Monday, April 30, 2018

Untangling a Messy Insurance Situation!

Look before you Leap!
When I was a little girl, my parents always expected me to run into trouble because I often rushed too much!

I would occasionally run into a corner of a wall or hit my shoulder on a doorway, just because of running and not looking ahead.

At school, I'd replace a minus sign with a plus mid way through solving a math problem or substitute a 3 for an 8...

Small mistakes lead to wrong answers and, in childhood, to a lot of bruises.

Well, some things are just a part of our nature. I have to admit that I'm still experiencing similar types of issues and hitting obstacles just because of going too fast and not looking ahead.

Found Really Cool Insurance Company

A few months ago, when interviewing market leaders on various topics as part of my book research, I discovered a very neat insurance company.

They specialize in home insurance and use technology to let average consumers choose exactly the coverage they need for their homes.

This process gives you an experience similar to how the rich would do it - a consultant walks with the rich through their home, pointing out fur coats and expensive vases and painting, and asking whether those should be insured and at what value.

This company repeats the same experience for every client using super friendly online application process.

For example, if you own a bike and live downtown Toronto, you can add bike insurance coverage. On a flip side, you can skip everything that doesn't apply to you and save some money. So, if you don't need jewelry or fur coat coverage, you won't be adding it to your plan.

Evaluating Risk can be Tricky! 

Another very neat aspect is that selections by default include all the necessary coverage. So you can't make a costly mistake accidentally.

For instance, even though earthquakes rarely happen around here in GTA, you shouldn't remove earthquake coverage to save a couple of bucks on your premium.

When dealing with insurance, always imagine what you'd like your coverage to be in case a certain disaster happens. Would you think saving two bucks a month was a great idea, when your home got shattered by an earthquake that no one even expected?

No! You'd want some money to get yourself a new place or fix those cracks in the foundation.

I learned during the interviews, that insurance providers already figured out adequate cost based on the likelihood of a certain event. They wouldn't charge consumers millions of dollars for earthquake protection in GTA. However, they do have a lot of data to validate the scenario and, if there is a slight chance that an earth quake is possible and can cause considerable damage, they'd offer the coverage.

So what I really liked about this new insurance company is that they wouldn't let you waive coverage of the type, where a typical consumer wouldn't have sufficient data to make a wise decision. They wouldn't let you take on a risk of losing everything just because your assumptions are based on day-to-day life and not backed up by lots of data with detailed analysis of trends and probabilities.

Instead they'd let you make very safe decisions such as increasing your deductible to save money on your premium or removing coverage that will not cause you to be out on the street in case of a disaster. For example, removing bike insurance and increasing deductible from 1K to 5K would be a great way to save money without putting yourself at risk of becoming homeless at the same time.

Saving $1,200 = A Week on Vacation

Now, at last but not at least, this new insurance coverage ends up being cheaper than what I currently have.

All the small savings from choosing the specific optional coverage I need and waiving safely components that I don't need, add up. Also, even though I have several properties, this company doesn't charge me extra.

Each of my properties still qualifies as a regular residential rental home and there are no extra charges for being a commercial client with more than 3 rentals. Traditional insurance providers would usually charge you extra, once you have more than three rentals.

I got quotes for the first three of my rental properties with a total saving of $400 a year. This might not sounds like much to you, but here is my math.

Saving across all of my properties would be around $1,200 a year.

$1,200 roughly equals to half a year of profits on one of my rental home. This is because my typical goal is to make $200/month on every unit. By tweaking my spending on insurance, I gain half a year worth of profits.

Let's see how the saving compares to what people usually make on a paycheck at a job. Let's assume 30% tax and 80K/year salary.

$1,200 equals to  $1,714 paycheck earned at work before tax. This is about 5 business days worth of work. Basically a week!!!

No matter how you look at this. The saving of $1,200 sounds HUGE in my mind and I wouldn't want to miss it.

Going Too Fast

Better Safe Than Sorry!
Obviously, I got very excited about this opportunity to streamline my insurance expenses and rushed forward.

I got three quotes for three properties and successfully transferred two of them to the new insurance provider: my primary residence and one of the rentals.

It was a very smooth and easy process and only took a couple of minutes and clicks at the computer.

Unfortunately, there was a snag with the third property!

What I didn't realize was that the company only insures a very specific type of residential properties.

There is an underwriting process that takes place after you get a quote and before you get coverage confirmation.

Oops!!! Left With no Coverage!

My third property didn't meet the underwriting requirements and coverage was rejected.

This happened because this property is not a typical residence. It is a triplex and is on cultural heritage list.

Unfotunately, I rushed forward and had cancelled the coverage with the existing provider BEFORE I received a note from the new vendor that they would not cover this property.

I did so because:
  • I saw the two other properties transfer very smoothly. 
  • I loved the quote for the third property as well. 
  • It was the last day to cancel renewal with the current provider without any fees. 
  • I tend to rush!

To make matters worse, when I started looking for another new vender, it turned out that most insurance companies would not even quote you on rental properties insurance unless you also cover your primary residence with them.

So, now with only a few days left, before my coverage expires I have to find insurance coverage at reasonable cost and move two of the properties from the new vendor elsewhere.

The good news is that the new company that I describe above doesn't have the requirement of covering primary residence. So I can still take advantage of their pricing for most of my properties. In addition, their cancellation fee and process is easy.

Now, fingers crossed! Let's see how my search plays out.

Have any comments or questions? Please comment below the post or get in touch directly. I'd be happy to hear from you.

Wednesday, April 25, 2018

3 EASY STEPS: How to Make a Dream Come True

Above is a video digest of what I've resisted for the past 20+ years and finally came to piece with:

There is so much I still need to learn from all the people around me!!!

Childhood - Being a Sponge that Soaks In

Let's go back to our childhood. Growing up, we go to school for more than a decade to learn the basics. 

These seemingly basic ideas are in fact a result of thinking, trying, and failing of our predecessors during many previous generations. They worked hard to clear the road for us.

I am watching my kids grow up. 

All the way from birth through school, they are sponges soaking in numerous concepts that they are being taught. 

It's incredible to see them going from little smiley honey bunches to Homo Sapiens (Latin for "wise man")  so fast.

Working - A Sponge that's Being Squeezed Out

Some time later in life, we become the sponges that are being squeezed out for knowledge. 

We give back what we've learned. 

We contribute at work, at home, and in our personal life, sometimes to the point of complete exhaustion. However, in many cases we feel good about it. 

This is natural, since we want to be a part of the future! We'd like to contribute. 

Plus, it feels so great when you are so smart that you can teach or boss others around you, doesn't it?

Well, my husband and I certainly agree that it's fun to kick our kids around. Shhhhh, don't tell the kids...

What if You are Still Asking Yourself: 

How do I become successful?

What I realized recently, during my career change from an HRIS professional to an investor, is that the most certain method to succeed in anything you'd like to take on next remains the same as when we were little.

Whatever your new goal or aspiration is, learn from someone who already knows and is willing to teach you.

The difficult part is to stay open-minded and follow the recipe your teacher points out to you step-by-step, until you see yourself get it right and succeed.

When my 8-year old misspelled "bird" as "burt" this morning, he didn't question or argue. He laughed, took an eraser, and fixed his writing. 

Going back to myself now. I figure that if I could learn when I was eight, I can most certainly pick new things up when I am years wiser! 

This is why my three step approach has been:

1) Find a formula that works and that I believe in
2) Follow that formula exactly 
3) Repeat until I master the formula.

This works! I am learning one new formula at a time and feeling successful.

I wonder what you are thinking. Would you mind leaving a comment below?

Saturday, April 21, 2018

Time to Collect Your Money

As I summarize in the 1-minute video on the left,

last Sunday I woke up to an email 

from Shopify with the subject of...

drum roll...

champaign bottle pop...

hold your breath...

Time to collect your money

"Hmm. Really?!? " was my first thought.

My strategy is always to expect the worst. This approach helps me keep going and not take disappointments to heart. So, I told myself to chillax before clicking into the email.

Chillax is my new favourite word by the way. I learned it from my kids. It means exactly what it sounds like: calm down and relax.

And being as calm as I could be, I clicked into the email, which told me to finish my Shopify Payments setup to get paid for my first sale.

So, it was official: my online store had its first sale! I had my first customer who bought several digital products at 50 Doors. Yay! It worked!! I couldn't believe it.

My new online asset is starting to put money in my pocket. To be specific, here's how the math looks:

$20.00 from customer - $5.68 to google ads 

= $14.32 profit

As you may already know, asset is something that puts money in your pocket.

The theory is that if you own enough assets, the money from all of them will add up and cover all your expenses. 

Once that happens, you can consider yourself infinitely wealthy. 

A wealthy person has assets working for him or her. Per this definition, the wealthy can live forever without relying on going to work to make money. 

To measure how wealthy you are, just think how long you can survive for without working. 

My starting point was 30 days - simply because I lived paycheck to paycheck. I am still not a lot more ahead, but making some progress. 

My husband and I set out with our 50 doors goal: 50 assets, each putting $200 dollars a month into our pocket, so we have about 10K a month to feed our (always hungry) family. Boys sure do eat a lot!

There are many different types of assets. In my mind, the major categories include: 

  1. real property
  2. businesses and 
  3. financial assets.

Real Property Assets

The basic idea is that you own something tangible and get paid for letting others use it:

A house, car, vending machine, solar panels, fancy suite or dress, a parking spot, etc. 

Take an object, find someone who'd like to borrow it, lend it and collect cash.

Business Assets

Business is a system set up to solve a problem for a profit. 

Find something that will help others around you. Figure out how to attract people in need of the solution that you are offering and help them at a profit.  

This is what I hope my website is doing. It is helping people educate themselves and get their first real estate investment property in Canada smoothly.

Financial Assets

I recently came across this table (source: Desrosiers Automotive Consultants Inc. (“DACI”):

Automotive revenue in Canada 

What struck me is in the column highlighted with blue. Let's take 2015:

Imagine all the factories building new cars: that's 32% of revenue

Imagine all the dealerships selling used cars: that's 18% of revenue

Imagine all the servicemen helping us repair and maintain our cars: 10% of revenue.

Now think about the money we borrow to buy all of the above:

Automotive finance produces 

the biggest chunk of revenue: 


The point is that money can easily become one of your assets as well.

There is unlimited number of opportunities around you to put that asset to work for you. Examples include investing in private businesses, mortgages, equities, bonds, etc.

What I am now finding out is that you don't need a lot of money to start. You can make each dollar that you don't spend become an asset that works for you.

The trick is to educate ourselves, so that we can make decisions and balance risk and reward in each project. Then, act on our knowledge and get in the game.

Interested? Hesitant? Afraid? Let me know your thoughts in the comments below. I can't wait to hear from you.

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Friday, April 13, 2018

Making a Difference - How You Can Deliver on Your Dreams!

In the last few weeks, I realized that I've been spending a LOT of time on Netflix.

I started watching "Gossip Girl" series and got hooked up on it! The problem is that there are years of episodes and each runs for about 50 minutes. So over the last ten days, I was watching Netflix almost all night long until my phone battery died, on three different occasions.

The consequence is that on the following day my productivity level plummets. I become super grumpy and very slow.

Not good.

Why Even Talk About Netflix?

Because it has become one of my biggest liabilities:

"A liability takes money out of my pocket." - Robert T. Kiyosaki
And since time is even more valuable than money, my Netflix addiction is very costly.

I still remember how I subscribed to Netflix back in 2013-ish.

I was on a business trip to California. I had a really awesome friend there, named Kell. 

Kell also goes by "the purple guy". He loves all shades of purple. Kell always wears everything purple: purple shoes, purple pants, purple T-shirt, purple laptop bag, etc.. He even can give you a pamphlet on the benefits of purple. Long story short, I love hanging out with Kell and hope to see him again soon. That day, we were at lunch.

Kell told me that he and his wife got a new house. The house was amazing (aka "Purple" in Kell's terms). Except for one little annoying thing: It took Kell two hours to get to and from work.

So, when I asked Kell how he could even survive being stuck in the car for this long, he told me that he was actually okay, thanks to Netflix.

Apparently, Kell was able to watch (or, I'm hoping, more like listen to) Netflix movies while he was  on stand still in traffic. And this made his commute very enjoyable!

A couple of days later, I was at the SFO airport heading home and all flights were cancelled. So I had to kill time until 6 AM the next morning. 

It took me 2 seconds to subscribe to Netflix. And I had the best time ever waiting for my flight!

Now, ever since that day, I became a vivid Netflix fan. 

Unfortunately, based on my theory of Assets and Liabilities, over time Netflix became one of my biggest liabilities.

Liability Takes Money Out of Your Pocket

Liability is something that takes resources away from you.

When you subscribe to Netflix, the monthly fee will automatically come out of your account. That's okay! As long as you have sufficient money coming into your account from your job or assets to pay for this liability.

In my case, last month was a bit out of balance.

When I sat down to do my finances and put money into my April buckets for car, groceries, home, etc., I realized that I was a bit short in March. So the money that came in from assets wasn't enough to cover all of the expenses that I have on liabilities side.

There are only three ways to fix this issue:

  1. Decrease what liabilities take away from you
  2. Increase what assets bring you
  3. DO BOTH

So, I looked at all the liabilities that are taking money out of my pocket.

And so far, I found three that I could trim:

  • Netflix @ $14.18 per month
  • Home Insurance - I found a new vendor and got more coverage while saving $26.21 per month
  • Insurance on two of my rentals - Saving $27.40 and $8.66 a month
These three changes save me almost $1,000.00 a year.

Small Changes can Make a Huge Difference

Netflix, only charges 10.99 USD per month. Seems like not that much!

Now, in Canadian plus tax dollars, that's actually CAD 14.18. On an annual basis, $14.18 x 12 = $179.88

Everyone measures value differently. But here's a drastic coincidental example that I came across, which got me thinking.

Small Tokens of Help Add Up! 
Last week, a young lady called Vinie stopped by my house. She is with Save the Children organization. In their "Be a lifeline" program, this organization collects 84 cents a day to feed a starving child.

$14 a month is enough to feed a starving child for over two weeks. 
Just consider this to realize how much difference re-allocation of small chunks of resources can make. 

Last weekend, I was at a Business Mastermind seminar. I was honored to learn from Gerry Robert, the Author of a classic motivational book, The Millionaire Mindset: How Ordinary People Can Create Extraordinary Income.

At the event, Gerry emphasized several times that for anyone who aspires to reach a goal - grow their business, write a book, or become a sought after speaker - it is critical to stop watching TV or cable or Netflix.

These two incidents helped me realize that stopping my Netflix subscription was absolutely the right thing to do.

Simply because it helps me re-allocate my time and a little bit of money.

Imagine How Much You Did in the Last 6 months at Your Day Job?

Many years ago, using the same logic my husband and I stopped paying for Cable. Just before we did that, we both had realized that most of all we watched Channel 5.

At the time, that was the weather / what's on channel. We would watch 'What's on' for a couple of hours almost every night before dozing off. Then, one of us would wake up in the middle of the night and switch the TV off...

Lately, aside from the Gossip Girl adventure, I've been mainly scrolling up and down through "what's on" on Netflix and was having trouble selecting an actual movie. What a waste of my own time!

If you re-allocate your time to acting on your aspirations, you will be able not only achieve your own goals, but also help others reach theirs.

Now, in my case, I watched at least 2 movies a week on Netflix over the past 5 years. This is over 1,000 hours of time. Being a human resources professional, I know that a year at work is considered to be 2,080 hours.

Imagine how much you can get done over 6 months at your day job??!?

Well.... that's how much I didn't do for myself.

Wake Up! Time to Make Your Dreams Come True!!
And this is why I urge everyone to consider their Time and Money liabilities to make sure you are spending your time on what matters the most to you.

Find a way to do more of what you'd like to do.

Find a way to do less of what you don't appreciate doing.

Now, since I have already watched ALL of the romantic comedies I ever wished to watch, it's time for me to re-purpose my movie-watching time to other activities.

What are your thoughts on the topic? Your comment below will be very appreciated.

It'll help more people find my blog and perhaps make a small positive change in someone's life.