Give Me Back My Five Bucks

Vancouver Historic Half Marathon Recap

Two loops of Stanley ParkI ran my second half marathon over the weekend – the Vancouver Historic Half in Stanley Park. I’ve mentioned it a few times before, but I have severely undertrained for this event. In the 5 weeks since my last half marathon, I’ve run a total of three times (13km, 19km, 10km). I was nervous, and hoping for anything under two hours.

Last month, my pace varied wildly from 5’04” to 5’54″/km. It was my first half marathon race ever, and I had no idea what to expect. Since I didn’t think I’d be able to beat my previous time of 1:54:31, this time I decided to try to improve on maintaining a more consistent speed throughout the race, and working on the areas where I had the most problems (getting out of the corral fast enough, and when I died at the 17-18km mark).

Well during Sunday’s race, I was so worried about starting fast enough that I went out way too quickly (my first km was 5’05”). But after that I was able to maintain a steady pace, and only varied by 23 seconds (my slowest km was 5’28”). Much better than the 50 seconds from last month! I paced with another woman for the majority of the race. She was consistently running at the same speed I wanted to be at (just fast enough so that I was slightly uncomfortable), so I made sure not to be more than 5 meters away from her at all times. She probably knew I was pacing her the entire time, but there were a few times where I took the lead, so maybe we helped each other out. It also really helped during the last 4 kms. I was really struggling (clearly due to my lack of training)… and I think it’s safe to say that without her, I wouldn’t have finished with a time of 1:53:51 – which is 39 seconds FASTER than last month’s race! :)

If you’ve never been to Vancouver, the run took place in Stanley Park, which is a huge park located right downtown. The course was run around the seawall, meaning I had beautiful ocean views 90% of the time. :) The weather was perfect, even if it was a little chilly. I really enjoyed myself, and am looking forward to next year’s race! My only complaint is due to my own scheduling issues – I had a field hockey game to play just a few hours after the race. That was… a bit rough.

So, while I’m pleased overall, I know that I can do so much more. Talking with a friend (whose also a running coach) the day afterwards, he said that with the proper training, I could definitely run a sub 1:50 at my next big race (BMO Half Marathon, May 2014), and maybe even close in on 1:45, depending on how committed I am. That gives me hope, and I think that’s what I love about running… there’s always room for improvement, and your only real competition is yourself.

Spending Recap: November 18-24, 2013

Monday 18th
No Spend Day!

Tuesday 19th
$12.56 lunch

Wednesday 20th
No Spend Day!

Thursday 21st
$5.30 parking

Friday 22nd
+ $205.60 freelance income
$15.70 lunch
$11.77 groceries
$41.47 gas

Saturday 23rd
No Spend Day!

Sunday 24th
$5.30 parking
$20 brunch
$4 parking

Freelance Income: + $205.60
Expenses– $116.10

TOTAL: + $89.50

This was a good week for keeping my costs down. While I did go out to eat three times this week, I planned the rest of my meals fairly well (and even cooked 3 times for friends).

Saturday was my company Christmas party, and that was a pretty good time. I kept the evening free by not buying any drinks… because on Sunday morning I ran in my second half marathon race. :) I’ll do a full recap post of the race later this week. Sunday was also the day of paying for parking, apparently. The $5.30 was for parking in Stanley Park for the run, and then I had to pay an additional $4 to park at UBC for my field hockey game later that afternoon. :|

How was your week of spending?

Prize Linked Savings: combining gambling and saving

Did you know that one-third of Canadians admit winning the lottery or receiving a large inheritance is part of their financial plan? Think about that for a second. Then think about how many people you know who’ve actually won the lottery or received a large inheritance. Yeah, exactly.

Now that we’ve established that very few people will actually win the lottery or receive a large inheritance (certainly not one-third of Canadians), you’ll also likely agree with me that these 3 statements are true:

  1. We don’t save enough money.
  2. Many people are looking to make money, but don’t necessarily want to put in the effort.
  3. Canadians love to gamble (a recent study showed that low-income families spend 9% of their annual income on lotto tickets)

So what if there was a way to potentially win a huge jackpot, without having to risk losing any money at all?

Enter this thing called Prize Linked Savings (PLS). Maybe you’ve heard about it before. There was a Freakonomics podcast on it back in 2010, but I hadn’t heard about it until just recently. Basically, it’s a kind of savings account that pools the money from all depositors, and pays out a big “lottery prize” every so often based on a portion of the interest generated from that pool of money. This combines the excitement of playing the lottery, with the safety net of having your money in a legitimate savings account. The best part is, you would never be able to lose the money you originally deposited – you’d just lose out on some of the interest (and subsequent compound interest) for the duration your money is “invested.”

This isn’t a new concept; it was once run so successfully by a bank in South Africa that the government decided to sue the bank after its own lottery revenue started dropping (and this was after iniitally approving the program). In Michigan, their Save To Win program (offered by credit unions) is going strong, and awards monthly cash prizes as well as an annual prize of $100,000.

Here are some thoughts I had about Prize Linked Savings, and what it would mean in Canada:

Wouldn’t you earn more investing your money instead?

That was my initial thought when I first started doing research into Prize Linked Savings. You aren’t guaranteed a win – you might never win. So wouldn’t it make more sense to invest your money in indexed funds or even a regular savings account, and watch your money grow that way? Plus I wonder, even if you did end up winning the lottery at some point, if you would actually come out ahead over X amount of years if you carefully invested your money (and earned compound interest) instead of leaving it up to chance.

Isn’t this perpetuating gambling addictions?

I asked this to a friend, who was also interested in learning more about Prize Linked Savings. Isn’t it morally wrong of banks (or any organization) to endorse gambling as a means to make money? As stated above, low-income families spend 9% of their annual income on lotto tickets. Perhaps it would be more advantageous to teach them better money management techniques by saving and investing their money, instead of feeding into a potential addiction.

But, my friend made a good point: he said that people are going to gamble regardless of how much effort we put into informing and teaching the public about good money management. They always have, and they’ll likely never stop. So maybe we need to take that part of people’s lives seriously and find a different and unique way to help them save, instead of trying to force them to do something they don’t think they have the capacity to do. For many people, they think that the lottery is their only chance at becoming “rich” … but at least with a PLS, they’re actually saving the money they’re “gambling” away, instead of losing it all in a slot machine or playing blackjack. That’s fair.

Would it work in Canada?

I don’t know. PLS kind of has an identity crisis. Is it a banking product, or is it a lottery? Still, I can see there definitely being a market for something like this. As a nation, we aren’t saving enough money. In 2012, our savings rate was 3.3% (down from 3.8% in 2011). And the projected number for 2013? Even lower, at 3%. :| Giving people the opportunity to potentially win a life changing amount of money, while still putting cash away for the future? That’s a really big incentive. Plus, if you consider how ridiculous our savings rates are these days, perhaps your money is safer in this PLS lottery system, than investing it in mutual funds or any other financial product that has an element of risk to it.

The Save to Win program in Michigan has seem tremendous growth. In 2009, the program had 8 credit unions participating, with 11,700 accounts for a total saved of $8.6 million (average account balance was $734). By 2010? They had 36 participating credit unions, 16,200 accounts, and a total saved of $27.9 million (average account balance was $1,268). That’s a huge jump. But it does make me wonder how much of that money being put into Save To Win accounts, has been potential revenue lost for the state-run lotteries.

So for that reason, I don’t see the Canadian government allowing something like this to happen if it means taking a bite out of their lottery profits. I do think it would be good for Canada to have a product like this. There’s a market for it, and it’s an interesting and unique way for non-savers to save.

Would you participate in a prize linked savings lottery?

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