Friday, May 11, 2012

Short Takes: Defined-Benefit Pensions and more

Larry Swedroe explains how public sector defined-benefit pension plans put taxpayers in the investment guarantee business. Don’t be fooled into thinking this is just an American problem. The U.S. has bigger problems, but Canadian taxpayers are in the investment guarantee business as well.

The Wall Street Journal says that Americans are warming up to the idea of renting a home. It’s ironic that this should happen while housing prices are so low in much of the U.S. It’s Canadians who should be looking at renting because of high house prices, but we’re obsessed with home ownership.

Big Cajun Man is no fan of the credit card cheques mailed to him every month.

Retire Happy Blog has some good reasons why you should formalize the loans you make to your children even if you love and trust them.

Where Does All My Money Go? says that the cost of smoking is equivalent to blowing up multiple Porsches. But can you really put a price on doing something that your parents don’t want you to do? By the time you’re too old to worry about defying your parents, you’re hooked.


  1. If I could figure out how to make an origami penis out of the cheques and send them back to whomever sent them, I would, but that would take too darn long!

  2. Love your blog - I check it first thing every morning.

    This isn't a personal finance question, but I'm guessing you'd be able to figure out a finite question that has been bothering me, so I'll throw it out there and see if you'd like to.

    How would I calculate the odds of at least one 3, 6 or 9 coming up if I randomly drew three cards from a deck of playing cards?

    I figure if it was just one card being pulled from the deck, it would 12/52 or a 23% chance, but I can't figure out how much the percentage increases with 3 cards being pulled from the deck.

  3. @Jeff G: This isn't a homework question, is it? :-)

    For questions lie this, it's easier to work out the probability of not getting at least one of 12 cards in 3 tries. This is just


    Then take 1 minus this probabiity.

  4. Thanks for the mention Michael.

    I heard they are replacing Tobey Maguire as Spiderman for the next trilogy, fyi.

  5. Thank you so much for your math expertise and your quick reply.

    No it wasn't homework. At my regular poker game the other night, a player offered anyone a side bet on each hand played where he would take the 3, 6 & 9. If any of those cards came up on the flop you had to pay him a $1, if none of them came up he had to pay you a $1. Although at first blush it appears it is a good bet to take, I figured there was no way he would offer the bet if he didn't have the advantage, so I didn't take his bet, but was curious afterwards how much his advantage would have been. After seeing your math, which proves he had a 55% chance of winning each flop, I'm glad I didn't take the bet.

    Sorry for my delayed thank you, as I forgot I asked the question, and just remembered to go back into the comments for this post to see if you had answered.