Suit, meet Boot!

My GS500

It’s pissing snow in Ontario today but spring is almost here! I absolutely can’t WAIT to get back on my bike. I can hardly think about anything else. Plans for a trip this summer are afoot and I just can’t decide if I should keep my GS500 or upgrade to something more suitable. My trip will take me on approximately 11,000km of asphalt and some 1,000km of dirt and muck.

I will travel through New England up to Newfoundland, across Labrador to Quebec, back to Ontario and across to BC, BC up to Yukon and NWT finally driving across to Alaska and south Vancouver and BC again. I have read that the 1,000km of dirt roads will be extremely difficult (many reports say impossible for road bikes) on the GS500 but I’m not convinced it’s worth spending thousands of dollars upgrading my bike for 1,000km.

The bikes I’ve been considering are the DLR650, XR650, KLR650 and the F650GS. All of these bikes are going to be better than my GS500 in the dirt. The thing is that first three are going to be crap for all of the highway riding compared to the GS500. The F650GS is my dream bike but it’s out of my price range really. They have it in yellow and black like the F800GS this year too. It’s gorgeous. But at $15,000 new that’s around a year of travelling expenses. A decent used one is still $10k. Even if I could rustle up the cash for it, I’d rather spend it on booze while travelling.

Swoooon

My GS500 is worthless really. If I sold it now I’d be extremely lucky to get $2,500 for it. It’s getting rusty and it won’t start at the moment without a spray of quick start although I’m hopeful that I can fix that before the spring. I’ll give it to a local mechanic if I can’t figure it out. I’m pretty sure it’s the just cold or the carb. I’m kind of worried it’s a valve issue but only time will tell. If it is then I will look for a cheap new engine. Otherwise it will get me across the country just fine.

I will need to add some stuff to the GS. It’s not ready to ride on a huge trip like this. I’m looking at the following…

• A pair of tourances – $400
• A power socket – $40
• Windshield – $200
• Brakepads – $150

I was going to add hard luggage but it would cost another $800. Screw dat! I can construct my own headlight guard from materials I have. I will try to bang out a bash plate myself too. I love the GS500 because I mostly understand how it works. There’s nothing fancy about it. I know the maintenance and I know when it’s sick. I fucking hate the carbs though, even with their simplicity I find that I can never clean them properly. The F650 has fuel injection, a radiator, ABS, heated grips, loads of electronics and sensors. My GS500 doesn’t even have a  fuel gauge

I hope I’m not crazy trying this on a GS500. I still have a few months to decide anyway. I’m so freakin excited!

Do you want some non-traditional advice to get you on your way after college? Well this is exactly what I did after graduation so it’s definitely realistic. It’s not very responsible though:)

Rule #1: Don’t Get a Job Right Away!

The first thing I would advise is to pretend that you’re still in college for at least the first 6 months after you finish. So go on unemployment. Keep getting drunk. I highly recommend a trip somewhere tropical. If that’s out of the question why not try travelling around your own country acting like a tourist. So many people never see their own backyard. Now is the perfect time for this kind of trip, you will never be as free again in your life.

A Lifetime of Responsibility

I did this myself and besides meeting some of the best people I have ever met before or after (I love you all!), it was precisely because I took time off and met new people that I landed a three year paid trip to Canada with an awesome company.

I don’t know where I would be right now but I know for sure that I wouldn’t have had so many AMAZING experiences this summer, I wouldn’t have visited beautiful locations in North America and I wouldn’t be sitting here drinking this Dogfish Head 60 minute (Yum Yum)!

Get out there while you can. It will change your life!

Phew 6 Months Already?!? Ok Now Get an Income

It’s been 12 months hasn’t it? You’re probably in debt now right? It’s OK, don’t worry. You need to get organized to pay off the college bar-tab but you have 60 years to do it. Relax and get yourself a job you love.

Practice Thoughtful Spending But Spend All The Same

I. Hate. Budgets. I can’t count the number of times I started the virgin spreadsheet with rows for “Rent”, “Food” and never opened it again. Thankfully there are now some wonderful internet apps that will budget for you. Personally, I use Mint EVERY DAY. Budgeting for me now consists of logging in. That’s it.

Mint will connect to your bank each day to catalogue all your transactions. It’s absolutely genius and it’s completely free. You can view and organise your spending quickly and accurately and all with no rows or columns or damn macros. It’s just awesome. If you do anything this week, open a Mint account – http://www.mint.com.

Now that you can see where you’re spending your money, look for something you know is a bit ridiculous. For me this is my $800 a month food and booze bill. This is just stupid and I’m constantly working on it. Find your insane expense and start cutting it down so you can divert that money to your debts!

One more thing, try to spend your money on things you need (food and shelter) and experiences. Don’t buy the 60-inch TV, do buy the trip to Cancun or hot-air balloon ride if you must.

Automate Your Savings Or You Won’t

If you don’t have savings right now it’s because you are a bad saver. I am too. The only way I can save is if the money is ripped from my bank account before I have a chance to spend it. Please set something like this up.

It’s best to choose an account that is a pain in the ass to get to. Think ING or your credit union rather than an account with your checking account provider. You want a savings account that only accepts withdrawal requests by Canada Post and only pays out in Zimbabwean Dollars. Make it hard to get to your savings.

Think about how much you can afford to save. $20? $30? $50? Now add $100 to that. Honestly, add $100 to whatever you thought of. You won’t miss it but when you look at your savings in 6 months time you will be AMAZED that you have that much cash to your name.

Now automate the transfer. Your savings account provider will tell you how to do this. Usually sending them the first deposit as a cheque will be enough but your bank will provide you with all the required details. You only need to call them.

You’re a Debt Machine

Once you have around $1000 saved you should stop saving and start paying off debt. I recommend paying off your credit cards first.

Many people will advise you to start paying down the account with the lowest debt first so that you can pat yourself on the back every time you close one out. No way, pay off the credit card vampires first. They charge you 20% which is INSANE. Pay off your debts in order of the highest interest. Automate it if you can.

You have at least $100 from your savings that you can divert to your debts. Set it up!

That’s all I have to say. Keep paying off debts. If you dip in to your savings for an emergency, stop paying of debts and get the savings back up to $1000 or so.

Once you have all your debts paid off you’ll feel as free as those first 6 months again!

Your Money!

How low is your bank’s savings rate?

Pick any typical consumer savings bank. Mine is TD Canada Trust so let’s use that as an example. Right now you can get a couple of different savings accounts with TD. They will basically give you from .25% of a percent to 1.25% depending on how much money you give them and how much you’re willing to pay to withdraw it later. See? – Crap!

“High Interest”

1.25% is the maximum savings rate for their “High Interest Account”. This is in line with most of other savings accounts and I am not picking on TD alone. For example, Scotiabank has 1.25% interest but only if you have $5,000 or more in the account otherwise you get nothing.

So under five grand you basically give them free money to dish out to young people buying high-ceiling condos and smooth granite counter tops which earns the bank 5-6%. All you get in return is peace of mind with the Canada Deposit Insurance Corporation (CDIC) insuring your savings up to $100,000.

Here’s what 1.25% gets you in a year if you have enough saved to get any interest:
For $5,000: $62
For $10,000: $125

Don’t Forget About Inflation

This is less than inflation by the way. Inflation in Canada has been roughly 2% on average for the past 10 years. What does inflation mean for your savings with the bank? You put $5,000 in the bank for safe keeping. Next year you go to take out the $5,000 from your savings to cover a couple of missed pay checks and you find that you now have $5,062 in the bank. Unfortunately, because of inflation, everything is 2% more expensive so your $5,062 is only worth $5,024 in the grocery store. You ‘lost’ $38.

There is a better way. You could buy 186 of the TD Canada Trust Series-Q preferred shares today which would cost you around $5000. That’s including brokerage fees. Preferred shares return a specified dividend each quarter and in 1 year you would have earned $260 in dividends. Now you must pay tax on the $260 of course so let’s say take off 30%. Your $5,000 would now be $5,182. You beat inflation and made 82 bucks. Great! Looking at this as a percentage you make 5% in 1 year. This is from the same bank offering you 1.25%!!

OK, what are the downsides? The downside is that if the price falls you lose some of your principal $5,000. No doubt about it, there is more risk involved with an appropriate bump in potential profit.

Not For The Short Term

I used 1 year in this example to keep the calculations easy for my head. If you’re only saving for 1 year then stay away from these shares. Ignore me. But 2-3 years, 5-8 years? Stay away from GICs and “High Interest Savings” accounts. Make your money work harder.

I wonder how many people would have gone for the Q-Series if TD explained this option to them 2 years ago when they walked in the door with $5,000 looking to open one of those TFSA things they read about in the paper?

Educate yourself about all your options before giving these goons your money!

It’s the middle of September and the temperature suddenly drops 15 degrees overnight. Brrrrrrr! A sharp reminder we live in Canada.

The chill wind and falling leaves means it’s the time of year where you need to be aware of your TFSA contribution limits for 2012.

More Tax Free Savings For 2012!

Did you know that the government is giving every Canadian tax resident over the age of 18 an improved $5,500 additional contribution room for their TFSAs in 2012??

If you have never contributed to your TFSA (you FOOL!) then you may well have $20,500 contribution room. How do you calculate your contribution room for 2012? Well the best way is to look at your tax return because that will include your contributions. But if you’re new to Canada or just turned 18 recently then you can use my handy table:

If you don’t use Mint.com or Google Finance (I use both – they’re free and AWESOME) to track your investments start today. Using Mint, in 2 minutes of entering a username and password I can tell you to the penny how much I put in my TFSA for the past 12 months. And with Google finance I can tell you that I have lost 12% of my investments since 2009. So maybe you shouldn’t be listening to me!:)

Calculate Remaining TFSA Contribution Room

Use the following formula to get your remaining 2012 TFSA limit:

Armed with this information, if you can save some cash up between now and Dec 2011 then get it working for you in your TFSA. Keep your money out of the government’s hands my friend!

Are you killing at TFSA investing? I’d love to hear about it because my portfolio has been as useful as a hard-on in a nunnery – I must sort that out!

Tut, tut BP!

Yup, BP fucked up big time. But oil is here to stay. The world is predictably starting to forget about the catastrophic spill and judging by the amount of overtime GM has my girlfriend putting in; we still love our SUVs.

This accident drove down oil prices and so a few months ago I finally decided to gamble $860 on the stock market. It was my first time out and I put it all in a Canadian energy ETF called XEG (see My Portfolio for more details).

Don’t Do This

It was a pretty horrific choice for a first stock. Even though it has some wind farms and solar, I’m really gambling on oil here, pure and simple. This fund has a beta (β) of 1 and a P/E ratio of 200! This means it’s as volatile as the general market and returns f**k all dividends.

This is a textbook bad choice for a first time investor due to both figures. You could lose a good chunk of your original investment if the market decides you’re an idiot and you won’t have ANY income to make yourself feel better while waiting for this to happen!

This stock has really shown me how completely unpredictable the stock market is! I have seen it drop 40 bucks to my starting figure of $860 in the morning, climb $60 in the afternoon to $920 and then slip back down to $900 by 5pm.

I can just imagine some guy at 64 watching his retirement funds drop the price of a new BMW 325i over their morning coffee. Crazy stuff but it is really addictive. As it stands I’m down 3% and I’m trailing the S&P 500 with this investment. C’est la vie!

Time Is Your Friend

Of course all this is silly. What happens over a few months in the stock market means nothing really. Private investors have few advantages over professionals. You do not have access to the same resources as the pros and they will typically kick your ass over the short term. However we don’t have to provide quarterly reports and you must use this to your advantage. You buy stocks to hold. Where these guys must impress every three months, you can take losses over the short term in order to make money over the long term.

Do not try to anticipate what’s going to happen next week, next month or possibly even next year. You buy for the 2 year, 5 year and 10 year time frames.

So! What was your first stock? Or maybe more importantly – What will be your first stock!

Featured image by ideum.