Random Thoughts

How much would parents be willing to pay adult (over 18) children to move out of their house? According to the CIBC it is $24000 , which is a nice round number. I have written about Kippers and children living with their parents, so this data is of interest to me. The CIBC Gifting Poll, suggests there really is a magic number that parents are willing to shell out to get kids to move out. The poll mentions how “… gifts shouldn’t come with strings attached…” but I have no problem, calling a bribe, a bribe.

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Another interesting point is the flood of inheritance money that will be unleashed as the baby boomers pass on their amassed fortunes ($750 Billion over the next decade?). I don’t know many folks that speak openly of inheritance money they expect, but if you know for sure you are receiving it, shouldn’t this be part of your financial plans? It sounds quite crass, but if the money will be arriving some time, why not add it to your plan?

I was disgusted to read that Sears employees are not getting their severance payments, yet, executives are having their bonuses paid. This cuts too close to the bone for a former Nortel employee. Nortel is finally paying out to their former employees (at pennies on the dollar), what the employees are owed. This kind of business bad practices that really does get under my skin.

I think the deepest thought I read in while was, “Hipsters listen to the Best Of albums, but real fans listen to the complete original LPs”. It is deep because there are so many parts of that phrase that my children wouldn’t understand. What is a Best Of album? What is an LP?

Next thing know that this was a major advancement in engineering and finance.

I Wrote This Week?

Yes, I did write this week. I have been working a very loose schedule for the past while, I am hoping to step up the pace a bit more soon, but this week I wrote Low Inflation Means No More Interest Hikes ? Will the continued low inflation keep the interest rates low? I don’t think so. The Bank of Canada has been fairly clear that there is too much stimulation in the economy with low interest rates. I am assuming there will be at least another 1/2 point raise of rates if not more, but low inflation may slow other rate increases?

Micro Blogging

I am experimenting with tweets and Facebook posts that are not full stories, but get a point across about the economy, witness this GIC commentary. I would bet there might be a few millenials that might have asked, what is a GIC?

With interest rates rising, will GIC Ladders become a new (old) topic of conversation again? Not likely yet, but maybe soon? pic.twitter.com/nzful4Nyrw

— Big Cajun Man (aw) (@bigcajunman) July 27, 2017

Read More »Paying Children to Move out, Sears, and #MoneyTalk

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