Ricklee's Wealth Journal

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saro
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Re: Ricklee's Wealth Journal

Postby saro » Sun Jun 05, 2011 9:30 pm

Being able to access joy, at all ages and stages of life, is priceless.

It truly is, you, and the other posters on the FFJ are inspirations for me. Thanks Ricklee.

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RICKLEE
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Re: Ricklee's Wealth Journal

Postby RICKLEE » Sun Jun 12, 2011 3:12 am

saro wrote:Being able to access joy, at all ages and stages of life, is priceless.

It truly is, you, and the other posters on the FFJ are inspirations for me. Thanks Ricklee.


Thank you Saro!
RICKLEE

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RICKLEE
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When The Stock Market Goes South..

Postby RICKLEE » Sun Jun 12, 2011 3:25 am

The Market is in a bad mood these recent days. It has brought down the market price of most stocks, including my own. Here are my thoughts which govern my decisions.

My preconditioned and automatic thoughts
1. Has this fall happened before?
2. Is this drop temporary?
3. Are any of my companies actually performing poorly in absolute terms?
5. Are current conditions indicating a worsened business long-term outlook?
6. Does the current low price offer an outstanding opportunity to buy?

My emergent and not-so-automatic thoughts
7. If I had to sell, which would be the first I'd sell? Which would be the last?
8. Are there other investments that I would exchange into, given current prices?
9. Should I take my eyes off the market for a while?
10. If I had zero information about the market for the next several days/weeks/months, would I change anything about what I own today?
RICKLEE

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RICKLEE
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Quality versus Quantity

Postby RICKLEE » Sun Jun 12, 2011 3:45 am

I admit it. I love Quality.

I admire beautiful things that are well-made, enduring, and can hold my interest for years. Such things include wine, watches, art, certain pieces of clothing.

The question is, can Quantity multiply my joy?

I know of a man who loves vintage cars. But he is more known for HOW MANY cars he owns. In my thoughts, the Quality of the item has been replaced by the Quantity.

When I had a nice watch, the question was "what makes that watch so BEAUTIFUL?" When I had five nice watches, the question was "what nice watch do I want NEXT?" Having just one, puts me in place a state of enjoyment. Having so many, puts in motion a state of lack.

Now I sell things when they no longer interest me. Doing that concentrates my enjoyment with what I have.
RICKLEE

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RICKLEE
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Bigger Home? Not Me.

Postby RICKLEE » Wed Jun 22, 2011 4:35 am

I've just finished reading JD Roth's article considering moving out of his big dream home. It got me thinking about three things.

I enjoy my small home. Intimate and easy to care for.
I enjoy my neighbors. We just had a neighborhood BBQ potluck.
I enjoy our vacations. With low home operating costs, we can splurge on luxury vacations such as cruises or resorts. But even these doodads can lose their appeal after seven days. So why live in a mansion full time?
RICKLEE

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Health Trumps Wealth

Postby RICKLEE » Wed Jul 06, 2011 3:27 am

I want to be healthy and live in abundant health to age 120.

Yesterday, I visited my neighbor who is in hospital recovering from a stroke. As I looked into her face and searched for that spark of life, I found it in her eyes. "Never never give up" she said from her hospital bed, quoting Winston Churchill.

She lived her life to the full. She got remarried last year at age sixty, after battling cancer and recovering. It was the most heartfelt wedding I have ever had the privilege of attending. Shortly after that, she struggled with digestive complications from the cancer treatment. Finally she got that stroke.

Marci Shimoff in her book "Happy For No Reason" cited a study confirming that, once we are above the poverty line, no amount of income will increase happiness.

To me, health trumps wealth.
RICKLEE

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RICKLEE
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Bob Hope Lived to Age 100

Postby RICKLEE » Wed Jul 06, 2011 3:41 am

Here is what helps us age well, according to a doctor specializing in geriatrics:

- Genetics - no history of heart disease cancer or car wrecks (the big 3)
- Diet - healthy eating
- No Smoking and moderate Alcohol (abstaining from alcohol is as bad as excess)
- Laughter - or other methods to deal with stress
- Stable relationship - Bob was married to Dolores since 1933
- Exercise - golf or other daily activities
- Active mind - remembering jokes, reading, or other mental activities.
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How To Score Cheap Concert Tickets

Postby RICKLEE » Tue Jul 12, 2011 3:16 am

Went to Toronto to see if I could get cheap U2 Concert Tickets. One way is to hang around the ticket pickup window. As soon as someone has picked up their ticket, shout out "who's selling tickets". One guy was willing to sell his $100+ value ticket for $40 bucks. Why would someone NOT want to attend a concert and sell below face value? He won it in a radio contest and wanted the money more than the experience of the concert.
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Saving Taxes on Family Investments by Income Splitting Loans

Postby RICKLEE » Thu Jul 14, 2011 5:57 am

Last year my wife had savings account interest income of $500 which was taxed at her marginal tax rate of 30%. This year I proposed she loan me $20000 to invest. I would pay her interest of 1%. That is the rate prescribed by Canada's tax agency to avoid attribution rules. The investment would earn income and capital gains in my name and at my lower marginal tax rate which was ZERO last year.

This has several advantages:
1. Lower Taxes - If I earn the same income as my wife did, the family would save tax of $150, all else remaining equal.
2. Better Returns - Through careful selection of stocks I can earn better than my wife's savings account rates
3. Tax Efficiency - If I earn capital gains I have unused capital losses to offset them. My wife does not.
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Investment Tracking

Postby RICKLEE » Sat Jul 16, 2011 4:43 am

My money are like my employees. Each dollar is hired to produce a profitable return to me. It is wise to remember that you don't get what you expect, you get what you inspect. So it becomes important to monitor each investment individually and how they contribute to the performance as a team.

Some of the individual aspects are:

Return on Equity
Sales growth
Profit growth
Cash flow growth
Low debt
Reliability of profit
Dividend yield
Dividend payout ratio

Some of the group aspects are:
How the investments are assembled for Tax purposes
How concentrated or diversified is the group
How do the companies perform relative to each other
How do the companies perform relative to the Market

As I grow the family portfolio I am reminding myself of the fundamentals that my past success depended upon.
RICKLEE

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Wisdom Learned While Driving

Postby RICKLEE » Thu Jul 21, 2011 3:08 am

I love to go on long drives with a bunch of books on CD. I am more of an Auditory person than a Visual or Kinesthetic. I like to learn from listening.

I collected a lot of wisdom CDs. These are self-improvement books, often recorded by the author.

Here are a few things that I re-learned:

1. Embrace waiting. Do not fill waiting time with little productivity actions. Fully feel the waiting moment. Take time to breathe deeply, and feel at peace with the moment.

2. Write down ten most important events in my life. Ask myself whether these events came by grace, or by careful and long-range planning and execution on my part.

3. Write down my top 5 passions. Prioritize them. Be/have/do them.
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Data Roaming: The Shocking Secret That Can Punish You

Postby RICKLEE » Thu Jul 28, 2011 12:37 am

I was travelling in Michigan and brought my unlocked HTC phone. My wireless carrier was Fido. I had used the phone strictly for text messages and voice calls, never data. When I returned home I was shocked to find a $987 charge for data roaming. This was for 30 megabytes of data downloaded by AT&T Mobility to my phone at $30 per MB without my knowing. The charge went automatically to my Visa credit card.

It took three months and several phone calls to get Fido to reverse the charge.

If you ever get stuck with surprise data roaming charges, I recommend taking the following steps as I did to clear up the mess.

1. Ask the wireless carrier customer service department to reverse the unauthorized charge. They will probably refuse. Be polite and patient.

2. Ask the wireless carrier to investigate with the US Roaming Partner for their proof that you authorized the download. Be polite and patient.

3. Ask the credit card company to explain the problem and to reverse the charge. They will probably refuse. Be polite and patient.

4. Ask the credit card company to waive the interest on the charge for 3 months while you work with the wireless carrier to investigate. Be polite and patient.

5. Escalate the problem by asking to speak to a Manager at the wireless carrier and ask to reverse the charge. They probably will refuse. Write down the manager's name and the file number of your complaint. Be polite and patient.

6. Escalate the problem by asking to communicate to the Office of the President in writing. You should find a sympathetic and agreeable person at THIS level.

Conclusion: In the end, I had to go through 3 people at Visa, 6 Customer Service reps at Fido, 1 CS Manager, and 1 staff member at the Office Of The President. But I finally got the charge reversed and was charged only $60 plus tax...their current price of a data roaming package. I didn't get the whole thing reversed, but it was far better than doing nothing.
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Helping Aging Parents Deal With Credit Card Fraud

Postby RICKLEE » Thu Jul 28, 2011 2:45 pm

My mom is turning 70 next year. At our weekly coffee shop breakfast meeting, she showed me a couple of credit card bills from The Hudsons Bay Company. There she tearfully explained that somebody has been buying a lot of merchandise, fraudulently using her name on a credit card and sending the invoices to her address.

I helped her go to the department store, explain the problem to a customer service rep, and got a phone call to the credit card agency. In the end, all the charges against my mom were reversed.

I am glad my mom came to me with this because she could have silently suffered without sleep not knowing what to do.
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Spending Money On My Passions

Postby RICKLEE » Sat Jul 30, 2011 5:42 pm

It occurred to me that if I spend money on things I love to do, it is internally consistent and in alignment with my goals and dreams.

So I experimented with my Excel spreadsheet of monthly spending yesterday. First, I wrote down all my Passions: the things that I love the most. These were color-coded.

Then, I wrote down for the column for the current month (July) a brief description of each thing that I spent money on that aligned with my Passions. For example, I love having close relationships with family and friends, so for July I wrote "Breakfast with Parents".

Now that each passion is color-coded, any month that has a lot of color in the spending column is confirmation that I am well immersed into my passions. And if a month has very few entries I will know at a glance that I am depriving myself of the things that I love to do.
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Should You Invest In Retirement Homes?

Postby RICKLEE » Sun Jul 31, 2011 3:54 am

My brother in law is an astute businessman. He owns two retirement homes, and is buying and expanding upon a third. Since I am a stock investor, I briefly looked at 3 stocks that are in the same retirement home business. What I look for in a good investment are: dividend yield, stable payout ratios, consistent and healthy returns on equity, free cash flow, low debt to free cash flow leverage.

1. Chartwell Seniors Housing (CSH.UN). 240 locations. Market cap. $1.16B. Dividend Yield 6.9%. Payout ratio Negative. Return on Equity Negative most years. Free Cash Flow mostly Negative annually, recently just $1.3M. Debt/FCF 1,400. Conclusion: I would not buy it.

2. Extendicare REIT (EXE.UN). 258 locations in Canada and USA. Market cap. $846M. Dividend Yield 8.2%. Payout ratio 133%. Return on Equity Negative most years. Free Cash Flow Positive. Debt/FCF 8.5. Conclusion: better than Chartwell...

3. Leisureworld Senior Care Corp. (LW). 26 locations. Market cap. 266M. Dividend Yield 7.9%. Payout ratio Negative. Return on Equity Negative most years. Free Cash Flow slightly Negative this year, 13M, 8M, 7M previous years. Debt/FCF Negative. Conclusion: I would not buy it.

Owning a retirement business is more complicated than residential real estate because of government rules/regulations that vary among jurisdictions. If I had to pick one stock in the retirement home industry, it would be Extendicare REIT. It has the highest dividend yield, positive free cash flow, moderate debt leverage to free cash flow.
RICKLEE


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