Time and Money Connection

Last Post

noreply@blogger.com (Gord Morrow) — Fri, 18 Oct 2013 13:31:00 +0000

As you can clearly see, I have not not made a post in quite sometime. I have decided that I will be letting this blog die a natural death.

I enjoyed writing the blog, but it has not generated much of a following. Why, I do not know for sure, but the reasons really do not matter.

I do want to take the time to thank those who took time to read my blog. I hope that I have been able to provide you with some useful information over the past few years.

As of November 6th, this blog will cease to exist

Thanks again,

Gord

Redefining Wealth!

noreply@blogger.com (Gord Morrow) — Mon, 18 Feb 2013 12:00:00 +0000

When it comes to defining your wealth, what measure do you use?

If you are like most people, you probably assess you wealth based upon how much MONEY you have. One’s wealth is simple defined by his/her Net Worth. Net Worth of course is your Assets (what you own) minus your liabilities or debt (how much you own) The difference is your net worth. The higher your Net worth the wealthier you are.

Yet our modern definition of wealth has not always been about money. The old English meaning of wealth was literally “the conditions of well-being”.

Mark Anielski, a Canadian ecological economists and author of The Economics of Happiness, describes genuine wealth as “those conditions of well-being that align our heartfelt values about what makes life worth living”. How about that, wealth defined and not one word about MONEY!

Is it possible for us to have a future where we define wealth more as a measure of happiness and less about money and the stuff it buys?

When it comes to how well we are doing (wealth) as a country, we use Gross Domestic Product (GDP) or Gross National Product (GNP). Both basically measure how much money flows through our economy. The more we spend the better. The goals of each country is to have a greater increase in GDP or GNP that another nation. Thus the current measure of a nations wealth is economic growth.

Neither measure (GDP or GNP) places any moral value on how this money is spent.

Money spent killing people in war has equal value to saving someone's life with a new cure for a fatal disease.

Natural disasters, such a earthquakes, hurricanes, and floods all add to the flow of money and thus increase our GDP and our overall wealth as a country. That fact that perhaps thousands of people may have lost their life in that disaster, is only counted from the stand point of the money flow to bury our dead.

The time and efforts of groups of volunteers who rescued people in these disaster add nothing to the wealth of the country as no money changed hands.

Likewise, things like cooking your own meals, cleaning your house, helping your child deal with a personal crisis are all worthless activities since they add nothing to the countries GDP (wealth).

Yet take those same activities and now eat at restaurant, hire some to clean your house or hire a counselor to work with your child and we have added wealth to our nation.

My personal reaction to this is; how sick is that!!!!!

So we really need to redefine Wealth!

From a personal level you can do so by:

Stop comparing your material possessions and money with others.
Determine what your heartfelt values really are that makes your life worth living.
Start a gratitude journal highlighting what you are grateful for in your life, make sure to focus on relationships, people in your life and experiences that make your life better.
Look at how you spend your TIME and make sure you using this valuable and limited commodity in a way that makes your life happier.
Remember TIME, unlike MONEY, cannot be saved for future use.

On a larger scale:

Lobby politicians to re-examine the use of GDP or GNP as a measure your countries WEALTH.
Get actively involved in organizations that want to implement an overall well-being scale as a measure of true wealth.
Join a political party or create a new one that is willing to redefine the true measure of wealth.

I believe our current measures of WEALTH are not working, they never have.

If we want to be happy and fulfilled as individuals and as a society as a whole, we need to redefine it so it will correspond to the real definition of wealth, “those conditions of well-being that align our heartfelt values about what makes life worth living”.

Until next time.

Gord

Motivation to Save!

noreply@blogger.com (Gord Morrow) — Mon, 21 Jan 2013 12:00:00 +0000

It is nearly February and here in Canada that means RRSP season. This is the time when all the financial institutions go on a full scale advertising blitz to encourage people to make their RRSP contribution and of course put the money in their institution.

For those who don’t know, an RRSP is a Registered Retirement Savings Plan. Any money contributed before the RRSP deadline of March 1, 2013 can be deducted from your 2012 taxable income. There are many rules governing how much you can contribute and how the money is treated when finally withdrawn.

There also seems to be a lot of advertising to have people open and/or contribute to their Tax Free Savings Account (TFSA). Financial institutions are offering high interest (up to 2.25%) for a contribution to the TFSA.

Now there are two options for Canadians to save for retirement and either defer taxes or in the case of TFSA not pay tax at all on the income generated from those accounts.

Canadians are left to decide which is best, RRSP or TFSA (assuming that they cannot do both).

If you can believe what you read, Canadians are not saving enough for retirement. And when asked, there seems to be a trend to paying down debt (debt to income ratio is a record 164% and still growing).

So what is stopping us for saving?

According to Bruce Sellery (Moolala) we need motivation to save. In his recent article in the Financial post, Young people need motivation to save, he feels that this is particularly true for young people. Sellery feels it is all about habits. He puts part of the blame on parents for not teaching good money habits. He also believes they “lack a contextual understanding of their money”.

These things may be in fact true but there is more to it than that.

I do believe that we need Motivation to Save!

What our low interest rate environment offers really amounts to a disincentive to save. Combine low interest rates with easy credit, and there is little wonder that there is no motivation to save. We are in fact encouraged to SPEND! After all we need to make sure we have economic growth.

Now motivation to save comes in two forms: self motivated and also externally driven.

True savers can be self motivated. They recognize the need to save for a time when they will no longer be working (retirement) or to fund their children's education, for a down payment on house, to purchase their next car and so on.

Everyone else needs some external help to get motivated.

So how do we do that? Raise interest rates!

Higher interest rates can be a deterrent to spending.

It is one thing to borrow when interest rates are 3% or less for a mortgage or line of credit. It is whole different scenario when interest rates are 6-8%.

Likewise, where is the incentive to save if you are getting 1% or less on your money and inflation sits at over 2%. Now if saving rate was 4-6% (higher would be better) it begins to make more sense to save.

By simply raising interest rates, our governments and the central banks of our respective countries could become a motivating force in getting people to save.

What do you need to motivate you to save more?

Until next time.

Gord

SPENDERS/SAVERS: Two Side of the Same Coin

noreply@blogger.com (Gord Morrow) — Fri, 11 Jan 2013 13:08:00 +0000

When it comes to how people handle money there seems to be basically two ways to deal with MONEY. You are either a SAVER or a SPENDER!

For those of us who are SAVERS, spending can be a difficult thing to do.

Of course for SPENDERS, saving can be very difficult. Often the spender is the one carrying a large amount of debt. In Canada the average debt-income ratio is now about 165%. SPENDERS are carrying most of that debt as SAVERS are often debt free, so the spenders debt-income ratio is much higher than the average.

As a SAVER, a recent article caught my eye and sparked some interest. The article was titled, Don’t be afraid to spend a little. The author of the article is Jason Heath, a fee-only certified financial planner and income tax professional for Objective Financial Partners Inc. in Toronto. Over his many years helping clients accumulate wealth he has found that:

People become so good at earning and saving money that, even when they can afford it, they hesitate to loosen the purse strings.

I know many SAVERS who have trouble spending money. My financial advisor also says that it is a common thing for those who have been good savers over the years. I admit that I too am one of those savers who has trouble spending money.

That fact came home plain and clear just the other day. I have been considering getting a new guitar. I bought a used one nearly 3 year ago, when I decided I wanted to get back into playing. The guitar served me well and now that I am committed to continuing to play I felt it time to upgrade. Long story short I just bought a new guitar the other day.

The decision process came down to the choice between two guitars. One was a hundred dollars more than the other, but I liked the sound a little better on the more expensive one, plus it was made in Canada. I ended up paying the extra but it was not easy to part with that extra $100. Could I easily afford the extra $100, you bet! But I am a SAVER and we don’t part with our money easily.

A SPENDER would probably have spent even more than me and it may have meant taking on more debt.

Then it dawned on me, SAVER and SPENDER have a common thread. Both have a less than healthy relationship with our MONEY.

Both SPENDERS and SAVERS can end up on the same treadmill.

SPENDERS, have gotten into a habit of accumulating stuff. More stuff shows everyone they have made it. They feel good about having nice things. The downside of course is they have also become slaves to having to work to pay off debt. TIME no longer belongs to them , it belongs to the bank or credit company that hold their debt.

SAVERS, have also gotten into the habit of accumulating, in their case it is MONEY. Taken to the extreme (and for many that is the case) the saver never has enough MONEY, So they continue to work, to accumulate and never have the TIME to enjoy the fruits of their labour.

Both SPENDERS and SAVERS, often see themselves doing these things for their families.

The SPENDER justifies spending by saying I want my kids to have what I could never have. I want to buy my partner nice things to show her/him how much I care.

The SAVER, wants to make sure that there is enough MONEY to leave to his children so they won’t have to start from nothing. They want to be make sure their partner is well taken care of when they die.

TIME spent with spouses/partners, kids, family, friends and on maintaining good health and fitness are sacrificed to accumulate.

What is important is spending TIME with those you care about doing things you love. When these are ignored, it is not uncommon to loose the people that are important to you.

This could be simply becoming virtually estranged but still living under the same roof or family breakdown. Either way, the SAVER and the SPENDER by following a misguided path when it comes to MONEY, risks loosing it all.

If you find your relationship with MONEY is not working for you, take steps to change your path before it is too late.

The FREE Financial Integrity program (FI) is one resource that can help both the SAVER and SPENDER re-evaluate their relationship with MONEY to better align it with their true valves.

In particular Step 2. Being in the present: Tracking your life energy and Step 4: Three questions that will transform your life are particularly useful for both SPENDERS and SAVERS to help put MONEY into perspective.

I actually used these FI tools to justify my guitar purchase.. The guitar I purchased was aligned with my value for playing music. The life energy (time) I had to trade (work) to make this purchase added value to my life. The fact that it was Canadian made by a fully-owned Canadian company supports my value to help support the Canadian economy. The one I did not choose was made in China for a Japanese company.

Bottom line is SPENDERS and SAVERS are really the two sides of the same coin. Both may need to transform their relationship with MONEY.

Until next time.

Gord

Fiscal Cliff Averted????

noreply@blogger.com (Gord Morrow) — Fri, 04 Jan 2013 12:00:00 +0000

Well it is a new year and the US has averted the Fiscal Cliff. Or have they?

The way the world stock markets reacted on the first trading day after the US government passed the bill to avoid the feared Fiscal Cliff, you would think that everything is great. It is full steam ahead on economic growth as the US has turned the corner and is on it's way to renewed prosperity. Day 2 is a little more muted.

The reality of the situation is that nothing was really done other than some small tax increases for the very high income earners. Obama wanted to increase taxes on those earning over $250,000, the senate and the house agreed on raising taxes for those earning $400,000+.

Yes, this will generate some badly needed revenue, but it is far from solving the US fiscal problems.

Automatic massive spending cuts were averted, but the US government needs to cut spending. That issue was left to be dealt with in a few months time. In my opinion there is little room for optimism that the Democrats and the Republicans will be able to put the country first and make the serious changes that need to done to get spending more inline with revenues.

But the biggest issue facing the government of the US is the level of debt. With the debt ceiling being hit (after being increased last year), it looks like they are just going to approve another temporary increase so they can pay their bills for another couple of months.

Simply increasing the debt ceiling solves nothing. What they are saying is we cannot afford to pay the interest on our debt, so we will borrow more money from you and use that money to pay you the interest we owe you on our existing debt.

That is like you as a consumer owing so much on your credit cards you cannot afford to pay the minimum payment and saying to the credit card company, increase my credit limit and I will use this cash to make my minimum payment. Of course likely no bank or credit card company would agree to such an arrangement because it would not end well for either party.

Yet, when the US government does it, it is viewed as sound economic policy by economists and other nations. OK,there is perhaps a small downgrade in the credit rating, but people still flock to US government bonds as a safe haven to put their money.

If the US government bonds are a safe haven for our money, then we are all definitely screwed.

For those of us with a little commonsense (something that is obviously not a pre-requisite for a politician), it all seems very simple; cut spending, increase revenue (taxes) and balance your books. We as individuals and families are expected to do that. Successful businesses are expected to generate more income than their expenses.

Should we not be asking the same of our governments?

Until next time.

Gord

PS: I have not yet decided on the fate of this blog, but until I do I am sure I will have plenty to rant about when it comes to money for sure.

TIME to Reflect

noreply@blogger.com (Gord Morrow) — Wed, 19 Dec 2012 12:15:00 +0000

Each year as the month of December ticks away, I take time to reflect on the past year. I look at both TIME and MONEY.

I have made a good start on looking at MONEY. I am reflecting on where my money is invested and whether these investments are in alignment with my values and goals. One discovery I have made is that I need to simply my investing to better reflect the TIME I want to commit to managing it.

It is TIME that I am really writing about today. Am I spending my TIME doing what I really want to do?

I have already mentioned one area that my TIME spent doing the activity does not align with how I really want to spend my TIME. That is of course TIME spent dealing with my investments and managing MONEY in general.

But what about the rest of my TIME?

As some of you may already know, I manage and teach tennis at a summer tennis club. This year I will be the Head Teaching Pro as well as the Manager, so this will become a full-time gig for the summer. I am excited about this opportunity and it is something that I want to do.

I want to spend more TIME playing my guitar and singing. Both give me joy and I do enjoy doing some entertaining. These activities bring me a great deal of satisfaction, though as relatively un-gifted guitar player, it can be hard and frustrating at times.

There are some things that I do now that I am not sure if I will continue to do. One such thing is writing this blog. I am questioning if I really want to spend my TIME writing about TIME and MONEY.

My goals with this blog was to try and make a difference. To help my readers see that they had a choice on how they spent their time and money. I am not sure that I have been very successful. Readership has not grown, so either my message is not getting to the people who need it or it is not needed.

Perhaps my TIME would be better spent focusing on a much smaller community, the one I live in as opposed to trying to reach a larger audience.

These are only a few of the TIME issues I am reflecting on as the New Year approaches.

I encourage everyone to truly reflect on both your use of TIME and MONEY. Right now many not be the best time for some of you as the holiday season can be very busy. But if not now, then early in 2013.

Asking yourself whether how you are spending your TIME and MONEY is truly aligned with your values and goals could your greatest gift to yourself.

Of course if the answer is no, then only by taking action to correct your path will your life be more fulfilled.

I will be taking the rest of the month off to continue my reflections as to how I want to spend my TIME and MONEY in 2013.

So I wish you all a great holiday season and my your 2013 be your best year every.

Until next time (2013).

Gord

Low interest rate policy puts Canadian economy at risk

noreply@blogger.com (Gord Morrow) — Mon, 10 Dec 2012 12:00:00 +0000

It seems that our central bank say one thing and do another. Today a headline in the Financial post reads “Bank of Canada warns own low rate policy poses risk to economy”.

So let me get this straight. The Bank of Canada (BoC) have been warning us that interest rates will eventually go up. They have been telling consumers that they are taking on too much debt. They have blamed low interest rates for the highly inflated residential real estate market.

Now the BoC is saying that it’s own low interest rate policies are posing a risk to the Canadian economy.

So here are the facts:

The “most important domestic risk” continues to be the elevated level of consumer debt and “stretched valuations in some segments of the housing market”
Since the recession, households have loaded up on debt, courtesy of low borrowing costs that were instigated by the Bank of Canada itself
The ratio of household debt to disposable income has risen to 163%, up 1.5 percentage points from the bank’s June study

So, the BoC knows that low interest rates over the long-term are not good of the consumer, not good for those who require interest income to fund their retirement, not good for the housing market and not good for the economy as a whole.

It seem pretty clear to me what the solution is, RAISE INTEREST RATES.

From what I hear the Bank of Canada saying. they also know that they need to raise interest rates.

Yet no action is taken!

Why is the BoC not taking action?

The Bank of Canada puts the blame on everyone but themselves. The potential of the US “fiscal cliff” and the euro zone debt crisis are sighted as the culprits.

Higher interest rates would cause the Canadian dollar to rise in price relative to the US dollar and most other currencies. Thus our ability to sell our resources and manufactured goods would be adversely affected as the cost to our trading partners would increase.

And don’t forget that our government is also broke (thought they like to paint a much prettier picture about how good we are compared to the US and others). Higher interest rates would raise the cost of carrying our enormous debt.

So there is plenty of reasons for the BoC not to raise interest rates.

Yet the Bank of Canada admits that low interest rates are putting our domestic economy at risks. Preventing that from happening should be the priority of our central bank. We cannot control what happens in other countries but the BoC knows what steps it must take steps to stabilize and normalize our domestic economy.

So BoC governor Carney, do what you know you must do, start raising interest rates. How about a 50 basis point increase every 3 months for the next 3 years. That will be 6% in 3 years time. A much truer reflection of historic interest rates.

Mark Carney, show the world that you are truly a leader. Prove to your soon to be employer, the Bank of England, that you are a man of action not a man of idle threats. Take action now RAISE INTEREST RATES!

Until next time.

Gord

Equity-based Crowdfunding Investing

noreply@blogger.com (Gord Morrow) — Mon, 03 Dec 2012 12:00:00 +0000

With the turmoil in the stock markets, interest rates at record lows making fixed income investing less attractive, could equity-based crowdfunding be the answer.

Well the answer is may be.

Right now equity-based crowdfunding is not officially legal in Canada or the US. It is legal in the Netherlands and Italy as well as the UK and Australia are doing it.

The US has passed the Jumpstart Our Business Startups (JOBS) legislation in April 2012 but it is still in the midst of rule making by the US Exchange and Securities Commission. It is expected to be mid 2013 before things are finalized.

Now in Ontario (Canada), the Minister of Economic Development is giving the idea of Crowdfunding as serious look. Minister Duguid said Thursday (Nov 29/12) once the Ontario Securities Commission completes a review, the provincial government would look at ways to move forward with changes.

So what is Crowdfunding?

According to a Forbes article: Crowdfunding is by definition, “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”

Now the concept of crowdfunding is not new and has been around for a long-time. What is new is that with web and social media it can become a investment option to the general public.

One of the concerns expressed by the Ontario Securities Commission is that no prospectus is required for Crowdfunding as it is not a publically traded company. The concern is that the investor will not be sure of what they are really investing in and thus increasing the chances of fraud. However, often the reality is that many investors do not take the time read the prospectus anyway. They are long, boring and far from a guarantee that you investment is secure.

So why would you consider investing via Crowdfunding?

There are three main reasons why people unconnected to a project or business would support it:

They connect to the greater purpose of the campaign

They connect to a physical aspect of the campaign like the rewards

They connect to the creative display of the campaign’s presentation.

The real advantage of allowing equity-based crowdfunding as I see it, is that it allows investors the option to invest in business ventures that are true to their values. It allows the investor to make the choice to invest in a company that may be local and keeps the money in the community or region instead of some multi-national that takes the money not only out of the community, but out of the country.

When it comes to risk, is there greater risk investing via Crowdfunding?

Perhaps, but not necessarily.

Traditional investing in the stock market is far from being risk FREE. In the stock market, the price of a stock is suppose to represent the value of the company but often does not. Pure speculating by virtually placing bets (hedging) on whether as stock will rise or fall can in itself manipulate the stock price of a company.

Also in traditional investing, large pension funds and mutual fund companies because of their volume, really influence the stock price. You as a small investor are just going along for the ride.

Crowdfunding will certainly have it risks as well. As non-publically traded companies they do not have the same rules as far as disclosing their financial records. So you may not see the true financial picture. That being said, fraudulent financial statements from publically traded companies are becoming all too common (or perhaps more are just getting caught).

Bottom line, it appears that sooner, rather than later, equity-based Crowdfunding will be a reality in the US and likely in parts of Canada as well. You will have another option when it comes to investing.

As with any type of investing, due your research before putting your money on the line.

But for some of you equity-based crowdfunding may prove to be a way to truly put your money to work in areas that really reflect your values as a person. It may be your way to invest with Financial Integrity.

If you are looking at Crowdfunding as an investing option, a Google search for Crowdfunding websites delivered 950.000 hits. When equity-based crowdfunding receives final government approval, there will be even more websites dedicated to crowdfunding.

So if you are disillusioned by the stock market and poor fixed income options, you may want to consider Crowdfunding as an alternative.

If you currently invest via crowdfunding, I‘d love to hear about your experiences. Please share your thoughts about crowdfunding by leaving a comment or you can email me.

Until next time.

Gord

Black Friday (and Cyber Monday):Are You Really Saving Money?

noreply@blogger.com (Gord Morrow) — Mon, 26 Nov 2012 12:00:00 +0000

In the US Black Friday, the busiest shopping day of the year, has just gone by. This is the time when people stay up all night so they can stand in line to get a chance to purchase all the the stuff they think they need at what they hope is ridiculously low price.

Even here in Canada some retailers have started Black Friday sales to try and compete with the US retailers and try to keep some of the business here in Canada. Canadians who live anywhere near a border have been cross border shopping for years. Black Friday has been the day when cross border shopping has gone into overdrive. Now with the Canadian dollar at par with the US dollar and recently increased duty free limits, the temptations is too strong for many to resist.

Today (Monday November 26th/2012) is Cyber Monday. The day when those who prefer the online shopping experience get their chance to cash in on what they see as huge savings.

These two days, along with our (Canada) boxing day (Dec 26th), are suppose to be all about saving money. But are they really about saving MONEY?

Quite the contrary, they are all about spending MONEY! Though few will actually see it this way.

As shoppers returned with their purchases (or await delivery for the cyber-shopper), the talk was about how much they saved, what great deals they got.

Some of course will come home disappointed as they did not find the big deals that where touted by the advertising.

When it comes to spending, we can spend on necessities (food, shelter and clothing) or in other words NEEDS. We can also have discretionary spending, WANTS.

Now lets look at the spending that took place on Black Friday and also Cyber Monday. How much of your spending was for WANTS vs. NEEDS?

If most of your spending was for true NEEDS, congratulations you probably saved money. You purchased things that were necessities for less money than you could have gotten at regular price.

If most of your spending was for WANTS, you did not really save anything. You bought things you do not really need for less money, but you that is not saving MONEY.

Is there anything wrong with spending on WANTS? Of course not, provided you are spending money that you really have and not having to finance these purchases by taking on credit card debt (or other such debt). And provided you are not dipping into the savings you have allocated for retirement, emergencies, future education, home maintenance and car replacement.

But as we know life is not all about MONEY. It also about TIME.

So what about the time you spend standing in line waiting for the doors to open. Or, how about the hours spent in line waiting to pay for these great bargains. What about the time you have to spend working to pay for the purchase that are WANTS. Is this TIME well spent?

Ask yourself:

Would have I have rather spend more of my Thanksgiving holiday with my family and friends and less time standing in line outside the doors of Wal-Mart?
Is there something I would have rather been doing on Black Friday than trying to find parking and fighting crowds in the stores?
If I had truly spent less or nothing at all, could I work less hours and have more TIME for other pursuits more to my liking.

So how was your Black Friday? Was it what you really wanted to do with your TIME and MONEY?

If so great, I am happy for you.

If not, it may be to late for this year, but there will be another Black Friday next year. You have the power to start a new tradition.

Why not make the Thanksgiving holiday in 2013 a Buy Nothing Day! You will really save MONEY and you will have more TIME to do what you really want.

Until next time.

Gord

Financial Pain

noreply@blogger.com (Gord Morrow) — Mon, 19 Nov 2012 12:00:00 +0000

When it comes to getting physically fit, I am sure everyone has heard the saying, “no pain- no gain”. This of course has been proven false and in reality, one should not exercise to the point of pain.

But what about “pain” when it comes to Personal Finance?

Well it seems when it comes to the financial pain, there seems to be plenty of it to go around. This is particularly true for the 18 –24 year old crowd. According to the Personal Finance article, Young Canadians feeling the financial pain, 90% of this age group feels overwhelmingly stressed out about their future and finances and work top the list.

This generation has a lot to be stressed out about. The 18-24 year old is facing:

15% rate of unemployment, twice the average rate for Canada. In places like Spain and Greece unemployment is more like 50%.
40% of those working are only working part-time or in fields that they did not train for.
1 in 5 says they use credit cards to cover shortfall in basic living expenses.
the days of job or career for life are gone and this generation will never have the job security experienced by past generations.
The nature of work is now part-time, contract and the potential of numerous career changes.
Defined Benefit pensions (the best kind) are gone. So planning for retirement is solely up to you.

All these factors and more can make for a unpredictable financial future. So when it comes to financial pain, most of us are experiencing it, but the under 30 crowd feels that pain a little deeper.

But does this financial pain provide any prospect for gain?

If the mindset is stuck on the way of the past then there is little hope. If this generation continues to grieve the loss of jobs for life and comfortable retirement pension, then the pain will persist indefinitely.

However, with a change in the way we think, the future can be one of much better life. This new world of work provides some great opportunities to have a life.

Jobs for life came with a very heavy price tag for many. Many people stayed at jobs they hated for years, because they would get a nice pension and be able to retire in relative comfort after 35 or 40 year on the job. Trading 35-40 years of our time for money often left us unfulfilled, burned out and ill prepared for our time after work.

Many of the 18-24 year old saw their parents give their lives to their employer only to find that their employer did not live up to the implied contract. Many were unceremoniously shown the door during the last recession. Others found their pensions under funded and when their former employer went bankrupt (Nortel anyone), they faced a significantly reduced standard of living.

With all the chains that bound us gone, the new world of work can be one where you work at what you really want to work at.

You can choose to change jobs, and careers on your terms. You can take time now to experience life instead of waiting until you have put in your 40 years.

You are now self-employed, even if you work for someone else, as it is always on a contact basis. You are now free to go after new contracts that interest you or that offer better pay or working conditions.

You are free from being loyal to your employer and they are free from the obligation to provide you with a lifetime income.

If you are very good at what you do and your employer wants to keep you on they will have to make it worth your while, You will be able to get much more than money, you will be able to get time off, flexible schedules, what ever it takes for them keep you. If they won’t you will move on.

So yes, you may experience some financial pain. Much of it will be self inflicted if you cling to the past. But you have a lot to gain if you really embrace the change world of work.

The younger generation has the opportunity to be the first generation since the industrial revolution, to have what many of us have longed for all our working life, a healthy work-life balance.

You can have it all TIME and MONEY in a balance that is just right for you.
So embrace your financial pain, in doing so you could gain a life.

Until next time.

Gord

Low interest rate policy does not work!

noreply@blogger.com (Gord Morrow) — Wed, 14 Nov 2012 12:00:00 +0000

I have talked about the need to raise interest rate a number of times on this blog. Of course I am not delusional enough to think that the Bank of Canada or the US Federal Reserve will actually listen, but I still try.

Now it seems that the US Fed is getting desperate. A recent article; “US Fed says spend but worried Boomers won’t listen”, pointed out the following:

Federal Reserve officials say they’re concerned that retirees are blunting the impact of record easing aimed at creating jobs. The reason: Older people are more likely to forgo purchases of houses, cars and other big-ticket items that the Fed is trying to encourage with near-zero interest rates. And their numbers are growing, making the Fed’s task ever harder.

Low interest rate policy may have worked in the past, but not now. Yet if we look at Japan which has had a low interest rate policy for 20 years with little to show for it, may be low interest policies don’t really work at all.

So why won’t low interest rate policies work?

There are many reasons.

People, companies and the governments are already so heavily burden with debt they really cannot afford to service that debt. If you cannot pay back what you already owe, borrowing more at a zero percent interest rate is still too much. (though governments do not seem to heed that message).
Many Americans and now Canadians have seen or will see significant reduction in the value of their real estate. Many owe more than the house is worth. They feel less wealthy so many will spend less.
Boomers who are approaching retirement have not saved enough. Those who did save lost a significant amount of the money in the last market crash. These boomers have to up the anti and save even more if they have any hope to ever have enough to retire. Low interest rates also means they have to save even more money as the growth of their saving is serious stunted by these low interest rates.
Those in retirement who cannot afford to loss their capital, have seen their incomes eroded dramatically by low interest rates. They just do not have as much money to spend, period.
Low interest rates have a marginal impact on the spending of the younger population as they have high student loan debt, and limited job prospects. Many have returned home to their boomer parents as they cannot afford to live on their own. This of course stretches the boomers limited financial reserves even farther.
Credit card debt, which is credit of choice or default when paying for every day consumption is far from cheap (still in the 20% plus range). Low interest rates policies has not filtered down to the average person. (Yet here in Canada the debt-income ratio has grown 160% of income)
As long as there is insecurity on the job front, prudent consumers will not take on additional debt at any cost. To say that the job situation is precarious would be an understatement.
With current levels of Government deficits and skyrocketing debt levels, we know that two things are likely to happen, taxes will go up and we will be paying more for services (health care and so on). Both will cost us the taxpayer money, so we don’t spend.

This is far from and exhaustive list but you get the idea.

There is a lack of confidence in our financial futures, Low interest rates does that. It puts us in survival mode. So many of us stop spending. We are like squirrels who know it is going to be hard winter. They gather as many nuts as they can an get prepared to bunker down for the winter. We are bunkering down for a long cold winter, that may last years.

Governments should gradually raise interest rates. This would allow those who have savings to generate more income from those savings as increasing of interest rates will make this happen. As we gain confidence, we will start to spend. Only this time we will be spending money we really have not money we have to borrow.

For those with little or no savings, higher interest rates will mean we will have an incentive to save. Our money will grow without having to chase high risk options. As our saving accumulate we feel more confident and we start to spend some of our savings. Again this is our money, not money we have to borrow.

Low interest rate policies have not worked and they will not work (Japan).

The longer governments continue on this path the worse things will get.

Higher interest rates may reduce spending and stunt growth in the short-term. Will this result in another recession, perhaps.

But if we can believe what we read, many financially solvent companies have huge amounts of cash sitting around, but are afraid to spend it. A more stable sustainable economy would lend itself to investment by companies. Real interest rates ( in the 5-8% range) could really give us the sense of normalcy that is currently lacking.

Since low interest rates polices do not work, is it not time to try something else.

Until next time.

Gord

US Government Debt worse than Greece

noreply@blogger.com (Gord Morrow) — Wed, 31 Oct 2012 12:00:00 +0000

There is lots of media coverage about how bad the debt situation is in Greece. There seems to be no doubt they are broke.

Are we as concerned? Yes!

Do we feel that the Greece debt crisis will bring the world economy to it's knees? Of course not. Greece is a very small fish in a big pond.

When it comes to our concerns about Spain, we get a little more nervous as Spain is one of the larger economies in Europe.

But what if the US is broke and is carrying debt it can never pay off? Would the world economy be concerned? Damn right it would!

Well folks the USA is broke and it will never pay off it's debt!

Don't believe me, then check out what a retired IBM accountant has to say in this video.

Are you concerned now?

It is less than a week before the presidential election. Ask your candidates for president and congress about this. What are they going to do to fix it.

As you all know, the US is the big fish in the pond, if they are screwed, we are all screwed.

What do you think?

Until next time.

Gord

What do you Want?

noreply@blogger.com (Gord Morrow) — Mon, 29 Oct 2012 12:00:00 +0000

We hear it nearly everyday, were carrying too much debt and we are not saving enough for money for retirement. Many of us are living from paycheck to paycheck and for about 25% of the population even a late paycheck would be problematic.

So since we know we have a problem, why are we not doing anything about it?

It seems some of us are. Consumer debt in the US continues to decline, yet we Canadians are still racking up the debt, reaching new highs in income/debt ratio every month it seems.

When it comes to saving for retirement or saving in general we still are not making any real progress. Savings rate for the average household in the US for 2010 was 3.9%, 2.8% in Japan, while the Chinese have a 38% saving rate according to figures compiled by Bloomberg Business week magazine, using statistics from the World Bank and the Organization for Economic Cooperation and Development, along with other data.

So why, with the exception of the Chinese, are we still not saving? We have been warned, perhaps too often about too much debt and not enough savings.

Perhaps it is because we DO NOT KNOW WHAT WE WANT! We don’t have Life Goals!

Bruce Sellery (author of the book Moolala) talks about the need for Life Goals. If we do not know what we want out of life it is hard to think seriously about money and what we want from our money.

Life goals can include the usual things like retirement, paying off debt, buying house, paying for our children's education, and taking vacations.

Life goals can also include things likes spending time with your new born baby, changing careers to seek more fulfilling work, having time to volunteer for a cause that is dear to your heart.

Even if you have life goals and perhaps many of us have, nearly all have a financial component or consequences.

Perhaps the reason we do not get a handle on our MONEY is due to the fact that we separate our “Life Goals” from our “Financial Goals”. Yet if our life goals do have a financial component to them, the cannot be separated.

You can have the life goal to retire, but if you do not look at how much money you need to achieve that goal and do something about it, you will not achieve it.

Every dollar we spend has an impact on our life goals. When we spend money we don’t have (take on debt), it has consequences in terms of meeting our “life goals”.

So perhaps we are focusing on the wrong message. Telling us not to accumulate debt and too save for retirement is not working. We need to be challenged to address the the question: “What do you Want”?

My challenge to you is to do that very thing, discover what you want.

Don’t know how to start! Try the FREE Moolala Dream Kit as a tool to get started.

Until next time.

Gord

Deeper in Debt!

noreply@blogger.com (Gord Morrow) — Mon, 22 Oct 2012 11:00:00 +0000

According to a recent Financial Post article: Canadians deeper in debt than thought; when it comes to debt, we Canadians are much worse off than we thought.

In 2011, the ratio of household debt to income was 161.7%, up from 150.6%, under a new system of economic accounting adapted by Statistics Canada agency.

So far in 2012, the debt-to-income ratio continued to rise to 163.4% in the second quarter of this year from 161.8% in the previous quarter.

The new system is using the international standard for calculating debt-income ratio’s, so now Canadian figures are based upon the same set of criteria used by other nations such as the USA.

It is increasing clear that we as a nation are addicted to debt.

It is not surprising since we have such low interest rates and credit has never been easier to get.

Add to this the fact that our governments continue to borrow to pay their bills.

Interest rates remain low for one simple reason, we want people to spend. It seems trying to maintain economic growth at all cost is the mantra of the 21st century. In the old days, to expand our empire, we waged war and conquered to expand our riches and thus our importance as a nation. Now it is the country who can claim the title of having the largest economic growth that is the winner.

Over the past number of years we have experienced wage stagnation but have managed to continue economic growth through consumer spending. That spending was possible because of cheap interest rates and easy credit.

How far into the future are we as individuals and nations willing to literally mortgage our future to try to propagate the illusion of wealth?

True wealth is comprised of much more than money. To measure this we need to look at the overall wellbeing.

In a previous post: The Wellbeing Index: Measuring what Really Matters, I outlined another approach to looking at how well we are doing as individuals, as nations and as a global community.

If we can change our way of thinking as individual and communities we may be able to get our government to reconsider using economic growth as a measure of our health as a nation. Then perhaps taking on debt to sustain economic growth will become yesterdays news.

How much deeper in debt can we go? How long will we continue to strive for economic growth at all cost?

I do not know but I do agree with what Dr Wayne Dyer wrote in his book, Change Your Thoughts – Change Your Life:

“Analyst might tell us the economy is failing if it is not continuously growing, but we can realize that excessive growth, like cancer, will ultimately destroy us”.

With all the debt in the world today, we may not be far from financial destruction.

Until next time.

Gord

Minimalism, Simple Living, Less is More!

noreply@blogger.com (Gord Morrow) — Mon, 15 Oct 2012 11:00:00 +0000

I promised this post would be about my favorite blogs on Minimalism or Simple Living what ever you want to call it.

There certainly is no shortage of material on the web related to these topics.

A Google search for Simple Living yielded 248.000.000 hits. The same search for Minimalism came up with 11,100,000 and Voluntary Simplicity a mere 1,210.000 hits.

So what is Simple Living or Minimalism?

I did some searching and there a endless version of what these mean.

What is Simple Living?

According to Michael Mortvedt of Simple Living; Simple Living is:

freedom from stuff and over-consumption.
living intentionally and with integrity.
caring for the Earth and Earth's inhabitants.
an act of faith and a spiritual discipline.
living ethically.
a political act and an economic revolution.
time tested and patriotic in the spirit of Thoreau.
anti-empire and pro-community.
our future as a species and a planet.

I also like what Serena, The Everyday Minimalist, says in what she refers to as
A Minimalist’s Train of Thought:

Less money spent means more money saved
More money saved means the longer you can live in financial peace and security
Financial peace and security comes from owning less
Less stuff owned means less to carry around, move or have to travel with
Less responsibility for your stuff also means less maintenance and more time
The more time you have, the more relaxed you will feel
The more relaxed you are, the less you will care about stuff
If you care less about stuff, it means you’ll care less about image
If you care less about image, you will care more about experiences and memories
If you care more about experiences and memories, you will be happier with less
If you are happier with less, you’ll never want or need for more
The less you want or need for more, the more you will feel free

I read a lot of great blogs about simple living and minimalism.

Here are my top 4:

Be More with Less: by Courtney Carver. A recent post on her blog talked about the Difference between Simplicity and Minimalism.
Becoming Minimalist: by Joshua Becker. He is also the author of a couple of books (Simplify and Living with Less).
Miss Minimalist: by Francine Jay. Francine is the other of two books (The Joy or Less and Frugillionare)
Zen Habits: by Leo Babauta. Leo has written numerous eBooks and one print book.

Of course if you want to put your version of Simple Living or Minimalism to the test financially, then the New Road Map Foundation and their Financial Integrity Program can be a great resource to help you define for yourself "How Much is Enough”.

Is Simple Living/ Minimalism something you feel you could embrace?

Do you have any great site or resources? Let me know and share them with others.

Until next time.

Gord

A lesson about Stuff

noreply@blogger.com (Gord Morrow) — Wed, 10 Oct 2012 11:00:00 +0000

This past weekend was Thanksgiving weekend here in Canada. Though not as grand as US Thanksgiving, it is none the less a time when families traditionally get together to celebrate how fortunate we are.

I used one of the days to make an infrequent visit to see my mom and dad some 2.5 hour away. A visit to see my parent is always hard for me. My mother is in a nursing home as she suffers from dementia. My father lives on his own and often feels bad that he can not take care of her.

Our visit turned out to be a good one. My dad talked a little about how about life is for him. We witness again first hand how much he still loves her, but how at times my mom really is not sure who he is. Yet, the next moment she does know who he is and is wondering why she cannot go home with him .

My mother has always been a person who kept everything, after all you never know when you may need it was her mantra. Despite not having a lot of money, my mother has accumulated a lot of stuff , much through garage sales, auctions and so on.

My dad is trying to purge some of this stuff now, knowing that my mother will never be coming home. He has made a good start and their home looked the least cluttered I had ever seen it.

My mother's room at the nursing home has a very small closet and a couple of drawers in a small dresser that she can keep all her things. It is such a contrast to how much stuff she had at home. Does she miss her stuff? I don't know, but she seems to have everything she really needs.

I have long been a strong proponent of simple living, or what is often referred to today as minimalism. I am constantly evaluating my possessions and I am trying to reduce the number of things I own. I still have a long way to go.

I also often talk in this blog about having less, will often give you more.

More MONEY, as you will spend less and save more.

More TIME, as you will have to dedicate less time to working as you need less MONEY as you spend less.

Seeing my mother's life now in terms of her few possessions and what she really needs to live, it became abundantly clear that we all need very little. May be not as little as my mother, but certainly a lot less than most of have now.

Why do we strive to accumulate so much? Is it social pressures? Is it because we do not feel happy unless we have a lot of money and stuff?

I don’t know why, but I believe it is something we should all think about.
In the end we need very little. My mothers life has re-enforced that for me.

We came into this world with nothing and we leave with nothing. We could simplify life a lot by not working so hard to accumulate stuff while we on this earth.

My mother’s life has taught me that I need to start to let go of stuff (I have already started). I do not want to wait until I am sick and in a nursing home to simply my life.

May be some of you reading this may feel the same way!

If you do feel that way, in my next post I will share some of my favorites blogs and websites dedicated to Simplifying Life.

Until next time.

Gord

Cut Expenses or Second Job?

noreply@blogger.com (Gord Morrow) — Fri, 28 Sep 2012 11:30:00 +0000

When reality hits home and we finally discover that we are spending more than we make and our debt becomes problematic (my view of course is any amount of debt is problematic), the sage piece of advice has been to spend less.

Perhaps that is not the best advice. In a recent article: maybe a second job would help, the advice seems to be, get another job or a better paying job. In other words, increase your income.

The author shares a story by Scott Hannah, executive director of Vancouver based Credit Counselling Society. His client was in debt up to his eye balls but instead of cutting spending, he got a second job. This client has some FREE early morning hours so got a job delivering papers and earned another $800 per month income and put this income to his debt.

The article also talks about getting a better paying job. Not impossible, but hard in these economic times. That being said, those willing to move to places with labour shortages and higher pay areas such as Alberta and Saskatchewan can increase their income. The issue is many people are unwilling to make that move.

In the real world often the answer to tackling that debt problem is to do both, reduce spending and increasing income.

Those of us who are advocates of the Financial Integrity Program (FI) as way to transform your relationship with money, do emphasize the importance of not having debt as key to attaining Financial Independence.

We do spend a lot of time in the 9 Step Program dealing with the spending side of things (Steps 2 through 6 have a heavy emphasis on the spending side). However Step 7 is: Respecting your life energy: Maximizing income.

Step 7 is about increasing your earnings, exchanging the life energy you put into your job for the highest possible income, without compromising your values or your health, for a self-defined period of time. This may mean taking on a part-time job to help pay off debt quicker.

Life is about much more than MONEY. It is also about the use of our limited amount of TIME that we have been given. In FI we prefer to think of TIME as our life energy.

The goal in FI is not maximize the amount of MONEY we have but rather to transform our relationship with MONEY so we can maximize our life energy (TIME) in a way that is in-line with our values and when it comes to work, having a choice work or not work.

So is increasing your income with a second job the answer to get rid of debt? It may be part of it.

The real questions are:

How do I want to spend my TIME – life energy in the long-run? (working two jobs?)
Do I want to continue to spend more than I earn?
Is my spending in-line with what is is important to me?

If you feel you want to answer these questions but need help, download the FREE FI Program guides or look for a study group, FI class or workshop or find a mentor in your area.

So for some of you who need to get a handle on your debt, the answer to the question, Cut Expenses or Second Job?, the answer is YES!

Until next time.

Gord

Stop Borrowing Money!

noreply@blogger.com (Gord Morrow) — Mon, 24 Sep 2012 11:30:00 +0000

Moody’s has just stated the obvious, “Government warning on consumer debt falling on deaf ears”. That is the title of a recent article in the Financial Post.

Statistics Canada reported in June that Canadian household debt to income rose to 152%, the highest level ever, from 150.5% in the previous quarter.

Our federal Government continues to warn us about taking on too much debt. The governor of the Bank of Canada continues to warn us that interest rates will go up , so it is time to reduce debt. But we are not heeding these warnings.

Why should we?

Mark Carney, the governor of the Bank of Canada, has been singing the same song for a least 2 years. But as the world economies continue to struggle and our largest trading partner (USA) stays on the path of “zero” interest rates, it appears he will not be taking any actions soon. So, we continue to borrow.

Low interest rates provide an opportune time to start paying down debt, but instead we borrow.

To really get people to heed a warning, it needs to be followed up with action. Even a marginal increase in interest rates would have an impact. People may begin to believe that there is something in the warning other than an idol threat.

The reality however, is that government do not want higher interest rates.

Higher interest rates would mean the HUGE debt carried by governments around the world would become a lot more expensive. Face it, they are already in a deficit position, they cannot pay their bills now, so paying higher interest charges is out of the question.

It is very interesting that in a effort to win the economic growth game, that all the governments are striving to have the cheapest currency so others will buy from them. It seems strange because at one time a strong currency was a sign of strong economy. Now in the new economy, it is a race to the bottom when it comes to currency valuation.

In the meantime, savers (those in retirement and saving for retirement) suffer and borrower continue to borrow. Even borrowers will suffer in the long-term, after all that debt will have to be repaid sometime.

Bottom line, don’t bother heeding empty warning. They are empty threats.

Instead just stop borrowing, because it is the right thing to do for your financial wellbeing in the long run.

Until next time.

Gord

Rent or Buy? The Time and Money Connection!

noreply@blogger.com (Gord Morrow) — Wed, 19 Sep 2012 11:30:00 +0000

It seems the debate on whether to own or to rent a home has come back into mainstream media. A recent article “Why it’s better to rent than buy”, published in the Financial Post certainly provoked a lot of discussion. At last count, 194 comments, with plenty from both sides of the argument.

The article itself dealt solely with rent vs. buy from and investment perspective. The author makes the case that despite current low interest rates and seemingly endless rise in housing prices, the answer to the question to rent or buy, would be a resounding rent.

The author argues that “it is nearly always a better financial move from an investing standpoint to rent rather than buy".

The main reason is we under estimate the real cost of home ownership.

Firstly we usually ignore the opportunity cost of not having invested your downpayment somewhere else. I suppose not a big deal for the zero down people, but if you put 10%- 20% down, the loss of income and growth from that downpayment can be huge.

Plus there are the other costs like:

land transfer costs, you pay both buying and selling
sales commission
property taxes, maintenance
mortgage cost, interest charges even at historic low still add up.

There is even a tools (Canadian Version, US Version) to let you compare rent vs. buy option.

I tend agree that from a financial perspective renting is superior to buying . That being said, I am a renter by choice, in part for those very reasons.

But home ownership is much more than a financial choice. It is much more an emotional decision than a financial one. Many people feel better about themselves and their overall sense of wellbeing when owning their own home.

Societal pressure and social status can also heavily influence your decision to buy a home. Renters are often given second class citizen status when compared to owners. Look at that poor fellow, can't afford to buy a home. If you state it is your choice then they will give you the often quoted “are your crazy, you are paying your landlord’s mortgage for him.”

For me and many like me, choosing to rent is a lifestyle choice.

Renting gives me a fixed amount of money I have to pay each month, no repair bills, not maintenance, no worries.

If I chose to move after my years lease has expired, I can do so with a mere two months notice. No house to sell.

For me, I can make better use of my TIME and MONEY.

Because my monthly costs to rent are lower than buying, I can choose to work less, as I need to earn less money. I also do not have to dedicate time to lawn care, maintenance and repairs. I can use my TIME for things that are to my liking.

Because I have my MONEY in investment assets, I earn a passive income stream from those investments. This MONEY allows me have more flexibility in what I do with my TIME as I don’t need to work extra hours to earn that money.

I am not paying interest payments to the bank for the privilege of staying in the home that they really own but let me live in as long as I make my payments. Again this frees up both TIME and MONEY.

My guess is that if the decision to buy or rent was purely a financial one and if people did the math, more would choose to rent. I encourage you to do the math. The TIME and MONEY you would save could change your life for sure.

If you do that math and still choose to buy, great, at least you know you are buying for non-financial reasons and those reasons are truly the only real reason to buy.

Until next time.

Gord

Multiple Income Streams Key to Financial Stability

noreply@blogger.com (Gord Morrow) — Fri, 14 Sep 2012 11:30:00 +0000

I am a strong supporter of having multiple streams of income. I have long believed that the more sources of income you have coming into your household the better.

I will go so as to say that Multiple Streams of Income is one of the keys to financial stability.

This was re-enforced in my own life this past week.

My wife and I have multiple streams of income coming into our life. Our sources of income include:

Investment income
My spouses part-time earnings
income from Financial mentoring/coaching
presenting FI courses
managing a summer tennis club
providing private and semi-private tennis lessons

This past week I lost one of the sources of income.

As many of you who subscribe to this blog will already know, I am an avid tennis player. Last week I was playing tennis in the Canada 55+ Games in Nova Scotia. After my second match I started experiencing a soreness in my right leg. I played 3 more matches and the pain intensified greatly. Upon my return home, a visit to my doctor confirmed my suspicions, I have a stress fracture of the right tibia.

Treatment is 8 weeks rest (no tennis). After that I can resume on a gradual basis. Net result from a financial perspective, no teaching tennis and thus no revenue.

If my income from being a teaching pro was my only source of income, I could be in for a very rough time financially. As a tennis teaching pro you are self-employed. Translation; no sick benefits, an in my case, no disability insurance, so no income replacement options.

I know many full-time teaching pros, and if they get incapacitated even for a short time ( 8 weeks) it can be financially devastating. Many of us have very little in financial reserves to get us through a lpst of income. A recent survey found there is still 47% of Canadians living from paycheque to paycheque (down from 57% last year).

Yet for me, though I will face a financial loss as I cannot teach tennis (I have already had to turn down multiple lesson opportunities), the net effect for our financial wellbeing is minimal because it is only one of many soruces of income that I have.

How many sources of income do you have? What would happen if lost one of the sources of income? Do you live from paycheque to paycheque?

If you have only one source of income (a paycheque) and are living from paycheque to paycheque, you are financially vulnerable.

If are carrying debt, you are very vulnerable!

So what can you do?

Pay off debt, spend less than you earn and that will create savings. Use these savings and invest the money and you will have investment income. Now you have at least 2 sources of income.

Need help to take these steps? Try the FREE 9 Step Financial Integrity Program (FI) to gain control of you finances.

In the interim get a part-time job, start a small business, turn a hobby into an income stream or sell stuff you no longer need. Or find your own unique income stream.

But whatever you do, take action.

Having multiple streams of income is one of the keys to Financial stability.

Until next time.

Gord

Re-connected!

noreply@blogger.com (Gord Morrow) — Mon, 10 Sep 2012 11:30:00 +0000

I want to make a few comments on how it felt to be disconnected for over a week.

In many ways it was a great feeling to not feel obligated to be checking emails or searching the web.

That being said, it was also a very strange feeling. Many people around me were connected via laptops or tablets. They were able to easily find their schedule for their events online. Also they had ready access to any last minute changes.

For those of use who were not connected, it was much more difficult. My event was tennis and I had to walk to the Games headquarters to find out my schedule. After the event started it was simply a matter of going to the venue for updates. Fortunately, where I stayed was an easy walk from my venue, so staying on top of things was relatively easy. For others not so much as they were as far as 30 kms from their venues.

As my wife and I travelled upon the completion of the event, not having access to the Internet became an issue as far as getting directions, finding places to stay and so on.

But we managed OK and it reminded of me of the good old days, before the Internet, and email. A simpler time when were not tempted to check our smart phones for the latest emails or text messages.

As I sat throught the opening ceremonies for the Games, I was able to just take in the occasion, unlike many around me who had their smart phone going texting and talking. They certainly were not in the moment.

So what have I learned from being disconnected?

I can survive without the Internet
I was given a chance to live in the moment and focus on one thing at a time
I can learn (or re-learn) simple skills to get the information I need; like using the phone book, asking for directions, asking for help
Though the Internet does make some things easier, so much time can be wasted while connected

Though I am re-connected again, I have pleaded to give myself a digital free day each week.

If you do not do so already, disconnect for one day a week. You may find it very refreshing, like a mini-vacation each week.

Next time: Multiple Income Streams Key to Financial Stability.

Gord

TIME to Disconnect!

noreply@blogger.com (Gord Morrow) — Mon, 27 Aug 2012 11:00:00 +0000

As I head off to Sydney NS to compete in Tennis at the Canada 55+ Games and a mini vacation, I have been debating with myself whether to take my laptop with me.

I certain could justify taking it. I have a number of events that will be happening at the tennis club I manages shortly after my return that will need to be addressed. To stay connected via email or publishing updates on the website would certainly be worthwhile.

I follow a number of blogs, plus of course writing my own would certainly warrant lugging my laptop with me.

There are numerous reasons why I should take my laptop on this trip, but I have decide not to.

We all connect in many ways. We connect in person with friends and family. We may connect on a spiritual level.

What many of us do is connect to the worldwide web. Between emailing, reading blogs and news publications, following our favourite sport or activity, we can spend a lot of our time in cyberspace.

Do not even get me started on smart phones and texting and so on. These actvities can often mean we are connected 24/7.

I feel we are over-connected but not in a truly meaningful way. Our facebook friends , our twitter friends, our linked-in connections; these are not real connections. How much time do we really connect via face to face contact with our friends, family, even our spouse/partner?

Our connection via cyberspace can often be a way of filling TIME. A way to numb the boredom or to avoid dealing with real life. I know. I am guilty as charged.

So it is my wish to see what it is like to not be connect. To disconnect from cyberspace.

How do you feel about your connection time? Do you spend too much time connected via a screen and too little face to face? Could you stay disconnected for a period of time, even 24 hours?

Try it with me and see how it goes. By disconnecting we may in fact be connecting at a higher spiritual level.

Let me know how you feel about disconnecting! Make a comment or send me an email about your view on being connected.

But please remember, I am disconnected so I will not be responding for at least 10 days.

Until next time.

Gord

How do you recognize a financial guru?

noreply@blogger.com (Gord Morrow) — Fri, 17 Aug 2012 11:30:00 +0000

I just read a recent article in the Financial Post “Finance guru explains how to live on $21 a week”. The story is about Fiona Lippey.

Lippey is one of Australia’s foremost personal finance gurus, known for her hit $21 Challenge book series and its website, SimpleSavings.com.au.

Frugality is the central them of her message. One that preaches spend less than you earn.

Lippey told Business Insider, and “I learned you could make a lot of money by saving money.”

It seems though that saving money as a way to make money is not considered by many to qualify one as a financial guru.

One such comment posted is as follows:

The standards for becoming a "finance guru" are getting lower all the time. Used to be someone like a Warren Buffet or a Sir John Templeton were the finance gurus

There were of course supporters as well. One such comment is:

I'm always amazed at the number of people who jump on anyone who advocates a meticulously frugal lifestyle. I saw the authors of the Tightwad Gazette on a talk show 20 years ago and I thought they were absolutely on the mark. However, the audience was actually yelling insults at them for making their own jam, cutting their own hair and not buy designer clothes for the kids. Here was a couple that owned a big rural New England home and raise 4 kids on a single military man's salary.

I have always been a somewhat prodigious saver and that show made me feel good about embracing the idea of spending/wasting less leaving me more to direct where it would do the most good. You may not be able to live on $21/week but almost all of us could live on less than we do. I applaud those who use their brains and
discipline to work less, spend less and save more.

In one FP column, readers are constantly jumping on other peoples' budgets for being too extravagant in one way or another; if they weren't so frivolous they would not be in such financial trouble. Yet here are readers criticizing others for wanting to be able to live on less. Go figure!

I find it amazing that when I meet peole for the first time and I tell them I have achieved Financial Independence and that I help other people work toward Financial Freedom/Independence, the first thing they want is a tip on how to invest their money.

I know nothing about them and they know very little about me, but they all want the quick fix. When I say the most important thing they can do to lead to financial independence is to spend less than they earn, for many that is the end of the conversation.

So are those of us who advocate spending less than you earn as the path to financial freedom gurus?

Besides the fact that I hate the word guru, I believe they are as much or more so than those who profess how one can become rich by investing.

All the investment advice in the world will not help anyone if they do not have money to invest. And despite what some may lead you to believe, you can not borrow your way to financial independence.

The only way to true financial freedom is though controlling spending. eliminating debt and investing your savings, in that order.

So I believe that the true financial gurus are the people who help people do just that.

The teachers who speak of simplicity or being frugal or of using the 9 Steps of the Financial Integrity Program (FI), these are the true financial gurus (if there is such a thing).

I will close with the following comment from the article Finance guru explains how to live on $21 a week:

Very good article, it reminded me to concentrate on what it matters! Saving money by spending less.

Until next time.

Gord

RECESSION PROOF: VOLUNTARY SIMPLICITY KEY TO LIVING WELL EVEN IN A RECESSION

noreply@blogger.com (Gord Morrow) — Mon, 06 Aug 2012 11:30:00 +0000

This a re-published article I wrote that first appeared a few years ago in the Simply Living Network Newsletter (Simply Living Network is now part of the New Road Map Foundation who bring you the Financial Integrity Program). I have posted this on my blog as I believe that the world is headed for another recession. Much of Europe already is in a recession and Greece is in a depression. For those who did not heed the warning and did not take action the last time, you have another chance to recession-proof yourself. But start now! You may not have much time! So here it is:

Congratulations to everyone who has joined the voluntary simplicity movement, you have put yourself in the enviable position of living with abundance even in bad times.

The world’s economies are clearly in a recession that promises to be deep and prolonged, despite government’s attempts to control the outcome by lower borrowing cost to near zero, providing huge bailouts to financial institutions and the auto sector, and massive spending that they cannot afford. These measures will not work and they seem to be tied to the need for continuous growth as a measure of prosperity.

It is the need for continued growth that has led to the financial crisis facing the world today. Dr Wayne Dyer in his book Change Your Thoughts – Change Your Life says “analysts might tell us the economy is failing if it is not continuously growing, but we can realize that excessive growth, like cancer, will ultimately destroy us”. Since the governments of the world seem to believe the analysts, it is up to the individual to realize that excessive growth can destroy us and do something about it for ourselves.

So what can the world as a whole learn from the voluntary simplicity movement?

For those of us who follow the guiding principles of voluntary simplicity or Simple Living, it does not matter what you call it, we all have some common rules we live by. It is these common sense rules that help create a recession proof life for us.

So what are some of these common sense rules to live by that makes one recession proof?

Spend less than you earn. This is the key to financial security in good times but especially in bad times. With spending said to be in the range of 125% (now in 2012 it is over 150%) of yearly income for many in Canada and the US, it is little wonder when faced with job loss or reduced income, people find themselves in financial crisis.
Live Debt free. Debt is the modern day form of slavery that takes away freedom of choice and makes us stay chained to jobs we no longer like. Though there is no debtors’ prison in the literal terms, figuratively, debtors’ prison is alive and the bars are stronger than ever.
Take control of your financial life by controlling spending. Too often people feel that the answer to their financial problem is that they do not earn enough. If I had a better paying job all would be ok. Making more money is not the answer. Firstly, study after study shows that when people make more money they just spend more. Secondly, few people have control over how much they earn. Yes you can take another job, maybe work more hours, if there is extra jobs to be had. You can’t control this and it just makes you more of a wage slave and reduce your freedom of choice even more.

Spending however is fully within your control. Everyone with some effort can find ways to stop spending or spend less in all areas of life. Yes, it takes a little planning and some work, but once you have spending under control you now control your financial life. Keep track of your spending and review this to find ways to reduce or eliminate areas of spending that do not fall in line with what is important to you.

Establish an emergency fund. Next to reducing debts to zero, having money set aside for unexpected events is key to financial freedom. Since you have already taken control of spending, there will not likely be many surprises here, but an unexpected reduction in income due to job loss is not within your control. Have enough set aside to pay for several months of basic living expenses (food shelter, transportation). It use to be thought 3-6 months worth of basic living expenses was enough, perhaps now 6-9 months maybe more appropriate.
Save for the future but save with a purpose. Saving without knowing for what purpose will not work. Plus, you will never know when you have enough. Some savings will be for future expenses. Replacing an automobile if you still feel the need for one. Replacing the roof on your home, travel and various other reasons require savings to finance these. After all, you are not going to use debt to pay these types of expenses.

You need to save money to invest and create an income for when you chose not to work for pay or so you can reduce hours at work. This is necessary for the next step.

Have multiple streams of income. Most people have very limited sources of income, usually a paycheck, or perhaps two if both spouses work. The more sources of income you have the more control you have over your life. It is better to have two smaller paychecks for two different people than one large paycheck. You lose that large paycheck and you are in trouble. Just look at families who have multiple family members working at one of the auto companies. They all risk losing their jobs. So try to have family member work in different industries to diversify income.

Having savings invested to generate interest income is another source of income. Be creative, write articles, have a small business, sell handcrafted jewelry, or grow and sell vegetables. Bottom line, the more streams of income the better position you are in to weather any downturn as you will not lose all your income at once.

Live your life consciously. Do not be influenced by what others have or do not have. Whatever you buy make sure it is what you want. Do not get talked into a house bigger than you need or buying a new car to keep up with the latest trends.

For those who want more information on how to put this common sense into practice, there is no better resource than the Financial Integrity Program from the New Road Map Foundation. The 9 Step FI program is time tested and all the materials are FREE to download. If you can live by these guidelines you too can be recession proof.

I think Henry David Thoreau summed up the key to living recession proof when he said “A man is rich in proportion to the number of things he can afford to let alone”.

Until next time.

Gord

Are You Prepared for the Next Recession?

noreply@blogger.com (Gord Morrow) — Mon, 30 Jul 2012 11:30:00 +0000

Canadians faired much better than many countries during the 2008 financial crisis but perhaps not the next time.

Most counties including the US, Britain and most of Europe saw housing prices sink like a stone. Job loss was more significant and the need to bailout banks was prevalent in these countries as well.

Canada had job losses but small on a percentage scale relative to that of the US and many other countries.

But what about the next recession?

Much of Europe and Britain are already in a recession. Greece is in a depression. The US economy is slowing! So Canadians watch out because we are next. We rely on trade to these countries to maintain a strong economy, so if they are doing poorly so will we.

The average Canadian is ill prepared for the next recession, despite having the opportunity to make changes during the last economic crisis.

Canadians have had debt levels continue to climb to record levels, while others, like the Americans have seen their debt levels decline. We have seen our housing prices rise so they are not affordable based on our levels of income.

So what can the average Canadian do?

Well according to Anil Giga is a financial advisor and branch manager with Assante Wealth Management in Calgary in here article in the financial post: Why consumers are unprepared for the next financial crisis, you can take action.

Here is Anil Giga’s checklist:

- Build up a safety nest of at least six month’s expenses.
- Don’t live within your means, live below your means. The bigger the margin, the more you save.
- Get rid of debt. If you have investment properties, consider selling them as soon as possible, as this winter may be too late.
- If you have a mortgage on your home with a floating rate, consider locking in the rate for between three to five years. Similarly, with lines of credit that you cannot pay off. Interest rates may jump without warning.
- Pay off your higher interest rate debt, such as credit cards, first.
- Look for a secondary source of income to increase your safety net, such as a part-time job or by renting out an eligible basement.
- Expect a lot of volatility in the stock markets. If you have money invested in the markets that you may need soon, you shouldn’t be in the market.
- We are entering an age of frugality, so be frugal, but not cheap.
- It would be wise to put off big-ticket purchases and make do with what you have.
- If you are considering selling your home to buy another, make sure yours is sold first or you risk being stuck with two homes and extra debt in an uncertain economy.
- Think twice about quitting your job.
- Reconsider whether you need all the cars you have. Each car has hidden costs.

Interestingly enough, this checklist is very much inline with the principles of the Financial Integrity Program (FI). So if you want to implement a strategy to prepare for the next recession then start working on the 9 Steps of the FI program. The materials are FREE to download from who follow the New Road Map Foundation. (NRM).

So it not just me that has been advocating for sometime that you need to take control of your financial future, so are some financial advisors.

You have a choice if you take action now, if you do not then it is not like you have not been warned.

And if we for some reason we don’t have another recession right away (we will sometime), you will have taken charge for your financial life.

Either way, taking action to control your financial life is a win-win situation!

Until next time.

Gord