Dick was in a bit of a pickle.  He had sold Virgin Music to concentrate of Virgin Atlantic Airways, and British Airways were right on his back.  His planes had become a bit older and he wanted to keep his superior experience advantage by adding the new flat TVs to each chair, which BA didn’t have.  He went to the bank to try to borrow a huge amount that I don’t remember, let’s say a $200 million dollar loan to upgrade the planes, and the bank replied “computer says no.”

We all know that Sir Richard doesn’t stop at anything or take no for an answer, so he went back and asked for a loan for $1 billion to buy entirely new planes!  At that point “computer says yes.” He got his loan and grew his company.

My main point is that we need to emulate the wealthy.  The traditional approach to debt is to cut everything and pay it down, while living on cat food and playing scrabble for ten years.  That is what all of the financial guru’s will tell you. Sir Richard wouldn’t do that. He would ask himself, “how can I get those TVs and come out ahead again?”. So ask yourself “How can I pay off my debt and still live my life?”

Here is what I got off the top of my head – what do you come up with?

1. Do something that you love to make more money.
2. Ask for more money from work.
3. Get a head hunter to get me a new higher paying job.
4. Learn to blog and sell advertising space like me!

Grow your way out of your financial problems and win big!  Living on a restricted budget won’t help you live your best life.

Keep Loving Your Money Like Sir Dick,

Dave

1. First, we split the $50 membership fee so it costs us $25 each. If you go twice a year and shop properly you’ll totally save that $25 back.
2. Many of the Costco products are not that great of a deal if you analyze the price compared to what you can get for a smaller portion at No Frills so only buy the awesome deals. Don’t just do your grocery shopping there.
3. Look for the huge portion products that can be easily split.  Like washing detergent, dryer sheets, razors, shampoo, soap, ketchup, etc. That way if you get four huge ketchups you can divide the lot and then have a stock for six months to a year. Razors are a crazy deal. For $14 you can get 52 razors that can be divided amongst my dad, brother and I to last a good year if I can use one razor every few weeks. Compared to buying three for $8 at a drugstore it’s an awesome deal.
4. Buy the huge cheese, chicken breasts, frozen pizzas and burgers at Costco and then split the product physically. Cheese is crazy cheap compared to grocery stores. We just divide it in 1/2 and then re-wrap.  If you get two boxes x three frozen pizzas you can get them for $4.33 each when divided by 2.  Pizzas are $6-9 at the grocery store and  the Costco ones are loaded with toppings and made in Canada.
5. Candies and gum are also a good deal. You can get huge packs of gum that will last you six months that decease the average pack from $1.25 at a convenience store to $0.33. I also get the huge bags of big feet for my office.  I have  some clients that have a very big sweet tooth. The huge bags are cheaper than the dollar store big feet bags when you add it all up.
5. Furniture is a good deal too. It is hard to divide and re-wrap but I was able to get a cast iron bistro table and two chairs for my balcony that was less than $100! The same styled outdoor set anywhere else is almost twice that.

When you do all of your food and consumer good staples and once every six months it’ll not only save you money but time. Time and money that you can re-allocate to doing something that you love.  Win win.

Have an awesome week,
Dave

1. Automatic Savings – Transferring just $50 each week to a high interest savings account can add up to $2,600 plus interest in one year.  ING has a rate of 1.3% as of today! 

2. Keep your longer term savings like bonds and GICs in a Tax-Free Savings Account.  It will help you save the most tax on income producing products like GICs or bonds.  You’ll save the amount you would have paid in tax!

3. Change your payments to accelerated bi-weekly and save over $47,000 in interest and shave 4 years off your mortgage.  Based on a $200,000 mortgage at 7% annual percentage rate on a fixed term over 25 years.

4. Make higher payments than the regular payment.  Interest rates are low right now and the easiest 1% increase will add $126 a month on a $200,000 mortgage.  If rates don’t rise that quickly you’ll be paying down your mortgage faster.  

5. Be sure to only amortize your mortgage over 25 years.  30 and 35 year amortization are a newish feature that gets people buying houses they can’t afford.  If you amortize the same $200,000 mortgage at 7% over 25 years compared to 30 years it’ll only cost you $84 per month more and also save you $53,000 in interest!  

Have  an awesome summer!

Dave

Many dividend-producing stocks are our most established companies and that is why I love them. High yielding sectors are financial, telecom, energy, pharmaceuticals, and consumer goods. When you pick several great companies from each of these sectors you will be able to build a portfolio where you can always count on the dividends and diversification. Everyone knows the saying that diversification is out only free lunch as investors! Over time these quality companies have continuously increased their distributions helping your portfolio grow.

What I do in my portfolio is quite straightforward. Find an index fund that emulates our best dividend stocks. You can pick a U.S. or Canadian top dividend index and it’ll give you a great place to start shopping for stocks. To work through an example I have chosen the XDV, which is the Dow Jones Canada Select Dividend Index ETF (exchange traded funds) from iShares. On their website they list the top 30 companies on the index with their ticker symbols. It also shows you the breakdown of sectors like financials, energy, materials, industrials, telecom, etc.

 The XDV is comprised of the 30 highest yielding, dividend paying, and average payout ratio companies in the Dow Jones Canada Total average.  They had me at highest yielding!  You’ll recognize almost all of the companies on the list and understand their business, which is important.  Remember Warren Buffet’s rule that you have to understand the business if you’re to own the stock. 

 I take the largest companies with the highest yields, and history of increasing dividend payouts and build my portfolio. Customize it to support your personal yield and risk tolerance. If a stock is yielding a higher percentage and you are convinced of their strong fundamentals, buy more shares to increase your overall yield.  You have so many options with dividend portfolios.  Let the dividends build up in your account and when you have enough money by more high yielding companies from the index.  You can also set your account up on a DRIP (Dividend Reinvestment Program) and let it automatically buy more shares each payout for $0 trading costs.  Many of the large dividend paying companies have a discount if you sign up for the DRIP program.  BMO gives you a 2% discount every time your dividends re-invest in shares.  As prices fluctuate you lower your average cost by buying at the lows and increasing your overall yield of the portfolio. 

 Building large positions of these dividend yielding blue chip stocks will also give you sophisticated trading opportunities. You can create additional streams of income from writing “covered option calls”.  These are sophisticated trading strategies that are meant for sophisticated traders but if you master them you can increase your yield dramatically on your portfolio.  The more you learn about money the more you can make to live your best life.  

 My overall idea is that by owning the dividend paying stocks outright you have the potential to make even more money and you know I love to do that.  Creating a portfolio that is diversified and paying solid dividends will ensure a retirement asset to fulfill your goals and aspirations. 

Hope you loved to blog and I hope you have a profitable week,

Dave

1. Don’t preheat the oven – unless you are baking.  It just slows down cooking times and wastes energy.  We’re all about efficiency over here.  

2. Use a BBQ for spring cooking.  It is cost effective and everything tastes better on the barbie.  My mom cooks everything including turkeys on a BBQ!  It’s amazing how well it turns out.

3. Don’t run more than one appliance at a time.  Now that spring is here you can put the wet clothes out on a line.  That’ll save you dryer energy from April to October.  Not too shabby at all.  

4. Try to run the big appliances after 8pm.  That is when you get the best rates and save the cute cuddly fuzzy monies.  

5. Change all of your light bulbs to CFL bulbs.  They save a ton of energy and last way longer.  Win win!  

6. Always unplug anything that you’re not using.  Chargers and appliances still drain energy to power their little lights when they’re plugged in and not being used.  

7. Unplug everything you can when you go away.  I travel quite a bit and when I’m out of town I’ll unplug everything I can.  Watch when your bill comes in that month to really see how much you save.  

8. Use timers for outside lights.  Having them burning away all night adds up.

9. Power bars now come with timers.  You can have them shut down when you’re asleep so that your cable boxes and stereo equipment isn’t using power when you’re sleeping. 

10. Play a game with yourself to see if you can keep dropping your electricity bill each month.  It’s amazing how much money you can find when you’re always looking for the savings.  Each month you reduce your bill reward yourself for being responsible for the environment and your money.  You deserve it Tiger! 

Have an awesome week and don’t for get to sign up for my blogs with the RSS feed,

Dave

I just booked a flight to Australia to visit some close friends that moved there, and I wanted to share my tricks of the trade on how to get the best and cheapest flight.  The more money I save on the flight and hotels the more I can scuba dive, horseback ride, or visit other cities.  I always aim to have the best trip I can by saving on travel and hotel costs, then spending on the things that will make the trip truly memorable.  

Flights:

1. First, go see a travel agent and ask for the best rate from your city to the destination.  They’ll give you a price to start with.  Get quotes directly from your city and also quotes from smaller cities that are nearby.  I’m flying from Buffalo to Sydney, which is only a 1.5 hour drive from Toronto but saves me over $300!  There is a cheap bus from Toronto right to the Buffalo airport but I’m hooking a ride with my brother who wants to check out the Brooks Brothers outlet, which is a win win for both of us.  

2. Second, open a window with every cheap flight website you can find, such as expedia, travelzoo, selloffvacations, travelocity, priceline, etc.  There are even sites that will check all of the cheap flight sites for you, like cheapflights.ca, bookingbuddy.com, or farecompare.com.  Search all of them, slightly changing the departure and arrival dates until you’ve found the best price.  But you don’t book!  Call up Flight Centre with the flight still on your screen and they’ll beat the price by $10, and in my case they got my Australian Visa for me. I love my money and time!  

3. Travelling to Europe is a bit different.  Find the best rate into a hub like Amerstadam, London or Frankfurt.  Then try to get a Ryan Air, German Wind, or Easy Jet flight from the hub to your destination.  You’ll save literally thousands if you’re flying to a remote destination like I did when I flew to Malta.  That trip cost $800 to London and then $90 to Malta on Ryan Air.  That saved me more than $1,000!  
Hotels:
1. Hotels work the same way.  Open nine hundred windows on your computer and find the best price.  Google for a “promo code” for the hotel that you want and see if you can bring the price down even more.  Make sure you watch for any service fees or taxes before you book.  Click through to the page where you enter your credit card info and compare prices from the total sum. 
2. If you have a company like I do, ask to register for their corporate rate. This will guarantee you savings during the busy months when deals are scarce.  They treat their corporate clients like gold, which is a hidden plus. 

3. Whenever I travel I always aim to stay at the trendiest boutique hotels or historic hotels for less than a discount hotel.  I’ve done this in Greece, Sweden, Germany, Egypt, Malta, LA, and NYC. Why not stay at the best places in the best locations? You deserve it!
4. Get a US$ Credit Card if you stay in the US for long periods of time.  Canadian credit card companies charge 2.5% on top of the exchange rate, so if you are in the US enough to charge $2,000 in hotel and dinner expenses it will save you $50 from that 2.5% fee!  Find the best foreign exchange rate place and pay off the card when you get home.  In my experience the ULTIMATE place in Toronto to exchange money is under the Sheridan Hotel.  Tell her that Dave sent you for an extra special price  
I’ll be away for two weeks putting shrimps on the barbie, so I’ll write about all the ways I saved money down under!
Dave

1.  Scouting Parties:  Shopping for the best deal is a war of attrition.  You need to scout out what you LOVE, and then keep checking back for it to go on sale.  I have a routine where I keep checking my favourite stores to see when my prize sweater or amazing shoes go on sale.  I keep my visits frequent until I don’t think my target item will go any cheaper or I risk the chance of losing my size–and then I pull the trigger.  Buy it with cash and celebrate your victory.  If it doesn’t go on sale or I lose my size–I didn’t really want it that badly.   
 
2. Love it or Leave it:  Make sure that when you buy, you buy something that makes your heart go “thump”.  Buying because you’re bored, your friend bought something and you feel you need to also, or because you just got dumped is no way to shop.  Make sure that when you try on that sweater or swirl in that dress it gives you butterflies.  You’ll wear it a hundred more times than something that you kinda like.  Plus, think of all those extra sweaters that you half-like sitting in your closet.  If you hadn’t bought them you could have allocated their costs toward your ULTIMATE something, something.  

3. Buy Classics:  Make sure that when you buy, you buy good quality, classic products that you won’t have to pitch next season.  We are all about the average cost per wear over here.  A classic piece is timeless and contributes to your clothing basics.  Keep in mind what classics you still need to buy, and when shopping hit them up first. 
 
4. Befriend the Sales People:  If you’re charming and lovely with the sales people they’ll tell you when things are going on sale, hold things for you, and invite you to the friends and family nights.  Allies are crucial in retail reconnaissance.

5. Save the Money First: Make sure you have the money saved before you buy anything.  This allows for you to truly enjoy the product without any money malice.  Open a savings account and deposit your budgeted allowance for shopping into it.  Make a list of everything that you want to buy in priority.  If you see a fierce fleecy thing – add it to the list.  When you have enough cash to buy the number one shopping priority on your list, and it’s the right price, strike!  
 
These strategies will help you to get things for the best price and guilt free.  It makes shopping more enjoyable and gets you more bang for your buck.  You are now master of your mall jungle!  

Love your money and there will be way more to love,
 
Dave

1. Set your payments from monthly to bi-weekly–or even better weekly. Bi-weekly payment means you make one extra payment per year compared to monthly. Over the amortization time of your mortgage these extra payments will save you thousands.  
 2. Round up your payments. If your bi-weekly payments are $829.68, for example, round them up to $900. The extra $70.32 bi-weekly will save you even more over the amortization of your mortgage.  

It is so hard to step away from your prime minus variable rates when they are so low. I had a rate of prime -.85 before I sold my place. If you do decide to stick to your variable rate and hope that interest rates climb slowly over the next few years, increase your payments so that you are making the payments that you would be in a five year fixed. There are two advantages to this:

1. You will be paying down your principal very quickly, which will equal less principal to pay back when rates go back up. It will save you bundles in the long run.  
2. You’ll also be used to the payments at a higher interest rate. When you need to renew or decide to go with a fixed rate, you’ll have a few years of already making payments at that higher rate.  
 
Try out some of the mortgage calculators online like the one below to see how much interest you save with the different options, along with how many years you’ll “bump off” your amortization, instead of it bumping you off. And mortgage free years are years that you can spend that mortgage money on your extra special life!  

You’re on your way! What is your next step? Money. Now ask yourself, how can I possibly get this boat? How much do you have saved? How much will it cost? How many months of saving will it take to buy the boat? Is there something that I don’t want that I could sell to contribute to the boat, like a smaller boat or old tires in the garage? Keep asking how, how, how can I get that boat in a practical and responsible manner?  What resources can support me to get this boat?
  
Once you have a financial plan (see my blog on how to get a free car; it works for boats too), have the savings come out automatically from your pay. You’ll know every month that when a deduction towards your ULTIMATE dream comes off your pay, you’re getting closer to your dream. Be sure to get the best interest possible for your dream too. Shop around for the best interest rate to contribute to your goal. You’ll find yourself putting away your birthday money, working extra shifts, or cutting back on dinners out to get to your ideal future faster.  
Whatever you dream of when you’re alone, this is the day to make your very first step towards it. How do you eat an elephant? One bite at a time.