Chipamogli suertuda! (Chipamogli is lucky)

If you are patient and read back far enough in this blog, you’ll see that it all got started when this Chipamogli here was living in South America, more specifically, in Santiago de Chile. While there I had the great idea to climb an active volcano called Villarica in the southern part of the country. About halfway up I ran out of steam and went back down.

Anyway… it has since had a big eruption! I wonder if it’s now easier to climb.

March 3, 2015. Photo Credit: Aton Chile/AP Photo
March 3, 2015. Photo Credit: Aton Chile/AP Photo

 

The government should take care of us

I have a friend who is struggling to find a job in his field. He is hard working and intelligent, but like many young people today despite graduating from a good program he has had no luck. It pains me to watch him struggle through volunteer positions which he hopes will boost his resume while he slides further into debt.

My friend, let’s call him G, knows who the culprit is: it’s the government! Here is his reasoning…

In Canada, educational institutions are heavily subsidized by the government. The government therefore has a fair amount of control over the types and sizes of programs offered. The government also has access to information about the economy and what jobs are in demand.

G’s suggestion is this:  the government should do some research and try to get students into fields that will actually lead to jobs.

But that’s not all. It should severely limit funding to programs that do not lead to jobs. Many programs, such as in the humanities for instance, should be shrunk to only allow a few top students to enter, which hopefully means they will get the few available jobs once they are done.

 

Lecture hall at my old school
Lecture hall at my old school

“But it’s not like today everyone can study whatever they want. Universities still have entrance requirements and a limited number of spaces. Besides, shouldn’t a student choose for themselves what to study?” I asked.

“Come on, how many 18-year-olds have a clue about what they should study and how that will affect their future?” He replied.

I see his point but I don’t know how comfortable I am with it. On the one hand, universities respond to market demand. If enough students want to get a degree in basket weaving to make it profitable for a school to offer that program then that’s what will be offered, and then lots of people will graduate with a nice piece of paper that likely won’t get them anywhere (not hating on basket weaving here, btw). No one is warning these students about their debt-filled future. One can say that young people are being exploited.

On the other hand, it seems to me G is overly optimistic about the ability of government to do things in an intelligent way. Even if the government decided to take on this endeavour, I highly doubt it would be successful. The government is too big and complex and has too many people with vested interest in different things. I simply don’t trust ’em😉

Besides, even at 18 I would’ve been pretty insulted if someone told me I was too young to have a clue. Okay, so I probably didn’t have much of a clue but not all 18 year-olds are clueless.

Furthermore, if we’re going to put limits on the choices of students, why not control other groups as well? For example, the government can set laws to regulate banks and the credit industry. Why not stop allowing people to take on such big mortgages or credit card debt? At least student debt is “legit”, as opposed to people buying random crap they can’t afford. In fact, why doesn’t the government create laws to protect us from our stupidity in all aspects of our lives?

I think at the end of the day, we can blame the government and whoever else for not getting what we want. But at some point we need to start making the best decisions for ourselves despite the obstacles and whatever life throws at us, and not expect any government help. I realize that’s hard when one’s down on their luck, though. I hope my friend G will find a job that makes him happy soon.

Update: G found a job, so it’s all good🙂

Snowy Toronto

So this weekend Toronto got some snow and I was thinking I’d retrace the route I took when Toronto got some rain

 

Bay street looks pretty clean

 

 

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Behind College Park

 

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Loblaws at Carlton and Church, Maple Leaf Gardens

 

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Wearing my Sorels this time

 

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Allan Gardens again

 

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Decorated for the season

I really should visit this place more often!

 

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My winter uniform🙂

 

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Evening at Queens Park

Great time at the ERE readers’ meetup!

A few years ago I stumbled upon a blog about financial independence. I can’t quite remember what led me there… maybe I was looking for tips about save money, or maybe I was unhappy with my work situation and was trying to see if anyone out there felt the same way.

In his blog “Early Retirement Extreme“, Jacob Fisker writes about the nature of work and its affect on our lives, as well as other finance topics. Jacob has indeed made some extreme (to some) choices: he drastically reduced his living expenses and built up a DIY skill set to be able to live off wisely-invested savings and not need a job. He was in his early thirties at the time.

He later admits that using the term “retirement” in the blog name was unfortunate:

“Apparently, for some, the word retirement really does mean moving to Florida, taking one’s medicine at regular intervals, and ABSOLUTELY not accepting money although consulting is okay(!)”

Jacob’s “retirement” was actually quite active. One of the reasons he did it was not to simply retire but also because he liked solving complex problems. Could he really make this happen? Well he did, but I guess after a while he got bored.  He is some sort of math genius so when he received an interesting enough job offer he decided to take it.

Even though Jacob retired from retirement, his blog still has quite a following. Yesterday I was fortunate to go to the Toronto meetup for ERE readers. It was great to talk about one of my favourite topics with like-minded individuals!

All were practicing various levels of frugality and DIY-ness, and saving at least half of their income. And all were proof it was possible to lead good, happy lives, on averge incomes with high savings levels, even with dependent children.

We hung out on the PATH, the underground walkway network in downtown Toronto.

 

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Our hangout area: the PATH in Toronto.

One thing I need to work on is my investing knowledge. Yesterday we talked about the “Permanent Portfolio“, a way to allocate assets that not only allows for growth but also protects against uncertainty. A fellow reader sent me some ETF suggestions that I can select to be part of this portfolio.

It was funny how we all had a “financial independence” age in mind. One reader was telling us how in his household he’s the one in charge of day-to-day finances, and when he showed his wife their net worth she was shocked by how much they saved! Another reader said Jacob’s writing completely changed his outlook on life.

 

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(H)ERE!

Lending money to family members

Do members of your family lend money to each other, or is it more like a gift because you know you’ll never get it back?

In my family our finances are all separate. I have my life and my parents have theirs. I lived at home rent free when I went to university but I did pay for my tuition by myself. I thought that was pretty normal but I later realized that it’s not uncommon to have different arrangements.

I have a friend whose parents paid for all her expenses, including a vehicle and anything else she needed. Once she graduated and got a job, she paid her parents back for the car and gave them most if not all of her paycheque. They also bought a property together: the parents took care of the downpayment and she covers the mortgage and other ongoing expenses.

A few years ago I needed a bit of a cushion after a large purchase that cleaned out my bank account. I borrowed money from my parents and they gave me five years to pay them back. With interest! I wrote them a bunch of post-dated cheques that they’ve been depositing monthly.  I think that’s pretty reasonable, but to some people it might look strange.

 

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Winter is here again!

Choosing simplicity

The recent economic downturn triggered an interesting movement. This article describes how a number of people decided that they are better off broke. While there always were a few outliers, or hippies, or whatever you wish to call them, there must be enough people now that these ideas warrant attention.

“[They] not only eschew [luxuries], they’ve consciously chosen to both earn and spend far below their capabilities. For them, living on the economic edge is neither a brutal nor shameful experience. It’s a preference.”

Or maybe this is not new at all. Lots of people all throughout civilization focused on things other than making and spending as much money as possible, but in North America we are so immersed in our consumer culture that we haven’t been paying attention.

 

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Tulip festival in Washington State.

Stuck in his mortgage

One of my friends works at a company where the employees take a lot of… abuse, let’s say. They work long hours and are not spoken to kindly by their bosses when things beyond the employees’ control are not done on time and in the way the bosses imagined. One position in particular has seen a lot of turnover. They just can’t keep anyone there, as everyone either quits from the pressure or is fired when they don’t perform to the impossible standard set by management.

While my friend doesn’t like it, she’s not too worried and simply continues to look for other options. She and her husband paid off their home so she’s not feeling a lot of pressure. She tells me things are not the same for her coworker. At a more senior position he gets to take a lot of the heat on behalf of the team, and he doesn’t handle it so well.

“He has a big mortgage and a kid in private school, so he’s stuck”. She tells me.

 

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Sunny Burbank, California. How did property prices do there in the last few years?

I saw another friend of mine recently… and somehow we got onto the topic of real estate prices. He has recently renovated his condo and was saying he was totally happy with his small space. “It’s incredible how people keep getting the biggest houses they can get loans for… instead of looking at the smallest houses they can get away with!”

How nice to hear this voice of reason.

 

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In my opinion, there is no need to feel stuck. But we have to put a lot of thought into how we want to arrange our lives and what is truly important.