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

Here is how it works:

I am going to give my website a facelift, but I can’t decide on which theme to use. I have narrowed down my search to the 3 themes below.

In order to be eligible to win the $25 Starbucks card you have to give do to one thing. Give me your opinion on which theme you like best. On Friday December 10th I will randomly select a winner and post the winner on my Facebook page.

Here are the choices in no paticular order:

Polished Theme

Standard Theme

Awake Theme- this one has 40 different color options. To see the option I like choose the tab Skins, then Glossy Variations, then Glossy Blue
Post your favorite in the comments section or on preferrably on my Facebook fan page. Everyone who gives me their feedback will be entered to win the $25 Starbucks/Timmies gift card.

Thanks for you help.

Scott Peckford

I have decided my website needs a facelift. I have narrowed down my choices to 3 totally different themes. I need your help to decide which theme you like best.

I am wanting to change the layout of my website. I have narrowed it down to 3 totally different themes and I am looking for you help in deciding. I will make a decision by friday

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.

1. Sir Richard Robinson – Do schools kill creativity?

2. Barry Schwartz – The paradox of choice

3. Dan Ariely – Author of Predictably Irrational

4. Tony Robbins – Why we do what we do

5. Daniel Pink – The surprising science of motivation

If you have never checked out TED I would highly recommend it. The videos can be found on youtube and online.

Banks generally put posted rates on their websites and in their branch windows. These rates are generally much higher than the banks’ current lowest possible rate. It’s similar to the car sticker price.

Banks have done this successfully for years and it worked well when the goal was to have Peter pay a higher rate so he could subsidize Paul’s lower rate mortgage.

However, this is becoming increasingly difficult. The internet, and books like this one, help consumers figure out what is going on and ensure Peter also gets a fair deal.

Recently a few financial institutions have started to publish their best discounted rates, or specials, on websites and in ads. This, in my opinion, is a step in the right direction. At the time of this writing ING Direct and BMO both do this. Many credit unions have started doing this as well. Envision Financial and Prospera both practice naked banking.

Unfortunately, there are still several banks in Canada where this is not the case. Instead, these institutions still speak with terms like “1.00% off posted” or “1.25% off posted.” For most people this is just plain confusing.

The other reason banks are reluctant to axe posted rates is because they tend to calculate payout penalties based on the higher posted rate, not your lower contract rate. This usually results in a much bigger penalty if you payout your mortgage.

When you are quoted a rate, make sure you get the actual rate you will pay and make sure to ask how your penalty is calclated. A lower rate mortgage with a nasty formula for calculating the penalty can end up being very expensive.

If you have questions on posted mortgage rates or want advice on how to lower your penalty or mortgage rate please contact me.

Preet Banerjee – What Qualifies as Passive Investment Management

Million Dollar Journey – The Smith Manoeuvre (This is an oldie but a goodie, definitely worth the read)

Mike Holman – Canadian Resident and Non-Resident RESP Eligibility Rules – if you want more info on RESP’s check out Mike’s book

Squawk Fox – How to set Financial Goals -3 Financial Goals Worksheets

Canadian Mortgage Trends – TD CEO Supports 25 year Amortizations

Financial Post – Bank of Canada seen hiking rates in first half of 2011

National Post – Too Many Clowns With no Financial Plan – I read this a couple weeks ago and found it interesting.

Here is what I’ve been watching on Youtube.

Grant Wiebe

Ian Watt

Finally this is also an oldie, but still cracks me up. “Where my kids at? Where my kids at?” Have a great weekend

A question I am often asked is, “Why is my appraisal so low?” In this video I explain how a few low priced sales in your neighborhood can lower your appraised value.

If you have questions on this or anything else mortgage or Real Estate related please contact me.

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.

A question I am getting asked more frequently in our current market is, “Can I still sell my house even though the mortgage is for more than the property is currently worth?”

There are many people who purchased homes in 2007 & 2008 who now find themselves upside down. Being upside down basically means your mortgage is higher than the current value of your home.

People in this situation often ask if they tried to sell their house what would happen. In this video I explain 3 possible options.

As always, if you have questions on this or anything else mortgage or Real Estate related please contact me.

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.