Bridging The Gaap

About the Author:
Detailed information about professors Kapoor, Dlabay, Huges, and Ahmad can be found on Amazon.ca’s product detail page for the book.

What’s it all about?

This book was used as the textbook for the personal finance course I took in the summer of 2007, and it’s one of the reasons I became so passionate about finance. This is a fine book which covers the basics of just about everything you need to know in terms of finance in your daily life.
In the 3rd Canadian edition, there are 15 chapters; subjects covered include:

• Time Value of Money (money in the future is worth less than in the past), Basic Money Management
• Taxes (all kinds, detailed example of how to complete a simple tax return)
• Banks and banking services (overview of different accounts, services)
• Credit (over view of credit cards, loans, credit scores, id theft etc…), Cost of Credit (how to manage credit, bankruptcy)
• Housing (buying, renting,selling)
• Insurance (home, car, life, disability, health)
• Investing (overview of fundamentals, stocks, bonds, mutual funds), Retirement Planning and Estate Planning

There is something for everyone in this book; the topics cover most stages of life in an of themselves, but within each topic, where appripriate, is a discussion of how that topic will be affected by different stages in the life cycle (ex: the insurance and housing chapters will make reference to the different needs of differently aged people).
There’s a lot of information in this book, but despite this its still an easy read. This is, in part, thanks to a great layout: sections, chapters and specific topics are all easily identifiable and easy to find. Important concepts and definitions are found in the sidebar of the page, and the pages themselves are appealing, bright and colourful. In addition, many pages have interesting facts in the margins, and there is at least one example every chapter of “Financial Planning for Life’s Situations” which is both directly tied to real life, and useful.
Where appropriate, mathematical formulae and spreadsheet examples are provided. It should be noted however, that in one or two cases, the formulae are incorrect (but correct versions are found repeatedly in the book). I do not know if this was fixed in subsequent printings. 

So, should you read it?

Absolutely. I read this book for a personal finance class over the course of a summer and it would not be extreme to say that it changed my life. As always, the sooner you learn this information (ie: if you read this book while you’re young, or can present this book to someone young as a gift), the better. The book, however, covers all stages of life, and is appropriate and useful for a reader of any age.
Rent or Buy?

Buy it. I know it’s a $100 book, but it’s almost everything the average person would need to know about their finances, all in one place. This is a great reference book (it is used as a textbook after all), that you’ll want to read and refer back to frequently. I still keep it on my desk as a reference and I deal with this stuff every day. All of the information in this book is necessary, and here it is, all in one place, for the financial neophyte to browse at their leisure.

You can browse an excerpt of the book online at Amazon.ca.

If you like this you should like:

Pretty much any book BTG has reviewed and recommends.

This is a continuation of the previous post, in which I described how BTG would be donating a total of just under $500 to The Uncultured Project.

The total donation came to $420 USD, which is about $460 Canadian. Paypal and the exchange rate ate into the donations a bit, but it’s well worth it in my opinion.

Here’s a breakdown of where that money went:

$200 went directly to Shawn at The Uncultured Project, to be used as he sees fit. I am certain he will use it to accomplish much and change the lives of many for the better when he returns to Dhaka, Bangladesh after his brief but necessary return to Toronto (understandibly, he’s dealing with a bit of culture shock).

The other $220 also went to Matt at The Uncultured Project. Matt, at the time, was in Uganda working with his NGO to help set up a micro-finance operation for 187 Ugandan grandmothers. Originally he thought he would need $500, which is why my last post on the subject makes reference to that amount. Matt also had another investor/friend helping out, but BTG was to donate the majority of the funds. Unfortunately, this would have meant that Shawn wouldn’t receive much. Fortunately, Matt somehow found a way to finance the whole darn operation for under $300. Woo hoo! Now both Matt and Shawn can get a decent amount of money from BTG!

You can read all about Matt’s operation here. He explains it better, and more succinctly, than I ever could.

Keep up the great work guys! BTG is behind you 100%!

Stay tuned for more details about the micro-financing project in Uganda, as well as more from Uncultured.com

If you can be disciplined enough to function at an elite level in a game, there’s absolutely no reason why one can’t transfer those skills to real life. In some cases, you won’t even have to lift a finger (automatic savings withdrawls from one account to another means you don’t even have to think about saving!).

In World of Warcraft, I play a level 70 Undead Mage named Chainface. That’s her on the left, hangin’ out with her good buddy Whiskers the Rat!

One day I decided I wanted my end game status symbol: I wanted my epic flying mount.

While trying to scrounge together 5200 gold for my epic flying mount (improves flying speed by 280%! Whoaaaa!), I realized that there were three fundamental financial lessons that this virtual experience was teaching me about real life money management. So without furthur ado, here is how I earned my epic mount, and the three money management skills this experience has taught me:

1. Don’t Neglect Your Professions!
2. Small Amounts Add Up (or…One Crunchy Serpent At A Time)!
3. Don’t Touch Your Money!

1) Don’t Neglect Your Professions!

This piece of advice is self-evident in both worlds. Whether you’re looking to make money in a game or in your real life, you simply cannot afford to neglect your professions or any other marketable skill you may have. for Chainface, this means taking advantage of her two chosen professions (Mining/Engineering) but also in the skills that she developed along the way (ex: Cooking and First Aid). In reality this ensures that you strive for and obtain a marketable profession or trade that you find agreeable and which can provide you a decent income.

In life, just as in World Of Warcraft, you have to ensure that your professions are a) marketable and b) offer a decent income. Often, this will involve some real world leveling up of skills: really that’s just a fancy way of saying that your education should be a priority.

You “level up” your real life professions by educating yourself, by earning degrees or certifications in a given field, by learning a trade, or by using other innate or situational skills to your advantage (ie: artistic, charismatic, languages etc…).

Good news: it’s not all about being a doctor or a lawyer anymore. There are plenty of non-traditionally high paying jobs that are becoming high paying jobs simply because no one wants to do them. BTG’s “How Can I Make More Money?” article has much more information on the subject, but let me show you how this worked out to Chainface’s advantage:

Chainface is a Miner/Engineer. I make a decent amount from mining and smelting ore into bars and selling it in the Auction House, but I make almost nothing from engineering. I chose engineering because it was fun and I could make a neat hat (a part of my profession I enjoy), but I chose mining because it could provide a fairly good income at higher levels (which is the part of my professions which provides a decent income). But Chainface is also a master cook, and while all players can choose this skill, very few people invest the time needed to level it up.

Let’s see: marketable skill almost no one is leveling up?

Jackpot.

Let’s see how this worked to Chainface’s advantage in Part 2: One Crunchy Serpent At A Time…

2) How Do You Make 5000 Gold? One Crunchy Serpent at a time…

I should explain. I took advantage of Chainface’s marketable skills as a cook: cooking and selling food became the main source of my income very, very quickly. Specifically, I sold Crunchy Serpents, a delectable morsel which has the ability to increse a spellcaster’s damage by 23. This increse in damage, I soon found out, was highly sought after by high level players, for whom even a slight increse in damage can mean the difference between being useful or useless in some of the endgame dungeons.

For whatever reason, almost nobody is able or willing to make it and sell crunchy serpents. There was a hole in the market.

Ohhhhhh yeeeeeeah…Jackpot!

A stack of 20 crunchy serpents sells for 29.99 (29gold 99silver). Individually, 30 gold a piece doesn’t seem like much, especially with a lofty goal like 5000 gold. But as I began to take advantage of my marketable cooking skill, selling Crunchy Serpents for 29.99 a stack, I noticed something.

Small amounts, in large volumes, add up to large amounts!

Here is what 20 stacks of Crunchy Serpents looks like. Recall that each stack (of 20 individual units) sells for 29.99.

You are looking at just under 600 gold worth of food.

Individually the stacks are not worth much, but when you add them all up, YOWZA!

It’s the same thing in real life. A lot of people feel that because they do not make large incomes, they cannot save for retirement, for emergencies, for purchases, for anything.

The trick is to start getting into the saving habit by saving small amounts at first, and work up from there. Start by finding some way to save even a little bit (you could, say skip buying a drink everyday at school like I did!), and plunk that into a no-fee high interest saving account. You can see the effect of saving small amounts for yourself by palying around with ING’s Savings Calculator, which I have used to illustrate the following example:

If you save even a dollar a day, you’ve just saved ~$30 a month, or an incredible $365 a YEAR. If you continued this dollar a day savings plan for 5 years, earning an interest rate of 3%, you’d have just over ~$1900, $139 of which is pure interest!

If you save 2 dollars a day it’s even better: after 5 years at 3% you will have a total of ~$3800, $278 of which is pure interest!

So the lesson here is that even small amounts add up, and add up quickly! This is how Chainface was able to gather 5000 gold, 29 gold at a time. And here’s a real world bonus: Chainface didn’t have the advantage of compound interest! She didn’t get to earn free money from the interest earned on her money sitting in the bank. So what are you waiting for? Start saving today!

Speaking of money sitting in the bank, that ties into our third and final lesson, which we’ll discuss in Part 3: Don’t Touch Your Money!

3) Don’t touch your gold!

Seriously, I don’t care how badly you need gems in those sockets, don’t touch the gold you make from any of your professions: that is earmarked for your savings goal, your epic flying mount.

Quest for some extra cash if you need gold for other things, but the effort you put into earning the gold for your savings goal should be used for that savings gola and nothing else.

It’s a very simple problem: if you have it, you’ll find a way to spend it. Fortunately, this problem has a very simple solution: the best thing to do, whether in game or in reality, is to make sure you can’t easily access the funds you are saving.

In World Of Warcraft, any gold your character earns is always kept on their person: it can be used anywhere and you always have your total amount with you. This gets very very tempting when you see an expensive new tome (coughcoughPolymorph: Turtlecoughcough) and are carrying 3500 gold you’re trying to save for your mount. Smart players have found a way to avoid this temptation: they make sure they cannot touch it by sending it to another player they control (what I’ll be referring to as an “alt”).

This is CrazyInsane. She’s a level 41 Undead Warrior (hence, she has no brain), and she is holding all of Chainface’s hard earned gold, so that Chainface isn’t tempted to spend it.

Sending most of your money to an alt makes it easy to avoid the temptation of spending it: you won’t have it, the alt will. You will have to physically log out and log in as that different character, find a mailbox, mail it back to yourself, log out, then log back in as your original character just to have access to your savings. It’s not as difficult as I’m making it sound, but the advantage is that it should give you enough time to question whether or not you really want to blow your savings.

You can do the same thing in real life by setting up a specific account for your savings goal, one which is seperate form your main bank account. You may want to consider some of the online banks for this: they often offer higher interest rates, little or no fees to use the account, and it can sometimes be difficult to transfer money from the account (it can take days with some banks). These online banks make it very easy to transfer money from your main account, and most will even offer to make this automatic for you. You won’t even have to think about saving!

I like ING, but there are many competitiors out there who I’m sure do just as good a job. You can read my article about how to set up ING sub accounts for specific savings goals here. Remember, always do your research before making a descision, this includes shopping around for a bank account that suits you!

Conclusion:

So after some 4-6 weeks of grinding, mining, and cooking, one day I logged into CrazyInsane, and found the following in her backpack:

Woo Hoo! 5200 gold! Now I can get that sweet epic mount! But first I have to send it to Chainface. Remember I had CrazyInsane hold Chainface’s gold so that she couldn’t spend it.

One quick letter from crazy to chainface later and…Ah that’s better!

Chainface now has access to all the funds she had been saving.

And after a quick flight to Shadowmoon Village, and a quick chat with Olrokk, the riding trainer:

I proudly present to you:

Chainface with the fruits of her labour and diligent saving: her epic flying mount! Man, I love personal finance!

BTG has submitted the Analysis of 7 Canadian Cashback Credit Cards article to the 168th edition of The Carnival of Personal Finance.

Hosted by One Caveman’s Financial Journey, I think he nailed the themse this time around: what better way to start September than with a barbeque themed carnival? You can find BTG’s submission under The Plastic Utensils (Credit).

So Thanks One Caveman, and expect to see BTG in the next edition of The Carnival of Personal Finance!

Part 1- My Portfolio -  Part 2- Using Globefund to Analyze Mutual Funds -

Part 3 - Understanding Fund Facts

I was first introduced to Globefund.ca by my father, and I’ve been happily using it ever since. Run by Toronto’s The Globe And Mail, Globefund.ca is a great tool that will help you discover, research, and analyze mutual funds.

Let me first introduce you to one of the most invaluable tools on the Globefund.ca site: the My Portfolio feature.

Globefund.ca - My portfolio

Full use of “My Portfolio” requires you to register with Globefund.ca, which is free and easy.

Globefund makes it very easy to track several stocks or funds at once. Here you can see a portfolio I created when I was interested in following bank stocks:

Notice the unrealized gain/loss column on the right. Globefund easily breaks this down into percentages both for individual stocks or funds (ex: BMO lost 22.2% of it’s value within the time frame I specified) and for the portfolio as a whole (note that the entire portfolio has lost 15.5% within the same time frame).

What I like best about the “My Portfolio” feature is the ability to use it as a virtual environment. Here, for example, is a portfolio I constructed when I was considering some high risk international mutual funds…(remember, I’m not advocating buying these funds!):

And here is one showing a stock I wanted to buy, quite impulsively:

Boy am I glad I stayed the heck away from Quebecor world! This is another virtue of the My Portfolio feature: instead of buying impulsively (you know, for those times you’re so absolutely convinced that the stock is going up up up!!!) buy it VIRTUALLY in your Globefund portfolio instead.

I configured this virtual IQW purchase right around the time I was getting interested in investing in individual stocks (I’m not any longer, I’m a big index fund fan, but they aren’t for everyone!), and in my enthusiasm and desire to learn and simply get in the market and start investing, I would have lost a whopping 70% of my initial investment. Thankfully, I decided to try investing virtually first.

Globefund.ca’s My Portfolio is a great feature which has prevented me from making some very costly mistakes, but we really haven’t touched much on the real purpose of Globefund.ca, which is to analyze and help people research mutual funds. It can be a little tricky at first, so let’s find out how to navigate to Globefund.ca’s mutual fund reports in part 2!

Part 1- My Portfolio -  Part 2- Using Globefund to Analyze Mutual Funds -

Part 3 - Understanding Fund Facts

What has your experience been using globefund.ca’s portfolio tool? Have you found it helpful?  Has this tutorial been helpful? Let us know by leaving a comment below!

Part 1- My Portfolio -  Part 2- Using Globefund to Analyze Mutual Funds -

Part 3 - Understanding Fund Facts

Navigating Globefund can be a little bit tricky at first, so here is a list of some of the more useful features, as well as how to access them.

Globefund.ca Fund Filter and Fund Selector

Fund selector is great if you want to easily find funds, but all you know is the fund company.

The Fund Filter will also allow you to search by fund company, but compared to the Fund Selector, the Fund Filter is much more robust and offers more ways to search. For example, if you are looking for low cost index funds set the MER to <= 1%. You can also search by asset class, load type, minimum investment and more!

Either the fund filter or the fund selector will send you to a list of mutual funds your search parameters have returned. Clicking on a fund will bring you to Globefund’s analysis of that fund.

Here is a sample search result page, you’ll get this if your only search paramenter is the MD Management Fund company. Remember, I’m not advocating buying their products, I’m simply using this as an example (and you;ll see why I chose MD Managament below.

Click on a fund name to be taken to a more detailed analysis of that fund!

Let’s click on the MD Balanced fund to go to the Globefund analysis page for that particular mutual fund.

Globefund.ca Mutual Fund Analysis

Once we have made it to an individual mutual fund’s page, there are several things for us to consider. Let’s go through them one by one.

Comparing the Fund Against The Index

On the left of the graph, you will see a chart labelled Returns. You will see the time period listed vertically, and horizontally you can see the categories of comparison. The first column is how well the fund has done, the second column is how well the average fund in the same category has done, and the third is how well the index has done.

There are a few important things to consider when you use this chart to compare the fund to an index.

1. Note that the index has a small asterix next to it. Look at the bottom of the Returns box to see which index they are tracking. Funds do not all track the same index. Our MD Balanced Fund is being tracked against the “Globe Canadian Eqt Balanced Peer Index”, whatever the heck that is.
2. Don’t just look at how the fund is doing compared to its respective index in the short run. The chart begins by comparing the 1 month returns. But be aware that funds that appear to outperform the index in the short run (ex: 1, 3, 6 months) generally do not outperform the index in the long run. As to why, you can ask Burton Malkiel.
3. Also keep in mind that the MER has been deducted from the fund’s average. This means a fund that says it has returned 6% has in reality returned 8% if the fund company has an MER of 2%. This is particularly interesting when using Globefund to compare index funds to an actual index; it will always lag behind by an amount just about equal to the fund’s MER. If it’s way out of whack (say the MER is 1% but the index fund is lagging by 3%) look into it, because that shouldn’t happen.
4. Historical returns are not an indication of future performance! Past performance is not an indicator of future gains! 
    

Using the Growth of $10,000 chart

The nice thing about the chart is the ability to control the timeline and the ability to compare the chart to a benchmark of your choosing. I’m a big index fund kind of gal so I like to compare the fund to different indexes. Here I have compared the MD Balance Fund to the S&P/TSX 60 Index.

Had I invested $10,000 in the fund, I would have ended up with just over $31,000 for the time period ending in August 2008. Had I simply invested the $10,000 in the S&P/TSX 60 index, I would have wound up with just over $45,000 dollars!

That’s approximately $14,000 more! Now you know why I’m an index fund fan (remember, always do your own research!).

Using the Risk Measures Chart

This is a nice box, as in “oh, gee that’s nice”.I tend to gloss over this: if anything I will pay attention to the worst ending, not the best. The important thing to remember is that past returns are not an indication of future performance.

This goes back to number 4 on the list above: historical returns are not an indicator of future performance. I pay almost no attention to the best ending, because for all I know those returns may have been flukes, irreproducable (like say, returns at the height of a bubble!). I only barely pay attention to the worst ending and even then I cross check the date. If a supposedly “safer” fund performed very pooorly in a trunbulent market period, I’m going to have to take that into consideration. But I almost completely ignore the best return.

Scroll down and you’ll see the “Fund Facts”. For a detailed look at each of these, let’s head on to part 3!

Part 1- My Portfolio -  Part 2- Using Globefund to Analyze Mutual Funds -

Part 3 - Understanding Fund Facts

What has your experience been using globefund.ca? Have you found it helpful?  Has this tutorial been helpful? Let us know by leaving a comment below!

Part 1- My Portfolio -  Part 2- Using Globefund to Analyze Mutual Funds -

Part 3 - Understanding Fund Facts

Using the Fund Facts Report

There is a plethora of necessary and useful information in this section but here are some that you especially need to consider.

Mgmt Exp. Ratio (MER);

This is the Management Expense Ratio, more commonly abbreviated as the MER. This is the portion of your returns that the fund company takes in return for managing the fund you hold. This percentage is taken whether or not you gain or lose money in a given year. The Management Expense Ratio takes the Management Fee (located directly below) into account.

What does this mean for your money? Let’s say you invest into a fund for one year, and that fund returns 10%. Now let’s assume that the fund company has an MER of 2%. This that at the end of the first year, the fund company takes 2% of your return.

Canada is notorious for having some of the highest MERs in the world. They can really take a chunk out of your returns, which becomes more and more important when you consider the effect of losing 2% worth of compounding a year!

Also, if you are considering a fund, get the low down on ALL the fees. Sometimes a company will have a low MER which can skyrocket if they make returns above a certain level. Always do your research: in most cases it just takes a little bit of time and a little bit of Googling.

Load Type:

This ties in with my warning to understand all the fees associated with a particular mutual fund. You should always check to see if a mutual fund carries a load fee: either a front-end or a back-end load fee.

A front-end load fee is a fee charged when you initially purchase your investment. It’s take from the amount you were going to invest, which means you will actually be investing less than you thought. For example, if a fund charges a 2% front load fee and you were going to invest $1000, they will take $20 and now you only have $980 left to invest.

A back end load fee is exactly the same, only it occurs at the time you sell your investments, and the fee is taken from the proceeds of the sale.

You want to make sure you get a mutal fund with NO load fees, also known as a no-load mutual fund.

The fund company/sponsor:
Check out the company and make sure it’s on the level. Make sure it allows you to redeem your fund at any time (one company’s official website states that in order to redeem your investment, you have to write to them a MINIMUM of 10 business days before the end of the month…he-llo…it’s MY money…) http://www.abcfunds.com/en/contact_us/faq.shtml

Globe 5 Star Rating:
Globefund has its own 5 star rating system, with 5 being a strong rating and 1 star being a weak rating.

I do take this into account, but I always perfer to do my own research. After all, if a fund is too risky for your comfort, who cares if it’s a 5 star fund? Go with something your comfortable with: take all the information into account (including the globefund star rating) but make your own descision.

Minimum Investment:

There are two categories for minimum investment, the amount needed for eligibility of an RRSP, and the amount needed for a non RRSP. As always, think critically. Minimum investments of $500 or $1000 dollars are not uncommon. Larger initial investment requirements  (and they can become quite large) does NOT mean the fund will do better, it’s just more expensive to get in.

Restrictions:
In some cases, you will not be able to buy a fund. this is why I chose to use an MD Management mutual fund for this example: MD Management is a financial management company which caters solely to members of the CMA. There are funds meant solely for teachers, and so on. Some are restrictive simply by virtue of requiring high minimum investment amounts.

Top Holdings:

Here is a screenshot of the top holdings for the MD Balanced fund.

The chart will show you what is being held, in what country, what type of asset it is and how heavily each of the top holdings weighs into the fund. For example, the top holding in this fund are some Government bonds, but even the top holding only accounts for ~2% of the portfolio! Look carefull with each mutual fund: the more weight a particular asset has the more sway it will have on the fund’s return it will have.

This can make or break a fund, for me. I once seriously considered purchasing a fund for the long run, until Globefund helped me realize that a whopping 18% of its holdings were in Nortel Networks. In 2007. And yes, it had gone down.

There are some things I have left out, but I feel they are pretty self-explanatory.

Now it’s YOUR turn! What has your experience been using globefund.ca? Have you found it helpful? Is there a particular fund that you did/did not decide to buy that globefund helped you analyze? Has this tutorial been helpful? Let us know by leaving a comment below!

Part 1- My Portfolio -  Part 2- Using Globefund to Analyze Mutual Funds -

Part 3 - Understanding Fund Facts

Part 1 - Analysis of 7 Canadian Cashback Credit Cards - Part 2 - 5 Things To Keep In Mind

After reading A Million Bucks by 30 by Alan Corey, in which Mr Corey talks about his great experiences with cash back credit cards (when used wisely, of course!), I began to think about switching from my current card, which offers reward points, to a card that would offer cash back.

I came across this great post over at Million Dollar Journey that is a good starting point for finding some cash back credit cards in Canada. This was my starting point. I developped an excel model for the following cards, which you can download and manipulate as you please to fit your situation.

DOWNLOAD BTG’S CASHBACK CARD EXCEL MODEL!

I looked at the following seven cards:

• Capital One Card Lab (Create  A Card)
• Capital One Guaranteed Cashback Gas and Groceries
• Citi Enrich Mastercard
• Capital One Platinum Cashback Mastercard
• TD Canada Rebate Rewards Visa Card
• CIBC Dividend
• Amex Costco Platinum Cash Rebate Card

Here are some of the assumptions I made in order to create/use the model for my particular situation:

1. I assume purchases of $100 a month, ie: $1200 a year.
2. Groceries are between $700-$800 a month (for a family, not an individual), which is $175-$200 a week. This is equivalent to between $8400-$9600 spent on groceries per year.
3. I have not factored in gas as I do not own a vehicle. I have included a space for gas where appropriate however, so if you would like to factor that into the model, everything should work correctly.

Here was the result of my analysis, for my particular situation (your results may vary):

1) BEST BET FOR CANADIANS…if you can get a US credit card!

If you’re eligible to obtain a credit card from the United States, the Capital One Card Lab, with the following specifications gave me the most money back for my purchases:

• Limited History
• 1% Cashback On Purchases
• 2% Cashback on Gas and Groceries
• 29$ Annual fee
• 14.65%  Annual Percentage Rate

Plugging this into my excel model gave me a proft range of $151-$175. That’s after taking out the reasonable $29 annual fee! This card offers 1% on all purchases and 2% on gas and groceries at participating retailers.

Selecting the 25% bonus cashback instead of the %2 on gas and groceries caused my profit range to drop to  $91-$106.

2) BEST BET!…if you’re not living in Quebec, Nunavut, the Northwest Territories or the Yukon Territories!

A close second was the Capital One Gas and Groceries with a profit range of $101-$125, but I would then be foreced to shop at Loblaws (or other stores aside form the store I use now). The only other problem is that these cards are not avaliable everywhere in Canada. It has an annual fee of $79. It offers 1% on all purchases, and 2% gas and groceries purchased at participating retailers.

3) BEST BET FOR ALLLLLL CANADIANS! (Yay!)

The Citi Enrich Mastercard came in third with a profit range between $96-$108. This card has no annual fee. It offers cashback of 1% on EVERY purchase.

4&5) THE TIE-BREAKER!

The next two cards, the Capital One and the TD Canada Rebate Rewards Visa Card, each yield a profit range of between $81-$93. The capital one card has no annual fee. It offers 0.05% cashback on the first $3000, then  1% cashback on everything after that.

However, the Capital One Guaranteed Gas and Grocery Card is the better bet, because the TD card will only rebate a maximum of $250 per year, meaning that no matter how much you may spend, the maximum amount of cash you will receive is $250. The TD card has no annual fee. It offers 0.5% cashback on the first $3000 and 1% cashback after that. But as stated before, the maximum you can earn is $250.

6) THE SECOND TO LAST

CIBC dividend came in 6th with a profit range of $77.25 - $89.25. It has no annual fee. You earn 0.25% on the first $1500, 0.5% on the next $1500, and %1 cashback on all purchases after that.

7) THE LAST

Amex Costco came in sixth and frankly, dead last, with a profit range of $34 - $52 (that’s after I deducted the costco memebership fee, as I have done with all annual fees in reporting the profit ranges above). The AMEX card actually would have ranked much higher if they didn’t make you pay the Costco membership fee, of, I believe, $55. It hugely affects your cashback rewards, and unfortunately losing such a huge chunk of my rewards paying the annual memebership fee caused this card to wind up last. Remember though, this is for my situation, if you already have a Costco membership, or if you spend more every year, you may have a different outcome. You’ll earn 0.25% on the first $2000, 0.5% on the next $3000, and 1.5% on everything after that.

There are some very important things you must keep in mind when considering whether or not a cashback credit card is right for you. In part 2 we’ll take a look at 5 of the most important things to keep in mind about cashback credit cards.

DOWNLOAD BTG’S CASHBACK CARD EXCEL MODEL!

Part 1 - Analysis of 7 Canadian Cashback Credit Cards - Part 2 - 5 Things To Keep In Mind