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Money Tips
Always get a pre-approval in place before you shop for a property. Have approximately 1.5% of the cost of the property on hand (in the bank) for "closing costs" If your 5% down is coming from your own sources you must provide bank statements showing the money has "seasoned" for no less than 3 months Work with a Real Estate Professional and Real Estate Lawyer...if anything goes "sideways" along with your Mortgage Broker - you will save time, money and be protected.
Some sound advice from Adam Goodman-Following the Goods Financial Management for the Young and Ambitious
Always ask questions - there is no such thing as a stupid question. Regardless of what the topic is, don't be afraid to ask questions. If you are talking to someone at the bank and they use a term or phrase you aren't familiar with, ask what it means. If you aren't sure about the final price of a product, ask how it was calculated. Remember, it's your money, and if you don't ask questions, you won't be able to make decisions with all of the relevant information.
Track your money - even though you may have a great memory and might be on top of your spending, it's crucial to track where your money goes. Make sure you keep a detailed log of where you spend your money, the amount of money you spent, and when you spent it (you can use either a paper or pen, an excel spreadsheet, a computer program like Quicken, or an online site like mint.com). By tracking your money you'll be able to see if you are on or off budget whenever you want, and also be able to go back and review your spending patterns 6 months later.
Manage your debt - at some point in life you'll need to take on debt (whether it is for school, buying a house, traveling, or purchasing a car) and that's not a bad thing. However you need to make sure you manage your debt. Figure out how you can pay off your debt as soon as possible and reduce the amount of interest you'll have to pay.
Avoid Peer pressure – your friends and family might be buying the latest gadgets or basketball shoes, but don’t feel pressured to follow their example. Remember, your money is your responsibility, and only you can manage it effectively. Stick to your budget and don’t spend your money just to compete with your friends!
Stay Within Your Budget - budgets are important as they help you make sure that you are saving and spending your money wisely, however if you don't stay within your budget it is useless
Tips for Better Credit
7 Wealthy Habits of Financially Secure Women
Some sound advice from Canada.LeaseTrader.com
1) If you're considering leasing a vehicle, you first want to make sure you are a candidate for leasing. If you will drive less than 15,000 miles a year and would enjoy a different car every two or three years, then you should be looking into leasing.
2) When negotiating a vehicle lease payment, keep in mind that you're only paying for the portion of the car you'll be using. Consider leasing as an extended rental because you're not paying for the entire car. This explains why monthly lease payments are usually lower than when you finance the full car
3) Understand that the bank owns your car, not you and certainly not the dealer. In fact, when you drive your vehicle lease off the dealer's lot, they no longer have a relationship with you. your relationship is now with the bank or leasing company, which owns the car and you're making monthly payments to.
4) Because the bank owns the vehicle it's important that you adhere to proper maintenance of the vehicle to keep it in good condition. This will go a long way towards helping you avoid extra fees at the end of your lease, since the bank expects you to return the car in good condition.
5) Read your contract to make sure your lease is transferrable. Today 97 percent of all leases are. This way, if there's ever a time during your contract that you no longer want or aren't able to afford the payments you can use LeaseTrader.com to transfer your lease over to a different credit-qualified person.
Tips from the Taxpayers’ Ombudsman
Keep a record of conversations and a copy of any letters you have sent to and received from the Canada Revenue Agency (CRA).
Ask for the first name, employee identification number, and regional suffix of the agent serving you. Keep this information with the records of your conversation. If agents refuse to identify themselves, ask to speak to a supervisor. If difficulty persists, you may file a complaint with the CRA – Service Complaints program.
If the CRA – Service Complaints program does not resolve the issue to your satisfaction, contact the Office of the Taxpayers’ Ombudsman.
Call the Office of the Taxpayers’ Ombudsman if you have questions or need help filling out your complaint form. If your complaint is not within the mandate of the Taxpayers’ Ombudsman, his staff will help you find out who you need to contact for resolution of your complaint.
In the midst of an economic climate that often leaves us riddled with high stress and low tolerance, it is all too easy to slip into bad habits that launch our bodies out of balance and make us vulnerable to illness, including sleep and eating disruption, high blood pressure, frequent colds, migraines and depression. Below are some tips from the Skillful Living doctor and recent Your Money Radio guest, Michael Finkelstein, M.D., on how to be more productive, and how to keep our health intact while we do the same for our wallets.
Are you preparing your children to be financially independent adults?
•Get started in stock investing by understanding your current financial situation, your investment goals and style, and the different types of stocks you can invest in. This preliminary approach sets the stage for your rational and more strategic stock investing strategy.
- A Home Equity Line of Credit or Heloc is similar to a credit card with a large credit limit and low interest rate. You can borrow up to 80% of the value of your home. Because a HELOC is secured by your home, lenders can charge less interest than for unsecured loans.
New Credits for 2009 - Home Renovation Tax Credit: Allows homeowners to claim up to $10,000 of renovations on their personal-use property to receive a maximum $1,350 tax credit. Homeowners have to spend a minimum of $1,000 in order to take advantage of the credit. But renovations have to be completed between January 28, 2009 and January 31, 2010. - First Time Homebuyers Credit: For anyone who purchased a house after January 27, 2009, they can claim this $5,000 non-refundable credit for $750 in tax savings. You cannot have owned a home in the last five years and you must live in the house in order to claim the credit. Credits to help minimize your taxes - Pension Income Splitting: Seniors with qualifying pension income can take advantage of splitting their income to minimize their taxes. - Children’s Fitness Credit: You can claim up to $500 for qualifying children’s program. The activity has to involve physical activity and the receipt needs to be provided by the group responsible. - Transit Pass Credit: Monthly bus passes, weekly passes purchased for four consecutive weeks and other continuous use passes are eligible for a non-refundable credit. But you have to keep your receipts and passes in order to claim the credit. Credits for students - T2202A Form: Students can only claim tuition expenses as well as education amounts and Textbook Tax Credit with this form. The student has to use the credits to reduce their taxable income to zero. - Tuition transfer: Once the student has used the credits they need, they can transfer up to $5,000 to a parent, grandparent or spouse. They have to sign the back of the T2202A Form indicating the transfer. - Carry forward: A student can choose to carry forward their unused tuition transfer to use in future years. This can be a welcome tax break when they have graduated and are earning more income. Professional versus DIY - No matter which method you use, you should ask questions and understand how your tax return is being prepared. - Software can be a great tool but it does not tell you if you have missed a deduction or credit. - Make sure you have all your receipts and slips. Post assessments - The majority of people think that once they receive their tax refund, their tax return is approved. This is not always the case. - The Canada Revenue Agency processes returns but begins their review process in July. - In many cases, the taxpayer receives a letter asking for documentation to support a credit or deduction claimed on their return. The taxpayer has 30 days to provide the appropriate information or the credit is denied and the tax return re-calculated. - Moving expenses, medical expenses and tuition transfers are three of the most commonly reviewed credits. - As long as you can provide the appropriate receipts and you have made the right claim, the review process is easy.
- The CRA may also re-assess your return and send you the revised Notice of Assessment. This could result in a tax bill. You can file a Notice of Objection if you disagree.
Ron's Recommended Reading List:
The E-Myth Enterprise: How to Turn a Great Idea Into a Thriving Business
Good to Great: Why Some Companies Make the Leap…and Others Don’t
Thinkertoys: A Handbook of Creative-Thinking Techniques
What is Thing Called Theory of Constraints And How it Should Be Implemented?
The Millionaire Next Door: The Surprising Secrets of American’s Wealthy
1. A will only takes effect after death. Your executor has no power to act for you if you are incapacitated. You need to speak to your lawyer about appointing someone you trust on a power of attorney.
2. It is prudent to consider appointing different people as executor and guardian in your will. This way there will be checks and balances-one looks after the money, one raises the kids.
3. Just because you leave everything in your will equally to your kids does not mean they won't fight after your death. One child may be your caregiver who may be hurt if you left her the same as your other kids who you rarely see or hear from. As well, you may have given more to one child than the other in your lifetime.
4. Secrecy is not always golden when it comes to estate planning. It is important to consider talking to your kids about your plans. For example, before appointing one of your kids as executors speak to him, he may not want to be appointed. LES KOTZER -www.familyfight.com, co author WHERE THERE'S AN INHERITANCE and THE FAMILY FIGHT
1. Do your homework - look into whom you’re contemplating investing with. What is their track record with past investments? How long have they been in the investment business?
2. Read the Offering Memorandum - Most promoters sell their investments by way of a disclosure document called an offering memorandum. It provides details relating to the particular investment, the people involved, the potential risks, your rights as an investor, etc. This will help you to make an informed decision about whether or not to invest.
3. Seek out some professional advice. Don't be afraid to speak with a lawyer or accountant if you have any questions about how the investment works and how various factors may affect you.
4. Be cautious about "throwing all your eggs in one basket". If it works out, great, but what if it doesn't? Do you want to bet your whole financial picture on one deal? 5. If it sounds too good to be true, it probably is.
EcoENERGY retrofit Home (NATIONAL) - Up to $5,000 in rebate.
Get a federal government rebate up to $5,000 when you have an energy evaluation done and make energy efficiency improvements to your home.
Eligible Homeowners Owners of single-family homes, detached, semi-detached and homes are eligible. Owners of most low-rise multi-unit residential buildings (MURBs) that are no more than 3 storeys high and some mixed-use buildings with at least 50 percent permanent residential space are also eligible. Note: Homeowners are responsible for ensuring that they obtain all necessary permits and meet all municipal and provincial requirements.
Steps to Get This Rebate:
1. Have an ecoENERGY Retrofit energy evaluation done. This evaluation must be done by an accredited energy advisor, licensed by the Natural Resources Canada (NRCan).
2. Once you receive the energy evaluation report, look at the rebate guide to see how much money you can get back for the recommended home improvements.
3. Do the home improvements.
4. Get another energy evaluation done, to see how much more energy efficient your house is.
5. The energy advisor will send your final energy evaluation to Natural Resources Canada (the government department that runs the ecoENERGY Retrofit program).
6. Natural Resources Canada will send you a rebate cheque.
Note: You must complete your energy retrofits and receive your post-retrofit evaluation by March 31, 2011, or within 18 months from the date of your pre-retrofit evaluation report, whichever comes first.
For More Information: Natural Resource Canada's residential grants website Phone: 1-800-O-Canada ((1-800-622-6232) TTY: 1-800-926-9105, http://www.nrcan.gc.ca
Province of Alberta also runs its Environment Rebate – provincial rebate managed by non for profit organization ClimateChangeCentral.com. Who is eligible? Homeowners, new home buyers to offset their energy efficiency improvements. · New Homes – must achieve an EnerGuide efficiency rating of 80 or more - $1,500-$10K · High efficiency heating systems - $400-$600 · Clothes washers – all EnergyStar washers - $100 To apply for a rebate contact: www.climatechangecentral.com or call 1 800 537 7202 Home Renovation Tax Credit (National) - too late to commission new work but useful if you have had work done in the eligible timeframe.
Note: Homeowners participating in the ecoENERGY Retrofit – Homes program are eligible to receive the temporary Home Renovation Tax Credit (HRTC) in addition to the ecoENERGY Retrofit – Homes grant for some of the improvements made. More information on the HRTC is available at http://www.actionplan.gc.ca. The HRTC is only available for the 2009 tax year and applies to the total eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350 [($10,000 - $1,000) x 15%].
Keep all receipts, invoices and agreements. These should include a description of the goods and services purchased, date of purchase, who the contractor was, proof of payment.
Examples of HRTC Eligible Expenditures
- Renovating a kitchen, bathroom, or basement
- New carpet or hardwood floors
- Building an addition, deck, fence or retaining wall
- A new furnace or water heater
- Painting the interior or exterior of a house
- Resurfacing a driveway
- Laying new sod
The following expenses will not be eligible for the HRTC:
- Furniture, household appliances, and electronic home-entertainment devices
- Purchasing of tools
- Carpet cleaning
- House cleaning
- Maintenance contracts (e.g., furnace cleaning, snow removal, lawn care, and pool cleaning)
- Financing costs
- Amounts paid as part of the purchase of your new house, including "upgrades"
- Expenses to acquire goods that have been previously used or leased by you or an eligible family member (e.g., hot water tank)
- Expenses incurred with respect to the parts of an eligible dwelling used for income generating purposes (see question 19 for additional details)
Note: The credit is based on eligible expenses for work performed or goods acquired after January 27, 2009, and before February 1, 2010.
Eligible expenses for goods acquired during this period, even if they are installed after January 2010, will still qualify. If an eligible expense involves work performed by a contractor or a third party, and the work is not completed by the end of the eligible period, only the portion that is completed before February 1, 2010 will qualify even if a payment is made. Expenses incurred pursuant to an agreement that was entered into before January 28, 2009, will not be eligible for the credit.
How To Claim:
A new schedule will be included in your 2009 tax package to allow you to list your eligible expenses and to calculate the amount you can claim. Also, a new line will be added to Schedule 1 to claim the HRTC.
If you are filing a paper return, do not include your receipts or documents supporting your claim. Keep them in case they are requested. You must however attach the new HRTC schedule to your paper return.
Canadian Mortgage and Housing Corporation:
There are some grants available through CMHC up to $25 000 to put in a rental suite and it varies from city to city across Canada. Alberta has some generous grants available as well. Some provided through a secondary suites program and some through affordable housing. These grants range from $5000-$25000 depending on where your house is in the province.
There are benefits and setbacks to most of these grants (Guidelines and commitments). There are better programs out there for landlords that prove to be more useful and come in handy when needed the most.
If your tenant has problems paying the rent there are some fairly reliable programs to ensure that the landlord gets the lost rent back. This interests a lot of landlords! Lots to talk about on this topic.
Residential Rehabilitation Assistance Program (RRAP) — Conversion
Canada Mortgage and Housing Corporation (CMHC) through RRAP-C assists in the creation of affordable housing for low-income households by providing financial assistance to convert non-residential properties into affordable, self-contained rental housing units or bed-units.
Who Can Apply?
Eligible clients are private entrepreneurs, non-profit corporations and co-operatives owning and converting non-residential properties to create bona fide affordable rental accommodation.
Eligibility is limited to properties that are environmentally safe, that can feasibly be converted to residential accommodation, and that will be viable based on agreed post-conversion rents.
Selected clients must enter into an Operating Agreement which establishes the rents that can be charged during the life of the Agreement. A ceiling is also placed on the income of households that can occupy the newly created self-contained units.
Eligible Projects
Only work related to the conversion and rehabilitation of non-residential properties for the creation of residential units and bed-units is eligible for assistance. Up to 100 per cent of the eligible cost of conversion up to the maximum loan amount is eligible for assistance. The costs above the maximum RRAP loan must be borne by the owner.
Any work carried out before RRAP loan is approved in writing is not eligible. The required Environmental Site Assessments are not eligible for funding under this program. http://www.cmhc-schl.gc.ca/en/co/prfinas/prfinas_008.cfm To find out how to apply for financial assistance or for more information about these programs please call CMHC toll free at 1-800-668-2642.
Kira Vermond's book, "Earn, Spend, Save", includes a six-month plan that lays out what to tackle first so that readers feel confident about managing their money. The 6-Month Plan: 1. Lay the foundation: Ask yourself the tough questions in order to get an accurate picture of your current situation. 2. Track it down: Keep track of your spending habits over a couple of weeks to discover where your money is going. 3. Make a change: Evaluate your spending from last month and come up wth goals for saving. 4. Save for life: Start tucking away funds for the future by signing up for automatic payments and beginning at your own pace. 5. Plan for emergencies: Start an emergency fund for a rainy day (about 3 to 6 months' worth of living expenses); get in the habit of regular deposits weekly, biweekly or monthly. 6. Almost done: Keep your new habits up-to-date by checking in on debt regularly, keep current on new rules and regulations by bookmarking your favorite money sites and talk about money with your family or money group.
1.What is the purpose of life insurance?
Life Insurance is an important consideration for anyone with responsibilities. Insurance can play an important role in the development of the defensive part of your financial plan. It can help alleviate financial burdens In the event that someone passes away.
Funds paid out by an insurance policy can negate adverse financial consequences caused by the death of the Life Assured.
2.I have insurance coverage through work. Why would I need any other insurance?
Group life insurance is an excellent benefit; the only downside is that the insurance is temporary. Group insurance is only effect while you are employed with the company that owns the group plan. You can convert the group insurance to an individual plan usually within 60 days that you leave a company group plan without any medical questions. The amount will be limited as it is usually based on your annual salary.
Great financial planning is to be sure you have enough personal coverage for the future. Group is best treated as a bonus.
3.What types of insurance are there?
Term insurance is designed to provide you with insurance for a set period of time, at an affordable price. The most common types of term insurance are 10 year term and 20 year term. With these types of insurance you pay a level premium for 10 or 20 years and then the premium increases. Term policies are typically best for people who don’t have permanent insurance needs.
Permanent insurance is designed to provide insurance protection for your entire lifetime. With permanent insurance it is important to note that your insurance premiums never change. They stay the same over the lifetime of the policy. This means that compared to a term policy, your premiums will be much more expensive in the early years, but much less expensive over the lifetime of the policy.
Universal life insurance combines insurance and investments. The benefit of investing within a life insurance policy is that the interest you earn on your money grows tax deferred. Also, when the life insured passes away, that money can be passed on to the beneficiary tax free. There are also a variety of options that you can invest in within a universal life policy, depending on your needs.
It is best to meet an advisor to go through an in depth but easy to understand process to help you select what type of life insurance will be right for you.
4.Who should I talk to about purchasing insurance?
Any one insurance company does not have products to fit everyone. A Financial Advisor who is contracted with different insurance products can find a solution that fits your situation once they go through an in depth but easy to understand process.
5.How much insurance should I have?
There is no simple answer to this question. Rarely do two people have the same amount of coverage due to varying situations (debt coverage, estate taxes, income replacement, etc.) that need to be covered. To receive the best answer it is best to meet with a Financial Advisor to go through an in depth analysis to find the right number.
5 Tips for Effective Allowance
1. Empower Your Child:
Kids don’t learn how to swim from the pool deck. They have to get in the water: first the shallow-end, then the deep-end. It’s no different with money. Managing money requires personal experience, decision making, and lots of practice. Yet we parent’s are so reluctant to let our kids practice with real money. What a waste we think! But it’s better our kids learn from their little “mistakes” today - when dollar amounts and consequences are low - than much larger ones later. Truth is, when kids spend their own money and not ours, they get thoughtful – and fast.
2. Keep it Balanced: My kids’ personalities amaze me: they hear the same lectures, go to the same schools, eat the same mac and cheese, but their money styles couldn’t be more different! Of the older three kids, one is a spender, the second a saver, and the third can’t wait to give her money away. Is one better than the other? Not really. While we all want to raise a saver, saving to the point of hoarding is just not healthy. A focus on money for its own sake makes us small and petty. Of course, it’s not good to overspend or to be completely selfless either. Responsible money management requires balance and a respect for money.
Here’s a solution: allot a portion of every dollar your child earns to three jars: one for saving, the other two for spending and sharing. Emphasize your family’s unique financial values with the allocations you choose: for example, 50% to the save jar, 40% to the spend jar, and 10% to the share jar. This, of course, can be implemented on ThreeJars.com in a very easy and manageable way for both parents and kids. As your children get older and healthy patterns have been established, increase the spend allocation to teach budgeting. Your kids will thank you in the long-run.
3. Be Consistent:
I don’t know if there is anything more difficult as a parent than consistency. When it comes to allowance – it’s doubly important. How can we ask our kids to be consistently responsible with money when we can’t even be consistent with its payment? Three dollars may seem trite to an adult, but to a young child, it’s their source of independent income! If we want our kids to have better money habits, we must give allowance the proper respect and attention it deserves.
4. How much Allowance? Consider the age of your child, your expectations of what the allowance will be used for, and what your family budget can afford. Before high school, kids are often paid their age or ½ their age in dollars per week.
But don’t focus too much on amount though. Even very small allowances, paid consistently over time, add up to more than our kids could imagine. In fact, that’s the real secret to easy riches: to consistently set-aside small amounts of money over a very long period of time, ideally in safe, tax deferred investments.
If it’s so easy, why isn’t everyone rich? Because few learned healthy financial habits when they were most open to learning them - at a young age. Studies show kids are more responsive to financial concepts in grade school, before negative habits have taken root and peer pressure is strong. So the right answer to how much allowance is … something - really.
5. Should Allowance be Tied to Chores? Of the thirteen million families in America that pay allowance, roughly half believe allowance should be tied to chores. The thinking goes: kids need to earn their allowance because that’s how real life works. No free lunch! The other half believe, that since mom and dad don’t get paid for all the chores they do, why should the kids?In my mind, we are doing our kids - and eventually ourselves - a disservice by connecting the two. Allowance and chores are two completely separate issues. When it comes to chores tell the kids everybody has to help out – it’s a family rule. Whoever lives in the house has to help manage the home. In our household, we do not use money to ensure beds are made and the trash is taken out. Losing TV, internet, or cell phone privileges is much more effective. Remember, the role of allowance is to help our kids develop the skills they need to responsibly use money and comfortably respect it, before leaving the family nest. Practicing money is too important an issue on its own to gum-up with chores. Consider implementing an effective allowance system in your family. You’ll be thankful in the long-run.
1. Ethical business involves not just business practices but the endeavour itself must have an ethical foundation. 2. Ethical development practices includes sustainability, the three pillars of which are: Environment, Economics and Social Equity. Although there is considerable material on ethical environmental practices, there is still some debate in regard to practical application. The matter of social equity and economics as they pertain to community building are more difficult to define and apply. 3. When looking at the three pillars of sustainability, a good way to make specific application of these principles is to understand the interests of the stake holder groups that are affected. For example, in development typically the five stakeholder groups are: the investors, the regulators, politicians, the existing community and finally the marketplace. In order for a development to be successful as an ethical endeavour all of the stakeholder groups must find benefit in the finals value proposition of the development. In community for example, this would involve public consolation to understand from the community's perspective, heritage, culture, needs in terms of services, recreation and employment, concerns about how to manage resources and growth and of course education is one of the most important investment for our future. From this, localized principles of economy and social equity can be developed. A local sustainability charter can then be developed that includes regulatory, industry best practices as well as community concerns. 4. The most successful developments and the most difficult to replicate generally are those that are the most authentic. This means fully understanding the marketplace, the land and the community in which the development it to be built. 5. Ethical investments in real estate development are those that are founded on these principles of sustainability and applied locally understanding the stakeholder groups that are affected. It of course also involves, simply put, the ethics of those who carry the vision and business ethics into the execution of the endeavour.
If you’re considering buying Flow Through Shares we recommend some of the same questions we use to evaluate any investment:
Alberta Securities Investment Fraud Fact Sheet
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