I Got A Raise Today

Today I earned a 4% raise without even asking!!!

AGF Management increased their quarterly dividend on their class B shares by $0.01 per share.  Doesn't seem like much of a raise but investing in companies with ever increasing dividends is exactly what you want.  AGF's annual dividend for 2009 was $1.00 per share. For 2010 the annual dividend is $1.04 per share which at yesterday's closing price of  $15.20 represents a yield of 6.84%.


Not bad for a day's work.


Disclosure:  While I personally own shares in AGF Management, I am not recommending that you purchase shares in AGF.  Any financial advice given is general in nature and you should always seek the advice of your own financial advisor prior to making any investment decisions.

2009 RRSP Deadline

RRSP time  is now in full swing with this year's deadline being March 1st. Any contributions made up until that date can be deducted on your 2009 income tax return.  The annual limit for 2009 is 18% of your earned income from 2008 to a maximum of  $21,000.  Every year CRA provides a Notice of Assessment which details your RRSP limit for the following year.  This is the easiest way to confirm your limit for the year.

So don't delay, check your Notice of Assessment and make plans to make your contribution for 2009!

Another Reason To Consolidate

Keeping your financial accounts at many different institutions can be a costly experience.  Many institutions will reward you for consolidating your finances in one place.  The rewards can be lower borrowing rates or a reduction on fees.

By consolidating my finances to one instituion, I now have no fee chequing accounts which saves me $13.95 per month or $167.40 per year.  While reviewing these fees, I noted that if you have over a certain dollar threshold in your investment accounts (total household assets for your registered and non-registered accounts) you can reduce your commission charge on each trade from $28.95 to $9.95. Even with only 10 trades per year, you can reduce your fees by $200. 

Today, consumers hold savings or investment accounts, registered retirement savings accounts, registered education savings plans and tax free savings accounts.  The combined total of all of these accounts just might bring you over the minimum household (single or joint accounts at same address) threshold and reduce your annual trading fees. 

Happy Saving

New Year's Resolutions

One of my New Year's Resolutions was to open a Tax Free Savings Account (TFSAs) and start making regular contributions.  ING bank, http://www.ingdirect.ca/  is currently offering 3% on its TFSAs with no minimum deposit or fees to withdraw or transfer.  Compare this with some of the traditional banks that are paying 1% with a minimum deposit of $1,000.

As an added bonus, if you are a new client to ING, you will receive a $25 bonus for any deposit of $100 or more (limit one bonus per new client).  When was the last time you earned a guaranteed 25% rate of return for a $100 deposit*. 

If you already are an ING account holder, you can benefit by referring your friends and family to this great deal by quoting your Orange Key found on the front page of your statement.  If you are not an ING account holder, use my Orange Key 25536660S1 and we both can be rewarded for you earning a guaranteed 25% rate of return.

Why not take this a little further and start your automatic savings program.  The hardest part is to initiate the action, because without any action there are no results.

Happy Savings.

* only the $25 bonus was used to calculate the rate of return as this is paid immediately and there is no time limit on how long the funds have to be deposited.  ING's TFSA investment savings rate is subject to change and is not guaranteed to be 3% for the entire year.

Who is ally?

Ally is the latest in on-line banks available in Canada.  It was launched in the Fall of 2009 as a product of ResMor Trust Company and a subsidiary of GMAC.  Its mandate is to provide great rates with no hidden fees.  Its products include a variety of high interest savings accounts and GICs available as true savings accounts or Tax Free Savings Accounts (TFSAs).

As of January 8th, 2010 the interest rate paid on their GICs is 1.75% for a 12 month term (no-penalty if redeemed early) and their high interest savings account is paying 2.00% (variable rate).  The minimum deposit is $1.

Their website offers great information on their products and comparision with other financial institutions.  For up-to-date rates and product offerings go to http://www.ally.ca/ and start saving today.

Postal Fees on The Rise

Another reason Canadians are opting to use technology as their main source of communication.  Effective January 11th, postal rates for first class letters are rising to:

within Canada                                      $0.57
to the US                                              $1.00
to all other international countries         $1.70

Certainly makes you want to pay all of your bills on-line or via automatic electronic debit.  Just 10 bills per month adds up to $5.70 per month.  Enough for another two cups of java!!!!!

How To Earn 20% Guaranteed for your Children's Education

Registered Education Savings Plans (RESPs) are the easiest way to earn a guaranteed 20% rate of return on your children's University savings.  The government will top up your contributions by 20% to a maximum of $500 per year.  Where else can you get a guaranteed 20% rate of return today?

Tax Free Savings Accounts (TFSAs)

Have you opened your tax free savings account yet? This is my new year's resolution to open a tax free savings account and begin my emergency fund. TFSAs were introduced in 2009 as a means to encourage Canadians to increase their savings level. Every Canadian over the age of 18 can deposit $5,000 per year (unused deposit room is carried forward each year) into a registered savings account. There is no tax deduction for depositing the funds however any income (capital gains, interest or dividends) grows tax free. The choice of investments, much like RRSPs, is varied. The more common choices are: savings accounts, GICs, Mutual funds, ETFs, and individual stocks.

The hardest part is to open the account and initiate the regular deposit, but once done the savings begin immediately. So don't delay, open yours today.

How to Save For Emergencies

Every financial guru or planner will talk about the benefits of having 3 to 6 months salary saved for a rainy day. However such a task can seem daunting if you don't have the cash to start with. Why not combine the rules of "Pay Yourself First" and "Systematic Deposits" to achieve this goal.

Start by setting up an automatic transfer on your pay date. Have these funds transferred into a Tax Free Savings Account (TFSA) which you earmark for emergencies. A bi-weekly deposit of $50 will generate $1,300 by the end of the first year.

More about TFSA later..............

Ten Minutes A Day

Ten minutes a day is all it takes to gain a better understanding of the world of finance. If you commit to spend 10 minutes a day reading the business page of your local newspaper your knowledge level will gow immensely.

Better yet, rather than reading the entire business section, why not choose a web site you are comfortable with and commit to read one business story a day.

I have listed a few of my favourite web sites that provide both a detailed report on the business news as well as helpful articles to understand the financial world and its products.

www.financialpost.com
www.globeinvestor.com
www.thestar.com/business

Happy Learning!

Automatic Transfers

Why not use the convenience of automatic transfers to save for your goals much like you have automatic debits to pay for your mortgage or car payments. The easiest way to get started is to set up a transfer that coincides with your payroll date and transfer a set amount to your goal accounts. By having the money come out the same day as your paycheque goes in the likelihood of spending these funds is greatly reduced.

You can start with as large or small amount as you like and have it transferred to a savings account at your bank. For example, the cost of one cup of coffee per day ($1.70) adds up to $621 per year. What would you do with an extra $621 per year? I am betting you will not miss the one extra cup of coffee each day, but if I asked you to write a cheque for $621 you may think twice.

Simple Saving Solutions #1- ATM Fees

The easiest way to add extra income to your cashflow is to not let what income you have slip through your fingers. A little planning can save you hundreds of dollars a year just by making a few minor changes to your present habits.

ATM Fees

Have you ever really considered what it costs you to use another Bank's ATM machine out of convenience. The Bank dispensing the funds charges a minimum of $1.25 and your own Bank can add on the same as well for a combined charge of $2.50 no matter what amount you withdraw. On a $20.00 withdrawal to pay your movie ticket you have been charged 12.5% interest. When was the last time your Bank paid you 12.5% to use your money?

By using your Bank's ATM machines even with only 1 weekly withdrawal you can save yourself $130 per year. Whose pocket would you rather line, yours or the Bank's?