Most people do their jobs well, but there are some who can’t or won’t do their jobs adequately. The most obvious consequence of keeping bad employees is that paying them is a waste. But there are follow on effects that are much more serious. In the private sector, these problems tend to take care of themselves, but not so in the public sector. There are many problems that come from allowing bad employees to stay in an organization: 1. They cost money but don’t produce their share of output. 2. They take up the time of other employees. 3. Some talented employees will become disgusted with having to work with incompetent employees and will leave. 4. Over time some bad employees will move up in management where they can cause more damage with poor leadership and bad hiring decisions. 5. An organization that goes too long without culling bad employees will eventually lose its ability to distinguish between weak and strong performers. Of all these problems, only the first o...

Here are my posts for the past two weeks: Credit Card Bill Typical Spending vs. Average Spending Contest Winners – Let’s Get Blunt about Your Financial Affairs How Dividends Affect Stock Prices Here are some short takes and some weekend reading: Morgan Housel writes a brilliant piece offering financial advice for his new son. The high quality of his 10 points is in sharp contrast to the embedded ad made to seem like part of the article at the bottom. Preet Banerjee explains how taking CPP early or late affects your monthly payments. Rob Carrick gives us one of his short videos explaining the Liberals’ tax plans. He hits the high points clearly, but I’m not sure why he refers to “high net worth earners.” I think he just means “high earners” because you get hit with this extra tax on high incomes whether you’re a millionaire or you owe a million. The most amusing part of this video was the preceding ad touting active management in investing. Apparently, the “power...

A few times now I’ve seen dividend investors claim that paying dividends doesn’t make stock prices drop. The claim is that investors know the dividends are coming and they are already built into the price of the stock. This isn’t true, but perhaps the reason isn’t obvious. After all, this type of reasoning does make sense with other types of news about stocks. This is best explained with an example. Consider two companies: Company A – will be paying a $1 per share dividend tomorrow Company B – won’t be paying a dividend – will be paying a fine tomorrow that works out to $1 per share In both cases, we assume that investors have known about these facts for a long time. In company B’s case, when tomorrow comes and they have to pay the fine, their stock price changes no more than usual because investors have known about the fine for a long time and have already factored it into company B’s share price. So, the question then is why doesn’t this logic apply to company A? A...

The winners of the draw for copies of Mark Goodfield’s book, Let’s Get Blunt about Your Financial Affairs (using a pseudo-random number generator of my own design) are Murray D. and David R. Congratulations to both winners who I have already contacted by email. The interest in this book was high judging by the large number of entries. Thanks to all who entered and for the kind words many included with their entries.

The gap between your typical monthly spending and your average monthly spending is what gets many people into financial trouble. I collected my family’s monthly spending since 2010 to illustrate how it’s human nature to get into financial trouble if you’re not wary. My family’s monthly spending is shown in the chart below. I’ve omitted the grid-lines for privacy reasons and because the absolute dollar numbers aren’t important to the points I’m making. (You may wonder about that very low month near the middle of the chart. In cases where I made a purchase and was reimbursed, I treated the reimbursement as a negative amount spent. That month my employer reimbursed me for travel expenses I had in the previous couple of months.) The main thing to see with this chart is the amount of variation from month to month. My family’s spending variation may be greater than most, but everybody’s spending varies somewhat. Some people are dedicated to using equal billing plans and paying f...

Credit card companies seem to be losing their patience with some of their less profitable customers: THE ESTIMATED TIME TO REPAY THE CURRENT STATEMENT BALANCE IS 0 YEAR(S) AND 0 MONTH(S) AND 6 DAY(S) BECAUSE YOU’RE ONE OF THOSE JERKS WHO PAYS THEIR BILLS IN FULL EVERY MONTH.

Here are my posts for the past two weeks: Irrationally Yours Giveaway – Let’s Get Blunt about Your Financial Affairs Here are some short takes and some weekend reading: Jason Zweig brilliantly explains why it is important for investors to stop caring about the future of stocks. One good quote: “One functional definition of a bear market is that it is simply a period that separates the people who don’t care from those who merely say they don’t.” Preet Banerjee uses one of his great Drawing Conclusions videos to explain when credit card reward programs aren’t rewarding. Big Cajun Man came to the realization that his biggest purchase in life was not his house. The Blunt Bean Counter has a guest expert explaining the top reasons why people and corporations get audited by CRA related to GST and HST. Boomer and Echo explains why he dumped his dividend stocks in favour of a simple indexed portfolio. His investing path mirrors mine quite closely except that it took me 12...

Mark Goodfield, known as The Blunt Bean Counter, is an accountant who knows his stuff and can explain things clearly. He’s written a book, Let’s Get Blunt about Your Financial Affairs , that collects some of his best writing together into a range of areas that matter to Canadians. I’m giving away two physical copies of his book (see below for details of the giveaway). Some of the topics Goodfield covers are executors, wills, audits, taxes, RRSPs, RRIFs, retirement, and cottages. Goodfield draws from his extensive experience working with his clients to give insights about human nature to go along with solid accounting information. The book’s style is very conversational, which makes it much easier to read than you’d expect from an accountant. It’s tempting to say it could use more editing. One of the more amusing parts talks of the tail wagging the “dodge” instead of “dog”. However, the meaning remains clear, and these little things give a feeling of authenticity. My favour...