September 29, 2012


risk 500x470 Photoxpress_2732430What a treat! I met dozens of Canada's personal finance bloggers at the Canadian Personal Finance Conference (CPFC12) last week. For details, visit My Own Advisor and Squawkfox.

Bloggers play an important role in fighting innumeracy (i.e., in improving our financial literacy). I was struck by how nice and well-intentioned the bloggers were. They have passion. They must since blogging is rarely a big money-maker (e.g., this blog has no advertising). The bloggers have a calling. Otherwise they quit before long.


Many bloggers have day jobs. Their writing may be a hobby that’s unrelated to their area of expertise. For instance, I also blog about marketing. I’ve got no training yet last week I spoke about building trust with LinkedIn. A speaker (or blogger) with nothing to sell made can be more credible and desirable than an expert looking for clients.

Herbert Simon’s 10,000 hour rule says that mastery comes from long, boring deliberate practice. Hobbyists may invest many hours but they aren't insiders working in that field every day. They aren’t getting coached by professionals. They are not learning by vicariously by watching what occurs around them.


The big challenge comes from being an outsider. There's an advantage: different perspectives. There's a weakness: not knowing the inner workings. The financial sector is tough to dissect from outside and those who know rarely tell their secrets. The few exceptions include bloggers Preet Banerjee (LinkedIn), Joe Barbieri (LinkedIn) and Dean Paley (LinkedIn).

Our personal experiences are limited. Insiders and journalists can get answers from their networks. A hobbyist blogger may not have those connections or get invited to industry events.

Personal Experience

Some bloggers write about what they're doing to increase their wealth. That's interesting but knowing what the wealthy actually do may be more valuable. There's a big difference between someone who's made millions and someone who's trying to make millions.

Guest Posts

A blogger without expertise in an area or with too much work may run guest posts. The writer might be an insider but have biases. It's fascinating to see what they leave out or assume. I won't give any examples. The same thing happens when insiders write for newspapers or magazines. If you know about them, you can anticipate what they'll say --- and not say.


Bloggers are rarely journalists or researchers. They aren't trained in fact-checking. That's not to imply they're fools. They do extremely well with what they know. Thoughtful readers help by leaving comments.

Perceived Biases

ING Direct lags the competitionEven when disclosed, affiliate links and advertising can create biases.

I think ING Direct has a decent savings account. Plus, you (and I) each get a bonus of $25 if you open an account and use my orange key 22329871S1. That’s all true but my self-interest may reduce my credibility in your eyes.

Canadian Capitalist writes that ING Direct lags the  competition. By coincidence, that page has an ad from ING Direct. That’s probably an automated placement.

When I wrote about our switch to Ooma phone service, would you have been skeptical if you saw affiliate links?

There's lots to write about. What gets ignored to avoid offending advertisers? That's also an issue for paid publications like newspapers and magazines. That’s why I was surprised when The Globe and Mail investigated the insurance loophole. There’s a reason why Consumer Reports takes no advertising. For bloggers looking for revenue, automated ad placement services like AdSense look like a reasonable solution.


I'm amazed at how much financial bloggers are able to figure out. Kudos and what they do for us for little (if any) financial gain. We need them.


Podcast 188

direct download | Internet Archive page | iTunes

PS What do you think of financial bloggers?

September 22, 2012


Ooma Telo(Skeptical? This post has no affiliate links.)

Since the whole family has mobile phones, we don’t use our home phone much. Somehow, we still manage to get billed $40 to $60 a month. We tried VOIP service in the past but the quality was lousy. There were noticeable time lags and the signal would fade in/out.

Since then, the technology has improved. Skype now works nicely, even for calls to landlines. The ideal VOIP service has excellent sound quality, works with your current phones and doesn’t require a computer.

MagicJack Plus

imageI was thinking of trying magicJack Plus but the website looks amateurish and gimmicky. There’s a reference to a PC Magazine Editor’s Choice award from 2008 for an older product that required you to leave your computer on. Isn’t that misleading?

I could not find the pricing or return policy. The cost seems to be $70 for hardware and $100 for five years of service. If you prepay, you’re trusting the magicJack company to stay in business.

Check out the lawsuits on Wikipedia and the reviews on Amazon (2.7 stars) and The Gadgeteer (1,500+ comments).


Vonage ratesWith Vonage, you pay $12/month for 300 outgoing minutes to the US/Canada. Who wants a meter? Unlimited costs $25/month. There may be additional charges and taxes. Unappealing.

Ooma Whooma?

We trust Costco for excellent products, reasonable prices and risk-free return policies. We never heard of Ooma before but decided to get the Ooma Telo. The device costs $180+tax, which includes a WiFi adapter. This is important because you want to place your device in a convenient location without worrying about ethernet cables.

Ooma taxes and feesYou get countrywide phone calls for “free” … but pay for taxes and fees. There’s a calculator. For us, the cost is $4 a month.
For $10/month, you get Ooma Premier with lots of nifty features: US/Canada calling, better Caller ID, call forwarding, a second phone number (which can be in a different city) and more. Since you’re not always home, you can have your mobile phone ring at the same time as your home phone. If you don’t answer, the voicemail gets converted to an MP3 file and sent to you at one or more email addresses.

None of this matters if the service is lousy.

The Trial

Installing Ooma was easy. You select a phone number during the process. That lets you experiment without losing your current service. To our surprise, the sound quality is generally as good as our landline.

We forwarded calls from our landline to our new Ooma phone number. Callers didn’t notice problems with the quality. There were occasional glitches but they may have been caused by the caller’s equipment. To improve call quality, Ooma claims to give your call priority over other Internet traffic. This is handy if you have other users at home.

Another surprise is Ooma’s phone support. I’ve called several times and a real human answered within seconds.

The Glitch

We decided to move our home phone number to Ooma. The porting process takes up to a month and you must keep your landline in service until the transfer takes place.

For some reason, our landline got disconnected on Friday before the porting was finished. On Saturday, I called Ooma and they said the fault was with Primus and they could not complete the transfer until our landline was restored. I called Primus and was told they received instructions to disconnect our line, we might have lost our old number, and that getting service restored would not start until after the weekend.

I’m annoyed at Primus. They could have phoned or emailed before disconnecting our service. You’d think they would want to retain customers. Also, I called twice (via Ooma) and spent a total of 50 minutes on hold.

I don’t know who did what but on Monday we had full service with Ooma. That was weeks ago. We’ve been happy ever since.


Podcast 187

direct download | Internet Archive page | iTunes

PS We have the fastest Internet service available to us; 75 Mbps. Results may be worse with slower speeds.

September 15, 2012


Pentothal (truth serum)You can easily find a jack-of-all-trades advisor who does "free" financial planning. And might sell investments, life/health insurance, employee benefits and/or mortgages. You can also find specialists in each niche.

MoneySense made a directory of fee-only planners but it’s from 2010 and has no screening. I examined some planners who appeared to be independent and are still in business. There are other sources listed at the bottom of the elusive search for financial advice (The Globe and Mail, updated Sep 10, 2012).

How do you spot the real planners? You can’t inject candidates with truth serum. If you want a planner who pays attention to details and keeps current. you’ll find signs.


When you're looking for an advisor who claims to provide fee-only financial planning, look for all of the following
  • a business domain name: these are cheap (e.g., $10 US/year)
  • a proper website: beware of anyone without a website (they’re cheap) or who has a website with minimal meaningful content (why don’t they have anything to say?)
  • a photo: do you want to deal with someone who’s hiding?
  • a real email address: beware of anyone using a provider like Gmail, B (Google Apps for Business is a free to get email at a domain name and setup takes mere minutes)
  • tweets: Are they current? When did they start? Is the content useful or promotional? Are there more Followers than Followed? If they aren’t on Twitter, perhaps they have difficulty upgrading their skills or showing generosity.
  • designations: look for a Certified Financial Planner (CFP directory) as a minimum and perhaps a Registered Financial Planner (RFP directory). Others like accountants may have comparable skills or experience.
  • LinkedIn profile: look for contradictions and omissions. It's tough to deceive for advisors with 100+ connections to deceive. Are they specializing or do they have unrelated businesses (e.g. holistic medicine, autobody shop)? Do they have believable testimonials? What did they do before?
  • licensing: e.g., are they licensed to sell nonrelated products like life insurance (this may not be obvious or well disclosed; you may need to probe)


One planner claimed to be fee-only but her website showed she could assist clients with a wide range of needs. Hmmm. LinkedIn shows she seems to sell a range of products including life insurance. A check on the government licensing website (FSCO) confirms she can.

Why wasn’t she honest about what she sold?


Fee-only is a difficult model for planners to make viable. Few clients are willing to pay for a financial plan when there are many "free" options. If you don't understand that "free" advice may contain biases, why would you pay for a plan?

Once you go the fee-only route, you could end up needing
  • fee-only financial planning (including investment advice)
  • fee-only investment management (unless you want to self-administer through a discount broker)
  • fee-only insurance reviews
That's like going to a doctor, dentist and surgeon. Wait a second, we do. We don’t shop at department stores much either.


Podcast 186

direct download | Internet Archive page | iTunes

PS You may like the idea of using specialists but finding them takes time.

September 8, 2012


'Cake Boss' Buddy Valastro as a boyBecause my dad didn’t have any life insurance, I had to drop out of high school to run the family business. I worked 12-18 hours a day, six days a week. I was the first one in and the last one to leave. — Buddy Valastro

It’s Life Insurance Awareness Month once more. This year, the ‘Cake Boss’, Buddy Valastro, shares his experience. Buddy’s father died three weeks after getting diagnosed with lung cancer caused by smoking. His dad was 54. Buddy was only 17. (In contrast, my son is 18 and left home for university last week).

Unlike NBA player Lamar Odom’s mom or actress Leslie Bibb’s dad, life insurance was not in place to help the family cope.

His Own Words

click to watch on YouTube (and then come back!)Watch Buddy explain in his own words. Restrictions prevent the video from being embedded. Here is the link (opens a new window).

Why Not?

Why didn’t Buddy’s dad have life insurance?

imageMaybe he thought he didn’t need any because he had a business. Maybe he didn’t “believe” in insurance. Maybe he hadn’t found an advisor he could trust. Maybe he didn’t think he could die so young. Maybe he was procrastinating. Maybe he thought the coverage was too expensive.

What’s certain is the unnecessary damage caused.

The family persevered but imagine what they went through. The business could have failed. Buddy may have lacked the skills or interest to run it. Life insurance would have make a big difference.

The Tragedy

It turns out that Buddy’s father had life insurance until shortly before he died.
The irony of the situation is that my dad owned life insurance for many years. When my family started having kids, my dad bought life insurance but about six months before he was diagnosed [with cancer], his policy expired and he didn’t renew it.

I’m not exactly sure why. Cost might have been an issue. My dad was 54 years old and he smoked. So coverage was getting more expensive. He was also a very busy guy and probably thought it was something he could do later.

Whatever the reason, if there had been life insurance, I know things would have been a lot easier. I could have hired more staff, worried less and had a little time to grieve. — Buddy
Insurance only helps when it’s still in effect.

Buddy’s Buddy

Because of my experience, I bought life insurance as soon as my first child was born and as my family grew, I bought more. Now that the business has really taken off, I’ve worked hard with my advisor to add more coverage to make sure that everything I’ve worked so hard to create will get passed on the next generation. — Buddy
Buddy learned about the importance of life insurance and has his own coverage. Let’s hope he’s also protected with income replacement insurance and critical illness insurance.

Podcast 185

direct download | Internet Archive page | iTunes


PS Two months ago, Buddy’s mom was diagnosed with ALS (Lou Gehrig’s disease). She’s 64 and there’s no known cure. Best wishes for her treatment.

September 1, 2012


Jeevan age 9It's time for students to return to school and for some to leave home. Our son, Jeevan, is going to Western University where he'll be living in residence. This will be a big change for him and us.

Why Western?

Our son’s decision to attend Western came as a surprise. He was more interested in the University of Toronto and enjoying the comfort of home for a few more years. That was fine with us. He likes having us as slaves and we're too docile to want freedom now.

imageAt the Ontario Universities’ Fair, our son reluctantly attended the session from Western. Yeah, parental pressure! The presenter, content and presentation were the best by far. That hour made the difference. Western became a possible choice and then the choice.

Disclaimer: I’m biased. I went to Western too (then called The University of Western Ontario). The experience was excellent. The campus felt special and still does. That's where I first heard of actuarial science and decided to become an actuary. Since I grew up in London, Ontario, I lived at home.

Empty Nest

Children start their lives completely dependent. With patience, nurturing and scolding, they start doing some things by themselves. In recent months, our son has become civilized and helpful. He does things without being asked --- at least sometimes. He's grown into a nice young man.

Now that he's become useful, he's leaving?!? Unfair!

After 18 years, my wife, Sharmila, and I will be alone. That's exciting and scary. This is a time to rekindle our relationship or drift apart. I'm betting on the former.

Which Song?

The feeling of son leaving is less The Beatles’ She's Leaving Home and more like Harry Chapin's Cats In The Cradle. Looking back over the years, what we could have done sometimes seems to overpower what we did do.


Today we're moving our son to London, Ontario. Saying goodbye will be emotional even though Toronto is only two hours away.
When you comin' home son?
I don't know when,
but we'll pay the bills until then, son.
You know we'll pay the bills until then.
(with apologies to Harry Chapin, Cats in the Cradle)


Podcast 184

direct download | Internet Archive page | iTunes

PS We're packing Kleenex just in case. Tears of joy are still tears.