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Billionaire mansions: Don’t you want one?

Monster Billionaire Mansions


Facebook billionaire Mark Zuckerberg, 26, may have recently shelled out $7 million for a Palo Alto home, but when it comes to billionaire real estate, that purchase is downright thrifty. Many of the world’s richest people spare no expense when it comes to home sweet home, throwing down tens and hundreds of millions of dollars on mega mansions designed to suit every possible fancy.

Take industrial billionaire Ira Rennert’s 43,031 square-foot Fair Field estate in Sagaponack, New York. Valued at $200 million according to tax assessments, the sprawling 29 bedroom, 39 bath manse is one of America’s largest single-family homes — and arguably the most expensive. Amenities include not one but three dining rooms, three swimming pools sitting side by side, two courtyards, an orangery, a 164-seat screening theater and a pavilion housing a basketball court, a gym, and a 2-lane bowling alley. There’s even an on-premise power plant to keep everything running. In April, rumors that Rennert was building a private museum to showcase his massive art collection surfaced when the town of Sagaponack issued a stop-work order on new construction that had been started without the proper permits.

On the opposite coast, Russian venture capital billionaire Yuri Milner recently forked over $100 million for a 25,000-square foot, French chateau-inspired mansion in Silicon Valley. The Palo Alto estate touts indoor and outdoor pools, tennis courts, a ballroom and a wine cellar. If Rennert’s Fair Field estate could be the most expensive home in the country, Milner’s is its direct competition for that title. The Facebook and Groupon investor, who calls Moscow, Russia home, bought the place as a secondary property.

Many billionaire homeowners don’t move into their new digs right away. Once they’ve closed, which usually occurs through a third party LLC to keep the sale as private as possible, it’s time to retrofit the property for their lavish lifestyles, remodeling or in some cases, tearing down and rebuilding a brand new mansion altogether. This is a common occurrence in the ritzy Long Island, New York zip codes that make up the Hamptons, where billionaire investor Ron Baron dropped $103 million on 40 acres of beachfront land sans a house. In the most recent and extreme example, hedge fund billionaire David Tepper just knocked down the$43.5 million Sagaponack home he bought last year; he reportedly plans to build a house that’s twice as large on the empty site.

“A lot of people will buy a $30 million ocean front mansion, tear it down, and start all over again,” explains Alan Fiocchi, founder of AlchemyRED, a company that project manages the ground-up construction or intensive remodeling of multi-million dollar estates around the world. Fiocchi, who works on properties averaging $25 million with a typical renovation budget of $10 million, acts as Owner’s Representation for many billionaire clients, including many of Wall Street’s high profile finance gurus, one non-American Head of State and members of royal families.

Billionaires like their privacy. Fiocchi, who must sign non-disclosure agreements to take on a job, says it is common for clients to shell out money for technology that ensures safety. “We’ve done full security in terms of bullet-proof glass on all the windows,” says Fiocchi. “We’ve even had clients who were extremely paranoid about air quality, so we engaged engineers from Germany to make sure they had the highest air quality known to man circulating through their residences.”

The world’s richest spend millions on the finish work, especially stonework and millwork. Take the Maison de L’Amitie estate in Palm Beach, Florida that real estate mogul-turned-reality show star Donald Trump sold to Russian fertilizer kingpin, Dmitry Rybolovlev in 2008 for a discounted $95 million (originally listed for $125 million). The Donald snatched up the 60,000 square foot, oceanfront estate for just over $40 million in 2004 and set to work sprucing it up, adding gold and diamond fixtures and a 50-car garage.

Some billionaires collect pricey plots of land the way others might collect wine or art. Tech titan Larry Ellison is perhaps most famously known for his Woodside, Calif. compound, fashioned after a Japanese imperial palace with man-made lake, teahouse and moon pavilion. But the Oracle founder has also dished out hundreds of millions of dollars on more than a dozen Malibu and San Francisco estates in recent years. Earlier this year, he scooped up former billionaire Edra Blixseth’s 240-acre Porcupine Creek estate in Rancho Mirage, Calif. for a deeply discounted $42.9 million.

95 million, 60,000 sq ft., previously owned by Donald Trump.

A smattering of expensive homes are currently on the market awaiting prospective billionaire buyers, like the Tranquility Estate in Lake Tahoe that recently dropped from $100 million to $75 million, and Manhattan’s Woolworth Mansion listed at a hefty $90 million. The $48 million “for sale by owner” transaction of the Vanderbilt townhouse by Sloan Lindemann Barnett, daughter of billionaire George Lindemann, to Libet Johnson of the Johnson and Johnson family, is pending and once closed, will become the most expensive Manhattan residence purchased since the 2008 economic downturn.

“When I think of a trophy property selling or something unusual entering the market that gets a lot of attention it…actually pulls more inventory out onto the market…and other properties that may be considered competing in this price point come out of the woodwork because the selling of them is optional,” explains Jonathan Miller, chief executive of Miller Samuel Inc, a New York City-based real estate appraisal company. He notes that while high-end aspiring homeowners have the money to shell out on uber expensive estates, many still tend to abstain from buying property that is wildly overpriced – just as their home-buying peers in the lower ends of the market do.


Did you know that Bishops and Universities owned brothels?! Tighter lending practices? Its tight enough, there is no bubble


 The whores of yore

 jacqueline murray

From Tuesday’s Globe and Mail

Published Tuesday, Mar. 27, 2012 2:00AM EDT

The Ontario Court of Appeal’s decision to legalize brothels will invite a wide range of response, from those heralding it as a positive step toward protecting sex-trade workers from violence and exploitation to those decrying the removal of the last barricade to having brothels on every corner.

So it might be helpful to consider how our ancestors approached prostitution. The legal rationales and the moral codes of medieval Europe suggest that the legalization of prostitution is far from innovative. In cities across Europe, legalized prostitution coexisted with both public decency and Christian morality throughout the Middle Ages.

Just who licensed these brothels might give us pause. In most communities, it was municipal authorities, who considered them to be a public service. Other owners were a little more surprising. For example, the “stews” of Southwark, now the South Bank of London, were owned and operated by the Bishop of Winchester.

In Montpellier, in the south of France, the University of Montpellier owned the local brothel and collected the revenue. (Could this be a new source of funding for our cash-strapped universities?)

How could such institutions – civic governments, the church, the university – own such apparently disreputable businesses? In part, the answer is that prostitution wasn’t so disreputable. A prostitute might commit a sin, but she didn’t break a law.

Prostitutes were classed as yet one more group of workers to be regulated, just as there were guilds to regulate merchants or cobblers. A prostitute was entitled to work and entitled to her wages. Consequently, there were laws against a john’s stiffing a working girl and not paying the agreed price. Equally, a prostitute could be fined for false advertising. If she used a lot of makeup or wore clothes that made her appear to be more beautiful or younger than she actually was, the courts would consider her to have committed commercial fraud.

Prostitutes were integrated into the community to a remarkable degree. When the cathedral of Notre Dame was being built in Paris in the early 13th century, city prostitutes banded together and raised money to provide a stained-glass window. It took a lot of debate among leaders of the day before the bishop refused the gift on the grounds that it was tainted by sin.

So why were prostitutes not only tolerated but integrated into the social fabric? Partly, there was a sense of compassion and forgiveness. After all, belief by some Christians held that Mary Magdalene had been a prostitute. If one of Jesus’s friends, the first to see him after the Resurrection, had been a prostitute, then anyone could repent and resume their place in respectable society.

Medieval people thought much like many people today: Prostitution is one of the few avenues of employment open to vulnerable women, the very young, the uneducated, those without family support. There were few job opportunities open to medieval women other than being a wife or a nun.

Widowed or orphaned women could find themselves destitute. A woman victimized by a violent husband, father or brother had nowhere to go. Perhaps, most sadly, a victim of rape might be considered unmarriageable and might be cast out by her family.

Because people recognized the close link between poverty and prostitution, there were many organizations devoted to helping women get off the streets. Sometimes, this meant a transition house where women could learn a craft, such as spinning. Other times, people donated money and other necessities to provide a dowry, so a woman could leave the sex trade and enter a legitimate marriage. This fact alone indicates how prostitutes were anything but ostracized from society at large.

Prostitution was thought to serve the needs of society. Medieval people were pragmatic and knew there would always be men who needed to buy or steal sex. Legalized and regulated prostitution gave them a place to go, rather than trolling the streets and harassing the town’s wives and daughters. Prostitution minimized the danger of wanton rape.

Even such eminent religious authorities as St. Augustine and Thomas Aquinas considered prostitution a “necessary evil.”

Legalized prostitution also meant that authorities could keep tabs on the women involved, making sure their own wives and daughters were not involved. The theory that kept the whole system going was that brothels were places where foreign men went and where foreign women worked. As naive as that sounds, medieval city councils clung to this rationalization.

Brothels flourished across medieval Europe. In 1348, during the Black Death, many of the brothels were shut down as frightened people denounced prostitutes as plague spreaders. But, soon enough, the brothels reopened, and new medical regulations saw the prostitutes receiving regular medical care.

There may be many benefits for our society and the women who work in the sex trade. With legalized brothels, perhaps, will come regulations leading to less street crime and fewer parks and laneways littered with dirty needles and used condoms. Women might be spared the violence of johns, the extortion of pimps and the numbing effects of addiction. Women and their children will benefit and so, arguably, will our communities.

 Isn’t it time we caught up with our medieval ancestors?

 Jacqueline Murray is a professor of history at the University of Guelph.


Bank regulator proposes heightened scrutiny of mortgage market
From Tuesday’s Globe and Mail
Published Monday, Mar. 19, 2012 3:39PM EDT

Canada’s financial regulator is proposing strict rules to tighten lending practices in the housing sector, a move that could cool the red-hot market after months of warnings about rising consumer debt.

The new rules would require banks to take a closer look at how much a property is worth before issuing a mortgage – and to know more about the monthly finances of borrowers before the money is doled out.

For the first time, the Office of the Superintendent of Financial Institutions has put together a framework on mortgage underwriting principles, which if approved would set extensive due-diligence requirements for lenders.

In particular, the regulator is issuing a warning about home-equity lines of credit, known as HELOCs, and asking banks to do more to ensure that they are thoroughly scrutinizing borrowers.

The move is part of an international effort to avoid another crisis like the subprime mortgage fiasco that clobbered the U.S. economy and major banks. But it comes as the Canadian banking sector is locked in a heated mortgage price war heading into the spring home-buying rush, with five-year fixed rates as low as 2.99 per cent. Lenders are pushing to gain market share while the market remains strong.

“Spring is our busiest season,” said Marcia Moffat, head of home-equity financing at Royal Bank of Canada, the country’s largest lender. “The competition tends to intensify as we approach the spring market, so that’s what you’re seeing.”

But policy makers and regulators are concerned about the debts consumers are taking on as a result of persistently low rates. The fear in Ottawa is that many borrowers will struggle to keep up their payments once rates rise substantially, posing a threat to banks and the economy. At the same time, economists say that Canada’s housing market – most notably in Toronto and Vancouver – is overpriced. If house prices fall at the same time as interest rates rise, borrowers could find themselves under water.

The draft rules, which OSFI put out for comment until May 1, are designed to ensure that banks are collecting detailed information about a borrower’s identity, background, and willingness and ability to pay their debts on time. The rules also deal with due diligence the banks should conduct on the value of properties. And OSFI is telling banks that they will have to disclose more information publicly about the risks contained in their mortgage portfolios.

OSFI’s guidelines lay out the details that it wants banks to check when considering a mortgage application. They include items such as home heating bills and other variable expenses.

The banks are still digesting the OSFI draft report, but Ms. Moffat said she is supportive of rigorous lending standards. “We have quite a disciplined credit adjudication approach. There’s always opportunity to tie things up in a bow, and perhaps that’s where this goes.”

Unlike the central bank and Finance Department, OSFI does not normally concern itself directly with consumer debt loads. The regulator’s job is to protect the safety of banks, not consumers. But it is warning that if consumers take on more debt than they can chew, banks will suffer.

While HELOCs can provide consumers with an alternative source of funds, “these products can also significantly add to consumer debt loads,” OSFI said.

Unlike mortgages, which must be paid by a certain date, HELOCs are revolving in nature and that can spur consumers to keep their debt balances higher for longer, and pose “greater risk of loss to lenders,” OSFI said. “As well, it can be easier for borrowers to conceal potential financial distress by drawing on their lines of credit to make timely mortgage payments and, consequently, present a challenge for lenders to adequately assess credit risk exposure.”

Home-equity lines of credit have risen sharply in recent decades. The growth rate of HELOCs spiked above 30 per cent in 2005, and was above 20 per cent in 2009 but has since levelled off to about five per cent, which is roughly in line with the rate at which mortgages are growing, said Toronto-Dominion Bank chief economist Craig Alexander.

Ottawa took steps to rein in the growth of HELOCs early last year, when Finance Minister Jim Flaherty made a number of rule changes in an effort to cool the mortgage market and prevent borrowers from getting in over their heads. One of the changes was that the government would no longer guarantee mortgage insurance on home equity lines of credit.

That rule change shifted the risk of home equity lines from taxpayers to banks, and it succeeded in encouraging more prudent lending. (Mortgage insurance, the vast majority of which is backed by the government, protects the bank in the event the homeowner defaults.) In its guidance Monday, OSFI told banks that “mortgage insurance should not be a substitute for sound underwriting practices.”

RBC’s Ms. Moffat said several items beyond the rate need to be looked at when a mortgage is issued, including the flexibility of the terms. “Ultimately it comes down to cash flow,” Ms. Moffat said. “You need to make sure that you’ve got enough flexibility that you can continue to make payments on your mortgage through the term.”


I didn’t know Darth Vader worked for Goldman Sachs?? :-) What are 3 money myths about housing?

Why I am leaving the Empire, by Darth Vader

TODAY is my last day at the Empire.
‘I no longer have the pride, or the belief’
After almost 12 years, first as a summer intern, then in the Death Star and now in London, I believe I have worked here long enough to understand the trajectory of its culture, its people and its massive, genocidal space machines. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, throttling people with your mind continues to be sidelined in the way the firm operates and thinks about making people dead.

The Empire is one of the galaxy’s largest and most important oppressive regimes and it is too integral to galactic murder to continue to act this way. The firm has veered so far from the place I joined right out of Yoda College that I can no longer in good conscience point menacingly and say that I identify with what it stands for.

For more than a decade I recruited and mentored candidates, some of whom were my secret children, through our gruelling interview process. In 2006 I managed the summer intern program in detecting strange disturbances in the Force for the 80 younglings who made the cut.

I knew it was time to leave when I realised I could no longer speak to these students inside their heads and tell them what a great place this was to work.

How did we get here? The Empire changed the way it thought about leadership. Leadership used to be about ideas, setting an example and killing your former mentor with a light sabre. Today, if you make enough money you will be promoted into a position of influence, even if you have a disturbing lack of faith.

What are three quick ways to become a leader? a) Execute on the firm’s ‘axes’, which is Empire-speak for persuading your clients to invest in ‘prime-quality’ residential building plots on Alderaan that don’t exist and have not existed since we blew it up. b) ‘Hunt Elephants’. In English: get your clients – some of whom are sophisticated, and some of whom aren’t – to tempt their friends to Cloud City and then betray them. c) Hand over rebel smugglers to an incredibly fat gangster.

When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces telepathically. I was taught to be concerned with learning the ropes, finding out what a protocol droid was and putting my helmet on properly
so people could not see my badly damaged head.

My proudest moments in life – the pod race, being lured over to the Dark Side and winning a bronze medal for mind control ping-pong at the Midi-Chlorian Games – known as the Jedi Olympics – have all come through hard work, with no shortcuts.

The Empire today has become too much about shortcuts and not enough about remote strangulation. It just doesn’t feel right to me anymore.

I hope this can be a wake-up call. Make killing people in terrifying and unstoppable ways the focal point of your business again. Without it you will not exist. Weed out the morally bankrupt people, no matter how much non-existent Alderaan real estate they sell. And get the culture right again, so people want to make millions of voices cry out in terror before being suddenly silenced.


book excerpt
Three money myths about housing
Rob Carrick
Published Monday, Mar. 26, 2012 6:29AM EDT
Last updated Tuesday, Mar. 27, 2012 10:14AM EDT

The following is an excerpt from How Not to Move Back in With Your Parents: The Young Person’s Complete Guide to Financial Empowerment, by Rob Carrick.

Who doesn’t think buying a house is one of the few total no-brainers in personal finance? Houses appreciate in value, sometimes at rates that make the stock market look comatose. At worst, a house is a forced savings plan that shows its value later in life, after you’re retired and are ready to downsize. You’ll sell your house, take away a big chunk of tax-free money and use it to top up your retirement savings.

This is the conventional wisdom on why buying a house is a great thing, and it’s just begging to be challenged. That’s the point of this chapter. I fully expect most readers will buy a home, and they’ll be well prepared to do it after reading the next several pages. But at least they’ll go in with a much clearer understanding that our national obsession with houses as an investment is potentially destructive.

Housing obsession

It’s hard to think of an adult rite of passage as universally and enthusiastically supported as buying your own home (house or condo). People of all income levels and cultural backgrounds want to own a home. There is no influential anti-home ownership faction to be found anywhere.

There are lots of reasons for this, the first being that it’s a basic human instinct to want your own space. There’s the greed aspect — houses have been unbelievably good investments in some cases, and new buyers have hopes of making out similarly well. Housing is also a huge part of the economy, so it’s naturally looked upon favourably. Home ownership is also a value pushed by governments. That’s why we had thirty-five- and forty-year mortgages for a while here in Canada, and why zero-down mortgages were briefly allowed. Houses were getting expensive and people needed help to buy them. The government delivered.

Renting a home has . . . well, a low-rent feel to it. It suggests impermanence, shiftlessness, a sense of settling for second best. It’s an uninformed prejudice that we would do well to get over because it’s preventing people from making smart decisions about whether buying or renting is a better option.

Three money myths about housing

• Houses are always a good investment. People usually say this after a stretch of years in which house prices have soared, just as they get excited about stocks after a few good years for the markets. Houses can be a good investment, but a lot depends on when you buy and where you buy. Big, growing cities are better than small industrial towns in decline. That said, you can lose money in big cities, too. When my wife and I were looking for our first home in Toronto back in the early 1990s, we viewed several houses put on sale by people who had paid top dollar in the late 1980s and then watched the value of their home plunge below what they owed on their mortgage. Between April 1989 and February 1996, the average resale home price in Toronto fell to $192,406 from $280,121, a drop of 31 per cent.

• It’s smart to buy as much house as you can afford. Building on the previous myth, this old bit of nonsense is based on two often erroneous ideas: one, that bigger houses are always better; two, that your house will become more affordable over time (ignoring such matters as slow wage growth, inflation and the cost of having kids).

• Your house will pay for your retirement. The thinking here is that you’ll sell your house for a big whack of tax-free money (you generally pay no tax when selling your principal residence), carve off a piece to buy a condo or a cute little bungalow and then invest the rest to pay for a carefree retirement. The flaw in this plan? So many people have done this that the price of condos and cute little bungalows has soared. You’ll probably have some money left over when you sell the family home and downsize, but it won’t be a big factor in your retirement savings.


If you were a dictators wife what would you buy? Is being a landlord the road to riches?

A First Witches Club, with Mercedes in place of brooms
Elizabeth Renzetti | Columnist profile | E-mail
From Saturday’s Globe and Mail
Published Friday, Mar. 16, 2012 5:57PM EDT

It seems that Asma al-Assad, wife of the Syrian President Bashar, found an effective way to preoccupy herself during the bloody bombardment of Homs: She went online shopping. So, while the United Nations was compiling reports that Syrian children had been raped, tortured and murdered by security forces, Ms. al-Assad, the British-born former banker, was deciding whether she wanted a pair of crystal-encrusted Louboutin sneakers ($2,100), or the spike-toed stilettos for $1,400.

Maybe Bashar leaned over her shoulder and said, “Get both, darling. It’s not like anyone’s vetting my expense account.” Then he toddled off to his computer to buy a Harry Potter film, a Cliff Richard tribute CD and some songs by Right Said Fred. (You will remember them for being too sexy for their shirts.) Nothing relieves tension at the end of a long day of atrocities like a bit of easy listening.

The Assads’ exuberance for online consumption is contained in a cache of 3,000 e-mails hijacked by Syrian opposition activists and released by the Guardian newspaper this week. The Syrian government, of course, claim the e-mails are a hoax, and when you look at them it’s tempting to agree, because they read like Shopaholic Goes to Damascus and Loses Her Marbles. Who buys a fondue pot or a $10,000 marble-topped table when, nearby, her country’s doctors and nurses are being beaten and jailed for treating wounded neighbours?

Oh, that’s right. Dictators and their families, that’s who. I’d almost forgotten Saddam Hussein’s multiple palaces and gold bathroom faucets, and his taste for art of the Frank Frazetta school, where bosomy chained wenches cower before dragons.

It’s the kleptocrat’s family members who are truly embarrassing: Annoyed at his son Uday (who had perhaps been clumsy with the red-hot pincers) Saddam set fire to Uday’s fleet of 100 sports cars. And, as the Financial Times reported this week, only Moammar Gadhafi’s death prevented his son Hannibal from realizing his dream of a launching a cruise ship where six sharks swam in a tank, against a tasteful backdrop of gilt mirrors and marble pillars. I ask you: Just how many extra pairs of underwear would you have to pack to embark on Hannibal Gadhafi’s cruise of many sharks?

In the end, though, it’s the women who get the blame: Dictators’ wives form a sort of First Witches Club, with Mercedes in place of brooms. When it’s too dangerous to criticize the men in power, they become the target for an entire population’s loathing. Ms. al-Assad, with her preoccupation with Harrods sales and gaudy candelabras, now forms an unholy Arab Spring trio with Leila Ben Ali, the despised first lady of Tunisia, said to have fled the country with millions in gold bricks, and Suzanne Mubarak, the well-manicured hand up the back of the Hosni puppet.

You have to wonder what provokes the intensity of the loathing, and ask if it’s not in proportion to the betrayal their people felt. Their strongman husbands might be brutal to their own citizens, but the wives, perhaps, were expected to be a softening influence – a buffer between the tyrant and his targets.

It’s amazing how often dictators’ wives style themselves as the mother of their people, thus worsening the betrayal when they turn out to be more Joan Crawford than Ma Walton. The late, unlamented Elena Ceausescu was “the best mother of Romania” and “mother of the fatherland,” even as she was forcing the country into penury while racking up a closet of fur coats. (Her coats and hats were sent to a Romanian leper hospital after her execution, which should have been a useful illustration for future First Witches.)

Imelda Marcos, whose helium voice was meant to distract from her cash-register eyes, called herself “mother and first lady of the Philippines.” In fact, a painting titled Motherland was unveiled in the Philippines last year, with a glamorous young Imelda collecting the halt and the lame to her, like the lovechild of Joan Collins and St. Francis of Assisi. It’s easy to laugh at Imelda, of course, and to be fascinated. (David Byrne and Norman Cook are creating an opera about her.) It’s harder to remember that she and her husband used the Philippines as their personal piggy bank.

Asma al-Assad was supposed to be a mother to her people, too: a hot yummy mummy, but still. She championed a children’s charity that was meant to teach young Syrians civic engagement. (I could barely believe it either.) But that was before the uprising in Homs – her father’s hometown, incidentally. After that she seems to have cocooned herself in online retail therapy. Because in cyber space, you can’t hear anyone scream.

Is being a landlord the road to riches?

Postmedia News Mar 15, 2012 – 11:00 AM ET

By Tina McFadden

CALGARY — Leaky faucets, broken water heaters, late rent — these aren’t the only issues that landlords have to deal with.

In the 12 years Rod Faulkner’s been renting out properties in Calgary, he’s dealt with unpaid gas and water bills, one physical threat and three trips through the civil court system to sue for damages.

“In the 12 years, people have scammed me in just about every way imaginable,” says Faulkner, who owns 12 Calgary revenue properties. “And every time I get scammed, it costs me money, and I learn a new lesson.”

Property managers can help landlords head off some of the challenges associated with rental properties. Typically, property management companies advertise vacancies, screen tenants, arrange for any maintenance work, deal with tenancy problems and collect rent. However, they typically charge 10 per cent or more of the monthly rent, as well as a tenant finder fee.

“All it takes is one bad tenant and costs go through the roof,” warns Gerry Baxter, executive director of the Calgary Residential Rental Association. “It’s very expensive to get rid of bad tenants. . . . More than anything, I think (being a landlord) is a challenging business.”

But the tenant headaches are still worth it, according to Faulkner, because the capital appreciation on revenue properties can pay off big-time — that is, if you can find a good deal in Calgary’s high-priced real estate market.

“Property values have definitely increased, and it’s harder to find a good property nowadays,” Faulkner says.

Realtor Janet Miller, who owns two rental properties in Calgary and one in Sparwood, B.C., says she’s figured out a way to pick good tenants — and keep them. She checks references for all tenants, and then undercharges in rent. For instance, on a single family home that would normally rent for $1,200, the rent may be dropped by $100.

“If we drop that rent to $1,100, for tenants it’s huge,” she says.

“For us, it’s not that much.”

The benefit is twofold. First, tenants don’t turn over very often. Second, the tenants rarely bother Miller with complaints.

By keeping her rents low, Miller says she also minimizes the maintenance factor with tenants.

“We have tenants who truly believe that they are flying below the radar, and they do not want to phone us when the doorbell fails,” Miller says. “They just go out and fix it. . . . They want to talk to us as little as possible because they know that they’re getting a crazy good deal.”

Faulkner doesn’t have any trouble finding tenants. But he says you need to pick your tenants carefully: “It’s a bit of an art to pick a tenant.”

And his guiding mantra when considering a property is: “Right building, right price, right neighbourhood.”

He looks for properties near downtown or the C-Train stations, as well as in neighbourhoods that exhibit pride of ownership. His portfolio includes townhouses, duplexes and triplexes, as well as the harder-to-come-by multiplexes.

He says multiplexes with four to 12 units are harder to find because they’re owned by guys like him who have accumulated properties and know how profitable multiplexes are.

“They’re not usually willing to sell them,” he says. “You can get 50, 60 years of good solid returns out of a building like that.”

A good revenue property should be “cash positive,” says Faulkner, meaning it should pay down your mortgage, and ideally, provide positive monthly cash flow after expenses.

Faulkner has managed to find the right properties at the right price (his latest purchase was less than a year ago), and he believes you can still find positive cashflowing properties in Calgary today. Again he says it all comes down to the right property, price and neighbourhood. He factors in rising interest rates when determining whether the price is right.

A systems engineer, Faulkner, 42, plans to retire in less than 10 years — many years earlier than he could retire without the revenue properties. He expects to earn approximately $200,000 in cash flow annually from his revenue properties. Alternatively, he says he’ll be able to sell his entire portfolio for $4 million to $5 million. Of course, that’s assuming he continues to make the right purchases and the economy goes well.

“You have to believe in the Alberta economy, that we’re going to have a constant influx of immigrants,” he adds. “Calgary’s forecast to grow and grow and grow.”

As a realtor for MaxWell Canyon Creek, Miller advises clients looking for revenue properties. During the past year, about 20 per cent of her buying clients purchased rental properties. She has recommended single family homes and condos — it all depends on her clients’ needs and goals.

If clients can’t come up with the mandatory down payment for a revenue property (20 per cent), she’ll suggest renting out the property they’re living in, and buying a new primary residence for themselves with five per cent down.

Miller, unlike Faulkner, believes it’s highly unusual to find revenue properties in Calgary that cover all your costs or provide positive monthly cash flow. However, she’s not looking to make money on her rental properties each month. If she starts to make money, she shortens the amortization on the mortgage and reinvests the money into the property. That way, she keeps her mortgage payments high, pays off her mortgages faster, and deducts the mortgage interest and other expenses.

In the meantime, her tenants are paying down her mortgages. By the time Miller and her husband retire, the mortgages will be paid off.

“And somebody else will have bought the houses for us,” says Miller with a laugh. She expects the income from their rental properties to account for a significant portion of their retirement income.

“The beautiful thing about buying a house instead of stocks is that somebody else is paying off the investment for you,” she says.
“I really believe in real estate as an investment.’

What real estate can do is diversify stock portfolios, says Frederick Montilla, a financial consultant with Investors Group.

“If you speak to affluent Canadians, they have a combination of everything — they’re totally diversified,” he says. “That means they have money in the stock market, they have money in their pension, they have money in their corporations, and they have rental properties as well.

“The person who has an investment property will be better off than the person who is just investing in the stock market because the person buying rental properties has two advantages — the value of their property is appreciating while their tenant is paying their mortgage, and their mortgage is depreciating,” says Montilla.

“The only problem is (real estate) is not liquid,” adds Montilla. “But if you were to compare both, the rental property will outperform the stock market returns.”

In Faulkner’s case, the revenue from his rental properties has enabled him to launch an additional business. He recently opened a liquor store in Canmore, The Market Beer, Wine & Spirits.

You have to look at your rental properties as a business, he says. “Some people get attached to them. They feel it’s their home, and when a tenant puts a hole in the wall, they feel personally affronted . . . . You have to be detached from it . . . . The only reason you’re putting in the extra effort is to make money on it.”

China can access social networking sites? Houses in the US selling for $300 each. Are you going to buy 20?

Crack appears in China’s Great Firewall: users flock to Facebook, YouTube
Melanie Lee
Shanghai— Reuters
Published Wednesday, Feb. 29, 2012 9:52AM EST

Some Chinese Internet users have this week been able to access blocked websites such as YouTube, Facebook and Twitter, relishing the newfound freedom although the reason for the breach in China’s Great Firewall of censorship was a mystery.

China blocks most foreign social networking sites (SNS) out of fear that unfettered access would lead to instability. Chinese SNS firms have filled the void by offering similar products that censor topics the government may find sensitive.

“I can suddenly access YouTube! No need to breach the firewall!” Weibo user Arvin Xie posted on Tuesday.

Weibo is a microblogging platform, similar to Twitter, that allows users to post short messages and follow other users.

Internet users including students on university campuses reported that they were able to access YouTube, Facebook and Twitter on their mobile phones and desktops in the afternoon and evening on Monday and Tuesday.

“I used Facebook for the first time yesterday,” Zhang Wenjin, 23, a student at Shanghai’s prestigious Jiao Tong University told Reuters on Tuesday.

“I went on and took a look. I’m sure there were suddenly a lot of people who signed up on Facebook yesterday,” Mr. Zhang said, adding that she had also signed up for an account.

It is unclear what caused the crack in China’s Great Firewall – as the blocking of websites and censoring of search results for politically sensitive terms is known – or how widespread it was.

On Wednesday, access to Facebook, YouTube and Twitter was again blocked.

Some users in China pay for a virtual private network (VPN) to bypass the blocking of websites and censoring of searches.

Over the weekend, Chinese users also gained access to Google Inc.’s social networking site, Google+ and flooded U.S. President Barack Obama’s page on the site with calls for greater freedom in the world’s most populous country.

Google+ is currently blocked through regular desktop access but its mobile application, which let users in China access the site, has become accessible recently.

China, with more than 500 million Internet users, is the world’s largest and most vibrant Internet community.

The latest in bulk buying? Houses

Reuters Mar 1, 2012 – 5:25 PM ET | Last Updated: Mar 7, 2012 11:13 AM ET

By Michelle Conlin

When Vena Jones-Cox entered the foyer of the once-grand Colonial-style home in downtown Columbus, Ohio, she stepped onto a wood floor that was so moldy and mushy that it actually wiggled. As Cox proceeded down the basement stairs, they disappeared from underneath her.

“I found myself lying on the floor,” says Jones-Cox, 45. “Staring at a dead rat, by the way.”

The house tour from hell didn’t stop her from making an offer on the place. While she was at it, she bid on some other houses, too. Forty nine houses, actually.

She’s paying $3,000 for each, a bit more than the cost of an Apple Mac Pro. “We’re at a bottom,” says Jones-Cox. “I mean, where else is there to go but up?”

As the greatest real-estate fire sale in the history of the United States rages on, the bulk buy is the dead hot deal of the moment. In some of the most foreclosure-ravaged parts of the country, it is almost as if the housing market has become the new big box store, with investors wiping out whole shelves at a time.

The idea is to arbitrage other people’s misery. With the ranks of the rental class expected to swell, investors can buy houses at clearance sale prices, pour some money into repairs and then take advantage of the difference between their low cost of capital and the rent they receive. Often, they bank cash from day one.

Hedge funds and private equity shops like McKinley Capital Partners started to quietly become landlords by buying up inventory last year. Now Main Street investors are following suit.

“They aren’t just buying one rental property,” says Oak Park, Illinois realtor Kyra Pych. “This is a frenzy. They are loading up.”

Pych has five clients who are in the process of buying more than one condo in Forest Park. Illinois. Units that sold for $180,000 during the boom are now going for as little as $13,500. So instead of putting that money into a retirement account, her customers are putting the cash into homes and renting them out.

In Detroit, the Midwest’s aspiring Donald Trumps are buying bungalows for $500 each. In Atlanta, a group of Florida investors are in the process of buying the remaining 322 units in downtown Atlanta’s swank, Art Deco Atlantic Residences, with room service and maids, near Atlantic Station. The prices start at $180,000.

In California, Waypoint Homes, which has already purchased 1,000 single-family homes, got $250 million in funding in January from Menlo Park private equity firm GI Partners for more bulk buys.

“The floodgates are starting to open,” says John Burns, the founder of Irvine, California-based John Burns Real Estate Consulting. “There’s billions of dollars of capital, of my clients alone, (looking) to invest in single-family rentals.”


Up to now, the business of buying foreclosed homes was often an old-fashioned affair. They were usually one off deals, and often involved an auction on the courthouse steps.

But the recent news of Fannie Mae’s pilot auction of a bulk sale of 2,500 homes was a signal to many housing experts that bulk buying is about to undergo a quantum change. The coming auctions will not only put mammoth amounts of inventory up for bid; they will also streamline and automate current procedures.

Amherst Securities managing director Laurie Goodman, a major housing bear who expects further declines in home prices, believes such bulk sales are the key to cleaning out the foreclosure pipeline before any kind of housing recovery gains traction.

It is not hard to see why U.S. housing is turning into the new value asset class of the moment. In an analysis of the 325 major metropolitan real estate markets across the globe, the U.S. was home to the top 24 most affordable markets, according to Demographia’s 2012 International Housing Affordability Survey.

No one can argue with the landlord’s seductive math. There are bank accounts and bonds and annuities with their less-than-one-percent returns, and then, west of Boca Raton, there’s the string of newly-renovated two-bedrooms overlooking the golf course, pool and cabana, along with all the people who have been foreclosed on who are now looking to rent.

For $19,000 in cash, investors can pocket $300 a month, after taxes and homeowner association dues, on each, a 19 percent annual return that compares to the zombie yields from most savings accounts.

In Charlotte, North Carolina, Cheryl and Bob Littlefield, who have five children, are already making the bulk buy work.

Two years ago, the Littlefields inherited $200,000. They considered all of their investment options. Like a lot of people, they found the stock market to be a scary, bi-polar nerve frayer. Bonds and bank accounts offered nothing.

Then there was the lovely little house for $16,000. After putting in a few grand, they cleared $600 a month, after taxes. It went so well they bought another house. And then another. Now they own eight and are in the midst of exploring financing to do a bulk deal for several more.

“I know houses, I don’t know stocks,” says Cheryl Littlefield, who estimates rental income covers 40 percent of the family’s expenses, the rest being covered by her husband’s work as a contractor. “I don’t know what to do if something goes wrong with Exxon Mobil. I know what to do if something goes wrong with a house.”


The cruel irony known to every aspiring homeowner is that there has never been a better time to buy a house. It is cheaper to own – based on the monthly payments at the current interest rates of under four percent – than it is to rent in just about every market across the United States. In Phoenix, for example, it is 21 percent cheaper to own than it is to rent. In Minneapolis, it is 28 percent, according to Burns.

But most who aspire to the property ladder are shut out of the homebuying opportunity. They have no access to credit. They are crushed by record-levels of student debt. A greater share than ever of their paycheck is already going to housing costs, according to Harvard University’s Joint Center for Housing Studies.

That’s where bulk buying comes in to play.

Often, the buyers use the cash they would have otherwise put in a retirement account and put it in houses. People can also use their individual retirement account funds to invest in real estate for use as rental properties.

There are no official statistics on the growth of the bulk buy. But no less than Warren Buffett recently said in a CNBC interview that he would like to “load up” on a couple of hundred thousand single-family homes because it is a “very attractive asset class now.”

Buffett said what held him back was that the business of being a landlord, of managing the homes, was “enormous.”

As it turns out, one no longer even needs to be handy thanks to a new cottage industry of companies that has grown up to manage virtually everything for a landlord, down to the art of hectoring the renter for the rent.

Property management outfits have popped up all over the place, from the high-end down to online companies like gorenter.com, which charges as little as $25 a month.


That is not to say buying houses in bulk does not pose steep risks. Morgan Stanley analyst Oliver Chang christened 2012 as the year of the landlord. But other analysts, like Bank of America’s Michelle Meyer, expect house prices to fall another 7 percent through 2013.

And if the European debt situation deteriorates, or some other economic variable jolts the economy into another recession, all these aspiring property moguls will find themselves with too many vacancies and too much leverage, especially if they have borrowed heavily to refurbish. In other words: another bubble in the making.

That’s not to mention the deals that, no matter how bullet proof they may seem at the time, can still blow up in your face. Just ask all those guys from Orange County, California, who bought in bulk during the boom. Instead of turning into real estate barons, they went bankrupt.

Jones-Cox, she of the 50 homes, has been involved in real estate in Ohio since the late 1980s. She had never looked at bulk buying until last year.

Before she bought her latest homes, she toured each one. She says the condition went from “bad” to “dreadful.” “Some of them had no walls, no windows, no furnace, no wiring, no sink,” she says.

Her plan is to rehab each house for about $20,000 a piece.

She has studied the housing stock in the neighborhood. She says most of it would fit right in with the Third World. She has also studied the demographics and how much people are currently paying for rent. All the math works in her favor, she says.

She doesn’t see how the play could go wrong.

Then again, Jones-Cox concedes, she never thought she would ever be able to buy a house for $3,000, either.

Whitney Houston: Really so sad……another good one gone. :-(

Whitney Houston: Death of a diva
lynn crosbie
From Monday’s Globe and Mail
Published Sunday, Feb. 12, 2012 8:25PM EST

“So goodbye, please don’t cry. We both know I’m not what you need.”

This is Whitney Houston singing, now, beyond the grave: She is stoic, and, with hindsight, prescient.

Her tragic end was perhaps not unexpected but startling at first glance, then painful: Who does not remember (or know of) the radiantly beautiful 22-year-old girl and her astonishing 1985 self-titled album?

Astonishing, not for the many prizes it won or records it broke, but for the first sustained hit of that voice, a scale-leaping powerhouse that felt like the very movement of the Music of the Spheres (that Elizabethan cosmological notion of the rolling sound of perfect harmony; of perfect love.)

Every inch the diva – big, lacquered hair; a mask of makeup; talons, sky-high heels and glittering, sculptured gowns, Ms. Houston confessed to be overwhelmed by all of this glam-armature.

She was, after all, the worst kind of diva: the tragic disaster-in-waiting, great of stature and brokenhearted, like Piaf, Holiday or Callas.

And, like Garland, who also died at 48, she was violently mocked, toward the end.

No longer: the public outcry is great and likeminded: “a beautiful angel,” reads a typical tweet “now singin in heaven.”

Typical – but kindhearted, given that “#CrackKills” trended simultaneously with the dreadful news of the artist having died at the Beverly Hilton hotel.

In the early afternoon, in a bathtub, possibly surrounded by a narrative of pill bottles.


She was to have made a rare appearance at the Grammys on Sunday, and receive an award.

A video has emerged of her singing Jesus Loves Me briefly on Thursday with Kelly Price, who looks lovesick in Ms. Houston’s warm, queenly presence.

Alternatively, her lifelong friend and mentor Clive Davis went on to throw a pre-Grammy party in the hotel, exactly four floors below the site where her poor body was being scrutinized by coroners: “She loved music and she loved this night that celebrated music,” he explained, weakly.

Stories and tributes are being hastily assembled, forlorn rumours about her, ironically, joining the judges on The Voice (she was once known by this name). But in truth, Ms. Houston, once the biggest female singer in the world, had all but disappeared from sight, after a fractured comeback, beginning with the release of 2009’s very successful I Look to You, and ending with a trip to a rehab clinic.

In the middle of this comeback, which feels so fragile now, Ms. Houston finally admitted – to Oprah Winfrey – that she was an addict. She explained how to smoke rock and she said she had lost herself in the drugs.

This was a far cry from the imperious lady who told Diane Sawyer, incredibly, in 2002, that she was clean; that “Crack is cheap.” “Crack is whack,” she infamously snapped, evoking Keith Haring’s graffiti in a ball court near the Harlem River.

Incredible because she and her then-husband Bobby Brown were clearly high all the time: By 2006, the Enquirer would glibly publish photographs of Ms. Houston’s private bathroom: a filthy pig’s sty, filled with squalid drug paraphernalia.

But Ms. Houston seemed to be trying this time. She divorced her volatile husband; she tried to mother her wild daughter; and she appeared in public overweight: great news for a crack addict, yet still she was ridiculed, now for being fat and unattractive.

She went on tour, and was booed, and stormed out on, especially for a wretched version of I Will Always Love You, performed at London’s O2 in 2010. The video is hard to watch: She tries to climb the notes and cannot.

Ms. Houston spoke, plaintively, of her voice’s mulishness this way: “Sometimes the old girl sings, but not tonight. I want to do it, but she doesn’t want to.”

It was this song, always this mammoth anthem, this vocal feat of strength, that defined her. It formed the plot of her hit film, 1992’s The Bodyguard; it trounced her other, upbeat or sweetly sad, Number 1 songs by sheer virtue of its presence: To hear the song, whether you like it or not, is to witness a natural miracle.

A miracle like “The Voice” itself, extended to Ms. Houston, it seems, by God Himself, on a glass platter, both of which she took great time and effort to smash into bits.


She was in pain; she hurt. How does this concern us?

In the centre of the song, written by the wondrous Dolly Parton, Ms. Houston extends the following blessing to listeners: “I hope life treats you kind. And I wish you joy and happiness”

Did we hope the same for her?

Or did we watch, from an aloof distance, her anguish, as though living people are characters in such tragedies as Macbeth and Valley of the Dolls: object lessons and communicable illnesses to be wary of; despaired of, in the abstract.

Shame on those who booed the old girl: Ms. Houston’s voice, and her, its unhappy messenger.

May this wanting, ragged soul find its way home, with our heartfelt, terrible regrets.


Housing market expected to remain steady

Financial Post Staff Feb 13, 2012 – 9:08 AM ET

OTTAWA — Canada’s housing market will remain steady this year and through 2013, with home prices expected to rise moderately, Canada Mortgage and Housing Corp. said Monday

“With the Canadian economy set to expand at a moderate pace and mortgage rates expected to remain low, activity levels in 2012 in both new home construction and sales of existing homes will stay close to levels seen in 2011,” said CMHC deputy chief economist Mathieu Laberge.

Housing starts will total 190,000 units in 2012 and 193,800 units next year, according to the government agency.

Sales will amount to about 457,300 units this year 468,200 units in 2013, it said.

CMHC sees the average home price reaching $368,900 in 2012 and $379,000 the next year.

“The moderate increases in the average . . . price are consistent with the balanced market conditions that occurred in 2011, and that are expected to continue in 2012 and 2013,” CMHC said.

Aren’t you glad for the development of nanotechnology? Saves lives. I think I’ll buy one! (Trump condo).

Crab-like robot endoscope built to fight stomach cancer

Tan Ee Lyn
Singapore— Reuters
Published Wednesday, Feb. 01, 2012 10:48AM EST

Inspired by Singapore’s famous chilli crab dish, researchers have created a miniature robot with a pincer and a hook that can remove early-stage stomach cancers without leaving any scars.

Mounted on an endoscope, it enters the patient’s gut through the mouth. It has a pincer to hold cancerous tissues, and a hook that slices them off and coagulates blood to stop bleeding.

With the help of a tiny camera attached to the endoscope, the surgeon sees what’s inside the gut and controls the robotic arms remotely while sitting in front of a monitor screen.

“Our movements are very huge and if you want to make very fine movements, your hands will tremble … But robots can execute very fine movements without trembling,” said enterologist Lawrence Ho, who helped design the robot.

Professor Ho, who works at Singapore’s National University Hospital, said the robot helped remove early-stage stomach cancers in five patients in India and Hong Kong, using a fraction of the time normally taken in open and keyhole surgeries that put patients at higher risk of infection and leave behind scars.

Stomach, or gastric, cancer is the second leading cause of cancer deaths worldwide and is particularly common in east Asia. Diagnosis of gastric cancer usually occurs at a late stage of the disease when treatment is difficult and often unsuccessful.

Louis Phee, associate professor at Singapore’s Nanyang Technological Institute’s school of mechanical and aerospace engineering, helped design the robot with Ho.

They developed the robot after a seafood dinner in Singapore in 2004 with top Hong Kong surgeon Sydney Chung, who suggested they fashioned their device after the crab. Chung is best known for fighting SARS in Hong Kong in 2003.

“He (Chung) suggested we used the crab as a prototype. The crab can pick up sand and its pincers are very strong,” said Dr. Ho.

“Many things are a certain way because they have evolved and adapted to certain functions … we created something that followed the human anatomy and borrowed ideas from nature and incorporated the two.”

The researchers formed a company last October and hope to make the robot commercially available in three years.

Trump opens Canada’s tallest condo tower with $6-million suites

Bloomberg News Jan 31, 2012 – 7:52 AM ET | Last Updated: Feb 1, 2012 12:51 PM ET
By Doug Alexander

Trump International Hotel & Tower Toronto, Canada’s tallest residential building, opens Tuesday, capping a seven-year effort to bring the brand of billionaire Donald Trump to the country’s largest city.

The $500-million Trump tower is the first of three luxury hotel-condominium projects opening this year in Toronto, after The Ritz-Carlton opened last year. The Four Seasons Hotel and Private Residences and the 66-storey Shangri-La Toronto are also set to open this year.

Toronto’s rise of luxury hotel residences follows a record year for tourism, with more than 9 million hotel-room nights sold in 2011, according to Tourism Toronto. The industry association said the availability of luxury hotel options attracts “high-value visitors” to the city.

About 60% of the 118 residential units in the 65-storey tower have been sold, with the remaining condos priced from $2.3-million to $6.3-million, according to Talon International Development Inc., the owner and developer.

The building also has hotel suites, owned by investors who can earn revenue when used by a hotel guest. About 85% of the 261 hotel rooms have been sold, with the rest priced from $967,000.

“In this market, and at the prices I know those units have commanded, that’s a pretty healthy ratio,” John Andrew, a real-estate professor at Queen’s University in Kingston, Ontario, said in a telephone interview.

An international investor bought a penthouse at Toronto’s Four Seasons for $28-million, which the developer said last year was the most expensive condo ever sold in Canada.

Luxury Tower

Talon, based in Toronto, bought the property at Bay and Adelaide streets in the financial district in 2004 and proposed a luxury tower with the Trump name. The Trump Hotel Collection has a management agreement to operate the hotel, which was originally slated to open in 2009. Design changes delayed the project, Talon said.

The closely held developer arranged $310-million in construction financing from Raiffeisen Zentralbank Oesterreich AG, an Austrian bank, in 2007 and started construction with $250 million in sales.

Buyers have come from around the world, with Canadians representing a “considerable portion,” Talon Chief Executive Officer Val Levitan said in an e-mail. That portion is growing as the project nears completion, he said.

“Early on, the bulk of purchasers were investors,” Levitan said. “Over the past couple of years that mix has shifted much more towards people who are looking to use their suites as their primary home, a downtown pied-a-terre or even as a corporate suite.”

Taking Gamble

Investors of Toronto’s luxury units are taking a gamble on a limited market of wealthy visitors and dwindling prospects as companies cut back on corporate travel, according to Andrew, director of the Queen’s Real Estate Roundtable.

“I’m very skeptical that there is sufficient market to support all of these hotels,” Andrew said in an interview. “There are not enough wealthy individuals running around that are going to keep those hotels in business.”

Toronto will have about 1,000 luxury rooms after the Four Seasons and Shangri-La open, estimates Trump’s general manager Mickael Damelincourt.

“Compared to what Chicago, Los Angeles, Miami, Paris, London has to offer in terms of luxury hotels, it’s nothing,” Damelincourt said. “There is definitely a demand.”

Trump Hotel Collection also oversees five U.S. hotels including two in New York and one in Chicago, and a hotel in Panama.

Nobody Can Compete

If there is rivalry brewing among Toronto’s luxury hotels, the billionaire behind the brand name said he isn’t worried.

“Toronto is a vibrant, great city. We have a great product,” Donald Trump told reporters Jan. 24 at the Americas Lodging Investment Summit in Los Angeles. “Nobody will be able to compete with us.”

The Trump building is in the heart of Toronto’s financial district, rising 277 metres among towers bearing the logos of Canada’s largest banks including Bank of Montreal and Bank of Nova Scotia.

The Trump hotel features a two-level spa with pool, a 12,000-square-foot ballroom and 31st-floor dining at Stock Restaurant Bar & Lounge. Rooms start at $395 a night and go as high as $20,000 for the 4,000-square-foot presidential suite.

“Collectively, these luxury properties help elevate Toronto to a level of being one of the elite cities in the world,” Alex Shnaider, chairman of Talon, said in an e-mail. “It will benefit the city as a whole — making a great city even better.”

The hotel-condo idea remains “an unproven concept” for Canada, with uncertain investment returns, said Yossi Kaplan, a Toronto realtor with Your Choice Realty whose clients own units in the building. Trump’s name resonates more with foreign investors than Canadians, he said, and most calls he gets on the project are from outside the country or recent immigrants.

Trump’s name was a draw for Toronto’s John Hutson, who bought a 17th-floor hotel suite as an investment and a 48th- floor two-bedroom condo to live in.

“You associate Trump with special projects that have wow factors,” said Hutson, 50, a tax partner at Deloitte & Touche LLP whose office is a five-minute walk away. “The key is buying the best. And from a quality and location perspective, for my money, it’s Trump.”

Can you believe the captain refused to return to the ship? Are you going to buy a $36,000 suit? That is truly ridiculous.

Captain of doomed cruise ship pleaded not to reboard


Rome— The Associated Press

Published Tuesday, Jan. 17, 2012 5:15AM EST

Five more bodies were pulled Tuesday out of the crippled cruise ship off Tuscany, and a shocking audio emerged in which the ship’s captain was heard making excuses as the Italian coast guard repeatedly ordered him to return and oversee the ship’s evacuation.

Prosecutors have accused Capt. Francesco Schettino of manslaughter, causing a shipwreck and abandoning his ship before all passengers were evacuated during the grounding of the Costa Concordia cruise ship Friday night.

The death toll nearly doubled to 11 on Tuesday when divers located five more bodies, all of them adults wearing life jackets, in the rear of the ship near an emergency evacuation point, according to Italian Coast Guard Cmdr. Cosimo Nicastro. He said they were thought to have been passenger.

Prior to the discovery of the five bodies, the coast guard had raised the number of missing to 25 passengers and four crew. Italian officials gave the breakdown as: 14 Germans, six Italians, four French, two Americans, one Hungarian, one Indian and one Peruvian.

But there was still confusion over the numbers, and the German Foreign Ministry in Berlin listed 12 Germans as confirmed missing.

The Costa Concordia was carrying more than 4,200 people when it hit a reef off the Tuscan island of Giglio when Mr. Schettino made an unauthorized deviation from the cruise ship’s programmed course, apparently as a favour to his chief waiter, who hailed from the island.

Mr. Schettino has insisted that he stayed aboard until the ship was evacuated. However, a recording of his conversation with Italian Coast Guard Capt. Gregorio De Falco that emerged Tuesday indicates he fled before all passengers were off — and then resisted Mr. De Falco’s repeated orders to return.

“You go on board and then you will tell me how many people there are. Is that clear?” Mr. De Falco shouted in the audio tape.

Mr. Schettino resisted, saying the ship was tipping and that it was dark. At the time, he was in a lifeboat and said he was coordinating the rescue from there.

Mr. De Falco shouted back: “And so what? You want to go home, Schettino? It is dark and you want to go home? Get on that prow of the boat using the pilot ladder and tell me what can be done, how many people there are and what their needs are. Now!”

“You go aboard. It is an order. Don’t make any more excuses. You have declared ‘Abandon ship,’ now I am in charge,” Mr. De Falco shouted.

Mr. Schettino was finally heard agreeing to reboard on the tape. But the coast guard has said he never went back, and had police arrest him on land.

The 52-year-old Mr. Schettino, described by the Italian media as a genial, tanned ship’s officer, has worked for 11 years for the ship’s owner and was made captain in 2006.

Mr. Schettino hails from Meta di Sorrento, in the Naples area, which produces many of Italy’s ferry and cruise boat captains. He attended the Nino Bixio merchant marine school near Sorrento.

A judge is to decide Tuesday if Mr. Schettino should stay jailed, as requested by prosecutors. He could face up to 12 years in prison on the abandoning ship charge alone.

Earlier Tuesday, Italian naval divers exploded holes in the hull of the grounded cruise ship, trying to speed up the search for the missing while seas were still calm. Navy spokesman Alessandro Busonero told Sky TV 24 the holes would help divers enter the wreck more easily.

“We are rushing against time,” he said.

The divers set four microcharges above and below the surface of the water, Mr. Busonero said. Television footage showed one hole above the waterline less than two meters in diameter.

“The hope is that the ship is empty and that the people are somewhere else, or if they are inside that they found a safe place to await rescue,” Coast Guard spokesman Filippo Marini told Sky TV 24.

Mediterranean waters in the area were relatively calm Tuesday with waves of just 12 inches but they were expected to reach nearly 6 feet Wednesday, according to meteorological forecasts.

A Dutch shipwreck salvage firm, meanwhile, said it would take its engineers and divers two to four weeks to extract the 500,000 gallons of fuel aboard the ship. The safe removal of the fuel has become a priority second only to finding the missing, as the wreckage site lies in a maritime sanctuary for dolphins, porpoises and whales.

Smit, a Rotterdam, Netherlands-based salvage company, said no fuel had leaked from any of the ship’s tanks and that the tanks appeared intact. While there is a risk the ship could shift in larger waves, to date it has been relatively stable perched on top of rocks near Giglio’s port.

Smit’s operations manager, Kees van Essen, said the company was confident the fuel could safely be extracted using pumps and valves to vacuum the oil out to waiting tanks.

“But there are always environmental risks in these types of operations,” he told reporters.

Preliminary phases of the fuel extraction could begin as early as Wednesday if approved by Italian officials, the company said.

The company said any discussion about the fate of the ship — whether it is removed in one piece or broken up — would be decided by Italian ship operator Costa Crociere and its insurance companies.

The Miami-based Carnival Corp., which owns the Italian operator, estimated that preliminary losses from having the Concordia out of operation at least through 2012 would be between $85 million and $95 million, along with other costs. The company’s share price slumped more than 16 percent Monday.

It was not yet clear if the ship — which was completed in 2006 — would ever be able to return to service.

Carnival said its deductible on damage to the ship was approximately $30 million. In addition, the company faces a deductible of $10 million for third-party personal injury liability claims.

Carnival said other costs related to the grounding can’t yet be determined.

Yardstick of success: From rags to bespoke riches

Hollie Shaw  Jan 9, 2012 – 8:26 AM ET

Entrepreneur Isaac Ely, a refugee from Iran who arrived with $300 on his pocket, now tailors bespoke suits for CEOs, athletes and celebrities that could run them as much as $36,000.

Isaac Ely’s ascent from selling belts on a street corner to handcrafting luxury suits that sell for as much as $36,000 to a select client list of executives and professional athletes was grounded in his belief that success in business is all about superior service.

“It is not the money that drives me, but knowing how to make the customers happy,” said the owner of Isaac Ely Bespoke, who came to Canada in 1986 as an Iranian refugee with $300 in his pocket.

His clients include entrepreneurs, chief executives and athletes, although he has to remain mum on many of his celebrity and executive clients. “They don’t want publicity. They are always in the public eye and on TV.” But he does drop a few names of people he has made suits for, such as Bank of Canada governor Mark Carney and NHL’s Tomás Kaberle of the Montreal Canadiens.

Mr. Ely got his start with a vending cart in Toronto’s tiny Yorkville district selling women’s belts.

“Vending on the street became more difficult and I really didn’t see a future there anymore. My cousin and I saved up some money and we opened up a store selling discount items.” His interest in men’s clothing led him to open a ready-to-wear clothing boutique, Form.

“That was my base that I started in ready-to-wear clothing. My biggest challenge with that business was that I had customers coming in and I didn’t have the right size, or colour or the fit was wrong. I needed to overcome all that.”

He had an interest in bespoke tailoring, the art of creating individual patterns and suits for specific customers, and started his own business in 1999.

The materials he uses are precious, sourced from mills in Italy and England. Vanquish, a Dormeuil fabric made in England out of vicuna blended with pashmina, costs Mr. Ely $6,500 a yard. Another favourite of his is Royal Qiviut, a fabric made from Canadian muskox. A suit made from the fabric costs a customer roughly $22,000.

“Bespoke is different from made-to-measure and custom [tailoring],” Mr. Ely explained. “Bespoke is the highest level of crafting the garment. It looks at posture, where man rests his arm. The majority of [competing tailors] do custom and made-to-measure, which has more to do with body size, and not fit.”

Mr. Ely started his business with $50,000 in savings, and credits his success to premium service and slow growth. “When you borrow money, it becomes very difficult if you don’t know how to manage it and you get into debt,” he said. “People want to achieve [growth] really fast, and too much debt is the biggest problem in a small business.”

In the first year, Isaac Ely Bespoke had four clients and his suits were priced at $1,500. Today the suits run from $3,500 to $36,000, his staff has expanded to seven from two, and the business has close to 60 clients. Revenue has grown at an average of 20% annually for the last few years and is close to $500,000 annually.

While men’s fashion has always taken a back seat to a far larger global market for womenswear, the broader menswear market is up this year. Sales of menswear and accessories rose to $4.08-billion in 2010 from $4.03-billion a year earlier, according to Statistics Canada, and 2011 sales of men’s suits and sport coats were up 6.1% by the end of September.

“In major markets around the world right now, we are seeing this ongoing polarization of retail in all categories, and [Isaac Ely Bespoke] speaks to that,” says Anthony Stokan, principal at Toronto-based retail consultancy Anthony Russell and Associates.

“In the mass market, we can pay a lot of lip service to customer service, but really it is about a utilitarian experience where the customer is focused first and foremost on price. Certain people in business have then said, ‘Am I going to blow myself out on [inventory] tonnage, or am I going to go highly specialized?’ So you see a targeting of a very specific [luxury] customer in every single retail category now — you have experts who can customize everything from a television cabinet to one-of-a-kind footwear.”

While the customer service elements of bespoke fashion are critical, the wardrobe is even more important for public figures than it was in the past, he said. “The movers and shakers of the business, entertainment and sports communities want to stand out amidst their peers and they are also part of our pop culture. The time we live in is one of endless new media and social media and the bulk of that is profiling celebrity and high-profile people.”

Mr. Ely says that while the bespoke process is long and specialized and the fabrics are pricey, the most challenging part of the business is courting and nurturing relationships with clients.

“Getting clients and building the relationship, that takes the longest time,” he said, and involves a high level of personalized service, at their homes and offices

Some of the clients Mr. Ely has built relationships with and attends to in Toronto, Calgary, Ottawa, Montreal and New York were courted by the designer for as long as two years.

“Most of my customers, literally, they have no time. For some of them, I look after their entire wardrobe. Sometimes at 10:30 at night, I go see a client.”

While some designers are keen to expand their brand and their fortune through licensing to department stores or fashion chains, Mr. Ely’s chief growth plan involves building the business up to 100 customers and selling them $10,000 a year worth of suits.

“Lots of people talk about being an entrepreneur,” he said. “To be an entrepreneur, every day of work has to be better than yesterday … the style, the fabric, making the garment – you always have to be on to.”

Did you know Lenny Kravitz is an interior decorator? What are the best tips for value increasing makeovers?

Q&A: Lenny Kravitz hired to help design Toronto condo
deirdre kelly
Globe and Mail Update
Published Friday, Nov. 25, 2011 10:09AM EST

Lenny Kravitz is a house musician in more ways than one. While popularly known as a multi-award winning pop star who scored four Grammy awards in 2001, the late 1990s and into the last decade, the composer of hit songs like Fly Away and Dig It is also something of a real estate mogul with a history of buying and flipping big-ticket residential properties he fixes up himself under the banner of his New York-based Kravitz Design, Inc. Last year, he sold a 6,000 square foot SoHO duplex he renovated with the addition of a two suspended glass staircases and terrace with wood-burning fireplace to singer Alicia Keys and then fiancé Swizz Beatz for a reported $12.750-million (US), a price that was considerably more than the estimated $7-million he paid for it in 2001. Today he lives in Paris in a townhouse he decorated in his signature sexy style. He also owns properties in New Orleans, the Bahamas and Brazil. When not creating a star-studded real estate portfolio, the multifaceted rock artist with Hollywood blood in his veins — his late parents were the producer Seymour Kravitz and the actress Roxie Roker (The Jeffersons) — is these days appearing in such high-profile films as Precious, the Oprah Winfrey project in which he played a male nurse, and the upcoming and hotly anticipated The Hunger Games, in which he plays a stylist, a role that likely wasn’t a stretch for him given his design-savvy background. After overseeing the design of downtown Miami’s Paramount Bay condo project among other interior design assignments, Kravitz’s next gig is Bisha, a new condo-hotel in Toronto. It is partly owned by Charles Khabouth, a local restaurant and night club owner, who commissioned Kravitz to create a specialty floor for the building, currently in the pre-building stages of development.

The Globe’s DEIRDRE KELLY lately caught up with Kravitz to ask him how he does it all, and with flair.

Q: As a multifaceted artist playing writing and producing all your own songs you have said that when creating music you are writing for yourself. As founder and head of Kravitz Design Inc., your New York-based residential and commercial interior design firm, is the same true: do you also design for yourself, no matter who the client?

A: My first priority is to understand my client and their vision. Then I create my world within that concept. It’s like producing someone else’s music. It is my job to bring out what they are looking for in a new and exciting way that they might not have realized.

Q: You seem to have a thing for Canadians: scoring a Top 50 hit out of your remake of The Guess Who classic, American Woman, collaborating with Canadian rapper Drake on your latest release, Black and White in America, and now joining forces with Toronto entrepreneur Charles Khabouth to create a specialty floor for his new BISHA Hotel and Condo project. How did you meet each other and what made you decide to work together? Do you have a shared vision for the specialty floor?

A: Charles and I met through a mutual friend. He had heard about Kravitz Design and was curious enough to take a meeting. After speaking for a few minutes I saw that we had a lot of the same tastes in art, fashion, and design. He is an interesting gentleman and I saw that he really wanted to create something very special with Bisha. After this meeting I think we both walked away knowing that it would be a pleasure to work together and began to move forward. Our sensibilities for the specialty floor are vey much in line with each others thinking.

Q: You have homes around the world — the Bahamas, Brazil, and Paris, the latter where you’ve lived for the past few years after relocating from New York; how do your environments influence your design aesthetic? How will Toronto inspire you?

A: I am inspired by everywhere that I go. My repertoire is built on my travels and experiences. I can draw inspiration from the Opera in Paris to a shack in a favela in Rio. Style is style. I’ve obviously been to Toronto many times but I will be observing it with new eyes for this project.

Q: If Kravitz Design Inc. has a signature style what is it, and how will it translate to the BISHA project?

A: Kravitz Design doesn’t have a signature style in the sense that you can look at different projects that we’ve done and it might not look like the same firm did them, which I think is one of our strengths. But there is definitely a sensibility that runs through them all that gives each project the Kravitz Design feel. BISHA will be a unique project that will evolve from the collective desires of myself, Charles, and the other Bisha partners.

Q: Condos are more than apartments these days; they are lifestyle statements combining residential living with the boutique hotel experience as BISHA is planning. How might buying a condo with a hotel attached intrigue you?

A: Well, I live in hotels for a living and I become accustomed to the services that I get from fine hotels. But then of course I want to go home. Mixing home with the services and amenities of a hotel is a fabulous lifestyle. This you don’t get from a traditional condo.

Mr. Home Makeover: The man who has flipped more than 50 properties
paige magarrey
From Saturday’s Globe and Mail
Published Saturday, Jan. 07, 2012 12:01AM EST

He may be a self-described narcissist who came late to interior design, but Jeff Lewis, the diva-ish L.A.-based star of Flipping Out on HGTV, can make over a home like no one else. Indeed, the man behind House Beautiful’s 2010 Kitchen of the Year is doing more high-end design work than house flipping these days. During a recent visit to Elte in Toronto, the California native sat down to discuss his roots in real estate, his shift into the decorating world and his new TV

My dad is a real estate investor so I picked up the real estate bug kind of by osmosis.

I bought my first property, which I resold at a loss, when I was 18. It took me a few years to recoup my investment and then I started again at around 25. I wasn’t even aware of the idea of flipping homes until a friend started making a pretty good living at it. For four months I followed him around and watched what he did. Then I bought my first single-family home in Los Angeles. Six months later I had turned it at a profit.

How many properties would you say that you’ve flipped?

Probably more than 50.

How has your design aesthetic changed over that time?

It has evolved substantially in the last 20 years. When I started, I knew very little about design. I have always had a natural gift for what looks good and what feels good but I think with design there’s also some learned gifts. I have become more trained and educated about design.

When my business partner and I split, it was like a crash course in design. I had been more involved in the business decisions and the actual remodelling, but not so much the decorating part.

Do you like focusing on decor?

I had never thought I would like it, but I am so into that now. It’s amazing how you can transform a space with just colour, furniture, accessories, art and mirrors – all the finishing details that I didn’t spend a lot of time on before.

When the real estate market changed in L.A., you stopped flipping and started designing for clients. How did that change your approach?

Before, I always designed spaces that would appeal to a very broad audience because I wanted to appeal to a very large amount of buyers, not just one. But now it’s almost the opposite – you really want the clients to connect personally to their spaces. So I find myself using colours that I would never use before, using furniture that I wouldn’t necessarily use before. And while I used to be ultra contemporary, I’m finding that my design aesthetic is leaning a little warmer, mixing traditional pieces in with modern pieces. It’s a fine line because you don’t want it to feel old; you want it to feel youthful and current.

You’re exploring this more on your new show, Interior Therapy.

It’s kind of the antithesis of extreme home makeovers. Between the two shows I get to present both sides of the design business: the remodelling side with Flipping Out and the decorating side with Interior Therapy. So it really shows all of my talents.


Measure twice, tape out once

“When people buy furniture, they go into a store, see a sofa, fall in love with it and buy it without even measuring,” Lewis says, suggesting instead that shoppers measure the piece in-store, go home, measure the space to ensure it’ll fit and even outline its dimensions on the floor with tape.

Don’t chase too many trends

“A sofa and a bed, for most people, are huge investments,” Lewis says.

“I try not to make the design too trendy.” He suggests opting for neutral fabrics and subtle patterns that homeowners won’t tire of in a year or two. Sticking to more neutral tones for larger furniture items also allows homeowners to rotate pieces once in a while but still keep decor schemes coordinated.

Splurge on the little things

Lewis points to pillows, rugs, window coverings and other accessories as the pieces to experiment with. “That’s where you can bring in the punches of colour, the punches of pattern,” he says. “That’s something that can be inexpensively switched out.”

Go bold with produce

Think of flowers, a plant, even fresh fruit and vegetables as decor items, Lewis says. “It really brings life and texture to a space and it’s an inexpensive way of accessorizing. I’ll take a bowl of oranges and put it on a coffee table and all of a sudden you get that punch of colour you need.”

Which do you think are the best home improvements for your house? You’ve earned it, now how you going to keep it?

The Worst Home Improvements For The Money
Morgan Brennan, 02.11.11, 06:15 PM EST
Not long ago a new bathroom paid for itself when a home was sold. Not anymore.

Like many people, you might be under the impression that home improvements are good investments that pay for themselves when you sell your house. You’d be wrong in most cases. Except for steel entry doors, that is.

Such doors tend to recoup 102% of the construction cost when a home is sold. A front door made of fiberglass–which actually costs more to buy and install–won’t pay off nearly as well. It only pulls in 60% of its original cost.

The sad truth is that most home improvements are like fiberglass doors, and won’t come close to paying for themselves. Some projects–namely room additions and upscale remodeling–are just plain dollar drains, according to the 2010-2011 Cost Vs. Value report.

The annual survey, conducted by Remodeling magazine in collaboration with the National Association of Realtors, compares construction cost estimates (provided by HomeTech Information Systems) with resale value estimates (provided by members of NAR) across the country for 35 mid-range and upscale home remodeling projects.

In 2005 renovations would, at the very least, recoup their costs on resale. Nowadays almost none do. With home prices tanking the past several years, the return on renovations has suffered, especially when it comes to high-end jobs.

“The first projects to start losing value were the bigger-ticket ones, and even now, when people are doing larger-volume projects, they still don’t spend what they used to,” explains Sal Alfano, editorial director of Remodeling magazine.

“You’re competing against the prospective owner’s opportunity to build it [an addition or upscale remodeling] themselves,” seconds Elizabeth Mendenhall, vice president of committees for the National Association of Realtors. When it comes to renovations, it’s vital to keep potential buyers’ tastes in mind, not just your own, she says.

Obviously a homeowner with long-term plans to settle down should remodel however he or she sees fit. Construction costs are still down, and if you want to build that bright pink dream kitchen, have at it. After all, many homeowners are now opting to stay put and update their current homes to better fit their lifestyles.

Just be aware that that decadent kitchen will only retrieve $597 of every $1,000 spent if you decide to list. Other projects sure to lighten your wallet: Home office remodeling, which redeem a measly $458 of every $1,000 spent, sun room additions only $486 and bathroom additions at $533.

These numbers, based on a national average of local comparisons gleaned from across the country, vary relative to each market’s values and demands. If you want to know how a project will specifically affect your property’s value within your neighborhood, query a local Realtor, urges Mendenhall.

If you’re going to shell out money on improvements, focus on your home’s exterior. Windows offer relatively decent returns, as do garage door replacements and siding replacements. Still nothing, save that steel entry door, refills the home improvement coffers 100%–or even as much as 85%. The bright side is these fixes can boost energy efficiency, offer potential tax savings and, when the time does come to sell, add ever-vital curb appeal to your home.
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Aspiring sellers would do well to make some basic fixes as well. Forbes reported last year that sellers could improve their homes for buyers more efficiently–and more cheaply–by simply tidying up the rooms and slapping a fresh coat of paint on the walls. Steve Domber, president of Prudential Serls Prime Properties, a real estate brokerage operating across New York state and Connecticut, also suggests replacing old carpets, using neutral colors and bringing more light into the home.





The five biggest pitfalls to staying rich

Michael Nairne Jan 7, 2012 – 8:35 AM ET | Last Updated: Jan 6, 2012 12:44 PM ET

Chris Ratcliffe/Bloomberg

There are five pitfalls to avoid if you want to preserve your wealth.
When it comes to wealthy families, the expression “easy come, easy go” is more aptly rephrased “arduously earned, easily extinguished.” Serious wealth typically arises from decades of hard work, investment and calculated risk-taking. Yet, hard-won wealth easily dissipates if it is not managed properly.

In fact, JPMorgan Private Bank studied the ultra-wealthy Forbes 400 Richest Americans and found that fewer than 15% of these multi-millionaires stayed on the list over a 21-year period. The majority saw their wealth stagnate or, worse, watched it decline. By delving into these experiences, JPMorgan identified the primary pitfalls in preserving wealth as well as the antidotes. Here are the top five.

1. Excessive concentration in a particular asset is the foremost pitfall. Wealth concentration in a single stock, even one of a large company, exposes an investor to a host of risks that can permanently impair capital. Whether it’s due to the fading fortunes of an entire industry, management pratfalls or a changing competitive landscape, any single investment can easily lose value, sometimes precipitously. How many Research in Motion Ltd. multi-millionaires are no longer “multi” as a result of this stock’s dramatic fall from grace?

Unfortunately, many wealthy families get caught in the trap of overconcentration and never implement the solution — broad asset class and security diversification. The memory of past successes, the prospect of a nasty tax bill on gains and excessive optimism encourage inertia. Some are lucky and see things turn out well, but many aren’t so fortunate.

2. Too much leverage. Borrowing magnifies gains, but it also dramatically amplifies losses. The impact of excessive leverage is particularly pernicious during bear markets, when falling values can trigger margin calls in brokerage accounts or demands for additional collateral on bank loans. These can result in the forced liquidation of investments at fire-sale prices.

Unfortunately, in the blind pursuit of more money, many affluent individuals forget their paramount goal is to stay wealthy. The use of leverage needs to be judicious. In particular, the amount and terms of any borrowing should be fashioned such that the family’s wealth remains fundamentally intact should a “worst-case” scenario play out. Many family fortunes were destroyed in 2008 and 2009 due to the failure to recognize that severe recessions and deep bear markets are inevitable — only the “when” is uncertain.

3. Chronic overspending is the third main pitfall. In my experience, most wealthy families do not budget. This is rarely problematic when times are good and money is rolling in, but in periods of lacklustre returns, excessive spending can outstrip returns and erode capital. Some families then get caught in a downward wealth spiral, withdrawing an ever-growing percentage of their capital as incessant spending depletes their portfolio.

Wealthy families need to scale their spending to their capital base. Those focused on long-term wealth preservation should keep annual spending at no more than 3%-4% of their portfolio value. Monitoring spending is also critical.

4. Taxes are the fourth major cause of wealth destruction. Unfortunately, many high-net-worth families fail to fully integrate their investment, tax and estate planning to minimize this drain. Savvy families and their professionals take an integrated wealth-management approach to their finances.

5. Finally, family dynamics can impair wealth. Discord among family members, often after the death of the parents, can lead to intemperate decisions about the family business and other assets, or costly and protracted litigation. Another classic fiasco is the squandering of wealth by spendthrift children who were never educated in the stewardship of the family fortune.

Forward-thinking wealthy families have implemented formal governance structures, including regular meetings, co-operative decision-making, family philanthropic projects and financial education to better prepare the next generation for the responsibilities of wealth.

Many a wealthy family has found that preserving wealth can be as challenging as creating it in the first place.

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