Merry Christmas!

So, on the twelfth day of Christmas  my true love gave me a partrige in a pear tree and a whole wack of other stuff.  But in today's messed up financial situation, what with Monopoly Recession Edition out and everything, where on earth did he get that much money?  

Well, seeing as I don't actually know the answer to that, I'll just completely change the topic now.  Hey, but I do know where that money is now!  See the picture below ((©funnelinc.com))

Back in the good old days, every dollar had it's equal in metal.  What that meant was your money was right there in the vault.  But now, with the digitalization of money, your dollar is everywhere.  Only "the computer" knows how much you actually have.  And simply put, if anything happens to that computer, you're screwed.  (not really though, I'm just half kidding...)

So, what are these almighty computers?  Financially Ill (with help from our buddies at Popsci) has your answers!  Stay tuned to find out!


Happy holidays :)

Financial course... ahh!!!

 

Okay guys, here's a secret... you ready?  (it's alright, I'll wait ;D)  THE FINANCIAL COURSE IS REALLY, REALLY HARD!!!  Ahh!!!  ESPECIALLY THE STOCK SECTION!!!  IT MAKES NO SENSE!!! :(  And I was the one arguing for it!  (epic fail, right there :P)  

Sorry, had to get that out!  Sample questions are below... see if you get them :)

How much do you cost?

Haha yup, surprise guys! I'm back! Probably not for long though, so no need to worry :) I had this uber long blog written out but someone (wonder who? ;)) deleted it... basically I was just saying thanks for your emails and asking if anyone wanted to guest blog... are you people still up for it? Or anyone else out there want to guest blog on finance? It's really interesting! (not trying to be sarcastic!) Anywho, onto my blog post!
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It seems like everyone out there is worried about the financial situation out there now. And they're worried about us! In fact, some even think we caused the recession! According to this article our folks even "go back to the banker and take out a line of credit and maybe a second mortgage" because we "cost so much to maintain"! What a bite to swallow! This couldn't be true! No $#&!@ way! But lets think... could there be some truth to this article? I've collected a list of some teen's (not mine of course, pssh, no way! Why would you even think about that? ;)) monthly expenses and added them up below.

A month's expenses of the "single greatest cause of the global financial meltdown"

(aka us)

• Clothes - okay, depending on who you are, this may be the place where most of the money goes towards. Brand names are an "essential thing for young people", and cost quite a bit... This teenager (not me, I repeat, not me!!!) bought a pair of Lulu pants, two pairs of A&F shorts, two Hollister hoodies, and 4 tees at Aeropostale this month which adds up to... $500 ouch.
• Your cell phone bill - how often are you not texting every day? Considering there's national texting competitions now a days, that probably isn't very often. And those 15 cent messages add up... fast. Of course, with a student plan from Telus, this only costed $25!
• Food - yeah, I know we don't pay for our own meals, but I'm talking about things like that Pepsi (which is, by the way, better than Coke) and Kit-Kat bar you consumed after volleyball practice, the bag of chips you have every lunch, the slushies from Macs you grab with your pals on the weekends and who knows what else! Lets say Sam (I'm calling the teen Sam now) did exactly that. So $6 maybe every school day (6x5 for you math people out there) plus $4 every weekend (4x2) times around 4 weeks in a month gives us a total of... (wait, gotta grab my calculator :D) $152 whoa.
• Entertainment - like, the movies that Sam goes to with his friends every friday ($10), the concerts he goes to every month ($100)and stuff like that. If there were 4 fridays, then Sam would spend... $140 this month
• Gas - I don`t drive, so I`m not too sure how much this costs... (and I'm too lazy to google it) but let's put it at about 2 full tanks at $45 per fill up, so that makes $270 (I lied, I did google it ;))

So, all in all, 500 + 25 + 152 +140 +270 = $947 spent every month on you. That could very well be how much your folks monthly mortgage payments are... :O No wonder some parents are going with the $50 a month allowances now. Time to cut back a tad perhaps, hey?

By the way, if any of you want to guest post, leave a comment and we'll (I'll?) get back to you :)

A great site! (last post, promise!)

If anyone still has enough enthusiasm to gain some knowledge of personal finance and some economics (maybe *gasp* in your free time), I've found a truly magnificent internet resource that gives the basics in a fast and understandable way.

Here's the link: http://www.fool.com/investing/basics/index.aspx?source=ifltnvpnv0000001

The site itself (fool.com) is a great way to keep up to date with the modern economy and businesses. It's a really informative and fun site, and I strongly recommend everybody try it.

Have fun!

(above image) Available in tee-shirt form from "snorgtees.com"

And so it ends...

Okay, so I know we haven't posted for eons, but it's summer and... (okay that's not an excuse) it's all Dan's fault!!! But anyways, just an update on our project, a few days ago, (okay, no, more like, a few months ago) on the 9th, Dan and I "achieved our final goal" of sorts, by presenting to the Saskatoon school board and urging them to "support curricular development of for financial literacy in primary and secondary schools". The presentation went smoothly, though it wasn't much of a presentation, seeing as we had around 5 minutes to say our whole spiel. But it was a start and the trustees (the people we were presenting to) seemed interested. So sorry guys, if all goes well for us, you may be forced into taking financial courses soon. The blog however, may not live for too much longer... unless you guys really want to read our posts. Would you keep reading if we keep posting?

Anyways, just thought you might like to know. :)

A Startling Analogy

I couldn't help but post my "findings" to the blog..

One night, listening to the sounds of.. stuff, I realized that my (startling) amount of overdue homework seems to have a correlation to an adult's pool of debt ("the pool came with a free deck chair, and that was just too much of a deal to pass away").


First comes the relaxing. Playing videogames instead of doing the homework, or buying that new videogame with a credit card (the latter being the "debt" scenario). Days after the due date, the student might start to work on the project, trying to make it better than before, to compensate for late marks off. In the case of debt, one would try getting a raise, and working harder to pay off what has accumulated. Meanwhile, the debt/homework starts to pile up over time through interest or school. The student/adult will try to work harder to pay off their debts, but by persisting in their ordinary activities, the work never compensates to the debt.

And so a vicious cycle has begun, and the only way to change it is to change our day to day activities.

Just a thought. I hope it's enlightening in some way.

Mortgage crisis? "uuh, sure"

After having my explanation turned down in class for "lack of time" (I know what you're really thinking), I was told to "post it on the blog". So that's what I'm doing. I'll try to keep it as witty, entertaining, yet educational (that's right) as I can.



Hopefully we all know by now that we are in a global economic recession. If you don't know this, get out from under your rock (to follow the commonly used expression I have heard) and go on the internet (or blag-o-sphere, the "hip" people say, so I'm told). Online newspapers, social networking sites (mine anyways), even Youtube feature hints of this. Yes, Youtube (that's the video thing, right?). You might have noticed the sudden increase of "find your credit score here" ads. Well that's because people have started to care since the recession. But first, I'll explain what a credit score is in the first place.

You're still reading this! Wow! Keep it up! Please! So, credit scores are the bank's way to see if you're a good customer to give credit to. It's based on quite a few factors about how you use your credit and pay for it. The few that I know are the number of credit cards you have (the more, the lower your score, and the lower your score, the less apetizing a target you are to them), how much you use your cards (not too much, not too little), and.. okay that's all that I can remember. So basically, the higher your credit score, the more likely you are to get a loan from the bank. Scores have range from 300-850, the Canadian average being somewhere around 678. It is said that 620 is the minimum score needed to get a good (or "prime") loan from the bank.


Now, if you had a credit score below that, you would be a sub-prime customer (get it? Good loans are prime, so sub-prime is below that. Yeah.). But banks decided that they don't care how good your credit score is, and that they still want your money. And so sub-prime loans were created. As freaky and complex as they seem, they're pretty much just higher-interest loans, although delivered in unusual ways. Here something I found that might clear it up:

"There isn't a hard-and-fast rule on what makes a loan subprime. But generally they are riskier than regular mortgages because lenders are more willing to bend traditional underwriting standards to accommodate borrowers. Besides having a lower credit score, borrowers might wind up with a subprime loan if the mortgage was considered risky for other reasons -- such as borrowing a higher percentage of income or home value than normal, or borrowing without documenting income or assets. The resulting interest rates tend to be substantially higher than for conventional mortgages."

--some dude/tte (yep, here we don't discriminate) from The Wall Street Journal. See the full article here. Okay, I was hoping to hyperlink that and make it seem cool. Apparently I can't do that. Here's the slightly less stylish URL:
http://online.wsj.com/article/SB119662974358911035.html

So yes, the rumours are true: Banks want your money. Really bad. So much that they even give people with good, even great, credit scores sub-prime loans. Apparently, in 2000 41% of all sub-prime loans were given to prime customers. By 2005, it had gone up to 55%, and in 2006, 61% of sub-prime loan receivers were prime customers. That's not to say that sub-prime customers got prime loans instead. They got sub-prime loans too.

So now we're all buried in debt, and people were/are afraid to get mortgages because of insanely high interest rates; although they didn't know that they were getting sub-prime loans. See? It pays to be financially literate! So ultimately: A housing crisis.

So join the movement to teach people to read their financial reports. I apologize for the bad grammar and lame jokes, but I hope they were fun to laugh at anyway. But you made it through! And I'm proud of you for that (that's not creepy at all..). Follow us please (by clicking the "follow" button in the top right corner)!

Postpone bankruptcy. Become Financially literate!

First post! ~ Financial illiteracy

Okay, so, after reading our blog title, you're all probably thinking something along the lines of, "what are these people doing?! Blogging about financial issues for fun...? What's wrong with teenagers these days?! Definitely NOT following this blog!". In fact, after telling my friends about it, the best response that they could come up with was "..." and "uh... cool? *cough* you're nerdy *cough*" An yeah, I have to admit (sorry Dan) that this does in fact sound very, VERY nerdy, boring, dweebish and whatnot. But that doesn't mean it has to be. Man, that sounds philosophical. Being financially literate is actually really important in today's society and honestly, the most successful people in life are all financially literate; for example, Steve Jobs, Rhianna, Oprah, Harper, Michael Phelps, Obama, and Ronaldinho, just to list a few. They're all financially literate. Life changing realization right there.

So now, hopefully, you're probably wondering what exactly 'financially literacy' is. Basically, in plain English, it's just the ability to understand money matters. Woah. Doesn't sound all that complicated hey? That's just like credit cards and paying for lunch you had at McDonald's today isn't it? And yes, you're right! But to some extent. As Dan points out in his blogs, there's also some pretty complicated things associated with financial literacy (APR? Huh???). And you could probably care less about that kind of stuff. I see your mouse inching towards the back button. But these are very important things that you will need to know about down the road! So, if you want to be successful in life, follow this blog!!!

So, that's all I have to say for now. Just going to point out that this is a service learning project (we don't do this sort of stuff for fun... JK!) and ultimately we're trying to not only raise awareness on the issue of financial illiteracy, but to persuade the school regional school board to make financial classes mandatory (or at least have an that option for people who are interested) in schools as well.

So It Begins

Do you know where interest on your debit card comes from? What's APR? Do you know how mortgages work? Do you know what your credit score is? Millions of people in the world have no idea how to manage their own finances, and who knows, maybe you’re one of them. But clearly we need to stop letting kids out of school without such important knowledge.

The economy itself is completely relying on consumers like us. Every jump up, every drop down, almost all of it is caused by us. But millions, maybe billions of people don’t know how the economy works, or what a good decision would be with regards to even the most trivial-seeming of tasks, taking out a loan from the bank. We need to stop this.

Its not that people are not intelligent enough to manage their own money, far from it. You only need a grade 5 math education to learn most of it. Its the fact that schools are not teaching us what we need to know TO SURVIVE. Financial illiteracy is as bad as regular illiteracy, maybe worse! Imagine if you couldn’t read this description in the first place? A hard time you’d have in the world, that’s for sure.

So this is what we’m going to write about here (financial illiteracy, and how to stop it). Please subscribe (or whatever it is that people do on these so-called ‘blogs’), and help stop the surge of financial confusion in the world.

So let's end this post with a statistic, and hopefully you'll become interested enough to continue viewing these topics.

" * Only three states mandate a full semester of personal finance education in high school;

* 17 states cram personal finance lessons into other other subjects (math, social studies, etc.);

* And a whopping 30 states teach students nothing -- nada, zip -- about finances in school."

-The Motley Fool, Inc.

So please read on, and spread the word!