The End

Sorry folks this is the end of my backup blog. I've finished the install on the new site and I'll be changing the Feedburner feed over tomorrow morning.

Please update your bookmarks to: http://blog.canadian-dream-free-at-45.com

There will be no more posts to this site.

Thanks,
CD

Riding the Drop of Doom

The last few weeks have been a little nerve racking for just about everyone. I don't think many people like riding roller coasters that the markets have become in the last few days. Up 200 points by noon and closing down another 30 points by the end of the day. Or just up 50 points by 10 am and down 200 points by the end of the day and so on.

If you are sitting on a pile of cash it does present some tempting buying opportunities now and again if you can handle seeing your brand new investments swing around. I'm currently down to a small amount of cash and I'm thinking I'll sit here waiting for things to calm down a bit before I put in anything else.

This does present a good time for me to start my mortgage acceleration plan. As a 5% after tax rate of return is starting to look fairly good compared to the swing my RRSP accounts have been taking in the last while.

If nothing else I'm curious to see where the markets end up by the end of the year: up, down or just sideways.

Confessions of a Personal Finance Blogger

Perhaps there is something in the air or perhaps my frustration at working on switching to a new hosting service that has me thinking about my limitations and failures. So in the interest in proving I am not a personal finance guru all the time I present a brief list of confessions.

1. With the recent market correction even I have had the thought "Did I make a mistake and is this investing with index funds a good idea?"
2. I bought a stock when I was a teenager with no knowledge of what the company did or anything else other than I liked the name of the company. Sad but true. In the end the stock fell so much that I could barely cover the trading fee to get out of the stock.
3. I've gotten to the point of reading so many personal finance books over the years I can now pick up new ones and skim entire chapters after reading two paragraphs in a chapter. You can only read about this great concept of 'living below your means' so many times before your brain starts to turn to mush.
4. I do enjoy investing and personal finance, yet I very much dislike the paper work that comes with it (bank forms, account statements and booking appointments during my lunch hour to sign forms).
5. Some days even I think "Am I too obsessive about all this personal finance stuff? Am I the only one who thinks that most people are strangely reckless with their money and still manage to turn out relatively fine some how?

Houston, We Have a Problem

Well actually there were several problems so far with changing domains over the weekend. So I'll be posting at the backup domain location until further notice.

Actually all these little technical issues reminded me of life in general, it doesn't ever seem to go according to plan. This is why many people often say you need an emergency fund. As many of you know I don't keep a fund, but rather a line of credit which I can tap into instead.

Why don't I keep a fund of cash? Partly it is I keep enough cash floating around various saving accounts that I have about $1000 slush fund at all times which can cover my insurance deductible if I truly have a major problem. Also because I don't consider the car or house insurance coming due an emergency. Actually I don't consider anything you can plan for in day to day life an emergency.

So what is an emergency? This will depend entirely where you live and possible costs you might face. For example, if you live in the US and have co-payment health insurance you are going to need a large cash fund to cover a major medical emergency. Yet in Canada the truly major costs are bulkly covered by health care, so if becomes a bit overkill to keep the same amount. Basically the idea of a one size for all emergency fund doesn't work, it depends on your own situation.

So what is an emergency you have faced and how much did if cost you? If you want to share leave a comment. My story went something like this. I had a baby come ten weeks early, a leaky house roof and my lease buy out on my car all within three months for a total of $17,000 (ok I had planned for the lease buy out but the other two wiped me out before I could pay for it, so it became part of the emergency).