Profit From Your Everyday Financial Problems

ONE of the easiest ways to make money is to seek opportunities where others are complaining about something. There is often a silver lining to every financial problem, and learning how to take advantage of that can be very profitable. 🙂

Here are 4 common financial problems I hear people constantly complain about and my solution to each one.

The financial problem: Housing prices too expensive.

What other people do: Complain they can’t afford to live in the city anymore.

What you can do instead: Buy real estate or offer financing to others. Take Vancouver as an example. It’s land size is not getting any bigger, but the population will continue to expand. The following tables show the development of the number of inhabitants according to census data of Statistics Canada.

2.2 million people currently live in the Greater Vancouver area. The population is expected to grow by 30,000 new residents each year, for a total population of 3.4 million by 2041. This is according to a projections report by Metro Vancouver (report in PDF format.)

So based on common sense, housing prices should rise in the long run because of growing density.

Some people say they can’t afford to buy a house. But nobody is forcing them to buy a million dollar bungalow right away. New home owners can start small and slowly work their way up. My down payment was only $15,000 for the condo I bought in 2009. I will purchase a larger home later as I build up equity.

Offering real estate financing is another way to benefit from the housing market, especially if you don’t have a lot to invest. You can lend money to a home buyer so they pay you interest instead of a bank. This can be done through a private mortgage or a mortgage investment corporation. Higher real estate prices just means more wealth for real estate investors who have exposure to the market. 😀

This mindset turns expensive housing from a liability into an asset. The higher prices go the more wealth is produced.

The financial problem: Oil prices too expensive

What other people do: Complain they’re getting gouged by oil companies and they can’t afford to drive anymore

What you can do instead: Buy oil and gas companies, especially the ones that pay out dividends. A lot of them have a history of growing their dividends because their profits are growing over time. Every year for the last 4 years I’ve been investing thousands of dollars into Suncor, Exxon Mobil, Chevron, and other oil businesses.

I was getting paid $10 a month in dividends from these companies in 2009. But with persistence, as well as ALL of these companies raising dividends in the last few years, I am now earning $81 a month.

Oil companies are now paying me MORE money, than I’m paying them to fill up my car. 😀 No complaints here.

The problem: Food getting more and more expensive

What other people do: Complain how food inflation is too high and they can’t afford to eat as they did before.

What you can do instead: Buy a farm or invest in agriculture. Historically farmland prices tend to out inflate food prices. When consumers pay for their food at the store eventually some of that money goes back to the farmers or producers of the food. So common sense tells us that if you own the means of production, or at least the land it’s being produced on, then you are in a pretty good position.

Last year I bought a farm in Saskatchewan and rented the land to a farmer to grow his crops. Over time if the price of soft commodities increase, then I will increase the rent, and my farmland will grow in value.

The financial problem: Slow wage growth and stagnant career

What other people do: Blame their employer for underpaying them. Complain their taxes are too high.

What you can do instead: Ask for a wage increase. I asked my boss for a raise because I’ve been working at the company for many years. He went to the accounting department and came back to me with a $5/hour increase. The worst thing that could have happened was my boss saying no. But most employers want to keep their workers happy.

You can also utilized tax advantaged accounts. I spent the last several years saving at least a third of my gross income from working 2 jobs, and slowly investing that money to build up dividends and other passive income.

Plan for the future you want to live

Investment income such as dividends or capital gains are also taxed at a much lower rate than ordinary salary. And ANYONE can do it, even if you don’t have a lot of savings to start investing.

• $1,000 can buy you more than 50 units of the index fund XIU.
• $5,000 is enough of a down payment to buy a small farm.
• $15,000 can be the down payment for a small one-bedroom apartment.

It DOES start off slow though and will be a decade before most people will see any noticeable results. But the year 2023 WILL come to pass. So when it does, people who start investing today (in 2013) will probably be in a much better financial position than those didn’t take any action.

I estimate that in roughly 10 more years, my personal investment income combined with the salary from my full time job, will bring my total annual income to over $100,000. I also plan to lower my average tax rate at the same time, just like how the rich do it. 😀

The solution to so many of our everyday financial problems in life are sometimes right in front of our eyes. We can complain and do nothing about it, or take action to create a better future. The choice is ours. 😉

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Random Useless Fact:
Sometimes eating healthy and exercising isn’t as good for the body as people say it is.