Category Archives: Blog

Breaking Down the “Free” Phone Offers

Almost every add, from every cell carrier, comes with the promo line of getting a “free” phone. Well…not so much. What it actually comes with, if you read the fine print, is a two year locked in contract at a BIG price.

Not paying for a new phone up front has no connection to “free” over those two years. Plus, all those contracts come with BIG early termination penalties. I would never sign one of those. For me, it’s always critical to stay being a free agent!

My current carrier is FIDO. They are the 2nd tier small sister of Rodgers. Because they just sent me this “free” offer, I’ll use them as an example. All other 2nd tier carriers will be about the same. All first-tier carriers like Telus, Bell, and Rodgers will be similar, just more expensive.

My cost is $40 a month because it’s an old month-to-month plan. New customers who bring their own phone can get it at $45 a month right now. The current promotion is double the 1 gb date to 2 gb, which is plenty if you do not live on your phone with youtube or watching movies. It’s unlimited texts and talk.

You can get a $15 a month plan if you bring your own phone. It has a tiny amount of data (250mb) enough to check stocks, short google searches, the weather, or hockey scores a few times a day. It’s unlimited texts but no call minutes – so you’ll pay 50 cents a minute.

That’s the baseline: $15 to $45 for no contract plans. Now let’s add the so-called “free” phone. In FIDO’s case, their promotion is the new iPhone 11 Pro. Pay for it up front and its $1,200. To get that you must sign an XL plan at $105 or more per month for two years. Yes, it comes with extra data, but $105 vs. $45 is $60 x 24 months or $1,440 for the phone.

Do the math on any plans with any carrier and it’ll take you less than a minute to see if your free is actually free…it isn’t – anywhere from anybody. There’s no such thing! How much you want to pay is up to you and your wallet.

Last week, I bought a new (new for me) iPhone 7. It still has six months of warranty and I paid $300. THAT lets me stay a free agent for at least three more years. I saved $800 over a new one, it’s in mint condition and saves me $60 a month not having a contract. $800 up front and $60 for the next three years is a total saving of $3,000! THAT is how you win at the cell game.

Oh, and I’ve mentioned them before: I get mine out of Winnipeg from TB Cellutions. Here’s their link on eBay Canada again:

http://stores.ebay.ca/TB-CELLUTIONS

Helping You This Christmas

It’s not just a US problem in having Amazon parcels stolen from your front door. But this might help: If you, or a family member, or neighbour have a lot of Amazon parcels dropped off, take the empty boxes from them.

While you’re cleaning your house for Christmas, take a bunch of stuff worthy of donation to the thrift stores. Take the stuff that isn’t donation worthy (in other words: your junk) and put it into the Amazon boxes and leave it outside your front door. If it’s stolen, it’s a win-win. You got rid of your junk and the thieves have their score…and maybe another chance to get caught! Talk about great recycling…

Want to help President Trump with a coverup? No, I’m not getting political…coverup as in Christmas wrapping paper!

This is guaranteed to make any potentially boring Christmas with relatives you may not be to fond off a whole lot more “interesting.”

For $35 you can buy Trump wrapping paper in three different styles and colours. One has snowflakes and a message of “I stand with Trump.”

Now THAT would….how do I put this…”liven up” your Christmas with the relatives.

Before you laugh or dismiss this, the National Republican Committee has sold over half a million dollars from this already! If you’re super excited about this AND want to save five bucks, you can get it on Trump’s campaign store: One 6 ft roll for $30….

Banks Want to Force You to Go Paperless

Two of the banks, including Scotia have now become more aggressive in bullying you to change from mailed statements to online and paperless. That’s your choice – not theirs!

On some of my accounts I want a paper statement. It massively increases the odds that you’ll actually scan it for inaccuracies or problems and I need to keep them for seven years anyway – so I’ll have to print them no matter what.

If you deal with Scotia, here’s what’s now coming up when you log in:

You’ll see that there’s no way to “x” out of it, click a “no thanks” or type in “leave me alone.” It forces you to click it and to go there. But no worries – the 2nd screen needs you to confirm you want to change to ‘online statements.’ At that page, just click on ‘accounts’ and get off that page and you’ve left your settings.

A Great and Extensive Cruise Review

I love, love, love cruises. My 20 plus cruises are always my favourites. But it’s not for everyone. You either love it or…not so much. If you’re the former, you can search for previous cruise stories over the years.

And here are two USA Today stories you’ll get lots of value from:

USA Today’s Cruise Lines, destinations, rankings, etc. https://travel.usnews.com/cruises/

And a great story on 31 insider secrets you should know to get the most value and enjoyment: https://www.usatoday.com/story/travel/cruises/2019/07/15/cruise-tips-secrets-and-hacks-cruise-lines-carnival-royal-caribbean/1738637001/

Tim Horton Troubles Continue

Yes, it’s still a financial-related segment, but today it’s about Tim’s. No, it’s not time yet to do a gofundme page for them, but they’re certainly not doing well. Do remember that Tim’s isn’t actually Canadian anymore. After their merger with Burger King, they’re owned by a Brazilian billionaire’s company called 3G Capital.

Last week, Tim’s announced the end of their CIBC Double Double Visa card that only started four years ago. I called it – all their hype didn’t translate to enough people getting their Visa at only 1% cashback. Sure, the press release (after days of meetings with CIBC I’m guessing) states it was mutual and both are moving on to bigger and better things. But that translates to: The CIBC can only market so many cards and this one isn’t enough volume or card holders to continue with. The same thing happened with RBC and their Mike Weir (the golfer) card.

If you have one, CIBC will automatically switch you to their Dividend Card. You may have seen this coming as CIBC has been sending $40 cash incentives way before the announcement to switch to another of their cards. Even if you don’t want that new one – it’s too late. So take that card and activate it. Your history will or should transfer over. If not, shame on the CIBC for dropping your credit score! Cancel it after a few month if you want and if you are NOT going to be looking to borrow for at least six months. If so, keep the card or your credit score will drop a bit!

And my predication number two is coming to pass: Their just released Rewards Card that gives you a free coffee after 7 purchases is going to get clawed back. That, according to their Canadian CEO on an investor conference call. Right now they’re losing money on it. About 50% of customers use the Reward card which costs them money – but it’s not increasing sales. They want to switch to ‘individual rewards.’ In other words: You’ll get rewards based on how much you deal with them.

Right now, their sales are down 1.4% in the last quarter. I’m partly responsible as my Tim’s trips are down by half: Their new dome lids leak a lot and after three times going home to get changed, I realized I was getting average coffee and frozen, then re-heated bagels with long lineups in stores because drive-throughs take priority and I could do better elsewhere. When the Rewards card changes – it’ll be the end of my love affair with Tim’s.

Lessons From Last Week’s Book Signing

Every time I do one of my (rare) book signing, I learn a lot. If it isn’t an insight, it’s what I need to explain better, more or differently. From last week at Mosaic Books, it was:

Making your teenager a millionaire: Your teenage relative won’t do it because you tell them and YOU know it’s guaranteed to work. They won’t listen to you and you can’t want it more for them than they want it for themselves.

A teenager isn’t likely to even listen to you. But maybe they’ll “get it” from the two page Money Tools book chapter. They have to read it and understand compounding works better the younger the person investing. You also have to remember that saving $9,300 is like asking you to come up with a few million bucks. Teenagers dream of $300 bucks and a BIG shopping trip to the mall next week. They don’t dream of $9,300 or anything past next month.

That’s where you come in: The chapter is two pages. When they ‘get it’ and work through the compounding math on their own where $9,300 becomes $18,600 in 7 years and $37,200 in 14 years without them doing anything at all – they’ll get committed. At that point you can also help. Maybe you can match what they save, maybe you can add 10 or 20% to what they save or whatever you can afford to boost the odds it’ll happen.

If you contribute anything at all, the deal should be that the investment account is in joint names. Your money is in there and then it’ll assure they don’t take out anything.

Not knowing this or doing this when I was early 20s or so is now one of the top 5 lifetime regrets of mine – for obvious reasons. And I’ll post the more detailed “how to and where to” invest again.

Spend the $20 on the book – at least make them read it and understand it – think about some seed money to get started or to keep going. THAT is starting a family legacy in ways nobody else does…

Investment How To

Money Tools & Rules book: Expanding on the “How to make your teenager a millionaire” chapter:

The fine print first: I only ever give feedback based on what I would do, and I am not an investment broker, investment guru, etc. Always do your due diligence and check with an investment professional, no matter what, because this how-to is for information purposes only!  For someone that age, investments should likely be in diversified good growth mutual funds with a long-term track record and no load fees. To find them, search for Morningstar, an independent rating company of all mutual funds, or it’s U.S. equivalent. Careful just giving someone some money: I would do it on a matching basis. I’ll contribute a dollar for every dollar that you save towards this goal, or I’ll contribute two dollars for every dollar, etc. But tell them a maximum, or a kid who is a great saver will surprise you, and cost you a lot more than you may have wanted to match!

Where to invest: At age of majority, everyone is entitled to contribute to a Tax Free Savings Account (TFSA) to a maximum of $5,500 a year. The great thing about the TFSA is that it isn’t income percentage linked – it’s currently $5,500 a year irrespective of income. And, while it doesn’t get him or her a tax deduction up front, it is also never taxed in the TFSA, and never taxed when it’s taken out! If the person is 20, for example, they can also use the available “room” for the prior years! They can also do it through an RRSP, but that’s to a maximum percentage of their income, and then it will be taxed when it’s withdrawn in retirement. But that’s up to you…

What to invest in: The younger you are, the higher your risk tolerance. That’s simply because you have a vast number of years to average out a bad year with a great year. The older you get, the more you need to protect your principal and not chase higher returns. That changes gradually as you get into your 50s and older. For anyone in their 20s to 40s, THE easiest investment with next to zero commissions and huge diversifications is the S&P 500. It’s a basket of the largest 500 companies – you can’t get much more diversified than that! And you can do it in ten seconds on your own (online or by call). You want (in my opinion) the S&P 500 Index Fund, ETF (electronically traded funds) in Canadian dollars (it avoids you having to do a currency exchange). The historical return over the past 50 plus years is 11.5%. That’s why I use 10% returns in all my examples. I’m using LESS than a 50 year proven track record average!

If you don’t want that, go to Morningstar and search any mutual funds in whatever category you want: Emerging markets, conservative, balanced, etc. by returns. Just make sure you’re only looking at the ones with a long-term track record!

Who to invest with: If you, or another family member is an existing customer of a brokerage firm, that’s worth checking out as to a)whether they’d take another family member with a small account as a favour to keep their (current big family) client and b) what the fees would be! If that doesn’t apply, it will likely need to be an online brokerage account. Most of the large banks have them – just don’t confuse their brokerage division with investing at a bank. That’s generally a bad idea with poor returns! Again, you can compare their published returns with those from Morningstar.

If you’re just starting, any online broker is fine. If you deal with any of the major banks, they all have an online brokerage. You just need a place and an account and can do the rest. They won’t give you advice – just execute whatever you want to buy or sell. No worries if you get the S&P Index funds – click to buy it and leave it alone until you’re in retirement. And for pete’s sake STOP checking it every month…set it and forget it.

How to get started: Open the account where you decide, and how you decide (RRSP or TFSA). I would do it under joint names. That way both names are on it (especially if I’m helping with money), and if it requires joint signatures  you’re sure the person doesn’t do something stupid and make a withdrawal to pay a bill, etc. without your consent and signature. That’s not what this money was designed to do. It was/is meant for retirement and never to be touched until then… When your minor reaches the age of majority and can contribute to an RRSP or TFSA take the investments you’ve already made and move them over to one of those! It’ll protect them from ever having to pay taxes on the returns inside either of these!!

To check reasonable annual returns: Do a web search for “historical S&P returns,” “historical Dow Jones returns,” etc. (On the yourmoneybook.com site you can click on “radio stories” and search “historical returns.” I’ve posted the chart going back about 70 years!! For someone aged 18 to 25, there are more than four decades before they should access the money, and thus four decades of markets going up and down, so the historical averages apply, and are well above the 10% used in the Money Tools example of How to Make Your Teenager a Millionaire. If you’d like, you can use a different guestimate of returns for the next four decades, and re-do the easy math (or with an online calculator) of how long it takes for the money to double. IE: If you use 8%, it’d be 9 years.

Hopefully that gives you some of the how-to and/or steps to get from here to there. (updated 11/10/2019)

THIS Is Paying It Forward

This is a Facebook post from a buddy of mine in South Dakota from earlier today. And it works the same way with the Money Tools book.

No, it’s not a box of chocolates or flowers for someone. But those are gone inside a week. With over 540 tools, tricks, and traps to avoid, there HAS to be a few that every person can learn and benefit from.

Care enough to share. Pay it forward. Believe me when I tell you it’s not just for someone who clearly “needs” it – but for anyone who “deserves” to do more, to do better…or maybe do a little “less…”