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.