40 years of faulty wiring

Stupid Financial Advice that will put You in the Poor House

1Canadian%20Money%20Rainbow%20-%20Jonathan%20Hayward-Canadian%20Press. Buy low, sell high.  Oh really? Are you a stock market aficionado? Can you play the stocks along with the best? Even the pros cannot manage the market with perfect timing. The odds of doing this consistently are incredibly low. That means you have to be buying straight stocks rather than mutual funds or a GIC or even Savings Bonds and keeping an eye on how they’re doing. I wish you luck with that. Usually mutual funds or ETFs are the way to go for the middle-class investor. Affluent to wealthy people may have more leeway but even the affluent need a good financial advisor when investing their hard-earned cash.

2. Follow the 1/3 rule. The 1/3 rule in a nutshell: to invest your money in a supposedly wise manner, invest 1/3 of your income in a high risk venture, 1/3 in a moderate risk and 1/3 in a low risk. Seriously? Let’s consider a high risk. Someone wants you to give them a few start-up bucks to open up a restaurant, promising you a significant return, maybe even a long-term venture together. Everyone knows the restaurant business is notoriously unstable. If you are a millionaire, go ahead with the 1/3 rule. Otherwise, what are you thinking? Invest 90% of your funds in low-risk and maybe the rest in moderate – high risk. You can’t afford the risks.

3. Always get a private financial investor or stock broker. Don’t be stupid. That’s like saying always trust a used car salesman.You might be lucky to find a good one and they are out there, but most brokers are in it to win it for themselves. Generally speaking major banks are the way to go. They also have an agenda of course, but there are so many people investing through banks that your likelihood of a good return is significantly higher than investing through someone whose eye is more on her own commission than on your financial well-being. Besides they might be pushing a specific product and that is ridiculously misleading.

4. Open a credit card account but don’t use your card so you can build up a good credit rating. Of course you will use that card. And often. You will tell yourself it’s only for emergencies but your definition of emergency will be pretty lax once you realize how easy it is to pull out that card and ch-ch-charge it!

5. Nix a written financial plan. Okay so you won’t reach every goal you have on the plan, it’s more of a forecast than 10 financial commands written in stone. A good financial plan however offers room for flexibility and allows for set-backs. It is updated regularly to suit your goals and financial situation. You need it and you need a good, certified financial planner to help you make one.

6. Ignore undervalued stocks. This may be smart but an undervalued stock that has good potential to rise is a different story. Your financial advisor at your bank or your certified financial planner (whom you have checked out and are satisfied with his or her credentials) should be able to advise you on this one.

7. Canadian-Currency1Hire an investor without recognizing significant personal and professional characteristics. A good advisor is patient, understands human needs, has no hidden agenda, has strong, verifiable credentials and is without bias.

8. Ignore your retirement needs, it will all take care of itself. This one is huge. you have to do the math in order to predict what you will need to live on comfortably when you retire. You need to allow for the cost of living, inflation, recession, ill-health, the duration of your mortgage payments, and the age you want to be when you retire. These aren’t fun facts but they’re important. You need to invest in an RRSP or ETF portfolio you are willing to buy and hold, or some such thing and contribute to it with every pay check.. It is never too early (or too late if you haven’t begun) to start planning for your retirement. Seriously. That even applies to people who are fresh out of university or college and are still in their 20’s. The sooner the better.

9. An RESP for your kids shouldn’t be a priority. Well, if you cannot invest in your child’s education and your child has to apply for a bank loan or a government loan, the world won’t stop turning. Most of us had to pay for our own schooling. It was tough, but we did it. However one of the best gifts you can give your child is an education and if you can do it, then why not? The sooner you invest in an RESP, the better. It doesn’t have to be a large investment. I started investing for my 6-year-old daughter with only $25 a month since, as a single mother on a $40,000.00 a year income and no child support, that was all I could afford. I increased it to $50 a month only after she reached about the age of 13. It was the best I could do. However, in Ontario the government matches RESP investments dollar for dollar up to $4,000.00 annually. By the time she was ready for college at the age of 18, I had close to $6,000.00 for her, more than enough to pay for a 2-year college program. Who knew?

10. TFSA’s aren’t as financially sound as RRSPs. Not so. The proper use of a TFSA (tax-free savings account) is to hold your money in it for as long as possible. Investing then withdrawing on a regular basis will lead to taxation and that renders it useless. However, sometimes you may need to cash in your TFSA for an emergency fund. It’s a small tax shelter when used properly. It’s great as an emergency savings plan or for a relatively short-term goal, such as a purchase you wish to make within 5 years of opening the account. It’s wise to take advantage of this investment on a short-term basis. If you’re looking for a retirement fund however, RRSPs or ETFs that are comprised mostly of mutual funds are the best way to go. RRSPs tend to be good starter investments for the new investor but they are also very reliable for the middle-class investor who has little risk room.

11. You always need lots of diversity in your mutual funds. Not necessarily. The “don’t put all your eggs in one basket” mentality is a smart one but a more experienced investor doesn’t invest in hundreds of stocks via mutual funds. Those that are tried and true can be highly beneficial and relatively risk-free.

12. Renting your home is throwing money away. Nonsense. It is true that a house is a long-term investment and that home ownership gives a person a feeling of accomplishment. But renting isn’t throwing money away. Going to a casino and gambling away your pay check is throwing money away. if you aren’t in a position to buy, and that may always be the case, there are other ways to invest your money so you won’t be house-poor or cash-poor. When you can’t rent for significantly less than you can own, that can be a more sensible move than buying a home. At least you don’t have to panic when a recession hits, and recession will hit. It is inevitable, especially with financial trading and national economy going more global than ever. Besides, you are locked in to your mortgage and your location when you buy a house. And you are responsible for your own yard work and the repair and maintenance of your own home. Meh. Flip a coin. To each her own.

I’m sure you know of other tips to avoid bad investing (or missing out on good investing). I’d love to hear from you to add them to my list.








August 24, 2014 Posted by | Finance | , , , , | 5 Comments

Eating Insects isn’t a Foreign Delicacy

ladybugDid you know that you consume at least 1 lb of insects and other animal parts every year? I’m not kidding. Never mind the mites that you inhale when you’re asleep, snoring away, or the tiny insects that work their way into your mouth and nasal passages whether you’re asleep or awake. I’m talking about your food.

It’s all about globalization and sustainability. You’ve seen those documentaries that show different countries around the world pan-frying and sauteing all kinds of creepy-crawlies in restaurants and outside at food markets. They serve everything from ants to maggots to god-knows-what. And people eat them! Not just locals either. Tourists like to bravely give it a go. Lots of people love them and eat them on a regular basis. Sounds gross, right?

Well, with the population explosion continuing unabated, we’re simply running out of food. Where will it come from? So many thriving insects that are edible and some people swear, quite delicious, they are a highly efficient and plausible diet staple. And except for the Arctic and Antarctic, they are available virtually anywhere on this earth. They claim 30% of our land surface. Yikes. Greenhouse gas emissions could be reduced by 18% if insects became a staple in our diets. Yum-yum. Right now, most of us turn up our noses at the thought of consuming insects. Within the next couple of decades however, eating insects will be as commonplace as eating hotdogs and bread.

You might consider yourself a vegetarian but you’re eating meat whether you like it or not. Carnivore that you are, inside your food, and that can be anything from the tiny leafy growths on apples and strawberries, all the way to hamburger meat, a minute amount of insects is legally permitted in your food by the FDA, otherwise, you’d never eat! Insects rule the soil where all our food is pretty much grown so it’s unavoidable to get away from them. And what do cows graze on all day long? Naturally you’d have to expect partly undigested insects in hamburger meat but they’re so tiny you don’t know they’re there.

There are 6 million species of insects. To put that into perspective there are only a few hundred species of animals. Like it or not, they’ve got us surrounded. Insects rule the world. A good thing too: insects eat feces, they pollinate our flowers and crops, and they feed many animal species, including birds and bats. We need insects. They were here long before we were and it’s likely they’ll be here long after we finish destroying our Earth.

It gets worse: fly eggs, rodent hair and feces are also permitted in your food. What_a_324_inscThis may seem like a cruel joke or perhaps an attempt to wipe out the entire human population while being able to claim it was all due to natural causes, but the reason is simple: it is impossible to produce, package and distribute food without coming into contact with parts of  insect and animal byproducts, or the entire insect itself. The FDA states that impurities such as these in reasonable amounts don’t pose health hazards. Mind you, the FDA only inspects 2% of our food. That certainly puts their “inspections” into a different light.

Here’s an example of food and insects that are okay with the FDA: canned mushrooms are packaged with a small amount of maggots. Ground oregano is permitted a small percentage of ground insects. And if more than 5% weight of sesame seeds is due to insects then and only then will the FDA take action.

There are those who swear that eating insects will save our earth. I guess it makes sense. Insects don’t require any processing. Cooking them is healthy and pollution-free when done in small amounts. There is such a thing as cricket flour. Eventually insects may even become snack food.

Now that you’re totally grossed out, here’s one consolation: insects aren’t bad for you. In fact many people swear they add nutritional value to the human diet. Well, they are high in protein, zinc, iron and certain vitamins. Myself, I’d prefer not to think about that when I’m eating. I simply won’t indulge in microscopic eyeglasses anytime soon.

August 24, 2014 Posted by | Uncategorized | , , , , | 2 Comments