Saturday, January 30, 2010


Hi Greg,

I went down to see the condos today.

What a great place! The condos are great, it has excellent facilities:
- roof top garden with 2 bbqs in the summer
- full equipped gym with hot tub and sauna
- party area with pool table
- massage therapist

Location is great, there are at least 3-4 pubs just outside, rail and bus is right next door, underground parking, 24 hour doorman, excellent security (cameras at all external doors).

Thanks again for pointing out this investment. I'm sure this will be a good one.


Tuesday, January 26, 2010

Planning and evaluating feasibility

I have spent a lot of time this month meeting with my clients about their 2010 planning. A simple question starts all of these meetings "What do you want to achieve this year?"

I am amazed at how most people have no answer to this. They know they need to save, they know they need to plan, but there is no end goal in site. If you have an RRSP, what is the purpose of this money? Why are you saving it? How much will you need? How do you know when you are at the amount you need?

I have found, with ever investment I make, I ask a simple question first - "What will I get out of this investment and how does this help me achieve my goal?"

My goals are simple, I want to build a passive income that will fund my life, plus a significant portion more. Every time I buy property or stocks, I have to evaluate how these items get me closer to my goal.

I do not buy on the assumption that something will go up in value. I am not interested in value, I buy based upon the cash flow the asset produces. In todays economy, assets are the new wealth, creating net worth is great, but if you are net worth heavy and cash poor, you are still poor in the short term.

My number one evaluation tool is cash on cash return. I want to know what money I am making and when. My 32 properties were all bought on a cash flow basis, my stock investments are bought on a dividend return. I do not invest in RRSPs anymore as they cannot help my cash flow, at best, they defer my taxes.

The simple solution to investing and staying on point is to do the following - look at each investment whether mutual fund, stock, real estate or fine goods - then evaluate if it gets you closer to your goals. If not, even though it could be a great opportunity, walk away and wait for something that accomplishes your goals.


A common question confronting me is TFSA v. RRSP. I think this is a complex question and would require knowledge of your personal situation. Everyone has different goals and dreams
they hope to accomplish, so this is usually a philosophical debate.

Personally, I am only investing in my TFSA, not my RRSP. The tax deduction would be great, but I think the benefit of lower tax is not offset by the lack of control you have over your money.

I invest for cash flow and an RRSP is not a cash flow investment, so it does not fit with my investment objectives, but again, not everyone's objectives are the same. I think it is necessary to sit down and reason through why you are investing in an RRSP and if it helps you reach your goals.

Features And Benefits Of A TFSA

• $5,000 in annual contribution room (indexed annually after 2009)
• Tax-free growth on investments
• Funds can be withdrawn at any time, for any reason
• Withdrawals are not taxable
• Amounts withdrawn can be re-contributed in future years
• Unused contribution room can be carried forward indefinitely

Thursday, January 21, 2010

Ottawa ranked in top TWENTY places to live in the world

Ottawa was recently named one of the top 20 places in the world to live. We are one of three Canadian cities in the top 20 - including Toronto and Vancouver. Ottawa is tied with Berlin, Germany. As a city, Ottawa, has moved up 3 spots from last year's ranking!

Ottawa is within one point of ranking in the top ten.

Tuesday, January 12, 2010

Cash Flow Rules

1. Never Run Out of Cash.
Running out of cash is the definition of failure of your financial plan. Make the commitment to do what it takes so it doesn't happen to you.

2. Cash Is King.
It's important to recognize that the basics of cash flow is what keeps your finances alive. Manage cash flow with the care and attention it deserves. It's very unforgiving if you don't. Remember, cash is king, because no cash means no options in life.

3. Know the Cash Balance Now.
What is your cash balance right now? It's absolutely critical that you know exactly what your cash balance is. Even the most experienced person will fail if they are making decisions using inaccurate or incomplete cash balances. This is fundamental cash flow 101. That's the reason why failures are not limited to amateurs or people new to the finance world.

4. Passive Cash Flow is Better than Employment Cash Flow.
It's imperative to have your money work for you, rather than to work for your money. With passive cash flow, you invest your money into real estate and paper investments that pay you positive monthly income without having to trade your labour for money. Cash flow from employment is simply working to earn a pay-check and then spending the money.

5. Time = Money.
Everyone has heard the expression "time equals money." Assets are what produce money for you. For example, you might own real estate that you rent to tenants and that in turn produces cash flow. Or you might own a dividend paying stock that pays you a quarterly income. The greater the assets, the greater the cash flow. Feed your assets so that your assets can in turn feed you. Our economy today is an asset based economy. There person with many assets will have the greatest financial security.

6. Cash Must Be Generated from More than 1 Source to Become Wealthy.
Income must feed wealth-producing assets. To truly achieve wealth, it's essential to direct your current income into other income-producing investments. This way, your money will start to work for you. Also, it's a good idea to have several streams of income, in case one stream suffers due to a disaster, recession or other calamity. Remember, if you want the new big screen television, invest your capital into dividend producing stocks or investment real estate and use the profits from the asset to purchase the consumer goods.

7. You Can't Create More Time, But You Can Buy It Back.
Truly wealthy people can buy time. For example, if you can afford it, you can hire people to perform your household duties such as cleaning, landscaping and cooking. The way to know if you can afford to do this is if your per hour income exceeds the amount of money you would be paying to hire your someone else to do it for you. If your portfolio of assets produce a passive income of greater than your existing employment income, you can “retire” and buy all your time going forward.

8. Positive Cash Flow Does Not Depend on Your Efforts Alone.
In order to achieve a consistent positive flow of cash, your streams of income must not rely on your efforts. It’s essential to have many seeds planted to reap benefits of cash flow. That means that besides working in a job for employment income, it can’t hurt to have a side business as landscaping, in which you send other workers to provide the services and keep the revenue. Another idea is investing in stocks which pay consistent quarterly dividends. The ultimate cash flow generator would be to own real estate that appreciates in time and has a positive cash flow.

2010 and beyond

I find it cliche to sit and discuss our New Year's resolutions. Let's all be honest here, you know that by February you will all have broken all your resolutions. Okay, maybe March.

I would suggest it is far more fruitful to set a goal instead of a resolution. A resolution is like a wish, it is a dream.

A goal should be SMART -


For 2010 and beyond, it is necessary to start setting SMART goals for your financial future. I would suggest we set a meeting to rediscover your direction heading into another year.

If we have not met for over a year, it is time to revisit what is available and what options are available for your existing properties. For people who are closing a new home purchase this year, we should get together and discuss the exciting financing options available (Lilianne and I have developed a HELOC solution you should learn about).

I have personally adopted the philosophy of "NEVER AGAIN, again". In my short time in the working force (relatively speaking), I have been through two major stock market crashes - tech bubble in 2000 and the global financing meltdown 2008. I have seen my portfolio twice drop by healthy double digit numbers inside of 10 years.

For 2010 and beyond, one of my goals is to follow the investing rules of the Oracle from Omaha - Warren Buffett -
#1 - Never lose your principal
#2 - Always follow rule number 1

I am taking even more control of my personal finances, specifically my paper assets. I have been reading Jason Kelly and Derek Foster again, listening to their philosophies and beliefs in the paper world. Mr Foster is speaking in Kanata and Stittsville in January, might be something to check out - click here for details.

With my 25 doors in real estate (soon to grow to over 30), I am focussing on the interest rates, watching the US unemployment rates and bond markets. I am still in a buying mode, but I have become highly cognizant of the difficults in the appraisal market right now.

Any money I have with professional advisors will be under greater scrutiny from now on. I know that nobody cares about my money more than I do, so I have to keep my focus on regular communication with my trusted advisor.

My new focus is on cash flow investments as cash in my pocket is better than cash in someone elses. I would rather make a monthly income, rather than bet on an equity increase.