Monday, September 11, 2017

A Rational Approach to Climate Change

Manmade climate change has become a political football in the USA with proponents on the left wing and opponents on the right.  After dividing the country in two, the debate is turned into a winner-take-all game instead of a scientific rational approach.

Let's look at it rationally and please put your politics on hold for a few minutes.

The world is definitely getting hotter, year by year statistics are pretty clear on this.  Check out the NASA measurements here.

Most of us would accept that a warming Earth will cause the ice caps to melt and rising sea levels.  It is pretty hard to deny this if you like ice in your drinks - the warmer it gets, the more it melts.  NASA also measures this and it is clear that sea level is rising.

Most of us would also accept that rising sea levels and rising temperatures are not good for people, plants, or animals as we know them today.  Low lying cities like New York, London, Miami, Houston will be flooded.  Hot areas like the US Southwest, Saharan Africa, and the Chinese desert will be much less compatible with human life. These bad things will cause people to do bad things to each other to survive.  You can debate how bad it will be but its going to be nasty.

So now comes the hard parts:

  1. Why is this happening and will it continue?
  2. What can we do about it?
The why is very politicized and seems to split into two camps:
  1. It is caused by CO2 emissions from fossil fuels that cause a greenhouse effect.  The scientists generally believe this and the argument can be found here.
  2. It is caused by something else that has nothing to do with man.  If you believe this, you probably know where to look for reinforcement of this idea.
Let's skip the debate on who is right, that is covered better elsewhere.  Let's look at what can we do?

We know the effects of global warming will likely be very bad.  Kind of like a big version of your house burning down or a tornado.

We disagree on what is causing it.  Let's assume you don't believe it is caused by man and CO2.  Do you believe that 100%, swear on the bible, bet my last dollar..??  Probably not, there is some uncertainty but you don't want to admit it publicly because politics is a win-lose game or whatever.  Let's say you think there is a 20% chance that climate change is man-made.

Given the very bad consequences, isn't it prudent to take action against a probable cause, however unlikely?  The worst that will happen is that money is wasted taking action to prevent a tragedy.

The analogy is that houses almost never catch fire, but we spend a lot of money trying to prevent and insure against a fire, including causes that are quite unlikely.

That is my core rational argument: given the catastrophic consequences of global warming, why would we not take action to mitigate the cause(s) and effects, even if you believe a cause is unlikely??

Tuesday, July 25, 2017


British Soldiers on the Beach at Dunkirk Waiting to Evacuate

We went to see the movie "Dunkirk" which was very good.  Pretty true to history, graphically shows the horror of war and the different sides of the human spirit, and just the right amount of patriotism.

When I spoke to my 87 year old mother last night, I told her about the movie, and her reaction was surprising.  She said something like "..well I won't go and see that movie, it cuts too close to home.  I remember the ships gathering in the estuary for the evacuation.."  She was a 10 year old school girl in Westcliff on Sea, a city at the mouth of the Thames, and must have seen the little ships going and coming back.  Sadly, some of the local fishermen lost their lives in the evacuation.

Saturday, July 8, 2017

Why Do Canadians Buy Canadian Mutual Funds?

Now that I am back in Canada, I see more Canadian financial information.  After looking for a Canadian stock index mutual fund, I thought, "why do Canadians buy Canadian mutual funds??".

I searched for "series D" Canadian equity mutual funds, and the minimum expense ratio (MER) was 0.60%.  This is quite high compared to US index mutual funds, which are around 0.20% or lower.

Then I searched for Canadian stock index ETFs.  The expense ratios are under 0.10%.  Here are some samples:
So why would anyone buy a Canadian mutual fund and give up over 0.50% of their return?  In today's low return environment, that is a lot.  I just don't see the point, am I missing something?

Wednesday, June 14, 2017

Canadian Customer Service Compared to U.S. Customer Service

You would think customer service would be identical north and south of the border, but it's not.  There is one fundamental difference that I run into constantly.

In the USA, if you the customer have a problem and common sense indicates that the store bends its rules or policy to make you happy, they generally will.  If not, they will certainly agree that the rule is silly and apologize profusely that they cannot take the right actions to make you satisfied.

In Canada, the RULES ARE THE RULES.  If you have a problem and the store's rules do not allow it to be solved, even though common sense says it should, you are out of luck.  Not only that, you will feel that you are causing the problem by exposing the weakness of their rule.

An example illustrates this difference:

  1. I want to transfer all my stocks and ETFs from my US broker Vanguard to my new Canadian broker, RBC Direct Investments (part of Royal Bank, a huge Canadian bank).
  2. This can be done by filling out a standard form.  Vanguard, like most brokers, requires that you get a special identity verification called a Medallion Stamp.  This is normally done by a US bank.
  3. RBC says that they can stamp the form, which makes sense since they operate in the USA, and they are the ones receiving all these investments.
  4. Long story short, RBC gives me the runaround of all their divisions (two weeks of calling and email) and finally says that they can only stamp their own form.  They cannot stamp the Vanguard form even though they know me, know what I am doing, I have lots of my money in their bank, I pay them lots of fees, and the form is almost identical to their form.  "It is a rule at the bank".  It is just a stamp saying they guarantee my identity, but they cannot do it.
  5. So I call Vanguard, tell them I cannot do the transfer because I cannot get the stamp.  Even though they are losing the business, they quickly come back to me and say they will accept voice verification of my identity using their voice identification system.  They will bend the rules to lose business and RBC will not bend the rules to get more business.  This is the essence of Canadian customer service - you will get good service as long as the rules allow it, otherwise you are SOL.

Saturday, June 10, 2017

Another Monte Carlo

Monte Carlo - Monaco

Some of my readers, well, at least one, are interested in Monte Carlo tools to evaluate retirement savings.

I will not bore you with the details of Monte Carlo simulation, it is covered in a previous blog post here.  It basically gives you a better estimate of how much you can spend in retirement based on your portfolio and the variability of the stock and bond markets.

The previous tool I recommended was from  I recently found another tool at this website that you can try.

Photo credit

Monday, June 5, 2017

Avoid CAD to USD Ripoffs

You can lose a lot of money converting Canadian dollars (CAD) to US dollars (USD).  This is not a big deal when you are converting $200 so you can buy that camouflage recliner at the Walmart in Buffalo.  It can be thousands of dollars if you are sending $20,000 to a relative or $200,000 on that retirement condo in Fort Lauderdale.

If you go to a Canadian bank and ask to change CAD to USD, you will get their standard rate.

Today June 5, 2017, the Standard Over the Counter Rate at the Royal Bank is $1.3791 USD per CAD.  Most banks are very close to this rate.

But, if you convert your money using their online brokerage, RBC Direct Investing, you will pay $1.3349 to get a USD, a savings of 3.2%.  On that $200,000 USD Florida condo, that is $6,410 CAD (real money).  You have to move money from your bank to the brokerage and back, but this can be done online in about 15 minutes.  Most bank-affiliated brokers have this service.

But what if you don't have a brokerage account or don't want to open one?  You could use an online money converter like  If you wanted to get $200,000 USD today, their rate would be $1.3669, which is 0.88% better, or $1,770 CAD.  Not as good, but it is still good money you want to keep in your pocket.  There are other online services you can investigate like

So if you are moving a lot of money to or from USD, I recommend you investigate alternatives to the simple and convenient method of going to the bank.  Oh, and avoid buying that hideous recliner, your wife will thank you.

Disclaimer: this is not professional financial advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.

Sunday, June 4, 2017

American Versus Canadian Golf Clubs

We just joined a golf club here in Ottawa, we have never joined a club before.   It is one of the top clubs in town.  My only previous experience was playing as a guest multiple times at high end country clubs in Dallas and Virginia.  The differences between Canadian and US clubs are interesting.

Canada: elite but practical
USA: elite and luxurious, Caddyshack without the comedy

What have I noticed?

TippingBring a wad of $1 bills and tip everybody: bag drop boy, locker room attendant, beverage cart girl..Never tip, employees are overjoyed if you do tip.
CartsAll golfers use powercarts, which have GPS, built in 2 way radio to call for food, refreshing towel, tees, ..Everyone walks and uses a pull cart. If you are really righteous, you carry your bag.
Beverage CartCart comes around every 10 mins with a good looking young lady in daisy dukes. Tip heavily and flirt.Beverage cart only operates if the course is full, most people just take free water. Cart girl is ecstatic when you give her 50 cent tip.
BarBar stocks 50 different kinds of single malt whiskey, 45 kinds of tequila, and lots of cigars.Bar stocks 20 kinds of draft. Cigars must be smoked off the property on the side of the road.
Lost ballsWoods and ponds full of high quality balls that no one bothered to findWoods and ponds scoured clean
Course MaintenanceSpare no chemicals or treatments to keep it beautiful. Good thing Trump took us out of the Paris Accord.Sierra Club would be proud.
Course DesignCourse designed by Jack Nicklaus or Greg NormanCourse designed by founder's brother in law Norman.
ClubsCleaned after every round, make sure to tip.There is a bucket behind the pro shop if you want to do it yourself.