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Household Indebtedness in Canada Climbing To New Heights

Household indebtedness climbing to new heights
Household indebtedness climbing to new heights

Household indebtedness in Canada is climbing to new heights! Why are Canadians acquiring so much debt and ignoring lessons from the USA’s sub prime debacle? Cheap, easy money is addictive! Besides, history would suggest that in future, people won’t own their actions.  When housing prices fall and interest rates rise, many people will use the victim card. They will blame financial firms, merchants, the one percent … everyone, but them.

Household Indebtedness Warnings

Let’s look closely at the size of this household indebtedness problem as reported over the past three years: (more…)

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3-Ways To Use Your Tax Refund

Tax refund excitement
Tax refund excitement

You can’t wait to get your tax refund to buy an Apple Watch, right? Perfect timing, isn’t it? You’ve ordered the watch and won’t pay until June when it will be shipped. And voilà! Your refund will be available.

This is your special time of the year. Waiting for the government to confirm your tax refund and send your check. It doesn’t get better than this. That’s the essence of a recent discussion with an elated individual.

Regrettably, I could not agree with this person, whom I will call, Tom. I know how deeply indented he is. I suggested to Tom that he should consider using the tax refund to repay his debts. I told Tom I believe present life stage and circumstances should guide the use of tax refunds. First, however, it is important to know what the refund represents. (more…)

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Is Your Business Customer centric?

Customer centric businesses serve all stakeholders
Customer centric businesses serve all stakeholders

Customer centric firms are primed to create value for all stakeholders. Is your business customer centric? The late management guru, scholar, and author, Peter Drucker said, “The purpose of a business is to create a customer.” No customers, no business. No students, no school. No sports fans, no stadium! It’s that simple. If we believe this, why is poor customer service rife?

Oligopolies are not Customer centric

In Canada, two key industries, banking and telecommunications, are oligopolies. They are not customer centric. Yet, consumers accept the lack of effective competition, and are complacent. Often, firms in these industries provide poor services while hiking fees often. Ironically, when the government wanted more competition in telecommunications recently, companies played the patriotism card successfully. (more…)

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Is Your Résumé Working For You?

Résumé Working For You?
Résumé Working For You?

Is you résumé working for you? Your résumé is a marketing document meant to show a recruiter you are the best fit for the advertised job.Your résumé is the start of building your brand. It is not meant to convey your life story.

Your goal in writing the résumé is to show clearly, concisely, on one page, maximum two, why you are the best fit for the organization. Effectively, how you might create superior value than someone else.

A two page résumé is better than a cluttered one page document. Eliminate fluff, be stingy—show only information that will help someone decide if he or she should invite you for an interview. Your résumé must pass the eye test. Does it look crammed? If it does, reduce the words. These are a few areas that should be in and out of the résumé: (more…)

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Why are Christian Bookstores Struggling?

Christian Finance Advice Blog is pleased to present this blog from two budding authors, Briercrest College & Seminary seniors, Nicole Chenard and Meghan Friesen.

Christian bookstore must follow solid business practices
Christian bookstore must follow solid business practices

There was a time when Christian bookstores were prominent in the community and seen as a relevant resource for churches and Christians. However, like so many other businesses, times and consumer demands changed and most Christian bookstores did not adapt. In fact, many failed. They struggled to provide adequate returns on investment, and often they did not implement effective marketing strategies.

Many Christian business owners justified their poor business performance by saying, God would meet our needs; but they did not perform critical research to adapt to the changing marketplace. This lack of research crippled their businesses. Simply put, Christian bookstores performed sub optimally because they did not apply effective Bible-based business strategies, management systems, and performance metrics routinely.

Why don’t these businesses provide adequate returns on investments? We believe there are at least five main reasons:

(more…)

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Oil Price Drop, Blessing Or Curse For Canada?

Is the oil price drop a blessing or a curse to the Canadian economy?  It is a reversal of the 1970s. The oil shock of the 1970’s caused panic worldwide. Businesses scampered to become more energy efficient. Under the guise of discouraging consumption, governments seized the chance to raise taxes on energy related income and energy use. And economies adjusted to high energy prices, which became the acceptable norm.

Oil price drop needs changed behaviour
Oil price drop needs changed behaviour

Oil Price Drop Shows Economy’s Weakness

In the past ten years, the Canadian economy, and the Canadian dollar strengthened. Strong and growing oil prices, among other fuelled this boom. Meanwhile, the world has been congratulating Canada on its skillful economic prowess. People overlooked Canada’s excessive household and provincial debt levels (excluding Saskatchewan). Ontario has been spending recklessly and racking debt and deficits at an alarming rate.

Alberta appeared to be doing well. But, the real situation has surfaced. Lower oil prices mean less income. In turn, this shows wasteful spending that oil revenues masked.  Meanwhile the Federal government’s budget-balancing games continue.

Today, the fragility of the Canadian economy is being exposed. The excessive dependence on energy and commodities generally has been highlighted. Instead of rejoicing that lower oil prices will boost many segments of the economy, bloated governments are worried they won’t be able to rake in energy related taxes. Will this steep drop in energy prices cause governments to see their waste and the need to shrink? (more…)

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Why Target Canada Failed: Target Off The Mark To Start

Why Target Canada failed? Its poor start doomed it for failure. Target gave its rivals almost two years to respond to its entry in Canada. In 2011, Target announced it would buy Zellers’ leases, but only in 2013 did Target open its first store in Canada. Then, it tried to make up lost ground and ramped up too quickly. This two year delay alone is a valid reason why Target Canada failed. What was Target thinking?

It was no surprise when on January 15, Target said it was closing its Canadian operations. This will affect 17,600 workers and cost its owners over $6 billion pretax. What a waste!

Target saw a chance for its first venture outside the USA. It viewed struggling Canadian discount retailer, Zellers as a ready made vehicle. So, it bought Zellers’ store leases–not its business–for $1.8 billion. But, Target made basic missteps that led to its demise. These are three major blunders why Target Canada failed:

  1. Protracted entry, rapid ramp up
  2. Brand promise neglected
  3. Competitive advantage overlooked
Why Target Canada Failed? Target Was off the mark from the start
Why Target Canada Failed? Target Was off the mark from the start

Why Target Canada Failed: Protracted Entry, Rapid Ramp Up

Target gave its rivals almost two years to react to its entry in Canada. In 2011, it announced it would buy Zellers’ leases. However, it did not open its first store until 2013. No doubt Target realized it was late, and opened over 100 stores during 2013 in former Zellers’ locations! During this rapid ramp up, many stores had empty shelves. From the start, Target Canada did not connect with its customers. It built up massive losses. Yet, it continued to open more stores in 2013, even with supply chain problems.
(more…)

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3 Areas Small Business Owners Should Address Regularly

A small business owner has several challenges. Often he or she must play every important role. This can be stressful. However, I have been mentoring a few small business owners for the past few years, and each small business owner I  coached was thrilled to be his and her own boss. Besides,  each understood that it’s normal in a small business to not employ full-time specialists in each major activity.

I gained gear insights in the workings of these small businesses. Though I worked mainly in a large multinational business in many countries, one fact is clear. Apart from the scale, most challenges small and large business issues face daily are similar. Still, I think there are three areas a small business owner should address regularly. And a new year is a perfect time to do it.

As a small business owner you have the joy of being your own boss. However, this brings responsibility for the entire business. Unless you pause regularly to examine how you are doing, you can burn out emotionally, mentally, spiritually, and financially. This happens gradually.

(more…)

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3 Investment Fundamentals For The Long Term

Investment fundamentals are key to investing. Before you invest, always recall these three for long term investing. First, there is nothing new in stock market performances. Second, nobody can predict future stock market values. Third, there is a time to save and a time to invest. I will develop each later.

The Old Covenant book of the Bible, Ecclesiastes 3:1-8, tells us there is a time for everything under the sun; book-ended with a time to be born and a time to die. This same book of the Bible, chapter one verse nine, reminds us there is nothing new under the sun–this includes gyrations in stock markets.

Undoubtedly, the stock market is sizzling and is due for a correction. When? Nobody knows; but for months, many people, including me, have been predicting a fall. Meanwhile, what should you do with your investments? Get out of the market and put everything in savings accounts or equivalents? Do nothing? Do something in the middle?

When your attitude is money-making, your only strategy, usually unconsciously, is to do whatever it takes to get more. If you have a plan, it has no substance because making money dominates it; your emotions fluctuate regularly depending on the state of the market; you take this emotional instability into your relationships, and generally, you live a highly strung, stressful life. This leads to greed-driven, speculative, short-term, high risk decisions that create panic and end in disaster.

No wonder after a sharp fall in the stock market many people complain they lost money, although a fall in stock prices, per se,  does not create losses. Often, nothing but fear or greed drove prices up and caused them to fall.

Here are three investment fundamentals for long term investing:

1. Investment Fundamentals Key to Stock Market performances

Did investment fundamentals change?
Did investment fundamentals change?

Stock prices rise and stock prices fall. That’s not a new phenomenon. Learn basic investing fundaments, not to become an expert, but to gain general knowledge of the process, players, and products. Don’t panic when the market falls because the market cycles over time, fluctuates wildly, sometimes daily. Ignore short-term variations, and remember you lose nothing when stock prices fall, unless you sell your holdings.

With an attitude to invest and not gamble, you will invest when you fulfill prerequisites (see three below). You won’t feel pressured to sell investments each time your stocks’ prices fall because you will have goals and plans supporting your investment decisions. Your investment goals will be the destination reflecting appropriate time-frames; these goals might change over time as your circumstances change. Meanwhile, your investing activities will be the journey to reach those goals systematically, methodically, and consistently.

Under the Lord’s guidance, develop a long-term, carefully crafted investment plan to invest funds not needed in the household budget. Understand when to buy and when to sell–buy based on your research and goals, and sell when your pre-established conditions exist. Don’t forget tax effects of selling.

2. Nobody can predict the timing of future Stock Market values

Did investment fundamentals change?
Did investment fundamentals change?

The most important investment basic to grasp is, God alone knows the future. No matter how qualified your investment advisor, TV investment guru, university investment professor, she does not know future results of the Stock Market. This is an indisputable fact you must accept before, and when you invest.

So-called experts will tell you a market correction is due; but not one of us knows when. Your best approach is to understand you are investing God’s money, work with a fee-only investment advisor, inform yourself generally, and know your informed opinion is as good and reliable as your advisor’s or any other person’s.

3. There is a time to save and a time to invest

The best answer to every financial question is, it depends. What’s your personal situation? Do you have debt? Do you have savings for big ticket and emergency items? Your time to invest is after you clear your debts, including your mortgage, saved for major predictable buys such as paying cash for your next car, and saved for “predictable” emergencies.

If you are investing and you do not fulfill these conditions, develop a strategy to exit the market; but only after you understand potential effects of that decision. Don’t do this alone. Seek advice from a fee only investment advisor. But please understand that this professional investment advisor will not necessarily do better at investing than you. That’s why you must get to know the rationale for her advice, ponder it, pray about it, and then choose the path ahead.

Most of all, know your precise reasons for investing and your investment time horizon. If your investment goal is to “make money,” you have a real problem. Do you want to make money? Print it! Doing anything with a goal to make money is gambling and speculating.

Before you invest, you must study: zoom in on the details of the specific investment, then zoom out to look at the bigger picture. As you journey, review your investments, compare them with your goals and plans, and depending on the result, act–do nothing, sell, buy, or a combination–based on information gleaned from the review.

© 2014, Michel A. Bell

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Stress Test Your Budget Before The Holiday Shopping Season

Stress test your budget before the holiday shopping season starts. The so-called holiday shopping season, pre-Thanksgiving, Thanksgiving, Black Friday, and Christmas (November and December) is here, and merchants are thrilled about expected improvements to their financial results. They know their deals, sales, and enticements will bait naive consumers to spend, and spend, and spend. And voilà! Their financial statements will sparkle. How do consumers prepare to withstand merchants seduction? Start with a stress test.

Stress Test Your Budget With Managing God’s Money Quick Test

Stress Test Your Budget Before The Holiday Shopping Season
Stress Test Your Budget Before The Holiday Shopping Season

A recent National Research Federation’s consumer spending survey estimated retail sales during the holiday season at $616.9 billion, about 20% of the estimated year’s sales, and 4.1% over the same period in 2013. The survey found the average shopper plans to increase spending around five percent to $804, compared to 2013. (more…)

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