How Much Does It Cost to Plug Your Car In?

How Much Does It Cost to Plug Your Car In?

Although the calendar is about to change over to March (the month named after a Nazi rally, and no I’m not looking that up you’ll just have to trust me on it), my car is currently plugged in outside. The forecast calls for -28 when I’ll be leaving tomorrow. Brr.

For those of you lucky enough to live in warmer climates (don’t worry Canadians, the global warming will get to us soon enough), the reason why us on the prairies plug our cars in is when it gets below -20 or so the oil starts to freeze inside the car’s engine. Plugging in the car’s block heater warms up the oil, which then moves freely when the car is started. It’s a pretty ingenious little invention, actually. I’m going to start telling people I came up with it.

They’ll totally believe me, right?

The thing with plugging your car in is it gets a little expensive, or so they say. Don’t worry, we’ve come up with a solution to that, too. You can buy a timer that kicks in a few hours before you have to leave in the morning, ensuring the oil gets sufficiently heated without driving up the ol’ electric bill. Timers cost about $20, depending on how fancy the model is.

But is it actually worth it? Or are dads everywhere right about how plugging your car in costs a fortune? Let’s take a closer look at exactly how much it’ll set you back?

Electricity costs

Once we figure out a couple of variables it’ll be easy to figure out how much it costs to plug your car in.

Let’s start with the price of power, first. Since I live in cold, freedom loving Alberta, we’ll use the spot price here as our guide. That comes to approximately $0.05 per kilowatt. We’ll ignore all the administration fees and other such fixed costs, since we’d be shelling out for them anyway. We’re also going to ignore Alberta’s dreaded CARBON TAX.

Compare that to Ontario, which can pay up to $0.15 per kilowatt hour. Ha! Take that, Ontario. Alberta wins again. Quebec, meanwhile, pays just a little more than Alberta, at about $0.06 per kilowatt hour. Note that Alberta’s energy prices swing more wildly than Quebec’s, meaning Quebecers likely get the better long-term deal.

Wattage of the block heater

Next we have to determine how much electricity you’d use plugging your car in. I was originally told the contraption was more than 1,000 watts, which means it used a kilowatt of energy every hour. This could add up over the course of a whole night.

But that just isn’t true. A little research (read: paying some dumbass kids the change from my pocket to do a little googling) and I discovered your car’s block heater is likely using 350 to 500 watts per hour. Some larger trucks are using 1,000 watts or even more, but you probably don’t drive one of those.

Then it’s a matter of just doing the math. I pay $0.05 per kilowatt of energy. If my car uses 500 watts to run the block heater (which is high, my Buick is likely closer to 350), that means I’m at a mere $0.025 per hour to run my block heater. It turns out it doesn’t cost very much to plug my car in.

Add in the additional costs of getting your power to your house and it still doesn’t cost much to leave your car plugged in all night. We’re looking at about $0.50, max. That’s basically nothing. You still might want to get the timer though, since even saving $0.25 each night can add up to the point where it becomes a good investment over the course of a few winters.

How this has affected my behavior

I figure I plug my car in between 10 and 15 times each winter. This means I would be spending anywhere from $5 to $10 each year on it. I could get a timer and reduce my expenditures by a few bucks, but now that I’ve done the math it isn’t a priority.

Before, I would get up early in the morning and sneak outside to plug my car a couple hours before I had to go somewhere. I don’t do this any longer. I’ll plug it in when I get home the night before and not worry about the cost.

Is it really worth saving a lousy quarter to have to go outside in -30 weather?

Hell, maybe I should take this a step further and just call a cab on those super cold winter days.

Some Random Thoughts Inspired By My Grocery Store Job

Some Random Thoughts Inspired By My Grocery Store Job

I’ve been spending quite a bit of time lately at the ol’ grocery store, moving product from one spot to another while some pretty significant renovations are being done. You might think this is terrible busy work but I’m fascinated by it. Unlike other chains, which have identical plans for each section, this company basically says to me “do it however you want. We trust you to make it pretty.” It’s great fun.

And for some reason they continue to tolerate me even though I bring all sorts of baggage. I spent 40 minutes the other day just weeping in the middle of an aisle. Nobody said a word, although that might have been out of embarrassment.

So that’s given me time to do a little more thinking and a little less writing. Here are some of the many thoughts that have been rolling through my head.

Cold medicine

Much of the work lately has been in the health and beauty section, which was accompanied by 14,000 terrible jokes about pregnancy kits. “Oh, you touched that? THE BOX SAYS POSITIVE. THAT MEANS YOU’RE PREGNANT.”

“Uh, Nelson? I’m a dude.”

“That’s the only problem you have with that joke? Wow.”

Anyway, next time you’re in the store take a look at the massive selection in the cold/flu and pain relief section. There are dozens of different medicines. There’s cold relief, cold/flu relief, nighttime cold relief, daytime cold relief, cold and sinus relief, and others I’m undoubtedly missing. You can buy the same medicine in regular strength, extra strength, liquid caps, econo pack, and even liquid form for the six of us who’d rather choke down terrible medicine instead of taking a tasteless pill. And if that isn’t enough choice for you each type of medicine comes in about four different brand names (not including the generic brands).

I’m talking about this to the pharmacist and he pointed out something that each brand was essentially just the same pill marketed slightly differently 40 times. The Tylenol pills mostly contain acetaminophen. Advil has ibuprofen inside of its ugly pills. Motrin is the same. My favorite is Anacin, which a) apparently still exists and b) contains caffeine for some reason.

The point is this. Just buy a yourself some Tylenol and call it a day. There’s no reason to fill your medicine cabinet with 40 different kinds of medicine targeting specific symptoms. They all reduce swelling, which is what gives you relief.

Simple is best. It’s a lesson I kinda wished I learned about my finances a dozen years ago, but oh well.

Rental property in Alberta

If you’re looking to buy some cheap rental property with decent cap rates, forget about New Brunswick. Rural Alberta is the ticket these days. I’m going to go ahead and blame Rachel Notley for this, which is pretty popular in my neck of the woods.

There’s a property available locally for $40,000 that rents for $500 a month. That there is already an attractive cap rate, but it gets even better. The seller (who is avoiding using a real estate agent for some reason), has let it known they are willing to listen to even outlandishly low offers. I predict this property will end up selling for under $30,000.

It has a few issues, but nothing unbelievably glaring. It looks better than you’d expect a $30,000 house to look. It’s got a small garage in the back. The location is good. There’s a problem with tree roots getting into the sewer line, which is a pretty easy fix. Eventually that tree would probably have to come down though, which is a $1,500 bill.

Even if I paid the full $30,000, the cap rate is pretty damn succulent. Annual rent would be $6,000. Take off 25% for expenses and I”m left with $4,500 in profit on a $30,000 investment. That’s a 15% return. Put down 25% of the total price ($7,500) and I’m looking at a return on equity of 60%. These numbers are succulent.

If these opportunities exist in my small town, I’m guessing they’re everywhere.

SNC Lavalin

I talked a little about SNC during my last stock watch list post. I figured it traded at a pretty attractive valuation and the Highway 407 value of about $30 a share meant the share price was probably pretty close to a bottom.

And then this recent controversy hit. Nice going, Trudeau.

But something pretty interesting happened, at least the way I see it. Despite the company being right in the middle of the biggest Canadian political scandal of the year, shares are down a mere 9% in the last week. That indicates to me the market a) had the possibility of this priced in and b) doesn’t think it’s going to end up being that big of a deal.

I still stand by my prediction that the company and the federal government sign some sort of settlement agreement, but I’m now skeptical it’ll happen before the fall election. That adds more risk. Would a Conservative government be open to such a deal? We don’t really know.

SNC is a tricky investment for me. I’m not sure it’s the kind of stock I’d like to own forever. The stock does well when the company is free of scandal, which is the perfect time to sell. You then wait for the next shoe to drop and buy shares again. It’s more predictable than my daily weeping in the grocery store.

There’s other stuff to like too, including SNC’s steady (albeit lumpy) growth history, its dividend growth record, and the potential that it sells that Highway 407 stake (although I think that’s pretty unlikely). The stock might end up on my too hard pile.

Why Do Celebrities Buy Real Estate Like Crazy?

Why Do Celebrities Buy Real Estate Like Crazy?

The other day, after Tom Brady and HIS PACK OF SUPERHUMAN FOLLOWERS ANNIHILATED THE LOS ANGELES RAMS, I found myself sucked into a internet rabbit hole reading all I could about my new favorite person. What have you done for me lately, Warren Buffett?

Nothing? Exactly.

It turns out Tom and wife Giselle Bundchen own themselves a crapload of real estate. They have a property in the wealthy Boston-area suburb Brookline. He also owned property in New York and Los Angeles, although both of these have now been sold.

Taylor Swift, another of Nelson’s favorites, is also a big real estate tycoon. She owns approximately $80 million worth of real estate in total, spanning 8 different properties in 4 states. She owns two houses in Nashville, a couple more in Los Angeles, three condos in New York City, and a vacation house in Rhode Island.

This all got me thinking. Why exactly do so many celebrities buy real estate? And why so much of it? Why not just put your cash in the stock market instead?

I’m not sure I know entirely why, but I have some theories. Let’s lake a looky-loo.

Privacy

Say you’re Taylor Swift and you’re going out to LA to record your newest record, tentatively titled Catchy Nonsense. Sorry, I’m being told Lady Gaga has already trademarked that title.

You have the paparazzi following your every move and 14,000 fans who will scream their head off if they catch even a fleeting glance. You also have that boyfriend who you’re trying to keep secret for some reason. This is all very important to you because it’s the only real stress you have in your life.

So she (and every other celebrity) does the logical thing and spends money to make the problem go away. If you have your own place in a city where you spend a few weeks every year, then you don’t have to worry about finding a place to live, dealing with a new hotel every time, and so on. You just show up and everything is as you left it.

Even if it costs $500,000 a year to maintain these Beverly Hills mansions, it’s probably still worth it to Taylor. After all, she is swimming in cash.

But wait. If it’s just for privacy concerns why have two places? And wouldn’t having a house in a city make it all the easier for fans to find you? Which brings us to the second reason celebrities buy real estate.

Speculation

Celebrities! They’re just like us!

If you ask them the average celebrity would tell you they’re not speculating in real estate. They’re investing, stupid. And then their security would usher you away.

But we all know it isn’t investing in real estate when the place just sits empty most of the time. At least get some revenue by renting it out on AirBnb. Taylor Swift should totally do that. She’d get a huge premium for it. “Sleep in the same bed Taylor Swift does!”

And then when she actually shows up take that bed and BURN IT. BURN IT AND SEND IT TO HELL. Like she’s going to touch the same bed us plebs have.

Real estate generally keeps up with inflation, but there are certain costs of owning it. I’d reckon most celebrities buy real estate as a store of value versus trying to make money. They can sell the place for a little more than they bought it for and enjoy it in the meantime. The property tax, insurance, and maintenance expenses just kinda get forgotten about.

Real estate is easy to understand

A lot of celebrities are, well, pretty dumb. They get suckered into moron investments from their posse and lose millions in the process. They’re constant targets for crooked financial advisors. It’s little wonder why they don’t trust people with their money.

Does this sound like the kind of person who is going to buy and hold a portfolio of index funds? Probably not.

But real estate, they can wrap their heads around that. Houses go up in value! It’s basically guaranteed!

Taylor Swift probably has a big chunk of her net worth invested in the market, btw. Her father worked as a broker with Merrill Lynch for years. You know when the family moved to Nashville to help her get into country music? Ol’ Scott Swift just transferred to the Nashville office. Not really a big sacrifice there, is it?

Let’s wrap this up

So it turns out there are quite a few reasons why celebrities buy real estate, even if that might not be the ideal investment philosophy. Like a lot of real estate “investors,” celebs would probably be better off buying a collection of REITs.

But at the same time I’d argue making money is likely a secondary goal. They want a place to go when they’re in a certain city. And I’m sure they don’t mind the attention they get from owning beautiful houses. No magazine is coming over for a tour of their stock portfolio, that’s for sure.

Don’t Invest in Crypto, Edition 4,185

Don’t Invest in Crypto, Edition 4,185

According to the crack IT team here at Financial Uproar (seven grandmothers at the local assisted living facility), I don’t think I’ve ever really tackled the topic of crypto currency.

Oh wait. I talked about how much it costs to mine Bitcoin like two weeks ago. NICE WORK, MILDRED.

It turns out I also wrote a post asking if Bitcoin is keeping the price of gold down. Maybe!

I won’t bother explaining what crypto currency is at this point, since a) you probably already know and b) even the bulls don’t really grasp the potential. Or so I’ve been told, anyway.

As far as I can tell it exists as a way to extort people out of stuff and not be traced or to buy weird stuff on the dark web like some girl’s virginity. There’s gotta be a way for some enterprising woman to fake that and sell her virginity like five times, btw. Come on ladies, I have confidence in you.

I feel like crypto currency is sorta like your spare tire. Once or twice in your life it’s really useful and the rest of the time you can easily do without it. If your car didn’t come with a spare would you just drive and take your chances? I probably would.

Meanwhile, the crypto market is filled with the kinds of risks that traditional investors don’t have to deal with. Like this next story, which is 100% true.

Meet Gerald Cotten

Up until a couple months ago, Gerald Cotten was just your regular founder and CEO of QuadrigaCX, which was a crypto currency exchange and storage site. There was approximately $200 million worth of assets on the platform, all in imaginary bullshit coins that are always quoted in the price of real currency.

Sorry, slip of the tongue there. Still totally love crypto, guys.

So ol’ Gerry there decides to take a trip to India despite the place smelling like, well, India. He’s having a grand ol’ time helping out at an orphanage when suddenly he dies from complications of Crohn’s Disease. He was only 30 years old.

Gerry’s widow, Jennifer Robinson, starts to deal with his affairs after he dies. One of the first steps is to get everyone’s crypto currency and find a way to return it to them. Without Gerald there’s no QuadrigaCX, which is okay because that’s a dumb name anyway.

There’s a problem. She can’t access any of the accounts because they’re encrypted. She hires a bunch of security experts and they have no luck either. The only person who knew the passwords was Gerry. There’s 200 million dollars worth of crypto currency sitting on a laptop and a bunch of thumb drives with no way to access them.

You might be thinking “geez, Nelson. This sounds like a Mickey Mouse organization.” And you’d be exactly right.

It gets better.

Gerry’s wife was the sole heir of his estate, which was worth more than $9 million. Included in the assets were the family’s home in Nova Scotia, an undeveloped property in another part of Nova Scotia, a large house in Kelowna, a Lexus and a Mini Cooper, an airplane and a 50-foot sailboat. Oh, and he had enough kicking around to give his in-laws $100,000 to help his wife take care of their two rat dogs Chihuahuas.

Cotten signed his will just two weeks before he died.

But wait. There’s more.

QuadrigaCX has been having financial difficulties for months, including CIBC not processing about $26 million worth of payments. Some customers complained it would take weeks to get their money after putting in their sell orders. The company went into bankruptcy protection just weeks after Gerry’s death.

Oh, I’m not done yet.

The region of India where Gerald was is well known for being somewhere you want to go to fake your own death. I’m not the only one with suspicions, either. Quadriga had accounts for 115,000 people. The internet is filled with people accusing Cotten of faking his own debt. This is a big deal.

Hoooooleeeee crap

It is absolutely amazing some guy with his laptop managed to be one of the largest crypto players in Canada. As far as I’m concerned this made it even more likely he faked his own death. Gerald is not a moron.

But at the same time how does anyone look at this situation and say “yep, I’m going to go invest in Bitcoin now?” This shit is crazy, yo.

If Cotten is discovered in India he can be extradited back to Canada. But finding him isn’t enough. They also have to prove he willingly tried to screw people. Meanwhile his wife hides all his assets in crypto and nobody can find the cash.

Anyhoo, let’s wrap this up. Am I surprised the crypto world is dealing with something like this? Absolutely not. Nor will I be surprised if they find him at some point in the future. This is nuts and I can’t get enough.

Insider Buying: Does It Really Matter?

Insider Buying: Does It Really Matter?

There are a lot of investors who pay close attention to insider buying. If the CEO, board of directors, or even just some big investor is purchasing shares, they view it as a bullish signal.

Generally, I tend to agree with this type of thinking. There’s really only one reason to buy a stock, and that’s GOOD OL’ FASHIONED GREED, BABY. Gordon Gekko just called and he wants me to tell y’all he gets hard every time somebody talks like that. I’ve since blocked his number.

There might be only one reason to buy, but there are a million reasons to sell. You might be nervous about having too much of your wealth tied up in one company. Your wife might want to remodel the kitchen or your damn kids might be insisting you pay for their college. Bastards. There might be a better investment opportunity somewhere else. Or maybe cash needs to be freed up to pay the very reasonable estate fees from the late King Olubuse II. And then we’ll totally split the proceeds.

That was an actual Nigerian king, btw. And apparently there’s a conspiracy theory that he’s not actually dead. He’s just chilling in London enjoying life as an old rich guy. Like every conspiracy theory, I choose to believe this one without any critical thought. Have I told you guys that Fidel Castro is totally Justin Trudeau’s dad?

Let’s get back to the topic at hand. Should you look for significant insider buying when looking at a stock? Let’s look at the pros and cons.

Pros

As previously mentioned, the logic goes buying = good. We’ve already covered that, so let’s move on.

Just how good is this buying? There are various studies that I’m clearly too damn lazy to read, but I think I’ve gotten the gist of them. There’s definitely a short-term outperformance when insiders buy shares. They tend to beat the overall market by about 3-5% over that first year, which is certainly nothing to sneeze at. But there’s also scant evidence this outperformance continues for the long-term. Insiders get their nice gain and then hold for a little while, getting out when things look much better.

Everybody pays attention when the stock is beaten up and insiders are buying. Nobody cares once the selling happens. The stock has already recovered and people have moved on.

This all comes down to the powerful concept of having skin in the game. Somebody who’s buying is putting their money where their mouth is, and that’s a good thing. Even short-term outperformance is still beating the market, which is exactly what we’re looking for.

And remember, we don’t necessarily need insider buying to have skin in the game. If a CEO already owns a bunch of the stock then we’ve already got it.

Cons

I think that looking squarely at insider buying may not be the best way to build your overall portfolio.

Any value investor has stories about some beaten-up stock they bought partially because of heavy insider buying. For me, that company was Penn West. The stock was cheap, oil was about to recover, and insiders were spending millions of their own money slurping up shares. So I bought and the company promptly fell further into the toilet.

I think I took about a 75% loss on that one, which hurts. But it would have been a 90% loss if I would have held on until today. I will take that small victory, thank you very much.

If you take a look at Canada’s biggest and arguably most successful stocks, you barely see any with significant insider ownership. Canada’s banks don’t have big insider owners. Neither do the pipelines. Both Rogers and Shaw have a decent amount of insider ownership, but they’re minority stakes that control the company through multiple voting shares. Same with Couche-Tard.

It proves you don’t need to own stocks with high insider ownership to do well. Managers have incentive to do well even without putting their own money to work. It turns out fear of losing your multi-million dollar annual salary is a pretty good motivator.

Wrappin’ it up

Here’s the way I see it. If I have two stocks I’m weighing buying and they’re identical in every way except one has insider buying and the other doesn’t, I’ll probably go with the insiders. There is a certain predictive power there that works, at least generally. Individual results might vary.

But I would encourage anyone to look beyond insider buying. It’s a nice signal, but it’s not the only key to picking good investments.