If you are new to WhereDoesAllMyMoneyGo.com, every Friday I run a post called “A Lap Of The Blogs” which provides links to articles I found interesting and think that others may want to read for themselves. I also include some commentary on what’s going on in my personal life and a weekly “racing video” since my former life was in the auto-racing industry. The name “Lap of the Blogs” is in reference to “A Lap Of The Gods” which is an old video series which chronicled on-board footage of the world’s greatest F1 drivers lapping various racetracks from around the world.
I’ve been busy putting the final touches on my official work website so I’ve been behind on posting information on DFA which I know many people are interested in reading. If anyone cares to, please check out www.ExecutiveFinancialPlanning.com and have a run through the site. While some readers of this blog contact me for professional advice, I’m under no illusions and I know that many are DIY investors who don’t need to use an advisor for investments. However, I would like your input for the betterment of those who should be using a financial advisor. In particular, take a look at the $100 second opinion – I think this is a service that is lacking for investors. (p.s. – I’m open to suggestions for improvements)
A Lap Of The Blogs
The Million Dollar Journey surveys his readers to see if they have changed their driving habits due to the higher fuel prices.
Ellen Roseman starts a discussion on the different ways to save on gas. Personally, I did an experiment many years ago when I used to travel quite a bit on the highway. By driving 100 km/h instead of 120 km/h, I was able to add an extra 100km to each tank of gas.
Larry MacDonald highlights Standard and Poor’s latest research report which indicates that during the 2000-2002 bear market, actively managed funds did not offer all the “downside protection” that many people espouse they do as most of the active funds did not beat the index.
The Quest for Four Pillars gives a quick book review of “Your Money and Your Brain”. Actually, the other half of the dynamic duo also reviewed it the next day.
Michael James on Money wonders why we have so many commission-based financial advisors. Personally, I have to wonder who came up with the idea of paying fiduciaries commissions – it makes no intuitive sense no matter how you cut it.
Canadian Dream: Free at 45 explains a few ways to have a “staycation” – which is the buzz word this year for those who choose to vacation near where they live to save money.
The Canadian Capitalist gives a great primer on REITs (Real Estate Investment Trusts).
This Week’s Racing Video
This week’s racing video highlights the fancy footwork required to properly drive a racecar. One of the first things a race driver is taught is how to properly use the pedals – specifically, you need to learn how to operate all three pedals at the same time without thinking (because you don’t have time to). In this video, not only will you see how to use all three pedals at the same time (yes, with only two feet), but you’ll also notice some other irregularities such as 1) tapping the brake with the left foot before a hard braking zone (to ‘prime’ the pedal and keep it from going soft, and also to make sure you have brakes in the first place) and 2) not always using the clutch on upshifts (the higher up in the gearbox you are the less precise you have to be with the clutch pedal and you don’t even need to use it at all with some cars and gearboxes if you know what you are doing). In my old Honda CRX I used to go both up and down the gears without the clutch pedal to mess with wannabe ‘car guys’. Anways – take a look:
Thanks for the link. At first I didn’t see the testimonials on your Second Opinion page. I think they could be a little more prominent. Maybe a very brief good one on the top page with a link to more.
Again, love the videos. Thanks for the mention and enjoy the weekend!
Interesting post PB,
Honda CRX was my favourite car ‘cuz it handled like a dream and went like stink, damn you car thieves!
Standard > Automatic
PB, What are you driving these days? You strike me as an Acura type of driver?
To the readers of WDAMMG Blog: Is your car indicative of your investment style?
Warren Buffet drove a 2001 Lincoln Continental, but now drives a Cadillac DTS. I guess he likes them built for comfort, not for speed. That’s how I like my women…kidding ;-)
@Michael James – thanks for the suggestion, will definitely incorporate that.
@TKO – Close! Honda Accord. My first car was an Acura Integra LS (2nd gen) which I modified for light track use. Sold it at 275,000km – solid as it comes. I sold it and “downgraded” to the 1987 CRX Si which I bought for $800 and it had about 300,000km on it. I did this to help pay for taking a year off to go to the Bridgestone Racing Academy (9 month program). After that, I bought a used BMW 318is (I gave away the CRX at almost 400,000km), and the BMW was no spring chicken either at around 200,000km – again solid car and sold it at around 300,000km. My current car has been my first real “splurge” as I bought it with only 13,000km and it is an ’05. It was between that and a TSX at the time (which really is just the european accord).
Thanks for the mention Preet. The $100 second opinion is a brilliant idea and maybe you should highlight that in this blog.
@CC – Thanks for the note. I’m going to post a sample ‘second opinion’ report and then I’m going to take your advice and highlight it in the blog. Since it’s raining this weekend, maybe I’ll get it done sooner rather than later! :)
Thanks for the links. You didn’t say whose review you liked better! :-P
I’ll second Mr. Cheap except to rephrase the question “whose review did you hate the least”? :)
@ Cheap and FP – the end result is greater than the sum of the parts! ;)
Question: have you ever thought about changing your names to Ying and Yang? :P
Preet, the $100 opinion is an excellent idea. Thanks for sorting out the e-mail situation for me. What about if you are a diyer? Would the $100 opinion still apply?
@ Joe – Yes, the $100 second opinion would still apply as generally the only thing different from a DIY investor and one who is already working with an advisor is that the investor himself or herself is making all the decisions as opposed to having an advisor (or working in conjuction with an advisor) making the decisions. But the same analysis would apply (i.e. portfolio analysis, product selection, financial plan analysis, investment policy analysis, etc.) Ultimately, either arrangement could allow for less than optimal decisions being made.
There would be no need to examine the advisor fee structure since there isn’t one, but I would tailor the analysis to be more palatable to a DIY investors concerns as well. For example, if you read these posts from Tim at Canadian Dream: Free at 45, you’ll see that he is very proficient with managing his own affairs and at the same time he was quite happy to use me for a very detailed second opinion (note that I created a full blown financial plan, and a full blown investment policy statement for him, so his ‘second opinion’ was more of a full blown fee-only engagement. Nonetheless, he was satisfied and is a DIY investor.
Click here to read his posts: Part I and Part II
Again, to be clear – back then I didn’t have the $100 second opinion service – it was something I’ve only recently come up with as many people pointed out that they didn’t know if they needed to fully engage another advisor (or in the case of DIY investors – if they had anything that might need addressing), so the $100 second opinion is designed to figure these things out. The $100 second opinion offers no concrete financial planning strategy recommendations or investment instructions – it is only to highlight areas of concern and to show you the various ways you might consider addressing them.