Jun 232016
 

I heard this parable on a radio talk show. It explores some important lessons about conventional wisdom, expectations, and opportunity, so I thought I would share it. I don’t know where it originated from here’s a paraphrased version of it.

16-06-janitor-cigarettesThere once was a janitor who worked for a large corporation in the 1900s. Like many working class folks at the time this janitor couldn’t read or write. 🙁 Although he was a quick learner, he never finished school because he started working at a young age to help out his family. Over time many of the other custodians at the company would go through janitorial education and get certified and promoted. But because this janitor was illiterate he couldn’t pass the certificate exams to become a world class janitor.

On his way home he would sometimes pass by a group of men loitering outside a local pub. They would often complain how there was no place to buy cigarettes around the neighborhood. They had to walk 10 blocks away to get to the nearest store that sells smokes. The curious janitor stopped one day to ask the men why not start their own cigarette business close by. “We don’t have the time,” they would reply.

Eventually the janitor decided to open a small cigarette store right beside the pub. He operated the store on his own during the evenings and weekends. It became very popular and he soon opened another location, and then another, and hired people to help his growing business. Then he quit his job as a janitor and continued to grow his cigarette company, which made him a ton of money. 🙂

When a large tobacco company offered to purchase his company he asked his accountant to read the offer letter to him. The accountant was unexpectedly surprised to learn that the successful entrepreneur didn’t know how to read. “You’ve already accomplished so much with your knowledge,” said the accountant. “Imagine where you would be right now if you were literate.” The ex-janitor chuckled and replied, “I’ll tell you exactly where I’d be. I would still be back at my old job sweeping floors.” ?

—————————————————-
Random Useless Fact:

There’s a piece of land in the far Arctic named Hans Island. Since the 1930s, this nondescript island has been at the center of an ongoing battle between two countries.

16-06-danish-canada-border-dispute

May 262016
 

Windfall from a Bank Error

Engineering student Christine Lee became a millionaire by accident when the Australian bank Westpac accidentally credited her account with an unlimited overdraft. Between 2014 and 2015 she took out AU $4.6 million from this account, and spent most of it on designer handbags and other luxury goods because that’s apparently what young people do these days. 🙂

16-05-handbags_million-bank-draft

Westpac claims it gave Christine the generous overdraft funds 4 years ago by mistake. Fraud cops began an investigation into the matter in 2012. But it wasn’t until March this year that an arrest warrant for her was issued. She was then arrested by the Australian federal police earlier this month. The prosecutor said Christine had failed to notify the bank that she was not entitled to the money. Welcome to the real world, Christine. 🙂 If you make a mistake and don’t pay your credit card bill on time, you will be harassed by the bank. But when they make a blunder such as reckless lending it’s still your fault. 😛

However, the magistrate Lisa Stapleton has reportedly agreed with Christine’s defense lawyer that the police would “struggle to prove the spending of the money was illegal.” She points out that Christine “didn’t take it from them. They gave it to her.” I would be inclined to agree with the magistrate. The police is charging Christine with “dishonestly obtaining financial advantage by deception and knowingly dealing with the proceeds of crime.” I don’t know much about Aussie law but this statute is concerning to me. Who exactly would Christine have deceived? Westpac practically gave her the money in the form of a glorified line of credit, lol. And how would it be a crime to buy handbags with overdraft money? Westpac also had 2 years to notice and correct the overdraft error before Christine used it. There are many bank sponsored credit cards that feature no spending limits so it’s not beyond the realm of possibility that a teenager would see an overdraft account and think the bank was just being extra accommodating. Westpac even claims it offers “a range of innovative financial packages to suit your needs.” Maybe some people feel they need a shopping spree. 😉

Continue reading »

Apr 282016
 

A 50 Dollar Lesson in Personal Responsibility

16-04-girl-50-lesson-young-money-kids

I’d like to share this joke I found on tumblr.

I recently asked my friend’s little girl what she wanted to be when she grows up. She said she wanted to be President some day. Both of her parents are liberal Democrats who support Bernie Sanders. They were standing there beside her.

So then I asked the little girl, ‘If you were President, what would be the first thing you would do?’

She replied, ‘I’d give food and houses to all the homeless people.’

Her parents beamed with pride.?

‘Wow…what a worthy goal.’ I told her. ‘But you don’t have to wait until you’re President to do that. You can come over to my house and mow the lawn, pull weeds, and sweep my yard, and I’ll pay you $50. Then I’ll take you over to the grocery store where the homeless guy hangs out, and you can give him the $50 to use toward food and a new house.’

She thought that over for a few seconds, then she looked me straight in the eye and asked, ‘Why doesn’t the homeless guy come over and do the work, and you can just pay him the $50 directly?’

I said, ‘Welcome to the Republican Party.’ 😛

Her parents still aren’t speaking to me.

The point of this allegory is clear; There’s an untapped market of homeless people who could be doing yard work & making $$$ 🙂

It also addresses the hapless reality of economic inequality even in developed countries. If we want the poor to succeed we need to give them the opportunity to pursue their own dreams instead of enabling them to continue living in poverty. Government run redistribution programs are part of the problem. Giving money to the homeless without any strings attached robs them of their dignity, economic potential, and the chance to develop the internal motivation to succeed. Besides, the government doesn’t have money in the first place so when it gives money to the poor it has to take that money from somewhere else.

Some children think that their parents are all no-ing. ? Even so, we understand it’s wrong and destructive for parents to do their children’s homework. It undermines their children’s intelligence, sets them up for failure in life, and is not fair to other students. We also understand it’s wrong to feed fauna at the local park.

16-04-squirrel-begging-food

It’s hard to say no to a begging squirrel, but we resist the urge to feed it because we don’t want it to be dependent on our generosity. We don’t want to rob these hungry creatures of their ability to be self reliant. So I think we should help the homeless through education rather than simply giving them free money with no obligations.

The ultimate freedom in life comes from being able to internalize personal goals that give us meaning and purpose. 😀

If we are kind enough to offer these gifts of self-discovery, personal accomplishment, and self worth to children and animals, then I think we ought to extend this same offer to financially unfortunate people as well. 🙂

————————————————————————
Random Useless Fact:

16-04-motivation-doubt-kills-more-dreams-than-failures

Apr 012016
 

Quitting my Job

There comes a day in everyone’s life where they have to throw in the towel. After holding down 2 jobs for the past 8 years I felt it was time for me to quit. I’m simply getting too old for the workplace. And after analyzing my financial situation I realized that I do indeed have the means right now to leave the rat race and live solely off my investments forever!

So I quit my part-time job in early March. And then a couple weeks ago I handed in my letter of resignation to my full-time employer. The company tried to keep me because I’m rather good at my job. Much like a carpenter, I’m always able to nail my work. ? My manager even offered me a 30% raise if I stay, but I politely declined. ?

Yesterday was officially my last day at work so I’m finally free from the grind! From now on I can enjoy life to the fullest on my own terms. 🙂 Woot!

16-03-freedom-braveheart-quote-scene

Enjoy unlimited free time for the rest of my life? Yeah, I think I could get use to this. ?

But one obstacle that can stand in the way of true freedom is debt. 🙁 To obtain real financial security I knew I had to get rid of all my debt. So I decided to make some major changes to my balance sheet.

Selling the Farmland

I bought a farm in 2012 for $150,000. And then bought another farm for $172,500 in the following year, for a combined purchase price of $322,500.

Well I recently sold both my farms for $550,000 to a single buyer. Yay! This $200,000+ capital appreciation is due to the strong demand in this area. According to an official Farm Credit Canada report, farmland values in Saskatchewan have increased 83% on average from the beginning of 2012 to the end of 2014. Amazeballs! ?

16-03-farmland-saskatchewan-yearly-returns

We don’t have the official numbers for 2015 yet. But according to another FCC report, “increases could be as high as 9%, with some upside to reach higher.”

Although I was able to sell my farms for a total price of $550,000, I had to pay $20,000 in agent and legal fees, pay off the remaining $195,000 of farm loans to the bank, and set aside another $35,000 for capital gains tax.

So in the end I only ended up with $300,000. But hey, I’ll take what I can get. 😉

No More Debt

As shown in my most recent net worth update I had roughly $300K of non-farm debt last month, including a mortgage, LOCs, etc. Well over the last week I used the net proceeds from selling the farmland to pay off the balance of all my remaining loans so now I’m completely debt free! 😀

16-04-forever-alone-meme-debt-free-nobody-calls

New Balance Sheet

So with the farmland and debts gone, here’s what my new net worth looks like.

Assets: Total = $530,000
Cash: $7,000
Primary Residence: $263,000
Non Registered Investments: $200,000
RRSP/RRIF: $60,000

Liabilities: None 🙂

Net Worth = $530,000

It’s such a relief to finally be debt free! 😀 My balance sheet looks a lot cleaner without all those pesky liabilities. Debt is evil. I will never go into debt ever again! Debtors are losers. ?

Continue reading »

Mar 202016
 

Interviews with Canada’s Top Investors

Market Masters by Robin R. Speziale is a great resource for any investor looking to gain an advantage in the financial markets. The book features a series of interviews with some of the top investors in the country, and talks about their various investing styles and outcomes. There are 27 Canadian investors who are interviewed in the book, as well as Bill Ackman, an American hedge-fund manager, because he is known to be very active investing in Canadian companies.

16-03-market-masters-book

Each featured Market Master in the book has a different perspective on how to tackle the financial market. They share their investment experiences and explain how their approach has worked for them. One interview I particularly enjoyed in the book is with Ross Grant. His strategy is to create a portfolio called Beat the TSX or (BTSX) whereby an investor holds the top 10 highest dividend paying stocks in the TSX/60 index. A BTSX strategy would have outperformed 19 out of 20 mutual funds in 5 year returns. At the end of each chapter, the author provides a Master Keys section to review and highlight some of the important points from each interview. The back of the book contains some useful resources such as explanations of important financial ratios, as well as a glossary.

Although the book is somewhat long at 601 pages, it is quite easy to read. Market Masters provides simple and easy to understand strategies from the top investors in Canada and I would definitely recommend this book to anyone who is interested in investing, particularly in the Canadian stock market. You can find more information about Robin Speziale and his book on the author’s website. 

Market Masters Book Giveaway

Robin has kindly provided me with 2 copies of Market Masters so I am giving away one copy to a lucky reader. Simply write a comment below. As long as you’ve entered a working email address when you fill out the comment form then you will be automatically entered to win. The giveaway ends on April 15th. A random commentator will be selected and I will contact him or her.