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How To Save $1 Million For Retirement

How To Save $1 Million For Retirement

Starting to save early for retirement is extremely beneficial in the long run, especially if you have the dream of retiring with $1 million as so many Canadians do. It’s not an easy feat, but for most Canadians, retiring with $1 million is a realistic goal. You most likely won’t be flying private or have a butler, but retiring with $1 million means you can live comfortably (especially if you follow the 4% rule, which suggests withdrawing no more than 4% of your nest egg each year to maintain the principle, if you factor in interest rates and inflation).

So how can you actually save a million dollars? Discipline and planning will help you pave the way to seven figures by retirement. Here are 8 tips to help get you there:

1. Save early

Let’s say you’re 25, you have no real savings, your annual earned income is $40,000, and you plan to retire in 40 years. In order to retire with $1 million, you must save $502.14 each month for 40 years at a 6% rate of return.

Now let’s say you wait until you’re 45 to start saving (maybe paying off debt has held you back), and at this point you have no real savings, your annual earned income is $72,000, and you plan to retire in 20 years. In order to retire with $1 million, you must save $2164.31 each month at a 6% rate of return.

What to take away from this: It’s never too late to start saving, however, building wealth later in life or in the last decade before you retire can be really hard. To live well when you’re old means you should start to save while you’re young. Most millionaires in retirement that I know developed good spending, saving, and investing habits when they were young. Also, starting earlier gives your money more time to grow through compounding interest. Saving thousands a month right now may seem (or be) impossible, but you’re better tp start saving something.

2. Pay yourself regularly

Setting up automatic withdrawals (or “payments to yourself” as I like to look at them) from your checking account to your savings (or RRSP) is a great way to build wealth. It may be an adjustment at first (since you’re used to having that “extra” income), but you’ll get used to it pretty fast. You’ll also feel great knowing you haven’t dipped into cash you “should be” saving, and soon enough you won’t even miss the money.

What to take away from this: You’re doing something really good for yourself (and future you) by setting up automatic payments! Saving should be habitual and easy, so don’t make it painful or harder than it has to be.

3. Live within your means

This one shouldn’t come as a surprise to you! I’ve talked about living within your means before, and how you should avoid the pressure to spend and keeping up with the Joneses.

To know if you’re living above your means, answer this one question: do you carry a credit card balance that you’re having trouble paying off in full? If you answered yes, please read on.

You don’t need the biggest home or newest car (and anyone who makes you feel that way need not be in your life). Simply establish a comfortable standard of living you can maintain. Save at least 10% of your paycheque and save your bonuses (and raises) instead of spending them. If you live within your means you won’t need to dip into your reserve funds, and you can actually watch your savings grow.

What to take away from this: Earn more money, or spend less of what you earn (the latter is much easier to do).

4. Manage debt

Manage-Debt

Credit cards, lines of credit, loans, and any other debt you can think of should be managed and paid off ASAP, otherwise you risk throwing away thousands of dollars in interest each year. Even if you have to stop saving for a year or two, do it!

Oh, and maybe before you lay down the plastic again, ask yourself if you have enough cash in your checking account to cover the purchase. If the answer is no, ask yourself why you’re spending money you don’t have.

What to take away from this: Pay off your debt as quickly as possible (high interest debt first) and be responsible with your credit card(s).

5. Don’t splurge too soon

While a home may appreciate in value and help you eventually build wealth, a car depreciates the second you take it out of the lot, so consider where you’re making your big purchases. If you can afford the monthly payments on your leased Audi, great! But, if your monthly car payments are higher than your monthly RRSP contributions (or other savings), you need to reassess what you’re doing.

A new job or pay increase can be exciting and trigger a desire to upgrade, but rather than going out and buying the most expensive sports car in the lot, or the biggest house on the block (hello, house poor!) consider an option that’s somewhere between what you have now and what your dream is.

What to take away from this: Splurging too soon may throw you into debt you don’t want to be in. Also, buying top-of-the-line items right away leaves little to look forward to the next time you make a similar purchase. Spend your money thoughtfully.

6. Be frugal

Being frugal doesn’t mean you’re cheap – there is a difference! Prioritize your spending so you can have more of the things or experiences you really want. Let’s say it’s your partner’s birthday. A frugal person would probably have made dinner reservations, since it’s an occasion to celebrate. A cheap person won’t make reservations and may not even make dinner at home.

Indulging is okay; we all need it at times. But affordable indulgences are what you should be after (example: barbecue a surf n’ turf dinner at home instead of going to a pricey steakhouse). Make sure you’re spending within the lines.

What to take away from this: Understand that paying more doesn’t necessarily mean you’re getting better value.

7. Invest 

Invest

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen

According to a study by Statistics Canada, 31% of those surveyed betweem ages 45 and 60 said their financial preparations for retirement were insufficient. Further, a study by RBC revealed 56% of non-retired Canadians were worried they wouldn’t be able to enjoy the life in which they are currently accustomed to.

Investing is one of the most powerful tools to grow your wealth. Putting all your savings into a bank account that returns 1% is not the way to grow your wealth quickly. Investing your money provides larger returns and means you could have multiple income sources, helping you rest easier in retirement.

Make sure to watch out for high and hidden fees, as they can eat away at your investments’ potential growth. Plenty of low-cost solutions for investors are popping up, and fee based advisors, like some robo-advisors, can offer unbiased investment advice, as well as help you set realistic financial goals that match your life goals.

What to take away from this: Put your money to work for you, and you eventually won’t have to work so hard for it.

8. Re-evaluate

Life changes, so don’t expect everything to go according to plan. It’s easy to say you’ll save 10% or 15% of each paycheque, but the reality is, it’s not so easy!

Inflation, income changes, emergencies, employment changes, life expectancy, and priorities (ever had a baby? It’s expensive, and wonderful!) in general can affect our financial plans. When it comes to saving, it’s always better to save more than to be sorry you didn’t.

What to take away from this: Stick to the fundamentals, and adapt as your life changes.

Retiring with $1 million doesn’t have to be a dream if you plan for it. Use my tips as guidance, and you could make your dream a reality.

 

Try out this Million Dollar Savings Calculator to see how much you should start saving each month to retire as a millionaire.

This article was written by Randy Cass, and was originally published here on June 8, 2016.

What you Need to Know About the Latest Mortgage Rule Changes

What you Need to Know About the Latest Mortgage Rule Changes

If you’ve tuned into the news today, you’ve probably heard that there are new mortgage rules coming into effect on January 1st. 2018. Over the next week you’ll most likely hear a lot of commentary on whether these rules are good, bad, necessary, or unnecessary. And no doubt someone somewhere will come to the conclusion that no one will ever get a mortgage again, and that the housing market in Canada is going to come crashing down around us. Please remember that it’s the media’s job to write headlines and attract eyes, so they tend to sensationalize everything. Take what you hear with a grain of salt. Mortgages will still be written, and houses will still be bought.

At the end of the day, these new rules (outlined below) will come into play, and there’s nothing we can do to change the government’s mind. So how do we respond? Well… as it becomes increasingly difficult to qualify for a mortgage, your goal should be to work with a mortgage professional that gives you more choices. Instead of working with a single institution; having access to a single line of mortgage products, when you work with a mortgage broker, you have access to many different lenders, with a wide variety of choices.

As mortgage rules tighten, your goal should be to find as much flexibility as possible, you do this by working with a mortgage broker. So if you have any questions about your mortgage, please don’t hesitate to contact me anytime at 416.945.9123 or by email at mat@fugeremortgage.ca , I’d love to have a conversation with you.

Okay, so on to the changes… the biggest change to the rules surrounding mortgage qualification is that a requirement to stress test each mortgage will be now applied to all borrowers, instead of just borrowers who have less than a 20% downpayment. Qualification for all mortgages will now be made at a minimum qualifying rate which is the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%. 

OSFI (The Office of the Superintendent of Financial Institutions) released their final version of their new guidelines for the mortgage industry. Below is the news release from OSFI. called: OSFI is reinforcing a strong and prudent regulatory regime for residential mortgage underwriting

News Release

For Immediate Release

OTTAWA – October 17, 2017 – Office of the Superintendent of Financial Institutions Canada

Today the Office of the Superintendent of Financial Institutions Canada (OSFI) published the final version of Guideline B-20 − Residential Mortgage Underwriting Practices and Procedures. The revised Guideline, which comes into effect on January 1, 2018, applies to all federally regulated financial institutions.

The changes to Guideline B-20 reinforce OSFI’s expectation that federally regulated mortgage lenders remain vigilant in their mortgage underwriting practices. The final Guideline focuses on the minimum qualifying rate for uninsured mortgages, expectations around loan-to-value (LTV) frameworks and limits, and restrictions to transactions designed to circumvent those LTV limits.

OSFI is setting a new minimum qualifying rate, or “stress test,” for uninsured mortgages.

  • Guideline B-20 now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%.

OSFI is requiring lenders to enhance their loan-to-value (LTV) measurement and limits so they will be dynamic and responsive to risk.

  • Under the final Guideline, federally regulated financial institutions must establish and adhere to appropriate LTV ratio limits that are reflective of risk and are updated as housing markets and the economic environment evolve.

OSFI is placing restrictions on certain lending arrangements that are designed, or appear designed to circumvent LTV limits.

  • A federally regulated financial institution is prohibited from arranging with another lender a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law.

Quote

“These revisions to Guideline B-20 reinforce a strong and prudent regulatory regime for residential mortgage underwriting in Canada,” said Superintendent Jeremy Rudin.

Quick Facts

  • On July 7, 2017, OSFI published draft revisions to Guideline B-20 – Residential Mortgage Underwriting Practices and Procedures. The consultation period ended on August 17, 2017.
  • OSFI received more than 200 submissions from federally regulated financial institutions, financial industry associations, other organizations active in the mortgage market, as well as the general public.
  • The cover letter includes an unattributed summary of the comments and an explanation of how these issues were dealt with in the final Guideline B-20.
  • Following publication of Guideline B-20 OSFI plans to assess Guideline B-21 − Residential Mortgage Insurance Underwriting Practices and Procedures for consequential amendments.

Associated Links

About OSFI

The Office of the Superintendent of Financial Institutions Canada (OSFI) is an independent agency of the Government of Canada, established in 1987 to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.

Mortgage Documentation, Plan Ahead!

Mortgage Documentation, Plan Ahead!

Collecting the right documentation to prove you are a worthy candidate to borrow a lot of money to buy a property can be an arduous task. The most recent government rule changes and tightening of mortgage qualification isn’t making things easier. If you seem to think that there is no end to the documents lenders want to see before funding a mortgage, you’re right, they ask for a lot. But the truth is, that’s just the way it is now, borrowing money isn’t an easy process.

As an example, if you’re self-employed, using bonus income, overtime, shift differential, working two jobs, receiving isolation pay, or have income that isn’t all that straight forward, there is a chance you will have to provide two years worth of your Notice of Assessments to verify your income. If you don’t have a copy of your NOAs handy, qualifying for a mortgage is going to take a little more time for you. Here’s why:

Up until very recently, accessing your NOA online was a simple process, you could pay a nominal fee to a reputable online company, and they could access your tax information from CRA and provide you with the documentation necessary to prove your income. However the Canada Revenue Agency has just changed the use of the form T1013 and has stared that it can no longer be used to access information solely for income verification. So if you are unable to find your NOAs, and you don’t have a My Account with CRA, it could take up to 4 weeks to gain access to the necessary documentation to substantiate your mortgage application.

Now, if you are thinking to yourself, “this doesn’t affect me, I can find my NOA”, great, but you’re missing the point. The truth is, in today’s mortgage marketplace, things are changing at such a rapid pace, the only good way to stay on top of things is to plan ahead. There are more exceptions than rules. Don’t simply rely on what you think you know about the process, talk to your mortgage professional. If it’s not the NOA, it will be something else. Collecting the appropriate documentation is taking more time than ever as lenders are requiring more documentation than ever. So if you’re serious about the process, you will want to do everything you can to make it a success. This requires a great deal of planning.

Here are some situations you might find yourself in, and what to do when you’re there.

  • If you are looking to buy your first home, and you don’t know where to start, or have never been through the process, you should be in touch with your mortgage professional up to a year in advance. Seriously, sometimes it takes that long to get yourself into a place where you will qualify for a mortgage.
  • If you have a plan in place, and want to start looking at properties, the first thing to do is contact your mortgage professional and get a pre-approval in place. From there, you will want to collect all your documents, so that there are no surprises. Do this before you ever look at a property.
  • If you are have been considering a refinance to your exiting mortgage, any time is a good time to contact your broker for professional advice.
  • Six months before your existing mortgage renews is a great time to reach out and discuss your mortgage options with your mortgage professional.

So the moral of the story is: It can’t be stressed enough, if you are considering your mortgage options, it’s in your best interest to plan ahead by discussing your financial situation with a mortgage professional, this will allow you enough time to get all the documentation together, and in turn, allow you the best chance at getting the mortgage you want.

If you would like to talk about your financial situation, and your mortgage options, please contact me anytime at 416.945.9123 or by email at mat@fugeremortgage.ca, I’d love to work with you.

Spousal Buyout Mortgage?

Spousal Buyout Mortgage?

If you happen to be going through, or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property in order to buyout your ex-spouse.

For most couples, their property is their largest asset and where the majority of their equity has been saved. In the case of a separation, it is possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program.

Here are some common questions about the spousal buyout program:

  • Is a finalized separation agreement required?

Yes. In order to qualify, you will be required to provide the lender with a copy of the signed separation agreement. The details of asset allocation must be clearly outlined.

  • Can the net proceeds be used for home renovations or to pay out loans? 

No. The net proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly agreed upon in the finalized separation agreement.

  • What is the maximum amount that can be withdrawn?

The maximum equity that can be withdrawn is the amount agreed upon in the separation agreement to buy out the other owner’s share of property and/or to retire joint debts (if any), not to exceed 95% loan to value (LTV).

  • What is the maximum permitted LTV?

Max. LTV is the lesser of 95% or Remaining Mortgage + Equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV). The property must be the primary owner occupied residence.

  • Do all parties have to be on title?

Yes. All parties to the transaction have to be current registered owners on title. Solicitor is required to do a search of title to confirm.

  • Do the parties have to be a married or common law couple?

No. The current owners can be friends or siblings. This is considered on exception with insurer approval. In this case, as there won’t be a separation agreement, there is a standard clause that can be included in the purchase contract that outlines the buyout.

  • Is a full appraisal required?

Yes. When considering this type of a mortgage, it is similar to a private sale and a physical appraisal of the property is necessary.

If you have any questions about how a spousal buyout mortgage works, please contact me anytime at 416.945.9123 or by email at mat@fugeremortgage.ca . Be assured that our communication will be held in the strictest of confidence.

Printing Imagination (and Homes!)

Printing Imagination (and Homes!)

A child’s imagination is certainly something to behold. From pillow forts that double as outlying starbases, to walks in the forest that double as adventures travelling up and over the world’s tallest peaks, this gift that children possess- that of finding joy (not to mention awe and wonder) in the everyday is truly a thing of beauty. And, for a vast number of today’s children, one such imaginative outlet continues to be that of the lego brick; and why not?! These colourful shapes can turn the dullest of afternoons into an amateur engineer’s dream; vast worlds waiting to be created out of the simplest of shapes and forms.

On the other side of this creative coin (the adult side) sits the classic printer. From dot matrix, to inkjet, to laser, this technology has proved to be a complete game changer. The printer’s functions are incredibly useful, matched in practicality only by it’s complete and utter lack of “sleekness” and “sex appeal”. The printer is a boring machine. What it does is boring, its appearance (a gray box) is boring, and what it represents: endless cubicles, not unlike those in the cult classic film, Office Space, is boring; spitting out its’ “T.P.S reports”, until that fateful moment when the world is put on hold by some sort of “PC letter load” issue, or, worse yet, the dreaded paper jam.

But…

What if this incredibly useful (albeit, horribly yawn inducing) printer technology could somehow tap into the aforementioned imagination station that is the Lego brick? What if technological innovation could catch up to this childlike sense of awe and wonder? What if we could do things with the printer that would cause our young selves to flip with excitement; adult sized lego for the real world kinda stuff? Well, welcome to 2016.

3D Printing House

 

The advent of 3D printing is well over a decade removed from us now (in fact, the first patent application for what would become this sort of techno advancement was filed way back in 1980). However, what was once considered very high on the novelty scale is proving, in the 21st century, to be a legitimate option for various industrial, construction (and humanitarian) projects moving forward, one of which is printing houses.

Yes, you read that correctly, printing houses; either by printing large pieces to be assembled like lego bricks, or by printing the whole thing at once; solid state.

Now, aside from the fact that this is an incredible feat of modern technology and innovation, let’s take a moment to ponder (some of) the potential benefits of printer technology as it relates to building our future homes, storefronts and office buildings:

Sustainable Housing/Materials

Of the groups doing this sort of research and design, there are a number who have developed, or are in the midst of developing large scale printers designed to fabricate homes out of the most basic of materials; everything from concrete, to clay, to, well…dirt. The italian based engineering company WASP, arguably the best example (currently) of this sector of the market, is betting on this technology and it’s ability to change the way we, as an interconnected global network, house the nations.

CMHC Housing Observer 3D Printing

In a time when an ever increasing segment of society believes that proper housing should be a right and not a privilege, and in a world where variables such as human conflict and nature’s fury can wipe out established neighbourhoods in the blink of an eye, technology’s ability to speedily erect living spaces out of (literally) mounds of dirt is exciting, to say the least.

Cost

Aside from the cost of building and transporting these large printers (which, at this point is substantial), the cost of building the home is limited: fewer labourers, fewer supplies to be shipped and stored, and the use of local, sustainable materials could lead to significant savings.

Design Intricacies

Current construction/design engineering will soon be limited when compared to future computer based applications which are, as of this writing, being developed and tested. This is the power of technology at work. This is exciting.

Caveat

Now, it should be noted, at this point, that this field is still in its infancy. So there remains much to learn, and much to be done. Additionally, there are naysayers who remain firm in their position that, “this sort of fantasy will never become a reality”. To this we say, “it may be hard to be optimistic, to open up your imagination as you once did; but please try…just this once, for the rest of us.” Printing houses. Seriously cool stuff.

Can I Give Someone The Downpayment to Buy My House?

Can I Give Someone The Downpayment to Buy My House?

  • By mathieufugere@gmail.com
  • September 21, 2017
  • Blog,Mortgage

Although it might not always be this straightforward, the question “Can I give someone the downpayment to buy my house?” presents itself in many different ways. And the answer to all of them is no, well… except in one circumstance, but we will get to that later. Here are a few scenarios played out.

“I am selling my house on ComFree and I have someone who is interested in purchasing my property, but they don’t quite have the full downpayment, can I give them part of the downpayment to help them out? I REALLY need to sell my house! Does the bank really care where the downpayment comes from?”

Let’s establish why the lender cares about where the downpayment comes from, there are 3 reasons.

Firstly by law, they have to. In order to prevent money laundering, lenders have to prove the source of the downpayment on the purchase of a home. Acceptable forms of downpayment are from own resources, borrowed (through an insured program called the FlexDown), or gifted from an immediate family member. To prove the funds are own resources, 90 days bank statements are required indicating the money has been in the account for 90 days or to show an accumulation of funds through payroll deposits.

Secondly, the lender cares about the source of the downpayment because it indicates the buyer is financially qualified to purchase the home. Obviously a downpayment from own resources is best, as it shows that the buyer has positive cash flow, is able to save money and manages their finances in a way that they will most likely make their mortgage payments on time. The bigger the downpayment the better (as far as the lender is concerned) because there is a direct correlation between how much money someone has as equity in a property to the likelihood they will/won’t default on their mortgage. To break that down… the more skin you have in the game, the less likely you are to walk away.

Thirdly and most important to this scenario, the downpayment establishes the loan to value ratio. Now, the loan to value ratio or LTV is the percentage of the property’s value compared to the mortgage amount. In Canada, a lender cannot lend more than 95% of a property’s value, or said in another way they can’t lend higher than a 95% LTV. This means that if someone is buying a home for $400k, the lender can lend $380k, and the buyer is responsible to come up with 5% or $20k in this situation.

So how does the source of the downpayment impact LTV?

Great question, and to answer this, we have to look at how a property’s value is established. Although we could go into a lot more detail here, very simply put, something is worth what someone is willing to pay for it and what someone is willing to sell it for. Of course within reason, having no external factors coming into play and when you are dealing with real estate, it’s usually compared to what people have agreed to in the past on similar properties. So combining our scenarios, if you are selling your house for $400k and you give the $20k downpayment to the buyer, the actual sale price (the amount you agreed to sell for, and the amount the buyer pays) is actually $380k not $400k. So to take the purchase contract in to the lender and request a mortgage for $380k would actually be a 100% LTV and financing will be declined because the minimum LTV in Canada is 95%.

Now, despite how people attempt to rationalize or manoeuvre wording and money, its all smoke and mirrors, if the buyer isn’t coming up with the money for the downpayment independent of the seller, it impacts the LTV and financing will not be completed. Here are variations of this scenario played out in different ways.

“Can I increase the sale price of the property I’m selling and “gift” the downpayment to the buyer so they have a bigger downpayment and it looks more favourable to the lender?” 

Nope, again, this is a trick to try and manipulate the LTV.

“If the buyer wants my house really badly, but doesn’t have the full downpayment, can they borrow the money from somewhere and then we provide them with a cashback at closing to repay the debt?”

No. ANY cash back from the seller to the buyer when the purchase transaction closes is a no go. Just like on the front end of the purchase, any money refunded or given back on closing impacts the LTV and it would impact the mortgage lenders decision to lend.

“But what if the lender doesn’t know about it?”

This is called fraud. Having conditions to the sale of a property that are not disclosed to the lender is fraud. There is no 2 ways about it.

“You mentioned at the start of this article that there is one way to give someone the downpayment to buy a house, tell me more!”

As mentioned, there are 3 acceptable sources for a downpayment, one of them being a gift from an immediate family member. So if you are selling your property to an immediate family member, you are able to gift the equity to them on the purchase contract. You would write that condition on the actual purchase contract, that the downpayment is coming by way of a gift. You would then complete a gift letter indicating that the downpayment is a true gift and has no schedule for repayment.

So there you have it. If you are selling a house to someone you are not directly related to, you are not able to give them the money for your downpayment. Alternatively, if you are buying a house from someone you are not directly related to, you are not able to take money from them for the downpayment. If anyone tells you otherwise, they are misinformed. And if anyone ever presents a way to “get around the rules” regardless of how simple it sounds, it’s probably fraud.

If you have any questions about this or anything else mortgage related, I would love to talk with you!

Please contact me anytime at 416.945.9123 or by email at mat@fugeremortgage.ca!

10 Tested, Proven Ways to Become Less Productive

10 Tested, Proven Ways to Become Less Productive

Let’s face it: while there is an abundance of articles on how to become more productive, there aren’t a lot on becoming less productive.

With that in mind, I decided to put this article together. While it’s helpful to focus on how to get more done every day, it can also be helpful to consider what may be holding you back.

Here are 10 surefire ways to become less productive every day.

 

Spend more time planning than doing

Some planning is essential. It’s pretty difficult to become more productive when you don’t step back to consider what you need to become more productive at doing. But past a certain point, the return on planning what you’re going to do with your time diminishes, and your productivity begins to suffer. Every minute you spend planning what to work on is one minute you don’t actually do work.

Multitask

It’s difficult to overstate this point: Multitasking is one of the absolute worst things you can do for your productivity. The fewer things you give your attention to in the moment, the more productive you become. If you want to become less productive, multitasking is a no-brainer.

Work on autopilot

 When you try to do too much at once, or you don’t plan your time well, you work on autopilot. This prevents you from working intentionally on what’s important. If you want to become less productive, don’t do any planning when you notice that you’re working on autopilot. Instead…

Work faster

 Working slower is for suckers. It gives you more space to think about your work, and to work smarter. If you want to become less productive, work as fast as possible—while multitasking, if you have the flexibility!

Take fewer breaks

Breaks—whether throughout the day, or a longer vacation—let you recharge. They allow your mind to wander so you can come up with better ideas and approach your work with more creativity. When you don’t step back from your work, your mind will take breaks for you. Needless to say, if you want to accomplish less each day, take as few of them as possible.

Pack your schedule

To the gills, if you can. If you want to become less productive, it’s crucial that you leave as little breathing room as possible for emergencies that may come up throughout the day. You don’t want any time to dive into the bigger projects you’re working on either. Make sure you agree to as many meetings as possible, and start a few of your own to “touch base” on all of the projects you’re working on!

Forget working out

Physical activity helps us destress, which is especially important today, when we face more stressors in our daily lives than ever before. When we don’t get enough physical activity, we are more likely to feel fatigued and burnt out. To become less productive, get as little physical activity as possible. And the instant you feel fatigued, don’t forget to load up on caffeine!

Get fewer than 8 hours of sleep

Sleep affects our mental performance in pretty much every measurable way. When we get less than 7.5 hours of it, our energy, focus, and productivity suffer. Sleep is one of the best ways to exchange your time for energy, which is precisely why you should get less than 8 hours of it if you want to become less productive.

Forget about nutrition

 Energy is the fuel that we burn over the course of the day to get stuff done. Not putting proper fuel into our body can shatter our energy and productivity. Processed foods that are ultra-high in sugar, salt, and fat can cause our energy and productivity to rollercoaster over the course of the day. But they’re also delicious, so don’t be afraid to crush a big bag of syrup-smothered waffles before work in the morning.

Cut yourself off from as many people as possible

Social interaction is also for suckers. Sure, it has been shown to make you happier, and more motivated and engaged than pretty much anything else. But you feel less productive while you’re doing it!

If you want to become less productive every day, make sure you give these things a try.

 
** It’s worth making one final point: There’s a right and a wrong way to become less productive. Intentionality is impossible to separate from productivity. When we work and live intentionally, we’re the most productive, even if that means setting an intention to do absolutely nothing so we can relax and recharge. You’re the most productive when you achieve what you intend to, and when your intentions are connected with what you find valuable and meaningful.
 
 
This post was written by Chris Bailey, from A Life of Productivity. It was originally published here.
Bank of Canada Rate Announcement Sept 6th, 2017

Bank of Canada Rate Announcement Sept 6th, 2017

The following is the Bank of Canada rate announcement released this morning, if you have any questions about what this rate increase means for you and your mortgage, please don’t hesitate to contact me anytime at 416.945.9123 or by email at mat@fugeremortgage.ca. If you’re a fixed rate mortgage holder, this change doesn’t impact you, however if you are a variable rate mortgage holder, you can expect to see an increase in bank prime, most likely by a 1/4 per cent.

The Bank of Canada is raising its target for the overnight rate to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

Recent economic data have been stronger than expected, supporting the Bank’s view that growth in Canada is becoming more broadly-based and self-sustaining. Consumer spending remains robust, underpinned by continued solid employment and income growth.  There has also been more widespread strength in business investment and in exports. Meanwhile, the housing sector appears to be cooling in some markets in response to recent changes in tax and housing finance policies. The Bank continues to expect a moderation in the pace of economic growth in the second half of 2017, for the reasons described in the July Monetary Policy Report (MPR), but the level of GDP is now higher than the Bank had expected.

The global economic expansion is becoming more synchronous, as anticipated in July, with stronger-than-expected indicators of growth, including higher industrial commodity prices. However, significant geopolitical risks and uncertainties around international trade and fiscal policies remain, leading to a weaker US dollar against many major currencies. In this context, the Canadian dollar has appreciated, also reflecting the relative strength of Canada’s economy.

While inflation remains below the 2 per cent target, it has evolved largely as expected in July. There has been a slight increase in both total CPI and the Bank’s core measures of inflation, consistent with the dissipating negative impact of temporary price shocks and the absorption of economic slack. Nonetheless, there remains some excess capacity in Canada’s labour market, and wage and price pressures are still more subdued than historical relationships would suggest, as observed in some other advanced economies.

Given the stronger-than-expected economic performance, Governing Council judges that today’s removal of some of the considerable monetary policy stimulus in place is warranted. Future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as they inform the outlook for inflation. Particular focus will be given to the evolution of the economy’s potential, and to labour market conditions. Furthermore, given elevated household indebtedness, close attention will be paid to the sensitivity of the economy to higher interest rates.

Here are the announcements dates set out for the remainder of 2017 and the complete schedule for 2018.

  • October 25th 2017*
  • December 6th 2017
  • January 17th 2018*
  • March 7th 2018
  • April 18th 2018*
  • May 30th 2018
  • July 11th 2018*
  • September 5th 2018
  • October 24th 2018*
  • December 5th 2018

*Monetary Policy Report published

All rate announcements will be made at 10:00 (ET), and the Monetary Policy Report will continue to be published concurrently with the January, April, July and October rate announcements.

In the Middle of a 10 Year Term? You Have Options!

In the Middle of a 10 Year Term? You Have Options!

If you bought a house, or had a mortgage renew roughly five years ago, there’s a chance the struggling economy and the relatively low interest rate environment (at the time) influenced you to “play it safe” and lock in a mortgage term for the next ten years. Because, at the time, it seemed like interest rates couldn’t go any lower and the difference in the interest rate between the five year fixed term, and the ten year fixed was negligible. Five years extra security made a lot of sense.

Without the benefit of a crystal ball, this looked like a good decision. However, unfortunately as interest rates have dropped even further, you’re probably now stuck in a mortgage with a rate that is higher than what is currently being offered on the market. If you are second guessing your original decision. Don’t. You made a decision based on the information you had at the time, if rates would’ve gone up, you’d be in a great place now. But, as that isn’t the case, the best we can do is look for a silver lining, and here it is, did you know that there is a mandatory fine print clause in your ten year contract that might help you save money over the next five years?

After the first five years of a ten year term has been completed, the penalty to break the mortgage is three months interest, instead of the interest rate differential penalty. That’s a really big deal!

Penalty WordSwag

It doesn’t matter which lender you are with, this is actually a law in Canada, and not conditional upon the contract you signed with your lender. So, if the thought of an outrageous penalty has been keeping you from looking at all your options, you should really check out what is available on the market today.

Interest rates are really low, so low in fact that there’s a chance you can switch out of your ten year rate into another mortgage product at a lower rate and not only cover the cost of the three month interest penalty, but actually be further ahead only a couple years into your new term. The real goal is to save thousands of dollars by switching, and that is very possible!

As each person’s financial situation is different, rather than going through a hypothetical situation where we explain how this all works for hypothetical people, if you have made it this far, chances are this applies to you. You should really reach out and please contact me anytime at 416.945.9123 or by email at mat@fugeremortgage.ca to see about all your options, because you have options!.

There’s no cost for my services, so let’s see how much money you can save over the next five years!

If You’ve Ever Tried and Failed at Budgeting

If You’ve Ever Tried and Failed at Budgeting

This article was written by Sandi Martin from Spring Personal Finance and was originally published on Spring the Blog July 21st 2015, but it was so good we wanted to share it on our blog as well!

If you’ve ever tried and failed at budgeting, or if you’ve never tried at all because it sounds so hard and boring, this post is for you. Those of you with a budgeting system that works and that you possibly even love and want to have babies with are excused for the day. Those of you who are convinced that budgeting doesn’t work are kindly asked to leave the room and do a little more thinking on that subject.

Okay, now that it’s just us, let me tell you a secret: I’ve tried (and failed) at budgeting so many times that it would be embarrassing if I sincerely thought that it was easy (it isn’t) and everyone else knew how to do it (they don’t). The truth is, budgeting is hard and boring. Anyone who tells you different has a book to sell.

But it’s still worth doing. 

Budgeting is worth doing if you have limited income and lots of commitments. It’s worth doing if you spend more than you make and have been for years. It’s worth doing if you’re naturally frugal, if you have joint accounts, if your income is hard to predict, or if you have more money than God.

The cloud of tv shows and books and blog posts (probably even this one) that swirls around the concept of budgeting obscures its value, which is:

  • To know how much we have available to spend right now, given the commitments we’ve made for the immediate future
  • To set aside money we don’t need now for things we know or think we’ll need in the future
  • To base our future spending decisions on a documented (rather than estimated) past
  • To know if a sudden or contemplated change to our income or expenses will be sustainable over the long term, and whether we should adjust our spending before it becomes a crisis

And finding a budgeting system that works for you, whatever your circumstances, is a matter of deciding why you’re budgeting in the first place…and only then deciding on a system to do it.

Starting with a system without thinking about what it has to do for you is one of the two reasons people fail at budgeting. (The other reason is that they’re using too many categories, btw.)

For example: You’re self-employed, with irregular income, joint expenses with your spouse, and a little bit of debt you’d like to get out from under. A particularly painful month makes it very clear that you’ve got to do something about your money, so you sign up for Mint. You enthusiastically set up your accounts and create a budget, logging in on your cell phone throughout the day and categorizing transactions enthusiastically…until your bank balance doesn’t quite match your Mint balance, and you realize that you forgot to budget enough for food but budgeted too much for shoes, and you were sick that week so you stopped checking whether Mint was categorizing your transactions properly, and now you’ve finally found a good deal on an almost-new freezer that you’ve been looking for for months on Kijiji and are flipping between your bank account and your Mint account trying to figure out if you can afford to take out the $400 to pay for it without throwing a major wrench into the next few weeks before your clients pay you, so…you think you’ve failed at budgeting.

Or: You and your partner work full-time at great-paying jobs, but have limited free time to do all of the million and one things you need and/or want to do, like spend time with your kids and cook at home. Every once in a while you think “we make lots of money…shouldn’t we have more to show for it?”, so one day you sign up for YNAB, take a few evenings to watch the videos, and begin assigning a job to every dollar you earn. You faithfully enter your transactions for a week, but realize your partner hasn’t been, and – given the punishing deadlines at work – probably won’t. You know you’re really supposed to enter those purchases manually, and feel kind of guilty every time you download them from the bank, and then your team starts a really exciting project, your kids finish the school year, and it’s not like you can’t pay off your credit card bill every month, and – besides – you make lots of money, so…you think you’ve failed at budgeting.

You aren’t wrong to get discouraged (although in each case you could conceivably have succeeded by dint of sheer bullheadedness). You’re just using a budgeting system not particularly well-suited for your circumstances. You’re spending your time solving a problem of lesser significance than your real problem. You’re using a rolled-up newspaper to fight off a bear, or a bazooka to get that damned chipmunk off your lawn. 

Chipmunk

Those people that we dismissed earlier? The ones who were in love with their budgeting system? They’re not us. What works for someone willing to helpfully share their opinion on reddit might not work for you for any number of very legitimate reasons.

So here’s what I propose: before you read another budgeting book, or test-drive another system, think about the most important problem you’re trying to solve. Is it really important to know how much you can spend now, and of lesser importance that you know how you spent last month? Are you trying to plan for the future and need to know what your normal and comfortable spending patterns are, but don’t have any real reason to change them?

(Some people can’t even answer this question right away. If you genuinely don’t know where to start, don’t sweat it. You’ll get there.)

I’ve failed at budgeting in the past. Many long years of trial and error, punctuated by brief bursts of book-inspired inspiration and longer bursts of discouragement have taught me this: the books aren’t necessarily wrong, anybody can make any budget system work (eventually), and chipmunks can be scared off with bazookas, but budgeting works best if you know why you’re doing it in the first place, and only then choose a tool that’s appropriate for the task.