I always look forward to the Toronto Indy and this year is even more special as my friend James Hinchcliffe will be driving in the Indy Lights series, and if all goes according to plan he will be driving in the full blown IndyCar series next year. Go James!

From Around The Blogosphere

Jonathan Chevreau looks at reasons why shorter term investors might want to consider the Canadian listed ETFs over their US listed counterparts (quotes from yours truly are in the article - thanks Jon!)

Big Cajun Man explains how you can check how many months you have left on your cellphone contract without going into the store. Personally, I just call the customer service number…

Michael James on Money explains how to use silence in a negotiation (it works very will by the way).

Canadian Capitalist is a fan of active management afterall… well, you’ll see what I mean.

Larry MacDonald explains the 398th way to save money (this is in reference to Squawkfox’s great book 397 Ways To Save Money).

Million Dollar Journey explains how we can learn a little about money management from a board game.

Four Pillars talks about some of the dangers a small scale landlord can fall into.

Thicken My Wallet discusses the correlation between the thickness of magazines and the health of the economy.

This Week’s Racing Video

This week I’m posting a video of one of the greatest drivers of all time, Ayrton Senna. But what makes this video especially memorable is that he is driving a Honda NSX (the Acura brand doesn’t exist in Japan if I’m not mistaken) around Suzuka wearing loafers and no helmet! (Email subscribers will have to visit the website to see the video).

If you are new to WhereDoesAllMyMoneyGo.com, every Friday I run a post called “A Lap Of The Blogs” which provides links to articles I found interesting and think that others may want to read for themselves. I also include some commentary on what’s going on in my personal life and a weekly “racing video” since my former life was in the auto-racing industry. The name “Lap of the Blogs” is in reference to “A Lap Of The Gods” which is an old video series which chronicled on-board footage of the world’s greatest F1 drivers lapping various racetracks from around the world.

You may not be aware that some financial advisors have asset gathering or commission quotas (not all do, it depends on their firm). For example, new investment advisors at the big bank owned brokerages will typically have asset gathering targets of around $5 million per year (some are higher, but $5 million is roughly the average from what I have seen).

Every firm is different, and some will assist you by providing referrals from the bank branch network - when a client has perhaps outgrown the mutual funds and GICs offered at the “bank branch level” they may get referred up to the brokerage. Others (most) expect you will source the assets entirely on your own.

I don’t know the exact stats, but a large number of advisors do not stay with their first big brokerage firm after the first two years. You see a lot of them crossing the street. That means they switch firms and bring their clients and assets with them as best they can. The new firm may pay them a bonus on assets they bring in, or treat them as rookies again (with a base salary plus reduced commissions). When their new base salary expires, they will probably have more assets under their belt (what they brought with them, plus what they sourced at the new firm). They will keep on switching until the next time their salary runs out they have enough assets to support themselves from commissions alone.

Branch managers have “new hire” and “competitive hire” targets as well. At the end of the day, the brokerage business lines contribute to the bottom line of the overall companies, so what they do is in theory driven by maximizing shareholder value - but there is something about this advisor turnover that just seems odd don’t you think?

For those who would argue that those who hit their quotas won’t have any problems and those who don’t hit their targets don’t have what it takes to be financial advisors, I would say that if you replace “financial advisor” with “salesperson” then I couldn’t agree more.

You’ve been living under a rock if you haven’t at least heard about Twitter. But fret not, you are not alone if you don’t have a twitter account and now ING Direct is offering you a way to 1) get your feet wet with the twitter experience and more importantly 2) raise awareness on bank fees.

A friend put me in touch with ING Direct’s Social Media Lead who was kind enough to answer some questions about their new FeeTweeter application. My questions are in italics and ING Direct’s responses are in regular text. Please note: I am not being compensated or have any affiliation with ING for writing this post - just thought it would genuinely be of interest to some readers.

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What is the FeeTweeter application in a nutshell?

The FeeTweeter application is a Twitter app that allows users (and non users) of the micro-blogging tool to keep track of the bank fees they’re being charged. The application is located at http://FeeTweeter.fairfees.ca, where you can choose to tweet using your own account or a guest account. You’ll be able to create your tweet by selecting the type of fee, how much it was, and whether or not you think it was fair. You can even customize your message; we’ve received some hilarious ones so far!

The application tallies all of the Fee Tweets that you’ve submitted via @FeeTweeter, and direct messages your totals to you every two weeks. We built out this application in support of our Fair Fees movement, which began early May at http://www.fairfees.ca. It’s a community where you can Listen, Speak, and Act against unfair bank fees, presented in a fun and interactive way.

How can people join in on the fun? Is there a cost or do you have to submit any personal info to sign up?

It’s easy! You don’t necessarily have to have an account or even be that familiar with Twitter (even better, you can get acquainted by trying out FeeTweeter). You don’t have to submit any personal information – even if you log in using your own Twitter account through our application on the FairFees.ca website, it’s only so you can publish the tweet to your stream.

How many tweets have been sent to FeeTweeter so far?

We launched officially July 2, 2009. The running total right now is about 300 tweets and about $4,500 in total bank fees tweeted. Keep ‘em coming Canada!

What’s the biggest fee you’ve seen tweeted?

The largest one we’ve received so far has been $250.00 for Product Transfer Fees. That’s huge, if you consider the average Canadian’s day to day bank fees are about $175 a year.

What is the most common type of fee that people complain about?

ABM Fees are definitely up there. Overage and transaction fees are something that many Fee Tweeters have a beef with as well.

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The following are three questions used to assess basic financial literacy:

1. Suppose you had $100 in a savings account and the interest rate was 2% per year.
   After 5 years, how much do you think you would have in the account if you left the
   money to grow: more than $102, exactly $102, less than $102?
2. Imagine that the interest rate on your savings account was 1% per year and inflation
   was 2% per year. After 1 year, would you be able to buy more than, exactly the same
   as, or less than today with the money in this account?
3. Do you think that the following statement is true or false? “Buying a single company
   stock usually provides a safer return than a stock mutual fund.”

In a recent study published by Annamaria Lusardi and Olivia S. Mitchell (March 2009), and brought to my attention by investor advocate Ken Kivenko of CanadianFundWatch.com, the authors indicated that in a study of 50+ year old Americans who were administered these three questions:

• Only 56% of respondents answered the first two questions correctly
• Only 52% of respondents answered the last question correctly

The paper (which you can access from Dartmouth College’s website here) goes beyond just testing these questions, in fact they developed a more comprehensive set of questions and tested a larger range of ages in a study that found a link between financial literacy and retirement readiness.

In case you missed it, the third and final show of the Ultimate W Expert Challenge has just aired and a winner was selected. For those of you who missed it but still want to watch, you can catch it again this Wednesday at 8:30pm on The W Network.

I was just over at Daniela’s place with Marc and Kristine and some of our significant others to watch the final episode together (these were the Ontario based competitors) and we had a great time recounting the trials and tribulations of the filming. It’s amazing to think that about 90 hours of tape went into making 69 minutes (23 minutes per episode) of TV - there’s a lot that you didn’t see.

I’m also happy to say that Daniela is going to write a few guest posts for this blog on ways to save money when it comes to interior design, event planning (weddings), and other topics that I think will be very useful. Stay tuned and thanks for watching!

Reminder #1

The third and final episode of the Ultimate W Network Expert Challenge airs on Sunday night at 7pm on the W Network. Thanks to everyone who has been watching and I hope you have enjoyed it - it was definitely fun to be a contestant!

Reminder #2

I don’t know how much longer the Globe and Mail’s Best of the Blogs online poll will be running, but thanks to everyone who has cast a vote for yours truly. If you haven’t voted yet, I would love for you to click on the following link and scroll to the bottom of the page where the voting is taking place. You can vote for up to five of your favourite blogs - last time I checked I was running fourth but losing ground fast! I would appreciate your vote!

Click here to Vote!

This Week’s Racing Video

Don’t worry, the weekly links will appear below - just thought I’d shuffle things around this week and place “this week’s racing video” first. This video shows just how fast an electric car can be - a 1972 Datsun fitted with an electric motor destroys some pretty powerful gasoline powered muscle cars at the local dragstrip! (If you are reading this via email, click here to view the video.)

From Around The Blogosphere

Howard Atkinson (President of Horizons BetaPro) talks to Jonathan Chevreau about his firm’s bull and bear ETFs - and helps explain the nuances quite nicely.

Jonathan Chevreau blogs about “parenting your parents” - it’s possibe that at some point you may need to take care of your parents when they get older. Jon provides some links to great information on the subject.

Thicken My Wallet has a great post about how giving some to get some in negotiating can be worthwhile.

Larry MacDonald asks if BCE’s dividend is safe.

Four Pillars has a post on the city garbage strike in Toronto - the comments section are well worth the price of admission.

Big Cajun Man recounts his conversation with Michael James about athletes going so broke so fast.

Michael James on Money give some free financial planning advice to future wealthy athletes.

Canadian Capitalist discusses the 5-cent levy on grocery bags, and explains how it has turned into a study of how incentives influence behaviour.

Million Dollar Journey provides a net worth update and also wonders about buying a new car. No one seemed to catch my quote from Ferris Bueller’s Day Off in the comments section!

Mark Wolfinger highlights his guest authoring of an article that discusses the investment option that no one discusses.

If you are new to WhereDoesAllMyMoneyGo.com, every Friday I run a post called “A Lap Of The Blogs” which provides links to articles I found interesting and think that others may want to read for themselves. I also include some commentary on what’s going on in my personal life and a weekly “racing video” since my former life was in the auto-racing industry. The name “Lap of the Blogs” is in reference to “A Lap Of The Gods” which is an old video series which chronicled on-board footage of the world’s greatest F1 drivers lapping various racetracks from around the world.

The second quarter of 2009 has been pretty good in terms of equity performance around the world. Here in Canada, the main barometer of overall stock market performance is the S&P/TSX Composite Index, or more commonly referred to as simply “the TSX”. For the year-to-date (January 1st 2009 to June 30th 2009), the TSX is up approximately 15.43%. But if you go back one full year (just click on the “1y”) on the embedded chart below, the performance for the last full year is still negative at -27.58%.

NOTE: The chart should update on a delayed basis so you might see slightly different numbers. The cumulative performance numbers will appear below the chart on the left.

Flash Player 9 or higher is required to view the chart Click here to download Flash Player now

View the full .TTT-T chart at Wikinvest

First a reminder: If you missed Episode Two of the W Network Expert Challenge on Sunday night, it is being re-aired tonight Wednesday, July 1st 2009 at 8:30pm on the W Network.

The Financial Blogger had asked a bunch of other personal finance bloggers if they wanted to participate in a friendly stock picking contest for 2009. The criteria was to pick four securities in equal dollar amounts listed on a Canadian or American exchange (not including derivatives) to just sit on for the duration of 2009 with no changes allowed. We are to provide updates every quarter and the contest ends on the last trading day of 2009. The initial prices will be based on the closing prices of December 31st, 2008 (i.e. yesterday).

Disclaimer

My picks were pure swing for the fence plays - two of them were 300% leveraged ETFs, one was a 200% leveraged ETF and the fourth was a penny stock play. Leveraged ETFs only do well if the underlying investment goes in the intended direction with little to modest retracements (if you are holding them for any extended length of time).

You can read the original rationale for the picks on my original post back on January 1st, 2009.

In case you don’t read the original post, read this: THIS STOCK PICKING CONTEST IS JUST FOR FUN, IT IS NOTHING MORE THAN GAMBLING. DON’T EVEN THINK ABOUT BUYING THE STOCKS LISTED HERE OR ON ANY OF THE OTHER BLOGGERS’ SITES WITHOUT FIRST CONSULTING A PROFESSIONAL FINANCIAL ADVISOR. IF YOU BUY THEM ANYWAYS, YOU MUST RAISE YOUR RIGHT HAND BEFORE PLACING THE ORDER AND REPEAT, “I AM A NUTBAR”.

Performance Update

The second quarter was kind to most equity portfolios and having a significant degree of leverage further enhanced that performance. My four picks were up 50.29% for Q2, after having been grossly underwater in Q1 (-21.77%). The cumulative performance for the first six months of 2009 now stands at +28.52%.

A brief recap of the picks:

1. TNA.us: Direxion Small Cap 3x Shares (-18.54% YTD)
2. EDC.us: Direxion Emerging Markets 3x Shares (+54.95% YTD)
3. ENA.v: Enablence Technologies (+96.67% YTD)
4. HOU.to: Horizons BetaPro Nymex Crude Bull Plus ETF (-19.01% YTD)

On a relative basis I went from 7th out of 9 competitors to 4th out of 9. You can click on the other bloggers’ names below to read their performance updates too. (If they have not yet updated their blogs, you will be directed to their homepages.)

I thought it was an April Fool’s joke when I received an email today indicating that the U.K.’s Financial Services Authority had ruled that Investment Advisors will no longer be allowed to collect commissions starting in 2012.

It is somewhat ironic that I had made the point earlier today that asking financial advisors to act like fiduciaries while paying them commissions is a laughable proposition, but apparently the Brits have woken up to this fact.

British IAs (short for Investment Advisors), will be allowed to set their own charges for advice, which will be independent from products sold. If this were to happen in Canada, then mutual fund MERs would drop by 30% - 50% (on average) and there would no longer be any financial incentives for advisors to recommend certain products over others (different products can offer varying levels of embedded commissions).

James Langton covered the story on June 25th here.

Click here to read more about the details as reported by Philip Porado from Advisor.ca.

I know that some people have always wondered why the email updates can’t contain the blog post title in the subject field so that they can pick and choose which email updates to read (and which ones might not appeal to them). Well, I have a solution. You can follow me on Twitter instead - because from now on, every time I update the blog my twitter feed will be updated within an hour and will include the specific blog post’s title. The only problem is that if you follow a lot of people on Twitter, you may miss my posts because any new updates from your other twitter feeds will push older tweets down the list… Nonetheless - you can follow me on twitter by clicking here. (Also note, you’ll get some random, mindless thoughts thrown in here and there - such is the nature of twitter.)

Wait - Don’t Know What Twitter Is?

Twitter is definitely not everyone’s cup of tea. TIME Magazine has an article that explains the origins of twitter and you can read it by clicking here.

Winner of the Formula 2000 School

I’m pleased to announce that we have selected a winner for the Bridgestone Racing Academy’s Thrill of A Lifetime 1 Session (Reynard). The winner is “Sam” for the comment he/she left on Four Pillars’ blog. The winner was picked at random (I counted up all the valid entries and then used a random number generator to pick a number at random). Sam, if you are reading this, you should expect to get an email from Four Pillars shortly - make sure to claim your prize and CONGRATULATIONS!

Also, a thank you to all who entered. If you didn’t win, please consider the Bridgestone Racing Academy in the future if you would like to give someone (or yourself) a Thrill of A Lifetime starting from $245 CAD.

Finally, a big thanks to Canadian Capitalist and Four Pillars for the cross-promotion!