Thursday, February 16, 2017

Do Your Expenses Decrease After Downsizing?

In August last year, we downsized from a 3800 sq foot suburban house with 2 cars in the USA to an 1800 sq ft urban condo with one car in Canada.  This is supposed to be a trend for baby-boomers: urban to suburban, bigger to smaller, Trump to No-Trump, etc.

  1. But what happens to your expenses?  
  2. Do they really decrease and is it significant?  
  3. What are the sources of the savings?
Luckily, I track expenses using Quicken and we follow a budget so the answers should be easy to find.  We also have not changed our lifestyle or budget since downsizing.

The answer to 1. and 2. is yes, there are savings of about 10 to 15% overall, depending on which downsized month is compared to our previous full-size average.

The harder question to answer is number 3, what are the sources of the savings.  
  • Unfortunately, the biggest absolute saving was in a category that I call "household" and includes a lot of miscellaneous expenses: decorating items, small services, small purchases, etc.  I am not sure why our expenses dropped by 8 to 10% in this category.  Maybe we don't have the space for impulse purchases or the need for a lot of services?
  • Utilities dropped by about 10% and that makes sense.
  • Auto expenses dropped by 50%
  • Groceries went up by 15%, prices are higher at urban supermarkets
  • HOA fees went up, home repairs and services went down, for no net change
  • Entertainment expenses went up by 10%, there is more to do downtown than out in the suburbs.
But net-net, our expenses have gone down by about 10 to 15%.  So you can expect some savings but this will not radically change your lifestyle.

Monday, February 6, 2017

Killing the USA While Defeating Terrorism

The US public is afraid. They are bombarded daily with negative stories about muslims, terrorists, immigrants, crime, climate change, wars, and unemployment.

Some of the fear is justified, but much is not.

Let's look at terrorism, one of the greatest and most emotional fears. It is behind the immigration ban, airport security measures, security at concerts, government surveillance, militarizing the police, huge security spending, casualties in Iraq, Afghanistan, Libya, and other negative and inconvenient changes to our daily routine. Fear of terrorism helped elect Donald Trump, a racist bombastic narcissistic misogynist.

But how big a problem is terrorism? The last attack on the US by organized terrorists was the underwear bomber about 10 years ago. All other attacks were from self radicalized lone wolves. The casualty rate from all attacks averaged 171 per year from 1995 to 2014, or 0.00005% of our population. A very very low rate compared to deaths from drugs (47,000 per year), traffic (32,719 per year), crime (14,196), workplace accidents (4836 per year), and medical malpractice.

Yet we are radically changing our society to combat this tiny terrorist threat. Why spend trillions on something which kills so few? Why change our society into a repressive police state with intrusive surveillance for such a small problem? Why divide our country by whipping up fear and enacting controversial laws such as immigrant bans and encouraging suspicion of certain religious groups? Why give up our rights and liberty? Are all our military casualties worth it?

Clearly some measures make sense such as airport security since we know terrorists have repeatedly targeted aircraft. Increased police activity makes sense since they have caught some terrorists before they acted.

My point is that US society is changing for the worse due to massive efforts to combat a small problem while we neglect other more serious threats to our health and safety such as opioid addiction, violence in the inner city, health care for the poor, bad roads, and our low high school graduation rate.

We are turning America into a divided, fearful, less free, overly policed, and more racist society to combat a threat that is 300 times less that the problems of drug addiction or traffic deaths. We have to rethink our priorities, or America "the shining city on a hill" will be destroyed in our misconceived all-out fight against terrorism.

Wednesday, December 21, 2016

America is the New France

We used to make fun of the French and all their socialist protectionist laws and lack of ethics in foreign policy.  But now it looks like the USA will be the new France, check out the comparison below:

France, Flag, Map, French Flag ...French Government Action
USA Flag, 6/2014 US Flag, ...Old US Government Action
... Trump | by Gage SkidmoreNew Trump US Government Action
A plant is being shut down and the production moved to a lower cost country
Government pressure on the company to keep the plant open.  Regulations and laws make it difficult to close.
No action, let the market take its course.
Government pressure on the company to keep the plant open.  Regulations and laws make it difficult to close.
A dictator is suppressing his people but also battling terrorists
Support the dictator.  Send weapons if needed.
Pressure on dictator to give up power.  Offer help to combat terrorists.
Support the dictator.  Send weapons if needed.
A rebellion is threatening US or French companies in a foreign country.
Send in the foreign legion to restore order.
Do nothing
Send in the special forces and/or arm the government.
A country invades another country and takes territory.
If it is good for France or has no impact, it is OK.
Condemnation, maybe armed intervention like the first gulf war.
If it is good for the USA or has no impact, then it is OK.
Foreign country makes higher quality lower cost products than domestic, eg Japanese cars
Raise tariffs or other barriers to the foreign products.
No action, let the market take its course.
Raise tariffs or other barriers to the foreign products.
Comedian makes fun of President
File a lawsuit.
Ignore the insult.
File a lawsuit.

Wednesday, December 14, 2016

Why are Americans Unhappy with America?

Lots of articles being written about how the average American worker has not advanced in terms of pay over the last 10 years or so.  The Economic Policy Institute statistics below show that pay has barely risen over 15 years, especially at the lowest income levels (10th to 50th percentile).


Hourly wages by wage percentile, 2000–2015 (2015 dollars)

Wage by percentileWage ratio
Annualized percent changeWage ratio change

Meanwhile, Real GDP has grown from 12.6 Trillion dollars in 2000 to 16.4 trillion.  That is an increase of 1.7% per year or 30% over the 15 year period.

What is happening?  Wages adjusted for inflation did not increase or decreased for the bottom half of workers between 2000 and 2015 but GDP increased by 30%.  Who got the 30%??

The answer seems to be that the top 10% of earners got the money, or most of it.  See the table above, workers in the top 10% of income got about 1% a year in increases or 16% of the money.  This seems to be born out by the CBO statistics showing that the rich in the USA are getting richer and the poor are getting poorer, see the chart below.

So it seems that half of Americans are not sharing in the prosperity of the wealthiest and most prosperous country in the world, which might explain why they are unhappy and voting for a misogynistic blowhard billionaire who says he will "Make America Great Again".

Unfortunately, Trump's plan of cutting taxes for the wealthy and deregulation are most likely to benefit the rich and will not trickle down to those workers in the bottom half of the income distribution.

Wednesday, November 23, 2016

I Stopped Watching US News

When Trump got elected, I stopped watching US news and it confirmed to me that the US media and particularly the networks are not portraying the real state of the world.

In Virginia, news is big.  The local news starts at 4pm and runs to 6:30pm, then the national news comes on until 7pm or 7:30pm.  We used to start watching at 5pm while making dinner and continued until 7pm.  We got a pretty good sense of what the news programs were reporting and it is at least 90% negative and sensational - "if it bleeds, it leads".  Based on watching this news, you would think:

  1. Crime is increasing, particularly violent crime against innocent white people like blonde haired young women.
  2. Police are shooting black people regularly without provocation.
  3. Islamic terrorists are mounting attacks on the US regularly.
  4. Unemployment and poverty are very high.
  5. Opioid addiction is everywhere.
  6. Traffic accidents are more frequent than ever and people are dying in droves.  Cell phone usage is causing huge numbers of crashes.
  7. Infectious diseases like Ebola, Zika, Tuberculosis, and Lyme are sweeping the nation.  
  8. Governments at all levels are dysfunctional and do not serve their citizens.  The people in the government are evil.
In actual fact:
  1. Crime has decreased and violent crime particularly has decreased for the last 20 years.
  2. This does happen, but not frequently and usually the police are charged.
  3. You are more likely to be killed by lightning than an Islamic terrorist on average.  You are certainly more likely to die through medical malpractice than terrorism.
  4. Unemployment is at a very low level, the US is almost at full employment.  Poverty is quite low compared to the middle of the 20th century.
  5. This has some truth, opioid addiction is increasing and the "war on drugs" waged for 30+ years has achieved nothing.
  6. Traffic fatalities are at an all time low on a deaths per miles travelled basis.  Cell phones are a problem but not a big one yet.
  7. Nothing bad happened with Ebola despite all the hysteria, Zika is a problem that can be solved, etc.  With all the medical technology in the USA, its not a big issue.
  8. Governments are run by officials and civil servants who try to be helpful and mostly they succeed.
  9. Global warming by greenhouse gases generated by man is well supported by scientific analysis.  But in spite of the fact that this will decimate the whole world, it rarely gets reported because it is too hard to explain in 20 seconds and there is no sensational video to show in the background as the news reader intones on its gravity.

Friday, November 11, 2016

Ruminations on Trump

This post is as much therapeutic (cathartic) as informational.

Like 50% of Americans, I hate Trump and all he stands for.  No need to list the reasons why again.  We all know them and 50% of us do not think they are a problem.

So why do I continue to be worried about a Trump presidency since I just moved back to Canada?

There is some stuff that I should not care about.  He can grope all the interns he wants, any woman getting close to him knows his reputation.  He can say nasty things, why should I care, I am a well-off white male, and he is never going to say or do anything nasty about me.  I now live in Canada so he is not going to change Canadian society.

There is some stuff I care about but they can be changed again in future if the citizens elect a different government.  He can repeal Obamacare, people without insurance will still get free hospital care.  He can try to throw out the illegals, but you cannot deport 10M people, it just will not happen.  Same for the wall, it is useless and expensive, and all he will do is put up some token sections.  The Department of Education can be abolished, this just gives more of an advantage to the Chinese, Canadians and Europeans, who will get good public educations.  He can start a war directly or indirectly, just like W, and my family does not have to fight and he will never institute a draft since he dodged that himself.  Trade barriers are likely and they will fail like they did during the Great Depression, and I will not be lined up at the soup kitchen in Littlemindville USA.

There is one thing I do care about and it cannot be changed and it will affect my grandchildren.  Trump will revoke all the Global Warming reduction treaties and regulations, and this will cause the rest of the world to do the same.  In 4 or 8 years, Global Warming will be unstoppable and cities like New York, and Savannah will be well on their way to being underwater.  Once temperatures rise by 2.5 degrees Celsius or 4.5 degrees Fahrenheit, most of Savannah and New York will be underwater.  This will occur in 2070 if emissions continue to increase at present rates.  I will be dead, children of my generation will likely be dead, but my grandchildren will be in their mid-50's.

My grandchildren who I love will suffer through catastrophic storms, floods, food shortages, and wars brought on by climate change.  Trump will be long dead and his towers in New York will be underwater, if the locals have not torn them down in a rage by then.

That is the only thing that I do and should really care about in a Trump presidency.

Savannah Underwater in 2070

Thursday, November 10, 2016

How to Move to Canada from the USA

We recently moved from the USA back to Canada, and given the Trump election, there seems to be a lot of interest in immigration to Canada by Americans.  So how do you do it?

You can check out my previous posts on lessons learned and differences between the USA and Canada for some info, but I will try to make this more of a step by step description.

  1. Canada welcomes immigrants, so you will not find a lot of ridiculous barriers like the USA puts up for legal immigrants.  However, this is Canada and there are rules to be followed.
    1. You may have a family connection that entitles you to Canadian citizenship.  If so, go for it.
    2. You may qualify for a NAFTA visa if you can get a job in Canada.  Check out this link.
    3. You can apply for immigration and you may get special status if you have particular skills.  Check out this Government of Canada link. 271,660 people moved to Canada legally in 2015 by applying, the information is here.
    4. You could get your company to transfer you to Canada and they will handle the paperwork - this is an ideal solution.
    5. You could try it out by living in Canada for under 6 months as a tourist.
  2. Once you have status to immigrate, you need to do all the usual things that you would do in the USA if you were moving, except there will be some more paperwork and some differences.
  3. Finding a house is easy.  Get a realtor in the Canadian location of your choice.  Alternately, search for a rental.  Put your US house up for sale.
  4. Canada uses lawyers to do property paperwork, not title companies.  Your realtor will be able to refer you to a real estate lawyer.
  5. Visit a Canadian bank during one of your visits before you buy your house or rent.  Talk to the branch manager.  Explain that you are an immigrant.  You will be surprised at the reception because they deal with immigrants all the time, they will probably offer you special incentives to bank with them.  Talk to them about getting a mortgage, the process is similar to the USA except you do not have a credit score in Canada, so you need the bank to help you out and get your US credit rating, check out your assets, then pre-approve a mortgage.
  6. Talk to the bank about getting a good exchange rate for the large amount of money you will be transferring from the USA to Canada after your US house sells.  If you pay the standard exchange rate, you will lose 3%, which could be a lot of money if you have equity in your US house.  Most banks can offer a lower exchange rate through their brokerage department or through a special arrangement.
  7. Get a US credit card that does not charge for foreign transactions, like the Capital One World Mastercard.  You will need it until you get a Canadian credit card, which might take a while.  Don't close your US bank accounts right away, you can close them later over the phone.
  8. Call some Canadian moving companies and book your move (see previous blog post here).  Most are part of an international group like Allied and they will get the local Allied affiliate to do the estimates in the US.
  9. You will not be covered under the government health plan in Canada for 3 months so you need to buy travel insurance in the USA for the first three months you live in Canada.  It is not too expensive.
  10. You can bring your cars with you when you move to Canada, but it is not easy or useful in all cases.  See this blog post and this post.
    1. If you have an older US car, bring it, you will likely pay a nominal amount at the border
    2. If not, you will likely get a better trade-in in the USA and you can then buy whatever car(s) you need in Canada.  
  11. Call a Canadian insurance company before your move to get car and home insurance.  Canadians love insurance, there are lots of options.
  12. When you arrive in Canada with your furniture, there will be a few unusual activities:
    1. You will have to go to the local Canada Customs office with your moving truck driver to clear your furniture.  It costs nothing but takes a little time (an hour or so).
    2. There could be a wait if the border gets backed up so you may have to adjust your move-in date
  13. You will need to transfer your drivers license to Canada, similar to the USA.
  14. Go to your provincial services office to sign up for health care (there is a 3 month wait, see above).
  15. Go to the federal government service office or call them to get a Social Insurance Number (equivalent to the US Social Security Number).  You will notice that the office is much nicer than the equivalent US SS office and the employees are smarter and happier - welcome to Canada, where we love our government and want it to function well.
  16. By the way, none of Canada's prime ministers or premiers are narcissistic, mysoginist, racist, ignorant, nasty frauds.  But you already know that...

Photo credits: Flickr and Flickr