October 2010 Miscellaneous Fundamentals
- Thread starter Ally
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- Mar 24, 2009
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What to do when you don`t know what to do
Two years after the financial crisis scared investors out of their wits, many are still licking their wounds, wondering where to put excess cash.
As the title of the new film Wall Street: Money Never Sleeps should remind us, there`s seldom a moment when financial markets aren`t reacting to events somewhere in the world.
What do you do when you don`t know what to do? The short answer is: Nothing.
But the trouble with doing nothing is that is all investors get paid after inflation and taxes if they remain parked in instruments paying negligible interest, such as money market funds, short-term GICs, treasury bills and savings bonds.
Rudy Luukko, investment editor for Morningstar Canada, says there`s good reason for outflows from money market mutual funds.
Read the full article here.
Two years after the financial crisis scared investors out of their wits, many are still licking their wounds, wondering where to put excess cash.
As the title of the new film Wall Street: Money Never Sleeps should remind us, there`s seldom a moment when financial markets aren`t reacting to events somewhere in the world.
What do you do when you don`t know what to do? The short answer is: Nothing.
But the trouble with doing nothing is that is all investors get paid after inflation and taxes if they remain parked in instruments paying negligible interest, such as money market funds, short-term GICs, treasury bills and savings bonds.
Rudy Luukko, investment editor for Morningstar Canada, says there`s good reason for outflows from money market mutual funds.
Read the full article here.
- Joined
- Mar 24, 2009
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- 16,743
Land use implications of high-speed rail
Decades in the making, high-speed rail is finally coming to California. In 2008, the state passed a $10 billion bond initiative to build the first leg of its ambitious state-spanning high-speed rail network. These nation-leading plans were rewarded in January with a $2.25 billion federal infusion, part of an $8 billion high-speed rail grant program made possible by the 2009 stimulus bill. When the California network is completed in 2025—with a projected overall tab of $45 billion—the state will have more than 700 miles (1,100 km) of track that will take passengers from San Francisco to Los Angeles in less than three hours, with trains achieving top speeds of 220 miles per hour (354 kmph). What will it mean for land use?
Read the full article here.
Decades in the making, high-speed rail is finally coming to California. In 2008, the state passed a $10 billion bond initiative to build the first leg of its ambitious state-spanning high-speed rail network. These nation-leading plans were rewarded in January with a $2.25 billion federal infusion, part of an $8 billion high-speed rail grant program made possible by the 2009 stimulus bill. When the California network is completed in 2025—with a projected overall tab of $45 billion—the state will have more than 700 miles (1,100 km) of track that will take passengers from San Francisco to Los Angeles in less than three hours, with trains achieving top speeds of 220 miles per hour (354 kmph). What will it mean for land use?
Read the full article here.
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World real estate as intertwined as financial markets
Real estate markets have become just as interconnected as financial markets, so they can be equally vulnerable to volatile swings in global fortunes, argues Michael Goldberg, dean emeritus at the Sauder School of Business at the University of B.C.
"Local housing markets are certainly very open to invasions of capital from abroad, and these can be disruptive," Goldberg said in an interview.
"When money flows in, people say, `Great, we`re on the world map, isn`t that terrific?`"
However, just as easily as it flows in, Goldberg noted that capital can flow out "as somebody finds the next hot place where you simply have to have a condo in the global marketplace."
Goldberg made his point to The Sun Tuesday ahead of a roundtable discussion on globalism and real estate hosted by the Sauder school`s centre for urban economics and real estate at the Fairmont Pacific Rim hotel.
Discussion was guided by the fact that capital for all real estate is now global, whether it is the bulk pre-sales of Vancouver condos overseas or Canadian pension funds buying Brazilian shopping malls.
Read the full article here.
Real estate markets have become just as interconnected as financial markets, so they can be equally vulnerable to volatile swings in global fortunes, argues Michael Goldberg, dean emeritus at the Sauder School of Business at the University of B.C.
"Local housing markets are certainly very open to invasions of capital from abroad, and these can be disruptive," Goldberg said in an interview.
"When money flows in, people say, `Great, we`re on the world map, isn`t that terrific?`"
However, just as easily as it flows in, Goldberg noted that capital can flow out "as somebody finds the next hot place where you simply have to have a condo in the global marketplace."
Goldberg made his point to The Sun Tuesday ahead of a roundtable discussion on globalism and real estate hosted by the Sauder school`s centre for urban economics and real estate at the Fairmont Pacific Rim hotel.
Discussion was guided by the fact that capital for all real estate is now global, whether it is the bulk pre-sales of Vancouver condos overseas or Canadian pension funds buying Brazilian shopping malls.
Read the full article here.
- Joined
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Pay Yourself first
You might have heard that expression when learning about how to manage money. The experts say that you have to give yourself your allotment of money before you pay any bills, etc, that it`s the secret to figuring out your finances. I`m using it in a similar way, but in our case, I`m talking about time and efforts.
I spoke with Arianna Huffington the other day in New York City, and she was talking about how she`s working on getting more sleep. She used to be one of those who ran herself ragged and nearly bragged about it, because that`s what it takes to show that you`re dedicated and determined. A recent interview with Mike Arrington in Inc magazine said the same thing, that he used to really burn the candle at both ends, but that he`s backed off from that stance and is doing more to take care of himself. Well, count me in that same group.
Over the last few months, I`ve experimented with getting more sleep. I started going down to rest at the same time I put my kids down (around 8:30PM ET), and then I`d get up with them (around 6:30AM). That has worked out rather well. Sure, I don`t get to squeeze in a few extra things each day the way I used to, but I am also far more rested and far more ready to take on the world when I wake up. That`s just one way that I`m paying myself first, by sleeping an appropriate amount of hours.
Read the full article here.
You might have heard that expression when learning about how to manage money. The experts say that you have to give yourself your allotment of money before you pay any bills, etc, that it`s the secret to figuring out your finances. I`m using it in a similar way, but in our case, I`m talking about time and efforts.
I spoke with Arianna Huffington the other day in New York City, and she was talking about how she`s working on getting more sleep. She used to be one of those who ran herself ragged and nearly bragged about it, because that`s what it takes to show that you`re dedicated and determined. A recent interview with Mike Arrington in Inc magazine said the same thing, that he used to really burn the candle at both ends, but that he`s backed off from that stance and is doing more to take care of himself. Well, count me in that same group.
Over the last few months, I`ve experimented with getting more sleep. I started going down to rest at the same time I put my kids down (around 8:30PM ET), and then I`d get up with them (around 6:30AM). That has worked out rather well. Sure, I don`t get to squeeze in a few extra things each day the way I used to, but I am also far more rested and far more ready to take on the world when I wake up. That`s just one way that I`m paying myself first, by sleeping an appropriate amount of hours.
Read the full article here.
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- Mar 24, 2009
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The landlord blues
Mathieu Mazur-Goulet has three tenants living in the house he bought a year ago in an up-and-coming Ottawa neighbourhood, but he`s still waiting to break even. The 26-year-old government policy analyst bought the triplex for $257,000 and expected he`d pull in $2,700 each month to cover his fixed costs and return a modest profit.
But unexpected repair costs have made what he thought would be a great long-term investment a major drain on his personal savings. He bought the house thinking it was the perfect "passive" investment: He wanted to live in it after he started a family and planned to rent it out until then.
In a time of economic uncertainty, the idea of investing in property rather than mutual funds can be attractive, and figures indicate that more Canadians are getting into the landlord game. The Toronto Real Estate Board says the number of leased properties is on the rise; between May and August, 6,712 condominiums and townhouses were rented – an increase of 18 per cent from last year`s figures. "Many newly completed units are held by investors who have chosen to rent their units," the board says in its most recent newsletter.
Read the full article here.
Mathieu Mazur-Goulet has three tenants living in the house he bought a year ago in an up-and-coming Ottawa neighbourhood, but he`s still waiting to break even. The 26-year-old government policy analyst bought the triplex for $257,000 and expected he`d pull in $2,700 each month to cover his fixed costs and return a modest profit.
But unexpected repair costs have made what he thought would be a great long-term investment a major drain on his personal savings. He bought the house thinking it was the perfect "passive" investment: He wanted to live in it after he started a family and planned to rent it out until then.
In a time of economic uncertainty, the idea of investing in property rather than mutual funds can be attractive, and figures indicate that more Canadians are getting into the landlord game. The Toronto Real Estate Board says the number of leased properties is on the rise; between May and August, 6,712 condominiums and townhouses were rented – an increase of 18 per cent from last year`s figures. "Many newly completed units are held by investors who have chosen to rent their units," the board says in its most recent newsletter.
Read the full article here.
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Wealthy on paper, couple needs more real dollars
In Toronto, a couple we`ll call Rose, 55, and Edward, 59, are powering down their careers, hers in the airline industry, his in real estate sales. They are reducing their incomes in the expectation that they will be able to draw on their assets for many years to come. Trouble is, they are burning up those assets covering current losses.
Their assets are substantial: $650,000 invested in three rental housing properties plus their $500,000 home; $211,000 of non-registered stocks and $280,000 in RRSPs. Their liabilities are mortgage debts of $170,000, leaving net worth of $1,471,000.
In her retirement, which began this fall, Rose`s defined-benefit pension pays her $1,900 a month. That income will continue until a $573-a-month bridge ends at age 65 and her benefits drop to $1,327 a month. Edward generates variable income from real estate sales and consulting to bring total family income up to $7,300 a month, including money taken from cash flows at three rental properties.
However, the properties run at a loss. Rose and Edward wind up spending non-registered capital to pay the bills. Their non-registered money will be gone in a dozen years. The situation is unsustainable. "How can we be millionaires on paper and feel obliged to live so frugally?" Rose asks. "We have the assets, but we don`t have the cash flow. What should we do?"
Read the full article here.
In Toronto, a couple we`ll call Rose, 55, and Edward, 59, are powering down their careers, hers in the airline industry, his in real estate sales. They are reducing their incomes in the expectation that they will be able to draw on their assets for many years to come. Trouble is, they are burning up those assets covering current losses.
Their assets are substantial: $650,000 invested in three rental housing properties plus their $500,000 home; $211,000 of non-registered stocks and $280,000 in RRSPs. Their liabilities are mortgage debts of $170,000, leaving net worth of $1,471,000.
In her retirement, which began this fall, Rose`s defined-benefit pension pays her $1,900 a month. That income will continue until a $573-a-month bridge ends at age 65 and her benefits drop to $1,327 a month. Edward generates variable income from real estate sales and consulting to bring total family income up to $7,300 a month, including money taken from cash flows at three rental properties.
However, the properties run at a loss. Rose and Edward wind up spending non-registered capital to pay the bills. Their non-registered money will be gone in a dozen years. The situation is unsustainable. "How can we be millionaires on paper and feel obliged to live so frugally?" Rose asks. "We have the assets, but we don`t have the cash flow. What should we do?"
Read the full article here.
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- Mar 24, 2009
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A case of mistaken identity
One of my all-time favourite court cases deals with the Edmonton family who were well into building their dream home when they discovered that they didn`t own the lot where their new house was under construction.
The story began back in 1981, when Tom Broumas told his real estate agent, Al Batik, that he wanted to buy a lot to build a new house for his family.
Batik checked the listings on the local multiple listing service and decided to show Broumas and his wife lot 37 which was incorrectly described as the "only vacant lot on south side of street."
On the day Broumas physically inspected the lot, his agent directed him to lot 27 on 10th Ave. instead of lot 37. The two lots were separated by nine completed houses. Lot 27 was owned by the city of Edmonton and lot 37 by private owners.
Without ever being shown a survey or the subdivision plan by the agent, Broumas eventually signed an agreement to buy lot 37 and the deal closed successfully. Unfortunately, he was under the impression that he had purchased lot 27.
About a year later, Broumas hired an architect who designed a 3,700-square-foot house.
Read the full article here.
One of my all-time favourite court cases deals with the Edmonton family who were well into building their dream home when they discovered that they didn`t own the lot where their new house was under construction.
The story began back in 1981, when Tom Broumas told his real estate agent, Al Batik, that he wanted to buy a lot to build a new house for his family.
Batik checked the listings on the local multiple listing service and decided to show Broumas and his wife lot 37 which was incorrectly described as the "only vacant lot on south side of street."
On the day Broumas physically inspected the lot, his agent directed him to lot 27 on 10th Ave. instead of lot 37. The two lots were separated by nine completed houses. Lot 27 was owned by the city of Edmonton and lot 37 by private owners.
Without ever being shown a survey or the subdivision plan by the agent, Broumas eventually signed an agreement to buy lot 37 and the deal closed successfully. Unfortunately, he was under the impression that he had purchased lot 27.
About a year later, Broumas hired an architect who designed a 3,700-square-foot house.
Read the full article here.