Apr 012017
 

A Real Education About Money

April is officially financial literacy month. Yay! Information is free and everywhere. The problem is some can be misleading. One of my favourite PF gurus, Gail Vaz-Oxlade, recently noticed a slough of pretentious ninnies online pretending to be financial experts.

Personal finance is really popular these days. But I agree with Gail. Real financial advice is rare. I bet dollars to doughnuts many bloggers don’t know what they’re talking about 😛 The current education system is failing the public. This is why I’ve created my high school investing course.

Retiring early should be achievable for anyone. So over the next few months I will be visiting various secondary schools around the city to lecture and teach students how to make money, using other people’s money. 😀 Financial experts such as Robert Kiyosaki have been using this lucrative strategy for decades to make millions. 😉

I was compelled to take on this project after receiving tons of positive feedback from visitors about how reading my blog has made them a lot of money. On my previous post about index investing, one commentator even suggested I charge exorbitant fees to do consulting work, haha. 😉

Let’s be honest. As an authority in this area I should take on a leading role to help others make sense of the financial world. And the best time to teach someone is when they’re young. 😀 I already have years of teaching experience. So naturally I am the best person for this job. 🙂

The Investment Course Outline

For now things are going as planned. After a few meetings with the trustees of the Vancouver School Board I managed to convince them to allow me to give classes to grade 10 students. The course is once a week for 8 weeks. This will be a mandatory part of their Career and Personal Planning (CAPP) program that all students must take to graduate.

Okay. So the first 4 classes will be focused on learning how to use margin accounts to increase stock returns. For example, I started using 2.5 times leverage with margin debt in 2011. By 2014 I showed how my portfolio had doubled in value (100% gain.) This would not have been possible with cash savings alone.

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May 282015
 

Economics is the only profession where you can gain great eminence without ever being right. Remember earlier this year when just about everyone anticipated higher interest rates, but then the Bank of Canada slashed rates instead? If mainstream economic predictions were right interest rates would be a lot higher by now, our wages would have grown to keep up with the cost of living, and Vancouver real estate would become more affordable. But that is clearly not the world we live in today. Nobody has a crystal ball to see into the future. If they did, the only people winning the lottery would be fortune tellers. It’s funny how the same people who laugh at fortune tellers take economists seriously. 😛 Okay, enough bashing on economists. They are actually good and respectable professionals. And we need them to make weather forecasters look good. 😛 Sorry.

Economics is complicated, but it doesn’t have to be hard. One way to understand the current situation we’re in is to read more history, and fewer forecasts. If we’re going to buy a specific stock we can look at its historical chart and determine what events caused it to move higher or lower. Reading stories or biographies of famous investors like George Soros, Peter Lynch, or Benjamin Graham can give a sense of how the smart minds think about situations and prepare us for when history repeats itself.

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Financial markets have a very safe way of predicting the future. They cause it. 😀 But don’t count on anyone to tell us when and how the next recession is going to happen. My Apple shares are up 50% over the last year, some bulls believe it still has room to rise. But bearish pundits think the stock market could correct at any moment. Some think the Canadian real estate market will remain elevated, while others below the bubble will burst so it’s better to rent than to buy right now. At the end of the day all of those are just peoples’ opinions. They’re only right until they’re wrong.

There will always be conflicting forecasts. Markets can rise and fall, but not do both at the same time. There are two sides to the same coin. When advocates of one side are right the other side loses. But there’s actually a third side to the coin that not everyone knows about; the edge! That’s where we want to be. We want to straddle the edge so we can take advantage of both sides, be it bullish or bearish, and spread out our financial risk. We can’t predict the future but we can sure prepare for it. 🙂

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Random Useless Fact

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Sep 222014
 

Have you ever wondered which university degrees provide the best opportunities for financial success? Well a study by the wealth consultancy WealthInsight may have the answer. A ranking was produced by gathering together the academic histories of millionaires around the world. The top field of study is Engineering.

  • 1. Engineering
  • 2. MBA
  • 3. Economics
  • 4. Law
  • 5. (Bachelor’s) Business Administration (BBA)
  • 6. Commerce
  • 7. Accounting
  • 8. Computer Science
  • 9. Finance
  • 10. Politics

Note: This list contains both graduate and undergraduate degrees.

I happen to work with some engineers and I can say most of them are in fact doing quite well financially. Petroleum engineers can easily make six-figures a year straight out of university if they’re willing to work in the oil fields. Software, materials, and industrial engineers, all make above average incomes too.

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The personal finance blogging community also shows categorical evidence that engineers are indeed a financially savvy bunch 😉 Tim from Canadian Dream is in his 30s and reveals he makes six-figures a year working as an engineer for a crown corporation. 34 year old Frugal Trader from Million Dollar Journey recently reached a household net worth of a million dollars. Both him and his wife are full time engineers. And Phil, one of the most knowledgeable commentators who read my blog, met his wife in their engineering class at university. He retired in his 40s after reaching millionaire status and is now doing lots of volunteering work.

Of course at the end of the day it takes more than just a degree to become a millionaire. Having certain soft skills and personality traits are important as well. This means we should be efficient, personable, seize opportunities when they arise, and know when to take risks (both professionally and financially.) The point of a degree, above anything else, is about showing an ability and willingness to learn.

Here are what random denizens of the internet had to say about the wealth study.

“Most millionaires I know drive around in old Ford trucks and have jeans with holes in them; not sitting in a park wearing a tux with a top hat.”

“The only real way to become truly wealthy is to engage in something with substantial risk, though often you can substitute some of that risk by exploiting people. And even so, your chances are pretty good that you will lose your pants instead.”

“One of my best friends growing up got kicked out of high school during his junior year. He worked as a plumber’s helper and now owns three plumbing companies and retired eight years ago at age 45.”

Although there are many ways to become a millionaire and retire early, earning a degree in engineering, MBA, or economics seems to be a popular way to do it! However I have tried to go down that path and failed miserably, so it’s not the right strategy for everyone.

 

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Random Useless Fact:

Dilemma is a difficult choice between just 2 options. Trilemma, quadrilemma, and so forth exist for more options.

Jul 172014
 

I was kicked out of university after my first year 😕 I had it coming though since I was probably the worst student on campus. But overall I’m glad I still enrolled, even if the experience was short lived. Going to university made me realize what really matters in my life.

It all started back in 2005 in my final year of high school. My application for the 4-year Bachelor of Commerce program at the University of British Columbia (UBC) was rejected because my “B” average grades weren’t high enough for their fancy business school 😡 But I managed to get into the Applied Science undergrad program instead, which is basically engineering 😀

I wanted to do cool things in my first year at UBC like blow things up, or learn to build rockets or design robots. But nope. All they had me do was write reports, read text books, and solve equations. It all just felt dry and boring 😐

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I quickly lost interest in all my courses. Instead of attending my own classes I started to sit in on lectures about astronomy and business technology, which were not part of my curriculum but they were more interesting 😀 I also spent a lot of time playing video games, reading fiction, and watching the serial drama LOST 🙂 I had pretty much stopped going to all of my classes entirely.

Time flies when I procrastinate and before long it was mid terms season. Unlike high school, tests and exams in university make up the bulk of a student’s final grade. So I thought as long as I still show up for my exams and do well, then I can still pass the year 😀 I also figured I can just cram the night before an exam.

But I might have slightly overestimated my academic abilities. The science exams were brutally difficult. I only knew the answers for two blanks on the physics test – my name, and the date. And I wasn’t even sure about the date 😕 I spent more time making doodles on the pages than solving actual problems (-_-;) I was completely out of my element for the chemistry test as well. I was so frustrated I wanted to just take all the questions on the test and Barium 😀 *badum tss*

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The English exam was even more challenging. My brain went completely blank.

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For one part of the test I had to write a paragraph to either argue for, or argue against an idea in this book that we were suppose to have read. But I hate arguing. Why can’t we all just get along? Plus, I didn’t read the book, which was a bit of an inconvenience since that was the main focus of the exam 😐 So for my answer I diplomatically wrote “Let’s all just agree to disagree.”

The math exam was the worst. I’m not very skilled at math to begin with. The equation 2n+2n is just 4n to me 😀 And most of the questions on the test weren’t even practical. I suppose decimals have a point. But how often is differential calculus used by average people in real life? Needless to say I only completed about half the questions 🙁

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I thought I could ace my mid terms with minimal studying. I had never been so wrong in my life. When the marks came back it turned out I answered none of the questions right on the math test. But I did receive 2 marks for showing my work, which is nice 🙂 So overall I got 2 out of 80 possible marks on my math mid term, or 2.5%. I was a bit disappointed. But hey, things could have been worse 😉

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Jan 122012
 

The provincial government is giving us the opportunity to balance its budget. This is normally the responsibility of the finance minister but now we can voice our opinions as well.
What a great idea. Unfortunately what I really want to see are the live results of everyone’s inputs because it’s not like they don’t have that data already. Maybe they’ll post it up later with the final numbers but I doubt it. Governments are not known to be transparent.

Even if you don’t submit your ideas you can learn how we’re being taxed, and where those tax dollars are being used on. I’m surprised how much of the pie health and education take up. Health supports the old, and education supports the young, no wonder the working age people are getting taxed so much. Perhaps we should look at alternatives to health and education in Canada. Right now it seems like the waiting list for just about anything is too long. Other developed nations like Switzerland for example, has a 2 tiered health care program so people can either wait for a long time to have an operation, or pay money for quicker treatment. I work at a post-secondary private school. Our students have higher rates of employment than traditional universities, despite students paying the same amount of tuition to graduate. More solutions like these will take the stress off our public system and boost the economy by creating supply where there is actually demand. But what’s good for the economy doesn’t necessarily benefit everyone. I doubt current health and education workers want to lose their jobs. I hope we can find a happy medium to balance the books. In the meantime, save, invest, and continue to take control of your own money.