Sep 122015
 

Change the way you look at the world

Albert Einstein once said the biggest decision each person has to make in life is to figure out if they live in a friendly or hostile universe. When you Change the way you look at the world, the world will change around you. 😉

If we see the world as a hostile, angry, and resentful place, then that is what we will create for ourselves in life. Some people spend their time looking for occasions to be offended. They actually want to find something to be upset about. It gives them an excuse to be patronizing and gives them an ego boost. And there’s certainly no shortage of potentially offensive material in the world if we look for them. But it’s easier to change how we think about something than to change the rest of the world.

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On the other hand optimists believe the world is abundant in kindness, resources, and prosperity. The most positive people are generally open minded and not attached to the idea that the world has to constantly revolve around them.

The good news is we can choose how we look at things. If we think the financial markets are going to crash and have a negative outlook on the economy then why would we invest? Why buy a home? Why not wait for the crash before jumping in to buy? Why buy stocks when it’s all just a gamble? It simply wouldn’t make sense to invest if we actually believe we are better off to stash our money under the mattress. But if this is the way we think then we’ll likely miss out on some huge gains in the future. 🙁

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Feb 152015
 

A new study by the University of Pennsylvania’s Wharton School found that adults in many countries make money decisions with surprisingly little financial knowledge. Researchers asked people in 18 countries THREE simple financial literacy questions about interest rates, inflation and investing.

When Americans over 50 years old were asked these 3 questions, only 50% could answer the first two questions correctly. Furthermore, just 33% knew the correct answer to all three questions. “Even well-educated people are not necessarily savvy about money,” according to the report. Among people with post-graduate degrees, 64% were able to ace the quiz. That’s better than the average, 🙂 but still less than my expectations.

Do you think you are smarter than most Americans? According to the report, answering each additional question correctly is associated with a 3% to 4% greater probability of planning for retirement.

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The Wharton study found that men (38%) were more likely than women (23%) to know the answer to all three questions. The guys also claimed to feel more confident about their financial knowledge, even when they answered incorrectly. The ladies, on the other hand, were more likely to admit that they didn’t know the answer to a question. Women are so modest. 😳

So how many did you get right on your first try? Feel free to spoil the answers below in the comments section if you think you know the correct answers. 😉 I’ll verify by tomorrow. Financially literate individuals save more, earn more on their investments, and manage their money better. So if you got 3 out of 3 correct then congrats! Your financial future is looking bright. 😀 Otherwise, keep brushing up on your personal finance knowledge. 🙂

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Jan 292015
 

Investing in DRG.UN

A couple of months ago my investment in Tim Hortons came to an end as the company was purchased by Burger King and I realized a profit of over 100% in less than 2 years. In the end I was given some shares of the new holding company, and a handsome payout of $1,700 in cash. If you also bought some Tim Hortons after reading my previous post about why I decided to invest in the world of coffee then congrats on your gains! 😀

So I’ve been itching to invest the new $1,700 in my TFSA. But the problem was TINA. The stock market in general is grossly overvalued relative to historical price to earning ratios. The Canadian real estate market doesn’t look any cheaper, and the capitalization rates (expected return on rent) in most cities here are embarrassingly low at the moment. Furthermore, Canada’s economy just suffered a net loss of 11,300 jobs last month, which pushed up our unemployment rate to 6.7%. 🙁  All major banks in this country have lowered their Prime lending rates to 2.85% in an attempt to encourage more economic growth. In times like these it may be prudent to hold off on investing in Canada.

So does that mean there’s nothing worth investing in right now?

Nein! 😀 By thinking outside the box I have found a solution to still put my extra cash to good use.

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Dream Global REIT (TSX: DRG.UN), formerly Dundee International Real Estate Investment Trust, is an investment trust that basically buys office and retail buildings in Germany, and then rents them out to make money. Its portfolio consisted of 279 properties, comprising approximately 15.8 million square feet. Dream Global enables investors like us to diversify our holdings, as major pension plans and other large institutional investors have done, by incorporating international commercial real estate into our portfolios. 🙂

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