When to sell your stocks

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I sold some stocks recently. Not only I didn’t loose any money, but I actually made some. If you have been reading the news, you are aware the markets are in correction territory, a.k.a. bearish. It resulted in massive sell-offs across the globe.

A BEAR MARKET IS NOT A REASON TO SELL YOUR STOCKS

Bear markets are actually pretty normal. They should be expected. The twist here, is that we are no longer used to them. We have been in the longest bull market in history. Most of us have forgotten what the bear looks and feels like.

That being said, there are definitely valid reasons to sell your stocks. Here are a few of them.

you need the money; your stocks are all you have

Yep. Shit happens. If your cash is depleted, your credit cards maxed-out and you are in a dire situation, then sell away.

If you are not at this stage, consider using cash, liquidating term-deposits or selling your bonds before selling your stocks, particulalrly if the markets are bearish.

your stocks have served their purpose

When buying stocks, one should always have an objective. Whether short or long-term or for speculation or diversification, your stocks should always have a purpose. Once achieved, your stocks have no reason to be in your portfolio anymore.

you experience major life changes 

You loose your job; you go through a divorce or you are nearing retirement. These types of change may require rebalancing your portfolio to a more conservative allocation.

your risk tolerance is drastically lower

A major life change and ageing will lower your risk tolerance.

I always say it is important that your portfolio be in line with your risk tolerance. Most of us have a lower tolerance than we initially claim. Case in point with the recent mass sell-offs….

ONE OF YOUR STOCKS IS CONSISTENTLY UNDERPERFORMING

We all make mistakes, including with our investments. A stock has been in your portfolio for some time, and it is just not picking up when similar stocks are rocking the market.

When the market becomes bearish, your stock becomes worse when similar ones weather the turmoil. Time to sell!

MY CASE

As I mentioned above, I recently sold some stocks. These stocks were in my TFSA for a few years.

They were part of my emergency fund. Yes, you are reading correctly. Back then EQ Bank and Tangerine had not launched their high-interest savings accounts. The majority of banks was offering peanuts in term of interests.

I have had major life changes recently, with more coming. I needed to rebalance the allocation of my emergency fund. So, I sold some stocks. I made money despite the bear market. I sold stocks that triggered a capital gain. I still have 20% of stocks in my portfolio.

 

 

Tips to ask for a pay raise

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A few decades of life experience has taught me that, for the most part, if you want to obtain something, you have to ask for it -besides working for it-. This is particularly true when it comes to pay raises.

Unless you are a government employee or work for a large corporation, it is unlikely your employer will regularly review – and increase-your salary. Most businesses don’t have any procedure in place when it comes to this topic.

In not asking, not only you will not receive, but you will leave thousands of dollars on the table; guaranteed.

KNOW YOUR ACCOMPLISHMENTS

Your manager is probably very busy and doesn’t have time to keep track of everything you do for your employer. This is your job to do this. The worst thing you can do is justifying your request by talking about  how your personal expenses have increased or how you need to save for retirement.

Show how you add value to the company instead, with a focus on the bottom line. Also highlight areas that are above your job responsibilities. Knowing your accomplishments will help you address objections.

KNOW YOUR MARKET

Before approaching your boss, you should do research on what people with your profile are paid in your industry and in your city. Your sources need to be credible. Many professional associations publish yearly guides and reports. Use them if you can.

KNOW YOUR TIMING

Timing counts when asking for a raise. Try to align your request around the company’s financial trajectory. Year-ends could be a good time, as your employer is most likely preparing its budget. You may also wait for your annual review.

Avoid asking for a raise at a high-stress period. Schedule a face-to-face meeting.

KNOW YOUR AUDIENCE

Ultimately, asking for a raise is a business transaction. If you tell your employer how much you love your job or how you don’t want to leave, you are already leaving money behind.

You want to remain positive while at the same time make it clear you are aware your services are so valuable you would be an asset to any company who would hire you. It is not about burning bridges or being arrogant. Ultimately, it is about knowing your worth.

KNOW YOUR OPTIONS

Depending on your employer, you may not be able to obtain your desired raise for a variety of reasons. Salary is not the only thing you can negotiate. Everything is negotiable!

You could ask for a bonus, more vacation, for opportunities to work from home, for tuition assistance etc…. Benefits are also important and they can make a huge difference in your life.

If all fails, you may want to think about whether you want to stay or look for another job. Regardless of your decision or how disappointed you feel, remain professional.

FINAL WORD

It took me some time to master the basics of asking for a raise at work. This process is daunting for most people, but perhaps more for women.

The ability to negotiate our salaries is important. Our level of income will largely dictates our lifestyles.

 

 

Why I don’t really blog about my own finances

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A lot of fellow PF bloggers share their most intimate financial details online. How much debt they have, their net worth, their spending, their income….you name it, it is out there.

While I did share my debt amount, and how I repaid for it, I chose not to share many details on my finances , and here is why.

privacy concerns

Once you share something online, regardless of what it is, there is no way to get it back. No matter how hard you try, it will stay online.

I am of the opinion people don’t need to know everything about my finances, whether they are complete strangers , friends or acquaintances.

unhealthy comparisons

Society in general, and the PF community in particular, is using net worth as a measure of self worth. The 2 are actually not related.

If you are not killing your monster debt in less than 2 years, something is inherently wrong with you! Or if you haven’t saved a million by the time you are 25 , you are bad with money. If you are bad with money, you are probably bad with other things as well.

Does the above sound familiar? I bet reading about it wasn’t really helpful. It may even have made you feel bad.

Our own story is unique. We all have different lives. Knowing so-and-so paid x amount of debt or saved x amount of money won’ really do anything for us, at an individual level.

not a financial planner or advisor

A lot of PF bloggers have lists and spreadsheets of all their investments on their blog. Some of them even talk about their “top stocks” or favorite ETFs. I previously mentioned the majority of PF bloggers have no formal qualifications or certifications in Financial Planning.

I won’t be one of these bloggers anytime soon. I believe there is a level of personal responsibility when advertising or promoting financial products to complete strangers you don’t know anything about.

Final word

My blog is to share my passion for personal finances, but not necessarily to share everything about my own personal finances or my life.

I consider my blog to be a peephole into my life, but definitely not the complete picture. There is so much more to me than the contents of my blog….but I choose to keep it offline.

Could your cosmetics be bad for you?

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Most people are concerned about their food intake. A lot is written and said about what we should be eating, what we should avoid, what is “good”, what is “bad” etc..etc…

But, what about the stuff we put on our bodies, namely moisturizer, soap, shampoo, make-up?

Because it is for sale doesn’t necessary mean it is good for you or safe.

LOOSEY-GOOSEY REGULATIONS

Shocking? I know. In North America, regulations are minimal and losely enforced. I have lived here for 12 years and I have yet to hear about a beauty product being recalled because it was deemed unsafe.

Yet, a lot of cosmetics contain components that shouldn’t be in there in the first place. These components are well-known to cause allergies and act as hormone-disruptors.

I recently did a mass clean-up of my bathroom cabinets, after educating myself about some dangers of our everyday cosmetics. Here are some tips.

LESS IS MORE

Cosmetics companies are very good at convincing us we “need” one product for each part of our bodies. We “need” day-cream, night-cream, lip balm, make-up remover, hand-cream, foot-cream, body lotion, eye-cream, neck-cream….the list is endless.

This is simply not true. Using too many products will be ineffective and will result in an “overload” on your skin. It will also increase the risk of allergic reaction. Not to mention the strain on your bank account.

You can replace all of the above by coconut oil, which is 100% natural and way cheaper. Both your skin and your wallet will thank you.

THE FEWER INGREDIENTS THE BETTER

Have you noticed the sheer number of ingredients on many beauty products? The more ingredients, the more processed the product is. Chances it contains “scary stuff” that shouldn’t go anywhere near your skin.

It is also best to choose a product that does not have an extended shelf-life, ideally it should be between 6 months and 1 year.

INGREDIENTS TO AVOID

Unless you are a chemist, the list of ingredients in your beauty products most likely sounds like a foreign language to you. Here is what to avoid:

  • BHT & BHA: hormone-disruptors; possible carcinogens. Banned in Europe, not in Canada.
  • DEA ingredients: allergens
  • Phthalates: whether as a single word or chain ones. Hormonal disruptors; potential cause of birth defects.
  • Formaldehyde: allergen; carcinogen
  • Parabens: whether as a single word or chain words. Hormone- disruptors.
  • Fragrance/Parfum: companies are not required to disclose the composition of fragrance/parfum. Allergen. Possible hormonal disruptors.
  • PEGs: carcinogen
  • Petrolatum (petroleum): Allergen; carcinogen
  • Siloxanes: hormonal disruptors
  • Triclosan and triclocarban: these are like pesticides. Yikes! Disrupt thyroid function.

If you want to use safe cosmetics – I bet you do!-, you can check EWG Skin Deep.

My health is my most precious asset

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I have had some health issues lately, requiring quick action on my part. It also put things in perspective, and not just heatlh-wise.

OUR HEALTH LARGELY DETERMINES HOW WE LIVE OUR LIVES

When we are not doing well, whether on a temporary or chronic basis, there are many things we cannot or no longer can do. Physical ailments can impact our mind and conversely.

It may cause us to move-out of our home, relocate, be bedridden, switch to part-time work or quit our job altogether.

OUR HEALTH IMPACTS OUR PERSONAL FINANCES

Medical treatments are costly, and more so if they are not covered by public or private healthcare providers.

Our capacity to earn income is our best insurance for both our present and future. Disability insurances are not nearly adequate to provide any real financial safety.

THERE IS NO PRICE TAG ON HEALTH

The personal finance community is obsessed with net worth, savings, stocks, bonds, ETFs and mutual funds.

Health cannot be quantified or bought on the stock-exchange.

Health is priceless.

My health is my most precious asset, and I will strive to keep it that way for as long as possible.

Handling an at-fault car accident in BC

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Please note that I am not a lawyer, nor do I work for ICBC. This post is based on my own experience only. 

British-Columbia is one of 3 provinces in Canada that has an at-fault system when it comes to car accidents. In legalese, it is called tort.

It means the non-faulty party has the right to sue the at-fault driver for various damages related to the car accident, such as loss of wages, medical expenses, pain and suffering etc…

This is what happened to me when I was involved in a collision 4 years ago, for which I was found 100% responsible. Both the other driver and their passengers claimed injuries and sued me 2 years later in the BC Supreme Court.

IF YOU ARE SERVED, BRING THE DOCUMENTS TO ICBC

in BC, people have 2 years to sue. I was served a Notice of Civil Claim 6 weeks before the limitations were to expire. If it happens to you, do not panic. Bring the documents to any claim centre. ICBC will take it from there.

This is why you pay them for basic third-party liability insurance. the crown corporation will cover the legal costs and any damage assessed up to $ 200 000. If you pay for extended third-party liability insurance, your coverage will be greater, up to $ 5 millions if you wish.

do not contact the other driver 

No matter how upset or surprised you may be, there is no need to contact the other party.

ICBC will handle everything on your behalf. You will not be consulted on how to handle the lawsuit. Your appointed lawyer will also not take any direction from you in the matter.

This is why you pay for third-party liability insurance. Precisely so that you don’t have to do much….which brings me to the next point.

DUTY TO COOPERATE

The only thing you have to do is cooperate. Depending on the accident and the lawsuit, you may be required to meet with your appointed lawyer, ICBC or to attend the trial. Also, return any phone calls and reply to any e-mails sent to you.

Not cooperating could result in a breach of coverage, i.e. ICBC will no longer cover you and you will be on the hook for the entire cost of the claim.

For my case, I attended 2 meetings with my lawyer, an examination for discovery and replied to a bunch of e-mails from both my lawyer and ICBC. I never saw the other party again.

FINAL WORD

All lawsuits will settle, whether it is before or at trial. My appointed lawyer indicated around 95% of claims settle out of court. I was no exception. I did not have to pay for anything beside the deductible.

Being sued as a result of a car accident will not have a significant impact on your life, in most cases. I am not talking about injuries here, but about the lawsuit in itself.

The only time it could be problematic is if ICBC breaches your coverage for one reason or another, or if the damages exceed your third-party liability limits.

 

 

Can money buy happiness?

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Back in 2010, the University of Princeton published a study on how people making $ 75 000 per year were reportedly happier than those earning less than this amount.  A lot of media outlets and people immediately jumped to the conclusion that money buys happiness.

Well, I kind of disagree with this statement…no point in writing a post otherwise!

you can’t buy happiness at the supermarket

Happiness is not a tangible product. It is not something you can see or touch. There are lots of variables when it comes to happiness.

If you ask 10 people what their definition of happiness is, I bet you will receive 10 different answers.

Before haters jump all over me, let me tell you about my personal story a little bit.

I actually grew-up poor. My parents were considered as low-income class. They didn’t have any money besides to pay for their bills, and even that was difficult at times. My parents were also terrible with managing the little they had.

They had no long-term vision or planning skills. Saving was a foreign concept to them. Growing-up I certainly did not wear designer clothes or vacationed in exotic, far-away places, unlike some of my friends and classmates.

YES, the lack of money can be a source of stress…

So yes, the lack of money was stressful and bothersome in my family. But it is actually not what made me unhappy at times. For the most part, I would say I was happy growing-up. What actually made me unhappy had absolutely nothing to do with money.  I will stop there with my childhood memories. There are many things I do not wish to share online.

…but having money does not automatically equate happiness either

Fast forward a few decades later, I reached that $75K mark. I didn’t necessarily feel happier to a greater extent, although it sure was nice to be able to save for retirement, pay for my bills and vacation in exotic, far-away places.

Except that, for me to be fully happy, I needed something else. Something that has nothing to do with money, and that money actually cannot buy.

Recently, I decided to switch to part-time work. Working full-time was simply no longer sustainable for me. Doing so means a huge pay-cut and possible depletion of my savings. Guess what? I am happier now than when I was earning a full income.

attempting to define happiness

As mentioned above, everyone’s definition of happiness is different. I personally like the definition offered by Happiness International:

“Happiness is when your life fulfills your needs“.

Money is not the only need we have; not all our needs require money either.

FINAL WORD

It is probably more accurate to say that money can contribute to happiness to a certain extent. The Princeton study that started this post also revealed that people earning more than $75 000 per year did not report increased levels of happiness…..

That time I decided to work part-time

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As I previously wrote, a few things have changed in my life recently.

I became consumer-debt free, decided to obtain an MBA and recently switched to part-time work.

BUT, WHY DID YOU DO THAT?!

You might ask. Well, studying for an MBA is not the same as studying for a certificate or a diploma. A lot more reading and researching is involved, and it is definitely more challenging.

But it is not the only reason.

i desperately needed better work-life balance 

Working full-time was sucking all my time and energy. For the last 2 years, I would leave my home at 7.00 am and would never be back before 5.00 pm, from Monday to Friday. I was constantly tired and had not much energy for anything else during the week.

I was only living for the week-ends and vacation. A lot of personal matters were put on the back burner and my health also suffered. This is simply no way to live. I started resenting my job.

Other issues within my workplace made me resent my job even more. I reached my breaking point in February.

I FINANCIALLY PLANNED FOR THE TRANSITION

Although I was at my breaking point, I decided not to hastily quit my job. Been there, done that!

While I was paying off my consumer-debt, I also saved money. It was equally important for me to also have some serious savings. My full-time income allowed me to do so.

It definitely took me more time to get rid of my debt, but I also built a nice cash cushion that could allow me to remain without any income whatsoever for several months.

If I made any type of income, I would be able to work part-time for about 18 months with said cash cushion.

If I had kept working full-time, said cash cushion would have paid for my MBA. But I switched to part-time, so it is a moot point.

i waited for the last car payment to go through

I wanted to become consumer-debt free with my income rather than dipping into my savings.

i refinanced my mortgage

Since I had decided I would work part-time, I had to figure-out the tuition payment. I did not qualify for student loans, but I actually didn’t want to take any. I also did not want to do a line of credit or another personal loan.

So, I refinanced my mortgage and slightly leveraged against the equity of my condo.

By doing so, I only have one monthly payment to take care of. A portion of said payment is also going right back to the equity in my condo.

Most importantly, I can afford to pay for my MBA and to work part-time for the next 2.5 years.

final word

I have been working part-time for a month now and am already reaping the benefits. I have more energy and feel  more positive. My health is improving as well.

 

That time I refinanced my mortgage

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Note: this is not a sponsored post, but if you need a mortgage broker, I recommend Alex McFadyen and his team at the Mortgage Pug. 

I recently refinanced my mortgage. Refinancing basically means paying-off a mortgage with a new one. There are several reasons why one might want to do so, including myself.

getting a lower interest-rate

Despite being in a rising rate environment, it is still possible to obtain a low rate, primarily on variable-interest mortgages. At the time of writing this post, rates for a 5-year variable mortgage were as low as 2.20%.

Obtaining a lower rate will save you thousands of dollars in the course of your mortgage. Do not let the mortgage penalty deter you. Do the math before deciding.

getting better terms

Mortgages can be complex products. The good news about this is that you can find a mortgage that will fit your personal needs.

My previous mortgage was not doing anything for me in terms of prepayment privileges.  I could only make one extra payment, once a year! Although I am in no hurry to burn my mortgage, I wanted more flexibility in terms of prepayment.

leveraging, a.k.a. borrowing against equity

The PF police will most likely be all over this, but leveraging is not necessarily a bad financial move, if done correctly and with caution. In my own situation, I called this”utilizing my assets to the best of their abilities”.

To borrow against equity, first you need at least 20% of equity in the property. An appraisal will be done to confirm the amount of equity. This is when things can get out of control, as a lot of people tend to borrow the maximum amount they are eligible for. This in turn results in a maxed-out HELOC or unmanageable mortgage payments.

Just like stocks in the stock-market, home-appreciation fluctuates. Sometimes, it will go up; and sometimes it will go down.

To minimize risk, I borrowed less than the amount I qualified for. The amount borrowed is also way less than what properties in my area currently sell for. I did not let the appraisal dazzle me.

I opted-out for a cash-out refinance instead of an HELOC. Why would I want to leverage, you may ask. I decided to obtain an MBA and will be using the money to pay for my tuition fees, as well as a top-up to my existing savings in order to work part-time for the next 2 years.

I will elaborate more on this in a couple of upcoming posts.

FINAL WORD

In order to determine whether refinancing your mortgage is the right option for you, you need to do the math and figure-out why you want to refinance. There are costs associated with doing this. As indicated above, you will need an appraisal and you will have to pay for a penalty. You will also need a lawyer or a notary.

Financial milestone: consumer-debt free!

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June 23rd, 2018 marked the day I officially became consumer-debt free.

I am not completely debt-free though. The only debt I have left is my mortgage. I am not too concerned about this one.

Being consumer-debt free feels pretty good so far, but it was not the big celebration I thought either.

I HAD BEEN UP AND DOWN THE DEBT ROLLER-COASTER

I started repaying my debt in late 2010. Back then, it was just a little over 20K, 12K being student loans. The rest was credit cards and line of credit debt.

At the same time, I was also building my emergency fund and modestly saving for retirement. I felt it was important to do so, given where I was in my life at the time.

Personal finances are just that…personal.

THEN CAME THE FIRST CONDO AND THE CAR

Fast forward to 2013, my debt level was steadily decreasing and my savings steadily increasing. My income was also good.

After careful considerations and calculations, I decided to become a homeowner.

The down-payment and closing costs put a serious dent in my savings, and because I moved to suburbia-where public transit was more limited- I bought a car, adding 16K to my overall debt.

But, I was able to handle all my obligations….thanks to my income and low interest rates.

THEN CAME THE SPECIAL ASSESSMENT

For those new to the blog, the first condo I bought was in a problematic building. Said building needed a lot of repairs and the corporation didn’t have any money to do them.

So, I found myself on the hook for another 6K of debt. I didn’t have enough savings back then. This happened 8 months after I bought the condo.

It was my lowest financial point. I felt like I would never get out of debt, never save enough money and would never able to do the things I wanted and live the life I had envisioned.

THE BEGINNING OF THE END

In 2016, I decided to sell my first condo. Although some major repairs had been completed, the building still had issues and I didn’t see myself constantly paying for levies.

Thanks to an over-heated market, I sold at over-asking.

The proceeds of the sale allowed me to buy my second condo and pay-off my “consolidated consolidation-loan”. I felt more elated paying this sucker off, than paying my car off.

I realize it is probably due to my suffering from debt fatigue, after 7.5 years of continous consumer-debt repayment. It is also perhaps because I don’t have anything to show for that consolidation loan, except my Diploma.

LOOKING BACK AND FORWARD

With more perspective and a better grasp of personal finances, I certainly could have proceeded differently. That being written, it is a little too late to think about how things could have been. The past has come and gone.

I actually don’t regret what happened to me financially-speaking. I really learned and grew during these challenges.

I know I won’t make the same mistakes again with my money. I may make other ones, however.