We all want to be happy, healthy and comfortable

Richard playing golf

We all want to be happy, healthy and have creature comfort. How do we obtain them? It is a journey. You have to start with your thoughts and then allow time to elapse.

Whenever we want something, we want it now. We were like that when we were children and there is an inner child in everyone of us. Instead, try to keep a steady thought of what you want and allow some time to pass. You will be surprised at what will happen. If the result is not what you have wanted, it is because you have let your thoughts to wander. If you can tame the train of thoughts, keep them on the track, you can surely obtain what you want.

It is simple to say, yet very difficult to do. First step is to observe your thoughts daily and correct their course whenever they go off the track.

Individual responsibility must be absolute

old building in Guangzhou

Today I would like to quote James Allen in “As a Man Thinketh”:

“In a justly ordered universe, where loss of equipoise would mean total destruction, individual responsibility must be absolute. A man's weakness and strength, purity and impurity, are his own and not another man's. They are brought about by himself and not by another; and they can only be altered by himself, never by another. His condition is also his own, and not another man's……..

It has been usual for men to think and to say, "Many men are slaves because one is an oppressor; let us hate the oppressor!" But there is amongst an increasing few a tendency to reverse this judgment and to say, "One man is an oppressor because many are slaves; let us despise the slaves."

The truth is that oppressor and slaves are cooperators in ignorance, and, while seeming to afflict each other, are in reality, afflicting themselves.”

Beware of politicians that are extremely popular. All left wing dictators were extremely popular (Mao, Stalin. Castro just to name a few) at some point of their political career.

How an investment formula worked

In the down market of real estate, all the articles out there are about how you can get caught investing in real estate. Thinking back on what we did; we used a formula that had worked for us. Of course, you can no longer find any properties that fit this formula any more in Montreal, but maybe in some other cities in North America.

We were only looking at rental market. Our goal was to make 5 – 10% a year from the down payment of a mortgage and let the rent taking care of mortgage and other expenses. Therefore, even if the property did not appreciate over time (which is very unlikely, property will appreciate over a span of 25 years, at least to the amount to offset inflation), one still makes money owning it.

Between 1998 to 2002, you could find quite a few triplexes (3 x 3 bedroom apartments) in the not so hot neighborhood in Montreal for about $160,000 (this number is picked just for easy calculation). 25% down payment comes to $40,000. Monthly payment of a mortgage at 6.5% for $120,000 for 25 years is $804 (yearly at $9,648). Cost of property tax, insurance, maintenance (minimum amount) is about $6,000 yearly. Let’s say rent is about $600 per month at the time of purchase (now is more or less between $850 and $1,200), which gives you $21,600 a year rental income. All said and done, you can make 15% for your $40,000 down payment with this property.

$5,952 = $21,600 (rent) – $9648 (mortgage) - $6,000 (expenses)

Now if you worked very hard and spent very little and saved an additional $105,783 (which is the balance of what you owe after 5 years) when mortgage was due in 5 years and you paid off this property 100%. Rent by then had increased to $800 a month and you moved into one of the apartment. You would then be able to live rent free with an income of $13,200 ($800x2x12 - $6,000) yearly. If you live in a city like Montreal without a car, you embrace simple life style, and you do not have to pay rent, surely $13,200 is enough to get you essentials to live on.

If you pay rent to yourself, with an investment of $160,000, you are making 14% a year (14% = ($800*3*12-$6000)/$160,000).

All you had to do was 10 years of hard working and saving. In my own case, I did 7 years of working and saving.

Of course, if you sold your property between 2006 and 2007, you would have made $190,000 before tax and expenses, as by then triplexes like that sold for about $350,000.

People can call this speculative. It just happened that we and some of our friends have lived through this period and experienced the benefit of it. So if you pay attention, you can always find mis-priced things. It may not be in properties, it could be stocks. I personally believe there are a quite a few mis-priced stocks around in today’s market. I have yet to find a way to screen out all the noises and find value.

Beauty is not skin deep

About 3 years ago, I saw a British Chinese woman on television in China. She is probably over 60 years old. She looked so calm, healthy and content. I said to my husband that I would like to look like that when I am at that age. I realize that the only way to achieve this is by cultivating my thoughts. Beauty may be skin deep when you are under 20. Beauty in old age is definitely a reflection of your inner thought. You are what you think, that includes how you look as well.

Just remember that the Universe is benevolent and it will help you to achieve whatever you can think of.

I thought I have figured out a way to make money

Last year we renewed our mortgage. We took the option of “open variable”, which means you can lock it in anytime the mortgage is going up. It started with 3.75% and it is now at 2%. We have a friend whose open variable mortgage is only at 1.6%. He has a savings account that pays him 2.5% a year. Just imagine you can make money by borrowing the money from the bank and then put it back into the savings account in the same bank. Unfortunately, to make about $50,000 a year you will need a mortgage of 5.5 million dollars. Banks are just not willing to lend this kind of money to guys like you and me, any more. Oh, well.

The Daily Reminder

I have completed the 40 day daily reminder. Here it is:

1. I am grateful for all the blessings the supreme bestows upon me. I am glad to be here now.

2. I am a giving person. I give affection, love, approval, acceptance and understanding to others.

3. The world is safe and full of love. I am loved by all those that are close to me, expressed in many different ways.

4. I am relaxed and feel safe. No person, place or thing can hurt me.

5. I am eliminating the need to forgive.

Forgiveness is like surgery. It cuts out, eradicates, cancels and makes the wrong as if it had never been there. There must be condemnation before forgiveness is necessary. I do not condemn others, therefore, it is not necessary for me to forgive.

6. I have no remorse, or regrets over my own past mistakes. The past is simply written off, closed and forgotten.

7. I am in need of nothing but the awareness that all I need is within me.

8. My responsibility is to set up goals for myself. How I reach them is not my responsibility. It is the responsibility of my built-in inner success mechanism.

9. I am not afraid to “turn the other cheek”, remain vulnerable and go on living creatively.

10. I remain focused on the now. Look lovingly upon the present for it holds the only thing that is forever true. The past is gone and future is but imagined.

Repeated action for 20 days makes a habit. Repeating it 40 days reinforces the habit even stronger.

relaxation is the key

For a year now, I have embarked on this mental training thing. I have read “Psycho-Cybernetics, A New Way to Get More Living Out of Life” and “The Science of Getting Rich” a few times. Do I have control over my own mind? Not yet. But at least I feel more relaxed, feel and look healthier.

For those who have not heard of Maxwell Maltz’s Psycho-Cybernetics, I highly recommend it, even though it is an old book (first pocket books were printed in 1969).

The following is a summary I put together for the book:

We all have a self image whether we know it consciously or not and all our actions and behaviors are in consistent with this self image we hold. Therefore, our happiness and success (or lack of) are consistent with this self image. The good news is that this self image can be modified or changed so that we can live a happier and more successful life. Since our mind does not distinguish what is a real experience and what is imagined, we can imagine good and positive things. That is the first key to change self image.

For your mind to accept your imagination, we must be totally relaxed and the imagination must be vivid. Relaxation is a theme that runs through the whole book. It helps to accelerate learning, reduce stress and live healthier. This book shows you how to do relaxation and imagination exercises.

To change your self image, you also must remove old emotional scars. Forgiveness is the way to remove those scars. Forgiveness is very easy to do, because there is nothing for you to do, as there must be condemnation before forgiveness is necessary. We find it difficult to forgive only because we like our sense of condemnation and our sense of feeling sorry for ourselves. True forgiveness comes when we are able to see, and emotionally accept, that we should not have condemned or hated the other person in the first place.

You must also learn to forgive yourself. Recognize your own errors as mistakes, but do not beat yourself down with self-condemnation, remorse and regret. You make mistakes - mistakes do not make you.

The cycle goes on

poppy flower

People debate what started this recession. I do not really know. But we know that all contractions follow over expansions, and vice versa. The cycle goes on. As we have had two decades of great time, this contraction might run a little deeper and longer.

Let's say a group of Joes who worked hard and saved a million dollars in their retirement portfolios. Now they see their portfolios shrink to only half million. So everyone panics and wants to save money now, including those who still have money to spend, which is fine. We are all humans. It is hard to save when everyone is spending and to spend when everyone else is saving. We need to save money sooner or later so why not do it with the flow.

However, with the government pumping all the fresh money into the economy now, eventually (the unknown part is when), the Joes will see their portfolios back to one million on average (some will have more and some less). The money, though, will be worth much less since it has gotten diluted by freshly printed money. However, people will not notice this part right away. They will all be happy to see that their portfolios back to break even or grow somewhat. So, they will start to spend money again, including those who do not really have extra cash to spend. And expansion will start again.

If you have kept the money you have saved in cash, it is great in the contraction period, as the destruction force during contractions would not be able to touch it. We all know that during the contraction, values of all things are going down except cash. But we must worry a little bit about the cash we have saved. Cash is the hardest thing to hold for long. In addition, when expansion starts, the cash needs to be put into things (real estates, stocks etc.) again. During the expansion, values of all things are going up, but cash value can only go down.

As I said before, the unknown part is when, that is why everyone is so obsessed in finding the bottom. It might be too hard to find the bottom. If you pay attention, you might see the beginning of the expansion. It will still be fine to convert your cash into things at the beginning of the expansion.

The worst would be to wait until expansion is almost at end; then convert your cash into things. As at the end of an expansion, things will be the most expensive. Some people, then, have to convert things back into cash during contraction because you really need the cash to live. We see this happen to some of the best people.

Do not believe the general concession, that if you are an average Joe hard at work, you do not need to understand the economy. You do need to understand somewhat in a simplistic way. Just worrying about not losing your job is not enough.

Keep this in mind; you may be able to earn money with the cash you are saving.

Just remember, the universe is benevolent. It is made for you and me to succeed in life.

1 Great Day at a time

Since the title of this blogger is called 1 great day. I shall explain that the title comes from my husband. He always says "one day at a time" and now it is evolved to "one great day at a time".

We live our life one day at a time, so why not one great day at a time.