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Saturday Morning Dump- Link The Link

 Saturday Link Dump  4 Responses »
Feb 262011
 

As most of you know, I rent out my basement. What I do every month is use that money as my disposable income for the month, using it to buy stuff like food, toiletries, entertainment, etc. My other bills get charged on my credit card, and I just pay that off every month, providing I can actually remember my online banking password. The system works pretty well for me.

What used to happen is I’d run out of cash a few days before the end of the month, usually just using my credit card to pay for the $100 or so worth of stuff before I’d get more money. Every month I’d vow to tighten my spending a little to save that $100, but most months wouldn’t really work out that well.

All that changed now that I’m eating healthier. I’ll end up with easily $200 in my pocket at the end of this month, unless I spend like a drunken sailor this weekend. So not only does eating healthy help the waistline, it helps the wallet too, at least for me.

What should I spend my $200 on? I’m thinking strippers.

Random Thing That Irritated Me This Week

I found out some more details about the redhead this week, concerning why she didn’t succumb to my irresistible advances. It turns out that she only intends on finishing out the school year here, and then she’s going to leave town forever. This is a quite reasonable excuse for not going out with me, I think anyway. I can understand the logic behind it.

Why does it make me angry? Because I heard it from a mutual friend and not from her. Ladies, please just tell the truth. As my old pal Kevin O’Leary likes to say on Dragon’s Den, the truth will set you free.

Speaking of Dragon’s Den, Brett Wilson is leaving the show. That’s too bad. I liked Brett.

Random Thing I Enjoyed This Week

I watched some curling this week and the sport is kind of growing on me.

It doesn’t hurt that some of the girls are CUTE either. Kind of like my love of baseball, curling is the perfect sport to watch while hanging out with your friends or playing around on your laptop. The game doesn’t go so fast that it requires total concentration. I don’t understand everything about the game by any means, but consider me a casual fan.

If I was in charge of curling though, I’d make one change. No more cowbells. I hate cowbells so much.

Song I Like And Therefore You Should Too

I was singing this song today as I froze my ASS off loading chips. It’s definitely a classic.

I’m not sure if this is my favorite Beatles song or if Let It Be is better. They’re both pretty good, so go check out Let It Be.

True story: The Big Cajun Man is so old that he was actually at Woodstock, yelling at the teenagers to get off the lawn.

Simpsons Quote Of The Week

Homer: If you really want something in this life, you have to work for it – Now quiet, they’re about to announce the lottery numbers!

Sports You Should Watch This Week

It’s the end of February. You can either watch spring training baseball or the Leafs fall short of a playoff spot.

The trade deadline for the NHL is on Monday, which might be fun if there’s any trades left.

Only two and a half weeks until March Madness.

Blogging Snack of The Week

This isn’t really a snack, but I’ve really been loving Frank’s Red Hot Sauce lately. Hot sauce gives those bland foods just the kick they need to be tasty. I put it all over some chicken I had for supper the other night and it was LIKE SEX IN MY MOUTH.

How can a condiment be the snack of the week? When I eat a lot of vegetables, that’s what you get. Also, if the Frank’s Red Hot people are reading this, put your sauce in a squeeze bottle. Glass is just annoying.

Speaking of vegetables, my girl Money Rabbit has decided to go vegetarian. If I had to choose meat or her, I think I’d choose meat. Vegetables suck compared to meat. There’s something manly about eating meat. I feel like a pansy when I ask for vegetables. Sorry Money Rabbit, I think it’s over. I definitely want to remain friends though, because you guys all know how much I love that.

Babe Loosely Related To Finance

I strongly contemplated going with another curler, but I won’t. I spoil you guys.

I cannot believe I haven’t used Kim Kardashian yet. You’re welcome.

I was watching an episode of the reality show with Kim and her sisters, where the girls were fighting for a reason that isn’t important. At one point in the fight, Kim made fun of her sisters for being stupid and not being good business women. The irony was amusing.

Oh Right, Time For Links

Terrific post by Sandy at Yes I Am Cheap about her childhood growing up poor. I sort of grew up poor, meaning my parents had a couple of bucks, but they (especially my Dad) wouldn’t spend any of it. I can relate, but only kind of.

Frank Voisin takes a look at Diana Shipping and concludes it’s the best out of all the shipping stocks. I’ve been researching the shippers lately and I like Diana except for the fact it doesn’t pay a dividend. They don’t have much debt and their ships are quite new. I may be plunking down some money on a shipping stock or two soon.

My other bad tenant story was on My Tenant From Hell. Alas, I have no more bad tenant stories.

I liked The Perfect Retirement Myth over at Money Smarts Blog. People spend way too much time and energy stressing about how much money they’ll need for the perfect retirement. They want to travel and do all sorts of extravagant stuff, and then realize when it finally is time to retire that they’re too old to have the energy for anything more than a cruise once a year.

Speaking of retirement, over at Canadian Dream: Free at 45, there was a post that had an interesting idea for living arrangements for retirees looking to save some money.

The Canadian Finance Blog tells you how to save money buying a vacuum cleaner. I got my vacuum cleaner when the previous owner of my house forgot to take it with them when they moved. Score one for me.

Carnivals I Was In This Week

I was in the Carnival of Personal Finance over at Money Smart Life.

I also sexied up the Totally Money Carnival with my presence.

Tom was very nice to include my late submission into the Canadian Finance Carnival.

Have a good week everyone.

 Posted by Nelson Smith at 12:14 am

Mortgage Basics #5: Fixed or Variable Rate?

 Mortgage Basics  8 Responses »
Feb 232011
 

Here’s part 5 of my 10 step series on mortgages here at Financial Uproar every Wednesday.  Every step of the process will be covered from the application to qualifying to tips and tricks to save money on your mortgage and everything in between. To read all of these just click on the category Mortgage Basics.

Like every good question, the fixed vs. variable rate mortgage is a debate with merit on both sides. While variable rate mortgages have traditionally been a money saver compared their fixed rate counterparts, sometimes the benefits of a certainty that a fixed rate offers will trump any cost savings offered by variable rates. It is, like many decisions in personal finance, a strictly personal decision.

How does someone decide whether to go with a fixed or variable rate? There are numerous factors that could factor into the decision.

Advantages of Variable Rate Mortgages

Traditionally, borrowers have been better off if they took a variable rate mortgage. According to mortgage guru Moshe Milevsky in a study published in 2001, variable rate mortgages came out ahead of their fixed rate counterparts 88% of the time since 1950. On a house worth hundreds of thousands of dollars these savings can be substantial, especially when expressed over 20 or more years. Someone can save tens of thousands by taking out a variable rate mortgage.

When I bought my house in mid 2008, I took out a variable rate mortgage. By the time mortgage rates hit their lows in mid 2009 I had kept my payment fairly consistent while cutting my amortization down from 25 years to just a hair over 17 years. Because my interest rate was so low I was making substantially more progress on principle.

Advantages of Fixed Rate Mortgages

Advocates of fixed rate mortgages often cite the stability of the payment as the biggest advantage of having a fixed rate and they are absolutely correct. The borrowers who take on the standard 5 year fixed loan take comfort that their payment will be the same every month, no matter what interest rates do. For them, taking out the fixed rate hedges their interest rate risk. They feel secure with their payment and to them, that is worth every penny in excess interest they may pay.

What About Now? Fixed or Variable?

As I write this, borrowers can get a five year fixed mortgage for 3.99% while a variable rate can be had for prime – .70%. (2.30%) Typically the spread between fixed and variable tends to sit right around 1.5%.

The question a borrower has to ask themselves is this: Over the next 3 years or so, will rates increase by more than 2-3%? If the economy recovers and the dollar remains strong in Canada, this is a distinct possibility. Also, one has to remember that prime has historically sat in the 5-7% range in Canada, barring the crazy heights of the 80s and the lows of the last couple of years. So if prime returns to a more normal level by 2012 or so then any advantage variable may have had would be largely gone.

Saying all of that, one could probably make an equally convincing argument that mortgage rates won’t climb that much by 2012-13. Economic growth is sluggish, inflation is tame and the central bank has no real short term incentive to tighten rates. Predicting interest rates will always be a sucker’s bet, the fixed rate camp would say, so why try?

Can’t Make Up Your Mind?

Then why not try one of those hybrid products that are half variable rate and half fixed rate? Another option is to get a fixed rate, but for a shorter time frame- say 1 to 2 years. These rates will be closer to prime, giving the borrower a lower rate, as well as locked in, giving the borrower security. The only downfall to this plan is having to renew every 1 to 2 years, a process that can be time consuming if you take the time to shop around.

Ultimately, saving money should be the borrower’s chief concern, and typically variable rates end up cheaper than fixed. If you’re so risk adverse that a variable rate will add stress to your life, then fixed is the way to go. Like many personal finance decisions, this one can go deeper than the numbers.

 Posted by Nelson Smith at 3:05 pm

The Beginning Of The End For Wal-Mart?

 Big Picture Stuff  13 Responses »
Feb 222011
 

Tweet While watching CNBC today, one of the big stories was Wal-Mart’s quarterly earnings. While earnings beat analyst’s expectations by 3 cents, the stock is down in this afternoon’s trading session because Wal-Mart’s U.S. same store sales were down 1.8%, marking the 7th consecutive quarterly decline. For those of you in the dark about same store sales, the metric is Read More [...]

 Posted by Nelson Smith at 7:58 pm

Saturday Morning Dump- Golf Links

 Saturday Link Dump  12 Responses »
Feb 192011
 

Tweet For those of you not paying attention to my Twitter feed, this week was interesting to say the least. I decided that Valentine’s Day was my best shot with the redhead, so I went for the gusto and got her some flowers. I simply wrote “hope you enjoy the flowers, how about dinner sometime” on the card and made Read More [...]

 Posted by Nelson Smith at 12:15 am

Why I Donate Very Little To Charity

 Big Picture Stuff  8 Responses »
Feb 182011
 

Tweet Get out your pitchforks and torches! There’s gonna be an angry mob waiting for me at the end of this post! I donated such a small amount of money to charity last year I should probably be ashamed of myself. I donated a small amount to the library, as well as a small amount to the food bank and Read More [...]

 Posted by Nelson Smith at 12:15 am
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