Best of

A week after the tumultuous news of the Bank of Canada raising their nightly rate by ¼% Canadians are still recovering from rate reactions shock. As I have said, if that rate increase caused you consternation, “… you ain’t seen nuthin’ yet…”. While rates will not sky-rocket they will slowly increase back to normal levels (whatever normal means these days).

With the rates moving upward I wonder if it will become “cool” again to make overpayments on mortgages (again)? I found it interesting with rates so low, making “double up” payments or such would get the loan principal down, but it became very passe to do that. You could make so much more investing the money, was the argument. Funny, that argument is always around (no matter what the rates are at).

The new “thing” to talk about is the impending Stock Market correction. Many financial talking-heads are espousing that the markets are far too high, and there will be a correction soon. This is possible, but as I have said, “Economists have predicted 7 out of the last 3 market corrections“, so take it with however much salt you wish.

Game of Thrones starts the first½ of their final season? Winter is here, both in Westeros and financially in the real world.

Interesting that not too many of the talking heads are saying much about the fact that bonds should drop in value with interest rates rising? Doesn’t sound right does it, but my Bond Funds have dropped in value over the past few weeks.

Most disgusting thing I have heard about at work? Someone boiling the silicon buds from their headphones (to clean them) in the communal group electric kettle. I know longer drink tea at work.

Cyclists Take Heed

I know many of my readers and friends are avid cyclists, so please take heed of this video of the importance of stopping for red lights and stop signs!

Read More »Rate Reactions, Mortgage Double Ups, Bad Cycling and #MoneyTalk

The Bank of Canada upped their key overnight rate by 50% this week! How will consumers possibly withstand this huge jump? Yes, that is how I interpret a lot of the talking heads reactions. If the ¼% increase of this week is impacting your life, you are in some serious trouble financially. Most of the experts are more concerned about the return to less opportunistic rates. It is time to pay off your debt, or figure out where you go from here.

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I did like one talking head that pointed out that the passed two rate drops were both ¼%, however the banks both time only lowered rates by 0.15%, yet most banks have already jumped their “prime” rate by at least ¼% in reaction. Some banks had already raised their rates, and this is why I own shares in banks (horrible to customers, but good investment). Someone else pointed out that the interest rate on Savings Accounts doesn’t appear to be rising, at some banks.

Remember that other lenders may jump on board as well and raise their rates. Can your car loan or lease go up? You might want to check the fine print, but your HELOC and unsecured lines of credit are going up.

Is this the cold shower the economy needs to cool things down? No, not yet, if rates return to around 4% then we will see housing markets going into the crapper, but that could be where we are headed. The economy has been stimulated for a long time, time to calm down.

Keep calm and pay off your debts, as I have said so many times before.

What if this is actually similar to the 70’s, wonder what today’s 20 year olds would do if their mortgages were 15% annually, and inflation was running at 10% or higher? Yes, I am just stirring the pot, but still an interesting question.

Is Money too Tight to Mention ? Not yet, but it might head there soon. Still one of my favourite tunes from Simply Red.

Allow me to give an alternate perspective on raising interest rates. Increased interest rates will finally teach a generation about the importance of paying down debt. How does anyone know about the power of compound interest, when rates stay at 2% (a doubling period of 36 years)?

The other interesting topic that I haven’t heard discussed is what does this mean to the biggest debtors, the governments? How will all level of Governments “balance” their budgets with higher interest rates? Higher taxes, is my guess, but I am not an economist.

Writings Past Little While

Haven’t been really writing much, but I have been rewriting and updating a great deal of my back catalogue (well worth checking out). Check out my Twitter feed if you wish to see some of the best of, but I did write about Unlocking Your Phone, What Comes Next? Waiting until December 1^st is the first thing, unless you go to the Apple store and buy your phone Unlocked.

I am still astounded that Bell (another terrible to customers, but good investment) hasn’t simple foregone their profits on unlocking, but that is why I am not in marketing.

Read More »Keep Calm and Pay Off Your Debt and #MoneyTalk

Guess what is back for a short time? The Dutchie! My old friend is back at Tim Horton’s to help celebrate #Canada150. For the true connoisseur of the dutchie, it is still available in the Atlantic provinces, it is just back in Ontario, for my enjoyment.

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I spent a lovely day a few weeks ago at my youngest daughter’s graduation from the Queens Faculty of Education. She already had a Science Degree from Trent, so this means my investments have now paid out 4 degrees, not bad pay out. There is another degree I have a small stake in, so I am hoping that pays out next year. For those parents unsure if they should put money in an RESP, yes this is a very good investment (and not just for the free money from the government).

One of the areas in Queens we visited had information on the “new” OSAP. If kids have parents that make less than $50,000 their tuition is “free”. The wording there is unclear to me. The Ontario budget stated, “Students from families with incomes under $50,000 will have no provincial student debt.“.  This is also misleading (in my opinion).

There will be higher non-repayable grants for lower-income students, which is good. Having graduates saddled with massive debts is a very American thing, let us remove it from the Canadian lexicon. Will this help lower-income families get their kids into University? My opinion is not likely that much. The funding is still too low, the tuition (and associated fees) continue to sky-rocket and the costs of living away from home at school can be very high (especially in large urban areas like Toronto).

The other part of the equation, is what will the Federal Government part of the Canada Student Loans program do?

Summer is now here, and the days are getting shorter (if you are in the Northern Hemisphere). Remember how you hated the winter months? These are the months you were waiting for.

Things I wrote

Given I haven’t put out a random thoughts post for a while, you’d think I’d have lots of things that I must have written, but I haven’t really. I did write Banking is Necessary, Banks are not , which pokes fun at the FinTech phenomenon that many folks are hyping.

Is there such a thing as Bad Budgeting ? Yes, if all you do is adjust your budget to balance your inflated spending, that is bad.

There are a few new features in Quicken 2017 update that are making it better than earlier versions. The Android and iOS clients are making things better, but there are still some odd crashes (and importing data is still kind of weird at times).

Fun Tweets

While my RDSP page is quite good, there are many people who have helped me and one of them is Milburn Drysdale. He has updated his website, and here is a great tweet to send to anyone looking to learn more about the Disability Tax Credit.

Milburn’s Excellent Guide to Back Dating Disability Credits https://t.co/9C2IanLva6

— Big Cajun Man (aw) (@bigcajunman) June 22, 2017

However, Michael James wins with the best retirement financial tweet of the week

Retirement logic:
(minimum salary I'd work for) > (maximum anyone would pay me)
=> it's time to retire

— Michael James (@MJonMoney) June 22, 2017

Read More »Donuts, Graduations, Summertime and #MoneyTalk #Canada150

Three of the big banks in Canada announced good profits ( TD, CIBC, and RBC) which has caused another jump in their value, and dividend output. Michael James thinks that the Canadian Banking system is in for a day of reckoning (i.e. their profitability will drop), but  evidently not today.

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Canadian sportscasters have been lampooning Ottawa Sens fans for not selling out every playoff game. The Sens do, however, have the highest average attendance in the playoffs of the remaining teams. Financial talking heads are annoying, sports talking heads are wastes of space.

When is the best time to buy a house? The answer is simple – when you need it, period. Don’t let the real estate industry convince you otherwise. I have always purchased a house when I required it, and that’s how it should be. Renting may be an option, but if you need more living space and have enough savings for a down payment or rent, then go for it. Don’t be a follower of the herd mentality that urges you to buy a house just because everyone else is doing it. Make a logical decision based on your needs and financial situation, and don’t let anyone persuade you otherwise.

This weekend, the Indy 500 and the Grand Prix of Monaco. You can guess what I will be doing on Sunday, and no, I won’t be going to Church (this week). There is also the Coke 600 if you have a few hours spare.

The Bank of Canada announced no change in their interest rates, keeping that loose money policy in place. Their reasons are getting repetitive, but worth checking out.

The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions. Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets. Meanwhile, export growth remains subdued, as anticipated in the April MPR, in the face of ongoing competitiveness challenges. The Bank’s monitoring of the economic data suggests that very strong growth in the first quarter will be followed by some moderation in the second quarter.

They seem to imply that housing prices will start going up everywhere.

Ramadan begins on Saturday, so Happy Ramadan to my Muslim readers and friends.

Things I wrote this week

I did write something new this week, by cribbing Kerry’s presentation on RDSP‘s on the CBC. Being one of her researchers for her piece, I felt I had the right to use the intellectual property. The piece is called 5 Steps to an RDSP, which is a short synopsis  of  the  steps needed to  set up a Registered  Disability Savings Plan.

On the sister technology site, I wrote a short piece attempting to explain, What is Ransomware? Quite topical as Mrs. C8j was the victim this week of a FedEx phishing scam. Her boss received the infamous, “You have a package with FedEx” e-mail with a “hinky” link. Unfortunately she clicked the  link, but  luckily her anti­ virus software caught things before they got out of hand. Never trust links in an e­ mail from anyone, even on a trusted  web site, by the  way click here.

COBOL rules

For all of you lovers of FinTech, this tweet (from me) does sum it up quite nicely.

Before you get too jacked about #FinTech you need to figure out what its foundations are https://t.co/D4E82qUbgA pic.twitter.com/BokiPQTkPZ

— Big Cajun Man (aw) (@bigcajunman) May 20, 2017

Read More »Bank Profits, Loose Money, Used House Salesfolk and #MoneyTalk