Thursday, September 29, 2011

S.M.A.R.T. Goal setting

The best way to actually formulate your goals is to utilize SMART goal setting.

SMART goals ensure that all your objectives include all the key elements to maximize your goal setting success.

When you use SMART goal setting you will find that it is easier for you to stay on track with your various goals in all areas of your life.

Essentially SMART stands for:
S=Specific: There is a higher likelihood that a specific clearly stated goal would be accomplished than a general goal.

A vague goal can set you up for procrastination since you may not be sure exactly how to approach the goal. To help create a specific goal ask yourself the following questions.

Who is involved? What do I want to accomplish? Where is the central locale? When is my deadline? Which requirements or constraints should I consider?Why do I want to accomplish this goal?

M = Measurable: Goals need to be measurable so that there are benchmarks of attainment.When your goals are measurable or quantifiable you are more likely to stay on track and reach certain milestones which give you that boost of confidence to press on.

A = Attainable: Keep your goals within your control. If you set goals that you do not have reasonable control over, you may be setting yourself up for failure. Having attainable goals is also about identifying goals that are truly important to you.

R = Realistic: Make sure that you set goals that you are both willing and able to achieve. It is important that you are able to make substantial progress toward your goal.

T = Timely: Goals need a time frame attached to them. There needs to be a sense of urgency. A goal that you can taste, touch, smell, see or hear is tangible and is more defined. This will make that goal more attainable.

Here is an example of how you might use SMART goal setting.

Specific: Lose 10 pounds

Measurable: Weigh myself on the scale once a week. Measure my waist every three weeks.

Attainable:Lessen the amount and type of foods I eat. Do 20 minutes of physical activity everyday

Realistic: Lose 1-2 pounds a week

Timely: Lose 10 pounds over the next 8-10 weeks

SMART goal setting really helps you stay motivated through rough patches.

You will notice that you are able to work more efficiently, meet deadlines and make the kind of decisions necessary to bring you closer to achieving your goals. And when that happens don't forget to pat yourself on the back and celebrate your achievements!

Wednesday, September 28, 2011

Canadian housing market loses momentum, but at less dramatic pace: Scotiabank

The Canadian Press, On Tuesday September 27, 2011, 8:26 am EDT

By The Canadian Press

TORONTO - A Scotia Economics report says Canada's housing market is cooling, but at a slower pace than most other markets in the developed world.

Scotiabank's latest real-estate outlook said Tuesday that Canada is showing a resilience that few other countries have been able to maintain.

"In the majority of the major markets we track in North America, Europe and Australasia, inflation-adjusted home prices declined on a year-over-year basis in the second quarter of 2011," said Scotia Economics senior economist and real estate specialist Adrienne Warren.

"While Canada's hot housing market also has begun to cool, it remains a notable outperformer."

The bank (TSX:BNS) noted that of the nine major developed markets it tracks, only Canada, France and Switzerland showed housing price increases year over year.

In Canada, existing home prices were up five per cent year-over-year from April to June, while prices appeared to level out in July and August, the report said.

However, the bank pointed to several challenges that could stall the current pace of the domestic housing market.

"Heightened economic uncertainty combined with recent signs of a loss of momentum in Canada's jobs market could keep some potential buyers on the sidelines for the time being," Warren said.

"On balance, we anticipate a modest slowdown in the volume of sales transactions heading into year end, alongside relatively flat prices."

Wednesday, September 21, 2011

Vancouver prices to keep rising: Central 1 Credit Union

The Vancouver housing market may already be unaffordable for many, but there’s enough demand to keep prices rising, according to a new forecast.

A report by Central 1 Credit Union economist Brian Yu predicts the median home price will increase 6.8% to $417,000 by the end of the year compared to 2010. This is despite the fact home sales are expected to decline in 2011, down 1% from 2010, to reach 88,200.

The Royal Bank of Canada has recently calculated ownership costs of an average two-storey home in Vancouver equals 95.5% of average income this year, a record high.

Yu defended his prediction in a statement, citing low interest rates, a limited supply of land, and a low percentage of speculation. It runs out most Vancouver buyers are living in their homes, with only 2-3% of properties owned by speculators, he said.

“Our research shows few signs that speculators are overly active in the Vancouver market, which means we are unlikely to see a speculation-induced bust,” Yu said.

And while the average price has skyrocketed in Vancouver, those jumps are mostly limited to particular areas of Vancouver where there have been a high number of luxury home sales such as Richmond. The rest of the market is more stable, he said.

“Even if the economy slows and employment slows, we expect to see individuals hold on to their homes, rather than sell them in a weaker market,” Yu said.

Yu’s report predicts in 2012 home sales in Vancouver will grow 3.4%, driven by new home sales, although existing home sales will decline.

Tax issues might push some home sales until 2013, said the report.

“People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12% hit they face,” said Yu.

Tuesday, September 20, 2011

Canadian debt levels no cause for alarm,

Posted on Monday, September 19, 2011 6:40PM EDT
A report that showed Canadian household debt levels have topped U.S. ones should be taken with a grain of salt, according to one economist.

In a note released Monday, National Bank of Canada’s Matthieu Arseneau says the Canadian government’s indicator on household debt “does not lend itself well to such an international comparison owing to the considerable differences between the social safety nets of the two countries.”

Take charge of credit card debt

At first glance, personal disposable income levels appear much lower in Canada than in the United States. Mr. Arseneau attributes that to higher tax levels in Canada that are used, in part, to fund our national health care system.

Americans, meanwhile, must allocate nearly 20 per cent of their personal disposable income to paying for health care, he says. “If we adjust for this factor, the debt ratio of U.S. households exceeds that of their Canadian counterparts by 12 per cent.”

A report released last week showed that Canadian household debt rose to a record high in the second quarter, surpassing levels seen in the United States since the start of the year.

Statistics Canada said last Tuesday that the ratio of household credit-market debt – which includes mortgages, consumer credit and loans – to personal disposable income climbed to 149 per cent from 147 per cent in the first quarter. That’s the highest level since Statscan started gathering figures in this category in 1990.

The government agency attributed the growing debt to higher mortgages and increased consumer credit borrowing.

With interest rates slated to remain at low levels for the foreseeable future, Canadians are taking on both mortgages and consumer loans. Policy makers have expressed concerns about high household debt levels and warned against what could happen if rates were to rise.

In his note, Mr. Arseneau also noted that the Statscan ratio represents only one facet of the financial health of households.

“If we consider the ratio of debt to net worth, which is still markedly higher in the United States, we understand why household deleveraging is ongoing south of the border whereas nothing of the sort is happening in Canada,” he said.

Mr. Arseneau concluded his note by warning of the need to be vigilant, because excessive household debt levels “could represent a risk factor for Canada’s economic stability down the road.”

Monday, September 19, 2011

US Jobless Claims Continue to Climb .

Friday, 16 September 2011 09:56 Newsroom . .

In another indication that the US economy may be in trouble, jobless claims jumped last week to the highest level seen in three months. This is hard evidence that the job market is depressed.
According to data released by the US Labor Department said Thursday that weekly applications increased last week 11,000 to a seasonally adjusted 428,000- and this reflects a week that included the Labour Day holiday. Also for the fourth consecutive week, the four week average increased, registering in at 419,500.

What may be a little disturbing about this is that typically short weeks mean a reduction in unemployment claims, but this past week bucked that trend- suggesting that there may indeed be trouble of a serious economic kind brewing south of the border. Also, these unemployment applications are widely considered by many to be a barometer of layoff activity.
The magic number to demonstrate that hiring is outpacing the unemployment mark is 375,000- which continues to be elusive. In fact, claims have not been below that level since February, indicating that this is not a blip on the map.

Compounding things, there was net zero job growth in the US in August, which unfortunately, represents the worst figure seen in almost a year, and the unemployment rate continues to hold at a high 9.1% for the second month in a row.

What may be the most staggering August statistic though is businesses only added 17,000 jobs- which is a remarkable plunge from the 156,000 added the month prior.

Beyond the numbers though, is what this means- bottom line for the US economy, and many analysts are worried that there is a concerning trend emerging here. Amidst talk of a double-dip recession, a frail US economy is in desperate need of job creation to pull itself out of the chasm and away from the brink.

Wednesday, September 14, 2011

Variable Rate vs. Fixed Rate Conversation Renewed .

Monday, 12 September 2011 10:39 Newsroom . .
With the most recent interest rate announcement last week, and the knowledge that interest rates are set to remain low for the foreseeable future, the debate for variable rate mortgage over fixed rate has gained new momentum.

“With short-term rates now likely to stay at very low levels, and long-term rates testing record lows, whether to lock into a longer-term fixed mortgage rate or choose a variable rate continues to be a hot-button issue among home buyers,” says Benjamin Reitzes, Senior Economist, BMO Economics.

According to the Bank of Montreal, history would indicate that a variable rate is the way to go: “Research shows that there is little debate as to which has been the better option for homebuyers. Typically, borrowers save money by staying in variable products, and riding the rollercoaster of fluctuating rates. In fact, since 1975 the cost-effective route for borrowers was to stay variable 83 per cent of the time. And while the spread between 5-year fixed mortgage rates and variable rates has fallen from the all-time high hit in mid-2010, it remains historically elevated. “

Although, it is not as straightforward as one being better than the other, history aside. And, as Karen Blomquist, Mortgage Broker, Mortgage Intelligence, told, it has a lot to do with matching product to person too. “I still believe that choosing between a fixed-rate versus a variable-rate mortgage has a lot to do with a person's mind-set. I get nervous clients who went variable and then call or send e-mails every week. If you can handle a bit of risk, it's great. But if you can't, you should lock into a fixed rate, even if it is a bit higher.”

It is about lifestyle too, says Blomquist: “"You want to decide that if rates do land at 7%, you can handle it. After all, you need to be able to sleep at night."

There is much to be gained too, into doing a little research, and knowing both your client- and your lenders too, as Blomquist suggests: “I definitely caution anyone looking at variable rate mortgages should check the lender's "best rate" policies to ensure you can still get a discounted rate when locking in. "Not all banks offer it." When working with a broker we can ensure that the lock in terms are that the client would get the lowest locked in rate and not the posted rate like some banks offer.”

And, too in the current rate environment, there exists tremendous opportunity to be proactive with clients who could benefit in the long term by refinancing or consolidating now: “Given the borrowing climate even those with a current mortgage may find it's an ideal time to refinance, even if there are penalties”, she adds.

"Sometimes it will save you a lot of money in the long term. The results can be unbelievable when you crunch the numbers. I've seen some people save themselves $1,000 a month simply by moving to a 3.39% mortgage. If you do refinance, you might also want to consider rolling any consumer credit card debt into your mortgage to have a single lower payment."

Tuesday, September 13, 2011

Many Canadians Living Paycheque to Paycheque .

Although many Canadians would dearly love to enjoy their ‘golden years’, a new poll suggests that that may be more of a dream than reality.

According to the Canadian Payroll Association (CPA),” 40% of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40%) was "I'm not saving enough money for retirement." “

Considering this data, this is perhaps a bit of a wake-up call for those who are self-employed as well, given the demographic shift in this country- and the knowledge that Federal Pension programs will not be enough to support some down the road through retirement. For those who work for themselves, funding retirement falls squarely on their own shoulders, and takes long-term planning- and saving over time- to achieve the dream of the ‘golden years’.

The report says, “A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57% saying they would be in financial difficulty if their pay was delayed by even a week.”

“The numbers were even higher for younger Canadians aged 18 to 34 (63%) and single parents (74%). The regions with the highest percentage of workers living pay cheque to pay cheque were Ontario (60%) and the Atlantic provinces (64%), which may be the result of their slower recovery since the last recession. Financial planners generally recommend that people have approximately three months of expenses (rent, mortgage, bills, groceries, etc.) as an emergency fund.”

74% of Canadians say that they have saved less than one quarter needed to reach their retirement goal.

"This is particularly troubling when you realize that 71% of the respondents are over the age of 35, with the bulk in their main saving years between 35 and 54," states Dianne Winsor, CPM, Chairman of the CPA.

To compound the worry, half of the respondents said that they were saving 5% or less of their pay, and 40% indicated that they were not planning on trying to save more.

According to the findings of the survey, there is a disconnect between what is actually happening, and what needs to happen in order for people to reach their financial goals- which includes eliminating or reducing credit card debt, paying down mortgage and consistently building up savings.

Monday, September 12, 2011

Wealthy Barber is back in business

Jonathan Chevreau Sep 10, 2011 – 7:00 AM ET | Last Updated: Sep 9, 2011 9:33 AM ET

More than 22 years after finding bestselling success with The Wealthy Barber, financial guru David Chilton is back with a non-fiction follow-up. The Wealthy Barber Returns is arguably the best financial planning book since, well, since The Wealthy Barber.

The lifelong Kitchener, Ont., resident has departed from the fictional setting of the original, maintaining what he terms his “stage voice” — a folksy, witty tone honed over countless speeches. So readers expecting the return of the fictional Sarnia barber, Roy, may be disappointed that character is not the wealthy barber who is returning.

“I quote him [Roy] a few times,” Chilton says in an interview, “His advice was smarter: he ended up right.”

Given that so many others (including me) have imitated Chilton’s fictional format, it seems strange he has switched gears, but his timing has always been impeccable. The fact is the phenomenal success of the first book (more than two million copies have been sold) means Chilton himself has become the wealthy barber, supplanting his fictional creation. As with the original, the cover sports a full-length photo of Chilton and the red-white-and-blue barber pole that’s part of his powerful image.

Chilton acknowledges that he has “become the barber. One guy introduced me as the only author who became his character. No one calls Herman Melville Moby Dick.”

Even though it’s self-published, Chilton’s clout and genius for marketing have assured him widespread bookstore distribution. It’s in stores now, from Chapters to a spot I can confirm personally, a small independent bookstore in Bayfield, Ont.

Judging by initial testimonials, he’s hit another grand-slam home run. Luckily for us other authors, this is only the second time he’s stepped up to the plate.

As explained in the introduction, he was long reluctant to follow up the original because it was “the only good idea” he had, one he’s been “milking” for the better part of two decades (typical of the charming self-deprecating wit he maintains throughout).

But after a detour into co-publishing cookbooks, he decided North Americans are still nowhere close to absorbing the central message that they’re not saving enough. Except for a fortunate minority in employer-provided defined-benefit pensions, or the even rarer few who marry rich or win lotteries, most of us will have to save significant chunks of our income to achieve financial independence at a decent age.

The long-awaited sequel makes it clear there’s no magic bullet that can substitute for consistently saving for retirement, year in and year out. Most need to save till it hurts. Recognizing that most people find it near-impossible to save, Chilton tries to shift their focus to spending less, which amounts to the same thing. In clear and witty prose, he makes a compelling case for lifelong frugality or what I call guerrilla frugality. Forget the fancy stuff: If you can’t save by consistently spending less than you earn, retirement is just a pipe dream.

I’ll spoil one chapter, titled Four Liberating Words, by revealing they are “I can’t afford it.” I’m not a big fan of tattoos, but in the case of some acquaintances I know, I’d consider tattooing that phrase on their foreheads.

Chilton goes out of his way to avoid repeating key concepts from his earlier book, although the pay-yourself-first message of the orignal pervades the sequel in concept if not the actual phrase. I didn’t notice a repeat of the succinct Be an Owner, Not a Loaner — his original stance on emphasizing stock ownership rather than bonds — but he continues to see the value of a diversified portfolio of quality dividend-paying stocks.

However, the mutual fund industry and other proponents of “active” security selection will not be happy the new book joins the growing ranks of passive “indexers,” whether through index mutual funds or exchange-traded funds (ETFs). Nor will the insurance industry be ecstatic that Chilton has not recanted his previous stance in favour of low-cost term insurance rather than costlier whole-life or permanent insurance.

The book is divided into two sections, the first devoted mostly to the need to save more. The second half is a potpourri of short unconnected chapters on various aspects of investing, covering everything from pensions to tax-free savings accounts to wills and estate planning.

Chilton devoted the better part of the past year to the book, bouncing it off multiple experts (notably Mercer’s Malcolm Hamilton) and media pundits. The result is a book parents and teachers should provide to students late in high school or as they enter the work force.

As I note in a back-cover blurb, it’s the kind of book the federal Task Force on Financial Literacy should be distributing — except for the troubling fact its chairs are from the life insurance industry and actively managed investment firms.

Ironically, the first chapter of the original was titled The Financial Illiterate. Too many North Americans are still financially clueless and as Senator Pamela Wallin notes on the front cover of the sequel, Chilton has returned “just in time.”

Just not Roy the barber.

Friday, September 9, 2011

Why do U.S. retailers charge us more, Flaherty asks

After weeks of hearing Canadian consumers complain they pay higher prices in Canada for identical goods sold in the U.S., federal Finance Minister Jim Flaherty says he shares their “irritation” and wants a committee to look into it.

In a letter obtained by The Star, Flaherty says he wants the standing senate committee on national finance to study why some prices remain higher here five years after the Canadian dollar soared above parity with the U.S. greenback.

“Canadians are rightly irritated when they see large price discrepancies on the exact same products being sold on different sides of the border,” Flaherty says in the letter.

Canadian consumers began complaining about the price gap in 2007 after the Canadian dollar soared above parity with the U.S. greenback for the first time in 30 years.

At the time, Flaherty responded by urging retailers to lower their prices and be more open about their pricing practices. He also suggested consumers shop around to ensure they got the best deal.

Canadian retailers said they felt unfairly blamed. They also said prices in Canada are higher because they face higher costs here for rent, labour, duties, transportation and marketing. As well, some multinational suppliers charge Canadian retailers higher prices, they said.

However, no-one has provided a detailed explanation of how much these factors affect prices. And in some cases, retailers have acknowledged they are charging whatever the market will bear.

In his letter, Flaherty calls on the senate committee to examine how these factors might affect pricing.

The committee, which should consult widely with retailers, distributors, wholesalers, importers, economists, analysts and consumers, could begin meeting this fall, the letter says.

Many prices have fallen since he last met with Canadian retailers five years ago to discuss this issue, Flaherty says in the letter. But many Canadians still have concerns with a persistent gap between some goods, the letter also says.

“We all want Canadians to shop at and support local businesses, especially with the start of the Christmas shopping season only months away. But we live in a market economy and Canadians know the value and power of shopping around. If we want our consumers to shop here, we need competitive prices,” his letter says.

“A strong dollar should benefit Canadian consumers,” the letter says.

The price-gap problem resurfaced last month after popular U.S. fashion retailer J. Crew opened its first store in Canada and also its first Canadian web site.

Fans of the clothing retailer were quick to point out J. Crew had not only raised its prices for Canada but by adding duties and taxes to its online prices, the final bill was in some cases 40 to 50 per cent higher than on its U.S. website.

J. Crew quickly backed down, removing the added duty from its Canadian website, though its prices both in the Yorkdale store and online remain 15 per cent higher on average than in the U.S.

It’s not just consumers who have noticed the price difference.

Doug Porter, deputy chief economist at BMO Capital Markets, has made a habit of surveying the cross-border price gap in recent years. His latest survey, last April, found that prices in Canada were on average 20 per cent higher than in the U.S. on a broad range of goods, from DVDs to luxury cars to golf balls.

When Porter first began tracking prices, in 2007, the gap was 24 per cent. Retailers said they needed time to adapt as most merchandise had been ordered 12 to 18 months earlier when the dollar was at 80 cents U.S.

Obama says U.S. faces ‘crisis,’ proposes $447B jobs plan

Reuters Sep 8, 2011 – 6:16 PM ET | Last Updated: Sep 8, 2011 7:52 PM ET

By Matt Spetalnick and Alister Bull

WASHINGTON, Sept 8 (Reuters) – U.S. President Barack Obama laid out a $447 billion jobs package of tax cuts and government spending on Thursday that will be critical to his re-election chances but he faces an uphill fight with Republicans.

With his poll numbers at new lows amid voter frustration with 9.1 percent unemployment, Obama said in a high-stakes address to Congress that the United States is in a “national crisis” and called for urgent action on sweeping proposals to revive the stalled economy and avert another recession.

“Those of us here tonight can’t solve all of our nation’s woes,” Obama said in a nationally televised prime-time speech. “But we can help. We can make a difference. There are steps we can take right now to improve people’s lives.”

Taking aim at Republicans who have consistently opposed his initiatives, Obama said it was time to “stop the political circus and actually do something to help the economy.”

Obama, who pushed through an $800 billion economic stimulus package in 2009, said his jobs plan would cut taxes for workers and businesses and put more construction workers and teachers on the job through infrastructure projects.

“It will provide a tax break for companies who hire new workers and it will cut payroll taxes in half for every working American and every small business,” he said.

Obama is seeking to seize the initiative in his bitter ideological battle with Republicans, ease mounting doubts about his economic leadership and turn around his presidency just 14 months before voters decide whether to give him a second term.

Obama wants Congress to pass his “American Jobs Act” — which administration officials said would cost $447 billion — by the end of this year and offset the cost with deficit cuts.

But a deal may be hard to achieve with politicians already focusing on the presidential and congressional elections in November 2012.

If Obama can push through his plan, it might provide an economic boost quickly enough for him to reap political benefits. If it stalls in a divided Congress, his strategy will be to blame Republicans for obstructing the economic recovery.


Obama said his proposed plan would “provide a jolt to an economy that has stalled and give companies confidence that if they invest and hire there will be customers for their products and services.”

“You should pass this jobs plan right away,” he said in a speech interrupted by applause from his fellow Democrats while Republicans sat mostly in silence.

Obama proposed extending unemployment insurance at a cost of $49 billion, modernizing schools for $30 billion and investing in transportation infrastructure projects for $50 billion.

But the bulk of his proposal was made up of $240 billion in tax relief by cutting payroll taxes for employees in half next year and trimming employer payroll taxes as well.

Obama also said he was seeking to broaden U.S. homeowners’ access to mortgage refinancing in a plan to help the ailing housing market and put money back in the pockets of borrowers needing help locking into record low interest rates.

How much of the jobs package is viable remains in question. Almost all of it ultimately depends on winning support from Republicans who control the House of Representatives.

Bipartisan cooperation could be hard to come by in Washington’s climate of political dysfunction where a bruising debt feud this summer brought the country to the brink of default and led to an unprecedented U.S. credit downgrade.

But Obama insisted that “everything in here is the kind of proposal that’s been supported by both Democrats and Republicans — including many who sit here tonight — and everything in this bill will be paid for. Everything.”

Republicans will still be resistant, not wanting to give Obama a helping hand before the election. But they will be under pressure to cede some ground to help boost the economy or risk a voter backlash in 2012.

Obama’s choice of a rare joint session of the House and Senate, a setting better known for the president’s annual State of the Union address, was intended to lend ceremonial pomp to a critical speech and push Republicans to cooperate.

But it also carried the risk of raising public expectations that will be hard to meet.

Obama’s speech has taken on new urgency after the latest Labor Department report showed zero employment growth in August, stoking fears of a slide back into recession.

The pressure on Obama to act is driven not just by a spate of dismal economic data but by his own increasingly grim approval ratings now languishing around 40 percent, the lowest since he took office in January 2009.

An NBC/Wall Street Journal poll showed Obama was no longer the favorite to win next year’s election.