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Actual Cash Value vs. Replacement Cost – Which Is Best for You?

When it comes to homeowners, renters, or property insurance, you’ve got a lot of choices to make. How much coverage do you need? What deductible can you afford? Which possessions or parts of the property need covered? One of the biggest choices is one that very few insurance buyers understand: actual cash value versus replacement cost.

Here, we’ll explain the differences between these two options, and when you might need to use each one.

What is Actual Cash Value?

Let’s start with actual cash value, which seems like the more intuitive option of the two. As you might guess, actual cash value is often defined as the “fair market value” of the property you’re insuring. It’s not what you originally paid for the item.

So if you’re insuring a car, for instance, its actual cash value could be much lower than what you paid for it or even owe on it. (This is why gap insurance comes in so helpful with financed vehicles.) But on property that tends to appreciate–increase in value–the actual cash value could be more than you originally paid. This is more likely to happen with something like a home or an antique piece of furniture.

However, the International Risk Management Institute notes that actual cash value can be calculated differently depending on legislation and case history in your state. For instance, in California, a court ruling said that the term “actual cash value” means fair market value. So this is what you could have sold your home for under current market conditions, usually excluding the cost of the lot your home sits on.

How is Actual Cash Value Calculated?

With all that said, calculating actual cash value can get complicated. Value is subjective. However, insurers often use something called the broad evidence rule to measure actual cash value. This means insurers look at things like the home’s replacement costs, the age of the property, the profit you may have made from the property, and the property’s tax value.

Typically, if your insurance policy states that it will use “actual cash value” or “market value” in your policy, that’s what it means. However, some insurance policies define the limit as replacement costs minus depreciation. So that’s what it would take to rebuild your home, minus depreciation that would have occurred over time. Also, the value of the land your home sits on probably doesn’t count towards the calculation.

The key here is to figure out exactly how your insurance policy defines actual cash value, preferably before you choose that particular policy.

What is Replacement Cost?

What if your insurance policy calls for replacement costs? In this case, you’re insured for up to the amount that it would cost to completely rebuild a very similar home. Or, if you’re insuring personal property, replacement cost is what it would cost you to purchase the same item new.

Typically, an insurance company will write a replacement cost policy strictly. For instance, when you’re rebuilding your new kitchen, you don’t get to upgrade from laminate to granite countertops and have your insurance company eat the difference.

There are a couple of things to keep in mind with replacement cost calculations, particularly for homeowners insurance:

1. Market value vs. rebuilding value: Your home may cost more or less to rebuild from scratch than it would cost on the market. So this will be taken into account in the policy.
2. Cost of the land: Even if the worst should happen, you still wouldn’t have to re-buy the land your home sits on. This can mean replacement costs are significantly lower than cash value. Also, the builders may be able to reuse the home’s foundation, which also cuts down on costs.
3. Age of the home: Older homes can be more expensive to insure through replacement costs because it could get very expensive to replace that hand-milled woodwork and hardwood flooring. Keep this in mind if you have a historic home.

Either Option Comes with More Options

Many homeowners insurance policies include a cap. So you can insure your home for replacement costs up to a certain dollar limit. However, insurers often offer additional options to consider, including:

• Guaranteed Rebuild: This is like a replacement cost insurance policy, except without the cap. Whatever it costs to rebuild your home with similar materials and types of construction, the insurance company will pay in the event of a total loss. Since they could be more expensive for insurers, these policies are more expensive.
• Replacement Cost: With this traditional replacement cost option, you’ll work with your agent to basically guess your home’s replacement cost. If you’re wrong and it costs more to replace the home than your policy covers, you’re on the hook for the rest.
• Actual Cash Value: As noted above, some insurers differentiate this from market value, using instead its replacement costs less depreciation. But your insurance policy should define this.
• Market Value: This is what someone would pay for your home on today’s market. Again, you’ll typically work with your insurance agent to set a cap on this type of insurance.

So Which is Best for You?

As with most questions in personal finance, the answer is that it depends.

For the majority of homeowners, a replacement cost policy will be best. You want to know for sure that you could rebuild your home should the worst happen. With that said, if you have an older home, a replacement cost policy could get very expensive.

This type of policy simply won’t allow you to replace hand-carved oak paneling with cheap stuff from the hardware store, for instance. And you’d have to pay a lot more for labor to work with your higher-quality or old-fashioned materials, too.

So if you have an older home, you might opt for a market value policy, which will be more affordable. If your home burned down, you wouldn’t be able to replace it just like it is now. But you’d also not have to pay through the nose for insurance coverage.

On a personal note, my husband and I made that very decision a few years ago when we moved into our home, which was built in 1900. A replacement cost policy would have been well outside of our budget. So we opted for a cash value policy with a generous limit. If our home burned down, we’d probably just sell the lot and buy another home in our reasonably-affordable neighborhood.

That won’t be the right decision for everyone. And if you can afford it, a guaranteed rebuild type policy for an older home is great. But if it’s outside your budget, some coverage is always better than none.

You’ll also need to take into account your mortgage lender’s requirements. Lenders nearly always require that you carry homeowners insurance on a mortgaged property. But their specific requirements vary. You may find that lenders require the property to be insured for at least the amount of the mortgage. Your lender may be stricter, though. For instance, your lender could require that you get a replacement cost policy.

A Note About Personal Property Coverage

Actual cash value, market value, and replacement cost all apply to personal property insurance coverage, too. They apply to the personal property coverage that’s likely built into your homeowner’s policy, as well. And since a renters insurance policy is essentially a personal property policy, it applies here, too.

Again, the key is to know what your insurance company means, and then to decide which option is best for your needs.

Are you a low-budget college student who just needs basic renters insurance? An actual cash value policy could be super cheap. It doesn’t give you the ability to replace everything new if something happens. But at least you’d have some cash to shop garage sales and Craigslist to refurnish your home and get the basics.

If you can afford a replacement cost policy for your personal property, it could make your life much easier. Just think about things like your couch. So you have a leather couch you got secondhand for $1,000 on Craigslist?

If a tree falls through your roof and ruins the couch, do you really want to have to shop around forever to find a new-to-you one? Or do you just want to take $2,000 from the insurance company to buy a similar couch brand new?

When it comes down to it, most property insurance is pretty cheap. So it’s best to just spring for replacement cost coverage and be done with it. If your policy would be too expensive because of a specific item, like heirloom jewelry or artwork, consider adding a separate rider for those particular items.

Topics: Insurance

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When Does Frugality Turn Into Cheapness?

Imagine you’re walking down an abandoned street with no-one in sight. Enjoying the beautiful and peaceful day, you spot a penny on the ground. Would you pick up the penny and put it in your pocket? What if that penny was a nickel, a dime, a quarter? Play this mental game all the way up to Ben Franklin’s smiling face on a $100 bill. At what point would you pick up the free money at your feet?

Now imagine the same scenario, but let’s morph the abandoned street into 5^th Avenue in Manhattan. I’m willing to bet your “pick up the money” threshold will be different in this scenario. This is because bending over to pick up some pocket change in private is one thing, but doing the same in public could be embarrassing.

But no matter when you decide to pick them up, do these actions count as being cheap or being frugal?

Frugality and cheapness have long gone hand and hand and the line that separates the two is unclear. You probably have a friend or family member who saves wrapping paper to reuse. Or maybe you know someone who saves the condiments and utensils from fast food restaurants to use at picnics. Do these people count as frugal or just plain cheap?

I suppose the answer depends on their financial situation, but even that might make the answer more complicated. A millionaire who saves wrapping paper is almost certainly cheap. But we’d probably classify a single mother of three working two jobs as frugal for taking the same actions. So perhaps the definition changes depending on circumstances.

It’s common for personal finance bloggers to define any action that saves a little money as frugality. But I don’t think that’s accurate.

Sure, spending 10 minutes online to find a coupon code for your next purchase makes sense. but should you spend all day finding the same coupon? That might cross the line into being cheap.

Why am I concerned about this? Because the ultimate goal of saving money isn’t to save as much as possible by whatever means possible. The goal of being wise with your money is to enjoy your life more. You can be frugal and enjoy life. But once you cross that line to cheapness, you start enjoying your life less and less. Then what’s the point?

When Does Frugality Turn Into Being Cheap?

When you have money budgeted but refuse to spend it – For the last six months, I’ve been squirreling away money. In September, during the Labor Day sales season, I plan to go shopping for a much-needed snowblower.  Every winter, I spend 6-8 hours shoveling snow every single time it snows six inches or more. Beyond the time wasted, it’s backbreaking work. Every year, I promise myself I’m getting a snowblower. Then November rolls around and I say “Ahhh, I’ll save the money and just shovel it.” Mistake.

My livelihood (and health) are much more important than the $800 or so I stand to save by not buying a snowblower. After bending over and picking up that heavy snow a thousand times, my back does me no favors. Admittedly, I’ve been cheap trying to avoid this much-needed purchase. So this year, I’m sticking to my guns and buying a good snowblower.

Using your valuable time to save pennies on the dollar – Back to the snowblower example. In 2013 and 2014, the winters in Connecticut were bad. Very bad. One snowstorm actually dropped 38 inches on our house, and we were literally snowed in for a week. In totality, it took me two eight hour days to be able to dig a simple path from our house to civilization. It took me another three hours to clear the driveway well enough to get a car out. That single storm alone set me back 40 man hours. Had I owned a quality snowblower, I probably could have done the job in half that.

I lost 20 hours of my life that I could have spent doing something else. Not smart considering I can make good money working. Or I could have just spend time relaxing and spending quality time with my family. Divide the cost of a snowblower by the time I could have saved in those two years, and my hard-won time was worth about three bucks an hour.

Sacrificing quality – In my opinion, this is the most detrimental decision people make when debating frugality versus cheapness. When you own products that are not working properly, are unsafe, are a health hazard etc. and and are necessities, life can get dangerous. A car that leaks oil, a toilet that leaks water… These are just a few examples of things that you can let go by and rationalize, saying, “I don’t need to fix that right now.”

Often times, these kinds of fixes will only lead to bigger, more expensive fixes. So the justification may be to let them slide, but that would be unwise. If you can find a way to save and pay for these expenses, do it. Spending a little bit early on the products and dwellings you depend on goes a long way towards saving big money later on.

Are You Frugal?

The bottom line is that for me, frugality is the act of saving money when money I have to spend some money or significant time. Shopping online using rebates or coupon codes is a perfect example, as is buying the grocery items on sale. You cross the line of frugality when your opportunity cost or future cost outweighs any gains you might save.

Take a few minutes before any purchase and think about how you might be able to save money without sacrificing time or quality. Online coupons, using a cash back credit card, or waiting for discounted prices is a great place to start.

Topics: Smart Spending

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5 Benefits of Cold Showers

Content originally published and Shared from http://perfectbath.com

Showering is an essential part of a healthy routine, but depending on the temperature, your time spent under the water can offer different benefits for your skin and some bodily functions too. Learn about the surprising health benefits of a taking a cold shower in this article.

Image Source: Flickr

Increase Alertness
Taking a cold shower in the morning, and feeling cold water pour down over our body seems more horrifying than soothing. However, the deep breathing in response to our body’s shock helps us keep warm, as it’s increases our overall oxygen intake. Thus, our heart rate will also increase, releasing a rush of blood through our entire body. This gives us a natural dose of energy for the day. Source: MedicalDaily

Stimulate Weight Loss
Another way cold showers will make you look better, is by promoting fat loss.

Most people don’t know this, but there are two types of fat in your body. Brown fat & white fat. White fat is bad. It’s the body fat that we all hate so much. Brown fat is good. It’s function is to generate heat and keep your body warm.

When you take a cold shower, brown fat is activated, resulting in an increase in energy and calories burned to keep your body warm. So much so that according to this study, cold temperatures can increase brown fat by 15X the normal amount, which can result in 9 pounds of weight loss per year. Source: Menprovement

Refine Hair and Skin
If you’d like to reduce the appearance of acne, cold showers could do the job. Hot water dries out your skin, while cold water tightens your cuticles and pores, preventing them from getting clogged. You can also use cold showers for shinier, more attractive hair that your partner can’t resist playing with. Cold water will close your cuticle, making it less likely dirt can accumulate in your scalp. Source: Lifehack

Build Strong Will Power
The next day was more of the same, but I noticed I had more apprehension this time around before hopping in the shower. This trend continued throughout the following mornings as well. If I knew how great it made me feel, then why didn’t I eagerly throw myself underneath the icy spray? The experience reminded me of a famous old saying, one that has been attributed to a bunch of authors: “I don’t enjoy writing. I enjoy having written.” I don’t like taking cold showers, I just like the way they make me feel after I’ve already dried off.

The week has been a success, and I’ve assured myself that I will keep taking cold showers in the mornings. However, it won’t be easy. I mean, have you taken a hot shower? It’s the best.  Source: Prevention

Strengthen Immunity
According to a study done in 1993 by the Thrombosis Research Institute in England, individuals who took daily cold showers saw an increase in the number of virus fighting white blood cells compared to individuals who took hot showers. Researchers believe that the increased metabolic rate, which results from the body’s attempt to warm itself up, activates the immune system and releases more white blood cells in response. Source: Artofmanliness

 

Contact:
Perfect Bath
Phone: Toll Free 1-866-843-1641
Calgary, Alberta
Email: info@perfectbath.com

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3 Window Treatment Ideas for Tall Windows

Beautiful large windows have huge advantages including lots of natural light and the ability to admire inspiring views from the comfort of your sofa. However, you might be wondering how you going to furnish these gorgeous windows.  Check out these 3 window treatment ideas for tall windows:

Image Source: Flickr

Drapery
Drapery, the most traditional choice for tall windows, makes your room feel dramatic and regal.

When choosing drapery, keep in mind the scale of the room. A 2-inch diameter curtain rod will become lost on top of a 15-foot-tall window, so use bigger drapery hardware and larger pleats for your drapes so you can see the grand effect.

Personalize the drapery to match your home style by using tiebacks, patterns or valances.

Layer different materials to add interest and dimension to your drapery. You can also include different colors to match your home decor. Source: Angieslist

Roman Shades
If you need multiple roman shades to fill a wide wall of windows, make sure you choose a pattern that allows you to stack each shade next to each other so it feels like one long shade. When there are no breaks in between each shade, your window looks streamlined.

Tip: Don’t forget to hang them higher than the windows if your windows are low. When measuring the height you need for the shades, be sure to include the extra material to cover the gap between ceiling and top of the window. Source: Houzz

Top down / Bottom up Cellular
Cellular shades are a clean and modern look to consider as a tall window treatment idea.  Their energy efficiency is perfect when the midday sun is streaming through your tall windows, keeping you cool inside.  What is most amazing about cellular shades is that they are available in a top down/bottom up feature.  The top and bottom of your shade move independently, giving you precise command of how much light is flowing into your home, preserving privacy without sacrificing natural light. Source: BlindsGalore

 

Contact:
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601 – 1550 W. 10th Ave
Vancouver, V6J 1Z9
Canada
Phone: (604) 559-1988

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Market Update from Invis – Team RRP – August 2017

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How to Prepare for a Bear Market – An Interview with Paul Merriman

We welcome Paul Merriman back to the show. Today we talk about how handle a bear market. How can we stick to our investment plan when our portfolios drop by 20% or more?

Paul brings his experience and wisdom to this important issue. We discuss everything from defensive moves you can take to whether the market is over-valued.

Topics Covered

• Paul’s recent meeting with Vanguard founder John Bogle
• Whether one should diversify beyond the S&P 500
• The role luck plays in a person’s success
• Should investors wait to invest until the market comes down?
• What it means to be a long term investor
• Paul’s retirement portfolio
• How to defend against a bear market
• How to invest a large sum of money
• The role PE ratios play in valuing the market
• How to stick to your investment plan when the market drops
• How to invest 5 years before retirement

Resources

• Paul Merriman
• Paul’s Ultimate Buy and Hold Strategy
• 2017 Update: Fine-Tuning Your Asset Allocations
• 22 Things You Should Know About Bear Markets
• How to Learn from the Stock Market Crash of 1929
• 3 Reasons to Cheer a Stock Market Crash

Podcast

Transcript

Rob: Paul, welcome back to the show.

Paul: Well, it’s great to be back, Rob. Thanks for the invitation.

Rob: How is your summer going?

Paul: It’s been a fantastic summer. I did a little traveling. My wife and I attended this amazing relationship workshop over a weekend. It drives her nuts but while I’m sitting there listening to the experts talk about relationships I’m making notes about how that applies to investing. I learned about love and finance all in one weekend.

Rob: Your poor wife. We feel for her already.

Paul: She survives. And, of course, I had that amazing trip. I mean it was truly one of the highlights of my whole professional life—that meeting with Jack Bogle in his office surrounded by teddy bears and books and what a guy he is. It’s just amazing what he’s done for your listeners and readers and my listeners and readers. He’s a hero.

Rob: How did meeting come about?

Paul: I’ve wanted to do it for a long time and he’s invited me to come back and have lunch with him but as it worked out I called him and said I was going to be on the east coast, and he has this lady, Emily, who has worked for him for 27 years. She adores him. And I think he adores her. She’s a marvelous assistant but she basically set the meeting up. It was supposed to be for 60 minutes but he was kind enough—he could see I had more on my list of things I wanted to talk about and he let me get through everything.

Rob: So are there any nuggets of wisdom or things you’d like to share about with your conversation with Mr. Bogle?

Paul: Yeah, I think there were a number of things that struck me as being important to all investors. Part of what made Jack Bogle—at least from my view, to become so successful is he’s tenacious. He’s passionate. He really believes and lives his own life the way he feels people should invest in terms of his attitude towards money and thrift and frugality and all the things that have made him famous. But the other part that we shouldn’t forget– and I didn’t really understand this until I was in that meeting is how lucky that man was because as I think you know that attempt to start that fund the S&P 500 almost failed. It was a $250 million Dean Witter underwriting that was supposed to start the fund.

They raised $11 million and there were people who wanted to simply return the money to the investors and just forget about it. But Jack was tenacious I think and having spent a little time with him I can imagine what it would be like to have him at the director’s table making his plea to him continue. But then think about this, if you wanted to have fun to sell imagine being able to sell a fund that had the first 25 years of track record that is between 16 and 17 percent compound rate of return. How difficult would that be to sell? And what if I told you that this fund was not only compounded at those returns but that they represented the most conservative, biggest, established companies in the economy? That’s luck because what if he had started that fund in 2000? And from 2000 to 2009 it loses money at one percent a year. How famous would he be if that had been the beginning? And there’s one other thing that struck me because you and I have learned from not only Jack Bogle and Paul Samuelson—and, by the way Paul Samuelson was his kind of hero academically. He based a lot of what he wanted to do it Vanguard based on what Paul Samuelson had had written in his work. You and I look at Dr. Fama and Dr. French and a lot of other experts’ academics who have brought a ton of information to us but he is still stuck. Now, when I when I say stuck I don’t mean unfortunately stuck. But, his commitment is to the information he received and believed back in the ’70s so he’s not really open to Fama and French’s work and the others who have come since. So he is just this firm believer that, basically, you need the S&P 500, maybe the total market index. And, if you’ve got any small-cap in your portfolio three percent is plenty, or whatever the amount is in the total market index. I understand better than I ever did before why he is such an advocate of basically the S&P 500. You and I are trying to get people to look beyond that to diversify beyond that. But that’s his belief system and that’s important in the decisions we all make as investors.

Rob: Right. And in that sense he shares that belief with Warren Buffett who, obviously, buys companies in individual stocks. I mean, what he said about how he wants his wife’s money invested, he just views it as S&P 500. It’s a perspective. One thing you said that really struck me was his view of the role luck played in his success because I’ve come to believe that anyone who attains some level of success, luck is a significant part of it. It doesn’t mean they’re not hard-working. It doesn’t mean they didn’t hustle. It doesn’t mean that in their field they’re not smart. I think it’s actually a sign of positive character. Someone who acknowledges the role that luck played in their success. I know Warren Buffett acknowledges the role that luck played in his success, for example.

Paul: But he was prepared, I think. And I think both of these guys—

Rob: Yeah, but he said, “If I were born in a different time my skill set wouldn’t have been fairy valuable.”

Paul: And he’s right.

Rob: Do you think luck played any role in your success?

Paul: Yes, of course. Although I think I worked hard to try to create opportunities for good fortune. Getting publicity and getting on a national T.V. show—They actually had turned me down probably a dozen times— Wall Street Week did, over the years, as just not fitting in their audience. I’ve always been a little bit of, too much hype. I might be accused of being too much salesmen and not enough academics. I probably came across as somebody who was a bit of a suede-shoe salesperson and they didn’t want that. Then one day they wanted that. It came out of a meeting that they were having. Whatever happened in that meeting, after saying no to me a dozen times, they asked me to come on. That had to happen. Something had to happen in that room that my name came up and that I would fit what they were trying to do with that show. I would call that luck, but it had to come with a lot of effort to get it.

Rob: Sure.

Paul: What about you?

Rob: They say, the harder you work, the luckier you get. Take my business for example. I feel very fortunate to have what I have in terms of the website and everything. I worked very, very, hard and still do. But yeah, there’s no question that luck played a role. Probably one of the luckiest things was timing. If I had started my blog—it wasn’t a business when I started it. It was more of a hobby when I started 10 years ago in May of 2007. But, if I had started it two years ago, I could have worked just as hard as I did 10 years ago and I don’t think I would have achieved the reach that I have. The Internet has changed dramatically in 10 years. I absolutely feel that luck has played a big role. And it’s played a big role in my legal career too. I got very, very, lucky that I ended up working for the law firm that I worked with, and more specifically, the partners that I worked for when I was a young associate. That played a huge role in my success there. Yeah, I think luck has definitely played a big role.

Paul: I talk to a lot of young people. I teach college kids and one of the points I make—and I think Buffett talks about this too, and that is the importance of integrity. If you can build people’s trust you do not have to be a genius. You need to know what you’re doing. But, if you can build people’s trust it is amazing how lucky you will get. I think that is the key to long-term success particularly in this business because there are a lot of people who we know are not trustworthy. They sound trustworthy but we know by their deeds that they aren’t. They’ll get caught eventually. And I think if you can stay on the straight and narrow most people know we can’t tell the future. We do the best we can in getting people to prepare for the future, but we can’t know the future, and yet at some level they want us to know the future and so they put trust that we’re doing the best that we can for them. At least that’s what I hope.

Rob: Yeah, me too. And speaking of the future, the topic for today is bear markets. How do people prepare for a bear markets? Should they prepare for a bear market? And when we have one, how do we ride it out? How do we stick to our investment plan? I suppose one could ask, should we stick to our investment plan? I thought the way we might start, Paul, if it’s okay with you, I get a lot of questions from folks either in the Facebook group or in an email to me that say something like, “The market seems very overvalued right now and I have some money to invest. Should I invest now or should I hold it and wait until sometime in the future?” And just for a point of reference, I’m looking at the Shiller PE ratio right now. The current ratio is about 30—just over 30. Going back—I don’t know how far this goes back. I know because back to at least 1920. But the average is between 16 and 17. But today it stands at 30. So, let me throw this question to you first. If someone has money to invest right now—let’s assume they’re going to follow some low-cost index fund strategy, whether it’s your ultimate buy-and-hold or maybe something different. Should they do it now or should they wait? What do you think?

Paul: I think if you are going to be a long-term successful investor, you’re going to do that based on some discipline. There are a number of disciplines that have historically made sense. Let’s just take the dollar cost averaging approach which probably most of the listeners who are in a 401k plan, that’s what they’ve got if they allow that to happen. And you’ve got to remember that the same concern folks have right now is the market is overvalued. I’ve been there when the PE ratios were six and seven times earnings in the ‘70’s. Guess what people said? The market is overvalued and it’s going down further. So this is a lifetime challenge for investors to find a discipline that they will maintain. If their discipline is buy-and-hold and if their discipline is dollar cost averaging then from my viewpoint that’s what they should do, and to the extent that they don’t have the stomach for the natural losses that are part of the process of investing, they need to have some sort of defense built into their portfolio that neutralizes the losses somewhat when the going gets really tough, because bear markets are just part of the process. There is one every three or four years over the last 100 years taking away about 30 to 35 percent of the value of one’s portfolio. That ought to scare the heck out of anybody who has a low risk tolerance.

Rob: It scares me, kind of. You said a lot there. I want to break it down for people. You mentioned long-term investors. So we are talking about long-term investing, but what does that mean to you? Is there some sort of number of years one should plan to keep their money in the market before they buy a stock index fund? What is long-term investing to you?

Paul: Well, for me it is pretty simple. It’s the rest of my life. I think the key is, when you’re thinking in terms of the rest of your life, how will you change your portfolio during those years, however long that life is? Now, if we want to go into a discussion you might have with a financial planner, they would say, “Okay, let’s look at the money you’re going to need for the next five years.” That’s often a position they’ll take. And they’ll tell you that if you need the money within the next five years you should not have that at risk at all. This could include maybe a child’s educational funding which should be in some sort of a short-term fixed income instrument, so five years is kind of a traditional starting point. But I’m thinking, if you’re an investor you should be looking out 10, 20 or 30 years when we’re talking long-term remembering that for a 10- year period as we know from 2000 through 2009 the S&P 500 loses money. It loses about one percent a year for a decade, so if you’re not willing to kind of live through that, you’re not likely to be a successful investor.

Rob: That’s an interesting data point. I use five years when people ask me. If you’re going to need the money for something in the next five years whether you want to buy a home, or like you said, a child’s education fund, or maybe you’re in retirement and you just need to spend the money to live. I tend to keep it out of the stock market for that period. But you are right. You certainly could have a down market over longer that. There is no magic to five years. You could have a down market for longer than that. It’s interesting, in the 2000, 2009 time period you mentioned, if you could imagine two different investors; one is someone who’s working and contributing to their 401k and IRA. Maybe taxable accounts every month or whatever. And then compare that person from the 2000, 2009 period to retiree who’s living off their investments and not investing any more money in the market. They’re going to experience two very different returns over that time period because the person who’s investing is going to be putting money in when the market’s down during that time period. Of course it didn’t just gradually go down one percent. It went up and went down, it went up. And, of course, it crashed in ’08, ’09 and went back up again. I think when you start to get to the retirement years where you’re really living off the money, I’m not sure what I’ll do when I get there in terms of how many years of expenses I’ll keep out of the market. Do you think that way in terms of your own finances? Do you have certain number of years worth of expenses that you keep out of stocks? Or do you not think of it that way?

Paul: Well, in our portfolio, in the buy-and-hold portion we’re 50/50 stocks and bonds. So, in essence, since we take out five percent a year to live on, we’ve got 10 years worth of money in bonds right now. They are short to intermediate bonds so I’m not taking any risk. That’s the stabilizing part of my portfolio. I’m not looking to bonds for income but for stability. But, I don’t let those bonds just sit there and support that five percent distribution. The distributions come out of a portfolio—the equities are sold off as they go up and that’s rebalanced periodically back to that 50/50. Because the market does mostly go up over time, I keep siphoning off the good stuff to put with the stable stuff and to be there for the long-term. Here’s where it becomes a challenge to investors to do that. That’s easy to do when you’re retired and you’re making money in the market to rebalance and take money out of equities to reward yourself for having been so smart. What happens when the market goes down? Now, in order to rebalance you need to take money out of your bonds and put that money into stocks—Wait a minute… I can remember as an advisor people saying, “Are you sure? I mean, we’ve been we’ve been doing well with the bonds and the stocks I’ve been paying.” And I’d say, “Trust me, this is the way it’s supposed to work.” You take from the rich and give to the poor. You keep rebalancing. Take advantage of those lower prices. And they say, “Okay, okay. We trust you (we think).” And the next year you get back for a meeting and the market has gone down again, and you’re telling them again that it’s time to rebalance. They say, “Are you crazy? That’s what you told us a year ago and we lost more money!” It’s not as easy as it looks for people to do that. This whole idea of buckets of money where you take money out of the fixed-income and just ignore the equities—for some people that may just be the way to do it.

Rob: Right, right. That’s interesting. Certainly, I’ve invested long enough to know there were times when the equities didn’t seem like they could fall and they just kept falling and falling and falling. Yeah, it is hard. No question. One thing you said a few minutes ago, speaking of a falling market, is that you used the term you could add some sort of “defensive element” to a portfolio. What did you mean by that?

Paul: There are a couple of defensive elements. We were talking about the 2000 through 2009 period. The S&P 500 had a horrible return. And, by the way, yes, it was wiped out badly in the 2007 through 2009 bear market but it did that in the 2000 through 2002 bear market as well with almost the same losses, over 50 percent on the S&P 500. So, one thing we know over that period and many others is that when you defensively spread your money amongst not only the U.S. but International, not only large-cap but small-cap, not only growth but value—when you look at that same 2000 through 2009 period, what had been less productive in the previous 10 years because the S&P had been so amazing—in the 10 years the S&P faltered, these other things did okay. In fact, some of them compounded it better than 10 percent a year. That’s one defense.

Rob: Diversification.

Paul: Diversification. Then to diversify away from equities by having fixed-income and also, I think probably the best defense of all—and I would not retire. I’m still working but without pay, but I refused to stop making money and putting it away until I had over twice what I needed to retire. To me, that has always been the thing that really has allowed me to sleep easier. It meant that I kept working a lot longer than a lot of other people in this industry who can get burned-out because it’s an industry that when you’re in the trenches and the market’s going down, it’s a tough business to be in. When it goes down twice in a 10-year period, it’s double trouble. I just stuck to it until I had more than I needed which allowed the market then to do its terrible things without making my life terrible.

Rob: Paul, I’m smiling while you say all this because I imagine the listeners of this show right now. They’re in their car going to work. They’ve got their Starbucks and they took a big drink of coffee right when you said they should save twice as much as they need to retire and they just spit the coffee out all over the dash and windshield. Of course, not everyone can do that, but certainly—

Paul: Well now, wait a minute. I want to challenge that because I want them to take another gulp here. It isn’t all about how much you save. That’s obviously important but everything that happens after you save, if you do the right things— and these are all things that you and I would agree with I believe, index funds, low-cost, broad diversification. Maybe more in equities than you’re comfortable with when you’re young because you have some fear of the market. The two of us would probably tell a 20 some year old to be all in equities. Take the risk of bear markets when you’re young and take advantage of bear markets. There are things you can do that can get you to that point of having over-saved. The last thing you can do is establish a lifestyle that allows you to be able to have doubled what (in essence) you need. My wife and I have a home down in San Miguel de Allende, Mexico. I know lots of people down there who basically are living off of Social Security. And for them to have twice as much as they need might be a $250,000 to $500,000 savings plan, whereas somebody else might require $10 million. So it can be done almost at every level but you’ve got to be smart and you’ve got to really work hard to cover every defensive base you can.

Rob: Right. I guess I would add to it and maybe this goes without saying, but for me one of the biggest, most significant defensive measures (if you will) is, no debt. And I recognize that younger families who are going to buy a home are going to have some debt, but by the time you retire if you don’t have any debt it gives you great flexibility in what you spend from year-to-year. Obviously, you’ve got to survive but beyond that, debt takes away your options and it increases what you need on a monthly basis which makes saving twice what you need—and I’m going to call that the Paul Merriman strategy, all the harder.

Paul: I’ve got a question for you.

Rob: Okay.

Paul: There’s one other thing I think is really important here. How important do you think it is that your spouse agrees with whatever strategy you have toward saving, investing and creating in a lifestyle that in fact allows you to live within whatever those parameters are? How important do you think that is, Rob?

Rob: That’s critical. That’s a good point because I get emails from folks that say, “Yeah, I’m with you Rob, but my significant other—we don’t see eye-to-eye.” In my case, my wife and I have very, very, similar views of money. We’ve been married 29 years now, in a couple of weeks—I’ve got to get a gift! I have nothing for her at this point. But, I didn’t ask her about money. I didn’t know her credit score. I didn’t know if she had debt or not or if she was frugal or spent money differently than I did. In fact, the truth is, when we got married I was far worse with money than she was. I changed after I got out of law school. I’m not really sure why. I guess I felt like it was time to grow up but, yeah, if you don’t see eye-to-eye, it’s something you’ve got to work on. We all know that money is one of the most leading causes of divorce and just general trouble in a relationship. To me it’s critical. What do you think, Paul?

Paul: I think so. Unfortunately, life has not been easy for me always, Rob. I’ve been married four times. I hate to admit that but that’s given me a ton of experience that I would not otherwise have in terms of dealing with money. You talk about wanting to pay off the mortgage. Every time I got married one of my first objectives was to pay off the mortgage. And when you’ve got to do that four times it’s hard. You’ve got to work a lot of long hours. But, I will tell you, one of the problems was that we did not have agreements on some of those financial decisions. The other thing that causes problems is when somebody that is a workaholic. I’m not accusing you of this but I’ve spent a lifetime of working way more hours than I should have. Was that driving me to save more money? Was I kind of digging my own hole by focusing too much on money? I try to counsel young people to find a balance. I didn’t until I was in my 60s. Everybody’s got a story which, but the way, Rob, is why I think most people need to find an advisor to work with. If for only a year—if for only three months, to kind of work through those stories to find out what makes you special as an investor.

Rob: Well, I feel very fortunate in the sense that my wife and I have seen eye-to-eye. By the way, and this will have already been published by the time folks listen to our discussion today but I met with two different advisors. Both of whom were guests on my show. They were both very different in their approach to helping people. And I found the experience in both cases to be very rewarding. I learned a lot. Not so much from a portfolio construction perspective but a lot of interesting guidance particularly on tax issues for me that I think will benefit my wife and I significantly. So, whether you have someone manage your investments is one thing, I do agree. I think a lot of people can benefit from talking to an advisor (as you say) even if it’s just for a short period of time. I couldn’t agree more.

You mentioned the Shiller PE ratio. It stands at 30. I’m looking at this chart that they have on the website. And if I’m reading it correctly there’s only been one period in our history going back to 1880 where the Shiller PE ratio was higher than it is today. If we go back to 1929, it was basically the same as it is today, around 30. The only time it was higher was in December of 1999. It was 44. There was some period of time where it was going up to that point, of course, and coming down. But it hit its peak there in December of 1999. So it’s 30 today. Do you find that a meaningful data point in assessing whether the market is overvalued? Or, regardless of your answer to that question, whether it should influence the way we invest?

Paul: I have dealt with that when I’ve talked to people who have lump-sum investments to make. Oftentimes those people do not have a history of investing. This is something that’s happened—maybe they have inherited money or maybe they’ve gotten a big rollover from a pension fund that now they have responsibility to put to work. Those people I often recommend they dollar-cost average into the market. And I would do that regardless of whether the market was high or low, only because even low markets can go lower.

The worst thing that can happen to an investor is to have them dump a bunch of money in the market and immediately it goes down 30 percent. They have likely been ruined for life as an investor because of the pain of seeing that money evaporate. To see that lost, they just can’t trust the market anymore. So, dollar-cost averaging is an emotional answer for people who could otherwise lump-sum, because the industry says, “Put it all in. Whenever you’ve got it, put it in.”

So then there’s the question about whether a young person who doesn’t have a lot of money second guess the market and maybe stop investing for a while in 401k plan and instead, putting that money in cash. Now they’ve become a market timer. What do they know about market timing? Almost nothing. They don’t know about the pain of timing. They don’t know about the responsibility of timing. They don’t know what it means to get on the wrong side of the market and not being able to figure out how to get back in the market when, in fact, the market does something that is different than what they expected. There are people still sitting in cash from 2008 trying to figure out how to get in the market.

Rob: Right.

Paul: Again, this is where it really is valuable to talk to somebody who can walk them through who they are and what they’re likely to do to stay the course. But the case for the likely loss that’s ahead of an investor today is very good. We were eight years into a bull market. Bull markets don’t go this long, very often. They do tend to do better after huge declines like they had gone through before this bull market started back in March of 2009. There’s just such a high probability that the market’s going to correct but in the ‘90s it went 10 years without a 10 percent decline. Ten years! What if you were sitting there waiting for that 20 percent decline (which is what a bear market is defined a) to wait to get into the market? You missed the ‘90s. So for most people even though it’s uncomfortable as can be, if they are a dollar-cost averaging into a 401k, just ignore the market. Because the minute you start letting the market—and there is always a good reason to be in and there’s always a good reason to get out. List A and list B, the good news and the bad. It’s always there so you can rely on something to keep you out or you can rely on something else to keep you in. The best thing to keep you in is the fact that you don’t know what the future’s going to bring. But the past—and this is something Dr. Gottman this last weekend in this relationship thing that my wife and I went to, he said that 60 percent of the things he thought would be the outcome of research that he was doing on couples turned out to be wrong, and that he believed that we should be acting on what we know, not what we guess. The minute we start doing what you’re doing there, is you’re starting to guess about the future and that’s dangerous because people get backwards on where they should be and sometimes never get out of that rut. In fact, I’ve seen investors who made one bad move in their life and it ruined them for the rest of their life as far as their trust in the investment process. So, I say stay the course. Don’t second guess your strategy unless your strategy is to be a market timer where you have a mechanical system and you do exactly what the system says to do. But guess how many people out of a 100 will do what the system says to do? Maybe, one! So market timing is a dead end for 99 percent of investors.

Rob: Right. Well, the other thing is when people ask the question, “Is the market overvalued?” they focus on the PE ratio. The Shiller PE ratio comes up a lot and that’s certainly a relevant data point, I suppose, but my view on it is, even if we assume the market is overvalued it doesn’t mean it’s going to go down. Or at least not go down any time soon. I think you made that point about the ‘90s, right? Eventually it went down. But it took a decade. Just because it seems undervalued doesn’t mean it’s going to go up. I’ve experienced that myself with individual stock investing. You can sit on a stock with a really low PE ratio for years. The other thing I think people—

Paul: I was once—

Rob: Go ahead.

Paul: I was just going to say I was once on a show called, Nightly Business Report with Paul Kangas on PBS and it was at a point that the economy was in the dumps and PE ratios were sky high. I’ll never forget my stance. My stance was, this is a very dangerous time. PE ratios are very high and at these levels the market rarely makes any money. Paul’s position was that those PEs were going to come way down when earnings go way up and in hindsight we’re going to find out that these were not high prices but low prices. And guess what? Paul Kangas was right and I was dead wrong. Those high PE ratios turned out to be of a false alarm.

Rob: That’s a good point. I mean, the PE ratio is not just about price. It’s also about earnings. And again, you see this in individual stocks where you see a PE that seems high but you realize it was based on the trailing 12 months of a company and for whatever reason they had some unique events that year that depressed their earnings. So it’s not necessarily a great barometer. The other thing is that when you value any asset, one of the key things to consider is the prevailing interest rates. That basically is a significant factor in valuations. For example, when we look back at December 1999 with the high Shiller PE, interest rates were over six percent for a 10-year Treasury. Today they’re two and a quarter. So that changes asset values. Not just of stocks but of any asset you want to buy. Listeners know that I make fun of my ability to predict anything. I predict that the Ohio State Buckeyes will win the national championship every single year.

Paul: Every year?

Rob: I think that’s a solid prediction. I don’t know why anyone would disagree with that but I also predicted that interest rates would start rising in 2010. So far I’m only off by seven years. But some day I will predict this. You know, they say predict what or when but never both. So I will predict that someday interest rates are going to rise.

Paul: I think that’s a good prediction but it can be a long time before we get back to what many of us knew in the ‘70s and ‘80s when I actually bought a CD from the Bank of Chicago for five years that paid 16 percent in my IRA.

Rob: First of all, I hope we never get back to those days.

Paul: I know.

Rob: But here’s the other thing. Do you remember this—because I had a CD as well and I was earning 16 percent. I was a kid—well not a kid, a teenager, and I can remember people being afraid. They didn’t want to lock their money away for five years. They were afraid rates would go higher.

Paul: That’s why I only bought a five year maturity. Exactly— guilty as charged.

Rob: Yeah. But I only had six months maturity so that tells you where I—again, that again shows my ability to predict rates. But I do think that valuations will come down. Again, that’s my terrible prediction but I’m going to predict it anyway, when interest rates go up. Don’t ask me when that’s going to happen. There are other factors. Interest rates can go up because the economy’s doing better and that can produce greater earnings so that can affect valuations. It sounds like you and I pretty much agree, that you should just keep investing and let the market just do what the market does which is go up and go down.

Paul: The course that I sponsor at Western Washington University is a four-credit course so they get about 40 hours of education and testing. In that 40 hours they do not learn what a PE ratio is. There is no reason for a young investor to know what a PE ratio is. Now, I know there are people right now saying, “Are you kidding! It’s one of the most important things that we should know. How can you know if a stock is good or bad?” And that’s exactly why I don’t want those young people to know what a PE ratio is because I don’t want them to even consider investing in individual stocks. In fact, I want them to be an index fund so they never have to go through that painful educational process to learn that in trying to pick individual stocks they’re likely to come out behind instead of ahead. That’s how I feel about the PE ratio. Not necessary.

Rob: You and I are very similar because you tell people not to “time the market” but I do know that as you said, half your portfolio is a market timing approach. I tell folks not to invest in individual stocks and just stick with index funds. I invest in individual stocks so does that make us hypocrites?

Paul: Well, actually I think what it makes us is, better teachers. I used to do six hour workshops when I was building my business. The morning was dedicated to buy-and-hold and the afternoon was dedicated to market timing. People would walk out of there and say, “What the heck does this guy believe in? Is a Republican or a Democrat?” because I made the case that both strategies are legitimate. Our business became much more successful when I just put the market timing on the back burner, carefully ferreted out the few clients that it was appropriate for, and made sure that I did what I could to take care of them with that approach and spent almost all my energy on buy-and-hold. Why? Because that’s what the public claims they believe in. So my job and I think your job is to teach people to be better buy-and-holders. You and I both know that if we tried to teach them what we know about being stock pickers—I mean, are you qualified to teach that, really? I’m not.

Rob: I don’t think I would teach it. I’ve never really thought about whether I’m qualified. Ask me that in 20 years, Paul, and I have the answer for you.

Paul: Okay. But we want to share information with people that they are most likely to apply and put to work and change their lives. And my sense is, from everything that I’ve seen, the majority of people who have individual stocks number, have no idea what their long-term return has been on that portfolio. They have no way to measure. I cannot find a stock broker that will show me his or her track record on how they’ve done for their portfolios of equities. Whereas, I can look at the S&P. I can look at Fidelity Magellan. I could I can look at mutual funds that have 30 or 40 year track records and know what they look like in the good times and the bad and the long-term. How can you make a real judgment about a strategy if you can’t measure that stuff?

Rob: That’s so true. I track the performance on my individual stocks but I almost never look at it. In fact, you were talking I looked it up. I tracked it all Morningstar. But it’s not an easy thing to do actually. Particularly with dividends and reinvestments, and not reinvesting them and taking some money out—it’s a hassle. It’s much easier to track your performance with an index fund. Okay. So, at the end of the day the goal here was to help people figure out—number one, if they should use sort PE or some view of market valuation to decide whether to invest. I think we’ve covered our views on that. And the second one was how to help people stick to their investment plan when the market eventually does go down, as we all know it will at some point. You had mentioned staying diversified, having some exposure to fixed-income, saving twice what they need for retirement. Are there any other last tips (before we bring the show to a conclusion) that people can kind of keep in mind for when the market does drop by 10, 20, 30 percent or more?

Paul: Well, I think they need to accept the fact that’s going to happen and to know that if they haven’t been through that— some people have been through it many times so they’re crusty and know how to live through it without much problem. But, for people who face it for the first time, it can be a challenge. And I think people need to belly up to the bar and sign up for the downside just like they’re signing up for the upside. I built a table called the, Fine Tuning Your Asset Allocation Table. It’s at paulmerriman.com. And on that table I have broken down portfolios of all equities to 10 percent equities, 90 percent bonds, 20 percent equity, 80 percent bonds, et cetera. You can look at each column and see not only what the return was but what the losses were in the worst of times—the worst year, the worst 36 months, and the worst 60 months. Know that that’s going to happen to you and are you willing to accept that? If you’re not, maybe you should move over a column and have more fixed-income. Maybe you should move over two columns and have more fixed-income. But then you’ve got to save more money because the return is not going to be is good. I’ve tried to give people tools and not just with 50/50 but 70/30 with all US, with the S&P 500 on its own so you can compare these different combinations of equities and fixed income to kind of try to figure out who you. But be affirm. You’re going to have to live through that loss and say that you’re willing to do it.

Rob: Right. I’ll find that table and include a link to it in the article to go with this.

Paul: Oh, great.

Rob: The only thing I would add, from my perspective is—Well, first of all, understanding that markets go down, understanding the history, setting the right expectations I think is critical in anything, in just about any endeavor. The other things that kind of help me; one is recognizing that when that when the price of an asset goes down whether it’s a stock or in our case an index fund, the businesses behind those stocks are still doing business. They’re still manufacturing products. They’re still providing services. They’re still making money. For those that pay a dividend they’re still paying that dividend most of the time. I mean, certainly there are exceptions such as the banking or auto industries in ’08 and ’09. But they’re continuing to pay a dividend. The fact that the market goes down usually doesn’t change that significantly, and those dividends get reinvested. When they get reinvested they’re buying more shares because the price is lower. And when the company continues with its buyback policy (if it has one) and it’s buying back its own shares, it’s getting more shares for the dollar because the price is lower. That’s sort of an academic thing, I suppose. Some people may not take comfort in that but I do because I know long-term it’s going to make me wealthier. That doesn’t cover up the 30 percent loss in the market. I mean, it’s not like I skipped down the street knowing that the buybacks are going to go a little further but it does give me some comfort. The other thing I do, by the way, Paul, is sometimes I just don’t look. There are periods of time I don’t look at my balance. That sounds kind of silly in a way but it helps me. I will say that I have lived through a number of bad markets already. I’m not sure but in some ways that helps me. At the same time, I have more to lose today than I did even in ’08, ’09. Certainly more than 2000 and 2002. So, when we hit that next bad market it’ll be interesting. I’m confident I won’t change my investment strategy. What will be interesting though is how I regulate my emotions and how easy or difficult that will be. I guess we’ll find out.

Paul: I have one suggestion to our listeners. Many people out there have been good been good savers. They’ve diversified. They’ve made a lot of money over the years. They still maybe have five years to work. But they have enough money that they could retire right now. When I was an advisor, I would normally try to convince that individual to make an adjustment in their portfolio as if they retired, because they don’t need to take the high risk anymore. I ran into a lot of folks who had an 100 percent in equities with the plan to go 60/40 when they retired. I would say, “Well, what would happen if in the next five years the market did go down 50 percent, would that change your future?” And they would normally say, “Yes, that would have a big impact.” I would try to have them consider changing their portfolio to the 60/40 now and lock in that retirement that they are looking forward to. And then they don’t have to continue to take that high risk. That is another good reason for people maybe to sit down with an advisor to find out if they are actually taking too much risk. Because a lot of people are. And, it will come back to haunt a certain percentage of them and they don’t have to go through that.

Rob: Right. Great point. Well, Paul, any last thoughts? I mean, we’ve been at this for an hour. If we haven’t covered this topic by now we’re not going to.

Paul: Well, there’s an article I wrote, Twenty-two Things You Should Know About Bear Markets.

Rob: Alright. Well, I’ll include that in the show notes too.

Paul: That would be good because it talks about the numbers behind historical bear markets. How long they last, how deep they go, and how far they come back. So, there you go. I always enjoy this, Rob. I wish you and all the listeners well and we’ll hopefully talk soon.

Rob: Absolutely, Paul. Thank you so much.

Paul: My pleasure.

Topics: Investing

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Carleton by Censorio – Burnaby Heights

Carleton by Censorio is the next new development to come to the popular Burnaby Heights neighbourhood.  With all the shops, services, easy access to downtown Vancouver, SFU and the North Shore, you can see why people choose to live in Burnaby Heights. Carleton is a small boutique building which will feature only  28 units comprised of 1 and 2 bedroom conods. These homes will range in size from 591 to 1119 square feet.

 

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This is not an offering for sale. Such an offering can only be made after filing a disclosure statement. E.&O.E.  This information is for marketing purposes only and is subject to change.

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Carleton by Censorio – Burnaby Heights

Carleton by Censorio is the next new development to come to the popular Burnaby Heights neighbourhood.  With all the shops, services, easy access to downtown Vancouver, SFU and the North Shore, you can see why people choose to live in Burnaby Heights. Carleton is a small boutique building which will feature only  28 units comprised of 1 and 2 bedroom conods. These homes will range in size from 591 to 1119 square feet.

 

To be kept up to date on this development and many more like it, register with us today!

 

 

 

 

 

 

This is not an offering for sale. Such an offering can only be made after filing a disclosure statement. E.&O.E.  This information is for marketing purposes only and is subject to change.

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Basalt by Pennyfarthing– Prices, Plans, Availability

At a Glance

• attractive Cambie Corridor location
• 6-storey concrete building
• 49 family-friendly condominiums
• 3 two-storey townhouses
• steps from Queen Elizabeth Park
• close to Hillcrest Community Centre recreation
• near Oakridge Shopping Centre
• easy access to Canada Line

Marked by Refinement
The Cambie Collection by Pennyfarthing Homes continues its legacy on Vancouver’s West Side with Basalt, 51 contemporary residences, located at 35th Avenue and Cambie Street. Marked by refinement, this fourth chapter of the Cambie Story exemplifies Pennyfarthing’s continued commitment to design excellence and quality craftsmanship. Find balance with nature at Queen Elizabeth Park just steps away, and live amid a diverse selection of amenities on the Cambie Corridor.

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Basalt’s excellent West Side location provides you and your family with an enviable choice of shopping, services, schools, and recreation within easy walking distance. Just a short stroll down Cambie Street is Oakridge Centre with grocery shopping at Kin’s Farmers Market and Safeway, banks, a pharmacy, post office, public library, telecom providers, medical centre, cafes, restaurants, Hudson’s Bay department store, home decor stores, travel agencies, boutique shopping, and specialty shops. Enjoy unparalleled leisure activities at Queen Elizabeth Park, Hillcrest Community Centre, Nat Bailey Stadium, Riley Park, and Vancouver Racquets Club. Experience convenience by design at Basalt.

Pricing for Basalt
As this project is in pre-construction, Pennyfarthing has not yet released pricing information. Given the success of Pennyfarthing’s other Cambie Corridor projects, however, expect Basalt to sell out quickly. Sign up to our VIP list today to ensure you receive updates on all the latest developments.

Floor Plans for Basalt
Basalt will offer the following family-friendly mix of residences:

• 8 x 3-bedrooms
• 27 x 2-bedrooms
• 12 x 1-bedrooms
• 1 studio
• 3 x 2-bedroom townhouses

Those with a serious interest in living at Basalt should contact me to discuss availability, plans, and pricing.

Amenities at Basalt
Residents will enjoy use of a shared amenity space on the ground floor and a landscaped courtyard between the main building and the laneway townhomes. Each of the ground floor units have private patios, while top-floor penthouse suites include a private rooftop patio.

Parking and Storage
Vehicle and bicycle parking are provided within two levels of underground parking accessed from the lane. Plans propose 65 parking spaces, of which three are handicapped, 64 bicycle spaces, and one Class A loading bay. Each townhouse will have private access to its own parking space. Most residences will have their own in-suite storage. There will also be 17 bulk storage spaces on level P2 of the underground.

Maintenance Fees at Basalt
To be included in final pricing information.

Developer Team for Basalt
Since its formation in 1980, Pennyfarthing Homes has fulfilled the home ownership dreams of nearly 3,000 home buyers throughout the Lower Mainland, Washington State, and California, all the while setting exacting standards of integrity, reliability and professionalism. Following on Bennington House, Grayson, and Hawthorne, this is Pennyfarthing’s fourth Cambie Corridor development.

Pennyfarthing has chosen Shift Architecture to design Basalt. Shift is a high-performance practice with a track record of respected, inspired projects throughout Vancouver and the Lower Mainland. With proven expertise in multi-family housing, Shift boasts a diverse portfolio of residential, commercial, healthcare, and mixed-use developments. Renowned for its collaborative design process, Shift’s team of core personnel draws upon a deep collective well of experience spanning decades.

Expected Completion for Basalt
Estimated sales launch is Fall 2017.

Are you interested in learning more about other homes in the Cambie Corridor, Kerrisdale, or Mount Pleasant?

Check out these great Cambie Corridor Presales!

The post Basalt by Pennyfarthing– Prices, Plans, Availability appeared first on Mike Stewart.

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Salisbury South – Port Coquitlam Townhomes

After quickly selling out Salisbury Walk and Salisbury Lane, Macleans Homes is ready to bring their newest  townhomes development to Port Coquitlam.  Salisbury South is a new townhouse development will be centrally located at 2145 Prairie Avenue, Port Coquitlam, This boutique collection of townhomes will feature the same quality, comfort and privacy as their first two Salisbury projects, all nestled in a quiet residential neighbourhood of west Port Coquitlam.

To be kept up to date with this development or others like it, Register now to be kept in the loop

 

 

This is not an offering for sale. Such an offering can only be made after filing a disclosure statement. E.&O.E.  This information is for marketing purposes only and is subject to change.

The post Salisbury South – Port Coquitlam Townhomes appeared first on Vancouver New Condos.

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Salisbury South – Port Coquitlam Townhomes

After quickly selling out Salisbury Walk and Salisbury Lane, Macleans Homes is ready to bring their newest  townhomes development to Port Coquitlam.  Salisbury South is a new townhouse development will be centrally located at 2145 Prairie Avenue, Port Coquitlam, This boutique collection of townhomes will feature the same quality, comfort and privacy as their first two Salisbury projects, all nestled in a quiet residential neighbourhood of west Port Coquitlam.

To be kept up to date with this development or others like it, Register now to be kept in the loop

 

 

This is not an offering for sale. Such an offering can only be made after filing a disclosure statement. E.&O.E.  This information is for marketing purposes only and is subject to change.

The post Salisbury South – Port Coquitlam Townhomes appeared first on Vancouver New Condos.

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How to Get a Free Extended Warranty Every Time

Many credit card issuers offer a credit card extended warranty whenever you make a purchase. Here are 3 of the best merchants for this awesome purchase protection.

Peace of mind can be a good thing when you’re making a purchase. Having peace of mind when you make a purchase without paying extra for an extended warranty is even better.

You may not realize it, but many of the best credit cards actually provide built-in warranty extensions whenever you make purchases using your card. However, not all extended warranties offer the same perks.

Which cards have your back when it comes to making sure you won’t lose out if a product is damaged or defective? Here are the three merchants we’ve found with the best credit card extended warranty programs.

American Express

American Express is the top name in the credit card industry when it comes to extended warranties.

All American Express cards offer some form of extended warranty for up to a year on qualifying purchases. Some cards actually offer five-year purchase warranties.

American Express will always match the length of the original warranty, if it is less than a year. What’s more, American Express will actually provide an additional year if the original warranty is between one year and five years. American Express offers a maximum of $50,000 in extended warranty coverage.

American Express does have one big requirement for cardholders filing an extended warranty claim: you’ll need to alert them within 30 days of the item becoming defective. If all checks out, American Express will credit the reimbursement amount back to your account within 14 business days of your claim.

One bright spot in the fine print of the company’s warranty guidelines is that American Express will cover wear and tear. However, you may be required to send the damaged item to the warranty department at American Express before you can receive a reimbursement.

American Express Warranty summary —

• Cards carrying extended warranty: All cards in the American Express line carry some form of extra coverage
• Warranty maximum: Reaches a maximum of $50,000, depending on the card product
• Warranty length: Original warranty length matched if less than one year; Up to an additional year of coverage if original warranty was between 1-5 years
• Time limit to file claims: 30 days
• Wear and tear covered? Yes

Discover

Discover definitely gives American Express a run for its money when it comes to providing comprehensive warranty extensions.

For starters, all cards on Discover’s roster are eligible for extended warranties on qualifying products. The maximum warranty amounts on specific cards range from $10,000 to $50,000.

Discover will provide up to an additional year of coverage once a manufacturer’s warranty expires on a product. The extension will apply to warranties of 36 months or less on eligible items.

The one downside to the generous warranty extensions offered by the company is that wear and tear won’t be covered.

Discover gives customers 45 days to report an issue when trying to collect warranty reimbursements. It will take the company up to 60 days to credit your account after paperwork has been filed and the warranty coverage approved.

Discover Warranty summary —

• Cards carrying extended warranty: All cards in the Discover line carry some form of extra coverage
• Warranty maximum: Ranges from $10,000 to $50,000, depending on the card product
• Warranty length: Up to an additional year of coverage
• Time limit to file claims: 45 days
• Wear and tear covered? No

MasterCard

MasterCard earns the coveted third slot on the list because of the fact that it also offers extended warranty coverage for every card on its roster.

While some cards come with a cap of $10,000 on the amount of reimbursement you can receive, cards in higher tiers actually don’t come with any warranty caps. This makes a premier card from MasterCard a great option if you routinely make pricey purchases and you’re looking for some extra coverage.

Your extended warranty amount will be double the original manufacturer’s warranty for up to a maximum of 12 months on most purchases you make.

The one area where MasterCard falls short when compared to options like American Express is when it comes to wear and tear. Wear and tear won’t be covered for cardholders when they file warranty claims.

MasterCard does come out ahead when it comes to giving cardholders more time to file warranty claims. Compared with Amex and Discover above, MasterCard customers will be pleased to hear that they have a full 60 days to file a claim.

Smaller claims are typically reimbursed within a few days. Larger claims could take as much as a few months. This may be a source of frustration if you’re not a fan of waiting around to have a warranty fulfilled. However, most customers will see it as a small price to pay for such a generous warranty policy.

MasterCard Warranty summary —

• Cards carrying extended warranty: All cards in the MasterCard line carry some form of extra coverage
• Warranty maximum: Ranges from $10,000 to no limit (higher tiered cards)
• Warranty length: Double the manufacturer’s original warranty, to a maximum of 12 extra months
• Time limit to file claims: 60 days
• Wear and tear covered? No

Topics: Credit Cards

The post How to Get a Free Extended Warranty Every Time appeared first on The Dough Roller.

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