I wrote only one post in the past two weeks, but I think it’s important: Bitcoin Here are some short takes and some weekend reading: Fred Vettese explains why delaying taking CPP until age 70 is the right choice for most people. I’m able to spend more in early retirement today because of my plan to delay taking CPP and OAS until I’m 70. But I’ve had little success explaining this to others. Big Cajun Man found a way to get his daughter to pay off his credit card. He tells the story a little differently. Preet Banerjee interviews Melissa Agnes about company crisis management. Robb Engen at Boomer and Echo explains his mortgage renewal strategy.

The technology used to create Bitcoin comes from the field I used to work in professionally. I’ve followed Bitcoin from its obscure beginnings to its recent bubble-like rise. After fielding so many questions about cryptocurrencies, it’s about time I organized my thoughts about Bitcoin as an investment and as a currency. To understand Bitcoin, you don’t have to understand the technology behind it. The big problem anyone can see with digital money is that after you spend it you still have a copy of it, so you can spend it again. Much of the effort in creating digital money centers on preventing this double-spending. Bitcoin does this with some clever cryptography and computer protocols called blockchain. Another feature of Bitcoin is that more money gets created over time. Those who do enough calculation with their computers get more Bitcoins. This is called mining, and is intended to roughly mimic mining for gold. Bitcoin as an investment Before Bitcoin’s meteoric rise, t...

Here are my posts for the past two weeks: The Power of Saving More Informed Financial Choices The Couple Who Made Millions Beating Lotteries Updated Currency Exchange Method at BMO InvestorLine Here are some short takes and some weekend reading: Kerry Taylor went to a wealth expo so you don’t have to. Her description and comments on the event are hilarious. Darryl Singer says “when an insurance company receives a claim, their first reaction is to reject it. They may reject it a second and a third time, too.” He paints a picture of an industry doing battle with its customers whenever they made a substantial claim. Singer is a personal injury lawyer, so he comes at this from a certain point of view, but I’ve never hear any other point of view on this subject. I’d like to know what fraction of claims get denied and how this varies with claim size and insurance company. Without this type of information, it’s impossible to know if you’re really covered if you get sued o...

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...

We all know that lotteries are a loser’s game that taxes the poor, but Jerry and Marge Selbee made millions of dollars playing lotteries in Michigan and Massachusetts. Jason Fagone tells their story in the entertaining article Jerry and Marge Go Large . I think Fagone and some of the players in this story let state authorities off the hook for badly-designed lotteries. The key to how the Selbees made money is the “roll down” feature of the lotteries they played. When the top prize is large enough and nobody wins it, some lotteries roll down the money for this prize into lesser prizes. So, if nobody matches all 6 out of 6 numbers, those who match fewer numbers get bigger prizes. The Selbees were able to predict when a roll down was likely to cause the lottery to pay out more than it took in. By buying tickets at these times they had an expectation of making money. So, they weren’t cheating. They were playing the lottery the way it was intended to be played. There was nothin...

Morgan Housel wrote a thoughtful article titled How to Talk to People About Money that I highly recommend reading. He makes the case that not everyone’s financial goal is to get richer. Many people just want to maximize the chances they can keep living the way they’re living. He likens financial advice to medical advice where doctors lay out your options clearly and let you decide what medical intervention you want. Just as people want a say in their medical treatment, they want a say in their goals when investing their money. Financial advisors are trained to examine their clients’ risk tolerance and other factors, but a better model may be to lay out the possible outcomes of different investment approaches and let people decide for themselves what they want. There is an important caveat here, though. In medicine, there is the concept of informed consent. Doctors need to explain medical procedures and the possible outcomes to their patients in a way they can understand. I...

The title of this article is a play on a working paper from the National Bureau of Economic Research called The Power of Working Longer . This paper languishes behind a paywall, but the Wall Street Journal interviewed one of the authors, Professor Sita Nataraj Slavov, and this interview is at least temporarily accessible. One quote from Slavov: “We found that a 56-year-old would only need to work about a month longer to earn the equivalent of saving an additional 1% of their salary for 10 years.” I find it funny that it takes a “study” to draw this conclusion. If you save 1% for 10 years, that’s like saving 10% of a year’s pay, or about 1.2 months’ pay. If you invest the money for a return that exceeds the growth in your pay, your savings will grow to a little more than 1.2 month’s pay. So, it shouldn’t be at all surprising that you can get the same benefit by working a little over a month longer. I guess the message is that we shouldn’t stress too much about not saving enou...