Mrs. Caj and I decided last week to sign up for Costco (we already had been members in the mid-90’s but didn’t renew after a year). We had been hearing about Costco from a frugal friend (who is not a member, but uses her sister’s membership (might be the best thing to do)) and we will be trying for a year again to see whether Costco is:

• Worth the subscription fee and saves us money
• Or is a waste of money and a very dangerous place to shop because you buy huge portions of things that are not necessarily even cheaper than at your regular store.

Costco also has a few issues with payment, they do not take most credit cards (they do take American Express) but they do allow you to use direct withdrawal (used to be they didn’t allow that).

Benefits We Have Seen So Far

We knew of one large benefit from our Frugal Friend which is that the membership is valid all over the world. This means you can buy at any Costco that you can find. Why is that so important, you may ask? The Costco in Gatineau (across the river from Ottawa) sells beer at a much cheaper price. Due to the fact that this is a Costco the beer is in very large packages, but still you can get very cheap beer. If I was having a party I would go over to get beer just for that reason.

Not sure how the 2% cash back on purchases will work, however, but that may be another good factor as well.

We wandered around and were very conservative in our spending our first visit. We saw some things that looked cheaper, but we were very restrained, and may go back soon with a list of supplies that we need.

I’ll keep folks posted about our progress on this interesting experiment in spending.

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An interesting video from our friends at Ted.com about Time and it’s use.

Note this is the Psychologist who did the infamous Stanford Prison Experiment (google that and see what folks do to each other all in the name of “I was just following orders”).

Fighting Local Warming

Humorous in an odd way:

Now I am worried about this blog!!

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With Canada Day (July 1st) falling on a Wednesday and the 4th of July falling on a Saturday it makes for odd holiday patterns for both Canada and the U.S.A., my guess would be a lot of folks in Canada are taking Thursday and Friday off and making for a Mega-Long weekend.

To my American brother(s) and sisters I wish you a Happy 4th!

In the Financial Blogosphere

In the blogs this week some very interesting views of important issues in Personal Finance and Investing:

• Michael James and I both spoke about Whether I can Blow $5M but Michael James offers concrete Advice For Wealthy Athletes.
• Preet at Wheredoesallmymoneygo points out the TSX had a Rockin Year so far, and remember to watch him on the W Channel’s Ultimate Expert Challenge as well!
• The Four Pillars are taking a run at the always popular topic in Canada Tax Deductible Mortgage/Debt, always informative he runs down the hows and ifs on this topic.
• The Canadian Capitalist brings forth another irritating subject for me The 5 cent Levy on Grocery Bags Rip Off (in Ontario at least). Remember to wash your reusable bags!
• Loonies and Sense had Good Timing For Once, but even then ran into issues with the strike in the GTA (how high can you pile garbage?).
• In the Tech area, Techcrunch mentions two words that may revolutionize your phones: Google Voice, read this and start thinking about how you might use it, I already have signed up on the waiting list.
• Ellen Roseman continues her discussions about saving energy in Tanks and No Tanks.
• Larry MacDonald gave us an Update: One Minute Portfolio another lazy man’s investing tool (I appreciate folks who make my life simpler).

Remember the Globe and Mail Best of the Money Blogs voting continues until Monday as well! Enjoy the Mega-Long weekend.

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I received 3 different e-mails about On-Line Canada Day sales (Best Buy, Future Shop and Indigo) at various stores and at first I simply ignored them, but after thinking about it, this is really evil genius at work in the retail trade.

From the retailers point of view these “sales” are pure gravy for them:

1. Their retail stores are closed,  yet they are still selling stock (from their distribution centers).
2. They aren’t paying any retail sales staff, yet things are being sold (yes they are paying web folk to be around in case things crash, but I am sure they are relatively cheap).
3. No order is actually dealt with until the day after Canada Day (since you couldn’t ship, even if you had folks in your distribution center). No distribution center staff need to be working on Canada Day (thus you don’t have to pay them time and a half).
4. You have an interesting audience of folks either waiting to go out and party, or those that have come back from a party  and might be more motivated (read imbibed some alcohol).

This is truly evil genius on the part of these retailers and I salute their ingenuity. I like reading the e-mails and day dreaming about what I might buy one day, but unless there is something specific I am looking for, that I have the money for, I don’t usually take advantage of these “sales”.

Eating and Drinking Out More?

Even with the financial apocalypse Stats Can points out that Eating and Drinking out expenditures continue to increase in Canada:

Current dollar sales for the food services and drinking places industry increased 1.3% from March to just over $4.0 billion in April.

The price of food purchased in restaurants increased by 0.3% between March and April, according to the Consumer Price Index.

Very interesting numbers, given I would have thought folks would be staying home and eating more home cooked meals, however, this seems to contradict this a bit. Maybe this is a sign of a recovery, or more confidence folks have? We’ll see.

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Canada Day it is Again!

Canada Day returns this year with Canada turning a majestic 142 years young today. There is no Expo 67 like celebration this year, however Canada is preparing for it’s third Olympics this winter in Vancouver.

Enjoy the holiday Canadians!

Happy Moving Day in Montreal!

For those of you in Montreal, July the 1st is also the day that most leases begin, so enjoy your moving day, hope you found a moving van, and don’t carry too much up those winding stair cases!

And Now A Large Flag

Happy Birthday Canada

And Finally an NFB Vignette

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Interesting turn of phrase I have seen used to mean a few different ideas in the software development world and in a few other places as well.

The Interpretation I got for this phrase from the person who sent me was:

Eating your own dog food

1. Coined by a Microsoft manager, to use the products you develop in your office as your customers would (with the same software quality), to ensure you understand your product and understand your customers needs as well.

It seems to be an extension on the concept of “Practicing what your preech” or “Walk to the walk, don’t just talk the talk…”, but finding a company that actually uses their own product can be a good thing, I have found in my travels in the world of high tech.

Financially Eating Your Own Dog Food

Investing and Financial Institutions are a little harder to figure out if they “Eat their own dog food“, I think it would be amusing to find out that the CEO of my bank didn’t use the bank for his finances (if not very disconcerting).

I would be very interested to see if the following might be happening:

• The President of the insurance company that espouses “Freedom 55″ actually uses that program him or herself? I kind of doubt that one, but I’ll gladly retract that statement if it is not true.
• Does the CEO of BMO  use their “Mortgage Insurance” facility, or does he or she simply buy term insurance as others do? My guess is No, they don’t use that either (they may not have a Mortgage mind you either).
• All those insurance sales folk who want to sell me “Whole Life” insurance, do they buy the product? My guess is some do, but maybe at a much cheaper rate than we do.
• Does the President of TD use their Stepper GIC product? I think no is the answer on that one too.
• Do the CEO’s of the Mutual Fund companies that have MER’s of 4 and 5%, buy their own mutual funds? My guess would be not likely.
• Did Mr. Madoff buy into his own Ponzi scheme? Don’t answer that, it’s rhetorical, by the by, he got 150 years, given he is 72, he’ll be spending the rest of his life in prison (is that enough).

Any other examples of “Eating their dog food” in the financial world I have missed, please chime in the Comments section.

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Michael James (nominated by the Globe and Mail as one of Canada’s top Financial Bloggers) and I were having a discussion on Friday night about an interesting article written by Jon Chevreau at the National Post: Even Young Millionaires Need to Worry About Financial Planning.

The article outlines how young athletes who suddenly come into large amounts of money tend to expand their lifestyle and spending to reflect their new riches and many times don’t learn the importance of Personal Financial Planning until much too late in their lives. I quote:

Within two years of retirement, 78% of former NFL players have gone bankrupt or are under financial stress, while an estimated 60%  of former NBA players are broke within five years of retirement, according to the March 23, 2009 issue of Sports Illustrated magazine.

Michael James did not believe the number and questioned whether it was as bad as all that (he agreed that there is a problem, he just couldn’t believe it was as bad as all that). My view is this is very possible and I would not be surprised if it was worse than the numbers quoted by Sports Illustrated or by Mr. Chevreau.

The allure of a “rich” lifestyle and the fact that you have worked very hard to receive this monetary level does tend to throw off a lot of people’s Financial Gyroscopes (as it were). I have seen this at a smaller scale with folks that have got University degrees have lived a frugal lifestyle to get through the studies and when they graduate and get a good paying job, at first they remain frugal but then some folks just decide, “Heck, I deserve it!”, and start to lose their financial minds (I will plead guilty to this once or twice as well).

My guess is this is what happens with Professional Athletes, but they have the added problem of an entire species (for lack of a better term) of humans that seem to exist to prey on them, the hangers on (much like lampreys or other parasites). These people raison d’etre seems to be to leech off these walking banks, and this does not help these young people who suddenly get more money than they could ever dream of having. They get very odd financial advise from alleged professionals, and maybe trust people they shouldn’t trust (or worse trust people who then betray that trust). The players unions are trying to fix this, we shall see how well they might do (see the Sports Illustrated article for an eye opening statement by Raghib Ismail).

I remember when I was growing up and pro athletes did not make a lot of money (they made more than most working folks), but I remember a scout leader I had telling us about Dick Duff, because he played for the Canadiens (and the Leafs), but he had gone back to school to become a teacher, so he had a job after he finished with hockey. Do today’s athletes need to do this? Depends on the sport, and their pay level, but if they don’t plan their finances and plan for their ENTIRE life they are doomed to fall into the Rich Lifestyle trap.

Would I fall prey to this trap? We’ll never know, since my athletic talents were never a danger of putting me in this predicament.

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Yes we drag out a movie from my past, from the NFB, Impressions of Expo 67.

I am astounded at the clarity of this film and thank heavens for the NFB, as I view Expo 67 as a “mile marker” in my life even though I was only 6 years old at the time.

I love the description from the NFB:

This short film served as an invitation to the World’s Fair that was held in Montreal in 1967. It was largely considered to be the most successful World’s Fair of the 20th century with over 50 million visitors. The film presents impressions of the event and of Montreal at its liveliest and most exciting moment in history.

After Expo 67 the exhibition went on for a few more years as Man and His World and my family went every year pretty much, and LaRonde the amusement park is still in operation. Certainly a mile marker for Canada as well.

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Thursday caused the world to stop worrying about the Financial Apocalypse and start worrying about the demise of their Celebrity Aristocracy with the deaths of Ed McMahon, Farrah Fawcett and finally Michael Jackson.  I remember seeing Farrah Fawcett on the wall of most boys my age bedroom, and hearing her passing makes me feel a little older.

When celebrities die, does that change the economic climate? Hey anything is possible in this day and age, maybe we will see the Michael Jackson recovery?

The Poster

In the Financial Blogs This Week

With the summer coming is there an economic malaise about to fall? We shall see:

• The Canadian Capitalist points out that Borrowing Costs are Going up even though interest rates are staying the same.  Time to buy Bank Stocks again?
• Michael James points out Grocery Bag Lessons in Economic Incentives, and now he is a bring your own bag man.
• Preet at WhereDoesAllMyMoneyGo is pushing a Great Father’s Day Gift (OK I’d like to get it, but I am not entering as I feel there is a conflict of interest), if you want to go fast, go check this out.
• Four Pillars points out How to Use Aeroplan points, always useful to read case studies for services I use.
• Larry MacDonald wrote about how the Media’s Influence on the Stock Market, you’ve got to admit the media does swing things some times.
• Gail Vaz Oxlade asks How Do You Track Your Money, which is always a topic I love to talk about, although Gail’s method is a bit higher work than I’d do.
• The Canadian Tax Resource gives you 5 Tips to Pay Off Your Mortgage, which is always useful.

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No LCBO Strike

The LCBO and their union decided not to turn off the liquor spigot, and thus the mad rush on Tuesday simply meant that the shelves on Wednesday needed a lot of restocking (and lots of profits for the LCBO as well). For those who rushed out, guess you can have a BIG party for Canada Day, or you can keep your stockpile, for another holiday? There is a tentative deal in place and now we can all look forward to a boozy summer (whoo hoo!).

Unfortunately for Toronto their strike continues on and their garbage continues to stack up. With the heat this week, might make for some very aromatic issues in Toronto.

U.S. Interest Rates Stay the Same

Interest rates in the U.S. will stay the same for now, said the Federal Reserve on Wednesday.

The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

Good to hear, but energy prices going back up is going to whiplash on food prices as well, so inflation being low may be wishful thinking on their part.

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