Category Archives: Blog

Thank You For Not Voting

Yes, this is a financial segment – but it’s about next weeks’ election:

If you’re a millennial, roughly under age 35, only about 30% of you vote. That’s compared to over 70% of those aged 65 and older.

Would you let your grandparents pick your clothes or your music choices? Of course not! But you’re letting them pick your financial future for the next 50 years or so.

You see, anyone over maybe 50 or so isn’t going to be around to pay back all the debt we’re running up. Ironically, that’ll be up to you – and 70% of you don’t seem to care. We are paying about 80 bucks for a $100 government. They’re not collecting enough to pay for what they’re spending. If you’re just paying 80% of your bills every month, the day of everything crashing down on you comes pretty quickly. With governments – not so much. It’ll be a long time before we hit the wall as a country. When we do – it’s your age group that’ll be massively impacted, and not the 50 plus age group.

Should the government live and spend within it’s means? That’s up to you to decide. But if you’re a politician you’re not paying it. So it just makes sense to make promises and overspend to make their voters happy. Is that right? Is that a good idea? Should that happen? That’s up to you and your political views and real or perceived reality to decide. In the world of economics, it’s insane…but that’s your call.

If you’re under age 35 group were to vote in two city, provincial, and federal elections in the same numbers as seniors, everything would change in five or six years. Because you’re actually a larger voting block. Politicians have only one job: To get reelected. So they cater to those who vote and that ain’t you.

Two elections would turn that around. If you voice your opinion, you’d be the group they’d have to focus on. One election would be a fluke in your voter turnout. Two elections is a trend and they’d get the message.

I hope to see you on election day. It’s not likely, but I hope you take the half hour. Until then, on behalf of those of us who won’t be left holding the financial bag down the road: Thank you for not voting.

The Art of Deception (in prices)

The last thing manufacturers or retailers want to do is to raise their prices. Most of us would notice – especially if it’s frequently purchased products.

But there’s another way to get you to pay huge price increases, and it’s likely you’ll never really notice: It’s shrinking the size and weight of products: The art of deception.

I was at the Dollar store last week looking to buy more 12 packs of felt markers. The price is still $2 (ironic for a Dollar store that doesn’t have much for a buck anymore…) The product still exists and still has the same SKU number, but it’s now a 10 pack. That’s a 17 percent price increase without increasing the price.

In the last two years that’s been the same for vitamins, chocolate bars, crackers, cereal, chips, cookies, coffee (multiple times with a lot of shrinkage in weight) peanut butter, mayonnaise, apple sauce, and a ton of other products. Lots of times, they’ll change the packaging, or take the same glass containers and just trim them a bit in width and length where you likely didn’t even notice it. Look at almost any toilet paper rolls now. You can clearly see they don’t fill the holder like they used to. For toilet paper, it’s an average of 23% less product just in the last two years.

Keep an eye on the weight and cost per ounce or gram. It’s the only way to see the BIG price increases they’re sneaking by you!

The Cost Of Loyalty Programs (Part II)

I wanted to finish up our look at loyalty programs from two weeks ago.

All the details on a flight to Victoria are posted here – just scroll back to the last story in full. It’s a flight I’m on today, so it’s all broken down. If you’re hooked on the loyalty program of one of the airlines, you need to pay attention: On this $200 flight example, you have to pay EXTRA to get loyalty points. With Air Canada it’s an extra $23 to get half your miles or $44 more for 100%. With Westjet, pay $160 for the flight or $23 more for their Westjet dollars.

But look at their program: Westjet gives you 0.5% of your qualified spending in reward bucks. That’s one half of one percent! You’re paying $23 extra to get less than $1 in rewards. Yes, spend $23 to earn a buck! Tell me how that gets you ahead?

The other great example is from 7-11 and their new reward program. They’ve been doing a lot of TV ads, especially on CFL games. One of the ads is an offer to get a free small bottle of Coke for 1500 reward points.

OK, stop. I went to the store to check it out: The small Coke is 99 cents at 7-11, and pretty much every other retailer. So one dollar divided by 1500 reward points is 0.0007 cents. 7-11 rewards you shopping at less than ideal prices with seven one hundredth of a dollar. That’s to redeem your points. Flip it around to see what you earn: If it’s 2 AM and they’re close and open – buy what you need at 7-11. They’re convenient, good service, and open. But make sure what you’re buying isn’t costing you more than somewhere else because that seven one hundredth of a dollar isn’t making up for overpaying in the retail price!

Petro Points are $0.001 and Airmiles average $0.121. At most you’ll earn 1.5%. That’s the Westjet MasterCard, Aeroplan card, Costco MasterCard and others. It can also be as low as seven one hundredth of a dollar. Breaking news: I have NEVER had a millionaire tell me that their success was because of loyalty points!

Need I say more?

50 Years of ATM and My NFL Financial Hero

Happy 50th birthday to the ATM machine! It was September 2nd, 1969 that Chemical Bank opened the first ATM in New York city. It wasn’t very sophisticated, but just spit out a few 20 dollar bills – but it started the automation wave in the banking world. Today, it’s optical scanners that read the bills you’re depositing and the information off cheques. Tomorrow, being tested today, is face recognition and fingerprints to make it much safer than your four digit PIN. Can’t wait to see what the next wave will be after that!

If you’ve got your favourite NFL players list for the start of this season, you may want to add someone. It’s Alfred Morris, a running back for the Dallas Cowboys. Since Rob Grankowski retired never having spent a dime of his $54 million salary, Morris is my new NFL hero when it comes to saving money. A rare example in football! Morris still drives his 1991 Mazda that he calls “Bentley” and bought from his grandmother before he ever made it into the NHL. Yes, a 1991 – and he’s made $7.5 million so far. Love that as a role model!

Your Loyalty Is Costing You BIG Money

Below are the screen shots of a flight from Victoria to Edmonton. I picked it because I was booking it – and that’s what got me thinking how much WE have to pay for loyalty…

The Air Canada basic fare is $202. No seat, no checked bag, no frequent flyer miles. Pay $23 more and you get HALF of the frequent flyer miles. Or pay $44 more for 100% of the miles, a seat selection, and a checked bag.

Westjet’s basic fare is $160. So right there it’s $42 cheaper than Air Canada if you were a free agent and just shopped by price and not loyalty. But after that, Westjet is the same as Air Canada: Basic fare is zero reward dollars in their program for tier levels and perks. Pay $23 more and you get only the reward dollars. Pay $90 more for those rewards and a seat selection and checked bag.

One charges you $23 to get your points, the other charges $44. You’ll need $3,000 total (before taxes and fees) to be a somebody in their loyalty programs, and always need to pay way higher than basic fares to earn any! That’s about 12 flights which would cost you almost $300 to $500 in order to BUY your loyalty points. AND you could never fly the other airline.

As a free agent, I took the $42 cheaper flight, skipped the $23 to get my reward dollars, let the computer pick the seat instead of spending $20 or so, and my credit card waved the $30 checked bag fee. That saved me $115. THAT is a lot of money – but not something I would have done last year when I was tied to Air Canada! Even if you make the “silver” Westjet level – have a look what that gets you: 6 free lounge visits, priority boarding (the flight leaves when everyone is on – not just your zone 2, though, and two free checked bag that your Westjet credit card can get you anyway. Yes, you do get to use the reward dollars towards future travel. (Air Canada is pretty much the same rewards but with two lounge visits.) That ain’t much for about $4,500 of spending ($3,000 plus all the taxes and fees for each flight).

For 99% of us, take the cheapest flight at the cheapest price. Pay the rip-off luggage fee if you don’t have their credit card to get a free bag. And for flights under 2 or 3 hours – forget paying for a seat. I’ve done studies that show row 5 arrives at the same time as row 26. The seat pitch is awful and there’s no leg room. Step up to buying a seat only if it’s a long flight.

Hurray! I’m Now A Free Agent! (Saving $1,500)

On average, we’re in eight different loyalty programs and some of them are costing us way more than the tiny benefits we (may) get.

For years, I’ve been a medium sized somebody with Air Canada (50K Elite) where I had lounge access, two free checked bags, priority boarding and no lineups at check in. This year I’m a small somebody and lost priority boarding and lounge access. Yet, somehow I adjusted. Sure I miss the lounge, but most connections are less than two hours, and I’m just fine.

In the next month I have about 10 flights to book. I wrote down roughly what that would add up to: Around $2,200. But I can’t stay a “somebody” unless I reach $3,000 (with Air Canada and Westjet – they’re both the same) and that’s on base fares excluding all the fees and taxes. So I’d have to book more expensive tickets by over $1,500 just to stay a somebody AND would HAVE to fly only Air Canada or Westjet, or I’d dilute my earnings and not make it in either one. That applies to most loyalty programs: To get the bigger rewards you can’t be a free agent and shop elsewhere.

That seems and is stupid. (That’s why vast numbers of business travels purposely wait until the last minute to book when prices have gone way up. It maximizes their bonus levels and it’s their company that pays the ticket and the price for that.) But when we try to do that, we don’t shop around, we stay blindly loyal because we want that reward level!

Instead, I checked Westjet on a flight to Victoria this month. Their flight gets in at 9pm vs. the Air Canada at 11:30pm. That’s almost three hours of extra sleep. I also checked the last Victoria to Edmonton flight the next day: Same price on both airlines, but Westjet can get me home at 10 pm vs. 1 am for Air Canada. On the other hand, the only lunchtime flight to Grande Prairie in two weeks (August 29th) is $140 on Air Canada vs. $284 on Westjet. So of course, I booked Air Canada for that one. Ahhhh….the joy of being a free agent and looking out for my wallet instead of others!

The same applies when we see the “bonus Airmiles” offers. We’re chasing the points, but in my experience, for the 10 most common things I buy (heads up that I’m a bachelor, so it includes cookies, Bolthouse juice, Tasters Choice, etc.) Safeway/Sobey is at least 30% more expensive than Presidents Choice or Walmart. So we get three or four bucks in Airmiles while possibly spending $20 more on what we’re buying!

We, and that includes me, can be so brainwashed or blindly loyal we’re constantly tripping over a loonie to pick up a dime! Your point earnings with every program are between one and 1.5 percent. That’s it! So make sure you don’t overspend by more than 1.5% at the register or you’re losing money!

Stay loyal to friends and family – just don’t extend that same loyalty to companies who brainwash you, and aren’t ever going to be loyal back to you!

Not Sure I Want to Swoop (Airline)

This morning I was looking for a cheap way to get to Phoenix September 10th. I don’t care if I fly to LA, Vegas or direct since they’re all within five hours drive. Whatever is the cheapest flight AND where I can get a cheap car rental. That’s normally a trick because Vegas may be a cheap flight but generally way higher car rental rates…and then it doesn’t make sense.

So I looked at Canada’s newish deep discount carrier Swoop. Their Edmonton Vegas direct flight is $92. But they will charge you for EVERYTHING. That’s the business model of deep discounters. If you can go with just what fits in your purse or a small duffel bag that fits under your seat – you’re good to go. If you need to “rent” space in the overhead, that’ll cost you. I do have a regulation size carry-on suitcase. But check the Swoop details really carefully! My “every airline is fine with it” carry-on bag is two inches too long at Swoop.

Finding that out at check-in will cost me $45 checked bag. (vs $35 at time of booking). Since I also need to bring my golf clubs, that’s another checked baggage fee. The price at Air Canada was $245 and Westjet for the same day (checked at the same time) was $267. Those are both way overpriced and may or should drop. But the point is to be really careful that you don’t end up paying more in total!

One more thing that may or may not be a consideration for you: I’ve had three buddies stranded when they had plane trouble. The last one was in Kelowna trying to get back to Edmonton. With (her perception) of really bad communication, the flight was going to be 4pm…then later that night…and ended up at 4 pm the next day. That was 2 cab trips to the airport and an extra hotel night and missing a day of work. NOT a way to save money.

Sure, I might fly them out of my home city. If there’s an issue I can go back home. But not sure I’d risk the return flight with any airline that doesn’t have more than one flight a day to be able to transfer me to another flight. Buyer beware!

Tip Your Flight Attendant & Don’t Advertise Your Credit

Next time you fly, don’t forget to tip your flight attendants!

Whatever you think should be the priorities of your flight attendants, you may be wrong: Yes, you read that right – it’s here: Frontier Airlines wants you to tip flight attendants when they sell you drinks, juice, duty-free, or what airline pretend is a meal. The credit or debit card machine is programmed for you to enter a tip, and even has the suggestion that you should tip 15 or 20 or 25 percent. It works exactly like the machines in a restaurant, just at 30,000 feet.

Their media relations department spins it to say that millions of dollars in tips have already been generated which they claim proves their passengers love the idea. (In an interview with Clark Howard).

Behind the scenes, and the real reason for it, is that the low cost airlines want to reduce costs. You pay tips which lets them negotiate lower wages… Flight attendants lose in eventual lower base wages and you lose by paying baggage fees, carry-on fees, seat selection fees and now tipping your flight attendant. And yes, it’ll start coming to other airlines. Count me as one of the people who will NEVER be doing that…Good idea or horrific?

Don’t advertise your credit problems:

Here’s a heads up for two people I passed on the highway yesterday and many others: Subprime car financing is for people with bad credit. Most of those lenders do it through car dealers, but two of them lend direct by also selling you their retail-priced vehicle, and make money on both ends. After all, people with poor credit aren’t in a  position to negotiate the price or the rates.

The rates are around 15 to 19 percent and upwards of $1,000 in fees. If the person stops and does the math, it will literally be cheaper to take a cab or Uber daily for a year or two until their credit rating is healed. Instead of a rate 500% too high, spend the $20 on the Money Tools book from Mosaic!

But the heads up is actually to make sure the subprime dealer does not put their decal on the back! It’s great to have a student drive sign, but these dealer decals tell the whole world you have REALLY bad credit. That might be something you don’t want to advertise everywhere you go.