Saturday, June 26, 2010

The Importance of Paying Attention to Financial Statements: Million Dollar Journey

The Importance of Paying Attention to Financial Statements: Million Dollar Journey

Posted: 01 Jun 2010 04:30 AM PDT
This is a column by regular contributor Clark
I’ll relate my experience to underscore the significance of paying attention to your finances – not just the saving and investing parts but also the all-important records of those money transfers/contributions.
I contributed to my TFSA account for 2009 in May of that year and rested in content that I had been prudent in taking advantage of the newly introduced savings vehicle. Since financial institutions do not issue an official contribution receipt for TFSAs like they do for RRSPs, I viewed my monthly statement, verified that the contribution was listed and let it be.
Fast forward to Feb 2010: I filed my income tax return and the tax software (forms) did not have any line about TFSAs. I figured that financial institutions would report to the Canada Revenue Agency (CRA) directly and I had no further part to play. After receiving my Notice of Assessment (NoA) from the CRA, I found that the summary section listed that I had a TFSA contribution room of $10,000 for the year 2010 (the extra $5000 was carried over from the unused room for 2009!). The NoA mentioned that I need to contact my financial institution if there are any errors in the contribution room given on the summary. Despite seeing this, I waited for another couple of weeks thinking that financial institutions may have until April (the tax filing deadline) to report 2009 TFSA contributions. Call it laziness or naivety (or anything else that you find appropriate) but that is what I did!
Sometime in early April, a light bulb went off in my head and I realized that I have to take responsibility for my money. When I contacted my financial institution, they were surprised and said that all contributions had been reported – there went my generosity of giving financial institutions time until April to report TFSA contributions! They asked for a copy of my NoA as proof and promised to do the needful. I learned that my report had been rejected by the CRA the first time around due to some error in the data elements. A few weeks after my intervention, I checked the TFSA section of My Account on the CRA website to see that the contribution had been accepted and showed up correctly.
It is entirely possible that my case was an unusual one and someone from the financial institution may have noticed my rejected report in a few months and corrected the situation. As long as I did not contribute over $5000 for 2010, I would not have been penalized. Nonetheless, I’ll share a few lessons I learned from this experience – some new, some refreshers.
  1. Never Assume. It is possible that TFSA being a new savings vehicle, there were problems, since parties had to get used to the requirements. However, do not assume anything! Be it the time when institutions file their reports or the pace of processing. Contact someone, preferably your financial institution or the CRA.
  2. Watch your Money. Keep track of your monthly expenses and net worth, so that you know where you stand. Alternately, you could try one of the money management software tools – Quicken and Mint spring to mind.
  3. See Where you Stand. If one so desires, they could also get obsessed with net worth tracking and see where they stand among people in their age group, with similar education or years of experience, etc. by browsing profiles on NetWorthIQ.
  4. Be Diligent. Please check your statements when they arrive – bank, discount broker, credit card, mortgage, utility bills, etc. If there is an error, contact the necessary institution as soon as possible. Unless there is a strong reason not to, sign up for the electronic version of your bills and statements, so that you can save them on your computer, back them up easily and preserve some trees along the way.
  5. Be Patient. Once-in-a-while, you might create a fuss over nothing (if it was just slow pace of processing) but most times, it will be worth the effort.
  6. Care about your Finances. No one cares more about your money than you – not even your financial advisor; if he does, then you have a problem, since you’ve become a mere supplier of funds without any knowledge about how (and if) that capital is creating more for you (hopefully, it is!).
Have you had a similar experience? Did you respond swiftly to rectify the error? Or make assumptions like me that the problem will fix itself?
About the Author: Clark is a twenty-something Saskatchewan resident employed in the manufacturing sector. He repaid around $20,000 in student loans and has been working to build his investment portfolio as a DIY investor (not trader) while nurturing plans to retire early. He loves reading (and using the lessons learned) about personal finance, technology and minimalism
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Normal is Broke

Living With A Chain

How to Get a Job when No One is Hiring

When the jobs are hidden

To get a job, you have to find the openings that no one's advertising, and really impress your potential employer.

By Jia Lynn Yang, writer-reporter

NEW YORK (Fortune) -- David Perry, a longtime headhunter, says you're wasting your time if you're looking for job postings online. And he should know: he's often the guy on the other side helping companies lure new talent. Perry, who's based in Ottawa, says that in the last 22 years he has accomplished 996 searches totaling $172 million in salary. And the bottom line in today's economy, he says, is you have to tap the "hidden job market."

Perry's also the co-author of "Guerrilla Marketing for Job Hunters" and he recently spoke with Fortune.

What's the "hidden job market"?

When companies say, 'We have a hiring freeze,' that doesn't mean they're not hiring. It just means they're not adding headcount. Every year there's 20-25% turn over. So in a 1,000-person company, 200 or 250 people are going to turn over, either through attrition, or someone moves. Those companies are still hiring but they don't want to tell you.

So how do you find these jobs?

What you have to do in a recession is map your skills to employers to where you know they have a problem you can solve. My advice to job hunters is pick 10 to 20 companies, no more, and pick companies you're interested in, and that you think you can add value to. That requires researching companies, and so that list may take you two weeks. If you're trying to crack the hidden job market and you know the job position you want reports to vice president, find that vice president on LinkedIn and look at his profile to see who else he's connected to and go ask them, 'What's this guy like to work for?' Do the research before you even pick up the phone.

How can you get someone's attention?

We can go into billboards, sandwiches - that stuff only works once. It's only for one person who figures it out once, once in a city. If you're looking for fun stuff, we have this thing called the coffee cup caper, 30% of the time it will result in an interview. You send an employer a coffee cup with a little $5 swipe card with a little note that says, I'd like to get together and talk with you over coffee. I'll be calling soon. And you send it by U.S. post two day delivery, and that gets registered. So when they've signed for it, you wait about 20 minutes and then you call them. And then you go, Hi, I know you just got my package.' You're proving you're imaginative and creative.

What something people should avoid during a job interview?

This drives me insane: I've seen people mentally deciding in the interview whether they want the job. That's the last place to decide. You go into an interview, and you sell like your life depends on it. You've got to get the job first. I've seen it thousands of times. There's this point in the interview, where people go 'Hmm, do I really want this? You can see their body change. The employer picks it up and it's gone. If the employer is telling you, 'I love you,' and you're not saying 'I love you too,' it's over with.

How about following up afterwards?

If you really like the opportunity, don't go home and write thank you very much. Go back and write a letter that says, upon further reflection of what we were talking about, here's what I bring to the table, here's how I see myself fitting into the organization, including a 30-60-90 day plan.

How can someone attract a recruiter's attention?

You have to go to ZoomInfo and LinkedIn and create a profile. All corporate recruiters and probably 20% of the headhunters in America have ZoomInfo accounts. When we start a search, companies aren't going to advertise. The headhunter goes to ZoomInfo, types in requirements that we need, like skillset, degree, city, functional title, and up will come anywhere from a hundred to several thousand people who fit that criteria. Then we go to LinkedIn and run the same search. If you're in ZoomInfo with a picture, we're going to call you first. Just reverse engineer what recruiters are doing so you get found.

How can you really impress a potential employer?

It hasn't worked in years just to bring in your resume, except only in the most junior positions. I concentrate on directors to CEOs, and the last interview for us regardless is always a Power Point presentation of what you've learned, pain points, and how you intend to fix that. Everyone talks about being a great leader and great communicator, so prove it. Don't go into an interview and treat it like it's just another business meeting. Your career is your biggest asset now - because it's certainly not your house. To top of page


August 2008 Dave Ramsey on Barack Obama

This was aired in August 2008. So was Dave right???