Wednesday, October 31, 2007

Happy Hallowe'en

It's that time of year again: time to prepare to be swarmed by children. I always enjoy the spectrum of kids that you see out trick-or-treating. You get everyone from wide-eyed three-year-olds, to teenagers walking around in hoodies carrying grocery bags. We live in a condo tower, so we don't get any trick-or-treat traffic, but friends of ours live in the suburbs, so we usually go to their place to hand out candy and watch a scary movie.

Tomorrow, I'll post my October month-end results (finally, we get to something scary!), and update my NCN and NetworthIQ charts.

Have a fun and safe night tonight.

Tuesday, October 30, 2007

Federal income tax cuts

There's been a lot of talk about whether we would be seeing tax cuts with the fall fiscal update, and it's now official.

The following personal tax measures are being introduced:
  • The federal basic personal amount (the maximum income you can make without paying any federal income tax) is being raised from $8,929 to $9,600, retroactive to January 1, 2007, and continuing through 2008. The limit will increase to $10,100 for 2009.

  • The lowest personal income tax rate (paid on income between $9,600 and $37,178) is being reduced from 15.50% to 15.00%.

  • The GST is being knocked down another point to 5%.
I'm excited about the income tax measures. Basically, if you make over $37,178, the change will save you $241.90 in income tax for 2007. The GST reduction will also be handy, although I now have to learn to calculate 13% tax in my head, just when I had 14% figured out!

Monday, October 29, 2007

Tracking my investments

I've written about the recent re-allocation of my retirement investments, and the subsequent performance of the new investments versus the old stock-only portfolio I used to have. As of today, my current portfolio (consisting of index funds and a few shares of my company stock) is up 2.4% over where I "bought in", whereas my "old" portfolio is down 2.7% over the same time period. This represents a net gain of just over $2,000 due to the re-allocation. That's a nice little gain.

I thought I'd take a moment to go over how I track this performance. Basically, I use the "portfolios" tool provided by my brokerage's web interface. This is a web form that allows you to create up to five theoretical investment portfolios so that you can track their performance over time. You enter the symbol, number of units, and purchase price for each security, and the display will then show you the current dollar value of the portfolio, as well as the percentage gain or loss relative to the purchase price you entered.

I have the following five portfolios set up:
  1. Current portfolio vs. purchase price - Here I list each holding in my current portfolio, and the actual price I paid for that holding. This shows how well my investments have done since I bought them.

  2. Current portfolio vs. dollars invested - Here I again list each holding in my current portfolio, but I take into account the employer match I receive for contributing to our Employee Savings Plan. By taking the match into account, I essentially reduce the purchase price of every holding in my portfolio, so the gain/loss I'm seeing represents the return on actual dollars invested. Note that the total value of this portfolio is exactly the same as portfolio #1, but the gain/loss is different.

  3. Old portfolio vs. purchase price - This is similar to portfolio #1, except that the holdings included are the stocks that I had before I re-allocated. This shows me how my "old" investments have done since I bought them.

  4. Old portfolio vs. dollars invested - Similar to portfolio #2, but with the pre-allocation stock holdings. This shows me my return on actual dollars invested for my old stock holdings. Note that the total value of this portfolio is exactly the same as portfolio #3, but the gain/loss is different.

  5. What could have been - For every time I've sold stock, I include the number of shares and the price at the time I sold the shares. This shows me whether the stocks have gone up or down since I sold.
These five portfolios give me all the information I really need at the moment. At any moment, I can check to see whether I'm doing better or worse since re-allocating. The last portfolio isn't particularly useful, but it's interesting to look back and see whether each sale I've made was a good deal.

Google Finance provides a similar portfolio tracking tool, and I'm sure most online brokers also provide this functionality.

Friday, October 26, 2007

Starting from scratch

Berko at 43 Folders asked yesterday what users would do if starting over in a new environment. As I look at the ragged piles of paper on my own workdesk, I'm very interested to read people's thoughts on this. Ideas include a second chair for guests (which I have in my cube) and a dry erase board (which I do not have).

At work, our team just completed a desktop migration from Windows 2000 to Windows XP, so my computer is actually in a fairly "fresh start" state at the moment. I'm considering re-working my Firefox and Thunderbird installations to make the most of my settings. News about the new IMAP support for Gmail and Google Calendar support for Thunderbird have really got me thinking. I'd like to have the most same-at-home-as-at-work configuration possible, so I'll be looking into these options.

I have some tinkering to do.

More exchange rate news

Well, it's finally happened. A purchase I made online from a US vendor has posted to my credit card for less than the purchase amount in US dollars. The net exchange rate on the transaction (including the credit card provider's foreign exchange markup) was $0.9977 per US dollar. Compare this to the card rates of $1.0043 and $1.0008 that I experienced on our trip to Michigan.

Again, as I mentioned in my earlier post, the difference is minimal, but paying less than par is paying less than par, no matter how small the spread is.

Tuesday, October 23, 2007

Making sense of pensions

Reading Tim's post last week at Canadian Dream: Free at 45 about his company's new pension plan got me thinking about the components of my own retirement plan.

I contribute to an RRSP. That's it.

My employer offers a defined-benefit pension plan, but I have not enrolled. The big reason is that I don't know how long I will stay with the company (who does know this?). Of course, there's also the fact that I really don't understand pensions all that well. I know the contribution rates, and can calculate what my future benefit would be under certain assumptions, but I'm having a hard time working out just how the pension plan stacks up against the option of investing my would-be contributions myself.

With a pension, in addition to your monetary contributions to the plan, you're making a time and service investment to your employer, so it makes sense that you would get more out of it than just the dollars you've put in. If I make the $3,250 annual contribution to the pension plan, then 20 years of service gives me a benefit of roughly $20K per year, whereas an annual return of 7% on the same amount invested in the market for 20 years comes to $146K, which, assuming 5% investment income, could sustain $20K per year for only 8 years. That's a big difference.

What I've realized during my hashing out of these scenarios, is that I'm not sure how to handle a number of the assumptions required to make these projections. How do you forecast something like an RRSP contribution limit? Marginal tax rates? Pension contribution limits and YMPE? Do you assume these factors will remain constant, or do you apply some sort of inflation factor over time? I'd appreciate your thoughts on this.

Friday, October 19, 2007

Neither Loonies Nor Sense

I've been a long-time reader of The Sneeze, a humour blog that's very well written, and always highly amusing.

Steve at The Sneeze posted today about the orientation of toppings on pizza from Domino's. I was smiling mildly through most of the post, until I got to the beef-only 6" pizza, which actually made me laugh out loud.

I recommend checking out the blog. At the very least, you'll get some laughs.

Productive procrastination

It's one of life's great ironies that one can spend hours procrastinating by browsing productivity blogs. Lifehacker and 43 Folders have lots of great information for improving your productivity, but I find I fritter away far too much time by searching these sites for tips.

A while ago, LifeClever posted about how to procrastinate more productively, and Lifehacker has a poll up this week asking whether people are more or less productive without internet. Interestingly, the results are fairly evenly split between "internet wastes my time" and "I can't get anything done without internet", with slightly more people opting for the latter.

Lifehacker also has a list of distraction stoppers to keep you to focused on getting stuff done. Some of these tips look interesting.

What do you do to stay focused on the task at hand? Are you a fellow victim of the productivity blog time-sink, or do you find that these blogs actually enhance your productivity?

Enjoy your stay at the Embassy Beets Radishon

I'm a huge fan of The Office. I'll warn you that if you haven't seen last night's episode, this post may spoil some surprises for you.

Read on at your own risk.

Last night's episode, while maintaining the usual level of wit and humour, was uncharacteristically emotional. There were several heart-wrenching and touching moments in the show, that cement the show in my mind as one of the best things on TV at the moment. Michael's "declaration" of bankruptcy was hilarious and tragic at the same time. I'm convinced that only Steve Carell could pull off that line.

The episode touched on several popular PF blog topics:
  • Budgeting - Oscar tries to help Michael with his budget by splitting his spending into three categories:
    • Things he needs (the smallest category)
    • Things he wants but doesn't need (the middle category)
    • Things that no one could ever possibly need (the largest category)

  • Communication - Michael tries to keep his financial troubles from Jan, and nearly loses everything as a result

  • Bankruptcy - Michael attempts to get out from under his debt load by shouting to the office "I declare bankruptcy!" Oscar later explains that this doesn't change anything

  • Knowing your Tools - Michael instructs Oscar to "ask PowerPoint" how to fix his financial troubles, prompting Oscar to explain that it is only a presentation tool

  • Dealing with Debt - Jan admonishes Michael that his debts can follow him around the world, electronically, and that, despite his plans to hop a freight train and "live off the grid", he needs to deal with the problem
I'm sure there are other references, but I just loved the episode. It had that winning combination of wittiness and heart that makes this show shine.

Finally, for those who want more of Creed's insight, check out\creedthoughts.

Thursday, October 18, 2007

The Canadian High-Interest Savings Strike Back

In my previous post on Canadian savings accounts, I wrote about the experiences of opening a new account with ING Direct, HSBC Direct, Canadian Tire Financial Services and ICICI Bank. ING emerged as the winner, due to their fast and smooth account opening process. Now that I've spent some time with each of these accounts, I want to give a run-down of each institution's web interface, and the process of moving money in and out of these accounts.

Web Interface

All four institutions have easy-to-navigate web sites. One nuisance I found is that, from the pages I've linked to above, both HSBC and ICICI launch a new browser window when you click their "login" link. This isn't a big deal, but it always irks me when a website hijacks my user experience like this. The only reason I'm at HSBC's website is to view my account information, so don't leave me with multiple HSBC windows open. Also, when logging out of your account, ICICI prompts you for confirmation that you really want to leave. Again, a minor detail, but it's annoying to have to click multiple links just to log out.

In terms of security, HSBC and ING both ask a security question at login. For HSBC, this is a single identifying question (mother's maiden name, home town, etc.), while ING has a list of three questions that they cycle through, so you get a different question with each login. HSBC requires a "strong" 8-character password with both numbers and letters, while the other three require a six-digit numeric PIN. When ING asks for your PIN, they also display an image that you select the first time you enter the site, so that you know you're at a legitimate website.

Strangely, HSBC only asks for three of the eight password characters at login. For example, if your password is "mOnEy4mE", they might prompt you with the following: "*_**_**_", which would be filled out as "*O**y**E". I'm not sure why they went this route, rather than simply asking for the entire password.

Once you are past the login screen, all four institutions show you a list of all your accounts and their corresponding balances. When you click on an account, ICICI shows you a summary of the current status of the account (i.e. balance, currency and interest rate), while the other three take you straight to a screen that includes recent transactions and current balance. ICICI requires a number of clicks to get to a transaction list, and HSBC does not seem to display the account's interest rate anywhere on the site. HSBC's navigation is extremely cluttered, with lots of non-savings-related links crowding the screen.

Advantage: ING wins this one, due to its simple, intuitive interface and strong security. Canadian Tire is a close second, but their PIN-only authentication doesn't feel as secure as ING's login process.

Transfers into Savings

ING, Canadian Tire and ICICI all provide a "Move My Money" link on every screen that takes you directly to a form to initiate your transfer. HSBC, on the other hand, requires you to click the "Bank to Bank Transfers" link in the sidebar, and then the exposed "Make a bank to bank transfer" link in order to get to the transfer form. Again, this is a minor inconvenience, but it becomes annoying quickly.

Canadian Tire has a two-page transfer request form: you enter the "from" account and amount on the first page, and then select the "to" account on the second page. The other three institutions have all this information on a single page. All four allow you to specify immediate, post-dated, or recurring transfers, and all four provide a final confirmation screen with a reference number. HSBC and ICICI both allow memo text for transactions.

One odd behaviour is that ICICI defaults to Bangladesh Taka as the currency for the transfer, even though the account is in Canadian currency. It's frustrating to have to select the currency every time you make a transfer.

After you have requested a transfer, HSBC and ICICI allow you to call up a confirmation page for that transaction, including the reference number. Canadian Tire provides a line-item view of the transfer in the transaction history, and also includes the reference number, while ING does not repeat the reference number. Although I haven't had any problems with transfers to or from ING accounts, if having a reference number is important to you, you should print the confirmation screen at the time you initiate the transfer.

Canadian Tire credits your account immediately after you request the transfer. The other three credit the account on the next business day (ICICI does this in the afternoon, which may have something to do with their being an Indian company), and all four debit the external account (thereby completing the transfer) at the end of the day the savings account was credited. All four institutions begin interest accrual as soon as the account is credited.

All four institutions claim to place a five-day hold on transfers into savings. ING and Canadian Tire display the amount on hold, with ING also displaying the expiry date of the hold. HSBC and ICICI do not display the amount on hold, but they show the "available balance", which does not include the held funds. In my test transfer, HSBC was the first to release the hold on the funds. ING and ICICI released the hold on the day following HSBC, and Canadian Tire released the hold the day after that. Essentially, HSBC held funds for four business days (including the day the savings account was credited), ING and ICICI held funds for five days, and Canadian Tire held funds for six days. I've found ING to be consistent with this five-day hold, but I've only transferred funds into the other accounts once, so I'm not sure how much their hold times vary.

Advantage: A tie between ING and Canadian Tire. Both have a simple transfer process, but Canadian Tire credits the account (beginning interest accrual) sooner, while ING makes the funds available sooner. The choice depends on how quickly you need access to the transferred funds.

Transfers out of Savings

When requesting the transfer, both ING and Canadian Tire display the account balance in the description of the savings account. Note, however, that ING displays the available balance (excluding holds) while Canadian Tire displays the total balance (including held funds).

As with transfers into savings, Canadian Tire debits the savings account immediately, while the other three debit the account on the next business day. I'm not sure whether this affects Canadian Tire's interest calculation. All four institutions credit the external account at the end of the next business day. Note that your chequing account may have a hold on these deposited funds, so you may not have immediate access to the money.

Advantage: ING, by virtue of its simple interface, and the fact that you have access to the funds the same day that they stop accruing interest.


ING has the most intuitive interface, they have good site authentication, and their transfers are quick. Although they do have a five-day hold on deposited funds, they follow this hold policy rigidly, so you know exactly when the funds will be available. The other three all claim a five-day hold, but ICICI is the only other one that seems to follow it. In my mind, if HSBC can hold the funds for less time than they said they would, it's reasonable to think they might hold the funds for longer, as well.

Itty bitty milestones

Well, today is payday, so I have a couple of things to report:
  1. My Emergency Fund has now reached $1,000. This was my goal for 2007 (and, in fact, until I pay off my revolving debt), so I can now take my bi-weekly Emergency Fund contributions and apply them to my debt reduction. The snowball has completed its first rotation.

  2. My revolving debt has now dropped by more than 10%, or more than 50% of my 2007 goal. Granted, since I "started the clock" on my finances on May 1, I'm already 70% through 2007, so I'm running behind, but it's still good progress. And with the Emergency Fund funded, my debt reduction will speed up, starting with my next paycheque.
They're small steps, but they're steps in the right direction. We'll see how I make out overall with my September goals.

Tuesday, October 16, 2007

Exchange rate roulette

Since our trip to Michigan this past weekend, I've converted my leftover US cash back to Canadian dollars, and I'm watching the weekend's transactions post to my credit card account. The various exchange rates we've encountered have been very interesting. Here's a rundown:
  • US cash purchased on Thursday: $1.00 US = $0.9911 Canadian

  • US cash sold on Monday: $1.00 US = $0.9605 Canadian

  • US-dollar transactions on credit card: $1.00 US = $1.0043 Canadian
It's really amazing just how quickly we grow accustomed to favourable circumstances. Even though the last five years have seen the exchange rate drop from a 60% markup to parity and beyond, I still find myself quibbling over a few percentage points. Never has the bank's spread on exchange rates been so obvious: $1.58 and $1.61 feel practically the same, but $0.96 and $0.99 seem much farther apart.

I have to keep reminding myself that these are the best exchange rates I've ever seen, and worry less about small fluctuations in the short term.

Monday, October 15, 2007

Perspective on my market timing

Well, Ms. Loonie and I got back last night from our weekend trip to Michigan. We had a great time, and saw some beautiful countryside. The area we visited is actually around the same latitude as cottage country in northern Ontario, so we got to see some great fall colours and an incredible view of Lake Michigan. It's an odd sensation driving "down" to the United States and ending up hundreds of kilometers north of where you started.

After cashing in the company stock in my RSP, I wrote about the subsequent jump in the value of the stock I had just sold. Now that I've completed my re-allocation into low-cost index funds, I've had another look at the relative performance of my current investments versus the stocks I used to hold. Since the end of September, my retirement investments have grown by 2.6%. My old portfolio, on the other hand, has dropped by 0.2% (essentially holding steady). All-told, I'm up by around $1,000 over where I would have been had I held onto my individual stocks.

That's encouraging.

I know that these short-term returns mean very little in the context of my overall retirement plan, but they have illustrated just how little my initial "loss" of a few hundred dollars actually means in the grand scheme of things. Throw in the fact that my retirement investments are now heavily diversified, and I'm feeling pretty good about my decision.

Thursday, October 11, 2007

Moleskine temptation

In my time as a GTD lurker, I've seen countless posts, comments and articles written about the indispensable Moleskine notebook. This intriguing little product, known as the "notebook of Hemingway", really seems to have captured the imagination of the productivity-obsessed. Brip Blap was recently converted to the religion of Moleskine (while I've Paid For This Twice Already... had her own take on the tools of an organized mind).

While browsing Lifehacker today, I saw their link to Mike Rohde's custom Moleskine planner, which really piqued my interest. Mike has taken a simple ruled Moleskine notebook, and completely customized it as a weekly planner. This approach just seems so elegant, that I am really tempted to try this myself. It's more than a little work to put this together, but it looks so slick, I think it would be worth it.

Methinks I'll be putting a ruled Moleskine notebook on my Christmas list this year.

What's new?

Yes, I'm still here.

Things have been pretty hectic lately. We had lots of family time over the weekend, with a mixture of positive and negative feelings. Visiting was great, but there's some stuff going on with Ms. Loonie's brother that's pretty frustrating, so we were kind of exhausted when we got back to work.

Yesterday, Ontario re-elected its Liberal government. I'm interested to see what the next few years hold. A lot of promises were made by Dalton McGuinty leading up to the election, and I really hope these are kept. I tend to lean left, so I'm happy about the Liberal victory, but I do expect the government to live up to its campaign promises.

Tomorrow morning, Ms. Loonie and I leave for our road trip. Our friends from Illinois are meeting us in northern Michigan for the weekend. The weather doesn't look promising, but it should be a fun weekend. Whatever else happens, it will be good to get together with our friends. We've saved up for the trip, so I'm hoping we'll be able to stick to the budget.

Friday, October 5, 2007

Loonies And Thanks

This weekend is Thanksgiving in Canada. We're heading up to our family cottage tomorrow, to have a big turkey dinner with extended family. Then, on Sunday, it's back down to celebrate with Ms. Loonie's parents, followed by some much-needed rest on Monday.

It's all too easy to fall into the trap of calling this holiday "Turkey Day", and losing sight of the reason we celebrate. I've certainly been guilty of this enough times. This year, however, as I dine with my family, I'll be reflecting on the things for which I am thankful. There's certainly plenty of stuff on that list:
  • Ms. Loonie - Without her love, support and friendship, I don't know where I'd be. I'm truly a lucky man to have such a wonderful woman in my life.

  • Family - My parents, my brother, Ms. Loonie's family, and all our close friends, who really make life worth living.

  • Home - We love our condo. What more can I say?
At the risk of sounding corny, I also want to extend my thanks to everyone who has visited, commented on, subscribed to, or linked to my blog over the past few months. It's great to know someone is listening when I click that "Publish" button. Thanks for keeping me honest.

If you're traveling this weekend, please be safe. Enjoy the weekend (whether it's a long one where you live, or not), and I'll see you next week.

Happy Thanksgiving!

A nice little bonus

I logged into my HSBC Direct account this morning, to find a nice little surprise. My $50 account opening bonus has been deposited into the account. I wasn't expecting this to show up until the end of the month, so it's a very welcome addition to the Emergency Fund.

This takes my Emergency Fund total up to $905.31, or 90.5% of my 2007 goal.

Thanks, HSBC!

Thursday, October 4, 2007

"Once per week" seemed easy enough on Monday...

I'm an incredible procrastinator.

I know that's likely true of most bloggers (after all, what better way to fritter away an hour than by updating your blog?), but I believe this is my single biggest shortcoming. I'll never do today what I can put off until tomorrow.

Case in point: on Monday, I stated as one of my goals for October that I would "blog once per week about productivity". This is an evolution of my failed September goal to "write five productivity-themed blog posts" for the month. It seems only natural that, as we approach the end of the week, the next iteration of this goal would be, "write a damn productivity post already!"

So, that's where I find myself.

I need help.

For years, now, I've been reading about Getting Things Done, the book by David Allen that revolutionized modern productivity. Sites like 43 Folders and Lifehacker extol the virtues of this Allen's system on a daily basis, from the Hipster PDA to custom Moleskine notebooks and countless software implementations, this is one seriously talked-about philosophy.

I'm familiar with the basic tenets of GTD: get the random, confusing "stuff" (tasks, schedules, etc.) out of your unreliable brain, and recorded in a medium that you can then "process" to tackle your to-do list in an orderly and efficient manner. Beyond that, however, all I've got is a lot of disjointed third-hand hacks and mods of a system I only barely understand.

I want to change that.

Taking a page from the book (pun, unfortunately, intended) of The Simple Dollar and I've Paid For This Twice Already..., I am going to read Getting Things Done, and I'm going to post my thoughts as I do. I'm going to use the following structure:
  1. Before reading, post my thoughts of what I expect to get out of the book/chapter.

  2. Read the book/chapter.

  3. Report on what I actually got out of the book/chapter.
It's high time I did something about my organization and productivity, and from what I've read, this book is a huge motivator in this area.

Bring it on.

Revolving debt is now below $25,000

I was just updating my progress bars, and noticed that my revolving debt currently sits at $24,948.33. Most of this is on my line of credit, so that means that, if I keep up the forward progress, my line of credit will never break the $25,000 mark again.

That's a good little incentive to keep myself motivated.

Wednesday, October 3, 2007

Yet another milestone

It seems that Loonies And Sense is growing up. I have a small pool of loyal RSS subscribers, Google Analytics shows a steady flow of new visits coming in, and I've even been tagged to participate in a meme. Well, today it's official, because I've had an actual "advertising inquiry" e-mail.

Here's the text of the e-mail:

I’ve recently looked over your site and believe that your reader-base and visitors might be a possible advertising venue for us.

I am interested in traditional link advertising as well as using link “blurbs” on certain pages of your site, or on certain articles – perhaps even submitting articles. This includes but is not limited to purchasing a post also. We are open to any idea that would allow us to capture interested readers, but would prefer to avoid the traditional “Ads by Google” and “Sponsored Links” sections.

Please let me know if you’d be open to discussing advertising possibilities further.

Thanks in advance,
National Techmark
In August, Interesting Money wrote about an advertising inquiry of his own, and his response to it. I tend to agree with his view on this subject. I'm not against monetizing Loonies And Sense, but the idea of an advertiser "submitting articles" does not sit well with me.

What do you think? Have you received this sort of request? How did you respond?

I've come a long way

I just got back from taking a late lunch break. Today, for lunch, I decided to head down to the food court. All this recent talk about McDonald's double cheeseburgers seems to have gotten to me, so I treated myself to one of these burgers ($1.47 with tax) and a Tim Hortons coffee ($1.43 with tax).

As I sat enjoying my heavily processed guilty pleasure ($2.90 total), I suddenly realized just how rarely I actually buy my lunch these days. Six months ago, I was buying my breakfast virtually every morning, and eating lunch in the food court at least twice a week. Fast-forward to today: I eat breakfast at home and brown-bag my lunch almost every day, and every morning, I walk into work with a travel mug of home-brewed coffee. I hadn't even really noticed that I had broken my old habit, let alone building this new, improved one.

Sad to say, it doesn't look like my new breakfast and lunch habit will let me retire at 35, but the important thing is that I do not miss the old habit. Preparing a lunch (anything from leftover pasta to a simple PB&J sandwich) at home has simply become part of my routine, and pouring myself a coffee before leaving for work is one of the little pleasures of my morning. True, I'm sometimes tempted by fast food options on the way to and from work, but the feeling of positive change I get is far more significant than any "sacrifices" I may be making.

Until now, I didn't realize just what creatures are habit we really are. Well, I believe it now, and you can be sure that I'll be looking for ways to use this concept in the months ahead.

Monday, October 1, 2007

Exploring my NetWorthIQ chart

It just occurred to me that I have accumulated six months of month-end net worth data, all of which are captured in my NetWorthIQ profile. Here's the chart:

I thought I'd take a quick look at the trend that my finances have followed since the end of April.
  • May - The beginning of it all. A feverish focus on frugality, a three-pay month and an amazing month in the stock market led to a 75% increase in my net worth.

  • June - Vacation takes its toll. Debts were virtually flat, while May's cash surplus was eaten up by a trip to Illinois. Overall, net worth dropped by 1%.

  • July - Time for a correction. Debts dropped, while cash recovered from June's depletion, and retirement investments slid along with the rest of the market. Overall, net worth increased by 3%.

  • August - Back on track. Cash continued to grow, while the stock markets recovered. Throw in some debt progress, and you have a net worth increase of 31%.

  • September - Life goes on. Cash was depleted again by some car repairs, but market growth and debt reduction translated to a 12% increase in net worth.
Overall, my net worth has increased by 161% since April 30. A couple of things stand out from this analysis:
  • Huge returns are common when starting on a tiny base. When I've paid off results and added another digit to my net worth, I won't be seeing many months with 75% growth. However, for the time being, it's a great motivator.

  • Vacations deplete my savings. This is, on the whole, a good thing, as it prevents me from racking up debt. However, keeping a close eye on spending while I'm away on holiday should help reduce the impact of future trips.

  • With retirement savings comprising so much of my investable assets, my net worth is highly susceptible to movements in the stock market. Look at my May and August numbers. 'Nuff said.
It's encouraging to look at my overall progress, and to see that the chart is trending in the right direction. There will be stumbles along the way, but I'm excited to keep this upward momentum.

Canadian High-Interest Savings - A New Hope

In my ongoing effort to get the most for my dollar, I've written a couple of posts about the high-interest savings account options available to Canadians. I'm actually doing more than just writing: I currently have online savings accounts with ING Direct, HSBC Direct, Canadian Tire Financial Services and ICICI. My $755.31 Emergency Fund is split across these four institutions as follows:
  • ING: $453.63 at 3.75%

  • HSBC: $101.20 at 3.50% (becomes 4.05% October 10 4.25% October 11 - the date was my mistake, and the rate increase was updated this afternoon)

  • Canadian Tire: $100.26 at 5.50% (reverts to 4.0% in December)

  • ICICI: $100.22 at 4.50%
I use ING as my primary savings institution, so I'm most familiar with them, but I'm in the process of testing out the functionality of the other accounts, to determine where I find the best combination of service and rate. Today, I'll talk about the process of setting up an account with each of the four institutions.

ING Direct

The process was fast and simple. I filled out their online application, after which I was given instructions to send them a cheque (made out to myself), so that they could create a link to my chequing account. The cheque cleared my account in a few days, at which point I called in to activate the account and setup my online access. That was it; I was up and running, and could begin creating sub-accounts and moving money to and from ING. My initial deposit was held for five business days, but interest immediately began accruing the day they received the cheque.

Rating: 5 out of 5

HSBC Direct

The initial application process was straightforward. As with ING, after filling out their online application, I had to send them a cheque in order to create a link. Whereas ING's offices are located in Toronto, HSBC is located in British Columbia, so it took much longer for them to receive and cash the cheque. Once the cheque had been deposited, they sent out a welcome kit with instructions for calling in to activate telephone and online banking. After speaking with a representative, I had to login to telephone banking to enable web banking, at which point I was finally able to check my account online. The process was slow and cumbersome, and there seemed to be a substantial delay before interest began accruing on my initial deposit.

Rating: 2 out of 5

Canadian Tire Financial Services

The application process was fast and painless. As with ING and HSBC, sending in a cheque created a link to my chequing account, at which point they mailed me my welcome package. I had to call in to verify my identity in order to set up online banking, but this was a simple phone call with a very helpful representative. As with ING, interest accrued on my initial deposit from the date they received the cheque.

Rating: 4 out of 5


The process was very similar to Canadian Tire: submit online form, mail cheque, and wait for welcome package. ICICI sends the customer ID and web PIN in separate mailings for security purposes. However, the instructions they provide for logging onto the website are not correct. They neglect to mention that, before using the website, it is necessary to call in to have a representative activate your customer ID, at which point you can login and change your PIN. As with ING and Canadian Tire, when I logged in, my initial deposit was there, and interest had been accruing since receipt of the cheque.

Rating: 3 out of 5

Winner: ING Direct

In terms of opening an account, I would have to say that ING Direct has the most convenient process. They are the only institution out of the four that does not mail out a "welcome package" before allowing you to login to your account. With ING, as soon as my cheque had cleared, I was able to call in and activate my account. This is far more elegant than the other three, all of which essentially have an extra waiting period built in. Waiting for the welcome letter is the only knock against Canadian Tire; aside from that, their setup process is on par with ING. ICICI loses additional points for the misleading instructions in the welcome letter, and HSBC Direct is just too slow.

Next time, I'll talk about the website interfaces, and the process of moving funds in and out of the accounts.

September update

Well, September is over, and I'm awake. Interest has now posted to all my accounts, so I have a nice clean month-end review to provide.

First off, here's how I did with my September goals:
  • Grow my Emergency Fund to $750 - My Emergency Fund currently sits at $755.31. The $5.31 is interest accumulated since I began funding the account; the rest is all from actual contributions I've made. I'd say that qualifies as a goal met.

  • Grow my "short-term savings" fund to $500 - Current savings for our trip to Michigan are $502.41. With the Loonie as strong as it is, we should be in great shape. Check this one off the list.

  • Reduce my credit card/line of credit debt to $25,250 - My total revolving debt is currently $25,248.33, so it looks like I just managed to squeak this one in.

  • Write five productivity-themed blog posts - The less said about this, the better. 0 out of 5. I think this indicates that I really need to focus on this topic, as I clearly have room for improvement on the productivity front.
So, I basically nailed three of the four, and completely fumbled the fourth. Looking at which goals I met, it seems I place a very high priority on meeting financial goals, and less on the more qualitative "do something" goals. This should change. I know I have a procrastination problem, so I think I need to focus my "learn-as-I-write" approach and get this one figured out. Stick around; we will get there.

In addition to the specific goals I set for September, I managed to get all my RSP holdings transferred into my self-directed brokerage account, and I switched everything into index funds. I'll keep up my bi-weekly RSP contributions (with 50% employer match) into company stock, but I feel much better having a diversified portfolio. We'll see what kind of return I get over the next year.

Now, on to my month-end update:

Online Savings - $1,549.57
Self-Directed RSP - $40,226.95
Employer Group RSP - $655.08

Credit Cards - $3,002.34
Line of Credit - $22,245.99
Student Loans - $31,976.29

Net Investable Assets: ($14,793.02)
Net Liquid Assets: ($55,675.05)

My liquid savings dropped a bit, due to some expensive car repairs I had to pull out of my Freedom Account. However, through my regular contributions and a recovering market, my retirement savings increased substantially, leading to an overall asset increase of $649.45 this month. Debts are down by $1,006.48, so I had increases of $1,655.93 and $842.12 in my net investable and net liquid assets, respectively. My NetworthIQ profile has also been updated (including loose cash, home, car and mortgage).

Finally, let's get down some goals for October:
  • Grow my Emergency Fund to $975 (currently at $755.31)

  • Finish October with $75 in my "short-term savings" fund (currently at $502.41; essentially, the goal is for this amount to cover our trip to Michigan in two weeks, and not to rack up any new debt)

  • Reduce my revolving debt to $24,750 (currently at $25,248.33)

  • Blog once per week about productivity
I'm being a little stubborn about this productivity thing, but I really feel a need to focus on this. Let's see how it goes this month.