Free App

Free App
30 Second Real Estate Analyzer


CIBC text message alerts

SMS Alerts

Receive CIBC Alerts via SMS (text message)

You now have the ability to receive some of our current CIBC Alerts via SMS (text message)*, including:

Postdated Bill Payment Success and Failure Alerts

These alerts notify you when a postdated or recurring bill payment is either successfully debited from your account or could not be debited from your account.

New Message Alerts

These alerts are triggered when CIBC replies to a message from you in the Message Centre.

All of these alerts are still available through your Message Centre and e-mail - we're just adding one more convenient way to keep on top of your banking.

As always, if you'd like to add or change your alert settings, you can do so quickly and easily while signed on to CIBC Online Banking.


Investment property strategy

My investment property has been constantly on my mind as the mortgage rates fluctuated in the month of June. You should get into the habit of reassessing your goals and your particular assets and liabilities to see if you're still on track.

Traditionally property investors have operated under the premise of the following two approaches.

1) Short term - (18 – 24 months) Also known as a "flip" strategy.
2) Medium term - (3-5 years) Also known as a "buy to let" strategy or "buy and hold" strategy.

When one is seeking to invest in property, one must be mindful of the following:

* Investment objectives
* Time Frame
* Risks

As an example, if one’s objective is to attempt double one’s investment within 2 years, then a Flip strategy would be favoured. Provided the investment has been chosen wisely, it is more likely to produce the expected return than a buy and hold strategy in the chosen time period.

Experienced investors are accustomed to look at portfolio investments possibly geographically disbursed across different regions and/or countries in order to diversify the investment risk and achieve a balanced return.

Assessing stock

The following is adapted from “The Complete Money and Investing Guidebook” by Dave Kansas.

In assessing investments such as stock, investors consider the stock’s valuation, strategy, plans for diversification and appetite for risk. Stocks are evaluated in many ways, and most of the common measuring sticks are easily available online or in the print and online versions of The Wall Street Journal.

The most basic measure of a stock’s worth involves that company’s earnings. When you buy a stock, you’re acquiring a piece of the company, so profitability is an important consideration. Imagine buying a store. Before deciding how much to spend, you want to know how much money that store makes. If it makes a lot, you’ll have to pay more to acquire it. Now imagine dividing the store into a thousand ownership pieces. These pieces are similar to stock shares, in the sense that you are acquiring a piece of the business, rather than the whole thing.

The business can pay you for your ownership stake in several ways. It can give you a portion of the profits, which for shareholders comes in the form of a periodic dividend. It can continue to expand the business, reinvesting money earned to increase profitability and raise the overall value of the business. In such cases, a more valuable business makes each piece, or share, of the business more valuable. In such a scenario, the more valuable share merits a higher price, giving the share’s owner capital appreciation, also known as a rising stock price.

Not every company pays a dividend. In fact, many fast-growing companies prefer to reinvest their cash rather than pay a dividend. Large, steadier companies are more likely to pay a dividend than are their smaller, more volatile counterparts.

The most common measure for stocks is the price to earnings ratio, known as the P/E. This measure, available in stock tables, takes the share price and divides it by a company’s annual net income. So a stock trading for $20 and boasting annual net income of $2 a share would have a price/earnings ratio, or P/E, of 10. Market experts disagree about what constitutes a cheap or expensive stock. Historically, stocks have averaged a P/E in the mid teens, though in recent years, the market P/E has been higher, often nearer to 20. As a general rule of thumb, stocks with P/Es higher than the broader market P/E are considered expensive, while stocks with a below-market P/E are considered cheaper.

But P/Es aren’t a perfect measure. A company that is small and growing fast may have a very high P/E, because it may earns little but has a high stock price. If the company can maintain a strong growth rate and rapidly increase its earnings, a stock that looks expensive on a P/E basis can quickly seem like a bargain. Conversely, a company may have a low P/E because its stock has been slammed in anticipation of poor future earnings. Thus, what looks like a “cheap” stock may be cheap because most people have decided that it’s a bad investment. Such a temptingly low P/E related to a bad company is called a “value trap.”

Other popular measures include the dividend yield, price-to-book and, sometimes, price-to-sales. These are simple ratios that examine the stock price against the second figure, and these measures can also be easily found by studying stock tables.

Questrade Democratic Pricing - 1 cent per share, $4.95 min / $9.95 maxInvestors seeking better value seek out stocks paying higher yields than the overall market, but that’s just one consideration for an investor when deciding whether or not to purchase a stock.

Picking stocks is much like evaluating any business or company you might consider buying. After all, when you buy a stock, you’re essentially purchasing a stake in a business.

o The most common measure of a stock is the price/earnings, or P/E ratio, which takes the share price and divides it by a company's annual net income.
o Generally, stocks with P/Es higher than the broader market P/E are considered expensive, while lower-P/E stocks are considered not so expensive.
o Don't automatically go for stocks with low P/Es simply because they are cheaper. Cheap stocks aren't always good stocks.

With Rates This Low, Should You be Borrowing to Invest?

With Rates This Low, Should You be Borrowing to Invest?

The thought of leveraging your line of credit to purchase stock is an interesting idea. Could BP be an option if you're speculating on a 2 year trend? What about Potash and the global need for increased food production?

This strategy requires a lot of discipline and a solid understanding of your accounts payable. Being over leveraged could work against you if you're in a life change position such as wanting to buy a new home or even if you're expected to start paying for secondary school expenses.

Do your homework and don't just start blindly investing your 'borrowed' money.


Investor's Guide to the Economy: Part 1

Gary Rabbior is the president of the Canadian Foundation for Economic Education. This is the first of a six-part series on understanding how the economy works and why it matters to investors.

At one point in time, there were some general agreements on what should be the goals for the Canadian economy. These goals were put forth by the Economic Council of Canada and were, for the most part, widely supported. The Council has long since disappeared however and there has not been much talk of what the goals are – or could be – for the Canadian economy since.

So, in the absence of any widespread, generally accepted goals for what we should be trying to do with Canada’s economy, let’s offer a few up as possibilities. If our economy is managed well, if our money and monetary conditions are managed well, and if our financial system works well, we would probably like our economy to:

• create and provide good quality jobs for Canadians, enabling them to earn incomes for themselves and their families and achieve a desirable standard of living,

• use resources wisely to produce goods and services efficiently that our citizens need and want

• use resources wisely to produce goods and services that are globally competitive and enabling us to sell exports and help boost the well-being of both Canadians and those who buy our exports

• increase the output of goods and services produced over time enabling us to create additional wealth to improve the well-being of all Canadians

• allocate the wealth produced in Canada in a fair and equitable manner

• provide social programs as needed to increase the ability of Canadians to achieve financial security – and to help those unable to attend to their own needs,

• factor into our economic decisions the impact our activities will have on our environment and the long-term quality of life of Canadians

• manage our resources and environment so that their availability and condition are equal to, or superior than, today’s for future generations

• provide opportunities for all Canadians to achieve a standard of living and quality of life that is consistent with what we, as a society, regard is an acceptable minimum level of well-being But achieving these outcomes is not an easy task. What about the means by which we will try to achieve those ends? There are many factors that will influence whether or not we can achieve these goals. Two of the more important factors, however, will be our ability to:

• achieve relatively stable prices over time and thereby protect the purchasing power of our money, and

• live within our means and avoid a debt burden that hampers the current, and future, growth and development of our economy.

The second factor is a topic for another series of articles. But the first factor really relates to our current focus – money and its role in the economy – and how to best manage the “money” that supports economic activity in Canada.

The primary responsibility for managing the “money” part of our economy falls to the Bank of Canada. The Bank of Canada believes that relative price stability is an important “means” to our desired “ends” (currently the Bank has set an annual inflation target of 2 per cent).

Let’s look more closely at this goal of “stability” – price and otherwise - for our economy. As has been shown by recent times, it is not easy to keep the economy on a steady course – and it is also hard to get it back on course once it is off it. Certainly over the past year or so our economy has not been on a nice, smooth, steady growth path. We have been through extraordinarily turbulent times. This has posed a real challenge for policymakers – including the Bank of Canada as it undertakes its role to try to create the right monetary conditions for growth and stability in our economy.


Therefore, as one can conclude from the economic times of 2008 and 2009, a major challenge for policymakers is to try to keep an economy stable – producing goods and services, creating and sustaining jobs and incomes, etc. Ideally it would be great if we could maintain a smooth course for the economy enabling it to grow moderately and persistently over time.

Unfortunately, this does not describe the usual path for economies. Such a path would be extraordinarily difficult to achieve—though policymakers keep trying.

Most economies experience good and not-so-good economic times as they move through cycles. There are periods of expansion (higher output – more goods and services) and contraction (lower output). There are periods during which the rate of inflation has been relatively high and others when it is relatively low. There have been periods of high unemployment and periods of low unemployment. Ups and downs. Good times and not so good.

No one needs to be told what kind of path we have been on lately. Economic activity has declined, output has fallen, unemployment has risen, and there has been widespread hardship as the economy has gone through a significant downturn. In fact, this downturn had a sense of “crisis” to it as the entire global economy turned downward. Many policymakers, economists, financial leaders, and others grew very nervous as to how bad things might get. Actions taken throughout the world appear to have moved us past a point of “crisis” to a path of recovery. But the economic path we have been on has been anything but smooth.

Policymakers have long tried to find the key to establishing a smooth path for the economy and avoiding such periods of downturn and decline. Various theories and policies have been developed and attempted. To date, no one has found the magic formula that will enable an economy to grow in a stable and continuing fashion over time without periods of slowdown, contraction, and relatively high unemployment alternating with periods of increased growth and rising price inflation. A Nobel Prize in Economics probably awaits the individual who finds the key—if it actually exists.


There are a variety of factors that will affect our economy’s path. Some are within our control – and some are not. A major factor within our control are the “monetary conditions” we create in Canada which will influence the path our economy takes and, ultimately, our success in achieving our goals. If monetary conditions are managed effectively, our chances of achieving our goals will be significantly improved. If not, we can suffer some pretty significant consequences such as wide fluctuations in the level of prices and employment and the performance of the overall Canadian economy.

If we have “too much money” in the economy, this can fuel spending to the point where our economy has trouble keeping up and, as a result, we can get rising inflation and rising interest rates. Rising prices and interest rates can slow down the economy and stifle investment and growth.

If we have “too little money” in the economy, this may not support the level of spending that a healthy economy needs and the lower spending, lower profits, and rising unemployment can lead to possible deflation – where the average level of prices starts to fall. Deflation is probably a more serious problem than inflation since it can lead to more trouble as people hold off buying assuming prices will fall further.

So getting the “money part” of our economy right is very important. The better the decisions are in terms of creating the “right” monetary conditions, the smoother our economic path can be. The challenge of those decisions lies with the Bank of Canada and, in the next article, we will begin our exploration of the relationship between money, monetary conditions, and the economy with an analogy, a game we’ll call “Auction Block.”

BP speculation

What is your comfort level with speculating on the share price BP? Is the
strock price going to continually drop until the work is completed on creating
the relieve valves? I believe that this is still several weeks away. Do you
buy short on the stock now or are you going to follow the fear mongering of BP
going bankrupt. Obviously they are not an ideal stock from an ethics point of
view but as a dragon on dragons den always says, "I'm just a little man looking
for profit."

Does your financial analysis or global citizenship take the lead in your
decision? Either way its a good stock to watch even as an armchair investor.


Disadvantages of reverse-mortgages

For cash-strapped seniors rich in home equity, a reverse home mortgage can provide a steady source of income. This can mean the difference between scraping pennies together or going on that dream vacation. While reverse mortgage loans are, for obvious reasons, becoming very popular these days, they do come with their own set of disadvantages.

Please do not take this the wrong way. We are not saying that you should never get a reverse mortgage. In fact, in the right situation, reverse mortgages are wonderful tools. However, it is important to be aware of the potentail disadvantages of a reverse mortgage.

Reverse Mortgage Disadvantage #1 - It Is Not Free Money

The money you get from a reverse mortgage is not free money. The lender is not giving you a reverse mortgage out of the goodness of their heart. They are in business to make money.

In a regular mortgage agreement, the lender loans you money and you are required to pay that money back, plus interest. For a reverse mortgage, the situation is a little different. You receive a cash stream from your property. When the reverse mortgage agreement is over, you or your heirs must repay all of the cash you have received, plus the interest on it.

Basically, the lender loans you money (and charges you interest on that loan) with the guarantee that they will eventually be repaid - when you sell the home, refinance, or permanently leave the home (i.e. you pass away).

Reverse Mortgage Disadvantage #2 - You Lose Equity in Your Home

You will have less equity in your home. A reverse mortgage allows you, the property owner, to access some of the value of your property without selling it. 'Equity' is the term used to describe the difference between the value of your home and how much you owe on it.

Since a reverse mortgage works on the basis of taking equity out of your house (the money you receive from a reverse mortgage eventually will be repaid out of the value of the home) - the amount of equity in your home will decrease as your reverse mortgage loan increases.

The loss of equity is not necessarily a bad thing - since you will have more cash in your pocket. It is just a trade-off. You will have to decide for yourself whether the money you will get from a reverse mortgage is worth hte tradeoff of less equity in the future.

Reverse Mortgage Disadvantage #3 - More Expensive Than Traditional Home Loans

Another of the reverse mortgage disadvantages is that reverse mortgages tend to be more expensive than traditional home loans. Why is this? Because the reverse mortgage lender assumes more risk when they offer this mortgage product.

While a traditional mortgage lender starts receiving payments from the first month the loan is given, the reverse mortgage lender may not see any return on their money for many, many years - if, for instance, you lived to be 100 years old.

For that entire time (as per the reverse mortgage agreement) they cannot require you to make any payments. Since the risk is greater, there is an increased cost associated.

Reverse Mortgage Disadvantage #4 - You Need Equity to Qualify

You usually need a lot of equity to qualify for a reverse mortgage. A reverse mortgage lender will usually loan you only about 30-80% of the value of your home. This amount varies based on your age, and the specific reverse mortgage plan you choose.

Since reverse mortgages must first pay off any existing mortgages, if you have a loan that is for a greater amount than the reverse mortgage amount you qualify for, you will need to make up for the difference from your savings. If you do not have sufficient money to bring your current mortgage balance below the maximum amount that you could get from a reverse mortgage, you will not qualify for a reverse mortgage loan.

In Summary...

Basically, reverse mortgages are the inverse of a traditional mortgage. Instead of you making payments to the lender, the lender makes payments to you. As a result, and the main disadvantage of a reverse mortgage, your debt (rather than your equity) grows over time.

Although there is no risk that you will lose your home or that your reverse mortgage loan amount will be greater than the value of your home, there is a possibility that (especially if you live to a ripe old age), all the money from the sale of your home will go to the lender.

In other words, there is a possibility that you will use up all the equity in your home. This will not matter to you - but it will decrease or eliminate any inheritance for your children.

While it is a useful tool for certain situations, many financial planners feel that tapping your home equity should only be done if you have exhausted all alternatives. It is not too surprising then that some people have said 'a reverse mortgage is a perfect strategy - if you hate your kids!'

What kind of investments can I typically have in my Self-Directed RSP?

Have you researched having a self directed RSP be funded by someone else's mortgage? If so, then here's some info on what kind of investments you can typically have in your Self-Directed RSP.

* Mutual funds
* Common and preferred shares of Canadian corporations listed on any Canadian and many foreign stock exchanges
* Fixed income securities including bonds, debentures, strip bonds and notes --
o issued by a corporation that has shares listed on a Canadian stock exchange
o issued by a Canadian government (federal, provincial or municipal)
o guaranteed by the Government of Canada
* Many foreign shares and fixed income securities
* Canadian and Provincial Treasury Bills (T-bills), Canada Savings Bonds and Provincial Savings Bonds
* Term Deposits, GICs and cash in Canadian currency
* Options to purchase eligible securities
* Mortgages

Is that really your bank offering you a new credit card?


Identity Theft: Could it Happen to You?

Maybe you never opened that account, or ordered an additional card, but someone else did....someone who used your name and personal information to commit fraud. When an imposter co-opts your name, your Social Insurance Number (SIN), your credit card number, or some other piece of your personal information for their use - short when someone appropriates your personal information without your knowledge - it's a crime, pure and simple.

Are you a Victim?

The signs can be many, but typical indicators that your identity is being used include:

* A creditor informs you that an application for credit was received with your name and address, which you did not apply for.
* Telephone calls or letters state that you have been approved or denied by a creditor that you never applied to.
* You receive credit card statements or other bills in your name, which you did not apply for.
* You no longer receive credit card statements or you notice that not all of your mail is delivered.
* A collection agency informs you they are collecting for a defaulted account established with your identity and you never opened the account.

Identity Theft Statement - What is it?

If you have been a victim of identity theft, the Identity Theft Statement helps you notify financial institutions, credit card issuers and other companies that the identity theft occurred, tell them that you did not create the debt or charges, and give them information they need to begin an investigation. Make as many copies of the Statement as you will need to notify all affected companies. You will need Acrobat Reader to view the statement. Acrobat Reader download

To print a copy of the Identity Theft Statement click here.

It you suspect that your personal information has been hijacked and misappropriated to commit fraud or theft, take action immediately and keep a record of your conversations and correspondence. The following basic actions are appropriate in almost every case.

* Start a log of dates, person(s) that you spoke with and exactly what they said.
* Contact the fraud departments of each of the three major credit bureaus. Equifax: (866) 828-5961, for lost or stolen identification press 1, if you are a victim of identity theft press 2.
Trans Union: (800) 663-9980 except
Quebec residents (877) 713-3393.

* Request that a "Fraud Alert" be placed in your files. At the same time order copies of your credit reports.
* Contact the fraud department of creditors for any accounts that have been opened or tampered with fraudulently. This may include credit card companies, phone companies, banks and other lenders.
* File a report with your local Police or the Police in the community where the identity theft took place.
* Contact PhoneBusters National Call Centre. PhoneBusters is currently central sourcing all pertinent information on Identity Theft to identity trends and patterns, information is also used to assist law enforcement agencies in possible investigations.

Remember: There is no reason to be paranoid; there's just reason to be careful. If someone wants desperately to target you, they can probably get a lot of information about you -- so you just need to minimize the criminal's opportunities to get that information. You can make yourself a harder target and that the best defense. If you are a victim, do not panic, you will not be out any money. The losses will be attributed to the banks and or companies associated with the fraud.

Minimize The Risk

While you probably can't prevent identity theft entirely, you can minimize your risk. Identity theft is on the rise and it can happen to anyone. It can happen to you. By managing your personal information wisely, cautiously and with an awareness of the issue, you can help guard against identity theft.

* Tips on how to minimize your risk.

Bankruptcy statistics in Canada for 2010

Table 1: Total Insolvencies

  Volume % Change 12-Month Period Ending
Q1 2010 Q4 2009 Q1 2009 Q4 2009 to Q1 2010 Q1 2009 to Q1 2010 03-31-2010 03-31-2009 % Change
Newfoundland and Labrador 671 582 674 15.3 -0.4 2 698 2 372 13.7
Bankruptcies 637 552 637 15.4 0.0 2 575 2 297 12.1
Proposals 34 30 37 13.3 -8.1 123 75 64.0
Prince Edward Island 136 174 114 -21.8 19.3 599 482 24.3
Bankruptcies 118 155 110 -23.9 7.3 548 459 19.4
Proposals 18 19 4 -5.3 350.0 51 23 121.7
Nova Scotia 1 297 1 344 1 237 -3.5 4.9 5 540 4 849 14.3
Bankruptcies 1 076 1 110 1 037 -3.1 3.8 4 764 4 204 13.3
Proposals 221 234 200 -5.6 10.5 776 645 20.3
New Brunswick 888 898 839 -1.1 5.8 4 023 3 421 17.6
Bankruptcies 735 731 697 0.5 5.5 3 426 2 921 17.3
Proposals 153 167 142 -8.4 7.7 597 500 19.4
Quebec 10 146 10 228 11 136 -0.8 -8.9 43 124 39 133 10.2
Bankruptcies 7 461 7 679 9 105 -2.8 -18.1 34 239 32 155 6.5
Proposals 2 685 2 549 2 031 5.3 32.2 8 885 6 978 27.3
Ontario 14 566 16 439 15 821 -11.4 -7.9 68 239 57 505 18.7
Bankruptcies 8 750 10 548 11 138 -17.0 -21.4 46 341 41 390 12.0
Proposals 5 816 5 891 4 683 -1.3 24.2 21 898 16 115 35.9
Manitoba 686 734 737 -6.5 -6.9 3 119 2 840 9.8
Bankruptcies 518 559 592 -7.3 -12.5 2 434 2 221 9.6
Proposals 168 175 145 -4.0 15.9 685 619 10.7
Saskatchewan 669 601 606 11.3 10.4 2 715 2 128 27.6
Bankruptcies 456 398 452 14.6 0.9 1 959 1 640 19.5
Proposals 213 203 154 4.9 38.3 756 488 54.9
Alberta 2 917 2 750 2 883 6.1 1.2 12 596 9 020 39.6
Bankruptcies 2 202 2 107 2 467 4.5 -10.7 10 126 7 552 34.1
Proposals 715 643 416 11.2 71.9 2 470 1 468 68.3
British Columbia 3 304 3 083 3 274 7.2 0.9 13 644 10 580 29.0
Bankruptcies 2 524 2 379 2 724 6.1 -7.3 10 819 8 717 24.1
Proposals 780 704 550 10.8 41.8 2 825 1 863 51.6
Northwest Territories 11 5 11 120.0 0.0 47 33 42.4
Bankruptcies 8 4 7 100.0 14.3 40 28 42.9
Proposals 3 1 4 200.0 -25.0 7 5 40.0
Yukon 8 15 6 -46.7 33.3 48 34 41.2
Bankruptcies 5 11 5 -54.5 0.0 41 29 41.4
Proposals 3 4 1 -25.0 200.0 7 5 40.0
Nunavut 1 3 1 -66.7 0.0 10 8 25.0
Bankruptcies 1 2 1 -50.0 0.0 8 8 0.0
Proposals 0 1 0 -100.0 -- 2 0 --
Canada 35 300 36 856 37 339 -4.2 -5.5 156 402 132 405 18.1
Bankruptcies 24 491 26 235 28 972 -6.6 -15.5 117 320 103 621 13.2
Proposals 10 809 10 621 8 367 1.8 29.2 39 082 28 784 35.8

What you should know about bankruptcy

Administrator of consumer proposals

An administrator of consumer proposals is a trustee in bankruptcy or a person appointed by the
Superintendent of Bankruptcy. British Columbia (1-800-663-7867), Saskatchewan (1-306-933-6520) and Nova Scotia (1-902-424-7020) provide administration of consumer proposals. You may wish to contact the appropriate provincial department. With regard to
trustees in bankruptcy, their names may usually be found in the Yellow Pages under the headings of “Bankruptcy” or “Trustees in Bankruptcy.”

Assets acquired during bankruptcy You must assign to your trustee all assets acquired
during your bankruptcy, including lottery winnings and inheritances, so they can be divided among your creditors.

Assets and property
In a bankruptcy, you must assign all your assets to the trustee, except for exempt property, such as basic furniture and tools-of-trade needed to make your living. Exempt property can vary from province to province. Your trustee can tell you what these are.

This is the legal status of a person who declares bankruptcy.

Dealing with Debt -- free download consumer guide

Many Canadians face a financial crisis at some time. Most debt problems are easy to solve. Others need professional assistance. The best way to deal with your financial problems is to admit to them and take control before they get out of hand.

This booklet can help you decide whether you have a serious debt problem. It also gives some suggestions for solving your difficulties and avoiding them in the future. The information in this booklet is meant for individuals only and does not apply to corporations.

Readers are reminded that this booklet is not meant to be used for legal purposes. Its only aim is to give information to individuals who are having financial difficulties.

Download now

Possible Solutions - bankruptcy

Contact your creditors

Explain why you can't make your payments and suggest making lower payments over a longer period of time. You may be surprised by how many creditors are willing to accept such arrangements.

Credit counselling

Credit counselling services are available, but may be different from province to province. Contact a local family or community counselling office or a credit counselling association to find out how to get in touch with such a service. If you have difficulty making a budget and sticking to it, counselling may help you.

Debt consolidation loan

You can ask a bank or financial institution about combining or "consolidating" your debts into one loan. In such a case, the bank or financial institution will pay off all your debts and, in return, you make single monthly payments to the bank or financial institution. Make sure to shop around because interest rates are different. It is important to stop buying on credit. Continuing to use credit could make your debt load too great for you to handle.

Consolidation order

If you live in Alberta or Saskatchewan, you may apply for a consolidation order. A consolidation order sets out the amount and the times when payments are due to the court. The court will distribute your payments to your creditors. This part of the Bankruptcy and Insolvency Act (Part X: Orderly Payment of Debts) lets you pay off your debts over three years and frees you from creditor harassment and wage garnishment. Unlike bankruptcy, you do not lose your assets.

Voluntary Deposit scheme

For residents of Quebec, the Voluntary Deposit scheme (better known as the "Lacombe Law") is similar to a consolidation order. You must make a monthly payment based on your income and number of dependants, to the court. This service is usually available at the local courthouse.

Consumer proposal

Under the Bankruptcy and Insolvency Act you may make a consumer proposal to your creditors to reduce the amount of your debts, extend the time you have to pay off the debt, or provide some combination of both.


If none of the above methods solves your debt problem, you may choose to declare bankruptcy. Bankruptcy should be a last resort if you cannot meet your financial obligations through affordable payments over a specific period of time.

Bankruptcy is a legal process performed under the Bankruptcy and Insolvency Act. Because of your inability to pay your debts, you assign all of your assets, except those exempt by law, to a licensed trustee in bankruptcy. This process relieves you of most debts, and legal proceedings against you by creditors should stop.

Recognize the danger signals - bankruptcy

You have a debt problem, or are going to have one, if:
  • you continually go over your spending limit or you use your credit cards as a necessity rather than a convenience;
  • you are always borrowing money to make it from one payday to the next;
  • your wages have been garnisheed to pay for outstanding debts;
  • you pay only interest or service charges monthly and do not reduce your total debt over many months;
  • creditors pressure you for payment, threaten to sue or repossess your car, furniture or television, or hire a collection agency to recover the money for them; or
  • utility companies cut off service because your bills have gone unpaid.


Condo hotel background

Here is a link from an older post about condo hotels in the United States. The concept is the same regardless of the location.

Bob Waun is CEO of Vacation Finance, a mortgage brokerage and lending company inBirmingham, Mich. He owns two hotel rooms that pay him to stay away.

Until recently, Mr. Waun owned a traditional vacation home, a cottage in upper Michigan. But after a particularly bad winter -- he arrived during a snowstorm to find that the plow service hadn't cleared the driveway and that the pipes had burst -- he sold the cottage and bought two condo hotel units instead.

Now, Mr.Waun and his family vacation in resort hotels in Michigan and Florida, and earn money when the rooms they own are rented out to other guests. Mr. Waun, his wife Lynn and their nineyear- old daughter spent the Memorial Day weekend in their unit at the Inn at Bay Harbor in Petoskey, Mich., a 152-unit condotel managed by Marriott's Renaissance brand.

"As we were checking out, someone else was checking into our room and I made $60 that night," Mr.Waun says. "If Marriott rents out the unit during the Fourth of July holiday, I'll make enough money to take my family on a trip to Mexico."

Experiences like Mr.Waun's are driving the market for condotels -- condominiums you buy that can be rented out as hotel space. According to Smith Travel Research in Hendersonville, Tenn., almost 10% of all hotel rooms under construction in the U.S. are condotel units and there are plans for 232 condotel projects with 98,237 rooms that could be built within the next decade.

Condotels are also being developed in Europe, South Africa, the Middle East and the Caribbean. Joel Greene, president of the Condo Hotel Center in Miami, a real estate brokerage firm that deals mostly in preconstruction units, lists 115 projects on his Web site, including five in Dubai.

Guy Maisnik, an attorney with the Global Hospitality Group of Jeffer, Mangels, Butler & Marmaro LLP in Los Angeles, says his firm has handled 65 condo hotel projects and "almost all the new projects we see have a condo hotel component. This is a concept that definitely
has legs."

Condotels started in Europe and first appeared in south Florida in the 1980s, but did not become popular until the travel slump after 9/11 made it difficult for hotel developers to obtain conventional financing for new projects. They turned to the condotel concept, pre-selling rooms to individual investors, to raise equity.

In theory, the condotel meets two objectives -- that of the developer to get a project built and that of the buyer who, like Mr. Waun, wants a hasslefree place to vacation and the chance to make a little money on the side. Baby boomers are becoming active vacation homebuyers, says Mr. Maisnik.

"If you buy a condo in Aspen," he says, "you're not likely to use it more than 30 days a year. If you want to rent it out, you'll have to hire a management company and take your chances. The attraction of a condotel is that you can own a unit in a hotel with a well-known name, like Trump or Mandarin Oriental, enjoy first-class amenities and standards of maintenance, then let the
hotel company arrange all rentals for a 30% to 60% share of the revenues."


How does the credit card issuer calculate exchange rates for purchases outside of Canada?

VISA International converts all foreign transactions to Canadian funds at a preferred rate. This rate also includes a conversion fee, presently at 2.5%, which offsets the costs incurred by VISA International and CIBC in offering a comprehensive worldwide VISA service, as international transactions are more expensive to process than domestic transactions. The exchange rate is set at the time of purchase, and it will vary according to the date and time of the transaction.

Below is an example of the conversion calculation:

Amount of purchase is $50.00 USD

The rate of exchange is @ 1.54
Canadian amount = $77.00 CAD
+2.5% conversion fee = $1.93
$78.93 CAD

The total amount recorded on your statement would be $78.93 CAD

Condo Hotel Benefits

Being pampered is a part of the resort experience for many vacationers. Impeccable service is what often leads them back to top hotels again and again.

Those who prefer a private residence in their getaway locations can choose from an array of housing options. But they'll have to make their own dinner reservations and contact the plumber themselves.

But what if you could own a private second home in those beach and mountain locales and still be treated as if you were at the Ritz? That's the idea behind residence clubs, one of the fastest-growing segments of the vacation-home business and one that hotel operators -- including Ritz-Carlton -- have embraced.

"We're selling a lifestyle along with the house," said Alan Fuerstman, chief executive of Montage Hotel & Resorts, which is building 14 villas and offering 14 additional home sites at its Montage Resort & Spa in Laguna Beach, Calif. "You can get room service, use of the spa and pool, and have our chef coming over to do a dinner party for you."

Those home sites, some of the last oceanfront property available in Southern California, don't come cheap: $4.5 million to $6.5 million for the lot alone. (Nine of the 14 are still for sale; the 3,000-square-foot villas are sold out.) But they represent a way for resort developers to make their high-cost projects more economically feasible, one of the reasons the concept has become more popular.

"We're in the process of putting together a development in the [California] mountains, and we see this working wonderfully there," Fuerstman said. These buyers are younger than we would initially have thought. But what we find is that the buyer who falls in love with these properties has stayed in the hotel once or twice and wants to embrace that lifestyle, capture it on a daily basis," he said.

The Residences at Montage represents the latest in the evolution of the hotel industry in the second-home market. The villas and home sites at the Laguna Beach property are being sold outright to buyers, not as time-share or fractional-ownership units.

It has been 20 years since Marriott became the first major hotel chain to enter the vacation-ownership business with its purchase of American Resorts. That initial foray involved time-shares that were sold as a right to use a condominium unit for a specified time, generally one week of the year.


Marriott still operates two brands that sell traditional time-shares: Marriott Vacation Club International and the more moderately priced Horizons by Marriott Vacation Club. Owners are able to trade weeks in order to vacation in a large number of destinations.

In 2001, Marriott added its Grand Residence Club concept. The first club opened in Lake Tahoe, Calif., in 2002 and the second in London last year. The clubs combine fractional ownership of a second home with the amenities and service of a luxury resort. Fractions from three weeks to 13 weeks range from $83,900 to $550,000.

The hotel company also operates the Ritz-Carlton Club, another fractional-ownership product where buyers can purchase interests from 21 to 35 days per year for $98,000 to $490,000. Ritz-Carlton Club resorts are located in Aspen and Bachelor Gulch, Colo., St. Thomas and Jupiter, Fla.

In addition, the Residences at the Ritz-Carlton offers for-sale condominiums at 11 U.S., Caribbean and European destinations that provide concierge, dining and butler services.

Four Seasons

High-end hotelier Four Seasons also has been developing private residence clubs. It has fractional-ownership properties in North San Diego, Calif.; Scottsdale, Ariz.; Jackson Hole, Wyo.; and Punta Mita, Mexico, near Puerto Vallarta, which is under development.

And Hyatt Vacation Ownership, an affiliate of Chicago-based Hyatt Hotels, has broken ground in San Antonio, Texas, on what will be its 11th vacation ownership property; eight are open and two others are slated to open this summer.

Exclusive Resorts

Not all the hotel-type developments involve hotels, though. Exclusive Resorts, founded by Brad Handler, a member of eBay's startup team, offers a collection of luxury vacation homes that members have access to. The company has more than 200 homes in 25 locations worldwide, with 12 additional sites planned.

The homes average about $2 million, but members pay a one-time deposit of $375,000 to join, plus yearly dues that the company describes as "modest." Exclusive Resorts' members can use a member-services manager to make travel arrangements and have access to an on-site concierge in their destination.

Members can also take advantage of Exclusive Resorts' strategic partnership with Marquis Jet, which provides access to the NetJets private jet fleet.

Alternative view to RRSP vs TFSA article

This article was originally posted on http://my-moneytree.blogspot.com/2009/07/alternative-view-to-rrsp-vs-tfsa.html.

"It’s a very interesting concept. I like what you’ve written about the TFSA (Tax Free Savings Account). Keep in mind the idea of Inflation and the affect it has on money. If I have the choice between paying $1 of income tax today or $1 in 20 years, I would much rather pay it in 20 years. So if I get a $384 tax saving for putting in $1,000 in my RRSP today and pay $384 of income tax in 20 years when I take it out, I’ve actually paid back much less. In my mind, a person that still has any kind of debt where the interest is not tax deductible, or if the person is not on target to save enough for retirement, contribute to RRSP. In regards to the TFSA, if this person has not yet saved up enough money to pay for their child’s education, they should not put money into a TFSA other that what they like to keep in there emergency fund (usually 3 months income).

Here’s an example.

$1,000 in an RRSP will give someone with a $50,000 income a $384 tax deduction if they live in Quebec and $312 if in Ontario.

$1,000 in an RESP will give someone with the same income a $200 grant that will be added in the RESP.

$1,000 on a loan with a 5% interest rate (non tax deductible) will save them $81.70 per year ($81.70 minus $31.70 tax to pay $50)

$1,000 in a TFSA that earns 5% interest will earn $50 of interest which will save you $19.20 of income tax a year.

Hope this helps your discussion.

The best advice I can give anyone is that each situation is unique and therefore the advice for one may not be appropriate for another. That’s why everyone should have a Financial Planner with the CFP designation or Plan. Fin in Qu├ębec to help set priorities and determine the best plan of action based on their personal objectives."


Beacon score

Your Canadian Credit Bureau report provides crucial information in your quest for the lowest mortgage rate in Canada. The primary source of information that the bank has on you is from this report. You need to know how to find the potential problems before the bank so you can be prepared for their questions.

Beacon Score
The first thing most bankers look at in your Canadian Credit Bureau is your Beacon Score. This is a summary of your credit worthiness as determined by an automated system at the credit bureau. Many bankers rely heavily on this score for loan/mortgage approvals and the interest rate you qualify for.

If you want the best mortgage rate in Canada, you should plan on having a beacon score above 600. If you have a score over 750 on your credit bureau report and have investments in addition to your home, you will be able to choose from the best rates, products and terms. A beacon score over 750 is considered excellent.

If the beacon score on your credit bureau report is below 600, you will face an uphill battle to get a mortgage. This considered a poor score. The rate is likely to be a little higher than normal, depending on your circumstances.

Credit scores can change daily. Depending on the situation, it may be fairly easy to increase your score and get approved at a good rate for your mortgage. An online monitoring service will keep you updated on where you stand whenever something changes on your credit bureau report.

There are some lenders who will look beyond just the beacon score in your Canadian Credit Bureau. Some banks will give the more experienced loans officers the authority to approve mortgages if a person has bad marks on their Canadian credit bureau report. A mortgage broker mortgage broker can help find a lender willing to offer a good interest rate if you have issues on your credit bureau report.

Collection Notices
Your Canadian Credit Bureau Report shows all collection, bankruptcy and Orderly Payment of Debt (OPD) activity for a full six years. It is important to pay attention to this section because disputed bills, old, forgotten bills and current collection activity shows up here. Banks will not give you a loan if there are unpaid bills in this section. Many banks will not even lend you money to pay off those bills. These must be cleared off your credit bureau report ASAP. The beacon score really takes a beating if you have an unpaid entry in this section of your Canadian credit bureau report.

Late Payment History
Late payments on your Canadian credit bureau report show up as an "R", "I" or "O" rating. The importance of the late payment shows up as a number from 1 to 9. A 1 is the best rating. It shows that you have paid your bill within 30 days of the due date.

An R2/I2/O2 shows an uncaring attitude toward debts. If you have one or two, no one cares. However, if you have several of them, bankers start to get nervous. The general rule is that a "2" rating is not serious, however, loans and mortgages have been turned down with as few as three "2's" if the rest of the mortgage application is not strong. The best source of evaluating the importance of "2" ratings is to have a conversation with a mortgage broker You may still qualify for the lowest mortgage rate in Canada.

A "3" rating on your Canadian credit bureau report indicates some financial problems. If it is current, you need to have a good explanation to get the best mortgage rate. If the "3" is one or more years old, you still need an explanation, but many lenders will try to overlook it on an otherwise strong application. If you have more than one "3" at any time within six years it may be a challenge to get the best mortgage rate, but you will still qualify for a mortgage somewhere. Contact your mortgage broker to discuss your situation.

A "4" or higher rating on your Canadian credit bureau report means serious trouble. If you have even one of these on your credit bureau report, many banks will not even entertain giving you a loan or a mortgage. Your best bet is to contact a mortgage broker and work out a strategy to qualify for a mortgage. It is highly unlikely that you would qualify for the best mortgage rate in Canada, but you may still qualify for a mortgage. If you have more than one "4" in the past year, the only way to qualify is to have a good explanation for it or have a cosigner. However, if the "4" is two or more years in the past and the rest of the application is strong, you may still qualify for the best mortgage rate in Canada.

A rating of "9" on your Canadian credit bureau report is as bad as it gets, other than a bankruptcy. Most lenders will not provide a mortgage with someone that has a current "9" rating. However, there is still hope. A good explanation combined with the mortgage broker's recommendation to the right lender may do the trick. He/she may still be able to get you a good mortgage rate. If the "9" rating is two or more years old, most lenders will shy away from the deal, but your mortgage broker may know of a lender or two who would be willing to provide a mortgage for you.

A bankruptcy showing on your Canadian credit bureau report is a serious thing regardless of how long ago it happened. If you have only had one bankruptcy, the listing on the Canadian credit bureau report will disappear at the end of the sixth year. However if you have had more than one bankruptcy, all of them will be on your Canadian credit bureau report forever.

If you have had one bankruptcy, you may still qualify for a mortgage soon after the bankruptcy. The trick is to get establish a good credit rating right away. You can get a secured credit card, a car loan, a furniture or appliance loan etc. at high interest rates. If you are fortunate enough to be reading this before you decalare bankruptcy, try to continue payments to a couple of creditors (like your home and car) through the bankruptcy. If you can do this, you will be able to get new credit soon after the bankruptcy. It won't be easy, but your mortgage broker may be able to help you. Even if you haven't been able to keep some lines of credit open through the bankruptcy but have re-established some credit, you may still qualify for a mortgage. The mortgage interest rate may be a little high, but at least you would be able to own a house.

If you have too many debts showing on your Canadian credit bureau report you may still have a chance of qualifying for a mortgage. One way to handle it is to somehow consolidate your loans. Another way would be to get a cosigner to add income to your application. You may also have some income that normally doesn't show up on your income tax return that can be used by some lenders. A more complete discussion of income can be found on the Mortgage Calculator page.

Your mortgage broker would definitely be a good resource if you have a strong Canadian credit bureau report but the debt load is a little high. Even if your own bank has turned you down, if there is a way to make the numbers work, your mortgage broker will find it.

Many times when the debt load is starting to build up, you may go over the limit on your credit cards. The credit company is happy to let you do this once in a while, but your beacon score really takes a hit. Whenever possible, stay at least 30% below the limit on your your credit lines/cards. If you can do this with all your credit, the Canadian credit bureau report will reward you with a very good beacon score and the bankers will be chasing you to give you more and more credit at the best terms they can offer.

RRSP vs. TFSA which to choose

Roma Luciw

Globe and Mail Update

Older and wealthier Canadians, as well as students and young couples without children, are among those who should look at parking their money in a Tax-Free Savings Account (TFSA), says a report released Wednesday.

Since the birth of the TSFA on Jan. 1, Canadians who can't afford both have been struggling to choose between a TFSA or Canada's long-standing tax shelter savings product, the registered retirement savings plan (RRSP).

A report from BMO Capital Markets pinpointed some groups of people for whom the new TFSA “should be a more attractive investment option” than an RRSP: Younger Canadians, including students and the working but childless, who are in a low-income stage of their life and have excess cash after paying down their bills and drawing down debt. Another is affluent people, who have money to save after maxing out their RRSP contribution and can use the TSFA to supplement their retirement savings.

The BMO report found that of those groups, “TFSA contributors tend to be older and more affluent, suggesting younger people are using whatever savings they have to first pay down debt.”

By all accounts, the TFSA has proven to be enormously popular with Canadians. Between Jan. 1 and the end of June, about 3.6 million people set up a TFSA, stockpiling $12.4-billion, according to data from Toronto-based financial research firm Investor Economics and pollster Ipsos Reid.

Globeinvestor Personal Finance forum

Weigh in on whether you would stash some extra money into an RRSP, RESP or a TFSA.


Part of the popularity of the TFSA can be attribute to timing. It arrived at a time when a global economic recession had for the first time in years led people to curb their spending and store away some of that money.

On average, Canadians are now saving 4.8 per cent of their personal income, compared to an average rate of only 3.7 per cent in 2008 and 3.8 per cent over the first five years of this decade when the economy was booming, the BMO report said.

“Canadian savings rates have increased as a direct result of great concern, more frugality, and a certain level of uncertainty about the outlook...,” said BMO chief economist Sherry Cooper. “Of course, people who have suffered unemployment will not be opening TFSAs because they are living off their savings. But on the whole, people are recognizing that the only way to rebuild their savings is to spend less than they earn.”

Because people fear spending money during periods of economic turmoil, she expects Canadian savings rates may edge even higher from their current rate.

TFSAs allow people to save or invest $5,000 a year for any purpose – retirement, education or a rainy-day fund – without paying tax on investment or capital gains when the money is withdraw at any time down the road. You can carry forward unused contribution room for future use and you can use your TFSA to invest in savings, GICs, mutual funds, stocks and bonds.

The beauty of the TFSA, financial experts say, is that it gives people flexibility in terms of how to use their money.

For instance, the BMO report noted that under the Home Buyers' Plan, first-timers can tap into their RRSP assets to help come up with the necessary down payment. But now first-time home buyers can also turn to their TFSA, which offers them more flexibility in terms of replenishing the depleted asset.

“Under the Home Buyers' Plan, the plan holder is required to re-contribute to the RRSP over a period of 15 years, whereas for the TFSA no repayment is required and the amount of the withdrawal is added to future TFSA contribution room,” BMO said, adding that funds from a TFSA can also be use for renovations or other home improvements.

TFSAs can also help retirees by providing them with additional opportunity to shelter income after they turn 71, the BMO report said, by allowing them to put money into a TSFA after they are no longer eligible to contribute to an RRSP. “In addition, if retirees are required to take more income than they need from a RIF, they can contribute to a TFSA out of the excess and thus continue to shelter investment earnings from tax,” the report said.

Interest rates

Income property

Savings interest rates

How to save money

RRSP Deadline


Cash back credit card

Best credit card offers

Smith Manoeuvre

HST facts

Most products we buy will see no new tax

Most of the products we buy every day will see no new tax. There are a lot of products and services on which we already pay the PST and GST. For these products, like cable and phone services, new cars and adult clothing, there won't be a change. On July 1, 2010, instead of paying 13 per cent tax to two different governments (8 per cent provincial and 5 per cent federal), there will be one tax — still 13 per cent, collected by the federal government.
No PST now, no HST after July 1, 2010

There are some other items now that have no sales tax on them, such as basic groceries, municipal transit and prescription drugs. On July 1, 2010, there will still be no HST charged on these items.
Point-of-sale rebate

Other products will be eligible for a point-of-sale rebate for the provincial part of the HST. This means you will only pay the 5 per cent federal portion of the HST. These include print newspapers, books (including audio books), diapers, children's clothing and footwear, children's car seats and booster seats, feminine hygiene products, and qualifying prepared food and beverages sold for $4.00 or less.
No new tax for 83 per cent of products and services

In total, about 83 per cent of products and services purchased by consumers will see no new tax. Only 17 per cent will see a new tax, things like personal and professional services such as hairstyling and legal fees, as well as energy costs including home heating fuel and electricity.