A Money Coach in Canada

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For those of you wondering what all the fuss is about, here it is in a nutshell:

1. Cdn born Conrad BlackConrad Black became a self-made media baron. He is most known in Canada for starting The National Post (to which I subscribed, straightaway. For one thing, I was a lot more right-wing back then. For another thing, notwithstanding my politics, I am glad of diverse opinion in the media. Between his own op eds, Christie Blatchford and Mordecai Richler -RIP – it was a darn fine Saturday morning read.)

2. He got kicked out of Canada by a cranky Jean Cretien (presumably annoyed by a right-wing paper?) when the Brits made him a Lord.

3. Conrad and his brainy, beautiful wife Barbara AmielBarbara Amiel (with whom he is madly in love) became nothing less than celebrity figures in London, New York, and Chicago (take that, Jean!) Gossipy note: Elton John sent the judge a letter of support for Mr. Black.

4. He took his company (Hollinger) public in the States, in 1994. Alas, the fact that the company was now no longer his didn’t completely settle in his mind (I can actually relate. I can’t imagine ever selling and handing over control of Your Money by Design. I gave birth to it. ).

5. He had parties that would make Princess Diana (RIP) blush and … they started getting attention. In fact, one investment firm with funds in Hollinger demanded payback. And then a Hollinger board itself asked Barbara Amiel, ‘ahem, could you kindly describe what work you did to warrant the $276K we paid you’ to which she declined a response. And so on and so forth. In short, it began to appear like Black was spending money right, left and centre on a really wonderful life when the funds should have been going right back into the business. Inquiring minds of investors really wanted to know stuff. Throw in law suits, attempted tax evasion, and destroying documents and to make a long story short:

6.5 year in jail is what Mr. Black has to look forward to.

Sheesh. Martha one year, Conrad another. What were you thinking? (a question I still would like to pose to Bill).

The Bank of Canada  (ie. the mothership of all Cdn. banks, our equivalent to “The Fed” in the u.s.) gave me a break today, just in time for Christmas:  my line of credit (I’m running a business, you know!) interest rate dropped by .25%. 

Here’s the dilemma the Bank of Canada faces:

1.  When they lower interest rates, more people borrow.

2. When more people borrow, what do they do with the funds?  Spend it, of course.

3.  If lots of people have lots of dollars chasing a product, what happens?  Supply/Demand = the price of the product goes up.  As that starts to happen to lots of products across Canada, we experience inflation.

David DodgeSo David Dodge, the Governor of the Bank of Canada, is always walking that fine line. In this instance, he’s betting that we won’t suffer inflation next year – why?  Because our dollar is so strong relative to the USA.  That means Americans won’t be buying as much of our stuff (and driving the price up) and conversely, Canadians are starting to buy jeans and cars etc. in the States (again, forcing prices in Canada down, not up, in order to compete).

That’s it in a nutshell, as best as I can grasp it.  Any actual economists reading this, feel free to correct me if I’m off base here!

Move over, Nancy! Money Relations is here!

When Nancy first approached me to do this guest post, I… shuffled my feet at the opportunity.

What was she saying? Blog about my baby steps towards investing…? Was there a hidden message somewhere – that any idiot can do it?!

Good thing I’m not that easily offended by the truth. Below describes my financial story with notes of insight along the way.

My first investing experience came when I was a kid banking at the Bank of Mom . I had saved my birthday/Xmas monies and I had deposited it with BMOM at separate installments. Little did I know that the bank did not keep good accounting records and when it came time to withdraw, I got an NSF.

As you can imagine, that was the last time I banked with Mom and I opened an account with a CDIC institution member.

Note to self 1: Keep track of own dang money.

Things went swimmingly after that, I had my own pocket money at an early age with a paper route and I could afford my own things.

Note to self 2: Lugging newspapers in winter sucks. Need to retire from newspaper biz. Save money.

Later on, I puttered around in university but I have to admit I really didn’t find my calling until I was hanging in the computer labs. Unfortunately, I hadn’t signed up for any computer courses. As a result, I flunked the courses that I was registered for and I enrolled in college instead for computer engineering. I had already blown 2 years of tuition in university.

To this day, it nags me that I don’t have a degree as I’m pretty bright (really, I swear). I graduated from college and Mom bailed me out of tuition debt.

Note to self 3: Thank and forgive Mom for BMOM fiasco.

I got my first real job in the tech field during the dot com meltdown. It was with a small company and I considered myself lucky that I could even find a job. During the interview process, I said my expected salary was 42k. I started at 28k!

Luckily, after my 3 month probation, I got what I had asked for (which was unexpected). At my year end review, my salary was raised to 52k (which was also unexpected as I didn’t even negotiate nor was it requested).

Note to self 4: Get foot in door. Shut pie-hole and work. Project positivity – rewards will come.

It was rough times working with this company as all the R&D money had dried up to go to defense contracts after 9/11. Still, being in such a small organization I learned a lot. And Mom was at it AGAIN nagging me to save.

Note to self 5: Look towards future. Start saving and investing for real. Begin with mutual funds.

After 3 years with the company, my hours were reduced in half. It wasn’t unexpected as bodies had started disappearing (in a non-murderous way). During my off days, I started to look for work elsewhere.

Note to self 6: Financially stability rocks. Don’t live paycheque to paycheque.

Within three months, I got a job at my current organization. I earn a good living and it’s secure with a great pension and health benefits plan. The chances of career development are low and I’m not sure if I want to put in the same blood, sweat and tears as I did with my old company.

Note to self 7: Don’t live for job. Nice to have choice to work or not. Seek financial freedom.

So here I am today. I’ve done my due diligence with savings and I’m debt free. I don’t own a house and I rent. I’ve reached the step in my financial progression where I want my money to work for me.

I looked into my previously invested mutual funds and I realized that their performance trailed comparable funds that track indexes – with much lower management fees. Now why would I pay more to people to screw up for me? I can do that very well on my own, thanks.

And that’s exactly what I have been doing… investing by myself and screwing up here and there but it’s okay. I’m learning from my mistakes and my good decisions have outweighed my poor ones. I just need to do this more consistently.

Note to self 8: Start small. Get in the game and learn. Motivation: don’t lose money.

I started my blog to write down my journey in life as it relates to money. It helps keep my finances on the front burner but I don’t obsess about it. Making money for its own sake is meaningless. I am lucky in that I grew up in a family that stressed financial prudence but I don’t let its influences dictate who I am.

Note to self 9: Need to find own investment style. Gather information from internal and external sources. Make decisions best for self.

So there you have my financial story up to now. We each tell unique stories with different chapter emphasis on budgeting, savings, investments, etc. It just depends on your life circumstances.

Now go write your own fairy-tale by finding out what works best for you.

Note to self 10: Tell readers to write their own dang notes.

My money coaching practice has no room in it for judgement. Many of my clients do enough of that for themselves – frustrated, embarrassed, referring to themselves as “no good with money” and “irresponsible”. The fact is, we all screw up in various areas of our lives. Some of us repeatedly get into lousy relationships. Some of us can’t get along on the job. Some of us chronically drink a little too much booze. Etc.

And some of us have dropped the ball regarding our finances for reasons ranging from pure exhaustion (managing our money is one more demand on our time) to hopelessness (so why bother).

Over the past four years of access to privileged information – how people handle their money, their worries, the foibles – I’ve learned that it’s rarely as simple as, “well, here’s the smart thing to do, so just do it already!”

This has expanded to macro economics, and my politics. I’ve learned to dig a little deeper on issues like poverty. It’s not usually as simple as, “well you seem young and healthy, so get a job already!”

Today’s National Post gave some discouraging news: 1 in 8 canadians live below the poverty line. Now before you dismiss that as likely a generous ‘poverty line’, here’s how it’s defined:

  • for 2 people, a combined income of $21K
  • and for a family of 4, a combined income of $32K.

For my fellow vancouverites — can you imagine a family of 4 surviving on $32K in this city?

I cannot absorb that fact, and think it’s somehow ‘their fault’ and ‘they’ should get their act together. I’ve seen how complex it is for those of us with plenty of money to ‘get our act together’. And just like my great joy, and privilege, is to do what I can, compassionately, to equip and empower my clients around their finances, politically, I’m re-aligning towards: which politicians are oriented to equipping and empowering the poor? the marginalized? those among us who for whatever reason don’t seem able to do what seems obvious to those of us on the outside?

In all the shopping hype across the border, a quiet revolution may go un-noticed.

November 23 is Buy Nothing Day!

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