Author Archives: George Boelcke

The Free Way to Save $600

In June, I shared a Facebook story that a full 2 l bottle would hold $500 worth of dimes. So I decided to try it with every type of coin. Good news and bad news: I did fill the bottle inside of five months. It was easy for me, because I’m a small purchase cash guy. I don’t use debit cards for every two dollar purchase. The bad news? The full bottle was just over $600 in total. At first I was quite disappointed. Then I realized dimes take up a lot less space than loonies and toonies. But, what the heck, 50% of Canadians can’t save one week of net pay. This accomplished it and didn’t really cost me anything at all! The next bottle is now in use!

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If Time Is Money…

Do you remember the old saying: Time is money? In lots of ways, it was and certainly is true. But does it apply to watching TV or being on social media?

In 2022, the average person spent just short of two and a half hours a day on social media. Whether it’s Twitter, Facebook, Instagram, YouTube or wherever, that’s a staggering amount of time. And that’s an average – so there are just as many people who spend five hours as there are those who aren’t using any of them. If time is money, that’s a huge part of the day that isn’t productive. That’s why I find it funny when I keep hearing on commercials, interviews or wherever the constant theme of: In our busy lives… Sure everybody’s busy. But busy doing what?

That doesn’t even include the time we spent watching TV. And yesterday I heard some pretty surprising stats for those of us who watch sports on television. These are the average times of ACTUAL play by play. Not the commercial, jibber jabber, replays, panning the crowd or the sidelines. Just the total broadcast time of the actual play:

Soccer game: 58 minutes

NHL hockey game: 53 minutes

NBA game: 49 minutes

Major league baseball game: 22.5 minutes

And the biggest time-waster of all sports on television? Pro football at 18 minutes of actual playing time!

To Downsize Or Not?

Here’s a great question that’s worth sharing and thinking about for any of us within 10 to 15 years of retirement:

“I was wondering if you could give your opinion on which direction my husband and I should take?   At what point does it make sense to sell your home and downsize? Financially, we are sitting home with an outstanding mortgage of $300,000. Our home value is about $725,000. We are both in our 50s and will be relying on the equity made on our home to fund our retirement. I will have a small monthly company pension and my husband will not. My question for you is, do we try and sell our house now and pay off half our mortgage/credit line? Or would it be financially better to remain in our home for another 10 years or so, and chip away at our mortgage?

Sadly, the answer is: I don’t know. I can’t answer that for you because the critical part is the answer to what the value of your house will be in 2032. If anyone claims to know that, they’re lying to you. I can’t even get more than three lottery numbers right so I’m not the one to ask.

You need to remember that I only ever answer questions, or talk about stuff, in terms of what I would do because I don’t ever have all the information. In my case, I don’t have any pensions and my house is up for sale in order to downsize significantly.

Half the world would ride it out and hope for a much higher value. The other half more conservative and risk averse group would downsize and reduce the debt, the interest that’s needed to carry it, and lock in the guaranteed $725k value by selling.

But lots of that depends on what degree of downsize. Using your math, it’d be about $1500,000 on the new condo, house, etc. Would that, divided by 10 years, be workable? Would those payments guarantee that you’ll be debt free in 10 years when retiring? If so, that’d be a huge saving.

After all, whether you make more income in retirement or have LESS debt to pay, it amounts to the same thing…actually it’d be more valuable as income is taxable, paying off debt isn’t. That’d be like an extra $1,500 in retirement that’s not going to the mortgage!

Gamble the house is $850,000 in a decade and that any correction comes and goes in that cycle, that there’ll be no correction, or take the money and run? That’s entirely up to you two and your comfort zone.

I do know that you can’t eat your equity. In other words, the equity isn’t something you can use unless and until you do sell. So the day will come…but when?

And Another 3/4 Percent Rate Increase

As predicted, the Bank of Canada increased interest rates by another three quarter percent this morning.

Hopefully you were able to get an early mortgage renewal as we talked about two weeks ago. Or at least passed on the heads-up…

If you’re not anywhere near renewal – many of us are envious. Even more so if you don’t have a mortgage in the first place!

On a $400,000 mortgage, for example, today’s change will increase a mortgage payment by $250 a month (or $62.50 for every 100,000 of mortgage balance). Between the rate increases and the Trudeau stress-test there aren’t going to be many first-time buyers that will have any chance of qualifying for their first home.

How sad that the Federal Government seems to have a single-minded focus on stopping home sales when it’s such a massive part of our economic activity from legal fees to home improvement stores, builders to realtors. Let’s hope that, at some point, they realize more supply would make a massive difference…but that’s not likely…

Happy New Year! If You’re Shopping For a New Vehicle

You and I think of new year as being January 1st. But that’s not the new year for vehicles. Their new year is August, so you need to think of this month as being 2023 for their new model year. The factories started building them in March or so, in spite of the parts shortages, mostly related to computer chips.

Ford is currently running a national television ad that starts with the voice-over of: Is the deal a really great deal? OK, let’s take them up on that question. This isn’t about Ford, it’s just their cute catch-phrase.

In spite of the supply problems (which are now easing) there are lots of of 2022s for sale, too. Dealers are now on a big push to sell them, because they can’t send them back to the factory to be melted down. They have to be sold…although that’s certainly easier when some dealers have less than a dozen new vehicles on their lot…

If you’re buying last season’s clothing, you won’t be very trendy. But you’ll get a great price, and in the world of clothing it isn’t a big deal unless you’re a super-sensitive fashionable teenager. It matters a lot more to your wallet on a vehicle purchase. If you’re keeping it for 10 years or longer, and can pay cash, you may get a great deal, and all you’re missing is some of the 2023 model technology, which really isn’t a big deal.

Keeping a vehicle that long means you’re driving it down to a thousand bucks or so. But if you trade frequently, you’re going to be shooting yourself in the foot buying a 2022. The day you take delivery it’s a year old. So if you’re trading it in two years, you’ve actually got a three year old model and that has a huge impact on the value. That’s the reason over 40% of people who trade their vehicles owe more on their loan than it’s worth.

If you drive it into the ground and can afford a new vehicle, the 2022s could be a great deal for you. Start looking after the middle of September. That’s the month most manufacturers send around 5% of the cost of all old models in stock to the dealer to help them with advertising and price reductions. When that money comes through you’ll see the big wave of advertising and that should be your cue to start shopping while the selection is still pretty good. Between now and then, invest the $20 in the Money Tools book and just read the vehicle buying chapter. That’ll turn into a few thousand once you start shopping.

Or you can skip this altogether and do what I do: Drive your vehicle forever – and then another year or so after that. Assuming it’s reliable and you do the maintenance, there is literally nothing that will save you more money. Sure you can skip buying the odd coffee or the bigger dollars by skipping one or two restaurant visits. But nothing comes close to what you’ll save in car payments and depreciation by driving your current vehicle. I know, because yesterday I celebrated my 300,000th anniversary with my 2007 Ford Fusion.

Close To Your Mortgage Renewal? Make a Call To Save $10,000 Or More

There’s another (likely “only”) half a percent rate increase coming at the next Bank of Canada meeting in September. While inflation seems to have peaked, but that’s just an educated guess, our rate increases may not be over until the end of the year.

If you have a mortgage coming due for renewal like I do, it’s not a pleasant thought. However, if your mortgage comes up in the next six months, a number of lenders WILL let you renew if you’re within that six months! That’s what I did last week. My rate is going up 2.4 percent, but that’s better than three percent after the September increase, and any other jump after that. Check with your lender today if your mortgage is up in February next year or earlier! That call may end up saving you over ten thousand dollars!

What’s the rate increase going to cost you? That depends on the rate you currently have. However, a 3% increase on each $100,000 will be $3,000 a year. So someone with a $400,000 mortgage will see their payments go up close to $1,000 a month! What do you get for that? Nothing! It’s a huge increase in your monthly spending for just getting to stay in your home. Yes, it stinks and it’s depressing, but that’s what rising rates cause. Your early renewal will start the following month, so be ready to change your payment budget!

How long should you renew for? That’s up to you. I only ever answer questions as to what I would do – or in this case, what I did. My thinking was that rates will peak sometime next year at the latest. But then it’ll take a while for them to ease downward. Like gas prices, they spike up and take forever to come back down. Even when the Bank of Canada decreases rates, that doesn’t mean the chartered banks will immediately pass that prime rate decrease on. So it didn’t make sense to me to just do a two-year mortgage for that reason. But I sure wasn’t going to sign for five years at these rates as selling or refinancing triggers a big penalty (typically three months or the interest differential – whichever is larger.)

So I picked the kind-of middle option of a three-year term at 5.2%.

While my mortgage is pretty small, I sympathize with anyone who is close to the $400,000 mortgage example about to flush $36,000 of net income down the toilet over the next three years…

Close To Your Mortgage Renewal? Make a Call To Save $10,000 Or More

There’s another (likely “only”) half a percent rate increase coming at the next Bank of Canada meeting on September 7th. While inflation seems to have peaked, but that’s just an educated guess, our rate increases may not be over until the end of the year. (Their next meeting date to likely raise rates again will be Oct.ber 26th.)

If you have a mortgage due for renewal like I do, it’s not a pleasant thought. However, if your mortgage comes up in the next six months, a number of lenders WILL let you renew if you’re within that six months! That’s what I did last week. My rate is going up 2.4 percent, but that’s better than three percent after the September increase, and any other jump after that. Check with your lender today if your mortgage is up in February next year or earlier! That call may end up saving you over ten thousand dollars!

What’s the rate increase going to cost you? That depends on the rate you currently have. However, a 3% increase on each $100,000 will be $3,000 a year. So someone with a $400,000 mortgage will see their payments go up close to $1,000 a month! What do you get for that? Nothing! It’s a huge increase in your monthly spending for just getting to stay in your home. Yes, it stinks and it’s depressing, but that’s what rising rates cause.

How long should you renew for? That’s up to you. I only ever answer questions as to what I would do – or in this case, what I did. My thinking was that rates will peak sometime next year at the latest. But then it’ll take a while for them to ease downward. Like gas prices, they spike up and take forever to come back down. Even when the Bank of Canada decreases rates, that doesn’t mean the chartered banks will immediately pass that prime rate decrease on. So it didn’t make sense to me to just do a two-year mortgage for that reason. But I sure wasn’t going to sign for five years at these rates as selling or refinancing triggers a big penalty (typically three months or the interest differential – whichever is larger.)

So I picked the kind-of middle option of a three-year term at 5.2%.

While my mortgage is pretty small, I sympathize with anyone who is close to the $400,000 mortgage example about to flush $36,000 of net income down the toilet over the next three years…

Sorry Okanagan

One of the top five things I miss about living in the Okanagan is fresh Okanagan fruit. I miss the days of picking cherries, buying strawberries, or being able to get a few peaches at the side of the road.

There hasn’t been a year when I haven’t bought a bunch throughout the summer and fall – until this year. Last week one of the discount grocery chains had Mexico and BC peaches. The prices of the Mexican peaches was half as much as the “local” BC ones.

Yesterday I was at my local grocery store which had a big display of “flyer special” Okanagan cherries. Hurray…or so I thought. This pre-packaged bag of cherries might have been 50 of them – tops.

Fast forward to the checkout cashier a few minutes later. She looked at the cherries – she looked at me – she scanned them through. I thought the “look” was kind of weird but it made perfect sense when I saw $11.65 show up on her screen! WHAT? Take those off, please. Her response was: I don’t blame you – you’re not the first one…

Sorry, Okanagan. I don’t know who is getting the money, but I’m quite sure it’s not the orchard owners! According to the store cashier: Add me to the list of people who certainly can’t afford or justify spending almost 12 dollars for around 50 cherries.

The Travel Troubles Continue

My decision to not go anywhere near any airport this summer is starting to look better and better as flight nightmares continue to get worse and not better.

In July, Air Canada and Pearson airport in Toronto, once again had the distinction of being the airport with the worst delays in the world. Yes, the world! Right now, the average flight delay is longer than the average flight! Just think about that for a minute..

Air Canada seems to be spending more time denying compensation or refunds than they are trying to get back on track. According to a Bloomberg story today, the airline is hiding behind “technical” and “maintenance” issues to avoid refunds that, by law, they clearly owe to their stranded customers.

Last Tuesday Air Canada cancelled a flight from Nashville to Toronto for “technical” reasons. However, flight tracking data showed this exact same airplane, an hour later, flew into Boston. So: Big fat lie on “technical” issues. But it’ll allow the airline to refuse compensation to a ton of people stranded at the Nashville airport.

An even better one was Air Canada’s notice that a flight from Montreal to Lisbon on July 17th would be delayed due to bad weather. Why? Because “bad weather” avoids passenger compensation. One slight problem: They sent this notice TWELVE days before the flight. There are lots more stories, but you get the point.

If you do run into airline “turbulence,” AKA: B.S. your only recourse will be to file a complaint with the Canadian Transportation Agency. But get ready for a one-year wait. I posted my story of attempting to get from Edmonton to Kamloops last November and only got as far as Vancouver in 24-hours. I’ve been awaiting a compensation ruling for nine months without even getting an update from the agency… Hurry up and wait: Whether you’re trying to fly or waiting to get compensated for not flying.