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May 18, 2018

A Filter For…

A filter for social media.

A filter for all forms of communication and action.

A filter for living life.

Is it true?
Is it positive?
Is it useful?

Living by these three tenets makes for a less-stressful social media experience for sure, but lately I’ve been trying to apply them to my conversations, my writings, and to my day-to-day actions.

Have I got it all 100% figured out, dialed-in, and mastered?

Heck no.

Are they three golden rules I am reminding myself of daily?

Heck yeah.

I type them, and I write them down, and I repeat them out loud on a daily basis.

If I had a mantra this would be it. OK – maybe I have a mantra.

So am I applying all three flawlessly to 100% of my life?

Nope.

But I’m trying. And it’s not that simple. Here are the things I wrestle with:

Perceptions

The trickiest thing to manage is the perception of others. Studies have indicated that people with a negative bias towards life are often viewed as more intelligent than those with a more sunny disposition. It would seem that to be a touch too optimistic might call your intellect into doubt. It might affect your street-cred, leading people to think you’ve got your head in the clouds to all the genuine pain, suffering, and danger in the world.

Too pessimistic is also risky, because nobody wants to hang out full-time with the ‘Cliff Clavin’ of doom and gloom, always letting us know just how bad things are at this exact moment.

And once again that most frustrating word of our time enters the picture: balance.

Balance

All things in moderation, it is said. And thus we may want to ‘balance’ our communications. But for those of us whose first language is English, the fact is that 62% of our emotional words are negatively biased. So there is no perfect balance within the very medium in which we communicate.

Studies around the little voice in our head have indicated that 60% to 70% of our daily self-talk and thoughts are negatively biased.

In fact, the average person has about 50,000 words of self-talk per day. Seventy percent of that is 35,000 words, which is a reasonably short book, about four hours of reading time… and it’s a daily book about you – an autobiography written daily about all the negative things you do, say, experience, worry about doing, saying, or experiencing.

Really?

Does that seem healthy?

Does that seem like balance?

I think I will risk appearing less intelligent by being a more vocal optimist moving forward, for my own mental health, and for the sake of those around me. Because there is enough negativity going on inside our heads that we don’t need to add more to it by sharing it with one another.

Instead we need to drown it out with positive messages.

Sharing & Social Media

Recently we’ve learned the scary truth about fake-news factories churning out lies disguised as legitimate journalism. And these fabrications —generally negative and sensational in nature— are 70% more likely to be shared on Twitter, and travel six times faster than fact-based stories, according to a

I will not try any longer for ‘balance’ between negative and positive news. I am done sharing negative news. I don’t need to share it; you are already surrounded by people who will share it.

Instead I will share things that I find to be true, positive, and useful.

And on occasion I will also share things that I find to be little more than smile inducing. Because a smile is undeniably true, it is unquestionably positive, and it’s always useful because smiles open hearts, minds, doors, and dialogues.

Thank you

find me positively on instagram @dustanwoodhouse

May 5, 2018

Bricks & Mortar

In this business each file you complete is another brick in your wall.

The first walls (years) form the foundation that you are building your business success on. With a strong foundation, it’s up to you how many levels you build upon it.

What strengthens a wall? Many things, but a key is the mortar in between the bricks.

The mortar represents the dozens, hundreds maybe, of conversations that went into each brick in the wall. It is the interactions with the client, the referral partner, the Realtor, the underwriter, the lender BDM, the office manager, the coworkers… basically anyone and everyone who helped you nudge that file across the finish line – turning it into a brick in your wall.

A key ingredient in that mortar is also all of the files that failed to fund… how you handled the people involved, what lessons you learned, and what you applied to future files. That experience of failure – not just your own experience of it, but the observation of others watching you deal with it (or worse, others dealing with the fallout from your failure) – all plays into how strong that mortar is.

As we progress in our careers, and in life, we realize that as important as each brick is, it’s those critical experiences in between the wins that matter the most to our future. The healthier and more evenly balanced that mortar in between the bricks, the longer lasting our foundation.

It’s the mortar that holds you together as well.

So, whether this week was bricks or mostly mortar, make sure it is all quality all the time and you’ll have an amazing structure!

April 28, 2018

My New Friend Roy

I’ve a new friend, his name is Roy. I have a photo of Roy and I together both smiling like old friends just a few minutes after meeting, although Roy and I were not smiling at one another a few minutes earlier – it could have been a much unhappier moment at the point the picture was taken.

We went another way though.

We chose to smile.

Initially there was no smiling, Roy was feeling awful, and me? Well, my behaviour was awful. My initial response to Roy’s news was ‘What the F&*# am I supposed to do with that!!!’

But then we turned the moment around, although as it turns out neither Roy nor I would be smiling two hours later, but we’ll get to that part.

What was Roy’s news?

Roy is a valet in Yaletown, and I popped downtown to attend Irene Strong’s super cool book launch at ‘The Space’ Art Gallery.

Amazing event!

And quite the turn of events…

I strolled out ~10pm, having enjoyed the people and the event immensely. Roy, on the other hand, was not smiling at all and clearly had had a far more stressful two hours than I.

Roy had parked my car two hours earlier, jumped into to the next client’s car and returned to the curb to deliver it to the departing patron, and then as said patron drove away Roy felt an awful sinking feeling – like 1,000 pounds of lead in his stomach. Roy realized that my key, (the only current key in existence for the car, just to make it fun), had slipped from his pants pocket into the returned car and that the client had driven off without even realizing it. Roy managed to weave the word ‘sorry’ into this explanation about 93 times.

Roy had then spent the next two hours wondering if I would return in the form of a drunken psychopath, plotting sociopath, or maybe an MMA fighter banned-for-life over ‘rage issues’.

My initial reaction had not set exactly Roy’s mind at ease.

So there I was, on the cusp; I could either slide into a blustering ignorant rage, or instead take a deep breath and work it out calmly and nicely.

I’d blown the ‘be nice’ thing with my opening remark. So I exhaled gently, for a while, and withdrew my rude comment and apologized to him – not 93 times – but enough to calm his nerves. I let Roy know that, shocking as it may seem, I too had made some disastrous mistakes in my time. And this mistake, well it’s only a key, albeit a pricey one (which is why I had not got round to buying a spare), and maybe a 75 buck cab ride. It’s cool. But first let’s call a tow truck, because I need to be in my office at 5am and my only fob is in that car.

Roy: ‘Yes sir, thank you so much, no problem, we will pay for the key, cab, and unlock’.

This waiting for an unlock was not to be my best decision of the night, or perhaps it was the very best…

The tow company said they’d be an hour, but would call when they arrived on scene. I told Roy to take it easy, I would wander back over the gallery and see if I could help clean up and hang out there for a bit. All good. For good measure I gave Roy the single brokering business card I had left, so that he could call me when the tow truck arrived.

As it happened I arrived just in time to say goodbye to Irene and her husband Mark, receive the gift of a lovely bottle of wine for my wife, and get a quick tour by one of the owners of the gallery, one William D. Higginson.

The short tour evolved into a 90-minute conversation with this brilliant gent who clearly will be, if not already, an icon of the Vancouver art scene.

Bill, someone I may not have met otherwise, and I delved deep into our ideas around peak performance, running a business, marketing, inspiration, having your own personal ‘board of directors’, art, tech, my new shoes, his intense process to create a painting and how it’s essentially a month of thinking, building the back story, 3D model building, all before the brush hits the canvas, and also – islands in Belize.

It was a stellar conversation, one that completely cancelled out the price of admission (which so far is looking like ~five hundred bucks). That’s how 90 minutes came to pass in a flash. William is a quality human, also heavy on irony – my kinda guy.

Part of me wondered why there’d been no update from Roy at this point mind you, so I called up the tow company directly, ‘yeah, yeah, we’re pretty busy – we’ll get there’. To be safe, I repeated the make and model and asked if they were sure they could break into it… ‘For sure man, relax and we’ll get there and get it done’.

Thirty minutes later the driver arrives and within 60 seconds says: ‘Sorry sir, no way I can get in other than by breaking a window’

And that’s awesome. (still smiling though)

Did I mention I’m running on Toronto time, as I do during the week leading up to a trip there? This marked hour 19 of my day, and I was still an hour from home. But there a bigger problems in the world, like Roy’s new issue.

‘Hey Mark (the other valet), where is Roy at?’ ‘I want to let him know it’s all cool and to not be stressing about this.’

Mark: ‘Ummm yeah, our boss came by an hour ago and fired Roy.’

Me: ‘Mark, can you give me your boss’s contact data?’

During my cab ride home I call up Roy’s boss, Ed. Ed and I have a chat. I tell Ed that the mistake, the key, the costs don’t really matter. My only concern is the (hasty?) decision made on a street corner at 11.30pm to fire an employee of four years with two kids at home. This seems perhaps not the best move to make at that hour, assuming Roy has been solid for the previous four years. So rather than cover the cab, key and possible tow, perhaps he could reconsider Roy’s employment status. That’s what I would really like to see happen.

Ed says he will sleep on it.

Roy, not sleeping at all.

Roy sends me a lengthy text offering to cover all costs personally, and also not to worry about his losing the job because he has two other jobs already so it’s fine.

Yes, this was his third job!

Also Roy is certain we were meant to meet because he looked at my business card and realized that his mortgage is up for renewal and he wants to refinance and purchase a second property. And since I was so nice to him he wants to work directly with me, not his bank.

That came at me out of left field.

Meanwhile the cab driver transporting me home has heard this entire story play out as I’ve been on the phone with Ed most of the drive, and I’d also shared Roy’s comments with him. Jag, my cab driver, thought it was quite the story because jag also works three jobs. Then Jag says to me ‘so you’re a mortgage broker…’

And yes, about fifteen minutes later I found myself with the Jag’s contact data and he and I had mapped out a plan to help him and his partners with a land refinance and development of a property that the credit union had just declined to proceed with the day before.

Moral of the story: apologize fast if you act like a jerk, breathe, let things go, be nice, and meet interesting people along the way.

As for Roy’s re-instatement, as it turns out it was a mutually acceptable change. Roy had been there one night a week for four years, Roy was, upon a days reflection, OK with getting his Saturday nights back.

Perhaps R.J.Palacio said it best; “If you have a choice to be right or a choice to be respectful, choose respectful”

Thanks for reading.

footnote***I swapped out the pic of Roy & I, because Roy has become a client and I’m not comfortable leaving it out there. My little voice says pull it – so instead you get an image of one of Williams pieces of work – it’s more interesting than my face is anyways.

April 13, 2018

The Groove In Your Brain

There are many grooves worn into my brain, yours too; the repetition of mundane tasks creates low-level grooves with low impact on our day-to-day well-being. However there are others types of grooves worn so deep that when trying to think or behave logically we either trip over them or worse, we fall right into them, derailing whatever task or thought we were trying to complete.

There are the positive grooves, and there are the negative grooves? And there are simple steps you can take to change your groove(s).

When we repeatedly tell the same stories, we forge a neural pathway in our brain that causes us to feel a certain way about the people in our stories, the nature of the events, or the general topic at hand. These stories can warp our view of the world and the people around us for better or worse.

Conversely, if we can let go of the negative experiences we encounter throughout the course of our day, and embrace a bit of sunny optimism, then we just might have a positive impact on our productivity and that of others around us.

Case in point: a few months ago, I woke up at 4:45am – an hour and 15 minutes earlier than my standard wakeup time – to ensure I was in the office and prepared for someone’s important call … only to receive email just minutes before the scheduled time cancelling. They were sorry, but they’d completely forgotten about the call.

My first reaction was kneejerk, it was complete annoyance. I wanted to send an email to the person explaining the lengths I’d gone to in order to accommodate their phone call. Y’know, tell them all about my first-world problems. But why? Who would I be doing that for? While it’s okay to feel annoyed, it’s important to quickly get past the negativity. The reality is that I truly do not know what else is going on in that person’s life and I ought to give them the benefit of the doubt, at least once anyways.

But here is the real question: Why am I retelling this story?

Within a few minutes of the initial reaction I calmed down, sent an email saying something along the lines of ‘no problem, I can fill this hour easily. Have a great day’ and I let it go and moved on. No hour, or day, spent ruminating, no time lost in a negative space, and no opinions formed about people.

As soon as the call was cancelled I instantly deleted it from my calendar, replacing that time-block with a new task and got busy making quality use of my ‘extra’ time.

I also didn’t bother sharing the story with anyone else. I didn’t mention it to anyone who arrived in the office to find me there early, nor did I talk about it with my family when I returned home and they asked about my day.

I chose to ignore all of the standard chances to complain about the call not happening as scheduled in order to purge the memory from my brain.

At this point I’ve forgotten the specific person’s name. I could run into them tomorrow and not even recall it was them linked to the event. Therefor I harbor zero negative feelings about the person or the event. In fact I’d not have remembered this story at all, except for a moment a few weeks later in a Starbucks parking lot.

The morning light, the sour taste of the Starbucks new and ‘improved’ matcha tea (a taste so bad it effectively broke a $200.00 per month habit within about three weeks), combined for a moment a recollection of that missed call – but still not the specific person.

After realizing that I had no negative feelings about this experience, I decided I’d try to get something else positive out of it by sharing this story with you. Perhaps the next time you have a negative experiences or emotion these steps will work for you:

Step 1: Immediately forgive… sincerely. (You have no idea what is really going on in their life)

Step 2: Immediately reschedule a task that you know needs to be addressed. (You know you have a long to-do list.)

Step 3: Maximize your newfound time no matter where you are or how much time it is by being as productive as possible. Focus on getting positive things done. Don’t waste your time by wasting someone else’s time by calling them to complain.

Step 4: Don’t tell the story to anyone. Ever. Forget it and move on.

Telling the story won’t make you feel better. In fact, it stands to make you feel worse; it will be like reliving the experience over and over again. That, in turn, will decrease your productivity. Move forward into new positive stories and create a future of action. There is little to be gained dwelling on the past.

Again, it’s crucial to step outside your own world for a moment in order to realize that virtually everyone around you is personally going through some sort of mid- to high-level trauma or has a friend or family member directly connected to them going through some sort of mid- to high level trauma – people are all under pressure, not just you.

Fight the urge to complain. Fight it by doing. Doing what you can to make other people’s lives easier and thus your own life that much more wonderful and productive.

Thank you!

February 3, 2018

Material for you to use…

Below is a recent post from my client facing blog.

As a Broker with 90% of their clients in variable rate product, or two year fixed product, the #1 way to keep your phone from exploding, and clients themselves from exploding, is via regular updates on what, when, and why the Bank of Canada is doing what they are doing.

Most importantly, these updates provide reminders as to why clients made the decision that they made at the time of closing.

Words to live by: ‘I advise, clients instruct.’

It’s easy in the face of a 0.25% increase in rates to lose all perspective… No, wait, how can that be? We are talking 0.25%!

Nonetheless for some clients a 0.25% increase might as well be 25% until actual math is done, as per below.

Proactive steps like this one below keep heart rates low, and incoming phone calls to single digits, despite my having more than 1,000 clients in variable-rate product.

So I offer you the material below to use as a basis for an email from you to your own clients.

Please don’t copy and paste it to your own blog – Google does not like it when identical material pops up on your site a few weeks after it’s on another site

Please do craft the words into your own and forward them on to your database.

Hopefully this helps calm a few of your own clients.

Are you in a Variable Rate Mortgage? Me too.

Are You in a Variable-Rate Mortgage? Me Too.

If you’re in a fixed-rate mortgage, this news has no impact on you. Mind you, ‘impact’ is too strong a word for the subtle shift that occurred Jan 17, 2018.

Short Version

The math is as follows:

A payment increase of ~$13.10 per $100,000.00 of variable-rate mortgage balance (unless you are with TD or a specific credit union, in which case payments are fixed and change only at your specific request)

For example, a variable-rate mortgage with a balance of $400,000.00 will see a payment increase of ~$54.40 per month

Personally, we are staying variable, for a variety of reasons…

Long Version

Qualification for variable-rate mortgages has been at 4.64% or higher for some time. This requires a household income of greater than $70,000.00 for said $400,000.00 mortgage.

Can 99% of such households handle a payment increase of $54.40 per month? Yes.

Will 99% of households be frustrated with this added expense? Yes.

Ability and annoyance are not the same thing.

Have these households enjoyed monthly payments up to $216.80 lower than those that chose a fixed-rate mortgage originally? Yes.

Are 99% still saving money over having locked into a long-term fixed from day one? Yes.

Should I lock in?

A more important question is ‘Why did we choose variable to start with?’ And this may lead to a critical question, ‘Is there any chance I will break my mortgage before renewal?’

The penalty to prepay a variable mortgage is ~0.50% of the mortgage balance.

The penalty to prepay a 5-year fixed mortgage can increase by ~900% to ~4.5% of the mortgage balance. A massive increase in risk.

There are many considerations before locking in, many of which your lender is unlikely to discuss with you. It’s to the lender’s advantage to have you locked into a fixed rate; rarely is it to your own benefit.

At the moment decisions are being made primarily out of fear. Fear of $13.10 per month per $100,000.00

What about locking into a shorter term?

Not a bad idea, although this depends on two things:

Which lender you are with, as policies vary.

How many years into the mortgage term you are.

If your net rate is now 2.95% and you have the option of a 2-year or 3-year fixed ~3.00% – this may be a better move than full 5-year commitment.

Do not forget the difference in prepayment penalties. This is significant.

Bottom line: Know your numbers, know your product, stay cool, and ask your Broker.

These are small and manageable increases.

P.S.

It was a bit disappointing to see logic and fairness fail to enter the picture after the last two Federal cuts to Prime in 2015 of 0.25% each. The public received cuts of only 0.15% each time.

Every single lender moved in unison; not one dropped the full 0.25%.

Amazingly, not a single lender saw fit to increase rates by the exact same 0.15% on the way back up. Every lender has instead increased by 0.25% – a full 100% of the increase passed on to you, the borrower.

Not cool man, not cool at all.

We share all the pain of increases, and get only part of the pleasure of decreases.

I am disappointed by this. Not surprised, but disappointed.

Have an excellent day!

Dustan

December 30, 2017

Goals Defined

Week#52…

… A week that finds many of us reviewing goals set 52 weeks ago, and setting new ones for the 52 weeks that lie ahead.

For some it’s a first glance at a dusty goals sheet, or worse, a thought exercise, as the goals never made it to paper. If this is you, then you may not have achieved or be able to recall your original goals.

It’s a fact that regular review of written goals, and a regular re-writing of said goals, exponentially increases the odds of success. And sharing our goals with others, regularly, also stacks the odds in our favour.

What is success?

For (too) many in this industry ‘success’ seems defined by a specific number: funded mortgage volume.

Indeed a question put to me repeatedly this time of year is ‘What’s your target?’

In my mind I answer ‘happiness‘, ‘balance‘, ‘the love of a new kitten‘, but I dare not utter aloud such fluff.

No. No. No. It must be a number, a great-big-honking-mega-super-number, and it needs to be more Big, more Hairy, and more Audacious than whatever was accomplished last year. Because Growth, BHAG’s, and numbers, numbers, numbers, are what it is all about!

’Tis the season and all that…

And so Mortgage Brokers across the land feel this (self-inflicted) pressure to have a specific ‘mortgage volume’ goal written on a piece of paper.

Well, here’s a secret I’ve never shared: I have never started my year off with a mortgage volume goal. Not once.

(Two partial exceptions:

2009 began with a very specific income goal, which I wrote down, dissected, and achieved inside nine months.
2014 was another year of no specific mortgage volume goal, but by September it was clear that things were rocking and in fact $100,000,000.00 was potentially a real year-end result. I stayed focused and made it happen, more because I like round numbers than anything. Ending at 98.7M would have driven a part of me around the bend.)

It’s true; during goal-setting week, I do not write down a specific volume target.

This seems to surprise people, but it’s just never been the focus of my energy.

In years gone past I’ve not admitted this, out of concern for sounding trite, arrogant, stupid, or a mix of all three. I either glossed over it when asked, or replied with, ‘A bigger number than last year‘ or some other hollow sentiment. No more weak sentiment. Here’s a direct answer…

All goals boil down to systems and process.

Jump back to exception #2 above. The year was 2009 and I had a specific income goal. How did I achieve and exceed it? It had everything to do with deconstructing the number down to its tiniest parts. It meant creating a stack of smaller goals, the only type I ever set — small and thus achievable. Then it was a matter of obsessing over them daily, as a bird does its eggs. I mean obsessing. I would write out concepts and ideas nightly, and develop and refine the technical aspects daily.

With better systems and more refined processes, bigger goals (e.g., income) take care of themselves.

In a nutshell:

2009 target income: $160,000
Average commission: $2,000.00 net.
Quantity of files required: 80 (6.66 per month — whoops, maybe go with 84 as an annual target as this equals 7 per month)
Map out weak/strong months (i.e., Feb 4 files vs. June 12 files)
20 calls made generated 4 leads, which meant 2 applications completed, which meant 1 file funded.
February was weak, because few calls were made in December.
It’s already January, whatever I do today will not pay off until March/April. Will I starve before then?

I better make 20 calls per day and catch up fast.

Each bullet point above spins off a list of another 5 -15 bullet points for thought and action.

There is no single magic bullet. There is no ‘one big thing’.

There is only the dozens, perhaps the hundreds, of small nuances around how we approach each action in each minute of each and every day. Collectively the small pieces add up to one big by-product; 100M+ in volume.

In 2018 I will strive to do a better job sharing these nuances, as that is my focus – building better Brokers.

But what about mortgage volume?

For better or worse, your mortgage volume each and every year is either an intentional, or an accidental, by-product of your systems and process.

Goals matter, writing them down matters, sharing them matters, but more than these basic steps it is how small you then break down each goal. It is detail that matters. What you want to do is huge, and anything huge is done one very small step at a time.

A giant goal achieved is not the result of one big success, it’s thousands upon thousands of small successes stacked on top of one other. Layered, interlocking, creating a foundation for continued growth.

Writing down ideas about efficiency and process improvement, then implementing the ideas and executing at the highest levels, this is what truly matters.

Not the number.

Focus on taking excellent care of the small actions, and the bigger number will take care of itself.

In essence simply be a little bit better version of yourself each day.

That specific goal (a better you) unlocks every other goal you may have.

Happy New Year!

December 12, 2017

Some Ink On Being Inc.

Heading into tax season there is a common question on many a Mortgage Broker’s (and agent’s) mind:

To be (inc.) or not to be (inc.)?

2017 was the year that the federal government basically laid the smackdown on everyone who has ever suggested being INC. ‘isn’t worth the hassle’. When the Fed tinkers, and tens of thousands of intelligent INC individuals stand up and fight, clearly there must be ‘advantages’… that many Brokers are needlessly missing out on.

‘Advantages’ is in quotes for good reason. While the factually informed may view the benefits of incorporation as too great, the literally informed – the actual individuals out there running their own business through the high highs, the low lows, the bright times, and the darkest of dark times – know better. Those of us with no EI safety net, no pension plans, no maternity leave, etc. – you and I – we know better.

Whether you are, or (sadly) are not incorporated, the conversations about tweaking, or massively changing your corporate structure are pretty much on hold right now. Our accountants are waiting more clearly defined guidelines as to exactly what is changing and what is not.

Yet while we wait to see how things shake out, there is no doubt that many of the benefits of having an INC structure will still be intact, and they certainly are for the 2017 tax year. Come 2018 things may look a little different. There may be some small wins and some small losses, but the win column will still be longer for 99% of those who are INC.

This post is not meant to provide guidance on your own structure but to give you a list of conversation starters with your current accountant – or perhaps a prospective new one depending on the sort of answers yours has offered in years past. You may have to work your way through a few to find one who who truly provides detailed answers to the question of getting yourself incorporated, instead of breezy blow-offs, such as ‘when you make 200K per year’ or ‘when you aren’t spending all the money you make’.

Such responses are a clear indicator of a lazy mind. And you need to fire that person.

Like the Mortgage Broker’s role, an accountant’s role is to be your trusted advisor, an expert. It is their job to offer us alternative approaches. It is their job to be creative! You know – exactly the way we operate in our own profession: professionally and in constant search of superior options for our clients.

Do you realize the role your accountant can and should be playing in your life?

A quality accountant is so much more than simply a conduit to CRA. A quality accountant is a cornerstone in the foundation of your financial future.

Your accountant plays a significant role in your wealth-planning strategy – specifically just how much of your wealth is siphoned off to the government – and they hold control over just how many extra years of your life you will have to work, or not have to work, depending upon their wisdom and your own.

Does your accountant realize the role they are playing in your life?

Does your accountant completely understand your investment and retirement goals?

Is your accountant meeting with you and your financial planner to ensure that your corporate structure and investment holdings structure aligns with those goals?

Do you actually know what your own goals are?

Is the conversation around incorporation short and cursory? Or is it far reaching? Are they asking if you have teens who could be working in your company for special events? Are they asking if you have adult children in school not currently earning, and explaining the power of a family trust? Are they asking if you have other adults in your family that do not have significant income and could benefit from compensation through a family trust?

Has the suggestion of a holding company for investment purposes ever arisen?

Have you walked through the differences in taxation on your specific income when using dividend tax rates vs. sole proprietor tax rates?

To the above question I am certain the answer is ‘no’ in 90% or more of cases. Seriously, have you taken last year’s tax return, and asked for the specific tax differences had you been INC and drawn dividends, and potentially split some income with family members?

In one recent case the client’s net commission income was $70,000 and the savings lost by failing to INC in 2016 amounted to $6,500.00. That is a massive difference at that income level; $6,500.00 is a big deal at any income level.

Have you calculated what you are paying in CPP against what you may or may not recover?

***I have done the math, and CPP is not at all a winning investment, and once again the beauty of being INC is that you can in fact effectively opt out of CPP and instead invest in an actual asset that you can pass on to a surviving partner, children, charity, etc.

Have you looked at the power of whole life insurance policies held inside a corporation as an investment vehicle?

Have you considered the limited liability factor depending on the nature of what you do for a living?

Have you considered the significant psychological benefit derived from operating your business like a real business, drawing a consistent wage and leaving the extra earnings behind for a rainy day, or moving those earnings into what I like to call your ‘grown up piggy bank’ – your new holding company’s bank account?

Have you considered the recent steps the federal government took against corporate structures are a clear signal that perhaps you should have been incorporated long ago?

If you feel like you need to convince your accountant that you should be incorporated, it’s more likely you need to find another accountant. In particular, if you have been earning in excess of $100,000 per year, have a spouse earning less than $30,000 and/or have children 18 or older also earning less than $30,000 – you really should have pressed the issue – time to start pressing.

Ask questions, lots of them.

Get specific detailed answers to each and every one of them.

Thanks

Dustan Woodhouse

October 20, 2017

People Under Pressure Produce…

Each of us ultimately is just a pile of carbon.

In grade 8 science class Mr. Lenton taught us that all living things are carbon based. He did so with a very memorable (albeit disturbing) story involving his neighbour’s annoying cat and a ‘stakeout’ with his pellet gun, ending with disposal of the remains at what was at the time the site of some large smouldering brush fires near his home as trees were being cleared for the construction of a new mall. As was done in 1984.

Living things = Carbon

People = Carbon

Most of us have heard that diamonds are formed from carbon placed under massive pressure. And some have heard the analogy that people put under pressure will themselves become diamonds. A better version of themselves at least, as the great among us perform at peak levels under pressure.

Diamonds = Carbon

I would agree that this mindset is reasonable, mostly. I myself find that I make the biggest mistakes when I have little to do, whereas my skills seem to increase with a heavier workload and a more immediate deadline. Yes, you and I, we have our skills, and when the heat is on we rise to the occasion and deliver the goods. That’s us doing what we do every single day. That’s us immersed in the familiar.

But let’s talk about our clients.

It’s a different scenario for our clients. They are feeling moderate to extreme pressure before they even meet us. And depending on the circumstances, that pressure has been building for weeks, months, or even years.

Their financing is often part of:

· Starting a relationship (just engaged/just married)

· Starting a family (just pregnant…with twins)

· Starting a business

· Saving a business

· Saving a relationship (downsizing or moving)

· Ending a relationship

The list goes on (with several other stressful things).

In other words, our clients arrive at our doorsteps Pre-Stressed, and they arrive unsure about the process, unsure about us, unsure about all the different decisions they have to make in a very compressed period of time.

Our clients promptly find themselves immersed (drowning) in a world of the unfamiliar. Unfamiliar terms, unfamiliar pace, unfamiliar expenses, and unfamiliar ‘logic’.

So, while we may be tempted to view our clients as being no different from us — just a future pile of carbon dust — the reality is that there may be another powder mixed in with that carbon, you likely have some of it in your own composition.

Gunpowder.

It’s pretty hard to tell the difference between the two at a glance, and it is impossible to know the specific ratio of carbon to gunpowder that composes the person sitting across from you.

But apply too much pressure to them, and you’ll find out. As it may be an explosive reaction.

All clients should be handled with care.

Every part of our process should be geared towards releasing pressure, not increasing it. Wherever and whenever possible absorb the pressure for your clients.

Each incremental ask you make is another gentle addition of more pressure. We all have a breaking point. Be sensitive to this, and tread lightly.

Our role is to absorb as much of the pressure as possible. It is not to communicate every worst case scenario, it is certainly not to threaten imminent doom, it is to find solutions. Ideally solutions to problems that our clients will never even know existed.

How can you take pressure off your clients?

What additional steps can you be taking on your own?

Don’t react. Don’t deflect. Absorb, think, ask questions, plan, think some more, and that act smoothly.

Onward.

September 10, 2017

What about this recent Bank of Canada interest rate increase?

I posted the following on my client facing blog earlier this morning, and really it is a few days late. I purposely kept this post short and sweet, as I tend to get better feedback on short and sweet.

Feel free to take this post and adjust the language to suit your own style.

You may wish to insert a ‘call to action’ for client to set a time to speak with you about what suits them the best.

Adjust the content, send it out. Just don’t copy and paste as google does not like that. You want clients to hear your voice in your communications.

I could go on about the value of building a mailing list one day at a time through your career, set up with mailchimp.com for instance, and the value in being able to put an email blast out ahead of 43 phone calls asking you about the recent rate increase, but you are ahead of that curve. You are already on it.

If not, here is some raw material for content, get building.

What about this recent Bank of Canada interest rate increase?

Short Version

I am not locking in myself
I am staying variable
For a variety of reasons

Long Version

If your discount from Prime (now 3.20%) is 0.50% or deeper – then the variable rate product remains a really great place to be.

If your discount from Prime is 0.25% or less, then depending on which lender you are with you may consider converting to a fixed rate, BUT…

Keep in mind the penalty to prepay (i.e. refinance or sale of property) a variable early is ~0.50% of the mortgage balance, whereas if in a (4yr/5yr or longer) fixed rate mortgage the penalty can be closer to 4.5% of the mortgage balance ***depending upon which specific lender you are with and how long of a term you lock in for.

If your Variable rate mortgage is with TD or WSCU your payments have not increased, as their variable rate product offers a static payment. (You can opt to increase it of you like) So with these two lenders you could be inflicting a significant payment increase on yourself to lock in, as much as $52.00 per month per $100,000 outstanding.

There are many considerations before jumping to lock in, many questions to ask, most of which the lenders are unlikely to ask you. Your lender is re-active, not pro-active – you need to be pro-active. And sometimes being pro-active results in no action being taken at all.

It is usually to the lenders greater benefit that you lock into a fixed rate, rarely is it to your own benefit.

At the moment many decisions are being made from a biased frame of mind; i.e. because we have had two recent rate increases this must mean still more rate hikes are on the way.

Not necessarily.

The government may well have overstepped with this recent rate hike and there may be a pullback within the next 6 to 12 months.

Back in 2010 rates increased 0.25% three times, and that sat stagnant for nearly five full years before two 0.25% decreases back downward.

In other words the last time Prime was pushed as high as it stands today, it sat there for five full years. And was then cut.

Something to think about.

The next Bank of Canada meeting is October 25, 2017.

I will be watching and waiting.

Primarily waiting.

August 13, 2017

The High Road

The Canadian Mortgage Brokers Association asked for a few words on Brokering, I was lucky enough to have the piece selected for the 2017 Summer edition of Canadian Mortgage Broker.

An Excerpt:

Always Take the High Road!

As with many things in life, this old adage is often easier to pay lip service to than to pay your dues to. In the early days of traveling this path, the high road can often feel like a very expensive toll road. However these are not only words to Broker by, they are words to live by.

You can read the entire piece in the CMBA online magazine here, the article begins on Page 38.

The goal as always is:

Win the trust, win the client.

It is no coincidence that top performers routinely bump into each other along the high road.

Thank You

If you are interested in attending an upcoming Mortgage Agents of Change event check back here for upcoming dates and locations.

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