Financial Jungle

Introduction: My wife, Financial Jungle Gal, has written the following piece out of her own free-will. She’s been busy as a bee fixing up my goof-ups in every post - including this intro. To show a token of my appreciation, I’ve decided to share the fame with her. Please give her a warm welcome.

“How Much is That Doggie in the Window?”

If you are a dog-lover, it can be hard to resist taking home every puppy that looks at you with its doggy eyes through the window. The puppy is small and cute, oh so cute, especially when it does funny things like rolling around with its roommate or trying to terrorize a toy. The breeder asks for $$$$ or the pet shop lists the sale price for $$$$$$, but how much does it really cost to own this dog?

Here is a list of common items that need consideration for Fido (estimates):

One-Time

• Dog: $500 to $1,500
• Pet carrier: $50
• Brush: $10
• Leash / Collar / Harness: $50
• Dog Mattress: $30
• Food & Water Dish: $10

Annual

• Food: $250
• Vet Examinations/Shots: $100
• Flea prevention (such as Program or Sentinnel): $100
• Dental Care (Toothbrush/Toothpaste): $15
• Shampoo & Towel: $15
• Toys: $50
• Treats: $70

Optional

• Dog Training Classes: $75
• Dog Grooming: $45 each visit
• Doggy Day Care: $25 per day
• Dog Walker: $20 per hour

Wow, this adds up!

Of course, Fido does not need all of these things. You can save money on doggy day care and doggy walkers if Fido has a companion at home all day (ex. Human companions (stay-at-home moms, dads, kids, retirees, or other pets), or Fido likes to sleep all day. Some inexpensive toys include old socks, worn shirts, paper toilet rolls, and tennis balls.

Why do we spend so much on our dogs? It is tough to put a price tag on the intangible benefits we receive from Fido’s unconditional love. So although we may spend hundreds or thousands of dollars on our furry friend, in the end having a well-adjusted pet is priceless.

Disclaimer: Just a dog lover’s two-bits. Estimated costs based on a toy-size dog.

I came across this funny little page to measure how much you’re worth. It’s not the typical Assets - Liabilities formula.

Ever wonder how much money you could get on the open human market? HumanForSale.com will attempt to place a value on your life using a variety of criteria in 4 basic facets of life. Among the criteria used include athletic ability, education level, income, amount of exercise, weight, and sense of humor. This is obviously a very subjective matter and is not intended and does not claim to be scientifically accurate. The more honestly you answer the questions, the more realistic the dollar value returned will be.

I’m worth $1,675,000. I’m insulted!! (I guessed at some of the answers though.)

Check it out, and begin by selecting your gender.

Okay. Maybe not thousands for everyone, but at least I will no longer have “hands in my pocket“. For the past 8 years, I’ve been paying the classic $29 per trade with one of the big banks. With a few trades here and there, the mountain of fees can easily add up to over $1,000. The more fees middlemen take, the less capital there is for future compounding. What’s a little retail investor to do?

Then came along a software-based online discount broker, Interactive Brokers. Technologies have enabled IB to run a lean and very mean operation, thus allowing them to pass on the savings to us. Each trade is only $1 for the first 100 shares, and $0.005 per share thereafter. There is a $10 per month minimum fee. However, if you’re a light trader, your annual transaction fees should amount to $120.

Although transaction fees are on everyone’s mind when choosing a discount broker, there are a couple of other less obvious culprits: the foreign exchange and margin interests.

If you want to convert your Canadian currency to purchase US securities, your broker will charge you a spread on the exchange rate. This rate varies by brokers. IB’s spread is 5 basis point, or 0.05%, while my big bank’s is 1.25%. That’s a difference of $120 when you convert $10,000 Cdn to US, each way!

IB’s margin rate calculation isn’t so straight-forward, and it depends on the balance of the margin loan and the prevailing Canadian LIBOR overnight rate. Let’s cut to the chase. For investors with margin loans less than $115,000, the current rate is 5.75%, while my big bank charges 7%. On a $10,000 margin, the difference is $125 per year. To find out more about IB’s margin rate, visit here.

Unfortunately, IB does not support mutual funds, but they do have ETFs. There have been many published studies citing that the vast majority of actively managed mutual funds under-performed their passive counterparts. Investors shouldn’t concern themselves with the lack of mutual funds support. Secondly, IB does not support RRSP. That’s why I’m keeping my non-registered account with the bank.

IB seems promising based on my research so far. I’ll write another post on this once I have a little more exprience with the platform.

Welcome to my personal finance blog.  First thing first.  Please read the disclaimer.  Most importantly, after visiting this blog, do not rush out and make any financial decisions without consulting your financial planner. 

I’m not your advisor, but a regular Joe who happens to have a passion in personal finance.  I will do my best in keeping the contents accurate, but I’m only human.  If anything is glaringly incorrect, please email me at FinancialJungleGuy@Gmail.com.

I’m always looking for new ideas to blog about, so please feel free to drop me special requests.  I don’t claim to know everything, but will research as much as I can before posting. 

I look forward to reading your opinions on my post.  Once again, welcome to the Financial Jungle blog.

Financial Jungle Guy
FinancialJungleGuy@Gmail.com