Some money saving tips for cruises

My wife and I just returned from a 10 day Caribbean cruise. It was only our third cruise but it was the first time that we booked an inside cabin. Not only did we save money but the darken cabin made our sleep time more restful. We didn’t miss having a baloney as there were plenty of places on the ship to sit and enjoy the view. (Pack a night-light for your night-time bathroom visits)

Avoid specialty restaurants

Most cruise lines have expensive cover charges for fine dining at their Italian, seafood and steakhouses. It doesn’t make economic sense to book a package but look for deals on embarkation nights. You may get a 2 for 1 deal or a free bottle of wine if the restaurants are not busy.

Don’t automatically buy a beverage package

Most people won’t keep up the drinking pace needed to break even on these packages. These packages range in price from $8.00 per day for sodas to $55 per day for alcohol. Read the fine print, there could be some surprising restrictions such as per-meal or per-day caps and most are not transferable.

It’s often cheaper to buy a bottle of wine than a few glasses but what do you do if you don’t finish the bottle? Cruise ship waiters can mark the bottle with your room number and save it for another night or you can bring it back to cabin.

Go on your own on shore

Many people save money by booking independent shore excursions and sightseeing tours. It is important to have cell service at the port of call in case of problems like traffic jams or vehicle breakdowns which could cause you to miss the ship’s departure time. The main advantage to booking the cruise line’s own tours is that, ideally, the ship will stand behind its quality, and if the tour runs late, the ship will wait.

Seek spa deals by choosing your time wisely

Most of the time prices for onboard spa treatments rival what you would pay at luxury resorts on land. There are exceptional deals that could save you as much as 30% by booking your treatment on embarkation and port days. Plus sometimes, the spa will offer a discount near the end of your cruise.

Steer clear of photo galleries

Many ships employ their own onboard photographers. You can purchase official pictures of your family embarking, eating, dancing and all dressed up for formal night for $20 to $30 per 8-by-10 inch image. Ask your fellow passengers to take some pictures for you using your own camera or cell phone.

Avoid onboard internet

Internet access and Wi-Fi are the more expensive amenities at sea and prices range from 55 to 75 cents per minute. Satellite internet onboard is very slow and it could cost you as much as $7.00 just to read and respond to one email. Can’t live without internet, many ships will offer extra-minute specials if you sign up on day one. (Our cruise line offered 40 free minutes)

Laundry, pressing & dry cleaning

Cruise lines will gladly do laundry for you with prices starting at around $2.50 per item. Instead use the self-service laundry facilities which will only cost you around $5.00 per load. They usually feature an iron and ironing board in addition to washer and dryer. You could also pack a steamer to get rid of wrinkles or hang them in the bathroom when you have a shower.

Tips to enhance your dining experience

We always pick opening seating for our main dining room. It allows us the flexibility to spend more time in port, catch an onboard show or activity. We usually go for shared seating which allows for more interesting dinner conversations and the opportunity to make new friends.

In addition, you are not limited to one appetizer, entrée and desert in the main dining room. You can order two entrees or three desserts if you choose. You can also order appetizer-sized portions of entrees as starters or order a few appetizers for your main meal. It’s a great way to try new foods you’re not sure you’ll like (escargot, anyone?).

Don’t miss the last formal night which offers some specialty dishes like Lobster or Beef Wellington. You don’t need a tuxedo or fancy evening gown to enjoy formal night. However, men do need to pack a jacket & tie and for women a skirt & blouse or cocktail dress will do just fine.

3 Key Market Drivers Turning Some Bears into Bulls

      bear2   bull-party

In January and early February there were three major negative forces affecting the market. One was the total collapse of oil prices down to $26 a barrel. The second was a very real threat of a big devaluation from China. The third was the Fed hiking interest rates four times in 2016!

Those three deflationary forces would be very negative for stock market returns around the world. Six weeks ago, investors believed that the world was coming to an end. Some market experts were even taking about an increased possibility of the U.S. economy falling into a recession.

Why some market bears are getting bullish?

  1. The turnaround in the price of oil has been dramatic, raising almost 50% in six short weeks. Fears of massive credit defaults in the oil patch has been greatly reduced. Therefore, worries of a banking crisis have decreased and prices of bank stocks have recovered along with some energy names.
  2. Currency speculators and U.S. hedge funds have been heavily shorting the Chinese Yuan believing that devaluation is just a matter of time. China’s battle with speculators is expected to be very prolonged. Chinese leaders have assured Washington that it would keep the yuan stable after the U.S. approved adding the yuan to the International Monetary Fund’s basket of reserve currencies.
  3. The Federal Reserve has decided to halve its outlook for interest hikes to two from four by the end of this year. The announced has weaken the value of the U.S. dollar which helps increase the price of commodities including cruel oil. It also weakens the value of the yuan since 60% of its value is pegged to the U.S. dollar.

The chart below illustrates the price movements of the bank and energy ETFs compared to the S&P 500 since Feb 11 when the price of WTI hit a low of $26.19!


I am not convinced that we are out of the woods yet

  • Iran is a big wild card in the oil market. Iran has already stated that they will not agree to a production freeze until they increase their production back to levels before sanctions were imposed. Iran wants to add two million barrels of cruel oil a day to an already over supplied market. Plus there is over 500 million barrels of oil still in storage.
  • The Chinese leaders are slowly realizing that they have little control on how their citizens spend their new-found wealth. Converting their economy from being export driven to domestic spending is going to take a long time.
  • Negative interest rates in both Europe and Japan have not been successful in boosting economic growth.
  • U.S. consumers are not spending their savings from lower energy costs. Economy growth after a typical recession is usually a lot higher than today.
  • A large part of the rapid rebound in stock prices could be due to short covering by hedge funds.

I am not an expert on charts but the two-year chart below of the S&P 500 appears to have lower highs and lower lows. Plus I don’t like the fact that the 50 day moving average is below the 200 day moving average.


I believe that the roller coaster ride isn’t over yet and there could be a better buying opportunity very soon. Long term, I still prefer stocks over bonds.




Beware of identity theft & tax-return fraud

Tax season is the one time of year that a lot of sensitive personal data is on the move. Employers and financial institutions are sending you tax documents, you are then transmitting them to your accountant or using tax filing software. Take care to safeguard that data every step of the way. Tax season is already stressful enough, individuals increasingly have to contend with the possibility of fraud or identity theft involving their tax return. Tax return fraud is a huge problem for U.S. citizens.

Tax-return fraud is a mounting problem. In 2013, according to a Government Accountability Office report released last year, the Internal Revenue Service thwarted $24.2 billion in fraudulent refunds requested — but paid out $5.8 billion.”

Scammers can easily whip individuals into a panic, aggressive efforts to steal data and cash by masquerading as IRS officials. Some scam artists try to convince you that you are a victim of a fraudulent return and need to verity your personal information. Others threaten audits, fines, arrests and all manner of other dire consequences to victims who don’t wire cash immediately or click-through a link to confirm their personal information.

Here’s a conspicuous flaw in the system as currently set up: To file a tax return electronically, all someone needs is a name, date of birth and an SSN. The IRS accepts tax filings as soon as Jan. 1, but employers aren’t required to submit correct employment information to the agency until March, by which time roughly half of all refunds have been paid out. (For that matter, the IRS doesn’t begin matching employer-submitted data to tax returns until the summer.)

You might see official-looking seals and language in an email that have been pulled from legit IRS communiques, or hear background noise in a voice mail meant to resemble a call center. Don’t click on any links in emails or call back any numbers left for you in a voice mail. Pushing calls and emails are the easiest tax fraud to avoid. Your best defense, keep calm and think it through.

“The IRS and the CRA have said repeatedly that its first point of contact with you is going to be by mail. Not an email and not a phone call.”

The agency has suspended processing of 4.8 million suspicious returns so far this year, worth $11.8 billion, the IRS said in an email to CNBC. Among that number are 1.4 million returns with confirmed identity theft, totally $8.7 billion.

Additional pre-cautions:

  1. Not receiving an expected form could be a red flag of old-fashioned mail theft.
  2. Make a check list of documents or forms with the approximate date that they should have arrived.
  3. Use a secure file service to transmit documents electronically to your tax preparer
  4. Avoid sending tax information by email
  5. Personally drop off documents to your tax preparer.
  6. Delays in receiving last year tax refund could signal that you could have been targeted by scam artists.

When in doubt, your best bet is to hang up. Contact the entity directly through a phone number that you know is legitimate or by email. Even if you’re not a victim, be aware that government authorities have put in place safeguards to thwart tax fraud which could delay your refund or snarl your return.

This post was inspired by my daughter who reminded me that sending tax information via email isn’t very safe.


Relief Rally in Oil or an Uptrend?

crude oil

In the past month, WTI crude oil has rallied more than 25 percent, taking the commodity into positive territory for the year. The fundamentals haven’t changed, inventories are still full and the build-up may continue as refineries close down for maintenance. The rally started after Saudi Arabia, Qatar, Venezuela and Russia said in mid-February that they would leave supply at January’s levels if there was enough support from other producers.

Market sentiment has changed as more investors feel that the price of oil has made a bottom. John Watson, chairman and CEO of Chevron, shared his views on the energy market and oil prices in an exclusive interview with CNBC.

“We think we’ll be growing production into a rising market,” Watson said Tuesday. He added, “I think we’ve seen the bottom in oil prices.”

Oil buying was encouraged by talk that OPEC producers want a higher anchor price. Major news media reported that OPEC is privately talking about a new oil price equilibrium of $50 a barrel.

“While it may not be an official target price, you’ll hear them saying it. They’re trying to give the market an anchor,” said Gary Ross, the founder, executive chairman and chief oil soothsayer at New York-based consultancy PIRA.

The volatility in the oil market has been ideal for hedge funds and speculators to make some quick profits. It takes very little capital to buy oil contracts and the price movements have been spectacular. Market watchers believe that the majority of the price movement in oil has been due to short-covering.

Short positions in West Texas Intermediate crude by 15 per cent in the week ended March 1, according to U.S. Commodity Futures Trading Commission data. Speculators’ short positions in WTI fell by 25,639 contracts of futures and options combined to 150,718, the biggest decline since April 21, CFTC data show. Longs, or bets on rising prices, fell by 753. The exodus of bearish bets resulted in a 24,886-contract jump in the net-long position.

Traders seem to be pinning expectations for oil prices to one specific number now that crude has staged an impressive comeback this year. It’s going to take a close above $40 to reverse a long-term down trend according to many Wall Street technicians. The chart watchers believe that there is another wave of pain for the commodity. Most view this recent run up to be just another relief rally. They are looking for one more final washout, somewhere below $30, which would be a final capitulation.

Big bets by option traders

Options that allow their owners to buy crude oil for $40 or above have seen notably more buyers and sellers compared with all other strike prices. Calls that expire in May and June have higher levels of open interest at $40 than at any other level. On Monday, call contracts that expire in April saw the highest trading volume in the $40 strike

Millennials using a risky ETF to speculate on oil

According to online discount broker TD Ameritrade, Velocity Shares Daily 3x Long Crude ETF (uwti) was one of the top 10 stocks traded by millennials in 2015. What makes this ETF a risky product is the extreme volatility due to triple leverage. The leverage amount in UWTI gets reset each day which can make for some epic days when oil goes up.

However, it is a costly product because it suffers from roll over costs that come from tracking front-monthly oil futures. Although, UWTI was fifth on the list of stocks millennials were buying, it was fourth on the list of stocks that they were selling.

cautionThe Fed meeting next week could put the rally in oil on hold if their comments turn hawkish. Increasing U.S. interest rates will strengthen the value of the U.S. dollar which could cause the price of oil to fall. The meeting of OPEC and non-OPEC members to freeze production may not even happen.

Disclaimer: This content is provided for informational purposes only! It is not to be viewed as a recommendation or endorsement of any particular security.


Seven helpful hints to avoid getting audited

The majority of tax payers’ efile their tax returns using tax preparation software. It is really cheap and easy it use. It also increases your odds of receiving an audit notification letter. The tax department wants to reduce the amount of paperwork that it receives so it will spot check around 20% of all returns. They will send out letters asking for some of your receipts. 

No need to panic but it is very important to avoid red flagging your account by making unintentional errors. A simple error of entering the same receipt twice may increase the chances of receiving an audit letter the following year.

What can trigger an audit?

Home office, hobby claims

Blurring the lines on your home-based business expenses is never a good idea. Remember, you can’t claim home/office expenses if your work area is not used exclusively for business. Also keep in mind that a hobby — such as reselling antique rocking chairs on eBay — remains a hobby and is not a “business” if you haven’t made any money on it this year … or last, or the 5 years before that.

Business Use of a Vehicle

The tax man is very skeptical of claims that taxpayers are using their cars 90 percent for business. Two of my friends are currently going through an audit regarding their deductions for vehicle expenses. In Canada, you must keep a mileage log, the CRA requires actual gas receipts and doesn’t accept the amounts on credit card statements.

Reporting large losses

Auditor’s ears prick up when they hear that you’re claiming a big loss. File paperwork for a business or trading loss often enough and expect to attract their attention. Losses on real estate holdings also hold particular appeal for auditors.

Working in a high-fraud field

Auditors reportedly show extra interest in tax returns from people working in certain fields of employment that are statistically more prone to fraud or at least fudging figures. These include home renovations, commission sales people, self-employed and restaurant servers.

Installment payments

If you are consistently underpaying your taxes year after year and can’t offer a good explanation as to why, you might get the tax man wondering if you deserve closer scrutiny. Don’t ignore instalment requests or reminders, paying them something is better than nothing at all.

Questionable deductions, credits

Claiming a lot of implausible or questionable deductions and credits on your tax return will raise eyebrows. Among deductions, it seems home, charity and alimony claims spark the greatest auditor interest.

Missing income

Thinking about not reporting substantial freelance earnings, tips, etc., especially if whoever provided the payout may be reporting the amount to the federal government. Don’t forget about your foreign bank account or earnings? Just because you earned or saved it overseas doesn’t mean it’s “free money.” Its better to be safe than sorry.

Having multiple sources of income or making too much

The more you make, earnings that fluctuate a lot or if you have a complicated return creates more interested by auditors in your return. According to Intuit TurboTax, 12% of millionaires earnings more than $1 million annually are getting an audit notification letter. (I would love to have that problem)

Just remember to keep good records, educate yourself regarding the tax code and when in doubt consult with an accountant.