February, 2023 - Millionaire on the Prairie

Rage Applying – New Name for an Old Idea

I just learned about “rage applying“. Apparently, it takes place under the following conditions. When you don’t like your current work environment, you apply for a new job.

Trust me when I tell you that this is a new name for an old idea. No one has invented anything new by slapping a new moniker on this behaviour. (If anything, this new name is a fine example of re-branding at its finest!) Here’s the big, open secret just in case you haven’t learned this particular lesson yet. Most people look for new jobs when they no longer like their working conditions. This is a normal, rational response to a situation that has become unbearable and unpalatable. That this behaviour has earned itself a trendy hashtag says more about the merging of entertainment and news than it does about employee behaviour.

Sometimes, people find themselves in situations that they want to leave. Maybe it’s work, or maybe it’s a relationship. Whatever it is, people want a way out. They will look for an escape. Should you happen to find yourself in this position, might I suggest that you have a little bit of a cash cushion to tide you over? There should always be a little bit of money in the kitty for endings, especially when you initiate them. Endings can be painful, disruptive, and disagreeable. People rarely speak about the fact that endings are rarely, if ever, free.

Leaving your job for another one might entail a delay in receiving your first paycheque from your new employer. Take that into account before you leave your current position. Ask yourself if you have enough money set aside to continue paying your bills until you get that first paycheque? If you need to move cities for your new job, do you have enough to cover all the associated bills? Have you considered keeping a little cushion of cash set aside just in case the new job doesn’t live up to your expectations and you need to find another one?

Rage applying might assist you to get away from an intolerable situation, yet you should always be working towards making your dreams come true. If you’re going to look for a new job, ask yourself if it gets you closer to the life you really want to build for yourself. Is it a strategic move? Does the new job challenge and intrigue you? Will you be able to shed those tasks and responsibilities that you hate at your current job? Is there going to be a pay increase such that you can direct more of your hard-earned money towards the elements of your life that make you happiest?

Think about what you want to accomplish in 2023. Will rage applying help you attain your goals?

For the record, I’m not suggesting that you stay in unhappy situations. That’s not in your best interests, it’s detrimental to your mental health, and it won’t maximize your joy. I want to see that you’re moving towards the dreams that you have for your life. If you truly believe that applying for a new job will bring you joy, then start sending out those applications. Just make make sure that you’re smart about it. Establish what you’re looking for in your next position. Better promotional opportunities? A chance to work with someone you admire? Experience that will develop & strengthen areas where your skills are weak?

Take some time to determine what it is that you want. Don’t forget to consider the financial impacts too. It’s a no-brainer to leave for more money. A better work environment and a boatload more cash is what everyone wants. The challenge lies in figuring out what you’ll do if the next position pays you less than what you’re making right now, but will get you closer to your heart’s desire. Is a potential paycut justified if you truly believe that you’ll be happier? Can you take a pay decrease and still meet your financial goals?

Rage applying is a new name for an old trick. Life is too short to be utterly unhappy at work. Change your job, if you must. Moving to a situation that brings more joy into your life, or atleast eliminates a significant chunk of unhappiness from your life, is a good thing. Just do it in a smart way. Spend some time on the front-end to determine what you want, what you don’t want, and apply for positions accordingly.

Good luck!

Do Some Meal Prep & Keep More of Your Money!

Remember how I’ve talked about the money-saving magic of your kitchen?

Well, I’ve upped my game. You see, I really hate grocery-shopping. It’s a recessive gene. I know this because both my mother and my brother love grocery shopping, and even my father didn’t mind doing it. My mother loves it so much that one time she complained that I went through the store too fast. “It was like you were on roller-skates! I didn’t get a chance to look around!”

Look around?!?!! It’s a grocery store! You’re here every week – sometimes twice. Exactly what is there to see that you didn’t see 48 hours ago?

Anyhow, I’ve had to adjust my perspective over the past year…

Step 1 – Saving Money While Grocery Shopping

We all know that inflation has impacted the prices we pay for food. As a result, I’ve cut back on dining out. Instead of it being a casual, spontaneous thing, I’m far more meticulous about planning my restaurant visits. Dining out is now a treat, rather than a weekly staple. That said, I still get hungry with alarming regularity. Going to the grocery store is no longer optional. Meal prep is now mandatory in my home. My belly demands satisfaction!

Currently, my credit card of choice is issued by PC Financial. This card allows me to accrue points that can be used to pay for groceries and it doesn’t have an annual fee. I pay the balance in full every month so I never pay interest. If you’re the sort who carries a balance, then stop using your credit cards and pay cash for everything until you’re out of credit card debt.

Accruing points to pay for groceries is one way to lower my grocery bill each month. At a minimum, I earn 10 points for every $1 that I spend on the card. Every time I accumulate 10,000 points, I get $10 in free groceries. By running nearly all of my expenses through my card, I earn a substantial number of points every month. There’s something especially sweet about leaving the store with several bags of groceries and only paying $5.76 for them!

Getting the groceries is only half the battle. The next step is figuring out how to create tasty things for myself.

Step 2 – Cooking at Home Way More Often

Finding recipes I love isn’t that hard. I’m a fan of TikTok and YouTube. My favourite creators are the ones who cook and bake. I’ve discovered some really fantastic things to eat just by watching videos then finding the recipes online. Now that I’m back in the office several days a week, I’m doing a lot more meal prep on Sundays. A couple of hours in the kitchen results in a several meals at the ready during the week – lunches, dinners, snacks, even dessert! One small change to my weekend routine allows me to take my lunch to work instead of spending $20 or more each time I go into the office.

I’ve even taken to making my own muffins for snack breaks. The coffee shop in our building makes delicious food, but their menu isn’t set. Sadly, there’s no way to know in advance if the carrot loaf with cream cheese that I love ever so much will be available from one day to the next. So I’ve started making my snacks. Right now, I’m quite happy with the morning glory muffins from Baker by Nature. They’re so damn delicious! They’re easy to make and I only need one bowl to make the batter. (By the way, Damn Delicious is the name of another fantastic recipe blog that you may want to check out!)

I love chicken and am always looking for new ways to prepare it. A few weeks ago, I discovered how easy it is to make cajun chicken pasta. Like all of my favorite recipes, this one is simple & straightforward. It takes maybe 10 minutes to prepare the chicken before it’s left to marinate in the spices. After a little bit of time in the oven, I pair it with whatever I want if pasta’s not calling to me that day. And so long as I don’t adjust the recipe, there’s always leftovers so I need not cook every single day. Meal prep for the win!!!

Is is my turn to host book club? Then let’s head to the World Wide Web for some appetizer ideas? Surely there’s one or two recipes out there to make finger food that is suitable to please my guests. How about some buffalo chicken pinwheels from Cooking for Keeps?

Same principle applies to sporting events. As a guest, I don’t like to show up with my hands swinging. A few minutes in the kitchen means I always have something to bring. Grey Cup parties & Superbowl Sunday are perfect opportunities to share my favourite appetizer cheeseball from Natasha’s Kitchen.

Even when it’s my turn to bring dessert, I find that there’s no reason to hit up a bakery. I can make something delicious in the comfort of my own home. Whether it’s a marble cake, a bumbleberry pie, or a cookies, I’m ready to spend some time in the kitchen with my handy-dandy KitchenAid stand mixer. In the past year, I’ve overcome my fear of making mini cheesecakes. This recipe for mini pecan pie cheesecakes, also from Baker by Nature is one of the best things I have ever made! If you like pecan pie and you also like cheesecake, then this dessert will make you very happy.

Everyone needs to eat. And we all enjoy eating delicious foods. Don’t let inflation stop you from doing so! Meal prep is an effective tool to minimize inflation’s impact on your wallet. Sure – you might have to spend a little more time at the grocery store and in the kitchen. Big deal! Trust me – you will not regret improving your culinary skills and expanding your repertoire of recipes. Doing so means eating very well while still keeping more of your money in your pocket. And who can complain about that?

Depending on the Kindness of Strangers is Risky

Have you seen the article about the 82-year old Walmart employee who received over $100,000 from strangers so that he could retire?

This story makes me very, very sad.

I’m not sad because people reached out to help this senior citizen , nor am I sad that he retired. No, I feel despondent and a little discouraged because he’s also in a system where working to death is the only option for so many. Had he not been “lucky” enough to be cashiering for a TikTok influencer, then it’s doubtful he would’ve benefitted from the kindness of strangers. He would still be working, just like countless other elderly people whose personal stories go untold online.

Truth be told, I’m not convinced that he was working because that’s what he wanted to be doing at age 82. If that had been the case, then I doubt that he would’ve retired upon receiving the six-figure cheque. He would’ve banked the money and gone back to work – just like all those other people who work because they love their jobs! He wasn’t the CEO of a successful company that he had built from scratch. There was nothing in the story to suggest that working as a cashier fulfilled his most cherished dreams and desires. None of the details of this story indicate that his employment brought him a sense of fulfillment or a belief that he was pursuing his life’s purpose.

Instead, the story was about a senior citizen who was toiling away with no end in sight. I can only assume that he earned just enough to not starve to death but nowhere near enough to ever stop working.

Think about your own circumstances. When will work become optional for you? Do you want to be forced by your personal finances to work at age 82? Or would you prefer that working at that age be a choice based on your passion for what you do?

If it’s the latter, then make sure that you’re building your financial cushion today. The sooner you start, the better. Invested money needs time in the stock market to grow. I’m not in any way suggesting that you sacrifice every single joy that you have in order to save for the future. That’s an awful way to live!

Sixty of seventy years ago, the internet didn’t exist. I cannot blame that 82-year old Walmart employee for not knowing about mutual funds, exchange-traded funds, and other investment products. The information wasn’t as readily available at one fingertips, not like it is today. The search engines, online classes, blogs, robo-advisors, self-directed brokerages, and podcasts from which to learn were not there for him until well into his late 50s and 60s.

The same isn’t true for you. If you can find this blog, then you can find anything you need to know about investing. The information is there. You need only go and find it. Do yourself a huge favour! Make the effort to maximize the odds that working in your dotage is a choice and not a requirement.

Invest some of your disposable income for long-term growth. Spend the rest of your money however you want. Just make sure that you never touch your long-term-growth money. A slice of every paycheque should be invested every time you’re paid. The capital gains and dividends should be automatically re-invested. It won’t happen overnight, and it will likely take years, but you’ll eventually have a stream of cashflow from your investments that can be used to replace your paycheque. Once that happens, then you will truly be working because you want to and not because you have to.

Take steps today so you’re not in the same position as this 82-year old cashier. Depending on the kindness of strangers to fund your retirement is risky. While this man was “fortunate” enough to be helped by a group of online strangers, there are countless others who need the same help but will not get it. This is how our system is designed. There is no onus on anyone to give you the retirement that you prefer. Our legislation provides you a financial floor. You can rest assured that it will not be enough for you to live the way you want in your dotage. Thankfully, there are steps that you can take to minimize the odds of an impoverished old age. It’s up to you whether to follow them.

Buy and Hold – This Strategy Works Exceedingly Well

***** First off, I am not a licensed financial advisor. I don’t hold any of the designations and I’m not an expert in telling people which investments are best for their particular situations. This post is about what has worked for me. It is in no way a guarantee, warranty, or promise that my chosen investment products will work just as well for you.

Now, with that out of the way, let’s get to it…

I’ve used the buy and hold strategy for my entire investing life. This strategy is far less risky than trying to time the market. Market timing as an investing strategy is too intense for my tastes, so I don’t do it. I have little faith in my ability to buy the perfect stock at the perfect time and to also sell it at the optimum moment. In hindsight, I can confidently state that the buy and hold strategy has worked exceedingly well for me. This is most likely due to the fact that I’m something of a passive investor and this method required very few decisions from me. These were the 4 main questions that I asked myself when I started oh-so-many-moons ago.

How much would I commit to investing from every paycheque?
When would I set up my automatic savings plan?
Which exchange traded funds did I want to buy with my automatic savings?
Would I be willing to increase the savings amount each time I paid off a debt or got a raise?

That’s it. Those were the questions that helped me to put my buy and hold investing strategy into action.

Question 1 – How much?

I started my investment journey with $50 from each paycheque. It was easy at the time. I was living at home, so my parents paid for the majority of my life. I had to cover my entertainment with money earned at a part-time job. Everything else was paid for by my folks. That $50 was roughly a third of my bi-weekly paycheque, but I’ve never been a big spender so it wasn’t a hardship.

As I finished school and moved into my career, that savings amount went up. Since I’m a person who drives my vehicles for a very long time, I have years and years between car loans. I kept my Oldsmobile Alero for 8 years, and the loan lasted for 5 of those years. The Alero was eventually replaced by an SUV, whose loan was paid off in 6 months. I kept my SUV for 14 years, and would still be driving it but for knee problems that make it kind of unsafe for me to be working a clutch in traffic. (I still love my SUV and made sure that it went to a good home when I sold it.) Last fall, I purchased my current vehicle in cash. It was a big sum and I didn’t particularly enjoy handing it over, but I really, really, really hate car payments.

Once they were eliminated, former car payments were directed towards my investment accounts. They became RRSP and TFSA contributions. Within a few years of ridding myself of car payments, I was able to make the maximum annual contributions to both my RRSP and my TFSA. No more big rollover balances for this Blue Lobster!

The same thing happened after I paid off my mortgage – my savings amount shot up again! Think about how much you pay for your mortgage or rent. If you didn’t have to pay that every month, don’t you think it would be easier to find the money to invest?

Today, I’m at a very comfortable bi-weekly savings rate, many times higher than the one I started with so long ago.

Question 2 – when to start the automatic savings program?

“Right now.”

In my case, that’s not exactly true. When I was saving my $50 every two weeks, I would actually go to a bank machine and to the transfer myself. (Yes – I’m older than online banking.) I would punch in my numbers and manually transfer the money from my chequing account to my savings account. At the time, I was in high school so I didn’t know about exchange traded funds or mutual funds, or other kinds of investment products. All I knew about were savings account so that’s where my money went.

When online banking became a reality in my life, one of the first things I did was set up an automatic transfer. The money from each paycheque was sent where it needed to go. I’ve had the benefit of using automatic transfers for more than half my life. This means that I don’t have to face the choice of whether to save & invest my money every time I get paid. That question was asked and answered decades ago. No need to ask it again.

As the years passed and I learned more, I put more automatic transfers in place so that each of my priorities and goals could be funded. My RRSP and TFSA contributions were invested in the securities I had chosen. My buy and hold strategy went into action, and I didn’t look back.

Question 3 – What did I buy?

Ah… now we come to one of my biggest investing mistakes. I invested in dividend-paying mutual funds… then, later on, I switched to dividend-paying exchange traded funds (ETFs). The switch occurred because ETFs have management expense ratios that are so much lower than those that come with mutual funds. The management expense ratio (MER) is the on-going cost paid for owning mutual funds and ETFs.

Words to the wise – the MERs on mutual funds are almost always higher than the MERs on ETFs.

I thought of my dividend-paying securities like anything else. Why pay more for the same thing? If I can buy the same 2L carton of milk for two different prices, then I’m going to buy the one that costs less. The same logic applied to my investment products. When I learned about ETFs, I made the switch and didn’t look back.

For decades, I invested my money each month into dividend-payers. My thought was to ensure that I had a steady stream of income in retirements. Dividends receive favourable tax-treatment, i.e. they’re taxed must lower than interest earned on GICs or employment income. Secondly, I could participate in dividend re-investment programs (DRIPs). This meant that all of my dividends were automatically re-invested into buying even more dividend-payers. Compound growth for the win!

Sounds like a great plan, right? Well, I should have been investing into straight equity products. The stock market’s return outpaced what I earned from my dividend-payers. Even with the volatility of a regular stock market, and the crashes that happened in 2001, 2008 and 2020, I would have been so much farther ahead if I had just invested in straight equity ETFs.

Ah well… coulda, woulda, shoulda…

My saving grace lies in the fact that I was using the buy and hold strategy.

Was I buying the wrong thing? In hindsight, yes.
Did I hang onto my investments once purchased, and thereby benefit from compound growth? Again, also yes.
Has the buy and hold strategy worked wonders for me despite my big mistake? Yes!

Question 4 – did I increase my savings amount over time?

You bet your sweet patootie I did!

When I was younger, I had a lot more debt. I graduated with student loans, and I’ve taken out 2 car loans in my life. On top of that, I had a mortgage. My employer has given me raises over the years, but none of those matched inflation.

The “extra” money for my buy and hold strategy always came from not replacing one debt with new debt. Once my student loans were gone, that money was available to be invested. As my car loans and my mortgage were paid off, that money was also re-directed towards my investments.

Now, I’m going to admit that I used part of each former payment to bolster my day-to-day living too. I think I was paying $650 or $750 every two weeks for my mortgage way back in 2006. (And I realize that those numbers are downright paltry compared to the mortgage payments some people are paying today.) However, at the time, they were a big chunk of my paycheque so I was glad to see them go.

At the time, I chose to send $500 of each former payment to my investments and the remainder – whether $150 or $250 – stayed in my chequing account for the little extras. In short, each time I paid off a debt, I re-directed the majority of that former payment to my wants while the bulk of the payment went to my investments. No one is promised tomorrow, but that’s no excuse not to save for it.

The buy and hold strategy has worked exceedingly well for me. I have no reason to believe that it won’t work for you so long as you have a little bit of money to invest. You need not be an expert to start investing. It’s okay if you learn along the way. I did. I had to make tweaks here and there, as I grew more knowledgeable. They key was to start and to never stop. If you have a few bucks to invest each month, you should do so.