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Friday, March 27, 2015

A History of Labour – Part VI

Posted by Tim Stobbs on March 23, 2015

Sales Representative/Technical Support SpecialistPushing Chemicals – Part 2 (Years 3 to 6 A.D. – After Degree)

Now that my wife and I had been voluntarily exiled to the Northern reaches of British Columbia, I settled into my new job and surroundings fairly well.  My boss conveniently enough was in another town down the highway by two hours.  So I was largely left to my co-workers to educate me on the nature of north.

I learned rather quickly that engineers in general were not well thought of out in the field.  After all most of the engineers these people dealt with came from the head office, did some work and then left (usually wish something still not working just right).  In general, they managed to leave a bad taste in most people’s mouth.  So for the first time in my life I had to adjust to people thinking an engineer was a bad thing and keep my mouth shut up about some of the comments people made.

Overall the I loved about half my job.  I was good at the technical support side of my job.  I would troubleshoot customers dehydration and amine gas processing system for clients that used our product.  The good news was I wasn’t expected to be an expert at once.  I had other tech support guys who’s brains I could pick to help me out.  Overall I got rather good at the job and even at one point convince a client to spend like $150,000 to test out a theory of why their amine unit wasn’t working properly.  I was right and then even took a few photos when they sent a thank you email on it.

Part of my duties around tech support was doing training seminars for operators at various facilities.  Given I was a strong introvert I didn’t like that part of the job that much.  Add to that the dislike of engineers in the area, I tended to have hostile audience.  So try to imagine trying to teach a group of adults who hate your guts before you have even opened up your mouth.  That was part of my job.  The upside of doing this like 100 times or more was I actually go fairly comfortable doing public speaking.  I still feel nervous doing it to this day, but I don’t let it control me.  Which is probably why to this day I do a fairly decent radio interview…I sound relaxed even if I’m not.

The other half of my job was sales which I determined very quickly…I don’t have natural sales bone in my body.  The entire thing is rather alien to me.  So while I understand the theories behind it, have practiced it endlessly for a few years…I still don’t like doing it.  Which is why you have likely noticed I don’t push much on this blog.  I tend to do the low key sales approach like: do good work and let others talk about it.  It seems to work just fine when I really don’t care for the most part if you read my book or not.

I also should point out that the myth about sales guys buying lots of drinks and meals is partly true.  I ate out so much as part of my job that I rarely remembered to take my wife out for supper once in a while.  It got to the point I had to tell me wife to just force me to go out once in a while.  Also it was the only job in my entire life where a co-worker said to me: “I really need to stop drinking so much at work”.  This made perfect sense as you tend to take clients out for drinks a lot so you really had to learn to pace yourself.  Otherwise it entirely possible to fall into a drinking habit without really realizing it.  Lucky that never occurred to me…the fear of actually getting drunk in front of our clients scared the crap out of me so I avoided it like the plague.

The other part of my sales job was during the summer months to golf.  Yes I got paid to play golf and drink beer…trust me it gets old rather fast when you do golf tournaments every other week it seems during the summer months.  The side effect was this was literally the best my golf game ever got…I was actually not bad for a few summers.

Financially this was literally the golden age of  my career.  Our pay structure was odd in the fact my base salary was tiny, but I got huge bonus cheques every quarter on top of that.  So while my base pay was about $45k, I was making closer to $90k/year with bonuses (actually if my memory is correct the biggest cheque I ever got was $12K in one quarter).  So this is how I learned to live on less as we never depended on my bonus cheques.  So I got used to living on a small amount of money and then began paying down student debt, and saving for a house down payment (and even buying our first house there).

Being a oil and gas town, I learned rather quickly to see certain things as normal.  Like most people had work trucks and this meant going to Walmart you would see way more trucks than cars in the parking lot (approximately a 3:1 ratio).  Also my wife and me noticed a LOT of small children around town.  Then when talking to someone about it them mentioned that on a per capita basis our town had one of the highest birth rates in the entire province.  During our first winter I finally got why…it’s REALLY cold up there.  I mean I had to look up the temperature when anti-freeze froze for one customer and many of the wives of the guys who worked in the oil and gas didn’t get jobs, so to pass the cold nights there was apparently a LOT of sex happening in town and resulting a LOT of babies being born.  Hell my wife and me even did the same thing and our first son was born up there.

Yet after my fist son was born it became painfully obvious that we were living far away from both of our extended families.  I even tried to get a job transfer to be closer to our family, but I didn’t get the job (I learned I was #2 on their list).  So in the end I began to look for another job closer to our families.  Money was one thing, but some other things matter more.  So in the end, I took a massive pay cut (~$20K) and we sold the house.  We were heading back to Saskatchewan to be closer to our families.

Summary

Lessons Learned

  • Public speaking is hugely useful skill to learn.  While learning it sucks, its application is huge.  I’ve done all sorts of presentations and interviews because I learned this skill.
  • When selling something, given all other factors are equal.  People will buy from someone they like better.  So be nice to people.
  • Eating out, drinking and golf can sound like perks to a job, but they lose their appeal after a while.

Financial

  • I don’t have good records from this time, but I can say after we sold the house we cleared the last of our student debt.  So that was $60,000 paid off mostly in three years.  We also build up some retirement savings and managed a $40,000 down payment on our next house.
  • Get in the habit early in life of living on less than you earn.  This job was an excellent training ground for this concept and I kept up the practice ever since.

Dreading Taxes

Posted by Tim Stobbs on March 16, 2015

You look at the form and turn away, but then look again anyway.  Your mind screams for you to stop this madness but your press on away just to finish up this section of the form.  Then it is over for today, you rest and regain your strength to face the beast that is your taxes.

The above paragraph is a bit exaggerated but not by much for some people.  Dreading your taxes is a fairly common event, but what various is the amount of procrastination that goes with it. I should know as I am a bit of expert of avoiding doing my taxes.

I’ll clean the house, fix something, play with the kids, read a book, cook something all to avoid doing my taxes for a few more minutes.  Yet the reality of the situation is my taxes are actually not that difficult anymore.

In the beginning taxes were drop dead easy.  Input T4, add in a few deductions and file it.  Done.  Then we started adding things over the years like kids and all those possible deductions, a home based business and all those fund calculations and eventually taxable investments with all that tracking that goes along with that.  Eventually my taxes expanded from 30 minutes to several hours and finally half a day to prepare.

So for number of years my taxes got progressively more difficult to do by myself, but in the last few years they have turned into something that is fairly stable.  So now I don’t have to learn an entire new section each year, but rather just spend my time double checking everything rather than spending hours on CRA’s website reading tax bulletins trying to understand some detail of if a deduction applies to us.

This stability has allowed my wife and I to do some minor adjustments to our organization to make things a bit easier such as:

  • We track all our house bills (water, heat, power) in a spreadsheet to allow easy roll up at year end when we calculate business use of the house.
  • My wife tracks her business accounting with a little program that allows her to assign tax categories during the course of the year.  So come tax time she prints out a report with the totals for me to review.
  • I created a file folder each year and put any tax related slips I may need in it starting with the notice of assessment from the previous tax year.  That way I don’t have to look around for the various paperwork when I start entering in information.

Each of those are fairly minor items, but they all help to make filing our taxes a bit easier at the end.  I’ve come to realize that I actually don’t dread my taxes…I dread all the organization that I have to do to get ready to file them.  So by spending a bit of time during the year to make things easier eventually pays off to make filing our taxes just a bit easier.  It isn’t perfect by any measure, but I’ve managed to shift a dreaded task into something tolerable.

So do you dread preparing your taxes?  Have you found any tricks to make it easier on yourself (other than the obvious of paying someone else to do it)?

2015 TFSA Update

Posted by Tim Stobbs on March 12, 2015

As I previously noted in my last net worth update we already finished maxing out our TFSA accounts for the year.  So with that in mind my wife and I went shopping for some additional stocks.

Our strategy for our TFSA accounts is fairly straight forward.  We buy individual stocks that pay a dividend and mirror our existing bills.  So that means we tend to look at banks, power companies, telecommunications, real estate trusts….you get the idea.

We also have a few other ‘rules’ that we try to follow.  These include we also try to buy stocks with a fairly good yield, so while this doesn’t result in any firm minimum number or maximum we do try to aim for the accounts combined having about a 5% yield based on current value.  The other ‘rule’ we try to meet is to have about two companies per sector and try to not have too much dividend income from any one company.  We don’t keep a firm cap or anything, but we try not to have more than $500/year in dividends for a starting position in a given stock.  If the dividend growth of the stock pushing it higher than that I tend to ignore that.

Our current holdings are (by stock ticker symbol):

  • BMO
  • RY
  • EIT.UN
  • D.UN
  • REI.UN
  • NPI
  • AQN
  • BCE
  • RCI.B
  • CSW.B

We recently increased our shares in RY and started a position in RCI.B. That consumed the majority of our available cash so I doubt we will be buying much more for a while until our cash position builds up again.   We don’t bother with any DRIPs for these accounts.

Overall we are hitting the majority of our objectives with these accounts.  Our current combined yield is $4973/year on $100,270 in account value, which puts us just under our 5% target (yes I’m acutely aware our actual yield on contributions to these accounts is much higher).  The longer term plan is to get the yield up to $6000/year by the time I retire from my day job, which should be doable in three more years.  That way we can only draw out the dividends from these accounts and never touch the principle.

Well at least that is the plan…long term I suppose when we adjust positions over the years we might end with a small amount of principle getting paid out.  I intend to just take the cash out periodically rather than a complicated tracking spreadsheet. The other longer term adjustment would be in our retirement years strip out our RRSP and taxable accounts and move the money to the TFSA over the years to reduce our tax owing in the long run.

Of course these are only ideas for the long term.  I still need to sit down and plan out in more detail how I will switch from the contribution phase to the withdrawal phase.  After all getting the money invested is one thing, living off the investments gains is entirely another beast.

Any questions or ideas of companies for me to consider?