Want kids some day? What if not every toddler is born equal and that there is a secret formula for making elite babies? I apologize in advance because the point of this post is to try and use probability to potentially give our future offspring a competitive advantage in life over their peers, and by the nature of the subject some parts of this article may contain offensive stereotypes or racism.

The Birth Date Effect
The University of BC published a study that shows January and February babies are almost twice as likely to become CEOs than those who are born later in the year. The study investigated the birth-date effect in a sample of 375 CEOs from S&P 500 companies. Older students born earlier in the year are singled out as leaders throughout their school life and tend to do better than the youngest, who might be less developed. This Relative Age effect (RAE) is well documented in the world of sports as well. In an elite hockey team the best 40% of the players will likely be born between January and March. Early success is often rewarded with leadership roles and enriched learning opportunities, leading to future advantages that are magnified throughout life Even the BBC believes there is evidence that children born in the Summer months suffer in school.

The Mixed Race Effect
Some studies suggest mixed-race people are more attractive and disproportionately successful in many professions. According to Darwin’s hypothesis on heterosis, crossbreeding leads to offspring that are genetically fitter than their parents. Although mixed-race people make up a small proportion of the population, they are over-represented at the top level of a number of meritocratic professions. Halle Berry, Keanu Reeves (quarter Chinese,) Lewis Hamilton, Tiger Woods, Steve Jobs (half Arab), Just to name a few.  Not sure why I and many of my friends find mixed-race people attractive but studies suggest that good looking people do in fact earn more money.

The Name Effect
Are some names more successful than others? Apparently yes according to the online job site TheLadders which analyzed the first names of their 6 million members against variables such as industry, salary level, and location. They found that people with shorter names make more money than those with longer ones. The top 10, highest-paid, executive names earn, on average, 10%more than other names. And unusual names such as Apple or Moonbeam and names that sound African American such as Tyronne and Jamal were not viewed as positively compared to more common names like John and Susan. They tested 24 pairs of similar names like Steve and Stephen, Bill and William, Sara and Sarah, etc, and in all but one case those with shorter names earned higher pay. They’ve concluded that every extra letter in a person’s first name may reduce his or her annual salary by $3,600. They’ve even identified the top 5 highest paid female and male names in their study.
Female names: Lynn, Melissa, Cathy, Dana, Christine
Male names: Tom, Rob, Dale, Doug, Wayne
This isn’t the first study of its kind either. In 2011, LinkedIn reported that American CEOs do often have short names, or nicknames like Peter, Jack or Tony.

So to ensure that our children will have the best possible start in life we just have to find a partner of a different ethnicity than ourselves, get really frisky in April and May (゜o゜), and name our kids something like Cathy or Rob Then statistically our kids would have a better chance than most others to be top in their class, better leaders, more athletic, and make 6 figure incomes And now you know the secret to making elite babies :0) As responsible and loving parents-to-be shouldn’t we do our best to give our future children gorgeous looks, and the highest probability for success? (^_^)

I don’t mean to imply that one group of people is superior to another, or that attractive people don’t have to work hard for their success, or that Moonbeam is a dumb name. These studies could simply be statistical realities and NOT factors of causality.  And it goes without saying that attitude, education, temperament, and work ethic will effect one’s life much more than how one is born. But unlike those other factors which are dependent on upbringing, the initial circumstances of how one is brought into this world can never be changed, (except names can be legally changed I suppose)

I don’t believe the results of the studies are conclusive, but if there is even a slight truth to their findings then it’s something interesting to think about isn’t it? I’ll have to remember these points when I have the “baby talk” with my future spouse

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

There’s a sitcom on CBS called 2 Broke Girls. It’s the story about Max and Caroline who are both poor and work at a diner in Brooklyn, New York. Despite their financial circumstance they want to start their own cupcake business (゜∀゜) Their plan is to save $250,000 and open up their own cupcake store one day.

Spoiler alert if you haven’t watched it already but in last week’s episode they discovered an old, hidden storage room in the back of the diner which nobody knew about before. Caroline said “Uhg. It’s so humid and damp in here. Now I know how balls feel”  The restaurant manager was about to hire a cleaning company but then Max suggested that she and Caroline could clean the derelict room instead since they could use the extra cash. The manager agreed to pay them $600. In the middle of steam cleaning they discovered the room had some shutters which opened up to the street outside. And Eureka the girls realized this would be the perfect place for them to set up a small cupcake walk-up window, literally a window of opportunity (^_^) This would surely bring them one step closer to success.

There are a couple of financial lessons we can learn from this episode. Even undesirable work can lead to great opportunity, and if we start from the bottom then there’s no way to go but up  Sometimes I feel sympathy for these two girls. Caroline uses free napkins as coffee filters, and in an earlier episode Max experienced sushi for the first time in her life. They work so hard for low wages, and sacrifice so much for their dream of eventually opening up a business together. I think we can all learn something from these two characters I watch the show because it inspires me to work hard, use my financial resources wisely, and keep me focused on my own goals :0)

————————————————————————
Random Useless Fact: More than 8,000 French households’ tax bills topped 100 percent of their income in 2012.

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

The Canadian Real Estate Association recently announced that national home sales pretty much stayed the same in April. Compared to last year’s April activities, sales were 3.1% lower this year. However, the average sale price rose by 1.3% over the same time led by gains in Calgary, and parts of Ontario. The national average price for homes is now $380,588. Overall CREA maintains that the Canadian housing market remains firmly in balanced territory.

I believe real estate can be a great investment. It’s not often we hear about someone losing money consistently, long term by investing in (not flipping) homes in North America. Even in the US, despite the housing collapse in 2007/2008 average prices are now back to their mid 2003 levels. Not to mention the potential to generate rental income from them. One way to invest in real estate without a lot of money is through REITs. For people who want to buy property directly but perhaps think their city is too expensive then another option is to shop cross country or even cross border. Many investors in BC and ON for example are buying homes in AB and SK because the rental rate relative to purchase price makes more for sense for cash flow reasons.

According to a BMO study, more than 500,000 Canadians now own property in Florida. Wow, half a million. That’s like 1 in every 70 Canadians, almost hard to believe. Go Canada! We saw an investment opportunity in 2010 and 2011 and bought when prices were low. So far it seems to be paying off for us. Over the last couple of years (since April 2011) single family homes in Florida has climbed 12%. While Canadians accounted for almost 40% of all real estate purchases in Florida in 2010, we are now facing stiff competition from Asian buyers and domestic investment companies that have been scooping up hundreds of Florida’s remaining distressed properties in the last year or two.

————————————————————————
Random Useless Fact: Butterflies taste with their feet. Taste receptors on a butterfly’s feet help it locate dissolved sugars like fermenting fruit and other food sources.

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

To become rich we should try to maximize our earnings and minimize our expenses. Here are two simple ways to do it by adapting.

First, on the earnings side, we can take advantage of unfair market forces to increase our investment potential. For example Canada’s telecommunication sector is an oligopoly with over 90% of the wireless market owned by just 3 companies, and they have quite a lot of political influence. According to J.D. Power and Associates, Canadians are spending 13% more on their cell phone bills now than last year. But that’s okay. Less competition and higher prices for consumers also mean higher profits for those wireless companies Over the years I have learned about the anti-competitive wireless landscape in Canada and have slowly bought stocks in all 3 major tel-cos, Bell (BCE), Telus (T), and Rogers (RCI.B) All 3 stocks have outperformed the S&P/TSX Composite for the last 1 year, 5 year, and 10 year periods Even if I don’t like to invest in tele-com businesses in general like Vodaphone or Verizon from other countries, I would still make it a priority as a Canadian to have some exposure in Canadian tele-com stocks because they are given a competitive advantage in this country. Non Canadian investors however may not receive the same preferential tax treatment on dividends and capital gains from these companies so you should adapt your investment strategy based on where YOU live.

And second, on the spending side we can save money by adapting our shopping habits to where we live. For example I enjoy both dairy products and seafood. Relatively speaking Canada has expensive cheese, and other dairy goods, but we have pretty affordable seafood (especially near the coasts.) So whenever I want to treat myself to something fancy I usually favor seafood over dairy. In Canada, eggs, chicken and dairy aren’t sold like most goods. Competition is kept out. Tariffs on imports can be more than 200%. A $10 French cheese will be hit with a $24.50 duty for example. Exports are restricted because they’re subsidized. Again this means higher prices for consumers. I still eat cheese occasionally but it’s not a big part of my diet because I can find better value from other products. On the other hand, I do eat a lot of summer produce from the Okanagan Valley, spot prawns, sushi, and other locally sourced foods that are cheap and delicious  

If I lived in the US I would probably eat more cheese, but would consume less maple syrup. If I lived in France, a larger part of my diet would probably be wine because of how cheap and plentiful it is there. By adapting our shopping tendencies to our surroundings we can choose what we want and still maintain our standard of living without spending more than we have to

Financial acumen requires the ability to adapt to change Every country will be different. By using the investment opportunities that are specific to a jurisdiction, and by being mindful of what we buy relative to our surroundings, we could greatly enhance the returns on our investments while being cleverly frugal at the same time, creating more savings for our pockets, hurray! (^_^)

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

Hope everyone is having a great weekend. Let’s look at some current business and economic news.

Electric Power – Consumer Reports recently reviewed the 2013 Tesla Model S, and claimed it was the best car they’ve ever reviewed. Not the best electric car, but the best car, period – Giving the vehicle 99 out of 100 points. Around the same time Tesla announced it was profitable for the first time in its history. If you are a fan of electric cars then $80,000 would get you the award winning sedan in Canada, $70,000 in the US. I hear it comes delivered straight to your home.

$TSLA shareholders must be ecstatic as the publicly traded company’s stock price jumped up 25% in one day after the news on Thursday. Some people believed the stock would level off after that or even pull back a little, but on Friday its stocks gained another 10%. It is currently trading at $76.76/share, which puts the company at $8.8 billion market cap. Is Tesla Motors a good investment now?  I don’t know. It’s hard for me to value a company if it doesn’t have a long record of profitability. Plus I don’t understand the auto business very well. So I won’t be buying into the rally, but will keep an eye on this company with interest Do you think Tesla will be a good long term investment?

Right on Target – US retailer Target has finally started to open up stores in Western Canada. I haven’t been to any yet but I’ve heard the one in Coquitlam Center which has just opened its doors will be very busy. I plan to visit a local Target soon and check it out for myself. It’s important to me that Target succeeds in Canada because one of the reasons I invested in them earlier this year is because I believe Canadian shoppers will give $TGT a lot more business than analysts are expecting Hurray for consumerism! Go Target

Fund Update – I sold about $5K of stocks in May so far. I also received that nice check last week from my tenant. I now have about $9K saved up for my $25K farmland fund. Just need to come up with $16K more. I think it’s doable

————————————————
Blog roundup – Personal finance and other interesting articles from around the web
Not Working shares his May net worth which is an all time high.
Outlier Model reminds us how poor and misrepresentative some journalism can be
Blonde on a Budget finally moved to the Greater Vancouver Area, welcome :0)
Evolving Personal Finance debates about outsourcing home cleaning
Alex from Freedom I.G. discusses sectors he sees attractive value in like energy and financials
Frugal Rules discusses internet sales tax and shares some interesting search terms
Makingsenseofcents talks about how she makes money by writing online
Vix Money shares her April budget, hey better late than never :0)
Marissa from Thirtysixmonths has a way to make budgets easier to stick to
Seapotato shares some pictures she took at a seafood event. She got to meet David Suzuki :0) #jealous
Red Debt Step Child admits she used to spend like a baller
Reach Financial Independence explains why she upgraded to a paid bank account
Canadianbudgetbinder shares his family net worth. They’re really good at paying down their debt :0) Awesome job
Debt Roundup has a tip on how to save money

————————————————————————
Random Useless Fact: A group of pugs is called a grumble

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

Last month when I increased my farm’s value, I wrote that it was ”the easiest $2,500 I’ve ever made.” I just held onto an investment and the market did the rest :0) By the end of April I was so ecstatic to find my net worth has climbed by $5,200 in just one month Well just when it looked like things couldn’t get any better for me look what I received in the mail last week.

Remember how last year I mentioned I had rented my land out to a farmer? Well hopefully this is the first of many more payments I’ll receive in the years to come So this must be how it feels to be a landlord haha (*^.^*) I deposited the check into my bank account last week and this money is going directly towards the $25,000 fund to buy my second farm  My stock investing provided me with dividends which I saved up to buy my first farm, and now I’m using the returns on that farm to buy even more assets which will give me even more income :0) Isn’t investing so much fun? It doesn’t matter what kind of economic background we come from, we can always create a better future for ourselves by making the right investments today \(^_^)/

———————————————————————

I know some of you may want to buy a farm as well but have questions about renting it out. So here are some FAQs that I often get from readers about renting farmland and what to consider.

Q: How do you find a tenant?

A:  There are lots of farmers eager to find more land to expand their grain production but a good parcel of land goes for at least $150,000 and many of them can’t afford it. So they choose to rent instead at about $5,000 or $6,000 a year for the same quality land. This gives them a more economically viable way to use the land for one crop cycle and still capitalize on the full extent of their labor. Depending on what they decide to grow, a full harvest can be sold for $30,000 to $60,000 at current commodity prices. After all expenses, including rent, farmers can still expect to make at least $20,000 of profit on the parcel, depending on the scale of their operations. Farming equipment is very costly. A combine alone costs $300,000. So for farmers who already have the necessary equipment to work, they want to maximize their opportunity to farm on as much land as possible. This is the main driver of the rental market in the farmland business.

Since agricultural land is a coveted resource most farmland in Saskatchewan should already have people working on them. This is good news for owners and recent landlords like myself. The farm I bought last year already had a tenant who agreed to continue farming on the same land for another 2 years. So we signed a contract that expires end of next year (2014) Sometimes people who want to sell their land are farming on it themselves. A common situation in this case is the seller will rent back the farm from the buyer because maybe the seller needs $150,000 to buy a new tractor to expand his operations. Another reason could be that a farmer is thinking about retiring in 5 to 10 years. By selling his land he can raise some money for his retirement nest egg, and reduce his financial risk because he’d have less exposure to the fluctuations of farmland prices. It also gives him more flexibility by renting, and doesn’t tie up all his money in one asset.

In a situation where there is currently no one working on the farm you can ask the people whom you’re purchasing the land from for leads. Realtors often know lots of farmers in the area who are looking for available soil to grow their operations. The seller of the land which I’m currently in the middle of buying now told me on the phone that if I can’t find a suitable renter he knows some friends who will be happy to rent from me. Of course you could always post ads in local newspapers, or the rural municipality office, or on sites like Craigslist or Kijiji, or use services like Renterra which helps farm owners and tenants find each other. In most cases, finding a farmer is not difficult, especially with the help of modern technology. I have never met my tenant in person, but we keep in touch through emails and phone calls

Q: What kind of returns can you expect from rent?

A: For simple cash rent the returns are usually between 3% to 4% of the purchase price. For example, in most cases a $100,000 quarter of land can be rented for $3,000 on the low side, and $4,000 on the high side. In special situations like in very wet areas the rent could be $2,000 or lower. And if the land is fairly close to a grain factory or oil seed crushing plant or near the prospective tenant’s other operations, the rent could be as high as $5,000 per year, so it depends. The returns on farmland from cash rent used to be a more lucrative 5% several years ago. But over the last 3 years the average farmland price in Saskatchewan has increased by almost 50% while the rental rates have not yet caught up. This is good news for landlords because it gives them more power to raise rents in the future to narrow the gap between price vs rent.

The return on my own farm is about 3.4% of my purchase price last year. Which is more like 3% after subtracting the $500 annual property tax. The rent and cash flow for farmland is generally not as profitable as a residential investment like a condo or a house. However farmland owners receive the benefit of less work and stress to maintain their properties. For example, I don’t need to dread getting a call at night to fix the plumbing. Don’t have to worry about costly special assessments, replacing a roof, damage to property or any insurance needs. No worries about natural disasters or burglars either. Crops can be stolen or destroyed by locusts, but it’s usually the tenant’s responsibility to buy insurance for that. Farmland delivers the most passive income of any direct real estate investment that I can think of today. Perfect for lazy investors like myself lol. Rental income on a farm may not be as high as an equally priced residential home, but I think the cost savings over the long run and less hassle make up for it.

Cash rent is the most hands off and least risky way to invest in farmland and that’s what I’m currently doing. But some farm owners may prefer other methods (such as crop sharing or custom farming) which has the potential to make a 10% return or greater on the purchase price. For more info about different ways to profit from a farm check out the second and third paragraphs from my farmland investing page.

Q: What are the risks of being a farm landlord

A: With my limited experience I can say so far the biggest risk appears to be if you can’t find anyone to rent your land and miss out on rental income. But since average Canadian farmland prices appreciated by 19% last year in 2012, and 15% the year before that, most of the financial benefits that owners have been getting over the last several years have been through increased property value. So losing out on rent that represents a 4% return isn’t going to be a deal breaker. But it’s still important to remember that rent is real money in your pockets, while capital appreciation is just paper money, until it’s realized some day. Leaving the land unused for a year or two isn’t going to hurt the farm either. In fact, it could actually be a good thing. More on that later. However, don’t leave your farm dormant for more than a few years as it would be costly to clean it up before it’s ready to be farmed on again If you are sharing the revenue with the tenant on the grains produced rather than direct cash rent then you may risk having a poor crop year (eg: due to flooding) and not receive much income. Lastly if you bought the farm with a loan, make sure you can make the minimum loan payments even if you didn’t have rental income just in case.

Q: What determines the rental rate?

A: Real estate is all about the location and farmland is no exception. Rates are generally defined by a price per cultivated acre ($/ca) which is negotiated between the landlord and tenant. Many factors can affect this rate like soil quality, access to roads, amount of lakes and ponds, etc. Lower end farms which only have the capacity to grow grass will usually be rented to ranchers for $20/ca. But higher quality farms with better dirt that can produce cereal can be rented to grain farmers for $50/ca or more. That’s why grain farms are often 2 to 3 times more expensive to buy than pasture for grazing.

So how do you know what to charge for rent? The best way is to find out what your neighbors are charging and ask for a similar rate. If you don’t have that information then according to this FCC video, the general rule of thumb appears to be roughly 20% of the gross revenue of farms in that area. For example, if farmers took all the crops they produced in one acre of land and sold them on the market for $200, then the rent they should pay is $40/ca to use that land. This is only a guideline however because every farm and every situation is different.

Q: How is cash rent calculated?

A: Total cash rent is typically calculated as a product of the rental rate and the number of cultivated acres (ca) a farm has. So if a large parcel of land has 1000 ca and goes for $40/ca then the total rent would be $40,000 a year. Farmland units are typically broken up into half mile squares called quarters, because they have the area of 1/4 of a square mile. Each quarter is 160 acres.  It would take the average person about 35 minutes to walk around the perimeters of a quarter. It’s the equivalent distance of 2 miles, or 3.2 km.

Unlike residential agreements, farm rent is typically paid out twice a year, at least for grain farms. The first half is due in Spring when the seeds are sown, the other half is paid in the Fall during harvest season. The farm I bought last year is 1 quarter in size or 160 acres as mentioned earlier. Out of 160 acres, about 135 is cultivated, the remaining 25 acres are bushes and ponds which are not suitable for seeding. I wanted $40/ca but the tenant insisted on $35/ca so we compromised at $37.50/ca. Since I’m running my farmland like a business I need to collect GST from him. So the total comes to ($37.50 x 135 x 1.05 = $5315.62.) Half of this amount is $2657.81 hence the amount on the check above. He actually sent me both checks for the year. The other one is dated for Oct 1st, 2013. The checks came with a friendly letter too

Q: How do you collect the rent?

A: Tenants can either send landlords checks in the mail or use the internet with a service like e-Transfer. It’s really up to the two parties involved since there isn’t really a standard. There are no damage deposits when renting farms. Most tenants do pay on time. But if you have a bad tenant who didn’t pay then feel free to find another farmer. The good news is the land will still be there so the most you can lose is your rent. But if nothing was seeded for the current year then you will be able to increase the rental rate on the land next year because it has been summer fallowed. That just means the land was kept out of production for a full crop cycle to allow more moisture and nutrients to build up in the soil for the next season. Any crops seeded following this event will be more abundant and result in a better harvest. Kind of like charging up for a solar beam. It takes 2 turns, but it’s super effective lol (^_-)

Q: Where can you find rental agreement forms?

A: The Saskatchewan government has a lot of helpful information on their website about what should be included in a farmland rental agreement. I have uploaded some of their forms on my blog for reader’s convenience.

• For Cash Rent you can download this Sample Cash Lease Agreement form. It’s the same one I used with my tenant. Just need to fill in the blanks pretty straight forward.
• For Crop Share you can download this Crop Share Lease Agreement document which has examples of calculations, things to consider, and of course a sample agreement form which anyone may use.
• After the lease expires you can use this Lease Renewal agreement to extend the contract with your tenant if you wish.

Check with your own province or state as each jurisdiction may have different rules and regulations around farmland rentals.

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

Last week I went to a free info event for bloggers about how to market and brand themselves. It was organized by Connecting Bloggers and Brands. For me there are always 3 big takeaways from these kinds of events.

1) Learning. They had bright people from successful bloggers to public relation experts at corporations like Telus and Microsoft there to educate people about marketing and developing a brand. I certainly learned a lot from their presentations and panel discussions. Thanks to Telus, Canada Beef Inc, and other sponsors for making this event free to the public blogging community

2) Networking. Thanks to the dividend ninja who tweeted about this conference last month. Otherwise I wouldn’t have known about it. Met some other cool local bloggers there as well like @mashedthoughts, @seapotato, and @Vancouvervogue.

3) Swag. This event had some awesome free goodies. I felt like a kid going trick or treating again. Almost couldn’t fit everything into one bag. Telus’ brand is using critters in their ads so they were giving away red panda and cheetah plushes Other loot I acquired include a 3 month free subscription to the Globe and Mail, a “#loveCDNbeef” t-shirt, a notebook, a porcelain mug with silicone lid, a double wall iced tumbler with a straw, a BACONISTA t-shirt, an insulated cooler basket, and many more. There was also a free lunch They even had macrons! And since there were plenty of left over food I decided to take some home for dinner.

The Bloggers Brands team is traveling across Canada and holding similar events in Calgary, Regina, Winnipeg, and other cities this year. Maybe they’re coming to a location near you

————————————————————————
Random Useless Fact: If you ever need to rush somewhere, carry a fire extinguisher with you. No one will try to stop someone running with a fire extinguisher.

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)

April was a pretty eventful month financially. Gold had a big correction but has regained some of its loss now. Many companies which I own shares in such as Apple and Suncor reported their quarterly earnings. Most were good news  Precious metals and other commodities were cheaper in April due to slower than anticipated growth in Asia. Canada’s S&P/TSX Composite index fell about 2% but the S&P500 in the US gained about 2%. Part of the reason why my portfolio didn’t do worse is because over $50K of my stocks are US companies I love investing in Canada, but it’s important to diversify.

I also did my income taxes and received a nice tax return of just under $1K. This is thanks to the large sum of RRSP contribution I made last year (about $10K.) Thank you CRA I will use this money wisely by not spending it on expensive souvenirs like I did last month.

But the biggest impact to my net worth in April was when I found out that farmland in Saskatchewan grew by nearly 20% last year and increased the value of my farm by $2,500. I love investing in stocks, but again, diversification is paramount  :D

——————————————————–

*Side Income:

• Eating Out = $100
• Others = $2,400 (bought a silver coin)

Contents from freedom 35 blog. (www.freedomthirtyfiveblog.com)