Not To Be Trusted With Knives

The Internet’s leading authority on radicalized geese

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Happy 5th Condo-versary To Me!

Mortgage

Five years ago today, I got the keys to my condo. And since five years was the length of my mortgage term, it meant I recently had to renegotiate my mortgage. Last year at this time, I was concerned because mortgage interest rates were higher than what I’ve been paying and I figured I’d end up with a higher rate when I renegotiated this year. As it turns out, mortgage interest rates dropped and I managed to get myself the same interest I’ve been paying for the past five years, which makes me happy because (a) it’s a low interest rate and (b) I have a spreadsheet where I track my mortgage payments, including “prepayments” (i.e., lump sums I pay in order to pay off my mortgage quicker),  to calculate how much I’ve saved in interest rates by doing so1 and the spreadsheet doesn’t have an easy way to change the interest rate mid-way through the mortgage, so I’d have had to have figure out some spreadsheet kung fu to have made the spreadsheet calculations continue to work and now I don’t have to. I probably should be happier about (a), but honestly (b) makes me quite delighted.

Stock Photography - Canadian Coins

Also, for the record, I have officially paid off 71% of my original principal (up from 53% last year). Which means I own 78% of my condo – based on the price I paid when I bought it. If I use the most recent assessed value, I own 88% of my condo. My new principal is less than 1/3 of my original principle. Math is fun!

If I make no more lump sums, I will be done with my mortgage in July 2024, making it 10 years to pay off the mortgage (rather than the 25 years that was my original amortization). The earliest I could pay it off without any penalty (i.e., if I paid the maximum allowable lump sums per year as early as possible in each mortgage year), I could be done by Jan 11, 2021 (i.e., 1.5 years from now – and on my birthday, no less!). Given the low interest rate, that doesn’t make the best financial sense (i.e., I could make more by investing any extra money I have than the interest rate I’m currently paying on the mortgage). But it’s still fun to do the math!

 

Image source:

  • Mortgage image was posted on Flickr with a Creative Commons license requiring a link to Got Credit.
  • Coin image was posted on Flickr with a Creative Commons license
  1. And also some scenarios to compare having bought the condo compared to if I’d continued to rent instead. []

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$65

Two of the items on my list of 101 things to do in 1001 days are:

56. save $500 in coins

57. deposit that $500 worth of coins into my 40th birthday savings account

I hit a bit of a snag in this plan in that when I moved last year, I moved into a place with no laundry facilities, so I had to start going to the dreaded laundromat, meaning that I needed my loonies and quarters for laundry. When you take loonies and quarters out of the mix, it really becomes difficult to save up much in the way of coins! But I decided to roll up all the dimes, nickels and pennies that I had in my coin jar, just to see what I had:

Rolled coins

That’s $65 worth of coinage, which, while not $500, isn’t too terrible.

The next step was to deposit this money into my 40th birthday savings account. But, as we all know, I decided to divert my 40th birthday savings account money into my dreaded students loans in my valiant attempt to be able to throw a “my student loan debt is all paid off” party by the end of next summer. So that $65 went to student loan paying-off-ness.

$65 closer to freedom.

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Real Estate – Ugh

So lately I’ve been reading a fair bit about the real estate market. As a kid, I was brought up to believe that when you grow up, you buy a house – after all, it makes more sense for the money you spend on housing to go into an asset you will own, as opposed to going into someone else’s pocket, right? I was also brought up to believe that education was very important and so I spent the first eleven years of my adult life pursuing that1. And the idea of buying real estate never even entered into the realm of possibility in those years, as I barely had enough combining jobs, scholarships, bursaries, and student loans to get by, let alone even think about investing in anything. And since I graduated, my financial focus has mainly been on repaying my crushing student loan debt and trying to build some semblance of an RRSP/pension – and, in the last two years, putting money into my Tax-Free Savings Account.  And though I’ve been pretty good at finding cheap rent, it’s always in the back of my mind that “you are putting money in someone else’s pocket!”  Hence, the thinking about, and reading about, the real estate market.

I mean, I knew that the prices of homes in Vancouver are absolutely nuts, but when I started to read more about it, I was surprised to learn how truly, ridiculously, extremely nuts they are.  A general rule for “affordable housing” is that your housing costs (including taxes and insurance) shouldn’t be more than 30% of your gross income. For example, if you make $50,000 per year, you shouldn’t spent more than $15,000 on your mortgage, property taxes, and insurance. Another way of looking at it is that, to be affordable, houses shouldn’t cost more than three times your annual salary2. Again, if you made $50K per year, your house shouldn’t cost more than $150K. And the thought of a $150K home anywhere near the Vancouver Lower Mainland is laughable. Even our shoebox-sized condos cost double that! Personally, I make more than $50K, especially when I have teaching gigs and contract work on top of my annual salary, and there’s no way I could find a home in this area that costs less than three times my annual income (and that’s not even counting my $1000/month student loans payments thrown into the mix).

And it’s not just me. Over on the Vancouver Real Estate Anecdote Archive blog (which I’ve been following for a little while), they posted a couple of graphs that illustrate the insanity of the market. This one illustrates exactly what I’m talking about:

Dashed lines = salaries (in % increase) and solid lines = home prices (also in % increase).  It doesn’t take a statistician to see that home prices have shot up dramatically compared to income. According to Stats Canada, the median family income in Vancouver in 20073 was $66,330.  That’s *family* income, not individual salaries.  And according to the Real Estate Board of Greater Vancouver, the “benchmark” price for a property4 in Greater Vancouver is ~$577,000. The benchmark price for a detached home is just less than $800,000, and the benchmark price for an apartment is ~$386,000.  So we are talking about nearly 9 times the median annual salary to buy a “typical” home, and 12 times to buy a typical detached house. Even to buy just an apartment, it’s almost 6 times the annual median salary – twice as much as an “affordable” home should cost.  Ouch.

And it’s this crazy house price-to-salary ratio that have people talking about a housing bubble, poised to burst. The Canadian Centre for Policy Alternatives recently issued a report that Canada is in the middle of a housing bubble. Then the C.D. Howe Institute issued a report that says the opposite5.  Though I’m not an economist by any stretch, I just look at these numbers and wonder how on earth people are buying houses?  Of course, low interest rates on mortgages (using very low down payments) have allowed people to do it, and lots of people are saying that it is rich foreign investors and/or drug dealers6 who are buying up the over-priced real estate.  But seriously, why would rich foreign investors continue to buy – and drive up the price of – Vancouver real estate when real estate in the US is so cheap?  And once mortgage rates go up, won’t those people who could only afford their mortgages because the interest rates were rock bottom be in trouble?  And if those same people put down only 5-10% as a down payment, and then prices drop by more than that (as is being predicted by some), won’t they owe more on the house than they could get even if they sold it?

As I have no interest in buying something that I can’t afford, especially given that the value of the “asset” in question could drop considerably (after all, it’s not putting money in your own pocket if the price of your house drops well below how much you owe on the mortgage), my plan is to continue to wait this thing out. I still have a fair way to go until my stupid student loans are paid off anyway, so I’ll just continue on my path of paying those down, balanced with putting some money aside in savings7 and emergency savings8.  Of course, if my dad would just win the lottery like he keeps telling me he is going to, all of this wouldn’t matter!

Image Credits:

Footnotes:

  1. perhaps I took my mom’s saying of “more education is never a bad thing” a little too literally? []
  2. I know I’ve heard this somewhere, but can’t seem to find a reliable source to link to on it. If someone out there has a good link – or if you think I’m totally mis-remembering it, hit me in the comments section! []
  3. the most recent number I came across []
  4. where “benchmark” = a typical property in the region []
  5. I would have linked to the C.D. Howe report directly, but their website is down right now, so I’ve not been able to read the report myself, only the news reports about the report []
  6. the latter who, presumably, aren’t reporting their actual incomes, thus making the estimates of income lower than they should be []
  7. granted, it’s not like I’m making scads of money in my RRSPs and TFSAs, given how much the market sucks, but I’m doing OK, considering []
  8. ‘cuz you never know when you might need it! []

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5 Random Things I Learned In the Last 48 Hours

  1. “O Canada,” as we know it, isn’t the original song. There have been different version and the line that was recently brought into question (i.e., “in all thy sons command”)1 wasn’t always in there.  Other lines have included “May stalwart sons, and gentle maidens rise,” and “”thou dost in us command.”
  2. You can build a computer on Apple.com that costs more than $125,000.
  3. Canada will be getting plastic money (instead of the paper we now use) by next year.
  4. Flu viruses can last on paper money for up to 17 days!
  5. No matter how many bowls of water you have sitting around the apartment, cats prefer to drink out of your water glass.
  1. though I heard on the radio that the Government of Canada, who proposed changing it, has already backtracked and said they won’t change it []

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More About Money

Piggy savings bank by alancleaver_2000.And speaking of cashola, I went and saw my RRSP person yesterday.  As per my new budget, I’ve increased my RRSP contributions by $75 every two weeks.  I also discovered that I could convert my Vancity VISA1) reward points to actual money that goes into my RRSP – so I got a cool $112 for free.  I heart free money.

As well, I decided to convert my Tax-Free Savings Account to a mutual fund so that it will at least (hopefully) make a bit of money.  Interest rates on savings accounts suck the big one, and since the “tax-free” part of TFSAs is that you don’t pay tax on any money you make from the investment, I figure I should actually make some money on the thing.  I was using my TFSA as my “emergency fund,” which you wouldn’t really want to tie up into a mutual fund (as you could end up having to draw on it when the markets are down and thus lose money), but now that I’ve built up some cash in my regular savings account that can be my “emergency fund,” I can think of the TFSA as more of a long-term investment.  I talked to my sister on the phone for quite a while last night so she could explain to me how she invests in stocks.  I still have a lot of learning to do before I’d be confident enough to do that, so I figure mutual funds for my TFSA is a good baby step in that direction.

Tomorrow, I’m calling the bank to increase how much I pay on my student loans by $150 a month.  All of this makes me happy.

And speaking of money, Nancy Zimmerman is posting money tips on her Money Coach blog every day this month.  You should check them out!

Image Credit: Posted by Alan Cleaver on Flickr.

  1. for the record, I have no relationship with Vancity or Vancity VISA other than that I’m a customer. I hear disclosure on blogs is all the rage these days. : []

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Net Worth Positive!

Canadian Money Queen on the 20 Vancouver BC by GoodNCrazy.Hey, remember when I said that one of my goals for 2010 is “hit a net worth of $0“?  Turns out I actually did that in the last few days of 2009.

I’ve been tracking my net worth since May using a handy dandy spreadsheet that I got from Sarah.  Thanks to my crushing student loan debt, my net worth has been in the negative for my entire adult life.  But now that I’ve been paying those suckers off for a bit more than 2.5 years, as well as working a big girl job where I make enough money to actually have such things as RRSPs, savings and even a pension, my net worth started becoming less and less negative.  At the end of November, my net worth hit -$5,677, so when I wrote my 2010 goals I knew that I’d be able to cross over into the land of positivity in 2010.  And then, sooner than I’d expected, a cheque arrived for a contract I’d done and *poof* – net worth zero (and beyond) achieved!

Hooray!

Image Credit: Posted by goodncrazy on Flickr.

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Expenses 2009, Budget 2010

I spent much of Saturday updating my finances in wesabe. I wanted to see where I’d spent my money and, ultimately, where I could save more. I’m notoriously cheap a pretty good saver – basically, I continue to live like a starving student1 despite having a big girl job and I pick up teaching gigs and contracts to supplement my income. I figure since I’m used to living on the cheap, why not continue that and save the difference/use it to pay off those damned student loans? But I know that I could save even more than I am if I actually look at where my money goes and then set up a budget2.

This is a pie chart3 that shows my top five spending categories for 2009:

Wesabe only shows the top five categories on the main graph; the “other tags” section includes all sorts of things including:

  • cell phone and Internet
  • clothing
  • recreation (e.g., hockey, running race registration fees)
  • gifts

Things of note from my 2009 expenses:

  • I’m well within the “you should spend less than 30% of your income on housing recommendation.”  In fact, my rent4 comprised only  11% of my total spending, and I didn’t spend all the money I made.  It works out to ~9% of my gross salary from my main job and ~7.5% of my gross income from all sources in ’09.
  • I spent almost the same amount on food as I do on rent.  This probably explains where the additional 15 lbs I’m carrying around came from.  About half my food expenses are from eating out.  This is waaaay too much.  I need to make friends with my local produce store again!
  • Electronics being so high in 2009 is an anomaly. I bought both my MacBookPro and my iPhone in ’09 and these aren’t expenses I anticipate having every year.
  • Transportation being so high is a bit of an anomaly as well, since it counts the down payment I put on my car this year.
  • I spent a lot more on clothing than I thought I did.  I shop almost exclusively at thrift stores5, so I get my clothing for a fraction of what they cost at real stores.  Yet I managed to spend $1,000 on clothing in 2009!  Granted, $350 of that was on shoes and $200 of that was for running shoes.  But still.  I think “clothing” is one category where I can cut down for 2010.  I’ve decided that I won’t buy any news shoes this year, except possibly running shoes if needed6.

So, basically, my two problem areas are clothing and dining out.  Cutting down on both of these will allow me to put slightly more money into my RRSP7 and increase my student loan payments each month.  And thus I might pay off my student loans before I turn 100 years old!

  1. e.g., cheap basement suite, almost  all clothing comes from thrift stores, most movie passes are free from contests, books come from the library []
  2. props to my friends Kim and Rebecca for sharing their budget Excel files with me! []
  3. I heart pie charts! []
  4. which includes my utilities []
  5. occasionally, if I’m feeling rich, I buy stuff at Winners! []
  6. and they will be needed if I do as much running as I’m planning to do this year []
  7. which I do automatically every two weeks []

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1999 was a good year for movies and I need more adventure in my life

Yesterday, Airdrie posted her answers to interview questions given to her by Keira-Anne, who had posted her answers to interview questions given to her… well, you get the idea.  Anyhoo, I took Airdrie up on her offer to interview people.  Here are her questions and my answers:

1.  What are five of your favourite movies?

Fight Club definitely ranks up there with one of my fav movies, as does the Matrix.  I saw both of those when they first came out before there was a huge amount of hype about them (especially Fight Club, I don’t think I’d even heard of Fight Club and we just ended up seeing it because we wanted to see a movie and nothing else playing that day looked any good).  Fight Club was so well written, well acted, well directed and it was unlike any other movie I’d seen.  Similarly, the Matrix was unlike anything I’d ever seen before – the special effects, which were created because they were actually needed for the plot and not just because they looked cool, totally blew me away.  But the thing that really clinches it for me with both those movies is that not only were they very entertaining in their own right, they both had really insightful social commentaries to make.

American Beauty is another one of my favourites – like Fight Club & the Matrix, it had a compelling story, amazing direction and thoughtful social commentary to make.

I don’t think I ever laughed as hard at a movie as I did when I saw South Park: Bigger, Longer & Uncut in the theatre, so that has to be on the list.  I remember sitting in the theatre watching the South Park kids sitting in the theatre watching Terrance and Phillip sing, “Shut Your Fucking Face, Uncle Fucker.” We all sat their in our seats in the theatre, stunned, thinking, “Oh my god, did they really just *say* that?” while, on the screen, the South Park kids sat in their seats in the theatre saying, “Oh my god, did they really just *say* that?”  I heart self reflexivity.

Interestingly, all four of those movies were released in 1999. Best year for movies EVAR!

For my fifth movie, I’m going with Zoolander.  As evidenced by the inclusion of the South Park movie on my list, I like stupid humour.  Usually stupid humour is only funny the first time around, but Zoolander, for some reason, stays funny no matter how many times you watch it.  And I’ve watched Zoolander many, many times and it’s just as funny the 20th time as it was the first time.  Or maybe I like it because I’m really, really, ridiculously good looking.

2.  You are mailed a box with $10K cash inside, and a note that says “Pay It Forward!”  What do you do?

I would use it to pay off some of my friend Z’s student loan.  Z did her Ph.D. along with me and, like me, accumulated a significant student debt. Unlike me, she did her Ph.D. while raising two kids on her own.  She’s very bright and very dedicated and she’s one of the hardest workers I know.  Even though she now has a great job that she loves, one doesn’t go into academics for the money and I’m sure that $10K coming off her student loan debt would be a welcome relief.

Damn, now I wish I actually had $10K to pay forward!

3. What was the hardest thing about your teenage years? The best thing?

Me, all dressed up for the high school semi-formal dance.

Me, all dressed up for the high school semi-formal dance.

I think the hardest thing about my teenage years was the crappy jobs I worked.  I knew that university was going to be expensive, so I had one (sometimes two) jobs throughout my teen years (actually, starting with my paper route at about age 8, I’ve always had at least one job!).  The worst of the worst was working in the brake part factory where my dad worked the summer that I was 19.  I worked midnights (which sucked) on a 400 degree oven that cooks the brake parts in the heat and humidity of a southern Ontario summer (which really, really sucked).  Oh yeah, and the material used to make the brake parts contained absestos.

The best part… hmm… I guess the best part was hanging out with my friends.

Erin, me (dressed for my role as Miss Casewell), Sarah (dressed for her role as Mollie Ralston), Darren.

From a high school performance of "The Mousetrap." From left to right: Erin, me (dressed for my role as Miss Casewell), Sarah (dressed for her role as Mollie Ralston), Darren.

Despite having jobs and a volunteer position, I didn’t spend very much time during my teenage years doing homework, so had a fair bit of time to hang out with friends.  Mostly at Tim Horton’s (there really wasn’t a lot to do in the town I grew up in).  The semester I had all the same classes as my friend Sarah – that was good times.  Or when Sarah & I used to sign ourselves out of class, claiming we were working on the “gifted” program conference (in later years, we’d sign out younger students too). Or the time I packed the entire cast of our high school version of “The Mousetrap” into my parents’ Jeep to go watch a performance of “The Mousetrap” in Toronto.  Or the time I packed about a dozen people into my parent’s Jeep in front of my friend’s dad, who was a *cop*, to go to McDonald’s.  Yeah, so I guess the best thing in my teenage years was packing way too many people into my parents’ Jeep.

4.  What makes you sad?

Lots of things make me sad:  My Granny passing away.  Seeing how sad my niece was when my family dropped me off at the airport at the end of my recent trip to visit them (I miss her a lot!).  Seeing my friends or family in pain.  The song “Hate Me” by Blue October.  The thought that I may never pay off my enormous student loans.

Fortunately, many things make me happy too!

5.  Tell us about the last time you had an adventure.

Hmmm, define adventure. 

Getting home from Mexico was a bit of an adventure.  The 12 Bars of Christmas is always an adventure.  Surfing in Tofino in Januar was definitely an adventure, but that was almost two years ago now!

Damn, I really need more adventure in my life!

And now it’s time to meme:

Want to get in on the fun? You can be a part of it by following a few simple steps…
Send me an e-mail with the subject line “Interview Me”
I’ll respond within 24-ish hours with 5 questions directed to you (I promise to try and be unique)
Answer the questions on your blog (or Facebook or MySpace) and link back to this original post
Invite others to participate by re-posting these steps

Also, email me if you any good ideas for an adventure!

Image credits:

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Climate Action Dividend

Here in BC, we are each getting a cheque for $100 from the provincial government.  It’s called the “Climate Action Dividend,” and you are supposed to put it towards doing something eco-friendly.  It feels more like a vote-buying scheme to me, ‘cuz really, what can you do with $100?  And I already have travel mugs to use instead of disposable cups, rechargeable batteries, canvas bags to bring my groceries home in instead of plastic bags,  etc. So anyhoo, I’m thinking of putting mine towards my laser eye surgery. I figure that not throwing out a pair of contacts, plus associated packaging, every month, and the packaging for contact lens solution (not to mention the energy costs of producing and transporting those contacts & solution) is eco-friendly, right? I mean, seeing as $100 is not going to buy me that eco-friendly Smart Car I have my eye on.

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This above all: to thine own eyes be true

So, I think I’m going to go with the expensive place for my laser eye surgery. I really did like the doc there and a few things about the cheaper place kind of freak me out. First, on their website they explain that the reason they are so cheap is because they do a “high volume” of surgeries. They spin it as “high volume = more experience = better surgery,” but “high volume” suggests “assembly line” to me. The second strike against the cheap place was an email exchange I had with them. I emailed to ask for their success rates and rates of complications, since this information is not provided on their website. The email I received back was atrocious. They provided limited success data and completely ignored my request for complication rates. Then they told me to phone if I had more questions, with the tone of it making me feel as if they were really put out by my having emailed. I’m sorry, but you are in customer service and if the customer prefers email, you should provide courteous, accurate answers by email and make them feel welcome to email back if they have more questions. And, for the love of all that is good in the world, your email should be professional. In their 9 sentence reply, they committed the following grammatical transgressions:

  • hyphenating “with-out”
  • hyphenating “thank-you”
  • spelling the word “merit” as “merrit”
  • not capitalizing the first word in a sentence (twice)

This email does not give me confidence in their clinic. I realize that it is not the surgeon who is writing such an atrocious email, but in my opinion, it reflects the unprofessional nature of the place1. In a last effort, I emailed back to ask, yet again, what their complication rates are. Their reply: “We have done over 46,000 procedures and we have never had a serious complication. The pre-operative screening eliminates those patients that might be a complication. Our turn down rate is about 4%. Phone if you have any other questions to [number redacted].” First of all – I didn’t ask if they had any “serious” complications. Their definition of “serious” may not be the same as mine. Twice avoiding my request for complication rates makes me feel like they are hiding something. Secondly, I don’t think they really meant that the patient might themselves BE a complication2. And third, wtf is up with their not wanting email? “Phone…” is a command. And it’s not inviting at all. I consulted with my mom and she agrees that I shouldn’t let anyone with such poor grammar anywhere near my eyes. So expensive surgery it is!

And since I’m going with expensive surgery, I’m following my friend Dan’s3 advice:

Definitely don’t go cheap on your peepers. Maybe you should start a “fund raiser for Dr. Beth’s Peepers”. After all, you have been entertaining many of us in the internets for a while now. Plus, if you can’t see how are you supposed to blog? So really, it’s not about your eyes so much as it is about our entertainment. (Dan’s comment on my recent bog post)

So now I’m putting a “donate” button on the sidebar of my blog – all proceeds to go to the “Fund raiser for Dr. Beth’s Peepers.” A button that looks like this:

Also, I’m going to follow Dave‘s suggestion and live blog the surgery. No, really.

1sort of like that whole “if the bathroom in a restaurant is dirty, you can bet their kitchen is too” kind of thing.
2Although that is kind of funny.
3You may remember Dan as my co-author on the Snow, Snow & Gillis (2007) paper about the Count and mathematics.