ratio

If you're feeling called to do something bigger than yourself listen in as Nancy interviews Shannon Carlton author of Manifest Your Vision with Grace, Gratitude, and Growth and entrepreneur.  Shannon also shares why market research is so important BEFORE you launch your business and how to get the feedback you need to have a closing ratio near 100%.  She passionately digs into how you can use vision boards and habits with a weekly agenda to hold yourself accountable to get where it is you want to go.  Don't miss towards the end of the show where Shannon adds, "There are times you're not going to feel like it, and you have to make shifts and pivots."

How Dividend Stocks Work

Whether we're talking about the stock market or we're talking about private corporations, dividends are ways for corporations to distribute profits to the shareholders and unit holders.

If I own a plumbing business that’s profitable, incorporated and we want to distribute the profit to perhaps myself as well as my business partner, we could distribute through a dividend.

Typically, you'll pay yourself a salary. You might also pay yourself a dividend, and the dividends are traditionally Canadian eligible dividends and those are traditionally very tax efficient.

Regarding the publicly traded companies out there that have large balance sheets, you're able to buy and sell them on an exchange. They will generally declare what their dividend policy is for the year.

It’s typically quarterly distributions for the unit holders with the opportunity at some point down the line to increase that dividend. Now, the dividend is NOT guaranteed. Contrary to what most people think.

Full Blog Article and Video on Dividends vs Salary (https://robtetrault.com/dividends-vs-salary/)

If you have a bank stock, an insurance company or a telecom company that the dividend is effectively “guaranteed”, just know that it is NOT 100% guaranteed. They can cut the dividends and they can cut distributions.

Although, most large Canadian companies tend to do anything else before cutting their distribution. They’re going to look at their balance sheets. They’ll look to see if they can sell assets before cutting their distributions and cutting a dividend. I'd say it's extremely rare as it doesn't happen that often.

Dividend Yield

How does the actual dividend work?

The board, CEO and/or management will decide exactly what they're paying. Now if you want to know your dividend yield, it’s quite simple. You calculate your annual dividend, your trailing 12 dividend or even your quarterly dividend (multiply times four), divided by the current stock price, and that gives you your current dividend yield.

Annual Dividend / Current Stock Price = Current Dividend Yield.

That's what you could expect to get over the next 12 months owning that stock.

Dividend Payout Ratio

Now, there's also something called a dividend payout ratio. The dividend payout ratio is telling you how much of the profits that company is sharing with you as a stockholder.

Let’s do some simple math. If the company made $10 profit and they're paying you 4, that would be a 40% dividend payout ratio. That number is important because you want to know how healthy the company’s balance sheet is.

The larger the payout ratio, the less safe the dividend would be. If they're paying out more than the profits, that's usually not a good sign. You want the payout ratio to be healthy. Most of the Canadian banks, financial institutions like to be in the 40% to 60% range. Generally, these are mature companies.

Who pays a dividend and why do they pay dividends?

In most cases, if you own a stock, that's a growth play. In other words, we want that company to continue to generate double digit growth, compound annual growth on their balance sheet, on their profit and on their sales.

If you want the growth play, generally those companies will not be distributing a dividend.

What an investor might say in this case is that he or she would rather have the management team of the company keep the dividend, spend it on the company and get a better ROI opposed to having the investor do it on their own balance sheet or portfolio.

Growth stocks typically will not have a dividend. If they do have a dividend, it's usually a small percentage that is being distributed like 1 or 2%. The mature companies, specifically in Canada are in some of the following sectors: financials, real estate, infrastructure, utilities. They're the ones who are paying dividends and have been paying dividends for a while.

Full Recording and Presentation Slides of Winnipeg’s Exclusive Real Estate Investment Conference (https://robtetrault.com/winnipegs-exclusive-real-estate-investment-conference/)

Mature companies tend to pay dividends. They are profitable. They don't want to keep the cash on the books. They distribute the profit to the shareholders.

For Growth companies, we want them to spend the money and make it on their own.

Dividends are typically paid out quarterly. Most companies will pay out their dividend quarterly. The distribution gets announced, then it gets paid usually anywhere from 10 to 20 days after the end of the prior quarter and it usually gets paid directly to your investment account.

Now, there are some old school investors out there who continue to own a certificate. If you have a certificate of a thousand shares of Manulife financial for example, you might be receiving an actual physical check to your home address every quarter, which has the dividends on it. Ideally, you’d like to set up automation process for that dividend. It would be best to have the dividend deposited electronically into an account and re-invest it.

Many firms will allow you to do a dividend reinvestment plan. What that means is they'll take your dividend and re-invest it automatically if you don't need the cash. If you're an investor that doesn't need the cashflow for that specific month or that specific quarter, you could reinvest it in the company.

Some companies will allow you to rebuy the shares of their own company at a discount to market. Perhaps it’s 2, 3 or maybe even 4% of the dividend reinvestment plan at a discount. This makes sense for many people because you're buying the value of the shares at a discount to what would be the prevailing rate in the market. It's an opportunity for you to make a few extra percentage points on your return with your dividend.

Next thing you know you've “dripped” as we like to call it (having your dividends re-invested). You've dripped all these shares and now you have way more shares working for you down the road.

Dividends are extremely tax efficient and more specifically, Canadian eligible dividends are extremely tax efficient.

If you're a conservative investor, you might want to focus on more mature companies. They are especially efficient in non-registered accounts or corporate accounts because of the tax efficiency of the dividend. Dividend yield is ultra tax efficient.

You want to make sure you're aware what your dividend payout ratio is for these mature companies or you can simply let your advisor worry about that 😉

www.SpeakToRob.com

What is working capital? Special Host Alexa Cook talks with Managing Director Craig Jeffery of Strategic Treasurer on the concept of working capital. They take a closer look at how accountants, bankers and treasurers define and utilize the components of working capital.  Listen in to this bite size discussion to find out more.

During this episode, You Me and Your Top Three host, Gregg Garrett, speaks with Michael Farber, Managing Partner of Ratio Companies and former EVP, Booz Allen Hamilton. Michael speaks to his 30+ year career in driving large transformation in both federal government agencies as well as market-leading companies and shares how innovators need to not just disrupt to disrupt, but rather define the purpose of being different. Michael explains how making safe spaces and encouraging people to explore and embrace differences is key to being a true leader in today’s rapidly changing world and notes how this digital transformation needs to be met at the cross-section of capabilities. And, of course, Michael shares his top three – from the woman who makes him brave, to the teachers that made being different purposeful, to the colleagues who solidify structure innovation, and finally to the client executive who is acting as a window to a thirty year career. You have to hear what Michael has to say about how the key to transformation is really an art of orchestrating trust.

Michael is the Managing Partner of Ratio Companies and a former Executive Vice President, Booz Allen Hamilton. He helps clients and business partners invest in and accelerate the identification, creation, adoption, and enablement of advanced, edge, emerging, disruptive and transformational technologies.

As often as he can, Michael looks to leverage technology for positive public change and the societal good.

Michael holds a MPA from Columbia University's School of International and Public Affairs and a BA from the School of Architecture and Planning at the State University of New York at Buffalo. He also continued his education through post-graduate doctoral studies in public policy and administration at New York University.

Michael lives in Laguna Beach with his wife Donna and dog Finn -- he and Donna have two children who they followed out to the West Coast. They plan to stay a while...

Segment 1: Overview

1:24        Where does innovation occur?

4:15        Michael Farber: Assisting the United States’ federal agencies to transform. (Booz Allen Hamilton.)

5:49        Michael’s Background: From baseball and architecture to public policy and planning consulting. (Columbia University School of International and Public Affairs. Weston Solutions.)

Segment 2: The “Top Three”  

9:47        Michael’s “Top Three”: Michael’s wife, Donna – being brave, having the courage to try things, and having a benchmark for the past.

12:01      Michael’s “Top Three”: Michael’s Educators: Mrs. VanOrt, Professor Gary Scott Danford, PhD , and Professor Steve Cohen , PhD – engage, ask questions, and do the research. (University of Buffalo.)

14:03      Michael’s “Top Three”: Susan Penfield – celebrating the ability to think about things in a different way.

16:36      Encouraging exploration and discovery in parenting – creating the environment safe space to try things and explore.

19:24      The role of innovation at Booz Allen Hamilton – innovation was there, but how do we create the innovation environment?

21:17      Michael’s “Top Three”: John Bear – transforming leadership and culture in addition to the business and having the courage to take time and be patient.   (MISO.)

Segment 3: Industry Disruption & Transformation  

25:40      What topic motivates Michael to get up in the morning? “The enormity and complexity of what has to come together for transformation.”

28:42      What styles of innovation are working today?

34:39      “You could start with outcomes and objectives, but new capabilities are allowing you or others to see things that you would have never thought to ask for.”

35:41      Breaking down artificial boundaries for innovation.

39:09      “Focus more on what you’re trying to accomplish or solve or address than prescribing potential solutions or defining the requirements set so narrowly where you’re just constraining any innovation at all.”

43:43      The government as a major R&D player.

48:10      “The mistake I made several times was to not recognize the need to change workflow /  capability / competency / etc, while trying to introduce disruptive technology and having a mismatch with culture.”

51:05      Hint to overcoming: 1) insulate a new capability internally, and 2) create it outside of the organization.

52:51      An important part of disruptive change: “How much trust is there within the organization?”

Segment 4: Leadership & Wrapping Up

56:50      “Leadership is vision.”

59:07      “The leaders were best evidenced by their followership.”

1:00:38  Hint for tomorrow’s leader: “ [The key] is your network, your trust in other folks. Trust is key; absolutely essential.”

1:02:32  Build your net.

1:03:24  Stay in touch with Michael via email: farbermf@ratioim.com

Contact Michael Farber:

• Michael’s LinkedIn
• Michael’s Email

Contact Gregg Garrett:

• Gregg’s LinkedIn
• Gregg’s Twitter
• Gregg’s Bio

Contact CGS Advisors:

• Website
• LinkedIn
• Twitter

Leverage Ratio | Debt to Equity Ratio 

Leveraging vs being debt free 

This is something that some folks struggle with. You're borrowing to invest.

Are you going to make more in the investment world than you're paying off in your interest?

We advise people on leveraging and whether it is something they should be doing. If it's something you want to talk about, please go to speaktorob.com, and we'll book a free, no obligation consultation call to give you some peace of mind on that topic.

Leveraging is borrowing to invest. The traditional form of leveraging is the form that most people do at one point in their young adult lives.

The first time they buy a house, they end up borrowing to invest in their home.

You're buying a half million-dollar home, but you don't have a half million dollars. Maybe you have $100k, and you put that down as a down payment, and you leverage the other $400k.

That's the first form of leveraging that most people do. The other form of leveraging that we're talking about today is leveraging with your investments.

Full Video & Blog Article on Pension Transfer | Pension Withdrawal 

Margin Account 

Let’s talk about a margin account. A margin account is a non-registered investment account. It's not an RRSP or a TFSA. You can borrow on the margin that is available on your securities.

Most if not every investment firm will allow you to do this. Interest rates will vary, but you could be as low as prime plus a bit.

You could be as high as prime plus a lot depending on the institution and depending on the amount of leverage that you have.

Let's assume you got a list of securities. The Securities Commission gives us rules and there are compliance rules with respect to how much we can lend off of each security.

Depending on the price of the security, some securities are as high as 70%.  Let’s pretend you have $100 worth of security. You could lend up to $70 on that $100 every day.

These shares are marked to market and if the value of the loan is higher than 70% you get what's called a margin call.

You might’ve seen a movie about this, or maybe you've heard of friends losing their entire portfolio by leveraging.

It's not a pleasant situation and many people have been wiped out over time due to margin calls. What ends up happening is you start to get wiped out in a declining market every day.

Your shares are worth less, therefore your loan is worth less, but your actual loan amount hasn't moved.

You need to either put cash into the account or you need to sell securities. If people don't have the cash, they start selling securities the next day the market's down.

This spreads more selling. More selling means lower prices. The stock market is falling, people are getting margin calls which leads to selling securities and eventually there's nothing left in the portfolio.

Full Video & Blog Article on Stock Market Crash | How To Prepare For A Recession 

It happened quite a bit in the 80s, and in 2008 there were people wiped out by these margin calls.

If you're going to be doing leveraging on investing through a margin account, first of all, you need to understand how it works. You need to understand margin calls in and out.

You need to understand the value of the loan and that volatility will occur.

The word leverage comes from the French word "Livia" or the English word "Lever", which means you're amplifying the returns and you're amplifying the losses.

I think of a lever teeter-totter that's moving a little bit and on the other side, it moves a ton.

The more leverage you have, the more you will gain or lose. Every percent you lose will equal to losing more when leveraged.

It's basically amping up your portfolio returns one way or the other. You need to understand how that works.

You need to understand how the tax implications of it are, and you need to understand the volatility and know for a fact that you're able to stomach it.

Most people can't do it. However, if you can or if you've done it before and you've experienced it but you still don't know how it works and you want to get it right then we could talk and figure out a way to do it through a margin account.

Typically, what we would suggest for a prudent strategy to someone who wants to leverage and understands how it works is to leverage up as the market falls and leverage down as the market goes up.

Say the market is falling, we would suggest to you that when the market falls during a correction by 5%, you would increase your leverage.

This would be a strategy that some would think would be an optimal way to take advantage of the fact that the market's correcting.

You could borrow money for relatively cheap these days and you can hope to make more than that with your investments.

The neat thing about borrowing on margin like that is that it is a tax-deductible expense for you. If you are a top tax bracket and high net worth individual, then that becomes a tax write off for you.

Hypothetically, the markets are falling, you are adding to your investment portfolio a little bit at a time. I suggest that you set some limits.

You should talk to your advisor and make sure you have limits in your mind as to the maximum amount that you'll ever be leveraged.

I would strongly advise that you not go close to the 70% mark unless you have a ton of cashflow that you can fund your account with if you do get a margin call.

Home Equity Line 

Of course, there are other ways to leverage. People have come to me and asked me how do I leverage my home? How do I leverage my cottage?

These are real assets. Now most people strive to be debt free. They want to pay down their debt as quickly as they can. Now this effectively becomes a risk reward scenario.

Paying down your debt fast would be something that would be a peace of mind decision. You don't like having debt. You want to have it off the books and be debt free for life.

Now, if you're of the view that you want to borrow off an asset, one way you could do it would be through a HELOC, a home equity line of credit.

A HELOC is an investment. Basically it's an account that's tied to the value of your home that you can draw on.

Every time money goes into the account, you now have available margin room. You can take that money out and you can put it in your investment account if you'd like.

Every time money goes in, you now have available margin room. Note that your paycheck goes into the same account. Your expenses come out of the same account as well.

If you would do it that way, most people would be leveraged at the same number for a while, with the goal of funding an investment account on the side.

You're paying 3% or 4% on your home equity line and you should ask yourself if you are going to make that number with your investments?

If you think you're going to make at least that number with your investments, then the math makes sense.

The question is can you handle it? Can you stomach the volatility and can you handle the fact that you're not going to be debt free?

There’s also another strategy for leveraging. Let's say you get a windfall either through an inheritance, through the sale of a business or through some sort of cash windfall like a lottery.

One way to effectively reduce your costs of borrowing and increase your leverage while increasing your return would be you take that windfall, pay down your mortgage, so it goes to zero.

Then you borrow either through a conventional mortgage or through a HELOC and then you could place that into the market.

That becomes tax deductible because you are borrowing to invest and that would be another form of being leveraged.

You could do the HELOC, you could do the traditional mortgage or pay the mortgage down like I just taught, which is a kind of modified Smith maneuver. This would allow you to write off the interest.

Additionally, you could do it through your margin accounts or if you're gutsy, you can do it in all of them. You could leverage on top of leverage, on top of leverage.

Please make sure to talk to your advisor before you do that because it's not something for the faint of heart. There’s a lot of volatility and you got to understand the consequences of that.

Additionally, there are now forms of leveraged ETFs that exist in the market. That means you can get a double or quadruple ETF that goes one-way or another based on what happens in the market.

Again, those are not for the faint of heart. Those are short trades only and you really need to understand how they work. If you're ever going to do it make sure to talk to your advisor about that.

A margin account is something that some people do to take advantage when market corrections occur and it can be an effective way to grow your net worth.

If you need advice on leveraging, please go to speaktorob.com, we'd love to chat about this topic with you.

📞 Call us directly at 204-259-2856 to schedule your FREE consultation

LLN (9/4/19) – The rates for vans and reefers are up, as are load to truck ratios. Also, truckers recently expressed their concerns about the proposed changes to the hours of service at a listening session held by FMCSA. The price of diesel is lower again for the eighth week running. And a new study takes a look at the impact of driver detention time.

0:00-10:10 – Newscast.

10:10-24:44 – Truckers speak on HOS changes.

24:44-38:42 – Van and reefer rates; diesel drops again.

38:42-48:19 – Impact of detention time.

The RER (Respiratory Exchange Ratio) determines if you're burning mainly carbohydrate or fat at any given time. But is this important and should you care? Listen in to discover what RER is and if some new-found knowledge can help you burn more fat.

And to use my FREE calorie calculator, go here: ironparadisefitness.com/calorie-calculator

What is the importance of liquidity planning in my investment portfolio?

Let’s talk about how you calculate your liquidity ratio.

Liquidity management is a concept, a lot of people don’t understand. The definition of investment liquidity means the availability of converting or having an asset class that is convertible to cash or to cash like instruments that you can spend and use in your day to day life.

Think of an investor, an individual who’s got all his assets in one single investment. It’s a high rise in a remote city somewhere in Canada and it’s a really tough area to sell.

That would be a very illiquid asset.

The only way he can get his cash, is he needs to sell that entire asset to one specific buyer. The other end of that spectrum would be actual cash sitting in a bank account. That is a fully liquid portfolio. In between that, you have all sorts of different portfolios or net worth statements.

What are your liquidity needs?

Let’s chat about individuals who don’t have enough in liquid assets.

It could either be that all your assets are in an RRSP, a registered account or a locked in retirement account. Essentially, an account that you’re not able to pull the money out means the funds in that specific account are not liquid.

Let’s go through a scenario where all of your assets are in an RRSP, you have no tax-free savings account, you maybe have some registered education savings plan money and then all of your other net worth is in either homes, cottages, real estate and other illiquid assets.

You’d be a very illiquid investor and that could be a concern for you.

Full Blog article on the Top 3 Ways To Buy Real Estate Investment Property In Your Investment Portfolio:

When we sit down to do our investment planning with clients and chat about investment liquidity, we want to make sure that you have some of your assets in an account that is liquid.

A tax-free savings account (TFSA) is an example of a liquid account.

Having a non-registered account holding assets that are liquid is another alternative to liquidity management.

The Importance Of Liquidity Management & Liquidity Ratio

What kind of assets are liquid and can be included in my investment portfolio?

Stocks are extremely liquid for the most part and with bonds, there’s historically been a little less liquidity.

Preferred shares and debentures are not as liquid as the former mentioned above.

You should definitely consider having a portion that is liquid. The most liquid stocks are the most highly traded stocks.

Think of your Canadian and US large cap companies. These are highly traded.

There’s a ton of volume every day on the market for these large cap companies. Essentially, that means they get traded a ton which leads to their respective stocks being highly liquid.

Sometimes you get to a situation where you have a stock, a preferred share, a debenture or a penny stock that has no bid and that has very little liquidity. You could not even sell your share if you wanted to. That’s the opposite of liquidity.

Generally, as a company gets more mature, as it appreciates over time and as it has a stronger balance sheet, it commonly graduates from one exchange to another.

If all goes well, eventually it gets on the TSX and then it starts to be trading volume. Once there’s trading volume, that means there’s liquidity and we’ll generally see what’s called a liquidity bump on the value of the stock.

We believe in building very custom and tailored investment portfolios with a balanced calculated liquidity ratio. We want to be assured the client has their liquidity needs looked after.

I think it’s extremely important and I believe people should have exceptional liquidity management not only in their accounts but also in their net worth, on their balance sheet and in their personal net worth statement.

At the end of the day, when you’re looking at that and you’ve got a bit of everything and if you’re not sure of your current liquidity ratio, obviously you want to consult your tax professional or your portfolio manager.

It’s a really important concept and if you get caught on the wrong side of liquidity, you can really get crushed and devastated through having to sell an asset at a depreciated value.

You want to be able to control when you sell your assets.

Full Blog article on How Much Do I Need To Retire Comfortably:

One of those shows where a quick glance down the playlist reveals a United Nations of music genres including (but not limited to) Indonesian Shoegaze, Swedish Electronic Noise, Mongolian Throat Metal, Italian Retro Disco, South African Kwaito House, Canadian Electro, Jamaican Hip Hop, Colombian / Spanish Reggaeton, K-(Indie)Pop and, of course, Ethiopian Drone Hymns.

As an added bonus here's a song that didn't make the final cut but always gets a thrashing in The Joint HQ at this time of year - "Should The Bible Be Banned" by McCarthy. Happy Easter everyone!

https://www.youtube.com/watch?v=YCc_lMcu4ls

Direct download: The Joint - 20 April 2019

And here's the playlist in full...

• STEEL MIND  -  Boss Man
• NINA SIMONE  -  In The Morning
• ELENIN  -  Turtleneck
• A CERTAIN RATIO  -  Houses In Motion
• TEAMARRR  -  One Job
• VINNY VIRGO  -  Toast
• GOSHA GUPPY  -  A Beautiful Day To Get Robbed
• BOOTHE  -  did they go
• HAMILTON SCALPEL  -  Uprated Nite Zone
• KELSEY LU  -  I'm Not In Love
• BLACKPINK  -  Kill This Love

Frankie Boyle New World Order S03E04 Intro

• WILMA VRITRA  -  Black Is The Beauty
• THE HU  -  Wolf Totem
• WILMA VRITRA  -  burds of paradise
• JOËL  -  Type
• TOY  -  You Make Me Forget Myself
• PILE  -  The Soft Hands Of Stephen Miller
• THE WORLD  -  Slow Rho
• THE OTHER PEOPLE PLACE  -  Let Me Be Me
• DJ CALL ME  -  Return Of DJ Call Me
• MARIE DAVIDSON  -  Work It (Soulwax Remix)
• OOHYO(우효)  -  Pizza

Frankie Boyle New World Order S03E04 Outro

• KALLE HYGIEN  -  Violence Is The New Sex
• JPEGMAFIA  -  The Who
• FLAURAL  -  The Thinker
• LOGOS  -  Zoned In (featuring Mumdance)
• SOSENA GEBRE EYESUS  -  Aser Awetar (አስር አውታር)
• CONTROL TOP  -  Straight Jackets
• POZI  -  Engaged
• BABY MOMO  -  Big Dyke Energy
• ROSALÍA, J BALVIN  -  Con Altura
• KOFFEE  -  Rapture
• THE JESUS & MARY CHAIN  -  Vegetable Man
• GIRLI  -  Deal With It

With Sheraz Mian, Director of Research at Zacks

"Ten Things Horse Owners Should Know About Calcium, Oxalates And Their Pastures"

Time Stamps and Contact Details for this Episode are available on 

www.HorseChats.com/LarissaBilston3

Music
- BenSound.com

Interviewed by Glenys Cox