Take That Spam

For some reason I am getting way less spam than I used to. I used to get at least 10 comment spams per day, maybe more. It was too much to count. Now I get 1 comment spam every 2-3 days. I wonder if the spam bots have started to realize that they just can’t get through my Akismet spam filter. I do have to wade through the spams as sometimes comments do get caught in the filter and the posters do not notify me that their post did not get through. It sure is nice to be getting less spam.

Favourite Financial Magazines, Books, or Websites

I got tagged by Canadian Money Advisor in hist article, “What are your favourite financial magazines, books, or websites?!!” Here are mine:

The Wealthy Barber by David Chilton: One of the first financial books I ever read. I read some of it when I was really young and first learned about compounding and RRSPs and other simple stuff. I’ve read some of the chapters again over the last few years and it has some great financial advice in it.

The Intelligent Investor (revised edition) by Benjamin Graham: Read this a couple years ago and it really changed the way I think of investing. Mainly it made me realize that being a successful stock picker is really hard and unless you have all day to spend doing it, don’t do it. Great historical recounts of the tech boom (and bust) of not only the 90s but the 60s as well, and other famous bubbles (and bursts). It also taught me to not worry about the daily goings-on in the market.

Efficient Market Canada website by Marting Gale: The writings on this site greatly influenced my decision to go with an all-passive portfolio and to use ETFs to achive that. It has lots of great articles and recommendations.

A Random Walk Down Wall Street (ninth edition) by Burton Malkiel: Since I have an all-passive portfolio, I figure I better learn more about the theory behind this in detail. This famous book is a good start. I am not almost half-way through it and I definitely recommend it for all investors.

Unfortuntely I cannot recomend any magazine, newspaper, or other media publication. Some have decent articles once in a while but not usually. If anyone has any recommendations, please let me know.

Quicken 2007 XG

I bought Quicken 2007 XG the other day. I wanted it for the detailed investment performance reporting using IRR (internal rate of return). It seems to deliver on that for the most part although I have only loaded in some investment transactions. I actually loaded in my first transactions ever! I still had my transactions from 1996-1999 when I was purchasing the AIC Advantage Fund. I’ll talk more about that investment and what I found out from Quicken’s reports. I looked at the options in the investment performance report and it looks very flexible in terms of showing results for only certain accounts or investments, and for all dates (not just 1,3,5 years). The part that sucks about Quicken is that it’s still a Mickey Mouse program because it doesn’t to double-entry accounting. When I was entering “Bought” transactions there seemed to be an associated cash account that was going negative, but I couldn’t choose the account. Nor do I remember creating this account. I used the BoughtX transaction type instead, and then I could choose an account to fund the purchase. I have been using Gnucash up until now and was very satisfied with it but wanted better investment reporting. I love Gnucash’s double-entry accounting, and it is too bad that Quicken doesn’t have that capability. I thought about getting QuickBooks but it didn’t seem like QuickBooks had any investment support, although I could be wrong. The other annoyance is that Quicken has such a cluttered interface. Gnucash was so simple, just a list of accounts and a ledger. I’ll have to see if I can customize the interface in Quicken at all, but I doubt it. I have made a tentative decision to stop tracking individual transactions in my chequing accounts and just track investments instead. Not sure if I’ll go ahead with it, I’ll have to see how easy it is to import transactions from statements downloaded from online banking sites into Quicken. Only 1 of our 3 institutions allows us to connect right from Quicken. For the other 2 I have to go to the website myself, and click on “download statement.”

Top 5 Things That Should be Taught in School

Some guy named Brian Kim wrote an article called Top 5 Things That Should be Taught in Every School.

Below are five things that I firmly believe should be taught in every school in America so that students don’t get railroaded when they enter the real world. If you’re still in school and reading this, consider it your lucky day as mastering these five skills will give you a great head start and help separate you from the rest of the pack as well.

He puts personal finance at #1 on his list:

most young adults don’t have a clue on how to invest their money. They don’t know what a Roth IRA account is, or a 401k, or the magic of compound interest, the tax benefits associated with investing in these types of vehicles, etc. There’s a lot of specialized knowledge out there that young adults are not aware of on when it comes to how they can invest their money and as a result, they frivolously spend it away.

The other three are communicating effectively: “I ‘m mainly talking about being able to clearly take what’s in your head and to put it into words so the other person clearly understands what you’re saying the first time.” Social skills: “Learn to approach people – that’s another big skill. Most people don’t have the guts to take the first initiative and introduce themselves. Be the big man. Take the first step. Learn to make the other person feel good and important.” Sales: “Selling is one of the few skills that can be utilized in any job or career. It’s one of the most important cross marketable skills you will ever develop.” And finally, time management, and he added a sixth, health.

I have to agree that personal finance should definitely be taught in school. I learned some in school as there was a “business ed.” course when I was in high school that was mandatory. Our teacher walked us through filling out mock T1 returns and we bought some stocks on the stock exchange with fake money. I think we learned a bit about investing too but I don’t remember it much. I know the next summer (after Grade 10) I starting buying mutual funds monthly. Part of that early start might have been due to taking that course, who knows?

Why I Probably Won’t Ever Pack a Lunch

Here’s why I won’t start packing a lunch any time soon (except if I have leftovers that is). This article on lifehacker.com: “Save $988 per year by packing your lunch.” $1000 saved by packing a lunch!? That’s a lot lower than I thought. If you’re making $50,000 gross that’s only 2% of gross income. Make $100,000 and that’s 1%. That seems pretty insignificant to me. I used to think about bringing a lunch to save money but I’m not so sure anymore. There are some big advantages to going out for lunch with coworkers: Networking, talking about work-related ideas but outside of work, and socializing, and if the difference is only $1000 per year I don’t have any huge motivation to change. You also have to factor in the extra time spent preparing decent-tasting lunches and extra grocery shopping. As far as efficiency goes, leftovers are a smarter idea because you just have a cook a bit more than usual the night before which doesn’t take any more time.

Financial Lessons Learned Through Parents

Canadian Dream had a post called “Parents Influence Over Their Kid’s Money.” Part of it reminded me of my own experience:

The other thing my parents did for me that really hit home was during my second year of university they stopped paying the bills. They had decided to buy a cottage instead of funding the remainder of my education. So they co-signed some loans and I was now living off debt to pay my school. I hated it, but it taught me to pay attention to my spending. Needless to say I reduced my spending at school by 10% the next year and I started paying down the debt with every dollar I could after leaving school.

This reminded me of a similar event in my life. My parents had bought some Canada Savings Bonds for me when I was a kid, as a college fund for me so I would not have to worry about paying for university. When I was maybe 12 my parents wanted to buy a cabin at a nearby lake as an investment/rental property. In order to afford the down payment, they cashed in those Canada Savings Bonds. So when I went to university, I was on my own. It turned out I had a scholarship anyways that covered most of my tuition but I had to pay for everything else. My parents bought me a $2000 used car right at the beginning of university and besides that I was on my own for any vacations I wanted to take during my summers, any “toys” I bought, gas, car insurance, textbooks, and everything else. So I worked part-time through most of university so I could pay for everything and have some money left over for long-term savings as well. So my situation was not the same as most as I had no debt. It wasn’t a case of either my parents supporting me or going into debt. It was a case of finishing university with only a little money leftover vs. having a lot more leftover or spending more, and not having to work (had they had not cashed in those bonds to buy a rental property, but instead given them to me). There is no guarantee that they would have given me those bonds. I had a scholarship so I didn’t really need them, but you never know. They had earmarked those bonds for my time in university so it might have gone to me in some way, maybe it would have gone toward an unnecessarily larger car, a more expensive vacation than the cheap ones I did (mostly camping), or toward my other expenses, meaning I would not have had to work. In hindsight I was so glad that after high school I was basically on my own. I worked hard at my part-time job as a grocery store clerk on weekends, tutoring in math, and my job at a local movie theatre and learned that the only way to make money is through hard work. Like “canadian dream” above, “it taught me to pay attention to my spending.” It is best to learn those simple lessons as early as possible.

While I was in high school I was always a little bit annoyed at my parents for cashing in those savings bonds. I had heard about other people having a “college fund” and I was annoyed that I didn’t have one, or rather, at the fact that they cashed them in for a cabin we rented out and never used. But later on I realized that not having a college fund is one of the best things they did for me. Cutting me off from their finances early on was great as it allowed me to become financially independent and to learn how to look after my money. It forced me to make more mistakes early on, mistakes that I learned from. More recently, over the past few years my wife’s parents have mentioned that they want to help pay down my wife’s line of credit leftover from school. We have been refusing their offers of help because we think that paying down this massive debt on our will be a great experience, like preparation for having a mortgage or a car loan (actually this line of credit debt makes me NOT want to ever have a car loan). We have done an excellent job so far at maximizing our RRSPs, while at the same time paying down our debt as much as possible. In order to do that we have had to limit our expenses in some areas, live in a place that is a bit smaller than we would have lived in otherwise, and live without that fat wad of cash that is currently getting sucked away to interest every month. But we’ve already learned a huge lesson, about the burden and cost of debt, and we’ve figured out what our priorities are as far as expenses go.

So, what did you parents, guardians, or other do financially to you that you didn’t like at the time, but that in hindsight, now seems like a blessing?

Things You’ll Never Hear Me Blog About

A lot of investing and personal finance blogs talk about certain topics that I purposefully stay clear from because I really don’t like them and am not interested in them. I often remove blogs from my blogroll if I notice they talk about these things too much.

  • 0% balance transfers and the like. Seriously, what is up with this craze?
  • Kiyosaki or Cramer (at least, in a positive way).
  • Rewards programs. Not a fan. I finally got rid of my Air Miles card and went to the cashback option for our one credit card. I hate points programs, customer loyalty programs, or anything of the sort.
  • Trading, daily stock prices, etc… I focus on the long term. I couldn’t even tell you right now what the trend in the markets has been in the past month. I don’t follow the market.
  • Promotions. Promotions serve only one purpose, to get new customers. Their purpose is not for you to make $15 or whatever it might be.
  • Talking about how to make money blogging, or how much money I made from ads last month, etc… This blog will never be a for-profit operation. Never take advice from a blogger who is trying to blog for a living (or most journalists). How do you know if his/her advice is really coming from the heart if she is getting a kickback every time they right a post? To prove I don’t blog for bucks, download AdBlock Plus for Firefox and please block my ads (I do). Then tell your friends. The only reason I have ads is to cover hosting costs.

So if you are interested in reading a blog that swears to steer clear of the above topics, you have come to the right place.

On the topic of annoying things, I have been receiving an incessant amount of offers these days via email for link sharing, collaborations, requests to demo debt consolidation software, and a number of emails that start out like this one did: “My name is XXX XXX, I recently came upon your blog. I read a few entries and liked it. I work in the financial services industry and as a side project my company has…” Delete!

12-Year Old Financial Blogger

You gotta see this. There is a 12-year kid giving financial advice on his blog http://www.funnymunny.ca.

Some of his advice is questionable, like this one:

“Ya, hi, I’m over 150,000 in debt, not including my mortgage. I’m fearing that I’ll have to give up my lifestyle and everything I own. Is there anything I can do?” Well, I do have one piece of very good advice, find a really tall building… No, I’m just kidding! but seriously, the one thing you can do to take evasive action on that kind of debt is to, hold your applause, go further into debt! Ya, as crazy as it sounds, if you go another 300,000 dollars in debt and buy a condo, you can rent it out and slowly pay of that debt, plus the mortgage with the rent. And once you’re almost out of your financial rut, you can sell the condo for a profit and be completely debt free!

That seems like a sure-fire way to make your situation worse rather than better. Especially in today’s housing market. The guy is $150,000 in debt, plus he has a mortgage (let’s say $200,000 left), and he’s suggesting to take on another $300,000 in debt (if you can get approved for that, which is doubtful with the debt load he/she already has). Good luck trying to rent that condo for enough to make up for the mortgage (let alone having extra to apply against the $150,000 debt). And good luck selling the condo for a profit if housing prices tank (which they will).

He sort of explains himself in his next post, but there are still some assumptions I don’t like, like the one where the second house grows from $400,000 to $500,000 (timeframe not given).

Either way, this kid is one smart cookie and I’ll be keeping my eye on him.

Status of Transfer to E*Trade

Well four of my mutual funds were finally transferred. My one ETF (iShares XIU, the S&P TSX 60 Index ETF) was transferred very quickly. But it took the mutual funds almost a month, and I am still waiting for one more (an Elliot & Page Growth Opportunities)! Yet another reason to get ETFs instead of mutual funds I guess. 🙂

I have just noticed that E*Trade’s website does not offer much. Beyond buying & selling that is. Would be nice if some of these online brokerages would include some performance data in there automatically. Or at least an open API or webservice (like Google or Flickr) so you can connect to your data and do some crunching or something. Then all sorts of applications would start popping up.

Upgraded to WordPress 2.1 and Switched to K2

I recently upgraded to WordPress 2.1 and switched to K2 from the plain old vanilla Kubrick theme. K2 is an amazing it allowed me to remove some modules because of it’s awesome “sidebar modules” features. You’ll just have to try it out to see what I am talking about. It’s also given me AJAX-commenting and AJAX live search. Also live archives. I recommend trying out all these features. 🙂 I also stopped using Jerome’s Keywords module and am now just using WordPress’ built-in categories. I was tired of always wondering if a module like Jerome’s Keywords was going to work if I upgraded WordPress. Now I have no modules that use the database besides K2 Means I can usually update to other WordPress version without much hassle.

Techie stuff:
I track WordPress upstream sources in my Subversion repository and then merge-in upstream changes into my trunk. If any of you geeks are interested in making your upgrades as painless as possible, that is the way to go. Far easier than WordPress’ upgrade instructions on their website. Not only that but I can hack any part of the wordpress core if I wanted to and still get upgrades.