After getting a rare haircut that was bad enough for me to notice, I was reflecting on the transition from barbers many years ago to hair salons today.  It used to be that barbers cut hair in about 5 minutes, it was inexpensive, and they did it mostly their way. You got to say how short you wanted it but not much more.  This state of affairs suited me.  Now that gender-based price discrimination in haircuts is gone, hair cutters feel the need to take 20 minutes clipping my hair a millimeter at a time to justify the high price.  Maybe we could go to a “fast cut” and “slow cut” pricing system so that I could get a simple cut quickly.  There are some women this would work for as well.  It used to be that women who wanted a simple cut were unfairly discriminated against when they had to pay the higher “women’s price.”  I would even pay today’s high price if I could just sit in the 5-minute cut chair with no waiting. Here are my posts for the past two weeks...

The great thing about managing other people’s money is that you can dip into it to pay yourself.  This might sound unethical or illegal, but it’s perfectly legal if the owners of the money agree to it.  I use the word “agree” in a technical sense here; you really just have to get people to sign a document that points to other documents that bury the details of how you pay yourself from their investments.  You might think that once people notice some of their money is missing, they would become wise to your scheme, but most people don’t notice.  You might think that once such schemes are exposed in the media, people will see that they’ve been had, but most people who read essays like this one just don’t believe it applies to them.  The sad truth is that millions of Canadians allow others to take their money this way. Average Canadians invest much of their savings in mutual funds, segregated funds, and pooled funds offered by banks, insurance companies, and indepe...

Back in the 1920s, George S. Clason wrote a set of pamphlets about financial success using stories set in ancient Babylon.  The book The Richest Man in Babylon gathers these pamphlets together and has sold millions of copies.  People learn better from stories than from simple facts.  This book’s interesting stories are a compelling way to internalize the basics of personal finance. The version I read had an introduction by Suze Orman.  In addition to commenting on the book’s enduring lessons, she observed that “every character in the book is a man.”  “That’s not a reason to dismiss the heart of the book.”  “If you find the gender bias annoying, just recast all the characters in a way that enables you to read and absorb the wisdom.”  In my case, I found the repeated references to slaves more jarring than the gender bias, but I agree about the financial wisdom. I won’t try to summarize any of the stories, but tales of kings, camels, captures and escapes...

Those of us not lucky enough to have employer defined-benefit pensions have to save up for a decent retirement.  You’d think the challenge would be over when you’re done working and saving, but deciding how to manage your investments and how much you can spend is a new challenge.  Fortunately, former chief actuary at Morneau Shepell, Frederick Vettese’s book Retirement Income for Life: Getting More Without Saving More (second edition) shows us how to proceed with “decumulation.”  He even provides free online tools you can use anonymously.  I reviewed the first edition , and now Vettese has added new material and made significant updates to this excellent book. Typical decumulation advice based on the 4% rule can fail.  Vettese goes through five enhancements to this typical advice to greatly improve the odds of having your money last your lifetime, without the need for any more savings. “Many industry experts and professional associations already endorse the enh...

Some people have heard that when a spouse dies, the surviving spouse gets a survivor’s pension equal to 60% of the deceased spouse’s CPP pension.  Unfortunately, the actual calculation involves many more steps, and the final amount of the survivor’s pension is often much less.  Here I pull together information from 3 sources to piece together how to calculate the amount of a CPP survivor’s pension. Unfortunately, there is so much bad and incomplete information online about CPP survivor pensions that I can't be certain that I have all the details correct.  I strive for accuracy, but don't rely blindly on my best efforts here. My main source of information is Doug Runchey’s Understanding the CPP Survivor’s Pension .  I used Frederick Vettese’s book Retirement Income for Life (second edition) to corroborate Runchey’s calculations (although they didn’t completely agree), and Kea Koiv’s Shedding Light on the CPP Survivor Benefit added extra detail for young surviving sp...

For those of us retiring without employer pensions, it’s a challenge to find the best way to spend the savings in our various accounts, a process called decumulation.  Most of us have RRSPs/RRIFs (or other tax-deferred accounts) and TFSAs.  Some of us also have taxable (non-registered) accounts.  Even after we decide how much we can safely spend each year, it’s not obvious which accounts we should spend from first.  Here I describe how I spend from my accounts.  It may or may not work well for people whose financial circumstances differ from mine. While working, our spending is usually closely linked to the income we declare on our taxes.  If we start with declared income and subtract taxes and savings, the rest is what we spent.  In retirement, it often doesn’t work this way.  If we spend from TFSAs or from taxable accounts, our spending can exceed the income we declare on our taxes.  This gives us some control over our reported income even ...

More stories are starting to come out about people in positions to influence vaccine rollout abusing their power to vaccinate themselves and their family and friends.  I assume that for every administrator who gets caught, a great many did the same thing but didn’t get caught.  This abuse is reprehensible, but predictable.  Fortunately, unless someone is actually reselling vaccine doses, each abuser’s incentive to break the rules goes away after the first offense.  Hopefully, we’re mostly through the loss of doses to corruption and we can move on with vaccinating health care workers and older people followed by the rest of us. Here are my posts for the past two weeks: Early Retirement Extreme Stock Tapering: Adjusting Your Asset Allocation Based on Market Price-Earnings Ratio Broke Millennial Talks Money Declining Spending as We Age Here are some short takes and some weekend reading: Josh Brown has one of the better discussions of the clash between Robinhood traders...