For many young and middle-of-the-road families out there the RRSP vs RESP account debate is a very real one that usually creeps up right around tax time every year if not more often. It is often a confusing topic for some people because the financial industry spends a lot of money trying to convince parents that they need to max out RRSP and RESP accounts, and it is often extremely difficult to do both as people seek to balance mortgages, student debt, and life (that pesky life, always seems to get in the way of the raw numbers right?). There are obviously numerous aspects of each person’s financial situation that will come into play when looking at whether a RRSP or an RESP contribution is right for them.

A Hand Up Either Way

The first thing that parents need to compare when looking at the RRSP vs RESP account debate is that the government wants you to use both of these plans, and they are willing to help you out with each one. The difference lies in just how they help you out. Both plans are registered savings plans, and any income generated within those plans from interest, dividend income, or capital gains is tax deductible. Keeping those investment gains compounding away from the long arm of the tax man is absolutely essential to growing your money. Where RRSPs and RESPs differ is in how the government contribute to the plan. RRSP contributions are tax deductible. This basically means that the government will pay you back at your marginal tax rate (the highest rate you pay) on whatever money you put into your account, BUT the flip side of that is that it will also be taxable in your hands as a retiree when you take out. Although the majority of people have a lower income level when they retire, most Canadians that I know will still pay a combined federal/provincial marginal tax rate of at least 24-25%.

Tax Deduction vs CESG

RESP contributions, in contrast, are not tax deductible. The government does add a cool incentive to put money away for your child’s education in the form of the Canada Education Savings Grant or CESG. The CESG is an agreement by the government to chip in 20% of your contribution into the RESP account up to maximum of $500 every year. This means that if a parents puts in $2500 into their account, the government will contribute $500 into the RESP, bringing the total investment to $3000. The government’s money will now work for you and can be used to create investment gains just like your own money. In terms of taxation, money that is taken out of an RESP is taxed in the hands of the student receiving it. Most students do not earn enough income to pay taxes once their basic exemptions and tax deductions/tax credits are added in, so very little of the RESP money usually finds its way back into the government’s hands (well, unless students use it to pay for alcohol, which has incredibly high sin taxes attached… it’s not like anyone would do that though right?).

RRSP vs RESP Account Case Study

So before we look at some of the specifics of each plan, let’s examine a couple of case studies:

Mike and Mindy

Mike and Mindy are 40 years old and have a five year old child. They want to help out their little darling and they believe they should open a RESP. At the same time, they know that life is short, and they hope to retire, or at least severely cut down on their full-time work load at 55. Mike and Mindy are both professionals and each make 70-80K a year.

For the sake of our comparison, we’ll use fairly safe investment returns of 7% for both of the accounts. Admittedly this is slightly unfair to the RRSP, as one could argue you could take on a little more risk inside of an RRSP considering the investment time horizon is a little less rigid.

Mike and Mindy could contribute $2500 to an RRSP. Their marginal tax rate is 39.4% (taking Manitoba’s provincial rate), so they receive a nice little tax refund of $984. For the sake of argument, we’ll say that Mike and Mindy are dependable little savers and that they turn around and save the tax refund in a registered plan as well. This gives them a total investment of $3,484. In 15 years of 7% returns, their investment has compounded to a nice chunk of change at $9,612.47.

They could also contribute $2500 to an RESP. The government would kick in $500 as part of the CESG to bring their overall investment to $3,000. After 15 years, when little Suzy is on her way to a medical degree, they have $8,277.09 in the account.

At this point, it looks like the initial advantage of that tax deduction beat the CESG contribution, all other things being equal for this high-income family, but we have neglected to measure the tax impact upon withdrawal. Little Suzy will be allowed to have about 22K or so (or whatever the inflation equivalent is by then) before she has to pay any taxes, so we’ll call her RESP money tax-free. Mike and Mindy knew they wanted a fair degree of security in their retirement, so they have a decent income and a marginal tax rate of 27.75%. This means that their after-tax return on their original investment will be $6,945.01. While this is still pretty nice, it does illustrate how important tax considerations are in financial planning.

John and Jane

Just because I want to keep things simple, let’s say that John and Jane are very similar to Mike and Mindy. They have the same income levels, expect the same returns, both want to retire at 55, and have a 5-year old. The difference is that John and Jane are 30. Let’s check out what the increased compounding time (now 25 years) does for our RRSP numbers:

$3,484 ($2,500 contribution, plus reinvestment of tax refund) over 25 years of 7% returns is $18,909.18. After factoring in our 27.75% tax claw back when we withdraw the money, our investment has still generated $13,661.89. This illustrates just how powerful that extra compounding time is. This is also probably being too conservative, because with a 25 year investment window, more risk could easily be taken, and a higher corresponding return would be very normal to assume.

Variables in RRSP vs RESP

Now there are obviously a ton of variables that these case studies don’t take into consideration. A family with a more average income would get less of a tax deduction, and it’s possible that our cast studies would have less of an income in retirement as well. The CESG contributions from the government represent an automatic 20% Return on Income (ROI) and it appears because of this RESP contributions gain a short-term advantage. In the RRSP vs RESP account debate however, investment time horizons pay a key role, and the RRSP has a considerable edge there. One other little side note is that any tax credits that a child does not use while they are going to school can be kicked up to the parents if they so choose. The RESP money might negate some of these credits, but that is a lot of variables to plan for.

…and The Winner Is:

If you are even talking about the RRSP vs RESP account decision then you are further ahead than most. The RESP plan is a great boost to your child’s finances, and if it prevents them from going into debt, the savings become even greater because of the interest charges that were prevented on the hypothetical debt. On the other hand, the earlier you put money into your RRSP account (and reinvest the tax refund, instead of spending it like so many people do) the more security it will give you later in life. If a child does not use their RESP, it can be transferred into a sibling’s RESP account, or rolled into an RRSP account with the loss of the CESG and the investment returns the CESG has produced. In a perfect world, you should definitely consider paying into both plans, but the closer your child gets to post-secondary age, the more attractive that automatic 20% ROI looks when you invest through an RESP account.

Warren Buffett and his pal Charlie Munger always say that they are looking for companies that have a “durable competitive advantage” and have low debt levels. Well, if millions of people around the world are strongly addicted to your product, and you have no real debt to speak of, does that qualify (Buffett has in fact owned stock in a smokeless tobacco company, and the giant RJR Nabisco which sold tobacco products)? From a complete numbers point of view, it still pays to be with the tobacco companies instead of against them. Sure, popular culture in North America might be trending away from the old school Marlboro Man icon, but internationally cigarette sales have never been healthier (now there is an oxymoron) and the smokeless tobacco market seems to be taking off as well. The products created by tobacco giants such as Altria, Philip Morris, Reynolds America, and Lorillard are not going out of style any time soon. They have great profit margins, solid shareholder pay back histories, and will likely be nice little income-generators for your portfolio. For this reason, many investors who usually leave their emotions at the door when it comes to comes to distributing capital are left with a moral conflict.

Talk About a Controversial Investment

My mother is a classic “lifer” in the world of tobacco use. She started when she was young in order to look “cooler” and more grown up, and she has never been able to break the habit despite several tries at quitting over the years. To further illustrate the situation, she is a public health nurse who knows full well the dangers and risks she is taking, yet the need for nicotine and the various other chemical dependencies that go with cigarettes is stronger than that knowledge. My father-in-law is in much the same boat. He has been a pack-and-a-half-a-day smoker for decades despite being one of the smartest people I know, and a specialist in biology. There is no disputing that tobacco causes intense harm to individuals and their loved ones, the health system, and second-hand victims. It is also a fact that tobacco is addictive. So how do they tempt people into investing in them? I think it boils down to justifying our natural human greed.

Investing In Tobacco Dividends – Ethical?

“If I didn’t own the company someone else would. I don’t force anyone to buy the product, and if I wasn’t there to provide it someone else would be.”  This is either a justification for owning part of a tobacco company, or the justification for being a drug dealer. Interesting that it is equally logical, and equally compelling in either case. The only difference is that in the case of tobacco you could add, “It’s legal.” Really, if the government allows it, how bad could it be right? I think talking yourself into having a tobacco company as part of your portfolio is pretty easy if you really want to. I mean seriously, where do you turn these days if you are looking for a company the Boy Scouts would endorse? Apple employs slave labour in China (as do most technology companies), Wal-Mart has stores full of clothes made by kids in sweat houses, oil companies are purported to be killing our planet while at the same time killing our wallets at the pumps, and you can now even invest in medical marijuana if you so choose. Needless to say that this whole morals and values territory is getting pretty grey. When medical insurance companies such as Sun Life are investing billions of dollars with tobacco giants such as Philip Morris, it is tough to play the good guy card and keep your hand out of the steady stream of profits.

I Hate Smoking – But Love Nicotine-Fuelled Income

Tobacco stocks are a simple product to understand, and their balance sheets are almost always strong and inviting. Sure there are constant litigation cases in the courts, but these companies have the best lawyers in the world and this stuff has been going on for decades. I would say many are in far less danger than off-shore oil drilling companies. Developing countries around the world are increasing in population far faster than Europe and North America, and these countries have very lax regulations on tobacco use, and hardly any social taboo exists either. This means that tobacco companies have plenty of room to grow and expand going forward.

Investing in tobacco stocks has become quite popular in the last few years as they are one of the few industries that are resistant to recessions (addiction will do that for you), and they know for distributing solid dividends over a long period of time – music to the ears of a new generation of retirees looking for income-producing assets to park their money in. Here is a snap shot of some the current tobacco companies on the market today (all stats taken from the May 3 edition of the Globe and Mail):

Reynold’s America (RAI): Currently trading near its 52-week high of $42.81 (with a low of $31.82). It has a P/E ratio of 14.52, and a dividend yield of 5.50%.

Altria (MO): Currently trading near its 52-week high of $32.41 (with a low of $23.20). It has a P/E ratio of 15.56 and a dividend yield of 5.10%.

Philip Morris (PM): The granddaddy of big tobacco is trading near its 52-week high of $91.05 (with a low of $60.45). It has P/E ratio of $17.95 and a dividend yield of 3.40%.

Unethical Relative To What?

Notice a trend here? It seems like most investors have decided that tobacco products are someone else’s problem and are deciding they want a piece of the profits generated by nicotine addiction all over the world. I figure since we already keep the developing world in sweat shops with the products we buy (and invest in), we may as well profit from their lungs’ demise as well right? If you’re not a fan of these companies, you could always invest in one with a pure past and product like Coca-Cola right? I hear Buffett knows something about that one…

Full Disclosure – I do not currently own any tobacco stocks in my portfolio, but have considered adding them in the past, and likely will in the immediate future as well.

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I had a great vacation in Bali (definitely got my dose of Vitamin D…probably enough to last me a year lol).

Bali was absolutely beautiful… everything about it was beautiful.  I have never seen any place so lush and fertile before.  The people were amazingly friendly, accommodating, and honest.  Most people we met were genuine, friendly, humble, and SO laid back.  Since everyone else was so laid back and the scenery was so serene, the normally frantic me was forced to chill out a bit.  Which is a good thing…haha.

I can see why Elizabeth Gilbert from Eat Pray Love fame “found” herself in Bali.  It’s just so beautiful.  Speaking of Eat Pray Love, I had to visit Ketut Liyer in Ubud.  He was depicted just like the movie and the book, he even pulled out his medicine book like he supposedly did all the time in the movie!

Of course I had to see what he had to say about my future.  Unfortunately because of the massive fame that has become of him, the local Balinese say he has memorized the English phrases and fortune telling and therefore he says the same thing to each tourist.  He told me that I was very verrrrry pret-ty, that my cheeks were good which made him hap-py, and that my lips were sweet like suuuu-gar.  He also said the exact same thing to every other English speaking tourist coming to see him.  It was a little disappointing but still a tourist novelty and a pretty cool experience.  His wife didn’t tell me to find a good man, but she did hustle and bustle about preparing dinner.  She also had a disgruntled look on her face like she meant business LOL.  Ketut is certainly doing very well for himself and has become a little bit of a business tycoon!

PF Blog Love

• My Wife Quit Her Job shows us how to start and find products to sell online
  

  Breakfast in Bali

• Free From Broke shows us how to Hedge against inflation with education
• The Wealthy Turtle shows us 7 mothers day presents that will land you a night on the couch
• Planting Money Seeds shares 5 of the biggest lies freelancing clients could be telling you
• Out Of Your Rut talks about going global with an online business.
• Stupid Cents reminds us that there are opportunities online but watch out for scammers
• Balance Junkie shows us the purpose and the pessimism of no
• My University Money explains lifestyle inflation
• Financial Highway is GIVING AWAY $500 for sharing you best money saving tip
• Bible Money Matters shows us 50 Easy Ways To Save Money Every Month

 Carnival Fun

• Self Directed Investing For Retirement Carnival – Socialism is Winning Edition
• Festival of Frugality #336 – Bee In Your Bonnet Edition
• Totally Money Blog Carnival #65 – Success, Wealth & Happiness Edition

Others can offer you tips on how to make $10,000 in 4 hours a week online (most likely it’s by showing others how to make $10,000 in 4 hours a week online), and I have to admit that my advice pales in comparison to these promised riches. I can tell you that my method for how to become an online freelancer is fairly easily to reproduce, and nearly anyone can do it. It is always interesting to me how many good writers I see trying to make a living on the internet, yet failing miserably. In many ways, they have become the victims of cheap English content outsourcing. If you want to make money by freelancing online you have to find a way to stick out from the crowd, otherwise you will simply be competing for $3 per 500 words and giving yourself carpal tunnel for peanuts.

Make Money Online – The Pot of Gold At The End of The Rainbow

So, you’ve heard there is a big need for writing online, and you have no interest in doing any of that crazy coding or website building stuff. How do you go about finding a gig? Well I would recommend becoming great friends with a guy who does that crazy coding stuff and then go from there;) Barring that, here is how you stand out from the crowd – you create a blog. I know this seems ridiculous, you want to write for others and get paid for it, not sink time into the black hole of time that is blogging. Here is the thing, building a blog is the perfect way to showcase a portfolio of writing. I might even argue that if you have two or three passions that you like writing about, it would be to your advantage to create more than one blog. This is also where, with a small amount of seed money, you can make this whole outsourcing thing work for you. If you head on over to Elance or Odesk you will find a bevy of people who can set you up a pretty decent blog for like $25. Heck, you could probably even find someone on Fiverr to do it for you. WordPress makes blogging so easy, that even I can do it, and the whole process can be outsourced for very cheap. I’m not saying you’ll get a gorgeous world-beating blog out there this way, but you could find something workable. Another option is to use a ready-made blogging platform at a place like blogspot. These platforms are extremely simple, they just aren’t ideal for generating revenue, or presenting yourself as unique.

Use The Voice Young Padawan

Blogging is a great way to sharpen your writing skills and develop this mythical “voice” you keep hearing about. Basically, your “voice” is just something distinct about your writing. It’s tough to teach, but it’s kind of like allowing your unique personality to shine through your writing (when you have a sort of stale personality like mine, your “voice” is to try a little too hard to act cool in order to cover that reality up). You don’t need to be a perfect grammatical writer to write online (at least I hope not, or I am screwed), but you do have to be proficient. If you’re worried about your ability to communicate effectively because of technical writing-related problems, hiring someone online to check out your writing and give you a few pointers is much more cost-efficient than taking a writing course from some pretentious hipster who is a failed writer at a university or college.

To Be an Online Freelancer Go Online!

Once you have identified your passions, become a decent writer, and figured out how to set up a basic blog, start building that online portfolio. I know it seems dumb because you aren’t making any money on these articles and you could be making $5-$10 a piece somewhere else, but trust me, this will pay off in the long run. After you have a solid base, like say 25-30 articles, start “building a presence within your online community.” I know this sounds like I copied-and-pasted that line right out of some guru’s overpriced eBook, but it is true nonetheless. The blogging world is not exactly rocket science. Get out there and “meet” people. Instead of shaking hands and exchanging names that you will forget as soon as you walk away, leave an intelligent comment that is actually relevant to the information presented (don’t be that guy/gal that leaves 11-word comments everywhere in a bid to get recognized). After people interact with you for a little while, you can offer to do a guest post for them, or some other favour. Make sure and remind people you are another personal finance blogger. PF bloggers get so many requests for garbage guest posts all the time,  you have to make us understand you’re cooler than that drivel. I also recommend checking out any ready-made blogging networks and meeting people through the respective forums and online chats for your preferred niche. Again, I know this all sounds like a lot of effort, and a lot like doing all the dirty work to build a blog, but I honestly believe this is the way to actually get paid what you are worth as a writer. Keep lists of all the contacts you make, and always promptly return emails and other communication from them, these contacts will be essential.

Becoming an Online Freelancer vs Owning a Blog

If you don’t plan on making a ton of money off of your blog, you can take your foot off of the pedal a little at this point, and just make sure to make high quality posts. Ignore all these geniuses that tell you to focus on picking keywords, and making sure you post every single day, while reading a million pages on what SEO means. That’s irrelevant to your mission of simply earning a steady cash flow by writing for other people.

So many bloggers crash and burn because they start a blog to interact with others, write about something their passionate about and maybe earn a little money on the side – only to find out there is so much more to it. While some of the dudes/dudettes that own blogging empires might scoff at the idea of specializing in staff writing, I think it has a ton of advantages:

• You get to focus solely on writing – which is what most bloggers wish they could do.
• Immediate compensation – no waiting for ads, or shivering at the thought of the next Google slap.
• Flexible hours that you can work from home.
• Built in vacations whenever you want them.
• Tons of free links and networks if you change your mind about wanting to make a real go of your blog.
• No 6 month delay where you are blogging into nothing wondering if you will even make enough money to cover your small fees associated with running a blog.

Competing With Fiverr Is For Suckers

You can try and build up a following on a freelance website, but the bottom line is that there are a lot of talented writers out there that will be driving down the market through competition. Not just that, but there are literally hundreds of thousands of decent-if-not-great writers willing to write not-terrible content for almost nothing. I don’t recommend competing with them. Instead, use an easy blogging platform to become a somewhat-known and provable authority in your field. Once you snap up a couple of staff writing assignments, I suggest your pour your energy into these. If you do a great job, others will notice and you will have more offers than you know what to do with. Once you have a couple people that trust you with their blog, they will likely recommend you to others and you’re off to the races. You will have a hard time finding places to pay you $20-$30 per post on any freelance site (especially without writing hundreds of articles to build up ranking and testimonials). I have gotten close to a dozen offers like this in the past few months that I’ve had to turn down just due to time constraints. If I wasn’t concentrating on building up my own blogs, I could easily be making $500 bucks a month on the side doing staff writing gigs, and much more if I tried to make a full-time go of freelance work. Word of mouth is so much easier than trying to build a ranking on those big freelance sites. This is a tried and true method, and I guarantee that if you are talented enough you will get noticed if you do things in this manner.

Who knows, one day you might even wind up buying the site you’re staff writing for

$150, 237 (+1.02%)

Yay- reached my goal- one month ahead of time!  It feels great to reach this goal but now I want to set another goal (never satisfied, am I?).  A few factors helped in this- one is the acquisition of this website and the other is more scholarship money being granted.  However, I haven’t paid for my car insurance yet which is due next month and that’s a whopper.

The new owners of this site have graciously allowed me to keep the ING widget up until I unlock an ING bonus (there’s a little part of me that has OCD tendencies and seeks to unlock bonuses).  I think I just need two more referrals to do this.  So if you’re looking to get a new savings account- please use the orange key to your right side

The stock markets were pretty volatile it seems for the past few days.  I haven’t bought any more stocks and I don’t really intend to- I would like to focus on buying more bonds or adding more liquidity by increasing in my cash savings.

Also, just to let you know, I have divided the proceeds of the blog sale to average the amount I received when I was the owner for the next year and a half or so while I’m in school.  Sorry for the run-on sentence!  Basically, I’ll be adding X amount of dollars to my net worth updates every month to reflect the average income I received from this blog.

Okay, so here’s the breakdown for May 2012:

ASSETS:

CASH: $14, 787 (+1.16%)

• 

  Boyfriend and I have a joint account which our mortgage is deducted from, and our own personal accounts.

• I added up my chequing and savings accounts (High Interest Savings Account). I automatically deduct money from my chequing account and have it siphoned to the HISA account (paying yourself first)
• I have $3000 saved up for my goal of climbing Mt Kilimanjaro (highest peak in Africa). I’m automatically deducting $100 a month from my bank account into this travel account. I’m about halfway there. Here’s my shameless plug: If you are Canadian and want to help contribute to my hiking fantasy, feel free to sign up for an ING Account with my orange key: 33530953S1. You’ll get $25 if you start an account with $100, and I will get $25 too.
• My goal is to save $5000 in my emergency fund by the end of the year.

STOCKS: $7982 (-0.2%)

• No change this month really.
• Basically all that’s left in my non-registered account is USD stocks and the lonely stock left in my BMO investorline account
• These are stocks that capture the “moment in time”, including unrealized gains or losses in my BMO Investorline and Questrade accounts. I added up USD and CAD stocks as “Canadian” money to be simplistic

RRSP: $13050 (+1.9%)

• This includes the pre-authorized monthly contribution into my TD E-Series account, a GIC in my ING Direct Account and my new Questrade RRSP account.
• I am seriously thinking about maxing out my TFSA instead, if I am not able to max out on both (read my TFSA vs RRSP great debate over here) from now on, as I will expect to have defined benefit pension when I retire.
• I’m not including my defined benefit pension
• I owe about $16,000 to myself in my RRSP because I used the Home Buyers Plan for my down payment. I haven’t decided whether or not to pay it back this year or have the 1/15 amount included as income. Since I’m in school, my income has decreased substantially so it might be feasible to just let the minimum amount get added as tax for 2012 (remember RRSP’s are all about tax deferring!)

TFSA: $22,112 (+0.4%)

• Woot! Got my $20 gift card from KEG.UN this year again.  Seriously made my day.  A reader wondered whether buying 1 KEG.UN share at $15 would make you a shareholder and thus allow you to be eligible for receiving a $20 gift card.  That’s a good idea and a sweet deal!
• One of my to do tasks is to track my dividend payments in an excel spreadsheet.
• Watch out for TFSA over contributions, guys, the CRA will get you for every last penny.
• I signed up for a Tax Free Trading Account with Questrade in 2009 and haven’t looked back!
• I have maxed out my TFSA contributions for 2012

CAR:

• I am not counting this in my net worth, because it’s 12 years old.
• My car is still pretty clean from last month’s $20 car wash splurge

PRINCIPLE RESIDENCE: $387,500 (0.0%)

• I know this it does not make any sense to divide the principle residence and mortgage debt by 50%, but since I cannot disclose my boyfriend’s financial information, I will do it this way to simplify things. Some of you may not agree to that, and I understand.
• Vancouver is an expensive city to live in, and many people predict that there will be a housing collapse, especially in a place where their is such a disparity between income and housing price. The Vancouver market was actually quite unscathed compared to the depressed housing markets elsewhere, and many people believe it is sorely due for a correction.

LIABILITIES:

Mortgage Debt: $293, 818 (-0.43%)

• My boyfriend wished to stop out additional payments on our mortgage because he’s planning to be going back to school part-time too and wants to save up.  Depending on how my income goes when I go back to work, I might contribute extra myself later on or maybe do a lump sum.
• Our basement suite is rented out so this takes the sting out of me going to school and dropping my income

Credit Cards: $371

• I need to call AMEX this month to see if I will get charged an annual fee after my first year of their rewards card.  That’s on my to do list.
• I pay off my full amount every month (and folks, it’s VERY important you do so otherwise you’re losing out on a 19% return!) but include it in my net worth update so I have an accurate picture of my actual net worth. I sort of think “If I were to sell everything right now, what would my net worth be?” I guess I shouldn’t put it in the liabilities column since i pay it off regularly, BUT in mint.com it’s under the liability column so I’ll do the same.

Don’t you love the guys/gals that get their investment advice from the water cooler? You know the guys and gals that are constantly hopping on the bandwagon of whatever terrible investment advice that their co-workers heard on the radio on the way in this morning?

“I watched Jim Cramer last night and he said that even though last week he hated this renewable energy stock, since it has went down 7% he is now in love with it, and at it’s current prices it is the best buying opportunity for this decade”

Everyone then nods their heads and positively affirms how smart everyone else is in the group. Now I often do this simply because it gets really socially awkward when you tell someone that they should probably just light their money on fire as do what they are proposing. If you tell someone that their vaunted financial expertise is exactly the sort of thing that the financial sector preys on, they tend to want to ostracize you. However, after I am done giving my false contribution to group dynamics it would never enter my mind to act on the advice, and yet countless others do.

There are actually some fairly straightforward reasons why this style of investing is more harmful than most. By trying to jump on the latest investing fad that your buddies heard about through the most recent mainstream media, you are almost guaranteed to buy at a market top, and then if you are like most investors you will panic when the investment starts to cycle downwards and likely sell at a very bad time. In other words you will do the exact opposite of buy low, sell high. The rationale behind this claim is that by the time most people around the average office water cooler (obviously if you work on Bay Street or Wall Street your water cooler is a little different… for starters it’s probably gold plated) it has made its rounds on the various media circuits. The real investors, the hardcore traders, and hedge fund managers have already been in and made their money. By the time the media reports on an investing movement, almost always the majority of the bull run has taken place and now they are just encouraging speculation. Speculation is when people purchase an asset not because they think it has good value, but because they believe the price will continue to go up and they can sell it for a profit. That in a nutshell is how bubbles happen, and why so many people can’t figure out why their investment returns most years.

Before you take someone else’s investment advice, I advise you to take a look at how the average person does picking stocks. If you’re in a hurry, I’ll save you the trouble, the vast majority of investors, no matter the geographical location or asset class will severely underperform the overall returns of their index. In other words, if they just bought ETFs or index funds they would be far better off. As a general rule, when Glenn Beck begins to pitch your asset class (hey gold lovers out there – that’s you!) it’s time to sell and run for cover.

The really interesting thing is that the guys out there that actually do make a ton of money in the stock market and experience above average returns, do so at the expense of the water cooler/investing fad types. Warren Buffet is famous for saying, “You pay a very high price in the stock market for a cheery consensus.” His philosophy revolves around investing in companies when there is proverbial blood in the streets. When everyone else panics, he simply wades in and buys companies at depressed prices because of all the volume that is suddenly on the market. There are other lesser-known investors out there who make pretty decent returns most years by simply doing the opposite of whatever most people are doing. This is called the contrarian investing style, and it would be interesting to try (if I wasn’t an ETF convert). Maybe I’ll do a test in the future by simply turning on the investment shows at night and buying whatever is the opposite of what there are saying. I’m fairly certain that strategy would outperform the average investor.

Don’t let the fancy production levels and talking heads convince you the latest investment fad is the ticket, or that this downward cycle is different than all the others and you need to sell now. Simply have faith that capitalism and entrepreneurship will continue to drive money towards businesses that can get you a decent return on it. The world is still growing by leaps and bounds, simply investing money in the market average and leaving it alone is by far the best policy for most people. Unless you heard that tip on gold bullion last week… deal of the decade they say…

Welcome to the 32nd edition of the Carnival of Financial Camaraderie and you would think I can finally spell “camaraderie” correctly on the first try by now…

But here is the first appearance of the carnival on Young and Thrifty, next week it will be hosted by One Smart Dollar so keep on submitting!

Enjoy and have a great weekend!

Budgeting

Dr Dean presents Food Fraud: What The Heck Is That? posted at The Millionaire Nurse Blog, saying, Food accounts for 30% of most budgets. With the increasing number of imported foods that make it to the grocery shelves and our tables, food substitutions and dilutions are on the rise. Get the facts.

Nick presents How much house is too much posted at Step Away from the Mall, saying, Buying a house is never a simple process… Here’s my thinking about how to buy just enough house for my family.

Daisy presents Letting Go Of Ideals posted at Add Vodka, saying, I find that in the PF blogosphere, there is a lot of intertwining with self improvement blogs and I think that by tracking our spending, budgeting, investing, and working toward financial goals leaks into other parts of our lives as well.

Mike Collins presents Rising Gas Prices Don’t Just Hurt At The Pump posted at Wealthy Turtle, saying, Rising gas prices make us pay more at the pump, but they also affect us in ways you’ve never considered.

Business

MMD presents The Value of What You Know posted at MyMoneyDesign, saying, Is it possible that are an expert about something that may be worth something to someone else? Perhaps your hobby or knowledge could lead to something that someone else would pay big bucks for. Let’s look at a few examples.

Nick presents How much house is too much posted at Step Away from the Mall, saying, Buying a house is never a simple process… Here’s my thinking about how to buy just enough house for my family.

Career

Grand Per Month presents Make a $1000 Per Month with Your Passion posted at Grand Per Month, saying, Do you have a passion in life? What is it that you think about when you wake up in the morning? Is it running? Golf? Teaching? Whatever the case may be, I’m fairly certain that your passion and your work are nothing alike. Sometimes, it just happens that way, but what if you could make a change? What if you could start living your passion and actually earning money for it? You might not believe me, but it’s entirely possible for almost every passion.

PITR presents The Power of Re-Investing Profit posted at Passive Income To Retire.

Adam presents The Reality of Self-Employment posted at Magical Penny, saying, I didn’t intend to become an entrepreneur growing up, but here’s how I made it happen.

Robert presents My Monthly Income Stream Report – April 2012 posted at My Multiple Incomes, saying, The biggest thing I learned this month is to STOP paying attention to what Google is doing and focus on my content and what I can control.

Maria presents Money for all seasons II: income, spending and age profiles and received wisdom posted at The Money Principle, saying In brief, I see the expectations of pitfalls in different -seasons- are the following.

Steve presents Stability and Desperation posted at Brip Blap, saying, Many of the employees around me are in total terror of a single week without a paycheck. Their expenses continue without pause and their income stops at the drop of a hat. What all of these people fail to realize is that the instability they feel in uncertain times like these arises from their own lifestyle, and not from the government or the corporations or “the economy.”

Credit

Mike presents Best Cash Back Credit Cards posted at Rewards Cards Canada, saying, For people like me, collecting travel rewards is not the best value for my spending habits and lifestyle. I like to put cold-hard cash back in my wallet every month to help supplement my everyday spending. Here are the best cash back credit cards:

Glen Craig presents How Will Your Student Loans Affect Your Credit Score? posted at Free From Broke , saying, Many don’t think about the long-term affects of student debt when they go to school, especially not how it affects their credit score.

John presents Addicted to Debt posted at Married with Debt, saying, We dont really think of debt as an addiction. Its not as though you have a burning desire to get debt if you dont have it. You dont hear about the car owner who recently made their last payment and started to crave making those monthly payments again.

Mike presents Watch Out: Pitfalls of Credit Card Rewards Programs posted at Rewards Cards USA, saying, It’s important to understand that there are pitfalls associated with rewards programs. Participating in a rewards program, if you aren’t careful, can actually turn into a real problem, leaving you in debt – and without the rewards points you thought you had.

Paul Vachon presents The Effect of FICO Credit Scores on Wealth Creation posted at The Frugal Toad, saying, We all know that a good credit score can result in a better interest rate on loans but you may be surprised to learn that a bad credit score can affect you in ways you might not have thought about. In addition to paying higher interest rates, a poor credit score can result in higher insurance premiums, denial for employment, or having to pay a security deposit when leasing an apartment or opening a utility account.

Ryan presents Understand and Avoiding Student Loan Debt at Retirement Age posted at Early Retirement Investments, saying, Understand and Avoiding Student Loan Debt at Retirement Age and Why this is a great idea.

KT presents Do You Take an Honest Look at How You Spend Your Money? posted at Personal Finance Journey, saying, When you see your friends buying nice things such as a new car or a second home, do you automatically think that they have gone deep into debt for the purchase or do you secretly envy them and think they must have come into some money? Do you think, some people have all the luck

Education

Jon the Saver presents Do Your Kids a Favor and Open a 529 Plan posted at Free Money Wisdom, saying, Did you you can benefit from a 529 college savings plan if you open one? you can avoid taxes and shelter your money for future expenses!

Miss T. presents My Story on How to Successfully Take Courses While Still Working Full-Time posted at Prairie Eco Thrifter, I want to show that it is possible to go to school while working full time and that by implementing a few tips I have learned, you too can make school and work an option in your life.

Corey presents Why Cars are Destroying Our Society posted at 20s Finances, saying, What kind of car do you drive? Are one of those people that worries about breaking down on the side of the road because your car is older than most high schoolers? Or are you someone who loves the smell of a new car. We all know that smell – it’s not just a sign of its recent production date, but is also about comfort, security, and assurances aka warranties.

Philip presents Cheap Mother’s Day Gifts and Activities posted at PT Money Personal Finance, saying, 10 ideas to help you save money but still show Mom how much you care.

W presents The College Formula posted at Off-Road Finance, saying, A look at how much you should be willing to pay for college.

Financial Advice

Beating Broke presents Money Rules by Jean Chatzky posted at Beating Broke, saying, Chatzky is a pretty big name in the realm of personal finance media, so when I was asked if I wanted to review her latest book, I jumped at the chance. In Money Rules, Chatzky aims to break down personal finance into it’s most simple denominators and give it out in a set of rules.

Mr. Money presents ING Direct Remote Deposits Now Available: Does Your Bank Offer a Remote Deposit App? posted at Smart on Money, saying, Today I thought I’d do a quick look at the ING Direct App and it’s functionality, and then take a look at what other major banks currently offer some sort of remote deposits.

J.P. presents Savings And Debt Debate: Where Should The Money Go? posted at Novel Investor, saying, The savings and debt debate has been ongoing since the first loan was created. With only so much income to spread around, a big decision must be made. Do you use any extra money to pay off debt or add it to savings?

Everything Finance presents So, You Want to Marry Rich posted at Everything Finance, saying, When choosing a partner for the rest of your life, doesn’t money ever come into play? While your partner’s salary or earning potential may not be the only factor in determining your decision to say “I do,” can we at least admit that it is a factor?

Lance presents Five Money Milestones by Age 30 (More Like Your First Real Job) posted at Money Life and More, saying, While browsing the web I came across this video the other day “Five Money Milestones by Age 30?. They suggest the five following milestones:

Build an Emergency Fund (Six Months of Expenses)
Start Planning for Retirement
Manage Your Debt Load
Set a Monthly Budget and Stick to It
Set Yourself Up for Your Future – Start Saving Now!

Echo presents Our Fast Track To Financial Freedom posted at Boomer & Echo, saying, After all our bills are paid, we have an extra $2,000 per month to work with. So we came up with a fast track to financial freedom. Here’s our 40/40/10/10 savings solution:

Frugality

Little House presents Bialetti Espresso Maker Saves Money posted at Little House in the Valley, saying, Over the past 5-years, I’ve been able to bring my every day drink down to the lowest cost possible including using a Starbucks Gold Card to earn free drinks and free additions, like syrup or soy milk. Yet, I hadn’t figured out a way to make my drink at home without spending a fortune on an espresso machine.
That was, until now….

Sean presents Rent, Don’t Buy posted at One Smart Dollar, saying, Do you have a home project that needs to get done, but a $500 tool is standing in your way? Save your money and don’t buy it, just rent.

Liana presents Is the LivingSocial Credit Card Worth Getting? posted at Card Hub, saying, Discounts for already discounted goods and services? That’s what the new Living Social Credit Card is offering. But, is this really a deal for the consumer? Let’s take a look…

Kevin presents How to Save Money on Vacation posted at Thousandaire, saying, Use frequent flyer miles, buy your hotel from groupon, and eat cheap foods if you want to save money on your vacation.

Steven Zussino presents How To Save On Pet Supplies posted at Grocery Alerts Canada, saying, We aregoing to share some shopping tips to help you save on pet supplies. Our main focus would be on supplies for dogs and cats, with food costs being the particular expense that we are trying to reduce.

John presents Students with Summer Jobs Shouldn’t Forget the Tax Man posted at Wallet Blog, saying, Students – Looking forward to that summer job? Avoid a nasty surprise in the spring. Don’t forget to take taxes into consideration.

Earth and Money presents Planning a Green Frugal Wedding – Venue posted at Earth and Money, saying, When it comes to the venue, you can be both green and frugal without seriously defying standard wedding traditions.

Investing

Investor Junkie presents What Is Technical Analysis? posted at Investor Junkie, saying, Technical analysis is used with many different investments, but we often hear about it most in stocks and in currencies. Technical analysis is especially popular with day traders who look to find the ideal times to enter and exit positions in a way that allows them to earn profits.

Jason presents How to Retire Comfortably: Start With the End in Mind posted at Work Save Live, saying, I hope you enjoy the 4th post of my Understanding Retirement Planning & Investing series! If youve missed the first three posts be sure to check them out! Everything You Need to Know About a Roth IRA & Why to Start One.

Mike Piper presents SIPC: What it Covers and Coverage Limits posted at Oblivious Investor, saying, Despite the important role it plays, many investors know little about the SIPC and the protection it provides.

PK presents What Kind of Investor Are You? posted at Don’t Quit Your Day Job…, saying, Before digging into Google for a one-size-fits-all approach to saving, you should probably familiarize yourself with your own person skill (and emotion!) level when it comes to investing. Because, guess what – we’re all unique!

Squeezer presents Why investing in dividend paying stocks is a smart move. posted at Personal Finance Success, saying, there are several different ways you can grow your passive income. One method includes investing in dividend paying stocks. Dividends are when a company shares its profit with the shareholders.

TRL presents Real Estate Investing Has Risks posted at The Retired Landlord, saying, Investing in real estate has its risks and expenses. Find out what you can do to prevent a negative cash flow.

Hank presents Which Is First: Paying Off Your Debt Or Investing For Retirement? posted at Money Q&A, saying, Should you pay off debt, or should they start a retirement account first? This is a question that has plagued experts forever.

Other

A Blinkin presents It’s The Economy, Stupid! posted at Funancials, saying, With the Presidential election in the U.S. beginning to heat up, it is natural to forget about elections elsewhere in the world. But before our elections start to cause volatility in the Fall, a round of elections in Europe in May could have a very meaningful impact on the marketplace.

MR presents Learning Versus Watching TV As Entertainment posted at Money Reasons, saying, Learning instead of Watching TV can be very rewarding! Why not try to learn something simple and quick and see if you find it rewarding or not?

Suba presents How Playing Monopoly Can Improve Your Financial Knowledge posted at Broke Professionals, saying, How Playing Monopoly Can Improve Your Financial Knowledge is a post from: Broke Professionals if you enjoy it, please visit us and subscribe to the Feed. If you haven’t played Monopoly before, you should download it to your phone or buy the board game. Don’t worry, there’s not much difference.

Eddie presents I Filed My Taxes, I’m Owing and I’m OK With That! posted at Finance Fox, saying, This weekend I got around to completing my taxes, and without much surprise I’m owning the government $1,800 in taxes.

Jeremy Waller presents How to Wreck Your Car, Buy a New Car, Refinance Your Mortgage and Pay off A Credit Card at The Same Time posted at Personal Finance Whiz, saying, What a crazy month it has been. I feel like Ive gone through a financial blender. As I mentioned a few weeks ago, my beloved Jeep was totaled. I was rear-ended by someone going 60 mph. My car didnt stand a chance. State Farm estimated it would cost $10,132.95 to repair. But, the Jeep was This post was originally posted to Personal Finance Whiz.

Wayne presents Buying the Best Car for Your Money posted at Young Family Finance, saying, Buying the best car for your money involves considering quality in addition to the sticker price. Find out if you are getting the best car.

YFS presents Top 11 Reasons You Should Use Yodlee MoneyCenter posted at Your Finances Simplified, saying, You should keep track of your finances. It is as easy as that. Whether you decide to use a pen and paper, a spreadsheet, or an online account aggregator, you should have an idea of how much you are spending and on what.

SFB presents Are Mortgage Points Worth It? posted at Simple Finance Blog, saying, Breaking down the numbers to see if mortgage points to secure a lower interest rate on your home loan is really worth it.

Jeffrey presents Hitting a Financial Knowledge Peak and What Really Matters posted at Money Spruce, saying, Ive spent the past 2 years absorbing all the personal finance knowledge that I possibly can. Books, blogs, webinars, conferences, and more Ive read a ton on a wide range of topics. I dont know everything, but I still feel like Ive hit a knowledge peak.

Sustainable PF presents Recession Gardening to Save Money posted at Sustainable Personal Finance, saying, I recently discovered a practice that I’d never heard of before – recession gardening.

Steve presents 5 Smart Things to do With Your Money posted at Money Infant, saying, The following was written as a guest post for MI: Learning to make your money work for you is a good idea for anyone who has suffered from the economy in

krantcents presents The 3 N’s of Success posted at KrantCents, saying, The 3 N’s of Success is the fourteenth in a series of articles to help you reach your goal.

Jen presents I Hate Housecleaning…But I Love Earning Opportunities posted at Master the Art of Saving, saying, Im not one of those people who enjoy cleaning; I absolutely hate housecleaning. No way that sticking to my routine was worth passing up an earning opportunity.

Kyle presents How to Make $24/Hour Teaching English Classes Online posted at The Penny Hoarder, saying, If you know how to speak a language, you qualify for this freelance job. There’s a world full of people that are trying to learn how to speak English.

Aloysa presents Curb Your Spending with Pinterest posted at My Broken Coin, saying, Yes, you’ve read it right and no, I have not lost my mind. I believe that you can curb your spending with Pinterest. If you’ve been reading this blog for some time now, you know then that I am a shopper and a spender.

Amanda L Grossman presents Sifting Through Energy Company Offers in a World of Deregulation: Part 1 posted at Frugal Confessions, saying, Two weeks ago while shopping for electricity I gave up. By giving up, I mean that after finding out I would be charged a $9.9

PPlan presents Seven Deadly Sins and how they lead to Financial Disaster posted at Provident Plan, saying, Learn how the seven deadly sins offer financial guidance.

Don presents Is Tipping Out of Control? posted at MoneySmartGuides, saying, Growing up, I would see my parents tip the waiter or waitress at the restaurant where we ate. I would see my Dad tip the barber for cutting our hair. Other than that, there wasnt much tipping done.

SB presents Saving Money or Earning Money Where to Put your Priority? posted at One Cent at a Time, saying, The problem comes when you are choosing one over the other or, giving priority to one over the other, due to limited time and resources. A guide to help you make informed decision.

Daniel presents Things I’d Buy If I Were Rich posted at Sweating the Big Stuff, saying, It’s fun to daydream about what we’d do with more money than we could ever need. Here’s my list of items I’d like to have if I were in that situation.

Ben Feldman presents Know Your Options: The 5 Different Ways to Get Out of Debt posted at ReadyForZero Blog, saying, We want to help you understand the five major ways that Americans get out of debt. There are many unreliable and even predatory companies out there that will take advantage of you if you’re not careful, so you must do your research and understand how these options work and decide which get-out-of-debt method is right for you.

Nick presents Did You Forget About Paying Off Your Debt During Tax Season? posted at My Dollar Plan, saying, So, it’s finally over. You’ve completed your 1040 (or tax software or an account has, at least!), paid your tax, or requested your refund. Now what? Well, I don’t know about you, but I for one have neglected a few things while I was working on my taxes. Those daily tasks that help keep me working on lowering my debt is one of them.

Savings

Ray @ Financial Highway presents Mother’s Day Gift Ideas posted at Financial Highway, saying, Mother’s day is around the corner and I hope you are not leaving the gift shopping for the last minute. If you find yourself in the same last minute situation you were last year on mother’s day, these gift ideas may just save mother’s day for you.

Raj presents The Basics of Money Management – Save, Invest and Repeat posted at eMoneyLog, saying, The article covers the basics of money management – saving, investing and repeating the process. The emphasis is on repeating as many people save and invest initially but do not repeat and do not accumulate wealth.

When we told select family and friends that we were going to purchase this website, we got some stunned looks and some other words of support. The interesting part about that varied reaction is the fact that we intentionally haven’t told many people. For example, we agreed to tell our parents about the business venture after we had earned enough from our web properties and freelance work to pay the loan back in full. The reason for this is that we have grown accustomed to having our eardrums intact and would rather not have them burst by hearing, “Are you insane” shouted at glass-shattering decibels. You see, many people (including banks) just don’t understand the idea of buying a blog. The business model is not well-known, and there is only very tentative precedent currently available. Seeing as how a web property is something you can’t touch, it makes it very difficult to quantify to most people, and even harder to support taking out a loan in order to buy such an entity. Interestingly enough, I am almost certain that if either my partner or I had took out a fairly large loan to buy a new vehicle that was above what we needed, we might have gotten a slight smirk at our perceived slight overspending, but overall the reaction would have been to enjoy yourself and your new toy (we probably “earned it” according to every advertiser out there).

You’re Buying A What?!

Why is this? It is socially acceptable to purchase luxury goods and enter into contracts paying relatively high interest rates for them, but yet buying an income-producing asset is met with such disbelief? If we had purchased a rental property, there would have been some words of caution no doubt, but probably far less of a reaction than purchasing a website. Again, this is interesting to me. From what I can tell, the average perception of risk is quite different than the one I have. So either I am completely wrong and will end up biting off way more than I can chew or, many of us are little mixed up in regards to how money and risk are used.

I Deserve It, Just Ask Visa

Purchasing luxury goods is not an intelligent risk, yet is generally accepted in society. Going into debt to pay for these luxury goods is also fairly common. For transactions that appear to be straight capital-for-pleasure trades, the marketing industry appears to have convinced us that we can never have too much, and that we deserve everything we can get our hands on. This of course leads to that weird lifestyle inflation phenomenon we all know and love. I must be wired differently, because I get way more of a jolt out of buying an asset than I do from buying something to wear, or drive, etc. This is not to say I’m overly cheap (although I may be). I like to pay for experiences, trips, going out with friends etc., but going into debt for luxury goods is not my thing.

My Best Investment Is My Home *gulp*

Many people who believe they know their way through day-to-day personal finance would strongly agree that going into large amounts of debt for a home mortgage (500% leverage anyone?) or for a rental property is a good investment. You can touch a home, feel a home, and the business model is very common. This is obviously intelligent risk right? I mean home rates always go up, renting property is totally passive since home maintenance is almost non-existent, what could go wrong? Paying the carrying costs on mortgages is an intelligent risk, while the carrying costs on a relatively small investment loan is insane if it’s used to buy a blog right? See where I am going here?

The Difference Between Good Risk and Bad Risk

Many of the things we believe are good risks such buying a “luxury toy” like a boat, or a new vehicle aren’t risks at all, they are merely buying something that has no way to generate cash (and will just leak value forever). Other things we believe that are considered intelligent risks include certain types of investment loans to buy real estate, or to purchase a piece of equipment for your business to make use of. To me, the bottom line on intelligent vs non-intelligent risk of your money/capital is: do you understand how your risk will pay off and do you understand the size of your risk?

If you understand the industry, you have a solid grasp on how profits are made and what “best practice” is within the field, then you can be confident that you continue to operate the asset your buying in an efficient fashion. If you believe that your risk-reward ratio carries a return on investment that is greater than 15%, then you are also in good company (the stock market by comparison has historically returned around 10%, and lately, much less than that). Finally, if you understand just how much money you are borrowing, relative to the expected income of your purchase, then you are well on your way to determining the difference between intelligent and non-intelligent risk in my opinion. If we step back a look objectively at mortgages, they are often just a socially acceptable way of leveraging your money in a massive way. There are plenty of lenders out there willing to hand out mortgages with 5% down if you have a decent credit history. That is 20-1 leverage, or 2000%!! If the housing market dips at all, you can lose massive amounts of net worth in a very short time. Yet five years ago a mortgage would have been considered a very smart risk if any risk at all.

Common Sense Makes You Average By Definition

Try not to let “common sense” money practices cloud your impression of what good and bad risk is. I find common sense a great guide in most aspects of life, but in terms of money and capital management, it has led many astray. People rarely go wrong investing in things that produce income, and are also assets that they understand. On the other hand, plenty of people go wrong when debt is used to fund luxurious tastes and overextending ourselves through social acceptable means.

Hello loyal readers of the incomparable Young and Thrifty blog. I know some of you are already deleting this site off of your “favourites” list and tsk tsking at the thought that you won’t get to see as much of one of your favourite personal finance bloggers going forward. To be honest, I wouldn’t blame you. I’ve watched a ton of bloggers decide that the demanding schedule that blogging can take up is just too much for them at a certain point in their life, and decided to let their blogs go for one reason or another. Few blogs are ever the same after the initial author leaves, and I won’t guarantee that this one will be exactly as you remember it. For this I am sorry, yet upfront and honest.

WAIT, Come Back!

All of that being said, it’s not like I’m some stranger guys/gals! You’ve seen me around here for almost a year now as a staff writer and serial commenter, so I think I have somewhat of a grasp for what you peeps want to see written about. I’ve also read enough of the original Y&T’s work that I am familiar with it, and I hope to try and deliver the same high-quality content that we all know and are accustomed to. I’m not exactly new to this whole personal finance thing. I have written over 200 articles over at My University Money, and am a consistent staff writer at Canadian Personal Finance Blog, Sustainable Personal Finance, and Invest It Wisely. I promise that I will put my fill effort into making sure that Y&T continues to give readers great value every time they stop by, even if you do notice subtle changes.

Who We Are

“So who is this guy?” you might be wondering. Well it’s actually guy(s) – plural. My mother always said that it takes at least two capable gentlemen to do what a woman does, and in this case she is proven right! My pen name is Teacher Man (TM) and my co-pilot is JB. You can learn a little more about us here. The current plan is for JB to keep his role as the mastermind behind the scenes, and for yours truly to do the bulk of the writing here at Young and Thrifty. I’ve enjoyed interacting with everyone on this site as a staff writer over the last year and I’m looking forward to doing this on a permanent basis. I don’t know how Y&T did everything here on her own, and I know that I definitely enjoy the tag team approach that JB and I bring to the table.

Don’t Call It A Comeback – ‘Cuz She Never Left!

The best part of this whole transition thing for you guys and gals is that the incomparable original author you’ve grown used to reading is sticking around! As you can read about in her “stepping back” post, she will still be a steady voice on the site for the foreseeable future, and I’m very grateful that she is sticking around since I’m a fan as well as an associate!

A Perfect Fit

Some other questions many of you might have are why us? Why do we want this blog, and how did this all happen? Well… it’s kind of a unique story. JB and I weren’t really in the market to be buying a blog. We’re not big businessman and we had never bought a blog before; however, when Y&T came to us saying she was looking to sell, it just made sense on so many levels. I like writing about personal finance topics for a broad demographic, and some of my preferred topics weren’t fitting in perfectly with our original site that was built primarily to help students. While the student population is a broad spectrum, this blog represents a great opportunity to explore personal finance for young adults, in a broader, more general sense, and I am extremely happy for the opportunity to do that. There was a neat sort of poetic symmetry to the idea we proposed as well. The original Y&T and I would essentially switch writing roles, and this site makes a perfect companion to a site that gives out tips primarily aimed at young students. Basically, we can now help you out as you prepare for post-secondary education or the workforce, then help you when you begin that journey, and finally, Young and Thrifty covers topics all through adulthood!

JB and myself are really excited to take on a major challenge in keeping up such a high class blog, we hope you’ll give us a shot before changing channels. We think we’re pretty young, and pretty thrifty, and with the original Y&T around to keep us in line I really like our chances going forward. I love hearing what an audience wants to read so please don’t be shy in emailing or commenting and letting us know what’s up. As a little celebration and a way to make a good first impression, we figured it never hurts to give away free swag, so please stay tuned for a fairly epic (by personal finance standards anyway), giveaway in the next couple weeks.

About three years ago, I had a dream of starting a personal finance blog. My family and my boyfriend laughed at my lofty idea. I thought- I’ll show them! I can be successful if I work hard at it. It was my dream to make it successful and show the world that a female voice could swing with the big boys in the personal finance blog realm (woot!).

After two and a half years, I think I have achieved this goal. Never in a million years did I think that my blogging idol, Million Dollar Journey would link to me in his blog round up. Never did I think my name would be mentioned inGlow Magazine. Never did I think my blog would be mentioned in the Globe and Mail. David Chilton from The Wealthy Barber even had email contact with me! I have enjoyed every single minute of it and most of all, I have enjoyed making friends around the world and across Canada through people connecting with me through this blog. I am deeply grateful for the opportunity that the Yakezie has given me- I remember thinking “yeah! I’ll join this! This might be my big break to actually have people notice me!” Since then, it has been an absolutely amazing ride.

image credit: http://www.barewalls.com

I clearly remember when I started that I thought the only person reading my blog was myself (which is 100% true). I was so excited when I got one comment. I was so excited when I got my first $100 cheque from Google. I was so excited when people actually realized my blog existed in this vast internet cyberspace. I can remember each “milestone” and these precious memories will never escape me. I’ve learned so much more than I could even imagine about investing, about personal finance, and life balance and I have you to all thank.

Despite the amazing growth of youngandthrifty.ca, this blog has grown into something so much bigger than I could handle with my current life of school, work etc. The marketing, coding, html stuff, and advertising made me feel like I was in over my head. With school, work, and relationship obligations, I wasn’t able to put in the amount of time and energy that I thought you readers deserved. Every day I spent hours working on my blog and putting the blog’s priority over my relationship and it really pained me to not have time in the day to go on my blog on a daily basis because of school.  I wonder if this is the answer to why there aren’t that many female personal finance bloggers going at it on a full-time basis. I had so many blog post ideas, but was so busy that I didn’t have time to write them. I was busy answering emails and busy trying to drive more traffic.

However, at the same time, I felt like I was being squished with my school and relationship obligations. I wanted to study more, learn more but had to commit to my blog. I felt pulled in all directions. I thought I could handle it but to be honest, it was difficult balancing everything without feeling like I was spreading too thin. I’m sure you’ve all read my constant “weekend ramblings” whining updates on how stressed I was feeling

This blog is my baby and I don’t know how many hours I’ve poured into this blog. Probably thousands and thousands of hours…It was a seriously difficult decision to make and I wanted to make sure that the new owners would take care of this blog like it was their own. I wanted to make sure the new owners would keep my voice present in the blog (basically allow me to continue to write on here).

Never did I think that my own staff writer, Teacher Man, would be interested in taking care of my blog! When I saw My University Money appear on the personal finance blogosphere, I knew they were supremely talented. So now the tables have turned and I’m the new staff writer lol. As Alanis Morisette said (by the way random fact about me: I used to be a huge Alanis fan when I was 12) “Isn’t it ironic?”

I can’t think of a better transition to this story. I am so lucky to be able to hand over my blog to a group of talented guys that I trust and I’m so lucky to be able to continue writing on here and concentrate on my true passion!

So don’t worry my friends- I’m still here. Youngandthrifty.ca will be better than ever! You’ll see me post twice a month and share my weekend ramblings twice a month (because I know some of you like my weekend ramblings- I like them too since I get all philosophical on life and I know you like that lol). I think I’ll still continue my net worth updates since I like to keep accountable with my finances and y’all help me so much in that respect (unless you don’t want me to). I know how fun it is to look at net worth updates too. I’m also still on twitter. You’ll probably not even notice that I’m not around as much. I’m excited to work with the dynamic duo at My University Money and I know that they will take this blog to greater heights. This beautiful new beginning starts tomorrow!  I’m excited to see what’s in store for youngandthrifty.ca.

Stay frugal my friends- with much much love, Y&T.