Thursday, April 30, 2009

What's happening to America's middle class?

A really interesting BBC broadcast on the changing 'typical America'.

"Stephen Smith finds out how the city of Muncie in Indiana reflects the impact of the economic crisis on the American middle class.

In 1929, the Rockefeller Institute published Middletown: A Study in Modern American Culture, a scientific study of a 'typical American city' which examined church, school, family and work in Muncie. The book was an instant hit and is still in print. It launched Muncie's reputation as the most widely studied small town in the world.

Today it is a rust-belt city grappling with de-industrialisation and deepening recession.

A co-production with American RadioWorks for BBC Radio 4."

Listen Here

What a week!

The week before Golden Week is always so busy. The sentiment is do everything possible before the holiday so you can relax, with a settled mind.

I've called banks, written articles, tweeted, blogged (not so much) calculated, estimated and networked. I can see why Golden Week is called Golden! It will certainly be enjoyable to relax.

What better way to drive yourself than with the carrot than the stick.

Tuesday, April 28, 2009

Skip-a-payment for Canadian mortgages

I spent the morning contacting banks to see if our mortgages are eligible for the skip-a-mortgage program. Some banks offer it as a new service to customers while others see it as a privilege that must be carefully reviewed and only granted in financial straights.

As a investor it's crucial to always be proactive with your property. When vacancy rates are high the most important thing to do is keep your cash reserves high and maintain the staying power fund of your property.

Here is a short list of banks and their policy on deferred payments:

RBC - just enrol in the "Skip-a-mortgage" payment program
TD - in times of financial hardship and under branch review
First National - offers many options but not skip a payment
Optimum Canwest - couldn't find information
Scotiabank - up to four skipped payments allowed
MCAP - available with $75 service fee

If you bank is listed here check their website or contact your branch for your mortgages privileges.

Sunday, April 26, 2009

Interest rates are amazing

If now isn't the time to buy real estate I don't know when is. One of my variable mortgages is down to 1.9%. We've also heard of a colleague getting 3.5% on a commercial loan. The Bank of Canada has indicated that rates will stay this low until the first or second quarter of 2010.

We've got soft prices and low interest rates which seems like a sale to me. As long as it's backed by economic fundamentals it doesn't mean go and buy in Windsor with it's auto companies shutting down or Williams Lake with the sawmills closing.

Thursday, April 23, 2009

Could your trashcan solve the energy crisis?

I know some people who have enough rubbish in their car to fuel any roadtrip. I find it hard to believe that there are opponents to this, I mean what could be more perfect burning trash for clean energy. When will people be satisfied?

Tuesday, April 21, 2009

Ontario Residential Tenancy Act is lame

Ontario investors saw their 150-year-old investment property trashed by unscrupulous tenants. Animal carcasses, toilets rigged to run continuously, a mountain of garbage and an incredible mess are the legacy left behind. Unfortunately, it took 14 months to get the tenants out, by that time they had all but destroyed the beautifully renovated and furnished property.

Lucky for us Alberta has this country's most owner-friend tenancy act. You can get good-for-nothing tenants out in much more quickly than 14 months.

The thing to learn from this is to diligently screen your tenants and keep checking up on the property. Do whatever it takes, within the law, but make sure you or your property manager gets into the house every once in a while to make sure there is nothing going awry.

What a shame.

Monday, April 20, 2009

Canadian Business Magazine Podcast

Scott Steele interviews the magazine's features editor Andy Holloway. Generally they're saying it is a good time to buy if you think for the long term. Andy suggests that if you buy now then be prepared for the prices to drop over the next 6 months. This may be true in some areas but not necessarily all. It's a very generalized interview but the key points are true for any region.

Other points:
1. Houses are safer than stocks. Stocks have dropped about 43% and housing about 11%
2. Now is not the time to sell, unless you bought 10 years ago. (Long term is ok)
3. It's a good time to buy rates and prices are low.
4. Canada is not facing a sub-prime meltdown.
5. Some depreciation in commercial markets in Calgary an Toronto.
6. Real estate investing is based on simple economics - in- migration, growth, economic potential of a city. Edmonton has all three.

Saturday, April 18, 2009

Dos and Don'ts In Japan

I was just in an expat forum and someone was asking about the dos and don'ts in Japanese culture. I wrote this entry and thought, "Hey this could be a blog..."

If you have anything to add please do so!

I think that as a foreigner you are allowed to get away with a lot for a reasonable amount of time but if you are conscientious you will pick up what other people are doing.

In no particular order:

1. Take your shoes off when entering a house you will get slippers. To be really polite turn your shoes to face the door after taking them off.

2. When you enter a house say OJAMASHIMASU! I think it means "I'm being intrusive!" - for the life of me I can't remember what you say when you leave! I think it is OJAMASHIMASHITA which means "I was intrusive" but I'm not sure....

3. Do not wear slippers onto the tatami floor of the house

4. Change house slippers for toilet slippers - Don't wear toilet slippers out of the toilet!!!

5. Wait to eat at the dinner table everyone will say ITADAKIMASU (let's eat!) together then you can begin. At the end of the meal say "Gochisosamadeshita" which means "That was delicious!"

6. If you are a guest your drink will be continuously topped up by the host if you serve yourself it's not too bad but then you must pour someone else a drink. This works at drinking parties also.
7. Try not to be too loud out in public.

8.Don't stand your chopsticks in food it is reminiscent of the death ceremony.

9. Wipe you hand with the moist towelette before eating and fold it nicely to the side of your setting.

10. Don't lick your chopsticks.

11. When complimented seem shy/embarrased and say "No it's not so!" or "You are being kind!" It's rude to be egotistical or brag.

12.When you see someone in the morning say "Ohayogozaimasu"
afternoon "Konnichiwa" and evening "Kombanwa" before you go to sleep say "Oyasuminasai!

13. When someone gives you a gift give profuse thanks, next time you see them say thank you again. This works for apologies also.

14. Business cards/name cards mark your "rank". Accept the other business person's card with both hands and a slight bow, look at it and make comments about the style or remark on the position at a seated meeting leave the card in front of you until the end of the meeting. When you hand over your card do so with both hands and a slight bow. They will do the same with your card. Respect the other persons business card, don't pick your teeth with it, don't fold it and don't forget it.

15. If your chopsticks come in a paper sleeve when you are finished eating put them back in the sleeve and fold over the end then lay them on your plate.

That's just off the top of my head. For business there are many more complicated social mores to keep in mind. The way of entering an elevator, the seating arrangement in a car and the seating arrangement at a meeting are all very different from western perceptions.

Friday, April 17, 2009

Canada and Alberta Get Big Thumbs Up

Canada's natural resources are what the world needs.

"Despite its economic ills, Canada is the best place to ride out a worldwide recession, ....And the best place in Canada is Alberta.

"Compared to the ailing economies of nations such as the United States, Germany, France, Italy and Japan, Canada is faring well..."

"We've got a lot of problems in this country, but there's no country in the world that you want to be in to weather the economic storm (other) than in Canada," Warren Jestin Scotiabank's senior vice-president and chief economist Wednesday

Click Here To Read Full Article

Wednesday, April 15, 2009

Make your game plan for the long run

I hope that everyone celebrating Easter had a wonderful weekend. Spring seems to have blown in like a breath of fresh air and lifted spirits. We'll get some good news, then temper it with a bit of bad. I imagine that we'll ping-pong this way for another year or so before deciding that things will be ok and we can get on with a healthy economy.

I was speaking with a partner and good friend of mine last night who is based outside of Canada. He said, "So, how are things going to be in Alberta over the next few years - is Edmonton still the best place to be investing in?" I replied that there will be some ups and some downs, then the economy will start moving forward again and gain momentum.

He quipped, "I know that! - 10 years from now will this still be a good place to be invested based on the economy today?" My answer to that question is and was a resounding YES.

When traveling abroad, I'm often reminded how North American attitudes tend to be so focused on the now. For many a 5 year investment period can be such a longtime. My friend, a successful investor (he has a substantial Edmonton portfolio) isn't rocked by short fluctuations, but instead studies bigger cycles and longer blocks of time which he accredits as the building blocks of long-term wealth and security.

Spread out your investment game plan to encompass longer holdings mixed with a few shorter term investments that pay out in-between. This will create balance in a portfolio and should match anticipated lifestyle changes that are predictable, business expansion, kids graduation, retirement and so on. An added bonus of this planning structure is that it reduces stress during turbulent times.

Tuesday, April 14, 2009

Could your wallet really betray you?

This article from MSN money is fantastic. Basically the state of your wallet is the state of your finances on a very small scale. So, if it's stuffed with crumpled bills and receipts your head is in the sand but if your bills are orderly and you know how much is in there you have a pretty good control of your money.

It's not the first time I've heard this either, how you treat your money is how you TREAT your money. If you're disrespectful to it, leave it scattered around and generally aren't aware of it then you are probably trying to sabotage your finances or "don't care" about money. I say "don't care" because like it or not we all care about money.

Since I learned this principal I went from the crazy messy wallet to the organized wallet and wouldn't you know my finances improved dramatically?

Here are some good tips to slim down your wallet.

Monday, April 13, 2009

Does Fiction Become Reality?

This is a great article by the Edmonton Journal's Gary Lamphier. When the media is all over the place with one faction calling for the worst recession/depression Canada has ever seen to another saying we completely will not follow our southern neighbours you need someone to say, "Hey these are the facts"

It seems as though there is nothing more entrenched in the public's mind than Alberta is a boom and bust province. Well, what if it weren't?

Mr. Lamphier's point is that when your really crunch the numbers (as you always should) the headlines and the facts are two completely different things.
"..... most analysts expect energy prices to rebound 12 to 18 months from now. I see no reason to disagree with them, even if the U.S. economy continues to struggle.

Oilsands spending is also down. It's expected to total roughly $10 billion or so this year, about half the initial projections. A disaster? Hardly.

Just a few years ago, that would have qualified as a boom year. But memories are short, especially in the media.

Moreover, many new oilsands projects that have been recently delayed are likely to come back onstream once prices rebound, costs fall and duplicate projects are consolidated." Gary Lamphier Edmonton Journal

Sunday, April 12, 2009

Edmonton Alberta Market Update

Edmonton detached bungalows are down 11.2% in price compared to the first quarter of last year, two-storey homes down 12.6% and condos are down 13.8%.

Because Alberta was one of the first places to feel market corrections before the economic crisis could fully be appreciated, it's assumed that it will be one of the first places in Canada to stabilize. If the rest of Canada can expect their home prices to start to appreciate again in the first half of 2010, then Albertans can hope for a market upturn a little earlier than that.

As the supplies decline and people come out of a winter deep freeze, when buying interest is typically low, the market will see more activity and eventually rising prices.

Now is a good time to buy a home or investment property because you can take advantage of low interest rates and a wide selection of properties at lower prices.

Thursday, April 09, 2009

The Toilet Paper Entrepreneur - Reblogged

I don't usually go to this site but came across this fantastic post on The Toilet Paper Entrepreneur.

"7 Reasons Why The Recession Is Good For You" has some excellent reasons why spending less money, hanging out with family and friends, streamlining our businesses and eating home cooked meals MIGHT actually be good for you!

Read the blog HERE

Wednesday, April 08, 2009

Hanami Picnic

The weather in our area is beautiful. Most everywhere you can see flowers in bloom or starting to open. The most spectacular is the half kilometer, cherry tree lined street a short distance from our house.

It's one of the top three "hanami" areas in the city and never fails to produce a stunning display of blossoms.

Yesterday we had a great family picnic under the blossoms. Ronan attracted a lot of attention because there aren't so many western children in our area. Everyone stopped to comment on the little baby and how he seemed to be enjoying the cherry blossoms.

I picked up some of the petals and hope to press them in his baby book.

The weather was perfect and the blossoms are in full bloom; we couldn't have had a more perfect day.

Tuesday, April 07, 2009

The World and Your Backyard

Life in Fort McMurray has certainly slowed down since the oil prices dropped. Things haven't stopped though.

The city where there were never enough workers now has a chance to pick and choose rather than hire the first body that walks in. The infrastructure that couldn't house a population that tripled can now catch up and improve housing.

“When you take a population that has doubled and is on its way to tripling, every piece of infrastructure you can think of is still in a catch-up phase,” “This is a golden opportunity to get caught up to some of those needs and be better prepared.” Fort McMurray Mayor Melissa Blake

“Now is an opportunity for us to be more competitive,” “Because we are local, we don’t carry the living-out allowances, we don’t have the high costs of travel expenses. Our people come from the community.” Nicole Bourque-Bouchier, president of the Northeastern Alberta Aboriginal Business Association.
“I don’t think the growth will be anywhere as intense as it has been, but I don’t think it will subside,” “It’s a matter of keeping in mind what is going on around the world and what that means in our own back yard.” Fort McMurray Mayor Melissa Blake

Sunday, April 05, 2009

It's a Scam! Or is it?

Stocks bonds, mutual funds and GICs aren't so appealing anymore. So how can you invest your money and feel safe?

I read an article today on different types of investments offered to the public in the oil sands region. Specifically those that fall into the exempt market:

"The exempt market covers a wide range of investment opportunities, including hedge funds, but it generally applies to any security sold without a prospectus. When a company wants to raise capital by issuing bonds, stock or mutual funds, it must file with the provincial securities commission a prospectus: often a lengthy, legal document outlining detailed business activities of the business and the security it's selling. These publicly traded securities can only be sold by a dealer licensed to sell them." The Winnipeg Free Press

It was a pretty good one, pointing out the due diligence an investor should take before investing.

Our investments do not fall under the exempt market because they are not divided into shares and are a partnership investing into a property. We also share the profits AND the losses, very unusual in any investment.

Things to ask:
What is your expected return?
How's the deal going to be financed?
What's the track record of the management team?
How liquid is your investment?

Don't forget to definitely get independent legal advice, not your brother the divorce lawyer but a lawyer who specializes in investing.

Friday, April 03, 2009

Spring - Think. Change. Grow.

Spring is in the air. A new leaf, a blossom blooming and so on...

"The first day of spring was once the time for taking the young virgins into the fields, there in dalliance to set an example in fertility for nature to follow. Now we just set the clocks an hour ahead and change the oil in the crankcase." ~E.B.
White, "Hot Weather," One Man's Meat, 1944

Kaizen Kanji

Every 90 days we reevaluate our business plan and 4 key areas in which we aim to continue improving. Many companies and individuals can use the momentum of spring as an excuse to revisit their goals and make sure that they're on track. I talked about 'Kaizen' in an earlier newsletter and thought I'd touch on it again here as the timing seems right. Below is an excerpt from Wikipedia.

Kaizen is a daily activity, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work ("muri"), and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes.

People at all levels of an organization can participate in kaizen, from the CEO down, as well as external stakeholders when applicable. The format for kaizen can be individual, suggestion system, small group, or large group.

At Toyota, it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. This group is often guided through the kaizen process by a line supervisor; sometimes this is the line supervisor's key role.

While kaizen (at Toyota) usually delivers small improvements, the culture of continual aligned small improvements and standardization yields large results in the form of compound productivity improvement. Hence the English usage of "kaizen" can be: "continuous improvement" or "continual improvement."

Kaizen methodology includes making changes and monitoring results, then adjusting. Large-scale pre-planning and extensive project scheduling are replaced by smaller experiments, which can be rapidly adapted as new improvements are suggested.

When you're enjoying the warmer days remember that a welcome change to your business and lifestyle can be a breath of fresh-air.

Thursday, April 02, 2009

Canadian Newborn in Japan?

Yesterday I spent the whole day at my city hall. We all know how much fun that is. I didn't know this but if your baby is born in Japan he/she needs a visa just like you do.

Make sure you get it all dealt within 90 days because they are granted tourist visas at birth. Of course your child will probably not be deported by you may have to sign an apology or some extra documents.

Things you need to get a visa:

1. Most important you must register the baby at city hall with 14 days after the delivery date. By doing this you will get the birth certificate.
2. You need an Alien Registration card for the baby. I got it at the I registered the birth.
3. Your child needs a passport from your embassy. For Canadians a rush job takes 2 weeks.

Number 3 was hard for us because to get a Canadian passport for a child born abroad you need proof of citizenship for the parents. We both didn't have birth certificates so we had to order them from our respective provinces.

We used our lawyer Inoue-San and he made everything go smoothly as usual.

Luckily, Ronan was born months before the new bill passed limiting Canadian citizenship, that means that if his children are born abroad they will automatically be granted Canadian citizenship.

Wednesday, April 01, 2009

It's an Economic Speed Bump

The Conference Board of Canada says Edmonton's economy will shrink by 0.2% in 2009 the first decline in 20 years.

However, there is nothing to be alarmed about we are coming from some very hot times and the city needed a little cooling break. It's not a slump its a bump. A tiny bump.

"Some correction was required. The housing market was spectacularly hot, coming back down to more normal levels of activity if we want to call it that." "It's certainly not something I'd call a catastrophe, and we're going to look back on it in a few years can call it a pause, after a very strong period." Mario Lefebvre director of municipal studies for the conference board

The city will still see in-migration of close to 10,000 new residents, the economy will grow and the real estate market is going to see healthy normal activity from 2010.

So what do we have now? Time to refinance. Time to purchase properties that make cash flow. If you aren't purchasing then it's time to strengthen your portfolio and keep large reserves of cash.