What’s your ceiling? Is there an amount of money – savings – that you cannot breach? You get just above that amount, and something comes up, something happens that brings you down to your “normal average”. Is there an amount like that, or is your cash cache steadily growing? I have my “magic number”. I’ve had discussions about this with two people who have their own “magic number” above which they can’t jump… yet.

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This is for my American friends. The ones who got scared into keeping money in cash and out of the market 🙂
(In Canada, we have things like GICs and Term Deposits, none of this CD stuff.)

It used to be that when you bought a certificate of deposit (CD), you didn’t have a lot of choices. It was a simple decision. Nowadays, even with a basic CD you have to do some homework. It’s still a pretty conservative investing technique, if it can be called that…

Regular CD

To start with, there is the regular CD that has been around for many years. Even so, there is a lot to learn about plain vanilla traditional CD’s. First, you need to shop around for rates. Then, figure out if flexibility is important to you. With a shorter term, for example, 6 months, you can access your funds sooner, but a 3-year CD is likely to give you a higher yield. Though not always! I’ve seen shorter term products offered at better rates. My guess is that happens when a particular bank is strapped for cash, or they’re just trying to drum up some new business.

You need to also consider whether the interest rates are going up or down in the future. If they go down, then a long-term CD is more advantageous, while if they go up you want to be able to get your money back quickly to take advantage of the rise. There are techniques you can use to balance off short-term versus long-term investment, such as laddering and barbells. (I’ve done Ladders and Bullets with term deposits. It’s ok. Makes you feel busy and smart, doesn’t necessarily produce great results.)

Brokered CD

If you are looking to have access to your money at any time and are still looking for the security a CD offers, then you may want to consider a brokered CD. This is a CD that you can sell at any time on the open market provided there are buyers – just like you would sell a stock or bond. The way these work is that the broker buys a large CD from a bank, and then breaks it up into a number of smaller brokered CDs which it sells to its clients. The interest rate is typically lower than you would get on a regular CD, but this is offset by the flexibility it provides.

Market-Linked CD

Finally, you may want to consider buying a market-linked CD, which gives you a fixed return like a traditional CD, but also gives additional returns linked to stock market growth. You can’t lose money if the stock market goes down, so in some ways this is a win-only proposition. However, before you invest in this type of CD, you really need to get professional advice from an unbiased expert, since there can be significant issues around tax treatment, and the FDIC protection may only apply to the capital you invest initially, not to any gains you may make.

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If you are into yoga, or would like to try it out, get a Passport to Prana. They issue them for 12 US, 7 Canadian, and 1 Australian cities. It’s only $30 (per city) and gives you access to a ton of yoga studios.

“The Passport to Prana entitles you to one class at each of the participating yoga studios for 1 year from the date of activation of your card. ”

The Toronto card covers the entire GTA, with over 100 participating studios!

Link: Passport to Prana (non-affiliate)

In my nearly 15 years in Toronto I had never visited Buffalo, NY. Yesterday I took a friend to the airport and stayed there for the day to shop. I was always very skeptical about outlet malls because the ones I’ve been to in Missouri and Ontario weren’t worth it. But Fashion Outlet Malls in Buffalo had me “oh-my-godding” every 10 seconds. I was ‘operating’ on 3 hours of sleep and even in this handicapped condition I was able to find a few amazing things at a huge discount. If this were a girly blog, I’d take pictures of the deals I got 🙂

Another mall, Walden Galleria was fine but it’s not exactly an outlet mall. Their brands are nearly identical to what I can find in Toronto with only a few exceptions. Prices overall weren’t much lower, but I think many people go to Walden for The Cheesecake Factory. Their cakes were good.

I’ve read somewhere that Coach ((COH: 39.95 +0.86%)) makes more money at their outlet stores than full-price stores. Can’t find the source but I believe it – their place was a sh*t-show, a horde of people were running around the store with a mad look in their eyes, and that’s on Thursday. Can’t imagine what it’s like on a weekend.

All in all, I thought it was worth the trip, and will probably do it again at some point.

toonLoanBigWith the fiscal turmoil of the last few years, many small businesses succumbed to the economy’s wrath and now face some credit challenges. If you rely on banks for business loans, bad credit can easily lead you to bankruptcy. But thanks to the flexibility of bad credit unsecured loans small business owners have some options to save their business and to make a success of their brand and services. Or at least stay afloat until the business can be off-loaded when the economy improves.

How does it work?
A business line of credit is very different from how a traditional loan works. It has no fixed payment terms (really! see the next paragraph) and the interest rates are adjustable. Furthermore, it can only be used for your business and must be paid back. For example, if you own an auto mechanic shop and suddenly a vital piece of equipment broke down. The cost of replacing it is too much for you to simply go out and buy. By taking out a business loan you can invest in the machine and keep your business running while turning a profit. Your business can use these credit lines at any time up to a certain amount that is agreed upon by you and your lender.

Advantages and the downside
Business lines of credit are far more flexible than any loan type you can get through a traditional bank. If you can qualify for a secured line of credit loan it’s probably your best option, because unsecured credit loans have much higher interest rates due to the fact the borrower isn’t putting up any collateral. However, the interest rate is adjustable. Your loan rate is based on how quickly you can pay it back.

Saving small businesses when big banks don’t
Smaller lenders have a long history of saving small businesses when larger banks refuse to help. In a ‘USA Today’ article about how small businesses turn to alternative lenders in their time of need, there’s a story about a small business owner who sought a 50K loan from a big bank to buy toy inventory for his comic book shop right before the holiday season. He was turned down! (In the spirit of Christmas, ha) Instead, he sought help from an alternative lender who granted him the loan. This allowed the entrepreneur to not only expand his inventory, but thanks to the business loan, he was able to increase his annual revenue by 50 percent to $500,000 that year.

It is for reasons such as this that alternative lenders help stimulate the economy by helping small businesses succeed when big banks (the ones responsible for the bad economy) refuse to help small business owners who show projected profits.

Borrow responsibly
When contacting your lender be sure to speak with a professional and help them determine a good loan amount if you don’t already have a firm number you need to stay afloat. Borrowing responsibly is the key to keeping your business running strong.