Canadian Student Loans

January 29th, 2015 Posted in Investing|Personal Finance | No Comments »

Personal Finance For Students

Personal Finance For Students

Third-level education is becoming more and more important in terms of getting a job in many sections of the economy. Some employers are unwilling to consider applications from candidates without a college diploma, and some of those employers will only to consider applicants with diplomas from certain schools. The problem for the prospective scholar is that college education doesn’t come cheap, with tuition, course materials, travel and accommodation costs often being prohibitive for the many students who cannot attend a college close to home.

Fortunately, for the needy prospective student, the Canadian government does have a program where they fund Student Loans for eligible scholars. Eligibility is decided on a number of factors including location (both of the pupil and the learning institution), current living costs, savings and parental income. For students who fall into the bracket of eligibility, a government-backed student loan is a godsend, allowing them to concentrate on their studies free of at least part of the worry of funding their education.

A student loan, as the name suggests, does have to be paid back when the student has graduated and is earning a salary, so it’s not free money and its use has to be priority-based. These priorities are in part, much the same as those that require the attention of a home owner – keeping a roof over one’s head, putting food on the table and paying bills. Even in subsidised student accommodation, these priorities are non-negotiable and in large this helps a student prepare for life after college.

Being responsible for your own budget teaches you to look after the pennies, which becomes all the more important when there is a mortgage to keep on top of and failure to pay that may result in your home being repossessed. Having to set aside cash for tuition fees keeps the importance of your studies at the forefront of your mind, reminding you why you’ve taken this step. When there are parties to attend most nights and a level of freedom beyond what you’ve known in the parental nest, it’s easy to feel that student life is all about the social side of things. But without responsible financial behaviour you could end up having to drop out and, without doubt, the restrictions of living back at home are felt all the more when you’ve lived without your parents for a spell.

If you don’t qualify for a government-backed student loan, there are still options available. Private student loans are one such option. Although they are not quite as secure an option as a government loan – being based on credit and therefore often necessitating that a parent acts as a co-signee- they are given by lenders at a low rate of interest and tend to be generous enough to cover the important costs of student life. Then, depending on the intensity of your course, it is possible to take on a part time job – which will often provide adequate money for as many toga parties as you want to attend.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Jan 25, 2009.

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Canada’s Real Estate in 2015

January 26th, 2015 Posted in Global Real Estate | No Comments »

Slowed Real Estate Growth May Not Last Long

Slowed Real Estate Growth May Not Last Long

The oil price drop hurt Canadian real estate sales, the Canadian Real Estate Association (CREA) reported on Thursday. Calgary and Edmonton led the decline, as these regions are most affected by oil price drop.

Although sales were down 5.8 percent in December from November, the CREA home price rose 3.8 percent from December 2013 and yearly sales rose 7.9 percent across the country.

On a separate note, Royal LePage mentions that home prices are expected to rise 2.9 percent in 2015. Toronto will lead the increase by 4.5 percent. However, this increase is still lower than last year.

Vancouver, Calgary, Montreal, and Halifax will follow the lead after Toronto with an increase of 2.8, 2.4, 0.6, and 0.5 percent respectively.

Toronto’s real estate market will see accelerated growth due to increased economic outputs in Ontario caused mainly by lower loonie and higher economic activities in the USA. However, oil price decline will cause lower real estate growth in Western Canada. Also, interest rates hike and mortgage rules change possibilities pose further risks to Canada’s real estate sector.

Although slowed home price growth poses a threat to the Canadian housing market, it will be welcomed by many first-time buyers, especially in the west. However, this trend is not expected to last long and price appreciation will return and exceed the historical average. The appreciation might even accelerate further when energy markets recover in the future.

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Which City Has the Most Skyscrapers?

January 21st, 2015 Posted in Global Real Estate | No Comments »

Is It Hong Kong or New York

Is It Hong Kong or New York?

Very few subjects on the topic of architecture divide opinion as much as sky scrapers. For many, a sky scraper is a demonstration of the art of structural engineering taken to its ultimate level – both literally and metaphorically. For others, there is an impression that the presence of sky scrapers on a skyline is as much a demonstration of an absence of imagination as anything else. As children, we look upon a sky scraper in wonder. How could anything be that tall? How could anything man-made reach that high? It is hard to avoid being impressed even as you get older. So many sky scrapers are still built today because people continue to be amazed by what structural engineers can do.

Where there is scope to impress, there is also competition. This fact, whether it occurs to people or does not, has inspired human behaviour in countless and varied ways. Witness the space race. Witness dance-offs. And, naturally, witness sky scrapers. These buildings exist, in no small part, because someone did it first, and someone else wants to beat them. City authorities and private companies are certainly not above asking aloud the question “How tall was the one they built? OK, let’s make ours one foot bigger!”. The concept of competitive ambition collided with the practice of architecture, and the sky scraper was what resulted. In terms of advertising a holiday destination or a business city, one of the most powerful images any advertiser can use is a picture of the city’s skyline. If that skyline is dominated by sky scrapers, the city is deemed successful and interesting. People will want to visit a place with a lot of sky scrapers, even if they are not quite sure why.

This has led to an interesting (if you like this kind of thing) dispute over the question of which city has the most sky scrapers. Believe it or not, this is the source of no little controversy, with figures from the website Emporis (considered experts on the topic of building) suggesting that Hong Kong is at the top of the tree with more than seven thousand buildings and counting. However, if you could one sky scraper as being a building from its own unique platform, then New York’s 5,000+ total will be more than Hong Kong’s.

The source of the controversy is that, for counting purposes, some will use the number of towers that reach a certain height (150 meters, as often as not) as the number of sky scrapers. Others will only count one skyscraper even if multiple towers of sufficient height spring from the one platform on the ground. So some will say that New York has the most sky scrapers, some will argue that it is Hong Kong. Others still will point out that Dubai is building the world’s largest sky scraper, and will argue that this is at least as important, as it is more groundbreaking. Then still others will argue that sky scrapers are a blot on the landscape and should not be encouraged. This is the nature of debate.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on June 15, 2009.

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How Credit Cards Work

January 17th, 2015 Posted in Credit Cards|Debts | 1 Comment »

Credit Cards

Credit Cards

With the amount of talking that is done about credit cards, very little pertains to the actual details of how they work, how they should be used, and the different kinds of cards available. It is known more or less by everyone that when a person is in a lot of personal debt they tend to owe large amounts on credit cards – what are less widely known is how this situation comes about, how to avoid it and how a borrower can use a card to their advantage.

As short a description of how credit cards work as possible, first. A customer looking for greater spending power enters into an agreement with a bank, where the bank issues a card allowing a certain amount of spending (a credit limit). Any purchases made go on the balance of the card, against which a payment must be made every month. Should the balance reach or exceed the credit limit, no further spending will be possible until a payment is made to bring the customer in line with the agreement.

Debt problems with credit cards occur when a customer borrows beyond their means or their circumstances change. In theory, the bank will not lend an amount that the customer will not be able to pay back. However, the checks put in place to prevent this happening are not foolproof, and circumstances are always liable to change. A credit agreement is given based on a customer’s earnings, but should they suddenly lose their job they may find themselves unable to make full payments to their card. For this reason, it is wise to have some savings should you take out a credit card.

There are now more choices than ever for a customer looking to take out a credit card – these different options take into account the varying circumstances and needs of customers. A popular type of card is the low-interest/no interest credit card, which allows the customer to borrow money for a large purchase and then use a “zero interest” period to pay off the balance over the course of a number of months.

Interest-free periods when they were first introduced tended to last three months, but as banks compete for an increasingly crowded market it is becoming the norm for banks to offer as long as a year interest-free. When this period is ending, a customer will often transfer the balance to a new card. If done assiduously, this can see the customer avoiding having to make a payment for years at a time.

Other cards take account of the spending habits of the customer by offering cash back on purchases, Air Miles when the card is used in certain locations, and reward points for frequent use. A recent innovation making it possible for the customer to use plastic even when they find credit hard to come by, the Secured Credit Card allows the customer to “load” money on to their card and use it like a bank account – meaning they never spend money they do not have. These cards also enable the customer to build a good credit rating through regular loading.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Jan 11, 2009.

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Global Economy in 2015

January 11th, 2015 Posted in Canada|Global Economy | No Comments »

Deciding Factors in 2015 Global Economy

Deciding Factors in 2015 Global Economy

As we enter 2015, the global economy will face steady turbulence throughout this year. There are various bizarre factors that will come into play deciding the fate of 2015’s global economy. Falling oil prices, Russia’s freezing economy, and uncertainty in China are only a few to mention. Let’s go over some of the factors briefly.

Canada

Sinking commodity prices will affect oil and other mining sectors. The slowdown could result in less investments and lower hiring rates.

Consumer debt has reached a new peak, making the household debt-to-income ratio record high at 162.6 percent. As an interest rate hike is on the horizon, more personal bankruptcies and a housing market slowdown are a possibility.

US

The nation’s very first rate hike since the recession is a possibility. If this happens, expect market volatility. The US is also facing a tremendous debt crisis with its 3.2 trillion consumer debt. Also, a strengthening US dollar could cause tightening financial conditions in other countries.

Europe

New elections in several countries will bring new economical challenges. Although European leaders will try hard to save the Eurozone from the brink, Greece and Italy will fuel the fire further with their ailing economies. A Japanese-like deflation seems to be a possibility.

China

China can’t keep up being the driver of the global economy and at one point it has to wither away. A slowing Chinese economy will impact other countries and will cause market instability. Property slump and higher bad debts in its financial system add more concern.

Russia

Deep sanctions started causing a deep freeze in the Russian economy and there is no near exit. A plunging ruble and higher interest rates are helping the country to fall into recession. Further crisis in the Russian economy will make other countries on earth suffer as well and there is no guarantee that it will make Russia take a softer approach on Ukraine.

Oil

Collapsing oil prices will put more money into the consumer’s pocket, thus fuelling global economic growth. However, it could lead to geopolitical consequences and financial stress on oil producing and other countries, which could be like a double-edge sword.

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January 8th, 2015 Posted in Global Real Estate | No Comments »

Panama Real Estate Investment

Panama Real Estate Investment

The first thing anyone will say if you ask them to mention something about Panama will undoubtedly be the canal. Some will even work in the famous palindromic pronouncement by Leigh Mercer: “A man, a plan, a canal. Panama!”. And when a nation of such limited size is dominated by a large – and very famous – canal, then it is no surprise that that will be the case. The Panama canal plays a major part for the country’s importing and exporting, for its transport and tourism. Although there is clearly much more to Panama than the canal, it would equally be pig-headed to deny its importance.

One element of Panama’s wider importance, however, is its real estate market. Investors from all around are looking at picking up property in Panama – and with good reasons, too. It is an investment opportunity that is worth investigation at the very least. Panama, being as it is the southernmost country in North/Central America, is therefore something of a frontier before one crosses from one part of America into another, quite radically different part. This makes it a crucially important spot in the Americas, frequently passed through by people traveling from the North to the South or vice versa. It has thus become the fastest-growing economy in Central America and the largest per capita consumer.

A country of such economic importance in the region will therefore need to be attractive to visitors. With the location a dual benefit – both in terms of people planning to travel through and, thanks to the scenery and the climate, also ready to stop here for a holiday – Panama will bring people in, almost without effort. It is keeping them around for long enough that needs to be addressed – something which is happening currently and is manifesting itself in, among other things, an improved real estate sector. This is where much of the external investment in Panama is coming from.

Oceanside apartments in Panama are cheap. This is one major reason why investors are interested, and it does not come at the expense of quality. There are many new builds as the Panamanian government aims to take greater advantage of the tiny nation’s geographic good fortune. Developments like those in Bocas del Toro are liable to catch the attention of any potential real estate investor, whatever the price. When one discovers that luxury apartments can be had for less than a quarter of a million dollars – and that prices will rise as demand does the same – it makes total sense that investment is a consideration for many.

For anyone looking to purchase real estate in Panama, there is good news in the fact that laws allow outside real estate investment to run very smoothly, with almost no restrictions on the process. If you are looking for an investment in an area with geographical importance, which attracts tourism and business, and will not cost you the Earth, then Panama is a very worthwhile place to look. There is every chance to turn a profit or just find a retirement or holiday property here. It’s really up to you.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on May 30, 2009.

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Canadian Banking – World’s Soundest Banking System

January 4th, 2015 Posted in Canada|Global Economy | No Comments »

Canadian Banking System Gets A

Canadian Banking System Gets A+

Good news if you do your banking in Canada – you are storing your money in what is accepted to be the safest banking system in the world, ahead, even of banking paradise Switzerland. This means that even in the current global financial crisis, there is no cause to worry about the safety of your banking deposits, and that putting your money into a Canadian bank is as close as you can get to a guarantee that it will be handled in the most efficient way imaginable. After the annual study by the World Economic Forum polled bankers worldwide, Canada came out on top – well ahead of near neighbours the United States, which came in 40th.

The World Economic Forum polls its members every year, asking them to award marks out of seven for the soundness of a countries banking system. Canada polled a remarkable 6.8 out of seven, ahead of the previous leader as well as other notables such as Sweden, Luxembourg and Denmark, all of which are known for unshakeable fiscal probity.

This is news worth shouting about, as banks in many other countries have had to rely on government bailouts while others have gone to the wall. Canadian Finance Minister Jim Flaherty is a man with plenty of reasons to smile. As his counterparts in supposedly more prestigious economies flounder against a seemingly unstoppable wave of financial doom, Flaherty is presiding over a competitive economy with a lessening level of debt. As other governments borrow to escape the meltdown, Canada’s surefootedness is likely to reassure banking customers.

Canada has a progressive banking system too. It is a lot less stressful to try and get hold of your money here, with more Automated Bank Telling Machines per capita than any country in the world. Anybody who has ever spent time in a city or town with a dearth of ABMs can tell you that it’s a frustrating experience trying to withdraw money that you know you have. Sometimes it’s like they don’t WANT you to spend your money.

Electronic banking plays its own part in this most efficient bank system. Canada has the highest penetration levels worldwide of debit cards (enabling you to make use of your account even if you can’t find one of the country’s many branches or cash points), Internet banking (so if your bank doesn’t have one of the many branches nearby you can still conduct any transaction you care to name) and telephone banking. It’s a quite impressive story overall, to be honest. Knowing that your money is safe and that you face the fewest restrictions imaginable should you wish to make use of it means Canada should be in a position to ride out the crisis and come out the other side ready to compete.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Jan 4, 2009.

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How to Buy An Island

January 1st, 2015 Posted in Global Real Estate | No Comments »

How To Buy Your Own Private Island

How To Buy Your Own Private Island

We’ve all had that conversation – if you became improbably rich overnight and money was literally no object to you, what would you buy? Answers include sports teams, huge houses with a hundred rooms and a garden big enough to land a jet plane in, a jet plane, a flight into space and so forth. We all have our own ideas on what we would buy with our new found wealth, and in many cases they are pretty common ideas. One idea that pops up in a great many of these conversations is a private island. As money is no object, you could trick that island out so that it was something really special. You could buy a speedboat so that you can get back to the mainland in a hurry if needs be. It’s a mouth watering prospect for many people.

The truth is that you do not need to be rich beyond the gift of man to actually buy an island. Sure, the more money you have in the bank the wider the choice. If you are a millionaire then that makes things a lot more straightforward. And there is no point in denying that a private island will not come cheaply. You need to be looking at six figures before it becomes well worth parting with your money. But with all of that taken into account, it is not such an outlandish idea (figuratively speaking, anyway. Literally speaking, it is exactly what you would call “outlandish”). Depending on where in the world this dream island is located, prices vary – and somewhere with a lot of islands and (comparatively) little demand, you could find yourself in possession of an island for as little as $200,000.

There are many things to take into account. As with buying any plot of land – because, after all, an island is just a plot of land surrounded by a body of water – you will get more if you pay more. This includes facilities, construction and general readiness for human habitation. A cheaper island will come with less already on it, and if you buy at the bottom of the range you may need to make your own arrangements for things like electricity and water supply, accommodation and other such essentials. Unless you really are ridiculously rich there is little point in buying an island and then not doing anything with it. If you plan to live there or rent it out to someone for a profit, you will want to make sure that it is habitable.

It is possible to rent an island before you buy, in order to get a feel for it and see if you would be prepared to take it on as a full time thing. There are numerous sites on the Internet devoted to doing exactly this. They are stacked with color photographs of the islands in question – although the phrase to keep in mind is caveat emptor - buyer beware. Always make sure you have seen the island for real before you even consider parting with your money. Aside from that, it’s your party – and it is a pretty sweet feather in your cap to be able to say you own an island.

NB – If you are interested in finding sites that deal with buying islands, search on Google for these: buy, rent, island, etc.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on May 18, 2009.

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The Dark Side of Retiring Abroad

December 29th, 2014 Posted in Retirement 101 | No Comments »

Retiring in Low-Cost Countries May Not Be As Glorious As It Seems

Retiring in Low-Cost Countries May Not Be As Glorious As It Seems

It’s hard not to come across those alluring and glorious ads, websites, and stories about retiring in a low-cost country. The promise of living in a heavenly beach resort bungalow or ocean-view condo for $1000 per month is hard to pass on. However, things may not as glamorous as promised. Before you board a plane to a tropical paradise to catch your dream, consider all the ins and outs of living in a foreign country. Today, I will mention a few of them.

Security – This is my number one concern. These low-cost countries where heaven is promised for $1000 or even less a month are still 3rd world countries. Security and law enforcement are nowhere near comparable to countries like Canada, USA, Australia, and so on. If you keep an eye on news, you will often come across those where foreign retirees in these countries were killed in their ocean-view bungalows by intruders during a robbery. Are you willing to take your chances and live somewhere where corruption is widespread and security is non-existent?

Friends and Family – Living in a foreign country means you are losing your network of relatives and friends and also the support you receive from them. Yes, you can communicate via Internet or phone, or even possibly visit them once every few years – but it’s not the same when you have your friends and family available for you 24/7.

Health Care – Access to universal health care is a must-have during retirement years. Even if you are able to buy healthcare in these low-cost countries, it will not be nowhere near in quality and technological advancement as your home country. Also, if your are from a country like Canada where health care is free, you will have to spend a lot of money for health care in your new host country, and as you get older health care spending will grow larger.

These are only a few I mentioned above. There are much more, as retiring abroad adds layers of complexity to every aspect of life. Before deciding on moving abroad, do your homework and make educated decisions to live a happy life, whether at home or in a foreign country.

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How to Buy an RRSP?

December 25th, 2014 Posted in Investing|Personal Finance | No Comments »

What Is An RRSP

What Is An RRSP?

An RRSP (registered retirement savings plan) is not something you actually buy. You buy qualified investments to hold inside an RRSP. This is a type of account and you can hold a variety of products inside your RRSP.

What Products You Can Buy?

You can buy mutual funds, GICs, stocks, savings account and so on. These are just some basic products to mention. There are many other investment products you can buy and hold inside your RRSP account.

Is It Complicated?

Depending on what you are buying, it can be complicated to buy certain products such as stocks, bonds, etc. In my book Invest Now, I have described in detail how to buy these products. Today, in simple words, I will explain how you can open your first RRSP in a snap.

Two Easy Solutions for Novice Investors

Option One – Walk Into Your Local Bank

This is the easiest way to buy. Just walk into your local bank branch and your personal banker will be able to explain ins and outs of RRSP and what products you can buy based on your personal needs. Most of the banks have a variety of products to choose from, and you can pick the one that best suits your needs.

I like the idea of opening an RRSP in your local branch because it is very easy and simple. This option gives you the opportunity to talk to a live person, and you can hold your RRSP with the same institution you are already dealing with – that translates into less hassle and paperwork. Also, you have the option to transfer your money into your RRSP from your chequing or savings account.

Option Two – Do It Online

Financial institutions like ING Direct or President Choice Financial let you purchase RRSP online. This is good in one sense that you are doing everything from the comfort of your own home; however, there is no one sitting in front of you to answer your questions. Although they do have customer support to call, it’s not the same as talking to a person in front of you.

Final Word

One major advantage of going to a bank is that bankers are able to recommend and advise products based on your individual needs. However, this is not the case if you choose online option. Customer service reps will answer your questions and guide you through the procedures to choose a product, but they are not licensed to advise.

These are the basic and simple procedures to buy your RRSP. If you are looking to buy a wider variety of products, I would recommend award-winning book Invest Now – available at Chapters.Indigo bookstores and at all online retailers.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Dec 28, 2008.

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