Zany Zant had just invented a nifty device that measured indifference and disgust. He wanted to test it and to observe if there was correlation between the two emotions. So he asked his best friend Fast Hopper if he would wear it for a day. “No prob” said Fast Hopper.
The temperature the day Fast Hopper had to test out the device was -25C. He had forgotten to turn on the timer for his carâ€™s block heater. “Doh!” said Fast Hopper.
His wife reminded him over breakfast that he had promised to help her with their incomplete 2007 tax returns weeks ago. “Meh,” said Fast Hopper.
As he entered the office one of his colleagues asked him if he had heard the news on the radio about the budget update. Fast Hopper had to confess he had only half listened to a few words. “Meh,” he said. “Iâ€™ll listen to the TV news tonight.”
His boss had left him and email requesting to meet with him later in the morning. There was also a phone message from his financial planner asking him to return his call. He added those to his to do list for the day. “Meh, I have all day to get to it.”.
He had Zany had decided to go out for lunch. Zany asked Fast Hopper if he had made any New Year resolutions. “Meh,” grunted Fast Hopper, “what use are those, I never stick to them for more than a week.” Zany said he was going to keep track of his spending for a month to see if he could save more.
As they paid, the Interact machine declined Fast Hopperâ€™s debit card. “Doh!” exclaimed Fast Hopper. “I forgot I had maxed out my overdraft!”. He pulled out his Seiza credit card. It too was rejected. It was then that Fast Hopper remembered he had forgotten to pay his bill for the last 2 months. “Doh!” was all he could say. He vowed to add paying the bill to his to do list for the day.
When he returned from lunch he ran into his boss outside his office. “Since you didn’t return my email, I assumed you were not interested in being on the next upcoming project, Fast Hopper. Because we are going through a slow time in our company, I am considering cutting your work week to 4 days with a commensurate cut in pay.” “doh”, Fast Hopper groaneZany Zant had just invented a nifty device that measured indifference and disgust. He wanted to test it and to observe if there was correlation between the two emotions. So he asked his best friend Fast Hopper if he would wear it for a day. “No prob” said Fast Hopper.
At home the first letter on the pile of mail waiting to be opened was a letter from Canada Revenue Agency. It was a request to file his late income tax return and also a letter stating he would be reassessed on the tax return from the year before. “Doh!” yelled Fast Hopper. His wife asked him if he was OK. Fast Hopper didn’t know what to reply.
Then the phone rang. It was Zany Zant, thanking him for helping test his invention. “By the way what was the invention anyways?”, asked Fast Hopper. “The device is called a meh-dohdometer, replied Zany. “similar to a pedometer. If you would like to be a part of the marketing plan for my invention, we can certainly discuss it.”
So readers what do you think? Is Zany Zant on to something unique?
As many of you have probably noticed all matters financial have been changing as fast as the weather.
Here is your New Year’s buffet of financial information: they are in no particular order of importance, and could possibly be outdated by the time you read them.
An emergency fund is not a line of credit. Rather it is a readily available amount of money that you have saved.
Further on the topic of debt, now is the time to be paying off your loans especially if you are on a rate that is tied to prime. There is no time like today to put that line of credit to rest, because with the low interest rate more of your payment is going to principal rather than fattening the bottom line of the credit company or bank.
In the last budget the government introduced the Tax Free Savings Account. Its name is confusing but you can think of it along the same lines as the RRSP. The main difference is that withdrawals and growth in the account are not taxable. In fact withdrawals create new contribution room.
Retirees who are drawing on their Registered Retirement Income Funds have been given a temporary provision aimed at restoring some of their portfolio’s value in a down market. They were allowed to take out only 75% of the 2008 minimum required withdrawal.
If they had already taken the minimum amount then they could return 25% to their account. That deposit would be considered a contribution (therefore would be a tax deduction) if deposited before March 1, 2009. It is also worth noting that a withdrawal does not necessarily mean selling your investment. An in kind transfer to a non registered account is also considered a withdrawal. Although this rule has been in effect for awhile it is only with the bear market and the advent of the Tax Free Savings Account has it started to make sense for retirees.
The last budget also brought out a registered plan for people who want to save for their relatives who are disabled. The best part of that plan is that there are generous matching government grants for every $ investors put in.
Canadians are poor market timers when it comes to investing in the stock market. Evidence from the last 15 years has shown they tend to invest before market downturns and redeem just before market upturns, thus both going through unnecessary hair pulling stress and missing out on a lot of gains. The best way to invest is through regular amounts on a regular basis throughout the year. (1)
Here is a graph showing Canadian market recoveries after past recessions. Note that an upswing is possible even in a short a time as 6 months after a recession.
Canadian Market Recoveries After Financial Crises
What trends will the next decades show and will they be a positive for middle income earners?
With apologies to Aesop and his fablesâ€¦.