Getting Away

"Good for the body is the work of the body, good for the soul the work of the soul, and good for either the work of the other."
-Henry David Thoreau

One of my goals for this year is going to be to get away at least twice to do some reflection and spend time with God. Another goal is going to be to do 2 outdoor adventures. On the 4th and 5th of February it looks like I will be able to do both! I'm planning on getting together with two other guys and going up to Pinawa for some monastic stuff, some hanging out with other guys stuff, and some XC skiing. Good for the soul, good for the body. I very much need it! We have some extra space available so if you know me and would like to come along, feel free to email me for the details!

5 Ways To Find Investing Money

"Cast your bread upon the waters, for after many days you will find it again."
– Ecclesiastes 11:1

Saving is good, but I've heard it said that saving money makes losers of us all. How you ask? Because saving money usually ends up in you losing money, just not as fast as spending it. Let’s say you are making 2% a year in a savings account. If you realize that you will be taxed a significant percentage of that and that inflation will increase faster then your interest rate you’ll see that you are actually making minus percentage points. Yikes. One alternative to this slow bleeding of resources is invest and make your money grow. But how do you get the money to start investing with? Here are a few ideas:

1. Pay Yourself First. Almost everyone could put 5 to 10% of their income aside (first) every month and then invest it. This is by far the easiest and most productive way to raise money for investing. It is a great habit to get into. If you are on a salary, you could start with a small amount and have it automatically taken off your cheque and put it into an account until you have enough to purchase an investment or asset that will make you money.

2. Windfalls. Most people over their lifetime will receive a windfall, an unexpected blessing of money. Maybe it will be a lottery, a contest, an unexpected tax refund, an inheritance, etc. Instead of blowing it all on something that will depreciate quickly (like a car), why not put the lion’s share into an account for investing? That way when opportunity knocks you’ll be ready.

3. Sell something (or somethings). Most people have between $500 and $1500 of things around their house that they could sell. Or if you have a $20,000 vehicle, you could sell it and buy one for $10,000 leaving you with $10,000 to invest. Your $20,000 vehicle will only depreciate anyway, why not use some of it’s value to make yourself some money?

4. Use the equity in your home. Many people look forward to the day they pay off their house, but in the meantime that equity (the difference between what you owe and what your home is worth) is doing nothing. Why not unlock some of it and use it? We did this to purchase our first rental property – we didn’t even have to take any money out, we just used it as collateral. Another great way to use your home’s equity is to get a line of credit. The interest on a l.o.c. is often extremely reasonable. Just be careful that you invest in something relatively safe when using borrowed money.

5. Work a bit more. Doing a little work on the side (consulting, babysitting, etc) or even working overtime is a great way to make some extra money to invest. Even $100 extra a month is $1200 a year.

Financial Goals

I just read this morning that research shows that writing down your goals makes you much more likely to accomplish them then if you just visualize them. I was thinking about financial goals and their importance. Do you have any financial goals for the new year? Would you like some (or even one) but aren't sure where to start? Here are a few potential ones:

1. Give (consistently) a portion of your income. Whether it is the classic 10% or something more or less, giving is perhaps the greatest financial habit you can master. Why? Because it makes us feel good and shows us that we are not slaves to our income - we are the masters. For Christians, giving is a unique form of worship that is both a command to be obeyed and a blessing to be experienced.

2. Spend less then you make. The reduction in stress one feels when one keeps one's spending below what one is making is huge! I have met many people who make less then $40,000 a year who are much more at ease and less stressed then their "wealthier" friends who make 2 or 3 times what they do (but spend more then they make). The first kind of couple are wealthier - they have something left over at the end while their "richer" friends are in the hole.

3. Pay off debt. Setting aside a portion of your income to pay back debts builds your self esteem and reduces your stress. Even paying off smaller debts has great benefits.

4. Buy some assets. Purchasing things that put money into your pocket (instead of taking some out) just makes sense. It is short term gain (going without that new TV or car) for long term gain (seeing your nest egg increase, adding to your monthly income). Assets include stocks, real estate, small businesses, etc.

5. Pay yourself first. Putting aside a percentage of your income every month to invest will pay off in 5, 10, or 20 years (depending on how aggressively you invest). After giving, this is in my mind the most important thing you can do for yourself financially.

6. Track your income. Also known as (ahem) budgeting, tracking your income causes you to face the truth about where you are at and find ways to achieve your hopes and dreams. Budgeting takes a lot of discipline at the start but when it becomes a habit you'll wonder how you ever lived without it!

7. Increase your income. Instead of complaining about how you don't have enough money to meet your needs (or wants), take action. Set a goal to increase your income by a certain amount. If you don't know how, then brainstorm and research. Ramit Sethi has a lot of ideas in his "An Extra $1000 a month challenge."

8. Learn something new. If you aren't quite ready to take action, maybe you can inspire and educate yourself. There are plenty of good books out there that will not just tell you things but inspire and motivate you to do better with the money God has given you.

9. Find a mentor. Do you want to handle you money wisely? Then find someone who does so and ask if you can learn from them. Most people who are wise with finances learned it from others and are more then willing to share. Arrange to meet with them once a week/month/quarter to hear what they have to say and let them speak into your life.

10. Pray about your finances. Many people believe that the more faith you have, the less you think (or care) about money. Yet the Bible is full of advice, thoughts, warnings, and encouragement about how to use the money we get. God does care about these things. Praying for wisdom, control, balance, and that He would take care of you and your family when it comes to finances is a great thing to do. To make sure you are praying healthily, it is good to study what the Bible says about money and keep those thoughts in mind as you pray. God isn't Santa after all.

So there you go, 10 basic potential financial goals for the new year. Let me know if you think of any more.

Adventures In Stock Investing

If you’d told me a year ago that I would be doing a post on stock investing I would have laughed in your face. Seriously. Then I would have lectured you about the volatility of stocks, their meager returns, and why real estate was such a better way. So it is with a bit of sheepishness and humility that I now say “I was wrong.” Investing in stocks can actually be . . . (ahem) smart.


So how did I get involved?

I have a co-worker who mentioned that her husband invests in stocks. Not only that but he’s trained hundreds of people on how to do so and is quite successful. This is his job – just buying and selling stocks - and training others how to do it as well. He has his own system that he’s developed and she wondered if I would be interested in talking to him. I asked about his returns (which were enough to intrigue me) and then got an email from him a little later. He explained his system to me and told me how it works. And he showed me his record. These were enough to convince me that I’d stumbled onto something spectacular and after some thinking and praying told Jobina “We’d be fools not to try this out!” So I signed up for his coaching plus you pay a monthly fee to be subscribed to his website (where he publishes stock picks as well as runs analysis on the market to help you pick your own).

I have now been doing it a little over 6 months and in that time I have made over a 35% return. I think that’s pretty good and I don’t know if I could do that again (or if I could make more) but I’m content so far. I get into stocks that have momentum and then sell them once they reach the targets that my coach has set out. The goal is never to hold onto any stock for more then 5 days. My biggest loss was about $300 and my biggest gain was just under $1000 (that one was a bit lucky!). I started out with a self-directed TFSA (at Questrade) maxed out to $10,000. By the way, the TFSA is an investor’s dream – you will never be taxed on any of your earnings! I love my TFSA like my own children. To me, it is a gift from our government - take advantage of it while it’s still around!

I found out that investing in stocks can play havoc with your emotions, especially at the start. When you “win” you get a rush and when you lose you feel down and depressed. And yes, you will lose. I found out that I’m not good at taking losses (never had to in real estate) but that it is a necessity in stocks. Luckily I have won much more then I lost. This kind of investing is much like gambling (although farming is a form of gambling too – so is every form of earning income) and so I don’t think it is for everyone. I’m really enjoying it and while I wouldn’t invest everything I have in stocks, I’ve definitely changed my mind about them. My monthly fee that I pay my coach is easily offset by my gains – and if I had more money to invest with the cost to be would be even more reasonable.

When I told my Mom about my stock investing she laughed and said that is what my grandpa (who died when I was 8) also was into. I like the fact that I discovered this on my own, yet it connects me to my grandfather. I think that he would smile, knowing that I’m investing like he did.

Story: The Mexican Fisherman

I really enjoyed this story when I read it in The Four Hour Work Week recently:

An American businessman was standing at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish.

“How long it took you to catch them?” The American asked.

“Only a little while.” The Mexican replied.

“Why don’t you stay out longer and catch more fish?” The American then asked.

“I have enough to support my family’s immediate needs.” The Mexican said.

“But,” The American then asked, “What do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take a siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds you buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats.”

“Instead of selling your catch to a middleman you would sell directly to the consumers, eventually opening your own can factory. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, senor?”

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO (Initial Public Offering) and sell your company stock to the public and become very rich, you would make millions.”

“Millions, senor? Then what?”

The American said slowly, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos…”

Alternative Investing Opportunity

Ah, the wacky world of investing! For anyone in the Winnipeg/Manitoba area who has an extra $5000 or more kicking around with nothing to do and you'd like to earn 24% annual interest on it, I know of an opportunity that you might be interested in learning about. It's an alternative investment in a company that is expanding its operations and is looking for some capital. Your money is locked in for one year but you get interest cheques every three months. Essentially you are loaning them your money for a year and they are agreeing to repay it every three months (so 4 times per year). The interest they pay is 2% a month, so you would get cheque for 6% of your principal once a quarter. Some examples:

$5000 investment = $100 per month (or $1200 after 365 days)
$10000 investment = $200 per month (or $2400 after 365 days)
$50000 investment = $1000 per month (or $12000 after $365 days)

Like most alternative investments it's a limited time offer and the broker I use expects it to be filled up by the end of the year so if you'd like me to get you more info then leave your email in the comments or if you know my email you can contact me directly.

Alternative investments are one of several great places to park your "pay yourself first" money. Investing such saved monies is crucial to a) avoid spending it when your will power gets low & b) letting it grow exponentially to serve yourself/others. Of course there is risk in any kind of investing but I would argue that there is more risk in not investing as you will someday need that money. You can't afford not to take some risks! I used to be quite closed to investing in anything but real estate but now I'm open to much more. Stay tuned for an update at the end of the year on my stock investing experiment.

Does Your Team Have The HOTS?

I recently read about the HOTS concept in the One Minute Millionaire (see my review here). HOTS stands for:

Hare - Creative Types, but bad at follow-through.
Owls - Planners and go-getters.
Turtles - Cautious Types who point out issues.
Squirrels - Details oriented person who get the job done.

(Want to know what kind of "animal" you are? Try this quick test and feel free to share if you agree or not in the comments).

The theory is that for a team of any kind to create success, the more balanced it is in these kind of personality types the better. Too much of one thing is not good. Each animal type one has it’s own strengths to leverage to make the team successful. For a more in depth description of the different animal type, check out this link. Then I invite you to take the quick quiz to see what kind of animal you are here. Interestingly enough, I am definitely a hare. I love ideas, brainstorming, creative challenges, out of the box thinking, etc.

What's also interesting is that while I am a hare, my wife is a turtle. While I love nothing then to brainstorm creative ideas (I find this fun), Jobina enjoys finding and pointing out potential problems in everything I come up with! We grappled with this early on in our marriage and while it was initially discouraging for me, I have come to peace with it. I now see it as an added challenge to come up with ideas that she can't easily crush - then I know they have some real potential! When I chose to see her "pointing-out-the-flaws" nature as a good way to make my idea generation even better then I became much happier. Interesting stuff! If you'd like to see how to apply this theory to your team, check out this chart.

Concluded: How Much Money Will Make You Happy?

I often hear the saying "money won't make you happy." Unfortunately that's just not true, research confirms it:

The Price of Happiness

Of course money won't bring you deep inner joy, but happiness is another story.

Luck and Opportunity

"You'll always miss 100% of the shots you don't take." - Wayne Gretzky


Recently I got lucky. Or did I?

I was at my children's school for a 50th Anniversary Tea. Basically it was a night of honoring the past staff, remembering good times, and celebrating the school in general. I was admittedly a little bored. In the foyer when we came in I noticed they were having a silent auction. There were about 25 prize packs to win with a bag next to each of them where you could put in a ticket if you purchased it. Some of the items looked pretty nice. I also noticed that there seemed to be alot of prizes for the amount of people attending. My quick guess was that there less then 150 people there, meaning that they had a gift for every 6 people. Since probably a lot of people weren't going to buy tickets that meant my odds looked good, quite good in fact. So I quickly bought 3 tickets for $5, deposited one ticket in three of the bags that looked interesting, and endured the rest of the evening (that is a whole other story which perhaps I will someday share).

The next day the principal of the school left a message on my machine - I had won something! I'd like to say I was surprised but I wasn't. The odds seemed to be too much in my favor. I asked Jobina if she'd mind stopping by the school and picking up my prize. She called me later and asked me if I wanted to know what I'd won. It turns out I had won two of the prizes (one prize was 2 bottles of wine and some chocolates, the other was a Garmin GPS and some slurpee mugs). Huzzah! The GPS alone is worth over a hundred dollars so I think this was a pretty good return on my "investment."

Did I get lucky? Absolutely. Winning two of the prizes does seem that way. On the other hand, the odds were extremely good. In fact I would have been surprised if I hadn't won something. All I did was see an opportunity, weigh the odds, and take action. I think that when it comes to investing (or relationships) you kind of have to do the same thing. Yes, there is always risk. But if you see the opportunity, carefully weigh the odds, and choose to take action then more often then not you get the prize. Each of those stages - see the opportunity, discern, take action - is critical. I have messed up on all three of these stages many times but when you do all three correctly you win much more then you lose. Question: What stage are you prone to mess up on? And what could you do about it? Being honest with ourselves (I'm weakest in the 2nd stage) is the quickest way to changing and improving ourselves . . .

Financial Tip: Ask To Have The Fee Waived

File this under the "You Never Know What You'll Get Until You Ask" department:

Recently I forgot to pay off my credit card on time. Doh! Although we faithfully pay off our credit card every month occasionally we don't get it in on time. This time the result was an $80 interest charge. I was 4 days too late.

Credit card companies make money off of you not just by the interest, but by the percentage of the amount the vendor who sells you something has to pay. So even if you've never paid any late fees or had any interest charged to you they still want to retain you as a customer. If you get charged some interest, just do what I did and call them. Try asking these three things:

1. Ask them if they have received your late payment. When they say "yes" you get points with them.
2. Ask them if the late payment will affect your credit score. Most likely it will not (unless you have not paid them for several months) - feel free to express you relief from this concern.
3. Ask them politely "Is there any way you can waive the interest fees?" Most companies will check your past history for a few months or a year and if you've been a faithful customer will most likely take it off. If they provide you with any backtalk or tell you what you want is impossible try this "Are you sure? I've been a loyal customer of your company for ____ years." Some companies train their telephone staff to say no once, but if the customer insists will eventually back down.

So there you go, a little way to save yourself some money. Just ask!

P.S. If you are in the habit of not paying off your credit card account every month you are most likely paying a high interest rate. Often all it takes is a little phone call to the company letting them know that you'd like the rate reduced (and hinting that you may switch credit companies if something can't be done) and your rate will drop from double digits to something much smaller!

The Money Tree

I found this interesting . . . and thought provoking. It reminded me of how people usually respond when I tell them that there are investments that make 25% a year (or how almost anyone who owns a home can own another one) - they just can't believe it. It takes an open person, someone not constricted to the ideas of what "should" or "can't be" to take advantage of the opportunities around them. And then after they see them . . . to take advantage of them. Great little experiment!

Another Way To Buy A Car

Someone was telling me yesterday about how he bought his car. He put a $10,000 downpayment (a windfall) down on it and the payments were a little over $300 a month. He was telling me about how the extra $300 a month was more of a hardship for their family then he had anticipated.

Here's another way to buy that same car. Let's say you'd like to buy a new car that costs about $20,000. You've got an old car that works so either you use an unexpected windfall or you spend a few years saving up $20,000 to buy the car.

Instead of these traditional methods of buying a car you could do his instead: what if you would take the $20,000 and instead of buying the car outright you, put it into an alternative investment with a return of 30% per year that pays monthly. Thus, the investment income per year would be $6000 (or $500 per month) - more then enough for the car payment! This is how the wise and wealthy buy vehicles - they simply buy an investment whose return will pay for what they want.

The best thing about doing it this way is that at the end of the investment (usually 1, 2, or 5 years) you get your initial investment of $20,000 back! So you get a car plus your initial $20,000. Seems like a pretty good deal to me.

Of course to do this you need to be able to save up the initial amount/receive a windfall, find an alternative investment, and manage the risk of the investment. But such things are indeed possible for the average person. Jobina and I have this kind of investment (a 30% return for two years, paid monthly). If we can do it, anyone can!

A Powerful Plan For Paying Off Your Debt

This past weekend I finished rereading "The Richest Man in Babylon." Although I read it a few scant months ago I loved the book so much and realized I hadn't yet got all I needed to out of it. I highly recommend this book of short stories (read my short review here) as it contain so much financial wisdom that is easy to read and apply. Jobina and I are trying to decide where to invest the profits from selling our rental property and so I went to The Richest Man In Babylon looking for some advice on investment discernment. I was not disappointed.

Aside from that advice I was looking for, I was struck by one chapter's story on how to get out of debt. The story is about a foolish Babylonian man who becomes addicted to spending more then he makes until finally he loses everything; his wife, his respect, his job, and even his freedom as he is sold into slavery. The wife of his new master questions him repeatedly - do you have the heart of a slave or a free man. This makes our hero angry but his master's wife tells him that if he is a man who gives in to despair and does not repay his debts then he truly has the heart of a slave. In a daring escape, our hero leaves his master and heads out across the desert to make the trip back to Babylon. Along the way he almost dies but has an epiphany - he is a free man and he decides right there and then to repay his debts and reclaim his self respect. He survives the desert and returns to his home city determined to change his stars.

He meets up with a wise money lender (one of his debtors) who is impressed with our hero's desire to better himself and gives him a wise plan to do so. First, go to each of your debtors and let them know your plan, signaling your intention to pay back your debts and how you are doing it. Then proceed with the plan as follows:
1. Put aside 10% of you income to keep as a savings and wealth builder.
2. Live on 70% of your household income, doing whatever is necessary to live within these financial boundaries.
3. At the end of each month take the last 20% of your income and divide up amongst those you owe money to.

The plan works well and within a year not only has he repaid his debts, but he has won back his wife and the respect of even those he had borrowed from. Also, he now has a nest egg for investing in his future. He goes from being a slave to a freeman who never again foolishly spends more then he makes.

I liked this plan because it is realistic and gets the person into the habit of saving/investing that 10% right away. Of course it won't work if the person in debt believes the lie that they have to spend more then they make (or chooses not to live within their means). Still, this is a good general plan that could work for almost anyone. Debt (well, "bad" debt anyway) is like a dragon and slaying it is good for your health.

Risky Business

Yesterday my son and I opened up one of my Christmas presents, the "new" version of the classic boardgame Risk. I consider myself to be somewhat of a Risk aficionado. Why? Because I have literally played hundreds and hundreds of games. I have played several computer versions, the "old old" version with the pink soldiers, the Risk 2210 version (ah, the nuclear commander rocks), and many others. My favorite is the 40th anniversary version that Jobina got me as a present one year - with it's little steel soldiers and felt pouches for all the colors it has a really nice "feel" to it.

Risk is part of my personal story. I bought my first mac computer based on the fact that there was a really nice computer version of Risk in the store. I procrastinated on scores of papers by playing several games of Risk a day on the computer whilst in college. When I got married, Jobina's Mom's family played super long (and very socially intense) games of Risk at their Christmas family gathering, going so far as to have a "Risk Champion" trophy as reward for the yearly big Christmas game. As a youth pastor I enjoyed playing many games with my students. To me Risk is not just a game, it a passion that I connect with the important people in my life.

So it was a special and tender moment to introduce the reinvented new version of the game ( to my 7 year old son. Amazingly, though it is for kids 12 and up he not only figured out how to play but ended up beating me (I was kind of going a bit easy on him when all of sudden he did a crazy kamikaze move and surprised both of us by being victorious). I really, really like the new version. It is much shorter so you can easily finish a game in 45 minutes to an hour. Not only is it faster, but the new rules meld easily with the old ones making it a quick transition from old to new. Because of the importance of objectives in this version you have to be much more on your toes, considering more variables and ways that not only can you win but how your opponents might. The game board and pieces themself have kind of a Cold War look and feel to them which I wasn't sure of at first but soon grew to like. Most importantly, the potential psychological warfare that goes on between players remains intact in this version - one of my favorite parts of the game. It was a lot of fun and I really want to play again. You need at least 3 players with a maximum of 5.

Boardgames are great because unlike TV, movies, or the internet they require several people and invite more social interaction. Although somewhat retro, I think they are much more healthy form of entertainment and I'd like to play more of them.

Tax System, Explained in Beer

I thought I'd share something a bit different with you today, dear readers. I received it in an email newsletter from joint ventures expert Robin J. Elliot:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes.

So the first four men were unaffected.

They would still drink for free. But what about the other six men? The paying customers?

How could they divide the $20 windfall so that everyone would get his fair share?’

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33% savings).
The seventh now paid $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20,” declared the sixth man.

He pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a Dollar, too. It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, this is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

-Author unknown

Pay Yourself First*

If you read The Richest Man in Babylon, The Wealthy Barber, The Automatic Millionaire, or any other decent book on financial wisdom you will invariably find this advice:

"Pay yourself first."

In other words, put aside a percentage of your money for saving and investing before you pay for life's expenses and luxuries. This money becomes the seed for your future wealth. Combine it with that other great principle:


"Live within your means (spend less then you make)."

and you are setting yourself up for financial prosperity. As long as you save and invest that money wisely (most places say to pay yourself first at least 10%) you will be able to escape the trap of living paycheck to paycheck and grow your money substantially. Also, no matter how poor you are, almost anyone can afford to save 10% of their income. Trimming 10% is usually no problem - try it and I doubt you will not see your life impacted in any significant way.

When Jobina and I first got married we were lucky enough to hear the advice to save 10% of our income every month. Basically we were told to use it as an emergency fund - something to pay for extra surprise expenses. This worked well for us but the problem was that we never invested that money - instead it either saved us when we got into financial trouble (usually through overspending) or we got undisciplined and just spent it on something "nice for ourselves." Instead I wish we would have not only put money away for emergencies/luxuries but also had the knowledge and discipline to save and invest 10% of our income, paying ourselves first. This would have been a great strategy.

As the new year is coming up it will be time to reevaluate our finances and goals for the future . . . and it could be a great opportunity for you to do the same gentle reader! Pick up a copy of one of the previously mentioned books and let it both educate and inspire you to being wiser with your money. Don't use the excuse of your debts, life situation, or low income to not take action. Try this simple exercise:

1. How much money would you save if you saved 10% of your household income for the next 1, 2, or 5 years? Grab your calculator!
2. Ask yourself: "What would it take for me to to be able to save 10% of my current income?" You might need to cut back on some expenses, go without a few things, or consolidate some debt. Realize the truth: after some initial sacrifice it wouldn't be as hard as you thought.
3. Challenge yourself to a 6 month experiment - save 10% of your monthly income by paying yourself first and moving that money into a separate account from your main one.

If you aren't currently paying yourself first and would like to try this experiment (and your mate if applicable enthusiastically agrees), feel free to let me know. Also, pick up one of the books mentioned at the start of my post for inspiration and wisdom. If you try the experiment and it significantly impacts your life in a bad way, let me know and I'll take you out for dinner to try to make it up to you! But I'm not too worried - paying yourself first is one of the wisest ways to manage the financial resources that God has given you. Good luck!

*A few people have commented to me that my post could be interpreted as saying that paying yourself first is more important then even giving back to God - definitely not what I want to say! Giving generously should be your first financial priority, but out of your remaining money paying yourself first is just smart use of your money.

The Power of Free Classifieds

When I was in my first year of seminary, my friend Dylan told me about a great deal he got on something. "Wow, where did you find that at such a good price?" I asked. "Used Winnipeg, " he replied, "That place is like crack and I check it out every day." That was my introduction to the wonder of free online classifieds.

Jobina and I have used free online classifieds to do the following:

1. find clients for my practicum (and even now for my counselling practice)
2. find garbage haulers, painters, handymen, and other skilled trades people for my rental property
3. buy a collection of Transformer comics
4. purchase several movies and DVD series
5. bought outdoor equipment like my new mountain bike, a GPS, and (yesterday) a brand new water filtration unit (retail MEC $89 - my price $40)
6. buy and sell furniture
7. drive traffic to our recent Comfree.com online house listing
8. find 3 sets of renters for our rental property
9. buy and sell a vending machine business
10. sell a house we flipped

There's probably more but that's all that comes to mind. We can't remember if we bought our van off of free online classifieds but probably. Jobina and I have literally saved thousands and made thousands of dollars by using these free sites.

There are three main online classifieds that I use:

kijiji.ca (my favorite and very popular with lots of things for sale)
craigslist.ca
usedwinnipeg.com

Once you get used to navigating, searching, and posting these sites become indispensable. There are deals everywhere! And once you learn how to figure out people's level of motivation to sell (desperate=good) you can find some exceptional deals. I often will offer less then half on things - you never know what people will go for unless you ask! We needed to move some junk from our property so we just called people - found someone willing to pick it all up and take it all to the dump for $40. They were there in half an hour, I payed them in cash, and they were gone. Same thing when we needed an electrician for our property the day before our open house. Called him Friday afternoon - he came in Saturday morning. I wanted a painter to paint our rental property and after looking through several ads emailed one and asked for a ballpark quote. He just happened to be between jobs and a little desperate so he offered to paint my 1404 square foot rental for $1500. That was pretty good but I didn't get back to him as I was busy. He emailed me again and dropped the price down to $1000!

Most people are honest and as long as you use some discernment you are pretty safe. I thought I would just share the good news for anyone who wasn't aware that these sites existed. Use them to promote yourself/your services, find good deals, or advertise the things you want to sell. Just be careful - you can easily get addicted!

Waiting...

For the past couple of weeks Jobina and I have been working on fixing up, cleaning, and finally showing our revenue property. We bought it 4 years ago when I started seminary and it seemed like it might be a good investment. It was both easier and much more difficult to do then I thought and there were many times where we were frustrated and said things like "Let's just get rid of that thing!" But we hung in there and I am proud of us. Tomorrow we hear if our counter offer (to someone's out of town offer) will be accepted. Here's hoping! These are pretty exciting times. I have to admit that I enjoy all of what's involved in buying and selling properties. It's like a sport that pays you money! Of course I say that now when all we're doing is waiting for someone to buy our property and payday to come.

Seriously though - I recommend everyone who owns a property use some of their equity to get at least one more. It's more stable and less risky then stocks and mutual funds (at least around here) and if you get someone to manage your property there are few headaches involved. If you'd like to know how we did it (and how you can do it too) feel free to contact me. After all, if we can do it anyone can! And I'll let you know what ends up happening tomorrow . . .

Real Estate Thoughts: Things Are Looking Brighter

Today I saw this article on Yahoo, talking about the values of pre-existing homes in Canada going on the rise.

OTTAWA (Reuters) - Sales of existing homes in Canada jumped 31.5 percent in the second quarter from the first and saw their first year-over-year quarterly increase since before the peak of the financial crisis, the Canadian Real Estate Association said on Tuesday. The industry group said actual home sales totaled 147,351 units in the second quarter of 2009, up 1.4 per cent from the same quarter of 2008. Home sales rose 8.7 percent in June from May on a seasonally adjusted basis. They were up 17.9 percent from June 2008, using nonseasonally adjusted figures. "This is on par with the record for the month of June set in 2007 and is the fourth highest ever for activity in any month on record," CREA said in a report. . .

I take this as encouraging news. Even thought the numbers are skewed by the major markets rebounding, overall things look like they are stabilizing. Here in Winnipeg we haven't had a decline in any values (miraculously) but it has slowed down recently. Jobina and I are strongly considering getting another rental property as we have equity that we could use for this very purpose. Although interest rates will probably slowly rise, getting a rental property in Winnipeg is a very good idea. I would encourage anyone who has a lot of equity in their house to consider getting another property as an investment. Unlike say, ahem, GM shares, which can lose all their value, real estate is definitely a more stable and reliable investment (of course risk is involved - discernment is still necessary). Also, by using your first home's equity you can actually purchase a home without a big down payment. We bought our first property and since I got a little extra on the mortgage to help pay for some repairs and cover the closing costs! I love real estate.

Don't Panic!

Well, we are into a recession.

I haven't blogged much about this much because I feel like I'm still waiting it out. How bad is this thing? Perception is in the eye of the beholder. For me it doesn't seem too bad. As a counselor, bad economic times don't really affect me much (in fact, bad times may actually increase the number of people seeking counseling). My other short term job (as adjunct faculty at Prov) isn't really effected either although there have been recent layoffs of some full time faculty. My rental property is still going strong and my equity in my houses hasn't been affected too badly (if at all) as Winnipeg/Manitoba has one of the strongest real estate markets in Canada right now. Seriously there are still lots of "offer to purchase on ____" out there which says that although we aren't in a seller's market, we aren't in a buyer's market here either. Most of the time I feel fairly secure in things. I am quite interested to see how many companies are "culled" by the forces of capitalism though. Will GM and Chrysler die? Fascinating (although morbid) stuff. I thank God that I have never invested in stocks though!

How's this recession thing affecting you? What are you seeing?

I recently read The Hitchhiker's Guide To The Galaxy by Douglas Adams which is an excellent book. His advice, which I am trying to take to heart and is pasted in big letters on the outside of the mythical book is "Don't Panic!" Simple and good advice. The book itself is amazing; a piece of genius writing really. The fact that the title was conceived by the author as he lay drunk in a field somewhere in England fits perfectly with the overall feel of the book. It was the first sci-fi comedy and its written in a deliciously dry British wit. What really impresses is the creativity that the author has and how he plays with existential and scientific themes in ways that are completely unforseeable. Seriously, every serious reader should read this book at least once. A "trilogy in four parts," the first parts are the best. When you read it, you get the same kind of sense as when you read Lord of The Rings for the first time; everyone has copied this. So many of the ideas/concepts in Hitchhiker were borrowed by other authors. And isn't imitation the sincerest form of flattery?

Anyway, I think "Don't panic" applies to almost everything. How can panicking ever help you? Panic is a poor substitution for thinking and acting. Panic is like a favorite short term coping mechanism. Like alcohol, one night stands, drugs, porn, or overeating; it feels good enough to help you forget/dull the pain/numb the emptiness but eventually you come back to real life and your problems are still there. I feel for the many people who have lost money in investments or even lost their jobs - this is a painful time. But solutions will present themselves to even those who are hardest hit - it's not the end of the world. Right?