Friday, February 13, 2015

Short Takes: Consumer Protection Trumps Financial Literacy and more

My article debating what income level is safe in retirement got a mention in the Findependence Hub’s Weekly Wrap. It’s important to be realistic about both portfolio returns and the effect of costs.

Here are my posts for this week:

Understanding Diversification

Where are the Customers’ Yachts?

Here are some short takes and some weekend reading:

Helaine Olen at explains why financial literacy can’t work and we need better consumer protection in financial services. The way I see it, we should focus on consumer protection at the macro scale of governments and laws. It still makes sense for parents to try to teach their children financial skills, and it makes sense for adults to try to educate themselves. But financial literacy programs can never be an effective substitute for consumer protection laws. Few of us can defend ourselves against predatory practices disclosed in deliberately confusing contracts.

Million Dollar Journey suggests two ETF-based index portfolios and explains which portfolio is best for each of the major discount brokerages.

Big Cajun Man says some important things you can do for your retirement are to exercise and quit smoking to improve the odds you’ll be alive to enjoy your retirement.

Boomer and Echo expain how to get access to money in a locked-in retirement account due to financial hardship.

My Own Advisor has some advice for an investor just starting out.


  1. Thanks for the inclusion this week, the best thing you can do for your retirement is be alive, enjoy the frigid weekend.

  2. I liked how Olen described why the financial services industry is so in love with financial literacy programs - it's a noble distraction from actual consumer protection.

    FYI - the Dave Liggat link is pointing to Million Dollar Journey. I'd love to check out the spreadsheet once I have more than one account to track :)

    Thanks for the mention!

    1. I'd be interested as well. My rebalancing spreadsheet was set up to let you enter information from multiple accounts, but then gives you the rebalancing for the whole portfolio (i.e. it may say you need 300 more shares of VCN across all accounts, but not where those shares should go). Would be interested to see if he's done basically the same thing, or taken the next step...

      And I had the same thoughts as Michael on fin lit -- regulation is good and fin lit isn't really a replacement for that, but in the short term fin lit is what we have to work with. Especially because regulation can sometimes have unintended consequences when there isn't literacy to complement it (e.g. non-recourse lending).

    2. The Dave Liggat link should be:

    3. Thanks @Anonymous. I've fixed the link now. Sorry for the inconvenience.

  3. Slowly building up my balancing spread sheet using GoogleDocs.
    Still working out some of the bugs on mine though. A lot of reference rebalancing spreadsheets I find have a direct proportional rebalance calculation, which I find inadequate.

    For example my sheet currently has VTI/VXUS both at 50% allocation, because they are in an RRSP account and contribution is maxed (nothing for 2015 yet, waiting for return). Then, based on the dollar value and total value, the amount of VUN I should get in my TFSA is calculated (to bring VTI+VUN ~ 40%).

    My biggest problem is I have 2 sheets, one for the index side, the other for dividend side.. and they are calculating different things.

  4. Thanks for the mention! I have to check out that spreadsheet. You posted yours some time ago didn't you?

    Stay warm this weekend!