3 Financial Tips Worthy Of Father’s Day

According to the Angus Reid Forum, Canadians expect to spend $136 while celebrating Father’s Day this year. While the price tag of June’s holiday is nowhere near what we typically spend on mom (we up our budgets by $50 on Mother’s Day), June 18 can still end up being too expensive. Many of us can’t afford to spend over $100 on dad, even if he deserves much more for putting up with our antics as kids.

If you can’t pull out all of the stops for dad this Father’s Day, don’t let the guilt sink in yet. Your dad’s an understanding guy, and he would rather you spend your money wisely than waste it on a novelty tie, #1 dad mug, or equally cheesy (aka terrible) gift popular around Father’s Day. That’s why in honour of the big day, we’re sharing our 3 favourite money saving tricks our frugal fathers have taught us.

  1. Budget: A financial plan is the only way you’ll know how much of your cash is leftover once you pay for all of the necessities. Taking the time to table a budget in detail can help you prepare for the future, as you’ll see your spending habits (good or bad) in no-nonsense black and white. Once you can account for every loonie in and out of hands, you’ll be able to identify where you’re overspending.

Take a look over your bank statements starting from 6 months ago, so you can get a good understanding of your variable costs in addition to recurring purchases like rent, insurance, and utilities. Cut out any unhealthy spending habits or impulse buys that waste your money with little to no payoff.

  1. Invest: Once you cut the fat off of your budget, you’ll start to see your account balance go up. While it’s tempting to spend all of this extra cash on an all-inclusive trip this summer or finally trading in your beat up Android for a brand new Pixel XL, these purchases aren’t exactly dad approved. Financial experts suggest roughly 10–20% of your income should go into savings, so you can prepare for your future. Look into your options, including GICs, Tax-Free Savings Accounts, RRSPs, and Mutual Funds, to see how you can start building a nest egg for a rainy day, retirement, or an unlucky emergency.
  2. Borrow: No one goes through life anymore without a little bit of debt — and that includes your dad. Until your careful budgeting builds up savings, you’ll need a little help to cover everything from mortgage payments and car leases to unexpected bills and household repairs.

While conventional lenders can provide secured loans for life’s larger purchases, payday lenders can help you cover small bills and repairs. In Canada payday loans come from companies like GoDay that offer up to $500 for first time borrowers. Though they’re small, they provide just the right amount of cash to help pay for surprise, non-recurring expenses that threaten to bust your budget.

All dad asks is you make your choice of payday loan responsibly, and these financial products can be a practical solution to your cash shortages. Along with budgeting and investing, borrowing the right way can be a financially wise tactic regardless of your goals. But these aren’t the only financial tricks and tips up his sleeve. Just like his seemingly never-ending supply of puns, financial advice is something he’s willing to share this Father’s Day.

How the Gambling and Gaming World are Becoming More Social in 2017

Gambling and gaming are big industries with some of the most significant year-on-year growth of any sector. Combine this with the advent of social media to the point of dominance over all of our lives, it is clear to see why social gaming has gathered such a cult following in a relavtively short period of time.

Candy Crush emerged from Facebook, as did the much maligned but highly-played Farmville. These games are all about playing through social media integration and sharing with your friends. So, while you can say the start of “social gaming” emerged from ways to share fun applications with your friends list on social media, this was just the start of things. As technology advances and the social experience becomes more augmented, players want more than just mere fun games to share with their followers and friends’ lists.

Value Added Games

Online gaming met social with the advent of Slotomania and even the ubiquitous household name that is World Series of Poker. These are games that took the social integration aspects to the next level and really became sophisticated “adult” and skill-based (especially with the poker tournaments). But one crucial element was missing…and that was real jackpots that were comprised of real money…

Real Cash Prizes Make Winning Seem Worth It

The fact of the matter is that we all love to win, no matter what we are winning. Whether it is levels of Candy Crush or items for the farm, this all gives us a sense of achievement. But the best type of winning, is winning real cash prizes. Although social games on platforms like Facebook reward winners with cute animated GIFs, nothing feels more like winning than good old fashioned money. A game like Betomania is different because it brings together the world of social gaming with the world of real money prizes.

Chat to Get to Know Your Opponent

The real cash prizes offered by Betomania results in a very much more sophisticated game that relies on knowing your competitor as much as knowing the game itself. This is because the game encourages you to chat and interact with thousands of players around the world through the game’s chat function. This way, you can get to know the tactics and playing techniques of your opponents and enhance your playbook, while also making buddies!

Social Media Will Have a Huge Impact on Both Industries

Similarly, the social aspect of online gaming and gambling sites will have a tremendous impact on both industries, both of which are huge on a global level. The reason why Betomania is so pertinent is that it is one totally exhilarating new gaming platform that is the best of both worlds – the juxtaposition of gaming and gambling with a bit of real-time trading thrown into the mix.

Of course, trading is seen by many as a gamble because you are wagering whether or not the stock or other commodity you are investing in will move as you predict, but that crosses over into the world of finance. What a great way to learn how to invest quickly and wisely! Imagine playing a social game in which players bet on the live asset movements and the winner takes the jackpot!

Finally – Both Industries Are Going Mobile

Also, a site like Betomania offers mobile apps so that like real traders in the real world and in real time users can keep up with markets. Covering both iOS and Android devices, an app can keep the game going in a virtual mobile environment. Remember, the markets don’t stop simply because you are on a train for work or are on your way to Singapore for a meeting with a foreign investor. The horses won’t wait at the gate at the upcoming Grand National because you can’t get to your bookmaker on time. Mobile apps are not only enabling more gamers and gamblers to make that wager 24/7 but they are making it convenient for them to do so.

In 2017, look for technology to be a game changer for both the gambling and gaming industries – and at the heart of that – mobile technology is going to be a key player.

What’s going on with my appraisals

Changes in mortgage rules for home buyers and insurers certainly have had an impact on the housing market, and those changes have impacted property appraisals as well. Conventional mortgages – up to 80% of the value of the property – historically, were required to have a full appraisal. Now, in many areas of the country, an appraisal may also be required on insured mortgages — 80 to 95% loan-to value.

The decision to approve a conventional mortgage, after all other lending criteria have been satisfied, is made on a property’s fair market value. This is defined as the market value of an interest in land at the highest price reasonably expected, when sold by a willing seller to a willing buyer, after an adequate amount of time and exposure to the market.

So who determines the value of that property? One could argue that the market itself determines the value, which is true, but from a lender’s perspective that number must come from an independent third-party – the appraiser. An appraiser, who is specifically trained and has sufficient experience, will be asked to offer an impartial, written opinion of the property’s value.

Realtors normally use a comparative market analysis (CMA) to evaluate a property’s value based on local market data. Agents analyze listing and sales data for comparable properties in the area to recommend a price to list or to offer. However a CMA is not an appraisal. Although appraisers use the CMA approach, they use it in combination with other factors to determine the value of a property.

The major difference is that appraisals are done for a specific client — the lender. Because real estate is the major security for mortgages, the market value estimate needs to be as accurate as possible. Appraisers use ‘sold’ properties information only and compare similar property types, in close proximity, that have sold within a relatively short period of time – usually 90 days.

Not all residential properties are subject to a traditional appraisal. If the property is in an established area with similar properties then sometimes the price can be validated electronically. This model of appraising property, called automated valuation model (AVM), has become quite popular in the last 10 years.

However, given the nature of the housing market these days, mortgage lenders have moved away, in many areas, from AVMs for conventional mortgages, and for some high-ratio mortgages as well, and are asking for live, full on-site appraisals.

At the end of the day, an appraisal must reflect a property’s realistic true market value and needs to be backed up with accurate data.

So why does an appraisal come in lower than expected?

With the introduction of bidding wars, where, in some areas, prices may be artificially inflated, appraisers are still tasked with coming up with a property’s fair market value. Rapidly changing markets can be very challenging for an appraiser to properly evaluate a home’s worth.

Appraisers will try to get to the purchase price when evaluating a property. However, sometimes the sale is a few weeks ahead of the market. If prices are increasing, it may not show up in their analysis yet and the appraisal will reflect a lower value.

At the end of the day, the appraisal has to be a realistic evaluation of a property’s true market value and be backed up with data.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com

21 Questions with Value Investor Steve Nyvik

‘Risk management, when done poorly or not at all, can cost you a fortune’ – Steve Nyvik

My interview with P.J. Pahygiannis of GuruFocus.com

1. What is the best investment advice you have ever been given?

Risk management, when done poorly or not at all, can cost you a fortune. In other words, “Don’t put all your eggs in one basket.”  You should diversify away, to the extent reasonable, non-systematic risk (this being company-specific or industry risk).

So for common stocks, we limit the amount of company risk and the amount of industry risk through buying enough stocks which we diversify well by industry (that are not highly correlated to each other).

For example, if we invest the same dollar amount into each of 40 stocks, our risk is that if one company disappears, we’ve lost 2.5% of the value of our stocks. We want them diversified by industry as stocks within the same industry tend to move up and down to a similar degree (i.e., in other words, stocks in the same industry tend to be correlated to each other). This will help us to build a stock portfolio that becomes more stable.

2. What level of math is needed in order to understand the entirety of finance and investing?

If I can define the question in terms of “what knowledge one needs to be successful with investing,” the answer depends on the type of investing one is considering.

For example, if one is going to stick with large-cap market exchange traded funds, like the iShares S&P 500 ETF (IVV), one really doesn’t need a high level of math. An alternative to making a big lump sum purchase is when you establish an equity target between cash and the stock ETF, and you stick to that target over time.

If the stock market goes down, by sticking to the target, you are guided to top up equities to your target. Similarly, if the stock market goes up, you are guided to trim equities to bring your portfolio back down to your target. So in summary, by sticking to your target, you are buying stocks when they go down and selling when they go up. This technique helps you to make rational buying and selling decisions with the potential result of better risk-adjusted returns.

One will need to be mindful of commissions as well as managing foreign exchange costs. For small additions to equities each month, to manage commissions, you might choose a no-load diversified large-cap U.S. stock fund with a low MER that attempts to mimic the returns of the Standard & Poor’s 500 Index.

You might also allow some level of fluctuation so you are not trading all the time and find your profits go toward commissions. For example, if your equity target is 75%, then you might not rebalance and buy until equities drop to 70% of your portfolio value or you might not sell until equities rise to 80%.

If you are going to move beyond indexes to individual stocks, there is an opportunity for you to avoid the expensive stocks and the crappy businesses within the stock market index. And you can possibly generate even better risk-adjusted returns through equal weighting your stocks as opposed to market-cap weighting which normally occurs in market indexes.

As soon as you stray away from buying stock market indexes, you have to be mindful as to how to control non-systematic (e.g., company and industry) risk, and you need to be disciplined as to how you buy and sell stocks. For example, you should use a strategy to help you select stocks where there is a direct cause and effect relationship between the strategy variables and a stock’s price, and the stock variables you are using to select stocks should be statistically significant. This will help you to make more rational selections as opposed to being lured into buying sexy overpriced risky stocks.

But we’ve digressed a bit here. With selecting stocks, it is helpful to have an appreciation of statistics as well as grade 10 math (e.g., one should develop a comfort with financial ratios as to relative price attractiveness, profitability, liquidity, debt and efficiency. If you are going to attempt to try to calculate a company’s intrinsic value (which many investors don’t do), then you need to understand present value and some corporate finance to figure out a reasonable discount rate.

Your education should go well beyond that to also include business strategy and competitive advantage, economics with respect to economies of scale, industry structure and life cycles and the impact of interest rates, inflation and business cycles. You might also spend some time reading stuff on Warren Buffett and Benjamin Graham to develop an appreciation of value investing.

3. Is “value investing” (Buffett and Graham approach) a good investment strategy for long-term goals like investing for retirement?

To answer this question, one needs to have an understanding of the Buffett approach. My understanding is that Buffett seeks ownership in quality companies capable of generating earnings that are on sale, but he is not looking for just any type of company. He needs to be able to understand the business to model its cash flow and arrive at its intrinsic value. My understanding is that he limits companies for consideration to those where

  • The company has performed well in terms of return on shareholder equity (ROE) (net income/shareholder’s equity) relative to other companies in the same industry, that the company has consistently done so for at least the last five to 10 years.
  • The company does not carry an excessive amount of debt. For example, Buffett seeks companies with a low debt/equity ratio (total liabilities/shareholders’ equity).
  • The company has high profit margins (even better if they are increasing) and should be consistently high for at least the last five years.
  • The company has been public for at least 10 years. If it has not been around for at least that long, one may have less confidence in attempting to determine future cash flows or future dividends for discounting to arrive at its intrinsic value.
  • The company possesses some competitive advantages as opposed to being a commodity-type business where its products are indistinguishable from those of competitors’ products.  Any characteristic that is hard to replicate is what Buffett calls a company’s economic moat or competitive advantage. The wider the moat, the tougher it is for a competitor to gain market share.
  • The stock is selling at a discount of at least 25% compared to its intrinsic value.

To me, these look like very reasonable criteria in which to search for businesses.

4. What should I know before I start value investing?

Here is my brief checklist.

  • If you have debt, your first investment goal should be to pay it off as quickly as possible.
  • Once your debt is paid off, establish an “emergency fund.”
  • If not retired, you need to save every month and know the amount you are saving is enough so you can afford to retire.
  • Set and stick to an equity target (a percentage of your portfolio that will be invested in common shares).
  • Don’t put all your eggs in one basket.
  • When you invest, seek cash flow (dividend and interest income) – otherwise you are gambling.
  • For stocks, stick with large blue-chip dividend payers.
  • The best opportunity for outperforming is to buy when a quality investment (that is not impaired as to its future ability to generate earnings) is substantially down.
  • Patience.
  • If you can’t do it yourself, hire someone with experience who can.

5. How should one invest in a bear market?

A bear market is when investments go on sale. It is the time to be buying. Use your equity target to give you guidance as to how much to buy. For your living needs within three years, those funds should not be invested in common stocks. You want to avoid the pressure of having to sell when investments are down which can create permanent losses.

During a bear market, you might stick with the highest quality large-cap stocks that pay a good dividend (so you are paid to wait). These types of large companies are supported by their dividend yield and tend not to drop as much. They are much less risky but are also more likely to recover when the market recovers. Smaller companies, emerging market securities, cyclical companies and commodities are much more volatile and can drop to levels that you might not think possible.

Be mindful not to put too much into any one stock so you manage company risk.

6. What are examples of sustainable competitive advantages?

Competitive advantage may exist where a business is able to provide a customer with a product at a lower cost than competitors or provide better value to the customer at a comparable cost. When a company can sustain such advantages through time, this can result in the business generating a high level of return.

One would typically examine the competitive forces that determine industry profitability including: the bargaining power of suppliers, threat of new entrants, bargaining power of buyers, threat of substitute products or services and the rivalry among existing firms.

For example, for entry barriers, we might consider economies of scale, proprietary product differences, brand identity, switching costs, capital requirements, access to distribution, absolute cost advantages, proprietary learning curve, access to necessary inputs, proprietary low-cost product design, government policy and expected retaliation.

In Canada, the banking industry operates in an oligopoly market structure with the six big banks dominating over 90% of the banking business. As such, these banks don’t have to compete as intensively and can generate excess returns through time. Their returns through time have generally been better than the S&P/TSX Composite Index.

7. What are the absolute best, most crucial tips/ideas to succeed in long-term investing?

We should seek to own a portfolio of investments that generate enough income to meet our living needs without having to rely on those investments going up in price.

8. What are the essentials of due diligence when investing?

  • To know your clients – including their personal and family backgrounds, financial situations, financial goals, cash needs through time, liquidity requirements, investment experiences and risk tolerances.
  • To know your product – to understand the investment, to make sure that investments are suitable, that the percentage of investment is reasonable and that risk is controlled.

9. What kind of stocks would you rather avoid holding because they are riskier than others?

As most of my clients are retired or near retirement, capital preservation and the development of stable dependable cash flow from their portfolios to meet their needs are typically key objectives.

For common stocks, I focus on high quality income-generating businesses that:

  • Produce goods and services needed for our economy in good or bad times (like banking, insurance, pipelines, energy, electricity, telephone and television [telecom], food, etc.).
  • Are dominant where they operate.
  • Are profitable.
  • Don’t employ an excessive level of debt.
  • Produce a good dividend yield where the company income is more than sufficient to cover the dividends.

Stocks that don’t possess these attributes are those I tend to avoid. These include:

  • Small-cap companies.
  • High growth companies with high price-earnings (P/E) multiples.
  • Stocks that don’t pay dividends.
  • Stocks with very high levels of debt.
  • Poor businesses.

10. What are some investment lessons you learned in 2016?

In 2016, I had no exposure to materials and very little exposure to energy which were industry sectors that performed extremely well. Generally these sectors tend to be more volatile than the market, don’t typically pay decent dividend yields, and their earnings tend to be cyclical and vary from one year to the next.

I learned that in sticking with my investment philosophy, it means there could be times when I could underperform. But straying can mean introducing added risk to clients which my experience has found over the years not to be worth it. Fortunately though in 2016, there were other industry sectors, like the financials, that performed very well so that we were still able to generate good returns.

11. What discount rate do you use in your valuation?

I rely on relative valuations in screening to find stocks of interest. I’ll then look at research reports as to their indicated intrinsic value (which might be called price target or fair value) as opposed to trying to calculate them myself. Ideally I would like the stocks for consideration to have a market price with a good discount to its intrinsic value. The amount of discount can vary – like today it is tough to find good businesses selling at significant discount.

12. Which is more useful, earnings yield or P/E ratio? Why?

Earnings yield (earnings per share divided by stock’s market price) is basically the inverse of the P/E ratio. The P/E ratio equals stock market price divided by earnings per share. So they are equally useful.

13. With just public information, how can you be confident that your valuation is correct while the market is wrong?

Your thesis in investing in a stock may be correct, but because of the human behavior of others, your identified stock price can remain under its fair value for years. There is no certainty when it comes to investing. For this reason we must buy enough stocks under a strategy in order to get the strategy returns.

14. What are the key attributes of a great investor?

A great investor is someone who

  • Has spent a lifetime building up educational and professional investing credentials.
  • Has gone through a period of articling or training with a seasoned financial adviser.
  • Has been investing for more than 10 years.
  • Uses one or more stock strategies to identify stocks for selection.
  • Understands your needs of cash from your portfolio through time.
  • Pays great attention to risk management.
  • You trust implicitly.
  • Provides advice that is always in your best interest.

15. What are the best books on investing?

Read “The Richest Man in Babylon” by George S. Classon.

16. What skills are needed to succeed in distressed debt/special situations investing?

By definition, distressed securities are experiencing financial or operational distress, default or are under bankruptcy. There is a very real possibility that any investment could result in a loss of most or all of your investment. For these reasons, I would likely not invest in this type of investment as it does not exhibit the risk and return profile I seek that would be suited to my clients.

The skills to succeed come down to spending enough time to really understand this type of product. But given the time commitment required, you might better use it toward investigating other types of investments.

17. What are the best books about special situations investing?

As I don’t have much interest in this high risk area as these investments likely aren’t suitable for my clients, I don’t know offhand any books on special situation investing to recommend.

18. What are the best web sites to follow for value investing-oriented investment ideas?

Morningstar, Value Line and Zacks might be good places where they write about stocks as well as provide you with resources to help you in stock selection.

19. Who are the best value investors in the U.S. with under $1 billion in capital?

I don’t typically use third-party managers. You might look at a Credit Suisse article called “On Streaks, Perception, Probability and Skill.” It discusses identifying skilled managers versus those that are just lucky.

You might also read an article by Ernst Gronblom called “Choosing Money Managers.”

20. What are the best mutual funds for value investors?

I don’t sell mutual funds. Mutual funds tend to be more expensive and more appropriate for retail investors.

With more money to invest – at least $100,000 to get in the door, but most will want at least $500,000 – you can hire a portfolio manager at a competitive cost who can help you through

  • Generating higher returns and/or lower risk by selecting the right asset mix, selecting good investments, sheltering income from taxation, controlling risk and setting aside funds for anticipated needs (so you are not forced to have to sell investments when they are down). An experienced investment professional may also help you avoid making costly emotional or irrational investment decisions.
  • Eliminating, reducing and deferring income taxes so you’ll have more money growing faster to meet your goals.
  • Protecting your family against devastating financial losses – like the death, disability or illness of the family breadwinner, property loss, theft or damage, and liability claims. Without such protection, your lifetime of savings could get wiped out.
  • Design an effective estate plan so your estate will be distributed according to your wishes, minimize tax and transfer costs, and protect your legacy from a variety of creditors. This not only gives you peace of mind but hopefully will ensure your life savings is there to take care of your loved ones throughout their lifetime.

21. For an individual relatively unsophisticated nonprofessional investor, what are the most undervalued asset classes today and what are the best funds or mechanisms to invest in them with a buy-and-hold mentality?

An unsophisticated nonprofessional investor should not buy individual stocks but rather stick with large-cap stock market index investments through either exchange traded funds or mutual funds formats. They should also not put all their money in the stock market. Take a look at iShares S&P 500 ETF with an MER of 0.04%.

Cash Or Credit? The Best Way To Handle Money

There’s a perpetual question that many people ask as they make their way through the financial zoo that is life, and it ultimately often boils down to – cash or credit? Is there a best way to use these possibilities in order to maximize the satisfaction of life while also staying away from bad money behaviors?

The answer to that second question is yes, though sometimes you have to work for it. And that answer also entails lots of circumstantial reasoning, which will bring you back to the first question. So, your method to find out where you fit in the cash vs. credit riddle will be to learn about credit before using it, trying cash only for a while, to think about the benefits of auto-pay, to learn how to move money digitally, and to remember that it all looks the same on a budget.

Learn About Credit Before You Use It

Controlling credit card debt isn’t something that comes particularly naturally. It’s a skill that you have to work with over time, and one that you’ll get better at. But at the very beginning of your timeline when it comes to using credit (when you get your first credit card, basically), it’s important that you take the time to learn about things like interest rates before you even use it for the first time!

Try Cash Only For a While

Learning to live with cash only will teach you some important lessons about money as well. When you don’t have the ability to just swipe and forget, when you actually have to hand over physical representations of money, it will often make you think twice about what you’re purchasing.

The Benefits of Autopay

One thing that will help you overall in your budgeting is if you sign up for every autopay chance you can. This is a middle ground between cash and credit usage, and it will also make sure that you never have to deal with any late fees.

Moving Money Digitally

Another topic just outside of the cash vs. credit spectrum is the idea of moving money digitally. With credit, you don’t necessarily have the money to spend. But, if you use a debit card or move money through something like PayPal, then you are physically using cash that you have, but you’re just moving it around digitally, which gives you the best of all worlds.

It’s All the Same On a Budget

And finally, it’s important to remember that no matter how you use money, it’s all going to look the same on a budget sheet. If you overspend, it will come back to bite you. If you abuse cash or credit, then you’re going to find yourself in debt, wishing that you’d paid more attention to your finances before it became a problem.

4 Actionable Tips for Discussing Money with Your Significant Other

Most people try to keep their personal lives separate from their business/financial lives. However, money will eventually start entering into the mix as your relationships grow deeper. Interestingly, money matters tend to yield unnecessary conflicts in relationships because people have different attitude towards money. Most people tend to be natural spenders, others are natural savers, and some folks have a natural flair for investments.  This piece seeks to provide you with insights on four actionable tips for discussing money with your significant other.


1. Start from your common ground

If you want to have healthy conversations about money, you’ll need to start by finding common ground with your significant other. Many people often erroneously start their money talks by pointing out their different outlooks on money. For instance, it is unlikely that a talk on the need to have an emergency savings fund will be effective if you beginlisting everything wrong with your partner’s plan to buy a vacation to Hawaii next month.

However, you might find it easier to talk about money issues if you find common ground such as the rising cost of living.You’ll can easily find common ground on money matters if you take the time to list out the personal finance matters on which you and your partner agree. For instance, you might agree on the need to take a personal loan to meet pressing financial needs. You could also agree to contribute a certain part of your salary towards meeting finance goals.

2. Define your goals and work towards them

Discussing money issues with your significant other could turn out to be a futile and fruitless effort if you only talk what’s wrong with your finances without defining your goals. You can have Saturday morning talks on how you are struggling with a debt burden; yet, the debt issue won’t be resolved until you set an objectiveto know why your expenses are more than your income.  Hence, you and your partner should define your personal finance goals such as ‘paying down student loan debt in 3 years’, ‘having $10,000 savings in six months’, or ‘opening up additional streams of income’.

3. Don’t be too proud to ask for help

Discussions about money can turn out to be an unpleasant experience when emotions are heightened. This tendency for accusations and counter accusation is acute when it seems that the other person is the cause of the financial troubles in the home. For instance, it is easy to start apportioning blame if the utility bills remain unpaid because your partner recently splurged on an unplanned designer handbag or a new PlayStation console.

Hence, if you discover that your conversations about money are turning ugly with war of words, you may want to consider seeking guidance from a mutual friend, religious leader, or financial counselor that you trust.  Seeking help from an objective third-party can help you and your partner address your money problems without running the risk of sounding accusatory.

4. Master the art of timing

Human beings are emotional and our emotional side tends to becloud our sense of reasoning – you are emotional and your significant other is also emotional. The fact that people are emotional suggests that people are more receptive to ideas at different times of day based on how they are feeling.

If you attempt to broach personal finance issues when your partner is stressed or disturbed, you could get the cold shoulder and you’d feel that the person is not as concerned with finances as much as you are. In essence, you’ll need to take the time to study your significant other to know when they might be open to discussing money matters with you.

Five Tips For Better Handling Your Money

Money is the root of all evil according to the old adage. It does have a habit of causing people problems, when they don’t have it and even when they do. How well you are in control of your money and finances will determine whether you can buy a new car or a new home, and even whether or not the credit card companies will send you a little shiny piece of plastic.

Money is a must in this day and age, and if you find yourself lacking it, it can be hard to live, eat, and even keep a roof over your head. Here are some tips for getting control of your money, instead of letting money control you.

Start Financing

Do you have a financial portfolio? What are you doing to save for retirement? You definitely need to get some financial things in order if you want to be better at handling money.

There are stock options, you can invest in bonds, or talk to your banking agent about all of the other financial portfolio options there are out there. Some are safer than others, so it helps to discuss your options with someone in the know.

Open A Savings Account

One excellent way to be adult about your money is to open a saving account. Start putting money into it immediately. If you’re not living paycheck-to-paycheck you might not need to worry about finding a savings account with no minimum fee, but they do exist.

Pay Off Your Credit Cards

Paying off your credit cards is one of the first, and usually easiest, steps in debt freedom. Before you even consider canceling a credit card you should have all of them paid down to zero balances. Too many open balances can seriously affect your credit score.

Get Out Of Debt

You also want to pay off any other debts you may have, whether it’s loans, college, or medical debt. The less debt you have the better. Some open accounts are fine, and may even help boost your score, but too many open ones and delinquent ones are definitely a bad thing.

Debt is harmful and could keep you from ever owning your own home or even getting a  new car when you need one. Luckily, there are agencies out there that can help you get out of debt, no matter how much you owe.

Keep Track Of Your Checking

You should also be sure to utilize the things the internet and smartphones offer you when it comes to staying hyper-connected. Download your bank’s app on your phone so it’s easy to keep track of your checks and balances. Early detection of fraudulent charges in checking accounts, savings accounts, and even with credit cards could save you a bundle of money and a lot of time.

Four Tips For Wiser Money Usage

Everybody has to spend money, some people need to spend it on a daily basis. You need to put food on the table, keep your utilities running, and put gas in your vehicle in order to get to and from work or school. Because most things in life are not free it helps to know how to be wise with your money.

Being smart with money is about more than just saving some when you shop. It’s also about making sure that no one is stealing your credit card numbers or even your identity. In order to save money, and keep people from stealing your money, here are some tips to help you save and spend smarter!

Know Your Security

Spending offline, these days, poses just as many risks as spending online. Most businesses run their cash registers through the internet leaving them open to cyber breaches. When you’re shopping online you can ensure your security by only spending on sites with a secure server (look for https, as opposed to http).

Credit card companies have now become wiser to the ways of hackers. One thing they have done to try to help cut down on credit card information theft is to put chips in cards. While some stores still don’t have working chip readers it is believed that this type of change will help cut down on info theft.

Create A Budget

For your business and your personal life, you should create a budget. Keep spending within that budget and you will find that you spend less money over time. You should also be budgeting money for savings when it comes to your personal money. Having a little nest egg could save some major stress if an emergency creeps up.

Find Fun Ways To Make Extra

There are many ways to make extra money, both online and off. That spare money could go directly into your savings, it could be used for a yearly vacation, or it could be your monthly fun money so that your regular paycheck can all go to bills and food.

Some of the ways that you can make money include selling things online, trying crowdfunding, or even having a rummage sale. You could make art or craft items to sell online, sell your clutter, or learn what’s worth money at resale shops.

Consider Large Purchases

Don’t make hasty decisions when it comes to larger purchases. Don’t buy the first house you look at and don’t assume you need to find something in the first month you’re looking (unless your home has sold and you need a place to live quickly). The same for cars; test drive a few before you make a decision.

Alternative lenders go mainstream

For some, getting a mortgage from a bank has become a bit more challenging – even if your credit score is good If you don’t qualify using the benchmark rate, regardless ofwhat mortgage rate and term you opt for – this has been called the” stresstest” — then you may be out of luck. With the introduction of new mortgagerules last year, the Government tightened mortgage lending guidelines inresponse to concerns that some markets in Canada are overheated and thatCanadian debt levels continue to increase.

The new mortgage rules have also had an impact on those who want to refinance their mortgage loan. And at renewal time, if you want to increase your existing loan, change your amortization or shop for a better rate, the rules may have an impact as well.

Despite the challenges, there are solutions. A bank is not the only option for a mortgage. The new mortgage rules have created an opportunity for a variety of specialized lenders to enter the market who are flexible and open to reviewing a variety of situations and has led to a growing pool of mortgage funds.

In a nutshell – they’ve gone mainstream
These lenders are not limited to private individuals with money to lend, either individually or as part of an investment pool. Mortgage brokers still have access to those funds; however, the market is also seeing an increase in the number of Mortgage Investment Corporations (MICs) as well as smaller lenders with products to fill the gap.

Many alternative lenders put more weight on the equity in a property, rather than on the work you do or on the credit challenges you may have.

Smaller institutional lenders in some regions across Canada, like credit unions, however, may offer specialized lending with affordable interest rates, reasonable lending fees and flexible underwriting.

A few benefits of specialized lending:

Quick closings: The key to a quick close is having your financing set up quickly — specialized lending can make that happen.
Terms of the loan: These loans are for short periods of time, usually no more than two or three years.
Great for investors: Because specialized lenders have flexibility, they will look at those fixer-upper rental properties with a keen eye and may fund both the purchase and the home improvements.
Diverse repayment options: This is especially helpful for entrepreneurs. Payments can be structured more creatively and may include interest-only payments and balloon payments at the end of the term or on closing of a sale.
Construction financing: Bank construction financing can be riddled with red tape. Private lending may get the borrower more money, and quicker access to construction draws, which in the end, could save time and money when building a home.

For more information and to find a lender who will meet your needs, call me today!

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com

Thinking of buying a vacation property?

When the weather in Canada turns cold and winter sets in, a lot of us think about a blue sky vacation, others think about buying a vacation property in the U.S. sunbelt or even in British Columbia where the weather is milder. Still others enjoy winter and look for a winter vacation property here or in the US.  While the allure of long beach walks, and the idea of hitting the ski hills just outside your chalet is attractive, the question is how to finance the dream. First do your research.

There are other considerations if buying in the U.S.

  • Your purchase could be subject to estate tax. That means, when you die, your heirs will not only have to shell out U.S. estate tax on the fair market value of that home, they would also be hit with Canadian income taxes.
  • Also, if you plan to rent out that property, then you’re subject to a whole host of issues.
  • Use a Realtor who is experienced with US property sales.

If the vacation property is in Canada, you still can refinance your existing home and purchase the property outright if you have the equity or you can use what you have as a down payment. The basic process of applying for and qualifying for a mortgage is the same as for your principle residence; however, lenders will look at many more variables when assessing a property.

Your strength as a borrower is important but equally as important is the property. Lenders will look at the location, its proximity to a major market, year-round access to the property, paved roads, etc.  Most lenders require at least 20% down. The rules changed in 2014 and they have just changed again. But don’t let that deter you if your dream is a vacation home.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at WWW.GUYTHEMORTGAGEGUY.COM