Archive for April, 2005

Book Review: Stop Working

April 30, 2005

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I finally managed to borrow the book, Stop Working: Here’s How You Can!, from our local public library. It is self-published by Derek Foster, who retired at the ripe old age of 34 and promises to teach how anyone can do it.

The book reveals that Derek was able to retire early by saving regularly and diligently, and investing the proceeds in the stock market. Most of the book deals with his investment style, which he calls “Show me the money!” investing.

The author’s preferred investment vehicles are Canadian financials (banks, insurance, mutual funds), blue-chip American multi-national corporations, REITs and income trusts (power, pipeline and energy). I think the author’s strategy of investing in companies with a long history of dividend increases and his view of stocks as an investment in future cash flows are the secrets to his success.

There are no new “secrets to success” in the book (which is a good thing). I would definitely recommend the book to anyone who is just starting to invest in the market.

Ameritrade Canada

April 29, 2005

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Update: You cannot open a discount broker account with Ameritrade Canada, as it has been acquired by TD Waterhouse (Read review here).

Canadians investing in US equities should seriously consider Ameritrade for their brokerage account. Ameritrade offers one of the lowest brokerage commissions:

RBC Action Direct: Min. $29.95
TD Waterhouse: Min. $29.00
ScotiaMcLeod: Min. $25.95
BMO InvestorLine: Min. $25.00
CIBC Investor’s Edge: Min. $25
E*Trade: Min. $26.99
Ameritrade: Flat $10.99

You would think that Ameritrade would be the most bare-bones discount brokerage because of its low price. Not true. It offers quick execution, a simple and intuitive web page and also offers free stock reports from Standard & Poor’s.

I am posting this entry because Ameritrade once again exceeded my expectations in a recent transaction. I wanted to withdraw some cash left over in my account, so I logged on and requested a cheque. I was hoping to get the cheque within 2 weeks, but was surprised to see it in my mailbox a mere three days after my request. Now, that was fast!

Full Disclosure: Other than having a brokerage account, I have no financial interest in Ameritrade. In fact, I own shares in its competitors: TD Bank and E*Trade.

Random Thoughts

April 27, 2005

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Every week, I go through a whole lot of reading material to keep myself informed about what is happening in the markets and things that affect me from a personal finance perspective. Here are some of the stories I’ve been following lately:

  1. TD Bank doesn’t think there is any housing bubble in Canada. I happen to agree.
  2. Canadians, please remember to file your taxes on or before May 2, 2005. Tax software like QuickTax or TaxWiz gets the job done quickly and painlessly.
  3. Check out Forbes Magazine for Ten Laws of the Modern World. I wish Prime Minister Paul Martin read up on The Laffer Curve before deferring recent tax cuts to large corporations (Instead, he was most likely brushing up on his Machiavelli).
  4. Oil slipped more than 4.5% yesterday to under $52 (and is trading below $50 today), mere weeks after Goldman Sachs and CIBC predicted of $100 oil (The CIBC report is available here). Au contraire, says this report, it will trade between $26-$30. Predictions are a tough business to be in.
  5. I finally got around to organizing all the blogs I read daily.
  6. Exactly 100 years ago, Albert Einstein published five papers that literally ushered in the modern age. Einstein is quoted as saying that compound interest is the greatest mathematical discovery of all time. Save some money, invest it today and get compound interest working for you.