September 23, 2007

Fitness Clubs Exercise Your Wallet

Whenever I feel like exercise I lie down until the feeling passes --- Robert Maynard Hutchins

Those who think they have no time for bodily exercise will sooner or later have to find time for illness --- Edward Stanley
Joining a fitness club has risks. There's pressure to join. The club can go out of business, taking your money with you. We experienced both with Holiday Fitness in Ottawa years ago.

We've been members of Bally Matrix/Total Fitness since 1992. Apart from the initiation fees, we've been very pleased. Our location, West Metro Toronto, occupied three floors of a modern office building with plenty of parking. Great equipment. Great staff. Great members. Great atmosphere.

The Problem
The big problem was our son. The minimum age for members is 13. So one of us would stay home to look after him. This reduced our visits considerably. We wanted fitness to be a shared event. A family that sweats together ...

Last Christmas, we gave our son, then 12, sessions with an excellent personal trainer (Pino). This was terrific. We all went together and benefited. Then we waited until this month for Jeevan to turn 13.

With excitement, we went to Bally's to get our son a membership. Guess what? The club was sold to Goodlife Fitness a few months ago.

New Owners
The new owners have not made improvements. Some of our favourite equipment is gone. There are fewer staff. Normally, you'd find half a dozen on the main floor alone (mainly to sign up new members). We visited on Saturday afternoon and only found two staff in the whole building --- both at the reception desk. The exercise floors were nearly deserted too. No one was swimming in the award-winning pool. (Disclaimer: we did not check the locker rooms.)

The atmosphere had changed. The energy level had dropped. When life gives you lemons ...

We were not deterred. We had two simple questions
  1. Can a 13 year old join?
  2. If so, what's the price?
The sales rep went to check the minimum age requirements. Upon his return, he started talking to a woman who arrived after us. She was in a rush. So he started attending to her, which would only take five minutes we were told. The five minutes extended to a club tour, extraneous questions, filling out forms. Probably 30 minutes in all. We started leaving but were implored to stay since we'd be served in a minute. We waited.

Sticker Shock
Goodlife does accept children but they need to take 12 sessions with a personal trainer. Since a personal trainer had already worked with our son, this requirement was reduced to six. We figured this could be negotiated down further.

The price? This was a shock. At Bally's, my wife and I each paid $200/yr for a total of $400. So we figured that adding our son would increase the price to $500-600. Wrong.

Here's the pricing for each two weeks (not monthly):
  • one person: $29.50 ($767/yr)
  • 2nd person: $23.50 ($611/yr)
  • 3rd person: $15.00 ($390/yr)
That's a grand total of $68 payable 26 times per year for a total of $1,768 per year. We were not offered any discounts for being Bally's members for 15 years. However some miscellaneous setup fees would be waived, but that was true for any new member.

What Now?
Our excitement vanished. Have prices skyrocketed? Are there other clubs for the whole family? We're investigating. We'll then exercise our options.

September 16, 2007

What To Do When Your Car Lease Ends

"So many options, so little time."

That's how a letter from the dealership where I lease my car starts. I'm invited to start thinking about my options as there are new models and "many new attractive leasing options". I've still got 12 months left in my 39 month lease. The dealership is certainly being proactive. They did get me thinking.

Five Options
Five options are
  1. lease another car now (paying a penalty of thousands); forget that
  2. lease another new car at the end of the lease (the dealer's preference)
  3. buy the car at the end of the lease for the residual value for resale or to keep
  4. import a car from the US where prices are much lower (see at
  5. takeover an existing lease (e.g., at LeaseBusters)
Each choice includes the worst step: negotiation. How do you know you're paying a fair price? There are tips at sites like Insider Car Secrets.

What Millionaires Do
In The Millionaire Mind, author Thomas J Stanley reports that millionaires buy (not lease) quality used (not new) cars. Since cars depreciate rapidly, the savings from buying "pre-owned" outweigh the additional maintenance costs. Owing to poor reliability, German imports like Audi, BMW, Mercedes and Porsche make lousy choices. Buying domestic or Japanese is more cost effective.
The most reliable used car, a 1998 Lexus LS400 had fewer problems than a 2006 Mercedes-Benz ML500, according to Consumer Reports. For new vehicles, the owner of the Mercedes M-class is likely to experience 10 times as many problems than with a Toyota Highlander Hybrid. Sadly, the more reliable cars are less enjoyable to drive.
Naturally, there are pros and cons to each option. Luckily, there's plenty of time to decide. Too much time.

September 3, 2007


The greener grass on the other side is probably artificial turf.
--- Anonymous
PayScale Blogs recently interviewed a prominent actuary (hint: me!), which lead two readers to ask whether they should change their careers. Here are the emails (edited to preserve privacy) and some thoughts.

Email 1
"I am really interested in a career as an actuary. I was very good in math in high school and university. Unfortunately I chose the wrong field when I was 18 and graduated with a bachelor's degree in electronic engineering. I am 35 now and haven't been successful in my field and have totally lost my interest in it.

I want to know with all the passion and talent that I have for math, could I start an actuarial career without going through another undergraduate program by passing the few first actuarial exams and finding an entry level job? Is there a good future in the field or are the chances very limited in Ontario?"

Email 2
During my research about the actuaries, I landed on your website, and whatever you wrote there made me comfortable enough to ask you for advise. So, this is what I am doing.

I work as an Office/Accounting Manager for over 10 years and I got to this point in my life where I want to do something that I really like (and this is not what I am doing right now). I've always liked math (I have a bachelor degree in electrical engineering), so after considering different options I decided to try to become an actuary.

On your website you wrote "coaches or mentors see us the way we can't … objectively", and this is what I want from you: to let me know if my goal is realistic, if I can do it without going through an university in day-time, if it's not too late, what should I do first, etc. I have a lots of questions, and I would like an objective assessment of my plans.

I don't know if you would help me, but your website gave me the feeling that I might have a chance ...

The Reply
As you can imagine, it's difficult to comment on another person's life --- especially when the decision is as major as a career change. It's too unfortunate when a career choice has not been satisfying. Here are some thoughts that may help you.

You can certainly write actuarial exams without taking courses. However, you will be at a disadvantage compared to students who are taking courses. Here's the real problem: age. You'll likely find that employers prefer to hire
  • young graduates (easy to train) or
  • actuarial students working at other firms (already experienced).
This may seem like age discrimination, but it's more a case of finding the best candidate. You'd need to have a compelling competitive advantage to be hired over others --- especially for an entry level position. Also, the actuarial exams are rather difficult. They are designed to weed out students. You might want to try an exam to see what they are like.

I hope I don't seem harsh. Actuarial science can be an excellent career choice. However, before you make a major commitment to a new field, do investigate the job opportunities further.

Your Thoughts
What do you think about changing careers, something which The Money Diva is also considering?