Category Archives: Blog

The Personal Insurance: Online Quote vs Reality

Since I always do what I teach on the radio and in my books, this year I needed to get my car insurance re-quoted. For a decade, Belair (formerly Canadian Direct Insurance) has pretty much been the least expensive – but that appears to be over. Enjoy their ads on the CFL games and leave it at that…

Most insurance companies will now let you get a basic quote online. One of them is The Personal. You’ll get what they term “your insurance premium estimate” with a long legal waiver that states that the quote is based on your information supplied, and is an estimate and not a guarantee. Fair enough. It goes on to state that your rate quote can change based on “additional information.” That would include your credit score and pulling your drivers abstract and anything you didn’t complete online.

OK. But what if your online information is entire accurate, your drivers abstract is totally clean, your credit score is fine, and you want exactly the coverages you filled out? Shouldn’t your quote be the same as the final calculations? You bet! But with The Personal, it wasn’t even close! I have no idea if it’s just a come-on, totally misleading, or just a rip-off.

Here is the online quote for $614 a month. After a 30-minute call to their Calgary office, it turns out the actual rate would be $759, or over 23% higher! (Excluding my change to $2 million liability for $90 and their so-called “accident rate waiver” of $55 for a total of $904.)

Needless to say, I was stunned. When I asked the agent what DIFFERENT information she had entered that I had NOT done, she confirmed that nothing was different. When I asked how the premium increased by 23%, she couldn’t answer it. She did indicate she would “ask one of our technicians” and get back to me. To her credit, she did leave me a message the following day: The online quote uses ‘an average group discount’ to calculate your premiums and it does have a waiver on the site.

Well, not true: When you first start entering information (on many sites) you’re asked if you’re part of any group or association. Some are just to make you feel better, some larger ones such as being a Federal or City employee or working for a large company, can get you some worthwhile discounts. But I had checked the box that I am not part of any. So to tell me that their online site uses ‘an average group discount’ is just a big fat lie. It states right on the email quote that it “DOESN’T include savings you may be eligible for through your employer, professional asocial, etc.”

Does a website waiver just give an insurance company full permission to mislead someone doing an online quote? Is it just a total waste of time to get an online quote? Is this even legal? The Personal chose not to reply to my emails, but I’m awaiting to hear back from the Alberta Regulators…stay tuned…

What Are the Odds You’ll Win At These Financial Issues?

Let’s set some odds of whether these things are likely to happen:

-The Canucks winning the Stanley Cup next year?

-Your son, daughter or grandkid getting a good deal on buying a vehicle? The typical sales person sells three or four vehicles a week. Your son, daughter or grandkid buys three or four in a lifetime.

OK, how about getting a good deal in the dealership finance office? There are usually two business managers, so they see 3 or 4 customers a DAY. They’re former sales people who are 100% on commission and your 18-30 year old has no idea of what they need to avoid, or ask, or even understands a lot of what they’re being told or are signing.

-What are the odds they’ll get a better than most people deal with anything at their bank? I bet the odds are tiny. If you don’t believe me, just google all the bank investigate reports of rip-off under: CBC Go Public. You’d be amazed how easily they can sell them an overdraft they’re stuck in for a decade or more, a service charge package that’s overpriced, or a line of credit they’ll have for an average of 16 years.

A new JD Power survey found that eight out of 10 people want financial advice from their bank. That’s way too many and from the totally wrong source! The staff of financial institutions are on commission or bonus pay! They are sales staff – period. That is not the people from whom you should want – or should get – financial advice if you want it to be of benefit to you versus them! Big commissions, big fees, annual fees, low returns, selling you an overdraft, or another credit card, aren’t likely what those eight out of 10 people are looking for, especially your 18-30 year old.

-Credit cards: Millennials tend to use their debit card more than a credit card, and that’s a great thing. But what are the odds they’ll shop around for the right credit card versus just being sold the one from their bank?

Credit card marketing staff consists of some of the best marketing minds in the country…your graduate has never had a credit card in his or her life… Having one is so convenient and always lets them buy today and pay…well – whenever…until they reach their limit and then their statement will show that little line hidden on there: At minimum payments, it will take 27 years to pay off your balance.

Victory doesn’t happen in the game – it happens in practice. The same way, financial wins aren’t in retirement – they’re in your today actions.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Saving vs. Spending & Getting Financial Advice

Who do you want your kids or grandkids to get financial information from?

Breaking news: Your kids or grandkids will not listen to you – sorry. It’s wrong, it’s sad, but it’s true – and you already know that. So it’ll be from an advertisement or something they find online. Both of those are from companies who have a vested interest in selling your kids or grandkids. If that sounds true, go to Mosaic or Amazon and get them a copy of the Money Tools book. Mosaic has a bunch of signed copies and at least you have some assurance the content isn’t selling anyone anything! You’re also welcome to go to my website (yourmoneybook.com) and click on the radio stories to send them the link to our grad stories, or print something out for them.

Let me give you an example: Mike Riley is the former quarterback of the Edmonton Eskimos – he’s now with the BC Lions, but still well respected in Edmonton. So a local investment firm has signed him to promote their investment seminars. In their radio ad Mike Riley says he’ll be “sharing my secret financial strategies…” WHAT? He may be a great football player, but who on earth would listen to him on investments? Would your dentist then fix your car or your hairdresser renovate your house? Besides, there is no such thing as a ‘secret investment strategy’ – honestly.

Investing, or saving versus spending, is an even harder concept for 20 somethings to believe. For most anyone under age 30 is rather like our view on climate change. There’s a need, we understand that, but there isn’t the urgency, and we certainly aren’t moved enough to pay much of a price for doing anything.

Why? Because the payoff seems too far down the road. Ask anyone in their 50s or 60s how important retirement savings are. You’ll get a far different answer than from someone in their 20s facing the decision of the Vancouver concert versus putting the money away into investments. For both climate change, not growing your savings, or a host of other issues, there isn’t enough of a motivation to do much this week, this month, or this year.

Intellectually, every 20 something can be taught that 100 bucks saved today turns into more than $10,000 in retirement. But the opportunity cost (fancy economics term of losing the potential) isn’t painful enough today. Oh, it sure will be down the road, but it’s not a choice 90% of us make or made in our 20s. The big problem is that a 20 year old needs to save for 47 years and 12 months a year. That’s 1,128 paydays where they’ll be tested on spending vs. savings and I guarantee that 90% of them will fail that test month after month and for years!

If nothing else, make anyone in your family that’s between 16 and 25 read the two page chapter in the Money Tools book on page 167 on how to become a teenage millionaire. Yes, it really is two pages. Understanding how car loans, credit cards, student loans, etc. work is a bonus – but those two pages can change their entire life if they just knew what to do – and how to do it.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Buying Corporate Return Tax Software?

If you have a reasonably simple company return to do, you’ll need to file a T2 return. If you have a reasonable understanding of assets, liabilities, and your income statement, there isn’t a reason you can’t do it yourself in about an hour or two. If so, it’ll save you around $500 over an accountant doing your return – but only if you’re comfortable with it.

Two companies sell T2 tax software. You’ll need to buy the “business incorporated” program. The two are from UFile or Intuit (Quicken). They both do the same thing – obviously – but are VERY different prices.

UFileT2 is $147 with a $25 coupon (below). Intuit Turbotax Business is $250. I have no idea why it’s double the price for something that does the same thing. Their media relations spokesperson Bryan Tritt promises to get back to me with an answer to that question. I’ve been waiting over 90 days to hear back as of today…Guess no answer is still an answer…

If you’re not sure you have the basic knowledge to do it, the UFile program is on-line for free. You only pay once you’re ready to press the “submit to CRA” button. So give it a go…and both programs have warnings if something is missing or incorrect in your numbers…

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Three Must-Do Tips for Any Grad

Ah, it’s grad season for two groups: those graduating from high school and heading into the work world or university, as well as those just now graduating from university.

When I ask any adult when they were last debt free, the answer is almost always that they haven’t been debt free since they were your age. When they were 18 or 19 – and they’ve been in debt since then. Sad but true – that will be you.

Getting wealthy comes much easier if you learn to say “I can’t afford it,” and spend less than you earn. When you were still in high school, you probably had a summer job or other income. You worked hard, had a goal of what you wanted to do with that money, saved like a dog, and paid cash for stuff. Plus, because you had so little money, you were careful how you spent it, right?

But now you have a paycheque, and access to borrowed money, which includes student loans and a credit card. So you’ve forgotten how to get rich already and you’re just getting going. Let me remind you again and maybe, just maybe, you’ll do these things to actually get rich, instead of just making that your 40-year dream:

Pay cash for stuff

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

Save and invest ten percent of your money

Maybe someone in your family will print this out for you. Maybe someone cares enough to go over to Mosaic and get you the Money Tools book. Maybe I’ll see you at the top, or maybe I’ll get an e mail from you in five years or so to help you with some of your financial mess.

If you’re graduating from high school, it’s a valuable investment to establish credit. Read the chapter on how to do that and the credit card chapter to understand the rate, perks and limit traps that you’ll be dodging a lifetime.

Plus, leave your credit card at home – don’t pack it in your wallet. The first time you charge a consumable such as gas or food on your credit card and do not pay it in full when the statement arrives you’re in financial trouble – you just won’t realize it or admit to for a long time to come. From there, it’ll just get worse. Miss paying off your balance and it’s twice as hard the following month when the balance has likely doubled. Then, the credit card companies have won, and have you hooked for the next few decades.

If you’re just graduating from university, I bet you’re sick of living like a poor student and ready for some major pent-up spending. The biggest financial damage is done in the first year following graduation. Get the job, get the paycheque, but if you can delay gratification and live like a poor student for one more year, you’ll have an incredible amount of money saved in that year. Once you turn on the spending tap you aren’t going to be able to turn it off again – so just delay it one year.

The question to always ask yourself is: What financial thing can you do today that your future self will be incredibly grateful for?

George Boelcke – Money Tools & Rules book – yourmoneybook.com

How and When to Buy Your First Home

Graduation comes in different stages. It might be high school, university, entering the work world, or for any age – the graduation to acting your wage.

Today we’ll talk about buying your first home and every single one of the four sections in here are chapters in the Money Tools book. It’s THE best $20 gift for yourself or anyone graduating to any stage in life. Mosaic has a bunch of signed copies now, or just go to yourmoneybook.com – it’s a tiny investment in yourself or paying it forward to help someone else avoid what many of us wish we had known.

There’s an old Rod Stewart song with the title: I wish that I knew what I know now – when I was younger. Oh boy, I wish I could make that happen. I bought my first house in the early ‘80s when rates were insane. To hang onto it, I had two years of using my Visa cash advance in order to pay my MasterCard. Owning a home is so worth it, because it builds equity in two ways: By the principal you pay on your mortgage and a historical five percent return each year.

But I wish I had held off for a few years in order to build up my savings. The younger you start saving, the bigger the amount when you retire.

Don’t listen to developers who advertise that buying a place is cheaper than renting. It’s totally false. You are now responsible for property taxes and at least a couple of hundred bucks a month for everything from paint to plumbing problems and repairs.

One of the biggest blessing you can get is from your parents or grandparents lending or gifting you the money for a down payment. Do NOT make it on a condo, but a duplex or single family home. Condos are the first to plummet in value if there’s a correction, and the last to regain their value. You’re also competing with everyone else in the condo complex who may want to sell. There’s a condo complex on the popular Whyte Avenue in Edmonton that currently has 13 units for sale. (I’ve posted the picture). If you’re selling, you need to always lower your price to be the bottom two or it’ll be years before it’ll sell.

If you as a parent or grandparent lend someone in your family the money for a down-payment you can do it in three common ways: Just as a gift, or have a lawyer put a lien against the property to assure you’ll be paid back, or have the amount of that gift or loan noted on your will to be paid back out of your estate to the beneficiary.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

A Cell Phone Rip-Off Warning

Starting next month, if you’re a FIDO cell phone customer, you will get charged a so-called mandatory fee to call them. You’ll get charged to call them if you need anything done on your cell plan that you can or should do online. That includes making a payment, changing your payment type or credit card, password reset, updating information and the likes.

FIDO is the 2nd tier carrier of Rodgers, so you can bet they’re starting it, too. And if Rodgers is implementing this rip-off fee, Telus and Bell have, or will match it. Their average call time is around three minutes. So even if one agent only handles 12 calls an hours at $10 per call, that’s $120 profit less their $15 hourly pay. They’ll make more money on this rip-off than they do on your cell bill!

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Another CRA Scam

Another tax season, another Canada Revenue Agency refund scam. I received both a text and an email that the CRA has a refund of $1183 and just “click here.” I’ve posted a picture of it.

I can’t believe this needs to be stated again to anyone in the country: The CRA doesn’t text or email you a refund. Even if you are not the best online it will literally take you ten seconds to type in something like “CRA text refund.” It will take you one second to press “enter” and in less than one-half of a second you will see tens of thousands of posts that it’s a scam. So with less than 15 seconds of work you’d know it’s a con. It’s why this scam goes on my list of “if you fall for this, I have zero sympathy for you.”

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Super Savers & Photo Radar Money Grab

Rob Gronkowski retired last weekend from the NFL’s New England Patriots. He’s actually in the Money Tools book, because he never spent one dollar of his six year $54 million contract – period. He lived only off his endorsement income. No, you and I didn’t make $54 million in six years, but that misses the point. He is a super saver who just has a bigger pot of money to save! That leaves one more NFLer with the same savings attitude, and that’s the Viking’s quarterback Kirk Cousins and his $84 million contract. He’s very proud to be driving a dented GMC Van that he bought from his grandmother for $5,000. Here’s some of the story from CNBC: https://www.cnbc.com/2018/10/12/rob-gronkowski-shares-the-money-advice-he-gives-his-nfl-teammates.html

Keep in mind these are just two great savings stories out of thousands of professional athletes. Setting aside the much more conservative Canadian hockey players, many more athletes blow through their contract money than save it. Need proof? In the NBA, over 80% of players are broke within five years of ending their playing career.

By the way, the general definition of super saver is if you can put away at least 25% of your income – and thus live on less than 75% of your pay!

Photo radar, as most people should know or suspect, is just a cash-cow and money grab. The NDP government in Alberta actually admitted it last month. In Alberta, photo radar generated 27 million tickets for $220 million in government revenue last year. 27 million tickets reduced collisions by an estimated 1.4% – that’s it.

Plus, I can show you four U.S. studies that red light cameras actually INCREASE accidents. Since our traffic lights work the same way as they do in the U.S. those studies are entirely valid here. Personally, if I know there’s a red light camera, I will slam on my breaks to avoid the really expensive ticket. If the person behind me can’t stop in time, that’s his or her at-fault accident – and those rear enders increase in frequency at red light camera intersections.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Our Credit Rating & Tim’s Reward Card

Aren’t we on topic! Last week we talked about the federal government’s budget and deficits as far as the eye can see. The day after, last Thursday, Fitch (one of the major credit rating agencies) announced that our government debt is “close to incompatible with a AAA credit rating.” So we’ll not only pay a lot more interest because of the debt total, but with a drop in credit rating, we’ll also pay a higher interest rate to keep borrowing. Exactly what happens with us individuals: When our credit rating drops, rates get much more expensive because we’re a higher credit risk.

Tim’s now has a rewards card. If you don’t mind lugging around the card, every 7th coffee will be free. Not a bad deal to get a 13% price discount equivalent…until they change it to every 8th, then 9th, then 10th once they’ve trained and hooked enough customers. Mark my words! Why did they start the program? My guess is that the Esso stations now run by 7-11 will be kicking out their Tim’s coffee as soon as the contract is over. That’ll plummet Tim’s sales. Since we’re really loyal to loyalty programs, no matter how crappy they are, this is Tim’s pro-actively re-training us to visit Tim’s and not 7-11 when they switch back to their own coffee at a much bigger profit margin.