Friday, August 2, 2019

Short Takes: Employer Matching, Lattes, and more

Here are my posts for the past two weeks:

How High are Rents Today?

Canadian ETFs vs. U.S. ETFs

Trusts, Whether You Want Them or Not

Cut Your Losses Short

Here are some short takes and some weekend reading:

Preet Banerjee says that taking advantage of employer matching in savings plans is free money and deserves to be in the list of personal financial commandments such as avoid credit card debt. I agree, but it pays to look at the difference between costs in the employer savings plan and the costs in your personal portfolio (https://www.michaeljamesonmoney.com/2013/12/employer-matching-in-group-rrsps.html). In extreme cases where employer plans have very high costs, the employer match can get eaten up in fees over time.

Robb Engen at Boomer and Echo says we should stop asking $3 questions and start asking $30,000 questions. By this he means focusing your attempts to build wealth on the big dollar amounts in your life. Robb is in the camp who says to go ahead and buy your lattes. However, a latte habit isn’t really a $3 question if you spend $100/month. I think in dollars per year. So, lattes in this example amount to $1200 annually. For comparison, reroofing my house costs about $500 per year. This isn’t to say that buying lattes is a bad idea for everyone. Just see it for what it is – a thousand-dollar question.

Fintech Impact interviews Preet Banerjee about his MoneyGaps tool to help financial advisors provide better planning services for their clients. One of the interesting topics covered in this fast-moving podcast is the free GIS calculator MoneyGaps is working on. This is a complex area where few financial advisors have any useful knowledge.

Gary Mishuris tells the interesting story of a young equity analyst uncovering a fraud. If you get to the part where the fraud is revealed but struggle a little to make sense of it, you should definitely question your ability to pick your own stocks.

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