February 3, 2009, 6:00 am

There Is So Much Money To Make In 2009!

by: The Financial Blogger    Category: Investment, Market and Risk
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Yup, you heard me right; there is an awful lot of money to make in 2009! This is actually one of the best periods of your life money wise. This is exactly when you think that the whole world is going to fall apart that you see true opportunities rising. Here’s a few reason why I see money everywhere.

Investment opportunities

People will surely debate on this point as some people think that we will never see the Dow Jones at 10,000 point again (and that the USA will go bankrupt 😉 ). I actually looked at newspaper front page during important crisis and it’s always the same thing; the stock market has plunged and will never come back. Guess what, it always come back up ;-). You know what? Since November 2008, Canadian market and US market went up about 15% each!

Leverage opportunities

I heard several persons (and bloggers) saying that Smith Manoeuvre fans and other leverage strategy evangelists will finally shut their mouth. Well too bad for them! I think this is actually the perfect timing to jump in the market while you can borrow at a very low rate and stack some great stocks aside and wait for them to jump in a few years. I personally keep going with my Smith Manoeuvre strategy and seriously considering borrowing more money and invest into a TFSA (however, money borrowed to invest in a Tax Free Savings Account is not tax deductible in Canada).

Other kind of leverage opportunities

You think that leverage is only for investing on the stock market? Well you can actually get great mortgage rate and buy a rental property. The catch is that banks are getting tighter in their credit norms. However, if you can qualify for an additional mortgage, you may find great deals out there.

You can also decide to borrow money to invest into your own company. We are currently looking to buy more website and using our line of credit to do so. Websites are selling for almost nothing and there is still a lot of potential in the Web 2.0. (By the way, if you think of selling your blog or other websites, please send me an email at thefinancialblogger (at) gmail (dot) com).

Pay down your debts

Another way of getting richer is by paying down your debt faster while the interest rate is low. Your payment will be directly applied to your capital and you can save a lot of years of amortization on your mortgage.

Become an extraordinary employee

If you are working your ass off while your company is going through a rough time, you won’t get much in return the very same year. Promotions are rare when there are layoffs and bonuses are thin when the income is decreasing. However, if you are patient and wait for better days; guess who’s going to be the next guy in charge… you! Rough economic times will always clean up a lot of people in front of you 😉

The only detail about most of my ideas is that you need to already be in a good position before a year like 2009 happens. If you were note positioned properly (we don’t always have the chance of choosing anyway!), this year may be pretty rough as well… Therefore, I would rather pay down revolving credit or build an emergency fund if you can’t access to revolving credit in order to create a buffer. We never what can happen and if you are not ready to take risk, paying down debts is always a great option!

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The recession in US is expected to stretch into this year. The US economy lost more than 2.5 million jobs last year, the most since 1945. Forecasters have grown more pessimistic about the outlook and see more job cuts. That’s scary and that’s why we need to be prudent. There is no clear signs that stock markets have reach the bottom yet. Maybe should we be in the side lines for a moment? At least for a few quarters?

Even though money borrowed to be put in the TFSA can not be used to your advantage in your taxes you can however use the TSFA for collateral on a loan. This means that if you have 5 grand you were going to buy [Insert Security of Choice] with you could instead buy some safe[r] investment inside the TFSA and use the TFSA as collateral to get a loan to but your income producing divided payer which will make the interest work in your favour for taxes.

Yeah, how prudent would you be with your investment given the current outlook? I understand investing, but would you invest in market indexes or bonds?

by: The Financial Blogger | February 3rd, 2009 (9:39 pm)

However, this is definitely a personal choice. I’m young and I don’t need my invested money. therefore, i sleep very well knowing that my Smith Manoeuvre portfolio is down 25% 😉

If you stay on the sideline for a while, you’ll probably miss a great investment opportunity. As a matter of fact, the market went from 15% from November to Jan 1st 2009. Did you notice it in the news? nope, they completely forgot to tell us the “good news”.


Here’s some headlines.
– U.S. automakers hit with terrible sales
– U.S. lost 522k jobs
– U.S. banks face massive losses
– China losing taste for U.S. debt.
– Hedge fund deleveraging
– Warnings about deflation
Are they good news? I think there’s currently volatility in the markets. And maybe we should be prudent for at least one-two quarters. Then, what do you think we should invest in?

I still think it’s time to buy! Bad times bring opportunities 🙂

by: The Financial Blogger | February 4th, 2009 (11:36 am)

buy when there is blood on the street 😀

[…] There is So Much Money to Make in 2009!, exclaims the Financial Blogger. […]

[…] Financial Blogger explained that now is a good time to be making money, even though we’re in a recession.  If you analyze all the facts, it really is there to be […]

This is a little aside, but I never realized until this weekend that even when Obama’s stimulus plan comes into effect in the United States, it will take 180 days until the first penny can be spent. So for those hoping for a relatively quick turnaround, don’t expect it until the beginning of 2010 IMHO.