Friday, January 31, 2014

The Longest Undefended Border in the World, But You Better Not Have Too Much Wine

Living in the US for 17 years and being from Canada means we have crossed the US-Canada border many times in both directions by car and plane.  For about 10 years, we did it as Canadian citizens, but lately as Americans, so we have a diversity of experience as well.  There are distinct differences between entering the US and entering Canada.

Entering Canada and dealing with Canadian border officials
  • Generally not very friendly.
  • Always ask about what you are bringing into Canada, gifts, alcohol, tobacco, and lately guns.  If you answer incorrectly about alcohol, you are in trouble, always say it is for personal drinking, just a little tip.  Also see anecdote below.
  • Once said "welcome back" in the last 17 years
Entering USA and dealing with US border officials
  • Generally friendly
  • Always check your visa status and carefully check your documents
  • Lots of technology at their desks: computers, cameras, fingerprint scanners..
  • Generally say "welcome home" or similar
An anecdote about Canada: we were crossing the border at the Thousand Islands bridge and I put some wine and whiskey in the car absentmindedly.  When questioned by the Canadian customs dude, I admitted that I was not sure exactly what I had so they pulled us over and found out we had one extra bottle of cheap supermarket wine.  I said that I would throw it out and they said no, you cannot throw it out, you have to fill out a surrender form, then officially throw it out.  This caused me to ask with annoyance what involves less paperwork, paying the duty or tossing the $5 bottle of wine?  I got a stern rebuke from the customs lady and ended up paying $11 in duty.

Why are there differences?  My theory: The US is mostly concerned about illegal immigration and terrorists, so they want to know who you are and your status.  The tax and duties for bringing in goods are so low they don't really care. Canada wants to make sure that they get their tax and duty so they care more about what you have, particularly stuff that is heavily taxed like liquor and tobacco.  Canada wants to make sure that the high domestic prices for liquor and tobacco are not threatened by smugglers.



Thursday, January 30, 2014

The Stock Market is down, Should I Sell?

This question comes up a lot these days from my wife's friends: "..the stock market is down, should we sell?"

My answer is always "NO" based on the principles outlined in the Investing Philosophy Part 1 blog post.
  1. You cannot time the market.
  2. Transactions have costs which hurt your returns.
  3. Buy and hold a diversified portfolio of low cost index mutual funds
Maybe an easier way to look at the situation is to draw an analogy to buying steaks.  If you heard that the Supermarket was selling Tenderloin steaks for $15 a pound, down from $20 last month, you would say it is a good time to buy steaks.  Well, the companies listed on the stock exchange have not changed much in the last month and you can now buy them for 10% less than what they cost last month, so isn't it a good time to buy?

Just to prove that I am not a hypocrite, or not as big a hypocrite as you might think, I decided to check on my track record of buying and holding during a market downturn.  I pulled the transactions from the worst downturn in the past 20 years, February to March 2009.  I was a net buyer of stock mutual funds during this period, and I also bought less risky money market and bond funds as well.  The table below shows some of my stock purchases during this time.
Investment Transactions from Feb 1 2009 to March 30 2009
The returns over the last 5 years shown in the last column are very good as we all now know that the market has gone up since early 2009.  However, I vividly remember the talk at the time around the watercooler was all about selling stocks, buying gold, holding cash, etc.  There was even a little discussion of the appropriate firearms to buy, but that might have been at the bar, not the watercooler.

Anyway, the answer is no, don't worry about the market, keep a diversified portfolio and sell when you need to either re-balance or need the money for something useful.


Tuesday, January 28, 2014

Canada Pension Plan (CPP) versus US Social Security (SS) - "Star-Spangled Happiness" or "On Guard"?

Doing the Canadian Financial Planning course allows me to look at the US and Canadian government retirement systems.

One would think that good old collective high tax Canada would have a better system, right?  Well, maybe not, it depends, your results may differ, etc. etc.

Canada

  • Health care is no cost
  • Maximum CPP premium is $2,425 Cdn for a working person
  • Maximum CPP benefit per month at 65 is $1038 Cdn.  This is fully taxable.
  • Maximum OAS benefit per month at 65 is $551 - $1047 Cdn
  • OAS is clawed back (taxed back) starting at about $31,000 yearly income for a couple (it's complicated) and it is completely clawed back (you lose it completely) at around $116,000.  Anyone with appreciable savings, a pension, or who starts to draw on their RRSP will generally lose some or all of the OAS.  Even if it is not clawed back, OAS is taxable.
  • Summary: a person will get up to $2085 Cdn per month, but more likely you will get around $1,000.  It is taxed.
USA
  • Health care is provided by Medicare with premiums of $117 to $405.  The top premiums are for people earning well over $400,000 US.  Compare that to the clawback limits on OAS above.  The system is complex (parts A, B, C, D) and seems to be designed to ensure that anyone with reduced mental capacities will not be able to figure it out.
  • Maximum Social Security and Medicare tax for a working person is $8,950.
  • Maximum Social Security is $2,642 at age 65.  This is only partially taxed.  If you earn over $44,000 as a couple, 85% of it will be taxed at normal income rates.  This is not a clawback, just a normal income tax.
  • Summary: a person will get up to $2,525 per month after paying for Medicare, if you were a high income earner and have appreciable savings, pension.. you will likely get about $2,300 per month and 85% will be taxed.  
So which system is better?  Hard to say definitively.  The social security tax in the USA is higher than the CPP tax in Canada, but the benefits are better in the USA.  Medicare in the USA is complex to understand and costs something per month, but you have more freedom in terms of supplementing this health care.  Speaking like a lawyer, it depends.....

So do we have:

Star Spangled Happiness?

OR

Is Canada Standing on Guard for You?

Can we Settle this on the ice?



Monday, January 27, 2014

How to Have a Jersey Accent

Career Advice from a Jersey Girl

Just went through the Job Search/Job Transition/Retirement orientation online workshop from a company what was hired by my former employer.  Lots of good advice:

  • Have a goal or goals in mind
  • Treat it as a project that requires work, diligence, followup, training, coaching..
  • Don't sit back and let the jobs come to you
  • etc.
It was given by a very nice lady with a strong New Jersey accent and she sounded like a real Jersey Girl (not that there is anything wrong with that).  It brought to mind the Sopranos, Jersey Shore reality series, and Chris Christie.  I won't even try to characterize the Jersey accent, the following video is probably better.

Sunday, January 26, 2014

Consulting Opportunities Hard to Find

Continuing on my dual path to a second career: consulting while learning to be a financial planner.  The learning bit is progressing as I churn through the online course.

The consulting opportunity bit is slow.  A few leads from contacts, some correspondence, but nothing solid yet.  This seems to be a common approach when I check up on many of my old colleagues from Nortel - many of them are running XY Consulting Inc, where XY are their initials.  If I start a consulting corporation, I will definitely not be calling it MW Consulting Inc.  It is a tip off that you are a one-man-band consulting outfit.


Friday, January 24, 2014

Bring Your Own (Used) Device - the new trend in Mobile

For the past 7.5 years, I used a company phone for wireless, which was good because it was free but bad in that you had to use what you were given.  No Iphones, no broadband data until 2013, no Android Apple Cobbler (or whatever they call the latest version).

The new trend in Mobile is "Bring Your Own Device" for both the enterprise and the operator.  People sometimes want to use their personal device for work, and they also often want to buy a device to use with their wireless carrier, rather than taking what is offered and signing up for a two year contract.

So I took the plunge and got what I wanted, an Iphone 5, which I will use on AT&T.  The pricing of "..your own device.." is quite interesting:

  • Cheap nasty Android phones from no-name companies cost $150-250.  Not interested.
  • Decent Android phones like Nexius 5: $350-450.  A possibility but I wanted an Iphone (like the Youtube clip).
  • New Iphone 5C or 5S: $600-$800.  Expensive.
  • "Refurbished" Iphone 5: approx $500
  • Used Iphone 5 (32 GB): $300-350 on Ebay
Being economical (nice word for cheap) and hopefully smart, I reasoned that there is nothing you can do to refurbish an Iphone as it is a totally sealed unit - it either works or it doesn't.  Given that Ebay says I will get my money back if I do not get what I ordered, I bought a used Iphone 5 for $340 and it seems to work like a charm.  I doubled down by going to Best Buy and asking them to price match with Amazon on a case and saved another $20.

So it is BYOUD for me.

Iphone Zombie wants an Iphone

Thursday, January 23, 2014

A Job on Broadway?

Wouldn't it be great to have a job in the entertainment industry in an area you love, like Broadway Musicals  This would be a great second career!  Just like the song "On Broadway":

They say the neon lights are bright on Broadway (on Broadway)
They say there's always magic in the air (on Broadway)
But when you're walkin' down that street
And you ain't had enough to eat
The glitter rubs right off and you're nowhere (on Broadway)

Why would I consider this?  We saw a great new show last night, "Beautiful", the musical about Carole King.  It is a fantastic show with a great cast including one very talented Canadian, Jake Epstein, and Jessie Mueller as Carole King who is awesome.  I highly recommend it.  They even sang "On Broadway"!

Anyway, a job on Broadway would be great, except I don't live in New York, have no experience, no training, and no idea what jobs are available.  It is nice to dream.

Monday, January 20, 2014

Online courses - good but not as good as I thought

I am taking the Canadian CFP course as a purely online course.

Pros

  1. Work at your own pace, whenever you want
  2. Can work on the course wherever you can get Internet access
Cons
  1. No help as far as I can tell, you are on your own.
  2. Tests have to be multiple choice or have unambiguous answers.
  3. No learning from other class members.
I did not realize the value of getting live help or doing an old-style written test.  For example, one test had a clearly wrong answer, but there was no one to alert in real time, my answer was just marked wrong.  In another example, I had to round the numbers to nearest dollar and if I did not, it was marked as incorrect.  I guess the MOOC (Massive Open Online Course) concept is going to be a little more difficult than the blogosphere seems to think.

Anyway, I am continuing the course.  The only other thing I noticed is that the Canadian "social safety net" for retirement is not as good as I thought.  Maybe I should have expected this since Nortel pensions were better insured by the US government than in Canada.

P.S. I removed the moderation of blog comments.

Friday, January 17, 2014

My Investing Philosophy Part 2

This Part 2 blog entry will cover my approach to diversification and bonds.

Diversification is simple concept epitomized by sayings like "don't keep all your eggs in one basket".  If you rely on a small number of investments, your return could be hurt badly by a few random events.  For example, if you owned 10 stocks and one was BP, you could lose a lot when they had a big oil spill in the Gulf of Mexico.  On the other hand, if you owned 100 stocks, and the same unpredictable event occurs, the effect would be small, and might be offset by a positive event in another stock, say the announcement of a lifesaving drug by a drug company.  You also reduce your risk by combining different types of investments.  If you had a 50-50 split of bonds and stocks last year, you would likely beat an all-bond investment mix by around 15%.  So diversification reduces risk and I won't go much further into the different types of risk.  My investments are diversified as follows (this is a pretty conservative allocation).



Bond investing to me is rather straightforward.  Bonds give you income with lower risk since you are first in line to be paid by a company before the equity (stock) owners.   Typically, bonds return less than stocks but are less risky.  In the USA, there are three factors that drive bond investments for the average investor.

  1. It is costly to find and acquire individual bonds.  Bond ETFs and mutual funds are available with very low expenses.
  2. You can save on taxes if you buy Municipal Bonds in your taxable accounts versus regular government or corporate bonds.  Otherwise, you pay full state and federal income tax on bond income.
  3. Indexing gives you low costs, lower risks, and diversification (see Part 1).
So I typically keep index mutual funds with taxable bonds in my IRA and 401K and municipal bond index funds in my taxable accounts.

Disclaimer: these are my opinions and I accept no liability for the content of this blog, or for the consequences of any actions taken on the basis of the information provided in the blog.

Thursday, January 16, 2014

Learning the Old Fashioned Way

I started the online training for the Canadian CFP designation.  I don't have the printed material, but I do have access to the course material through the website.  There is a deadline at the end of February to turn in some assignments, so I need to get to work.

Fired up the browser, opened the course, went through the slides, took notes in a notebook, did the online quizzes.

Then it occurred to me that taking notes in cursive writing in a notebook is probably not the way higher learning is done anymore.  I should probably be taking notes on a computer or a tablet, storing the notes in the "cloud", maybe doing some social networking with my fellow students, take some ADHD drugs to improve my concentration, and be sending cheat notes with Snapchat.

Taking notes with a pen in a three ring binder is so old-fashioned.

Wednesday, January 15, 2014

My Investing Philosophy - Part 1

Sometimes I get asked about my investment philosophy - how have I saved for retirement?

I was lucky enough to go to a good MBA program at the University of Toronto in the mid-80's that taught investing.  Between the MBA courses and some reading, I came up with an approach that is successful for me.

The professors taught me about efficient markets, indexing, diversification, CAPM, MPT, beta, and alpha.  Their teaching was rooted in efficient markets and I took it to heart.  Part 1 will cover my equity investing approach based on what I learned, Part 2 will cover bonds and portfolios.  My approach:

  1. It is very hard to beat the market in picking individual stocks.  Why?
    1. There are professionals out there who get more information better and faster than you.  They will beat you in terms of buying winners before the price goes up and selling losers before the price goes down.  They will also do better analysis because they have more time and better tools.
    2. There are inside traders out there who will beat you even more because they have information you and the general market do not have.  This is a crime but seems quite common right now.
    3. There is no pattern to stock results, so looking at the past tells you nothing about the future.
    4. Buying and selling has transaction costs that cut into your profits and increase losses.
    5. It is impossible to identify the top or bottom of a market, that is, you cannot time your buys and sells.  Here is the latest New York Times article covering the proof of this.
    6. If you buy individual stocks, you do not have enough diversification and your losses and gains will be more acute.
  2. It is very hard for a professional mutual fund or ETF manager to beat the market.  Why?
    1. There are professionals out there who get more information better and faster than your manager.  Just like point 1. above.  
    2. There are inside traders out there who will beat your manager.
    3. There is no pattern to stock results, so looking at the past will not help the manager.
    4. Buying and selling has transaction costs that cut into the mutual fund's profits and increase losses.
    5. The manager cannot time his buys and sells to increase returns.
    6. The mutual fund manager, the company running the fund, and others have to get paid which further increases costs and reduces your return.
    7. I went to MBA school with a representative group of people who became portfolio managers and, sorry to say, they are not good investors.
  3. The best approach is to buy and hold index funds or ETFs with low costs.  Why?
    1. History tells us that this is the lowest risk way to get good returns.
    2. You will never be beaten by the market because you bought the market.
    3. You will not lose a lot of your profits to expenses as the fund will not buy and sell much, does not need an expensive stock-picking manager, and marketing expenses are low.
    4. You will not be burdened with a poor mutual fund manager who picks bad stocks.
    5. You will get diversification as the indexes contain hundreds or thousands of stocks.
    6. In the USA, Vanguard, Fidelity, and other companies offer low cost index funds that track the S&P 500, Russell 2000, and other big national and international indexes.
The best read for the average person that covers this approach is a book my professors recommended at MBA School.  "A Random Walk Down Wall Street" by Burton S Malkiel.

Let's take a look at a simple comparison of some funds that I own or owned at one time.  The first three Vanguard funds are index funds with expense ratios under 0.25%.  The last two funds are higher cost (0.5-0.76%) managed funds.  The important number is the long term return (10 year).  The index funds beat the managed funds by about 1% over 10 years.  It doesn't sound like much but if you look at the return on $10,000, you would have an extra $1,046 with the index funds.

Comparison from Vanguard Mutual Funds Website

Disclaimer: these are my opinions and I accept no liability for the content of this blog, or for the consequences of any actions taken on the basis of the information provided in the blog.

Tuesday, January 14, 2014

Sharpening up the Old Skills

Got a chance to sharpen up the old technical skills over the last few days:

  • Take apart hair trimmer, solder in new battery, re-assemble, and it works. 
  • Edit videos and upload to Youtube (see previous).
  • Turn old PC into home file server using Freenas, then turn it into a media server by enabling DLNA plugin and configuring the storage.
    • Create ISO images on CD and USB stick using PC
    • Reconfigure PC BIOS to boot from a USB stick instead of hard drive or CD.
    • Open a UNIX shell and use ancient UNIX commands to check out the directories, permissions, make file links, edit files, etc.  It is amazing that people still use UNIX, which was considered a "techy OS" in the early 80's.  Some part of my brain is still intact from back then because I remembered the commands cd, ls, ..
Next step is to set up my Raspberry PI microcontroller and create a new widget.

Monday, January 13, 2014

Why Not go back to Telecom Equipment Industry?

One of the questions in my career search is "why not go back to the telecom equipment industry" - I worked there for 20 years and also have 7 years experience with the customer (Wireless Operator)?  I am referring to the BIG Telecom Equipment industry, not the startups doing apps, specialty products and services, niche players.

First, the big telco equipment industry continues to consolidate according to the usual process of national, then regional, then global consolidation to a few large companies with many small niche companies, as described in many articles like Telco takeovers, round 2 (CNN). Note that standalone large telecom equipment companies like Lucent, Nortel, Siemens have all disappeared in the last 10 years through partnership, bankruptcy, and mergers.  This means fewer jobs, lower salaries, layoffs, and less innovation which means less interesting and less rewarding jobs.

Second, for me, it would be "same old, same old", and I would like to try something new.  20 years of Nortel with the last 6 dealing with layoffs and problems was enough experience.

Third, the industry is concentrated in a few geographic areas: Shanghai, Shenzhen, Dallas, Silicon Valley, Stockholm, Helsinki, Paris, New Jersey.  I lived in Paris and Dallas and neither was a great fit, I am not sure that the other spots are any different.
  • Dallas - good work environment but not a great place to live for us.  Nice people and low cost of living but not much for a couple without kids to do unless you play golf or like watching sports.
  • Paris - poor work environment but a great place to live.  Nice people, nice architecture, we speak French, lots of different things to do but it is very very hard to get anything done at work.  Below is a picture of the office workers threatening to blow up the Chateaufort office after Nortel's bankruptcy.  I don't think they were really serious but it gives you a flavor of the work culture.

So it brings me back to doing something different like consulting with smaller companies or being a financial planner, or maybe ..?

Sunday, January 12, 2014

Vancouver to Whistler by Train with Steel Rail Blues by Gordon Lightfoot

Paperwork

Spent yesterday catching up on paperwork, going out to a movie (American Hustle) and making a video.

  1. Managed to pay for the Canadian CFP Course after following all the rules.  Only problem was an error in the website that allowed me to enter that I lived in the United States but then would only allow me to select a province and Canadian postal code.
  2. Received the forms to continue my health insurance (COBRA) - very important.
  3. Filed some health claims.
  4. American Hustle is a good movie with some great acting, think of it as a 70's take on The Sting.
  5. Created a video from the stills and video that I took on a train trip from Vancouver to Whistler.  The tools available today allow even a rank amateur like me to do something that is at least watchable, way better than the old Super-8 home movies of old.   I will link it to the blog.

Friday, January 10, 2014

Networking - a new way to say "Let's go to the Bar"

Spent some time networking today with colleagues from NII.  Rushi Shah organized a "Happy Hour" through my "Ex-NII Employees" group on Linkedin.  Seems like an oxymoron to call it a Happy Hour due to the layoffs, but everyone seemed happy.  We met at American Tap Room in Reston Town Center.

Happy Hour Networking at American Tap Room

Reston Town Center is a "downtown" for the suburb of Reston.  All the parking is hidden away and it is set up to seem like a real old-style downtown - lots of restaurants and chain stores and walkable - very pleasant but a little artificial feeling at times.  When I worked there, someone asked me for some spare change on the street, which had never happened before.  I swear the management of the Town Center had hired this person to be a panhandler to give more of a downtown atmosphere.

Reston Town Center Scene
Back to the networking.  When I started working many years ago, we would say "let's go to the bar next door".  Now we network at the bar, but it's still good.


Thursday, January 9, 2014

More "What I used to Do" Multimedia

Due to the overwhelmingly positive response to my previous posting on my old job and the photo, I found some other things to post.

It is almost time for the biggest annual trade show for Wireless: Mobile World Congress, which is held in Barcelona in late February.  This will be the first year since 2007 that I will not attend this huge trade show which usually gets over 70,000 attendees.  The illustration below gives you an idea of what happens at the show and what I usually do.


Did Not Follow the Rules, Back to Start

After reading the 42 page description of the Canadian CFP course and re-reading 4 pages of emails, I decided to go ahead and sign up for the course.  Called the institute up, got someone who sounded exasperated on an unrecorded line (lucky for them).  It was obviously not their day, although I did not ask why as we Canadians don't pry into other people's business.  I was told to go back and fill in the personal profile online and call back after that was done, so it's back to the start of the process.

On the networking front, the Linkedin group is going well and there are some initial discussions with contacts, so who knows?

You may also have noticed that the blog has ads from Google.  This was recommended by Google when I started the blog.  Unfortunately, they must target the "strange ads" for the new blogs.  When I view the blog they try to sell me things that will grow hair or otherwise enhance the male lifestyle.  Either I have a weird profile or the algorithm just targets new blogs with weird ads.  Don't worry about me getting rich on the blog ads and giving up on my next career, I have earned all of $0.92 so far and they only pay you when you get to $100.

Wednesday, January 8, 2014

Some Progress

Now making a little progress.

My efforts to find out about training for financial planning yielded expected results:

  1. USA: I can do it on a plane, I can do it in the lane, I can do it any place, as long as I pay in dollars from the United States.
  2. Canada: There are two options described in a three page email with a long list of rules, and the exams are proctored in Canada.  However, the information provided was very professional.
The training for CFP certainly corresponds with the character of each country (see previous post).

My efforts at networking with colleagues are also progressing.  I started a group for ex-NII employees on Linkedin and got a good initial sign up.  Here is the link: ex-NII Holdings Linkedin group.


Tuesday, January 7, 2014

Differences: North and South

As part of my search, I am refamiliarizing myself with the differences between the US and Canada.  Most non-Canadians assume that the countries are extremely similar, but having lived and worked in both countries, I would say there are definite differences.  No judgements on what is better, they are just different.


  1. Canadians expect to pay taxes to the Government so it can work and help them - Americans do not like Government in general and hate paying taxes
  2. Canadians follow the rules and expect problems if they do not follow the rules - Americans expect customer service even if they broke the rules
  3. Canadians expect inconveniences - Americans expect ultimate convenience in all things (it should be in the Constitution).  Most anything you want in the US is available as a drive-through - liquor stores, pharmacies, funeral homes, banks, ..
  4. Canadians are more collective since they will freeze to death if they don't stick together - Americans are more individualist, although they might change if we continue to get this cold weather.
  5. And on and on
My experience involve 2. and 3.  I am trying to find out how to take the courses to become a CFP in the US or Canada.  In the US, there are about 50 institutions offering courses live online, in classes, self-paced online, and there is competition to get your money.  In Canada, there seem to be three choices for online learning, the toll free number to get information does not work from the US, and they have not answered the email I sent to the most promising of the three options.  Although the pricing in Canada is reasonable, there is no competition as far as I can tell.

Check out future postings to see how I get on with understanding the CFP education process North and South.

Monday, January 6, 2014

Photos from previous career

What did I do before?  I was a telecom executive with Nortel Networks (20 years) and NII Holdings (7 years).  My jobs including being product manager for base stations and devices, general manager for GSM products, Mesh Networking, WIMAX, and VP of Technology.

Everyone says you should add multimedia to a blog, so I have included one humorous photo from my last job where we were being entertained by a vendor in Chile at a "typical Chilean restaurant" where they make you dress up like a Chilean.  There is one person from each of the following countries in this photo, can you guess which is which?


  • China
  • Canada
  • USA
  • Mexico

The Beginning

Just left my employer of the last 7.5 years due to a reduction in force, age 56, with a plan to move to a second career but not sure what it should be. This blog will document my progress in figuring out what to do and how to do it.

My choices for next career are varied:


  • Consulting based on my 20+ years of experience in telecom, particularly wireless?  This is not really a second career, as it is an extension of my previous career.
  • Become a financial planner and help others reach their financial goals?  This would involve retraining and passing certification in the US and/or Canada and then either joining a company or starting my own business.
  • Re-learning how to program and writing apps?  My past experience is with structured programming in ancient languages like Fortran, C, PL-1, Cobol.  Everything is now object oriented and done in C, C++, Java, ..
  • Take a low stress low skill job part time and spend more time on leisure activities?  This might involve the phrases:
    • "Did you find everything you wanted"
    • "Pull forward to the second window"
    • "Welcome to XXX, do you need a shopping cart"
    • "Hello, my name is Felix and I am calling to survey you about ..."