Tag Archive for: recession

Recession Proof

With all the talk about an upcoming recession in 2023, now is the best time to prepare for the effects of a shrinking economy. While there may not be much you can do to influence the overall economy, there is plenty that you can do to influence your own personal finances.

  • Make sure that you have an emergency fund of at least 90 days of your personal expenses in the event of employment interruption. The best way to do this is to be using YNAB.
  • Sorry to those who work in restaurants & hospitality, but cut back or eliminate unneeded trips and meals out.
  • Trim back or eliminate streaming services that you no longer use, sorry Netflix.
  • Workouts at home were all the rage during the lockdown and may soon be again once people cut back on time spent at the gym.
  • Keep your credit score high by making sure that all your obligations are paid in full and on time.
  • Diversifying your income by taking on a side hustle if possible
  • Keep your debts to a minimum
  • Update your skills so that you are more desirable in the workforce
  • If self employed then 10X your efforts to grow your business by radically increasing your prospecting and client management.

We don’t all feel the same effects of an economic downturn, but if you’re prepared then the effects will be much less severe on you personally. The economy is constantly changing and a downturn next year may also be followed by economic growth the following year. Be prepared for the changes ahead so you can adjust accordingly.

Today I am thankful for the 5K run with my neighbour when I really didn’t feel like going, that my wife is an amazing home cook and that some of the best food I have ever eaten was here at home.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Recession Obsession!

Every where you look people are obsessed with this so called recession. It took them forever to declare that we were in one. Now everyone wants to be the first to say that we are on our way back out. However if you speak too soon, and without the proper amount of facts, the animal that is our stock markets will jump up and bite you if they do not agree. Just as they did on Monday.

However while I regularly meet with business owners, I always ask them how their business is going. Invariably most of them are telling me that business is great. Now that does not apply to all fields. My friends in the real estate game and fellow mortgage brokers have had better times. As tough as it may seem to be here, those in the west are feeling the pinch more than we were.

While we all have been tightening our pocket books it looks like things have been improving. We are well on our way to a recovery based on the recent MLS data. (see below) Almost every market in Canada has posted gains except for 4 western city’s.

Some people are suffering and some are not, but their is still hope. If you are looking for a way to improve your current situation as soon as possible, please do not hesitate to contact my office. We will analyze your current situation and develop a plan to help you get to where you want to go. As always I look forward to hearing from you.
Cheers,
Pat
p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.
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Average MLS resale price for local markets

City June 2008 June 2009
Halifax $235,312 $240,093
Saint John, NB $170,199 $172,731
Montréal $269,257 $275,578
Ottawa $298,336 $307,793
Toronto $395,918 $403,918
Hamilton/Burlington $287,249 $297,117
Winnipeg $206,327 $212,542
Saskatoon $310,386 $276,867
Calgary $418,866 $392,601
Edmonton $341,376 $328,285
Vancouver $611,613 $575,949
Victoria $476,639 $476,686

Source: Canadian Real Estate Association

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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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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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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Don't get caught with your finances down!

On days like we have been having lately it is tempting to just turn off the TV, avoid reading the paper or surfing the finances pages of the internet. However sticking your head in the sand – as reassuring as it can be at the time – is a great way to guarantee that you go down with the ship!  The worst thing you can do is assume the strategy that got you where you are today, which has worked great over the past 20 years, will continue to work for you over the next 5 years: it won’t work.  The system is broken.  

So you may be asking what can you do? Well here are a few simple idea’s:

1) Manage your emotions.  Breathe.  Look out of the window and appreciate the autumn views.  Notice all the looming disasters you’re afraid of, and notice also that you do have options and can improve your situation even in the worst of times.  

2) Think long term, this market downturn is a buying opportunity if you have the cash to do it, other wise sit tight and focus on your long term financial goals. Solid companies, strong balance sheets and good dividends. 

3) Shore up your own personal balance sheet by paying off your debt. Limiting your liabilities is the best thing that you can do in these volatile times. The financial analists are predicting that credit may be harding to get in the very near future. You will greatly improve your credit score by paying off your debts and leaving your credit lines open and only using them when needed and paying them off immediately.

As always, contact me if you have any questions.
Cheers,
Pat

Whose Fertilizer are you buying?

I have to admit that I bought into it as well over the last 2 weeks, I watched countless hours of CNBC, CNN and read the latest horror story on the many financial websites that I visit. However thanks to an e-mail subscription that I received from Matt Furey, I realized that there is more to it than meets the eye. 

You see we can not play the blame game about our own personal finances. No one else is responsible for where we are at financially but ourselves. Regardless of outside economic conditions people have always found ways to survive and even thrive. 

If you want some examples then I would highly suggest that you pick up a copy of Napoleon Hill’s “Think and Grow Rich“. Even though it was first published in 1937, there are still valuable lessons that can still be applied today, and that is probably why it is still in print and has been a best seller for many years. While you are at it, another gem that I would recommend to help get your mind on the right track is James Allen’s “As a man thinketh” first published in 1918, a short book but not one that you should read quickly. 

The whole point that I am trying to make here is this “Invest in your own economy”. Do not believe everyone who says that the sky is falling. You make the choices that determine your current reality, make better choices, pay off your debts ( ask me how if you need to), look for ways to grow you income (start your own business, sell on line, there are countless ways), and last but not least train your brain and focus on where you want to go. 

Make this a great week.

Cheers,

Pat

 

How to recession proof your life!

If you have been watching the news lately you have probably heard that times are tough and it may possibly get tougher. Well that does not have to apply to you personally. Below are a few suggestions to help you ride through the turbulent times with a smile on your face. 

1) Trim the fat. As obvious as this seems, some people do not see it. There is no better time than now to pay off your debt and cut the ties to your creditors. Doing it may be easier than you think and you can do it with the money that you are currently making. Contact my office today and we can show you how to put you on the fast track to eliminating all your debts.  

2) Make cash king. Now that you are well on your way to paying off all your debts you do not want to run them up again. Put the credit cards on ice, (literally and figuratively). Everywhere you had used your credit cards before also take cash, debit or certified cheques and if you have to use your credit card pay it off as soon as you use it as interest is charged from the date you use it rather than when you get your bill. You should also know that by paying off your credit cards and not using them greatly improves your credit. 

3) Plan your purchases. I am not saying that you should not take a vacation, buy the new iphone or a new flat screen television, save up and then pay cash for them. Don’t get sold on no money down, interest free or no payments,  promotions at the big box stores, as they are linked to taking their in store credit cards.  

4) Start your own business. The idea here is to develop another income stream, and multiple if possible. Don’t quit your day job if you have one. Many times you can do this while still working a full time gig. Click here or here for some idea’s for home based businesses. I also recommend Ed Dale’s “Thirty Day Challenge” to show you how to start an internet business.  There are tax advantages to doing this as well, consult your account for full details.

5) Focus on income producing activities. As exciting as having your own business is, it is still required that you work in it if you want it to produce an income. Concentrate on activities that will generate revenue for you and your business.  

6) Share the wealth. Last but certainly not least, as you are riding out this possible recession remember others may not be as fortunate. Sow the seeds of your success, and share with others what is working for you and also what lessons that you have learned along the way. Also do not forgot about local charities that also need your financial help, as their services will be needed more now than ever before.  

Cheers,

Pat

“If you can’t convince them, confuse them.”- Harry S. Truman

The worst is over? Think again

As taken from the Globe & Mail. See my comments below.

The stock market would have you believe that the worst of the financial mess is over, and that it’s time again to buy, buy, buy. But Barry Ritholtz, who writes The Big Picture Blog, thinks the buying frenzy of the past week is a head fake that will end badly.

“The anticipated bear market bounce in financials has led to the usual fools’ chorus that the worst is behind us, the economy is on the mend, and a recession is avoided,” he said. “How’s the economy doing? You tell me.”

He then goes on to list (and it’s a long list) the problems that continue to plague the U.S. economy. For one, General Motors Corp. and Ford Motor Co. are suffering, but so is mighty Toyota Motor Corp., a sign that this isn’t an isolated slowdown affecting a couple of troubled names.

The nay-sayers are at it again. So there is no time better than the present to take control of you finances. The so called professional’s are not doing so hot at it. This is what I mean by that comment, I want you to take control of your finances so that the banks, credit card companies or any one you may owe money to is not in control over you. So that when the economy tanks, and no one is giving out credit any more ( well they are, but they are making it harder to get) and people still need it. I want you to be in a position where you can fund you own life style. Where you will not have to go hat in hand to the local bank or broker so you can rob Peter to pay Paul. Please contact my office so we can show you how to take back control and get back in the driver’s seat toward your own financial freedom.

Cheers,

Pat

BoC remains on hold as inflation fears rise

BREAKING NEWS FROM THE GLOBE AND MAIL

KEVIN CARMICHAEL

 

Tuesday, July 15, 2008

OTTAWA — The Bank of Canada left its benchmark interest rate at 3 per cent and predicted raging oil and food prices would cause inflation to surge past 4 per cent by early next year.

Governor Mark Carney and his five deputies on the governing council also cut their estimate for economic growth for 2008 to 1 per cent, which would be the weakest in almost two decades, citing “protracted weakness” in the U.S. economy and “ongoing turbulence” in financial markets.

The central bank’s decision to leave borrowing costs unchanged suggests Mr. Carney’s biggest concern is keeping a lid on Canadians’ expectations about prices. Policy makers raise and lower interest rates to keep inflation advancing at an annual rate of 2 per cent and are uncomfortable with prices advancing any faster than 3 per cent.

“Commodity prices are continuing to outstrip earlier expectations,” the Bank of Canada said in its statement today in Ottawa. “This has led to further increases in Canada’s terms of trade and real national income, and has altered the outlook for global and domestic inflation.”

There was little immediate reaction in financial markets as most investors and economists were expecting the Bank of Canada to leave interest rates unchanged. In the flurry of research notes that followed the central bank’s decision, economists said Mr. Carney is handcuffed by weaker growth and bubbling inflation, leaving him little choice but to stand pat.

“Overall inflation is growing concern for the Bank of Canada, but the bank’s growth worries will keep a hold on rates for the time being,” said Meny Grauman, an economist a CIBC World Markets in Toronto.

Win Thin, a currency strategist at Brown Brothers Harriman & Co. in New York, said the futures market for Overnights Index Swaps, where values are based on the underlying interest rate, suggests investors expect the Bank of Canada to lift borrowing costs by no more than a quarter point over the next 12 months, compared with expectations of a three-quarter point increase as recently as mid-June.

In its statement, the central bank called the risks to its outlook “balanced.”

The Bank of Canada also left its benchmark interest rate – the target it sets for overnight loans between banks – unchanged at 3 per cent at its last policy meeting in June, a move that surprised market players.

Before that announcement five weeks ago, policy makers had slashed their key rate by 1½ points over four decisions dating back to December, a campaign aimed at offsetting slumping U.S. demand for exports and the global credit crunch.

The priority now is persuading Canadian business owners and workers that their central bank will keep inflation from burning out of control.

One of the biggest worries at the central bank is that companies will start charging higher prices to compensate for higher commodity prices and workers will demand higher wages, sparking an inflation spiral.

There is some evidence this might already be happening. The central bank’s July survey of businesses showed 36 per cent of the companies expected inflation will climb above 3 per cent, compared with 17 per cent in April.

Policy makers stressed in their statement today that total inflation’s burst to 4 per cent in the first quarter of 2009 will be temporary. They predicted energy prices will stabilize, allowing inflation to ease back to 2 per cent by the second half of next year.

Canada’s economy hasn’t grown slower than 1 per cent since it advanced 0.9 per cent in 1992, one year after a recession, according to International Monetary Fund data.

Still, the central bank said little has happened to change its longer term growth outlook. Higher prices for exports, relatively low interest rates and a “gradual recovery” in the U.S. will spark a Canadian rebound starting early next year, the Bank of Canada said.

The central bank shaved its growth estimate for 2009 to 2.3 per cent from 2.4 per cent and left its projection for 2010 unchanged at 3.3 per cent.

The Bank of Canada will expand on its current thinking on the economy when it releases an updated policy report on Thursday. The central bank next meets to consider its benchmark interest rate on Sept. 3.