As Didi says in the novel (Findependence Day), “There’s no point climbing the Tower of Wealth when you’re still mired in the basement of debt.” If you owe credit-card debt still charging an usurous 20% per annum, forget about building wealth: focus on eliminating that debt. And once done, focus on paying off your mortgage. As Theo says in the novel, “The foundation of financial independence is a paid-for house.”
The BBC Storyworks site in Canada has launched a 6-part series written by me about Covid-19 and the impact on housing and the mortgage industry. The articles will appear weekly, starting this week. Later articles will look at mortgage options, the investing experience following Covid, optimum investment strategies going forward and close with retirement strategies in the age of Covid.
The first article went up on Thursday and covers how the Work-from-Home phenomenon has impacted where we all live and work. You can find the full piece by clicking on the highlighted headline here: Rethinking Home Base. The series is sponsored by TD Bank.
Working from home is now mainstream, whether temporarily for those still employed, or as a more enduring shift to home-based self-employment. Many technology companies now let employees work from home: some until 2021, some permanently.
“Covid-19 shaped the real estate market during the second quarter in every possible way,” says Phil Soper, president and CEO of Royal Lepage. Its latest housing survey showed home prices rising sharply, with supply struggling to keep up with a surge in demand: “As the reality of extended and potentially permanent work-from-home employment sunk in, people pondered both the location and size of their homes,” he said in a release on the survey, “Simply put, larger homes in smaller communities have become more fashionable.”
Many urban homeowners are selling their expensive city homes and swapping them for bigger places in the suburbs or cottage country. Not surprisingly, and as Reuters recently reported, there’s a severe glut of office space in New York City. Many REITs with heavy exposure to offices and malls have been hard hit.
Consumer spending patterns changing too
Covid has changed consumer spending patterns, with less eating out and reduced need for new clothes for the office. Meanwhile, cooped-up homeowners are landscaping back yards, and adding pools and decks. These home-based workers are upgrading computers and office equipment, upgrading smartphones, adding peripherals from Logitech or HP Inc., trekking to Home Depot to retrofit workspaces and ordering furniture online from RH or Wayfair. They stay in touch with customers through technologies like Zoom or Skype. They collaborate with remote co-workers through Slack or Microsoft Teams. They close deals with electronic signatures from firms like DocuSign, while medical professionals consult via telemedicine tools like Teladoc.
Cottage country booming
Cottage country is experiencing a massive sales boom. The story says veteran Collingwood realtor Karen Willison is swamped with business from urban refugees. Far from creating bargains, Covid has elevated home prices across the board, especially those with waterfront.
New retirees figure prominently: Pre-Covid some clients who thought they’d retire in two years are speeding up plans. We’ll look at this aspect more later in the series.
No one likes the sting of putting out money for building repairs, but if your initial investment could save you hundreds, maybe thousands of dollars, it’s well-worth the momentary pain. These same upgrades will also help you avoid costly damage that would end up making a bad situation even worse. If you’re the owner of a business or company, here are six commercial upgrades that could keep you in the green.
Get into hot water
Most people try to stay out of hot water, but the fact is that everyone needs it and it can get expensive if your heater isn’t efficient. When your hot water tank is old, rusty or leaking, don’t try to squeak by for another year. For example, if you live in California, contacting a water heater company in Granada Hills and changing out that old tank, or selecting a newer “tankless” system, will start saving you money right away. Once you’ve got a new tank in, always remember to keep the water temperature just hot enough and never on the highest setting, and you’ll see the difference in your bill.
Change out your bulbs
Changing out your company’s lighting is the easiest tip you probably never thought of. In a place of business, lights are in use all day, every day, so why not save every penny you can? Switching your regular incandescent bulbs to energy-saving LED bulbs will use 75% less energy. They also last 25 times longer than regular bulbs! In a building where the lights are on all day and possibly all night, switching to LEDs will save you significant money.
Weatherize the Building
Just like you save energy at home, you should do the same at your workplace and weatherization is just the ticket. For example, you know that drafty area everyone complains about? That’s hard-earned money going right out the window. Before you lose any more, now’s the time to seal up or replace those loose fitting windows and doors, making the building attractive as well as efficient. If your office gets extremely cold during chilly days, consider brand new insulation or adding to what you already have.
Take advantage of the Sun
More and more businesses are deciding to harness the energy of the sun to help with costs. Using solar power can greatly reduce your electric bill, but is most compatible with larger establishments that have the space to install an adequate size system. Continue Reading…
I did not want to book a ticket only to receive a voucher for a cancelled flight, so for weeks beforehand, I did my homework and had been tracking arrivals and departures from both Guadalajara, Mexico (GDL) and Phoenix Skyharbor Airport (PHX) in Arizona.
While other airlines were no longer flying this route, American Airlines had been dependable, with daily flights on time and arriving in one piece.
I made my reservations online and signed up for text alerts on my flight. The day of the departure, I had our driver take me to GDL International airport hours before departure in the event of any snafu’s. I knew things were going to be different, flying in the time of COVID, and I wasn’t sure what I would be meeting.
Arrival into bureaucracy
I registered at the desk and checked one bag. All went smoothly, until I found out I needed to fill out a “health form” before I entered the security x-ray area. No problem, just hand me one: oops, no paper form available, it’s all online. First, I must add this contact number to my WhatsApp, then fill out the form, and scan the bar code at the security entry like your boarding pass on your phone. I was good to go.
Except that my flight had no gate assigned yet, because it was delayed!
Oh no.
Glad I signed up for the alerts!
My flight continued to be delayed over the next 7 hours with my phone beeping every 20 minutes to let me know I wasn’t flying yet.
I tell myself: I just want to leave today! I don’t care if I have to snooze a few hours in PHX airport so my ride can come get me at a reasonable time the next day. I just wanna go.
Normally, my wait time in airports is filled with my catching up on emails, perhaps watching a video and then gliding onto the plane. Today, I was far too nervous to get interested in anything long term like an email … With the public announcement mentioning this flight leaving, that flight leaving, my phone beeping, my husband whatsapping me, my ride in AZ is whatsapping me, things were getting too crazy.
C’mon guys, give me some clue!
Hours into the delay, I figured I needed to speak to someone at the American Airline desk. Where the heck is THAT?!
Do you know how big airports are?
After literally walking thousands and thousands of steps (I have a step counter on my digital device) and realizing that I would have to go outside of security, then back in “somewhere”, wait in line, speak to an agent, fill out the health form again, go through security again, lose the $3 bottle of water I just purchased … I started to get frustrated.
Meanwhile, my phone continues to beep letting me know: that my flight had been delayed, yet again.
Should I reschedule myself for another flight another day? After speaking with agents at the desks by the gate where I had parked myself, they tell me “no, no, your flight is leaving today. It’s not canceled, just delayed.”
I wonder if I should just take a taxi back home and start over. I’m beginning to get a little confused as to what might be the best thing for me to do. Meanwhile I was hungry beyond nuts and raisins to tide me over.
All passengers for flight #5902, come to your gate
A young Hispanic bi-lingual girl sitting next to me also waiting for the same flight, suddenly jumps up and said “They want to talk to us.”
Digitally contacting my family in Arizona and Billy in Chapala, all of us were watching this unfolding scenario. I eventually received a meal voucher after 4 hours, which was very nice of the airline, and the right thing to do.
I use mine to get some grilled tilapia, mojo de ajo, and a mango lemonade. The dang phone keeps beeping – yeah yeah, I get it. My flight’s been delayed.
This goes on until I get my new update. My flight – isn’t cancelled – it’s delayed until tomorrow afternoon! What!?
Back to the gate desk to see what’s going on.
Sweet dreams
The man at the gate explains that my flight will leave tomorrow and for now, here’s another voucher for free transport to a hotel, prepaid night at the hotel, dinner and breakfast the next morning, then transport back to the airport.
So now I must get my checked luggage from the original check-in desk.
I’m still walking around (thousands more steps) until I can find an exit out. I speak to some young girls at a table, then a young man whom they call over who promises to help me obtain my luggage.
Getting to the American Airline counter, the guy who took me there says I don’t have to wait in line in a case such as this, just go to the front. Perfect.
Now what?
I speak to an agent who is very kind, explains to me more of what is going on (in English, thank God) and I take my luggage and myself to the shuttle meeting place. Lots of other passengers are there as well … and I wonder … where will they take me? As we crawl through Guadalajara commuter traffic, I’m curious as to if this hotel will be a cheapie? Will there be hot water? Oh gawd, I hope there aren’t cockroaches or other critters. The way this day has been going anything could happen.
I look around in the transport van, and I notice a well-dressed young family, several women with coifed hair and freshly done nails… No, they wouldn’t DARE put me up in a cheapie. These high-class women would rise up in rebellion!
You can clearly see Chapala, the Airport and the location of Fiesta Inn
Arriving at the Fiesta Hotel
Arriving at the hotel, people are friendly and with big smiles. I get signed in, get a credit-card type of entry key, sign a few forms, and the check-in clerk hands me a small box, which I’ll open when I get to my room. It’s now past 8:00 in the evening and I am ready to call it a day. I’m not slap-silly yet, but close.
Wandering around some more looking for elevators or stairs, I find myself directed to the elevator and I push floor #2. Nothing happens. I know I’m tired … so I press again, only this time, harder.
Soon the door opens and a young man and older woman enter. He scans his credit card entry key and presses floor #1. He instructs me to do the same. Oh jeeze. Country bumpkin discovered.
Cripes.
I get to my room, use the credit card entry key and now can’t seem to find the way to turn the lights on.
A completely gorgeous young woman who is a fellow passenger is outside my door and offers to help me to get anything I need. Mexicans are so well-trained by their mothers to be polite, helpful and considerate: to women and especially older women. That would be me.
I am very grateful.
My comfy hotel room
After I get inside my hotel room, I open my box. There is more hand sanitizer gel, wipes and another mask. With 9 masks on me and my own bottle of hand gel, I have gel and masks coming out the wazoo.
My room is huge, clean and has 2 queen size beds, shower amenities, a desk, and a huge digital wall TV. I fiddle with the air conditioner which is set on – 16 Celsius, roughly 61* F. It felt like you could hang meat in this room.
It takes me a few moments to realize that my digital weather station is telling me that soon, I’ll be sleeping in a freezer and I adjust it up to a comfortable 24 C.
Breakfast also came with a fruit plate, coffee and juice
Breakfast
With the voucher for another free dinner at the hotel I couldn’t fit two dinners into one evening since I just finished the one at the airport. Oink, oink.
I was so tired I couldn’t even make it down for the free glass of wine.
However, the comp’d breakfast the next morning was delicious also, with great service.
All of us passengers are shuttled back to the airport, and a big surprise awaits me.
No kidding, Billy finds me in the airport!
Billy – on his way to meet up with friends for the weekend – was flying to Puerto Vallarta, Mexico, and for curious reasons, his domestic departure gate is just one down from my international departure gate! Go figure.
So, my knight-in-shining-mask walks up to me as I’m waiting in the gate area. You can notice how happy I am to see him!
I finally did make it to PHX, albeit, a day late and a few Pesos short.
Returning to Mexico – smooth as silk
Shuttle shenanigans
Initially, back in Mexico when I was trying to make reservations for transport from the airport to my sister’s home, the local shuttle was not running. For a special driver, I would have had to pay $350USD+ for a round trip ticket, purchased in advance for the discount. This is about what I paid for my roundtrip flight, and I wasn’t keen on spending my money in this manner. Continue Reading…
Are you currently working from home? If so, have you noticed changes in your daily coffee consumption after your usual work schedule was placed on hold?
COVID-19 has changed many aspects of working individuals’ daily lives, including their coffee routines. Players in the coffee industry have been in survival mode as their creativity is needed more than ever to stay successful in today’s business landscape. Unfortunately, for those in the office coffee service industry, the pandemic is taking a significant toll, making it increasingly important to understand changes in consumer behavior.
The office coffee service industry is experiencing a 40 per cent revenue loss, which is the greatest setback in the industry’s history. The Freedonia Group, a market research organization, does not expect a recovery in the coffee service industry any time soon with the recent ongoing changes.
One example of a critical change is when the Centers for Disease Control and Prevention urged employers to close off shared spaces and invest in single-serve items for their workers as opposed to communal items, such as coffee pots.
Closing offices and pushing workers to instead be productive from home furthers the shift in coffee consumption in the face of COVID-19. More than 90 per cent of people who are working remotely end up drinking homemade brewed coffee. Instead of drinking coffee at the office, consumers are now ordering coffee subscriptions and purchasing online more than ever. By selecting different blends and customizing their coffee subscriptions, they are attempting to achieve the “away from home” quality of the coffee.
U.S. office workers’ coffee usage during the lockdown
These direct-to-consumer sales completed through coffee subscription, mail-order sales, and delivery is the best way for companies to tap into new areas of growth in the office coffee service industry. Regular instant coffee will no longer satisfy coffee drinkers as they work from home. Compared to the February to March period, subscription sales were up by 109 per cent during the March to April period. Also, in comparison to March 2019, packaged coffee sales in the U.S. in March 2020 were up by 70 per cent. With a focus on at-home consumption, the negative impact will not be as detrimental because of the limited elasticity of coffee demand.
Emre Gencer Unsplash
During the pandemic, subscriptions have become increasingly popular. Many companies are seeing five times more daily subscription sign-ups now versus pre-COVID-19. They are also noticing increases in subscribers who log back on to repurchase bags of coffee that they enjoyed. Subscription growth is on the rise and continues to deliver above-market growth. These increases can be explained by the convenience subscriptions bring to coffee drinkers. By investing in options that can be delivered directly to consumers’ homes, busy workers can continue their coffee drinking routine.
The quality and convenience of direct-to-consumer sales are not the only reasons subscriptions are appealing during the lockdown: safety precautions play a major role too. Going out in public spaces during a pandemic feels risky and uncomfortable for many people. When people do go out, they prefer to spend as little time out as possible. Continue Reading…
Last time we talked about boosting retirement savings during your final working years. In an ideal world you’ll have the double-effect of being in your peak earning years while your largest financial obligations are in the rear-view mirror.
In the real world, however, many Canadians are faced with an uncertain retirement because they lack adequate savings, don’t have a company pension plan, they’re still carrying a mortgage, line of credit, or even (gasp!) credit card debt, or they’re still providing financial support to their adult children.
Preparing for Retirement
Much like preparing for a new addition to the family, or for one spouse to stay home with the children full-time, preparing for retirement is about understanding new spending patterns.
If your final working years aren’t spent in savings overdrive mode, perhaps there’s time to test out your retirement budget in the year or two before you retire. You might as well try living on 40 – 60% of your income while you’re still working to see if it’s realistic.
If it’s not, there’s still time to adjust course by altering your income expectations, working longer (and saving more), or revisiting your investment strategy. Speaking of which …
Investing in Retirement
One of the biggest worries for retirees is outliving their money. That’s why it’s crucial to have a proper investment strategy in retirement. Investors don’t simply sell their stocks and move to bonds, GICs and cash once they retire. Canadians are living longer and our portfolios need to be built to last.
One strategy to consider is the bucket approach. The idea is that while retirees need cash flow, they also need a diversified portfolio of stocks and fixed income. Your first bucket is for immediate needs and should contain one or two years’ worth of living expenses in easy-to-access cash. Bucket two is for medium-term needs and is filled with bonds or GICs. Bucket three is meant for long-term needs and so it’s typically filled with stocks, ETFs, or index funds.
Whether you think you’ll rely on government benefits or not, it’s important to understand how CPP and OAS benefits work and how they might impact your retirement income plan.
The maximum monthly payment amount for CPP in 2020 is $1,175.83 [if taken at 65], but the average monthly amount for new beneficiaries is actually $696.56. You can take CPP as early as 60, but the amount is reduced by 0.6% for every month you receive it before 65.
Alternatively you can delay taking CPP until as late as age 70. In this case your pension amount will increase by 0.7% for each month you delay receiving it up to age 70. Continue Reading…
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The BBC Storyworks site in Canada has launched a 6-part series written by me about Covid-19 and the impact on housing and the mortgage industry. The articles will appear weekly, starting this week. Later articles will look at mortgage options, the investing experience following Covid, optimum investment strategies going forward and close with retirement strategies in the age of Covid.
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