Imagine this conversation…
Do you have a vehicle?
Uh… what kind of vehicle do you have?
Ok, I am sure you might park it in a garage to shelter it from the harmful elements, but what’s in your garage?
Oh, I have a car. I think. I’m pretty sure it’s a car, but it might be a truck. Or a motorcycle…
You don’t know??
Well, I went to a dealer and he said it was a good buy. I don’t know much about vehicles, so I just let him pick.
Did you do any research? Did you go on consumer reports and see if it was highly rated? Watch a YouTube video comparing it to other vehicles at least?
I would, but I’m not sure what I own. Besides, I only spent $10,000.
Sound crazy? Think this would never happen? I have this same conversation at least once a month, but it goes like this…
I am reading a book right now called How An Economy Grows (and why it crashes). It’s a great book because it explains complex economic principals in the form of a children’s story book with lots of pictures.
Today I thought I would do a very basic lesson on interest rates.
The interest rate is really the cost of renting money. If renting money is cheap, more people borrow money and buy things. If renting money is expensive, people stop borrowing and save their money.
When the cost of renting money is high, the bank will offer you high interest on your savings account knowing that they can lend your money out at an even higher rate in the form of mortgages.
In 1981 banks would offer you 5% interest on your savings account because they could then lend that money out in the form of mortgages at 24%. As a result more people saved their money and people only bought a house when they had saved up a big down-payment.
It’s funny how some people end up in the film industry. Take my friend Steve for example. One minute he was minding his own business walking down a Vancouver street, and the next minute he was tackled by the producers of The X-Files and told he looks like David Duchovny. They hired him as David’s photo-double and soon he was living in Hollywood, making the big bucks.
Today Steve lives back in Vancouver and works as a Life and Health Insurance Advisor.
Today’s guest post by Steve Kiziak.
I sure wish I had been investing in assets instead of blowing all my X-Files money on that top of the line Mustang Cobra with the huge monthly finance payment. Maybe I should have bought Ford shares instead of the Ford!! Oh well it’s never too late to start good investing habits.
What I’d like to talk about today is not how to accumulate wealth, but how to protect it. So on that note let’s start with your biggest asset, your home.
Yesterday we had the first meeting of what I call the Canadian Performer’s Money Investment Club. These are the notes for those who attended and hopefully they may contain some useful information for those who didn’t.
My friend Donald just landed a role in the Disney Channel movie “Girl Vs. Monster”. It’s his first big break and his question to me was, “what should I do with the money?”.
He is in his twenties, lives at home and is still going to school. Since we have both been too busy to get together, I thought I would write to him here. Maybe other actors would be interested in my advice. After all that was the idea behind this site. Actors helping actors.
First let me tell you how envious I am of you. Not because you are booking acting work. I have seen how hard you work in class and you deserve your success. I am envious because if I had had someone mentor me in personal finance when I was your age, I would probably be able to retire by now.
Looks like someone finally blinked in the big game of chicken the banks have been paying with each other.
Bank of Montreal recently introduced a five-year fixed-rate mortgage over 25 years at 2.99%, which observers said is the lowest in recent memory. In response Royal Bank and Toronto-Dominion Bank both announced a four-year fixed-rate mortgage with a 30-year-amortization at 2.99%.
The Globe and Mail is reporting that officials in Ottawa were unhappy with the move at a time when the government is concerned about Canadians taking on too much household debt. People are taking advantage of low rates to pile on debt which could result in big problems in the future if (when) rates begin to rise.
These rates were short-lived and all three banks have since raised their rates on a four-year fixed-rate mortgage to 3.39%.
Could this signal the peak of the real estate market in Canada? There are many signs that the American economy is recovering and these emergency low rates are no longer necessary to fuel an already overheated real estate market.
On Garth Turner’s blog he recently quoted one Vancouver realtor as saying, “since October, it’s like someone turned off the tap. It’s became absolutely dead.”
In Abbotsford, real estate sales have just hit the lowest point since 2009. There are now 8,320 houses for sale in the Fraser Valley, and last month just 799 sales.
I started this website because I was shocked by the amount of actors I met (many of them 40 years old) who had no financial plan in place. I fully understand that learning about personal finance can seem like a daunting task, but a little knowledge goes a long way.
I have identified 5 basic levels of investing. By moving up just one level from where you are now, you could generate tens or even hundreds of thousands of dollars more over time.
The 5 levels of investing
The topic of promoting your business on the internet is too vast to cover in a blog post. I would recommend going to the library and taking out Facebook for Dummies, Twitter for Dummies, and YouTube for Dummies just to get a running start.
I also recently read a great book by Gary Vaynerchuk called Crush It! In it he explains how to promote yourself and your business online and “cash in on your passion”.
- It’s here to stay.
- It’s a powerful way to promote yourself as an actor.
Back in the good old days of Hollywood, a young pretty girl would be sipping a soda at the local diner and be discovered by an agent who made them into a movie star. Word got around that this was happening and soon wanna be movie stars were arriving by the busload in Hollywood. They would get up in the morning, do their hair and makeup, put on their best dress and then head down to the diner and wait for their “big break”.
Problem was, you never knew exactly which diner the big shot Hollywood agent was going to have his lunch in. Also, if you spent all day hanging out in a diner, it didn’t leave a lot of time to hold down a job or work on your craft.
Luckily today’s actor can hang out in a virtual diner 24 hours a day without even leaving the house. In fact they can wait for their “big break” in several different locations all at the same time! Continue reading
After the market closed today, I went to The Globe And Mail and checked out what happened. I read: ”The Dow Jones industrial average closed at 12,415.70, down 2.72 points. The broader S&P 500 closed at 1281.06, up 3.76 points or 0.3 per cent. In Canada, the S&P/TSX composite index closed at 12,237.40, up 10.93 points or 0.1 per cent.”
But what the heck does that mean?
I thought I would do a little “Index 101″ lesson today, so you can nod your head like you understand when you hear the “market update” on your car radio.
CBC posted a great article entitled “5 reasons why TFSAs are a smart retirement investment”. If you do nothing else in 2012, make it a goal to understand TFSAs. Click here to read it.