This time of year is exciting for me because I’m a huge NFL football fan and they are right in the middle of the playoffs. I would love to go to a Super Bowl one year and experience first hand all of the hype surrounding one of the most popular sporting events in the world.
If you’ve seen the commercials, Visa has just finished running a contest where the winner would receive a trip to the Super Bowl for life (too bad it was only for residents of the United States). That would be my dream for sure! Let’s take a closer look at the contest:
The Prize
One winner will be chosen to win tickets (for two) to the NFL Super Bowl for the lifetime of the winner. Every year beginning in 2011, the winner will receive the following: roundtrip coach class air transportation for the winner and one guest from the major U.S. airport nearest winner’s home to the major U.S. airport nearest the city of the applicable game, hotel accommodations (one room, double occupancy), rental car, and two tickets to the applicable Super Bowl game. The winner will also receive a cash payment of $3,400 each year that may be used toward the payment of taxes on the trip (based on the value of the trip at the time it is awarded).
Total Approximate Retail Value of the Grand Prize is $493,678
Lump Sum Payment
As an alternate to the Trip for Life prize, Grand Prize winner has the option to select a one-time lump sum payment in the form of a cheque for $200,000, and a five day/four night (Feb 3rd-7th, 2011) trip for two to see Super Bowl XLV in Dallas, TX.
The package includes two tickets to see Super Bowl XLV in Dallas, TX, scheduled to take place on February 6, 2011, roundtrip air transportation (coach) for two from the major U.S. airport nearest winner’s home to Dallas, TX transportation to and from airport, hotel and game, hotel accommodations (one standard room, double occupancy).
Total Approximate Retail Value of the Alternate Grand Prize is $215,595
Cash For Life
There is also the popular Cash For Life Lottery, which rewards the lucky winner with an annual payment over a period of 25 years, or else with a larger lump sum payment up front. I found a poll over at Red Flag Deals where the readers were asked to choose between $1 million every year for 25 years, or a one time cash payment of $17 million. 68% chose the lump sum payment.
To me, a lump sum payment is the most attractive option because you just never know what will happen in the future. The Super Bowl tickets for life is an amazing prize, but I don’t want to be like the guy in the commercial who proudly says that he’s missed weddings, anniversaries, and birthdays because of his annual committment.
I would take the Cash For Life prize as a lump sum payment as well since I could buy whatever I needed right away, and then I could simply invest the rest in dividend paying stocks to make my own cash for life.
Most of us do dream of winning the lottery and enjoying the freedom to be able to spend our money on whatever we desire. Unfortunately a small percentage of Canadians actually expect to retire from a lottery win. Now I don’t subscribe to the Lotto Max retirement plan myself, but I have to admit that a lump sum payment of $1,000,000 or more sounds like financial freedom to me.
At the beginning of each year I take a look at the previous year-end financial statements and review my portfolio. I use a spreadsheet that tracks the performance of my savings and investments and this assists me in deciding whether to make changes in the coming year.
First of all I note that I have excess money in my savings and trading accounts that needs to be invested. In the next several days (or weeks) I’ll do some research to decide what stock(s) I can purchase.
I also have a high interest savings account that I call my “accrual” account. This is where I make regular deposits to cover my annual insurance premiums, Christmas and other gifts, vacation and other special purchases. Since I recently bought a new car, this account balance has been reduced a fair bit and will need to be replenished to cover some other purchases I have in mind.
I have a couple of mutual funds with low balances that I should finally get rid of. Their balances have barely changed in the last few years and I have kept them way too long. I need to stop procrastinating and transfer the funds into a more productive investment.
Related: How To Use A Stock Screener To Find The Best Stocks
I’m happy to note that all but two of my stocks have increased over last year’s balances. I generally focus more on the dividend income, but it’s gratifying to see an increase in value as well. Some examples of my holdings (in no particular order) are as follows:
| Stock | Shares | Avg Cost | Dec 2009 Bal. | Dec 2010 Bal. |
| TD* | 1510 | $15.82 | $99,570 | $121,892 |
| RCI.B | 200 | $11.26 | $6,512 | $6,902 |
| EMA | 100 | $20.90 | $2,506 | $3,133 |
| TRP | 100 | $20.72 | $3,615 | $3,799 |
| FTS | 100 | $24.99 | $2,866 | $3,391 |
| RET | 100 | $13.53 | $1,533 | $1,775 |
| SAP | 100 | $25.80 | $3,075 | $3,946 |
| REI.UN | 100 | $16.12 | $1,984 | $2,195 |
| COS.UN | 100 | $17.93 | $2,974 | $2,644 |
| POW | 100 | $29.74 | $2,912 | $2,761 |
*Note: As part of an employee savings plan, my TD shares had no actual cost to me apart from being a taxable benefit. I realize I’m quite over-weighted, but to me this replaces the pension plan I won’t receive.
Since my dividend returns are substantially higher than anything I would receive from GIC’s or bonds I don’t bother tracking the annual yields and I’m happy to report that my dividend amounts have increased by a whopping 25.5% over last year, and my yield on cost is up substantially.
For my house value I use the annual tax assessment I get from the city. It may not be entirely accurate but it suits my purpose since I’m not inclined to get a property appraisal every year. The tax department claims that my residence has increased in value by $17,000.
My credit card always has a balance when I do this exercise from holiday spending, but I always pay off my credit card balance in full when my statement arrives so it doesn’t accrue any interest. On the other hand, my line of credit has reduced quite a bit and I expect it to be completely paid off within the next year.
Overall, I’m pleased with the results. My net worth has increased over $50,000 even with some large purchases and my debt/equity ratio is less than 5%. With a bit of tweaking, the implementation of a new personal budget, and a plan for investing both my dividends and new deposits (together with a good economy), I would like to anticipate a very profitable new year.
Most frugal people try and avoid lifestyle inflation for as long as possible. They bank their raises, live on a single income, and try and save money wherever they can. Keeping up with the Joneses doesn’t even enter their vocabulary.
But what happens when they receive a gift that forces them to upgrade their lifestyle, whether it’s through recurring monthly charges, purchasing accessories, or taking up a new habit? Let’s look at a few examples:
7 Gifts That Keep On Taking
- HD Receiver – Congratulations and welcome to the wonderful world of high-definition television. Oh by the way, to access any of these new HD channels you’re going to need to cough up at least an extra $10 per month on your cable bill. You’re welcome.
- Blu-Ray Player – Technology is great isn’t it? You just finished replacing your massive VHS movie collection with the latest DVD’s, and now here comes the Blu-Ray. And at $34.99 per movie those frugal date nights at home aren’t looking so cheap after all.
- Home Brewing System – Really? That’s what a coffee pot is called now? There’s the Tassimo or the Keurig system, which brew delicious single cups of your favorite hot beverage. At $12.99 for 18 cups, I hope you enjoy your new latte factor.
- iPad – Apple comes out with the products that you didn’t know you could live without until you see them. If you’re lucky enough to receive this neat little time waster for a gift, make sure to say thanks for the extra $15 – $35 per month data plan that comes with it.
- E-Reader – Ok I get it, newspapers get your fingers dirty, staring at your computer screen hurts your eyes, and it’s tough to lug around 10 hard cover books with you on your beach vacation. So someone buys you a Kindle. Great, now get started on that e-book collection at $10 a pop.
- Satellite Radio – Your local morning radio isn’t as funny as it used to be. And who wants to listen to all of those ads anyways? Satellite radio lets you pick the stations you like and listen to commercial free radio all the time. Win-win right? But at $7 – $20 per month you might be better off giving the gift of music through a thoughtful mix tape.
- $20 Gift Card to Chez La-De-Da Bistro – Your heart was in the right place, my wife and I needed a nice evening out at a fancy restaurant. But come on, $20 won’t even pay for the tip let alone the escargot, steak & lobster, and bottle of wine. By the way, I hope you’re babysitting too because your $20 won’t even cover that for us.
Before you decide to get one of these fine gifts for someone you care about, think of the extra costs that the recipient will have to incur because of your generosity.
If your adult children are struggling to make ends meet, springing for a Blu-Ray player isn’t going to help them.
And if your friends are staying home and eating Kraft Dinner every night, maybe they can’t afford to be going out to a fancy restaurant.
These gadgets are fun and all, but for the most part they are luxury items that should stay on your wish list.