Category Archives: Blog

I Was Fired. Who Knew?

Two minutes before my segment June 9th, Phil emailed me to “take the summer off” and we’d be back with the Wednesday radio segment “in the fall.” I just assumed the station hadn’t started their fall schedule yet. As I’ve had over 30 emails during the summer wondering where I was: No. I didn’t ask to take the summer off. No. I was never paid for the segment. It wasn’t a station cutback. No. I don’t think it was bad ratings – not based on the quantity of emails I was receiving…No. I had no idea why.

Today, a listener emailed me to tell me I was actually done, gone and fired: “My wife and I used to listen to you Wednesday mornings on AM 1150 in Kelowna.  We looked forward to your message and said many times that what you were saying should be mandatory teaching in all schools, no exceptions.  We lived a fairly frugal but not chintzy lifestyle knowing we had to fund our retirement years, so your messages just made so much sense to us…  When we didn’t hear your message twice at the beginning of July we phoned the radio station and asked why.  Their response was that some of their presenters were taking the summer off and would be back in the fall.  When you didn’t reappear in September we phoned again and were told you weren’t coming back.  We are most disappointed, as you were the highlight of our Wednesday morning listening.  All this to say we miss you, and wish you well.”  Sent from my iPad. Tom J

After almost 16 years, I would have hoped or guessed it would end in a more professional way…but again, that’s just my opinion.

Money Tools & Rules Wednesday Segment

January 7, 2005 to June 2, 2021

RIP

Spend $4 Instead Of $200

Last week I was at an Air Canada counter for over half an hour with a missed flight nightmare. (Thanks to Air Canada line-ups). Checking in at the counter next to me was a lady with her two middle-aged sons. Their two suitcases weighed 58 and 60 pounds. The agent told them they had five minutes before the luggage cut-off for their flight to get both down to 50 pounds or pay $100 for each in overweight charges.

When they questioned it, she was at least honest in telling them that they count on luggage fees as part of their income so there would be no exception. But she also told them the stuff they needed to take out to get to 50 pounds couldn’t go into their carry-on as it was at max size and weight. What to do? Take out about 18 pounds of “stuff” and throw it in the garbage or pay the $200?

Four bucks would have saved them the $200 with a simple travel luggage scale. Most Dollarama stores have them, or step up and pay around eight bucks at Amazon.

I’ve always had one with me when I travel. At home you can just weigh your suitcase on your bathroom scale. It’ll avoid the humiliation of opening your suitcase in the lineup at the airline counter. On the road, especially if you plan to do any shopping, you can go to the hotel gym that normally has a scale before you head to the airport. Or pack the travel scale. That tiny expense has saved me countless overweight scales, a ton of time at airports, and the massive stress I’d have going through my luggage in front of dozens of people looking over my shoulder at the ticket counter!

My (Almost) $60 Checkout Mistake

How careful are you to watch the prices of items scanned at the checkout? Unfortunately, most people don’t look. It’s pretty easy to tell what others do: Just watch what they’re doing and where their eyes are looking when they, or a cashier, are scanning their purchases.

As a result, we just look at the displayed total and pull out or debit or credit card to pay. I normally keep an eye on the scanned items, especially those sold by weight. I’ve stopped a cashier when some fruit came out at (what I thought) was an insane price to delete it. But confession time: I clearly need to be doing it all the time!

At Costco a couple of days ago, I just needed some crackers, cookies and croissants. I ran all six items through the self-serve checkout, saw the $100.84 total and paid with my debit card thinking: Yup, can’t get out of Costco for under a hundred bucks.

Five seconds and two steps later I stopped. Wait a minute. A hundred bucks for THIS? That’s when I saw the sixty buck charge for a dozen croissants. Yes, they’re really good, but not sixty bucks good!

The bakery department person doing the labels that morning simply entered too many digits to print the scan sticker. Mistakes happen, it was fixed at customer service, but hopefully the lesson will stick. According to a report from the Journal of Retailing, about 4.08% of scans are incorrect. 2.33% are priced too low while 1.75% are too high.

The Retail Council of Canada also has voluntary rules for compensating customers. Sadly, it appears Costco either isn’t part of it or wouldn’t honour it.

BIG Inflation or Temporary Blip?

That’s the question most economists are asking themselves. So is the Bank of Canada and the U.S. Federal Reserve in order to set interest rates.

Add my vote to those predicting the spike in inflation is temporary and only part of the post pandemic recovery. Pent up demand will do that – but it woudn’t or shouldn’t last. One of the measurements has already shown that. Lumber prices have collapsed to their 2020 levels or lower (but only in the U.S. so far). So have copper, crops and gold prices. If inflation where heading up, those would be among the first places to show it.

Yes, energy, food, and housing are still way up. But remember that these are essentially monopoly pricing areas. Without real competition to bring down prices, normal market forces of demand and supply don’t apply as much – or rapidly. OPEC sets oil prices, as one example. And in the housing market, a new report shows that 85% of condo sales in Canada are to investors. Food prices (already down in the U.S. as well) go up instantly here in Canada (even though our dollar is pretty strong at around 80 cents). But most cities have only two major competitors. Thus it doesn’t take much for them to pass on price increases, but they seem to “forget” to roll them back when costs go down – way down.

Another Business With Big Covid Lies

Add Netflix to the long list of businesses who have used Covid as an excuse for pretty bad behaviours, stock levels, store hours changes, etc. etc.

Netflix had a massive subscriber increase in the last quarter. Their press release CREDITED Covid for the increase in their numbers and income. Fast forward to last week and this Netflix quarter was way below analysts’ expectations. The reasoning Netflix gave? The BLAMED Covid for their lower numbers. Nice try…

Lumber Price Plummet

I live in a new subdivision where a bunch of neighbours are holding off building their fences and decks. It’s not only an expense most first-time new home buyers don’t consider, it’s also the price of lumber this year. The massive spike in prices has at least a half dozen of them thinking “next year.” But that’s all over with…but only in the U.S.

Lumber prices have collapsed, giving up all of their 2021 price spikes. But that’s only in the U.S. So, right now, you can buy lumber at 2020 (and lower) prices in the US, paying the exchange, duty and tariffs. Yet, here in Canada, there are so few retailers that they, along with the producers are taking their sweet time dropping prices. NOT nice!

We Graduate Kids Backwards

Nobody expects 18-year olds graduating high school, or anyone half way through college or university, to be experienced at something. We don’t expect a high school grad to do the rough-in plumbing in an entire new house. We don’t expect a first year university student to do a full set of final architectural drawings, a pre-med student to diagnose a patient, or a future teacher to teach a junior high school class today. Why? Common sense: Because they haven’t finished their education and aren’t trained or experienced. That’s not an issue of “fault,” but an issue of timing and experience. They’ll get there – they’ll be great at it – just not today.

However, with money, credit and financing it’s exactly the opposite. OK, you’re now 18 or older – best of luck with student loans, how to pay for an apartment, how to save, manage your credit card, and/or knowing the five things to watch for before you buy a vehicle. That’s also not a “fault” issue – it’s an experience issue, too. But we know they’ll get experience in their career after high school or two or four years of university before we set them loose, start to expect things, and judge them. That’s all AFTER they’re fully done with schooling, apprenticing, training, and/or an internship.

The first, and pretty big, money, savings, credit and finance decision come at them the opposite way. They happen before they have any experience or knowledge. In other words: Make the decisions, sign the loan, use the credit card, decide on the overdraft, and THEN you’ll get the education. By then, the education is that they’ve messed up and made a lot of wrong decisions. In that case, they’re digging out of a hole for the next decade or longer.

That’s the exact opposite of how they get hired: First comes the education, qualifications, safety training, coaching, more training, and THEN we set them loose. As a result, most of these 18 to 25 year olds never had a chance.

However, in areas where the high school curriculum provides money, investing, and finance courses, the impact is pretty significant. In the U.S., there are eight states who do that. In surveys way after graduation, it shows that these kids have more in savings and investments, are way less likely to be in debt, to use or abuse credit cards, or ever go near payday lenders. They also have lower student loan balances, and pay them off sooner. So the key is to get them informed, because knowledge is power. And that’s back to the premise of not graduating them backwards.  

The Big Decisions (And Pitfalls) After Graduation

Last week we talked about the dangers of that first credit card for someone who just graduated.

The same applies to banks getting you hooked on an overdraft or line of credit once you have some income. That overdraft will be there for at least a decade, and it’s not like you know how to shop around for the best loan deal or rate.

Car dealers also can’t wait to meet you. How many cars are you going to buy in a lifetime? Five, or six, maybe? Well, the average salesman sells that many in a week!  So who do you think knows stuff and have the upper hand? It’s like bringing a plastic knife to a gun fight – you’re gonna lose, even if you bring one of your parents or a buddy.

So you’re all set. At some point you may have student loan payments for two decades, you’ve got the credit card, an overdraft, and a car payment. Grade five math says that majority of your income is now going to pay all that every single month – forever. So someone telling you save some money is just a pipedream.

Now you’ll be thinking about how to get rich for the next 40 years. But you’ve already forgotten how easy it really is to actually GET rich, instead of just wishing it. When you were still in high school you probably had a summer job. You worked hard, had a goal of what you wanted to do with that money and saved like crazy. Plus, because you had so little money, you were careful how you spent it, right?

But that was before graduation. Now you have a paycheck and access to borrowed money, so you’ve forgotten how to get rich already, and you’re just getting started. Let me remind you again and maybe, just maybe, you’ll do these things to actually get rich, instead of that coming 40-year dream:

Pay cash for stuff

Don’t buy crap you can’t afford and don’t need

Save at least 10% of your money right off the top

In your high school class maybe one or two people will do that. The rest will just be the people hoping to get rich, looking to the government to lend them a hand, or maybe the lottery will come through for them. I don’t know which group you’re in: The going to be rich, or the just ‘wanna be rich’ group.

Maybe someone in your family will print this segment out for you. Maybe I’ll see you at the top, or maybe I’ll get an email from you in 10 years or so to help you with some of your financial mess.

You’re an 18-20 something who is about to make a lot of financial decisions which will impact you for a lifetime – literally.

Happy Grad Season: But Careful With What’s Ahead:

It’s Grad season again and this year, around 400,000 teenagers will graduate high school. According to Stats Can, there are over 2.1 million kids aged 15 to 19 and 2.5 million aged 20 to 24. But only one or two of those millions matter: Your son, daughter or grandkids.

The good news is that you can rest easy knowing their Grade 12 math taught them to solve trigonometric equations and to graph exponential functions. The bad news: They have no clue about overdrafts, the rule of 72, buying a vehicle, their first credit card, how to budget, manage money, the minefield of student loans or any other financing or investing.

If you’re between the ages of 17 to 21 or so, or have a son or daughter that age group, banks, car dealers, and especially credit card companies are salivating to meet them.

Those companies will do whatever it takes to get their business. Banks, and especially credit card companies, have THE best marketing minds in the country and want your teenager in debt to them – really soon and really deep.

We have a huge emotional attachment to our first credit card. It’s the reason they’ll do whatever it takes to be front and center in your teenager’s wallet. Once they’re first, they own you, and the memories and loyalties are way bigger than the teenager’s first boyfriend or girlfriend – and last a lot longer.

On average, we keep our first credit card for over 15 years. It doesn’t matter that the rate hasn’t been competitive for years, that the perks are junk, or the fees they add on. For this group, the default rates are below average because, in most cases, parents will step in and pay the balance, or at least make the payments.

Why do they target your age group? Because they can’t market much to your parents. Adults already have all the credit cards they need or want. So they can’t grow their business unless they get to you. It’s millions of fresh customers, and bonus: You don’t know squat about credit and the dangers of credit cards, but you do love to impulse buy.