Hello and welcome to our on-line newsletter.
Please tell your friends how to get a free subscription: Just go to our home page http://www.scroogeguide.com/ and fill in the box in the lower left hand side.
Signed,Robert "Scrooge" Lunan
Scrooge Guide follows:
The Scrooge Guide is a publication of the Lunan Corporation copyright 2006, all rights reserved.
103% Financing
Are you tired of renting and have no downpayment for a mortgage? No problem, says Monika our mortgage broker. If you have reasonably good credit she will get you a mortgage that pays 100% of the new house value plus another 3% to help pay for new furniture, etc. If you live in Ontario call her today at (613) 258-3454 and tell her you are interested in the 103% Mortgage Financing.
Principal Protected Notes – Buyer Beware.
Principal protected notes (PPN) are hot this year. Most financial institutions are selling them and they seem to be popular because of the guarantees. This is how it works. You buy a PPN for $1000. It is locked in for 5 to 11 years and at the end of that period you are guaranteed to get back your full $1000 plus a share of any gains. And gains you are told have averaged 15% in some sectors in the past, but past performance is no guarantee of future results, blah, blah, blah. So you are convinced. After all isn’t this guarantee a wonderful thing, and just imagine if those 15% profits pan out! But just a minute, let’s look into this a little closer. How do those big conservative financial institutions guarantee the money to come back to you and offer you such lucrative potential gains? Has there been a change of heart in the big banks? Are they now looking after my best interests instead of theirs? Is this some sort of goodw ill gesture? Have they become my sugar daddy? Don’t count on it! A closer look tells the real story. First, they take about 70% of your money and put it into very low risk investments. This is the part that guarantees the 100% return in 5 to 11 years. So they are covering any potential loss with your own money (and you thought they just loved you!). This of course severely limits any potential gains. The other 30% of your investment is put into higher growth vehicles but (and this is a big but) it is also subject to a number of fees such as commissions (5% of your money to the person who sells it to you), set up fees, annual fees of 2% to 3%, performance fees of up to 20% of returns, swap and brokerage fees, etc., etc., ad nauseam. It looks to me like this isn’t such a good deal after all. You could in fact make your own much more effective PPN by investing 70% of your funds in low risk bonds or a good bond ETF and the other 30% i n higher risk (and potential higher return) investments. Buyer beware.
How to Use a Broker
We have an in-house mortgage broker and we also offer insurance brokerage services. One thing we notice over and over is that most people don’t know what a broker is and how to use them. We often hear things like “I’m shopping around from broker to broker”. This is akin to saying “I’m shopping around from Walmart store to Walmart store to find the Walmart store with the best prices.” So let’s be clear about what a broker does: a broker shops the market for you so you don’t have to do it yourself. If you approach two different brokers, please be aware that they are looking at the same market (of lenders or insurance providers or whatever) and you will probably get the same answer. Where the brokers offer a difference is in the customer service and speed of service and ability to find the very best product for your situations. That’s where our broker shines and that’s the type of broker you should seek out and find.
The Curse of Registered Pension Plans
If you have the option of joining a registered pension plan (RPP) or a group RRSP with your employer, choose the group RRSP. (The exception of course is where the RPP is a guaranteed benefit plan mostly or entirely paid for by your employer.) Here’s the simple reason, you cannot touch the RPP until you are of retirement age and even then a formula tells you how much you can have each year. Even worse, if you are unemployed or sick and dying, you still cannot get to it! Take this example: you worked long and hard and at 50 years old you are diagnosed with terminal cancer. You are too sick to work and will probably die within two years according to your doctor. You have a spouse who doesn’t work and four minor children. Okay, you say to yourself I have $200,000 in my RPP I’ll pull it out and live off that. Sorry!!! No can do! The rules only allow around $20,000 (after tax) to be pulled out per year under these circumstances and o nly after you prove that all your other assets have been used up first. So while you are starving and heading out to the food bank the government pension watchdogs can be content that they are doing their job and protecting you from depleting your pension fund too fast. Same thing applies if you are down on your luck and out of work. You may have a giant pension fund but you cannot have access to it. So if you have a choice, choose a group RRSP over a RPP. Better still, pressure your employer to drop that overly restrictive RPP and offer a group RRSP where they (the employer) still contribute to your plan. If this looks like it will never happen, make minimum payments into your RPP and build up your own RRSP funds. You may or may not live to access your RPP funds because the formula only allows you to get to all of it by your late 80’s – should you live so long!Life Insurance UpdateNow is a good time to mark your cal endar to have your life insurance looked at. In many cases you may be paying too much. Make sure you get a broker (like us) to look at it. If you are in Ontario we can look into it for you. Otherwise find a good life insurance broker in your area. In some cases a broker will be able to cut your life insurance premiums in half!
Need to Contact Us?:
newsletter@scroogeguide.com
More contact information is on our website at: http://www.scroogeguide.com/
TERMS OF USE
Please note that all information is given on an "as is" basis, without warranty. While every precaution has be en taken in the preparation of this material, neither the authors, the Scrooge Guide® nor the Lunan Corporation shall have any liability to any person or entity with respect to any loss or damage caused or alleged to be caused directly or indirectly by the material on this web-site or contained in the Scrooge Guide® newsletter. In this newsletter and on our site we do not give professional advice including and without limitation financial, legal, tax or accounting advice. Nor do we offer a solicitation to buy or sell investments. We offer general information, common sense tips and an educational website and newsletter about frugal living, saving money,and making money.
COPYRIGHTS & TRADEMARKSThe Scrooge Guide is a registered trademark of the Lunan Corporation. All information on this site and contained in The Scrooge Guide® Newsletter and in other attachments and available downloads is copyrighted by the Lunan Corporation. All rights reserved. (c) 2006.
Saturday, February 25, 2006
Newsletter Jan 25 2006
Hello and welcome to the New Year!As of last month our on-line newsletter is now FREE!!! That should appeal to all you other Scrooges out there.Last month we asked you to tell your friends about it. Unfortunately for several days the automatic signup sent new address out somewhere and they got lost in cyber space. So please tell them again.To get a free subscription just go to our home page http://www.scroogeguide.com/ and fill in the box in the lower left hand side.For those of you who have already paid, you still get all the extras - the Scrooge Guide manual, the on-line members-only content, and all the back issues.So, now you can give your friends the gift of reading the Scrooge Guide newsletter for no cost at all! What a gift that is!
Signed,Robert "Scrooge" Lunan
The Scrooge Guide follows:
The Scrooge Guide is a publication of the Lunan Corporation copyright 2006, all right reserved.
Relief for the “Post Christmas Shopping Blues”
Did you include everybody’s wishes in your Christmas shopping and are now aghast at what it has added up to? Here are a few remedies that you can apply to get those high interest credit cards paid off:
List all of your credit cards and loans with their balances and interest rates and high limits
Sort them by highest interest rate, then amount owing
Check with your credit card company if there is an interest rate special on for balance transfers of other debts (e.g. some lenders have a special on for 4.97% interest rate for all balance transfers until paid in full) Transfer the highest interest paying debts to the credit card with the balance transfer special. IMPORTANT: Make sure that your new balance does not exceed 50% of your high limit of the credit card you are transferring to because this will greatly affect your credit rating.
If you can’t transfer the high interest balances, make a plan to pay off the highest interest bearing debt first. Budget a certain amount to pay down on the debt each month. (We have calculators that work out the exact amount for the time required for paying off the loan – please contact us for more information.)
Once the first debt is paid off, move on to the next highest interest credit card and so on until all the debts are paid off.
Don’t use credit cards for anything anymore, unless you have the equivalent amount in cash waiting in your account (money that is not allotted for any other expense).
Make a budget and stick to it. Cut down on expenses by buying items on sale, or second hand. Save in advance for larger purchases, so that you don’t have to use credit. (Subscribe to our free newsletter www.scroogeguide.com for money saving and wealth building techniques)
If you find yourself in the debt so deep that you can’t possibly make any payments but the minimal, the Scrooge Guide Financial Group’s G.O.O.D. program might be in order. It is your key to get out of debt, pay off your mortgage faster and to stay out of debt!Please contact us for more information:
Scrooge Guide Financial Group
Tel: (613) 258-3454
Scrooge@scroogeguide.com
www.scroogeguide.com
Interest Rate Update
Today (January 24, 2006) the Bank of Canada raised its key rate by 1/4 percentage point. This means most banks and other lenders will also raise the cost of mortgages, lines of credit and other loans by the same amount over the next few days.
Making Loads of Money
Last month I mentioned a method I'm experimenting with to maximize investment returns. I'm using only ETF's (of course) and have increased the balance by 10% over the past two months. This will equal 60% per annum if the experimant pans out long-term. Basically I go to the ishares site and look at their calcualtors to choose the best performing country regions for the last quarter, month and two months. I also compare this to the best for the last six months. I thne choose th e highest gainers for all those periods. The theory is if it did well over the last several months then it should do well over the next few (at least). WARNING...this is high risk stuff, as high gainers tend to also drop quickly as well. You should set a stop loss to at most 7% of your investment. You should also be aware that the iShares are only available in US dollars. If you are using a Canadian dollar account then you also have exchange rate risk (that is, if the Canadian dollar strengthens the value of the iShare will drop). Most banks and financial advisors make nothing from selling ETF's so you won't hear them being offered very often. Here is the link to the iShares site : http://www.ishares.com
Too Bad, So Sad for Canada
Canadians elected yet another minority government last night. YUCK! Looks like we will be back to the polls in another several months. Another party in power that will have no teeth, and no ability to implement any real change. So from a financial perspective don't count on much financial help coming from the government. With the rise of the NDP and the remaining strength of the BQ we see Canada is changing into a four party political system from the old two party system. Perhaps I should start a Scrooge Party and be number 5...at least it would have an interesting financial policy!
Life Insurance Update
With the New Year here, now is a good time to mark your calendar to have your life insurance looked at. In many cases you may be paying too much. Make sure you get a broker (like us) to look at it. If you are in Ontario we can look into it for you. Otherwise find a good life insurance broker in your area. In some cases a broker will be able to cut your life insurance premiums in half!Mortgage UpdateAnother broker that you should contact is a good mortgage broker, for mortgage renewals, refinancing, new purchases or taking equity out of your home for investments or expenses. If you go to your bank you will be offered only their product, however a broker will shop the entire market for you. We have a very good in-house broker so if you need a mortgage or refinancing quote - contact us.
Need to Contact Us?:newsletter@scroogeguide.com
More contact information is on our website at: http://www.scroogeguide.com/
TERMS OF USE Please note that all information is given on an "as is" basis, without warranty. While every precaution has been taken in the preparation of this material, neither the authors, the Scrooge Guide® nor the Lunan Corporation shall have any liability to any person or entity with respect to any loss or damage caused or alleged to be caused directly or indirectly by the material on this web-site or contained in the Scrooge Guide® newsletter. In this newsletter and on our site we do not give professional advice including and without limitation financial, legal, tax or accounting advice. Nor do we offer a solicitation to buy or sell investments. We offer general information, common sense tips and an educational website and newsletter about frugal living, saving money,and making money.
COPYRIGHTS & TRADEMARKSThe Scrooge Guide is a registered trademark of the Lunan Corporation. All information on this site and contained in The Scrooge Guide® Newsletter and in other attachments and available downloads is copyrighted by the Lunan Corporation. All rights reserved. (c) 2006.
Signed,Robert "Scrooge" Lunan
The Scrooge Guide follows:
The Scrooge Guide is a publication of the Lunan Corporation copyright 2006, all right reserved.
Relief for the “Post Christmas Shopping Blues”
Did you include everybody’s wishes in your Christmas shopping and are now aghast at what it has added up to? Here are a few remedies that you can apply to get those high interest credit cards paid off:
List all of your credit cards and loans with their balances and interest rates and high limits
Sort them by highest interest rate, then amount owing
Check with your credit card company if there is an interest rate special on for balance transfers of other debts (e.g. some lenders have a special on for 4.97% interest rate for all balance transfers until paid in full) Transfer the highest interest paying debts to the credit card with the balance transfer special. IMPORTANT: Make sure that your new balance does not exceed 50% of your high limit of the credit card you are transferring to because this will greatly affect your credit rating.
If you can’t transfer the high interest balances, make a plan to pay off the highest interest bearing debt first. Budget a certain amount to pay down on the debt each month. (We have calculators that work out the exact amount for the time required for paying off the loan – please contact us for more information.)
Once the first debt is paid off, move on to the next highest interest credit card and so on until all the debts are paid off.
Don’t use credit cards for anything anymore, unless you have the equivalent amount in cash waiting in your account (money that is not allotted for any other expense).
Make a budget and stick to it. Cut down on expenses by buying items on sale, or second hand. Save in advance for larger purchases, so that you don’t have to use credit. (Subscribe to our free newsletter www.scroogeguide.com for money saving and wealth building techniques)
If you find yourself in the debt so deep that you can’t possibly make any payments but the minimal, the Scrooge Guide Financial Group’s G.O.O.D. program might be in order. It is your key to get out of debt, pay off your mortgage faster and to stay out of debt!Please contact us for more information:
Scrooge Guide Financial Group
Tel: (613) 258-3454
Scrooge@scroogeguide.com
www.scroogeguide.com
Interest Rate Update
Today (January 24, 2006) the Bank of Canada raised its key rate by 1/4 percentage point. This means most banks and other lenders will also raise the cost of mortgages, lines of credit and other loans by the same amount over the next few days.
Making Loads of Money
Last month I mentioned a method I'm experimenting with to maximize investment returns. I'm using only ETF's (of course) and have increased the balance by 10% over the past two months. This will equal 60% per annum if the experimant pans out long-term. Basically I go to the ishares site and look at their calcualtors to choose the best performing country regions for the last quarter, month and two months. I also compare this to the best for the last six months. I thne choose th e highest gainers for all those periods. The theory is if it did well over the last several months then it should do well over the next few (at least). WARNING...this is high risk stuff, as high gainers tend to also drop quickly as well. You should set a stop loss to at most 7% of your investment. You should also be aware that the iShares are only available in US dollars. If you are using a Canadian dollar account then you also have exchange rate risk (that is, if the Canadian dollar strengthens the value of the iShare will drop). Most banks and financial advisors make nothing from selling ETF's so you won't hear them being offered very often. Here is the link to the iShares site : http://www.ishares.com
Too Bad, So Sad for Canada
Canadians elected yet another minority government last night. YUCK! Looks like we will be back to the polls in another several months. Another party in power that will have no teeth, and no ability to implement any real change. So from a financial perspective don't count on much financial help coming from the government. With the rise of the NDP and the remaining strength of the BQ we see Canada is changing into a four party political system from the old two party system. Perhaps I should start a Scrooge Party and be number 5...at least it would have an interesting financial policy!
Life Insurance Update
With the New Year here, now is a good time to mark your calendar to have your life insurance looked at. In many cases you may be paying too much. Make sure you get a broker (like us) to look at it. If you are in Ontario we can look into it for you. Otherwise find a good life insurance broker in your area. In some cases a broker will be able to cut your life insurance premiums in half!Mortgage UpdateAnother broker that you should contact is a good mortgage broker, for mortgage renewals, refinancing, new purchases or taking equity out of your home for investments or expenses. If you go to your bank you will be offered only their product, however a broker will shop the entire market for you. We have a very good in-house broker so if you need a mortgage or refinancing quote - contact us.
Need to Contact Us?:newsletter@scroogeguide.com
More contact information is on our website at: http://www.scroogeguide.com/
TERMS OF USE Please note that all information is given on an "as is" basis, without warranty. While every precaution has been taken in the preparation of this material, neither the authors, the Scrooge Guide® nor the Lunan Corporation shall have any liability to any person or entity with respect to any loss or damage caused or alleged to be caused directly or indirectly by the material on this web-site or contained in the Scrooge Guide® newsletter. In this newsletter and on our site we do not give professional advice including and without limitation financial, legal, tax or accounting advice. Nor do we offer a solicitation to buy or sell investments. We offer general information, common sense tips and an educational website and newsletter about frugal living, saving money,and making money.
COPYRIGHTS & TRADEMARKSThe Scrooge Guide is a registered trademark of the Lunan Corporation. All information on this site and contained in The Scrooge Guide® Newsletter and in other attachments and available downloads is copyrighted by the Lunan Corporation. All rights reserved. (c) 2006.
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