Apr 132015
 

15-04-expensive-internet-memeNorth Americans pay a lot of money for high speed internet access. One way to get around this costly expense is to own the means that produce the service. This means buying shares of the internet service providers that we use. Telecommunication companies are usually very generous to their shareholders as many pay out up to 40% of annual profits to their owners. Over time this gives one the opportunity to have a reoccurring internet bill pay for itself.

Step 1: Figure out your current internet service fee.
Step 2: Save an equal amount of money earmarked to buy shares of your internet provider.
Step 3: Continue buying shares every year for 20 years.
Step 4: Now use the dividend income you receive from your ISP to pay your internet bill. 🙂

Example: If we currently pay $50 a month for one of Bell’s internet plans, we can simply set aside another $50 a month to buy Bell stocks (BCE) on the TSX. This gives us $600 a year to invest in BCE. To save on trading fees we can buy the shares once a year, not every month.

The average price of BCE last year was around $50 so every year our $600 savings can buy us 12 shares of BCE. After 20 years we’ll have 240 shares total. Bell currently pays its shareholders $2.6 per share every year. With 240 shares, we would get $624, or about $600 after tax, with the dividend tax credit, for most people.

At that point we can essentially use Bell’s dividends ($600/year) to pay for the cost of our internet usage ($600/year.) 🙂

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Oct 142013
 

Some say Canadians are being charged too much for our cell phone plans 😯 I used to think the same 5 years ago, when Bell, Telus, and Rogers were the only options for most people. But not anymore 😉 Because today there are so many less expensive alternatives out there to choose from.

To compare, let’s look at what the “big 3″ are offering on their websites. (as of 10/14/13)

  • Bell offers $70/month for unlimited voice + 250MB data
  • Rogers has pretty much the same $70/month plan
  • Telus tries a different approach by breaking up their voice and data package, but with a $55 phone plan, and a 250MB data plan that costs $15, the total still comes to $70/month

Now let’s look at what some of the alternative wireless companies are offering. (as of 10/14/13)

  • Manitoba Telecom Services (MTS) offers a 1000 min voice + 1GB data plan for $55/month
  • The crown corporation SaskTel offers a comparable plan for $45/month
  • Public Mobile offers unlimited voice + data for $40/month
  • Wind Mobile also has unlimited voice + data for $40/month
  • Mobilicity has a similar package for $35/month or $55/month for upgrading to their 4G network

I’m sure there are other companies I’ve missed but in general it appears for a standard voice + data package, the smaller wireless players offer a 43% discount over the larger companies (~$40 vs ~$70.) 5 years ago when I got my first cell phone I paid $40/month, and that was talk only with limited minutes 😡 But today, I can get so much more for the same price! According to fellow PF blogger Stephen Weyman, even when it comes to add-on packages for traveling to the U.S., the smaller players offer better value. So I think prices have gone down, not up 😀 My current wireless package is only $20/month because I have no data plan, just unlimited talk + text.

So it’s a bit perplexing when I read reports like this one by J.D. Power and Associates that claim in 2013, 49% of Canadian wireless customers who have data packages pay on average $86/month, and the other 51% who do not have a data plan (oldschool people like me) pay $65/month. Good heavens! (;゚д゚) Who is still paying $65/month for just talk + text? No wonder people are so upset 🙁 But don’t get me wrong, I actually like it when consumers pay more 😉 Here’s a look at how our telecom sector’s average revenue per user compare with other countries.

13-10-2011arpu

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