Churned: Scotiabank Scene Visa

Welcome back to The Fake Cheap.  It feels good to get back into the blog, I think I last posted in February, but who is counting?  I thought I would add another cc (that’s credit card for anyone not fluent in personal finance) churn, especially since my first churn article seems to also be my most popular post ‘round here. Hopefully someone got that Counting Crowns reference?

Anyway, yes I churned the Scotiabank Scence Visa as the title says, and it did take a while for the plastic to melt down and turn to a delicious fatty tasting butter…ok, so what I actually did for this churn was to sign up for the card, strictly for the sign up bonus, which was enough scene points for 5 free movies!!!  I know, I couldn’t believe it either.  These 5 free movies have a value of about what, $60-$70, I think it’s about $12-$13 per movie ticket these days, well for a “normal” ticket without the shaking seat and the smells,or whatever else they have added now.  Some of you might be thinking who would waste all this time for about $60 bucks?  (Especially any Americans reading, and out of the thousands reading, I’m sure someone is American, our sign up bonuses here in Canada are really just a fraction of what is offered to you)  First I would say, it really took very little time, (less time than writing this article) and second I would say it took me about 30 minutes, so $60 tax free, for 30 minutes of work?  Yes please.  Maybe some of you are underwhelmed at this, because there are better offers out there, and there are, but I felt like hitting this one, plus some offers are better at other times, so you have to time it right because some of the sign up bonuses you can only get once, like the a fore mentioned TD Aeroplan visa I do believe.

So this churn went pretty well, I signed up for the card, it arrived, I believe the scene points were awarded on my first statement, after my first purchase, no dollar amount attached, so that was nice.  Normally you have to spend like $500 over 3 months or something like that, but this was like, nope, buy something..anything, and slap it on this card and BAM!! 5 free movies…on the next statement.  So that was a piece of cake.  Another nice thing about the reward being scene points, is that you could probably cancel the card immediately after you get awarded the points, and since scene points are separate from the cc, you probably wouldn’t have any issue.  What I did was actually held on to the card for a bit, and then cancel it, which was also no real hassle, I just called the number on the back of the card, and said I would like to cancel, and they were like “ok”, I don’t even think they tried to get me to stick around.  And that was it, a quick application for the card, a call activate the card, and a call to cancel the card, maybe 30 minutes work.

How do you get to qualify for these credit cards?   Well you need decent, credit, not even  good credit.  How do you get decent credit?  By following my blog! Pay your bills on time, don’t rack up debt, put something on a credit card once in a while, pay it ALL off  each month so you don’t pay any interest, and you WILL qualify for most of these offers.  Credit isn’t something I’ve spoken much about, but I assure you, there are many other great PF blogs around, maybe check out my blog roll up there on the right, that do discuss credit, and I hope to touch on it more in the future.  You can also get your credit report via Equifax or TransUnion, for free once per year I believe, but ask them, not me.  It should also be noted that if you tend to max out credit cards quickly, then churning likely isn’t for you.  If you end up paying interest on a thousand dollars or two you’ve racked up on the card, any sign up bonus “profit” will be eaten up by the interest quite quickly.

Remember, always be ready to churn, or else let that cash burn!

Net Worth Update: January 2017

Welcome back to The Fake Cheap, your 4th favorite (at least, I hope) personal finance blog and my first post of 2017.

What is Net Worth? It is simply your assets minus your liabilities, find our more here.

It is that time once again, my semi annual net worth update, I’m going to try to update my NW each January and July.

First, lets reflect back and have a look at my Jan 2016 net worth, which was $115,000.  This is the most recent figure I have provided, although I have still been calculating my NW every two months on my own.

If you are new to recording your net worth, just one net worth statement isn’t super helpful.  It will show you where you are at presently, but for tracking your own, I suggest calculating it quarterly, since this will help keep you motivated by seeing an increase (hopefully) over each  quarter.  If you find that too tedious, you calculate it semi-annually instead.  Or if you really enjoy crunching the numbers, you can also add it up hourly!  I kid, I kid.

Back my own story:  January 2017: net worth $142,000 .

Change from Jan 2016: + 23%  or + $27,000 Amazing!  Pretty darn good, if I were to toot my own horn, and of course I did this while only making small “sacrifices” to my lifestyle, I am The Fake Cheap, remember.

Note that this number is much more than just investment returns (which I estimate at about 8% for us for the year, as per my annual statements that have started to trickle in).  this includes the amount of debt we paid off, the money we put into RRSPs and TFSAs, and other things like our tax refund (which largely went to pay off debt), increase in home value (as per our tax assessment).  Find out more here if you want to know more about how to calculate your net worth.  There isn’t one right way to calculate your net worth, but there sure are some wrong ways!

 

Questions you may have (I’ve left these questions from a previous posting, they aren’t directly related to the above post, but you may find them interesting):

You are off by 2K from your quick calculation from your actual amount, what could cause this?

I would say much of this would be accounted for by 2 main factors: cash we happened to have on hand at the time I calculated my net worth and the remainder would be due to increases in investments.  Even though the Canadian markets are down, other areas are not, also dividends are still being paid by my investments, and mutual fund disbursements also normally occur at calendar year end.  I bought more investments/mutual funds this year, that generally means more disbursement at year end.

Why are you paying off debt and withdrawing from your line of credit at the same time, that don’t make no sense?!

Good question, but work on your grammar.  I could have just as easily made minimum only payments to my low interest rate credit card, and invested the rest for likely a better return.  However, I went the route I did because I will still have this debt at the end of the low rate offer (over a year from now) and yes, there could be more of these offers before this one expires, but there is no guarantee of this.  So yes, I would agree I could likely be doing even better with my money, but I’m The Fake Cheap, remember?

Please leave a comment, a question or a cookie below.  And if you found this post at least half interesting, a like would be nice.  Likewise if you found it a huge waste of your time, I want to know about that too.

Stay tuned, another super fun post is coming in just a few days!  Shocking!!!

Do you want to play a game? How long would your money last?

You said that using the voice of that clown doll from Saw, right?  If not, try again, it is mandatory.

This is a fun game to play, well it is if you like personal finance, and we know you like personal finance, since you are here, right?  So let’s play.

So what you do is first of all add up any savings/investments you have, which is quite easy to do since this information is found in your net worth.

Then you have a look at all your monthly expenses/bills.  For this game I like to calculate any loan payments as the minimum amount, and I would also remove our daycare expense, also no more aside from fancy restaurant meals (which we don’t have many of anyway.)

Then you imagine that you (and your spouse/partner, if applicable) immediately stop receiving any sort of income, and just live off your existing savings and investments.  For simplicity, I don’t bother trying to factor in returns on investments or employment benefits, etc…just straight up how long until we need more money once what we have, or roughly have, runs out.   With that being said…lets play!

So my (our) current savings/investments is about 68K

Our monthly expenses for the use of this game I put at $2,400.  I got to this figure by using the lowest payments for lines of credit, credit cards, etc and day care is no longer an expense, the only other change I would make to my expenses is no more restaurant or fast food meals and no more buying coffee out, also much less gas needed for cars, and we would also stop RRSP and TFSA contributions.  The bulk of the $2,400 comes from my fixed bills like the mortgage payment, and also largely from the monthly grocery bill, the reminder is other fixed expenses like the utility bill, and maybe a sliver of spending money

So we can see that if both my wife and I had no income starting immediately* we would be A-ok for about 28 months.  (68K/2.4= 28).   I thought it might be a bit longer than that, but it is what it is.

Maybe you think this is a stupid game, and you want to make your own rules.  Well go ahead!  Either way send a comment my way with your thoughts and results, maybe you could stay afloat longer than The Fake Cheap.

 
* Yes, I realize this is an extremely unlikely scenario due to severance from our employers and likely payments from Canada’s Employment Insurance program, and also likely increased government child benefit payments, but it’s just a game, remember?

The Way Everyone SHOULD Be Saving for Retirement

So as you may know, I am a huge supporter of not only saving for retirement, but saving for early retirement.  Not only does the saving have all sorts of benefits for the individual saving, such as having money for emergencies, health problems, lay offs; it also teaches just a bit of discipline which can come in handy in a financial pinch if it is ever needed.  It also makes us buy less crap, and the world needs less crap.

I was thinking the other day what if instead trying to get everyone on board to do the usual, and start putting money away at 40 or 50 or whatever you want to call a typical age to start saving for retirement (probably closer to 50); well what if the reverse was the case?   That is, we DID actually all start saving at a nice young age, we would all have a uuuuuggge nest egg by the time we reached 50.  Let me explain further.

Let’s say we use age 23 at a starting point, since most people have graduated or are starting their working career by then.  And let’s use a monthly amount of $375 per month, certainly not a small amount of money, but not really a huge amount either.  Now here comes the best part: this is how EVERYONE STARTS out in life, and if you want to opt out of this, or lower your amount you can, but you need to take that ACTION, and let’s face it, people are generally lazy, actions are not taken.  So basically what we’ve done is instead of trying to attempt to get people to voluntarily save money for retirement (which is working about at about a “meh” level); we have moved to a model where everything is set up for you and steps are needed to AVIOD saving for retirement.  Lets also add in the further deterrent that if you opt out of savings for a calendar year, then you loose the ability to contribute the amount later.  You know wile we are at it, lets make this an “ULTRA TAX FREE ACCOUNT” so you get the best of the RRSP and TFSA all in one shot.  For anyone not familiar, you would get a tax deduction for the amount contributed, and the amount would grow tax free, AND the amount would not be taxable on withdraw. What’s not to like???

 

Let’s run the numbers and see where this gets us.

So at a kind of whimpy 4% annual retrun, here is how much money we would ALL have at age 40 ,50 and 60:

40 –  $108,580           50 –   $215,735        60 –   $374,352

And at a 7% return:

40 – $143,179.     50 – $345,799.   60 – $744,348

And buckle your seat belts if we really knock things out of the park* and reap a 10% return:

40 – $190,669.  50 -$569,496.  60 – $1,550,000 (ok even I wasn’t expecting that)

*The average 30 year return of the S&P 500 is actually 10.98%, as per awealthofcommonsense.com.  For those of you who do math at the the speed of a sloth, 30 years isn’t too far from 27 years, the time from age 23 to age 50, so these numbers are not unpossible.

So looking at those numbers, yeah I think everyone would be fairly set, unless you CHOOSE not to be, instead of having to take the initiative to choose to be.

Some final thoughts and questions:

Don’t forget that under the “ULTRA TAX FEE ACCOUNT” you pay no taxes on any of these funds!

I hope you take away the power of compounding interest.  The biggest one is probably the 10% return has over QUADRUPLE the returning power of the 4% return over the 27 year period, even though 10% is only 2.5 times  4%.

$375 a month, that’s a lot of money I can’t afford that!   

Look at those results, you can’t afford NOT to afford the $375. But seriously go and read a few of my other posts on saving money or any of the other great personal finance sites about saving money, it’s much easier than you think.

What if someone wanted to take their money out or stop paying into this?

Well they can.  But it would be unwise if you stop early…again look at those numbers.  And you would also loose the ability to contribute more in the future to catch up.

This isn’t fair…what if I got a 4% return on mine, and my friend got 10% on theirs, they would have more money!

Yes, life is not fair.  I don’t get into actual investing much on my site, but take on some risk and reap the rewards.  Again search around for investment originated sights.

I wish this was in place now so I can do it!

YOU CAN do it now, call your bank, seriously, like right now, and talk to them about putting away $375 per month. Of course this won’t be the ULTRA TAX FREE ACCOUNT, but it will be the next best thing.

How could the government afford to not collect taxes on all that money?

Well the government would SAVE money in the form of lower OAS and GIS payments they make now.  I will fully admit that I’ve not done any research on this, so maybe it would be a loss..maybe it would be a gain?  Please feel free to conduct your own research.

Thanks for tuning into The Fake Cheap and taking a few minutes to listen to a little of my outside the box thinking.  I think the world needs more outside the box thinking.

What do you think?  Could a system like this ever work?  Are there more ways this could be improved?  Please share your thoughts or comments below.

Jan 2016 Net Worth Update…in September?

I had no idea that I never posted this so here you go about 9 months late, my bad!  I am going to start getting posts up again, maybe as soon as tomorrow so run, don’t walk to my blog next time!

It is that time once again, my semi annual net worth update (yes, it is 2 months late, thank you)

Jan 2016 net worth: $115,000
Change from July 2015 + 0%. (Actually a small increase, but not large enough to worry about)

Change from Jan 2015 + 12% Sweet..I’ll take a yearly return of 12% everyday of the week!

So we are up about 12K year over year.  I’m happy with that especially with the downturn in the Canadian market over the last few months, where we have a good chunk of our investments.  Yes,  we are diversified internationally, but still the majority of our investments are based in Canada.

Does the number make sense for us?  Let see, nice tax refund of $4,000 last year, house went up about $3,ooo in value as per our tax assessment.  We invested about $6,000 in RRSP and TFSAs, and also paid off about $5,000 in debt.   We also actually withdrew about $4,000 from our line of credit* for home renos.  Quickly adding up the assets I just named 3+6+5 = 14 and  subtracting the 4 = 10K, that is reasonably close to the 12K increase I found, so yes those numbers seem to jive.  Remember when I’m doing my net worth calcs, I don’t sweat the small stuff, and I recommend you don’t either.   This isn’t an income tax audit, just some numbers to show you are (or are not) on the right track.

*The balance of this was immediately transferred to a low interest rate offer on a credit card.  And by low rate I mean less than 2%.

Questions you may have from the paragraphs above:

You are off by 2K from your quick calculation from your actual amount, what could cause this?

I would say much of this would be accounted for by 2 main factors: cash we happened to have on hand at the time I calculated my net worth and the remainder would be due to increases in investments.  Even though the Canadian markets are down, other areas are not, also dividends are still being paid by my investments, and mutual fund disbursement also normally occur at calendar year end.  I bought more investments/mutual funds this year, that generally means more disbursement at year end.

Why are you paying off debt and withdrawing from your line of credit at the same time, that don’t make no sense?!

Good question, but work on your grammar.  I could have just as easily made minimum only payments to my low interest rate credit card, and invested the rest for likely a better return.  However, I went the route I did because I will still have this debt at the end of the low rate offer (over a year from now) and yes, there could be more of these offers before this one expires, but there is no guarantee of this.  So yes, I would agree I could likely be doing even better with my money, but I’m The Fake Cheap, remember?

They Bought A Zoo, We Just Visited

I’ve heard a lot of people talk about how it cost their family of three or four “$75 easy” or “about $100″to go to the city zoo.  So the good old Fake Cheap Family headed to this place called the zoo to see just how expensive it really is.  The results were shocking!

For this exercise, we are going to compare a typical family with the Fake Cheap Family.

Admission

For this facility the price is $15 per adult and $11 per child over 3, under 3 is free.  Assume a family of 3 with one child over 3, so price is $41 just to get in the door.  Since Typical Family’s child probably wont want to walk around for the whole 3 hours, they better rent that zoo stroller for $8.  Why would they want to lug a stroller all the way from home?  Up to $49.50.  Ok, still a long way from the $75 mark.

The Fake Cheap Family spent $28 to enter the zoo.  (We stumbled on 2x $1 off coupons for adults, and our child is under 3)  We also managed to bring a stroller from home.

Food

Since the Typical Family will pend 2 or 3 hours at the zoo, they need to eat there right?  So of course the zoo food stand is hit, where hamburger start at $5.75…and a staggering $6.25 for a cheeseburger, and of course Typical family’s little one will want cheese.  Your kid isn’t the only one hungry, so are Mom Typical and Dad Typical, so they will each have a hamburger, but they can all share a large fries at $3.75 to save some money can’t they?  Drinks, yes drinks too, a nice bottle of water (*shutter*) for everyone at $1.25 each.  Lets not forget that ice cream stand conveniently located next to the food stand, and junior wants an ice cream at the zoo, and they can’t go to the zoo without getting an ice cream, who would do that?  $3.25 for the ice cream, Mom and Dad have opted out here.  Lets see that is a staggering $28.50 spent on food.  Our running total is now up to $78.00.

The Fake Cheap Family spent $0* on food.  We packed a snacks for everyone from home.  yes, it took a bit of prep, but we saved $28 for giving up a bit of convenience.  The Fake Cheap Family has still spent only $28.

The Gift Shop

In fine European fashion, this zoo forces you to exit via the gift shop.  And since Typical Family’s little one wants a stuffed animal of pretty much every creature they just saw, they can’t just not get any, right?  And they don’t go to the zoo everyday, so why not get something?  A stuffed capybara, another trinket and $16 lighter, you finally leave the zoo.

The Fake Cheap Family did not purchase anything at the gift shop, we were smart enough to distract Fake Cheap Jr with a book we brought along while we swiftly made our exit.

Total Cost

Typical family spent a total of $94 at the zoo!

The Fake Cheap Family spent $28.  A $66 savings!  Even if you want to include the cost of admission of $11 for a child over 3, and no coupons, our total goes to $41.  Still way under half of typical family spending.

*Yes, I realize the food we brought from home still cost something, say $4.  Again we are still way under half the cost.

How can I save money when my family goes to the zoo?

Obviously the biggest and easiest area to save here is the food.  And don’t give me that vacation excuse!  You can still go to the grocery store when you are on vacation, in fact it is a regular stop on most vacations for the Fake Cheap Family.  As for the gift shop, most times, we buy nothing there.  But even Fake Cheap Jr does occasionally, very occasionally, get some sort of reasonably priced souvenir.  But it is ok to say no to your little one.  I agree its not easy, but it must be done.  So plan ahead, pack a snack/lunch, throw that stroller in the trunk and let the savings begin.

Annual savings for The Fake Cheap family: $66 per zoo visit.  Since we only go once a year, and I think most families also go once a year, we’ll call the annual savings $66.  In the course of the year, not a huge number, but it is a huge number considering the ease at which these savings take place, and the short time frame (3-4 hours) the savings take place.

 

The Fake Cheap Rating.
The lower the stars, the cheaper I was/am. The higher the stars the more “fake” cheap I am/was.
Not much fake cheapness here. I could probably go to 1 star. Just good old saving/not spending money.

July 2015 Net Worth Update and Some Blog Tweaks

It’s that time again or the good ol’ NW update.  Enjoy.

July 2015 Net Worth: $115,800

Change from July 2014*:   +$20,000  +21.1%    NICE! I’d like to see this number every year.

Change from Jan 1 2015:    +$12,400   +12%      A sweet six month return indeed!

What is net worth?  What does it mean?  How do I calculate mine?  Find that information here.

How did I increase my net worth by over 10K in just six months?  Honestly, I didn’t do much, but there were two big asset increases that happened to come into play during this period.  The first was our tax refund came in at about $4,000 combined, a large chunk of this return (about $1500) is from our RRSP contributions, I haven’t spoken much about investments and RRSPs yet…in good time I will.  The “trick” for the tax return to reflect on your net worth is to apply it to any existing debt you may have or invest it and make it an asset, in other words, don’t just go blow it.   The other big asset mover was the value of our home, I use our tax assessment for this number (yes, I know this is generally understated) this also went up a bit more than $4,000.  Other than that, just our usual RRSP, TFSA and RESP contributions, we didn’t actually pay down much debt due to our ongoing home renovations.   Remember, you can increase your net worth by either increasing your assets or decreasing your liabilities.  I do a combination of both.  Which is right for you?  That depends on your situation.

As for the blog, I’m going to update a thing or two as follows.

For any post where I mention saving money on something, or maybe I should say spending less on things, I’ll add in a clac to show the savings compared to the dreaded Oblivious Consumer on said item/scenario over the course of a year.  This will show how this can help your bottom line, and it should (hopefully) show how just putting a little effort into a few things can make a significant difference for you.

Also I’m going to update the About section.  I’ll do this by adding on a new section to the existing text, since I’m not changing much, but want to expand it a bit more, mostly just adding a bit more about my long term goals.

I have a ton of great topics that I want to cover, I have over 70 drafts (and by draft I mean a paragraph or two) in waiting.  It is just a matter to finding the time to pump those bad boys out.

*I’ve decided to publish my net worth to the blog in January and July only, so the May update cannot be found here.

Do you track your net worth?  If so, do you do anything differently than I do?  Let me know!  Thanks for stopping by.