Friday, August 21, 2020

“Three lessons from a 30-yr-old retiree”/ "College financing"/ "Homing in on your hard- earned money"


Apr. 13, 2015 “Three lessons from a 30-yr-old retiree”: I cut out this article by Ian McGugan in the Globe and Mail.  There were some good tips.
The best part was this: “Mr. Mustache’s success reflects a fundamental truth about retirement: Every $10,000 you trim from your annual expenses is equivalent to roughly $250,000 you don’t have to save.”  Here’s the whole article:

Mr. Money Mustache has his fans. Also, his detractors.

A recent column profiled the Canadian engineer behind the U.S.-based website (www.mrmoneymustache.com) devoted to early retirement and frugal living. The story attracted a mob of readers and more than a few dissenters who poured scorn on the idea that anyone can (or should) retire at 30.

I suspect their antipathy has much to do with the sense of failure that can come from comparing your own situation to Mr. Mustache’s. After all, if you’re over 30 and still working, you’ve fallen short of full Mustachian glory.

But not so fast. Even if you’re not prepared to exit the work force at a tender age – or simply don’t want to because early retirement would bore you to tears – Mr. Mustache’s story still illustrates some principles of personal finance that are often overlooked. Let me draw out three underlying tenets of Mustachianism that anyone can use:

Frugality is good; early frugality is even better

It’s easy to spend your full paycheque when you first start working. Who doesn’t want to stop living like a student?

But living on the cheap during those crucial early years of your career can have a powerful multiplier effect on your future prosperity.

Everything else being equal, a dollar saved at the age of 25 is far more potent than a dollar saved when you’re 45 or 65 because of the way it can compound over time.

To be sure, your savings potential hinges on factors that may be outside your control. Mr. and Mrs. Mustache were in the rare position of being able to graduate immediately into well-paid computer-related jobs. Few twenty-something couples enjoy that level of immediate prosperity – or the same willingness to start saving right away.

But that doesn’t mean you can’t apply the same principle a few years later in life. A couple who each makes $75,000 a year will have a combined after-tax income of about $110,000 to $118,000 a year depending on their province of residence.

If they live as frugally as Mr. and Mrs. Mustache, they could save $80,000 a year, or $800,000 over the course of a decade.

If they produce a 5-per-cent annual return on those savings, they’ll have more than a million dollars in hand to help finance the rest of their lives.

Pedestrians (and cyclists) win

So why don’t more middle-class couples shoot from zero to a million bucks? One big reason is the amount we spend on cars and commuting.

Unlike many of us, Mr. Mustache relies on a single small vehicle. He bikes wherever he can to avoid auto-related expenses. By reducing auto usage to a minimum, the Mustaches put themselves thousands of dollars ahead of their peers, year after year.

This is not a small matter. The Canadian Automobile Association estimates that a person driving a mid-sized vehicle 20,000 kilometres a year will have total costs of about $10,700 annually, including gas, insurance, depreciation and maintenance. A two-car couple can easily spend more than $20,000 a year on car-related expenses.

So what happens if that couple cuts back to only one car and invests the savings instead? At a 4-per-cent annual rate of return, they wind up ahead by nearly $1-million over the course of a 40-year working life.

The quarter-million-dollar question

Mr. Mustache’s success reflects a fundamental truth about retirement: Every $10,000 you trim from your annual expenses is equivalent to roughly $250,000 you don’t have to save.

That’s based on the 4-per-cent rule that Mr. Mustache and many others espouse. The rule says you can safely withdraw an inflation-adjusted 4 per cent a year of your initial portfolio. 

 So $250,000 in savings translates into annual, inflation-adjusted income of $10,000 a year. Conversely, cutting your annual expenditures by $10,000 a year means you have to save a quarter-million dollars less.

It’s possible to take issue with the Mustachian reliance on the 4-per-cent rule (for one thing, the rule was designed for retirement periods of 30 years, not 60 years), but the broad logic is tough to dispute. Every additional dollar you want to spend in retirement requires about $25 in additional savings to support, more or less.

Even if you don’t want to live quite as frugally as the Mustache clan, you should keep that bit of math in mind. 

 Devising ways to trim $10,000 a year from your retirement lifestyle can dramatically reduce your savings goal and move early retirement from dream to reality. Just ask Mr. Mustache.

Aug. 3, 2015 "College financing": I cut out this article called "The ABCs of nabbing some 1, 2, 3s: money in your post-secondary pocket" by Riana Topan (Talent Egg) in the Metro on Mar. 5, 2014.

Here's how:

Scholarships and bursaries: Go to your school's registrar and they could give you info about financial aid.

Work- study programs: Check with your department to make sure you're eligible for the program. 

Internships/ apprenticeships: Most schools have co-op programs.  You will have to apply to companies that are connected to your program of study.

My opinion: I never applied for a scholarship.  I may have done some research on it, but I didn't look too hard.  My grades weren't that good to begin with, and also I may not even be accepted into college.  My parents paid for the tuition, but I paid for the books.

 https://issuu.com/metro_canada/docs/20140305_ca_edmonton/23

Aug. 7, 2020: This is on page 23 of the link.




Aug. 29, 2016 "Homing in on your hard- earned money": I found this article by Melissa Leong in the Edmonton Journal today.  I can find the epaper edition.  It talks about Amazon Dash and how people buy household items like laundry detergent as soon as you run out.  The cons are that it's faster to spend your money without thinking about and you don't comparison shop for a cheaper deal.  The pro is that it's convenient.

Aug. 7, 2020: I found the whole article:
Imagine never having to shop for laundry detergent or coffee beans. Your washing machine or coffee maker would note that you were running low on supplies and automatically reorder them — a high tech feat that would make even the Jetsons feel at home.

Fortunately, these innovations are now available as developers race to bring us more convenience and more personalization: smarter homes, seamless shopping experiences and faster payment processes.

Unfortunately, in our increasingly cashless society, we already mindlessly and perhaps frivolously blow our cash with the tap of our credit card and the wave of our mobile phones. 

 And with the advent of connected homes, we can spend with the push of a button or a casual remark to a virtual assistant. As the technological juggernaut, the so-called Internet of Things, takes over our lives, what does this mean for how we buy and manage our hard-earned bucks?

“It could become incredibly easy to spend money,” says Jeff Marshall of Scotiabank. He oversees hundreds of designers and scientists at the bank’s unit for digital innovation. “Part of (our role) would be: how do we help customers understand their budgeting?”

Well, most of us understand that money can be spent many times faster than it is made; however, we may not appreciate how the ease of payment affects our money mindset. 

 Scientists who study behavioural economics often talk about the pain of paying. The more attention that you pay to the payment, to money leaving your wallet and to your account, the more it hurts.

Seeing a price tag or spending cash triggers the part of your brain that is associated with pain. But using credit cards anesthetizes this pain, as does, say, hitting a button.

With last year’s rollout of the Wi-Fi-enabled Amazon Dash buttons, we’re now able to reorder items with ease. Each button costs US$4.99 and can adhere to any flat surface in your home. Run out of laundry detergent? Tap a Tide button and Amazon will deliver it to your home. 

 (OK, there is one more step: You’ll get an order alert on your mobile device before you confirm the purchase — in case your kid mashes the button 40 times for fun.)

Other companies, such as Kwik Commerce, are working to unveil their own buttons that will supply you with everything from diapers to drinks. It’s the next step in a more seamless shopping experience for the masses who have come to expect more customization and connectivity to their devices.

But a button has little psychological link to money. No price counter. No bill. Just a brand.

“(Retailers) don’t want us to have to go through some soul-searching process about whether we want to part with our hard-earned $50. The easier they can make the mode of transaction, the more likely we are to spend,” 

 says James Roberts, a marketing professor at Baylor University in Texas and author of Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy.

 My opinion: I like that book title.
“With Amazon, they’ve made it very easy,” he says. “We’ve got an account, we have our credit card on there. … Now we’re taking it one step further. We’ve got to add these digital assistants where there’s nothing more than just making a request. That reduces the pain of paying substantially.”

In a step up from its Dash buttons, Amazon’s Echo device uses an intelligent voice assistant named Alexa to help users with tasks such as ordering products.

Launched in the U.S. earlier this year (Amazon has yet to release any details of Echo’s Canadian debut), the smart speaker offers voice activated help for a slew of tasks — from volume control to asking Alexa to read you the morning’s headlines while you make breakfast. Of course, if while making breakfast you realize you’re out of coffee, you can ask Alexa to order more. Actually, if you’ve previously ordered almost any household items, such as toilet paper, pop, pizza or flowers, you can ask Alexa to get more since the app already has your payment information and shipping address.

It’s definitely convenient, but buying items this way means we’re less apt to shop around or research prices. Whatever the listed price is on Amazon.com is what you’ll pay if you make Alexa your personal shopper.

Another potential downside is that if we can refill our pantry and fridge with ease, research shows that we’ll consume more and faster.

“If you have your chips on auto refill, you’ll end up eating more chips than you used to,” says Scott Rick, associate professor of marketing at the University of Michigan. “For discretionary food goods, people will wolf them down at a greater rate if they’re visible. …. That might be bad news for people if they’re refilling naughty stuff.”

That being said, having to order goods through your assistant could be a deterrent if you’re buying something that you feel guilty about. According to research on how we interact with computers and robots with human-like qualities, we actually feel as awkward around them as we would if they were people.

“If people have to announce that it’s time to refill the Twinkies, it’s something that we don’t mind doing discreetly through a button or just having it arranged online. But having to say it, even it’s to an algorithm, to a robot, is aversive,” Rick says. “That can help people behave.”

As it turns out, we’re not desperate to order foodstuffs and household items online anyway. According to a recent BMO survey, while 48 per cent of millennials (aged 18 to 35) prefer to shop digitally, only 14 per cent prefer to grocery shop online versus in person.

And Roberts points out that people with the Dash button have actually been slower to purchase. In June, the Wall Street Journal reported that fewer than half of those who bought a Dash button had placed an order in the last year. Those who did bought something once every two months.

“People want to comparison shop,” Roberts says. “When products are consumed in private — toothpaste, cleaning solution — people are less likely to worry about what other people think. We want the best deal we can get.”

The comments:




  1. TAL - Chinook Arch Regional Library System (PQ)
    Order more popcorn and beer, there's going to be even more time to sit behind the boob tube and die young from the obesity currently raging in the population.
    More Options
  2. WWayneO
    And the malls are still full of people buying crap they don't need with money they don't have- this is just the next step over the edge of the financial cliff.
    More Options
  3. KKB8
    Just held a garage sale this past weekend and realize how much crap we've accumulated in the past twenty years. My new mindset is, I will seriously think before buying anything".

Aug. 18, 2020 "More than Enough: The Ten Keys to Changing Your Financial Destiny":

This book is by Dave Ramsey.  I don't remember hearing of him before.  This book is average.  This is a fast and easy to read.  This is more about:

1. Life advice
2. Financial advice

 https://www.amazon.ca/More-than-Enough-Changing-Financial/dp/0142000477

 This week's theme is personal finance:

"Make the most of your RRSP room"/ "The odyssey of retirement planning"


 http://badcb.blogspot.com/2020/08/make-most-of-your-rrsp-room-odyssey-of.html


Gail Vaz- Oxlade/ "Your financial planning journey starts with a goal"


 http://badcb.blogspot.com/2020/08/gail-vaz-oxlade-your-financial-planning.html


My week: 

Sat. Aug. 15, 2020 "Which TV Shows Have Planned to Resume Production?": There are mainly reality shows.




Sun. Aug. 16, 2020 Should I buy a bus pass for Sept.?: I could buy 10 bus tickets for $27 or a bus pass for $97.

Pros: 

1. I can go to City Centre mall in the afternoon as a break.  I can go look around and not buy anything.  Then I can come home and be in a good mood.

There are all these other malls I can go to.

2. Or I can ride on the bus to one mall and then ride back home and that would be 1hr.  I would be reading a book on the bus.  That's still productive.


3. I can go out whenever and wherever, without worrying if my transfer is going to expire.

Cons:

1. I don't like going shopping as much.  I also don't like wearing a mask and then putting hand sanitizer every time I enter a store, even though I will do it.

My opinion: Or I should plan to go out once a week and that would be enough.

 Aug. 21, 2020:

 1. Do you want this?

 2. Do you need this?

 3. Do you have to buy this?

 My decision: I only wanted this, so I won't buy this.  There was something else I want more.  

Kelly Stafford, wife of Lions QB, apologizes for not listening to Colin Kaepernick's protests:
It’s well-known that Colin Kaepernick’s protests against racial injustice in 2016 and 2017 drew a sizable amount of detractors, even in NFL circles. Now, one of those detractors is saying she was wrong.
Kelly Stafford, wife of Detroit Lions quarterback Matthew Stafford, posted a lengthy statement through Instagram on Saturday discussing her initial reaction to Kaepernick’s protests and how she was persuaded into thinking the act was disrespectful to the military. She apologized for her reaction, and pledged to take part in the fight for social justice.

The post itself contained a screen shot of an NFL announcement that Stafford and her husband had donated $350,000 to endow a social justice program in the athletic department of their Georgia alma mater.


Aug. 17, 202 Crispy Minis: They are like rice chips that are gluten free and made with grains.  I tried 3 bags of 100 grams for $5 at Shoppers Drug Mart:

-butter popcorn
-sour cream and onion
-cheddar

They are all average.


Aug. 18, 2020 TV diet: This usually happens in mid- August to mid. -Sept.  There are hardly any written dramas for me to watch.  I then end up watching some dramas that I don't really like or find to be average.

I will then watch movies like 1hr today and the 2nd hr the next day.

It's not like the days of Sept.- May where I watch 2 hrs of TV a day.  Now I watch 1 hr of TV a day.

Though I listen to a lot of life/ business coach on Facebook videos.

Aug. 19, 2020 Free computer: This was a long time ago like in Nov. 2019.  My old boss Ad works at this company and they are going to get new computers and are willing to give away their old ones for free. 

I went through the Facebook messenger and he said the computers will be given away by May 2020.

Today I was trying to print something from my bank on my 2004 computer, but it was taking like 15 min.  If I was printing something from Microsoft Word, it would be faster.

I then FB message Ad and he said after he got laid off, he got another job so he can't give me a computer.  That's totally fine.

I can go to my friend's house to print something.


Places that closed down: I was taking the bus to an appointment and I see all these places that closed down.
1. X Realm- I applied online in 2018 or 2019.  It closed down in 2020.


Empire Building: 

2. The Greenhouse restaurant- I passed my resume in 2019.  It closed down in 2020.

3. Starbucks- I passed my resume in 2019.  It closed down in 2020.

Standard Life building:

4. Cha time- I passed my resume in 2017.  It closed down in 2020.

Mayfair building: 

5. Eat Clean-  I passed my resume in 2019.  It closed down in 2020. 

6. Doppio Zero Pizza

7. Treats on 124 St.- I applied in 2019.  It closed down in 2020.

Starbucks plans to close up to 200 Canadian locations over two years:



Aug. 20, 2020 Prosper Place: I was looking for a job and I found this: 

Prosper Place is a safe, inclusive community of vibrant peer culture and peer excellence where people living with the effects of mental illness feel valued and encouraged to explore their self-directed paths of recovery. 
From the moment you walk through our doors you will feel the welcoming atmosphere. We offer so many opportunities to learn and grow at your own pace. Workshops, educational classes, cooking and baking, participating on an organizational team, working in the office, games and great conversation are just a few things you will find here at Prosper Place. 
Give us a call or book a tour – we’d love to meet you!

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