Lazy Man and Money announces Two Years of Lazy Man and Money. Within the announcement, he confesses that he’s had thoughts of calling it quits. I think that a lot of consistent bloggers face burnout at one point or another.

The Digerati Life writes about a family friend who purchased an extremely risky $1 million dollar home along the cliff side. Find out what happens to this “investment” through the article “Bad Investment? Losing The Million Dollar House, Literally“

Generation X Finance explains that Spam Sales on the Rise, Common Sense at an All-Time Low. Seems that frugality is back in style in the U.S and one of the things that they’re cutting back on is quality meat!

Sun’s Financial Diary has a guest post that details How to Talk about Money in any Stage in a Relationship. The topic of Financial Infidelity seems to be a popular in the personal finance blogosphere.

Money Smart Life teaches us how to Save Money on Gas By Learning How to Ride the Bus.

Brip Blap explains how to save money on camping with “into the wild…without spending a lot of money.”

My Dollar Plan gives us tips on how to save on a wedding in the article “It’s Wedding Season! Tips to Keep the Costs Down.”

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• Top 6 ways to Save on Auto Insurance
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Being frugal is popular again, as is making some money on the side. Yesterday, I saw what I thought was the perfect definition of “recession”. It was a current generation red Audi S4… with a Papa Johns sign on top. I wasn’t quick enough to snap a picture, but here is my artist’s rendering:

Is there any way that such a job could even cover the depreciation on this $50,000 car? I’ve worked as a restaurant cashier, host, and even drive-thru window person, but have never done pizza delivery. But my friends have, so I asked them for their experiences. I also found a few interesting discussions online about the job here and here. In fact, pizza delivery even has its own Wikipedia entry. Let’s take a peek into the lifestyle of a “food transportation engineer”…

The Pay
The compensation varies, but a ballpark number seems to be minimum hourly wage + ~$0.75 per delivery to cover car expenses + tips. You pay for your own gas. Some places can pay under minimum wage by treating you as a waitperson since you technically get tips. Other places will pay car expenses per mile. If your pizza parlor charges a delivery fee, you will probably get a cut but your tips will probably go down as well. A rough average for tips is about $2 per delivery (10-15%). However, tips can be hit and miss, and can also depend on things like the day of the week and neighborhood. Surprise! Many ex-drivers say that residents of upscale neighborhoods are the worst tippers.

Back of the envelope calculation: A busy 6 hour night shift at $7 an hour plus 6-10 deliveries/hour x $2 tip per delivery is about $115-$165 gross. (I’m leaving out the per delivery charge because it supposedly offsets car costs, though most drivers say it doesn’t cover all of it.)

(Aside: It’s funny how all my friends will probably remember their big tips until the end of time. I still remember my $20 tip from working as a parking attendant almost 10 years ago.)

Pros
Pie shops are always looking for delivery people, and the entry requirement is a car and a valid driver’s license. You can work flexible hours, including evenings and weekends in addition to your day job. You can also quit whenever you want.

Cons
Lots of short, stop ‘n go trips will kill your car and cut into your profit. Most people have beater cars, which is why the Audi was also surprising. Factor in the cost of more frequent oil changes, higher mileage bringing your car value down, replacing tires more often, and higher overall maintenance from wear and tear. Note that your personal car insurance might not cover accidents that occur while working. Also, gas prices aren’t getting any cheaper!

Drivers-sales workers, which includes taxi drivers and pizza delivery workers, are the 4th most dangerous job category in America, right up there with fishermen, timber workers, and construction laborers.

You are often expected to help out around the restaurant in between deliveries, including things like taking orders, food packaging, garbage disposal, and other tasks.

The Fringe Benefits
For some reason, pot and pizza seem to mix very well - from the managers to the workers to the people buying the pizza. I’ll leave it at that. And although illegal as well, taking in much of your income in unreported cash tips can be very tempting for tax evasion. Oh and of course… free pizza!

$25 Amazon/Chapters Gift Card Giveaway

It seems to be a pattern as of late that we start off the weekend with a giveaway. No, it’s not a book this time, but a $25 Amazon or Chapters gift card/certificate.

What is this contest from? Readers who sign up for free online cash back discounts under my affiliate link automatically get put into the draw. Not only do you get to save money on your online purchases, you get the chance for a free gift card. After we get so many sign ups, we randomly pick a winner.

On the same note, Great Canadian Rebates is offering 6% cash back (instead of the regular 4%) on all Chapters purchases until June 1, 2008. Might be a good time to pick up some of those personal finance books you’ve been wanting to read.

Weekend Reading

The Restaurant Blogger has tried an abundance of restaurants located in Toronto but has narrowed down his favorites in his list of Top Toronto Restaurants.

We had the opportunity to guest post on The Financial Blogger about one of my favorite topics, net worth! The guest post was about when I expect to become a millionaire.

Canadian Capitalist describes and explains the Vanguard ETF VEU. I’m showing more interest in ETF’s these days as it’s a great way to diversify at a low cost.

WhereDoesAllMyMoneyGo has another movie giveaway, simply leave a comment and you’ll be entered.

Consumerism Commentary has toned down his obsessive money tracking tendencies and explains it in his article “How to Track Your Spending: From Obsession to Reasonability“.

Canadian Dream hosted the 154th Carnival of Personal Finance and did a fine job of it. Tim included our article “Hedge Against Your Bills by Owing the Company“.

Mr. Cheap from Quest for Four Pillars explains How to Become an Expert in Anything.

Pinyo, the blogger behind Moolanomy, has created a website for voting up personal finance articles. Check out the The Official Launch of Personal Finance Buzz.

No Credit Needed writes about losing his personal finance focus, but is now back on track and lists 10 Steps For Getting Back On Track.

Stay tuned, more weekend reading to come!

$25 Amazon/Chapters Gift Card Giveaway

It seems to be a pattern as of late that we start off the weekend with a giveaway. No, it’s not a book this time, but a $25 Amazon or Chapters gift card/certificate.

What is this contest from? Readers who sign up for free online cash back discounts under my affiliate link automatically get put into the draw. Not only do you get to save money on your online purchases, you get the chance for a free gift card. After we get so many sign ups, we randomly pick a winner.

On the same note, Great Canadian Rebates is offering 6% cash back (instead of the regular 4%) on all Chapters purchases until June 1, 2008. Might be a good time to pick up some of those personal finance books you’ve been wanting to read.

Weekend Reading

The Restaurant Blogger has tried an abundance of restaurants located in Toronto but has narrowed down his favorites in his list of Top Toronto Restaurants.

We had the opportunity to guest post on The Financial Blogger about one of my favorite topics, net worth! The guest post was about when I expect to become a millionaire.

Canadian Capitalist describes and explains the Vanguard ETF VEU. I’m showing more interest in ETF’s these days as it’s a great way to diversify at a low cost.

WhereDoesAllMyMoneyGo has another movie giveaway, simply leave a comment and you’ll be entered.

Consumerism Commentary has toned down his obsessive money tracking tendencies and explains it in his article “How to Track Your Spending: From Obsession to Reasonability“.

Canadian Dream hosted the 154th Carnival of Personal Finance and did a fine job of it. Tim included our article “Hedge Against Your Bills by Owing the Company“.

Mr. Cheap from Quest for Four Pillars explains How to Become an Expert in Anything.

Pinyo, the blogger behind Moolanomy, has created a website for voting up personal finance articles. Check out the The Official Launch of Personal Finance Buzz.

No Credit Needed writes about losing his personal finance focus, but is now back on track and lists 10 Steps For Getting Back On Track.

Stay tuned, more weekend reading to come!

I’m not an insurance or benefits expert, but while looking at life insurance I wanted to compare the coverage available from my employer vs. what I could buy on my own. As with most things insurance-related, there are big variations in group life insurance coverage, so I can only speak to what I have for the most part. We get a credit each paycheck for which we can spend on health, dental, life, and disability insurances.

Maximum Coverage
For my plan, I can only get up to $500,000 of coverage for myself and partner. So if I want more, my only choice would be to look privately for equivalent term life insurance.

Ability To Find Coverage
The best thing about group insurance from work is that your risk is spread across a big pool of people, so it should be easier to be granted coverage. But many workplaces still require you provide “evidence of insurability” once you increase your coverage limit past a certain amount. This may involve a simple questionnaire, or it could require a doctor exam and bloodwork. It seems unclear exactly how “healthy” you have to be in order to qualify for increased group coverage, but I’m guessing it would preclude major pre-existing conditions like cancer or heart disease. The limit where they start checking can also vary from $5,000 to $500,000.

Portability of Insurance
When you qualify for and buy a level term life insurance policy, you are guaranteed coverage for the length of that term (10, 20, 30 years, etc.). But if you rely on your employer’s group life insurance, usually the coverage stops when you leave the job. It’s almost like a 1-year term policy. My concern is, if you have you leave your job because you are seriously disabled, then you might end up both uncovered and unable to find new insurance.

However, looking around there might be some flexibility in certain plans. For one, you might have a “Waiver of Premium” benefit that continues the insurance protection through age 65 with no further premium payments should you become disabled. Or the policy may allow you to “continue coverage through an individual term policy without evidence of insurability as long as you continue to pay premiums”. Would this still be at the group insurance rates (minus employer subsidies)? A lot of this stuff seems to be left out of my Open Enrollment Guide, so I suppose an e-mail to the correct Human Resource person would be in order.

Cost
Many people get a certain amount of “free” life insurance from work, with the option to buy more. I think anything over $50,000 of coverage is paid with after-tax money, so I plotted out the monthly cost of my group plan vs. coverage levels below. I then went to Term4Sale and found the average of the top 5 quotes for both 15 and 30-year term insurance policy (rated A+ or better), for both the best tier of health (Preferred Plus) and the lowest allowable (Standard).

If you are youngish and in good health, even a long 30-year term policy is comparable to the group rates. Even if you are in average health, the cost of my employer group insurance is comparable to the premium on a 15-year term policy.

Summary
Again, this is only based on my plan, although I found my wife’s numbers to be similar. If you are lucky to have no-questions-asked insurance with high limits and you are in below-average health, it might be good to use your group plan. But if you are looking for extra coverage for a guaranteed period of time and are at least relatively healthy, it’s probably just as cheap if not cheaper to go with an individual plan. If you are an older worker, things may tilt back in favor to group life, but I haven’t run those numbers. In any case, it’s worth a comparison before your next Open Enrollment period.

We used to just buy some extra coverage from work due to the convenience factor, but why pay more when I could both save money and have a better, portable plan?

It’s the end of month financial checkup! Lets see, where do we start?

On the income front, my wife finally started getting her maternity benefits along with the monthly UCCB payments. Even though the benefits are much less than her regular paycheck, they help take some of the pressure off.

On the expense side of things, we didn’t make any major purchases but made many.. many smaller purchases for the baby. So much so that I am now on a first name basis with the Walmart greeter. … sometimes you want to go where everybody knows your name …

Onto the markets, what is going on with the Canadian market? All time high? Wasn’t it just a couple months ago when we were all predicting doom and gloom with pending recession along with sub prime this and that? Has that all gone away? Seems that investors are confident in the Canadian market place, and it shows with the amount of money pouring into stocks like RIM and Oil & Gas Companies.

One more thing, you may notice a large drop in the mortgage balance. After all the talk in the Manulife One thread, it motivated me to take some of my savings ($15k) and dump it onto my mortgage debt. I don’t know why, but having a lot of cash around gives me a sense of security. Sometimes, however, the “feeling” of security isn’t the most efficient way to use the money.

Enough rambling, here are the numbers:

Assets: $574,450 (-1.13%)

• Cash: $4,500 (+0.00%)
• Savings: $26,800 (-27.57%)
• Registered/Retirement Investment Account: $55,200 (+5.14%)
• Pension: $ 22,350 (+0.00%)
• Non-Registered Investment Account: $19,200 (+4.92%)
• Smith Manoeuvre Investment Account: $25,400 (+0.40%)
• Investment Property: $ 124,500 (+0.00%)
• Principle Residence: $275,000 (+0.00%) (purchase price)
• Vehicles: $15,000 (2 vehicles) (-0.00%)

Liabilities: $263,820 (-5.62%)

• Investment Property Mortgage: $93,500 (-0.21%)
• Principle Residence Mortgage (readvanceable): $137,100 (-10.22%)
• HELOC balance: $25,220 (+0.40%)
• Other Liabilities: $8,000 (-0.00%)

Total Net Worth: ~$ 304,130 (+3.12%)

Started 2008 with Net Worth: $279,300

Year to Date Gain/Loss: +8.89%

Interested in seeing how my net worth has progressed up to this point? Check out my history of net worth updates.

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More free ThankYou points! Visit this link, log in, and then type in “DPR1CDW408WK” as the promotional code. You may get an error of some sort, but check your points history and you should see 100 free points credited. If you missed the last one, also try code “CITICCI508IN” for another 100 free points. Remember, ThankYou points can be used to pay back student loans as well. Via FW.

I’m happy to say that our hardwood floors are fully installed! The bulk of the credit has to go to my father-in-law, who while he has never installed any hardwood flooring before, provided the peripheral knowledge and common sense that is need in doing such home projects. My wife and I basically served as unskilled day laborers. If you’re looking to install your own wood flooring, you might want check out my previous post on picking out what type of flooring to buy and how to install it. We had a concrete subfloor, and we chose to float an engineered hardwood flooring over it. This might not be the best choice for everyone.

Prepping the Concrete Floors
The first part of installation is to make sure you have a relatively level subfloor. A rough rule of thumb is that you want to see no gaps thicker than 1/8″ of space if you lay down a 5 ft-long straight piece of wood like a 2×4 flat on the ground. (Or 1/4″ every 10 feet.) This part is important in order to avoid squeaks and squishy spots, and lazy installers (both hired and DIY) will simply lay over anything remotely flat. If you do demand proper prep and your floor isn’t flat, this can add to installation costs when contracting it out (and therefore savings if you do it yourself).

We were hoping preparation would just mean scraping excess carpet glue or drywall mud off of the subfloor. But we found that we actually had a good-sized area which was not flat at all. We tried using a hand grinder at first, but in the end we rented what they called a concrete planer in order to grind it down flat. It is a beast and we ended up with over 30 pounds of concrete dust everywhere. We had put up tarps, but it still got everywhere. This would have been horrible if we were already living in the house, luckily we weren’t. I think it cost about $250 to rent for a day.

Laying Underlayment
Next step was to lay down a thin blue foam underlayment on top of the concrete. The underlayment is designed as a moisture barrier between the wood and the concrete, reduces sound, and also adjust for the remaining minor irregularities in the subfloor. We just taped it down with duct tape. Some newer flooring products actually have this already on the bottom of the flooring.

Connecting The Pieces Together
Our flooring was tongue-in-groove, with glue applied in the grooves. Some other types allow you to simply click together, but we found this was mainly for laminate flooring. We put in spacers at the walls, as the floating floor has to be allowed to contract and expand with the seasons. Trim is added later to hide the gaps. You’ll need some sort of table or chop saw to cut the pieces to fit when you reach the other wall and at corners.

Trim and Moldings
Finally to make everything look nice, you’ll need to install moldings at walls, doorways, and transitions to other floor types. You’ll also have to cover up all the nail holes with putty so they don’t show. This all takes a lot of patience to do well, which can be tough when you’re tired of installing wood and you just want to be done already.

Final Verdict and Parting Advice…
We are very happy with the final product. I think anybody who is reasonably comfortable with tools and has the proper patience can perform this activity, the only question is if you actually want to. Either using up a week of vacation or giving up all your weekends for a month isn’t always fun, although I did learn a lot and lost some weight in the process. Oh, and there’s always the several thousand dollars in installation costs that we saved.

We do have some squishiness in the floor when walking on it, but it is not very prominent and we don’t mind. Of course it wouldn’t be there at all if we decided to do a glue-down floor, but I think it was still worth it to float given the time saved and the ability to easily fix any mistakes as we went.

As for parting advice… buy good knee pads! My father-in-law is old school and tough, and didn’t ever wear knee pads the entire time, so I figured I didn’t need them either. On the second day of installation, I started seeing red spots all over the underlayment. Did someone spill ketchup? Nope, my knees had blistered and were bleeding all over the place… Good knee pads are worth every penny. In general, it is worth it to buy the proper, quality tools for the job. If you’re doing this is as a weekend warrior type of activity, it takes a lot of determination to finish everything, so there’s no need to make things harder on yourself.

Time again for the monthly Smith Manoeuvre Portfolio update, May 2008 edition. I asked during the last update whether or not I should keep these monthly portfolio posts going, or if I should space them out a bit. I think that most of you enjoy these posts, but some may find them boring. So, I have decided that I will keep this post going providing that I have made changes to the portfolio during the month.

For those of you just joining us, The Smith Manoeuvre is a Canadian wealth strategy that utilizes a home equity loan to invest in income producing assets. The result is a tax deductible loan and portfolio that increases as you pay down your mortgage.

Onto the portfolio. It seems that this past month, the Canadian markets have taken off again and have even reached new highs. The new highs made by the index were mostly due to RIMM and POT and would have been even higher if the financials took off.

In terms of trading, there weren’t any new positions initiated, but there have been a few additions to existing holdings RY, PWF, MFC, TRP

Total Portfolio Cost Base: $15,568.75

Total Dividends / Year: $615.35

As you can see, the portfolio is still heavily concentrated in financials with a sprinkle of utilities. This lack of diversity is inevitable when investing in Canadian dividend paying stocks.

The stock that I currently have my eye on is AGF Management (T-AGF.B) which is a mutual funds management company and sports a current dividend yield of 4.50%. It is currently on the dividend achievers list with a stock price that seems to be beaten up. I’ll have to do more research as to why it “appears” so cheap. Anyone have any ideas?

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Copyright 2007 MillionDollarJourney.com - All Rights Reserved

Like scary stories? I usually stay away from the horror movies section, but I was intrigued by the idea behind of Financial Armageddon: Protecting Your Future From Economic Collapse by Michael Panzer. This is a book about why our economic system is in danger, how it will collapse, and the bleak future ahead. Keep in mind that this was initially published in March 2007, even before the peak of the subprime mortgage mess and current economic slowdown. The book is separated into four parts: Threats, Risks, Fallout, and Defenses.

Threats
Here, the author lays out a relatively convincing picture of how fragile our economic system really is right now. This is the best part of the book in my opinion, and what you should read it for. I will only touch briefly on the concepts covered.

Debt. Our nation is in huge debt. Many consumers are also in huge debt or living paycheck-to-paycheck. We spend and spend, and don’t save for a rainy day. Guess what? Neither does the government. Does this sound healthy?

The Retirement System. We all know that more people are on their own with plans like 401ks, for better or worse (mostly worse). The problems with Social Security are relatively well-known. After a few big blow-ups like United, we now know that many private pensions are underfunded. And you know what? Many public pensions are underfunded as well. This is what happens when you allow politicians who need to get re-elected every few years to make promises for the next 100 years. If you think municipal governments can’t go bankrupt, check out the City of Vallejo. In other words, the things we depend on in our old age are shaky as well.

Federal Guarantees. We all love the FDIC insurance for our bank accounts, since we can basically keep our money anywhere. But due to fractional-reserve banking, for every $1 in checking accounts a bank can make $10 in loans. In other words, if a real “bank run” occurred, the FDIC reserves would be depleted quickly. Imagine what would happen if FDIC insurance started getting revoked. He also picks on Fannie Mae and Freddie Mac, which are both allowed to do some crazy things because they are “government-sponsored” and therefore people assume the government will bail them out if something goes wrong.

The problem with this is that such government guarantees encourage such financial institutions to take huge gambles. *cough* sub-prime mortgage loans *cough*. Indeed, many banks believe themselves to be “too big to fail” because they are so critical to the system. This is how we ended up with Bear Stearns being sold for $2/share. Indeed, Bear Stearns was too big to fail, so the government tried to make the bailout as painful as possible.

Derivatives are the final threat, and are instruments designed to manage risk. The problem is that corporations believe that because they are “covered” by a myriad of derivatives, they can take on some huge bets. But these “no-risk bets” are all based on complex mathematical models, and we all know models and reality are not necessarily the same. You could safely bet that the Cubs won’t win the World Series for last 99 years, but you never know…

Risks and Fallout
Inevitably, all of the these threats are weaved into a saga in which we fall into Financial Armageddon. Economic recession and then depression. Companies faltering. Stock prices plummeting. Bonds defaulting. Real estate prices dropping further. Banks and insurance companies failing. Government guarantees being removed. Skyrocketing unemployment. Entitlement programs are cut due to the lower tax revenues. Rising crime and gang activity. The government tries to print more money, leading to hyperinflation, with the prices of food and other commodities doubling every few months.

Planning
This is the most disappointing part of the book, especially since it offers to “protect our future” on the cover. So what do we do to prepare for Armageddon?! Stop spending so much and save more money for a rainy day. Okay… What about all these dropping stock and bond values? Unfortunately, there is just some vague advice about having to be “smart” and “quick” to make money from the volatility. For the rest of us, we should simply sell everything and buy physical gold because our paper money will be inflated until it is worthless. The old “buy and hold stocks” idea is useless now. We should also buy all the physical goods we can with our cash before hyperinflation hits. Perhaps this really is the best plan, but I was hoping for something more substantial than what I call the standard “buy gold and stock up on Spam n’ toilet paper” strategy.

Summary
I enjoyed reading the first half of this book, because I do think that such a scenario can happen at least to some degree, and the books does a good job of pointing out many of the weaknesses in our financial system. Moreover, it is simply a good “doom and gloom” story that is entertaining to read. Indeed, some of it has already happened! However, I did not find much insightful information in this book on how to actually protect myself from the collapse.