The bomb

RISK 1 modified

“We’ve always lived below our means and have no children,” says Louise, “so it’s been easier for us to save than it is for many people.  Neither of us ever had well-paying work (my husband never hit $75,000) but we’ve never had big needs or wants – we spend about $50,000 per year.”

That seems to be enough when you’re in a small Ontario city like Guelph. At least for her and Paul. So on their combined incomes of $150,000 (but no pensions), they’ve saved up a storm despite paying off their home years ago.

Both are in the middle-fifties. They read the post here a few days ago about net worth, and seem a little shocked that the average Canadian (says StatsCan) clocks in at $243,800. As you may recall, a third of that number comes from pension benefits that may or may not be received in the future, and another 30% is in residential real estate, reflecting our bubblicious market and historic values.

“So our net worth number (including a conservative house value estimate) is: $2.45 million.  Of that, the house is worth about $350,000, and our after-tax accounts are more than half of the rest.

“Garth – since I like to feel secure, I feel I need to keep earning for a few more years (three perhaps? Do you think that’s long enough?) but my question is:  What the heck are “average” Canadians and Americans going to do to make it through their retirement years?  I don’t feel wealthy at all, given how many expenses will come our way during the next (possibly) 30-40+ years.  But when I see what the typical pre-retiree has saved, I just don’t understand how they’re going to make it.  What do you think?”

Indeed. The numbers are sad. At present 72% of Canadians do not have a corporate pension with any defined or pre-determined benefits. Most folks are lucky today if the employer matches them for contributions to a group RRSP, which is then managed by a company flogging mutual funds. Meanwhile real estate values are at record levels, suggesting this will change because nothing goes up forever. Those two items (pension, house) make up two-thirds of average family net worth, which would leave about $80,000 in actual liquid assets.

But as I mentioned, the wealth gap is growing, and the top 20% have net worth of $1.4 million or greater (like Louise, and a lot of people who come here), which suggests mucho middle-class people have far less liquidity and far more real estate equity than the median.

Now, what about retirement?

First, it’s long. Count on twenty years. That could take a lot of dough. Second, you’re largely on your own. The average Canada Pension Plan monthly payment is $611. Big deal. That’s $7,300 a year. Even if you worked your whole life and contributed the maximum (which relatively few do), the biggest monthly is $1,038. Once you hit 65, the Old Age Supplement adds $537 (but clawed back for many). So the average government pension package is a piteous $13,800 a year.

Worse, of course, you might not even get the OAS in the future until you’re well and truly wrinkled and dried up – like age 70. Already the qualifying age has been moved to 67 (for those born after 1963), and you can be sure it will move again.

By the way, the average American social security payment for retirees is $1,294 a month, or more than our CPP and OAS combined. Houses there cost 50% less and retirees have universal health care. Mortgages are fixed (no rate increases) for 30 years, plus people who retire with one can deduct both the loan interest and property taxes from their taxable income.

This may be why US stats look even worse than ours. The average Yank spends 18 years retired, and yet by age 50 has saved just $43,797. The number of people aged 30 to 54 who currently think they are screwed in terms of income after they stop working is 80%. Actually 36% save zero before retirement, and rely totally on government pogey.

So, in summary, Louise is right to worry. Yes, with her $2.45 million and the $150,000 a year in income it will throw off (forever, if invested nicely), she and her squeeze are okay. But society is unlikely to let millions of other middle class people – who foolishly saved too little, bought too much house and will be caught in the downturn – end up on KD and kibble. Given the wealth disparity and current demographics, it’s pretty much assured personal tax rates will rise and benefits like CPP and OAS disappear for all but the needy.

If you know that now, max out your TFSA and invest it aggressively. Think twice about loading up on RRSPs for retirement, which will be sitting ducks for any increase in general tax rate as all proceeds must be taken as taxable income. Stop putting money into assets which pay interest with no potential for capital gains, since rates will stay relatively low for years and the yield is 100% taxed. Focus on returns which come as capital gains and dividends, on which the tax hit is reduced by about 50%. Income split with vigour, most effectively through spousal RRSPs that can be collapsed during years of low income. Sell your house, invest and downsize at the most auspicious time. That could well be now. And understand, above all, that the greatest risk we face is running out of money. Not losing it.

As you know, the people who read this pathetic blog are not normal. Incomes and net worth are far above the herd. Meanwhile there are 85 million Boomers in the US and Canada. Their collective stagger into years of non-work and higher needs will sure be an economic bomb.

Have you heard what’s already being said about ‘eat the rich’? Yikes.

159 comments ↓

#1 DocInWaitingRoom on 07.23.14 at 5:09 pm

Looks like a typical boomer trying to save 100 bucks up on a tree… if we were in the usa maybe boomers would do their own polypectomies with a scissor and rented optical recess cameras…

Anyways the money won’t last even in the million plus unless spending is at one’s means and reduces, plus return is at least inflation plus a few extra bucks to tick over the account.

With boomers wanting to help their kids get a condo, get a mercedes amg gas guzzler or rover, and have that 2k bag to show off along with the latest in kitchen remodels im sorry but with credit bloat and left over moetgages its looking bad for most soon to retire

#2 ShawnG in TO on 07.23.14 at 5:13 pm

Reading today’s article remind me of the undergrad years. Seems like I’m the only kid in class who doesn’t have OSAP because I work part time. While I pay the full tuition with no help, everyone else have thousands and thousands worth of OSAP ‘forgiven’ .

why do we work harder so slackers get bailed out?

#3 Derek R on 07.23.14 at 5:19 pm

That’s an impressive amount of saving for a relatively low income. I guess having no kids helped but even so they are to be congratulated.

#4 Calgary Owner (2nd. Round) on 07.23.14 at 5:30 pm

It’s all about perspective, I guess… These people may feel worried and sorry for me and my $160k net worth (50% RE), but in return I’ve always felt sorry for people who is so afraid of the world that, as an example, work until the very last possible day when they already have enough money to live for the next 50 years. Who wants to live into the middle of the first decade of their second century anyways?

You will, when you get there. — Garth

#5 Mark on 07.23.14 at 5:30 pm

A few of my 20s-ish friends are rather disgusted that their families haven’t given them a down-payment, while a new $150-$200k motorhome appears in the parents’ driveway.

I don’t really know what to say about that. Sure, giving the kids a downpayment in a hyperinflated RE market isn’t exactly very responsible. But neither is buying an extravagant RV to make, at best, a couple week-long trips a year which could be spent in rented hotels at a mere fraction of the cost.

Anyone? Are the boomers just a bunch of narcissists for hoarding all the wealth and consuming it on nonsense, while the young starve? Or are they truly riding their own high speed train into a financial apocalypse of their own making?

#6 Greed is God on 07.23.14 at 5:31 pm

Thanks Garth. I thought I was doing OK until the last couple of days. Now I feel networthless. Is that a thing?

I guess I’ll plan on working until I kick it.

#7 calgaryPhantom on 07.23.14 at 5:31 pm

To start with.

Every dollar you spend on essentials, save 2 dollars. Invest 1 dollar and use the other dollar to buy your wants ( kia, boat, Harley etc etc )

Future is important, but present is more important. After all who knows how long one lives.

Remember, you can be on a MH17 or 370 on your first trip post retirement, with $2.5 million in liquid portfolio.

#8 johnny d on 07.23.14 at 5:39 pm

“…it’s pretty much assured personal tax rates will rise and benefits like CPP and OAS disappear for all but the needy.”

And that’s why escaping The Socialist Republic of Canada and taking your money and life elsewhere should be on everyone’s agenda. I’m not working my butt off to benefit someone else’s retirement.

#9 Millenial on 07.23.14 at 5:41 pm

Garth,

My accountant is singing in my ear that I need to get a medical professional corporation going. I’m an associate, don’t think I’d ever want to own or partner.
Do you think it wise? I would like to have some kids down the road.

#10 Calgary Owner (2nd. Round) on 07.23.14 at 5:48 pm

#6 Greed is God on 07.23.14 at 5:31 pm
Thanks Garth. I thought I was doing OK until the last couple of days. Now I feel networthless. Is that a thing?

I guess I’ll plan on working until I kick it.
_____________________________________________

I know there is no prize for “Most Improved”, or no one cares about it, but in the end is the only important thing: to do the best you can with what you have now. I would certainly feel “networthless” if it was a sheer comparison, but I actually feel very good about two things:
1. Considering where I started only a few years ago, I think I’m doing pretty well.
2. The future. Sure, the world is a scary place, but no matter what the circumstances are, the world is going to be facing me, and I’ll kick its ass! It’d be great to come back in a few years and compare net worths again hahaha.

#11 rosie "moving forward" in the knowledge that, "this won't end well" on 07.23.14 at 5:59 pm

Or you could ignore the doomsters. They just can’t get no satisfaction.

http://blogs.wsj.com/canadarealtime/2014/07/23/canadas-housing-market-doomsters-cant-always-get-what-they-want/

#12 R on 07.23.14 at 5:59 pm

Perhaps the Wynne government knows what it’s doing by engineering another pension plan. Since personal savings rates are so abysmal, we’ll force savings instead of facing a more serious retirement crisis years down the line.

#13 totalinvestor.com on 07.23.14 at 6:02 pm

“We’ve always lived below our means and have no children,”
“So our net worth number (including a conservative house value estimate) is: $2.45 million.

Adopt me.

http://postimg.org/image/6ls9hujgf/

#14 oldmac on 07.23.14 at 6:02 pm

Well…. good for them. I on the other hand prefer to do things while I’m young. That leads to not near as impressive a savings rate. I can always make more money but I can’t always make more holidays when I’m young and fit. Clocked 20K this month.

I guess I’m fortunate for the fact that my skill set lends itself to a large paycheques and no dependence on steady work.

I prefer to own my land, housing; produce my own power and most of my food. I’ve also invested more in my health than most in this largely health-unconscious country. Takes an awful lot of self education though. You’ve got to learn about everything from what may be causing your back pain and what exercises to do to remediate – to why your inverter might be losing efficiency during the colder months. Learning seems like a lost art to most these days. I can see it on their vacant faces.

So my investment strategy differs from most of yours I guess. Seems I manage to get everything most folks long for, and have more time to enjoy it.

Most haven’t caught on that ‘going green’ can mean putting more green in your pocket; not spending 800K on an ‘energy efficient’ infill. Oh well, give it another 20 years… I’m sure some people will catch up ;).

#15 AisA on 07.23.14 at 6:06 pm

“A few of my 20s-ish friends are rather disgusted that their families haven’t given them a down-payment, while a new $150-$200k motorhome appears in the parents’ driveway.”

When I came back to this country damn near broke + newly married (funny how those go together) after 7 years abroad, what family I have left offered to help me out with a down payment. I looked around for a place, oblivious to the price trend over the last 7 years and asked them in all seriousness if they were out of their *(%)$$#*% minds!

#16 Happy Renting on 07.23.14 at 6:09 pm

I guess the truly impoverished end up slum-dwelling, living with their (willing or not) adult children or in the kind of retirement facility you get when you only have the government to foot the bill. None are thrilling prospects, but everyone will end up somewhere.

Louise and Paul are better off working a few years more to make sure they don’t run out of cash. They seem like the kind of people who will be happier and feel more secure with a big pile of money, even if they leave a ton behind, versus enjoying spending it all and trying to die broke.

#17 me on 07.23.14 at 6:11 pm

rates will stay relatively low for years???

If this is the case, then houses will stay high for years.

Low rates=high demand for houses

Actually low rates bring higher prices, and ultimately waning demand. — Garth

#18 Vive Quebec on 07.23.14 at 6:19 pm

Hey Garth, you promised you would answer my question about your forecast for the CAD this year and in the coming years. Still looking forward to your follow-up!

#19 Entrepreneur on 07.23.14 at 6:23 pm

We lived “in the present” when younger but did save but that was spent too. You do what you can do at the time. We never thought of getting old but we did. I noticed on the commercials mention grandkids and grandparents; commercials before lived the moment like us. I say hand the reins to the youth…time to let them rule. One day we will have to.

The seventies were okay for small businesses but they were noticing hardships. The GST didn’t help them
when that came along in the early nineties. Many abandoned and worked for the government, big box stores, fast food chains; ones that had benefits. Easier on the mind and pocket. The weight is too much on one side. What about small businessess? They are the ones that move the economy so should have the respect from the government (who calls on the rules and regulations).

#20 pat on 07.23.14 at 6:42 pm

House and condo prices are at record levels. Transaction volumes are at record levels. The market just powers through everything regulators throw at it.

If you can’t beat em, join em. Might be time to buy because this train is not going down anytime soon. Even if it does go down 20% in the future, what is that, a year’s loss?

Anyone on the sidelines since 2010 has lost out big time. Even those that didn’t buy last year are already deep in the hole. Although this blog mentions that the high end in Toronto is suffering, look at the evidence. Lots between Bathurst and Bayview, the 401 and Eglinton, are on absolute fire. They don’t last more than a week and go at asking or above. I saw three lots in Lawrence Park sell recently, all within a week of listing. One sold for $150k over asking, the other at asking, and the third just under asking. These are tear downs selling for over $2 million and then new builds get priced between $4-4.5 million.

The market is on fire. Denial isn’t just a river in Africa.

Higher prices, more debt, more risk. And there’s more to life than that. — Garth

#21 Son of Ponzi on 07.23.14 at 6:42 pm

The guy is precariously balancing on top of the property ladder.

#22 mid20millenials on 07.23.14 at 6:43 pm

Good for them. Surely they know that they can retire now?

#23 HarperValleyPTA on 07.23.14 at 6:44 pm

I’ve been trying to max out my TFSA. Withdrawing $5000 a year from RRSP. Annual income is low, should I bit the bullet and take out full amount needed to max TFSA around 15 grand and get dinged the 20%? Have TFSA in diversified portfolio mix but want to max it out. I’m newly retired, and doing self directed investing. I have the time now.

#24 Son of Ponzi on 07.23.14 at 6:52 pm

My 14 year old son who will play in the NHL again assured me that he will look after me when I’m retired.
So, I party on. C

#25 Catalyst on 07.23.14 at 7:06 pm

Mid 50s, $2.5MM net worth, average expenses of $50K. Not sure if they are secure.

Like an article straight out of the financial post.

#26 Valyrian_Steel on 07.23.14 at 7:06 pm

My wife and I are pretty much also poster children for D.I.N.K’s. Our combined income has recently topped 250k (a nice chunk of this is dividend income) and we are spending less than 40k annually. So, we find that in our early 40’s our NW is around 2.1M.

I have come to understand that is not normal amongst Canadians our age. Though yesterday’s post proved that we are not entirely alone in not being financially dense.

I am actually thinking about retiring soon and becoming a “kept man”. Though since I am largely in charge our our investments, I will consider the 5k we get in monthly dividends as my salary. Wife is on board. Life is good.

I know Garth has expressed doubt at the frugal crowd’s ability to live on 40k or less – but, I’m telling you Garth, you can – in Vancouver no less (zero debt is pretty much mandatory of course).

#27 A Yank in BC on 07.23.14 at 7:34 pm

I cannot stop looking at today’s photo. A perfect visual metaphor for the housing market in Canada.

#28 High Plains Drifter on 07.23.14 at 7:40 pm

I rented a room from an older couple and their childless, single, late 30’s, lawyer, daughter and their penny pinching was a blast to watch. This was just east of Newmarket in the beautiful Ontario countryside. The donut tax of 1986 was coming in and the strategy to mitigate the extra expense was magnificent. In a mousey way. They were a throwback to the Scotch countryside of Johnson’s era, you know the guy who wrote the first dictionary. So after I have been double crossed the last time I will go out like King Lear. That probably only speaks to a few of you.

#29 Smoking Man on 07.23.14 at 8:08 pm

#27 A Yank in BC on 07.23.14 at 7:34 pmI cannot stop looking at today’s photo. A perfect visual metaphor for the housing market in Canada
…..

You got that visual
Looks more like Detroit to me.. Or an old man who’s hey days are behind him.

#30 Mister Obvious on 07.23.14 at 8:12 pm

#5 Mark

“Anyone? Are the boomers just a bunch of narcissists for hoarding all the wealth and consuming it on nonsense, while the young starve? Or are they truly riding their own high speed train into a financial apocalypse of their own making?”
—————————

Yes and yes. We are modern day Nero’s playing classic rock in the closing days of the age of Aquarius.

#31 another young md on 07.23.14 at 8:23 pm

#9 Millennial

Absolutely! Corporate tax rate is less than half the highest tax bracket. If you live below your means think of how much further you’ll be ahead with investments inside the corporation, all that corporate income compounding. Plus you can income split with spouse, fund their parental leave, etc.

#32 eddy on 07.23.14 at 8:28 pm

great photo as usual Garth!

here’s another

http://fbcdn-sphotos-g-a.akamaihd.net/hphotos-ak-xpa1/t1.0-9/s526x395/10547622_738850676157200_3359729341129354021_n.jpg

#33 2or3orsometimes7 on 07.23.14 at 8:28 pm

Why is it so many of you don’t have kids? Not judging, just asking.

#34 Mean Gene on 07.23.14 at 8:34 pm

So much for “The Future’s So Bright, I Gotta Wear Shades”.

#35 Italians love real eatate on 07.23.14 at 8:37 pm

#20 Pat . “RE market is on fire”

Your comments all true .

Lesson for all: , take all blogs and predictions with a grain of salt.

Advice for all: buy yourself a house somewhere in the GTA.. Also to be taken with a grain of salt.

#36 Italians love real eatate on 07.23.14 at 8:39 pm

#31 young MD

Corporations are not tax avoidance strategies. They are tax deferral strategies.

You simply hold on to your money longer . You will face the tax man once corporate funds are taken personally , either before death or right after

#37 Ray Skunk on 07.23.14 at 8:43 pm

#12 R – Wynne doesn’t care about impending retirement doom. She’s just latching on for political gain.

If she genuinely had concern about people’s ability to save, she’d set up a pension plan that gives the option to contribute to already set-up and successful programs like the Ontario Teacher’s Pension Plan. The plan could be registered in the contributor’s name, and transferable to spouse upon death. Everyone could be required to contribute unless they can prove on their T1 that they have made their own contributions or have a company pension.

Instead we have this ridiculous concept that will be (mis)managed by her cronies, pay out next to nothing compared to what goes in (which is not surprising considering the mandate is to invest in Ontario bonds which will be junk status soon), not pay out for decades and see contributions disappear into the Liberal waste black hole upon death. This is nanny-stateism at its finest; of course once again the private-sector have-nots are having to cough up while the public sector get a free ride.

Another nail in the coffin of the Ontario economy, but those who can’t think for themselves or lack the self-control to save are lapping it up.

#25 Catalyst – Genuine lol from me there. All they need is the DB pension and they’d be a slam-dunk for Allentuck.

#38 Randy on 07.23.14 at 8:50 pm

You forgot to mention that those of us who worked too hard and saved too much also have issues. I retired many years ago and it is very difficult to change from a lifestyle of saving and investing to one of spending and self-indulgence. Without kids, some charities will likely get a lot of money from our estates.

#39 T.O. Bubble Boy on 07.23.14 at 8:59 pm

@ #33 2or3orsometimes7 on 07.23.14 at 8:28 pm
Why is it so many of you don’t have kids? Not judging, just asking.
———————————
I have kids… it’s why I’m still working!

#40 takla on 07.23.14 at 9:07 pm

those who keep fit and posess the smarts , are fearless of hard work would do just fine living in most any rural Canadian community after retirement ,a certain level of self sufficientcy will be mandatory.
Altho an income of 40G would be nice ,a well planned retirement with a payed off rural home{low taxs ]25-35 G’s annually ,a garden,hunting,wood cutting,butchering tools and skills would be fine ,sound like my version of nirvana.
Youll live a healthier life compared to those city suckers and your wants will hardly fill a short list.
Hopefully your blessed with longevity,work ethic,good friends and a back yard still …..

#41 kILlaBoY50 on 07.23.14 at 9:11 pm

“Sell your house, invest and downsize at the most auspicious time. That could well be now. ”

If a financial genius like Garth doesn’t know if this is actually the most auspicious time (and if not now, then when?), then how am I supposed to follow that advice?

Because I don’t know where you live. Hopefully you do. — Garth

#42 @17 on 07.23.14 at 9:16 pm

rates will stay relatively low for years???

If this is the case, then houses will stay high for years.

Low rates=high demand for houses

Actually low rates bring higher prices, and ultimately waning demand. — Garth

There are 40,000 basement suites alone in a suburb of Vancouver called surrey.

No demand waning there.

That makes entirely mo sense. — Garth

#43 another young md on 07.23.14 at 9:16 pm

#36 Italians love real estate

If you have a stay at home spouse though, the tax bill is a lot less if you funnel funds to them instead of paying tax on 1 (highest) income.

And its a great wealth growing vehicle.

#44 HogtownIndebted on 07.23.14 at 9:18 pm

Great photo metaphor tonight, Garth.

I’ll have to disagree on some of your message though.

“Given the wealth disparity and current demographics, it’s pretty much assured personal tax rates will rise and benefits like CPP and OAS disappear for all but the needy.”

Actually, the likely outcome is almost the opposite of this.

You have fallen into a trap, common among western intellectuals in many fields, of presuming that trends, once started, are unstoppable.

The trend here, not so obviously acknowledged, is the continuing shifting of all assets into the hands of the few. CPP and OAS will not be curtailed for some, without profoundly challenging the cause of that overall imbalance.

Thankfully, we have some semblance of democracy for that. Consider the “Occupy” movement just an early tremor, a test pattern of what may lie ahead. It is merely taking a nap right now.

The race to the bottom we are currently seeing, when it comes to the middle class, is definitely stoppable. If there is political will. That will comes from necessity, something more and more people are now starting to confront in their personal economic realities.

This is why I felt, correctly as it turns out, that Kathleen Wynne had such a powerful inside track to election victory. Whatever her pension plan becomes (and I hope it just leads to a better CPP under, probably, Trudeau) the support for her platform can be viewed as a case of the aspiring middle class speaking for itself, not merely through the terribly skewed system of wealth we have allowed to develop since the Reagan era trickle down lies started this unfortunate phase.

TFSAs are nice, but even without housing debt, far too many Canadians have no hope of putting enough money aside there.

That message of self reliance etc…is a nice one for you to repeat. Piketty’s is much more compelling and clear, and just watch as it gains traction in the years ahead.

No, CPP and OAS will be much healthier for many more. We will have democratic insurgency to thank for that.

And if we don’t, I guarantee that no one will prefer to live in the society that we might end up creating.

#45 another young md on 07.23.14 at 9:19 pm

I’ll still have to pay tax, but prob will be able to retire 10 years earlier.

#46 @20 Pat on 07.23.14 at 9:21 pm

Foreign demand.

I know that it is a taboo to talk about it on this blog…

In Vancouver, we had over 210,000 tourists from China alone visit in 2013. That’s 3 jumbo jets per day.

Let me guess. They came for the humility. — Garth

#47 Observer on 07.23.14 at 9:23 pm

Mark Carney: rates must rise to avoid housing bubble

http://www.telegraph.co.uk/finance/economics/10985991/Mark-Carney-rates-must-rise-to-avoid-housing-bubble.html

#48 HogtownIndebted on 07.23.14 at 9:23 pm

Forgot to add it – I noticed this story today. How we feel about it may serve as a useful litmus test of whether we are developing much of a gag reflex when it comes to swallowing the neocon medicine of income/social disparity.

There’s more where this comes from, to be sure. But it is also not an unstoppable trend.

http://time.com/money/3018706/separate-entrances-affordable-housing-new-york-city/

#49 correction on 07.23.14 at 9:24 pm

garth original quote said top 20% have a median net worth of 1.4M, I think that means the top 10% have > 1.4M not as he misquotes in this article that the top 20% have greater than 1.4M, 2/10 canadians are not millionaires. Garth quotes things fast and loose most of the time but he’s generally on point, just doing get too caught up in his specifics

The median NW of the top 20% is $1.4 million. For the bottom 20% it us $1,100. As I stated earlier week, and referenced in this post. — Garth

#50 Millenial on 07.23.14 at 9:25 pm

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/06/worst%20GDP%20print%20in%20history_0.jpg

There will be no US recession. — Garth

#51 Basement dweller on 07.23.14 at 9:27 pm

Can someone explain how condo
Sales are up 94%?

Because they collapsed in 2013 and are now slightly below 2012 levels in the GTA — Garth

#52 Italians love real estate on 07.23.14 at 9:33 pm

#43 another young md

If you can justify or legitimize the payment to your spouse ie a worker in your corp then I suppose you are correct.

As for a great wealth growing tool , well, like all other well growing tools except TFSA’s the government always gets it’s portion.

I think people over rate the benefits of personal corporations or at the very least over estimate the benefits of them

#53 45north on 07.23.14 at 9:40 pm

Mark : A few of my 20s-ish friends are rather disgusted that their families haven’t given them a down-payment, while a new $150-$200k motorhome appears in the parents’ driveway.

the day I got lost in the Bronx, I was grateful that I didn’t have a motorhome. I was especially grateful that it wasn’t a 56 foot motorhome pulling a Jeep Cherokee like my brother-in-law has.

Are the boomers just a bunch of narcissists for hoarding all the wealth and consuming it on nonsense, while the young starve?

funny that you ask about the boomers when you know your parents. In your life they are relevant and meaningful whereas boomers are not.

#54 to_be_frank on 07.23.14 at 9:45 pm

I agree with your predictions in this post Garth, but what I fear even more than having to make up for others’ profligacy is the burgeoning debt of the federal and most provincial governments. When bond rates rise, deficits will rise with them, and there aren’t enough wealthy people in Canada to bail them out if the situation gets out of hand, which it may well do. My advice to others would be not only to save and practice tax efficiency in your investments, but learn how to be efficient in your spending as well. For many, that is the harder skill to master.

#55 joblo on 07.23.14 at 9:47 pm

So?
No choice but to expat.
Plenty of low cost of living alternatives
There’s a whole world out there Homer Canucks

#56 will on 07.23.14 at 9:47 pm

My kind of people. True conservatives. Saving (investing) for a rainy day, minimalist living. I’m sure harper and co. would consider them complete failures. But of course harper is not conservative. We all know that.

#57 Nemesis on 07.23.14 at 9:52 pm

#Bravo,HighPlainsDrifter&HogTownIndebted! #”It’sGoodToBeKing!*”. #*UntilItIsn’t.

http://youtu.be/Ds_3uhLRWhQ

#58 MJ on 07.23.14 at 9:52 pm

Thank you Garth, for the pointed advice towards the end of the post on what and how to invest.

Can you or someone point me to the post where you detailed the 60/40 investment portfolio? Please. Thank you!

#59 David W on 07.23.14 at 10:04 pm

What would be some good dividend paying investments?

#60 Arshes76 on 07.23.14 at 10:07 pm

FYI. Medicare for seniors isn’t free you have to pay premiums and I think thier deducted from your social security cheques. And you don’t deduct mortgage interest or property taxes unless you itemize on your taxes and it’s not worth unless it’s more than the basic amount that’s available to everyone.

#61 Financial Freedom at 40 on 07.23.14 at 10:12 pm

Re #30 Pat
I saw three lots in Lawrence Park sell recently, all within a week of listing. One sold for $150k over asking, the other at asking, and the third just under asking. These are tear downs selling for over $2 million and then new builds get priced between $4-4.5 million.
*******
I don’t think we’re worried about Lawrence Park… your Toronto French School buyer is not your cereal box in a mud field in Brampton buyer.

We’re worried about the moist virgins overextended in Milton, not the old money or big money families who’ve always been in pockets of Forest Hill, The Kingsway, Rosedale, Bridle Path or Lawrence Park.

If you have $2M to spend on a lot and $1M on a reno around Mildenhall & Blythwood, I’d say go for it. Quality (location, reputation, cachet – basically brand) retains its premium value among a segment that has been with us longer than, and will likely outlast, whatever the latest ‘hot money’ is that is hastily turning what is otherwise crap into a fleeting trend.

But build it tastefully, in proportion, fitting in with the neighbourhood design cues, so it can be resold if you can’t whether some storms… no panicked auctions on fake Versailles in Mississauga please.

#62 Basil Fawlty on 07.23.14 at 10:14 pm

“There will be no US recession. — Garth”

Ever?

The US is in a recession, if one adjusts for the real rate of inflation. Do you have any statistics to back your claim?

#63 zee on 07.23.14 at 10:20 pm

Hey Garth,
Had a question, on how much cash should one hold in a portfolio. You keep saying to buy stocks when they go on sale but you also say to stay invested and don’t time the market. You can buy stocks if you are fully invested.

#64 Musty Basement Dweller on 07.23.14 at 10:21 pm

Today’s globe and Mail feature story on real estate is from a bank economist. Usually their quoted experts are real estate agents. Geez no conflicts or vested interests there eh? What crap the mainstream media has become.

#65 Andrew Woburn on 07.23.14 at 10:23 pm

#33 2or3orsometimes7 on 07.23.14 at 8:28 pm
Why is it so many of you don’t have kids? Not judging, just asking.
===========================

I have kids, but if I were 30 today I wouldn’t. Being a parent has never been easy but today it seems like an insane rat race with no winners. My parents could at least send me outdoors to play. They never had to micromanage my life. Today I read about parents who are in trouble if they leave their 11-year-old in a car while they run into a milk store. It seems more and more that “your” kids belong to the state. Parenthood today also seems like a competitive sport to see whose kid can get the most ribbons. It is no wonder so many younger people are choosing pets over kids.

When I was marriage age, there was never any discussion about the possibility of being voluntarily childless. You would be marked out as weird and suspect. I went with the flow even though I knew I didn’t want to. Like many others of my generation I coped but it never felt like my choice.

Fortunately for all of us, there are many people who thrive on parenthood and are good at it, but now there are also many who feel free to take a pass. IMHO this is a good thing because we do not need as big a population and it is better that children be raised by those people who really want them.

The idea that was shoved down my throat was that I would be “selfish” not to produce more little me’s. I accept that parents carry a much bigger load on society’s behalf than the child-free, and I believe our social system should offer them much more support, but I can no longer buy the idea that people have a “duty” to procreate.

#66 Musty Basement Dweller on 07.23.14 at 10:23 pm

.. And Even the bank economist is getting nervous about the Toronto bubble. But no worries for Vancouver. Ha.

#67 bird on 07.23.14 at 10:24 pm

“But when I see what the typical pre-retiree has saved, I just don’t understand how they’re going to make it.”

If you had had children, you might have learnt to not take yourself too seriously. What happens to you is not really that important.

#68 As Is Old Man on 07.23.14 at 10:39 pm

Canada has vast resources – no one will freeze or starve in the dark. The “sad” poor will not have a lavish lifestyle – but they will just fine all the same. There will be no pricing power in this economy.

#69 Teacher's Ass-istant on 07.23.14 at 10:40 pm

#9 Millenial on 07.23.14 at 5:41 pm

I don’t know your situation and I’ve definetly never been a medical professional but most of the doctors I go to have done just that.
Interesting that your accountant is advising incorporating, my experience has always been that my lawyer said incorporate and accountant always had ten reasons not to.
After a couple of bad experiences while acting as a sole proprietor I now am incorporated for my paper route.
You should get all of the reasons your accountant is reccomending this and run your situation by a lawyer. My bet is it’s all about protecting yourself.

#70 Sheane Wallace on 07.23.14 at 10:47 pm

There will be no US recession. — Garth

It depends how you qualify it, ultimately if we use the old reliable metrics US has been in recession for the last 5 years.
If we change the definition of inflation and key vital statistical measures which we did it then becomes arguable.

Listening to mainstream media could be hazardous to your wealth.

#71 Freedom First on 07.23.14 at 10:51 pm

The figures for Canadians heading into retirement are really not that bad. So many Canadians heading into retirement are sedentary, obese, drink a lot, smoke, enjoy their casino and bingo nights regularly, carry credit card, payday loans, etc., and don’t have a clue what is going on in the world or even in their own lives. Any surveys I have seen over the years say that the lower a families income the higher the participation in all of these life destroying activities. This is the reason the prices and taxes on these activities are so high, makes sure the participants of an unhealthy lifestyle die younger and are obscenely financially bled every step of their way toward an early grave.

I see no “Fun” in living that lifestyle for myself, but no surprise to me, as I look after myself in every way, enjoy quality “Fun”, and #1 and most important, I always put “Freedom First”. If I don’t, who will?
Thanks for your help Garth, and I wish more people could see the wisdom of everything you teach. Millions of Canadians need all the help they can get. Most unfortunate.

#72 another young md on 07.23.14 at 10:51 pm

#52 Italians love real estate

You pay your spouse as a shareholder, not employee. They don’t have to do any work for your corporation. Same for any kids > 18 y.o.

#73 Dollar West on 07.23.14 at 10:54 pm

Garth,
With the strong Canadian dollar, is it the time now to buy US Assets in an unhedged ETF? I think a strong Canadian Dollar will bode well for Canadian Oil Companies and the XEG ETF.

#74 BG on 07.23.14 at 10:56 pm

Please tell me this picture is a fake.

#75 Teacher's Ass-istant on 07.23.14 at 10:56 pm

#23 HarperValleyPTA on 07.23.14 at 6:44 pm

I don’t know but I really think your dress is way to high and this blog is full of hypocrits.

He/she will get it even if you don’t Garth. Don’t know how I even know that when I listen to classic rock as someone else pointed out people of a certain age are prone to.

#76 Detalumis on 07.23.14 at 10:57 pm

Spousal RRSPs? how about finding a spouse that makes good money and doesn’t think they live in 1950-land. Having a grownup fully dependent on you is the worst financial mistake anyone can make.

OAS “clawed back for many”, if you say 6% get any clawback at all is “many”, okay it’s much like your readership all with millions in assets and incomes. Most seniors have way more disposal income than your average younger couple.

The U.S. gets it’s pound of flesh from seniors. Medically they treat them like cash cows, they don’t have cheap LTC like we do here, you have to sell all your assets to pay for it first, the same with the U.K. No dumping Ma and Pa in the home and leaving it all to the kids. They also do stuff like install feeding tubes on dementia patients or give them mammograms and colonoscopies to keep the money rolling in.

No, not everyone wants to live to 95 or is afraid of dying. This couple are basically living a life that’s a whole lot of nothing, just saving and saving and saving to plan for who knows what. I have watched 3 of my girlfriends die of cancer before 55, all missed out on any retirement whatsoever. I fear lying in a crib with my mind gone or taking 2 months to starve to death with cancer in so-called palliative care like my neighbour did, but dying, no.

#77 Stupesing in Cabbagetown on 07.23.14 at 10:58 pm

#5 Mark

“Anyone? Are the boomers just a bunch of narcissists for hoarding all the wealth and consuming it on nonsense, while the young starve? Or are they truly riding their own high speed train into a financial apocalypse of their own making?”
—————————
Huh? You equate not being handed a down payment for a condo with starvation?

#78 Shawn on 07.23.14 at 11:02 pm

Tax Deferred is Tax Reduced

Italians love real estate said:

Corporations are not tax avoidance strategies. They are tax deferral strategies.

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

Same can be said for RRSP

****************************************
Both are basically wrong because a tax deferred IS a tax reduced.

Do the math

1. 100K compounded for 20 years at 10% and then pay 20% tax (capital gains) = $673k pre-tax and $538 after tax.

Or $100k earning 10% every year and paying 20% tax so gaining 8% per year = $466k

Value of 20 years of “mere” tax deferral on $100k is this example is $72k

The value of tax deferral jumps dramatically with years and with the pre-tax return.

Never sneeze at a tax deferral.

The only thing worse than having to pay a lot of tax in retirement may be ending up in a situation where you don’t have to. Personally, I expect to pay big tax bills on big income.

#79 Playing4fun on 07.23.14 at 11:14 pm

All this talk about net worth deserves a medicinal link:

http://www.youtube.com/watch?v=sTJ7AzBIJoI

#80 Son of Ponzi on 07.23.14 at 11:20 pm

Vancouver has the most highrises per capita.
From the Vancouver Sun.

Top 10 cities by number of highrises

City Highrises Population

1. New York City 5,894 8.2 million

2. Toronto 2,005 2.6 million

3. Shanghai 1,202 13.5 million

4. Tokyo 1,185 8.6 million

5. Chicago 1,150 2.8 million

6. Kiev 1,092 2.7 million

7. Hong Kong 970 7 million

8. Mexico 762 8.7 million

9. Vancouver 663 0.6 million

10. Montreal 619 1.6 million

#81 Setting the Record Straight on 07.23.14 at 11:23 pm

“But as I mentioned, the wealth gap is growing, and the top 20% have net worth of $1.4 million or greater (like Louise, and a lot of people who come here), which suggests mucho middle-class people have far less liquidity and far more real estate equity than the median.

Louise is middle class. Lower Middle class probably starts around 1.4 million NW.

Peoples posts the other day showed really impressive financial achievements, illustrating what an accomplishment it is in Canada to be middle class or on the way to middle class status. You are fighting the looters and the central banks. The government will be coming for your property and income.

Middle income earners,a layoff away from disaster, are not middle class.

#82 Jon on 07.23.14 at 11:52 pm

Im not too surprised about their savings i have had a few employees some single and some married with millions in their eArly fifties with salaries under 80k, (not sure what the spouse made) but i can tell you these individuals lived very modestly and just saved, and didn’t get it from inheritance. Lop 15 to 25 percent off every paycheck for 30 years and invest it wisely and it adds up to a lot of savings. I know people in their forties that make 150k a year and have almost nothing to show for it. Change your lifestyle and it can change your life in the long run and you dont need to eat peanut butter sandwiches to do it…

#83 Victor V on 07.24.14 at 12:03 am

http://www.theglobeandmail.com/report-on-business/economy/housing/bmos-douglas-porter-frets-about-torontos-housing-market/article19723588/

Bank of Montreal chief economist Douglas Porter, who has generally defended the strength of the Canadian housing market, has become a little bit more cautious – especially about Toronto.

In a research note Wednesday titled “Sympathy for the Doomster,” a play on Sympathy for the Devil by the Rolling Stones, Mr. Porter outlines the top three factors that he believes have been propping up Canada’s housing market, in order of importance…

#84 kILlaBoY50 on 07.24.14 at 12:08 am

I live in Calgary. Probably not a good time to sell since the rental vacancy is less than 2%. Besides, I don’t want to move to an apartment.

#85 KommyKim on 07.24.14 at 12:21 am

RE: #33 2or3orsometimes7 on 07.23.14 at 8:28 pm
Why is it so many of you don’t have kids? Not judging, just asking.

Because the world is so screwed. It would be cruel to bring another sentient being into the world.
TGF blog has a high percentage of doomers, so therefore a lower kidlet rate.

#86 research on 07.24.14 at 12:23 am

Is this old news?

http://money.ca.msn.com/insurance/insight/cmhc-again-tightens-mortgage-insurance-rules

#87 Fatso Brown on 07.24.14 at 12:25 am

2.45 million for two DINKS in the boonies is acceptable math. It’s at least 350,000 per brat from infancy to university. Being decent savers in a small town with no drug habits ( rare for Guelph) or entertainment, except rabbits and squirrels, the numbers seem right. Good for them….having children is highly over-rated.

#88 Flawed on 07.24.14 at 12:36 am

#55 joblo on 07.23.14 at 9:47 pm
So?
No choice but to expat.
Plenty of low cost of living alternatives
There’s a whole world out there Homer Canucks

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

Agreed. Canukustan is soon to majority lived by Public Sector workers, old retired wrinklies and according to the Fraser Institute millions of immigrants that drive up the price of houses and cost the tax payer 23 billion a year.

http://news.nationalpost.com/2011/05/17/immigrants-cost-23b-a-year-fraser-institute-report/

And Garth NO ONE is being a racist here as you continually like to point out. When 60 year old mom and dad come to Canada and cost the taxpayer 5 million bucks in medical expenses, that is not a “benefit” to Canadians. And they are certainly not doing $5 million dollars worth of babysitting as these wack job immigration lawyers on the radio always try to point out.

BTW….our family has a fantastic South African doctor gp. His wife works and his kids go to school here. Perfect example of good immigration.

And we will enjoy our doctor and until we get our affairs settled and move to S.America where we can live for 1/3 the price and 1000% less the headaches of the loser govt of Canukustan.

#89 Bob Rice on 07.24.14 at 12:46 am

Not sure if anyone has already posted this, but Doug Porter from BMO lists three reasons why RE is hot in a few markets – http://www.theglobeandmail.com/report-on-business/economy/housing/bmos-douglas-porter-frets-about-torontos-housing-market/article19723588/

3rd reason? Foreign buyers.

He doesn’t seem convinced a correction is imminent.

#90 An old MD on 07.24.14 at 1:00 am

To Italians and the young MDs

Incorporation is a good idea.
You can leave money in the corporation in high-earning years and take it out when you need cash because you’ve gone on sabattical.

The tax-free portion of capital gains in the corporation can be taken personally tax-free after the corporation has paid the tax. The tax-deferred compounding helps increase the signs of these gains.

The OP should be trusting his accountant … if he doesn’t, he needs a new one …

#91 Flawed on 07.24.14 at 2:17 am

#50 Millenial on 07.23.14 at 9:25 pm
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/06/worst%20GDP%20print%20in%20history_0.jpg

There will be no US recession. — Garth

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

baahahahahahahahahahahahaha

http://armstrongeconomics.com/2014/07/06/the-future/

#92 bdy sktrn on 07.24.14 at 2:25 am

#26 Valyrian_Steel
“”spending less than 40k annually”
—————–
wow that;s low. good for you. you are masters of impulse control. read mmm by chance?

we are 50% higher with very minimal eating out/travel/clothes/entertainment +1kid though

add in gas (car/truck/bike/boat) smokes wine/weed an 40k is flat out impossible,

what about ski tickets, golf, hockey, even hiking gear costs a fortune. how do you manage to find 100% free activities? not eating too much fresh seafood i bet.

buy a boat or a plane or a porsche and start living it up while you still can – spend half now if you have forgone all your life , money is no fun if you are sick and dying.

#93 Teacher's Ass-istant on 07.24.14 at 3:59 am

#19 Entrepreneur on 07.23.14 at 6:23 pm

I got pretty much every dime of my gst every quater. In a lot of ways it’s a good idea. The biggest problem I’ve always seen with GST is that it is on things that those less fortunate need to buy. Many of these items should be exempt.

#94 Teacher's Ass-istant on 07.24.14 at 4:02 am

#46 @20 Pat on 07.23.14 at 9:21 pm

Tourists spend a bunch of money then go home. That’s a good thing.

#95 Londoner on 07.24.14 at 4:09 am

“We’ve always lived below our means and have no children,”

If they only spend $50k/yr then why bother working longer? Have plans to suddenly change their spending habits? Something tells me they won’t be able to bring themselves to do it. Having no kids means they missed out on one of life’s greatest experiences. Maybe that wasn’t a choice and maybe that’s not the only thing they missed out on. This sounds like a sincerely sad story to me. But hey, who am I to judge? Well done… I guess.

#96 World Traveller on 07.24.14 at 5:03 am

#8 johnny d on 07.23.14 at 5:39 pm

And that’s why escaping The Socialist Republic of Canada and taking your money and life elsewhere should be on everyone’s agenda.

****
Watch out doing that, many countries are starting to tax assets of expats, and in some cases the tax treaties don’t apply, see below.

http://www.eyeonspain.com/blogs/macpoll/11553/POLL-Have-you-decided-to-spend-less-time-in-Spain-because-of-the-new-tax-declaration-of-overseas-assets.aspx

Spain; foot meet bullet.

#97 World Traveller on 07.24.14 at 5:27 am

Here is another wake up call, if you are thinking of buying Spain, don’t! it doesn’t matter whether you are from the U.K. or South America, you will be screwed!!

https://www.youtube.com/watch?v=JrTy6Yx1_Xc

#98 saskatoon on 07.24.14 at 7:06 am

agg?

#99 Rapier Wit on 07.24.14 at 7:27 am

OK, now I’m confused. I still believe Garth… but, BMO doesn’t seem to be in line.

http://business.financialpost.com/2014/07/23/three-unusual-reasons-you-should-have-sympathy-for-canadas-housing-doomsters/

One of us sells mortgages. Guess. — Garth

#100 Ralph Cramdown on 07.24.14 at 7:50 am

The daily Corrections:

#50 Millenial
http://www.thereformedbroker.com/2014/06/29/behold-the-awesome-power-of-financial-twitter/

#62 Basil Fawlty — “The US is in a recession, if one adjusts for the real rate of inflation.”

At some point, you have to look at the data, admit that it doesn’t fit your model, and conclude that your sources of advice are idiots. The US economy is creating 200,000+ jobs per month. Ergo, not in a recession.

#46 @20 Pat — “In Vancouver, we had over 210,000 tourists from China alone visit in 2013. That’s 3 jumbo jets per day.”

If you’re an idiot, it’s easier to go undetected if you don’t use any numbers in your postings. Jumbo jets hold twice as many people as you think they do, and they’re full both ways.

#101 rosie "moving forward" in the knowledge that, "this won't end well" on 07.24.14 at 7:59 am

What do these guys know? At least it’s different here.

http://www.npr.org/2014/07/24/334097944/how-high-debt-from-the-housing-collapse-still-stifles-our-economy

#102 DKrud on 07.24.14 at 8:29 am

You know, as someone who is married and has never mustered a salary higher than $85k combined/year, these last few days on the blog have been pretty fracking depressing.

I can’t understand how someone can be making over $150k/a year and have trouble saving. We’ve been aggressively paying down debt to start building a modest protfolio for retirement, and honestly, to know that we’re on the outside looking in, even here… Ya… So people like me are prob totally royally pooched then.

Happy news.

#103 TurnerNation on 07.24.14 at 8:29 am

The avarice advisor.

(This guy wrote a top selling book, he was a top trader then lost everything due to drugs. Bounced back.)

http://www.cnbc.com/id/101860951

World on fire: Learning to think like Wall Street
Turney Duff | @turneyduff

When tragedy strikes — traders trade.

It was April 20, 1999, the second week of my hedge-fund career, when news broke about the Columbine High School massacre. While I tried to comprehend how two individuals were capable of a shooting spree of fellow students, others in the office were discussing if SWHC, CAB and ATK were longs or shorts. They wondered what effects this might have on gun control.

A few days after Sept. 11, 2001, I had lunch with a good friend. We shared our experiences of the fatal day; his being much scarier than mine. We weren’t sure what to make of it. A lot of the details were still unknown. But my friend told me he kept hearing two words ring in his ears. He’d been on the phone with one of his hedge-fund clients from Connecticut when the second plane hit. All he remembered as he got off the phone was a trader screaming, “BUY OIL!” at the exact moment he was instructed to evacuate Tower 7. Again, I was amazed and shocked. How could someone even think like that?

#104 Jimbo on 07.24.14 at 8:52 am

Money is a means to an end and not the end itself.

Sad story above in my opinion.

To each their own, I guess.

#105 Mandria on 07.24.14 at 8:53 am

I’m not sure why people are so shocked at individuals living comfortably on 40-50k a year. My husband and I live central in Toronto (rent 1200 sq/ft), have a new (sensible) car, all the bills covered, eat well (though mostly at home), travel a couple times a year, and have $500/mth in mad money each. We basically live like kings (in my perspective) for $4000/mth. Living on that amount with kids in the equation would be harder (we have one on the way) but we still think it will be doable. I think it all depends on what lifestyle you are used to, and how you want to live…I’m sure there are some people that would look at us and think we’re deprived since we choose to live on one salary, we don’t see it that way. We all have our expectations…I wouldn’t be willing to wash out sandwich bags, eat from the dollar store, live somewhere unsafe, and give up anything discretionary to live on $2000/mth even though we could…it’s all about personal comfort and choice.

#106 Respectfylly resubmitting a sincere question on 07.24.14 at 9:10 am

#40 Taber Nac on 07.22.14 at 8:05 pm
Alright Garth. What is your forecast for the Canadian dollar this year and over the coming years?

Choose a name that does not insult Québécois and I’ll tell you. — Garth

——-

Ok Garth. I am hereby respectfully resubmitting my question. Would appreciate your expert insight.

That’s better. I expect a declining currency against a strengthening US dollar, but this will be over the course of this year and into 2015, especially when the Fed starts raising its rate a year from now. Having said that, currency moves are notoriously volatile and, in the short term, fairly unpredictable. Why do you ask? — Garth

#107 Basil Fawlty on 07.24.14 at 9:22 am

#100 Ralph Cramdown

“#62 Basil Fawlty — “The US is in a recession, if one adjusts for the real rate of inflation.”

At some point, you have to look at the data, admit that it doesn’t fit your model, and conclude that your sources of advice are idiots. The US economy is creating 200,000+ jobs per month. Ergo, not in a recession.”

The job figures, inflation figures and hence real GDP are hookum. They are doctored to provide positive measures of an economy actually in decline. Just subtract real inflation from the government provided rate of GDP and voila the US is in recession.
To suggest that someone like John Williams of Shadow Goverment Statistics (Phd in Economics) is an “idiot” for calculating economic statistics, as they were calculated in 1980, is idiotic. It also implies that the high level subscribers to his service are also “idiots”, which again is idiotic.

#108 Dupcheck on 07.24.14 at 9:27 am

My neighbour 74 years old, just sold his motor home. They used it maybe 2 times a year. V10 engine that did 5 mil/gal. Yukkk… And they constantly complained how their gov pension was not enough.

#109 Respectfully resubmitting a sincere question on 07.24.14 at 9:42 am

That’s better. I expect a declining currency against a strengthening US dollar, but this will be over the course of this year and into 2015, especially when the Fed starts raising its rate a year from now. Having said that, currency moves are notoriously volatile and, in the short term, fairly unpredictable. Why do you ask? — Garth

Am holding lots of US dollars… On a related note, would a serious housing market correction in Canada on its own be sufficient grounds for the CAD to drop signifincantly, that is, a correction not caused by a US rate increase?

Unlikely, depending on the economic fallout. — Garth

#110 Ralph Cramdown on 07.24.14 at 9:46 am

#106 Basil Fawlty — “To suggest that someone like John Williams of Shadow Goverment Statistics (Phd in Economics) is an “idiot” for calculating economic statistics, as they were calculated in 1980, is idiotic.”

All John Williams does is take government CPI and add a magic number that he dreamed up. He does this every month, which is why his GDP chart is exactly the same shape as the government’s, just higher up. And he does this for the bargain subscription rate of $175 per year — a price which hasn’t gone up by a penny in eight years.

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/17/the-intellectual-cesspool-of-the-inflation-truthers/

You can believe people like him and stay poor, or you can trade on the basis that the government numbers are more or less correct, and get richer (in worthless fiat dollars of course, which continue to fund my real world existence).

If you’re constantly worried about inflation, you’re doing something wrong. Heating and cooling too much house, living too far from work, or not shopping intelligently for food and other staples. If you’re retired, it may be too late to do much about it, but if you’re younger, make changes.

#111 Ducky on 07.24.14 at 9:51 am

#26 Valyrian_Steel on 07.23.14 at 7:06 pm
I am actually thinking about retiring soon and becoming a “kept man”. Though since I am largely in charge our our investments, I will consider the 5k we get in monthly dividends as my salary. Wife is on board. Life is good.

You Da Man. Go for it. No regrets.

#112 Carly in Cabbagetown on 07.24.14 at 10:00 am

#107 Basil Fawlty

I think your assessment is correct. I am not a conspiracy doomer, but there are many learned and reasonable people who have assessed as you have.

The US economy numbers, combined with the ongoing debt burden (#101 rosie – thanks for that useful link) and demographic shifts, plus rise of part time and lower paid work all give reasons to think the US ‘recovery’ is less than it appears.

It sure isn’t 2005 anymore.

Ralph Cramdown’s supercilious, inaccurate and unself-reflective putdowns, calling others ‘idiots’ are as offensive and lame as his defences of bigotry against Asians and women. Ralph – you called it your “corrections” – who appointed you to that position?

Oh, I forgot, you’ve quadrupled your posting here the last year and appointed yourself the smartest on the board, the “eminence grise” here.

Effluence greasy – that’s more like it

#113 Pupil on 07.24.14 at 10:21 am

Hello Garth, do you have any book recommendations for beginners like me who want to learn about how different economic variables macro-economically to another, at least historically? Variables such as interest rates, employment rates, currency levels, monetary policy actions, etc. Or does such a book not exist?

#114 Pupil on 07.24.14 at 10:22 am

“macro-economically to” –> insert “relate”

#115 Rainclouds on 07.24.14 at 10:59 am

#74 BG “Please tell me this picture is fake”

Nope, BC interior. RCMP showed up gave him a lecture. He told them to “mind their own business, this is private property”.

It really is different here…………

#116 FormerSaskie on 07.24.14 at 11:00 am

Question Garth

At what income level do you think CPP and OAS would be cut off in the future?

Impossible to answer. I believe the qualifying age will be stretched first (as is happening now with OAS), and then an increase in general personal tax rates will decrease the net benefit. — Garth

#117 DM in C on 07.24.14 at 11:12 am

#103: BUY OIL. Again, I was amazed and shocked. How could someone even think like that?

I can go one better: My first week on the job six years ago, I met one of the sales guys. I don’t recall how 9/11 came up, but he talked about how it was great he got the day off and went golfing. Sincerely. Even remembered his score. Drove a red hummer — total douche.

#118 Cha Ching on 07.24.14 at 11:21 am

The 2012 StatsCan Survey of Financial Security doesn’t have the median household relying too much on their primary residence for their net worth.

This will probably change (i.e. increase) as real estate prices continue to rise across the country.

#119 Cha Ching on 07.24.14 at 11:22 am

Also the child-less couple who started the topic of this blog doesn’t have a financial problem. They have a psychological one. I’m serious.

#120 Derek R on 07.24.14 at 11:37 am

#112 Pupil on 07.24.14 at 10:21 am asked:
Hello Garth, do you have any book recommendations for beginners like me who want to learn about how different economic variables macro-economically to another, at least historically?

There’s a ton of books on the topic. The problem is that there’s also a ton of different opinions on what is important and on how it all relates. So you have the Classical view, the Marxian view, the Austrian view, the Neoclassical view, the Keynesian view, the Post Keynesian view, etc, etc, etc. At the moment the Neoclassical view is the mainstream view but more for reasons to do with academic promotion and politics than because it is absolutely “right”.

Since even the experts have different views and there’s no general agreement about who’s right, the only thing a beginner can really do is to read what each has got to say. There’s truth and error in each of them so you have to decide for yourself what you believe and try to put it all together. Not ideal for a beginner, I know, but sadly that’s how it is at the moment.

#121 another young md on 07.24.14 at 11:40 am

#90 old MD

Thanks!

#122 Bottoms_Up on 07.24.14 at 11:48 am

#115 FormerSaskie on 07.24.14 at 11:00 am
————————————————
Wouldn’t it seem reasonable that people that don’t need CPP won’t get it? Such as “the 20%” that filled up all the posts on Garth’s Net worth blog?

Have no doubt. That’s what is eventually coming. — Garth

#123 chapter 9 on 07.24.14 at 11:54 am

$2.45 mil net worth! So when are you going to start enjoying it? Plan on living forever? Lost two friends recently to cancer both were dead two months from the day of diagnosis. All they did was work work work and had tons of cash in the bank cause their rational was “Gotta get ahead”.
Last week a buddy of mine got the results back from his cardiologist only 47 (heart attack) he is ok but the doc chewed him out but good “Stop this insanity of working two jobs seven days a week and the only reason you are still here you just happened to be a block away from a hospital. Does he ever look at life different now. Life is balance with $2.45 net tip the scale the other way remember you are getting to the point where “You have more history the future”

#124 Ronaldo on 07.24.14 at 11:59 am

#5 Mark –

”Anyone? Are the boomers just a bunch of narcissists for hoarding all the wealth and consuming it on nonsense, while the young starve? Or are they truly riding their own high speed train into a financial apocalypse of their own making?”

There is a vast difference between the leading edge boomer and the trailing edge boomer. After all, that’s a 20 year gap. Not every boomer is created equal. I would bet that the percentage of rich boomers is quite low overall. Many never went to university and many do not have pensions either. To paint every boomer with the same brush is a bunch of b.s.

#125 Bottoms_Up on 07.24.14 at 12:07 pm

#105 Mandria on 07.24.14 at 8:53 am
—————————————–
“….$4000/mth. Living on that amount with kids in the equation would be harder (we have one on the way) but we still think it will be doable.”

Congrats on the ‘kid on the way’! But, do you really know what’s coming your way?

First, the finances.

You’ll receive $100/mo (taxable), so let’s really call that $70/mo, or $840 a year. A nice bonus, but it goes nowhere near the actual costs…

Diapers, wipes and cream will run you $840 a year.

If you’re one of the unfortunate ones and have to work and have no free childcare, count on spending $12,000 (low end) to $18,000 (high end) in childcare the 1st year.

From the province you’re allowed to claim $7,000, or in other words, get back roughly 30% (marginal tax rate) of $7,000, therefore you get $2100 back.

So your net childcare expenses will be $10,000 to 16,000 in the first year.

Multiply that roughly by 3 years of care, and you’ll spend in childcare alone (for one child), $30,000 to $45,000. Once they’re in school, you’ll spend $400/month for before/after school care (net yearly cost of approximately $3500).

Tack on clothes, shoes, boots, coats, toys, crib, mattress, sheets, mobile, monitor, swings, bouncers, change table, car seat, stroller, high chair, food, pump and bottles, teethers and soothers, bumbo, bath tub and bath stuff, play/activity mat, safety proof items and baby gates……… and it’s easy to see why parents are broke.

Think long and hard about your future finances.

#126 Mid30sbanker on 07.24.14 at 12:11 pm

are there any other sensible blogs like garth’s. Reading this and the comments below makes my workday! Thanks in advance.

You need more? I’m crushed. — Garth

#127 Pre-Retiree on 07.24.14 at 12:11 pm

RE:
#36 Italians love real estate
#31 young MD

Corporations are not tax avoidance strategies. They are tax deferral strategies.

You simply hold on to your money longer . You will face the tax man once corporate funds are taken personally , either before death or right after
____________________________

True enough but children can be non-voting shareholders, and once they reach 18, they can receive dividends that can fund their studies, at very low tax rate when they earn no or very little income.

#128 Effluence greasy on 07.24.14 at 12:22 pm

#111 Carly in Cabbagetown

Note date of comment:
http://www.hoocoodanode.org/node/3713#comment-243375

Note month of peak:
http://research.stlouisfed.org/fred2/graph/?g=Ghx

It might seem odd to you, but a person can make a lot more money anticipating the official rate of inflation than chronicling one’s own.

Now, for your personalized Corrections:
– An ’eminence grise’ is a shadowy background figure, not someone whose (apparently) very visible opinions have increased fourfold from an already high level.
– one cannot be ‘bigoted’ against women. I realize that modern (mis)usage stretches any term, but there are already several perfect words to describe your impression of my attitude to women, so there’s no need to misuse another word.
– as to my being bigoted generally: What, you missed the great KosherⓊ foodfight of February 2013?

P.S. Do you know ‘Stupesing’?

#129 HD on 07.24.14 at 12:49 pm

@ 65 Andrew

Great post. My thoughts exactly.

Best,

HD

#130 TorontoBull on 07.24.14 at 12:56 pm

Garth, your fearmongering is taking away from the valuable points that you are making. CPP is one (if not the only one) of the best funded plans in the developed world. Further more, according to Mercer, the “average plan in Canada was 99.9 per cent funded at the end of 2013”
http://www.theglobeandmail.com/report-on-business/pension-plans-to-see-strong-year-after-dream-turnaround-forecast/article16253199/#dashboard/follows/

Next, your views on foreign ownbership are baffling considering that for example Vancouver residents seems to be convinced that it is a major determinant of current price levels. You dismiss these people as being racist. Then a respectable bank economist states that foreign ownership is one of the top 3 reasons for rising prices – you dismiss this as conflict of interest…
Yet you quote Madani from Capital Economics who predicts a 20-30% house price collapse over the next 2 years, COMBINED with a decline in interest rates (which you failed to mention) – highly improbable !
Political correctness is great until it starts to dim you view of reality…

(a) The CPP Investment Board has done a fine job, but it would be foolhardy to believe the benefits will remain universal. Why should people who do not need the money receive it? (b) As for foreign buyers, I have always said they have an impact on various price segments and neighbourhoods. They are not, however, responsible for the average house price in Vancouver. The locals did that, and continue. (c) Interest rates are not going down. This is the bottom. — Garth

#131 CalgaryRocks on 07.24.14 at 1:04 pm

Hello from Silicon Valley, California where we now settled for a bit after having sold our house in Calgary and having traveled around last year.

Rents are out of control here and it’s actually cheaper to buy. But we need to be flexible so we’re not buying. Even though we have all that cash sitting on the sidelines.

The whole state is a financial basket case anyways. We’ll pay the rent premium knowing that we can UHaul it out of here to the next opportunity within 30 day notice.

Besides the gorgeous weather, pay rates for geeks like me are also out of control and in bubble territory but I am not complaining about that. 90$/hour just because I know front end development? Sign me up for that.

#120 Bottoms_Up on 07.24.14 at 11:48 am
#115 FormerSaskie on 07.24.14 at 11:00 am
————————————————
Wouldn’t it seem reasonable that people that don’t need CPP won’t get it? Such as “the 20%” that filled up all the posts on Garth’s Net worth blog?

Have no doubt. That’s what is eventually coming. — Garth

One more reason to leave Canada. A lawless banana republic that changes it’s laws as it sees fit. Always the people that work and save that get the short end of the stick.

It’s just like California without the beautiful weather, high paying jobs and hot chicks with breast implants.

#132 Josh in Calgary on 07.24.14 at 1:23 pm

Garth,
You’re saying that despite paying into CPP all my life I may not get to collect it? How is that fair? Life’s not fair is probably the answer. But would there not be a general uproar and extreme political consequences for the PM behind that move? OAS is a different story and that one wouldn’t entirely shock me.

Incidently I was told from a very early age not to count on CPP … so I’m not saying you’re wrong, it just seems like a pretty extreme move. One that politicians will likely avoid like the plague if at all possible.

There is no move afoot to end universality of the CPP, but why should it even be paid to people from whom it is all largely taxed back? You’re right. Don’t count on it, unless you fail financially. — Garth

#133 EB on 07.24.14 at 1:37 pm

#102 DKrud on 07.24.14 at 8:29 am

Self selected responses. Naturally the people in good situations will want to talk about it – it’s a highly biased sample though.

Personally for me this blog is still an excellent resource for organizing my affairs and planning for the future while I shake my tiny fist helplessly at the world.

#134 Retired Boomer - WI on 07.24.14 at 1:39 pm

#65 Andrew

Perfect comment. Now if somebody might just convince a large religious organization of that “Freedom” we might all breathe a bit easier.

Thanks for that succinct comment.

Retired Boomer

#135 Nuke on 07.24.14 at 1:58 pm

As someone closing in on retirement; the defined benefit plans I hold and the income splitting allowed ensures after tax retirement income higher than my working take home. The return on investment for DB plan for anyone close to 60 is significant due to the guaranteed payout and the short time to generate the capital needed to fund it.

Companies key responsibility is to supply a solid secure lifestyle for employees and a sustainable retirement. Next is a product or service the consuming public wants or needs. Shareholder returns is far down the list and if there are crumbs for them then so be it. That is what trickle down economics is all about.

#136 UVZ on 07.24.14 at 2:00 pm

#83 Victor V on 07.24.14 at 12:03 am

How about this?

1. Government insurance of private mortgage credit
2. Government reinsurance of private insurance of private mortgage credit
3. Easy monetary policy

#137 Nattie on 07.24.14 at 2:22 pm

I’m 26 with no dependents, gross $62k, and spend $18k/year. In Calgary. This isn’t that hard at all – it even includes quarterly travel to BC to visit family, gym membership, trips to spas and hair salons, and charitable giving. When I was in university just a few years ago, my living expenses were $800 a month (excluding a bus pass that was included in my tuition, but no I was not living with family.) Compared to the average person I suppose I spend much less on food (very petite female with a small appetite who can cook anything from scratch) and have a higher tolerance for living with roommates/living in the ghetto, but 40k gross should be easy for anyone without kids, even in a major city.

Oh and millenials who complain that mum and dad aren’t helping them with a downpayment are disgusting.

#138 happity on 07.24.14 at 2:42 pm

Alberta, those lucky folks having the best provincial economy for a while have $ billion in unfunded liabilities.

Calgary spends 53% of tax revenue on gov people.

Mark carney is calling for global bail ins again, of course for the reason that would never be required.

The only assets for retirement will be what you have in hand, not a digital entry in someone else’s computer.
Th

#139 r1200c on 07.24.14 at 2:49 pm

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#140 Reasonfirst on 07.24.14 at 2:54 pm

RE: Garth CPP comment: “Why should people who do not need the money receive it?”

Because we paid into it and were resposible with our money. Should we reward the irresponsible?

People without kids pay school taxes. It helps society. Same theory. — Garth

#141 Die broke on 07.24.14 at 3:11 pm

Kanada is a fail financially, productivity sucks, bloated gubment, don’t make anything, just pull it out of the ground, citizens broke (cept for GF posters), gubments broke, FIRE economy, make you dough and move out.
Die broke & leave it to the socialists.

#142 Renter's Revenge! on 07.24.14 at 3:12 pm

@137 Nattie (very petite female with a small appetite who can cook anything from scratch):

Are you single?

I’m a 34 y.o., fit male with no dependents, gross $81k, who can change his own oil.

#143 Shawn on 07.24.14 at 3:17 pm

CPP universality

(a) The CPP Investment Board has done a fine job, but it would be foolhardy to believe the benefits will remain universal. Why should people who do not need the money receive it? (Garth)

There is no move afoot to end universality of the CPP, but why should it even be paid to people from whom it is all largely taxed back? You’re right. Don’t count on it, unless you fail financially. — Garth

People without kids pay school taxes. It helps society. Same theory. — Garth

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

right there is no movement to end CPP universality. It is not largely taxed away for anyone. It is subject to the marginal tax rate like other regulatrr income.

Unlike Old Age pension it was explicitly funded and for that reason will not be taken away.

Many pension plans are integrated with CPP and that is another reason it will not be taken away.

I find talk of CPP being taken away to be scare mongering.

On the other hand if people save sufficiently (especially after the marginal tax rate) should be diddly to their income and it won’t matter a lot anyhow.

But no it is not going away for a anyone.

To borrow a phrase from Garth, worry about asteroids.

Actually young people should worry about it, not geezers like you. Universality will doubtlessly be debated in the decades ahead, and a decision not to grant it to those of higher income will be supported by voters. After all, 99% beats 1%. — Garth

#144 I'm stupid on 07.24.14 at 3:18 pm

#140 Reasonfirst

While I agree with you completely, Garth does make a good point. It would be like senior citizen welfare. We can have a long debate regarding welfare but if it didn’t exist, as much as I hate the fact that it does, crime would increase astronomically. I know if I didn’t have money for food I’d lie, cheat, steal, kill to get it. That’s how I interpreted welfare as a giant payment for my own security and everyone else’s too.

#145 Tony from Calgary on 07.24.14 at 3:22 pm

I wish I had Nattie’s discipline!

Rental living in the Big Smoke (psst… I’m not actually from Calgary) is expensive for people without willpower (making my own food? Such a chore!). Add in all the emergency supplies, guns, ammo, and a lifetime supply of tinfoil and one’s bank account dwindles pretty quickly.

But between Canadian Bail-ins and Deflation II: The GFC Strikes Back, I don’t really trust the banks with my money anyway. Better to keep it stashed away under your mattress with all your REAL wealth (gold, silver, platinum, palladium, diamonds, physical bitcoins, magic stones, kryptonite, werewolf teeth, etc.) in a secure fire-proof box with fingerprint & rental scanner, as well as 15-digit password you update on a biweekly basis, while simultaneously assuming all of your neighbors are immoral thieves and/or villains.

Nattie – wait till you hit your early 30’s and keep trying to live in the ghetto with roommates (typically who are not in their 30’s, as they’ve all given up and taken on huge debts to buy concrete boxes in the sky, geniuses that they are). It just… kinda gets weird :|

Now being well into your 40’s and living with your folks in their basement to cut your cost of living down to less than $4.32 per day? There’s the real road to financial freedom… none of this “diversified portfolio” or “TFSA” mumbo-jumbo I read about here all the time.

Cheers,
Tony from Calgary

#146 Freedom First on 07.24.14 at 3:49 pm

#137 Nattie

You are the female me when I was your age. Somehow the majority of people have lost your ability to think creatively today to become healthy, happy, content, while also maintaining financial stability from the very beginning.

Nattie, you have been able to shut out the insane thinking of the people around you and do things your way, which is, in my opinion, very very commendable. I know when I was your age many people laughed at me, but today, I have to maintain my autonomy, as many people hate you when you achieve financial freedom. I hit it at 49. And I never did without, including travel, ski trips, golfing, and living comfortably. I always knew, that in Canada, even living well within your means, we live like millionaires in many Countries in the world where people struggle for the basics of life. Nattie, stay on course, keep going, and thank you for sharing as your post was a breath of fresh air, like Garth’s Blog always is.

#147 FormetSaskie on 07.24.14 at 3:55 pm

#122 Bottom up

There are many high income people who shouldn’t need CPP/OAS but are relying on it to be available to them to fund their golden years b/c they didn’t bother with financial assets. Bricks and granite were their plan.

#148 gladiator on 07.24.14 at 3:55 pm

@142 Renter’s Revenge!

If there’s a wedding (ya never know, right?) – is Garth invited?

#149 Sheane wallace on 07.24.14 at 4:01 pm

if there is a legal way to support a notion to reject CMHC insurance for the banks I am all in.

If not I will simply move out. There is no way I am going to pay a single penny for the future CMHC losses.

And they are making fun out of us the taxpayers backing their subprime loans!

#150 JimH on 07.24.14 at 4:02 pm

#107 Basil Fawlty
#110 Ralph Cramdown

Basil, you say: “The job figures, inflation figures and hence real GDP are hookum. They are doctored to provide positive measures of an economy actually in decline. Just subtract real inflation from the government provided rate of GDP and voila the US is in recession.
To suggest that someone like John Williams of Shadow Goverment Statistics (Phd in Economics) is an “idiot” for calculating economic statistics, as they were calculated in 1980, is idiotic…”
……………………………………………………
A healthy skepticism of (almost) all things in life is a good thing.

To latch on to any authority figure of your choosing to bolster your own position is simply another example of blind credulity, and makes a mockery of your own skepticism regarding those pesky statistics that you so easily dismiss as “hookum”.

You… a skeptic… go on to present us with an argument from authority and nothing more???

As Ralph Cramdown correctly observes, John Williams does NOT utilize the methodologies of the 1980’s to calculate economic statistics! He simply takes the announced numbers and modifies them by a rather arbitrary constant.

The whole problem with Shadowstats is that, like the emperor who has no clothes, they have no real testable and verifiable methodology at all!

http://azizonomics.com/2013/06/01/the-trouble-with-shadowstats/

You continue to go on advising us to “subtract real inflation from the government provided rate of GDP” to calculate “real” GDP. I am sure you know very well that all announced GDP rates from around the world already have inflation factored in.

Economists in general have a hard time trying to agree on anything, perhaps even the time of day. Certainly precious few (virtually none) of them predicted the greatest financial crisis since the Great Depression; they disagree as to its root causes; there is no general agreement amongst them on where we should go from here.

Therefore, I submit that it might be questionable to hold any one of them up as “The Authority” on any matter!

Perhaps, Basil, you should consider that true skepticism, like all virtues, should begin at home?

#151 Setting the Record Straight on 07.24.14 at 4:04 pm

“(a) The CPP Investment Board has done a fine job, but it would be foolhardy to believe the benefits will remain universal. Why should people who do not need the money receive it? (b) As for foreign buyers, I have always said they have an impact on various price segments and neighbourhoods. They are not, however, responsible for the average house price in Vancouver. The locals did that, and continue. (c) Interest rates are not going down. This is the bottom. — Garth”

Why should people who sell their house be allowed to keep the gains if they don’t need it? Why should people be allowed to receive dividends? People who receive dividends do not need them. If they needed dividends, they wouldn’t have the funds to invest to produce them.

And you think the tfsa will survive?

You are pointing out why thegovernment should be kept from providing pensions. There is no contract– only taxes tat cannot be avoided and on the other side gifts that can be recinded. You become a supplicant of the state.

Ugly!

#152 Mandria on 07.24.14 at 4:10 pm

#125 Bottoms_Up

We thankfully won’t need outside childcare (or very little of it) since hubby and I are able to arrange our work schedules to take care of the little one. We are very fortunate in that regard.

We do realize that the child will add to our costs and our current “fun money” spending will probably largely go towards the baby essentials…items that are not safety related I’m happy to take/buy used…the baby won’t know that some other kid wore their coat for a few months.

We don’t think it will be a cakewalk keeping our expenses down and if we need to dip into our second salary a bit to make life comfortable we absolutely will, but I don’t think having a kid has to be as expensive as many think.

There are many families making-do with a lot less than $4000/mth and I have the utmost respect for the ingenuity it must take for them to get by.

#153 JimH on 07.24.14 at 4:11 pm

#112 Carly in Cabbagetown

An ad hominem attack???? Really????

Would you instead please advise on how your refusal to accept the obvious slow, unsteady, perhaps glacial but also indisputable US recovery has brought you wealth?

It’s not that your opinion isn’t valuable; just give us something… anything that we can take to the bank.

#154 Pupil on 07.24.14 at 4:25 pm

#122 Hi Derek R., thanks for your response. I have already started reading Keynes, Hayek, Friedman, etc. However, they do not directly go into historical correlations on macro-economic variables, I suspect simply because back then it was hard to gather statistical data like govts and financial organizations to these days. Are you aware of any praftical books that show lots of hard historical data on correlations? I am aware that past facts are no foolproof indication for the future, especially in light of our ever-increasing global interconnectedness and interdependence, but surely that must be texts that have some solid data on correlations among multiple macroeconomic variables?!

#155 Spiltbongwater on 07.24.14 at 4:35 pm

I think politicians who have too much money should not receive their pension as well. Mike Duffy can keep his as he doesn’t even have $90K kicking around, but the rich ones like Ignatiaff and some of the ultra rich ones should forfeit it for the needy people in our country.

CPP should not be means tested. If it is, then a 65 year old with no money should be audited and asked to show what happened to his or her money. If they spent it all shopping, on new cars or vacations, then we as a society can set up a FEMA type camp for them to work at until they die.

If Joe Blow made 1 million over his working lifetime and lived a frugal life, then Jane Blow made 1 million and spent it all, why should Joe lose his pension that he paid same money into as Jane did?

#156 maxx on 07.24.14 at 6:34 pm

#4 Calgary Owner (2nd. Round) on 07.23.14 at 5:30 pm

“Who wants to live into the middle of the first decade of their second century anyways?”

Listen to Garth- this time of life is second to none. With all of the wisdom, smarts and experience accumulated, it is almost like going from life in black and white to vivid colour. The cash you save allows you to travel the world or do pretty well whatever you please with a much better palette.

Prepare for it. Otherwise, the cat food can label will seem like a work of art.

#157 Cici on 07.24.14 at 11:04 pm

#155 Spiltbongwater

I’m on-board with you on all of those points. Go into politics and make it happen!

#158 NotAGreaterFool on 07.24.14 at 11:32 pm

Supreme Court won’t hear TREB appeal

The Toronto Real Estate Board blocks its 35,000 members from publishing sale prices on their internal websites.

http://www.thestar.com/business/2014/07/24/supreme_court_wont_hear_treb_case_appeal.html

#159 Nattie on 07.25.14 at 12:29 am

@Renter’s Revenge – Not single… you sound awesome though, make sure that when you find yourself a gal she doesn’t make you waste all your money!

@Tony in Calgary – I love trading in werewolf teeth. Point taken about getting sick of roommates and ghetto – I figure I’m earning minimum wage for as long as I don’t mind to. The parents live in a small town with no jobs so their basement isn’t an option, but my hippy mother has been known to bury money in the yard (for the fairies) so investing in a metal detector may be an option.

@Gladiator – weddings are too expensive, though Garth would be the best person to crash a wedding. (Can you picture him photobombing a wedding portrait?)…or perhaps when I get sick of roommates, I’ll become a trophy wife (the gym and spa are investments too.) Think I can find someone to buy me DeBeers stock instead of a diamond ring?
(Kidding! Kind of…baby sis got engaged yesterday so I have weddings on the brain.)

Freedom First – thanks for the support! I’d like to be semi-retired (ie making a survival wage from dividends) by 40 or 50. My mum was a crazy spender when I was growing up, I think that’s why I’m so averse to overspending now…and I actually get an endorphin rush from transferring cash from chequing to my brokerage, the same way my girlfriends feel when they buy the latest Mark Jacob purse.