Canadian Capitalist » Spending

Is Black Friday Worth the Hassle?

Canadian Capitalist — Mon, 29 Nov 2010 02:40:59 +0000

Perhaps, it’s just me but I just don’t understand the appeal that Black Friday seems to have for some Canadian shoppers. It totally makes sense for a Canadian on a visit to the US to get some Christmas shopping done but let’s list the steps involved for a Canadian resident driving across the border simply to score some Black Friday bargains:

1. Take Thursday or Friday or both days off.

2. Drive to the US border. Wait in line to clear US customs.

3. Spend money on gas, tolls (if any), lodging and meals.

4. Line up in the cold well before store opening to snag the best deals. Try and avoid any brawls that may break out.

5. Buy items on your list. Pay sales taxes (if applicable). If you are paying with a Canadian credit card, you’ll be charged a 2.5% fee on top of the applicable exchange rate.

6. Wait in line (again!) to pay taxes, duties (if applicable) at Canadian customs.

I hate shopping at Wal-Mart even on a regular weekend. For me, no TV is worth lining up for hours in the cold in front of a Wal-Mart.

Related Reading:

Is Black Friday Worth the Hassle? is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

Netflix Launches in Canada

Canadian Capitalist — Thu, 23 Sep 2010 03:34:33 +0000

Netflix announced today that it is offering unlimited movies and TV streamed over the internet into the homes of Canadians for $7.99 per month. As a consumer who is tired of paying ever increasing cable bills, I watched the announcement with some interest. Though Netflix is offering the first month free, the selection of movies and TV shows on offer at present is rather limited. Here’s a quick rundown of movies and TV shows that came back with “not available”: Toy Story, Shrek, Finding Nemo, Ratatouille, Alice in Wonderland, Avatar, The Hurt Locker, Coraline, Chuck and Big Bang Theory.

Even if Netflix’s selection were more extensive, we are still limited by Bell’s bandwidth cap of 25GB. Netflix says each hour of a movie or TV show will use up 1GB of bandwidth for standard TV and 2GB for HD. At that rate, a monthly bandwidth allowance of 25GB doesn’t go very far. One option would be to switch to an ISP like TekSavvy as many consumers frustrated with bandwidth shaping and throttling of the big telcos and cable companies have already done.

Now if only there was a way to watch a hockey game or the NFL or the Stanley Cup finals or the Super Bowl, we could be saying adieu to those cable bills pretty soon.

Related Reading:

Netflix Launches in Canada is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

One Reason to Obtain a US Dollar Credit Card

Canadian Capitalist — Mon, 09 Aug 2010 03:36:40 +0000

Frequent travelers to the US or those who incur regular expenses in US dollars might want to sign up for an US Dollar credit card. It might work out cheaper to convert Canadian dollars into US dollars using this gambit than paying a 2.5% premium that credit cards typically charge for currency conversions. Reader Andrew sent in this note on why a US Dollar credit card makes sense.

I do a fair amount of traveling in the US, and therefore follow closely the mechanisms by which my credit card converts exchange from US dollars to Canadian dollars. This exchange is typically done by Visa at what they say is a a 2.5 percent premium on the prevailing exchange rate “at the time of posting”.

Now, I first became intrigued with exactly what time point Visa would use to make the exchange back in 2007, when the Canadian dollar approached $1.10 (US).

I had the good fortune to be traveling in the States at that time, using my card several times each day. Interestingly, when I returned home to my credit card statement, my quoted exchange never even got close to $1.10, even when accounting for the 2.5 percent premium on exchange.

As the currency exchange rate had been highly volatile at that time, it occurred to me that if Visa could select the time of conversion retrospectively, they could potentially squeeze an extra 1 to 2 percent out of the exchange business at my expense.

However, when I examined the Cardholder Agreement at that time, it stated that the conversion would be made at the prevailing exchange rate at the time of posting to the account. This obligation seemed to limit the ability of the bank to ‘choose’ a moment of exchange.

I recently reexamined the latest cardholder agreement, and lo and behold, the wording on foreign transactions has changed!

“Foreign Currency Transactions:
… we will convert the charges into Canadian dollars no later than the date we post the transaction to your Visa Account at our exchange rate which is 2.5% over a benchmark rate set by Visa International…”

I read this new description in the cardholder agreement, as allowing the bank the flexibility, as long as it is same day, to choose the time of conversion in order to maximize exchange profits. They can exchange all US$ transactions at the day low point for the CA$, and use the day high point for CA$ transactions on US cards.

For anyone sitting on the fence about getting a US$ billed credit card, this may be enough to convince them to go for it!

Related Reading:

One Reason to Obtain a US Dollar Credit Card is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

Useful Used Car Pricing Resources

Canadian Capitalist — Tue, 13 Jul 2010 01:48:07 +0000

Son: Nice car Dad. How much did you pay for it?
Dad: Ten thousand dollars.
Son: I think that’s too much.
Dad: Really? How much do you think I should have paid?
Son: Four dollars.

There are only so many harsh Ottawa winters a car can take. A few months back, I took my 1992 Honda Accord to my mechanic who delivered the bad news: the car has roughly six months left before it will need significant repairs to keep it in running condition. So with a heavy heart, I turned in my old car to the Retire Your Ride program and went looking for a replacement. I wasn’t interested in getting a brand-new car — the initial depreciation hit is large and I live in a rather rough neighbourhood — young kids zipping around on bikes and if they can get away with it, climbing on cars. I started looking at private sales on Kijiji and Auto Trader but still turned to the trusty Canadian Red Book, which is available in most public libraries in the reference section, for guidance on pricing.

But there is an easier way. A website called VMR Canada provides an easy way to look up Canadian used car values for most makes, models and years. You can also refine the search by picking a trim, options such as leather seats and the number of clicks. I found the wholesale and retail values to be close to the Canadian Red Book for the various Honda Accords I looked at. Another useful pricing resource is the Black Book trade-in estimators available at many car manufacturer websites. Our 4-year old son obviously hadn’t checked out any of these sites, which probably explains why his estimate of car values is a bit on the low side.

Related Reading:

Useful Used Car Pricing Resources is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

Another Reason to love Costco

Canadian Capitalist — Thu, 24 Jun 2010 03:13:02 +0000

Costco’s low prices are one reason we are big fans of the warehouse store. Their generous return policy is another reason why Costco is the first stop for our purchases. Over the years Costco has tightened up their return policy somewhat — now, shoppers have just 90 days to return electronics goods such as televisions, computers and digital cameras but their return policy on other merchandise remains very generous.

Last year, I had purchased a pressure washer at Costco and ended up using it around the house less than a dozen times. Over the weekend, I found that the water inlet into the pressure washer was broken. The manufacturer offers a 1-year limited warranty but I did not keep the original receipt or register the product and in any case “limited” likely means a long list of exclusions buried in the fine print.

I thought it is worth a try to put the washer into the original packaging, take it to my local Costco, explain that it is broken and ask if they’ll provide me with a refund. I wasn’t very hopeful considering that (a) I did not have the receipt and (b) it was almost certainly more than a year since I purchased it. To my enormous surprise, Costco took the washer back and provided a full refund even though it turned out that it was purchased 15 months back.

It is a rare business that tries hard to provide customer satisfaction these days. You can find so many instances of businesses trying to hide behind the fine print on Ellen Roseman’s blog. But, generous return policies may not be just altruism on Costco’s part. After all, a satisfied customer is more likely to stay loyal and put in a good word for you. Being nice to customers is just good business.

Related Reading:

Another Reason to love Costco is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

CBC’s Canada’s Worst Cellphone Bill

Canadian Capitalist — Tue, 09 Mar 2010 14:31:40 +0000

A recent episode of Marketplace on CBC featured cellphone customers who claimed to have Canada’s worst cellphone bills (you can watch it here). Cellphone customers had racked up thousands of dollars in charges either in air time, texting or, what appears to be fairly common, roaming charges while traveling abroad.

The typical phone horror story also involved a dispute with the phone company: the customer claims she was misinformed in the phone store and the phone company points to the contract, which says something else. The customer is in tears, the phone company sticks to its guns and it makes for great TV. Especially, when Wendy Mesley, the show’s host adds to the debate by saying those rapacious phone companies are charging 15 cents for a text that costs them a third of a cent to provide.

I’ve had my share of complaints with service providers and while I found myself sympathizing with most of the customers, it was hard to say the phone company was entirely at fault (except the lady who was incorrectly charged airtime and the phone company gave her the runaround). The hidden charges may be buried deep in the fine print but it is there and the client signed a contract agreeing to pay and the phone company is within its rights to demand payment.

I was secretly glad that we’ve ditched our pricey monthly plans and gone the pre-paid route. Our annual cell phone bills with an el cheapo plan from Speak Out Wireless available through 7-Eleven costs us less than $50 per year not including the price of a phone. Granted, not everyone can be a light cellphone user but everyone can easily find ways to cut down on their monthly bill.

Related Reading:

CBC’s Canada’s Worst Cellphone Bill is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

This and That: Dog days of summer edition

Canadian Capitalist — Thu, 13 Aug 2009 21:14:51 +0000

I’ll be participating in a live discussion on investment topics on Globe Investor on Monday, August 17, 2009 at noon. I hope you can join in.

Investing is fairly simple — develop a good plan and stick to it. Many investors don’t even have a plan but even those that do have trouble with the “sticking to it” part. Dan Richards wrote in The Globe and Mail about the behavioural traps that keep investors from sticking to a plan. Michael James also noted that when stocks are down, investors fail to rebalance believing their plan might be too aggressive.
I don’t want to pick on The Star but its headline (Canadians paying through the ear for cellphones) is representative of a recent OECD report on cellphone prices in 30 countries. Dig deeper into the reports and you’ll find that Canada actually ranked 11th (out of 30 countries) in low-use, 3rd in “medium-use” and 12th in “high-use”.
Rob Carrick shows how to build a diversified portfolio with just three iShares ETFs.
Tim Cestnick listed the things that can help with winding down a loved one’s estate.
Thicken My Wallet says that financing a small business is a larger-scale version of personal money management and the lessons of one apply to the other.
Million Dollar Journey wrote about the Guaranteed Income Supplement (GIS) and its clawback. Personally, I’m hoping we won’t receive GIS!
Claymore is conducting the 2nd Annual Next Top Model Summer ETF Competition. Larry MacDonald has some tips on winning stock picking contests. Last year, I picked CLO, COW and GAS and finished somewhere near the bottom.
Kids will be back to school in a couple of weeks. Chaya Cooperberg wrote about how back to school shopping is stressing parents out.
Where Does All My Money Go? featured a guest post by Daniela Garritano on having a champagne wedding on a beer budget. Speaking of weddings, Realizing Retirement, a new financial blog, featured the first in a series of posts on planning an actual budget wedding.
Summer is also the time for vacations. Four Pillars says that to calculate the true cost of vacations, you have to net out the expenses of staying home.

With temperatures topping 30 degrees in Ottawa, summer seems to have finally arrived in Central Canada. Have a great weekend everyone!

Related Reading:

This and That: Dog days of summer edition is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

The Home Renovation Tax Credit (HRTC)

Canadian Capitalist — Mon, 09 Feb 2009 02:44:39 +0000

It could be argued that we are in an economic crisis because we spent too much, saved too little and binged on credit. It is ironical, therefore, that the biggest tax measure in Budget 2009 would be a tax credit that encourages Canadians to spend even more. Leaving aside the larger question of how putting extra money in our pockets for replacing a roof or furnace that we would be replacing anyway, calling it “stimulus spending” and financing it by going into deficit makes much economic sense, let’s look at the big questions people have about the new Home Renovation Tax Credit (HRTC):

How much are we talking about anyway?

The HRTC is a non-refundable tax credit that could provide up to $1,350 in tax relief. The 15% credit applies on all eligible spending exceeding $1,000 but not more than $10,000. For example, if you have $3,000 in eligible spending, you’ll qualify for a tax credit of ($3,000 – $1,000) x 15% = $300. Remember that the tax credit is family-based. If both you and your spouse are working, either of you (but not both) can claim the credit in your 2009 tax return.

I replaced our furnace in December, 2008. Would the spending qualify for the HRTC?

No. The HRTC is a temporary tax credit and eligible expenses should be incurred after January 27, 2009 and before February, 1, 2010. The budget document also says stipulates that the expenses should be under agreements entered into after January 27, 2009.

What qualifies as “eligible” spending?

Budget 2009 states that “renovations and alterations to a dwelling or the land on which it sits that are enduring in nature” qualify as eligible spending for the HRTC. The renovations could be done on a home, cottage or condominium. The budget document says the following qualify as eligible spending: Renovating a kitchen, basement or bathroom; installing new carpets or hardwood floors; building a, addition, deck, fence or retaining wall; a new furnace or water heater; painting the interior or exterior of a house; resurfacing a driveway; laying new sod; etc.

I’d like to replace our kitchen appliances. Does it qualify for the HRTC?

No. Purchase of appliances, furniture, electronics and tools does not qualify for the credit. Routine maintenance such as carpet cleaning, furnace tune-up, snow removal, lawn care and pool cleaning does not qualify.

While it makes sense take advantage of the credit for home improvements that you were thinking of making anyway, it may not make much sense to incur additional expenses just to get 15% back. Also, it is possible that the HRTC becomes too popular and contractors jack up their prices in light of heavy demand. So, you might want to get quotes for home improvement jobs now when most people don’t seem to be aware of a new temporary tax credit.

A further concern is that you need receipts to claim the tax credit. With many contractors working on a cash basis, it is possible that the tax credit would be reduced by a higher renovation bill. Still, this year you may want to keep every Home Depot and Rona receipt in a separate file so that claiming the credit becomes easier at tax time. The relevant portion of the budget that deals with the HRTC can be found here.

Related Reading:

The Home Renovation Tax Credit (HRTC) is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

Quick Tip: Get a Secured Line of Credit

Canadian Capitalist — Thu, 22 Jan 2009 16:25:00 +0000

With economic conditions worsening, the best thing to have is an emergency fund that is liquid and can be accessed easily. But the reality is that not everyone is diligent with their finances. For those who have a lot of equity built in their home but are cash-poor, it may make sense to obtain a secured line of credit while they are still employed. The line of credit should only be used in a strict emergency when cash is running low and obtaining one should not be used as a substitute for building a rainy day fund. Banks used to offer secured lines of credit at prime but these days prime plus 1% is typical. There may be fees involved in setting up a line of credit and discharge fees to close it. Note that tapping a secured line of credit in an emergency is not without risk — typically these loans are callable at any time.

Related Reading:

Quick Tip: Get a Secured Line of Credit is brought to you by Canadian Capitalist -- Helping you to invest & prosper.

Speak Out Wireless: Another Virgin Mobile Alternative

Canadian Capitalist — Wed, 06 Aug 2008 22:56:27 +0000

Yesterday’s post on Virgin Mobile’s recent service changes elicited a useful tip from Shane and Million Dollar Journey: Check out Speak Out Wireless, which is offered through 7-Eleven convenience stores, along with Petro-Canada Mobility as an alternative to Virgin Mobile. Speak Out is roughly the same as Petro-Canada Mobility — both piggy-back on the Rogers wireless network and even offer some of the same phone models but any top up at Speak Out lasts a mind-boggling 365 days, compared to 180 days at Petro-Canada.

It turns out that Speak Out is currently running a “Back to School” promotion — $75 off any phone with the purchase of $100 of air time. As readers GSP and Novice points out, depending on your usage, it probably does not make sense to pony up for another new phone as a $100 top up with Virgin Mobile still lasts one year. So, for now, I’ve decided to keep the nicer and newer phone with Virgin Mobile but upgrade the older cell phone that seems to be on its last legs and decided on Speak Out for its long expiry period.

There are two minor drawbacks with Speak Out to be aware of: (1) Top ups can only be purchased at 7-Eleven stores and there aren’t many in the Ottawa area. (2) Compared to a flat 20¢ per minute with Petro-Canada, Speak Out’s rates range from 20¢ to 25¢. Depending on your usage, there may not be much difference between Petro-Canada and Speak Out and either could be a very good choice. Lots of information and feedback can be found in the forums on the Unofficial Speak Out Wireless webpage.

If you tend to call long distance via your cell phone, here’s a tip from reader Brad: get a travel card from Yak, which charges 8.5¢ for long distance within Canada via a toll-free number and 3.5¢ for calls through a local access number. Yak also offers a yakCell service, which allows you to call long-distance through a local access number without having to enter a PIN number.

Related Reading:

Speak Out Wireless: Another Virgin Mobile Alternative is brought to you by Canadian Capitalist -- Helping you to invest & prosper.