Monday, 29 February 2016

RRSP deadline is today

February 29.
Wow! That comes only once in 4 years. 
For people who want to contribute to RRSP to take advantage for 2015 taxes, today is the deadline. 
I put some money already. There is no stress now. With the current stressful financial situation, I am not maximizing my contributions.
For the 2016, I am planning to save up throughout the year.  
The correct strategy might be to save about 18% of the pre- taxed income. How many people can afford to do that?

My doable strategy is to save 10% .
Since the employer is not cutting the tax, I think, I can put that amount in a different account. Many personal finance experts suggested to "pay yourself first". 


Many of my dental assistant friends said not to contribute to RRSP. The strategy is to get full OAS and CPP when you retire. I don't want to depend on the government fully.What if I want to retire before 65? That is why we need to use the TFSA. 
What you like to do? Maximize the TFSA first or RRSP first? I am still debating on it.


Sunday, 28 February 2016

Saving money with Naturally Imperfect

Canadians are really feeling the pain of high grocery prices. On top of it many companies are laying off work force. What can we do to cope with the higher grocery prices?

We reduced meat purchases already. We buy the reduced to clear meat some weeks. Then stretch the meat by adding potatoes, carrots and other veggies to it. The clearance isle meat has to be cooked immediately after purchase. (I don't like to freeze that).

Since Real Canadian Superstore and No Frills now has a new line called "Naturally Imperfect", we buy that too. I tried potatoes. It was fine. Then we bought apples. One bag of apples was enough for both of us for a week. This week I have Naturally Imperfect apples and carrots.

The apples in the bag are different sizes. Some very big and some small. They are crispy and feel fresh. The carrots have nice color. Some have funny shapes. I tell you, they taste good and fresh.

I saw people are buying them. I read on a blog, saying the blogger was pointed towards the expensive apples when she was buying some similar produce. We didn't have that experience. May be Torontonians, especially the No Frills shoppers like to get a good deal on produce.

What do you think of  "Naturally Imperfect" brand?

Saturday, 27 February 2016

Toronto Public Library and lost loonie

I love library. The Toronto Public Library is amazing. They have about 100 branches in this big multi cultural city. I can borrow about 50 books at one time. They have amazing magazine collections. Then movies and music in several languages. 
It is like a dream for a book lover. 
Library has option to place "hold" on books. It can be done online too. When the book comes to your home branch you will be notified, either by phone or by email.

Now, TPL even offer overdrive books. They have Safari for business books, Zinio e-magazines, Hoopla digital music, e-audio books etc. 

The physical books can be borrowed for 21 days. The digital books can also be borrowed for 21 days. The difference is physical book you have to return to library. The digital books will vanish automatically. In winter, I am really lazy to go out. So, I prefer to get overdrive books. 
When the outside is more pleasant, I love to have weekly trip to library. Holding a book/magazine in hand is more pleasing than reading online.
I was surfing some blogs online and came across a good review about a book. I really wanted to read it. So, like most Torontonians, I checked TPL website. Happily placed a hold to pick it up from home branch.

When I placed hold, the website clearly told me if I fail to pick up when it becomes available, I will fined a dollar. I was so sure that I will pick it up or cancel the hold if I can't pick up in time. 

Life happens, days got busy and I completely forgot about picking up the book. When I was placing a hold on another book recently, I realized I have fine :( . 

Of all the frugal things I am doing to save money and I lost one dollar because of stupidly forgetting... The dollar suposed to be got invested ...

It is just a dollar, you may think. A dollar here, a dollar there, you can easily waste hard earned money so easily. 

A reminder to myself, to be careful about simple things like placing hold on a library book.
Do you have a similar story? How you forgive yourself for such mistakes?





Thursday, 25 February 2016

Are credit cards evil?

Whenever I am at the mall, there will be at least one credit card person to ask about applying for a card.
When we immigrated to Canada, it was hard to get a credit card. It was same like Canadian experience for a job. You don't have credit history, you cannot have credit card. You don't have credit card, you cannot make credit history.
Once I got a job, got the first credit card from CIBC. It felt like I won lottery. 
Then, I learned about credit score and such, and became wiser. So, I am tempted not to apply for more cards. (I cancelled that one later)
Many of the get out of debt gurus suggested to cut credit cards. 
Do you think credit cards are evil? 
I was thinking that way too. Then realized they are evil when we are not paying the bills on time. The interest rate is 19.99%. That is insane!!!!
There are credit cards with rewards and cash back. Then there are people who can use credit cards to save money.  You can read it on the MMM blog here.
Ok, so what a lower middle-class person like me can do with credit card?
I have PC finacial Mastercard, which give PC points. 
I do have it because, my family does grocery shopping mostly at No Frills and Costco. The PC points can be redeemed for grocery at No Frills. 
We also have a Capital one master card. It gives cash back as Check to Costco which can be cashed at Costco.
If you are like me  paying the credit card bills at time, then it is fine to get rewards. If you are late to pay, the evil will tear you up with interest. 
It is foolish to cut down credit card. If you laid off or suddenly unemployed for some reason, the credit card can be your guardian angel to get money fast. Yes, you have to pay the interest. But, the money is there, in case the emergency fund is not enough.

Don't you really like the fact that you don't have to carry money with you when doing grocery shopping? Make sure to have a PIN to protect the credit card. 
Which credit card rewards you love?

Disclaimer: The blog is not getting any money from the links. 





Wednesday, 24 February 2016

XIC: A candian ETF to watch

We discussed about the ETF holding 60 large companies of Canda, XIU beofre
Let us have a look on another ETF , XIC, which covers large, medium and small companies of Canada. 
If I buy XIC, I am buying all of the TSX stocks: Really?
It was first introduced in 2001 and owned by iShares and managed by Blackrock asset management. 
This one holds big banks, other big financial companies, gold and energy. So all sectors are covered right?
Another interesting fact is XIC is a capped weighted ETF. I was looking for what the heck is capped weighted. XIC cannot hold more than 10% of one holding. It is good for the passive investor.
The management expense ratio is 0.26%, which is very low. With the stock market going down now a days, it is trading in the $19 range. If you don't have a big chunk of money to invest, this is a good ETF to consider for small monthly investments. Talk to your bank about this. If you are a self directed investor, doing dividend reinvestment(DRIP) is a good idea to get extra units without paying the fess.
Even though you don't like to buy XIC or XIU, you still can use them to research on which individual stocks you want to purchase to get great returns.

Monday, 22 February 2016

Coping with increased Grocery price


The Canadian dollar is low against the US dollar. We are all feeling the pain of surging prices at grocery stores. I can see how much the prices went up on TV and newspapers. Seems like everybody just complaining and paying the higher price. The major complain heard at the work place is expenses going up while the wages staying the same.
I was searching online how to cope with the increased grocery prices and not starving.

We used to buy items costing $0.99 per pound. My husband is the one usually does the grocery shopping.
When the lettuce prices went up, we stopped buying lettuce at all. After all, I am not a fan of salads in winter.
Even now, some apples are priced at my range. So, we get that.
Bananas are always reasonable.
Buying vegetables is really hard. But, if we have an open mind to cook with whatever available at our price range, we still get enough to survive for the week.  last week I got butternut squash, eggplants, winter melon and potatoes.

 My family stock the freezer when we get a deal.  When we got 10 pounds of carrots and beetroots, we skinned , sliced and freeze them.
Beetroots are bit challenging though, because of the red stain. I cooked them whole to make the skin loose first. Then removing the skin was easy. Cooked beets are easy to cut into wedges. Oven roasted beets are delicious! I should have bought two 10 pound bags.

I got tomatoes free in the summer from my friend. So, I washed, dried and placed them in the freezer. Whenever I need to cook with tomatoes, I take the frozen ones instead of fresh. They are just finished last week though.
Some weeks tomatoes will be 0.99 per pound. Other weeks they are priced higher. So, I like to buy more when the price is right.

We also buy frozen vegetables. I came to know that they are not losing any nutrients. They are good to make soup or stir fry or curries.

What about dried beans instead of canned ones? Just soak them overnight and cook in the morning. You are saved from the preservatives and no can to recycle as an added benefit.

I buy the meat for stew, which is less expensive. Once it is cooked in slow cooker, I add frozen veggies and spices to make it more delicious.
I can see that my family is having a lot of legumes too. They can be added to soups and stews.
Eggs and milk prices not went up that much. That is better right?
One suggestion I got online is if lettuce and kale are having same price, buy kale instead of lettuce. The reason? Kale is nutrient rich than lettuce.
Do you have any other strategies to cope with increased grocery prices? Do mind sharing them with me?



Sunday, 21 February 2016

Real estate investment: different idea

The news is all about how the the real estate buble can burst. The market is not responding to the news of bubble. One of my co-worker bought a house in in GTA for over a million.
I am really happy with my small condo in Toronto. 
Did I ever tell you I am not very great in household chores, especially cleaning?
So,I prefer to live in small space and happy with spending time on reading or web surfing. But should that prevent a person like me from investing in real estate? Don't we have any hope?
Yes, i found that hope. We can invest in REITs. That is a short term for real estate investment trust. 
The Motly Fool website mentioned about Riocan. Then I got interested in it. Riocan is trading in TSX with ticker symbol rei.un
My research found that it is the largest real estate investment trust in Canada. They own properties in Canada and the United States. 
They were selling some of the US assets last month, I believe. 
The attractive part is the dividend yield:5.56%. 
So,I decided to have Riocan in my RRSP. Since the purchase is still very fresh, I will give updates about it when I get the dividend.


Thursday, 18 February 2016

Habits to get Rich and happy

We all know that to get rich, we should avoid being in debt. But, still, we tend to borrow for kitchen/bath renovation, and think, it is perfectly normal.
Is it really? Is that is the thing making you happy, then you have a reason for that debt. For most people, the debt of that renovation is scary. One more item to feel poor and to feel unhappy.
So, think of happiness over consumerism. Then we will find that spending less than we earn and saving few bucks will makes us feel rich and happy.
I used to enjoy a glass of wine on weekends. Then, I was getting take out dinners like once or twice a month. Starting January, we stopped that habit. We use to cook all meals at home. Decided to have alcohol on special occasions only.
As a result, I lost 5 pounds without big workouts. To add more happiness, I can see my spending is also less. 
The family grocery shopping is on Fridays now. Since Sunday is off day, the car stays in the garage. The errands are planned in a way to reduce the gas expense. I feel that is good for the planet too.
With little bit of money left over at the end of the month, I can think of maximizing my TFSA.  I would like to do TFSA before RRSP, because, the earnings in the TFSA is tax free. The RRSP amount is taxed when we take it out. RRSP also has more restrictions than TFSA.
Each financial transaction becomes  questions like: a) is it going to make me happy
b)is it going to make sense
c)Can I get it at a lower cost 
See, that is habits doing to me. It is getting wired in to my brain. So what are your habits making you happy?



XIU: Canadian ETF

XIU , iShares S&P/TSX 60 index, is a Canadian ETF holding 60 large Canadian companies.
It is getting traded in Toronto Stock exchange. So, we can buy it with Canadian dollar.
My point is if the 60 largest companies in Canada are not making money, who will make money?
The main holdings in this index are Royal bank, TD bank, Scotia Bank, Bell Canada etc. All are my dream companies to own.
The main sectors in XIU are finacial sector, Energy sector and the material sector.
The last distribution according to the website is $0.15 per share, in December 2015.
Management expense ratio is 0.18%, which is very low. So, I would like to own it in my TFSA and RRSP.
When I buy it, I am going to do the DRIP too.
Another ETF to do some research on is XIC, which is for a later post.
Before investing money on XIU, do your own research and see is it good for your investment strategies. I am not a financial expert, you know that right


Monday, 15 February 2016

Goals and money secrets

My co-worker drives a Lexus. She has $300 watches. Yes, watches, more than one. Then she owns designer handbags and other nice pretty things.
We happened to talk about RRSP and she told me she don't have money to invest. How that is possible, right? I am an assistant and she is a hygienist making almost double my income. 
Then I came to know, she has leased the car. The insurance payment is on her too. The student loan has to be paid. She has credit card debts too.

So, what is the secret of having money ?
There is no secret: Just spend within your limits, meaning, spend less than what you make. Many personal finance bloggers will assure you that is the real secret to having more money.

I take the bus usually. So, my transportation cost is less. (The bus fair went up $0.25 in 2016, but my wages didn't).


Since it is the coldest weekend so far in here, we didn't go out. That means home cooked meals and no spending. That is great and healthy too.

Couple of years before, I bought a clothes drying rack for $30. Ever since, I use that to dry most of the clothes.

Cooking is taking a lot of energy too. We try to cook at the off peak times to save on power.

 Since the electricity charge is up this year, my goal is to keep it less than $65 per month. 

I am looking forward to make more changes to consume less and be happy.Do you have any ideas to share?






Sunday, 14 February 2016

What is an ETF?



Yes, this is an interesting one.
In the beginning, I didn't know that they could be traded on the stock markets.
If we are buying an ETF for gold, we are investing in the companies included in the ETF. If you have the ETF XGD, for example, you get the benefit of investing in Barrick Gold, Gold Corp, Kinross, Royal Gold etc.
Now a days, whatever index we can think of, there is an ETF for that.
ETF can be considered as a mutual find with less expense for the investor. That is my understanding.

Starting the savings

In 2016, I started to dream about getting financially independent.
So, started putting some money in TFSA. A small sum of $5000 and started a low cost trading account.
I bought few shares of Bank of Nova Scotia, Bell Canada and Algonquin Power.
I heard about ETF only recently. So, as a beginner, I got few shares of XIU.
I am reading some personal finance blogs starting in February. They mentioned about DRIP. That is dividend re-investment program. So, I called and asked my trading firm to  start that program to me as well.
Since my employer is not deducting my income tax, I really have to start RRSP . Otherwise I have to pay to the government when i do tax.
I got a loan of $8000 and started another trading account with that.
I bought two ETFs win that one.
1. ZRE
2. VCN
Still there is cash in it. I am going to DRIP the earning in that too.
To start investing in US$, i need to fill up some forms too.
Since the markets are down, my investments are down too.
I love to buy few shares of the Canadian banks too. May be Royal bank? May be CIBC?