Boomers

If the door’s open the next time you hop on a Westjet flight to Vancouver, take a look at the captain. What one should look like. Tall, silver hair, slightly athletic build, eagle blue eyes, distinguished as hell.

Trevor’s 57 now, has been flying for more than 35 years and is at the top of his game. He takes control of a thing that weighs 154,000 pounds and is 117 feet across like it’s a jaunt home to Mississauga in his Prius. Total control. Makes you want to genuflect a little.

But, sadly, I know the other side of Trev. That house thirty minutes from the airport cost $825,000, of which $515,000 sits in a mortgage. It looks like a place where an airline captain should live – a guy who daily is responsible for the lives of 149 people and $65 million worth of airplane. But, as Trevor has discovered, it’s also illiquid. On the market now for one entire year, and no offers.

This is too bad, since my advice to him was to bail as fast as he possibly can. For a guy with a $165,000 salary, he’s a walking (sorry, flying) disaster. The company pension plan is nothing to brag about, and won’t possibly cover the cost of a homemaking wife, two teenagers and a Mississauga McMansion when he hands in the wings in three years. RRSPs amount to less than $125,000 and are invested in a dog’s breakfast of do-nothing mutuals and dead-end GICs.

“I really should do something about this,” he told me in a duh moment.

Well, Trev is a Boomer. Like many of the nine million in his cohort, he’s now in his peak income-earning years. He’s also fairly screwed, despite being a workplace deity. He may have net worth of more than $400,000 and a mediocre pension but three-quarters of that wealth is illusionary, sitting in a 4,000-square-foot palace nobody wants to buy. At least at that price. The odds are pretty good he might end up taking a $200,000 haircut, which means half his net worth will crash and burn.

TD Canada Trust must know all about this. The bank dumped a new survey on us this week. It’ll scare the poop out of anyone thinking the real estate market is not on the precipice of a demographic chasm.

For example, people in their mid-forties to mid-sixties should, of course, be mortgage-free. They should have buckets of equity, a diversified investment portfolio, balanced asset allocation, a retirement plan and no more than 40% of their NW in real estate. Anything other than that spells fail.

But, says the bank, less than half of Boomers in Ontario have paid off their mortgage (that number rises to almost 60% in Alberta). A quarter of Boomers have retired less than 40% of their home debt.

Now think about that for a second. We’ve just come through a decade of the lowest mortgage rates in a generation. Loan costs today are close to historic lows. Boomers are in their golden years for earning dough. If there ever was an easy time to trash debt, it must be now. So what the hell have these people been doing?

It means millions of wrinkly old snorts facing imminent retirement have no choice but to cut and run. They cannot quit work with fat mortgage debt (remember that 70% of people are not like Trevor – they have no pensions), since it’s cash flow, not real estate, they require.

If you don’t think this means a tsunami of new listings in the next few years, well, the bankers have more news for ya. More than 85% of Boomers “say their next move will be to a smaller home.” And the most-often cited reason for moving (natch) is to “save money.” This is the spin TD put on it: “Many boomers find that their needs and priorities have changed since they moved into their current home. If you find you have more room than you need, consider ‘right-sizing.'”

Hey, it’s better than squirrel steaks.

So, shed a tear for this poor, lost and misguided generation. After living five or six decades in a non-stop inflationary environment where real estate doubled personal wealth every decade or so, where university tuition cost $500 a year, employers actually hired people with arts degrees and aging rock stars with enlarged prostates are still considered cool, it’s come to this. Big illiquid houses, debt that will only get more costly and plastic hips.

So here’s the deal. If you’re a young person lusting for a house, wait. There’ll be lots of geezer carrion soon. If you’re a Boomer like Trevor, cut your losses and bail now. It only gets worse as this decade marches on. There will be no rebound in the value of suburban castles.

Mostly, let this be a lesson to everybody. Houses are shelter. They are not retirement plans. They’re not financial strategies. They can turn into wealth traps. And soon you’ll look at a pilot living in a big pile of bricks the way we scoff a loser driving an Olds Delta 88. Or maybe a Hummer.

BTW, I’m starting a Boomer Relief Fund. Are you in?

226 comments ↓

#1 Love this Blog on 10.28.10 at 10:31 pm

I CAN’T BELIEVE IT!! I beat the Realtors to the comments!! The market must be picking up again. The crash is over!!

#2 Peter on 10.28.10 at 10:33 pm

BTW, I’m starting a Boomer Relief Fund. Are you in?

Nope. Let ‘em rot.

#3 WINNIPEGER on 10.28.10 at 10:35 pm

If your age 60 or more:

I’m guessing they are enjoying their lives before they hit the big 6-O! Having fun! Because all you have to look forward to after is poor health , boredom , lawn bowling and golf if you can use a cart.

We are all mortal. Most of us think we will live forever.
Financial prudence is important but at what cost?
Who wants a 800K mansion at age 60 anyways!

Dump the house asap…… buy a decent smaller place and SPEND some of your profits. As a pilot you get free flights… take trips….enjoy yourself….

Life is too short to die rich.

#4 Mister Obvious on 10.28.10 at 10:35 pm

Is mos non terminus puteus

#5 Cowboy_aka_My_View on 10.28.10 at 10:36 pm

Maybe this Halloween I will dress up like a retiring boomer or a young FTB-greater fool. Very scary!

#6 culler on 10.28.10 at 10:37 pm

I’m in. I pledge a case of cat chow. I hope my cat won’t be too pissed. Maybe I should pledge him too. LOL

#7 Kitchener1 on 10.28.10 at 10:38 pm

Nice write up , its going to be a busy blog as it always is when it comes to boomers.

Personally, I hold the same stance as always, I dont begrudge anyone a gain on RE and I dont feel sorry for them when they lose their shirts.

BUT, as much as my gen x’rs or y’s or anyone else hates the boomers, that crew controls our govts and elections, they are mafia in the world of politics.

So, as an early 30’s dude, I look forward to paying more tax for less services, more grey haired drivers causing mayhem, more lineups at grocery stores as the old posse count their nickel and dimes infront of me, a crappy healthcare system should I ever need to use it.

All while they tell me how “things were different” for them and how “hard they worked” and they got screwed at the end, etc……

Bottom line is that no generation to date has ever had it as good for as long as the boomers. Thats not to say they all had it good, but as a generation, life was good.

#8 bridgepigeon on 10.28.10 at 10:40 pm

This site is like a support group; I have my open house this weekend, step 1, although the idea here is to be liquid…

#9 RICHARD LICKER on 10.28.10 at 10:45 pm

If you own a smaller home………50’s bungalow would be perfect, that is close to the heart of the city you are golden. Right?
I am so golden!

#10 Debtisforever on 10.28.10 at 10:51 pm

Here’s an obvious question: How can these Boomers not have paid off their mortgages when houses were like $150k, $200k and they had decent jobs? What happened? Oh…they decided to “upgrade”-buy the bigger house, with the bigger mortgage because ‘”real estate always goes up”
Sad. Very sad.

#11 T.O. Bubble Boy on 10.28.10 at 10:52 pm

Boomer Relief Fund? For the guy who decided to buy a $825k McMansion in Mississauga as he moved towards retirement?

no thanks.

#12 mkultra on 10.28.10 at 10:52 pm

Garth, I agree with you that your blogreaders are a bunch of squirrel-whacking munch-job… or is it squirrel-munch whack-job? oh it doesn’t matter – you know what I mean.

#13 T.O. Bubble Boy on 10.28.10 at 10:59 pm

HAHAHAHAHA

“That’s probably because the evidence is piling up that there was no such bubble and, maybe not surprisingly, the nonexistent bubble isn’t bursting.”

http://www.montrealgazette.com/business/Canadian+housing+market+regaining+balance/3737651/story.html

Good honest reporting here!

#14 Utopia on 10.28.10 at 11:00 pm

I read your Blog of yesterday Garth. (Markagedon).

It was good.

It was very, very good actually. Possibly one of the most bang-on accurate pictures painted yet. I hope it scares the sh*t out of some of the complacent fools who haunt this blog and spurs them to action.

If only they would listen.

By the way I do have respect for Mark Carney. That comment may not go over well on this blog but I really don’t care. Mark has been public, vocal, honest and forthcoming regarding real estate and the future of our economy. He has expressed a rare view and insights that I agree the Dawgs should heed.

In that regard, Mark has shown respect for all Canadians and has proven himself to be above the political flotsam and jetsom of the day.

The guy has a real “set” too when you consider what he is up against in Ottawa.

Go Mark!

#15 titicaca on 10.28.10 at 11:02 pm

No comments on the previous photo – the ad for “Customer Default Sale” on a condo tower behind the drop in center. I’m surprised they would advertise like that – doesn’t come across as being high-end.

This brings memories of my walk to downtown by the Cecil Hotel, right across from the condos, where prostitutes would earn $20 four times a day, in the parking lot, to pay for heroin – lovely!

I sold my overpriced bungalow in Bridgeland allowing me to rent a place where my walk is much more pleasant.

Has anyone seen George Webber’s book “Last Call” on the notorious East Village?

#16 mkultra on 10.28.10 at 11:04 pm

Garth, do you really drive a Hummer? H1, H2, H3? If its an H3 – that’s a poser Hummer (translation: driven by squirrel-whacking munch-jobs)

#17 Dodged-A-Bullit-in Alberta on 10.28.10 at 11:10 pm

Greetings: ” It looks like a place where an airline captain should live” Therein lies the flaw. I spent 26 years maintaining the aircraft for guys like Trevor. When the snow, ice and rain was blowing around our arses at two in the morning the Trevors of the world were sitting in a nice warm cockpit, APU running and AC packs keeping them toasty. At the top of my career my wages never cleared 55 thousand and the wife and I never owned a home valued at more than 250 thousand. The key word being “owned” as in mortage free. I guess I just was never cut out to be a “workplace deity” and I humbly bow before Trevs’ magnificance as I deposit my monthly pension cheque.

#18 604genX on 10.28.10 at 11:20 pm

Boomers deserve some payback after the binge of consumerism they have inflicted upon us all and the planet over the last 40 years. Good riddance from the workforce and sayonara.

#19 timbo2 on 10.28.10 at 11:21 pm

What’s wrong with squirrel steaks ?

#20 BrianT on 10.28.10 at 11:29 pm

#7Kitchener-not accurate-studies have determined that career-wise, the optimum years of birth were slightly before the boomer bulge-these employees benefited the most from the increased workplace population which followed and grew their employers and their careers. If you had to pick one year from this metric it would probably be 1940-i.e. 70 yr olds of today.

#21 squidly77 on 10.28.10 at 11:37 pm

Maybe this Halloween I will dress up like a retiring boomer or a young FTB-greater fool. Very scary!

No dress up as a forty something realtor, much, much scarier.

#22 andrewS on 10.28.10 at 11:42 pm

Who are you selling to? The baby boom echo?

a) There are like three of you for every one of us.

b) we can’t find jobs either.

c) You have home equity. We don’t. We can’t even get on that ladder because your homes are so stupidly overpriced

d) We get married late, if at all and find ourselves not having children more and more. McMansions are useless to us.

e) Time is valuable. We like to live fairly centrally. Given the choice of a condo downtown and a mcmansion in 905ia, guess which one wins. McMansions are useless to us.

f) If you think we have the money to buy your McMansion, and pay for both your health care and the infrastructure you’ve spent the last 30 years neglecting, you’re sadly delusional.

Also, let’s not forget the debilitating student loans, the need for up to a full decade more school than you needed.

Face it, those under-30s you’re depending on to fund your future? Most of us consider ourselves lucky if we can afford to fill the gas tank up to the “F”. If you’re lucky enough to own a car to fill up.

#23 Old_is_Gold on 10.28.10 at 11:43 pm

When mindless drivel like Oprah and Desperate Housewives, even HGTV and CNN, and NFL and Hockey are more important to people than an understanding of their financial matters, then they deserve what they get. If they have time to spend 4.7 hrs. each and everyday in front of boob tube, they deserve what is coming to them. When they trust their politicians and news (fairytales) reporters to guide them in their financial decisions they deserve what they will be getting. When they are too lazy to use their God given intelligence, and choose to follow the herd like sheep then they deserve no sympathy or pity. Whey they choose to tune out rather than seriously consider and evaluate information that is vital to their own well being, then let them go bust, they have dug their own graves, they have made their own beds, let them lie in them!!!!

#24 nonplused on 10.28.10 at 11:51 pm

Am I in? Only if it’s a Ponzi scheme and I get in early and out early. I don’t buy this “long haul” thing.

I don’t know, haven’t we done the boomer thing enough? What did we expect of a generation who spent their youth skipping the fence at Woodstock and then getting lace with LCD in the drinking water and humping in public all weekend? It’s time to move on without them. Not saying we shouldn’t look after them but they shouldn’t be piloting the plane we’re all in anymore.

I can’t resist….

I’m GenX, so obviously disgruntled, but I work with a lot of GenY’s, and even some of the girls (I guess they are ladies now, technically, but I’m older) are talking about how printing money leads to no good. Where are they getting those opinions? The internet. It’s a game changer. Oh, I know some of you out there are boomers and many boomers are on the net, but you don’t read it the same as GenY. GenY knows it’s fraught with fraud and delusion, so they use a “Bullshit detection kit”, aka Carl Sagan, when they read it. Boomers tend to either read CNN.com or believe everything they come across is vetted like a public TV broadcast. My mom is on the net, so I know. She keeps sending the same chain mails and urban myths my generation dealt with 10 years ago (forever in internet time). Boomers should not be allowed on the internet without adolescent supervision. Emails from Bill Gates or a government official in Africa go to spam, unless you are friends in the real world with Bill Gates or an official in Africa. Figure it out boomers! Although I did get an unsolicited offer to coach a soccer club in China today for up to $14,000 US, a month, plus free flights and room and board that I am considering. Apparently the contact information for minor soccer is not so protected as they say. Would anybody fall for this? I don’t speak either Chinese language!

My ex brother in law (his sister’s decision, we are still polite when we occasionally meet) is a border GenX-GenY, probably Y, and also a captain with WestJet. (And he’s tall and fit, but no silver yet.) I do not have the heart to tell him. If you believe the peak oil story or even the expensive energy story, air travel will be one of the first things to go. It will be reserved for the rich. Sell now. If you are a young pilot consider what career #2 will look like and prepare.

As Warren Buffet pointed out, no industry has ever before destroyed so much capital over such a long period of time as the airline industry. And that was when fuel was cheap!

#25 Bill on 10.28.10 at 11:53 pm

1. Penultimate means second to last;

2. Non-residential property is ineligible for non arms length RRSP mortgages regardless of CMHC insurance. Must be arms length if property is commercial.

#26 BrianT on 10.28.10 at 11:56 pm

The USA is definitely swimming into the deep water at this point-Obama is like a drunk lifeguard fast asleep at his post http://www.zerohedge.com/article/paralyzed-fed-defers-decision-monetary-policy-primary-dealers

#27 warptweet on 10.28.10 at 11:58 pm

The Boomers are the most self centered generation the world has ever produced. Whatever they wanted they got. The politicians were too scared to say no to them. Trudeau started the borrowing spree with the first 40 billion deficit and the rest is history. It was the same in the USA and anywhere else that had a boomer cohort. You can bet they are going to bitch loudly for more pension money when it suits them. To hell with the kids who have to pay for them…. You can count on that!

#28 Northern_dirt on 10.28.10 at 11:59 pm

#9 RICHARD LICKER

50′s bungalow<—–

Only "McMansion" id ever want/need..
Back when houses were designed and built well.

#29 The InvestorsFriend (Shawn Allen) on 10.29.10 at 12:02 am

Well, who is going to be the first to post the usual drivel that a guy making $165k should have well over a million equity?

Quick we need someone who is that age but has zero equity to post santimoniously about how if only HE had that $165 k job he would’a handled his finances a whole lot better.

You know to each to his own, but I do kinda wonder where this guy spent his money over the years.

My bet is divorced due to getting caught with a flight attendant one too many times…

Maybe it was worth it though….

But bottom line he still has at least $400k equity and a nice income stream… and a job with benefits (so to speak) rock on…

#30 GenXer on 10.29.10 at 12:03 am

Well – you can probably guess my point of view…

From my vantage point, the boomers already tried creating a relief fund through the destruction of:

a. company pensions
b. low cost higher education
c. blue collar jobs through high union demands
d. the environment
e. lifetime careers
f. stay at home spouses

Given their power as a voting block, a cash grab is inevitable though. Maybe my kids have some coins left in their piggybanks they can donate.

#31 Cash For Gold Rates on 10.29.10 at 12:07 am

We are all mortal. Most of us think we will live forever.
Financial prudence is important but at what cost?
Who wants a 800K mansion at age 60 anyways!

Dump the house asap…… buy a decent smaller place and SPEND some of your profits. As a pilot you get free flights… take trips….enjoy yourself….

Life is too short to die rich.
=======
Sussan Frank

#32 ralph on 10.29.10 at 12:08 am

In the area where I live there certainly is no shortage of drugstores. Darryl Katz just opened up another shiny new Rexall store just across the street from another recently opened store. And just up the street is a big Shoppers Drugmart.

I guess that is the business to be in now. Better do all you can to stay healthy because health care costs are going to be going to through the roof.

Most ERs look like war zones with doctors treating patients in the waiting areas. People are going home without being treated because they are tired of waiting.

Which prompted the Alberta Government to pass the Alberta Health Care Act. Whatever that means. I could go on but you get the picture.

In Kelowna for example you could be days away from getting a bed while they shove you in some hallway.

Contrary to popular belief; most of these cases require serious treatment.

Better brush up on your first aid skills because you never know.

#33 Sam on 10.29.10 at 12:11 am

Boomer RELIEF?

Relief from what?

a 60 year orgy of spending and debt and more and better brand-spanking-new technology than the world has ever known, and the best health care the world has ever known and the best infrastructure and the best dental care and, yes, more sex and more varied sex than even Caligula’s court?

The boomers need relief? I’ll pass.

#34 Nostradamus Le Mad Vlad on 10.29.10 at 12:13 am

-
“. . . a duh moment.” — I’ve never experienced a duh moment. Iz it a trooly electrifyingly sexual high, or does it pass on through like a wet fart?

“TD Canada Trust must know all about this.” — Hmmm. If they know all about this and bought in new mortgagee-doo-doos about extending 125% of a HELOC or mortgage, maybe they are starting to see the end, because this kind of wanton spending sure ain’t gonna last much longer.

No system can support this, esp. with a declining mfg. and industrial economy. The banks will try to milk the cow dry until it has shrivelled up into the compost pile. Speaking of which — Big Banks on Brink?

“So what the hell have these people been doing? So, shed a tear for this poor, lost and misguided generation.” — Are you speaking of us pathetic, wretchedly greedy and stupid boomers? Yer jes’ about right on!

“BTW, I’m starting a Boomer Relief Fund. Are you in?” — For a yearly stipend of $75K, 85% or more of which is tax free, bowels of KFC Original Recipe Chicken, fries and gravy. I’ll ponder on it. Call me next week!
*
Goes with Garth’s latest post (headline by itself is pretty good.).

Easy to see why Soros and Obama are handing the reins over to China. Plus — Soros bankrolled Obama all the way. Now this.

We all know what happened to Poland’s govt. when they declared themselves free of the IMF. Recall the unexpected plane crash in Russia?

Making Progress as fast as possible. Tell me again: Who invented govts., and what is their purpose?

Baaahhhh! We’re as mad as mutton and we’re not going to bleat it anymore!

War But which one?

As BP slinks quietly into the sunset, ExxonMobil goes bananas. Oil may skyrocket sooner rather than later. Plus — BP and Halliburton deliberately went ahead with flawed equipment.

NAmerica has ‘Japan’ disease — deflation combined with soaring food prices.

#35 Jeff Smith on 10.29.10 at 12:16 am

>#11 T.O. Bubble Boy on 10.28.10 at 10:52 pm
>Boomer Relief Fund? For the guy who decided to buy a
>$825k McMansion in Mississauga as he moved towards
>retirement?
>no thanks.

I think Garth put that Relief Fund thingie as a joke, i.e. we are probably gonna bail out these people. Gasp!

#36 Sam on 10.29.10 at 12:18 am

Hey Garth – I posted this yesterday and I invite you to take a look

Not only are mortgages in spain fully recourse, apparently they cannot be discharged in bankruptcy.

And still RE prices fell fast & furiously.

http://www.nytimes.com/2010/10/28/world/europe/28spain.html?pagewanted=1&_r=1&ref=todayspaper

#37 Jane on 10.29.10 at 12:19 am

Great blog tonight, Garth. What the heck has Mr. Pilot and his boomer cohort been spending their money on? Apparently not on paying down debt. And now he thinks he should be doing something abbot this? Shesh, and he is one of the smart ones, flying planes and all.

#38 Foggy on 10.29.10 at 12:23 am

Regardless of Trevor having a depreciating house asset – with his salary and years of working, that thing should have easily been paid off by now, and a sizable nestegg accumulated. If the mortgage had been paid off, who cares what happens to the housing market? When you sell, whatever you buy to downsize will be cheaper as well. His main problem was not waking up around the age of 40 or so, and aggressively preparing financially for the future.

#39 DiGiacomo on 10.29.10 at 12:39 am

“BTW, I’m starting a Boomer Relief Fund. Are you in?”

aren’t we already all in as taxpayers?

#40 Gord In Vancouver on 10.29.10 at 12:45 am

BNN Calls Vancouver Real Estate Overpriced

http://watch.bnn.ca/#clip367380

#41 Alan on 10.29.10 at 12:57 am

As much as I hate to admit it, Garth this post is on the money. Still don’t buy into real estate falling off a cliff though. Having a home that’s mostly paid for by the time you’re close to retirement along with income from investments is the key.

#42 A Devil's Advocate on 10.29.10 at 1:01 am

Remember blog dawgs, it’s all really about me anyway!

#43 Bailing in BC on 10.29.10 at 1:01 am

#161 DaBull MarkAgeddon

“I read it as 60% have their equity under the mattress and are not making a single penny from it, while the smart 40% are using the equity in their home to make a nice fat 10% a year. Just like Garth recommends.”

So your take on it is that 100% of boomers in Alberta who havn’t paid off their mortgage, could but are too busy making 10% on their equity?

Well isn’t life just sunshine and lollipops!

#44 The Original Dave on 10.29.10 at 1:05 am

no relief funds for anyone. Early 30’s here. I’m making sacrfices that just about every single one of my peers won’t make – I’m renting. I’m getting completely abused and battered by the experts all around me. I’ll definitely be able to purchase a house for cheap if I wanted, but I may have to spend time in the psycho ward after hearing all these people preach real estate.

So glad the tide has shifted and it’s down from here. I love financial markets. The housing market is the slowest market I’ve ever come across. It’s almost comical. People don’t always see the trend because it moves so slowly.

If the stock market is a gazelle, then the real estate market is a turtle.

#45 AxeHead on 10.29.10 at 1:10 am

Personally, I find those big shiny things (I mean houses) actually quite boring and lonely (I used to own one). Give me an older bungalow with a big yard close to everything with a real wood burning fire place (like golden #9) anyday. They may not be all shiny and sparkly but they are proven.

#46 freedom_2008 on 10.29.10 at 1:22 am

Boomer Relief Fund? No, as no money can save them if they keep living the same way as they have been.

Boomer Relief Education? Yes, as they have to learn how to cut their spending, how to save and then how to invest, to survive.

I am a boomer, too, but luckily, I learned how to live a simple happy life much earlier …

#47 Cookie Monster on 10.29.10 at 1:37 am

I love this blog, I come here often just to look at the pictures and to get a laugh once in a while from arguments about how gold isn’t money.

The housing bubble is a real bubble due to years of credit expansion (FIAT currency) but it would be cool if there were a blog called The Greatest Fool talking about the coming collapse of the US dollar and the return to precious metals as money.

The housing bubble is only a symptom of a much bigger bubble yet to pop, the super giant FIAT bubble!

#48 Majority of Alberta boomers mortgage-free on 10.29.10 at 1:42 am

Majority of Alberta boomers mortgage-free

http://www.calgaryherald.com/business/Majority+Alberta+boomers+mortgage+free/3739956/story.html

#49 realpaul on 10.29.10 at 2:09 am

Still two teens at home at his age? WTF happened? One kid at UNI costs eighty grand with allowance and residence over five years…grand a month for rent and food plus tuition, car insurance and books…easy $16,000 a year. Times two….very expensive proposition.

#50 Oleksandr on 10.29.10 at 2:16 am

There can be the only excuse to have a mortgage after 40
if a person immigrated to Canada without a penny in his middle age.

Anyone, who born in Canada, and after 40 still has a mortgage –
I cannot find appropriate politically correct words to express my disgust.
In short, no sympathy to them
Especially taking into consideration the fact that
RE prices were so ridiculously low 10+ year ago, when
salaries have not been changed at all.
Before the bubble, a working family could save for just 5 years to buy a freehold without any mortgage at all…

#51 Devore on 10.29.10 at 2:38 am

Well, Trev is a Boomer. Like many of the nine million in his cohort, he’s now in his peak income-earning years. He’s also fairly screwed, despite being a workplace deity. He may have net worth of more than $400,000 and a mediocre pension but three-quarters of that wealth is illusionary, sitting in a 4,000-square-foot palace nobody wants to buy.

Makes you wonder how someone who’s been earning 6 figures (in 2010 dollars at least) most of his working life has only managed to accumulate $400k of assets by retirement years, most of it sitting in house equity. I mean, what do you manage to spend $120k+ a year on, every year?

#52 Yank on 10.29.10 at 2:50 am

We had a Olds Delta 88. Loved that car – although all of our friends laughed at us and the gas was pretty expensive.

#53 KDS on 10.29.10 at 3:09 am

As a thirty-something who has yet to buy a home, I couldn’t care less if a bunch of suburban mansions are soon be coming onto the market at fire sale prices. What I care about are the sensibly-sized, centrally-located houses and condos that are going to be gobbled up by all those goddam ‘right-sizing’ boomers, making them unavailable/unaffordable for young families just getting started. Once again, the boomers manage to screw over the next generation.

#54 State of Mind on 10.29.10 at 3:38 am

I’m a GenX, not a boomer, but I think I can see how the boomer’s saw the world. They were born in the “best of times” just after WWII, saw innovation, invention, growth and the biggest boom run ever and they are 101% not prepared for what is happening today. GenX’s wanted what the boomer’s had but didn’t get the opportunities, the GenY’s are lost in a quagmire as well.

It is NEVER too late to start saving and stop spending. Treat a $1 like $2, do you really need X item?

If I only had 5 years to retire at the height of my earnings and had no/little nest egg, you bet I’d be cutting back on everything possible and saving the MAX I could.

“Right sizing” life and spending is more like it.

#55 pablo on 10.29.10 at 3:59 am

BTW, I’m starting a Boomer Relief Fund. Are you in?-garth.
You love to stir the pot.

#56 McSteve on 10.29.10 at 4:50 am

Sounds like my Dad. A retired sole proprietor with a house, a cottage, a vacation home in Eastern Canada, boats and toys and no pension. He sees RRSPs as a way for the government to “screw you”. In her twilight working years, my step-mother passed on contributing to a company pension in her new job because “its just a way for the company to screw you”.

There’s a space under my basement stairs where I will have to put a cot for them someday. They’ll have to move the Christmas decorations and my hockey equipment first, though…

#57 jman on 10.29.10 at 5:46 am

I have not seen any evidence that the younger generation is any different. People who have a workplace pension or could have one either don’t participate, don’t want one or just don’t care. It isn’t until they hit their late 40’s or 50’s that they think perhaps they should start saving. They regret their earlier apathy, blame others and realize it’s probably too late for them. The cycle is perpetual. It is the unusual person who learns early to clear the debt quickly, forget the Jones’, lie within their means and save for the future so that their waning years can indeed be golden.

#58 jman on 10.29.10 at 5:49 am

Ops, that should have read “live within their means”!

#59 Brian1 on 10.29.10 at 6:07 am

As property values plummet so will property taxes. There is nothing to really worry about and I know for a fact that you will all agree because the boomers have the votes. Of course there is no need to lower taxes on condos because they are mostly recent immigrants who willingly signed on for a life of slavery to serve the boomers and elderly of this country. It is a magnificent plan and I will enjoy the easy life in my Muskoka cottage and not be bothered by all the city riffraff. Please Mr minority, stay out of my Muskoka. This is a gentle warning. Next time it will be rubber bullets and tear gas.

#60 Buyright on 10.29.10 at 6:17 am

Boomer Relief Fund
Are you looking for Donations or starting a Fund for Boomers to invest in ?
If the latter i’m in and hopefuly this will end well
:)

#61 Buyright on 10.29.10 at 6:36 am

I hope this guy is wrong, what do you think ?

http://gonzalolira.blogspot.com/2010/10/signs-hyperinflation-is-arriving.html?source=patrick.net#navbar-iframe

Gonzalo Lira? Huh? The only hyper-inflation is his name. — Garth

#62 goldenfox on 10.29.10 at 6:43 am

Must read on US housing:

http://www.safehaven.com/article/18723/your-savings-will-be-funding-foreclosuregate

#63 Darryl on 10.29.10 at 7:00 am

Boomer Relief fund eh?

Is that to buy supplies of Geritol, Exlax and Viagra?
:)

#64 Franco on 10.29.10 at 7:10 am

Garth if the statistics are correct then the law of supply and demand should produce the following….

Smaller 2 or 3 bedroom homes in nice neighbourhoods with reasonable property tax and maintenance costs in hot demand which should support prices or put upward pressure on them.
Or maybe condo’s?

McMansions on sale at lower prices and only to be afforded by the next wave of double income 1/2 kid households.

This should point to the fact that those waiting for US style deals may not find them in the lower segment of the market. Unless we overbuilt as badly as they did in the US.

Canadians won’t be throwing the keys at the bank like they are in the US because of they are responsible for the difference which should soften the downward slide somewhat.

I guess we must be aware of each catagory of property and that they can not all be treated the same. I remember 1989 to 1994 crash $700,000 McMansions on sale for $350,000. A $130,000 3 bedroom townhome on sale for $130,000. Some catagories will get hit harder than others.

The Moral of your story of the pilot…. Young people getting your first job. 25 years can sneak up on you before you know it and you will be unprepared….
Sit down and plan properly. There is a time to borrown and then a time to pay it off, rolling it over is not an option. Remember debt is a 4 letter word.

For some these are the best of times and for others these are the worst of times.

Keep up your level headed emotions left at the door approach to this topic. Many need to read your words…

#65 Darryl on 10.29.10 at 7:24 am

#56 McSteve on 10.29.10 at 4:50 am

Did you partake in your dads toys? Did you vacation in your dads homes. Did you live under your dads stairs?

#66 unbalanced on 10.29.10 at 7:32 am

# 22 AndrewS

Quit your harping about boomers. Do something. Stop whining. I did.

#67 mooncake on 10.29.10 at 7:39 am

Garth nailed it right on – “Mostly, let this be a lesson to everybody. Houses are shelter. They are not retirement plans. They’re not financial strategies. They can turn into wealth traps.”
I’ve been warning my friends this and they think I’m crazy. For every reason they state housing is good I give then 5 reasons why prices will severely decline the next 5-10 years. Also, once cheap energy ends and peak oil really picks up, Watch out.

#68 bigrider on 10.29.10 at 7:49 am

Garth -I hear what you are saying about boomers and their macmansions being leveraged and no other savings.I’m also sure this to be true for some.

Let me tell you that there are an equal amount that have there homes paid off with very substantial savings in excess of the value of there homes, invested in a myriad of ,albeit ,inefficient investments.

The european mentality (Italian) of saving every penny as if it is war time is alive and well in my neck of the GTA suburbia.

My parents in there late sixties are surrounded by there friends who are all boasting net worths well into the millions, one more than the other, and driving cars(like my father) well over 10 years old, some 20 ,I’m not kidding. Cheap and tight to a fault these people will clip every coupon they can find as they withdraw 30 bucks from their bank account sporting a million or so on deposit, for the weekly meat purchase.
It’s not all doom as this blog seems to proport. Some are more well off then anyone on here can imagine.

As for the ones that are not..their fault and no one else.

Please show any evidence there are “equal numbers” of people with no mortgage and substantial savings. – Garth

#69 Prof ANON on 10.29.10 at 7:52 am

Look folks, there is no price adjustment/crash coming. Get over it. Don’t you know that over 56% of homeowners in Sebring, Florida own their own homes.

http://www.homesoverseas.co.uk/news/Many_Americans_live_mortgage_free_/7003-1002

Oh wait….ummm…that doesn’t make any sense…

#70 Carruthers on 10.29.10 at 7:52 am

#10 Debtisforever: “Here’s an obvious question: How can these Boomers not have paid off their mortgages when houses were like $150k, $200k and they had decent jobs? What happened? Oh…they decided to “upgrade”-buy the bigger house, with the bigger mortgage because ‘”real estate always goes up”

Yes. Great question Debtisforever. Not to mention destroying millions of hectares of the most valuable farm land on the planet in their lust for chipboard and vinyl clad lawyer foyers at ever greater distances from where they work.

Sad yes. For the rest of us…and pathetic.

#71 Renting in Milton on 10.29.10 at 7:58 am

Growing up in the Kawarthas kept me sheltered from the whole mentality that we see in the GTA. I was under the impression that life was simple and houses were affordable for an average salary where Mom stayed home with us for the first precious years of our lives. My parents were very frugal and we enjoyed the simple things in life like swimming in the lake and skating on it in the winter. Now that my Parents are boomers and my brother and I are in our early 30’s, we can see how much of an impact that my parent’s lifestyle has had. They live in Peterborough where housing is still affordable, but really only on my GTA salery. They vacation a couple times a year. House paid off for a while now with every spec of their house renovated. The sad thing is, my poor parents had to bail my brother and I out of debt each in the last 5 years and the only way I could possibly ever retire comfortably is if I inherit their hard work. No one wants to count on that but sadly that is the scene for people my age with zero workplace pension and cost of living through the roof. No way my boyfriend and I could buy a place, contribute to RSP and have a nice emergency fund. Very scary. I’m scared for those my age who’s boomer parents are going to need their children to move back into the basement so that they can live out the rest of their days in that McMansion.

#72 Carruthers on 10.29.10 at 7:58 am

#13 T.O. Bubble Boy: T.O. I knew that article would be written by Jay Brian just by reading the headline. This guy is the biggest shill. He refused to acknowledge that anything was wrong with the financial system before the crash in 2008. After getting bludgeoned by the reality of that he then retuned his propaganda to an “it won’t be bad here in Canada” schtick. This guy is a joke. If you are a contrarian in any way just read his columns and plan for the opposite.

#73 lonely limey on 10.29.10 at 8:01 am

realpaul #49

“……One kid at UNI costs eighty grand with allowance and residence over five years…grand a month for rent and food plus tuition, car insurance and books…easy $16,000 a year…………….”

Are you mad? Let the little buggers pay for their own further education and partying palace.

#74 Canucklhead on 10.29.10 at 8:15 am

Hey Garth, did you see that clown from REIN on BNN yesterday? Pumping real estate, saying it won’t fall and even the banks are wrong with their -7% to -13% predictions, then he trashed the economist magazine because of their -23.9% prediction. Who does this guy think he is? He runs a glorified infomercial or a company? …please

#75 Just a Tech on 10.29.10 at 8:19 am

-#46 cookie monster and other gold nuts,

“a commodity which is itself continually varying in it’s own value, can never be an accurate measure of the value of other commodites”

-Adam Smith, wealth of nations

#76 Ben on 10.29.10 at 8:26 am

#59 Brian: property taxes aren’t going down anytime soon. Sure, property values might go down, but tax rates will have to go up to keep the city’s revenues creeping up.

#77 Sail1 on 10.29.10 at 8:26 am

#56 McSteve

They’ll have to move the Christmas decorations and my hockey equipment first, though…

I guess your parents should have stuck you in the basement while you were growing up. Maybe, when there not here anymore, they can leave what they have left to charity. You must be in your 30’s.

#78 PKS on 10.29.10 at 8:30 am

Ha, boomer relief fund?

Those same boomers who like Garth says went to University for $500/year and then once they were grown ups with houses and out of school they voted for politicans who raised _my_ tuition to $7K/year by 2001?

Those boomers? Are those the ones you’re suggesting need help? Speaking as a 34 year old, let me say fuck em.

As Rick Mercer once said, “Where would Canadians born after 1965 be without the baby boomers? Well, for starters, they might have a job that doesn’t involve a tip jar and an apron.”

And as Douglas Coupland said of your average baby boomer, they wouldn’t have lasted 10 minutes had they been born when I was born.

So now that their voting habits have shifted further and further right of center, they can enjoy a political climate where it’s highly unlikely that any form of social spending will ever be increased.

Me, I intend to have the same level of sympathy for baby boomers and their coming financial problems that their generation showed for my generation’s staggering student loan debts. Which is basically none.

With that attitude you deserve an apron. — Garth

#79 allister on 10.29.10 at 8:33 am

So the youngsters want to know where the pilots’ 165K went. Since Im 56 I can tell you.

Firstly he never made 165 for the whole 35 years. He probably started at 20K 35 years ago – sheesh can’t even buy a car for that now.

He lived through 22% mortgages and double digit mortgages until 10 years ago, and double digit inflation from 1973 until 1985. He is paying mega bucks for the kids education and demands, food, taxes, transportation etc. Oh yeah, and what do you think his income taxes are off that paycheque? My parents never had it easy, I didn’t have it easy, and you geners won’t either. Thats life.

Boomers were not handed a silver plate – that whole thing is a popular misconception and just talk from people who are too young to know what happened.

#80 Got A Watch on 10.29.10 at 8:59 am

Ahhh so much angst and hate on for the Boomers. Always good for a laugh.

Poor poor me cry the whiny X, Y & Zs. Awwww, have some cheese with your whine.

I hope your parents are reading this. They would no doubt reconsider their decision to have you, as it was clearly a huge mistake. I hope they spend every dime they have and then some, before they die, and then leave you all their debts in their will. That’s what you deserve for being so whiny.

Sure sounds like feeble excuse making to me: “I’d be awesome, rich and successful, but those damn Boomers have just screwed my whole life”.

It was my misfortune to have to work with many X, Y and Zers in my time, and in general I found them lazy, incompetent, whiny, uneducated (after “graduating” too), ignorant and full of themselves. But oh so sure they deserved huge pay, rapid promotion and workplace glory, just for showing up once in a while – their attendance was generally poor, a lot of “sick” days, cough. Sky high expectations, but unable to deliver the goods when it came to actually doing the work.

Stuff your infantile moaning. Put down the XBOX controller, get up off the couch in your parents basement, stop spending all day texting and Facebooking. I know, I know, life is soooo harsh. Then you die.

btw I am Gen X. If you were my kids, I’d disinherit you and leave every dime to charity. A far better use for the money than wasting it on you.

Today’s Quote of the Day seems highly appropriate here, from Big Picture Blog:

“In contrast to astrology, one must accept the fact that success is not due to a fortuitous concourse of stars at our birth, but due to a steady trail of sparks from the grindstones of hard work, determination, good planning, and perseverance. When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened.” -Hossein Arsham “

#81 somejerk on 10.29.10 at 9:02 am

#18 604genX – probably some of the binge’n was on you… always think of dharma and not wish to much on the soon to be blue hairs, it may come back to haunt you… they can still out vote anyone…

#80 allister thanks for some insight… I ‘m still sure those high mortgage rates and inflation were a result of binge ‘n- 20K 35 years ago could easily buy a 3500$ car (new) i can remember…

Still can’t believe my boomer cousin blew up the 400$ used Datsun 510 (my dad sold to him) because he was binge’n too much and forgot to do an oil change… what a steal for 400$ if I could have got a paper route (too young) I would have bought it myself…

#82 Willy H on 10.29.10 at 9:07 am

It means millions of wrinkly old snorts facing imminent retirement have no choice but to cut and run. They cannot quit work* with fat mortgage debt …. they have no pensions ….
_ _ _ _ _ _
*Many Boomers will simply strap on their depends each morning, head off to work for years longer than expected. I am witnessing this all around me. The younger generations will be held back from higher paying jobs further exacerbating our collective economic woes. This pilot is in the worst possible scenario – he likely faces mandatory retirement at some point!

This is what happens when you combine an RE Double Down with a Demographic Big Slurpee, a Boomer Happy Meal!

#83 bigrider on 10.29.10 at 9:08 am

Garth said- “show me their are equal numbers pf people with no mortgage and substantial savings.”

I should not have said “equal” , I apologize for that gaff..I do not know what the ratios are and I would suspect that the norm is that the larger majority are in the shape you speak of Garth.

I was just trying to make some people on this site aware that it is not all a ‘mess’ in the burbs. There are some out here in some of the older neighborhoods in Thornhill, Richmond hill for instance with a whole lot of net worth and a strong , deeply imbedded sense of frugality.

I also don’t buy into the whole upcoming rush for homes in the city core. People will live where people want to live. Some will choose the burbs over the chaotic noise of the city proper. Young families will continue to choose the burbs as a cheaper alternative to the city just as they always have.

#84 Carruthers on 10.29.10 at 9:30 am

#76 Just a Tech: re: gold – “a commodity which is itself continually varying in it’s own value, can never be an accurate measure of the value of other commodites”

You mean like the changing value of a US dollar against the relative prices of other fiat currencies right? One could easily make the arguement that gold’s value is constant and the purchase price of gold only rises and falls based on the “continually varying” value of the fiat currency you are purchasing it in. And it you are going to argue that gold’s price is based on supply and demand…I could say the same thing about the value of currency.

One has to be careful when quoting Adam Smith dude.

#85 Ted on 10.29.10 at 9:32 am

It’ll be good to see the boomers crushed! No doubt the economy will take their attention away from their stupid, guilty “sustainability” routine.

#86 rory on 10.29.10 at 9:32 am

#7 Kitchener1
Dude, you really need to send your post to your parents …show them the love.

#58 jman …well said. No anger just the truth. Entitlement is a bitch.

#67 unbalanced you said:
“Quit your harping about boomers. Do something. Stop whining. I did.”

A gener that gets it.

#80 allister you said:
“Boomers were not handed a silver plate – that whole thing is a popular misconception and just talk from people who are too young to know what happened.”

You forgot to add ‘and too stupid’… to the geners that ‘get it’, and there are plenty, this was not intended for you.

#87 unbalanced on 10.29.10 at 9:33 am

#80 allister, PERFECTLY said. I’m 54. Totally agree with you.

You’re a scholar and a gentlemen, not many of us left you know.

#88 dark sad person on 10.29.10 at 9:34 am

#154 Behavioral Finance on 10.28.10 at 7:52 pm
dark sad person,

Say what you will but creating the Fed was a very smart decision as it propelled the US economy that much quicker into the 20th century. The Fed has other roles that it plays besides setting interest rates and printing money on behalf of Congress.

I just love how today’s society cannot face natural business cycles. There were always recessions (depressions) and times of prosperity regardless of the type of medium of exchange used.

*********************************

You have to be joking-

If you call Devaluing the dollar by 95% by Inflating the money/credit supply and engaging in 2 World Wars and likely another one brewing and with two massive deflation’s and a third one under way-A Depression and the second one unfolding and a littered trail of popped credit driven bubbles “propelling” the US economy into the 20th Century “smart” then you must be a Banker–

The Fed can only blow bubbles-but that’s all they can do-by manipulating interest rates and encouraging speculative spending-but-when bubbles pop-they can’t do a damn thing to stop it–like we see now-how useless their monetary policies are–

Have to ask–why can they not halt this unwind-like they’re trying to do-if they’re so all powerful and wonderful?

http://en.wikipedia.org/wiki/File:Cpi-2010.svg

********************

Have a look at this Fed CPI data-that dates back to 1800 to present day-“look” at how stable prices were under Gold Standard and compare to 1913 on-
This BS that Gold hindered economic advancement-is just that-BS-

http://www.minneapolisfed.org/community_education/teacher/calc/hist1800.cfm

Natural business cycles?
You call a Hyper-inflationary blowoff of credit natural???

#89 GBoomer on 10.29.10 at 9:39 am

The thing about the boomer stereotype is that, like all stereotypes, there is a large kernel of truth to it. Yes, the boomers lived in times of economic growth and yes many of that generation spent every dollar they made and more. And yes, they benefitted from opportunities in relatively affordable education and (for many of us) defined benefit pension plans. But, it has not been all sunshine and roses.

If Boomers hung on to all the high paying jobs, then it is equally true that they paid their share of the taxes that governments spent on expansion and infrastructure. If Boomers couldn’t save for retirement, it may have been because they were paying down their mortgages and raising incredibly expensive Gen x’ers and Y’ers who mostly seem to think that when they strike out on their own that they can immediately have what their parents spent 20-30 years working for (the big house, the Beemers, the boats and RVs, the trips to Mexico, Hawaii and Vegas). If anything, the Gen X’ers and Y’ers (again, stereotypically) have absolute zero sense of delayed gratification that their parents, the Boomers, did. They want it and they want it NOW. And yes, boomer parents actually created this, much to our bewilderment.

Those of us who have lived modestly still scratch their heads about why the investments in RRSP’s have never achieved the miracle of compound interest that we were assured would happen. Ten and twenty years ago, there was no Garth advising us how to invest, and the financial planning industry was not nearly as competitive and helpful as it is today. The internet was not yet populated with instant information about all things economic and there were no real tools for planning. Like the generations before us, boomers bought into the middle class ideal that home, family and job were the central function of citizenship. In this there were no ulterior motives to screw over subsequent generations. If anything, many of us despair of what is in store for our own children as they struggle in a hyper-competitive society where civility is gone and everyone is looking for someone to blame for their own misfortune.

So, to the 20 and 30 somethings who display bitter hatred towards the boomers, I ask, “What would you have done?” And the answer, if you are honest, would be “I went to school to get an education to get a job to buy the things I needed to help support my family. I did the best I could at the time.”

Finally, hatred of the boomers says more about the haters than it does about the boomers, stereotypes notwithstanding.

#90 Tripp on 10.29.10 at 9:53 am

#80 allister

“So the youngsters want to know where the pilots’ 165K went. Since Im 56 I can tell you.”

Allister, I am not sure you have a valid point. Most of the Canadians can’t even dream of having one 165k income earner in the family, however they still provided education, food and shelter for their kids, payed taxes etc. Please check:

http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=75-202-XIE&lang=eng#formatdisp

I assume most of the expenses were directed towards the home. Primarily the mortgage, plus property taxes, heating, cooling, cleaning, repairs and maintenance.

#91 Ottawa S. on 10.29.10 at 9:54 am

#21 squidly77 on 10.28.10 at 11:37 pm

No dress up as a forty something realtor, much, much scarier.

Even worse is a 20 or 30-something realtor that has never seen a crash.

#92 Guan-Di on 10.29.10 at 10:02 am

I love these inter-generational hate fests… apparently some people just weren’t hugged enough as kids. I am GenX, and I’m trying to find a reason why I should resent the boomers? Hind sight is 20/20 folks, so don’t judge history and those that made it, learn from it. Did the Boomers screw some things up, oh baby did they ever! Are they the first generation ever to screw things up for the next generation, not so much! How will the actions of our generation screw over our kids? We don’t know yet (though I’m thinking a lifetime of house poverty will top the list), but we sure as hell will be calling them a bunch of ingrateful little bastards when they tell us all about it in 20 years or so while paying for their damn therapy! If you are GenX, stop blamming everyone else for your situation and go out and do something about it! How many of you moaning about huge student debt have thought about starting RESPs for their kids? Learn from the Boomers, many of them lived well outside their means their whole lives on easy credit saving nothing (I know plenty). Pity their folly, but for chrissake LEARN from it!!

#93 C on 10.29.10 at 10:28 am

#7 Kitchener1

“Bottom line is that no generation to date has ever had it as good for as long as the boomers”.

I am a guy in his mid 30’s as well, and I couldn’t agree more. Talk about opportunity on a silver platter!!

The “wounded dinosaurs” as I like to call the McMansions for sale along Lakeshore Road in Burlington and Oakville are just sitting month over month. They are also growing like a fungus.

I drive by them all the time. Many have been sitting for 6-12 months minimum. I call them wounded dinosaurs because those McMansions are old, huge, and slipping out of favour. The McMansion won’t be able to cope with the pressing economic times that are clamping down on the middle class evermore each day.

Just look at the property taxes on these wounded dinosaurs. For a $1M property, what is it like, $10K-$20K per year in property tax? Are you for real?

I think Garth’s projection of the Boomers increasingly trying to dump these dinosaurs on the market is spot on.

On another note, I’m looking forward to seeing the October ’10 sales numbers. I imagine sales will be way down, prices will be up a bit yr/yr and over September ‘ 10?

#94 dark sad person on 10.29.10 at 10:36 am

#76 Just a Tech on 10.29.10 at 8:19 am

-#46 cookie monster and other gold nuts,

“a commodity which is itself continually varying in it’s own value, can never be an accurate measure of the value of other commodites”

-Adam Smith, wealth of nations

******************

“Someone” said this–so it has to be–

Gold is the easiest most measurable form of “Money” that’s ever been-
You see–Gold does not float-
Gold just sits there and “everything” revolves around it-
I mean–how can it do anything?
It’s just a piece of shiny rock right?

http://www.trustedbullion.com/images/stories/SAABSTORY04-20-10/DOW-JONES-GOLD.png

http://www.trustedbullion.com/images/stories/SAABSTORY04-20-10/S-P-GOLD.png

http://www.trustedbullion.com/images/stories/SAABSTORY04-20-10/NEW-HOME-SALES-GOLD.png

http://www.trustedbullion.com/images/stories/SAABSTORY04-20-10/FOOD-GOLD.png

http://www.trustedbullion.com/images/stories/SAABSTORY04-20-10/CAR-GOLD.png

**********************

hey boomers-
let’s keep in mind “why” we blew it–
who woulda past that up?
i mean-the 60’s to me-were like–
the circus came to town and stopped-right in front of my house-

http://www.youtube.com/watch?v=530Hqoamf3Q

This is not a site for pumping gold. I’m not telling you again. — Garth

#95 BrianT on 10.29.10 at 10:40 am

#15Tic-your comment reminds me of the couple who had fallen on hard times-the stay at home wife says I will go out and make some money to help out-at the end of the day she comes home and puts $61 on the table. Her husband says: “How did you earn that? She says-“I earned it selling the only thing I had-my body”-Her husband says: “What cheap bastard gave you a dollar?” She says : They ALL gave me a dollar!”

#96 KS on 10.29.10 at 10:45 am

@#44

I’ll be right there with you. I can’t even talk to some of my friends (all in their early 30’s) about real-estate because I’m completely crazy in their eyes. Renting with a room mate and shovelling money into the market is the way I’m gonna do it.

#97 boomers may need to bail out X and Y on 10.29.10 at 10:51 am

Wow there’s so much bickering between the generations. Very sad. I am a boomer and I don’t have a mortgage; but I also don’t have a house….way too expensive and not enough working years left to sign on for 35 years of debt.

Garth says your a fool if your house isn’t paid for by the time you’re in your forties? Wow, what does that make me?

Who are these 30 year olds buying the $700-$800K downtown houses anyway? What is that all about?

I think there will be a lot of mortgage defaults in the next five or ten years (strategic and otherwise) and anyone who’s working will be footing the bill.

And yeah if I’m lucky I’ll still be alive and working and I can bail out your bankrupt butts :)

#98 april on 10.29.10 at 10:52 am

#58 JMAN
Right on Jman. Their no different.

#99 dark sad person on 10.29.10 at 10:55 am

This is not a site for pumping gold. I’m not telling you again. — Garth

**********************

How do you call that pumping Gold?

Those charts are measurements only–

I have “never” pumped Gold-

If you’re going to control this site with slanted views-that only weigh favorably to what you think-
Then to hell with it–

Views here are hardly slanted. Free speech reigns. But dumping charts from a gold-pumping site when it is wildly off topic must be done to serve a personal agenda. Tell us what it is. — Garth

#100 Sam on 10.29.10 at 10:59 am

#90 GBoomer on 10.29.10 at 9:39 am

The thing about the boomer stereotype is that, like all stereotypes … hatred of the boomers says more about the haters than it does about the boomers, stereotypes notwithstanding.
_______________
Is someone confusing a well deserved ribbing with hatred?

Yes I’m looking at youuuuu you’re so cuuuute when you think people hate you.

#101 DaBull on 10.29.10 at 11:04 am

#43 Bailing in BC

So your take on it is that 100% of boomers in Alberta who havn’t paid off their mortgage, could but are too busy making 10% on their equity?

Well isn’t life just sunshine and lollipops!

Yes…. but it’s not 100%, it’s only the smart 40% that are making 10% returns. The other 60% are making nothing. Al they have is just have a paid off mortgage and equity collecting dust.

Ever wonder why 65% of current mortgage holders renew at what ever rate the lender offers, they never bother negotiating a lower rate. This stat alone more or less proves that most people are financial illiterates.

You by chance wouldn’t be one of them would you? nudge, nudge, wink, wink!!…. By reading your past posts, me thinks you are.

#102 Herb on 10.29.10 at 11:05 am

#90 GBoomer,

well said. Bravo!

Oh, I was born in 1940, a good year, as BrianT pointed out at #20. From that perch, it seems to me that the current generation has grown up expecting/demanding their families to adapt to them, while past generations adapted to the families they were born into. If the boomers went astray, they were led.

It’s all right to reject the values of your seniors, but there must be a re-evaluation to establish new ones everyone can live with. Life marches on, and simple rejection wont take you far.

#103 Sam on 10.29.10 at 11:06 am

#65 Franco on 10.29.10 at 7:10 am

Canadians won’t be throwing the keys at the bank like they are in the US because of they are responsible for the difference which should soften the downward slide somewhat.
______________________
Here’s what happens when EVEN A BANKRUPTCY DOESN’T DISCHARGE A MORTGAGE.

http://www.nytimes.com/2010/10/28/world/europe/28spain.html?pagewanted=1&_r=1&ref=todayspaper

> Canadians won’t be throwing the keys at the bank like they are in
> the US because of they are responsible for the difference which
> should soften the downward slide somewhat.

Keep dreaming.

The technicolor must be nice, or is it LSD?

#104 Sam on 10.29.10 at 11:10 am

#50 realpaul on 10.29.10 at 2:09 am

Still two teens at home at his age? WTF happened? One kid at UNI costs eighty grand with allowance and residence over five years…grand a month for rent and food plus tuition, car insurance and books…easy $16,000 a year. Times two….very expensive proposition.
____________________
Rent an apartment near school (not 2 hours on bus & subway EACH WAY like I had to do) AND THEY NEED A CAR?

& the parents are paying for the car?

WTH are the parents smoking? ?????? ????????????

#105 eaglebay on 10.29.10 at 11:11 am

BOOMER RELIEF FUND APPLICATION

Amount Required: $4,000.00 per month.
Use of Funds: To supplement CPP and OAS.
Lifestyle: Boating, fishing and drinking.
Permanent Address: Renting
Location: West Coast
Assets: $240,000.00 in RRSP for
emergencies only.
Method of Payment: Direct deposit.

Note: To help your generations (X, Y, whatever) I will be voting Liberal and support socialism, which is the way you’re going anyway.

Thanks for your consideration

#106 Sam on 10.29.10 at 11:17 am

#65 Franco on 10.29.10 at 7:10 am

Canadians won’t be throwing the keys at the bank like they are in the US because of they are responsible for the difference which should soften the downward slide somewhat.
________
Forgot to mention: mortgages in the 2 worst hit states, Florida and Nevada, are full recourse (Nevada was during the worst of the RE price drops, FL still is)

http://www.google.com/search?client=ubuntu&channel=fs&q=florida+mortgages+%22full+recourse%22&ie=utf-8&oe=utf-8

http://www.google.com/search?client=ubuntu&channel=fs&q=nevada+mortgages+%22full+recourse%22&ie=utf-8&oe=utf-8

Helped them a lot didn’t it?

#107 dark sad person on 10.29.10 at 11:20 am

Views here are hardly slanted. Free speech reigns. But dumping charts from a gold-pumping site when it is wildly off topic must be done to serve a personal agenda. Tell us what it is. — Garth

*****************************

Those charts are not from a Goldbug site-
They are based on factual data-
All you need to do is “look at the price comparisons for proof–
I was only showing that poster i replied to-that his/her quote of Adam Smith-was and is–false-
Gold sits in the vaults of Central Banks all around the World-no different than Dollar or EUR and any Currency reserves-
So-would you not say that Gold is as much a function of Monetary supply as is any currency?
Do Central Banks hold Oil or Wheat in their vaults?

You allow people to discredit Gold-but as soon as someone points out they’re mistaken-down comes the hammer-
Do we want people to learn the truth here-or not?
If I’m wrong–prove it-

I could care less if anyone buys or sells Gold-

The truth is that gold is a highly volatile commodity with the potential to hurt a lot of novice, unsuspecting investors who swallow the ravings of gold fanatics. It is being driven by retail investing, and wholly unsuitable for people without a balanced investing profile or, worse, knowledge. Your charts have as much to do with the decline of the US dollar as appreciation of the metal. It is in that context my comments were made. This site sells nothing. It is about education. Pumpers are dumped. — Garth

#108 Dan in Victoria on 10.29.10 at 11:25 am

Lets see now. 57 years old 2 teenagers at home, big mortgage etc.
Sounds like maybe an expensive go around the first time?
It looks to me that Garth has laid out a story here for the younger crowd of what not to do.
And for the younger boomers also.
There is a lesson in those words. Learn from it.
But no, its easier to have a tantrum about how easy the boomers have had it, how we have done every conceviable thing wrong just to screw over the younger generation.
Sit back and read what he has said. Use your critical thinking skills if you have any.
The smart ones will learn to adapt to whats going on around them.
Same as the smart boomers did.
Do you young ones think that all the boomers are wealthy and have it made.
Do we all fart in silk so to speak?

There is oppurtunity out there, The smart ones will kick your whining asses every time.
People……..soooo predictable.

#109 Joe Q. on 10.29.10 at 11:25 am

The results of this survey contradict the mindless notion that there will be a home-equity-fuelled “transfer of wealth” from Boomers to their adult children when the Boomer generation downsizes.

Looks like there isn’t as much home-equity wealth as we thought there was, and of what there is, a lot will be needed just to pay the bills.

#110 noplused on 10.29.10 at 11:29 am

Not on Bloomberg!

http://www.bloomberg.com/news/2010-10-29/gold-will-outlive-dollar-once-slaughter-comes-commentary-by-john-hathaway.html

Oh well at least they had the good sense to bury it deep in the archives almost the minute they published it. I wonder if they have a new “secondary market”.

Hathaway runs Tocqueville Asset, a company specializing in gold funds. There is a vested interest in the article worth underscoring. — Garth

#111 realpaul on 10.29.10 at 11:30 am

Boomergeddon…its real…..look at the numbers of seniors at the food banks…..the traditional inheritance of Mom and Dads estate is a thing of the past. When Flaherty killed the trusts and killed intrest rates he also killed the savings of millions of seniors who are now cannibilizing their last few dollars by eating the increasingly expensive that should have gone into juniors pocket.

http://dollarcollapse.com/uncategorized/book-review-boomergeddon/

#112 realpaul on 10.29.10 at 11:37 am

#74 Lonely Limey……its no wonder you’re alone friend. Look at the costs vervus the job opportunities for young people with a full course load. It all equals to a massive student loan debt with intrest compounding at the end of the experiance……no way to start a life.

I appreciate your sentiments…but what I said was the bottom line cost is just the way it is these days…rent at residence is actually cheaper than off campus due to the escalting real estate values. $16,000 a year is actually conservative.

#113 BrianT on 10.29.10 at 11:39 am

#84Big-enough already-we get it-your parents are rich and they are going to leave every penny to their good little boy-congrats.

#114 Expat Canuck on 10.29.10 at 11:44 am

29 y/o BC native… the misses & I have chase my career to 4 different countries in the last 3 years (oil & gas)…Cairo is home for the moment.

It seems many young people use this blog to vent their frustrations…a fierce but ineffective attempt to justify their particular predicament. We are comparing apples & oranges people. The game has changed…adapt.

Stay flexible, stay hungry…your job security is what you know upstairs, and you’ll likely change employers many times throughout your career. The relationship with your employer should extend to this: you worked hard and got a pay cheque…period. Anything else is a hangover from the old days.

PS Garth says a housing crash in Vancouver? Not likely, too may guys like me will show up & spoil the party for the local vultures in waiting.

Good luck all.

#115 dark sad person on 10.29.10 at 11:45 am

Your charts have as much to do with the decline of the US dollar as appreciation of the metal. It is in that context my comments were made. This site sells nothing. It is about education.

*****************
That’s bullshit-
Those charts weigh Gold against specific Commodities-based on a per/ounce/per price basis-
Nothing more-

eg: When Gold was $1000/oz and Oil was $100/bbl
You could buy 10 bbls of Oil for 10 oz. of Gold-
Today Oil is $80/bbl and Gold is $1300/oz-
Today you can buy 16 bbls of Oil for 10 oz. of Gold-
Which proves “at this point in time” that commodity prices are deflating-when measured against Gold–
What’s the big deal about that?

#116 BrianT on 10.29.10 at 11:49 am

#108Garth-let’s be honest with the novice investors here-there are not a lot of viable hedges (which are quite necessary) against currency devaluation. Other than gold and silver, what exactly are you recommending? It is not prudent to simply ignore the growing risks on this one.

I have covered this ground extensively. Read my book. The best defence is a balanced portfolio of multiple asset classes that pay you to own them in tax-efficient income, not a hunk of metal. — Garth

#117 april on 10.29.10 at 11:52 am

#114 Expat Canuck.

So why didn’t “guys” like you do that in the US and other places?

#118 Live within your means on 10.29.10 at 11:57 am

#26 warptweet on 10.28.10 at 11:58 pm
The Boomers are the most self centered generation the world has ever produced. Whatever they wanted they got. The politicians were too scared to say no to them. Trudeau started the borrowing spree with the first 40 billion deficit and the rest is history. It was the same in the USA and anywhere else that had a boomer cohort. You can bet they are going to bitch loudly for more pension money when it suits them. To hell with the kids who have to pay for them…. You can count on that!
……………………………………..

I’m 63 and as teenager I and 2 of my sisters & our friends were not self centred or pampered. We worked Thursday and Friday evenings and all day Saturday at Eatons, the Bay, etc. while in high school. I could go on and on. Most of my current neighbours, boomers, did likewise. Their children are the ones who have been spoiled by their parents. And, they admit they spoiled their kids. They’re the ones helping out their kids in their 30’s now. I’m sick of the boomer bashing. And, not all 60’s kids went to Woodstock and got high.

#119 Timing is Everything on 10.29.10 at 12:14 pm

#20 BrianT

Hey, that’s my Mum and Dad….Be good to your parents….and children. At the end of the day…only your family will be there for ya all.
—————————————————————
Oh ya, Trevor has no complaint. Next.

#120 Sam on 10.29.10 at 12:23 pm

#115 Expat Canuck on 10.29.10 at 11:44 am

housing crash in Vancouver? Not likely, too may guys like me will show up & spoil the party for the local vultures in waiting.

____________________
you copied & pasted that from the DC bubble blog, 2006

Or from the SD bubble blog, late 2006

Or From the Spain bubble blog, 2006/7

Or from the Reykjavik bubble blog 2006

(the last 2 are made up, but I read your post on the 1st 2 blogs multiple times. Good to know copy & paste still works)

#121 Jeff Smith on 10.29.10 at 12:25 pm

The dude says it’s a buyer’s market. LOLz

http://money.ca.msn.com/video/?cp-documentid=67342a0d-ccce-49ba-8a31-007cb7c6e0e8

#122 dirtyoilbanndit on 10.29.10 at 12:28 pm

How come people don’t want to admit gold has been the best place to be for a decade.
If everyone is printing currency and people accept it as normal, seems like a currency bubble, not a gold bubble?

#123 eaglebay on 10.29.10 at 12:31 pm

From: [email protected]

The China Surprise

As I chronicled earlier in the week, the Chinese government surprised the world this week by raising interest rates. Interest rates were raised by 25 basis points to 2.5% for deposits, and 5.56% for loans.

The Chinese government has come under global pressure of late to allow the RMB to strengthen, thereby more accurately reflecting the strong state of the Chinese economy.

So far, the Chinese have resisted, and believe the issue is more political than substantive in the United States. A weaker RMB has the effect of making China exports cheaper, and correspondingly imports into China more expensive.

The U.S. would like to sell more stuff to China, so hence our attempt to cram a stronger RMB down their throat. The stronger their currency, the cheaper our stuff. The Chinese do buy plenty from us- $870 Billion in Treasuries to be exact.

A lot has been made of the perceived Chinese Real Estate Bubble- Many comparisons have been made to the ’08 U.S. real estate implosion and mortgage melt down. While the price of residential real estate has risen rapidly in China, comparisons to our melt down are simply a bunch of hooey- it’s not going to happen.

U.S. investors are suffering from “Post Traumatic Stock Syndrome” (yes, I made that one up). We all lived through a once in a century melt down, and we’re now as paranoid as a crystal meth addict. Paranoid investors don’t believe they can ever make money in the market again. Strikes me as the perfect time to have equities faith.

The Chinese are plenty smart enough to learn from the mistakes of others. Rising prices in the Chinese residential real estate market are being fueled by a number of factors. First and foremost, there is a whole new generation of wealthy investors hatching in China, pulling profits out of highly successful businesses.

The nuevo riche Chinese are looking to invest, and their choices are limited. It’s their domestic stock market (Shanghai or Chendu only), real estate, or gold. That’s about it. In 2009 there were 1,000 RMB billionaires in China- today there are 1363. 95% of the newly created wealth is coming from companies serving the Chinese consumer, not exporters.

There’s also the high savings rate. The Chinese save approximately 40% of their income. The savings habit has been driven by preparation for future health care expenses- few Chinese have health insurance, so they tend to save for catastrophic illness or injury.

The government has earmarked billions for health care coverage in both the rural and urban areas, leading many to believe they don’t need to save as much. That money is looking for a new home- as both a place to live and an investment.

The Chinese are taking extreme measures to stave off any sort of real estate bubble. The Government wants to encourage their new urban generation towards home ownership, and rising housing prices could take buyers out of the market.

They also don’t want to see the kind of wealth destruction we are living through in the good old US of A. They know our economy is a mess, and don’t want to follow our lead. Here’s a few of the measures implemented to keep China from being Deja Vu all over again aka the US:

* Down payments on 1st homes are required to be 30%
* 3rd Home buyers are not permitted to get mortgages in Beijing, Shanghai, Hangzhou and Shenzhen
* 2nd Home buyers are required to put down 50%
* Developers must develop properties within one year, or they are not permitted to bid on other properties (creates more supply; lower prices)
* Tax exemptions are being providing to rental property developers for lower income renters
* When purchase limits are being strictly enforced in Shenzhen, and October home sales nose dived by 30%
* The recent rate hike is targeted at both developers and residential real estate buyers

Suppose the U.S. had implemented these requirements 6 years ago, and never securitized mortgages? Would we be in the mess we are in today?

If you’re concerned about an overheated China real estate market, you just don’t have the facts. You are simply suffering from Post Traumatic Stock Syndrome. Consider these measures, and put your common sense hat on.

Larry Isen is the editor of EmergingChinaStocks.com

[email protected]

#124 State of Mind on 10.29.10 at 12:32 pm

#116 dark sad person “eg: When Gold was $1000/oz and Oil was $100/bbl
You could buy 10 bbls of Oil for 10 oz. of Gold-
Today Oil is $80/bbl and Gold is $1300/oz-
Today you can buy 16 bbls of Oil for 10 oz. of Gold-
Which proves “at this point in time” that commodity prices are deflating-when measured against Gold–
What’s the big deal about that?”

It plainly shows gold is overvalued. Based on your stats above oil prices:

$80/bbl = $800oz for gold.

Gold is overvalued by $500 an oz if not more.

#125 Jeff Smith on 10.29.10 at 12:40 pm

>#72 Renting in Milton on 10.29.10 at 7:58 am
Growing up in the Kawarthas kept me sheltered from the
>whole mentality that we see in the GTA. I was under the impression that life was simple and houses were affordable
>for an average salary where Mom stayed home with us for the first precious years of our lives. My parents were
>very frugal and we enjoyed the simple things in life like swimming in the lake and skating on it in the winter. Now
>that my Parents are boomers and my brother and I are in our early 30′s, we can see how much of an impact that my parent’s lifestyle has had. They live in Peterborough where
>housing is still affordable, but really only on my GTA salery. They vacation a couple times a year. House paid off for a while now with every spec of their house renovated. The sad thing is, my poor parents had to bail my brother
>and I out of debt each in the last 5 years and the only way I could possibly ever retire comfortably is if I inherit their hard work. No one wants to count on that but sadly that is the scene for people my age with zero workplace
>pension and cost of living through the roof. No way my boyfriend and I could buy a place, contribute to RSP and have a nice emergency fund. Very scary. I’m scared for those my age who’s boomer parents are going to need
>their children to move back into the basement so that
>they can live out the rest of their days in that McMansion.

I am with you on that one. We are barely keeping our head above the water, never mind the pension, and a emergency funds and all that.
.

#126 Kestral on 10.29.10 at 12:44 pm

Mid-30’s Gen X’er here.

I think it’s a given that each generation has their own set of unique challenges, and for any generation.

There’s two sides to every sword.

On one hand, I think the Boomers had a much easier time with real estate prices as compared to income.
On the other hand, Boomers had to deal with 18%+ interest rates and massive inflation throughout their lives.

The fact is, every generation is dealt a different set of cards, all the whining in the world will not change that, so focus on playing your cards the best you can.

As said, Gen X’er, earning 6-figures with a 6-figure net worth, I live below my means on less than 20% of my gross income and save the rest to invest.

Did I wish I could buy a house for the prices the previous generation bought their houses in the early 90’s or earlier? Sure do, but in the long run, if what Garth predicts comes to pass, then not owning a house right now and owning stocks instead will be the greatest financial move to make and I’ll be set for life. Then I can buy any house I want, or maybe I’ll want to travel the world and rent in places of my choosing.

My own personal belief is that the Boomers’ challege economically is dealing with inflation, and for us Gen X’ers, it’s going to be one of deflation. If anything, the ones I feel badly for are the Gen Y’ers – they’re graduating from school now with high debt, few decent paying jobs out there for them, and it appears that they going to live a much lower standard of living than their parents did.

I personally feel fortunate that I am able to have this 10-year head start to save money and now can invest, I fear that for Gen Y, many will not even be able to make their monthly expenses, let alone invest and get ahead.

As for the Boomers, while my biased view is that they’ve had one hell of a great ride compared to Gen Y, those latter years could get very difficult. From where I sit as Gen X, I’m just going to keep on working, living below my means, saving and investing.

#127 Uni on 10.29.10 at 12:48 pm

>PS Garth says a housing crash in Vancouver? Not likely, too may guys like me will show up & spoil the party for the local vultures in waiting.

Why aren’t you guys swooping down and picking up U.S. real estate then? If Canadian real estate slumps won’t it be just as unappealing as U.S. real estate is now?

#128 T.O. Bubble Boy on 10.29.10 at 12:48 pm

Quote of the day from Mr. “F”:

“The American housing sector remains a major concern”

http://www.reuters.com/article/idUSTZOTLE68M20101029

So, given the chance to call a Canadian Housing bubble for 4-5 years, he’s denied it every time… but given the chance to blame the US Housing Market for Canada’s economic problems, he takes it???

#129 lonely limey on 10.29.10 at 12:55 pm

realpaul #113

Easy cowboy. Who said anything about student loans? Most of them piss it up against the wall anyway.What’s wrong with expecting the precious ones to get a job and study at the same time.

My two lads are at uni and pay for all their expenses from their respective part-time job. I provide the roof over their head, food and plenty of encouragement.

#130 Judy from SW Ontario on 10.29.10 at 1:05 pm

Kitchener 1

Don’t laugh but us Boomers blame our parents generation for screwing things up.
Our parents – the ones who were fortunate enough not to have to fight in a war – these were the lucky ones.
These folks smoked and drank and partied.
The men did what ever they wanted to and their wives just said yes dear.
They did not worry about the environment or getting cancer or how much education you had to have to get a job.
They had houses.
They get to die without worrying what will happen next and what they have left for the rest of us.

Leave us alone.
We are doing are best.
We have to ask you folks how to use the technology and that is embarassing.

#131 DM in C on 10.29.10 at 1:09 pm

Calgary Oct numbers being reported already

***********

October MLS home sales continue slide in Calgary

Single-family home price dips

http://www.calgaryherald.com/business/October+home+sales+continue+slide+Calgary/3746719/story.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+canwest%2FF233+%28Calgary+Herald+-+News%29#Comments

#132 Mtl RE Observations on 10.29.10 at 1:09 pm

3 more units were listed today in the building where we sold, for a grand total of 21 (vs. 4 in the spring).

#133 Brass Balls on 10.29.10 at 1:09 pm

#80 Allister

Most intelligent comment on here. Reminds me of the saying “grass always looks greener…”

Fact is, it wasn’t better for boomers, it was JUST DIFFERENT than now. People who are resourceful and adapt to circumstances are always the winners.

#134 Judy from SW Ontario on 10.29.10 at 1:13 pm

Kitchener 1

Don’t laugh but us Boomers blame our parents generation for screwing things up.
Our parents – the ones who were fortunate enough not to have to fight in a war – these were the lucky ones.
These folks smoked and drank and partied.
The men did what ever they wanted to and their wives just said yes dear.
They did not worry about the environment or getting cancer or how much education you had to have to get a job.
They had houses.
They get to die without worrying what will happen next and what they have left for the rest of us.

Leave us alone.
We are doing our best.
We have to ask you folks how to use the technology and that is embarassing.

#135 Fuzzy on 10.29.10 at 1:14 pm

The term “investing in gold” is an oxymoron. You don’t invest in gold, you buy wealth protection against chaos with bullion: 5%-10% of liquid assets, max. Anything above that is either un-necessary, or entering highly speculative activity.

#136 AxeHead on 10.29.10 at 1:38 pm

I want to open the cabin door, stick my head insided and say to this captain “I just want you to know, we’re all routing for you”.

#137 McSteve on 10.29.10 at 1:40 pm

#66 Darryl:

Yes – I did partake in vacationing at his houses and I lived under his roof until he left when I was 13. I also told him about 12 years ago that he needed to get serious about retirement and cut his overhead. I also told my step-mother that she should take the company pension and it wasn’t a scam. I also told them to hang onto the thousand or so Bell Canada stocks that my stepmother inherited as another source of income (okay – maybe only paying $100 a month but at least it was something). Investments scared both of them and the only thing they understood was property and cash. So, today, that’s all they have – and not much of the later.

My point here was to illustrate that, for some, the day of reckoning has finally come. You could see it coming a mile away. I hope he can unload some property before it’s too late but he’s in no hurry and his prices are sky-high. Real Estate always goes up, ya know…

#138 Kitchener1 on 10.29.10 at 1:40 pm

Regarding boomers, beleive it or not, im actually going to defend them.

See, a lot of people dont really care about retirement and if thats there view, great, who am i too judge.

Trevor is in the top 5% of earners in Canada, he has a huge house and im sure he has a lifestyle to go along with it. If thats what makes him happy, more power to him.

Garth, i think the whole retirement dynamic is changing before our very eyes.

Everyone assumes that Boomers WANT to retire at 65. But from my personal experience at my workplace and that of my friends, many many older folk our putting off reteirment or if they do, all do something on the side for $. Not everyone needs to but many choose too.

50 is the new 30, people are healthy, living longer etc.. and many dont know what to do with themselves once they hit 65 so they keep grinding on. For some folks work is about as much social as it is financial.

Bad news for us as every boomer that does not retire means that another job is unavailable for the young ins, but dont expect them to care, their generation never has and will continue to do whats right for them.

The other changes I see with boomers is that they are still rallying to define themselves against their parents, look at their clothes and toys, buying trucks,sleds,boats,Harley’s etc.. and being all giddy about it like a 20 year old would be. They have yet to realize that they are the statues quo.

That generation has always lived life for itself, so if I was their kids, I wouldnt expect any sort of inheritence, more like well be helping them out in there older years after they have lived the good life. Nothing wrong with that either. Just saying its the reality.

#139 Sandra on 10.29.10 at 1:48 pm

@#10 Debitisforever

What happened is not only upgrading, but many borrowed against their homes more than once and never got around to paying off. Borrowing for vacations, children’s educations, etc.

#140 Sandra on 10.29.10 at 1:49 pm

@#10 Debtisforever

What happened is not only upgrading, but many borrowed against their homes more than once and never got around to paying off. Borrowing for vacations, children’s educations, etc.

#141 Frank in Calgary on 10.29.10 at 1:55 pm

Hey Garth:

Just a question, how much square footage, in your opinion does a 4 person oung family need and utilize. With a developed b-ment in as well?

Thanks

#142 Whattodo on 10.29.10 at 1:57 pm

Mr Turner:

Since houses are going down in prices, what’s your recommendation if you do not want to sell or can not sell? I have accelerated payments and the amortization is 15 year. Would you recommend to extend the amortization, stop accelerated payments and take that extra cash and placed in the other instruments you have mentioned?

#143 Foggy on 10.29.10 at 2:04 pm

I think the GenX/Y etc resentment on the Boomer generation and how “easy” we had it, is a fairly large simplificaion of a long span of time. To look at the events and changing economies in the world from 1946 to present in such a simplistic fashion is laughable. A simple upward ride to individual prodperity.
I don’t recall anything coming particularly easy for me. If I compared that to my parents experience of going through the great Depression and world War II – well there is no comparison. When I look at how much young kids have, materially (clothes, computers, cell phones etc) and see what I had at that age, I would come off looking like a 3rd world peasant. And I do not recall conversations with my friends back then how impoverished or disadvantaged we were. When we became adults we simply got on with life the best we could.
I am truly staggered by the malice and sense of entitlement that I read here.

#144 Makeorbreak on 10.29.10 at 2:06 pm

http://www.newsweek.com/2010/10/28/a-pawn-shop-for-the-affluent.html#

#145 Sandra on 10.29.10 at 2:13 pm

#58 jman

You’re right on. As a Gen Xer, I see the same perpetual behaviour. It’s not only the Boomers, it’s the generation that followed it and walked right in their footsteps. The first generation of “me, me, me, now, now, now and I, I, I”.

#146 rory on 10.29.10 at 2:26 pm

Great quote for many of the postings today…

“In contrast to astrology, one must accept the fact that success is not due to a fortuitous concourse of stars at our birth, but due to a steady trail of sparks from the grindstones of hard work, determination, good planning, and perseverance. When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened.” -Hossein Arsham

#147 Darryl on 10.29.10 at 2:28 pm

#75 Canucklhead on 10.29.10 at 8:15 am

I saw that REIN guy too. First he said that Hamilton will do well over the next two years and 10 minutes later he said “only buy where the jobs are”

What an idiot…

#148 jess on 10.29.10 at 2:29 pm

He could develop a “Bin Appetit,” join the
freegan movement and adopt the mantra, “In Cheap We Trust”

#149 Darryl on 10.29.10 at 2:39 pm

#81 Got A Watch on 10.29.10 at 8:59 am

Great post. Couldn’t agree more. Teens today are the future of your basement. Not because they were screwed but because they think that go getting is a timmie run while the xbox updates.

#150 Timing is Everything on 10.29.10 at 2:52 pm

Boomer,X,Y,Z……

‘The song, which expresses an older person’s wistful appreciation of the idealism of youth and the inevitable disillusionment of maturity’ – wiki

http://www.youtube.com/watch?v=KOvp8Arzq2c

#151 Devil's Advocate on 10.29.10 at 2:59 pm

Well shiver me timbers, the market is indeed changing.

Thus far for this month of October 2010 there have been 146 single family sales in the Central .

For the same period last year (2009) there were 225 single family sales in the Central Okanagan.

But wait! What’s this? For that same period the year before (2008) there were just 94 single family sales in the Central Okanagan.

Yessiree it sure does appear that things are tanking real fast. Real fast indeed.

By the way, for what it’s worth, “average” price is up. But don’t fret none on that one Blog DAWGs as the figure is inordinately skewed by a few more high end sales than usual.

Guess you’re all going have to wait a little bit longer for your Armageddon after all.

#152 dark sad person on 10.29.10 at 3:05 pm

#126 State of Mind on 10.29.10 at 12:32 pm

It plainly shows gold is overvalued. Based on your stats above oil prices:

$80/bbl = $800oz for gold.

Gold is overvalued by $500 an oz if not more.

****************************

I think all that clearly shows is-
You don’t know your ass from a hole in the ground-
Prove what you say out-
What is the anchor you use?

******************

#120 Live within your means on 10.29.10 at 11:57 am

I’m sick of the boomer bashing. And, not all 60′s kids went to Woodstock and got high.

******************

Maybe we didn’t inhale?

http://www.youtube.com/watch?v=kPDomnIF8dU

#153 Willy H on 10.29.10 at 3:09 pm

All this inter-generational angst can be explained by the following links:

http://www.ic.gc.ca/eic/site/eas-aes.nsf/eng/ra01741.html

Paragraph starting with: “The worldwide slowdown in productivity growth that began in the mid-1970s slowed ….”

http://www.statcan.gc.ca/pub/75-203-x/00002/4068850-eng.htm

Average income tax of families and unattached individuals, 1980 to 2002 – Stats Can (Not the best graph – wish it went back to 1960)

The bottom-line is that Boomers have on average paid lower taxes as a % of income (over their entire lives) , and have lived in periods of rapid increase in standard of living. Gen X + Y and all subsequent generations are going to have to live with higher taxes and a standard of living doubling every 70 years (that’s probably bullish if not impossible based on world energy supplies).

For Boomers who are in trouble today, you missed your opportunity because you have lived through the greatest period of wealth creation the world has ever seen. For the rest of us (Gen X + Y etc ..) we just have to suck it up! It’s just the way it is and very little can be changed. And guess what?, we are going to have to foot the bill for all the Boomers that find themselves have-nots in retirement on top of saving for our own!

Historians in the coming decades are going to look back a Boomers and realize that they sucked up vast amounts of finite world resources at the expense of future generations for short-term wealth creation. When they had exhausted their own markets they began to export our unsustainable way of life to the un-developed world in order to generate more wealth for themselves. As newly minted consumer class in China and India gobble up what is left (450 Million +).

I see slow growth for a decade, a slight bounce as all manufacturing and textile industry returns to NA (energy scarcity) and return to slow growth until we solve our energy and over-population problems.

Future generations are going to curse those that came before.

This my friends, will not end well!

#154 Zaza on 10.29.10 at 3:10 pm

My friends (they are about 50) just purchased a new condo downtown Toronto (380K). (5/35 morgage). When they figured out that they have to pay it until they are 85!!! they decided to buy ONE MORE (the shovel didn’t touch the ground yet) flip it, make a profit and pay for the first one.

#155 Confused in Victoria on 10.29.10 at 3:23 pm

#81
You can’t say those things. What about their self esteem, Wasn’t that the mantra since mid-80s???

#156 Larry in Calgary on 10.29.10 at 3:27 pm

Naughty Garth, who loves to stir the gen war from time to time. Anyways i’m a gen X and get on with it.

#157 Devore on 10.29.10 at 3:32 pm

#125 eaglebay

So far, the Chinese have resisted, and believe the issue is more political than substantive in the United States. A weaker RMB has the effect of making China exports cheaper, and correspondingly imports into China more expensive.

Why is everyone so shocked about this?

For decades, the US has been able to easily export their inflation to every other country on the planet, at least those that wish to have an export market denominated in USD. Now, when the US has floored the accelerator, in order to jump start its own industry, the policy of global competitive devaluation no longer suits them, and they demand others stop doing what is in their best interest?

The issue is simple. As long as US keeps up public pressure on China to revalue, we can rest assured they will do nothing. China is similarly pressuring the US to stop printing, but we don’t see Bernanke folding up shop, so why expect China to do so? This is the land that invented “saving face”. They will do what is in their best interests, and no amount of foot stomping will change that.

#158 Sue on 10.29.10 at 3:34 pm

Garth,

My house is 1200SF in Dundas, Ontario. It has 1 full bath on the main floor along with 1 of the bedrooms. (3 total in 1 1/2 story) It is also a 5 minute walk to downtown (all amenities).

What % will it dropdo you estimate? We have around 40% equity and 15 years left to go. I am hoping to sell it in 5 years to a boomer and snatch up a larger house if it’s dirt cheap. (2nd choice)

My spouse refuses to sell now and get a townhouse to lose the mortgage. (my first choice).

#159 Devil's Advocate on 10.29.10 at 3:57 pm

You can’t control the market. You can only control you. The market will pay you what value you bring to it. If you want to improve your lot in life improve your marketable value.

#160 bigrider on 10.29.10 at 4:01 pm

BrianT #114- Why focus on only the negative. All is not doom and gloom like some here seem to believe.
Spend less than you make. Avoid debt. Simple.

#161 ralph on 10.29.10 at 4:05 pm

Just talked with a real estate agent who has been in the business over thirty years. Says the amount of inventory listed in Kelowna right now has an absorption rate of fifteen years. Years not months!

Somebody please let me know that’s wrong.

#162 jess on 10.29.10 at 4:17 pm

For 50 bucks your doll can do your talking

NEW YORK, N.Y. – The New York candidate for governor from the “The Rent Is Too Damn High Party” now has a talking plastic doll that repeats his catch phrase.

what would be your catch phrase Garth?

#163 bullion.bunny on 10.29.10 at 4:19 pm

Garth……….what is it with you…..I posted two valid comments and you took them down……what happened to free speech?

Do you remember sending me a message which ended with this?: “Turner you are so full of shit!”. Bye Bunny. — Garth

#164 Tyler Durden on 10.29.10 at 4:23 pm

90 GBoomer on 10.29.10 at 9:39 am says:
Those of us who have lived modestly still scratch their heads about why the investments in RRSP’s have never achieved the miracle of compound interest that we were assured would happen. Ten and twenty years ago, there was no Garth advising us how to invest, and the financial planning industry was not nearly as competitive and helpful as it is today. The internet was not yet populated with instant information about all things economic and there were no real tools for planning. Like the generations before us, boomers bought into the middle class ideal that home, family and job were the central function of citizenship. In this there were no ulterior motives to screw over subsequent generations. If anything, many of us despair of what is in store for our own children as they struggle in a hyper-competitive society where civility is gone and everyone is looking for someone to blame for their own misfortune.
—————————————

Your observations are all spot on! -magnificient paragraph.
I am an X but I started investing early and I remember the compound interest and investment vehicles which never achieved it – “Wealthy Barber” stuff.
I despair for Gen Y as they do not know any different. Workplace competitiveness is a race to exhaustion, master’s degree required , years of life and funds spent on education for a mid-level income and an ultimately insecure position.

#165 Behavioral Finance on 10.29.10 at 4:39 pm

dark sad person,

You have much to learn about the financial history of the United States. In 1800s US faced many depressions even under your so called gold standard. Additionally it faced liquidity traps when capital would take flight from America.
In 1900s US had an influx of immigrants and the ability to create industries. The creation of central bank enabled the US to move capital more quickly to industries and individuals that required it. In general it brought huge prosperity to the nation.

Ok if the currency was devalued 95% like you say. I would suspect you would live in a shack today and maybe ride a bicycle to work

Now ask yourself this question. Would you see such a tremendous GDP growth if we were under a gold standard?

http://research.stlouisfed.org/fred2/series/GDPA?cid=106

#166 Devil's Advocate on 10.29.10 at 4:44 pm

Just talked with a real estate agent who has been in the business over thirty years. Says the amount of inventory listed in Kelowna right now has an absorption rate of fifteen years. Years not months! Somebody please let me know that’s wrong. #163 ralph on 10.29.10 at 4:05 pm

FAIL There are currently 2018 Central Okangan single family homes listed for sale on MLS. Over the last 12 months there have been 2038 such sales. That equates to less than a years supply. Still more than a balanced market of 6 to 8 months supply would indicate but a long, long way off what you 30 year real estate veteran friend suggested.

#167 Little Ronny on 10.29.10 at 4:51 pm

Expat Canuck

Give it up big shot, at 29 you are still a novice, regardless of what you think you know.

#168 Devil's Advocate on 10.29.10 at 4:55 pm

#163 ralph

Not even the supply of $1,000,000.00 plus homes comes close as there are but 343 such priced homes available on MLS in the Central Okanagan in the face of 102 such sales in the past 12 months. That’d be over just 3 years supply.

#169 Sam on 10.29.10 at 5:05 pm

125 eaglebay on 10.29.10 at 12:31 pm

From: [email protected]
______________
Someone whose fortunes are tied to the Chinese economy, shilling for China.

say it ain’t so !!!!!!

colour me surprised. Or not. (definitely not)

#170 betamax on 10.29.10 at 5:17 pm

#125 eaglebay: “If you’re concerned about an overheated China real estate market, you just don’t have the facts. You are simply suffering from Post Traumatic Stock Syndrome.”

LOL. Strawman from a pumper. Any Chinese ‘regulation’ can can be circumvented with a well-placed bribe. Lots of newly minted Chinese rich are leveraged to the hilt on multiple properties, each new downpayment borrowed against paper equity gains on the last.

Chinese housing market: a bunch of neophyte capitalists unofficially supported by a kleptocracy have implemented a Ponzi scheme on a scale never seen before. Probably has a few more years to run, but when it crashes it’s going to go like a doublewide in a hurricane.

#171 robert james on 10.29.10 at 5:33 pm

When you have time DA,, take a look at the latest Real Estate Review for the Central Okanagan..page 34.. You will find the SFH s listed for Peachland.. In Jan. 08 near the top,, but not quite the top as it came in April 08,, there was ONE house listed for under 400 K and that was listed at 398K..My son was looking for a house at that time so I remember it very well.. If you go to page 34 and look now,,you will find 17 houses listed for under 400 K,, one house at 189.900.00 ( a former grow-op),,3 houses starting at 274,500.00 ,,one at 279,900.00 and one at 298.000.00 and the rest go right up to 399,900.00.. At the peak in April 08 these 200K and 300 K houses would have been 400 K plus houses.. But the real kicker is,,THEY ARE NOT SELLING!!! Ralph,, I would go with your 30 year Realtor if I were you !!!! But do not get in a rush because this spring will be when the SHTF in this little part of Utopia…

#172 TakingResponsibility on 10.29.10 at 5:33 pm

Sell. Sell. Sell.

http://www.calgaryherald.com/business/energy-resources/Syncrude+shares+drop+amid+revelations+more+dead+ducks/3738980/story.html

#173 Dan on 10.29.10 at 5:42 pm

Zaza on 10.29.10 at 3:10 pmMy friends (they are about 50) just purchased a new condo downtown Toronto (380K). (5/35 morgage). When they figured out that they have to pay it until they are 85!!! they decided to buy ONE MORE (the shovel didn’t touch the ground yet) flip it, make a profit and pay for the first one.
———————————————————-

tens of thousands of people are playing this game. If buyers were smart(buyer are not smart) they would know the house of cards will crash so hard and fast. People are gambling with money they do not have. Be smart people look at an empty condo or house and think these people need to sell or they will go bankrupt(9/10 times these people face going bankrupt). The house of cards is so huge that canada is in trouble. It’s all a house of cards. Anyone stupid enough to buy should not believe their realtor and low ball by 20-25%. People need to sell more then buyers need to buy.

#174 jess on 10.29.10 at 5:50 pm

Behavioral

I recommend you read Howard Zinn: A People’s History of the United States.

…then tell me who again benefited

#175 robert james on 10.29.10 at 5:54 pm

Sorry.. Correction to my # 172 post.. At the peak in April 08 these 200K and 300K houses would have been 399 K and 400K PLUS houses .. (except for the former grow-op (maybe 325 K for that turkey in 08) which is all the more reason why any non-resident buying a rental house here is insane ) I would still go with the 30 year guy ,Ralph !!!

#176 Timing is Everything on 10.29.10 at 5:55 pm

#174 Dan said – “People need to sell more then buyers need to buy.”

One may need to sell, but one never needs to buy.

#177 realpaul on 10.29.10 at 5:57 pm

#131 LL…Keeping the kids at home is a fate worse than death…no thanks. Sending the kids off was the best decision we could have made. Unfortunatley the majority of students are neither living at home or have parents in a position to support them…..one of the reasons the student loan budget was maxed out this years and capped by the finance ministry.

Although Garth may disagree to an extent …..I used gold as the RESP vehicle to fund the costs of post secondary including two masters degrees. The accounts are generating thousands of dollars a day. We will be in the rarefied group of parents who end up with a surplus in the accounts when the kids are finished….brutal.

The kids who are chosen for the limited year round res space on campus are the cream of the crop…..5.0’s and reams of community service credits needed to qualify …this experiance you can’t get living at home. The cost is $655 p/m x’s 12 for the privelage of being chosen for the grad program. Food costs are mitigated by having a personal kitchen but still $100 a week. Tuition ( plus the summer program credits towards qualifying for the masters) across the country is standard but with texts it works out to $7500 p/a.. ..plus another grand plus plus in books materials and general costs.

Now…..the average student is working at minimum wage…with a full course load (6 course per semster) they’ll be lucky if they can work ten hours a week ( I had a seven course load and lived on 4 hours sleep a day to keep up and worked a part time job weekends). But still thats only pocket money at $85 dollars a week….or $4400 per year. Somebody is going to have to be subsidizing the student to a greater extent than a roof and a plate of grub to make the ends meet.

I was fortunate to get on the gold bandwagon ten years ago with the RESP’s ….I was told by the bank flunky that ‘its so risky’….she was recommending tech funds…go figure. I have seen an average return of 26% p/a over ten years except for the past two when the returns have been 50% and this year over 80% and climbing every day.

However the cost of education has gone beyond a childs ability to pay with part time money and a parents enthusiasm….I just don’t see the numbers making sense.

Jobs wise…..as I said…the unemployment for 18 to 25 year olds to over 50% in BC…even the old stand by’s the tree planting and fisheries jobs are non existent due to the government and private industry selling these contracts to labour contractors who bring in Africans, Indians and Mexicans to do the work.

If a student is working more than the number of hours I suggested then something has to give…either their marks are suffering because of the lack of study and project time or……..they are taking an extra one to two more years to finish off a degree….the opportunity and fixed costs of that have to be considered.

Having said all that…the pilots in deep shit either way as two kids going to UNI…even if they live at home are going to cost a minimum of $16,000 a year…if even one goes away then the costs go up at the market rate.

#178 Bailing in BC on 10.29.10 at 5:59 pm

#102 DaBull on 10.29.10 at 11:04 am

If 60% of boomers in Alberta are stupid and have all of their equity in paid off houses, earning them nothing

and …

40% of boomers in Alberta are smart and have mortgages but are using their additional equity to earn 10%

Then…

I guess that leaves 0% of Alberta boomers with mortgages and no extra cash reserves

and…

0% of Alberta boomers with no mortgage and cash reserves earning them 10%

Of these smart mortgage holders, 65% are financially illiterate and just renew at whatever rate the lender offers.

Not only is life sunshine and lollipops, it appears to be very black and white.

I may not be a financial genius but my ducks are in a row and I know Da smell of Bull shit.

#179 Paul on 10.29.10 at 6:06 pm

#152 DA

Are you making stuff up? We sold in Apr 09 and a few weeks back you said we did great. You went on to say that waiting would have gotten us about $25-30K less. You are confusing me and others I think.

#180 Devore on 10.29.10 at 6:09 pm

#162 ralph

Just talked with a real estate agent who has been in the business over thirty years. Says the amount of inventory listed in Kelowna right now has an absorption rate of fifteen years. Years not months!

Somebody please let me know that’s wrong.

That’s wrong.

Certain areas are 1 year inventory, but on average it’s around 9 months.

Victoria, on the other hand, has quietly slipped into the 11 month territory.

#181 Devil's Advocate on 10.29.10 at 6:09 pm

#172 robert james

Sorry, I’ just not at all following your logic. what part of my last three previous posts do you not understand? You can’t just pull thoughts out of thin air and have them compete with the material facts. There is a one year supply of homes for sale in The Central Okanagan. Peachland is indeed a part of that Division, but one of lagging and spotty activity at best, always the first to fall and last to pick up.

#182 jess on 10.29.10 at 6:15 pm

China Creates the Worlds Fastest Supercomputer, Operating at 2.507 Petaflops

…can it solve disasters…like this land slide in Brazil?

An amazing landslide video from Manaus in Brazil
On 17th October an amazing quick clay type landslide occurred at Porto Chibatão in Manaus, Brazil. Those box cars look like toys.

http://blogs.agu.org/

Michio Kaku
Professor of Theoretical Physics, CUNY
It seems that every year or so, the unveiling and delivery of a new supercomputer that trumps the previous speed record sweeps the headlines. In fact, there are so many of these supercomputers these days that there is a website that keeps track of all of them: the Top500.
http://bigthink.com/

#183 BrianT on 10.29.10 at 6:15 pm

#162Big-It has nothing to do with doom-this isn’t Facebook-who cares how much coin your daddy has? He isn’t the only guy in the GTA with a few bucks-far from it.

#184 Kitchener1 on 10.29.10 at 6:19 pm

#174 Dan

Very true, way to many people are overleverages on condos and houses.

Condos are going to drop hard and fast, housing will go as well.

My take is still very very bearish. Think back to Oct 08 and the following RE market of march/april/may of 09. People were scared and prices were dropping hard and still no sales happened. Without BoC interventation, it would have been a 30% YoY crash.

Thing is that there really is no bottom to housing prices, look at the US, houses that were purchased for 350K now sitting on the market from 150K-125K-100K and still no takers after 12 months. Its cheaper to buy a used house then it is to build a new one and still no one is buying.

It will happen here, 7 out of 10 people already own a home, many own 2 or more properties. There is just not enough people left to purchase to keep the bubble going.

Just imagine in 5 years- 2015 if rates are at 7%, thats the historic average and by then, im sure the economy will be better. What does that do to people renewing??

#185 Devil's Advocate on 10.29.10 at 6:20 pm

#180 Paul

That would be true, generally speaking, on average, had you sold in April 2009 you would have done better than had you waited until now. Prices ARE down, not more than 10% though. And I do anticipate a further 10% drop between now and the bottom, whenever that might be, but not more and even then that on “average” for what ever that is worth. As I’ve always said some will drop more, others will actually rise as they are today.

Maybe you are misunderstanding my stance in-as-much as it is hard for people to fathom a REALTOR might say such blasphemous things toward the notion that we believe, or say anyway, that the market only goes up.

#186 OttawaMike on 10.29.10 at 6:22 pm

20 BrianT on 10.28.10 at 11:29 pm
Agreed, my parents are from the 1939 cohort and most their age seem to have done no wrong financially.

Malcolm Gladwell discusses this at length in “The Tipping Point”
Good read.

#187 Devil's Advocate on 10.29.10 at 6:34 pm

Seems to me that you all want to argue with me merely for the sakecof arguing. Just can’t accept what a Realwhore says as potential truth. Always twisting it to suit your own personal agendas. That is sad, for how possibly can you make an informed decision when you refuse to hear the truths. And you wonder why things never go your way?

There is nothing which supersedes or lasts so long as truth. But you all choose to believe what ever it is you want to believe. Really doesn’t matter to me. Do you really think I believe I might change the market by lying to a handful of Blog DAWGS. Do you really think I care to change the maket? Really, as I have said before I’ve been waiting for this market to come for a good five years now. This IS my market. I love this! Really. This is when others throw in the towel and I pick up the pace. This is a market in which buyers don’t have to be stupid. Didn’t I tell you I don’t deal with stupidity.

I’m offering you good information do what you like with it. It’s your life.

#188 Hiteclowtec on 10.29.10 at 6:41 pm

Peter Shiff has an interesting view on the real reason for QE2.

“The true purpose of QE 2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem. If the truth were known, a real panic would ensue. So, the Fed pretends buying treasuries is simply part of its master plan to boost the economy, even though, in reality, it is simply acting as the buyer of last resort.”

http://www.europac.net/commentaries/keep_your_head_above_dollar

#189 ralph on 10.29.10 at 6:46 pm

DA did you include all the condos listed in your equation? And you don’t have to answer this, but how many units have you sold in the last six months? I am assuming you are an agent.

#190 Nostradamus Le Mad Vlad on 10.29.10 at 6:46 pm

-
Spooferama This is what I am now!
*
#26 warptweet — “Whatever they wanted they got.”

Who from? My grandparents and parents were middle-class, never rich. Nothing has ever been handed to me on a silver platter, I’ve had to work my buns off to get where I am now.

Was the hard work worth it? You bet! We don’t owe anyone anything, and the reverse is true. It’s a nice place to be.

#32 ralph — Re: Hospitals, ERs and the like.

“A hospital bed is a parked taxi with the meter running.” — Groucho Marx.

#43 Bailing in BC — “Well isn’t life just sunshine and lollipops!”

Curious mix. I’ll have to give it a try! I recall Dr. Who (Tom Baker in the ’70s, BBC1-TV) used to say: “Anyone like a jellybaby?”

#42 A Devil’s Advocate — Noted! Where do you tango?!

#69 bigrider — Unfortunately, Garth seems to be right.

#77 Ben — “. . . tax rates will have to go up to keep the city’s revenues creeping up.”

That’s right. In some cities, exorbitantly so. Maybe one day we will rent or win the lottery.

#90 GBoomer — “Those of us who have lived modestly still scratch their heads about why the investments in RRSP’s have never achieved the miracle of compound interest that we were assured would happen.”

Compound interest, although nice to dream about, is akin to a debt- and mortgageless Cdn. society — Doesn’t happen now, too many variables.

What I do look for is steady, unspectacular growth — three years up, two down. I’ll take the end result of that, and keep my marbles intact to boot!

#119 Hoon — “Except for the part where you pump fear to sell books . . .”

Not fear, just realism.

#125 eaglebay — “Strikes me as the perfect time to have equities faith.”

Good sentence and post. That’s what our CFP has us in — six Cdn. equity mutuals and one I.T., with monthly DRIPs.

During the downturn of ’08-’09, the mutuals increased by just under 20%, a nice return.

#130 T.O. Bubble Boy — “Quote of the day from Mr. “F”:

“The American housing sector remains a major concern”

If F said that, look out. Their mortgages will be resetting in a few months, so there will be plenty of new foreclosure activity.

#155 Willy H — “This my friends, will not end well!”

Not for the west, certainly. We have had our day in the sun, now it is time to pass the baton over to the Yellow / Red races for their place at the top.

The wheel always turns.

#173 TakingResponsibility — “Sell. Sell. Sell.” — and — #174 Dan — “. . . the house of cards will crash so hard and fast.”

Just as in 1989, people walking away from their lost diamonds in the rough.

#191 Herb on 10.29.10 at 6:51 pm

Jess @ #175 and Behavioral Romance,

Howard Zinn’s A People’s History of the United States can be read without charge at http://www.historyisaweapon.com/zinnapeopleshistory.html

It’s worth more than what it costs to read on the internet.

#192 Jody on 10.29.10 at 6:55 pm

#81 Got A Watch

It was the boomers who cried and whined to the government to bring in all these Goddamn social programs that are killing us economically. As a gen X’er born in 1972, I don’t want government, nor any of their assinine social programs, work hard and keep what you earn is my motto. The boomers changed our society from one of independent people who worked their asses off to one of people who expect the government to take care of them cradle to grave. People need to stop thinking the boomers were the last “hard working” generation,” sorry, but the majority of them don’t know shit when it comes to hard work. It really pisses me off when boomers try to take the mantle of their parents on, boomers parents worked hard, boomers parents busted thier asses in the world wars, boomers in no way deserve the same level of respect of the generation before them, not even close. It’s not this or that genration that deserves respect, it’s individuals who go to work every day and bust their ass just to make a dollar. There are lazy pricks in every generation and one can tell who they are because the first words out of their mouths are usually, “their oughta be a law!” or “the government needs to do this.”

#193 lonely limey on 10.29.10 at 7:00 pm

realpaul #178

“…….The accounts are generating thousands of dollars a day……..”

I kneel before your investing acumen and am humbled by your riches. You should write a book and share the elixir of your knowledge.

#194 john m on 10.29.10 at 7:05 pm

#66 Darryl on 10.29.10 at 7:24 am

#56 McSteve on 10.29.10 at 4:50 am

Did you partake in your dads toys? Did you vacation in your dads homes. Did you live under your dads stairs?<<< most likely Darryl and daddy probably helped him finance to get those stairs to say nothing of what it probably cost mommy and daddy to send him through school etc..perhaps he is fearing his free ride coming to an end and its all their fault :-)

#195 SpaceMonkey on 10.29.10 at 7:12 pm

@ 149 Darryl

I agree about that REIN guy. He seems to come across like the stereotypical used car salesman to me for some reason.

However, I think what he is thinking is that jobs will be coming to Hamilton. Hamilton is not as bad off as the stereotype would suggest. Sure there have been lost jobs in heavy industry, but there are also examples of jobs leaving Toronto and going to Hamilton. The biggest bakery in Canada, Canada Bread, as well as the ORNGE helicopter services are recent examples.

#196 john m on 10.29.10 at 7:12 pm

#119 Live within your means on 10.29.10 at 11:57 am<<<< your absolutely right!

#197 Jeff Rubin on 10.29.10 at 7:15 pm

Fuzzy on 10.29.10 at 1:14 pm

What? Like talking about things you know nada about.

Now, I know why you’re called Fuzzy.

The term “investing in gold” is an oxymoron. You don’t invest in gold, you buy wealth protection against chaos with bullion: 5%-10% of liquid assets, max. Anything above that is either un-necessary, or entering highly speculative activity.

#198 Brynn on 10.29.10 at 7:29 pm

Hey Garth,
Where are these losers you know who cant sell their houses? Your story sounds like a crock of steaming poop..
NEWSFLASH: look it up – most houses in decent areas ( and as flawed as missisauga is, it is still a decent area) sell for asking or close to it. Either your pilot friend has a home with major structural problems, is situated beside a half way house for sex offenders or he is asking a ridiculous price.

Dont present some exception like it is rule.. you’re using this guy as a fluffer to turn on your homeowner hating audience…

#199 Devil's Advocate on 10.29.10 at 7:36 pm

#190 ralph

No, the numbers I provided were for single family detached. And yes, rest assured there is a greater months inventory of condos on the market… Still not so much as you might think 15 months approx.

My sales? Enough to pay the bills and let me take a well deserved break here and there.

#200 robert james on 10.29.10 at 7:38 pm

Actually DA,, I don`t both reading your posts anymore.. When I was skipping over your post as the page was scrolling down I noticed that you were telling Ralph how the sales in the Okanagan are really not that bad.. I am here to say it really is not that good here in Peachland which is referred to “The Jewel of the Okanagan” by the real estate industry.. You now get a lot more house for your money ,, that is ,if you buy which most people are not..

#201 The Great Gazoo on 10.29.10 at 7:39 pm

Garth you are wrong about boomers.

This North America boomer is doing quite alright…

http://www.youtube.com/watch?v=YVtEX1J7tXQ

I watched that. Now I need a shower. — Garth

#202 GBoomer on 10.29.10 at 7:49 pm

#81 Got A Watch

It was the boomers who cried and whined to the government to bring in all these Goddamn social programs that are killing us economically.

Please define social programs. And be specific. I am extremely curious about what you mean?

#203 SpaceMonkey on 10.29.10 at 7:50 pm

@197 John M

Did you mean…

you’re absolutely right or

your absolute right?

I’m still amazed at the relatively high frequency of “typos” in the comments of this blog vs other blogs and message boards. Maybe everyone is just so excited to get their ideas out on this blog?

#204 Nostradamus Le Mad Vlad on 10.29.10 at 7:54 pm

-
Land Titles “Other title insurance companies will follow suit. This is a nuclear bomb right into the heart of the real-estate market. Nobody will dare buy a house if the titles are not insurable, given the current fraudgate mess and MERS. This is a guaranteed crash of the … OH, WAIT, LOOK OVER HERE! WE HAVE FAKE BOMBS ON AIRPLANES TO LOOK AT! SEE? SEE? PHONY BOMBS! REALLY SCARY STUFF!” wrh.com. Note how the m$m tries to continually fool us. Then again, most are sheeples, so what can we expect?

4Closureg8 – Probably not! And this. This is why the US is sinking so quickly, and why most will not even know what hit them.

4:39 clip “Banks Tumble As Next Collapse Begins – Foreclosuregate”.

Scary Stuff from the G&M, of all places.

Monsanto takes one on the chin. But — Mad Soy Disease? This is another Monsanto screw-up.

Train Crash Fairly accurate.

More than one in ten mortgages is in bad trouble, and one in four underwater. Is it almost time for a new FF, like the one today?

James Cameron makes great movies and dumb statements. “Looks like Jimmy-boy got suckered into investing a ton of money in Al Gore’s carbon-credit brokerage, and the early snows are bringing a frosty chill to his financial aspirations!” wrh.com.

Smart New hidden missile system from Russia.

5:05 clip “In Fascist America, the laws crush down small businesses that might be “inconvenient” to the large corporations!” wrh.com.

Armed Guards “Note that this is the same state whose governor has vetoed waivers for care of the developmentally disabled:

http://www.rawstory.com/rs/2010/10/indiana-tells-parents-drop-disabled-kids-shelters/

“Indiana’s budget crunch has become so severe that some state workers have suggested leaving severely disabled people at homeless shelters if they can’t be cared for at home, parents and advocates said.”

One has to wonder, at the end of the day, just what form American anger will take in retaliation at what has been done to them and their families, courtesy of a thoroughly corrupt, tone-deaf, money-addicted government and the corporations they slavishly serve and protect (like BP, for instance).” wrh.com.
Whistleblower — M.Law “The precedent of this trial is very disturbing for a number of reasons, chief among them is its taking place in a military tribunal, and not in a court of law, where the standards for evidence are far more stringent.” wrh.com.

Five Dangers to global food crops, reducing supply. Food Crisis of 2011, foreclosures, bankruptcies and others. It began just after dubya was falsely re-elected.

Obviously. Both had a major role in developing this downturn.

China is leaving the US in the dust.

#205 Moneta on 10.29.10 at 8:00 pm

50 is the new 30, people are healthy, living longer etc.. and many dont know what to do with themselves once they hit 65 so they keep grinding on. For some folks work is about as much social as it is financial.
———–
There’s a cancer epidemic in the over 50. There’s an alzheimer epidemic in the over 50.

40% of 50+ are FORCED into early retirement.

I think there’s going to be a huge divide between the plan and reality.

#206 S.B. on 10.29.10 at 8:05 pm

Garth could name his next book Squirrelnomics: how to build a nest egg (and line it with soft down).

Err, scratch that last item.

If that Westjet pilot were a gambler he could have bought Air Canada stock for close to a buck this year, now it’s closer to $4, for a 300% return :twisted:

#207 Moneta on 10.29.10 at 8:07 pm

I am truly staggered by the malice and sense of entitlement that I read here.
——
Why are you so surprised? Many people here are just as greedy as the over extended spendthrifts if not worse… They expect or intend to make money off a greater fool and they thrive on that hope.

#208 realpaul on 10.29.10 at 8:20 pm

#194 LL…you want me to apologize for investing my kids money successfully? Heres the secret for anyone starting today….

1) get it in gear on the first day you can… go directly to a trusted financial advisor ( or in my case be an educated analyst and do your own DD) and open up a trading ( self directed ) account.

2) maximize your contributions every chance you get

3) don’t be conservative when you’re young

4) think years ahead and invest directly in specific sub sectors that have the potential to expediate your financial goals.

5) turn off the TV and listen to no one except yourself and/or your advisor

6) stay on track….the beta is erratic with growth oriented issues…thats why you make the big bucks…don’t get scared off.

7) Don’t get sucked into buying a new truck or vacation home with your long term savings ( my banker friends tell me this happens all the time at the $7000 dollar level…..people suddenly get truck fever and think that juniors last math grade four math test was reason enough to conclude he’ll never go to post secondary education.

* * I have written nine books ( 4 fiction and 4 text) but I don’t flog my wares at my hosts house party nor do I seek your business or intend to give any finance or trading advice.

#209 tkid on 10.29.10 at 8:24 pm

If you think we have the money to buy your McMansion, and pay for both your health care and the infrastructure you’ve spent the last 30 years neglecting, you’re sadly delusional.

Word!

This needs to be printed on t-shirts and distributed to the masses as a public service.

#210 S.B. on 10.29.10 at 8:25 pm

Here’s an example of our tax dollars not at work:

A local Toronto community group wishes to hold a BBQ.

But first, they must pay $2500 to the police protection racket, and before that it was $1000 in legal graft to city hall.

http://tinyurl.com/23c9swf

That sad part is, unlike in most other countries around the world we are unable to pay cash bribes and lower the costs.

Rural populations are dwindling, we are being herded into high density camp…err I mean condo towers in the city where we are fleeced by condo fees/taxes/land transfer tax x2/plastic bag fee/parking tickets/higher car insurance

It’s graft cash-flow heaven for the various rackets: insurance, police, city hall, power generation, parking tickets, permits.

#211 Devil's Advocate on 10.29.10 at 10:20 pm

#201 robert james

I won’t tell anyone. ;-)

But to maintain your cover you really should refrain from commenting on that which you tell us you don’t read.

#212 Taxpayer like everyone else on 10.29.10 at 11:07 pm

209 Rpaul – I think LL had the same reaction as I did to this particular line in your post

“The accounts are generating thousands of dollars a day.”

Your claiming several hundred thousand a year returns from a limited contribution plan? Seems, well, unlikely.
Can you show approx numbers? Just the contribution,
and rough annual return if you please. Thanks.

#213 DaBull on 10.29.10 at 11:17 pm

#179 Bailing in BC

Then…

I guess that leaves 0% of Alberta boomers with mortgages and no extra cash reserves

No it means 60% of Albertan’s have their cash reserves in the Orange Guy’s shorts makin’ a zero return when inflation is factor in. The smart 40% are using their equity in their property to return 10% and using their cash reserves to return a 10+% return and paying less tax than the 60%. Simple enough for ya.

I think your ducks you have lined up have stayed to long in the tailing pond. Not thinking to clearly anymore.

#214 DaBull on 10.29.10 at 11:37 pm

#179 Bailing in BC on 10.29.10 at 5:59 pm

Not only is life sunshine and lollipops, it appears to be very black and white.

#153 Bailing in BC on 10.28.10 at 7:49 pm

#130 RICHARD LICKER

May I call you Dick?

The main point I got from that article is that 40% of Alberta Boomers are screwed. Did you read it different?

Your comment from the last thread. Talk about calling the kettle black. I guess it’s ok for you to make shit up in techno-color and that you assume is right, but when I make up shit in black and white, it’s automatically wrong. Gotta love you wanna be bears, that don’t understand shit. At least try and be a critical thinker once in your life, instead of following the herd (ie. Garth’s herd).

#215 betamax on 10.30.10 at 12:18 am

#206 Moneta: “40% of 50+ are FORCED into early retirement….I think there’s going to be a huge divide between the plan and reality.”

Well said. I read it is 40% of 60+ are forced into early retirement, but the outcome is the same.

#216 Taxpayer like everyone else on 10.30.10 at 12:22 am

Rpaul – re-read your post and found the 26% p/a but
couldnt find an online calculator that could handle that
(they stop at 20%!). Can you link me one?

And $5K yearly contribution limit per kid right?

#217 badmother on 10.30.10 at 9:39 am

For all those that feel disgusted by this guy’s lack of savings and sense, consider the fact he’s taxed way too much giving him 40% less than 165k not to mention he has likely only made that amount the past few years. It’s expensive as hell to live in the GTA. The McMansion is another story. Those soulless homes are drains on the landscape and pocketbook.

#218 Cookie Monster on 10.30.10 at 10:49 am

Garth, you’re definitely right about the housing bubble but selling out of housing and putting one’s cash into a balanced portfolio at age 50 lets say, you’re recommending 50% into bonds (FIAT based investments) and jumping out of the frying pan into the fire.

Check out Peter Schiff’s latest book “How an economy grows and why it crashes” to better understand money and his “Crashproof 2.0″ is excellent too.

Money must have four characteristics to function effectively as a means of monetary exchange:
1) store of value (recognized medium of exchange0
2) fungible (mixable, sameness)
3) scarce (not easily found or created)
4) unit of account (measurable)
Gold and silver have all these qualities, therefore have long been used as money and will one day again soon after the experiment in FIAT ends badly.

I say recognize this reality and adjust your outlook and investment advice to your fans to suit, I’m certain you are doing yourself and your followers a huge disservice otherwise.

More bullion stupidity. Someone at age 50 going 50% into metals is 100% a gambler. — Garth

#219 S.B. on 10.30.10 at 11:35 am

I used to live (rent) in Lesliville and know it well. It used to be the “Poor man’s Beaches” but now it’s undergoing Gentrification.

Still plenty of addicts and streetwalkers on the streets at all times of the day. People openly urinating on the front lawns of $450/k semis, street walkers baring it all on Queen E. during the night. Seen it all myself. Oh, and your car’s contents and anything they can pry off your house/property is the #1 source of the addicts’ income. A nice symbiotic relationship between have & have nots.
Dealers openly deal drugs in all local parks.

Do like living in narrow, cramped, musty-basement 80 year old semi houses, bought for 450k? This is your little piece of heaven on Earth, then.

Leslieville R/E trends for Sept:

http://www.leslievillepost.com/2010/10/17/sept-2010-leslieville-real-estate-trends/

Today they have rent vs. own charts listed on the main page, very interesting:

http://www.leslievillepost.com/

#220 Cookie Monster on 10.30.10 at 11:44 am

Garth, I’m not a gold bug, I’m an electrical engineer and have all my money in a different investment, but if I had a traditional portfolio I would be heavily weighted in precious metals, energy and mining.

#221 Cookie Monster on 10.30.10 at 12:31 pm

How can you call recognition of precious metals as a store of value stupidity? The alternative is to recognize currency, which is a money substitute, as a store of value. A money substitute who’s quantity is controlled by central banking, government whimsy and fractional reserve based private banks, there is literally no limit to the amount of currency that can be created out of thin air in our current system today. A housing bubble would not have been possible to blow to the size we now have without a credit expansionary money substitute.

A strong ego and self confidence is good for sure but it must be tempered with some humility and an open mind. There are a lot of strong arguments I’ve seen on this blog over the last few months on the virtues of precious metals as money and I constantly see each and every time you knocking them. I respectfully guarantee to you that your views are wrong on this one.

They are not. Gold has a role to play in portfolios (as I have written often), but to be overweight in this is to court disappointment. Gold is not money and never will be. — Garth

#222 Steven Rowlandson on 10.30.10 at 1:33 pm

BTW, I’m starting a Boomer Relief Fund. Are you in?

No Garth I am not in! The senior boomers set in motion a situation that has and continues to financially bugger those born after the late 1950s. I for one don’t mind seeing them boomers suffer. Infact I would like to see the world as we know it suffer and or get put out of business for a while. Sort of a reality check if you like with a bit of revenge thrown in for good measure. Mean and nasty critter aren’t I ?

Steven

#223 Steven Rowlandson on 10.30.10 at 1:56 pm

They are not. Gold has a role to play in portfolios (as I have written often), but to be overweight in this is to court disappointment. Gold is not money and never will be. — Garth

Garth are you afraid of gold and silver being money?
Do you have something to lose if gold or silver were money?
Do you think the world would end if gold or silver were officially declared to be money?

The way things are today Garth is quite simple to understand. There is an officially sanctioned scam in operation and it was instituted by governments and banks so that they could do as they please with out any real restraint and with out making any real payments for anything. The fake monopoly money has come to be considered real money. Do you find it hard to believe that you have been intellectually and financially diddled by the powers that be Garth? Is that why you insist that gold is not and never will be money?
Why not come clean and boldly state and believe the truth? Gold and Silver is real money.
Honest Garth it won’t hurt.

If you don’t believe me then listen to Eric Sprott
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/10/30_Eric_Sprott.html

Steven

I think you are diddlee. — Garth

#224 Cookie Monster on 10.30.10 at 5:59 pm

Gold is not money and never will be. — Garth
___________________
This is the heart of where we disagree, the “concept” of money. Gold has always been money and always will be. The dollar currency is a money substitute, remember 1971 before Nixon nixed the gold exchange at what $34 or $42 dollars per ounce. The dollar note was currency redeemable in gold, backed by gold, the gold was the actual money, the currency we representative.

I’m not a gold bug, but the word money represents a concept and gold is fits that concept hence gold is money. You’ll see!

Money is a medium of exchange. Gold fails. — Garth

#225 Mel in Victoria... on 10.30.10 at 7:09 pm

Say Garth………..what year is that Olds 88? Is it in nice condition? Know what they’re asking for it? Thanks buddy………

#226 bcweatherman on 10.30.10 at 9:35 pm

“I have not seen any evidence that the younger generation is any different. People who have a workplace pension or could have one either don’t participate, don’t want one or just don’t care. It isn’t until they hit their late 40′s or 50′s that they think perhaps they should start saving. They regret their earlier apathy, blame others and realize it’s probably too late for them. ” JMan you are right on the money. For the most part I’m not seeing too much evidence of saving, on the part of the younger crowd or caring about the ongoing environmental damage us boomers are accused of…. they mostly seem to want to drive to work and have a house in the burbs….