Weekend Reading – Comparisons bring you down, tyranny of fees and more #money stuff

Weekend Reading – Comparisons bring you down, tyranny of fees and more #money stuff

Welcome to my latest Weekend Reading edition – I hope you had a good week.  Mine was hectic at work which made things short on time at home but I did manage to squeak in one post:

Here are 22 myth busters courtesy of Doug Hoyes’ new book Straight Talk on Your Money.

Should be a great weekend though…the REDBLACKS have their divisional semi-final game this weekend and I’ll be there cheering them on!

All the best for whatever your plans may entail.

#LestWeForget  On the 11th hour of the 11th day of the 11th month, please pause in memory of the thousands of men and women who sacrificed their lives in military service.

Mark

Rob Carrick believes higher interest rates will help fix our financial literacy issue.  I think he’s partly right.  I believe good decisions come down to good behaviours.  So, until something nasty happens with the housing market (for one example) to trigger a behavioural shift, people will continue to spend away on their homes largely living beyond their means.

Thanks again to Build Wealth Canada and the host Kornel Szerjber for having me on his podcast.   A reminder about our chat – we talked about my investment journey to date and I answered these following questions and many more!

  • Why did I decide to be a hybrid investor?
  • What is my process for selecting stocks?
  • When do I believe is the right time to buy stocks?
  • And more and more…

Want to save money?  Check out my offers!

Visit this Deals page where you can save hundreds or even thousands of dollars over years with better saving and investing solutions.

FIRECracker wrote about something that’s been on my mind for some time – never let comparisons bring you down.  Enjoy your own (life’s) journey and you’ll be happier for it.

Ken Kivenko wrote about the tyranny of fees.

It was nice to see Sun Life increase their dividend by 5% this week.  Not to be dismissed, Telus and Inter Pipeline increased dividends within our portfolio as well. That’s going to add some juicy dividend income to my growing portfolio!

Here is a listing of the top dividend cuts and raises for October 2017.

Loblaw’s is merging Shoppers Optimum and PC Points Loyalty programs.  Under the new program:  10,000 points valued at $10, 20,000 points at $20 and so on to a maximum single transaction redemption of $500.  Members can use their reward money at any of Loblaw’s nearly 2,500 stores and the company’s websites.

As another holiday season approaches Stephen Weyman has another huge $1,000 Christmas giveaway underway!

Have a great weekend!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

13 Responses to "Weekend Reading – Comparisons bring you down, tyranny of fees and more #money stuff"

  1. re: “Rob Carrick believes higher interest rates will help fix our financial literacy issue. I think he’s partly right. I believe good decisions come down to good behaviours. So, until something nasty happens with the housing market (for one example) to trigger a behavioural shift, people will continue to spend away on their homes largely living beyond their means.”

    I disagree. People were just as illiterate when interest rates were high as they are when interest rates are low. When rates were 18% people were illiterate (lack of access to information?) but they saved simply because interest rates were high. Currently interest rates are low and people are still illiterate (access to too much information?) but they spend because they aren’t getting any return on savings.

    When something nasty happens, of course it will trigger a behavioural shift but unless that something nasty is permanent, then neither will be the behavioural shift. I’d say the Financial Crisis of 2008 was a rather nasty something…and look at where we are…at all-time high debt-to-income levels. People have short memories and are marvellously adaptive, especially when it comes to preserving our personal homeostasis (both mental and physical). Thus, we are far more likely to continue to do whatever it is we’re already doing (and seek out ways of enablement) until we absolutely can’t continue. But even then, as we all know from trying to drop a bad habit and form a healthy habit…it mostly fails (all habits are permanently etched into the brain; they don’t die, they just remain dormant).

    Creating a new behaviour takes incredible focus, energy, and time — most people will not commit to that cause. A prohibitive environment (aka higher interest rates) will simply constrict current behaviour. People might stop spending because they no longer have the money, or it’s more valuable to save; what they aren’t going to do, as a whole, is all of a sudden decide to become financially literate (e.g. people consumed alcohol before, during, and after Prohibition). And once the ‘something nasty’ becomes less nasty, people will return to living to the highest and freest standard allowed.

    It’s akin to saying that since we now enjoy the highest ever standard of living in history everyone will choose the most healthy option. Hate to burst the bubble, but almost all humans don’t operate like that (e.g. obesity and diabetes sweeping the globe). He is correct in saying “we have the level of financial savvy we deserve”, as I’ve said, easy debt makes people stupid and lazy — who cares about learning how to make money when money is so easy to get! And when the price of money is so low, the value soon follows (i.e. it’s more valuable to have a car than cash).

    Apart from that, there is literature which reveals that a good majority of working Canadians, of all ages, are indeed saving, and saving much more than the usual 4% stat.

    re: FIRECracker — don’t compare…
    But compare is *EXACTLY* what she (and her partner) did in order to achieve heightened media popularity within Canada and gain traction for her blog — she compared her journey to that of of house owners and then very loudly proclaimed her (their) journey as being far superior (is ‘house shaming’ the new ‘fat shaming’?). Yet another PF blogger littering the information highway with endless garbage. And yes, I’m comparing her content to those who actually provide/create value.

    Reply
    1. A strong rant on behaviour – I liked it.

      Debt does make most people lazy – but that’s what our economists needed to stimulate the economy from our last financial crisis.

      Personally I’m looking forward to seeing rates inch higher. It will reward savers (finally) and put some teeth bad into debt management.

      re: FIRECracker — don’t compare…
      They certainly aren’t fans of Toronto home ownership! There is a ton of ‘house shaming’ in Canada.

      Reply
      1. re: A strong rant on behaviour…
        Is it a rant if it’s true?
        Guess I’m just oh-so tired of people promoting themselves as experts and authorities yet they produce material which meets a deadline but seems to have escaped any kind of scrutiny of thought. It’s the worst game of the internet — endless content, quantity over quality.

        re: Debt does make most people lazy – but that’s what our economists needed to stimulate the economy from our last financial crisis.
        Debt and savings perform the exact same function — finance capital investment. However, household debt, seems to be much more about consumption rather than production. Thus it has been households which have been financing capital investment (aka economic growth) via debt-fuelled consumption (creating corporate profit) rather than mostly businesses pursuing their own debt-based production. Households have assumed almost all the risk with almost none of the reward. Best play going forward would be to stem any further rise in debt ratio, unwind slowly through slower growth, and shift the bulk of capital investment source back to businesses.

        re: Personally I’m looking forward to seeing rates inch higher. It will reward savers (finally) and put some teeth bad into debt management.
        It will reward savers of cash, but it will also punish investors, esp. those who invest in interest rate sensitive assets (e.g. dividends, bonds). If rates go too high, financial literacy will be about the last thing on people’s mind.

        @Mike & Gary — flattery will get you everywhere!

        Reply
        1. It doesn’t means rants can or cannot be true…

          Difficult to say how household debt might play out. I know I don’t like it but if we move, we will be taking on more of it.

          Reply
  2. Liked Ken Kivenko article: ” The adverse impact of fees is twofold: An investor pays an ever-increasing amount in fees as account balances grow, because many fees are based on a percentage of assets. And fees also strike a blow to the portfolio’s returns. That’s because every dollar taken out to cover management /advice costs is one less dollar left to invest in the portfolio to compound and grow. So in addition to paying potentially tens of thousands of dollars in avoidable fees, research shows that an investor gives up many times that amount in lost portfolio returns over time (“opportunity costs”).

    Several economic forecasts project that market returns may be lower in the future so the impact of fees on returns and savings will be even larger .Fees are the silent killers of investment returns. amplified by decompounding over time. Don’t make the mistake of thinking even 0.5% doesn’t matter – in the long run, the impact is huge.”

    Reply
    1. “That’s because every dollar taken out to cover management /advice costs is one less dollar left to invest in the portfolio to compound and grow.”

      It’s very painful for me to think back to my 20s and early 30s when I invested this way – in pricey mutual funds. But eventually I saw the light and I’m happy how much I’ve learned – high fees and modest fees for that matter – kill portfolios over time.

      Thanks for being a fan cannew. Enjoy your weekend.

      Reply
  3. Thanks for the reading list. They seem to be marketing the merger of Optimum and PC Points well. I had a feeing something was coming when both points programs incentivized me to download the app on my iPhone a few weeks ago!

    Reply

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