Response to Freelancing Thoughts

July 2nd, 2015 by Potato

Last week I did some thinking out loud about freelancing, which included some discussion around some recent posts by Robb Engen at Boomer and Echo. Robb left this really long and thoughtful comment which I think should be a post in its own right so you can all see it. Here’s Robb.

Hey [Potato], I’m not sure if you’re just taking issue with the $1000/month comment or what, but this comes across as a pretty whiny rant. The point is, if you were in financially dire straits, you could easily find a way to double your best freelance earnings. You’re not in that position, so you don’t NEED to hustle that hard.

Think of it this way: the average couple with no kids could rent out a spare room or basement to reach that extra income target. But they won’t, because having a stranger in your house is weird and uncomfortable. One or both of them could take a part-time job or use a marketable skill to earn extra money on the side. But they don’t want to because they’d rather watch TV and look at Facebook.

My advice to millennials [snip] is to hustle. “Do what you love” is a great mantra, but do it on the side. Anecdotally, I know a few people who do it, and plenty who could, but choose not to.

You make a lot of assumptions about me and my situation. I’m actually offended (well, offended enough to make this comment). I’m not in the upper-stratosphere of writers — not even close! I write a lot and do a decent job promoting. I’d say my biggest strength when it comes to my side business is finding what the next thing is going to be.

When the typical online ad revenue streams dried up, I looked for other ways to increase my side income. I noticed plenty of brands trying to start a blog or newsletter, and most of the time they had no content strategy whatsoever. So I’d reach out to a few of them and offer to write articles at $250/post. I took a targeted sales approach and it paid off. Incidentally, many of those relationships turned into advertisers on B&E or RCC.

After the Toronto Star column ended, I was out $8k to $10k per year. Enter the fee-only planning business, which filled that void and to be honest takes less time than writing, finding sources, and going back and forth with an editor (as you described above).

Yes, I benefit from a short commute and a steady 9-5 job. But did you know that I work every Friday/Saturday night from September to December, and from January to March?

Yes, I’m blessed to have a stay-at-home spouse. But that does not limit the time I spend with my family and looking after my share of the household duties. Did you know that my wife has MS? I can’t imagine how tired she gets chasing after two young kids every day while keeping the house in order, groceries stocked, and family on schedule. I drove my daughter to and from Kindergarten most days. I do whatever I can to help ease that burden at home.

Finally, I’m also working on plenty of non-income generating activity on the side, such as completing the coursework required to earn my CFP designation, and doing pro-bono financial planning.

Hey, we also love binge-watching shows on Netflix and do so on a regular basis. But when The Bachelor comes on, or (shudder) Grey’s Anatomy, I pull out my laptop and get to work.

I freelance to replace my wife’s working salary so that she can stay home for her health and to look after our kids. It’s a lot of work, but I’m in no danger of burning out.

I don’t think it’s unreasonable to earn $1,000 per month on the side. Deep down, if your financial livelihood depended on it, you could hit that target. My turn for assumptions: You have the luxury of working on “dream projects” like writing a book or creating a course because you don’t necessarily need the immediate income (these projects may pay off down the road, but likely would not return the time and effort that were put into them). If you had to focus on immediate income, you could easily earn $1,000 per month or more. You know you could.

Potato again. In last week’s post I did some thinking out loud including deciding not to try to quit my job to do freelance full-time, and also trying to think of what the average person might be able to expect in terms of side income if they started freelancing. I started by referring to and criticising a recent post by Robb Engen at Boomer & Echo, which left off anchoring readers at $1000/mo, and then whining that I was nowhere near that and then thinking out loud to try to figure out if the expectation was reasonable or if I just stink [TL;DR: I leave off inconclusive, but suggesting it’s doable for some, and that my odour is not entirely that of freshly baked cookies and rainbows]. I also made some assumptions about Robb’s situation that he found offensive. Robb, for what it’s worth I’m sorry. It’s not going to stop me from continuing to run my big stupid mouth (err keyboard) over the next few lines, but I’m not intentionally trying to provoke you.

I think one thing that comes out clearer in Robb’s post here than in the original is the issue of need. Having the ability to start tapping some kind of side income if you lose your job is a great backstop (whether that’s freelancing or something else), and of course for that to be there when you need it, you have to have at least a little bit of freelancing going on while things are fine. Whether that’s going to bring in $500/mo, $1000/mo or more is hard to say, and not all that relevant except for my own neepery and nit-pickiness on numbers and setting expectations — the point is that doing it will open possibilities and create backstops for you.

His closing point here is valid. I do diddle around a lot on projects with no economic return. If I was in a needful situation I would hustle a lot more for paid work and shelve things like the book and course, and that might make me more positive on the prospects of freelancing.

And a final sticking to my guns moment: I’ll still suggest that Robb is in the upper stratosphere of freelance writers. Freelance writing is not so lucrative that said stratosphere is necessarily paved with gold, and I didn’t want to suggest that that makes it easy to do — writing a lot [hard work] and doing a decent job of promoting is how you get to be a top-level writer. And Robb is a machine.

Wealthing Like Rabbits: A PF Cheerleader

June 29th, 2015 by Potato

I have to admit, I was really afraid to read Wealthing Like Rabbits based on the previews and excerpts I had seen. I was also afraid because the title was explained with this blurb: “Let’s take the word wealth, which is a noun, and start using it as a verb. The new word wealthing will replace saving when discussing any saving that increases your net wealth,” and I was scared that it was going to be wall-to-wall neologisms. I was pleasantly surprised: It’s actually a really good cheerleader for personal finance.

The book kicks off with an alternate reality comparison: what life looks life if you stretch to the max for a house and lifestyle, and what it can look like if you pare it back to something that’s still well within the comfortable range. It’s one of the best uses of this technique I’ve seen, and strongly makes the case that living within your means is not all about sacrifice, but can provide the stability and security you need to actually be happy. “Comfortable is about more than money. Much more. It’s about sleeping comfortably at night and not being afraid to check your mailbox or your inbox in the morning. It is about being comfortable driving to work in a Corolla rather than a Lexus when you are thirty-three so that you won’t have to drive to work at all when you are sixty-three.”

It’s full of highly relatable anecdotes advising readers to set up good savings habits, control their spending, and build their lives on a solid financial foundation. The irreverent examples using zombies and hockey are not taken too far (with the exception of the debt = smoking one), and each chapter has its own unique pop culture reference to help prevent them from being over-stretched.

WLR has the subtitle of An Original Introduction to Personal Finance and the key word there is introduction. It is not a guide or user’s manual, and Robert Brown is no Michael James on Money — the book has a few technical mistakes and misunderstandings. However, most of the sins are of detail and not of message. It’s not detail-oriented, but like a good cheerleader it’s just to get you riled up and rooting for the home team, not to deliver a detailed game plan for the next play. And WLR is good in that role: it is so easy to read and does such a great job at those alternate life comparisons that I think it’s well worth reading for a newbie, and would make a good first introduction to personal finance — the details can be ironed out in their second or third PF book.

I was also relieved to find the bit on the wealthing neologism at the end of the book, and not a new phrase the author tried to wedge into the entire thing.

It is full of quotable bits, which I will end on: “It’s startling to see how a series of seemingly reasonable decisions can result in such an unreasonable amount of money going out the door.”



I’ve noted some points as I was reading it (and Michael James on Money already covered many in his review), so here is a breakdown of some things to watch for.

RRSPs: The most noticeable errors (in terms of affecting the message) come from discussions of RRSPs. TL;DR: just accept the take-home message that you should save and invest for your future in some combination of an RRSP and TFSA, and pick up the details elsewhere.

Early on in the book, WLR calls the refund from an RRSP contribution a windfall, and suggests that younger readers use RRSPs over TFSAs because they would rather get this windfall when young than when old. Yet later, when discussing the home buyer’s plan, he suggests the opposite: that using the tax savings for a downpayment is “…stealing from a future version of yourself.” [emphasis in the original] Describing the home buyer’s plan is a touch challenging, but to break it down simply I’ll put it this way: it’s a way to use “the government’s portion” of your RRSP as a downpayment now, or to use pre-tax money for your downpayment. For example, if you’re in the 30% tax bracket and were able to save $17.5k in your TFSA as a downpayment for a house, you could instead have put the $25k you made (and were taxed on before putting the funds in your TFSA) in an RRSP pre-tax, and then used the full $25k for your downpayment. In many cases, this difference (~$7.5k depending on your tax bracket — double for a couple) is not enough to worry about getting into a commitment to repay and the psychology of tapping into sacred retirement funds and all that. However, if that amount can make the difference between having 19% down and getting stuck paying CMHC fees or having 20% and avoiding them, it can be well worth it (though you could just save a up for a few more months too). The HBP is often described as a loan to yourself from your RRSP, which is right because you have to pay it back, but doesn’t really get to the main benefit. Of course, the main drawback is that you do have to pay it back and a shocking number of people don’t, which is why WLR comes in against it.

However, it’s also a good safety valve on the RRSP — as a young person you can start saving for “the future” with your RRSP if you want without needing a detailed plan on saving for a house versus saving for retirement, the HBP (and the flexibility of the TFSA) will let you focus on saving and sorting the details out later. WLR makes takes the opposite point of view on this opinion: “It’s important to understand that long-term (retirement) savings and saving for a house are two entirely different things and they need to be treated as such.”

What’s weird is that the book then recommends paying CMHC fees over using the HBP. The HBP has the risk of not getting repaid and costing you some RRSP room and a premature tax bill, but paying for mortgage insurance is guaranteed money out the door.

As for the windfall issue, I tackled that in an earlier post. In short, it’s not — the refund is a total red herring that confuses a lot of people with the RRSP.

When describing the benefits of enrolling in an automatic RRSP payroll deposit plan, the book says that “If you contribute $50 a week to your RRSP, you can reduce your taxes by $50 a week.” Not quite: a $50 automatic contribution will reduce your taxable income by $50; your reduced tax withheld will be more like $15, depending on your tax bracket. Again, it’s still a good idea, but the details are off.

Paying off debt vs investing: There is one bit of flawed reasoning that crops up in a few places. When discussing whether to pay of debt first or to start investing, the book says “Yes, the debt’s interest is likely higher, however, I really, truly hope that the interest on your savings will be compounding for a much longer period of time than the interest on your debt will be, which makes the math favour the savings plan.” No. There is a big benefit to starting to save early, but that applies equally to reducing debt early — investing does not get special treatment in this regard, and your savings from the future will not hitch a ride on the TARDIS to come back and thank you for birthing them earlier. If the interest on your debt is higher than your expected returns from investing, then paying the debt off aggressively is the right move. Your retirement savings may have 40 years ahead of them to compound when you’re in debt, but for the first year of building them up your debt and retirement savings both compound for a year; the year after that adds exactly one year to each: your debt (negative wealth) growing every bit as fast (or faster if the interest rate is higher) as your investments. Where it makes sense to invest before paying off your debt is when your expected return is higher than the interest on your debt — or to pay the penalty for behavioural reasons.

He does have a side point that starting to save and invest early will get you into the good habit of building up your RRSP and avoid procrastinating, and I think this has merit. I’ve seen some people get caught unsure of where to go after finally paying off their debt — starting to invest a bit before the big zero day can make the transition smoother, even if it’s not mathematically optimal. But these behavioural factors are not what the math says you should do. In the margin I starred this paragraph: “…all habits are forming. The sooner you embrace and establish the habit of saving, the easier it will be for you to maintain that habit throughout your life. If instead you develop a habit of postponing saving until a better, more perfect time, you will (with the best of intentions) establish a habit of procrastination. And you know what? There is no perfect time!” That was great and could have stood on its own.

This issue of compounding times rears its bizarre head again when discussing saving for a house. “So, while I’m saying that you need to be saving for your retirement even if you are carrying some debt, in the same sentence I’ll say that you shouldn’t be saving for a house until you are debt-free. That sounds hypocritical but it’s not. Any money you save for a house down payment will not be compounding for nearly as long as your retirement savings will be. Without the advantage of the longer time frame, the cost of servicing the debt is bound to exceed the return on your savings.”

Mortgage math: A big part of the alternate reality possibilities centre around buying a larger house or a smaller one. The most math-heavy part of the book is comparing the housing choices of two brothers, one of whom stretches to the max while the other starts with a more realistic budget. There are many tables of figures there, and even I was starting to tune out at the number over-load.

There is an exceptionally common error about mortgage payment frequency out there that also appears in WLR, “The more frequent your mortgage payments, the less total interest you will pay over the length of your mortgage.” So far so good — this is true. However, the effect of paying more frequently is quite small and often over-stated by confusing more frequent payments with accelerated payment schemes. I highly recommend aligning your mortgage payment frequency with your paycheque frequency — if you get paid biweekly, make your mortgage biweekly. But if you get paid monthly, there is no point in making your mortgage payment weekly — the savings on interest are minimal, and anyway you end up having to push a payment back just so you can keep a balance in your chequing account to spread a monthly paycheque over several weekly periods. WLR falls into the common mistake of confounding accelerated payments with more frequent payments: “The difference is substantial. A $350,000 mortgage at 5% paid monthly would …[numbers]… The same mortgage would cost only …[numbers]… a savings of $30,187 just for paying more often.” [emphasis mine] No, the savings are from paying more, not more often.

Accelerated weekly/biweekly plans are a good behavioural way to arrange paying more on your mortgage, but they are not magic. If your budget is constraining you from paying your mortgage down aggressively, signing up for an accelerated weekly or biweekly mortgage can lead to nasty surprise when you hit your first month with an extra billing period in it.

Random Thoughts on Freelancing

June 24th, 2015 by Potato

This has been a pretty good year for me for freelancing: I’ve had a fair number of clients on the investor education business side, as well as some editing jobs, including editing a novel-length fiction for another author — my first work of fiction (I normally work in non-fiction/science/health care/personal finance). I’ve had on my to-do list for a while to revamp my various websites because I’m doing just an absolutely atrocious job of advertising myself1, when I realized that I’m busy enough and there is no need for that — I have almost as much work as I can handle just coming in from my terrible advertising and excellent word-of-mouth. This is my second-best year ever for freelancing, and though the year is only half over I’m on track to quadruple the average of the last three years. The only better year involved a single intensive project versus a bunch of smaller jobs.

But despite doing fairly well on a few different freelance projects, I am nowhere near the point where I would feel comfortable quitting my job and going full-time freelance. And I don’t think I will ever get to that point: I like having a steady job with benefits (and I like working in the not-for-profit sector even if I could make more freelancing or in for-profit). And with that realization in mind, I think it’s maybe time to slow down — another big reason I keep trying to not get myself worked up to creating a course for beginners to investing/planning/etc.

I’ve also had freelancing on my mind because I’ve been stuck trying to complete an interview for a really great person who does not deserve to have me sitting on her deadline for the past few months. The question that’s been holding up the works is fairly simple: “What advice would you give PhD students today [about preparing for non-academic jobs]?” And I wrote a pretty decent few paragraphs on expanding and honing your transferable skills by freelancing on stuff. And then I second-guessed that: how realistic is that advice, how good is it? Will risking burnout in grad school (or complications if they go over the typical 10-hour-per-week cap on external work) actually help grad students as advice? How repeatable would my freelancing experiences be? I mean, I think I’m pretty good at what I do, and I’m well-rounded so there are lots of things under that umbrella, which leads to a number of things I can do on a part-time basis. But would most grad students be able to devote so little time to rounding up business that it made part-time freelancing worthwhile?

This was kind of driven home for me by a few recent posts by Robb over at B&E, including this one on multiple income streams where he ends with this bit: “You’d be surprised how quickly you can accomplish your goals when you can earn an extra $1,000 or more per month.” Well yes, a ~20% raise for the average person would accomplish goals faster. But how realistic is $1k/mo in freelance income? IMHO, not at all. Look, my best year ever didn’t even hit half of that on average. Yes, I made a fair bit more than that in my busiest two months — but I could not have kept up that pace for a full year, I would have burned out — let alone being able to keep scaring up that kind of work.

He’s partly helped by not having the soul-destroying commute that I do: saving 10 hours a week could free up a lot of consulting time. He’s partly helped by his wife: add a working spouse (as is the case for many) and he’d have to do more housework and have less free time to work side projects. He also has a really steady 9-5 job, whereas I have trouble scheduling work far in advance because I don’t know when the shit will hit the fan (but then I get lieu days to freelance after it does). But he’s so far up in the stratosphere of freelance writing (where people come to him for jobs, and where he pulls in an average family’s full salary in blog income) that I’m afraid he may be losing perspective — most people are not in the position to make that level of side income2, and that’s assuming that they have marketable skills that are amenable to part-time side income in the first place.

A thousand dollars a month doesn’t sound too hard, on the surface: if you bill at $60/hr (but actually earn closer to $30/hr after under-bidding on projects and doing development work and fiddling with your website and Linkedin profile), then you only need to work about 17 billable hours each month. That’s like four hours a week; even after it ends up doubling with all the unpaid work that surrounds freelancing, you’re still only out one of your weekend days each week. Of course, $60/hr is for pretty specialized work, which is kind of hard to find and may require like graduate degrees or something. Freelance writing pays more like $0.50/word if you’re lucky, maybe $0.10/word if you’re not. No problem, you’re thinking, you might be able to hammer out 1,000 words in about two hours if you’re a fast writer. Two of those a month and you’d hit that $1k target with two weeks off to yourself. Of course, only people who are already famous can hammer out a 2-hour blog post and get paid $500 for it — most3 freelance writers and most assignments will require that you do research, and interview experts, and go back and forth with your editor to polish it, which can bring your hourly rate way down. Plus you’ll have to draft and send like 20 proposals to editors for each assignment you actually land, which is hours out of your life you don’t get paid for at all. A few sites peg basic copyediting at about $30/hr — but go to the self-publishing sites and you’ll see authors claim they don’t pay over $20/hr (along with ads from hungry part-time editors willing to low-ball).

So with business development, you’re probably talking 8-10 hours per week to hit that expectation if you have some marketable skills but aren’t a super-specialized professional. If you don’t have a portfolio or a lot of skills and are just grinding away at things like fiverr jobs or brainmass, you’re talking more like 20 hours per week, which I don’t think is something to advise most people to expect.

What, then, is a reasonable expectation of what working freelance can do for you? I don’t know. I don’t know if I’m way under my potential4,5. I believe that I’m well above the median in terms of freelancers who work full-time day jobs, at least in specialized skills if not in billable hours, which means most should not expect to break even the $500/mo point. But maybe my self-image is all wrong and the only reason I took issue with the B&E estimate is because I’m actually just unsuccessful. How much is a reasonable amount of work for the average person before burnout threatens? Again, I’ve personally prided myself on my stamina, but I lose a lot of time to other parts of my life — a young, single person with no commute could rock side income (but then is that typical/average?). Is ~10 hours/week sustainable if your commute is more reasonable? I don’t know what to suggest, which leads me back to part of why I’m stuck on that interview.

However, the main point may still apply: freelancing may be a good way to build transferable skills and improve your finances. Most Canadians struggle to save even a few thousand dollars per year, so making even $250/mo in a more realistic freelancing expectation could really beef up those retirement savings.

As for me? I think I’ll move updating my websites and profiles back down to the bottom of the to-do list.

1. I mean, I earned my American Medical Writers’ Association certificate two years ago and still haven’t gotten around to putting that fact up anywhere — in fact no where do I actually advertise that I do editing work, it’s all been thanks to word-of-mouth. And my CV/bio is just a disgrace.
2. And of course, Michael James was ahead of me again to that idea, as you can see in the comments section at B&E.
3. Look at me, talking like I’ve had any kind of success in this field at all (I haven’t), or talked to more than two people who have (I haven’t).
4. Well, I know that I am: I charge almost half of what many money coaches charge, which I justify by focusing on education and making my clients work for themselves — I do less for them, at the end of the day, so it ends up being what I consider exceptionally fair, which makes me feel good as a service provider.
5. Also, I know that I am: I spent a lot of time writing the book last year, and this year on pro bono work for the library as well as promoting the book and doing interviews — all time that I could have instead dedicated to making money by freelancing.

The Bad Idea That Wouldn’t Die

June 14th, 2015 by Potato

I keep thinking that there are a lot of people who really want or need a course on personal finance and investing, and there aren’t many resources for it. There are books of course, but some people just aren’t book learners, or prefer a course for one reason or another. There are some good continuing education courses offered through UofT and a few other universities across the country, but for most people who don’t live close to campus they’re out of luck. So I’ve thought about putting together a full online course on the matter, and while few people think it’s needed, when I actually asked who would sign up for such a beast the response was under-whelming.

A full course would be something like 12-16 hours of lectures and discussions, which would take hundreds of hours to prepare, practice, and coordinate. It’s madness to put in that kind of work before knowing for sure that there’s actually an audience at the other end. So it’s a bad idea. No one wants it, at least not online.

And yet it’s an idea that won’t die. I’ve kept thinking about how to put it together, how to change and add to the content of the book for a course, and moreover talking myself into thinking that it is needed and maybe the reason for the previous response is that people just don’t want to raise their hands over vague hypothetical options (also, the people who would want a course are likely not on r/PFC or here, excusing the underwhelming response earlier). So I’ve doodled a bit and come up with a preliminary syllabus for such a course.

But it’s still a terrible idea that’s going to take way too much time that I don’t have. Fortunately I’ve heard that Ellen Roseman plans to take one of her UofT courses online next year, and Bridget of Money After Graduation is putting together an online course on investing too. So maybe I can bow out and let them solve the problem.

Here is the preliminary course outline/syllabus, make of it what you will. Maybe it will get you excited and you’ll want to enroll or back a kickstarter-type thing to make it happen. Maybe Ellen and/or Bridgette will liberally borrow for their courses (and the outline is not the hard part of creating a new course so I don’t really mind). Maybe you will tell me that my outline is bad and that I should feel bad.

Planning, Investing, and Other Grown-up Money Concerns
Proposed Course Outline (each unit approx. 45 minutes + time for questions)

  • 1. Introduction and Money 101 Review
    a. What you should already know and have mastered.
    b. Budgeting and living within your means.
    c. Saving saving saving
    d. Emergency funds (insurance?)
    e. Credit cards, lattes, etc., etc.
    f. Clever parables, Diderot’s housecoat, Chilton’s four most dangerous words.
    g. Reading list to kick-start the course.
  • 2. Free Your Mind and Your Ass Will Follow
    a. The importance of attitude, behaviour, and long-term thinking.
    b. Neat grey matter tricks, including why free makes us stupid.
    c. Social animals and keeping up with the Joneses.
    d. Heuristics and rules-of-thumb (or should this be a whole other class?).
    e. Points-of-view.
    f. On uncertainty, and why a scientist is talking right now.
  • 3. Canoeing Down the Spanish River: Goals, Direction, and Having Fun [w/ Sandi Martin]
    a. Sandi’s talk from TPL, expanded a bit.
  • 4. Needs, Wants, and Other Sundry Topics
    a. Some concepts, because I had to stick them somewhere (inflation, compound returns, how to read graphs, use a spreadsheet, probably some other stuff).
    b. Needs and wants, and creating your minimum plan and ideal plan.
    c. Other goals and things that will affect your planning.
    d. An aside on the industry, some ranting, why I push the do-it-yourself way.
    e. Sketching out a plan and how to get there.
  • 5. Finally, the One in Which He Talks About Investing
    a. Investments help us make our plans a reality.
    b. Types of investments.
    c. Investing in businesses.
    d. Lessons from active investing: intrinsic vs market value, and what it means for long-term investing in a world that survives the coming zombie apocalypse.
    e. Investing in bonds, real estate, commodities, and other stuff.
    f. History and setting reasonable expectations.
  • 6. The Quick and Dirty Yet Completely Convincing Explanation of Index Investing
    a. The importance of fees.
    b. For repetition sake, a discussion of how fees matter.
    c. What can be controlled and what cannot be.
    d. Active vs passive – theory and past results.
    e. The added benefit of simplicity.
    f. Other ways of investing, and what they entail.
    g. The importance of “I don’t know”.
  • 7. Risk, the Gom Jabbar, and the Unfortunate Gambling Analogy
    a. Risk in everything.
    b. Many definitions of risk, and blending of volatility and uncertainty with risk of lifestyle impairment.
    c. Risk on different timescales.
    d. Risk tolerance.
    e. Enduring a market-crash in real time and Dune’s Gom Jabbar.
  • 8. Let’s Do It: Asset Allocation and Your Plan
    a. The canonical portfolio.
    b. How to decide on an allocation that will work for you.
    i. The age-based rule-of-thumb, and the completely arbitrary equity split.
    ii. The classic 60/40 one-size-fits-all portfolio.
    c. Apocrypha.
  • 9. How You Actually Do This: Three and a Half Investing Options
    a. Robo-advisors.
    b. Tangerine.
    c. TD e-series.
    d. ETFs.
  • 10. How You Actually Do This: Taxes and Tax-Shelters
    a. TFSA.
    b. RRSP.
    c. RESP.
    d. RDSP.
    e. Non-registered: taxes, dividend tax credit, capital gains, ACB.
  • 11. How You Actually Do This: Writing Stuff Down and Making Spreadsheets (Or Whatever)
    a. Condensing your goals and direction down into a written plan.
    b. Writing down your asset allocation and a rebalancing plan.
    c. Tracking stuff with spreadsheets (or pieces of paper in a binder, or whatever works for you).
    d. Tools that already exist and can help.
  • 12. Where I Talk About Processes and Take a Break to Riff
    a. Processes, lessons from engineering and health care.
    b. Good enough solutions.
    c. Execution risk, and some more talk about the behaviour gap.
    d. Some slack time to review any material from the previous classes that needs further discussion.
  • 13. Au Secours, Au Secours!
    a. When to get help.
    b. How to find help.
    c. Getting value-for-money.
    d. What an advisor/coach can do, and what they can’t do.
  • 14. The One Where I Reveal My Thoughts on Real Estate and You All Hate Me for It.
    a. The biggest purchase – and biggest expense – in your life, and why it deserves more thought than it gets.
    b. Rent vs buy analysis, and busting myths about renting. The ball pit analogy.
    c. Income suites are not magical.
    d. The housing bubble, and the pernicious myth of the property ladder.
    e. A look back at US housing bubble and why it’s not really different here.
    f. Real estate as an investment, direct and REITs.
  • 15. The Hardest Problem in Personal Finance [hopefully w/ secret guest(s)]
    a. The options that open up as you near retirement (annuities).
    b. Government benefits in retirement, CPP.
    c. Sequence-of-returns risk, longevity risk.
    d. Sustainable withdrawal rate, and the various schemes to convert a pile of investments into lifetime income.
    e. Decumulation plans.
  • 16. An Hour for Questions, or Lacking Those, Delicious Discussions of Dirty Dealing
    a. Q&A.
    b. Why I hate market-linked GICs and their dirty advertising.
    c. TANSTAAFL in general, being skeptical.

TTC Chaos, I Just Don’t Get It

June 9th, 2015 by Potato

The subway was yet again disrupted this week, with all three subway lines out of commission for an extended period Monday morning (and for a while the SRT too) — and not even shuttle buses to try to take up some of the load. I personally think it was a terrorist threat and they’re just not telling us, because the official explanation does not make sense to me at all, and just makes me angry.

Officially, it was a communications failure, and they can’t run any trains in any fashion without communications. TTC spokesperson likened it to “trying to land a plane without having communications with the tower.”

No, come on, pull the other one. I’m going to try to track down a few drivers and see if the media contacts at the TTC will talk to me, but there is just no fucking way it is like that at all. They’re trains, running on tracks, with human drivers. The equivalent scenario is closer to drivers having to cope with a power outage knocking out traffic lights — things slow down, you approach every intersection with caution, but you don’t just throw your hands in the air and say that it’s too unsafe to leave the garage today.

Trains are not cars, but in many ways the differences make the situation easier: they’re on tracks, on isolated rights-of-way, with no worries of kids running across to chase balls or geese1 sauntering across the road. The main thing to worry about are the switches, and it should be super-simple to interlock them to lock in straight-ahead mode for safety when comms go out.

So I can’t see any damned reason why a train can’t creep along under the direction of the human driver, and get some kind of service going. Yes, they may have to go slower — a train can’t exactly stop on a dime, but usnig publicly available information TTC subway trains can come to a full stop from 30 km/h in about 50 m without bowling anyone over, and in as little as 25 m in an emergency braking situation (for scale, the trains are 23.2 m long). Now I know that distances are hard to judge accurately by eye, especially underground in the absence of familiar landmarks for scale, but from all the time I’ve spent on the subway gazing out the front of the lead car, I’m pretty sure the visibility down the well-lit tunnel is at least 50 m in all parts of the line, and multiples of that in most places. And even if it’s not in some curves, from a relative 15 km/h crawl — that still moves something — a train could stop in 12 m.

That leaves the 6 switches at the terminal stations as the main sticking point to operating without communications. And seriously, if those can’t be manually operated by a half-dozen people sent into the tunnels to direct traffic, then they should be redesigned to do so ASAP.

Yes, it would still have been a sucktacular delay, and without communications its likely we’d get trains bunching and gaping through the system pretty quickly. But I just can’t believe that professional, unionized drivers are completely unable to operate their trains without being directed by central communications in constant contact, that there isn’t a 15 km/h failsafe mode. I mean, many cities had subway and trolley systems before radio communications and signalling systems were even invented, and the trains ran.

1. Who can fly, but choose not to. Seriously, fuck geese. Now that I think about it, the TTC’s mascot should be a Canada Goose.

Update: As soon as I hit publish I think I got it: they think it’s a safety issue not because the trains will crash but possibly because the emergency response strips won’t send a signal to TTC central so that they can call an ambulance and hold the line up for the false alarm of the hour. Again, I don’t see how waiting until the train hits the station for a runner to hit the surface and call 911 is such a major safety issue that it warrants a complete shutdown. But then again, if that’s the reason then the plane landing analogy above is totally off base and even more idiotic.

PanAm Games

June 9th, 2015 by Potato

“Officials will also be hoping and praying many Torontonians will voluntarily opt to work from home, carpool or work irregular hours to cut down on congestion. The transportation plan hinges on a 20-per-cent decrease in transportation demand during peak hours.”

I believe strongly in the success of any transit plan that involves hoping and praying that one in five people who somehow have not yet found a way to avoid commuting in this city will find a way to not commute especially for the games.

In No Position to Buy

June 8th, 2015 by Potato

The Star featured a story last week of a family in a tight situation: they had bought a pre-construction house, which was delayed by several years and had shrunk from the sales model. They decided to cancel the deal and get their deposit back, which led to trouble of one sort.

And another.

The developer delayed for months on returning the deposit, which raises some interesting questions about the solvency and decency of Urbancorp. But as part of their complaint against the developer, the family claims that without the return of the deposit — a rather substantial $95,000 on a $850,000 house — they won’t be able to scrape together $5k for first and last on a rental.

It’s mind-boggling how an apparently well-to-do family with over a million dollars in real estate assets (between the pre-con house and existing condo), who were able to put down over a hundred grand on two places, doesn’t have an emergency fund of any kind — not even one month’s expenses.

Even if the pre-con house had been built according to plan and the original schedule, how were they going to close the sale with no assets? Where were their savings from living on a budget to prepare for the higher ongoing costs of the house? I could go on about this case, but that’s not what I’m here for today.

I don’t want to focus on their particular case: they were simply in no position to buy in the first place. It’s another Toronto family over-reaching for real estate.

Instead, I want to rant about the dangers of pre-construction. How most people are in no position to buy pre-con.

Lots of people made lots and lots of money in pre-construction in the early and middle phases of Toronto’s condo boom, without needing a lot of capital, effort, or smarts to do it. That’s helped create the widespread impression that pre-construction is a great, risk-free way to make lots of money — and developer advertising reinforces the investment message every chance it gets using dirty tactics that would not be legal in other investment industries like mutual funds or stocks.

Part of how these people made money was that pre-construction came with a discount to existing units — as David Fleming has most famously covered, that discount has been essentially non-existent for years. It’s supposed to compensate the investor for the risks and inconveniences of pre-con, so when it vanishes it indicates that the average pre-con buyer is not doing so from a detached, analytical investment perspective — or if they are, it’s from the footing of a speculator looking to boost the leverage used. The other big part that contributed to the profits reaching stupid levels is the use of leverage inherent to real estate and pre-con purchases (and again, the magnifying benefits of leverage are highly played up in developer ads).

However, leverage is risk and that cuts both ways. If things don’t go as hoped and there are problems, people buying pre-construction can face massive cash calls and losses. To try to protect the stability of our economy, development projects in Ontario must sell a certain percentage of units before they can get financing from banks to fund the construction. This helps provide the banks with a buffer so they won’t end up foreclosing on massive, empty towers that no one wants to buy in a few years’ time, leading to the collapse of the banking system. However, the pre-con purchasers then end up shouldering a lot of the risk for the project, risk they are by and large not equipped to evaluate or handle.

What are some of the worst-case scenarios with pre-con? Well, consider the case where you have done your due diligence on the builder perfectly, and they deliver a unit to you that looks exactly like the sales demo, exactly on the expected occupancy date (note: none of these things ever actually happen) — but the long-feared condo downturn actually appeared some time in the three and a half years between committing to the purchase and the completion of construction. Your unit is now worth 25% less than you thought, and because you haven’t been able to unload the place you were living at, the bank won’t give you a high-ratio mortgage. So you need to come up with ~30% of the original price to close.

Put some numbers to that: you like the looks of a $400k pre-con condo. You scrape together $40k as a deposit for pre-con, and plan to sell or refinance your existing place to free up another $40k upon completion so you can close. Instead, the market crashes and your pre-con is only worth $300k. The equity in your current place is gone, and the market is locked up so you couldn’t dump it even if you could stomach realizing the loss. The bank is only willing to lend against the current value ($300k) of the new place, but you’re contracted to pay the developer $400k for it. Somehow you have to come up with $60k just to get you back to even, and another $60k to get a mortgage on your second property — where are you going to get $120k from on what might be as little as a year’s notice?

Yes, it’s a rare event. But for many families, the low-but-not-zero likelihood events that can happen with pre-construction represent extinction-level events for their finances. Especially if they own two properties by buying pre-con before selling an existing place.

Pre-construction is too risky for most people out there who are doing it anyway — they are in no position to buy or to assume the risks that they are. It is not the everyday riskiness of the stock market, where there’s volatility and unpredictability and small losses all the time so you never forget it. It is the risk of rare events — the “black swan” — coupled with massive leverage that leads to what we term “blow-ups”.

IMHO, only accredited investors should be allowed to buy pre-construction in the province, or the rules should be changed to limit liability to the deposit. I’m a lefty protectionist bastard that way (and housing bear to boot), but an investment product that can lead to losses that are an order of magnitude higher than the deposits people are putting down (what they may naively assume is the limit of their liability) is one that should be most highly regulated. But that’s not going to happen, so instead here’s a short list of things to bear in mind with pre-construction:

  1. 1. Pre-con should be cheaper than something you can live in (and inspect) today. This is to compensate you for the risks, the inconvenience, the uncertainty, and the time you have to wait. If there is no pre-con discount (and David Fleming has made the case that there is not in Toronto), then do not buy pre-con1.
  2. 2. The moment you lock in to the contract (which may be as many as 10 days after you sign if you have a cooling-off period), you are on the hook for the unit, at the price you agreed to. If you also have a current owned unit (house, etc.), you now have two units. Do you have pockets deep enough to own and maintain two units through thick and thin? If not, then do not buy pre-con; or sell your existing unit and rent it back (or rent something else) until your pre-con unit is done for safety.
  3. 3. You will likely need liquid cash to close. If you do decide to ignore point #2 and hold two units, this is not the time to aggressively pay down your mortgage by making extra payments — you may need that liquidity, and you’ll need it most in the scenario where it becomes inaccessible as real estate equity (whether due to a down-turn in prices, tightened lending, or slowing in turnover in the market). That may mean losing out on interest rate differential by paying a 3% mortgage while holding cash that’s only earning 1% — it’s the cost of protecting yourself against a blow-up, and may serve as a reminder that you are in no position to buy pre-con.
  4. 4. Do not do it by the skin of your teeth. There are many things that have to go right for pre-con to work out: if even in that scenario you would be stretching, just don’t do it. You will need big buffers and emergency funds for the rare cases where it does not at all go according to plan — and some buffer for the exceptionally common cases where it’s off by a bit. These include:
    • a. The unit is not as advertised, or as polished as you expected, and you have to renovate your brand new unit in some way (e.g. refinishing floors, patching holes, replacing appliances, fixing plumbing issues). Do not count on help from Tarion.
    • b. The unit is late. Late here is a relative word as no condo project in the history of the city has ever finished by the date on the sales office billboards.
    • c. The unit cannot be flipped. So it’s no longer your bag, baby. Maybe in the 5 years you were waiting for your swanky 1-bedroom ultimate bachelor pad to be built you found a mate and spawned, and now live somewhere else. You want to flip upon completion — only to find that 42 other people in the building had the same idea. You’re going to have to either accept (and cover!) a loss to under-cut them all, or come up with the funds to close and rent it out for a year or two until the supply spike subsides and you can find a buyer — or carry it empty for months looking for buyers.
    • d. There has been yet another tinkering in the mortgage market and the financing terms you were expecting when you signed the contract 5 years ago no longer apply. Now you need to come up with more money and/or pay a higher rate than you expected. Or the unit isn’t worth quite as much as you were hoping for when the appraiser is done and you have to cough up a larger down payment to close.
    • e. Occupancy and carrying two units. Occupancy is a weird period in a new development. You have to pay monthly fees, but don’t really own the unit yet. You can live in it, but don’t want to because the rest of the building is still a construction nightmare. Add on illiquidity on one side or the other, and if you have two units you may have to be prepared to carry both of them for a time.

1. The bold statements here are for regular people who risk bankruptcy by placing leveraged bets on pre-con. Go ahead if you greatly resemble a land baron from Monopoly and are trying to spice things up with a bit of speculation.

Darmok and Jalad at Tanagra

May 28th, 2015 by Potato

I wonder how effectively I’ll be able to communicate with Blueberry as she grows up. I mean, so much of the way we communicate is based on shared experiences, which was accelerated in an age of cable TV. So many people my age watched so much of the Simpsons that quotes from the show are an integral part of our lexicon (”I bent my wookie.” “Boo-urns.” “The goggles do nothing!”). Indeed, Scott Meyers mentioned this effect in Magic 2.0: Off to Be the Wizard. With my friends it’s even worse, we can communicate almost exclusively in quotes and imitations from various shows and movies.

It reminds me of that Star Trek: TNG episode Darmok and Jalad at Tanagra, where Picard has to communicate with aliens through references to stories and metaphor.

On one level, she’ll be coming into a different world: she’ll likely never use a command-prompt OS, the mystery of bigfoot and UFOs will be so much less viable, and she’s already started learning how to read and write on a computer before she can even write the alphabet by hand. She may never know what it’s like to memorize facts just because encyclopedias aren’t always at hand/searchable. It will be different. Although there is a chance she’ll pick up my crazy language on the fly, knowing that “SPOOOOOOON!” is just something you say before doing something heroic, even without knowing the source.

Of course, I already have that Darmok and Jalad issue with Wayfare, who should be fully versed in shared pop culture lexicon. Through the winter she was constantly nagging and harassing helpfully reminding me about putting my boots on the mat at the front door. “Arrgh!” She’d exclaim randomly, “how many times have I told you, put your boots on the mat! I’m tired of stepping in puddles!” So I’d apologize, obviously thinking I forgot or something, then go check and see that my boots were indeed on the mat. Squarely, securely, indisputably on the mat. Oh, maybe she moved them for me, I’d think — next time I will definitely be conscious when I pull my boots off after coming in. Then it would happen again, and again, and I went down to see what the problem was with her. And there, despite her complaining, were my boots, sitting as neatly as could be on the mat.

“They are on the mat!”

“No!” she said, “Put them on the mat! THE MAT!”

“Look Mr. Burns, I don’t know what you think sideburns are, but…” and she just didn’t get the reference, even though it was the perfect Simpsons allegory for this particular issue.

Eventually she picked up the boots, and put them on the plastic tray and I was like “oooh, you meant the tray.”

So I don’t know if Blueberry is ever going to get that sideburns reference. But there is hope: she knows that a TARDIS goes “bwwwfff kkkkk kkkk kkkk” [I am not good at onomonopias], and I will shortly be teaching her the Transformers sound for shape changes. Of course, maybe I shouldn’t hope for too much, as it provides us old folks with a secret language all our own for when she figures out how to spell things. For instance, how do you discuss what to have for dinner without having the toddler lock in on one option and dominating the choice?

“Let’s order something in. What do you want?”
“No, we had that one the weekend. Ludicrous speed? What’s the matter Colonel Sanders?”
“No, the Pentavritim is just too far away. Look at all your different coloured hats?”
“Yes! Sandwiches!”
Blueberry: “Sandwiches?! With cheese, and cucumbers, and cheese, and buns!”
“And now there’s no backsies on sandwiches.”

But as much as I’m a little nostalgic and concerned that her youth will be different from mine, making it hard to relate, I’m also a kind of excited about her future. She is turning out to be quite shy — possibly just as shy as I was, maybe even moreso. So maybe she’ll be a bit socially awkward, but she won’t have to wait until she’s 15 for email to get big, or 18 for ICQ to be invented. I also know that she’s clever (beyond just a daddy’s pride) and in today’s society I don’t think she will ever be called a nerd except as a complement. I don’t think kids these days even know “four-eyes” as hate speech.

Not all the new experiences she has will be for the best, but at least she will always know that I am a robot sent from the future.

Risk and the Gom Jabbar

May 21st, 2015 by Potato

This is an excerpt from my book The Value of Simple. It has been edited to stand alone as a post.

In the short term the market as a whole (or an index representing it) can go down 50% or more. As you give the market more and more time to work out the short-term fluctuations stocks become less risky1. For some history, there have been quite a number of market crashes where stocks declined. The worst was the 1929 crash that marked the beginning of the Great Depression. Stocks fell some 90% and took about 25 years to recover. But recover they did, and if you would allow yourself to mark that experience down as a one-off, never-to-be-repeated event, then the worst market crashes involve stocks declining by about 50% (including the recent 2008-2009 market crash). Though those events can be quite painful for investors at the time, they do pass and the markets go on to set new highs. If you held on after any given crash the prices recovered within a few years – that’s long enough that in your day-to-day life you’d wonder if the prices would ever recover, but short enough that it would happen soon enough to matter.

When deciding whether to invest in equities, and how much you can allocate to them, on top of your time horizon is the matter of risk tolerance: your ability to receive a statement from your financial institution showing that the value of your investments had been cut in half, and to not panic or lose sleep at night – or worse yet, log in to your account and sell all of your holdings out of fear or disgust. If you’re the type of person who would panic in the midst of prices falling, seeing everyone else selling and decide that you would join the pack, you would take a “paper loss” that might recover (and given the historical record, would in all likelihood do so) and transform it into a permanent loss. Better in that case to stick to safer investments right from the beginning. Better still though to separate emotions from your investing, and keep a coldly rational long-term perspective.

You need to sort out your risk tolerance in advance: the midst of a market panic and sell-off is not the time to discover your risk tolerance isn’t what you thought and to try to change your plan when it is most expensive to do so. Indeed, that is the time to pull out your planning binder and remind yourself of the long-term plan and what you decided you should do in a market downturn when you were in a calm and rational state.

Unfortunately, there isn’t much of a substitute for that real-world experience of living through a market crash. In Frank Herbert’s science fiction masterpiece Dune, a young Paul Atreides had to endure a test of his humanity called the Gom Jabbar, wherein a magical box simulated the experience of excruciating pain (but left no lasting tissue damage); he had to display the ability to withstand short-term pain and resist his animal instincts in the interest of his long-term future by holding his hand in the box and enduring it by sheer force of will. There are times I wish a similar test existed for investors to accurately gauge their risk tolerance before a market crash, a way to harmlessly experience the pain and roller-coaster of emotions that accompany living through a market crash. Instead you will just have to make the most honest assessment of yourself that you can, and attempt to prepare yourself for what may come — bearing in mind that years-long market crashes and corrections that look like blips on long-term stock charts really consist of day upon day of uncertainty and fear-mongering news reports.

When considering your ability to take risk remember that risk tolerance can also include things like your job or life situation: if you’re in a field that is very boom-and-bust, then you may not want to invest as much in stocks which can also be boom-and-bust-like, because you may find yourself unemployed at the same time that the investments you’ll need to live off of are selling for less. If you’re younger, you have more time to wait for a market recovery or adjust your savings plan than if you are close to retirement. The young can also be more certain of their continued ability to work and save, whereas when you get older your chance of having your investment timeline cut short by a chronic disease increase.

Risk tolerance also touches on your financial ability to suffer losses without destroying your life. If you have a large financial cushion or flexibility in your financial needs you may have a higher risk tolerance. For example, if you were planning on buying a car in four years that would generally be considered too short a time-frame to risk putting the money you have saved up in equities. Yet if you had the flexibility to buy a cheaper car if you did suffer a loss, or to delay your purchase by a few years, it might not be such a black-and-white situation as the timeline alone suggests.

Though I have attempted to put you into the proper mindset with all the warnings of the riskiness of stocks, the simple fact is that investing in stocks is the only easily accessible way to get such high expected returns, with so little effort and expertise required. The warnings are to prepare you for the inevitable rough ride in investing, and not to scare you off of investing entirely. Indeed, including at least some exposure to stocks is critical to reducing your overall risk of running out of money in retirement.

Keep in mind that the volatility of the stock market is very attention-grabbing; market crashes are stressful times and stories of hardship and loss can get passed down through the generations. However, the hidden risks of paying too much in fees or starting too late can be just as costly over the long run – and you cannot recover from those by waiting.

And though I would caution against trying to “time the market”, better returns come from buying when the market is low (remember the aphorism “buy low, sell high”). That will bring us to rebalancing later [in the book], but it’s important to remember that when you’re in the phase of your life when you’re saving money (i.e. when you’re young), you want to be buying stocks when they’re cheaper. So if (when) a market crash comes along, that’s not the time to wring your hands, lament your losses, and consider selling and getting out of the crazy world of investing. Instead it’s the time to cheer the bargains, to buy more, to take advantage of the temporary insanity of the traders to set yourself up for later. Market crashes, as much as they are feared and vilified in the media, usually end up being good for a young investor, and conversely, people do not make money by “waiting for things to settle down.” As long as you have faith that in the long term businesses will continue to be profitable and grow, then eventually your diversified investments should perform for you.

Understanding your risk tolerance in advance is critical for investing success and your ability to stick to your plan through future volatility. Risk tolerance has many components, including details of your situation as well as your psychology.
In the short term, equities can have large losses and high volatility. But history shows that patient investors have been well rewarded over the long term.

1. If you have a definition of risk that is not simply volatility.

Exciting Book Updates and Giveaway

May 15th, 2015 by Potato

I am so excited about the book lately!

Sandi and I got invited back to the Toronto Public Library for our Money 201 course. While that on its own was great, it also helped push the book over 500 sales! That’s not bad for a Canadian release, and the book is still building great reviews, which will hopefully keep the momentum up.

But that’s not the big news. The big, huge, over-the-moon exciting news is that Chapters/Indigo has put the Value of Simple on store shelves! I was just writing about how hard it is to get into bookstores, and just read another self-publishing guide that said to basically forget it as a goal, and then they go and pick it up! I went down to the Eaton Centre right away to visit it as soon as I heard, and there it is. It’s physically there, I can go and touch it or have my picture taken with it — my book, in an actual bookstore! It makes me feel like a successful author and not at all an imposter.

It is a limited release there — in about 25 stores across the country, and only one or two copies each, so it’s best to just go to the page at Indigo to check store stock rather than having me list them here. But the GTA, Ottawa, Montreal, London, Calgary, Edmonton, and Vancouver regions were the spots with copies as of this post.

While for sales this likely will not mean all that much — most book sales are online these days — it is a huge personal achievement, as I had fully given up on the bricks-and-mortar route so their purchasing people decided to stock it without me badgering them. The positive user reviews and decent category rankings must have worked!

I have a few copies here I’ve been holding back for giveaways on other sites, but at this point I think it’s clear that those guys are never going to finish their reviews1. So let’s build off this excitement and give a copy away here!

What you’ll get if you win:

  • A signed copy of The Value of Simple, in your choice of dead tree or ebook editions2.
  • A fridge magnet emblazoned with the glorious cover of The Value of Simple so you’ll have something to talk about the next time you have a party and for some reason everyone ends up mingling standing up in the kitchen instead of moving out to the couch and chairs where you so thoughtfully put the chips and dip…
  • Something else, because good-yet-underwhelming things come in threes, and I’m sure I’ll think of something by then. Until I do, let’s just say an envelope lined with bubble wrap that you can cut open and pop. Pop pop!

How to enter: leave a comment below for 1 entry. To make it a test of skill, eligible entries must either ask an investing-related question that they hope the book will answer, or talk about some part of the investing process you had trouble with. I know I’ve never done this before, but you can get a bonus entry for tweeting about this post (be sure to mention in your comment what your twitter handle is if you’re going to do that so I can assign the bonuses). Contest closes May 30. Canadian addresses only (and if you’re outside Canada, the book really won’t help you anyway).

Too excited to wait? If you’ve bought a copy through my store and end up winning, I’ll just refund your purchase (unfortunately I don’t have that power through my retail partners, but don’t let that stop you from using them… you can always use an extra copy to give to someone special. Did I mention it makes a great graduation gift? Convocation’s coming up…).

1. I would say “and you know who you are,” except that’s likely not true: given that it’s been over 6 months with a few reminders for some of them, it’s probably slipped their mind completely.
2. Yes, I’ve done signed ebooks before. You just have to sign a copy of the title page then scan it in and insert it into the file as an image. More work than for a paper book, but if you like ebooks and that personal touch from authors, nothing is cooler. Well, in the limited context of indie books, and largely because of the uniqueness — other authors just don’t do signed ebooks… yet. Because outside that context, man, it’s hardly cool at all in a world filled with lasers and chocolate ice cream-filled ice cream sandwiches. Anyway, if you want a signed ebook without winning it, you just have to go through my store and mention it in the comments (and send me an email for good measure).