If you believe the PF-o-net (which I cannot stress enough you SHOULD NEVER DO), you’d know that only suckers invest in individual stocks, buy a mutual fund, get whole life insurance, buy a brand new car, or work at any moment past your 40th birthday. Working into middle age is worse than ass cancer.
Yeah, that’s right. Ass cancer. You’ve never heard of it because we’re all too scared to speak about it directly.
A few years ago, back when my wife encouraged my blogging habit enough to write here, she wrote a post outlining how she bought a token investment in some crummy mutual fund to get free banking. I threw my clickbaitest title on that bad boy and watched the angry comments roll in. It was great. So many people obviously didn’t read the thing before jumping to conclusions.
Meanwhile, my wife’s $500 investment is worth more than $700 now, and she got free banking in the process. Outstanding.
But for some of you, this isn’t enough. Why even bother with a traditional bank when there are branchless banks that don’t charge a nickel for as many transactions as you want?
I’m well aware those financial institutions exist, and have largely avoided using them. Here’s why.
The beauty of local banking
Many of you have no need for local banking. You get paid by direct deposit. Your side hustle income comes in via Paypal. Your drug dealer takes interac e-transfers for some reason. If you do get a cheque, every banking app has the ability to deposit it remotely. That covers pretty much everything.
Except for getting cash, that is.
I own a few different rental houses, and while I’m not terribly active on the private lending side anymore I still have a bunch of loans that are slowly being paid off. I’ve found that some of these people like paying me cash. I get an envelope of cash I can spread on my bare chest like a freak and they get a payment method that’s comfortable to them. It’s a totally not weird at all win-win.
How am I supposed to deposit cash at an online only bank?
I’m not just getting a couple of bucks each month, either. We’re talking upwards of $1,000. I don’t feel comfortable having that much money at my house, and although I probably could spend that much cash every month, I’d have to make an effort to do so. Sure, I could go to the bank and give them cash to pay off my credit card, but they would mock me as soon as I left. And rightfully so, too.
Fun fact: back in 2001 and 2002 when I first started using a credit card, online banking wasn’t a thing. My current bank (a credit union) didn’t even offer credit cards back then. I was forced to go to a competing bank and get a card there. I’d go to the credit union, withdraw the cash, and then go to the other bank and pay off the credit card. It got to be such a pain in the ass I’d barely use the card.
What our banking setup looks like today
I’ve maintained my own bank account while my wife has hers. All earned income goes into one account while passive income goes into the other.
This setup is maintained so I can easily track payments going in and out. It’s essentially became a business account without a business attached to it.
I pay $2 a month for the privilege of having the account and then $1 per transaction each time I pay a bill or use a cheque. Most months I’m spending anywhere from $4-$5 on banking.
For me, saving $5 a month is nothing. I’ll squander that much on jalepeno flavored Doritos on a given weekend if I’m feeling peckish. Taking the time and effort to switch the account to somewhere I would pay less in fees just isn’t worth it. And as I’ve mentioned before, I think having a relationship with your local banker is beneficial.
We also have a high-interest account at one of the branchless banks. Every now and again they’ll send us a promo for 3% interest for 90 days and we’ll stick some cash in there. The promo expires and we yank the money out faster than I nope out of a yoga class.
Let’s wrap it up
Banking is a popular topic here in the personal finance world, but it shouldn’t be. If you never have any cash in your life, it’s probably best to have an online-only bank. Or stay with your current bank. Even if you’re paying $10 or $20 a month in fees it’s not really that big of a deal.
Big expenses are important. So is earning more money. Feel free to try and lower your bank fees, but spend way more time on the important stuff. Or, just buy some Canadian bank shares. Profit off everyone else’s bank fees.
Michael Jordan is my favorite former athlete. The guy dominates basketball for a decade and then decides he’s bored and he’s going to give baseball a try now. Because, hey, why the hell not?
Michael Jordan’s baseball career is viewed by most as a punchline. “Hey, remember when the NBA unofficially kicked MJ out and then he sucked at baseball for a year? LOL that was great, huh?”
But people aren’t giving Jordan nearly enough credit. The guy had barely picked up a bat for 13 years. Then he goes to AA ball, which is reserved for the best 1,000 baseball players in the world. And he held his own. That’s the amazing part. He wasn’t an embarrassment.
According to Terry Francona, who was Jordan’s manager in Birmingham, the basketball legend had what it took to make it to the major leagues if he was willing to put in the work. If I had a time machine, I’d use it to convince MJ to stick it out — right after I murdered baby Hitler, of course.
SPECIAL PROGRAMMING NOTE: I will be appearing live on BNN on February 10th between 10 AM and 11 AM Eastern time. I’ll share a more precise time on Twitter as soon as they tell me. Set your PVRs, kids. It’ll also be on BNN’s website afterwards for those of you who don’t have cable or have jobs.
Time for links
1. HBO released a new Warren Buffett documentary on Sunday, which I has not seen because I am too cheap to pay for that channel. And all the other channels. The good news for us cheapskates is Buffett did a lot of interviews promoting the movie. Here’s one he did with Bill Gates. It was broadcast on Facebook Live, which prompted Warren to ask “what’s Facebook Live?”
2. One of my favorite articles ever was on CNBC this week, profiling a guy who steals ideas from Kickstarters and sells them on his own. Click on this, it’s absolutely fascinating.
3. Asset-Based Life has some thoughts about a safe withdrawal rate. Spoiler alert: Paul’s not going for a 4% withdrawal rate.
4. This one is a bit of a doozy. It’s about Medallion Financial, a dying company with millions lent out against rapidly declining taxi medallions. This article outlines how Medallion Financial used an ex-fashion model to try and sway public opinion in some not-so-honest ways.
5. Here’s an article at the Findependence Day Hub about how you can use strategically placed RRSP contributions to get some excellent short-term returns.
6. Andrew Hallam, over at Asset Builder, asks whether Mexico is the best place in the world to retire. He makes a pretty compelling argument. I’m still not that excited about investing in Mexico, though.
7. Kapitalist tells an amazing story from Reddit about a stock trader who blew most of a $2.5 million inheritance on trading before betting his last $250,000 on Apple missing earnings. It turns out that the story was probably fake, but it’s still bananas.
8. Here’s how Dr. Jin Won Choi of MoneyGeek values stocks. It’s a somewhat complex read, but it’s a worthy piece of writing for anyone who calls themselves a value investor.
9. This week’s cold shower is brought to you by Garth Turner, who points out just how much of our economy is dependent on both building and trading houses.
10. I was featured in this list of Canadian personal finance bloggers to follow in Canada.
11. 5i Research points out a growing company that pays an 8.7% yield. It’s a pretty compelling opportunity.
12. And that’s all I’ve got. Read Financial Uproar again or something.
Stuff Nelson wrote
As a reminder, you can hire me to write for your blog, newspaper, or poorly-Xeroxed newsletter. Hit the ol’ contact me page to get the ball rolling. Actually, don’t. Nelly’s getting too busy.
1. Let’s start things off with my debut piece on InvestorPlace on why Amazon’s P/E ratio doesn’t matter. Still doesn’t mean I’m going to invest in it, though.
2. I wrote about a rumored deal that made headlines on Friday, which is Hudson’s Bay Company looking to buy Macy’s despite the latter having a market cap five times higher. Hint: it’s not about the retail business.
3. I talked about something called shareholder yield, which I think is far more important than just a company’s dividend yield.
Tweet of the week
I was a little miserable this week on the ol’ Twatter, so I might have to go back to last week.
Poor Johnny Depp. So rich yet so poor at the same time.
Have a good week, everybody. Enjoy the Super Bowl.
I decided to go on a solo road trip this weekend to visit some friends, a trip that for the most part was highly enjoyable. It’s nice to see people who only exist as email contacts for the other 51 weeks of the year.
The only bad part? The hotel’s fire alarm went off at 4:30am.
Because it was 4:30 and the last thing I wanted was to leave my comfy bed, I delayed leaving. I just assumed it was a false alarm. I couldn’t smell any smoke or see anything. And if people were evacuating my floor, they were doing it with the volume and intensity as mice.
But the alarm persisted for five minutes and then ten, so I finally roused myself and started the difficult process of putting on pants. I got dressed, headed to the front desk, and saw a half dozen firefighters just milling about. That was all I needed to see; I turned around and went back upstairs using the elevator this time.
I’m not usually in favor of the death penalty, but I am for whoever pulled that fire alarm.
These are the articles I liked this week.
1. Let’s start things off with by far the most bizarre article I read this week, on Meat Loaf’s fantasy sports prowess. The man is either the greatest fantasy sports player of all-time or one of the great liars. Either way, it’s an article worth a few minutes of your time.
2. Over at Money We Have, Barry Choi points out that choosing the correct mortgage adds up to tens of thousands of dollars in savings over a 25-year term. By spending a little more time picking out the right loan, you can have a huge impact on your overall finances.
3. You know how everyone says the income of the average worker continues to be stagnant? Well PK at Don’t Quit Your Day Job actually crunched the numbers, and came to a slightly different conclusion.
4. Oddball Stocks continues to be one of my favorite value investing blogs. His latest post is on the information edge needed by active investors to be successful. He argues this edge doesn’t need to be as large as one would think.
5. Over at Half Banked, Desirae points out that having a blog is basically just a bill of expense. Okay, not really, but to be halfways successful in the niche you do have to spend a couple of bucks.
6. Speaking of mortgages, Canadian Mortgage Trends tells about some potential bad news for homeowners starting in 2017. It looks like mortgage insurance premiums will go up. I guess y’all will just have to do what everyone has been telling you all along and put 20% down.
7. Over at Boomer and Echo, Robb has some really simple advice to millennials. Just start investing already, dammit. And while you’re at it, move out of your parents’ basement.
Fun somewhat related fact: while talking to a friend on Friday he told the story about a house developer who built seniors condos. And he said he doesn’t build any one bedroom condos anymore. The reason? Because many seniors want an extra bedroom for their kids/grandkids to have the option to move into. Apparently this happens all the time.
8. Nomad Capitalist has some feelings about recent immigration changes brought in by a previous government, and he’s no fan. In between that bill and recent taxes that make it prohibitively expensive for a foreigner to purchase a place in Vancouver, it would be easy for immigrants to get the wrong impression.
Stuff Nelson wrote
As a reminder, you can hire me to write for your blog, newspaper, or poorly-Xeroxed newsletter. Hit the ol’ contact me page to get the ball rolling.
1. Do you want to invest in the electric car revolution but aren’t sure which company will profit? I propose an alternate solution over at Motley Fool Canada.
2. Home insurance when you have a pool is a little more tricky than normal. I give you all the deets over at Lowest Rates.
Tweet of the week
This really deserved more than one like.
Have a good week, everyone.
After making fun of you kids approximately 1,910 times for buying a new car because you want one, dammit, a little under a year ago I went ahead and did the same thing. We bought a brand new 2015 Buick Verano, the pimpin’ ride you see in the picture above.
God, what a hypocrite.
My old 2002 Ford Focus (may she forever rest in peace) was just annoying me too much. First the back window wouldn’t stay closed, a repair I did myself by just gluing it shut. #safetyfirst
Then the air conditioning went. I needed a new fuel pump, and every time I went over a bump it was pretty obvious the shocks were starting to wear out too. Also, the dead hooker stench from the trunk was starting to get into the upholstery.
We weren’t stupid when we bought our new car. The 2016s were already firmly entrenched on the lot when we started shopping, which let us get something like $6,000 off the original price of our new ride. And since we were able to pay cash that helped push the price down a little too.
The best part about driving a Buick is everyone assumes you’re 80 years old and is quite tolerant when you screw up. Thanks, teens!
A number of people gave me crap for buying new and I deserve every word of it. It’s true I could have gotten a better deal if I would have bought used. I just didn’t want to. I liked being able to think I was successful enough for a new car.
So instead, we compromised another way. Instead of having two cars like most other families, we’re making it work with only one car. Now that we’re almost a year into this experiment, let’s take a closer look at how it’s working.
An easy change
Even though I could easily work from home full-time, I decided against it. I really like the idea of leaving the house everyday to go to work. If I just sat at home in my underwear all day, I’m certain I wouldn’t get as much done as when I go to the little office I rent.
But at the same time, when I went looking for a place to work from, I made sure to find somewhere that a) was relatively cheap and b) was close enough to my house so I could walk. In other words, I made walking a priority.
One of the advantages to living in a small town is most everywhere is walkable. After asking around for a bit, I quickly had several choices for an office I could walk to in less than 10 minutes. I picked the best one and life has been grand.
Sure, there’s about a day or two a month when I wish I had a car, but if I really need something, Vanessa is only a quick message away. And again, I can usually pretty easily walk to wherever I want to go. I just don’t want to, on account of being lazier than (insert your favorite stereotype here).
Having flexibility makes the whole one car thing easier. We’ve intentionally built a lot of flexibility into our lives. You might not have as much. That might make things harder, but there are always other solutions.
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Sharing the rest of the time
While the wife and I spend a lot of time going to the same places, there’s at least one night a week where one of us heads out while the other stays at home.
This hasn’t been a big deal at all. If somebody wants to hang out after Vanessa leaves for the evening, I can either a) walk to their place/where we’re meeting b) have them pick me up or c) use a cab or Uber. In the last year as a one car family, I’ve never had to break down and pay for a ride.
Even if you have an old car that’s fully paid for, these costs add up. I’m too lazy to figure out the costs, but Desirae from Half Banked actually did the math, and she found out owning a cheap used car cost her about $250 per month. Part of that is a pretty careless ticket, but the overall point remains very valid–I’d have to go through a lot of taxi rides to hit $250 per month.
People refuse to accept the possibility of Uber/taxis being their second vehicle. And most of you live in places that have public transport. It might not be ideal to take the bus to work everyday, but it can certainly work as a second vehicle. Just step over the passed out homeless guys.
It’s pretty simple. We made the decision having one car sitting idle 23 hours per day was silly, but unavoidable. Having two was just an unnecessary bill of expense. Once we committed to that, we just made sure the other parts of our lives fit in with the mindset.
Once you’ve made that choice, you’re already 80% there.
Well kids, it’s that time of year again. While you were out enjoying the spring sunshine and giving your pasty white legs their first glimpse of sunshine since October, the tax man has been scheming. Those rat bastards.
Fortunately, us here at Financial Uproar can help. Collectively, we’ve filed our taxes on time exactly 46% of the time. Sure, we owe $59,839 in back taxes, but we’ll totally pay that off soon, we promise. They actually threatened to open debtor’s prison back up just to throw our sorry asses in there. So, yeah, we know a thing or two about the taxes — at least about what not to do. Hey, it works for the rest of the debt-ridden world of personal finance.
The good news is your taxes aren’t due until Monday, and that’s only if you’re not getting a refund. If the government owes you money, they don’t really give a crap. Wait until 2020 for all they care, Trudeau is just going to use your refund to buy 14 more mirrors so he can look at his beautiful reflection all day long. GOD I HATE HOW HANDSOME HE IS.
Anyhoo, I’m here to help. Here’s your last minute tax guide.
1. Everybody will tell you not to panic. This is a lie. You must panic and panic hard. You will be most productive when covered in panic sweat.
2. First thing you have to do is round up all your paperwork for the year. If you’re anything like me, it will be in 14 different email and physical folders. Hitting your laptop won’t help, but feel free to slap that thing like it’s a misbehaving child. You’ll feel better anyway.
3. Once you think you have all your paperwork together, take a minute and sigh in relief. Enjoy that feeling, because it’ll be gone soon. Oh, and you totally forgot four of the most important papers, which you stashed in special spots so you could find them easier come tax time. Nice work, moron. Go ahead and slap something alive this time.
4. You’ve found all your paperwork? Good. It’s now time to wander down to the ol’ Walmart and pick up a copy of Turbotax. You could do it for free at Simple Tax, but like hell you’re going to remember that.
5. Work your way through Turbotax, taking far more than the maximum deductions allowable. Turbotax will warn you when you’re being too aggressive, but feel free to STICK IT TO THE MAN by ignoring all of its advice.
6. Remember, the following things are tax deducable for your 2015 taxes:
a) Kids physical activities
b) Transit passes
c) Certain electric or hybrid cars
d) Any work related event more than 100km from your home
e) R. Kelly concert tickets
f) Hookers, but not blow
g) Ah, screw it. Write the blow off too
h) Stickers and temporary tattoos
i) Skydiving (it’s a team building exercise)
j) Hair gel (Justin Trudeau only)
6. Once you fill in all the information in Turbotax, hit submit. Rub your hands together in glee while waiting. Go ahead and fantasize about what you’ll buy with your refund. It’s two chicks at the same time, isn’t it?
7. Whoops! Turns out you owe $3,594. Swear at the computer 14 times and then start over.
8. Redo your taxes, cursing your fat fingers the whole time. Your pets leave the room, knowing that they are about to get smacked and smacked good.
9. Finally, a refund. Congratulations on giving the government an interest free loan, sucker. Although interest rates are at 0.0000084% these days, so it didn’t cost you much. Still, you’re a PF nerd, so lament the lost of those cents you could have gotten in your high-interest savings account. LAMENT THOSE CENTS.
10. Realize today is only Thursday, and you actually had the whole weekend to do your taxes.
Happy tax day kids!