The curse

If you’re a mother-in-law, don’t read this. You’re the enemy. Or a helicopter father. Buzz off. The last people who should be giving financial advice are Boomers.

This blog posting may be my last. I expect to be beaten to death with soggy Depends on the way to the Hummer outside my Toronto office Wednesday morning. Some will seek to finish me off with half-sucked oxygen canisters, while others aim the pointy ends of their walkers at my orifices. Fluids will flow.

But some things must be said. Most Boomers have seriously screwed up their financial lives, and seem determined to bring their adult children down with them into house-horny hell. Just in time for the official end of the Canadian real estate bubble – that giant gush from the throbbing property gasbag – rivers of bad advice are flowing through the lives of their offspring. Call it what it is. Child abuse.

Here’s Josef, in Etobicoke. After chaining his wife to an iPad cruelly bookmarked to this blog, she finally relented, and they listed the house two months ago.

“After about 4 weeks of random showings, open houses, constant questions about adding a separate entrance to the basement and zero offers, I finally got the call.  By dumb luck, I got two offers in one day, which sparked a bit of a sellers edge that got us a full listing price of $540k (bought for $330k just 8 years ago).  Our closing date is March 30th and we already found a rental house in Oakville.  My wife couldn’t be happier, as it is a much nicer area to raise our kids with endless parks and walking trails.”

Isn’t that beautiful? They get a nicer house, with the $525,000 cleared from the sale generating enough cash flow to pay the $2,250 monthly rent. Live for free. No property tax. No debt. No stuff to fix. No exposure to a wobbly market. Freedom, mobility – and half a million in the bank. All the stuff Boomer parents apparently hate.

“They practically disowned me for making such a `stupid` decision and `ruining the future of my kids`; can’t help to laugh at that.  Just to feed your twisted humour Garth, these are some of the quotes from my dad.  Feel free to use them, I’m sure he won’t mind.  “You will end up with no money and no house in few years”, “People line up all night to buy new houses (Mississauga) for over $700k”, “I’ll buy your house for $540k right now”, “Renting is like throwing money in the dirt”, and my favourite (can’t believe he actually used that), “Canada is different…”.  Needless to say, I stopped arguing with him.”

I wish these were the rantings of a single demented father. But it seems real estate DNA was somehow smuggled into the toke pipes and reefers of an entire generation.

Phil in Edmonton tells me that he and Barb were ecstatic when, after six months and 47 showings, they finally got an offer on their townhouse. “Then she mentioned to her mom (damn MIL’s), about about our plan to sit out of the housing market and invest our $250,000 for a few years until prices come back to earth.”

And what happened, Phil?

“Her mom lost it on her.”

And Janine in Calgary (with her new husband) just doesn’t want to buy a house, especially since she’s exiting med school with $234,000 in student debt. “Until I found your pathetic blog it seemed so wrong to be flying in the face of conventional wisdom by not buying a house, especially when all of our peers are buying and all my husband’s relatives were telling us to.

“But I need harder numbers to throw at my in-laws when they try to convince us that Calgary prices are reasonable (“…since we have oil here, we’re different!”) and bug us incessantly that if we don’t buy now, we’ll be shut out of the market. Regardless, we’re not going to buy until prices deflate somewhat and we have 20% down, but how do I prove them wrong and deal with it, Garth?”

Janine, babe, many ways. Lose their number. Move to a real city, like Toronto. Threaten never to do surgery on them. Change your email addy. But whatever you do, don’t argue. It’s pointless. Boomers are as open to change as Syria.

Like Oliver’s mom.

“She just purchased a 400k bungalow in Oakville,” he says. “She hasn’t sold her McMansion yet (and still owes about 250k on the mortgage).  Did I mention she’s 65 and retiring?

“She doesn’t seem to think there’s anything wrong with a) buying a new house before having sold the first one, or b) taking less time to decide on buying this house than she did deciding what plays she wanted to see for her yearly Mirvish Productions Theatre Package.

“Honestly, Garth, I’m frustrated.  I have been reading your blog, and spreading the word, but even my mother won’t believe me.”

Of course not. Especially mom. So stop trying. Just be thankful she has not infected you. And I sure hope she has a pile of money somewhere to finance the next two and a half decades of her life – because that $400,000 bung could languish for years, costing her while paying nothing. In fact, this is the Boomer curse – house lust. It’s been known to eclipse even the feelings cougars have for Bon Jovi.

I’m here to tell you there is no cure. It will be there until the last key is pried from their cold, dead fingers. Then, ye shall be free.

239 comments ↓

#1 v on 02.28.12 at 9:54 pm

First|!!!

#2 TurnerNation on 02.28.12 at 9:54 pm

I’m a Tinfoiler Lite

#3 Randy on 02.28.12 at 9:54 pm

Should have worn Depens !!!

#4 Fourth on 02.28.12 at 9:57 pm

Fourth!

#5 Joy on 02.28.12 at 10:00 pm

Please don’t paint all mothers-in-law with the same broad brush. Not all or I would even say most MIL’s are guilty of giving this flawed advice. I follow your posts regularly and share with my adult children and others of their generation your knowledge and insights.

Mothers-in-law have a hard enough time without being slammed in yet another forum. Just sayin’, Garth. There’s gotta be another way to get your important message across. Thanks.

Yesterday, the doomers. Today, the MILs. I’m finished. — Garth

#6 TurnerNation on 02.28.12 at 10:01 pm

Is than an aged-enhanced picture of Shirley Cooter??

Did her house sell, I wonder? This blog has an unhealthy obsession of her. ;-)

#7 Min in Mission on 02.28.12 at 10:04 pm

Hey, Calgary seemed like a nice enough town, when I was there last. Around 1975.

Garth, you are correct. It is genetic. It has been bred into every Canadian since the end of WW II. I tend to believe that it is unavoidable.

I can understand the math/numbers, but, for some reason I tend to feel more comfortable when “owning” as opposed to “renting”.

However, I only have a few thousand left on the mortgage. Unfortunately, CIL (http://en.wikipedia.org/wiki/Canadian_Industries_Limited) doesn’t have enough explosives to get “Awesome Lady” out of our home!! And I am glad about that!!

#8 zman on 02.28.12 at 10:05 pm

i hope you are right that there will be a correction soon……i am in the same boat with in laws telling me that i must buy and that real estate always goes up even though they have gone through real estate crashes of the past but this time there is no crash they say….its different here….the world wants to live here they say….

#9 36Drew on 02.28.12 at 10:06 pm

You should see the denial in the local forum here (Castanet).

What did one person say?

“You can work at MacDonald’s and still afford this.” (referencing a $295,000 mortgage).

http://forums.castanet.net/viewtopic.php?f=23&t=38597&start=30#p1190518

#10 Paolo on 02.28.12 at 10:06 pm

Timely, I just came from a dinner with my parent’s and heard many of the same nonsense from my 81 1/2 year old father (who btw was always very conservative and is enjoying a great retirement with a surplus of money along with my 81 1/2 year old mother). He never put 5% down on a cash back mortgage which became 100% financing over 40 years, you see.

My Dad sees all the building around the GTA as proof things are good. He doesn’t understand that much is based on mountains of debt most won’t be able to pay. His argument is that if there was no building, things would be worse. Well you would think…

After all, people line up all night long in the GTA only to spend $700,000 on a cookie cutter home in the far reaches of suburbia…

I hear gasoline will be $1.50 a litre very soon. Perfect.

Train wreck has already begun…and everyday it picks up momentum.

I’ll spare you what my colleagues at work think about Canada, RE Values, our banks, how it’s different here, etc… You get the picture. I’ll spare you because it hurts my head when I try to process…

#11 Uh Oh Canada on 02.28.12 at 10:12 pm

Very entertaining Garth. In defense of the boomers, I must say the parents on both sides encourage us to put a minimum 20% down if not more. Both sides did it that way and worked hard to pay off the mortgage even when interest rates were high. Both inlaws and parents have over one million net worth and yet haven’t lent us a penny to buy a house. And yes, we still rent and save.

#12 T.O. Bubble Boy on 02.28.12 at 10:12 pm

It’s not just boomers – the believe that real estate is the only investment worth owning is deeply engrained in the belief system of many cultures: witness the lineups (phony or not) for those $700k Richmond Hill houses, or all of the ridiculous people loading up on “investment condos” in downtown Toronto.

#13 T.O. Bubble Boy on 02.28.12 at 10:14 pm

Oh – and on the topic of in-laws, mine decided to email my wife a link to a “rent vs. buy” online calculator last week!

(we didn’t tell them that renting easily won)

#14 Van guy on 02.28.12 at 10:14 pm

Eaglebay-fartsville

So your kids fly in from Montreal or Atlanta to examine you for your erectile difficulties?

#15 dad on 02.28.12 at 10:15 pm

Ahh the last gasp.

Who mourns for Adonais?

#16 Smoking Man on 02.28.12 at 10:17 pm

PHD Paul Piff said The Wealthy More Likely to Lie, Cheat: Researchers
That’s why there wealthy, Idiot (SM)
I broke a rib laughing so hard today, this PHD Paul Piff in a Bloomberg story attempted to say that people become pricks when they become wealthy and that this aggressive self centeredness is caused by the money.

What a dumb stupid propeller head.

Had the guy ever been in the real world rather than spending his life in the obedience industrial complex he would know the Wealth is a bi product of being a prick, and not the other way around.

For a laugh enjoy the read.
http://www.bloomberg.com/news/2012-02-27/wealthier-people-more-likely-than-poorer-to-lie-or-cheat-researchers-find.html

He used the word behavior 8 times consequences once. Typical

Am I getting throw to anyone yet…………..

#17 Blacksheep on 02.28.12 at 10:17 pm

DA # 254,

“Gee Garth the Pups and Poodles appear none to pleased with the moderately optimistic tone of this most recent blog topic.”

“Like bashing your head against a brick wall isn’t it?”
————————————————-

DA, you and Garth should know buy now, the Dogs
are independent, critical thinkers. Your BS may sell someplace else, but the collective here, sees right through it. That’s why you waste so much energy
here, bickering.

We aren’t Borg.

take care,
Blacksheep

#18 AForOttawa on 02.28.12 at 10:20 pm

Boomer parents like these are my best argument for a 50% estate tax.

#19 Daren on 02.28.12 at 10:31 pm

Hey Garth,

Keep up the good work. It is important to hear contrasting and educated views on society and the economy. Especially, when the media prints half truths, or no truth at all. We all have our biases. But, if we were only entitled to here one perspective. Well, we might as well live in China were they don’t have the same privilege.

#20 Ozy - Boooobers - SOS brothers on 02.28.12 at 10:33 pm

Wake up before falling asleep at the wheel of life:

http://www.marketwatch.com/story/city-by-city-breakdown-of-latest-housing-data-2012-02-28

#21 Ozy - Boooobers - SOS brothers on 02.28.12 at 10:35 pm

The booobers say RE always rise, because they hope to cash in, little devious innocent devils you!

#22 Hardassi on 02.28.12 at 10:37 pm

Not all boomers are as demented as you portray. However many are. Far too many.
Re Calgary real estate – when folks comment that ‘it’s different here’ I remind them of the late 70s, early 80’s boom and the 82/83 bust – not a decline. A cliff. Many lost everything. It took 20 years ’til the late 20th for house prices to recover (not counting mtce, carrying costs, taxes, insurance, etc., let alone inflation and lost opportunity cost for investment income) Sure house prices have soared in the early 21st. But it looks like a long way down from here. I’m glad I cashed out there, years ago.
Not renting, but only 30% of wealth in RE, the rest invested. Happy boomer.

#23 Bill Gable on 02.28.12 at 10:41 pm

Anecdotal stories from the left coast. Walking in DT core, I am seeing mushrooming store closures.

I walked through Pacific Centre and yes, there were people around, but the store clerks, except at the Apple store, were standing around or dusting the mouldy goods.

A condo that has been for sale for over 2 years, sold, this past few days. People moving out….I couldn’t resist…” congrats on the sale” – the young guy was smiling but didn’t look really happy…then he volunteered… ” that’s our first and last condo, man, I feel lucky to have dumped it…the stress has been too much.” “Well, now a new chapter, good luck”, I said.
He looked like a guy who had just been realesed from prison.
The same block there are 4 places for sale. Incredibly, there is an application to build a monster condo development, I wonder what the developers are thinking.

Ozzie Jurock, local RE pumper came out and admitted that Condo/hotel mixes don’t work. (Fractional ownership) – “Not one of these models have made investors money in Vancouver, not one”.

#24 Dave on 02.28.12 at 10:41 pm

My boomer parents must be the exception. They think that there will be a correction and agree with my decision to sell last year. They were mortgage free and sold last year as well. They now have a whack of money properly invested and rent a beautiful home in Kelowna.

#25 Sgip on 02.28.12 at 10:46 pm

Wow and i thought Steve Harper,s make up was atrocious.
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http://www.thestar.com/news/canada/article/826997–stephen-harper
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#26 Thomas on 02.28.12 at 10:51 pm

Nothing goes up forever. With 70% owning homes and a large percentage priced out or holding out, who is buying? I see for sale signs that are fading they have been up so long. People will understand the dangers of a highly leveraged, illiquid asset soon enough.

#27 Habbit on 02.28.12 at 10:51 pm

My MIA was a gem. Was never in a straightjacket. Not all boomers have most of their equity in their home. I do hope prices correct so our young folk can buy and not get hung. Sad for those that have their eggs…but will be good for those that have saved and waited.

#28 Mean Gene on 02.28.12 at 10:53 pm

Brain washed baby boomers counting their days until retirement, nice.

#29 TurnerNation on 02.28.12 at 10:58 pm

Is today’s protagonist, Josef, also the sometimes “First!” antagonist?

And then we cheeched! “Dave’s not here man”.

Anyway, it’s Fun fun fun till daddy takes the T-bird away.

Lennon said it best: Everbody’s smoking, but no one’s setting high. Strange days indeed.

Here’s hoping this weary weblog will post a Comma Use 101 entry.

#30 This is Wonderland on 02.28.12 at 10:59 pm

Bang on post tonight Garth…..

Again you may want to start looking into hiring a body guard. Maybe one who knows how to disarm someone with a walker.

#31 Freedom first on 02.28.12 at 10:59 pm

It has always blown my mind that the working poor think nothing of borrowing huge sums of money to buy one asset, and meanwhile, have no other asset, no emergency fund, and live payday to payday, hoping to someday pay off a mortgage. All the while everything is riding on having an uninterrupted income for this time period. And to top it off, figure, at the same time, “let’s have kids”. I was just reading that in the U.S. today, approx. 50% of children live in poverty. This thinking is insane. I just don’t understand?

#32 Smoking Man on 02.28.12 at 11:00 pm

I am a boomer I failed your generation,

I let the tearchers turn out young men into you into feminzid wynee little girls.

Today ladies seem tougher, but iy’s just the men vanished,

Sorry kids

#33 Jennifer on 02.28.12 at 11:07 pm

Just in time for the official end of the Canadian real estate bubble – that giant gush from the throbbing property gasbag… You just know how to make a girls day Garth! I can always count on you to perk me up!!! Keep it coming! I am on the edge of my seat in Kelowna, listings off the charts people jumping off MLS over to Okhomesellers and back, relisting with different angled pics oh brother I am glad not to be a seller. So curious to see how it all unfolds this spring!! Thanks again for your poetic words!!

#34 OneMoreThing on 02.28.12 at 11:07 pm

There are few Boomers that dont think one!

Yup all zapped by the cheap money gun years ago.

Fixated by the false economy and money printing for the last 30 years.

Even my father at 85 says it was time to sell last Fall in Burlington but having a house paid off since 1957 can I really make a case for it other than he’s aging and thoughts of a retirment community are just only beginning now.

Sell and rent in that retirement community!

Renting is a beautiful thing but completely misunderstood and unacceptable in Canada. It automatically assumes you have no money, poverty line stuff!

Get ready for a gradual shift to liquidity, lowered Nortel expectations and a slow melt to making rental acceptable, all the way to making it trendy in 2015.

That’s when I’ll dive back in, location for rentals, huge yields, if the tax man does completely run-a-muck!

#35 Lee on 02.28.12 at 11:10 pm

My mom politely asks me about buying a place every once and a while. She also listens carefully to my reasons not to.

She has a hard time explaining it to her friends when they ask why her son doesn’t buy a place, but is happy she gets to come along on a few vacations a year.

#36 Radek on 02.28.12 at 11:10 pm

Another great post Garth. I was reading this with my wife and couldn’t help but laugh at the truth of it. My father is very much of the same mind as Josef’s.

#37 Stinky the Fish on 02.28.12 at 11:11 pm

I eat boomers for breakfast

#38 shanks on 02.28.12 at 11:15 pm

you eat breakfast?

#39 earlymidlifecrisis on 02.28.12 at 11:16 pm

RIP Jim Green. We lost a great citizen, politician, and activist today. :’-(

http://www2.macleans.ca/2012/02/28/jim-green-the-best-mayor-vancouver-never-had-dies-at-68

Will the following have any effect on our housing?

http://blogs.wsj.com/chinarealtime/2012/02/29/china-watch-minimum-wage-hike-bubble-trouble-an-iphone-stove/?fb_action_ids=10151333492590015&fb_action_types=news.reads&fb_source=other_multiline

#40 throwstone on 02.28.12 at 11:18 pm

Yep them boomers…there funny…

Just because their live’s are ending doesn’t mean the world is.

#41 lookoutbelow on 02.28.12 at 11:21 pm

Macleans cover story is right on.

If the market crashes in Vancouver and Toronto, as is likely with every day that passes, both Carney and Flaherty will have to take full responsibility for the disaster. CMHC will be quickly bankrupt (since they have a mere $12B in cash to cover a mortgage portfolio of over $600B.

I can see it, the ever faithful Canadian Taxpayer will be asked to ride in to save the banks and CMHC. That will the Canadian Bailout. But isn’t the Taxpayer already loaded up to his eyeballs with DEBT ?

I like these guys, I mean Carney and Flaherty who CREATE the problem with extended periods of almost zero interest rates and a ZERO downpayment with a 40 year mortgage to buy a house.

Then, a couple of years later, go on MSM, looking awfully wise and prudent, to warn Canadians of taking on too much DEBT. That was the behaviour THEY CREATED DELIBERATELY.

WHO ARE THEY KIDDING ? A Canadian Housing crash is not going to look good on Mr. Carney’s resume, especially now that he is the Big Chief at the Financial Stability Board for the G20. GOD SAVE US !

#42 bubble head on 02.28.12 at 11:22 pm

Sounds like they greater benefited from buying a home and making 200K in 8 years.

They cleared 525K?? How? No sales commission, they paid off their mortgage in full?

#43 Furst on 02.28.12 at 11:23 pm

You know what’s amazing about this blog? Yes, Garth is a pretty smart dude but more importantly, I’m always FURST……not including the posts before me. Read it and weep babbaaay.

#44 meggie on 02.28.12 at 11:30 pm

Good grief Garth
Oxygen tanks and canes?
Us boomers are 48-66 years old. Lol

#45 fiendish Thingy on 02.28.12 at 11:31 pm

This is one Boomer who got out of RE nearly two years ago and wouldn’t dream of pressuring my adult kids to buy RE.

#46 I'm stupid on 02.28.12 at 11:33 pm

Some are to lazy to take good advise.

I forward a link to your post regarding using rrsps to split income to my brother. Showed him how to be mortgage free in 5 years at the ripe old age of 36 did he listen no. My brother has a CA doing his taxes, I asked him to verify everything I told him. Did he? Absolutey not even when I explained he would save 30k in taxes this year including having his wife qualify for all the wonderful tax breaks. He can’t be bothered. It really grinds my gears rrsp season is now over and he’s on vacation.

#47 Snowboid on 02.28.12 at 11:35 pm

#24 Dave on 02.28.12 at 10:41 pm…

Son? How long have you been on this blog?

#48 Sebee on 02.28.12 at 11:36 pm

Am I alone in suspecting that this whole bubble is just an easy simple way for people to pull nice fraud on CMHC? I mean – if all I have is cash in my matress what is my risk if I will have to walk away? And how hard is it for 5 friends with cash in matress to get together and flip houses without an agent and thus fees at inflated prices to each other if no fools offer to buy? Or for immigrants with no assets at risk to make this house flipping act their income? The more I think about it the more I suspect that’s exactly what is likely taking place in a large segment that is big enough to show up on stats. End goal here – to leave CMHC holding the bag woth no personal risk. Why would government allow it? Maybe they see it as a tax rebate to stimulate consumption and prop up employment and GDP. And the MILs – they are just cought in it like those fools at 4 AM in front of a WalMart on Black Friday on CNN.

#49 backwardsevolution on 02.28.12 at 11:40 pm

“When New York State officials agreed to allow local governments to use an unusual borrowing plan to put off a portion of their pension obligations, fiscal watchdogs scoffed at the arrangement, calling it irresponsible and unwise.

And now, their fears are being realized: cities throughout the state, wealthy towns such as Southampton and East Hampton, counties like Nassau and Suffolk, and other public employers like the Westchester Medical Center and the New York Public Library are all managing their rising pension bills by borrowing from the very same $140 billion pension fund to which they owe money.”

http://www.nytimes.com/2012/02/28/nyregion/to-pay-new-york-pension-fund-cities-borrow-from-it-first.html?_r=4&hp

#50 Ron on 02.28.12 at 11:45 pm

Teachers in BC want a 15% raise. And summers off. Public (and private) sector unions are completely out of touch.

If you don’t like the terms of your employment, there is a simple solution…quit. Try it in the private sector. If you’re as valuable as you think you are, you’ll get hired.

The sense of entitlement in our society, especially in the public sector, is disgusting.

Ron

#51 Retired Boomer - WI on 02.29.12 at 12:08 am

Boy, we Boomers are taking it in the shorts today. Also the moms-in-law. Any good boomer MAN has found the ways to shut-up the MIL’s, and his own parents.

We BOOMERS brought you young turds things like the anti-war consciousness, liberal thinking (not necessarily Liberal Politics), great Dope, the BEST Rock N Roll ever produced. We paid for your asses, some of you were educated in schools, the smart ones were educated by life.

Some, who were lucky to chose a wonderful mate 40 years ago are still with that great mate who helped us develop our lives together. This means, our family, our wealth, and growing together, not apart over the ages. Yeah, we are sagging, and wrinkly but look at the dam clock, 29 doubled +++.
No, I won’t apologize to anyone for the lives we have lived including the STUPID TAXES we have paid over the years.

Our kid has been educated on the street, that’s why he is functioning normal today. He does NOT own a house, has no car payment, and an ok bankroll. He is not as material oriented as the old man, but I find security in paid off things, and investments. Sorry, Character flaw I guess, deal with it. I don’t want to HAVE count on the government for my sustenance in old age if I can help it.

Thank You Garth for your sage ideas over the years, they fit both sides of the 49th.

So, I’m enjoying the snot out of retirement so far!!

#52 Jek on 02.29.12 at 12:08 am

From my father in law (on the cusp of boomerhood)…

“You don’t need savings when you have a house. Your house IS your savings.”

#53 a prairie dawg on 02.29.12 at 12:11 am

Isn’t one of the reasons you move away from your parents, so that you don’t have to listen to how they’d do everything if they were you?

You’re an adult now…
http://www.youtube.com/watch?v=pSDF8VvU13M

#54 Sebee on 02.29.12 at 12:15 am

#41 lookoutbelow

That same story ran in Mclean’s exactly year ago. This has been in the media for a while. But it has changed little on the ground. They seem to run it every few months.

At the end of the day a house is a thing you buy. It is amazing that people seem to spend more time picking a laptop than buying a house. Sorry, I don’t buy anything under pressure. Gold more expensive than platinum? Stainless more expensive than both (you know what I mean). Thanks, no thanks. I wasn’t born yesterday.

#55 Rich Renter on 02.29.12 at 12:21 am

My Mum told me 2 years ago that i was stupid and wasting my money on rent. At that time she was working for bank and over in Canada on holidays from Ireland.
Today she’s out of a job and house prices have dropped 48% since their peak in 2007.
I told her Canada will soon follow Irelands housing demise.

#56 BCBOUND on 02.29.12 at 12:23 am

I usually read your blog and ignore all of the comments. The last few days I have read through most of them..Ouch! I do not think your readers understand how hard it is to produce daily material in such an entertaining fashion. Furthermore, most seem to take the entertainment side of it WAY too seriously. Great information.Today it’s a mother-in-law or helicopter father, tomorrow it could be the “Vampire Realtors”
(ready to suck your life savings dry) Keep the characters rolling… Captivating

#57 Canadian Watchdog on 02.29.12 at 12:47 am

#41 lookoutbelow

They didn’t create anything. We are the problem.

#58 Vanijin on 02.29.12 at 12:49 am

#16 Smoking Man

” PHD Paul Piff said The Wealthy More Likely to Lie, Cheat: Researchers
That’s why they’re wealthy,…”

Yes, those “researchers” spent a lot time/money to discover what is actually is a truism and self-evident

#59 Peter Pan on 02.29.12 at 12:51 am

From today’s Business Insider…

Money Advice I Wish My Friends Never Gave Me

Please see last slide:

Investing in real estate is easy (and lucrative)

http://www.businessinsider.com/the-money-advice-i-wish-my-friends-never-gave-me-2012-2

#60 ANONYMOUS on 02.29.12 at 12:59 am

Garth, here’s the way I see it:

They bought $330,000 8 years ago, so they probably had about 10% down, just enough to cover closing costs / legal costs / etc. and they had to borrow the whole $330,000 from the bank. Since then they have paid only probably $30,0000 off the principal of it, still owing $300,000 to the bank.

Now they sold it for $540,000, minus the 7% commission, and fees, they should be left with $490,000 after the sale.

So $490,000 minus $300,000 still owing = net amount of $160,000 in the bank.

At current savings rates on bonds of about 2%, they are earning about $3,200 per year off their investments, or about $270 per month. I would exactly call that enough to cover their $2,250 monthly rent, don’t you think?

#61 Waterloo Resident on 02.29.12 at 1:08 am

yes, gas is already $1.31 a litre, I see it hitting $1.50 by summer. But whenever I talk to anyone about it they don’t want to stop driving their SUVs, they say that they are too comfortable with luxury, they don’t want to do ‘without’.

So unless someone puts a bullet to their head, this real estate boom is going to keep coninuing for the forseeable future.

#62 HeyYou on 02.29.12 at 1:10 am

I’m so glad we’re renters. We’re waiting for the bubble to burst and then we’ll have our choice of bargains, much better than anything we could afford now.

#63 terces on 02.29.12 at 1:13 am

You know what I find interesting from #20 – Ozy’s post?

That prices for Dallas are down 1.3% last year and 10% from the peak, and

Denver is down .4% last year and 10% from the peak.

I know that Texas has much tougher mortgage requirements, I don’t know about Colorado.

What I do know is these two cities have a lot of similarities to Calgary.

I have been sitting on the sidelines watching the Calgary market drift sideways for almost 3 years, and I am not about to buy back in right now because I do see possiblilities of a much lower oil price.

But in 3 years of drifting sideways, inflation has helped to bring the price of real estate in Calgary a little closer to reality. I really wonder if there is going to be any kind of a crash in Calgary – perhaps this is the community that will experience the 10 to 15% softening??

Any thoughts?

#64 Burnt Norton on 02.29.12 at 1:18 am

#32 Smoking Man on 02.28.12 at 11:00 pm

Against my better judgement, I will bite.

What a freakin’ dumb comment. Blame boomers and teachers because you’re disappointed with how you choose to stereotype other men? Project much? Talk about pathetic…

#65 Van guy on 02.29.12 at 1:23 am

#50 Ron on 02.28.12 at 11:45 pm

——————————————

You’re an idiot for that statement. Classrooms are now packed and schools don’t have enough $. Frikkin Gordon Campbell can host an Olympics but save no frikkin $ for education. The next generation will be stupid. And spend some frikkin $ on health care. On Sunday at VGH, my friend that works there said they were short 33 nurses! 33 nurses frikkin run a hospital in a smaller city!! Im glad i make a good chunk of my money tax free. Averaged $60k for the last 5 years on pokerstars.

#66 YLTNboomerang on 02.29.12 at 1:48 am

I sold right before the 2008 bust, a bit early on hindsight but I never believed the Canadian government would drop rates prior to an implosion and blow the bubble up higher. Anyway, my boomer folks have been very concerned about my financial future and decisions ever since. They think the $500K in rsp’s and savings are going to disappear with inflation and that I’ll never be able to buy/afford a home now that I got out of the market. The problem is that I live in Vancouver and my folks bought in 1965 and kept renovating and upgrading, it worked for them as they got in when prices were cheap. Their house is paid off and easily over a million at current market values (should only be 500k with the Vancouver premium IMO) so they feel wealthy.

I’ve given up arguing and defending myself. Every time they bring it up I offer to make a 50K bet that prices will be lower next year and guess what, they never take the bet! I’ve left a post dated cheque for them and said I won’t cancel the check if prices are up YOY in 2013.

#67 Mainlander on 02.29.12 at 1:53 am

Expert investors lose often. The problem right now is that just about everyone is en expert investor, the rising tide has lifted all the boats but tides also pull back and it will expose those swimming without their shorts. You can’t swing a dead cat in Vancouver without hitting an expert investor that knows everything about real estate investing. No logic, just pure euphoria and a proven track record of absolute gains. This won’t last, never does.
I have lived long enough to know that not everybody can make money doing the exact same thing. I think the ride down will be 1% loss per month for the next two years. What the bubble giveth, the bubble taketh away.

#68 ZRH2YVR on 02.29.12 at 1:55 am

#10 – – – Gas is $1.50 a litre here in Vancouver.

Garth – great post – it was well timed because in my situation, boomer parents just listed their house at ground-zero of the Vancouver bubble (2 calls in 20 days no offers – asking price is at current market).

I have a sibling who lives outside the province. While I was busy working in early 2008 (thus not paying close enough attention), the sibling decided to buy an apartment. I just somehow missed it – and it all happened so fast. I had a great talk with my boomer parents and during the conversation, it came out that it was my siblings MIL that really was the driving force for my sibling to buy the condo in 2008.

Now – 4 years later – Said sibling wants to sell to move back to Vancouver. In doing so – is pretty much setup to lose $50K on the condo purchased in 2008 after all costs. Get this – – Sibling wants to buy again – believes that rent is throwing away money (ok – so losing $50 was not???) – Boomer parents on both sides are encouraging it and even trying to fund it – even though my boomer parents are the funders of the $50K loss. The MIL basically is in a fairly well off family that made lots of purchases in Okanagan in 80’s / 90’s. Not a bad move and it worked well for them. However – we are at the top of a bubble – how can people not see that?

If my sibling buys again (and if my boomer parents fund this transaction – again . . . ) my move out of this town is definitely sealed . . . . it’s done – I’m outta here. The whole country is messed up.

Now that I’ve ranted – looking forward to the Vancouver stats in a couple of days. They’re not great . . . .

#69 ms bboomer on 02.29.12 at 2:02 am

MIL @ 60yr, paid off mortgage @ 27yr, no debt since. 30% in R/E now. 3 adult children with professional careers who rent indefinitely, each with investments started. In ‘the old days’ we wanted to pay off our mortgage; a HELOC was unheard of, a lot of us boomers would never think of using our house as leverage to borrow more money! That is crazy!Hopefully our kids learned by our example.

#70 Poorgoisie on 02.29.12 at 2:05 am

Those teacher’s in BC have a crappy union Ron #50. They are making 50-80k in the land of 600k basement suites. Unions gave the US workers the buying power to make that country the most prosperous in the world, not only did they produce, they had the ability to buy. Now those whose sole purpose in life is to generate profit are shooting themselves in the foot. Who will buy their wares the slave laborers over there or the unemployed over here? Stop looking beside and below you for the cause of our problems, tilt your your head upward because the culprits are there. The trouble is most of us spend a lifetime kissing arse trying to be like them, that we start believing that educating our young is only worth one tenth of a basement.
Damn it feels good to be a teamster

#71 Public Servant on 02.29.12 at 2:14 am

#50 Ron

Teachers deserve their pay, summers off, and at least a 15% raise over three years considering inflation. Try teaching 30 kids,some with special needs, and then come back and talk about entitlement. I think people in the public who think everyone should get cheap public services and pay little tax have a disgusting sense of entitlement.

#72 muzza on 02.29.12 at 2:15 am

Lol, that’s awesome, best yet Garth; not only do I read your pathetic blog for the good advice but you also make me laugh out loud. Cheers ! ps keep an eye out for the flying depends, ew !

#73 lookoutbelow on 02.29.12 at 2:31 am

#50 Ron

Read your posting about the BC Teachers wanting a pay raise.

It was quite articulate although a little crass. Still you must have had a good teacher when you went to School, ‘cos I didn’t see any spelling mistakes.

By your words, I can only imagine that you have do not have an appreciationof the total set of responsibilities that our Teachers carry out each day, in and out of School.

#74 Oceanside on 02.29.12 at 2:39 am

#44 meggie on 02.28.12 at 11:30 pm
Good grief Garth
Oxygen tanks and canes?
Us boomers are 48-66 years old. Lol
———————————————————————–
No worries, Garth’s a Boomer and the 20 or so people I know are all Boomers except 1 35 year old. We are (hopefully) the ones that have looked after our finances and have our housing situations in order.

#75 Oceanside on 02.29.12 at 2:45 am

Oops…..#60, I meant the 20 or so ‘readers of this blog’ that I know are Boomers.

#76 TRT on 02.29.12 at 2:48 am

Base British Columbia Annual MSP Premiums on Age!!!! Every year for the foreseeable future, Health care costs in BC will be funded in part by increases in MSP premiums.

Why should a 20 year old pay the same as a 60 year old?? The 60 year old, on average, uses the system much more. Everyone paying the same means that it becomes a form of “REGRESSIVE TAXATION” on the young.

Isn’t that fair boomers?

That is just one aspect, among many, that it will not end well for boomers.

#77 Sgip on 02.29.12 at 3:19 am

Re #50 Ron on 02.28.12 at 11:45 pm

.

Ron and harper.s war on good middle class jobs is almost complete
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Azz

Teachers rcGods

Ur a dog
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.

#78 Lee on 02.29.12 at 4:02 am

#5 Joy “Mothers-in-law have a hard enough time without being slammed in yet another forum. Just sayin’, Garth. There’s gotta be another way to get your important message across. Thanks.”

‘Yesterday, the doomers. Today, the MILs. I’m finished. — Garth’

Suggestion for the next update’s title, “Everyone can suck it.” Unless there are people who think that might be a bit too hard on everyone.

#79 doc on 02.29.12 at 4:05 am

Garth You need some time with the amazons. Be gentle with them. You’re such a studly boomer with unnaturally colored and plentiful hair. Perhaps you have a painting of yourself somewhere that is getting jowly, wrinkly, balding and flaky. You need to get in touch with your inner boomer before it’s too late. Embrace us. Don’t mind the gas. Some of us are happy, have the big fortuna, and enjoy a wee dram. I know you’re one of us . I couldn’t manage the amazons like you brother, but beach girl sounds hot. Let us continue the group. It’s educational, therapeutic, slightly erotic and there’s never anything on TV.

#80 Lo on 02.29.12 at 5:54 am

I’m so so so happy to have found this blog, and have been devouring every post for the past 48 hours. I am originally from Toronto, but have been living (renting!) in the Netherlands for the past 6 years. I don’t know the exact statistics, but here, a substantial percentage of the population rents, and there is no stigma that goes along with that. My Dutch husband and I are moving back to Toronto this summer, and are under so much pressure from Canadian friends and family to buy something ASAP or we ‘risk getting shut out of the market.’ I’ve also gotten the, ‘things are different here’ line when I’ve tried to explain what an awesome quality of life we have had while renting. I know that we will be judged/scorned/pitied etc. when we don’t buy something in Toronto, but your blog has given me the confidence I need to just ignore everyone! Thanks, Garth!

#81 gtrz4peace on 02.29.12 at 6:35 am

To Ron #50 —

You think teachers are “overpaid”? And the teachers teaching your kids who are off on summer vacation should NOT have summers off? Perhaps that should be true of your children also — no summer breaks for anyone! Stop whining, elementary kids — cause who needs vacation or down time!

Try being a teacher, see how much they really make. See how hard they work with ever-diminished resources. And see how “overpaid” you feel.

History lesson: There would be no weekends, no minimum wage, and your kids would be working in a mine if it weren’t for unions.

Yet, you gladly reap the hard-fought-for gains of unions (like the weekend) while decrying them.

Your sense of entitlement, sitting in your home or office enjoying a salary that is ONLY possible because unions fought for decent wages, is disgusting.

#82 John on 02.29.12 at 6:53 am

Ha ha…nice writing. Here in Chile, over the weekend, a friend of mine bought a condo at the top of the market. I sent 4 common sense e-mails to him, since he had shown me where it will be built…and the numbers. It’s bad…really bad. But not as bad as Canada.

He had all the information. And then bought anyway. 30 year mortgage. He has three properties. This one costs him 50% of his salary to carry.

We human beings are denial organisms. The boomer deal is very ugly. The problem is that the people who get out need the boomers and the people that follow their advice to prop up the system.

Could a mass wipeout of tax slaves and debt-mongers threaten the scheme? Anyway, the first thing to do when in a burning building is leave the building. And the boomers say…”fire, what fire?”

#83 Steven Rowlandson on 02.29.12 at 7:08 am

If you don’t like real estate prices and those fanatical boomer real estate value worshippers then don’t buy the product. If you don’t like getting screwed over by them make a 5 or 10 cent on the dollar take it or leave it offer. Young people and the houseless have no obligation to get financially buggered by boomers, realtors and banksters and their insane real estate prices. Real estate prices have been insane and out of line since the 1970s and their collapse is over due.

#84 Pat on 02.29.12 at 7:36 am

”You will end up with no money and no house in few years”

There’s a chance he might turn out right on this one.

#85 Pr on 02.29.12 at 7:56 am

Our government (CHMC) is now asking for a 5% cash down. Interestingly our banks are giving 5% cash discount for 5 years closed mortgages.

Our government (CHMC) is now asking the borrowers to qualify on 5 years interest rates. The same government, using our BoC, is buying back is own bonds in order to reduce the rates on the 5 years bonds. Those bonds are used to fix interest rates for mortgages.

Everything is double talk. Especially Carney.

Canadian watch your six!

#86 detalumis on 02.29.12 at 8:36 am

The only thing I can say is that kids actually don’t like growing up in Oakville, it’s boring. The first thing they do is high-tail it back to T.O. and they are the ones that buy those downtown condos. Really if you want your kids to be happier and more independent you should have stayed in your Etobicoke house. I also have no clue what kind of a bungalow you can buy for 400K here like the MIL did, maybe in some pocket “north” of the QEW. Here in the south a rundown unliveable bungalow goes for well over 500, it’s called land value. If you are buying for appreciation you must stay in the south.

#87 House on 02.29.12 at 8:38 am

Anti-American? There are lies, damn lies and then statistics. Yesterday the Shiller report was down again and during goods purchases declined. Yes the USA is getting better? I have a suggestion they should put everyone listed as unemployed on the food stamp list and then there would be no unemployment and things would look great.
It was reported yesterday that David Dunning completed a study that showed incompetent people don’t know they are incompetent. Thus they believe they have done well on a test which they failed. I now have a new understanding of the thinking of Stevie, Jim and Mark.

#88 Nemesis on 02.29.12 at 8:52 am

I couldn’t help but notice a sauve, familiar visage peeping out from the sidebar on this morning’s online G&M Investor…

Apropos… your teaser was appended to a lifestyles feature/review of “Cabane à Sucre Au Pied de Cochon”…

Which, not surprisingly – apparently includes a recipe for SquirrelSushi.

Personally, I think they’re much better grilled…

But the real question?… Is a GT LeaderTeaser embedded within a serious review of SquirrelSushi a leading or a lagging indicator?

#89 Arse on 02.29.12 at 9:11 am

Do not worry about Garth getting whacked by a boomer, because his Amazons will protect him, like the female bodyguards of Muammar Gadaffi.

#90 Elle on 02.29.12 at 9:14 am

I taught ESL in the French public school system in Quebec for years. In my last gig, I was the sole English teacher for an entire elementary school of almost 450 young students.

I was responsible for communicating with parents and issuing 4 report cards per child every academic year. Yes, think about that for a moment. Do you have any idea how time-consuming and difficult it is simply to learn the names and faces of that many students, let along evaluate them?

I had to draw up lesson plans for grades 1-6, and I had to do this with a budget of $130 for the whole year. With this amount, I was expected to supply my classroom with chalk, pens, paper, decorations and small gifts to motivate students. There were a total of 6 English-French dictionaries in the classroom. Students were not expected to supply their own (principal said we could not ask parents to buy them as they were too pricey), and the school library didn’t possess one English-language book. So much for Gatineau being a progressive and bilingual region!

I had to be in the classroom by 7:30 am at the latest (the morning bell rang at 7:50 am, so I arrived by 7 am), and I was rarely out the door before 4 pm. Every night, I had marking, planning and organizing to do. Regularly, I had to phone parents and answer emails from them. Other teachers know that this work runs into and through the weekend, as well.

On parent-teacher nights, I was required to stay very late (up to 9 pm), after a full day of teaching and field questions from parents. I had a few friendly ones come in and compliment me, but for the most part, I had belligerent parents come in and bark their prescribed orders at me as if they were my boss. One angry father made a point of telling me that he was a lawyer right off the bat as an intimidation tactic. He then advised me to just shut my classroom door, ignore the curriculum and just teach in French to make it easier on his two sons and all the other students who “hated English class”. In other words, flaunt the rules and just make the students’ lives easier.

Other parents with separatist leanings frothed at the mouth and told me that English was a waste of time. They never needed it and look at how successfully they turned out! Naturally, they told their kids the same thing at home.

Oh, and forget your own memories of what it was like in school as a child. The world is a completely different place today, and kids are not like the kids were back in the 70s and earlier. Young kids today talk back constantly. They talk when they should be listening. They cut you off mid-sentence and swear at you. They flip the bird. They throw desks and chairs when having tantrums and/or they haven’t taken their medication. Medication, by the way, which I am expected to help administer. I am a teacher, not a nurse. Nevertheless, I am responsible for this.

Students today also carry cell phones and iPods and woe the adult who tries to make them put them away or -gasp!- take the devices away from them during class. (Even if one manages to, the parents often call and complain despite there being a school ban on such devices.)

I have been bitten, scratched and shoved.

Detention is a thing of the past because students must catch the bus home at the end of the day.

Three days a week, I didn’t get a mid-morning coffee break because I had recess duty. I bent the rules and stopped in the washroom on the way out which officially cut into my time in the school yard, but by 10 am, my bladder couldn’t hold out any longer.

Also, three times a week, I ate lunch at my desk and allowed students who were interested in English to drop in for extra help or to make up missed assignments.

Unlike private sector employees, teachers don’t have a water cooler or a coffee maker dispensing free drinks. Teachers pool their money to buy such items. Even our Christmas party was self-funded, and there are no end-of-year bonuses.

Oh, and for all this I was paid a princely sum of $100/day, net. That’s right. $2K a month, after taxes. That was my 2007 salary.

So, the next time you open your mouth to complain about teachers, try working as one for a month. Heck, try it for a full week, and then see if you still think we are overpaid for what we do.

#91 Elle on 02.29.12 at 9:16 am

Sorry for the typos. Caught them a wee bit too late.

#92 Beach Girl on 02.29.12 at 9:18 am

#79 doc

I couldn’t manage the amazons like you brother, but beach girl sounds hot. Let us continue the group. It’s educational, therapeutic, slightly erotic and there’s never anything on TV.

Thanks.

I remember when my 2 idiots were in grade school. Those insufferable parent meetings. Lost it on one. If he isn’t getting it, what are you doing here? This is your job.

Anyway, they both passed, don’t disappoint Mommy. She is already there. Grown up now.

Sliding into my size 26 jeans and hittin the chicken wing bar tonight.

#93 Grantmi on 02.29.12 at 9:18 am

#39 earlymidlifecrisis on 02.28.12 at 11:16 pm
RIP Jim Green. We lost a great citizen, politician, and activist today. :’-(

He was a draft dodging windbag! Good riddance. (however… My sympathies to his family)

#94 Grantmi on 02.29.12 at 9:26 am

Why should a 20 year old pay the same as a 60 year old?? The 60 year old, on average, uses the system much more. Everyone paying the same means that it becomes a form of “REGRESSIVE TAXATION” on the young

Never happen. Boomers vote… 20 year olds don’t !!!!

Why should a 20-year-old with 5% down get the same mortgage rate as a 50-year-old with 80% equity? Count your blessings, kid. — Garth

#95 househornyhousewife on 02.29.12 at 9:40 am

OK Garth, I feel obliged to step in here (and I am definitely NOT a wrinkly boomer .. although I’m getting there).

Young kids fresh out of school with student debt to pay off should definitely not indenture themselves with huge fresh debt, granted.

Thirty and forty somethings with no retirement nest egg to speak of who own a house with a mortgage and have other financial responsibilities such as children or elderly parents whom they are supporting, should definitely consider selling now while the market is getting lukewarm and going colder. This will enable them to a) undo their original error of buying a property in the first place (when they are unable to pay off the mortgage AND put money aside for retirement at the same time) and b) cash in while they can in order to start a nest egg for the future which should be their top priority (hopefully this will not be eaten by the offspring, all depends). Most definitely I agree with this too.

HOWEVER, to imply that EVERYONE should not buy a house ANYWHERE and that ANYONE who currently owns should get out and get out now is quite frankly presumptious to say the least. Each situation is different and there are actually some boomers who own a home and have sufficient funds for retirement as well (my and my husband’s parents, just to name a couple of close examples). Many of these people prefer to own rather than to rent and I agree with their reasons.

In addition, not all of us live in Vancouver or Toronto (yes Canada is actually bigger than these two cities .. really) so there are still many real estate markets that are NOT in a bubble where you can actually buy a nice house for $200,000.00 (or even less). In these markets, $700,000.00 will buy you a beautifully built mansion on a two acre lot with mature trees and a pool, in a posh area within 5 minutes of all services.

In addition, some people are indeed able to own a home AND save for their retirement at the same time. Granted, most of us are found in areas outside of Vancouver and Toronto, but some people really are able to afford to own a home instead of renting.

Renting is not for everyone and some of us are willing to pay for the priviledge of ownership. Most definitely owning costs more than renting and anyone who thinks otherwise has a real problem with numbers. Anyone who thinks that owning a home with a mortgage is actually making a solid investment because all of that money will come back to them in the future when they sell is … well … I’d rather not be too insulting this fine sunny morning (yes Toronto may not be sunny today but as I said before, there are other parts to this country). There is absolutely no guarantee whatsoever that when (if) you decide to sell your home you will get even what you paid into it much less a profit on top of this. The market is the market is the market and if you plan on using your home as a long term investment and even worse, your ONLY long term investment, then you are taking a BIG HONKIN’ risk. HUGE !

If, however, you have a dream of owning a property in a specific area AND a sound opportunity comes up that fits within your budget (as has recently finally happened for me), then for heaven’s sake don’t listen to anyone (even Garth) and go for it. Just ensure that it truly does fit your budget and that you know this is not an investment but a place to live. Of course, if you live in Toronto and are thinking of paying $700,000.00 to own a 6 x 6 foot condo with a view of the brick wall of the neighbouring building then for heaven’s sake .. GET IT TOGETHER AND SMARTEN UP !

Just as I think that the in-laws should keep their opinions to themselves and allow their children to do what they think is best, I think Oliver should stay out of his mom’s affairs and simply try to support her in her decision. His mom may be downsizing to a smaller home for all we know and I am sure that she will be able to get at least the $250,000.00 to pay off her mortgage AND a 20% downpayment for the new place (if not, then I agree with Oliver). She may also have enough income to support herself AND make the necessary mortgage payments on the new place (who the hell knows .. maybe she worked for Bell Canada and retired long ago with a hefty defined benefit pension plan and her husband had a million dollar life insurance policy before he died .. a lot of these old timers retired with much better pensions than any of us could ever dream of). Oliver should simply sit down with her and ensure she knows what she is doing and that she understands and then butt out. She has a limited time on this earth and may have decided that doing something for herself is better than leaving it all to her kids (this is what I am always telling my own parents).

As for the in-laws, who the heck takes them seriously anyway ? Do you actually care what they tell you ?! Have you ever ?! All you have to do is to tell them to mind their own freaking business a few times and they will eventually leave you alone (I know this from personal experience). Then when things are working out well for you, they may even start to approach you for advice (again, personal experience).

NEVER follow anyone blindly, be it in-law boomers or someone who runs a blog on the internet (sorry Garth) or even me. Consider what is said, weigh it accordingly and then make YOUR OWN decision.

I am finding that a lot of the people who are seeking advice on this blog lack a bit of … self confidence when it comes to making such big financial decisions and I fervently hope they are not blindly following your advice, Garth. A lot of what you say is sound and fits a large portion of our population but it does not necessarily fit everyone and sometimes there are other non financial issues to take into consideration when making such important life decisions.

All the best.

HHHW

#96 Tadpole on 02.29.12 at 9:49 am

Been addicted to your blog for months ! My daughter is 24 hrs old she clears 65k a year with $4000 available to invest each month . Are there any safe , yet profitable investments out there?Re is definitely out. How about Reit’s ?

When you are 24, ‘safe’ should be relative. Why are young people so insanely conservative today? — Garth

#97 Jasonturbo on 02.29.12 at 9:49 am

94 Grantmi on 02.29.12 at 9:26 am Why should a 20 year old pay the same as a 60 year old?? The 60 year old, on average, uses the system much more. Everyone paying the same means that it becomes a form of “REGRESSIVE TAXATION” on the young

Never happen. Boomers vote… 20 year olds don’t !!!!

Easiest fix move CCP from 65 to 70, that should help balance the books, but by the time I’m ready to retire CCP age would be 87 lol. There is no easy, sensible fix.

#98 Ozy - For #52 Jek's FIL on 02.29.12 at 9:55 am

#52 Jek on 02.29.12 at 12:08 am
From my father in law (on the cusp of boomerhood)…

“You don’t need savings when you have a house. Your house IS your savings.”

=======================
Perceived Equity in a house is not Savings, this is grade 2 aritmetics man! You do not need an advanced mathematics degree to know that. In a downturn, that equity can become zero or even negative (you owe more than the house is worth). Savings is by ethimology if not by commom sense, something put aside from distructive habit of consumption. Savings can be cash, precious metals (not at current prices) and foreign basket of currencies (not USD or GPB). It can also be a mutual fund of gov or corporate kanatian bonds (not US treasuries of course, that will be gambling)

Have him read this artcile below and apologize to all his friends for previous thoughts, so he can clear his soul asap

http://www.marketwatch.com/story/city-by-city-breakdown-of-latest-housing-data-2012-02-28

#99 throwstone on 02.29.12 at 10:01 am

#90 ELLE

I will say this. QUIT.

#100 Q on 02.29.12 at 10:01 am

while I’m happily “renting and waiting”, I must admit that I do daydream once in a while…..about all those “soon to be unemployed & bankrupt, single digit, smug realtors”…trying to find a real job with no mercantable skills…. time to get in some practice with the working end of a shovel and learn to spell work ethic.

#101 disciple on 02.29.12 at 10:12 am

Elle…”I taught ESL in the French public school system in Quebec for years. In my last gig, I was the sole English teacher for an entire elementary school of almost 450 young students.”
——-
That was an interesting post. But I have to ask why you would engage in this type of self-inflicted torture? For money? Or for the love of kids? Don’t get me wrong, I believe that teachers should get whatever they want, but your first mistake was described in your opening line.

Teachers should take more of a leadership role in society and everywhere should strike to fight for a living wage, as an example for impoverished workers everywhere. Raise the bar for everyone, public AND private. Having said that, I see more Lexuses, Mercedes and BMW’s in the executive parking lot of my daughter’s high school than in a Rosedale enclave, so it seems to me that those at the top of the pyramid are not sharing…

#102 blase on 02.29.12 at 10:17 am

Elle,

Thanks for reminding me why I have no intention of going back to teaching when I return to Canada from teaching ESL abroad! So much b.s. to being a teacher these days! And you didn’t even mention all the new-age crap about a caring-nurturing-child-centered classroom, while of course you can’t ever! touch a child in any way. And, as a man, why I would choose to submit myself to the whims of a hormonally-challenged girl who can ruin my life with one accusation about me. Jesus, what a bloody can of worms it is to be a teacher these days.

#103 nnso on 02.29.12 at 10:25 am

To Elle,
I know the pain of teaching. The reason is last 100 years the teaching method remained the same. How much technological innovation get into the public education. The union does not want to replace the teachers with computers. sell the school board to Apple or IBM you will see the difference in few years. Look at the banks. How they use the technological innovation to their advantage to make profit. Teaching is a profession as old type writer, still survive because of union and our boomer politicians. by the way when you are confronted with parent declaring as lawyer, ask him to donate for smart board. It’s not your fault after all.

#104 Tripp on 02.29.12 at 10:31 am

Yet another sign of change in Globe and Mail:

http://www.theglobeandmail.com/globe-investor/personal-finance/rrsp/how-early-withdrawals-can-reduce-the-rrsp-tax-hit/article2351732/

Garth, I have the feeling you will be busy in the near future!

#105 disciple on 02.29.12 at 10:32 am

The Gates Foundation, aka the tax-exempt Gates Family Trust, is currently in the process of spending billions of dollars in the name of humanitarianism to establish a global food monopoly dominated by genetically-modified (GM) crops and seeds….

Bill Gates’ father, William H. Gates Sr., has long been involved with the eugenics group Planned Parenthood, a rebranded organization birthed out of the American Eugenics Society. In a 2003 interview with PBS’ Bill Moyers, Bill Gates admitted that his father used to be the head of Planned Parenthood, which was founded on the concept that most human beings are just “reckless breeders” and “human weeds” in need of culling.

http://www.pbs.org/now/transcript/transcript_gates.html

#106 Huuk on 02.29.12 at 10:45 am

House across the street went on sale yesterday.
I watched at least 40 couples go to check it out.
1300 sq ft 3 bedroom, just north of 401 in North York. Asking 770.
They are holding off offers until next week and will 100% get a bidding war. Demand is very high and supply is still historically low. Until interest rates go up or amortization lengths go down NOTHING will change in my neck of the woods.
You all know the crash is coming.
Its just not coming until something changes to make the monthly payments on mortgages higher. Until then, every 50k is only $200/mth (2.2% variable at 30 years)…an amount most desperate buyers can justify somehow.
The fools only look at the current monthly’s and nothing is going to change that!
Anyone thinking they can sit on the sidelines waiting in Toronto is just going to see SFH increase another 5%-15%, neighbourhood specific, like it did last year! Its awful and will be very painful one day.
Maybe 2013 will be different?

#107 disciple on 02.29.12 at 10:49 am

I don’t know why people find it so hard to believe that most celebrities or famous people have doubles, or for that matter, clones, or even further… robotoids, the technology for which was invented by the Russians. Here is an article describing one of the four known Stalin doubles:

http://www.dailymail.co.uk/news/article-559234/The-man-Stalins-body-double-finally-tells-story.html#ixzz1nl958uZi

#108 45north on 02.29.12 at 11:01 am

Elle: talking about school children in the Gatineau: They talk when they should be listening. They cut you off mid-sentence and swear at you.

my daughter had a gig in Montréal teaching lower class kids. She said that they disdained English. My guess is that this disdain is limited to the lower class because the middle and upper class figure that Québec will remain in North America.

In Karaté classes, the kids accept and respond very well to discipline. One of the most rewarding experiences of my life.

#109 maxx on 02.29.12 at 11:02 am

#9 36Drew on 02.28.12 at 10:06 pm

“You can work at MacDonald’s and still afford this.”

The classic trap of linear thinking, self-imposed by stupidly misguided house hormones. Were this victim to complete the thought, it might run like: “at least until the end of the mortgage term IF we don’t get: sick, separated or divorced, need to move, have to face unexpected expenses or lose our current non-McDonald job.

#110 Larry Fine on 02.29.12 at 11:18 am

1st off ..Great post

“Boomer curse – house lust. It’s been known to eclipse even the feelings cougars have for Bon Jovi.”

sooo true..Bravo! Lmao

#111 EdmontonJim on 02.29.12 at 11:19 am

I’m feeling pretty fortunate that my MIL is not the type you’ve described here. Then again, my in-laws may end up moving in with us in a couple of years, so there’s that.

In their defense, my inlaws are farmers, which is a culture where the oldest son constitutes the entire retirement portfolio. Unfortunatly for everyone, that plan died of cancer 7 years ago.

#112 Houman on 02.29.12 at 11:24 am

I hear all these stories that prices are going down but maybe we live in different countries.
I know for a fact that prices have gone up at least 5-10% in the past 5-6 months in certain areas such as Thornhill!

I also thought that prices would come back down but so far nothing. in my opinion the only thing that can trigger the correction would be the interest rates and we all know the rates are not going anywhere in the near future. At least in 2012…

#113 Nuke on 02.29.12 at 11:24 am

in the last 5 years, my home had all new windows, a new roof, a newly paved driveway, new patio fence, new hardwood kitchen and ceramics, a new fridge, a new stove, a new hot water heater, new ceramic bathroom and vanity, wooden floors resanded stained and finished. we have some Zipcars in our parking lot next to our enclosed park and kid’s playground.

Don’t have a clue what it is worth, but a larger house next door went for over 1mil. my home is in a townhouse complex and a restored low rise office turned housing project, and have been renting for years at about 12% of pay. pay increases has eclipsed rent increase each year, which makes sense. But if I owned the place, I would have seen my pay decrease in relative terms to the house value almost 80% over the same period ! that is just silly. Don’t see my salary going up 4times so property values are likely going to fall.

#114 MJG on 02.29.12 at 11:30 am

Not *first* by a long way but riddle me this: All the boomers sell and rent. So who buys and rents out? Who are all these landlords? Are you telling me I have to rent from some multinational conglomerate intent on RE domination? Lets hear the other half of the explanation.

Most Boomers will not sell until it’s too late, and suffer the consequences. Your argument has a flawed premise, so the words after that are wasted, but spunky. — Garth

#115 AG Sage on 02.29.12 at 11:31 am

>Freedom, mobility – and half a million in the bank. All the stuff Boomer parents apparently hate.

I always assumed this was why they were always on our backs about having kids too.

Keep torch burning, Garth.

#116 disciple on 02.29.12 at 11:32 am

What’s happening in Syria is a drug deal gone bad, and is related to the ill-fated Pan Am 103. Discover all of the characters involved below:

Lebanon’s Bekaa Valley is a fertile area ideally suited to growing Opium. Rifat Assad, the brother of Syria’s President Hafez Assad is widely known to have been in charge of Syria’s narcotics enterprise, and was the “Supremo” of the Bekaa Valley’s massive Opium industry.

El-Khassar is a Syrian drug dealer closely associated with Assad. He runs the dope through Frankfurt on into the US. Innocent Major McKee stumbled upon this CIA-protected operation and had prepared a report for the DEA and boarded the Pan Am flight 103 with his team. You know (or should know) what happened next.

Now, it would appear that this heroine pipeline operation has run its useful course and loose ends are being tied up and trimmed away… hence, “regime change”.

http://www.deepblacklies.co.uk/lockerbie_the_syrian_connection_pr.htm

#117 MoneyMyHoney on 02.29.12 at 11:33 am

“The last people who should be giving financial advice are Boomers.”

Does it include Garth Turner?

No. I ride. — Garth

#118 AG Sage on 02.29.12 at 11:41 am

>#87 House on 02.29.12 at 8:38 am

Feel better ragging on the U.S.?

Per capita GDP U.S. according to the World Bank in International Dollars: $47,184

Per capita GDP Canada, same unit of measure: $38,915

If the U.S. sucks so badly, where does that leave Canada in absolute terms?

#119 45north on 02.29.12 at 11:42 am

househornyhousewife: talking about Oliver’s mom who
just purchased a 400k bungalow in Oakville but hasn’t sold her McMansion yet (and still owes about 250k on the mortgage).

your comment: I am sure that she will be able to get at least the $250,000.00 to pay off her mortgage AND a 20% downpayment for the new place

well maybe, but watch out! If her McMansion is worth say $700,000 you would think there’s no problem. However she may end up chasing the market down. A year comes and goes and the price is reduced to $650 – from $750 and she still hasn’t sold.

Househornyhousewife, your situation is very much the same. Located deep dans les cantons de l’est, you feel far from Vancouver and Toronto, but in terms of “market mood” you may not be so isolated. My guess is that you have already felt the downturn in the US, since you are located what 100 km from NY State?

#120 Calgary's OK on 02.29.12 at 11:47 am

While it may be a bad idea to buy into real estate right now and take on a huge debt, it is equally irresponsible to go ahead and sell your primary residence with intention to “cash in” and wait for a “big crash”. That strategy leads to nothing more then broken dreams, strained relationships, and financial hardship. While it may work just fine for some people, majority will be very disappointed with the end result… Garth’s advise may work both ways; think twice before you buy a house, think four times before you sell your house. Most of the people will be extremely disappointed with the “being a renter” experience, it is not always “rainbows and lollypops” land either. But the most interesting part is going to be to try and preserve the cash in the nearly 0% interest rates environment…

#121 Oceanside on 02.29.12 at 11:49 am

#50 Ron on 02.28.12 at 11:45 pm
Teachers in BC want a 15% raise. And summers off. Public (and private) sector unions are completely out of touch.

If you don’t like the terms of your employment, there is a simple solution…quit. Try it in the private sector. If you’re as valuable as you think you are, you’ll get hired.

The sense of entitlement in our society, especially in the public sector, is disgusting.

Ron
——————————————————————–
Although I am not connected with unions, I am intelligent enough to realize that without unions there would be no middle class and, as grtz4peace pointed out, no holidays, benefits, 8 hour days and all the other perks of living in the western world. I saw a recent survey which overwhelmingly showed that teachers were the most trusted occupation and politicians the least…….I don’t know about wages, classroom sizes etc…but apparently the average teacher in Alberta earns $20,000 more than the same in BC and anybody that lives in BC will know how expensive it has become to live here. Don’t want to take “sides” on these issues, it’s just that usually most of us don’t really know what’s going on, just what we hear on Global etc….

#122 Bottoms_Up on 02.29.12 at 11:56 am

From “Ottawa Mike” May 31st 2009:

“No worries my friend, Ottawa Region will take a 15% haircut down the road estimated by 2012. Stay tuned.

I was tracking some 3500sqft 5yr built homes in Stittsville for about the past year. Most homes listed at $500K were down to $450K so that’s about 10% right there minus negotiations. These are the homes taken on by buyers 5-25 format and will likely be had for $400 or less when done.

Patience is all that is needed. You NEED TO pick up your next purchase at the bottom as RE will be at a snails pace for years to come. 2012 will be here before you know it!
———————————————————
2012 is here…..now looking for a 25% haircut? How’d those Stittsville new builds turn out for you?

#123 zeeman1 on 02.29.12 at 11:57 am

The amount of frothy kickback from Ron’s comments about teachers from teachers and civil servants on the blog today is very interesting…. Touch a nerve, did he?

All I’ll say is that when retirement benefits are factored in the average Ontario teacher makes well over 100K/year, and only needs to be at work 5 days a week for 9 months of the year. Are all you public employees aware that most of you only contribute enough to pay for about 10-15% of your total retirement costs when longevity and salary “bumping” is factored in?

#124 EdmontonJim on 02.29.12 at 11:59 am

I also worry a little about my own parents, but only a little. While they have little savings, my dad is fortunate enough to have a decent pension, and they are wise enough to have a pretty frugal lifestyle.

They have two houses, one which they live in, and one which they rent two suites out of. Their retirment plan is to sell their primary residence, live in the basement suite of the other for awhile, then sell the other house, and buy an annuity from their life insurance, to suppliment the pension. Then move into a 1 bedroom apartment close to my grandparents. When my grandparents die, move into a retirement apartment close to grandchildren where they will live for the rest of their lives.

The retirement lifestyle they have chosen means they will die with nothing, but have enough to live on for the rest of their (hopefully long) lives. I only worry about them a little, because for them, it’s not about the wealth you accumulate, it’s about the lifestyle you want to live. Also, a house is just a pile of bricks, but family makes a home. People would be wise to remember that.

#125 Mr. Gadget on 02.29.12 at 12:01 pm

87 House

The study you refer to is not new but forms the basis of what is called The Duning-Kruger Effect.

The Dunning–Kruger effect is a cognitive bias in which the unskilled suffer from illusory superiority, mistakenly rating their ability much higher than average. This bias is attributed to a metacognitive inability of the unskilled to recognize their mistakes.

Simply put, people don’t know what they don’t know.

People who live for today—-who do not understand the lessons of history AND are unable to be forward looking beyond the immediacy of the moment—–WILL, at some point, experience the consequences of their behaviors and choices.

In Real Estate terms, the “House Horny” WILL find themselves in a heap of trouble. Not IF, just WHEN. Because when conditions are measurably unsustainable, they will revert to conditions which ARE sustainable.

Always have, always will. You just have to be able to take the LONG view.

#126 };-) aka DA on 02.29.12 at 12:11 pm

#109maxx on 02.29.12 at 11:02 am
#9 36Drew on 02.28.12 at 10:06 pm

“You can work at MacDonald’s and still afford this.”

The classic trap of linear thinking, self-imposed by stupidly misguided house hormones. Were this victim to complete the thought, it might run like: “at least until the end of the mortgage term IF we don’t get: sick, separated or divorced, need to move, have to face unexpected expenses or lose our current non-McDonald job.

I can work at MacDonald’s and still afford my home because it’s bought and paid for and I have rental income. };-) LOL

#127 JIM on 02.29.12 at 12:14 pm

#63 Terces

Like you I have been watching the Calgary real estate market for the last 3 years. Mostly here in the SE – Acadian down to Bonavista. What I have seen is a very gentle downward slide.
What is interesting about the Calgary market : back in ’09 I had 3 different realestate agents tell me they were terrified that the CMHC was going to dump 500 houses in the NE (signifigant location as most Calgarians will understand) onto the market. – Funny, that never happened.
What was real interesting was 1 real estate agent telling me that 1/3 of the houses in Calgary are in some sort of default. Can anyone out there confirm or deny.

#128 Mythbuster on 02.29.12 at 12:20 pm

Garth:

“The last people who should be giving financial advice are Boomers.”

It occurred to me to ask… “Aren’t you one?”

Sorry for the inSINuation… :)

At least you could be first. — Garth

#129 Houman on 02.29.12 at 12:23 pm

#120
You are 100% correct sir. I was seriously thinking about selling my house and renting. I would have 400k in cash but there is NO safe investment out there that will give you more than 1.5% on your money.
I looked into buying a business with the money but no options there either.

I am prepared to see a 10-20 or even 30% drop but as far as I am concerned your primary resident should not be looked at as an investment. I am 30 years old maybe if I was 50 I would sell and move to Florida:)

#130 eaglebay - Parksville on 02.29.12 at 12:23 pm

#71 Public Servant on 02.29.12 at 2:14 am
and Van Guy (Mr BS)
“Teachers deserve their pay, summers off, and at least a 15% raise over three years considering inflation. Try teaching 30 kids,some with special needs, and then come back and talk about entitlement. I think people in the public who think everyone should get cheap public services and pay little tax have a disgusting sense of entitlement.”
———-
90% of teachers could not make it on their own in the private world. Who’s entitled now?
What are most teachers teaching anyway?
Kids don’t seem to know anything.

#131 eaglebay - Parksville on 02.29.12 at 12:30 pm

#76 TRT on 02.29.12 at 2:48 am
“Base British Columbia Annual MSP Premiums on Age!!!! Every year for the foreseeable future, Health care costs in BC will be funded in part by increases in MSP premiums.”
———-
Bad idea. The cost of MSP would be too high and when they can no longer afford the premiums, you pay.
Many younger people use the medical services much more than I do.
Haven’t seen a doctor in over 4 years.

#132 Sticky on 02.29.12 at 12:32 pm

#71 Public Servant

“Teachers deserve their pay, summers off, and at least a 15% raise over three years considering inflation.”

>> I dont know any in the private sector that will get or expect to get a 15% raise over the next 3 years. In fact the people I know are getting laid off or worried about getting laid off, or are “contract workers” and being pressured to lower their rates.

The public sector is so far out of wack with reality.

#133 vyw on 02.29.12 at 12:34 pm

Here are a couple of neat graphs of the US housing bubble:
http://www.jparsons.net/housingbubble/

The question is where are we (Canada) on this bubble chart. Teranet published new indices today:
http://www.housepriceindex.ca/Default.aspx

I believe that all markets will follow the pattern of Calgary and Edmonton markets, but when?

And what’s the trigger?
Interest rates? A variable rate is as low as 2.15% today.
A flood of listings? Not in Toronto.
Economy. US is picking; hopefully some coattails for Canada.
Stock market crash/bank failure. Dow/S&P/TSX are up double digits already this year.

Perhaps a price ceiling forces the market to reverse but again, it needs some kind of catalyst.

#134 eaglebay - Parksville on 02.29.12 at 12:35 pm

#77 Sgip on 02.29.12 at 3:19 am

You’re obviously one of the BC teachers.
Based on your post, you don’t have much to teach.
If you’re not happy with your entitlement, go find a job in the private sector. See how far you get.
Let me spell loser for you, B C T F.

#135 eaglebay - Parksville on 02.29.12 at 12:43 pm

#81 gtrz4peace on 02.29.12 at 6:35 am

I call bull on you.
I was in school once and saw first hand what was going on.
Don’t get upset or I’ll get my grand daughter to draw a gun for you. She’s 4 years old.

#136 eaglebay - Parksville on 02.29.12 at 12:54 pm

#81 gtrz4peace on 02.29.12 at 6:35 am

There are a few devoted and responsible teachers.
You may be one of them.
But, it appears that the bigger problems is the parents.
It’s not your job to raise their kids.

#137 Sticky on 02.29.12 at 12:56 pm

#50 Ron

I agree with you.

It seems you are getting a lot of hate. Just because the public sector feels they need more money they should get it…and if you say sorry times are tough, the private sector (that pays for public services) is not doing well and not getting raises -> well that somehow translates to teachers and all public servants are horrible!?!? Sheeh.

Im sure everyone in the private sector would LOVE a 15% raise over the next 3 years.

I like public services, but the money to pay them has to come from the private sector.

Isnt the city of Toronto in the process of laying off 1200 or so fine folks? I bet they would rather keep their jobs with a 0% raise huh?

Everybody has a story of how hard their job can be at times. If it was easy and fun they they would call it vacation, and YOU would pay to do it, rather then get paid to do it.

#138 eaglebay - Parksville on 02.29.12 at 12:57 pm

#92 Beach Girl on 02.29.12 at 9:18 am
“Sliding into my size 26 jeans and hittin the chicken wing bar tonight.”

And what do you wear above the knees?

#139 Form Man on 02.29.12 at 12:57 pm

#133 eaglebay

your posts indicate the maturity of a preschooler. Is that as far as you progressed ?

#140 VICTORIA TEA PARTY on 02.29.12 at 1:02 pm

HOW ABOUT A RESA?

That would be a Real Estate Savings Account, in converting your real estate into investments then renting your next hovel and paying for it with the subsequent dividends.

Real Estate Savings Account is pretty much what’s going on when people believe their real estate will plunge into a potentially serious market decline, to then decide to take the only appropriate response and convert assets into another form of property.

Hence, a RESA. It fits perfectly with Mr. T’s. TFSA invention.

While it is strictly “unofficial” and, therefore “market driven”, it’s also tax free, providing principal residences are involved (a caution, taxable capital gains would figure here, but so would the dividend tax credit).

I think it is a terrific idea of Garth’s, to bail from real estate and rent. It has potential major national ramifications.

A strategy, picked up by many could become the leading edge of a NEW Canadian trend: Get back to the OLD Canadian trend of living within one’s means.

Keeping debts manageable on a personal and national basis is important for us. We don’t figure much out there in the real economic world because we are so small.

But that shouldn’t matter. Sticking to one’s knitting eventually attracts foreign capital and newcomers. And that is only good for the rest of us!

I can see Mr. G’s sell-‘n’-rent idea as becoming a new National Policy (sorry Sir. John). But this NP does not have to be sanctified by government only by free Canadian citizens who decide to play individually and collectively.

MEANWHILE ON THE MARKETS

Big Ben Bernanke testifies before some Congressional commitee and the markets promptly head lower.

The main reason is his concern for the structural unemployment problem in the US and its vast number of obselete workers who’ve been jobless for so long that their skills matter not one whit.

What a tragedy.

Meanwhile the Eurocrats unleash their own QE 2 program and it promptly falls flat on Euro markets.

This market/economic situation still reminds me of the unleashing of the 1982 bull market. Problem is the underlying conditions were different THEN:

-Thatcher/Reagan ran the world;

-Paul Volker ran the Fed;

-Boomers were younger;

-Cold war was still in process;

-Iranian Revolution was young and not so dangerous;

-Debt levels were far less than they are now.

But I still think this market can turn up, but it will be another debt-induced bubble instead of one grounded on brutal US monetary (Volker) policy.

Whatever will be the outcome of this economic what-the-hell remains unanswered.

If magnificent prosperity shows up in time for the Indy 500, then all the better.

If not, then you’ve bullet-proofed you and your nearest and dearest.

Nothing wrong with that.

#141 Abitibi Doug on 02.29.12 at 1:05 pm

For people who believe in ghosts, spirits, and that kind of thing their year begins at dawn on November 1, ends at dusk on October 31, so Hallowe’en night is that unnacounted for time when the spirits can come out for all to see. Fast forward to now, which is February 29 or Leap Year Day. I think this day is some oddball unaccounted for day where I am in another dimension where the usual rules of logic and common sense don’t exist. How else could you account for the stupidity of some people I’ve read of in Garth’s posting? A prime example is:

”You will end up with no money and no house in few years”, “People line up all night to buy new houses (Mississauga) for over $700k” and so on.

In the dimension I normally live in, prices of assets DON’T go up forever and ever. Now, will March 1 bring a return to a more normal and sensible reality?

#142 Canadian Watchdog on 02.29.12 at 1:06 pm

Sometimes there are other statistical forces that give warnings to a coming crises. http://i42.tinypic.com/1ile94.png

BILD High Rise Sales http://i41.tinypic.com/34imyc8.png

#143 Alex n Calgary on 02.29.12 at 1:09 pm

I see lots of people going on about 5% down people are morons and THEY put 20% down (always happy to gloat about wealth in the greater fool comments section) and their parents did etc. In this market does it really matter if you put 20% down or 50% down, isn’t your risk still essentially the same only greater? I would imagine 5% down is an advantage at this point as if you have to walk away from your house you don’t have nearly as much exposure as 20% down. A friend of mine put 100k down on a 300k house (lived miserable in a basement for 5yrs doing nothing to save that money, how boring) isn’t his small house in the outskirts of calgary, up for a corrective loss that will wipe away his careful miserable savings if there is a 15% correction? Sigh, I have a picture of the MacLeans housing correction cover on my phone I show to people, they still say I’m an idiot, *shrug* its funny that in a law firm that deals with real estate transactions and sees so many foreclosures, they would be more intelligent then going house porn crazy.

I know one other greater fool reader who hasn’t bought a house, but I don’t know a single person, all aged 20-30’s, that’s probably like 30ppl, who haven’t bought a recent new house, oh dear….

#144 Poorgoisie on 02.29.12 at 1:18 pm

This is too funny, a 15% raise? Look at the cost of living. It seems a lot of people think RE value increases are valid while income increase are not. It’s like you don’t even want to sell your house.
If you have an undergrad a teaching degree is only 2 years away for you (or go to buffalo for one year….yeesh) go do it, stop hating.

#145 bill on 02.29.12 at 1:23 pm

Poorgoisie — 155?

#146 MoneyMyHoney on 02.29.12 at 1:24 pm

Bernanke won’t touch interest rates till 2014. So, by extension Carney is not allowed to touch it. Does anyone want to refute this logic?

There is no logic there. Canadian rates will rise in advance, for obvious reasons. — Garth

#147 JIM on 02.29.12 at 1:29 pm

#123 VYW
Interesting graph. I notice that most of the markets are cheerfully trending up up up, with 3 notable exceptions,; Calgary , Edmonton and Victoria. These 3 markets peaked in ’08 and are now flat lined.. All Garth’s kidding aside about ‘Cowtown’, could these 3 markets be the canary in the coal mine?

#148 Silver on 02.29.12 at 1:42 pm

First of all…
Public sector employee’s don’t pay tax’s…
They just recycle yours…
So what makes them think they are worth raise’s when they are not available outside…
How about they start at min. wage like everyone else…
and learn about economy off money and expectations.
no increases or adjustments till the rest of us get them…
Let them chew their bosses ( the civil servants ) a new a..hole for making unrealistic promises to them.
Stop asking me to pay for their generosity to themselves…
I hope for a long strike… that will screw up those wage increases….
Vancouver
Silver

#149 eagle eyes on 02.29.12 at 1:45 pm

#60 Anonymous

Yes, I agree. You totally make sense.

On another note, I have nothing against teachers. In fact as in all professions there are some bad apples and some good apples. But I do not agree with the fact that they have the power to hold my children hostage. It isn’t fair that they get to use children as leverage in their negotiations. That is why 70% of public do not support the BCTF at this point.

#150 Sebee on 02.29.12 at 1:48 pm

No. I ride. — Garth

I can’t help but notice you keep pointing to your motorcycle hobby regularly. Don’t take this the wrong way, but riding a heavy, sluggish, noisy Harley “lazyboy on wheels” is hardly an act of rebelion and toughness by a man of your standing.

Being good at evaluating options as you seem to be, I strongly believe you would get more joy from something topless on all fours with a wide rear end – like a Corvette Z06 convertible. With the performance of that Harley matching that of any Camry on the road today – it’s hardly worth the effort to polish the crome. Or the need to wear a helmet on top of that impressive head of hair with an itchy helmet strap over the beard.

#151 cxcroney on 02.29.12 at 1:53 pm

#129 #130 #133 eaglebay Parksville

Good morning Eaglebay.Yesterday you complained that your Kindergarten teacher couldn’t figure out what the picture you drew in class at the age 4 was all about. And so a long lifetime of teacher bashing for you. By the early hour of your last rant I believe you must be in your mid 70’s? Eary to bed and all that. And living in Oceanside?
Haven’t gone to see a doctor in over 4 years?
So you are warehoused in one of those seniors complexes so popular around that area. You get a view of the muddy flats the local realtors promote as a sandy beach across the highway. Another Albertan sucked in. However, your successful kids who never learned anything from 99% of their teachers don’t come to visit to take you out for a stroll or a push.

No wonder you are so bitter.

P.S. The doctor who make “house calls” to you complex can give you something for that.

#152 ANONYMOUS on 02.29.12 at 2:03 pm

#128:
You said that “there are NO safe investment out there that will give you more than 1.5% on your money.”

Those are ‘BOND’ funds, and if Garth is correct and interest rates will begin rising, then Bonds usually FALL in value, so you may begin LOSING 1.5% each year.

Frankly, I don’t think interest rates will EVER rise again, we will be like Japan for the next 30 years, with rates stuck at zero, and maybe, just maybe, our real estate may begin to fall like Japan’s did too, but that is anyone’s guess if it will happen or not as we have a growing population due to immigration, not a shrinking population like Japan’s.

This is nothing like Japan, and rates will certainly be rising. As for the comment about no safe investments yielding more than 1.5%, that underscores the general level of ignorance among Canadians. You can thank TNL@TB for much of that. — Garth

#153 triplenet on 02.29.12 at 2:07 pm

#90 Elle

I hear you Toots,

You should try employment as a chief surgical nurse in the OR, a daily grind much longer than you are in the classroom whether that be daily, weekly, monthly or yearly.

You could also try being a construction labourer, a roofing installer, a garbage man, a priest, flight attendant, sewer pipe/septic tank cleaner, hospital janitor or a real estate salesman.

My thoughts are that you, as a school teacher, should have not failed law school or medical school or engineering school or the sisterhood.
Look at you – you are only a school teacher.
Every body expected more of you and this is what we get.
You think you are ashamed!

#154 TS on 02.29.12 at 2:28 pm

There’s nothing wrong with home ownership if done correctly. My wife and I are in our early 30’s and have a mortgage of a $130,000 on a $300,000 house which is about 1.3 times our after tax income.

Buying real estate with 5-6 times your after tax income with 5% down is insanity. When we bought our current home, we went to the lawyer and she had never seen somebody our age put $120,000 down on a house.

It never even occured to be that my peers would be doing things differently.

You miss the point. How much money do you have in liquid assets outside the home? — Garth

#155 Devore on 02.29.12 at 2:29 pm

Psssh! Gas $1.43 in the big wet already! BPOE!

#156 John Prine on 02.29.12 at 2:30 pm

#150 cxcroney.

Pretty accurate description based on all the whining posts…My cousins husband is 78 and has pretty much the same things to say, hates everybody that was more successful than he was, complains all the time but never to his MLA’s, MP’s or anybody that is in a position of authority. Really a lot of fun at dinner……..

#157 Kits on 02.29.12 at 2:36 pm

Garth,

I trust you enjoy the finer things in life. I therefore thought I would bring the following article to your attention:

http://www.theglobeandmail.com/life/food-and-wine/trends/trends-features/squirrel-sushi-thats-a-very-very-good-meat-says-montreal-chef-picard/article2352911/

Cheers

P.S. I have stopped hyper-ventilating :)

#158 pbrasseur on 02.29.12 at 2:41 pm

Great article from MacLean’s

http://www2.macleans.ca/2012/02/28/youre-about-to-get-burned/

The Canadian economic “miracle” in buit on a growing mountain of debt which could very soon prove to be a house of cards.

#159 eaglebay - Parksville on 02.29.12 at 2:41 pm

#138 Form Man on 02.29.12 at 12:57 pm
“your posts indicate the maturity of a preschooler. Is that as far as you progressed ?”
———-
That’s what you get with our education system.
Now, be a good girl and go play with DA.

#160 AprilNewwest on 02.29.12 at 2:47 pm

#95 househorneyhousewife
I don’t think Garth has ever suggested “everyone” should sell their home. Also, Garth is well aware that everyone’s situation is different.

#161 bill on 02.29.12 at 2:48 pm

sebee
most harley riders dont buy the bikes for their performance attributes.
instead they enjoy the nostalgia of a bygone era of motorcycling in an up to date version of the older motorcycles.
if garth wished to go fast he might still stay with a harley as they enjoy one of the largest aftermarkets for performance products.

#162 When I come to this blog and it says "0 comments", I know that 25 blogdogs are typing their 1st comment on 02.29.12 at 2:50 pm

I’m here to tell you there is no cure. It will be there until the last key is pried from their cold, dead fingers. Then, ye shall be free.- Garth

cruel Garth but funny as hell !

#163 Abitibi Doug on 02.29.12 at 2:50 pm

This whole idea that the last people who should give financial advice are Boomers really surprises me. I am a Boomer, 51 years old, and in my lifetime I have seen many assets boom and bust. I saw real estate go bust in the early 1980’s and again in the 1990’s, and in the last 4 years went bust in the United States and many European countries. I remember gold prices going to $800 in 1980 (about $2000 in today’s dollars) then bust, the tech boom and bust in 2000, and have also seen many stock market corrections. How could a generation that’s seen all these events unfold first hand not believe real estate could go bust again? Maybe it’s this Leap Year Day alternate reality I described above in post #140.

#164 Form Man on 02.29.12 at 3:02 pm

#158

your admission of your lack of education explains your rage and frustration. some of us do not age well. especially those with closed, bitter minds.

#165 eaglebay - Parksville on 02.29.12 at 3:03 pm

#150 cxcroney on 02.29.12 at 1:53 pm

Wrong on all counts.
You must be a doomer.
Try using your imagination for constructive purposes.
Come visit Oceanside. Our various flower counts are on.
By the way, your reading comprehension sucks.

#166 eaglebay - Parksville on 02.29.12 at 3:13 pm

#155 John Prine on 02.29.12 at 2:30 pm

Another doomer. Talking from both side of your mouth.
I’m much younger, healthier and wealthier than you think.
Maybe a bit bored.
My mansion is on a large acreage and paid for.
So are my cars, truck and cabin cruiser.
I probably pay more in taxes in one year than you make in pretax earnings over 5 years.
Suck it up.

#167 eaglebay - Parksville on 02.29.12 at 3:15 pm

Don’t be stuck in Toronto or Vancouver.
There are lots of jobs in Canada.
One example:
http://www.vancouversun.com/Labour+shortage+Mount+Milligan+mine+pushes+development+costs/6223407/story.html)

#168 BigAl (Original) on 02.29.12 at 3:18 pm

Fundamentals are out the window now – we live in a quantum financial world now, and new quantum fundamentals should be formulated.

Markets rise on good news.
Markets rise on bad news.
Markets rise on falling oil prices.
Markets rise on rising oil prices.
Gold rises on good news.
Gold rises when the markets rise.
Bad news has always “already been factored in” so no need for a drop.
Good news has never been factored in and is cause for a rise.
Since the fall of 2008, nobody with political or financial credibility has ever said we’re in recession. But we’ve always been in a ‘recovery’.
The markets are ‘different’ from real estate. They will always rise (even without credit and income for consumers).
New accounting rules and tax breaks have had nothing to do with increased corporate profits. They’re just making money…who cares how?

The iphone will be the best selling phone product for ever and ever and market forces will never ever be able to make a better product – ever.

#169 spaceman on 02.29.12 at 3:29 pm

I just turned 50, and the house horny wife (40) with a degree in Finance just doesn’t get it. I want to exit the work force in 10 years, how am I going to do that with a debt load on my head of $450,000 ?

I had to spell it out in front of a Mortgage specialist, I need an exit strategy, rooms to rent, a property that has development potential, etc. I cannot afford to dump my RRSP’s, and 500 a month extra, into one asset, that has a 85% chance of no return on investment for 10 years. But we need a bigger house, I have 2 teenagers busting the walls down. And a decent house in Victoria is $2000 a month to rent.

#170 bill on 02.29.12 at 3:30 pm

sebee
you like vettes?
have you seen this?

http://www.youtube.com/watch?v=Ok1WUO3p1oQ

or
http://www.youtube.com/watch?v=5yKb6iSWc0k&feature=fvwrel

#171 spaceman on 02.29.12 at 3:49 pm

Since it is RRSP season, I did my taxes to find out a few things.
1. doing them online is great, you can plug in amounts into the form, and instantly find out the difference.
2. An investment of 1000 in my RRSP nets a 29% extra return ($300.00) Why not 40%? Because i am not in the 40% tax bracket like Garth.
3. If I invest that 300 into a TFSA, the non taxable growth will more than pay the tax on the RRSP when i withdraw at a lower tax bracket. Even in a higher tax bracket, it will seriously pay down the tax. (Almost tax free)

Play with your tax form, I use Ufile, CCRA has a list of sites and SW that is compatible.

#172 shanks on 02.29.12 at 3:51 pm

what makes the price of gold and silver rise and fall so dramatically over the course of a day/week?

(i know this is not in anyway a real estate question, unless of course the newest thing is houses made of gold with silver shingles. hopefully this wont get me banned:)

#173 Harlee on 02.29.12 at 3:52 pm

Word today that Davy Jones ( age 66) has died.I’m a young Boomer and have fond memories of 1968 and dancing with girls to Monkee music. But I must be getting old as I accidently posted a post on yesterday’s ‘Probably won’t end well’ (@#276)rather than this one with the picture of the scary old boomer MIL . Forgot that Garth wrote a new one. Is it the legs or the memory that goes first ?Being past a “certain age” has it’s advantages but draw-backs too. What can one say…
Elle’s post @ #90 was interesting. I have a cousin (45 years old) who is a university professor and says very similiar things about education,the students and the parents he has to deal with. I like what Harry Trueman said (paraphrased): “Folks ask me what I think of the young people these days. I go talk to them in the schools. The high school students,well they seem alright. But these university ones…I don’t know…They seem to think they know it all. And I always tell them it’s what you learn AFTER you ‘know it all’ that really counts.” You just got to love Harry…
Overall, a very good Garth article and some interesting posts today.

#174 Beach Girl on 02.29.12 at 3:56 pm

eaglebay – Parksville on 02.29.12 at 12:57 pm

#92 Beach Girl on 02.29.12 at 9:18 am
“Sliding into my size 26 jeans and hittin the chicken wing bar tonight.”

And what do you wear above the knees?

___

Your just jealous, I bet you are sturdy and wear big boy pants.

#175 mad vancouver on 02.29.12 at 4:04 pm

This can only happen in vancouver: make $90,000 for opening a can of greenish paint:
Before:
http://www.vancouverresidence.com/32588-175-e-48th-ave.html

After:
http://www.vancouverresidence.com/30351-175-e-48th-ave.html

#176 Herb on 02.29.12 at 4:12 pm

Silver,

going by what you produced in your #147, you obviously are the ass end of that famous horse.

#177 Abitibi Doug on 02.29.12 at 4:17 pm

@Eaglebay, post #166:
Sooner or later the housing bubble will burst, there will be a lot of construction trades people out of work, and that will solve this so called labour shortage. It reminds me of how Manitoba Hydro had trouble finding people who wanted to go up north to the hydroelectric plants at Gillam. In 1993 the company underwent restructuring, where many people were surplused, and like magic a lot of people appeared out of nowhere who were quite willing to go to Gillam. Even Harry Potter or his instructors at Hogwart’s School couldn’t do better than that. So for you employers looking for people in remote locations, help will be on its way!

#178 Blue Monster Lover of Cookies on 02.29.12 at 4:20 pm

#71 Public Servant on 02.29.12 at 2:14 am

#50 Ron

Teachers deserve their pay, summers off, and at least a 15% raise over three years considering inflation. Try teaching 30 kids,some with special needs, and then come back and talk about entitlement. I think people in the public who think everyone should get cheap public services and pay little tax have a disgusting sense of entitlement.

and

Poorgosie
——
Earn your money in a free market and there would be no argument, in a voluntary exchange you would be guaranteed to earn exactly what you deserve amongst competition. Great teachers and innovators would win and prosper. Dead weight losers would be culled. Costs would reflect peoples choices and values.

BUT

You work in a disconnected system where your wages and capital costs are provided to you by extortion via government forces. BIG DIFFERENCE.

#179 John Prine on 02.29.12 at 4:32 pm

165 eaglebay – Parksville on 02.29.12 at 3:13 pm
#155 John Prine on 02.29.12 at 2:30 pm

Another doomer. Talking from both side of your mouth.
I’m much younger, healthier and wealthier than you think.
Maybe a bit bored.
My mansion is on a large acreage and paid for.
So are my cars, truck and cabin cruiser.
I probably pay more in taxes in one year than you make in pretax earnings over 5 years.
Suck it up.
——————————————————————–
Pretty much says it all, doesn’t it.

#180 Elle on 02.29.12 at 4:33 pm

#152 Triplenet,

I think we’ve met before. You’re the father who’s a lawyer, aren’t you?

#181 Blue Monster Lover of Cookies on 02.29.12 at 4:34 pm

#90 Elle on 02.29.12 at 9:14 am
No wonder our public school system is so shit! You are way over worked and have no time to actually care about your ability to provide individual attention and quality product and the public has no choice but to eat the trash they’re served.

Public run ANYTHING is shit!

The reason is simple. It’s principle. Service providers and service payers must deal direct with one another in a competitive market for profit. Disconnect of the payer of services (taxpayers via government extortion) and the service providers (public entities with endless budgets and no feedback to consumer wants and needs) will ALWAYS reduce quality and increase costs and eventually stagnating into complete waste and collapse. This is where we are treading now, soon to be collapse and horrible public services disconnected from the needs and best service to society.

God damn collectivists!

#182 Gainsaywhodare on 02.29.12 at 4:36 pm

I am not going to join the argument here whether teachers deserve a x% raise or not. But I just want to point out the fact that there is a huge disconnection between what the teachers in the systems experience and what the prospective B.Ed. students are aware of. As with any career out there, Education is one of many choices people have when considering Post Secondary. Unfortunately, so many people are grossly misinformed about a teaching career. I lost count of how many times I heard something like “I want to be an elementary school teacher because the little kids are so cute.” Or why is it that B.Ed. program produces one of the largest graduation classes in most universities year after year, at the same rate that schools across the country are being shutdown?

You can’t control the higher forces to increase your pay, create jobs, build schools, straighten out the kids, subdue the parents, etc. But you can control choices you make in life. It all starts at the source of what career you choose. How can one be well informed about a teaching career? Did the teachers before you share their teaching experiences to those considering being teachers? Did they reach out and tell them of what the job entails? Did they tell you they often have to move to small towns and remote locations to get teaching jobs, uprooting their young families with them every time?

By all means, I am not saying that teaching is a bad career choice. This much I know, no job is without its own pitfalls. Be aware of the work environments you may get yourself into, and you will be less likely to make an ill-informed choice. If you choose your profession and you are miserable about it, then you either get out of it yourself or stay and have no one else to blame.

#183 Smoking Man on 02.29.12 at 4:38 pm

#90 Elle

Well that was a tear jerker, you soooo hard done by person.

Did you encourge the kids to:
Lie,
Cheat,
Pljerize
Be sneeky
take risks
give them a superiority complex.

Or where you just another idiot that swallowed the cool aid
and did the masters work by churning out more tax far slaves so people like me can take advantage of them

#184 Sebee on 02.29.12 at 4:39 pm

#160 bill
Bill, performance and Harley are two words that hardly belong together.

A motorcycle is hard to enjoy in Canada in the first place, not to mention Toronto. You have to clear the heck 100km north to get away from the traffic to get any joy. After all that effort if the goal is to vibrate your bones on a v-twin for endless hours sucking your energy dry handling a bike weight triple what the Germans, Italians or Japanese can produce, while your in dash motorcycle CD player plays Born to be Wild through high pitch cheap speakers you can hardly hear as a giant girly windscreen shields you from the scarry wind and elements and always necessary ear plugs isolate you from the wind and engine noise, then I guess you’re sold on a Harley. You ever see anyone on a fat Harley lean it into a turn? Ever see anyone on a hog take the esses hard? That’s what I thought – that’s why the whole loud Harley experience is pointless when compared to a lovely convertable. Don’t even get me started with those hard core Harley riders pulling a trailer of their crap behind them. I let that group slide only in the hope that they recently unloaded their Toronto house and are now liquid – with the trailer representing all their belongings. Motorcycle in my view should be a raw experience of man and machine connected together for purpose of achieving something which cannot be achieved in a car. I can’t see anything about cruising on a fat Hog that would not be endlessly more enjoyable without a helmet in a convertable. And if you happen to take a lady along for the ride, at least she’ll still want to be with you after you get her to your love shack up in Haliburton in the convertable. Try that on a hog and tell me how your evenings plays out.

#185 cxcroney on 02.29.12 at 4:42 pm

#164 Eaglebay.Parksville

Just commenting on what has come out of your mouth.
You say you are a little bored and you wear big boy pants.The seniors complex I live near is also well over an acre and all paid for by the company charging over $3200/month for a 2 bedroom apartment all inclusive. However, at that price you have to get to the dining room for your meals. Extra if you want them delivered. I take it from your previous comments that your wife is no longer around so it is more than likely you have a 1 bedroom unit.And with your ability to bully almost everyone you disagree with on this site as an indication,you probably have your meals delivered to your room ,as the other residents don’t want to sit with you at those big round tables three times a day.
You say you went to school once. Too bad that was the day they covered civility and respect for other people’s views. Although I have to hand it to your parents. They did a good job homeschooling you by the looks of your basic spelling and grammar skills.
Oh, by the way, it is Stop Bullying Day today in British Columbia. I will if you will.
P.S. We have been to Oceanside. Beach (muddy).Average age of residents -north of 65 and you have to drive absolutely everywhere. So look out tourists. Most of the local drivers can’t see over their steering wheels and they are in a hurry to get to the local Quality Foods to get some of those Depends for their big boy pants.

#186 Sebee on 02.29.12 at 4:44 pm

#169 bill
sebee
you like vettes?
have you seen this?
__________________________

Now that sir, is what life is about. Kiss from a lovely lady after that lap and real estate bubble be damned!

#187 Victor on 02.29.12 at 4:48 pm

Canada’s home prices drop for second straight month

Financial Post Staff Feb 29, 2012 – 9:57 AM ET

OTTAWA — Canadian housing prices were flat or falling in the last quarter of 2011, according to the Teranet-National Bank house price index released Wednesday.

Home prices fell in December by 0.2% from the previous month, the second straight monthly decline following two consecutive months of flat prices, National Bank senior economist Marc Pinsonneault wrote in his monthly report.

The index was up 6.8% from December 2010, though the year-over-year advance had slowed somewhat from the 7.1% gain posted in November.

Home prices fell in December in nearly half of the 11 markets included in the survey, including Victoria, Ottawa-Gatineau, Montreal, Toronto and Vancouver. “For Ottawa-Gatineau, Vancouver and Victoria it was the third consecutive decline, and for Toronto it was the second,” Pinsonneault said. Prices in Edmonton were flat, while prices rose in Quebec City, Winnipeg, Hamilton, Calgary and Halifax.

http://business.financialpost.com/2012/02/29/canadas-home-prices-drop-for-second-straight-month/

#188 Blue Monster Lover of Cookies on 02.29.12 at 4:52 pm

#108 45north on 02.29.12 at 11:01 am

Elle: talking about school children in the Gatineau: They talk when they should be listening. They cut you off mid-sentence and swear at you.

my daughter had a gig in Montréal teaching lower class kids. She said that they disdained English. My guess is that this disdain is limited to the lower class because the middle and upper class figure that Québec will remain in North America.
———-
It’s not just the kids or the lower class French who disdain English. I never had a problem with Quebeckers until just last month while on a trip to Cuba for a week where there were a lot of frenchies. I couldn’t believe how F’in rude they were! In Spanish speaking countries on holidays it becomes quite natural to mutter the words Ola to the locals or Hello to other tourists and time after time I would gesture an English gratuity to fellow tourists and get a dirty look. Turns out the dirty looks were because I’m English! I never experienced prejudice in my life like I did last month in Cuba from Quebecker.

The last day there, after drinking, I almost elbow dropped two French women standing in my path. I hated them!

#189 martin9999 on 02.29.12 at 4:52 pm

hei garth
so much for the gold theory eeeiiiii – gotta say you calling the right shots lately

#190 martin9999 on 02.29.12 at 4:52 pm

time for you to brag around dude

#191 Snowboid on 02.29.12 at 5:26 pm

Although this federal study is six years old, it indicates a trend that is probably worse now.

Note that the number one cause stated for bankruptcies for over 55 year olds is over-extension of credit.

Boomers beware!

http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01686.html

#192 Devore on 02.29.12 at 5:29 pm

#159 AprilNewwest

I don’t think Garth has ever suggested “everyone” should sell their home. Also, Garth is well aware that everyone’s situation is different.

What would happen if everyone sold their house and rented? I don’t know, probably the same thing if everyone retired and went to play golf. A ridiculous straw-man premise.

#193 vyw on 02.29.12 at 5:44 pm

#146 Jim,
I think that the Can chart will follow the pattern of Calgary but the question is when? Toronto certainly has another leg up and I think Vancouver too. We need to see that last speculative top ala early 1980’s in Vancouver or late 80’s in Toronto or NASDAQ spring 2000.

#194 Devore on 02.29.12 at 5:47 pm

#171 shanks

what makes the price of gold and silver rise and fall so dramatically over the course of a day/week?

Speculation, and high leverage. Unless of course you believe gold is money, in which case you need to accept that the value of money varies 2-3% on a daily basis.

#195 Alex n Calgary on 02.29.12 at 5:51 pm

Sebee, I hate loud Harley’s too, but maybe Garth has a V-Rod, not slow at all, even a slow bike is still pretty sensation oriented. Also Z06 convertible, I can’t think of someone I pity more then a car that should definitly be a hardtop and is hardcore, as a convertible, ewwwww.

2nd lawfirm today, telling people about getting kicked from my rental so they can demo it and build a brick faced particle board POS, why don’t you buy Alex they say…you can save up your downpayment, clearly something is wrong with you since you haven’t bought yet….we’re just staying out of the market for years now, too volitile I say….even the real estate lawyer who is a really good friend of mine, her eyes turn dark and she responds like I’m the biggest fool in the world :(
Damn you conservatives for enabeling all these people to go insane on credit, just so you could stay in office.

My other friend, 27yrs old, 2 kids, part time secretary, husband is flooring guy, 3rd house, acreage, all new appliances, brand new 3d TV, projector, and just got a new engagment ring as the old one wore out, drives a super duty diesel…..where does it all come from …cough cough HELOC, I want it to hit hard so I can get a house, so people can see I’m not an idiot, but really I want it soft so we all still have jobs and my friends, who were stupid, don’t lose it all :(

#196 MJG on 02.29.12 at 6:04 pm

Garth wrote: Most Boomers will not sell until it’s too late, and suffer the consequences. Your argument has a flawed premise, so the words after that are wasted, but spunky. — Garth

Me: Mr. Speaker! The Rt Hon (ok that’s wrong but you would have been a better PM than H.) member is forgetting that this is now ANSWER period! Let me adjust the question which was not so flawed as all that. Garth’s premise is that *all* boomers will eventually sell, some later some sooner and a very high percentage of them are hoping to add the proceeds of the sale to their retirement funds and are therefore “screwed”. Assuming they do this, or even if they declare bankruptcy and walk away from the mansion, all of them who do not intend to live on a small boat or the back of a car will end up renting something at some point so the question remains: who exactly are all these new landlords going to be? Any way you slice this somebody is going to be buying and renting out.

#197 Rob now in NS on 02.29.12 at 6:11 pm

Canadians should better understand the Kondratieff wave. Homes rose in value following the last 40-50 years of growth but the cycle will turn and homes will become a liability not just because of Kondratieff mind you but the economy does tend to follow his pattern. The biggest mistake the parents make is believing that what worked for them will work for their kids. It won’t.

#198 Canadian Watchdog on 02.29.12 at 6:13 pm

#192 Devore #171 shanks

You ain’t seen nothing yet. Wait until we see 10-15% prices swings like the late 70’s. You need the stomach for it.

#199 Van guy on 02.29.12 at 6:29 pm

eaglebay-fartsville

You remind me of David Pratt. I feel sorry for your kids. Grow up dude.

#200 Sebee on 02.29.12 at 6:50 pm

#193 Alex n Calgary

Alex, V-Rod? That over stretched heavy uncomfortable beast with next to no maneuverability? The one that many 125cc bikes can out handle and out perform on a timed lap?

Look, I respect Harley for manufacturing on this continent still, and for riding the American Motorcycling Experience marketing message to death. But let’s get real. It’s an inefficient, outdated, noisy, overwight, gutless, speedless, accelerationless pile of steel. Yes, even the V-Rod or Night Rod.

#201 bill on 02.29.12 at 6:50 pm

Bill, performance and Harley are two words that hardly belong together.

over all I would agree.
however if you want a 9 second bagger it is possible.[why you would want one is another question…]
for the record I like all bikes. some more than others.
bmw makes a sports bike that I thought was nice.

#202 Westernman on 02.29.12 at 7:01 pm

AForOttawa@#18,
Unbelievable! Like we don’t have enough Gov’t rules,laws,regulations and taxes already you want yet another tax and yet more Gov’t intervention in your life… some people should just NOT be allowed to vote…

#203 TRT on 02.29.12 at 7:05 pm

First it was teachers alone. Then the Liquor employees of BC joined them after threatened with privatization. Now its the Pharmacists of BC after they were asked to take a 16% pay cut.

their entry level renumeration/years of post-sec education/pay:

Port employee – 0 years – $125,000

Liquor delivery employee driving truck – 0 years – $100,000

Hospital Pharmacist – 4 years – $95,000

Teacher – 5 years – $50,000

Not favoring the teachers…they have huge issues of their own within.

Now how do i get that longshoreman job???

#204 Bench Warmer on 02.29.12 at 7:08 pm

@ Alex in Calgary
I’m with you man. 90% of people in this town live in this illusion that massive debt makes you rich and if you don’t have a debt load of five to eight hundred thousand dollars then there is something seriously wrong with you! The old P.T. Barnum, saying there is a sucker born every minute should be updated to every 20 seconds in this country.

#205 tkid on 02.29.12 at 7:08 pm

what makes the price of gold and silver rise and fall so dramatically over the course of a day/week?

Ron Paul was on US TV today waving a silver coin at Ben Bernanke, muttering about how the coin was real money, and within the hour the price of gold and silver fell.

Of course gold and silver didn’t fall in price because Ron Paul was on TV, talking to Ben Bernanke about how silver was real money, it’s just one of those coincidences.

#206 Arse on 02.29.12 at 7:12 pm

#171 shanks on 02.29.12 at 3:51 pm
what makes the price of gold and silver rise and fall so dramatically over the course of a day/week?

—————————————————————

The wil fluctuations, also referred to as high volatility, represents uncertainty or the fear of the economic conditions of the world.

#207 Arshes on 02.29.12 at 7:18 pm

#194 MJG
Assuming they do this, or even if they declare bankruptcy and walk away from the mansion, all of them who do not intend to live on a small boat or the back of a car will end up renting something at some point so the question remains: who exactly are all these new landlords going to be? Any way you slice this somebody is going to be buying and renting out.
——————————————————–
You forgot they can also go to the trailer parks, or thier childrens basements. Or subsidized government housing. Either way landlords ain’t really making money.

#208 Westernman on 02.29.12 at 7:19 pm

Beach Girl @ # 92,
Why oh why do you insist on informing us of the lurid details of your rather disgusting personal life?
NO one cares, I assure you … ( well, maybe Form Man or Herbie ).

#209 X on 02.29.12 at 7:21 pm

I find it funny for everyone that posts saying rates can’t go up because of the economy or the dollar or (insert reason), household debt levels are going to take precedence over all of those reasons.

Wow, good looking and brains:
http://www.theglobeandmail.com/globe-investor/personal-finance/rrsp/how-early-withdrawals-can-reduce-the-rrsp-tax-hit/article2351732/

#210 René Kabis on 02.29.12 at 7:22 pm

#105 disciple
#107 disciple

“Robotoids”?
Planned Parenthood a Eugenics experiment?

Wow. Better get your meds refilled, as they’re clearly wearing off.

Either that, or you’re smoking some pretty strong sh*t. Care to share? I could use a little shared delusions. Just not yours. I mean, I *am* looking to trip, but I’m not batsh*t crazy.

#211 Form Man on 02.29.12 at 7:31 pm

#200 westernman

hmmm….voter suppression……..your alias isn’t pierre poutine is it ?

#212 Spiltbongwater on 02.29.12 at 7:44 pm

Lot of efighting going on itt.

#213 Timbo on 02.29.12 at 8:03 pm

http://www.housingwire.com/article/miami-single-family-condo-listings-jump-25

“The Miami Association of Realtors said the median price of a South Florida condo jumped 36% to $122,500 in January from $90,074 a year earlier. Meanwhile, the median price on a single-family home grew 13% from $150,443 in January of last year to $170,000 last month”

watch this people because Florida is a signal and if she begins to improve pull out your wallets and run south. Just keep away from the Arizona…..

#214 Extron on 02.29.12 at 8:08 pm

Rob now in NS #195
I had forgotten all about the Kondratieff wave, thanks for reminding me.

#215 kilby on 02.29.12 at 8:12 pm

Gold dropped 6% in what? 6 hours today on news of steady growth in employment in the States. who was saying “Don’t bet against the United States” about 6 months ago???

#216 Timbo on 02.29.12 at 8:22 pm

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9114430/ECBs-Mario-Draghi-raises-the-stakes-with-trillion-euro-gamble.html

http://www.telegraph.co.uk/finance/debt-crisis-live/9112318/Debt-crisis-as-it-happened-February-29-2012.html

a half a trillion dollars…cue the pinky in the mouth and his low ball offer. ;)
http://www.youtube.com/watch?v=jTmXHvGZiSY

#217 TO Virgin Couple on 02.29.12 at 8:29 pm

I’m a bitter, hard working Toronto thirty-something who can’t afford to buy (or is too smart to buy) a $400k gut job dirt pile here in the city. The only people my age who own something were given a wad of cash by eager BOOMER parents, or they were smart enough (and had the means) to buy a condo back when they were 150k, and have since sold it at a price to some greater fool. The rest of us chumps are priced out, and fed up.

#218 Paul on 02.29.12 at 8:31 pm

Around the corner from me in Victoria. Sold in less then a week.

http://www.realtor.ca/propertyDetails.aspx?propertyId=11589623&PidKey=-357455478

#219 Deano on 02.29.12 at 8:44 pm

#177…buddy, cut with the Austrian crap. Are people so foolish that they can’t see it for the garbage it is? Free marked my behind…there is no such thing. Corporate welfare abounds. Costs are socialized and profits are privatized.

Ayn Rand pics on the ceiling above your bed?

You DO know she used medicare in her later years don’t you?

#220 SaggyBottomBoomer on 02.29.12 at 8:47 pm

#125 };-) aka DA on 02.29.12 at 12:11 pm

” I can work at MacDonald’s and still afford my home because it’s bought and paid for and I have rental income. };-) LOL”

Actually I talked to the folks at McDonalds and they all felt they wouldn’t be able to work with you.

#221 jess on 02.29.12 at 9:07 pm

… As alleged, the scheme relied on a cadre of corrupt doctors who essentially peddled their medical licenses like a corner fraudster might sell fake IDs, except those medical licenses allowed unlawful entry, not to a club or a bar, but to a multi-billion-dollar pool of insurance proceeds.”

clinic “controllers”

From at least 2007 through 2012, the No-Fault Organization has engaged in a massive and sophisticated scheme to defraud automobile insurance companies of hundreds of millions of dollars by, among other things, creating and operating medical clinics that provided unnecessary and excessive medical treatments in order to take advantage of the No-Fault Law. In order to mislead New York authorities and private insurers, the true owners of these medical clinics (“Clinic Controllers”), almost all of whom were also members and associates of a criminal organization consisting primarily of individuals of Russian descent, paid licensed medical practitioners, including doctors, to use their licenses to incorporate the professional corporations, through which the medical clinics billed the private insurers for the bogus medical treatments. These doctors effectively operated as “straw owners” of the clinics.

The Clinic Controllers paid thousands of dollars in kickbacks to runners who recruited automobile accident passengers to receive medically unnecessary treatments from the no-fault clinics. They also instructed the clinic doctors/straw owners to prescribe excessive and unwarranted referrals for various “modality treatments” for every patient they saw. The treatments included physical therapy, acupuncture, and chiropractic treatments—as many as five times per week for each—and treatments for psychology, neurology, orthopedics, and audiology. Clinic doctors also prescribed unnecessary MRI’s, x-rays, orthopedics, and medical supplies. The Clinic Controllers received thousands of dollars in kickbacks for patient referrals from the owners of the modality clinics (“Modality Controllers”), who were members and associates of the same criminal organization to which the members of the No-Fault Organization and Clinic Controllers belonged.

The Clinic Controllers also referred patients to personal injury lawyers who filed bogus lawsuits on behalf of the patients and coached them on what injuries to claim in order to get as many treatments as possible. The personal injury lawyers also paid the Clinic Controllers thousands of dollars in kickbacks for these referrals.

In order to conceal and disguise the millions of dollars in claims paid by the automobile insurance companies, the members of the No-Fault Organization laundered the money through shell companies and corrupt check-cashing services. Often, checks would be written from the No-Fault or Modality Clinics with the payee line left blank, and in amounts less than $10,000 in order to avoid potential financial institution reporting requirements and other scrutiny. The checks were then cashed through check-cashers who made the checks payable to shell companies they controlled in order to conceal the true nature and purpose of the checks. The cash was then returned to members of the No-Fault Organization to fund kickbacks and for their personal use. At other times, the members and associates of the No-Fault Organization paid themselves through their own shell companies and then used the criminal proceeds to fund expensive vacations and to purchase luxury goods.
fbi.gov.

#222 eddy on 02.29.12 at 9:14 pm

“A Canadian Housing crash is not going to look good on Mr. Carney’s resume”

Agreed, but he’s just following orders, like F and H.

Have you seen his resume? It’s just Goldman Sachs, followed by different city names. The Stank of Canada is his second employer.

http://www.abovetopsecret.com/forum/thread307008/pg1

#223 Preciousss on 02.29.12 at 9:32 pm

#192, #171

The price action has much to do with “running the stops”. This occurs in typical fashion around option expiration days and first day notice of delivery. It has great affect on margined accounts.

It is a “gut check” and a tactic used to pull contracts out of weak hands or over-leveraged hands. It is also a way to cap the price in order to prevent an upward runaway. Most of all, it is a highly profitable method for the big bank commodity trading desks and allows them to cover short positions.

I do not advise people to trade these markets unless you are a pro star whiz. I also advise that you avoid the touts of a paid gold trading service. You will get eaten alive.

Better to pay cash and pick good entry points for building a core position of physical and avert your gaze.

Same old, same old, since early 2000.

#224 Daisy Mae on 02.29.12 at 9:49 pm

#148 EAGLE EYES: “It isn’t fair that they get to use children as leverage in their negotiations. That is why 70% of public do not support the BCTF at this point.”

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

Totally agree!

#225 eaglebay - Parksville on 02.29.12 at 9:51 pm

#183 cxcroney on 02.29.12 at 4:42 pm

You sure know the gig. How can you be so familiar with it? I never saw what you describe. Learn everyday.
By the way the beaches are full of sand. Need glasses?
Oceanside, where the money is.
Older people here don’t live off credit cards and HELOC.
No mortgages and nice BMW and Mercedes. All paid for. Believe me, I know, I’m in the business.
By the way, we shop in Nanaimo and Vancover. We try to support the losers.

#226 eaglebay - Parksville on 02.29.12 at 10:00 pm

#197 Van guy on 02.29.12 at 6:29 pm
eaglebay-fartsville
“You remind me of David Pratt. I feel sorry for your kids. Grow up dude.”

Parksville over Vancouver any day.
To be politically correct, I will end my post.

#227 Roland on 02.29.12 at 10:06 pm

#50 Ron just doesn’t seem to understand how markets work.

In a market, people NEGOTIATE prices. The BC teachers are in a negotiation right now. Has Ron ever seen people negotiating in a marketplace?

In the marketplace, buyers and sellers threaten, bluster, flatter, curse and cajole. They huff and puff. They wail and tear their hair. They pretend to storm out in a rage. They slap backs and kid around. They argue. They blackmail, insult, insinuate, and slander. They shoot the breeze and talk sports for a while. Then they bitch and complain. They take hostages. They occasionally appeal to supernatural beings. They haggle.

That’s how all markets work. Why doesn’t Ron get it? Why can’t he cope?

#228 Form Man on 02.29.12 at 10:07 pm

#223 eaglebay

you are a car salesman ? that explains everything…….

#229 eaglebay - Parksville on 02.29.12 at 10:08 pm

203 tkid on 02.29.12 at 7:08 pm
“Ron Paul was on US TV today waving a silver coin at Ben Bernanke, muttering about how the coin was real money, and within the hour the price of gold and silver fell.
Of course gold and silver didn’t fall in price because Ron Paul was on TV, talking to Ben Bernanke about how silver was real money, it’s just one of those coincidences.”
———-
Magin calls is one of the reasonS gold adjusted downward today.
Wish the same would happened to mortgages and HELOC.

#230 Don on 02.29.12 at 10:08 pm

#150 cxcroney on 02.29.12 at 1:53 pm

Wrong on all counts.
You must be a doomer.
Try using your imagination for constructive purposes.
Come visit Oceanside. Our various flower counts are on.
By the way, your reading comprehension sucks.
*********************************************

Folks! I grew up 20 minutes away from eagle bay which is a former log sort crammed up the ying yang with seniors housing, you can jump roof to roof. It’s a nice place to visit and not a bad place to live. But the quality of construction in the area not so good. Inexperienced builders etc etc. Eaglebay you are never to old to grow up…Wisdom is lost on the old in your case.

#231 eaglebay - Parksville on 02.29.12 at 10:15 pm

#206 Westernman on 02.29.12 at 7:19 pm

I may agree with you on certain things but hands off Beach Girl.

#232 Daisy Mae on 02.29.12 at 10:17 pm

#167 BIG AL: “The iphone will be the best selling phone product for ever and ever and market forces will never ever be able to make a better product – ever,”

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

I love mine! I can communicate with my kids who all live out of town….whether it’s texting, chatting (WhatsApp) or using the new iMessage (iPhone to iPhone). Amazing, absolutely amazing! I have a granddaughter in Kenya right now…and I can ‘chat’ with her — free. ‘Free’ is gooood! LOL

#233 eaglebay - Parksville on 02.29.12 at 10:25 pm

#226 Form Man on 02.29.12 at 10:07 pm
#223 eaglebay
“you are a car salesman ? that explains everything…….”

Not at all. Read between the lines.
If you live in Western Canada I made money from you.
Thank you.

#234 Westernman on 02.29.12 at 10:33 pm

Eaglebay-Parksville@#229,
I can assure you Sir, I would rather immerse my privates in # 2 Kerosene and set them alight than lay a hand on beach Girl…
She’s all yours chump, and may God have mercy on your soul…

Can we watch? Bring a match, or anything? — Garth

#235 Snowboid on 02.29.12 at 10:46 pm

#211 Timbo on 02.29.12 at 8:03 pm…

“Just keep away from the Arizona…..”

Good idea, there are too many damn Canadians down here already!

#236 Poorgoisie on 02.29.12 at 10:59 pm

Oh bluie those cookies must be full of shrooms. I love hearing free market solutions, especially when half the comments on here involve millionaire Chinese. Seems to me every time govts hand the keys to the private sector the invisible hand punches us in the throat and then we pay them to do it again. Si tu n’aimes pas le francais, ne dit pas “laissez faire”.

#237 Not Wondering Anymore on 03.01.12 at 3:20 am

#225 Roland

The public purse isn’t “the market” and civil servants should not be “negotiating” terms at the expense of the taxpayer.

Ron is right – if they don’t like the terms of their employment, they should quit and negotiate in the private sector, not hold taxpayers hostage.

#238 rich on 03.01.12 at 9:32 am

love the guy at the end. as we say at work- WHO IS THIS GUY? F… is he sharp. got to keep him around. he needs a raise. Garth HIRE him

#239 Preciousss on 03.01.12 at 2:36 pm

WARNING: do not watch this clip if you believe in the truth.

http://www.youtube.com/watch?v=GOS8QgAQO-k

“The trick is not to do anything remotely truthful”
“create a new truth”
“develop a fiction”
‘the truth is against your view”
“great thing about the market is that it has nothing to do with the individual stocks”

Cramer? U serious? — Garth