Life Is What You Make It

Would you rather lay on a beach in a tropical location, or eat a burger at a fast food place? How about watch a movie on your own brand new big screen TV or have a few beers at the local pub? I'm pretty sure everyone would want the trip and the TV, right?

Well, life is all about choices that we make everyday. Some people choose to smoke because they love smelling like an ashtray, coughing up phlegm when they laugh, and enjoy lowering their life expectancy. Did you notice I never mentioned anything about the costs of smoking? People who choose to smoke make their own, personal choice to pay money for something that they enjoy. It's their own right as a human being in a free society to do whatever legally makes them happy.

I choose not to smoke due to the health and financial implications. By choosing not to smoke, I make a conscious decision to not spend $15 a day on a package of cigarettes. It doesn't take a rocket surgeon to see how fast $15 a day adds up to $5475 a year. That's a lot of money that could be spent on a nice trip or a very nice TV.



Right now I work beside a McDonalds and almost every day my co-workers grab fast food for lunch. They ask me why I never live a little and eat fast food like they do. I tell them I'd rather take my wife out for dinner each week then spend it eating grease with my co-workers. They just laugh and call me cheap, then complain the week after payday that they are broke and have no money. If eating fast food is living a little then man, I must be missing out!



It's the little things that we pay for each week, like a coffee or fast food, that will not add any real benefit to our lives but can add up to something more meaningful over time. Let's say you eat out for lunch each work day:


$10 a day x 5 days a week= $50 a week

You could go out for decent dinner each week for that amount of money or you could save that money:


$50 a week x 4 weeks= $200 a month


With $200 you could buy yourself some nice clothes or get tickets to a concert but you could always save it for something even better:

$200 a month x 12 months= $2400 a year

With $2400 a year you could go on a trip or save for two years and go on a nice trip somewhere warm. Imagine if you have kids how much of their education would be paid for:


$2400 a year x 18 years= $43,200 not including interest or compounding growth.

That sure is a lot of money to have instead of eating a burger or soup and sandwich everyday. I personally choose to look past small treats each day or week and look at a bigger, more rewarding experience down the road. If spending $2.00 on a coffee is what brings you joy then knock yourself out. If spending $6.00 on a beer and smiling at a pretty waitress makes you happy then by all means, enjoy it! If ordering pizza for your family every Friday is your favourite thing then all the power to you. If cutting out all the junk spending allows you to take your kids to Disneyland then hey, good for you!


By becoming more conscious of your spending habits, and focusing on bigger financial goals, then any reward is within your reach.

The Loonie Bin: Christmas Edition

I really struggled to come up with right post for Christmas. I could have wrote, "The top ten ways to save money at Christmas" or "Get ready for boxing day sales", but it just didn't seem right. I worry sometimes that the true meaning of Christmas will be forever lost.

Society tells us that when December rolls around, we have to fight through the masses at shopping malls and buy presents for our loved ones. While you're out looking for the latest fad like Tickle Me Elmo or Leapster 2, there are people in this world who are searching for scraps of food to feed their family. While we sit down to a giant turkey feast, others sit down to mourn the death of a loved one whose life ended needlessly. I personally believe there are enough resources to give every human being on this planet the basic needs they require to live a long and healthy life. Somewhere along road we have lost our way as a species, and mankind has become corrupt with greed. How can a few households in this world have an abundance of wealth that could never be spent in a hundred lifetimes yet every day, thousands of people die because they have nothing to eat.

I found a video on YouTube from an old Charlie Chaplin movie called The Great Dictator which is a satire on Nazism and Adolph Hitler. It was edited with new scenes and music and the speech by Charlie sums up everything I'm trying to write here. I can't help but feel moved every time I watch it and I want to share it with everyone I care about. Please watch the video and share it with everyone if you felt touched by it.

Does all this sound hypocritical coming from a man writing a blog about his journey to financial freedom? Maybe, but I have an overwhelming desire to not be forced to work almost every day of my life. I need shelter, so I applied for a mortgage to pay an outrageous amount of money for a house in a city that has access to incredible amounts of land and they even have the gull to sell me back the topsoil they scraped off of it. I need to eat so I make money to buy mass produced, chemically treated food and have to pay even more money to eat naturally grown food. I work to make money to buy clothing and some choose to pay insane amounts of money for a certain label on them, and so that others acknowledge that label which means absolutely nothing except for status. It is my dream to break free from this rat trap and to share my knowledge of how to do it with anyone who cares to listen.

This Christmas, spend more time with you family instead of wasting large amounts of money on junk that will just be broken or outdated in a year or two. Instead of feeding the face-less corporations, pay off your debt and free yourself from the invisible bondage that debt creates. Teach others to be efficient with their money instead of blowing it on designer labels or expensive vehicles. Show them that they will be loved no matter what they own and that status means nothing when you are happy and are loved.

I want to thank all my readers and followers for all of your support this year. Have a very Merry Christmas!

Cutting Back On TV

We just finished a one year, new home package with Shaw that gave us almost every channel, hi-speed internet, a brand new HD PVR, new modem/wireless router and home phone for roughly $88 a month. It was a fantastic deal which saved us around $80 a month.

Now that the offer expired my wife and I sat down and decided how much we really wanted to spend on this kind of entertainment. Spending over $2000 a year on TV, phone and internet seemed a little excessive to me. Having a home phone that costs us less than $30 a month is a must. After growing up in a small town and using dial-up, hi-speed internet is also a must and anyone who has used dial-up will agree with me. That leaves TV as the only service we can really change.

When I was a child, TV was the ultimate form of entertainment. I remember watching some amazing TV shows that helped shape my sense of humor and will be forever engrained in my memory. As I grew older I judged all the new television programs based on my memory of past shows and came to the conclusion that TV programming is going downhill. Just watch an episode of Jersey Shore and you'll see what I mean. That being said, as I watch episodes of my favorite shows from the past, it seems like I might have given them too much credit. Watching an episode of "Dukes of Hazard" or "A-Team" in my thirties makes me laugh at how corny those shows really were. I've come to the conclusion that television has been headed down a slippery slope a lot longer than I thought.

We decided to limit the amount of channels to keep the costs to a minimum and to allocate the funds to perhaps a holiday fund instead. By cutting our services from $168 to the bare package of $100, we are going to save $68 each month. Over the course of a year, our savings will add up to $816 which is a huge chunk of a nice vacation somewhere warm. By limiting the channels we watch, we can also spend more time on other hobbies and perhaps more updates on a certain blog.

With more and more TV programs available online for free, it makes perfect sense to watch them there, rather than pay for it through a cable bill. Some may not know it, but GlobalTV.com and CTV.ca are excellent sources to watch some of your favourite TV shows for FREE. So now instead of planning which TV shows to watch this winter, we can spend more time planning our next holiday getaway.

Dividend Income for November

Well it's been a very exciting month as a dividend investor with so many new dividend increases that I never had time to write about my dividend income for November. After tallying up exactly how much was deposited into my trading account, I remembered that this month is one of my lowest paying months.

My dividend income for the month of November was $95.16 in 2010. It has increased $7.92 a year later and is now $103.08 thanks to dividend increases. That's a growth of 8.32% which is an excellent step ahead of inflation, allowing my money to keep its buying power in the future. This is an excellent example of how an initial investment can keep growing with dividend increases alone.

This month I took some of my dividend money, along with new investment contributions and purchased an entirely new stock for my portfolio as well as increased the amount of my shares in another company I own. These investments will increase my November monthly income to $227 which will really help balance my monthly income, but I'm not too worried about living month to month when I retire. Have a good weekend everyone and here's to many, many more dividend increases!

Fortis Dividend Increase

ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwire - Dec. 13, 2011) - The Board of Directors of Fortis Inc. (the "Corporation") (TSX:FTS) has declared a common share dividend of $0.30 per share on the issued and outstanding fully paid Common Shares of the Corporation, payable on March 1, 2012 to the Common Shareholders of Record at the close of business on February 15, 2012.

The 3.4 per cent increase in the quarterly common share dividend to $0.30 from $0.29 extends the Corporation's record of annual common share dividend payment increases to 39 consecutive years, the longest record of any public corporation in Canada.

While I was breaking my back earning a living, I checked my smart phone at coffee to find out that Fortis increased its dividend by 3.4% today. It's my third raise this month and it's been 4 years since I've received a raise at my day job. Can you see why I'm so passionate about dividend investing?

My initial yield on Fortis was 4.05% and today my yield on the same investment is 4.34%. Slowly but surely my yield is increasing every year with each consecutive dividend increase. Here's a look at Fortis Inc dividend growth history, courtesy of my friend Think Dividends:

Do you own shares in Fortis?

The Big 5: RBC

The Merchants Bank of Halifax was founded in 1867 in Halifax, Nova Scotia. Its name was later changed to a "more comprehensive" The Royal Bank of Canada in 1901. RBC was Canada's largest bank by market cap for many years until TD stole the title this year.

Here is RBC at a glance as of December 13, 2011:

Symbol on TSX          RY
Current Close             $48.57
52 Week High            $61.53
52 Week Low            $43.30
EPS                             3.22
Annual Dividend         $2.16
Current Yield              4.44%

After calculating RBC's dividend payout ratio to be 67%, one might be worried about future dividend payouts. I think RBC will recover eventually seeing as the ratio was over 70% when I started writing the big 5 series. The following chart represents RBC's dividend growth from 2000 and into 2012.

The Big 5: CIBC

In 1961, the Canadian Imperial Bank of Commerce was the product of a merger between the Canadian Bank of Commerce (1867) and the Imperial Bank of Canada (1875). At that time, CIBC had the most branches and most resources than any other bank in Canada.

Here is CIBC at a glance as of Dec 10, 2011:

Symbol on TSX     CM
Current Close        $71.92
52 week High        $85.56
52 week Low        $67.32
EPS                       7.33
Annual Dividend    $3.60
Current Yield         5.00%


CIBC has never missed a regular dividend payment since the first payment in 1868. The dividend payout ratio is a very conservative 49% which means the dividend will be easily maintained. The following chart represents CIBC's dividend from 2000 and its current amount going into 2012.

Happy New Year From Bell

From BCE.ca:


MONTRÉAL, December 8, 2011 – BCE Inc. (TSX, NYSE: BCE) today announced a 5% increase in its annual common share dividend from $2.07 to $2.17 per share for 2012, and plans for the use of its year-end 2011 surplus cash balance that include a Normal Course Issuer Bid (NCIB) program for up to $250 million and a $750 million voluntary prepayment in December 2011 to Bell Canada's defined benefit pension plan to reduce its future pension obligation. 

Just when I thought December couldn't get any better! With a second dividend increase to my portfolio this month, I couldn't be happier. My original purchase price for BCE was $27.84 with a yield of 6.5%. After the 5% dividend increase along with a few others in between, my original investment is now paying me 7.8%.

A lot of my friends and co-workers don't understand why I get so excited every time there is a dividend increase within my portfolio. The way I see it, each increase brings me one step closer to an early retirement so why wouldn't I be happy about it! The only downfall from all this is that I never purchased more of BCE while the price was right. I have enrolled in a drip for BCE and plan to make a new contribution to my TFSA in the new year and use that money to grab some more shares when the price is right.

Do you own shares in BCE?

Merry Christmas From Enbridge

"(Marketwire - Dec. 7, 2011) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) today announced that its Board of Directors has declared a quarterly dividend of $0.2825 per common share, payable on March 1, 2012 to shareholders of record on February 15, 2012. The dividend reflects a 15% increase from the prior quarterly rate. Enbridge also announced its 2012 guidance for adjusted earnings of $1.58 to $1.74 per share."

Well I received my Christmas present early this year. It seems like only yesterday I took a leap of faith... along with our 5 figure emergency fund and made my first purchase on the stock market. Even though the stock decreased 4% right after my initial purchase and my wife was about to kill me, I kept my cool because I knew this was a solid investment over the long term. I'd like to thank my brother for telling me about this wonderful company and in the future I look forward to increasing my holdings for the long haul.

I initially purchased my shares at $48.53 and my initial yield was 3.5%. A few years later with multiple dividend increases and amazing capital gains, my yield on my very first stock pick is now 4.65%. Making almost 5% a year on just one investment is huge, especially when the bank is paying me .25% in interest for my savings.

Do you own shares in Enbridge?

The Big 5: Scotiabank

The Bank of Nova Scotia was established in Halifax N.S in 1832. Scotiabank has deemed itself "Canada's International Bank" and with good reason. They have branches in more than 50 countries throughout the world and was the first Canadian bank to establish a branch outside the United States and United Kingdom. By expanding its international operations when the other Big 5 were trying to merge with each other, Scotiabank has catapulted itself to being the third largest bank in Canada by market capitalization.

 Here is a quick rundown of Scotiabank as of Dec 4, 2011:

Symbol on TSX-      BNS
Current Close-         $48.99
52 week High-         $61.28
52 week Low-         $48.02
EPS-                        $4.55
Anual Dividend         $2.08
Current Yield            4.24%


Scotiabank has continued to pay its dividend every year since its inception in 1833. With a dividend payout ratio of 46%, I'm sure Scotiabank will be able to continue the tradition for many years to come. Here's a look at Scotia's dividends since 2000. Keep in mind they had a stock split in 2004 and the dividend was adjusted accordingly.

The Big 5: BMO

The Bank of Montreal was established in 1817, making it the oldest bank in Canada. In 1925, BMO merged with the Molson bank, which was founded by the sons of brewery legend John Molson. With 182 years running, BMO Financial Group has the longest dividend payout record of any company in Canada.



Here's a quick rundown of BMO as of Nov 28, 2011:

Symbol on TSX- BMO
Current Close-    $56.74
52 Week High-   $63.94
52 Week Low-   $55.02
EPS-                  $5.02
Annual  Dividend- $2.80
Current Yield-     4.93%

BMO is the only bank out of the Big 5 to not increase their dividend in 2011 which is, to say the least, disappointing for a company with a market cap of $36 Billion. I've also calculated BMO's current dividend payout ratio to be 54% which is relatively low. The following chart represents BMO's dividend and how it's grown, relatively speaking, since 2000 and what the dividend is heading into 2012. That's quite the plateau BMO, you better pick up the slack!

The Big Five: TD Canada Trust

Seeing as how the five largest banks in Canada are getting totally hammered on the TSX, I thought it would be a great time to start a series of five on each bank. This ties in well with my new strategy of the "Dog of the Big 5" where I purchase shares in the most attractively priced Canadian bank each year. Almost everyone uses banks to keep their money safe and almost everyone pays banking fees or mortgages. Why not take back some of your hard earned money through dividends and become a shareholder. I think I'll start off with the bank that had the hardest fall from its 52 week high, TD Canada Trust.

The Bank of Toronto was founded back in 1855 and was later merged with the Dominion Bank in 1955 to form, you guessed it, The Toronto Dominion Bank. Then in 2000 The Toronto Dominion Bank acquired Canada Trust and merged to become TD Canada Trust. TD has recently become Canada's largest company by market capitalization at an amazing $65-billion. For those of you that don't know, market capitalization is the total market value of a company's outstanding shares.

Here is a quick summary of TD as of Nov 24, 2011:

Symbol TSX -         TD
Current close price- $68.70
52 Week High-        $86.82
52 Week Low-        $68.55
EPS-                       $5.83
Annual dividend-      $2.72
Current Yield-          3.96%

As for dividends, TD has never missed a dividend payment since 1857. It currently has a very conservative dividend payout ratio of 47%. TD has increased its dividend twice in 2011 by a total of 11.5% after a two year stalemate. The following chart represents TD's dividend and how it's grown since 2000 to its current amount going into 2012.

Trim Your Utility Bills This Winter

Winter is finally here in Edmonton. When I woke up this morning it was -28 °C and my furnace was working hard to keep up with my meager setting of 18°C. I never look forward to winter from a financial perspective because my utility bills skyrocket like no tomorrow. Instead of moving to BC, I stick to a strict regime of simple tasks and creative gadgets to help keep my winter utility bills to a minimum.

Baby, it's cold outside

Programmable thermostats are great for saving energy during winter and their even better when you actually install them. I've seen quite a few thermostats still in the package in friend's basements that haven't had time to install them. Also when shopping for a programmable thermostat make sure you invest in a quality product with the settings you desire. Stay away from wally-world specials that will only last a few years. Prepare to spend $75 or more for one that will last.

A common misconception is to set the heat down to 11° when no one is home and then have it cranked to 20° when there are people at home. That sudden increase of 9° puts a huge workload on your furnace and will use the same, if not more energy than keeping the setting at a constant temperature. For example, our thermostat is set to 16° at 11pm while we sleep. Then at 6 am it's set for 18° while we get ready for work and at 8 am it goes back down to 16°. When 4 pm rolls around the heat is back up to balmy 19° as the outside temperature plummets and we all settle in for a long winters nap. I personally wouldn't set the temperature difference more than 4° or else the energy savings is lost. When guests come over you can turn up the heat so you don't look like a total cheapskate. For the in-laws you can turn it down to keep visits to a minimum.

Don't be a cheapskate and change your furnace filter at least four times a year. To help me remember, I change them on the official start date of each season. I changed the furnace filter on September 21 and plan to change it again on December 21. You may also want to vacuum out your blower motor in September as well to keep it clean  and allowing it to run more efficiently.

"Turn down OFF the lights, baby."

I am like the light Nazi in my house. As soon as I leave the room the lights are off until needed again. A lot of people think it's no big deal to leave lights on for no reason and they are happy to have power bills over $100 and upwards of $200 during the winter months; not this cowboy. My wife never thought much about turning lights off when no one is in the room. Now that she pays for the power bill herself, she's all about saving power and keeping that bill to a minimum.

When it comes to Christmas lights, LEDs are the way to go! Every year they become cheaper and cheaper and now they are very reasonably priced so I bought enough to replace our old, faded set. To be even more efficient, we purchased a programmable switch to turn the lights on for 2 hours, from 7 to 9pm each night. Not only does it save power if we forget to turn them off, it's added security for when we are not home. Criminals look for outside timers, but by having a programmable switch it gives the illusion that we might be home.

Garages are for vehicles, not junk!

If you're lucky to have a garage, don't keep it full of junk during the winter months. Make room for your vehicle(s) and save yourself from having to plug them in. My attached, insulated garage is not heated and even on nights when it's -35°C it's only -1°c inside. It makes for a pleasant morning drive to work in a heated vehicle and not having to scrap the windows. You may also want to adjust your garage door opener after a few weeks of cold weather. I noticed some gaps where I see light coming in from outside so I adjusted the amount it closes and the gaps were gone allowing more heat to stay in my garage.

If you don't have a garage and are forced to plug your vehicle in, I highly suggest you buy a timer for your extension cord. A lot of people keep their vehicle block heater plugged in over night, when really it only needs to be on for two hours prior to when you want to start your engine. A block heater is a purely resistive load, which means it's using power constantly while being plugged in. By using an outdoor timer on your extension cord, it only uses power for that two hour window which means you save a ton of money on your next power bill.

These are just a few ways you can help trim your utility bills this winter without looking like a cheapskate. The more money you save now, means even more money saved down the road from compounded growth. I'll have more energy savings tips later on after Christmas. I tend to keep the real cheap looking ones like poly on your windows and wearing sweaters and extra blankets for when you won't have guests over for Christmas parties and when the real cold weather hits. Stay Frosty, Everyone!

Regurgitated Information

I'm amazed at the amount of financial blogs out there these days. There must be dozens and dozens millions upon millions of them in all different languages, symbols and formats. One thing I've noticed is the insane amount of regurgitated information that keeps resurfacing day in and day out. If I see one more "Top ten ways to save more money" post I'm going to lose it! There's only so many ways to squeeze money to make it last, that after a while you go from living life to scrounging the streets looking for lost change.

So instead of spitting out boring, common sense infused jargon, I'm going to give you some new and exciting ways to save money and increase your cash flow.

Collect Empty Bottles 

Old world flavor meets new age environmentalism in the exciting event of collecting bottles. Normally reserved for the uber thrifty and vagabonds, you too can participate in this low demand, high reward venture. One empty bottle is worth .10 cents in Alberta. If you would collect a mere 100,000 empty bottles you would walk away with a cool $10,000 dollars in cold hard cash, tax free of course. Already have a full time job or are just too lazy? Why not have your kids do it for you! Nothing gets kids more motivated then competing for their parents love, so why not use it to your advantage. Not only is collecting bottles good for the environment, you are also taking jobs away from thousands of bums, forcing them to find permanent employment and finally contributing to society.

Cut Your Own Hair

Tired of being left out of conversations at work? Why not save money AND be the talk of the office by cutting your own hair. No need to pay a trained professional excess money to for such a meager task. All you need is a set of clippers and your imagination; the possibilities are endless! Not coordinated enough to do it yourself? Why not ask your wife to help out. You can cut her hair as well and save even more money! As the clippings hit the floor, just imagine your new found popularity and how excited your co-workers will be to see you during your next presentation. I smell a promotion!

Steal Borrow Your Neighbors Wi-Fi

Tired of paying outrageous internet bills? Why not create an internet connection out of thin air! Yes thanks to modern technology, the internet is whizzing past your face, and possibly causing tumors, at the speed of light! All you need is a wire-less network card and a questionable conscience and you too can share in the fun of free internet. Don't worry, your neighbor has plenty of bandwidth to go around, they won't miss it one bit. If your neighbor has put up a password protected connection, try using the password "admin". Bingo, we have a winner! 

We here at The Loonie Bin strive to bring quality instead of quantity to our readers. We hope you enjoyed these new and exciting ways to save money and encourage you to tell us what you would like to see more of in terms of quality posts. In no way shape or form has the author of this post been watching Monty Python while writing on his blog.

Book Review: The Strategic Dividend Investor

I just finished reading a great book from author Daniel Peris called The Strategic Dividend Investor. Peris is a leading portfolio manager who works for Federated Investors which is located in Pittsburgh. I've read a few dividend investment books over the years and Strategic Dividend
Investor has bumped its way to the top.

"Trader Nation"

One of the greater points Peris makes in his book is about Trader Nation. He explains that more and more people are making money by taking advantage of near-term stock price movements. Instead of investing in the stock market, more and more people are "playing" the stock market like a game at a casino. Yes sometimes you win and some win big, but most of the time you lose.

Peris also explains the difference between investing in the stock market and investing in companies through the stock market. The stock market is full of volatility and is constantly changing on the whim of speculation. Just because a share price drops 5% in a day or week doesn't mean an established company is affected by it. Investors need to step back and realize that the quality businesses we invest in our not anywhere near as volatile as the stock market itself.


"The Strategic Dividend Investor outlines the key issues you need to address in order to create a solid dividend portfolio, including how to:

• View the stock market as a business venture rather than as a platform for speculation.
• Strike the right balance between current yield and dividend growth.
• Learn to assess the ability and inclination of a company to pay and increase its dividend over time."

I could post excerpts from this book all day but I highly recommend reading The Strategic Dividend Investor for yourself. It's a light read compared to some text book written investment books and even hardened dividend investor Tom Connolly recommends this book too.

Road to Retirement Update

Since August my wife has been working like a champ at paying down her student loans. She paid $3000 towards her student loan and only has $13000 left until her dreaded loan is paid off. In the last 3 years she has paid over $32000 and she can finally see the light. I am very proud of her accomplishment and she is amazed at the amount of money we have saved in interest. I know a lot of people only make minimum payments and choose to be oblivious to the amount of interest they are paying. Our philosophy is to get rid of it now, and enjoy the savings down the road.

On another note I have made a lump sum payment of $3000 towards our beast of a mortgage. By making that lump sum payment we save $.60 a day in interest. Laugh all you want but that's $18 a month or $216 a year that the bloody bank doesn't get! I also found out my bank allows lump sum payments right at the teller so no more annoying appointments. If I can keep up the lump sum payments I can save over $100,000 in interest and decades off my mortgage.

Once the student loan is wiped out we can focus both barrels at our Mortgage to get it paid down to a respectable level before the rates increase and we are reduced to one income when operation "stay at home dad" takes effect. We will see how things pan out because life never goes according to your plan.


Do you make lump sum payments or accelerated payments on your mortgage?

You Can't Enjoy Wealth With Poor Health

One important fact that is often overlooked with most financial blogs is your health. I'm a little biased towards posting about dividend investing because I find it so fascinating, but what's the point of attaining wealth over time if you're not going to be around long enough to enjoy it! So from now on I'm going to include more postings about general health, nutrition, fitness and how to incorporate them into financially fit lifestyle.

Finding Deals Before Everyone Else

Saturday is a big event for me. While most people are still snuggled in their warm bed, I'm out shopping for groceries with list in hand of all the great deals I found the night before. I plan out what our meals are according to what's on sale and stock up of non-perishable items or frozen items when it's a super great bargain. The hardest part is only buying healthy and nutritious items while avoiding the empty calories and junk food which is everywhere you turn. There are many times my list is super short with just fruit and vegetables because everything else was either processed or junk food. By avoiding the chips, cookies and cardboard not only do we save money, but we fortify our health and increase our lifespan.

Don't get me wrong; eating twigs and moss and living till I'm 110 would be slow and painful death for me. I mean who doesn't like Oreos? The only problem is that they are made with hydrogenated oils which are super bad for your heart. So when I walk pass my favorite cookie of all time, I think about all the trans fats and keep on walking. I try my hardest to avoid anything that comes in a box or is infused with sugar, but I can't help it when the odd bag of potato chips just falls into the cart as I walk by; at least that's what I tell my wife!

Making A Conscience Effort

I know it can be hard to eat healthy when there are so many unhealthy choices around every corner. I could also sit here all day preaching about eating healthy while I myself am nibbling on leftover Halloween candy, but instead I'd like to show you what I do personally that make healthy eating a little easier.

While I'm grocery shopping or looking for something to eat, I personally think of my body as an expensive car. Now if I spent $250 000 on a car, I definitely would  not be filling it up with el cheapo regular gas. I would be putting in premium fuel to make it run more efficiently and prolong the life of the engine. So if you only have one body in this life, why would you treat it any differently than a prized sports car?

It's hard to always make healthy choices in your life, but by conditioning your mind to make it a simple process of what goes in your gas tank, you can relate better to what healthy food does for your "engine" rather than filling it up with empty calories or "low octane" fuel. This thought process works really well for myself, but everyone is different. The key is to find out what works for you and to stick with it. Why not think about the government taking all of your money instead of you living long enough to enjoy retirement. That also works good too!

To my dozens of readers: What tricks or thought process do you use to promote healthy eating?

Dividend Income For October

Well October has come and gone already so now it's time for the monthly dividend income update. My dividend income for the month of October is $336. As a comparison, my dividend income for Oct 2010 was $299. That means my dividend income increased 12.3% just from dividend increases alone. Take that inflation!


Just when things seemed to be returning to normal in world markets, they sure took a dive in a hurry. One of the best things about having dividend paying stock in my portfolio is that they recover so quickly due to the increased yield. Why wouldn't investors want to buy more stock when it's value priced and it gives a better return on your long term investment; it just makes sense.

I'm living proof that anyone can learn how to make their money work for them instead of the other way around. Hopefully my dozens of readers will learn a thing or two and enjoy their own journey to financial freedom.

Financial Tales Of Terror! II

Halloween is just around the corner and it's time for another installment of...

Financial Tales of Terror!

As Read By: The Librarian

(For those of you who have no idea who that is, watch this clip courtesy of Hillarious House of Frightenstein on You Tube here)

My first story is about a man who purchased a big ticket item to entertain his friends. What he didn't realize is that it ended up costing him his soul..savings! Muhahahah...*cough*cough*gasp*...  I call this one:

The Tale Of The Blind Sided Couch Potato

Rick couldn't wait to be the envy of his friends every Sunday. He finally found a good deal on a big screen TV he wanted from his local big box store. As he eagerly approached the sales counter, the clerk asked him if he wanted to sign up for store credit card and pay nothing for a whole year. "Hell yeah!", cheered Rick as he signed the dotted line without reading the fine print. As Rick was driving home he had a big grin on his face and thought of all the other toys he can buy with the $3000 he just saved himself from paying. Little did he know that boxed up TV was about to take him on a financial roller coaster of scary...things!

Sunday afternoon couldn't come fast enough and Rick invited all of his friends over to watch the game on his brand new big screen. "The best part is I don't have to pay for it for a whole year.", Chimed Rick. "Ooooh nice score bro", exclaimed his friends. As weeks went by, the luster of the new TV wore away and each Sunday came and passed. Summer turned to fall, and soon winter followed and time was running out for Rick to pay off his credit card purchase. "I have plenty of time to come up with the money", thought Rick. 

With a week left to pay for the TV, Rick went outside to start his vehicle to go to work. After turning the key, the engine whined and black smoke started coming out of his hood. "Your engine cratered and it's gonna cost $5000", explained the generic mechanic type character as he slammed down the hood on Rick's vehicle.

With his finances tapped out, Rick had no choice but to wait to pay off the TV so he could get his mode of transportation fixed.

A few months later Rick received a letter in the mail from the big box store from which he purchased the TV. As Rick began reading the letter his face turned white and the letter fell from his fingers and floated to the floor. Because Rick took longer than 12 months to pay for the TV, he was charged a full year of 30% interest on top of the original cost of the TV. His $3000 TV was now going to cost him $3900. So much for the good deal, Rick!

Wasn't that a terrifying story of high interest store credit!... No?... Well maybe this next one will scare the life out of you. I call this one:

The Tale Of The Never Ending Loan

Janet loved working at her retail job. She would get a employee discount so she would always spend her extra money on the newest clothes and instead of putting money into an emergency fund. Even though she saved money by using public transit and living with a roommate, she loved going to live shows or go on a night on the town with the girls. Life seemed good for Janet, but what she didn't realize is that life likes to throw a few curve balls to keep things interesting.

One day Janet came to work with her $6 Mocha Latte in hand, only to find out that the store was losing money so Janet had her hours reduced. "Not a biggie, I'll just find a part time job", said carefree Janet. After looking through the newspaper she realized times were tough, and there weren't a lot of jobs out there. When she returned home that night, her roommate was waiting for her with a look of concern on her face. "Umm, I forgot to tell you that we received a letter from our landlord a few months ago, and that our rent is going up in a few days," the roommate announced. For the first time in her life, Janet felt worried. What was she going to do? She needed more money and she needed it fast.

That night she went for a walk to calm her racing mind. Suddenly it started to pour rain and Janet did not have her umbrella so she dashed under a nearby canopy. As Janet collected herself in her newly found shelter, she noticed a green glow above her head. As she looked up she saw the words "Payday Loans" flash above her, calling out like a beacon of hope. "I've never noticed this place here before", she thought to herself as the ominous thunder roared in the background.

She entered through the door and heard the door chimes ring above here head. Just then a short little man popped up behind the counter. "Well hello there, how are you little lady?" chimed the short man. "Not so good. I'm a little short this month and could really use some cash right now," replied Janet as she approached the counter. "Would you like to borrow some money, then pay us back on you next payday?" asked the short man. Janet was so relieved to hear the good news that she nodded her head with excitement and the man pulled out a few pieces of paper. The short man had an even bigger grin on his face now and had Janet fill out the appropriate paperwork without reading all the details...yada yada...let me skip forward a little bit here.....Janet finally got home with the $600. She figured she'd ask for more money since the man was so nice and she deserved to buy some new clothes to make herself feel better.

Well when the rent was due, Janet had enough money to pay all her bills and buy that new outfit she had promised herself. When pay day rolled around she decided to stop by and pay back that nice man at the pay day loan store. When she opened the door the short man greeted her as usual and Janet approached the counter. The short man pulled out the contract, did some fancy calculations on his calculator and asked for a total amount of $690. "But I thought I owed you $600", cried Janet. The short man explained to her the outrageous interest rates that cash advance businesses are legally allowed to charge and the high risks they take to lend money. Janet looked confused and thought about how she would get the extra money. The ever smiling short man leaned in close and asked her, "Would you like to borrow some more money?" Janet thought to herself for a moment and said, "You know, I could use a new outfit". The short man laughed maniacally as he pulled out more paperwork and Janet smiled nervously as she unknowingly became trapped in a debt-cycle from...Hell!

Oh my goodness, wasn't that a very scary story of financial terror? It wasn't? Are you kidding me, I was absolutely terrified at all the wasted money. I don't think I'll be able to sleep anymore..... you.. you're laughing.

Curses! I thought these stories would scare the pants off of you. I'll have to come up with some even more terrifying tales of financial terror for next year. Until then, have a happy Halloween and good bye...for now.

TFSA- So Much More Then A Savings Account

Back in 2008 the federal government announced that there would be a new savings account that would allow your earnings to grow tax-free. I wasn't very excited at the time because you were only allowed to contribute $5000 and the highest interest rate the banks were offering were 2.5%. Little did I know in 2009 when I put $5000 in my shiny new TFSA that I was partaking in the most amazing savings vehicle every assembled....

If you haven't heard about tax free savings accounts yet then congratulations, you've made it out of your coma! This is a detailed account of what I've done with my TFSA. I'm sure there are better strategies out there but I spend a minimal amount of time on my tax-free trading account and it's doing very well.

Now I myself never realized the true potential that TFSAs offered back in 2009. I remember opening up a "savings" TFSA with my bank and they offered a 2.5% return. I kept my money in for almost a full year until I noticed that my interest rate of 2.5% was reduced to 1.5%. That was right around the time I started learning about dividend investing and then it hit me; if I opened a tax-free trading account, I could earn a lot more money without paying any tax.

The first business day of 2010 I transferred $10,000 into my newly created tax free trading account and purchased 200 shares of ENB. The next few days the stock price dropped and I thought the world was ending. My wife was furious with me but I fought the temptation to sell and naturally the stock recovered. Then one day in March my life changed forever; a dividend payment was deposited into my account for $85. A warm fuzzy feeling came over me when I made my money work for me instead of the other way around. From that day forward I became addicted to dividends.

By the end of 2010 the stock value in my tax free trading account increased by $1516 and I was paid $340 in dividends. That's a far cry from the $150 I would have been paid if it had still been in the crappy savings account from my bank. I noticed the interest rate from my original savings account was even further reduced to 1% while the yield in my tax free trading account increased from 3.5% to 4%. How did my yield increase while the banks were reducing their interest rates? It was all thanks to a little Christmas gift from Enbridge; they increased their dividend by 15% for March of 2011.

2011 was an interesting year for us. We had just purchased a new house and a lot of my funds were tied up paying two mortgages. I really wanted to contribute more money into my tax free trading account since the  contribution room increased by another $5000. I had 100 shares of BCE in a cash trading account that I bought in 2011 and I was paying taxes on the dividends. If I stuck shares of BCE in my tax-free trading account I would deem them sold and pay taxes on the capital gains. It would only be small amount, less than $50 to be precise so I went with it and added my BCE shares into my tax-free trading account. My yield increased from 4% to 5.7% and the total dividend coming in each year increased from $340 to $599.

October is almost over now, and after the market dips of August and September and a looming economic uncertainty, my tax-free trading account is still doing amazingly well. I deposited a total of $13000 and my trading account is currently worth $18,900. Sure beats the $390 I would have made in that damn savings account I first opened.

From here on in I plan to maximize my TFSA with any contribution room I have left. I also would like to get my wife's TFSA  maxed out as well, but that's not likely until her last student loan is paid off first. I will keep investing in quality Canadian blue chip stocks and re-invest the dividends to allow the maximum amount of compounding. I hope to get either a bank or some sort of consumer goods in my TFSA next, whichever gives the highest yield in the end. Hopefully when I plan to retire I will have created a self sufficient, tax-free income supply that will compliment my other retirement income. That is if the Federal government doesn't screw over my plan and change the TFSA rules on me.

What do you do with your TFSA?

RRSPs: Are They Really The Best Way To Save?

For the most part of my life I've been told that RRSPs are THE best way to save for retirement. Every year I would contribute whatever I could afford in order to get nice refund cheque from the government and would feel super rich depositing it into my account. Like thousands of other Canadians, I would delude myself into thinking it was free money when really it was my own hard earned cash!

The short term aspect of RRSPs seems like a win/win situation; you contribute money to your retirement, which lowers your annual income and the excess tax you've already paid is refunded to you. Since you're penalized for early withdraws from your RRSP called withholding taxes, it stops the urge to touch that money and allows it to compound tax-free. During the last few years of becoming financially aware, I've started to question if RRSPs truly are, "all that and a bag of chips".

The Long Claw Of The Government

Now I know everyone's situation is different with income levels, dependents and items to claim so the following information is from my perspective. My wife and I roughly make the same amount of money, and we just so happen to be in the middle of tax bracket. For us to contribute enough money to sneak into a lower tax bracket, we would both have to contribute fifteen thousand dollars to come away with a large return. That's a lot of money to sock away when it could be used for paying off the student loan and the mortgage. Not only is it a lot of money, it's locked away where it doesn't make financial sense to touch it. What happens if one of us gets sick or a major incident in our life requires us to need that money? We would lose a large sum of money in withholding taxes and we would lose that contribution room in our RRSP forever. It kind of makes it seem like your nest egg is kept on the highest mountain top and is guarded by giant eagle ready to claw away at your savings if you ever want to use it. I wonder if the eagle gets benefits and a federal pension?

Death And Taxes

Taxes have become a constant in life so unless you become a vagabond with no fixed address, you better get used to paying them. I for one hate paying taxes but they are a necessary evil. Some would argue it's better to postpone paying tax until you retire. That way when you aren't making any money your tax rate will be lower when you withdraw from your RRSP. While that does make sense, there is no way to tell what taxes will be like in the future. Sure there is a possibility that taxes will be the same or lower, but I subscribe to reality and have been around long enough to know nothing ever decreases. So technically by contributing to RRSPs you defer paying taxes now, only to pay less tax in the future which could essentially be a higher amount then they are now. I'm pretty sure the government gave a HUGE bonus to whoever invented RRSPs and developed the tax laws around it. Kind of makes you want to waive a white flag and live in the woods, doesn't it?

So Now What?

Apart from stuffing money in a mattress or hiring Tina Turner to be the mayor of my own tax-free barter town, the government will get their taxes either now or in the future. Are RRSPs the best retirement savings vehicle? Everyone will have a different opinion after weighing their own personal pros and cons. One thing is for certain; they do allow you to pay less tax when you are younger and have more expenses. Majority of retired people have little or no debt, so it may prove better to postpone paying as much tax now and letting your financially backed future self pick up the tab. If you can afford to max out your RRSP each year then good on ya. I am still going to contribute to my RRSPs, but I don't think I'm going to max them out. I'd rather spread my money out and maximize my TFSA and whittle away at my mortgage instead. In the end it's at least better to contribute something then nothing at all.

To my dozens of readers: What's your take on RRSPs?

Give Thanks Edition

I can tell by the rise of gasoline prices that it must be Thanksgiving weekend! I remember when I was a kid, the only important thing about thanksgiving was a day off from school. Now that I'm older it really makes me stop and think about everything I am thankful for and that extra day off from work; well that's just a bonus!

My wife and I are very lucky to have our health. As far as we know there are no problems and we both have a clean bill of health. One thing I have noticed is the rise of cancer in the population, and not just older people it's with the young people as well. I've talked to my family doctor and she says not to worry about cancer until my 40's, but I think there's nothing wrong with preventative maintenance. I used to get a physical every two years but now I started going once a year and I've tried to incorporate more exercise and healthy eating into my lifestyle. We both try to eat healthy, but we all know how hard that is when our society is bombarded with fast food commercials and the food that our grandparents ate is now called "Organic" and is double the price. I am very thankful that my wife and I both have our health, and have food in our fridge when so many in this world are sick and starving.

We are very blessed to have a new house this year. Even though we live in a large city, we built in a very quiet neighborhood that makes us both feel safe and secure. It's a great house that will last us for the next phase of our life with enough room for two little ones when the time comes. With a nice house comes a nice mortgage, but we are also blessed with two great jobs and the smarts to make extra mortgage payments each year. I am very thankful to have a roof over our heads when so many people lost their house to disaster or foreclosure.

Having great friends and family is what helps gets us through the thick and thin. My wife and I both grew up in happy families and while no family is perfect, it gave us the solid start that some kids don't have access to. It seems as I get older, there's less time available for friends, and my friends have families now of their own which makes it even harder to hang out. I think once our backyard is ready next year there will be many, many BBQ's parties for years to come. I am very grateful for my amazing friends and family. They are a great support system to have in a world full of craziness and chaos.

I know this blog is supposed to be about financial freedom, but it's important to take time out and be grateful for what we have this weekend. Perhaps look at our lives and change the things we are not proud of, or steer our life around the "rocks" that we can't change. Have a great Thanksgiving weekend, everyone!

What are you grateful for this weekend?

Dividend Income For September

Sorry for the delay in my postings, September has been a very busy month for me. I've been working very hard at my job and preparing for my first Fall as a homeowner. Everyone seems to work hard for their money but since I've discovered dividend investing, I've finally found a sure fire way to make my money work for me.

My total dividend income was $368.21 for the month of September. I was probably watching T.V. or deciding which ice cream I wanted for dessert when my dividends were paid to me; that's about how hard I work for them. My dividend income for last September was $284. That 29.5% increase was brought on by dividend increases and re-invested dividend income that I used to purchase more shares. My compounding machine is coming along quite nicely even though the markets are turbulent.

INVEST OR PAY OFF DEBT?

 It's very tempting to funnel money away for investing purposes, especially when the markets are low. I think it's important to find a balance between paying down debt and investing in the stock market. If you have a mortgage, you'd be a fool not to make extra payments when you have extra money to invest. It seems painful I know, paying even more money then what that bank takes out every month, but those extra payment go right to the principle which lowers the amount of money you pay in interest each month. 

To show you how big of a nerd I am, I will let you in on a secret of mine. Every two weeks when a mortgage payment goes through, I compare the old balance to the new balance and find that the amount that goes toward the principle increases by .29 cents each time. My wife thinks I'm crazy but I get excited knowing my mortgage is slowly getting smaller and smaller. Perhaps I am a little "Loonie".

To my dozens of readers, do you have any quirks when it comes to paying down debt?

Road To Retirement Update

I've been very busy in the last few weeks, as you might have noticed by the lack of posts. I'm trying to get everything finished in our yard before the cold weather hits next month. A lot of money has been spent this summer on our yard and the coffers are lower then I'd like them to be. I'm going to initiate a savings spree over the winter to get back on track to maximize our TFSA and put extra money on my wife's student loan. I can hear my wife sighing with excitement already!

We were carrying two mortgages for the first 5 months this year and we were so relieved when our condo sold in May. It set us back quite a bit financially and it took us a few months to get back into our regular savings routine. My goal was to put an extra $1000 down each month on our mortgage but because of the setback, I'll only be able to put $5000 down this year. That means I'm going to have to try and make up the difference next year. I guess I could always play guitar on the street corner and jam with that guy who plays the nose flute...

As for my wife's student loan, we are on track for paying it off in one year's time with $1000 being paid down each month. Once her student loan is paid off we can redirect the money towards more suitable things like paying off the last vehicle, paying down the mortgage, maximizing TFSAs or putting it towards the baby fund. We are very blessed to have two well paying jobs and could not be moving this fast to retirement without them. I know once we have kids things are going to change big time when one of us stops working, but with anything in life you have to hang on and take the good with the bad.

At this stage of our lives I thinks its more important to focus on debt repayment rather then investing, especially with all the recessions and economic uncertainty. Paying down debt is a guaranteed return on your money and once it's gone it can take a lot of excess worry off your plate and let you enjoy life to its fullest.

What stage are you at in your own road to retirement?