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How do you make money? When this blog was first started I thought it would be an interesting way to earn some passive income. Over that last couple of months I’ve learned that I was sorely mistaken in this thought.

Now fortunately for me I had other intentions other than earning revenue from Be 4 Success when I launched it. The blog is my digital resume, full of my thoughts and rants on the subjects that matter most to me.

However, it does raise the question of where does your money come from? How do you make money?

Nothing would please me more than for my blog to make it to the big time. Allowing me to work at home deriving my income from Be 4 Success. I realize that this dream is a long way from becoming a reality and indeed may never become a reality. I’m ok with that, as the blog still serves a purpose beyond making money. Which is good, because Be 4 Success doesn’t really make any money at all.

Now I know that I can change that. I can implement a marketing plan that could see Be 4 Success become a dominant blog within the personal finance and growth niche. It is entirely possible.

Yes, Be 4 Success is in a popular niche with lots of competition. However, I believe there are ways to differentiate myself from the competition. Do I plan to follow this course of action?

Absolutely. Be 4 Success is about living a more successful life, on all levels. Personally, professionally, financially, this blog exists to provide sound advice towards living a more successful life.

I digress, I started this post out by asking How do you make money?

For most of us we make money by working 9-5 for the man, that faceless corporation that pays us our daily wage. Now, there is nothing wrong with this. The vast majority of people earn their living this way. But what if you could change that? What if you could take hold of your own financial destiny and earn a living on your own terms?

Would you take the opportunity?

I would, assuming the opportunity appealed to me. Which gets me back to writing at Be 4 Success. I enjoy it. It’s a constant challenge to improve myself and share with others. If one day Be 4 Success got to that level of providing for me, I believe I would embrace it and take the opportunity.

What about you? What opportunity are you waiting for?

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The article focuses on retirement and raises some valuable points. Key amongst them are that there are still a great deal of companies that have value. As I mentioned previously there is a great deal of value in the market which can be bought for a bargain right now.

One of the other points mentioned in the article is that Canadian bank stocks are paying an average dividend of 7 percent. Given the current pricing of such stock it makes an attractive purchase at this point in time.

Retirement strategy is all about buying and holding your portfolio. Ensuring that you have good diversification between assets and geographic regions. Stick with your strategy, remember why you developed it in the first place.

If you aren’t currently in the market and are waiting for the stimulus plan to kick start the recovery, my advice would be to slowly starting buying back in. As the article mentions, if you wait on the sidelines until things start to happen you could miss out on the first 10 – 20 percent increase.

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Include the fact that many economists think that the US Stimulus Bill was introduced to late to have an effect during 2009 and we have an interesting set of circumstances.

For the past few months I’ve been of the opinion that the present market conditions represent an excellent buying opporunity. Stock and mutual fund prices are surpressed which means that good, solid companies can be bought at bargain prices.

Over the last few months I’ve been advising clients to start buying back into the market. What we’ve seen on a daily basis is up one day, down the next. Eventually, the market will recover it’s a question of when not if. Unless of course we fall of a cliff.

With the news today I wonder if perhaps that cliff is approaching? With GM seeking more money and the possibility of bankrupcy being considered how will the market react? If the stimulus plan isn’t going to deliver until 2010 how will the market react? Is another cliff, another dive in the market approaching?

One thing I do believe when it comes to investing is that the doom and gloom often becomes a self-fulfilling prophecy. When the news media starts reporting on negatives in the market people listen and pull their funds. It’s all about confidence, if everyone thinks the market is going to drop, then the market is going to drop.

If people believe the market is going to go up and they start investing, the market will go up. It’s the same with rescissionary periods. People stop spending because they are worried about jobs, about having enough money. If we keep spending money, we create demand for goods and therefore jobs.

To answer my question of should you keep on investing; Yes, absolutely. I’m not saying dump your life savings in now. I do believe that buying into a balanced mutual fund portfolio on a regular basis is a solid strategy to building wealth.

Time will tell if I’m right or not. However, my belief is that the market is not going to fail. The economy is not going to crash and never recover. To believe that indicates that you have no faith in the western way of life and if these idea’s do come to pass we all have bigger problems to deal with.

photo credit: azrainman

Tomorrow is Valentine’s Day. It’s the mushy feel good, buy stuff for that other person in your life holiday. Let’s be honest though, it’s expensive. I mean it can be really expensive; dinner, a show, a bottle of wine, that nice ring I keep seeing advertised.

Given the economic times it makes sense be a little bit more frugal this Valentine’s day. As today is Friday the thirteenth I decided to pull out Jason’s top 13 ways to slash your Valentine’s budget.

1. Do nothing. Valentine’s day is a commercial holiday, designed to get you to spend money. Rebel against the system and show what an individual you are. If your significant other doesn’t kill you, Jason will.
2. Do the card thing. Jason isn’t normally into the mushy aspects of things, but if you need to spend some money, spend it on a card. Just write something nice inside or Jason will track you down.
3. A home cooked meal. Rather than going out and dropping some significant money on an overpriced meal, show how much you love (or hate if you’re a bad cook) that special person by preparing a meal for them. If the meal is good they just might do the dishes for you. Jason likes spaghetti and meatballs, extra sauce please.
4. Set a limit on your spending. If you must buy a gift, pick a reasonable dollar figure to spend. Doing so encourages creativity in your gift giving. Jason needs a whetstone.
5. Go for a romantic walk in the park. Nothing says I love you like holding hands while walking through a misty park just after sunset. Did you hear something?
6. Make a gift from scratch. Again if you must give or are expected to give a gift, why not be creative and make something yourself, perhaps a mix tape.
7. Rather than spending money on Valentine’s day, why not plan a vacation later in the year. Then use the money you would have spent on Valentine’s for the trip. Jason knows of some cabins that are for rent.
8. Rather than giving a gift, make a donation to a charity on each other’s behalf. When times are tough charities often suffer from a lack of funding. Jason recommends you donate blood.
9. Jason recommends you read Neil’s article on 25 Affordable Dates.
10. Be social and invite another couple over for the evening. Break out some board games and have some fun. Just don’t invite your single friends, that makes Jason angry.
11. Rather than spend money on one another buy a gift that you can both use. Perhaps something around the house needs fixed. It might not be romantic, but it is practical. Jason’s a fan of practical things.
12. Visit the museum or the art gallery. They are usually low cost and it’s a great way to kill a few hours.
13. Rent a scary movie and cuddle. Nothing more romantic than that. Jason recommends…

Do you have any idea’s on how to make Valentine’s Day an affordable occasion? Please share, Jason likes it when the other children share.

Taking a cue from her I thought I would approach the topic from a slightly different angle. As Tess covers how to get through unemployment on a personal level in this post, I figured I would cover how to get through a time of unemployment from a financial standpoint.

Here are five tips to prevent unemployment from beating up your finances:

• Have an emergency fund ready. I’ve spoken about this before and I can’t continue to stress how important it is to have emergency funds ready. If you don’t have one now, start today, make it automatic!
• Cut out the unnecessary expenses. You don’t really need the Starbucks coffee or another beer. Being out of work means tightening the belt and cutting the excesses. You may find that you can live without these items and when you find yourself working again you may be ahead financially.
• While you’re looking for a new job or career don’t be afraid to take on a part-time job. This is a subject that Tess covers, but it needs to be stressed. You need to bring in money to pay the bills. Don’t be stubborn or let your ego steer you away from part-time work.
• Be careful with credit. When you aren’t working it’s easy to start charging the credit card or drawing down on the line of credit. This can be dangerous if you haven’t cut out the unnecessary expenses. Remember any money you borrow during this time needs to be paid back and the interest will be accumulating. Don’t create another headache for yourself.
• Cut coupons. Go through the flyers and cut the coupons out. You need to find ways to save money on the items you still need to purchase. This might mean shopping at the discount grocer as opposed to the organic health food store.

When you’re coping with unemployment it is important to be realistic about your expenses and finances. Many people struggle to let go of the extra’s they have in life as they don’t want friends to know how bad the situation is. Often this leads to more problems down the road.

Regardless, being unemployed is a tough go, but it is survivable. Just be realistic.

As it is a New Year there are resolutions and predictions to be made. While I normally stay away from these things I thought it would be fun to put together a list of Financial Predictions. Should you follow the intention of these Predictions you will find yourself in a better financial situation at years end than you started! That is my prediction.

Without further delay here are Be 4 Success’s 2009 Financial Predictions!

1. I predict that if you contribute a minimum of $100 to your retirement fund every time you get paid that you will be one step closer to retiring as a millionaire.
2. I predict that if you open a high interest savings account for use as an emergency fund and contribute $50 every time you get paid you will take the financial stress out of your life when dealing or considering emergency expenses. Aim to save 3 to 6 months worth of income.
3. I predict that if you put your year end bonus into the emergency account mentioned above you will remove that stress much quicker.
4. I predict that if you establish a second high interest savings account for the purpose of vacations and contribute $50 to it each pay day you will vacation more often and more enjoyably.
5. I predict that if you eliminate you $5 a day coffee habit and contribute that money to any of the accounts listed above you will enjoy life much more.
6. I predict that if you create, maintain and review a financial plan you will come out ahead of those who don’t.
7. I predict that if you invest your money in a well diversified stock or mutual fund portfolio on a regular basis you will survive downturns in the market far better than those who don’t.
8. I predict that if you resist the urge to sell your investments when you’ve already lost money and instead stick to your financial plan you will come out ahead of those who don’t.
9. I predict that if you stop living off credit you will reduce your worry over paying bills, and will be better off financially.
10. I predict that if you review your needs and wants you will discover that you can do more with less. This will allow you to eliminate your wants and you will be better off financially, emotionally, and spiritually.
11. I predict that if you finally stop keeping up with the Jones’ you will be better off financially and will wonder why you ever bothered in the first place.
12. I predict that if you live life frugally buying quality when required rather than purchasing crap consistently you will be better off.
13. I predict that when vacationing with the family if you choose camping over Disney you will be rewarded with more money in the bank and a greater bonding experience with your family.
14. I predict that if you follow these predictions you will live a happier and financially successful 2009.

photo credit: Hamed Saber

Iwas chatting with a colleague the other day about retirement planning and pension options. Given all the market turbulence these days it’s a conversation that we’ve been having frequently.
During the course of our conversation my colleague made the following statement:

“You’re pension should be boring.”

This got me thinking that boring really is beautiful.

We all dream of retiring rich. It’s a great beautiful dream and wish it as a reality for all of us.

One of the ways to increase your odds of this beautiful dream becoming a reality is to be boring.

You heard me, when it comes to your investments be boring.

Remember, I’m not advocating a get rich quick strategy here. If you want that look elsewhere. What I want is for everyone to live successfully and that requires financial discipline.

Ok Neil, you’re thinking you want us to have a boring investment portfolio. Care to expand on that idea?

I thought you’d never ask!

1. Boring is bonds. I know historically they have lower returns than the equity markets. There’s a reason, they’re safe. You need a bond component in your retirement portfolio to help mitigate the down side risk of the equity markets. How much of a percentage is up to you and your own risk tolerance.
2. Boring is Blue Chip. That’s right the cornerstone companies not only of the economy but of your everyday life. You want to buy the companies you purchase from on a daily basis. Your consumer staples, consumer discretionary companies. If you shop there and you know your neighbours shop there, buy the stock. These companies usually pay a reasonable dividend and have good long term growth prospects.
3. Boring is asset diversification. Get your fingers into all the pies! I was once told you can’t go wrong with bank stock. While I agree with that (I do work for a bank), if it’s all you own you’re probably hurting right now. You need asset diversification, when oil is up, gold is down and vice versa. You need to be properly balanced so that a downturn in one sector doesn’t sink your portfolio.
4. Boring is global diversification. I live in Canada and I have many clients who don’t want to invest outside of Canada as we’ve done well over the past few years. This blows me away, while we’ve done well we’re only 3% of the global economy. You need the other 97%!  Many clients are afraid of investing in the US, to that I say my US Blue Chip Equity Fund has lost the least amount of value in my total portfolio. These companies are still making money, just not as much. Other people don’t want to invest in emerging markets because they’re ticked the manufacturing jobs have all moved due to cheap labour. To that I say, tough, it’s going to happen anyways you may as well profit from it. You get the point, global diversification.
5. Boring is investing for the long haul. Time in the market, not timing the market. Until the recent crash occurred North American equity markets had returned around 9.4% over the last 10 years. The average equity investor earned approximately 4.5%. Why? They tried to time the market. Give up on that, just invest regularly and stay invested!
6. Boring is scary as hell! Boring is riding this market turmoil out and not panicing. Your retirement portfolio is the only thing you will sell low and buy high. DO NOT SELL your investment portfolio off right now and try to time the upswing (see above) you’ll miss and loose out on ever recouping  your losses.
7. Boring is not listening to market updates on a daily basis to see how your investments are. Doing this will drive you insane. It is also not listening for the media to tell you when the market is recovering or the rescission has ended. They will have missed that by about 6 months. Read the points above again and stay invested.
8. Boring is recognizing when to buy value. It’s boxing day at the stock market, but becareful there are a lot of duds. So if you are going to pour some extra cash into the market right now buy Blue Chip or do your research really well.

Remember Boring is Beautiful when it comes to your retirement planning. Keep it that way and you’ll finish rich.

photo credit: Unhindered by Talent

So you’ve decided to take the plunge and get back into the market. However, you know you don’t have the time or experience to research everything on your own. You know you need to work with an Investment Advisor; you’re just not sure if you can trust them.

You wonder if they’re looking after their best interests before your own. You want to know that they are accessible to you. Most importantly you want to know you can trust them.

If these questions are running through your mind, read further and hopefully your questions will be answered.

When searching for an investment professional to work with you want to keep several key factors in mind.

1. Sit down with your potential advisor and interview them. Ask them about their experience, how long they’ve been in the business, their investment style. Also, find out about their accessibility, can you call them when required? How often are statements mailed? One key tip to remember is that while you’re interviewing them, they are also interviewing you.
2. Ask for a reference. Some advisors may ask certain clients if they can be used in that regard. Don’t be surprised if your potential advisor denies this request though, due to privacy legislation they can’t just hand out client information. You might not want them handing out your phone number either.
3. Come to the meeting prepared. If they ask you to bring certain documents with you, then bring them. Remember, if you sign on with them it’s based on a mutual relationship of trust. Don’t start out on the wrong foot.
4. Ask how your advisor gets paid. A good advisor will cover this without being asked. If they dodge the question, then you should think twice about investing with them. Many people are against paying investment advisors, just remember the old maxim ‘nothing is free’. A good investment advisor will be worth what you pay.
5. If the advisor asks you to sign up and transfer your money in on the first meeting you may want to take a few days to think about it. There is no cooling off period in the investment market.
6. You advisor should be offering to create an investment plan or road map. This should be thoroughly explained to you before you agree to hire out their services.
7. Find out what other services they offer. Do they provide a thorough financial plan or will they just be investing your money? Can they make insurance recommendations? Do they work with a tax or legal specialist?

Working with an Investment Advisor may not be best for you. If you want to determine if you’re better off alone read the following article.

What are your thoughts on working with an investment advisor? Have you found it to be a rewarding experience?

photo credit: elbfoto

Black Friday is upon us and the official Christmas shopping season has begun. That means retailers will have deals designed to lure customers into a spending frenzy.

Of course with the current economic situation many consumers will be holding back on their holiday spending. To assist in keeping Christmas spending under control I’ve developed a short list of things to keep in mind as you begin your Christmas shopping.

Surviving the shopping frenzy isn’t hard, it just requires a little common sense. Follow these five simple guidelines and you should come out ok.

1. Make a list of the items you need to purchase. By thinking ahead and planning your gifts you’ll reduce the urge to make impulse buys that increase your spending unnecessarily. You will also save time as you know what you’re going to purchase, you won’t need to window shop for that perfect gift.
2. Do your browsing at home. If you aren’t sure what to buy for that special someone or haven’t narrowed your choice down, do your browsing on the Internet. Once you know what you’re buying add it to the list you started in #1.
3. Create a budget and stick to it. Decide how much you are going to spend on each person you are buying for and don’t go over that limit for any reason. You may find the ‘perfect gift’ but if it’s over your budget it isn’t perfect for you! Sticking to your budget is the easiest way not to over spend.
4. Don’t be fooled by great deals that are only designed to get you in the door. Many retailers will be offering items up at a loss, hoping you’ll by something else. This will result in you realizing a loss. Again, stick to your budget and your list.
5. No matter what happens, don’t spend money your don’t have. With the current economic situation the last thing you want to be doing is putting yourself into unnecessary debt. We all want to buy the gift that everyone is going to love, that doesn’t mean it has to be expensive. It definitely doesn’t require you to place yourself into debt.

I hope these tips are useful and more importantly as we move into the Christmas season I hope that you have a safe and enjoyable one.

photo credit: orphanjones

The current credit crunch has made the availability of Saloans from financial institutions harder to get. There is simply less money going around and financial institutions are being more diligent about who they lend to.

Over the past few weeks I’ve met with many clients looking for various types of financing. Everything from loans to mortgages. In many of the cases I felt the applications were borderline regarding their ability of gaining approval. As an advisor in the bank it’s my job to make the application as attractive as possible, without fudging numbers, to assist my clients in gaining approval. To accomplish that I use the 4 Cs of Credit and write my comments to the underwriter to reflect the clients situation.

What exactly are the 4 Cs of credit you ask? Well they are aspects of your financial situation that are used to paint a picture regarding your credit worthiness. As it is becoming increasingly more difficult to gain credit, it’s important to understand these four principles in order to maximize your ability to gain that mortgage or much needed loan.

The 4 Cs of Credit

• Character: Your Character covers things such as employment and how long you’ve been with your employer. Financial institutions want to know your job history for the past two or three years. If you’ve had three or four jobs in that time span it doesn’t bode well for your Character. Job stability is another factor that plays into the Character assessment, if you have just switched jobs within the last few months and are on probation this can impact the decision. Character also covers your home address, similar to employment history, if you have moved around a lot over the past few years this shows instability and can have a negative impact. Finally, your relationship with the financial institution that you are dealing with. How long have you been a customer? Are you a good customer, have you fostered a relationship with you banker?
• Capacity: Capacity speaks to your ability to handle the new debt burden. This is governed by your Servicing Ratio’s. Your Gross Debt Service (GDS) is your monthly housing costs (mortgage payment or rent), plus property taxes, heating, and 50% of condo fees if applicable. This is divided by monthly gross family income, your target number here is 30%. Your Total Debt Service (TDS) is your housing costs, plus other debt divided by monthly gross family income. An ideal range would be to keep this ratio near 40%. Remember that TDS doesn’t factor in how much you owe, it factors in how much you could owe. In other words if you keep a zero balance on your credit card you may feel your ratio is low. Your financial institution considers this ratio when the credit card is maxed out as that is your maximum capacity. Each financial institution will have their own guidelines for acceptable ranges for Servicing Ratio’s. Capacity is a good reason to not hold multiple credit cards with large limits, as this will effect your ability to gain future credit.
• Capital:Capital refers to your assets and your ability to build your assets. One of the most common comments I see from underwriters is “client has no savings.” Financial institutions want to know that you have the ability to save. When you ask for financing the bank wants to know you’re good for it, that you have the habits of saving in place. If you are already a home owner with a decent amount of your mortgage paid down, with reasonable retirement and non-retirement investments then you have good capital and you need not worry about this C.
• Credit Rating:Your Credit Rating is that unseen number that dictates how you’ve handled past credit. If you’ve missed payments, defaulted on loans etc this number is going to be low and you should prepare yourself for disappointment. If you are living on credit and borrowing from one source to pay another off, your credit rating is going to be low. If however you make regular payments that are more than the minimum’s you should be ok. When you’re working with your banker arranging a loan, be sure to disclose all your outstanding debt. It’s going to show on your credit report, so if you don’t disclose it the bank then asks the question why and you’ve damaged your Character.

The Four Cs of Credit effect each other, they aren’t stand alone entities. Being strong in one area means you should be strong in another.

A final word on Credit. You wouldn’t lend $100 to someone on the street, your financial institution looks at it the same way. You need to prove that you’re worth the risk. The burden of proof is on you.