Money for Nothing and Your Cheques for Free

My most sincere apologies to Dire Straits and their fans, please join me in seeing the humour in the title rather than suing us.  Thanks!

And sincere apologies to my readers as well: unfortunately I don’t know any legal way to get money for nothing – even someone has to buy your lotter ticket.

Getting your cheques for free though is a different story.  As they say, you can always negotiate with your bank and try to get free stuff.  You can even get an account that provides free cheques (as in “the price is included in your monthly fee”).

A post over at  Canadian Personal Finance Blog was published just as I was running out of cheques in one of my accounts, and the comments contained a link to something very interesting: an alternative to buying cheques from your bank!  Yes it is possible!  For some time now cheques have a standard, that is published and publicly available, so technically anyone could print their own standardized cheques.  And if you’re a company that issues a lot of cheques this isn’t a bad idea.  But if you’re an individual who just needs personal cheques then the investment in magnetic ink and special paper would be excessive.

Most, if not all, Canadian banks use Davis+Henderson to print their cheques.  The alternative is ASAP Cheques, for both business and personal cheques.  They’re Canadian, based in Gananoque, Ontario, but serve all of North America.  Their deal on personal cheques is 100 cheques (4 books) for $20 and $2.75 shipping & handling plus GST (and HST if necessary).  This is considerably better your typical bank’s offer of about $30 for 100 cheques and $5 for shipping & handling plus GST & PST.

They have an even better offer if you’re okay with the basic cheque design: 200 cheques for $25.50!!!  These are single cheques, not duplicates although those are available too if carbon-copies are still your thing.

Before you order from ASAP Cheques you need to be aware of two things:

  1. Make sure you order before you run out of cheques since you need to send them a VOID cheque as a sample.  If you’ve already run-out, or don’t have any cheques to begin with, you can get a Cheque Sample Specification from your bank.  This is basically a VOID cheque printed on a full-sheet of paper with all the information necessary to identify you and your bank and you’ll need to e-mail them a scanned copy or mail or fax it to them; and
  2. If this is the first time you order from them there is additional verification process they go through so it can take a bit longer to get your cheques (although I have to admit I got my cheques within a week of starting the whole process).

When you order from ASAP Cheques though you don’t get a register or a nice little box to keep your other cheque books in.

Cross-posted on 2FatDads at Money for Nothing and Your Cheques for Free.

Federal Liberals still begging for hand-outs without doing anything to deserve them

I got another letter from the Federal Liberal Party of Canada today, extolling the virtues for their glorious leader and how much better they would be at running the country than the current crop of scoundrels (my words). The bottom of the letter includes a little form where you can contribute to their Victory fund. Here’s what I sent back…

Response to Liberals Victory Fund solicitation

I started getting these solicitations last election when I contributed to the campaign of blogger and anti-income-trust-tax champion Brent Fullard. But I figured if I was contributing to his campaign I should contribute to my local candidate as well. I guess the Liberals figured I was sucker because no matter how many times I send back these F-U responses they still beg me for more!

Now I have no love for the Conservative party either. I admit I voted for them a couple elections ago but not only was that a waste (my riding always votes Liberal) but a disappointment too! Most disappointing was the Cons Tax un-Fairness Plan, but they’ve been pretty consistently disappointed with all their decisions.

Remember: no one, not one single politician, has any influence over the economy and what direction it’s going in. All they can do is react. Any of them that claim they are responsible for swinging the economy in one direction or another is full of it! At most the governor of the Bank of Canada has some influence since he controls interest rates, but as we saw during the latest downturn even that can be meaningless if the banks don’t play along. And besides, he’s working within the constraints of his mandate and has to cooperate with other national banks around the world.

Cross-posted on 2FatDads at Federal Liberals still begging for hand-outs without doing anything to deserve them

No income, no trust

As you all know, I’m a rich and powerful investor.

Well, okay, I’m an investor. Like most Canadians my wife and I have RRSP‘s and an RESP for the kids. And like most Canadians I’m not a guru, wiz-kid, or a day-trader. I make my contributions every pay cheque and put the money in some boring fund or blue-chip company and wait for retirement to come along (the sooner the better).

But those boring funds and blue chips got a lot more exciting on Hallowe’en in October 2006. Up until that time, and during the previous election in which the Stephen Harper’s Conservatives received their first minority mandate, we had been assured that their government would never raid senior’s nest eggs.

But then Stephen Harper and Jim Flaherty introduced the Tax Fairness Plan – a rather ironic name for a piece of legislation that no one (except the foreign equity funds that snapped up Canadian trusts at rock-bottom prices) considered fair – changed all that. The boring old income trusts that I was saving my money in suddenly lost almost 25% of their value!

That’s when I joined the Canadian Association of Income Trust Investors, headed by Brent Fullard.

Brent recently had an article published in Canada’s chain of Sun newspapers. I’ve put a copy of it below, or you can find it at the CAITI blog.

No income, no trust
By: Brent Fullard
Guest Columnist
Sun Newspapers

Lie. Conceal. Fabricate. That was the theme our association used in billboards across the country in the aftermath of Prime Minister Stephen Harper’s broken income trust promise.

You would think someone as litigious as Harper would have sued our association for libel. Especially for the full page newspaper ads we ran under the headline of: “Jim Flaherty, your tax leakage analysis is fraudulent.”

The reason these public statements did not invite a libel lawsuit is because the best defence against claims of libel is the statements being made are true.

After all, Harper did lie, conceal and fabricate when he broke his election promise to “never” tax income trusts, with his demonstrable lie that income trusts cause tax leakage.

An argument he fabricated by leaving out all of the taxes that are paid to Ottawa by the 38% of income trusts held in RRSPs, and concealed within his 18 pages of blacked out “proof.”

Meanwhile our claim that Jim Flaherty’s tax leakage analysis is fraudulent is derived from the definition of fraud, which is “an intentional deception made for personal gain or which causes damage to another.”

Based on this definition, Flaherty’s income trust tax is a fraud since it was based on the intentional deception of his fabricated tax leakage claims, and the policy resulted in Canadians permanently losing $35 billion of their hard-earned retirement savings.

Scandals

These events have enormous relevance to today and the financial scandals that have been perpetrated on an unsuspecting public by the likes of the AIGs, Bennie Madoffs, and Bear Stearns of this world.

The income trust tax and the enormous havoc it created in Canadians’ retirement savings, and the massive number of takeovers that ensued (worth $108 billion), mostly by foreigners such as Hong Kong billionaires and middle eastern oil companies, is the real scandal Canadians should make themselves aware of.

Unlike the present day financial meltdown Harper assured us during the last election “would have happened by now” if it was going to happen at all, or the raging debate over how much Harper is responsible for the financial calamity all around us, the damage caused by the income trust tax is something that is the sole consequence of a decision Harper made.

Today’s financial meltdown has, no doubt, sensitized a larger number of Canadians about what it actually means to lose half of your retirement savings or to lose the very basis for one’s retirement income.

The trust takeovers to date by foreigners have caused Ottawa and all taxpayers to lose more than $1 billion in annual tax revenue, a number that will soon climb to $7.5 billion. And for what? The privilege of having foreigners own more of Canada and the privilege of imposing enormous losses on Canadians saving for retirement?

Unlike today’s other financial meltdown, this is an outcome Harper owns, lock, stock and barrel, based on his policy of lie, conceal, fabricate.

Please support CAITI‘s cause by joining the association, by writing your federal MP, and by boosting our question at the federal Liberal party‘s onProbation.ca Ask the PM forum.

Cross-posted on 2FatDads at No income, no trust

OnProbation.ca Feedback Forum – ask Stephen Harper a question

The Liberal party of Canada recently (today?) opened a new web site, onProbation.ca where they are discussing their ideas and have a Feedback Forum called Ask the PM where they state

Send your questions and comments to the Prime Minister and help us make sure that he’s listening.

So I added a question regarding the taxation of income trusts, which is currently ranked number six and rising steadily.

Here’s what I had to say:

The Tax Fairness Plan (which is anything but) includes a 31.5% tax on Income Trusts that has never been properly justified (the argument of tax leakage was never substantiated and independent analysis shows there is none).

The Prime Minister needs to come clean on Income Trust taxation and ultimately repeal the tax.

The Income Trust investment vehicle is available under many forms but in this form it was most accessible and beneficial to average Canadians (other forms, such as Flow Through Entities, are more complicated to participate in – although the Finance Minister himself benefits from his partnership in an FTE).

In the previous election Stephen Harper berated the Liberals for “raiding senior’s next egs” by taxing income trusts (after public consultation) and yet no sooner was he in office that he imposed without consultation a punishing tax on income trusts.

I call upon the Prime Minister to repeal the income trust tax and review the entire Tax Fairness Plan.

Cross-posted on 2FatDads at OnProbation.ca Feedback Forum – ask Stephen Harper a question

Bonuses for AIG

Rex Murphy did a bit on AIG last night after the news. I can’t find it online though – I guess the internet is slacking off.

Rex made a couple interesting points:

  • The AIG chairman only gets paid $1 a year (no mention of other forms
    of compensation though, besides the bonus)
  • The rescue bill that’s paying the bonuses explicitly allows for bonuses
  • The larger stimulus bill has over 200 “special” projects targeted
    specifically by the congressmen who are so furious about the AIG
    bonuses

So basically it comes down the AIG “fiasco” being a cover-up for how much the congress (and the senate I suppose) are taking advantage of Great Depression II to dole out the thank-you money for the lobby groups who supported them during the election.

I am normally in favour of market solutions, but JMK taught us the reactions to a system shock take longer to actually happen than when we graph them in our Econ 101 class. So I accept the government has to intervene, but there needs to be some pain, there needs to be a lesson for history to teach us. And I believe less in “innocent by-standers” than I do in gov’t intervention, so I think all those poor investors who believed it was true even though it was so good need to suffer as well as the people in AIG, etc. whose job it was to see this coming and yet ignored the warning signs.

Here’s a bit of a humorous take on the subject: In New Terror Video, AIG Demands Huge Ransom from U.S. (thanks to Brian for the link)

Cross-posted on 2FatDads at Bonuses for AIG

Pownce shuts down

Pownce announced today that they were closing their doors and taking their technology to Six Apart. I had an account there, but rarely used it – it was essentially like Twitter for file sharing.

It’s tempting to say this the recession affecting the web. And it’s probably true that the usual rationalization and consolidation is happening now that valuations are down and some people think they can make some good investments and others think they should take the money and get out before things get worse.

On the other hand, there’s a lot of duplicate services out there – for alternatives to Twitter checkout Jaiku or Identi.ca to name others where I’m a lurker. It’s not surprising that some of the minds behind ideas (business and technology) want to opening cooperate (and compete internally) rather than compete openly.

And the consolidation is good for the end-users too. Platform developers can concentrate their efforts and there will be a lot less jumping around trying to follow friends on one web site or another.

Four more years of Flaherty

C A I T I – O N L I N E: Happy Halloween: How BCE successfully gamed Jim Flaherty….

I wish Flaherty had let BCE and Telus and everyone else become an income trust. In the end I don’t think companies should be paying any taxes at all. That’s right, NO CORPORATE TAXES!!!

The problem is simple: taxation without representation. Companies don’t vote, so why should they pay taxes. Let them distribute their profits to the citizens who do pay taxes and vote on what is to be done with those taxes.

Admittedly that would eliminate the ability of the politicians to use tax law for incentives that drive desirable behaviour (it would also eliminate the ability of politicians to use tax law for favours that drive un-desirable behaviour).

But tax law (all laws actually) suffer from becoming quickly out-dated. What was good five years ago may no-long apply. But a parliament that’s pre-occupied or out of session or in the middle of pre-election campaigning isn’t going to effectively change the laws to suite the times.

Shareholders, who vote at least annually, can always accept changes to the distribution that suit the needs of the company and desires of shareholders. And these days governments (through various social insurance programs) are large shareholders so they would retain a direct say in a company’s behaviour.

Happy Hallow e’en!!!

Link

ETF-O-Mania

Here, finally, someone with a clear head discussing the pros and cons of ETFs. Until now I have read very few articles that had anything negative to say about ETFs and none anywere as clearly as this article.

What it comes down to, is that ETFs are mutual funds sold on the stock market rather than my your local bank (or whatever financial institution). Great, because there’s no sales commissions to pay those financial advisors. On the other hand, you’re typically paying a commission to your broker for any stock purchase you make. That doesn’t show up in the ETF’s MER but it affects your return none-the-less.

And if you plan to purchase regularly then you’re going to regularly be paying those transaction fees.