Category Archives: Carnival

Carnival of Personal Finance #326

Welcome to the #326 edition of the Carnival of Personal Finance! Hi, I’m Tim and I will be your host for this week’s installment. This week’s theme is ‘I need a drink,’ in honour of the fact I just spent my Sunday bottling 28 bottles of sour cherry wine that came from a tree in my backyard.   For the record, no I’m not that cheap that I have to do that…I just happen to really like making my own wine and cocktails.

Editor’s Choice – While I freely admit there was some sampling during the bottling process (quality control purposes of course),  I still managed to find a few posts that either impressed me.

Barbara Friedberg from BARBARA FRIEDBERG PERSONAL FINANCE presents Wealth & Economics; Community vs. Country Club -A great insight into what the GDP is and why in some ways it really doesn’t matter to a lot of your life.

Sandy from Yes, I Am Cheap presents I Make Money Online: Virtual Assistant – An interesting post about the art of ghost writing and how to get into it and other online freelance jobs.

Nelson from Canadian Finance Blog presents The Basics On Balance Sheets – Finally a good post on the basics of a balance sheet without getting sucked into too many details.

J.B. from My University Money presents What Classes Do I Sign Up For If I Don’t Know What To Do? – Apparently there is solution to the problem of ‘I don’t know what degree to take’. I wish I read this article when I was 18!

IS from Intelligent Speculator presents It Could Be A Lot Worse, We Could Be In Europe – And now I finally feel better about the Canadian government debt after reading this post.

Budget – Otherwise know as can I afford a Black Velvet (equal parts champagne and Guinness beer) or do you need to start looking for the cheapest wine in the store.

Green Panda Treehouse presents Your Daily Commute’s Impact on Your Wallet, and says, “Are you saving money on your daily travels?”

Adam from Rabbit Funds presents 4 Tips to good (or better) budgeting, and says, “Budgeting is a very proactive activity. Budgeting is taking the time to decide in advance how you are going to spend your money and how you are not going to spend your money.”

Jonathan from Deliver Away Debt presents Review: The Ultimate Budgeting Software, and says, “Mint is a full featured money management website owned and run by the famous TurboTax. Mint is always on the lookout to provide the best and most revolutionary services all at zero cost to you. At the core of Mint is a passion for helping the masses manage their money.”

Frugality – Where you learn the best cooking tip ever: when in doubt add booze.

Corey from 20’s Finances presents How I Furnished My Apartment for $600, and says, “This article presents real information about how I used craigslist to furnish my apartment for $600.”

Miranada from Financial Highway presents 45 Ways to Save Money, and says, “You can increase the efficiency and effectiveness of your personal economy by finding ways to save more money. Here are 45 of my favorite ways to save money:”

Control Your Cash presents If you can’t grasp this you’ll never get rich, and says, “If you choose a credit card because of its balance transfer rate or introductory low-interest period, you’re a moron. Shut up and sit down.”

Saving – Otherwise know as the realization that a wine that costs 10 time more than your last bottle doesn’t in fact taste 10 times better. Rule of thumb, don’t exceed $30/bottle and ask around. There are lots of great wines in the $15/bottle range.

Money Beagle presents Unsure What To Do With That Extra Money?, and says, “Finding the right path takes time.”

Grace from GRACEful Retirement presents Saving & Budgeting–Two Entirely Different Things, and says, “I had a bit of an epiphany as I was setting out new goals for myself. For the first time, I realized that I cannot ‘budget’ my savings. To do so is to virtually guarantee that I will fail to save anything.”

Connie from Taking Charge presents Thanks for the 11-cent break, but can you make those gift cards reloadable?, and says, “On my next visit, I pulled the gift card out and asked to put another $50 on it. The cashier reached for a new card from a stack near the register and told me they weren’t reloadable. I would have to get a new card.”

Philip Taylor from PT Money Personal Finance presents Is Your Emergency Fund Big Enough?, and says, “So, how do you know if your emergency fund is big enough? This article gives you some points to think about to give you confidence in your emergency funds.”

Career – You know the thing you do to actually pay for all the booze in your house.

Paula from presents I Wanna Be a Billionaire!, and says, “Conventional personal finance advice says you should live in an area with a low cost-of-living. I disagree. ”

Money Walks presents 7 Ways to Get Funding for an Education, and says, “Money Walks looks at 7 ways you can get some extra money for your education. ”

SB from One Cent At A Time presents 10 pieces of financial advice for young adults, and says, “When you have graduated from college and trying to solve mysteries of financial world, what you should do to attain financial success. Advice of a life time for young people of the world!”

Suba from Broke Professionals presents What to consider before blogging for cash?, and says, “Lot of people think it is easy to make money blogging. Here is a list of things to consider before taking the plunge.”

Dividend Growth Investor presents Two High Yield Dividend Growth Stocks I am buying, and says, “Owning these two high income dividend growth stocks makes sense for investors looking for high yield and a rising passive dividend income stream. ”

md from Passive Income Now presents Are We Running Away From The Recession?, and says, “Has the recession scared us away?”

ElizabethG  from Modern Gal presents Starting Your Own Business?, and says, “I’ve talked to an increasing number of people who want to make the shift to working for themselves. I think some should give it a go, and others, probably not.”

Investing – Knowing the fact the a good vodka is basically tasteless, so don’t waste your money on tripled distilled crap when the next brand down tastes just as good for a fraction of the price.

Miss T. from Prairie Eco Thrifter presents Who Took the Service Out of Full Service Brokerage, and says, “If you are using a full service broker, make sure you are getting your money’s worth – there are a lot of other choices in today’s world to get your financial transactions processed. Know what services you should expect to get for the money you are paying and demand good customer service.”

D4L from Dividend Growth Stocks presents 10 Dividend Stocks Beating the S&P With Positive Returns, and says, “It is my goal to create an ever-increasing income stream from dividend growth stocks, while it is my desire to beat the S&P 500 index over the long-term. I believe in long term my dividend income will rise AND I will beat the S&P 500. Otherwise, it would not be a realistic desire. This has been the case since I have been publically tracking my dividend growth portfolio.”

Sustainable Personal Finance presents What is Passive Dividend Income?, and says, “If you are looking to generate passive dividend income then be prepared to put in the effort required to research a stock and find a good dividend paying stock for your portfolio.”

DSO from Dividend Stocks presents Pay Attention To The Ex-Dividend Date, and says, “Dividend investing can really be a good way to earn a little extra income. Indeed, if you create a plan, and take advantage of dollar cost averaging, it can also be a way to build up a substantial portfolio that can yield solid income opportunities. As long as you are reasonable about your dividend expectations, you can eventually build up a stream of income that can serve you well in retirement, during an emergency, or for other purposes.”

Kevin Mulligan from’s Retirement Planning Blog presents The Importance of Retirement Investment Goals, and says, “You can’t navigate to retirement if you don’t know where you’re going. Here are six steps to coming up with a retirement investing goal.”

Dan Meyers from Your Life, Their Life presents How to Start Investing, and says, “One of the most difficult parts of investing is getting started. I explain what accounts to use and how to get started.”

Jim Yih from Retire Happy Blog presents Has the stock market changed your day to day life?, and says, “The good news for me, is the stock market did not affect my day to day life mostly because I do not depend on my portfolio to live and pay the bills.”

Sean from Grow Money presents How To Become A Millionaire, and says, “So if everyone wants to be a millionaire and most of us are not millionaire’s, it raises the question – what does it take to become a millionaire and where are people going wrong on their adventure to become one?”

Ramsay from Moneyedup presents How To Open A Roth IRA, and says, “Among individual retirement accounts, the Roth IRA stands out because of its special tax advantages. Instead of providing tax breaks at the time of deposit, Roth IRAs allow account holders to receive benefits completely tax free after retirement. ”

Ben from Money Smart Life presents 9 Ways to “Beat” the Stock Market, and says, “Nine tips you can use to avoid letting the market get the best of you.”

Debt – The regret that kicks in after your hangover when your credit card bill comes in.

Sarah Minton from The $60K Project presents How I Paid of $60,000 in Ten Months, and says, “Thoughts on why I successfully paid off $60,000 in less than a year, and tips for readers to help them do the same.”

Jason from One Money Design presents Pay Down Debt with These 10 Tips, and says, “10 essential tips to help you pay down debt.”

Money Management – Otherwise knowing your limitations and planning for them (for example, putting the booze in the hardest to reach cabinet in the house to make sure you drink less).

Hank from Money Q&A presents Book Review Of The Wealth Cure By Hill Harper, and says, “The Wealth Cure by Harper Hill is an excellent book that shares with its readers not only advice on how to handle your money, investment, and financial life better, but it is also a book that so many people can relate to.”

FMF from Free Money Finance presents Valuing Time in Home Repairs, and says, “In any buying transaction, time needs to be a factor that influences your final decision. A great example of this is deciding whether or not to do home repair work yourself. ”

Cathy Moran from MoneyHealthCentral presents Ready To Stake Your Retirement On The Stock Market?, and says, “If each of us manages our own Social Security account, what becomes of those who make bad choices or have bad luck? Will the social safety net be dependent on good money management?”

Glen Craig from Free From Broke presents Do You Need Disaster Insurance? What Type Should You Get?, and says, “Do you need disaster insurance? Depending on where you live you may find you need disaster insurance. See the different types available and if you need it.”

Mike from Stupid Cents presents Is A Reverse Mortgage Right For You?, and says, “A reverse mortgage allows senior citizens to tap into their home’s equity. Learn more and decide if a reverse mortgage is right for you.”

Odysseas from Wallet Blog presents Should You Be Mad That Free Checking Accounts Are Becoming a Thing of the Past?, and says, “More consumers around the country are all of a sudden finding monthly fees on their previously free checking accounts. It’s understandable that you might at first be angry about having to shell out monthly payments for a service that used to free, but what if there was a good reason for the switch?”

Real Estate – You know you have a problem when your house has a wine cellar because you either bought too much house or drink too much wine.

Eric J. Nisall from DollarVersity presents Shopping For A Condo Is Different Than For A House, and says, “Not all homes are created equal. Condos need to be looked at a little differently than single family or town homes. Don’t use the same criteria for each.”

Md from Studenomics presents 100 Words on The Home Ownership Decision, and says, “Straight to the point post on deciding to buy a home.”

Other – Also know as that strange cocktail that your create with the leftovers from three bottles that you will never duplicate again despite the fact it tasted excellent.

Evan from My Journey to Millions presents Why Global Economic Negativity, Doom and Gloom Doesn’t Disturb Me, and says, “I travel quite a bit, for business and for pleasure, and as I travel across the country and globally, I am continuously amazed, but not surprised, at the amount of discussion (more like complaining) around the economic condition today. However, the facts I see around me every day tell me that things are really not that bad.

Bret from Hope to Prosper presents Failure and Greed of American CEOs, and says, “25 of the top 100 highest paid CEOs had higher salaries than their company paid in federal income taxes. I don’t know what is more ridiculous, that companies paid their CEOs so much or they paid so little in taxes.”

Donna Freedman from Surviving and Thriving presents Get rid of junk mail, both virtual and physical., and says, “A couple of clicks will reduce clutter — and waste.”

Mike from The Financial Blogger presents Do You Live The Moment?, and says, “How do you treat your finances?”

Boomer from Boomer & Echo presents What To Do With Your Paper Clutter?, and says, “Have a good system to deal with your paper clutter by filing your bills, statements and important notices and setting a regular date to deal with them.”

Clint from Accumulating Money presents How The US Credit Downgrade Is Affecting Spending, and says, “Every person, business and entity has a credit rating. When the United States saw a reduction in their current credit rating, it created ripples throughout the US all the way down the average household and the average consumer.”

Bryan from Pinch that Penny! presents Craigslist Arbitrage – The Folly of my Youth, and says, “I bought some comic books on Craigslist and then sold them back on Craigslist (albeit for less than I apparently could have).”

Money Thinker from Money Thinking presents 5 Reasons This Decade has been Financially Unstable, and says, “9/11 was one of several reasons that our country suffered financially in the last decade, and today we’re going to look at that event and 4 others”

Suba from Wealth Informatics presents Loyalty Cards : Providing rewards or threats?, and says, “Loyalty cards are something we sign up without even thinking for a minute. They do provide discounts, but do you know what other threats they pose?”

The $25 Challenge – Final Summary

Our $25 food challenge has come to a close.  The final spending numbers are as follows:

  • Margarine $4
  • 8 L of Milk $8
  • 1lb Coffee $1.98
  • Fruit (5 nectarines, 4 plums, 3 apples, 5 peaches) $5.82
  • Fresh Tomatoes (5) $1.27
  • TOTAL $21.07 (84% of budget)

So you can see we actually didn’t even hit the total budget during our 18 day experiment.  In total we spent $0.29 per day per person.  What surprised me about this challenge was how easy it was to pull off with a bit of planning and focusing in on what we had in the house to eat.  To be honest I think the fact we had two packages of veggies from my farmer which made this so easy (which included green onions x 2, radishes x 2, small bag fresh greens (spinach etc) x 4, parsley).  If you included the retail value of that food that would bring us up to $0.71 per person per day.  Our diet was actually fairly normal for the entire couple of weeks and we ate fruit and veggies fairly regularly.

Actually my wife like the idea of cleaning out the pantry and freezer so much that she wants use to do something similar at least twice a year going forward to prevent food clutter from building up.  By the way, I define food clutter as that stuff you buy to try something new and then forget about for two months before you use it again (like rice paper wraps).  So overall the challenge can’t have been that difficult if she wants to repeat it.

Yet the challenge was useful for me to realize a few new lessons on how we approach our food:

  1. Forget Name Brand – It’s all about what is on sale, not the name on the package (especially for generic items like pasta) .  If you follow that rule you can cut back a fair amount on some grocery bill.  When in doubt look for the cost per unit mass/volume on the shelf tag to find out what is the cheapest, when you hit a sale load up the pantry.
  2. Junk Food is a Budget killer – I don’t think I really understand how much a bag a chips is until you realize how many potatoes or apples you can get instead.  Cutting back on this will make a huge difference to your grocery bill and likely improve your health.
  3. Eat around what you have, not what you feel like – Most people know that dangers of impulse shopping what is interesting is we don’t consider how often we do impulse cooking which requires picking up something from the store.  I was guilty of doing this a fair amount, but now I realize if you plan your meals around what you have you will make less waste and throw out less leftovers.  Also you can then shop by the sale to restock your pantry, rather than paying full price for things that keep for a long time (can soup, oil, flour, etc).
  4. Plan Your Meals Weekly – This is likely the key to eating on the cheap and ties into #3 as well.  By planning what to eat in advance you can make themes for a week.  For example, I had some ham in the freezer so we planned chickpea ham salad, chef salad and carbonara for one week. Also you can plan to eat your leftovers.  This can be a huge amount of savings in money and time since you don’t have to think about what to eat.  You can walk in the door get your defrosted meat from the fridge and start cooking.
  5. Get Creative – Perhaps one of the more interesting dishes I made involved me looking at our pantry and trying to figure out what to do with a can of pork and beans and some pasta.  Thanks to Google I managed to dig out a recipe a template and then just adjusted it to what I had in the house.  It was surprisingly good to eat despite my concerns of trying it.

In the end, eating on the very cheap is entirely possible, especially for short periods of time.  The trick is to do an inventory of what you have and plan around that.  Also with a bit of work I think most people could cut their food bill in half just by shopping sales and eating what you have.  So would you try something similar?  If you have, what did you learn?

This post is now part of the Carnival of Personal Finance.

Can You Retire Early Stuck in the Middle?

I made the comment the other day in regards to the fact that every early retirement story I’ve come across has some element of luck.  The people in question either lucked on the stock market, did well on real estate or had their own business and got bought out.  Yet that got me thinking: can you do it with no luck at all and be stuck in the middle for income?  Is it even possible to retire under 50?

So let’s try out that theory, meet my crash test case of fictitious people called Bill and Jane.  They earn between them $71,000 a year (the 2007 median salary in Canada for a two income household with kids).  So let’s break up that pay by a 60/40 split of $42,600 for one and $28, 400 for the other.  You can pick out their careers and who makes more if you want, for me I’m just assuming they get in dead end jobs and never move from this salary during their entire working career.  In actually fact they may start lower and work up, but on an inflation adjusted basis I’m assuming they are a flat line all the way.  So after tax, CPP and EI and no other deductions they clear $33,161 and $25,762 respectively, or in total $58,923 (in SK).

They are a frugal couple so they only spend $24,000/year on expenses (but not the mortgage).  On top of  that is a mortgage payment on a $250,000 home (I’m assuming they buy within their means and stick to a condo or a smaller older house in a ok location, but not a great one).  Mortgage payment for a 25 year period at 5% average rate is $690.66 twice a month assuming they bought with 5% down when they turned 22 (combination of wedding gifts and saving).  I’m assume they don’t accelerate a single payment and pay off the mortgage at 47.  I’m also assuming they pick that $28,000 as their spending rate for retirement which includes some cash for travel and fun things since the mortgage will be gone when they leave work at 47.

I’m also going to assume that having a two kids eats up any spare money until they turn 28 when they start to get serious about early retirement.  After that point, after expenses they can save at most $18,347.16 per year, but wait, who’s looking after the kids?  Let’s take off another $12,000 a year for child care, but in reality you get a tax deduction for that so let’s assume after their tax return they pay $740/month net.  So that leaves only about $789/month for saving until the kids get older, so let’s assume that lasts for 10 years.

So Bill and Jane start saving but are smart and put the money in an RRSP and reinvest the tax refund.  So that boosts their savings to about $994/month while the kids are in care.  So at 5% for 10 years that leaves them with $154,350.  Then the kids leave care and they put the extra $740 a month into savings, but let’s assume outside the RRSP.  So in total they can save $1734/month for nine more years, leaving them with $477, 741 at 47.

Now the draw that down from 47 till 65 when they get OAS and CPP at their $28,000 a year and they only get 3.5% return now.  That leaves them with only $195, 577 at 65.  So assuming a 4% safe withdrawal rate they have about $7823 from their nest egg a year, plus their CPP and OAS they should be fine in full retirement.

So in conclusion it can be done, but you have to do just everything right.  Keep you costs way down and keep your shelter costs reasonable and it can happen.  If you want to spend more than that you will need luck or hard work to make more money.

This post is now part of the 243rd edition of the Carnival of Personal Finance.