Category Archives: Blog

How and When to Buy Your First Home

Graduation comes in different stages. It might be high school, university, entering the work world, or for any age – the graduation to acting your wage.

Today we’ll talk about buying your first home and every single one of the four sections in here are chapters in the Money Tools book. It’s THE best $20 gift for yourself or anyone graduating to any stage in life. Mosaic has a bunch of signed copies now, or just go to yourmoneybook.com – it’s a tiny investment in yourself or paying it forward to help someone else avoid what many of us wish we had known.

There’s an old Rod Stewart song with the title: I wish that I knew what I know now – when I was younger. Oh boy, I wish I could make that happen. I bought my first house in the early ‘80s when rates were insane. To hang onto it, I had two years of using my Visa cash advance in order to pay my MasterCard. Owning a home is so worth it, because it builds equity in two ways: By the principal you pay on your mortgage and a historical five percent return each year.

But I wish I had held off for a few years in order to build up my savings. The younger you start saving, the bigger the amount when you retire.

Don’t listen to developers who advertise that buying a place is cheaper than renting. It’s totally false. You are now responsible for property taxes and at least a couple of hundred bucks a month for everything from paint to plumbing problems and repairs.

One of the biggest blessing you can get is from your parents or grandparents lending or gifting you the money for a down payment. Do NOT make it on a condo, but a duplex or single family home. Condos are the first to plummet in value if there’s a correction, and the last to regain their value. You’re also competing with everyone else in the condo complex who may want to sell. There’s a condo complex on the popular Whyte Avenue in Edmonton that currently has 13 units for sale. (I’ve posted the picture). If you’re selling, you need to always lower your price to be the bottom two or it’ll be years before it’ll sell.

If you as a parent or grandparent lend someone in your family the money for a down-payment you can do it in three common ways: Just as a gift, or have a lawyer put a lien against the property to assure you’ll be paid back, or have the amount of that gift or loan noted on your will to be paid back out of your estate to the beneficiary.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

A Cell Phone Rip-Off Warning

Starting next month, if you’re a FIDO cell phone customer, you will get charged a so-called mandatory fee to call them. You’ll get charged to call them if you need anything done on your cell plan that you can or should do online. That includes making a payment, changing your payment type or credit card, password reset, updating information and the likes.

FIDO is the 2nd tier carrier of Rodgers, so you can bet they’re starting it, too. And if Rodgers is implementing this rip-off fee, Telus and Bell have, or will match it. Their average call time is around three minutes. So even if one agent only handles 12 calls an hours at $10 per call, that’s $120 profit less their $15 hourly pay. They’ll make more money on this rip-off than they do on your cell bill!

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Another CRA Scam

Another tax season, another Canada Revenue Agency refund scam. I received both a text and an email that the CRA has a refund of $1183 and just “click here.” I’ve posted a picture of it.

I can’t believe this needs to be stated again to anyone in the country: The CRA doesn’t text or email you a refund. Even if you are not the best online it will literally take you ten seconds to type in something like “CRA text refund.” It will take you one second to press “enter” and in less than one-half of a second you will see tens of thousands of posts that it’s a scam. So with less than 15 seconds of work you’d know it’s a con. It’s why this scam goes on my list of “if you fall for this, I have zero sympathy for you.”

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Super Savers & Photo Radar Money Grab

Rob Gronkowski retired last weekend from the NFL’s New England Patriots. He’s actually in the Money Tools book, because he never spent one dollar of his six year $54 million contract – period. He lived only off his endorsement income. No, you and I didn’t make $54 million in six years, but that misses the point. He is a super saver who just has a bigger pot of money to save! That leaves one more NFLer with the same savings attitude, and that’s the Viking’s quarterback Kirk Cousins and his $84 million contract. He’s very proud to be driving a dented GMC Van that he bought from his grandmother for $5,000. Here’s some of the story from CNBC: https://www.cnbc.com/2018/10/12/rob-gronkowski-shares-the-money-advice-he-gives-his-nfl-teammates.html

Keep in mind these are just two great savings stories out of thousands of professional athletes. Setting aside the much more conservative Canadian hockey players, many more athletes blow through their contract money than save it. Need proof? In the NBA, over 80% of players are broke within five years of ending their playing career.

By the way, the general definition of super saver is if you can put away at least 25% of your income – and thus live on less than 75% of your pay!

Photo radar, as most people should know or suspect, is just a cash-cow and money grab. The NDP government in Alberta actually admitted it last month. In Alberta, photo radar generated 27 million tickets for $220 million in government revenue last year. 27 million tickets reduced collisions by an estimated 1.4% – that’s it.

Plus, I can show you four U.S. studies that red light cameras actually INCREASE accidents. Since our traffic lights work the same way as they do in the U.S. those studies are entirely valid here. Personally, if I know there’s a red light camera, I will slam on my breaks to avoid the really expensive ticket. If the person behind me can’t stop in time, that’s his or her at-fault accident – and those rear enders increase in frequency at red light camera intersections.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Our Credit Rating & Tim’s Reward Card

Aren’t we on topic! Last week we talked about the federal government’s budget and deficits as far as the eye can see. The day after, last Thursday, Fitch (one of the major credit rating agencies) announced that our government debt is “close to incompatible with a AAA credit rating.” So we’ll not only pay a lot more interest because of the debt total, but with a drop in credit rating, we’ll also pay a higher interest rate to keep borrowing. Exactly what happens with us individuals: When our credit rating drops, rates get much more expensive because we’re a higher credit risk.

Tim’s now has a rewards card. If you don’t mind lugging around the card, every 7th coffee will be free. Not a bad deal to get a 13% price discount equivalent…until they change it to every 8th, then 9th, then 10th once they’ve trained and hooked enough customers. Mark my words! Why did they start the program? My guess is that the Esso stations now run by 7-11 will be kicking out their Tim’s coffee as soon as the contract is over. That’ll plummet Tim’s sales. Since we’re really loyal to loyalty programs, no matter how crappy they are, this is Tim’s pro-actively re-training us to visit Tim’s and not 7-11 when they switch back to their own coffee at a much bigger profit margin.

The Federal Deficit Keeps Growing

Yesterday was the federal government budget.  I didn’t bother going through most of it because it’s an election year, so it includes a little something for everybody. Bloomberg called it ‘a laundry list for voters.’ Nothing like getting a little kickback or bribe with our own borrowed money that someday we’ll have to pay back. All that borrowed money being sprinkled around on this International Happiness Day…

What I did notice was the deficit for the coming year. That’s not the debt – it’s just the overspending for the year. Prime Minister Trudeau promised in 2015 that there would be a small deficit of $10 billion for two years and that the budget would be balanced by 2019. It’s now year five and it’s still double that – each year.

The 2016 deficit was 19.7 billion, 2017 19 billion, 2018 14.9 billion and this year it’ll be 19.8 billion and the governments’ own estimates are for 56 billion in the next four years.

The two biggest political financial lies I’ve ever heard were from the former Mayor of Montreal stating that the Olympics (there in 1976) could no more have a deficit than a man could have a baby. It turned out that the cost overruns were 720% and the debt took 30 years to pay off.

The second big lie was from Prime Minister Trudeau in 2015 when he stated that ‘budgets balance themselves.’ Five year later – still waiting for that magic self-correction to happen.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Internet & Cable Bills Are Up…Again…

Two months ago I started writing a heads up that home internet prices are going to have another big increase this year. Well, it’s here with about a 7% price increase by Shaw effective April 1st. Ah, the joy of having a semi monopoly!

The reason is really simple: Cable companies are losing hundreds of thousands of subscribers who are cutting the cord. It’s now a quarter of households who don’t have cable TV. But those people still want to watch TV – Netflix, Amazon, Hulu or whatever – but it’ll be on their phones or computers. So, the cable companies are losing massive amounts of money on TV packages, and will simply increase the cost of internet to offset their losses.

While their income from cable is down because of fewer subscribers, higher prices offset that. On the other hand, the mostly millennials do have unlimited data on their phones. That’s where the cable companies are making huge increases in profits. Shaw alone was up 60% in revenues last year from internet charges!

I would love to not have my cable TV bill. But I don’t have the know-how in what I need to still get what I want. I do have my laptop set up to talk to my TV, but for pictures only. And I’m not sure I can get CNN or the likes without cable. The biggest part of our cable bill are the sports channels. They’re a huge part of the cost. If you want Sportsnet and/or TSN, I think you’re stuck with that big cable bill for the time being. But do look through the channels you get and your cable company internet site as to what you can cut out to reduce your bill. It’s the only way to offset the continuous price increases!

They’re also going to try to get you into a longer-term internet contract at all costs. 5G speed is now a reality for later this year, and it’s 100 times faster than you now get from your phone company, and 16 times faster than cable companies currently offer. But if you’re in a long-term contract, you’ll be stuck at the higher rates and turtle-like speed for the life of your contract.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Mark Stone & Mobile Cheque Deposits

Here’s a quick way to turn your finances around, but you’d have to be Mark Stone, ex of the Ottawa Senators. He was traded to Vegas Monday. So he leaves a terrible team and terrible Ontario and Canadian taxes to go to Vegas with no state income tax and a new $80 million U.S. contract. Guess that’d take care of any money issues…Not to mention, he arrived at 2 am to a bunch of fans, the team cheerleaders and drummers to welcome him!

Mobile cheque deposits: It’s really common for people these days to do a cheque deposit via their cell phone. Take a picture front and back and click “deposit.” But a heads up: I tested it for the first time with my credit union and a bank. I had no idea that it takes a week to 10 days for that money to actually be credited to my account! It seems that the banks are waiting for it to be fully cleared before they’ll release funds to you. If you need the money – avoid ever doing a mobile deposit!

With any new technology, there are always fraudsters causing trouble, however: What’s happening is that cheques are deposited via mobile apps and then the fraudster takes them to a different bank and cashes them. In other words, they have the money twice.

According to Kiplinger, the policy is that the mobile one is returned and the in-branch deposit and cashing is valid. That means your financial institution is likely going to send you a new requirement for mobile deposits. Before you take a picture to deposit, they’ll require you to write specific wording on the cheque. It’ll be something along the lines of: For mobile deposit only. That note will  prevent someone from presenting the cheque a second time.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Someone Asking for Help – and I’ve Got Nothing…

Welcome to my very depressing day! My 11-year old car has a cracked thermostat cover, which translated to no heat for the last two weeks, and getting to part with $485 today.

But if that seems bad, it’s also the first time an emailer has me really depressed. Others email me and I respond with what I would do in their situation. I have no idea if they ever take the advice or if they were just looking for a quick way out – there never is one.

But this person is in it deep. I emailed him back to first decide if he wanted some painless solutions that’ll just have him in the same financial nightmare in a decade when he’s retired, or if he’s prepared to do what it takes. In other words: Not have a life for the next 18 months to work his way out of a huge hole. Today, I’m actually hoping he doesn’t email me back because this isn’t solvable for five more years. OK, I didn’t mean that, but I can explain why I said that in frustration:

He has a vehicle financed for eight years. Yes, you heard that right: EIGHT years. AND it’s one of the fastest depreciating vehicles around AND it’s a pig on gas. Right now, after two years of payments, his balance is $44,000. The most optimistic sales value today is half of that. Yup – he’s $22,000 in the hole – and won’t be at a balance that equals the value for another five years.

That’s bad enough, but the payments are $650 and $350 gas and $130 insurance and around $70 maintenance. That’s $1,200 a month. So he has to earn $2,000 of gross income, pay taxes, EI, CPP, etc. to have $1,200 left over.

So if $2,000 of his pay is gone right off the top, plus rent, plus food and normal bills, where is the ability to pay off or to pay down a $30,000 credit card, or $25,000 line of credit? With what money? Saving $50 on food won’t cut it. The car can’t be sold in order to drive a $3,000 vehicle for a couple of years, and there aren’t savings on utilities, cable TV or a $50 cell plan.

How exactly am I supposed to help this person? Oh boy, this is depressing. And he didn’t get ripped off on the vehicle – he did this to himself. Again, I’m not anti-new vehicles. I’d love to own one and would love you to drive a new vehicle. But only if you can afford it – and certainly never on the eternal eight year finance plan. The definition of afford it is to be able to write a cheque for the purchase! An eight year loan is not in the definition of being able to afford it!

I’m going to live for the day when someone emails me for help the day BEFORE they put themselves into a situation where there’s no way out!

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Millennials Helping Change the Retail World

Millennials are helping all of us save a bunch of money in vast numbers of industries. They’re getting to being the largest group in the population, so retailers have no choice but to adapt.

One of them is with car repairs. Typically you take in your vehicle and deal with a service advisor whose job is to coordinate the work and to upsell you! Yes, they call it a treasure hunt – where they look for other work that could be done, or might need to be done sometime… The modern way has started at a service shop in San Francisco called Luscious Garage: No service advisor – you deal with the mechanic directly. That’s the person fixing it, and that’s who you communicate with, so it immediately takes out communication problems, the adversarial relationship, and the stress and pressure of being upsold.

The mechanic will text you with what they’re working on. So you might get a text update that they did the breaks, and here’s the picture of the newly installed pads. And there’s a hose leaking – here’s the picture of the leak. Want us to replace this hose for $30, and half hour labour cost? Customer love it – and that’s the wave of the future!

Online mattress purchases are only around 15% but that’s enough to drastically shake up the industry right now. The same is true for Gillette, which is in massive upheaval with an online retailer called Dollar Shave Club. It just take someone to find a better, cheaper, and more convenient way to shop. And it’s a great thing for an industry with massive markups. The industry has always been thought of as being right up there with buying a used car! Any upheaval will be your financial gain. The industry upheaval is to the point where Mattress Firm, the largest seller in the U.S., has filed for bankruptcy.

The changes are for two reasons: Firstly, Amazon has now gone into the mattress business. Look at the companies that also sell them and their massive decline in stock prices when that was announced late last year. The other one is a company called Casper. They’re way cheaper and compress a mattress so it can be shipped via courier. And, from what I’ve heard, they’re supposed to be great. You can also go to Costco and buy one in a box. And they’re all compressed to be able to fit into the back of a Honda Civic – that seems to be the industry rule for shipping size. Plus, now you have upwards of three months to return it – try that with a traditional mattress purchase!

Virgin Hotels caters to millennials. One of the biggest pet peeves of customers on every survey is the quadruple priced stuff in the minibar. That $2 package of nuts for $9! Their hotels price it at exactly the same as stores in their area – period. Managers send a staff member to the nearest Macs and Walmart to get the price that they’ll use in the minibars!

George Boelcke – Money Tools & Rules book – yourmoneybook.com