Top Business Book for Entrepreneurs: Profit First

Robert T. Anderson

Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

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Conventional accounting uses the logical (albeit, flawed) formula: Sales – Expenses = Profit. The problem is, businesses are run by humans, and humans aren’t always logical. Serial entrepreneur Mike Michalowicz has developed a behavioral approach to accounting to flip the formula: Sales – Profit = Expenses. Just as the most effective weight loss strategy is to limit portions by using smaller plates, Michalowicz shows that by taking profit first and apportioning only what remains for expenses, entrepreneurs will transform their businesses from cash-eating monsters to profitable cash cows. Using Michalowicz’s Profit First system, readers will learn that:

· Following 4 simple principles can simplify accounting and make it easier to manage a profitable business by looking at bank account balances.
· A small, profitable business can be worth much more than a large business surviving on its top line.
· Businesses that attain early and sustained profitability have a better shot at achieving long-term growth.

With dozens of case studies, practical, step-by-step advice, and his signature sense of humor, Michalowicz has the game-changing roadmap for any entrepreneur to make money they always dreamed of.

Top YouTube Camera for Great Videos

Robert T. Anderson

Looking to improve your video quality on YouTube? Then you need to Check out the Canon M50 with the 64 GB Memory Card.

Get yours here.

Canon EOS M50 Mirrorless Camera Kit with 15-45mm Lens(Black) with 64GB Memory Card (Buy it here).

BrandCanon
Type of productCompact, Mirrorless
Compatible mountingsCanon EF-M, Canon EF, Canon EF-S
Effective Still Resolution24.1 MP
Optical Sensor Resolution24.1 MP

About this item

  • Improved Dual Pixel CMOS AF and Eye Detection AF. The compatible lenses are EF-M lens (and EF/EF-S lenses when using Mount Adapter EF-EOS M).Equivalent to approximately 1.6 times the focal length indicated on a mounted lens
  • 24.1 Megapixel (APS-C) CMOS Sensor with ISO 100-25600 (H: 51200)
  • 4K UHD 24p and HD 120p for Slow Motion
  • Great choice for compact to mid-range point and shoot cameras
  • Twice as fast to take better pictures and Full HD video
  • Exceptional video recording performance with Class 10 rating for Full HD video (1080p)

My Municipal Election Picks for October 22nd 2018

Robert T. Anderson

With less than 30 days until Londoner’s vote, I thought it would be a good time to release my municipal election picks for 2018. As a city we are guinea pigs for rank balloting which will play an interesting role in determining winners this time around. Taking that into consideration, I’ve selected more than 1 candidate if I feel both could do the job.

For a complete list of candidates in each Ward, please click here.

Mayor: 

  1. Ed Holder
  2. Paul Paolatto

Ward 1:

  1. Bud Polhill

Ward 2:

  1. Shawn LewisCity of London Ontario

Ward 3:

  1. Mo Mohamed Salih

Ward 4:

  1. Jesse Helmer

Ward 5:

  1. Randy Warden

Ward 6:

  1. Phil Squire

Ward 7:

  1. Josh Morgan

Ward 8:

  1. Matt Reid
  2. Steve Lehman

Ward 9:

  1. Matt Millar
  2. Kyle Thompson

Ward 10:

  1. Paul Van Meerbergen

Ward 11:

  1. Rachel Powell

Ward 12:

  1. Eric Weniger

Ward 13:

  1. John Fyfe-Millar

Ward 14:

  1. Steven Hillier

 

Catholic Trustee’s:

  • Linda Steel
  • Gabe Pizzuti
  • John Jevnikar

TVDSB Trustee’s

  • Jake Skinner
  • Corrine Rahman
  • Brian Gibson

Hidden home buying costs to consider

Robert T. Anderson

Expenses to consider when purchasing a home

When you think of the cost of buying a home, expenses like the down payment, realtor commission and moving costs probably come to mind. While these expenses usually make up most of your spending, there are other costs associated with home buying that people often overlook. Check out this list of costs you might encounter at different stages of the home-buying process.

Before closing

Home inspection

  • It’s a good idea to have your property evaluated by a certified home inspector. They’ll check things like the foundation, heating and cooling systems, electrical service, the roof and plumbing – important details you’ll want to know about before making an offer.
  • Approximate cost: $500

Down payment deposit

  • After your formal offer is accepted by the seller, you’ll need to make a deposit on the purchase price. This Hidden Home Buying Costsamount will be applied to your final payment of the purchase price.
  • Approximate cost: Variable, can be up to 5% of the property’s purchase price

Appraisal/property valuation

  • Before you’re approved for a mortgage, your lender may require an appraisal of the property’s value.
  • Approximate cost: $250–500, but sometimes waived by the mortgage lender

It’s important to consider all additional expenses before beginning the home-buying process to stay within your budget.

At closing

Legal or notary fees

  • Your lawyer or notary charges fees to search the property’s title to confirm that the seller currently owns the property and what liens (such as mortgages) are registered against the property that will have to be cleared at the time of sale. They will prepare the documents required to complete the sale and ensure that you receive title to the property you are buying.
  • Approximate cost: $500–$1500

Property survey and/or title insurance

  • A property survey is optional but sometimes requested by the lender. It’s used to verify the property’s boundaries, measurements of the land and position of the building on the property.
  • Title insurance is often used when a survey can’t be located or doesn’t exist. It’s used to protect ownership of the property and is typically purchased through your lawyer. It protects you against title fraud and may protect you against identity theft and fees that came up when your lawyer or notary conducted the property title search.
  • Approximate cost: Property survey: $750–$1,000; title insurance: varies based on property value; one time cost

Land transfer tax

  • This is a tax charged upon transferring the ownership of the property to a new owner. In some provinces, land transfer tax refunds are available for first-time home buyers.
  • Approximate cost: A percentage of the property’s purchase price, variable by province. Some cities charge an additional municipal land transfer tax. Visit your provincial government’s website for more information.

GST/HST/QST

  • These taxes are generally only charged on new homes, not resale properties; however, some existing properties aren’t exempt.
  • Approximate cost: A percentage of the property’s purchase price, variable by province. Visit your provincial government’s website for more information.

Pre-paid expenses

  • If the seller has already paid for future expenses such as property taxes or utility bills, you’ll need to reimburse them as part of the legal closing process.
  • Approximate cost: Variable

Property taxes

  • Property taxes can be paid in different ways – as an upfront annual cost, in installments throughout the year, or as part of your ongoing mortgage payments.
  • If you opt for property taxes to be included in your mortgage payments, your lender will make payments to your municipality when due.
  • If you decide to make direct payments, contact your municipality to find out the amount you need to pay and when taxes are due.
  • Approximate cost: Variable

After closing

Transfer fees

  • Some companies, especially utilities, charge a disconnect/reconnect fee when moving; you’ll likely see this on your first bill after moving.
  • Approximate cost: Varies by company

Utility deposits

  • If you’re a first-time home buyer who’s never held a utility account, the utility company will usually require a deposit for the first year.
  • You’ll likely get this money back in the form of a credit to your utility bill, either as a lump-sum or in instalments.
  • Approximate cost: Varies by company

Mortgage default insurance

  • If your down payment is less than 20% of the total purchase price of your home, you’ll have a high-ratio mortgage.
  • High-ratio mortgages require you to buy mortgage default insurance, which protects mortgage lenders in the event homeowners can’t pay their mortgage.
  • Approximate cost: Varies depending on size of down payment; can be added to your ongoing mortgage payments

Home insurance

  • Home insurance offers protection for your home and its contents in the event of fire, natural disaster, theft or other unfortunate circumstances, and is required by lenders. Policies vary according to the options you choose and are priced according to the level of protection.
  • Approximate cost: Variable, paid annually or in instalments

Managing the cost and logistics of buying a home can be a big job. It’s important to consider all additional expenses before beginning the home-buying process to stay within your budget. Don’t forget that home ownership also often involves repairs and renovations as well the cost of furniture and décor. You may also want to evaluate which type of insurance coverage is right for you.

If the thought of buying a home makes you anxious about your finances, I can help you prepare and assess your financial readiness for home ownership, and lead you through setting goals towards owning the house you dream of.

Get up to speed on mortgage basics before buying a home

Robert T. Anderson

When you’re starting your home buying journey, it can be hard to know where to begin. For one thing, mortgages aren’t always easy to understand, especially with regulatory changes over the past two years. If you’re looking to buy a home, it’s important to get up to speed on these rules so you can select the right mortgage for you. To help you understand these changes, let’s look at some of the basic requirements for buying a home.

The mortgage basics

Down payment requirements

Home down payments are usually expressed in percentages. They’re calculated by dividing the dollar value of the down payment by the home price. In Canada, the minimum down payment depends on the purchase price of the home:

  • Purchase price of less than $500,000 needs a 5% minimum down payment
  • Purchase price of $500,000 – $999,999 needs a 5% minimum down payment on the first $500,000, and 10% on any amount over $500,000

If you make a down payment of at least 20% of the purchase price, you’ll hold a conventional or low-ratio mortgage. Mortgage Terms & RulesIf you put down less than 20%, your mortgage is considered a high-ratio mortgage. By law, high-ratio mortgages require you to buy mortgage default insurance.

Mortgage default insurance

This type of insurance protects mortgage lenders if homeowners can’t pay their mortgage. Your mortgage lender can arrange a default insurance policy through Canada Mortgage and Housing Corporation (CMHC), Genworth Canada or Canada Guaranty. In most cases, the additional cost is factored into your mortgage payment.

Financial stability requirements

Your lender will use two ratios – gross debt service (GDS) and total debt service (TDS) – to assess your ability to make monthly payments. These are used to determine how much you can spend on housing without risking your financial stability.

  • Gross debt service is an estimate of the maximum home-related expenses you can afford each month, including mortgage payments, electricity and gas costs, property taxes and condo fees. While an acceptable number varies between lenders and the type of mortgage you hold, your monthly housing costs should be less than 30% of your gross monthly income for a non-insured, conventional mortgage.
  • Total debt service is an estimate of the maximum debt load you can afford each month. In addition to your home-related expenses, this number includes things like car loan payments, credit cards and other loan expenses. This number also varies between lenders, but in general, your monthly debt obligations shouldn’t be more than 40% of your total monthly income for a non-insured, conventional mortgage.

Regardless of where you are in your home buying journey, brushing up on mortgage basics and the current rules is a good place to start when thinking about your next move.

Recent changes to borrowing

Changes to mortgage default insurance

What is it? In October 2016, the Department of Finance implemented new stress-testing requirements for all mortgages that need mortgage default insurance. In other words, if you need mortgage default insurance, you’ll have to be able to afford a higher mortgage rate than the promotional rate for the term you selected. This helps ensure Canadians aren’t taking on bigger mortgages than they can afford.

Who’s it for? Homebuyers applying for a high-ratio mortgage that requires mortgage default insurance, or where low-ratio mortgage insurance is required.

How does it affect me? All homebuyers applying for mortgage default insurance (high- or low-ratio) must qualify at the greater of their lender’s standard rate 5-year mortgage rate and the Bank of Canada’s 5-year conventional mortgage rate, regardless of the term chosen. For an insured mortgage, the GDS can’t exceed 39% and the TDS can’t be more than 44%.

How much mortgage default insurance costs

What is it? From time to time, Canada Mortgage and Housing Corporation (CMHC) changes the cost of insurance. Under new guidelines, CMHC increased the cost on March 17, 2017.

Who’s it for? Homebuyers applying for a high-ratio mortgage that requires mortgage default insurance, or where low-ratio mortgage insurance is required.

How does it affect me? The cost of mortgage default insurance is based on the loan-to-value (LTV) ratio of the mortgage you’re applying for – it’s calculated by dividing the size of the loan you’ll need by the purchase price of the home. The higher the LTV ratio, the more insurance will cost. The cost depends on the LTV ratio. For current rates, refer to the CMHC website.

With housing price fluctuations and changing mortgage rules, it can be overwhelming to navigate the housing market. If you need a little help to get started, I can assess your financial security plan to make sure you’re on track towards your home ownership goals.

I can also put you in touch with a mortgage planning specialist who can guide you through each step of the mortgage process. Regardless of where you are in your home buying journey, brushing up on mortgage basics and current rules is a good place to start when thinking about your next move.

How saving early and often can help grow your investments

Robert T. Anderson

How saving early and often can help grow your investments

Saving money can be a challenge at the best of times. But did you know that with a regular savings plan in place, and an early start, you could be much further ahead when it comes time to consider retirement?

That’s because when you start saving early, your money has more time to grow, allowing it to benefit from compound growth. Compounding can help your money grow, in most cases, far beyond the amount you originally invested. So, how does it work?

Compound growth is similar to compound interest. With compound interest you’re essentially earning interest onSaving Early interest – you earn interest on the money you put in at the start, as well as the money you add later, plus on all the interest that collects over time. This gives you a larger total amount to earn future interest on, leading to even more growth. Over time, you have a powerful recipe to help you grow your money.

The concept of compound growth is similar to growing a forest of trees. The forest can grow in two ways – trees can be planted by hand (like your regular investment contributions), while others may grow on their own through seeds that fall from mature trees (like compound growth on your contributions). In time, a few trees planted early can grow into an entire forest without much effort.

To understand how this could affect your savings, consider the journey of $240,000, saved two different ways. If you save $500 per month with an annual return rate of six per cent compounded monthly, beginning at age 25, you would have $1,000,724 at age 651. Conversely, if you tried to catch up on your savings, contributing $1,000 with the same annual rate of return beginning at age 45, you would only have $464,361 at age 652. Under both scenarios, you’ve invested the same amount with the same growth rate, but in the first scenario, your money has twice as long to grow, and you end up with more than twice as much.

The beauty of saving early and relying on the power of compounding is it doesn’t take a lot of money to get started. Relatively small amounts consistently invested regularly, especially when you are young and early into your career, can make a significant difference in the total size of your savings down the road. Those small deposits can be the difference between being confident with your investment success and having to worry about it much later in your life. It can be as easy as sitting back while you let your money do all the work and grow into something much bigger.

The strategy for compounding:

  • Invest early – the longer your money is invested, the more time it has to grow. When it comes to compounding returns, time is on your side.
  • Contribute regularly – regardless of the amount you can afford – the important thing is to start and be consistent. Even small contributions made each month will grow. You can increase your contributions as your financial situation changes throughout your life.
  • Don’t take money out – as your savings grow and earn compound returns, the gains made through compounding will also help you build your wealth.

Whether it’s through a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA), saving early and saving often can give you a head start on planning for retirement. And that planning may allow you to reach your financial goals sooner. I can help you review your financial goals and prepare for the future.

Practical ways to prevent overspending because of the fear of missing out

Robert T. Anderson

The financial cost – and the way out – of FOMO

If you’re addicted to social media networks, could you be suffering from FOMO? The abbreviation for fear of missing out, FOMO is the virtual equivalent of “keeping up with the Joneses,” or competing with your friends and acquaintances for material accomplishments. Caution: if you’re a millennial (between the ages of 25 and 34), you might be particularly susceptible to FOMO. According to a recent study, 26 per cent of Canadians admitted to having it. Of those, 48 per cent are millennials.* The good news: there are practical ways to deal with the condition.

Besides the psychological pressure of measuring your life based on the content your friends share online, FOMO can make a serious dent to your wallet. Here’s how:

Flaunt fest:

Your friend posts amazing photos from her latest cruise in the Mediterranean; another snaps a video of his fine wine sipping in Napa; your cousin Instagrams photos from a book launch – your favourite celebrity releasing her novel. No matter who is in your social media circle, someone will always seem to have a more interesting life than yours at any given time. Without set physical boundaries, the virtual space becomes an open and endless exhibition arena for flaunting material success, teasing you to indulge in your own.

The cycle of inadequacy:

You know your friends’ Facebook life is not their real life, at least not the whole picture. People post selectively, oftenMillennials Fear of Missing Out highlighting the good in their lives. Despite knowing this, it’s easy to get carried away by the projected lifestyles of your social media contacts. You may feel lacking, not based on facts but on your perception of how everyone else on your social media feed is having a good time. From there, it doesn’t take too long to hop on the bandwagon to pay for your own social media promotion. See how the cycle works?

Things over people:

The more you remain glued to your tablet or phone screen, the more you expose yourself to shiny new things to aspire to – the designer clothes and accessories a friend posed in; the luxurious Hawaii trip the co-worker can’t stop raving about; the gourmet food photos another friend keeps tempting you with. As things take precedence over the people in your life, the winner is often retail therapy. The losers? Your wallet and your relationships.

Spurred by instant notifications and alerts flashing on digital screens, FOMO can easily lead to impulse spending. Many, if not most of these expenses are unplanned and unaccounted for, and over time, can add up to a lot of money – money that could have grown through investments.

If you think you might be suffering from FOMO, try these steps:

1. Break down your budget and stick to it:

Earmark a portion of your budget towards fun expenses, triggered by FOMO or not. Being conscious of how much you’re allowed to spend will help you be more realistic and cause less stress to your wallet.

2. Try sticking to cash:

Leave your cards at home. Every time you pay in cash, you will be forced to live within your means and not be tempted to overspend.

Many, if not most of FOMO-triggered expenses are unplanned and over time, can add up to a lot of money – money that could have grown through investments.

3. Schedule fun time:

Knowing when you’re going out with your friends for a movie or with your partner for dinner takes the randomness out of it. You can plan better and allocate the right amount for each scheduled expense.

4. Try to unplug every once in a while:

If your FOMO is really serious, try and get away from the blitz of social networks all together for a while. You can have a weekly social media fast; deactivate your Facebook account for a period of time, turn off your phone for a couple of hours daily, or use blocking tools to restrict your access to specific social networks. You might be surprised by how you can use up all that time productively while also preventing yourself from potential splurging.

5. Pick your splurges:

If collecting antiques is your weakness, put some funds aside for it in your budget. If you like to eat out, allocate money towards that. Identifying one or two key areas you’re passionate about can help limit you from spreading your finances too thin in trying to respond to every big and small FOMO attack.

In the end, it’s all about perspective and staying grounded. Make sure your FOMO isn’t stemming from a sense of lack in some other area of your life. Remaining conscious of your spending behaviour and focusing on the non-material things that bring you joy can help you live a full life without creating a hole in your pocket.

Bonus tip: Talk to me to learn how you can grow the money you saved using the tips listed above.

Should you rely on group insurance alone?

Robert T. Anderson

How individual insurance can complement your group insurance

Your employer may offer group insurance coverage – for example, life insurance, critical illness insurance or disability insurance as part of a benefits plan.

It’s a basic way to help protect you and your loved ones.

But what if you could do more than just cover the basics? Your lifestyle is important to you and your family, so what if you could complement your group benefits coverage with individual insurance and help keep the lifestyle you’d want for your family, if you died or became too sick or injured to work?

Image alt text

Save for the future

View full infographic

Knowing the details of your group insurance plan is crucial. You want to make sure you have the right type of insurance, and the right amount of coverage, to cover all your bases when dealing with the unexpected.

Individual insurance, such as life, critical illness and disability insurance is coverage you can get outside of work. They typically offer more control and choice based on the needs of you and your family. And it’s all about you: you own it and you choose the products and options you want that are customized for your needs.

Together with your group insurance, they can help protect you, your family and your lifestyle from unexpected events that could jeopardize your financial goals and keep you from meeting your obligations.

Uncover your needs to find out if your group insurance is enough

Does group insurance cover your needs? Consider the following questions:

1. If something were to happen to you or a loved one would you be able to:

2. Does group insurance coverage include the types of insurance you and your family need?

  • Will your insurance protection last a lifetime?
  • Does your partner have group insurance coverage through their work?
  • If you’re too sick to work, would your coverage give you a lump-sum payment to help with recovery?
  • Can you increase your coverage if your needs change?

Better together: Group and individual insurance

For some people, group insurance is enough, but an individual insurance plan can complement your group insurance benefits. I can help sort out the details and fill in any existing gaps.