Sunday, October 30, 2011

McDonald's Free Coffee from Oct 31 - Nov 6, 2011

It's the best time of year for coffee lovers. McDonald's is giving away free small coffees for a week. At some locations they won't charge to upgrade to a medium or large size. At others they may charge 0.25 or 0.50 cents to upgrade the size.

There is quite the rivalry brewing in Canada over being the low cost coffee provider. By giving away free coffee, McDonald's is hoping to claw away prized market share from their competitors. Personally I like McDonald's coffee and would choose it over Tim Hortons coffee. Check out this article for more information on why McDonald's coffee is better value:

I'm sure the numbers have changed since that article was written (prices and cup size), but McDonald's still allows you to refill you coffee if you drink it in store. This way you can be so wired that you won't sleep for days!

Here's an inexpensive way to keep your coffee grinder clean:

Sunday, October 23, 2011

Avoid Taxes

As the saying goes there are only two things that are certain in life, death and taxes. We work approximately 3 months out of the year just to pay our taxes. When we work for a pay cheque the first person who usually gets paid is the government in the form of income tax, Canadian Pension Plan (CPP) and Employment Insurance (EI). Income tax accounts for about 20% of our deductions (can be more depending on your tax bracket), while the other 10% of our deductions comes in the form of CPP, EI and any other charges (union dues, professional dues, etc...).

At the end of a working year we may be left with less than 70% of our annual salary. In addition to these taxes on our income, we are taxed when we spend. Most goods and services are cost an additional 13% which is charged in the form of a harmonized sales tax (HST) in the province of Ontario.

With all these taxes and fees it's a wonder how anyone can get ahead. Are there any legal ways to avoid taxes? One excellent way is to plan out your purchases. The province of Ontario has acknowledged that there are things necessary to life and that these things cannot be taxed. Examples are shown below. Planning your purchases based on what can and cannot be taxed can give you 13% more purchasing power with your money by avoiding HST.

Here is a list of non taxable goods an services from the Ontario Ministry of Finance website (

Common goods that are not taxable

Here are examples of the most common goods that are not taxable to anyone

  • basic groceries such as flour, sugar, spices, breads, cereals, eggs, butter, margarine, cheese, peanut butter, jam, honey, fruits, vegetables, milk and yogurt
  • food products (except for candies, confections, snack foods and soft drinks)
  • prepared foods sold by an eating establishment for $4 or less
  • children's clothing (including diapers)
  • footwear costing $30 or less
  • feminine hygiene products
  • newspapers
  • drugs and medicine sold under a doctor's prescription
  • goods designed solely for people with physical disabilities
  • vitamins and minerals.

Non-taxable services

Examples of non-taxable services include:

  • dry cleaning
  • carpet and upholstery cleaning
  • personal services, such as hair styling, barbering, and beauty treatments
  • medical and health services
  • veterinary care
  • car washing and engine shampooing
  • labour to install or repair real property or fixtures.

I'm a big advocate for not having the taxes added to the prices when we pay for goods and services. In a lot of other countries the price of goods and services include the taxes. This is convenient, however the amount we pay in taxes can be hidden in the price. Adding the tax at the time of purchase helps us stay aware of how much we are taxed. Knowing what goods are not taxed and seeing the savings is a great feeling. We work hard for our money and this is a great way to make it go the distance.

Here's a video on how to calculate you income after taxes:

Thursday, October 20, 2011

Caveat Emptor

Caveat emptor originates from Latin meaning "let the buyer beware." This phrase holds so much truth in modern times since we are bombarded continuously with marketing where ever we turn. Advertising is ubiquitous in our day to day lives and has gotten to the point where we tune it out. Although we may not be paying attention, whether it's the billboard on our drive to work or the TV commercial in between the programs we love, subconsciously the advertising seeps into our minds.

The idea of branding is the marketer's main tool to seer images of quality and trust in one's mind. Whether this is based on fact is irrelevant. The idea is to create some kind of loyalty to brands we have come to associate with certain feelings. When we see the Nike "swoosh" we think athleticism, when we see the iconic Apple logo we think sleek sexy technology.

The important thing to note is that as a consumer we vote with our dollars. We make decisions based on price and quality of the product or service. We would like to believe that our choices are purely based on logic, but when we are bombarded with multi-million dollar marketing campaigns our logic may be subdued by these forces. Being an educated consumer is the way to consumer sanctuary where we can escape the iron grip of corporate branding.

Ralph Nader is perhaps the most influential consumer advocate of our time. With his landmark book entitled "Unsafe at Any Speed," he shattered the motor industry's paradigms that vehicle owners were responsible for their own safety. Today, car industries are required to meet safety standards which make the roads safer for all of us. Ralph Nader has fought relentlessly for consumer rights, without him there would be no such thing as false advertising.

In our quest to spend our dollars as wisely as possible, it is critical to become an educated consumer to ensure that when we spend our hard earned dollars we are not just joining the heard guided by corporate marketing agencies. Instead we must stay vigilant and proceed with caution when making purchases. It's important to be skeptical about advertisement claims and question your purchase patterns. Like the saying goes, buyer beware!

I've included a link below to Consumer Reports which is a great resource when considering any purhcase (

Meet Ralph Nader!

Wednesday, October 12, 2011

Sobeys Student Discount 10% Off - Tuesdays, Wednesdays, Thursdays

Sobeys is offering a 10% student discount on Tuesdays, Wednesdays and Thursdays. I know that the Sobeys at Bridgeport and Westmount in Waterloo, Ontario has this deal. I'm not sure where else in Canada Sobeys has this deal.

If you know of any other Sobeys offering this deal please leave a comment.

Grocery Shopping Tips:

Tuesday, October 11, 2011

What's the Big Secret to Riches?

There are two schools of thought when it comes to investing in stocks. One is growth and the other is value. Warren Buffett believes that these two strategies are "joined at the hip" and that you cannot think of them separately. So what are the main differences between these two types of investment styles.

A growth investor is looking for companies that are expanding quickly. Typically these companies don't pay a dividend since the earnings are reinvested into the company so it can "grow" faster (such as Research in Motion). Whether the funds are used to grow the company faster than you could by investing the earnings elsewhere is questionable. In this case you are looking to buy these companies at a high price, hoping that the price will continue to climb.

Value companies on the other hand are companies that have good valuation metrics such as price to earnings or price to book value. Value purchases are made when the economics of the industry may be out of favour or the company has hit some kind of snag that is solvable. Usually the price will reflect these uncertainties and for that reason it may appear to be a bargain (but be aware it might be cheap for a reason). Value companies tend to offer a dividend which can be invested elsewhere or can be used to maintain your quality of life. In this case you are looking to buy low and sell high (although you could hold on to the stock for it's sweet dividends).

So what is the best investment strategy. In "The Big Secret for the Small Investor"by Joel Greenblatt, he makes a strong argument that value investing is the way to go. Be warned that I am biased, I would classify myself as a value investor so I tend to read books about value investing. This book is more than just a sales pitch for value investing, it gives deeper insight into an age old strategy of investing known as index investing.

Index investing is when you purchase mutual funds or ETF's that mimic the entire market index (TSX, NASDAQ, DOW, or S&P 500). This is a great passive way of participating in the market that will be sure to beat approximately 70% of actively managed portfolios (most of which is due to the low management fees, low portfolio turnover and transactional costs). When it comes to finding the perfect stock it can be analogous to finding a needle in a haystack, so index investing is like purchasing the whole haystack. Greenblatt goes above and beyond by testing out different index fund strategies.

Something he's noticed is that market indices are usually market capitalization weighted, meaning that as a singular stock price rises, the index causes you to own more of that stock. So what if that stock is overvalued? In this case your portfolio would be over weighted in overvalued stocks and we all know what happens when a stock is overvalued. The price increase won't continue forever and when bad news eventually surfaces a price crash ensues.

So what's the best solution. Consider an index fund oriented towards value investing, which would set up the weighting of your portfolio a little differently. Causing you to buy more of what is out of favour so you purchase more undervalued stocks (buying low selling high). This balances out your portfolio and produces higher rates of return in the long run.

Here are some wise words from the Oracle of Omaha himself: