Category Archives: Misc

What’s the Point of a Plan?

There is an old saying “Man Plans, God Laughs” which seems particularly true for me this week.  I had plans to do certain things and the entire week seemed to blow up with other things instead.  Not all the other things were bad, like my 185 piece Bone Kickstarter order of minis arriving about three weeks earlier than I thought, but these events rather just tossed my original plans out the window.

This got me thinking of retirement plans and how that issue also happened repeatedly to me.  I would make a saving plan and do my calculations and then things would shift dramatically by no fault of my own and then my plans won’t be useful in a year or two.  So why then do we plan out our money and time in retirement when in fact we know the plans will never actually work out that way?

In my case, I would say the point of the plan was the thought exercise.  It was asking ‘what if‘ and then trying to determine the answer.  The answer might never come to pass but the exercise is still useful as it provides you a bit more understanding about the risks, issues and problems you might encounter in retirement.

In short, you learn about things that might never come to pass but it does provide you input on the magnitude of potential outcomes.  So if you enter an extended period of low investment returns you know what that might do to your investments and you can think about how that would make you feel and how you would react to the issue.  This provides a degree of confidence to you on how to deal with the issue and by extension other issues that do come up.

Or you can plan out various ways to fill your time and realize that you feel busy enough with only using half of those items.  So you still don’t have time do do all the hobbies that you want even in retirement.  You might feel a bit guilty about ignoring things but it doesn’t stop you from changing your hobbies down the road when a current hobby ceases to be interesting.  The plan isn’t useless just because it didn’t work out the way you thought.

Perhaps the biggest shift in a plan that ever occurred to me was moving up my retirement date.  I started this blog back in 2006 fully thinking that retiring at 45 would be a difficult goal.  It was more a dream than reality when I started.  Then I did better than I thought on investments and paying off debt so I slowly moved backed my retirement date by a year or two.  Then finally when my wife mentioned she wanted to keep working for a few more years that pushed me over to revise my target down to 40 (and even then I left six months before that).

Was my retirement a good plan?  It was in theory and only time will tell if it will work out in the real world but so far things are working.  Of course, not as expected or projected but we expect that now don’t we?

So why do you plan even if you know it won’t work out?

Stop Blaming the Rich

Okay, are you sick of this never ending federal election campaign in Canada?  Goodness knows I am already.  Yet perhaps the single thing that is pissing me off the most during this campaign is the idea of ‘let’s blame the rich’ theme. Or really more actually I’m not terribly impressed that a few of the proposals out there are to roll back the latest TFSA limit increase since ‘only the rich can use them’.

I okay with general idea of fairness.  After all no one likes to be screwed over in life and it does make entirely sense to me to have progress tax brackets that increase as income goes up.  After all if I am earning more I can easily pay a bit more to help out those that don’t earn much.  I don’t consider that unfair, but rather practical.

Yet rolling back the TFSA limit increase because only the rich can use is a damn crappy reason.  Um, news flash people…those how have built business, got high paying jobs and actually save some money to get rich…the system wasn’t fair to begin with.

For example, RRSP contributions are based on last years income up to 18% (to a given maximum), so the reality is that is actually worse for lower income people.  Since the more you earn beyond perhaps $40,000 a year it gets easier to save that amount.  Meanwhile the TFSA limit is equally to everyone over 18.  Even when it means the lower income people can potentially save a MUCH higher percentage of their income as compared to a person making $100,000/year.  Case in point the $10,000 limit of $40,000 is 25% of their income, which is WAY higher than the RRSP percentage.  Yet for the $100,000 income person the $10,000 TFSA limit is only 10%.

Then when we get to investment gains those that save also get some extra breaks, capital gains are only taxed at half of your marginal tax rate and Canadian dividends also benefit from a significant tax break.  The dividends are such a good break that if you earn less than $44,000/year they actually end up being tax free.

The system is built around encouraging people to save and invest, so those that do are rewarded by paying less tax.  Fairly simple right?  Yet it amazes me that people want to blame the rich.  Did you ever consider the fact the ‘rich’ may have started off just like you but rather than spend their money they decided to save it instead.  They learned a bit about investing and made ever more money.  It was often a hard long road, but after a number of years and the miracle of compound interest they are doing well.

Compared to those at my age and savings I’m likely considered rich or top 20% at least.  Yet the money just didn’t appear in my accounts in a puff of smoke…I got a degree and then a good job.  Then I saved for a decade straight likely spending less money than you did last year…that is why I have a net worth of over $750,000.  So go ahead and take away the TFSA limit increase for all I care…just stop blaming me for your problems and perhaps start to save something yourself.

Putting On a Garage Sale

Well after many years of ignoring the idea my wife finally convinced me to try running a garage sale.  Normally I’ve won this argument over the years with the simple statement of: we don’t have enough stuff to sell.  Yet because of my recent purging activities I dug my own hole on this one and finally agreed to put on a garage sale.  I really just wanted to sell a handful of things and toss the rest but my wife have having issues with tossing that much stuff so I gave in only after extracting the promise we would donate as much as possible for the leftovers but after that any left would be tossed.

Overall it was equal to a three solid days work of preparation the week before for the sale that ran over Friday evening and Saturday during the day.    It took that long just to set up the garage space, sort and price everything and put it all out on display.  We kept our pricing generally low in order to encourage sales (we were doing this more to get rid of things than make money) and we kept everything at easy to calculate amounts like $0.25, $0.50 and $1. That also included time to put together an ad and post it several different websites (for free of course).  Then I picked up some change from the bank for $220 in fives and change (which by the way was a bit too much, but you do use a lot more change than you would guess).

Our hours for the sale were Friday 3 to 7pm and were supposed to be 10 am to 6pm on Saturday.  Yet in reality we never made it that long.  We started to realize that the customer traffic on Saturday was so low that it won’t be worth keeping the sale open the full hours.  So about 2:30pm after less than 10 customers we started to clean up the garage and toss a few items in the trash and then put together a pile of stuff that we would try to donate.  Only three higher priced items were left that we will give a try to selling online.

In terms of sales honestly it wasn’t a good use of time.  We sold $253.50 in the first day and just $25.25 in the second for a total of $278.75.  A good lot of the sales came from a handful of items the two biggest ones went for $40 each and included an outdoor play structure and a crib.  Those two items sold in the first 30 minutes of the sale and I wasn’t even remotely surprised since I was answering email questions about those via our ads prior to the sale even starting.  So I learned that apparently having a few higher demand items is really helpful to drive some traffic into your sale.

Yet in terms of stuff, I have to admit that for getting rid of things it is a fairly effective way to do it especially if you want to see the get reused rather than just tossed into the trash. I would estimate at least 2/3 of our stuff sold and lots of the big things.  I understand my wife’s point of view on this one as the boys did a major purge on their toys so we have over half the items in the sale were just toys.  Those did very well for sales, one boy’s mom  bought a huge amount of our old Thomas trains.  I was also amazed about some of the things that sold.  I put out two old garage cans that I had from our previous house that I don’t use and both sold even when every person in this city has access to a large bid for their trash provided by the city.

To provide motivation for all this work we decide in advance that all the cash from the sale was going to be spending cash for our vacation and because the boys were helping haul stuff up from the basement for the sale and sort all their toys we promised them some of that money to spend during our vacation.

In the end, I’m glad it is over and I personally never want to do it again, yet my wife pointed out that will be at least one more sale…when she closes down her daycare for good when she retires we will have a huge sale prior to downsizing the house.  I suppose I could put up with that if it means she joins me in early retirement.

So do you ever put on a garage sale?  Are they worth the effort?  Or do you just shop at them?