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February 08, 2012

Amazon to open real-world store this year: report

Amazon doesn’t need any PR bumps, but let’s give it one anyway, shall we?

A_com_logo_RGBMy favourite Amazon story goes like this: one weeknight in 2010, I caught a late-night showing of The Social Network. Certainly, it was the year’s best movie, and so inspired was I that I came home and said, Hey, I oughtta read the book that was made from.

So sometime after midnight, well into the a.m., I placed an order for Ben Mezrich’s “The Accidental Billionaires.” Before the end of the next work day, it was at my door.

I’m not a paid Amazon advocate, just a fan of its convenience. So why, then, would a service as punctual as the web retailer actually open its own bricks-and-mortar store?

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Posted at 12:36 PM in Consumer news, Current affairs, Shopping | | Comments (0) | TrackBack (0)

February 02, 2012

Is the retirement age going up, no matter what?

Just a few days after Prime Minister Harper's promise/threat to rework the federal retirement income system by monkeying with Old Age Security, the Conservative government seems to be moving into damage control. Who can blame them?

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The government's opponents are having a field day mauling such a backhanded attempt to balance the budget.

NDP finance critic Peter Julian has been the most vocal, arguing the Conservatives would rather spend millions on fighter jets and prisons rather than support Canadian seniors.

Posturing aside though, if Harper's government was to announce next month that the age at which people will be eligible for OAS was going to increase from 65 to 67 over the next 15 years or so, would you take to the streets?

I doubt it.

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Posted at 06:43 PM in Economic news, Pensions, Personal finance, Retirement | | Comments (71) | TrackBack (0)

January 31, 2012

Is there a better way to handle student loans?

Students and workers seeking retraining are borrowing extraordinary amounts of money through federal loan programs, potentially putting a huge burden on the backs of young people trying to kick start careers.

AdThe government-issued loan program's costs to taxpayers, including provisions for interest relief for unemployed graduates and a default rate of more than one dollar in eight, is somewhere near the $20 billion mark, according to various estimates. 

Clearly, graduating in the weak job markets of 2012 is going to be challenging for a student carrying, say, $40,000 in debt.

Is there a better way? Well, things are certainly different in Australia, for instance.

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Posted at 09:21 AM in Economic news, Education, Personal finance | | Comments (21) | TrackBack (0)

January 25, 2012

Why it's so tough to be a decent investor

How investors go about making decisions when the going gets rough can have long-lasting implications, especially with bias and emotion working overtime.

AdThe field of behavioural finance has shown that most of us can’t be counted on to take the most logical, rational route when it comes to money.

We’re overconfident and short-sighted. We tend to overreact to information, sell too soon and hold on to losers too long. The list goes on and on.

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Posted at 08:51 AM in Behaviour, Personal finance, Science | | Comments (1) | TrackBack (0)

January 24, 2012

Lower-income workers should join workplace pension plans: report

Economists frequently assume that employees “pay for” employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages.

AdWages and fringe benefits are generally perfect substitutes, so that an additional dollar of wages should substitute for an additional dollar of fringe benefits and vice versa.

But that's not necessarily true, says tax analyst Eric Toder in a recent brief.

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Posted at 12:01 PM in Behaviour, Pensions, Personal finance, Retirement, Workplace | | Comments (15) | TrackBack (0)

January 23, 2012

How to convince your brain to spend less

Stuck in a rut financially? Just can't seem to save a dime?

AdWhen it comes to money, it all about developing good habits, reports David Krueger, author of The Secret Language of Money.

To prove his point, he offers this example of how researchers at the University of Hertfordshire devised a study to get people to break their usual habits.

Each day the subjects chose a different option from poles of contrasting behaviors, e.g., lively/quiet, introvert/extrovert, reactive/proactive, and switched things around. An introverted person, for example, would switch around for an entire day.

Additionally, twice weekly, they had to stretch to behave in a way outside their usual life pattern to eat and read something they would never have otherwise chosen.

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Posted at 10:31 AM in Behaviour, Family finances, Personal finance | | Comments (0) | TrackBack (0)

January 19, 2012

Should public-service employees pay more towards their pensions?

In case you missed it, this week marked the most recent skirmish in a much larger battle to bring burgeoning public-sector compensation costs under control.

AdBasically, the federal government wants public sector workers to contribute more towards their pensions, largely so you and other taxpayers don’t have to. Depending on whose numbers you use, there isn’t going to be enough in the vault otherwise.

It’s clearly a big shortfall and the fiunding gap is growing. The C.D. Howe Institute warns that the unfunded pension liability for federal workers is some $80-billion higher than noted in the public accounts.

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Posted at 08:16 AM in Pensions, Personal finance, Retirement, Unions | | Comments (46) | TrackBack (0)

January 10, 2012

Does it matter how much your friends are worth?

Growing up, I had very little idea how much my parents were worth (although I knew it wasn’t much) nor where any of their friends stood.

AdNow, however, there are stacks of web sites like NetworthIQ and Mint that allow just about anyone to post their net worth (the number you get when you subtract what you owe from what you own) and compare it with others.

Some do it anonymously, while others post more details along with a history of their spending to provide a bit of context.

But their major purpose is the same: To draw attention to their nest egg, highlight any progress they’ve been making, and help the less fortunate do a little reflective benchmarking. Here’s a recent example.

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Posted at 09:53 AM in Compensation, Family finances, Personal finance | | Comments (5) | TrackBack (0)

January 09, 2012

Is Ontario's recent tuition fee subsidy a good idea?

At around $6,500 a year, Ontario has the highest average university tuition in the country. However, it looks like the Liberal government is going to make good on its promise to do something about that.

AdUniversity students can save as much as $800 per term if their parents' annual income is $160,000 or less although those enrolled in college-level certificate or diploma programs will see only about half ($365) that.

This new grant is based on the average undergraduate arts and science university and college tuition in Ontario -- which translates to roughly a 30-per-cent reduction for about 310,000 Ontario college and university students.

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Posted at 08:05 AM in Economic news, Education, Personal finance | | Comments (3) | TrackBack (0)

January 03, 2012

Is Canada's real estate bubble about to burst?

Canadian home prices are now showing many of the signs of a classic bubble, according to a recent report from Bank of America Merrill Lynch.

AdFactoring in record low mortgage rates, the housing market nationwide is at least 10% overvalued, say Merril economists. More importantly, under more normalized interest rates, home prices would actually look about 25% overvalued based on current prices, they estimate.

“In our view, the housing market is one of the most vulnerable sectors to this weakening economic environment, showing classic signs of over valuation, speculation and over supply,” says the report. “We are not calling for an all out rout in the market — but caution is now decidedly warranted.”

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Posted at 11:29 AM in Economic news, Home buying, Housing prices, Personal finance, Real estate | | Comments (44) | TrackBack (0)

December 30, 2011

Boomerang kids continue to fill up parents' nests

It's no secret that today's young adults study longer, marry later, and earn their own keep more slowly than the previous generation. And when they do eventually leave, they come back -- sometimes more than once -- after university, between jobs, or after a divorce.

AdStill, it’s a bit surprising to hear that almost two thirds of parents are providing support to their adult children, ranging in age from 18 to 39, according to a National Endowment for Financial Education study.

Not wanting to see their children struggle, the bulk of parental assistance extends to housing, living expenses and transportation costs. Although some concerned parents are also offering assistance for insurance coverage and medical bills.

According to NEFE, here’s how the family wealth transfer breaks down:

  • 50 per cent are providing housing
  • 48 per cent are helping with living expenses
  • 41 per cent are aiding with transportation costs
  • 35 per cent are providing insurance coverage
  • 29 per cent are handing out spending money
  • 28 per cent are helping with medical bills

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Posted at 10:03 AM in Family finances, Frugal living, Home buying, Personal finance | | Comments (8) | TrackBack (0)

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AUTHORS
Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...

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