Posted by Canadian Dream on May 26, 2009
I realized the other day we have a bit of theme to our individual investments, most of them match our bills. To my mind it sort of makes sense. A repeating bill implies long term relationship with customers and potential good cash flow in my mind. Obviously you still have to check the underlining business to see if it makes sense to you, but that’s always part of investing.
To show you what I mean here is a list of bills and stocks either I or my wife owns:
Phone / Internet Bill – MBT
Power Bill / Water Bill – APF.UN
Mortgage/ Investing Fees – BMO
Natural Gas Bill / Gas for Car / Real Estate – EIT.UN
Real Estate (Mall shopping) – REI.UN
Booze – CDL.B (Ok, it’s not a bill, but still a spending habit)
Perhaps the only one I’m really missing some exposure to is groceries/consumer goods. Yet generally those areas can be fairly low margins so I’m concerned about finding something that will provide a decant return. In addition, the competition is fairly fierce in those areas so I’m a bit leery that I’ll have to monitor that investment too closely. Any ideas on what I should look at?
So do your investments have any themes? If so, what? Thanks for sharing.
Posted by Canadian Dream on May 25, 2009
I finished watching a show last night called I.O.U.S.A. on CBC which had the general message of the USA is up to it’s eyeballs and drowning in debt. What I found interesting about the amount of the US national debt at the time of the movie was $8.7 trillion dollars. Yet when you added in all the other liabilities like unfunded Social Security and Medicare the total ballooned to $53 trillion dollars.
WOW! That’s one hell of a mortgage for a country to have. So I began to wonder is a country and its citizens sort of like parents teaching their kids. Is the fact that our governments are so used to being in debt setting the stage for us to all be a bit too overly comfortable with debt?
For example, do you know anyone who is completely debt free? No mortgage, no line of credit, no nothing. I personally began to think about this and realize I can only think of one person I know. I image you would have a similar experience, that you could likely not list ten people you know who are completely debt free. So on an informal basis we are all in debt for the most part, is that a good thing for a country to have? We all have debt so it must be alright, right?
If this familiarity with debt causing us to have unrealistic expectations in our lives? Have you seen some of the condos and housing people are calling ‘starter homes’ in ads today? My current house isn’t that nice. Then it just goes on and on. People buy new cars right after getting their first job, does that even make sense when you already owe $10,000′s of dollars in debt from your education? We look everywhere and see nice things other people have all paid for with debt and don’t realize that it is a false illusion of wealth.
Is one of the major issues we have collectively that we are too used to being in debt? Do we need to collectively start pressuring each other and our governments to be more responsible with debt? Should keeping up with everyone else mean not having a credit card balance and a modest mortgage? It would be an interesting place to live where not having debt was more of a sign of status than what you drive or where you live. Unfortunately, being debt free is hardly sexy with living in a smaller home and driving an used car so the marketing is going to be difficult to convince people to change.
Am I overly comfortable with debt? Yes, I would say I am. I don’t freak out that owe $135,000 dollars to the bank for my house, but in reality that is a huge amount of money to be owing. I also don’t mind using the line of credit once in a while. So how about you? Are you too comfortable with debt or not?
Comments:
Filed Under: Debt
Posted by Canadian Dream on May 22, 2009
Ok I agree with the idea of forcing car manufactures to increase their average fleet mileage, but I question the idea that electric cars are going to be good for people. Let me say I’m speaking of specifically the fully electric versions out there not hybrids.
The reason I have issues with large amounts of electric cars out there is the idea of where are you getting the power from to fuel the cars? 50% of US power generation is from coal. So depending on mileage improvements, where your power comes from and battery life cycle emissions you might actually be better off buying a gas powered or hybrid car instead of a fully electric car. (For an interesting discussion related to this read here).
Ironic isn’t it. People will consider their cars emission free, but ignore the fact their power company had to burn more coal to keep the car on the road. I’m not against electric cars, I just think people need to consider where their power comes from before buying one. In Canada good choices include BC, Quebec who have large hydroelectric power sources and Ontario will be a good choice post 2014 once they shut down the coal fired units. On the other hand buying one right now in SK or AB is just plain dumb since most of the power comes from coal.
So good ahead be ‘green’ if you want, but please consider the content of your decision before buying one of these electric cars.
