[VIDEO] The road to Gold is paved with Macaroni

I respond to an e-mail I got about how a person could afford to invest and build up assets.  I talk you though the importance of good home economics while I make 11 lunches at once for about a buck each. (and half that budget was the tinfoil packaging)

Enjoy



InvestLocalBook.com is the blogsite for Invest Local, a book about local investing deals such as loans, leases, inventory financing, receivables financing and more to small businesses and people.

Sweet 493% return on investment in 45 minutes!

I went to Sobeys yesterday and noticed that quarts of strawberries were on sale for $3.99.  I decided to buy two and make some jam since my neighbour had invited me to 'help myself' to her rhubarb.  I love strawberry rhubarb jam.

It took about 45 minutes to chop the fruit, heat it up, add sugar, bottle it and do the canning and  in the end I got seven 250ml jars, one 125ml jar and about 200ml in a tupperware container which went right into the fridge.

In total about 2,075 ml of jam and this is what it cost me:

1. One package of no name pectin $0.99
2. Almost a full bag of sugar which I got on sale a few months ago $1.50
3. One and a half quarts of strawberries $5.99
4. 8 snap lids $0.80
5. 2 cups of chopped rhubarb- FREE

Total cost of production $9.28.  This jam will be enough for me and the kids for a year.

So what did I earn in my 45 minutes of toil?  Well I found an all-natural strawberry rhubarb jam at Sobeys for $4.19.  This is a 190ml jar so it works out to $2.21/100ml.

So if we use this retail value as the value for my jam, I've made $45.76 worth of jam for only $9.28.

That's a 493% yield.  Sweet.

Of course, one jar will go to the neighbour who donated the rhubarb but with these types of profits I can afford to be generous.

Enjoy the weekend.

-dave

The Canadian Real Estate Bubble

In my book I talk about all the reasons I'm not invested in income properties right now.  I talk about how asset prices for income producing properties are related to interest rates and since those can't get any lower, the likelihood of continued increases in income property prices is unlikely.

There is, however, a much bigger problem for real estate in Canada.  People are maxed out and if interest rates rise people will start to find their homes un-affordable, especially those who haven't locked in a rate.

This means there is a potential 'correction' for the market.  People who can't afford their new mortgage payment will try to sell the house, more supply and reduced demand because of the same rate increases will lead to lower home prices.

I don't expect a big nominal price crash in places like Moncton, but I think people in Toronto may be in for a big surprise over the next few years.  Also, a drop of as little as 10% will wipe out all the equity of most buyers who bought in the last couple of years.  This turns these people into little more than debt-serfs to the banks as they'll be paying on a mortgage that's worth more than the home its secured against.

What I've seen in my own neighbourhood is that home prices have been stagnant over the last 18 months or so and more 'for sale' signs are appearing all the time.

Whenever the price of one of your assets remains constant, you are actually losing value.  This is because of inflation.  Depending on how you measure inflation, this means that houses in my neighbourhood have actually lost between 2.85% and 9% over the last year.  (Read the inflation chapter in my book to understand how we're all in a race against new money creation by central banks.)

Banks make money by making mortgages and collecting interest and so they often 'talk their book' by trying to tell everyone how great things are.

I found this recent YouTube video by Patrick Doyle to be pretty funny.  I especially like when he satirizes CIBC economist Benjamin Tal as a 16th century Dutch Tulip Analyst.

Take a look:

Also, just for fun, type 'Canadian Real Estate Bubble' into Google or YouTube.  A lot of people are talking about this.

The truth about eating out. You'll never accumulate wealth if you spend all your money... and erode your health.

I read a great article today on Zerohedge and the infographic presented sent such a powerful message about how we spend our money and what it means in the long run.  Prices are in USD but proportionately this would likely be true everywhere.

Read the original article here