July Course Update

August 1st, 2016 by Potato

July has just ended and the Practical Index Investing for Canadians course is progressing well. Roughly 70% of the content is done and online, everything that had been projected for June and July, with a few bonus items as well (though two of the videos are still rendering here, they have been shot and will be up soon). I’ve updated the syllabus here.

The towel-day pre-order price is on its way out. You have until Friday to get the course at the incredible rate of $49 (no coupon code needed — that’s the price that’s set on the course platform site). After that it will go up to the next pre-order level before release, and to the final price in the fall.

The updates will be coming slower now, though. You’ll notice in the syllabus that though most of the course is there, there are only a few things scheduled to be completed in August, and nothing for September. That’s because I know I’ll be too busy at the day job to get any material up through then, so it won’t be until October that the final bits of the course are up and done.

If you have any suggestions (or prefer that I prioritize one section for August) send me an email and let me know!

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First time hearing about this? The Practical Index Investing for Canadians course is an online course to help you learn how to become a do-it-yourself investor. It builds on the material in the Value of Simple as well as the Money 201 and other lectures I’ve done since to help you get started as DIY investor.

June Course Update

June 26th, 2016 by Potato

June is nearly over and the course development is progressing well. There are a few parts near the beginning that I had flagged for completion in June. With just a week left, a few may slip into July. However, section 8 (Taxes and Tax Shelters) is complete, including parts that were not expected for several months yet — overall the progress is going well.

I think prioritizing that section was a good move, as it was of interest to some of the students who had signed up for the early access, and it creates one complete section to better show what the course is and what it adds above and beyond the walk-through in the book.

I’ve updated the syllabus here. [Edit: here is the latest syllabus for July] The Towel Day/pre-order price of $49 will continue until mid-July, when it will ratchet up as the full release gets closer. If you’re interested in learning more about how to become a do-it-yourself investor, be sure to sign up soon!

Things have been quite busy at work lately, but I’ll be taking some time off over the summer (and I’ll have fewer all-nighters) which will also help keep the course development on track (and I may even be able to catch up on the timeline).

In other news, Brexit Brexit CPP.

Towel Day and Course Pre-Order

May 25th, 2016 by Potato

Happy Towel Day!

As you know, I’m a fan of Douglas Adams, borrowing the “Don’t Panic” message and putting it in large, friendly letters at the beginning of my book. So it’s only fitting that I do something special for Towel Day.

First off the predictable move: you can get a big Towel Day discount on The Value of Simple by buying through my e-commerce site and using the code TowelDay. Now until Friday only!

But let’s get to something better and more thrilling than that, something more keeping with the spirit of Towel Day. First, a blockquote to remind you of what that spirit is:

“A towel, it says, is about the most massively useful thing an interstellar hitchhiker can have. Partly it has great practical value. You can wrap it around you for warmth as you bound across the cold moons of Jaglan Beta; you can lie on it on the brilliant marble-sanded beaches of Santraginus V, inhaling the heady sea vapours; you can sleep under it beneath the stars which shine so redly on the desert world of Kakrafoon; use it to sail a miniraft down the slow heavy River Moth; wet it for use in hand-to-hand-combat; wrap it round your head to ward off noxious fumes or avoid the gaze of the Ravenous Bugblatter Beast of Traal (a mind-bogglingly stupid animal, it assumes that if you can’t see it, it can’t see you — daft as a brush, but very very ravenous); you can wave your towel in emergencies as a distress signal, and of course dry yourself off with it if it still seems to be clean enough.

More importantly, a towel has immense psychological value. For some reason, if a strag (strag: non-hitch hiker) discovers that a hitch hiker has his towel with him, he will automatically assume that he is also in possession of a toothbrush, face flannel, soap, tin of biscuits, flask, compass, map, ball of string, gnat spray, wet weather gear, space suit etc., etc. Furthermore, the strag will then happily lend the hitch hiker any of these or a dozen other items that the hitch hiker might accidentally have ‘lost’. What the strag will think is that any man who can hitch the length and breadth of the galaxy, rough it, slum it, struggle against terrible odds, win through, and still knows where his towel is is clearly a man to be reckoned with.”
–Douglas Adams, The Hitch Hiker’s Guide to the Galaxy.

It has not been a secret that over the past several months I have been working on an online course to complement The Value of Simple and help people get set up as successful do-it-yourself investors. It was almost a year ago that I posted the first draft of the course outline. Since then I’ve given more library talks, a guest lecture for Ellen Roseman’s UofT course, and had more conversations with experts and potential students on how to better refine the course. Most importantly, I’ve done a lot of reading on delivering an online course effectively, and changed my approach to it.

However what I have not done is finished the bloody thing.

So here is my towel: I have the structure, I have a few modules done and uploaded, I have a history of building and delivering courses and workshops in science and personal finance. If you believe that I have just mislaid the rest of the course you can buy it right now at a huge discount, and help test it and shape its evolution as it comes together.

How big a discount? You can get it for just $49 right now as a Towel Day/pre-order special, roughly1 80% off! Why just $49? In part as a tribute: that’s the age Douglas Adams was at his untimely death. And in part because this is early, early access — so early it’s better called a pre-order. However, it will be finished, it will be polished, and if you plan on signing up eventually then doing so now is a great deal. (Note: no coupon code needed, I’ve simply set the price at that level and will raise it for new subscribers as material is added and the course is fleshed out)

Click here to go to the course page and enroll!

1. Roughly because though the final price will likely be $279, I’m very tempted to make the final price $246 because you can even!

The Holidaze

January 2nd, 2016 by Potato

Every year I fall for it, the hopeless optimism of the holidays: “Oh, I’ve got two whole weeks out of the office, I’m going to get so much done!” The to-do list has been piling up all year, from little things like finally fixing the RAID array on the desktop and doing some much-deferred software updates, to making plans to see old friends, to finishing off some major side projects and long-overdue blog updates. Oh yeah, and with all that time “off” I’ll somehow catch up on sleep and have some fun playing trains with Blueberry and try all the video games on my wish list.

And every year it’s the same burnout: I didn’t quite manage to do all my shopping online before the break, and lose the first day off to traffic and parking and retail hell with the other last-minuters. Whoops, forgot to factor in that 5 days are “lost” to the insanity of Potatomas and related holidays. ‎And a day or two of work that I brought home with me has to get done at some point. Then I’m down to just a few days to get two weeks worth of planned stuff done, and I feel like crap for not accomplishing anything.

So next year I’m going to have to go in with lower expectations, which means accepting that some things are not going to get done. This year that’s going to mean Fallout 4 will just have to wait (and my Radblock just arrived from OPG, too!), and so will the course (which is fast becoming vapourware).

The Opportunity Cost of Higher Education

December 3rd, 2015 by Potato

A Conference Board of Canada report on PhD graduates and careers came out (“Inside and Outside the Academy: Valuing and Preparing PhDs for Careers”). Much is being made of the economic implications, especially the grad students made terrible life choices angle, with this quote from the report seeming to get more play than all 135 other pages combined:

“Earning a PhD typically takes 8 to 12 years of study (or more) after completing high school, giving those with lower educational attainment an earnings head-start and initial advantage, which takes some time for a PhD graduate to catch and pass. To illustrate, compare a PhD who takes five years to finish his or her degree to a master’s graduate. If the PhD student had no paid employment during that time (which is unlikely given the nature of PhD funding), the master’s graduate will have earned $282,935 more than the PhD graduate by the time the PhD is earned. (See “Funding for PhD Students.”) With an average annual income of $69,267 or $12,680 more than the master’s graduate—it will take the PhD graduate just over 22 years—a substantial part of his or her working life—to close the cumulative earning gap. As such, while PhDs do see positive returns over master’s graduates, these returns are modest and, on average, the earnings of PhD graduates will not surpass master’s graduates until the later stages of their career.”

This is actually not pessimistic enough. The average PhD-holder will NEVER make up the earnings difference if you factor in the time value of money — worse if you make it more apples-to-apples. That is, if you consider that not only do you earn less for much of your working life doing a PhD, you also have to live like a grad student for many of those years.

One of my professors did this calculation years ago, showing that despite doing quite well in his career outcomes (one of the few to become a high-ranking professor), if he wanted a job working with MRIs he could have got his MR-technician certificate and lived like a grad student and post-doc for the first few years, banking the extra salary, and even earning considerably more at the end of his career would never allow him catch up to the compound growth of those initial savings. The opportunity cost of doing a PhD is huge (and this is for a STEM PhD).

Imagine a 22-year-old graduate from a bachelor’s program finding a job that makes $45k pre-tax. They decide to match their lifestyle and spending to their grad-school-bound friend (solidarity!), who lives off of $17,000 between a stipend, odd jobs, and volunteering in research experiments. They pack away $19,000 in just their first year, and invest it wisely, and keep that up all through their friend’s graduate degree. By the time the PhD student gains an honorific and finds a higher-paying job at age 30, the guy who just got a bachelor’s degree has a net worth of $273k1. They then both start living large, spending $47,000 per year on lifestyle expenses (which the bachelor’s holder can afford thanks to raises over the intervening years), and the PhD-holder socks away 15% of their new, higher income, building wealth to retirement.

But despite making more while living the same lifestyle, the doctor comes well shy of breaking even at age 65, with $989k less in retirement savings than the bachelor’s holder. Even with minimal (risk-free) time value to money and no investing, the doctor’s extra earnings are too marginal over the working types to surmount years of earnings and savings and compounding.

In real life there is only one person who lives that frugally when they don’t have to (and that was newsworthy) so the loss is somewhat illusory. But even saving just a few thousand per year straight out of school and banking their raises will let those who get straight to work get to enjoy higher quality of life earlier and still not lose out on lifetime savings relative to those who make terrible life choices.

(The peak of education appears to be a master’s degree — only two years sacrificed, and with enough earnings oomph that you pass the bachelor’s holder in 7 years).

However, not everything in life is about economic optimization. I could have made way more money if I had pursued business out of undergrad, or gone into a professional program instead of grad school, but I’m not exactly starving. And I do like science and what I do, and job satisfaction is not exactly value-less (just hard to value).

This article in University Affairs has some good discussion on the report, including this quote:

Not one person I know who has a PhD did it for the economic returns that they calculated in advance. Maybe the argument implicit here is that this is what we all should have been doing? That we should be rational actors in a market for the credential that will provide maximum returns.

I don’t know what to say. Yes? Economics shouldn’t be the sole reason to pursue a degree, especially not a doctorate. But the sacrifice and lack of payoff for doing one should not be totally ignored either, and we do need to raise a bit of awareness on that point before people start grad school. I did not know about the economic trade-off when I enrolled (at least, not the magnitude of the difference), and I was a relatively money-savvy undergraduate student. I think there is a need to get the message out there that doing a PhD is a labour of love that mostly likely will not produce any economic benefit.

That UA article references this one in the Post: “We’re letting a bunch of 17- and 18-year-olds dictate our labour market composition, and they’re not given a lot of advice to make decisions about what might be in their best interests.” It’s not much better at 21 when you have to decide whether to be awesome and go to grad school to unlock the secrets of the Universe, or be lame and go make a big pile of money and happiness and social adjustment and have kids while you’re still fertile and shit.

Anyway, the common belief amongst 3rd and 4th year undergrads contemplating grad school is that it’s the path to take to eventually have more money and to get a secure job teaching at a university. Both notions are mostly wrong — grad school opens that path but it’s still a low-probability path. Unless working years start getting a lot longer2, most PhDs will not come out ahead financially; the awareness machine is already cranked to 11 telling us that most PhDs will go into non-academic careers. There are other good reasons to go to grad school, but that trade-off should be made with eyes open.


1. Assuming a 5% return on their investments and 4% annual raises.
2. Which if they do, will be thanks to longevity and brain research done by PhD students.
Final note: I believe that many people would still go on to grad school even with eyes fully open about the costs and trade-offs because they’re just wired for research and hopelessly optimistic about being in the minority that become faculty.