Today I’m answering reader mail for a feature I call the Money Bag. I’ll answer questions and address comments from readers on a wide range of money topics, myths, and perceptions about money. No question is off limits, so hit me up in the comments section or send me an email about all the money things you’re dying to know.

This edition of the money bag answers your questions about cell phone and data options for travellers, a no-more air travel pledge, digital savings platforms, taking the commuted value of a pension, and dividends versus indexing.

First up is Peter, who reminded me that I promised to write about my experience with cell phone and data plan options when travelling overseas. Take it away, Peter:

Best Cell Phone and Data Options for Travellers:

“Hi Robb. I think you mentioned you would share info on your experience with cell phone options while travelling. I’m heading to Scotland for three weeks in September. Any thoughts?”

Hey Peter, thanks for your email. Three weeks in Scotland sounds amazing! We seriously didn’t want to leave, and even looked into an Ancestry visa to move there, it’s that stunning.

I did plan to write a post about this but hadn’t got around to it yet. My phone is with Bell and I found they had terrible global data options. My wife’s is with TELUS and they had a better plan – $8/day for unlimited data and that was capped at $180 (I think) for 30 days.

Instead, we went with a service called KnowRoaming. You buy a global SIM card (or sticker for your own SIM card) and then insert it when you get to your destination. Follow some basic instructions and purchase your desired plan and you’re good to go. I liked it because, well, it worked, and also because you preload it with $$ credits (like a prepaid Visa) so you can’t get into trouble if you mistakenly download an entire podcast series using data instead of wifi.

The packages were great. I bought 3 days of global unlimited data for $9.99 – and did that 10 times, so it cost about $100. There’s cheaper data options if you don’t need unlimited (Europe 5 GB 30 days is $39.99).

Finally, it assigns you a U.S. phone number, which was kind of odd but it worked. We also bought a local phone number in Ireland through the KnowRoaming app for $4.

They have a refer-a-friend option so you can get 30% off the global SIM sticker or SIM card using my referral code ROBEN46 at www.knowroaming.com.

No More Air Travel Pledge

Here’s Michael, who is concerned about the impact of air travel on the planet, but still wants to earn and use credit card rewards points.

“Hi Robb. Most travel cards are geared toward airlines, lounges and associated rewards related to air travel. Since we have decided to take the no more air travel pledge, except in emergencies to visit family, what card works best if we are now restricting ourselves to train travel and electric car travel.

As consumers are beginning an evolution towards a more planet conscious citizenry, there may be more of us looking for planet saving alternatives in our financial products. I would be interested to know what you think. And would further be interested in how to get the finance industry to create products for people like me. Or are they there and I am just not seeing them?”

Hi Michael, thanks for your email. Great question, by the way. And I applaud you for taking the ‘no more air travel’ pledge.

I think you still have a few options to earn rewards that have nothing to do with flying. One may sound contradictory, but it’s the BMO Air Miles World Elite MasterCard. The thing with Air Miles is you can set your preferences to Air Miles Cash, which allows you to redeem your miles instantly in store for gas, groceries, movie tickets, etc.

Air Miles Cash

Another option is the PC Financial World Elite MasterCard, where you earn PC Optimum points that can be used instantly in-store at Loblaws stores and Shoppers Drug Marts.

You could get a hotel rewards card, like the American Express Bonvoy Card – you’ll earn points to be redeemed at Marriott hotels.

Finally, any card that allows you to charge a travel purchase (be it plane, train, car rental, hotel) and then clear it off your statement with your points balance is a good one because of the flexibility it offers. You can book on your own, likely saving money by shopping around, and then “erase” that charge off your bill by paying with points.

Some examples include the Scotiabank Gold American Express Card, the TD First Class Travel Visa Infinite Card, or the American Express Cobalt Card (I’ve used them all).

So, to answer your final questions, I’d say these products are out there – it just takes some creativity to use them in the way that’s most beneficial and still fits with your values.

Digital Savings Platforms

Debbie wants to get my thoughts on a digital saving and investing platform called Mylo:

“Hi Robb, a lot of Millennials are using Mylo for investing purposes. I am just wondering about your thoughts on this service, as my daughter and her friends are quite enthusiastic about it.

Hi Debbie, thanks for your email. I don’t have any direct experience with Mylo but I understand it to be an app or platform that rounds-up your purchases and saves or invests the difference using a portfolio of low-cost ETFs (like a robo-advisor). I think it’s a pretty neat concept and anything that gets young people excited about saving and investing has my support!

I know some other services like Wealthsimple employ the round-up feature within their platform as well – which has proven to be popular.

Investing the Commuted Value of a Pension

Here’s Wayne, who wants to know how I’d invest the commuted value of my pension (assuming I’d take it over leaving it in the plan).

“Hi Robb, Like many, I’ve been following your progress. Well done! I am particular interested in the Commuted Value of your pension. I have been tracking mine for the last 10 years. Assuming that you take the cash as opposed to a pension, have you thought about how you would invest (safeguarding the principal and providing for many years of potential retirement)?”

Hi Wayne, thanks for the kind words. I’m torn about taking the commuted value versus the pension for life. It’ll all depend on when I leave my current employer. If that’s in the next 2-5 years then I’d be more apt to take the commuted value and just invest in something like VGRO inside a locked-in retirement account. If I stay longer then the pension becomes more attractive.

The pension is more attractive at that stage because you can eliminate stock market risk and never have to worry about your money running out.

On the other hand, pension valuations are extremely complicated and can vary widely depending on bond interest rates, among other things. I would not be surprised to hear about $200,000 swings in valuation depending on when you ask for an estimate. To me, that’s another good reason to take the pension rather than being subject to the whims of a calculation at the wrong time. At least with the pension you have a “defined benefit” and know exactly what you’re getting.

Indexing versus Dividend Investing

Finally, here’s Shawn who wants to know how indexing compares to dividend investing in a downturn.

“Hi Robb, you switched to index investing in 2015. Do you think index investing will beat dividend stocks during a recession? Also what percentage of bonds should someone in their 40s hold? Thanks.”

Hi Shawn, thanks for your email. I have no idea whether indexing will beat a portfolio of dividend stocks during the next downturn. The reason why I switched was because I believe the strategy will outperform over the very long term (20-30 years). I also prefer the simplicity of holding one ETF rather than keeping track of a portfolio of 25-30 stocks.

Most investors should hold bonds in their portfolio to lower the volatility with the goal of helping you stay invested during the bad times. Take a look at these statistics which show different portfolios from conservative to aggressive. The conservative ones performed very close to the aggressive ones over a 20-year period without the huge losses during bear markets:

There’s nothing wrong with a traditional 60/40 split between equities and fixed income, and you can get that with just one ETF from Vanguard’s VBAL product.

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