Why Do We Think We Can Own More Stuff than Our Parents?

When I sorted out today’s mail, I found a flyer for what looked like living room furniture. It looked pretty and comfortable with thick padded cushions. It was pricey: a club chair for $699, a loveseat for $1499. A closer glance surprised me: it was furniture for outdoors, not indoors. And it made me think back to the stuff my parents could afford to own.

Flashback to the Past

When I was growing up we also liked to eat picnics and bbq’d meals outdoors. We sat at a triangular-ish redwood stained cedar picnic table. My Dad had made it himself. It was more comfortable than our friends’ tables because the benches were detached and you could move them in or out. No one had to sit where the table struts were either. Luxury!
We also had an assortment of aluminum deck chairs that you could fold up. They had nylon webbing to form the seat and back. Things fell easily through the gaps in the webbing and it could stick on humid days. Not great, but we still used them.

For lounging, we had cotton canvas recliners. They also had an aluminum frame and the canvas was attached with little ties along the sides. They, too, could be folded and put away or put into the station wagon to go to the beach or a party.

I doubt that if you added up the cost of all of this outdoor “furniture” you would have paid $699 even allowing for all the inflation during the interim.

What I remember most about those times spent outdoors was the fun: playing lawn darts and badminton; chasing fireflies; playing hide–n–go-seek in the dark with flashlights; eating slightly singed smoky marshmallows; laughing till our faces hurt.

But of course that was then, this is now!
I can hear what someone must be thinking (or else none of this furniture would be selling.) Someone must be thinking: But now things are different. We can afford/want/need nicer things. That old stuff was ugly, uncomfortable and tacky.

The trick is: can we afford it?

My parents were both professionals. Their combined income was quite reasonable. They weren’t as well to do as the doctors and lawyers but we were comfortable. Now, in retirement, they are mildly affluent. They certainly were not blue collar or working class or just getting by or whatever label you use to describe the majority of the work force.

I keep reading snippets in the news that tell me that, adjusted for inflation, average families are now earning less than they were ten years ago.

So why do some people who are earning less think they can afford more than their parents?

That’s not even including all of the disposable technology costs that burden this newer generation. My parents’ generation didn’t have monthly cell phone bills, internet bills, or the costs to upgrade cell phones, computers, laptops, tablets, and gaming consoles every 3-5 years.

So if the pundits are correct, and the average income is down and the average costs (for new technology) are up, where is the money supposed to come from to pay for all this luxury outdoor furniture?

I wish I could say it’s all being sold to the doctors, lawyers and CEOs. But I have a bad feeling there are a lot of teachers, mechanics, shift workers, retail support workers and other “real” people who are trying to afford this stuff.

I hope against hope that the word “credit” is not crossing any of their minds and that the phrase “saving for the future” is. I don’t think I’d want to be facing retirement on an average CPP and OAS pension and nothing else. Not even for the most comfortable backyard bbq furniture in the world. Especially since it’s not the furniture I remember from our gatherings, it’s the people and what we did.

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Do you think we’re being offered too many ways to spend our money on things that won’t last and that we don’t really need to enjoy life? Or do you think we can have it all, maybe by just skipping our lattes on Tuesdays? Please share your views with a comment.

How Fast Can I Sell my BMO InvestorLine AAT770 HISA to Generate Cash to Re-invest?

I recently bought some of the BMO AAT770 CAD High Interest Savings Account fund within my BMO InvestorLine RRSP. I wanted to test how to make the purchase, and to double check for any quirks or fees (although there shouldn’t be any.) Next, I want to test how quickly the cash comes back into my account if I sell my AAT770 so I can re-invest the money in a stock, ETF, mutual fund or GIC. I’ll give you the good news first, then provide the step-by-step instructions for making the sale.

How Long Did It Take for the Cash to Appear in my BMO InvestorLine RRSP Account After I Sold the HISA Fund Units?

Well so far I don’t know! I’m watching my transaction history to find out. Ok, I’m back. Here’s what happened:

  • On April 11, I bought $5000 worth of AAT770.
  • On April 12, the sale settled.
  • On April 16, I placed an order to sell all $5000 worth of AAT770.
  • On April 17, in the Trading tab, Order Status selection, the order to sell is reported as Filled and sold, but in the My Holdings tab, the cash balance has not increased and the holding of 5000 units of AAT770 is still listed.
  • Now, on April 18, at 8 a.m. all $5000 is back in the cash account in my RRSP. In the My Holdings tab, the cash balance has increased by $5000.87 and the listing for AAT770 has disappeared.
  • The deposit of the $5000 investment was back-dated to April 16. You can see the date they claim it was deposited in the Transaction History, but it is back dated.
  • The deposit of the interest of 0.87 was back-dated to April 17. Again you can see this in the My Holdings tab, under Transaction History.

As I said, the money was actually in the account ready to spend on the morning of April 18. So it took the day I placed the trade plus two days for the cash to appear in my account. It appears, though, that the trade settled in the trade day plus one day. So in theory, you could place an order to buy a GIC or mutual fund one day after the day you placed an order to sell your HISA and it would be fine. Given that stocks take even longer to reach the settlement date, you should be able to place an order to purchase a stock on the same day that you issue the order to sell your HISA. I’m a bit leery of all the warnings InvestorLine placed around a possible delay in settling the sale of the HISA fund. I would probably wait for the cash to appear before purchasing anything, just in case. NOTE: all of the days were business days when InvestorLine was up and open for trades. I’m sure it would have been slower if there was a weekend in the middle.

Did I Read / Write that Correctly? InvestorLine Paid Interest on a 7-Day HISA Deposit?!

Yes, much to my pleasant surprise, I actually received $0.87 interest for the time my $5000 was deposited in the AAT770 HISA fund. I did not expect this, as the terms state that interest is calculated daily and paid monthly and it was not month end. Good on InvestorLine and BMO!

How to Sell Units of AAT770 in a BMO InvestorLine Account

  1. First sign in to BMO Investorline.
  2. From the drop-down list, select the account which is holding your AAT770 units. For example, I selected my RRSP account.
  3. Under the My Portfolio tab, review your holdings of the HISA fund.

If you are ready to sell

  1. Click on the AAT770 symbol.
  2. Or from the Trading menu select Mutual Funds.
  3. Either way opens the Mutual Fund Order Entry screen. Remember the cutoff time for selling a mutual fund today is 2 p.m. ET. If you enter the order after that time, it will take another entire business day to be executed. I’m choosing to place my sell order at 10:20 A.M. ET.
  4. From the Action drop-down list select Sell.
  5. In the Fund Symbol field, type AAT770 if you are selling units of the Canadian dollar high interest savings account.
  6. Click on the Recent Closing Price button to
    • Confirm you entered the symbol for the units you want to sell
    • Confirm it still says No Load
  7. In the Amount field, select either All or type in the amount of dollars or units you want to redeem. If applicable, select Dollars or Units from the drop-down list. I selected All. (Well, actually I first tested it by trying to sell $1000 worth, to see if it would let me go below the $5000 minimum holding. The program responded: “Your order was not processed. The following problem is associated with your order: Warning: This transaction will reduce your fund holdings below the required minimum amount. Please adjust or Sell/Switch all.” Rats!)
    UPDATE: As of 2017 10 03 you can hold a minimum balance of $1 000.
  8. In the Contact Phone # field, type your telephone number.
  9. Click on the Review Order button.

Very interesting! I have not actually entered my trading password yet, so the message is not completely accurate. The program responded:

Your order was not processed. The following problem is associated with your order: You may continue with your order or may choose to change/cancel the order. Warning: This order requires manual processing and may be delayed.

I decided to accept the warning and continue. I clicked on the Accept All Warnings button. [UPDATE: In more recent sales of this fund I no longer receive this warning message.]

The Mutual Fund Order Review screen opens. It repeats at the top of the screen:

If submitted, you are accepting the following warnings: Warning: This order requires manual processing and may be delayed. [UPDATE: In more recent sales of this fund I no longer receive this warning message.]

  1. Review the order details.
  2. If they are acceptable: Type your trading password in the “Please enter your password in order to submit your order” field.
  3. Click on the Submit Order button.
  4. Copy the Mutual Fund Order Confirmation into a document and save it for reference. The Order Reference number will be needed if you have to follow-up with InvestorLine. Again, it states that I have accepted the warning that the order requires manual processing and may be delayed. [UPDATE: In more recent sales of this fund I no longer receive this warning message.]

If desired, under the Trading tab, select Order Status. You should see the details of your sell request order for the HISA fund. The current status is Submitted. Related Reading

Join In Do you use a HISA fund to park your cash while waiting for another investment opportunity? Have you found any quirks? Please share your experiences with a comment.