Sunday, May 24th14.1°C
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Guest Columnist

Wearing plastic bottles

Are you wearing a former plastic bottle? You could be, if you’re wearing a fleece jacket or vest. Fleece clothing is made from recycled polyethylene terephthalate — or PET. But how does a plastic bottle go from your recycling to a cozy new fleece jacket? 

After your recycling is collected, it’s sorted with similar materials and compacted into bales. It’s important that bales consist of only the same material to optimize their recyclability. Bales are sold to material remanufacturers who process the contents into something that can be used again. For example, bales of PET are shredded, washed, and pelletized.

These pellets are heated and spun into fibres, which are then processed into fleece clothing and other new products. Fewer new resources are required in the manufacturing process when starting with recycled materials. 

There are many different end-uses for plastic containers, which depends on the type of plastic. Milk jugs — high-density polyethylene — are used in new packaging for shampoo or detergent bottles. Plastic bags — polyethylene — are used in plastic decking. Margarine tubs — polypropylene — are used to make storage bins. Each of these plastic types — or resins — follows a similar process of being shredded, washed and pelletized before they can be used again.

Metal cans continue on to become new products or new cans. In fact, anything made from steel in North America has some recycled content, and recycling metal uses less energy than producing new metal. That means your empty can of peaches could re-enter your home when you replace your next appliance. Like plastics, metals need to be sorted into different types. Once sorted, the metal packaging is shredded and smelted. It can then be rolled into sheets, wire, or bar, and used to make new cans, car parts, or construction materials.

Paper is pulped and pressed into fibres that become cereal boxes, egg cartons, and cardboard boxes depending on the mix of papers.

Recycling residential packaging and printed paper in British Columbia is made possible by Multi-Material BC (MMBC), a non-profit organization that collects fees from the retailers, manufacturers, and other companies that sell or provide packaging and printed paper to residents. MMBC manages the recycling and collection of the packaging and printed paper on behalf of these companies removing the financial burden from municipalities. This is called extended producer responsibility, or EPR.

There are over 20 EPR programs in BC, for materials such as tires, batteries, lights, electronics, and more, each of which provides BC residents with management options and avoid disposal, filling up landfills. Help give your packaging and printed paper a second life by recycling it.

 


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Truth about consolidation

Debt is a drag. Every month, multiple bills clutch at your purse strings, demanding your full attention. Staying on top of each one can be a daunting task. A debt consolidation loan might be the solution you’re looking for. It involves managing one monthly payment instead of several payments.

Here’s how it works: A financial institution extends you a loan that equals your outstanding debts to some or all of your existing creditors. You then use the loan to pay off your debts to those accounts, and are left with a single loan to repay to the financial institution.

If you’re interested in merging everything into one easy-to-manage payment, here are some of the advantages of a debt consolidation loan:

One payment per month makes budgeting easier

Replacing multiple payments with a single payment should make it easier to plan your budget each month. One payment equals less time spent planning.

Save money with a lower interest rate

Most consolidated loans have lower interest rates than credit cards do, so you may be able to reduce your interest payments by consolidating. This will save you a lot of money in the long run.

Protect your credit score

A consolidated debt loan can also improve your credit score. If you often make late payments on your accounts, your credit score will certainly take a hit. Streamlining to one payment and staying on top of it will help you rebuild a damaged credit rating.

Get some peace of mind

You’ll also feel less stressed. We all know that debt is a real soul-sucker, and one of the most common causes of stress. Knowing that you only have one payment to make each month allows you to feel more in control of your financial situation.

You’ll want to shop around for the right debt consolidation loan, as the interest rates offered by assorted banks and credit unions can vary. It doesn’t cost anything to apply for the loan itself, but a fee may be charged to open your file with the lender. This is where tools come in handy. Prospera Credit Union offers a debt consolidation calculator that helps you determine whether consolidating your debt into a single loan is the right choice for you.

A final tip: Prospera recommends applying a portion of your consolidated loan’s monthly payment savings to the balance of the loan itself. You can save hundreds to thousands of dollars doing this, and knock years off of your loan. Find out how to do this with their debt accelerator.

 


Stay happy on road trips

If a family road trip is on your radar this summer, you’re not alone. With gas prices expected to be relatively cheaper than previous years, this may be the perfect time for you to pack up the kids and hit the open road.

Rob and Bonita Tang are no exception. With the birth of their second child, they realized how expensive air travel would be if they wanted to vacation out of town.

As a child, Rob was no stranger to exploring North America by car, having driven throughout the continental US and many Canadian provinces. 

“I still fondly remember the road trip in 1996 that my parents, sister, and I took from Vancouver to Atlanta,” Rob recalls. “We drove all the way there for the ’96 Summer Olympics, then continued onto Arkansas, Florida, Louisiana, and Texas before heading back home to Vancouver via Nevada, California, and Washington”.

It was now his and Bonita’s turn to carry out the tradition of a family road trip with their own kids.

“As a car enthusiast, I like driving and the freedom of the road, so I really enjoy long road trips anyway,” Rob said. “When you fly, you get from point A to B quickly, which is great for efficiency but you miss out on the adventure of discovering surprise locations along the way”.

Bonita added, “On an airplane, we would be much more limited in what we could bring there and back because it all has to fit into checked baggage. But when we take our Honda minivan, we can even bring four sets of skis, which would cost a ridiculous amount to bring on-board a flight. Plus we don’t have to worry as much about running out of room when we go out-of-town shopping”.

“Keeping the kids from being bored is one of the keys to a harmonious road trip,” she advises. “Rob and I always try to keep them occupied with low-tech games, such as I-Spy or Checkpoint, which promotes them looking out the windows at their surroundings rather than in their laps”.

However, on their recent two week, 3,500+ kilometre journey down south to San Francisco, Reno and Lake Tahoe, the Odyssey’s rear DVD player proved to be invaluable. Their kids, Andrew and Olivia, enjoyed watching movies together using wireless headphones while their parents relaxed up front.

In a day and age where tablets and smartphones are everywhere, it may seem surprising that auto manufacturers still continue to offer factory rear entertainment systems. Rob is hopeful that they will continue to do so.

“I like the parental controls up front and it is just one less thing to pack or lose,” he explains. “Also, unlike tablets where the kids are always looking down, the built-in system flips down from the roof so the kids are looking up and can still see the surroundings in their peripheral vision”.

Traversing the country by car also requires some advance planning as far as vehicle maintenance. It may be tempting to get some miles on the car then have it serviced after the road trip. However Rob advises this is a mistake.

“The last thing you want ruining your vacation is to be stranded at the side of the road in an unfamiliar town,” he says. “I always have our vehicles serviced at the dealership beforehand for preventative maintenance”.

His line of thinking seems to be right on the money as the Tang’s minivan has been trouble-free even after crisscrossing the US and Canada.

To that end, here are Rob and Bonita’s top tips to keep the kids happy, the parents sane, and to ensure that your next family road trip will prove to be memorable for all the right reasons.

  • Flexibility is king. Pick a destination and book your accommodations in advance, but leave yourself enough time to explore the surrounding areas on-route to your goal destination.
  • Get the whole family involved in planning, especially the kids so they’ll know what to expect and how long it will take.
  • Keep the kids occupied with both low-tech and high-tech activities.
  • Plan your fuel and restroom stops in advance.
  • Get the family vehicle checked out by a trusted mechanic before leaving home.
  • Set aside enough time to pack your bags, load your vehicle, and get a full night’s sleep so you can start your adventure refreshed.

 

 


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Mortgages: RRSP investment

We’re into RRSP season and many of you will be looking at your investments and wondering if you have received the best return on your money. Many will wonder, too, about the security of their investments, especially if they have been invested in stocks and experienced nail-biting moments when the market has been on a roller-coaster ride.

How about an investment that has historically, not only kept its value, but also given above-average returns, and – get this – can pay monthly into your account? We’re talking mortgages here, and what’s more it’s possible to invest in Western Canadian mortgages. That’s right, the mortgages of people like your family, friends, neighbours and business partners.

How does one invest in mortgages and in a manner that’s suitable for an RRSP (and a RRIF or TFSA for that matter)? It can be done through a Mortgage Investment Corporation. What’s that I hear you asking? An MIC is a company created under the Canadian Income Tax Act whereby investors can invest in a pool of Canadian mortgages. Investors’ capital is used to fund Canadian mortgages for residential and commercial properties. Only in Canada, you say? Right, this is strictly a product of the True North, although MICs can accept money from abroad. And secure? Canadian mortgages have a default rate of 0.38 percent compared to 3.4 percent in the U.S.

MICs are subject to strict rules. For, example, they must have at least 20 shareholders with none having more than 10 percent of the capital; they must only invest in Canadian mortgages, eschew land development or construction, and – get this – distribute 100 percent of their income to shareholders as dividends. What’s more, MICs are regulated by no less than three government agencies.

So how can an investor access in an MIC, specifically one offering a pool of Western Canadian mortgages? AP Capital MIC (formerly Alta-Pacific) is almost 80 percent invested in B.C. mortgages, and almost 18 percent in Alberta mortgages. What’s the return like? AP targets a return of 8 to 11 percent annually, and although past performance is no indicator of the future, the fund has kept on target providing returns of 9.45 percent in 2012, 8.07 percent in 2013, and 8.15 percent in 2014. Not your average RRSP return.

AP differs from other MICs in that it gives you a choice of how it pays you dividends. You can choose either an 8 percent per annum dividend paid monthly, with an additional payment at the end of each year in case the annual return is over 8 percent (known as the 13th dividend). Or, you can opt to have your investment grow quicker by re-investing the dividends.

Want to know more? Give me a call.

 

 

Chuck Duerden is a Financial Consultant with Septen Financial Ltd. He is an economics graduate from University College London, and comes to Kelowna from after 13 years’ service with the Korean investment promotion agency. He can be reached at 250.575.3798 and [email protected].



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