Another Double-Extra-Large Latte Factor of mine is definitely Ebay. Sometimes even with shipping charges, items cost less than if you buy them locally, and the convenience of not going to the store is very alluring. I’m not a shopaholic in a normal sense. When shopping, I like to know what I’m after, buy it and get out. Buy Ebay… I can window-shop on Ebay for literally hours. Now I sometimes get very disappointed with a small selection at the mall.

It has been a double-blow financially because it takes away the valuable work time – hours! – and then I spend money on stuff that I can really do without. I’ve been addicted to online shopping, and Ebay in particular, for the past 3-4 years, and at times I felt like I needed a 12-step program. Several times I stopped looking at the site, but couldn’t avoid it for more than a couple of weeks (it’s usually better in the summer since I’m not on the computer so much).

One good thing about Ebay is their Watch List. It really gives you time to cool off. You can watch up to 100 items, but I try to hover around a 30-item mark on average. Most of the time I buy just 1-2 items from the list over a period of 2-3 weeks.

Good news, though, I’ve been slowly getting disillusioned with Ebay over the past year or so. I find that with the increased shipping cost there are a lot fewer good deals, or items advertised as new are used, or fakes, or the seller made a shipping mistake (happens a lot more often now). My “success ratio” with Ebay used to be about 80%, meaning that I was happy with 80% of my buys, and the other 20% I’d either toss or resell. Now my satisfaction is down to around 30%! And yet, I kept coming back for some more abuse… Well, no more.

A friend of mine found out that I had over 2000 Ebay feedbacks, and she was stunned. She looked around our place and said: “But there’s not even 2,000 things here! What did you buy?” I went silent, because I honestly didn’t know what to say. I probably tossed and re-sold a lot more stuff than I kept.

In the last 2 months I’ve been trying to stick to this Online Shopping Avoidance program, here are some boundaries I set for myself:

  • Cannot buy anything if I’m already waiting for 3 packages in the mail. Right now I’m waiting for ZERO parcels, sort of an accomplishment.
  • Before I buy something, I check it out at the store first. Works like a charm for most of the stuff I buy: often can get a better deal locally or the item is not what I expected and I simply cross it off the list.
  • I try to buy from sellers and online stores with good return policies now. I’d rather pay return shipping than get stuck with something that’s worth $70 or bother reselling it
  • Try to limit shoe purchases to 1 pair a month. I broke down and bought 2 pairs this month, but they’re really nice. I don’t regret it. Maybe I’ll skip the March pair.
  • I ask my husband if he likes what I want to buy, and how much he would pay for it. He often doesn’t like it or would pay a lot less for it than I would. Since I don’t like lying, I prefer to not buy instead of lying about the cost. He’s my chaperone!
  • No shopping during work days. That only leaves weekends but I don’t want to sit glued to the computer most weekends. Maybe glued to the TV instead 🙂 (joke!)
  • Do not shop online while intoxicated or sad. Oh the many things I bought after a glass of wine.

I’m not the strongest-willed person out there, so instead of talking myself out of buying a specific item, I try to not browse online shopping sites, period.

I think this is it for the vice analysis. Online shopping and coffee. I’m cutting these out.

I bookmarked this article exactly a year ago, wanting to become a Couch Potato Investor but never got around to trying out the strategy. It still looks pretty interesting, and I want to do it – Child’s Play: Do the Couch Potato from MoneySense.

I put together this simple Excel spreadsheet, to analyze what would happen if I had invested $10,000 and $20,000 into a “Couch Potato” portfolio one year ago. Results are pretty good. Here’s a screenshot:
couchpotato_sm1.gif
Click the image to enlarge

You can also download the spreadsheet, it’s easy enough to use and should work for any no-load fund. You just enter the 1) amount you want to invest, 2) share starting and 3) ending prices, 4) dividend amount per share, and 5) MER.
It doesn’t account for dividend reinvestments, taxes and initial purchase fee you pay to the broker.

Couch Potato investment calculator (Couch Potato.xls)
By downloading and/or using the file, you agree to hold me free and clear of any responsibility for results you get from the use of the file.

I’m semi-clueless when it comes to investing, and I need to systematize my investment knowledge. I also need to read some good books on investing for individuals. Any recommendations?

This is a list of all the basic types of investments I know, available to an individual investor in Canada:

  • Stocks: these take time to research and are usually riskier than any other type of investment.
  • Mutual Funds: must pay attention to Expense ratios, as high carrying charges can potentially kill all the profit.
  • ETF’s (Index funds): these are nice and relatively safe when the market is up. Some of the more popular – and better? – funds are quite expensive, like the Vanguard Total Stock Market for example (VTI).
  • Bonds: I don’t have either experience or interest in these. Canada Savings Bonds rates have always been below what I get in our daily savings account.
  • Canadian Money Market investments:
    Government of Canada Treasury Bills
    Government of Canada Money Market Strips
    Government Guaranteed Commercial Paper
    Provincial Treasury Bills and Promissory Notes
    Bankers’ Acceptances
    Commercial Paper

    Looks like these may offer slightly higher rates than a savings account, especially if you have at least $10,000 you can leave alone for 6-18 months. Will look into these on Monday, have to call banks to get the rates and need to read more to figure out the differences.
  • GIC’s and Term Deposits: 90% of our money is in these at the moment (savings accounts, Term Deposits and GIC’s), making us only 3.5% for $US and 4% for $CAD.
  • Cash: not an investment but always a good idea to have some easily accessible cash.

Next, I want to figure out an investment ratio that makes sense in our situation. I’ll start with TD’s Mutual eFunds application questionnaire – Wealth Allocation Model, they call it. It’s supposed to help decide on Growth/Safety/Income ratio, as well as proper foreign exposure.

If you want to take a look at their form, download the PDF (link opens up the PDF document in a new window). The work sheet is on pages 6-9.

TD also offers an online Portfolio planner.

TD is not my favorite bank, I think they are alright, but I really like their online tools 🙂

… a few minutes later. This is sickening and don’t I feel stupid. Looks like I found our LATTE FACTOR and it’s coffee! Coffee house coffee is often really bad, even when fairtrade organic. The best coffee – by far – I’ve ever had is the one my husband prepares at home from freshly ground beans. Why do I always fall into the trap of buying a cup of crappy coffee, most of the time it’s in a paper cup coated with plastic and drunk on the go? What is the apeal of this?

I lumped coffee and eating out under the same category, but it’s really mostly coffee. Sad thing is that every month I saw just how much we spent on coffee and coffee shop deserts (I use Quickbooks to track spending), but it didn’t hit me until just a few minutes ago, when I looked at how much we spent on this stuff in a YEAR. $516 is more significan than $43, wouldn’t you say. A lot harder to take, too.

$516 per year, saved for 3 years, compounded at 4% would yield $127 of interest (this is before taxes but still impressive compared to a loss of $1548). I resolve to not buy coffee house coffee.

I come from a culture with pagan roots. Back home, “in the old country” as they say here in Canada, on any given day you are bound to encounter several superstitions. Most people believe in them, and there’s always someone nearby to “guide” you if you’re not sure what your next step should be. Superstitions are our rules to live by 🙂 I find them very comforting in a weird way, especially when things are supposed to go in my favor, according to this or that rule. Rationality aside, there are some things I just follow blindly. Others I may step over, but I won’t feel comfortable doing it. I thought I’d share a few superstitions related to money. There are basically things you do to not lose the money, and things you do to get more money.

  • Keep your paper money separate from all other junk in your wallet. I also like to keep the bills straightened out and flat. Show your money some respect and it’ll respect you back sort of thing.
  • Don’t take the garbage out after the sunset. I follow this one religiously. I pretty much admitted I’m irrational, how can I write about money and be taken seriously after this?
  • Cover the toilet seat. I don’t mean put the ring down, cover it with the lid.
  • Never allow your toilet or faucets to drip, fix them up ASAP. Even according to feng shui, the leaks signify your money “leaking away”.
  • If your left hand (palm only) is itching, it means you’ll be receving money very soon. No joke, 2-3 days before we get checks in the mail, I get this itch. Maybe I’m very fine-tuned in a way, I mean I have a life full of superstitious experience 🙂
  • I time all our big purchases with the Moon phases. We never buy anything “big” during the 4th week of the lunar cycle. This is more like “old wisdom” than a superstition to me. I use the lunar cycles for lots of things. If the Moon affects the oceans, don’t you think it has some affect on us, tiny humans? For the same reasons, I wouldn’t make any investment decisions in the 4th week. Handy Phases of the Moon page.
  • I keep a “piggy bank” and never count the money in it. I believe the English may have a similar superstition or a saying (something about counting fish?)

The list is by no means complete, but there are some things I won’t admit to doing even anonymously. They will remain my private embarassment, my “dark money magic”.