Hope everyone is having a great weekend. Let’s look at some business and economic news we should care about.
Snail Mail Slowing Down – Canada Post made $127M in profit last year but the amount of shipments have been declining. I hope they can find new ways to make money. This company employs about 71,000 workers in Canada and is a big driver in our economy.
Low Growth – The IMF (International Monetary Fund) has downgraded Canada’s growth prospects to just 1.5% for 2013. This is great news for Canadians with debt because it probably means our interest rates will stay low for the time being. How can we take advantage of this? Well personally I plan to borrow more money to invest in assets that will directly benefit from faster growing developing countries. The IMF says that global growth on average is expected to be 3.3% this year 😀 So if we’re doing worse than the average, then there must be other countries that are doing better 🙂 My strategy is to leverage borrowed money from a place of low growth to invest in high growth environments 😉
Losing its Glitter – Gold fell in price dramatically lately. I’m not too worried even though I’m invested in gold. China and India are huge customers of gold. China’s economy is still growing north of 5% a year so eventually precious metals should recover which means now might be a good time to start buying some gold if one doesn’t yet have any.
Blog roundup – Personal finance and other interesting articles from around the web
Being frugal has an article on suggestions for lending money people close to you
Add Vodka warns that over deprivation can actually backfire
Agent Fang shares a frugal way to prepare some delicious home made chicken karaage
Dividend Ninja takes us through a couple of resource stocks he just bought.
Girl meets Debt discusses what she likes and dislikes about blogging as a PF blogger
Modest Money has a post on what you should if you’re traveling and run into problems with a rental car
Liquid Updates – What’s new with me
Bought some cool entertainment recently. Thought I’d share in case anyone was curious to know what I do in my spare time.
I also recently made a major purchase. It costed me over $2,000. Since I didn’t have any savings or an emergency fund I used my line of credit to pay for it haha. I’ll blog about my new awesome purchase this upcoming week, but here’s a hint; vampires are allergic to it 🙂
I think I may have a spending problem. I keep buying stuff I don’t even need. As if going into $2,000 of debt wasn’t bad enough I also found myself purchasing something else last week. Except this one costs WAY MORE. It’s so expensive it makes $2,000 look like a rounding error. If you follow me on the twitter, you may have seen this.
More details to come later. It will probably mean going into more debt for me to finance the purchase. But I’m okay with that since using other people’s money was how I made 12.5% on my farmland investment last year. Some might say going into debt can restrict your freedom. But I think it can also create the foundation for wealth and financial freedom. Debt is a tool. It just depends on what we use it for 🙂
Congrats on the land purchase! I have gone into debt to finance investments as well (up to 14%, yikes!) but have always made more from the investment and built wealth thanks to it.
Great to hear I’m not the only one willing to take a chance. Even better to know it worked out for you. I have spoken to many people how have invested in land in general, so far I haven’t met anyone who’s lost money investing long term in real estate before. I’m only talking about long term investors of course, not people who are looking to flip and make a quick buck. If throughout generations and hundreds of years the price of land (especially productive land like flat, large open spaces that can be used for manufacturing, farming, or other industrial purposes) have trended upwards then it’s probably not going to change for the next hundred years. If that’s the case, then let’s leverage it up 😀
Wow, where do you find the money for another farm land? It’s like you’re pulling money out from the hat 🙂 Congrats on your auction, you sure are building equity one quick step at a time.
I haven’t yet figured out exactly how I’m going to pay for this farm yet. But it will definitely be a combination of my current savings (about $4,000) and borrowing the rest from 2 or 3 different banks lol. If I hit my borrowing limit with these guys I’ll just open a new account with another banking company or credit union. I figure even if I was charged 6% interest rate I should still make a profit if farmland goes up by just 5% a year which I’m pretty confident they will. Worst case scenario is I sell some stocks to help with the down payment 🙂
Leverage is a double edge sword. That being said, I got the bad end of the deal. I borrowed up to 9600 and used around 1500 of my own money to by a certain stock. My interest rate was 7.653 % at the start of it and the dividend yield was around 9.2 %. Since I did this the dividend was cut in half, the stock price dropped 50% and the interest rate on LOC increased to 10.653 percent. I managed to talk my way down to 9.5% interest rate. I told the bank I only paid the interest because that it was used for investing purposes. The bank told me “It is wrong for people to think they only pay the monthly interest payment as the bank will consider you a higher risk for not paying down the principal”. I told it I would pay $50 monthly beside my interest payment.
I basically still hold this stock and DRIPPING it. I gained around 40 new shares so far and the ACB is coming down with each DRIP purchase.
I rent an apartment, so my LOC is unsecured which explains the high interest rate.
Sounds like it was a pretty good yield, I can see why you got into it (^_^) Sorry it didn’t work out the way it could have. If you haven’t done so already you can look into converting your regular account into a margin account if possible. Most Canadian brokerages charge 4 to 5 percent interest if you borrow money to buy stocks on margin regardless of the individual’s credit score, real estate assets, etc.
Congrats on the auction! Auctions are addicting. I used to be a researcher for an antiques auction house, and auction night was my favorite. Lots of fun! I hope to buy some land one day. I grew up on a lot of land and it made for a really fun/outdoorsy childhood. 🙂
There were about 30 to 40 people there at the auction. It was really exciting, especially for anyone who’s bidding. You should totally buy some land :0) It’s a hard asset and they’re not making any more of it.
Just realized how prominent I am in this post! 🙂 Glad to see I made the screen grab! Looking forward to reading about your farm purchase and the related financial summary!
Yup, I made a pretty big bet on the new farm because I signed the purchase agreement without even getting my financing in order yet lol. Hope everything works out though so I don’t lose my 10% deposit:P
Hey, thanx for the mention! 🙂
The Dividend Ninja
Any time ^_^
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