How can I find more cash to invest?


One thing is true about building wealth. The discipline of spending less money is the surest path to saving more. But you may have to reform your way of thinking—we do not deserve to buy something now if we can’t afford it today. Here are a few suggested ways to help you spend less:

• Shop with cash. If you carry a debit or credit card, it is too easy to escalate your buying when out at the mall. Better to put a budgeted amount of money in your pocket and spend no more—make sure you include enough for a treat at the café.

• Clean your clothes at home. Try to buy clothing that can be washed at home, using caution not to shrink your fabrics.

• Don’t fire up a temptation. Don’t bother browsing the catalogs, the clothing racks, or the car lot if you don’t have an honest need.

• Look for freebies. Use your own bank’s ATM to save the $1.50 service charge. Try to avoid all the little service charges that hotel chains are starting to slip onto your invoice. Try to include extras with your vacation packages. Buy vacations in domestic dollars if you can. Plan to attend one of the numerous festivities that municipalities pay for and provide in the summer holidays. Consider that many entertainment venues offer discounts just prior to the show.

• Borrow DVDs and CDs at the library. Try your library for movies or music—you may be surprised at the free access they provide.

• Take portable picnic coolers to avoid eating out. This can save you hundreds of dollars per month. Picnics are great getaways in the summer and can be carried in coolers in your car.

• Learn the skill of cooking. It is easy to rack up over $50 with a tip when two eat out one meal per day. By learning to cook, you can add the artistry and relaxation to your own fine dining experience. When you do go out on the town, consider splitting larger meals with your partner. Avoid supersizing fast-food which may cost more and add calories.

• Limit prepaying your taxes. Adjust your income tax deductions at work, to make sure you aren’t pre-paying too much.

• Do a “needs analysis” by asking, “Do we need it?” This is where your partner can help you be honest and accountable by simply discussing every purchase, at say over $50—set your own dollar figure, at a point where you involve the other’s advice. Make lists and discuss your real needs.

• Don’t prepay phone charges. Some long distance residential plans and/or cell plans are priced so high that the average caller will not benefit by a higher pre-paid monthly plan. Long distance and cell phone minutes are better paid by a flat rate, per second, for restrained use as needed. However, some good plans allow you to use VOIP online where prepaid amounts stay on the books, and more minutes can be added as needed. Note: LINKSYS by Cisco Systems offers inexpensive hardware under one hundred dollars at computer stores, which allows two lines to regular phones.

• Liquidate if you have too much stuff. Space costs money so consider what is essential. Go over your furniture, books, general stuff, to determine what you don’t or won’t use in the next five years. If you don’t love it, sell it, or give it away.

• Invest your raise. Avoid spending up to any increase in your income. Rather plan to invest it.

• Assess the unit price and buy in bulk. Most everything is sold in quantity and can be compared with a competing brand—either by ounce kilo, or serving, etc.

• Buy depreciated cars. Avoid the biggest depreciation that occurs among assets. Buy vehicles used after a year or two, with the factory warranty still on it.

• Reduce your vehicle’s weight. Unload excess vehicle weight that can cost in gas consumption. Similarly having your tires carry the correct PSI will offer better gas mileage.

• Know that it all eventually goes on sale. It makes sense to wait it out for the seasonal sales. Stores begin to sell their seasonal stock, including clothing, often prior to the need. So if you are savvy, mark in your calendar the best times to buy. This is true also of travel bargains.

• Pay cash only for groceries. Have you ever spent double what you intended on items that can be eaten? If you pay cash you are forced to budget regardless of how hungry you are, sticking to the necessary items.

• Know where the quality brands are. Don’t purchase items that will wear out prematurely and will have to be replaced; instead buy quality, but shop around for the best prices.

• Buy more when it is really cheap. If you can buy tuna, salmon or spaghetti at 30% less than usual, why not stock up on it? But don’t make the mistake of buying multiple “on sale” items if you don’t need higher quantities.

• Make fun fast food. In many ways, you can make your own fast food, such as fruit or vegetable trays for drives, hikes, or stay-overs.

• Use public transit. By not driving all the time you may save some money. Many municipalities offer cheap bus transportation. Some prefer not to drive if they live in a large city such as Vancouver or Toronto. They can unload insurance, fuel, and repair costs on top of any lease or loan payment (along with the interest). There are car-sharing co-operatives in larger cities. Car rentals can be cheaper in the winter and on weekends.

• Cut your hair between main cuts. Sometimes a minor home trim will add another week before you’ll need to visit the barber or hairdresser.

• Utilize the secondary market. If you are a bookworm, or may help you find the book for less than a dollar, or perhaps find a camera on eBay at 25% off the cost. Most of the world literature is available online for under $5 for the entire life-work of an author, sold on Amazon Kindle.

• Make the park your gym. Why not walk around the park’s pond and get outside as a bonus.

• Adjust your thermostat. By juggling temperatures by one to two degrees on your thermostat (wear sweaters or shed clothing) you can save a few hundred dollars per year.

• Know how and when to return merchandise. Many admit mistakes or displeasure with a product and promptly return it according to policy—in the free market that is more than fair! Ask about return policies when shopping. Often it is wise to reassess a purchase in a day or two.

• Pre-pay certain vacation costs. Prepaying for a resort food plan in domestic dollars to avoid paying later for dollar-exchange loss, can make budgeting sense because you’ve got to eat anyway. Likewise prepaying museum ticket passes can save money and side-step long line ups.

• Just stop—don’t shop! Tell yourself to stop shopping when you have no imminent need. Try walking, sitting in a café or reading instead.

How do I make financial agreements with my fiscal partner?

When establishing a financial strategy involving other stakeholders, such as paying down a mortgage, develop a written plan that all parties agree on. You can create written point-form agreements for each to sign in areas of investing, registered vehicle planning, debt repayment, etc.

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When determining your goals, it is important to think positively and avoid language such as, “We will never have enough to retire,” or “We can’t seem to get ahead,” or “this debt is killing us.” Statements like this often become self-fulfilling prophecies. Rather, it is important to design an action plan and start working towards it together with all the stakeholders, such as your spouse or partner, referred to henceforth as your fiscal partner. Write your plans out regarding financial concerns such as:

Reduce or eliminate debt. One of the encumbrances to investing for retirement is that you may be servicing too much hard-core credit card debt, much of which is interest. Both fiscal partners may have credit cards doubling the family debt load and vastly reducing your net worth. Thus, it makes sense to pay down the debt on all credit cards, starting with those that carry the highest interest rates first. Aim to be 100 % debt-free of abnormal debt weighting in your net worth statement where possible (mortgages and car payments are normal).

You and your fiscal partner will appreciate the new clarity and increased financial freedom this gives. Slavery to debt repayment is financial bondage, and will increase fiscal-related emotional stress on responsible partners.

Start or maximize your monthly investment plan. Your plan will depend on your income and expenses. If you are young, begin investing now. Any given sum of money can double frequently depending on time and interest rate growth. At 6 % it can double every 12 years; at 4 % every 18 years. Simply divide the interest rate into 72 to get the number of years until doubling occurs.

This simple mathematical illustration reveals the importance of beginning to invest while you are young. If you are near retirement, you may ascertain that you need to ramp up your investing, increasingly over the fewer years you have. The average Canadian retires now at age 62. Become aware of your retirement options, choosing agreed strategies with your partner way ahead of time.

Reallocate assets as you near retirement. An investment portfolio still invested in close to 100 % equities near retirement is very risky. A portfolio must have some fixed income (government bonds, corporate bonds, safe mortgages, and real estate) to reduce stock market risk. Your partner’s risk tolerance while investing.

Take advantage of tax-saving vehicles. Registered investment vehicles can help you reduce or defer the tax hit. Some plans,can offer government grants that supplement your investment contribution to help your children go to post-secondary school. Discuss the viability of tax arrangements using registered investments best suited to both fiscal partners.

Don’t sell good investments amidst a volatile market loss. It may be better to stay invested and adjust your portfolio after the market begins to retrace any losses upward after a period of market volatility. If you hold a good fund, the stocks within that fund are probably good. Nevertheless remain aware of your investment goals and get periodic updates and review the situation with your fiscal partner. Your financial partner may not be able to handle stress caused by a volatile market so plan with this in mind.

Maintain financial accounts with transparency. Spouses and partners who share mutual financial goals have a right to be aware of the banking and investment accounts and movement of funds via frequent transparent discussion. Total honesty is necessary. One spouse should not borrow recklessly, nor use credit without the agreement of the other spouse, where funds are to be accounted together in mutual fiscal arrangements. There should only be private boundaries where agreed, such as business agreements, risk, or debt and/or income necessary for solvency. Business accounts or agreements increasing risk should not co-mingle with personal finance or accounts. Establish such boundaries in advance or hard feelings can develop.


EN 3.13


When is the best time to sell or buy a new home?

People begin putting their homes on the market early in the year, though peak home purchasing occurs around June once school has ended, the weather warms up, and vacations begin. In mid summer people begin to have more time to house hunt. Income tax refunds can also increase payments, adding to the increase of volume.

While buying is steady in the summer, it begins to taper off in early fall, with another spike in mid-Autumn when overly optimistic home sellers in Spring, begin to lower their prices.

Like investing in the stock market it pays to be a patient house hunter. Though there are more Springtime homes to choose from, sellers hold their prices to the ceiling because of demand. During the late fall and early winter between Thanksgiving and New Years Day sellers can be more motivated to except a lower offer (people want to limit the time to sell during these holiday seasons when they are busy with families).

Large layoffs or announcements of a planned corporate headquarters moving out of a neighbourhood can result in more homes on the market for the short term with lower pricing by motivated sellers. Conversely, a corporation coming into an area can result in increased home prices.

Homes can sell for 3-5 percent more than the annual average in May through June; closer to the average annual price in very early Spring and Autumn; dropping to 3-5 percent below the average annual price prior to winter in December and January.

Sellers generally have a larger buying market during May through August during which time nearly half of the annual sales close. Bear in mind, that while deed transfers peak between May and August, most of those sales began one to three months earlier (it takes time to close home transactions).

Don’t be too stubborn. A home priced unreasonably high (up to 15% above market value) may be difficult to sell at any time, especially in a buyer’s market (in most cases is in early Spring). A “buyer’s market” in a city means more inventory is available, whereas a “seller’s market” means fewer homes are for sale.

Where possible, place your home for sale far in advance of buying the new one. This removes the possible need to juggle two mortgage payments in addition to the other complications of home selling. You will have more time; as well as more choices if you start during your new region’s peak inventory season.

Movers book up solid in the summer so plan this well in advance once you know your closing date. Shop around and call for an estimate. Book tentative dates until you know for sure adjusting your strategies as you go along.

The Internet offers virtual tours, and neighbourhood data, to help the decision-making process. With the advent of commission free websites, some sellers are listing their homes on sites such as without the traditional real estate agent or fees. However it is important to get listed on MLS, and few people know the intricacies of bringing an offer to the status of a concluded deal.

How can I assess the expense of leasing or buying a car?


The rising cost of driving.

The rising cost of fuel is making many consumers change their thinking with regard to driving expenditures. On May 5, 2011,the following was reported:

    “General Motors Co. (GM-N) reported its highest quarterly profit in more than a decade, helped by fuel-efficient cars and smaller SUVs that were in demand as gas prices marched higher. The biggest U.S. automaker said Thursday that it earned $3.2-billion, or $1.77 per share, in the first quarter. It was a great start in a challenging climate that would have sunk the company just a few years ago when it was too reliant on gas-guzzling pickups and SUVs for profit.”

On average you will need to work 30 weeks to pay for your vehicle (not counting fuel or repairs). Because driving a car is one of the largest expenses in an individual’s budget, plan this expenditure carefully. From the graph you can see that expense accumulate given a payment of an average vehicle payment of $500 per month plus gas.

Kilometres are presented as the average busy driving use per vehicle as promoted by vehicle manufacturers of 24,000 km per annum. Both monies spent on a car payment and for fuel are added in the final column. Adviceon does not claim accuracy for the numbers represented as extrapolations in the table, and uses them only for illustration. Errors and Omissions are excluded.