Friday, November 20, 2009

Short Takes: Credit and Debit Card Rules, Improving TFSAs, and 35-Year Mortgages

1. Finance Minister Jim Flaherty has finally come out with new proposed rules for credit and debit cards (thanks to Lyne who found this link for me).

2. Rob Carrick collected together several proposals for improving TFSAs. Most of them amount to increasing the amount that Canadians can contribute to a TFSA, in some cases favouring older people. These sound great for old rich people (something I aspire to be one day).

3. Canadian Capitalist wonders what are homeowners thinking when they take on 35-year mortgages that they can barely afford when it seems that interest rates (and payments) can only rise in the future? This one generated quite a barrage of comments.

4. Gail Vaz-Oxlade explains how minimum payments on credit cards actually decrease the amount that people pay towards their credit card debt each month due to a phenomenon called anchoring.

5. Making a claim on your insurance is often something you have to do at a traumatic time in your life. MoneyNing explains the four things you shouldn’t say to your insurance agent if you want you claim approved.

6. Canadian Financial DIY reports on rule changes with Locked-in Retirement Accounts making it possible to shift money to a regular RRSP.

7. Big Cajun Man likens the choice between a fixed or variable rate mortgage to the choice for New England to punt or go for it on fourth down in a recent football game against Indianapolis. He’s right that fixed rate mortgages are the more conservative choice, but this doesn’t apply to the football game. Football games don’t have intermediate outcomes; the only possibilities are win, loss, or tie. New England coach Belichick made the right choice.

8. Guest writer at Million Dollar Journey, Ed Rempel, thinks that faith is an important part of successful investing. I should add that he doesn’t mean the religious kind of faith, but rather optimism in the future of humanity. If this is what it takes to avoid selling out when prices are lowest and news reports are darkest, then it sounds good to me.

9. Mr. Cheap thinks it’s OK not to save for retirement in your 20s and 30s (the web page with this article disappeared since the time of writing).  This is another one of those cases where a message will resonate with the wrong people. Mr. Cheap wants to reach people who save every penny and fail to enjoy life. He’s more likely to reach spendthrift fools who are happy to have another excuse to speed towards a painful bankruptcy. This is often the way it goes with giving out advice as Jason Zweig explains.

10 comments:

  1. Is this what you are looking for?
    http://www.fin.gc.ca/n08/data/09-109_1-eng.asp

    ReplyDelete
  2. You wrote: "These sound great for old rich people (something I aspire to be one day)."

    I agree, I'd like to be both rich and old. Not that I want to be old of course, but beats the alternative. Reminds me of what Warren Buffett says what he wants people to say about him at his funeral: "Boy, was he old!"

    ReplyDelete
  3. Lyne: Yes, that's it. Apparently, it was hiding from me the way things do just before my wife finds them for me :-)

    ReplyDelete
  4. I don't think I disagreed with Coach Belichick's choice (however it was proven wrong, in that his team lost, so that is the ultimate barometer for that kind of decision), just used it as an excellent example of Risk/Success decision point.

    Have a glorious weekend.

    ReplyDelete
  5. Big Giants Fan: Actually, the ultimate barometer of the correctness of a decision is whether it would be right to make the same decision if the same situation comes up again.

    ReplyDelete
  6. I personally thought Belichick's call was a bad one in the context of the game. Nevertheless, I find it fascinating that the Coach's decision is judged based on the results -- not the probabilities. Just like investors who "knew" a stock was going up after the fact.

    Thanks for the mention!

    ReplyDelete
  7. CC: Yes, a strong majority of people seem certain that Belichick was wrong (and many are quite adamant). I was among them, at first. However, the link I provided at the end of item 7 demonstrates clearly that Belichick was right. Further, the "context" of the game, which more or less means that Indy's offense was on a roll, tips the odds further in favour of Belichick's decision. This is one case where almost everyone's intuition fails them.

    For anyone not already sick of this football discussion, the flurry of comments on the post explaining the probabilities (see link at the end of item 7) are a case study in various fallacies.

    ReplyDelete
  8. Hi Michael, thanks for the link. I have the same ambition as you and I'm making "steady progress" towards fulfilling half of the ambition. The other half remains more problematic!

    ReplyDelete
  9. It was certainly interesting for me to read that article. Thanx for it. I like such topics and anything that is connected to them. I would like to read a bit more on that blog soon.

    ReplyDelete