Short Takes: Online Financial Calculator Problems and more

In addition to my appeal for help to keep my blog alive, this week I wrote about group RRSPs which generated quite a bit of discussion in the comments section:

Employer Matching in Group RRSPs

Here are my short takes and some weekend reading:

Potato finds problems with an online calculator designed to help you decide whether you’re better off renting or buying a home.

 Retire Happy Blog reports that Service Canada’s online CPP calculator sometimes produces wildly inaccurate estimates of your future CPP benefits.

 Where Does All My Money Go? is offering a nearly half-off deal on pre-orders of Preet’s new book Stop Over-Thinking Your Money!

Big Cajun Man describes a devious tactic used by furnace salespeople that worked on him.

Canadian Couch Potato explains when it’s better to hold a U.S.-listed ETF and when it’s better to hold its Canadian equivalent.

 My Own Advisor finds out what’s in the Big Cajun Man’s personal investment portfolio.

Million Dollar Journey describes the top renovations for increasing rental income.

Larry MacDonald thinks that there will be a global economic upswing in 2014 that will benefit Canada. I hope he’s right. But just in case, I’ll stick with my investment plan instead of making any bets on my hunches or anyone else’s insights.

Comments

  1. PotatoDecember 13, 2013 at 1:47 AM

    Thanks for the mention, Michael!

    After doing some more reverse-engineering with simpler, ridiculous scenarios, it appears that the costs of selling a home are only factored in for year 30, not the given selected year. That’s also what causes the year 30 discontinuity.

    ReplyDelete
    Replies
    1. Michael JamesDecember 13, 2013 at 10:51 AM

      @Potato: When I first looked at the chart from the calculator, I wasn't sure what it meant for renting to be better in the first couple of years, worse in the middle, and better at the end. Does this mean I should own a house in the middle 20 years? This result makes no sense to me. It seems that you've figured out what's going on with the calculator more than I have in the few minutes I looked at it.

      Delete
  2. Big Cajun ManDecember 13, 2013 at 7:05 AM

    Yeh, I fell for it, oh well, guess it was a "safety issue". Have a wonderful frigid weekend.

    ReplyDelete
  3. My Own AdvisorDecember 15, 2013 at 8:57 PM

    Thanks for the mention Michael. Hope you had a great weekend.

    Mark

    ReplyDelete

Post a Comment

Popular posts from this blog

Short Takes: InvestorLine’s HISAs, 24-Hour Trading, and more

I recently moved some cash into BMO InvestorLine’s high-interest savings accounts (HISAs) that are structured as mutual funds.  Their designations are BMT104, BMT109, and BMT114, and they purportedly pay 4.35% annual interest (which they can change whenever they like).  However, the way they report the monthly interest payments is so baffling that I wasn’t able to sort it out in my first 15 minutes of trying.  A further complication is the following text in the HISA description: “The Bank may pay, monthly or quarterly, compensation to your Dealer at an annual rate of up to 0.25% of the daily closing balance in the BMO HISA.”  I couldn’t find any evidence of such a charge, but I haven’t been invested for a full quarter, and I can’t yet say that such a charge isn’t buried somehow in the confusing reporting.  I have more digging to do before I can recommend these HISAs. Here are some short takes and some weekend reading: Preet Banerjee explains the dangers of Robi...
Read more

My Asset Allocation

I’ve resisted discussing my asset allocation for some time, but now is finally the time to describe it and the reasons behind it. I’m not holding it out as a model portfolio; I believe it’s suitable for me and not necessarily anyone else. With that warning, enjoy the discussion and feel free to ask questions or take some pot-shots. The main reason why I haven’t discussed my asset allocation in detail before now is that I don’t want readers to treat it like a model portfolio and follow it blindly. Everyone’s situation is different. The need for variation in asset allocation from one investor to the next usually isn’t huge, but there is no one-size-fits-all portfolio. A secondary reason for keeping my asset allocation to myself is that I can’t be sure I’ll never change it. For example, I recently made the minor change of switching from an ETF of small-cap stocks to an ETF of small-cap value stocks . I don’t have any plans to change my current allocation, but I may think differe...
Read more

Updated Currency Exchange Method at BMO InvestorLine

There is now a more recent update of the method I use for exchanging currency at BMO OnvestorLine . I recently changed the procedure I use to convert large sums between Canadian and U.S. dollars at BMO InvestorLine. The method I use saves a lot of money compared to using the InvestorLine foreign exchange system. The latest change I made eliminated an annoying interest charge that I had to ask to be reversed. Most people don’t realize how expensive it can be to exchange currency. The extra charge banks and brokerages add gets hidden in the exchange rate. To see this extra charge, start by taking a sum in Canadian dollars, say C$10,000, and finding out how many U.S. dollars you can get. Then see what this U.S. amount would get going back to Canadian dollars. Many people might guess they’d get their original C$10,000 back, but they’d be wrong. In a recent test I did at BMO InvestorLine, I’d get back C$9754, for a loss of C$246 in two currency exchanges. That’s $123 per excha...
Read more

Archive

Show more