ROBERT LEITCH

VPD 2012 Dog Squad Calendar

2012-01-09T16:16:00.000-08:00

Steve and myself joined the West End Coal Harbour Community Police Center in October in hopes of being more involved in the community. We have been busy out on the streets, and you may even have seen us doing our foot patrols weekly and during Hallowe’en and Christmas. Being involved with the Vancouver Police Department is a great opportunity to improve our skills and is a sense of pride to help keep the community safe.

In early November, we participated with the annual Dog Squad Calendar. This was the third year for the calendar that was funded by the Candy Anfield Memorial Foundation in which all the proceeds went to the BC Cancer Foundation and the BC Children’s Hospital. We had a great response on the street, as we got up early and made our way down to Burrard & Robson where we stood on the corners and sold the calendars during the morning rush.

It was a great experience as we talked to a lot of people on their way to work and got them to even tell their co-workers to come down and get one too! And they did. It was amazing how the public responded so well to the calendars that we sold out in just a couple of hours. And we even had a couple of dogs from the calendar in attendance, which their barking echoed off the neighboring buildings which added more attention to our cause. We had a chance to pet a couple of those dogs, Koal and Nash. They were a little excited and at times and looked aggressive as one might expect being a police dog, but they also loved the attention

As we look ahead, there are many events planned in the West End and we hope to be a part of many of those. The Community Police Center is an important part of the community as people have told us on several occasions that our patrols help to deter more crimes in the neighborhood. We would encourage others in the community to come down and volunteer as well. For us, it is been a rewarding experience to work with the staff and other dedicated volunteers. We look forward to seeing residents of the West End and Coal Harbour in the months ahead.

LEST WE NEVER FORGET

2011-11-11T06:14:00.001-08:00

(Nov 11/2011) Today is Remembrance Day in Canada, a day that we remember our veterans in the world wars and a day to never forget the pain and sorrow of war. A day to never forget. I want to share with a famous war memorial poem that was written by John Mccrae who was a Lieutenant Colonel in World War II who composed the poem on the battlefield in Ypres, Belgium. McCrae's close friend died by the the Germans. As he wrote the poem that morning the poppies were blowing across the field and he added it to his poem to give a description of what he saw. Here is his poem In Flanders Field:

In Flanders field the poppie blow
Between the crosses, row on row,
That mark out place: and in the sky
The larks still bravely singing fly
Scarce heard amid the guns below.

We are the dead: Short days ago,
We lived, felt dawn, saw sunset glow,
Loved and were loved: and now we lie
In Flanders fields!

Take up our quarrel with the foe
To you, from failing hands, we throw
The torch: be yours to hold it high
If ye break faith with us who die,
We shall not sleep, though poppies grow
In Flanders fields.

Halloween

2011-10-31T08:33:00.000-07:00

Today (October 31st) is Halloween so I thought that it was time to look at the history of the day and its significance. The word Halloween actually came from the Scottish in the 16th Century that basically meant the night before (Oct 31st) All Hallows or All Saints Day which is November 1st. All Hallows is Old English and All Saints day is a Christian holy feast day. Most of us today just see Halloween as another day celebrated where the pumpkins are carved and the kids go out and get candy. Halloween isn't celebrated around the world but its influence has spread to many countries over the years.Halloween has origins that date back to the Celtic festival of Samhain which is Old Irish that means "summers end." Some historians also believe the Romans had a similiar day that celebrated the "festival of the dead." It was the time of year when the crops are taken off the fields and preparation begins for the winter. But with the big harvest moon,bonfires and the sky getting darker earlier adds a sense of magic and supernatural touch. Over time more symbols of the day became known with the carving of Pumpkins in North America, while in Scotland and Ireland they used turnips where early traditions began. No matter where in the world, these carvings were lanterns that is a way of remembering any souls held in purgatory. Since black and orange are the colors of Halloween the images of horror, the occult and evil abound with literature and movies that add to the atmosphere of being scared on this night.

Children dress up in costumes and go door to door. In Scotland they called this guising where the child would go door to door with there turnip lanterns and perform a trick like a song, dance or tell a ghost story in exchange for food or coins. In North America we call it trick or treating which kids go door to door and ask the question trick or treat? The trick unlike the Celtic times, today meant that the child would perform mischief on the homeowner if a treat wasn't given. The practise of begging door to door for treats dates back to the Middle Ages and resembles the medieval practice of souling.

Unfortunately Halloween is also become a safety issue as children that go door to door occasionally find fruit laced with razor blades and other candy not edible. Like every holiday or tradition you have those out in the world that are against it and like to cause trouble. As well with lots of traffic in these modern days, costumes should be worn with bright colors so drivers can see you. But if you take precautions you can be safe.

Enjoy your Halloween and be safe!

Tim Horton's

2011-09-25T10:36:00.000-07:00

Tim Horton's is a quick-service restaurant with 3,189 locations in Canada and 622 in the United States that serves premium coffee, flavoured cappuccinos, specialty teas, baked goods, home style soups and fresh sandwiches. The company has 99.6% of its restaurants are franchised and company owned locations provide training and product development.

Tim Horton's is an iconic brand in Canada and often referred to as "Timmy's" with their coffee that has become legendary with a fresh pot within 20 minutes of being brewed or it is not served at all. Timmy's focus in on top quality products that are always fresh and prepared in each restaurant. The first restaurant opened in Hamilton, Ontario (Canada) in 1964 and has grown to the fourth largest publicly traded quick service restaurant in North America.

Tim Horton's started trading shares on March 24, 2006 with an opening price of $27 Canadian and $23.162 US on the Toronto Stock Exchange as well the New York Stock Exchange traded under the symbol THI. The company became a publicly traded company on September 28, 2009. The company does pay out dividends up to 30-35% of annual prior-year net income quarterly.

In my opinion Tim Horton's is a definite buy in any portfolio. If you visit any location you will find happy loyal customers with clean restaurants that only means continued sales. As well there product development keeps up with the demand with new products offered frequently that keeps customers coming back to try something new. The company has a great reputation in Canada and has been emerging into the US in the Northeast and Midwest so there is lots of potential growth.

Middle Aged Drowning In Debt

2011-05-05T10:21:00.000-07:00

Today I read a story about a middle aged couple in Toronto (ON) that is drowning in debt from a combination of two children attending university, holding two mortgages along with a mountain of credit card debt. This couple brings home $11,376 a month in income which works out to $189,770 a year of gross income and their net worth is only $3,492! So how can that be? Well the truth is that there situation is not uncommon.

The article continues to reveal that the couple spent money foolishly by taking "fabulous vacations" by charging there credit cards and then struggling to pay the balance. The couple hired a financial planner to help them devise a 5-year financial plan. The planner suggested the husband take an early retirement from his job that would bring in a specific monthly income then take a another job to add more income. Basically increasing the husbands cash flow starting the first year and the children graduating from university will add more income in the subsequent years.

That really sounds like a great plan. However what happens when lessons have not been learned? People have a habit of only admitting defeat when they hit rock bottom then they promise to make things right. But when things get better and they get back on there feet they resort back to there old habits and they end up more in debt and in worse shape than before. At least it gives us all a lesson to learn. Control your spending!

This couple ended up in debt because they have credit. Credit is something that needs to be repaid and should not be mistaken for income. Credit is someone extending you money with a promise to repay it. So you need to plan how to spend it as well how to repay it. So if you think this way then that fabulous vacation can still be a time of your life but make it affordable. It needs to be repaid! Don't spend money you don't have. There are lots of travel deals so don't stop travelling - just travel smarter and take advantage of opportunities. As well there is always things free to do. Make a budget and keep to it. Taking a walk along the beach is free and great for that tan you've been working on.

Another mistake this couple over the years have made is not putting money away for retirement. Ok if you have no money to set aside for retirement because you are living day to day then survival is front and center. But in this example they had alot of money to set aside. Like I have said, you need to rearrange your finances for your life. So instead of those interest charges on the debt they carry - that money should have been set aside for retirement. There are preauthorized withdrawals available that it is automatically deducted from your bank account. If they thought long-term then he won't have to give up his job he likes in hopes of finding something similiar.

Record your expenses and track them month to month and really see where your money goes. Then if you don't like what you see then do something about it. Everyone makes mistakes. But with new knowledge and someone offering to help can make the most difference. Avoid getting yourself deep in debt but if you do there are always ways to get out. Just remember you need a plan and it will take time so patience is a must.

Learn To Save Money

2011-04-04T11:29:00.000-07:00

It is easier to say that we want to save money than to actual do it. There is savings somewhere in your finances that just needs to be found. But once you find it, it is harder to keep that money safe. Safe from spending it. In other words keep the money handy for emergencies, investments and any large purchases. So we need to learn how to save money. One good way is to retrain our minds to keep thinking what it is like to not have money. Not having any savings causes stress and anxiety. That is just the facts. If some event comes up and we need money and don't have it - causes stress. Not having that financial security causes anxiety. And we all know how stress affects us and our lives so let's learn to save money and save our sanity. Worry more about not having it rather than saving it.

Remember any money that you save in an investment in yourself. No one else but you and your family. So don't think that saving money is hard and you can't do it. When you went out and got that job, that pay check can also be called an investment. You invested in future money to pay bills, enjoy life and save some of it through working today. So you have already been thinking about investments. So now it is time to expand that thinking to use it start saving. If it is not being done, it is not because it is hard but rather you have chosen not to. So you may want to look at some lifestyle changes.

An immediate short-term lifestyle change is to track your expenses if you haven't already been doing it. Analyze where you spend money and find ways to save. If you are constantly eating out at restaurants then once again do you really need to eat or get some groceries that will be cheaper and last longer? Place a want or need on each purchase. Needs are expenses that need to be done whereas a want is something that you don't need right away. Learn to ask a question on every time you spend money. Do I really need this? Be honest. You are investing in yourself, so do you need that new pair of $100 shoes or save it and put towards an investment that will grow and make more money. Investment - keep spending or spend to make more money? Short-term changes can be done now so you can get your finances under control.

The lifestyle you want is the ability to know where your money goes and make changes so your happy on who gets what. If your credit card company is charging you a high interest rate, then you need to pay off that debt in a long-term goal. Most debt counsellors will tell you that you should not have any credit cards or keep a low balance. Well that works in an unrealistic world. Realistically we need credit and we need to learn how to manage it. So make a committment to pay off that debt. If it takes 5 years then so be it. That is long-term - so stick to it! Your financial plan includes a realistic long-term goal to pay off that debt. Now after that debt has been paid off, then the same amount you spent on paying it off use towards an retirement plan. You have made a lifestyle choice of paying off debt and investing in the future. You have made an investment that will grow over time. You are no longer giving money for the debt to others but rather now paying yourself. Manage your debt to save money in the long-term and feel happier.

When you have made a committment to saving money you will need to put your hard earned money somewhere. I would suggest opening a savings account if you don't have one already. Use your checking account for daily use such as household expenses, credit cards bills and mortgages. Use your savings account for investments. Once you accumulate enough money then transfer it to an investment. So you are watching your money grow in your account. This is a physical proof that you have saved money. If you already make monthly contributions to a retirement plan, have the funds withdrawn from your savings. Therefore you keep that mindset of savings are for investing in your future. So in conclusion once you find money to save work hard to keep it. Develop a new lifestyle of investing in yourself. It will not only make you feel better but also your long-term financial plan.

Needs vs Wants

2011-03-28T13:15:00.000-07:00

If you want to save money you need to be objective. This means looking at the reasons for spending money. In other words you need to ask your self this question: Do I need this or want this?

A need is something that you cannot live without. A place to live, groceries/food in your home and hydro are examples of needs. However, eating out at restaurants, extra tv channels and extreme high speed internet are examples of wants. You really could live without them. You can chose to stay home and cook a meal for the family. If you have the basic tv channels, do you really need all those movie channels that you don't have time to watch - anyway? Do you need to order movies on pay per view or video on demand? Is your regular high speed internet sufficient for your computer needs, and if so do you really need that expensive extreme internet speed?

Think of yourself as your own money manager. It is true, you control your own money and how you spend it. So distinguish whether you need to spend this and that or is it just a want. You can be creative and really analyze your life. For example your housing needs, do you really need a two bedroom place or will one bedroom apartment ok? Then look at the cost. If two bedrooms run at $900/month and a one bedroom is $750/ month in one year you will save $1,800! Yeah that much. If you are renting or own a home, then think about a roommate to share the cost. You can pay half the rent or a portion of your mortgage payment. This can give you some money savings you can put toward your retirement.

So when you look at your life attach a price tag to each want and need. If you eat out and spend $100/month that can translate into $1,200 a year. If you have a busy life and don't need the extra tv channels and internet then think about cutting back to basic services and save more money. Clothing is another area you need to look at. Many women are not going to be too happy about this, but do you really need those 20 pairs of shoes? And you can't use the excuse of each pair of shoes is for each outfit. Well , here is some fashion advice that black shoes goes with each outfit nicely. So you need to be serious about this and make the committment to save money in all areas of your life.

This also applies to any purchases. Carefully look at that purchase. Don't be sucked into buy something just because it is on sale. It will be again. Marketers use your weaknesses to sell there product. The advertisements make it look like you need this. Then you are more than likely go and buy it. So don't be fooled. These use psychology to sell there products. But remember only you know what you need and what is extra. So ask yourself if you really need it? If you just want this item can you afford it? Do you really need to get that new computer? Your current tv is working just fine, do you really need to have a new one? It is about this choice that you can start to save money. But it takes discipline to ignore those ads. You only have so much money, so its the choice of how you spend it that really will save you money.

Your Financial Goals

2011-03-21T21:20:00.001-07:00

Before you start your financial plan you need to be committed. This isn't a short-term strategy but rather a long-term that will last all your life. One of the first places to start is by asking yourself is what do I want to achieve? In other words what is my goal? We all have them so just sit down and think about them.

A goal is something you want to achieve. It can as simple as paying off a bill, buying a car, purchasing a home or even opening a retirement savings plan. It is your goal so make it something you want to achieve. In otherwords make goals that are realistic and ones that you can achieve. Don't set yourself up for failure by making a goal that is so far out there that there is a slim chance of accomplishment. If your goal is that big then you will want to take baby steps. Especially for long-term goals you need to set up smaller goals that are easily obtainable and once completed lead to another step and eventually to your final goal. Think of it like building blocks. Set your vision on the end product and block by block start building.

There are those that think that they don't have the money to set financial goals. Well if you look at it in a negative way you are essentially setting yourself up to fail. But if you turn negative attitudes and tell yourself that you are going to make this work then that positive attitude will attract positive energy and you will find the money. Usually it is a matter of rearranging your finances. You only make so much money, so the bottom line is spend your money more wisely. Live within your means and don't use credit like it is cash because eventually you have to pay it back with interest. Are you really going then? With a high interest you are achieving someone else's financial goal! So take the initiative and save money instead of spending all of it.

To create a financial plan think of the word SMART. Specific, Measureable, Achieveable, Realistic and Timeline. Make your goal one sentence. Specifically state what you want to achieve. Can that goal be measured? Make a goal that is achieveable and one that is within your means to complete. And don't forget to input a timeline. For example: I want to pay off my credit card bill within 3 months. So ask yourself the SMART steps. What is my goal - it is pay off my credit card bill. Can I measure it? Yes by seeing that zero balance on the credit card statement. Is it achieveable? Yes you have money from your paycheck to make those payments. Make sure you have money set aside to pay that bill. Is is realistic? That depends on the balance, if you have a smaller balance it is realistic in that time period to pay it off. If it is not realistic then you may want to extend your timeline. So does the timeline fit the period you need to achieve it? If you can answer all these questions in a positive way then use that goal. If you cannot then rewrite your goal so that it is a positive step forward in your life.

You can have more than one financial goal but remember make this easy and not complicated so keep it simple. You don't want to make it where it takes all your money and you feel that you are missing out in life. Make financial goals that you can live with and feel good about. You are investing in your life. Feel good about that! Don't forget to track your progress. And once you have achieve one goal, don't stop there - continue on. Think of it like this, if I can achieve this goal then I can achieve any goal. And the truth is...you can. So don't limit yourself! Make a financial goal and achieve it.

Money Personalities

2011-03-15T10:50:00.000-07:00

There are personalities associated with the way we spend money. These include people who save excessively to the extreme of having to buy everytime they leave home. In some cases, thanks to the internet and home shopping you don't have to leave the comfort of your bed or couch. On the other side there are those personalities that spend to much time analyzing the purchase and that can be a waste of time and money. To make this even more complicated is that having a partner means they too have a money personality and it can be different than yours.

The first personality is a saver or a person who saves too much. It is good to be conscious about where you spend your money but not good if it affects your body. If all you think about is making money and work everyday to achieve that then this personality isn't good for your health. You may feel fine now but what about the future? Lack of sleep, poor eating habits and constant stress and worry will affect the body over time. The remedy is to relax and take that well deserved day off once and a while. If your spending makes you save a buck or two by going out of your way then that too isn't good. If an item is on sale at this one store and you have to drive long distance just to get it, then are you really saving money just to get that item? You end up spending more on gas to get it than the actual savings on the item. So think about how saving money affects you.

The second personality is someone who spends too much. If they don't have cash they will find another source such as credit cards. Next thing you know you have no money and maxed out on your cards. Is that really good for your finances? The problem with this personality is someone who spends until they have no money left. Then they wait for next payday and repeat the cycle. So to avoid this and have money all the time, you need to ask yourself everytime you make that purchase - do I really need it? Or just want it? There is a difference. Need means you cannot live without it. Want means you don't need it today but just want to buy it. It is about priorities. Remember you only have so much money. So you need to spend it wisely and not all at once.

If your personality is one who spends on a whim then you need to change your ways. Impulse buying is a habit. And we all know that habits are hard to break. So this won't be easy to say no to that purchase and even harder to see money sitting there. The best suggestion is to plan your purchases. Firstly have a seperate bank account for savings and make it something you don't see everyday. Then have your financial institution automatically transfer funds from your daily account to your not seen savings account. Then all you see is money for your day to day expenses. With that pay your bills and everthing that needs to be done. Then what is left over is yours to spend on whatever. This is your discretionery income or money to use at your discretion. This won't curb the habit but help you plan your finances. Then when the day comes and you look at that savings account and realize how much is in there, use that to make more money. Put it into a retirement fund or invest it and see it grow. Feel good about seeing money and limit your spending.

The fourth personality is a cautious person. This personality analyzes every purchase to the point of taking too much time in figuring it out. This could occur walking down the aisle in a store and just happen to see something interesting and then you waste time debating whether to buy it or not. You look for reasons to justify the purchase then look at your finances and how you cannot afford it. Then in the end you come up with a plan to buy it and not buy something else that you really need. Remember you only have so much money, so if you take from one hand and give to the other you are just rearranging your finances. The best advice is to make a list before shopping and stick to it. Just like you never shop for groceries when you are hungry because you end up buying more junk food to fill that craving. And if you drive around looking for that bargain, you need to ask yourself is it really worth all this effort? Saving money should be easy not hard and exciting watching it grow.

We all fit under one personality or sometimes a couple of them. The key to financial planning is to know which personality you are and find ways to make money work for you. Knowledge is everything so use it plan for your future.

Financial Reality

2011-03-06T09:47:00.000-08:00

Whether you are new to financial planning or have been financially literate all your life, you will always refer back to your financial situation and what you are doing with your money. It is not very hard to do but so many people just don't take that time to analyze what is going on. Maybe they are afraid to and don't want to see the negative outcome. If that is the case, in my opinion it is better to confront that reality than to live a life of avoidance and falling deeper into debt. Just remember that you are not the only one, even millionaires fall into a negative situation - the last economic recession is a good example. Take the first step and look at your financial situation. If you want help then email me or seek the help of your local financial planner.

Firstly begin by looking at your income - that is money that you are receiving. Calculate your total amount either on a monthly or yearly basis. If you are employed then look at your paystubs that your receive. Look at the net pay or the amount you receive after deductions. Remember financially planning is a lifetime behaviour so even if you are on pension you need to record your total amount of money you receive. Anyone on disability is also receiving income as well anyone receiving some kind of financial assistance. If you are the type of person who does not keep receipts then you will need to start as this is vital as you can refer back to them.

For those readers who have invested over the years, definitely include any investment income from businesses and rental properties. The interest earned from investments such as bonds, guaranteed investment certificates as well any capital gains from bonds or selling assets. Assets are items of value that you own such as cash, vehicles, real estate or anything with a monetary amount attached to it. Money you received from any sale is considered capital gains and income. As you can read there is many types of income so you may want to categorize them for easy reference. Calculate your total income from all sources and categories.

Secondly, how you spend that income is important. As much as we want to save money and investment we do first need to meet our financially obligations and that includes ourselves. We need to live. We need to pay our bills. These are expenses which are things we need to buy. We need to buy food, clothing, etc. as well pay the mortgage /rent, utility bills and our cellphones. So make a list of these expenses then add them up. Calculate your total expenses.

Thirdly, calculate your net income by taking your total income then subtracting your total expenses. What you spend your net income on is called your cash flow. This is the analyzing of what you do with your money. Think of net income as your dreams. If you dream of going on a great vacation well this is the place to figure out how you can afford it or save for it. If you worry about your retirement then use your net income to make contributions to a mutual fund to secure that retirement that you envision. If you want that new large screen TV then the amount of net income lets you know if you can afford it without interfering with your daily living expenses and financial debt obligations. Basically net income acquires assets or things of value. Ideally net income will increase your net income. Whether you invest in a business, real estate or even retirement it all increases your future net income. This kind of thinking will change your life.

Remember you are doing this planning for yourself so develop a system that works for you. People should realize that the more financially literate you are the less debt you have. Think of making money as a game of life and you can always improve on your score. Any financial planner will provide you with a guideline but the bottom line is the you are in control of your own money and what you do with it.

Using A Real Estate Agent

2011-02-27T09:19:00.001-08:00

Real estate is one of the biggest investments in your life. It takes knowledge, negotiation and preparation to be successful. Your agent will provide the services and skills to sell your property and assist you in searching for your new home. The listing contract establishes an agency between you and the agent. Your agent is required to disclose all information about the property and the sale. Your realtor has a duty to you the client to find the best purchaser and sell your property or to find the best property to purchase. Real estate agents must do what is in the best interests of the client. Agents will make recommendations on the price and conditions of the offer. Services also include accessing the multiple listing service to find the perfect house you’re looking for.

Listing Agent

An agent will help the seller list the price of the home. They can make suggestions on any repairs or renovations that may need to be done. A reputable agent will inform you about the housing market, showing you the number of homes available and sales comparisons. To save time an agent will screen any potential buyers and make sure they are qualified to purchase your home. The agent will market your home by placing advertisements, conducting open houses and distribute flyers and/or feature sheets. As well your agent should use the full potential of the internet to reach many interested buyers.

Buyer’s Agent

The agent who helps you to buy your new home should ask you a lot of questions to find out exactly what you’re looking for. You need an agent who wants you to find that right home and works in your best interest. An agent needs to ask you about your price range and your financial situation and what home features that are important to you. It’s a great idea to ask the agent about nearby services and other community information. Once there is a potential home on the market, your agent will arrange for a tour to evaluate the home. If its your dream home they you will need to make an offer with the assistance of your agent who will be there helping you until closing day.

Comparative Market Analysis

Comparative market analysis assumes the property is equivalent in market value to property that was recently sold. To do this analysis the agent gathers information about comparable properties called the principle of substitution. The information includes the style of the home, class, size, age, number of bedrooms, number of bathrooms and other comparable features that market the home. Comparable sales and competing listings are also on the analysis in the last 6 months to a year. With the analysis the agent can help determine the asking price and develop a marketing plan for your home. An analysis of condos are compared to listings that are in the same building.

The Listing

An exclusive listing is when one agent handles all the buying & selling activities. There may be two agents involved, but everything must go through the exclusive agent. The commission would be divided among the agents. The ideal time for an exclusive listing is when you have a buyer who wants to purchase your home and no one else is interested. In a multiple listing it also gives an exclusive right to sell with the most common way. One agent represents the seller and one represents the buyer. They work together to meet their client’s needs. In an open or general listing, any agent can find a buyer. The commission is paid the successful brokerage.

Title Search

After you have signed the listing contract your agent will conduct a search the title on your property. Many jurisdictions such as British Columbia require you to search the title to make sure the purchaser receives a free and clear title. At the same time its an opportunity for the seller to find out if there is any liens, judgments, charges and claims against the title. If there are any encumbrances, the seller will need to get them resolved before proceeding.

Measurements

Your agent will need to make measurements of your home. On the title search there are estimates of measurements and these should not be used. Your agent is required to provide accurate not estimated measurements. You the seller must insist your agent take those measurements. The seller and agent have an obligation to make sure you provide accurate information to the purchaser. Failure to actually measure can result in legal action at a later date.

Multiple Listing Service (MLS)

Your real estate agent will help you to decide on the suitable asking price. When you list your home with an agent, the details are available to other real estate agents in the area. So you can market your home to a lot of potential buyers not just through your agent who listed your home. As well checking out the MLS website, anyone on the internet can search your home.

Credit

2011-02-20T09:14:00.000-08:00

Maintaining a good credit history is just as important as handling your personal finances properly. A good credit report and score will save you money on lower interest rates for mortgages or any other credit. Have good debt management skills are a good place to start. Look at your financial situation and see if you have too much credit. Lenders will always look at your debt and your ability to pay them. You can request a credit report at any time and it is a good idea to periodically review them to see any suspicious activity on your report.

Debt Management

If you have credit cards, loans, mortgages or lines of credit you need to make monthly payments and manage your debts. Every time you make or don’t make payments it is sent to a credit reporting agency. Failure to make any payment reflects poorly on your record. It shows that you are not financially responsible. Therefore you are a risk to a lender which results in a higher interest rate for you or being declined. So it’s important to manage your debts. If you have lots of debts you need to consolidate them into one payment. It looks so much better making one payment rather than ten. If you find yourself in a situation of falling behind on payments don’t think about applying for any credit until your situation is better. Try to focus on paying off those debts and restoring your credit.

Credit Reporting Agencies

There are a number of agencies that report your credit history. If you make a monthly payment on a mortgage for example, the lender reports that you have paid on time, the payment was received and keeps data about the debt such as the loan amount, monthly payment and the agency collects the information. The agency stores the information for other lenders to see. Some agencies have the payment history of the last 18-months. So you can see how important it is to keep up the payments and have the information accurate. You can obtain a credit report, some are free and others require payment and instant access through the internet. Upon obtaining a report, it will contain information about the lenders, your credit score, collection action and other information about you.

If you find an inaccuracy in your report, contact the collection agency to correct the problem.

Credit Report

Upon applying for a mortgage or any loan, a lender will check your credit report. A credit report essentially reports your debts and how efficiently you made your payments. Anyone who has borrowed money will have an established credit history. On the report it will list your creditors, type of credit such as revolving (credit card), installment (loans) or open (other), credit limits for each one and payment amounts and frequency. Your credit score is a number which is determined by your payment habits. When you make on-time payments your credit score number is higher and when payments are missed or behind it lower the credit score. A bad debt is when a creditor sends your loan or credit card to collections resulting in your credit score dropping dramatically. Lenders will look at all of this information and will determine the interest rate charged to you. What the credit report determines is your overall risk of defaulting or not being able to repay any loan or mortgage.

Credit Score

This analysis of credit is determining if you can meet your obligation to repay the debt. The amount of income needed to pay the mortgage is called a debt servicing income. The analysis looks at the financial resources of income and obligations the borrower must repay. This is to prevent the borrower from going into arrears or late payments or defaulting and not repaying the debt. The lender will look at your total debt from the credit report and also look at your credit score or called beacon/fico score by different companies. These scores give you a rating from 300 to 900 with a score above 600 are considered good credit. The majority of people have a 700 – 750 score.

Fraud

It is a good idea to keep track on your credit report and score. There are criminals that steal personal information and use it for illegal activities. They take your name, birth date, social security/social insurance numbers and apply for credit elsewhere in your name. You may not even know about this until the bill arrives. And you can be stuck paying for their criminal activity. Many credit reporting agencies have services that notify you of any suspicious activity for a fee. But nothing is fool proof. So always be careful who you give your personal information to. Some consumers with credit cards have the store contact the credit card company for authorization. Fraud can happen at anytime and anywhere.

Secured Credit Cards

If you have poor or no credit, then its time to get started in developing or strengthening one. Lenders will only take on mortgages for someone who is established. Even with a sub-prime mortgage, it is easier if you have established some kind of credit history. People get stuck in this downward spiral where you need credit or good credit to get credit. In other words to get a mortgage you need a credit card. But who will give you a chance. Maybe you have just graduated or repaid previous loans and got a bad credit rating for being late. There is a solution and it’s a secured credit card. It a credit card that can be used everywhere just like normal cards, but there is security against it unlike regular cards that are unsecured. Think of it this way, in a mortgage the lender requires the property as security. Here, a lender will ask you for a deposit that is used as security against the credit card. There is no difference other than on a smaller scale. It is easy to get started. Contact a company that issues secured credit cards. Fill out the application and submit your deposit. The amount of the deposit is your credit limit. So if you submit $100 deposit, your limit is $100. Its treated just like a regular card, where you make monthly payments. The differences are in the administration fees. Some charge an annual fee and others a monthly fee. The interest rates might be competitive as its no risk for the lender. If you default, they keep your deposit. If you choose to cancel the card, the company will reimburse you the deposits you submit and interest earned over. So if you keep the card for a couple of years, the deposit is gaining interest in the meantime but at a low interest rate. You can increase your limit by submitting more money to your deposit. It’s a great way to repair your credit or start one.

Reverse Mortgages

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A reverse mortgage is for seniors who may need extra income for retirement. This type of mortgage is called a reverse annuity mortgage or home equity conversion mortgage. The applicant must own their own home and it must be their primary residence. No income or credit qualifications are needed, only the equity from your home. Reverse mortgages are gaining popularity and available in Canada, United States, United Kingdom, Australia and other countries. A lender will make payments to the borrower or a lump sum payment in exchange for a promise to repay the loan. It’s repaid by a couple of ways. The mortgage can be made for a specific term or when the borrower dies. At that time the loan is repaid by refinancing at the end of the term, or in the event of death, when the property is sold in an estate sale, the proceeds will pay off the loan. Be sure to read the fine print of any mortgage.

The mortgage can be in the form of monthly payments called tenure which can be on-going or set for a term or period of time. Another type of payment is a line of credit that can be accessed at anytime. The applicant does not need to worry about making payments, foreclosure or vacating the property at anytime. When the applicant sells the property or dies the estate will pay the mortgage through the proceeds from the sale of property. In a situation where two applicants are applying, if one applicant dies, the mortgage is only payable upon the death of the second applicant. This mortgage is not the same as home equity mortgages which are classified as subsequent mortgages.

Home Equity Conversion Mortgage (United States)

The home equity conversion mortgage is FHA (Federal Housing Administration) insured and is administered through any financial institution in the United States. The requirements are the youngest borrower if more than one must be at least 62 years old. The mortgage on the home must be paid off or almost paid off. Small balances are acceptable. With this mortgage there will be an insurance premium the applicant will need to pay. The property in question must be a single family dwelling or a 2-4 unit that the applicant occupies. The amount that can be borrowed depends on the lesser of the appraised value or the insurance limit. Each situation is different with the age of the applicant and interest rates to take into consideration. Upon applying for this mortgage, the applicant(s) will take part in consumer education and counseling. Any amounts received is tax-free and you can use on whatever you want. Be sure to check for any fees for set-up and always read the fine print.

Reverse Annuity Mortgage (Canada)

This plan is for residents who live in Canada who are 60 years and older, if you have a spouse then both must be at least 60. You can receive up to 40% of your home depending on your age, location, type of home and appraised value. This plan will not affect your Old Age Security or Guaranteed Income Supplement and is tax-free. You can even use it to lower your taxes by investing in RRSPs. You can use the funds for anything with either a lump sum payment or on-going cash advances. The rates of interest can be fixed or variable, and the mortgage is due at the time the applicant(s) have moved out or applicant(s) have died. There are substantial set-up fees for legal costs and getting an appraisal conducted on your home. So when inquiring be sure to ask about fees and read the fine print.

Make A Budget

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After you’ve prepared financial statements over a period of at least 3 months you will notice trends. How much you earn and how much you really spend on items. You can take the overall average of each item by adding them up and dividing by the number of months. Now you have an average. Do that with all your revenue and expenses. Budgets are based on actual usage in an effort to predict the future. So now we have a budgeted amount for each item for the next month and every month thereafter. With these amounts you can keep track of yourself. If one month you’re over budget, the next cut back to maintain that average. When developing a budget you need to stick to it.

Net Worth

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Net worth is also increased by net income and decreased by net loss. These are determined in another vital financial statement called the Income Statement or Statement of Profit & Loss. This statement looks at the activity over a period of time such as a month. So prepare it the same way each month to compare how you are doing. There is three sections to the statement, the first is all your income, then your expenses then the third section is your net income or loss.

Income is any amount received. This can come from employment, self-employment, investments, interest received, government credits or income tax refunds. Group receipts together according to how you want to record them. All pay stubs should be together, all investments in another group for example. Add up the group and enter the information on the appropriate line of the Income section of the statement. Then add all the income to give a grand income total and enter that amount on the statement.

Expenditures is what you spend your money on. This requires you to monitor it closely. You need to save all your receipts from the month. I mean everything from that gas purchase to eating out to buying groceries. At the end of each month you are going to divide the receipts into small groups. Each group will be a different type of expense. For example all food receipts will be grouped together, all gas purchases grouped together, etc. In each group add up all the receipts and enter it on the appropriate line in the expense section of the statement. Then add all the expenditures and enter that grand expense total onto the statement.

With all your income and expenses reported we need to find out if you made a profit or loss. Take income and subtract your expenses from it. Income - Expenses = Net Income or (Net Loss). If the remaining number is a negative then you have a net loss. In other words you spent more than you made. This is possible if you charged your credit card for expenditures. On the other hand if your remaining number is positive then you controlled your expenses.

Now the analyzing part comes in. So make it exciting and not a chore. You need to find out how you are doing. If your net income is a good amount that you like then keep up the good work. You can then use that net income to pay down debts or make an investment. If you are unsatisfied with the amount of net income then you need to look at your expenses. If you have a net loss then you must do this as you can't live on credit. So look at the expenses. See what looks too high. Your restaurant amount looks quite high, so how about eating home more often and reducing that amount. Are you being charged for late fees? You can eliminate these by paying bills on time. Basically look at cost effective ways to reduce your expenses.

With the financial data you now have it is a great idea to create a budget. Simply take the amounts you spent and add them to the next month. If you feel that you can cut down on something then lower that amount on the budget and see if you can meet that goal. This is a great tool to use to control your expenses and reduce them. At the end of each month evaluate how you did. Did you stick to the budget? Does it feel good to have the outcome under budget! Now you can use that amount to buy a new large screen tv which is an asset that you own. So you did it! That is what I mean by making it fun. See how you can save money and still get what you want. You basically are being more aware of what you do with your money and use it to own assets rather than spend it all away.

Manage Your Debt

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Managing our debt is important. Periodically do a credit report and check your score. This is one of the determining factors that lenders look at if you need credit. So it is important to maintain a credit score that lenders will feel confident loaning you any money. If you have bad credit then you need to repair it. You can do this by applying for a secured credit card. Think of it as a damage deposit for a credit card. You submit funds to the company that becomes your credit limit. The credit card is secured by this deposit so there is no risk to the credit card issuer. But to yourself by having this card and making payments just like a regular card will increase your credit score. The credit company will submit data to the credit reporting agency about your behaviour in managing this debt. So you can repair your credit rating and score. This is important as lenders who feel you are a high risk will put a higher interest rate on your loan. So keep debts paid and your interest rate will remain low which means lower interest charges.

So ultimately you want to pay off your debt and replace it with an asset. So the long-term strategy is to pay off what you owe and replace it with what you own. This doesn't mean not to have credit as it is good in an emergency situation and also for everyday use providing that you pay off your balance each month. That way you maintain a good credit rating but you switch to being more financially free. Set aside money to pay off those debts. Once each debt is paid in full then use that same money to invest. This will take discipline as most people in financial distress impulse buy, basically if they see something and have any kind of money including savings and a credit card will buy it for instant gratification. You can't be doing that. The reward is long-term and hence a lifetime financial plan. For example if you paid $200 on a credit card monthly, and it is now paid in full, use that same $200 towards an investment for your retirement. Thinking about it, you used the money to pay what you owe so now you can use that same amount and own it. You weren't able to use it for anything else but the debt so just keep the same behaviour but change how you use that money to benefit you.

Track Your Finances

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Congratulations on taking the initiative to be financially free. By developing a plan you are taking control of your finances with the intention of living comfortably and working towards your future. Now that you are organized and confident that you can achieve this, what is your next step? The next step is to track how we spend our money.

Accounting is the process of tracking our finances. Basically accounting for what we do with it. By keeping a record of what we receive and spend our money on, we can analyze and change any behaviour. For example is you eat out everyday, do you really know how much you spend? You may be surprised at the end of the month when you add it up. That unknown amount is suddenly known and you may not be too happy with it. You might think to yourself why am I sending so much on eating out when I could invest it? It is that realization that makes one think about what they do.

You need to learn about assets, liabilities and net worth as we track our finances. Assets are items of value that we own. Cash, bank accounts, household furnishings, property, vehicles, investments and retirement savings accounts are all items of value that we can track and that we own. Whereas liabilities or debts are items of value that we owe. These include credit cards, line of credit, mortgages and student loans. These are items of value that we can track and we owe to someone else. So net worth, equity or sometimes called capital is the difference from what we own from what we owe. Basically assets - liabilities = net worth.

The Balance Sheet is a financial statement that shows assets, liabilities and net worth. The statement is divided into two sections, one is your assets and the other is liabilities + net worth. Both sides must equal each other and hence a balanced financial statement. This statement is often referred to a snapshot of your financial situation. It is recorded on a specific date and the current values. A lender will look at the this and see how much cash you have, assets for collateral and how much debt you owe. So the bottom line is your net worth. The idea is to prepare financial statements in the same way so you can compare them. For example if you prepare one at the end of last year, and prepare a statement one year later, you get an idea of what you did for the year. Acquiring assets and reducing debts increase your net worth where charging more debt onto credit cards lowers your net worth. So use the Balance Sheet to analyze your finances.

Organizing Bills To Be Paid

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Now that you have established storage of the documents we need to create a new habit or system on how to deal with them. Most people will open mail then read it and set it aside and review it again later. That is two steps in just looking at the mail, so save yourself time and effort by looking at it once then taking action. Buy yourself two letter trays or a desk organizer at your local stationery store. Have one for INBOX and the other BILLS TO BE PAID. So when you open your mail and read it ask yourself can it be filed away? If so, then put it into the right folder. There it is done. Is it a bill? If so, then put it in the bills to be paid letter tray or organizer. That was easy! Don't make it complicated.

Something to consider is when you pay your bills. On payday, pay your bills on the same day. You know what still needs to be paid, simply by looking at your BILLS TO BE PAID. You are not hunting down bills that were filed away. Set time aside to pay the bills. If you decide not to do it on paydays then set time aside on another day. If you have a hard time paying bills on time, then I suggest the same day you get paid. If you do on-line banking which is quick and easy to do, remember when you have multiple bills, to enter the correct amount for each and make sure you are paying the right company. Mistakes are made when you are in a hurry to get it done and enter the incorrect amounts, so take the time to do it right and double check. The bank or credit union will give you a confirmation number, so write that down on your bill along with the amount and date paid. It feels good to write it as it is done - no more worries. Once you have done that then file it away in its proper file folder.

Some other suggestions for organizing include buying a small expansion folder that has pockets for each month. Any loose receipts you can just tuck them into the right month and then they won't get lost. This will be extremely handy when you start to track how you spend your money. Another suggestion is on a calendar write down the days you pay bills. Write it down in a red pen so it stands out. This will help to get those bills paid. Develop a new habit and eventually you will be able to do it without thinking about it.

Now you are ready to take action. You realized that you need a plan and how it can give you financial freedom. You have changed any past behaviour and got yourself organized. So the next step is to track your finances.

Childhood Behaviour

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As a child we were either told or shown how to handle money. This is the root of a lot of financial distress. Our parents handled the household finances. Think about it. How did they do? Did they pay all there bills on time and still have money in the bank? Did they make investments? The reason I ask this is because we learn from our parents. If they didn't have a financial plan, the chances are they taught those values to you.

For most of us our parents didn't have a real plan or weren't very good at maintaining it. Because they weren't successful at it doesn't mean you can't be. Our past behaviour dictates our future behaviour. So if we don't change anything it would be safe to assume the same financial outcome in our lives. So we need to have our finances work for us not we for our finances.

Examining your childhood can hold answers to your current situation. It can be a value you hold or even an attitude. For example you can have a negative attitude towards money or people who have money, this could cause you to spend money needlessly and not invest, thus not becoming like rich people. Another example could be you denying yourself the opportunity. By having little education can cause you to think you can't do it. If you pay rent on an apartment, you don't realize that you could get a mortgage and work towards owning the property. This lack of education or confidence might scare you into not taking action. As an adult you have choices, so listen to what you want. "Life is about experiences." With a financial plan there is nothing you can't experience.

At this point you realize that you need a plan. You looked into your past and discovered what has stopped you or sabotaged your efforts. The next step is to get organized. We need to de-clutter our lives and make it simple. If we make something too complicated or too much work we just won't do it. So an organized and simplified life will bring more financial happiness. So let's organize our financial life.

We need to set up a system for filing our documents or financial records. We need to store them in a file cabinet or box so we can retrieve them easily. Once you have a cabinet or box you will then need file folders to sort the documents. Divide your documents into separate types then make a file folder for each of them. For example have a folder for your income tax returns, pay stubs from work, utility bills such as hydro, etc. If you have documents that have multiple years then have one file folder for each year.

Developing A Financial Plan

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If you want financial freedom, then you need a financial plan. At the end of the month, if you don't have money left over, basically living paycheck to paycheck then you need to create one. What about your future? Do you have money for retirement? Are your loved ones covered in the event of a death? Do you want to own your home instead of renting? Wouldn't it feel good to have enough money to cover your expenses and live comfortably? It would be even better if you had money left over at the end of the month and your biggest decision was how you were going to invest it? How would that make you feel? The bottom line is everyone needs a plan to achieve what they want out of life.

If you don't have a financial plan there is probably a good reason for it. Maybe you don't know what one is? Where do I start? Well the truth is, most people already have some kind of plan. You go to work and earn an income. On payday you pay bills, pay rent, buy groceries and treat yourself at a restaurant. That is your survival plan. But the real truth is what you're not doing. You not getting ahead. That is just the reality.

So we need to start analyzing why we chose this plan and then act upon it by improving it. To do this you need to ask yourself is my current situation working for me? You need to answer that because if you are satisfied with your current situation then you won't want to change it. If you are happy with it then why make any changes? So the first step is to be honest about it. This is a lifetime financial plan. You need to develop one and through your life stick to it. It is a work in progress always with you and always changing as you go through life. For most of us we were never told this as a child so I am telling you now and it is never too late to start.

If you make money and spend it without thinking where it goes then you need to refocus your financial priorities. Make changes for the better. Changes for a lifestyle you want. It won't be easy and takes some time to develop. It won't happen overnight. It will take years and hence a lifetime. It's not too complicated, just a few activities and make it fun. Make it exciting to see where you spend your money and how you save for vacations.