Head Protection for Curling & Skating

November 8th, 2018 by Potato

Concussions are no joke. The more research we do, the more caution it seems we should be taking. We’re learning about the dangers of second impacts, and concussion protocols are more common in lots of sports, and after a suspected concussion players are getting benched more consistently. Helmets for more and more things are becoming a bigger part of our lives.

I’m good with that trend for the most part. I was wearing a bike helmet at school in the 90’s, before it was mandatory and when it was still kind of dorky (though that quickly changed with the help of the law). I still wear my helmet every time I go out on my bike. It just makes sense, and it’s totally socialized now to be the norm: you protect your lid on your bike.

I go years between falls in curling, and have never hit my head… so far. I fall more in recreational skating, but despite slapping a helmet on my kid, don’t wear one myself in either sport.

Plus, as such things go, a friend had a concussion (not from curling, but it still makes you think) and I had one of my rare, once-in-a-hundred-games fall a few weeks ago (not on my head, but again, it makes you think). There were some cases in the news, reminding us that while you fall less with experience, even pros take a tumble, and in rare cases they can be deadly. This year I’m playing mixed doubles, too, which involves more jumping up to sweep your own rock and generally more sliding around without a gripper on, which I figure is slightly more risky. So I think I’m ready to once again be the dorky kid protecting my noggin before it’s totally cool, which is helped along by my birthday present from my very generous parents: they gave me money for a whole new set of curling gear: new shoes, new pants, new brush head, and a head protector.

Recently, some head protectors that are not helmets have come out for curling and skating: some variation of a hat or headband with extra padding. And I’ve seen more being used on the ice (still a small minority of players, mostly older or newer players, but it’s moved beyond the “that one guy” phase to a growing trend).

And even without a standard to say exactly how much they help, any one of the options should be better than nothing (indeed, the warning label on one says that it’s not designed to be a helmet, just to be better than nothing). The different companies have tested their gear, with the two Canadian ones passing (of course) the test hockey helmets use for falls. I don’t know if I can reproduce the testing results they sent me, but roughly speaking these will cut down the impact of a fall by about a third to a half.

My research turned up three companies to look into:

So I ordered a few for myself, and for Wayfare for skating… enough to fit out a whole team so I could share with friends (with medium-to-large heads) when I inevitably try to drag them out to learn to curl at a funspiel, and of course write about them for the blog!

Ice Halo

I tried a flexfit ballcap style Pro-Hat and a Halo HD. For protection, Ice Halo uses a high-density foam: this will compress and spring back into shape if you give it a firm squeeze, but it’s for higher impacts, so this is not like a squishy pillow. The halo is, as the name implies, a ring all the way around, and will stretch to fit a few different head sizes. The had just has foam in an arc around the back and part of the sides, about half the thickness of the Halo HD. Both the hat and Halo HD use elastics cleverly built into the product to keep it snug on your head, and it does fit snug. Which, I suppose it has to in order to stay on your head in the event of a fall. The hat didn’t bother me while wearing it, but I was left with a bit of a mark from being tight on my forehead. I found the Halo HD could get uncomfortable after a while, especially if I tried to wear it right against my ears (and thus my glasses). However, if I positioned it just right, the gap where the two arcs open for size created a nice little nook for the top of my ears and the arms of my glasses. To be fair, I’m right at the upper edge of what the medium is supposed to fit (though Wayfare also thought it was snug and she’s in the lower end of the size range). The instructions say to pull at the front, which does loosen it up, but the elastics will tighten it up again in a minute or two, so you kind of have to constantly do that.

I didn’t mind it without my glasses (indeed, all of these options will be fine for people who use contacts to sport or who don’t need vision correction), but then I can’t play like that.

The Ice Halo products had no weird chemical smell when arriving, and coming from within Canada the shipping was the fastest. Though the impact testing results for all options look to be in the same general range, the Ice Halo HD did look to have the greatest cushioning of the options here (which fits with intuition, as there’s the most foam there to compress), but I’m not sure how meaningful the difference is — in my non-expert view, finding a head protector you’ll actually wear consistently may be the best criteria.

An Ice Halo HD on my head.
It’s a slightly thick headband that I’m not wearing over my ears.

An Ice Halo ProHat ballcap on my head.
It looks like a ballcap, with a bit of a bulge.

An Ice Halo ProHat ballcap on my head, more rear-view than the previous.
You can see the bulge of the protective foam from the back.

Crasche

Crasche builds their products around modular protective inserts, backed by strong polycarbonate and lined with neoprene, which would be reusable after impact.

I got a Crasche Curler touque, which has two thinner protective elements in the front and two tall, regular thickness ones in the back, as well as a Middie (designed for skating, but I might also wear it curling sometimes). The Crasche products are soft material with special pockets to hold the protective inserts, which you can easily slide out to clean or to adjust the fit (e.g., they suggest turning some pads upside-down to make your middie fit tighter, and presumably you can sacrifice some to make it fit looser).

Though the protective elements are rather different from the Ice Halo, for the Middie the look from the outside is quite similar: a black headband of about the same thickness. I found the Middie a touch more comfortable, despite their size guide suggesting my head was too big for the size I got. On my head it naturally sits just a bit above my ears (and glasses), and the segmented nature let me adjust the front a bit independently of the back (i.e., it could bend a bit in the middle to go around my ears while still being low on the back of my head). However, the harder inserts do play greater havoc with glasses if the fit does put them over the ears.

The touque I found quite comfortable to put on for short periods. However, it had a tendency to skootch up my head when I tilted my head far back (for instance, when throwing a stone) so I had to keep pulling it down. The band around the edge is also fairly tight (which I suppose it has to be to stay on your head in a fall), and the hat wasn’t quite big enough to totally cover my ears, which was awkward and meant that as I was adjusting it, I’d often end up screwing up how my glasses sat on my ears, which would lead to a cycle of adjustments. Wayfare thought it fit her well, so even though my 23″ head should fit the 21.5-23″+ size, it might be just a hair too small for me, which is affecting the comfort. I might try it with just the rear pads installed and update later.

A few nitpicks on the choice of neoprene: the Crasche products smell strongly of neoprene when they first arrive, which may be an issue for those with sensitive noses — they may need some time to off-gas (after about a week the smell is not noticeable to me). Neoprene also doesn’t absorb moisture, so if I’m doing anything more energetic than holding the broom, I’ll find droplets of sweat lining the pads (on the flip side, they’re easy to wipe down).

Also, the site also says that Canada is duty free for shipping, and while that’s technically true (no duties or crazy brokerage fees thanks to using USPS for shipping), I did have to pay HST to pick it up at the post office, so be prepared for that.

A Crasche Middie on my head.
The segmented plates let this bend around my ears a bit, but otherwise it looks very similar to the Ice Halo HD.

A Crasche Curler hat on my head.
In terms of style/look, the Crasche Curler was actually my favourite. Despite my lack of photograhy skills making this look black, the hat is their dark grey option.

Goldline

The Goldline headfirst line uses expanded polystyrene (EPS, the hard foam in bike helmets) to make their pads, which go inside a variety of holders — hats, bands, or visors. Whichever style you choose, the pads all cover the back of the head only.

This is by far the most common style I see other players wearing, perhaps in part because Goldline has a store on this side of town so people can buy in person rather than ordering online, and their products are also available at Spokes & Sports in Toronto.

A Goldline headband and Ice Halo Pro-Hat side-by-side on a table.
Side-by-side photo of the Ice Halo Pro-Hat and Goldline protective pad in a headband style.

Unfortunately I wasn’t able to find one in my size to show side-by-side with modelled on my head, but their marketing photos do a good job of showing what they look like. I did borrow one to show side-by-side with my Ice Halo pro hat how much thicker the pad is.

Summary

Really, any of these is likely better than nothing when out on the ice.

I preferred the hat styles to the band styles, and have the Ice Halo Pro-Hat and Crasche Curler in my curling gear bag to try out further, though after a few games I’m quickly gravitating toward the Ice Halo hat as my main choice. After all, a ballcap style is a very natural style fit for me (I often wear one anyway). I do want to give the headband styles (Ice Halo HD and Crasche Middie) some more game time, as they do seem to offer a bit more protection than the ballcap, and I like the idea of having some padding on the front as well as the back. However, while I shouldn’t be able to feel shame at this point my life, and certainly not about curling fashion, I’m not sure the headband is a look I can pull off.

I have to say that all three companies were responsive when I bugged them for more details, and you should be able to find something that works for you from one of them.

As much as I’m high on the idea of something is better than nothing, I need to be clear that it’s hard to protect against concussions, and hard to test for that. There’s no guarantee that wearing one of these will prevent one.

There’s still a lot of research to do on concussions and how they happen and what a safe level of impact might be. There still isn’t, to my knowledge, a standard way to test for reducing concussion risk: the standards for hockey helmets and the like are designed around reducing traumatic brain injury and skull fractures. Don’t get me wrong, that is also good and should likely help with concussions, too, but for curling I’m not quite as worried about severe traumatic brain injury because it isn’t hockey: falling is the big risk, not getting beaned by a slapshot or checked into the boards at high speed or taking a skate to the forehead after falling in a tangle. So perhaps soft impact-dampening padding/foam is more important than a hard shell for mTBI. All products are careful to say that they are not helmets, cannot guarantee that they will prevent a concussion, and are designed simply to be better than nothing.

Note: All gear was paid for by myself or my parents, or borrowed from fellow curlers for pictures.

Another helmet option, not tested is from Asham. Consider this a kind of honourable mention

Worry-Free Money Review

July 31st, 2018 by Potato

Worry-Free Money by Shannon Lee Simmons describes how you can set up your finances to make sure your major goals are met and your money is working to help make you happy. Once the big things are taken care of, the method she describes lets you spend the rest worry-free. It’s a fantastic message, lots of people (including me, despite nitpicks) love the book for this, and it’s easy to recommend.

The chapter on dinner out with friends was great. To steal a quick summary: everyone felt pressured to attend an $80/plate dinner and didn’t want to miss out, but the price tag didn’t really fit anyone’s budget. By talking openly about it, the group was able to figure out the trap they were in and find a way to still hang out and have fun without breaking the collective bank.

“Is it safe, is it happy?” This isn’t a quote from Gandalf, but a framework for deciding when spending is good spending. And it’s a framework that I think is driving a lot of the positive reviews — it’s a good, simple way to frame your spending problems.

The “F*ck it moment” was a good way of framing that moment of weakness when we overspend, but I hated the orthography. Yes, the asterisk is in the book. The book for grown-ups that she wrote herself. I know it’s nitpicky, even for me, but for fuck’s sake if you want to swear then just swear — the asterisk isn’t fooling anyone. Those who are prickly about such things will still be prickly (I can tell you from experience — three obscured letters appears to be the prudish sweet spot), and it’s not like you had a network or regulator censoring your book. And if you don’t want to swear, then just call it something else in the first place: a screw-it moment, whatever moment, cowabunga moment, a Scarborough subway moment — there are lots of euphemisms.

Nitpicks

I got an advanced review copy, so I’m not sure how many of the errors were caught before final publication, but there were some funny ones, such as including costs in multiple categories in the highly detailed budget examples (am I the only one not spending hundreds of dollars a month at the gym as both a fixed and variable cost?). One appeared to be an issue of incomplete adjusting of a real case to an anonymized example, where a family with a 5-year-old has been struggling with daycare payments for 8 years (that or it’s a case of an unspeakable — and unspoken — tragedy).

One that I’m pretty sure is not an error is the description of how to figure out how much to save for an emergency fund. While I agree with a lot about the need for emergency funds and how she describes it in general, I have a hard disagree with this:

“The only way to set a savings target for an emergency account is to work out an average based on your spending history.”

Not only are there other ways, that’s a pretty bad one — if I had used that method, I would have $0 in my car repair emergency fund, and been left completely unprepared for the $1700 in damage a mouse did last winter. Similarly, she suggests reducing your emergency fund by anticipated EI payments. I can say from multiple experiences that EI is not a replacement for an emergency fund: it will eventually come through to help backfill your emergency fund, but delays in getting your EI are fairly common and you can’t rely on it in lieu of emergency savings.

That last point may be because she puts a lot of focus on accepting that people are people and to not stress people out with unrealistic goals, that it’s better to aim for something small and achievable than for where you really want them to be — though in that case I would have helped provide a method to better estimate emergency fund needs, and then tell readers to start with a month and work up to 3-6 months’ of expenses saved later.

The Problem with Dylan

I loved the “opting out of life’s checklist” part. You can’t compare yourself to other people, you don’t know how they maintain the tiny sliver of their lifestyle that you can see, and sometimes your life’s checklist (buy a detached house at age X, for example) don’t work for your life as it is and you have to change those plans.

We can’t all be robots (yet… the assimilation technologies are advancing though), so I suppose it’s good that she tackles head-on the difference between what you can do and what you will do. That mixing and balancing between the emotional/irrational part of personal finance with the finance part is always a bit difficult for my spreadsheet-based operating system. I mean brain. That organ above my neck that is totally made of wet gooey gross stuff just like yours. Anyway, it’s great that so much of this book goes right into that terrain and a big reason for all the love it’s getting.

But I didn’t get a good sense of when financial exigencies led to a “lemonade” awakening, where someone should adjust their life checklist, or when the rules of thumb could go out the window in the name of mental health. The story of Dylan was the biggest thing that stuck out here, and I think there were many problems with the case study.

To recap: Dylan’s just barely out of the lowest tax bracket, trying to live in one of the most expensive cities in the world. He was living with a SO who made more than twice as much as him, so it’s not a surprise that he’s in for a big lifestyle adjustment when the relationship falls apart and he’s out on his own.

But he wants a 1-bedroom above-ground apartment in a good location — no basements, no commuting — which will be something north of 70% of his income on housing and fixed costs. That violates the earlier rule to not commit more than 55% of after-tax income to fixed expenses. Oh, and he has a bunch of credit card debt. Shannon does a good job talking about how to make it work temporarily, the value of saving even $100/mo in fixed costs, and finding even a small amount of extra income… but this is a major violation of “the rules”.

Usually, you break the rules in an example to prove a point, and I do not see why Dylan breaks all the rules here — because he doesn’t want to live in a basement apartment or leave a city he can’t afford where his higher-earning ex just threw him out? The only justification was that it was “Not good for my emotional well-being.” So do none of the rules apply if it’s for emotional well-being? Or, given a similar thing happens in Burn Your Mortgage, is the general principle simply that financial rules of thumb don’t apply to Toronto and Vancouver?

“No matter which way we sliced it, the breakup meant that Dylan would be forced to live beyond his means for the next five years. Welcome to real life.”

That “welcome to real life” could just as well have been said to Dylan and his preference for a 1-bedroom apartment in an expensive area — instead of being forced to live beyond his means, he could just as easily been forced to live in a smaller space or (gasp!) with roommates. Now, he’s young (though that point is not reinforced), so letting his goals slip for a few years was something he could (and did) recover from, but I think there’s a danger the average reader takes another message entirely away from the case.

There’s another big problem with Dylan: that credit card debt. While he’s paying interest at 19% for nearly 4 years, Dylan is sitting on more than enough assets in his RRSP to wipe it out in a stroke. Shannon says not to tap them for a completely screwy reason — as Michael James puts it:

“…Taking money from his retirement account didn’t make sense because much of it would be taxed at a higher rate than the interest he was paying on his credit card.” There are good reasons not to touch retirement savings, but comparing a tax percentage to a credit card interest percentage makes no sense at all. You might as well decide to buy a car instead of a house because the car has more tires than the house has bedrooms.

This could likely be a blog post in its own right. But briefly, she’s comparing an annual rate of interest to a one-time tax, and furthermore, that tax is something that will apply at some point no matter what — indeed, he’ll likely never get that money out at a lower rate than he could right now (and then he should prioritize his TFSA once he starts saving again). While there are behavioural issues associated with tapping retirement savings to pay off a credit card (which she does get around to later, such as “putting him into scarcity mode by emptying all his accounts” and making long-term savings short-term ones), that only comes later, and is in reference to his emergency fund rather than his retirement savings. In terms of money sense he absolutely should have pulled the money out of his RRSP to attack the credit card debt. Moreover, that would have freed up $300/mo in his budget (when the rest of the story was about a song & dance to eek out $200/mo).

The Dylan story has a happy ending, but only because he ended up getting more income than the plan called for, and didn’t face a big increase (indeed, any increase) in his rent and other fixed costs. It could have just as easily ended as the next story does, where he builds his plan around being tight for a few years, but banking on raises/more income in the future to offset it… which never come or get eaten up by increases in lifestyle spending. Then instead of facing a big lifestyle adjustment once, he’d be in for two rounds.

Conclusion

Worry-Free Money is a great book, particularly for beginners. It goes into a lot of detail on managing cashflow, with a spend-the-rest/hard limit method that may work better than traditional budgeting for many people who are made of meat and feelings. It acknowledges that emotions exist, and those emotions may compete with financial goals, and takes a holistic view where finances are part of that.

I loved the encouragement to talk honestly about finances, and how many people may be feeling the same financial pressures as you. There are nitpicks (and again, if you’re new here, that’s just how I read and likely why I work as an editor), and it’s left kind of fuzzy when preferences have to give way to the harsh truths of the real world, but I liked it enough that it’s in the reading guide in the back of the 2nd edition of the Value of Simple, and whenever I get around to updating my graphical reading guide I’ll probably include it there, too.

Algorithms to Live By

August 12th, 2017 by Potato

I recently read Algoirthms to Live By: the Computer Science of Human Decisions and enjoyed it. It takes a few important problems for which algorithms are used in computer science, explains what they do and some of the challenges associated with them, and then relates that back to everyday life.

This is the sort of book where I am clearly the intended audience: the authors do a decent job of making everything understandable and relatable, and there’s some humour… but you’re going to have to have some interest in the foundational problems or you will likely lose interest. That’s not to say that you have to have a math or computer science background, they do explain it all, you should just come to this with some interest and not just my recommendation.

To give you an idea, they spend the first chapter on the Secretary Problem. They explain the problem (you want to hire the best possible secretary, but have to balance that against not wanting to spend forever interviewing; oh, and after you interview and reject someone you can’t go back to them), and how this might crop up in different situations in your life (if you want the best tomatoes at the grocery store might be one example of a secretary-like problem in action). Then some practical insights from the solutions in computer science — in this case, the optimal answer is likely 1/e, or about a third. That is, if you have 100 candidates for your job, you may want to interview the first 30-40 or so with no intention of hiring them just to get an idea of the quality of the field, then after that hire the first one that’s better than any of those previous ones.

A great take-away is from the chapter on caching. In particular, the least recently used (LRU) algorithm is the scientific justification for why your desk is covered in papers where the only organizational principle is that you dropped them there, and the ones you need more are in the pile closer to your keyboard. “What might appear to others to be an unorganized mess is, in fact, a self-organizing mess.”

I also really liked the description of thrashing and context-switching in the discussion on scheduling tasks. This is not unique to this book — lots of time-management books and articles talk about having set times to handle tasks (“interrupt coalescing”), and to turn off your phone and email notifications to handle time-intensive tasks. But for some reason this one resonated a bit more for me — when I read their description of a processor thrashing I was like “this is happening to me right now.” Of course, that’s likely idiosyncratic to me and the fact that at the time I read it, I was struggling with low productivity because I had a large number of small, equally urgent tasks (vs. the usual case of having one big important project on my plate to balance with a few smaller fires) and had to keep dropping something to…

A neat new term I came across in the book to apply to some aspects of the housing bubble is “information cascade.”

“[…] under the right circumstances, this mixing of private and public data can prove toxic.

Imagine the bidders are doubtful about their own estimations of the value of an auction lot—say, the right to drill for oil in some part of the ocean. As University College London game theorist Ken Binmore notes, “the amount of oil in a tract is the same for everybody, but the buyers’ estimates of how much oil is likely to be in a tract will depend on their differing geological surveys. Such surveys aren’t only expensive, but notoriously unreliable.” In such a situation, it seems natural to look closely at your opponents’ bids, to augment your own meager private information with the public information.

But this public information might not be nearly as informative as it seems. You don’t actually get to know the other bidders’ beliefs — only their actions. And it is entirely possible that their behavior is based on your own, just as your behavior is being influenced by theirs. […]

Just as with the tragedy of the commons, this failure is not necessarily the players’ fault. An enormously influential paper by the economists Sushil Bikhchandani, David Hirshleifer, and Ivo Welch has demonstrated that under the right circumstances, a group of agents who are all behaving perfectly rationally and perfectly appropriately can nonetheless fall prey to what is effectively infinite misinformation. This has come to be known as an “information cascade.”

[…] imagine there are ten companies that might bid on the rights for a given tract. One of them has a geological survey suggesting the tract is rich with oil; another’s survey is inconclusive; the reconnaissance of the other eight suggests it’s barren. But being competitors, of course, the companies do not share their survey results with each other, and instead can only watch each other’s actions. When the auction begins, the first company, with the promising report, makes a high initial bid. The second company, encouraged by this bid to take an optimistic view of their own ambiguous survey, bids even higher. The third company has a weak survey but now doesn’t trust it in light of what they take to be two independent surveys that suggest it’s a gold mine, so they make a new high bid. The fourth company, which also has a lackluster survey, is now even more strongly inclined to disregard it, as it seems like three of their competitors all think it’s a winner. So they bid too. The “consensus” unglues from reality. A cascade has formed.

No single bidder has acted irrationally, yet the net result is catastrophe.”

This immediately reminded me of bidding wars in Toronto, where a common algorithm is to count the number of noses at the table and multiply by some constant, say $10,000, and add that to the phony asking price. An extra bidder (or 10) should not in any way affect your perception of value for the house, yet there are many instances where this sort of bidding strategy is reported.

The quotation above also shows the one caveat — it is a slightly academic style, with references and names dropped throughout (though quite readable despite that). This is great for being authoritative, but can slow the read down.

Burn Your Mortgage

August 12th, 2017 by Potato

So this is going to be a review of Burn Your Mortgage, and TLDR, it’s mostly going to be me ranting and nitpicking so if you don’t want to get into that, just know that most of it is fine but there are some particular issues. This image sums it up:

Figure from page 9 of Burn Your Mortgage. The caption reads: Canadian real estate prices have been trending upward over the past 25 years. That’s more than we can say about the stock market over this same time. A commentary is superimposed showing that the stock market return goes off the scale of the real estate one before the halfway point in the data displayed, proving the caption wrong.

Before getting to the book itself, some quick background on the tale. Sean is famous for buying a place, living in the basement, renting out the rest, and working super-hard to pay off the mortgage before he turned 31. The Sean Cooper Story boils down to: guy makes $150-200k/yr, lives cheaply in a basement apartment, saves up $500k over 7 years. Yawn. Oh wait, he didn’t just save and invest that money: he bought a house and then burned the mortgage. Now that’s a marketable story!

The biggest problem with Cooper’s story is that it happened at all. In the book and several articles, Sean has said that the reason he was so motivated to burn his mortgage was because of his mother and how she struggled to pay off the mortgage. He had a nearly irrational fear and distaste for debt.

So what should a debt-averse single person who is frugal and content living in a basement apartment do? Rent, of course! No, wait, I meant buy a house you don’t need! Then you can rent out the top floor while you live in the basement apartment, adding risk, losing your principal residence exemption, stressing about the mortgage and pouring everything into paying it off. I have referred to this as Cooper’s Folly.

Indeed, back when Sean first set off on the journey I pointed out that renting out the top floor of his house wasn’t as good a deal as he made it out to be — he was effectively paying something in the neighbourhood of $800-900/mo to live in a basement apartment based on the numbers he was publishing, which is what basement apartments cost anyway. In hindsight, the Toronto real estate market has been on fire, but because he didn’t stay crazy levered, he actually would have been wealthier if he had just rented a basement apartment, saved himself some stress and worry over debt and space heaters, and invested in a diversified portfolio (thanks to the markets also having a great 5-year run — over 12% annualized for an aggressive e-series portfolio vs ~9%/yr for Toronto real estate).

Anyway, this is just the background to the book: Sean bought a house, rented most of it out, lived frugally, worked an insane amount, and paid off the mortgage in 3 years (or, because the downpayment was also significant, the alternative title might be “local man works three jobs, lives in basement, saves $500k over 7 years.”).

The first chapter relates that story, and talks generally about buying a house, while barely even analyzing whether anyone should be buying a house or if renting might be better in their situation. Where it does touch on the topic, it does an egregiously bad job of it, so if you happen to know something about how to compare the options it comes across as extremely biased towards buying. The figure above says volumes about the dismissive tone towards renting and investing. He takes a dig at bears (throwing shade at Garth Turner in particular), but then sets up a strawman version of the rent-and-invest thesis to then make a show of toppling. Sean ignores interest in the rent-vs-buy comparison (implying it’s insignificant), then on the same page says that mortgage interest is a compelling reason to pay down your mortgage (implying it’s an important factor). Within a few pages he talks about the power of leverage as a reason to buy over renting (indeed, 2 of his 8 pros to buying relate to leverage)… then excoriates the reader to not use leverage and burn the mortgage.

MegaMaid from Spaceballs. She’s gone from suck to blow!

After that, the rest of the first section is generic advice on frugality, with a lot of lists… Most of it is fine, but parts of it read weirdly. To take one particular example, he suggests that you could save $500/yr on gas by planning your trips better and driving more efficiently. I spent $400 total on gas last year. Yes, I don’t drive much and have a pretty efficient car, but even with a normal car getting 10 L/100 km, that would take about 4500 km/yr of “extra trips” to get that kind of savings — it really just isn’t realistic. Similarly, who spends $1000/yr on taxis (actually, more than that, if they can save $1000/yr by cutting back or splitting with friends)? A lot of what he talks about in the frugality tips are outside his expertise and it shows.

Weirdly enough, there’s only ~4 pages on work ethic and time management. This really could have been almost the whole book, as the side hustle thing is a huge part of how Sean did what he did and is within his circle of competence to talk about. In some of his better times, Sean made more in a month (on top of his regular job!) than I made in a year as a grad student.

Let’s not understate this: he’s a very hard-working guy. He worked 80+ hr weeks for years at a time — not just a few months holding the world together while his wife was sick or ahead of a major deadline. And he kept that grind up without burning out.

Part of why I didn’t like the book is because of the massive missed opportunity there — I kept expecting to hear how I could also burn my hypothetical mortgage by hustling to earn more than my day job income, and how to fit all those hours in a day and avoid burning out. But the formula for success remains a secret. There is a side hustle appendix at the end, but it’s almost an insult, full of vacuous tips like “Childcare: Look after other people’s kids.” Yes, that is seriously the entire tip. He also suggests donating plasma for money, but there are only two clinics in Canada that do that (Moncton and Saskatoon), and Canadian Blood Services does not and will not pay for donations (though Wayfare is only alive because of the work of ~200 blood/plasma donors, so please do that one anyway). The rest of the list serves similarly as a brainstorming session with no regard to practicality — and clearly isn’t the way that he did it.

Anyway, from the generic middle we come to the FOMO section:

“Although foreign buyers help prop up the economy, many locals are finding themselves being priced out of the market. It’s probably wise, if you’re in the financial position to do so, to buy now while you can still afford to.”

Yep. He also suggests turning to the bank of Mom & Dad, so they can tap a HELOC on their house to help you buy one. Or buy with a friend (“great way to build equity and get your foot in the door” — BTW there will not be a giveaway as I threw up on my copy).

Only late in the chapter, after fanning the FOMO, does he include a note of temperance: “Buying a home is a good long-term investment — most of the time. But it doesn’t always make good sense. (With a book title like Burn Your Mortgage, I bet you weren’t expecting me to say that.) In fact, you may jeopardize your financial freedom if you buy a home before you’re ready and end up selling it within a year, say.” I for one, could have done with a lot more temperance.

The book pays a fair bit of lip service to buying what you can afford and staying within your budget, so it seems like a huge gaping hole that it’s not until much later that he does actually provide a rule-of-thumb on what affordable means. Though that gets immediately undercut because after introducing the figure for affordable, he says to spend more in a pricey market (no justification on how that’s still affordable, or why you couldn’t spend more of your income in a less hot market).

There’s actually a lot of detailed information after that on buying a house, features of a mortgage, and getting wills and insurance, and there’s a lot of promise here… except the FOMO stuff makes it hard to recommend. Not just on getting in before being priced out, but things that are very Toronto/Vancouver red-hot market centric like going in with a “clean” offer, or a bully offer for good measure.

Here’s where I want to take a bit of a side-bar discussion: this is a dumb thing to do. If you actually need financing to close, then you have to including a financing condition, because if for whatever reason you can’t get a loan (which could be due to an unforeseeable event like changes to mortgage regulations or a weak appraisal), you can’t close and are liable for damages that can be costly without that condition as an out.

Realtors put a positive spin on this and call it a “clean” offer, but you might as well call it a “naked” one (and that gets into another sidebar about the incentive to make a deal happen vs. protect a client). Now, in a flaming hot real estate market (such as Toronto has seen up until recently), those are the lengths buyers have been driven to. So if you want to give advice to people that helps them “win” a bidding war and get a house, you have to be pragmatic with the prevailing conditions and suggest they put in a naked offer. And that’s one approach and I get that and it’s fine — but it should also come with the appropriate warning label, and at the very least acknowledge that most readers in the country are not facing such dire competition and can proceed with more sense.

The other approach is to try to give people unpopular advice to protect them, in which case you can acknowledge that the stupid thing is happening, and tell people not to do it. It’s a small risk, sure: most deals close and the buyer finds a way to finance; most pre-construction purchases end with the market flat or higher and a buyer is able to get a mortgage and close. But in a book that also suggests buying life insurance for young healthy people, this is a comparable risk and deserves similar discussion. As a bestseller, it could have helped turn the tide on foolishness. Besides, in markets where you “have” to go in with a naked offer and completely expose yourself to the risks of not being able to close, the price-to-rent might favour renting anyway.

Conclusion

Burn Your Mortgage is mostly harmless. The lead-in ignores the alternatives and serious risks involved in buying, it has a strong pro-buying bias throughout, and there are better sources to go to for frugality hacks, budgeting advice, and side hustle tips. But if you’re going to buy a house anyway, the middle section does have a fair bit of handy information on what’s involved in the purchase and financing process. To be fair I’ve focused on nit-picking the other sections, so the truly helpful middle chunk is not reviewed in detail.

Footnote:

And just as this post was being put up, this from the Star: “Others, who bought unconditionally, have discovered they can’t get the financing to meet their purchase obligation. In some cases, the bank appraisal has come in at a value below what a purchaser agreed to pay, leaving the buyer scrambling to make up the difference.”

The One-Page Financial Plan

August 29th, 2016 by Potato

Carl Richards’ book The One-Page Financial Plan has been out for a little over a year so this isn’t exactly a fresh review. It’s a very quick and easy read, punctuated with Carl’s simple but illuminating sketches.

I want to both sing the praises of this book and damn it, sometimes for the same parts.

The part I loved is the philosophy towards planning, which is to seek a balance between mapping the future out in great detail (impossible as the future is inherently uncertain) and just living for today and playing it by ear. Carl tells us to just make a guess about where we’d like to go in the future. “Don’t be committed to the guess, be committed to the process of guessing.” […] “Once we’ve accepted that a lot can happen between now and the future, financial planning boils down to making the best guess we can about what goals will help us live the life we want. Don’t worry about getting it ‘right.’ You can — and should — simply course-correct your guess when you notice yourself going off track.”

The part that causes me the most dichotomous feelings is the title: a one-page financial plan. I was really excited to see what his one-page plan was, because I really tried to simplify my example plan and it was still over two pages. Here is his “plan”:

Time with family doing things we love!

  1. Fully fund all retirement accounts each year
  2. Fund kids’ education account each year
  3. Save for house

Those are a list of priorities, and this fits so well with the kind of planning that Sandi describes in her library talks, about goals and direction. This is a fantastic exercise to do and I think it’s great that the book covers it so well — this is an easy thing to overlook when trying to plan.

And then I get angry because it’s not a plan, or at least not what you expected a plan to be going in, so the title feels like a cheat. Then there’s a great analogy about putting together a children’s toy, and the picture on the box vs. the detailed step-by-step instructions, which makes me love it again. But that still doesn’t make the picture on the box a plan. Grr!

Anyway, if you were expecting to walk out with a step-by-step guide for creating a detailed financial plan that mapped out how much you had to save in which baskets, you’ll be disappointed. However, it’s a short read, and thinking about your goals and priorities is an important part of the planning process, so it’s still worth your time.