Monthly Archives: June 2014

Why women earn less than men

WomenCEOIt is not a secret. We all know that women are paid less than men for the same job, women get fewer promotions, and women are a disproportionate minority in the top corporate levels.

Here are some statistics. In the U.S. the median salary for a man is $42,800 and for a woman is $34,700. That is almost a 20% difference and the major reason for this difference is gender. At the corporate level in the U.S. only 4.8% of women hold a CEO position even if at the management level 51.4 % are women.

The primary reason for this discrepancy is plain and simple tradition. Traditionally men have been the breadwinners while women stayed home.

Women came into the labor force during WWII. At that time there were not enough men to keep the economy going and women took up the slack. Women proved that they were just as capable as men. But after the war, women were expected to go back to traditional “women’s” jobs which pay significantly less than “men’s” jobs. the few times that a woman managed to get a traditionally man’s job, she was still paid a “woman’s” salary.

Today, even though women have the legal right to get the same kind of job as men, women find themselves earning less than men for the same job.

Impediments for women’s earning potential are:

  1. The traditional division of labor in the family where women are still expected to do the housework in spite of their full time work.
  2. Women work less overtime hours and have to take more leave of absence from work due to maternity and other unpaid household work which is unequally shared among partners.
  3. Occupational segregation. Some job that are dominated by men and pay better than the jobs dominated by women.
  4. Women are more timid when asking for a salary increase while men tend to be more aggressive.
  5. Men overestimate their abilities and performance and therefore have more confidence searching for higher paying jobs.
  6. Men apply for promotions when the meet about 50% of the qualifications while women apply for promotions when they meet 100% of the qualifications.

Many times the biases that we have against women are deep within our subconscious. It happens often that even women discriminate against other women.

When a woman and a man submit the same job application for a gender neutral job, the majority of the time the job is given to the man.

Waiters earn more than waitresses at the same restaurant. They are tipped higher by male and female customers.

In a study, researchers asked top students male and female how much money they will be earning in 5 years. The men answered $95,000 while the women answered $75,000.

Sweden has turned out to be an interesting laboratory. The quotas in the corporate world and in government have produced positive results. 45% of parliament seats and 25% of corporate executive jobs are held by women. But the interesting thing is that family-friendly policies have increased the gender gap at the workplace. Women can easily drop out of the work force or decide to work less hours, and they do it. Men have the same opportunities but they don’t take them.

Another factor to consider is the way that men and women ask for promotions, bonuses or raises. In general a woman works hard and hopes to get noticed by her superiors, while men boast about their accomplishments. In addition, when a man asks for a raise, it’s normal to be forceful and to negotiate hard, but if a woman uses the same techniques she is perceived as too demanding, unpleasant and unattractive. And even if she gets what she wants, later on she will be disliked by her colleagues both men and female, therefore limiting the possibilities of getting additional raises.

On the surface, all this information gives us the impression that women will always earn less than men, but if we look back in time, it is evident that women have made enormous progress in society and the earning gap gets narrower after each generation. 40 years ago, a woman had basically three choices: nursing, teaching or being a secretary. Nowadays women’s choices are as diverse as men’s and their salary has increased dramatically. Maybe within one more generation we will see a much narrower gap or the gap will become a vintage memory similar to the time when women were not allowed to vote.



Accumulating 1 Million Dollars in Real Estate

discover your tax heaven here in Canada

I wanna be a millionaire

All my life I wanted to be a millionaire. I know, a million dollars doesn’t take you far nowadays, but I’ll deal with that when the time comes.

The stock market

For many years I thought I could find wealth by playing the stock market. I studied the stock market night and day and I traded stocks for about 10 years. In spite of all my efforts, my returns were not much better than the average return of the market.

Screw it, let’s get out

One day, out of frustration, because I was losing tons of money, I decided to sell everything and to stop trading completely. I know myself and that if my money was  available in cash I would be tempted to invest it again, I decided to buy a condominium, to take the cash out of my reach.

My first condo

After I bought my first condominium, I discovered that buying real estate gave me tremendous leverage. With a $60K down payment, I was able to buy a $230K property. With that amount of leverage I was taking a big risk but also I had an amazing earning potential.

Assume for a moment that my property goes up in value 2% – that’s $4.6K. If my initial investment is $60K, my real rate of return is 7.6%. Not bad, eh?

But that’s not all. If the rent that I collect from my tenants is enough to pay the mortgage,  they will pay $4.6K of my debt in the first year. That means that my total return for this property is $9.2K which gives me a real rate of return of 15.3%. This is amazing… the average return for the stock stock market is 8%.

My second condo

The results were so amazing that I decided to buy another property, but then I had a problem. I had no money. 🙁

Now, here is where having some optimism and courage comes into play.

The bank had signaled that if I had a 20% down payment, obtaining another mortgage would change from impossible to very difficult.

I begged my friends for a $60K loan and I promised them a return of 10%. After many days of negotiation with the bank, I got a mortgage for $180K and I was able to buy a second condominium. I was also lucky to be able to rent it right away at a price that covered all my interest expenses and taxes.

Do you know what this means? It means that I bought a second property with $0.00 out of my pocket. How crazy is that?

But it gets even better. Here’s why:

1. As the years pass I am allowed to increase my tenant’s rent 1 or 2%. I collect more money but my mortgage payment doesn’t increase, so I make more.
2. The way that mortgages work is that the payments are always the same, but the ratio of interest and principal payments change over time. That means that on the first few payments most of the money goes towards paying the interest portion, and then with each consecutive payment the ratio changes until most of the payment goes to pay the capital portion.

The future

If I manage to buy two more condominiums, one per year, within two more years I will have total assets of about one million dollars and my dream will be fulfilled.

Of course, there is a lot of debt involved and there is a lot of risk, but so far, in two years, everything has worked out perfectly and as the years pass, with the valorization of the properties and with the yearly rent increases, I will be in a safer and safer position.

There are many ways to invest in real estate, my case is just one of many examples. Real estate is the oldest way to build wealth. It continues to work generation after generation. I encourage you to consider real estate as one of your pillars of investment.


On June 29th we will have our next money talk meeting. We will get together to discuss business, personal finance and self improvement. If you are interested in coming, please send me message.

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I will love it if you connect with me via FaceBook, Google +, LinkedIn and Twitter.

Governments in violation of private property rights

MadisonIn a free market, individuals should be allowed to do peaceful voluntary exchange among themselves.

If I want to buy one liter of milk from a farmer for $1 and the farmer wants to sell it to me for $1, we have created a peaceful transaction beneficial to both of us.

Did you know that in Canada you need a permit to have a milk producing cow and that the permit could cost anywhere from $20,000 to $30,000? This market intervention by the government has eliminated the small farmer and has increased the price of dairy for Canadians, hurting the poor.

When a government interferes with the peaceful transactions of two individuals, it is in violation of personal rights.

When France decided to levy a tax on the rich up to 75% of their income, this was a grotesque violation of personal rights.

When the city of Seattle imposed a minimum wage of $15/hour, this was a violation of the private right of two individuals; those who were happy to hire for less and those who were happy to work for less.

When a government taxes more than 50% of one person’s income to spend on government waste, wars, and many programs designed to buy votes, this is a violation of private property rights.

When government forces one person to work for the benefit of another person, this is the definition of slavery. When an individual refuses to give up 50% of his earnings, he is threatened with incarceration, thus, the government takes away from one person to serve the institution of government.

The Consequences.

As for the dairy producers, the people become disenchanted with government policy, a strong belief that the system is rigged in favor of those with capital is implanted in people’s heads, farmers cheat and sell directly to consumers via the black market. Canada’s position in the international market is decreased and consumers suffer the consequences of artificially high prices.

In France, the rich have simply opted to move to other European countries. Thus France has lost a tremendous amount of financial and human capital, at the same time unemployment continues to increase. We tend to forget that those people have been the primary creators of jobs. Governments do not create jobs. Governments take money from productive members of society to create their bureaucratic positions.

In Seattle, there has been an exodus of businesses that rely on human capital. Thus there is higher unemployment. In addition, these policies have accelerated the automation of businesses. There are no more bank tellers, people at service stations, cashiers in groceries stores or servers at restaurants. It becomes cheaper to buy a machine than to hire an individual. If cities want to create jobs, they should allow a free market economy to flourish, reduce red tape when an individual wants to open a business, and reduce business taxes. For example, lower taxes have created thousands of new jobs in Ireland.

As for the high taxes in North America, governments are confronted with the notion that capitals are fluid. Big corporations like Apple and Google keep their earnings and their business outside North America. Individuals open accounts in fiscal paradises or spend their energy creating tax avoidance schemes instead of creating more jobs. And the ultimum consequence, citizens renounce their Canadian or U.S. citizenship and move to other counties where creating capital is not stigmatized nor punished with higher taxes.


On June 29th we will have our next money talk meeting. We will get together to discuss business, personal finance and self improvement. If you are interested in coming, please send me message.

Connect with me.

I will love it if you connect with me via FaceBook, Google +, LinkedIn and Twitter.