Canada Exceeds Economic Expectations

Canada Sees Improved Economic Forecast

First Published: February 15, 2010

While places like the United States are struggling to cope with the impact of the recession, the Canadian economy seems to be rising above the recession and moving back into the black. This is in no small part to the housing market in places like Vancouver and Toronto, which have seen record rebounds after hitting all-time lows in early-2009. As a result, Jim Flaherty, the Finance Minister of Canada, has revised the economic forecast of the country upward.

Ottawa revised its growth estimate from 2.3 percent for 2010 to 2.6 percent. That .3 percent may not seem like much, but it accounts for millions upon millions of dollars in the Canadian economy and any growth is good growth in these tough economic times. The government has also forecasted that the growth will reach 3.2 percent in 2011, before falling over the next three years to 2.6 percent by 2014.

Of course, this is all just speculation and there is no way to completely know how the economy is going to do. During the 2008 Federal Election, Prime Minister Stephen Harper stated there would be no deficit for the government if they were elected, but come March the country was running in a deficit. It is impossible to predict how the economy will do; all that can be done is to speculate.

Currently, the Canadian debt-to-GDP ratio is about 30 percent, which is the lowest in the G-7 countries, and about half of the level in the U.S. and U.K. Unemployment rate of the country is a full 1.5 percent lower than what is seen in the United States right now.

All things considered given the potential growth, the government is not stating when Canada will have a balanced budget as there are still sectors in the country struggling and the largest trading partner of the country is still running in a recession. For the next two to three years, there is really no way to know when there will be a balanced budget, even if the economy continues to grow at over two percent per year.

It is estimated that by 2015, the government’s budget should be balanced, but again there really is no way to know for certain.

* * *

Speaking of the housing market, across the country there were major gains in January, including in Toronto where the highest-ever gains for the month of January were seen. Toronto and Vancouver, along with other places like Calgary, are bringing the housing market out of its pit falls and the surging market sales are expected to continue until June of this year. It is at this point that the Bank of Canada will increase the record low interest rate, which currently sits at .25 percent. Once this happens, the housing market will slow and many are worried that the country will go through another housing bubble as those who got mortgages when they were cheap can no longer afford them. This is just another reason why it is so hard to predict how the economy will do. Enough people not being able to pay their mortgages – thanks(!) to a higher interest rate could send everything back into a tail spin.

Australia Travel Blog: Sydney City Tour | Bondi Beach

Sydney Travel Blog: Part 6 – Bondi Beach

2-Day Combo: Sydney City Tour + Sydney Harbour Lunch Cruise and Blue Mountains Day Trip

Sydney Travel Blog: Part 5 | Mrs Macquarie’s Chair

Only 8 km from the city centre, Bondi Beach is the most iconic beach in Australia and famous across the globe. Most likely, you have seen Bondi Beach somewhere in movies or pictures. Bondi is an aboriginal word that means “surf” in English.

Bondi Beach is famous for its pristine golden sands, glistering ocean, and its surf & seaside community that offers a laid back coastal lifestyle within a short distance from a big city’s hustle and bustle.

Bondi’s beautiful picturesque coastline offers easy-walk clifftops with tons of cafes and restaurants. Bondi Beach water looks very clean and the scenic stretch of ocean views are immaculate.

I was given 30 minutes to stroll the beach. This was a very short time to enjoy a beach, so I spent every second of it wisely.

The first thing I did was grab a coffee and a cake from a coffee shop in Bondi Pavilion, because I didn’t have any chance to eat anything till now. I finished the cake and 1/3 of the coffee sitting at the cafe and I took the rest to finish on my stroll along the beach and the waterfront establishment.

The weather was very nice in December. Hot, but not too hot. I was wearing only a t-shirt. I was laughing, thinking in Canada I would be wearing layers of clothes and jacket for below -20 degree Celsius cold.

I noticed open-air restaurants in the area facing the ocean that were almost full that early. People were enjoying the beach and the weather. Some restaurants had very loud music.

I noticed lots of condos and homes along the coastline with unobtrusive views of the beach and the ocean. Those who are living there simply have to cross the street to come to the beach.

I was running out of time, so I rushed back to the tour bus. The next stop was to return to Sydney for the lunch cruise.

How to Teach Kids About Money

Teaching Children About Personal Finances

First Published: February 16, 2010

When it comes to teaching children about money and personal finances, we all seem to tumble and often it seems like a taboo. Here are some ideas that will help you teach your kids how to become financially responsible and successful in their adult lives.

You should start teaching your children the value of money at a young age. Explain to them the difference between needs and wants and tell them that money does not grow on trees. Money comes from hard work and each of us has responsibilities to our family, community, and the world.

Do not pay kids a straight allowance without guiding them towards what to do with it properly. When you give them an allowance, break it down into categories such as 10% or 15% should go to their savings account, and what other percentages that should be spent to pay for their books, activities, lunch, and so on.

Do not pay kids to do regular household chores that they would normally do. Explain to them what regular chores they are required to do and what chores can be considered special projects they can get paid for – if they are able to complete it successfully. These chores are outside regular ones and you would hire someone else to do it normally. Examples are: mowing the lawn, cleaning the backyard, and so on.

Once kids have a fair idea of what money is, start teaching them how a bank works, what a credit card is and why it charges interest, what a budget is and why it is important. The age range to discuss this would be 7 – 10.

Once kids start earning money, ask them to save 15 – 20 %. Explain to them that it is very important to spend less than what they earn and to save 15 – 20% continuously as they continue working into their adulthood. If they can follow this simple rule, they will be very rich one day.

It’s a very good idea to encourage kids to pursue entrepreneurial and marketable skills. Discuss with your kids what it means to be an entrepreneur and encourage them to use their creativity to find money making ideas or to open a business kids can operate in the surrounding neighbourhoods. Also, explain to them how some skills can pay off for their lifetime and it is worth learning these skills at an early age. Examples are: writing stories, setting up online blog and make money from it, learning graphics designing, learning how to repair a bike, learning how to paint, how to fix a computer, and so on. Don’t pressure kids to learn what you think will be in demand; rather, let them find the stuff they are interested in and wanting to learn.

Explain to your kids that education is very important. Even if they start making tons of money with their business or entrepreneurial skills, it is important to have a 4-year degree. Encourage them to pay their tuition with their own money – as much as possible. This will make them understand the value of each dollar and will teach them to appreciate what they have.

Giving is very important. Teach kids the joy of giving. Explain to them that we live on a small planet called “Earth” and not everyone is as fortunate as we are. We all can help those who need it most by donating, participating in voluntary works, helping charity organizations, and opening ourselves to build a better world.

Teaching kids about money is one of the best things you can ever give to your kids. It will build a solid financial roadmap for them to follow and will help them to secure a better financial future for their lifetime.

A Brief History of An Emerging Giant: China

China: An Emerging Giant

First Published: February 24, 2010

Many people call China an emerging country that is becoming one of the most powerful on Earth, but it is very important to remember that China is not new, nor newly powerful. In fact, China is one of the oldest civilizations on Earth. For the past 6,000 years, China has been a constant power, and the only country to last this long. For more than 4,000 years, the country used a political system that was based on hereditary monarchies, but that changed in 1911 when the Republic of China was founded. This caused a great deal of problems and the country erupted into civil war. By the 1940s, the country was in shambles and taken over by the Japanese. However, in 1949 the country staged its “Glorious Revolution” and the Republic of China was pushed out of the country so that the communist party could take power. The country is now called The People’s Republic of China.

What is amazing about the country is that while it is communist, in 1978 it introduced a market-based economy and that allowed the country to become the fifth fastest growing economy on Earth and the fastest growing of the top 20 economies in the world. In addition, China exports more goods than any other country and it imports the third most goods.

For most of the 20th century, China was thought of as a place for the poor, with many poor conditions, but the country has worked very hard to reduce its poverty. While the country had a poverty rate of 53 percent in 1981, the industrialization of the country helped to build a large middle class, and the poverty level is now down to eight percent. That is a drop of over 40 percent in only 29 years.

China has also shown itself to be forward thinking in many ways. The country, widely known for its environmental problems, is now becoming a world leader in renewable energy. The country also implemented a one-child policy to stop a rapidly increasing birth rate, well before high populations around the world were even though of as a problem. While the country still has problems with freedom of the press and human rights, it is rapidly changing. It is currently the third largest economy on Earth and is a permanent member of the United Nations Security Council. The country is also a member of the G-20, the World Trade Organization, the Shanghai Cooperation Organization and one of the few countries that have nuclear weapons. While China does have the largest standing army on Earth and the second-largest defence budget after the United States, it has not shown itself as one looking for war.

Many have said that the 21st century is the century for China and they may be right. The 20th century was the American century, the 19th century was the British century, it is time for a new giant and that giant is most likely going to be the country that has existed for 6,000 years and may exist for many more to come.

Mortgage Insurance-Always Read The Small Print

Mortgage Insurance Terms and Conditions

First Published: February 28, 2010

Borrowing to pay for a house is something that can raise the hairs on the back of anyone’s neck. With a likely 25+ years’ term on the loan, there is plenty of scope for anything to go wrong and for the mortgage to end up posing you some real problems. Yet people keep doing it because, short of having substantial savings or a large windfall, there is no other way for most of us to own our own home – even if it belongs at least partly to the bank for the first quarter of a century. At the point where the mortgage is paid off in full, that house is 100% yours – something which a lot of people consider one of their proudest moments.

The twenty five years (or more) between taking out the loan and paying it off, though, is undoubtedly a long time. In that time any number of things can happen, which is why most mortgages come with an insurance package on top of the other options. Insurance works the same on a mortgage as it does with most other personal insurance packages. If death, illness or unemployment leave you struggling to pay off the mortgage, the insurance is there for the purposes of paying off the loan (or meeting monthly payments for a period) and freeing you from the financial burden on top of an already undesirable situation. Depending on the nature of the insurance and the contents of the terms and conditions, you could find that the mortgage is a god-send. The key matter as far as this goes is liability.

There are probably no insurance packages available in the world today that do not come with a list of terms and conditions that apply caveats to the insurance you are offered. If you claim on the insurance, it will pay out on the condition that none of the “small print” terms and conditions are violated. Your insurance package is likely to pay out if you can prove that you could not reasonably have foreseen the set of circumstances that necessitate the claim, and that it wasn’t your fault. In case of death, the insurance company may well ask for a medical report. Cases of suicide, or death from a long standing condition that the mortgage holder kept to themselves, can invalidate the insurance.

If health problems make it difficult or impossible for you to bring in enough money to meet the mortgage payments, it is possible that the insurance will come to your aid. Again, though, it is essential that you read the small print because if you suffered from this condition before you took out the insurance, the policy will not pay out in most cases.

Unemployment is another common reason for claiming on mortgage insurance, but this is perhaps the most laden with stipulations. Did you resign from your job? Insurance won’t cover you. Did you get fired for performance reasons? No cover there either. Were you sacked as a result of participation in industrial action? You’re not covered. The list of reasons for unemployment which actually do qualify is shorter than those which do not. If the insurance company judges you to be liable for the situation that has left you in this mess, they will not pay.