North American Contrarian

Telling it like it is… in North America

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The Ultimate, Life Changing Financial Advice

Of all of the financial advice I have read, one piece stands out as the most meaningful.  It’s a one word goal that is deceptive in its simplicity and it changed my life.



For me, starting to save was one of my greatest achievements of the past decade.  The first time I posted a surplus was an incredibly liberating feeling.  Suddenly credit card companies, bill collectors and collection agencies had no reason to call.  It was as though a constant (albeit politically incorrect) game of cowboys and Indians had suddenly ended, the chase was called off and I was free to go my own way.

Similar to exercise routines, or remembering to call grandma every week, the toughest thing about the whole procedure was the first time.  It required change and people, including myself, are loathe to make change.

What surprised me- and despite what I had thought, the act of saving soon became enjoyable in its own right.  It’s noScreenHunter_02-Apr.-12-20.59t the immediate joy I get when the alarm accidentally goes off during the weekend or leftover pizza appears in the fridge after a night at the pub.  Instead, it’s a plodding, long term deal.  It’s more the feeling I get after a good workout or when I happily noticed that 2% milk suddenly tasted like a viscous goo after switching to 1%.  These are good things, that will make me a better person in the long run.

The sad thing is that, in our quest for immediate gratification these pleasures are too easy to overlook.  This is why only 24% of eligible Canadians file an RRSP and we only currently stash away a pathetic 3.9% of our incomes.

Experts often recommend that money be automatically withdrawn from our paycheques to savings, a sort of trickery that forces us to contribute once a month.  And that does work.  But in my humble opinion it also robs us of our greatest weapon to really invest in investing.

url-1My technique is to very consciously and methodically decide how much goes in my account each month.  This is because I actually get off seeing my bank account swell and look forward to helping it along.  I don’t have a specific amount I plan to stash away each month because my strategy is to live as frugally as possible and dump the rest into index funds and ETF’s.

But I’m getting ahead of myself here.  Before you begin to save, you are taxi driver with no petrol or a hockey player living in the deep Congo.

It all starts with a very small, though not necessarily intuitive step.  This is, to use an old cliche, to put a few cookies from the jar just out of reach.  To portion even a minuscule amount of your paycheque away from the incredible diversions of modern society towards your greater good.

In short, to begin, you must first follow my best advice.  You must start.


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Shareholders Don’t Give A Fuck

I have a confession to make. As you can likely tell by reading my blog, I aim to take a contrarian approach to life in North America. I aim to expose the dark side of life here and all of its foibles.

But I am also a shareholder, mostly invested in index funds. I own stock in everything. I own the Alberta oil patch, and pieces of Chevron, Shell and BP. I own companies known for their association with dirty money and with criminal activity.

And I don’t give a fuck.

Joe FreshLet me provide some context here. If you were to ask me: do you agree that we should reduce dependence on oil, I would answer, “you’re dam straight: I have my consumption down to almost zero, and rely on my bike as my primary form of transportation.” If you were to ask me about the exploitation underway in Africa I would reply “it’s an affront to human dignity”, adding that I am well aware of the way the oil industry has literally robbed entire African nations of their resource wealth, leaving nothing but devastation in return.

But all that dissolves when I’m watching the stock ticker. As hypocritical as it sounds, when these figures tick up, I feel good.

Herein lies the fundamental problem with capitalism as it stands. It’s the disconnect. If people who bought clothes from Joe Fresh and Gap spent time in Bangladesh and met the victims of the building collapse in Rana stocks upPlaza, they would think twice about purchasing sweat shop clothes. If those who bought Nabob travelled to the fincas in Brazil and consorted with exploited coffee workers, they would likely refrain from drinking anything but Fair Trade coffee.

But North Americans are busy people, and we, too have limited resources (both time and money) to investigate every purchase we make, and stock we buy.

I’m not proposing a solution here. And I know a lot of people would argue this point, and say that we should recognize that spending a dollar is like voting for how you the believe the world could be.

But in the end, most of us- myself included- aim to buy low and don’t concern ourselves with the effects. It’s a tragedy, but a reality of the system that, like it or not, we are all a part of.

Now time for me to get back to my stocks- it appears that resources are posting a strong run on the day…

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I lost BIG in stocks… And Feel Extremely Lucky

Looking back, my foray into the stock market was a sad venture.  About two years ago, I opened an account with the online broker ImageQuestrade.  I had watched various stocks for a few weeks and, over that period, they mostly ticked up a few points.

I was a big fan of Apple products, and noticed that the stock had moved higher.  I recall that one day the stock opened at around $500 and by end of day was up at around $550.  I did the math: if I dumped my savings, around $10,000 into Apple stock, I would have owned 20 shares.  20 shares, with a $50 gain, and I would have $1000.  How had I missed this easy money?

One day at work, I decided to take the plunge and bought 10 shares at around $600.  It was an exciting Imagefeeling, especially when, on cue, the stock started to rise.  I started watching Apple stock obsessively.  At work, I kept Questrade secretly hidden beneath spreadsheets and reports.  I felt like I’d discovered a secret income generator- and it was so easy!  Soon the stock had reached close to $680.  I had made almost $1,300 without leaving my chair, in just over a month.

In the summer, 2012, Apple released some negative numbers. The new IPhone had not met analysts predictions.  The stock, which had now reached almost $700 tumbled and within a couple of days it was at $550.  All of my gains were gone, all of the time that I spend watching the numbers, wasted.  My easy profits had turned into a loss of over $1000.  I panicked.  It seemed a foregone conclusion: Apple was doomed.  I sold my stock, and felt awful- sort of like guilt and despair rolled into one.

That would be the end of the story, had I not checked Apple stock a couple of months later.  While the stock had not reached its previous peaks, it had climbed back up.  Had I waited, I would have at least broke even.  I vowed that next time I went into the stock market, I would only do so after I was more educated.  I promised myself I would read three books on investing before I bought a single other stock..

I read:

I can’t overstate the importance of these books.  I won’t summarize them, or give financial advice, as you can read them for yourself.  But what I will say is that my Apple strategy was not investing.  It was gambling.  The key point made brilliantly in the above books is that you can’t “time” the market.  You can make money in stocks, but the way to do so is through careful investments in a diverse portfolio, and giving it as much time as possible.  In short, doing everything I failed to do in my venture with Apple.

Since then, I have a lot more invested in the market and so far I have strong earnings.  I only sell after careful consideration, and never let emotions dictate anything.

Strange as it sounds that lost $1,000 was the a best investment of my financial career.