obvious a sign, but I await the first “holiday” flyer with great anticipation. What will be this year’s BIG SPLURGE item? How about your Mortgage, or Credit Card Debt? Yes, just call me Uncle Scrooge McDuck! Last Quarter of the Year How go your financial plans for the year? This is the closing quarter so keep up the good work, or see if you can save a few that you thought were lost (goals I mean). Maybe start your plan for 2008 now, or at least plan it now. Back to work for me tomorrow, and maybe a more in depth posting, but ...

Happy Thanksgiving Canada
2007-10-08 15:29:00
Yes, today is Canadian Thanksgiving , so Happy Thanksgiving to all my readers, and their families. So far it has been a busy weekend for me and the little C8j’s. For those of you looking for a great Turkey story, click on The Greatest Turkey Story Ever Told to read how to prepare your turkey for Thanksgiving. What is Old is Cheap Thanks to all this new furniture I collected last week, I now had a wall unit that could accommodate a LARGE screen TV. I know the prices of HDTV’s are coming down, but they are still too cheap for me. As a side note the last TV I bought was 20 years ago, so no, I don’t usually invest too much money in my TV’s. A friend told us about a 32″ regular NTSC TV by RCA at Wal-Mart. We picked it up (and my back still hurts from it), and now we are watching on a BIG (regular definition) the Monday CFL football games!! I am enjoying it, and I enjoyed the $267.00 price as well. The best part, I bought it with PC points (in a round about wa...
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Friday Random Thoughts
2007-10-05 13:18:00
Thanksgiving in Canada Just remember that the financial markets are closed on Monday but not in the U.S., if you have anything you need done, better get it done today folks. I have heard people theorize that 24 hour 365 days a year banking is coming (in that transactions would truly be instantaneous any time of the day or year), but I am not sure if it is a good idea or not. I have caught myself writing cheques that I know won’t clear until after my pay cheque, so I am just as guilty as the next person. Unemployment in Canada Below 6% For the first time since 1974 the unemployment in Canada is below 6%. Lots of interesting numbers over at Stats Canada that break the employment figures down very nicely, go look where you might fit! Hope it was a good song So one of the first music downloading cases has gone through the court system with the downloader being fined $220,000, now that is an expensive tune! RIM Keeps Rocketing I keep thinking the bubble HAS to burst for Research i...
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Recycling Furniture, Cheap or Thrifty?
2007-10-04 15:03:00
Cheap or Thrifty? After my weekend of vulturing around picking up furniture from my parents and friends and now seeing it in my living room, I wonder now, am I cheap or frugal? When I was a student my entire apartment was made up of my parents old furniture (and it actually gave me a certain amount of security seeing familiar things around me, but I digress). As I have grown older I have bought some furniture new but continue to use older furniture as well from various sources. My opinion is it is partially a frugal thing, because what is the point of blowing $2000 on a new couch, if you have or can get a good one and pocket the money? If I am happy with the “gently used” furniture, why do I feel cheap having it? Why do I equate financial success with New things? My guess is it is a cultural thing, but again, not completely sure either. Patience Update Following up on my “patience pays” posting on Monday, I ended up saving about $70 at the end of it all, by...
More About: Recycling , Furniture , Cheap