June 29th is a special day for the following reasons:
- 5 years ago, Apple's iPhone was launched. It was the birth of Blackberry's nemesis
- Today is the first day after RIM announced major losses, delays in launching Blackberry 10 operating system and 5000 additional layoffs
- It is also the busiest day for lenders in Canada as the highest number of mortgages close today
You might be wondering what's the connection between the above 3 points. Last year, I was meeting with a few investment banker friends who, at that time, said RIM's stock was a buy since it's price of $16 was undervalued and the company had lots of cash. Fast forward 9 months, RIM's stock is at $7.4 (June 29, 2012 stock price). It has lost half of its value. It is important when buying a stock, mutual fund or investment property to buy based on economics: how much revenue is generated (sales of company, rental income a property demands), profits (net profit, cash flow after all expenses are taken into account) and potential appreciation (R&D and innovation for a company, solid area that will experience growth due to jobs, infrastructure or immigration). Buying (stock or investment property) because someone said it is good to buy is speculation and could result in disaster. Do your own due diligence.
As for the Apple connection, emulating their drive to innovate and improve by continuously reviewing the mortgage, adjusting it and understanding the opportunities leads to financial freedom. Being complacent by getting a mortgage, setting a payment and forgetting about it would be following RIM's path. There is more to mortgage than rates.
Having a vision (building a portfolio of positive cash flow properties or being mortgage free) and executing a plan would result in financial freedom and not arranging a mortgage on the busiest day for lenders.
To discuss how to achieve mortgage freedom or build your real estate investment portfolio, please contact me.