“English”
“Customer Retention”
“I’m planning to switch to Bell HDTV. What can you offer to keep me?”
“Free HD PVR rental for 2 years and $10 monthly credit for 1 year? Sold.”
Feel free to use this template to save yourself $718 like we just did!
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Change in value of 29 select financial firms over the past 12 months. Excerpted from Michael Berry’s morning notes. We personally have lost some money on paper, but have also invested in the past week while things have been “on sale”, in preparation for the launch of the Tax-Free Savings Account (TFSA) on 1-Jan-08. Don’t wait until the end of 2009 to start your money working for you tax-free, plan to max your TFSA right away! Our plan is to max our TFSA at the start of each year ($5k per person), and buy a basket of medium-risk stocks or income trusts spread between a few sectors (real estate, power generation, oil, financial) that pay out reasonable yield (>5%, preferrably >10%), and a) long-term collect tax-free income, but b) short-term use dividend re-investment (DRIP) to purchase additional shares each month/quarter to compound our returns until we are ready (or need) to switch them over to generating cash. In 5 years, assuming no more than one or two of them crater, they could be throwing off quite a bit of cash! Now if only they would introduce income splitting for people younger than 65 …
October 3, 2008 - 2:03 pm
dan, could you break this tfsa thing down for me?
October 3, 2008 - 2:44 pm
Hi Lis, Sure – here’s the expanded version. The TFSA, like the RRSP, is just a “shell” that you can put investments in. RRSP contributions are “before tax”, in that you get to reduce your taxable income by the amount of your contribution each year. Money grows inside tax-free, but then withdrawals are taxed as income when you eventually take $ out, hopefully during rtirement. TFSA’s are “after tax”, as they don’t generate a tax deduction. However, any withdrawal you take is tax-free. So you could just put your TFSA $ into a high interest savings acct and make 3% tax-free. Or you could buy gold bars or mutual funds, hope they go up, and sell them tax-free in the future. I argue the best use of these is to buy high yield invesments like income trusts and bank stocks that have DRIPs (where the monthly or quarterly dividends buy additional units commission-free), so your investments compound tax-free until you need the income. Then you turn off the DRIP, and instead of buying additional stock each month or quarter, you take the cash out tax-free each month. Of course, the drawbacks are that you have to find the $ to put into the TFSA in the first place, and the risk is that the stocks can go down in value, or reduce or stop paying dividends, which is why you have to diversify and keep an eye on them, but the potential for income generation is huge. If you’re diligent and put in your $5k each year ($10k per couple), each year’s money could earn you ~$80 per month (assuming you find something that yields 10%), before compounding. That’s $400 per month after 5 years (again before compounding), assuming dividends aren’t cut, stocks don’t crater, etc. And that’s tax-free. To take home an extra $400 a month after tax, you’d have to make ~$10,000 more a year at your job!
October 3, 2008 - 7:12 pm
I think I may have missed out on the Fullerton investment gene. *sigh*
October 6, 2008 - 7:47 am
I hope Jaia inherits the gene from Dan, because this Fullerton is also lacking in that department so she wouldn’t be getting any financial know-how from me.
November 14, 2008 - 5:31 pm
Hi Dan, I have the same plan, I want to invest 10% of my household income in CIBC, BMO and Scotia (because they offer DRIPs and SPP), I want to put those shares that I buy every month in a TFSA and I want the fractional shares that I would be getting from those DRIPs to be added to my TFSA so that they grow in a tax free enviornment and that these fractional DRIPs don’t impact my $5000 limit. I explained this to a financial advisor from IG and she said I can recieve into my TFSA the dividends as cash but not as shares! Whats the difference if I get X$ in dividends or X% of a share instead? But she insisted it can’t be done. How are you setting yourself up to have your DRIPs grow in your TFSA? Thank you       The other day Dan was making dinner and I was sweeping the main floor. Jaia was in between the kitchen with dad and the living/dining area with me, dragging her giant Elmo around by his leg. Suddenly she stopped at a photo on the side table beside the couch and leaned in to get a better look. It was one from our wedding, one of my very favourites. She points to it and after a few seconds says “pretty Mama”. I melted into a puddle of mush right there on the floor.
October 2, 2008 - 10:36 pm
Aw.. that is the cutest! When we bought our house, one of the huge bonuses for me was the giant, beautiful tree in the front yard. I remember standing there marveling at it while the home inspection was going on, ignoring the house completely. At the time it was early spring and the leaves on only just budding. I knew that tree would be big and vibrant in only a month or two. I never once thought about fall. It never crossed my mind that my giant, beautiful tree would succumb to the cooler temperatures that September brings. At the time it was months away and we still had summer to look forward to. But suddenly, the other day, we came home and noticed a few leaves on the lawn. And then, only a few days later, this:
I tried to make a game of raking the leaves. I thought Jaia would enjoy it. And enjoy it she did. I raked all the leaves that covered our front lawn and driveway into two piles which she jumped in, ran through and chased Humphrey around. It was an awesome way to spend a couple of hours.
But thankfully I wasn’t too serious about the raking because by dinnertime, the lawn was covered with more leaves than before I started just that afternoon. Lesson learned: Wait until the tree is completely naked before raking. Unless that is, you have a little bean who thinks messing around in the piles is better than Christmas.
September 30, 2008 - 12:45 pm
It’s so funny, I hardly knew fall was coming upon us – we have like no leaves! hehe.. Gosh -Jaia just keeps getting bigger and cuter with every picture! … as in, sometimes there *is* such a thing as a free lunch. Our new house had a manual thermostat, which looks like it significantly pre-dated the 1993 construction date of our house. Perhaps they were fans of antique HVAC? Anyway, it was one of the things added to my mental list to replace on our first walk through the home. Programmable thermostats are perfect for forgetful people like us, as you set it once and then never have to think about it again, unless you leave on vacation or the season changes. They save you money too, as you are able to reduce heating/cooling costs when you aren’t home during the day. They can cost anywhere from $50 to $200, so there’s a certain payback period but the convenience is worth something too. So imagine my delight when I heard a radio ad for the peaksaver program, wherein our utility (Hydro Ottawa) will come and install a free programmable thermostat in your home, and give you $25 cash for your troubles! The catch is that, in the summer, they can remotely increase the temperature of your home by 2 degrees C for up to 4 hours, in order to reduce the load on the power grid and avoid blackout/brownouts. An additional bonus is that we, too, have access to the remote control feature of the thermostat, so if we forget to turn it down before vacation, we can log in and adjust it online. If you already have a programmable thermostat, I can understand not bothering to replace it with another one. But if you live in Ottawa, have a manual thermostat, and like free things, then call now!
September 30, 2008 - 12:25 pm
If only we could remotely feed the cats if we forget to do it before we leave on vacation.
October 3, 2008 - 10:28 am
Dan, I’m assuming that Direct Energy will “increase” the temperature of your house in the summer and not reduce it. Reducing people’s home temperature in the summer to reduce the load would be a poor policy.
October 3, 2008 - 10:38 am
Using my uncanny editing superpowers (obtained back in high school when I was bitten by a radioactive spider), I have made your comment both irrelevant and nonsensical. Take that, dastardly evildoer! Tune in next week when I will take on another snarky commenter with my trusty sidekick, SuperHumph! |
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Chris - Nice! That’s an awesome deal.. the Bell HD PVR is sweet too. Light years beyond the piece of crap that Rogers is still flogging.
Dan - Hey Chris,
Actually, it was Rogers that bribed us to stay, so no slick dual tuner PVR for us.
Hopefully we can swap it out when Rogers refreshes their hardware offering …
Chris - Hahahaha.. yeah, i realized that after I posted the comment. Ooops. Disregard most things I say.. none too bright over here.