the Wealthy Canadian

Today I am writing a review of ShareYourNumber.com

First I’ll start by explaining  What ‘your number’ is; well it seems to be based off of Michael Mastersons’ Seven Years to Seven Figures‘ book (a decent book, by the way, I should really review it sometime) where you determine what level of lifestyle that you’d be comfortable with.  You then calculate how much that lifestyle will cost you annually and what date you would like to be financially free.  Once you know your financial freedom date and your annual lifestyle cost it is easy to determine how much money you will need to attain financial freedom.

That is Your Number (well, really it is two numbers;  how much and when).

ShareYourNumber is a social network where you go to publicly declare ‘your number.’  After you’ve shared your number the community is there to help you get there.  Forum discussions, blog posts different groups that you can join, etc.  Seems to me to be sort of similar to a personal finance blog directory.

The Good
The best part of the whole exercise is that it forces you to sit down and consider what your life’s purpose is.  From there it is a matter of setting one giant SMART goal, i.e., your number and when you will achieve it.

The second good point is that this is a community of like-minded individuals all located in the same place.  Everybody gets their own space, you can blog join discussions, etc.

The Bad
This site it confusing, in fact it is not really one site att all but a collection of sites.  While trying to find information I was redirected (from ShareYourNumber) to ning, kickapps, ShareYourNumber.org and several subdomains under ShareYourNumber.com.  I’m guessing this started as a ning community before  eveloving into a space of its own.

The Summary
This social network is a great idea to get people to publicly announce their goals – which I’ve read is the most important thing is setting the goal because then it becomes an accountability.  It is also a community so you can lean on others to help you along or provide your own advice.

If you are already a blogger on this subject then I’m not sure if this is the site for you (other than promoting your own space).  Bloggers tend to build their own communities plus they are generally the masters of their own domain.  There are plenty of ads on ShareYourNumber but, I’m sure, none belong to the members.

All in all, I love the idea but am lacklustre on the implementation.  If anyone has signed up and is using it then I would love to hear your comments.

During the last boom Calgary was one of the hottest markets in Canada.  Combining a global real estate bubble with a commodities surge, Calgary, the home to Canada’s oil sector, was well positioned to benefit.

Things have been cooling off in the last 18 months, or so, so I decided to take a look at the Calgary Real Estate Board’s December 2008 statistics package.  Side note: I have to hand it to CREB for keeping and publishing great stats, the best in Canada, in my opinion.

• Over the last year median sale price has dropped from 368,500 to 340,000, or 7.7%.
• They’ve had huge volume compared to sales for a long time now and the absorption rate is currently sitting at 10 months.  That means if you have a house to sell, you can expect it to take 10 months before it gets sold.

What isn’t in this report is the state of the local economy.  I have heard from friends that the job market is starting to look bleak.  People are starting to lose jobs.  Apparently, if you apply for a job and don’t list a Calgary address then the application ends in the garbage.  What this means is that inventory may increase and/ or prices will start to drop as people are forced to sell.

I am not a professional blogger and I am not in this to make money.  My blog is really a journal where I write about things I learn, have learnt in the past, and other items that just pique my interest.

Today I came across something that did pique my interest – a Web Company that promises to mentor people in everything that you need to do in order to succeed with an online business. Online Profits dot Com.

Judging from their ad copy it looks like it is more than the run-of-the-mill e-book scam (a la the “$49 special where we teach you nothing that you need to know”).  They’ve divided a program up into multiple modules in a step by step approach.  Their list of mentors looks impressive, as well.

Is it worth it?  I have no idea.
Will I buy it? Doubtful.

However, I am submitting my name for a free draw at Daily Blog Tips .  I am also a sucker for free stuff.:)

Nortel was once the crown jewel on the Toronto Stock Exchange.  At one point Nortel alone accounted for 35% of the entire composite index.  Today the weeping giant, Nortel, announced that they have filed for bankruptcy protection.  You can see the announcement on their website.

Trading on the TSX has been halted, and according to Andrew Wahl Nortel will likely be de-listed completely from the TSX and NYSE.  From largest company in the index to de-listing in a decade.

I have always been personally interested in this company as I used to work for them.  I worked for them until I got frustrated and quit.  There were still many great people at the time of my departure.  Over the years they have slowly been leaving (one way or another).  My heart goes out to those that are still there.

What is interesting is that Nortel sucked it up and declared bankruptcy, after years of trying to recover from poor management.  While some other poorly run companies are getting bailed out.

Update: The TSX has resumed trading of NT.  The price has dropped 62.34%

Just about everybody seems to be frustrated with insurance.  High premiums, large deductables, and coverage that never seems to match what we end up needing.

By and large, however, the insurance industry works as it should.

• The premiums are based on risk and coverage.  An 18 year old male insuring a Ferrari is going to cost.. alot.  Short driving exprerience and statistical likelihood of an accident, and the value of the asset being insured.
• Deductables are there, IMHO, to prevent us from making frivolous claims.  Consider that a smashed windshield might cost 100$ to replace, but in total might cost $150 insurer once they pay administrative costs.
• The coverage can be somewhat sneaky, e.g., they may pay for floods but not sewer backups, and we never realize it until it is too late.  However, you do get the coverage that you pay for.

So whatever our feelings on insurance, it works as intended.  Usually.

Insurance works best when only a few of the many insured make claims.  When widespread catastrophe strikes it becomes very difficult for the insurer to cover all payments.  It’s not like an insurance company puts our premiums under their mattresses, they invest the money. They invest your premiums in the same market that has seen your savings and retirement plans lose 50% of their value in a few short months.

I’m not doomsaying, I’m not predicting that you won’t be able to get your car fixed after your recent fender bender.  I am merely pointing out that insurance is not a guarantee.  For more of a gloomy perspective check out this from Bankruptcy Law Network

Where I am going with this is how this relates to the Credit Default Swap (CDS) market and our current ‘credit crisis.’

CDS’s are similar to insurance, except that they insure against loan defaults.  Your bank will pay a premium for insurance against people not paying back their loans.  The good folks at places like Bear stearns will gladly accept premium payments at the risk of having to pay out the full amount in case of default.  Unfortunately, if a large number of these loans do default then the insurer may not be able to meet the payments.  Your bank paid their premiums for insurance but did not receive the benefit.

Consider this hypothetical example.

Balgonian International Group (BIG) commences a leveraged buyout of Louisiana Trust Insurance (LTI) for $2B.  It’s leveraged because they need a loan, which they get from Bull Steers Investment Bankers (BSC).  BSC implements a Credit Default Swap to remove the risk from their books, Frehman Sisters (FEH) accepts the swap.  FEH gladly accepts the premiums and invests them wisely in an up and coming insurance company called Louisiana Trust, whose shares have seen a dramatic increase lately (since the announcement of a buyout).

Unfortunately a bad hurricane season, and the fact that LTI only services Louisiana, has bankrupted LTI.
BIG has also been hit hard and they can not make the payments on their loan, they default.
BSC attempts to recoup their losses on the loan by asking their swap counterparty (FEH) to pay up.
FEH invested the premiums so they sell their stake in LTI.  Unfortunately, due to the bankruptcy of LTI, their stock has dropped 99%.
Everyone loses.