So this is what I’ve been enjoying recently on other blogs.

Canadian Capitalist has a great one warning about watching your fees on those new TFSA accounts.

Early Retirement Extreme asks: What do you see when you look at someone?

I’m not the only blogger having a second birthday and giving away stuff.  The Financial Blogger is giving away up to $200 in cash.

Also keep in mind Million Dollar Journey should be having his second birthday early next month.  It should be interesting.  In the mean time read his post on delayed gratification.

Preet is giving away a GPS system.  I have to admit that is a very cool prize.

Trent had a great piece on retirement plans in a down stock market.

Oh wonderful Mr. Market, let me thank you for these days.

For showing me the the stupid plans of baby boomers who left too much money with you despite the fact they want to retire next year.

For providing me a literal army of stupid seller to buy cheap stocks from.

For giving me comfort that I won’t be as stupid as they have been when I retire. Oh thank you Mr. Market.

I think I’m going to have to develop a religion on this.  I watch the news again tonight and saw yet more ‘worried retirees’ talking about their pensions while I sat in front of the screen looking on in disgust.  I was thinking what’s wrong with you people haven’t you hear of bonds, GIC’s?!?  Didn’t it occur to you all to not keep the money your planning to buy your groceries in something a little stable?!?!  Gee whiz, even Derek Foster with his all stock portfolio is just living on the dividends rather than the principle is smart enough to know you don’t sell now.

What is wrong with people?  Didn’t it occur to everyone that buying everything on credit and not saving would be a bad idea for the long run?  Or is that big screen TV really giving you that much comfort now that you are facing an extra five more years of work before you retire (if your lucky)? Are you enjoying your granite counter tops just before your house got foreclosed?

All of these thoughts have been screaming in my head lately as I look at the growing mess with a smirk of satisfaction on my face.  Why?  Because of all the chaos, fear, greed and uncertainty are everywhere now and they all point to one thing.  Living a simple frugal life with little debt and modest wants is a great way to enjoy a happy life.  Damn it feels good to be right after years of people looking at my strange when I said “No, I don’t want to go out for lunch I can’t afford it right now.”

Perhaps over the last two years you’ve noticed something on this blog.  I typically don’t write a lot about debt.  After all I don’t have much myself other than a modest mortgage on the house and a line of credit that was used to buy investments.  I’ve never carried a credit card balance for longer than a two month period (which only happened once while moving between jobs).   Actually all in all my credit report is likely the most boring piece of reading out there.  So I’m in a place where I’m very comfortable with my debt so I don’t feel I have a lot to say on it.

Yet I realized that fact I can write that statement and mean it could be something worth talking about.  After all we are entering an economic down turn and I’m so relaxed by it all I think I get some people overly nervous by it.  I mean I’m not cutting back on anything.  I’m still spending the same amount at Christmas this year and I know there is almost no way that I’m going to be worried about the bank trying to take my house.  My only real complaint is I wish I had more cash to go spend more money on investments!

The way I think about debt is it is a very interesting breed of dog.  You usually get it when it is small and very manageable and you actually can like the thing.  Yet if you feed it too much it grows and then needs more food to keep growing.  Keep up this for too long and the damn thing eats more than you do and starts to take up so much room it takes over your master bedroom and you can’t get the thing to leave because it’s so big it won’t listen to you anymore.  Yet if you don’t over feed it at all it stays the same cute size and heels on command.

The key to keeping debt under control is to just follow a few simple rules:

1. Never carry a credit card balance.  Pay the thing off every month.  I know that at times there are exceptions but generally speaking 99.9% of the time you should pay the entire amount off each month.
2. Skip the store credit card.  If you actually buy so much stuff from one place to need a credit card dedicated to that store you have a shopping problem.  Seek out medical help right after you cut up your store cards.
3. When paying for your car pay at least 30% in cash.  Actually I would like people to pay cash for the entire amount of their cars, but since a mechanical breakdown can force you into looking for another car earlier than planned some credit is ok.  The trick is to NEVER put more than 70% of the car’s value on credit.  Why 70%?  Because new cars depreciate by about 30% in the first year, so you should never be in a position where your debt is more than your car’s value.  So if you can’t pay that other 30% in cash you likely can’t afford the car you are looking at.  Cars in general to me are the worse black hole out there for money other than debt.  Where else can you buy something new that will lose most of its value in the first five years you own it.
4. A line of credit is not a cash machine.  It’s not a good idea to use a line of credit other than buying investments that pay more than your interest bill.  Using a line of credit to redo the basement or pay for that vacation means you are not facing the obvious: if you can’t buy it for cash, you can’t afford it.  Try delayed gratification for a change of pace, it might grow on you as a concept.
5. Never buy up to your maximum pre-approved amount for a mortgage.  The first house we were pre-approved for a maximum of $262,000.  We ended up spending $120,000 and getting a mortgage for $108,000.  Yes, less than half.  Just because you are buying your first home doesn’t mean it should come with granite counter tops and stainless steel appliances in the nicest area in town.  It should likely be a bit of fixer upper and be in a so-so neighbourhood.  One of the biggest mistakes young people make is taking on way more mortgage debt than they should and becoming house poor.  They seem to have forgotten that your home should improve with your earnings, your house should not improve before your earnings improve.

So those are my rules.  Obviously they have worked for me and I’ve broken a few of them myself at times, but I was learning as I go.  So what would you add to this list? Or if you don’t agree with something tell me why.

Well after yesterday and realizing this blog was two years old (hint: I’m giving away free stuff) I have to think on the fact on how much I’ve changed in the last two years.

I mean really I’ve done a lot of growing up in the last two years.  I’ve turned from a little overly self centered guy who thought he know some stuff about personal finance to really understanding how little I know about personal finance and investing and being awed to discuss these issues with some of the best bloggers in Canada.  Then I’ve also changed part of this blogs theme to include some environmental stuff as well.  I was a bit shocked to realize that the first Green Spot post was back in July this year!

This got me thinking about people growing up in general.  I mean it just sort of happens that we evolve into ourselves a bit more every day.  For me being somewhat environmentally aware has been a part of me a for a long time, but I’ve never had the option of doing it as a day job.  Now with my new job starting next month part of my job description is: participate in the development and implementation of a comprehensive and ongoing strategy for mitigating the company’s emissions profile to achieve federal and provincial emissions targets and to meet corporate environmental objectives.

To translate that into basic terms: take one of the worst polluters for CO2 emissions in Canada who is going to need to replace 80% of their infrastructure by 2030 and turn it into a green machine that meet every target any government can put on it.  To call this a challenge is a gross understatement.  It’s going to be a little bit like turning around GM from it’s current mess.

So as part of my new job I’ll be looking into various pollutants in more detail then I’ve did before so that will likely be reflected in the Green Spot posts going forward.  I may be a little bit more technical and dig a little be deeper than before.  So just to let you all know the Green Spot posts are going to keep growing up, but not to worry I’m not going to go overly technical on you.

If you got any questions, please let me know.

Tick.  Tick.  Did you notice that?  No, I didn’t either.  Well during the last weekend this blog offically turned two years old and I forgot about it.  I’m still trying to decide if that is a good thing or not.

Well after two years of doing this I’ve come to certain key realizations about personal finance and this blog.  They are:

1. The Basic Math Is Easy.  Really it all comes down to living below your means and getting into the habit of saving.  After that it’s all just details and math to determine what is right for you.
2. The Emotional Is Hard.  Getting to know your own head and why you do certain things is the most challenging aspect of personal finance.  Can I really handle a 30% loss in my RRSP’s?  I wasn’t sure until recently and now I know I can sleep well with that.
3. Happiness is Better than Money.  Yes you read that right.  I think people dreadfully under estimate how important it is to be happy in your own life.  The trick is to find a balance point.  You may not love your job, but if you at least like it,  it pays well and you like your co-workers you are well on your way to being happy.
4. Conventional is Over Rated.  Do what works for you and don’t worry about what others think.  You are living your life not their life.
5. You Guys are The Best Readers.  No really you are!  I mean I can be sick and miss a post and you take it in stride.  You provide great feedback and interesting post ideas.  I don’t think I’ve ever had to delete an attack comment on anyone because if you disagree you at least keep it civil.

So to celebrate I’m giving away two gift cards to a store of your choice.  First prize will be a $75 gift card (CDN $) and second place will get a $25 gift card (CDN $).  To enter this contest you have two methods:

• Leave a comment on this post for one entry.
• Link back to this post from your blog to receive a second entry.

The winners will be picked from a randomn number generator.  The contest closes on Nov. 21, 2008 at 8pm (CST - SK Time).  Maximum of two entries per person (one from a comment and one from a link to this post).  A valid email address is required for me to contact the winner.  Gift cards are limited to stores I can either buy the gift card online or purchase in person in Regina, SK.  Best of luck.