No risk, no return

Yesterday some posters with more money than ingenuity asked a question: where should you park half a mill or so for two years, after selling a house? Of course they want it to be 100% liquid and accessible, in case they wake up horny for a garage in Vancouver or a former grow-op in Mississauga. They also demand safety and security, with virtually no risk, because they’re special. And, naturally, they expect a high rate of return. Guaranteed.

If those basic, simple conditions are not met, it obviously shows the financial system is corrupt, manipulated, riddled with systemic corruption and rigged in favour of banksters. Oh yeah, and this information should also be provided online, at no cost. Immediately.

Besides house lust, this nation has a withering case of financial illiteracy. If it ain’t offered to you by TNL@TB, or found within the moist reassurance of the orange guy’s shorts, then it’s suspect – some scam cooked up by Bernie Madoff’s Canadian cousin.

We’re an interesting bunch. We buy houses at inflated values with virtually nothing down, using extreme leverage and loans destined to reset at unknown higher rates. And yet we freak out when a portfolio of liquid assets temporarily falls 5%. We buy stuff shooting up in value, then dump it after it declines. It’s why there are bidding wars for Toronto real estate, when it’s never cost more. It’s why retail investors trampled each other to exit equities on March 9, 2009, when they hit bottom. At least we’re consistent.

So where to put $500,000 for two years until your spouse can’t go five more minutes without ragging you yet again to grow a set and buy a house?

You could stick it in a HISA, but this is a dumb move. High-interest savings accounts pay (even if you get some hinky online bank in Moosejaw) barely enough to cover inflation, which is 2%. And you must shoulder tax on that miserable yield, at your full marginal rate, which can suck off a third or half. That means you lose money. But at least you lose it safely.

Ditto for a money market fund. These are completely-liquid funds which invest in baskets of safe government securities, and pay even less, typically 1.5%. Also fully taxable. More secure, dependable, guaranteed losses.

There’s always a GIC, but sadly this choice also sucks. You can achieve an annual return of 2.5%, but for that you have to lock the money up for a couple of years and invest with some dingdong outfit, like AcceleRate Financial, apparently related to the gum people. Yes, this money is also taxable as interest, which means your capital will buy less when you end than when you began.

There are always bonds, and these come in many different forms. T-bills are bought at a discount to face value, then mature on a certain date at 100 cents on the dollar. But don’t expect anything more than a high-yield savings account rate. Strip bonds work similarly, since you’re buying a small piece of a larger bond from which the interest coupons have been ‘stripped’ and sold separately. So, again, you  buy an asset guaranteed to be worth more on maturity date (like me). But not much more. Worse, you have to pay tax each year on money you have not yet received.

A better choice would be preferred shares in a few banks or insurance companies. These things look and act like bonds, but pay dividends instead of interest – which means the tax bill is slashed since you can claim the dividend tax credit. While companies like the Royal Bank have common shares which fluctuate widely in value, their preferred shares barely move, steadfastly maintaining their value. Only if interest rates spike surprisingly (which will not happen in the next two years) would capital values be impacted, but the dividend yield – now at 5% or slightly above – would not. Preferred dividends must be paid before common stock dividends, and these shares are completely liquid, so long as you own creditworthy companies. Why everyone does not possess these is beyond me.

Finally, two years is a relatively long time. Given the steady but glacial improvement in the US economy, more stability in Europe, the inevitable growth in BRIC countries and the resolve of central banks, why wouldn’t you want a piece of it? Combining some preferreds, for example, with a few good ETFs giving exposure to large-cap companies in North America, plus emerging markets, plus financials and energy, plus commodities, and a few REITs tossed in, makes sense to me. Now you almost have a balanced and diversified portfolio. Your gains should be mostly in dividends and capital gains, which are taxed at a far lower rate than interest. And it’s not weird to expect a gain north of 6% – while maintaining total liquidity.

So, choices. No risk, no return. Managed risk, good return.

Or, you can buy a condo next to the CN Tower. And pray.

197 comments ↓

#1 Keeg on 04.20.12 at 9:29 pm

First!

#2 Tom on 04.20.12 at 9:35 pm

You need a glossary.

What is TNL@TB?

Orange Guy?

etc…

#3 Mark on 04.20.12 at 9:39 pm

Plus if you stick your money into the debt and equity of actual businesses, your money won’t be used by the bankers to prop up housing prices, pricing you even further out of the market.

A win-win situation for you, and for your ultimate goal of buying a house less expensively.

#4 SE Asian Expat on 04.20.12 at 9:40 pm

Entertaining and informative post, as always.

It’s like a medical specialist explaining the procedures in detail with options according to risk level… Of course you have to hire him/her to perform the operations… you wouldn’t do it yourself!

#5 Keeg on 04.20.12 at 9:41 pm

i.am.an.idiot.first

#6 Aaron - Melbourne on 04.20.12 at 9:42 pm

What to do when the sizeable tax take from property transactions looks like disappearing?

http://theage.domain.com.au/real-estate-news/property-tax-intake-hits-record-highs-despite-housing-slump-20120419-1x9cn.html

So much for Australia’s tough stance on selling to “foreigners”. The FIRB rules were instigated as nothing more than a PR stunt to deal with the xenophobia of being swamped by Asians (*TM). But just like our Negative Gearing laws, the lobbyists and self-interested piss and moan until they can gain some sort of concession or preferably a total backflip. I can hear it now – “China will save falling Australian property”.

http://www.theage.com.au/victoria/ownership-laws-tested-as-agents-target-foreigners-20120420-1xche.html

#7 Smoking Man on 04.20.12 at 9:45 pm

Nice garth

Equities are good if you now how to read batman short and long stop lose few beeps above upper ear

Preferds are good got some cause of you

But 1 therd of my loot is in short term commercial mortgages 9 precent. We bit of gold just in case

Wasted at the bar at senica casino listing to a killer blues band. The compoany I invest trow is something like romstend. Will repost link when I return to my 800 foot tinny bungalow in long brance driving home in my basic ford ranger.
Net worth low 8 figs. Go figure

#8 Montrealer on 04.20.12 at 9:45 pm

If parking money for 30+ years (locked-in), can we go 100% equity (ETFs/REITs) without bonds or commodities? Or it’s still wise to diversify for such a long period of time?

#9 gta house hunter on 04.20.12 at 10:04 pm

#2 Tom

Orange Guy Shorts is ING Direct …….Savings Account
TNL@TB…..The nice lady at the Bank

#10 Tim on 04.20.12 at 10:11 pm

I rent a two bedroom for $1500 a month in a nice neighborhood in Vancouver. What would real estate prices have to drop to in order to make financial sense to buy a two bedroom apartment? (assuming a mortgage rate of 5%)

#11 SportsFan on 04.20.12 at 10:13 pm

Are there any disadvantages of preferred shares relative to common stocks?

Don’t expect capital gains. — Garth

#12 Debtfree on 04.20.12 at 10:13 pm

What is TNL@TB? = the nice lady @ the bank.

Orange Guy? = ING bank It’s an international bank based in Holland with the highest savings rate and the best place to have your mortgage if you what to pay it off faster. They learned their lessen back in the tulip bulb bubble .The lessen that garth is trying to teach you/us before tshtf.

#13 John on 04.20.12 at 10:14 pm

“Given the steady but glacial improvement in the US economy, more stability in Europe, the inevitable growth in BRIC countries and the resolve of central banks..”

1. All are aware of the printing press being behind the glacier. With no manufacturing base, and 2016 deadline just to liquidate inventory. Let’s pretend the national debt and consumer hock isn’t there. It’s boring to hear it repeated over and over.

2. Europe is now more unstable than ever because the original problem hasn’t been looked at and is being ignored in favor of inflammatory policies.

3. BRIC countries aren’t mafia approved. Plus, transition to a real heavyweight status would be blocked by trade wars and real wars first.

4. Central banks sure do have resolve. The question is for what.

There’s no evil smoking man sitting at a table deviously planning to crush the middle class. There are centers of power and influence, all added together creating a system with surprisingly uniform characteristics. I imagine this would be what fuels conspiracy fantasies.

That said, it still is what it is. That would be a good foundation to build on.

#14 Not 1st on 04.20.12 at 10:15 pm

Speculating on a condo is using someone else’s money, while investing in equities is using your own money. Thats why people act differently. If CMHC gave everyone leveraged cash to speculate in the stock market, then people would be doing a lot more riskier things.

#15 John G. Young on 04.20.12 at 10:19 pm

Wonderful photo.

#16 TurnerNation on 04.20.12 at 10:23 pm

To the attn. of weekend prospective blog dogs.
The following user names are still available:

Track 6er
Never used yellow highlighters
Shirley Cooter
O Bubbleheads
Beach West girl
Batman ears
Bidding Warrior

Reserved: Blog Dog Carney

#17 abraxas on 04.20.12 at 10:25 pm

If the interest rates shoot up (and no it is not just up to Carney to decide that) your preferreds will get slaughtered. Same if there is another panic around financial institutions.

The best way to protect one’s wealth is with Harry Browne’s Permanent Portfolio. Just divide your money into four equal parts: 25% broad stock index, 25% long term bonds, 25% gold and 25% cash or short term treasuries. This weird sounding portfolio posted returns close to the stock/bond allocation but without nearly the volatility of stocks. For example this portfolio eeked out a GAIN in 2008.

Go ahead. You will reap what you sow. And check out the performance of preferreds during a difficult year, 2011. — Garth

#18 Westernman on 04.20.12 at 10:25 pm

John G. Young @ # 15,
” Wonderful photo ”
Aaaaawwwwwwwww, it just warms the cockles of your cockles doesn’t it?

#19 mr carney on 04.20.12 at 10:25 pm

20th!!!!

#20 maka on 04.20.12 at 10:27 pm

Any comments Garth?

“My view is that the market is not overvalued, that we’re not in a housing bubble. What we’re seeing is high prices that are just due to supply and demand fundamentals, for the most part,” says Pastrick.

http://www.moneyville.ca/article/1165183–toronto-real-estate-cooling-nah?bn=1

Pastrick fronts an organization that relies heavily on selling mortgages. What comment does he deserve? — Garth

#21 Bill Gable on 04.20.12 at 10:39 pm

Honestly, I have tried to pass along Turnerist thoughts on money to people I care about; and anyone who will listen (I had a radio show with a bazillion listeners, and would get calls from people that were so financially naive, I just about lost my Timbits). -* Granted this was 545 am on the show – but I couldn’t get anyone to listen to the basic gist of today’s post.

I was booed and heckled and called dumb, by 90% of the folks.

I was ridiculed for selling all my RE and investing it *about 80%, with the above lined strategy (with a certain team led by a guy who knows the password to the Amazons change room) and had the rest go in slightly riskier (and ultimately stupid) out -‘there’ – small business investment dogs.

If you want to be able to sleep for the next few decades. Read what Mr. Turner has written. Don’t give me any crap about what Vegas is like, or how Kelowna is heaven. Read it and honestly look at where you are.

That is not to say anyone knows what tomorrow brings, but surely it won’t be playing “Happy Days are Again”.

We have been ‘Greenspanned” into a deflationary stupor.

What’s that…listen…I am hearing strains of the “Three Penny Opera” in the background.

Watch it, ‘cos Mack has a knife.

Oh, and he wears Orange shorts.

#22 Cristian on 04.20.12 at 10:42 pm

Two years, “a relatively long time”?
Yes, if you compare it to the amount of time you need to grow a beard.
“More stability in Europe”???
Yes, if you look at Europe from planet Mars…

#23 Time to leave Canada for a better life on 04.20.12 at 10:44 pm

Not first #14

Exactly. CHMC allows people with no money to buy RE. If I could borrow $600k with 5% of my actual money but reap 100% profits I would. The S@P would Double and triple in no time. People are gambling with money they don’t have and when it goes bad they will all walk just like the US. The BoC and fascist CONs will bankrupt canada.

#24 NotAGreaterFool on 04.20.12 at 10:46 pm

Not that I disagree…. but what are the odds of a very similar scenario in a publication today yet with a different suggestion course of action:

http://www.theglobeandmail.com/globe-investor/investor-education/investor-clinic/help-i-have-500000-and-i-dont-know-where-to-put-it/article2408156/

?!?!?!

#25 Elmer on 04.20.12 at 10:47 pm

Garth, is there any downside to just buying a preferred share ETF like XPF instead of individual preferred shares?

#26 John G. Young on 04.20.12 at 10:51 pm

#18 Westernman on 04.20.12 at 10:25 pm

“Aaaaawwwwwwwww, it just warms the cockles of your cockles doesn’t it?”

WTF is your problem???!!!

You contribute absolutely nothing to this blog except vitriol.

FOAD you POS, and the sooner the better!!!

#27 Chaddywack on 04.20.12 at 10:59 pm

Any thoughts on Preferred Share ETFs? A lot of investors out there find prefs. complex with the different series and types.

Could an ETF with a low MER could be worth looking into?

#28 Canadian Watchdog on 04.20.12 at 11:00 pm

You may not know it now but you will, QFIIs (Q-Fees) is where investors are going. http://www.reuters.com/article/2012/03/12/china-qfii-idUSL4E8EC36D20120312

#29 Not 1st on 04.20.12 at 11:03 pm

So Garth, you must have rode up a big wave in value on your own house. Why are you not selling out and renting as you have advised others?

Because RE is a minority of my net worth. Not that it is any of your business. — Garth

#30 CFP,CLU,CIM on 04.20.12 at 11:09 pm

GT…..
Seriously your writing style has sucked me in about a topic that I am fascinated about but how the hell are you getting away with this from your “compliance” department. ……. LOL. Seriously.

#31 Sp on 04.20.12 at 11:10 pm

My fellow followers of the Garth Path, sacred words like TNL@TB or Orange Guy’s Shorts as spoken to us by our Great Father Garth shall be handled with care, and shall not be revealed to the Infidel Newbies until they have committed themselves to be faithful followers of the Garth Path. The sacred texts of our Father Garth reveal the knowledge and truth to the Garth Side, and shall only be understood by faithful followers of the Garth Path.

#32 Ronaldo on 04.20.12 at 11:40 pm

Can’t make it any plainer than that Garth. Sooner or later it will sink in.

#33 Van grrl on 04.20.12 at 11:46 pm

Best. pic. yet :)

#34 unhappy house hunter on 04.20.12 at 11:59 pm

pimco monthly bond fund 6.44ytd

#35 Spiltbongwater on 04.21.12 at 12:02 am

Because RE is a minority of my net worth. Not that it is any of your business. — Garth

I think comments like these are hidden brags about being a millionaire.

I think I was answering the question. — Garth

#36 Van grrl on 04.21.12 at 12:09 am

Westernman- When I saw John Young’s comment I thought “Of course he would say that, he’s a really decent guy, not like some of the losers on this blog” (namely you)… and then your comment and omg, I agree- WTF is your problem?!!

#37 Makavelli on 04.21.12 at 12:11 am

It’s easy to say buy etf’s. But without proper timing, it can be compared to buying RE. Timing is everything. You can make large, or go broke.

#38 Mr Buyer on 04.21.12 at 12:15 am

Sorry dudes. My nads are not big enough to absorb a swift kick into them. I seem to have to jump into the boiling pot of the investing world but a loss would be life changing. Safety first, yield second until I get a little more breathing room.

#39 DonDWest on 04.21.12 at 12:15 am

But Garth, why would people do any of what you have suggested? That would involve research, personal responsibility, and risk. Let’s face it, the average person has the attention span of no more than three seconds.

Until the day I can use my 110k in savings to get a 1.1 million loan at almost zero interest on stocks – I’ll always be enticed to glare at real estate.

#40 Nostradamus Le Mad Vlad on 04.21.12 at 12:30 am

-
“But at least you lose it safely. And pray. There’s always a GIC, but sadly this choice also sucks. More secure, dependable, guaranteed losses. That means you lose money. At least we’re consistent. And it’s not weird to expect a gain north of 6% – while maintaining total liquidity.”

Aaahhh yes, wot 2 do with half a mil or more net. Cabbage Patch Dolls? Maybe investing in these new 8-track something or other tape players. Keeping up 2 date with new tech is tough!
*
#21 Bill Gable — “I was booed and heckled and called dumb, by 90% of the folks.” — Isn’t it a worthwhile privilege to be a societal reject? Well done!
*
Greek banks lose billions; Politicos love giving away taxpayers’ money, whether they’re asked to or not;
1.8% So much for experts; Cdn. Friday links; Lottery Winners American, but can be adapted with Garth’s advice; Nigel Farage Bank collapses? In the EU? No! IMF Give us more money or else! Record hedge fund assets and food stamps; Rothschilds Who they own, who they control; Ditching the US$ Buy ours instead! It’s worth more! Subsidies Is this why electric bills are skyrocketing? Well, maybe an 8% rise gives a better idea; Venn Diagrams showing how corrupt NAmerica really is.

RE Agent denied commission by judge; Whitney Tilson Three collapsing companies; Bing rumor; BoA Sell in May and go away; Goin’ Down South Economic indicators; Apple stock Sell yesterday! Obomba’s oil price plan; Opposing Garth and State employment slows; Real inf. / unem.; ‘Catastrophic’ Euro Austerity; Paris Lightbulbs dimming; Car Sales and Gas Falling.
*
Strange Days Grizzly on Knox Mtn. in Kelowna Friday p.m., lady accidentally hit the accelerator instead of the brake and crashed a shop front, and I lost my keys (found later); Not quite the same as a Bugatti; How the m$m manipulates and brainwashes sheeple; Maryland Banning employers from demanding employees’ passwords? Stigmatizing (Resistance Is Futile); Africa Vast water supply underneath, and WW3 Energy war; Sabre Rattling Inch; Ron Paul Still in good shape; Cherry Juice No prescription needed; Lamborghini SUV; New US war laser technology; China 21 HDR pix.

#41 stage1dave on 04.21.12 at 12:44 am

Cudos, Mr.Turner…I’ve often wondered why some people EXPECT a guaranteed return on their capital; to my mind that kind of defeated the whole principle of “free enterprise”, but I’ve seldom seen it explained with such clarity & good humour.

And, perhaps, some small degree of sarcasm…

Considering that an entire generation has now been conditioned to expect half of their retirement funds to accrue from simply making mortgage payments on their home, while it skyrockets in value, I guess we shouldn’t be surprised that they also expect their investments to always increase in value while being instantly accessible.

I’m from a generation that hoped the appreciation on your homes’ value MIGHT have paid the down payment on the next place; & you could retire very nicely on a few hundred thousand dollars of net worth. Being a “millionaire” meant something then too: now all it means is that you own your working mans’ bungalow on the right side of town, a decent revenue property, & a few RRSP’s.

Gonna be pretty lean retirement if those property values decrease…

JHC, I’m starting to sound like my father…time to plug in the SG & knock out some Sabbath riffs!

Don’t trust anyone UNDER 30? Hahaha…

#42 Canadian Watchdog on 04.21.12 at 12:49 am

Not to my surprise, TREB decided to change their rental market reporting period to 3 months from 4 months. It’s the good ol’ bait-and-switch maneuver again. http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_rental_report_Q1-2012.htm

And with that, I leave you with the latest development in realtor world that’s causing a storm about a few entrepreneurs whose site (TheRedPin) offers more listings and public transparency. http://www.remonline.com/home/?p=11918

“There are three kinds of lies: lies, damned lies, and statistics.”—British PM Benjamin Disraeli (1804–1881)

#43 wicked as it seems on 04.21.12 at 12:50 am

I discovered the blog and books four years ago, bailed the house and all anchors of emotion, got the money into exactly what you laid out in print for the first time tonight! Direct investing with no mer,s over 1%, sit back and let time add on the nav units and well you just have to love owning reits right now, right!…..Six months in Victoria = stagnation, and six months living in SE Asia in winter is the definition of liquidity.

#44 Onthesidelines on 04.21.12 at 1:19 am

I’m guessing that when the housing market craches and the rates still remain low, the herd will head for the stock market driven by continued greed, short memory and a lack of options.

That’s assuming the herd hasn’t been completely bled and still has money left, which is no small assumption.

#45 Nemesis on 04.21.12 at 1:33 am

“If those basic, simple conditions are not met, it obviously shows the financial system is corrupt, manipulated, riddled with systemic corruption and rigged in favour of banksters. Oh yeah, and this information should also be provided online, at no cost. Immediately.”- Hon. GT

If you ever tire of this gig, OldChap… there could be a new career waiting for you in OnLine ‘ED’… I’m thinking a taught Masters in, “Droll”… ???

#46 K on 04.21.12 at 1:36 am

SP You are very funny ! I am a believer but I love your sense of humour ! Keep it up !

#47 Smoking Man on 04.21.12 at 2:02 am

DELETED

#48 TRT on 04.21.12 at 2:03 am

Here is the real reason for runaway RE prices in Vancouver and Toronto.

The following article quotes Jason Kenney saying that 90% of rich immigrants selected by Quebec settle i Vancouver and Toronto. Same for all the other provinces. Thus rich immigrants from various immigration classes mostly settle in Van/Tor. Then he goes on to state that a house is bought and the breadwinner goes back to his country of origin to run his business. NO CANADIAN TAXES ARE PAID. Anybody that agrees with what is happening is an idiot whose own grandchildren will despise!

http://www.canada.com/business/immigrant+program+funnels+rich+newcomers+Kenney/6495012/story.html

#49 Zara on 04.21.12 at 2:08 am

L O V E …the photo!

#50 Smoking Man on 04.21.12 at 2:09 am

Garth,

I know how you feel.

These lemmings frustrate me as well.

But they pad my bank account regularly, same mistakes day in and day out.

Just like their teacher taught them – I thank them daily for my daily ton of bread.

SM

#51 DML on 04.21.12 at 2:39 am

#27 Chaddywack

I like this one,yield 4.8%,MER .50 and drip eligible.

http://ca.ishares.com/product_info/fund/overview/CPD.htm

#52 McLovin on 04.21.12 at 2:51 am

CFP,CLU,CIM

Meaningless titles.

Get your CFA and then post loser.

#53 Charles Ponzi on 04.21.12 at 6:27 am

Is there any hope for deflation? Low deposit interest rates wouldn’t feel so bad with falling prices.

#54 Foggy on 04.21.12 at 6:39 am

I have 60K dollars or so, stuck in an RRSP and am retired. It’s doing nothing in there. How do I get that money out of there so it’s investable in preferred shares? Of course I want to pay the least tax to extract it. Do I change it to self-directed?

#55 I'm stupid on 04.21.12 at 7:27 am

#54 Foggy

Get an interest only loan, use that money to invest in whatever you want. Pay the interest with money in your rrsp. The withdrawals cancel each other out. Pay taxes at reduced rate because of dividend credit. When there is no more money in rrsp pay back loan. This essentially transfers money from registered account to non registered account at the most favorable tax rate.

#56 Q on 04.21.12 at 7:32 am

“If those basic, simple conditions are not met, it obviously shows the financial system is corrupt, manipulated, riddled with systemic corruption and rigged in favour of banksters.”

Garth, are you suggesting that we don’t deserve the same sort of deal that the bankster bandits get with the CMHC?

#57 sue on 04.21.12 at 7:44 am

“You will lose money. But at least you lose it safely” hilarious.

#58 Ric in gta on 04.21.12 at 7:59 am

The best way to start investing is reading books! Start with a book called “all about dividend investing” this book will help with your investing questions.

#59 T.O. Bubble Boy on 04.21.12 at 8:06 am

For those who keepmbashing preferrers as “volatile”, look at the 52-week range on the CPD preferred shares ETF: 16.80-17.60 (currently right around 17.30)

And, for those 52 weeks, it has paid close to 5%.

Wow – those crazy ups and downs of the stock market!

Yes, this type of investment will be somewhat impacted by interest rate hikes, but I’m pretty sure RE will tank a whole lot more.

After tax, you’re getting about $3700 a year per $100k vs. under $1100 a year in a 2% savings account w/ 46% tax rates.

#60 T.O. Bubble Boy on 04.21.12 at 8:07 am

(apologies for the iPad auto-correct typos)

#61 Maya on 04.21.12 at 8:46 am

#48 TRT
Now I realize that we should blame the government who created the housing bubble by importing in the rich/greedy through investor program. Sounds Kenney has ackownledged the problems, but the damage caused is hurting all our tax payers. Hopefully they can close the loophole sooner than later.

#62 amy on 04.21.12 at 8:54 am

Awesome photo today! People want huge gain for no pain because they’re looking for the proverbial free lunch. Why would smart people buy at the top & sell at the bottom – because they’re following the herd. Hence, Buffet’s line to be greedy when others are fearful & be fearful when others are greedy. Yes, there’s hard work, thrift, saving, etc. – all the dull habits that eviscerate fun & joy for the individual subscriber, and the whole economy runs into recession when enough people take up thrifty habits. Hitting the jackpot is predominantly a matter of luck, i.e. buying an asset at the right time (i.e. before its steep ascent), being born in the “right” family or having skills that the market happens to value when you’re offering them (i.e. celebrities reality TV stars, etc.). Then, there’s the gazillionaire oligarchs, but let’s not go there since Garth seems very conscious of being p.c. (politically correct) like nice Canadians are reputed to be.

#63 TnT on 04.21.12 at 9:03 am

I’m scared, yes I admit it. In the 90’s I took 45 k ( all my savings) and put them in the Tech Bubble. It grew to 120 k then dropped to 4 k. 15 years and it’s still sucks. Sucks because I have no idea what I’m doing. Bought a house in 2002, small town outside GTA. Sold for 100 k profit (incl. commission and reno’s) in 2009, bought another house right after and just sold for an added 125 k profit in less the 2 years ( incl. commission and reno’s). Now that I have almost 300 k and still no investing brain and totally chicken of any stock “tips”. I like the Orange Guy setup. 1.35 % is good enough for me while I rent. This is short term – 2 years of renting, relaxing and sleeping sound. If price of houses goes down +10% and I use my profits from previous house sales can I call that a win?

Why make 1.35% in safe bank savings when you can make 5% in safe bank preferreds, at half the tax? — Garth

#64 eaglebay - Parksville on 04.21.12 at 9:05 am

#48 TRT on 04.21.12 at 2:03 am
“Here is the real reason for runaway RE prices in Vancouver and Toronto.

The following article quotes Jason Kenney saying that 90% of rich immigrants selected by Quebec settle i Vancouver and Toronto. Same for all the other provinces. Thus rich immigrants from various immigration classes mostly settle in Van/Tor. Then he goes on to state that a house is bought and the breadwinner goes back to his country of origin to run his business. NO CANADIAN TAXES ARE PAID.”
_________________
Immigrants can move and live where ever they like. Canada is a free country.
As for paying taxes, only permanent residents are taxable in Canada. Check out residency rules as per CRA.

Temporary residents do not escape tax. They pay in another jurisdiction. — Garth

#65 eaglebay - Parksville on 04.21.12 at 9:08 am

#52 McLovin on 04.21.12 at 2:51 am

So is CFA. A title doesn’t necessarily make you a professional.

#66 [email protected] on 04.21.12 at 9:11 am

is there by any chance a preferred share etf?

#67 Frank the skank on 04.21.12 at 9:16 am

What will happen to the interest rate if real estate crashes? If an interest rate hike is the catalyst for the real estate pop, would they lower it during implosion?

#68 Party on Garth on 04.21.12 at 9:16 am

Investing your down payment for a home into a portfolio of equities and preferreds (even balanced, diversified) with a 2 or 3 year time horizon during a period of interest rate increases is not a good idea unless you have a real stomach for risk.

I have held preferreds before. I have experienced zero or negative growth during rate hikes. Yes, it will likely turn out okay, but it could also go the other way and who needs the anxiety?

I agree with Garth’s thoughts on retirement planning but not this.

There is nothing wrong with trading a 1 percent annual loss in real purchasing power of your house money in return for total safety and liquiditiy. Especially when you anticipate home values will depreciate at a much faster rate.

#69 eaglebay - Parksville on 04.21.12 at 9:16 am

#54 Foggy on 04.21.12 at 6:39 am
“I have 60K dollars or so, stuck in an RRSP and am retired. It’s doing nothing in there. How do I get that money out of there so it’s investable in preferred shares? Of course I want to pay the least tax to extract it. Do I change it to self-directed?”
_______________
It doesn’t matter how you extract it. You’re liable to pay the taxes on it. Depending of your taxable income, you could ‘extract’ it a little at a time with 10% tax deducted at source.
The consolation is that you’ll be taxed less on any future dividends as opposed to the full amount in the RRSP.

#70 TnT on 04.21.12 at 9:19 am

Why make 1.35% in safe bank savings when you can make 5% in safe bank preferreds, at half the tax? — Garth

Cuz I have no investing brain. I am buying your book today and will try to get this brain working. Thanks for this Blog, it really helps me a lot :)

#71 eaglebay - Parksville on 04.21.12 at 9:21 am

#61 Maya on 04.21.12 at 8:46 am

There’s nothing wrong with the investor program.
It benefits Canadians. Who do you think gets the money?

#72 Party on Garth on 04.21.12 at 9:31 am

@ #27 Chaddywack

if you find one let me know. the only option I have found charges a % .6 MER. Too much IMO.

At this point I’ve seen no benefit for the consumer in BlackRock’s purchase of Claymore.

#73 Basil Fawlty on 04.21.12 at 9:32 am

Inflation at 2%? Europe stabilizing? Spain has 25% unemployment, while the ECB prints money like drunken sailors along with all governments. We are witnessing the largest financial bubble in world history, in sovereign debt. Which has created a massive misallocation ie. the lowest interest rates in history, at a time of the highest debt and largest expansion of money supply.
There is no stability and anyone who believes in 2% inflation is sporting a tinfoil hat.

#74 brainsail on 04.21.12 at 9:43 am

#64 eaglebay – Parksville

“Non-residents of Canada – This page provides information about the income tax rules that apply to non-residents of Canada.”

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html

#75 earlybird on 04.21.12 at 10:04 am

HAHAHAHA…..at least you’ll lose money safely! The returns on HISA’s, MMF and GIC’s makes the case for raising rates….especially if you factor food/energy inflation with the core inflation. Best bet is to take some of that cash and invest in some financially educate, find out what you don’t know, and live happily ever after! Take the securities course, LLQP, Financial account management, Real estate program and a Tax prep class, and then make an informed decision. The return will be priceless!
*Euro is toast in its present form
*Dont bet against the US
*Energy prices will keep the money printers in check
*Rate will go up period
*The end of the world has been cancelled : )

#76 Scalgary on 04.21.12 at 10:24 am

Mark

Its The Nice Lady @ The Bank

#77 John G. Young on 04.21.12 at 10:26 am

#36 Van grrl on 04.21.12 at 12:09 am

Thank you for your support.

I think the only way to deal with “people” like Westernman is to band together against them — strength in numbers, something the soon-to-be-extinct “rugged individual” will never understand.

Nice to know you’ve got my back, and I’ve got yours.

Have a great day!

#78 Abitibi Doug on 04.21.12 at 10:37 am

Have any of you looked at today’s (Saturday) Globe and Mail business section?. There’s a 2 page article about how energy stocks are depressed because of fears about oil prices dropping, and natural gas is already dirt cheap. Although in the short term they could go lower, the longer term outlook is good. I worry about the long term future of oil every time I fork out a king’s ransom to fill up my car with petrol, ride a diesel powered bus or train, or see a seemingly endless convoy of diesel powered trucks on the 401. Soon, Southwestern Ontario (where I live) will be buzzing the sound of with farm machinery running on diesel fuel, all the more reason to worry about the future of oil. Personally, I’d rather buy cheap energy stocks (or ETF’s) than an overpriced house or condo.

#79 Steve Thompson on 04.21.12 at 10:39 am

At this time, to me, capital preservation is key. While preferred shares of Canada’s major banks look secure, they aren’t. Taking a look back to 2008 – 2009, the value of these “safe” investments plummeted from around $25 to the mid-teens, a capital loss of 40 percent or around 10 years worth of dividends. On the other hand, if preferred shares readjust downward to the high teens or low 20s, that’s the time to buy.

Everything fell in 08-09, and any idiot selling preferreds then got what he deserved. The recovery was swift and complete, and the dividends kept flowing. Ill-informed comment. — Garth

#80 Market Bull on 04.21.12 at 10:51 am

Toronto real estate set to climb even further:

http://www.moneyville.ca/article/1165183–toronto-real-estate-cooling-nah

If you believe the Credit Union Central’s mortgage-pumping economist, you deserve your own fate. — Garth

#81 Market Bull on 04.21.12 at 11:06 am

Interest rates going nowhere after latest inflation numbers:

http://www.statcan.gc.ca/daily-quotidien/120420/dq120420a-eng.htm

#82 J.I.M. on 04.21.12 at 11:32 am

RE: your answer to #29 Not First

Because RE is a minority of my net worth. Not that it is any of your business. – Garth

Well, actually Garth, it is our business. You made it our business when you started this blog.

Hardly. — Garth

#83 J.I.M. on 04.21.12 at 11:46 am

Not sure if this article has been posted

http://news.nationalpost.com/2012/04/20/the-high-life-hundreds-of-metres-up-the-rock-stars-of-torontos-building-boom-help-keep-the-city-growing/

Note how many high rise construction projects are underway in Toronto , Compared to other world citys

#84 arctodus on 04.21.12 at 11:53 am

Ya’ll should look up what the current petroleum use is stateside before we all buy the glacial but steady improvement in the US economy rhetoric….

That nation is now back at 1996 levels of petro use and the trend is strongly downward.

Is this due to remarkable improvements in vehicle technology?…..a sudden magical awakening of the masses to the rapidly warming climate?……hhhmmmm….not likely eh?

It is due to a fricking economic collapse that is not slowing down, is not flatlining, is not on the upswing….

We are on the farside of the adjusted Hubbert curve and that my little gophers,….is that…..

Canada is now screwed because we have the most expensive oil on the planet (outside of some wingnut “oil shale” attempts in Utah..or is it Montana?…but I digress)

As the collapse accelerates now we will see a steady decline in our market share as the world economies implode and the price of petro flatlines all the while supplies dry up literally (Ghawar anyone?)….

Collapse is not dramatic..or pretty…or TV series apocalyptic…it is just nasty, dreary, never ending…and real.

#85 ANONYMOUS on 04.21.12 at 11:54 am

It seems that along with the dramatic upturn in the local employment rate here in the Kitchener-Waterloo area and the booming construction and real estate market here, that things are looking up !

As the central bankers will try to keep inflating the economy they will try everything possible to get people to load up on more credit, and that means keeping interest rates down at emergency lows for another 10 years or more.

So I think that while Canadian consumers have record high levels of debt, they will more than double their amounts of debt over the next 10 years and we can enjoy house prices increasing 10% to 15% per year over the next 10 years.

Of course, I might be wrong?

#86 Last (just re-read money road) on 04.21.12 at 11:54 am

Well the first thing you should do is read Garth’s book, bit heavy at times and he is doesn’t talk as much about dividends as I would like but is probably one of the best investing books I’ve read. Some surprisingly great ideas.

Second approach would be a subscription to Canadian Money Saver.

#87 daystar on 04.21.12 at 11:57 am

Why make 1.35% in safe bank savings when you can make 5% in safe bank preferreds, at half the tax? — Garth

Not to mention preferreds should work just as well as GIC’s in establishing credit, perhaps moreso!

#64 eaglebay – Parksville on 04.21.12 at 9:05 am

Aside from the racist slurs slang and slander that you’ve filled the archives with, maybe next time you put words in Jason Kenney’s mouth you will provide a source link. Use the one that is anti-immigrant, you know the one I speak of. In the meantime, try a perspective that doesn’t include practicing inequality to be superior based on lies.

http://www.youtube.com/watch?v=9QyqxkM_Z94&feature=relmfu

http://www.youtube.com/watch?v=K7JneNPZltU&NR=1&feature=endscreen

http://www.youtube.com/watch?v=FkmQZjZSjk4&feature=related

http://www.youtube.com/watch?v=no1F-AMTnGg&feature=relmfu

#88 Last (just re-read money road) on 04.21.12 at 11:58 am

@ eaglebay – Parksville. A recent issue of Canadian Money Saver just covered that very issue, how to get your money out of an RSP while not paying much tax, complicated but doable

#89 Not 1st on 04.21.12 at 12:01 pm

Because RE is a minority of my net worth. Not that it is any of your business. — Garth

Unfortunately, thats not what you have been saying in this blog. You have said its crazy for anyone not to harvest the large gains in their houses, invest it, rent and then sit on the side lines to buy in again which is likely at least a multi-year proposition, maybe more.

So lets see, go back to Calgary circa 2008, when houses peaked. So if I would have sold my house and pocketed the gain and went and rented some 3rd rate apartment hoping to save and pounce again, I would have needlessly put my family through a bunch of hassle for nothing. My house appraised at $475k in 2008 and sold it for $430k in 2012. Almost 5 years later, the ‘massive’ slide was less than 10%.

Why sell if I don’t need the money? I don’t need an terminally sexy Harley, either. Or my Hummer fleet. Or all that Amazonian upkeep. Try not to be small. — Garth

#90 GregW, Oakville on 04.21.12 at 12:06 pm

Hi Nastra and others, FYI,

“Total Health Show”
in Toronto this weekend. Seems they have many interesting speakers too. Only $10 to get in. See link.
http://www.totalhealthshow.com/showInfo/index.cfm?CFID=3345126&CFTOKEN=80579380

#91 Ogopogo on 04.21.12 at 12:50 pm

I’m a fan of CPD, as far as preferreds go.

Garth and blog dogs, remember the flipped bung in Kelowna I’ve been reporting on here occasionally? In my last update I reported that it’d been de-listed.

A few days ago I’m biking along Park Ave. and I see a realtor staking up a new sign on the lawn. The owners clearly spent a few hundred bucks too dolling up the shack for spring: new flower pots, immaculate lawn, etc.

But here’s the rub: when I first reported this bung a few months ago it was listed at 589K. It dropped to 549K and then to 542K until it was delisted.

It’s now re-listed at….(drum roll)…. 514K! So the flippers have actually sunk MORE cash into the place and now the place is listed for 75K LESS. Brilliant!

http://www.realtor.ca/propertyDetails.aspx?propertyId=11820975&PidKey=-1899595922

This is Ogopogo, reporting live at UIK (Underwater In Kelowna).

#92 a prairie dawg on 04.21.12 at 12:56 pm

#54 Foggy
“I have 60K dollars or so, stuck in an RRSP and am retired. It’s doing nothing in there. How do I get that money out of there so it’s investable in preferred shares? Of course I want to pay the least tax to extract it. Do I change it to self-directed?”
_______________

Easy peazy.

Yes, you open a self-directed rsp account with the nl@tb, or their brokerage division (tnl@tbbd). lol

Then you transfer the rrsp’s you currently hold from one tax sheltered account to another. The process used is called “transferring in-kind”. There is NO tax payable in this scenario, and I’ve done it myself in the past. Just get the nl@tbbd to do all the paperwork necessary to make it happen.

Once you have your rrsp’s in your own self-directed account, you simply sell them at an opportune time. There is no tax payable as it’s just converted to cash that’s held within a registered account. (It is not taxable until you actually withdraw it from the account)

-So you’ve transferred your holdings in-kind tax free.
-You’ve liquidated them to convert to cash.
-Now comes the selecting/buying part. (ask Garth)

PS, and that moaning sound you just heard, was a large group of mutual fund sales people, as they see their fat-fee paying customers run for the door…

#93 sue on 04.21.12 at 1:29 pm

I read this post out loud to my Dad who’s extremely stubborn about his views on finance. (must be guaranteed..blah blah) After 90 seconds of silence he said “Yah, add that site to my favourites”. Well done Garth….you have a new fan.

#94 TFSA and Preferreds and Confessed Ignorance on 04.21.12 at 1:29 pm

Noob question:

What happens if you buy preferreds within a TFSA? Is this a waste of TFSA space? Or, is it a good idea?

If dividends aren’t really taxed (?), then perhaps it is a waste to have preferreds inside a TFSA?

Help!

You already figured that out. — Garth

#95 Re-diculous on 04.21.12 at 1:55 pm

Tim @ 10
per your question: “I rent a two bedroom for $1500 a month in a nice neighborhood in Vancouver. What would real estate prices have to drop to in order to make financial sense to buy a two bedroom apartment? (assuming a mortgage rate of 5%)”
—-
As I reported last week, a suite in my building in downtown Vancouver is listed at a “re-diculous” price of $705K. I rent a similar suite for $1700/month.
Per the listing, combined taxes+strata fees = $470/month

So rough calculations: what would price “p” need to be in order for the overall monthly payment to fall to my current rent ($1700) at a 5% interest rate:
(5%)p = (1700-470)x12=$14,760
p = (100/5)x14760 = $295,200

So current list price of $705K would need to fall over $400K in order to meet my current rent cost equivalence. That means 400/705, or roughly 56% fall in price.

Note – This does not take into account any maintenance costs which has been considerable in my building over the last number of years.

As I said last week, I will monitor to see how quickly some financial genius grabs this deal.

#96 John G. Young on 04.21.12 at 1:58 pm

#78 J.I.M. on 04.21.12 at 11:32 am

“Well, actually Garth, it is our business. You made it our business when you started this blog.”

Wow.

The Age of Entitlement.

#97 Toxicosis on 04.21.12 at 2:12 pm

“Given the steady but glacial improvement in the US economy, more stability in Europe, the inevitable growth in BRIC countries and the resolve of central banks” -Garth

Now that is funny!!!

Not so far. — Garth

#98 Canadian Watchdog on 04.21.12 at 2:39 pm

#81 Market Bull

Carney doesn’t have to lift interest rates to target mortgages. He just needs to dump 5yr bonds on the market to flatten the yield curve. http://i40.tinypic.com/2rq0f44.png

They didn’t teach you that at school did they. I know.

#99 Mark W on 04.21.12 at 2:48 pm

I know a woman who considers herself a real estate investor in that she has purchased several condos and then rents them out.

She went out and bought a nice one bedroom condo in Burnaby (next to Vancouver) in a new high rise building.

She wanted to rent it to my wife and myself for $1200.00 per month.

As a renter I do not pay taxes, or about $300.00 monthly in maintenance fees, or any other fees outside or rent; and I can move with one month plus one day notice.

I started asking her how much everything cost her including the heavy mortgage, maintenance, property taxes, etc.

Finally, she stated that her overhead was $1600.00 per month for everything.

Yet I could rent this brand new condo for $1200.00 a month from her, and she goes backwards $400.00 every month.

The entire thing is based on her assumption that this condo will go up in value and she can sell at a profit.

Also, that her low interest rate will stay in place.

Good luck with that.

At least I sleep soundly at night.

Seems to me that in this equation I get the goldmine and she gets the shaft.

#100 jess on 04.21.12 at 3:38 pm

Cameron family fortune made in tax havens

http://www.guardian.co.uk/politics/2012/apr/20/david-cameron-jersey-panama-geneva

http://taxjustice.blogspot.ca/
====================
Reasons for an “automatic” information exchange between jurisdiction, on a multilateral basis.
http://www.taxjustice.net/cms/front_content.php?idcat=140

Big win on transparency in the United States
From Bloomberg:

The [U.S.] Internal Revenue Service and the Treasury Department released final rules today requiring U.S. banks to report interest payments made to nonresident aliens. The regulations will apply to payments starting in 2013 and are part of the government’s efforts to work with other countries on tax evasion.

=

See also:
Florida bankers object to disclosing identities of foreign depositors Orlando Sentinel

#101 TFSA and Preferreds and Confessed Ignorance on 04.21.12 at 3:41 pm

Another Noob Question:

So what should be in a TFSA? More long-term stuff? Bonds? Equities?

Am I right again? :)

#102 jess on 04.21.12 at 3:53 pm

What is foreign?

The U.S. government taxes interest payments made to U.S. residents but not those made to foreigners, so before now it never bothered to require banks to report those interest payments made to foreigners. But the IRS proposed to change that rule in order to reduce tax evasion by Americans, both directly (by helping to identify Americans who evade U.S. taxes by posing as foreign account holders) and indirectly (by helping other countries enforce their tax laws so that they’ll help us enforce ours).

http://ctj.org/taxjusticedigest/archive/2012/04/obama_administration_scores_a.php

#103 Not 1st on 04.21.12 at 3:55 pm

Why sell if I don’t need the money? I don’t need an terminally sexy Harley, either. Or my Hummer fleet. Or all that Amazonian upkeep. Try not to be small. — Garth

Thats fine, but the thesis of your blog is that equity in a home is dead, illiquid and non-income producing so when it becomes substantial, it should be harvested and put to work elsewhere. Anything else is insanity.

You have made moving to be a renter sound as easy as flicking on the light switch one morning. Sure, if you are some single guy its easy but most people have families with kids that attend schools and extra-curricular activities and their own nearby friends. You might have friends or even family on your street. You have your home the way you like it and don’t mind a weekend project now and then. You are probably even close to your work too.

Now imagine uprooting all that, telling your wife and kids you are moving across the city to some ‘rental’ just so you can cash in your equity and waiting 5 years to get a home again. You will likely be divorced.

This is exactly why interest only HELOCs are a god send. You can tap without moving. Now you just need to find an investment thats greater than the interest rate. If these preferreds are so great, then a HELOC invested in one should hold is value and should earn 3-4% for you.

‘The thesis of your blog is that equity in a home is dead, illiquid and non-income producing so when it becomes substantial, it should be harvested and put to work elsewhere.’ That is not my thesis. Having too much of your net worth in one asset is dangerous, no matter what your wife thinks. That is my thesis. — Garth

#104 FullOfFear on 04.21.12 at 4:07 pm

Garth says “Why make 1.35% in safe bank savings when you can make 5% in safe bank preferreds, at half the tax?”. Abraxas says “If the interest rates shoot up (and no it is not just up to Carney to decide that) your preferreds will get slaughtered.”

I need some more information. In the 2 years of 2005 and 2006, interest rates went from 2.75 to 4.5. What did these preferreds do in that time period?

#105 truth hammer on 04.21.12 at 4:19 pm

Vancouvers pap media fiddles while the country people burn. Selling hope to the poor by braying about lottery wins is like pushing cheap heroin to the junkies.

http://www.vancouversun.com/million+lottery+financially+struggling+Kelowna+single/6497860/story.html

Not only that but this woman who complains that she can’t make ends meet is out eating fast food priced at quadruple the cost of what she could make the kids healthy meals at home. I guess there’s plenty of stupid to go around.

#106 Freedom First on 04.21.12 at 4:44 pm

#85 Anonymous

Your post is hilarious:) ……and then you write that you may be wrong…..well, I almost peed my pants I laughed so hard:) ………about 70% of Canadians are already home owners………enough said, but thanks for the laugh, and what kills me, is the # of Canadians who would read your comment and actually agree with you:)…….Garth, another great post! I am beginning to see how you can keep going, you know you are helping a lot of people, and we all get a good laugh from some of the comments on here. I am a fan, Garth….thank you!

#107 Devore on 04.21.12 at 5:19 pm

#54 Foggy

I have 60K dollars or so, stuck in an RRSP and am retired. It’s doing nothing in there. How do I get that money out of there so it’s investable in preferred shares

You can drain it out as someone already described. This is also Garth’s method to melt down the RRSP tax bomb and transfer the funds to a TFSA or a non-registered vehicle with the least tax impacts, which is zero, plus fees to set it up.

But if your money is doing nothing in an RRSP, you don’t need to get it out to invest that money the way you want. RRSP is a type of investment account, into which you can put all manner of investments. You’ve either done nothing with yours, or been bamboozled, probably by TNL@TB to put it into do-nothing mutual funds. You can have the account converted to a self-directed brokerage account, which will allow you to invest the money as you wish, or pay someone else to do it for you.

#108 steev on 04.21.12 at 5:24 pm

#103 Not 1st on 04.21.12 at 3:55 pm

I’m not sure where you live, but if you take a look through MLS or padmapper rental listings in your area I think you’ll be surprised at what the rental market has to offer.

While I find your strategy of leveraging your retirement through a HELOC interesting, but investing is hard enough when you’re competing with taxes, fees, inflation, and the market, let alone interest.

What happens if OSFI regs axing interest only payments and capping LTV at 65% come in to force around the same time the housing market corrects? Being forced to deleverage sucks as it can seriously magnify any short term losses. Hell if enough people subscribe to your method, and they are forced to deleverage en masse it would cause short term losses.

Granted, that’s a perfect storm…but I sleep a lot easier knowing that by renting and abhorring leverage said storm wouldn’t effect my retirement.

Lastly, Garth did a post about why he owns RE a little over a week ago.

http://www.greaterfool.ca/2012/04/09/nasty/.

Cheers

#109 Westernman on 04.21.12 at 5:41 pm

John G. Young @ # 77,
You have it exactly backwards Johnny, the people who are on the soon-to-be-not-needed list are the useless, self-entitled, pretend victim types…like you.
No skills that are needed in the real world, just whining about being victims… productive people have just about had it with being taxed to death to provide government support and protection for you and your ilk.
The people who will survive, prosper and inherit the coming reality will be self-reliant,inventive,aggresive,ambitous,resourceful and have real skills… in other words… people like me.
You are just not needed in the real world Johnny…

#110 Devore on 04.21.12 at 5:51 pm

#60 T.O. Bubble Boy

(apologies for the iPad auto-correct typos)

I love this. Everyone, to a person, with curiously spelled words in their posts, is apologizing for their iPad/iPhone. This is hardly the only forum this happens on. Interesting.

#111 Devore on 04.21.12 at 5:54 pm

Temporary residents do not escape tax. They pay in another jurisdiction. — Garth

Like China? Does Canada have a tax treaty with China?

#112 John on 04.21.12 at 6:07 pm

Well well well, take a look at this, from the Netherlands: “Once considered one of Europe’s strongest economies, the Netherlands is suffering from high levels of personal debt, mostly mortgage related.” in an article carried by Yahoo news. Are they also headed for a corection, are there similarities between them, Canada and Australia? You bet! Generalized planetary “tumortgage” it seems (tumor+mortgage).

Full article:
http://ca.news.yahoo.com/reports-dutch-government-austerity-talks-collapse-possibly-paving-140638080–finance.html

John in Montreal

#113 John G. Young on 04.21.12 at 6:19 pm

#109 Westernman on 04.21.12 at 5:41 pm

“…the people who are on the soon-to-be-not-needed list are the useless, self-entitled, pretend victim types…like you.”

Not useless: I’m a physician who has spent his life helping others.
Not entitled: I’ve worked hard for every penny I’ve earned.
And I’m nobody’s victim — least of all yours.

Unlike you, I’m proud to live in a country where people like me who have the skills of which you speak can help provide for those who have not been so fortunate. Unlike you, however, I am not a hate-filled, bigoted, miserly, self-centered, antisocial prick who only cares only about himself.

You wanna go?

Game on, Westernbaby.

#114 TurnerNation on 04.21.12 at 6:29 pm

Serfs are revolting! RIP Middle Classes – a quaint post-WW2 marketing invention.
I did not vote for Dolton.

http://www.cp24.com/servlet/an/local/CTVNews/20120421/120421_Labour_Rally/20120421/?hub=CP24Home

Thousands rally against budget in Toronto

Aaerial shot shows the crowd gathered at Queen’s Park for a labour rally Saturday afternoon. (CP24)

Thousands of protesters gathered on the front lawn of the Ontario legislature before marching to Yorkville to protest a provincial budget they said “unfairly targets the middle class” Saturday afternoon.

The rally, which was organized by 50 unions and 86 community groups, was held in advance of a Tuesday vote on the proposed budget, where Dalton McGuinty’s Liberal government will need at least two opposition

#115 Kale on 04.21.12 at 6:30 pm

#109 Westernman

Pointless grandstanding on the internet? Say it ain’t so.

#116 TurnerNation on 04.21.12 at 6:32 pm

More unrest. A protest, declared illegal? Syria? Iran? Nope, Kanada.

Police arrest dozens of protesters in Montreal

Police and students clash in Montreal, Friday, April 20, 2012. (CTV)

MONTREAL — Police moved swiftly to shut down a protest in Montreal on Saturday, a day after a series of violent clashes between demonstrators and officers.

Between 50 and 75 people, some wearing masks and goggles, were arrested after the protest was declared illegal, police said.

Demonstrators had gathered in the rain to denounce a conference on Premier Jean Charest’s plan to develop northern Quebec.

#117 charles on 04.21.12 at 6:36 pm

I think there is not going to be crash in RE. Even if prices go down, just few fools are going to be hurt. The way houses had increased in price, it does not matter if in two years cost 10-20% down because is down from an overinflated priced. So my conclusion is that “IS DIFFERENT HERE!”.

#118 Westernman on 04.21.12 at 6:56 pm

John G. Young,
Anytime Daisypicker, don’t let nothing but fear and good judgement stop you…

Enough. — Garth

#119 AACI Home-Dog on 04.21.12 at 7:11 pm

I have been invested in equities, REITS, income trusts, etc. for 30 years, and have done very well.
However, it can be a very scary roller-coaster at times….such as 3 years ago.
As Garth says, find a good advisor (ask your friends or get references, if unsure), and stay the course.
cheers…!

#120 Aaron - Melbourne on 04.21.12 at 7:20 pm

Debtor prisons? Your Dickensian future awaits (in the USA)

http://www.cbsnews.com/8301-505144_162-57417654/jailed-for-$280-the-return-of-debtors-prisons/

#121 Shazy McShazabot on 04.21.12 at 7:24 pm

Garth says:

“Besides house lust, this nation has a withering case of financial illiteracy. If it ain’t offered to you by TNL@TB, or found within the moist reassurance of the orange guy’s shorts, then it’s suspect – some scam cooked up by Bernie Madoff’s Canadian cousin.”

I think financial literacy starts with the government, who doles out unsustainable and often unwarranted lifetime indexed DBP pensions to the chosen few. Too bad the financially illiterate 99% can’t get those huh Garth! Odd I don’t see you railing against that…Hmm..

What somebody else gets is no excuse for personal failings. A dumbass comment. — Garth

#122 guy from toronto on 04.21.12 at 7:29 pm

hey John G and Westernman, can you spare the rest of us from your tedious posturing please?

It is getting to be a real drag.

just exchange email addresses and take it private, please.

thanks

#123 jess on 04.21.12 at 7:38 pm

MF Global: The Untold Story of the Biggest Wall Street Collapse Since Lehman
http://www.alternet.org/economy/155078/mf_global%3A_the_untold_story_of_the_biggest_wall_street_collapse_since_lehman/

http://wallstreetonparade.com/

=
smoking man casino
WorldSpreads was put into administration on March 18.

“Spread betting is regulated as gambling, not investing, meaning firms’ clients don’t pay tax unless it’s their primary source of income. ”

In the 1970s Stuart Wheeler,founded Investors Gold Index, now known as IG Group, the U.K.’s biggest spread-betting firm

#124 anon on 04.21.12 at 7:41 pm

Go John G. Young!

#125 rosie on 04.21.12 at 7:50 pm

Beware the loss of civility. As a long time teacher I have often wondered at the lack of manners students display with depressing regularity. Reading some of the statements on this blog lately has confirmed my suspicions as to the root of this problem. JohnG., Westernman, etc. need to man up and set a good example for the children reading this blog like Full of…, J.I.M., McLovin and the rest.

Children read this blog? Holy crap. — Garth

#126 Westernman on 04.21.12 at 8:06 pm

Rosie @ # 125,
Please ,not the old ” good example for the children ” routine … it’s been done to death.
Maybe you should go back to your knitting as sometimes things can get a bit ugly out here in the real world…

#127 Uh Oh Canada on 04.21.12 at 8:11 pm

Tales From My Hood

While taking my 2.5 years old tyke to the playground, got to chatting with some folks. Spoke with a babysitter of 3 year old. His mother is a single mom, with two other kids and lives in a big house in a nice area. The babysitter says she is doing financially bad. Seems the heloc is wearing out on the everyday expenses, and she needs a washer and dryer desperately but can’t afford it.

Spoke with a mother of a 20 months old. Both father and mother are in University and are living off burseries and student loans. The father just graduated but needs a few weeks to recover from surgery, so he’ll be taking more useless courses so they won’t have to start paying off their loans immediately.

Debt, Debt, Debt! It’s everywhere. I expect to see all credit bubbles pop soon- real-estate, helocs, student loans, etc. Ah, we are screwed…

#128 Canadian Watchdog on 04.21.12 at 8:14 pm

#114 TurnerNation

Ontario better pass that budget soon. Moody’s is watching.

#129 Van grrl on 04.21.12 at 8:39 pm

“Carney warns of potential housing market bubble”

LOLOLOL!! Thought he’d slip that in on a Saturday, Garth! Make you look like a slacker on your warnings… :)

http://www.cbc.ca/news/politics/story/2012/04/21/pol-the-house-mark-carney.html

#130 IvoteIndependent on 04.21.12 at 8:44 pm

This is a top 5 post in this blog. Good job.

#131 Shazy McShazabot on 04.21.12 at 8:53 pm

Garth says:

“Besides house lust, this nation has a withering case of financial illiteracy. If it ain’t offered to you by TNL@TB, or found within the moist reassurance of the orange guy’s shorts, then it’s suspect – some scam cooked up by Bernie Madoff’s Canadian cousin.”

I think financial literacy starts with the government, who doles out unsustainable and often unwarranted lifetime indexed DBP pensions to the chosen few. Too bad the financially illiterate 99% can’t get those huh Garth! Odd I don’t see you railing against that…Hmm..

What somebody else gets is no excuse for personal failings. A dumbass comment. — Garth

To Garth –

With respect, I disagree. Unsustainable lifetime indexed DBPs are basically a giant transfer of wealth scheme from the 99% to the chosen few. Thus, my original point – don’t expect personal financial literacy if the government is so blatant with its own mismanagement of the national finances. Unfortunately, the people with the power to right the ship are to busy feeding at the trough?

Right your own ship. — Garth

#132 Mister Obvious on 04.21.12 at 9:06 pm

The National Post had an article Friday about the life of high rise construction crane operators.

http://tinyurl.com/7hx8ncn

It includes stats on the number of cranes currently in operation in various North American cities. Here’s the numbers they gave:

Boston 9
Calgary 10
Mississauga 13
Vancouver 16
Miami 16
Houston 22
Chicago 25
New York 80
Mexico City 88
Toronto 185

I find this simply astonishing.

#133 Shazy McShazabot on 04.21.12 at 9:22 pm

Garth says:

“Besides house lust, this nation has a withering case of financial illiteracy. If it ain’t offered to you by TNL@TB, or found within the moist reassurance of the orange guy’s shorts, then it’s suspect – some scam cooked up by Bernie Madoff’s Canadian cousin.”

I think financial literacy starts with the government, who doles out unsustainable and often unwarranted lifetime indexed DBP pensions to the chosen few. Too bad the financially illiterate 99% can’t get those huh Garth! Odd I don’t see you railing against that…Hmm..

What somebody else gets is no excuse for personal failings. A dumbass comment. — Garth

To Garth –

With respect, I disagree. Unsustainable lifetime indexed DBPs are basically a giant transfer of wealth scheme from the 99% to the chosen few. Thus, my original point – don’t expect personal financial literacy if the government is so blatant with its own mismanagement of the national finances. Unfortunately, the people with the power to right the ship are to busy feeding at the trough?

Right your own ship. — Garth

No worries here, my ship is fine. I’m even going to be able to retire without an unsustainable inflation indexed DBP for the rest of my life on earth! :-) Regardless, I think we can both agree financial illiteracy is a growing challenge, fortunately though people will always pay tax – otherwise, how would the $5 taxpayer contributed to every $1 MP contributed DBPs stay afloat! ;-) cough cough

My pension for two terms as an MP and cabinet minister is 26K, which I did not ask for and donate. You are reading a free blog. You are my guest. Act like it. — Garth

#134 Smoking Man on 04.21.12 at 9:30 pm

#50 Smoking Man on 04.21.12 at 2:09 am

FAKE lemmings ? when have I ever used that word.

Not easy to fake the Great Smoking Man is it.

However I agree with you.

Good Post FSM

#135 Shazy McShazabot on 04.21.12 at 9:39 pm

Garth says:

“Besides house lust, this nation has a withering case of financial illiteracy. If it ain’t offered to you by TNL@TB, or found within the moist reassurance of the orange guy’s shorts, then it’s suspect – some scam cooked up by Bernie Madoff’s Canadian cousin.”

I think financial literacy starts with the government, who doles out unsustainable and often unwarranted lifetime indexed DBP pensions to the chosen few. Too bad the financially illiterate 99% can’t get those huh Garth! Odd I don’t see you railing against that…Hmm..

What somebody else gets is no excuse for personal failings. A dumbass comment. — Garth

To Garth –

With respect, I disagree. Unsustainable lifetime indexed DBPs are basically a giant transfer of wealth scheme from the 99% to the chosen few. Thus, my original point – don’t expect personal financial literacy if the government is so blatant with its own mismanagement of the national finances. Unfortunately, the people with the power to right the ship are to busy feeding at the trough?

Right your own ship. — Garth

No worries here, my ship is fine. I’m even going to be able to retire without an unsustainable inflation indexed DBP for the rest of my life on earth! :-) Regardless, I think we can both agree financial illiteracy is a growing challenge, fortunately though people will always pay tax – otherwise, how would the $5 taxpayer contributed to every $1 MP contributed DBPs stay afloat! ;-) cough cough

My pension for two terms as an MP and cabinet minister is 26K, which I did not ask for and donate. You are reading a free blog. You are my guest. Act like it. — Garth

With respect Garth, I didn’t mean to offend you, I’m just pointing out that the government grossly mismanages it’s finances (case in point your example of a lifetime pension probably worth +-1000K for 2 terms in office by the time all is said and done), but either way I do applaud any effort to get Joe Public to rise above that, and I do sincerely enjoy your blog! ;-)

Regardless, as I’m just in my late 20s, the government will have to reform these DBPs to make them sustainable by the time my generation of politicos starts drawing off the public teet. Wife’s calling gotta go

#136 John G. Young on 04.21.12 at 9:39 pm

#122 guy from toronto on 04.21.12 at 7:29 pm

Somebody forcing you to read the posts?
If so, it will be clear to you that I never initiate these attacks.
I have a right to defend myself.
If you don’t like it, I suggest you don’t read the relevant posts.

You’re welcome.

#137 John G. Young on 04.21.12 at 9:50 pm

#125 rosie on 04.21.12 at 7:50 pm

Since joining this blog, my comments have almost always been towards posters who post uncivil (to say the least) comments. If you were a regular reader you would know this.

“Beware the loss of civility..”

Beware the making of condescending comments based on inadequate information.

#138 rosie on 04.21.12 at 10:28 pm

The first symptom of a personal loss of civility is the loss of the ability to recognize a sense of humour. The second is a loss of, or lack of a sense of irony. So, to sum up Westernguy and John G., lighten up and learn to read.

#139 Nostradamus Le Mad Vlad on 04.21.12 at 10:29 pm

-
#105 truth hammer — “I guess there’s plenty of stupid to go around.” — An accurate assumption if ever I saw one!
*
Potstickers (Chinese pork dumplings) are an absolute treat when accompanied with loads of stir fried veggies and swimming in a mixture of dark and light soy sauces. Fortunately for me, I am the unofficial taste tester here! Almost as good as KFC Original 3-Piece Meal with fries and gravy!
*
Socks or Guitars? Corzine / Obomba / MF Global No wonder it went belly up; Debt Slavery Until the aliens arrive; Derivatives Placing a bet on a sure loser; Investors I thought they liked profits; Hunger Strike Almost the same as brothels going on strike; Nixon, Gold and Oil; Wells Fargo 4closures; Oil Production If production is up, why are gas prices so high? 4:19 clip Euro-dollar, petro-dollar falling and BRICS want in? G20 doubles war chest of IMF (taking our money); Android and Apple Trouble for Android and Apple stock heading down; Big companies; Keen vs. Krugman; Ex-Im Band; JPM does something useful; Nine Indicators; Dutch govt. teetering, and The Annoyances of Life; A Conspiracy of Whores That’s us!
*
Fukushima Hypothetical. If it blows, it blows; Fukushima Thyroid lumps in newborns, and BP, TEPCO, the GoM and Fukushima A pattern developing? TEPCO doesn’t have money to fix it; Sunlight and Lime naturally purify water, and Cinammon; Colony Collapse Disorder (bees) and Autism and CCD A common denominator? Amazons in Belgium And this continent is bad? Fracking I wonder why; Open Borders Not so much; Elite Power Isn’t this interesting. It would explain all the ‘net-tightening rules like CISPA; The Fourth Dimension “Then how will we keep everything from happening all at once?!?!?” wrh.com. Hint: Run Like Hell! Czech. Republic and Egypt Tens of thousands protest govts., while NAmerica sits quietly by; Agenda 21 The Master Plan; Socialocracy The origins of the mudshark? Mainstream Science Created by TPTB; Rothschilds In yer dreams, bozos! “his “covenant”, as it is being called, claims authority over the entire global environment and everything that affects it.”; Solar Storms like no one has seen before, and 2:15 clip.
*
disciple – FYI and quite interesting. Guess the experience of death will let us know! Plus — Science / God.

#140 John G. Young on 04.21.12 at 10:54 pm

#137 rosie on 04.21.12 at 10:28 pm

“…lighten up and learn to read.”

How civil.

#141 jess on 04.21.12 at 11:11 pm

cuddles and whispers
http://www.rollingstone.com/politics/blogs/taibblog/talking-gangster-banks-with-max-keiser-20120420

#142 Don on 04.22.12 at 12:01 am

John G. Young and Westermann

“No soup for you”

“You screw up, just this much… you’ll be flying a cargo plane full of rubber dog shit outta’ Hong Kong!”

Man up – gentlemen

LOL – come on laugh boys!

#143 John G. Young on 04.22.12 at 12:25 am

#141 Don on 04.22.12 at 12:01 am

I appreciate the sentiment.

Sounds like a quote from a movie, but I don’t know which one…

#144 Guy in the orange shorts on 04.22.12 at 12:46 am

Had a date with Sherry Cooper…

My shorts are now a coloured blend of brown and yellow

#145 Dan in Victoria on 04.22.12 at 2:48 am

So have chatted with a couple of my “more retired” than me friends the last couple of weeks. They do the snowbird gig.
These guys aern’t slouches when it comes to reading a market. Hmmm….. they’re there and I’m here…..
They are “OUT” in Canada. They both said the same thing to me, “Think about buying USA”
So I spent some time on the net looking around.
Holy Crap……

Palm Dessert California.
http://www.trulia.com/property/1092902424-73450-Country-Club-Dr-353-Palm-Desert-CA-92260

I didn’t bother with taxes or any fees, not that far along yet. But this listing above caught my eye.
The big boss and I buy one Timmie large every day, my only bad habit LOL.
The mortgage payment on that joint is just about equivelant to our Timmie addiction.
If you check out the mortgage calculator section there was a question about Canadians getting financed, there are 10 replies about it.
I also checked out some other areas……..
Road trip maybe……….

#146 Tony on 04.22.12 at 3:23 am

The U.S. economy is getting worst not better. Europe is on the cusp of a total meltdown. Anyone long stocks will lose most of their money. The two favourites to buy right now are TIVX and the FAZ.

#147 Tony on 04.22.12 at 3:51 am

Re: #95 Re-diculous on 04.21.12 at 1:55 pm

As home prices fall so does rent (in most cases).
You’ll have to scale down the price even lower as rents will likely be much lower when home price fall 56 percent or more in Vancouver.

#148 Tony on 04.22.12 at 3:56 am

Re: #10 Tim on 04.20.12 at 10:11 pm

About 80 to 85 percent.

#149 scib on 04.22.12 at 4:09 am

MONTREAL – Nine out of 10 wealthy immigrants accepted into Quebec’s investor immigrant program never come to Quebec, federal Immigration Minister Jason Kenney said Friday.
http://www.canada.com/business/immigrant+program+funnels+rich+newcomers+Kenney/6495012/story.html

#150 Foggy on 04.22.12 at 5:36 am

I asked yesterday how to get my funds out of my RRSP while paying the minimal tax, and was so pleased that I got 5 responses offering suggestions. So thanks to these posters who took the time to help. I’ll ponder all these and decide.
—————-

#55 I’m stupid
Get an interest only loan

#69 eaglebay – Parksville
It doesn’t matter how you extract it

#88 Last (just re-read money road)
complicated but doable

#92 a prairie dawg
The process used is called “transferring in-kind”

#107 Devore
transfer the funds to a TFSA or a non-registered vehicle

#151 John on 04.22.12 at 7:21 am

Arctodus wrote:

“Collapse is not dramatic..or pretty…or TV series apocalyptic…it is just nasty, dreary, never ending…and real.”

The whole thing about “property virgins” and other delusional actors in the Canadian real estate debacle is the understandable lack of judgment.

What is judgement?

It’s the use of the human will. The basis is being able to feel reality about one’s own needs and limits. Power.
And especially the truth about human powerlessness.

The Canadian story is a human one. It is a story of broken will. Depolarization of it’s people ( all de-gendering is dehumanizing), dismantling of community, and utter isolation, with people believing “net worth” built on sand…managed by power-drunk and fearful control mongers.

You can literally visualize some 45 year old man viewing his “investments” on a Chinese made laptop at 1:35am on a Saturday morning while his family sleeps, wondering “what’s best”.

He doesn’t know his neighbour’s name, and he moved into the house in the fall of 1994.

That’s the Canadian reality, and that’s the real estate “will water level”.

What, then, could be expected as far as judgment on the bigger picture? Not much of course. Not yet. But as time moves on, and events happen with the feel if the above quote, people are going to actually have to start living.

Wait a minute. Living. Isn’t that the point of looking at these issues in the first place? Forget philosophy and airy-fairy “concepts”. What works best is concrete.

Where are things at right now. Considering that opens a door to options.

#152 guy from toronto on 04.22.12 at 7:54 am

hey John G, since this is the sort of blog where one cannot block users, everyone who uses it has to scroll through all the comments to get to the content.

My request to you and Westernman and Rosie et al is to just drop the back and forth personal insults. I don’t care who started it…c’mon, you sound like a 5 year old.

Some of us are here for the content.

Grow up.

“#135 John G. Young on 04.21.12 at 9:39 pm
#122 guy from toronto on 04.21.12 at 7:29 pm

Somebody forcing you to read the posts?
If so, it will be clear to you that I never initiate these attacks.
I have a right to defend myself.
If you don’t like it, I suggest you don’t read the relevant posts.

You’re welcome.”

#153 Steven Rowlandson on 04.22.12 at 7:58 am

You could stick it in a HISA, but this is a dumb move. High-interest savings accounts pay (even if you get some hinky online bank in Moosejaw) barely enough to cover inflation, which is 2%. And you must shoulder tax on that miserable yield, at your full marginal rate, which can suck off a third or half. That means you lose money. But at least you lose it safely.

Ditto for a money market fund. These are completely-liquid funds which invest in baskets of safe government securities, and pay even less, typically 1.5%. Also fully taxable. More secure, dependable, guaranteed losses.

This sucks! To get enough after tax revenue from 1.5 % you need many millions invested and that is hard to get just to start with. And all of this sucks unless there is serious double digit deflation that raises the relative value of cash. What we have is a debt saturated world that practices financial repression against savers and the reason is clear. If savers had any say over interest rates rates would have to be double digit and that would put governments, home owners and some businesses into bankruptcy. In my view those that work ,save and invest in valuable or productive assets should be rewarded and those that indulge in prolifigacy and contracting huge debts they can’t or won’t pay down should be put out of business.

An example of earning enough from 1.5%.
Assuming you need to earn $125,ooo to pay for the average $375,000+- home in Canada.
(2×125,000)/.015=$16,666,666.66 in capital required to be invested at 1.5% to get $125,000 after tax.
How many working stiffs get paid as if they had $16,666,666.66 earning 1.5% to get an after tax income of $125,000 ? I am assuming a 50% tax rate on interest income. Such people are a minority and many people make far less. That is why the price structure for property is unsustainable, interest rates are too low and people are not getting paid enough to cope with the cost of living on one income and savers generally don’t have enough capital to invest and are not being rewarded for saving to start with.

If some thing pays you get more of it and if it doesn’t pay you get less of it. Banks don’t need savers to fund lending because of the lack of reserve requirements.
Reversing that policy might be a good place to start.

#154 morfeus44 on 04.22.12 at 8:41 am

Interesting article in G&M today re: dividend stocks. Biggest takeaway for me – 2nd highest yield group performed best as 1st highest yield group is potentially a sign of a distressed company.

“The moral here: It pays to be a yield hog but not a greedy one.”

link: http://tinyurl.com/7kabem6

#155 Herb on 04.22.12 at 9:08 am

Carney warns of potential housing market trouble

The horses are galloping all over the place, and the Gov makes bold to suggest prudence in operating the barn door: “Some caution is warranted in that environment …”

http://www.cbc.ca/news/politics/story/2012/04/21/pol-the-house-mark-carney.html?cmp=rss&utm_source=twitterfeed&utm_medium=twitter

Makes a feller proud to be Canadian.

#156 geele mitti on 04.22.12 at 9:26 am

US economic recovery debunked

http://tinyurl.com/7yx57u8

Doomer crap from a gold-pumping web site. Useless. — Garth

#157 House Poor on 04.22.12 at 9:26 am

# 98 Canadian Watchdog

How much and quickly can Carney affect the 5 year mortgage rates by flattening the yeild curve

#158 Steve Thompson on 04.22.12 at 9:31 am

Here’s an interesting read on the risks of investing for dividends:

http://www.theglobeandmail.com/globe-investor/investment-ideas/behind-the-numbers/dividend-stocks-arent-fail-safe-but-buy-them-anyway/article2409303/

Nothing to do with preferred shares. — Garth

#159 Ret on 04.22.12 at 9:57 am

Re: #111

Does Canada have a tax treaty with China?

Trade missions every year but forget about tax treaties. It is just easier to raise taxes on honest Canadians to make up any budget shortfalls. They’ll grumble but, as always, they’ll pay. Cut out some more pension benefits or add some new/more taxes and they’ll whimper for 2-3 weeks. No big deal.

If Canada had tax treaties in place and, key point here folks, actually enforced those treaties with other countries, as we do with the US, we probably could have kept the OAS at 65 years of age.

If the CRA collected tax on the rents on all of the illegal student homes in West Hamilton around McMaster U, the OAS probably could have gone down to 63 years of age. There are millions of dollars of unreported income related to RE room rentals around every university and college.

Lots of questionable property ownership issues too relating to land transfer tax issues and absentee, as in out of the country, owners pretending to be living here now, so as to check in for some of the social programs and medical care later in their lives.

Start taxing unreported rental income in Brampton, and we could probably get the OAS age to maybe 60 years of age!

#160 MarcFromOttawa on 04.22.12 at 10:03 am

C says condos in Vancouver and Toronto are no go.

http://www.cbc.ca/news/business/story/2012/04/21/pol-the-house-mark-carney.html

#161 Tyredandboard on 04.22.12 at 10:27 am

@159 MarcFromnOttawa

http://www.cbc.ca/news/business/story/2012/04/21/pol-the-house-mark-carney.html

“Carney repeated warnings against Canadians taking on too much household debt, after the Bank of Canada this week left the key interest rate untouched at one per cent for the 13th consecutive time.”

In other news, bear shits in woods.

#162 Jimmy on 04.22.12 at 10:34 am

Anyone notice theres always a BMO mortgage ad wrapped around these house R/E hyped articles on Moneyville?

http://www.moneyville.ca/article/1165183–toronto-real-estate-cooling-nah

#163 Canadian Watchdog on 04.22.12 at 10:40 am

#156 House Poor

Higher rates would be moderate, but I believe his intention is to keep yields from falling lower with the expectation of more investors moving into bonds. The last thing Carney wants is lower yields, knowing that the banks would offer lower mortgage rates if given the chance. He knows they’re competitive sociopaths.

I would keep a close eye on yields if you’re invested in short-term bonds. The Canadian and U.S. 5yr have decoupled, which is odd since they’ve always been closely correlated. http://i44.tinypic.com/zv9d9e.png

#164 John G. Young on 04.22.12 at 10:49 am

#151 guy from toronto on 04.22.12 at 7:54 am

HEY guy from toronto, just an FYI — this blog is moderated by Garth, who can and does step in at points when he feels that a back-and-forth has gone on long enough. (He’ll probably do that with this post.)

Also, users can be, and are, blocked — not that the entitled “I have to scroll down” carries much weight.

Oh, and as someone who likes to take the high ground and admonish others to “drop the personal insults”, you probably shouldn’t be saying things like “you sound like a 5 year old”, “grow up”, etc. — kind of undermines your argument.

You’re welcome.

#165 Tony on 04.22.12 at 11:18 am

Re: #149 Foggy on 04.22.12 at 5:36 am

Don’t work in the year you take the funds out.

#166 Jeffer on 04.22.12 at 11:23 am

“Pretty Much Everything is Now a Bet on the Central Banks of the World” – screwed no matter what?

http://motherjones.com/kevin-drum/2012/04/pretty-much-everything-now-bet-central-banks-world

#167 jess on 04.22.12 at 11:26 am

Marketing (LIARS)Entitlements

EXCLUSIVE-Hedge fund that invested with Madoff shutting | Reuterswww.reuters.com/…/madoff-hedgefunds-idUSLNE50B01A2009011…Cached
You +1’d this publicly. Undo
=======================
13 Jan 2009 – BOSTON (Reuters) – Hedge-fund firm GMB Capital Management is shutting down a fund that lost millions on bad bets that included having …
============================
Father and Son Hedge Fund Team Use Optimal Pricing to Garner 14 …www.advancedtrading.com/articles/205207960Cached
You +1’d this publicly. Undo
3 Jan 2008 – One of the strengths of the hedge fund business is that it welcomes and incubates … Emigres from far-flung fields and disciplines often find homes at alternative investment firms, and the success of many of these market players is testament not only to their particular talents, but also to the industry’s flexibility
… Management, which has built its trading strategy around the theory of optimal pricing developed by chief investment officer Gabriel Bitran, formerly vice dean of the MIT Sloan School, and implemented by his son, portfolio manager Marco Bitran. (google search )
=====================================

A. SUMMARY
1. Gabriel Bitran (“Gabriel”) founded GMB Capital Management LLC (“GMB Management”) in 2005 for the stated purpose of managing hedge funds using quantitative models he developed, based on his academic optimal pricing research, to trade primarily Exchange Traded Funds (“ETFs”). Gabriel and Marco Bitran (“Marco” or collectively “the Individual Respondents”) solicited potential investors with three primary selling points: (1) very successful performance track records purportedly based on actual trades using real money from 1998 to the inception of the hedge funds; (2) the firm’s use of Gabriel’s proprietary optimal pricing model to trade ETFs; and (3) Gabriel’s pedigree and his involvement as the founder and portfolio manager of the hedge funds. Over a period of three years, in connection with raising over $500 million for eight hedge funds and various managed accounts, Respondents made misrepresentations to investors about each of these points, and at times all three….read more

http://www.sec.gov/litigation/admin/2012/33-9315.pdf
http://www.reuters.com/article/2012/04/20/us-hedgefunds-settlement-idUSBRE83J1HZ20120420Public Credit and a debt

#168 NoName on 04.22.12 at 11:37 am

#128 Canadian Watchdog on 04.21.12 at 8:14 pm

“Ontario better pass that budget soon. Moody’s is watching.”

Don’t worry about what Moody think. They don’t do it very often…remember moody’s ratings on asset back securities…

Moody’s is watching…. hahaha

#169 truth hammer on 04.22.12 at 11:45 am

Carnage Carney’s mouth machine is babbling overtime talking trash while fiddling on the rooftop of a building in the grip of full conflagration……message to Canadians…Carnage Carney is a mouthpiece for the Finance Deptartment….BOC is only in place is misle Canadians into thinking that some independant body is actually in place to manage the countries affairs….this is simply not true. Flaherty and the Cons are still in full blown election mode and spending vast sums pandering to every tom dick and harry under the sun.

http://www.torontosun.com/2012/04/20/inflation-drops-on-lower-food-energy-rises

The government is spending huge amounts advertising Carnage Carney’s jawboning tactics…they want to scare the market off the ledge while actually doing nothing but keeping the gas spigot on full spew so that they engulf as many people in the flames of this burning ship as possible.

The only reason that I can think of for such tactics is very simply…the simplest one…machiavellian control of the population through absolute control…..like a cult they want everyone to be absolutley weak and indebted so that the populace hasn’t the wherewithal to withstand what must be a huge assualt coming down the pipe. Is it just me or does anyone else smell a rat?

#170 AprilNewwest on 04.22.12 at 12:12 pm

Canadian Watchdog – #162 – Apparently Carney would love to raise % rates but as soon as they even mention raising rates, from what I’ve been listening to, the dollar shoots up which is bad for exports. I don’t know if that’s the only negative, well apart from speeding up the housing market correction which needs to happen to slow down the debt spiral .

#171 Smartalox on 04.22.12 at 12:44 pm

Garth, you are absolutely right about the lack of financial literacy in Canada. I know that you have done your part to help remedy the situation with your books and this blog, but for those that crave more information, could you recommend some resources?

There seems to be such a tower of babel out there, fraught with myths and shysters promoting themselves as experts, that even intelligent Canadians are unsure of where to turn for advice.

#172 guy from toronto on 04.22.12 at 1:00 pm

thank John G Young

I had no idea I was an asshole. That is great that you’ve pointed it out.

there, you win.

(p.s. I don’t even like Westernman’s comments but at least he’s not a ninny like you).

that is my last comment on the subject, I don’t want to clutter up the blog.

A very good idea. — Garth

#173 tkid on 04.22.12 at 1:05 pm

#103, Not 1st:

Why not sell to an investor who will let you rent the house from them for a period of, say, 2 years? This way you get to harvest the equity you have built up in the house (BEFORE the Toronto market tanks), not have to move, not pay the bank interest, and tell the investor the furnace/hot water heater/etc needs replacing.

#174 SHUT UP Mark Carney on 04.22.12 at 1:14 pm

This stupid clown loves to talk and do nothing. Canadians will spend until they go broke. The money will never get paid back. Way to bankrupt Canada you moron carney . This is financial terrorism against Canada IMO.

#175 45north on 04.22.12 at 2:35 pm

Mister Obvious: from your link: George Freitas: I hope we have enough people to fill these condos

the link gives an estimate of 300 cranes in the GTA

a giant misallocation of resources, the Board of Directors at CMHC needs more recognition:

Dino Chiesa
http://mcaf.ee/5tvqx

Karen Kinsley
http://mcaf.ee/5ixgt

James A. Millar
http://mcaf.ee/13rzg

Brian Johnston
http://mcaf.ee/eh9zq

André G. Plourde
http://mcaf.ee/fe7kz

Sophie Joncas
http://mcaf.ee/kvcft

E. Anne MacDonald
http://mcaf.ee/betzi

Michael Gendron
http://mcaf.ee/j8xh5

Rennie Pieterman
http://mcaf.ee/4952p

from the link by Fish10
http://fishyre.blogspot.ca/2012/03/my-open-letter-to-mr-flaherty.html

#176 Seven Stars and Orion on 04.22.12 at 3:41 pm

I don’t have an MBA, and what I know of business could be written on a postage stamp, but the CMHC board seems a bit top heavy with developers. Shouldn’t there be more objective policy wonks represented? I guess “real world” experience in the cutthroat RE development realm is better suited to the future of the CMHC.

#177 T.O. Bubble Boy on 04.22.12 at 4:14 pm

In Toronto, apparently you can’t even make money in high-end rental properties.

Here’s a Duplex+Basement in a high demand area that pulls in around $7500/month… too bad a 3.5%/25-yr mortgage on the $1.795M listing price would cost $9000/month just for the mortgage payment!

http://www.realtor.ca/propertyDetails.aspx?propertyId=11745567&PidKey=-2146165823

Pure insanity — who the hell is buying these money-losing properties?

Even with 25% down ($450k), the monthly mortgage payment is about $6750. Add on property taxes and other costs and you’re still looking a property that isn’t cash flow positive. And, that’s ignoring the money you could earn on the $450k down payment.

#178 Rain bird on 04.22.12 at 4:37 pm

Can someone please explain this:
Preferreds are valued at $25 per share when first issued. If they are paying 5% as Garth says then wouldn’t you have to pay a premium to buy the issued shares – say $29 per share which effectively wipes out the 5% income to say 2%?

So how is this different from the term deposit of 2%?

Check out preferred pricing. You will see. — Garth

#179 jess on 04.22.12 at 5:12 pm

less scientific notation needed here

1210 West Boston Boulevard, Detroit, Michigan
http://www.zillow.com/homedetails/1210-W-Boston-Blvd-Detroit-MI-48202/88291078_zpid/

Apr 2011 for $47,520
Beds: 4
Baths: 3
Sqft: 2,800
Lot: 5,227 sq ft / 0.12 acres
Type: Single Family
Year built: 1913
Last sold: Apr 2011 for $47,520

speaking about bears …have you seen these listings from Boston Edison MI

http://www.zillow.com/homedetails/1210-W-Boston-Blvd-Detroit-MI-48202/88291078_zpid/
http://www.zillow.com/homedetails/1666-Chicago-Blvd-Detroit-MI-48206/88742263_zpid/
http://www.zillow.com/homedetails/2000-Atkinson-St-Detroit-MI-48206/88501086_zpid/
=

Yet Another Big Lie: Mortgage Fraud Investigation Not Staffed
A month after investigative team announced, had no office, no phones, no staff and no director.
http://truth-out.org/

#180 disciple on 04.22.12 at 5:41 pm

#138 Nostradamus… Thank you, brother, that was a good read. I have some startling news: Keanu Reeves and Sarah Mclachlan are the biological children of Elvis Presley. Tip of a massive iceberg. I will reveal more later… For now, chew on this: Mitt Romney is a character played by Richard Jenkins. Voice match also.
http://xdisciple.blogspot.ca/2012/04/mitt-romney-is-actor-played-by-richard.html

#181 T.O. Bubble Boy on 04.22.12 at 6:49 pm

To look at my $1.795M example differently, just in case someone has $2M sitting around:

$7500/month in rents = $90k/year = right around 5% on that $1.795M *before any taxes or expenses*

So, after you take away property taxes, maintenance, management costs, etc., you’re probably down around $60k-$70k (3% to 4%). If REITs pay out 5%-10% on your cash with no hassle (and probably LESS risk of losing your capital), who would be putting $1.8M into this type of property?

#182 Dontcallmeshirley on 04.22.12 at 6:55 pm

#111 Devore,

Yes there is a China-Canada treaty.

http://www.fin.gc.ca/treaties-conventions/in_force–eng.asp

How much of the Canadian deficit could be fixed by instituting treaties with the various tax havens out there?

It’s nice to have friends in high places keep that initiative waaaay back on the “to do list”

#183 Don on 04.22.12 at 7:14 pm

142 John G. Young on 04.22.12 at 12:25 am #141 Don on 04.22.12 at 12:01 am

I appreciate the sentiment.

Sounds like a quote from a movie, but I don’t know which one…

Hi John,

No soup for you – Seinfeld – the Soup nazi episode,

Cargo plane full of rubber dog…. Top gun.

Pay no attention to others, some just don’t get it.

Cheers,

#184 jess on 04.22.12 at 7:26 pm

Hacker grid?

VANCOUVER, British Columbia, Apr 12, 2012 (BUSINESS WIRE) — The vulnerability of the energy industry’s new wireless smart grid will inevitably lead to lights out for everyone, according to leading cyber expert David Chalk. In an online interview for an upcoming documentary film entitled ‘Take Back Your Power’ ( http://www.ThePowerFilm.org

…“We’re in a state of crisis,” said Chalk. “The front door is open and there is no lock to be had. There is not a power meter or device on the grid that is protected from hacking – if not already infected – with some sort of trojan horse that can cause the grid to be shut down or completely annihilated.”

http://thepowerfilm.org/
http://www.marketwatch.com/story/hacking-expert-david-chalk-joins-urgent-call-to-halt-smart-grid-2012-04-12

#185 Nostradamus Le Mad Vlad on 04.22.12 at 7:43 pm

-
#179 disciple — Anytime. Smoking Man, I’ve added a link at the end re: Unschooling Techniques. These are strange times!
*
It’s A Bug’s Life; Greece One town implements bartering without the Euro; Abandoning Homes “Will Obama stage riots to declare martial law? Or will “Al Qaeda” (nudge nudge wink wink say no more) carry out a terror attack against NATO.” wrh.com. Quick! Flush The Toilet! 5:38 clip Silver bullion vs. the US$; Food Stamp spending more than doubled. Curiously, Obama was elected that year; Are Walmart and Monsanto jointly working together?
*
French Toast? Sarkozy; Fukushima Falling apart? ‘Net Surveillance Most citizens of western countries have become suspects, which is why travel is so infuriating. This way, TPTB can keep us quiet and in our homes, not upsetting the elite, and Prison Camp That’s what Harper is doing here; China – US Fisticuffs over the South China Sea, and Larger presence in Pacific so Russia and China begin their own military exercises; Iran Pentagon’s Plan B. Guess Plan A bombed itself out; Leaving Sinai Seems like someone is pissed off; 14:37 clip If the US govt. already has copies of citizens’ e-mails, it would be hard to understand that CSIS – RCMP don’t use the same methods, and 3:31 clip Further e-mails; Domain Names Try Mann; US$60 LED Lightbulb Lasts 20 years, probably longer than most of us; How To delete yourself from the ‘net; Eight food frauds; Monatomic Gold Proven healer.
*
Smokiing Man Unschooling Techniques. Govts. would object, because kids would learn how to think critically for themselves, and therefore not be reliant upon them or others.

#186 Canadian Watchdog on 04.22.12 at 7:54 pm

Trump Tower Toronto Developers Faced With Buyers’ Remorse, Slow Sales. http://online.wsj.com/article/SB10001424052702304331204577356131349238626.html

Chart: Toronto New High-Rise Condo Sales Plunge https://p.twimg.com/ArF0fccCIAAIl0j.png:large

#187 Mr Buyer on 04.22.12 at 8:12 pm

Canadian Economy recovering. I just read it on Yahoo news. We are out of the woods. Everything is going to be okay. What a relief. Thank god for the fiscal policies that incurred massive amounts of debt both personal and governmental. That combined with behemoth mortgage payments for house prices that have formed the largest per capita real estate bubble in history have provided us with the first economic recovery in history that involved no increase in GDP other than those financed with debt along with the largest degradation of quality of life witnessed since the Great Depression. Somehow I have the feeling this is only the beginning of the new economic improvements coming our way. Mark this day and download these articles. They will likely prove to be interesting reads in hindsight 12 or 18 months from now. I think we need to make a list and time line for later truth commissions. The width and breadth of story telling is frightening. Truely frightening. The US is a shadow of what it was in 2007 and has progressed little (if at all, it is likely still degrading) in the way of true recovery. There will be a wave of protectionism that will be profound in both its magnitude and lack of reporting of its magnitude. This protectionism is long overdue and a matter of common sense. If you want to live like the Chinese then open your markets to them. I was going to start typing some reasoned statement but deleted it as this macabre bubble has long become theatre of the absurd. Hey the economies of the world are shaping up. Absurd, patently absurd.
To everything
spin spin spin,
there is a season
spin spin spin
and a time
for everything
under heaven.
A time to speak truths
a time to lie,
a time to fight
at time to give up
a time to surrender
a time not to fight
a time to believe
bedtime stories…..
So the best some of us can hope for is having to make 300k downpayments on 1 million dollar homes while getting paid 10 bucks an hour. Everything is great. If Garth told the vetrans returning from WWII that they and their families did not rate a place to live and investing is the way to be saved (remember the Depression, the mother of all investing collapses was a very current memory)…well lets just say that Garth is a very intelligent guy and would not have made such statements. But much has changed since then. The population has been conditioned to accept that we can not progress together and that it is a return to dog eat dog (not for everyone, just the disenfranchised). Mr Buyer is disheartend today. Deeply disheartend, and I do not see a way forward today. I am not finished, just defeated (for now). We are not recovering, we are simply changing the definitions of such words. I am feeling inadequate and not up to the task today….

#188 CFP,CLU,CIM on 04.22.12 at 8:45 pm

@Mclovin

LOL, cfa

You guys are a dime a dozen. A Commodity!

I like the fact that you guys stay in your dark dungeons all day thinking how much smarter you are than everyone else. Cheap labour that is arguably USELESS. HA!

Moron.

#189 Timbo on 04.22.12 at 9:55 pm

http://www.economonitor.com/blog/2012/04/china-inflated-notions/?utm_source=rss&utm_medium=rss&utm_campaign=china-inflated-notions

“Share This Print 0 0

Early last week, I went on Bloomberg to talk about China’s latest economic figures, and boy did I kick up a hornet’s nest. In a nutshell, I said that I was finding it harder and harder to reconcile China’s official CPI, GDP, and PMI numbers with what I was seeing and hearing on the ground. The interviewer, Susan Li, appeared flustered by my comments and Shanghai-based blogger Adam Minter called them “unspeakably stupid.” You can click here to watch for yourself.

The key to understanding my remarks is that they are a reflection, not of certainty, but uncertainty. Watching Susan’s reaction, one might easily get the impression I’m handing down a verdict, that I know the official numbers are wrong because I know what the real numbers should be. In fact, I’m struggling with a dilemma: how do I speak to what the official headline figures are telling us when they appear to be at odds not only with my own personal observations, but with other official data that are probably more significant and revealing?

In my Bloomberg remarks, I made three core assertions:

That the reported decrease in China’s consumer inflation rate (CPI) does not seem to accord with my own daily experience of rising prices in China;
That there is reason to suspect the Chinese economy may be growing substantially below China’s reported real GDP growth rate of 8.1% for Q1, and may actually be in contraction (negative growth); and
That Chinese companies I have been talking to are seeing flat performance (near zero growth) in Q1, compared to last year.

Each of these are worth looking at in turn — particularly now that the main economic figures for March and Q1 have been released and can be examined in detail.

My first assertion is that the decrease in China’s consumer inflation rate (CPI) — 3.6% in March, down from a peak of 6.5% last July — does not seem to accord with my own daily experience of rising prices in China. On Bloomberg I offered, as a counterpoint, the fact that the price of the fresh milk I have delivered to my home had, just that weekend, risen by 33%, from 6 yuan/bottle to 8 yuan/bottle.

Now I want to be clear that I am not claiming consumer inflation in China is actually running at 33%. I’m simply offering an example of the kind of head-turning price hike that remains an all-too-frequent experience despite the government’s declared “success” in getting inflation under control.

To be fair, this particular price hike is more likely due to rising delivery charges than the price of milk itself. The Chinese media has been buzzing these past few weeks about rapidly rising logistics costs, across the board, which are expected to translate into even greater price hikes in the weeks and months ahead.

But food itself has long been a source of concern, and this is hardly the first time I’ve noted a disconnect between my own observations and the official numbers. Back in August 2010, before inflation really took off, I wrote a post on the “KFC Index,” noting that the price of my own regular meal at KFC had risen by 32.6% since the year before, from RMB 21.50 to 28.50, far higher than the official rate of food inflation. After my Bloomberg appearance last week, I figured I ought to check out and see where it stood now. The same meal — large popcorn chicken, small fries, large Coke — now costs RMB 33.00, a 53.5% increase since I made my first observation, two years and 8 months ago. On a compounded annualized basis, that works out to an inflation rate of 17.4%.

Two years ago, a business buffet I often go to charge RMB 99/person; it now costs RMB 158, a 61.2% increase, or 27% on a compounded annualized basis. Our local foot massage place (a popular pastime in China) recently raised its prices 20%, from RMB 168/hour to 198. Gasoline prices at the pump in China are more than 50% higher than three years ago, rising 10% just this last month — the second hike in less than two months ”

Inflation that is reported in the best light. Say it is not so…

#190 John G. Young on 04.22.12 at 10:06 pm

#182 Don on 04.22.12 at 7:14 pm

Thanks for the references.

“Pay no attention to others, some just don’t get it.”

Good advice. I’ll try my best.

Cheers.

#191 disciple on 04.22.12 at 10:17 pm

Met a new client this weekend, a mining bigwig. He just returned from a trip to Africa, loads of natgas being found. Couldn’t pry the identity of the penny stocks he bought. He did mention Morocco and Botswana in particular, though… I introduced him to the Abiogenesis Oil Theory. I thought he would have certainly heard of it, but instead, was completely enthralled and started researching it on his iPad before I finished my diatribe.

Don’t know what was more shocking: that an oil/gas player multi-millionaire investor/speculator did not know that oil does not originate from biotic material, or the look on his face that told me that something he had never considered all of his life was right in front of him the whole time… priceless.

#192 Tamsen on 04.23.12 at 12:37 am

“eaglebay – Parksville on 04.21.12 at 9:05 am #48 TRT on 04.21.12 at 2:03 am
“Here is the real reason for runaway RE prices in Vancouver and Toronto.

The following article quotes Jason Kenney saying that 90% of rich immigrants selected by Quebec settle i Vancouver and Toronto. Same for all the other provinces. Thus rich immigrants from various immigration classes mostly settle in Van/Tor. Then he goes on to state that a house is bought and the breadwinner goes back to his country of origin to run his business. NO CANADIAN TAXES ARE PAID.”
_________________
Immigrants can move and live where ever they like. Canada is a free country.
As for paying taxes, only permanent residents are taxable in Canada. Check out residency rules as per CRA.

“Temporary residents do not escape tax. They pay in another jurisdiction. — Garth”

Because of Canada’s family reunification program which brought in as many as 60,000 parents and 20,000 grandparents annually, Canadian taxpayers are now paying for their healthcare which is a huge financial burden on the country, according to Diane Francis. “Reunification should be possible but only if relatives support their family members and pay for their health care. This is the case in Australia and in the U.S.”

http://opinion.financialpost.com/category/diane-francis/

#193 TurnerNation on 04.23.12 at 9:05 am

190disciple on 04.22.12 at 10:17 pm

I guess you are not a Primerica salesman…

#194 spaceman on 04.23.12 at 1:07 pm

Tom on 04.20.12 at 9:35 pm You need a glossary.

What is TNL@TB?

Orange Guy?

etc…

Tom, look back about 6 or 7 posts, someone did do exactly that

TNL@TB- the nice lady at the bank

Orange Guys Shorts – ING Direct

#195 TurnerNation on 04.23.12 at 1:08 pm

Meanwhile, in Riverdale, Toronto, a scuzzy semi runs at about $800k.

Oooh but the ad says it’s a Victorian semi! Cue hoards of HAM2 (Hot Anglo Money looking for any British pretense):

http://www.realtor.ca/propertyDetails.aspx?propertyId=11705978&PidKey=-979568889

Or 900k for a nearby grim, rancid SFH:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11466904&PidKey=1965504204

#196 spaceman on 04.23.12 at 1:13 pm

News from Victoria.

For what its worth, there is a small boom here in the Victoria core. I have been looking at 4BDR SFH’s and trying to make a lowball offer (10-15% below assesment) but something is happening.

Anything that is not a piece of crap, (and there are lots of those) is being snapped up within days, a unit listed and was sold the same day. It was a clean 3BDR, on Cedar Cross, withing minutes 2 offers over list came in.

4 Other properties I looked at, all had excepted offers by the time I got to look at them. The spring boom is here, and there are lots of buyers looking in Victoria.

No crash here for a while.

#197 spaceman on 04.23.12 at 1:18 pm

Investing for the short term.

Ya its tough, 1 year definately a 1-2 % return with security of principle is required, but 2 years, you can incurr a bit of risk. I would put 2/3 in an interest bearing vehicle, and then split the rest between High dividend stocks (prefered) and high yield bonds.