Jun 202016

UK’s Upcoming EU Referendum

The United Kingdom will hold a historical referendum later this week to let its people decide if it should remain in the European Union or not. There are a lot of issues driving the debate in Britain including immigration, sovereignty, defence, etc. But the financial factors are the most interesting to me so let’s break down some of those. 🙂

Advocates for Britain to exit the EU, or a “Brexit” scenario, argue that the EU is holding back Britain’s potential for international trade. If Britain leaves it will be able to make free-trade agreements more easily with India and China, which it doesn’t have yet due to current EU regulations. On the other hand, more than 40% of Britain’s exports go to other EU countries. Putting up barriers between its largest trading partner could hurt Britain’s exports.

There are about 3 million jobs in the UK that are linked to the EU. Leaving the EU could put some of these jobs at risk. But at the same time it may also create new opportunities for businesses to grow and hire since the UK could incentivise investments through low corporate taxes under it’s own policies.

London is a large financial hub. But some believe if Britain leaves the EU, it will lose the trading advantages of being in a larger market. Britain’s economy may suffer which could force financial institutions to leave the UK and the iconic city of London. But the Brexit camp says that due to low tax rates, banks of all types will still want to be headquartered in Britain. Speaking of banks, I’m not sure how many kidney banks are in the UK, but I know there is only one Liverpool.

Similar to federal transfer programs in Canada and the U.S. The European Union subsidizes its financially weaker economies with the money from other members. According to the BBC, the UK contributes £8.39 billion ($12.3 USD) each year to Brussels for the EU budget. This figure is net contributions, after subtracting rebates and receipts back from the EU. Britain would not have to pay this anymore if it exits. In the few minutes it takes a person to read this blog post, Britain will have paid another £50,000 to the EU in membership fees alone. 😕

Norway and Switzerland are not part of the European Union, and they have lower unemployment rates than both the UK and the average of the 28 EU countries.


But who knows. Maybe it’s just a coincidence, and doesn’t have much to do with how they make their own labor and economic laws that work best for their own people instead of following rules made all the way in Brussels.

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Jul 012015

The European debt crisis is so confusing, it’s like Greek to me. lol 😀 As of yesterday Greece became the first developed country to default to the International Monetary Fund (IMF) to the tune of €1.6 billion. Overall Greece owes about €300 billion to all its creditors.


A referendum in Greece will be held this upcoming weekend to decide if the Greek people would like to stay in the European Union and continue using the Euro, or exit the EU and revert back to their old national currency. What happens next is the million-euro question. A Greece exit (Grexit) should not have a large direct impact on other countries. But here are some lessens we can take away from the predicament facing Greece right now.

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Dec 232013

I recently posted an article introducing the TD e-Series mutual funds and how to open up an account. These are easy to understand, low cost funds that are simple and easy to manage with no trading commission. In today’s post I’ll go over how to buy and sell these funds, and explain some creative strategies for using them 🙂

For today’s example we’ll invest $500 into the e-Series fund TD European Index – e, which aims to track the MSCI Europe Index. It has an MER of 0.51% and holds about 600 companies including large multinationals like Royal Dutch Shell, HSBC, Roche Holding, and Nestle SA. Mmmm, chocolate (^_^)

I detailed 2 methods on how to set up an e-Series account in the previous post. Depending on which of those method you used the trading procedure will be slightly different.

Using TD e-Series Accounts:

If you have your e-Series account set up with TD Canada Trust you can use the following steps.

  • Step 1: Log in to EasyWeb and click on the subtab “Investments” near the top. Then click on “Purchase Mutual Funds” on the left.
  • Step 2: Under the Fund Category drop down menu select “Global Equity” since that’s where we’ll find our European fund 🙂
  • Step 3: Under the Fund drop down menu select “TD European Index -e**
  • Step 4: Enter how much you want to buy in $. Mutual funds can be purchased in fractional units. Click the “Next” button and then “Finish” when done. The money will automatically come out of your TD bank account and into the e-Series mutual fund account. Note that the minimum purchase amount is 100$. But you can set up a pre-authorised monthly purchase plan for as low as $25.
  • Step 5: Check your mutual fund account the following day and you will see your newly purchased units 🙂 To sell your e-Series funds, simply click on “Redeem Mutual Funds,” and follow the website’s instructions.

13-12-tdeseries-op1j using TD e-Series

If you have a TD Waterhouse/Direct Investing account, then just log in to WebBroker, and make the purchase the same way you would for any other mutual fund.
Step 1: On the left hand side of the website interface select “Mutual Funds” under the “Order Entry” menu.
Step 2: Enter the fund symbol (eg: TDB906 in today’s example) and the amount you would like to buy.

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Jun 122012

Money and Banks

Spain will be getting a bailout package up to €100 billion from the Euro zone.  The idea of injecting this new money into the system is to help stabilize the banks and the economy. It sounds like a good idea on paper. Below is a funny comic I found showing the effects of lending money to an indebted economy.

source: via 9gag.com

But the reality of bailouts are more complicated and sometimes bring more bad news than good news. In the comic strip above the net debt everyone owes is zero. But in reality Greece, Ireland, Portugal, and now Spain all have a negative net worth. Instead of “he owes me and I owe her,” the situation in these countries is more like “we all owe the bank.” But the banks are sitting on mountains of debt as well from bad real estate loans, similar to what happened in the US.

Also, money is not free. So unlike the comic, when Spain takes on a bailout package it has to pay interest on it. Normally if a person was in a lot of debt, the best thing to do is cut discretionary spending, find ways to make more money, and save, not borrow even more money. But Spain is doing the opposite of that, taking on up to €100 billion ($125 billion) of more debt with no plans to cut its own spending. This is why stock markets have reacted negatively to this news. Bailouts are temporary solutions to a long-term problem. But to have a sustainable economy everyone has to pull their own weight.


Random Useless Fact:

Men’s shirts have the buttons on the right side, while women’s shirts have them on the left.

Jun 092012
The latest employment numbers just came out for May and it’s very neutral. Our unemployment rate remains unchanged from last month at 7.3%.  Taking a closer look at the numbers however we see that unemployment in BC actually jumped up from 6.2% to 7.4%.  Unfortunately if you are looking for work in Vancouver, it is statistically harder for you to find a job now than the month before.  But don’t give up. The next big opportunity could be right around the corner. Just have to keep looking. Plus at least we’re nowhere close to what Europe is going through right now.
*Side Income:
  • Part-Time Work = $1400
  • Dividends = $200

*Discretionary Spending:

  • Eating Out = $100
  • Others = $200

*Net Worth: (MoM)

  • Assets:
  • Cash = $2,000 (-$1000)
  • Stocks = $68,400 (-$1,300)
  • RRSP = $20,700 (-$1,000)
  • Home  = $248,000
  • Liabilities:
  • Mortgage = $206,800 (-$400)
  • Margin Loan = $17,400 (-$1,300)
  • Bank Loans = $0 (-$400)

*Total Net Worth = $114,900 (-1.03%) 

My net worth hasn’t really moved much in the last 3 months. But the stock market index has dropped more than 10% since March. I think this might be the buying opportunity of the year. I already invested almost $6,000 so far in June. If the market continues to slide down I will buy another $10,000 of stocks. If it goes down even further, I’ll invest another $15,000. At some point in the future the market has to recover so the lower it dives the more I’ll invest. It sounds like a risky strategy but doesn’t it make sense from a long term investment point of view? Maybe not, I don’t know. Let’s see if Greece and Spain can sort themselves out first. Time to print some Euros and make money out of thin air.

* Numbers are rounded to the nearest $100.