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.
Wow, what a day today – out of the house at 7am and not back until 10:45pm – which means today’s links will be fewer than normal. Of interest perhaps to some, is that I had a wonderful lunch with Dave Chilton (author of The Wealthy Barber). That guy is seriously funny, and a real gentleman too. He’s working on a new project which I think will be well received, but mum’s the word for now. I’m such a tease… :)
From Around the Blogosphere
Don’t forget to enter this week’s big book giveaway. I’m giving away lots of books – you have until midnight tonight to enter (assuming you read this on Friday!). Just click on any of the following book reviews for rules and regulations:
- Findependence Day
- No Hype! The Straight Goods On Investing Your Money
- New Rules of Retirement
- RRSPs: The Definitive Guide to Registered Retirement Savings Plans
Thicken My Wallet discusses the pros and cons of buying stocks with high dividend yields. There seem to be a number of stocks that look attractive based on the yield alone. Buyer beware…
Big Cajun Man is fed up with hearing about all the people who predicted the financial apocalypse.
Michael James on Money is being stalked by Bell. Big fonts don’t entice him though.
Canadian Capitalist (who was also featured in the Globe and Mail!) discusses the poor performance of stocks for the past 10 years and shows that it’s not out of the ordinary.
Million Dollar Journey discusses some of the finer points of income trust distributions and taxation.
This Week’s Racing Video
Okay, I love this video and even if you don’t like auto-racing but like this blog, you’ll appreciate it. This video explains, using telemetry from the car, exactly why Michael Schumacher was so much faster than all his teammates. It examines the throttle trace, speed and steering input during a corner between Schumi and his then teammate Johnny Herbert – it all boils down to Michael Schumacher being right on the knife’s edge versus Herbert who leaves a larger margin of safety with his traction budget. I’m just itching to get back on track!
Thanks for the mention, I predict you will be very successful! Maybe not as much as the Arizona Cardinals, but still successful.
Hi Preet, I had put this question on another thread but I think it got lost in the contest comments that were flying back and forth.
Since the downturn in the markets I’ve been hearing a lot of grumbling around work about the RRSP plan. Things like “I’ve been counting on them and they’re losing money . . . What are we paying them for?” . . . You probably hear it every day.
I’m not in any position other than a participant in our RRSP plan, but what kind of things can I use to describe why they are losing money so that they don’t do something drastic like cash it in or switch the whole lot to the money market locking in their losses?
I’ve tried the general things like “Well, considering how much you’ve put in, your tax deduction, and how much the plan is worth . . . how much exactly have you lost?”. Since we have a 100% match up to 6% of salary I doubt anyone has actually ‘lost’ money, but they are all looking at the change since peak value. For some reason it just doesn’t click for most people.
Lunch w/ Dave Chilton? That is awesome! Were you getting pointers for a new book?
Oh, and thanks for the link!
I love this video.
Thanks for the mention. It’s interesting that the key to fast cornering seems to be smooth throttling, but erratic steering.
Thanks for the mention Preet. And thanks for the heads up on the mention.
Great job on the racing videos!! I enjoyed your book and found the material extremely useful.
Thanks for the information! I like this video.
@ Traciatim – my apologies for not getting to this sooner. I applaud your efforts to educate those around you, but at some point I suppose you have to let people make up their own minds.
However, here are some things to throw at them one last time:
1. The words “risk and return” are popular for a reason. You can’t expect higher returns without added risk – there are too many people and market participants ready to arbitrage away any free lunches. So we must live by this credo. The cost of higher returns is volatility, plain and simple (when dealing with sufficiently diversified portfolios). But it only works if you stick it out. If the volatility scares you out of your strategy during a low – fine, you have to sleep at night. BUT if the next bull market pulls you out of your GICs and back into equities because you are missing out on returns, do not pass go, go directly to a tattoo parlour and get “LOSER” put on your forehead.
Was that harsh? :)
2. It’s buy low, sell high. Most people, however, act like it’s buy high, hope for higher, but then get scared out when it’s low because obviously it’s going to zero, right?
3. You can’t drive by your stock portfolio and physically see what it’s doing. This is why if you bought a house in Jan 2008 for $300,000 and someone offered you $160,000 for it today you’d be less tempted to sell it than your stock portfolio which is down a similar amount. This is because people understand their house better than their investments.
Thanks for the mention.That is awesome! Were you getting pointers for a new book.
Thanks for the link!