Happiness Is A Hairy Dog

At the ripe old age of thirty, thinking it may be time to bring a dog into my life, I visited a reputable dog breeder in White Rock, British Columbia, whose Chocolate Labrador had recently given birth to eleven tiny pups. After watching and interacting with these playful, pure souls for about ten minutes, I then did exactly what the books, and experienced dog owners, tell you not to do: I made a totally emotion based decision, telling the breeder that I would take puppy number four, who I named Kayla.

As I would soon learn, I had absolutely no idea what I was getting myself into. Jam-packed with phenomenal energy, Kayla was wild, didn’t listen, and ate everything. And if you have ever been around a Labrador Retriever, you know what I mean when I say ‘everything’. Oh, sure, like many Labs she would eat food til’ she vomited, like the time Kayla ate a tray of twelve warm muffins still in their paper liners, or somehow lifted the secure lid covering her kibble and scarfed the morsels down in dog record beating time until she heaved it all back up.

But being the free eater that she was, Kayla saw no reason to limit herself to what we usually think of as edible food. It was autumn, getting chilly, and I had bought a new jacket with a leather collar. On arriving home in late afternoon, the jacket, price tag and all, was left on the living room sofa. I was going out for the evening and would hang the jacket in the front hall closet the next day.

That was the plan. And the plan failed. Because when I returned, Kayla had consumed the entire collar! Upset at first, I quickly calmed when I looked at her. Sad eyes, tail between her legs, sitting still, it was as if she was trying to tell me, ‘hey man, you know, um, the collar, well, uh, I just couldn’t stop myself it was so darn tasty! But if you bring home another jacket with a tempting collar, I promise not to eat it because, I gotta tell you, I’m not feeling so hot right now’. For the next twenty-four hours, Kayla alternated between farting and pooping until the collar had completely exited.

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Wagging Tails Light Up Our Life

Dogs are Amazing creatures. Truly. Do the research and you’ll come up with something like this:

  • Healthy Heart. Dog people walk more, have lower blood pressure, and healthier hearts.
  • Feel Good Hormone. Petting a dog releases chill out, stress reducing, relaxation hormones serotonin, prolactin, and oxytocin. Flush the pharmaceuticals; petting a dog is more effective and has only positive side effects.
  • Connect The Humans. Dogs help you connect with other people. Go for a walk or to a dog park, and you’re more likely to start chatting with a fellow dog person than if you were not accompanied by your four-legged friend. Connections are good. Connections feed our soul.
  • Mood Booster. According to Web MD, dog folks are less lonely and visit health care practitioners less often because dogs contribute to your life’s meaning and sense of belonging.
  • Increased Immunity. Dogs shed hair and bring a whole bunch of dirt into the house. This is a good thing! Because contrary to the mass neuroses infecting millions of hygiene overkill Purell users, exposure to dirt builds healthy immunity.

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Dogs Make You Rich

Yes, they cost money, dogs do. They’re not an investment on which you’ll see any direct financial return. Obviously. But dogs contribute to your wealth in so many other ways.

For anyone who has been blessed to include a dog in their life, you know all this. And you know that whatever caregiving challenges your dog presents (i.e., eating your clothes), they make up for it a thousand times over by repeatedly asking you to play, wagging their tail in appreciation, coming to your side when you call their name, watching movies with you, treating you as if you belong to the canine world, treating you as if you are the most important person ever.

And all this makes you feel good. And feeling good contributes to your balanced health. And when we’re emotionally and spiritually healthy, we make wise financial decisions, we get our financial house in order by taking care of our needs, satisfying today’s wants only when we may afford to so, and investing for the future.


Curated Dog Quotes Intended To Elicit Smiles, Chuckles and Balanced Perspective

Car Rides. “Dogs feel very strongly that they should always go with you in the car, in case the need should arise for them to bark violently at nothing right in your ear.” Dave Barry

Giving Heart. “A dog has no use for fancy cars, big homes, or designer clothes. A water logged stick will do just fine. A dog doesn’t care if you’re rich or poor, clever or dull, smart or dumb. Give him your heart and he’ll give you his. How many people can you say that about?” John Grogan

Happy Tails. “The reason a dog has so many friends is that he wags his tail instead of his tongue.” Anonymous

Hungry Dog. “A well-trained dog will make no attempt to share your lunch. He will just make you feel so guilty that you cannot enjoy it.” Anonymous

Staying Balanced. “In order to keep a true perspective of one’s importance, everyone should have a dog that will worship him and a cat that will ignore him.” Dereke Bruce

Feeling Rich. “No matter how little money and how few possessions you own, having a dog makes you rich.” Loius Sabin

Best Friend. “Outside of a dog, a book is man’s best friend. Inside of a dog, it’s too dark to read.” Groucho Marx

Good Person. My goal in life is to be as good of a person as my dog thinks I am.” Anonymous

 

Excellent Investors Play Chess

Last week, as I’m cleaning up after dinner, my 11 year-old son (otherwise known as ‘KidMaster’) is sitting at the kitchen counter, eyeballs glued to a laptop screen. In an attempt to disrupt the digital world’s grip, I lob the most banal question available, ‘what are you doing’?

Not surprisingly, KidMaster doesn’t respond. No blinking, no recognition, no acknowledgement of my reaching out to connect with him through the ancient art of verbal conversation. Oh well. It’s a dying art anyway, and my wanting to engage in conversation is merely proof (gulp!) of advanced age (i.e., older than 19) and pending obsolescence.

So I break from dinner prep and shuffle over to KidMaster. Purposely invading his space, curious to know exactly what virtual power has him captivated, I lean in to take a look. KidMaster ignores me. He’s certain that humans who have lived long enough to gain entitlement to vote have negligible, and fast dwindling, wattage of sight and comprehension.

“Shoot!” he exclaims.

KidMaster is playing chess. And he has just been checkmated.

 

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KidMaster Finds A Rube

Frustrated, KidMaster turns toward me.

“Hey Dad, wanna play?”

“I’ve never played chess,” I answer.

“You’ve never played?” KidMaster beams. He’s found a victim, someone who will suffer quick defeat at his hands.

“You’ll learn. It’s easy. Really. I’ll show you.” He grins mischievously.

So we play. KidMaster teaches me the basics, though he doesn’t mind holding back information that may be too detrimental to his chances of winning. As I’m struggling to remember the name of each playing piece and the powers bestowed upon the Rook, Knight, Bishop, Queen, King and lowly Pawns, KidMaster is smiling, teasing me, and enjoying every moment (I make a mental note to reinforce good sportsmanship etiquette at a later time).

We continue playing one game after another, KidMaster repeatedly smoking me along the way. As bedtime approaches, I feel like I’m getting hooked and want to keep on playing but KidMaster is tired and, besides, he wants to end the evening knowing he has beaten Dad. I get it.

“Tomorrow we continue?” I say to KidMaster before turning out the lights. Too tired to respond, he falls asleep as soon as his head hits the pillow. His day has been a success.


The Rube And The Lightbulb

With KidMaster cozy in bed and deep in zzzzzzzz’s, I return to the laptop. Intrigued, hungry to learn more, I play game after game, studying the computers moves and following its strategies.

Then, a funny thing happens as I’m sitting alone with the laptop. I realize not only the similarities between chess and investing, but also the investing advantage chess players have simply because they know how to employ strategy, patience, and self-discipline.

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How The Game of Chess May Improve Your Investing

It’s not like you MUST learn chess to become an excellent investor. It’s just that a chess players mindset is extremely well-suited to improving  investment skills. Here’s what I’m talking about:

  • Avoiding Risk

Chess. Winning players know that their strategy must include risk avoidance. Because winning at chess is not about being aggressive. Rather it’s about setting up an effective system, being patient, waiting for opportunities, and striking when the odds are stacked in your favor.

Investing. Successful investors are patient, disciplined, do their research, do not chase high flying stocks but wait for investment opportunities, both on the buy and sell side.

  • Diversified Attack

Chess. Winning players utilize strategies that include an effective defense and multi-faceted attacks.

Investing. Successful investors buy insurance (i.e., home, auto, life – defensive protection), prepare an annual budget (strategy planning) and build a diversified portfolio, one built for growth (stocks and stock ETFs) and safety/income (bonds and bond ETFs).

  • Flexibility

Chess. Winning players recognize when a strategy, or a particular move, is not working, and do not hesitate to change.

Investing. Successful investors monitor their portfolio. They consider their goals, the current investment environment, and the many changes to the environment that may happen in the future. And they make changes when one or more parts of the portfolio are not performing well. They do not hold onto losing securities simply on the hope that losers turn into winners, nor hold on to winners forever thinking that prices only move up. Because hope is not a strategy.

  • Noise Cancellation

Chess. There’s a story about a high level chess game in which one of the players complained to the judge that, against the rules, his opponent was smoking. Looking at the opposing player, the judge saw an unlit cigar on the table. The complaining player then said, ‘yes, it’s not lit but he’s threatening to smoke, and the threat is more powerful than the execution!’ Clearly, the opposing player was effective in messing with the complaining players mind. And he succeeded in throwing the complainer off his game.

Investing. Questionable outside information often messes with investors minds, causing investors to sell in a panic when prices are low or greedily buy when security prices are high. Successful investors know to stay the course, stick with their plan, and not make investing decisions based on a herd stampeding one way or another, or articles published by a media industry that functions first and foremost for the purpose of attracting advertisers (i.e., money), and is often not a reliable or accurate source of information.

  • Ego Repression

Chess. Winning players are humble. They do not compare them self to other players. They are not ruled by ego, do not care about titles, what school someone attended, what kind of car their opponent drives, and recognize that they could lose on any given day.

Investing. Successful investors take winnings in stride. They do not compare them self nor measure their net worth against others. Instead, they are concerned with effectively carrying out their investment plans, caring for them self, protecting their family, and being grateful for what they have.


Revenge Of The Rube

After a fair amount of reading, and too many games played against the computer, I’m getting a decent handle on the game of chess. For me though, rather than chess skills informing investing ability, it’s my investment knowledge that may be playing a hand in learning how best to succeed at chess.

And I’ve resumed my games with KidMaster, who isn’t hugely thrilled with no longer being able to sucker me into poor moves, or winning every game. But he enjoys playing, and I enjoy playing with him. And though he still loves throwing it in my face when he wins, I’m guessing what he loves even more is hanging out with me, playing a game. As do I.


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Enter Buddha

A parent is to give freedom to the child. From the beginning, the effort is to help the child be him / her self. The parent does not exist to impose their ideas nor to give shoulds and should nots. Rather, the parent exists to support, strengthen and nourish the child.

Women: Beware Male Financial Advisors

85% of financial advisors are men. Of this 85%, the vast majority fail their female clientele. And this failure is largely two-pronged: first, it’s the result of knuckledragging men working in a testosterone laced environment that doesn’t try to learn, or is biologically incapable of learning, that women approach investing differently than men and; second, for both knuckledraggers and the more evolved males, subconscious negative gender perceptions come into play.


BCG Study Confirms Male Financial Advisors Are Bumblers

The Boston Consulting Group (BCG) is a management consulting firm with more than 60 offices worldwide. A few years back, BCG undertook a Comprehensive Study focused on women’s experience with financial advisors (FA).

The study’s results revealed that women expressed many of the same complaints about FAs as did men, such as: dissatisfaction with communication, quality of advice, lack of tailored solutions, and having to wade through an absurd pile of bureaucracy.

While all that could be fairly anticipated, what raised hairy eyebrows were these additional frustrations voiced by women: a sense of subordination, unequal access to information and deals, inadequate attention, and less favourable financial terms.

And we’re not talking about a few dissatisfied outliers. Nope. What we have here is a majority revolt as borne out by the following unfudged numbers:

  • 73% of women say they’re not satisfied with financial advisory services.
  • 80% of widowed women fire the FA within one year of their husband’s death, then hire a new FA.
  • 87% of women said they could not find a FA with whom they ‘connect’.

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It’s All About Relationships

Referring to the above bullet points, let’s deal with issues one and three first.

Annoying, Socially Inept FA

It’s no surprise why the majority of women are annoyed, or downright frustrated, by their FA.

The financial industry trains FAs to think in a detached, analytical manner, with the only item of any consequence being money. And as long as the FA earns money for clients, as long as portfolios perform according to plan, then clients will be happy. Granted, this approach works for most men.

But not so for women. Instead, women take investing proficiency for granted in a FA. After all, it’s their job and the expectation is for the FA to perform well at their job. What matters more is building a trusting relationship, connecting, with the person charged with responsibility for their money.

Unfortunately, too many male FAs have a knack for chipping away at trust, thereby alienating female clients. They do so in a number of ways including:

  • Lack of Respect. Disrespecting women through time honoured patronization and condescension, speaking to female clients as if only a man could do the job and the female client should not bother to ask trivial questions because, surely, investing is beyond a woman’s capacity;
  • Harmful Stereotypes. Stereotyping money management needs according to gender. As if one-size-fits-all women investors. As if all women should be shuttled into low risk securities. As if investment decisions are solely based on social issues, such as sustainable or green investments, rather than considering these issues together with portfolio strategies focused on performance. As if women are not interested in investing. As if women are not the decision-maker where a married couple is involved; and
  • Dishonesty. Being evasive about fees and charging women higher fees than men.

Good Riddance

On to the second issue, 4 out of 5 women fire the FA after hubby checks out of this planet. Kudos to them!

Look, imagine you and your spouse deal with a FA for an extended period of time during which the FA consistently, repeatedly, unfailingly speaks only to hubby regarding investment matters because hubby was marked as the go to guy on all joint accounts as soon as he gave FA a firm, manly handshake and mentioned last nights score in the football game.

And when you try to weigh in, you’re undermined, belittled, treated as if you are an unknowing child. What’s shocking and unfortunate is that the FA stayed in the picture for as long as he did.


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So What if Male Financial Advisors Don’t Understand Women?

So … what does it matter that male FAs don’t understand female clients?

Well, in the financial advisory business, the more money you manage, the more money you earn. Because fees are most often generated as a percentage of assets held, the goal is to continually increase the amount of money you manage.

To be clear about this, if you’re a FA, and you manage assets for clients in the neighborhood of $50 million (a successful FA with 5-8 years in the business hits this target), and you charge a 1% fee on assets, that translates to gross earnings of $500,000. A tidy sum.

Still, regardless of how much they earn, a typical FA is always searching for more dough, either to grow their business or to replace clients who have chosen to leave. And if the FA fails to connect with women on the money management front, then he’s seriously denting his earning potential.

Why? Because women now account for 57% of university undergraduates and 59% of graduate school students in the USA, and higher education typically means higher earning power. Because 40% of women earn more money than their husbands. Because more and more women have joined the ranks of senior corporate executives, professionals, and go it alone entrepreneurs, earning larger and larger paychecks. Because the greatest wealth transfer ever is happening now, with trillions of dollars being inherited by Baby Boomers and Gen Xers, and owing to women living longer than men, the bulk of this money eventually ends up under a woman’s full control. Because, today, women control almost $40 Trillion (USD) or 30% of the world’s wealth, and their share of the global money pie is projected to continue growing.

So if you’re a male FA, um, yes, definitely, you want to learn to walk upright to ensure your clientele includes women.


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What Women Want, Investment Wise

Here’s the thing: you don’t get to manage the money unless you invest in the client relationship on the clients terms.

This means listening, really listening to the client, trying to understand her concerns, and not thinking you know what is best for her. It means being honest about fees, empathizing with her fears around money, tamping down the standard male bluster, talking a whole lot less about your self, and creating a financial plan that connects the client to her whole life instead of obsessively focusing on making money as an end in itself.


Is Evolution Real?

The way I see it, about half the human population wants to turn the clock back to some illusory golden era, the other half wants to move forward.

If your FA belongs to the delusional pack, and is more comfortable pretending he’s master of the universe, then its time for a switch. Whether married, single, divorced or widowed, fire Mr. Knuckledragger and find your self an emotionally balanced, 21st century FA, whether male or female, someone you can trust, someone who truly cares about you and your financial future.

Of course, for all you BuddhaMoney members, you may recall the blog posted a few months ago about whether or not you should hire a FA or a Robo-Advisor.

If a Robo-Advisor suits you, well then, all these issues I’ve been talking about, they go poof! And you have a pleasant investing experience.

In this regard, for Americans, take a look at ElleVest which is a Robo-Advisor directed to women. I haven’t used the service so I can’t vouch for them, but they’re worth checking out. For Canadians, so sorry, you Canucks are behind the curve on this one as there’s no comparable service offered in Canada just yet.

Timeshares Are A Bogus Investment

Jesse and Janine vacationed in Hawaii last year for the first time. And like so many others who have ventured to the Land Of Bliss, they were smitten upon arrival. Lush, tropical environment, sandy beaches, warm ocean waters, extraordinary rainforests, majestic volcanoes, out of this world snorkelling among friendly fish, deep blue sea diving, idyllic sunsets, hiking up mountain cliffs … how could anyone not fall in love?


Pssst! You Wanna Own a Piece of Paradise?

On their second day, after breakfast, J & J go for a stroll on the beach. Passing a Marriott hotel, they spot a well placed sign encouraging people to attend a seminar presentation on the topic of ‘How Anyone May Own Property In Hawaii’.

Though sceptical that they could afford to buy land in high priced Hawaii, they were intrigued. And once learning that simply for attending the 90-minute seminar they would receive three nights in an Orlando, Florida, hotel and two tickets to Disney theme parks for the rock bottom price of $99, they signed up.

So what happened next? For those of you who have subjected yourself to the agony of a timeshare presentation, this will sound familiar.


Jesse and Janine’s Unfortunate Adventure

Picture a large, well appointed conference room. Picture hordes of smiling sales people about to begin a sleek presentation. Picture about one hundred naïve, dreamy, excited vacationers eagerly waiting to learn how they may afford a part-time home in Paradise.

This is the scenario for a typical timeshare presentation. And here’s what happens at these high-pressure sales events:

  • Way Too Long. Instead of the advertised 90 minutes, the seminar went on for a grueling three hours.
  • Keep Coming At You. Not one, not two, not three but six salespeople will corner you, the potential buyer, relentlessly badgering you to buy.
  • Buy Now. Now! After the pitch and the badgering, you will be told (not asked) to make a decision. You will be told to make, ‘the best decision of your life’, and to do it now, commit to it now, before leaving the seminar.
  • Preying On Emotions. When the sales force realizes you’re not buying their pitch, they summon another weapon: guilt. Saying things like, ‘if you don’t buy, I won’t get paid and if I don’t get paid I can’t feed my family’. Or, ‘how could you accept our free gift without buying? Is that the kind of person you are?’ Nice. Real nice. Just the kind of folks everyone wants to deal with. Not.
  • Investment Blather. As if using guilt as a sales tool isn’t low enough, as an alternative way to reel you in, they outright lie about the timeshare’s investment value.
  • Locked-In. And for those who take the bait during the pressure packed seminar, handing over anywhere from $15,000 – $20,000 before leaving the room, don’t count on being told that you have the right to cancel, usually for up to seven days after signing the contract.

What Is A Timeshare, Anyway?

Before I tell you why timeshares are a bogus investment, I’ll do my best to be objective, and tell you a bit more about this investment nonsense, er, um, I mean, ownership opportunity.

So … what is it?

Also referred to as vacation or fractional ownership, a timeshare is a real estate program in which a residential property is divided among many owners who have purchased the right to use the property for a specific period of time, i.e., one or two weeks.

Typically, a timeshare refers to a room at a resort or vacation destination. Instead of paying full price for the room (like a hotel room), each ‘owner’ pays only a share of the property’s total cost. In return, the ‘owner’ is privileged to use the room at a pre-determined time. For example, if you buy a 1/52 share of a room, then you ‘own’ the room for one week each year.


Timeshares Come In Different Shapes and Sizes

Deed. Most timeshare purchases are ‘fee simple’ transactions that come with a title deed. This means that you’re buying a share of ownership, and may sell, rent or give away your share just like other kinds of real estate.

DeedLess. This type of ‘ownership’ structure is essentially a lease, with the owner buying usage rights for a specific number of years. At the end of the lease term, the buyer loses their right to use the property.

Vacation Club. This is slightly different than the standard timeshare set up. A vacation club is an organization that owns several timeshare properties in different locations. Buyers may choose to vacation at rooms in the different properties.

Points Program. Another variation on the standard timeshare set up. Here, you buy membership in a program that gives you a certain number of points that may be exchanged for rooms at different properties. 


Cost Of A Timeshare?

Hanging on to your hat? Get this: average cost is $19,000 (USD)! On top of that, lucky buyers fork over an annual maintenance fee that usually tallies between $650-$1,000 (USD).

Given that these are average prices, cost will vary according to several factors including:

  • Location.
  • Time of year the room will be occupied, i.e., winter holidays and spring break will cost more.
  • Property condition.
  • Amenities.
  • New timeshare or resale property.
  • Deed or No-Deed.
  • Whether the timeshare is part of a brand such as Disney.

Tell Me Again … Why Would I Want To Buy A Timeshare?

Okay, really, I have no idea. It makes no financial sense to me why anyone would purchase a timeshare. All I can fathom is that the idea of ‘ownership’ taps into some primal need to plant a stake, to claim ownership of territory.

My lack of understanding aside, here’s what some claim are advantages of buying a timeshare:

  • The perfect plan for those with a Certain, Guaranteed, Unchanging vacation pattern, who want to prepay for their vacation, i.e., same location, same dates, same price, same room year after year.
  • Access to condo room for those without resources to buy a condo outright.
  • Not responsible for repairs, upkeep, or security, as would be the case if you purchased full ownership of a condo.
  • Opportunity to sublet the room during your reserved vacation time thereby earning money.
  • Option to buy a spacious 2 or 3 bedroom timeshare. The benefit here would be for a large family that would otherwise pay for more than one hotel room when vacationing.
  • Option to trade reserved dates and location with other timeshare owners.

Now Tell Me Why Timeshare Ownership Is Just Plain Silly, And Sometimes Harmful

Out of all of the so-called advantages, the only one that I don’t take issue with is the first. I mean, if you prize certainty of vacation location and dates above all else, including whether you’re overpaying for your vacation, then a timeshare is for you.

As for the other ‘advantages’, they’re a truckload of hooey. Here’s why:

  • NOT AN INVESTMENT. Forgive me, I put that subheading in CAPS. And yes, I’m raising my voice here because it’s really important you know that a timeshare is not an investment. It just isn’t.
  • Immediate Loss Of Value. Unlike buying residential real estate, most timeshares lose value, sometimes nearly all resale value, as soon as the purchase is consummated.
  • Minimal to Non-Existent Resale Value. Because there is a huge supply of timeshares, supply that far exceeds demand, it can be difficult to even give them away, never mind recoup anywhere close to your ‘principle payment’.
[Chewy Bit. Notice I did not say ‘investment’; you will not make money on a timeshare sale; the only people making money are Developers and Salespeople who sell the timeshare. In this regard, consider that a timeshare unit is sold at a price of $20,000 per week. If sold by the Developer for 50 weeks, then Developer makes a cool $1 million plus tens of thousands of dollars in fees for a unit that likely cost much less than that to build].

  • No Tax Benefit. Selling your timeshare at a loss does not allow you to claim a Capital Loss for tax purposes, as you would do with Real Investments.
  • Costs. True, you are not responsible for upkeep but you do pay an annual fee and this annual fee commonly increases every year. As well, you are held responsible for closing costs, broker commissions, and special assessment fees. And here’s a fun fact: if you don’t pay maintenance fees or special assessment fees, the Developer has the right to foreclose on your timeshare.
  • More Costs. If you take a loan to finance the purchase, you’re paying interest on top of the principal. Horrible, horrible idea to finance a timeshare, and increase the amount of money you’re tossing into a dark hole.
  • Locked-In. Some timeshare contracts lock you in for life! How insane is that?! Others lock you in for several years. This means you are responsible for all fees for the duration of the contract, whether or not you make use of the timeshare property.
  • Uncertain Availability. The supposed advantage of vacationing at the same place, same time may be hard to come by. It is not unheard of for a timeshare company to misrepresent the ease of scheduling your vacation time. Also, most vacationers want to reserve ‘their room’ for the same time period. Of course, this isn’t possible.

If You’re Still Gung Ho About Timeshares …

Fortunate for J&J, ignoring excessive pressure to stay for the entire spiel, they walked out of the presentation without handing over a dime. Others remained and a percentage of those remaining likely bought themselves a piece of … um, something?

Despite my obvious concerns about timeshares, don’t take my word for it. If interested in a timeshare, then by all means do your research and determine whether it is best for you. To help you along, keep the following in mind:

  • A timeshare is more like a lifestyle purchase. It is not an investment (right, I’ve mentioned this a gazillion times now).
  • Crunch the numbers and be sure to include depreciation (as soon as you get the keys, resale value drops anywhere from 50% to 100%), travel costs, maintenance fees, and the value to you of prepaying for future vacations.
  • Ask whether you want to visit the same vacation destination year in, year out. Or if you prefer to mix up your vacation destinations and activities.
  • If salespeople are less than forthright with you, or if they do not offer a grace period allowing you to change your mind and cancel the purchase, then its best to walk away.
  • Do not pay any funds toward purchase without first inspecting the vacation property. I mean, would you buy any other real estate sight unseen?
  • If you need to borrow funds to make the purchase, then a timeshare is absolutely not suitable for you. And its telling that many banks will not lend money for a timeshare purchase. Not surprisingly, a developer will not hesitate to finance the purchase cost at a high rate of interest.

Fairy Tale Ending

You’ll be pleased to know that Jesse and Janine resumed their vacation immediately after leaving the timeshare presentation and had an excellent time. So much so that they expect to return one day, maybe visit one of the other Hawaiian islands, and stay at a different hotel, and not give another thought to wasting their valuable time with any more timeshare shtick.

 

 

 

 

 

 

 

 

Thinking About Investing In A Condo?

There’s something about owning real estate that gets folks going all ga ga. On a primal level, we humans crave to see, touch, even smell (ya, odd, but hey, we’re a diverse species) our investments, and real estate offers the chance to do just that and more.

The more part? Well, there’s the Sunday drives where you may visit your property for inspection or simply wave hello, and feel good about a particular piece of wood, brick, steel or stucco belonging to you. And you may show your friends and say things like, ‘hey, lets meet at my investment property before we go for dinner’. And all that will give you the warm and fuzzies like no stock ever could.

But, putting on my investor cap, aside from being a source of the occasional feel goods, does it make money sense to buy a condo for investment purposes?

Talking This And That

Alright, first off, I can’t give you a blanket yes or no to that question. There are just too many variables, too many ‘it depends on this and it depends on that’ scenarios such as: the particular neighborhood where you buy; is property demand growing owing to neighborhood/town/city growth; is the condo structurally sound or will the building need major repairs in the near future; did you lock into a smoking hot deal, like those on offer in 2008-2009 in many parts of the USA; what are your financing terms; did you hire a property manager or will you be responsible for dealing with maintenance, repairs and tenants; do you enjoy being a landlord? do you understand that property ownership is a business in itself, requiring your commitment of time and energy if it is to be successful …

All of these issues will affect both your income stream (i.e., rent) and whether or not the condo’s value increases over the years to come.

Uh Oh, I Didn’t Think About Those

Look, I’m not trying to dissuade anyone from investing in a condo. But I am saying there’s a good chance that it may not be all your friends say its cracked up to be. And I’m saying that you have to look at downsides and potential pitfalls, you have to fully inform your self as to what you’re getting into, before starting any business or venturing into any investment.

Working For A Living

Running your own property investment gig takes commitment, skill, and energy. And to do so successfully, you need to know how the game works. In this regard, consider the following Need-To-Knows:

  • Condo Fees

You’ll pay a monthly fee, akin to a maintenance fee, that goes toward keeping the building in good working order. When you’re budgeting expenses, be sure to factor this into ownership costs. And count on the fee increasing at least as much as the rate of inflation.

  • Who’s Running The Show?

Owners are elected to the Condo Association, which is usually made up of between 5 to 9 people. When owner-occupiers serve on the Condo Association, they typically take better care of the property. Landlords not so much as they’re more concerned with keeping monthly fees to a minimum so they can maximize personal cash flow.

  • Condo Rules

This condo rule thing, it’s fairly wide open as far as what may or may not be permitted. Common examples include: uniform colors throughout the building, no pets, and even no kids. For the potential landlord, well, it goes without saying that you need to ensure that the rules do not prohibit renting.

  • Joy of Assessments

Let’s say the building needs a new roof or owners vote to replace single pane windows with double pane. To pay for it, the Condo association has the power to assess a special levy on all owners. Meaning, you’re obligated to pay your share of repairs whether you want the repairs or not.

Typically, it will be a lump sum payable by a certain date. In the Pacific Northwest, during the past twenty years or so, many buildings constructed of wood in the 1970s or 80s needed to have the entire building enveloped and repaired owing to structural water infiltration. The cost per owner? Somewhere in the ballpark of $30,000 to $60,000. Not pocket change.

And once in a while, a rebel owner would put on their complaining pants, state their objection, and refuse to pay their share of the Assessment. What happens then? The Condo Association has the right to put a lien on Rebel Owner’s unit that may prevent future sale of the unit. Okay, all fine and good and just and fair but, in the meantime, funds need to be raised for repairs. Who shoulders the extra cost? The other owners.

  • Condo Association Finances

Before buying, you absolutely must review Condo Association finances. Even better (and highly recommended) is if you have an experienced condo lawyer review the books because they will know exactly what to look for, and what to flag.

Common issues include:

Financial Reserve. Does the Condo Association maintain a financial reserve? If so, how much is the reserve? If the reserve is on the teeny tiny side or there is none, don’t be surprised to receive occasional assessments for major repairs.

Condo Fee Steady. If the Condo fee hasn’t risen for several years, expect an increase soon. And if the fee was recently raised, find out why. It’s possible that an increase reflects a need to raise more funds to pay for repairs.

If The Purpose Is Investing, Think About A REIT Or Two Or Three, Instead Of A Condo 

If you’re not too keen on expending the time and energy required to run your own property investing business, i.e., manage repairs, attend to tenants, fill vacancies, arrange a mortgage, and pay property taxes, then consider investing in REITS.

A Real Estate Investment Trust (REIT) is a company that owns or finances income-producing real estate.

Many REITS are publicly traded so owning shares is a simple matter of paying under $10 to your discount broker and making the buy. Yup, it’s that simple. And you get to keep your evenings and weekends free (instead of fixing the toilet in the condo or meeting with the bookkeeper) while earning a monthly dividend of anywhere between three and ten per cent (the dividend yield depends on the particular REIT) and reaping the benefits of any share price increase.

So what’s not to like about a well managed REIT? Well, before I blather on about the benefits of REITS, here are two potential downsides when compared to being a property owner:

  • First, you’re not in control of the property. Instead, you’ve outsourced control to the REIT management team. Personally, I don’t see an issue here, to farm out management to people who are skilled and experienced in the real estate investing game. That said, property owners enjoy doing business their way, they want control.
  • Second, REIT share prices don’t zoom to the moon. So, if you own property in a neighborhood where prices are skyrocketing, then your property investment will likely perform better than a REIT.

For those of you who do not wish to speculate on property prices, are not built to be a landlord, and prefer a virtually stress free property investment vehicle, choose REITs because …

Diversification

REITS offer diversification in that they hold many properties situated in different geographical locations. And they operate in all sorts of property related businesses including: office, industrial, healthcare, shopping centers, mortgage/finance companies, student housing, hotels, self-storage, and apartment buildings.

Steady Income

A solid REIT provides stable monthly income and annual dividend growth. Think of each dividend increase as a rent increase charged to tenants – the beauty of it is that you don’t deal with any tenants.

Outsourcing Management

Instead of you taking care of buying, managing and selling property, with all its attendant costs and demands on your time, REIT owners are investing in the company’s property management expertise, and their ability to effectively run a public company, including improving its share price and cash flow.

Low Stress

Every month, the REIT drops a dividend payment into your investment account, and occasionally you check the share price. Stressful? As much as a day on the beach.

Liquidity

On any given day that stock markets are open for business, you can sell shares in your REIT for a total transaction cost of under $10 (assuming you’re using a discount broker). Not so with real estate. Rather, it takes time to find a buyer. There is a waiting period up to ninety days before closing. And you need to hire a lawyer and real estate agent, at a minimum, and often pay a government land transfer fee in the thousands. Typically, closing costs run anywhere between four and eight per cent of the sale price.

What Works For You

If you haven’t guessed by now, I’m more of a fan of owning solid REITs instead of income producing property.

REIT ownership is simple, and I don’t have to bother with (re: stress) buying, managing and selling property; which leaves more time for life outside of investing such as hanging out with my kids, going for a walk with my wife, hiking and yoga. Balance.

Still, it’s not a matter of one being ‘better’ than the other. If you enjoy being a landlord and all its responsibilities, and are committed to making your own property investment business a success, then go for it. For those who want exposure to real estate but do not have the time and/or inclination to be a landlord, REITs are an excellent alternative.


ps. huge thanks to American Advisors Group for their permission to use the image introducing this post!

Property Investing: Need To Knows

Long, long before Duddy Kravitz’s (The Apprenticeship of Duddy Kravitz by Mordechai Richler) father told him, “A man without land is nobody,” investing in real estate was one of the best games in town. You bought property, rented it out, collected monthly checks, and watched your wealth grow. Historically, price appreciation was a bonus since the primary objective of most property investors was to generate income.

Today, investing in real estate remains a heckuva game.

[Chewy Bit: this post is limited to discussing investing in residential real estate, such as a condo].

And though income potential may be appealing, during the past decade or two many markets in North America, and the West in general, have seen property values increasing at a far higher rate than the historical average of about three to six per cent.

Sounds enticing, yes?  Then why doesn’t every investor diversify their portfolio outside of ETFs, stocks, bonds, and find themselves a bricks and mortar investment? Well, the thing is … while property investing has strong potential upside, making money at it is by no means a slam dunk.

Lord Of The Land Material?

Sure, there’s something emotionally appealing about owning land, about being able to stand tall, chest puffed out, arms held wide open, proudly announcing, ‘Welcome to my Land!’

But I’m here to tell you not to buy into that silly ego nonsense. Being a landlord is not a simple role and its not for everyone. Rather, it’s more like a part-time job: dealing with tenants, property maintenance, unexpected costs, and guaranteed headaches now and then.

And like any investment, before you dive in, you have to do your research and figure out not only whether a particular property is suitable but, as importantly, whether you are suited to real estate investing.

Things To Be On The Lookout For

Most definitely, rental property may provide you with a stable source of income. But like any investment, you need to fully and completely and absolutely understand what you are getting into before you sign on the dotted line.

And you really, really, really, have to think hard about a bunch of issues (see below) that must be factored into purchase deliberations before you get all antsy in the pants and rush out to buy:

  • Financial Might. As a potential buyer, you should be financially secure. If your job security is in question or the purchase might compromise financial goals that are higher on your list of priorities, then you shouldn’t be considering the purchase of investment property.
  • To Mortgage or Not To Mortgage. If you’re not paying all cash for the property purchase, then you’ll be arranging financing. Which means, naturally, that much thought must be given to the issue of whether or not to take on debt.

It’s not that all debt is BAAAADDDD. It’s not. Especially when you’re borrowing for the purpose of earning income, and that income will be sufficient to cover financing payments, property taxes, monthly condo fees and repairs. And every time you make a mortgage payment, you’re increasing your equity stake in the property. Bonus!

But Debt still equals Risk. And if you already have a mortgage on your home, or your financing a car, or the kids are off to university soon, or you otherwise carry large debts or expect to incur large expenses in the near future, you have to run the numbers and objectively consider whether it’s wise to take on more debt, i.e., more risk.

  • Interest Rates. We live in a wildly low interest rate world but that’s going to change, sooner rather than later (so says BuddhaMoney’s crystal ball). As interest rates go up, so will your cost of borrowing. In turn, higher financing costs will reduce your net return unless you’re able to raise rent.
  • When To Buy. All investment markets are cyclical. And just like buying stocks, you want to buy real estate when prices are low, when the market is weak. Because buying low increases the odds that the principal value of your property will appreciate in price over the long haul.
  • Property Taxes. This is just one of many costs of ownership. Before you purchase, find out how much in property taxes are to be paid during the year in which you buy. Then take a look at property taxes for the five preceding years, to see if there is a trend or a typical percentage increase.

Sure, this information will better inform you of overall costs, but you still  won’t know with any certainty how much, if any, property taxes will increase next year or any year thereafter afterward. So do the wise thing: to minimize the odds of there being any financial surprises, and ensuring the property is affordable, plan for taxes increasing at a percentage rate higher than the past typical increase.

  • Wear and Tear, Grin and Bear. In the usual course of owing a residential property, maintenance and repairs are needed. Whether you need the washer or fridge repaired, walls freshened up with paint, or the hot water heater replaced, you will incur maintenance and repair costs. And if you’re not the kind of gal/guy who cares to get your hands dirty and callused by undertaking repairs your self, then repairs will cost you that much more.
  • It’s the Tenant Calling … Again! Okay, what do you think of this scenario: tenant calls you at two in the morning. Apparently, the toilet overflowed and there’s now a rising lake inside the condo.

Or … tenant is late with their rent. Then simply stops paying rent. And you’re not familiar with local laws so you higher a lawyer (i.e., money out of your pocket) and pop Tylenol for the next thirty days because you haven’t off-loaded property management to someone else because that would eat into net return.

Or … something innocuous like tenant calling at nine in the evening asking you to drop by to change a light bulb that they cannot unscrew despite their two university degrees.

Hey, that’s reality folks. You may be Lord of the Manor but that doesn’t mean you’re always walking in the rose garden. From minor annoyances to major inconveniences, there is a price to pay and time to give. So don’t underestimate the amount of work involved in dealing with your tenant.

  • Evil Renter Person. You may have heard a story or two about renter’s doing serious damage to a condo. Though I tend to believe that most renters act honestly and respectfully, there remains the possibility that your condo is leased to Evil Renter Person. And when damage happens, guess who’s going to pay for repairs?

If Evil Renter Person escapes from your clutches, never to be seen or heard from again, then you, Property Lord, are responsible for paying repair costs.

Or … you may get lucky and Evil Renter Person may accept responsibility and reimburse you for repair costs.

Or … your insurance may cover the damage.

Or … the security deposit may be sufficient to cover repair costs.

However it works out, dealing with renter caused property damage is a headache of varying pain thresholds.

To best protect yourself: (1) before agreeing to lease, meet with prospective tenant at least once if not two or three times to get a feel for who will be living in your property; (2) before agreeing to lease, thoroughly review all information concerning prospective tenant; (3) retain a lawyer to review the lease agreement, ensuring the agreement covers damage caused by the renter and; (4) require a security deposit, minimum one month’s rent, two is even better.

Ya, Ya … So There’s Risk … How Much Money Will I Make?

You’re in the property investing game to earn money. And with rental properties, income is earned via rent payments. Once you’ve assessed applicable risks, and decided they are manageable, you’ll need to calculate how much income this baby’s going to drop into your account each month.

Here’s a straightforward example:

  • If property cost is $400,000;
  • And the property rents for $2000 / month;
  • Then you receive $24,000 annually (i.e., $2000 x 12 months = $24,000), which works out to 6% gross return

[Chewy Bit: gross return means we have not yet calculated expenses].

That said, you should know that rent payments are not guaranteed from the day you purchase the property.

What I mean is that there may be times when the property sits empty earning bubkus!  Such as (1) if the rental opportunity is typically seasonal, not year-round; (2) those times you’re searching for a new tenant; or (3) Evil Renter Person refuses to pay rent and you have to jump through legal hoops before evicting tenant.

Spend Money To Make Money

That $24,000 I mentioned above, that’s also known as the property’s cash flow.

Deduct all expenses from cash flow and, voila, you figure out how much money gravitates to your pocket, i.e., net return.

What kind of expenses are we talking about?

  • First, you have Fixed Expenses. Meaning, expenses you’ll incur every year, i.e., property taxes, insurance, and common maintenance and repairs.
  • Second, there’s your Surprise!-wasn’t-planning-for-this-expenses, like replacing the roof or air conditioner, or a pet shredded the carpet.

Now, as an example, if expenses run you $5,000/ year, this leaves you with a net return of $19,000 ($24,000-$5,000) or a 4.75% return. When considering whether the investment is worthwhile, you’ll want to calculate the approximate net return.

And when you’re doing so, be sure not to underestimate  expenses. Because it’s no fun if you go into this investment thinking you’ll make money and then you don’t.

[Chewy Bit: most common mistake among novice real estate investors is to inaccurately minimize costs of renovation and ongoing maintenance].

Streams and Streams of Cash

The thinking goes that rental properties provide a stable income stream that is separate from all of your other investment and retirement accounts and not necessarily subject to the same risks. And if you understand the risks involved, can afford to make the purchase, and are willing and able to wear the Landlord hat, then odds are you’ll have one solid investment supplementing your income each month, building equity, and contributing to a financially secure retirement.

But you know what? For me, I’m thinking: is it worth the effort to buy an investment property? I mean, there’s a simpler way to gain exposure to the real estate sector if that’s what I’m looking for.

I pay my discount broker $9.99 and buy a Real Estate Investment Trust (REIT) that pays me a monthly income of anywhere between six and nine per cent.

Sure, REIT units may go down in price, just like real estate value may decrease. But if I’m holding for the long run, I’m quite comfortable taking the risk that the REITs principal value will not decrease, and in fact will likely increase. In the meantime, I’m earning my six to nine per cent every month with the added pleasure of not having to take on any of the risks involved with purchasing an investment property such as managing a tenant, financing a property, learning home repairs, or tying up a boatload of capital in the property.

Bottom line: If you want a piece of real estate, then it comes down to deciding not only which investment will provide the better return, or which investment will save you money on Tylenol, but as importantly, which one is a better fit for you: REITs or bricks and mortar.

 

 

 

Money & Marriage: Troublesome Mix

Holding top spot on the chart tracking Things-That-Couples-Fight-About? Money.

No matter how much you have or don’t have, money triggers disagreement between couples. Why? Well, let’s introduce this issue by saying that everyone has their our own approach to spending, saving and investing money. And it’s rare for two people to consistently be on the same page with their money thoughts and feelings.

But here’s the thing: it’s never just about money. It’s deeper than that. It’s complicated and thorny and knotty and tricky and just plain tough.

Below the surface, sowing the seeds for argument, is the issue we all have to face one day (no, not the one where you question why and how you morphed into your parent): what does money mean to you?

  • Does money represent Safety? Power? Love? Control? Success? Freedom? Prestige? Generosity?
  • What did you learn from your parents (our typical role models for managing money), how do you emulate their saving and spending patterns, and have you questioned why you emulate them at all?
  • Do you share money decisions with your partner? If yes, do both of you have a fair and equal say regarding money decisions? If not, you absolutely have to look into this because, unless your partner sports wings (hint: heavenly angel), resentment is growing.
  • As for the person earning less money, is their self-esteem taking a hit; feeling as though they don’t measure up because they’re not contributing enough dough to the relationship? And maybe not receiving enough respect for other contributions and accomplishments?

Potentially, it’s a minefield, this whole money and relationships business! But do not fret, for all is not lost for those who read on.

Communication and Flexibility

Okay, so you love each other, maybe you’re even nuts about each other (good for you!) but when it comes to finances, there is close to zero compatibility. What do you do?

Talk to each other. Open up. Reveal your hopes and dreams and fears and debts and assets. In a relaxed, peaceful way because, hey, this is your partner and you love her/him, and there’s no place for anxiety where two healthy adults are discussing what is the best way forward for both of them.

When you’re talking, expect to compromise, to take one or two or three for the team because that’s what teammates do for each other. They understand that money management is a joint responsibility, recognize the pressure that their partner is under, empathize with the particular emotional money-related baggage carried by their partner, and help out where possible. The bonus of working together? Disagreements are kept to a minimum, and you’ll respect each other that much more.

No Two Ways About It: Budgets Are Not Sexy

Sexy, shmexy. So it’s not your idea of fun. Okay, got it. Opinion noted. Now, forget about judging the process and acknowledge that drafting a family budget is The Most Effective Way To Track Your Money.

And when you track your money, you are soooooo much more likely to reduce frivolous spending, contribute to savings, achieve your financial goals and … (drum roll please) minimize money related disagreements thereby making for a more loving and peaceful relationship and life.

I mean, if you both want to retire at, say, age 55, and move to Peru because you do not want to live another day without sipping their unbelievably delicious, delectable coffee then, budget-wise, what do you have to do to make this happen?

If you want to buy a home, top up your investment accounts, save for the kids education costs, pay off the mortgage … again, figure out what needs to be done and structure the budget to make goals a reality.

As the architect of your life, you are much more likely to build according to plan when you actually have a plan, i.e, a budget. And you review the plan once or twice each year, adjusting as necessary to account for life changes. The alternative, which rarely works out well, is something called ‘a hope and prayer’. I don’t recommend this.

For those who get a headache just thinking about the task of drafting a budget, well, technology to the rescue! There are a whole bunch of money management programs that smooth the process. For starters, take a look at Mint and Learnvest.

Whether you rely on this kind of program or not, the point is for you to do whatever you need to get that budget in place, to ensure your plans turn into reality according to your schedule.

Two Becomes One

In a healthy relationship, there is no more ‘yours’ or ‘mine’ when it comes to money matters. When you hitch your wagon to another, you sign up for the assets and the debts.

As a team, you’re building together for a common future. And if you don’t accept this line of thinking, um, well, money issues will definitely be an ongoing source of stress. Because by not accepting the team concept, you’re going at it alone and, last time I checked, marriage was exclusively a team game. The go-it-alone approach? That’s just a sign of deeper issues, starting with lack of respect and trust that will ultimately corrode your relationship.

Shhhh! It’s Secret

Referring back to the ‘Marriage Is A Team Game’ line of thinking, don’t hide money issues from your partner. Don’t keep a secret credit card or make large purchases without telling your partner. In the wider world, that kind of behavior is called deception and it’s not looked upon kindly. Because if you intentionally deceive your partner, then it’s not about money, it’s about trust, and lack of trust is not healthy for any relationship.

That said, no one cares to be micro-managed. In this regard, you may want to agree upon a dollar amount that would activate the I-should-tell-my-partner-about-this purchase-because-I-love-my-partner. For example, both of you agree to make a point of telling the other when making a purchase costing more than $100, or whatever dollar amount suits you. And this sort of behavior has the added bonus of reinforcing trust and respect, and making life peaceful and loving for the long haul.

Thrifty Couples Are Happier

It’s not about the money or being a miser. Rather, it’s about what you value. If you value relationships, friends, giving effort, and purpose, then you walk hand in hand with happiness. And if you value loading up your existence with material stuff, then the worse off you’ll be as far as happiness goes.

Of course, this notion of value I’m spouting is from a bygone era. It doesn’t have to be but that seems to be the general direction of things.

Fact is, we live in a society that elevates a corporate culture promoting product cycles lasting maybe six months, one where we consumers are encouraged to buy the latest model, the biggest home, the most luxurious car, and spare no expense because (hello banks and lending companies!) you have the option of borrowing money and going further into debt.

Stuff. It’s a powerful draw for most of us. The mere wanting of stuff is enough to turn some of us into bobbleheads; bouncing around excitedly, our mind shut off from any other thoughts, like the inevitable weight we’ll feel under the burden of credit card debt or home line of credit debt, and the gloomy pessimism we experience when our financial hole gets deeper and deeper. Most importantly, the damage that excessive consumption and resulting debt does to meaningful relationships.

The thing is, the so-called Disney created ‘American Dream’, it’s not about having everything you want. Nope. It’s about achieving self-sufficiency, knowing that you do not have to rely on someone else for your livelihood. And the more you spend, the more you consume, the less likely you will ever know this kind of freedom or happiness, the kind that thrifty couples know really well.

Manufacturing Trouble

Sure, potentially, money and relationships present a minefield of trouble. But it doesn’t have to be this way. And it won’t be this way if you’re willing to put in the effort to understand the source of your own feelings about money, and to respect, trust and engage in an ongoing, open dialogue with your partner. Do this and eventually money will lose the top spot on the Things-That-Couples-Fight-About chart.


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Enter Buddha

Love one another, but make not a bond of love.
Let it rather be a moving sea between the shores of your souls.
Fill each other’s cup but drink not from one cup.
Give one another of your bread but eat not from the same loaf
Sing and dance together and be joyous, but let each one of you be alone,
Even as the strings of a lute are alone though they quiver with the same music.

 

 

Powerful Women Pay A Price

Sheryl Sandberg, Facebook Inc. (NASDAQ:FB) Chief Operating Officer, wrote a book titled, Lean In: Women, Work, and the Will to Lead. The crux of the book’s message is that equal treatment of genders remains a far way off. To remedy this problem, argues Sandberg, more women need to be in powerful positions.

It isn’t that all women need to be political, financial or business leaders. Rather, the message is that women, in general, would benefit from more women in leadership positions; leaders who would give voice to women’s needs and concerns thereby resulting in more equitable regard for all women.

But hey, I’m a guy. Best to get some back up here from an extraordinary woman, Christine Lagarde, Managing Director, International Monetary Fund, who said:

When it comes to thinking about women in powerful positions, we are too often blinded by the daggers of the mind, infected by the malignant mind bugs that mire us in the prejudices of the past.

We need a 21st century mentality for women’s economic participation. We need to flush away the flotsam of ingrained gender inequality.”

Courage and Smarts

Certainly, many women today have taken hold the reins and then some. A few random examples include: Ginni Rometty, IBM Chief Executive Officer (NYSE:IBM); Indra Nooyi, Pepsi Chief Executive Officer (NYSE:PEP); Angela Merkel, Chancellor of Germany; Janet Yellen, USA Federal Reserve Chair; Jody Wilson-Raybould, Attorney General of Canada; and Abigail Johnson, Fidelity Investments USA Chief Executive Officer.

These women are to be admired for a host of reasons, not the least of which is overcoming bias inherent in a societal system built by, and favoring, men.

As importantly, they may be looked upon as positive role models, as people contributing to refashioning a society blinking less and less when a woman rises to the top, be it in business, politics, finance, law, media, medicine or any other industry.

And owing to the courage and smarts of this sort of exceptional woman, my teenage daughter is growing up in a society where arbitrary, destructive, gender barriers continue to be pushed aside by determined, forward thinking, progressive, not-stuck-in-the-Pleistocene-era women and men. For this I am grateful. For a kinder, gentler world, we will all benefit.

Cost Of Breaking Glass Ceiling

Yet, is there a downside cost to women climbing a stairway to the corner office?

While shattering of the metaphorical glass ceiling becomes more commonplace, and some women achieve wealth and/or power during their ascent, career success may come at the expense of marriage.

According to results of a study undertaken by psychology researchers Dr. Brian Lewis (University of California in Los Angeles) and Stephanie L. Brown (University of Michigan), published in the journal Evolution and Human Behaviour, many men tolerate, accept, even embrace women participating in the economy on a more equal basis. However, when it comes to wading into the marriage market, men of all stripes show a marked preference for less accomplished women.

The theory goes like this: men’s preference for less dominant women is “rooted in the evolutionary drive to pass on genes to the next generation.”

Meaning, a long time ago, thy creature known as knuckle dragging man possessed limited resources. Not wanting to dedicate sparse means to another man’s child, he sought a submissive woman, one whose behaviour he could “exert some kind of influence” over in order to reduce the threat of paternal uncertainty. Um … to restate that in street lingo, a woman whom HE could control, who would not be seduced by some other hairy, grunting dude.

And as a result of man’s historical preference for obedient women, successive generations of males inherited genes encoding attraction to compliant women.

Evolution Interruptus

So, the more women achieve, the less desirable they become?

If the study’s findings are accurate then, not unlike fruit flies, man is biologically programmed to behave a certain way, including seeking control of his mate. If so, then vanity and insecurity may no longer be held responsible for man’s general avoidance of more accomplished women since, at least in a romantic context, evolution may have passed him by.