DIY Root Canal vs DIY Tax Stuff

March 19th, 2018 by Potato

Jason Heath pulled out a version of a quote I hate in this Ask MoneySense article on OAS clawbacks:

“Few people would think to Google how to perform a root canal, let alone try it themselves. But lots of people try DIY tax and financial advice.”

Now, it’s hyperbole, and I’m going to rant about it, but I don’t disagree with the main thrust of the article or the next part of that quote: “If you don’t have an accountant, contact one and buy an hour of their time. Bring a list of questions or send them beforehand, so you can get an income tax “check-up.” It may be well worth it even if you only do it once in your life or at least once in a while…” The last half of that paragraph, getting a check-up to have some common questions answered, is entirely reasonable and a good suggestion.

There is definitely a place for professional advice — both planners and accountants. But there’s also a place for DIY-ing things.

The tired root canal analogy makes it sound like you have to be crazy to approach your taxes on your own. But just like with dentistry or medicine, there are lots of things that are totally reasonable to DIY (or Google-then-DIY). You would not go to your dentist every time you had to brush your teeth or floss, and you shouldn’t clog up your doctor’s office with every minor cold or papercut you get, even if you would go for a root canal or surgery. If you have a canker sore it’s totally reasonable to hit Google and gargle some warm salt water. Not everything is a root canal, not everything needs a professional to manage. And especially when it comes to taxes, there are too many people in the world who shrug and say “get an accountant” rather than helping people learn to DIY (which may be related to regulations and the fear of being sued).

This particular article also really highlights an important aspect of the issue: when we’re talking about mouths, people generally have enough background information to know what is at the totally-DIY-able level (like daily brushing) and what is at the I-need-a-professional level (like fixing a cavity or getting a root canal). When it comes to finances, lots of people don’t have the basic literacy to find the answers they need or use them appropriately. Here, finding the OAS clawback threshold is pretty easy, and planning around that is a decent edge case where it’s not unreasonable to do some DIY around it, but also not exploitative to suggest it’s worth getting a professional’s input. However, the person asking the question doesn’t seem to know that the threshold is about clawbacks, not reporting — you have to report everything. So they couldn’t find the answer because they didn’t know how to ask the question (or interpret the answers they likely did turn up). There’s some essential background knowledge missing that’s going to make DIY a challenge here — indeed, to know what can be done on your own.

What then is the answer? I really don’t like a blanket “this is like a root canal and you shouldn’t do it yourself” type approach — as someone who makes tools to help people DIY stuff, that is anathema. People shouldn’t be dependent on professionals; DIYing many things shouldn’t be construed as an impossible, whack-a-doodle notion. But at the same time, there is a financial literacy gap that makes it easy to point out the challenges in implementing DIY approaches. And people shouldn’t be afraid to get some help and pay appropriately.

“Adulting” help is becoming more important and more available. Indeed, the suggestion Jason makes after the hyperbole that I took so much issue with is good — I really like the suggestion to get a few hours of a pro’s time to get questions answered well. Not “get an accountant to manage all your money stuff because you’re hopeless” but “get a block of time and ask some questions to figure this out properly.”

Of course, the analogy to medicine or dentistry really breaks down in personal finance, because our own gaps in knowledge and ability vary. It’s not as clear-cut as this thing is only for professionals, while you’re out of luck if you need help with this basic everyday thing. Especially as paying by the hour for advice is a model that’s becoming more available: no longer is it that investing is the thing you need a pro for, in part because selling an investing product is the only way for them to get paid. Now money coaches and people like Chris are there to help with things like understanding your money and building a budget, while rarefied applications like investing are completely accessible to DIY-ers.

Tater’s Takes: The Flu, Back Pain

March 13th, 2018 by Potato

The flu swept through town here (word from the school is that Toronto Public Health confirmed it was a flu outbreak that hit Blueberry’s class) and I had a rough week there — high fever, chills, aches, as well as a bit of a cough. Though it wasn’t a bad cough in the sense of coughing non-stop, I did get hit hard by the coughs when they came, and now a week and a half later I still can’t talk right and can barely move, because I seem to have thrown my back out and damaged my vocal cords coughing. My back was just starting to seem a bit better today (I could bend over and reach all the way to my knees! I could sit in a chair and type!) when I did something that seemed totally innocuous but put it out again today.

So that sucks. Also makes me feel really old to be shuffling around the house, doing awkward things with my knees and hips to try to reach things without actually flexing my back.

Yesterday was my first day back at work, and it was hard, especially the part where I couldn’t take a nap partway through the day. The flu’s a hell of a virus.

Behind the scenes, the blog is still very quiet. I do have thoughts on the new Vanguard all-in-one funds, and they are positive ones. I’ve also been trying to do a little video to accompany the guide to Canadian taxes for freelancers, but can’t really record anything other than a throat cancer awareness ad at the moment. I figure it could wait until April, however, I’ve seen a fair number of people inpatient for various tax slips so they could go ahead and file, and I’m like man, it’s still early March. I know as someone with a non-registered account I can’t file until April because of T3’s, but even then, don’t most people wait until close to the deadline anyway? Isn’t that what deadlines are for?

One good thing about getting really sick is just shedding the pounds — though I suspect I’ll gain much of that back before the next official weigh-in (and by definition, that’s not healthy weight loss).

Since I’ve got nothing else for you to read, why not check out Sandi’s reads, or Dan’s take on the new one-fund solution. I noticed a lot of people talking about burnout — here’s one from Des at Half-Banked as an example — around the turn of the new year. Definitely been feeling a touch crispy round the edges here, but don’t have articulate thoughts yet on the topic — though many of you have likely noticed the lack of posting frequency, or the number of emails and side projects that get a “that’s nifty, but let’s just park that for a few months until I can properly think about it or really anything.”

I had a few people ask me about dollar-cost averaging late last year, and was going to bring the threads together into a post, but then Dan hit all the points in this post and podcast.

Speaking of podcasts, there are just a whole bunch of episodes of Because Money out now in case you somehow feel the need to make up for the lack of activity on the blog.

New $10 Bill

March 8th, 2018 by Potato

The new $10 bill was just announced, and it’s vertical. I’m getting dizzy just looking at it, and my wallet OCD doesn’t know what to do. This doesn’t fit with the design of any of the other bills (will we be getting new $5/20/50 bills soon to match?), and it’s a problem. I am exactly the sort of person (to no one’s surprise) who always puts my bills in my wallet facing the same direction, in ascending order. When I worked at the theatre, my till was similarly rigid. Having a bill that doesn’t face the right way is going to be uncomfortable.

Some people are pointing out that while wallets universally hold bills horizontally, tills hold bills vertically, so this may make some sense to someone.

To that I say, ok, you have a point, but we didn’t have to screw up the whole bill, we could have part of the bill satisfy each method — see illustration below. And I don’t really care that much about which way the art and design elements face — a top-right number for the value aligned for horizontal placement would fit with other bills (or top left for the back side), and then the bottom of the vertical layout could have a vertically oriented number for better use in those settings (particularly tills).

A quick mockup of a $10 bill with denomination numbers for both horizontal and vertical orientation.

Dumplings & Dragons

February 19th, 2018 by Potato

Inspired by a hilarious misunderstanding as Blueberry was trying to get her friend to play D&D, we made up a game called Dumplings and Dragons today and played a quick round.

Scenario: a hungry dragon comes to town and demands to be fed a variety of novel dumplings. The players work together to make dumplings.

There are three phases: recipe creation, cooking, feeding.

First, a player has to invent a kind of dumpling, then roll a d20 modified by INT or WIS to determine if the new recipe is any good. This determines the “damage/satiation” dice to be rolled later: fumble = recipe failure, dragon will reject all dumplings of this type; 0-9, roll d4; 10-13, roll d6; 14-18 roll d8; 19+ roll d10.

Next, a player has to cook the dumplings. Roll a d20 modified by STR or CON. 0-4 and the dumplings are cooked poorly and put on a -2 modifier to the satiation roll (it is possible to make the dragon more hungry this way). 5-9 gets a -1; 10-12 a +0; 13-16 a +1; 17+ a +2.

Then, a player has to throw the dumplings into the dragon’s mouth, a d20 modified by DEX. The dragon starts at a difficulty threshold (AC) of 11, and increases with each recipe or fumble. With a hit, roll the satiation dice, modified by the recipe and cooking results. Each recipe makes enough dumplings for 3 attempts.

The dragon is content after 20 HP/satiation points and will fly away and leave the town. If the players can get 30 satiation points in 3 rounds, the dragon is impressed and will become an ally for a later game. If the players can’t do it in 7 rounds, the dragon flies off in a huff and burns down a building in town.

It’s intended to be easy and quick to play (our players today were both 5-and-three-quarters years old).

The Market Can Go Down?

February 6th, 2018 by Potato

Panic!

The US market was down about 4% today, following a ~2% decline on Friday. Everyone on the news and social media and forewords in their books seems to be reminding investors not to panic.

Forget that, let’s PANIC!

Look at your portfolio, and that loss. How many up days did it wipe out?1 Now is this it? Or could we have another week, another month of days like this? Where’s the bottom???

Now, with that fear feeling very real and sitting quite uncomfortably in the pit of your stomach, how comfortable are you with the way your portfolio is? Are you ready to ride out whatever the uncertain future has in store for us?

If you’re not feeling so good after today’s loss, well the reality is that this is what markets do sometimes. This is normal. If you’re having trouble handling this, then a few things may be at play:

  • You could have too much risk in your portfolio. Changing that to something more appropriate for the long term may be a good thing to do when the loss is still minor (just don’t time the market – don’t change it back “when things are more settled” – if you can’t handle risk now, you can’t handle risk).
  • You could be untested. This is your first test, there will be more – start getting used to it. Feel the fear and discomfort, then remind yourself that this is what all those books and articles were talking about, and learn to suppress it.
  • You may be paying too much attention to minor day-to-day moves – when it makes the front page it’s hard to tune out completely, but you may want to stop checking in on your portfolio if there’s nothing to be done.

There are various things you can do to try to handle the uncertainty, which I know is not easy, especially if this is your first real experience with volatility.

  • First, try talking yourself through it. This is normal, it’s happened before, it’ll happen again. Etc.
  • Second, try reminding yourself that stocks going down while you still have money to save and put to work is a good thing for you.
  • Third, try using it as a lesson to check in less often.
  • And finally, go watch Bridge of Spies and ask yourself “would it help?”

gif from the Bridge of Spies – ‘You don’t seem alarmed.’ ‘Would it help?’

So yes, ultimately I’m giving the same “Don’t Panic” message as everyone else, but if you are feeling emotional about the markets then try to use that fear to learn something — either about your risk tolerance, or how to manage fear when markets are erasing years of gains instead of weeks.

1. Not that many, actually – this only took us back to ~mid-Dec.