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January 4, 2015

Your Secret to Value a Business

Money is to be made during recessions, not in economic booms. Period. Warren Buffett, the legendary investor, made some of his best gains from buying during recessions. For instance, he bought Allstate insurance company in March, 2000, at a time when the insurance industry was going through a recession, which brought him hefty returns in the years to follow. The secret remains is how to properly value a business. This requires both investor and business acumen in evaluating, and valuating a business; an art in itself.

February 10, 2015

Smart About Term Insurance

Term life insurance is “pure insurance” because when it only provides a death benefit to the beneficiaries. In contrast, permanent insurance such as whole life, and universal life, has cash value, but makes is more expensive. Term insurance is less expensive because it provides a specific death benefit, without the costs of an embedded investment.

February 12, 2015

Explaining the Family Tax Credits in 2015

Let us review the changes to the main family benefits provided by the Government of Canada in 2015.

The amount for the Universal Child Care Benefit (UCCB) will increase. This is the credit paid for each child under 6 years old regardless of the family income. This amount increased from $100 to $160 per month per child under 6 years old. This is the amount paid on the 20th of each month. However, the first 7 months ($420) payment for 2015 will be paid out in July of this year. Then, from August 2015 onwards, the payment will be $160 per month per child.

June 30, 2016

What happens when management fails?

The Art of Management

Capital efficiency

In principle at least, the main function of management is the efficient use of capital in everyday decision making. Managers have to satisfy three main beneficiaries of the company, namely the employees, bondholders, and the investors. Company employees benefit by earning a salary, while bondholders gain by receiving interest on their held bonds. However, both these beneficiaries are more concerned with short term gains, whereas investors, who are the residual owners of the company, are more concerned with long term gains. Investors receive benefit from the company by either receiving a cash dividend, and/or capital gains on the price of the stock.

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