List of 2016 predictions

Feels like just few weeks ago we had to get used to dating things with “2015”, but the year 2015 is already over. It’s a new year upon us, 2016. What marvelous events will take place? What future trends we’ll discover?

Here are some of my predictions for the next year. You heard them here first, y’all!

 

MjAxMy04NDNiYjE3ZDk2ODc1MWYy_515ed000e8c87

 

Personal Finance and Little Money:

 

– More and more people will go into debt. Because we never learn.

– Real estate prices in major Canadian metros will continue to go up. While technically prohibited, lifelong mortgages loophole will be invented to allow young people to experience the joy of home ownership by buying a moderately used garden shed for just under $1M. Real estate agents will continue pressuring young people into buying by using “BUY NOW OR BE FOREVER LEFT BEHIND” bullying tactic. It will continue to work wonders.

– Student debt will go even higher allowing anybody to pursue higher education without thinking too much whether or not they’ll have a good return on investment in a form of well-paying career later on. Your next Starbucks coffee might be made by somebody with PhD in History of Animal Advocacy.

Continue Reading

Happy 20th birthday to our car!

Not an accurate representation of our car 39

It’s official – our car is a senior citizen

This year our car turned twenty. While 20 years might not sound like much when talking about humans, twenty years is pretty old when it comes to automobiles. Car years are quite similar to dog years. Usually, cars of this age are either sitting at salvage yards being picked for parts, or being driven by very fragile old ladies that can barely see the road over the steering wheel. Yes, our car is THAT old, yet I’m no old lady and do not live in a salvage yard.

 

Our car has a lot of history

Our car (and before me and my wife met – my car) has been places. It saw things. If it could talk, it would tell you stories like a Vietnam vet after you buy him a drink. It would tell you stories of empty highways, horrors of finding parking in Vancouver, breakdowns in the middle of nowhere, and police chases. I’d take the police chases stories with a grain of salt, but the rest is legit.

It has traveled far and wide. Our noble servant went as far as Winnipeg once, crossed the Canadian Rockies on the way to Calgary, and took us to Tofino on Vancouver Island. But for the most part it is our reliable way of getting to work day in and day out.

Continue Reading

How Going Green Can Help You Save Money

 

When someone tells you to “up your green game,” what do you think of? Do you imagine roofs lined with solar paneling? Do you think of a house that is completely off the grid? Do you start to panic, imagining how much turning your home into a “green” home will cost? Before you freak all the way out, here is some good news: going green doesn’t necessarily mean making huge costly improvements to your home.

For the most part, going green means making small changes, all of which save you money in the long run. Here are just a few examples:

 

Switch to Green Energy

 

It’s true: in many markets, switching to an entirely green energy plan may actually cost you more money, but that increase in cost is relatively small. Typically, if you live in a regulated market, upgrading to renewable power adds about $10 to your monthly bill–less if you watch your energy consumption (we’ll talk about that in a minute).

If you are lucky enough to live in a deregulated market, however, (like Texas, Illinois, Alberta, etc) you can shop around using sites like LocalElectricityCompanies.com for green power plans that will fit your budget. You might even be able to find a green power plan that costs less than what you’re currently paying for.

 

Use Less Power

 

Duh, right? Obviously one of the quickest and easiest ways to “green up” your home is to power it down as much as possible. Most families do this via simple habit switches like turning off the lights when they leave a room, adjusting their thermostats by a few degrees, etc. Here are some other things you can do to reduce your power consumption:

Switch to LED bulbs as your CFLs burn out. LED bulbs do cost more at the outset (at the time of this article’s writing, they are about $20 per bulb) but they are the most energy efficient bulb currently available. They use less power and last longer than incandescents, fluorescents, and even CFLs (and you don’t have to wait for them to “warm up” like you do CFLs). Over the course of a bulbs lifetime it can drastically reduce the amount of power you consume, thereby saving you hundreds of dollars in energy bills.

Invest in a Solar Charger or two. Solar chargers are primarily the purview of outdoorsy types; they’re a great way to keep devices charged without requiring heavy backup batteries, etc. They’re also quite popular with travelers who don’t want to worry about finding an outlet at the airport. You can also use them in your home to reduce your power consumption. Small chargers work great for cell phones and tablets. You’ll want a larger charger if you want to charge laptops or multiple devices at the same time.

 

Grow Your Own

 

Yes, we know: not everybody has the yard space for a large fruit, veggie, or herb garden. Some of you live in tiny spaces with no yards at all. Guess what: even if you live in a tiny apartment, you can still grow a few things. Herb gardens, in particular, work well on window sills and in small containers. Growing your own herbs and, if you have the space for it, produce saves you tons of money at the grocery store. It reduces the number of trips to the store you have to make. It can also, if you’re growing your herbs and produce inside, improve the air quality of your home. This improvement reduces the burden on your air filters and HVAC system, making it cheaper and easier to maintain.

PRO TIP: Set up a compost pile or under-sink worm bin so that you can fertilize your plants organically with your own compost instead of spending lots of money on compost or fertilizer from your local nursery.

 

Water Harvesting

 

Yes, you already know how to take a military styled shower and are already doing that in an effort to reduce your water consumption. You also only wash full loads of dishes and laundry. Guess what: there’s more you can do. Saving your gray water (the water that collects in the tub while you’re rinsing off, and that flows through your gutters when it rains) and pure rainwater is a great way to reduce the amount of water you access via the municipal supply, which reduces your monthly water bill. Setting up rain barrels is relatively simple and cost effective and while you shouldn’t use gray water for cooking, it does have many other uses around the house.

It might sound silly, but the greener you can make your home, the less you will spend on everything from utilities to grocery costs. Use these tips to help you green up your life!

 

Back with a vengeance

Well, hello there!

 

tumblr_lzacc4A2XF1qcwrtdo1_500

 

Have you heard the good news?

Honey Boo Boo is back, and now she sings. Also, I think I’m finally getting to the point where I have free time to amuse you and two other readers with my thoughts about life, money, bagels, and things that annoy me.

It was inevitable like your friends starting to have babies. It was unavoidable like a conversation about Breaking Bad at a party. It’s fall, it’s here, and summer is finally over! Hello, spare time!

1. The summer was extremely busy in terms of work, which feels fantastic. I haven’t crunched the numbers, but I feel like it was our busiest year to date. Some projects were fun, some projects were a complete nightmare, but overall I think we did well. Hooray, we actually might be in black!

2. After several years of studying, Mrs. Financial Underdog finally finished school. Just few weeks ago she’s received her professional designation as a Chartered Professional Accountant (CPA). She’s been on the road to this for a number of years ever since she’s immigrated to Canada. Hey, it’s nice to have somebody in our household who actually graduated from school.

3.  Good god, I need to finally organize my blog. It makes amateur bloggers look professional.

4. I haven’t been paying attention to investment news for quite some time, but we’ve been behaving ourselves and staying within our budgets and diligently putting away 35% of our income away towards future investing just like we’ve planned for this year.

5. I’m very much looking forward to reconnecting with personal finance community on Interwebz, blogging on a regular basis, and yet again completely astounding you with my wisdom and expertise.  I know my expertise mostly revolves around “Have you ever noticed …” jokes and fun facts about food, but nonetheless!

So, what’s new with all of yous? Hit me with some news of your own!

In case you’re wondering if I got hit by a bus …

… Don’t worry, I’m perfectly fine. I’m just taking a little break

1. Things are getting crazy at work. Summer is a money-making season for small businesses such as mine, so we have to soak in as much as we can get. Strike the iron when pretty girls are looking at you … I mean when it’s hot.

2. I’m currently dealing with some health issues and looking for treatment options. While it’s nothing life threatening, but it’s still time consuming to visit doctors, do my own research because I don’t trust most doctors, and then agree with doctors since they were right all along. Hopefully this gets settled some time soon, so I can move on with my life.

3. I’m currently brewing a post on how childhood affected me as a consumer. Does anybody have any personal insight into this? Would be great if somebody could share some info on how their childhood shaped them into a minimalist or the other way around.

I’ll be back shortly, and I hope everybody is enjoying summer while kicking ass at work. Or school. Or just kicking ass in life.

Yours Truly,

Financial Underdog.

Paying off mortgage like a boss!

As I’ve mentioned previously, we just went through a process of refinancing our home. Now, to a normal person this is a rather joyless occasion because it doesn’t really change anything. But to a financial nerd like me, this is just another excuse to crunch the numbers and play with scenarios.

Think about these scenarios as traveling through time. What will our lives be like when we’re completely debt-free?

 

Great news about paying off mortgage!

 

… is the fact that we’re finally making a dent in this mortgage of ours. Yes, I know mortgage in French means “thing you have till you die” or may be “herpes”, but after 5 years of making payments we’re seeing the difference and perhaps a glimpse of light at the end of the tunnel. Now we just have to make sure that the light isn’t an oncoming train.

When we first got our mortgage, it came with a bi-weekly payment of $495. Every year or so, we’d increase the payment by 10% till the payment increased to $658. The extra payments would go towards the principal and slightly speed up the process of paying off mortgage. Extra payments coupled with a healthy downpayment made a nice dent in the mortgage by the time we had to refinance 5 years later. The amount of money we still owe is $195,000 (price of our home – $285,000)

Another great news is seeing how much of our new payment will be going towards the principal. On original payment of $450, huge chunk of it was interest. By the time the payment grew to $658, it was a bit less than a half. New payments consist of roughly 30% interest and 70% principal repayment. And that means more and more of our money going towards principal and less towards banks’ profit margins and their nice furniture. Take that, banks!

 

Paying off mortgage

Paying off mortgage

 

Bad news!

 

Paying off mortgage is hard. We’re still not even half way towards repaying it. We’ve paid $285,000 for our home, and the mortgage is barely under $200,000 right now. It’s a bit depressing to think how much we still have to pay towards it. I want us to be debt free yesterday! I want us to keep the money we’re throwing at the mortgage in our bank account to enjoy it, not hand it over to some big corporate bank! Trust me, the quality of life for me and my wife comes first before that of banks and banks’ shareholders (sorry, dividend investing bloggers).

So, I’ve said to my wife: “- I hate our mortgage!”

And she said”:  “- Hey, so do I!”

And then I said: “- Hey, I’m glad we finally have something in common!”

Then she gave me THAT look, and I’ve decided to proceed with our options:

 

Continue Reading

Canadian Exempt Market Investments – Friend or Foe?

Exempt Market Investments 2

Note to reader: This started as a short blurb on the subject but I just kept adding and adding more information to the point of this becoming one of the longest posts I’ve published to date. I get excited like this sometimes 🙂 Overall, I think this provides everything one would need to start their research on Canadian exempt market investments. Here are the key things you’ll learn in this post:

– What are exempt market investments?

– Examples of typical exempt market investments

– How you can become an investor

– What are the risks associated with alternative investing

– What are the benefits 

– Some exempt market investments I’ve put my personal money towards.

Hopefully it will give you something to think about. Feel free to ask me questions by commenting! 

 

What are exempt market investments?

 

If you ask a person next to you about investing, they’ll mention public stock markets like NASDAQ or NYSE. They might mention mutual funds or index funds at the same time. More advanced investors will mention hedge funds or initial public offerings. If you happen to be talking to me, I might talk about stockpiling pretzels for the upcoming food crisis caused by zombie outbreak as a form of investing – but that’s what you get for talking to me.

If you’re somebody who is interested in investing your hard-earned money and live in Canada, sooner or later you’ll run into an interesting world of exempt market investments. Exempt market investments considered to be an alternative type of investing as opposed to traditional public stock markets.

Years and years ago, alternative investments were not accessible by everyday investors and average people. They were specifically reserved for institutional investors (corporations, pension funds, financial institutions, etc.) and individuals with high net worth and connections to the right people. But just like investing on the stock market became extremely accessible to everyday folks, exempt market investments are accessible now to “regular people” like you and me.

Exempt market investments are not a small niche market. In fact it’s huge and worth billions of dollars in Canada alone. More money is raised through private equity investments than through traditional stock exchanges. The question is – should you even consider touching these investments?

Continue Reading

The Joy of Refinancing

Just around five years ago, we’ve bought our little home. Five years ago we’ve signed on the dotted line and became proud owners of our own townhouse. For young immigrants like us, it’s kind of a big deal. For somebody who had a negative net worth and was completely broke just few years prior to this, it is even a bigger deal.

Surprise-surprise, I haven’t won the lottery since then, so the mortgage is still with us five years later; which isn’t at all this surprising given the fact that I never buy lottery tickets. So, our mortgage is up for renewal, and we’re getting ready to sign the refinancing documents.

 

 

2164

Continue Reading

Rent vs. Own – Five Years Later

In case you haven’t noticed

 

I happen to be a financial nerd. When normal people go to Costco to buy some shampoo, they usually pick whatever brand they prefer or whichever smells better. I, on the other hand, start instantly calculating the amount shampoo units that can be acquired per dollar thus finding the best deal. Not really because I want to save money, but I want to compare things in financial terms as opposed to brands. Heck, I’ve calculated how much money I’ve spent on cigarettes back when I used to smoke and how much it cost me overall. I’ve even calculated return on investing into a shaver and shaving my hair as opposed to getting my hair cut every month (13,940%, risk free).

So, with our 5-year mortgage term coming to an end and going through a process of refinancing, I wouldn’t be me if I didn’t calculate what was more beneficial to us – renting for 5 years or putting money down on our own home.

Rent vs. Own is one of those topics people will never get tired of discussing. Just like movie buffs keep arguing whether or not Han Solo shot first and truck enthusiasts keep knocking Ford against Chevy, people interested in personal finance will never get tired of discussing buying your own place vs. renting.

But discussing things in general ain’t no fun. It’s also quite pointless because everything depends on your own situation. So, I’ve actually crunched some real measurable numbers using these five years as an example to figure out whether or not we’ve lost money on our home purchase.

Continue Reading