Category Archives: Blog

Yes, You Can Get a 10% Investment Return

Last week marked the 10th anniversary of the Lehman Brothers bankruptcy on October 15th, 2008. That was the straw that broke the camel’s back and what caused massive selloffs in investments of all kinds and the unofficial start of the financial meltdown from Wall Street to home owners. Eventually, it ended up wiping out three trillion dollars of wealth. Of the biggest investment firms failing kind of made the meltdown official.

At this depth of the meltdown, vast numbers of investors took their money out of the market. Yet, if you had invested in the Standard and Poor 500 – which is a basket of the largest 500 corporations, on the day before Lehman Brothers went bankrupt, you would today have a return of 11% per year for the last decade.

I talk about investing, in basic terms, a couple of times a year, and it never fails that I get two or three emails that using a 10% return isn’t reasonable. Or the question is where to get that kind of return. Well – here is proof once again. At the worst day since the great depression, it once again paid to invest and not pull your saving out. Yes, an 11% average annual return for the last decade. THAT is a long enough time period to be a fair measurement. If you want to go back over 50 years, the S&P return is still over 10%.

Do the research for five minutes and your own due diligence, but anyone under age 40 or so doesn’t need complex investing advice. They’re 20 or more years from retirement and can ride out three or four more cycles. Nothing could be better for someone in their 20s than to have their money in the S&P. It’s diversified because it’s 500 companies around the globe, it doesn’t need management fees or a broker and has a 50 plus year proven track record. I’m not sure what else anyone would need.

By the way, for anyone older than their 40s, a so-called 60-40 portfolio of 60% stocks and 40% bonds bought the day before the great meltdown would have been an 8% return on this 10th anniversary.

Time heals all investments. When the market corrects, lots of people panic, instead of seeing it as a temporary setback that has more upside than downside. No, you won’t more than maybe 5% this year. No, you won’t be down like you were in 2008, or up more than 25% as was the case a couple of years ago. If you’re not invested for the longer term of more than five years – stay away. If you’re needing to be up on a weekly basis – stay away. For the rest of the world, set it and forget it. Don’t even open your statements more than once a years. You’ll be happy you did….

$10 Cell Plan,Free Cruise, Generic Drugs & Costco

Unlimited $10 cell phone plans: Yes, but it’s the U.S. – a great reminder of how badly we get ripped off here in Canada. But if you go to the U.S. a number of times a year, or if you’re there for the winter, you should know this. Taking your Canadian phone means a U.S. roaming plan that’s around $5 a day or $30 a month. That’s a lot more expensive than getting yourself a U.S. phone and a U.S. plan. The $10 is at and is for one GB of high speed data plus unlimited calls and texts. Just check what the rate is for calls to Canada. It runs on the Sprint network so you just need an unlocked phone and a $5 SIM card from Sprint or also AT&T.

Plan B, which is what I have, is a $3 plan from Ting. That’s a flat per month. When you use it in any month, it triggers $3 for 100 texts, and $6 for unlimited calls. It’s just for my three or four U.S. trips, but I’m also going to switch to unreal now. (For a review, go to Clark Howard’s website at – he’s the best U.S. consumer help guru that loved the service when he recently tested it.

A free cruise, but only if you’re a smoker. Yes, sounds kind of strange, but this one time, a bad habit can be rewarded. In September and October each year, a number of cruise lines offer seasonal Maritimes to New England cruises. The one I was on last year started in Quebec City with three stops in the Maritimes, then Maine, and ending in Boston. Other cruise lines follow a similar itinerary. Here’s the free part: A carton of cigarettes is around $140 here. Duty free on the ship, it’s about $40 Canadian. Since there’s a few stops in Canada before heading for the U.S., buy a few cartons, then get off in Halifax or St. John’s, walk two blocks to the post office, and mail them to yourself. Once you’ve docked in the U.S., you’re restricted to bring back one carton into Canada. While you’re still inside the country, AND have access to duty free, you’ve got that window of opportunity. Six or seven cartons will save you the price of your cruise.

Generic prescriptions are massively cheaper than the brand name drugs. Don’t think of generic meaning “not as good.” Generic if the financial word for “less expensive.” I needed three prescriptions filled after some dental surgery yesterday and asked the Costco pharmacy to make it generic. If it’s from a doctor, just ask him or her to put “generic OK” on the prescription when possible. I paid $31 total instead of $74 for the brand names (Tylenol 3 being one of them that I can pronounce). For someone with no insurance, that mattered to me. And do go to Costco. What 99% of people don’t know is that the law says pharmacies have to serve you. The law in every province and state is that you can go to Costco without a membership to get your prescription filled. You won’t regret the savings. If they won’t let you in, just as the door person to get you a manager, and remind them of the pharmacy exemption.

Your Email Questions

Two email questions from the Okanagan in the last few weeks that are worth talking about. After all, if one person takes the time to email a question, there’s a rule of thumb that 100 others are wondering the same thing.

The first one is from someone asking if she can use the simple $20 will kit from Staples. She’s single, but has ‘complicated assets’ as she describes it.

Yes, that kit should be fine. The will is your wishes of who gets what asset or what percentage of your total estate, whether it’s complicated or not. The second part is that it decides on an executor. That’s the quarterback, with the help of an estate lawyer to make sure it’s all legal and correct, who steps into your position. In other words, that person now has control of liquidating the assets, keeping them in place, etc. Complicated or not isn’t really part of your will. It’s picking the person to do that and deciding where your estate goes. (if complicated is a mixed family, businesses, partnerships, a trust, or the likes, spending a few hundred bucks with a lawyer will be well worth it, instead. Better safe than leaving your loved ones sorry…)

The second email is a really good question. The person has a used SUV with 188,000 km on it. Should he trade it now for another newer-used vehicle or keep driving it? Now remember that I always only answer questions of what I would do, because I never have all the information, details, and other factors.

There’s kind of a psychological wall at 200,000 km. That’s when it seems to buyers that the vehicle is really really used. Under 200k, means you’ll likely get a few more bucks if you do sell it. Dealers aren’t interested in something that old. Trade ins have to go through their service department, and the little things, the safety inspection, etc. are too expensive to recover. They also don’t want the reputational hit of selling something that old. In other words – never trade something older than five or six years old. Dealers will just call a wholesaler to get rid of it immediately and it’ll end up on what’s called a mud-lot – a very very used car independent dealer.

My main decision factor is whether my vehicle is reliable. That’s my number one concern. If you’re not sure, have a mechanic check it out. That $100 or so doesn’t guarantee another few years of driving, but it’ll help you decide what you should do. The other question is what would you replace it with? If you can sell yours privately for $6,000 and get a newer one with 100,000 less km on it for $1,500 or so – that may be worth it. If you’ll just end up spending more money on another one with mileage just as high – that wouldn’t make sense. So there isn’t a black or white answer, and I sure wish there was a guaranteed predictor of reliability. But even if you need some repairs, Consumer Report uses the rule of thumb that it’s fine to spend about half the value on repairs before you should bail and replace it.

Back to School Financial Tools For Ages 5 to 25

Hurray for most parents this back to school week. Likely, not so much for students…

This might be a good time of the year to talk about financial tools for your kids or grandkids from elementary school to university age.

However, we should start with parents: Almost 80% of them do not talk to their kids about finances or money at all. That’s a failsafe recipe for dooming their financial success as adults – period. If you don’t – who will? If you need the tools and what-to-do, go to Mosaic or Amazon and invest the $20 in the Money Tools book. Start with the chapter of “For parents of kids aged 4 to 40.”

If your child is going into elementary school, you’re around the age when they’ll start to get an allowance. I believe the only way to do that is to have them earn it. Set it up with whatever chores match their age and ability. Do not give them free and unearned money. News flash: That’s not how real life works as an adult. Do that now and it’ll be a decade of pain, debt, and borrowing from you until they learn that hard lesson for themselves. You get what you earn. Non-negotiable rule number two is that one-third goes into savings, one-third into giving, and one-third for spending.

Going into Junior High, it’s time for the just about teenagers to learn financial responsibility for themselves. Ask other parents what they do when your 12 to 14 year old loses their backpack or something else for the fifth time? The parent buys the sixth one. That’s insane! Stuff costs money – money you had to earn. Before the start of school, make the rule really clear that the second or third time (that’s your call) whatever they’ve lost is going to get replaced with their allowance money. They’re also now old enough to set up a savings account and an investment account under your name. Now is also the time to start talking about saving for a car, and make it clear you’ll match whatever they save up to a certain amount.

In High School, your child is now just a few years away from being an adult – whether you think of them as such, or not. Financial stuff will get really serious in just a few years for them. Most of the predictors of how they’ll handle that are fixed already, based on the last decade. Since a car is just around the corner, give them the Money Tools book and pay them some money for a book report on the car buying chapter. Knowledge is power – and way more powerful if they have a stake in it and are treated as semi-adults in being the driver of the research and purchase decision.

Going into university is a whole different world for both parents and students. As parents, I’d make absolutely certain, and in writing, that the financial ground rules are really clear. For example: We will let you live at home as long as you’re a full-time student, we will pay x amount of money every semester for your books and courses, a certain amount for this or that, etc.

For students, it’s really difficult for them to visualize themselves five or ten-years out. It’d be incredibly insightful to have them meet a few 30-something graduates that have huge student loans and what that financial pressure is like, and what they have to forego, even a decade after graduation. That’ll impact whether pizza and beer is coming from their student loan money. Yes, over 50% use it for vacations, eating out, and the likes. If you have the Money Tools book, there are lots of insights for kids going into, now in, or just graduating students that are incredibly powerful.

See What Facebook Knows About You (and sells to advertisers)

More than 18 million of us are on Facebook (FB), and for those under 35, it’s over 80%. That means millions of us are being marketed to every day. And you have to remember that you are NOT their customer. Their customers are the people paying them – and that’s advertisers. You’re just their product.

That FB readily and frequently sells all of your data and friends list became very public with the Cambridge Analytica scandal. Since then, FB has made it possible for you to actually see what they have on you, and it’ll be quite a surprise.

You can now go into your notifications, then settings and pull something called “your FB information.” I did that last week, and after five hours, FB sent me an email that it was ready. After 11 years on FB, the file was 14mb in about 50 different categories.

Here are the exact steps to pull yours:

Notifications – Settings – General – On top you’ll have Your Facebook Information – Download your information (just make sure all items are checked off) Then click “create file” and you’ll get an email that they’re working on it. Then a second email when it’s ready for you to download and view.

Ad interests: This is a long and complete list FB has of the ads to really target to me. These are the industries that will pay extra to target me because FB thinks it’s something I’m really interest in. If that were true, it’d be something I’m more likely to click on and buy. Some are legit, such as books, personality types, publishing, and anything to do with Arizona. Some are totally out to lunch: Continental airlines? One of the worst in North America? Reality shows, Virgin mobile, and dance troupes are out to lunch. And FB now thinks I’m looking for hair products ads. Wrong…but I didn’t catch why they think that until I saw that I had “liked” a post from a hair salon who is my client. That one click now has a dozen advertisers target me as interested.

Advertisers who uploaded my contact list to use: That’s scary if you don’t have your privacy settings locked down. In my case, they tried and didn’t get it. It’s a list of over 100 companies, 80% of which I’ve never heard of.

Comments is a section of everything over the past 11 years that I’ve ever posted on Facebook to someone. That’s pretty scary. It comes from my browser which I clean up regularly, but FB has it all and remembers it. The posts section gave me the thousands of people and every item they had ever posted on my page. That’s from 2,000 people I’m on FB with over 11 years…

Messages section has every note you’ve ever sent to someone, even if you deleted (unfriended) them. This is where you’ll find the painful reminders, and all the exchanges with your ex-spouse or the likes. FB keeps it to use keywords to market to you, just like Google looks through your emails.

My login history gives me the full list of every single time I’ve logged into FB. It’s down to second and which of my computers and what browser. Guess I can use that as an alibi if I ever get arrested to prove I couldn’t have been at the crime scene as I was on FB at the time…

The lessons, other than the shock of seeing what FB really knows about you is that you have to lock down your account. Spend the two minutes b going to settings – then the privacy section. Change the “who can see your posts and who can see your friends list (that should be “nobody”). Go to ads and click that they’re not allowed to use your information and lastly, go to “apps and websites” and select only those shown who you’ll allow to access all your information.

Finally, here is the article from CNN that gave me incentive to go look. The insights from their writer are worth reading:

Perception Vs. Reality Can Really Cost You

In the 1980s, A&W was being clobbered in sales by the McDonalds ¼ pounder Big Mac. So they launched a one-third pound burger, and at a lower price. It didn’t work at all…because most customers thought a quarter pound was bigger, and thus a better deal, than a third of a pound. Perception versus reality and great marketing made customers think the Big Mc was a better deal and bigger.


In that same way, we lose our minds when there’s a sale: It seems logical to want to get a deal, lots of times, a deal isn’t a deal. But we see that big sale sign, our brain shuts down and our wallet opens up.

I was in a mall last week walking past a national retailer on my way to Tim’s. They had massive posters in the window promoting: Buy one and get the second at 50% off. OK, one a full sticker price, the other half price. That translates to a 25% discount. I’m not even going to question whether someone really needed two of whatever…

As I walked past the store, one of the staff was coming out, and it turned out that she was also heading for Tim’s and ended up right in front of me in the lineup. So I asked her if the 50% of the second item was going well? “Oh for sure” was her answer. “It’s better than when we have our 40% off everything sale.” WHAT? 40% off doesn’t do as well as 25% off? Yup – we’re suckers for the sign that says 50% off without ever looking at the fine print.

One more example. But this one is probably one of the most misleading and false ads I’ve ever seen. It ran on one of the CFL football games a few weeks ago: It’s an ad from Home Hardware. A realtor appraises a house for a family at $375,000. They then paint the entire house with some kind of Home Hardware paint and have a different realtor in to re-appraise the place. That guy says your place is worth $485,000.

Hands up if anyone on the planet really believes $300 of paint will increase the sale price of your home by $110,000. No – didn’t think so. I haven’t seen it since, so let’s hope it’s been pulled by complaints to the regulators.

Walmart Used Car Sales

Since you can buy pretty much everything at Walmart, why not a used car? Yes, Walmart is now in the car business. It started last year in the U.S. with 14 locations in Dallas, Houston and Phoenix and went so well, it’s now rolled out to 250 stores. It’s called Carsaver and lets you buy at an instore kiosk, a downloaded app or a dedicated website at

Walmart’s Carsaver doesn’t actually compete with used car dealers since you take delivery at the dealership. But they do claim to save buyers $3,500 and another $3,900 with their lifetime no mileage restriction powertrain warranty. Let’s hope that something else that starts in the U.S. and does come to Canada.

Withdrawing From Your RRSP

A recent Bank of Montreal survey found that the amount we’re withdrawing early from our RRSPs has increased to an average of $21,000, and 40% of us are taking money out of our RRSPs way before retirement.

Why? The top three reasons are to pay for living expenses (23%), for an emergency (21%), and to pay off debts (20%). It’s a horrible idea for all three of them.

The survey inconveniently leaves out the fact that this figure of $21,000 includes the people taking money out for first time home purchases, which inflates the average by quite a bit.

But for those of us taking out money for bills, emergencies, and debt – don’t do it. I know it’s hard to breathe and even harder to sleep and function when you’re in financial trouble. I’ve been there – and I’ve done it. But take a time-out and look at every alternative before you kill your retirement money, because there are alternatives.

First, you think you’re solving a problem today, but you are creating three much bigger ones: Next April you’ll have to pay tax on that RRSP withdrawal. Since you clearly aren’t flush with cash now, you won’t be next April, either. You’ll also have tax withheld off the amount you’re cashing out. So cashing out $10,000 from your RRSP really only gets you 80% of it, or $8,000.

And finally, that $10,000 isn’t growing and compounding inside your RRSP anymore. In 20 years from now, that’s cost you around $30,000 in lost income. Out $2,000 tax withholding – out more tax next April, and out $30,000 or so when you get close to retirement. It’s an entire chapter in the Money Tools book called “Today’s problems become tomorrow’s nightmare.” Go down to Mosaic and invest the $20 in the book that’ll save you $35,000 or more in this example alone!

The book will also give you a ton of ways to solve your cashflow problems without killing your RRSP. You need to decide if the problem today is so bad and urgent that you’re willing to trade some relief today for significantly increased financial problems by not having that money when you’re retired.

Is your emergency a real emergency or something you can save your way into over a couple of months? Do you understand the math of paying off a debt today and how little that saves you when compared to five to ten times the cost of cashing part of your retirement savings? Can you take a deep breath and finally do a 15-minute budget to see where your money is going? Will you acknowledge that your current financial plan sucks and this is going to be necessary again unless you’re prepared to change some things around? Can you get an overdraft, instead? Yes, it’s a horrible idea, but better than the alternative you’re considering? How about taking it out of a credit card? No, it’s not a good idea, but the lesser of two evils even at 20%. Yes, there are more alternatives. I hope you read the “tomorrow nightmares” section of the book BEFORE you make the call to get the money.

My Medical Tourism Trip to Mexico

A few months ago, one of my best friends just casually mentioned that he stopped in Mexico to get four crowns done for US$250 each. Then, two more friends raved about their visits that I knew nothing about, and a friend in Grande Prairie told me she’s heard “so many amazing stories about some of the dentists there.” That was enough for me to book an appointment. Remember that I’m extremely skeptical and suspicious. As I’m self-employed, I have no coverage for anything dental from anyone. However, saving money does NOT trump buying problems. But I couldn’t have been more mistaken in my hesitation and am now choked I didn’t know about this secret dental heaven decades ago.

Yuma, Arizona is located right at the corner of California, Arizona and Mexico. Just across the Mexican border is a town called Algodones. It’s the medical centre of the Western United States. From optometrists to stem cell therapy, and chiropractors to dentists. In fact, there are well over 350 dentists in Algodones. NBC Los Angeles calls it “the pilgrimage to nowhere and the best kept secret in the West.”

From October to April, their busy times when way more than half of all dental patients are from Canada. Who knew? I certainly didn’t know – and had never heard of Algodones.

Here, just like the U.S. and Mexico, not all dentists are the same. The one that my friend had experience with, and who I visited and highly recommend, is Dr. Maria Fonseca, DDS (I’ll post her business card, along with more details of my trip online. )

To make it happen isn’t complicated. I checked into a Yuma hotel last Sunday night and drove to a huge parking lot at the border Monday morning. For $6 I parked on the U.S. side and walked the equivalent of three blocks to the dentist (Or it’s about a 2 ½ hour drive from San Diego). No passport control, no Mexican immigration – just come on it. From the time I left my hotel room to the dentist’s office was 30 minutes.

While I was certainly a little apprehensive, that didn’t last long. Most of their offices are two-chair sole proprietors and everything is as modern, or nicer, than I’ve seen here in Canada. All the posters on the wall were in English, as were all the forms and receipts. It certainly helped that Dr. Maria has over 14 years’ experience, and is as professional as she is nice and thorough in her work and explaining each step and procedure.

Then it was seven hours of having my mouth open without talking: a cleaning ($40) 6 crowns ($250 each with temporary crowns that day, and a short return visit two days later for the permanent crowns), a root canal ($300 at a separate Endodontist), and a filling ($80). That’s about US$1,800 total. A relative with one of THE best union medical plans paid over $1,600 for his last crown with 50% deductible, and over $1,500 for a root canal, also at 50% out of his pocket. My six-month cleaning is usually $280 or so, and a filling is around $200.

That would have been a total of almost $12,000 here, instead of the $2,300 I paid in Algodones. A $10,000 saving if you’re keeping track. Even if I HAD great dental coverage, my saving would still have been $800 per crown, and $1,200 for the root canal, or over $5,000.

“Potentially, there could be a problem. It’s buyer beware…” is the comment from the American Dental Association to NBC Los Angeles, and I’d bet the Canadian arm would make the same comment. Fair enough comments to protect their dentists. However, my response would be that I’m not trying to save a few bucks on a heart transplant or kidney operations. It’s also buyer beware at the Dollar Store and this is not life-threatening, but only a root canal, fillings, a cleaning and/or crown.

Here are a few more details if this is something you might want to consider:

Dr. Maria Fonseca, DDS: I chose her, as already mentioned, because of the first-hand experience from someone I trusted that had been to see her a few months prior. She’s also not someone who hires hustlers at the border to pass out flyers or the likes. (I would never consider dealing with someone who resorts to that!) She’s experienced, and thoroughly professional. Do your own due diligence, but if you want to contact her, the information is on her business card below. Who knows, maybe I’ll see you there in October for my next planned visit.

Why is it less expensive? The dentists in Algodones have the same training and education as those in Canada and the U.S. What they don’t have, however, is the massive overhead of the other two countries. From staff costs to taxes, rent, insurances, etc. their cost structure is just so much less than Canada and the U.S.

My root canal: On removing one of my 20+ year old crowns, that tooth needed a root canal. My dentist made a call to the specialist, and a runner from the Endodontist office came to pick me up within five minutes and walk me the one block to their office. (Dr. J. Enrique Arenas) Tell me the last time any specialist was able to see you in five minutes…five months – maybe…Their offices were THE most nicest you could imagine. It was also a two-chair/two room dental office with incredibly modern equipment, including a 60+-inch screen to view the x-rays. The root canal on tooth 16 took about 20 minutes, and they did show me the final X-ray (before my dentist could put the crown on that tooth.) While the work was professional, as was a great assistant, their office wasn’t – at least on the day of my visit. Five or six staff were standing inside the office where I was in the chair for no reason. They were chatting and texting with lots of “pings” in the background of their incoming texts. Two different people may have been the Endodontist – they never did introduce themselves. That was the “not very professional” part of their half hour with me.

When to go: ‘Rush-hour’ in Algodones is from October to April with all the snowbirds in Arizona and California. If you’re walking across the border to Mexico, that’s never a problem. If you’re driving, it can be one or two-hour delays to get back into the U.S. past Customs & Immigration.

How long will it take: Who knows – because that depends on what you need or want done. If it’s a crown, remember that every crown has to be custom made in a lab. That’s one day in between your appointments. In my case, the long appointment for all my work was the Monday, with a two-hour return trip on Wednesday to get the six crowns fitted and put on. If it’s an implant (that I should have done on my next visit) it’s one appointment to pull the tooth and insert the pin into the bone. That has to set and heal, so your next appointment won’t be until four months later (or when it fits your second trip back.) The total for that, by the way, is US$800 for the implant and US$300 for the crown over the implant. Of course, fillings, cleaning, or a root canal that may be necessary are all one-day issues.


Is Traditional Banking Dying?

Banks have now spent over 30 years getting us out of the branch and onto using ATMs. They’ve also spend almost a generation slowly getting us to use online banking. Those are certainly big changes to the traditional banking model. But when they don’t see you in the branch, it’s much more difficult to sell you products or services.

On the one hand, that’s great news. You can’t be sold something you don’t need, or that’s not suited for you, if you don’t talk to the commission based people in the bank. On the other hand, banks’ profits keep reaching new highs of billions per quarter. Well, that’s because the service charges increase twice a year now and we just take it without firing them.

But how long can this go on? Here are some insights from the founder of a new U.S. online bank called Bankmobile. They’re U.S. stats, but we’re not much different here in Canada:

The average person goes into a branch twice a year, but does 20-30 transactions a month. What’s even more stunning is that the average bank branch opens between 40 and 50 new accounts in a year! That’s it!

The average online banking customer is 27 years old. And I’d bet most of them have never been anywhere else but online.  I recently talked to a 20-something who had never seen a cheque, never had a cheque book, and had no idea what they are, and what they do. He’s not alone – an entire generation has direct deposit and online everything else.

The millennial generation of 35 and under are actually way smarter than us older people who deal with banks. As of an hour ago, online bank Tangerine (bought by Scotia from ING) has a basic savings account rate of 1.1% vs. TD of zero interest until you reach $5,000. Then it’s 0.5% – same as the other banks. So the online banks are more than double the rate and don’t grab your first $5,000 without paying you a cent of interest.

In the U.S., the branch network has shrunk by 10% over the last few years and is expected to shrink another 20% in the next three. The largest nine Canadian banks have 6190 total branches – no change since 2012. Many fewer visits, but still an incredibly expensive branch network. Small wonder they have the highest service charges, up them twice a year, and literally half the savings returns compared to online banks.

Maybe the under 35 generation is helping us all out by avoiding the physical banks in favour of online banking at vastly lower fees and significantly higher savings rates.