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Friday, January 25, 2008

The Ten Commandments of Good Investing

Truly great investment advice is easy to understand and you can actually profit from it. Finance "Gurus" often resort to financial jargo which just confuses and backfires but the real financial geniuses talk in simple-not-simplistic terms. What is appealing about the 10 commandments of Good investing is that they don't promise a quick pay-day which lets face it easy come easy go. The Globe and Males Globe Investor Magazine has combined 10 commandments collected from the best financial experts. Click the link and learn from the best.

Regular investing keeps your portfolio growing

Portfolios grow in two ways: by their rate of return, and by the money you add to them. Put money into your portfolio on a regular basis and you can realize additional benefits that can help you achieve your goals. By investing regularly, you can:

  • Pay yourself first by investing a set amount every month or week, for example. This is a proven technique for adding discipline to your savings routine and will help you stay on track to reach your goals.
  • Automatically build your portfolio without getting distracted by what's happening in the markets and other events. When markets are uncertain, you are able to stay the course and stick with your plan.
  • Invest regularly by taking advantage of dollar cost averaging, a strategy where you purchase more units when prices are low and fewer when prices are high. Over the long-term, this can lower the overall cost of building your portfolio.

Some Tips to Keeping a Good Credit Rating

Your credit rating or credit score speaks volumes. And what it says is of interest to those who can lend you money, lease you a car, offer you a credit card or provide you with a mortgage. A good credit rating means that you are a good credit risk, making it easier to borrow money and at a preferred rate. So having a good credit rating is an asset you’ll want to protect. Here’s how:

Pay your bills and pay on time.
Payment history accounts for as much as 35% of your score and even being a few days late could cost you points.

Keep credit card balances in check.
Maxed-out credit cards are a red flag. Ideally, your debt-to-credit ratio should be around 30% so on a credit card with a $2,000 limit, you shouldn't carry a balance of more than $600.

Limit yourself to two to four credit cards.
Too many credit cards can set off warning signals but too few won’t provide enough credit history for a proper evaluation.

Don’t apply for credit you don’t need.
It can be tempting to apply for an in-store credit card when it comes with a discount but frequent applications for credit may negatively affect your score.

Stability counts.
Moving frequently and changing employers might erode your credit rating. The longer you are at your current address or with your employer, the better the opportunity to enhance your credit-worthiness.

Check your score.
You should probably review your credit rating from time to time to make sure it’s accurate and be sure to correct any errors. Reports are available online from rating agencies such as Equifax and TransUnion.

How to turbo-charge your educational savings

Wondering how to make the most of the money you set aside for post-secondary education? The answer is simple: invest in a Registered Education Savings Plan or RESP. An RESP offers two significant advantages over taxable investment accounts that can help significantly enhance the performance of your money.

RESP advantage #1: Canada Education Savings Grant (CESG)
Each year, for each eligible child, you can earn CESG equal to 20% of your annual RESP contribution up to an annual maximum of $500 and lifetime maximum of $7,200. That’s like getting an instant 20% return on your contribution!

RESP advantage #2: Tax-deferred growth
The investment earnings in your RESP grow tax deferred. Assuming a 40% tax rate, not paying tax on investment earnings means that instead of a 6% after-tax return, you could be earning 10% – a substantial difference. And when the plan's earnings are withdrawn to pay for school expenses, it’s taxed to the student, usually at a much lower tax rate.

RESP advantages really add up
Together these advantages can make an incredible difference to how much you save. Assuming, an 8% pre-tax return, $2,500 annual contribution for 18 years and a marginal tax rate of 40%, you would have $117,840 in an RESP compared to $72,346 in a taxable investment account.

Sunday, January 20, 2008

Cool Website: Rentometer

This is a definite time and money saving website. Rentometer is a free service that allows you to type in your address to see if your rent is comparable to others in your area, if your paying too much or if you've got it good. It also shows other rental properties in your neigbourhood on a map and how they fair in terms of pricing.


Retirement Podcasts

The Bank of Montreal has a new collection of podcasts that offer tons of info on a variety of issues that impact Canadians close to retirement.

  • Life Planning
  • Financial Considerations
  • Caring for yourself and others

7 Tax Resolutions for the New Year

  1. Maximize your RSP contributions:
    Retirement Savings Plans (RSPs) continue to be one of the best savings vehicles available. Besides upfront tax savings, RSPs let your investments grow on a tax-deferred basis. A contribution early in the year helps take advantage of this.
  2. Make RESP contributions:
    Contribute early to a Registered Education Savings Plan (RESP) to maximize the tax-deferral benefits and allow you to invest the additional amounts received in the form of a Canada Education Savings Grant (CESG). The federal government increased the maximum annual CESG that can be received from $400 to $500 (and from a maximum of $800 to $1,000 per year if any unused grants are carried forward). In addition, the annual $4,000 RESP contribution limit per beneficiary no longer applies although the $50,000 lifetime contribution limit per beneficiary remains in effect.
  3. Split your pension income:
    As you prepare your 2007 tax return, you may elect to allocate up to 50% of your eligible pension income to your lower-income spouse or common-law partner for income tax purposes. You can do this by completing Canada Revenue Agency (CRA) form T1032, Joint Election to Split Pension Income, together with your spouse or common-law partner. Eligible pension income includes annuity payments received from an employer pension plan and, if you are age 65 or older, payments from your Retirement Income Fund (RIF).
  4. Contribute to a spousal RSP:
    In light of new rules allowing spouses to split pension income, some may wonder if it still makes sense to contribute to a spousal RSP. In many cases, the answer is still yes. Income from a spousal RSP (or its successor RIF) can be fully taxed in the hands of the lower-income spouse or common-law partner, as opposed to only half of the qualified pension income that can be split with a lower-income partner. In addition, spousal RSPs permit income splitting to take place before age 65.
  5. Reduce taxes at source:
    If you regularly contribute to an RSP, make alimony payments, incur significant interest expense, or have child care expenses, you may be able to have less tax withheld at source by your employer by completing CRA form T1213.
  6. Keep your public transit receipts:
    In 2007, a federal tax credit for the cost of buying a monthly (or longer duration) pass for buses, streetcars, subways, commuter trains, and local ferries was expanded to include weekly passes and cost-per-trip electronic cards in certain situations. Keep your expired passes and receipts issued by your local transit authority.
  7. Revisit your portfolio and financial plan:
    The New Year can be an opportune time to align your portfolio with your tax planning goals. It might be a good opportunity to rebalance your portfolio as well as ensure that you are on track for 2008 and beyond.

Saturday, January 19, 2008

Sex in the City meets Business School



Darren Star's new show Cashmere Mafia premiered a few weeks ago and as a person highly interested in anything that involves women and business, I thought I would watch. So far it has been pretty good It follows four wome who have been friends since business school and who support eachother in work, love, and life. It tackles such issues as how men handle powerful women in the business world, and this always makes for good TV.

Cool Website !

Visa's ATM Locator website is sure to help in a cinch. You just type in your location and the ATM locator will brink up a map that looks like this will come up showing you where the closest ATM machines are.


Good Advice from the Courage Coach

Pink Magazine has had a new addition of blogs put on their site for female executives to Pink Experts. I just read a very good post from their courage expert, Sandra Walston, and thought I might share it with my readers in hopes that it might help them find their voices. Ms. Walston states that you can determine the quality of your relationships by analysing your relationships. Do you hold in resentments towards your boss or business partner and then gossip about it behind her back, if so you may want to rethink your style.

"Here's how to converse with courage:

  • Become a detached "observer" of yourself. When you catch yourself hesitating to share something you want to say, start with this phrase: "I want you to know that it takes courage to share …." This sets the stage for a different kind of listening and helps you be authentic.
  • Take notice of instances when you regret not speaking up.
  • Watch for this phrase: "I wanted to say …." Often a woman will swallow her words of wisdom for fear of losing her job/image/esteem/friend (whatever!). But what you meant to say or "should have" said doesn't count if you didn't. "

It takes a conscious choice and effort to speak from your heart and spirit so as not to have any regret. She finishes with this quote from poet Mary Oliver and I feel it's only fitting to leave you with the same one because it just makes sense.

"When it's over, I don't want to wonder
If I have made of my life something particular, and real.
I don't want to find myself sighing and frightened,
Or full of argument.

I don't want to end up simply having visited this world."

Saturday, January 5, 2008

Something Fun for the New Year

PINK's Stock Market Challenge
Only 40 percent of women say they've become more knowledgeable about the stock market in the last five years, so to make investing more accessible and fun, PINK introduces its Million-Dollar Stock Market Challenge. One thousand participants will invest an imaginary $1 million each for 12 weeks for a chance to win big prizes.
Click pinkstockchallenge.com to register.

The All-Canadian Wealth Test

Click the link and read the article to find out how you measure up financially for the new year.