Talent Development Centre

Category Archives: General

All general Talent Development Centre posts for Canadian technoloy contractors.

Contractor Quick Poll: What’s your preferred web browser?

There are a number of factors that play into a person’s preferred browser, including availability, user experience, security, compatibility. Other times it’s simply about branding and loyalty to a specific company like Google, Apple or Microsoft.

Although Google Chrome is reported to be the most-used browser around the world, we’re still curious to know about technology professionals’ preferred browser. That’s why we’re asking the question in this month’s Contractor Quick Poll.

How to Achieve Financial Freedom Through Passive Income

This post by Jose Michaca was originally published on the CPA4IT Blog on January 17, 2019     

How to Achieve Financial Freedom Through Passive IncomeImagine what your life would be like if you knew that all of your living expenses were covered. That you could roll out of bed, do nothing, and still have all of your basic needs met. That instead of living paycheck to paycheck, you could do the work you want to do rather than the work you have to do. This is financial freedom, and it can be achieved through passive income.

Now, the common misconception is that financial freedom is synonymous with retirement. It’s not. Regardless of age, when you generate enough passive income from your investments to cover all of your living expenses, you have financial freedom. Once your living costs are covered, employment becomes optional, and you’re free to focus on the things you’re truly passionate about.

It sounds pretty ideal; however, building enough passive income to realize this goal requires careful planning. As a small business accounting and tax accounting firm, CPA4IT regularly helps clients to determine their “financial freedom number” and then set a clear path forward. Here’s how we do this.

OUR PROCESS

Identify how much passive income you require

Financial freedom means having your base monthly expenses covered, which means you need to know what those expenses are. So, the first step is to make a list of all of your necessary financial commitments—rent/mortgages, utility payments, internet and phone expenses, insurance premiums, car payments, health expenses, school expenses, childcare expenses, basic food, clothing, entertainment, travel expenses, and so forth.

The amount of passive income a person needs will vary. A younger person who may be putting a child through school will have higher monthly expenses than an older individual whose children have left home. For the purposes of this article, let’s say you break down those costs and determine that you can live off $6,000 a month.

Determine your financial freedom number

Now that we know what your expenses are, it’s time to figure out how much money you need to save and invest in order to make $6,000 per month in dividends. To start, we look at your personal balance sheet to determine where you are now, financially. Do you have a house? RRSPs? A TFSA? Unregistered investments? Assets?

Once we determine what your current equity is, the next thing to figure out is how much total equity you need. So, if we take your monthly expenses of $6,000 and assume a 5% dividend, you would need a $1,444,000 principle to generate that amount. We then subtract your current equity from that amount to give you your financial freedom number. Let’s say you’ve currently got $700,000. Your financial freedom number is $744,000. Once you hit that target, you’ll be able to sustain your lifestyle through passive income.

Now that we know how much you need to put away, the next step is to establish a game plan for how exactly you’re going to do that.

Apply the Financial Freedom Pyramid of Power

The Pyramid of Power is most commonly applied to business strategy and goal-setting. However, at CPA4IT we’ve developed another version—the Financial Freedom Pyramid of Power. The Pyramid breaks down into four simple steps that we use to help you achieve financial freedom through passive income. Let’s take a look at these steps and their related strategies in more detail.

Invest it—start earning passive income.

Protect it—insure yourself and your assets.

STEP 1: MAKE IT

Maximize your earnings by …

Evaluating your income.

Obviously, a big part of building equity relates to your income. If you’re an employee, what is your base pay rate and are there additional skills or trainings you could get that would earn you a higher hourly rate or salary? If you’re a business owner, what are your short-term and long-term plans for business growth? How will that impact your income over the next 3-5 years?

Let’s say you’ve built up your net worth but it’s just not enough. Perhaps you had a rough time in the market and worry that you no longer have enough money to retire, or perhaps you started saving late and worry that you won’t be able to hit the amount of equity you need in order to achieve financial freedom.

Then the question becomes, how can you generate more money with what you’ve currently got? Can your current assets generate more income? Are there expenses that could be cut? If not, we usually may get out clients to work on developing a full traditional Pyramid of Power to help us explore options.

STEP 2: SAVE IT

Maximize your savings by …

Evaluating your spending habits.

As stated earlier in this article, it’s important to understand where your money is going. In fact, one of the very first things we do with our small business accounting clients is evaluate spending. Whether you’re working with an accountant or not, it’s a useful exercise. Ask yourself, where is your money going right now? Is there anything that can be cut out? Are there non-essential expenses that are ultimately less important to you than your financial well-being? If yes, cut those costs, and save instead.

Banking every raise you get.

Usually when people make more, they spend more. Unfortunately, this is not the best saving strategy. The best strategy is to stick to your existing budget and divert that raise directly to savings. Of course, there will be times when unavoidable new expenses arise; however, as an overall strategy banking your raises can really help to boost the amount of money you have available for investment. This strategy is particularly useful for millennials who may already be accustomed to living on a budget and could divert raises to paying down student debts more quickly.

Setting aside $0.30 of every dollar you earn.

As a base minimum, you should be diverting $0.10 of every dollar you earn towards savings. But there are other considerations. Namely, taxes. Taxes are deducted automatically for company employees, but if you’re a business owner, entrepreneur, or self-employed individual, you should be setting aside at least $0.30 on every dollar to cover your GST and taxes owing. You’ll likely use $0.20-0.25 of that to pay your taxes. Once you’ve settled up with the CRA, anything left over can be pushed to your savings. If you can manage the other $0.10 on top of that $0.30, even better.

Paying off bad debt.

If you have debt, your first instinct may be to pay that off before you begin saving. Sometimes this is a sound strategy, sometimes not. There’s a difference between good debt and bad debt. Good debts are low interest debts, like lines of credit and mortgages. Bad debts are high interest debts like credit cards. Debts to the CRA, such as amounts owing on your GST and payroll / source deduction taxes or personal income taxes, also fall into the not-so-good category. It’s wise to discuss your current debts with your small business accountant to ensure that debt repayment is adequately accounted for in your saving strategy.

Investing (slightly) less in your business.

Entrepreneurs and small business owners work hard, often putting everything they make back into their business. But that’s putting all of your eggs in one basket. What happens if, in 20 years, the business doesn’t work out? Even entrepreneurs need a bit of a balance. Moreover, as a small business owner, you won’t have access to a large company or government pension. Instead of investing 100% of your profits back into your business, make it 75% and use the rest to build up your nestegg.

Worrying less about the mortgage.

Contrary to common belief, paying off your mortgage isn’t the best path to financial freedom, particularly when you’re self-employed since your mortgage is a deductible expense. By paying it down you’re losing that deduction. Sure, you’re paying off debt, but that debt is only costing you 3.5%. If you invested that money in the market instead, you could make more than that amount in dividends. Strategies like the Smith Maneuver can also be used to simultaneously build up your net worth while paying down your mortgage.

STEP 3: INVEST IT

Maximize your passive income by …

Starting to invest right away.

Now that you’re saving, you want to start earning passive income as soon as possible so that you can continue to increase your savings. Unfortunately, you usually need $200,000 or more before a financial advisor will be interested in working with you, which means that initially you may be reliant on your own knowledge.

There are plenty of resources out there. Start by looking for investments that provide at least a 5% dividend, ideally 7%, and have minimal management fees (if any). Your small business accountant can offer suggestions on how to manage investment accounts and can offer you a few pointers on what sort of investment options will be most accessible and manageable for you based on your current level of equity.

STEP 4: PROTECT IT

Maximize your long-term security by …

Protecting your investments.

What we’re talking about here is insurance, and the strategy is pretty straightforward—get some! The key types of insurance you should invest in include health insurance, life insurance, homeowner’s / rental insurance, disability insurance, and car insurance (if you own a vehicle). In terms of stocks and bonds, there’s no way to directly insure these assets, but you can make sure your portfolio is diversified and consult with a financial advisor to develop strategies for handling your investments in times of market turmoil.

If achieving financial freedom through passive income appeals to you, we’re here to help. Contact CPA4IT for a more information about how to arrange a consultation.

How are Canadians Faring with Debt? Stats Canada Has the Answer

As a business owner, you’re regularly managing and balancing debt-to-income. As a job seeker, you may be considering a new city to find work but questioning the lifestyle you can live there. And as a human being, it’s natural to be curious where you stand compared to others. This eye-opening infographic recently released by Stats Canada answers those questions for you, and provides some incredible insight to our country’s debt situation.

In the last 10 years, debt-to-income ratios across the country have continued to rise in comparison to our neighbours’ to the south where they are declining. Furthermore, we can see that debt-to-income rations are relatively high for those at the bottom of the income distribution in Census Metropolitan Areas (CMAs) where housing prices have increased.

If you’re interested in learning more, all of the details are summarized below and you can see specific numbers and information here.

How are Canadians Faring with Debt? Stats Canada Has the Answer

Dealing with Discrimination as an Independent Contractor

Dealing with Discrimination as an Independent ContractorDiscrimination, racism, sexism or any other sort of inappropriate behaviour should never be tolerated in the workplace. As an employee, there are options and resources available to end it that ensure a safe and respectful environment. According to Canadian Human Rights legislation, independent contractors are entitled to the same rights, but unfortunately, dealing with these uncomfortable situations is not as easy.

It’s rare that IT contractors will find themselves in a professional work setting that has loud, belligerent racist outbursts like we hear about through the media. It is more likely, but equally unacceptable, to be in a situation with subtle nuances and innuendos, jokes, or lack of respect and opportunity because of race, colour, ethnicity, sex, etc. Nobody, including independent contractors, should have to deal with this but quitting is no easy option for an IT contractor who signed a legally binding agreement, not to mention the fact that you can’t just walk away from the pay. Instead, there is a challenge to solve the problem, all while maintaining a positive relationship with the client and staffing agency. Failing to do so could result in a loss of your current contract (or a miserable time for the remainder of it) and a difficult time landing future gigs.

Here are a few suggestions to ensure your contract experience is respectful and free from discrimination and harassment, all while maintaining positive relationships:

Start with a Reasonable Conversation

Being professional is the key to dealing with a colleague who crosses the line. Remain calm and avoid firing back at a client’s employee with debate, insults, or any other confrontational tone. On the other extreme, experts recommend not to make light of the situation either, by adding in jokes or playing into the situation. This reinforces their behaviour and hurts your case if you need to escalate or end your contract.

It is possible the person is just ignorant and informing them that what they’re saying or doing is inappropriate may be all it takes. However, not everybody is approachable or open to that discussion. If it’s in your personality to avoid confrontation and remain quiet, it is ok to do so… temporarily. When you’ve calmed down, make a manager with the client and your recruiter aware that inappropriate comments or actions are being made. Again, a reasonable conversation will go much further and be more productive than anger and threats.

Document Everything

Once you’ve attempted to diffuse the situation professionally, if the behaviour persists, it is best to walk away. As already noted above, though, that is not easy for independent contractors. To make this step smoother, keep detailed documentation. This includes all specific incidences, including who was involved or around, conversations you had with the client, and conversations you had with your recruiter. It’s also encouraged to consult a lawyer if you think you need to terminate a contract over discrimination or harassment.

Be Careful of Your Own Behaviour

Just as you deserve a respectful workplace, so do other independent contractors, your clients’ employees, and your recruiters. You also have a responsibility to refrain from any discriminatory behaviour, comments or jokes, and the slightest slip-up can seriously harm your career. In addition to people just not liking you, you create risk for staffing agencies and clients as you expose them to lawsuits from their own employees. Be open to the signs that you may have crossed a line and, if the worst happens, fix it quickly.

Workplace discrimination, racism, sexism, harassment, etc. are not easy conversation topics but they are important. IT contractors especially need to be aware because as a business owner, your responsibility is heightened. You need to defend your own rights while at the same time, protect your business from any risk. Avoid getting into a discussion or telling joke that could be controversial in any way. If you are put into an uncomfortable situation, always confront it professionally and consult a lawyer when you feel it’s beyond your control.

5 Ways to Lead an IT Team When You Have No Authority

5 Ways to Lead an IT Team When You Have No AuthorityHave you ever started a contract tasked with overseeing a project and leading some of the client’s employees, only to have no authority whatsoever over those people? It’s a common scenario for IT contractors, especially Project Managers. You’re accountable for a project and are required to motivate individuals to complete tasks on time and to specific standards, but have no official pull over them.

Leading without authority is no simple task, but there are strategies to master it. Here are five tips to consider next time you’re stuck managing a team in the capacity of an independent contractor:

1. Accept That You’re Not the Boss

You must come to terms with the fact that, no matter how much it feels like it, you are not the boss. You have no official authority and cannot dole out consequences, so don’t act like a tough manager. Instead, you’re a leader. Provide logical reasons for why tasks need to be done a certain way and explain the natural consequences of what will happen if they’re not (ex. the project will fall behind). The team does not need a micromanager dictating how to do every little thing, but rather an expert who understands the situation and can clearly communicate the objectives and outcomes.

2. Communicate Regularly

Speaking of communication, that is the next key to leading with no authority. Communication is a two-way system and it needs to happen regularly and positively. While you may lead the conversation, ensure that you are not completely driving it and others have a chance to speak. This is how you can ensure the team is all on the same page and following the same goals. You can work together to set expectations and make agreements on when/how work will be completed. When these are created as a team, they are more likely to be adhered to.

3. Lead by Example

Actions speak louder than words and if you want people to follow and listen to you, you need them to trust you. It’s important to take action and show that you’re as committed to the project as they are and working just as hard. On top of that, offer to help your team when they’re backed up or going through a crisis.

4. Be Humble

Your extensive credentials and massive amount of experience compared to other members on the team is irrelevant… at least to them. While it is alright (and necessary) to demonstrate your qualifications, there is no reason to regularly remind people. It’s important to publicly thank people, give credit where credit is due and, most importantly, recognize when people are smarter than you.

5. Get Ahead of the Negative People

Regardless of how much you follow tips 1-4, you are going to end up here at #5, dealing with the negative person who resents you and refuses to respect your position and your efforts. The good news is, if the person is openly resisting you, it’s often a sign that they care about the project. Embrace this individual’s passion but don’t let them waste your time. If somebody has no desire to work with you, do the minimum you need to with them, and work closer with those who are willing to work as a team. When you meet with your client, you can discuss the performance of the employee and develop a way to better engage them.

Leading is not an easy task in any role, and when you have no authority, it is a completely different challenge. As an independent contractor, you must remember that employees have invested themselves into the organization and the project.  They are passionate and want to know it is going to work. When you display that you want to work with them, towards the same common goal, leading starts to get much easier.

IT Industry News for December 2018

Kevin Dee By Kevin Dee, Chairman of the Board at Eagle

This post first appeared on the Eagle Blog on January 17, 2019

Tech News Header

This is my 30,000 foot look at events in the Tech industry for October 2018.

What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of previous year’s Decembers …

Oracle logo a large software company originally noted for its databaseFive years ago, December 2013 Oracle paid $1.5 billion for marketing software company Responsys; Akamai paid $370 million for cloud-based security solutions provider Prolexic; JDS Uniphase paid $200 million for enterprise performance management company Network Instruments; IBM bought a “big data” file compression company Aspera and Hitachi expended its solutions capability with the purchase of Calgary based Ideaca. December 2014 was not such a slow news month, with the political and technical ramifications of “the Sony hack” causing uproar, some very positive economic indicators out of the US and some big names making acquisitions, albeit not huge deals.  Microsoft made two acquisitions, the $200 million purchase of mobile email app startup Acompli and mobile development company HockeyApp (which has nothing to do with hockey).  SAP bought travel and expense management company Concur; Intel bought a Montreal based identity management company PasswordBox; Oracle bought digital marketing company Datalogix; Teradata bought data archiving company Rainstor; and MongoDB bought high-scale storage engine company WiredTiger. Three years ago, December 2015 was not a busy M&A month but there was some interesting activity.  The big deal saw Canadian telco Shaw make a big play into the cellular space with its proposed acquisition (subsequently approved) of Wind for $1.6 billion.  Meanwhile Rogers was also out shopping and growing its Maritimes presence through the acquisition of Internetworking Atlantic Inc.  Other deals in December were not large but did feature some of the big players.  Oracle bought Stackhouse a cloud company with a specialization in “containers”; IBM boosted its video in the cloud capabilities with the purchase of Clearleap; and Microsoft picked up a mobile communications company, Talko.  Other deals saw Ingram Micro buy the Odin Service Automation business from Parallels and in the storage world Carbonite bought Evault from Seagate. Uber logoIn December 2016 Adecco sold its majority stake in Beeline VMS to GTRC, a private equity firm, for $100 million in cash plus a $30 million note; CRN solution provider SS&C purchased asset service firm Conifer for $88.5 million; solution provider QRX Technology Group acquired IT equipment provider Kerr Norton; networking solution provider, Juniper Networks acquired cloud operations management provider AppFormix; Uber bought start-up Geometric Intelligence Inc.; and Shopify acquired Tiny Hearts, a Toronto-based mobile product development studio. The apple logo and apple with a bite out of itLast year, December 2017 saw Atos enhance the footprint of their IT Services firm by paying $5 billion for Gemalto.  Apple were busy, paying $400 million for music recognition app Shazam, plus they invested $390 million into optical communications components company Finisar.  Finally, in a relatively quiet M&A month Ingram Micro increased its data protection capability through the purchase of Cloud Harmonics.

Which brings us back to the present …

IBM logoDecember 2018 saw IBM sell off a portion of their software portfolio to HCL for $1.8 billion.  Cisco paid $660 million for optical chip company, Luxtera; and OpenText paid $310 million for data management company Liaison Technologies.  In other deals, Google bought “where is my train” app company, Sigmoid Labs; Corel bought desktop virtualization company Parallels; Trello bought Butler, whose product is a popular addition for Trello users; Kaseya bought IT documentation company IT Glue; and GE continued its restructuring efforts by spinning out its IoT subsidiary and selling its interest in Pivotal.  Finally the end of December was the beginning of Dell’s return as a public company.

Huawei logoOther companies in the news include Huawei, who are facing bans in many countries with concerns over its relationship to the Chinese government; and Verizon announced some large scale layoffs, affecting 10, 400 jobs.

The economic and job news continues to be generally positive, with the US continuing to have impressive results and Canada having some good results (November jobs) and some tepid performance (GDP numbers).  Around the world things seem relatively positive other than some notable spots, the UK with Brexit and Chine with some economic retraction.

That’s my look at the tech news for December 2018.

Until next month, walk fast and smile!

19 Simple Psychological Tricks That Actually Work

The human mind is complex. Every time we think we have it figured out and can predict behaviour, we learn more about psychology that can be absolutely mind blowing. Armed with the right information, it’s amazing how we can trick our minds (or someone else’s) into taking specific actions.

This video from Brightside is filled with 19 different psychological tricks. There are plenty of hacks in here that can help the IT contractor from making people like you to winning negotiations. Number 10 sounds interesting… but be sure to warn anybody living in your house before trying it. They’ll think you’re a little nuts! But if it works, it will be worth it.

Which Project Manager are You?

A strength of a good team is having a mix of people who think differently and exhibit individual personalities, all while embracing diversity to work well together. Any role can be taken with a unique approach that is driven by a person’s strengths and work habits, including a Project Manager.

As the infographic from ZoHo below points out, Project Managers in any discipline, including Information Technology, all vary in their style yet still require some key traits. The infographic identifies seven characteristics that it says all Project Managers must have — Resourceful, Creative, Vision, Delegator, Detail-Oriented, Adaptable, and Guidance — followed by seven styles of Project Managers and each of their strengths and weaknesses in respect to the characteristics.

Have you worked with any of these Project Managers or are you one of them? Do you agree with their ratings? We’d love to hear your thoughts on this topic. Please share them in the comments section below.

Which Project Manager are You?

2018 in Review: The Greatest Time Wasters

We’re not all personal development, job search tips and work. Sometimes, (usually Friday) the Talent Development Centre strays off into another world of humourous or geeky content. It sucks you in and wastes your time, but when you share it, it also gets you the most reactions from your followers.

Today’s Friday and there’s a good chance that if you’ve been working this week, many others in your office haven’t been. That means that the environment is either slow or the opposite, things are hectic while you cover vacations and catch up on items that arose during holidays. Regardless, we think you deserve some relaxation and procrastination (just don’t bill for it). To wrap up our 2018 in Review series, here are the best posts that wasted your time in the past year…