Everybody hates bank fees, but there are two ways that you can feel better about them.
Stop paying them.
Profit from them.
I feel that a lot of the hate directed at the big banks is misdirected. Especially here in Canada where our banks weren’t involved in the same shenanigans that some of the big banks South of the border participated in. Besides, do you really feel like paying cash next time you want to buy a car or a house? Banks provide a necessary service in the loans that they provide.
Canadians who shop in the States will get a break soon. June 1st the new, higher, duty-free limits announced in the federal budget kick in. The duty-free limit for stays of more than 24 hours will be boosted to $200 from $50. Limits for visits longer than 48 hours will be increased to $800. The previous limits were $400 for a week and $750 for more than a week. According to a BMO Capital Markets report released Thursday.“Our latest random sampling of a basket of goods finds that Canadian retail prices are roughly 14% above U.S. levels, before taxes and adjusted for the exchange rate.”
Bank of Nova Scotia’s landmark red tower in downtown Toronto has been sold for $1.27-billion, the highest price yet paid for a Canadian office building. Although it was common in decades past for banks to own their headquarters, a series of real estate sales over the years left Scotiabank as the only of Canada’s Big Six lenders to own its headquarters.
On Thursday shares of Research In Motion fell to $10.89, its lowest level since the end of 2003, after a top sales executive in charge of the company’s global sales strategy quit the company.
Stocks were higher this week with the S&P 500 index rising 1.8% in the States and in Canada, the S&P/TSX composite index ended the week 2.6% higher.
There was some upbeat economic news in the United States: The University of Michigan’s consumer confidence index broke free of expectations and rose to 79.3 – its highest reading since October 2007 and its ninth straight increase.
Investors were more focused on Europe though, where Spanish regulators suspended trading in Bankia SA, Spain’s fourth-largest lender, ahead of what is expected to be a €19-billion bailout by the government as it attempts to steady the country’s financial turmoil.
Facebook shares fell another 3.4% on Friday. The shares have fallen a total of 16% from their initial public offering price of $38 (U.S.) last Friday amid a flood of complaints about the IPO process.
If you live within your means, keep your debt low, invest a little money every month and shelter those investments from tax (using either a TFSA or RRSP), you will be a financially stable adult.
But nobody’s interested. That doesn’t sound too exciting.
Canadian household debt is 151% of disposable income and the average consumer debt is a record high $25,960. A recent RBC survey learned six in ten of us don’t save for retirement and about 45% of people said they plan on financing their retirements by selling their homes.
But people still love to buy lottery tickets. That’s exciting!
In the late 90′s during the Dot-Com bubble many Canadians poured their life savings into Nortel Networks hoping to make a quick buck on a company they knew very little about. The stock peaked at $124 a share before plunging to $0.47 and then going bankrupt.
In the U.S., housing prices peaked in 2006 and people who couldn’t afford to live in the homes they bought used home equity lines of credit to pay their bills. On Dec. 30th, 2008 America recorded its largest real estate price drop in history. In Vancouver real estate prices have increased 163% in the last decade. On March 17, 2012 the Marine Gateway condo development on a busy industrial road in Vancouver sold all 415 units in 4 hours. Didn’t we learn anything?
Markets were down this week as the European economy showed increasing signs of deterioration and a U.S. payroll report points to another sluggish period for the economic recovery.
Canadian market this week
On Tuesday Research In Motion unveiled its crucial BlackBerry 10 software and the stock has dropped roughly 15% since to hit an 8 year low of $11.77. In 2008, RIM was worth more than the Royal Bank of Canada’s with a share price peaking around $148.
Research In Motion 1 year chart
On Wednesday Whole Foods (or Whole Paycheck as some people call it) reported second quarter results and sales for the quarter increased 14% to $2.7 billion. The stock is up 50% this year and is rated a “strong buy” by most analysts.
Whole Foods 1 year chart
The Super Bowl of investing is happening this weekend. The Berkshire Hathaway annual meeting – hosted by 81-year-old Warren Buffett – is a private event open exclusively to shareholders and select media. Buffett’s disclosure that he has prostate cancer has again raised the question of who will eventually succeed the world’s most successful investor at Berkshire Hathaway.
In my last post I was helping my friend Donald figure out what to do with his new-found riches after landing a role in a movie. The truth is there really isn’t a simple answer to the question “where should I invest my money?”
I have been a fitness buff since as far back as I can remember and have taken the personal trainer course. I always think that getting physically fit is a lot like getting financially fit. The amount of effort exerted is directly proportional to the results one can expect.
If you wanted to lose weight for example, I might suggest you cut back on high calorie drinks and go for a brisk walk every night. Or I might suggest you hit the gym 3-5 days a week doing a mix of free weights and cardio and put you on a diet of egg whites and protein shakes.
How good do you want to look? How good do you want your net worth to look?
With that in mind, I’m going to outline 4 possible investment options for Donald. Some will require very little effort and some will be a little more involved but will deliver superior results.