I did the stupidest thing and bought $10k worth of gift cards to a mall.

[MDfive21]

i should add that i don't see MS as the first thing someone should learn about personal finance.  it's just a side show to the real work of getting financially savvy.  a 'good-to-know'.

OP should be reading the investing and personal finance forums on bogleheads.com more than anything.  the MMM forum is a good support forum for being frugal and FIRE, but the heavy lifting is done over at BH.

[Prairie Stash]

Thank you so much for your thoughtful reply. You basically read my mind and gave everyone a coherent explanation.
You're totally right that I panicked. I wrote my original post about an hour after returning home and speaking to my parents. My parents are now pretty lax as they realize that the gift cards are more flexible than they had originally thought.

I also want to point out that other than my $10k in my TFSA, I had $45k (now $35) sitting in my chequing. My loans are paid off and other than helping my parents with some bills and eating out, I don't have any other expenses.

I came to this forum to see if I could figure out a better way to invest the funds than the slow-growth TFSA but I'm still undecided.

TFSA, assuming you have lived in Canada your whole life, has room for your entire cash pile. A person should never have cash in that amount outside a TFSA when they have TFSA room. Ever. No excuses. First step, move that cash. Why do you have so much cash in a chequing account, its weird.

You can invest in Vanguard funds such as VFV, the S&P ETF, or VBAL, a balanced fund for people exactly like you. VBAL is for people who want to be hands off and can't decide what to do, its fantastic for procrastinators.
https://www.vanguardcanada.ca/individual/indv/en/product.html

If you want to be more conservative, then pick a more conservative fund.  Theres lots of Canadians on here who can work with your details and tailor advice to you.

Cash should never be left in a chequing account. At worst, it should be moved to a savings account such as Tangerine to get the bonus interest. Currently tangerind is a miniscule 1.25%, thats only $36/month in interest, but its painless to switch it in and out. I find tangerine to be a great place to park short term cash.

The TFSA promo at Tangerine is a 3% return, on cash. That's $500 in tax free growth over the next 6 months, its the easiest money a person can ever make. How much did your chequing account toss your way in all of 2017?

Lets get this going and lets see you getting free money. We can help if you let us.

[TorontoGirl]

this might be irresponsible to suggest, but maybe OP or others like her could transition from compulsive shopping to hunting MS deals??  the skillsets do overlap.  i can see downsides, but what if that drive to find a shopping bargain can be re-purposed to bring in cash returns rather than consumer goods.

Maybe you can get the pill addict to learn to deal drugs, instead, since they know all of the connections and can turn a profit by *selling* drugs instead of taking them.

Or the gambling addict to be a bookie or professional poker player, instead.

i understand your opposition, but that's a bad analogy.  MS isn't illegal or a cause of physical health problems, just financially risky if you don't do it right. 

the idea is to use a preexisting skill set in a different way. 

at any rate it's just an idea, and to be fair to the OP, she's caught up in consumer culture with some clownish spending behavior patterns, but she's not hopeless.  she has a decent savings account stash, a good job, questions about investments and the ability to organize.  the fact she is unloading GCs in creative ways instead of just saying 'F it i'll spend it all' shows she has already found outlets for the cards.  might be a hobby that scratches the itch so shop without her actually shopping.

I completely understand where you’re coming from and appreciate the reasonable response. Why I used the addict analogy is because she has admitted to her issues being so severe that she needed therapy for it in the past. She still lives with her parents and they bail her out of every poor spending decision she makes, it seems.

While “gaming the system” could certainly be a good outlet for someone who enjoys shopping, and could be profitable, OP has continually displayed a lack of self control and diversion/excuse-making even after purchasing the cards, so in her instance it would be a very dangerous game to play.

It takes calculation, logic, and not getting emotionally invested in order to be successful with manipulating money like you suggest. While it’s super fun and challenging, I don’t know that OP is sophisticated enough at this juncture to go that route. Who knows, though.

What you wrote makes you sound like you have a difficult time understanding basic writing. [MOD EDIT: Please don't be rude. /END EDIT]

No, I did not receive therapy for my shopping addiction. I actually received therapy for my depression and anxiety. My shopping addiction was a symptom of the underlying issue.

Also, you've previously stated that I'm giving away money like 'free candy' to my parents, but now my parents are the ones 'bailing me out of poor spending choices'. Which one is it? The former makes it sound like my parents are taking advantage whereas the latter makes it sound like I'm taking advantage. I don't know about you and your family situation, but for me family is family--no one is taking advantage of the other.
What part of my messages stating that I'm simply giving them spending money via GCs instead of actual money like usual, since I'm supposed to cover certain bills anyway, do you not understand?

Also, my friends and sibling took payment as GCs for money they were already going to spend. Afterall, $1 is $1 regardless if it's in green-paper form or plastic.

[TorontoGirl]

Thank you so much for your thoughtful reply. You basically read my mind and gave everyone a coherent explanation.
You're totally right that I panicked. I wrote my original post about an hour after returning home and speaking to my parents. My parents are now pretty lax as they realize that the gift cards are more flexible than they had originally thought.

I also want to point out that other than my $10k in my TFSA, I had $45k (now $35) sitting in my chequing. My loans are paid off and other than helping my parents with some bills and eating out, I don't have any other expenses.

I came to this forum to see if I could figure out a better way to invest the funds than the slow-growth TFSA but I'm still undecided.

TFSA, assuming you have lived in Canada your whole life, has room for your entire cash pile. A person should never have cash in that amount outside a TFSA when they have TFSA room. Ever. No excuses. First step, move that cash. Why do you have so much cash in a chequing account, its weird.

You can invest in Vanguard funds such as VFV, the S&P ETF, or VBAL, a balanced fund for people exactly like you. VBAL is for people who want to be hands off and can't decide what to do, its fantastic for procrastinators.
https://www.vanguardcanada.ca/individual/indv/en/product.html

If you want to be more conservative, then pick a more conservative fund.  Theres lots of Canadians on here who can work with your details and tailor advice to you.

Cash should never be left in a chequing account. At worst, it should be moved to a savings account such as Tangerine to get the bonus interest. Currently tangerind is a miniscule 1.25%, thats only $36/month in interest, but its painless to switch it in and out. I find tangerine to be a great place to park short term cash.

The TFSA promo at Tangerine is a 3% return, on cash. That's $500 in tax free growth over the next 6 months, its the easiest money a person can ever make. How much did your chequing account toss your way in all of 2017?

Lets get this going and lets see you getting free money. We can help if you let us.

Thank you, I'm going to make a Tangerine account by the end of the year. I work at a Bank and with my staff account, I can afford to have a lower-than-minimum balance as I wouldn't be charged any fees (unless the rules have changed).

I was thinking of doing some trading on the side, but I'm a novice and that's a risky practice.

I want to mention that I'm in the medium risk portfolio for my current TFSA, which I had changed from the more conservative portfolio a few years ago after being shown a chart of market increase trends for the different portfolios (med-risk beat out even the high risk).

Do you think if it'll be stupid for me to set aside some money (like $2k-$5k) to enter the stock market?

[lexde]

this might be irresponsible to suggest, but maybe OP or others like her could transition from compulsive shopping to hunting MS deals??  the skillsets do overlap.  i can see downsides, but what if that drive to find a shopping bargain can be re-purposed to bring in cash returns rather than consumer goods.

Maybe you can get the pill addict to learn to deal drugs, instead, since they know all of the connections and can turn a profit by *selling* drugs instead of taking them.

Or the gambling addict to be a bookie or professional poker player, instead.

i understand your opposition, but that's a bad analogy.  MS isn't illegal or a cause of physical health problems, just financially risky if you don't do it right. 

the idea is to use a preexisting skill set in a different way. 

at any rate it's just an idea, and to be fair to the OP, she's caught up in consumer culture with some clownish spending behavior patterns, but she's not hopeless.  she has a decent savings account stash, a good job, questions about investments and the ability to organize.  the fact she is unloading GCs in creative ways instead of just saying 'F it i'll spend it all' shows she has already found outlets for the cards.  might be a hobby that scratches the itch so shop without her actually shopping.

I completely understand where you’re coming from and appreciate the reasonable response. Why I used the addict analogy is because she has admitted to her issues being so severe that she needed therapy for it in the past. She still lives with her parents and they bail her out of every poor spending decision she makes, it seems.

While “gaming the system” could certainly be a good outlet for someone who enjoys shopping, and could be profitable, OP has continually displayed a lack of self control and diversion/excuse-making even after purchasing the cards, so in her instance it would be a very dangerous game to play.

It takes calculation, logic, and not getting emotionally invested in order to be successful with manipulating money like you suggest. While it’s super fun and challenging, I don’t know that OP is sophisticated enough at this juncture to go that route. Who knows, though.

What you wrote makes you sound like you have a difficult time understanding basic writing. No, I did not receive therapy for my shopping addiction. I actually received therapy for my depression and anxiety. My shopping addiction was a symptom of the underlying issue.

Also, you've previously stated that I'm giving away money like 'free candy' to my parents, but now my parents are the ones 'bailing me out of poor spending choices'. Which one is it? The former makes it sound like my parents are taking advantage whereas the latter makes it sound like I'm taking advantage. I don't know about you and your family situation, but for me family is family--no one is taking advantage of the other.
What part of my messages stating that I'm simply giving them spending money via GCs instead of actual money like usual, since I'm supposed to cover certain bills anyway, do you not understand?

Also, my friends and sibling took payment as GCs for money they were already going to spend. Afterall, $1 is $1 regardless if it's in green-paper form or plastic.

I’m not beating this dead horse with you any more, TG. Calm down. The person I was talking to provided a reasonable response. You can do the same.

[TorontoGirl]

this might be irresponsible to suggest, but maybe OP or others like her could transition from compulsive shopping to hunting MS deals??  the skillsets do overlap.  i can see downsides, but what if that drive to find a shopping bargain can be re-purposed to bring in cash returns rather than consumer goods.

Maybe you can get the pill addict to learn to deal drugs, instead, since they know all of the connections and can turn a profit by *selling* drugs instead of taking them.

Or the gambling addict to be a bookie or professional poker player, instead.

i understand your opposition, but that's a bad analogy.  MS isn't illegal or a cause of physical health problems, just financially risky if you don't do it right. 

the idea is to use a preexisting skill set in a different way. 

at any rate it's just an idea, and to be fair to the OP, she's caught up in consumer culture with some clownish spending behavior patterns, but she's not hopeless.  she has a decent savings account stash, a good job, questions about investments and the ability to organize.  the fact she is unloading GCs in creative ways instead of just saying 'F it i'll spend it all' shows she has already found outlets for the cards.  might be a hobby that scratches the itch so shop without her actually shopping.

I completely understand where you’re coming from and appreciate the reasonable response. Why I used the addict analogy is because she has admitted to her issues being so severe that she needed therapy for it in the past. She still lives with her parents and they bail her out of every poor spending decision she makes, it seems.

While “gaming the system” could certainly be a good outlet for someone who enjoys shopping, and could be profitable, OP has continually displayed a lack of self control and diversion/excuse-making even after purchasing the cards, so in her instance it would be a very dangerous game to play.

It takes calculation, logic, and not getting emotionally invested in order to be successful with manipulating money like you suggest. While it’s super fun and challenging, I don’t know that OP is sophisticated enough at this juncture to go that route. Who knows, though.

What you wrote makes you sound like you have a difficult time understanding basic writing. No, I did not receive therapy for my shopping addiction. I actually received therapy for my depression and anxiety. My shopping addiction was a symptom of the underlying issue.

Also, you've previously stated that I'm giving away money like 'free candy' to my parents, but now my parents are the ones 'bailing me out of poor spending choices'. Which one is it? The former makes it sound like my parents are taking advantage whereas the latter makes it sound like I'm taking advantage. I don't know about you and your family situation, but for me family is family--no one is taking advantage of the other.
What part of my messages stating that I'm simply giving them spending money via GCs instead of actual money like usual, since I'm supposed to cover certain bills anyway, do you not understand?

Also, my friends and sibling took payment as GCs for money they were already going to spend. Afterall, $1 is $1 regardless if it's in green-paper form or plastic.

I’m not beating this dead horse with you any more, TG. Calm down. The person I was talking to provided a reasonable response. You can do the same.

You're not beating the dead horse. You're simply twisting what I post.

[Prairie Stash]

Thank you, I'm going to make a Tangerine account by the end of the year. I work at a Bank and with my staff account, I can afford to have a lower-than-minimum balance as I wouldn't be charged any fees (unless the rules have changed).

I was thinking of doing some trading on the side, but I'm a novice and that's a risky practice.

I want to mention that I'm in the medium risk portfolio for my current TFSA, which I had changed from the more conservative portfolio a few years ago after being shown a chart of market increase trends for the different portfolios (med-risk beat out even the high risk).

Do you think if it'll be stupid for me to set aside some money (like $2k-$5k) to enter the stock market?
[/quote]
Its all the little steps that add up over time. I applaud the tangerine account, find a friend (or family member) and swap referral codes, the bonus is a sweet little present to yourselves.

I think its risky to set aside $2-5K for purchasing stocks, perhaps not the best use of money. There are 3 outcomes, you get lucky and do well, you match (reasonably closely) what your conservative portfolio returns are or you under perform (above, match, below - its that simple).

In the first scenario you'll end up confident you know what you're doing and pile more money in. Eventually you'll have a small fortune and think you're amazing. Then reality kicks in and you end up matching the performance of everyone else who stock picks. Which is the average return of the market. Or you lose a lot because you kept piling money in...no one ever brags about the time they lost a lot.

In the latter two cases you realize its easier just to pile more money into your TFSA portfolio and spend your extra time doing something more useful then stock picking; which is pretty much anything. You only lose a little, life goes on.

I did the stupid way and came out even. I don't regret it, I learned a lot, but it was a time waste. If you want to try it then put a hard cap on it (promise yourself not another dollar will go in ever) and consider it tuition money paid to Wall Street. Just like regular school, the school of hardknocks charges tuition. Make sure you focus on the emotional toil of investing, its easy to buy stocks, selling at a loss is a gut punch. Can you handle the gut punch of a losing stock pick? I couldn't, it sucked.

If you really insist on it, do a model portfolio for one year, then come back to tell me how great you did and blame me for advising against it ;) Google "practice investing with CDN banks" and I bet your bank pops up.

A much better plan is to skip the stock market and spend the extra time learning a new work skill. Increase your earnings and you'll out perform the stock market. Its simple and effective, it uses your strengths to succeed.

What kind of random skills and hobbies do you want to try? May I suggest, as a bank employee, you volunteer  next tax season at the food bank doing low income tax returns? Sometimes hobbies can be that  random, the point is that there's something out there for everyone.

[NoraLenderbee]

If you describe your own action as "stupidest" and "boneheaded" (direct quotes from the OP's first post), don't get mad when people agree with you.

[TorontoGirl]

If you describe your own action as "stupidest" and "boneheaded" (direct quotes from the OP's first post), don't get mad when people agree with you.

Where did I get angry at people agreeing?

I'm point out certain posters who either take things out of context or blatantly embellish or make things up to support their views.

If you're going to point out my original post to support yourself, why don't you address the entire posts---or better yet, my following replies, instead of cherry-picking one line?

[Boofinator]

If you describe your own action as "stupidest" and "boneheaded" (direct quotes from the OP's first post), don't get mad when people agree with you.

Where did I get angry at people agreeing?

I'm point out certain posters who either take things out of context or blatantly embellish or make things up to support their views.

If you're going to point out my original post to support yourself, why don't you address the entire posts---or better yet, my following replies, instead of cherry-picking one line?

I probably should just stay the hell out of this, but I agree with TG. When someone comes to the forum and says "I did something facepunch-worthy", there really is no reason to pile on with facepunches. I agree with some of the posters that TG needs to focus on the basics of frugality at this stage (which does not involve gift cards), but in no way does her behavior (as she describes it) signify an addiction, but rather a bad habit that she knows needs to be broken if she wants financial freedom.

[TorontoGirl]

Here's the update:

Originally:
-$10,000 for $11,000 worth of gift cards. 10% ROI.


Now:
-Spent: $315 on a Roots Canada Mont Royale bag in color Quartz (I guess it's a popular color and this is the only color that's currently completely sold out on the website).
I had wanted a Roots purse for over a year, and the max sale they have is 20% off on select items in certain stores. The quality of leather is excellent, contains no gaudy logos, has a 1 year manufacturer guarantee, and is made in Canada (i.e. no sweatshops, which is important for me). Additionally, I still have the tags on and have until Jan 6th to mull it over in case I don't want to keep it.
-Spent: $35 on food (me/mom/dad once and mom/dad again)
-Spent: $534 on Vanilla Visa GCs ($250 each, in addition to $7.5 activation fee and approx $1 tax). These GCs have no other maintenance fee, no purchase fee, have a surcharge of 2.29% on foreign currency (we don't need foreign currency) and expires in 2023.
-Spent: $1000 on Home Depot cards for dad. Initially spent $500, but parents ended up buying an additional $500.
-Spent: $1000 on Home Depot GCs (again) as dad has a friend who needs it and who agreed to take it off our hands.
-Spent: $120 on phone bill at Rogers as there's a Rogers store in the mall that accept the gift card.

I also called the mall and spoke to a lady indicating my mental health and my fear that I'll slide back into impulsive spending. She said that she's supposed to say 'No' but to call back and speak to her manager. Additionally, the upper limit of mall GC purchase is supposed to be lower than $10k, so she said that since it was over the limit, I'd most likely get a concession. However, when my parents heard about this, they said that I don't have to worry about it as the GCs are actually more flexible than they'd had thought. My sibling is finishing his JD/MBA and has moved out, and according to them I could barter the GCs or the converted visas.

Also, my aunt and her whole family is going back home (overseas) this December to attend a wedding (other side of family, not mine) and are doing some major shopping. My cousin has agreed to take $1000 worth of GCs off my hands. And, two of my friends have agreed to take $500 worth for the upcoming XMas shopping.

Final tally:
$11000
-$315 (bag)
-$35 (food)
-$120(phone bill)
-$2000 (Home Depot GCs)
-$1500(bartering with cousin and friends)
-$534 (Visa GCs)
--------------------
$6169 left


If I had converted all my money to Visa GCs, I'd have a ROI of 6.6%. Almost the 7% ROI if I had invested, except I wouldn't have to wait a year.

Any money that's spent by my parents, I wouldn't get back. I stay in their house and support them with bills so I'm not doing anything different here.

Anything I give to my brother/friend/cousin or other misc expenses such as the HD cards my dad is getting his contractor friend, the money will be reimbursed to me.

I'm also keeping $400 worth of GC so that I can expense my food over the next four months. I spend way too much on food and this will help me budget.

I also contacted Visa, and the visa gift cards can be treated as visa CCs and can be spent anywhere visa is accepted. Thus, my mom/dad will be converting it slowly and using it for more bills/gas/groceries/insurance (which is my responsibility in the first place since I supplement their bills as I live with them rent-free).

Overall, this deal didn't turn out that badly.

Update:
Converted $1809.36 into VGCs for sibling to buy graduate school books. Another $258.48 VGC for friend who does uber eats on the side, who offered to buy to fill up gas. Total amount reimbursed was $2000 since VGC has $7.50 activation fee and $0.98 tax per $250 gift card amount. Unlike what some 'concerned' members here think, the type of VGC I purchased doesn't have any other maintenance fees.

Approximately another $4101 remaining. I should be down another $1100 as I'm able to convert a total of that into Best Buy GC, which I can purchase inside an applicable mall's Shopper's Drug Mart, for a friend who offered to take it to buy a laptop.



Overall, I don't regret buying the gift cards too much. Though I wish I had come to know of this forum, bogleheads and the whole Financial Independence movement years earlier.

Let's say that I didn't have a strong support group, then I would have most likely tried to sell them off and break even over the net and chalked it up as a learning experience.


I'm still thinking of how to invest my money. For the New Year, I'm doing a couple of life-style changes and curb my shopping habits even further.

I don't think I'll ever be a true Mustachian, nor would I want to. Before some people in this thread get bent out of shape (you know who you are), I just want to clarify that it's not a bad movement but it's not the answer to everything.

I was originally drawn to it as it presented a drastic departure to the consumerist mindset, especially in dizzying fast-paced cities like where I live. Where I want to go in life is towards a direction of having 'just enough'. Not too much, not too little. Obviously, YMMV.

My purchases so far since I last updated this thread include: A few breakfast sandwiches at McDonald's (I buy them when I get a deal on my App), few coffee/muffins at Tim Horton's, a face-wash (I paid $7, it was originally $19--using a portion of my Birthday coupon) and a $3 nailpolish remover. I want to put more effort into my appearance especially for work.

My focus this year is to de-clutter my surroundings especially makeup products. I'm taking part in 'Project Pan' and out of the 15 lipsticks I've collected over time, I'm trying to use up two of them for start. Substitute things instead of adding (i.e. get rid of desk on Craigslist before purchasing another one) and purchase quality items that'll make me happy.

Overall, Happy New Year everyone.

[pdxmonkey]

and purchase quality items that'll make me happy.

This is the key. I spend on what many here consider "non-Mustachian" things that are quality and make me happy. People seem to think MMM doesn't do this also, but he does. For example he has a projector to watch movies on, so do I. It's a completely unnecessary extravagant purchase. He's minimalist and environmentalist, but when it comes down to stuff that makes him happy he DOES spend money on things that people tend to forget about when giving out face punches.

I don't know the origin, but "I can buy anything I want. I just can't buy everything I want". Prioritize the wants that will add the most happiness.

[EnjoyIt]

and purchase quality items that'll make me happy.

I don't know the origin, but "I can buy anything I want. I just can't buy everything I want". Prioritize the wants that will add the most happiness.

I have attributed that comment to The White Coat Investor on multiple occasions and always thought it was his. He has multiple variations of the same theme.

[MDfive21]

well done TG.