Invest in memories, not stocks

            At the tender age of 12, I received a copy of The Wealthy Barber.  Essentially, it’s a book on how to become a millionaire by the time you die… or if you’re lucky, by the time you retire.   

            I was quite a young capitalist at the time because I took it to heart and proceeded to invest my summer earnings in mutual funds.  I was advised to invest in Asian and Latin American funds because of how well they were doing at the time.  My mutual funds advisor must have adhered to the old adage, “Buy high, sell low” because that’s exactly what he did. 

            My dad and I frequently debate over whether to invest in the markets or not.  Our experiences have not been entirely positive.   When I was about 25 and I had a whole $1,000 invested, my earnings were great.  Now my investments are a little bigger and well, we all know what’s happened in the last few years. 

            But if you’re watching the stock market day to day to see how your long-term investments are doing, you probably shouldn’t be investing.  The stock market is a terrible beast that cannot be tamed.  It’s irrational and run by men who think they can outsmart one another.  If you’re nearing retirement, you may be better off to invest in something more conservative.

            But if you’re young (by this I mean under the ripe age of 50), don’t pay any attention.  Over time, the stock market is still one of the easiest and productive ways to invest cash.  And I don’t think I’m just toting the financial advisor’s line here.

            Because if there’s someone I really trust, it’s the Wealthy Barber, himself.  In his second Wealthy Barber book, David Chilton claims the stock market is still one of the best ways to invest.  Just don’t expect miracles, invest over the long term, avoid high investment fees where possible, and don’t try to outsmart the markets by investing yourself.

            But remember, I didn’t advise you to do anything with your money (it was Mr. Chilton).  I was actually pleasantly surprised that investing wasn’t the central theme of his latest book.

            It’s really about being content with what you have.  What a refreshing view.  He advocates for spending less than what you make, instead of spending more.  Completely the opposite of what most Canadians are doing right now.  The average Canadian’s debt is now 150% relative to income.

            It’s been said over and over again in some form or another that material things don’t bring happiness.  Yet we’ve been brain-washed to believe that they do.  Most ads don’t talk about how their products may cause feelings of emptiness, depression and unfulfilled desires.

My new child-sized TV

            Chilton talks about our society being consumed by consumption.  Material things tend to cause us more stress than anything.  While it’s true that they can provide satisfaction to an extent, the thrill is usually short-lived. 

            When I bought a big-screen HDTV three weeks ago, I felt it would bring some fulfillment.  And it did.  And my six-month get-every-channel-you-could-ever-want promotion adds to that fulfillment.   But over time, I know it won’t improve my life or make me any happier.  I get far more joy walking 35 minutes home from work in minus 15 degree weather, knowing I not only beat my bus, but saved $2 while doing it.  Take that, city transit!

            Spending time with family, exercising, and working/playing outdoors will bring much more joy to your life than any big-screen TV (unless, of course, you’re watching with the family outside while exercising).

Dad doing the Lambeau leap

            Interestingly, Chilton writes that it’s money spent on experiences, not things, that gives us the biggest bang for our buck.  Buy something, and you lose interest after a while.  Pay for an experience (like a 16-hour trip to watch the Green Bay Packers), and you make memories that will last forever.   

Like when my dad streaked across Lambeau Field in the fourth quarter in front of 73,000 screaming fans.  Now that was a memory.

            A made-up memory, yes, but one that has value as well.

D’s doomsday report

          Time to delve into a topic I enjoy most: the end of the world economy.

          Okay, I jest a little.  I’m not suggesting it will necessarily be the end of the good life as we know it.   But our society is so focused on the present that we often lose sight of some troubling spots on the horizon.

So if you enjoy a good doomsday report, please, read on!

1. The debt bomb.  Canadians now have the highest debt relative to income ever, at 150%.  We even beat out the debt-loving Americans. Bank of Canada governor Mark Carney has repeatedly warned that Canadians are taking on too much debt.  And he has credibility.  He’s now chairman of the global Financial Stability Board, the entity in charge of preventing economic collapse worldwide.  Plus he’s one cool dude (seriously, have we ever had a cooler governor?)

Housing prices in Canada have reached a new peak.  Just a few years ago $200,000 could buy you a mansion in Saskatchewan – now it buys you an 800 square foot bungalow.  Many fear what a 2-3% increase in interest rates would do to home owners.

Government debt is another hot topic that’s currently wreaking havoc on Europe.  A full-scale collapse of the Euro and/or a market crash could result in the next year.  How long before the same situation faces the United States?  They know they can’t keep borrowing forever, yet they refuse to increase taxes or confront an issue that will keep getting bigger…

          2. Health care.  All industrialized countries, whether offering private or public care, will face a huge task of addressing health care costs in the next 10-30 years.  As baby boomers retire, their frail, aging bodies will need drugs, therapies and maybe even bionic limbs (hey, you never know!)  This will come with significant costs, but this unfunded liability is rarely acknowledged by governments today.

          3. Environment.  The problem with climate change is that its affects are projected so far into the future that we have trouble addressing them today.  While I think reducing emissions worldwide is nearly impossible, we should be investing much more into research and technologies to mitigate the effects of climate change.

          Another frightening issue that gets much less attention is the health of our oceans.  Over-fishing, chemical pollution and warmer water temperatures are having a devastating effect on earth’s largest ecosystem.  I’m no expert on what this all means, but we’ve seen the effects of a failed fishery on Canada’s east coast.  This kind of economic/environmental collapse is playing itself out across the globe.

          4. The end of oil.  This will probably have the biggest impact on our day to day lives over the next half century.  We won’t see the end of oil in our lifetimes, but we’ll see the end of cheap oil.  Despite all our advances in technology, we still have no one solution to solve our energy problems.

          Perhaps there will be a seamless transition from our oil-dependent ways to other alternatives.  More than likely, we’ll have to live with less as we trade in our SUVs for hatchbacks, and hopefully not horses (although my dad wouldn't mind).  As economist Jeff Rubin has noted, it was high oil prices in 2008 that precipitated the global recession and high oil prices that will continue to hinder a recovery.  With a lack of cheap energy, anemic economic growth may become the norm.

          Those are my doomsday predictions and I’m sticking to them!

          Please don’t let it ruin your day.

Delving into the imagination of a child

Raising a child reminds me of the imagination I once had.  I think I still have it, but it seems most of it’s been warped by the grim realities of adulthood.

          Our daughter is four, and her imagination has reached a new pinnacle (we certainly hope this is the peak).  Her pretend world is encroaching upon reality.  Whether we’re eating, reading, or even shopping, she is in constant play mode.

          And while we tried to steer her clear of the princess theme toys, she has now officially entered into the princess play world.  I am the king, my wife is the queen, and she is the princess.  So far this has not involved extensive costuming.  It does mean having royal meals, however, and referring to one another as “your Highness.”

          This is actually a welcome change from the animal role-playing that has been played out over and over again this past year.  Playing mommy and baby monkey, cat, dog, and goose can only go so far.

          While playtime can get old quite quickly for adults, I do enjoy the improvisation.  You never know what a child will come up with.

          A couple months ago, for example, we were playing a fascinating game of mommy and baby kittens, when I asked why one kitten was so much smaller than the rest.  “Didn’t you feed me like the rest?” I asked in my cutest little kitty voice.

          “But I did feed you,” my daughter responded, in her most serious mommy voice.  “I fed you alcohol.”

          Lately, her play themes have involved a lot of death and reconciliation.  Once such plot involves her playing the role of a gosling who just lost both of her parents.  They were driving in a car when they smelled a skunk, apparently contracted cancer from the incident and died a terrible death.  Consequently, she had to be adopted by her uncle goose (played by yours truly).

          Another favourite play theme is Bambi, where she plays the role of Bambi and I, a handsome young buck (why not??).  In last week’s plot, we found the pup of a hunting dog whose parents had abandoned him.  The poor pup was hungry, so being very accommodating deer, we searched for dead deer (specifically, deer tummies) to feed our new friend.

          You never know where a child’s imagination will take her.  And when night falls, those with the most active imaginations also tend to be the most fearful of the dark.  This is, pardon the pun, the dark side of our child’s over-active imagination.

          Let’s just say we’ve reached the point where a light in the hallway is no longer sufficient to ease our daughter’s concerns that there are monsters hiding in every crack and crevice of our home.  (Darn you, Hallowe’en!)  It’s a terrible thing to have to live with these fears, but we hope, again pardon the pun, that there is light at the end of the tunnel. 

          In the meantime, we use every tool at our disposal to ward off her fears, including heavy religious talk.  Although this doesn’t always work either.

          “What does God do to monsters?” my daughter asked the other night.

          “Well, they’re not real, so he doesn’t have to do anything.  But he’s still protecting you,” I respond.

          To which she says, “Yah, I know, but in pretend world, what does he do to the monsters?”

          For a brief moment I envision a flame-filled scene of chained creatures pounding the earth with pickaxes.

          “Um,” I respond, hesitantly, “I think he puts them in cages.  Except for the good ones – they go to heaven.”

          “Daddy,” she retorts, “There aren’t any good monsters.”

          And with that, I turn out the light.

This check engine light of mine

            I don’t know who invented the “check engine” light, but it’s gotta be one of the greatest failures of modern auto engineering.

            It seems that this little light is the catch-all for all things that can possibly go wrong with your car.  As a mechanic told me a couple weeks ago, “There are about 700 different things that can turn this light on.”

            So when it goes on, you’re always left wondering.  You don’t know if your car’s engine is about to seize or if you didn’t screw on your gas cap tight enough.  That’s helpful.

            But it does give the mechanic a chance to hook up his little computer to your vehicle and find something wrong with your car.  And that little hook-up alone costs between $50-100, depending on where you go.

            Or you can buy your own little computer for about $100 and diagnose the problem yourself.  This may be an option I’ll consider, as my vehicle’s check engine light has gone on four times in the last year.

            Now as I understand, most of the time when it comes on, it’s an emissions issue.  Due to higher emissions standards in some jurisdictions (definitely not Saskatchewan), this light will tell you if your car needs a new part because its exhaust is no longer meeting environmental standards.  Fair enough. 

But just how sensitive is this indicator?  I’ve been told that even brand new vehicles have this issue, so perhaps it’s a little too sensitive. 

Another thing – if it relates mostly to emissions, why call it a “check engine” light?  The name makes it sound more serious than it is.  It doesn’t mean your car’s engine will die in the next few minutes.  You can typically drive for months, if not years, with no issues.  But apparently, if it starts blinking, that’s a whole nother story – you might want to pull over to the nearest Canadian Tire.  This just adds to the confusion.

            If it’s not blinking and smoke isn’t coming out of your hood, it may not be worth the cost to fix.  It’s annoying to see all the time, however, so consider a made-in-Saskatchewan solution: apply a trimmed square of electrical tape carefully over the light.  So long as it’s not covering other indicators that could be important (i.e. your check oil light), you’re good to go!   You won’t even notice it’s on.  My parents have used this low-cost solution for the last two years, with no ill-effects.  Apparently, their mechanic has diagnosed their check engine light problem as untreatable, but thankfully, not terminal.

            And so the next time my check engine light comes on, I might just apply the electrical tape solution. 

Call it my snubbing of advanced auto engineering.