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carrick on money

I roll my eyes when financial literacy experts talk about the good they could do if they were able to teach kids about the wonders of compounding and the time value of money.

That is so not going to work. There are really two branches of personal finance – one for people who “get it,” and another for people who have yet to start their journey to enlightenment. Compounding and the time value of money are important concepts, but they’re just blah-blah jargon for personal finance newbies of all ages.

For them, I suggest they enroll in the MoneySmart Bootcamp created by Globe and Mail personal finance reporter Erica Alini. This is real world stuff, starting with the basics you need to master before concepts like compounding start to mean something.

MoneySmart Bootcamp begins with ideas on getting control of your spending, then progresses to debt and borrowing, investing, housing and emergency funds. This is exactly the right order of operations for personal finance. Before investing, you have to start spending less than you earn.

Investing is the more exciting part of personal finance, even after the setbacks for stocks, bonds and cryptocurrency in 2022. People of all ages were drawn to investing in 2020 and 2021, a period when they were locked down and looking for diversion. Stocks soared, and a lot of money was made.

It was fun while it lasted. Now, we’re in a much more challenging period, with high inflation, rising interest rates and stocks lurching up and down, depending on the day. This is a time when personal finance basics are paramount. You might have all you can handle in paying your household bills without going into debt. Saving and investing may have to wait a bit.

MoneySmart Bootcamp can help you through these challenging times. As Ms. Alini writes, it’s the personal finance crash course you never got in school.

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Rob’s personal finance reading list

Canada’s favourite reward credit cards

A reader’s choice poll on the RewardsCanada website produced this list of favourite reward credit cards in 10 different categories. The big story here is the popularity of cards linked to Aeroplan. Now for the best reward cards as chosen by a financial website called Hardbacon.

How to cancel a credit card

It’s a surprisingly involved process to cancel a credit card, and it can in some cases hurt your credit score. I learned a bunch from this blog post.

So much for the billionaire genius

Washington Post columnist Helaine Olen uses the crack-up at crypto exchange FTX to remind readers how often people fall for the myth of the genius billionaire. FTX founder Sam Bankman-Fried was, until recently, an all-star member of that club.

The unhappy retiree

I’ve seen this point made many times, but it bears repeating. A happy retirement depends as much on planning what you want to do with your time as it does on having sufficient savings.

Ask Rob

Q: I am giving a small stock portfolio to a conservancy in Muskoka, Ont. What is the charitable tax credit I will receive from them?

A: Here’s a guide to the tax benefits of donating stocks to charity.

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

The Benefits Wayfinder can help you find government benefits you’re entitled to. This online tool now offers enhanced help for disabled people.

The Money-Free Zone

Loving the song Try Love by the veteran Jamaican dub artist Horace Andy.

Listen to this

The Planet Money podcast presents the 1970s song Inflation by Earnest Jackson, which seems awfully relevant right now.

From the Twitterverse

A financial planner starts a smoking hot thread with a tweet about whole life insurance. Here’s some information on the differences between term life insurance, which is what most people need, compared to whole life.

What I’ve been writing about
  • Recent home buyers on erupting mortgage payments, how their parents are helping and who they blame for rising rates
  • Eight things a brutally honest investment adviser would tell you about fees, returns and more
  • Some in the investment industry frown on GICs – what’s their deal?

More Rob Carrick and money coverage

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