The goal of life

goaloflife

Pearl’s dad retired ten years ago at age 54. “Take that, Freedom 55!,” she says. And while he managed to lock away $500,000 in savings, the family lives on air.

“His pension and both my parents’ CPP payments bring in about $25,000 a year after taxes,” she says. “It costs about $15,000 to run our household.” Just fifteen grand? To live in Vancouver?

“Yes, Garth, $15,000 pays for the basic necessities for two parents, two adult children (who are working on moving out – this is a multi-year process involving defying the parental guilt trips typical of Asian cultures), three dogs, plus property taxes, electricity and natural gas, and vacations. Sure, we notice the effects of inflation.  BC Medical premiums went up by 4% this year.  You can’t buy full-sized birthday cakes for 99 cents at the clearance rack at the supermarket anymore.  Transit passes went up by 10%.  But as long as my parents don’t have to dip into their savings to pay for living expenses, nothing I say about inflation gets through, and, by my brief estimates, nothing I say will get through for at least another 10 years.”

Pearl says she reads this blog daily. “I know you shake your head whenever you see the lemmings dive headfirst into 1.2% GICs, and I thought I might offer some insight into lemming psychology…if you’re curious.”

Of course I am. A half million dollars ‘invested’ at less than 1.5% means a loss of purchasing power every single day. It’s extreme behaviour, emotionally and psychologically driven, divorced from the actual conditions of the world we live in. Why would anyone choose to have less, when they can have more?

“Yeah,” Peral admits, “it breaks my heart to watch my mother moan about GIC rates and fight with TNL@TB for an extra 0.01%.  This is a woman who still wants to diligently roll over T-bills at 10% like it’s 1979.  Cheap Immigrants can be very risk-averse, craving security and guarantees.”

But it’s not about immigrants, of course. The streets and cities are full of people who have chosen fear over confidence, mostly because they’re uneducated or misinformed. Hence this pathetic blog, Pearl. You are hereby instructed to tie your parents down and force them to read this, no matter how they scream, beg for water or hurl abuse on Harley owners.

Banks take money from people like your folks, pay them peanuts and then loan the same funds out for things like mortgages to intemperate people without money or HELOCs so dentists can buy Porsches. The only reason anyone would tolerate this is fear of loss. Banks have done a number on the heads of millions of Canadians, the result being a majority of TFSAs in savings and $900 billion in GICs. No wonder people are steered into such wealth traps the moment they enter a branch.

What are your parents afraid of? Risk, of course. Yet by burying their life’s savings in non-producing assets, in a world where prices and taxes only increase, they lose not only capital value, but quality of life. Supporting four people and three dogs on $1,250 a month is nothing to be proud of when there is $500,000 donated to the bank. That money, even at a 5% return, could swell family income, improve every hour of every day, and still preserve the capital. Is it not irresponsible and almost selfish to impoverish those around you because you refuse to learn what risk is? I think so. Time to change that.

Tell them to start by not thinking in extremes. While stock markets have richly rewarded investors over the past four years, and a balanced portfolio returned 10% last year, 8% over the last three and almost seven per cent over the last nine (including the meltdown), it’s not a choice between ‘the bank’ and ‘the market.’

For example, a simple (and essentially riskless) money market fund today pays the same as banks are giving for locking up your money for four years in a GIC. So while the rate remains abysmal, you have something the GIC denies – liquidity.

Of course, why give your money to the bank for a pittance when you can invest in the bank and receive far more? Buying bank preferred shares today produces a yield of about 4.87%, plus the dividend tax credit, boosting the effective yield closer to 6%. These are shares with characteristics of bonds, fixed dividends which never vary, a par value so you always know what they’ll redeem at, and extremely low volatility compared to common stocks. Preferred prices can be affected by interest rates, but they’re not moving soon, or by much. Besides, there’s so much demand for preferreds (for obvious reasons) values are unlikely to move much even if rates rise. More importantly, you get a continuous stream of cash.

Mix in a small percentage of quality REITs, which own the bank towers, have great cash distributions and have grown nicely in value, plus some investment grade corporate bonds (five-year bonds with a coupon of about 3.5% are yielding 2.5% to maturity, and liquid), and you have a very conservative portfolio which should kick out 5%, doubling their income.

Pearl, your parents should be old enough to understand life’s object is not to suffer so you can die with an undisturbed pot of money. Rather, the goal is to wisely spend the one commodity no human can replace. Time. A life richly lived brims with endless experiences, as uncurbed or shackled as possible by lack of means. Self-imposed and needless frugality is no virtue. Being cheap should bring no pride. Penury’s not the goal. Your folks are prisoners of their own unfounded prejudices, misconceptions and inertia.

Yes, I do shake my head at stories like this. Of all our emotions, fear is the most debilitating. If you doubt it, keep reading. This blog is a swamp.

229 comments ↓

#1 TurnerNation on 02.03.13 at 6:52 pm

What became of the oil burner? What a racous weekend blog it was.

#2 [email protected] on 02.03.13 at 7:03 pm

What I have been reading is the SM has reached their peak. It is time to sell. There is no good reason when looking at NA numbers and the feds printing why the dow reached its peak. Manipulation is what we are seeing here….

#3 jb on 02.03.13 at 7:04 pm

first

#4 Smoking Man on 02.03.13 at 7:04 pm

Bank Preferds, amazing,

Working on trade floors since 2002 wasn’t till I found this swamp blog that I discoverd them.

Not a few weeks ago talking with some traders,who have been in the game a long time, I educated them on prefs,

So you can’t fault the normals for not knowing about em…

#5 Marie on 02.03.13 at 7:09 pm

What is an economy called when it has asset deflation at the same time as price inflation?

#6 Robbie on 02.03.13 at 7:10 pm

And I thought I was doing well keeping my 1961 TR3 for 30 years before selling it. Good for them…wonder how much the car has gone up in value since they bought it.

#7 Smoking Man on 02.03.13 at 7:24 pm

Alicia Keys, playing the National Anthem on a Yamaha Piano… At super bowl.

What not a piano made in the USA.. Obvious

#8 Gunboat denier on 02.03.13 at 7:26 pm

5 Marie – biflation

#9 Musty Basement Wannabe on 02.03.13 at 7:28 pm

I have acquaintances in the mouldy city of Nanaimo who are in the real estate and mortgage broker industry. (1 each)

Man its slow in their fields of work. I found out over the past few days they have both taken to patrolling Kijiji and wanted ads for free stuff and trying to turn a buck or two commission out of the stuff.

It’s worrisome.

#10 Saskatoon-Living on 02.03.13 at 7:30 pm

99 cent Birthday cakes………..it’s definitely different here in SK!!!

#11 Jordy on 02.03.13 at 7:39 pm

This is the problem with a life time of saving, scrimping and doing without, how do you stop? I have a neighbor with millions in the bank, goverment pension and a nice house that is paid off.
He is still scrimping after a quad bypass, apparently he is an immortal a$$hole :-)
At some point you have to accept your mortality and enjoy your wealth.
Either way the kids are going to enjoy it, and it won’t take them long.

#12 Soylent Green is People on 02.03.13 at 7:44 pm

Repost from Chris Hedges (Pulitzer Prize winner and former war correspondent for the New York Times) on Canada’s right-wing neocon Prime Minister Stephen Harper:

Harper is a poster child for corporate malfeasance and corporate power, just sort of dismantling everything that’s good about Canada. So he’s the kind of species that rises to political power and is utterly subservient to corporate interests at the expense of the citizenry.

Yeah, he’s a pretty venal figure.

http://www.straight.com/article-732826/vancouver/chris-hedges-harper-venal-us-politics-totally-rigged

.

#13 Dr. WAYNE on 02.03.13 at 7:52 pm

#3 jb on 02.03.13 at 7:04 pm

first

====================

No, you infantile a$$hole, you’re third. Disappointed? Sure you are … your self worth is tied up in this idiotic race of yours and a few of your friends.

#14 JR on 02.03.13 at 7:56 pm

Hells kitchen, a popular pub / restaurant in kitsilano, Vancouver closed for good.
http://www.kitsilano.ca/2013/01/24/hells-kitchen-closes-doors-for-good/

This was a decent place, always busy.. looks like the rent was too much to afford to run a business. Vancouver is dieing. Businesses closing, schools closing (not enough enrollment). A friend of mine from a different country commented that it seems like the only people that are in Vancouver are from Europe or wherever on a working holiday, making a go of it here for a few years.. Until they realize the crazy cost of living and very limited economic opportunity.

#15 Canadian Watchdog on 02.03.13 at 7:58 pm

#5 Marie

What is an economy called when it has asset deflation at the same time as price inflation?

Financial Repression.

#16 Victoria Real Estate Update on 02.03.13 at 8:03 pm

Hello to all of you Victoria readers. I’m a Victoria girl in her 20’s and I am here to share with you what I have learned about the housing market in Victoria over the last 3 years. We were seriously thinking about buying 2-3 years ago, but decided against it once we started to learn that Victoria’s market was, and still is, in a huge price bubble that was about to burst and go through a major, multi-year correction. We are so happy that we didn’t buy in 2010-2011 as prices have come down enough that we have saved a ton of money by renting. All of our friends that bought within the last 3 years now owe more on their mortgages than the value of their homes. They are angry about this. Everyone told them it was a good time to buy. The VREB didn’t even hint that prices could correct and their realtors told them that they should buy now or they would be priced out forever. I feel sorry for our friends. It isn’t fair.

As Garth pointed out in his last blog entry (see chart), the price decline in Victoria has really accelerated over the past couple of months. In August of 2011, the average price for a single family home in Greater Victoria was over $650,000.00. Now, at the end of January 2013, that average price sits at $530,000.00. Average prices tend to fluctuate, but this clearly shows where prices are headed.

We have saved a lot of money by renting and we will save a lot more as prices continue to decline for years. The VREB is still trying to tell the public that the market is stable. Can you believe that?

Canada’s housing market, in general, has started its long, multi-year decline. Garth predicted this. He also predicted the correction/crash of 08-09 in Canada which would have continued down if it wasn’t for the massive intervention by the government at that time. When it comes to predicting the future of real estate in Canada, Garth is always spot-on.

Garth has said that Canada will see a 15% price correction, overall, over the next year or so, followed by a multi-year melt as prices continue down. He also said that some cities will experience an initial correction bigger than 15%, namely Vancouver and Victoria. So we can expect to see prices in Victoria drop more than 15%, from current prices, over the next year (approx.), followed by a multi-year price melt. Renting for now while prices go much lower is a no-brainer. It is a fantastic feeling know that we are actually making money, compared to mortgage holders, as the market declines. Owning a home doesn’t always make you money. It depends on timing.

Girls, I know you want that house and you want it right now. Holding off from buying now is by far the better way to go. You will be rewarded with much lower prices in the future. It won’t be that long of a wait. You will have the rest of your life to enjoy the good decision you made and all the money you saved. Guys, you won’t be impressing your girl if you buy now when the value of your home will be much lower in 1 to 2 years. Imagine how that would make you feel. Renting at this point is simply smart.

Until next time – cheers!

#17 POOR TO MAN on 02.03.13 at 8:03 pm

If you think about the best example is the demand for housing, where does it come from? It comes from new mortgages. If you want to sustain the current price level of houses, you have to have a constant flow of new mortgages. If you want the price level to rise, you need the flow of mortgages to also be rising.

Therefore, there is a correlation between accelerating and rising asset markets. That correlation applies very directly to housing. You look at the 20-year period of the market relationship from 1990 to now; the correlation of accelerating mortgage debt with changing house prices is .8. It is a very high correlation.

The boom and bust is obviously too. It is not quite so clear for the stock market, but it is about .35

http://www.peakprosperity.com/page/transcript-steve-keen-why-2012-shaping-be-particularly-ugly-year

#18 Richard and Zeus on 02.03.13 at 8:07 pm

Harper is a poster child for corporate malfeasance and corporate power, just sort of dismantling everything that’s good about Canada. So he’s the kind of species that rises to political power and is utterly subservient to corporate interests at the expense of the citizenry.

Yeah, he’s a pretty venal figure.

http://www.straight.com/article-732826/vancouver/chris-hedges-harper-venal-us-politics-totally-rigged

Be careful…..Garth might call you a nutbar.

#19 Tim on 02.03.13 at 8:12 pm

re #12 Soylent Green is People on evil Harper

You are right. He is a puppet of big oil. Why do you think the Chinese are buying up our resources? Why is there so much pressure to get more pipelines in so the oil companies can squeeze another $20 per barrel? We don’t need rapid development of our massively polluting oil sands. When the LNG floods the market and the price of oil drops, the Newfs will go back east and the petro state of Alberta will tank

#20 westcanguy on 02.03.13 at 8:12 pm

99 cent Birthday cakes………..it’s definitely different here in SK!!!

____________________________________________

Thats right! Not only will you never find .99 Birthday cakes, you get to trudge through 5 feet of snow to look for one.

#21 Richard and Zeus on 02.03.13 at 8:12 pm

#5 Marie

What is an economy called when it has asset deflation at the same time as price inflation?

Financial Repression.

No……..it’s called “controlled”. There is no free market.

#22 Dan from Richmond Hill on 02.03.13 at 8:15 pm

The streets and cities are full of people who have chosen fear over confidence, mostly because they’re uneducated or misinformed.

What about trust?

They probably trust not because they know not. — Garth

#23 JayBe on 02.03.13 at 8:20 pm

I’m afraid of being the sort of guy who checks a blog out 2 hours before it’s supposed to be posted.

#24 CrowdedElevatorfartz on 02.03.13 at 8:30 pm

@#11 Jordy
Your Comment “He is still scrimping after a quad bypass, apparently he is an immortal a$$hole :-)”

Begs the question….” Do you live in Eaglebay or Parksville.” par chance?

#25 Aussie Roy on 02.03.13 at 8:37 pm

Aussie Update

First time buyers still not buying into the delusion

FEWER than 400 first home buyers have been paid a $15,000 grant introduced by the NSW government last October as a centrepiece of its plans to stimulate the new housing market.

http://smh.domain.com.au/real-estate-news/first-home-buyer-grant-aimed-at-boosting-construction-off-to-a-sluggish-start-20130129-2ditf.html

Luxury mansion passed in at gala Gold Coast auction

A sprawling Gold Coast mansion bought and renovated for $16 million has been passed in at auction for $5 million.

The owners former husband-wife property moguls Paul and Viki Sweeney, who founded Coral Homes, purchased the 17 hectare estate in August 2006 for $8 million and spent a further $8 million turning it into their dream home, completing the renovations in 2008.

Clearly these property “Moguls” thought house prices really do only ever go up.

http://brisbanetimes.domain.com.au/luxury-mansion-passed-in-at-gala-gold-coast-auction-20130201-2dq4z.html

Growth in housing finance continues fall to record lows

Despite low interest rates, housing credit rose by only 4.5 per cent in the 12 months to December 2012, down from 4.6 per cent in the 12 months to November 2012 and the lowest growth in the 35 year history of the data.

http://www.whocrashedtheeconomy.com/blog/2013/02/growth-in-housing-finance-continues-fall-to-recordlows/

http://www.rba.gov.au/statistics/frequency/fin-agg/2012/fin-agg-1212.html

#26 Cow Man on 02.03.13 at 8:38 pm

# 15 Canadian Watchdog

Financial Repression is used by governments to liquidate debt.

http://en.wikipedia.org/wiki/Financial_repression

#27 lawboy on 02.03.13 at 8:45 pm

Well, my finances are a long way from where I would like them to be, but at least I don’t have any need or inclination to retire in my mid-fifties!??? What awful jobs some people must have…

#28 Nemesis on 02.03.13 at 8:48 pm

“This blog is a swamp.” – Hon. GT

Perhaps, but as any Creature could tell you – there’s a lot of fun to be had in a swamp…

http://youtu.be/e7uIsGCXojw

#29 Asse on 02.03.13 at 8:55 pm

Fear of losing what you have; love, family, respect, dignity and lastly money. Those that have none of those have no fear. Pity them. Too much crap on this blog lately, miss the tin foilers, doomers, and general malcontents.
Didn’t think the Ravens would be making this a blowout…liked the 49ers but the beach girl hasn’t started singing yet……wow..just saw the Jones td, I think she’s a screeching and it’s not even halftime!

#30 ChickenLittle on 02.03.13 at 8:56 pm

#5 Marie

What is an economy called when it has asset deflation at the same time as price inflation?
It`s called multiple procedures.
My friend had this done…she looked really strange afterwards. Her breasts were too big and her butt to small…I told her not to have both of them done at the same time, but she didn`t listen to me.

#31 T.O. Bubble Boy on 02.03.13 at 9:04 pm

Living off of $500,000 for (likely) 30+ years???

Apparently we should all just be Top 1%’ers, also known as teachers:
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/high-mutual-fund-fees-the-retirement-sand-trap/article8120845/

$1.4M in pension at age 53!!!

Me thinks that Bill 115 might need to be followed by Bill 116, 117, 118, and more if this is the kind of pension promised to all 53-yr old teachers.

#32 jan on 02.03.13 at 9:10 pm

God,I’m really starting to hate the hypocrisy that is this country!!!

#33 ChickenLittle on 02.03.13 at 9:16 pm

I feel sorry for people like this. Why don`t they just spend their money is beyond me. THEY worked for it, so THEY should enjoy it. 1.5 % is still $7500. Thats 3 trips to Cuba a year.

They probably don`t know where to start is all.

#34 espressobob on 02.03.13 at 9:17 pm

It seems pref ETF’s like CPD, XPF, & ZPR (my fave) are working out quite well in the non registered account.

Love that dividend tax credit!

#35 Smoking Man on 02.03.13 at 9:25 pm

#22 Don

You got to gamble and take chances if you wana make it to next level.

Normals. Have no idea of the concept

#36 Devore on 02.03.13 at 9:25 pm

#19 Tim

You are right. He is a puppet of big oil. Why do you think the Chinese are buying up our resources?

Maybe because Canadians aren’t?

#37 AK on 02.03.13 at 9:26 pm

Qatar to Invest up to 1 Billion Euro in Greece

http://www.investingreece.gov.gr/default.asp?pid=25&la=1&n=1483

Global-X ETF, “GREK” has almost tripled it’s value since June of 2012.

#38 Canadian Watchdog on 02.03.13 at 9:35 pm

#26 Cow Man

I’m not clear what you’re getting at. Come again.

#39 JSS on 02.03.13 at 9:39 pm

Can anyone comment about XTR?

XTR is an iShares ETF, which is approx 50% bonds and 50% equities. Monthly distribution, with yield approx 5.7%

It’s basically an ETF which holds a bunch of ETF’s.

#40 Mic D'angelo on 02.03.13 at 9:41 pm

Garth, all you financial advisers and so called financial experts always make things seem worse than they really are. Pearl’s family are like most Canadians. They don’t shop around for their investments. If they are only comfortable with GIC’s and not with any other type of investments, it is their money that they worked hard for and this is their life. GIC rates of 1.20% to 1.50% are really the bottom of the interest rates available. There is no excuse with $500,000 earning at most only $7,500 interest annually. They can search the internet and they will get much higher interest rates than 1.50%. They can either go through a brokerage company or investment dealer and have all $500,000 in a single account and statement or go to financial institutions in person. I can give a few examples of much higher interest rates than 1.50%, ICICI Bank of Canada is currently paying 2.85% for a 5 year GIC, 5 year TFSA’s, RRSP’s are paying 3.15%. Home Trust Company is paying 2.45% but is giving a 0.25% bonus interest so it is really 2.70% for a 5 year GIC, 5 year TFSA,RRSP. State Bank of India Canada is paying 2.50% for a 5 year GIC, a TFSA, RRSP 5 years is paying 2.85%. Sunlife Financial is paying 2.45% for 5 year GIC’s, TFSA’s, RRSP’s. Manulife Bank is paying 2.45% for 5 year GIC’s, TFSA’s, RRSP’s. Ally Financial is paying 2.50% for 5 year GIC’s, TFSA’s, RRSP’s. They can transfer $25,500 *2=$51,000 in 5 year TFSA’s at ICICI Bank Canada at 3.15% compounded for 5 years and it would be worth $59,554.74. This is $8,554.74 interest for 5 years which is $1,710.95 per year. I don’t know if they have RRSP’s but assuming they have $100,000 in RRSP’s they could get 2.70% for $50,000 Home Trust company and $50,000 3.15% at ICICI Bank Canada. This would generate $15,505.96 in interest over 5 years which is $3,101,19 per year. They can take $97,000 and invest in a 5 year GIC at Home Trust company at 2.70% which will give them $2,619.00 interest per year. They can take $86,800 and invest in a 5 year GIC at ICICI bank Canada and earn $13,094.41 in 5 years which is $2,618.88 per year. They can take $97,500 and invest in a 5 year GIC at 2.50% State Bank of India Canada and earn $2,437.50 interest per year. They have $67,700 left so they can take $52,700 and invest in a 5 year GIC at 2.45% Manulife bank and the remaining $15,000 which is about 1 years living expense deposit it in a Manulife Advantage savings account paying 1.65%. This would generate $1,291.15 and $247.50 in interest per year. The total interest Pearl’s family would earn is $14,026.17 per year in GIC’s and a savings account. ($1,710.95+$3,101.19+$2619.00+$2618.88+$2437.50+$1,291.15+$247.50). All the GIC’s are no more than 5 years so if interest rates were to increase they would benefit in 2018. All these accounts are covered by CDIC. Basically, they would have access to a $15,000 very liquid account about 1 year in living expenses are covered. The pearl’s family income would increase by $6,526.17 per year or $32,630.85 over 5 years. This is over 2 years of their living expenses. Their annual interest income would almost double and increase exactly by 87.015%. They would have the same type of investments GIC’s and with no more risk than they currently have sleeping at night being comfortable earning a much better 2.805% return per year. I personally would buy government bonds that would pay at about 0.75% to 1.00% more than 5 year GIC’s which is about an extra $3,800 to $5,000 more interest per year but this is my comfort zone not theirs. People, you always have to shop around for everything in life especially when you have $500,000 to invest. You see things are not as dire and dismal as they first seem , Pearl and family, Garth!

Great plan – marginally more interest, fully taxed. Swamp talk. — Garth

#41 Derek R on 02.03.13 at 9:44 pm

#17 POOR TO MAN on 02.03.13 at 8:03 pm wrote:
The boom and bust is obviously too. It is not quite so clear for the stock market, but it is about .35

http://www.peakprosperity.com/page/transcript-steve-keen-why-2012-shaping-be-particularly-ugly-year

Nice Steve Keen ref, P2M but it’s six months out of date. Take a look at this Business Spectator article which he just wrote where he compares private debt in The US, UK, Australia and Canada. It clearly shows why Canada and Australia have “missed” the recession so far and why it won’t go on much longer.

#42 The goal of life — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 02.03.13 at 9:47 pm

[…] via The goal of life — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estat…. […]

#43 Bottoms_Up on 02.03.13 at 9:49 pm

Or to put it another way Pearl, your parents have lost (that is, not gained) probably around $500,000 in the past decade. Think about that! They could be sitting with $1,000,000 in diversified investments, spitting off $4000-5000/mo in spending money. That would only enhance their cash flow 400%.

#44 not 1st on 02.03.13 at 9:54 pm

Just like I pointed out in the previous posting, there are millions upon millions of old timers longing for 1980 style inflation and bank interest rates so they can roll in there and safely earn 7 or 8% without ever gambling in the stock market.

If it doesn’t present itself, they will simply sit in GICs until they drop dead. They will never buy ETFs or blue chip dividend stocks.

Their loss. — Garth

#45 *NAKED APE* on 02.03.13 at 9:57 pm

@ #12 Soylent Green…..

I’m into to growing fresh cut flowers for the local markets and noticed today that Harper has done a trade agreement with Columbia that will knock the Canadian florist industry to their knees.

http://www.capitalnews.ca/index.php/news/canadian-flowers-bleeding-not-blooming

And here’s a comment from Dave Harrison, “Greenhouse Canada” – an industry magazine in regards to this agreement,

“Why did Canadian trade officials sell out the cut flower industry? Colombian negotiators, it appears, were willing to give up access to mining, wheat, barley and financial sectors in exchange for unhindered cut flower exports to the Canadian market. The cut flower issue, no doubt, was a potential deal breaker.”

NOT GOOD!

#46 Bottoms_Up on 02.03.13 at 10:02 pm

#31 T.O. Bubble Boy on 02.03.13 at 9:04 pm
————————————————-
If you actually read the article you will see she currently earns $95,000/yr, and her pension will pay her $57,000/yr.

Don’t forget she paid into it her entire working career, and that her pension fund was/is one of the largest and best managed as they come.

#47 not 1st on 02.03.13 at 10:03 pm

So Garth, then who is going to buy those stocks?

Old Timers…too conservative, too uninformed
Boomers….still trying to figure out how to retire
Gen X…house poor and still trying to get a foot hold in the workforce
Gen Y…broke, uninterested and shackled with paying the bill for all our excess

I did not talk about stocks. — Garth

#48 Freebird on 02.03.13 at 10:04 pm

“…you have a very conservative portfolio which should kick out 5%, doubling their income.”

Can someone explain if this return is assumed to take into account MER fees, personal taxes and advisor fees (if using one) or any brokerage fees?

Thanks

There are no MERs. Advisor fees (if one chooses to use a fee-based advisor) are normally 1% and fully tax deductible, and include trading fees. As with the rest of life, you usually get what you pay for. — Garth

#49 The dude on 02.03.13 at 10:14 pm

Pearl, your parents should be old enough to understand life’s object is not to suffer so you can die with an undisturbed pot of money. Rather, the goal is to wisely spend the one commodity no human can replace. Time. A life richly lived brims with endless experiences, as uncurbed or shackled as possible by lack of means. Self-imposed and needless frugality is no virtue. Being cheap should bring no pride. Penury’s not the goal. Your folks are prisoners of their own unfounded prejudices, misconceptions and inertia.

Garth u are so right. Time is everything. I’m sitting here in Nicaragua with my 4 and 2 year old typing from my I phone. I own nothing back at home other than a big self directed account but because it isn’t tangible and we rent to most we are failures. I have read your books and the only thing I regret is not taking your advice sooner.
Most wont listen but thanks from us and giving me that extra time to spend with my family. Yes I still have to work for a living but it gives us that little extra to let us build memories.

Sorry if it is a little run on but I phones aren’t the best to type on.

Cheers from Granada.

#50 AK on 02.03.13 at 10:17 pm

DELETED

#51 Inglorious Investor on 02.03.13 at 10:18 pm

“They probably trust not because they know not. — Garth”

The more I learn about investing, banking and the financial system in general, the less I trust. However, knowing more also gives one more confidence because knowledge is power––the power to take control of your life; to take calculated risks; to manage that risk, and; to not become a victim of the avarice, fear, prejudices or ignorance of others.

But trust does not come from knowledge; it comes from experience.

Apparently that doesn’t work with you. — Garth

#52 Asse on 02.03.13 at 10:20 pm

Glad to read they manage on $15k a year. I am envious. I put down approx 4k on mc this month…yes Christmas was way out of hand but everyone’s happy. Will be over 2k a month for daycare soon and property tax reassessed by 25%. Net Worth approx 1mil but feel poor. Net Worth broken down 60% house with a 90k mortgage, 2 pensions, rrsps, tfsas and riffraf. Both kids have more in their resps than I have in my savings account. Nothing making 10%..not even close. I know we’re lucky but getting to this point involved hard work and sacrifice.
Was looking at real estate in Woodbridge, can’t believe all the minimansions over 1 mil. Stuck in Toronto because of careers. Have a 1200sq foot house worth about $725k. 2 neighborhood top ups sold for over 1.2mil within last month but we don’t live in a million dollar neighborhood. Currently just started building ‘executive’ townhomes starting at $750k and detached 35 foot lots at $1.2mil by power transmission lines. Nuts. We’d like an 1800 sq foot bungalow but prices for fixers start at about a mil and corresponding property tax is one kids daycare for a year. Land transfer tax on one is an additional 65k. How do people manage?
Feel sorry for those starting out. An education doesn’t pay what it used to, but a career without one is impossible.
Jones for MVP. JZ’s one lucky fella.

#53 IvoteIndependent on 02.03.13 at 10:24 pm

#45 NAKE
And our grocery oligopoly is cutting out small local producers, Product of Canada is being muddied to “Product of North America” (read Mexico), and Ontarians are paying foreigners handsome subsidies to produce unneeded wind power to give to the USA. Keep voting for political parties to get more of the same…

#54 Alberta Ed on 02.03.13 at 10:24 pm

It’s often difficult for some people to make the transition to retirement. Hopefully these folks will find a good financial adviser who can show them how.

#55 Freebird on 02.03.13 at 10:30 pm

BTW I sympathize with Pearl. Before both my parents passed of cancer they too lived very frugally and had been advised many years prior to invest in RRSP’s and GIC’s with no pension other than CPP etc. Being self employed they worked very hard to provide for us. Unfortunately my mom was left a painful surprise of very little life insurance, and was shocked at the taxes she owed from her modest monthly income. After she passed we were surprised how little was put away. In hind site they could’ve used good financial help but they would not have known where to start and for all the RRSP’s did may have done better with just GICs but who knows now. I truly hope Pearl, that you mom never has to face the same shock mine did. Maybe ask them if both have life insurance and if you’re mom is fully aware of what her possible income would be should your father pass first. And, yes, take Garth’s advice to heart and talk to them. I do get though how hard it can be when you’re parents come from a certain culture and or mind set. My mother-in law also has about the same amount tied up in GICs (and now is in long term care) but my sister in law is legally in control of it and made it clear the money is staying where it is.

I wish you luck with helping your parents Pearl. I know it’s not easy.

#56 Devore on 02.03.13 at 10:31 pm

#40 Mic D’angelo

Garth, all you financial advisers and so called financial experts always make things seem worse than they really are. Pearl’s family are like most Canadians.

This is not a popularity contest. Just means most Canadians are screwed.

Pro tip, paragraphs.

#57 Give er Jerbowski on 02.03.13 at 10:31 pm

#12 Soiled Green – you’re such a left-wing whiner. Reminds me of how frustrating it was to be a right-winger back in the day – and watch the gaping idiot Cretien in action. But to be fair, at least Cretien was funny once in a while. Meantime, a young Harper was busy taking lessons from Cretien on how to use the PMO to dominate the political process.

#58 Freebird on 02.03.13 at 10:39 pm

“…you have a very conservative portfolio which should kick out 5%, doubling their income.”

Can someone explain if this return is assumed to take into account MER fees, personal taxes and advisor fees (if using one) or any brokerage fees?

Thanks

There are no MERs. Advisor fees (if one chooses to use a fee-based advisor) are normally 1% and fully tax deductible, and include trading fees. As with the rest of life, you usually get what you pay for. — Garth

—-
Thx. Being small business owners for almost twenty years you are preaching to the choir on value and have used the same response on new clients. My inquiry was just that. I like to make sure I don’t assume as you know what it does…

#59 Inglorious Investor on 02.03.13 at 10:43 pm

#31 T.O. Bubble Boy on 02.03.13 at 9:04 pm

Don’t get me started on teachers. Who would have ever thought that teachers–TEACHERS–would become such a privileged sub-class of the so-called ‘middle class’?

Here is a, dare I say, ‘profession’ with a barrier to entry about as thick as onion skin (at least in terms of credentials), and yet they are treated like some kind of vital brain trust. Do you know any teachers? I know more than I care to admit. They are no brain trust.

In terms of working conditions or compensation, a good measure of satisfaction for any profession is turn over rate. I ask you, how many teachers have you known who have quit ‘the life’? I don’t know any. But I do know a few who scam the system by taking sick days so their retired teacher mother can get in a few days here and there as a supply.

My friend’s wife is a teacher. Even he says they don’t deserve the pay they get. Why? Not because of the work. Because they have no accountability. I learned this first-hand, having two kids in grade school.

And while they bleat and attempt wildcat strikes “for the children” there’s no money for equipment, or books, or just about anything else, except teachers’ pay. Meanwhile, desperate school boards consider selling off assets.

A friend of mine who recently transferred his kids from private to public school complained about the fact that practically everyday the school is begging for money for this or for that (a fact of life I warned him about prior to the transfer). Meanwhile teachers in their early fifties have DB pensions worth $1.4 million.

Is this Ontario or Bedlam? I can’t ell anymore.

#60 futureexpatriate on 02.03.13 at 10:44 pm

99 cent birthday cakes. What were we talking about, 1951?

#61 Asse on 02.03.13 at 10:58 pm

Inglorious, knowledge and experience are tied together, one does not earn knowledge without having experiences. Belief and knowledge are not linked, and usually result in ignorance and prejudice. Example our mayor Fords. Full of belief and avarice but very little knowledge. We have other examples that are more amusing.
Trust IS earned and lost with experience. It’s easier to forgive someone you never trusted.
Go 49ers! There’s still time for yet another comeback!

#62 rosie "moving forward" on 02.03.13 at 11:00 pm

#31

Envy is one of the deadly sins. A little research into teacher pension funding, contribution rates and retirement requirements would aid you in your quest for clarity, moving forward.

#63 Signpost in the bushes on 02.03.13 at 11:00 pm

“Why would anyone choose to have less, when they can have more?” Garth

A small (and fortunate) number of people have learned to love what they have, which helps them to avoid the desire for More, More, More.

The greater mass of people would claim that their lives are almost perfect. However, if they could just have a little More, (wealth, love or power) that would make their lives absolutely perfect. Naturally, after a brief period of adaptation, they, once again, find themselves wanting just a little More.

A philosophical fellow, who was given to experimenting with mind altering drugs, found the answer to the quest for perfect happiness during one of his “trips”. He had the presence of mind to write his discovery down. When he later (soberly) discovered the message, he read; “Think in different patterns.”

#64 Cow Man on 02.03.13 at 11:12 pm

# 38 Canadian Watchdog

Wikipedia definition.

#65 NotaGreaterFool on 02.03.13 at 11:16 pm

Any ideas folks what the Toronto Real Estate figures will review shortly for Jan 2013?

#66 Christopher Lackey on 02.03.13 at 11:31 pm

I know we are a long way from this, but what happens to preferred owners’ yields when the word gets to enough of the people with six figure savings accounts because they are “safe” that they are subsidizing the returns of the people who took on the “risk”? Even big 5 commons all pay about 4.5%

#67 Freebird on 02.03.13 at 11:38 pm

“Why would anyone choose to have less, when they can have more?” Garth

Not an expert but from personal experience and what I’ve learned…FEAR.

Not a good way to live but a human one and hard to overcome. Your blog and other good sources help to educate and counter balance the other sources like the MSM. Tough fight.

#68 Subversive on 02.03.13 at 11:40 pm

life’s object is not to suffer so you can die with an undisturbed pot of money. Rather, the goal is to wisely spend the one commodity no human can replace. Time. A life richly lived brims with endless experiences, as uncurbed or shackled as possible by lack of means

Garth, I love this. Beautifully and succinctly put.

#69 Smoking Man on 02.03.13 at 11:47 pm

Never bet against a Smoking Man….. RAVENS!!!!!!!!

#70 Freedom First on 02.03.13 at 11:47 pm

Having $500,000 in any one asset is extremely foolish. No exception. Ever. Anyone who keeps all in one asset is a fool. No exception.

To earn the paltry interest of 1.2-1.5% on a half a million $ is self inflicted financial abuse.

Wisest man who ever lived said to have several different assets, and preferably, many. Learn to handle one’s financial affairs, or do the research and find a financial adviser. If they were my parents, I would simply have them hire Garth.

#71 Ogopogo on 02.03.13 at 11:52 pm

I watched “Generation Jobless” on CBC’s Doc Zone today. It featured Ys and Millennials bemoaning the dismal job market for their overeducated selves and blaming the usual suspects (boomers) for their woes. What everyone forgets of course is that my generation (X) has got the short end of the stick at least since the early nineties. We live in an age of cultural amnesia and fabricated intergenerational conflict.

My strategy has always been to have friends in nearly every age category. My tennis partner, for instance, is a 75 year old vegan who beats me nearly every time. Most of my peers ghettoize themselves with friends who think, look and talk like them. I diversify and learn from the young and old alike. I think that’s why it was so easy for me to accept the idea of a balanced, diversified portfolio when I first discovered it on this poetic blog.

In an echo chamber you’ll just end up hearing yourself.

To wrap it up, it’s worth quoting the sagest bit of Garth’s post: “Rather, the goal is to wisely spend the one commodity no human can replace. Time. A life richly lived brims with endless experiences, as uncurbed or shackled as possible by lack of means.”

A happy and prosperous week to all.

#72 Dr. Ralph Cramdown, FRCS(C) on 02.03.13 at 11:54 pm

“Who is going to buy those stocks?”

Beats me. Maybe the Teachers’ Pension Plan? Should I care? They’re generating great cash flow and paying fat dividends. Occasionally one of them blows up, but I’m being compensated for that. For many of them, Mr. Market will one day go from despondent to euphoric. Or maybe a trading algorithm will take them off my hands. Regardless, I’m being paid to wait. Asking who you’ll find to take a stock off your hands is called… The Greater Fool Theory of Investing. Much better to say that, after careful analysis, you’re buying a stock for the dividends and the demonstrated business growth, and you’ll make a decision on continuing to hold it in ten years or so, maybe fewer if Mr. Market gets drunk and makes you an offer you can’t refuse.

How to analyze an ETF: Look at the top holdings (find this on the web) and see what they yield, on a weighted average basis. ETFs aren’t magic, so if one is yielding more than its holdings, either its leveraged, management is adding a lot of value via trading and capital appreciation (I’m a doubter) or they’re mailing you part of your capital back every month. The same goes for mutual funds except that the fees are generally higher. These funds are also a great way to look at a lot of model portfolios of people who are being paid to perform (sort of).

#73 Mister Obvious on 02.03.13 at 11:57 pm

There is no bigger booster than yours truly regarding the wisdom contained within tonight’s blog.

But I think I understand where the fear and loathing of risk is coming from: Here’s a graph of the S&P 500 from 1980 to the present day:

http://tinyurl.com/byf4mnv

Note the gradual run up from 1980 to the mid 1990’s followed by the ‘dot com’ speculative bubble and subsequent crash. Ditto for the GFC of 2008, followed by another run up to the present day.

I was significantly invested from the late nineties onward and remain so the present day. I lived through those two peaks and busts. Granted, they were big and they were ugly, but they passed and I survived them quite handily.

Why? I had professional fee-based financial advice through the entire period. I stayed the course and resisted the strong temptation to sell into a falling market. I found advisors I could trust and I rode those waves. At this point in time its as if those events never happened.

There will be more market turmoil ahead. That is guaranteed. Its the nature of the all markets. But there are very good tools and systems for smoothing out these dynamics.

The banks who pay you a crappy 1.2% are busy using those tools to profit from your savings. Essentially, to benefit from your paranoia. You can turn this around. It’s easier done than said.

Its the same old story. There is gambling and there is investing. Everyone owes it to themselves to get very clear on the difference then act accordingly.

#74 Canadian Watchdog on 02.03.13 at 11:58 pm

#64 Cow Man

I’m not sure what you’re implying. Simultaneous asset deflation and inflation are symptoms of financial repression. Low rates are here to stay forever, or until there’s some global accord to devalue or revalue currencies.

That’s no guess. It’s just how the Keynesian monetary system works.

#75 Dr. Ralph Cramdown, FRCS(C) on 02.04.13 at 12:07 am

“[…] what happens to preferred owners’ yields when the word gets to enough of the people with six figure savings accounts because they are “safe” that they are subsidizing the returns of the people who took on the “risk”? Even big 5 commons all pay about 4.5%”

If you’re already holding the pref, your yield on cost doesn’t change. But I think you’re too optimistic about human nature. The risk takers have generally gotten the rewards throughout history, and those who exercised excessive caution have generally paid for it.

The bank will create Preferred Index Linked Certificates, which will guarantee that you won’t lose your principal, and can participate in the total return (up to a ceiling — ouch!) of a basket of prefs. It’ll be a nice moneymaker for the banks.

#76 T.O. Bubble Boy on 02.04.13 at 12:13 am

@ #46 Bottoms_Up on 02.03.13 at 10:02 pm
#31 T.O. Bubble Boy on 02.03.13 at 9:04 pm
————————————————-
If you actually read the article you will see she currently earns $95,000/yr, and her pension will pay her $57,000/yr.

Don’t forget she paid into it her entire working career, and that her pension fund was/is one of the largest and best managed as they come.
_______________________

Paid in how much for 30 years to have $1.4M *guaranteed*?

If she is paid $95k now, then her salary over those 30 years would have average far less — say $50k/year or less over that span.

If she was paying in 10% of her salary (average of $5000/yr), that’s a 12% return for 30 straight years!

#77 Dr. Ralph Cramdown, FRCS(C) on 02.04.13 at 12:34 am

#73 Mister Obvious

Please consider posting total return charts instead of just the chart of the index (a.k.a. “I spent most of the dividends on hookers and blow, the rest I just wasted” charts). A pet peeve of mine.

http://ycharts.com/indices/%5ESPXTR#series=type%3Aindex%2Cid%3A%5ESPXTR%2Ccalc%3A&format=real&recessions=true&zoom=&startDate=&endDate=

#78 Junius on 02.04.13 at 12:35 am

#74 Canadian Watchdog,

The other similar term is a liquidity trap which also describes where we are right now.

http://en.wikipedia.org/wiki/Liquidity_trap

#79 New_Investor on 02.04.13 at 12:37 am

Garth,

I love your blog, love the insight you provide to me, but there is one thing that continuously gnaws at me and forces me to ask.

Yes, we lose money by parking our money in low rate GIC’s while the banks re-lend out our money to us and to others. So it makes sense to take on a little risk and invest in a balanced portfolio.

But can you blame people for being risk averse? Look what happened in 2008 with toxic assets permeating every part of the world. Why should people trust the markets when things like this happen, only for bog governments to swoop in and nationalize banks and force the taxpayers to cough up more dough.

I’m serious on this question. I’m not a doomsdayer or a paranoid, I just would appreciate your sincere answer on this.

Thank you very much.

#80 Inglorious Investor on 02.04.13 at 12:40 am

#73 Canadian Watchdog on 02.03.13 at 11:58 pm

At the risk of offending Mr. Turner, or falling victim to some ad hominem quip to which I am not allowed to reply, I would like to say the following:

Our monetary system is misaligned to reality. We currently have an inflationary monetary system that requires accelerating growth in real wealth in order to sustain itself.

What happened over the past three or four decades is that the growth of our credit/money supply exceeded the growth in real wealth. The growing disparity was filled with more and more debt. This debt allowed us to pretend the economy was growing at a much faster rate than it actually was. But all we really did was create more and more claims on the same base of real assets.

As usually happens when there’s less to go around, more and more people resort to scams or other schemes in order to take what they can get. For example, the financial collapse that began in 2007 was largely the direct result of rampant fraud in the mortgage industry in the US. Or ask yourself, why we have something called the ‘shadow’ banking system? Or why laws are retroactively changed in favour of large banks.

When growth in debt in the real economy became insufficient to sustain the system, the central bankers simply resorted to creating as much debt/money as needed to fill the hole.

But in the end, you’re right CW, if the economy does not ramp up huge––and I mean HUGE––currencies will have to be devalued significantly more than they already have been, because there is simply too much of it that is not collateralized or ‘backed’ by real wealth. But before they do that, they will attempt to steal as much of the real wealth that remains. Those who don’t believe me, stay tuned.

#81 New_Investor on 02.04.13 at 12:46 am

Garth,

Please ignore my last question. Your blog today fully addresses my question.

Also, I liked what you said about life and spending your time well. Very touching.

#82 Dr. Hoof-Hearted on 02.04.13 at 12:48 am

I realize Garth was uptight…not sure on how to bet the Farm/Bunker/Harley re: the SuperBowl.

As the record states…the Ravens won…as I predicted.

My GPS detected some a$$hole pulled the plug just after Half Time to try to upset the Ravesn obvious momentum…..or to at least affect the point spread.

Luckily…a Canadian Tire generator(on sale 80% off !!!) was found …. hooked up ….and the game went on. (NOTE:Nothing worse than seeing scantily clad cheerleaders getting goose pimples……borderline 9-11 call)

My algorithms predicted a 49er comeback…..but the Ravens solidified their resolve, much like a bunch of Toronto condo realtors.

PS…No need to thank me Garth, its understood.

#83 brainsail on 02.04.13 at 12:50 am

#304 Nostradamus Le Mad Vlad on 02.03.13 at 6:34 pm

Thank you and from the master that coined “Times have changed.

“A worried man with a worried mind
No one in front of me and nothing behind
There’s a woman on my lap and she’s drinking champagne
Got white skin, got assassin’s eyes
I’m looking up into the sapphire-tinted skies
I’m well dressed, waiting on the last train

Standing on the gallows with my head in a noose
Any minute now I’m expecting all hell to break loose

People are crazy and times are strange
I’m locked in tight, I’m out of range
I used to care, but things have changed

This place ain’t doing me any good
I’m in the wrong town, I should be in Hollywood
Just for a second there I thought I saw something move
Gonna take dancing lessons, do the jitterbug rag
Ain’t no shortcuts, gonna dress in drag
Only a fool in here would think he’s got anything to prove

Lot of water under the bridge, lot of other stuff too
Don’t get up gentlemen, I’m only passing through

People are crazy and times are strange
I’m locked in tight, I’m out of range
I used to care, but things have changed

I’ve been walking forty miles of bad road
If the Bible is right, the world will explode
I’ve been trying to get as far away from myself as I can
Some things are too hot to touch
The human mind can only stand so much
You can’t win with a losing hand

Feel like falling in love with the first woman I meet
Putting her in a wheelbarrow and wheeling her down the street

People are crazy and times are strange
I’m locked in tight, I’m out of range
I used to care, but things have changed

I hurt easy, I just don’t show it
You can hurt someone and not even know it
The next sixty seconds could be like an eternity
Gonna get low down, gonna fly high
All the truth in the world adds up to one big lie
I’m in love with a woman who don’t even appeal to me

Mr. Jinx and Miss Lucy, they jumped in the lake
I’m not that eager to make a mistake

People are crazy and times are strange
I’m locked in tight, I’m out of range
I used to care, but things have changed”

Copyright © 1999 by Special Rider Music

#84 Nostradamus Le Mad Vlad on 02.04.13 at 12:52 am

-
“A half million dollars ‘invested’ at less than 1.5% means a loss of purchasing power every single day. That money, even at a 5% return, could swell family income, improve every hour of every day, and still preserve the capital. Why would anyone choose to have less, when they can have more?” — Guaranteed Investment Certificates. Guaranteed to lose money on a regular, hourly and daily basis. TNL@TB gets a nice cut when we buy them, ‘tho.

“. . . or hurl abuse on Harley owners.” — Into S&M, a little bondage, perhaps?!
*
#69 Smoking Man — “Never bet against a Smoking Man….. RAVENS!!!!!!!!” — Ditto!

Gimme Shelter SMan, The Stones + Lady Gaga. Those stilettos she’s wearing — aren’t they the same ones that Elton John wore in the ’70s?
*
Brainsail — UK Poverty Cutline under pic is apt; Austerity Works for Soros / Obomba; Something to do with Obama defaulting. Don’t understand the legal jargon, and not sure where the UN comes in; 12 Worst Supermarkets Of note, #3 Ralph’s is featured on FZappa and The Mothers Just Another Band from LA; Banks run WH and Pentagon; Spain’s Slush Fund; Happy 100th BDay US Income Tax; Margaret Thatcher and Jesse Jackson The Odd Couple; QE is EZone Bailout; EZone Drifting into obscurity; Scaling (Gold) Cliffs Weird chart; The Power To Tax has unintended consequences.
*
Naughty Ad Too steamy for the SBowl; Noddin’ Yahoo So much for his meaningless squawking; Obesity and Welfare Not a great partnership; UN (Agenda 21) Gun grab vote to back Obomba; Methane increase in Arctic. Polar shift becoming quicker? Single Intelligence Network for the NWO (Smart Meters a part of it?); Monsanto Playing God by making new Super Bee; Libertarians Disavowing Obama’s America; Iran – India Plus India has nukes; Life Without Guns Esp. if it incl. govts.; The Black Hornet Tiny drones that follow; 14:35 clip More on The Electric Universe, and Stratospheric Geoengineering; 40 Years Russian family had no human contact; Social Media burial plan; An Otter Moment Tastes good; Muhammed Ali Nearing the completion of his lifecycle; 2:25 clip Blind skateboarder (pretty good); Ants Alive Many hands make light work; Sculpture is 40K years old.

#85 HAWK on 02.04.13 at 1:03 am

#59 Inglorious Investor on 02.03.13 at 10:43 pm

==================

The fault lies not with teaching as a profession, but rather a bloated public sector, where pay is not performance and results based, like the market place.

At least teachers are educated people, there are so many cases of overpaid bus drivers and even trash collectors LOL.

#86 Musty Basement Wannabe on 02.04.13 at 1:05 am

to #71 Ogopogo..your phrase is the best today in my opinion “This poetic blog” ..I love that as an alternative to Garths favourite “pathetic blog” handle.

#87 Clevernam3 on 02.04.13 at 1:17 am

No, Pearl’s parents are not idiots. They are entitled to choose the risk level they can comfortably bear. Mic #40, you’re right, they can find some better returns and still sleep well at night. Garth, you say 5% from a conservative portfolio… Well, 4% after the advisor’s fee… And of course it’s not guaranteed, so it might be 6%, but then again it might be 2%… If the parents would rather be guaranteed 2.85% or maybe even a little over 3%, that’s a legitimate choice. As for the tax treatment, they’re not likely paying much anyway.

And comments like “stock markets have richly rewarded investors over the past four years, and a balanced portfolio returned 10% last year, 8% over the last three and almost seven per cent over the last nine (including the meltdown” sure appear to be using cherry-picked dates: I take it nine years is being used because that dates from the big dip in the tsx in about 2002; that’s no fairer than choosing the peak in 2001 as a starting point, and it sure hasn’t been an average of 7% yearly since then. The GICs I bought at the beginning of 2008 have been pumping out 5 and 5.5% yearly, fully guaranteed, for the last five years; meanwhile, the tsx is hovering around the exact same place it was when I bought those GICs.

And lastly, while I’m in a ranting mood, everyone has an agenda, including fee-only advisors (they want you to pay them 1% of your portfolio, so they sure aren’t going to encourage you to go buy GICs).

Maybe Pearl’s parents should have a little, conservative, market exposure, together with the GICs they prefer, but it’s irritating to hear people blather about what fools they are. It’s their money, they probably worked hard for it, and when a 2008 scenario happens, they want to be safe. That’s not unreasonable. And if they can get by on $25,000 a year anywhere in Canada, let alone Vancouver, they’re remarkable people. Garth’s Hummer probably costs that much in gas, insurance, and repairs (he’d fit right in here in conspicuously consuming Alberta, but that’s another rant). I think Pearl should help them start a blog on how they do it.

Nobody called these folks idiots, in fact their daughter wrote for help. As for returns, I gave one-year. 3-year and 9-year, which seems reasonably long enough to establish parameters. Your 5% GICs are about to expire and become 2% assets, fully-taxed, which probably explains why you come to a free blog of financial advice and attack your host. Classy. — Garth

#88 Wally Wingnut on 02.04.13 at 1:18 am

The retiring boomer. More debt than assets. No wonder Provincial Govt’s are worried. All these ill prepared retires will become a burden on Provincial welfare programs. Its no wonder they want more enhanced CPP
benefits deducted from wages and employers.

http://theretiringboomer.ca/no-one-plans-to-fail-but-failing-to-plan-could-lead-to-financial-disaster/?utm_source=rss&utm_medium=rss&utm_campaign=no-one-plans-to-fail-but-failing-to-plan-could-lead-to-financial-disaster

#89 maria on 02.04.13 at 1:23 am

#14 JR

Funny story about your post…in the summer I was in Germany, walking around the farmer’s market in a town called Freiburg. I saw a man wearing a sweater that said Vancouver, Canada, and I got so excited because I had been in Germany for 2 weeks and it was the first Canadian I saw. I ran up to him and was like “Heyyyyy fellow Canadian! From Canada, eh?” and he stared at me blankly. I pointed at his shirt, “Are you from Canada?” and he struggled in broken English to say “No, I own a condo in Vancouver.”

“Do you visit often?”

“Every other year”

It was the first time I ever heard of something like that. Until I started reading this blog.

#90 wes coast on 02.04.13 at 1:26 am

I think its important to remember that many immigrants came to Canada from countries that saw huge uncertainty whether caused by economic, social, or politcal upheaval. I am a first generation Canadian that listened intently to my parent’s stories of struggle in the ‘old country’. Even hearing the stories first hand, I can not truely grasp living in the midst of a war, revolution, or hunger. These things make the market crash of 2008 seem like a picnic by comparison.

I think we need to ask ourselve what do Pearl’s parents know that we don’t? Do they she through the charade of Dow 14,000 and see the monetary printing presses that got us there? Do they see unsustainable debt, unfunded liabilities, currency wars that create ‘prosperity’ now while fueling yet another bubble down the road?

Perhaps they know risk better then the rest of us because they know what happened in the old country can happen in the new country.

The markets may have hit familiar numbers but I know few people who feel life is back to normal. Pearl’s parents know it – and it will take a lot more than 6 percent yield to lure them out of GICs even if central bank policy is punishing them for exercising the caution that markets should have for the last 2 decades.

#91 robert on 02.04.13 at 1:30 am

How many retired Canadians have $500,000 liquid cash in the bank a home paid for and a lifestyle ( i am sure a happy lifestyle ) that allows them to live off of pensions? Oh and i should add no debt. I take my hat off to them and wonder truthfully how many of you posters are in their position. That is the problem with this Country and part of the problem with Garth. Yes Garth had it so right on the RE Market and the Boomer Demographics but i believe he is dead wrong telling retired people to put their money in Banks and Real Estate Trusts. I have never put my money in the stock market and retired at 55. I have owned over 20 homes since i got married at 25 made capital gains on 24 of them. That game is over but i managed to save enough money and invest it between 2% to 5% knowing every morning that when i woke up it was there if i need it. The stock market is rigged and for those with a short memory perhaps ask those who bought GM stock or how about Nortel or how about Rim. Better yet how about Apple at $700. When rates are 1% and you buy a stock that has a dividend of 8% you need to know that it takes a greater fool not to see that the risk is elevated both from a capital gains perspective and the chances of the dividend being lowered. The Markets are an accident waiting to happen and accidents for retired people are devastating as there is no opportunity to recover over time as time is not on our side. Many years ago a wise man and a very wealthy man once told me that ” By the year 2012 a man with no debt will be considered a wealthy man”. That time has arrived.

#92 Devore on 02.04.13 at 1:38 am

#71 Ogopogo

My strategy has always been to have friends in nearly every age category. […] Most of my peers ghettoize themselves with friends who think, look and talk like them.

It is a problem of our own design. Children are put into mega-schools from the youngest age, where they are encouraged to become “socialized” with only others their age. They leave school and enter the work force unable to deal with differences in age, authority, opinion or culture. The parents, both working just to pay the mortgage, don’t have time or opportunities to provide a role model for how one interacts with a range of different people in different situations.

The internet hasn’t made this any better. Overwhelmed with options, most restrict themselves to the intensely familiar, which alone provides enough content to last a lifetime.

We’re becoming increasingly tribal, divided by fanatical allegiance to various -isms. Just look at this blog. Does it sound like we’re able to come together on anything of any importance? It’s just tugging and pulling by various special interests; and if someone sensible stood in the middle, it might actually work.

#93 maria on 02.04.13 at 1:43 am

#59 Inglorious Investor

I know 3 teachers…and none of them know the difference between you’re/your or there/their

And when I call them on it they look at me like I’m deranged

#94 Jello on 02.04.13 at 1:49 am

I’m one of these fools, approximately 60k sitting around in a mix of GICs and mutual funds (33k RSPs, 25.5K in TFSA – both maxed out) getting 2-3%. I’m wondering if anyone can point me to some resources to educate myself on my options. There’re a lot of terms and acronyms thrown around that I don’t understand (ETF, REIT, Bank preferred shares etc.) and I honestly don’t know where to start. Which services/advisors do you use? Qtrade? Any help would be appreciated.

#95 Muddy Waters on 02.04.13 at 1:55 am

Never forget:

Banks don’t give advice to benefit consumers.

Banks give consumer advice to be benefit banks.

#96 charles on 02.04.13 at 1:59 am

It is not surprising that a former Conservative finance minister of this capitalist economy would feel compelled to berate someone leaving money on the table as in taking a “loss” by not playing in the paper games you endorse here nightly. After all if they do not have the faith and confidence to entrust their wealth to the institutions that grow out of the practice of usury, simple minded fear can be the only reason. Even if after a lifetime of working hard, saving what they could, raising a family, and succeeding in spite of the Bankers we all tolerate in our daily lives.
Your premise that more is better, that quality of life equates to higher levels of consumption and minimization of taxes, that fabulous vacations are the essence of a full life speak volumes.
You do not have a positive thing to say about the choices these folks have made or even grudgingly acknowledging what is important to them.
That these folks are happy with what they have living humbly with their nuclear family in peace and harmony seems almost sacrilegious to you demonstrates perhaps our gentle host is a bit deeper in the swamp than he realizes.

“Yeah,” Peral admits, “it breaks my heart to watch my mother moan about GIC rates and fight with TNL@TB for an extra 0.01%.” Doesn’t sound too happy to me. BTW, I was not minister of finance. Lighten up. — Garth

#97 Zoronqueen on 02.04.13 at 2:05 am

I’m still waiting on hearing back re: LIRA… to use Municipal Pension Plan or Private Fee investor….

#98 LS in Arbutus on 02.04.13 at 2:07 am

#71 – Generation Jobless

I watched this as well. I am a Gen X as well. Would agree it’s a good idea to have a wide age range and diverse group of friends – it does keep you open minded.

One thing that does concern me though is that with the amount of off-shoring, there are less and less entry level jobs on-shore. Even in my field, accounting, the more processing and straight forward jobs are being off-shored. But people have to start somewhere, even fully trained CAs don’t always walk into upper level jobs. And if all the entry level jobs are gone, then it’s hard to find experienced people on-shore.

At my company, when they need good people, they will at times look at the most talented of the off-shore pool and bring them on-shore. That’s of course a smart move… but heh, how will we train our people/ our children?

All I can is young people have to be willing to move where the opportunity is, at least to build their careers. I don’t see any other way around it, particularly in cities outside of Toronto.

#99 TEMPLE on 02.04.13 at 2:11 am

There are no MERs. Advisor fees (if one chooses to use a fee-based advisor) are normally 1% and fully tax deductible, and include trading fees. As with the rest of life, you usually get what you pay for. — Garth

One thing that I don’t understand about advisor fees is how you offset the annual ETF fees (as opposed to the commissions). If you put a client in an ETF, do you subtract the annual fee paid by the client to the ETF from the 1% fee that you charge to the client?

For example, if you have someone 100% invested in a particular ETF (and I know you wouldn’t do that, but it is just an example) that charges 0.2% a year, do you then only charge 0.8% for your services?

If so, that makes a more compelling case for you to choose stocks for clients. If annual management costs are shifted mostly to the advisor’s fee, then the greater the tax deduction will be. In other words, if you are going to cough up 1% a year, the more that fee that is tax deductible, the better.

TEMPLE

I mentioned nothing about picking stocks. As for ETF fees, most are miniscule, and embedded. If you are too cheap to hire professional help, then don’t. By the way, there are fees embedded in this blog. — Garth

#100 InvestX on 02.04.13 at 2:27 am

#34 espressobob:
“It seems pref ETF’s like CPD, XPF, & ZPR (my fave) are working out quite well in the non registered account.”

If you have room, why not put them in a TFSA and not pay any tax at all?

Because he loses the dividend tax credit. — Garth

#101 John Prine on 02.04.13 at 2:36 am

We have some stocks, some mutual funds but after losing savings twice since 1991 my wife will only have GIC’s. We are getting between 1.9% and 4.25% May not be the best way to save but everybody’s comfort level is different and I respect hers. Stocks are Telus and TransCanada, mutual is CI Dividend fund, they all pay well..

#102 JuliaS on 02.04.13 at 3:23 am

#16 Victoria Real Estate Update

I’m in the same situation. I think that since most men are the ones supplying cash for the purchase and being in charge of the actual decision, they should have the guts to tell a girl now. Too many of my friends were afraid to say “no” to their partner. Too many men assumed that having a kid was a house-buying ultimatum. Well, my family rents and nobody complains. Nobody complained even when housing prices were going up. We talked it over and decided not to buy because houses were simply too expensive.

I don’t care what something will be worth tomorrow, if I can’t afford it today. I’m not going to gamble and take risk spending what I don’t have.

My family’s primary goal is staying debt free. We have savings, no debts of any kind. Car was purchased with cash, paid off in full on the spot etc.

I do not feel sorry for friends who were tempted by cheap mortgages. They made their decision. I won’t have to pay for their errors in life, and they won’t have to pay for mine.

#103 Beach Girl on 02.04.13 at 3:34 am

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#104 Mic D'angelo on 02.04.13 at 3:39 am

Garth, that is your most intelligent answer you can come up with, swamp talk.. Most of financial advisers try to push people into investments that they don’t understand or are not comfortable with. Investments with so called potential higher returns but are not indicative of past results. I heard and read that at least thousands of time.This poor family is being pushed into a mix of investment classes of preferred shares, REIT’s, ETF’s, corporate bonds etc. You never mention income trusts anymore. Garth, they are not good investments anymore or what. I gave a concrete way to increase their income by $6,526 per year with no added risk and in the same GIC investments and you say this is a swamp talk.You keep saying interest rates will rise in the next few years so if this happens they can benefit from this. They do not have a high taxable income so their taxes can’t be more than 21% on all the interest not including the TFSA’s which are income tax free. The most their income taxes would be is a small amount of $2,586 per year or 18.43% of all $14,026. They can also add $5,500*2=$11,000 per year in TFSA’s at 3.15% after 5 years would get them $2,825.14 or $569.03 per year income tax free and income clawback free to shelter future income taxes and increases . The 1.00% annual management fee or adviser fee is plus H.S.T. so the Pearl family would have to make 3.935% using 5 year GIC’s and if it was my choice, provincial bonds and strips 4.94% to just break even with these real conservative investments. Market loss and new fees would be extra under your plan. I have had a great deal of experience and researched all these type of investments and people who think that over the next 10 years plus they are going to make after fees 5.00% to 8.00% a year are going to be really shocked like the last 12 years. Interest is the oldest form of getting a return on your investments and is the most fair way to compensate for savings and future investments. Banks, other investment companies and central banks do not want people to have more money and make people who want a decent, fair return to be in debt and take way more risk being at the whim of all types of markets. Tell me Garth, what new investment ideas do you have for in store for us over the next 2 to 3 years. I was not born yesterday Garth, I know what I am doing and I know when I am being pushed into investments that has many more risks than inflation and taxes. Just admit it, if interest rates were 6.00%+ like in 1997 to 2001 which are normal interest rates all these other investments would not look like the portrayed savior for investors today. Interest rates is the real competition for investor’s dollars and all others do not like competition, Index funds, ETF’s, REIT’s, mutual funds, corporate bonds, high yield bonds, preferred shares, real estate,income trusts,foreign investments with all the same categories listed above, condo’s, real estate rentals,common stocks, royal trusts, energy and pipeline shares, master limited partnerships etc. Inflation and taxes are costs to all investors but financial advisers forget to mention the annual management fees of 1% to 2.50%+ H.S.T. that are charged on every dollar invested. What a great additional inflation cost we all don’t need,Garth. Garth, you said I feed of government bonds but you feed off of people’s hard work, sweat and time of people who spent over the decades. The financial industry made life and money complicated so the masses have to hire a so called professional. Good luck people who have no knowledge and don’t take the time, experience, due diligence and research to manage their own investments from their hard work, sweat and time. There is a famous talk show host who calls people that prey on the misinformed and vulnerable like seniors and new investors, SHARK ATTACK!

What most permeates your comments is not experience, common sense or even fear. You are bitter. I would stop worrying about basis points and work on that. — Garth

#105 Beach Girl on 02.04.13 at 3:56 am

I never really liked my childrens’ teachers. I actually when on school trips. I should have been paid for that. Nothing is worse than eating chicken with no knives and forks at Medival Times. I should have grasped that before I went. Now, really, did my children learn anything there. Except Mommy was thirsty and these people are stupid.

#106 Humpty Dumpty on 02.04.13 at 4:02 am

The Goal of The Bankers and State lifesyle….

The founder of the Medici banking dynasty, Giovanni di Bicci de’ Medici (1360–1429), said to his children on his death bed: “Stay out of the public eye.”[1] His words raise the question

74… CW..
You may just enjoy this Austrian view…

51…. Ingl Invest….

Doesn’t Experience reveal an individuals trustworthiness by their actions, rather than knowledge

http://mises.org/daily/6314/Why-Bankers-Avoid-the-Public-Eye

#107 Beach Girl on 02.04.13 at 4:03 am

I guess I am gone.

#108 happy renter on 02.04.13 at 4:03 am

I’m getting out of my GIC that pays 1%.I’ll listen to Garth until another 2008 comes around in a couple of years.With the US putting 40 billion dollars into the market its only going up.Good times ,everybody cashing in the stock market bubble.

There will be no 2008. — Garth

#109 Beach Girl on 02.04.13 at 4:22 am

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#110 Deb on 02.04.13 at 5:48 am

This weekend I had a discussion with my niece about tax efficient investing. We talked about the advantages of holding growth equities in the TFSA, fixed income in the RRSP and quality dividend producing equities in a non-registered account. When we touched on the beauty of the dividend tax credit, she asked, “So, the idea is to gross-out my dividends?” The correct term, of course, is gross up.

#111 Buy? Curious? on 02.04.13 at 5:50 am

Don’t worry, over the next 10 years, Boomers will be dropping dead like Starlings migrating through Toronto at night.

#112 willworkforpickles on 02.04.13 at 6:01 am

A stagnant steaming murky bog shrouded in thick fog. Who knows what evil lurks or what mind numbing horror patiently awaits the unsuspecting. Never-mind those smoky bubbles percolating from the depths, those should be the least of all your worries.

#113 Asse on 02.04.13 at 6:07 am

One of the best financial lessons I learned was from my inlaws. They’re not rich (how do you define rich) but are easily classed as 1%ers (20k per month income) and have accredited status. They live a simple life now. You would never know of their means by their appearance or attitude. When his business partners passed away and he witnessed the destruction of families as they fought for estate he sold his properties and set up trust funds to prevent needless fiascos. All to try and maintain family. I guess he realized friends come and go but families need to stick together. Thanks to them my kids legacies are secured and that my friends is priceless comfort.
We live for the most part frugally, but that is relative. Newer vehicles but base models. Nice house in a good area of Toronto but I did the reno’s. Neither of us have new phones or Canada Goose but the kids have a house full of toys and activities. Wife rarely shops for herself but pretty girls don’t need designer boutiques or quick throwaways.
Decide what is important to you and drive furiously. Family can give you the strength and support to accomplish.

#114 drydock on 02.04.13 at 8:11 am

In response to your reply yesterday to #210.

A little rifle justice would have been a welcome interlude to some of the shenanigans yesterday.

#115 Bigrider on 02.04.13 at 8:24 am

” flip this house” “income property” “property virgins”
“Lick this eavestrophe” “hump these brick” etc.etc.

How do we get all these Toronto based TV shows above captioned into Italian and Mandarin?

#116 Axxman on 02.04.13 at 9:23 am

These people are in far better shape than hundreds of thousands of boomer who are staring down the barrel of retirement. So many people have mortgaged their future that they will have nothing but faint hope that the random outcome of a defined contribution pension will bring. For them it won’t be a decision between prefs over GICs, but a choice between eat or don’t eat. Sad. But for now – they are happy to pretend they are weathy and hope that they die before the day of reckoning. Welcome to the new Canada.

#117 David on 02.04.13 at 9:36 am

Rebalancing just became cheaper for those still building up to six figures. Questrade is offering commission-free ETFs (for NA markets). You still pay to sell.

http://www.newswire.ca/en/story/1107847/commission-free-etf-purchases-at-questrade

#118 EIT on 02.04.13 at 9:43 am

The goal of life is to take the most exciting path with no baggage and zero expectations.

#119 NYCer on 02.04.13 at 9:55 am

For XPF, they pay foreign income if I saw the 2011 distribution breakdown correctly. How does that get taxed? Like interest income? Because the foreign income is 50% of the distribution.

#120 Van_g on 02.04.13 at 10:03 am

If they are so risk adverse they could also get a part-time job!!

the best source of income is 99% of the time going to be yourself

#121 Bigrider on 02.04.13 at 10:08 am

I bet ya Pearls parents as risk averse as they are to financial assets , log into realtor.ca and MLS.ca looking for a ‘deal’ on a pile of bricks they can buy to rent out to someone else. You know ‘real’ ‘safe’ ‘investments’ ..LOL

They sound Asian ( not Italian or else would have done the same) that’s why I put that out there. Nothing personal..

Please take with a sense of humour

#122 Inglorious Investor on 02.04.13 at 10:21 am

#113 Asse on 02.04.13 at 6:07 am

“Thanks to them my kids legacies are secured and that my friends is priceless comfort.”

If I may, don’t tell your kids that, or they may grow up with no ambition or goals. I’ve seen this far too often, as I’m sure have many on this blog. Teach your kids to be self-sufficient, to make their own way in the world, and to make the world a better place if they can.

I too have ‘rich’ in-laws who are very generous (especially of themselves, which is the most precious gift of all). But I run my finances and investments as though their money does not exist. And whatever money they set aside for my kids is their business.

I try very hard to instil values, such as as a strong work ethic, critical thinking, self-sufficiency, integrity, thrift, respect and courtesy for others, and healthy skepticism of authority (including my own). I teach them that if they want something, they must earn it.

Some people think my wife and I are a bit strict with them. But both of my kids are A students. Both consistently win in their school’s annual speech competitions. My daughter won first place three years in a row. She is part of the school’s environmental club and has been identified as a leader among her peers. She read at a grade 5 technical level in grad 2. My son is even smarter academically, incredibly creative and has a wicked analytical mind. He joined the chess club, he joins sports teams, he ran for student council, and is consistently a leader in group projects.

Enough bragging. The point is, I constantly tell my kids that I don’t care how well they do in school or in sports or anything else. If they can look me in the eye and tell me from their heart of hearts that they tried their best, that’s all I ask. This is what I believe we should teach all of our children. The money is good to have, for sure, but it’s not the goal––and it should never be a crutch.

#123 Ann on 02.04.13 at 10:23 am

#121 Bigrider on 02.04.13 at 10:08 am
I bet ya Pearls parents as risk averse as they are to financial assets , log into realtor.ca and MLS.ca looking for a ‘deal’ on a pile of bricks they can buy to rent out to someone else. You know ‘real’ ‘safe’ ‘investments’ ..LOL

They sound Asian ( not Italian or else would have done the same) that’s why I put that out there. Nothing personal..

Please take with a sense of humour
.——————————————————————–Tread softly be politically correct, Don’t hurt anyone’s feelings LOL

#124 rosie "moving forward" on 02.04.13 at 10:24 am

#93

Their grammar skills are obviously not all together there. Therefore, they’re lacking in basic grammar and that is their fault. Or is it the fault of their stars. I will assume the best in that they’re attempting to move forward.

#125 Inglorious Investor on 02.04.13 at 10:24 am

#106 Humpty Dumpty on 02.04.13 at 4:02 am

“Doesn’t Experience reveal an individuals trustworthiness by their actions, rather than knowledge”

Absolutely.

#126 mortgagebrokeront on 02.04.13 at 10:33 am

terminology, what is TNL@TB

#127 mortgagebrokeront on 02.04.13 at 10:34 am

is it the nice lady at the bank?

#128 Ret on 02.04.13 at 10:47 am

#31 T.O. Bubble Boy
“Tamara has a fully indexed defined benefit pension plan but no RRSP.”

Not fully indexed for service after 2009 in Ontario. Further indexing cuts are a definite possibility. Sorry Tamara. You should have been a cop or firefighter for the gold plated pension plan and you would have had full medical and dental benefits to boot. You will have none of those. Municipalities just raise taxes to cover actuarial shortfalls and benefit costs.

The other numbers for her appear to be too high as well unless she started a 35 year career with a university degree and a year of teacher training at 18 years of age. Rather unlikely.

These weekly G&M articles of family finances are 90% fabrications IMHO. This average family has $200 large a year coming in and yet they have a leased car and mortgage payments with a combined total of $2800 a month? What’s with that?

#129 TEMPLE on 02.04.13 at 11:11 am

I mentioned nothing about picking stocks. As for ETF fees, most are miniscule, and embedded. If you are too cheap to hire professional help, then don’t. By the way, there are fees embedded in this blog. — Garth

I know you didn’t mention picking stocks- I did. You posted about the stock market. I don’t agree that ETF fees are minuscule, especially when added to the annual portfolio management fee. Fees kill, and that is not just being cheap; it’s being aware of value.

You have somehow conflated stocks with risk, and I can see your point when it comes to inexperienced investors. I don’t think that applies to you. Picking stocks vs. ETFs is more tax efficient for the client and can produce better returns.

I happily pay the fee embedded in this blog.

TEMPLE

#130 Inglorious Investor on 02.04.13 at 11:11 am

85 Hawk and 93 maria:

I hear you.

The larger issue is public sector accountability, as you say.

And IMO, teachers should be intellectuals. Unfortunately that’s not what I’m seeing in general. Though some of them do make a real effort, and they may have other strengths that also bring value to the classroom.

#131 hangfire on 02.04.13 at 11:24 am

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#132 Regan on 02.04.13 at 11:24 am

I’ve got such mixed feelings here – on the one hand Garth’s definition of wealth really speaks to me – that time is the only thing we can’t buy so why not put all your other resources into using it wisely and having a grand old time. I think Old Man also once said that wealth is not stuff, wealth is freedom. I feel that way too. But… I also recognize that this is not how everyone defines it.
Pearl’s parents are probably like mine and grew up in great hardship and turmoil. For some people, wealth is freedom from worry. Wealth is living within your means. It’s a valid feeling and just as valid a way to define wealth as any other. Also, Pearl is unhappy with their finances, but are they? They have their home, it seems they have their health and their children close by. They’ve had staggering success with one investment (a house in Vancouver) that is undoubtedly their emergency fund, and can pay their daily bills with a nest egg that is guaranteed to last them forever. He retired at 54 and has a pension too! Geez people, they have arrived! Haggling at the bank and getting a good deal on stuff is second nature at this point in life – I enjoy the same game myself. I think Clevernam3 has a point in saying simply that they could shop around for better GICs. Now, this may fall into the ‘worrying about money’ category that diminishes their sense of luxury. I’d suggest Pearl could offer to manage this for them so they can effortlessly enjoy even more money, but I think she could try working within their comfort levels of risk and accept that this is their choice to make.

#133 Mike on 02.04.13 at 11:26 am

#108 happy renter on 02.04.13 at 4:03 am
I’m getting out of my GIC that pays 1%.I’ll listen to Garth until another 2008 comes around in a couple of years.With the US putting 40 billion dollars into the market its only going up.Good times ,everybody cashing in the stock market bubble.

There is no stock market bubble. Bubbles exist when a market exceeds valuations based on certain and historically relevant metrics. For the stock market its earnings, for housing its income. That is why we had the 2000 tech bubble; because prices were way too high in relation to earnings. That is why the market has had 10 years of straightening out, it came into the decade too hot, and had to cool down. Its also the same reason housing is on its way down; its underlying valuation metric – incomes – do not support prices. Its that simple folks. If something separates from its long term average, it will correct up or down, depending on whether it is under or overvalued.

#134 DM in C on 02.04.13 at 11:55 am

What most permeates your comments is not experience, common sense or even fear. You are bitter.

++++++

Mic D’

And never heard of formatting — your posts may have something of value, but I’ll never read them as they are just lines of endless text. Learn to use the return key.

#135 Asse on 02.04.13 at 12:13 pm

nIglorious, I will always teach my kids to challenge themselves. Other expectations are moot and based on your own inadequacies. Knowing that they will have the means to propel themselves into whatever career the choose based solely on interest is gratifying. I’m working on my kids kids legacy. Money is security. No more no less.

#136 Luc on 02.04.13 at 12:13 pm

From a penny pincher, what are the implications for rounding off pennies in savings, TFSA, RRSP, etc., in investments accounts like ETFs, REITS and bonds, etc.? It could be a big payoff day for the banks and investment companies…

Not really. $1.02 and lower is rounded down to $1 = loss. $1.03 and above is rounded to $1.05 = gain. Sounds like a wash to me. Man, this is a cheap crowd today. — Garth

#137 mf on 02.04.13 at 12:19 pm

#34 espressobob

Can you use the MER fees on preferred share ETFs as a tax deduction?

No. Fees embedded into mutual funds or exchange-traded funds are unlike advisor fees, and must be paid from after-tax income. — Garth

#138 Bigrider on 02.04.13 at 12:20 pm

Well ,so much for using untapped equity from your home for leveraged investing strategies in mutual funds or financial market investments of other kinds.

http://www.thestar.com/business/personal_finance/2013/02/03/fund_dealers_paid_extra_for_pushing_investment_loans_roseman.html

When other fee only planners are advising people not to do it (not our gracious host of course who is in favour) you know the jig is up.

Oh and by the way same fee only planner quoted says that it is a-ok for real estate because “You can get your head around what you are investing” and ready for this, teeing up now ! quote , ” You can’t liquidate your real estate investment easily ” !! unquote.

There you have it. The advantage of illiquidity !!

Borrowing to invest is fine for some people, inappropriate for others. Interesting how Canadians will buy inflated real estate with 95% leverage and no interest tax-deductibility, and yet flip at this notion. — Garth

#139 Bigrider on 02.04.13 at 12:24 pm

http://www.thestar.com/business/personal_finance/2013/02/03/fund_dealers_paid_extra_for_pushing_investment_loans_roseman.html

And one more thing people from article above quote “no trustworthy advisors recommend leveraging to their clients” unquote.

You will only find trustworthy pushers of leverage in the mortgage brokerage and realtor community…LOL

#140 HD on 02.04.13 at 12:25 pm

#122 Inglorious Investor on 02.04.13 at 10:21 am

Great post. Thank you for sharing.

Best,

HD

#141 Bottoms_Up on 02.04.13 at 12:38 pm

#91 robert on 02.04.13 at 1:30 am
—————————————
If I were them at this moment what I would do is invest $250,000 at a target gain of 5%/yr (should double in close to 10 years), and eat into the other $250,000 over the next 10 yrs.

That would immediately give them over $2000 per month to spend, AND, in 10 years, they will still have their $500,000….

#142 Doug in London on 02.04.13 at 12:40 pm

@Soylent Green is People, post #12:
Don’t blame me I didn’t vote Conservative, never did and probably never will. However, most Canadians must approve of Stephen Harper or they wouldn’t have voted for him.

@lawboy, post #27:
It’s not always a matter of hating one’s job that prompts some people to retire early. It’s more a matter of having the freedom and time to do other things that being straight jacketed to the time commitments of a job don’t allow.

#143 Inglorious Investor on 02.04.13 at 12:49 pm

#129 TEMPLE on 02.04.13 at 11:11 am

ETF management fees are typically, if not always, deducted from the returns they generate. You don’t see the fees because, as Garth said, they are embedded.

Whatever returns you are getting with an ETF (e.g distribution), you only see the net returns (after the fee has been deducted).

This raises some obvious questions, such as: how do I know the fee the ETF sponsor claims is the fee they actually charge? Most ETFs are required by the OSC to be audited annually and they must supply proof of same. You can dig up the documents at the SEDAR web site if you want to see who the auditor is, the funds financial statements, etc.

#144 live within your means on 02.04.13 at 12:50 pm

#122 Inglorious Investor on 02.04.13 at 10:21 am
#113 Asse on 02.04.13 at 6:07 am

“Thanks to them my kids legacies are secured and that my friends is priceless comfort.”

If I may, don’t tell your kids that, or they may grow up with no ambition or goals. I’ve seen this far too often, as I’m sure have many on this blog. Teach your kids to be self-sufficient, to make their own way in the world, and to make the world a better place if they can.

I too have ‘rich’ in-laws who are very generous (especially of themselves, which is the most precious gift of all). But I run my finances and investments as though their money does not exist. And whatever money they set aside for my kids is their business.

I try very hard to instil values, such as as a strong work ethic, critical thinking, self-sufficiency, integrity, thrift, respect and courtesy for others, and healthy skepticism of authority (including my own). I teach them that if they want something, they must earn it.

Some people think my wife and I are a bit strict with them. But both of my kids are A students. Both consistently win in their school’s annual speech competitions. My daughter won first place three years in a row. She is part of the school’s environmental club and has been identified as a leader among her peers. She read at a grade 5 technical level in grad 2. My son is even smarter academically, incredibly creative and has a wicked analytical mind. He joined the chess club, he joins sports teams, he ran for student council, and is consistently a leader in group projects.

Enough bragging. The point is, I constantly tell my kids that I don’t care how well they do in school or in sports or anything else. If they can look me in the eye and tell me from their heart of hearts that they tried their best, that’s all I ask. This is what I believe we should teach all of our children. The money is good to have, for sure, but it’s not the goal––and it should never be a crutch.
………………

Many years ago my PIL’s inherited $500k. PIL’s grew up in France during the war. They’re not consumers. They are very generous w/kids & g’children. They invested the inheritance back then & reaped. Rather than waiting to give to their children when they died (inheritance taxes) they gave to their children annually within legal limits. One BIL is a spent drift so several yrs. ago they put money in his savings acct. as he can’t touch it without returning to France (which he hasn’t for several yrs. ’cause they can’t afford it.) PIL’s are 80 & 82 & have enough money set aside if they have to go into a Nursing Home & not counting on the sale of their home to fund it.

We’ll be visiting this year for a mo. visiting family & friends. I really only wanted to go for 3 wks. but had to compromise. Airline resvs. made, now just to make resvs. w/Renault Eurodrive.

We may not have have as much invested as we should, but both DH & I have, IMHO, lived an interesting life. No regrets.

#145 Mister Obvious on 02.04.13 at 12:56 pm

in or out
left or right
tory or grit
gentleman or knave
buy now or be priced out forever
gamble in the markets or keep your money safe

So much black & white thinking in this world…

#146 Inglorious Investor on 02.04.13 at 1:04 pm

#136 Asse on 02.04.13 at 12:13 pm

Yeah. Didn’t mean to offend you. For me it’s about each child realizing his or her own potential. I encourage them, but never force them, to try different things for the experience, and because one never knows what one may be good at or find a love for.

#147 Edward on 02.04.13 at 1:10 pm

Wow… As far as I remember, Garth has never even mentioned teachers in his blogs. Where’s this hate on coming from?

I’m not a teacher, but you people are so good at regularly blaming them, civil servants, police officers, politicians, boomers, bankers, and everyone else (who isn’t you) for all things wrong with society. This is a swamp full of haters. If you think everyone else in the world is the problem, look in the mirror because it’s probably *you* who’s the real problem.

#148 John Prine on 02.04.13 at 1:15 pm

#108 happy renter on 02.04.13 at 4:03 am
I’m getting out of my GIC that pays 1%.I’ll listen to Garth until another 2008 comes around in a couple of years.With the US putting 40 billion dollars into the market its only going up.Good times ,everybody cashing in the stock market bubble.
——————————————————————

Credit Unions are offering 5 year at 2.5% for GIC’s, we get an additional 1/4 point in profit sharing from ours so one can have a “cautious” part of your portfolio without a “1%” GIC. Most of these can be changed up on their anniversaries each year if rates rise.

Why invest at less than inflation, fully taxable? You must have a lot of money. — Garth

#149 Nuke on 02.04.13 at 1:20 pm

Defined benefit plans are the holy grail of retirement planning, especially for Boomer aged Canadians. $100,000 income @ 2% benefit pays $2,000 pension for each year worked. 10 years to retire would guarantee $24,000 a year, on personal pension contributions of about $80-$90,000. Try to to turn $90,000 of savings over ten years into $24,000 of guaranteed income for life. You’d need to make about 20% to get that type of payout. Boomers without a defined benefit have to take on much more market risk to match near a Boomer paying into a Defined Benefit plan.

#150 Inglorious Investor on 02.04.13 at 1:22 pm

#145 live within your means on 02.04.13 at 12:50 pm

Yeah. As Garth says, it’s about freedom not stuff. Words of wisdom.

I love the fact that even though my in-laws have money, you would never know it. They are not materialistic or greedy, and neither is their daughter (one of the many things I love about her). They have some rental property in Europe that some other people might squabble over, but to them it’s inconsequential.

My wife’s uncle in Europe wanted to give her a plot of land, but she graciously turned it down. When we happened to mention this in conversation over dinner with a cousin of mine, he couldn’t believe that my wife would refuse such generosity. His in-laws have a parcel of land in Greece and he’s all over it like a virtual squatter, already making plans for the vacation home he would like to build there one day.

To each his own.

#151 TomJefferson on 02.04.13 at 1:26 pm

Meanwhile, in Dartmouth NS – http://www.meetup.com/The-HRM-Real-Estate-Investor-Group/events/102032522/

#152 Canadian Watchdog on 02.04.13 at 1:38 pm

BBC Documentary: The Money Trap | How Banks Control the World Through Debt Link

This is what drives 90% of Canada’s economy.

#153 Wes Mantooth on 02.04.13 at 1:42 pm

The confidence people have in their ability to time the market is probably misguided..

What makes everyone so sure that they will be able to soundly pick the bottom of any asset class?

Further, if everyone is so convinced that real estate has no where to go but down and prices have already fallen… Is that not more indicative of a good buying opportunity?

#154 GT on 02.04.13 at 1:44 pm

I know Garth has given many tips on investing (thank you!), but if I’m looking for professional advice on portfolio review/reorganization, how do I go about looking for a good advisor?

#155 Bigrider on 02.04.13 at 1:46 pm

Garths response to Bigrider at #139.

Garth, I know you deleted the last sentence of my comment and for good reason I guess, fine, language was bad, but I am surprised you are not more angry about the article.??

As an advisor who recommends leverage in the appropriate circumstances you have been labeled as “untrustworthy” and by those people who would have same occupation. !

Yet the levering up of individuals in this country for bricks and mortar, as you mention, goes virtually unregulated and unchecked . To boot ,these independent financial advisors find that completely acceptable !! ??

Your next round table discussion with the RE pumpers should feature this absurdity in public perception in my opinion.

#156 NoName on 02.04.13 at 1:47 pm

#92 Devore on 02.04.13 at 1:38 am

I do agree with you to somewhat…
but, I hope that you are referring only to baby boomers as a source today’s problems, when you say: “It is a problem of our own design.” because they (BB) designed educations system not us.

“They leave school and enter the workforce unable to deal with differences in age, authority, opinion or culture…”
gen_X and Y have no problem with; difference in age authority opinion and especially culture, what we have problem is penetrating Old Boys Clubs. Now days gen_XandY-ers with bachelor degree with no or very little experience are in direct competition with foreign educated Masters and PHDs. Now imagine BB interviewing gen_XorY with all that predigest on his mind. And worry where he can cut a cost for to get year end bonus.

There is no middle, it is all about Old Boys Clubs, and preserving BBs way of life.

Maybe BBs are “unable to deal with differences in age, authority, opinion or culture…” because it is more of them.

(how to cut cost)
http://goo.gl/0nCPj

#157 Smoking Man on 02.04.13 at 1:58 pm

Last Wednesday I made another perfect call…..

You guys want me band, obviously non of you banshees have a trading account.

Up huge again………….

#38 Smoking Man on 01.30.13 at 10:47 pm#176 Inglorious Investor on 01.30.13 at 9:38 pmOn Rim, sorry BBI to agree it was a ridiculous sell off, but that’s was what made me bullish. It wasn’t natural, my kids and their freinds are bored with iphone5, had them for a few years.The chatter on Facebook is positiveHonesty,

If you see it go horizontal for two sessions, go huge on Friday afternoon..

#158 HeartoftheWorld on 02.04.13 at 2:05 pm

So, risk on? Or risk off? The picture of the gas guzzler provides a nice starting point: risk OFF, and not into GICs, but into real assets. Why? Because this time it really is different.

Below is a link to an impeccably reasoned and beautifully written report by a group of London based economists, ‘Perfect Storm’.

Here is the best summary I can manage:

We are now at the end now of a ‘debt super cycle’, an exponential growth of debt, forty years in the making. During this period we in the west have essentially been living on debt. We have been enabled and encouraged by our elites to do this through artificially low interest rates, and by an economy built around consumerism. Historically low interest rates have engendered asset bubble after asset bubble throughout this period: most recently the Internet stock bubble (blew up in 2000) and the housing bubble (blew up in 2008).

A major driver of these asset bubbles and of our bubble economy has been ‘globalisation’, defined as outsourcing our manufacturing industries to countries like China and India. Now we are reduced here in the G8 to ‘taking in each others washing’ as an excuse for an economy. This worked great in the short term for us and for the ‘globalisers’; they increased their profit margins dramatically on Chinese manufactured goods purchased by us with borrowed (or leveraged) money. That was until 2008, when the debt bubble popped.

This entire edifice has been built, over the last two hundred years on a ONE OFF exponential pop in EROEI — ‘energy returned on energy invested’. Economic activity has nothing to do with ‘money’, except incidentally (that is, money is a way to keep score). Really, it is a collection of energy transactions. Growing crops using a horse and plow gives an EROEI of 1 to 10; i.e 1 energy input returns 10 times its investment in foodstuffs. That was during the preindustrial age. During the past two hundred years EROEI grew exponentially due to the carbon based fuels revolution. This enabled everything to increase exponentially: population, industrial production… the list is long. Now we are at the end of this EROEI pop, and the perfect storm is upon is. The reason: a collapse in EROEI, which has already started and is accelerating very quickly.

Example: in the 1930s 1 barrel of oil invested in developing a Saudi oil field returned 100 barrels of oil. Today, 1 barrel of oil invested in developing the Alberta tar sands returns 3 barrels of oil.

So: we now have no economy left beyond ‘taking in each other’s laundry’; the mountain of debt that has been accumulated over 40 years can only be repaid if there is constant economic growth; and economic growth can only resume if there is a high EROEI…Ain’t gonna happen…So the debt mountains will not be paid back, contrary to what you may read in the Vancouver Sun newspaper, unless our governments simply print the money to do so.

http://www.tullettprebon.com/Documents/strategyinsights/TPSI_009_Perfect_Storm_009.pdf

#159 Beach Girl on 02.04.13 at 2:32 pm

Way too many teachers on this site. I am getting banned again. Ya, your kids are brilliant as you are obviously doing their homework.

#160 Dorothy on 02.04.13 at 2:36 pm

#71 – Ogopogo said we live in an age of “fabricated intergenerational conflict” and I agree with him.
The main stream media has inundated us with articles and reports aimed at getting younger generations to blame “boomers” for all current financial and economic woes. And, judging by some of the comments we see regularly on this blog and others, the intense media campaign has worked. Young people now blame their parents and older neighbours for problems those folks had absolutely NO contol over, and who themselves are also victims of many of the same or similar economic and financial policies.

Turning the masses into tribes who play the “blame game” by pointing fingers at each other (instead of at the government and corporate elites who are REALLY responsible for many of our current economic and financial woes), is exactly the purpose of all those media reports. And like the sheeple most of us are, we all fell for it.

Many of the gains made by both the working and middle classes following the Second World War have been slowly eroded. Wittled away piece by little piece over a long period of time, mostly unnoticed by the masses until it was something that was removed or reduced that actually affected them personally. (It’s the old adage of “when they came for the *****, I didn’t complain because I wasn’t a ****, but when they came for me there was no-one left to complain).

Pensions are a good example of this. Workers sacrificed much to make the pension gains they did over the years, mainly with the help of the trade union movement. Once people had a comfortable enough life that they forgot what life was like before unions, they began to resent paying dues, and unions slowly became weakened or, in many cases, disappeared from some workplaces altogether. Once the unions became weak and/or disappeared, many of the “benefits”, (including pensions), that those unions had helped acheive, also became weakened or disappeared. The few remaining holdouts are the workplaces that still have reasonably strong unions. However, the main stream media has done such a good job of demonizing those unions and the workers they represent, that all those who no longer have this benefit are now screaming for those who still do to have it reduced or taken away.

In the past, workers without pensions would have been demanding their profitable employers provide one as part of their pay package. But apparently, thanks in part to the intense media campaign, not anymore. Now the masses, instead of aspiring to having pensions similar to their more fortunate counterparts, simply want to drag those more fortunate ones down to their own less fortunate level. How convenient that is for those companies who make more profit by no longer having to pay those pensions. And the fact that many of those companies CEO’s and Board of Directors happen to be good friends with those who own and control the media is, of course, just a coincidence.

The idea that the average person, on the average wage, can save enough over their lifetime to live in the lap of luxury following retirement is a myth. Most people can, through careful money management, save enough to supplement a small company pension. But once you take away that pension, the majority are destined to either work until they drop, or live out their later years in poverty. And you have only the wealthy 1% to blame for that; plus yourselves for being so complacent while those 1 percenters quietly changed the rules.

It’s time to stop allowing their strategy of “divide and conqer” to work, and start pointing the finger at those who are the TRUE instigators of our current woes.

#161 Frank le skank on 02.04.13 at 2:51 pm

#147 Wes Mantooth on 02.04.13 at 1:42 pm
Prices have barely started to fall. Do you think it would have been smart to buy in the US when prices just started to decline?

Some people try to make it appear as though the soft landing/crash/melt is something that happens in a month or 2 and then its over and its back to sunshine and rainbows. It takes a long time and a lot of pain before we reach the bottom.

#162 Westcdn on 02.04.13 at 2:55 pm

After I lose trust in someone or something (Bank of Canada), I move on and try to find answers or place my trust with new people. I have been researching the “shadow banking system” (SBS) to get a better understanding of Quantitative Easing (QE). http://en.wikipedia.org/wiki/Shadow_banking_system -the last paragraph is important. I find this a complex subject. I have oversimplified plus there is a US orientation as that is where the best information is.
To summarize for the moment, the key ideas I have so far are: Credit/debt expansion = Asset price appreciation, most of the credit expansion during 2000-2008 was due to the growth of SBS, there was a run on the assets of the SBS during the financial crisis which caused total credit/debt to collapse thereby reducing asset prices (markets) and threatening a deflationary economy.
The trigger for the financial crisis was the level of bad mortgage debt which had been securitized into the SBS. One of the key differences between the conventional banking system and SBS is that conventional banking liabilities have government guarantees in place. The Federal Reserve also acts to prevent runs on conventional banks. The SBS does not have government guarantees or something like the Fed. The Fed was faced with restoring the lost credit/debt levels or face deflation resulting in a depression.
Their first action was to purchase toxic debt from the conventional banks. The second action was QE which had the benefit of reducing interest rates but more importantly, restored the amount of credit/debt lost by the SBS. I think this may explain why QE has not caused the inflation many predicted (so far). I don’t mind low interest rates and inflated asset prices but without economic growth this game cannot last. QE has failed to stimulate economic growth because more debt does not solve a debt crisis – enough for now, maybe more to follow.
I am guessing a melt up in the stock markets and continued low interest rates for the next six months. I don’t foresee a market correction like 2008 because of QE. Real Estate prices in my area appear to be holding as I don’t see any price reduced stickers on for sale signs. I think that will change as the inventory of unsold home rises.

#163 travelling boy on 02.04.13 at 3:10 pm

Couldn’t resist posting, even though you dogs might have seen it elsewhere. Front page of the India Times today, Cars in India not safe enough for Canadian PM. Harper flew an armoured Caddy and a unnamed SUV for his rides in India last year at a cost of more than a million.

An armoured Mercedes was offered but refused by the RCMP. Aus PM accepted the benz.

Ho Hum whats a C-17 with a Caddy and a Suburban flown over with a cost of more than a mill.

#164 syfon on 02.04.13 at 3:23 pm

Hi Garth
I want to share something with you.
Just talk to a lady from GrowthWorks former Working Venture.
Goverment supported invested scheme.
You where getting extra tax break from goverment to keep money there.
Kind lady informed me nicely that my money may not be available to me even that price of the venture is Quoted every day and is going down daily too.

Garth what do you think about the whole situation?

#165 Humpty Dumpty on 02.04.13 at 3:25 pm

This Is Housing Bubble 2.0: David Stockman

“We don’t have a real organic sustainable recovery because in a world of medicated money by the central bank, things aren’t what they appear to be,” Stockman argues.

http://finance.yahoo.com/blogs/daily-ticker/housing-bubble-2-0-david-stockman-133026817.html

Lauren Lyster riding in your 57 Chevy…
An appealing goal…

#166 Old Man on 02.04.13 at 3:31 pm

#151 Smoking Man – See you are gambling again, and hope all works out, and watch Reitmans for a future takeover target from the USA. Too much there not to overlook, with two old men in control; virtually no capital debt; high dividend payout; and they control the entire retail women’s clothing market in Canada.

#167 Andrew on 02.04.13 at 3:38 pm

Love this quote:

“You can’t just walk away, you’ll be sued, you are in breach of contract,” says Mr. Batori, adding he has only seen someone try to walk away because of a death.”

-Financial Post, Feb. 2013

Keyword: Just “Try” to walk away from a real estate deal after dying…

Real Estate is crazy.

#168 Mic D'angelo on 02.04.13 at 4:03 pm

Garth, I am not bitter and have more than enough common sense. I sleep well at night and unlike others I am not afraid of competition. I worked all my life competing with others. I know the facts and how stock markets, governments and banks, investment companies, and corporations manipulate the economy. A lending institution like a bank exists because of deposits from private investors or depositors. They make money off of my money. I don’t want to be a bank. If you want to be a bank, real estate company, a shareholder or stockholder go ahead. I don’t get paid big commissions and fees for telling people what they should do with their money. The federal reserve and world central banks want people to take elevated risks with their hard earned money. I have no fear just a critical thinking mind that analyzes why they want to convince me that I must take a multitude of risks with my money with the chance to get higher potential long term return and keep up with inflation that they created. Garth, if I lose money nobody is going to bail me out. If the CDIC, DICO, or what ever government guarantee they say will protect me,it is not free. Me and other taxpayers pay through all types of taxes, we pay through inflation every year, we pay through lower GIC, bond interest rates and yields of at least 2.0% to 3.00% per year in loss interest income that would in a normal interest rate environment at least 5% to 6% per year. We, the people always pay. One last point, those that were able and responsible to save and invest for their future, family’s future are being punished by paying a higher portion of all taxes, loss of pensions, benefits and here and coming soon paying for more of our healthcare, long term care etc. Ontario’s last 2 budgets look it. All you liberals and socialists are generous with other people’s money not yours and call us bitter. Stop trying to take all my money by a thousand cuts, Garth. I know the mentality of the takers of society. Like I say over and over, I was not born yesterday and I’m not shark bait.

#169 Dr. Hoof Hearted on 02.04.13 at 4:09 pm

The Husband Store :

A store that sells new husbands has opened in New York City, where a woman may go to choose a husband. Among the instructions at the entrance is a description of how the store operates:

You may visit this store ONLY ONCE! There are six floors and the value of the products increase as the shopper ascends the flights.

The shopper may choose any item from a particular
floor, or may choose to go up to the next floor, but you cannot go back down except to exit the building!

So, a woman goes to the Husband Store to find a husband. On the first floor the sign on the door reads:

Floor 1 – These men Have Jobs.
She is intrigued, but continues to the second floor, where the sign reads:

Floor 2 – These men Have Jobs and Love Kids.
‘That’s nice,’ she thinks, ‘but I want more.’

So she continues upward. The third floor sign reads:
Floor 3 – These men Have Jobs, Love Kids, and are Extremely Good Looking.

‘Wow,’ she thinks, but feels compelled to keep going.

She goes to the fourth floor and the sign reads:
Floor 4 – These men Have Jobs, Love Kids, are Drop-dead Good Looking and Help With Housework.

‘Oh, mercy me!’ she exclaims, ‘I can hardly stand it!’

Still, she goes to the fifth floor and the sign reads:
Floor 5 – These men Have Jobs, Love Kids, are Drop-dead Gorgeous, Help with Housework, and Have a Strong Romantic Streak.

She is so tempted to stay, but she goes to the sixth floor, where the sign reads:

Floor 6 – You are visitor 31,456,012 to this floor. There are no men on this floor. This floor exists solely as proof that women are impossible to please.

Thank you for shopping at the Husband Store.

#170 Pearl on 02.04.13 at 4:24 pm

Wow, some of you really like CAKE!

It was all true – up until January 2011, you could get an almost-expired quarter-sheet cake for 99 cents on the clearance rack at Safeway. That and 1-kg boxes of cookies, scones, cinnamon buns…you name it.

Mmmmmm cake…..

#171 jess on 02.04.13 at 4:34 pm

cdpo’s
Constant Proportion Debt Obligation?
http://www.investopedia.com/terms/c/cdpo.asp#axzz2JxlNaUZG

lookback nov 2012

S&P ratings ruling could cost billions
http://www.afr.com/p/national/ratings_ruling_could_cost_billions_DkUcF9kn0EAf4gtKSR0nVN
U.S., States Plan to File Civil Charges Against S&P – WSJ.comonline.wsj.com/…/SB1000142412788732444590457828406400379…You +1’d this publicly. Undo
2 hours ago – “A DOJ lawsuit would be entirely without factual or legal merit,” the … on constant proportion debt obligations, or CPDOs, created in 2006

————–
Genworth, QBE mortgage insurers downgraded
Two of Australia’s leading mortgage insurers have suffered credit ratings downgrades from Moody’s Investors Service, following stress tests of the local property market
http://www.reuters.com/article/2013/02/04/idUSMDYbdXwN620130204

#172 Old Man on 02.04.13 at 4:35 pm

The Province of Ontario has once again pulled a fast one, as at January 1, 2013 the Drive Clean program has changed and need a new one soon. What a mess, as need my ticket, and this is all beyond the pale, as you will not believe what has to be done now for a reading to get a plate ticket, and have been on the phone all day long to pave the way for me, as the old system is history. Not good at all!

#173 Inglorious Investor on 02.04.13 at 4:50 pm

#169 Mic D’angelo on 02.04.13 at 4:03 pm

You hit quite a few of them proverbial nails square on the head there, Mic.

Illegitimis non carborundum.

#174 Stickler on 02.04.13 at 4:50 pm

@ #39 JSS on 02.03.13 at 9:39 pm
Can anyone comment about XTR?
XTR is an iShares ETF, which is approx 50% bonds and 50% equities. Monthly distribution, with yield approx 5.7% It’s basically an ETF which holds a bunch of ETF’s

>> My comment is I like it & have some. It is ~
60% bonds of various flavors
6% preferred shares
10% REITs
24% Div paying equities. (10%+ is utilities)

A good core holding IMO.

#175 Blacksheep on 02.04.13 at 5:08 pm

Pinstripe #133,

Who can be trusted in the financial industry?

So why do you trust me enough to come here for information?— Garth
—————————————————–
Faith…This is all about faith, or lack of it. A lack of faith in the ‘system’ has brought the bulk of your readership here. They don’t believe what their being told, because is doesn’t make sense.

You have repeatedly shown the MSM and RE boards / agents cannot be trusted, causing a loss of faith. Why? Because these entities are putting their own financial well being ahead of the clients. A lack of faith in politicians, bankers and yes, financial advisors is now standard for many. Will these beliefs come at a cost in potential lost revenue, as is the sample given today? Sure. Will you change the way they feel? Not in your lifetime.

take care
Blacksheep

#176 jess on 02.04.13 at 5:14 pm

watch out harvard

Second Grade Class Corrects The Grammar And Spelling Of Athlete Tweets … by correcting a batch of embarrassing tweets sent out by NFL …

http://www.reuters.com/article/2013/02/01/us-usa-harvard-cheating-idUSBRE9101AF20130201
======================
JAGOT J
5 NOVEMBER 2012
SYDNEY
SUMMARY
http://www.austlii.edu.au/au/cases/cth/FCA/2012/1200.html

High & Low Finance
A Casino Strategy, Rated AAA
By FLOYD NORRIS
Published: November 8, 2012

– a structured finance product developed in 2006 by the Dutch bank ABN Amro, known as a C.P.D.O
http://www.nytimes.com/2012/11/09/business/judge-in-australia-finds-flaws-in-sps-triple-a-rating-strategy.html?pagewanted=all&_r=0

#177 EIT on 02.04.13 at 5:18 pm

#168 Andrew on 02.04.13 at 3:38 pm

To walk away because of a death. As in “my wife just died in a car accident, no lounger interested!”

Dedoy! Sorry for ruining the quote.

#178 Leo on 02.04.13 at 5:25 pm

Good post !

On another subject, I believe TREB will soon release its data for January, and I wouldn’t be surprised if if was showing a significant increase in average sales price of SFH… And I’m sure the RE lobby will do its best to get it advertised on newspaper !
The issue is : the stats are not telling the whole story. On the Toronto districts I’ve been following for a year or so (C01,02,03…), I’ve recently seen a high increase of sales of large, expensive houses (1.2M+) and a significant reduction of transactions of so-so or average houses … These two very different segments are currently behaving in opposite ways. My explanation would be that we might be seing average people affected by the new F-rules (or waiting for the dust to seetle) whereas richer ones might be benefiting from an increase in some other assets (investment portfolio)…. Another possibility : this is the last increase before the full dive, as some people have delayed their acquisitions, grew frustrated and will now buy, pushing the market high a last time, before it can slow-down steadily for the years to come…

#179 Asse on 02.04.13 at 5:25 pm

Where I live there are many elderly neighbors. It’s a beautiful thing because my son’s have been adopted as grandchildren by many. As with most things age has brought knowledge through experience. Most invest in interest bearing vehicles because they’ve lived through financial meltdowns and are more concerned about asset protection at this time than accumulation. And they are bitter about interest rates. Realistically an exciting active retirement will end at 75. At that point insurance and health issues will decide your level of activity. I’ve had elderly tell me ‘their golden years aren’t so golden’. Plan accordingly.

Inglorious, one of us was overexagerating, the other underexagerating. Thanks for your concern but I have a couple of father role models that do fall within my scenario. By the way your view of the current false economy is true but you fail to take into account the fallability of the human element. The current enviroment has resulted in the end of entitlement.
We have a storm coming. Interesting times!

#180 Old Man on 02.04.13 at 5:59 pm

#177 EIT – the death element is the most important ingredient with Estate Planning, as this is when a fee based financial advisor such as Garth comes into play as he will know it all. One’s Estate within a portfolio must be established in a proper way with a good Will; a good Power of Attorney, and a good Medical Power of Attorney.

Garth will know this all, and if an Estate has to pass on to the heirs he will know how to eliminate the impact of taxation, and laugh at those who say a fee based financial advisor charges too much at about 1%; as is a bargain with any man with knowledge and integrity to do what is right for his clients.

#181 live within your means on 02.04.13 at 6:30 pm

#148 Edward on 02.04.13 at 1:10 pm
Wow… As far as I remember, Garth has never even mentioned teachers in his blogs. Where’s this hate on coming from?

I’m not a teacher, but you people are so good at regularly blaming them, civil servants, police officers, politicians, boomers, bankers, and everyone else (who isn’t you) for all things wrong with society. This is a swamp full of haters. If you think everyone else in the world is the problem, look in the mirror because it’s probably *you* who’s the real problem.
………………

Thank you Edward. Wish I could have said it as well as you did. !!!!

#182 Herb on 02.04.13 at 6:31 pm

#161 Dorothy,

nicely put. Thanks.

#183 Inglorious Investor on 02.04.13 at 6:39 pm

#179 Asse on 02.04.13 at 5:25 pm

I don’t know what you mean by exaggerating. My comments were quite sincere.

I’m well aware of the human element. The human element is what leads to things like the mortgage fraud that at least partly caused the financial collapse. As but one example.

As for the “end of entitlement”, I think you would agree that’s a good thing. But only if it includes everybody. Within families? That’s their business.

#184 Herb on 02.04.13 at 6:39 pm

#158 Smoking Man,

don’t forget to include your “Batman’s Ears” call on 7 Jan in your list of perfect accomplishments.

What was it they were supposed to presage again?

#185 Dr. Hoof Hearted on 02.04.13 at 6:46 pm

#173 Old Man on 02.04.13 at 4:35 pm

Here in BC we have Air Care, since 1991, which is supposed to end soon.

I doubt it accomplished much.

I think its’ all PR to stop visible smoke, but re: all pollutants ?, I suggest these Enviro whackos turn on the car in a closed garage and inhale…and get back to us.

#186 Ken R on 02.04.13 at 6:54 pm

#91 robert on 02.04.13 at 1:30 am

GM, Nortel, RIM and Apple are a basket of four stocks; hardly a barometer of the success of many other companies which have delivered growth and dividends to investors.

#187 Axxman on 02.04.13 at 6:56 pm

I have a downpayment on ice right now as I rent. Does this logic hold – put the money into bank prefs so if rates rise (doubtful) the prefs fall a little but house prices will fall even more so I’m better off – and if rates fall, the prefs increase in value and my downpayment grows somewhat offsetting the price impact that lower rates will have (eventhough I probably wouldn’t buy if rates went even lower)?

#188 fish on 02.04.13 at 6:59 pm

Barrons says “Get ready for a record on the DOW”. Hmmm…. when the magazines plaster their cover with stories like that the peak can be in already.

The NAAIM Survey of Asset managers hit an all time bullish high since 2006. In fact there is very little bearish sentiment.

Yup, go all in stocks, buy when the fever pitch is high!

By the way Garth, how do you value any asset class when interest rates in USA are effectively zero and the lowest they have been in Canada since you were a twinkle in yr daddy’s eye?

hah

#189 Ken R on 02.04.13 at 7:05 pm

#95Muddy Waters on 02.04.13 at 1:55 am
“Never forget:

Banks don’t give advice to benefit consumers.

Banks give consumer advice to be benefit banks.”

When I was about seven or eight years old I opened a no fee youth savings account. I wanted to save my money for a new bike. My grandmother advised me that while the bank was a safe place to keep your money, “they should never be trusted.” There is probably a reason for her distrust, which she never disclosed to me, yet it remains one of the most important lessons I ever learned.

#190 Mic D'angelo on 02.04.13 at 7:06 pm

#173 Inglorious Investor You like using Latin phrases. There are two old Italian sayings which is the mother land of Latin. The old saying is those that do not pay Saturday will be Sunday. Another old saying is clowns get punished with time.

#191 Nostradamus Le Mad Vlad on 02.04.13 at 7:09 pm

#80 Inglorious Investor — “We currently have an inflationary monetary system that requires accelerating growth in real wealth in order to sustain itself.”
– and –
#159 HeartoftheWorld — “So: we now have no economy left beyond ‘taking in each other’s laundry’; the mountain of debt that has been accumulated over 40 years can only be repaid if there is constant economic growth; and economic growth can only resume if there is a high EROEI…Ain’t gonna happen.” — Yep, we’re in a pickle all right, and obviously, it isn’t doing too well.

#95 Muddy Waters — Exc. reminder!

#99 TEMPLE — “By the way, there are fees embedded in this blog. — Garth” — Okay, how much do I owe and to whom do I pay it?!

#113 Asse — “They live a simple life now. You would never know of their means by their appearance or attitude. When his business partners passed away and he witnessed the destruction of families as they fought for estate he sold his properties and set up trust funds to prevent needless fiascos.” — Well pointed out. Shows the blatant greed of humanity — “What’s mine is mine is miine, and what’s yours is mine too.” It’s not worth carving families up over material (temporary) goods.

#170 Pearl — “Mmmmmm cake…..” — Pineapple upside down cake smothered with blueberries? I’m in!

#192 hangfire on 02.04.13 at 7:12 pm

DELETED

#193 Devore on 02.04.13 at 7:12 pm

#184 Herb

What was it they were supposed to presage again?

When it comes to predictions, only the winners count.

#194 EIT on 02.04.13 at 7:14 pm

Old man- I don’t doubt it. Besides, everything’s in my wife’s name.

#195 Smoking Man on 02.04.13 at 7:37 pm

Voting NDP, yes I have lost my mind.. But I hate Insurance companies.

They cut benefit by 50 precent, added 5 precent to premiums. They pulled out down an extra 2 billion…

NDP Wants to roll back rates by 15 precent.

Son was paying 500 a month in Ont, In Regina it was130…

Theives , backed by libs and tories..

#196 Stickler on 02.04.13 at 7:42 pm

“Self-imposed and needless frugality is no virtue. Being cheap should bring no pride. ”

I gotta disagree with you there. Sucking the earth dry of its resources so you can have meaningless material things is no virtue, and should bring you no joy.

Some people get hippie boners by treading lightly.

My comments had zero to do with sucking the earth dry. But thanks for being a sanctimonious jerk. — Garth

#197 HAWK on 02.04.13 at 7:54 pm

#153Canadian Watchdog on 02.04.13 at 1:38 pm

===================

Agreed, but I do wonder how many of the people taking on debt also have substantial equity and thus overall substantial positive networth and how many have little equity and thus little net worth.

#198 Ballingsford on 02.04.13 at 7:56 pm

Picked up the Money Sense magazine on the weekend to try to increase my knowledge about investing and it didn’t seem too bad. It seems like BMO products gets mentioned a lot and they have a few ads, more that other Financial Institutions. Vangaurd and iShares got mentioned a bit too.

Do they somehow have a stake in that magazine?

Does anyone have any recommendations for a good monthly investing magazine to read that is kind of easy to understood?

#199 Coho on 02.04.13 at 8:12 pm

Dorothy #161,

Great Post.

Divide and conquer has worked repeatedly and very effectively through the ages because few people take a stand on principle. Most only care about themselves and too many covet what others have. Thus most can be placated by a loaf of bread being handed out to them as they scurry away rather than refuse it on principle and take a stand with others to secure a steady stream of bread for themselves, their children, grandchildren and for generations to come. Sadly, it appears that most of us are too lazy, fearful, selfish and impatient to care about the future of our society. It’s all about ‘me’ — and that kind of mindset won’t benefit the people as a whole in the long run.

The direction we’re going is clear. More people not having the opportunity to work for living wages while the shrinking percentage of those that still do often begrudge the increasing numbers of the ‘have nots’ ending up at the welfare lines.

‘Reality’ — rather our pseudo-reality is presented daily by the ruling class via their very powerful propaganda tool, the MSM. I agree, the media is instrumental in pitting generations against one another, while those at the top of the wealth pyramid nod their heads in approval and laugh.

Divide and Conquer indeed.

#200 Al on 02.04.13 at 8:30 pm

@ #39 JSS on 02.03.13 at 9:39 pm
I have XTR in my TFSA for a few years now, quite consistent share price. I used to have it in my regular brokerage account, but moved it to the TFSA to get the better tax shelter. At least 1/3 of the payout is considered other income which is taxed at a higher rate, so this works better in a TFSA.

#201 Nostradamus Le Mad Vlad on 02.04.13 at 8:43 pm

-
2:54 clip Sandy Hook father says it like it is;
*
2:41 clip To see where the west is headed, look no further than California; US economy continually shrinking? Light Work thanks to ObombaCare; High Speed Trading Too fast to fail? Breaking the Chains of debt; No Mr. Bond, I expect you to die plus Mark Carney in the table of contents.
*
Silly Season Yes, it’s true and only the eccentrically harebrained English could come up with this. Tax on fresh air to help the environment; Considering First Israel took the Palestinians’ land, now Syria’s which would drag Iran into the war, thereby giving the US free rein to attack Iran, which will being China and Russia in; Time to Reset NAmerica? UN Agenda 21 + Monsanto Joining forces; Oh dear “Looks like Punxsutawney Phil (the groundhog) blew the call!” wrh.com; Guns ‘n’ Ammo See pic, and DHS are militarizing local police; Aspartame Linked to leukemia and lymphoma; 7:29 clip Big shock to big bang.

#202 Ret on 02.04.13 at 9:00 pm

Garth, it’s the penny. I just heard on the news. It’s gone. Contract law has taken a fatal blow and not a murmur was heard across this great land.

Sure we’ll save $11M but like any government program the final cost could be in the buh, buh, Billions.

Salaries and benefits for hundreds, if not thousands, of government employees to round up all those billions of pennies, transporting and smelting them, resale of metal, accounting, cost overruns and Lord only knows what else. We’ll all be broke and gone by the time this job is done.

It could take years just to teach Canadians how to round to the nearest 5. Hopefully there won’t be any shootings. A little confusion over a few cents on a bad day, would be enough to push some of our fellow Canadians right over the flipping edge.

#203 a prairie dawg on 02.04.13 at 9:09 pm

#187 Ballingsford

Does anyone have any recommendations for a good monthly investing magazine to read that is kind of easy to understood?

– — –

About 18 years ago, I started out with a subscription to Canadian Business Magazine. Pretty sure they’d have a electronic version by now too. I just wanted something that would help me learn the ‘language’ of the financial markets. After a few years of that I cancelled the magazine, and took my research online when the internet became available in Canada.

Most financial publications are not easy to initially understand simply because they aren’t written for beginners. I’d look up specific words that I didn’t understand and then reread the story. Absorb it at your own pace though. Then one day you’ll find that you don’t have to look up any new terms anymore. When that day comes, you’ll smile when you realize it. :)

#204 Ballingsford on 02.04.13 at 9:19 pm

Thanks Prairie Dog!

For example, when diversifying, and they say you should have 50% equity in your holdings, are they just talking about stocks or a certain segment of stocks?

#205 espressobob on 02.04.13 at 9:20 pm

#197 Ballingsford.

If you liked money sense then check out Canadian Couch Potato. Good info on ETF’s

http://canadiancouchpotato.com/about/

#206 McLovin on 02.04.13 at 9:22 pm

Regarding professional management fees: I find it amusing that many blog posters here who likely have less than $100K to invest moan and complain about fees yet investors who have millions of dollars happily pay 1% to have their wealth managed by professionals like Garth. I wonder who is right? In the end you get what you pay for. I bet Garth’s biggest clients complain the least because they know the value of good advice and the dangers of not getting it.

I did not write that. Honest. — Garth

#207 Old Man on 02.04.13 at 9:27 pm

#195 Smoking Man – get with the agenda as if you have a clean record the old ING which is now called Intact insurance Company will give you the best deal anywhere, as have had no accident in my life, so no claims, as break for those old women who run red lights, as know they are putting a shot or two into their tea before going shopping.

#208 Daisy Mae on 02.04.13 at 9:28 pm

#143 Doug in London: “Don’t blame me I didn’t vote Conservative, never did and probably never will. However, most Canadians must approve of Stephen Harper or they wouldn’t have voted for him.”

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

A mere 38% voted for Harper — 62% didn’t.

#209 Smoking Man on 02.04.13 at 9:39 pm

Old Man I pay next to nothing, it’s the kids that are getting hosed..

Hosed is an understatement……..

Mclovin I agree. But your a Suck up….

#210 Daisy Mae on 02.04.13 at 9:39 pm

#161 Dorothy: “…..and start pointing the finger at those who are the TRUE instigators of our current woes.”

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

You make alot of sense…

#211 Inglorious Investor on 02.04.13 at 9:40 pm

#190 Mic D’angelo on 02.04.13 at 7:06 pm

Sorry, not quite sure what you meant with those Italian sayings, but I was agreeing with you.

#212 Old Man on 02.04.13 at 9:43 pm

#194 EIT – the first I want to say as confuse words with break and brake, and EIT will get a DELETE, but you are being whipped by your wife, so come clean as all should never be in her name alone.

#213 Inglorious Investor on 02.04.13 at 9:54 pm

#198 Coho on 02.04.13 at 8:12 pm

Google Aaron Russo and Nick Rockefeller

#214 Dr. Hoof-Hearted on 02.04.13 at 10:01 pm

My comments had zero to do with sucking the earth dry. But thanks for being a sanctimonious jerk. — Garth

So far …in Garth’s “Best of Garth” top 10 comments for 2013.

Eggstra brownknowz pointz fer spellink “sanctimonious ” curecktly.

#215 Ballingsford on 02.04.13 at 10:11 pm

Expressobob – Thanks for that!

#216 Devore on 02.04.13 at 10:21 pm

#188 fish

By the way Garth, how do you value any asset class when interest rates in USA are effectively zero and the lowest they have been in Canada since you were a twinkle in yr daddy’s eye?

How? The same way you always did. Risk-free rate of return is just one input into the equation.

#217 45north on 02.04.13 at 10:25 pm

Daisy Mae: A mere 38% voted for Harper

that would be me

#218 mark on 02.04.13 at 10:35 pm

“Self-imposed and needless frugality is no virtue. Being cheap should bring no pride.”

I dunno, in some instances I hear people whinging about this tax or that tax, but then I go around to their house and they’re wasting electricity like nobody’s business. Can’t turn off a light, leave everything on standby and they’re moaning about the government taxing them – in this instance they’re taxing themselves.

And you can extrapolate this across their lives in so many areas. They torch their own money, but spend all their time complaining about what the government takes.

#219 Bottoms_Up on 02.04.13 at 10:35 pm

#172 Old Man on 02.04.13 at 4:35 pm
——————————————-
In the papers they’re quoting that up to half of cars are failing under the new system for Ontario’s drive ‘clean(-out-the-consumer)’ program. Something needs to give. We can’t keep spending that money on perfectly clean cars, taking days off work yadda yadda yadda just to be able to license our vehicles. There are some conservative MPPs calling for the program to be abolished (it hasn’t improved air quality) and rightly it should be.

#220 a prairie dawg on 02.04.13 at 10:41 pm

#203 Ballingsford

– — –

You could Google that question ya know? lol

When they refer to equity exposure generally it could be stocks, equity ETF’s, or equity mutual funds (yuck).

All of these represent “equity” in the form of shares of ownership in a company or companies.

Good luck with your learning curve.

#221 Fabrega on 02.04.13 at 10:48 pm

#73 Mister Obvious
“It is easier done than said”.
No it is not.

#222 Snowboid on 02.04.13 at 10:49 pm

#179 Asse on 02.04.13 at 5:25 pm…

“…Realistically an exciting active retirement will end at 75…”

Okay, I will tell that to our 92 yr old Phoenix neighbour with the new Mustang GT convertible, who is one of the top local ‘masters’ slo-pitch players.

Or the ones next door who are in their mid-90s and regularly head for Vegas to gamble and still manage several rental properties.

Whether in Phoenix, Kelowna or Victoria – 75 is pretty young by retirement standards these days.

I will admit many are conservative in their investments, but don’t tell them their retirement isn’t exciting or active!

#223 mortgagebrokeront on 02.04.13 at 11:00 pm

why don’t the old coots purchase an annuity?

if they want to live in freedom… they could get 6% payout for life…
why not put half their money in there?

#224 45north on 02.04.13 at 11:38 pm

Bottoms_Up: up to half of cars are failing under the new system for Ontario’s drive ‘clean

Regulations under the Highway Traffic Act specify which vehicles must pass an emissions test

yeah but I couldn’t find them (the regulations)
http://www.ene.gov.on.ca/environment/en/category/drive_clean/index.htm

Brand new cars don’t have to be tested. Cars that are one years old don’t have to be tested. If you add just one year to the cars before they have to be tested you could save a lot of money.

Take a look at the web site. These people are saving the planet! Getting mad doesn’t help. You have to work hard, be patient and shrewd to effectively reduce the cost of the civil service.

#225 Chubbychops on 02.05.13 at 3:14 am

Re: Inglorious Investor #122

Your in depth perception and erudite comments are read with interest. The only reason you can expound in this manner is because you have money. Those without opportunity, born under different and less fortunate circumstances would find it difficult to accept your thoughts. BUT, good for you, good for your wife and your children, may your luck continue.

#226 Cory on 02.05.13 at 9:20 am

#52 – Asse

I know how you feel. We are in the same boat but house paid for and good amount of investments but still feel poor. Definately can’t retire anytime soon. I really worry about our kids.

#227 Timing is Everything on 02.05.13 at 3:26 pm

Garth, riddle me this! Have you deciphered yet?

“Our government has taken aggressive and proactive actions since 2008 to protect the Canadian housing market and curb personal debt. We will continue to monitor the housing market to ensure its long-term stability,” Flaherty said in statement.

http://tinyurl.com/7qxv2f9

#228 Clevernam3 on 02.06.13 at 11:10 am

which probably explains why you come to a free blog of financial advice and attack your host. Classy. — Garth

Oh, please: you of all people should be thicker skinned, what with poking fun at most everyone else. Calling you a dickhead would an attack; my post was criticism, coupled with a playful reference to your mode of transport. Of course I’m looking for financial ideas, just like everyone else, but I come here for ideas, not advice (seems to me you have a disclaimer posted here somewhere regarding none of this being advice). No, you didn’t call these people idiots, but others certainly suggest as much in their posts.
You’re at your at your most credible (although perhaps not your most entertaining) when you thoughtfully address criticism.

After thoughtful reflection I conclude you irritate me. — Garth

#229 Clevernam3 on 02.06.13 at 8:43 pm

Actually, that’s both entertaining and credible. Nicely done.