Wee haw!

So I just got off the phone with Mastercard as I decided that there was really no benefit from me having the fees associated with my card anymore. I was paying $99 a year to have the gold air miles Mastercard, and I was also $35 a year to have the lower interest rate from 19.5% (holy shit!) to (12.9%).

This may seem silly to some as such a small amount ($35) to have a 6.6% difference in interest, but I see it beneficial for a few reasons:

1. not to carry a balance! I’ve worked hard to get the damn thing paid off, time to keep it that way. If I want to have something, save up for it!
2. saving $134 a year to have a Mastercard which likely isn’t going to carry much of a balance from here on in seems stupid and a waste of money.
3. that ridiculous interest rate of 19.9% is scary to me, it will make me very conscious of anything I put on my Mastercard.. saving is very much physcological I’m finding.

So yah, I’ll be doing a budget update soon as well.. but if you don’t carry any balance on your Credit Card(s), maybe it’s a good idea to find out if you’re paying any fees on them as it’s just a waste of money. Oh, and if you have more than one credit card.. you’re stupid.

Related posts:

1. Just DECREASED my Credit Card Limit.
2. 75 Ways to Save Money – Every Single Month
3. Forget about my paltry debt.. how about a single charge of 23 quadrillion?..

Anyhow today – July 14th, I’m going to try to give up my morning coffee. There are a few reasons that I’m thinking about doing this but mainly it’s that I think it’s become a habit which I don’t really think is doing anything for me, and I think I could be consuming other things (water maybe?) that would be more beneficial.

Before I give up coffee however I did mention during one of my last posts that I was going to find out how much we pay for our morning coffee’s as opposed to buying one from Tim Hortons or Robins every morning. Well, it was June 21st when we bought and started using the can of Tim Hortons regular grind for our french press, we ran out on Monday – giving us a total of 3 weeks on one can. Of course I almost have to subtract a week there due to the fact that I was in Moncton and Liz was at the Cavendish Beach Music Festival so those were days that we weren’t able to consume any – Instead what I’ll do is just convert it to days and then cups. So 3 weeks is 21 days – multiply by two in order to serve us both with coffee is 42 cups – but then take away I’d say 8 days that we didn’t drink coffee (at least not from the french press).. so a semi-approximate number of cups from the can would be 34. The coffee costs about $6 to purchase… works out to paying about $0.17 a cup.

How’s that for a good money saver?

Ok, so back to the topic at hand. I finished reading a rather lengthy article on the effects of coffee (both good and bad) and it’s pretty much a known fact that after awhile coffee does nothing for you if you drink it every day. It just becomes habit – which I don’t like having, especially non-healthy ones. It’s also sort of a known fact that I will likely get a headache and experience withdrawal symptoms over the next 10 or so days if I don’t have any coffee as well – I’m not looking forward to this.

I started this afternoon, and instead of going and getting a coffee – I hoofed it down to the Clover Farm on my break and was a little surprised when I picked up 3 apples and went to the checkout – cost of $3.29 total! Ouch!! Maybe this isn’t such a great idea??? I actually put one back since I only had $3 on me – and I can tell you that it certainly didn’t last as long as a coffee either. Well, the good news is that apples are a natural fat burner, and obviously better for me than coffee. I will try to research some healthy alternatives – but in the meantime I’m not looking forward to the headaches that I may get while not drinking coffee.

Related posts:

1. Beer For Breakfast …
2. I’m feeling very French today..
3. Do I Need Coffee Yet?

To the topic of this post, a conversation started at dinner Sunday night which I thought was a very interesting fact – and I hadn’t thought about it before then. It was the relationship or how similar coffee prices are getting to beer prices.

Large Double-Double at Tims – $1.68 (generally)… 1 bottle of beer ($20.99/12) $1.75. What’s scary is that my Robins coffee over in Stratford is actually $1.71 (why they would be more than Tim Hortons is beyond me..) Anyhow, so there is less then 10 cents difference between buying a beer at the liquor store and buying a coffee.. HOW RIDICULOUS IS THAT?! If you wanted to get really technical.. you can take back the bottles for beer and get $1.50 back for a dozen.. yeah, so that means that you’re paying only $1.62 for a bottle of beer.. which makes it CHEAPER than coffee!

If you wanted to talk about markup.. wow!! At least the ingredients in beer makes you think that some magical formula was created over time to make it taste so great. You’ve got barley, hopes, yeast, water, sometimes spices.. you need to ferment and you need to be extremely careful in the creation of the beer. Coffee ingredients?…coffee beans.

I don’t know the exact amount Timmies and Robins have marked up the price of their coffees, but you better believe that they have it set at an amount that will keep you buying, but still not scare away too many customers. Let’s say a pound of coffee today costs $9.00 give or take – that’ll make 30 cups of coffee.. yeah so that’s around 30 cents a cup. And they charge $1.68 for it.. which is over 450% profit margin (not including wages, etc). Holy smokes!! Do I EVER want to get in on that business right?? Well, why do you think they have a Starbucks, Timothys, Robins, Second Cup, Great Canadian Bagel, Tim Hortons, Beanz, etc all within about 30 seconds walking distance from each other downtown here? And that’s for a Tim Hortons coffee.. can you imagine the markup on a Starbucks?

Like I said before, at least with Beer you’ve got a bunch of different ingredients and you know that it takes some skill and effort to make that beer and replicate it over and over and over again. Yes, the markup is likely huge on beer as well, but certainly not the crazed amount coffee is.

Obviously we, the consumer can combat these prices by purchasing our own coffee – buying our own, bringing your own cup, etc. For myself and Liz, I calculate that we get about 2 weeks of morning coffees (made from our french press) for about $6.00 – that’s 14 coffees or about $0.43 a day each. I’t may be more or less than 2 weeks but I’ll know for sure soon as I have to rebuy a can today so I’ll know how long it lasts.

I still need about 4 cups this morning after the weekend though.. wow.

PEI Liquor Control Commission Latest Prices

Related posts:

1. Wish Me Luck – Going To Try Giving Up Coffee..
2. Easy way to save money? Bring your own coffee cup in the morning!
3. Are you a coffee lover? I know I could use some right now..

My first update was back in June 2009 and at that time I told myself that I was 12.07 months from being out of debt (keep in mind this is line of credit and credit cards – obviously not mortgage). As with most things, there are obstacles along the way – and with my budget there certainly were some obstacles (Hunters surgeries being two fairly large ones!).

My next update was in July 2009 and at that time I was 9.85 months from being out of debt. Pretty darn good,I can’t quite remember what I was able to do to decrease the amount of debt as quickly in a month – but obviously I had a very inexpensive month.

In September of 2009 I posted another debt repayment update and although I didn’t post how many months were left on my debt, I did post that I had paid off over $3700 of my debt. It’s funny how you accumulate debt by buying things that you want or need to have or purchase, but it’s always such a pain in the neck trying to pay it off eh? In September I had 7.5 months or so left – so I was right on track.

Then came January 2010, which was my last update I’ve posted on my debt repayment. At that time I had paid off $6118 of debt which (at the current pay-off schedule) left me with 6.18 months left to try to get myself out of debt. This was after one of Hunters surgeries (he needed two) and the reason that I mention this is that each surgery was well over $1000 to perform.

This bring me to my update today.. I will call this the May 2010 update since it really doesn’t include June yet.

I am absolutely elated to report that I have paid off almost 82% of my debt since I started almost last year to the day!

Yes, you read that right – Now having said that, I did have a few ‘extra’ payments in there on my debt which I hadn’t originally put in the budget – namely my tax refund which I posted about.

I am so close to being out of consumer or “bad debt” that it’s starting to get exciting. According to my budget schedule – I’m 2 months from getting rid of it. Wow.. what a year!

I can’t wait to write up a wrap up post on how long it took me, how I did it, what changed, what I’m going to do now, etc.. All I know is that whatever the hell I’m doing – it seems like it’s working.

Related posts:

1. I Made It To Payday! Budget Update for January 2010!
2. Budget Update – July 2009
3. Budget Update – End of September

I found a post with 75 tips to save money in a down economy, and there are some which I think I’m going to look more into, such as:

1. Switch to cloth napkins.
2. Just say no to social events, or agree to meet after dinner.
3. Have a no-spend weekend.
4. Carpool a few times a week. (yep.. I’ll be talking to you soon about this Liz )
5. Shop for clothes on eBay. (this tip is great.. check it out as tip #71)

There are lots of other great ideas on the site as well, one of which is to close the blinds to save money on heating, just a great site all around. Check it out.. especially these 75 tips.. some of them are very well unique and easy to do.

Related posts:

1. Good for the weekend.. 9 awesome ways to save on groceries.
2. I Plan Meals Ahead To Save Money & Food..
3. No Credit Card Debt? Time To Save More Money..

I filed my taxes last week via Netfile, and generally the turnaround for the cheque to come in the mail is around 2 weeks (if I remember well). Originally, and up until today.. I was thinking that the best way thing to do would be to put it on my line of credit, now.. I’m not so sure.

It’s a sizable amount which would definitely put a dent in my line of credit – but I have to think longer term here, and I have to think realistically. You see, I’m really good at paying off my line of credit lately when I get a chance. Every spare few dollars I have is going on there, I’m living fairly frugally in hopes that I’ll get it paid off sooner than later. That said.. the whole point of the Smith Maneuver is to pay off the mortgage with the tax refunds , as well as build up a portfolio of equities and investments in order to have a great head start when it’s time to retire. So now I’m stuck.

One one hand, I think the sooner that I get the LOC paid off the more I’ll be able to put down on the mortgage and get it paid off faster – on the other hand, I’m thinking that as soon as I DO get the LOC paid off, I’ll likely end up driving it up a bit again taking a trip or something and being back at square one.. but will I do that after having paid all of that debt off?

I think I’m going to need some assistance in this decision – hopefully I get some quality comments to aid in my decision as I search the net for answers.

Pay down debt vs Pay down mortgage… which to choose?

Related posts:

1. Free Money! Make your Mortgage Tax Deductible – Intro to the Smith Manoeuvre
2. Debt Repayment Update – May 2010
3. No Tax Reductions On My Main T-4 .. Len = Bummed

Mind you, I’m not in the depressed state of mind I was that fateful Tuesday since I have a little bit more spending cash then I did during the last pay period – but not much. I’m fine with it actually, it teaches me that I can stay at home – watch movies – and try to be creative when getting something to eat every day. We have LOTS of food in the freezer and dry goods in the cupboards, why not try to use them up!

Should also mention that I was able to go see one of my favorite band on Wednesday night too! So that came out of the little I had the two weeks prior, but truthfully that wasn’t too bad either since myself and Liz split the costs pretty much down the middle.. $40 for the tickets (each), I paid for the bridge ($42.50) and then I paid $40 or so for the meal we had (Liz paid for the gas since we went in her car and also some of the meal.. she’s really great that way). Wait.. there was also the fact I had to buy a concert t-shirt too ($35 for it may seem ridiculous .. truth be told it is.. but I try to get one at every good concert I go to.. and this concert was definitely worth it).

I’m actually just really excited that I didn’t (and haven’t for some time) had to dip into the Line of Credit or any Mastercard credit in order to go from week to week, and my savings are increasing as a result.

This leads me to my Budget Update. I blogged before about my financial status and of course the last time I wrote about it was back in September where I’d written that I’ve paid off over $3700 in debt since I started sinking my teeth into it. As of today, with no major bills (I don’t want to go into the fact that my boy was limping on his OTHER leg today) – but as of today I’ve put a dent in the amount of $6,118 onto my debt!

I’m EXTREMELY impressed with myself for being able to do this, but it hasn’t come easy. I’ve pretty much given up poker with only one exception per month.. and I’ve also really focused on being smarter with regards to eating out, etc.

That said, I’ve also been able to pay off  that $2418 since September with Christmas as well as Hunter’s major AVC bill paid for! Very impressive I think… but I’m far from done. You are going to see one big celebration when that line of credit amount gets down to zero that’s for sure.. and that’s my goal.

*UPDATE*

Well since I didn’t want to mess around with Hunter’s recently operated on leg being the only one he’s putting weight on, I called the AVC and have an appointment on Monday. Here’s to hoping it’s nothing huge!

Related posts:

1. Debt Repayment Update – May 2010
2. Budget Update – End of September
3. Budget Update – July 2009

I just took a peek at my paystub and started deducting the bills that I have to pay for the month.. wow. Talk about a kick in the junk. Good thing we have a lot of leftover food in the fridge cuz I’ll see you next paycheque! All told I think I have just over $100 to spend the next two weeks.. BOO!! I guess that’s motivation to sell some stuff on UsedPei or Kijii.

The sad part about it, is that being online and at a computer working all day, I get to check out every good sale that comes up online and sometimes these darn things seem soo tempting! Today for example, I took a look at buy.com’s weekly sale and they’ve got 4 gigs of memory (RAM) which is the maximum Windows will recognize (unless you’re running 64bit version) on for $81.99. That would be a MAJOR upgrade to anyone’s computer for sure.. but BAH! I gotta stop looking at that stuff.

I guess I’ll have to start watching a lot of movies and touching up a lot of pictures which I had planned on doing anyhow instead of heading out on the town on the weekends or mid-week shopping. But now that I think about it, that seems very do-able.. after all, I have to be around while my boy recovers from his surgery. .and I have lots of wine, and movies.. what else do I need?

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look at the 3x.. now imagine 100x!!

Kelly Capital is proud to announce on Friday the 13th the world’s first pair of 100x leveraged ETFs: Kelly Daily Nasdaq 100 Bull 100x Shares (SOAR) and Kelly Daily Nasdaq 100 Bear 100x Shares (SINK). The investments seek to replicate, net of expenses, 10,000% of the daily performance of the Nasdaq 100 Index in the case of SOAR, and 10,000% of the inverse daily performance in the case of SINK. The funds will invest at least 80% of assets in securities that comprise the index. They will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The funds are nondiversified.

“These are intended for attentive traders only,” said Kelly Capital Chief Executive Officer Jason Kelly at the press conference following the launch party in New York City. “The extreme leverage employed will cause both funds to go bankrupt within the course of most trading days. However, those paying attention during the day will be able to maneuver in and out of the funds before they crash to zero.”

Kelly Capital will reset and relaunch the funds at the beginning of each trading day. The company is in talks with the Security and Exchange Commission (SEC) about the possibility of relaunching the funds after lunch should they go bust in the morning session, but the SEC is balking. SEC spokesperson Ben Meriwether remarked, “We recognize the right of investors to employ as much leverage needed to find fortune or ruin in a day, we just aren’t sure of the need to extend that right twice per day.”

Kelly thinks the SEC will come around to his firm’s way of thinking on the issue, but is happy for now that investors will have access to the funds at least once per day. “Investors these days aren’t content to wait years for returns on their investment. They want to know the outcome as quickly as possible, and at 100x leverage our products currently offer the fastest investment outcomes.”

Connecticut-based investment research firm Evanescent Lucre monitored a paper trade in SOAR during yesterday’s market. From its report: “On Thursday, November 12, 2009 the Nasdaq 100 Index fell 0.17% in the first 10 minutes, rose 0.62% in the next 20 minutes, fell 0.45% in the next 20 minutes, rose 0.28% in the next 30 minutes, and fell 0.61% in the next 40 minutes. On that same path in the market’s first two hours, SOAR fell 17%, rose 62%, fell 45%, rose 28%, and fell 61%. By 11:30 a.m., a $10,000 investment was worth just $3,692.”

Asked to respond, Kelly reiterated that timing was critical. “Getting out after that first 62% rise was the key, in this example, and people savvy enough to use our products are likely to know that.”

Kelly said in addition to quick results, the new ETFs offer two fringe benefits: a shorter trading day for most who use them because the action will be over before lunch, and excellent tax write-offs at the end of year for those who realize they need them. “We’re focused on families, and shorter trading days gives traders more time to spend with their families. The instant tax write-off feature is very useful in the last trading days of the year when some people realize they need an efficient way to vaporize some of the year’s profits.”

Kelly Capital has filed with the SEC to grow the line of products to cover other indexes and asset classes at 100x leverage. “However,” Kelly noted, “once the leverage gets high enough, you really don’t need a wide range of products because any underlying index will produce the tiny amount of fluctuation needed to move the product price. Traders won’t care whether the slim 1.00% band of possibility they have to work with comes from the Nasdaq 100, the Nikkei 225, or the Dow. It’s all just movement, after all.”

This entire article is false and is intended to be satirical… what’s even more interesting is the post that follows up the preceding one.

Last Friday, I posted a satirical article called First 100x Leveraged ETFs. It made fun of the trend toward higher leverage among ETF products. First we had the doublers (2x), then the triplers (3x), and I projected what would happen if we got up to 100x, which is 10,000% the return of the underlying index. I used the bogus symbols SOAR and SINK for the two fake ETFs mentioned, the former following the index at 100x and the latter following the inverse of the index at 100x.

The article was clearly sarcastic, written in the style of The Onion, as the following excerpt shows:

“These are intended for attentive traders only,” said Kelly Capital Chief Executive Officer Jason Kelly at the press conference following the launch party in New York City. “The extreme leverage employed will cause both funds to go bankrupt within the course of most trading days. However, those paying attention during the day will be able to maneuver in and out of the funds before they crash to zero.”

Kelly Capital will reset and relaunch the funds at the beginning of each trading day. The company is in talks with the Security and Exchange Commission (SEC) about the possibility of relaunching the funds after lunch should they go bust in the morning session, but the SEC is balking. SEC spokesperson Ben Meriwether remarked, “We recognize the right of investors to employ as much leverage needed to find fortune or ruin in a day, we just aren’t sure of the need to extend that right twice per day.”

Kelly thinks the SEC will come around to his firm’s way of thinking on the issue, but is happy for now that investors will have access to the funds at least once per day. “Investors these days aren’t content to wait years for returns on their investment. They want to know the outcome as quickly as possible, and at 100x leverage our productscurrently offer the fastest investment outcomes.”

To my dismay, a deluge of email poured in from investors, many of whom wanted to buy either SOAR or SINK. I categorized the responses by type, and came up with these rounded results:

• 10% Thought I should stop joking around and get back to work
• 20% Loved the humor and wished for more
• 15% Wondered which I thought better, SOAR or SINK
• 20% Complained that their broker didn’t offer either
• 30% Wanted me to let them know when the ETFs were available
• 5% Were pretty sure they already owned the ETFs…somewhere

A full 65% of people expressed an interest in owning products that would “go bankrupt within the course of most trading days.” A stunning 5% thought they already owned them. Only 30% of respondents got the humor.

With results like these, no wonder investment companies can foist off just about anything on investors.

While I know there are a lot of you out there that don’t know what a leveraged ETF is.. for those who do.. this is really quite unbelievable.

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1. Do Your Research Before You Buy Your Stocks
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• save 10% of your paychecks, and do it automatically (so you don’t have to do anything)
• growth + saving + time = wealthy (don’t try to get rich overnight or in a year.. it takes time for compounding to work)
• pay yourself first – this one is actuallysimilar to the first bullet, but it’s just pointed out often that it’s important to save first.. pay bills after (odd.. but true)
• pay off debts and stop carrying a balance with your credit card

Anyhow I’m sure there are more that I’m missing, but those are the main themes I see throughout the books. I just finished two books, the first being Pay It Down!: Debt-Free on $10 a Day by Jean Chatzky and truthfully I thought the book was pretty boring. It really didn’t really advise on what to DO with what you’re saving and spent a lot of time talking about credit collections and how to avoid them. Also how to prioritize which bills get paid first, etc. Again, it was an easy read.. but you can pretty much guess from the front page what most of the book is going to be like. “Save $10 a day – Invest it.. be rich”.. yes yes.. we know. The second book which I just finished reading today was called The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach. I can tell that I liked this one, as I read it a lot quicker than the previous book. It read a lot like The Wealthy Barber in terms of easy to follow and how it was structured.

Truthfully I enjoyed this book, I think that it’s a lot more relevant (likely a lot newer) to todays society as we tend to utilize things like online banking, bill paying, automatic deposits, etc. Without going too much into it, David writes to also save 10% of your gross salary, and automatically put it into an RRSP. Once there, put it in mutual funds, or something that will generally gain 10% a year. I most enjoyed the automatic part about this book as I find it relevant. You see, as it stands right now I take 10% of my paycheck and it goes into my work stock. They are also nice enough to match a certain percentage, so right there, I’m already gaining the percentage that they give me (even though their contribution is taxed). But, the book I found very relevant to me.. since I already have an automatic savings or deposit system going, I could just concentrate on the parts of the book in which it tells you where to put it and what to do with it.

Certainly an enjoyable read and again, but I’d have to say that it still ranks below ‘the Wealthy Barber’ in terms of my favorites.

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1. The Wealthy Barber – Book Review
2. Book Review: “Stop Working: Here’s How You Can!”
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