January 19, 2008, 7:00 am

Financial Ramblings

by: The Financial Blogger    Category: Financial Rambling
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Believe it or not, Wal-Mart will contribute to my Smith Manoeuvre project! How is that? Inflation baby! There is actually a real price war in the alimentation industry as everybody fears the arrival of Wal-Mart mega grocery stores. Therefore, the three major players, Loblaws, Subbeys and Metro are dropping their price in order to get a bigger part of the cake. This price war will certainly drag the inflation down for a while. Therefore, the Bank of Canada will have not other option to drop the interest rate again in 2008.

Lower interest rates leads to bigger payment in capital leads to bigger investment in my SM! I guess I would have to go shopping to Wal-Mart more often as I owe them one 😉 I will use the first drop of interest rate in 2008 to build a safety net within my SM. In fact, I will not change my strategy but pay down my HELOC. If there is a second drop, I will certainly jack up my SM investment to $700 a month!

The temptation is great to buy a new car in this beginning of the year. I just saw a 1,9% over 84 months ad from Mazda. Hum… this mean that if I sell my old Mazda and I get a brand new Tribute 2008 4X4 full equipped, I would pay only $385 a month. You might argue that I would be stuck with this payment for 7 years BUT I would end up paying a little bit less than $2,000 in interest over that period! However, I must admit that having my wife staying at home worth much more than a brand new 4X4. Therefore, I will keep my 2002 black box for now 😉 See? I’m being frugal for once!

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