Sunday’s posts around here are going to be pretty short, since Sunday is a day to be lazy. I’ll leave you with a question:
How the heck is a particular brand of yogurt supposed to stand out? Your ideas are welcome.
Here’s my idea: Have the container shaped like a cow’s head. That would be worth talking about, at least for a little while.
A big topic in the personal finance blogosphere these days is the spend less or earn more argument. On the one side, we have Ramit from I Will Teach You To Be Rich telling his readers to earn more and just focus on big expenses. He doesn’t believe that the small steps of frugality are very effective compared to earning more.
Then we have Trent from The Simple Dollar. Trent’s argument is that if a person changes 50 little things, then they’re looking at their finances in a whole new light. Because they’re serious about changing their finances, they have a better job of succeeding.
Financial Uproar’s longest and biggest fan, EngineerYourFinances has one of the better posts on the topic, definitely worth a couple minutes of your time. His argument is that people should work on both, hereby reaping the most rewards.
Guess what? They’re all right.
People writing personal finance blogs sometimes forget that there are different ways to accomplish the same goal. There is no one way to get wealthy. There are people who have spent their entire lives being frugal, scrimping and saving every penny, who end up wealthy. There are people who are, at first glance, absolutely terrible at money management. They spend money on cars, vacations, whatever. But they make enough to make up for it. And they end up wealthy too. The only set formula for accumulating wealth is spending less than you make.
What do you think Trent would say if I told him that I eat lunch out almost every day? I’m sure he’d respond with links to his favorite posts about how much money one wastes on the little things. $10 per day translates into $3000 per year, which if you invested it, you’d end up with however much less at retirement…
Blah, blah, blah.
I’m not motivated by cutting things out of my life. I like eating out. I like drinking bottled water. I like having a laptop at both the office and at home. There’s probably a hundred other things I could cut as well. But I won’t, because I don’t care. Earning more? Love it. Motivates the heck out of me.
If you know, deep down inside, that you won’t be motivated by spending less or by earning more, then don’t do it. So if you’re spending 110% of your income, find a way to get that to 90%. I don’t care if you cut spending, or earn more, or do a combination of the two. I just want you to do it.
Remember, you can’t spell personal finance without personal. As long as someone is getting results with the method they choose to use, then they can use whatever method they want.
My battery powered toothbrush died recently.
That wasn’t a big deal, until I tried to open the compartment to change the batteries. No matter how hard I tried, the damn thing would not open. After 15 minutes, I gave up.
Since it’s only a toothbrush, I went to the local big box store to buy another. I went to the toothbrush section, and saw a competitor’s toothbrush was two dollars cheaper.
So I bought it instead.
Here’s the thing about toothbrushes: I don’t care. All I care about is that it does the job. I am a bad toothbrush customer.
There are good toothbrush customers. There are people who are willing to pay hundreds of dollars for a good toothbrush. Those people’s dentist probably never yells at them either.
If you sold toothbrushes, who would you rather have as a customer?
Think about what you sell. How are you marketing to your best customers? Are you marketing to your worst customers without even realizing it? What would happen if you simply got rid of your worst customers?
I’m not sure that people appreciate how much design matters for a successful product or service. Design what you do well, and you’ll find customers who care. There are people who care passionately about what you do. Find them and design the product for them.
Starbucks designed a better cup of coffee. Whole Foods designed an entirely new shopping experience. MLB Trade Rumors designed a whole website dedicated to baseball trade RUMORS.
Maybe today is the day you stop trying to sell everyone on what you do.
Roger’s Sugar (RSI.UN-Toronto) is basically the only company in Canada that sells sugar. Thanks to the Canadian Government placing tariffs on imported sugar, no foreign companies can sell sugar in Canada and be competitive. Even though there are more and more people who are placing an emphasis on healthier eating, the sugar market in Canada is pretty steady.
I bought the company about 5 years ago, for a hair under $4. The company trades at the $4.80 level today. When I bought Roger’s, they paid a monthly distribution at a little over 3 cents a share. (if my memory serves me right, it was 40 cents a year) Today, the distribution is over 48 cents per year. A 20% growth in distributions over 5 years is hardly worth getting excited over, but then again, it’s the sugar business. I didn’t expect a huge increase. All in all, I’m pretty satisfied with the investment.
So why am I thinking of selling? First of all, sugar prices just hit a 29 year high. At first glance, it doesn’t seem like a big deal. Roger’s is basically the middleman. They acquire the sugar, refine it, and then sell it. Being the only game in town, they can just pass the increased costs to customers. It’s a pretty attractive spot to be in for the company. But food companies respond by jacking up their prices, perhaps reducing demand for their sweet goods.
Another thing that concerns me is the 600 pound gorilla of the sugar business, High Fructose Corn Syrup. Many companies have moved away from sugar in their products, in favor of HFCS. While the health consequences on HFCS will be debated for a long time to come, it still poses a risk to the sugar business.
Then there’s the whole income trust conversion thing coming up in 2011. It looks like the company isn’t going to convert, making any distribution fully taxable. Suddenly my 12% yield on cost becomes a lot less attractive.
With all these negative things surrounding the company, will I sell? I don’t know, but I’m definitely thinking seriously about it. I’ll let you guys know either way.
I’m a member of a local credit union. For the most part, my credit union is fantastic. They know my name, they call me if they have any questions, plus the girls they have generally are pretty cute. Oh, and competent.
I understand the love in that most bloggers have about banks like ING Direct. You pay absolutely nothing in fees. You get a better interest rate. Sub accounts are easy to set up. I get all that. I just don’t think they’re as good as everyone says.
And let’s not forget the big reason why these bloggers push online banks so much; the signup bonuses! Getting 10 readers to sign up at $25 per reader equals a pretty profitable blog post. I wonder why the inherent conflict of interest it creates isn’t ever discussed…
Anyway, here’s 4 reasons why you should rethink your online savings account:
1. Customer Service: When you call or email ING Direct, does the person answering know you? Didn’t think so. Don’t underestimate the effect of your local bank knowing your name.
2. Limited Service: Unlike most of you, I don’t get paid via direct deposit. I’m not even sure how I’d go about getting a cheque to an online only bank. Would I mail it to them? Put it in an ATM? I’d just rather take it down to the local branch.
3. Who Does All Their Business At One Bank Anymore: I have an account at my local CU, a credit card at BMO, another credit card at Capital One, my mortgage at Firstline (part of CIBC) and one of my businesses has an account at ATB.
4. The Girls Are Cute: Did I mention that already?
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