Bruce Joseph

1. Most mainstream analysts, economists and researchers are on Chartered Bank payrolls therefor their interests are in line with that of their shareholders and not  the well-being of Canadians. The biased picture they paint must focus on benefits accumulated by increased mortgage debt as the true disclosure of housing costs would hurt the banks billion dollar bottom lines.
2. People get sucked into bidding wars on houses because of the illusion of scarcity. The illusion that they will miss out on this once in a life time deal creates a strong emotional feeling of both fear and greed. People in this state should not have any ability to sign legal documents as it is one step from insanity. A competent advisor would recommend taking a deep breath and ensure the decision is made with a sound dosage of logic and reason.
3. I believe buying downtown condos to target the elderly who have maxed out the joys of home ownership sounds great in theory however in practice must be correctly timed. The condos within most of Canada’s major cities are overpriced with a strong downward correction in the short term. Buying these investments at a later date at a substantial discount makes much greater sense.
4. People are keen on retirement because most people have jobs that do not provide self-growth, purpose, happiness and fulfillment. The word retire is quite literally routed from Latin meaning to stop moving. I believe the best option for those who are keen on early retirement and don’t have financial abundance to live off passive residual income is to invest in learning how to monetize their passions and hobbies.
5. The marketing for most retirement savings products look a lot like ads for the lottery with  happy, shiny people on ski hills. This is marketing at its best. Marketing is meant to entice the consumer in believing happiness is found in their product or service. Unfortunately, most people are not able to retire like those in these photos due to poor financial advice.
6. The greatest fundamental reason most parents do not save for their children’s education and RESP accounts is because of the increased cost of education and the decrease in the disposable income of the middle class. This is reason enough without touching on the subject that most University graduates are unable to find employment and that the value of traditional education in the information age is plummeting at an alarming rate.
7. If you are going to pay a fee for a points credit card, ensure that you never carry a balance.  If these points can be used for a variety of services and products so it mimics cash and you generate substantially more in benefits than the cost of the card owning one makes logical sense. As for your choice of card they all have their pros and cons so do your research.
8. People don’t check out Ally the online bank that has been paying 2% steadily since 2009 for several reasons. First; the product return is not high enough to generate attention, after inflation and the time of setting up the savings account there is little benefit.  Second; they must compete with the superior marketing of the big 5 which have done great keeping their clients from seeking superior alternatives even if the product is the best of the worst. If you have money to save, it should be either prudently invested where inflation and taxes cannot erode it or it must be saved at a rate higher than inflation without assuming risk.
9. The fact that people are still buying guaranteed investment certificates is completely ridiculous because of the word guarantee. Ironically, the only thing you are guaranteed to do is lose money after you factor in tax and inflation. Great profit for the bank at the expense of its consumers. If one still wants a mixed product GIC product, it’s easy as pie to create the strategy on your own but I would not recommend it as there are far more profitable places to invest.
10. Rob asks why there are 32 billion in money market funds that have pathetic returns after fees instead of high interest’s savings account. I must agree these products never made any rational sense to even exist regardless of the arguments I have heard for holding them. I know the sales people selling them possibly receive higher compensation on this product over a high interest savings account an in there may lie our answer.
11. Books on how to be a millionaire are so popular because we live in a consumer society where the mass majority of people believe monetary gain equals happiness. These books are in high demand because our education system does not teach even the basics of cash flow management. As hokey as it sounds if people were more concerned with purpose, health and well-being while taking an interest in financial literacy many of these books would not be best sellers.
12. Banks have not removed cheques from the system in replace of email because there is still a small profit margin in them. In addition, there is still a preference with many customers to use them over the more efficient email system. Although the banks could force environmentally friendly policy their first priority is to their shareholders not the environment.
13. Exchange traded funds are more exciting than mutual funds with far more buzz. I believe the excitement comes from the fact they are exchange traded and are bought and sold in real time. Also, exotic strategies like shorting, covered calls etc. can be placed on them where mutual funds cannot. The choice is clear for an active investor.
14. Most Bank client account statements are completely and utterly useless and yes it is clearly a scandal. The truth is Banks will disclose the bare minimum placed upon them by regulators. Banks hate disclosure because this actually works against their sales tactics and damages the bottom line. Heaven forbid a customer may choose another option and institution if they knew the truth of their capital erosion.
15. When you are calling a Bank customer service centre you are actually calling a call centre or as I like to call it a white collar sweat shop. These centres are run like factories with down time considered inefficient. Banks don’t make profit when employees have a moment to socialize on Facebook. So from a profit perspective the customer gets to wait for 5 minutes so less employees are hired and the profit margins are increased.
16. Rob Carrick says investment advisors don’t advocate lower mutual fund fees which means higher returns for their clients because lower fees mean lower commission.  Sales people almost always sell what pays more it’s up to the client to invest time and effort interviewing these professional to find the ones who actually have the rare value of placing their client’s interest first.
17. People don’t save automatically because in North America the mass majority are net spenders. This will of course inevitably change in the near future and those who have invested wisely over the last few decades (key word wisely) are in great shape. We are as a reminder in an inflationary economy savers are punished only wise investing outperforms this type of capital erosion.
18. There is no more attention given to decreasing wage growth in this country for the sole purpose that there is no short term solution and it is terrifying to discuss. No politician in their right mind would attempt to pretend they could reverse the trend of globalization and technological efficiency. What effective policy could protect Blockbuster from iTunes or the Molson factory paying $20 an hour jobs in Barrie from .30 cent an hour jobs in Brazil only to be replaced with low income retail jobs from Walmart. This trend is permanent and speeding up.
19. All parents should have a will; it’s inexpensive and saves enormous tension after their death. If you don’t have one it’s because you’re either being lazy or the idea of discussing death is awkward which is understandable. Having said that get off your ass and get your will done! You don’t want your children fighting over your nest egg if you die today.
20. There is a lot of complacency about borrowing costs in general not only interest rates. Although rates may or may not rise in the future the fact remains the same that the real issue is the amount of household debt not the ability of the debt holder to attempt to be clever and time market interest rate fluctuations. Canadian homeowners that can only finance their home at emergency low rates need to get seriously active about their debt reduction.

http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/20-things-i-dont-understand-about-personal-finance/article2146091/