MINUTES: Investment Club Meeting (January 15, 2013)

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Ellen's Investment Club


Meeting Minutes
Tuesday, January 15, 2013, 7:30 - 9:30pm
7:30pm - 9:30pm
Miles Nadal Community Centre
750 Spadina Avenue (at Bloor)

1
Administrative matters

·         Resources

Toronto Public Library Reference Library


·          Ask an Expert: Investment Research (Feb 4/6-8pm, Feb 19/3-5pm) registration at 416-393-7209
·          Kurt Rosentreter, What comes first: reducing your debts or contributing to RRSP and TFSA, Feb 20/6:30-8pm) No registration required

Thackray’s 2013 Investor’s Guide is now available
2
Guest speaker: David Trahair, Author of Cash Cows, Pigs and Jackpots: The Simplest Personal Finance Strategy Ever

·         David started his presentation by saying that the traditional method of building wealth doesn’t work anymore and the idea of net worth is misleading.  He suggested that cash flow is king, not cash.  You need to know where your cash is coming from and where it is going.  He suggested there are three types of cash flow: cash cows – sources of ongoing cash coming in such as interest from employment or fixed income; cash pigs – outflows of cash such as cars; and potential jackpots – assets that increase in value such as houses during the last decade – but there are no guarantees.  Each category is relative.  Credit card debt is a cash cow for banks but a cash pig for consumers.
·         He suggested that you are your most important source of cash flow so that you should take care of yourself (diet, exercise and sleep).
·         David suggested that the first priority should be to eliminate debt (student loans, mortgages, credit card balances, lines of credit, etc.) before considering investing.  His rationale is that with low interest rates for fixed income investments and low rates of return for equities and other investments, it makes more sense to pay down debt that carries a higher rate of interest than one can earn with investments.  He said it is important that you retire debt free.  Accordingly, you should only buy a house that you can afford in the work years you have remaining.  He cautioned that one should only buy an affordable house as extra space and costs deplete cash flow.
·         He described various cash flow sources such as pensions, CPP and OAS, and options for converting RRSPs at age 71.
·         There were extensive questions and answers.
3
Next Meeting

·         Tuesday, February 19, 2013
·         Pim Rom-Coltroff: How to read financial reports

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