May 30, 2009, 9:10 am

Financial Ramblings: I’m back!

by: The Financial Blogger    Category: Career,Financial Rambling

i-am-backYeah, I know, I have been quite a lazy blogger for the past month. However, this wasn’t really related to my blog or the fact that I was becoming lazy. Let just say that life sometimes really sucks and I had to deal with other stuff for a while. The good news is that the blog survived its first “blogger crisis” without much impact (besides the fact that I was not doing link love 😉 ).

It has been a while since my last weight update. I actually kept working up everyday and I changed my training program last week. They recommended me to change every 2 months in order to make my muscles work harder. I must admit that it works perfectly as

#1 I feel soared!

#2 I am now down to 189 lbs!!!!

I actually reached a peak of 210 lbs while not doing my updates and then, I started melting… Now that I can see that it is feasible, I am looking forward to weight between 175lbs to 180lbs by the end of the summer. Since I’m 5’10’’, this should be giving me a great shape :-D.

So, here’s some link love:

Intelligent Speculator wonders if we will have any magazine to read in 10 years

The Simple Dollar makes an interesting paradox: is saving money bad for the economy?

The Credit Toolbox explains what happen to your spouse when you go bankrupt.

Four Pillars tells us how to make crazy investment returns. On top of that, the blog just hit its 2nd birthday, congrats!

ABC’s of investing describes the time horizon for retirees (it better be long ;-)).

The Digerati Life discusses some Jim Cramer stock picks.

Money Ning tells us to not be a loser and wait too long.

Where Does All My Money Go talks about short selling.

Million Dollar Journey published a great post about finding your passion.

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May 29, 2009, 5:30 am

Survival Guide to a MBA Part1: Surviving the program

by: The Financial Blogger    Category: MBA

I’m now down to my final class of my MBA program. After June, I won’t have classes anymore, just a filthy 100 pages to write with my colleagues for our final project ;-). This series is for those of you thinking about doing the same crazy project as I did 😉 I decided to write a survival guide to a MBA in 3 parts: Surviving the MBA itself, Surviving your Job and finally (the most important part), surviving with your family. A keller graduate school MBA program or any MBA program is worth the survival it takes to complete it.

Surviving your MBA

The very first thing to remember while doing your MBA is that 20% of your work will give you 80% of your mark. Whatever you do, make sure that you are being effective while doing it. If you want to read everything, get further information, work extra hours over night; you will probably learn more than me, but you will probably lose yourself along the way as well. A MBA could be fun but it could also become the only thing you do for 2 years. Make sure you don’t fall in the second category 😉


 

Choose your colleague and don’t hesitate to change

During our first session, we made everything clear among our team. Everybody expressed their feeling about the MBA and how they intend to go through it. This obviously didn’t solve all our problems but you can detect BS quite easily when you get to the end of the session. As a team, we knew what we wanted to accomplish and we told some people in our team that we would not continue to work this way. They would not be happy with us and we would not be happy with them. It’s not a matter of being mean or kicking people out. In the end, everybody finds its best interest.

There is no point of carrying people on your back in the hope of seeing them change their implication. People don’t change. So you might want to change them for other persons ;-). Carrying people will burn a lot of your time and energy and, most importantly, will feed frustration all along your MBA. Why would you become frustrated for 2 years of your life? Life is too short to be this way 😉

Identify what the teacher is looking for

The quality of your work is a perception of others. Most importantly, it is the teacher’s perception. Make sure you validate with him about what he expects and what he wants to read. I remember having a teacher requesting a “2 pages per topic” paper and when he received our work, he said he was expecting at the very least 10 pages (there were 2 topics in the paper we wrote). The problem with teachers is that it doesn’t matter if they are right or wrong, they are the teacher and they have “absolute power” in their class. Instead of fighting with them, find out what they want and it will be much easier this way.

Choose your battle

As I said with teachers, instead of fighting, go around it ;-). This is valid with your MBA colleagues too. I have a tendency of fighting at any occasion. I can now say that I have burnt a lot of my resources trying to win stupid battles. Sometimes when you win, you are the biggest looser!

Next week, I’ll keep writing about how to survive your job and with your family while doing the MBA. I’ll be back with financial ramblings tomorrow morning, I promise ;-D

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May 28, 2009, 5:22 am

Is US Government to Lose its AAA Credit Rating?

by: The Financial Blogger    Category: Investment, Market and Risk

I don’t know if you have noticed (if you are Canadian you probably did!) but the US dollar is loosing weight for the past few weeks. About a month ago, the Canadian dollar was worth $0.80 USD and now, we are getting closer and closer to $0.90 USD. We actually see similar effect on the Euro who gained 4% on the US dollar last week. So what is going on with the US dollar?

US Government and UK Government may lose their AAA credit rating

As both countries contracted humongous amount of debt during the pas 12 months in order to “stimulate” the economy (Damn you Keynes, you still make our politicians to fool around!), their debt level has increased significantly. While it wasn’t a problem for the US government to raise fund so far, some countries start to doubt about the US government AAA credit rating. We hear behind the walls that both US and UK government may lose their perfect credit rating to be downgraded.

I actually think that the UK government will lose its AAA before the US government does. We even heard rumours about UK going bankrupt. While I still think that this even will never happen, I would not be surprised to see the UK credit rating downgraded in the upcoming months.


If the US Government lose its AAA credit rating, what will happen?

First, the credit rating of any country (or company) grants it the power of raising fund faster and cheaper. The stronger your credit rating is, the cheaper you pay in interest fees. It will also be much easier to get money from others. In fact, it is exactly the same thing as an individual’s beacon score.

If the US government loses its AAA credit rating, they will have to pay a premium for the risk it shows. Therefore, it will become more expensive for the US citizen to finance stimulus checks, bailouts and massive structural investments.

Other countries (mostly Asians) are slowly selling US dollars to buy other currency. This obviously pushes the US dollar down compared to other currency such as the Euro or the Canadian Dollar. But they are not only buying other currencies. Other countries and investors historically leave the US dollar for gold which is the ultimate secured value. This is why we are looking at a soaring gold price. I would not be surprise to see gold hitting $1,000 / once during summer time.

What will happen to Canada if US Government loses its AAA credit rating?

For some strange reason, our economy seems to resist the impact of an important recession in the US. We are not running full speed, but we are not slowing down that much. The fact that the US dollar is losing value and that the oil barrel is jumping back up (from $35 last fall to $61 last Monday!) make that our Canadian dollar should keep rising until parity during summer time. I know that there is a lot of speculation on Oil right as investors are hoping for a real bullish market, but it still helps the Canadian dollar going up for now.

So if you plan on going down south for your summer vacation, don’t be in a hurry to buy US dollars! They may become cheaper 😉

EDIT: Moody’s and Standard & Poor’s both said that the US government would keep its AAA credit rating yesterday. Nonetheless, I think that just the fact of thinking about it may keep pushing the US dollar down during summer time.

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May 27, 2009, 5:30 am

What I Have Learned From My MBA Colleagues Part 4

by: The Financial Blogger    Category: MBA

Since there are 35 people in my class, I will obviously not talk about everyone (on the other side, this would give me a hell of a series to write!). So today will be my final post about my MBA Colleagues along with a few “famous quotes”.

Mommy

Mommy is actually the incarnation of nice. She is always thinking about the others, having great comments for everybody, she is Misses kindness. I have learned from her that being nice with people and really care about them requires a lot of time and effort but comes with great rewards as well. You easily gain the respect from others and they are also willing to help at any time. She is a wonderful person and I wish she will gain more confident through her MBA as she tends to underestimate herself. I guess this is typical from humble person… Maybe one day I will learn to be humble 😉 LOL!


I’m more important than you

When you get a bunch of managers and professionals together, you can be assured of one thing: there are a few pains that will come in the group. I have met a few people who think that their schedule is impossible, who think that they have so much to do that they arrange the schedule of everybody. They always have a good reason for being late, for giving work last minute or for forgetting their appointment. It is up to the others to readjust as they really can’t help it as “it’s not their fault”. In fact, it never is ;-). These people usually come as strong character and will try to establish their credibility through power and affirmation. In general… they don’t last long around me ;-). More seriously, these people will go through a lot of stuff but most people won’t really like them. So to all the “I’m more important than you”, I suggest you go back read about Mommy and try to act like her ;-).

No Worries

I guess this is the kind of people that piss me off the most: they don’t know what their doing, they don’t know what they are talking about, but they do it with such confidence and BS and they have the guts to tell you “don’t worry, I’m on it”. When you don’t know what you are talking about, please don’t pretend that you know! Once, we were at 24 hours to give our final paper that worth 50% of our marks. The girl sends the “final version” by email (in the middle of the afternoon) with the following comment: “here’s the final version, I’m going to print it in 30 minutes”. I was the only one who took a week of vacation before the exams so I was the first one to open the file. The girl copied twice my part inside the paper and accidentally erased 10 pages of the document (10 pages who were actually crucial to our paper). That was her meaning of a “final version”. When I emailed her back in a great hurry (remember, she was going to print everything within 30 minutes) telling her about her mistakes, she replied:

“Relax Mike, there are no worries”.

As we didn’t want any worries, we kicked her out after this “incident”. What I really hate about those people is that they always have something to say. There are always right, even when they are deadly wrong.

So to end this series, here are some famous quotes from our MBA:

– The good is the enemy of improvement.

– I’m on it – no worries (yeah, right! Now I start to worry!).

I couldn’t make it to the class this Sunday morning because of the snowstorm. I was stuck at my vacation property down the snow hill (this was from a teacher that couldn’t make it back to Montreal because she went skiing all day and didn’t feel like coming back to the city during the evening even though the snowstorm alert forecast was on for a few days already).

– The quintescence of the patente (this is not French, nor English, this is Frenglish!).

– You know what impresses me? A dog that can li… himself! (that is coming from Conspiracy Theory man).

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May 26, 2009, 5:00 am

Taking a Life Insurance on Your Mortgage or a Term Life Insurance? Part 2

by: The Financial Blogger    Category: Insurance

Last Friday, I explained how the life insurance on a mortgage works. However, if you do not combine the life insurance with another type of creditor insurance (such as disability insurance or critical illness insurance), chances are that your life insurance will become quite expensive.

If you shop around and look for other option, you will soon come to see an insurance broker/agent that will look at your overall insurance needs. There will obviously have an amount to be covered that comes from your recent mortgage. Here’s a way to cover your mortgage with a term life insurance:

#2 Term life insurance from a broker

Term life insurances are pretty easy to understand. You pay during a specific period of time (usually 10 years or 20 years). The insurance coverage last the very same time. Therefore, you benefit from a temporary insurance coverage that will eventually expire.

This is actually a good thing as your mortgage won’t be eternal as well. Many term life insurance offer conversion option into a longer term or a whole life / universal life insurance policy. In a case of a mortgage, this could be useful if you plan to sell your house and buy a bigger one with a similar mortgage in the future.

While the T10 and the T20 are the most common type of term life insurance, I know that there are other terms that could fit best your insurance needs. You can also use a combination.

IF you have a 300K mortgage over 30 years. You would take a 100K T10, 100K T20 and a 100K T30 (if it exists). Therefore, your insurance coverage will drop every 10 years as your mortgage balance does over time. You will be “fully covered” during your 30 years but you won’t have to pay for a full 300K T30 either.

The price for a term life insurance is usually much lower than the regular creditor insurance. Even though it is the same price, remember that the full amount of coverage is payable upon death during the time of the contract. If you pass away after 19 years of paying down your mortgage, the lump sum payment from the bank will be pretty far away from the original mortgage amount! We never look for insurance in order to “make gift” but getting extra money when you lose someone you love could never hurt!

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