First Time Home Buyer Reality Check - Affordability

As I mentioned in my September Net Worth Udpate, I am planning to start my property hunt for the first time. So, first question comes into my mind is, "what can I afford"?

There are two types of costs in buying a home -- the initial down payment and the ongoing monthly mortgage payments. The largest one-time cost is the down payment.

When purchasing a home, there are also many one time costs and monthly expenses that I will need to budget for in addition to the expenses that I have while renting.

One-time Expenses:

Property inspection (optional), due at time of inspection
Legal fees, due at the time of closing
Legal disbursements, due at the time of closing
Property survey (sometimes provided by seller), due at the time of closing
Mortgage interest adjustment (if applicable), due at the time of closing
Home and property insurance, at closing and ongoing
Moving expenses, due on the date of move

Monthly Expenses:

Mortgage payments
Maintenance/Condominium fees
Property and content insurance
Property taxes
Utilities

Canada Auto Sales for September 2009

Here is the new auto sales statistics in Canada for September, 2009 compared to same period last year.

Acura: -45% to 1,127
Audi: +17.1% to 1,111
BMW: +50.1% to 2,402
Chrysler: -7.1% to 15,804
Ford: +24.4% to 16,140
General Motors: -23.4% to 23,568
Honda: -12.2% to 11,272
Hyundai: +30.8% to 9,282
Infiniti: -14.3% to 639
Jaguar: -24.4% to 62
Kia: +19.7% to 4,515
Land Rover: -8.2% to 179
Lexus: +11.3% to 1,504
Mazda: -3.6% to 6,520
Mercedes-Benz: +24.9% to 2,248
Mini: -16.9% to 340
Mitsubishi: +18.5% to 1,735
Nissan: -0.9% to 6,594
Porsche: +14% to 114
Saab: -48.2% to 59
smart: +3.7% to 312
Subaru: +68.4% to 2,544
Suzuki: +3.6% to 1,351
Toyota: -11.1% to 16,065
Volkswagen: -4.2% to 3,508
Volvo: -6.4% to 508

September 2009 Net Worth Update

I had to suffer a loss from trading RIM which were plunging more than 13% ahead of Friday's opening bell after the company's most recent quarterly report and forecast raised fears of slow growth on Sept. 24.

As the housing market is slowly finding its footing in the slow recovering economy, I am getting my mortgage pre-approved right now to be ready for the bargain hunting. If I can find a bargain - the property's listed price is less than 90% of the city assessed price - during this winter (usually it's the slow season), then I might be a new home owner in near future.

Here are the assets/liabilities result for September, 2009:

Assets

Vehicles: $26,000

Cash: $8,900

Savings: $14,400

TFSA: $5,100

Registered Investment Account: $24,100

Non-Registered Investment Account: $6,100

Total Assets: $84,500

Debts

Credit Card Debt: $$1,700

Total Debts: $1,700

Total Net Worth: $82,800

Started 2009 with Net Worth: $65300

Year-to-Date Gain/Loss: +26.80%

My net worth goal at the end of year 2009 is $90,000, and I still have $7,200 to make in the next 3 months.

The surprising truth about what's really in Canadians' wallets

Those who want to know how they financially stack up against others should check out MoneySense magazine's All-Canadian Wealth Test.

Despite a growing chorus of voices that say the recession is over, many Canadians are feeling downright poor these days. But MoneySense magazine's All-Canadian Wealth Test reveals that many of us are actually a lot better off than we think.

Available on newsstands across the country starting today, the Wealth Test lets Canadians determine how they stack up against other Canadians on all the key indicators of household prosperity. MoneySense research reveals whether we're earning more or less than our peers, if we're wealthier or poorer than others, and if our track record in the stock market is better or worse than most investors. Canadians can also visit MoneySense.ca where they can calculate their own net worth and compare it to people like themselves.

The good and bad news on how we stack up:

• The good news - yes, good news - is that the average household is better off today than it was nine years ago at the peak of the dot-com boom. In fact, we're 7 per cent richer in real terms in grim 2009 than we were in bubbly 2000.
  
• But there are warning signs. While the rich are getting richer, it's not clear that middle- and working-class Canadians are any wealthier.
  
• Another problem? The way we're getting rich. Rather than make moneyon the stock market or accumulate savings in the bank, a significant portion of our wealth is tied up in the rising value of our homes. Real estate now makes up an unprecedented share of our personal balance sheets. That may be fine now. But if house prices crash, look out below.
  

The All-Canadian Wealth Test also reveals that:

• The average unattached Canadian has an annual income of $37,800. The average family earns $91,500.
• The path to higher income starts with being a guy. Women make, on average, about two-thirds of what men do.
• The richest 20 per cent of Canadian households control about 69 per cent of the wealth in Canada. Meanwhile, the poorest 20 per cent controls no wealth at all. It's actually in debt.

Source: MoneySense

59% of Canadians live payday to payday

Nearly 60 per cent of Canadians would have trouble paying the bills if their paycheque were delayed by one week, a nationwide survey suggests.

The Canadian Payroll Association survey released Monday found that not only were 59 per cent of respondents living paycheque to paycheque, but they had little ability to put money away for their retirement.

"We were shocked by that number," CPA chairman Janice MacLellan said. "So many Canadians are now living so close to the line that if they miss a single paycheque, the majority will find themselves in financial difficulty."

Financial experts recommend that people should have emergency funds to cover about three months of expenses, such as rent, mortgage, utilities, other bill payments and groceries.

Of those surveyed, the younger workforce said they felt the greatest pinch. Forty-five per cent of people aged 18 to 34 said it would be difficult or very difficult to make ends meet if a paycheque were delayed, with a further 21 per cent saying it would be somewhat difficult.

Single parents were in the most precarious situation, with 72 per cent saying they would have some trouble making ends meet.

The survey also found that 50 per cent of workers couldn't save more than five per cent of their net pay for retirement — half the amount financial experts generally recommend.

About one-third of respondents said they've been trying to save more money than a year ago because of the economic uncertainty, but have been unable to do so. Another 42 per cent said they weren't trying to save more.

When it comes to remuneration, 65 per cent of employees said higher wages were most important to them, while 25 per cent cited better health benefits and 10 per cent preferred education funding.

Asked what they would do with a $1 million lottery win, 70 per cent of people said their top priority would be to pay off debt, while 35 per cent would put as much as possible toward retirement.

Surprisingly, not many people would have a celebration. Just three per cent of Canadians said they would use some of their winnings to throw a party, with Quebecers — at seven per cent — a bit more likely to do so.

And if you're a relative of a lottery winner, don't count too heavily on getting a share. Just 26 per cent of Canadians said they would give some of their winnings to family members.

The CPA survey involved more than 2,800 employees across Canada. The results are considered to have a margin of error of 2.3 per cent, 19 times out of 20.

Source: CBC News

6 Simple Tips to Save Water Usage for Our Home

While access to clean water is not an issue for most of us, it makes sense to be more water conscious for the following reasons:

• Lower water and energy bills by reducing your metered usage.
• Enhanced drinking water quality by maintaining higher levels in our lakes.
• Less environmental impact by deferring the need to supply water from new sources and by reducing the energy and materials required to treat and deliver water.

We all can take immediate steps starting in our own households to more efficiently use water so there is enough to go around.

Be water conscious
Just like you think about saving energy by turning off your lights, switching off the power strip and charging your phone with your solar charger, you should be just as conscious about conserving water. Turn off the water while brushing your teeth or shaving, use less water when hand washing dishes, don’t use hot water to defrost food, and take shorter showers. We all know these things and mean to do them, but sometimes we forget. Program these simple changes into your daily routine and be conscious about water use.

Fix leaks
A dripping tap sends your money down the drain. If your tap is leaking one drop per second, you are wasting over 9,460 litres of water per year. You can fix this problem by replacing a simple washer. Even if you have to change the entire tap, it’ll cost less than what you’re wasting. Also, check your toilet, it might be leaking too even if you don’t hear it. You can check for a leak in your toilet by adding a few drops of food colouring to the tank. If within half an hour the coloured water has disappeared from the bowl, you’ll know you’ve got a leak.

Use low water flow fixtures
Low flow showerheads and faucet aerators save up to half of water used without compromising your shower quality and washing experience. Also, take the opportunity to install a low-flow toilet and save even more money! Since 30% of the water consumption in your home is from toilet use; the older the toilet, the greater the use. Old toilets use at least 16-20 litres per flush. However, more recent models use about six litres or, if you install an ultra low-flow head, your toilet will use as little as three litres of water per flush—a big difference for huge savings!

Wash full loads
Use your appliances efficiently by washing only full loads of dishes or clothes. Wait the extra meal to have enough dishes or another day until you have enough clothes to make running that appliance worth it. While some appliances have settings for smaller loads, most do not, and use just as much water to wash a few things as it does to wash a full load.

Replace old appliances
Energy Star rated appliances save you energy, water, and money! Energy Star rated washers use half the water and energy per load of older models. If you’re looking for a new washing machine, frontload washing systems have a much larger capacity and save a lot of water and energy. Also, take the time to look at investing in a dishwasher. This might surprise many but washing your dishes by hand in your sink uses more water than running an Energy Star rated dishwasher. Hand washing your dishes twice daily uses about 70 litres of water while a dishwasher, filled to the maximum, uses only 30 litres.

Saving water saves you money
From leaky taps and running toilets to watering your lawn, there are many things around your house that drain your money if you are not aware of them. You can be green and save water and money by following the above steps—use less and you’ll save more!

SWOT Analysis - Canadian Natural Resources (CNQ)

Canadian Natural Resources (CNR) is a significant producer of natural gas in Canada, representing approximately 10% of western Canadian output. Its undeveloped land base represents the second largest portfolio in the Western Canadian Sedimentary Basin (WCSB) and it also has an exposure to virtually every play type found in the basin. Strong market position allows the company to take advantage of economies of the scale and reduce risk. However, increased cost pressures and environmental regulations may adversely impact the company’s future net earnings, cash flow, and capital projects.

Strengths

Leadership position in Canada - The company’s production is concentrated in five North American core regions: Northeast British Columbia, Northwest Alberta, the Foothills, the Northern Plains, and the Southern Plains. In addition, the company holds extensive leases in the Athabasca region that are estimated to contain approximately 16 billion barrels of original bitumen in place. It also dominates the infrastructure in its core areas allowing it to control its cost. Moreover, natural gas remains its largest single product offering, representing 45% of its production mix in 2008. Strong market position allows the company to take advantage of economies of the scale and reduce risk.

Strong oil reserves - The company has strong oil reserves. CNR’s crude oil and NGLs proved reserves, before royalties increased from 1,123 million barrels (mmbbl) in FY2004 to 1,543 mmbbl in FY 2007, at a CAGR of 11%. Further, the crude oil and NGLs proved reserves, after royalties, also increased from 1,066 mmbbl in FY2004 to 1,358 mmbbl in FY2007. The company’s strong oil reserves give it a significant competitive advantage, especially when a large proportion of global oil fields are reaching maturity.

Strategic land base - CNR has the second largest undeveloped land inventory in the WCSB, with undeveloped net acreage in excess of 12 million acres, excluding leases at the Horizon Project. The strength of the company’s land base is a result of continued land purchases, and strategic acquisitions including the incorporation of the ACC properties that were acquired in late 2006. The vast majority of the company’s land base is positioned to utilize existing owned and operated infrastructure and also strategically positions CNR. Further, it also maximizes the benefit of new play types developed by the company and industry. This strong concentrated land base affords significant opportunities to control operating costs, along with minimizing finding and on-stream costs.

Weaknesses

Poor performance of North Sea geographic segment - The revenues and the crude oil production from CNR’s North Sea geographic segment have been witnessing a decline over the years. The revenues from North Sea declined from C$1,656 million (approximately $1,490.4 million) in FY2005 to C$1,594 million (approximately $1,434.6 million) in FY2007, at a CAGR of 1.9%. Further, crude oil production before royalties from North Sea declined from 68,593 barrels per day (bbl/d) in FY2005 to 55,933 bbl/d in FY2007, at a CAGR of 9.7%. The decline in production was due to lower than anticipated production from the Lyell Field development and water injection problems experienced during the year at the Ninian Field.

Declining natural gas reserves - The company has witnessed a significant decline in its natural gas reserves in 2008 compared with FY2006. Natural gas remains its largest single product offering, representing 45% of its production mix in 2008. The natural gas reserves, before royalties, declined from 4,613 billion cubic feet (Bcf) in FY2006 to 4,435 Bcf in 2008, representing a decline of 3.9%. Further, its natural gas reserves, after royalties, declined from 3,798 Bcf in FY2006 to 3,666 Bcf in 2008, representing a decline of 3.5%.

Opportunities

Rising demand for oil and natural gas - The strong economic growth in the developing countries will drive global oil and natural gas demand. The overall global energy demand is expected to grow about 1.6% annually to 2030. With the growing transportation sector, the demand for liquid fuels is expected to rise at a rate of 1.4% per year. Driven by increasing demand for electricity, natural gas demand is expected to increase by 1.7% annually to 2030. The projected increase in demand for liquid fuels and natural gas in the coming years would help the company boost its sales and strengthen its financial base.

Horizon Oil Sands Project - The Horizon Oil Sands Project is located 70 kilometres north of Fort McMurray, where CNR owns and operates leases covering 115,000 acres through lease arrangements with the Province of Alberta.The Horizon Project includes a surface oil sands mining and bitumen extraction plant coupled with on-site bitumen upgrading and associated infrastructure to produce synthetic crude oil. Drilling on these leases indicates an estimated 16 billion barrels of bitumen in place, with approximately 6-8 billion recoverable barrels under existing mining technologies. The Horizon Project asset is substantial and is anticipated to provide significant free cash flow in the future to CNR.

Threats

Environmental regulations - CNR’s businesses are subject to numerous laws and regulations relating to the protection of the environment.The company’s associated risk management strategies focus on working with legislators and regulators to ensure that any new or revised regulations reflect a balanced approach to sustainable development. Further, specific measures in response to existing or new legislation include focus on the company’s energy efficiency, air emissions management, released water quality, reduced fresh water use, and minimization of the impact on the landscape.

Increasing cost pressures - Strong commodity prices in recent years have resulted in increased demand and costs for oilfield services. This has lead to inflationary production and capital cost pressures throughout the North American oil and gas industry, particularly related to natural gas drilling activity and oil sands developments. The strong commodity price environment has also impacted costs in international basins. Specifically, the high demand for offshore drilling rigs continues and securing rigs on commercially acceptable terms is an ongoing challenge.

Adverse weather conditions - Adverse weather conditions could pose a substantial threat to the company both in terms of curtailed activity and its potential effect on natural gas prices. Warmer than normal weather can impact the demand for natural gas, resulting in lower realized price for the company.

The Best Growth Investing Information Ever

This video contains all the fundamental information you need for growth investing during the next few years.

10 Ways to Cut Your Moving Costs

Moving can be a very chaotic and expensive task, one that needs to be accomplished very carefully. A move carried out in haste can bring about several unnecessary problems. Almost everyone looks for cheap movers. After all, most of us want to save on out of pocket expenses but there are several disadvantages of selecting cheap movers. There are professional moving companies, who offer competitive rates that are easily affordable by everyone. However, there are certain techniques or methods of preparation that can also help you minimize your expenses.

When planning your moving budget, it is very important to keep a check on the outflow of cash. This will make you better prepared to understand the unnecessary expenses. Create a budget template in Excel or Microsoft Word—this will make your calculations easier.

Decide if you will hire a professional moving company or you will do it yourself. If you are hiring a mover, collect quotes from at least three different professional moving companies and include the highest quote in your budget.

Check all the items that you are moving. This will help you evaluate if you need more insurance because the default insurance offered by movers might not be sufficient for you. Along with added insurance, find out if you require extra services.

Because of rising fuel costs and a shortage of drivers, the cost of a full service mover has risen in the past few years. Anything you can do yourself—even if seemingly small—will help cut your moving bill and give you extra money to spend on other relocation costs (like the pizza and beer for after your move).


1. Reduce your load. Get rid of household items that you no longer need. Hold a garage sale and leave books with friends, the local library or sell them to a used bookstore. Anything you can't sell, give to a local charity. Weight equals money. The less weight, the less money. It's that simple.

2. Pack it yourself. Packing services performed by the mover are expensive and could amount to 25% of the moving cost. Even if you don't want to pack it all yourself, you can always do a partial pack, and have the movers handle the rest. For example, items that are nonbreakable such as linens and bedding can be packed easily without the risk of damage. Every box you pack yourself is money in your pocket.

3. Save on packing. Luggage and carrying bags are perfect for packing sheets, towels and clothing. Also, the bottoms of wardrobe boxes are great for bulky, lightweight items. Be wary of packing tips that might save you money initially but won't protect your stuff, for example, using newspaper instead of bubble wrap. Sure, it might save a few bucks, but in the end, is breaking something worth it?

4. Drive your own moving truck
Using a full service moving company is extremely expensive. You can rent your own truck and hire movers to help load up and unload.

5. Recruit help from friends or family
If you have friends or family in the area, getting them to help you load up and/or unload is a blessing, because it saves time and money. If you’re going to recruit help, make it a fun event. Order some food, and make it a moving party.

6. Avoid the busy season. If you are using a full service moving company, avoid June, July, and August as these are the most expensive months to move because of demand for moving services. Also, try to plan your move during the middle of the month—rates are higher at the beginning and the end because of the large number of apartment leases with month-end dates. If you can be flexible with your move-in times, you can also save money because the moving company can combine shipments.

7. Get organized. Time is Money. Color-code boxes according to the room they belong in so they all end up in the same place, saving time for both you and your mover.

8. Avoid storage costs by moving into your new property immediately and make sure that you have payment ready for when the truck arrives. Any delay could result in storage-in-transit fees if your things have to be stored until they can be unloaded and after the move is paid in full.

9. Make sure you are insured. Your existing homeowner’s insurance policy might cover your move so you don't have to buy additional moving protection.

10. Your move may be tax-deductible. Keep all receipts and visit the Canada Revenue Agency's website for specific details about which moving expenses you can claim, or consult a professional accountant to maximize your tax return.

Canada Auto Sales for August 2009

Here is the new auto sales statistics in Canada for August, 2009 compared to same period last year.

Acura: +26.4% to 1,644
Audi: +89.6% to 1,058
BMW: +20.5% to 2,292
Chrysler: -6.8% to 14,393
Ford: +7% to 22,166
General Motors: -27.5% to 23,018
Honda: -21.8% to 10,574
Hyundai: +38.4% to 10,418
Infiniti: -13.6% to 604
Jaguar: -18.1% to 68
Kia: +20.6% to 4,672
Land Rover: -27.2% to 134
Lexus: +31.3% to 1,532
Mazda: -10.7% to 6,880
Mercedes-Benz: +20.5% to 1,992
Mini: -9.5% to 457
Mitsubishi: +24.9% to 1,860
Nissan: +4.2% to 7,071
Porsche: +7.1% to 120
Saab: -79.8% to 36
smart: -30.4% to 268
Subaru: +4.2% to 1,940
Suzuki: +1.3% to 1,315
Toyota: -24.2% to 16,707
Volkswagen: -5% to 3,605
Volvo: +16.3% to 527

August 2009 Net Worth Update

After I sold my car, I bought a new car using some money from my saving account and non-registered investment account. I am not a new car buyer in general, but I bought it for the following reasons,

1. Safety - As Canadian's winter could take as long as 6 months, this is my primary reason to sell my old car earlier this year, and get all-wheel-drive (AWD) vehicle for safety purposes.

2. Cash Purchase Promotion - almost 10% cash back + another 10% off the original price. This justifies a bit new car depreciation cost.

3. Re-sale value - after some research, I found that Japanese AWD vehicles could hold their resale value the most.

Here are the assets/liabilities result for August, 2009:

Assets

Vehicles: $26,000

Cash: $6,000

Savings: $14,400

TFSA: $5,100

Registered Investment Account: $23,200

Non-Registered Investment Account: $8,400

Total Assets: $8,3100

Debts

Credit Card Debt: $1,600

Total Debts: $1,600

Total Net Worth: $81,500

Started 2009 with Net Worth: $65300

Year-to-Date Gain/Loss: +24.81%

My net worth goal at the end of year 2009 is $90,000, and I still have $8,500 to make in the next 4 months.

SWOT Analysis - Barrick Gold

Barrick Gold Corporation (Barrick) is one of the largest gold mining companies globally, having 27 operating mines and five development projects in Canada, the US, Australia, Chile, Peru, Argentina, and Tanzania. The company's strong project pipeline ensures a steady revenue growth and has boosted investor confidence. However, changes in local and national government legislations, taxations, controls, regulations, and political or economic developments across key countries may affect the company's business prospects.

Strengths

Strong market position - Barrick is the only company in the gold mining industry that possesses an ”A” rating balance sheet. The company has the largest reserves in the industry, with 124.6 million ounces of proven and probable gold reserves, 6.2 billion pounds of copper reserves, and 1.03 billion ounces of contained silver within gold reserves as atDecember 31, 2007.

Strong project pipeline - Barrick has been progressing a new generation of projects that advanced significantly in 2008: Buzwagi in Tanzania, Cortez Hills in Nevada; Pueblo Viejo in the Dominican Republic; Pascua-Lama, Chile/Argentina; Buzwagi, Tanzania; Donlin Creek, Alaska, the US; Reko Diq, Pakistan; Sedibelo, South Africa; Federova, Russia; and Kabanga, Tanzania. A strong project pipeline ensures a steady revenue growth and has boosted investor confidence.

Emphasis on exploration - Even at times when gold prices are low, the company was conscious of not diluting the emphasis on exploration. Barrick has a motivated, discovery focused team of over 150 geo-scientists exploring approximately 100 properties in 16 countries around the world. Reserve development and replacement of production is a major priority at all sites. The company consistently funds its exploration programs throughout all gold cycles, and has a proven track record of finding ounces at both greenfield and brownfield projects.

Weaknesses

Contingencies, claims, and litigations - The company has a number of lawsuits pending against it. In June 2003, Barrick's shareholders filed a complaint in the New York district court alleging that Barrick had violated the US security laws by providing misleading and false statements about its earnings and operating results in 2002. In September 2004, Dr. Gregg McKenzie filed a putative class action complaint against Barrick and JP Morgan in the Louisiana district court. This complaint alleged that the company violated the Commodity Exchange Act and US antitrust laws and sought damages and an injunction to terminate certain trading agreements Barrick entered into with J.P. Morgan. Another similar complaint was filed against Barrick during December 2004. In September 2004, a complaint was filed in the New Mexico district court against two of Barrick’s subsidiaries, Homestake and Home-stake California. The plaintiffs sought damages, alleging that they had been exposed to radioactive and other hazardous substances.

Decreasing production levels in old mines - The old mines of Barrick’s are facing decreasing production levels. Production is declining primarily as a result of lower-grade ore processed at Eskay Creek, Goldstrike Open Pit, and Pierina and the depletion of reserves at Holt-McDermott. Declining production levels in matured mines generate lower grade ores, thereby affecting production and ultimately reducing the revenue generated by the company.

Opportunities

New development projects - The company has entered into a joint venture with Xstrata for the Kabanga nickel sulphide project in Tanzania making it similar in size and grade to the world-class Voisey’s Bay mine in Labrador. Further, Barrick and NovaGold formed a limited liability company, jointly owned by Barrick and NovaGold on a 50/50 basis, which will oversee development of the Donlin Creek project in Alaska. These new development projects would add to Barrick’s resource reserves and enable the company to generate incremental revenues

Explorations in Russia and Central Asia - Barrick is exploring properties in Russia and Central Asia. Barrick's programs are complemented by strategic relationships with Celtic Resources and Highland Gold, which helped in developing assets in Russia and Central Asia. Barrick has an equity position in Celtic Resources and also has back-in rights for up to 50% in any assets purchased in Kazakhstan and also on certain other assets Acquisitions of Cortez property in the Nezhdaninskoye project. Barrick's investment in Highland Gold enables it to participate on an
exclusive basis for up to 50% on any purchase made by Highland Gold in Russia. These relationships would help Barrick to familiarize itself with the Russian and Asian regions and
to refine its development options in these prospective regions.

Threats

International political and economic issues - Changes in local and national government legislations, taxations, controls, regulations, and political or economic developments across key countries may affect the company's business prospects.The Pascua-Lama project straddles the border between Chile and Argentina, with some of the operations to be built on the Chile side, and other parts of the project on the Argentinean side. This can throw up cross-border issues, including permits and taxes. Furthermore, if recent history is any indication, obtaining permits to develop a large-scale gold mine in Argentina will not be an easy task. International political and economic issues could, therefore, be a hindrance in the smooth functioning of the company’s various operations.

Inherent risk in the mining operations - Barrick is subject to all the inherent risks associated with the gold exploration and mining business, which include critical issues like industrial accidents, environmental hazards, unusual and unexpected formations, cave-ins, flooding and pressures, and also the risk of inadequate insurance, or an inability to obtain insurance. These apart, there are also risks of obtaining necessary permits and licenses, decreasing grades or quantities of reserves, and changes in the credit rating, all of which can hinder the business operations.

Environmental laws and regulations - Barrick’s ongoing mining operations and exploration activities are subject to extensive laws and regulations governing exploration, development, production, occupational health, mine safety, toxic substances, waste disposal, protection and remediation of the environment, protection of endangered and protected species, and other related matters. Compliance with these laws and regulations imposes substantial costs and it is expected that these costs would continue to increase in the future because of increased demand for remediation services and shortages of equipment, supplies, labor, and other factors.

Six Things You Should Avoid Before Buying a Home

Buying a home is not an impulse buy. In most cases you will have a few months notice before you actually go through with the sale. Planning ahead is crucial particularly if you don't have extensive financial resources. Since mortgage lenders will be sizing up your finances carefully, don't give them any reason to reject your application.

You never know what effect today’s actions will have on your mortgage application in three or even six months. Even something as simple as transferring money from your savings to your chequing account can negatively impact the mortgage process. So here are some suggestions of things you should avoid before buying a home:

1. Do not make any major purchases
Don't invest in any major purchases. Cars, weddings, jewellery, furniture and electronics can all wait until you're settled in your new home. When you make a major purchase, you limit the amount of money available for your down payment, and decrease the amount of liquid capital in your name.

If you do have to make a major purchase before buying a home, you might want to put it on a low-interest credit card until after your mortgage application is approved. Sometimes you can't control what life throws your way, but think carefully about your options before making a decision.

2. Don’t move money around
When a lender reviews your loan application for approval, one of the things they are concerned about is the source of funds for your down payment and closing costs. To do so, they will request statements from all of your accounts that contain liquid assets.

Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document and measure your finances. So leave your money where it is until after closing.

3. Do not make large investments
It is also not recommended to make investments just before buying a home; again, you're decreasing the liquidity of your assets. If you've come across a new stock in which you'd like to invest or if it's a great time to buy bonds, wait until after you've settled the finances on your home.

Furthermore, you'll have to disclose all of your finances before buying a new home, which means accounting for every withdrawal and deposit in all of your accounts. This can get quite tedious, especially if you're trying to dig up cancelled cheques for the new home theatre or HDTV you just had to have three months ago.

4. Do not change your bank
Changing banks is always a hectic ordeal, so don't do it before buying a home. You'll have to provide information about previous accounts that are now closed, and therefore inaccessible. And if you diversify your money too much in money market accounts, savings accounts, chequing accounts and other places, you'll have a harder time with the disclosure process.

If you're frustrated with your bank and want to change, tough it out a little longer and switch after your mortgage is approved and you've set up shop in your new home. This will save you hours of headaches and frustration.

5. Do not apply for a new credit card or line of credit
Even though the inquiry won’t hurt your credit too badly if you already have a good credit score, the additional credit card will cause the lender to question your financial stability for buying a home.

6. Do not change your job unless absolutely necessary
Try not to change jobs. Your employment is a key factor in the mortgage approval process, and if you can't show steady employment, you might be denied. Of course, you can't help matters if you've just been laid off or an opportunity presents itself that you can't pass up.

This could become more difficult if you become self employed. In most cases, lenders want to see at least two years of self-employment before they will approve you for a loan. So if you can, wait until after buying a home to become self-employed. For part-time workers, changing jobs creates unpredictability in the number of hours you will work so the lender cannot determine your gross income to qualify you for a loan.

If you're going to change jobs before buying a home, wait another six months before going ahead with the real estate transaction. This gives you an opportunity to establish employment and to show a steady income from a single employer. This looks much better on a loan application than a long list of recent employers.

As mentioned above, there will be times when you can't avoid all of these things before buying a home, but know that it's in your best interests to wait until the dust settles. The goal should be to move into your new house with as few obstacles as possible.

Canada Auto Sales for July 2009

Here is the new auto sales statistics in Canada for July, 2009.

Acura: +7% to 1,644
Audi: +40% to 822
BMW: +12.1% to 2,398
Chrysler: -10.4% to 15,958
Ford: +47.4% to 26,788
General Motors: -41.9% to 19,663
Honda: -22% to 11,340
Hyundai: +37.8% to 10,488
Infiniti: -1.5% to 702
Jaguar: -3.2% to 90
Kia: +29.6% to 5,110
Land Rover: -24.6% to 129
Lexus: +13.9% to 1,512
Mazda: -18.5% to 6,491
Mercedes-Benz: +9.5% to 1,978
Mini: -11.8% to 442
Mitsubishi: +18.7% to 1,901
Nissan: -3.2% to 6,832
Porsche: +37% to 200
Saab: -85.8% to 38
smart: -42% to 290
Subaru: -3.2% to 1,763
Suzuki: -8.7% to 1,158
Toyota: -14.2% to 17,720
Volkswagen: +14.6% to 4,018
Volvo: +39.4% to 591

Sold My Car - Some Experience to Share

After posting my car on the AutoTrader.ca and buysell.com for sale on last Saturday, I was able to sell my car in just a couple of days. This usually means that it is priced too low compared to the market price, but I am very happy with the selling as I sold it for $1,000 less than the purchase price of $6,500 three years ago.

Because of the lower than market price, I've been getting well over 20 inquiries in the last two days. It's said that the pre-owned auto market is in much better shape than the new car market due to this recession, and this might also explain why there are so many people interested in getting my car in the last two days.

Here is some of my private car sale tips that might be helpful for people:

1. Know your own as well as market price of the car.

• Check the Canadian Black Book or Kelley Blue Book for the price of your car based on its condition.
• Check the prices of the similar cars, and price your car accordingly, because Black or Blue books only tell us the average prices.

2. A good picture of your car is important for online ads. If a car's picture looks bad online, a seller is going to lose at least 20% of potential buyers.

3. Clean your car throughly specially inside of the car. I spent about $15 on the upholstery cleaner and cleaning wipes at Walmart, and about 3 hours valumning and clearn up my car before I posted the ads on Saturday, and it paid off as most of the viewers praised the cleaness of my car. Of course, I also took it for a wash as well for the appreance.

4. Make sure putting "sold as is" on the bill of sale so that you will not be hold for liability later on.

Safety vs. Fuel Economy

I am big money saver when it comes to cars, but I am concerning how much money that people can save compared their life safety.

Let's admit it that accident happens, and sometimes it's not you being a bad drive, but it cannot be prevented from others running into your car. The recent study done by the Insurance Institute for Highway Safety has shown that the 2007 death rate for minicars was substantially higher than those for larger cars – from nearly twice as high to more than three times greater, depending on the type of crack-up.

As their test results, minicars – small, fuel efficient and thus by definition relatively “green” -- did poorly in car-to-car frontal crash tests with midsize sedans at 56 km/hour. No surprise here. This is all about the laws of physics. When an object of greater mass meets an object of lesser mass, the smaller one loses. In fact, the Toyota Yaris, Honda Fit and Smart fortwo all collapsed into the space around where a driver would be. In this test the driver wasn't breathing; crash test dummies don't do that. But a real person would not have fared well in such a mash-up. Head and leg injuries would likely have resulted even though air bags deployed in all three cars.

Unless everyone else is going to drive sub-compact cars like Yaris, Fit, Versa, Smart, Aveo, Rio, and Accent., I will personally avoid those car for my own safety. After all, I am the MOST important part of the car while I am driving.

Weekly Trading Update - April 17, 2009

Positions From last week,

S&P 500 Bull Plus ETF, HSU: 2200 shares at total cost of $12,681.95

Transactions this week,

S&P 500 Bull Plus ETF, HSU
Apr 13, Sell, 2200 shares @ $6.09 - $9.95 commission
Total Cost: $13,388.05
Realized Gain: $13,388.05 - $12,681.95 = $706.10 (5.57%)

Trading Gain/Loss from the last week: $706.10

Year-to-date Trading Profit: $2724.25

Canada Auto Sales for March 2009

Acura: -42% to 1,211
Audi: +25.4% to 979
BMW: +8% to 1,711
Chrysler: -26.6% to 15,846
Ford: -15.1% to 17,021
General Motors: -17.6% to 24,695
Honda: -20% to 11,359
Hyundai: +25.5% to 8,818
Infiniti: -29.8% to 581
Jaguar: -57.8% to 57
Kia: +12.6% to 3,555
Land Rover: -26.9% to 171
Lexus: +21% to 1,363
Mazda: -22% to 7,060
Mercedes-Benz: +26% to 2,181
Mini: +3.7% to 307
Mitsubishi: +8.9% to 1,983
Nissan: -6.5% to 7,024
Porsche: +9.6% to 172
Saab: +117.7% to 172
smart: -34.6%% to 212
Subaru: +14.6% to 1,878
Suzuki: -14.4% to 948
Toyota: -25.5% to 14,538
Volkswagen: -10.6% to 3,156
Volvo: +5.6% to 491

The sales numbers are compared with last year's numbers.

How to Avoid Defaulting on Your Mortgage Payments

The market conditions have changed quite dramatically over the past twelve months. As a result, some homeowners may stumble upon financial hardships that make it difficult for them to pay their mortgage payments. Once your mortgage loan defaults, the chance of foreclosure increases.

If you or your spouse has lost employment and no longer make as much money, and you see meeting your mortgage payment obligations is going to be problematic, the first step is to take a deep breath. There are literally millions of people that face the same problem. You are not a bad person, so leave any feelings of guilt at the door. You do not have time for them. Instead, you need to focus on your options.

Fortunately, there are ways to avoid default and keep your home, so read on for more information on how to avoid a mortgage default.

1- Get moving on a solution
Your first option is to find a way to make up the back payments and continue fighting to make your payment on time every month. Although not an attractive options, it is an option.

Explore options to decrease expenses and increase income, such as an additional job, selling possessions, and look to community resources for help. You may have to temporarily cut back on things like dining out, internet and cable.

If you have a basement or spare room you may consider renting it out. The extra income could be up to 50% of your mortgage payment. True, there is some inconvenience, but it is a small price to pay for the extra income. If you are uncertain about taking in an extra lodger, remember, you are able to choose who lives with you. Make sure you meet them before they enter. If a spare room is not immediately available; be creative, see whether there is another room you could cheaply convert.

2- Work with your lender
Contact your mortgage lender. Banks do not want to foreclosure on properties. The process is long and costly, and in the end, mortgage lenders lose money. Instead, they would rather work alongside borrowers that are slightly behind on payments, and come up with a practical solution.

Consider extending your mortgage term to reduce your monthly payments. The downside is that you will end up paying more in the long term. However, if it means you are able to continue meeting the minimum mortgage payments, it is worth doing.

Set up a repayment plan. If you are unable to pay your mortgage payment for one or more months, the lender may agree to a repayment plan. The mortgage lender adds additional money to each subsequent mortgage payment until the loan is up-to-date.

Your lender may also suggest an Interest Only Mortgage. This will also reduce your monthly mortgage payments, often quite substantially. However, again the disadvantage is that, in the long term, you will need to find an alternative investment plan to pay off your mortgage capital—might be good short term option.

3. Refinance your mortgage
This is perhaps the easiest and most effective method. If you happen to be on your bank’s existing standard rate, the chances are you will be able to find a much better deal.

4. Talk to a Financial Advisor
If the situation is becoming overwhelming and you are really in danger of defaulting, you may need to consider speaking to a financial consultant or accountant. This will arm you with expertise and resources with which to approach planning your financial future and make the most of your current circumstances.

5. Resell - Downsize
This option is probably the most drastic and only to be undertaken when the others have failed. If you are able to sell your house, you can temporarily rent somewhere cheaper or buy a cheaper house in a different location. The money saved can be used to pay off your mortgage. This option is not easy, due to the costs involved in moving, but it might be worth doing in the long term.

If you can see that things are going to get bad in relation to meeting your mortgage payment obligations, take a deep breath then face up to the problem. Take action now, procrastination will not help you.

Weekly Trading Update - April 3 & 10, 2009

I only made 3 transactions for the last two weeks, as one of my projects is coming alive, and had to work some extra hours to get it done.

Well, overall, going against the trend made me take a loss of $2700, and bring my trading profits down to a little over $2000 for this year.

Transactions this week,

S&P/TSX Capped Energy Bear Plus ETF, HED
Mar 30, Buy, 1000 shares @ $15.28 + $9.95 commission
Total Cost: $15,289.95

Apr 8, Sell, 1000 shares @ $12.60 - $9.95 commission
Total Cost: $12,590.05
Realized Loss: $12,590.05 - $15,289.95 = -2699.90 (-17.66%)

S&P 500 Bull Plus ETF, HSU
Apr 8, Buy, 2200 shares @ $5.76 + $9.95 commission
Total Cost: $12,681.95

Trading Gain/Loss from the last 2 weeks: -$2699.90

Year-to-date Trading Profit: $2018.15

March 2009 Net Worth Update (+6.05%)

I had about $4500 increase in assets for this month. Besides regular saving from my full-time job income, I had a big chunk of tax return from the government as well, which makes me almost forget about the loss of $1500 that I need to take in my RRSP account where I changed my short-long position ratio to be roughly even, because the market does seem to start turning in this month. Unlike my trading account, I usually keep my investment in RRSP for at least 3 months before I make any changes.

In general, I did pretty well in this month considering over 6% growth in the net worth from last month.

Here are the assets/liabilities result for the third month of 2009:

Assets

Vehicles: $6,500

Cash: $5,600

Savings: $27,200

TFSA: $5,000

Registered Investment Account: $19,100

Non-Registered Investment Account: $15,200

Total Assets: $78,600

Debts

Credit Card Debt: $1,500

Total Debts: $1,500

Total Net Worth: $77,100 (+6.05%)

Started 2009 with Net Worth: $65300

Year-to-Date Gain/Loss: +18.07%

My net worth goal at the end of year 2009 is $90,000, and I still have $12,900 to make in the next 3 quarters.

Weekly Trading Update - March 27, 2009

Even though the market is very overbought at the current level, but I don't dare trade against this bullish trend. Like the old saying mentioned that "The trend is your friend." . I am waiting for trend reversal confirmation when S&P 500 closes below its 50 EMA which holds at 797.48. Before that, I will go with the trend.

Transactions this week,

S&P/TSX Capped Financials Bull Plus ETF, HFU
Mar 23, Buy, 2000 shares @ $4.92 + $9.95 commission
Total Cost: $9,849.95

Mar 25, Sell, 2000 shares @ $5.13 - $9.95 commission
Total Cost: $10,250.05
Realized Loss: $10,250.05 - $9,849.95 = 400.10 (4.06%)

Trading Gain/Loss from this week: +$400.10

Year-to-date Trading Profit: $4718.05

Market Needs a Break

After this 13-calendar-day rally since March 10th, we might be able to see the reversal in the next few days.

In the short and intermediate term it’s still overbought even after some pullback on last Thursday and Friday. This situation won’t last for too long as the market usually don't remain in the overbought territory for longer than 2-weeks.

If the pullback happens, I am expecting it will at least hit somewhere around 745 points for support. However, I don't see S&P 500 will hit the March low, which means that we might have a higher low bullish signal for it.

Weekly Trading Update - March 20, 2009

Transactions this week,

S&P 500 Bull Plus ETF, HSU
Mar 17, Buy, 2000 shares @ $5.07 + $9.95 commission
Total Cost: $10,149.95

Mar 18, sell, 2000 shares @ $5.17 - $9.95 commission
Total Cost: $10,321.05
Realized Loss: $$10,321.05 - $10,149.95 = $171.10 (1.69%)

Trading Gain/Loss from this week: +$171.10

Year-to-date Trading Profit: $4317.95

Weekly Trading Update - March 13, 2009

Positions From last week,

Royal Bank of Canada, RY: 400 shares at total cost of $12057.95

Transactions this week,

Royal Bank of Canada, RY
Mar 11, Sell, 400 shares @ $33.89 - $9.95 commission
Total Cost: $$13,546.05
Realized Loss: $$13,546.05 - $12057.95 = 1488.10 (+12.34%)

Trading Gain/Loss from this week: +$1488.10

Year-to-date Trading Profit: $4146.85

Weekly Trading Update - March 6, 2009

Positions From last week,

S&P/TSX Capped Financials Bear Plus ETF, HFD: 200 shares at total cost of $8497.95

Transactions this week,

S&P 500 Bear Plus ETF, HSD
Mar 3, Buy, 120 shares @ $45.05 + $9.95 commission
Total Cost: $5415.95

Mar 4, Sell, 120 shares @ $44.86 - $9.95 commission
Total Cost: $5373.25
Realized Loss: $5373.25 - $5415.95 = -$42.7 (-0.79%)

S&P/TSX Capped Financials Bear Plus ETF
Mar 4, Sell, 200 shares @ $45.32 - $9.95 commission
Total Cost: $9054.05
Realized Gain: $9054.05 - $8497.95 = $556.1 (+6.54%)

Mar 5, Buy, 250 shares @ $50.04 + $9.95 commission
Total Cost: $12519.95

Mar 5, Sell, 250 shares @ $49.22 - $9.95 commission
Total Cost: $12295.05
Realized Loss: $12295.05 - $12519.95 = -$224.90 (-1.80%)

S&P/TSX Capped Energy Bull Plus ETF
Mar 4, Buy, 4000 shares @ $3.40 + $9.95 commission
Total Cost: $13609.95

Mar 4, Sell, 250 shares @ $49.22 - $9.95 commission
Total Cost: $13990.05
Realized Gain: $13990.05 - $13609.95 = $380.1 (+2.79%)

S&P 500 Bull Plus ETF, HSU
Mar 4, Buy, 3000 shares @ $4.43 + $9.95 commission
Total Cost: $13299.95

Mar 5, Sell, 3000 shares @ $4.05 - $9.95 commission
Total Cost: $12140.05
Realized Loss: $12140.05 - $13299.95 = -$1159.90 (-8.72%)

Royal Bank of Canada, RY
Mar 5, Buy, 400 shares @ $30.12 + $9.95 commission
Total Cost: $12057.95

Trading Gain/Loss from this week: -$491.30

Year-to-date Trading Profit: $2658.75

February 2009 Net Worth Update (+3.41%)

Here are the assets/liabilities result for the second month of 2009:

Assets

Vehicles: $6500

Cash: $5800

Savings: $22000

TFSA: $5000

Registered Investment Account: $20600

Non-Registered Investment Account: $14200

Total Assets: 74100

Debts

Credit Card Debt: $1400

Total Debts: $1400

Total Net Worth: $72700 (+3.41%)

Started 2009 with Net Worth: $65300

Year-to-Date Gain/Loss: +11.33%

My net worth goal at the end of year 2009 is $90,000, and $17300 to come in the next 10 months.

Weekly Trading Update - Feburary 27, 2009

I was planning to catch a bounce from the oversold position of S&P 500 in the beginning of the week, as most of the indicators show over-sold condition. as being said, I bought in HSU at $4.99 for 1000 shares, and sold it for $5.22 on Thursday as the selling pressure is too overwhelming.

I changed my view on Friday and bought in HFD at $42.44 for 200 shares, as there was breakdown for the consolidation area.

Here is the transactions for this week,

S&P 500 Bull Plus ETF, HSU
Feb 24, Buy, 1000 shares @ $4.99 + $9.95 commission
Total Cost: $4,999.95

Feb 26, sell, 1000 shares @ $5.22 - $9.95 commission
Total Cost: $5,210.05
Realized Loss: $5,210.05 - $4,999.95 = $210.10 (4.20%)

S&P/TSX Capped Financials Bear Plus ETF, HFD
Feb 27, Buy, 200 shares @ $42.44 + $9.95 commission
Total Cost: $8,497.95

Trading Gain/Loss from this week: $210.10

Year-to-date Trading Profit: $3150.05

Weekly Trading Update - Feburary 20, 2009

Two bad trades generated a little over $200 profit for me in this week. The first one is that I sold my position too early, and the other one is that I put wrong stop sell price on the stock which resulted in the loss that I had to take. A couple of things, however, have been learned from these two trades, 1) don't let the emotion and news judge the transactions but the indicators and charts. 2) Stop loss price needs to be set based on the trading situation as leveraged ETF's does not sometimes trace the index perfectly.

Positions From last week,

Davis & Henderson Income Fund, DHF.UN: 200 shares: total cost of $6739.90

Transactions this week,

S&P 500 Bear Plus ETF, HSD
Feb 18, sell, 200 shares @ $36.80 - $9.95 commission
Total Cost: $7,350.05
Realized Loss: $7350.05 - $6739.90 = $610.15 (9.05%)

Feb 20, Buy, 300 shares @ $39.19 + $9.95 commission
Total Cost: $11,766.95

Feb 11, sell, 150 shares @ $37.90 - $9.95 commission
Total Cost: $11,360.05
Realized Loss: $11,360.05 - $11,766.95 = -$406.90 (-3.46%)

Trading Gain/Loss from this week: $203.25

Year-to-date Trading Profit: $2939.95

Weekly Trading Update - Feburary 13, 2009

I made it even with 10 bones made through a couple of trades in this week. I kept my S&P 500 Bear+ ETF with stop loss at $31.03. Average cost price per share is around $33.70. After Timothy's bank rescue "plan", I don't think the economy will be back up anytime soon.

Think about this way for people think Novermber's low is the bottom. Usually, stock market is 6 months ahead of the actual economy, do you see the economy will rebound in April or May in 2009? I am simply not seeing any evidence for that.

Positions From last week,

Davis & Henderson Income Fund, DHF.UN: 500 shares: total cost of $7,569.95

Transactions this week,

Davis & Henderson Income Fund, DHF.UN
Feb 10, sell, 500 shares @ $14.90 - $9.95 commission
Total Cost: $7440.05
Realized Loss: $7440.05 - $7569.95 = -$129.90 (-1.72%)

S&P/TSX Capped Energy Bear Plus ETF, HED
Feb 10, Buy, 150 shares @ $17.10 + $9.95 commission
Total Cost: $2,574.95

Feb 11, sell, 150 shares @ $18.17 - $9.95 commission
Total Cost: $2,715.55
Realized Loss: $2,715.55 - $2,574.95 = $140.60 (5.46%)

S&P 500 Bear Plus ETF, HSD
Feb 10, Buy, 100 shares @ $33.90 + $9.95 commission
Total Cost: $3,399.95

Feb 11, Buy, 100 shares @ $33.30 + $9.95 commission
Total Cost: $3,339.95

Total Cost: $3,399.95 + $3,339.95 = $6739.90

Trading Gain/Loss from this week: $10.70

Year-to-date Trading Profit: $2736.70

Comments on Geithner’s Rescue Plan Outline

The Treasury provided only the most general descriptions of how struggling homeowners and small businesses would be helped on Tuesday. And officials said they have yet to design a program that is a core part of the plan which is based on three parts:

1) Give $50 billion to homeowners struggling with foreclosure. Details on this will come later but it is, in my opinion, a necessary element.
2) Institute a “stress test” to determine which of the remaining banks are insolvent. If they are found to be insolvent, then…
3) Establish a public-private entity to swallow up the bad assets and sell them later

The heart of the problem is this: how do you price those toxic assets?

Geithner seems to be calling in the vulture investors to buy up this junk as they have done before. But the vultures are unwilling to do so at this point because the banks won’t sell the bad assets at their true bargain-basement value.

It isn’t buyers who cannot be found. It’s sellers: the banks don’t want to sell at market prices because then they would have to take a massive loss on their books and be revealed as utterly insolvent.

As Nobel economist Joseph Stiglitz argues: the banks are already insolvent and just don’t want to admit it. If the housing market dropped one percent more, those 18-28 billion would fall to zero and the gig would be up officially.

I don't get why Secretary Geithner continue to insist that a public private partnership can somehow coax the big banks to sell their toxic assets at a price that won’t rob taxpayers?

Weekly Trading Update - February 6, 2009

In this week, I tested out the income trust sector against my trading theories/system, and found out that it does not work very well due to the nature of the income trust that tend to lag the market a little bit. Well, here is the update for the week.

Positions From last week,
None

Transactions this week,
Davis & Henderson Income Fund, DHF.UN
Feb 2, Buy, 500 shares @ $15.12 + $9.95 commission
Total Cost: $7569.95

Fort Chicago Energy Partners, FCE.UN
Feb 4, Buy, 800 shares @ $7.45 + $9.95 commission
Total Cost: $5969.95

Feb 5, Sell, 800 shares @ $7.50 - $9.95 commission
Total Cost: $5,990.05
Realized Loss: $5990.05 - $5969.95 = $20.10 (0.34%)

Loblaw, L
Feb 6, Buy, 190 shares @ $33.98 + $9.95 commission
Total Cost: $6,466.15

Feb 6, Sell, 190 shares @ $32.50 - $9.95 commission
Total Cost: $6,165.05
Realized Loss: $6165.05 - $6466.15 = -$301.10 (-4.66%)

Trading Gain/Loss from this week: -$281.00

Year-to-date Trading Profit: $2726.00

10 tips for RRSP Contributions

The annual rush to beat the deadline for RRSP contributors can be stressful. No less worrisome is the nagging feeling that you may have missed an opportunity by neglecting some step in the process.

Patricia Lovett-Reid, Senior Vice President, TD Waterhouse Canada Inc. outlines ten ways to make a more effective RRSP contribution In her recently published retirement planning guide.

1. Don't make contributing to your RRSP a once-a-year-event. With a regular contribution plan, you'll avoid the February rush and your money will start working for you sooner.
2. Don't let your tax refund go to waste. Rather than spending your tax refund, consider repaying your loansand credit cards, paying down your mortgage, or if you have the RRSP room, topping up your contribution.
3. Don't forget about your long-term financial plan. By establishing a formal plan and monitoring your progress regularly, you'll have a far better chance of reaching your retirement goals.
4. Maximize your RRSP contribution. Your maximum contribution for 2005 is $16,500.00, or 18% of your previous year's earned income, whichever is less. This may be reduced by a pension increased by your "carry forward" amount, which is the dollar amount you can carry forward to another year when you contribute less than the full amount in any given year.
5. Diversify your portfolio. Studies have shown that more than 90% of your portfolio's return is the result of asset allocation and not individual investment selection. By ensuring your investments are allocated across all asset classes (cash, fixed income and equities), it will help to ensure that you always have the best performing asset class in your portfolio.
6. Designate a beneficiary for your RRSP. Despite the fact that RRSPs make up the bulk of many people's assets, some still do not designate a beneficiary or take into account the tax consequences when they do name a beneficiary. Under the Income Tax Act, upon death, the assets in an RRSP that are designated to a spouse can be automatically transferred tax-free to their plan, avoiding probate fees and income taxes.
7. Consider income-splitting strategies. Spousal RRSPs can provide a means of income-splitting for couples. They can help defer taxes right away for the contributor and reduce taxes at retirement. Shifting investment income from a higher income earner to the lower income earner can mean less tax payable if the lower income earner is in a lower tax bracket during retirement
8. Don't "park" your RRSP contribution indefinitely. Every year, many Canadians "park" RRSP contributions in money market funds. These contributions could be missing out on growth potential and the opportunity for a better rate of return if invested elsewhere.
9. Don't miss an RRSP contribution just because you're temporarily short of money. If you are short of cash at RRSP time, borrowing may be the answer. RRSP loans are usually offered at attractive rates and often give you the option of deferring the first payments for up to three months, potentially allowing you to repay all or part of the loan with your tax refund.
10. Don't contribute in-kind of securities that have capital losses. If you contribute securities into an RRSP, the Canadian Revenue Agency deems this a disposition, or sale, of the securities. If the sale is done at a profit, taxes must be paid on the capital gain. If you contribute securities to an RRSP that carry a loss, you will lose the ability to net these losses against taxable capital gains at tax time.

Carnival #1 - Stock Trading & Investing

Welcome to the 1st edition of the 17th Avenue Money Talks Carnival - Stock Trading and Investing! In total, this Carnival received over 30 submissions, and the following entries have been carefully selected for this edition of the Carnival.

David presents The Benefits Of Owning A Corporation posted at Personal Finance Ology, saying, "Own your own business and be your own boss, its the perfect job. Make sure that you follow the correct steps to becoming incorporated!"

Bill Spohnholtz presents Stock Market 101 posted at Learn The Stock Market And How to Trade, saying, "Sometimes when I review the basics I think of my best new strategies. Whether refreshing or learning for the first time I challenge you to not have at least one "ah ha" moment while reading through these."

MoneyNing presents HSBC Direct Online Bank Review posted at Money Ning, saying, "Great look at what is a HSBC Direct online bank account means for you."

Investing School presents Zecco vs TradeKing Discount Brokerage Comparison Review posted at Investing School, saying, "Want to know whether Zecco or TradeKing is better? This is the comparison you need to read!"

Darwin presents SuperFund Review - Are the Returns Too “Super” to be True? posted at Darwin's Finance, saying, "This article highlights an up and coming investment vehicle that will soon be garnering much press - consider these facts before signing up."

VC presents A Voice to Shake Wall Street posted at The Penny Daily.

KCLau presents Procrastinator, plucker, plotter, and prober posted at KCLau's Money Tips, saying, "Recently I was reading the book titled “The Number: What do you need for the rest of your life and what will it cost?” A rundown on what the book has to offer"

FIRE Getters presents Investing - Which Stock Market Indexes to Choose? posted at FIRE Finance.

Pinyo Bhulipongsanon presents Should You Invest In Target Retirement Funds? posted at Moolanomy.

Tyrone Solee presents How Stock Market Works posted at Millionaire Acts, saying, "A great article on how stock market works"

Patrick @ Military Money presents 2009 Retirement Plan Contribution Limits posted at Military Finance Network, saying, "Information on 2009 Retirement Plan Contribution Limits for those who plan on maxing out their retirement accounts this year."

Investing School presents What is a Hedge Fund - A Definition posted at Investing School, saying, "What is a hedge fund? Here's a definition."

CreditCardAssist.com presents Don't Treat Your Credit Card Limit as Income posted at Credit Card Assist.

The Smarter Wallet presents Charting Stock Movements With Fibonacci Trading Techniques posted at The Smarter Wallet.

Raily Arena presents Tips to Increase Your Chance of Selling Your Home posted at How to Sell Your Own Home.

Dave presents Why Muni Bonds Are A Bad Investment! posted at Cheapo Groovo.

Ralph Jean-Paul presents How To Make Important Decisions Quickly posted at Potential 2 Success, saying, "Quick decision making is critical in just about every aspect of life. Every decision you make produces a result. In every line of business, quick decision making is crucial for success."

Carrie presents Less is More: Stock Market Concepts posted at Less is More.

That concludes this edition. Thanks a million to all the contributors of this carnival!

January 2009 Net Worth Update (+7.66%)

Welcome to the recurring monthly net worth update - the January 2009 edition.

I made some changes towards my financial structure in this month.

First off, I deposit $5000 for my TFSA to take advantage of the tax-free interest, and the money is from my non-registered investment account. As I mentioned in the previous post about my financial goals for 2009, I will use my TFSA money for my first home purchase.

Second, instead of saving $300 per month towards my emergency fund as initially planned, I withdrew $3600 from my non-registered investment account, just because I'd like to be prepared for the worse economic downturn in future.

Last, I made about $3000 from trading stocks in this month! Not bad, eh?

Here are the assets/liabilities result for the first month of 2009:

Assets

Vehicles: $6500

Cash: $5600

Savings: $20000

TFSA: $5000

Registered Investment Account: $20600

Non-Registered Investment Account: $14000

Total Assets: 71700

Debts

Credit Card Debt: $1400

Total Debts: $1400

Total Net Worth: $70300 (+7.66%)

Started 2009 with Net Worth: $65300

Year-to-Date Gain/Loss: +7.66%

My net worth goal at the end of year 2009 is $90,000.

Weekly Trading Update - January 30, 2009

I took advantage of the market oversold condition in this week, and made $820.10 (6.83%) from one buy-sell transaction of RY. This is really nice addition towards my alternative income goal. Now, I am about $2000 short to make it to my trading income of $5000 for 2009.

Positions From last week,
None

Transactions this week,

Royal Bank of Canada, RY
Jan 27, Buy, 400 shares @ $30.00 + $9.95 commission
Total Cost: $12009.95

Jan 28, Sell, 400 shares @ $32.10 - $9.95 commission
Total Cost: $12891.95
Realized Gain: $12830.05 - $12009.95 = 820.10 (6.83%)

Trading Gain/Loss from this week: 820.10

Year-to-date Trading Profit: $3007.00

Federal Budget Review 2009

Personal Amounts and Income Tax Brackets

• The federal basic personal amount (and the spousal, common-law partner and eligible dependant amounts) are scheduled to increase from $9,600 (in 2008) to $10,320.
• The upper limit on the lowest federal personal income tax bracket (which taxes income at 15%) will increase from $37,885 (in 2008) to $40,726.
• The upper limit on the second personal income tax bracket (which taxes income at 22%) will increase from $75,769 (in 2008) to $81,452.

Home Renovation Tax Credit

• Effective after January 27, 2009, the government proposes to introduce a temporary non-refundable Home Renovation Tax Credit (HRTC) equal to 15% of eligible expenditures incurred in excess of $1,000 but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).
• The credit will only apply for the 2009 taxation year for work performed or goods acquired after January 27, 2009 and before February 1, 2010 but will not apply to expenditures made pursuant to agreements entered into before January 28, 2009.
• Eligible expenditures qualify for the credit if they are incurred in relation to a renovation or alteration provided the work is of an enduring nature and is integral to an eligible dwelling.
• Qualified expenditures include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits but would not include regular maintenance and repairs, appliances or financing costs, for example.

Home Buyer’s Plan and the First Time Home Buyers Credit

• After January 27, 2009, the amount that an eligible first time home buyer will be able to withdraw tax-free from an RRSP to help finance the purchase of a home will increase from $20,000 to $25,000.
• The budget also proposes a new non-refundable tax credit for first time home buyers who acquire a qualifying home after January 27, 2009. The credit is equal to $5,000 multiplied by the lowest personal income tax rate for the year (15% for a maximum of $750 in 2009) and is claimable for the taxation year in which the home is acquired.

The Working Income Tax Benefit (WITB)

• The WITB originated in 2007 to provide tax relief for low income individuals and families who have earned income from employment or business. The budget proposes (after further consultations) to enhance the assistance provided by the Working Income Tax Benefit effectively doubling the amount of total tax relief provided. In addition, the budget proposes to increase the levels at which Child Tax Benefits for low income families are phased out.

Age Credit

• The budget proposed to increase the Age credit (applicable to those aged 65 and over) by $1,000 to $6,408. The income level at which this credit is fully phased out will increase to $75,032 (from $68,365).

10 Most Important Economic Indicators

10 most important economic indicators that every investor should pay attention to for the big piture is listed in reverse order, and this post also explains how each of them has an impact on the stock market. As investors, we should all know about CPI, PPI, ECI, and GDP.

10. Durable Goods Orders
This is a government index that measures the dollar volume of orders, shipments, and unfilled orders of durable goods. Durable goods are new or used items generally with a normal life expectancy of three years or more.

This report gives us information on the strength of demand for US manufactured durable goods, from both domestic and foreign sources. When the index is decreasing (fell by -1% in December, 2008), it suggests demand is weakening, which will probably result in decresing production and employment.

9. Personal Income and Consumption
Also known as Personal Income and Outlays. Personal Income represents the income that households receive from all sources, including employment, self employment, investments, and transfer payments.

Income is the major determinant of spending (US consumers spend approximately 95 cents of each new dollar) and consumer spending accounts for two-thirds of economy. Greater spending spurs corporate profits and benefits. If more spending will help the economy recover, the US consumers have less than 5 cents of each new dollar more to help the economy to recover. Not too much room ahead compared to China and Japan which has 30% saving rate!

8. Employment Cost Index (ECI)
The ECI is designed to measure the change in the cost of labor, including wages and salaries as well as benefits.

It is useful in evaluating wage trends and the risk of wage inflation/deflation. If wage deflation threatens, it's likely that interest rate will go down, then bond and stock prices will rise. With Fed's rate at 0 - 0.25%, how much room do you think the Fed still has to help the stock market?

7. Producer Price Index (PPI)
The PPI measures the average price of a fixed basket of capital and consumer goods at the wholesale level. There are three primary publication structures for the PPI: industry, commodity, and stage-of-processing.

It's important to monitor the PPI excluding food and energy prices for its monthly stability. This is referred as the core PPI and gives a clearer picture of the underlying inflation trend. Inflationary Pressure is generated when the core PPI posts larger-than-expected gains. It's considered a precursor of consumer price inflation.

6. Consumer Price Index (CPI)
The CPI measures the change in price of a representative basket of goods and services such as food, energy, housing, clothing, transportation, medical care, entertainment and education. It's also known as the cost-of-living index.

The rate of change of the core CPI (CPI excluding food and energy prices) is one of the key measures of inflation/deflation for the economy. Same as PPI, deflationary pressure is generated when the core CPI posts larger-than-expected losses. Deflationary pressure is not generally good thing for the stock market.

5. Consumer Confidence Index
A survey of 5000 consumers about their attitudes concerning the present situation and expectations regarding economic conditions conducted.

This report can be helpful in predicting sudden shifts in consumption patterns. Since consumer spending accounts for two-thirds of the economy, it gives us insights about the direction of the economy. However, only index changes of at least five points should be considered significant. According to the latest Consumer Confidence Index report, it's near a record low.

4. Existing Home Sales
In normal circumstances, this indicator will not make it to the 4th spot, but due to the housing market crash caused this economy crisis, I think it's more important to take a closer look at this indicator.

This report measures the selling rate of pre-owned houses. It's considered a more important indicator of activity in the housing sector than the new home sales, as it accounts for around 84% of all houses sold and is released earlier in the month.

This provides a gauge of not only the demand for housing, but the economy momentum. People have to be financially confident in order to buy a house.

3. Retail Sales
This index measures the total sales of goods by all retail establishments in the US. These figures are in current dollar, that is, they are not adjusted for inflation. However, the data are adjusted for seasonal, holiday and trading-day differences between the months of the year.

This is the most timely indicator of broad consumer spending patterns. It gives you a sense of the trends among different types of retailers. These trends can help you spot specific investment opportunities.

2. Beige Book
Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from bank and branch directors and interviews with key businessmen, economists, market experts, and other sources. It summarizes this information by District and sector.

The Fed uses this report, along with other indicators, to determine interest rate policy at FOMC meetings. If the Beige Book portrays deflationary pressure, the Fed may decrease interest rates. But, where can the interest rates go anymore?


1. Gross Domestic Products (GDP)
GDP measures the dollar value of all goods and services produced within the borders of the United States, regardless of who owns the assets or the nationality of the labor used in producing that output. Investor should monitor the real growth rates because they are adjusted to inflation.

This is the most comprehensive measure of the performance of the economy. Healthy GDP growth for US is between 2.0% - 2.5% when the unemployment rate is between 5.5% - 6.0%. As the unemployment rate might reach 12% by end of the year as indicated by some economists, GDP growth will take a while to get to the positive territory.

Summary:
Almost all the economic inidicators currently reflect deflationary pressure, which means a decrease of interest rates becomes imminent. However, with the Fed's rate at 0 - 0.25%, Where is the room to cut the rate anymore? Where is the non-convensional method to help the economy right now? I just don't see it coming anytime soon.

Weekly Trading Update - January 23, 2009

I had a few really bad executions on trading up the HSU in this week, mainly because I lost my confidence in my own technical analysis after disturbing economy news one after one. As an amateur trader, I need to learn about how to stick with my own game plan but not the hypes flying around on the Internet.

Positions From last week,

Horizons BetaPro US Bond Bear+ ETF: 100 shares: total cost of $1,333.95

Horizons BetaPro S&P 500 Bull+ ETF: 2000 shares: total cost of $12949.95

Transactions this week,

Horizons BetaPro US Bond Bear+ ETF
Jan 19, sell, 100 shares @13.60 - 9.95 commission
Total Cost: 1333.95
Realized Gain: 1350.05 - 1333.95 = 16.1 (1.21%)

Horizons BetaPro S&P 500 Bull+ ETF
Jan 20, sell, 2000 shares @ $6.32 - $9.95 commission
Total Cost: $12949.95
Realized Loss: $12632.05 - $12949.95 = -$317.9 (-2.45%)

Jan 21, Buy, 2000 shares @ $5.96 + $9.95 commission
Total Cost: $11929.95

Jan 21, Sell, 2000 shares @ $5.71 - $9.95 commission
Total Cost: $11929.95
Realized Loss: $11410.05 - $11929.95 = -$519.9 (-4.36%)

Jan 21, Buy, 2000 shares @ $6.10 + $9.95 commission
Total Cost: $12209.95

Jan 21, Sell, 2000 shares @ $6.02 - $9.95 commission
Total Cost: $12209.95
Realized Loss: $12030.05 - $12209.95 = -$179.9 (-1.47%)

Horizons BetaPro S&P 500 Bear+ ETF
Jan 20, Buy, 380 shares @ $33.90 + $9.95 commission
Total Cost: $12891.95

Jan 20, Sell, 380 shares @ $34.90 - $9.95 commission
Total Cost: $12891.95
Realized Gain: $13252.05 - $12891.95 = 360.1 (2.80%)

Jan 22, Buy, 300 shares @ $34.66 + $9.95 commission
Total Cost: $10407.95

Jan 23, Sell, 380 shares @ $34.90 - $9.95 commission
Total Cost: $10407.95
Realized Gain: $10670.05 - $10407.95 = 262.10 (2.52%)


Trading Gain/Loss from this week: -$379.4

Year-to-date Trading Profit: $2186.90

S&P 500 Inside Day Pattern Trading

In the last two days, S&P 500 index formed two inside days formation that occurs when the entire daily price range for a given security falls within the price range of the previous day. This term often refers to all versions of the harami pattern and can be very useful for spotting changes in the direction of a trend. An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day.

Should today's S&P Index drop below Wednesday's low (804.47), we would see more downside drop on the index; If the index broke above Wednesday's high (849.94), that would typically mean a buy signal for a short-term trade.