Apr 292011

On Monday, Canadians will head to the polls. This will be my first time participating in a federal election. It’s surprising that only half of the voting population actually vote. I think one of the reasons for this apathy is that political leaders don’t engage enough people in their campaigns. For example, they talked about possible benefits for families, the elderly, couples, new immigrants, education, health care, small businesses, the poor, minorities, and other groups of people that excludes me. I’m part of the group that is single, is healthy, is employed in the private sector, saving and investing for my future. So far nobody is addressing people like me. Is it because I shouldn’t have anything to complain about? lol.

With the current polling trends, at least one research group believes that the social democratic party, the NDP, might actually win and run the country. “While that’s certainly an interesting result,” says Douglas Porter, chief economist at BMO, one of the largest financial institutions in Canada, “it’s not exactly market-friendly. In other words, hang onto your hats!”

Our auto insurance company, ferry services, and even electricity is run by the government and subsidized by tax payers. As a capitalist and someone who believes in personal hard work and investing in the markets, I thought Vancouver is fairly left on the political spectrum already.  But apparently the popular trend around here is signaling that people want even more government spending by more taxation on the rich and corporations. A social democratic government would benefit my mom and dad so it’s not all bad if the NPD wins.

Apr 262011

Found the following joke on tumblr. A bit exaggerated, but so true in the message. Reminds me of back in school.

What we were taught in class:

1 + 1

What we had for Homework:

-55x + 47x

And what we had for our Test:

39048240x^2(3454x + 84) + 8343x(x – 454)(354 – x)

I think one of the problems I’ve always had with Math class is there isn’t enough interesting context to compliment the learning. It’s mostly equations, and formulas but rarely any applicable situations to use it in a helpful way. More real life, modern examples would provide the motivation for students to learn more I think. The entire education system needs an overhaul and should put a larger emphasis on personal finance.

Apr 182011

It’s tax filing season. Don’t miss the deadline if you owe money. I did my taxes for last year and was curious to find out how much taxes I paid in 2010. Not just in income tax, but ALL taxes, including taxes I paid for buying stuff. I looked at all my expenses from last year and crunched some numbers. Here’s a rough breakdown of where all my tax dollars went.

Income Tax – 68%
Sales Tax – 18%
Property Tax – 11%
*Other Taxes – 3%

Total – 100%

No surprise, income tax was the biggest hit to my wallet. Had to pay more in property taxes because the real estate in this city is still hot, and our houses are selling for 3 times the national average. A typical house in Vancouver costs over $1,000,000 now.  It’s great if you’re selling, but I don’t have any other place to live, so I’d rather hold onto my little apartment and deal with the taxes than sell, because my monthly mortgage payment now is lower than if I were to rent a comparable place. Overall, I don’t feel like I got taxed too heavily. A little less than 30% of my total earnings went to the tax man in 2010, which I guess is on par with most Canadians?

*Other Taxes includes environmental levies (for electronics), carbon tax (for gas), excise taxes, taxable benefits, capital gains tax, arrears, etc

Apr 152011

Found these funny quotes on tumblr today.

1. Money can’t buy happiness but

somehow, it’s more comfortable to cry in a BMW than on a bicycle…

2. Forgive your enemy, but

remember the motherfucker’s name.

3. Help a man when he is in trouble & he will remember you

when he is in trouble again.

4. Many people are alive only because

it’s illegal to shoot them.

5. Alcohol does not solve any problems, but then,

neither does milk.

Apr 092011
There’s no such thing as good debt or bad debt. Some debts are better than others but it’s always a bad thing to owe someone else money. However going into debt doesn’t have to be a negative experience,. You can use debt to generate life enhancing experiences like financing a kitchen stove because your old one broke, or leveraging your investments which can potentially boost future profits and make you richer, faster.
I don’t think having credit card debt is necessarily worse than having a mortgage or student loan debt because interest rates, tax laws, and fiscal regulations change all the time. All debt has a negative impact on our finances, but sometimes in order to enjoy a better lifestyle (like buying a home, a car, or clothes) we have to make sacrifices and take on debt to create an overall net benefit to our lives. Using debt successfully is all about maximizing value without taking on too much liability or risk. If we do decide to go into debt we have to look at the big picture and ask ourselves is it for the right reasons, eg: will it add value to our lives overall?

Before going into any debt always have a plan to pay it off first. When you are taking on debt for investment purposes do all your calculations in after tax dollars to get a more accurate picture. And in most cases you will pay less interest on loans with a floating interest than a fixed one.