Monthly Archives: March 2011

Smells Like Shoe Polish

My friend and flatmate in my 4th year of university was a geology student. His department had given him some tickets for a dinner and lecture on geology at some geological club in Toronto. Always interested to learn about something I know absolutely nothing about,  I jumped at the chance to go.

The keynote speaker raved about how gold was foolishly cheap, and should  have been twice the price that it was. It was an interesting talk, and had I listened to that geologist, I would have made out all right (not accounting for inflation or exchange rates). Take a look at this. It was 1999, and gold was about $250 an ounce.

I have never pretended to understand our infatuation with gold. I understand it now to be another currency, yes, but what makes it desirable?

Gold has a long history of being something we associate with wealth. Empires in Mexico, India, Europe and others… they have all sought after it. It’s history is nearly as interesting as that of salt.

To tell you the truth, I don’t even like gold really. Sure, I would like to own a bar to use as a doorstop or a wafer to use as a paperweight, but that would just be to be eccentric. Gold jewelery has always seemed Gaudy to me. My wife’s engagement ring, and our wedding bands are platinum. Simple. Stylish. Hard.

Yet gold keeps moving higher, and recently some things have happened that make me wonder if it’s possibly on its way back down.

I’ve lived here in Japan for 9 years, and starting last year a commercial started running that made me cringe. The commercial is selling a class and system to trade and make money from gold. The people in the commercial look very happy after walking out of the class, and then it cuts to them in front of a computer screen in their living room, smiling as they (I assume) buy and sell gold futures.

(This seems to have replaced a similar commercial that used to run, which promised to teach you how to make money in the F/X market.)

But the real reason I will continue to stay away from gold  came last evening when a door-to-door gold buyer showed up at my door.

He was wearing a yellow jacket, and asked if I had any gold I wanted to sell. I said no, and he took a step to try to stop me from closing the door. He showed me a flier with various examples of gold jewelry and asked “Don’t you have anything like this that you want to sell?” I said no, and he asked again if I didn’t have anything like it in the house, to which I answered “I’m poor. I have no jewelry.”

Aside from the fact that I wouldn’t tell a complete stranger if I had jewelry in the house or not, the concept of door-to-door gold buying floored me. Has it come to the frenzy that pawn shops are willing to send a workforce out into the community in search of gold?

That tells me something. It tells me that pawn shops believe that gold will continue to increase, so they are willing to go out to buy gold at today’s price with the expectation that they will be able to sell it even higher next week or next month.

And that tells me something else. If there are commercials advertising how you can make money in gold, and pawn shop dealers showing up at my door, well, to me that’s about the same as a shoe-shine boy telling me to buy stocks. It’s advice that stinks, and will leave you with a headache if you stick around too long.

Earthquakes, Tsunamis and Meltdowns


Epicentre to my place: 1075km

I’d like to say thank you to all who have emailed to make sure that my family and I are safe. I thank you. We appreciate it a lot. Luckily, the quake had no direct effect on us, as we live a good thousand kilometres from the location of the quake, tsunami, and reactor. To put that distance in a Canadian context, it’s about the same as a flight from Toronto to Fredericton.

To be sure, it was a massive quake, and caused a remarkable amount of damage. As terrible an event as it was, however, I have to say that it probably would have been several times worse had this event happened in any other country. The Japanese quake predictor system sent out a message one minute before the main quake, and I can only assume that that helped many people prepare even slightly. Architecture in Japan is also designed with earthquakes in mind. And while the old wooden structures of Sendai were no match for the tsunami, all the buildings of Tokyo held up exceptionally well.

Beyond this technology, though, is the sheer calm of the Japanese people. It was remarkable to watch the events on TV of people walking calmly to shelters, or waiting patiently for the few buses that were running. No rioting, no looting, no fighting for places. A true testament of oneness… we are all in the together.

The Canadian Embassy has done a great job of sending out emails regarding the quake, evacuation and reactor to those of us registered, but I found this article a little surprising and disheartening. It estimates that there are about 12,000 Canadians in Japan, yet only 1773 are registered with the embassy. I registered when I first moved here, and can’t recommend it enough. If you live abroad and haven’t done so already, here is the link to register.

Again, thanks for your thoughts everyone.

Fear and Respect

As a factual resident of Canada, I submit a tax return each year to the CRA. Due to a tax treaty between Japan and Canada which states that there shall be no double taxation, I am generally exempt from Canadian income taxes. My world income is input on one line, and a corresponding deduction is entered on another line, resulting in zero taxable income from salary.

My return has been filled out the same way for years, and there had never been a problem until last year, when they kept my 2009 return for review. They agreed with my return, but said any return could be re-reviewed at any time.

They took themselves up on that offer by sending me a letter in January saying that my 2007, 2008, and 2009 returns were under review.  After complying with their request for information, my returns have been left as they were (which is a relief) but at least this time I think I know what was setting off the CRA’s alarm.

I submit my statements of earnings from my Japanese sources with my return. I also submit a legend that tells the CRA what each box means (income, pension payments, taxes paid, insurance premiums paid etc.) as well as receipts for local taxes paid,  but I had never thought about translating the addresses of my various employers. This seems to have been the rub, as their January letter specifically asked for the translation and telephone numbers of my sources of income, as well as a description of how the income was earned.

I submitted the information within the 20 days given to me, and they wrote back saying that since I sent in that information, no adjustments would be made to my returns, and that everything looked to have been filed correctly.

As I prepare my documents for my 2010 return, you can be sure I will have an extra page inserted with my forms giving the addresses in the Roman alphabet, the phone numbers and a brief description of how I earn my money. Regardless of how right you think you are, it can’t stop the feeling you feel when you receive a letter from the CRA.

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Good Help Is Hard To Find

I enjoy meeting new people in casual environments. I don’t, however, enjoy meeting new people in a business setting when I am the customer. This is an area that I truly loath.

The rapport I have with the majority of my contacts is worth more than gold to me. I have written about the benefits of knowing my mechanic and jeweller before, and the same goes for knowing my barber, financial planner, and, until three years ago, my travel agent.

Three years ago my travel agent was transferred to a foreign branch. Since then I have struggled to find someone I can trust with my travel plans. The agent that was assigned my file promptly drew my wrath as she failed to book my requested tickets for 6 people. Her company lost out on about $8000 of business, and we were forced to pay a higher price at another company, as the early booking prices were no longer available.  

While my old travel agent understood my preferences and requirements for travelling, and always knocked off a few hundred bucks through “preferred customer” discounts, I can’t help but feel that I am merely dealing with commission based sales people now.

I met one the other day when I was trying to find out prices for July. I sat down prepared to give all information and then set her loose on the computer, but she starting tapping away as soon as I opened my mouth. “Well, at least I’ll hear several options,” I thought. Within one minute she piped up that she can book me on a flight, and the price is just shy of $2000.

That’s a ridiculously high price for such an advance ticket, and sure enough, it was Air Canada. I asked her to give me a quote for Korean Air flying through Inchon, which was apparently a very difficult question, as it took her 20 minute to search through the database, talk with her supervisor, and make a phone call.

Finally she gave me the quote I wanted to hear (about $1200), but said I couldn’t book the flight because it was too early. Hilarious.

With that kind of service, I’ll once again be searching for a new agent.

Using Credit Card Points Toward RRSPs Revisited

One year ago I wrote my first post on this blog. It was a simple little post about using reward points on RBC or National Bank credit cards toward RRSPs held with those banks. I don’t think anyone read that post for months.

Starting this past January, however, that first post of mine has seen a massive spike in traffic generated from search engines, as people think about making their RRSP contributions. I thought I would repost for those thinking of getting a start on this coming year’s contributions. Remember, by contributing earlier in the year, you have more time to compound your money on a tax deferred basis.


If you have a Royal Bank or National Bank of Canada credit card that accumulates points, you can redeem those points for much more than a new desk lamp.

While certain TD, Scotia, BMO and CIBC cards give “cash back” credit of 0.25% – 2% of your yearly spending, RBC and National Bank of Canada encourage saving and lowering debt with their point system by allowing those points to be redeemed for “financial rewards” coupons.

At RBC points can be redeemed for vouchers that can then be deposited into your Royal Bank RRSP, TFSA, or RESP account. If you hold your mortgage or line of credit with the bank, you could also apply your points to the principal of those loans.

Redemptions start at 12,000 points for a $100 voucher, and move in increments of $25 per 3000 points. At these numbers, and assuming 1 point per dollar charged, it works out to a bonus of 0.83% of your credit card spending.

National Bank of Canada cards work out to a little higher (0.91%) but have slightly different options. Like at RBC, points can be redeemed toward your National Bank RRSP or TFSA account, but they do not seem to have an RESP option.

Points can also be used to pay down your mortgage or other loans held at National Bank, and if you are a Quebec resident, they can even be used for a rebate on your car or home insurance.

Redemption starts at 11,000 points for $100, and can only be redeemed in amounts of $100 (ie. 11,000 points, 22,000 points etc.)

Though it’s too late to use your points for the 2010 tax year, you can redeem anytime and get a good start on this year’s contributions.

After a few years of compound interest, I’m sure that the tax sheltered cash will be worth a lot more than the frying pan you could have had.

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  1. Using Cash Back Cards Toward RRSPs etc.