Weekend Reading: Cash Is King Edition

Fans of credit card rewards have seen a bunch of changes in the travel rewards space over the last 12 months, but not much has happened on the cash back side.  That’s unfortunate because, in the battle for space in your wallet, banks and credit card issuers lost sight over what was really important to customers – how easy is it to redeem the rewards?

Redeeming points with a cash back rewards card is simple – you’ll either get a statement credit or a cheque in the mail.  There are no flight reward charts to memorize, or hidden fees when you try to redeem for travel.

For many of us, including me, cash is king when it comes to rewards.  I’ve updated this post on the top no-fee cash back credit cards in Canada and, no surprise, the MBNA Smart Cash MasterCard comes out ahead. That’s because you’ll get a juicy 5 percent cash back bonus on your grocery and gas purchases for the first 6 months using the card.

Spending $12,000 in the first year will get you $240 cash back – that’s a 2 percent return on your spending, which beats the interest rate on most savings accounts these days.

Because Money

After a brief hiatus we’re back with a brand new episode of the Because Money video podcast.  This time we talked about earning extra money outside of your day job, also know as the side hustle. Check it out below:

Over on my Earn Save Grow blog, I wrote about the parable of the twins.  At Rewards Cards Canada I looked at why fans of the PC MasterCard are so devoted to the card.

Weekend Reading

Sandi Martin goes after a recent report from Advocis, the financial advisors association of Canada, that says advisors and their clients will suffer if Canada bans sales commissions on mutual funds.  Nonsense, writes Sandi, who says that banning embedded commissions will simply “force them to charge fees more in keeping with the actual quality of advice they’re giving, rather than the product they’re selling.”

Rob Carrick explains how you should go about discussing fees with your investment advisor.

Ben Carlson had an interesting post that looked at what would happen if investors only bought at market bottoms.  The study compared the difference between an investor who simply dollar cost averaged into the market to one that had the skill to be able to buy within 17% of the market bottom.  Who do you think came out ahead?  Surprisingly, it was pretty even, which means you might as well just stay in the market rather than trying to time the market. 

Dan Bortolotti calls out the bond bears – the ones who’ve been saying to avoid bonds because interest rates have no where to go but up.

Vanguard Canada introduced five new ETFs this week, including one that is really intriguing – a fund that tracks companies located in developed and emerging markets, excluding Canada.  The Canadian Couch Potato takes a closer look at it here.

How important is it to be on the same page with your spouse when it comes to your finances?  Barry Choi has a thoughtful post explaining what he’s learned about money from his wife.

Dan from Our Big Fat Wallet lists some RRSP mistakes to avoid, including spending your tax refund and making unnecessary withdrawals.

Mark Seed looks back at his decision to buy shares in TransAlta and how he feels about the stock now that it has gone through a rough stretch and cut its dividend.  My advice – cut your losses and move on.

Big Cajun Man looked back at a post he wrote nine years ago wondering how much University would cost before his kids went off to school and updated it with a dose of reality for parents.

And rounding out the blast from the past, Nelson Smith looks back at a post he wrote about stretching for yield.  In 2011, these 15 stocks paid over 10% in dividends and here’s how they’ve performed.

Have a great weekend, everyone!

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  1. Dan @ Our Big Fat Wallet on July 10, 2014 at 11:40 pm

    Thanks for the mention Robb, always appreciated. I just recently heard of the new ETFs so I will have to check those out. Regarding Mark’s writeup on Transalta, I’m torn – part of me says ride it out and continue to collect the dividends (which appear stable). The other part says sell now and invest the money elsewhere. Anyways, have a good weekend!

    • Echo on July 11, 2014 at 7:07 am

      I’d definitely say to ride it out if we were talking about the market in general, but when it comes to an individual stock with a dismal outlook, I’d be tempted to find something with better growth prospects.

      There’s a cognitive bias that prevents us from selling a loser, even though the price you paid has no effect on its future prospects.

  2. Big Cajun Man on July 11, 2014 at 6:39 am

    I have had a rebuttle e-mail claiming my costs are out of whack, but I disagree, that is what I paid!

    Thanks for the inclusion, and I am also a vociferous PC Financial M/C lover as well.

    • Echo on July 11, 2014 at 7:02 am

      Hey Alan, was the email from the Waterloo recruitment office?

  3. Barry @ Moneywehave on July 11, 2014 at 11:43 am

    Thanks for the shout Robb,

    We all know that being on the same page financially is important but it’s also okay to have different opinions on the subject too. The key is to communicate!

  4. Richard on July 11, 2014 at 8:10 pm

    That study about market timing is interesting. If the results are weak, they can only be worse when an investor fails to guess the bottom correctly. Still some of those markets have a gain of 0.5 – 1% or more if you manage to get it right every time over the long term. That can add up. The only problem is that no one can do it 🙂

  5. My Own Advisor on July 13, 2014 at 3:12 pm

    Thanks for the mention Robb!

    Yeah, TA. Sigh…

    I’m tempted to hold it until the end of the year, when I start doing the math on my gains from transferred stock from non-reg. to TFSA earlier this year. If I need to offset some larger than anticipated gains, I will sell. If not, I will likely keep for another year. We’ll see, I’m a bit torn.

    Great list of reads. I need to watch your podcast after the World Cup is over.

    Hope you’re having a good weekend,

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