Not fun.

I know exactly how it feels because I’ve done it. I was the emcee at my sister-in-law’s wedding and it was a blast except when I told a joke that bombed. No one laughed because my timing was off and truthfully it wasn’t that funny of a joke.  Instead of running out of the room in a panic, which would have been my first instinct, I laughed it off and kept on going.

What I realized is no one really cared.

I have to admit when I first started public speaking I wouldn’t have been able to handle bombing a joke in front of 200 people. If I was asked to speak in front of a group of 5 people my palms would sweat and I would get stressed out. That was before I joined Toastmasters.

A year and a half ago I joined Kelowna AM Toastmasters. I can tell you I have learned a lot. Don’t get me wrong I am still no Zig Ziglar, and I can’t motivate an audience like Tony Robbins, but I’ve realized I will never get better if I am afraid to try.

In my next 3 posts I am going to share with you the 3 things I learned from Toastmasters that helped me overcome my stage fright.

#1 – Public speaking is simply communication – If you are 25 years old and have been talking since you were 2 you have 23 years of  communication experience.  Stringing sentences together for that long makes you more than qualified to speak in front of a group. For some reason I see people who are quite articulate become inarticulate as soon as they are asked to talk to a group. I believe it is because they think there is a huge difference between public speaking and regular everyday speaking – the truth is there isn’t.

To be sure there are tips and tricks to being a great presenter, but if you can talk to 1 or 2 people you can talk to 10, 20,  or 200. The difference is really just in your mind. The biggest hurdle I had to clear when I decided to learn to be a speaker was in my own head. Once I convinced myself public speaking is just like talking to regular people I was able relax more and be myself. This alone reduced my nervousness by half.

If you suffer from stage fright or fear of public speaking try changing the way you think about public speaking. Remember talking to a group really is no different than talking to a handful of people the difference is just in your head. As Bryan Tracey said, “Change your thinking, change your life.”

Next week part 2 of 3

Most people believe their penalty is going to be about 3 months interest. Which is true of most closed variable rate mortgages. However, fixed rate mortgages have a feature called Interest Rate Differential, or IRD. Lenders are not keen on letting you break a higher rate mortgage to get a new lower rate mortgage. They use the IRD to ensure they don’t lose if you decide to do this. (Canadian banks are smart remember? )

Basically if you got a 5 year 5.5% mortgage 2 years ago and wanted to break your mortgage for a 5 year 4.00% mortgage today your lender is going to charge you the difference between your rate and the current rate. Which will turn out to be a lot more than 3 months interest.

For instance I have seen $200,000 mortgages with $10,000 penalties because of the IRD calculation. In order to get an equivalent 3 months interest the mortgage rate would have to be 21%! ($200,000 at 21% is $3,356 a month!)

The reality is for some people the penalty on their higher rate mortgage is too high for them to consider breaking their mortgage. It is worth having a mortgage planner do the math to see if you will end up saving money or not. There is no point in paying your bank a hefty penalty just so you can say you have a shiny new sub 4.00% mortgage. What follows are 3 ways you can legally lower your penalty if you are considering breaking your mortgage early.

1. Utilize your prepayment privilege
Most lenders have an annual prepayment option. Usually somewhere between 15%-25%. For instance, if you can prepay your mortgage by 15% you will reduce your penalty by 15%. Since your penalty is based on your outstanding balance at the time of payout. There are 2 ways to accomplish this:

• Use cash or other credit to make a lump sum payment on your mortgage before you pay it out. (Be careful, some lenders have a clause written into their contract that will prevent this. Do your homework first)
• Ask your lender to reduce your penalty by the prepayment amount. Often if you are planning on staying with the same lender they will lower your penalty by the prepayment amount. ING Direct does this.

2. Blend and extend your interest rate

Another option you can consider is blending and extending your mortgage. Basically here is how it works: If you are in a 5.00% mortgage with 2 years left until maturity, call your lender and ask them what would your rate be if you blended and extended your mortgage for another 5 years. Blending and extending means you are signing up for another 5 years.

You may be thinking, why on earth would I want to extend my term since I plan on paying off my mortgage anyway. The reason is your penalty is calculated based on your rate versus the current rates. I just recently did this with my mortgage here is what happened:

My mortgage $200,000

My rate; 5.19%

My blended rate: 4.18%

Penalty based on the 5.19% – $7,500

Penalty based on the 4.18% – $3,500

As you can see I cut my penalty in half.

(Be warned this will not work with every lender. Some lenders will not let you blend and extend unless you increase your mortgage. Contact me if you want help with this)

3. Readvanceable strategy -

You must have a readvanceable mortgage for this to work. (A readvanaceble mortgage is a mortgage and line of credit that are linked. As you pay down the mortgage your line of credit limit increases. Scotiabank does this, so does Manulife one, National Bank and many others.)

Here is how it works:
Assume you have a mortgage of $200,000 at 5.5% and a line of credit of $50,000 at 4.00% with a zero balance. Take the $50,000 from the line of credit and use it to pay down your mortgage. This will effectively reduce your $200,000 mortgage to $150,000. If you were planning on paying out your mortgage you just reduced your penalty because your penalty is calculated on what you owe.

Like in strategy 2 if you reduce your mortgage amount your penalty will usually decrease.

If you are facing a big penalty and want advice on how to tackle it please contact me and I’ll be happy to see what we can do to help you.

Yes banks, like them or not, have been known to take advantage of long-time loyal customers. Banks are keenly aware that a long-time loyal customer is less likely to shop around and get a second opinion. Yet shopping around is a simple way to ensure you are always getting a good deal.

Now I am not suggesting all banks are bad, but I have seen many loyal customers who have had the wool pulled over their eyes because their bank had become too comfortable with the relationship. Every relationship can get stale.

When you have been married for a long time, the indiscretions are usually minor and amount to dirty socks being left on the bedroom floor, or failing to put the lid back on the toothpaste. Incidentally, both are criminal offenses in my home. However, if your bank begins to treat you like Zsa Zsa Gabor treated her 8^th husband, you know you have a problem.

Mortgage renewals are a perfect example. When a client has an existing mortgage they are typically mailed a notice with various rate options. The idea is for the borrower to choose an option, sign it, and send it back in. However, the rates quoted on the renewal notices are typically 0.50% -1.00% higher than the best available rates at any given time!

If you have a 30 year $200,000 mortgage, an increase of 0.50% over the life of the mortgage amounts to over $21,000 in interest! Not a small sum of money.

The crazy thing is that new customers who have no pre-existing relationship will typically be offered lower, more attractive rates in order to convince them to become a customer. Then, unfortunately, once you are a customer, the onus is on you to make sure you always get a good deal.

My suggestion is as follows – begin dating your bank, do not get married. Commitment is sound advice for most relationships, but it can be very costly when it comes to your finances. The best way to ensure your bank treats you like a first date instead of a 3^rd marriage is to get educated. Understand your options and for heaven sakes, always shop around before you sign on the dotted line. Make a few calls to make sure you and your business are courted, not taken advantage of!

If you are feeling like your bank is not giving you the love you deserve contact me and I’ll be happy to introduce you to a bank who treat you like the queen or king you are.

Just think of us as a dating service for your mortgage.

- “This is the last time, I’m warning you, eat your dinner.”

-”Stop hitting your sister. If you hit her again you are going to be in big trouble.”

-“Johnny, I’m counting to three, 1…2…” -you never really want to count to 3, but you find you count to 2 a lot and start over.

-”No you can’t have more money. Besides what happened to the money I gave you 2 days ago?”

-”I don’t care if your friend is going to the party, no you are not going.” - and they end up going anyway

If you are like me you have probably found there are certain battles you have with your kids that happen over and over and over again. It seems like every family has their unique problems, but I am telling you there is a better way. I call it, Jedi mind tricks for parents

Basically it involves a few concepts I learned from an amazing book by Kevin Lehman called, “A New Kid by Friday” and I just experimented with his ideas on my 3 children. They loved it -Okay they didn’t, but boy did it work.

I call it Jedi mind tricks because it has worked so well on some occasions I felt like a Jedi master using mind control on my kids.

Here is how it works:

Imagine you wanted your child to eat her dinner. Here is what you do. You say to her, “Sarah eat your dinner please.” If she doesn’t comply you say something like, “That is fine, you don’t have to eat your dinner, but I’m not going to be happy.” Then you don’t bring it up anymore. You don’t nag, or yell, or count to three. You just say it once.

Sounds like fun so far doesn’t it?

The next step is critical. You do not fight with your child to get her to eat her dinner. Besides, fighting with your child when she wants to dig in her heels is difficult and tiring. Instead you will apply what I call the, ‘learning moment’ later on when they least expect it.

A little while later when your child asks you for something they normally get no problem, like a bedtime story, you say, “No, not tonight” and turn and walk away. When your child begins to question you, and they will, on why you are being so cruel you simply say,”I am not reading your story tonight because when I asked you to eat your dinner you wouldn’t do it. It really hurts mommies feelings when you don’t listen so unfortunately tonight there will be no story.”

Your child may plead, they may scream or cry, but no matter what do not give in. Instead sit down with the child and explain to her that their choices have consequences. They always have a choice, they just may not like the consequences of their choices. You will be amazed how well this works.

Sound crazy? or strange? I have done it and it works. It works with children of almost all ages, my 3 year old son understands the word, ‘consequences’ now thanks to this technique. It will also work on a teenager. The reality is even teenagers are quite dependent on their parents.

If your 13 year old daughter won’t clean up her room. Taking away her bedtime story is probably not going to work. But when she asks for a ride to her friends house to play Wii, you say, ‘No,’ and explain to because she didn’t listen their are consequences. Again do not change your mind on this no matter what your daughter promises. The key is to be consistent and do what you say. If you do, your daughter will quickly learn their are consequences with her choices.

Let’s face it, she is always going to need something. You decide when the, learning moment, is going to happen and you decide what the consequence will be for not cooperating.

I’ll give you an example from my family with my daughter. She is normally an extremely obedient child, but like any child will attempt to push the boundaries if she can.

One night before bed I asked her to clean up her toys before reading her a story. She snapped at me, “I’m only cleaning up half the toys.” I said, “That’s fine you can clean up half the toys, but I won’t be happy.” She decided cleaning up half the mess was good enough.

The learning moment came a little later when I was about to read her a story. At story time my two oldest get to pick one book each. I read my son’s book and then I read half of my daughters book. When I was at the half way point I shut the book.

The look on my daughter’s face was one of shock. “Daddy,” she said, “you only read half my book.” I went on to explain to her how when she doesn’t listen there are consequences. I explained to her that I loved her, but tonight there would not be a full story.

You may think I was being cruel, but I think it is more cruel to yell and scream and fight all the time to get your child to help out. I will admit I felt really, really bad about being so abrupt, but that is the power of the learning moment. It comes when they least expect it and you decide what the learning moment will be. You know your child best and know exactly what it will take to make your point.

I believe it works on children of almost all ages except if they are too young to understand. My youngest is 20 months and this doesn’t work so well on her yet. Although, I have heard my 3 year old say to her, “Jiah that is fine, but I am not going to be happy.” Apparently he thinks she gets it.

Now in our family if someone says, “That’s fine, but I’m not going to be happy,” my kids ears perk up, their eyes start to twitch because they know their Jedi parent is up to something. They are learning they always have a choice, but there are consequences when they make the wrong choice.

If you want more info on this please read, “A New Kid by Friday” by Dr. Kevin Lehman. He is the expert. I am just a dad with 3 kids who happens to think fighting, yelling and bribing his kids is not a lot of fun.

If you have tried this or a different parenting strategy I would love to hear about it in the comments below.

*Disclaimer – I am not a child psychologist. If you need one, talk to one. I am Just a guy with 3 kids and a desire to share what is working for us.

Here is how it works:

Step 1 – Take a bi-weekly payment
Step 2 – Increase your bi-weekly payment by 5.00%
Step 3 – Repeat the 5.00% increase every year on your anniversary date

To give you an idea how well this works. A borrower with a $200,000, 35 year mortgage and a 5.00% interest rate would have a bi-weekly payment of $501.42 the first year. In the second year she would increase her payment by 5.00%. In her case her bi-weekly payment would be increased to $526.49 -an increase of only $25.07. If she continued to do this year after year she would end up being mortgage free in only 16 years! The huge savings comes from the cumulative increases year after year. It is basically the power of compounding, only it is working for you instead of against you.

$100k Club – Bi-Weekly Payment 5% Increase/Annum
Mortgage Amount $200,000
Interest Rate 5.00%
Initial bi-Weekly Payment $501.42
Initial Amortization 35 Years
Increase in payment 5.00%
Revised Amortization 16
Total Savings $118,098
Years Saved 19

To be fair not everyone will be able to increase their payment by 5.00% year, after year. If 5.00% increase is too high try a 2.00% increase. You can still save a lot of money.

If the borrower from the above example increased her payment by 2.00% she would have to increase her payment to $511.45 in the second year. That is an increase of only $10.03. That is equivalent to the cost of two Starbucks lattes and is probably achievable by a lot more people.

$100k Club – Bi-Weekly Payment 2% Increase/Annum
Mortgage Amount $200,000
Interest Rate 5.00%
Initial bi-Weekly Payment $501.42
Initial Amortization 35 Years
Increase in payment 5.00%
Revised Amortization 21
Total Savings $89,915
Years Saved 14

As you can see a 2.00% increase every year will still reduce her mortgage by 14 years and save her $89,915! In my market the average mortgage is closer to $300,000 and the savings worked out to be $100,000 or more in most cases –hence the $100k Club.

If you would like to be enrolled in this program please contact me with your maturity date or any other month you prefer and we will automatically remind you to increase your payment every year. We will also calculate your savings so you can see how close you are coming to the $100,000.

*The guarantee assumes you have a mortgage to begin with. If you don’t then you probably just wasted 4 minutes of your life that you will never get back. You should go and do something fun immediately to make up for your wasted time. Alternatively, you could forward this on to 5 friends who do have a mortgage and something special will happen to you. I can’t be sure what that special thing will be, but I am certain you will. like it.

I have been a longtime Seth Godin so I bought it on my ipad and read it loved it. Here is my take on this great little book.

“The dip” is basically the low point in any endeavor when you have to work really, really hard to achieve any additional success. In any new venture or project when you first start out your enthusiasm is usually high and the gains happen quickly. However, once you have been at it for a while the improvements become slow and difficult.

An example of The Dip is how difficult it can be to lose the last ten pounds. Anyone who has struggled with losing weight will tell you the last ten pounds is harder than the first twenty or even thirty. Dieters know full well the difficulty of The Dip.

I also liked Seth’s seemingly bizarre claim that, ‘Winners are actually quitters.’ Traditional success literature is full of advice cautioning us never to quit if we want to be successful. The Dip reminds us to quit doing the dead-end useless stuff, so we can focus on the, life-changing important stuff.

The trick of course is knowing when to quit and when to lean into a problem and persevere. The book is a very quick read and I would recommend it to anyone who is struggling with a lack of focus, or if you are thinking about quitting a job, a business or even a relationship.

If you don’t have time to read the book, or haven’t read it in a while here are my 3 key insights from the book:

1. Quitting is not the same as failing – Quitting strategically can be a great idea. If you decide you are quitting make a plan so you can leave on your terms. I have quit things in the past without taking the time to plan a smooth exit and it has always been costly, both emotionally and financially.

2. The harder it gets, the better chance you have of insulating yourself from the competition – If the market you are in is tough right now sticking with it will reap rewards long after the tough times are past. A perfect time to increase market share is when everyone else is fearful and cutting back.

3. Never quit something with great long-term potential just because you can’t handle the stress of the moment. – If you have decided it is worth enduring ‘The Dip,’ don’t give up just because it gets hard. If it is something worth doing stick with it and lean into the challenge. Great things can happen when you push through the tough spots.

The book was a really easy read and it took a fresh approach to quitting and focusing on what really matters. If you are currently struggling to make progress in your business or some other area of your life I would highly recommend this book.

if you have read the book I would love to hear your thoughts on, “The Dip,’ in the comments below.

In Canada there are 2 main credit reporting agencies. Equifax and Transunion. You can get a copy of your report for free from both companies but you must fax or mail in a request. They will mail you a copy of your report for free.

If you want your credit score you will have to pay for it. The report is just the data they use to calculate your score. Currently it costs $23.95 from Equifax and $22.90 from Transunion. Since both agencies have their own formula you will likely have a different score with each of them. Do not worry about this. As long as they are both above 700 you are in great shape.

Important note: Checking your personal credit will not lower your credit score. This is referred to as a soft hit and is perfectly acceptable.
The Formula For Determining A Credit Score

Your score is made up of hundreds of possible pieces of data but can be broken down into 5 basic categories.

To simplify this and make it more memorable, I have developed what I call the A B C’s of Credit. It is a simple way to remember how Equifax determines your credit score.

A B C’s of Credit:

A. Always pay on time – 35% of your score is determined by your ability to pay on time. If you are late make your payment as soon as possible.

B. Beware of high balances – 30% of your score is determined by your balance to limit ratio. Basically, if you have a credit card with a $3000 limit and you owe $3000 or more, your credit score will tank. The lower your balance the better your score.

C. Credit is like fine wine (older is better) – 15% of your score is determined by the age of your credit. New credit is less valuable than older credit.

D. Don’t be desperate – 10% of your score is determined by credit checks. If you are applying for credit a lot, your score will go down.

E. Employ 2 types of credit – 10% of your score is determined by the type of credit you have. It is best to have a loan and a credit card to score the highest. Also credit cards from banks are generally better than credit cards from finance companies.

Your credit score is like your money reputation. It is important to maintain as high a score as possible because it will ensure you have the most negotiating power.
If you have questions about credit or Credit Scores please contact me.

A video explanation of your Credit Score.

1. 99 Designs – Crowd sourced designs. If you need something designed you can post it as a competition and you will have dozens of designers submit their idea for your design. Pay only for what you want. It is an amazing site for anyone who needs a website, logo, book cover, t-shirt or just about anything else you can imagine. The best part is you set the price for the contest.

I’ve used it for my, ‘How to Rob Your Bank,” book cover. I had over 72 designs submitted in less than a week. Once I narrowed down my top 5 I was also able to send a link to my friends so they could view my designs and vote on them. In the end this was the winner.

2. Best Jobs Philippines – If you are looking to hire a virtual assistant to help you with admin tasks, programming, or bookkeeping I would highly recommend this site. You can post jobs and search resumes to find the ideal candidate. I have tried outsourcing in India but I have found the Philippines to be much better place to find help.

My programmer is from the Philippines – he built this site plus many others for me.

3. Press75 – I am a big fan of websites built on WordPress. Press75 has some of the nicest wordpress templates on the net. This website is a Press75 template that I had modified.

I think for most small businesses WordPress is a great option. It is much cheaper than getting a website built from scratch and if you want to add a feature there is probably a free, or cheap plugin already designed for WordPress. (Plugins are basically small programs that do all sorts of cool things. Like this free contact form.)

With a conventional website you need to pay someone to update your site, or spend a lot of money having them build a Content Management System or CMS. WordPress has a built in CMS. Which means you don’t have to be a programmer to add stuff or make changes to your site. This keeps the cost way lower.

4. Evernote – This program is amazing. Basically it is your brain only better. Never forget anything ever again. Once you put something into Evernote it is indexed and you can find it with a simple search. You can send emails to your Evernote account, clip web pages or take pictures with your Iphone and upload them. Evernote is accessible from anywhere and completely searchable.

I use it all the time to keep track of everything from websites to restaurants and everything in between.

Here is an image I took of my daughter standing outside of a Sushi place I liked. In Evernote if I search Sushi this image shows up because Sushi is on the sign behind my daughter. Cool or what?

5. Ping.fm – This is a great site that allows you to update all of your social networks at once. Now admittedly I am only on Twitter, Linkedin and Facebook. However, with Ping.fm I can create a post and it will automatically send it everywhere. It is beats logging into 4 or 5 social network sites to post something. This one I just started using but so far it has been great.

A few years ago I watched a program on TV about a guy who had a traveling circus dog act. He would train dogs to do the most amazing tricks and stunts imaginable. I was uber impressed with the stunts, but what impressed me most was how he found the talent for his dog show. I assumed he would select the smartest well-bred type of dog so training them would be a cinch.

Instead he would visit the local SPCA and simply walk down the aisle bouncing a tennis ball. What he was looking for was a dog with what he called, “ball drive’ if a dog paid no attention to the ball he was not selected. What he was looking for were dogs who followed the ball bounce and had an innate drive to chase the ball. He was looking for dogs who would chase the ball no matter how far he threw it. His criteria had nothing whatsoever to do with breed. He would choose the most mixed up half-breed dog with ball drive over any pure bred.

I believe when hiring people is the same thing. The most important criteria is drive. It is not education, or family background, or even experience. The key thing I look for is how willing are they to chase after a goal. They must possess the internal motivation to go after a prize or finish a project no matter what. This trait is invaluable in any organization.

A person with drive is trainable. A driven person will accomplish more before lunch than a lazy person with two degrees and an IQ of 180 can accomplish in an entire week. In my opinion it is one of the key indicators of success. No matter how smart you are, no matter where you were raised, or where you went to school if you lack drive I would not hire you.

The key thing I believe is to nurture their internal drive. Admittedly I have not always been the best nurturer, that I am working on, but I would take a driven person over a person with a stellar resume any day of the week.

At one time it was easy for banks to get away with this. In the good old days it was nearly impossible for Peter to even realize what was happening. Unless he happened to run into Paul and the topic of mortgages came up, but let’s face it talking about mortgages is about as exciting as watching Cricket. It was very unlikely Peter would ever be aware of his Banks larceny.

Now thanks to social media and our hyper-connected society business are becoming much more transparent. You may think, “Banks being open and honest -it’s never going to happen.”

Well my friend I have proof. It is not exactly overwhelming, but it is the beginning of a new trend and Credit Unions are spearheading the movement. It is called ‘Transparent Banking.’ I personally think Naked Banking sounds better, but they never asked for my opinion.

Transparent Bank is simply a policy of no games and no posted rate nonsense. Basically the lowest prices and rates are displayed on websites and in branches. Credit Unions are simply saying, “Here is our price and here is the level of service you can expect. Do you want to do business?”

I love it. Simple and to the point and best part is Peter and Paul both get a fair deal.

Do you think banks will adopt this policy? or will they continue business as usual?

The truth is the Walmart executives will have their work cut out for them.

What does this mean for traditional banking? And does Walmart have any hope of challenging the Canadian Banking industry? -God I hope so. (but I’ll get to that in a later post)

Last I heard there were over 40 applications for Canadian banks in Canada. It seems everyone wants a shot at the Canadian consumer. This will be good news for fee sensitive Canadians but will Walmart’s foray in the financial business end poorly like Canadian Tires’ did?

Of all the retail and grocery store giants attempting to enter the financial space Walmart may actually has a decent chance of succeeding, provided they don’t muck it up.

When Canadian Tire entered the mortgage business a few years ago it just seemed weird to me. I couldn’t imagine sitting around a dinner party and telling my friends about my Canadian Tire mortgage. The brand didn’t seem to make sense to me.

To be fair Canadian Tire had a really good mortgage product for while. It was a strong competitor to the Manulife One and the National Bank All-in-One product, but it just didn’t have any sex appeal and it never really got any legs. (pun intended)

Now granted having a Walmart mortgage is probably not going to be considered sexy, but when I think of Walmart I immediately think -low prices. I can envision a Walmart Bank running on razor thin margins and passing the savings on to their customers.

I think if the Walmart bankers are smart they will enter the market gradually. Much like ING direct did when they came to Canada. ING established a strong foothold by offering a really great high interest saving account. It got them noticed and built brand loyalty.

I think Walmart’s chances for success are much higher if they can build a flagship product and build some momentum.

If they come out with every service imaginable I suspect even if the prices are low the service will probably suck. It takes time to build a quality service team.

I for one am excited the retail giant it treading into the banking industry. Whether they survive or not the increased competition will rollback rates on mortgages and lower the cost of other financial products.

What do you think?

Life insurance is the type of thing you buy and hope you never need. Unfortunately not all types of life insurance are created equal.

One type of insurance I do not like is “Creditor Insurance” it is when you have life insurance on a loan or mortgage. Basically, it will pay off the loan in the event of a claim. This sounds wonderful, but can actually be a huge problem for young families.

CBC did a review on some of the problems a couple years ago.. To be fair not all types of Creditor Insurance are the same, but as a general rule it is better to get life insurance separate from your mortgages and loans.

In this video I talk about the problem a young family could face if they choose Creditor Insurance instead of getting a separate life policy.

In 5 years of mortgage brokering I have never sold a single policy. When I first got into the industry I did my homework and realized there were cheaper and better alternatives. I recommend borrowers speak to a licensed life insurance agent.  Don’t ever buy it from your banker or broker unless it is just for temporary coverage.

Disclaimer: If you currently have Creditor Insurance and want out -do not cancel it until you talk to a qualified life insurance person.