Raise Your Kid’s MO (Money Quotient)

On Tuesday May 26th join Gail Vaz-Oxlade at the Kay Meek Centre in West Vancouver for a discussion about helping your children make smart money choices. Learn more about how you can help boost financial literacy and instill confidence and success after graduation.

This event is open to the public. General admission tickets are available for only $25.

CLICK HERE to register

The rapid assessment of a business situation, combined with the courage of its leader to take bold action, is key to accelerating the growth of a company.  This should be done with some structure, so that you are not breaking the things that are fixed, while fixing the things that are broken.  In addition, a quantitative approach reassures the employees that decisions are being made by leaders in a thoughtful and measured manner, with all interests taken into consideration.

The following is an excerpt from an assessment tool I use when reviewing a company, and I am posting it today for the benefit of my subscriber

Introduction
The following is a readiness self-assessment based on the top ten factors that drive business growth. Assess each factor on how closely your company currently fulfils the definition, and apply a score on a scale from 0 to 4.  Total the score and review your results below.
 
Scoring:
Never (0), Rarely (1), Sometimes (2), Mostly (3), Always (4)

_____ Team is experienced, capable, with complementary expertise and a track record of results.

_____ Product solves a significant customer pain in a unique, compelling and protected way.

_____ Finances have positive cash flow, good margins, with growing revenue and access to capital.

_____ Business Model is simple, scalable, and creates value with multiple market channels.

_____ Business Systems are lean, customer focused, repeatable and resilient.

_____ Customers Market segment is clearly defined, pain point understood, growing and global.

_____ Core Competency is known, clear, invested in, unique and leveraged across the company.

_____ Competition is low or fragmented, with high barriers to entry.

_____ Strategy is known, documented, communicated and supported by culture and actions.

_____ Key Metrics are closely monitored, customer oriented and drive decisions.

_____ Total Score (Maximum is 40)

Results and Assessment
Score (0 – 10)
Poor: Weak competitive position, with a no or low foundation for growth. Significant risk of financial or market deterioration. Long term viability of the business, without significant intervention, is doubtful.

Score (11 – 29)
Average: Several key elements for growth are in place, providing a foundation and resources to potentially expand the business.  Review of the lowest scoring factors is necessary, and begin immediately to address deficiencies in order to improve long term performance and viability. 

Score (30 – 40)
Good: Strong competitive position, with most of the necessary factors for growth in place.  Well positioned to become a significant competitor in an attractive market, generating above average returns.  Superior returns and a dominant market position can be attained through strategic review and the implementation of sustained and aggressive growth initiatives.

For more information on how to accelerate the growth of your business, visit Percygroup.ca. For the Percy Group Blog go HERE

This material is the property of The Percy Group, Vancouver, BC, Canada. All rights reserved. Copyright 2015.

Federal Government Increases Annual TFSA Contribution Limit to $10,000

After years of promises, our Conservative party government has finally done it. No, we are not talking about balancing the budget. We are talking about something even more important to Canadian investors. Stephen Harper and his Tory’s have delivered on their promise to increase contribution limits for the Tax Free Savings Account (TFSA).

Going back to even before the Conservatives were elected to their majority government, they made a promise to Canadians that they would double the TFSA contribution limit once they had the budget balanced. Now, we have heard tempting promises from politicians before (ummmm…remember their promise not to touch the Income Trust structure) and have learned over the years not to get too excited until the package is delivered. But on Monday, April 20th, the government announced that they were increasing the annual contribution limit for TFSAs to $10,000 (from $5,500) – effective immediately.

Okay, so this wasn’t exactly a doubling of the TFSA contribution limit (an 82% increase in fact). But technically speaking, it is double the amount of the contribution limit at the time that the Conservatives starting making the promise. In any event, we consider this to be great news and highly beneficial for Canadian investors.

For those that would like a refresher, the TFSA is a tax-free investing account that was started in 2009. Initially, the annual contribution limit was $5,000 but it increases over time with inflation in increments of $500 (the limit went up in 2014 to $5,500). The way that it works is you contribute (up to your limit) with money that has already been taxed. Any investment returns generated inside of the TFSA accrues tax free and investors don’t pay taxes on any withdraws either. This makes the TFSA a very powerful tool for increasing investment returns and portfolio size over time. Any unused contribution room from previous years can also be carried forward to future years indefinitely. Any withdraws can also be re-contributed in future years (you just have to wait until the next calendar year to do so). Another attractive attribute of the TFSA is that (unlike the RRSP) withdraws in future years do not count as income and will not affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit. See www.tfsa.gc.ca for more details.

That all sounds great doesn’t it? Well, unfortunately not everyone loves the increased TFSA limits. The most notably opponents are (not surprisingly) the government’s two opposition parties (the Liberals and NDP). Of course it is the job of any political party to automatically disparage the policies and actions of their chief opponents.

Politics aside, the main criticism seems to be that as the TFSA continues to grow, the lost tax revenue for the government will cause a significant budget shortfall. Unlike in an RRSP (which is only a tax deferred account), any investment returns or withdraws from the TFSA will never be taxed (theoretically). We think that these claims are exaggerated and don’t provide the full picture of what happens when more people invest. One point that seems to be missing from this argument is higher TFSA limits will likely (certainly should) encourage higher levels of saving and investment. Economic growth is a function of a country’s savings and investment rate (which in Canada are at meager levels) and higher levels of economic growth and GDP translate into greater tax generating potential for the government. We also have to take into account that when people make withdraws from their TFSA they typically do so with the intentions of spending that money. Money spent in the economy is taxed at the time that most products and services are purchased and then again when it flows through the companies that provide those products and services – as corporate tax and income tax paid by employees (who have a job because these products and services are being purchased). Of course, future governments will always have the option to take certain actions if several years (or decades) down the road TFSA contributions do start getting out of hand. But if there is so much capital inside this structure that it makes a significant impact on government revenues then that means more capital is being saved and invested which is a positive driver for the economy long term.

At this point, our biggest concern over the higher TFSA contribution amounts is that it might make the TFSA a target of future governments. Although the thought of substantially negative change to the TFSA structure sends ripples of fear down my spine, the very possibility that this could happen is only more reason to start maxing out your contributions today and generate those tax free returns while you can. 

4/23/2015
EXTRUSION & AUTOMOTIVE MANUFACTURER REPORTS STRONG Q2 2015, ACCRETIVE ACQUISITION/EXISTING BUSINESS EXPANSION POWER GROWTH, OUTLOOK POSITIVE FOR 2015 – LONG-TERM BUY RATING MAINTAINED

4/9/2015
CASH RICH COMMUNICATIONS SOFTWARE & HARDWARE PROVIDER POSTS BETTER-THAN-EXPECTED Q1 2015, SHARES RISE, NEAR-TERM OUTLOOK IMPACTED BY INVESTMENT SPEND – MAINTAIN RATING (NEW CLIENTS ESTABLISH HALF POSITIONS)

4/2/2015
CASH RICH UNIQUE TECH DRIVEN MICRO-CAP POSTS STRONG 2014, REPORTS UNEXPECTEDLY STRONG BACKLOG, SHARES SURGE 50% – NEAR-TERM RATING SHIFTED, LONG-TERM MAINTAINED

4/1/2015
STAPLE AUTO REPAIR COMPANY ANNOUNCES RECORD 2014 RESULTS, REVENUE & ADJUSTED EBITDA GROWTH ACCELERATES – STOCK UP OVER 2,300% – MAINTAIN RATING

4/1/2015
CASH RICH COMMUNICATIONS SOFTWARE COMPANY POST STRONG Q1 2015, EXPECT FURTHER ACCRETIVE ACQUISITIONS THIS YEAR – RATING MAINTAINED – GAINS OVER 500%

“It is the financial repression of the ordinary individual in America. It is happening through three main avenues or arteries”

SPECIAL GUEST: JOHN BROWNE is the Senior Market Strategist for Euro Pacific Capital, Inc. Mr. Brown is a distinguished former member of Britain’s Parliament who served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee, and as a close associate of then-Prime Minister Margaret Thatcher. Among his many notable assignments, John served as a principal advisor to Mrs. Thatcher’s government on issues related to the Soviet Union, and was the first to convince Thatcher of the growing stature of then Agriculture Minister Mikhail Gorbachev. As a partial result of Brown’s advocacy, Thatcher famously pronounced that Gorbachev was a man the West “could do business with.” A graduate of the Royal Military Academy Sandhurst, Britain’s version of West Point and retired British army major, John served as a pilot, parachutist, and communications specialist in the elite Grenadiers of the Royal Guard.

In addition to careers in British politics and the military, John has a significant background, spanning some 37 years, in finance and business. After graduating from the Harvard Business School, John joined the New York firm of Morgan Stanley & Co as an investment banker. He has also worked with such firms as Barclays Bank and Citigroup. During his career he has served on the boards of numerous banks and international corporations, with a special interest in venture capital. He is a frequent guest on CNBC’s Kudlow & Co. and a former contributing editor and columnist of NewsMax Media’s Financial Intelligence Report and Moneynews.com. He holds FINRA series 7 & 63 licenses.

FINANCIAL REPRESSION 

“It is the financial repression of the ordinary individual in America. It is happening through three main avenues or arteries. 

1. POLITICALLY – The government is increasing its power almost everyday and repressing the public individual and particularly the rights of the individual. Always under the guise that it to help you! Published statistics are highly questionable; growth rates, inflation rates, unemployment rates. They are confusing people and today I read how they are forcing people out of using cash! 
2. ECONOMICALLY – We have had an enormous, unprecedented injection of cash into the economy with a $3.8T QE program. Its an experiment! It was initiated in Japan where two decades ago the BOJ said it wouldn’t work but the politicians insisted they do it. After two decades it still hasn’t worked. We are now doing it on a grand scheme without a pilot program. It is creating a (liquidity) trap. It is a major distortion and is crushing savers. 
3. FINANCIALLY – ZIRP is (also) crushing savers! It is savings which forms investment for the future. 62% of employment comes from small businesses where formation must be incented. That needs capital from savings. This along with increasing regulation is not only killing the consumer but the incentive to start a small business which is the key to the creation of jobs, which is key to the creation of income which is then key to savings and growth in the economy. It has all been killed by these policies. 

“I don’t believe the central bank is necessarily evil, just unbelievably Irresponsible!

LIQUIDITY TRAP

“I think we are now seeing a situation which you could call a liquidity trap. There is so much money around that if they start to raise interest rates they are going to discourage people even more from spending. Ordinary individuals have low wages (wages have been flat for six years at least) yet taxes are going up (the number of taxes) as well as charges (licenses and fees)” 

“They are pushing on a string. It isn’t liquidity that matters but wages and income!” 

“How does the Fed create income without just giving us cash in the post (mail) by just sending us checks? 

BY DESIGN

“I’m afraid I believe at the very top it is devious! If I connect all the dots together I cannot feel it is by accident – it by design. I think the president wants to distribute American wealth around America, but even worse is to distribute American wealth around the world. Its killing the economy and its kiliing America.” 

“It means (eventually) everyone is going to look towards the government for solutions – that is when totalitarian governments come in (to existence)”

“The only solution is single term politicians – Turkey’s don’t vote for an early Thanksgiving!”

40 Minutes