7 Foolproof Ways to Save Money



Guest blogger: Lora Grant, CFP, FCSI | Financial Planner, Investment & Retirement Planning

  1. Be mindful – stop before you buy and ask yourself whether this purchase is REALLY something you need or want. Impulse buys can satisfy a momentary itch but that can fade quickly.
  2. Use the “B” word: budget. Think of your budget as taking control of your money in terms of your priorities and goals, not in terms of denial. You know what you earn and you need to make decisions on how you use that hard earned money.   If something is important to you, prioritize and plan to spend money on it. If you want to go south for a winter escape vacation, put money aside for it before you go. Calculate your cost, put aside a bit every pay cheque, then go and enjoy yourself, knowing that you aren’t coming home to a big bill. It will make your vacation even sweeter.
  3. Love those logos? Does a “Coach” purse or the latest cell phone or the newest model car make your life significantly better? What are bragging rights worth to you? If it’s important, see point .2
  4. Frugal is in fashion. Find cheaper ways to do the things you love. Go to the movies on cheap Tuesdays, meet a friend for lunch or brunch instead of dinner, get together with friends at home for a potluck dinner instead of going out to a restaurant. Reduce the number of times you treat yourself. If you can’t give up a 4 star dining experience, indulge less frequently, making it even more special- and save money.
  5. Get the cash habit – not debit, not credit. Withdraw enough to cover your planned spending for the upcoming week and avoid putting purchases on plastic. You are much more aware of your actual spending when you watch your dollars disappearing from your wallet. You’ll end up spending less on things you don’t really care about.
  6. Beg, borrow or (get it for a) steal: Don’t always buy things, even if you need them. Need a power washer for a weekend project? Do you have to own it or could you borrow it from a friend or neighbour who has one? Could you rent it? If you want to own it for a long time, does it have to be new? I know a guy who wanted a fancy receiver for his home entertainment unit – new was around $2,200 but by looking on line, he found the previous model for $800 used. Works like a charm. Your local library is full of books, CDs, DVDs just waiting to entertain or enlighten you. How many books do you read more than once?
  7. Only use your credit card when you’ve got the money to pay it off: When you have a larger expenditure you need to make, like a major appliance or plane tickets, use a credit card for the transaction, but pay it off immediately. Often there is an extended guarantee available by using your credit card or you get loyalty points but don’t pay a premium to your credit card company by carrying a balance on your card. That increases the amount you actually pay for the item by the interest you rack up. Take advantage of the perks your card offers you but pay it as soon as you buy the item and then you get the pluses without the minus of paying high credit card interest.


A special thank you to Lora for taking the time out of her busy schedule as a Certified Financial Planner to write today’s blog post!

New Pipelines in Limbo: Invest in Rail Cars or Railroads?


The gut in crude oil is filling up storage tanks across North America. Producers are hoping to sell their crude oil in the future at higher prices. The growth in storage capacity is partly due to increases in crude by rail shipments which requires more staging than by pipelines.

A storage boom in Alberta’s is underway as oil sands producers are pumping out record volumes of crude. Conoco Phillips, Husky Energy and Imperial Oil are set to start-up new projects from investments made years before oil prices hit the skids. Gibson Energy announced in April that it was adding another 900,000 barrels a day of tank storage capacity in Hardisty, Alberta. Keyera Energy and Kinder Morgan also announced that they will build as much as 4.8 million barrels of new oil storage in Edmonton under a 50 -50 joint venture with a potential to expand to 6.6 million barrels.

Current pipelines are running at near capacity and can’t handle all this new production which has played a role in the deep discounting of Alberta’s oil. Eventually, railroads (CP & CNR) will benefit from all this upcoming crude production.

As mentioned in my last post, railroads will have to update their tank car fleet to meet new government standards due to public safety concerns. Approximately 60,000 CPC 1242 tanker rail cars need to be retro fitted plus 100,000 Dot 111 have to be either replaced or retro fitted. A new braking system may be also needed in the near future. There are three-rail car manufactures listed on the U.S. stock exchanges who should benefit from the new regulations.

  • Greenbrier Companies (GBX)
  • American Railcar Industries (ARII)
  • Trinity Industries, (TRN)

Crude oil by rail shipments have skyrocketed from just over 20 million barrels in 2010 to more than 373 million barrels transported in 2014. The vast majority of crude oil by rail originates in the Midwest, primarily in the Bakken region of North Dakota. Even if the Keystone Pipeline was eventually built, it could only handle about 830,000 barrels per day. The Bakken region is projected to produce  2 million barrels of oil per day which would be transported by rail.

I am in no rush to buy railroads which have been falling in price lately. Investors are worried that slow economic growth may continue during the 2nd quarter of 2015. Low commodity prices  and the projected additional costs to meet new government rail car regulations will also effect the bottom line of railroad stocks. Remember the investment lesson of: Don’t Catch a Falling Knife & Dead Cat Bounce , you may want to wait for the railroads to form a bottom.

Before you buy, the price of crude oil needs to stabilize and hedge funds have to reduced their bets on the downside. You also have to believe that economists are right that economic growth will rebound in the second half of 2015 along with the price of crude oil. Under these conditions, both U.S. and Canadian railroads could be a buy.



In the meantime, I recommend doing some research on rail car manufactures who will be busy with a lot of new orders from railroads. Keep in mind that railroads have time limits to meet new rail car standards ranging from 2 to 5 years.

When Warren Buffett Speaks the World Listens!


It’s been 50 years since Warren Buffett and Charlie Munger took control of Berkshire Hathaway and around 40,000 shareholders made the trip to this year’s annual meeting. The Oracle of Omaha sat on stage with his panel of experts to answer questions.

If you are a fan of the Mr. Buffett, you can find some interesting video interviews on Monday’s “Squawk Box” which are on the CNBC web site. I took some time yesterday to listen to Mr. Buffett’s views and here is what I found thought-provoking.

Stocks are cheaper than bonds, which are “very” overvalued,” he said. “If I had an easy way, and a non-risk way, of shorting a lot of 20-year or 30-year bonds, I would do it. But that’s not my game. It can’t be done in the quantity that would make sense for us.”

Buffett said he has no idea when the Fed might move. “They’ve fooled me so far. So I’ve been wrong,” he said. “I would have thought by now you would have seen much higher rates than we have now, which is essentially nothing.” “If you have negative rates in Europe, I think there a lot of consequences to raising rates significantly here,” Buffett said

He added that the Fed should stay low as “Europe keeps following the present policies.”

I found some of his comments very entertaining regarding the negative European bond yields. “We have never seen this movie before” Plus “We are not in Kansas anymore”  referring to Poland which issue bonds with a negative yield.

The billionaire Buffett said the stock market would be viewed as “cheap” now if interest rates continued to remain low, (the next 5 to 10 years) but not necessarily if rates normalize. He admitted, there have been only two times that he found the stock market to be very cheap, 1973-74 and 2008-09 and extremely over valued during 1999-2000! Going forward, he has no idea regarding future stock market valuations.

When it comes to investing, Mr. Buffett breaks some common investing rules followed by Wall Street advisors who recommend using diversification and asset allocation to reduce risk. Berkshire Hathaway has 60% of its holdings in four stocks.

  • IBM
  • American Express
  • Coca-Cola
  • Wells Fargo

It’s hard to argue with success, Berkshire Hathaway class A share has handily beaten the S&P 500 returns as illustrated by the chart below.



Some Warren Buffett Quotes on Investing:

  • “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
  • “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
  • “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
  • “Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.”
  • “If a business does well, the stock eventually follows.”
  • “Price is what you pay. Value is what you get.”
  • “Time is the friend of the wonderful company, the enemy of the mediocre.”

Warren Buffett is a businessman who is also an investor. I have often read that Buffett evaluates stocks as if he is buying the whole business.

I am not confident enough to invest 60% of my funds in only 4 stocks but there have been times (like right now) when I have disregarded both asset allocation and diversification strategies.

Shouldn’t Cheaper Oil Help the U.S. Economy?


The first-quarter gross domestic product report surprised Wall Street economists once again. At one time, economists had been predicting a 3 percent growth rate. The Wall Street consensus was an optimistic 1.0 percent heading into Wednesday morning’s data release. The end result was an anemic .02 percent overall gain in first quarter GDP growth.

Worst among current economic misconceptions was the notion that the big savings at the gas pump would propel U.S. GDP to higher levels. Rather than spend the savings at the pump, consumers have been saving that money and actually pulled back on their spending pace.

credit card

Actual spending increased just 1.9 percent in the first quarter, a steep drop-off from the 4.4 percent gain in 2014’s fourth quarter and the worst rate by a fairly wide margin since the same period a year ago.

The spending slide was “particularly disappointing given that the decline in energy prices generated a massive 6.2 percent annualized jump in real disposable income,” said Paul Ashworth, chief U.S. economist at Capital Economics, in a report for clients.

Personal savings jumped to 5.5 percent from 4.6 percent. If consumers didn’t spend their savings while oil was falling, it’s hard to imagine them parting with their cash now that gasoline prices are rising again. The price for a gallon of regular has jumped 15 cents just over the past two weeks, according to AAA. That has happened as benchmark West Texas crude prices have surged about 28 percent over the past three months.

With the winter fading away, albeit slowly, “we would expect to see signs of a pickup in consumption growth emerging soon,” Ashworth added, expressing widely held hopes among economists!

Wall Street economists are sticking  to the story line that higher levels of consumer confidence will translate to stronger growth ahead. They expect to have a bounce back in GDP growth in Q2 and are hoping for a full year 3 percent growth rate.

The weak first quarter economic numbers points to a delay in the Fed raising interest rates any time soon. The March’s payrolls number fell off sharply from their previous strong trend with just 126,000 new jobs.

The Federal Open Market Committee on Wednesday offered no changes to its zero interest rate policy. Not only did it not hike rates, it also removed all hints for what may lie ahead. Calendar references were deleted completely from the post-meeting statement.

The challenge for investors is to what  extent  should they look past first quarter weakness. Usually growth that is not recorded in the first quarter  appears in the second quarter where growth runs above normal. Investors do not like uncertainty, both stocks & bonds have shown signs of weakness this past week.

I am cautiously optimistic that the U.S. economy will get back on track. First quarter data since 2010 has been especially depressed, averaging a paltry 0.62 percent while the economy grew 2.3 percent. The average is heavily affected by two quarters of negative growth, including a 2.1 percent decline last year.

That being said, I have increased my cash position in my investment accounts waiting for some stock market bargains to appear.