A Money Coach in Canada

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alexanderstreet1.JPGIf you’re like me, you’ve gulped when your property insurance renewals arrived in the mail. It’s not a big rip-off, and insurance agent Grace Catao, owner of Habitat Insurance, gives us some straight-up intel on why it’s happening and what we need.

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With surging property prices in the Lower Mainland, homeowners who bought into the market in the last few years are sitting pretty: their assets have appreciated spectacularly.

However, increased property values have resulted in substantial increases in property insurance premiums. In some cases, we have seen increases as high as 50% to 100% in the last year.

This, of course, leads to much dismay for homeowners when they get their renewal policies.

When faced with a much higher premium, a property owner may be tempted to cut corners and insure the property for less than its market-related value.

What owners need to keep in mind is that since October 2003, construction prices have increased at a rate of approximately 1% to 2% per month. This scenario is unlikely to change in the near future, with market conditions demonstrating continued high demand for construction materials, services and trades.

In the event of a major peril occurring – such as a fire in which the entire home is destroyed – the property owner who scrimped on insurance may well find himself entitled to an insurance claim that will be insufficient to rebuild his home.

A homeowner who is concerned about rising premiums should speak to his broker about 1 to 2 weeks before the policy expiration date. A good broker will review the policy and explain the reasons for the increases. This will also be an opportunity for the broker to look for better rates with other insurance companies or restructure the policy.

Ultimately, a homeowner must keep in mind that his home is probably his single most valuable asset and must be appropriately insured: this may save a lot of heartache and money in the future.

Copyright© 2007 – All rights reserved – Grace Catao

Habitat Insurance Agencies Ltd.

“We’ve got you covered”

2152 Kingsway
Vancouver BC V5N 2T5

 

Tel. 604-438-5241
Fax 604-438-5243
Cell. 778-997-2583
e-mail Grace at habitat insurance dot calm

Mindy Abramowitz, our resident accountant (who is uber-cool, by the way) answers the perplexing question:

Should I lease?  Or should I buy?

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red-convertible.jpgHere’s another question best answered, “It depends.”

People usually are talking about a car, but a discussion of the lease vs. buy dilemma applies to a wide variety of items: computers, equipment, even buildings.

Why lease?

  • Lower monthly payments
  • No down payment (depending on the lease)
  • Sales taxes are included in the monthly payment, so you don’t have to pay them up front
  • Easier to keep your equipment up-to-date because you can acquire a newer model at the end of the lease
  • Depreciation is not your concern (though it is factored into the lease cost)
  • Greater tax deduction if you use the item for business

Why buy?

  • The item is yours. You can customize it as you see fit.
  • It’s easier – there’s less paperwork and fewer terms to negotiate.
  • It’s up to you whether you repair it – you are not legally bound to maintain your vehicle or equipment.
  • No restrictions on use (mileage limits, etc.)
  • You can sell the item for cash.
  • Over the long term the cost is usually lower

How to compare:

  • Many leases present the cost of leasing right in the agreement, but if yours doesn’t, use an online lease-or-buy calculator to figure out how much the lease costs so you can compare it to the cost of purchasing.
  • The cost of purchasing is either your loan interest if you are financing the purchase, or, if you intend to buy outright, the after-tax return your cash would earn in an investment . If your interest is tax deductible (i.e. you are operating a business), then use the before-tax return on your investments.
  • If the lease term differs from the loan term, make sure you compare the annual or monthly cost of each.

I am ignoring the effect of down payments, sales taxes and other fees for the sake of simplicity, but if you need a more detailed cost analysis I encourage you to try a lease-or-buy calculator.

If you need any top-quality waterproof gear for climbing, biking, hiking, whatever, this is your chance:

WatertonAcr’teryx Factory Store Sale
Details as follows:
Friday, Oct 26: 10am-8pm
Saturday, Oct 27: 9am-5pm
Sunday, Oct 28: 9am-5pm
Up to 70% off retail on discontinued and factory seconds only. No exchanges, no warranty, no returns, and all sales are final. Items on sale include outerwear, softshells, packs, skiwear, and technical tops & bottoms.
The factory outlet is located at 100-2155 Dollarton Hwy, North Vancouver

Thanks to Steve for the intel!

Canajun Finances pointed out a CBC article quoting RBC, BMO, and TD economists who believe the loonie will drop to the mid ¢90’s by the end of 2008.loonie Rats. We’ll just have figured out how to navigate the increasingly stringent border issues, and then shopping in the states will be pointless.

LululemonLululemon, the Vancouver-based yogawear darling, is doing even better than expected, and their share price increased by 10%. (I shoulda bought. I shoulda bought).

10 days ’til LeopardLeopard is released! $129/usd for the license.

The Bank of Canada kept its rate steady today.

And Money Relations gives us the scoop on Warren Buffet’s forecast about our loonie et alia.

ymbd.gifWhat would happen if you spent time over 6 months getting ALL OVER your personal finances?

Smart with Money is YMbD’s signature series and a new group starts Oct. 25th.

6 sessions over 6 months plus 2 individual coaching sessions

1. Shifting Gears and Taking Charge

find out the ‘need to knows’ to make strategic changes.

Where is your money going, right now?
What is your credit rating?
What is your net worth?
What changes can you make to create a monthly cash flow that aligns with your values and goals?

2. Debt: Kick it for good.

Debt is an element of most Canadians’ finances. It shouldn’t define our financial life. What triggers the use of credit in your life? Develop some counter-strategies. Create a sustainable plan to kick the debt habit.

3. Your Brain.Your Guts.Your Money.

What did you grow up learning about money?
What do you believe now about money?
What is influencing your relationship to money?

Create a strong set of powerful beliefs, designed to empower your mind and increase the likelihood of positive experiences with money – including attaining your goals.

4. Goals, Dreams and your Real World.

By this point, you will have a clear idea of your current financial situation. You will have developed a mindset conducive to moving forward. This session is clarifying your goals and setting things in motion with a realistic, attainable action plan.

5. Making Money Work… while you play golf. or volunteer. or whatever.

Ever left your financial planner’s office still puzzled about what’s going on with your RRSPs?
Ever read a statement and been completely confused?

This is a rockin’ session that will leave you jazzed, pumped, and confident that you get the need-to-knows of putting your money to work for you. No financial products sold, just solid intel!
6. Lasting Change.

By this point, participants have experienced significant and exciting change. This session prepares you to keep on the right path for the long haul. YMbD wants you to keep moving forward financially for the rest of your life!

I’ve got 6 seats left. This program has changed many financial lives … it could change yours.

Check it out!