The question is why? Hereunder are some of the reasons:

First – Lack of business acumen. Not everyone has a capital to invest in business is a businessman or businesswoman. To succeed in any field of endeavor needs special gift or talent on said specific field. Example: if a person wants to be a successful singer, that person must have a special gift of singing. If a person wants to be a successful boxer, that person must have a special gift in boxing.

Similarly, if someone wants to be a successful businessperson, he/she must have a special talent or ability (business acumen) to operate a business successfully. In fact, in the book of Dr. Napoleon Hill, “Think and Grow Rich”, of the 36 causes of business failure, lack of capital is at the last. 

Meaning, business capital is not a problem for if a person has a special talent or gift of running a business, initial business capital is easy to secure for banks and other financial institutions would be happy to grant a business capital loan by submitting a realistic business plan. Accordingly, not everyone can successfully operate a business despite having capital.

Second – No proper accounting. Though a person has a talent or gift to operate a business, he/she needs proper accounting records to guide him/her making wise business decisions to make a business profitable. 

Third – Lack of Internal Control Procedure. This is essential especially if a business is entrusted to some one (relative or close friend). Internal Control procedure includes: a surprise audit, especially for cash on hand, bank deposit and inventory of products/items sold. Without a surprise audit, could encourage or tempt a person you entrusted to misappropriate or use the money for purposes other than for the business operation. Actually, the Bible says, “…money is the root of all evils” (1Tim. 6:10), and 

Fourth – No Manual of Operation that includes policies like: purchase of inventory, mark up or the percentage you add to the cost of product or service you are selling to customers, authorize expenditures and specific duties and responsibilities of the person you authorize to manage the business. 

In addition to the above, even if you can avoid all the reasons of not succeeding your business in the Philippines while you are here in Canada, another challenge is the distance. It is almost impossible to implement properly your Business Manual of Operation to make your business a success.

With the foregoing, unless you can overcome the above reasons why most businesses do not succeed in the Philippines, managed by relatives or friends, the writer believes, it is not wise to operate a business in the Philippines manage by relatives or friends.

The post March 2021- IS IT WISE TO OPERATE A BUSINESS IN THE PHILIPPINES MANAGE BY RELATIVES OR FRIENDS appeared first on Debt Clinic of Canada INC..

Most of them could not pay the full amount owing when come due. They only pay the minimum monthly payments, oblivious that minimum payments are practically applied to interest only with annual interest rate, up to 29.99% on some credit cards.  

Their common philosophy (reasoning) is that they don’t want to increase their mortgage, so that when they retire the balance of their mortgage would be substantially reduced if not paid in full. That is of course wise and logical. 

However, they don’t realize with high interest rates they are paying, they could not get out of debts for years even during their retirement time, for the minimum payments are applied to interest and almost nothing applied to principal.

Whereas, should they choose to consolidate their unsecure debts using the equity of the houses, they will be only paying annual interest rate as low as 1.54% on a fixed rate, first-mortgage and 1.60 % annual rate on a variable rate mortgage. These interest rates are at the time this article was written. These low rates are from primary lenders like: major banks and trust companies.

Since they pay only minimum monthly payments, when they retire they will carry with them their unsecured debts with exorbitant interest rate. With income from pensions only, it would not be easy to meet their monthly obligations like: food, clothing, utilities, transportation, mortgage payments (if there is still outstanding balance) plus payments for the unsecure debts.

No wonder, the writer has clients who are retired with financial problems, despite having big equities on their houses, and no peace of mind. Why no peace of mind? Because creditors and collection agents are hounding them for they defaulted their payments on their unsecure debts. 

Some of their creditors already filed cases in the courts of law to enforce collection. Should they continue not to pay the outstanding balances owing, after their creditors secured judgment(s), creditors could register liens against the title  (ownership) of their properties.

When these happen, the liens registered against their properties become like mortgages for they could not sell, nor refinance the existing mortgage without paying in full the amount of liens registered plus legal fees and expenses incurred by creditors in the collection process,

With the foregoing realities, homeowners have no choice but to consolidate their debts using equity of their houses, otherwise, creditors with court orders, could takeover their properties and sell said properties through Power of Sale – that is to the highest bidder. 

Usually and unfortunately, properties sold by Power of Sale, are lower than the market value by about 5% to 10%, for creditors are not concerned of homeowners’ welfare. They are only interested to collect the outstanding debts in full.

The above scenario could be prevented when homeowners consolidate their unsecured debts, using the equity of their houses at the time they could not afford to pay the full amount of unsecure debts when due. 

The post February 2021 – WHEN TO CONSOLIDATE YOUR DEBTS USING EQUITY OF YOUR HOUSE appeared first on Debt Clinic of Canada INC..

First – pleasures (lust of the flesh). Pleasure is a primary value of this world. Like: go to parties and tour to different places of the world.

Second – possessions (lust of the eyes).  This is buying things we do not need to impress other people that we know, for many people self-worth is based on their net worth.

Third – prestige. For most people image is everything. We are very status conscious We want people to look up us. We want people to think we are important and successful and when that happens, we have value. We are very status conscious. In our desire maintaining our prestige we spend money unconsciously.

Embracing the world three basic values: pleasure, possessions and prestige is among the primary reasons why people went financially broke.

To avoid experiencing financial problems, we need to stay away from spending our money on the three world’s values above-mentioned. To insulate us from the influence of world’s values, we need to make a regular monthly family budget to be sure that our money is spent only on the essentials (needs) not wants.

The formula of an ideal Family Budget is: 10%; 10%; 80% = 100%.

What does it mean? If you are a Christian believer, the first 10% should be given to the church where you worship. In the Bible it is called “tithe” meaning 10% of your net income. Said amount is for God, to support His church to spread the gospel or good news of salvation (Matt. 28:19-20), to people who do not know God’s plan of salvation.

The philosophy or reasoning of tithing is – God’s own everything we have: our life, talents and abilities to earn a living. In fact, we have no control when we are going to die or to get sick, for only God is in control (Psalm 24: 1; Deut. 8:17-18; Malachi 3:8-10).

The second 10% is for savings (force savings) in times of emergency like: you lost your job, you or your love one gets sick and circumstances beyond human control.

The last 80%, this is for food, clothing, shelter, utilities, transportation, children’s education, vacations and miscellaneous expenses.

For a Family Budget works, you need to discipline yourselves not to spend money  for the three world values of pleasure, possessions and prestige. It simply means, spend your money only for your needs not wants. Family budget should be discussed and agreed by all family members. This is important that each family member should spend within the budget.

By spending in accordance with your Family Budget, you can avoid, financial crisis. That could give you peace of mind, for no creditors would bother you and sometime even harass you of going to court of law to enforce collection on your unpaid bills. The importance of Family Budget is not only having peace of mind but becoming

The post January 2021 – THE IMPORTANCE OF FAMILY BUDGET appeared first on Debt Clinic of Canada INC..

An example of financial problem that could be avoided is financial mismanagement. That is where a person has good paying job, where his/her take home pay is more than enough to pay his/her basic needs like: food, shelter, clothing, education for children and miscellaneous expenses.

Financial mismanagement is the consequence, of not making a family monthly budget where family expenses should be itemized with a corresponding amount for each expense. Aside from the basic needs above mentioned, include in the budget, vacation and recreation.

Any surplus income should be saved (force saving) in a separate interest-bearing bank account as reserve for “rainy days” so to speak. That is when you are laid off  or get sick. Those two are examples of causes of financial problems where you have no control.

Another financial problem that could be avoided is when you have a legal dispute. Going to the court of law to resolve a dispute should be the last resort. Why? because of the following reasons: 

First, legal fees are expensive. When you hire a lawyer or paralegal to represent you in court, it would be expensive for the resolution of the case takes time. Every time a hearing is postponed and your lawyer or paralegal appeared in court, you have to pay him/her for the time spent.

Second, the resolution of the case takes time for the courts are loaded with so many cases. Some time it takes years for a judge to render a decision to resolve a case. 

Further, every time there is a hearing in most cases your presence is required. When it happens you need to be absent from your work if you are still working.

Third, though you may think that you have more than 50% chance of winning the case, there is no guarantee that a judge would decide the case in your favor.

Fourth, your relationship with the person you have a dispute would become worse from bad. It is sad, especially if the person is a relative or a friend. 

Considering the above, the writer believes that the best alternative, instead of going to court, (which is expensive and time consuming) is to settle the dispute between you and the opposite party, through an impartial mediator, that both you and the opposite party agree. 

That person might be a common friend of the opposing parties

In the process of negotiation to resolve the dispute outside of court, both parties should not be firmed, but flexible on what he/she demands for the settlement of the dispute. 

Since going to court has no assurance you can get what you want, for it is a judge to decide base on your evidence presented, both parties should be negotiating in good faith, willing to give and take to settle the dispute. 

In settling a dispute outside of court, both parties would save money and time in going to court. Therefore, going to court to settle a dispute should be the last resort.

The post December 2020- WHEN YOU HAVE A DISPUTE GOING TO COURT SHOULD BE THE LAST RESORT appeared first on Debt Clinic of Canada INC..

Of the above lenders, banks charge the lowest interest rate. Credit card companies charge an average of 19% up to about 29.99% per annum. Finance companies, credit card companies, loan companies and private lenders charge much higher interest than banks.

If you have debts with high interest rates from several creditors other than banks like: credit cards, Pay Day loans and private lenders, you need to consolidate those debts – that is to combine them into one bigger loan with lower interest.

An ideal lender to consolidate your debts is from a bank for interest rate is usually the lowest among lenders. However, the requirements are rigid. For you to get approve, you have to meet: income requirement, good credit score, a steady employment and in some cases a collateral/security is required like a car or a house if you own one.

Because of the above requirements, it is not easy to get a loan from a bank. If you cannot consolidate from a bank or with a lender with lower interest rate, you will keep paying exorbitant interest rate. The consequence, would be, you could never be able to get out of debts for the payments you make go mostly to interest.

Should you not able to consolidate your debts with lower interest rate, and you really want to improve your finances, without filing bankruptcy, your next option is to file a Consumer Proposal. This is to pay only a portion of your debts without interest. The amount you pay could be only 50% of the amount of your debts depending on your income and dependents. 

Approved proposal amount is payable up to sixty (60) months and could be paid in full anytime without penalty. After you paid in full the amount of your Consumer Proposal, you are given a Certificate of Full Payment.
 Thereafter, you can start establishing your credit score, and you are on your way to financial independence by managing your finances – that is when you learn NOT to spend more than what you earn.

The post November 2020 – CONSOLIDATE YOUR DEBTS TO REDUCE INTEREST appeared first on Debt Clinic of Canada INC..

Moreover, by utilizing credit cards we are given the privilege of using funds interest-free up to thirty days, when we pay in full the amount due on time.

However, there is a risk of having credit cards – it could lead us to financial ruin, if we do not know how to use them properly. Actually, many people experiencing financial problems are caused by improper used of their credit cards.

You have to use your credit cards properly to avoid financial crisis experienced by many. Here are some suggestions:

First, make a monthly family budget to include: food, clothing, shelter, transportation, children’s education, and insurance (life and car). In your budget, you have to set aside a portion for savings, ideally, 10% of your net income  for rainy day (possible time of need).

Second, pay balance due on time to avoid paying exorbitant interest rate up to 29.99% per annum.

Third, do not buy items not included in your budget like items on “Sale”, for it could ruin your budget and lead you to make cash advances from your credit card(s) to cover your budget deficit.

Fourth, If you cannot control buying items not on your budget, it is wise for you not to take with you, your credit card(s) when you go to shopping malls.

The consequence, for not properly using your credit cards would be default on your monthly payments. When it reached to that point, your account maybe assigned to a collection agency and your credit scores go down the drain. 

When you are on that situation, you cannot get approval on your applications for car loan, mortgage, should you buy a house or refinancing on your existing mortgage(s) from primary lenders like: Banks and Trust companies.

Your alternative is to get your loan, mortgage and other financial needs from secondary lenders like: finance companies. Pay Day Loans, and private lenders where interest rates are about twice as much as the interest rates offered by primary lenders. 

Moreover, when you damage your credit score it would be reflected in the credit bureau up to seven years. 

Using credit card is a privilege not a right. Appropriately, you have to use it properly that you can continue to benefit from it. Otherwise, it could ruin you financially and sometimes, the only solution is to file bankruptcy  – which is the last resort in solving financial problem.

The post October 2020 – PROPER WAY OF USING CREDIT CARDS appeared first on Debt Clinic of Canada INC..

Policies give insured persons the assurance that their loved ones will have peace of mind and financial protection after their death. 

Life Insurance falls into two categories – whole life and term – some provide you with cash value, taking the premiums you pay and investing them into the market. While others only pay the face value of your insurance if you die within a certain time period. 

The question is how much life insurance you really need? Most insurance companies say, a reasonable amount for life insurance is six to ten times the amount of your annual salary.  Another way to calculate the amount of life insurance needed is to  multiply your annual salary by the number of years left until retirement.

The purpose of life insurance is primarily to replace your income when you die to cover the expenses of your love ones (dependents) on your income like: food, clothing, shelter, transportation and education.

 Accordingly, to cover the above-mentioned expenses, the face value or amount of life your insurance could be calculated up to the time your dependents earn their own income to support themselves financially.

In the addition to the above-mentioned, two ways of calculating how much life insurance you really need, you estimate how many more years your dependent children complete their education and be able to find employment.

Then, calculate your family’s monthly living expenses, when you are gone plus your children expenses for their education. Based on their monthly expenses, convert it to yearly expense. Then, multiply the yearly expenses to the numbers of years your dependent could finish their education and find employment.

Example: Assuming you have a family of four: you, your spouse, and two dependent children. Assuming further, your spouse is gainfully employed. Take for granted, you contribute $1,200.00 monthly or $14,400.00 yearly ($1,200.00 x 12) to cover your family expenses annually. 

Should it will take seven years for your dependent children to complete their education and become financially independent, therefore, the ideal amount (face value) of your life insurance is $100,800.00 ($14,400.00 x 7 years).

On top of the $100,800.00 you may add your estimated burial expenses.

When you decide to purchase a life insurance, be sure that you will be able to pay the premium on time otherwise, your insurance coverage will be cancelled. 

Should it is not affordable for you to pay the premium of an ideal amount of your insurance as above calculated, just get an insurance policy with lesser face value that premium is affordable. It’s better to have smaller amount of insurance than no life insurance at all.

For greater coverage with lesser premium you may choose a Term Insurance policy. Your insurance agent could explain it to you.

The post September 2020 – HOW MUCH LIFE INSURANCE YOU REALLY NEED? appeared first on Debt Clinic of Canada INC..

It is logical to do that. However, most of them who replaced their life insurance policies for higher coverage with lesser premium do not know the risk associated with replacing old insurance policies for new policies. 

The risk is called, “Contestability Period.” It is a period within two years from the effective date of the policy, where the insurance company is allowed to review your coverage for anything you misrepresented during the application process. The “Contestability Period” exists to protect the life insurance company from fraud.

After two years from the effective date of the policy, your insurance policy becomes “A Non-Contestable Policy.” 

Meaning, should there be any misrepresentation during the application process, the insurance company could no longer contest said misrepresentation. Therefore, it could not deny paying the amount of insurance coverage to the beneficiaries of the insured person who died two years after the effective date of the insurance policy.

However, when the insured person dies within the “Contestability Period” – that is within two years from the effective date of the policy and the insurance company found misrepresentation(s) during the application process, the insurance company could deny paying his/her beneficiaries of the amount of insurance coverage (face value). 

In view of the foregoing, it is risky to replace your insurance policy because of the “Contestability Period”, for you will start all over again counting two years period from the effective date of your new insurance policy, to make your policy become “A non-contestable policy.

Accordingly, before changing your insurance policy, you have to carefully evaluate, the advantages you will get from a new insurance policy against the risk or likelihood that your love ones (beneficiaries) could not receive the amount (face value) of the your policy should you die within the “Contestability Period” if there was misrepresentation(s), intentionally or not intentionally during the application process.

The post August 2020 – THE RISK OF REPLACING YOUR INSURANCE POLICY appeared first on Debt Clinic of Canada INC..

An example of financial problem that could be avoided is financial mismanagement. That is where a person has good paying job, where his/her take home pay is more than enough to pay his/her basic needs like: food, shelter, clothing, education for children and miscellaneous expenses.

Financial mismanagement is the consequence, of not making a family monthly budget where family expenses should be itemized with a corresponding amount for each expense. Aside from the basic needs above mentioned, include in the budget, vacation and recreation.

Any surplus income should be saved (force saving) in a separate interest-bearing bank account as reserve for “rainy days” so to speak. That is when you are laid off  or get sick. Those two are examples of causes of financial problems where you have no control.

Another financial problem that could be avoided is when you have a legal dispute. Going to the court of law to resolve a dispute should be the last resort. Why? because of the following reasons: 

First, legal fees are expensive. When you hire a lawyer or paralegal to represent you in court, it would be expensive for the resolution of the case takes time. Every time a hearing is postponed and your lawyer or paralegal appeared in court, you have to pay him/her for the time spent.

Second, the resolution of the case takes time for the courts are loaded with so many cases. Some time it takes years for a judge to render a decision to resolve a case. 

Further, every time there is a hearing in most cases your presence is required. When it happens you need to be absent from your work if you are still working.

Third, though you may think that you have more than 50% chance of winning the case, there is no guarantee that a judge would decide the case in your favor.

Fourth, your relationship with the person you have a dispute would become worse from bad. It is sad, especially if the person is a relative or a friend. 

Considering the above, the writer believes that the best alternative, instead of going to court, (which is expensive and time consuming) is to settle the dispute between you and the opposite party, through an impartial mediator, that both you and the opposite party agree. 

That person might be a common friend of the opposing parties

In the process of negotiation to resolve the dispute outside of court, both parties should not be firmed, but flexible on what he/she demands for the settlement of the dispute. 

Since going to court has no assurance you can get what you want, for it is a judge to decide base on your evidence presented, both parties should be negotiating in good faith, willing to give and take to settle the dispute. 

In settling a dispute outside of court, both parties would save money and time in going to court. Therefore, going to court to settle a dispute should be the last resort.

The post July 2020 – WHEN YOU HAVE A DISPUTE GOING TO COURT SHOULD BE THE LAST RESORT appeared first on Debt Clinic of Canada INC..

The question is why? Hereunder are some of the reasons:

First – Lack of business acumen. Not everyone has a capital to invest in business is a businessman or businesswoman. To succeed in any field of endeavor needs special gift or talent on said specific field. Example: if a person wants to be a successful singer, that person must have a special gift of singing. If a person wants to be a successful boxer, that person must have a special gift in boxing.

Similarly, if someone wants to be a successful businessperson, he/she must have a special talent or ability (business acumen) to operate a business successfully. In fact, in the book of Dr. Napoleon Hill, “Think and Grow Rich”, of the 36 causes of business failure, lack of capital is at the last. 

Meaning, business capital is not a problem for if a person has a special talent or gift of running a business, initial business capital is easy to secure for banks and other financial institutions would be happy to grant a business capital loan by submitting a realistic business plan. Accordingly, not everyone can successfully operate a business despite having capital.

Second – No proper accounting. Though a person has a talent or gift to operate a business, he/she needs proper accounting records to guide him/her making wise business decisions to make a business profitable. 

Third – Lack of Internal Control Procedure. This is essential especially if a business is entrusted to some one (relative or close friend). Internal Control procedure includes: a surprise audit, especially for cash on hand, bank deposit and inventory of products/items sold. Without a surprise audit, could encourage or tempt a person you entrusted to misappropriate or use the money for purposes other than for the business operation. Actually, the Bible says, “…money is the root of all evils” (1Tim. 6:10), and 

Fourth – No Manual of Operation that includes policies like: purchase of inventory, mark up or the percentage you add to the cost of product or service you are selling to customers, authorize expenditures and specific duties and responsibilities of the person you authorize to manage the business. 

In addition to the above, even if you can avoid all the reasons of not succeeding your business in the Philippines while you are here in Canada, another challenge is the distance. It is almost impossible to implement properly your Business Manual of Operation to make your business a success.

With the foregoing, unless you can overcome the above reasons why most businesses do not succeed in the Philippines, managed by relatives or friends, the writer believes, it is not wise to operate a business in the Philippines manage by relatives or friends.

The post June 2020 – IS IT WISE TO OPERATE A BUSINESS IN THE PHILIIPPES MANAGE BY RELATIVES OR FRIENDS? appeared first on Debt Clinic of Canada INC..