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Monday, March 27, 2017

Don’t Like Your Cell Bill, Then Buy Stock

Posted by Tim Stobbs on May 26, 2016

Perhaps the issue is Canadians are too polite? Or more likely we have a market so dominated by a handful of companies that the telecoms can and do charge what they want for your cell phone.  A fairly good analysis of the issue is available in this story.  Yet the author missed one entirely major point in the story in my mind. If you can’t beat them, just buy them instead.

At least that is part of my own strategy when it comes to dealing with high telecom bills.  Rather than complain, we took a two fold approach.  First up was buying all you actually use.  For example, my wife almost exclusively texts with her phone (rarely a call and no data as she usually uses her tablet at home instead).  So we got her a prepaid phone and signed up for a basic plan with Rogers.  So for $5/month she gets enough texts to be happy and has a bit of cash on the account if you wants to make a call.  It works for her at the moment.  As our needs change we can look for something else.

I’m not saying we are perfect here, I still pay too much in my mind for cable and internet, but overall we have made some progress over the years getting a handle on what we actually use and then buying as close to that as we can.  The trick is to come back to the issue every once in a while and see if any changes could help you lower your bills.  I’m currently keeping an eye on the ‘skinny’ cable packages and playing around to see if we could use one of those to help lower our bills a bit.  The bane of my existence right now is getting CFL games on some kind of steaming package, then I could get rid of our cable bill entirely, but alas that doesn’t exist yet. Sigh.

The second part of our plan was to buys some shares in those previously mentioned telecom companies and get a nice stream of dividend income form everyone else paying too much for their cell phones.  After all a few hundred shares at a yield of 4 to 5% (which is roughly where we bought in with Rogers and BCE) and you suddenly have some income to help pay those cell phone bills with money for the very company that is sending you the bill.  I sort of enjoy the irony that Rogers pays us money to help pay our bills.

In the end, I’m happy with our current setup.  It’s not perfect, but I don’t feel so bad about paying my bills when they keep sending dividends to our trading accounts.  So how do you cope with your cell, cable or internet bill?  Any other ideas on how to save money?

In the Globe and Mail

Posted by Tim Stobbs on May 3, 2016

Well there is a nice little article over at the Globe and Mail on me today and they managed to get a few items wrong.  Sigh.   Feel free to ask any questions you like here on the article and I will do my best to address them.

For now I offer the following points:

  1. Nope, I don’t have $600,000 saved.  They got that particular fact wrong.  Currently it is closer to ~$420,000 in investments plus a paid off house.
  2. No gold plated pension. In one of the comments on the article someone assumed I have a defined benefit pension plan.  No I don’t.  That ~$420,000 above includes my defined contribution plan amount.  I have a okay pension plan, but not a defined benefit one.
  3. How little do you spend? It varies like most other people but our average spending is around $28,000 to $32,000 a year.  Keep in mind I have no mortgage payment so feel feel to add yours in to get a clue on how I compare to you.

Hope that helps,

Tim