Farhana Kabir

Becoming a millionaire isn’t all that difficult and there are countless ways to achieve that milestone. Some people do it through real estate, others start their own business, while some simply get lucky by winning the lottery or winning big on a game show. What is even more interesting is that you don’t have to be wealthy to begin with nor do you have to earn six figures to reach this goal.

I know some people who earn well over $100,000 and all they have to show for it is a large mortgage payment and a fancy car that depreciates faster than a glass of milk left outside in the summer sun. Anyone can become a millionaire and there are five things you need to do to have the best shot of making that a reality.
1. Earn Income.

Clearly, the more money you make, the faster you can reach that milestone, but that doesn’t mean your average Joe with a average income can’t obtain millionaire status. The current median income in this country ranges between $35,000-$60,000 depending on where you live. Better yet, get married so you have dual incomes. The wonderful thing about having dual incomes is that even with two people in the household, your income may double, but your expenses typically don’t.

If you don’t earn even an average income, all is not lost. It is up to you to do something about it. A negative attitude about your job or your earning potential won’t change anything. Be proactive and make the decision to improve your situation. It is your life, so take control and realize that things don’t change overnight. It may take a few years of slow growth before you reach the point where you want to be, but you can do it if you try. Remember, short of inheriting money from a relative or winning the lottery, you will need reasonable income to become a millionaire.
2. Live Within Your Means.

Ok, so you have income but now what? It doesn’t matter how much money you make if you spend it all or spend even more than you make. It might be nice to eat out at nice restaurants every night, or to always be on the cutting edge of designer fashion but, this will only make you look like millionaire to others instead of actually being a millionaire. This doesn’t mean you have to live a miserable and miserly lifestyle, but you simply need to live reasonably. The bottom line is buying things and acting like a millionaire if you aren’t will simply empty your bank account and give people a false impression of your status, but that’s it.

Start by purchasing a home that you can comfortably afford and drive vehicles that suit your lifestyle without straining your budget. You don’t have to be pulling down $75,000 a year and drive a 1992 Civic Hatchback or live in a dump, but throwing your money at a 4,000 square foot home in a gated community with luxury cars or SUVs that cost as much as one year of your salary won’t help you become a millionaire. Some may argue that an expensive home and real estate in general is a good way to become a millionaire, but I will touch on that later.
3. Save Money.

This isn’t rocket science but if you earn a reasonable income and you live within your means, guess what, you will probably have money left over to save. But that’s exactly the problem. Most people treat savings as an afterthought, or something that only gets attended to after all the other bills are paid. People pay bills, buy things, and then whatever is leftover they try to save. That is the wrong way to save. I’m sure you’ve heard it before, but pay yourself first. Whether it is $100 a month or $1,000 a month, think of the savings as a bill that needs to be paid and do it regularly. If you are unable to save money you will find that your only wealth is in the form of material things. So, you need to start saving every month and you need to make it happen automatically. An online savings account can accomplish this for you, and on top of that you’ll be earning better interest on that money than you would be at your local bank. Start saving today with a high-yield savings account.
4. Invest Wisely.

Now that you are saving money, you need to invest it wisely. Sticking it under the mattress or slowly building up in a savings account isn’t going to help you reach your goals any faster. You don’t have to read the Wall Street Journal or watch CNBC everyday while actively managing your portfolio in order to be a good investor. Some of the best investment advice is to simply invest regularly and in a diversified portfolio. If you do this you’ll already be doing more than most people and on your way to building wealth.

It is also important to remember that real estate is part of your investment picture, but it shouldn’t be all of it. Too many people stake almost everything they have into a primary residence and expect it to appreciate in value. Just like any investment, generally speaking, over time you will make money. There isn’t much debate about that, but relying heavily on real estate is no different than if you rely on one stock to fund your retirement. So, begin with opening up an investing account and put your money to work. It doesn’t matter if you are investing in stocks, bonds, or index funds, but keeping costs down helps you keep more of your own money. One of the best and cheapest places to start investing is at Zecco. The Free Trading Community: www.zecco.com.

You can become a millionaire by simply buying a single stock and holding onto it for 20 years if it goes up significantly just like you can buy a $500,000 home and have it double in value in 20 years, but that’s a pretty risky proposition. Take a lot of the risk out of the picture by making sure all of your eggs aren’t in the same basket and develop an investment strategy that will provide steady growth over the years..
5. Stick With Your Plan.

Finally, if you have done the previous four items the only thing left to do is to continue doing it and stick to the plan. As far as income is concerned, always be on the lookout for ways to increase your income, whether it is through climbing the ladder at your current job, finding work elsewhere, or maybe even starting a business on the side. Increased income will mean you can save even more, provided you aren’t foolishly spending the additional money. As that additional money gets tucked away into savings or investments it will continue to grow even more quickly.
It Isn’t Hard to Do if You Work at It

Unfortunately, most people are looking for a way to get rich quick or to capitalize on the next big thing. It is true that some people have made their wealth through playing the real estate market, while others have done so by investing in a few stocks that exploded, but this is the exception and not the norm. If the above list seems overly simplistic, that’s good. There are no secrets to becoming a millionaire and almost anyone has the chance to make it happen. The process is simple:

1. Make money
2. Don’t spend all of your money
3. Save some money
4. Invest that money
5. Repeat

Certainly, there are many factors in play that can make this easier or more difficult for different people. This is simply the process that you can use in order to reach that goal, whether it is in 5 years or 50, if you follow a few basic steps you can do it.

By Louise Egan and Ka Yan Ng

OTTAWA/TORONTO (Reuters) – Strong housing starts and a marked improvement in the business outlook revealed on Monday that the Canadian economy is humming along at a healthy pace, adding pressure on the Bank of Canada to raise interest rates. The central bank must weigh evidence of a frothy domestic economy against a bleak global backdrop, including signs of economic stagnation in the United States, the country’s dominant trade partner.

The hiring intentions of businesses were at a record high in the second quarter and the outlook on sales, investment and financing was upbeat, according to the central bank’s second-quarter business outlook survey. The survey results suggest more companies are operating at full capacity but do not fear generating inflationary pressures.

“That is consistent with our expectations that growth in the third quarter will bounce back from its lull in the second quarter,” said Emanuella Enenajor, an economist at CIBC. “And the added indicators of capacity pressures suggest the bank has more justification to begin gently removing monetary stimulus in the coming months,” she wrote in a note to clients.

Housing starts for June surged well past market expectations, monthly data from Canada Mortgage and Housing Corp showed on Monday, adding to two months of upward revisions and raising second-quarter growth expectations. Starts rose 1.7 percent in June from May to a seasonally adjusted annualized rate of 197,400 units. Scotia Capital economists noted starts notched their first quarterly gain in three quarters, up 6.7 percent.

“This should provide a boost to Q2 real GDP, offsetting some of the weakness resulting from Japan’s supply chain constraints,” said Scotia Capital economists Derek Holt, Karen Cordes Woods and Sarah Howcroft in a note to clients.

The Bank of Canada estimates the economy slowed to 2 percent annualized growth but will speed up to 2.7 percent in the third quarter. Those forecasts may change in its quarterly update on July 20.

DECISION TIME

The central bank is widely expected to hold its key interest rate unchanged on July 19. Normally, the strong data would prompt it to give a clearer signal of plans to resume tightening later this year. But the global situation has worsened since the survey was conducted May 24-June 16 — including weak U.S. employment data, rising Chinese inflation and fresh euro zone woes — and the bank may question how sustainable the good news is. Still, analysts generally expect the domestic strength to keep the bank on track for a rate hike at some point before year-end.

“Current business optimism might not be as upbeat as it was 25 days ago, owing to recent U.S., Chinese and European developments,” said Michael Gregory, senior economist at BMO Capital Markets. “But even if business expectations have become moodier, they still started from a position of relative, absolute and surprising strength,” he said.

Yields on overnight index swaps, which trade based on expectations for the central bank’s policy rate, continued to reflect almost zero chance of a rate move on July 19. But rate hike expectations rose following Monday’s data for decision dates in September, October and December. The bank has held its key policy rate steady at 1 percent since last September following three successive hikes to lift it from emergency lows. Most of the businesses surveyed — 80 percent — see inflation staying within the bank’s 1-3 percent target range, but a greater number see the rate in the upper end. A more compelling survey item showed the share of firms reporting some difficulty in meeting an unexpected increase in demand rose to 46 percent, the highest since 2000, although those that expected “significant” difficulty in meeting demand was low at 5 percent.

“The key question is that if these pressures will convince the bank to look beyond an increasingly bleak international outlook to a healthy domestic backdrop,” said David Tulk, an economist at TD Securities. “While this report does not make it easy, it is not sufficiently hawkish, in our view, to warrant a change in focus at this point,” he said.

In a June 29 poll, most of Canada’s primary securities dealers expected the next hike to come in September.

(Editing by Peter Galloway and Rob Wilson)

By farhana kabir

TORONTO (Reuters) – Canada’s booming condominium market, which has filled the skylines of its biggest cities with cranes and prompted a warning from its central bank, may well avoid the type of crash that has hobbled the industry in the past.

While inventories of unsold condominiums are trading well above historically averages, industry executives and analysts say demographics, immigration and limited land in the biggest markets all provide long-term support.

With C$500,000 ($515,464) fixer-upper homes out of reach for many Vancouver and Toronto home buyers, condos also remain their only route to property ownership.

“I get asked with all those cranes in the sky, is there going to be a glut of supply? But if you look at the city planners’ projections for demand versus projects on stream, we still don’t have enough condominium projects underway in our big cities,” said Phil Soper, chief executive of Royal LePage, one of the country’s biggest real estate brokerages.

The condominium boom is part of a broader Canadian housing sector surge that followed the global financial crisis, in sharp contrast to the still struggling U.S. market.

After taking a brief hit, home prices and sales jumped as the Bank of Canada cut borrowing costs to a record low. Canadian banks, which escaped the crisis largely unscathed, were easily able to keep loans flowing.

Data on Monday showed Canadian housing starts for June surged well past market expectations. The multiple-unit dwellings category — mainly condominiums — accounted for the majority of starts in urban areas.

Supply is growing. BMO Capital Markets recently noted inventory of completed but unoccupied multi-dwelling units at 12,672 units in May, around historical highs, compared to 4,757 for single-family homes.

Elevated levels of unsold condos were one factor prompting Bank of Canada Governor Mark Carney to warn last month about “the possibility of an overshoot in the condo market in some major cities.

DEVELOPERS, BANKS LEARN HARD LESSON

But analysts said the building surge reflects changing demographics and evolving cities. In addition to first-time homebuyers, condos have also become popular for retiring baby boomers.

Immigration has also underpinned the rapid build-up. The booming market is concentrated in the heavily populated and pricey cities of Vancouver and Toronto, destinations for many of the more than 200,000 people who move to Canada each year.

Analysts attribute part of the condo boom in Vancouver and Toronto to physical and regulatory land restraints, which have changed the mix of housing to more stacked high-density communities from the traditional single-family home.

“It has shift over the last several years. N Now it’s about 50/50, which some people are concerned about. I can’t say I am,” said Robert Hogue, senior economist at Royal Bank of Canada.

“I just see this as a reflection of where our major cities are at in their own life cycle.”

Recent Royal LePage data actually showed the pace of price gains in standard condominiums paled against detached bungalows and two-story homes.

Banks and condo developers, particularly in Toronto, also appear to have learned hard lessons from the 1980s, when many built with insufficient regard for demand and got slammed as interest rates climbed.

Analysts say very few shovels these days break ground until the developer has sold at least 70 percent of the project and has secured bank financing.

“It’s a very well-disciplined supply-side of the equation,” said George Carras, president of RealNet Canada, which tracks commercial and new home projects.

Carras noted building high density housing is a natural progression for a growing city with limited room to expand outward.

RISING RATES IN QUESTION

Still, many in the industry are wary about the outlook for interest rates. The Bank of Canada tightened three times last year. Forecasters are divided on whether the next rate hike will come this year or next.

Carney himself and many industry executives predict the broader housing sector will cool as demand is eventually dampened by higher borrowing costs and other factors.

But some warn the housing boom of the past few years will not end well — which could hit the high-growth condominium sector particularly hard.

David Madani, Canada economist at Capital Economics, expects a cumulative 25 percent decline in the national average price over the next three years as income and population growth fail to keep pace.

“There’s a really large disconnect between house prices and the fundamentals. We don’t think that this is sustainable,” he said.

($1=$0.97 Canadian)