Getting The Right Credit Card

I was in Toronto two weeks ago celebrating with other bloggers as RateHub.ca launched a new credit card comparison tool. During the event, we got the chance to try out the new tool, and, perhaps unsurprisingly, I learned I wasn’t using the best credit card.

Are you using the right credit card? Click here to try RateHub.ca’s new credit card tool

My primary card is the Gold American Express. I’ve had it for a few years, and it’s my favorite for travel rewards. I love the Amex point system, the car rental insurance, and the special perks like front-of-the-line “early” access to concert tickets or deals on other events or gift packages. However, American Express is not accepted everywhere, and it seems the number of merchants that do accept it are steadily declining. When Costco ditched Amex this year, we could no longer accumulate points on groceries, which is some of my fiancé’s and I biggest monthly spending. As a result, my points earning ability on Amex is dwindling.

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I also have a MBNA Smart Cash Mastercard, which I use whenever a store doesn’t accept American Express, but that card’s rewards are also lacking. They cap rewards at a certain amount of spending per month and for some purchases, don’t hand out any points at all. It used to be better, but the card has undergone two changeovers in the time I’ve been a customer and it’s gotten progressively worse. When they changed their online platform and I couldn’t log-in for the past 2 months, I was finally frustrated enough to cancel the card. I called them a few days ago and am now just waiting for the confirmation of the closed account to come in the mail. Good riddance.

But I NEED a good credit card!

So I’ve been on the hunt for a Visa or Mastercard to replace it. Originally I was wooed by the RBC WestJet Rewards card, which ranked high in MoneySense’s in-depth comparison of credit cards. Well, apparently it wasn’t that in-depth because it missed the best card for me. Thankfully, RateHub helped me find one that works… once I scroll past all the American Express cards.

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The results of the RateHub credit card comparison tool for my spending and rewards profile

I’m applying for the BMO World Class Mastercard as soon as confirmation of my MBNA cancellation comes through. Once I have my new card, I’ll use up the rewards on my American Express (my fiancé and I have lots of travel planned this year!) and then cancel that card as well.

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Comparison of the credit card I’m currently using (Gold Amex) to the one I am switching to (BMO World Elite)

Compared to my Amex Gold card, I have a lot to gain. The BMO World Elite Mastercard has the same annual fee as the Amex, will be accepted more places, AND I’m not giving up the extra perks I loved about my Gold Amex, like travel insurance, car rental insurance, and purchase protection. I won’t be getting front-of-the-line access to concert tickets or this great little discounted gift perks, but because there’s so much dollar rewards to gain, I don’t think I’ll miss them.

Credit card rewards work for me because I never carry a balance on my cards. Credit card debt is expensive — a 20% interest rate is NOT worth ANY rewards the credit card could possibly be giving you. If you have debt, stay away from credit cards until you pay it off!

Between travel and the wedding, I’m making some major dollar purchases this year, and I want to maximize my rewards wherever possible.

What credit card do you use? What rewards are most important to you? Did RateHub’s credit card tell you you’ve got the right card or the wrong one like me?

Index Investing Just Got Easier – The CCP Portfolio is now made up of only 3 funds

A few days after I wrote a post singing the praises of the Canadian Couch Potato Portfolio, they released their 2015 re-balancing allocations.

The Canadian Couch Potato index investing strategy now only consists of three funds:

VXC.TO, VCN.TO, and VAB.TO

Your allocation in these three funds is determined by your risk tolerance. You can take a peek at the different breakdowns of the suggested allocations here.

The old allocations held more ETFs — XRB.TO, ZRE.TO, VXUS.TO, WTI.TO, plus the ones that listed above that make up the new Couch Potato Strategy — depending on your risk tolerance and portfolio size. Reducing the couch potato to just three funds seems like a big change, but it’s actually just minimized the portfolio’s risk while keeping more or less the same exposure to the market.

Some people will wonder if they can have an adequately balanced investment portfolio with only 3 funds.

The answer is YES.

The funds suggested by the CCP break down as follows:

VXC.TO – International Equity (everything except Canada)

VCN.TO – Canadian Equity

VAB.TO – Canadian Bonds

From that you can see you will hold both stocks and bonds in your portfolio, and have both local and international exposure. You can modify how much you hold in each based on what kind of investor you are. For example, if you are a more conservative, risk-averse investor, you will choose to invest more in VAB, the Canadian bond fund. If you are an aggressive, risk-tolerant investor, you will invest more in VCN and particularly VXC.

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In order to minimize taxes, you will want to keep VXC out of your TFSA, and only hold VAB and VCN.

You can hold any of the funds in your RRSP

In addition to axing a bunch of the suggested ETFs, the couch potato strategy has changed in how much it suggests you have in the bank for each investment.

If your portfolio size is….

$0 to $50,000

The Tangerine Investment Funds (which I also mentioned in my previous post about index funds) are your best bet. These are well balanced index portfolios with very low fees. I have been investing in Tangerine funds for as long as I’ve been banking with Tangerine (over 5 years) and they’ve been fantastic for balance and return.

over $25,000

The TD e-Series funds. The CCP actually suggests four different e-series funds for a balanced portfolio. You can view them here. I have personally never used the TD e-Series funds myself, but I know other bloggers do (like Save Spend Splurge and Krystal of Give Me Back My Five Bucks) and they have nothing but good things to say about them. It sounds like they’re a little tricky to set up, but once you get going they are very easy to manage.

over $50,000

The ETFs listed in this post. Initially ETFs were suggested only for people with big portfolios, then over the past few years they became trendy for everybody, and now it looks like we’re swinging back to big money again. I started investing without $50K and nothing blew up in my face, but I think the real caution here is because ETFs can be expensive to trade. However, I use Questrade which lets you purchase ETFs for nearly free (usually costs me $0.01 to $0.03 to make a trade). For this reason, it’s relatively affordable to recreate the CCP strategy with less than $50K.

For most investors, the CCP is the perfect portfolio — even though it seems dead simple with only 3 funds, it is really perfect. Others like myself might want a little more “fun” in the market, and use the CCP as a foundation then opt to buy more specific ETFs or common stocks. As an MBA in Finance I can’t help but want to play the market a little, so I allocate some of my portfolio to my own investment strategies, but the heart of it is still the CCP approach.

If you could travel anywhere in the world, where would you go?

Last month, I blogged about my travel plans for 2015… and like all good plans, they’re already being drastically changed. My fiancé and I have added one more trip to our itinerary — a long weekend in British Columbia to attend a friend’s wedding — and are making major adjustments to what was our major international trip for the year.

Originally, my family was planning another elaborate international vacation, but now not one but two my cousins are pregnant and due in the summer. With two couples backing out of the festivities because they’ll have newborns, we couldn’t swing the trip, so my fiancé and I are now planning on something else. We just don’t know what yet.

Not only can we now plan something cheaper, we have a choice of dates. Previously the family trip was planned for the first week of August, but now that it’s off the calendar, we have the freedom to go whenever we want — which means we can even take a “proper” honeymoon and go on a trip after the wedding. Now the problem is only where to go.

My Top Travel Choices (in no particular order):

1. India

I’ve been crazy about the idea of traveling to India for a few years now, but the want definitely intensified after I read Shantaram by Gregory David Roberts (my fiancé’s favorite novel!). India has always struck me as a beautiful, exotic place with a rich history. I’m a little wary of some of the food, but I feel adventurous enough to try it ;)

2. Japan

Busy and expensive, I know Japan doesn’t rank high on a lot of people’s lists, but I’ve always found the country and culture elegant, and I would love to see it firsthand. I feel like this is a country that would be beautiful to visit any time of year… so maybe I need to see it 4 times in every season. Why not start this year?

3. Peru

One of my best friends traveled here last year and I wish I could have gone with. From the Amazon River to the Inca Trail, Peru is a must. I’d love to see all of South America at one point, so why not start here? This trip is relatively affordable, but I recently peeked at the Government of Canada travel advisories and there’s some warnings for Peru that made me a bit nervous.

the "cookies and creme" landscape of Iceland

the “cookies and creme” landscape of Iceland from my sister’s photos

4. Iceland

Iceland is on both mine and my fiancé’s must-travel-to lists, and one of my sisters is currently there! (God knows what possessed her to travel there in January) I’d love to spend a summer week taking in the natural beauty of this remote island. I really want to visit the lagoons, as well as go hiking. The landscape is so unique I can’t wait to explore it.

5. South Africa

I have so many friends from South Africa, I can’t help but want to go there myself after all the great things they’ve said about it. However, it’s still a very dangerous country if you’re not familiar with it. Nevertheless, South Africa tops my list of “adventure” vacations. I’d love to see some exotic animals in the wild, as well as enjoy the culture and natural beauty of South Africa.

6. Las Vegas

My fiancé has never been to Las Vegas and last time I went I was under the age of 21, so it might be time for a visit. Right now you can win a trip for 2 (including flights + 6 nights stay in a 5-star hotel!), which would certainly make this a “frugal” trip — shopping and fun aside ;) Maybe for my stagette?

I would also love to see San Francisco, New York, or Phoenix a second time around, or go somewhere new like New Orleans.

…. or maybe I can do a whirlwind tour and see them all ;)

Looking for LOLz? Eric & Ilsa Struggling To Get By On $450,000 Per Year

Have you heard of Eric & Ilsa? This Vancouver couple are struggling to come up with a workable budget for $450,000 per year, because right now they are living on the edge, people, THE EDGE. The couple lives rent-free in a relative’s house while they build their $1.1 million dollar dream home. Their five children attend private school, except the baby, who is cared for by a full-time nanny, mom on maternity leave, and dad who only works 2 days a week.

As you can imagine, I don’t really feel all that bad for them.

The comments on the original post are good…

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… the parody accounts are better

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I love it.

Because these people suck.

How I Got An MBA For Cheap

As a few of you might already know, I spent the end of last week catching up with Cait from Blonde On A Budget, Krystal of Give Me Back My Five Bucks, Jordann from My Alternate Life, and Jess of Mo’ Money Mo’ Houses in Toronto for a RateHub event (post about how I’m switching credit cards coming later this week!). We had a great time, and one of the things everyone asked me was:

How is the MBA?

Um, the MBA is the most exhausting thing I’ve ever done, and I feel both a sense of bewilderment that it is almost finished and a crushing sense of foreboding that it will never, ever end.

I’ve always been reluctant to make the degree the center of my life for its duration, even though that would seem the most logical strategy in order to get the most out of it. Instead I looked for ways to get the most done as fast as possible (like maxing out summer classes) and procrastinate nearly every assignment or studying for exams until the very last minute. I’ve wanted the MBA to be over since it started, and 16 months in, my wish to be done is proportionately stronger.

But it was affordable. 

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The end is in sight!!

Most people are shocked when they learn the low-cost of my graduate degree. They’re not the only ones. Originally I expected my MBA to cost approximately $50,000 when all was said and done, but after paying my last tuition bill a few weeks ago, it’s clear I grossly over-estimated the costs.

Related: Does An MBA Cost Less Than You Think It Does?

The main reason for my over-estimate is my degree was seriously front-loaded for expenses. For my first year, a single semester cost $10,000 — but for this term I’m currently completing, my bill was only $4,800. This is mainly because of the structure of the program: 12 of my required 20 courses were completed in first year, then I knocked off an additional 2 in the summer, and finished with 3 each in the Fall and Winter terms of my last year. All in, this was the total price of my MBA:

Tuition & Fees: $35,390.28

Books, Cases & Other Materials: $1,504.74

TOTAL MBA COSTS: $36,895.02

It’s nearly $14,000 less than I predicted, which is not insignificant savings. To pay for it, I used scholarships, withdrew $18,135 from my TFSA, and did a pay-as-you-go for this year, using income from my internship and current full-time job. I opted not to withdraw any funds from my RRSP under the lifelong learning plan – and good thing: my RRSP returned 17%+ while I was in school. I’m expecting/hoping for another scholarship to come through for this term, and in March or April, I’ll receive $2,000 for the Alberta completion grant. When all is said & done, my MBA will have cost me only $20,000 out of pocket. If you count a year of lost income, the total cost is about $80,000. I consider this a moderate investment for a degree program that increased my annual earnings by >40% — a salary jump that would have required 11 years of annual raises in my pre-MBA job.

My uber cheap tuition is rapidly becoming a thing of the past, however, as the school is opting to increase the tuition by $300 per course in future years. This means that someone getting an MBA next year will spend about $43,000 for what I paid $37,000 for. Compared to schools in the US, or even others across Canada, this is still a fairly affordable bill, but it’s still a noticeable price increase. I expect tuition will increase year over year so long as people are willing to pay it.

How I Got An MBA For Cheap:

So there are no real secrets in that list, but I didn’t want to leave anything out. While I know I lucked out getting into my program before they did a major tuition increase, I hope the other items help students understand that your estimates of what a graduate program will cost you might be way, way off and there are a lot of resources out there and behavior modifications you can make to help pay for it.

I’ve worked my butt off during my MBA to stay afloat financially while still maintaining an A-minus-or-higher grade point average, and I am totally beat. But I’m thrilled to be nearly done, and happy with what I’ve learned… and so excited for everything that comes next. The MBA was a game-changing career move for me, and I’ll be enjoying the rewards for my whole life. Don’t tell the school, but I probably would have paid double for it!