January 31, 2010, 1:03 pm

Financial Ramblings

by: The Financial Blogger    Category: Financial Rambling

I’ve been quit busy these days and I didn’t have time to much financial ramblings since the beginning of January.

We have been working very hard on our online company and I still go to the gym. While I have seen a major progression in our online income, I can’t say the same thing about my weight loss crusade;-). I’ve stick to 182 lbs for the past 2 months… just getting in better shape since I am lifting heavier weights 😉

Here are some great read for this (cold-in-Montreal) Sunday!

Four Pillars is highlighting personal finance issues at Ridgemont High.

Canadian Capitalist is listing new ETF’s from Ishares.

Severing the link between price and weight at Where Does All My Money Go.

Control your spending with a budget at Canadian Finance Blog.

Common myths about stock market risks at Million Dollar Journey.

Home Renovation Tax Credit explained at Canadian Tax Resource Blog.

2010 Best Oil ETF’s stock picks by Intelligent Speculator.

Teaching your kids about money by Gather Little By Little.

Best performing stocks in 2010 from the S&P 500 at Buy my Stock Picks.

Dividend Capturing by The Dividend Guy.

Why 20 somethings hate personal finance by Studenomics.

Too much credit by Man vs Debt.

Someone always fart in a crowd (so true!) by Financial Samurai.

image source: dieseldemon

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January 29, 2010, 5:34 am

Preparing Your House For a Better Sale

by: The Financial Blogger    Category: Properties

The other day, I was talking about how I picture my perfect house and what I would like to see in it. While I am definitely not convinced we will pursue the cause and purchase a new home in the next year, I thought I would upgrade a few details in our current home to improve it.  In this way, we will be able to sell it quickly and for a higher price if I ever need to.

We spend a lot of time in our house yet we are often ‘too busy’ to make changes; to paint or to keep it fresh and up to date.  We have been living in the same house for 3 and a half years and the rooms were last painted 8 years ago. While the choice of colors was great, it starts to lose its depth and freshness after so many years. Some rooms definitely need some improvements ;-). So before we sell our house, there are a few things to look at.

As is the case for most projects, I thought of sharing the changes we have in mind. The best aspect of all is that most of them don’t cost much to do and add a lot to the look of the property. Since most people buy because they fell in love with the house, you are best served making those small improvements so you can sell faster and make more money 😉


While fresh paint is often quite obvious, it is often ignored or abused. If you are thinking about selling, you want your house to look impeccable. Fresh paint gives this feeling of “new”. Instead of going with colors demonstrate your individualis, go with neutral tints that match the look of your house (classic, modern, etc.). A new look on the first floor should be your priority. Those are the first rooms your potential buyers will walk into. You want to create a good impression ;-).


Luminosity equals a feeling of space when you walk into a house. This is why you should select light colors on your walls and avoid heavy and dark curtains. You want to give the impression that there is plenty of light, and therefore space in each room. Don’t hesitate to add lighting if you don’t have many windows.


I’ll probably sell my old sofas and my dining room set and buy new ones before I move to my next house. While I take the risk they won’t fit into my new home, they will help creating a nice ambiance on the first floor. Since I am seriously done with my kitchen table (it is at least 25 years old and show the war wounds to prove it!)  I don’t really see this as an expense incurred to sell my house but more as a necessary upgrade to our lifestyle in any case.

Adding storage space

You can never have too much storge space! Think about unused areas of your house and look at ways to add a cabinet to improve its storage abilities while reducing clutter. I am exploring the addition of a second set of shelves over the existing ones I have in my laundry room. I have a high ceiling but nothing over the washing machine. This will help us by hiding the Christmas decoration boxes ;-).

One last point…

If I realized that I can pay back my parents on time, I will probably complete an overall facelift in my living room. I would like to add a fireplace and completely change the appearance of its decor. Since this is the first room to strike your eye when you enter the house, it will give an awesome first impression to the future buyers. However, if I want to do everything I want in the living room, the bill may approach $4,000… I’m not sure if it’s worth it or not…

What do you think?  Please offer comments, suggestions.  I appreciate any and ideas during this brainstorming period…

image source: mescon

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January 28, 2010, 9:11 am

Options Strategy #2: Protective Put

by: The Financial Blogger    Category: Trading

Last week, I did a brief introduction to an options strategy that can be used to get additional returns with little downside risk. Today, I will take the time to look at another very popular strategy, the protective put. As discussed in the introduction to options, these derivative instruments can be used in most portfolios if they are used in a smart and disciplined way. Like almost any product, if options are used without a clear and disciplined plan, things can go awry.

What is a protective put?

This strategy involves holding shares of a specific company, index or basket of stocks and also holding a put option on the underlying position. This put option will make money if the stock(s) lose value and becomes a ‘hedge’, that will be able to offset a loss on the holding. It is in fact a type of insurance in case of a declrease in value for your position.

When can it be used?

It can be used in many circumstances. The general reasoning is that the investor wants to keep his stock and is concerned about a possible decline in the stock. There could be a few reasons behind this situation. Here are some examples:

  • Belief that the market will rise but that there is a smaller probability of a major decline from which he wants to be protected
  • The investor believes there is a good chance that the stock will decline but does not want to sell them because it will create capital gain and thus important tax implication.
  • The investor wants to keep the income flow from dividends without assuming too much risk if the stock price declines
  • An investor holds some stock that he believes in but he determines a maximum amount he can afford or is willing to lose given a decline.
  • An investor wants to protect against downside risk without selling his entire portfolio of stock (thus incurring major transaction costs)

In all of these cases, the protective put would be a very good strategy for the investor involved.

How do I determine what put to buy?

If you want to implement this strategy on a specific stock or portfolio, then you can simply buy a put option with that underlying stock. However, if you hold many stocks in your portfolio, it might be more effective (although imperfect) to hedge through one or two puts. For example, if your portfolio is heavily invested in financials as well as in the general stock market, you could buy put options on XLF (financials) and SPY (S&P500).  This would give you protection on these broader indices.

Positive impacts

Depending on the reason behind your trade, the protective put can give you upside potential if your stocks climb and a limited loss if the stocks decline.

Negative impacts & risk involved

Like any other insurance, there is a cost associated to this strategy. The cost of course is the premium that you are paying when buying this insurance.

Earlier, I also discussed how you could hedge your entire portfolio with one or two put options. The risk involved is mainly if something “exceptional” happens to one of those stocks in your portfolio. If the company was involved in a fraud or had negative earnings while the industry in generally was still performing, the ‘protective put’ would not be of much help.


I believe that as a portfolio grows, the potential use of a protective put becomes greater as there are many different uses for it. There are many different aspects to consider before entering into this strategy but it can be a very effective and cost efficient way of hedging downside risk for a limited period of time.

Please feel free to ask any questions regarding this strategy or options in general:)

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January 27, 2010, 5:27 am

Thinking of The Perfect House

by: The Financial Blogger    Category: Properties

Since a very young age, I became accustomed to changing houses every two to three years. For a while, my parents used to buy a property, renovate it and flip it. Therefore, I have lived in 12 houses and I am only 28!

I guess this is why I am starting to look for another house already! After living in our house for the past 3 years, we have been searching the web for another home. We haven’t put our house for sale (we actually have several things to do before it is ready to market), but we are already looking to see what is available.

I guess we will be looking for a very long time because the list of things we want in our next house is quite extensive. So before talking about how we will modify and make our house more “marketable”, I will talk about what I am looking for in my “perfect house”.

Land and privacy

I am not a big fan of the suburbs. In fact, I prefer living downtown or far away ;-). Why look at the 2 opposites? Because a loft downtown and an acreage property represent 1 similar point: privacy. While living downtown means that you live in the middle of a crowd, everybody minds their own business. As for the acreage property, well, you just don’t have to see your neighbours that often ;-). Since I have a young family, I would rather have large plot of land than live in the middle of the urban jungle (read ‘city’). While I am not going to become a gentleman farmer just yet, I am looking more for a plot  around 40,000 to 60,000 square feet. I would like to have a lot of trees so I can spend a nice afternoon outside under the leaves breathing fresh air.


I do have a garage right now andI all I can say is that I really appreciate it!  (all men need a cave 😉 ) There are a tons of things that can fit in it and there is nothing more important than a car in a garage when it is -20 degrees outside!

A room over the garage

We tend to see this more and more often. Having an additional room over the garage offers the option of having a fourth bedroom on the second floor. You can also make this room a home theatre, a home office or a playroom. This gives great flexibility and space.

Open area

I don’t really like when the kitchen, the dining room and the living room are separated by walls. I like the impression of space when there are no walls. This also helps with luminosity in each room.

And a few other extras…

Since I am only at the “dreaming stage” and I am not calculating the full cost of everything I want, I started to stray into dangerous territory: everything I would like in my perfect house. This is why I would add a few other things….

A fireplace

I really like the look of a fireplace in a living room. It entices people to gather around and sit down to chat. It is also very relaxing. In a perfect world, the fireplace would be in the middle of the house so it would allow for slight delination between the dining room,  living room and has four open sides, a kind of hearth… whoa! That must be expensive!

More windows

If I would be fortunate enough to live on a bigger parcel of land with a lot of trees, I would add another room next to the dining room. I would be like an indoor porch adorned by windows from the knees to the 10 foot ceilings. This would be our reading and relaxing spot. Then again, this option is probably quite expensive!


I just love clothes! And since I don’t have one where I live, I would definitely like to have a walk-in in my next house, most likely two (to keep the peace). This would allow me to separate my suits from my casual clothes. And it would also make it easier with my better half rather than share this space with my wife 😉

What about you?

I would be curious to know what would you include in your perfect home? Which modifications have you made to your current place to make it better? It would likely give me some additional ideas 😉

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January 26, 2010, 5:29 am

How to Benefit from Chaos in Your Life

by: The Financial Blogger    Category: Miscellaneous

Last week, I read a very interesting post over at  The Financial Samurai about how chaos transformed the lives of three individuals. This article caught my attention because I have been a big believer of Chaos for the past 15 years (and I am 28 😉 ). So since the age of 13, I have gradually come to  understand how great and beneficial Chaos can be in everyone’s life. However, as opposed to the article mentioned above, I don’t want to wait around until Chaos hits my life (although sometimes it does anyway!). I like to create Chaos around me then master it to improve my life.

Have you ever tried to reorganize an organized playroom?

If you have kids, you will know exactly what I am talking about. We spent many hours last year trying to figure a way to organize their toys in the playroom. We wanted to make it space efficient, easy to use for children and safe. But have you noticed how it is hard to rearrange their playroom when everything is “in the right place”?

I have also noticed that I am able to find better ways to show off the playroom when it’s a big mess and that there are no more toys in the boxes. Chaos is helping me opening my mind and find creative solutions so the situation can be improved upon.

Our brain is driven by an unlimited powerful beast… in a rat cage!

As we grow up, we are encouraged to follow rules, understand and apply procedures. And the more we go at school, the more we tend to think the exact same way as those around us. We tend to use the same rationale and find the identical solutions. However, our brain is way much powerful than that!

This is why we need to let the beast go sometimes and let it create some chaos. When things are in motion, it is much easier to move them, right? When Chaos is in your life, it is the perfect time to get things going your way!

Examples of how Chaos can send your situation in a better direction:

#1 My parents

About 13 years ago, my father lost his contract with a big company and declared bankruptcy. Not too long after, we lost everything: our house, our cars, my future summer job (I used to work for my father) and all the treats we used to have… After a few painful years, they realized they were not made to work for someone else and they started their own company. Now 10 years later, they work 3 days a week and enjoy life.

#2 I quit my job

I’ve already written about how and why I quit my very first job. The funny thing is that I didn’t have another job lined up; I just couldn’t work for those people anymore. So I quit, woke the next morning unempolyed and started to look for another job (bills were still coming in!). I finally ended-up in a marvellous department where I learned a lot and grew up as a person. I am now a great financial planner because I have met a few people who made me the diligent worker I am today.

My manager back then told me something very important. A life lesson  that I will always remember:

“When you are too comfortable, when you sit down and relax at work, this means that you are in your bubble. At the second you realize it, burst your own bubble, create some chaos and change your life”.

By the way, this is how human beings evolve…

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