Jun 14

Gusto ninyong yumaman? Tuturuan ko kayo!

Blog, Video Blog No Comments »

Click here if you can’t see the embedded video.

Thanks for watching!

We welcome your questions and feedback.

Bernadette Laxamana’s Mortgage Blog – Tagalog Version

You can comment on this blog here.

Gusto mo bang yumaman?

Ano ba ang ibig sabihin ng yaman?  Ang talagang measurement ng yaman ay tinatawag nating Net Worth.  Net worth is equal to wealth. Ang formula ng net worth ay ito:

Net Worth or Wealth = Assets minus Liabilities.

Ang iyong bahay, stocks, RRSP, savings, TFSA, Term deposit, bonds, cash value ng ating insurance..lahat ng yan ay assets.   Puwede rin ninyong idagdag ang kotse at alahas.   Liabilities naman ay lahat ng inyong utang sa credit card, mortgage, line of credit, overdraft, RRSP loan, car loan.    Mas malaki ang assets or mas mababa ang liabilities but mataas ang net worth ninyo.  Yan ang measure ng inyong yaman.

Ang focus natin ngayon ay yung pinamalaki ninyong asset at liability.  Ang bahay ninyo at ang inyong mortgage.  Pag nabili na ninyo ang inyong bahay, puwede baninyong maimpluwensiyahan ang value nito ng walang renovation?  No.  Ang future value ng inyong bahay ay nasasa kamay ng market, ng economy, ng improvements sa inyong area ng city.  Lahat yan wala kayong control.

Eh yung inyong mortgage may impluwensiya ba kayo doon?  Yes na yes!  Pero the only way na ma-iimpluwensiyahan nyo yan ay through hardwork at management.

Minsan masyado kayong nag-fofocus sa interes.  Tandaan ninyo, ang interest ay pang-attract lamang para masilo kayo ng bangko or financial institution.  Ang pinaka importante ay kung magkanong interest ang babayaran ninyo sa loob ng 3 years or 5 years or kung anuman ang term ng inyong mortgage at higit sa lahat…magkano ang inyong balanse pag nagmature ang inyong mortgage at kailangan ninyo ulit na mag-renew.  Samantalang iyon ang pinaka importante.

Hindi ko sinasasabing hindi importante ang interest rate.  Pero dapat malaman mo na hindi iyon ang whole story.  Merong mga kliyente ako na mas malaki ang nabayaran nila sa kanilang mortgage dahil inayos nila ang kanilang cash flow.  Tandaan ninyo ang exposure and risk ninyo sa interest rate ay bumababa each time na binabawsan ninyo ang inyong principal.

Gusto mo bang yumaman?  Sa palagay mo ba pag nakakuha ka ng mortgage na mas mababa by .10% or maybe $10-$20 per month ay lalaki ng iyong Net worth?  No way!

The best way na yumaman ka ay for you to set a goal,  manage your cash flow, plan   and work hard on rapid debt repayment.  Paano mo ba mababayaran ng mabilis ang iyong mortgage?

Here are my best tips and advise:

1>    Lahat ng mortgage merong pre-payment privilege at accelerate payment option.  I-take advantage ninyo yon.  Pag kumuha kayo ng accelerated bi-weekly payment, increase your payment by 15% every year, or make one extra double payment every year.  Minus 3 years yon sa inyong amortization.  Imagine 3 years na walang mortgage payment. Yung $2000 per month ang inyong mortgage payment, that’s a savings of $72,000!  Idagdag ninyo yon sa inyong assets, tataas ang inyong net worth

2>    Kung meron kayong variable rate mortgage.  Dapat ang monthly payment ninyo naka set-up as if nag-babayad kayo ng fixed rate mortgage.  Rapid repayment talaga yon, mas malaki ang pumupunta ngayon sa inyong principal.

3>    Annual review.  Ang mga taong merong mga stocks or GIC palagi nilang ni-rereview yong sometimes more than once a year.  Pero hindi nila ni-review ang kanilang mortgage taun-taon.  Dapat every year i-review ninyo ang inyong mortgage para ma-maximize ninyo ang inyong potential savings at cash flow.  Tignan ninyo kung meron kayong equity para mag-consolidate, or mag-increase ng RRSP or investments, upgrade or purchase another property.  Let your equity work for you.  Diba ang financial status ninyo puwedeng mag-change every year?  Bakit hindi ninyo pag-aralan yon in conjunction with yor mortgage and check if on track pa rin kayo with your financial plan?

Ang mga suggestion ko ay hindi get rich schemes, pero lahat ng yan ay puwedeng makatulong sa inyo para lumaki ang inyong equity or net worth.  As a result lalaki ang inyong yaman.

Lahat ng libro about making money e.g. The Richest Man in Babylon, Millionaire Next Door and David’s Bach’s various books about Finishing Rich ay iisa ang theme, getting rich = working hard, saving more than what we spend and burning our debt.  Binigyan ko kayo ng tips pero the rest of the work is up to you.

Tandaan ninyo, hindi ninyo ma-iinfluence ang value ng inyong bahay.  Pero makokontrol ninyo ang inyong pinaka-malaking utang para ma-improve ang inyong net worth para maging mas mayaman kayo over time.

There’s money in your mortgage, when you go home, I suggest you find it!

Thanks for reading!

We welcome your questions and feedback.

Bernadette Laxamana’s Mortgage Blog – Tagalog Version

You can comment on this blog here.

Share
Tagged with: • • • • •
Jun 14

There’s money in your mortgage…let me help you find it!

Blog No Comments »

Did you know that the biggest debt in your life could also be your biggest source of wealth?

Let me demonstrate:

Networth or Wealth = Assets – Liabilities

Assets comprise of your home, stocks, RRSPs, savings, and the like.  Liabilities are all your debts combined.  Your biggest asset is your home which is what we are going to focus on and your biggest debt is your mortgage.

Therefore, the equation above could be rewritten to say:

Wealth = Home – Mortgage

Once you have bought your home, can you directly influence its value without taking into account renovations?  No.  You could say your home’s appreciation is affected by housing market conditions or even the world economy – both external factors which are beyond your control.  I suggest then that we do not spend too much time and energy on factors we cannot control.

What about your mortgage, could you influence it at all?  Yes indeed, but the only way you can influence this is through hard work and management.

Here’s an excerpt from an Advisor.ca article by Stephanie Holmes on June 7:

“Mistakes that borrowers make sometimes is they act like magpies.  Magpies are basically slightly more interesting crows. They are known scavengers with a high degree of intelligence but most famously they are strongly attracted to “shiny” objects and will even steal them.  A while ago, I was having a discussion with a fellow advisor about how easily distracted we can all get by interest rates and that we often fail to see the total cost of borrowing. She replied: “The rate is the shiny thing.” I took it from there.

When it comes to borrowing far too many of us are like magpies. We are easily distracted by or attracted to the “shiny thing”.

For many, the rate is truly a shiny thing when it comes to financing our homes. What really matters is how much to we pay in interest over the full-term of the mortgage and the balance that’s left when we are exposed to new rates.

No one seems to be focused on this at all. I’ve had so many advisors tell me about how concerned they are about rising rates.

Don’t get me wrong, rate is an important factor and not to be ignored and it is the easiest thing to sell people on. However, rate isn’t the whole story. I’ve seen many a client get much further ahead by structuring their cash flow so they can pay down a variable rate, open loan much faster. The exposure to rates is reduced every time the put a dollar toward their mortgage. Sure, the rate isn’t locked in, but if done right, the risk of the rate can be nearly eliminated by proper cash flow management and rapid debt repayment.”

So who wants to be wealthy?  Do you think a rate difference of .10% or .25% will make you wealthy? No!

The only way for you to achieve higher levels of wealth is to set a goal, plan and work hard to get there.  Take control of your life.  Manage your cash flow and work on rapid debt repayment.  In terms of your mortgage, how could you burn this debt fast?  Incidentally if you forget my name, the best way to remember is “Burn a debt”.  I will give you tips on how to burn your debt fast.

First tip:

Payment privileges.  Take advantage of them.  Accelerated bi-weekly payments, increase your payments every year, make additional payment e.g.  make an extra double payment every year.   Did you know that if you do just one thing, one thing out of this…you would take off 3 years of mortgage payments.  If your mortgage payment is $2000 per month that’s a savings of $72,000!   Assets go up…liabilities go down.

Second tip: (how many of you have a variable mortgage?)

Variable mortgage payments – how many of you have a variable rate mortgage?  I suggest you set the payment at the same levels as those required for a 5 year fixed mortgage.  This allows you to pay more towards the principal every month.  I have a strategy called “Inflation Hedge Strategy” which results in providing clients with $20-30K in equity. I will talk about this in a future blog.

Third tip:

Annual review process – interestingly enough most people review their asset or stock portfolio quarterly but they don’t review their mortgage annually.  You should sit down with your mortgage broker once a year to look at potential ways to maximize savings.  Perhaps your rate is higher than what’s available in the market, or maybe you have equity in your home upgrade.  You may want to consolidate your debts or increase your RRSP or stock portfolio.  Isn’t it true that your financial picture changes every year?  Why won’t you review it in conjunction with your mortgage and find out if you are still on track with your financial plan?

Can you get rich quick with these suggestions? No.  But will you get rich for sure? Yes.

If you read books on achieving wealth e.g. Richest man in Babylon, Millionaire Next Door, David Bach’s Finish Rich books, all of them teach us  that the key to getting rich is to work hard, to save more than we spend and to get rid of our debt.  I have given you some tips on how to do that.  But the rest of the work is up to you.

Remember, you cannot directly influence the value of your home.  But you can control your biggest debt to improve your net worth and become wealthier over time.  I have given you tips on how to burn your debt.   Take advantage of your prepayment privileges, if you have a variable rate mortgage change your payment as if you are paying a fixed rate mortgage, and finally review your mortgage annually.

There’s wealth and money in your mortgage.   I suggest that when you go home tonight, to go find it!

Thanks for reading!

We welcome your questions and feedback.

Bernadette Laxamana’s Mortgage Blog

You can comment on this blog here.

Share
Tagged with: • • • • • • •
Jan 26

Jan.26/10 Mortgage Update-Tagalog version

Video Blog 2 Comments »

Bernadette Laxamana’s Mortgage Update – Tagalog Version

You can comment on this blog here.

Share
Tagged with:
Jan 26

Jan.26/10 Mortgage Update-English Version

Blog No Comments »

Good day everyone, today’s topic is about building your current net worth and your financial future.

But before that I would like to ask for your help on something.  Our company is growing and in my quest to provide better, faster and higher levels of service, I am looking for a Client Relationship Manager who has account management or customer service experience, extremely fluent in both English and Filipino and willing to work hard to grow our client base.  If you know somebody please email me and I will send you the qualifications and position description.

Okay back to our topic for today, First of all I’d like to talk about the concept of net worth. Your net worth is simply the difference between what you own (assets) and what you owe (liabilities). It gives you a picture of your financial health at a specific point in time.

Ideally, you want to see your assets increase and your liabilities decrease over the long term. Completing the net worth statement at least on an annual basis will help you measure your progress toward achieving your goals.  And I know one of our major goals is to retire comfortably.

There are three levels of retirement according to David Aston of MoneySense Magazine, who was profiled in a January 18th article published by Canadian Business.

First is the No-Frills Retirement whereby a couple rents (rather than owns), has no vehicles (use public transit), and it doesn’t include spare cash for even minor indulgences e.g. cable TV or alcohol.  This is not something worth shooting for but it does budget for three nutritious home prepared meals every day, a one-bedroom apartment plus utilities, along with typical health-care costs and other essentials like clothing and personal care products.  The cost is $20,200 to $27,400, which means the combination of full Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) program for low income seniors pretty much covers all of this.  Canadians who have worked most of their lives can also usually count on substantial Canada Pension Plan payouts in retirement. A couple which receives the average CPP payout, plus maximum OAS, and maybe a little bit of GIS, can expect to receive almost $30,000 a year. So you can relax about the worst-case scenario: even if you don’t save at all, you’re not going to have to live off cat food.

Second is Middle-class retirement. Most Canadians, of course, hope to do better than bare-bones. Bill VanGorder, 66, the Nova Scotia chair of CARP finds that increasingly seniors want to travel, pursue sometimes pricey hobbies like golf, eat out at restaurants, and maintain cottages or second homes in warm places. For the most part, this lifestyle is about having experiences and being active, with lots of travelling rather than having more possessions.

According to Statistics Canada, median spending by a couple over 65 is about $40,000 a year, and average spending is about $51,000. How much do you need? Assuming you receive about $30,000 a year from CPP and OAS and have no employer pension, you’ll need a nest egg that can support an additional $10,000 to $30,000 a year in extra spending, plus inflation adjustments. Financial planning research suggests that you need retirement savings that amount to 25 times your annual retirement spend (not including CPP and OAS) if you want to keep spending that much for the rest of your life. So for a typical middle-class retirement, you need a nest egg of $250,000 ($10,000 x 25) if you just want to spend the median amount, but if you really want lots of travelling in exotic places you are looking at a nest egg of $750,000 ($30,000 x 25).

Third option is Retirement deluxe. Once you get beyond the typical middle-class retirement, costs tend to skyrocket. Norbert Schlenker, a fee-only financial planner with Libra Investment Management on Salt Spring Island, B.C., says that at this level the fundamentals don’t change—people still typically have a house, two cars, restaurant meals and vacations—it’s just that the house is bigger, the cars are fancier, the restaurants are more exclusive, and the vacations more exotic. Here you are more likely to find the trophy kitchen, memberships in a golf or boating club, professionally designed and maintained gardens. Such retirees are more likely to own a vacation home, and there is more money available for spoiling the kids and grandkids. There’s no hard and fast cutoff for the deluxe life, but if you’re spending $100,000 or more each year per couple, you’re well into the realm of truly disposable income. How much do you need? Assuming you get $30,000 a year from CPP and OAS, you’ll need retirement savings that can provide you with an additional $70,000 a year, which means a $1.75-million nest egg!

In conclusion, have a picture of what you want your retirement to look like.  You don’t have to shoot for retirement deluxe if it’s not realistic for you, but how would you know where you want to go if you don’t know where you are and you don’t have a map towards your destination.  Your current net worth is where you are now, your financial plan is your map and your ultimate retirement goal is where you are going. If you want to start planning your future, give me a call and we’ll sit down and build it together.

Bernadette Laxamana’s Mortgage Update – English Version

You can comment on this blog here.

Share
Tagged with:
preload preload preload

Website Maintained by Genex Marketing