February has passed, offering a bonus day thanks to the leap year. It’s been a profitable month for stock investors, with most major indices adding to January’s gains. It’s also been a busy month for us as we’ve been doing a lot of organization for the business in preparation for the spring, summer and fall, which are the busiest part of the year for our industry.
Still, I found time to read a lot (mostly while waiting for our sons at various appointments and music lessons). As a result, I’ve got a nice variety of articles to share for this month’s edition of 20 Cents:
1. If you’ve yet to get serious about this year’s obligatory “exercise more” New Year’s resolution take a look at 23 and 1/2 Hours: What Is the Single Best Thing We Can Do for Our Health? This Toronto doctor’s research shows that just a few minutes of exercise each day (like going for a walk) can significantly reduce your risk of developing any number of diseases and extend your life expectancy. In a similar vein, 101 Centavos wisely counsels us to Take It Easy, Just Go for a Walk. There are some fantastic quotes in this article (the Kierkegaard one at the end is probably my favourite) and it offers a nice way to extend this thinking to personal finance and investing. (Hint: KISS – Keep It Simple Stupid.)
2. My Own Advisor wrote about why he and his family choose to Optimize Rather than Maximize RRSPs. With so many competing financial priorities, it seems like balancing your capital allocation among them is a more realistic answer for most people. Figuring out how RRSPs work and how they fit into your unique financial situation is more important than just throwing as much money as you can into them each year.
3. A Financial Post article by Moshe Milevsky started off with the following attention-grabber: “this year’s RRSP season is the worst possible time to make an RRSP contribution.” The idea is that making your RRSP contribution earlier (rather than waiting until the February of the following year) allows for longer tax-deferred growth. Still, Milevsky likes the whole RRSP season hoopla thing because at the very least it gets more of us thinking and talking about retirement planning.
4. A guest post by Teacherman of My University Money at the Canadian Finance Blog certainly got people talking about The Generation Gap when it comes to OAS and CPP. While many took issue with the author’s tone, the article raised some valid issues. The comments that followed, however, demonstrated why we can’t seem to make any progress on these key pension issues. Everyone thinks someone else is the problem and no one wants to give up anything to fix it. Eventually, the debate devolves into a schoolyard squabble that solves nothing. Back to square one.
5. On the topic of schools, Seth Godin just came out with an education manifesto called Stop Stealing Dreams that asks what is school for? The idea is that “the economy has changed, probably forever. School hasn’t.” You can download the manifesto for free. It’s at the top of my reading list for the next few music lessons.
6. Jeremy Grantham just came out with GMO’s Longest Quarterly Letter Ever. Having read it rather quickly, it didn’t seem that long to me. In addition to his investing insights, Grantham shares his concerns about the finite resources of our planet. He’s worried for our grandchildren because we are not making provisions for the future, thanks largely to the fact that politicians (and thereby policies) can be bought – definitely worth reading.
7. Ken Faulkenberry at the AAAMP Blog offers Two Simple Investment Concepts for Retirement Investing – Most Investors Fail at Least One of These.
8. Beating the Index had a very informative post on Natural Gas Stocks: Beware of Declining Natural Gas Prices. As I write this the NatGas ETF (GAS) is diving to new lows.
9. Jim Yih of the Retire Happy Blog explains how Paying Lower Fees Directly Can Be Tough on Investors. Many people I know aren’t aware of the fact that their mutual funds are costing them money every year. They don’t see it on their statements, so the costs are invisible. If you pay a planner directly for their services, your fees are likely a lot lower, but also more visible.
10. I guess if you had to boil down the main principles of personal finance to just 3 words, Save Invest Give might be perfect. Maybe that’s why the author of Retire at 45 recently changed the name of the blog to those three words – great choice, in my opinion. Head over there and check out some of the latest articles, including this one on The 3 Axioms of Risk.
Thanks to these fine authors for sharing their thoughts with us this February.
Please feel free to comment on any or all of these articles that caught your eye.