What to do with cash?

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RYAN   By Guest Blogger Ryan Lewenza
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I’ve been writing research reports and blog posts for a long time now and sometimes I get my best ideas from the readers. Recently I had a good suggestion from a blog dog to cover the topic of what to do with cash given the very low interest rate environment. Unfortunately with yields so low there are few good options, but I’ll do my best to examine the landscape and the different options.

There has never been a better time to be borrowing gobs of money. With the Covid-19 outbreak and ensuing deep recession, central banks have slashed benchmark interest rates to rock bottom levels. Currently, the Bank of Canada (BoC) overnight rate sits at a previously unheard level of 0.25%. While millennials love these low rates, retirees, generally, loath these record low levels.

Why? Because they’ve worked hard to accumulate wealth and financial assets and now they are retired and need income from the portfolios to live off, so they are getting hosed by these low interest rates.

BoC has cut rates to rock-bottom lows of 0.25%

Source: Bloomberg, Turner Investments

Let’s first look at the safest investments you can own – Canadian government bonds. Below I plot the yields of different government bond maturities, also known as the yield curve. With our benchmark rate at 0.25% this has brought down yields across the entire curve. Currently 1-year T-bills are yielding a paltry 0.25%, with 2 and 5-year yields at 0.4% and 0.8%, respectively.

Even longer term maturities are yielding around just 1.5%. That’s not going to provide enough income to pay for a trip to Europe, much less a pitcher of beer!

Canadian Yield Curve

Source: Bloomberg, Turner Investments

Next up are GICs, a traditional safe haven for retirees. Below is a sample of current GIC rates from various financial institutions. Looking at the top-tier issuers like the banks, they’re paying roughly 0.4% for 1 year, 0.8% for 2-years and they finally get to 1% at a 3-year term. And you’re locked into these so you better not need the funds before the maturity date.

Current GIC Rates

Source: Turner Investments, Raymond James

Next up I reviewed some of the prominent money market funds and high interest savings accounts (HISAs). Currently they range from 0.7% to 1.35% and the benefit of these products is the ease to get in and out with little to no cost. We like to use these HISA ETFs and money market funds for this reason.

Now if roughly 1% yields does not pique your interest then you need to consider moving up on the risk curve by looking at short-term and corporate bond funds. Short-term bond ETFs are currently yielding around 2-2.5% while corporate bond ETFs are yielding around 3%. Not bad yields but these come with additional risk if interest rates rise or if we see a big risk-off event, which would cause credit spreads (yield differential between government and corporate bonds) to blow-out.

Lastly, investors could look at preferred shares, which pay higher yields and are dividends so they are more tax efficient. Many of the main preferred share ETFs are yielding around 4%. Now these are not GICs or government bond substitutes as they come with higher volatility. But, when adjusted for the different tax rates between dividends and interest income, at a roughly 6% interest-equivalent yield, they could be an option for those investors who can handle the additional volatility. Of course within a diversified and balance portfolio.

So looking at the different options, I believe the best options for investors looking to invest cash in a lower risk vehicle, are the high interest savings accounts and short-term bond ETFs. There you would be looking at yields of roughly 1-2%. While not great, and definitely losing purchasing power after adjusting for inflation, they are the best options (of a bad bunch) if looking for higher yields than your typical GICs.

And final point. All those adverts you see for 8% returns and no risk. Bupkis! There is a reason why they are paying you 8% and the banks are paying you 0.5%. Whether it’s income trusts, Yellow Pages, or asset-backed commercial paper, there is always more risk than investors anticipate and the ‘reach for yield’ often ends in tears. So know what you’re investing in!

Yields of various shorter-term investments

Source: Turner Investments, Company Websites
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

122 comments ↓

#1 LewenzaCountry aka Prince Polo on 09.25.21 at 9:21 am

The lead photo looks like the fat-stacks that we are going to be paying the taxman/taxwoman for the next 2-4 yr of our dear Photo-op Minister’s many-missteps. Is there a Canadian “Weird” Al that can make an “Enter Taxman” music video?

https://www.youtube.com/watch?v=yL2xRjjnKMg

I tuck you in, warm within, keep you free from sin
‘Til the Taxman, he comes
Sleep with one eye open
Gripping your pillow tight
Exit light
Enter night
Take my hand
We’re off to never-never land

#2 Dharma Bum on 09.25.21 at 9:29 am

Options for Cash:

New F150
New Tesla
New House down payment
New Boat
New ATV
New RV
New Harley Davidson
New Furniture
New Dog
More Tools
New Pool
New TV
New Phone
Vacation
If you can’t afford it, then Effin Finance IT!

https://www.youtube.com/watch?v=wzfvkqb1ddw

#3 Flop… on 09.25.21 at 9:44 am

My latest venture with cash involves wasting it.

Didn’t play the lottery for the longest time.

I spend 70 bucks a week on gas, apparently 30 something cents a litre are taxes.

I don’t even look at the price of gas signs out front anymore,I just pull in and pull my pants down, when my ride gets down to a quarter of a tank.

Instead of walking away from the gas station disgusted, with no hope, I now voluntarily hand over 75 dollars and walk away with a 1 in 64 million chance of winning the lottery.

I’ve won a few play agains, but now I have something to look forward to, even if it is marvelling at only managing to get one number on three lines.

Just like they reward you for getting lots of numbers, how come they can’t have a small prize if you can’t get match any numbers to reward loser like me…

M47BC

#4 Flop… on 09.25.21 at 9:58 am

Prince, it’s not what you want, what you really, really want, but if we can’t have Enter Taxman, then I will at least give you a psychedelic version of Enter Sandman.

It’s like The Doors and Metallica had a love child.

That’s what happens when Art versus Science…

M47BC

https://www.youtube.com/watch?v=O2NWcfvFH1M

#5 TurnerNation on 09.25.21 at 10:03 am

On the Economic Shutdowns. Think 2022-23. If not 2025. You complied. But they lied.

.New Brunswick to reinstate state of emergency as province reports record COVID-19 cases, three more deaths (atlantic.ctvnews.ca)

–From AUGUST – still true today. And look what was rolled out – all over the country. Tight timelines.

#24 TurnerNation on 08.28.21 at 1:06 pm
Things which have the permanency in Kanada:
1. Fictional ‘State of Emergency’.
2. Flags at half mast
3. CV Rules. Always the rules Comrade.
—I posted before, so much must be rolled out by September/October. Why we see the daily changes.
Our rulers are scrambling to get things into place


—-Global WW3 stuff. Began March 2020. Still more wartime rationing.

https://www.kptv.com/costco-is-limiting-how-much-toilet-paper-you-can-buy-again/article_3e4fdaeb-2110-5613-bcb9-bca584eb9ff4.html
“Costco is limiting how much toilet paper you can buy again.
(CNN) — Costco is once again placing limits on purchases of toilet paper, paper towels and cleaning supplies.”

#6 My Body My Choice on 09.25.21 at 10:03 am

CBC admits to pushing out fake news about a Conservative MP:

“The CBC ombudsman was forced to admit its article was “manufactured” “bent” “inaccurate” “sensationalized” and that “CBC failed to meet standards”.

https://tnc.news/2021/09/24/cbc-admits-to-pushing-out-fake-news-about-a-conservative-mp/

#7 Goldfinger on 09.25.21 at 10:11 am

Cash…you know what they say, it is king. Those megalomaniacs probably don’t like sharing the throne.

Garth recently noted that CDIC would fold if called upon to bail out a bank.

Crypto is a total black box of questionable Ponzi fraud. Here today. Potentially gone in 0.69ms – a lifetime in compute time.

Debt is growing like crazy. Money supply is quintupling.

Illusion built upon misdirection built upon deception built upon perception.

Then there is gold – the “crypto” you can hold in your hand.

Ha ha ha…those crazy doomsday peppers…right?

No but seriously…right?

#8 IHCTD9 on 09.25.21 at 10:29 am

Dealing with cash = choosing the lesser evil.

Like a Canadian election.

#9 Charles on 09.25.21 at 10:33 am

I am a single guy, 23 that has been working very hard for 4 years now. I am talking 60 hour weeks except around summer time which is the slower part of my job. I get 1 week off per month, so 3 weeks for the year.

My total gross income averaged $55,000 a year since I started working and have only used GIC’s, term deposits. I have maxed out all of my RRSP and reinvested the RRSP tax refunds into my TFSA. This is why I now have $41,500 in my RRSP, $23,000 in my TFSA. I aggressively save 42% of my gross income plus my reinvested RRSP refund every year so I do have also $15,000 in a higher interest savings account and $30,000 in 18 month to 5 year laddered GIC’s.

I don’t see any other way that I could of saved with simplicity almost $110,000 in 4 years, paid all my taxes, living expenses and sleep at night. I saw mutual funds charging me 1% to 2% a year just in yearly management fees and 4 years ago no financial person would even talk to me with only $5,000 in my pocket to start talking about investing even conservatively, 40% government fixed income, 20% corporate fixed income, 25% REIT’s, 15% cash, GIC’s, term deposits.

#10 Tarot Card on 09.25.21 at 10:35 am

Thanks for the blog Garth
Thanks for the post Ryan
Cash is a difficult thing
There are two scenarios
How much cash do I need within 6 to 12 months and we’re to keep that. Next what are my plans for the next five years.
I know I will need a new roof and new furnace within five years. So where to keep that?

For me I keep my short term , 6 12 months, savings in a high yield savings account as it earns bonus interest if you deposit a minimum every month.
I do have my TFSA 2022 deposit in ETFs.

For larger items in the next five years I keep my money invested in ETFs
I own ZWC, ZWB, ZEO, ZWK
All pay north of five present and pay out monthly.
My reasoning is if you by a five year GIC you get your principle back plus interest. Therefore it’s the same as a five year ETF
If you look at an ETF as a five year investment as long as it is the same price as when you buy and sell but your earning north of five percent. Is it not Similar to a 5 year GIC?

The only downside if you are forced to sell in a downturn. But that’s why they call it planning. For example I need to buy my 2022 TFSA in a few months so should I sell my ETFs now in a rising market and forgo 4 months of dividends ? And park it is cash? But even a 15 percent pull back my ETF that I bought January will still be higher !

So a real life scenario.

This blog advocates being fully invested and holding for the long term. So in my mind your ETF investments will always be higher in the long term so why not collect a higher yield with ETFs?
5 year GIC equals five year ETF

Have a great weekend everyone!

#11 Woke up this morning... on 09.25.21 at 10:37 am

“Can we speak openly and honestly about this topic?

Can we communicate clearly without fear of reprisals?

Is it possible to hear an opinion you don’t agree with without hating that person?

The problem of Coronavirus is small compared the framework that we are discovering holds it. A framework of disdain, contempt and conflict.

As long as we forget fundamental basic values; kindness, open communication, tolerance, if we forget those things, there is no society worth saving no matter what you believe.”

Russell Brand – voice of reason?

https://www.youtube.com/watch?v=y0PYlLQn_YM

#12 covid is over on 09.25.21 at 10:44 am

preferred share etfs are a massive rip off. do some research and buy individual prefs. there’s one service i know of that does an incredible job recommending individual prefs.

#13 Ponzius Pilatus on 09.25.21 at 10:50 am

Stashes of $10 bills?
The professional money launderers in the Vancouver Model are using $20 bills.

#14 Concerned Citizen on 09.25.21 at 11:15 am

It’s called financial repression, and it’s been central bank policy since 2009. And now that central banks are no longer even pretending to manage inflation – despite it being their official mandate – we can expect real rates to remain highly negative for years (if not decades) to come.

“While millennials love these low rates”

I don’t think that’s right. Millennials hate low rates, as it means they need to borrow $1M just to afford a 2 bedroom bungalow in a bad part of Nowheresville, Canada.

The only entities that like low rates are the overleveraged and zombie companies – and thanks to the central banks, there are lot more of those every day.

#15 Jake on 09.25.21 at 11:19 am

Re #1

Had they been in control during covid, the Cons may have been more fiscally prudent but would have been more lax resulting in far more deaths than we have today. Alberta is our example of the health care future we just sidestepped.

#16 [email protected] on 09.25.21 at 11:26 am

No (dis)honourable mention for the high interest crypto savings options? LOL

#17 mike from mtl on 09.25.21 at 11:30 am

This is a perfect example of “there is no alternative”.

Domestic bonds and GICs pay squat, dividends break-even, preferreds carry great risk, stonks though have delivered but are priced sky-high.

Given real world inflation, not the ‘official’ fiction, is anywhere from 5-20% depending on what, besides RE is deeply negative.

Thanks FED and BoC!

#18 RichardTO on 09.25.21 at 11:32 am

I consider Enbridge common shares my virtually “risk-free” investment.

Highly entrenched, regulated business with contractual cash flows that pays a 7% dividend.

This is the closest thing I have to a bond in my portfolio. I assume an actual inflation rate of at least 5% averaged for the past few years (closer to 15% this year) and none of the other garbage like bonds, various government debt comes remotely close to offsetting that.

#19 Tony on 09.25.21 at 11:32 am

I see your chart of GIC rates. There are many other financial institutions that are CDIC, provincial deposit insured in Ontario and the rest of Canada that pay much higher than 1.36% or even 2.0% for 3-5 year GIC rates, 2.5% and 2.6% 4, 5 years stand out the most.www.cannex.com. It pays to shop around for the highest GIC rates.

#20 millmech on 09.25.21 at 12:10 pm

DF.TO
QYLD
I split my cash holdings evenly amongst these two, sleep like a baby and enjoy the returns, no risk no reward even for cash.

#21 Franco on 09.25.21 at 12:11 pm

Concerned Citizen, they call it financial repression, I call it socialism, communism, theft. Lon interest rates, high inflation for years, they were lying decades ago as they changed the correct way of calculating CPI, other inflation measures.

Even stock markets the last 20 years have done very poorly after inflation, taxes, real cost of living. This is what happens when marxism, socialism, communism feeds into the education, banking and media systems. I know, I came from Argentina in the mid 80’s to Canada.

#22 Sail Away on 09.25.21 at 12:17 pm

US citizens can buy Series I treasury bonds paying 3.54%. $15k per person per year and can also be bought for minors. It’s a nice building block for a family dynasty:

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

#23 Dogman01 on 09.25.21 at 12:33 pm

What do you think of tools such as ZPAY.
https://www.bmogam.com/ca-en/advisors/zpay-bmo-premium-yield-etf/

It took a 15% haircut during the Covid dip but bounced back quickly. Seems to hover at $30 with 6% payout.

I use my HELOC for short term cash flow needs, if markets tank I can absorb two years of income support with it so do not have to sell into a storm to generate cash. Hence ZPAY seems a decent holding tank.
With Inflation roaring over 3.5% it is a guaranteed purchasing power loss on anything safe.

#24 Quintilian on 09.25.21 at 12:34 pm

Basically, you can lock into a 1-year term for zero return or a 5-year term for zero return.

But if you really want to add insult to your injury, choose the 5- year term so that your local bank can lend the money out to the speculators.

#25 Dogman01 on 09.25.21 at 12:39 pm

#1 LewenzaCountry aka Prince Polo on 09.25.21 at 9:21 am

How about a greatest list hits:

Enter Taxman – https://www.youtube.com/watch?v=yL2xRjjnKMg

“The Canadian Dream” https://www.youtube.com/watch?v=tWJ5QapOFzI

“S-O-CIA-LISM is here to stay”
“Cause everything moves really slow when its 40 below”

“Rows Of Houses” https://www.youtube.com/watch?v=fzawkvDmERA

#26 The Real TRUTH on 09.25.21 at 12:44 pm

Here are some ideas on what to do with CASH!
JUST THE FACTS…..

Charlie Bilello
@charliebilello
· Sep 23

2021 Returns…

Solana $SOL: +9,721%
Dogecoin $DOGE: +4,726%
AMC $AMC: +1,786%
GameStop $GME: +915%
Moderna $MRNA: +335%
Ethereum $ETH: +326%
Crude Oil $USO: +56%
Bitcoin $BTC: +54%
Commodities $DBC: +35%
S&P 500 $SPY: +20%
Bonds $AGG: -1%
Gold $GLD: -8%
Gold Miners $GDX: -17%

#27 Linda on 09.25.21 at 12:47 pm

‘But Ryan, everyone is making out like a bandit with those ‘totally safe’ 8%+ investments!’. Insert wide eyed naive look here. Or crazed hopeful because ‘it must be true because I want it to be true’ look. Whatever. A large part of the RE insanity is due to folks thinking they will make out like bandits financially. They see the RE as a guaranteed winning lottery ticket to wealth & without having to wait years before cashing it in.

#28 Dogman01 on 09.25.21 at 12:53 pm

#9 Charles on 09.25.21 at 10:33 am

https://canadiancouchpotato.com/

“You have brains in your head.
You have feet in your shoes.
You can steer yourself any direction you choose.
You’re on your own.
And you know what you know.
And you are the guy who will decide where you go.”

#29 Sail Away on 09.25.21 at 12:58 pm

While I was away hunting, did anyone talk about our hero Elon’s historic civilian spaceflight? Another first for humankind. What a guy.

https://www.cbc.ca/news/world/spacex-billionaire-isaacman-earth-1.6181465

#30 Pete on 09.25.21 at 1:19 pm

Sail Away, years back someone told me about real return bonds in Canada. Is this similar to the US I Treasury bonds? If so, where can you buy them.

#31 westcdn on 09.25.21 at 1:25 pm

I don’t mind buying individual Preferred shares. If the issuing company has low debt to equity and good cash flow and prospects, I may step in. I particularly like issues where the preferreds are a small portion of shareholder equity. The macro environment matters bigly to future interest rates but I am sitting on capital gains and decent yields right now.

I have started nibbling at equities but want to go through October before committing fully plus I have bills to pay and a budget. I forgot to buy a lottomax ticket – saved myself $5 but you can’t win without a ticket.

#32 June on 09.25.21 at 1:26 pm

I don’t know how true this is but a Canadian schedule 1 bank called Wealth One Bank has a promo for a 5 year fixed rate GIC at 2.88%, annual or compound option. Compounding the interest might make sense in a TFSA, RRSP, RESP. This is 15.2536% total compound interest over 5 years.

#33 cuke and tomato picker on 09.25.21 at 1:30 pm

WONDERFUL TO SEE OUR PRIME MINISTER WITH THE TWO MICHAELS. HE WORKED VERY HARD TO GET THIS DONE THANK YOU MR. TRUDEAU WELL DONE.

#34 Nonplused on 09.25.21 at 1:36 pm

Good article Ryan but unfortunately the investment landscape has changed significantly. The “base” of the cash portion of any B&D portfolio must now include the following (recent rate of return in brackets):

Used motorcycles (15%/y r.o.r)
Used Toyotas (10%)
Power equipment (5%)
Alcohol & tobacco (4%)
Ammunition (30%+)
Trucks of any kind (7%)
Diesel trucks (30%)
RV’s and boats (15%)
Building materials (10-100% depending on timing)
Real estate (up to 30%)
Utility trailers / farm / construction equipment (20%)
Used cars (7%)
Collectables (15-500%)

I expect things like generators and solar panels to join the positive rates of return soon but for now China continues to flood the market, so buy those too while they are cheap.

Buy all the things is now an investment strategy. Don’t matter what it is, if it runs and stores well buy it and put it in the garage. And best of all the CRA probably won’t ever bother you about the $200 you made flipping a used snow thrower.

#35 Prince Polo on 09.25.21 at 1:41 pm

#4 Flop… on 09.25.21 at 9:58 am
Prince, it’s not what you want, what you really, really want, but if we can’t have Enter Taxman, then I will at least give you a psychedelic version of Enter Sandman.

It’s like The Doors and Metallica had a love child.

Thanks Flop! Alas, it’s probably too mellow to scare the bejeezus out of Canadians.

===============================

#15 Jake on 09.25.21 at 11:19 am
Re #1

Had they been in control during covid, the Cons may have been more fiscally prudent but would have been more lax resulting in far more deaths than we have today. Alberta is our example of the health care future we just sidestepped.

I see your federal health-care fearmongering, which is mostly theoretically (isn’t it the provincial govts that manage health care?) I suppose it was all sunshine & lollipops during the previous Libs reign?

Let’s see: federal cabinet woman-bullying, $610M on unnecessary election, WE-scandal, lies about electoral reform, several ethics breaches by our dear Photo-op Minister himself, deficits galore since 2015, and future deficits projected to last until 2070: https://financialpost.com/opinion/opinion-canadians-deserve-better-than-five-decades-of-deficits

I think we all need to grip that pillow tight until the Taxman, he comes. Next up, a pillow tax since we’ve run out of legit ideas! (Try cutting spending?) Lol – yeah, I know how preposterous that sounds…*face palm*

#36 George on 09.25.21 at 1:43 pm

Why do preferred shares ETF’s, pay almost double compared to the most 5 year GICs. Also, corporate bond ETF’s are at last 20% to 40% higher than most 5 year GICs, why?

I only own and owned physical rental real estate, my physical principal residence and never financial assets, investments. My extra cash just sits in a bank account collecting 1.25% a year until I need it or reinvest it.

#37 Future Charles on 09.25.21 at 1:47 pm

#9 Charles

Nicely done at your age. Have you plugged it into https://www.imfingo.com to see how it could work out in future?

#38 Philco on 09.25.21 at 1:55 pm

#27 Linda on 09.25.21 at 12:47 pm
A large part of the RE insanity is due to folks thinking they will make out like bandits financially. They see the RE as a guaranteed winning lottery ticket to wealth & without having to wait years before cashing it in.
———————————-
They have made out like bandits…..I have and bought my first place in 1989.
Where can you invest with leverage and live in your asset?
Its a forced savings plan…..
They just picked up speed due to monetary policy, but also demand is there.
There also is pride of ownership for most.
You can add your own sweat equity.
Oh and its capital gains free when you sell…for now.
What is not to like? Show me another vehicle? Most are in for the long haul also.

#39 Ed on 09.25.21 at 1:57 pm

???Jake

Had they been in control during covid, the Cons may have been more fiscally prudent but would have been more lax resulting in far more deaths than we have today. Alberta is our example of the health care future we just sidestepped.???

Alberta has a death rate 25% below Canadian average with fewer restrictions. Ontario & Quebec should have followed Alberta’s model and saved lives.But go ahead an spread BS as thats what lefties do.

#40 Leeza on 09.25.21 at 2:07 pm

It looks like to me the only good thing about having cash for someone that is very risk averse and will not even lock in a GIC sitting in a savings account get low interest is not having credit card debt paying 11% to 30% interest rates and a whole host of fees.

Heck, even those reverse mortgage rates I saw a few blogs back at 5.14% to 6.49% for 5 year terms and don’t forget they compound plus fees. They look pretty high in this low interest rate environment the media keeps hammering us with.

#41 BC Renovator on 09.25.21 at 2:07 pm

Great post.

For Yield I like Enterprise Product Partners (ticker EPD).

Lots of upside and pays an 8% dividend

#42 Dolce Vita on 09.25.21 at 2:15 pm

TPRF 4.18% monthly dividend, $11.04/share, 1 yr forecast is $14.50/share.

Use them as they are counter cyclical. When all else goes down they keep on chugging along.

In Canada, they meet inflation at 4.1%. *

2% inflation rate in Italia so for me they make sense.

———————

* Ryan your ideas are fine, better than leaving money in a deposit account, but almost all of your recommendations do not beat or meet the current Cdn inflation rate.

True they are short term but a TPRF type stock accomplishes that with monthly dividends and you get steady price appreciation.

And it’s TD Bank not some start-up.

#43 DON on 09.25.21 at 2:34 pm

#3 Flop… on 09.25.21 at 9:44 am
My latest venture with cash involves wasting it.

Didn’t play the lottery for the longest time.

I spend 70 bucks a week on gas, apparently 30 something cents a litre are taxes.

I don’t even look at the price of gas signs out front anymore,I just pull in and pull my pants down, when my ride gets down to a quarter of a tank.

Instead of walking away from the gas station disgusted, with no hope, I now voluntarily hand over 75 dollars and walk away with a 1 in 64 million chance of winning the lottery.

I’ve won a few play agains, but now I have something to look forward to, even if it is marvelling at only managing to get one number on three lines.

Just like they reward you for getting lots of numbers, how come they can’t have a small prize if you can’t get match any numbers to reward loser like me…

M47BC

********
Just got gas and there’s no point looking at the price. Someone has to pay for lost profits last year.

Maybe if we ignore the inflation it will go away.

#44 IHCTD9 on 09.25.21 at 2:42 pm

Right now, our cash hasn’t hung around long enough to deflate. Just feeding the investments and two educational institutions currently inhales 750.00/wk. Yes, chump change for most blog dogs, but that’s real money here at the bunker complex. Over 15K going out the door next week – tuition/heating fuel/property taxes.

Maybe I should try out Flop’s “no-pants” strategy…

#45 Nonplused on 09.25.21 at 3:00 pm

#43 DON on 09.25.21 at 2:34 pm

Just got gas and there’s no point looking at the price. Someone has to pay for lost profits last year.

Maybe if we ignore the inflation it will go away.

———————————-

Most of the recent increases have been due to the phasing in of Trudeau’s carbon taxes. And it ain’t over yet, the big hits are still to come.

In addition to my other recommendations, a dog sled and wood stove might be good investments.

#46 Planetgoofy on 09.25.21 at 3:03 pm

#33 cuke and tomato picker on 09.25.21 at 1:30 pm
WONDERFUL TO SEE OUR PRIME MINISTER WITH THE TWO MICHAELS. HE WORKED VERY HARD TO GET THIS DONE THANK YOU MR. TRUDEAU WELL DONE.
———————————————-
What grade are you in?? How’s the yelling going for you?
They U.S. federal prosecutors cut a deal with the CCP for Meng Wanzhou.
Socks had jack Sh*t to do with it. It was a bargaining Chip because she was ceased on YVR turf.
I guess also why socks is in power…dimwits like you?
Rest assured the USA had more to do with the release. They owed us one.

FYI Trudeau has ties the the CCP hosted a $25,000.00 plate dinner for a shwack of them as he is bought and paid for.
Head back to the patch…

https://www.ctvnews.ca/business/huawei-executive-returns-as-china-releases-2-canadians-1.5600345

#47 Adam on 09.25.21 at 3:06 pm

I got injured on the job in 2019 and tried to replace most of my employment income and being 56 and working in construction, precast, I had it after 32 years working. I thought, I needed to replace all 100% of my gross income but there are CPP, EI, union deductions totaling $6,000 a year that I would not pay when I have no employment income. This was good news. I had to only replace $65,000 not $71,000.

I did get my CPP disability for 9 months in until near the end of 2019 which is now $1,407 a month. My RRSP just matured a month later after that, $750,000 in which I put it all in a 10 year, 3.30% Westoba Credit Union term deposit/GIC with the annual interest paid directly deposited in my savings account. This gives me another $24,750.

My severance and retirement package totaled $225,000 paid in 2019, 2020, took a decent tax hit, paid alot of taxes, got some back, maybe 20% of that back from RRSP contributions and basically invested $175,000 in a 2.90%, 5 year GIC, Oaken Financial. The interest gets paid into my savings account every year. This gives me another $5,075. The rest of my GIC, term deposits, investments are in a $235,000 5 year GIC, 3.40%,Alterna Credit Union bought in 2019 3.40% with interest paid into my savings account. This gives me another $7,990 interest a year.

I have 18 months of expenses in a $35,000 cashable GIC after 30 days that does not pay much interest, $375 a year but it is very liquid. Now with almost $55,000 of my gross income replaced, and being able to claim due to my disability the disability tax credit, amount which gives me a tax savings of $1,523 per year, I never got before so really I had achieved an 87% replacement of my gross income. I have been saving alot of gas, wear and tear, repairs on my car as well not driving 25 kilometers per day which brings in savings too every year. It was a long process to sort all this stuff out taking a 1 year or so. Good thing my wife and daughter helped me through all this.

#48 Big Bucks on 09.25.21 at 3:30 pm

Ummm. The author needs a bit of an education here.

The yield to look for in bond fund is Yield to Maturity not the Coupon Rate.

YTM is best estimate of a future return on the bond fund. Keep in mind that this only a rough estimate as the ETF is subject to other factors.

Time to go back to finance school

#49 Nonplused on 09.25.21 at 3:31 pm

#2 Dharma Bum on 09.25.21 at 9:29 am
Options for Cash:

New F150
New Tesla

——————————–

I am no fan of electric vehicles, but I have to admit I find the new F150 Lightning and the now available F150 hybrid are interesting. I’d probably get the hybrid to avoid relying on charging stations but I think both are going to be game changers.

Here is why you can now bid adieu to the “Cyber Truck”.

The F150 does not require much in the way of structural upgrades to carry the batteries.

The frame and the body, as well as all the accessories, are already being mass produced with the associated economies of scale. This keeps costs down and also means parts will be readily available from day 1.

Ford has given some thought as to other things you might be able to do with a big battery pack including contractor and RV power and home back up.

It doesn’t look like a freak show.

Ford has a much more extensive dealer network including service.

It looks like Ford will have 200,000 pre-orders before even going into production, guaranteeing a successful first year run and maybe even a profit.

Next up: BMW eats the electric car market. The Mustang Mach E or whatever probably sells some units as well.

Sell your Tesla stock if you have any because there will be a rush to the exit.

#50 Cto on 09.25.21 at 3:32 pm

Financial repression
Net negative interest rates and an explosion of debt.
I was one of those x geners that had cheap parents that instilled in me the “virtues” of saving for a rainy day. This was once considered a sound value in a person.
Now I am persicuted as an enemy of the state!!!
Yes, I have also changed and invested in riskier assets just to find yeild, however non of this even comes remotely close to housing returns that have and will always be supported by government and my taxes.
So far, those crazies that attend the housing expoes have yet to be proven wronge…infact many of those guys have millions and millions $$$ purely made from housing in our land. Whos the greater fool again????

#51 Big Bucks on 09.25.21 at 3:32 pm

FYI the yield to maturity for the Vanguard Short term Bond fund is about 0.8%

#52 Don Guillermo on 09.25.21 at 3:43 pm

133 Ponzius Pilatus on 09.24.21 at 10:43 am

Do you think Donny G. cares or understands what’s really going one in Mexico from his gated community
************************************
But if I was going to live in a gated community this one might work – $400K USD includes furniture and golf carts. Beware, the majority of your neighbors could be Mexicanos.

https://www.point2homes.com/MX/Home-For-Sale/Sinaloa/Mazatlan-Municipality/Mazatlan/El-Cid/Private-El-Cid-Home/112014119.html#lg=1&slide=0

#53 Damifino on 09.25.21 at 3:48 pm

#46 Planetgoofy

Tip: When you see ALL CAPS, you see a troll. Don’t reply.

#54 S.Bby on 09.25.21 at 4:42 pm

Is booze and hookers an option?

#55 Ryan Lewenza on 09.25.21 at 4:42 pm

Big Bucks “ FYI the yield to maturity for the Vanguard Short term Bond fund is about 0.8%”

To be consistent I used trailing 12 month yield. Interest rates will go up over the next year and so will the yield. – Ryan L

#56 S.Bby on 09.25.21 at 4:44 pm

#46 Planetgoofy

thanks for saying that it saves time for the rest of us.

#57 Ryan Lewenza on 09.25.21 at 4:47 pm

Big Bucks “ Ummm. The author needs a bit of an education here.

The yield to look for in bond fund is Yield to Maturity not the Coupon Rate.

YTM is best estimate of a future return on the bond fund. Keep in mind that this only a rough estimate as the ETF is subject to other factors.

Time to go back to finance school”

Hmmm. I completed a double major in finance and economics at university and hold the CFA and CMT designations and have 25 years of market experience but thanks for the advice ‘Big Bucks’. – Ryan L

#58 Philco on 09.25.21 at 4:48 pm

Ryan I like a lot of cash only if one has other significant producing investments. I squeezed Tangerine for 1.5 points as I carry a lot of cash. Wayyyy in the 6 digits you can get them talking.
Better than Bonds as I have instant access for opportunities like large market drawdowns.

#26 The Real TRUTH on 09.25.21 at 12:44 pm
———————–
People hate gold now so that’s the time to make some good spec purchases. ie NDM wiped out put in a bottom so I bought a pile.
Was up $7,000.00 in one day….I would ONLY recommend this if you are VERY good at TA. Bull flag formed-check/undervalued-check/ over hated-check.
I’m confident in a $60,000 pay cheque in 6-12 months on that one.

#59 S.Bby on 09.25.21 at 4:53 pm

It seems anybody can become a general contractor these days:

https://globalnews.ca/news/8205777/covid-pandemic-women-skilled-trades/

#60 UCC on 09.25.21 at 5:39 pm

blockquote {
border-left-style: dashed;
border-left-width: 4px;
border-left-color: #ffcc00;
padding: 20px;
}

#49 Nonplused on 09.25.21 at 3:31 pm
#2 Dharma Bum on 09.25.21 at 9:29 am
Options for Cash:

New F150
New Tesla

——————————–

I am no fan of electric vehicles, but I have to admit I find the new F150 Lightning and the now available F150 hybrid are interesting. I’d probably get the hybrid to avoid relying on charging stations but I think both are going to be game changers.

Here is why you can now bid adieu to the “Cyber Truck”.

The F150 does not require much in the way of structural upgrades to carry the batteries.

The frame and the body, as well as all the accessories, are already being mass produced with the associated economies of scale. This keeps costs down and also means parts will be readily available from day 1.

Ford has given some thought as to other things you might be able to do with a big battery pack including contractor and RV power and home back up.

It doesn’t look like a freak show.

Ford has a much more extensive dealer network including service.

It looks like Ford will have 200,000 pre-orders before even going into production, guaranteeing a successful first year run and maybe even a profit.

Next up: BMW eats the electric car market. The Mustang Mach E or whatever probably sells some units as well.

Sell your Tesla stock if you have any because there will be a rush to the exit.

Couldn’t find a hybrid in this part of the country, so I leased the regular F150. Hopefully the manufacturing of the Lighting will turn out positively in 3 years, just in time for a new lease.

#61 Flop… on 09.25.21 at 5:41 pm

Yeah, I know tomorrow is the real estate day, but my only pair of pants are in the wash, so I ain’t going anywhere.

Hit it Ernie.

Remember a couple weeks ago I said in Vancouver every now and then I see someone grab some relative real estate value as most people are sitting on their hands this time of year.

The details…

1437 e 22nd Ave, Vancouver.

Liveable detached house.

Originally asking 1.68

Assessed at 1.53

Just sold for 1.28

Ponzie can translate…

M47BC

https://www.youtube.com/watch?v=Y34KDxB43fk

#62 Penny Henny on 09.25.21 at 5:43 pm

#3 Flop… on 09.25.21 at 9:44 am

Just like they reward you for getting lots of numbers, how come they can’t have a small prize if you can’t get match any numbers to reward loser like me…

M47BC

/////////
play Keno. match no numbers and win

#63 The West on 09.25.21 at 5:44 pm

#29 Sail Away

https://futurism.com/the-byte/spacex-building-military-rocket-to-ship-weapons-anywhere-world#:~:text=SpaceX%20and%20the%20Pentagon%20just%20signed%20a%20contract,as%20early%20as%20next%20year%2C%20Business%20Insider%20reports.

#64 ogdoad on 09.25.21 at 6:13 pm

Great advice, thanks.

I have a different use for cash, though..beer, liquor and weed stores. That way big data doesn’t know how much of a substance abuse problem I…WE all have.

Og

#65 SoggyShorts on 09.25.21 at 6:14 pm

#47 Adam on 09.25.21 at 3:06 pm

It sounds like you’re OK for now, but aren’t your ~3.5% returns a little scary when inflation is higher than that?

#66 IHCTD9 on 09.25.21 at 6:26 pm

I never thought I’d like a drum cover until YouTube came along. Feast your eyes and ears on this. When it comes to music, this is my favourite genre (hey, child of the 80’s), one of my favourite bands thereof, and one of my favourite tunes from same:

https://www.youtube.com/watch?v=-TQ1jpkw-E8

The best thing about this vid is how into it she is!

#67 Yukon Elvis on 09.25.21 at 7:12 pm

DELETED

#68 Sail Away on 09.25.21 at 7:25 pm

#49 Nonplused on 09.25.21 at 3:31 pm

It looks like Ford will have 200,000 pre-orders before even going into production, guaranteeing a successful first year run and maybe even a profit.

Sell your Tesla stock if you have any because there will be a rush to the exit.

———

Sell Tesla? When the cybertruck has 1.25M preorders and the company has first-mover advantage?

That would be illogical.

https://www.google.com/amp/s/insideevs.com/news/524156/tesla-cybertruck-preorders-exceed-1250000/amp/

#69 Gravy Train on 09.25.21 at 8:22 pm

#3 Flop… on 09.25.21 at 9:44 am
“My latest venture with cash involves wasting it.” Not at all surprising.

“Instead of walking away from the gas station disgusted, with no hope, I now voluntarily hand over 75 dollars and walk away with a 1 in 64 million chance of winning the lottery.” No, it’s a 1 in approx. 14 million chance—not as bad as you thought.

“I’ve won a few play agains, but now I have something to look forward to, even if it is marvelling at only managing to get one number on three lines.” The chances of getting less than two numbers right is approx. 85%!

“Just like they reward you for getting lots of numbers, how come they can’t have a small prize if you can’t get match any numbers to reward loser like me…” I think Boom! would want me to explain the probabilities to you before you get yourself in too much trouble, so here goes:

Chances of getting X numbers right:
X = 0. 6,096,454/13,983,816 = 43.6%.
X = 1. 5,775,588/13,983,816 = 41.3%.
X = 2. 1,851,150/13,983,816 = 13.2%.
X = 3. 246,820/13,983,816 = 1.8%.
X = 4. 13,545/13,983,816 = 0.1%.
X = 5. 258/13,983,816 = negligible
X = 6. 1/13,983,816 = negligible

As you can see, you’re most likely to get none of the numbers right. If you’re wondering how the calculations were done, here’s a little hint: use the hypergeometric probability density distribution.
https://en.m.wikipedia.org/wiki/Hypergeometric_distribution

Hope this helps! Maybe Sail Away can check my math. :)

#70 The Watcher - 11 Post on 09.25.21 at 8:23 pm

“Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.”

That is what you have in your pocket on the ten dollar bill. Your Freedom of Rights…..how quickly we forget!

#71 espressobob on 09.25.21 at 8:32 pm

A balanced portfolio of equities and fixed income seems the practice of old. While this method has merit it doesn’t really work the way it used to.

Actually I keep roughly 40 to 45 % cash. Wait patiently for a good old fashioned correction and start buying at predetermined buy in points. When Mr market recovers (always does), then the profit taking takes over.

This is not for everyone, it takes a load of gumption buying into a declining market. Fear is profitable and way more fun than a paultry yield.

#72 BillyBob on 09.25.21 at 8:49 pm

#33 cuke and tomato picker on 09.25.21 at 1:30 pm
WONDERFUL TO SEE OUR PRIME MINISTER WITH THE TWO MICHAELS. HE WORKED VERY HARD TO GET THIS DONE THANK YOU MR. TRUDEAU WELL DONE.

======================================================

WELL, EXCEPT FOR THE NEARLY THREE YEARS HE LEFT THEM TO ROT IN A CHINESE PRISON ON FALSE CHARGES WHILE MENG WANZHOU ENJOYED LIVING IN ONE OF HER MULTIPLE LUXURY HOUSES IN VANCOUVER.

I HIGHLY DOUBT THE TWO MICHAELS ARE QUITE AS ENTHRALLED WITH YOUR DISGUSTINGLY OPPORTUNISTIC HERO AS YOU ARE.

#73 mark on 09.25.21 at 9:04 pm

Thoughts on floating rate and inflation protected options?

#74 pete from st. cesaire on 09.25.21 at 9:05 pm

You’d best be hoarding away those new $10 bills shown in the top photo. If Canada goes the way of India and gets rid of all large denomination bills (and I think that’s in the cards) they’ll likely say that all older bills are no longer currency and that only the new “vertical” issues are legal tender. So if you want to have some cash on hand, start hoarding these up. When TSHTF your cash withdrawls will be limited to perhaps $50/month.

#75 Hannibal on 09.25.21 at 9:13 pm

Nice article.

Not to sound pedantic, but HISA products are not technically mutual funds. They are simply savings accounts with whoever is offering the HISA. Like ING in your example or any other of the big banks and credit unions

Keep up the good work!

#76 Planetgoofy on 09.25.21 at 9:22 pm

#56 S.Bby on 09.25.21 at 4:44 pm
#46 Planetgoofy

thanks for saying that it saves time for the rest of us.
——————————
LOL just having fun. But
Sadly the 2 M’s were abused and put into solitary while you know who shopped at Bloomingdales. Going on the data I could get of course. When Mr SOCKs owns CBC its hard to get the real hard questions asked.
Ya a big pat on the back for no ball Socks.

#77 Planetgoofy on 09.25.21 at 9:35 pm

#72 BillyBob on 09.25.21 at 8:49 pm
————————-
LOL saw that after I posted.
Garth needs an IQ test in order to enter this blog…..
The floor could be low but we should still be OK…HA

#78 Flop… on 09.25.21 at 9:46 pm

Gravy, I looked at the odds according to the lotto corporation.

I spend $5 a week and for that amount they state the odds are 1 in 33 million.

Not as bad as I thought but more people pile in when it jackpots, so you’ll probably share it.

So, you’re saying that I’m a chance…

M47BC

https://lotto.bclc.com/lotto-max-and-extra/prizes-and-odds.html

#79 Drinking on 09.25.21 at 10:22 pm

#5 TurnerNation

The word of freedom of choice has been so ridiculously sabotaged by the MSN and people so afraid in the Blog industries of losing there privilege’s online to speak out. I would describe it as a huge insult to all that perished (including one of my grandfathers and 3 great uncles) who perished in the great war for our freedoms. FREEDOMS OF CHOICE!

I am vaccinated due to being forced to. I did everything I could to try and convince that there was a safer vaccine called the Nova Vaccine in which Canada has committed to 50 million doses. Did we ever hear of it except for the educated; meaning all of us that looked for a safer alternative? It was suppose to be released in September, nothing heard, just cricket sounds!

Meanwhile we are all just experimental pigs while one quarter of double vaccinated are now in hospital. Complete inaccurate info that has inflicted upon us; the law suites are flying, just like big tobacco ( more smokers then ever); it will take years for the truth to come out but in the meantime it has never been better to further yourself in the hole by borrowing what most cannot ever afford to pay back.

This whole society has become a joke. Nov 11 2021 I will remember my grandfather and 3 great uncles who died for nothing!!!!

#80 Angry Economist on 09.25.21 at 10:25 pm

What the FED and BOC are doing amount to treason against the American and Canadian citizens respectfully.

#81 Gravy Train on 09.25.21 at 10:27 pm

#78 Flop… on 09.25.21 at 9:46 pm
“Gravy, I looked at the odds according to the lotto corporation. I spend $5 a week and for that amount they state the odds are 1 in 33 million.” My mistake: I thought you were playing the Lotto 6/49, not the Lotto Max.
https://lotto.bclc.com/lotto-649-and-extra/prizes-and-odds.html

#82 Faron on 09.25.21 at 10:40 pm

#49 Nonplused on 09.25.21 at 3:31 pm

Sell your Tesla stock if you have any because there will be a rush to the exit.

Problem with Tesla is whenever the stock is in trouble a bunch of buyers of NTM and ATM weekly options goes nuts with tens of thousands of contracts. Let’s see how the FSD investigation pans out.

#83 Al on 09.25.21 at 10:50 pm

Look at that recovery since 08 lol.. Looks like zirp forever.. as long at they keep printing money.

#84 Nonplused on 09.25.21 at 10:58 pm

#68 Sail Away on 09.25.21 at 7:25 pm
#49 Nonplused on 09.25.21 at 3:31 pm

It looks like Ford will have 200,000 pre-orders before even going into production, guaranteeing a successful first year run and maybe even a profit.

Sell your Tesla stock if you have any because there will be a rush to the exit.

———

Sell Tesla? When the cybertruck has 1.25M preorders and the company has first-mover advantage?

That would be illogical.

https://www.google.com/amp/s/insideevs.com/news/524156/tesla-cybertruck-preorders-exceed-1250000/amp/

———————————–

My money will be on the F150 Lightning approaching 1 million units before the Cyber Truck starts deliveries.

The Cyber Truck is just too weird to appeal to very many people.

#85 crowdedelevatorfartz on 09.25.21 at 11:46 pm

@#33 Kook and Potato licker
“WONDERFUL TO SEE OUR PRIME MINISTER WITH THE TWO MICHAELS. HE WORKED VERY HARD TO GET THIS DONE THANK YOU MR. TRUDEAU WELL DONE”

++++

The true depth of our illustrious Prime Ministers’ personal involvement with the Michael/Meng prisoner swap was….. what color socks to wear at the airport…. hug for the inevitable media photo op shot…..

#86 crowdedelevatorfartz on 09.25.21 at 11:54 pm

@#29 Sail Away
“While I was away hunting, did anyone talk about our hero Elon’s historic civilian spaceflight?”

+++
Yuppers.
I was wondering about the space tourists zipping around the globe every 90 minutes for 3 days.

I did wonder if a meal of chili could be used as “propulsion” inside the space capsule….

I mean, theoretically, in the weightlessness of space, a burst of gas would push the participant in the other direction…..would it not?

Apparently it will cost $50 million dollars to find out….

#87 Ponzius Pilatus on 09.25.21 at 11:58 pm

[email protected]
Goofy and Billy Goat on the same boat.
Dumb and dumber ll.

#88 Ronaldo on 09.26.21 at 2:47 am

#71 espressobob on 09.25.21 at 8:32 pm
A balanced portfolio of equities and fixed income seems the practice of old. While this method has merit it doesn’t really work the way it used to.

Actually I keep roughly 40 to 45 % cash. Wait patiently for a good old fashioned correction and start buying at predetermined buy in points. When Mr market recovers (always does), then the profit taking takes over.

This is not for everyone, it takes a load of gumption buying into a declining market. Fear is profitable and way more fun than a paultry yield.
—————————————————————–
Just curious. Did you deploy that 45% cash when the market hit bottom in March 2020 and if so when did you go back to 45% cash?

#89 McSteve on 09.26.21 at 7:56 am

I’ve moved 1/2 of my fixed income portion of my RRSP into blue chip utilities. Think ENB, BCE, etc. I figure in 15 years when I need it, they will be yielding more than 1%. How do bond ETFs not get slaughtered here?

#90 Prince Polo on 09.26.21 at 8:07 am

#25 Dogman01 on 09.25.21 at 12:39 pm
#1 LewenzaCountry aka Prince Polo on 09.25.21 at 9:21 am

How about a greatest list hits:

Enter Taxman – https://www.youtube.com/watch?v=yL2xRjjnKMg

“The Canadian Dream” https://www.youtube.com/watch?v=tWJ5QapOFzI

“S-O-CIA-LISM is here to stay”
“Cause everything moves really slow when its 40 below”

“Rows Of Houses” https://www.youtube.com/watch?v=fzawkvDmERA

Thanks for sharing. We’re just missing a The Tragically Hip tune and we’ve got half an album of misery.

#91 Phylis on 09.26.21 at 8:15 am

#77 Planetgoofy on 09.25.21 at 9:35 pm
#72 BillyBob on 09.25.21 at 8:49 pm
————————-
LOL saw that after I posted.
Garth needs an IQ test in order to enter this blog…..
The floor could be low but we should still be OK…HA
Xxxxxxx
That is a fun idea. Most of the functionality is already here. Add a single question survey and title it as a test question and require a correct answer to unlock the comments section until the next post. Encourage a little extra thought before people express their big ideas! It might even reduce some of the litter.

#92 Grimes on 09.26.21 at 8:24 am

#82 Faron on 09.25.21 at 10:40 pm
#49 Nonplused on 09.25.21 at 3:31 pm

Sell your Tesla stock if you have any because there will be a rush to the exit.

Problem with Tesla is whenever the stock is in trouble a bunch of buyers of NTM and ATM weekly options goes nuts with tens of thousands of contracts. Let’s see how the FSD investigation pans out.
Xxxxxx
I heard they will be challenged by ASIL4.

#93 Ryan Lewenza on 09.26.21 at 8:34 am

Hannibal “ Nice article.

Not to sound pedantic, but HISA products are not technically mutual funds. They are simply savings accounts with whoever is offering the HISA. Like ING in your example or any other of the big banks and credit unions

Keep up the good work!”

Correct but you can now invest in a HISA through an ETF structure. – Ryan L

#94 Dharma Bum on 09.26.21 at 9:49 am

Does anybody ever think about how ridiculous cash looks?

I mean, c’mon, seriously?

Just look at those ten dollar bills. The artwork and design looks like some kindergarden class art project.

How silly are paper (ok, plastic) bills in this day and age?

And metal discs with embossed pictures of animals and landscapes on them.

It’s hard to let go of old habits, I guess.

Well, I’m off to the river on my horse to scrub my clothes on a washboard before returning to my cabin to fire up the wood stove with kindling and logs I gathered from the forest to cook up a wild boar that I shot with a musket.

I paid for it with cash.

#95 Ryan Lewenza on 09.26.21 at 9:52 am

Mark “ Thoughts on floating rate and inflation protected options?”

Yup we like them and added floating rate bonds last year given our expectations for higher inflation and interest rates. – Ryan L

#96 Cesar on 09.26.21 at 10:10 am

SoggyShorts, your point about inflation being higher now is valid to a point. Looking at all Adam’s info, reading it twice, alot of stuff there, he still has to get his old age pension at 65 years old, that is probably going to be close to $700 maybe $725 a month in 5 years.

Also, we don’t know about his wife’s RRSP, TFSA and other savings, investments balances and when she will be getting CPP, OAS in the future and that could be as high as $2,000 combined a month in 5 years if she is 65 years old at that time. Also, depending on their living expenses, type of house or renting will also impact their future retirement figures. There could be other tax credits, senior, retiree tax credits that his wife could also give them some tax savings like the age amount, personal amount higher in 5 years, her being a senior, pension, RRIF income splitting etc.

I know a bit where Adam is coming from. I have an uncle that is now 48 and has worked in a physically depending job for over 27 years now. He gets paid very well, $32 an hour today and works 50, 55, 60 hours a week and lots of overtime. He has no employer or union pension. He has been savings for decades now mostly in non-registered 5 year GIC’s, 30% portion and the last 18 years years, 65% portion in mid term federal, provincial strip bonds all in RRSP’s, TFSA’s only when rates were higher than GIC’s. The other 5% is just in interest bearing savings accounts.

He is averaging a 11.31% annual interest rate since 1994 because all his stuff is compounded which comes from his simple average interest rate of 5.32% annual interest rate since he first started.

He has done fine for himself having now over $1.4 million in all investments, RRSP’s, TFSA’s. Just like Adam, he always maximized his RRSP tax refunds in other compounding interest investments in registered ones. He did not blow it. He knew that one day he could not work because of a possible injury or just the job being too physically demanding. My uncle and aunt are debt free in their mid 30’s and are still debt free today.

#97 crowdedelevatorfartz on 09.26.21 at 10:14 am

@#80 Angry Economist
“What the FED and BOC are doing amount to treason against the American and Canadian citizens respectfully.”

+++

Inflation is rearing its ugly head everywhere.

Interest rate hikes are inevitable.

#98 IHCTD9 on 09.26.21 at 10:20 am

#49 Nonplused on 09.25.21 at 3:31 pm

I am no fan of electric vehicles, but I have to admit I find the new F150 Lightning and the now available F150 hybrid are interesting. I’d probably get the hybrid to avoid relying on charging stations but I think both are going to be game changers.
——— –

The Lightning packs a looong list of features:

https://www.ford.ca/trucks/f150/f150-lightning/2022/

I also think this truck has everything going for it. Good looks, power, range, specs, features galore, and a great price range. I just noticed it has an IRS too, so this truck is going to ride like an SUV, and it does a 4.4 second 0-60 run too – quicker than the Raptor.

It’s a real world truck for a very broad range of buyers.

Ford hit a home run with this one IMHO.

#99 crowdedelevatorfartz on 09.26.21 at 10:25 am

Gee, It hasnt been a month.

The Taliban have hung someone from a crane in a city square…….

So much for the kinder , gentler Taliban.

#100 Harry on 09.26.21 at 10:29 am

I think people in general have got it right to say that interest rates are ridiculously low. When mortgage rates can be 1.1% to 1.7% on variable and 5 year fixed rate mortgages in Canada today.

I would say most of us agree today, they should be more normal, at least in the 3.5% to 4.5% range variable, fixed rate 5 years. However, I know alot of people that had many years, probably decades to save alot of money in their RRSPs, RESPs at 5%, 6%, 7%, 8%, 9% GIC and savings bonds rates. They chose not to and those that did put it in some short term savings account and blew all the RRSP tax savings, refunds.

So, I think at least 50% of the population in Canada cares only about the interest rates being low for their mortgage, HELOC, line of credit etc. However, there are alot of people now that are modest income that did not save and are in alot of debt, desperate now and are going to these finance companies and even with a home, condo as collateral are having to pay 6%, 7%, 8% mortgage rates and even worse for smaller amount, $5,000, $10,000 30% to 40% from these second rate finance companies.

I think having cash, even if now pays very low or low interest in a savings account, short term money market account, a short term deposit, 30 days to 180 days, is still going to save you alot of high interest, fees from banks, lenders, finance companies that are charging much higher interest rates even as we are in this manipulated, low, Bank of Canada interest rate period.

#101 Sara on 09.26.21 at 10:30 am

#79 Drinking

” Meanwhile we are all just experimental pigs while one quarter of double vaccinated are now in hospital. Complete inaccurate info that has inflicted upon us; the law suites are flying…”
==================

No, “one quarter of double vaccinated” are not “now in hospital”. I think what you meant to write, DRINKING, is “one quarter of COVID-19 admissions are double vaccinated”.

Pray tell, where did you get those stats? From what I have read, according to PHAC (Public Health Agency of Canada), “the rate of hospitalization is 36 times higher for unvaccinated people”.

Regardless, did you know that almost 100% of people killed in car accidents were wearing seatbelts? We should get rid of seatbelts laws then, as they obviously don’t work right?

“Law suites are flying” you say? Are you referring to the registered charity “Justice Centre for Constitutional Freedoms” whose president and founder used the organization’s donated funds to hire a private investigator to follow Manitoba’s chief justice?

#102 IHCTD9 on 09.26.21 at 10:32 am

#68 Sail Away on 09.25.21 at 7:25 pm
#49 Nonplused on 09.25.21 at 3:31 pm

It looks like Ford will have 200,000 pre-orders before even going into production, guaranteeing a successful first year run and maybe even a profit.

Sell your Tesla stock if you have any because there will be a rush to the exit.

———

Sell Tesla? When the cybertruck has 1.25M preorders and the company has first-mover advantage?

That would be illogical.

https://www.google.com/amp/s/insideevs.com/news/524156/tesla-cybertruck-preorders-exceed-1250000/amp/
————-

I know you love Tesla, are a happy customer, and have made a ton of $$ on the stock. All good, but I can hardly believe there are really 1.25 million pre-orders for that hideous thing. That’s more than how many F150’s sell in a year – and the F150 is the best selling vehicle in North America. That’s an awful lot of so-called interest in a thoroughly unconventional vehicle IMHO.

I could be wrong, but that number smells a bit fishy to me…

#103 Antonio on 09.26.21 at 10:36 am

My cousin in Mexico is getting 4.75% in his savings account. He has an offer to lock in his money for 1 year to 1.5 years at 5.8%. Is there inflation that much higher than Canada’s.

#104 Planetgoofy on 09.26.21 at 10:41 am

#87 Ponzius Pilatus on 09.25.21 at 11:58 pm

Good one.
Did you find some ocean front RE in Arizona?
Daaaar she blows! Ponzi

#105 Sara on 09.26.21 at 10:49 am

“Sept 3, 2021. Conservative radio hosts all across America are losing their lives for the cause. In the past month alone, five talk radio personalities who were vocal COVID-19-deniers, anti-vaxxers, or anti-maskers have all died after contracting the virus. Most recently was WNDB’s Marc Bernier, a late Daytona, Florida, talk radio host who dubbed himself “Mr. Anti-Vax” in December while assuring his listeners “I’m not taking it.” True to his word, Bernier contracted COVID-19 roughly three weeks ago and his death was announced over the weekend by his radio station––which had awkwardly acknowledged his on-air “anti-vaccine” commentary just before his passing. (WNDB was contacted for clarification regarding its COVID-19 safety policies but the station did not respond.)

Though it might be assumed some right-wing media figures are simply feeding into the anti-vax frenzy to gin up outrage and ratings, the spate of recent deaths makes clear that, for a number of them, opposition to safe, effective vaccines and other pandemic mitigation efforts isn’t just talk. Such radio rants against efforts to stop the pandemic come as Republican men, a large segment of the talk radio audience, have been shown to be particularly resistant to getting vaccinated.”

https://www.vanityfair.com/news/2021/09/anti-vax-radio-hosts-dying-covid

#106 Peter on 09.26.21 at 11:12 am

Oh thank you BIG BUCKS. Enlighten us all, please. Go back to your video game and quit trolling the blog

#107 Sara on 09.26.21 at 11:24 am

@Drinking, despite being “forced” to vaccinate, perhaps you follow “Freemen-on-the-land ideology”?

“The anti-vaccine movement in Canada is becoming increasingly radicalized thanks to a bizarre legal theory spreading through its ranks, according to multiple experts.

Last week, protesters entered a school in Salmon Arm, B.C., to “serve” school officials with what lawyers say are bogus legal documents.

The documents are based on the ideology of the Freemen-on-the-land, an anti-government movement with links to white nationalism.

“This is very worrying,” said Edwin Hodge, an expert on right-wing extremism at the Centre for Global Studies at the University of Victoria.

The pseudo-legal ideas of the Freemen have ebbed and flowed over the years, but the philosophy has typically been relegated to the fringes of society, according to experts.

The convoluted legal principles being spread … arose in the white supremacist Posse Comitatus movement in the United States in the early 1970s, according to Helmut-Harry Loewen, a retired sociologist in Winnipeg and an expert on the Freemen.

Loewen says they espouse a radical interpretation of the relationship between citizens and government, claiming that explicit individual consent is required for every bureaucratic interaction — from speeding tickets, to taxes, to criminal charges, to public health measures.

When adherents encounter law enforcement, they exclaim “I do not consent,” which they claim frees them from legal obligations. (It doesn’t, according to lawyers.)

Canadian courts have repeatedly ruled against such pseudo-legal arguments and have deemed many Freemen to be “vexatious litigants,” meaning they need special dispensation from the courts to file lawsuits.

Followers of pseudo-law have a pattern of escalation, according to both Hodge and Warman[an Ottawa human rights lawyer].

“They don’t just post things on Facebook saying, ‘I do not consent,'” said Hodge. “First, they’re declaring the government unconstitutional, then it’s issuing false notices, then they’re making citizen arrests, and then it escalates into violence.”

https://www.cbc.ca/news/canada/british-columbia/anti-vaccine-pseudolegal-freemen-on-the-land-1.6188648

#108 TurnerNation on 09.26.21 at 11:27 am

A glimpse into the future of this country.
The CV rules are being used to totally destroy the system.

Refuse to disclose your ‘health status’? Then you may not serve Jury Duty.
Aww what a shame. Maybe you were looking forward to paying your own travel/lunch, to a desolate government building. Locked in a room with strangers all day, forced into wearing a mask. Away from your job, income, family. Ajournment after ajournment. Who will pick up your kid from school/child care while you away?
Who will be at home for the kids locked out of school, virtual only?

Just say the words Comrade. ” I will not disclose” . And the system falls apart. What it the end game, a global UN-led justice system? Don’t ask…
PS what do you think those QR codes were rolled out – globally – for.

https://www.cbc.ca/news/canada/calgary/unvaccinated-jury-calgary-1.6189795
Calgary justice says ruling also applies to those who refuse to state vaccine status
———–
———–

Remember, Permanent Rolling Economic Lockdowns are here. The soft sell begins. #reset

They can’t handle 280/4,400,000 people in ICU. Facts.

.Major triaging has begun in Alberta hospitals, emergency doctor says (edmontonsun.com)
“Dr. Ilan Schwartz, an infectious disease specialist at the University of Alberta, said targeted public health measures and a vaccine passport may have worked a month ago. But he said only a hard lockdown with a shutdown of schools and non-essential businesses can now stop the crisis at its source — high caseloads.”

#109 Axehead on 09.26.21 at 11:54 am

Sage advice. Thank you Ryan.

#110 DON on 09.26.21 at 12:48 pm

#93 Ryan Lewenza on 09.26.21 at 8:34 am
Hannibal “ Nice article.

Not to sound pedantic, but HISA products are not technically mutual funds. They are simply savings accounts with whoever is offering the HISA. Like ING in your example or any other of the big banks and credit unions

Keep up the good work!”

Correct but you can now invest in a HISA through an ETF structure. – Ryan L

*********
Thank you Ryan.

#111 Quintilian on 09.26.21 at 12:52 pm

#105 Sara on 09.26.21 at 10:49 am:
“five talk radio personalities who were vocal COVID-19-deniers, anti-vaxxers, or anti-maskers have all died after contracting the virus.”

It is said that “the evil men do lives long after they die”

#112 DON on 09.26.21 at 1:02 pm

#99 crowdedelevatorfartz on 09.26.21 at 10:25 am
Gee, It hasnt been a month.

The Taliban have hung someone from a crane in a city square…….

So much for the kinder , gentler Taliban.

********
They also said they would resume cuttings of limbs.

I had to stop reading when they listed their reasons.

#113 DON on 09.26.21 at 1:17 pm

#102 IHCTD9 on 09.26.21 at 10:32 am
#68 Sail Away on 09.25.21 at 7:25 pm
#49 Nonplused on 09.25.21 at 3:31 pm

It looks like Ford will have 200,000 pre-orders before even going into production, guaranteeing a successful first year run and maybe even a profit.

Sell your Tesla stock if you have any because there will be a rush to the exit.

———

Sell Tesla? When the cybertruck has 1.25M preorders and the company has first-mover advantage?

That would be illogical.

https://www.google.com/amp/s/insideevs.com/news/524156/tesla-cybertruck-preorders-exceed-1250000/amp/
————-

I know you love Tesla, are a happy customer, and have made a ton of $$ on the stock. All good, but I can hardly believe there are really 1.25 million pre-orders for that hideous thing. That’s more than how many F150’s sell in a year – and the F150 is the best selling vehicle in North America. That’s an awful lot of so-called interest in a thoroughly unconventional vehicle IMHO.

I could be wrong, but that number smells a bit fishy to me…

*******

People are married to their choice truck, look, feel and nostalgia and now that Ford is coming out with an electric and hybrid model the choice will be simple. I am looking at Ford also…but would prefer GMC. What ever happened to Saturn they were supposed to be the future also. I like the hybrid choice for a truck…but if you are using your truck to get groceries the electric will work.

Telsa’s truck is not visually appealing.

#114 Planetgoofy on 09.26.21 at 1:21 pm

#87 Ponzius Pilatus on 09.25.21 at 11:58 pm
[email protected]
Goofy and Billy Goat on the same boat.
Dumb and dumber ll.
—————————-
Akin to a yappy dog. A lot to say about nothing.
Ill drop an email and you can try to yap to my face?
Normally the yappy dog doesn’t show but I love it if they do.
Your in YVR?

#115 espressobob on 09.26.21 at 1:32 pm

#88 Ronaldo

” Did you deploy that 45% cash when the market hit bottom”

Not exactly. If the markets decline 20% I buy with a portion of the cash position. If the correction continues to 30%, another pile goes in. At 40% (didn’t happen), final buy, still leaving a cash position roughly 5 to 10%.

If bond yields were decent, well maybe a different approach would be considered? But that be boring…

#116 Faron on 09.26.21 at 1:57 pm

#113 DON on 09.26.21 at 1:17 pm
#102 IHCTD9 on 09.26.21 at 10:32 am
#68 Sail Away on 09.25.21 at 7:25 pm
#49 Nonplused on 09.25.21 at 3:31 pm

That IHCTD9 had to couch Tesla criticism by stroking and soothe Sail Away’s ego tells you everything you need to know about Tesla and the cult of Elon.

Ford knew that they could have a good shot at unseating Tesla if they did a functional end run of the completely impractical and plagiarized (there are some good articles that show the design was lifted from 1970s sci articles) lie that is the Cybertruck. Ford is slated to have 15000 on the road next year. Tesla might begin production by the end of next year. Tesla has now squandered any first mover advantage it may have had by suffocating it’s R and D dept in favour of Bitcoin forays and S Plaid pumps.

Elon remains the genius for stupid people.

#117 kommykim on 09.26.21 at 7:05 pm

RE: #12 covid is over on 09.25.21 at 10:44 am
preferred share etfs are a massive rip off.

========================================

How so?

#118 Drinking on 09.27.21 at 12:51 am

#107 Sara

I have “NEVER” been anti vaccine. I have been vaccinated for all major illnesses that have affected human population.

I have always been about ” Freedom of choice”; there are much safer vaccines in the works such as the (“NOVA” vaccine that has been properly tested which was originally forecasted to be released in Sept 2021) such as Polio, TB,POX,Mumps, Measles, Hep, ect, I have had them all but I ABSOLUTELY RESENT being forced to take an experimental drug in which if something goes wrong one cannot sue big pharma, seriously, what the hell is wrong with us that we would be so inclined to do this????? All of us that lost an ancestor in the great wars should be absolutely ashamed of ourselves that we just rolled over and accepted this. This has become a pathetic generation!!!!!

#119 fed up on 09.27.21 at 8:42 am

Sara, nanny state, big brother, surveillance society, socialism, communism, marxism, dictatorship, tyranny and I can go on and on. Just like The left side of politics there are many names to describe themselves but only a few names to describe liberty, freedom, choice.

Corruption and power, control of the population is the name of game and they use any opportunity to do it. Look at the topic on today’s blog, cash. They reduced to such small amounts of interest and made it a joke, central banks, our masters that is.

#120 Paul on 09.27.21 at 8:59 am

Fed Up, talking about cash and central banks, governments, regulators as our masters, I just saw Oaken Financial bumped their 5 year GIC rate from 2.2% to 2.30%. I can’t put any more money there are the $100,000 CDIC deposit insurance limit has not been increased since 2005. This is 16 years, 16 years of inflation, cost of living increases. In 16, years, at say average 2.6%, that is 50.78%, it should be minimum $150,000 CDIC deposit insurance limit today.

The whole point of having money in a bank GIC is so it is safe and secure and know how much or your return you will get for the term of the GIC and return of your principal. If you are going to lose principal due to a bank failure, what is the point. They are the masters of the universe indeed.

#121 Jack on 09.27.21 at 10:40 pm

Remember back in the mid 90’s, Canadian T-bills used to pay 6.75% to 7%. They were good short cash vehicles to store short term money. Even back in the early to mid 2000’s, you could get cashable GIC’s at 4.5%.

Is this the end of money as we know it. It seems that if there is if interest rates that will go up anymore maybe they are going to do something different. I don’t know.

#122 Sonny on 09.27.21 at 10:47 pm

Speaking of Oaken Financial, cash in the form of term deposits are paying 30 to 89 days 1.25%, 90 to 269 days 1.30%, 270-364 days 1.35%.

Considering how low rates are these are not that awful to park cash but their cashable GIC’s 30 or 90 days 0.50%. Oaken’s savings account 1.15%. You could probably find higher rates for short term promos from other financial institutions but they have tricky terms.