PCFinancial and ING Direct are two Canadian banks with great interest rates. Currently, ING Direct (0.27%) is better than PCFinancial's Interest Plus (1% on 0-$1000, 2.75% on $1000 and up) for amounts less than $53,000, and you probably wouldn't want to keep that much money in a savings account anyway. PCFinancial does have an anniversary bonus and it's easier to transfer money back and forth between accounts, and sometimes PCFinancial's rate is a little bit higher than ING. ING Direct's GICs seem to be a better deal, though, and they come with more options.

If you do set up an ING Direct account (and deposit at least $100 into it), you can use my referral code (Orange Key: 29083948S1) for a $13 bonus. I'll get a $13 bonus, too, so everyone's happy. =)

I'm setting up some transfers. Looking forward to taking advantage of that tax-free deal! Maybe another set of laddered GICs…

Technorati Tags: money, personal-finance

When I told the financial planner how I'd maxed out my registered retirement savings plan, she was impressed, and suggested looking into corporate class funds. They're taxed a little differently than regular mutual funds, and can be more tax-efficient than regular funds when outside an RRSP. I took the literature and promised to read up on it. Based on this Globe and Mail article about corporate class funds, it seems that corporate class funds are good for active investors who like switching in and out of funds, and not so good for buy-and-hold investors who favor index funds because of tax efficiency and low management expense ratios. (TD Canada Trust e-Series has the lowest-MER index funds I've seen so far, as the exchange-traded index funds that are increasingly popular in the US are somewhat bulkier over here.)

It was good to get some advice on uncommon concerns, such as international personal finance. How would I need to prepare for the scenario of moving back to the Philippines? I knew that my RRSP investments could be left in Canada, but I didn't know how to handle my non-registered investments and other accounts in a tax- and duty-efficient manner. It turns out that I can leave money here, but I may not be able to give further instructions from overseas, and withdrawing everything could result in losses or high taxes. One way to handle this situation might be to convert all my accounts into long-term investments, then leave very good instructions. I'm currently planning to stay in Canada for a while, but it's nice to know what I need to do in order to prepare for other options.

I answered her questions about my existing assets and expenses, and I asked her to help me prepare several retirement scenarios: the traditional retire-at-65 kind of plan, the ambitious be-flexible-at-40 plan, and the calculations for time in between. I wanted to figure out what a basic plan is, then inch that retirement date earlier and earlier. I gave her the numbers she asked for, and she'll share some plans with me the next time we meet.

Writing about this gave me an epiphany. What I want to develop is not a retirement plan, but a medium-term opportunity plan. I don't need to know how many dollars I'll need in order to never work again. I'm not in the habit of postponing life until then, and I certainly hope I can continue doing meaningful work forever. What I want to know is this:

How can I position myself so that I can create and take advantage of opportunities while dealing with the risks?

(This post is not financial advice. Good luck!)

Technorati Tags: finance, Investing, RRSP

I should also put getrichslowly on my more-frequently-read blog list...

On Technorati: web2.0, finance

Random Emacs symbol: calendar-set-mode-line - Function: Set mode line to STR, centered, surrounded by dashes.

I've just figured out how to do my fancy earmarked accounting thing. I've partially sorted out my cashflow, but I'm not sure how much I'm supposed to receive over the next few months or what'll happen when I start working. For peace of mind, I've earmarked enough money to cover tuition, rent, and food.

I want the earmarked money to be tracked separately from my real savings so that I know how much money I can actually touch, but I want to leave it in my regular high-interest savings account so that I can earn interest on the whole amount. So I need two reports: one showing what I can consider free and clear, and another that reconciles with the account summary from the bank (includes earmarked accounts).

Here's the transaction setting up earmarked rent:

10.28 Earmarked for rent
   [Savings:Earmarked:Rent]      $4365
   [Assets:Savings:PCFinancial]

and every so often, I'll post transactions that look like this:

11.02 * PCFinancial ; Transfer for rent payment
   Assets:Savings:PCFinancial     $-485
   Assets:Checking:PCFinancial    $485
   [Assets:Savings:PCFinancial]   $485
   [Assets:Checking:PCFinancial]  $-485
   ; Automatically transfer rent money from Savings to Checking ($485)
   ; This is still part of my earmarked savings until it goes out of Checking
   ; So ledger -s -c bal shouldn't show it as part of my real checking account
   ; or my savings account, but as part of Savings:Earmarked
   ; but ledger -R -s -c bal should show an increase in checking and a decrease in savings
11.05 ! University of Toronto
   Assets:Checking:PCFinancial    $-485
   Expenses:Rent                  $485
   [Savings:Earmarked:Rent]      $-485
   [Assets:Checking:PCFinancial]  $485
   ; Now decrement my earmarked savings
   ; And make sure that Checking reflects actual balance
   ; And that savings is unchanged from before with virtual transactions

The ! signifies a pending transaction that has not yet been cleared, while * signifies a cleared transaction. ledger can do partially-cleared transactions too. This is pretty nifty.

Makes me want to have more to track...

On Technorati: ledger, finance

Random Emacs symbol: shell-script-mode - Command: Major mode for editing shell scripts.

The credit card representative handling my activation call was really hard-selling me on credit balance insurance. I wasn't too sure I needed it because I plan to pay the balance off in full each month, which is the proper way to use credit cards anyway. He was really pushing me to go for the 30-day review, but I was, like, ehh... Something about hard sells raises my hackles, and I was rather suspicious of the fact that I couldn't go without and just opt in afterwards.

So I Googled for "do I need balance protection insurance" and found the Government of Canada's helpful factsheet on credit balance insurance, which led me to the totally awesome list of consumer publications from the Financial Consumer Agency of Canada.

Hey, governments can rock after all. =)

On Technorati: money, finance, canada, credit

I'm going for the CAD 1000 limit credit card because I find myself occasionally needing to book a flight. It's still not going to be enough to book a flight home, but that's okay: we need to start somewhere. Two options:

1. Open a checking account and maintain a minimum daily balance of CAD 1500 in order to avoid monthly fees of CAD 3.45.
2. Secure the deposit with CAD 1000 in a 1-year GIC with 3.75% interest, freeing up CAD 500 to put into, say, my 4% savings account. Open the checking account and pay monthly fees of CAD 3.45, but avoid keeping a minimum balance. EARN: 57.50 SPEND: 41.40 NET: +16.10

Approach 2 earns me CAD 16 extra per year, compared to the opportunity cost of tying up CAD 1500 in a non-interest-bearing account. For the purposes of simplifying my life, however, I don't mind giving that up for now. If I were here for longer, I might've secured it with a longer-term GIC, maybe even get up to 4%.

To simplify matters, I'll probably also do most of my banking at TD. The savings account offers 3% interest with a minimum balance of CAD 5000.

{{private}} Now that I've gotten my financial stuff sorted out, I know {{private}} I can maintain that kind of a balance in my savings.

The savings account has a maximum of two transactions per month, so I can't do the kind of financial juggling I'm doing with PCFinancial, but I guess it'll work out better in the long run. The account's actually a better deal than my previous PCFinancial savings account, but I'm on the 4% savings account at PCFinancial now, so I'll need to think about that for a bit.

I think I'll start off by just using the checking account at TD for a while, using it to autopay my credit card and transferring more money into it once in a while. It's handy because it's another way I can get cash; their daily withdrawal limit is higher. I'm going to need to be more careful managing my accounts and making sure I'm keeping track of everything.

I'll close my Scotiabank USD account, at least. I'll keep the PCFinancial savings account for the extra 1% (which is still quite an amount), move most of my current account to TD, and keep a checking account at PCFinancial for bill payments, checking, and the occasional debit transaction. I can use the TD account to pay rent every month in order to make sure the account is active, and I'll use scheduled transfers to make sure the money is there each month. I'll also top it up right after I charge something, treating it as a charge card.

{{private}} Hmm. I think I've sorted that out. So: {{private}}

{{private}} PCFinancial checking	No minimums, no fees. Good for small transactions, cash withdrawals.
{{private}} PCFinancial savings	I'll keep most of my money here for now, at least until I figure out how long I'm staying and what I can set aside for longer-term investments.
{{private}} TD checking	Use this to pay rent and credit card. Keep a balance of CAD 2000 or so, top it up every month from my checking account. Consider using this as my main checking account, if I can manage cash well.
{{private}} Scotiabank	Closed.

On Technorati: finance

I keep my monthly spending plan on a ruled 3x5 index card labeled "Budget for August 2005." I divide the card into three columns: category, estimate, and remaining budget. At the beginning of each month, I write down the categories and estimates in ink, and the remaining budget in pencil. Throughout the month, I'll regularly update the remaining budget entries. If I want to spend more for something, I can reduce the budget of another category.

Let's see how well that system works this month!

その代わりに、彼は自分のコンピュータを制御しているスイッチを操作した。 Instead, he worked a switch that controlled his computer.

On Technorati: finance

If you're an international student, though, searching for a credit card is a frustrating experience. Under "Perfect for students!" and "Low interest rate!" signs, you'll find "Must be a Canadian resident." It isn't entirely fair how the Canadian government gets to consider you a resident for tax purposes but you don't get any of the resident perks, but that's life.

Don't give up, though! Some banks are at least aware of the predicament of international students. Calling up the International Student Centre yielded this quick tip:

Apply for the TD Canada Trust card at the Bay and Bloor branch (77 Bay Street, a short walk from campus). Don't forget to bring:

• passport
• study permit
• confirmation of address: rental agreement, phone bill, etc.
• proof of enrollment: status letter, etc.
• deposit (at least CAD 1000)

This still leaves me stranded because I'm not actually officially enrolled yet, but hey, at least other people can use the tip.

As long as you use a credit card responsibly, it's a great way to build credit history. It's a heck of a lot more convenient than cash—in fact, a little too convenient sometimes. Take care of that shiny new piece of plastic!

コンピュータがこの会社に導入されつつあります。 Computers are being introduced into this company.

On Technorati: finance, canada

I need a savings account with Internet banking that either allows me to auto-debit credit card payments at the end of each month or lets me transfer the funds online. Most of my research grant will sit there. If I can get high interest, all the better.

If not, I can maintain a current account with good ATM placement and no withdrawal fees for my day-to-day cash expenses. I'm tracking cash and credit separately, so I should be able to get an idea of how much cash I'll need each week.

So, what are my options?

The International Student Center's page on transferring funds to Canada lists the following banks as being close to the St. George campus.

The Toronto Dominion Bank
Bloor & Bay Branch
77 Bloor Street West
Toronto, Ontario
M5S 1M2

The Bank of Nova Scotia
Bloor & Spadina Branch
332 Bloor Street West
Toronto, Ontario
M5S 1W6

The Royal Bank of Canada
Harbord & Spadina Branch
648 Spadina
Toronto, Ontario
M5S 2H7

The Canadian Imperial Bank of Commerce (CIBC)
Spadina & College Branch
268 College Street
Toronto, Ontario
M5T 1S1

The Bank of Montreal
Bloor & St. George Branch
262 Bloor Street West
Toronto, Ontario
M5S 1V9

For President's Choice:
LOBLAWS
12 St. Clair Ave E
Toronto, ON

I browsed through this book on a whim and ended up reading it cover to cover. This John Wiley book is a great read if you're looking for sound advice on finances and relationships. Here's the book blurb from the publisher's site:

Reviews: "The financial decisions we make in our lives are sometimes not the easiest to discuss but have long-lasting effects. [Opdyke’s advice] has opened the door in my relationship to conversations that were a long time coming." - Josh, regular reader of Opdyke’s "Love & Money" column, Florida

Real answers to real questions about money and relationships:

• I have too much debt and my credit isn’t very good. How can I fix my financial problems? And how do I break the news to my boyfriend?
• How do I teach my kids the value of money, when my parents shower them with expensive gifts?
• My wife makes more money than I do, does that give her a greater voice in our financial decisions? Are we still equal?
• How much should I give my child in allowance? And will it really help him learn the value of a dollar?
• We want to have our first baby, but we don’t know if we can afford it yet. How much money do we really need to have in the bank?

If you’re like most people, you’re struggling with questions like these. Whether we like it or not, money makes a big difference in the choices we make and the lives we lead. Unresolved questions about money can put unwanted stress on even the healthiest relationships–between spouses, between parents and children, and even between friends. In Love & Money, columnist Jeff Opdyke offers practical personal finance advice, as well as strategies for dealing with touchy financial topics–so that money doesn’t end up costing you something even more valuable.

Random notes:

Formative

• Most people are terrified of budgets because they think of them as strict limits. Use a spending plan instead, and remember that you're giving up that latte for something specific like a car.
• Debt affects relationships and self-esteem. Tell your significant other if you have a debt burden so that it's out in the open.
• Little things add up. Be conscious.
• Mix savings with investments. Find an emergency buffer level both of you are comfortable with.

Building a life together

• Discuss finances as a couple.
• Keep a joint account instead of his-and-hers.
• Resist temptation to hide your expenses.
• Keep your relationship as equals even if one person earns significantly more than the other. Recognize the value contributed by a stay-at-home spouse. Don't let your money substitute for your time or effort around the house.

Kids

• Consider finances when thinking about having a child. Will you be able to provide good opportunities without depriving your children?
• Be careful about toys. Teach kids that material things != happiness instead of indulging them all the time.
• Allowances can help your children learn how to manage money. Don't have any big expectations like making them learn how to donate to charity or save for college. Resist the temptation to supplement this through your generosity. Make it regular, not dependent on their behavior: that way, they don't see money as the reward.
• Think about the messages you send kids. When they want something, do you tell them you can't afford it—and then turn around and get yourself something?
• Plan for education Really Early.

Middle years

• One income or two?
• Relocating because of a career is very difficult. Is the traveling spouse willing to give up that dream if necessary? Is the trailing spouse willing to walk away from his or her own career if necessary? Try to find a win-win. Acknowledge difficulties, particularly for trailing spouse.
• People have different vacation needs. Find a good compromise. (It's vacation, after all.) Might not even be together all the time.
• Talk about your life goals. Check for compatibility. Find good compromises.

Retirement

• Plan for retirement really early.
• Medical aid is expensive. Think about that, too.
• Should you support your parents? Should your children support you when you're old? Book: Parents should have planned ahead for their own retirement, so should not oblige children as their children's primary responsibility is to their new family. (For us Filipinos, though, this is practically a given...)

彼女には２人の兄弟がいて、コンピューター業界で働いている。 She has two brothers, who work in the computer industry.

UPDATE: Clair wrote:

I have been browsing through Logsense (http://www.logsense.com) — that blog also some various tips that are helpful :) Thanks for sharing your notes. Finance - that is something I am horrible at. The game last Saturday just made me realize how clueless I am. I ought to get a grip on myself. Am not getting any younger. And I ought to think of the future, not just the now! Thing is that with things overwhelming me now, I forget about things for the future.

コンピューター産業の発展は非常に急速である。 The development of the computer industry has been very rapid.

On Technorati: book, finance

Hi Sacha,

Many of us, like me, have a lot to learn about financial literacy. I'm reading up on financial literacy through Francisco Colayco's book (Pera mo Palaguin mo) and Larry Gamboa's book (Think Rich, Pinoy!). Good read, very applicable to us Filipinos.

Gabby and I had a little discussion in January. Take a look: Cashflow! - Edutainment in a box

Yeah, I heard about Cashflow! I'd like to play it. Anyone have one of those and a free afternoon? We could also have a Monopoly party. I was never very good at Monopoly (and in fact usually found games a drag), but that doesn't mean I can't learn to be good at it. =D

E-Mail from Richi's server

猫は夕食に魚にありつくとわくわくする。 My cat is thrilled with joy when she gets fish for dinner.

On Technorati: business, finance