Apparently, it’s going to take more than a global pandemic to put the brakes on Canada’s rollicking real estate market. In fact, many changes brought on by the pandemic are influencing buyer behaviour and transforming some long-standing trends.

While a home-buying plan still largely depends on the key factors of cost and location, today’s historically low interest rates and the vast number of jobs that are now done from home are encouraging some Canadians to rethink what kind of future home could suit their ideal lifestyle. In other words, more real estate decisions are being based on where people want to live, not where they feel they must.

Big city vs. small town

Given lower interest rates, the increased amount of time people are spending at home and the fact that many of the amenities that make big cities so attractive have been scaled down because of the virus, home buying in smaller communities is surging.

Renters rushing to buy

The pandemic has influenced the type of housing preferred by today’s active buyer. Single-family homes, which may have seemed out of reach for some renters, suddenly seemed more attainable when interest rates fell in 2020.

Favourable conditions

There’s a lot of speculation about the effects the pandemic will have on the Canadian economy and how long they will last. But given the current combination of favourable conditions, including historically low interest rates, positive economic forecasts and a swell of new buyers clamouring to find a home of their own, there’s tremendous confidence that Canada’s real estate market will continue to thrive.

A mortgage is a fact of homeownership

Unless you can pay cash for a new home, a mortgage will be a fact of life, possibly for many years. Qualifying for and retaining a mortgage can be exciting – it means you’re on your way to owning your new home! But it’s also a big responsibility.

Calculating the weight of mortgage rates

According to CREA, the average price of a single-family home in Canada was $607,280 in December 2020.[6] After subtracting a 20 per cent down payment ($121,456) from this average price, the remaining amount on a mortgage would be $485,824.

Over the course of a typical 25-year mortgage with a two per cent interest rate, you would

· make 300 monthly payments of $2,059

· pay $485,824 in principal and $131,931 in interest, for a total cost of $617,755

Home buyers can expect interest rates to change over time, which will influence the total cost of carrying a mortgage. Even relatively small rate increases can significantly affect how much you will eventually pay.

Regardless of the amount that’s owed on a mortgage, consider making prepayments when possible or maximizing interest paydown through integrated banking products that easily adapt to your changing circumstances and goals.

Buying a house, whether to live in or as an investment, involves plenty of decisions. Here’s what you need to do to make sure you’re buying within your price range so you don’t become cash strapped and miserable just for a roof over your head.

1. Make sure your mortgage payment plus strata fees, utilities and property taxes doesn’t exceed 35% of your income.

2. Buy to hold – we’re not in a market to expect explosive growth any longer and you should always plan to keep the property for the next 2-5 years.

3. Run the numbers to make sure that you have at least $30,000 available after your home purchase

4. Don’t always hone in on the interest rate and instead look at the flexibility provided by each mortgage plan.

5. Run a comparison on the cost of ownership compared to renting and investing the difference. I can help with this.

Let's chat!

www.clementchung.com

email: [email protected]

Five million Canadians are set to turn 65 this decade. At the same time, Canadians are living longer and delaying retirement, while fewer have traditional pensions.

The pandemic has caused new headwinds and an even greater focus on decumulation challenges. As of December 2020, Canada’s unemployment rate stood at 8.6%. This was up from 5.6% prior to the pandemic.

It reached a record high of 13.7% in May, in the wake of the first shutdown. A portion of these jobs belonged to Canadians over the age of 50, resulting in a group of “forced” early retirees. A second group comprises those deferring retirement due to feelings of financial insecurity brought on by the pandemic.

I took a moment to research what was available on the internet about retirement planning compared to what was actually in my head and surprisingly, the most valuable resource on the internet for most people is the government of Canada website on the subject matter of Canada’s retirement income system.

The government of Canada’s website does a good job going into detail about Canada’s retirement income system.

https://www.canada.ca/en/financial-consumer-agency/services/retirement-planning/sources-retirement-income.html

What I really want to convey in this episode is the idea of longevity risk.

Recently, I sat in a meeting with a client who is age 72 and she had recently downsized her home and was sitting on $500,000 available to fund her retirement. In my discussions with her, we identified that she had three main prioirities.

1. She wanted to boost her income by at least $2,000 per month in retirement now that she has these extra funds,

2. She has a daughter who is ill and, although is an adult, still occasionally requires help in paying for unexpected expenses relating to her sickness,

3. And lastly, being able to leave some of her assets behind for her children is also a priority.

Now with the current landscape of social media and the neighbours next door, you can probably guess what the investment recommendations provided to her by other people sounded like right?

We have a stock market that is scalding hot due to all the money that the government has thrown at it to fuel the flames over the past two years.

We have the crypto currency market which is still in its premature days, so much so that everyone wants to get in early and become the next bitcoin millionaire

Then we have the housing market, which provides for some decent returns in a fair market, but since I’m based in Vancouver BC, nothing makes sense about it.

So then came the question of how we can create a strategy that makes sense for someone who is extremely risk averse, fearful of investment volatility and stock market movements, and has had her neighbours whisper in her ear that the world financial system is going to collapse in the next decade.

This is when I started to remember the lessons and strategies that I had implemented back in the day when I worked with a pension firm that dealt specifically with assets of seniors and retirees. The recommendations had always revolved around two specific asset classes that were mostly unaffected by stock market movements and government policies. First was the annuity strategy, and second, was the guaranteed income funding strategy.

At the end of the day – the client managed to reach her goal of increasing her income by $2000 per month risk free, while also maintaining the flexilbility in her finances that she’s been hoping for, as well as making sure that there is money available for the kids when she dies.

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Hey Everyone - its been a while since I've uploaded as life has been far too busy as of late. However, I did want to post a meeting that I had earlier this year with a media professional who was interviewing me regarding the matter of financial planning for families in the 21st century. Within this podcast episode, we cover ...

- Navigating the Dynamics within the new "norm" in families

- How to structure your finances amongst your household

- Emergency Funding Strategies & Online Banking Solutions

- Managing Debt with the Family

- Day-to-Day Cash Planning Ideas

We covered a lot of interesting ideas, simple strategies that you can implement to achieve financial security. 

You can find me at... 

www.clementchung.com

Email inquiries at...

[email protected]

Whether you’re starting your career or preparing for retirement, getting married or going solo, your financial situation and needs are unique. But there are fundamental money principles anyone can follow to begin building financial success.

Many different types of families exist today and the makeup of families in Canada continues to change. Families with married couples are still the most common type of family, but this has been declining in recent years. Family units that were less common 30 years ago have been increasing, including same-sex couples, common-law parents, and couples without children.

The picture of the Canadian family isn’t what it used to be.

These universal truths are guidelines that encompass the essentials of financial management that apply to all Canadians. Regardless of your age, gender, culture, income or profession, they can help you make better financial decisions every day.

1. KNOW YOUR MONEY PERSONALITY:

2. KNOW WHAT YOU’RE SAVING FOR AND HAVE A PLAN TO GET THERE:

Defining your life goals will give you the focus to achieve them faster, and setting a target date can help you stay motivated along the way. Read: Get SMART to achieve your financial goals

Knowing how much money you earn and how you spend it is key to managing your money.

Most people shop around for the best price on a new TV or a liter of milk. Comparison shopping can work for money, too.

Even if you’re working with an advisor who is committed to doing his or her best with your resources, the decisions―and the results―are ultimately your responsibility.

Borrowing can make sense if it helps you acquire something that boosts your net worth. But over time, paying back debt takes away from your ability to save―even when interest rates are low.

Time is money―really. The sooner you start to save and invest your money, the faster it will grow.

If investment scams actually seemed “too good”, no one would ever be taken in by one. Assess money-related matters with a critical eye, especially when it comes to unsolicited requests for your money.

As your life stage and situation changes, financial needs and priorities change as well. Review your financial plan regularly, ask lots of questions, and get to know all the options available to you.

Lets Connect!

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If you’ve every searched up the best stocks to buy in 2020, you will likely see that all the recommended companies are Tech growth businesses that are located in the US. Believe it or not, there are actually a lot of great companies that have done extraordinarily well in 2020 because they have great fundamental businesses, strong brand loyalty and have reinvested their profits into their companies to feed the flames of growth.

What I’ve done today is listed 10 different companies that you should invest in, which are outside of the typical technology stock that most people are recommending you buy. This portfolio of 10 stocks will have provided a share price increase of 21.92% per year, over the last 5 years – outperforming the associated index benchmark by 9.6% each year. In January to March 23rd of 2020, the stock market lost 30.54% in total value – during this same period, this portfolio’s resilience only reported a total loss of 10% and as of today, it is sitting at 18.76%.

Tune in to the show and find out the 10 companies that you should include within your portfolio that will let you diversify out of US Tech companies, create resilience during difficult times through brand loyalty and have a proven track record of doing business during tough times.

Investing is a bit like panning for gold – you need to dig through the dirty to find the diamond in the rough. As we move on to major changes within the technological advances of our society, your investment strategy should include participating in the growth of companies that are well adapted to the current trends in marketing, media, sales through brand and consumer loyalty. By doing so, your portfolio will be able to weather the many storms that are sure to come and knock out the stock market in the future.

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Today, I’m going to tell you the 8 best growth stocks in the technology sector to keep an eye on as we move into 2021. In this portfolio, we’ve put together an average year return of 22.94% per year. This means that for every 4 year period that you held this portfolio of stocks, you will have doubled your money.   

While I can recognize that past returns are not indicative of future performance, these 8 best stocks to buy right now can almost be considered the blue-chip stocks of the next decade.   

Blue Chip companies was a phrase formerly reserved for companies that were so large and so successful, that it was almost impossible for them to fail – these were companies whose products and services were widely accepted and were also known to weather downturns and operate profitably in the face of adverse economic conditions.    

In today’s era of technological advancement, we’ve named the 8 tech companies that we’re expecting to take on huge levels of growth in 2021.

Let's Chat

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Financial Stress is More Common Than You Think. 

Here are five tell-tale signs that you’re struggling with money stress and How the state of one’s finances can negatively affect not only their mental health but their overall wellbeing.

1. Feeling a loss of control

2. Problem avoidance

3. Loss of self-esteem

4. Lower energy levels

5. Loss of concentration

With the average Canadian household owing $1.76 for every dollar made, it isn’t surprising that 50% of Canadians agree that their level of debt is causing them stress.

Loans, credit card payments, mortgages and simply trying to keep up with social media are just a few triggers of financial stress that impact Canadians of all income levels and age groups.

When you add in a high level of debt, an average rate of income and various financial responsibilities into the mix, financial stress only increases.

People that are struggling with their finances admit that their mental health is compromised because of it. Approximately 48% of Canadians say they’ve lost sleep because of financial worries (Stats Canada, 2019) and 40% of Canadians (Ipsos, 2018) agree that their level of debt is negatively affecting their mental health.

Having multiple bills to pay and loans hanging over your head can cause you to feel more stress and anxiety, impacting your mental health more negatively than without financial worries.

There are also situations where someone’s mental health may affect their financial stability. If someone is feeling depressed or anxious, there is a chance that they will turn to overspending to make themselves feel better. Personally, I know a lot of my friends spent a good chunk of money on the new Playstation 5, Nintendo Switch, New IPhone 12, as well as the recently revamped craze on Pokemon cards.

While there is nothing wrong with treating yourself every now and then, impulse buying or consistent “retail therapy” can negatively affect your savings, your debt levels and your credit score. If you are spending on things you cannot afford, you can also feel guilty towards your actions, as you may not only be lying to yourself about your financial situation but a spouse or partner as well. This, in turn, could affect not only your mental health but potentially your relationships.

If you are willing to put in the time and effort, there are a few simple ways to take control of your financial health, in turn improving your mental health as well.

If you’re having trouble with debt and cashflow, Use my budget or the Mint App to start the process of identifying opportunities to turn a negative cashflow into a positive one.

If you’re looking for savings strategies – consider “paying yourself first” where monthly contributions are deducted from your bank account on the same day as your pay cheques. Alternatively, use the Moka App to round up your purchases to save money on every transaction you make.

Once you’ve arrived at the point where you’re ready to invest, set up an account with Questrade or any online brokerage if you’re looking for a Do it Yourself solution and use my 13 investments for beginners as a starting point to build your first portfolio.

Lets Chat!

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If you want to outperform the S&P500 AND the TSX, You need to stop buying high dividend paying stocks and instead buy stocks that grow their dividends each year.

I’m going to tell you the 13 best dividend paying & growing stocks that you need to have in your portfolio today! And just so you know – by holding these stocks over the last 10 years, you will have earned an annualized return of 12% year over year. This means you would have outperformed the Canadian Stock Market (TSX) and the US Stock Market (S&P500) as a whole!

Dividends are part of the profits that a company pays out to their share holders, as a way of returning to them some of the funds that they contributed to the company. High Dividend payments indicate that a company has earned massive profits and have little to no expectation of large reinvestments into the company’s operations – we call these cash cows.

Low dividend payers generally indicate that they are making profits and would like to provide their investors with some sort of rewards, while also signalling that the profits they’ve made are going to be directed into the future growth of the company. We call these dividend growers.

Dividend Growers are my favorite form of investment holdings because they constantly pay me a passive cashflow on my monies invested – and because they’ve continually reinvested their funds into their company, their stock prices tend to skyrocket as they continue to grow over the course of 5 – 10 years.

This is the method I’ve used to create a portfolio that generates a 3.70% dividend yield – which is guaranteed pay out of income each year, while also averaging a 12% return on investment through increases in the value of my holdings.

Dividend paying stocks are great investment ideas for people looking for a steady stream of income while also benefitting from the ongoing returns within the markets. Its important to be picky when it comes to choosing individual stocks as their business models and industries can affect the dollars that you make on your portfolio. If you copy the 13 holdings that I’ve listed in this video, while maintaining a dividend reinvestment plan & annual rebalancing strategy, you will earn a 3.70% dividend yield on your portfolio and likely, outperform the stock market index based on the value approach that we’ve taken in assessing these holdings.

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Hey guys - I'm so excited about this podcast where I tell you about the secret to investing with ETFs during recessions, elections and pandemics.

DID YOU KNOW? The biggest mistake most people make when using Exchange traded funds is in purchasing a single broad market index!

Exchange traded funds are diverse, flexible and cost effective – however, if you want to know the most effective way to use ETFs, then be sure you stay tuned until the end when I reveal the technique that all institutional portfolio managers are using to maximize the use of ETFs in their billion dollar portfolios.

The COVID-19 pandemic prompted many investors to look more closely at their investments – and made it clearer than ever why it’s important to know what you own and understand how it works.

What is an ETF?

An ETF trades on an exchange – just like an individual stock. That makes ETFs very easy to buy and sell, and it also means they are priced throughout the trading day (unlike a mutual fund, which is priced only at the end of each trading day).

ETFs also generally offer:

· Low fees because they have lower operating costs

· Transparency, with holdings reported every day

· Potential tax efficiency when portfolio turnover is low

Keep in mind that the savings associated with low fees and tax efficiency are magnified over time. So investors benefit the most from these features when they hold ETFs for the long term.

With so much money going into these assets, I want to make sure that you know how to differentiate between the different kinds of ETFs.

Passively managed

The first ETFs, introduced in Canada 30 years ago, were structured to replicate the returns of a specific index. Instead of actively choosing investments, the managers of these early ETFs set them up to match the holdings of the indexes they were tracking. They were “passively managed,” simply matching the index without trying to outperform it.

Actively managed

With an actively managed ETF, a portfolio manager carefully selects individual stocks, bonds or other assets, just as he or she would for an actively managed mutual fund. The difference is that the portfolio is structured as an ETF with all an ETF’s benefits, including low fees and potential tax efficiency.

Strategic beta or smart beta

As of Nov 2, 2020 – The strategic Beta ETF FNGU earned a whopping 267% return for the year so far.

A strategic beta ETF may give preference to value stocks, growth stocks, low-volatility stocks or any other group of assets that can be clearly defined. With a rules-based approach, performance does not necessarily depend on the manager’s day-to-day decisions but rather on disciplined adherence to the factor model, which offers two advantages. First, even professional money managers can be subject to the behavioural biases that affect all investors, and that may diminish returns. Second, less hands-on involvement generally means lower fees.

Incorporating ETFs into a portfolio

You need to decide whether ETFs can contribute to achieving your goals, and which types will best meet your needs based on your life stage, investment time horizon and tolerance for risk.

Creating a portfolio of ETF’s with a mixture of passive, active and strategic beta holdings could allow you to enhance your portfolio’s returns while also managing risks.

With the instability in the current marketplace, here are a some exchange traded funds to invest in to carve out some extra returns.

1. QTIP

2. ZUH

3. ZUT

4. ZGI

5. STPL

Lets chat! 

www.clementchung.com