Would you fail a liquidity test too?

The inspiration for this article comes from two sources. One the article about BCE takeover falling apart and the other today being Black Friday in the US. At first glance you may have a hard time figuring out how these two events are connected, however upon closer inspection they are essentially about the same thing.

The Ontario Teachers Pension Plan take over of BCE (Bell Canada Enterprise) quickly evaporated this week thanks to a 5 line clause in their agreement. The basis of that clause was a solvency test which they failed, in layman’s terms, their debts outweighed their assets. Black Friday, the day where retailers hope to finely get into the black (profitability).

Take a look at your own life, if you were faced with a life emergency and were forced to liquidate everything, would your debts outweigh your assets? Answering the following questions will give you a better idea.

Do you own your own home or do you rent?

Did you use 100% financing to purchase your home?

Are you leasing your car, truck or van?

Do you have money put away for a rainy day? The rule of thumb is 3 months salary.

Are you saving for your retirement? If not you should start and soon. See my friend Steve and think about direct deposit so you would not miss it. Retirement may come sooner than you think and the government may not have any money left ( thanks to all these bailouts) to subsidize your retirement with OAS or CPP.

The point that I am trying to make is this, do you own your stuff or does someone else? If you rent you are helping someone else build equity. If you bought your home with zero down (100% financing) you run the risk of not being able to get what you paid for it if you were forced to sell it if your local market is now depreciating. Also if you leased your vehicle you also run the risk now more than ever of having to pay more than it is worth at the end of  your lease to keep it.  

There is no better time than now to take a look at your own personal financial situation. Call my office today for a no obligation debt analysis so you can see where you are at and to get an opportunity to get a plan to eliminate all your debts in a very short period of time.

Cheers,

Pat

 

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

 

Citigroup gets rescued!

Today the news came out that Citigroup (Citifinancial’s parent) received a government bailout. They received a 20 Billion dollar cash injection, this is after they have already received 25 billion earlier this year. Now don’t get me wrong, I am all for stabilizing the economy. Many pundits said that if Citi failed it would de-stabilize the whole banking system. While I do not exactly disagree with making sure that the big banks are liquid, in this case couldn’t a suitor been a good solution? Wells with the help of Berkshire Hathaway could have made this happen, as they are one of their largest shareholders. What do you think? 

The auto industry is sill looking for 25 Billion and have been thus far been left out in the cold. However the CEO’s and the executives of the big three really shot themselves in the foot by showing up in Washington last week by private jets. They would really convey the need for funds if they limited the excessive expenses and focused on their bottom line. They are saying if they go bankrupt the results could be catastrophic, by that we mean over a million jobs lost. 

The fact is that our economy’s are in rough shape. Our government leaders really have their work cut out for them. We can still do our part, and by that I mean making sure that we are all in the best possible financial shape to ride through these tough times. To do this, feel free to contact my office today for a no risk debt analysis, so we can show you how to maximize your income and use it to become debt free sooner.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.

Analysis of paralysis!

I find that far too often that people are complaining that they hate their job, don’t have enough money, are too fat, too skinny, too tired or whatever. They get caught up in a cycle of complaining and they fail to do anything about their situation. They over analyze their situation but do not take any action to improve it. They are suffering from an analysis of paralysis! Here is the answer, just do something! You may not succeed on the first try and many do not, however the trick is to learn what is working and what is not and to keep trying until you succeed. 

If you make money doing what you enjoy then you are never working. Find a way to make some money doing something that you are passionate about. Even if it is part time.  

Want more money? Heck who does not! Find out why you are alway short on cash. For one month track all your income and expenses. This will give you an idea of where you stand. Next I would advise that you sit down with a Financial Advisor, one like my friend Steve Cox. They are experts in helping people to create a roadmap to take them where they want to be. If part of that road map is to get a better handle on your debts then Steve will let me know and I gladly help you out with that.

Not happy about your physical condition? Although I have a background as a personal trainer, It has been many years since I have worked in this field. Even though I continue to work out regularly. Consult an expert at your local gym or Y(M or W)CA for a plan that is right for you.  

We all have challenges. What you may not realize is that we also have the answers. We just have to do something about it. Take action and persist until you succeed.

Cheers,

Pat

p.s- You can find me on Twitter, Linkedin, Facebook and friendfeed.

Signs that you may be in need of a bailout and what you can do about it!

Unless you have been living on a deserted island some where you are probably aware that we in the midst of some interesting and challenging economic times. Big business are lining up for bailouts, the markets are just one roller coaster ride after another, yet we ( the consumer and tax payer) are the engine that runs the economy and where can we turn if we need help?

Here are some signs that you may be in need of a bailout and what you can do about it:

1) More than 40% of your income is going to service your debt.

2) Your balance is higher than 90% of your credit limit.

3) You are using one credit card to pay another.

4) You have been late more than once in paying your creditors ( not utilities). 

5) You have or are receiving calls about money you owe.

6) You are living paycheck to paycheck.

7) You think the light at the end of the tunnel is an oncoming train.

8) You are stressed about the money you owe.

9) Your debts are keeping you up at night.

10) You feel like you are working only to pay your bills!

There is a better way! If you are a home owner, the lowest cost of borrowing is against your home. That is because it is  a secured loan. Contact me today and we can look at combining all your debts into one simple payment, also providing you with a plan to pay it off quickly and efficiently if you qualify. Start focusing on designing your life instead of just paying your bills and you will be surprised how different your life can be. I would recommend that you sit down with a financial advisor like my friend Stephen Cox to help you design out your long term financial plan. 

Cheers,

Pat

 

Citi Financial shuts doors to brokers!

Here is the note that I received from Citi Financial a few hours ago. What this basically means is that there are fewer and fewer choices for consumers and brokers alike. So right now if you have less than perfect credit your options are Wells Fargo or a private lender. Let’s hope that Wells sticks it out.

Cheers,

Pat

November 4, 2008

RE:         Broker Agreement with CitiFinancial Canada, Inc.

CitiFinancial Canada, Inc. has taken the decision to exit its broker referral business.  As such, we are hereby providing you written notice of termination of the aforementioned agreement (the “Agreement”), effective immediately.

Please be advised that we will honour any pending mortgage transactions in respect of which we have provided a signed commitment to your office, provided that we receive any outstanding documentation and are able to close the transaction on or before December 3, 2008.  

We will be in contact with you or your designee to discuss and finalize the following:

(1)     Return and/or destruction of information or materials that are confidential or proprietary to CitiFinancial Canada, Inc., if any is in your possession; and

(2)     Return and/or destruction of information or materials that are confidential or proprietary to Broker, if any is in our possession.

Please note that any provision in the Agreement, which by its sense and context is meant to survive expiration or termination of the Agreement, including, but not limited to, covenants, and all confidentiality and indemnification provisions, shall survive this termination.

We thank you for your consideration herein; it has been a pleasure working with you.

Sincerely,

_______________________

MARY BABICH

Senior Director, Operations

CitiFinancial Canada, Inc.