While many people advocate going to school and getting an education, the reality is that education costs are more expensive than most people realize. Canada thankfully provides reasonably priced educations compared to the rest of the world, but it is far from free. Given that I grew up in Chilliwack, and that I had to move out to Vancouver to attend UBC, I spent approximately $11,000 per 8-month period, which included housing on the UBC campus along with a university food program (which tasted fairly similar to prison food, I imagine). Of those costs, approximately $3,000 went towards tuition, ...

I’m scheduling this post for when I’m out tomorrow for a while, so it’s possible the US may find some common ground on the current US debt negotiations. I don’t it though. Right now things aren’t looking very good for the United States, and the time is almost out where a solution can be reached and implemented before the debt ceiling expires. Negotiations continue to stall, and both sides seem unwilling to deal with some of the harder issues, like coming up with a long term financial strategy that will reduce the deficit and the debt. I actually thought there was only about a 10% chance ...

When the protests started in Egypt, they were over something relatively benign: the increased costs of basic food items. That led to full on revolts, and the eventual toppling of the government in Egypt. We now see what’s happening in Libya, and it’s possible that these are just the first few pebbles in what will undoubtedly be a much larger avalanche. People who are hungry are motivated for change. Make no mistake, the increased costs of commodities and food is in large part the result of the United State’s loose monetary policy, especially concerning QE1 and QE2. You simply can’t double ...

I gotta say, I like precious metals. Maybe it’s because I’ve seen Pirates of the Caribbean one too many times, or maybe I was a gypsy in another life. But there’s something strangely appealing about the shine and lustre of a piece of gold or silver. Most guys don’t have many opportunities to own any metals. I used to have a gold plated watch, but unless you’re wearing a suit or at a formal event, a gold watch just looks out of place most of the time. My current watch is made of titanium, which is actually a very expensive precious metal, but I like it mostly because it’s extremely ...

I’ve gone through various mutual fund companies and financial planners over the years, but ultimately decided last year to take my finances into my own hands and manage my own portfolio. My main issue with the financial planning/advice market is that there is an inherent conflict of interest in most of the advice given out. Yes, a par-life plan may in fact be a great investment vehicle, but when your purchase of one results in a $1,000 bonus for the financial planner, how can anyone ever be sure that the advice was given solely because it was in your best interest? Also, most mutual funds have ...

One of the things I’ve come to realize over the last year is that in most cases, debt is horrible thing. Granted, many businesses look towards debt as a way to fund capital purchases in their beginning stages, and I have no problem with small business loans. But all the other debt that people are addicted to is ultimately bad for the economy in general. There are many people who believe that the reason housing prices are skyrocketing in North America, as well as education costs, is due to the availability of cheap credit. I’m one of those people. Stated another way, housing and education costs ...

A few years ago, the government opened up a new investment vehicle for people looking to save for retirement, the tax free savings account (TFSA). An RRSP is effectively a tax-deferred investment account. When you contribute to it, you are doing so out of pre-tax dollars (or, if you get a tax refund due to your contribution, you are getting the tax you paid on that amount back). Eventually you have to pay the piper, so when you start pulling money out of your RRSP to fund retirement, you will pay tax on that amount. The upside is that you’re able to invest pre-tax money (hence you have more ...

Inflation is technically an expansion of the monetary supply. Prior to the invention of fiat (i.e. paper) money, inflation occurred when pure gold or silver coins were melted down and mixed with less valuable metals. The end result was a coin that was worth less, even though it was the same size, shape and colour. Another form of inflation occurred when people used to subtlety shave the edges of coins off and use that metal to purchase other items. The coins ended up becoming deformed, and had less metal than the used to have, making them worth less. With fiat money, inflation occurs when a country ...

In times like this, I hate being right. I met with a few financial people Friday afternoon at their offices in Abbotsford. As I was leaving, I casually asked everyone who worked there what they thought about the recent run of gold. Surprisingly (or not surprisingly, depending on how up to date you are with what’s going on), they didn’t seem to think it meant anything, and that the US economy was going to recover shortly. I then made a comment that I wouldn’t be surprised if the US did another round of Quantitative Easing (QE3 I dubbed it), but they simply laughed that comment off. Not more ...

There are various statistics used to track each country’s currency in circulation. The main ones that most people reference are the following: M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency. M1: The total of all physical currency part of bank reserves + the amount in demand accounts (“checking” or “current” accounts). M2: M1 + most savings accounts, money market accounts, retail money market mutual funds,and small denomination time deposits (certificates of deposit of under $100,000). M3: M2 + all other CDs (large ...

Hard to believe that less than 30 years ago gold was trading at $35/ounce. At that time, the US Dollar was fixed to the price of gold due to an agreement called the Bretton Woods Agreement. That agreement effectively forced countries to back their currencies with gold, which ultimately enforced sound fiscal policies on the participating countries (you can’t spend money you don’t have). Unfortunately the inability to spend money they didn’t have eventually caused the United States to break out of the BWA: In 1971 Nixon decided to end the convertibility of the US Dollar into gold, which effectively ...

I’ve been meaning to do a posting about the Garth Turner event the other day, but haven’t gotten around to it. While Garth is a good public speaker, I didn’t really learn anything at the event that I didn’t already know or believe. Yes, Garth believes real estate in Canada is in for a rocky ride, as do I. Yes, we are about to head into a period of asset deflation following by price inflation. I’ve spent the last six months reading tons of books on investing and retirement, partially because I’m interesting in the subject, and partially because I’ve been a bit bored and felt like ...

Within the United States, there is a strange entity, neither completely public or completely private, that manages the monetary policies of the United States. This entity, The Federal Reserve, has the task of adjusting interest rates, and also attempting to stimulate the economy using various mechanisms such as Quantitative Easing. Thomas Jefferson, one of the founding fathers of the United States, had this to say about a government influenced monetary system: I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy ...

My background obviously isn’t in finance – I’m actually some weird hybrid between an electrical engineer and a physicist. While I understand a lot of the basics in finance, there are still quite a few gaps in my knowledge, and I’m slowly working towards filling those in. Last night I was pretty beat, so I crawled into bed and purchased a book about capitalism and the economy. I actually managed to read most of that in a few hours, and decided I’d grab another book as well. Wouldn’t you know it, I finished that one as well sometime around midnight, and passed out on the couch. Both ...

The Gold Standard Most people don’t realize it, but the current form of printed money we all know and love is actually worthless. While the dollar value on the paper may say $5 or $10, it only holds that relative intrinsic value because each government says it does. There are unfortunately no assets or underlying resources protecting that value, something that has the potential to rapidly destabilize any given currency in the event of an economic or wide-scale crisis. This type of currency is known as a fiat currency, and it has become the standard in the last 40 years or so. Prior to the conversion ...

I was talking to someone the other day, and we were both sort of lamenting the long gone days of adolescence. I remember being 17 years old, working a part-time summer job at Bonanza. While summer was only two months off, a good chunk of that was spend up at Cultus Lake, working as a dishwasher 20 hours or so a week, and spending as much time with my friends as possible. As a kid, you really don’t have to worry about where your money is going to go since you really don’t have much to spend it on, other than the world’s crappiest car and the occasional trip to the waterslides. Unfortunately, ...