October 2012
Trick or treat?




For many, October is a month full of changes. The weather has cooled down, the leaves are turning colours, and the kids have settled in to their back-to-school routine. The fall season is the perfect time to review your financial goals from the past year. Your objectives and portfolio are influenced by a number of events and now is a great time to start focusing on your plans for the next year.


This month's newsletter focuses on the future; saving and spending to achieve the financial aspirations of you and your family. We have also included a fun candy-making recipe, just in time for Halloween!


We would also like to take this time to inform you that Peter will be away from November 12 - November 23. Not to worry -- Richard and Claudio will both be here during that time and, together, they are more than able to take care of your needs.


Be well.



Peter, Richard, Claudio and Joanna

The 1% Challenge - Are You Up For It?

by Gary's $$$ and Sense Blog, September 2012 - online only


We have all heard advice from many corners on the need to save more for our future. We all understand this!


However, the reality we soon face is that our budget is very tight, there seems to be no way to save more. That is why today I see literally hundreds of bloggers that discuss budgeting and strategies associated with it.


So I have been pondering a way for people to save more. There are only a few ways to improve your family's bottom line, grow revenue or reduce expenses. For most of us our boss isn't going to give us an immediate raise just because we want to save more. Also we are unlikely to take part-time employment on top of what we already do. So growing revenue is hard.


All CEO's and their CFO's will tell you that the best way to a better bottom line is managing expenses.  Should we adopt their approach?


We should, however too often we try  to eat the Elephant in One Bite. We go from low or even negative saving (spending more than you earn via credit cards or lines of credit) to attempting to save or invest 10% of our income or more because we read that somewhere.


Few people have the necessary discipline to do this. Our spending is pleasurable, we enjoy it. To quit our spending ways and become a real saver is like an addict giving up drugs overnight or someone who smokes giving up cold turkey. It is extremely tough, relapse rates are high.


So I want to propose a challenge to you. Itemize all your expenses, fixed, like bank loans, mortgage payments etc. on a piece of paper. Then list variable expenses, like eating out, smoking, alcohol, clothes, and the like.


Say your expenses add up to $5,000 per month. Your challenge, should you choose to accept it, over the next 30 days is to reduce your expenses by 1% or $50. It is a no-brainer you say, I can do that. Yes you can.


Now, I want you to open a TFSA account, invest the $50 in savings and create a new fixed expense "TFSA Savings" on your expenses line.  Have the deposit made automatically every month.


Now in month 2, reduce your expenses again by $50, 1% of the original level, remember you increased your fixed expenses for TFSA Savings by $50. This $50 will be a little harder to find but you will do it. Oh yes, increase your TFSA savings by $50 to $100.


Funny, by managing our expenses, we actually are also building assets.


This is the challenge. Continue it for 10 months, each time reducing expenses by $50 or 1% in this cases and increasing your TFSA by an equal amount. Your basic expenses have reduced to $4,500 from $5,000 and we have established a new expense (savings)  TFSA savings of $500 a month.


This is how you eat the Elephant.


So, if you accept this challenge, share the methodology with friends, co-workers, your family and have a once a month accountability session. Heck you may even start your own blog I Am a 1 Percenter to record your exploits


Tools that You Will Need

  • A complete list of expenses, and a tool like Mint Canada help identify your expenses. However I encourage you to write the expenses down. Really sharpens your focus and may lead to a few ah ha moments.
  • Attack the variable expenses first.
  • Open a TFSA
  • Create a strategy for how to save on expenses in the initial 10 months
  • Monthly accountability sessions with your spouse. Treat it like an appointment with your boss on a project. He/she will want to know about results, what will your answer be?

Money saving tips

  • If you  regularly have coffee  from Tim Horton's or Starbucks reduce the consumption by 1 a day. This will save you anywhere from $9 to $18 dollars a week depending upon where you buy your coffee.
  • Brown bag your lunches like when you were in school. Takes a little effort but this can be a real money saver.
  • Like to read? Join a library. Don't always buy the newest best seller.
  • Entertainment is where people can save the most. Eat out less every week but maybe consider upgrading the dining the last week with your spouse at a better restaurant. You will still be dollars ahead.
  • Pay your Life Insurance premiums annually versus monthly. There is about an 8.5% charge for the convenience of paying monthly.
  • Reduce your alcohol consumption.
  • Quit smoking. Not easy, but after 37 years I did. The cost of our vices are quite high. At the very least reduce your intake. Again if you smoke a large pack a day, exchange it for a small pack, 5 less cigarettes. Can you do this? Sure you can!
  • Change your cable subscription. Do I really need ROGERS VIP service or can I get away with a smaller package?
  • Follow my 24 hour rule. If you want to buy something, new dress, new car, new phone, or whatever, always wait 24 hours. Most purchases are impulsive and emotional, and by waiting 24 hours you can reduce the emotion and decide if this is a need versus a want.
  • Put your debit and credit cards away for 30 days. Pay cash. If we run out of  cash, we simply Interac it. These expenses are usually unaccounted for and unplanned. If we don't have the cards we can't slap on the expense. Look back over your last week, see what I mean?
  • Like to go to the show? Why not watch a movie at home with your cable provider's On Demand Service? Saves a bunch. Plus no travel, no weather to contend with, cheaper munchies, a win all around.

A government toolkit to help you save and spend responsibly

By The Canadian Press, Globe and Mail - September 2012


Ottawa believes Canadians might need a little help in how they spend and save.


The federal government has released a "Financial Toolkit" that it says can help Canadians make sense of everyday financial questions they face.


The toolkit, which is available online and in printed form, includes worksheets, quizzes, questionnaires, case studies and educational videos to educate Canadians on making rational, responsible money decisions.

The toolkit was created in partnership with the Financial Consumer Agency of Canada, the Investor Education Fund and l'Autorite des marches financiers.


The initiative is part the government's efforts to promote financial literacy and follows months of warnings from the Bank of Canada as well as the finance minister about the record high levels of consumer debt.


On a national basis, the average household debt stands at 152 per cent of disposable income, just shy of the 160 per cent level that was reached in the U.S. and the United Kingdom prior to the housing market collapse in 2008.


Economists have said that the high levels of consumer debt are a consequence of low interest rates that have been in place since 2008 as part of efforts to stimulate the economy by making it less expensive to borrow and spend.


Junior finance minister Ted Menzies says the toolkit is another way Canadians can acquire life skills.


* For more information and access to the Financial Toolkit, click here.

9 Ways to Deal with Financial Stress

By Sicorra, Tackling Our Debt - September 2012


Do you feel good about the current state of your personal finances or do you feel stressed out about your financial situation?


According to a recent study done by KRC Research:


"Most Americans are not comfortable with the current state of their personal finances, including saving for education and retirement.


Overall, about half (52%) of American adults say they are at least somewhat worried about their personal financial situation and almost one in three (27%) would rate their concern as being very worried."


At this point in my life I fit into the group of the 27% of people that are very worried about their finances. The last 3 years have been very difficult in regard to my financial life and I have noticed that it has caused a ripple effect in the rest of my life. By that I mean that my self-worth and self-esteem have diminished to the point where some days I feel lost and useless. But I am always looking for ways to deal with this stress and to make my life better as I dig my way out of this mess, and I wanted to share some things that have helped me get through the last few years. If you too are worried about your finances here are some ways to deal with financial stress.


Keep your finger on the pulse of your cash flow.

Make sure you know exactly how much money is coming in every month, and exactly how much money is going out. As tempting as it might be to put your head in the sand, you simply cannot afford to. If you stay informed, you will make better decisions.


Exercise your discipline muscle.

Make conscious choices so that your dollars stretch as far as possible. This doesn't mean you have to skimp; it just means you have to make wise decisions. Take a close look at your expenses and make sure the money you spend is giving you a lasting return.


Stay healthy.

This is no time to let your nutrition or exercise fall by the wayside! If you do, you diminish your capacity to turn your finances around. So make sure you get enough sleep every night, take your vitamins, and keep your body moving.

These simple self-care rituals keep your personal foundation strong. If you do need to cut back on some personal care luxuries, replace them with an inexpensive alternative. For example instead of a personal trainer, you could workout with a friend.


Take bold, inspired action.

If you've always wanted to approach a specific client or strike out in a new industry, now is the time. No matter what the results are, bold action has a way of increasing our confidence, reminding us to risk and stretch beyond our comfort zones. Being proactive is empowering!


Keep yourself emotionally grounded.

If you find yourself thinking about how bad things are - or, worse yet, how bad they might get - get a hold of yourself.


As they say, "Don't go there!" Remember, what we focus on is what we experience and create more of.


If you feel yourself dropping into a whirlwind of emotion, call a friend and borrow some sanity.


Stay connected to your source.

Whether that means your higher power or your own inner wisdom. This is one of the best ways to cope with financial stress.


What rituals or habits help you feel peaceful and connected? It might be prayer or meditation, journaling, or long walks in nature...whatever helps you remember that you are a naturally resourceful and creative person in an abundant world.


Perspective is everything.

When people get stressed, they get tunnel vision. Our thoughts get caught in a loop, and we have trouble seeing any alternatives.


In times like these, the worst place you can be is stuck in your own head.


Try to step back and see the big picture. Your finances may be troubling, but if you have a roof over your head and food in the pantry, you're still doing better than 90% of the rest of the world.


Don't give up the things that you enjoy.

These parts of life are what refill your internal gas tank and keep you moving forward. It's the times when comfort and inspiration are so scarce that we have to comfort and inspire ourselves. You could watch a fun movie, or invite your buddies over to watch a hockey game, have some friends over for a pot-luck dinner party, go to the park for a nice walk, go for a bike ride, read a good book, or bake some cookies. Obviously the point is to keep yourself busy doing things you enjoy instead of constantly worrying about money.


Reach out for support.

People are often reluctant or ashamed to admit how stuck they feel, but a secret burden is so much harder to carry. It doesn't matter whether you call a friend or a financial advisor, a psychologist or a coach, just call someone you can be completely honest with. Sometimes it pays to be vulnerable.

Invisible Pops
By Martha Stewart

Makes 1 dozen

2 cups sugar
2/3 cup light corn syrup
Assorted candies and seeds (red and black licorice whips, candy corn, hulled pumpkin seeds, etc.)
Lollipop sticks


1. Line three baking sheets with Silpat nonstick baking mats or parchment paper. Prepare an ice-water bath; set aside.


2. Bring sugar, corn syrup, and 1/4 cup water to a boil in a small saucepan, stirring until sugar is dissolved. Don't stir, but occasionally wash down sides of pan with a pastry brush dipped in cold water to prevent crystals from forming; boil until mixture turns golden and registers 300 degrees to 310 degrees (hard-crack stage) on a candy thermometer, 5 to 7 minutes.


3. Immediately set pan into ice-water bath to stop the cooking (syrup will steam vigorously); let sit about 20 seconds. Swirl pan 2 minutes more to cool.


4. Working quickly, pour syrup onto baking sheets, forming circles (3 to 31/2 inches in diameter) and spacing pours about 4 inches apart.

5. Press in lollipop sticks.

6.With your fingertip or a wooden skewer, lightly press candies and seeds into syrup. Let stand until completely hardened and cooled. 

Issue: 22
Financial Markets
In This Issue
Taxes for teenagers: Nine ways for students and parents to save
Tax Free Savings Account: 10 things you need to know
How to deal with your child's back-to-school anxiety
Invisible Pops
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Peter Bailey
Worldsource Financial Management
272 Lawrence Avenue West, Suite 203
Toronto, Ontario M5M 4M1