Don't look a gift horse in the mouth!

Ok I am not asking you to kiss your sister. There is nothing unpleasant here (for you or your sister). Heck it’s practically free. I am going to break with one of my golden rules and talk to you about mortgage rates. Now before you get too excited, I am doing it to illustrate an opportunity rather than as a price comparison tool.

In the 7 plus years that I have been a mortgage broker, I have seen rates go up an down. I have seen 5 year fixed rates as low as 4.5% to as high as 6.2% for the discounted AAA rated clients. The current turmoil in our financial markets has caused a liquidity crisis for many major lenders ( specifically in the US). This has made it necessary for the US government to inject Billions into the capital markets and to the banks them selves. Our Canadian government, thanks to our stronger banks, only had to inject money directly into the capital market. Anyway back to my point, these injections of large sums of cash are now finely finding their way into a position to benefit the consumer. As a result rates are at all time lows. Current 5 year discounted AAA money is at 3.95% and this is unheard of.

You are probably asking yourself, “well what’s in it for me?”. Let me tell you, if you are a home owner and you currently have debt outside your mortgage, like credit cards ( interest rates of 17.99% or more), Car loans (6-9%), unsecured personal loans (at 20% or more), there may not be a better time than now to look at putting all your egg’s in one basket. Doing this will lower your overall cost of borrowing and possibly save as much as several hundred as month.

However I must tell you that there is a downside to these low interest rates. Yes you heard that right, and you deserve to know the truth. You may not know but mortgages are contracts, and if you are in the middle of your contract term and you go to break it, there will be penalties. If your banks says that they are not charging you a penalty that they are just giving you a blended rate, you are still paying the penalty but in the new rate. Unless you have a closed term you can get out of your current mortgage with either a 3 month interest penalty or an interest rate differential penalty. The banks will charge the greater of the 2 penalty’s.

I had a client call me recently about refinancing and they had just signed a new 5 year mortgage about a year ago at posted rates ( which are higher then discounted, today’s posted is 5.45). I did a calculation for them and found out that their penalty would be over 15K. Now don’t get caught up in the number, if you end up saving more over the 5 years than the penalty then it is worth it to pay the penalty. In this case it was not. Please contact my office today to find out if this makes sense for you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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PatSawler@Craigburn.com

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Bank of Canada lowers interest rates to spur growth!

BY DAVID AKIN, CANWEST NEWS SERVICEMARCH 3, 2009 6:01 PM

The Bank of Canada cut its main interest rate to a record low on Tuesday and signaled for the first time that it may take extra steps to pump money into a system that remains stubbornly short of credit.

OTTAWA — The Bank of Canada made a bet Tuesday that, if interest rates were virtually zero, businesses might be more inclined to borrow to build new factories, buy new equipment, and put unemployed Canadians back to work.

The central bank lowered its key overnight rate Tuesday to 0.5 per cent — a record low — and many observers say the bank could even take the rate as low as it could go, to zero, in all all-out effort to make it cheaper and easier for commercial banks to lend money and spur economic growth.

Several commercial banks did lower some of their interest rates within hours of central bank’s announcement.

But the new, lower rates are unlikely, by themselves, to get the economy moving again.

“You can have the cheapest money in the world, but if people keep reading about the layoffs and falling housing prices, that takes away confidence and makes people much more cautious about borrowing, and leaves all the stimulus that you’re trying to put in place basically on the sidelines,” said Warren Jestin, chief economist at The Bank of Nova Scotia.

Consumers tend not to respond to incremental changes in interest rates, in any event, and while business borrowers sometimes respond to those small changes, many businesses right now are worried about their ability to pay any loan, regardless of the terms.

“In a recession, entrepreneurs tend to stay a bit on the sidelines when it comes to developing a new project, putting up a new plant, buying new equipment. They generally want to wait,” said Jean-Rene Halde, the CEO of Business Development Canada, the federal Crown corporation responsible for making loans to businesses.

“So, in a recession, we see (fewer) projects being started. It’s one of the reasons we have a recession,” Halde said.

As far as consumers go, changes in the overnight rate charged by the Bank of Canada is not their biggest motivation. Certainly, interest rates that stay low over time make things such as homes and cars more affordable. But economists say a quarter-point here or a quarter-point there from the Bank of Canada will have a negligible effect on consumer behavior.

Indeed, consumers in Canada have been happily enjoying interest rates that are at low levels not seen in a generation. The number of mortgages taken out by Canadians as of December was 10.7 per higher than in the same month last year. Overall consumer credit, which would include mortgages, credit cards, and car loans, was up 9.1 per cent to about $416.2 billion at the end of December. By contrast, consumer credit in the U.S. has been shrinking.

The biggest motivating factor for consumer borrowing is job security. When consumers are confident they’ll have a regular paycheque, they’re more likely to sign up for those monthly payments on everything from new TVs to new homes.

Jestin says that, with recent job losses — nearly 250,000 Canadians lost their jobs between November and January — consumer demand for credit is almost certain to weaken, no matter the interest rate.

As for business borrowers, the Bank of Canada is hoping the cost of borrowing will be seen as too good for even the most conservative business manager to pass up — and those business managers will respond by borrowing for new investment to create new jobs.

But even that assumption is flawed, said Jestin. “You knock off 50 basis points at these levels, and it’s not likely to have a big effect. We’ve gotten to levels now that are so extraordinarily low that the degree of further impetus in the economy is extraordinarily limited.”

Furthermore, savvy business managers know that low interest rates will be here for a while, which means there’s no rush to start up a new project until they can be sure of firming market conditions.

“That’s the confidence problem,” Halde said. “(Businesses say) I have a great project, but maybe I should wait three months or six months before starting it. They may say, at this price, it’s time get going. And that’s obviously the hope.”

Bankers such as Halde say most of the lending they’re doing nowadays is to shore up existing projects.

But can the Bank of Canada do better than zero and make the cost of borrowing too good to pass up? It can, by using what it described Tuesday as “non-traditional” ways of lowering the costs commercial banks pay to get more money, which they, in turn, lend out to businesses and consumers. The Bank of Canada could, for example, start buying up assets, such as Government of Canada bonds, held by Canadian banks. If the Bank of Canada did this, it would essentially be pumping more cash into the system — and cash, as any good, responds to the forces of supply and demand. When there is more cash available, it tends to be cheaper to borrow it.

How good is your network?

I have been dabbling at the social networking thing for the last few months. I am on Twitter, facebook, friendfeed, Stumbleupon and Linkedin. I used them all for different reason’s. One of the one’s that I really enjoy lately is Linkedin. Someone once described it as the “Facebook for people who have jobs”. It is a great social networking tool, and recently I have had the honor in connecting with Steven Burda, a Russian immigrant to the United States who is one of the most connected people on Linkedin with over 40,000 direct connections. 

Steven made some time to talk with me last night and I wanted to share some of that with you.

Pat Sawler: How have you been able to build such a large network?

Steven Burda: Well I started just over 3 1/2 years ago, and I just focused on building it one person at a time. I never set out to do it just to have a large network. I did it to help people and ended up with a large network as a result.

PS: How do you help people in your network?

SB: I don’t have all the answers, but I know that I can answer most any question with the expertise from those in my network. People come to me needing XY or Z and I find an expert in my network who specializes in XY or Z and introduce them. It’s as simple as that.

PS: What benefit’s have you personally gained from having a large network? 

SB: I want start by saying that I do not do this for financial gain. I have a very good position with great benefits at a great company and am very happy. I honestly enjoy helping people. I have been offered jobs, in almost every industry. I have had people send me thank you cards for helping them. Once someone even offered to send me boxes of cereal from his factory. It is really a blessing to have a large network. I know if I wanted to, I could always find friends in any city that I travel to, and there is something comforting about that. 

Thank you very much for taking the time to speak with me. I am honored to be part of your network. I know if I really am stuck with any problem, with a few clicks on your keyboard you will probably find me the answer. Since you are a new Dad, the only advice I could give to you as a father of 3 is to enjoy every moment, have burping towels and lots of wipes!

You see having a great network is more than knowing who you can call at 3am. It is also knowing who you can approach to find the answers. I am open to helping you, if I don’t know the answer, I most likely know people who do.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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How low can this go?

Over the past year or so our world economies have slid downward toward a recession. Now that we are in one, the question that comes to mind is how low can this go? Have we hit rock bottom or are we still digging deeper? Even though we may have very little impact on the general direction of the overall economy, we can however have a great impact on our own and even improve it for the better in spite of these challenging economic times. 

Ask yourself the following questions:

1) Have your personal finances been effected by the downturn?

2) Are you spending more or less? 

3) Has your employment status changed?

4) Do you think that your employer could make your position redundant?

5) Do you have a rainy day fund with 3 months income saved up?

If by answering these questions you are somewhat concerned, then you should take a long hard look at your own personal finances. There is no better time than now to start making some drastic improvements to your bottom line. Your overall objective should be that what ever happens to the world economy that you personally will not be effected. Learn to operate on cash, pay off your debt and build a strong and solid net worth. If you want we can help you create a plan to eliminate your debt as quickly as possible. I look forward to hearing from you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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What to consider when doing your financial plan.

We all have goals, whether we realize it or not. It may be just to get through the day or it may be to make a million bucks. But we all have them. If you are smart you will write them down. According to the 3% who actually do that, they will make 10 time more than those who do not. 

Just like goals, there are elements that make up a proper financial plan. Here they are in layman’s terms.

1) Making Money

2) Keeping your Money

3) Spreading the wealth

Here are some idea’s to help you develop a good financial plan. Once this is done see your financial planner (like my friend Steve Cox) for proper implementation. 

1) Have a clear concise written goal. Know how much you would like to accumulate, how much you need to retire, when you plan to retire. What you plan on doing when you retire etc.

2) Some people think it is all about making money. Well that is part of it. It is really about keeping more of it to yourself. For proper strategies please see your financial planner. Otherwise here is my short take, make lots of money, pay off all your debts, retire rich. They say that most people are either broke or dead once they reach retirement age. To me that does not sound appealing.

3) Now this last step most people totally leave out, yet it is very important. How do you plan on taking care of your loved ones when you “shuffle off this mortal coil“? We are not immortal ya know. Do you have your own life insurance policy (and not just one offered by your employer) one that will provide your family with at least 3-5 years of your current income. What about a Will  or do you want the government to get it everything?

These are important things to think about. Contact my office today so we can help you take care of the now so you can properly plan for the future.

Cheers,

Pat

 

 

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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Bank of Canada sets key overnight rate to 1%

Well the Bank of Canada has done it again. They cut the key lending rate by another 50 basis points. So it is now at 1%. They are doing this because of the current world wide economic crisis, and the belief that our economy will shrink by another 1.2% this year. The central bank also said that the current global financial system must stabilize before any economic recover is to happen.

For those of you who have not been keeping track, the Bank of Canada has cut the key lending rate by 350 basis points ( or 3.5%) in the last 13 months. Some also say that there is a possibility for another rate cut at the next scheduled meeting in March.

The charted banks quickly reacted by lowered their prime rates from 3.5% to 3%. Even though they matched this rate cut point for point, don’t forget that they have not always done so in response to recent rate cuts. So even though the Bank of Canada is cutting rates to stimulate the economy, some of the banks are trying to hold on to some of that discount rather than pass it on where it is really needed.  

This is important to you if you have a variable rate mortgage or line of credit. You are now paying less. However I would suggest keeping your payment fixed to a certain dollar amount so when and if it drops again you are paying more principal off of your loan. This will allow you to pay off your debt quicker.

Contact my office if you have any questions. I look forward to hearing from you.

Cheers,

Pat

 

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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Give ‘em the old one-two combination!

I would not profess to know a lot about boxing, however, something can be said for a good sport analogy. My point is that goals and massive action are like a one-two combination. You cannot achieve success with one and not the other. Sitting on the sofa and wishing you could win the lotto will not do you much good unless you have already purchased a ticket or two. If you want reach your goals, they should be specific, measurable, achievable, realistic and timely. If you were paying attention that means “SMART”.

An important part of that formula has been omitted – action and I mean massive action. Being “Smart” about your goals is all well and good, but if you are still sitting on the sofa then shame on you. 

The same can be said if you were smart and timely enough to take advantage of current interest rates to restructure your finances. If you have just restructured, but have no plan to improve yourself financially, then you may find yourself in the same position in the future.

The one-two punch here is to make sure that if you have restructured; you have a plan and will take action to follow your plan. Ultimately your goal should be to eliminate all your debts as quickly as possible and then start building true wealth. It is possible; we have done this with many clients – clients who have saved thousands of dollars in interest payments and are now saving money every month!

Feel free to contact our office today – we can show you how to make improvements to your financial situation, it is possible.

Cheers,

Pat

 

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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Obama knows a thing or two about timing!

By the time you are reading this Barack Obama may have already been sworn in as the next President of the United States. When he first announced his candidacy to run for the President of the United Stated on Feb 10, 2007, the odds were not in his favor. Many were predicting that another Clinton would receive the nomination for the Democratic Party. She was heavily favored to win, however Obama did things different. 

Many in politics advise candidates to focus on their message and to get it out to as many people as possible. Which is more important the message or the medium? They say that he was an ace at both. Their is no denying it that Obama is a brilliant orator, however what many do not realize is that he was particular adapt at getting his message out. Not everyone can attend live events, watch CNN, or follow the countless stories in the newspapers. In this day and age people have a constant urge to stay informed and want to do it in their own way. Barack Obama saw this and took advantage of the many social networks to get his message out to as many people as possible via facebook, Twitter, LinkedIn, MySpace and his own web site. People were able to stay informed on their smart phone on the go. You may be asking how this has anything to do with timing. Well it has everything to do with it; it helped him get his message out, by taking advantage of the latest social networking trends. He engaged more people, got them involved with the process, which gave him momentum to win the nomination and eventually the Presidency. 

You may also think that timing has nothing to do with the current state of your finances. Well nothing could be further from the truth. Think of it this way, would you rather have a 6.0% mortgage rate or 4.5%? The answer is simple; you would rather have the lower one. You probably assume that the higher rate is for people with less than perfect credit and that you could easily get the lower one. However, both were available as the discount rate for people with good credit over the last 24 months. The biggest difference is timing. You may also say that you will go out and get a loan only when you need it, well I am telling you that it may be too late.

You may not qualify for what you want if you wait for when you need it. Don’t wait until you are painted into a corner and you need a loan to help you out, because the only one available at that time may not be exactly what you want. There is no better time that now to look at restructuring your finances. It will put you in a better financial position in the long run, and allow you to weather out the uncertain financial times that we are currently facing. 

Feel free to contact my office so we may see if the timing is right for you.

Cheers,

Pat

p.s- This is by no means a reflection of my political views but rather an acknowledgement of his achievement.  

 

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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Big Goals are meant to be shared!

At one time or another everyone has started off a new year with a list of goals and objectives they want to accomplish. The common goals that people have are; to lose weight, quit smoking, get in shape, make more money and get out of debt. They start the new year off with all the right intentions; some take action but not everyone. Most people quit before they succeed. What most people don’t realize is those who do succeed, did not do it on their own.

We have all heard the common expression “No man is an island.” It couldn’t be truer when it comes to achieving goals and getting ahead in life. People who successfully lose weight seek the advice of those who have done it before – from diet books, fitness trainers or support groups. 

Sharing your goals with your friends, family or the internet world in general has the following benefits: 

1) It makes you accountable to actually following through.

2) It brings you together with other like minded people. When two or more people of like minds come together you will experience what one of my favorite writers, Napoleon Hill, calls the mastermind effect – where the effect is greater than the sum of the parts.

3) You leave yourself open for others to help you reach your target.  

4) Your goal becomes bigger and more powerful.    

5) Call it what you want, but things just start to happen to help you reach your goal. 

This being said, I would like to share with you a few of my main goals. I know with your help anything is possible.

My goals are to be successful both in personal and professional life.  I will not settle for one without the other!

  • In my professional life, I want to help one person or family a week develop strategies to become debt free. To show companies how to effectively manage their debts to grow their business, and show that personal service and education are more important that the fine print of mortgage contracts.
  • In my personal life, I want to give the best care, support, time, attention and love to my wife Gillian, my daughters Ella & Georgia and to my son Beckett, and to appreciate and share every single free moment that I spend with them.  

Thank you for listening to my goals.  If you know of anyone who needs help reaching their goal of becoming debt free, please pass on my contact information.  I will reach my goals by helping others reach theirs – a great way to for everyone to succeed! 

Cheers,
Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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Quickest way to recession proof your life!

We all would love to have the same level of comfort we were used to when the economy was booming. Now that things are less certain, the spectre of job losses impacting our own income is looming large. How can we protect ourselves before the worst happens?  What if there is an option available, one that does not require hours and hours of your time?      

We have looked around and found inspiration in the mindset many students have.  Not the ones who are stressed out trying to make their grades, the other ones: the ones who are making their grades and paying their way, the ones who don’t get stressed if the job at the store ends.  If that happens, they simply find another job to take its place or they don’t stress at all because that was their “fun” money, and they still have other sources of income which provide the necessities.  

Now, by no means am I suggesting you give up your current job and take on several others … to anyone with a mature family, taking on additional time-consuming workload is simply not an option.  But what if there was another way, a simple way, that could add to your current income?  What about simple ways you can develop multiple streams of income just by doing the things you are already doing anyway – with no extra time required, no special meetings, no products to buy or learn about?  

Actually the answer is much simpler than you may imagine. It’s not lottery tickets, bingo or blackjack!  It’s not Multi-Level Marketing either! 

 Hey, I’m not going to take up your time on this mail – this is just a short invitation – you can attend a webinar on Monday December 29th at 9pm Atlantic Standard Time.  It is about ways you can begin to monetize the value you are already giving to other people, doing the things you already do.  It also gives back rewards directly to you, in addition to earning you income.  

Join the webinar, there is nothing to buy, nothing to do, just options that are open to you, options that you can consider giving you additional comfort.  On the webinar you will receive information about how you can add more income to your life without adding many hours to your already busy schedule, while getting other rewards as well  – A win-win for everyone. Join our webinar – conference call & web seminar – and learn how you can recession proof your life.  

Places on the call are limited (sorry, the technology stops us opening the call to everyone) – so click here now for more information and get your official invitation reserving your place. 

Cheers,

Pat

 

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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