Weekend Reading – Nuking the mortgage market, costly add-ons, VOIP and more

Welcome to my latest Weekend Reading edition.  Hope you’re enjoying your weekend so far…

Earlier this week I shared this update:

2016 Predictions October Update

I also provided this dividend income update – a new milestone was passed.  You’ll have to read the article to find out which one!

September 2016 Dividend Income Update

I also received a few emails like this, this week:  I have some money to invest, and I’d like to start with dividend paying stocks.  I live in Canada.  What should I do?

I’ll work on a post in the coming weeks to address that question – at least what I did.  You can make your own decisions from there.

Thanks for reading and being a fan of the site.  I have a few small projects and partnerships in the works and I hope to share the details of those with you over time.  See you next week!

For my U.S. fans, Andrew Hallam offered advice to select the best funds for your 401(k).

RateSpy said the feds are nuking the mortgage market.

Want to start investing with someone else’s money?  You can, with ModernAdvisor.  Check out the details here.

My friend Stephen Weyman reviewed MagicJack – five years later.  Stephen said all told, he’s spent about $429 for VOIP devices and services over the last 5 years.  That’s very good.  We’ve had Fongo Home Phone now for a couple of years I believe our total costs to date are about $225.  A good buddy of mine in Toronto uses VOIP.MS which is even cheaper.

Boomer and Echo shared some costly add-ons.  Fully agree, new houses definitely try and upsell you.

Money guru and all around good guy Preet has a new video out – how to split a bill in a restaurant (because some people have no clue!)

Dividend Growth Investor wonders if Apple can become a powerful dividend growth stock.  Probably, they keep tons of cash on hand, but I find technology stocks very difficult to invest in; the industry changes so fast.  I tend to avoid owning any individual tech stocks for that reason and simply rely on index investing to include my technology sector.

Big Cajun Man shared some new #MoneyTalk articles – thanks for the mention Alan.

Michael James on Money provided some interesting short takes – thanks for the mention Michael.

Here’s when the 4% rule fails.

Freedom Thirty Five Blog suggests bad debt doesn’t exist.  I disagree.  As a commenter on my site has mentioned a few times, “money is an emotionless, errorless tool.  It’s the user who embodies emotional, cloudy judgement.”  Using credit cards are not bad but prolonged credit card debt is.  Financing a car at a high cost is “bad debt”; you are borrowing money to buy a depreciating asset.  Using debt to buy appreciating assets is far better, good actually.  (Take your house as an example, although there are no guarantees.)  Not paying off your student loan for decades is bad debt, although taking on that debt in the first place was likely value-added if you got a good job.  Payday loans are bad debt – period.  Just read that aloud again – a payday loan.  Not good.

I enjoyed Cullen Roche’s article here – how indexers do better than average.  The premise of the article is that indexers come out ahead by saving on money management fees.

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.

19 Responses to "Weekend Reading – Nuking the mortgage market, costly add-ons, VOIP and more"

  1. I don’t think the mortgage changes will affect the GTA mortgage market. All the Feds are doing is making it harder for first time buyers to qualify for a mortgage, and driving those buyers to high-cost unregulated lenders for second mortgages.

    1. Thanks for your comments Samantha – certainly the new rules impact first-time home buyers. There is so much desire for homeownership in the GTA and Vancouver and a few other major cities, it will cool the market but it won’t get cold unless unemployment rises.

        1. Hey, you never know what the future holds?! We might downside into a condo ourselves eventually. Less hassle. We own REITs instead of being a landlord – less drama that way 🙂

  2. I can backup the MagicJack use – have had it for 4 yrs – $70 fr device + $72(USD) for 5 years connect + $10(USD)/yr for CDN number – so approx. total for $230 (CAD) for 4 yrs – works for me:)
    Best features – missed calls come through as emails (.wav files), inbound calls to North America worldwide (both very useful when travelling), free long distance in North America and free access to the MJ app for voip over wifi (or data).

    “Using debt to buy appreciating assets is far better, good actually. (Take your house as an example, although there are no guarantees.)”
    the folks over at Millennial Revolution would disagree 🙂 – no I definitely do NOT agree with them

  3. We’ve had Ooma, the Internet phone, for about 4 years. We bought the base for $185 and there are no monthly fees other than the 911 and taxes ($4.00 per month) which everyone pays. So over the 4 years our cost is $46/yr and going down.

  4. Glad to see you’re on the Cullen Roche bandwagon. He’s a smart guy who does his best to connect complex pieces and present them to the layman as they function in the real world.

    Mortgages: it’s interesting. There will always be a balancing act between letting the “free” market do it’s thing and the government interfering in the process. Sometimes the consequences aren’t known or felt until long after (e.g. the 2008 Financial Crisis was born in the early 1980’s). It’s also a way for the government to raise rates in an over-heated sector of the economy without raising rates across the board via a blanket rate hike. One thing I know, even if prices do plummet 25% in places like Vancouver and Toronto, the average house will still be out of reach for the average person/family. So at first blush, the move looks to be mostly one of loss — incomes/jobs real estate related, municipal tax income (from lower assessment values), all resulting in lower tax revenue for the Fed. Heck, it might even make foreign investment even easier! Only time will see. Also interesting to note that perhaps the Canadian government bowed to international pressure (OECD) to put policy in place.

    Debt: I also disagree (and I was THAT commentator — thanks!). There’s tons of “bad” debt circulating out there, both in definition and practice. Perhaps the most telling sign of this is the economic/financial/cultural/phycological focus shifting from ‘price’ to ‘payment’. This will not end well.

    1. Pretty smart guy, Cullen.

      Yes, at times, there is a need for government intervention – and I think the new rules make sense without changing the monetary policy (Bank of Canada). I hope to get rid of our mortgage in 5 more years so such changes are a non-issue to us.

      Most forms of debt are bad because you’re not in charge.

  5. On mortgages….. The trouble is it’s been overdue for years….but it’s the right thing to do. It has some negative consequences for first time buyers that are stretching and for lenders but it’s definitely not a nuke. A nuke would have stopped all real estate activity.

    Cullen Roach’s article is right on.

    Plenty of good interesting info in the 4% article. A key word of advice to me was “flexible”. My thoughts are: don’t plan for the optimum and always have room in your retirement lfestyle/budget to adjust to temporary or even longer term “setbacks”. The same should hold true for people during working years.

    Freedom35 had some correct ideas but also some strange ones. Overall I can’t give much credence to someone who “concludes they probably won’t ever be debt free.” Especially when your SN is freedom 35, which is coincidentally when I became debt free.

    1. I agree, long overdue. I think these are good changes.

      Yes, for the retirement plan, always have room for the “setbacks”. Like project management work I do, with money, you need to plan for the “what ifs”.

      Geez, debt free at 35. Impressive. I hope to be there in 5 years.

      1. Thanks.

        Good luck on your journey to being debt free. Being “in control” was a major benefit of not having debt for us. It gave me great flexibility in leaving a good career and investing in a business for myself.

        I forgot to mention my cost for magic jack 6 yrs all in after US/CDN conversion etc is ~$355.

        I couldn’t agree more with what SST has said below about the focus change from price to payment, and about ending badly.

        1. Well done with MagicJack RBull. That’s some good savings over any home phone with the major telcos. How am I going to collect my dividends if folks keep dropping their home phone? 🙂

          1. Good question and one I am also interested in!

            Cell phone, internet usage….also they’re offering sat based “land line” lower cost replacement deals for existing cell customers.

  6. Mark,

    Thank you for mentioning the AAPL analysis.

    I agree with you that technology changes very quickly. It is interesting how both our exposure to AAPL and other tech companies is through funds. It is the largest holding the S&P 500, that my 401 (k) workplace retirement plan allows me to invest in ( Andrew Hallam would be proud of me)

    Cullen Roche has done a good job in his article. It makes sense that if we both have exposure to say 100 shares of Apple, but you pay 0.05%/year while I pay 1%/year, you will likely do better over time 😉 Plus, if I try to daytrade Apple and rack up $10 in daily stock commissions, I may fall even further behind.

    1. Yes, Andrew Hallam would be proud of you holding an indexed fund in your 401(k)!

      I also strive to keep my investing costs as low as possible. We have a few indexed funds and always will. Other than that we hold about 40 stocks (30 from Canada and about 10 from the U.S. at all times). I figure buying and holding and holding, there are no long-term money management fees to worry about – just some taxation that is being kicked down the road. That’s the best I can do 🙂


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