Blessed by the Potato

Well, in my last update I reported that the trip to Turkey helped me lose over 5 pounds. Unfortunately I caught a cold on the plane, it’s Halloween which has lead to much candy eating/poor dieting, and of course I haven’t been working out every day like I was there, so I’ve already put 2 of those pounds back on :( Ah, well, on to the links:

Mike at Money Smarts puts up summary tables to review of all the online brokerages in Canada. I’m of course still a fan of TD Waterhouse (which now offers the lowered commission rate to slightly more households with the threshold of $50k), in part because of the ability to easily buy e-series funds, and in part because once you do get a live person on the phone, they’ve been great every time. Knowledgeable, interested in getting problems solved, and just generally helpful.

Preet asks the perpetual question “Is a variable rate always best?”. One important thing to keep in mind when making that decision is not just whether rates will go up, but how high they’ll go, and how fast they’ll do so. One really rough rule of thumb is to consider the case of rates that go up in a constant, linear way. In that case, you save money in the first bit of the slope vs. a fixed rate, so by the end of the 5-year (or whatever) period, rates have to go up to be as much over the fixed rate as they were below the fixed at the beginning to break even. So for example today, with a fixed at about 3.4%, and a variable at about 2.3%, you’d have to expect the variable rate to be over 4.5% at the end of 5 years to make going fixed worthwhile. The real world is a more complicated place, so of course rate changes won’t be smooth like that, and there’s also the impact of paying down your mortgage, which helps the variable case more: lower rates earlier on are more effective than the higher rates later on. You can always make a spreadsheet to figure it out, but I don’t think the finer points of the math is as important as the very uncertain rate predictions.

Canadian Capitalist has a good post on where some of the tracking error of currency neutral funds comes from. The research shows that it’s not likely that the tracking errors are purely random, so one shouldn’t expect them to cancel out in the long run. Michael James provides a good potential explanation for where this negative correlation comes from.

MacLeans has an article on the rent vs buy decision, quoting Patrick from A Loonie Saved (HT to Patrick who sent me the link :) Here’s his part:

Patrick Doyle, a Toronto software developer who writes the personal finance blog A Loonie Saved, has crunched the numbers for himself and believes it just doesn’t make sense to buy at today’s prices. Especially after factoring in all the extra costs that come with owning a home, like property taxes, insurance, utilities and general upkeep, which can quickly add up. “I choose to rent because I already have a day job, I don’t want to be a property manager, I don’t want to be a real estate speculator, I don’t want to be a highly leveraged investor and I don’t want to be responsible for repairs and maintenance. I just want a place to live,” says Doyle. “If I were to consider giving up these advantages to buy a house, it would have to save me substantial money. Instead, it costs more. For me, that makes the decision a no-brainer.”

Well-put, Patrick! Of course, I’ve got to nit-pick some parts of the article:

Above all, most proponents of home ownership argue that buying a place of your own is an ideal form of forced savings. Canadians clearly aren’t up to the task on their own. In a typical year, fewer than one-third of Canadians make use of their registered retirement savings plans, and even fewer make use of tax free savings accounts, first made available to much fanfare in 2009—though the reason for that could be because so much of their income goes toward mortgages and renovations.

As I’ve argued before, paying down a mortgage is a form of “forced savings” (which to put it another way, means that people are so bad with money that they only way they can save is if threatened with homelessness), but that’s a very poor solution to an inability to save: actually saving is better. Yet here MacLeans’ goes further and adds in renovations. But, generally speaking renovations cost money, and you don’t get that money back when you sell. The urge to renovate should be a point against buying a home for the financially strapped young Canadian.

Either way, observers like Milevsky at Schulich believe the debate between renting and buying has gotten sidetracked in recent years by talk of investments, returns and portfolio allocation. “This debate has become so financial,” he says. “It’s lost the qualitative lifestyle aspect that should drive the decision. When a 22-year-old kid comes out of college and immediately asks, ‘Should I buy or should I rent?’ the question should be, ‘What do you want to do with your life—do you want to start a family, explore the world, build your career?’ That’s more important than the few hundred you may or may not save each month by doing one versus the other.”

I disagree with Moshe — the bloggers and forum lurkers like myself have perhaps been getting overly financial in the debate, but the general public has not. Or, if they have — with dreams of increasing real estate prices and easy roads to financial freedom — it’s because the financial debate has been very superficial. Far too often I’ve seen the old “rent is throwing your money away” line, or comparisons that forget to include big items like property tax, maintenance, or transaction fees. A financial notion only, not backed by any math. The debate is not nearly financial enough for most people. Indeed, I suspect that is how we got to a ~70% homeownership rate, a level that’s even higher than the peak in the US, where people now openly admit that banks loaned money to people who had no business buying a home: by people deciding that they wanted the ownership lifestyle aspect without taking the time to do the math. Plus, those lifestyle decisions — when to move, how much space will be needed for a family and when — should factor into the financial equations anyway.

Rob Ford won in Toronto. Part of the platform was to remove the Miller taxes on car registration and land transfer. I was in favour of the vehicle registration tax when I first heard about it, but am firmly against it now that I saw how poorly it was implemented: it wasn’t a small surtax, but a big charge that was as much as the provincial registration fee to begin with, making it twice as expensive to register a car in Toronto. Plus, it was easy to avoid if you had a friend or relative that didn’t live in Toronto, so it wasn’t good on the fairness front, either. It’s a bad tax, and I won’t be sad to see that one go.

I think the land transfer tax was a good one though: it was introduced at a time when real estate prices in Toronto were climbing double-digits per year, so the 1-2% tax was easy to sneak in, and it was basically just lost in the noise of the market moves. Since it’s not an ongoing tax, it’s also been priced in now, so there’s no reason to get rid of it.

At curling last night, one guy shared the “factoid” that this October has 5 weekends and (5 fridays)… and that it won’t happen again for over 800 years! I naturally called bullshit: October has 5 weekends any time Halloween falls on a Sunday, which should happen approximately 1 in 7 years. Even in the full force of my overwhelming logic, he said no, he read it on the internet that “because of the leap years and stuff”, it won’t happen again for 800 years. Well, a quick scroll through my BB calendar shows that 11 years is all it will take (2021) for that to happen again. Besides, the extra days from leap years don’t get added to October. When I got home I tried to Google it, and sure enough the bullshit is prevalent enough that as soon as I typed “October 5 we…” it automagically filled in “5 weekends 823 years”. 81k results. I weep for humanity.

On the theme of running down of mysterious and wrong-sounding numbers spewed on the Internet, Barry Ritholtz looks into the “average holding period is 11 seconds with HFT” meme, and finds the evidence to be lacking.

Hope everyone has a fun and safe Halloween!

So NaNoWriMo — National Novel Writing Month — is coming up, also known as November. I am not attempting to write a novel this year, just like I haven’t any other year, because that is just crazy balls.

I am trying to finish my thesis though, which is nearly as much writing (and harder writing at that, since it involves 4X as much reading for references, etc.).

It’s a daunting task, but today I seemed to pass through that psychological barrier where it goes from being this impossible wall to climb, this “oh my god, what did I get myself into, and how will I ever finish this?!” type thing, to being something that hey, I can do! There are still a lot of pieces to put together, but it’s starting to look like the pieces will go together in the end, so I will finish it.

…though I’m not going to get it done on time :( Once again I’m at risk of blowing through another deadline. My next milestone (or in the corporate parlance, “deliverable”) is set for this coming Monday, and I’m already 2 weeks behind, so somehow I’ve got to get 3 weeks worth of work done this week — and the planned timeline was a gruelling hellmarch pace to begin with! It makes me think it’s just not going to happen. Especially with Halloween festivities essentially making the prospect of any weekend productivity a non-starter.

And of course, one doesn’t get two weeks behind on the timeline without facing up to the realization that maybe the timeline was a little aggressive/optimistic in the first place.

As much as I’d love to get things squared away for this term (and save nearly $2700 in tuition), just seeing that there is an end in sight, that things are actually coming together, is a big relief, even if that end may still be half a year away yet.

Halloween is fast approaching, so it’s long past time for those hearties going as pirates to figure out their facial hair, especially if the natural approach to costuming is to be taken.

A pirate’s beard is an integral part of his outward persona. While each pirate’s beard is unique to them, and can be as fluid as the sea herself, there are several broad categories to keep in mind:

Long and unkempt: face it, pirates spend a lot of time at sea, and beard-trimming falls pretty far down on the personal hygiene list of priorities. So a long, unkempt look is great for a pirate. Bonus points, of course, for tentacles. As a practical matter though, it’s a tough look to pull off, as it will require months of dedication and celibacy. People on the bus may think you’re a touch off, as the shipwrecked look is not a good look for anyone who’s not a pirate. If the pirate inside your soul is dead set on the full facial FSM, perhaps prosthetics are the way to go.

For most of the other options, one can start with a respectable, scholarly full beard and trim as needed on Halloween:

The Swashbuckler: Swashbucklers need a little facial hair to add to the mystique and danger of being an expert duellist. Often a moustache with just a little hint of hair on the chin, ala Will Turner, or that other famous pirate of the Caribbean. Other notable swashbucklers have stuck to just a moustache, with the Dread Pirate Roberts utilizing just a thin trace of hair above his upper lip. A thin, neat, focused bit of facial hair is important to the swashbuckler: it conveys the message that they are a refined gentleman that can wield a rapier with finesse, yet are just wild and mysterious enough to be truly dangerous. This is someone who’s in control of their dark side, but it is definitely there; not your average cutlass-swinging bit of cannon fodder.

The Goatee: A goatee is a good all-around facial accent that remains faintly sinister. Excellent for the quiet, brooding types of pirate who don’t need anything fancy to get the job done, and still remains work-appropriate.

The Captain Hook: I’ve never seen a real, live person able to pull off the cartoonish curly moustache of Captain Hook, but if you’ve got the follicles for it, then it can be a good variant of the swashbuckler. Sinister.

Muttonchops: Not strictly recognizable as a pirate beard, muttonchops nonetheless can be an excellent choice (after all, the rest of the costume will mark you as a pirate). Muttonchops are basically the opposite of the Swashbuckler, both in the areas of your face to shave, and also in that they signify you as one of the cutlass-swinging cannon-fodder working pirates. Yarr. A quick shower and outfit change and you could even pass for Royal Navy. Or Wolverine.

The 5th Day: A version of the lost at sea full beard is to simply go with a nice 5-day shadow, completely untrimmed. It signifies the roughneck nature of piracy without requiring the artistry or upkeep of the other options. It can also represent the desperation of a well-heeled Navy man fallen on hard times, a man with no attachment or special love for his pirate beard, but who’s in no position to keep up a clean shaven facade.

Have a happy Halloween!

Some short notes:

Jenn writes: “Jenn is willing her husband to stop singing christmas carols. Please. someone make him stop.”

There are only two capital crimes left in Canada: treason, and singing Christmas carols before Halloween. I’m not saying that this is a death threat, but actions have consequences, Kyle. Legally sanctioned consequences.

It’s always been a bit of a challenge filling up the old Halloween playlist, so I’m happy to report that I’ve listened to the lyrics of Lady Gaga’s Monster and Teeth, and hooyeah, those are Halloween songs all right. (Monster is easy, you only need to be slightly literally-minded; “show me your teeth” becomes Halloweeny once you’ve got vampires on the brain).

I also updated the background images for the season. You may need to hit reload to see them.

I was preparing my lunch earlier: peanut butter and jelly, with the crusts cut off, of course. It was then that I was hit with an epiphany: I am not ready for this.

I don’t even know what this is, but here I am, an idealistic kid cutting the crusts off his sandwiches. I’m clearly not ready to deal with browned and less-tasty bread (or “sandwich handles”), and that is one of the less rigorous challenges life will throw my way.

People have been asking me what I’m going to do after I finish my degree. It’s a big terrifying question, and one I don’t really have a good answer to. I mean that’s still a long way away, isn’t it? (Isn’t it??) I still have no idea what I’m going to do with my life.

So I face the paradoxical fact that I’m also a grown-ass man: I’m going to graduate with an advanced degree in AWESOME any day now (any day now); I have a bald spot, and my metabolism has reached the point that I have to watch what I eat (except on milkshake and cookie days). I have students of my very own, and I teach them things. I’m married; my friends are reproducing — my former students are getting married and reproducing!

How did this happen? Shouldn’t somebody have stopped this? I mean, I recently stayed up to 5 am playing video games (though getting home from work after 1 am made this no great feat). There is no way that I’m grown up and ready for a real job or a family or a healthy balanced diet. I was always a very responsible child, but that’s on the kid scale of hooligan to quiet nerdy type; that’s a far cry from actual responsibility.

I suppose I’ll just have to take a cue from XKCD:

And define what being grown up means my own damned self.

My feet used to live a very dull life: I only ever own three pairs of footwear at a time (my current pair of sneakers, snow boots, and sandals/watershoes), and a large assortment of pre-matched all-season socks. These socks have, over the years, cycled from plain white tube socks to tube socks with stuff on them (swooshes, dark soles), to grey tube socks (to quiet the protests of “you can’t wear white socks with that!”). I generally buy a dozen socks or so at a time so that I don’t have to spend an inordinate amount of time playing sock matchmaker on laundry day.

However recently I’ve started getting into fancy socks: shorter socks for the summer with more elasticity around the arches; thicker socks for winter.

I’ve long known of the importance of socks: good socks help keep your feet dry, warm, and serve as a nice cushion/rub barrier between your shoes and your feet so you don’t get blisters. However, I never put much stock in fancy expensive socks, thinking they were largely gimmicks. Now that I’ve tried them, I have to say that I do notice some improvement with the different types of socks (particularly the summery socks that are shorter and breathe better on the tops). So now I’m a fancy sock convert.

In hindsight, it’s a little surprising to me that it took this long to come around, as I’ve long been a believer in the importance of pampering your feet, especially when it comes to comfy shoes.