December 21, 2013


Santa and dogMall Santas are a traditional part of December. Do you remember the magic from your childhood? We can learn many lessons from them.
  1. Sacrifice: Parents (grandparents) will stand in line for ages for their kids (grandkids).
  2. Free: People will stand in line for a small, free candy cane.
  3. Disguise: Mall Santas wear costumes which cover up who they really are.
  4. Fright: Mall Santas scare some small children (clowns do too).
  5. Disbelief: How can Santa be in different malls and look slightly different in them?
  6. Belief: Children want to believe that Santa hears their wishes and will bring them a pony.
  7. Priorities: Shouldn’t Santa be at the North Pole getting ready for the big night?
  8. Impressionable: Children want to believe in Santa even when they’re skeptical.
  9. Cutbacks: The candy canes have become smaller over the years. Dentists may approve but children do not.
  10. Vanish: If the requested gifts don’t arrive, the Mall Santa is gone.
  11. Scarcity: Mall Santas have limited working hours and working days.
  12. Gouging: Photos with Mall Santas used to be free if you used your own camera.
  13. Job Security: Mall Santas are easy to replace.
  14. Bart and SantaAppearance: Mall Santas show that a rolly polly figure can be an asset.
  15. Monotony: There’s lots of repetition in listing to gift requests and giving out candy canes.
  16. Impersonal: Visitors don’t get much time with Santa. Next.
  17. Off-season: Mall Santas have a very short work season (unlike the team at the North Pole).
  18. One-sided: Who asks what the Mall Santa wants?
  19. Supervision: Mall Santas are trusted with gift wishes but not enough to be left alone with the children.
  20. CameraZOOM-20131220111348068 Santa on a break 500x340Breaks: Mall Santas can’t take a coffee break whenever they want.
  21. Noncommittal: Mall Santas don’t guarantee that the requested gifts will be delivered (but the real Santa doesn’t either).
  22. Naivety: Mall Santas tend to satisfy young kids … the older ones want a candy cane or mischief.
  23. Consumerism: Mall Santas are better with the gifts that money can buy (and which the mall sells).
This is the final post of 2013.

Best wishes to you and yours during the holidays.
May 2014 be the best year you've seen!


Podcast 251?

The podcasts have ended. You’ll find 250 episodes at

PS Look for more video in 2014 …

December 14, 2013


snowy parkYou can't hear snow fall. You might not see the flurries accumulate if you’re asleep or away from a window. Where did all the snow come from? More important, how do you clear the deluge?

The tax-funded snow plows clear the streets, though perhaps not as quickly as you’d like. You’re left to tackle your own driveway and walkway with your shovel or snow blower. You’re left to tackle your finances too.

Not Again

Winter arrives every year. We know we need to prepare but continue getting surprised by
  • the first light snow fall: where are the scarf, boots and ice scraper?
  • the first snow storm: where’s the shovel and ice melter?
  • the first cold spell: where’s the extra warm winter gear?

Have you put a shovel in your car? Do you have enough ice melter? Is there fuel for the snow blower and does it start? Did you get your furnace inspected?

We get surprised by our finances too. Do you know where everything is when you need it? Are we on track with our goals? Do we require an inspection or maintenance? It’s easier to think we’re prepared than to prepare.


Meteorologists want to give accurate forecasts but we can’t rely on them even if your favorite station has a weather guarantee. Storms get missed  or become more severe than predicted. Other storms are milder, if they even occur.

Financial forecasts are inaccurate but advisors often find plausible reasons for you to entrust more of your money with them. If investment returns are high, we’re encouraged to invest more to take advantage. If the returns are poor, we’re also encouraged to invest more to offset the poor performance and be ready for future growth.


We were expecting 12 to 20 cm of snow overnight. Since I needed to register for a yoga class at 6:30 AM (not a typo), I got fuel for the snow blower. Nothing happened. Now the forecasters predict 6-12 cm in total. They’re probably right. I’ve already shoveled once. Maybe the snow blower will get a workout after all.

Your Finances

You can hire a snow plow service for the season but you can’t be sure if they’ll be there when you need them. Their profits go down when they provide more service (i.e., when snow falls). Even with the best of intentions, they can’t plow all driveways at the same time or the right time.

Financial advice is similar. Unless advisors charge fees for their advice, they make more when they provide less service. They make more when you invest more and as your investments grow if they charge based on the assets they invest for you. Their expenses pile up even if your assets melt.


Podcast 250

direct download | Internet Archive page | iTunes

PS When I wanted to use my snow brush, I found it wasn’t in the vehicle.

December 7, 2013


Classic barberMy parents gave me a copy of The Wealthy Barber around the time I started working. I couldn’t read it. The story got in the way. Besides, there’s wisdom everywhere if we’re willing to listen. Why place more credence on what a celebrity says? We can learn from a real barber and other people we know and meet.

David Chilton wrote The Wealthy Barber Returns, which dispenses with the barber. I bought the book shortly after its release and deferred reading it until now. I wish I hadn’t delayed. The new book is well worth reading.

David has a deep understanding of the financial world. More important, he understands the irrational ways we behave. Most important, he’s funny. Very funny. What a powerful and useful combination.

This post features selected experts from the book.

The Wealthy Barber ReturnsFinancial Marketing

One of the biggest reasons that it’s so difficult to save is that … almost everyone wants you to spend as much as possible … our instant-gratification-oriented minds aren’t putting up much resistance … There are really only three Canadians who want you to set aside some money — your future you, your financial advisor and me.
A new study from the US government’s Consumer Financial Protection Bureau (CFPB) finds that 25 times more is spent on financial marketing than  financial education. In the US, that’s about $17 billion on marketing versus $0.7 billion on education. If the marketing didn’t work, would the companies spend the money?

Unfortunately, the financial sector is the least trusted in the world according this year’s Edelman Trust Barometer. What’s good for the industry is bad for us. Education and changes in behaviour are the antidotes.

Peer Pressure

It’s hard to overstate the impact our “reference groups” have on our spending decisions. We consciously and unconsciously take in their consumption cues. Their lifestyles intoxicate us and when partnered with the great enabler — easy credit — lead us to act richer than we are, “act” obviously being the key word.
The antidote is to “expand your reference group as much as possible … not only to include the less fortunate throughout the world, but also to encompass those who have gone before us … Many Canadians are completely out of touch with how much our lives have improved over time.”

David says that "when people ask you to do something, you’ll have to reply, ‘I can’t afford it’ … We can’t possibly d o and buy everything we want. There’s no shame in that. Accept it.”

He’s right but can you resist? I prefer the terminology “I choose not to” because there are things I can afford but which aren’t good value. I don’t often say this out loud but think it to myself.

As a vegetarian, eating out has a lousy ROI when the bill is split evenly. Buffets are the same way. My next one is $26 per person plus beverages. There’s no way to get my money’s worth (without gaining weight).

Conflicts of Interest

"I phoned the loan officer. I asked him, point-blank, why he gave a huge line of credit to a customer who hadn’t requested it and who had admitted that she has a significant spending issue. His answer was succinct, honest and illuminating.

“It’s my job,” he said. Banks are a business and, like all businesses, they sell something … it’s no longer only about providing credit to those who need it, now it’s also about convincing people they should want it.
That young loan officer had a true conflict of interest … what was best for the client and what was best for his employer weren’t aligned. He went with the paycheque and it’s hard to blame him.
Too few realize that they receive financial advice which doesn’t put their interests first. More financial education would help.


To outperform the market’s return, you have to outperform the majority of others who are also trying to outperform the market’s return … When you hand over your hard-earned savings to a professional money manager you deem smarter than yourself, be careful … it’s irrelevant if he or she is smarter than you. Instead, what matters is whether he or she is smarter than most of the other people who are smarter than you … we can’t all outperform. We need a bunch of underperformers to balance the scale.
We can’t beat (or cheat) the math of markets but “it’s estimated that Canadians do, in fact, try to beat the market with well over 80 percent of their stock-market money.”

What Are You Paying Your Advisor?

The financial-advice business must be the only business in the world where most customers aren’t told what they’ve received or how much they’ve paid for it. Performance and costs matter. But to evaluate them, you need to know them.
Do you ask what you’re paying?
There’s another problem I see almost as much as bad advice — no advice. I’m very frustrated by the number of people I meet who are paying advisors handsomely through their mutual-funds’ MERs, yet almost never hear from them … … we have a wacky number of financial products in Canada that are too expensive by any common-sense measure. For example, I see some mutual funds with MERs in the area of three percent. Anybody who thinks that’s a fair deal for clients has a fundamental misunderstanding of arithmetic, markets’ returns or both
Do you get value for what you’re paying? If not, consider other options. If you need help understanding, consider hiring an independent fee-only advisor.

David leaves us with hope.
Over the next few years, the costs of financial products and financial advice are going to go down significantly. Competition is heating up and consumers are becoming better educated — a powerful combination.
You don’t have to wait. Get better educated today.


Podcast 249

[instead of using Audacity, created with Cyberlink AudioDirect 4 for the first time; using M4a instead of MP3]

direct download | Internet Archive page | iTunes

PS If you already have The Wealthy Barber Returns, maybe it’s time to re-read it?