When we think of jobs for teenagers we tend to think of minimum wage jobs at fast food joints. Back when my older son was first refereeing house league basketball, he dreamed of getting a “real” job in fast food to make more money. What he didn’t realize was that his refereeing gig paid more per hour. My younger son is now refereeing house league basketball and gets $60 to referee four 45-minute games on Saturdays. There are 45-minute gaps between games for the teams to run a practice, and so he has to be there for a total of 5 hours 15 minutes. You can think of this as either $20/hour during the time he actually works or $11.43/hour for the full time he has to be there. Even $11.43/hour looks pretty good when you get three 45-minute paid breaks. And running up and down a basketball court is a whole lot more enjoyable than flipping burgers. I’m interested to hear from readers if they have other ideas for good jobs for teenagers that pay better than a “real” job.

Visa has a booklet of financial advice available online called Practical Money Skills: A Guide to help you manage your money . It contains a fair bit of very basic, but useful information. The advice on how to allocate your income is consistent with other sources of financial rules of thumb, but it struck me how useless this advice is for anyone who wants to develop some financial independence. The first page of content after the mandatory giant pictures of smiling families contains the following chart in large font: Guideline for after-tax expenses: 30%: shelter 10%: fixed expenses 10%: loan payments 10%: personal spending 10%: savings Presumably, the missing 30% is income taxes. On the surface, these percentages seem sensible enough. The truth is that staying within these guidelines will work fine if your goal is to be like everyone else and trudge off to work each day for most of the rest of your life to a job you will come to hate but can’t afford to leave. If you’...

1. We had some good news about the “buy American” part of the U.S. stimulus package. U.S. legislation has been changed to include “a requirement that the U.S. not violate its international trade agreements” (the web page with the article quoted has disappeared since the time of writing). It’s not clear whether this will be enough to protect Canadian exports, but it’s a step in the right direction. 2. President Obama has capped executive pay at $500,000 per year at companies that accept government money. A Wall Street Journal video (that is no longer available online) explains some of the other measures designed to prevent executive excess. 3. Preet gives a good explanation of why the average active money manager must lose out to the index . 4. FrugalTrader explains how Canadians’ investments are protected by CDIC and CIPF .

Lotteries were in the news a while back because of problems with insiders claiming many of the prizes. It turns out that the problem is worse than we thought according to CTV . The Ontario Lottery and Gaming (Gambling?) corporation (OLG) has studied lottery wins over the last 13 years. Originally, they said that 1.7% of the money went to insiders, but they have now revised this to 3.4%. Of course, this should be viewed as a minimum because they can only report insider wins that they know about, and they couldn’t possibly know about all of them. The suspicion is that not all of these insiders bought these winning tickets. No doubt the fraud took many forms, but the classic example given is the lottery player who hands a winning ticket to a convenience store clerk who either says the ticket didn’t win or says a prize amount that is smaller than the real prize. It’s amazing that people get so worked up about insiders skimming 3.4% of the prizes but are unconcerned about the incredibly...

Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA) is out. For the fourth quarter of 2008, 53.2% of actively-managed Canadian equity mutual funds beat the TSX composite index. Some will tout this as a sign that you need active fund management for protection during down markets. We need to dig a little deeper to see the truth. To begin with, 53.2% is such a narrow victory that it is better to think of it as a tie. The next thing to look at is how this slim majority of actively-managed mutual funds beat the index. The fund industry would like to have you believe that managers cleverly move your money around from one stock to another to avoid losses. The truth is that every mutual fund must keep a certain percentage of its money in cash or cash equivalents to deal with the constant inflow and outflow of investor money. During the fourth quarter of 2008, the TSX composite dropped about 23%. This means that cash in your mattress outperformed stocks by a wide ma...

Common advice about controlling spending is to track all your purchases and add them up each week or month. I believe that this is effective, but have been fuzzy on why it seems to work so well. Why can’t people just spend less without the constant reminder of how well they are doing? I got some insight on this question from, of all places, poker. For poker players there is a certain thrill to dragging in a pot of chips. The thrill is there whether it is a $1 pot or a $10 pot. The $10 pot gives a bigger thrill, but not 10 times bigger. Similarly, losing a $10 pot feels worse than losing a $1 pot, but not 10 times worse. This leads to some players playing in such a way that they maximize happiness by taking in many small pots, but losing some big ones. As long as they don’t count their dwindling chips, they can actually be happy playing this way. Counting your chips is a lot like adding up your spending at the end of the month to see what happened. You may feel good about ...

A while ago I discussed how to build your own market-linked GIC . A friend (who prefers to remain anonymous) mentioned that his market-linked GIC has a maximum return. It turns out that he has what Scotiabank calls its “Market Powered” GIC or MPGIC. This MPGIC is similar to other market-linked GICs in that its return is linked to a stock index. In this case, it is linked to the TSX 60 index of large Canadian companies. This GIC also returns only a fraction of the index return, called the participation rate or participation factor (PF). Three differences with the MPGIC compared to other products I’ve looked at are 1. it guarantees a minimum return, 2. it caps the maximum return, and 3. it bases market return on the average index value over the whole time period instead of just an average over the last year of the GIC. For the 3-year MPGIC, currently the guaranteed minimum return is 0.5%/year and the maximum additional market-linked return is 20%. Once again, we’ll try to...