14 Dec

A Better Way To Tap Home Equity


Posted by: Bai Jiang

If you can’t live within your means in your working years, there’s no reason to believe you’ll pull it off in retirement.


So let’s start familiarizing ourselves with the options for retirees who didn’t save enough to live the kind of lifestyle they want. One is to go back to work. Easy to say, but hard to do unless you can consult or have an affinity for fast food.


Another is to rent out a basement apartment or sell the family home and either buy a cheaper house or rent. Moving is a non-starter for many retirees because they still enjoy their homes and want to have a place for kids and grandchildren to stay.


This brings us to two options for borrowing against the equity in your home, one of which, reverse mortgages, was covered last week (read that column here). The other option is the home equity line of credit, which a lot of people will set up and use long before they retire because it’s an efficient way to borrow.


Click here to read more in the Globe and Mail.

14 Dec

Canadians Slowing Down On Borrowing Amid Economic Uncertainty


Posted by: Bai Jiang

There are signs that Canadian consumers have slowed down their borrowing this year, after peaking in the fourth quarter of 2010.


A TransUnion analysis released Thursday found that average consumer debt, excluding mortgages, was $25,594 in the third quarter.


That’s about where it has been throughout 2011, although up slightly from where it was in the third quarter of 2010.


Click here to read the full article in The Star.

14 Dec

Global Economic Uncertainty Will Keep Canada’s Growth Moderate in 2012: RBC Economics


Posted by: Bai Jiang

After a turbulent year, Canada’s economy is set to grow by 2.5% in 2012, according to the latest economic outlook issued yesterday by RBC Economics. 


Commodity prices remain at historically high levels, the US is projected to continue to grow and the Bank of Canada is keeping monetary policy accommodative – all of which will support growth in Canada. But the forecast includes the key assumption that European policymakers contain the sovereign debt crisis in that region.


“Canada’s economy experienced some large swings in growth in 2011. The second quarter’s unexpected contraction was a response to a number of temporary factors – the natural disasters in Japan, reduced auto industry activity and wildfires in Alberta. As these factors reversed, a strong rebound followed in the third quarter,” said Craig Wright, Senior VP and Chief Economist, RBC. “While the initial release of second quarter data prompted some talk of a double-dip recession, third quarter data proved otherwise.”


The Bank of Canada has held interest rates at low levels in the face of heightened uncertainty about the global economy, moderate growth in Canada and expectations that inflation will remain steady. Recently, the Bank of Canada reaffirmed its 2% inflation target for the next five years and signalled its continued commitment to flexible policy making.


Click here for more details from RBC.

14 Dec

5 Reasons Why A Fixed-rate Mortgage Could Be Your Best Bet


Posted by: Bai Jiang

It’s a decision that millions of Canadian homeowners struggle with repeatedly during their time as homeowners: Do they choose the security of a fixed-rate mortgage, or opt for the flexibility (and usually lower cost) of a variable rate and hope that rates don’t spike higher?


But right now, conditions in the mortgage market mean homeowners can actually get the best of both worlds, according to market-watchers.


For years, we’ve seen evidence that people who opted for variable-rate mortgages ended up saving money over the fixed-rate crowd – anywhere from 77-90% of the time, depending on the period selected and the assumptions used.


Despite that, 60% of the 5.8 million mortgages out there are fixed-rate mortgages, and the five-year term is especially popular. Another 31% of mortgages are variable- or adjustable-rate. The rest are hybrids that have a bit of both types of mortgages built in.


In the past year, we’ve seen evidence that people have been starting to swing more towards variables. But in the past few months, two things have happened in the Canadian mortgage market that may have the “variable-is-best” crowd changing their minds… or at least re-thinking what used to be an easy decision.


Click here for five reasons why a fixed-rate mortgage could be your best bet from CBC News.

14 Dec

EnRICHed Academy’s "Smart Start For Financial Genius"


Posted by: Bai Jiang

Dominion Lending Centres is proud to announce the launch of EnRICHed Academy’s “Smart Start for Financial Genius”! This program has been designed to educate young adults (13-23) and their families on the fundamentals that build wealth in an entertaining, funny and entirely interactive way.

No program like this currently exists, and the need and demand across North America is at an all-time high. This is our way of giving back to communities across Canada, ensuring our youth embrace financial literacy.

Click here to view the EnRICHed Academy trailer!

Why We Created The Product:

– Statistically, 6 out of 10 Canadians live paycheque to paycheque, which means if their income stopped for only one pay period they’d have to rely on a LOC or Credit Card to make ends meet

– From 1989 to 2006, total credit card charges rose from $69 Billion to $1.8 Trillion; a 2,600% increase

– Today the average household credit card debt is $16,007

– The yearly savings rate of an average Canadian has gone from over 12% of income in the early 90s to under 2% today

– Household debt in Canada has more than doubled over the past 10 years

– 84% percent of college graduates in North America indicated they needed more education on financial management topics. Parents expect the schools to teach financial literacy and schools expect parents to. The fact is, most parents and teachers are ill equipped to teach students and kids on this subject and, therefore, don’t

– The average college graduate is $23,186 in debt

What The Product Looks Like:

The program comes in a box and contains 5 DVDs of entertaining but highly educational video on creating a foundation for building wealth. There is a 100-page workbook that the family will work through that includes activities and exercises as well as other materials that correspond with the topics covered in the program.

What Topics Are Covered:

  • 1. Understanding money 101
  • 2. Why some people don’t save money… No matter how much they make
  • 3. How much we actually spend at an early age
  • 4. Saving Money vs Making Money
  • 5. The power of saving 10%
  • 6. Why starting to save at an early age is CRITICAL
  • 7. The magic behind COMPOUND INTEREST and how it works
  • 8. How to systemize your savings and where to put your money at an early age
  • 9. How to buy your first investment property by the age of 23
  • 10. How to get into the stock market
  • 11. What a credit or beacon score is
  • 12. How credit cards work
  • 13. What to look for when buying your first car
  • 14. Good debt vs Bad debt
  • 15. How taxes work on a paycheque
  • 16. Understanding why having a job you love is critical to building wealth
  • 17. How to find a mentor
  • 18. 6 steps to move ahead in your career
  • 19. The influence of your environment
  • 20. There are no shortcuts
  • 21. Why goals are critical to building wealth
  • 22. The difference between a dream and a goal
  • 23. How to write down goals and take action
  • 24. The importance of building your personal brand
  • 25. If people can’t trust or depend on you… they won’t pay you
  • 26. Why your reputation is so important
  • 27. How to use your reputation to your advantage