The Hidden Cost of Credit (that everybody pays)

credit trap

Let me put this out there right from the start.  I don’t borrow money.

When I started out in life, like everyone else, I thought debt was a way of life so I got a credit card, and overdraft protection, and a car loan, and started to live and spend like everyone else.  The problem was that as an entrepreneur, I don’t earn like everyone else.  My income was and still is sporadic so I started to use my credit cards to bridge the gaps, before long I was over $40,000 in debt and behind on nearly every bill.  One day late in October, just before it got really cold out the gas company came and shut off the spigot.  In order to turn the heat back on I had to pay them all of the arrears I had run up and put down a new deposit.   Needless to say I didn’t have the money so I ended up borrowing nearly $1000 from a friend that I couldn’t pay back for almost a year.

Today, over 15 years later, I have zero debt with no intention of ever borrowing money again, (EV-ER!) except maybe for a piece of good undervalued real-estate.

All this to say that when I read this story in the Financial Post a few months back, it got my back up.

Credit Card Ruling Could Mean Big Changes for Banks, Consumers – if it ever comes…

Everyone knows that the primary business of banks is to lend money and charge service fees.  So the fact that it is illegal in this country to charge extra to customers who pay for goods on credit shouldn’t surprise anyone.  Banks don’t want you to use cash because they don’t make anything on it.

What’s upsetting about this story is the underlying evil here that because the banks charge the merchants such high fees to accept the cards, everything in the store is marked up.  Even if you don’t use a credit card you’re still paying a price that assumes you did.  That’s just wrong.

Furthermore, it’s illegal in this country for the government to apply a hidden tax.  That’s why sales taxes like the HST/GST are added to your bill as a separate line item and why restaurants have to give you the option of not paying a gratuity.   By hiding the merchant service charge banks are in effect applying a hidden tax to the cost of everything sold in a store that accepts their cards, regardless of the payment method chosen.  It’s high time this practise was stopped.  In a country where the average household spends 162% of its income in a given year, unbundling the merchant fee on credit cards would go a long way to helping consumers rethink the way they pay for things.

True it might hurt the economy in the short term but continuing to spend money on things we can’t afford is simply unsustainable.  Sooner or later consumer debt is going to hurt the economy anyway, better to do it intentionally, with a controlled strategy to keep the economy moving than to let it happen on its own and bring about a crisis, a-la the US Housing meltdown of 2008.

For more information on living debt free see The Meekonomist Manifesto above or write to

3 Things I’ve Learned About Debt

I hate Debt.


I am probably the only financial advisor in the world who will openly admit that I have had a long and checkered history with my own finances.  I’ve been in business in one form or another for over 20 years.  During that time I have lost everything not once, not twice but three times.  You could say I’m just a slow learner and in a lot of ways I am the absolute last person anyone should be taking financial advice from.  Yet I am also the only person you should be taking advice from.  I’ve been there, multiple times, so I can see the signs of impending doom long before many of my clients do.

Here are three things I have learned in my dealings with debt.

1)      Debt is far too easy to acquire.

Pop Quiz – What is the main business of the bank?

I used to think it was providing a secure depository for my money.  After all, they charge me a fee to hold my money, another fee every time I write a cheque and still more fees for things like safety deposit boxes and ordering those fancy printed cheque books.  But no – the main business of banks is lending money.  As such they make it far too easy to acquire debt.  If you have a job, any job, you can generally get some form of credit from a bank.

For instance; I know of one 19 year old, with a history of drug abuse and other trouble with the law who when he decided to get his life in order got a minimum wage job and went to open his first bank account, he left the bank that day not only with a new chequeing account but a $10,000 line of credit as well.  Who gives a 19 year old kid, with no employment history and a drug problem $10,000?

2)      Nobody understands the magic (witchcraft?) of compounding interest.

In 2010 the Canadian government made it mandatory for credit card companies to tell you, right on your statement, how long it would take to pay off your balance by making only the minimum payment.  They did this because credit cards are sold to consumers on the basis of a low monthly payment but it is never explained what those low payments mean to the actual cost of the goods purchased.  The shocking truth; by making only the minimum payment the average credit card will take over 26 years to pay off and the amount of money spent is over 4 times the actual cost of the goods purchased.  That’s right, that $15.00 lunch will actually cost you $60.00 by the time it’s paid for and if you think the price of gas is high now, would you change your driving habits if you knew that you were actually paying upwards of $5.00 a litre when you put on your MasterCard?

Compounding interest is a double edged sword that is great when you put to work for you at 6-8% in your RRSP or other savings accounts but with most consumer debt running at 18-25% you’ll never have enough extra to make a meaningful contribution to your savings plan in the first place if you don’t get out of debt first.

3)      Living debt-free is not only possible – it’s fun!

I don’t have any fancy statistics or quantifiable information on this one; it’s just my personal experience.  Paid for things feel different because they are mine.  A paid for car runs better, the picture on a paid for TV is sharper, and a fancy meal bought with cash just tastes better.  It’s a fact! But until you experience it for yourself you’ll never understand what I’m talking about.

When I was deep in debt I was afraid to answer the phone or go to the mail for fear of whom or what was on the other end and I was constantly worried that the things I bought would break or wear out before I was done paying for them.  Now as a financial advisor I tell all my clients that the first step toward financial security is managing debt.  Until you can learn to do that nothing else I can teach you will matter all that much.

Check out this additional article on debt management from the blog “Retire Happy” that I find helpful in illustrating my point.

Do we need a debit course and exam before taking on debt?

And check out my proven method for getting (and staying) out of debt under the Meekonomist Manifesto here, “The Debt Snowball vs The Debt Avalance”

These Are The People In Your Neighbourhood

The title of this week’s blog comes from a song I learned watching Sesame Street 30 plus years ago.  I’m sure most of you know it, sing with me…

Oh, who are the people in your neighbourhood?
In your neighbourhood?
In your neighbourhood?
Say, who are the people in your neighbourhood?
The people that you meet each day.

The sketch that goes along with this song pits a human adult with various Muppet Characters explaining that people you see everyday doing routine tasks are valued members of society, even heroes because the jobs they do are what keep our neighbourhoods alive, safe and thriving.  The song has evolved over the years and the list has grown to include; Postmen, Firefighters, Bakers, Teachers, Barbers, Bus Drivers, Dentists, Grocers, Cleaners and Garbage Collectors, all getting their turn to play the hero.  The message is simple; every job has value, treat people with respect because these are the people in your neighbourhood, the people that you meet each day.

Thinking of this reminds me of something Jesus said a while back.  Jesus was once asked what it took to inherit eternal life and his response was to point out the greatest commandment of all.

Love the Lord your God with all your heart and with all your soul and with all your strength and with all your mind; and, Love your neighbour as yourself.  [Luke 10:27]

But wanting some clarification (some people call it justification but I think that’s a bit self righteous, I think if we are being honest we all want some clarification on this point) the expert asked him a follow up question that on the surface seems pretty logical to me.  He asked “but who is my neighbour?” [Luke 10:29]

Much to the disappointment of my inner four year old Jesus did not respond with a quaint little song about Firefighters and Bus Drivers, or talk about people who act like me, think like me or look like me.  He responded with perhaps the harshest critique of society ever recorded, and little has changed in the past two thousand years to soften the blow.

In reply Jesus said: “A man was going down from Jerusalem to Jericho, when he was attacked by robbers. They stripped him of his clothes, beat him and went away, leaving him half dead. A priest happened to be going down the same road, and when he saw the man, he passed by on the other side. So too, a Levite, when he came to the place and saw him, passed by on the other side. But a Samaritan, as he traveled, came where the man was; and when he saw him, he took pity on him. He went to him and bandaged his wounds, pouring on oil and wine. Then he put the man on his own donkey, brought him to an inn and took care of him. The next day he took out two denarii and gave them to the innkeeper. ‘Look after him,’ he said, ‘and when I return, I will reimburse you for any extra expense you may have.’

“Which of these three do you think was a neighbour to the man who fell into the hands of robbers?” [Luke 10:30-36]

This familiar story was and is a harsh critique of society for at least three reasons.

First off it exposes the dangers of going it alone.  The road from Jerusalem to Jericho was notoriously dangerous, it was a rocky path that descended several thousand feet in elevation over a fairly short distance as the crow flies, as a result it took the better part of a day to travel as anyone who has tried to walk down a steep hillside knows, you can’t go very fast on a path like that.  Out running an attacker would have been difficult.  As a mountain pass it also provided quite a bit of cover for someone wishing to set an ambush.  For that reason it was a favourite of highway men and bandits and very few people would attempt the journey alone.  Although most commentators don’t talk much about this it’s worth noting, had the traveller been in a group he would have been a lot less likely to be attacked in the first place.

Second, and the most commonly sighted message of this story, it exposes religious hypocrisy.  First a priest, then a Levite, the traditional temple assistants, fail to provide aid to a dying man on the side of the road.  Maybe they too were travelling alone and were afraid they would be attacked if they stopped, maybe they were more concerned about ceremonial purity because Jewish law makes it clear that to touch a dead body means you need to go through an elaborate cleansing ritual before you can re-enter the temple and maybe they were just in a hurry and decided that their agenda was more important than a man’s life.  The point is, if you truly believe that there is no greater commandment then to “love your neighbour as yourself”, then there is no excuse for not demonstrating that kind of love every chance you get.  A priest and a Levite of all people should have known better.

Lastly, and the point that I believe is the most profound in the whole story and the one that get’s glossed over far too often by most commentators is this; the very question “who is my neighbour” assumes that there is a line between who God wants us to love and those who just don’t matter as much.  This point is alluded to in the fact that the real hero of the story is a Samaritan, someone who the first listeners would have considered an outsider and someone even the victim would refuse the help of if he could.  This last point is really driven home by the question Jesus poses back on his inquisitor when he’s finished telling the story.  “Who do you suppose was a neighbour to the man?”[Luke 10:36].  Jesus turns the original question on its head and makes it clear that we shouldn’t be thinking in terms of who is my neighbour but who can I be a neighbour to?

On facebook I follow a group that calls themselves The Christian Left.  The self stated purpose of the group is to expose and shame the hypocrisy of the Christian Right and their hijacking of the political discourse of the United States away from a more socially responsible understanding of traditional Christian values.  The Christian Left is a volunteer organization that sustains itself and covers some its costs through the sale of merchandise.  It’s most popular t-shirt says on the front simply “Love Thy Neighbour”  on the back it says, “Love Thy Neighbour: thy homeless neighbour, thy Muslim neighbour, thy black neighbour, thy gay neighbour, thy immigrant neighbour, thy Jewish neighbour, thy Christian neighbour, thy atheist neighbour, thy disabled neighbour, thy addicted neighbour”.  While I like the sentiment of the list and the fact that it casts a broad net, it’s still a net and it still assumes that there are people who can fall outside of God’s love.

I’ve rattled on a bit too much on this and I’m sure most of you get the point by now but I just want to make one last personal clarification.  I do not condone murder, follow or even agree with the tenants of Islam and I don’t sanction gay marriage.  I don’t believe that the scriptural directive to love my neighbour necessitates that I do any of those things.  The directive as explained in the story of the Good Samaritan is to BE a neighbour, provide comfort hope and shelter when needed and by doing so I am demonstrating God’s love in a tangible and profound way.  Any opportunity to evangelize and speak the rest of my personal convictions into the situation will only be appropriate and accepted after I have shown that kind of other centred love.

To stretch the point of the Sesame Street song I learned when I was four; we are all people in our neighbourhoods and it’s high time we started acting like it.

Political Meekonomy

The following is a working excerpt from my upcoming book “Political Meekonomy; Christian Ethics in a Post Christian World”  I hope you enjoy it, any and all feedback is welcome at the bottom of the page or directly via email at

The term “Political Economy” was the original term coined in the 18th century to describe the study and discipline of moral philosophy associated with the production, buying, and selling of goods and their relationship to law, culture and government.  That’s quite a mouthful but this was the definition that the earliest economist such as Adam Smith, David Ricardo and Karl Marx used and understood in their writing on the subject.  Therefore; at the end of the day the study of political economy is really the study of ethics.

By the late 19th century however popular usage of the term had been shortened to the single word we use today; economics.  With the shortening of the term also came the narrowing of the focus and any thought of the morality and ethics of the issue slowly began to fade away.  A few years ago it was suggested by economist Steve Levitt, co-author of the best selling “Freakonomics” that morality actually has nothing to do with economics at all.  He said; “If morality represents an ideal world, then economics represents the actual world”.   I don’t know about you but I think that’s a pretty cynical way to look at things and it would cause Smith and the rest of the early economist to roll over in they’re graves.  The shift away from the moral and ethical considerations of the issue has caused a major, almost irreversible drift in the way the world works. Morality and ethics are no longer a political question and certainly not one we ask in a polite conversation.  “It’s a personal thing” has become the standard response to any question approaching the morality and ethics of any decision.

In my first self-published book “Meekonomics; Kingdom Economics from a Love Based Mentality”, I developed the idea that we were created for something greater than what we have become.  In the beginning God created mankind in his image both to rule over and take care of his creation.  This seemingly contradictory reasoning only makes sense in the context of God’s love and relationship with humanity.  Ever since the fall of mankind in Genesis chapter 3 and our rejection of God’s leadership, the original design for what I coined God’s Perfect Economy is broken.

My main argument in that first book was that in order to create a functional society we needed to balance the ruler and caretaker mentality that God had given us through what I called the Love Based Mentality.  The only way to do that is by keeping God in the centre of our lives, our hearts and ultimately our society.  It’s that last part, bringing God in to the centre of society that this book is designed to expand upon.

I define “Political Meekonomy” as the study of Christian Ethics as they relate to modern economics, moral philosophy, law, culture and government.

At the same time, as economics has slowly and moved to further and further subjugate morality and ethics out of the public sphere and into the realm of the personal, Christianity itself has become a less relevant political force.  We live in what politicians and anthropologists are now calling the “Post-Christian” age.

According to Wikipedia, Post-Christianity is the world-view in which Christianity is no longer the dominant civil religion.  Society has instead gradually assumed values, culture and worldviews that combine a variety of influences.  By its very nature calling society Post-Christian assumes that the dominant values were once Christian and while culture slowly challenges the assumptions of Christianity the overall basis of our cultural values remain strongly rooted there.  This creates a cultural conflict between our traditional values and progressive ideology that threatens many conservative traditionalists and causes those who wish to re-examine our cultural assumptions to dismiss anything remotely Christian as old school, repressive and archaic.  Most millennnials, the generation that have come of age during the first decade of the 21st century and are now beginning to dominate the work force and the political discourse, view western Christianity in this way, as do most immigrants to North America and the emerging economic powers of Brazil, Russia, Indian and China, the so called BRIC nations.

In 2006 David Kinnaman, CEO of Barna Research, a Christian market research firm dedicated to studying the intersection of faith and culture, conducted a survey of the millennial generation which asked a number of questions about how they view religion in general and Christianity in particular.  His findings were published in 2007 in the book “unChristian; What a New Generation Really Thinks About Christianity and Why it Matters.”  What he found should disturb as much as it excites and challenges the church leaders of today.

The overarching conclusion of Kinnaman’s research is simple; the millennial generation with its easy, almost instant access to information is the smartest and fastest moving generation in history.    They are able to make decisions quickly based on a lot of relevant information.  In short they have not dismissed Christianity without examining it first, on the contrary they have perhaps over-examined it and what they see does not mesh with what they believe a church founded on the principles of a man like Jesus Christ should look like.  The unchristian label is not a label that the millenials have assigned to themselves as much as it is a label that they have placed on the Western Christian church.

To quote Kinnaman;

When outsiders claim that we are unChrisitian, it is a reflection of this jumbled (and predominantly negative) set of perceptions.  When they see Christians not acting like Jesus, they quickly conclude that the group deserves an unchristian label.  Like a corrupted computer file or a bad photocopy, Christianity, they say, is no longer in pure form, and so they reject it.

It is that observation in part that has led me to write this book.  I contend that much of what we call traditional values have very little to do with what Christ actually taught.  Christian Ethics are still relevant and dare I say necessary for the maintenance of a just and fair society.   It’s the way in which we communicate those values that needs to change.

It is my hope that as we work through this study together many of you will see that true Christian values, the ethics that Jesus taught are precisely what society needs more not less of.  Our society needs a greater emphasis on community service, social justice and tolerance.  Sadly however I am afraid that many others who read this book and claim Christian tradition as the basis of their ethics quite frankly will disagree.  Those are the same people though who wouldn’t recognize Jesus if He walked up and asked them for a hot meal, a la Matthew 25.

If we are to move our culture beyond stereo-types and truly embrace Christianity as a viable cultural, ethical and political movement in a our modern, multi-ethnic, pluralistic society we need to re-examine what it was that made it unique in the first place and what propelled “Christendom” to become the dominant cultural force it was for nearly two millennia.  We as Christians also need to be honest with ourselves and look closely and unflinchingly at what we did wrong, where we deviated from our own stated ethics and how we allowed culture to get so far off track.  Indeed much of what has been considered morality inside the cultural assumptions of Christendom is far from what the early church fathers could have envisioned in the so called Pre-Christian world, when they were being heavily persecuted for their faith.

As I mentioned earlier; Political Meekonomy is the study of Christian Ethics as they related to modern economics, moral philosophy, law, culture and government.  So I’ve divided this work according.

I start by defining Christian Ethics and ask the question, what does it mean to be ethical? Next I compare and contrast that to modern moral philosophy, the origins of law and the basis of our culture.

Jesus was a radical teacher who wasn’t afraid to challenge the status quo.  The religious establishment and the political leadership of the day at times demonstrated equal parts curiosity, offence and fear of him.  In order to hold on to power they had watered down and distorted the meaning of much of the Jewish law and built up an elaborate cultural code of conduct that was hierarchical and exclusionary.  Jesus wouldn’t stand for any of it.

The socio-political climate of today is not much different.  An honest look at what Jesus really said, the context that he said it in and the obvious implications of it is no less curious, offensive and fear inducing for those on power today than it was over two thousand years ago.

When I first started to formulate the idea for this book I asked my dad what he thought.  Before I give you his answer you need to know a little about this man.

My father was a Baptist minister in the mid 1960s and 70s. After some early success the church hierarchy took notice and he was placed on the fast track to one day lead a large urban congregation.  But somewhere around the time I was born he began to preach a version of what has become known today as the Emergent Church.  He dared to ask the question “what if Jesus really meant all this stuff?” and challenged his congregation to get radical about how they viewed the poor, mentally ill and developmentally challenged.  He met with a lot of resistance and a few influential (wealthy) individuals complained.  As a result he was banished to a rural backwater.  He languished there for nearly a decade and finally left the ministry for a position as director of a social services agency working with the very people he had earlier gotten in trouble for trying to help from the pulpit.

I may not have all the facts straight, all this happened when I was very young and most of my family memories were formed well after he left the ministry but this is the story I kept in the back of my mind as part of my personal narrative.  I came to the conclusion as a result that at the end of the day, church is a business and the pastor’s real job is not to offend anyone in order to keep the money flowing.  Sadly, thirty years later I witnessed the same thing happen again at a church I was attending when another pastor dared question the cultural paradigm of a long established and fairly wealthy congregation.  Very little has changed.

So I said to my dad, “I’m writing a second book on Christian Ethics in the Post-Christian world”.  He laughed and said simply, “There are none.”

What he meant was that the Christian church has utterly failed in its duty to spread Jesus’ ethics to the rest of the culture.  For the most part they church itself doesn’t even understand what those ethics are.

I’m going on ten years now since I declared personal bankruptcy and started to really study the impact of faith, economics and culture.  One thing has become crystal clear.  Our society needs to stay true to its ethical roots now more than ever and even though we are a Post-Christian society, our ethics remain rooted in the teachings of Jesus.  If our society is to survive we need to take another look there and begin to rebuild on the solid foundation that he laid for us.

Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash. [Jesus, Matthew 7:24-27]

 What is Love?

Anyone who has hung around here for any length of time, and read my book knows that I talk a lot about Love.  More specifically I talk about living life with a Love Based Mentality.  So I figured it was high time I took a few minutes here to define what exactly I mean by that.

I’m obviously not talking about romance or sex or any other emotional response our culture might mistakenly equate with love.  I’m talking about something a lot less emotional and a lot more practical.  I’m talking about behaviour, not a feeling.

This is how we know what love is: Jesus Christ laid down his life for us. And we ought to lay down our lives for our brothers and sisters. [1 John 3:16]

Dr. Greg Boyd, author of the bestselling book “Myth of a Christian Nation” and lead pastor of Woodland Hills Community Church in St. Paul Minnesota once said that 1 John 3:16 is the ultimate definition of orthodoxy.   You see if God is Love, as we are told in 1 John 4:8 then in order to be orthodox we must manifest His love.  And how do we do that? By laying down our lives for our brothers and sisters, that’s how.

Now a lot of people balk at that definition and to be honest I don’t blame them.  I don’t blame them because when someone says that you must be prepared to “lay down your life” people automatically think that they have to be prepared to physically die.  And while in some extreme circumstances that may be true most of us in the west will never be put in a position where we have to make a choice between our own physical life and someone else’s.  No, more likely, and more practically in our modern culture the act of laying down our lives for someone is much more subtle.  But just because it’s subtle doesn’t make it any less impactful.

I call this blog The Meekonomics Project because being meek and laying down your life is one and the same thing.  In today’s vernacular “Blessed are the Meek” could be just as powerfully stated as “blessed are those who submit their power to others”.  Or “blessed are those who lay down their lives in service.”  Do you see the connection?

Now here’s where this gets hard, and I contend harder even than physically dying.  Laying down your life or releasing your grip on personal power is a recurring lifestyle choice.  Our culture tells us to get after it, self promote, reach for the top, go, go, go.  We are bombarded with messages from the media and surrounding culture that laying down our lives is foolish [Romans 1:22, 1 Corinthians 3:19].

But as Paul put it, we must become “living sacrifices”.

Therefore, I urge you, brothers and sisters, in view of God’s mercy, to offer your bodies as a living sacrifice, holy and pleasing to God—this is your true and proper worship. Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is—his good, pleasing and perfect will. [Romans 12:1-2]

When we live that way we begin to manifest a Christ-like Love.  We may never get it exactly right, we are a fallen people after all, but perfect love always looks like Jesus hanging on a cross.  Jesus was so committed to this kind of love that he not only laid down his life and was meek while he lived, in the end he wasn’t afraid to lay down his physical life as well.  And that, as John tells us is how we know what love is.

3 ½ Things Canadians Need to Know About Permanent Life Insurance

I’m a fan of Dave Ramsey.  He’s the host of the aptly named “Dave Ramsey Show”, an American radio- call-in show on over 500 stations where he talks about “You Life and Your Money” and helps people get out debt and invest wisely.  Ninety-nine percent of what Mr. Ramsey says is right-on and applies as much to Canadians as it does to Americans but there is one thing that he is completely wrong on.  At least wrong for the thousands of Canadians who listen to his show every day, and that is his take on Permanent Life Insurance.

You see, the American marketplace and the laws surrounding Life Insurance are different in Canada and Canadians need to understand that difference before they go making any decisions based on the opinions of Dave Ramsey, Suze Orman or any other foreign commentator on the subject.  So before you go taking advice from people who don’t live or work in Canada, here are three and a half things Canadians need to know about Permanent Life Insurance.

Thing #1 – The cash value can be ADDED to your death benefit.

Permanent Life Insurance is a bundled product with both an insurance and investment component.   When you purchase the product you start with a basic death benefit and over time the value of that death benefit increases depending on the dividend rate of return in the investment component.  Your dividends can be reinvested inside the policy to purchase more insurance or paid out in cash.  For example, according to one of Canada’s largest life insurance companies, if a 40 year old male purchased a $50,000 policy and got hit by a bus on his way home from the insurance agent’s office his beneficiary would receive a $50,000 pay out, but if he lived for a year his dividend would be $209.  If he reinvested that dividend and purchased additional coverage his beneficiary would receive approximately $51,094.

According to Mr. Ramsey, and other American financial gurus, the cash value in a permanent life insurance policy is only accessible if you take it out as a loan while you are living and once you die you are only paid the face value of the policy.  While that may be true in the United States, I don’t know, it is categorically false in Canada.  When the dividends are used to purchase additional insurance it is actually worth even MORE if left inside the policy until you die.  If you do need cash throughout your life you can access it by surrendering only the additional insurance without reducing the original face value of your policy.

Thing #2 – The rate of return on your investment is (currently) 6.26%.

This is a bit more complicated to understand.  For that same 40 year old the cost of the $50,000 coverage for a year is $1403.  The dividend in the first year is $209 you can either take the cash and treat as a refund or purchase additional coverage.  To really see the value here you need to contrast that against what the same level of coverage would cost on a term basis (i.e. without the investment component).

Now term insurance is a lot cheaper than permanent insurance.  The same amount of 20 year term insurance would cost $216 per year.  So really what you are doing is investing the equivalent of $1187 per year with the insurance company.  Over the course of 25 years this 40 year old would have invested the equivalent of $29675 over and above the cost of insurance and received cash dividends of approximately $47342.  That’s an annualized rate of return of 6.26%.  According to Mr. Ramsey the average American can only expect to receive 1.9% on their investment in a permanent policy, again, that may be true in the USA but definitely not in Canada.

Thing #3 – Permanent insurance is, well permanent!

Aside from the difference in cost and the ability to build cash value the other main thing Canadians need to understand about permanent life insurance is that it is permanent.   As long as you continue to pay your premiums, which are guaranteed never to increase, you will receive your payout and unlike a traditional investment, once the dividends are paid into the policy they can never be clawed back, (i.e. they are not subject to market volatility).  Sure some traditional investments are returning better than 6%, I’ve seen some mutual funds as high as 15% lately, but you could just as easily lose money in the market even after several years of growth.  Not so with a permanent life insurance policy, once the dividends are paid, they’re paid.  With a term insurance policy on the other hand, at the end of the term the premium always increases and if you don’t continue to pay the higher premium your coverage goes away.  In short if you don’t die during the term of the policy your beneficiary doesn’t get paid.

Back to our 40 year old example, when he turns 60 the cost of insurance increases to $2424 per year, that’s an increase of more than a 1000%! And he hasn’t received a cent in investment value.  Our fictional 40 year is now paying 58% more per year for $50,000 of coverage than if he had purchase the permanent policy.  By contrast the permanent policy has increased the death benefit to over $90,000 and he would be sitting on over the $32,000 in cashable dividends.

Thing #3 ½ – Canadian’s should never take financial advice from Americans.

This should go without saying and that’s why I only give it half a point.  We are a different country after all, with a different culture and different laws, but in our heavily integrated continent it’s hard to get away from the influence of the American media.  So here is my modest appeal; for every minute you spend watching CNN, MSNBC or Fox News, Canadians should spend at least 2 minutes on CBC Newsworld, CTV News Channel or BNN.  I promise you’ll still know what’s going on south of the boarder but you’ll at least get it from a Canadian perspective and you’ll learn what it really means in the context of our laws and our culture.

One last thing; according to Mr. Ramsey, the only people who have anything good to say about permanent insurance are the people who sell it.  In the interest of full disclosure, I do make a portion of my income off of the sale of permanent insurance but only a portion.  I also sell term insurance and mutual funds, in short I sell it all.  Depending on your needs, goals and dreams, permanent insurance can be an important part of a comprehensive financial plan.  But don’t take my word for it, as the speed read disclaimer at the end of Mr. Ramsey’s radio show says, “Because the details of your situation are fact dependent you should additionally seek the services of a competent professional”.

I Just Have to Say Something…

I don’t want to write about this topic.  I had hoped, like many that no one would ever have to write about this topic again.  But sadly we still live in a society that is full of ignorant philistines that just can’t understand how things are really supposed to work.

I’m talking about the recent racist uproar caused by, of all things, a Cheerios commercial.

You can view said commercial here;

There are two things that I find disturbing about this story. 

First the obvious, that racism is alive and well in North America.  That’s just sad.  I thought the civil war was over and the civil rights movement accomplished its goal decades ago.  There is a black man in the white house for Pete’s sake!  Get over it!  The constitution clearly declares all men (and women) created equal if you don’t believe that maybe you need to go back to kindergarten because you’re an ignoramus who should have failed the first time!

The second thing I find disturbing is a little more subtle.  According to CTV News, and a few other major news outlets, somehow this story is being spun in a way that makes the advertisers themselves culpable in their own criticism.  As one news anchor put it, this just shows that advertisers haven’t done enough to reflect the way American society really is. 


So what you’re saying is that since TV programs and commercials haven’t shown enough interracial families in the past they should expect a back lash?  That’s almost as dumb as the back lash itself!  I applaud advertisers who make an effort to tell it like it is.  Maybe in this case they are a bit late to the party but that is no excuse for the Neanderthals who insist in vilifying the idea of interracial marriages and families in the first place.   Racists are racists and giving them the excuse that they’ve never been shown this on TV before is bull.  You can’t give them any reason to hide behind their ignorance! 

The civil war is over.  The civil rights movement is over.  You lost.  Move on!


I don’t know about you but I’m getting sick of all the political scandal in the news lately.  This past week we have heard pretty much nothing but Crack Cocaine allegations leveled at the mayor of our largest city and how certain Senators don’t know the difference between a primary residence and a vacation home. 

 I won’t rehash the stories here, you can read them yourself, just Google, Toronto Mayor Rob Ford and Senator Mike Duffy for the details. 

What irks me about these stories is the sanctimonious way they are being reported.  Don’t get me wrong, I’m no fan of either of the men at the centre of these scandals.  They are both arrogant politicians who are behaving as thought they are above the law but the media is no less arrogant.  In the case of Rob Ford there is very little proof aside from a grainy cell phone video of a man who looks similar to the mayor and in the case of Mr. Duffy, he’s not the only Senator to try and make an end run around the system and claim a tax credit where he wasn’t really eligible for one.  At the end of the day both stories smell like an ideological battle between democratically elected officials and a self-appointed media watch dog bent on discrediting the people they disagree with. 

I wrote about this phenomenon in my recent book “Meekonomics; Kingdom Economics from a Love Based Mentality”, here’s an excerpt from the chapter entitled “Let’s All Share; When Caretakers Rule the World”.  (Buy it now)

Time and time again throughout history once a person or group of people rises to power on a care-taker agenda, once they accomplish what they set out to do, they quickly succumb to the ruler mentality that is present in all of us. 

When care-takers become rulers they are much slower to recognize when they have lost their way.  When faced with opposition a care-taker’s first response is to view their opponent as simply ignorant so they launch a public awareness and education campaign.  When that doesn’t work they seek to discredit their opponents and make them look stupid.  As the debate descends deeper and deeper into a school yard orgy of name calling and vilification the final step is for the once benevolent care-taker to simply oppress the opposition and go about business as usual as if they didn’t exist. This is often achieved through the systematic use of violence in many forms such as arrest, assassination and disappearance. 

Augusto Pinochet of Chile was a master at making his opponents simply disappear when they became too vocal and started to gain popular support.  Years after he was finally over thrown, as a result of a new collectivist movement, hundreds of opposition leaders, journalists, trade union members and just average citizens who dared to speak up against Pinochet’s policies were found in mass graves deep in the Chilean jungle, some showing signs that they had been buried alive!  Similarly, during the so called Orange Revolution in Ukraine the ruling party sought to silence the opposition leader by poisoning him before he could be elected.

Fortunately, in a truly democratic society, with organized opposition and a regular election cycle these extreme examples are rare. That is not say that the same stages of the regime change cycle don’t exist they just move more quickly and rarely end violently.  As I write this the United States, arguable the world’s most politically advanced and peaceful democracy is just days away from a presidential election.  One need only look at the evolution of political advertising seen during this or any election cycle of the last thirty or so years to know that campaigning has become more and more aggressive over the years.  What started out as simple educational ads designed to put forth one particular candidate’s views on a subject have become more personal and less cordial.  Is it really that hard for us to see the potential for a Ukrainian style poisoning or even a few good old fashion Pinochetesque disappearances in our future? 

Do you see?  What’s playing out in the media these days is really just another example of what happens when we try to manage the political economy from our own bias.  There has to be a better way, a third way, a love centered way.

Be Careful What You Pray For

Ever hear the expression “be careful what you wish for”?  Or course you have, that’s why it’s called and expression.  For Christ-Followers it should be “be careful what you pray for”. 

This past week I had one of those experiences.  You see, in order to make ends meet I decided to take a second (and third) job back in January.  Now in addition to building my financial services practice, developing the Meekonomics Project and working part time at a group home for the developmentally handicapped, I get up every morning at 3:00 am and deliver the local newspaper to about 150 homes.  I’m a busy guy! 

More to the point, I tend to be a tired guy. 

So this past Thursday, when I got up to deliver the paper I said a prayer that I’m sure many of you have said yourselves at one time or another.  “Lord Give Me Strength.”  Little did I know to what extend God was going to test me that day. 

I drove to the drop location for my newspapers, stopped the car, turned off the ignition, and took out the keys.  Then I re-thought the process and said to myself, “I don’t need any keys here” so I put them back in the ignition and got out of the car. 

You guessed it – I locked my keys in the car!

Think about the picture for a second.  It’s 3:30 am, there is absolutely no one around and to add insult to injury the phone number for road side assistance, to have a tow truck come and unlock the door, is on my key chain!  “Lord Give Me Strength!”

I’m not sure how long it was, a minute, maybe two, but as I was standing there, staring at my keys dangling from the ignition another one of the paper men (I refuse to call myself a paper boy) came by and kindly offered to drive me home to get my spare keys. 

Once I got everything sorted out and I started to relax I swear I heard God laughing at me!  After He stopped chuckling He said; “I heard you asking for strength but really, you have a pretty easy life.  You have 3 jobs in a world where a lot of people don’t have any.  Because you’re wife is taking care of her elderly parents you are currently living rent free in a clean and safe suburban neighborhood, in a world where a lot of people have no home at all.  Your career trajectory, while not meteoric is steady and you will soon be able to give up one or two of these jobs.  So what if you have to get up early and go to bed before the prime time television schedule is completed.  Life could be worse, a lot worse!  So quit your whining and get on with it!”

When I heard God say that to me it made me smile.  So I dropped a newspaper into a mail slot and started making plans for how I could be a little bit more grateful for the rest of the day.

Has anyone else had a “be careful what you pray for” experience like that?

Book Project Update

First Draft DONE!

 I am so happy and excited to say that as of today the entire first draft of the book project is done and posted on-line.  The working title is: “Meekonomics 101 – How to Inherit the Earth and Live Life to the Fullest Under God’s Economy” 

You can read the entire thing through the buttons above. 

Now before everyone becomes a literary critic remember this is just a first draft.  I know it’s a bit disjointed and there are some gaps in my argument.   My process didn’t allow for me to work on it like a full time assignment so every day for almost a year I got up early and wrote for about an hour.  At the same time I was still trying to post other articles to the blog every Friday. 

Working on a book that way isn’t conducive to writing a fully coherent and flowing explanation of things.  Some days I had to stop in mid thought and go about my regular life.  When I went back to it I often had some difficulty getting back into the rhythm.  But what we have here today is the core of my argument and the task now is to clean it up and make it presentable.

I’d love your feedback.  Feel free to constructively criticize through the comment links at the bottom of each page.  The more I hear from you the better I will be able to understand how my arguments are being received and ultimately make a better finished product. 

This first draft took a year and with any luck the second draft should be ready by the summer of 2013.  After that I hope to be off to the printing press and join the world of self-publishing.  But a lot can happen in six months let’s not get ahead of ourselves, for know I’m just happy to have finished this first stage of things.  There is still a lot of work ahead before I can call myself an author.

So here we go – revise, rewrite, edit, revise, rewrite, edit…