Former professional poker player and author of Thinking in Bets , Annie Duke has another interesting book called Quit: The Power of Knowing When to Walk Away .  Through entertaining stories and discussion of scientific research, she makes a strong case that people aren’t good at deciding when to quit relationships, jobs, and many types of life goals. In one interesting story, “Blockbuster, when presented with the opportunity to acquire Netflix, refused.”  We now know that Blockbuster would have been better off focusing on streaming and giving up on renting physical copies of movies.  Of course, if they had tried to do both, their own executives responsible for renting movies might have killed off streaming to protect their own jobs and bonuses. Other interesting and tragic stories concern those who failed to give up on climbing Mount Everest when it became too dangerous, and the many people who have finished marathons on broken bones “ Because there’s a finish line ” they...

There are many ways to hide banking fees so that customers don’t notice them.  One way is to quietly help yourself to a couple percent of people’s mutual fund savings every year.  Another is to tack a foreign exchange fee onto the exchange rate when customers exchange currencies.  I learned about a new one recently with credit card payment plans. Many of the big banks offer plans that allow you to take a credit card purchase and pay it off over 6 months to 2 years at a low-sounding interest rate.  The trick is that they add fees that also seem small, but they add up. One example is TD’s credit card payment plan that allows you to pay for large purchases over 6 months at zero percent interest for a one-time fee of 4%.  This sounds way better than paying standard credit card interest rates.  However, looks can be deceiving. Suppose you make a $600 purchase.  With the 4% fee, this grows to $624.  At 0% interest, you could use the payment plan to pay ...

It’s amazing how trivial it is to invest well, and yet we need to know a lot to be able to avoid changing course to some inferior strategy that sounds good but isn’t.  I did poorly with my own portfolio for about a decade before smartening up, and I’ve done well for my mother, sister, and mother-in-law, but I haven’t been able to help most others who ask for advice.  In most cases, I end up watching helplessly as they make choices with poor odds.  It would be easier if saying “just buy VBAL” were persuasive. Here is my review of a book on homeownership: House Poor No More Here are some short takes and some weekend reading: Marc Cohodes holds nothing back in his analysis of Sam Bankman-Fried and FTX.  I doubted that I’d end up listening to the entire podcast, but I couldn’t stop once I started. Justin Bender explains U.S. foreign withholding taxes (FWT) on various types of ETFs that hold U.S. stocks.  This is an important topic, because FWT on dividends can be ...

Romana King’s book House Poor No More is a comprehensive collection of useful knowledge for all aspects of owning a home, including detailed lists of home maintenance tasks, improvement projects, and much more.  The writing is upbeat and engaging.  To the author’s credit, she quantifies the costs of just about everything.  Unfortunately, this book was written just before interest rates shot up, so several numerical examples look like they are from the “before times” (only 9 months ago).  As has been common in our society for many years now, the author is too positive about taking on large debts.  Those who took on far too much debt while ignoring the possibility of interest rate increases are now facing significant pain. Some Positives As a long time homeowner, I thought I had a good handle on home maintenance.  However, King’s comprehensive list of home maintenance tasks covers many areas I know little about.  The many things to check and possibly re...

Early this year I got a new U.S. dollar credit card but had a hard time getting a reasonable credit limit.  After some trouble, I managed to get the bank to increase the credit limit a little.  This week I got a popup after logging in to my online banking telling me I was pre-approved for another US$4000 increase.  This happened shortly after I had maxed out the card and then paid it off.  I guess they just wanted to see more of a track record on this card before upping the limit, even though I already have a multi-decade track record with another credit card at the same bank.  I was amused when I clicked to accept the pre-approved credit limit increase and got a message saying that they would let me know whether they would “approve my request.”  Later, another automated message congratulated me on getting “my request” for a higher credit limit approved.  What I’d like to know is how often these “pre-approved” credit limit increases get rejected. Here ...

It’s a strange feeling to watch the beginning of the carnage in the housing market and know that it must get much worse if my sons are to have a chance to buy a home for a price they can afford. Here are my posts for the past two weeks: The Inevitable Masquerading as the Unexpected Inflation Porn Here are some short takes and some weekend reading: Doug Hoyes explains why he does “not expect a significant rise in homeowner insolvencies until mid- to late-2023.”   A judge has ruled against CRA in three appeals of gross negligence penalties, not based on the merits of the cases, but because of CRA’s “egregious” behaviour .  From the judge’s ruling, it seems that CRA is willing to flagrantly violate court rules in cases where they believe taxpayers are guilty of gross negligence.  A powerful government agency such as CRA has no business engaging in such gamesmanship.  If CRA is correct about the conduct of these taxpayers, they should follow court rules and argue the me...

We’ve certainly heard a lot about inflation in the past year or so.  Despite the Bank of Canada’s efforts to fight inflation by raising interest rates sharply, we still see headlines blaring that inflation is very high.  What’s behind all this? Here is a chart showing the official Consumer Price Index (CPI) for Canada since 2020. We see that inflation was low in 2020, prices rose sharply during 2021 and the first half of 2022, and prices have actually dropped slightly in the past 3 months.  However, this is at odds with headlines still screaming that September inflation was still very high at 6.9%.  What gives? The answer is that we often measure inflation by comparing current prices (as measured by CPI) to what they were a year ago.  So, headlines about September inflation are measuring the change from September 2021 to September 2022.  Last month’s headlines focused on August 2021 to August 2022.  If it seems like the news is churning out stories wit...