Saturday, December 25, 2010

Top 3 Leftover Turkey Recipes

Now that the holiday banquets are over, you're probably wondering what you should do with all that leftover turkey. The monotony of eating the same turkey sandwich all week is enough to drive anyone to the brink of insanity. So I've scoured the web to find the top 3 quick and delicious recipes to make your leftover turkey go further. It'll be a nice way add some variety to your leftovers that your family will love and help you save lots on your grocery bill.

1) Leftover Turkey and Stuffing Casserole

2) Turkey Noodle Soup

3) Turkey and Artichoke Pizza

Sunday, December 19, 2010

Scanner Price Accuracy Code

I just recently learned about something called the "Scanner Price Accuracy Voluntary Code" (SPAVC). That sounds like quite a mouthful, but it can lead to some pretty big savings. The way the SPAVC works is that if an item under $10 is scanned and the price that shows up at the till is not the price that matches the one on the shelf you get the item free! If the item is over $10 than you get $10 off the price of the item.

Some retailers will try to get away with just giving you the lower price of the two (the shelf price or till price), but you should request to have the item free of charge. This worked for me the other day at Valu-mart when I was purchasing some juice. The price on the shelf was $2.99, but when I got to the till it scanned in at $3.99. I asked the cashier about the price discrepancy, she then called a clerk to check the shelf price. I was indeed correct so I got the juice free!

This may not seem like huge savings but it adds up. According to a recent study, approximately 2% of items scanned are mispriced (Marketplace 2009). If you are spending about $500 a month on groceries this can amount to $360 is savings each year. Here is a short list of major stores in Canada that participate in the act:

Shoppers Drug Mart
A & P
Home Depot
Canadian Tire
Toys r Us
Wal Mart
Giant Tiger
Best Buy/Future Shop

Be sure to check out this CBC Marketplace video on the SPAVC:

Also check out this related article:

Here's a bonus video about getting free stuff online:

Thursday, December 2, 2010

Fire Your Investment Adviser!

This may be some radical advice, but I truly believe that your investments (retirement fund, child's education fund, new home account) are best left to the person who cares about them the most. That's you! When we let others handle our investments (i.e. Manulife, Sunlife, Investors Group, etc...) we believe that they know better. How could they not, with all their sophisticated certificates and fancy business cards. Well it is statistical fact that investment advisers on average have underperformed the market indices (Malkiel B., 1973). So why do we constantly fork over our hard earned dollars to somebody in a suit who has convinced us that they know better?

One main reason that we continue to seek out investment adviser services is that we are led to believe that we cannot handle the responsibility ourselves. There is a multi-billion dollar industry built on this mentality. The more complicated they make the investment world seem, the more likely it is we will have to seek their services. A great book written by Robert Kiyosaki, author of the Rich Dad series, entitled Conspiracy of the Rich talks about how we are deliberately led to believe that we cannot handle our own investments so that the banking industry and other financial institutes can continue to reap large profits. For more information check out: conspiracy-of-rich.html.

When you are looking at investment vehicles be sure to ask about the Management Expense Ratio or MER. The MER is a % annual fee of the capital you invest that goes into the investment adviser's pocket. MER's typically range from 0.5% to 2%. Paying this fee does not garuntee positive growth of your investments. In fact, even if the markets take a tumble and your investments take a loss the investment adviser still gets paid. Although 2% may not seem like a lot of money over the long haul it adds up to big bucks and companies that offer portfolio management services know this.

My suggestion is to seek out the lowest MER's or even better learn how to handle your investments yourself. Low MER's can be found in the form of Index Funds and Exchange Traded Funds (ETF). For more information on ETF's traded in Canada visit Claymore investments ( and iShare ( These types of investments offer some of the lowest MER's. Over the long term low MER's and funds that mirror the market index will outperform 70% of all actively traded funds (Bogle J., 2007).

Even better is to manage your investments yourself. After all nobody cares more than you do. Another plus is that although you may have a couple losses in your investment career you can use those losses to build on your investment knowledge and develop your own investment style. If you pay someone else to do it, they can lose your whole nest egg and what you're left with is an empty pocket and no new investment knowledge to help you get out of the hole. The only thing you may gain from that experience is not to trust investment advisers.

Investing is risky business. As you increase your investment knowledge and gain valuable experience the risk levels will decrease. One key to unlimited wealth and prosperity is literacy and a local library card (free-books-magazines-dvds-and-music-cds.html). There have been a plethora of literature about how to build and keep your wealth. That being said, it's important to focus on the best books, because a lot of rubbish has been published on the subject. I've included a short of good reads I've come across at the end of this article

Knowledge is the new wealth. You can only attain this knowledge through actively managing your own investments, not by paying someone else to do it. Vultures are waiting around every corner to put their hands in your pocket. You can handle your own investments and you can develop your own investment style. Why pay others to gain valuable investment experience and play roulette with your nest egg?

Here is a short clip about ETF's:

Great Personal Finance and Investing Books Worth Reading

Start Small by Fred DeLuca (entrepreneurship)

4 Hour Workweek by Timothy Ferris (entrepreneurship)

The Wealthy Barber by David Chilton (personal finance)

Rich Dad Poor Dad by Robert Kiyosaki (personal finance)

The Millionaire Next Door by Stanley & Danko (personal finance)

The Automatic Millionaire by David Bach ((personal finance)

The Warren Buffett Way by Robert Hagstrom (investing)


Bogle J.C. 2007. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. John Wiley & Sons, Inc., Hoboken, New Jersey.

Malkiel B.G. 1973. Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing. W.W. Norton & Company, Inc., New York, N.Y.

Monday, November 15, 2010

Free Coffee! McDonalds Premium Roast Coffee from Nov 15 - 28, 2010

What's better than waking up to a free cup of coffee? There ain't nothing better.

Some McDonalds will give you any size coffee. You'll be saving about $1.50 a coffee. We'll all be getting the jitters from caffeine overload over the next two weeks. Be sure to stop by a McDonalds on your way to work or school! You have two weeks to take advantage of this incredible promotional offer.

If you only drink Tim Horton's coffee be sure to check out this article:

If you're a Starbucks fan be sure to check out:

Coffee Wars!

Friday, November 5, 2010

Invest Like Warren Buffett

There have been a lot of personal finance articles here at Cash Saving Tips over the past couple of months. A lot of basic concepts about personal finance have been covered such as:

1) Paying off debt and the horrors of credit card interest

2) How planning for retirement is now our own responsibility

3) The importance of maintaining your money's purchasing power

4) Finally, the benefits of investing early and frequently

This brings us to the important topic of investing. There are numerous investment vehicles that exist, so it can be very difficult to know what to pick. Choosing the best investment option for you will depend on your risk tolerance and the return you expect on your investment. This article is about investment strategies in the stock market.

The stock market is inherently a very volatile investment arena. Prices can fluctuate wildly in a span of one trading day. Trying to spot trends in price volatility is the basis of what is known as technical analysis. Technical analysis attempts to spot patterns in price volatility and tries to time the buy and sell of a particular stock (which can be extremely risky). An opposing school of thought is fundamental analysis. This is where the investor rigorously researches the financial statements of a company before making an investment decision. This is the type of investing Warren Buffett practices (in conjunction with technical analysis to spot bargains).

Why should we care about how this Warren Buffett character invests? The reason is he is the most successful stock market investor of all time and has developed his net worth to over $45 billion US. We could all learn a thing or two from how Mr. Buffett has done this. One explanation is that Warren Buffett is a mathematical genius. When he looks at a companies financial statements, the numbers tell him a story. Just like how reading a book can tell a story, Buffett can piece together a story from pages and pages of financial statements.

You're probably thinking, "that's great that this guy can do this, but how does this help my investment portfolio?" Well, we need to study the methods and principles used in Buffetts investment decisions and implement them in our own investing. Buffett is not a day trader, nor is he a risk taker. He deliberately makes investment decisions after thoroughly doing his homework and we should too. One of the best books I've read about Buffet's investment style is entitled the "The Warren Buffett Way: Investment Strategies of the World's Greatest Investor" by Robert G. Hagstrom (borrow it from the library today).

If you are thinking of investing in the stock market or already have dabbled in it, I would highly recommend this book. Stocks aren't the only investment vehicle, but are an excellent option if you are tyring to find a very liquid (accessing your money fairly quickly) investment option. The stock market can be a very risky investment environment, however your risk will decrease as you do more research on the topic. Start doing your homework today and invest for tomorrow!

Check out this video about investing like Warren Buffett. Just ignore the endorsement at the end of the video.

How to Invest Like Warrent Buffett:

Sunday, October 24, 2010

Tipping Etiquette

It is customary here in Canada to give a 15% tip for service at a sit-down restaurant. It's also customary to tip a small amount (50 cents or so) to a barista who serves you your morning cup of Joe. In some countries the tip is included in the final bill, although most follow this same rule of thumb. Although receiving tips is important to the waiters/waitresses, your tip should reflect the level of service you received. Most food service workers are paid below minimum wage, because they are suppose to earn extra tips. A lot of people tip 15% regardless or whether they received good service or not and a lot of food service workers expect it regardless of the service the provide. Preparing and serving a meal is a team effort so sometimes when you receive bad service it could be a number of things going wrong behind the scenes.

I believe as a customer of a restaurant tips should be subject to the service you receive. Too often are we expected to give the standard tip when we receive terrible service. Often waiters will forget your water because it doesn't add to the final bill and therefore is not going to inflate their tip. This is just awful service and should be rewarded accordingly.

Therefore, if you felt you received good service from an attentive waiter than an appropriate tip would be 15% or more. However, if you felt that:

1) You were ignored
2) It took forever for the bill to arrive
3) The water never came
4) There was some other service deficiency

than your tip should reflect that. So if the waiter was having a bad day and was grumpy, or something went wrong behind the scenes, should this kind of terrible service still be rewarded?

Please leave comments about the food service experiences you have had and whether or not you believe that the percentage you tip should reflect the level of service you received. If you have experience working the in the food service industry please leave a comment on what you think should be an appropriate tip when recieving sub par service.

Here is a video from about tipping:

Sunday, October 17, 2010

The Miracle of Compound Interest

One of the most memorable quotes of Albert Einstein was that "the most powerful force in the universe is compound interest!" Compound interest is really the catalyst that expands your funds and it's the mechanism that can turn small savings into huge sums. With a decent return on your investments (6-8%) and patience, compound interest can grow your savings astronomically.

Here's an awesome story that beautifully illustrates the power of compound interest. Back in the early history of China there was an emperor who had great problems with their tax laws and trouble calculating the dynasty's cash reserves. To solve this problem he hired one of the most prominent mathematician's at the time. The mathematician toiled day and night trying to audit the financial books of the dynasty and finally after months of slaving had solved the emperor's cash reserve problem thus saving the dynasty from financial ruin.

To reward the mathematician the emperor was willing to grant the mathematician whatever he wished, as long as the emperor approved. The mathematician thought long and hard about this and simply asked that he would be given a dollar one day and the next day two dollars, and the next day 4 dollars and so on... for an entire month (30 days), each day doubling the amount given. The emperor in his haste granted the mathematician's wish, not understanding the power of compound interest. Although the amount initially would be small, the amounts would grow exponentially. Eventually by day 30 the amount would grow to $536,870,912! By the end the emperor had to forfeit his entire kingdom to the mathematician or face the shame of not fulfilling his promise.

This story illustrates the power of compound interest. By making small investments early on in your investment career, your savings can grow dramatically. As long as you save for the purpose of growth and reinvest your returns, you can let compound interest work for you. Compound interest is one of the best tools you can use to increase your savings for your long term goals such as retirement or your child's education fund, since one of the main requirements is time. Harness the most powerful force in the universe save often and start early!

Here is a quick video clip illustrating the power of compound interest:

Wednesday, October 13, 2010

Get That Furnace Ready! Save 50% On Your Heating Bill

Summer is definitely over. This morning was one of the first frost warnings here in Waterloo, Ontario. With temperatures dipping below zero, it will soon be time to get that furnace running. Here are 5 home heating tips that will help keep you warm and save you big bucks this winter:

1) Install a Programmable Thermostat - these things pay for themselves as soon as you install them. It is one of the best investments you can make when it comes to your home heating and cooling system. You can program your thermostat a few degrees cooler when everybody is away during the day (between 9 am -4 pm). You can also program your thermostat to kick in an hour or so before everybody starts getting home, so you come back to a warm and toasty home. You can also program your thermostat a couple degrees lower when everyone is in bed and tucked under warm covers (between 12 am - 6 am).

This will potentially save you 30% on your heating bill. You can also set your thermostat to a degree or two cooler during the times when you're at home and throw on a sweater. I don't suggest living in a meat locker, but having a pair of warm pajamas can save you tons. Check out this link for more information: save-30-on-your-home-cooling-bills-with.html

2) Change Your Furnace Air Filter - this is really important and should be done every 60 to 90 days when your furnace is running around the clock. It should be changed more frequently if you have pets or live in an older home with older duct work. The furnace has to work a lot harder to heat your home if it can't get proper air flow into your duct work, so be sure to have this checked out before starting up your furnace for the season. This could potentially save you 10% on your heating bill.

3) Seal Drafts - doorways that lead into your home can be very drafty. To seal them up, try attaching a door sealer to the bottom of your door. Windows are areas that lose a lot of heat as well. You can either caulk around the outside of the window with a clear insulating caulking or attach a thin transparent plastic sheet over the inside of the window (like saran wrap). Another trouble spot are fireplaces, be sure to seal these up when you're not using them. This can save you about 5% on your heating bill.

4) Don't Heat Empty Rooms - If there are any rooms or space that you don't use around the house (i.e the basement area), try not to heat these areas. If you have doorways that can block off these areas you can keep them closed. If there are vents that pump warm air into these areas, be sure to close them. You can purchase magnetic vent blockers that attach over the vent and block the warm air. You can also put a small electric space heater in the rooms that you do use if extra heat is required there. This could save 5-10% on your heating bill. An important thing to note is that you never want the temperature to drop too low in your house since it could damage plumbing if the pipes freeze.

5) Let the Sun In - during the day be sure to open up all the blinds and curtains to take full advantage of mother nature's furnace. Letting the sun in can raise the temperature in your home by a couple of degrees. Conversely, during the nights it's best to close all your curtains and blinds to insulate drafty windows and keep the warm air in. This could potentially save 2-5% on your heating bill.

The savings are really heating up with this video:

Monday, October 11, 2010

Over 1000 Unique Visitors!

Thanks to all the dedicated readers of Cash Saving Tips. I hope that the articles have been entertaining and useful.

Tell your friends and keep on saving!

Thursday, October 7, 2010

Deal Find

There's a great new website called Deal Find. The site sells gift cards offered at a great discount. Unfortunately the deals are only for retailers around the greater Toronto area (for now...). Here are 3 examples of the past deals they've had:

1) Thai Spring Roll (Restaurant) - Regular Price $50, Coupon Price $20
60% Savings

2) East Village Yoga (Fitness) - Regular Price $280, Coupon Price $20
93% Savings

3) Toronto Cleaning Service (Cleaning) - Regular Price $75, Coupon Price $39
48% Savings

How it works (an exerpt from their webpage):
"Every day, Dealfind features something cool to buy or do at an unbeatable price. How do we get such a great price? Because we represent a large group of buyers and we can promise local businesses a certain amount of volume. Buying in bulk, as a group, you get the best deal."

I'll leave a link at the bottom of my site. Check it out and save today!

Here's a clip from another great coupon site:

Tuesday, October 5, 2010

Stick to the List!

Have you ever noticed when you go to the mall that every store is having a massive sale. What luck, you just happened to be there during a blow-out sale while you were getting a new tube of toothpaste. Coincidence? I think not. All the stores always have sale marketing campaigns to lure you in to check out their "great deals".

This happens not only at malls but at just about every retail establishment. For example, when you go to a discount garage to get your oil changed, and the next thing you know the mechanic gets you to buy the complete muffler king package. So when you head out to do some shopping keep in mind that you will be bombarded with advertising and that retailers will be constantly trying to upsell you. Being upsold is like being asked if you want to get your fries and drink supersized at McDonald's (which they don't do anymore after that documentary, "Super Size Me").

The best way to avoid being upsold and unnecessary spending is to have a grocery/shopping list in hand before you head out. Once you have a list, stick by it. While wandering through the mall you'll probably see some extra widgets, but try to stay focused and remember the reason you came in the first place. The last thing you want to do is leave the mall with a bunch of sham-wows and slap chops. Make a list and stick by it, you'll save tons by doing it!

Check out more ways to save from America's Cheapest Family:

For more day to day saving tips check out:
Start a Change Jar
What's Your Latte Factor?
To Clip or Not To Clip?
Top 7 Things You Should Not Have to Pay For
Basic Sewing Techniques
Hang Dry Your Clothes

Saturday, October 2, 2010

The Invisible Tax

This article is about that unseen tax that on average steals 2-3% of our money’s spending power each year. This tax is known as inflation. On average our money loses 2 to 3% of it’s value each year, this is mainly due to the increase in the amount of money circulating in the country. There are many other complex factors involved that influence inflation rates, but the important thing to note is that on average our money loses value. This means that in about 30 years what would have cost us a $1 (say a can of pop) will cost $10, a whopping 10 fold increase (that better be the best damned tasting pop ever!).

Inflation is also known as “The Widow’s Worse Enemy” (sorry for the sexist remark). It was given this name during World War I. During this period most men went off to fight and when they did not return their wives would be left a lump sum settlement from the government. Being that men were the main bread winners (earners) during that time the widows would have to invest their money to live off the interest. Most widows would invest in a fixed income investment (i.e. bonds) that would pay a constant interest rate each month. Widows who depended on their investments to survive saw the cost of living persistently and gradually increase each year due to inflation, while their investment income remained the same. Most widows in this situation were forced to work in old age or suffered alone in poverty.

Before we can even worry about inflation it is critical to pay off all your bad debt (Check out: Know your Debt & pay-off-debt-or-invest.html). After your debts are settled you can begin to invest (Check out: top-4-forms-of-passive-income.html). When looking for an investment you have to beat the average inflation rate. Otherwise you’re not producing any extra value with your investment. Most “high-interest” savings account offer an interest rate that is a complete joke. I believe most banks are offering something like 1%. That means that your money is losing value at 2% a year instead of 3%. Leaving your money in one of these accounts would be a bad idea. Your money has to be in some kind of investment vehicle that at the very least is beating the average inflation rate.

There will be many questions to ask yourself when examining investment options. One of the first questions you should always ask yourself is: “will my return on investment keep pace with the average inflation rate (2-3%).” Having your money in the bank is not a terrible idea. It’s a safe place to accumulate your savings, until you have a sizable sum it's difficult to make a serious investment. When your savings do grow to a large enough sum (say more than $1000 or so), then it’s time to start thinking of ways you can make that money work for you. Don’t let the invisible tax erode your spending power. Become a wise investor and kick inflation’s ass!

Check out this Rich Dad video on inflation:

Wednesday, September 29, 2010

Rich Dad Scam

I recently watched a video from CBC marketplace in which Robert Kiyosaki author of Rich Dad Poor Dad was exposed as a fraudster. I would not immediately discredit all his work. I do think he writes entertaining, easy to understand, insiteful personal finance books. However, Robert may have gotten too greedy with his latest attempt at increasing his earnings.

In his books he often talks about fundamental concepts on how money works and how important cashflow is rather than looking for large jackpots (or what he calls capital gains). Robert Kiyosaki has many investments that brings him cashflow such as: rental property, stocks, board games, royalties from books, and licensing of his Rich Dad brand. Licensing of his Rich Dad brand is where Robert has gotten into trouble. Robert Kiyosaki has relentlessly marketed his Rich Dad brand through his books and educational board games. He now uses his brand to sell educational seminars. Robert does not actually teach any of these seminars but licenses out his Rich Dad brand to slick huckster salesman to sell expensive seminars that provide very little value to their students.

Check out this link from CBC Marketplace which has a video that exposes Robert Kiyosaki's grave mistake. It seems that Robert's greed may have irreversibly devastated his Rich Dad brand which he worked so hard to build. I think that his books still have merit and are still worth reading. However, some of Robert's choices with his Rich Dad brand were not well thought out, unethical, and may cost him his life's work.

Road to Rich Dad: Who's Getting Rich Off Rich Dad?

If you enjoyed this article be sure to check out:

Top 3 Signs of a Scam

The 4 Hour Work Week Scam

Saturday, September 25, 2010

Conspiracy of the Rich

Robert Kiyosaki (a.k.a. Rich Dad) author of Rich Dad Poor Dad, a bestselling personal finance book, has recently come out with a book entitled the Conspiracy of the Rich. This article does not only provide a synopsis of the book, but I also wrote this in response to some comments about my last article. The comments were addressing today's education system in Canada and how it avoids teaching children valuable personal finance information. Schools rarely teach basic money management, the ideas of debt and interest, or how to invest for the future. According to Rich Dad, this is not an accident.

Our school system is based on the early 20th century Prussian education system. Back then Prussia was a communist country and the education system was training children to be future government employees. Under these circumstances, Prussia needed workers that would obey authority and stay in line with political agendas set by the communist dictators. In order to train children to become docile, who would later become adults in the work force, they designed an education system similar to the one we have today.

This education system starts with a teacher at the head of the class with 20 to 30 students sitting and listening to what the teacher has to say (who is the authority figure and disciplinarian). The students are constantly searching for praise from the teacher, while trying to avoid punishment. The students therefore have to search for the "right answers" and abide by the rules. This fosters a herd mentality which is perfect for a communist dictatorship who is trying to train the next generation of government workers. So in this environment you're not rewarded for trying new things or questioning the authority of others.

This education system has it's advantages. It is an efficient use of human resources (i.e. 1 teacher to 30 students). However, we can clearly see the drawbacks since it stomps out creative ingenuity and independent thought. Why would the uber rich want to have an education system like this. First off, the uber rich own large corporations and would rather have you as an employee than an entrepreneur who could later become their competitor. The rich, like the communist dictators, want docile employees who are hard working and who don't question their authority.

This brings us to the comment of why personal finance is not covered well in our current education system. The financial institutions such as banks (i.e. TD Canada Trust, Scotia Bank, Royal Bank of Canada, and Bank of Montreal) are a multi-billionaire dollar industry. They are in the business of selling financial products (i.e. mutual funds, mortgages, credit cards, etc...). The more financial knowledge you have, the less money they make. I know that banks care about their bottom line just like any other company, so it is very plausible that they don't really want you to have a good handle on your personal finances. After all TD would love you to pay management fees for their mutual funds (because it is too difficult to manage your own money) and have you making minimum payments on your credit card (because nobody told you that 19% interest is highway robbery).

Conspiracy of the Rich could just be a cracked out theory, like Major League Baseball trying to steal our thoughts (Simpson's reference). However, Kiyosaki makes a plausible argument and at least an entertaining read. Hopefully, our education system will change and start to teach the leaders of tomorrow better personal finance management, until then be sure to bookmark Cash Saving Tips.

Check out this video from Rich Dad about his new book:

If you like this article also check out:

Rich Dad Poor Dad, What's an Asset?

Rich Dad Lesson: 3 Types of Income

Top 4 Forms of Passive Income

Know Your Debt!

Wednesday, September 22, 2010

Top 5 Articles from Cash Saving Tips

When I first stated this thing I had no idea that it would be possible to accumulate more than 40 articles. I would never have kept writing if it wasn't for the readers that came to this website. Watching the unique visitor count increase has really made me believe that I was reaching readers that were concerned about their personal finances. Thanks again for taking time out to read these articles. I hope you've found them entertaining and informative.

According to the statistics of this site, here are the top 5 articles (by pageviews):

1) Top 4 Forms of Passive Income

2) Top 7 Things You Should Not Have to Pay For!

3) Tim Hortons vs. McDonald's Coffee

4) Your Home - One of the Best Investments You'll Make

5) Know Your Debt!

Let me know which article you liked best by leaving a comment. I'll be sure to research and write more on those topics.

Keep saving!

In addition to the top 5 articles here's a nice little clip from about how to build a nest egg.

Monday, September 20, 2010

Rules of Retirement Have Changed!

We all occasionally daydream of the day when we don't have to work anymore. Images of feet in the sand and a cold beer in hand come to mind. For most of us retirement is far from reality and it may seem to far away to think about. Now with the recent changes to company and government pension funds retirement may seem more like fantasy than reality.

First of all it's important to note that the rules of retirement has changed. In the past people would work at one company for 30 years or so and get a pension where 70% of there annual salary would be paid to them for the remainder of their life. This type of retirement plan is known as a defined benefit plan. Most companies have found that a defined benefit plan is too costly to their bottom line since they have to ensure they can pay for employees that are no longer working. Therefore, companies are moving towards a new type of pension plan known as a defined contribution plan. The way this pension plan works is the employee contributes a certain portion of their pay cheque (usually 5-10%) into a registered retirement savings plan (RRSP) and the company matches the contribution.

There is a dramatic difference between these two types of pension plans. The pro to a defined benefit is that the company will ensure that you get a steady pay cheque after you retire (unless the company goes bankrupt). The con is that you have to stay with the same company for 30 years, which is happening less and less these days. The pro to a defined contribution plan is that it is usually portable, which means it travels with you if switch to a different company sometime down the line. The con is that now the employee is responsible for the management of their own retirement fund (to a certain extent, more on this in future articles), so if the markets perform horribly just as you are retiring you are up the creek without a paddle.

So now that we know the rules have changed and that our retirement is now our own responsibility, what can we do to ensure that we can retire? The simple answer is to set a goal, calculate your current cost of living, and to save and invest wisely so that your savings and passive income can support your cost of living. This is one article that can lead to endless topics, but the most important step is to realize that the retirement rules have changed and we need to change our financial planning accordingly.

For more on passive income check out the following articles.

Top 4 Forms of Passive Income

Rich Dad Lesson: 3 Types of Income

Here is a clip from of David Bach the author of Start Late, Finish Rich on saving for retirement:

For information on "The Automatic Millionaire" by David Bach check out:

Saturday, September 18, 2010

Start a Change Jar

This is a nice little tip that can add up to big bucks. All you need is a container, an old fashion piggy bank would be ideal. The picture above is a high-tech change jar that keeps track of your change on a digital display. You would be surprised how much you can save by putting all your spare coins/change into a jar when you get home at the end of the day.

Try not to reach into your change jar/container for little expenses like coffee or snacks. Let the change build up into a nice chunk of savings. If you designate this money for a specific savings goal it will be less tempting to dip into it. Label the change jar with your savings goal. Here are a couple examples of common saving goals: family vacation, retirement, paying down debt, child's education, new vehicle, or that flat screen tv you always wanted. Check out an archived article about paying off your debt: "Pay Off Debt or Invest?"

Having a change jar won't just help you meet your savings goals faster you'll also avoid carrying around a bunch of heavy coins that jingle in your pocket. Leave it and let it build up until it's full. Than go to your local bank and ask for some papers to roll your coins up and put it into your designated savings account. This can be your automatic savings plan.

Check out this additional savings tip from

Thursday, September 16, 2010

I Scream, You Scream, We All Scream for Ice Cream!

We scream for Chapman's Ice Cream that is. Chapman's ice cream is hands down, the best value ice cream in Canada. The prices for Chapman's ice cream is often better than generic no name/store brand ice cream.

I recently received a free $5 gift certificate in the mail for any Chapman's ice cream product. This sounds too good to be true, but I'll tell you how I got it. All you have to do is go to their website and fill out their online comments form.

Be sure to request a promotional gift certificate and write something that you like about their product in the comments box (i.e. like their great prices). Also, include your mailing address so they can mail you the gift certificate. It will take about 3-4 weeks for the gift certificate to arrive in your mail box, but when it does it'll taste so sweet!

Here's an additional savings tip on how to make your own ice cream at home (source:

Monday, September 13, 2010

Knock Years Off Your Mortgage and Save Thousands in Interest With This Simple Tip!

One of the proudest moments in our lives is becoming a home owner. To provide your family and loved ones a place to live and grow up is one of life's feelings. A part of realizing that dream is choosing the proper financing, since most of us will not have all the money up front to purchase a home all at once. Therefore, it is important to understand our financing options when approaching a bank or other lending institutions.

In my last article I reviewed a book by David Bach entitled The Automatic Millionaire ( This was a great personal finance book with a lot of solid tips. At the very end of the article I included a short video about how to knock years off your mortgage and save thousands of dollars in interest. The simple trick is to increase the frequency of your mortgage payment. You don't even need to increase the amount that you're paying, just the frequency!

Here's how it works. The bank constantly charges you interest on your loan. The interest is calculated based on the principal that you owe (the total amount you borrowed). With each mortgage payment you make, some money goes towards paying the interest (cost of borrowing) and paying the principal (the original amount loaned). Therefore, with each payment the principal decreases a bit. So the next time around the interest that accrues will be slightly less. This is the magic of compound interest in reverse. By changing your mortgage payment from monthly to biweekly you can save thousands and knock years off your mortgage.

Here's an example to help illustrate the amount of time and money you can save by increasing your mortgage payment frequency:

Mortgage amount: $200,000
Interest Rate: 5% fixed interest rate
Monthly Payment of $1200 or Bi-weekly Payment of $600 (same amount per month)

In this example the mortgage would be paid off 3 years and 13 weeks earlier. The amount of money saved in not paying interest would be $22,800. This could be your hard earned money that would otherwise line the pocket of your banker. Change your mortgage payment frequency as soon as possible!

Pay off your mortgage even quicker with tips from this video:

Friday, September 10, 2010

What’s Your Latte Factor? The Automatic Millionaire

The Automatic Millionaire is a great personal finance read by David Bach. Bach has written a wide assortment of personal finance books geared towards different audiences. The Automatic Millionaire is his most popular book and the one that applies to most people.

The book starts with a couple approaching Bach in their late 50’s worried about their finances. The couple approaches Bach for advice, trying to see if they are prepared for retirement. The couple has a dual income of approximately $60,000 a year, which is not a huge salary but provides them with a decent living. Bach takes a quick look over their finances and is surprised to see that the couple is well prepared for retirement. The rest of the story is about how this couple was able to become financially free on an average salary. Here are 3 valuable lessons you’ll find in this book.

1) Pay Yourself First – It is really disappointing whenever we get a pay cheque only to see how much gets taken off the top. The first person who usually gets paid on payday is not you but the government. Money is taken away in the form of Canada Pension Plan, income tax, and employment insurance. In addition you may have to pay a small fee for company benefits and insurance. All of these deductions can add up to as much as 30% depending on your tax bracket (it can be as high as 45-50% for people making over 100k). To bypass all of these deductions you can contribute to a Registered Retirement Savings Plan (RRSP), which can grow untaxed until it is withdrawn. When it is time to withdraw from your RRSP you should be retired, therefore your income is much lower (thus you'll be in a lower tax bracket) resulting in less income taxes. Another way to bypass tax deductions is to contribute to a Registered Education Savings Plan for your children. Either of these plans are great for paying yourself first and not the government.

Bach also suggests setting up an automatic withdrawal from your chequing account on payday into a savings account. It’s good to start with a small amount, like $5 or $10 each payday. Bach suggests that you can gradually increase this amount over time so that it doesn’t drastically change your lifestyle. Over time you’ll see a nice bundle of savings in your account. Another excellent personal finance read with the "Pay Yourself First" lesson is The Wealthy Barber. Check out: for more information.

2) Latte Factor – Bach defines what he calls the Latte Factor, which are the dollars that escape our grasp on a daily basis. Often these small costs build up to large quantities of money. Bach gives an example of somebody who buys a Latte each day from Starbucks. Usually it’s only about $2, but while they are in Starbucks they decide to get a croissant and biscotti which adds up to $6. Do this for 5 weekdays and we’re already at $30.

With 52 weeks in the year and 3 weeks of vacation that’s 49 weeks of Starbuck Lattes and snacks. This adds up to a whopping $1,470! The thing about the Latte Factor is that usually we spend such small amounts on a daily basis we don’t even notice or give it a second thought. You don’t have to give up your latte all together, but when you are conscious about your spending you may be able to cut it down from 5 times a week to 2 times a week. Another important note is that when we’re in a position where we’re spending it’s easy to add in a couple extra treats. For instance in our Starbucks example, it’s not difficult for us to pick up a couple snacks when all we were planning to get was a latte. If we’re conscious of the extras we can also try to cut our expenses there.

3) DOLP – this stand for Dead On Last Payment. This is Bach’s system to prioritize paying down credit cards. This system could also work on other loans such as student loans, mortgages, car payments, etc... . Really this system can apply to all loans with the goal of minimizing interest costs. See this archived article for more details:

Check out this book at your local library. With these tips you can be on your way to becoming a Millionaire Automatically!

Here's an extra tip from David Bach to take 5 years off your mortgage!

Monday, September 6, 2010

Car Rentals: So Many Options

Renting a car is an inevitable part of taking a trip. There are always several things to consider when renting a car, here’s one less thing to think about. Recently I had to rent a car from Hertz. I rented a sub compact which worked out beautifully for what I needed. When I was at the counter the clerk asked if I wanted to pay for a full tank of gas, so when I returned the car I wouldn’t have to worry about filling it. He explained that they would fill the tank with gas at a 10 cent discount to the current gas price. At the time the gas price was 90 cents/litre, so Hertz would fill the tank for 80 cents/litre. For instance, if the car has a 40 litre tank the cost would be $32. This sounded like a great deal so I said yes.

The problem with this deal is that you have to bring the car back with no fuel in the tank to receive the maximum value. It is extremely difficult to plan your trip so that you can bring the rental car back with absolutely no gas left. So any gas left in the tank will add to the cost of the discounted gas from the rental agency. You will probably be paying more to fill the tank for your rental car. This is only a good deal if you know exactly how far you are going and how much gas you’ll be using. Unless you can bring the rental car back running on fumes, you’re better off just filling the car back up and bringing the car back with a full tank yourself. Don’t get gas from the rental car company! Always bring it back with a full tank.

Check out this clip from about saving on your next car rental

Friday, September 3, 2010

Tim Hortons vs. McDonald's Coffee

The coffee wars are on in Canada. Canadians love their warm cup of joe in the morning. According to the Coffee Association of Canada, Canadians drink 2.6 cups of coffee a day. Tim Hortons is Canada's favourite low cost cup of coffee, with over 2,800 stores in Canada. There are a lot of competitors that want to get in on some of Timmy's market share, of all the low cost coffee shops available in Canada (i.e. Coffee Time, Coffee Culture and Country Style) I find McDonald's provides the best value.

Here are some quick statistics.

Not only do you get more coffee for less money at McDonald's, you can also refill your coffee when you're drinking your coffee in McDonald's. That's exceptional value! I also really like the taste of McDonald's coffee. I might even say that it tastes better than Tim Hortons coffee, but that may be unpatriotic. Next time you're getting your morning cup of joe give McDonald's coffee a shot.

For you Americans here's a little clip about the Starbucks vs. McDonald's coffee wars in the U.S.A.

Also check out the very popular Starbucks Ghetto Latte article:

Tuesday, August 31, 2010

Got Student Debt?

Getting a quality education is one of the best investments you can make. According to the U.S. Census Bureau a person with a bachelor's degree is expected to make approximately double the salary of someone who only finished high school. With a degree you won't only be making more money, but also performing work that is more engaging and requiring greater mental acuity.

Source :

That being said, it is difficult these days to get a quality education because of the rising costs of tuition. That is why many of us students have to rely on student loans. According to Statistics Canada the average government student debt owed at graduation is $19,500 for a bachelor's degree. It can be very tough to start your life after graduating with such a debt load on your back. Here are a few tips to avoid this debt and to help pay it off sooner.

1) Set Goals - A very close friend of mine had approximately $14,000 of student debt when he graduated. He set a goal to pay off the debt by the end of year. Luckily, he got a job after graduating which paid a yearly salary of about $50,000 a year. This is a good salary, however there are a lot of other living expenses to pay for when you are working, especially away from home. By setting a goal and making the payments he was able to pay it off in 8 months! A whole 4 months earlier than his goal. Write down your goal and it will become real.

2) Cooperative Education - One of the reasons my friend's student loan is less than the average is because he was in a cooperative education program (coop program). A coop program is where you work paid internships as you're getting your degree. Usually you either work an internship over the summer or at some universities you alternate school and work terms in 4 month intervals. The beauty of coop is that you make a pretty decent wage (usually better than minimum wage), get work experience in an industry that you are studying, and make contacts at companies that you may work at after graduating. The University of Waterloo in Canada has the longest running coop education program in the country. I would highly recommend going to the University of Waterloo because of their outstanding coop program (also for their outstanding engineering, math and science programs). One draw back is that the program typically takes 5 years instead of 4, but you'll be leaving school with far less debt and possibly a job!

3) Work Two Jobs - Once you've set your goals you can focus your efforts like a laser. You have a workable time frame in which you wish to pay your debt off. It's difficult to start your "real life" as long as that debt is lingering over your head so it's best to get it off your back as soon as possible. A lot of graduates work two or three jobs simultaneously to try to pay off their loan as quickly as possible. Your second job doesn't have to be glamorous as long as you're getting hours and being paid at least minimum wage. For one summer I was working two jobs simultaneously to save for my upcoming tuition costs. During the day I would work construction and at night I would work selling ice cream at a local shop. It won't be easy, but you can do it!

4) Scholarships, Bursaries, Grants and Debt Forgiveness - There are always tons of scholarships, grants and bursaries that are available to students. Sometimes there aren't too many students who apply since there is so much paper work involved such as: reference letters, writing a letter of interest, transcripts and application forms. People who get discouraged by a little bit of paper work makes your job easier. Since there are less applicants, there is a good chance you can get a scholarship, grant or bursary. There are a lot of special interest group scholarships so it's best to browse through what is applicable to you. Whether you're a woman in science, an athlete or an international student from Pakistan, there are some scholarships and grants specifically aimed to fit your circumstances. Apply to them all and you'll be pleasantly surprised when you get one.

5) Save! - Tuition fees keep increasing every year. There are always extra fees being tacked on. Since the summer, the University of Waterloo has implemented a program where our graduate student card doubles as a bus pass which I think is great. However, now our tuition has increased by about $50/term. Tuition fees continuously increase over time, so it's best to start saving early. This is really a message for those of you who are going to be attending a post secondary institution in the next couple years, or for those of you who have children. Definitely one of the best investments you can make towards your child's future is a quality education. You can open a registered education savings plan in Canada which is an excellent way to start saving for their future. For more information check out: Save early, it'll make a huge difference when you graduate!

Here are two excellent videos about student debt:
Lynnette Khalfani author of "Zero Debt for College Grads"

Dave Ramsey, personal finance expert author of "The Total Money Makeover"

For more information on debt check out:
Know Your Debt
Pay Off Your Debt or Invest?

Monday, August 30, 2010

To Clip or Not To Clip?

Recently I published an article about John Tesh's "Intelligence for Your Life" radio show ( One of his tips in his video was to not clip coupons, since retailers are usually trying to sell overpriced goods using coupons. He makes a good point, however I believe that coupons can be a great way of saving on the products that you usually buy on a daily basis. Especially for grocery products you purchase weekly, such as cereal, face wash, frozen pizzas, etc... .

After all a dollar saved is two dollars earned. Check out this archived article for more information:

I've included a link at the bottom of this site to, which is an excellent site that mails coupons to your home. To use this site you must register. After registering you can browse over 40 coupons and choose the ones that apply to you. After a couple days you'll receive the coupons in the mail. Start saving more today!

Check out this video for the serious coupon clipper:

Saturday, August 28, 2010

Top 4 Forms of Passive Income

There are limitless possibilities when it comes to generating passive income. Passive income is a way of earning income without actively trading your time for money. Conversely earned/active income is when your time is traded for money, like when we earn a wage or get paid a salary. We’re raised to believe that we should get an education, then get a secure job so we can earn an income. (For further information about the different types of income check out Although, this is an excellent way of earning a living this is not the way the wealthy earn a living. The wealthy maximize their passive income streams. Passive income also comes with huge tax breaks, which is the biggest expense in life. Therefore, we should learn to maximize our passive income streams. Here are the top 4 ways of maximizing your passive income.

1) Stocks and Bonds – this form of passive income is also known as portfolio income. Depending on the stock you purchase you will be either paid a monthly or quarterly (every 3 months) dividend. This is to reward the shareholders for the risk they take holding the stock. There are some stocks that do not pay a dividend at all, these companies believe that they produce more value for their shareholders by reinvesting the money back into the company, hopefully leading to an increase in share price. Since we are talking about passive income it’s best to choose a stable company that pays out dividends on a regular consistent basis.

When a country or company is in need of money they can issue bonds which is a form of loan. I won't be getting into the details of bond trading today, since bond trading is a very complex topic. Basically they are seen as a much safer investment than stocks, however the returns are typically lower. Bonds pay monthly coupons which is the interest on the loan. For beginners who want to get into the bond market, you can start by purchasing some bond index mutual funds with low management fees at your local bank.

2) Invent Something – people who have patented inventions can make a fortune, if their invention sells well. This is easier said then done, however we all have had that aha! moment in our lives where we thought of a great idea. The trick is writing it down, designing, testing, building your invention, finding a patent lawyer and selling your idea. Also easier said then done (passive income sounds easy but can be quite challenging to earn). However, a lot of inventors have taken this route to maximize their passive income, like the guy who invented the pet rock. You can also think of writing a book. I know of one professor who wrote a mystery novel when he retired. Not sure if it’s selling, but if you love writing you can turn your ideas into a great read.

3) Rental Property – owning rental property is definitely one of the top ways of earning passive income. There are several ways you can get into the property game. Fire sales and foreclosures pop up often, where the original home owner cannot afford to make their payments. In these cases you can often get a great bargain on property. Renting property is not going to earn you a huge income as long as you have a mortgage on the property. However, over time you will own a huge asset. Your rental property can then be your collateral for a low interest loan to purchase more property! If the idea of dealing with tenants is already giving you a headache, you can hire a property manager (your rent may have to increase). For more on investing in property check out:

4) Build a Business – building a business can be a lot of work at first, but also very rewarding. Once the business system is set up you may not have to put as much time into it if you can hire a manager to take over the daily responsibilities. The Four Hour Work Week by Timothy Ferriss is an excellent book that talks about building efficient business systems ( Another amazing read that will inspire you to become an entrepreneur is entitled Start Small Finish Big by Frank DeLuca who started the Subway franchise (

I've included a video from our Rich Dad (Robert Kiyosaki) who briefly describes the different kinds of income.

Wednesday, August 25, 2010

Bless John Tesh

On the financial road of life we will all have debt in one form or another. It is critical to be able to distinguish between good and bad debt, so that we can manage and eliminate our bad debt. Check out a previous article which is about this subject:

It is also important to note that it is extremely difficult to invest and build your net worth when you still have outstanding bad debt. Yesterday's article was about trying to eliminate the worst bad debt of them all, consumer debt!

I've included a couple short video clips from John Tesh's radio program called "Intelligence for Your Life" about getting rid of credit card debt. The John Tesh radio show is one of the best radio shows on the air today. I love how he packs so much useful information in such a short amount of time. Check out the John Tesh website for streaming podcasts or try to find him on the radio.

Tuesday, August 24, 2010

Pay Off Debt or Invest?

This is a simple question which can lead to complex answers. The short answer would be to pay off all your bad debt before attempting to invest your savings. As discussed in an earlier article there are two different kinds of debt and it is important to distinguish between the two: . But in most cases it's best just to pay off any money that you owe, because it would be terrible to waste your hard earned cash on interest.

So before we delve into the world of investing, it is best to first talk about debt. Now that you know the difference between good debt and bad debt it would be wise to tackle all of your bad debt. This would be your credit cards, vehicle payments, and the mortgage on your own home. Also included in this category should be any student loans. While you were going to school there probably wasn't any interest accruing, however a month or two after you finish school the interest clock starts. So it's best to get that debt off your back as soon as the interest starts accruing or better yet before the interest clock starts.

There's an excellent book by David Bach entitled the Automatic Millionaire. He explains a very simple method of paying off consumer debt (which is the worst bad debt) known as the DOLP system, which stands for Dead On Last Payment. Basically the best way to pay off consumer debt is to pay off your credit card with the lowest balance first, not the card with the highest interest rate. There is an interesting formula to rank which debt to pay off first. I've included a link that allows you to calculate and rank the credit cards you should pay off first .

It's important to note that it can be very difficult to invest your money for growth when you still have outstanding debt. An investment can be measured by what is called a return on investment (ROI). This is an annual rate of return that you get on your investment which is measured as a percentage. For instance, if you invested $100 in Company A and at the end of the year you receive $110 on your investment you have just received an ROI of 10%. You just made an excellent investment! However, if your credit card debt of a $100 is charging your 19% interest you're really losing 9% to the credit card companies, not to mention penalty fees for not making payments. So it's important to understand the debt that you're in and seriously consider paying it off before investigating your investment options.

I've included a video by David Bach about his DOLP system. The first minute is him trying to sell his book so I would skip to the 1 minute mark and listen to it to about the 2:20 mark. Let's get that debt off our backs and move on with our lives to a better financial future!