Weekend Reading – Share buybacks vs. dividends, time and money, easy roads and more #money stuff
Always lots going on in our world of late…lots of areas that need our focus and support. A reminder if you haven’t donated yet or want to donate to various humanitarian relief efforts – here is a great place to start.
I hope you have a great weekend and enjoy these articles from my personal finance and investing reading list – as part of your Weekend Reading.
See you here next week and take care!
Here is my August 2017 Dividend Income Update. We’re almost halfway to one of our big financial goals!
Are preferred shares the new replacement for fixed income?
Here are the other articles I checked out:
Dividend Growth Investor told us dividends and share buybacks are not the same thing. Agreed, but both can lead to capital appreciation over time.
Tawcan suggests to pay yourself first – time and money. I’ve often thought about this myself: “Rather than looking for an escape, aka FIRE, use the pay yourself time first concept to find ways to make yourself happier and ways to enrich your life.” Life is short and meant to be cherished. Money is fine but it’s far from everything and nothing if you don’t have your health.
Apparently there is an easy road to $1 million? Not really, you need to save money and incubate that money over many, many years of investing – but a good click-bait title.
Susan Brunner reviewed Telus stock.
Big Cajun Man believes in these three financial credos.
Million Dollar Journey listed his three favourite electric vehicles. We didn’t buy an electric vehicle recently (when we considered our newest car) because we’re uncertain where we’re going to live in a few years. Once we figure that out (our housing dilemma) we’ll see how much vehicle we really need. I could see ourselves buying a used EV car in another 5-10 years.
Interesting infographic – 9 effective habits of millionaires.
Who doesn’t love getting a deal?
Don’t forget about my Deals page where you can save hundreds or even thousands of dollars over years with better saving and investing solutions. It’s your money – get more out of it!
Cait Flanders wrote about how a short-term shopping ban changed her long-term thinking.
Stephen Weyman the proud owner of CreditCardGenuis told you how to waive goodbye to credit card fees – the Canadian way!
DIY wills? I wouldn’t do it myself but Retire Happy has some thoughts.
A reminder about this content – Canadian Financial Summit – a great summit with 25+ Canadian personal finance and investing experts who shared their saving tips, investing practices, thoughts and advice on housing, how to protect yourself from $hitty advisers, corporate trickery and much more! Enjoy the summit!
Thanks for the mention Mark. I think it all depends on a variety of factors. Buybacks have worked wonders for US defense companies like LMT, NOC, RTN, GD etc.. But not so much for retailers.. Usually if earnings per share grow, buybacks do wonders.. If they stagnate or go down – buybacks are wasteful..
So whether buybacks are good or bad for a company.. you can’t say in advance…
As you know, predictions are tough, especially the ones about the future 😉
pt. III (CC condemnation warning!)
re: Stephen Weyman the proud owner of CreditCardGenuis
“According to the Canadian Bankers Association…average sale of $102 per card. Think for a moment about your card usage. Maybe you eat out and there’s a $10 charge to A&W for a burger. $30 worth of gas added to your tank. Another $50 in groceries…”
Begs the question — Why are you even using a CC?! No one has $10, $30, $50, $100 in their bank account (or cash) any more? (I won’t even get into why you are eating at A&W…)
“…with gross transactions of over 3.9 billion dollars…”
Simple math will let you figure out how much inflation that pumps into the economy.
“You’re a revenue generating customer every time you choose to use your credit card even if you are a responsible user paying your balance in full every month.”
At least he recognizes this fact. All CC users do only and exactly two things: 1) funnel profit to the banks and CC companies, and 2) make all available goods and services more expensive for everyone. That’s it. Period.
Using a CC is one of the most irresponsible actions a PFer can take, a far cry from the prescribed “Canadian politeness”.
Headed back to work tomorrow so my recent swell of delightful activity is coming to a close. Don’t be sad, you’ll still get a dose of my special brand of crank on the weekends. 🙂
re: “Rather than looking for an escape, aka FIRE…find ways to…enrich your life.”
It’s a mindset which most won’t develop. I see a lot of selfish trajectories. The FIRE community hyper-focuses on the dollars and cents, hoping the rest will fall into place. What they seem blinded to is all the great stuff that can come from, and almost only comes from longevity. Instead of staying engaged with their career and bailing inside of a decade, they miss creating and/or experiencing opportunities, connections, and mastery that just don’t happen being a digital nomad et al.
For example, think Michael Jordan would have reached the same magnitude of player if he had switched teams every season instead of staying with the same team for 15 years? Think he would have garnered the same level of marketing and endorsement if he had quit basketball after 6 years of “working for The Man” to start his own basketball league? It took him 30 years of being fully entrenched in the basketball business to create a billion dollars for himself, think he could have done that outside the basketball industry (considering his baseball “career”, probably not)?
I’ve recently been perusing how an array of governments and organizations are adopting different metrics to measure poverty (besides straight income) such as health, education, housing quality, security, social connectivity, etc. If we have additional measurements to provide a more robust picture of poverty, then why not supplementary non-dollar metrics to measure true wealth?
re: electric vehicles
Still the most economical vehicle choice — both financially and environmentally — is a used pick-up truck. The choice to buy an electric vehicle is one of morals and ethics.
The Weyman article reminded me of my cable company. Every few years I call them about my Internet and TV charges and most of the time, they find a way of reducing it, by their knowledge of the packages, that never make any sense to me!
Thanks for the inclusion Mark. Hope you’re having a great weekend.
re: “Rather than looking for an escape, aka FIRE, use the pay yourself time first concept to find ways to make yourself happier and ways to enrich your life.”
Did Tawcan inadvertently pen me a 1,500-word love poem?! Ha! Perhaps I’ll ride an Orca over to the Mainland and buy him an over-priced craft beer. I’ve probably said similar, if not the exact same phrases in past posts…perhaps viewed with more legitimacy coming from an actual PF blogger. “What if you pay yourself 10% of your time first? What if you spend 2.4 hours every day on improving and creating a better and a richer life for yourself?” is a powerful course of action (and one I’ve experienced and experimented with first-hand) which should be more wide-spread, in all its varied forms.
(p.s. — nice Gretsch!)
re: easy road to $1 million?
Actually true. I’ve shown current retirees could very easily have saved — in cash, no need for any financial instruments — a sizeable and competent retirement nest egg. Ok, simple, not easy (due to ‘user error’). Future retirees, however, might not enjoy the same tailwinds (e.g. paying lower investment fees is a far compensation to cheap money and multi-sector bull markets).
re: Dividends vs Buybacks
There are a lot of things to say about both, such as why (and how) companies engage in either practice. It’s been a great environment for corporations (think earnings) since the buyback regulations were altered.
re: Credos — Don’t Invest It, If You Can’t Lose it
As Tawcan said, think of your time in terms of money. If you invest $1,000 you can’t afford to lose this year, calculate how many more hours of work you’ll have to do at the END of your working life in order to recoup that loss — with compound interest. E.g. future value of $1,000 (~50 current work hours) = $5,000 (~125 future work hours). Your loss now, when you are 30, might mean having to work an extra month or two in the future when you are 60. It effects both your current and future lifestyle.
Enjoy the first day of Autumn! That’s right, Summer is officially over (#weeping).
Haha buying me an over-priced craft beer sounds good. 🙂
Agree 100% with DGI on Buybacks vs Dividends! Super summary IMO.
Have prepared our own wills for many years. Used the one prepared by our lawyers many years ago as the template, just structure the disbursements to suit our needs.
Regarding DIY WILLS.
Nothing wrong with preparing your own WILL. As long as you know what you are doing. Most lawyers use a template and fill in / where needed. Just make sure you have 2 witness signatures!! (on any codicils too! or its not valid!). However if I lived in the USA I would hire a lawyer to handle this as each State has different rules etc.
I look at my estate plans / Wills etc every 3-4 years and make changes as required (re-balance). I do this partly because the value of my estate has increased or my financial situation may have changed. I also have very detailed WILLs – that excludes certain people and have given reasons why. (so there is no doubt what my wishes are). Plus, have detailed certain assets to be given directly to certain people. I actually enjoy making sure ALL MY WISHES have been addressed. Next I am going to do a VIDEO WILL to back up the legal docs. In it I will leave a special message to each loved one 🙂
You seem to have things in check Mike. We last did our wills about 6 years ago. They need to be updated since although we have no kids, nothing to change their, our assets have grown and we might decide to do things differently.
A video will with a special message to each loved one would be a nice gesture for them…
Thanks for the inclusion, I think those three simple statements are still relevant and it will be interesting to see what happens with GICs if interest rates creep a little higher