I don’t think many know about them because they are quality reads yet they don’t appear in many blogrolls. That will probably change, I’m willing to wager, as they get better known.  

McGugan played a big role in kick starting the passive indexing movement in Canada with his articles on Couch Potato Portfolios. Rob G. joined MoneySense last year, I believe, and produces well-researched, thought-provoking articles.

They are a welcome addition to the Canadian financial blogosphere. Both are immersed in personal finance topics full time, so they know a thing or two about the field. And both write for a living, so they express themselves well.

While we are at it, another financial writer that deserves to be followed is David West. He once did a column for the MoneySense website but it now appears on the website of Canadian Business. David W. writes about investing for several other publications and provides investment courses to major financial institutions.

You won’t find hot stock tips and 12-month price targets in his Canadian Business pieces. What you will find is good solid advice on the essentials of managing a portfolio, e.g. asset allocation, risk control, rebalancing and so forth.

Another approach involves becoming more skilled at responding to situations that arise from time to time as life goes on. Take fighting traffic tickets. Many people may resort to hiring one of those ticket-fighting services at $500 a pop to represent them in traffic court when they could get the same result doing it themselves. At least that is what I found from my own experience, as described in a previous blog post, Go to court (and save).

That post had the kind of impact that keep some bloggers going (heavens knows it’s not the money). It prompted at least one person to fight their own ticket to a successful conclusion (and to write a nice thank-you note at Thanks, Larry!)

To that end, I thought I might pass on an account of my recent experience shopping for a new car. Perhaps there are a few pointers that may help some readers save a few bucks.

For many people, including myself, it is somewhat daunting to visit a car dealership and haggle with a salesperson. I got into the right frame of mind by reviewing a handy little buyer’s guide, Beat the Car Salesman.

It’s a great little booklet, in my opinion. The author is Michael Royce, an experienced car salesperson turned consumer advocate. It helps level the playing field by disclosing the tricks and techniques of the car salesperson’s trade. After selling a million copies, Royce made it available for free on his website.

To be continued…

Another reason for do-it-yourself investing. And a second reason. And a third.

 A clear winner in the RRSP vs. TFSA debate.

Shopping for corporate bonds like going into a candy store.

More love for bonds.

Special report on self-directed investing.

Eliot Spitzer’s thoughts on salary caps for CEOs

The personal-finance book begins with the central character, Jamie Morelli, already married, indebted, and about to have twins. What if Jamie had decided to make financial independence a priority while still single? He might have been able to reach his goal much easier and sooner.

If one delays marriage and/or kids for a few years, they can live modestly and save 50% to 80% of their income by living in inexpensive accommodations, taking the bus/riding the bike, and enjoying simple pleasures like reading and hiking. Of course, this extreme frugality will not be everyone’s cup of tea. It’s more for individuals who really don’t want to be chained to a job all their life.

If one does get married early in life, it helps to find out beforehand if their spouse is on the same page. I’ve touched on this before too: if one spouse is parsimonious and the other is not, the sailing could be rough — like it was for Jamie and his wife.

If already married with children, the options are fewer. It will be a longer and less certain haul to financial freedom. But perhaps one can discuss things with their spouse and obtain agreement for some lifestyle changes that result in a much higher rate of saving.

1) You can become financially independent without the big score in business or investing by spending less than you earn (cut out lottery tickets, booze, restaurant meals/coffee, cigarettes, candy, etc.)

2) To stay on track, pick a date to be financially independent (“Findependence Day”); to get there, have a financial plan and even an advisor (whose value added includes advice on taxes, household finances, estate planning, insurance, registered plans, and so on).

3) Get rid of all credit-card debt and consumer loans.

4) As a foundation for financial independence, buy a house and pay off the mortgage as fast as possible. A 30- or 35-year mortgage is fine if you use the prepayment and accelerated-payment options to extinguish within 10-15 years.

5) Don’t start investing until at least half the mortgage is paid off; for investing, consider a preauthorized chequing account (PCA) that automatically transfers 10% to 20% of your paycheque into an investment account in which you have set up a Lazy Portfolio (mostly a diversified basket of exchange-traded funds such as, if I may suggest, the Couch Potato Portfolio).

6) If your job is secure and comes with a good pension (e.g. government, teacher), emphasize equities; if job income is insecure (e.g. commissioned sales), emphasize bonds and other less risky assets (alternatively, dollar-cost average into equities through a PCA).

7) Don’t invest a large part of your financial portfolio in your employer – diversify your portfolio to avoid having too many eggs in same basket

Save and invest job bonuses and pay raises.

9) Run your old car on the road longer; pay cash for a new car by contributing regularly to a Tax Free savings Account (TFSA).

10) Multiple streams of income are good; consider REITs as an alternative to owning rental properties and the hassles of being a landlord.

11) Hold fixed-income investments and high turnover mutual funds in tax-sheltered accounts; hold stocks in taxable accounts (except for U.S. dividend stocks because they are not eligible for dividend tax credits).

12) Portfolio management tips: a general-purpose asset allocation is 60% to stocks and 40% to bonds; favor exchange-traded funds and some mutual funds over individual stocks (except stocks with growing dividends), tilt toward small caps and value investments; diversify into foreign stocks; use currency hedging if foreign holdings over 25% of portfolio; consider real-return bonds for inflation protection; reinvest dividends through company reinvesting plans; and so on.

Chevreau, the Financial Post’s personal-finance columnist, also uses Findependence Day to inject a new realism into the genre. It’s not just a didactic tale but a novella whose protagonist experiences setbacks such as job dismissal, matrimonial separation, and betrayal by a business partner.

There are many personal-finance lessons embedded in the narrative for those just starting out at the ground level of career and family — including the all-encompassing “Pay Yourself First.” Yet, I worry, the story line captures interest in such a way that there is a risk some readers may breeze past the saving/investing nuggets before they are fully digested. What perhaps might be useful then is section at the end of the chapters summarizing the personal-finance lessons, and perhaps a wrap-up at the end of the book.

Sometimes there is nothing to be done but other times a bit of knowledge can lessen the blow. Traffic tickets are one such case. I know because I just got back from traffic court after representing someone who had two traffic violations.

You learn a lot going through the system. For example, about a quarter of the people in the court room had their charges dismissed because the police officer did not show up.

Also, before going to traffic court, one might get the charges reduced through a plea bargain. In Ontario, you can call the traffic court and request a “first attendance meeting” with the prosecutor. After hearing your story, they may then reduce the fine — or if you had two or more violations, they may withdraw one if you plead guilty to another.

Plea bargaining occurs on the day of the trial as well. It occurs during the recess called after attendance is taken and the cases represented by agents (none went to trial as they had either reached a plea bargain or were dismissed due to the officer’s failure to show). During the recess the prosecutor and their assistant meet with defendants and often agree to plea bargains.

Prior to trial, one is entitled to request disclosure of the evidence the prosecution intends to present, including the officer’s notes. That’s because you or your agent are allowed to cross-examine the officer at the trial and can use that disclosure to prepare your questions. It’s good to do this in case you don’t get a plea bargain during the recess and have to carry through to trial (or if you want to fight it all the way).

In Ontario, they actually have a form available from the court to request disclosure. If the prosecutor fails to provide disclosure on time (e.g. officer does not forward notes), it may be grounds for dismal, postponement, or a good plea bargain.

One can hire those services that fight tickets, like Pointts or XCopper, but they charge $250 to $500 in Ontario. It seems to me the most they do is just what is outlined above. They know how the system works. Very few of the cases actually go to trial as far as I could see from my visit. Most are settled out of court or the officer does not show up and it’s dismissed. If you have been issued a ticket or two, and know your options, you probably don’t need them.