The basic ideas:

•  Money managers make over 800 billion in commissions each year, so they have a vested interest in managing your money and maintaining control of the markets
• The most popular mutual funds results mirror the S&P 500 but charge fees
• You should focus on about 5 stocks
• Technology and freedom of information has given the individual investor power they never had before
• 85% of the market is controlled by fund managers, but because of their size they need to move very slowly when entering or exiting a position, so the individual investor can spot trends and profit because they can move so quickly
• He was a follower of the Buffet school of investing
• Rate of return is not = to risk. Its like if you drive your car it is not risky, but your 11 year old driving would be. More knowledge and skill = greater rates of return.

I ended up buying a package that included training and use of some investor tools. Ironically I have no money free to play with in the markets right now, but you know me I’m obsessed with learning and seminars and every bit of knowledge I can get my hands on. As I free up some money and start testing it out I will keep everyone updated about the results.

“If they look nice they know they look nice, so why tell them? I’ll just look like every other suckup.”

Of course what I have always failed to take into account is that well, people tend to be insecure and unsure of themselves. Even if we were to forget about insecurities, well, we just love compliments. Why do I wear an expensive watch or does lady wear a designer dress? To get noticed! So of course people love it when you notice.

This all kind of came together today with the last nail in the coffin. The last few days I’d been feeling overly tired, and despite seeing some legendary speakers on Wednesday a bit out of gas. This morning after over sleeping I decided that was all going to end right there. I threw on my shoes and started what ended up being an epic 20km run.

As I was running through Stanley Park feeling ambitious, pumped up and energized again I saw an interesting looking gentleman drawing something, we made eye contact and he motioned for me to remove my headphones. As I approached I realized he was much more interesting that I could have hoped for. In an attempt to get me to write him a cheque for a few thousand to support his journey to Hollywood to be a comedy writer he told me how ambitious and successful I looked. It was as I “ran” away that I realized how good I was feeling from his obviously contrived compliment. Here is a situation where:

• The person flattering me is clearly doing so because he wants something
• The flattery is empty as he doesn’t really know me at all, and of course is using it to get something
• The person flattering me holds no significant social value in my eyes (not a mentor, role model, parent, boss, friend etc)

Despite all these factors, well, it felt good to hear (almost as good as when this really cute girl caught me singing “Mr.Brightside” to myself and gave me a smile). Whats the moral of the story? Well it isn’t to go out and throw empty compliments at everyone you meet. I’d also be careful complimenting those who tend to hear nothing but praise as you’ll blend into the masses who tell them the same things day in and day out. What I am suggesting is that the next time you notice some-one’s shoes, new haircut or the graceful way they carry themselves, tell them. I’m going to try and compliment 25 strangers over the next week, what is your goal?

“It’s not a black thing, it’s not a white thing, it’s a green thing”
-Christopher Gardner

“For $25,000 I’ll listen to him tell all the Ni$%^ he wanted. I was laughing all the way to the bank”
-Christopher Gardner

“When the CFO and the Chair of the Board are selling, its probably a good indicator of what to do!”
-Phil Town

“It was a small misunderstanding…..I had to go to jail”
-Martha Stuart

“If you don’t give appropriate attention to what has your attention it will take more than it deserves”
-David Allen

“The more something is on your mind, the less is probably getting done about it”
-David Allen

“95% of the time when you have the time and energy to do something you don’t have the time and energy to think about what you need to do”
-David Allen

“Life has been made too confusing, too complicated…Laugh, move, dance”
-Loretta LaRouche

“If you want to make god laugh, tell him your plans”
-Quincy Jones

“Live everyday like its your last, one day you’ll be right”
-Quincy Jones

“Copy the 10 people you admire most….once you walk in their shoes and gain confidence your own personality can come through”
-Quincy Jones

“When people doubt me I’ve practiced my response….Right, we will see”
-Quincy Jones

“Not one drop of my self-worth depends on your acceptance of me”
-Quincy Jones

“Dan, you have some amazing rhythm, don’t let it go to waste. One day you’re going to be a star”
-Quincy Jones

“When life gets to be too much, stop and let your soul catch up. Listen to a great song”
-Quincy Jones

“Tell someone you love them. Call, write, email or text an old friend. Tell someone you miss them.”
-Quincy Jones

“I played 1000 games where I didn’t have to be great, just better than the other guy”
-Andre Agassi

“Focus on getting one day better, not two, and build momentum each day”
-Andre Agassi

“Eat an elephant one bite at a time”
-Andre Agassi

“If this is co complicated for you, let me make it simple, if you see the ball move and hit it”
-Andre’s Coach during The French Open Finals

Thats all for tonight. Look forward to more indepth articles on each of the speakers over the next few weeks.

Dan.

1. Homeowners not planning to sell in the near future have seen the property taxes follow the increase in their property’s value without seeing any relative gains.
2. First time buyers making anything less than 6 figures are being pushed further and further away from Downtown Vancouver, The North Shore and Vancouver, often those making even 150,000+ a year aren’t able to afford to live in central areas once they factor in car payments and family expenses.
3. Vancouver’s younger generations are desperate to get into the market although many have lost hope they will ever be able to afford to live where they grew up.

Now of course there have been a lot of benefits derived from the housing boom. Increased jobs, more money flowing into the city, a lot of prosperity for intelligent investors and those in the real estate industry, and an increased net-worth of all homeowners.

Like it or hate it, the price of real estate in Vancouver is not going to fall significantly and I do not take issue with that fact. Vancouver is a gorgeous, relatively safe city situated to continue as a major international trade centre due to its proximity to the Pacific Rim. As a long time Vancouver resident what I do take issue with is the large proportion of unoccupied condos and properties held as investments by non residents. RBC’s affordability index ranks Vancouver as the #1 least affordable place to live in Canada. RBC’s index is based on 2 values, people’s mortgage payments and their incomes. The higher the mortgage payment relative to income the less affordable an area is. Pretty simple stuff.

Vancouver is so ridiculously unaffordable for a many reasons. The main reasons I will point out are:

1. Vancouver is not a business hub in the same way Toronto is. We don’t have many corporate head offices or a large financial centre. This means there are not as many high paying jobs here. People look at New York and say “Well Vancouver could see those prices one day New York has” but this simply isn’t the case. New York sees an incredible amount of fund managers and investment bankers making 7 figures, we just don’t have that in Vancouver.
2. Speculation. As happens far too often in markets around the world speculation is running rampant in the Vancouver real estate market. Huge marketing teams push condo development presales and buyers hope to flip them for a quick buck. This means the market prices don’t reflect true resident demand for housing. Speculation drives market prices up beyond what resident’s incomes support.
3. Foreign buyers play a role in market prices as well and their transactions are completely unrelated to incomes within the city. This isn’t as large of segment as people want to believe (it is far too easy to take out ones frustration on a vaguely defined outside group) but still plays a significant role in driving up affordability.

The other issue I feel is worth of discussion is intentionally unoccupied properties. By unoccupied I am referring to properties bought but not rented or owner occupied. The reason this really upsets me is that it drives up rents and hurts those who already can’t afford to buy. There is a huge amount of new condos being built in this city, many bought by investors yet rents are rising and occupancy rates are below 1%. Try finding an apartment for rent on craigslist, I’m told it is chaos as a place will be listed and taken in the same day. My opinion is that intentionally unoccupied properties play a huge role in maintaining high rents despite an increase in the amount of available housing.

In Part 2 of this article I will discuss at least one out of left field idea for evening things out and making Vancouver a little more affordable for its citizens.

Peter Legge whom I recently saw speak at The Vancouver Club. The book is “Make Your Life A Masterpiece.” I thought I would share a great story he found and put in his book that emphasises the importance of simple effective communication. Reading it I actually brought myself to tears laughing. Enjoy

Dear Maid,

Please do not leave any more of those little bars of soap in my bathroom since I have brought my own bath-sized Dial. Please remove the six unopened little bars from the shelf under the medicine chest and another three in the shower soap dish. They are in my way.

Thank you,
S. Berman

Dear Room 635,

I am not your regular maid. She will be back tomorrow, Thursday, from her day off. I took the 3 hotel soaps out of the shower soap dish as you requested. The 6 bars on your shelf I took out of your way and put on top of your Kleenex dispenser in case you should change your mind. This leaves only the 3 bars I left today which my instructions from the management is to leave 3 soaps daily. I hope this is satisfactory.

Kathy, Relief Maid

Dear Maid - I hope you are my regular maid.

Apparently Kathy did not tell you about my note to her concerning the little bars of soap. When I got back to my room this evening I found you had added 3 little Camays to the shelf under my medicine cabinet. I am going to be here in the hotel for two weeks and have brought my own bath-size Dial so I won’t need those 6 little Camays which are on the shelf. They are in my way when shaving, brushing teeth, etc. Please remove them.

S. Berman

Dear Mr. Berman,

My day off was last Wed. so the relief maid left 3 hotel soaps which we are instructed by the management. I took the 6 soaps which were in your way on the shelf and put them in the soap dish where your Dial was. I put the Dial in the medicine cabinet for your convenience. I didn’t remove the 3 complimentary soaps which are always placed inside the medicine cabinet for all new check-ins and which you did not object to when you checked in last Monday. Please let me know if I can of further assistance.

Your regular maid,
Dotty

Dear Mr. Berman,

The assistant manager, Mr. Kensedder, informed me this morning that you called him last evening and said you were unhappy with your maid service. I have assigned a new girl to your room. I hope you will accept my apologies for any past inconvenience. If you have any future complaints please contact me so I can give it my personal attention. Call extension 1108 between 8AM and 5PM.Thank you.

Elaine Carmen
Housekeeper

Dear Miss Carmen,

It is impossible to contact you by phone since I leave the hotel for business at 7:45 AM and don’t get back before 5:30 or 6PM. That’s the reason I called Mr. Kensedder last night. You were already off duty. I only asked Mr. Kensedder if he could do anything about those little bars of soap. The new maid you assigned me must have thought I was a new check-in today, since she left another 3 bars of hotel soap in my medicine cabinet along with her regular delivery of 3 bars on the bath-room shelf. In just 5 days here I have accumulated 24 little bars of soap. Why are you doing this to me?

S. Berman

Dear Mr. Berman,

Your maid, Kathy, has been instructed to stop delivering soap to your room and remove the extra soaps. If I can be of further assistance, please call extension 1108 between 8AM and 5PM.Thank you,

Elaine Carmen,
Housekeeper

Dear Mr. Kensedder,

My bath-size Dial is missing. Every bar of soap was taken from my room including my own bath-size Dial. I came in late last night and had to call the bellhop to bring me 4 little Cashmere Bouquets.

S. Berman

Dear Mr. Berman,

I have informed our housekeeper, Elaine Carmen, of your soap problem. I cannot understand why there was no soap in your room since our maids are instructed to leave 3 bars of soap each time they service a room. The situation will be rectified immediately. Please accept my apologies for the inconvenience.

Martin L. Kensedder
Assistant Manager

Dear Mrs. Carmen,

Who the hell left 54 little bars of Camay in my room? I came in last night and found 54 little bars of soap. I don’t want 54 little bars of Camay. I want my one damn bar of bath-size Dial. Do you realize I have 54 bars of soap in here. All I want is my bath size Dial. Please give me back my bath-size Dial.

S. Berman

Dear Mr. Berman,

You complained of too much soap in your room so I had them removed. Then you complained to Mr. Kensedder that all your soap was missing so I personally returned them. The 24 Camays which had been taken and the 3 Camays you are supposed to receive daily. I don’t know anything about the 4 Cashmere Bouquets. Obviously your maid, Kathy, did not know I had returned your soaps so she also brought 24 Camays plus the 3 daily Camays. I don’t know where you got the idea this hotel issues bath-size Dial. I was able to locate some bath-size Ivory which I left in your room.

Elaine Carmen
Housekeeper

Dear Mrs. Carmen,

Just a short note to bring you up-to-date on my latest soap inventory. As of today I possess:
On the shelf under medicine cabinet - 18 Camay in four stacks of 4 and one stack of 2.
On the Kleenex dispenser - 11 Camay in two stacks of 4 and one stack of 3.
On the bedroom dresser - one stack of 3 Cashmere Bouquet,
One stack of 4 hotel-size Ivory, and 8 Camay in two stacks of 4.
Inside the medicine cabinet - 14 Camay in three stacks of 4 and one stack of 2.
In the shower soap dish - 6 Camay, very moist.
On the northeast corner of tub - 1 Cashmere Bouquet, slightly used.
On the northwest corner of tub - 6 Camays in two stacks of 3.

Please ask Kathy when she services my room to make sure the stacks are neatly piled and dusted. Also, please advise her that stacks of more than 4 have a tendency to tip. May I suggest that my bedroom window sill is not in use and will make an excellent spot for future soap deliveries. One more item, I have purchased another bar of bath-sized Dial which I am keeping in the hotel vault in order to avoid further misunderstandings.

S. Berman

Dan Johnston.

So often we hear about granite this and stainless steel that, it becomes easy to forget about another very important part of your home: What you have to look at every morning. I’m not talking about your spouse (that is one view I can’t help you change) but rather your condo’s view. Whether it is of the mountains, the ocean or the city, when you’re purchasing a home you may be looking at that same view for 10, 20 or 30 years and it needs to inspire you. For me, view and location are the most important aspects of a home purchase (assuming of course it has granite this and stainless steel that, great amenities and friendly neighbours). One could say a magnificant view is quite the panty dropper, while an unattactive one is a definite price dropper.

The Mountain View
For some nothing is more majestic than a view of the beautiful North Shore Mountains. It may be their size and strength as, unlike housing prices, they have remained constant for thousands of years. Some enjoy being reminded of mother nature and all her possibilities; perhaps looking out each morning to check the snow conditions and decide if they should call in sick and hit the slopes.

The Ocean View
Similar to its partner the mountain view, the Ocean View offers one a sense of just how great mother nature is, a reminder of how small we are compared to the earth which we have the privledge to inhabit. Also in common is the sheer beauty of the view on a perfect summer afternoon, sails riding high as the sea is alive with boats. Personally, I have never found mountain or ocean views very appealing after sunset.

The City View
To me their is no greater view than an impressive city view. While a view of the mountains or ocean may make one feel small compared to mother nature, sitting atop the city at 30 or 40 stories looking down can make a man feel like a king. What better way to start your day than to look out of your floor to ceiling windows and see all the people you need to meet, stores you can shop at, buildings you want to buy and restaurants you plan on trying? To me there is no comparison, well unless of course you can have all 3.

The Rooftop Garden
I used to live in the Electric Avenue building on Burrard and Smithe. My suite was on the top floor and as such it had access to what I liked to call the John Kalovich floor which provided semi-private access to a 360 degree rooftop garden. The view in my corner suite was fantastic but couldn’t compare to this. In the mornings I’d complete my runs by climbing the 24 stories of stairs to the garden, and I can tell you there is no better feeling in the world (yes I was listening to eye of the tiger, and yes I made a habit of proclaiming I was the king of the world while looking down on the city).

It may not always be possible to find the absolute perfect view you want, in the building you want. This is where the 360 degree rooftop garden comes into play. By having communal rooftop areas a building allows more of its residents to live like kings, even if its only for a few hours a week. As an ambitious up and coming investor, having a rooftop garden on your own home allows you to take a few minutes each day to look out over the city you want to one day own and feel inspired, taking that feeling with you for the rest of your day.

At the end of the day one has to ask, what is a view worth? Some tell me a view is everything to them, while others proclaim their blinds are closed all day anyhow so why waste the money or spend more time in an elevator than neccessary? Whatever you decide on your view, look into the surrounding airspace rules and make sure it is yours to keep. The beautiful view from my former corner unit in Electric Avenue will be no longer when the 40 story condo across the street completes sometime in 2009.

 Until Monday,

Dan Johnston.

“It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.”
-Donald Trump

There is no doubt that some of the wealthiest people on earth made their money through real estate. Building wealth through real estate can give you financial freedom and more time to enjoy living! This is part one of a series of articles I will be writing on real estate investing for Canadians, expect at least one new article on the topic every two weeks. If you’re tired of hearing about other people making money in our amazing real estate market now is your chance to step up and get into the game.At the most basic level there are only 2 ways to make money through real estate: Rental income and capital gains. Understanding these basic concepts is fundamental in becoming a successful real estate investor.Here are some quick definitions:
Rental Revenue: This is the money you receive from tenants living in your properties. This is taxed by the government the same as any other income.

Capital Gains: This is the money you make from increases in your properties value when you sell. Income through capital gains is taxed less than rental or employment income and is only paid when the property is sold. You do not pay capital gains tax on your primary residence.

An investor usually earns income (or attempts to) from both sources. A property bought to earn a monthly income (often referred to as a revenue property) will often increase in value (resulting in capital gains when they eventually sell). Properties bought to be resold because they are expected to increase in value are also usually rented out to help with mortgage payments.

Some other terms you should know:
Cash Flow: This refers to actually money coming in and out. If your property generates more cash per month than it costs you it is said to have positive cash flow.

Equity: Equity refers to your ownership in a property. If you put $30,000 down on a $300,000 property you have 10%, or $30,000 equity. If that property goes up to $425,000 you now have 36% or $155,000 in equity. You can see how one is able to turn a small investment ($30,000) into a large profit($125,000).

Look forward to future articles covering everything from increasing your leverage to using options to make money with minimal risk.

 This site is a great place to post opinions, ask questions or recommend learning materials.For more reading on real estate investing I recommend:“Real Estate Investing in Canada: Creating Wealth with the ACRE System” by Don Campbell. It starts with the basics and is written for Canadians by Canadians. This book covers a lot of the little details. For the big ideas behind many successful real estate investors I recommend anything by Trump or Robert Kiyosaki. 

Your credit score or “beacon” is used by lenders to predict the likelihood of you missing a payment over the next 2 years, whether or not you owe money or have balances on your credit cards have little influence on this score.

Your credit score is broken down into various components:
35% Payment History - This means paying your bills on time. You don’t have to pay off your credit cards every month, just always make the minimum payments. Most companies will allow you to send in a void cheque and set up an automatic minimum payment, or you can schedule it online with your bank.

30% Amounts Owed - Anytime you are using more than 50% of a credit account it lowers your score. Having balances below this on your credit cards does not lower your score. In the final months leading to a home purchase you may be better saving cash for a down payment and leaving balances on your cards. This decision should be discussed with a professional.

15% Length of Credit - Try and stick to the same credit accounts. It looks much better to have a visa you have used and paid since you turned 19 than constantly opening and closing accounts.

10% New Credit - If you are applying for every credit card you can or shopping around for mortgage rates this shows up on your report and lowers your score, you may be considered a “credit hunter.” Financial institutions will wonder why you were rejected by the other companies who checked your score, or why you are signing up for so many different credit products.

10% Type of Credit - The kind of credit affect how it is viewed. Bank loans are best, than major credit cards and lastly consumer cards (ie future shop, home depot cards). A bank loan paid on time every monthly looks great.

Things you can start doing now:
Everyone should pull their credit score (www.equifax.ca), it will cost you $23.95 and will give you your score and advice as to how to improve your score so you can have excellent credit. If you’re looking to purchase a home in the near future I can check and review your credit with you during the mortgage application process.

If you have high balances on your credit accounts try and pay them down or at the least spread them out (so no account is at 50%+ of its limit). If avoidable, do not apply for any new credit. Make sure not to miss any minimum payments, and if it is unavoidable call the creditor beforehand and ask for an extension!

If you are a student or looking to purchase in more than 2 years: If you don’t already have a credit card get two, building a credit history of 2 years or more is very important and having 2 different accounts is best. If you already have a lot of credit, don’t worry about outstanding balances, just make sure you do not miss payments. Try and stick to 2 or 3 credit cards and avoid closing accounts or switching banks too often.

This covers a basic introduction to credit. In addition to credit, lenders are also concerned with your income and the property involved, I’ll cover these 2 subjects later this month. I will also be writing an article on how to read your credit report in the future.

If you have any questions send me a message or better yet post it so everyone can see because you’re probably not alone.

Dan.