March 12, 2018

Think Twice Before Committing to The Home Buyers’ Plan

Today, we’re going to talk about one of our biggest financial mistakes over the years. It relates to the appealing Home Buyers’ Plan (HBP). Our young selves happily lunged into it acquiring our present house more than 15 years ago. At the time, it seemed like a very wise decision and the strategy provided us with a substantial chunk of change that greatly helped us in the short term. With retrospect, it now looks more and more like a very poor financial choice that considerably cost us in the long haul.

Everybody would love to, one day, have a nice home. For many, owning a big house is synonymous with financial success.

For most young folks, becoming a homeowner seems like a steep financial achievement and many may think it will remain only a distant dream. Then, they hear about the Home Buyers’ Plan (HBP) and their dream suddenly becomes more accessible. They see no-hassle free money that potentially can boost their house down payment (maybe a mistake). For some, the HBP may even provide the only cash to finance their once unattainable dream (definitively a mistake).

Fiscal Debt That Can Have Significant Long-Term Repercussions

The HBP allows you to avoid paying taxes on some RRSP withdrawals if you use those funds to buy your first house. After a two-year grace period, you have 15 years to repay your RRSP. The problem is that for most participants, the resulting tax bill will end up costing them much more in the future. The long-term implications and financial impact of that heftier tax bill cannot be ignored.

It makes no sense to withdraw from your RRSP avoiding only a 25-30% tax bill and later, to repay your RRSP with an ensuing 45-50% tax cost.

March 03, 2018

12-Minute Diet and Meal Planner (Revisited)

The 12-Minute Series was originally posted in 2012.

We’ve decided to republish it integrally because we believe it can still help as everyone aspires to make things better.

Let’s hope it stirs up the discussion and stimulates you to change the world 12-Minute at a time!

This article was originally posted on August 12, 2012

When it comes down to food, the 12-Minute Way can be quite useful to help you manage your diet and plan your meals. 

There’s more to it than the common dozen eggs.

Because approximately 40% of food goes to waste in America, an incredible opportunity for improvement exists in the vast food domain, an opportunity to save precious resources and money.

But also an opportunity to reduce stress and free up some of your schedule because, day after day, food preparation can sometimes be pretty hectic and time consuming.

February 24, 2018

Fixed vs Variable Mortgage Rate Mistake

In the fixed-versus-variable mortgage rate debate, one cannot argue that historically, variable rates have been a better long-term option. There’s still some risk associated to the variable option if interest rates happen to rise. With the fixed option, you are basically offered to pay a premium to kind of take out that risk.

But things are not that simple and obvious. In practice, rates would have to rise fast and rise a lot to really hammer down the variable option and make it the worse choice. In the end, in most cases, the fixed rate premium may simply be too costly. At least, that’s what we learned from our personal experience.

To make a long story shorter, we started our mortgage life using the optimal variable-rate option for the first 5 years. In 2006, we switched to a fixed rate afraid of a hike. In fact, that dreaded eventuality only manifested itself timidly more than 10 years later, in 2017. Choosing the fixed option was a mistake. That huge misstep cost us about 10K$ only in interest in the following 5 years. Because the amazing power of compound interest works both ways, our mistake surely cost us thousands more since then.

Drawing conclusions may be easy after the fact, but this is a classic case where your emotions get in the way of sensible financial decisions.

In late 2010, we were already convinced about Variable Rates being The Right Long-Term Choice For Our Mortgage yet we struggled and still made what appears like the safer choice locking in a fixed rate for 5 more years.  With retrospect, that decision was not as bad because the spread between variable and fixed rates remained much smaller. In the end, it looks like it will cost us only a couple hundred dollars more.

The great news is that our mortgage is now virtually paid off, eliminating additional opportunities to make the same mistake again and again.

Still on the bright side, we are doing very well financially despite several mistakes of the same magnitude. It looks like it's not about being perfect, but rather more about learning, working thru it and being good on average. 

Photo Credit

February 21, 2018

Utilities on Our Radar

By nature, steady utility stocks can provide a rock-solid base for any portfolio. They sure bode well with our long-term relatively conservative approach.

Usually, the problem can be to acquire them at attractive prices as they rarely fluctuate a lot and hence, get on sale. Luckily, things may be different lately as circumstances like changing interest rates and new US tax regulations are hammering down many utility stocks.

Most people may think it’s a bad thing as they won’t like seeing their stocks go down. But like us, savvy investors just see it as a unique opportunity to buy additional shares at low prices.

Many utility giants with a proven long-term track record will easily adjust and do very well in the long haul after these short-term setbacks.

Although we won’t stop using them in the near future, oil and gas alternatives are becoming less popular and won’t last forever. That’s why we now prefer corporations that focus more on electricity and renewable energies.

Here are some utility stocks on top of our Watch List right now:

February 12, 2018

Portfolio Update February 2018

Today, we are glad to provide you the latest update of our DIY Portfolio. As usual, our next update can be expected in about 12 weeks, in May 2018.

Meanwhile, you can have a look at previous portfolio updates here:

Somewhat surprisingly, the global markets context has not changed much in the last few months. Again, we are one trigger-happy finger away from disaster. So far, markets don’t seem to mind at all. We only saw some blemishes in the last days of January, perhaps more related to probable interest rate hikes. Are early February steep declines a hint of things to come?

February 03, 2018

12-Minute Ways to Have a Better Day (Revisited)

The 12-Minute Series was originally posted in 2012.

We’ve decided to republish it integrally because we believe it can still help as everyone aspires to make things better.

Let’s hope it stirs up the discussion and stimulates you to change the world 12-Minute at a time!

This article was originally posted on July 12, 2012

Here are some simple 12-Minute Ideas to help things go smoothly; to have a brighter and merrier day.

Sometimes, 12-Minute it’s all it takes!

1-Wake Up 12-Minute Earlier

This will allow you to take time to smell the roses and relax before you start your morning routine or
to take a little more time before you embark in a busy work day.  

2-Take 12-Minute to Breathe

Take a break during an hectic day and just breathe!

3-Invest 12-Minute to Plan Your Day

Plan you day early in the morning or the next one late at night.