Wrinklenomics

RETIRED modified

In case you didn’t notice it, this is Misery Week here on GreaterFool.

On Monday we quickly reviewed how screwed most aging hipsters are (between the ages of 35 and 44), compared with the hippie generation that went before. Cheapo mortgage rates have been no match for house lust, bad choices, stagnant incomes and insatiable children. Debt levels are off the chart, most net worth is in one asset, and if houses go into reverse, it’ll be ugly.

On Tuesday we reviewed net worth in general, in light of recent claims that Canadians are raking it in, families average $422,000 in assets, and we’re all cool. But, it ain’t the case. Half the wealth is in fragile house equity, eighty grand is in brain-dead GICs and bank accounts, and just $145,000 is invested, most of it in taxable RRSPs. Worse, ‘average’ numbers mean nothing when just 1% of our citizens control $979 billion, averaging over $3 million a piece. Yes, and most of them read this pathetic blog.

Today, let’s dive into an issue even more miserable: the abyss of retirement. So how much money do you actually need?

That’s easy. More than you think.

And to find out how much (if you are a working couple) do this:

  • Multiply your current income by .8
  • Deduct $27,400 from that number, then
  • Multiply the remainder by 27.

So if you have a family income of $100,000, you probably should have $1.42 million in order to ensure you can hit Margaritaville in your early 60s.

Of course, one size doesn’t fit all. But here’s a rough yardstick for you. It assumes you’ll need 80% of your working income in retirement (it might be more), that you have no corporate or government defined-benefit pension (over 70% don’t), that you both collect the average CPP ($611) at age 60, and OAS ($540) at 67, and you earn at least 4% (after inflation) on your investments, with the bulk of them being non-registered (not in RRSPs). Thus, you should have saved/invested between 25 and 30 times the annual shortfall between your required income and government pogey.

Your nestegg will include any roll-over of a defined contribution pension plan (like a matched RRSP program at work), plus your tax-free accounts, RRSPs and non-registered money. House equity doesn’t count, of course. And no moochy adult kids in the basement.

So, how are we doing? Like I said, this is Misery Week. Suck it up and keep reading.

The average amount people believe they’ll need to amass as a retirement nestegg ranges from $447,000 in Quebec (folks there plan to live on maple syrup and beaver entrails) to $1.13 million in BC (you know why). In Ontario it’s $876,000, and Alberta $970,000. Those numbers are from a survey just completed for the wealth management arm of BeeMo.

The interesting bit is that most Canadians also think they’re not going to make it. The average amount saved by the people Nesbitt Burns polled (between the ages of 45 and 64) is $258,000, and most of that would be in fully-taxable retirement savings accounts. This means there is an average gap of more than a half million dollars.

It also begs the question of how a guy who’s 55 years old can save another $500,000 or so by the time retirement rolls around a decade later. Without selling meth, I mean. And the answer is, he can’t. For most people it’s just not gonna happen. And that’s one good reason why real estate has a troubled future.

With Canadians continuing to squirrel away the bulk of their net worth in a house, millions of soon-to-be-wrinklies will discover they have little alternative but to sell the real estate to liberate the cash needed to stay nicely in Depends and Cialis. With 9,000,000 Boomers, it won’t take a big fraction of them dumping houses to have a significant market impact. Others will toy with reverse mortgages, which are very effective if you hate your children.

Speaking of which, the bankers also learned a majority of people in this age group are sandwiched between caring for their basement-dwelling kids and ageing parents. And this: “The study found that 76% of this cohort feel that the stress of everyday living — such as working, taking care of family, paying household bills, helping older relatives, etc. — is impacting their ability to meet long-term financial goals.”

The hipster children figure you should buy them condos. Mom expects you to be her nurse and housekeep. Meanwhile the clock’s ticking, and you wonder if you’ll have enough for your own retirement.

Well, now you know. Do the math.

193 comments ↓

#1 Yogi Bear on 08.12.14 at 7:29 pm

I can’t imagine working until my 60s. I’m done no later than 40.

#2 Fred on 08.12.14 at 7:37 pm

Aaaaah man, I give up! How best to market method Garth?

#3 totalinvestor.com on 08.12.14 at 7:38 pm

Freedom 55 died a long time ago, it’s now Freedom 95.
Why bother saving at all if you have to work until you’re dead? Just live life while you can.

http://postimg.org/image/li23j5vg1/

#4 Happy Renting on 08.12.14 at 7:38 pm

Garth, I am loving Misery Week.

We are lucky, 3/4 of our parents have juicy government DB pensions (no divorce in the family.) Far from needing us to prop them up, they’ll probably look at us in a few decades and ask why OUR retirements suck so bad. I can live with that!

#5 Role on 08.12.14 at 7:40 pm

Waelth management surveys, and other many thinking’s haven’t not found a better time for hipstering! Backwards morgages, under watering morgages, everythings more, less, or even as it can happen to be?! Retire for when you can, not for when you cant. Put many or much monies into a house…and than see what happen!! Lost all or find more monies for retire!! I wish!!!

That was frightening. — Garth

#6 Liquid on 08.12.14 at 7:43 pm

I think many of those “aging hipsters” may be pleasantly surprised when their parents leave them with a generous inheritance package. Seniors in Canada have never been more wealthy, at least on paper. If housing prices remain stable, those properties could be liquidated to top up someone’s retirement fund. Although if everyone starts selling homes at the same time prices probably won’t be all that stable heh.

#7 distressed? on 08.12.14 at 7:52 pm

What about people who have the good fortune if healthy raises? In other words, I don’t know that I’ll save the multiple you refer to because my salary was $40k when i started work 10 years ago and gradually got raises to over $250k. So

#8 Landlord on 08.12.14 at 7:52 pm

I guess being a landlord in next few decades will pay well considering all those big hats with no cattle boomers will have to rent!

#9 Realties.ca » Wrinklenomics on 08.12.14 at 7:53 pm

[…] Source: http://www.greaterfool.ca/2014/08/12/wrinklenomics-2/ […]

#10 mel in victoria on 08.12.14 at 7:53 pm

Garth, last line, you meant ‘Do the meth’ rather than ‘Do the math’ didn’t you?

#11 Ketch on 08.12.14 at 7:55 pm

Thanks Garth an old couple who have it covered.

#12 LS in Arbutus on 08.12.14 at 7:57 pm

Converstaion on Hornby Beach between me and a grandma. Her approx 65 and lives in West Vancouver.

Discussing how hard it is for her kid in his 30s to buy RE in Vancouver and that her kids in their 40s have already bought.

I told her to just tell her 30 year old to wait, the market will correct.

She looked at me and said in a worried voice, “I certainly hope not, that’s my retirement nest egg.”

When you read all of these bank studies, etc. you know there has to be truth behind them.

#13 lawboy on 08.12.14 at 8:01 pm

when all is said and done, we’ll be right back to where we started from at the beginning of the 20th century. we’ll own a crappy house outright, that we have to renovate ourselves and a low stipend from government or our own savings. #winning.

#14 Smoking Man on 08.12.14 at 8:03 pm

You make the assumption that everyone punches a clock.
Tic tock… Then no pension, doom…

Once someone figures out how to buy and sell shit.. Can do it for from wheel chair…. Don’t need to worry about it..

Just start early, and if you get too busy, to lazy to hit a computer key… zombie programmed students will intern for free….

It really is a wonderful life… If you know what your doing..

#15 Kilby on 08.12.14 at 8:05 pm

Freedom 60 for me, wife has to work for 5 more years, bit tighter than when working but nice…..

#16 stop lying on 08.12.14 at 8:11 pm

“So if you have a family income of $100,000, you probably should have $1.42 million in order to ensure you can hit Margaritaville in your early 60s.”

say what? that is way too much if you’re used to living on 100k family income, and unless you’re living in a paper bag and eating bugs for dinner, unattainable. 1.42 mil at 5% is giving you 71,000 plus 27,400 from the government and you’re back to 100k again without even touching your capital. half that amount should do it…

#17 David McKenna on 08.12.14 at 8:16 pm

I’d challenge your assumption of needingn 80% of your current income in retirement. Why are your felt rennet expenses directly proportional to current income? If you get a $10k raise, and you make $100k does that really mean you’re going to spend another $8k per year for all of your retirement? It doesn’t have to be this way. Lifestyle inflation is avoidable.

#18 BG on 08.12.14 at 8:17 pm

“In case you didn’t notice it, this is Misery Week here on GreaterFool.”

We might get a climax on Friday when the revised numbers for employment will be released by Statistics Canada.

#19 FormerSaskie on 08.12.14 at 8:20 pm

Like Garth advised “clean it, paint it and list it. Do it now, right now and invest the money. You can rent for a while until prices drop, then get back into owning if you choose to. Renting doesn’t mean you are homeless, it means you have freedom to move where ever you want to go without the headache of a house that needs to be house sat or sold in a down market and always needs maintainance of some sort.

Watching investments grow and knowing that you won’t be destitute when you are old and frail is better than any house/condo you could own. Go visit a nursing home to understand how vulnerable people can become. Money protects you. Houses are boxes we live in for shelter.

Doomer week has been stressful and three days to go!

#20 Robert Agnew on 08.12.14 at 8:20 pm

My retirement plan is the same as El Magnifico Oil Crony Stevie Harper – sell out my country for a public service pension and million dollar corporate oil company gigs in Calgary.

#21 Smoking Man on 08.12.14 at 8:20 pm

#18 BG on 08.12.14 at 8:17 pmWe might get a climax on Friday when the revised numbers for employment will be released by Statistics Canada.
….

Most certainly revised Up….. I thought the 200 was ridiculous with such a huge trade surplus….

#22 Gord In Vancouver on 08.12.14 at 8:22 pm

Translation – Baby boomers who are unprepared for retirement, not labor shortages, probably encouraged the federal government to abolish mandatory retirement a decade ago.

#23 Detalumis on 08.12.14 at 8:23 pm

Why would you need 80% of your working income. Follow Malcolm Hamilton’s numbers, seniors have the most disposable income of any demographic. If I have no mortgage and no need to save for retirement or kid’s educations, it makes no sense to say you need 80%. In Ontario you don’t even need to pay much for old-people’s medications and nursing homes are cheap as dirt here, they use individual income not even family, and they don’t make you pay down assets either.

At 60% of my working income, income split between two people I would have more net income than I did working. I will spread the myth that I will be a poor senior so I can keep those tax breaks and entitlements coming but I sure as heck won’t be.

#24 Renter's Revenge! on 08.12.14 at 8:24 pm

Maybe Role is the ghost of James Joyce!

(riverrun, past Eve and Adam’s, from swerve of shore to bend of bay, brings us by a commodius vicus of recirculation back to Howth Castle and Environs… A way a lone a last a loved a long the)

Angered by the foolishness of his ascendant Irishmen, he’s come back to warn us of our impending doom.

#25 Dazed on 08.12.14 at 8:26 pm

Are you trying to gaslight us Garth? Today is Tuesday!

Not for long. — Garth

#26 crowdedelevatorfartz on 08.12.14 at 8:27 pm

some of my best links……deleted.

Its all ok.
I’m well on my way to retirement-ville….. :)

#27 PR on 08.12.14 at 8:31 pm

#5 – WTF was that…. not one word understood lol

#28 Smartalox on 08.12.14 at 8:34 pm

Phew! I ran Garth’s equations, and compared them to my projections, and it looks like we’re on track toward our goal. Even with a real estate purchase (provided the correction occurs). If not, and we keep renting, we’ll be well past our goals.

#29 Linda Mulligan on 08.12.14 at 8:36 pm

I find the numbers rather high – for myself & my husband to have 80% if I’ve done the math correctly means we’d have to have over three million saved by retirement. Not going to happen unless we win a major lottery prize. My thought is that if we have no outstanding debt – no mortgage, line of credit, loan shark et al then we should be good to go at age 60 for me & age 65 for hubby (I have a pension – for now – he doesn’t except for CPP). Of course, we don’t feel the need for Beemers, fur coats, trips in first class only etc. Maybe if we wanted all that the 3 million plus would be required but seriously – if we have all the stuff we want already what are we going to spend all that money on? Hopefully not long term care because we are so incapacitated we have no alternative but to drool while they change our Depends.

#30 Shortymac on 08.12.14 at 8:36 pm

Wanna know what is crazy this run down farm in innisfil is worth close to 3 mil!

http://www.sutton.com/listing/2825-4th-li-innisfil-ontario-l0l1k0-1405857/

Hubby and I make close to 100k, and want kids but it’s looking like with day care kids would kill our retirement plans and financing. Forget buying a house at this stage. It’s goddamn depressing.

#31 JimH on 08.12.14 at 8:37 pm

#6 Liquid
“I think many of those “aging hipsters” may be pleasantly surprised when their parents leave them with a generous inheritance package. Seniors in Canada have never been more wealthy, at least on paper. If housing prices remain stable, those properties could be liquidated to top up someone’s retirement fund. Although if everyone starts selling homes at the same time prices probably won’t be all that stable heh. (sic)
===================================
Say again… What planet are you from?

#32 Linda Mulligan on 08.12.14 at 8:43 pm

#31 Jim H. – don’t count on that inheritance. IF the parents live long enough to need long term care the money can disappear like snow in summer – the kids w/b lucky if they don’t have to start forking out for parental care if they live long enough to use up all that loot. Plus, who knows if the parentals don’t decide to whoop it up before they go, or leave it to their favorite charity/pet/friend? To me an inheritance is like winning the lottery – nice if it happens, but don’t depend on it for your financial security.

#33 Retired Boomer - WI on 08.12.14 at 8:44 pm

We are in year 2 of retirement. Today I spoke with a financial planner from Vanguard. Taking my defined pension $1,000 a month, my wires social security $919 and my social security at age 66…. I asked him how are we fixed to be living on $45,000 per anum plus 3% COLA based on our current nest egg?

He ran the Montecarlo modeling to age 100 (both 63) and it is 100% using the $45,000 as the base rate.
He further informed me I could increase the number to $59,000 per anum before the projections to age 100 drops to 99%. Anything over 85% they say is manageable so looks like we are in fair shape going forward.

Today 42K is my comfortable spending for the past 2 years, so that allows the upgrade in cars etc. when needed, healthcare expenses, taxes, insurances, and all of lives unnecessary bullshit.

No not the “greatest” retirement numbers on earth, but for our needs very comfortable, and might leave the kid something.

That slow and steady plan does work!! Yeah tortoise!!

#34 MinInMission on 08.12.14 at 8:46 pm

The equation/numbers seem a bit high, but, do-able and cover the possibility of unseen increases somewhere.

Looks like I should manage OK. Quite a change for me.

However, there are many of my co-workers that will be “troubled”

#35 dosouth on 08.12.14 at 8:51 pm

Not to worry says an “expert” paid sales person from the Victoria Residential Builders Association. The millennials are now taking up the slack and things will be alright….

Home building rises …well maybe one or two more this year but the Millennials have it covered….

#36 Smoking Man on 08.12.14 at 9:05 pm

If you’re underpaid. Or not working.. Stop sending out your slavery manifest (Resume)

Drive to an industrial area, with a business card that reads entrepreneur, your name and cell. Wear an expensive suit to get you past reception..

Demand to speak the president, you want to business..

Once you get into his/her office…

Tell them your starting up a supply company, but you haven’t figured out what you are going to supply.

Ask, what vendors or suppliers are you not happy with and would switch if the right company came along…

99% of CEO’S will see a young version of them in you..

Most importantly, as for help I can terns of a chance..

Once you know what they need….. Google…

It’s so easy, yet your teachers never told you this lesson,
How could they, they are a stone stuck in the tread of a tire with no idea the tire is attached to a truck..

Your welcome…

Now back to being a Lonnie fiction writer….

#37 Cow Man on 08.12.14 at 9:06 pm

Check out Brad Lamb on Lang O’Leary tonight on CBC. His take on Toronto Condos. 50% sold to off shore owners. Some just leave them empty for a place to hide in the future. At least that was one interpretation of his opinion.

#38 dosouth on 08.12.14 at 9:11 pm

#32 Linda Mulligan on 08.12.14 at 8:43 pm says…”who knows if the parentals don’t decide to whoop it up before they go, or leave it to their favorite charity/pet/friend?…”

—————–

Yes the daughter already knows there isn’t going to be anything left. Good values taught her to build a career and make sure she is established before taking the step of marriage. (we discussed all this over the years)

Wouldn’t you know it, now at 30 she waited until she has a good career and then married this summer. No plans for kids in this girls future.

Her husband makes as much as she does so they are equal and now……. whoop-whoop!!

#39 Cow Man on 08.12.14 at 9:12 pm

Wonder why Robin Williams chose to check out? The reports say financial pressures. If Mr. Williams, bless his soul, had financial worries what about the rest of us mortals? Will this be the ultimate solution for the boom bust generation? Rest in peace Mr. Williams.

#40 Realehorny on 08.12.14 at 9:18 pm

‘If’ housing goes in reverse? I notice
Garth’s been mentioning ‘if’ for housing quite often these days. I wonder if the confidence is waning?

You wish. — Garth

#41 The Mad Scientist on 08.12.14 at 9:28 pm

I can certainly do it… if I don’t buy any real estate. That’s assuming that my DB pension plan will still exist in 22 years, which may be a poor assumption. Projecting that far is almost impossible.

#42 k on 08.12.14 at 9:35 pm

Hey Garth
Good job as usual.Just a sweeping generality….most people seem to want to get rich quick. They want to take the elevator not the stairs.They now believe that real estate will make them wealthy quickly. I’m with you….I believe demographics will show the easy money is over in residential RE…Work Hard and Diversify ! God Bless Robin Williams ! Keep the faith Garth. You have been patient. The Canadian RE Bubble will burst. I’m not thinking this is good…..just inevitable.

#43 };-) aka Devil on 08.12.14 at 9:37 pm

Said it before and I’ll say it again; I have no plan or intention on retiring. I make my work play and I work hard at my play… it’s all life. I’ve been self-employed for most all my life and been able to fend for myself through thick and thin. My needs are simple and I have more than I need. When my health finally does impede the lifestyle I have grown accustom to I will adapt or die. The later of the two might just be of my own initiative at that point. When do I die my wife will be left with more than enough to tide her over and leave little bit of something for the kids.

In the meantime what a friggin’ awesome life! Carpe diem baby, carpe diem.

If you worry about money you will never have enough.

SHIFT happens. Learn to enjoy the ride.

};-)

#44 SHELTER THE MONEY NOT THE PEOPLE on 08.12.14 at 9:38 pm

#6 Liquid on 08.12.14 at 7:43 pm Although if everyone starts selling homes at the same time prices probably won’t be all that stable
__________________________________________
Dont worry… Our good government will simply flood the country with real estate voracious HAM.
And “order” banks to lend freely. Of course backstop the risk with taxduper dollars. (just like the “elfin diety” ordered the banks to up interest rates)
Anytime they need a vote here or there, there is always a way to get it.

#45 Temporary Foreign Prime Minister on 08.12.14 at 9:38 pm

Luckily (for the time being) I still belong to a minority of privately-employed blue collar Canadians who still see the faint glimmer of a DB pension at the end of the tunnel.

My CEO, who earned a ‘retention’ bonus of 5 million last year by squashing passengers into 28-inch seat pitches, truly despises my ‘legacy cost’ existence, and tries annually to steal my DB pension from me and feed it to the shareholders, on the grounds that “every other Canadian’s existence is going to suck in the future, so should yours.”

Not to mention the fact that, by legislation, belonging to a DB pension has severely limited my ability to contribute to retirement on my own.

So either way, I expect to be basically hooped.

Then again, there’s always hope for a windowless condo in a Harper super prison.

#46 Chickenlittle on 08.12.14 at 9:44 pm

Garth is right. Gas just went up in April by 40%. In the 25 years after you retire and are collecting dust, do you think the cost of living will remain flat? My crystal ball says otherwise.
Everyone will need as much money as they can get!
……….

It’s Doomer Week? I had no clue. Garth is his usual bubbly, exuberant, effervescent self, the topics are apocalyptic as is normal.
The comments are the same…

#47 JimH on 08.12.14 at 9:45 pm

#42 };-) aka Devil
“Said it before and I’ll say it again; I have no plan or intention on retiring. I make my work play and I work hard at my play……. & etc. &etc……”
===================================
Fascinating narcissistic drivel!

Now, how about those Kansas City Royals?

#48 Topsy-Turvy on 08.12.14 at 9:52 pm

$1.42 million accounting for 3% inflation compounded for 27 years will be 3.15 million, this is how much you have to have in 27 years for the same buying power as today.

#49 };-) aka Devil's Advocate on 08.12.14 at 10:01 pm

The thing I like about robust markets like this is; I can work less and still meet my personal business targets. I’ve learned to ride the SHIFTS. I’m not out to break any records (except maybe a couple of my own).

What will I do when the market “corrects” as we all know it will… eventually, after it has busted through to irrational exuberance which it is not yet near the level it’s going to go? That’s the beauty of it; yes I will have to work harder then but I’m good at what I do and am confident I will still be able to meet my personal business targets while still enjoying my job and setting ample time aside for play.

How many have a job like that? Not many I suspect. Ain’t the market grand and I’m not talkin’ just real estate.

};-)

#50 mark on 08.12.14 at 10:04 pm

no problem, I can live off the grid on 1000 month easy.

I will never have 500k period in any investing accounts.
Divorce, one income, support a kid, yep screwed.

Hey no problem I love nature, in my shack in the woods.
Got to do what u got to do.

cheers

#51 };-) aka Devil's Advocate on 08.12.14 at 10:12 pm

#46 JimH on 08.12.14 at 9:45 pm
#42 };-) aka Devil
“Said it before and I’ll say it again; I have no plan or intention on retiring. I make my work play and I work hard at my play……. & etc. &etc……”
===================================
Fascinating narcissistic drivel!

Either you don’t get it or you are jealous.

What I’ve been trying to say to everyone, except Smoking Man who clearly gets it, is life is awesome but you gotta go out and get it.

Year after year many of the same posters on this blog have been holding themselves back waiting for the market to tank before stepping in. Like it’s going to happen any minute now…. for six years now. I truly hope they value life more than to waste it hoping and waiting for something so unpredictable. Speculating.

That’s why I hang in there. Hey I’m havin fun or I wouldn’t be doing this. But if, while having fun, I can help someone see that “Ours is not to see what lies dimly at a distance but to deal with what lies clearly at hand” T. Carlyle well then why wouldn’t I try?

Life is awesome but you gotta go out and get it.

#52 suede on 08.12.14 at 10:14 pm

DA #42

Your catchphrase “Shift Happens” needs a bit of work. Youre smart, I know you can do better.

#53 Shawn on 08.12.14 at 10:37 pm

Those who were behind on their bills all their life will continue to be in retirement.

Most who were good with money will likely be okay, one way or the other.

#54 Shawn on 08.12.14 at 10:38 pm

In retirement, as in your working life, your income determines your spending.

Financial planners try to make it work the other way. Set a spending goal and then make the income to match. Neither life no retirement work that way for most people.

Most people are financial failures. You explained it well. — Garth

#55 };-) aka Devil's Advocate on 08.12.14 at 10:41 pm

#51 suede on 08.12.14 at 10:14 pm

Read the book…

Shift: How Top Real Estate Agents Tackle Tough Times by Gary Keller, Dave Jenks & Jay Papasan

#56 Toronto_CA on 08.12.14 at 10:45 pm

Retirement planning should be based on your anticipated expenses, not a flat 80% of your gross income. If I am saving 50% of my income now, why would I spend 80% in retirement? Obviously some expenses would increase (Rx drugs and medical expenses in general) but many would go down to offset that.

A common myth is that retirement means indolence. Many people, with 70% more time on their hands, spend considerably more. — Garth

#57 Entrepreneur on 08.12.14 at 10:51 pm

We are retired but live on just paying our bills. We fish, hunt, grow a garden, make our own and do our own work. What we want, we think how to produce it. And we say “thank-you for the food we eat” everyday.

We never thought of retirement too much; we only thought of surviving the day/month. Then we got old but we still think of surviving the old method.

I guess what I am trying to say is have people forgot what the “mean” means. Money is good for so much then it means nothing.

#58 coastal on 08.12.14 at 10:53 pm

#35 dosouth

“Not to worry says an “expert” paid sales person from the Victoria Residential Builders Association. The millennials are now taking up the slack and things will be alright….

Home building rises …well maybe one or two more this year but the Millennials have it covered….”

Total drivel, they don’t acknowledge BC debt levels through the roof, nor that 2/3 of the new homes built are in Langford, the butthole of Victoria. Which is where prices are tanking the worst and Bear Mountain is still licking it’s wounds without hardly a sale over a million this year. As Garth said, if they were financial advisors they would be in jail.

#59 NotAGreaterFool on 08.12.14 at 10:54 pm

Condo King says everyone will be living in condos Toronto except for the very wealthy.

http://www.cbc.ca/player/News/Business/ID/2487496443/

#60 Is the grass greener in the U.S.? on 08.12.14 at 11:04 pm

For those who think life is so much better in the U.S., read on …

The Fed’s ‘Report on the Economic Well-Being of U.S. Households’ provides a sobering look into income distribution and excess savings. Here are a few highlights:

Among Americans aged 18-59, only a third had sufficient emergency savings to cover three months of expenses.
Only 48% of Americans could come up with $400 on short notice without borrowing money or selling something.
45% of Americans save none of their income.
About half of American renters aged 18-59 would rather be homeowners but cannot afford the down payment required to get a mortgage.

Alwyn

#61 Keith on 08.12.14 at 11:04 pm

Everyone’s situation is different, but needing 80% of your working income seems wrong. You need enough to live on, and if you live to a ripe old age, your travel and entertainment costs will plummet.

When you retire, you should be mortgage free and the budget for retirement savings should be reduced to saving for excess longevity, a much cheaper expense. Expenses related to raising children will hopefully be history.

A family income of 100k, in retirement in the above scenario could easily be replaced by a lightly taxed split income of 60 – 70k in most parts of Canada.

#62 Bobby on 08.12.14 at 11:06 pm

For Devil’s Advocate,

You’re right, shift is happening in Kelowna. A number of condos that I’m looking at are languishing on the market after a couple of price drops. If they do sell, my timely stats say they are about 5-8% less than asking.
Certainly no way near the price that was paid in
2006-2009.
Perhaps you advised some of these clients that these were good buys at that time. Was the market shifting then?
You need to get out more!

#63 JamesKitchener on 08.12.14 at 11:08 pm

CPP at 60 versus 65
Garth you have written a number of times that most people should take the CPP early. I am doing the numbers as I retire next year, and my CPP would be $371 a month less at age 60 versus 65.

If I saved the 5 years of reduced pension and invested at 5%, versus waiting 5 years and taking the higher pension the two lines cross in 20 years, at that point I wish I waited.
Now there is the OAS and the clawback.
So I thought hey maybe the reduced CPP prevents the OAS from clawback. Again I ran the numbers and even waiting till 65 with the higher CPP I still avoid the clawback.
So why do you advise people to take CPP early, is it because the boomers will not live past 75.

Everyone should take it early, and I have already explained why. — Garth

#64 Jethro on 08.12.14 at 11:09 pm

Garth …why aren’t you pushing low cost foreign retirement destinations like Ecuador….you could put together a real Canadian retiree ghetto in the jungle down there, and you could then join them as a Che Guevara/Saul Goodman/Jim Jones type renegade contrarian investment guru leader….the downside is breakfast might be Eye of Newt porridge everyday, washed down my Margaritas for lunch…

#65 Bobby on 08.12.14 at 11:12 pm

For #56 Coastal,

You are indeed correct my friend. Most of the houses I’m watching in this part of Victoria are falling in price. Eventually many are just taken off the market. Even many of the lesser priced homes have New Price stickers on the signs.
Went to an open house a few weeks ago here in North Saanich. A 30 year home with nary an update. Significant price drop but still sits for sale.
Realtor seemed somewhat desperate.

#66 };-) aka Devil's Advocate on 08.12.14 at 11:23 pm

#61 Bobby on 08.12.14 at 11:06 pm

I am sure there is a condo or two in Kelowna which matches the description you are giving. Remember; location, location, location. But you are wrong on your assumption of the market overall. I have nothing to gain by telling you a lie about what the market is doing. Seriously. The market is what it is. I can’t change it and to lie about it… well if I did everybody could see. But this blog and you are not nearly everybody. The market is cooking. When it’s not I will tell you it’s not.

And to lie to a client? Are you kidding me? Clients are gold. If you keep them happy they will keep you happy.

I think it is you who needs to get out more and understand the way the world works. There is no room for bullshit for if you do it will sooner or later bite you hard in the ass.

#67 };-) aka Devil's Advocate on 08.12.14 at 11:26 pm

#58 NotAGreaterFool on 08.12.14 at 10:54 pm
Condo King says everyone will be living in condos Toronto except for the very wealthy.
http://www.cbc.ca/player/News/Business/ID/2487496443/

AWESOME interview! Thank you for posting it. But I am sure some here will find exception to it.

#68 Cici on 08.12.14 at 11:30 pm

#16 stop lying

Actually, Garth is right. Markets go up and down (you won’t be getting 5% every single year; some years you’ll be up over that, other times in the red), and taxes only go up.

You’ll probably be fine with half of that, but you and your nest egg will be more at risk in the event of a downturn. If living in a paper bag and eating bugs isn’t in your plans, you might want to retire a fews later, or consider semi-retirement at the outset.

Remember, markets have been good to as as late, but do go down and could stay down for years at a time, and you don’t want that time to be during your retirement.

#69 NotAGreaterFool on 08.12.14 at 11:32 pm

Garth – You stated earlier this week Toronto home prices (SFH) dropped 9% from May to July. Maybe this explains it?

http://www.movesmartly.com/2014/08/how-shadow-demand-impacts-torontos-real-estate-market.html#more

#70 Quebec is Great on 08.12.14 at 11:38 pm

Went for a drive today and noticed half the town of Wasaga Beach is for sale. Cold summer for sure, but there is a faint whiff of something colder, maybe even fear. I’m seeing a lot more “reduced” signs than “sold” signs. Four houses in a row at one spot, all for sale, all unsold.

Homeowners are starting to figure out the party is probably over. Quite a few commercial properties are going on the block as well. Smart money in Georgian Triangle is already out or reducing price to sell off by Fall. Quite obvious if one looks deep enough.

#71 Cici on 08.12.14 at 11:58 pm

#49 Mark

Personally, I think that sounds like an awesome plan…off the grid is where it’s at!

#72 William Bell on 08.13.14 at 12:04 am

Hand touching mouth about once every minute during the interview …. I’m not sure if he is even telling the truth?

http://goo.gl/MkpXpG

#73 Bobby on 08.13.14 at 12:06 am

For #65 DA,

I know exactly how the world works. That’s why I’m looking to buy a condo that has depreciated significantly over the last few years, rather than trying to sell one that I had overpaid for, probably on the advice of some inept realtor. And yes, location matters.

No, you should get out more. Like many of the realtors at the open houses I have attended, you are indeed trying too hard.

#74 Cici on 08.13.14 at 12:07 am

#50 };-) aka Devil’s Advocate

I could have stepped into the market six years ago, but I would only have had a house and loads of debt.

Since reading this blog, I’ve really changed my priorities. I’ve paid off all of my debts and almost tripled my net worth.

I’m loving the subsidy from renting, and I’ve decided that I’d rather retire early, travel and sail than workmmy butt off to fund a bungalow and raise children.

To each their own, but I prefer sandy beaches.

#75 wiggling willie on 08.13.14 at 12:17 am

I will never understand Canadians drive to ‘save more than the next guy’. In six weeks I’ll leave for a six month winter in the tropics. My condo with full service and a huge Olympic sized pool is surrounded by great hospitals, malls, fantastic fun things to do, super cheap food….and the fantastic weather one would expect from a winter in the tropics. The rent is $533 per month. Internet , cable, electricity etc ( top flight technology) is about $60 a month more. A nice meal will cost $1.50…we won’t shop or cook for the next six months…..just be swimming laps and laughing at the “I need a 100 grand a year savers”……cause that is total BS. Don’t ask….I don’t want to see you.

#76 LH on 08.13.14 at 12:22 am

This formula is misguided for many blog dogs.
I can survive off 8% of my net income, not 80%

LH

#77 Tony on 08.13.14 at 1:09 am

All this is assuming perfect health until you die. The health care system is not sustainable in its current form. Premiums will soar in the near future and 2 dollar dispensing fees for prescription drugs will be a thing of the past for seniors.

#78 Don Sanderson on 08.13.14 at 1:54 am

Brad Lamb will be known as the sheep herder once Toronto Condos see a 35% to 40% cut in prices.

It will make 1989 to 1990’s condo downturn look like a crash from the past.

Toronto Condo fees will cost at least $250,000 in 25 years so pick your poison.

#79 Larry1 on 08.13.14 at 2:33 am

I finally did the excel math on maxing out RRSP vs. no RRSP (un-leveraged) and as long as one invests the tax reduction from the RRSP contribution it seems to make sense to go the RRSP route. This assumes a 40% average tax rate. It results in an difference of about +$300K after tax by going all in on RRSP for 17yrs and investing the tax reduction in taxable investments. Of course TFSA comes first…

The next step is to check out the leveraged, deduct the interest alternative…

#80 NEVER GIVE UP on 08.13.14 at 2:51 am

https://www.youtube.com/watch?v=tTDn604ipYY

#81 Spaccone on 08.13.14 at 3:10 am

My parents with grade-school education living in a paid $~1mm house won’t consider selling or a reverse mortgage even though OTOMH property taxes alone maybe chew up 2/3 of my father’s CPP or 50% of CPP+OAS (luckily he has a small union pension as well). Moving from a cramped house & driveway way back when we were all spellbound by the increase in space and multiple garages decades ago, but I’ve come to see the undesirable side in all the extra landscaping, extra space/”dead” rooms, and lifeless (though tranquil/safe), socially isolating community.

I’m not worried, I have dual CanEuro citizenship and the types of places I’d be comfortable in people generally make 40-50% of what the average Canadian makes without having to live in a remote backwater.

#82 Londoner on 08.13.14 at 6:11 am

UK inflation report out today. Carney says that the productivity gap is greater then initially thought and that wage inflation is not yet at a point where a rise in interest rates is warranted. As before, the BoE will continue to monitor the labour market and productivity but sees no sharp rise in interest rates in the forecast period. This comes at a time when the UK has had record employment growth (in recent history) and higher economic growth then it’s peers in the G7. I know this blog follows the US Fed when looking at the timing for potential interest rate hikes by the BoC but I think that the UK is setting the trend here for the rest of the central banks (US Fed, ECB, BoJ). Given the lack of employment growth, I think Canada is a fair way away from where the UK currently is. No doubt the recent jump in the trade surplus is going to be positive for the GDP and hence may keep the BoC from cutting rates this quarter. However I believe that possibility does exist in the near future, even if just for a short time, and that any rise in the overnight rate is not imminent.

#83 jameskitchenr on 08.13.14 at 6:20 am

Google is your friend
April 25 2014
CPP
Governments can pass laws at any time and if you wait until age 65 (instead of 60) to collect, you could be in for disappointment. Besides, if you collect early and invest the money (best in your TFSA) you’ll end up in better shape. For example, if you get the average $633 a month at 60 and invest to earn 7%, you’ll have $46,215 by 65. If you wait until 65 to collect the extra (a total of $835 a month), you’ll have zero. You’d have to live 20 more years just to equal the investment, and by that time the early-collector would have amassed $185,000 in TFSAs to leave to her desperate hipster grandchildren. Moral: if the government offers you money, take it.

#84 jameskitchenr on 08.13.14 at 6:25 am

Yikes
and October 3 2013
CPP
(By the way, CPP is available at age 60, but you can wait until 65 to get a bit more. Don’t. Every single person hitting sixty should get the app in, and start cashing the cheque. There’s a good chance the qualifying age will be raised in future years. Besides, if you collect for five years and invest the money – and not in GICs – you’ll be ahead.)

So bottom line is you have to Invest; and given all you said about people saving for retirement everyone will spend it. sigh

#85 jameskitchenr on 08.13.14 at 6:29 am

And Novemeber 4 2012
CPP
I apologise for asking,

Garth, as I approach that age (60) I am certainly considering taking CPP early while it is still “intact”. My family health history is good and most of my mom’s side is well into their nineties. On my dad’s side not quite as good but certainly the see eighties.

I have not crunched all the numbers to the nth degree but understand I have probably contributed to the maximum that age 76 is kind of a break even point. I figure I am good for late eighties all things being considered(I am 59)

So what is your opinion kind sir?

In case you didn’t know (and just to irritate anyone under 30), Boomers can now claim a public pension at age 60 even if still gainfully employed. That’s right – gone is the provision that you have to stop working to suckle the public retirement teat. It means many people will be pocketing this for thirty years or more, a decade of which they could also be collecting a salary.

But there’s a price for signing up early.

The full CPP benefit you’re entitled to (based on your working career and contributions made) is reduced by about a third for starting to collect at age 60. What’s more, by waiting until age 70, you can actually get a third extra in your monthly cheque. And this is probably just the start. While the CPP is sustainable for the next 75 years, according to the gnomes who run it, you can certainly expect more of this kind of tinkering.

Anyway, what about Robert’s question: should he have his hand out next year or not?

Yes. Here’s why:
•Any time the government gives you money, take it. Handing over pensions five years before most people think of retiring is idiocy. This could be changed on a whim. Go for it.
•But what about the 30% more if you wait five years? If you absolutely know you’ll live to 95, wait. And don’t play in the traffic. But for most of us it makes way more sense to collect the largesse as soon as possible, and invest it. Sixty monthly payments of $500, for example, equal $30,000. That amount invested for a 7% return becomes $60,000 in ten years, tax-free if inside your TFSA. That sure beats waiting to get an extra $150 a month.
•Delaying until 65 or 70 to get more CPP income might also edge you into a higher tax bracket if you’re also drawing from RRSPs. That would pretty much wipe out any benefit.
•Finally, you’ve contributed to this sucker your entire working life, so why not start sucking cash out the moment you have a chance? That way you’ll drain far more from the plan than you ever contributed, which is excellent revenge for being, like, old

#86 Goldie on 08.13.14 at 6:46 am

Brad Lamb was on Lang and O’Leary today.

This cannot go unpunished.

#87 Italians love real estate on 08.13.14 at 7:12 am

#80 Spaccone

No way in hell will your Italian parents, or any Italians in Canada part with their homes at any age health condition or otherwise.

They would rather grow their own food in the backyard before they reverse mortgage sell . An Italian Canadian would rather get leprocy than rent anything!

As for all of you out there worried about retirement, buy a multi unit residence today, rent it out, pay it off and you will have no worries post retirement.

#88 jameskitchener on 08.13.14 at 7:22 am

I am a little different and will be seeking additional advice on CPP at 60. I agree with Garth that the average Canadian should take CPP early. However, I am of the lucky few that has a corporate pension that started before the CPP started in 1952, therefore I have a combined pension with Bridging that stops at 65 when I get CPP

In my scenario I get what is called bridging, when I retire at 60 till I am 65. That bridging almost equals the CPP.
In conclusion if I draw the reduced CPP at 60 and then I loss the bridging at 65 my net income will drop.
If however I wait till I am 65 my net income will not drop
Here are the numbers
Pension $5,000
Bridging $900
This starts at 60 and goes to 65
At 65
Pension $5,000
Bridging $0
CPP $923 (almost the same as the bridging)

Now the other numbers
If I take CPP early
Pension $5,000
Bridging $900
CPP $600
At 65
Pension $5,000
Bridging $0
CPP $600

My point is the shoe does not always fit everyone, seek professional advice.

#89 jameskitchener on 08.13.14 at 7:24 am

Sorry OAS started in 1952
CPP started in 1965

#90 Mr. Frugal on 08.13.14 at 8:00 am

The photo looks quite inspiring. I wouldn’t mind having the freedom to sit watching planes take-off. You will note they have a cooler bag. There are probably a few brews in there. Life is good. Spread the word!

#91 pbrasseur on 08.13.14 at 8:01 am

@Londoner

UK inflation report out today. Carney says that the productivity gap is greater then initially thought and that wage inflation is not yet at a point where a rise in interest rates is warranted.

I guess Carney who has engineered a credit mirage here is doing a good job of doing the same thing over there!

Oh well at least when it’s done you’ll be able to blame the whole thing on a foreigner

#92 Nick Roerich on 08.13.14 at 8:17 am

The Boomers are taken to task right to the very end by their depression-era parents!

“The Feud that Dictated the Destiny of the World”

http://cosmicconvergence.org/?p=2703

#93 Smoking Man on 08.13.14 at 8:30 am

#90 pbrasseur on 08.13.14 at 8:01 am

UK inflation report out today. Carney says that the productivity gap is greater then initially thought and that wage inflation is not yet at a point where a rise in interest rates is warranted
………

For years I’ve been preaching on here for years that rates
are tide to wages… Damn Carney admits it right here.

Yet I will come here in a few days and listen to blog dogs cry when CPI goes up, and rates don’t follow…

I’m good damn good… Here’s a free be.. Sell USDCAD before the revised Jobs report on Friday….

#94 Londoner on 08.13.14 at 8:38 am

#90 pbrasseur

Carney is but one of eight members of the MPC and, as I’ve said before, the BoE is acting in coordination with other central banks.

#95 George S on 08.13.14 at 8:38 am

You are right on with your calculation. I usually tell people that you can get an idea of how much you need to have saved for retirement by multiplying the amount that you want to have as income on top of CPP and OAS by 20. I am basing m calculation on life annuity rates and you are basing it on preserving your capital for your heirs (or ultra luxury accommodation in your last years). We learned in a pre retirement course that the financial benefit of waiting until 65 to take CPP starts at about age 75 (if I remember correctly). Taking it at 60 does give you a lot more money to enjoy when you are young, especially if you don’t quite have the required fortune saved up.

#96 Greg B on 08.13.14 at 8:43 am

Garth,

I like the calcluations. It gives me a good idea of how much I need. Apparently, I am also in this age range 35-44 (middle).
How do you think the Ontario provincial pension plan will factor into everything?

Positives/Negatives for both employees, employers etc..

(a) For the frugal and industrious, more tax and no benefit. (b) For the profligate and irresponsible, more tax and some benefit. In short, a big mistake. — Garth

#97 Turtle on 08.13.14 at 8:50 am

#33 Retired Boomer – WI

“… That slow and steady plan does work!! Yeah tortoise!!”

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

You’ve got it partner!

#98 Steve French on 08.13.14 at 8:54 am

This is Smoking Man getting his first job:

TCOB….

takin care of business!

https://www.youtube.com/watch?v=PKs6y9_d2ps

#99 TurnerNation on 08.13.14 at 8:56 am

My yardstick is Age x $10,000 for net worth. Else screwed.

#100 Nuke on 08.13.14 at 9:03 am

Our saving grace is that as a sole income earner, in retirement, I can split the 2 defined benefit plans, my defined contribution plan, my rrsp and my CPP with low income spouse. After tax puts it at 131% current take home. The tax savings on two basic credits, pension credits, two age credits and a drop in marginal rates makes up for being old and wrinkly.

#101 Smoking Man on 08.13.14 at 9:05 am

Teranet

Tor
% change y/y 6.6%
M/m 1.83%

Year to date 5.39%

Stick forming, but going into fall slowdown.. If no slowdown… Definitely a stick….

#102 rosie "moving forward" in the knowledge that, "this won't end well" on 08.13.14 at 9:07 am

More skin in the game or less buyers?

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-big-banks-posting-stagnant-growth-in-insured-mortgages/article20020333/

#103 Londoner on 08.13.14 at 9:25 am

#92 Smoking Man

I’ve been saying the same – maybe not for years as I’ve haven’t been here that long.

This isn’t the first time Carney has admitted that hikes in the overnight rate would be driven by wage inflation and economic productivity. In fact, the BoE has been fairly consistent with this message for a while. They seem to be relatively transparent in their reports in comparison to BoC and US Fed.

#104 TO Renter on 08.13.14 at 9:28 am

My tiny little micro-market of 1 boutique condo building in Toronto would respectfully disagree with Brad Lamb on units never being empty.

It was built just a few year ago. Flood of luxury units suddenly now for sale by absentee owners and they promote ‘pristine condition – never occupied’ and you can see the original builder’s condition in the pics. The guy who comes around to clean every unit’s air filter has echoed that lots are empty (but he has to swap the filter anyway).

Been watching the ask price slowly sink over the last few months on identical models (you have to know the layouts on various floors to compare apples to apples as they mix up the unit numbers).

Feeling the bubble curve flattening under my feet. I’ m sure they’ve all made out like bandits since pre-construction pricing, but is now finally the time to cash out and move onto the next speculation? Monitoring with interest.

#105 };-) aka Devil's Advocate on 08.13.14 at 9:29 am

#71 William Bell on 08.13.14 at 12:04 am

I found him (Brad Lamb)thoroughly convincing and, being in the business, cannot fault anything his said as an untruth.

#72 Bobby on 08.13.14 at 12:06 am

I’m not trying too hard Bobby. Sometimes I wake up and wonder if I should be but then I realize I’m doing great with more than enough to satisfy my every need. I do what I want now instead of waiting for a future that might not unfold the way I speculate

Good luck finding that condo you are looking for “that has depreciated significantly over the last few years”. Let us know how that works out for you.

#73 Cici on 08.13.14 at 12:07 am

I enjoy more than my fair share of sun and sandy beaches both here in the Okanagan and other parts of the world along with the other three seasons here and everywhere else on this wonderful planet. I enjoy my work and my time off. My only fear is not being here tomorrow to be able to continue doing so. So I pack as much into every day as I can while I can instead of waiting and saving for a retirement that may never come.

#106 Ray Skunk on 08.13.14 at 9:42 am

Re: ORPP

(a) For the frugal and industrious, more tax and no benefit. (b) For the profligate and irresponsible, more tax and some benefit. In short, a big mistake. — Garth

Absolutely. Without doubt the next biggest tax-grab/boondoggle that will pale others before it into significance.

The possible payout in relation to deductions are simply breathtakingly awful. The effect it will have on business overall will cut deep. This could well be the straw the breaks the camel’s back when it comes to the Ontario economy.

I can think of many better ways of forcing the undersaving into a better retirement position, but this scheme is all about revenue tooling and skimming more to the friends and family of K. Wynne who will run the damn thing.

Of course the whole thing is music to the ears of the “please nanny us” Toronto Star set who can’t save $20 a month for all the money they piss away on lattes and 95% mortgages.

Garth, I beg you, please tear this ridiculous scheme apart in a future post… It would be preferential for me to send a link to my drinking companions to save my head exploding with anger next time I have to explain this travesty.

If you require additional bile to reinforce the post, you have my email address.

#107 Ray Skunk on 08.13.14 at 9:43 am

Of course in my post above I meant to type “insignificance”

My rage is such that I cannot think straight.

#108 Anson on 08.13.14 at 10:03 am

Wow how far have we slid as a society when we think money is the cure all…
What i have noticed is that the less real world skills you have the more money you will need… I mean if every time something comes up like minor house , car , lawnmower repair you need to call someone then of course you will need huges amounts of money to make up for your lack of skills..
I moved from toronto 6 years ago and now live in a rural area just north of brockville ontario.
Wow what a different way of thinking out here I mean people in these rural areas have skills that in my opinion is better then money cause money comes and goes but skills on the other hand remain with one his/her whole life.
We have to start thinking out side the box because if we continue allong this path we will need more and more money in the future…
Oh yeah try watching some old shows like good times or all in the familly and you will notice a differnt mentallity from baking their own birthday cakes to sewing their own clothes and actually getting creative and making a halloween costume instead of just buying.
This is the reason why so many now complain about inflation because their solution for everything is money.

A retirement of repairing trousers, watching yeast and beheading chickens. Hey, fun! — Garth

#109 miketheengineer on 08.13.14 at 10:03 am

Garth et al:

When you get old…you open “Ma Bailey’s” Rooming House…and open up your mcmansion, to boarders and you get by renting out rooms…ta da…problemos all solved.

And if you relocate close to a college or university…you should be able to cram in 8 to 10 students into your McMansion….

I was working with a foreign born lady a number of years ago…highly educated, poor english, new to the country…she was vastly underpaid, yet she owned a home, drove a car etc.

So I asked her, how she manages…and she said…I rent out rooms in my basement, 4 people live there, share the kitchen, bathroom etc…all other new comers to Canada, and they pay her rent, all cash no receipts.

She told me, that this is how the real world works, and in her country, this is done all the time, to get by.

Even if you can’t work, if you can find something that adds to the bottom line…great.

#110 JimH on 08.13.14 at 10:09 am

While CPP is ‘earned’ through direct contributions, the OAS pension is simply a government ‘handout’; a result of government largesse…

As such, perhaps younger Canadians might consider that it might one day go away as easily and suddenly as it was created?

You bet. Qualifying age of 70, or income-testing, here we come. — Garth

#111 No-Nonsense Joe on 08.13.14 at 10:22 am

#3 totalinvestor.com

It’s all a matter of earning vs. spending. What if you had a take-home $60,000, but lived on $30,000 and invested the rest? You probably wouldn’t work for long.

I really don’t like the 80%-of-revenue rule, since it implies that you spend as much as possible and invest less than 20% of what you earn. That rule doesn’t apply to people who invest 50% of what they earn.

#112 Dupcheck on 08.13.14 at 10:27 am

#86 Italians love real estate

Because they do not know any better…

Be careful of those “by-laws” bite them in the behind when they find out that they can not farm ore raise animals in their backyard, or run loud machinery, or sprinkle pesticides in residential areas.
Ignorance only learns the hard way. It explains why people have lousy neighbours, because these lepers think they can do anything they want in their property by disturbing most of the neighbourhood. It is a shame.

#113 Rational Optimist on 08.13.14 at 10:30 am

98 TurnerNation on 08.13.14 at 8:56 am

“My yardstick is Age x $10,000 for net worth. Else screwed.”

That is a pretty low bar to set…

#114 John Prine on 08.13.14 at 10:36 am

#85 Goldie on 08.13.14 at 6:46 am
Brad Lamb was on Lang and O’Leary today.

This cannot go unpunished.

He said that in 20 years only the rich will live in SFH the rest will be in condos and he will do his best to facilitate. Free advertising compliments of CBC. It always amazes me how the MSM always uses developers and bankers as “experts” Fox and Henhouse….

#115 Balmuto on 08.13.14 at 10:44 am

Let the HAM debates begin:

https://ca.news.yahoo.com/torontos-condo-king-says-50-233000589.html

#116 Tony on 08.13.14 at 10:50 am

Re: #111 Dupcheck on 08.13.14 at 10:27 am

Thus the old two word phrase that never gets old. First word starts with a D and the last word with a W. I’m just using the name Tony I’m actually of Irish and English background.

#117 stop lying on 08.13.14 at 10:56 am

ORPP is another Liberal disaster in the making. If an employer was smart, they would set up a RPP immediately so their employees don’t get sucked into that abyss. Their employees will be much happier about it.

As for OAS, yes I think it will be scaled back. But previous musings about CPP being income dependent cannot be allowed to happen without grandfathering all previous contributions.

#118 };-) aka Devil's Advocate on 08.13.14 at 10:58 am

#107 Anson on 08.13.14 at 10:03 am

Good Points Anson. Too many are too busy earning money to pay another to do for them things they can not themselves and save for a retirement that odds are will never get to play out the way they anticipate.

And as far as Garths comment…

A retirement of repairing trousers, watching yeast and beheading chickens. Hey, fun! — Garth

Lame response to be expected by someone obsessed with a future that may never come.

Use it or lose it.

#113 John Prine on 08.13.14 at 10:36 am

It always amazes me how the MSM always uses developers and bankers as “experts” Fox and Henhouse….

You are absolutely right John Prine. They’d be way better off using a basement dwelling renter as an “expert” on real estate. And while you’re at it why go to a dentist when your automotive mechanic has a perfectly good drill and set of pliers that’ll do the job, or your carpenter who could probably reset that broken leg. LOL

};-)

#119 Doug in London on 08.13.14 at 11:01 am

@totalinvestor.com, post #3:
Freedom 55 is dead you say? Don’t tell that to Derek Foster (www.stopworking.ca) who has a wife and 4 kids and retired at 35, or http://www.mrmoneymustache.com who retired in his thirties, has a wife and kid, and lives just outside of Denver. Myself, I am 53 years old and have been semi retired (only working on off) since age 34 and am fully retired now.
Freedom 55 (or earlier!) is ALIVE AND WELL for anyone who has the presence of mind to live well within their means, save a good portion of their income, and invest it wisely.

#120 Ronaldo on 08.13.14 at 11:05 am

#112 Rational Optimist on 08.13.14 at 10:30 am
98 TurnerNation on 08.13.14 at 8:56 am

“My yardstick is Age x $10,000 for net worth. Else screwed.”

That is a pretty low bar to set…

And even at that “low” level, most will never come close to it.

#121 };-) aka Devil's Advocate on 08.13.14 at 11:12 am

#113 John Prine on 08.13.14 at 10:36 am

He (Brad Lamb) said that in 20 years only the rich will live in SFH the rest will be in condos and he will do his best to facilitate.

When you consider the changes in the real estate landscape over the last 20 years and the escalating momentum with which the pace of change is occurring, I have no doubt that what Mr. Lamb is projecting could very well unfold as such.

Real estate values, in my experience, have historically doubled about every 10 years. Will it continue? I remember saying it couldn’t 10, 20 and 30 years ago but it did. Of course most here would disagree that it can continue. But, in my mind and my business, by keeping track of your past you can predict your future if you continue doing what you were doing, and I’m quite confident Canadians and others are bound to continue doing what they have been doing.

So yes, I think Brads probably more right than wrong as incomes I must agree are not keeping pace with the increase in the cost of housing. Furthermore the income gap keeps on widening.

Project that into the future and those “wealthy” who buy property today at todays prices will be able to rent it for what you might consider “subsidized rents” but not really as you need to cap it out on what they paid then not so much what it’s worth at the time. Get it?

Moral of the story; Many who don’t get their shit together are destine to become serfs. Renters already are. Only the wealthy will be able to afford land everyone else will rent it or stack one on the other floor after floor after floor to share in the cost of it such that it becomes affordable.

SHIFT happens.

#122 Retired Boomer - WI on 08.13.14 at 11:15 am

112# Rational Optimist
98# Turner Nation

Actually, it is a pretty decent bar to set.

Age X $10,000 (Investible Assets) is perhaps a bit better one to strive for.

I would not consider a house an “investment” in any sense of the word. Most investments cost nothing to ‘keep’ but a house has maintenance, repairs, taxes, insurance besides the cost of acquisition. Do the MATH here, you will not find it very advantageous. That said, I love my little corner of the world despite the above ‘costs’ as I can afford it.

If you can afford it, by all means do what you wish.

#123 Daisy Mae on 08.13.14 at 11:18 am

#95 George: “Taking it at 60 does give you a lot more money to enjoy when you are young, especially if you don’t quite have the required fortune saved up.”

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

There are exceptions. Beware. Early application could negate spousal support resulting in a lifetime of reduced CPP.

#124 coastal on 08.13.14 at 11:29 am

devils house pumper,

“Good luck finding that condo you are looking for “that has depreciated significantly over the last few years”. Let us know how that works out for you.”

Any condo older than 10 years in Victoria has dropped 30% in the past two years, lots of deals. Same will happen to new condos once the next round of leakers show up which they are starting to. Kelowna is even more susceptible to a second crash.

#125 Vamanos Pest on 08.13.14 at 11:36 am

Garth, were does the 0.8 number come from in the equation. I suspect it’s an average of what people actually tend to spend in retirement as a percentage of their earning years (80%). But I think you forgot that your audience is RICH! so this doesn’t apply very well. (The calculation said I need something like 11 million to retire. Really, NEED 11 million?) I think it would be better to start with an AFTER SAVING number. If you make 300k, but save 100k per year, then do the calculation with a figure of 200k. After all, in retirement I need to support a lifestyle, but no longer need to build wealth.

#126 JimH on 08.13.14 at 11:40 am

};-) aka Devil’s Advocate = Troll

#127 chapter 9 on 08.13.14 at 11:44 am

Take Garth’s advice and take the early cash(CPP) last time I looked I didn’t notice an expiry date stamped on the bottom of my foot like a box of cereal. We as humans don’t have that option knowing when our time is up so this is a no brainer–cash out!!

#128 Life's a supermartingale on 08.13.14 at 11:44 am

Garth, as a professional economists, I can tell you right now that your post is nonsense. People making $100,000 per year don’t need anywhere close to that amount of money. A couple who had a terminal income of $100,000 per year needs only about $30,000 per year of passive income ($600,000 portfolio) to keep their standard of living the same, assuming the couple receives CPP and OAS. The numbers the financial industry throw around are insane – just looking for more AUM. If I save 20% of my income while working (including mortgage payments) and my discretionary spending drops by 20% in retirement (which it does for most people) at most I need to replace only 60% of my income. And if kids were part of the picture, once they’re gone, to keep my consumption the same, I need even less than 60% – often 40% to 50% will often do.

Read the academic literature on this – not industry bunk, Garth. The vast, vast majority (more than 80%) of people save adequately for retirement. Otherwise, I guess the problem was freedom itself – perhaps the Soviets were right not to let people make private saving/consumption decisions.

Good luck living on 70% less income. Not for me, dude economist. — Garth

#129 james on 08.13.14 at 11:54 am

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-big-banks-posting-stagnant-growth-in-insured-mortgages/article20020333/

Pretty evident that people don’t have issues affording homes. What up with the doom and gloom Garth?

#130 Ogopogo on 08.13.14 at 11:54 am

#50 };-) aka Devil’s Advocate on 08.12.14 at 10:12 pm

Year after year many of the same posters on this blog have been holding themselves back waiting for the market to tank before stepping in.

This is the classic asinine mistake realtors like you continually make. Us savvy renter-investors aren’t “waiting” for anything. As I’ve said many times here before my liquid, balanced and diversified portfolio continues to grow in leaps and bounds as my munificent landlady generously subsidizes my downtown condo lifestyle.

As I’ve also said before and others have chimed in, I’m starting to wonder now if I would even bother vultching if the market crashes. The thought of giving up my tax-advantaged investments to shackle myself to an illiquid asset and money pit (a.k.a. house) is becoming less and less appealing as my stash grows.

But of course realtors would rather believe their own fairy tales, lies and clichés.

#131 JimH on 08.13.14 at 12:05 pm

Canada’s big banks posting stagnant growth in insured mortgages?
Risky business!

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-big-banks-posting-stagnant-growth-in-insured-mortgages/article20020333/?utm_medium=Newsletter&utm_source=Morning%20Business%20Briefing&utm_type=text&utm_content=MorningBusinessBriefing&utm_campaign=118756608

#132 Seems Reasonable on 08.13.14 at 12:18 pm

This calculation that Garth offers seems reasonable although I question the 80 percent figure. For most of us, about 40 to 50 percent of income went to necessary expenses. I am no actuary but it seems like someone could make a go of it on 65 percent.

My wife and I are fortunate in that our investments well exceed Garth’s threshold. I am concerned though that in years to come, there will be many more people who do not have sufficient savings than those who do. If we all vote, it will be interesting to see how governments will approach taxation and universal access to programs such as OAS.

And I have no problem with that to a point. It would make more sense for those of us who are reasonably well off to tighten our belts than to deprive the most vulnerable amongst us, the children. All I ask is that they stay off my lawn. Past a certain point though, I can see us looking for other places to live that cost less, that offer services that we need, and that do not penalize us for having assets in favour of those who do not as a result of their poor choices.

#133 devore on 08.13.14 at 12:40 pm

#81 Londoner

UK inflation report out today. Carney says that the productivity gap is greater then initially thought and that wage inflation is not yet at a point where a rise in interest rates is warranted.

Productivity is low because too much of the economy is engaged in real estate. Why work or do anything when your house makes you more than your job.

#134 Long Time Lurker on Here on 08.13.14 at 12:48 pm

I have been trying to tell my friends for the longest time that, to retire, you need 1.5-2m. This assuming 30 years later, 1.5m then will still worth as much as 1.5m now.

The generation I am in sucks. Most of my friends pay support money to their parents. On top of that, they have to support their kids. What we have is one generation supporting 3 generations (including themselves).

Except those uber rich people, most of the boomer parents I know of are not prepared for retirement. OAS will be their only income. The problem is, it seems all normal to them.

#135 Snowboid on 08.13.14 at 12:50 pm

#129 Ogopogo on 08.13.14 at 11:54 am…

Sadly the self-appointed god of Okanagan real estate is well on his way to being banned again.

I have recordes the sales history of several condo developments completed in the central Okanagan since 2006. The values have moved down at a depressing rate (for owners).

We rent a luxury unit in a complex near downtown that has seen it’s values plummet since sales started in 2007-8.

$ 500-550K units currently listed under $ 400K, some are selling – others languish after being on the market for almost two years.

We also looked at some ‘vulching’ this past couple of months, but the pricing trend is still downwards.

Besides, watching our investment accounts steadily grow is far more enjoyable than risking our money on “…an illiquid asset…” as you mention.

It’s apparent by the muddled musings of the RE god that things are going badly for him.

Instead of plugging this blog with insults towards ‘renters’ he should remember the incredible loss in value his own home has suffered in the last eight years.

#136 };-) aka Devil's Advocate on 08.13.14 at 12:51 pm

#123 coastal on 08.13.14 at 11:29 am

#125 JimH on 08.13.14 at 11:40 am

#129 Ogopogo on 08.13.14 at 11:54 am

What the three of you fail to understand is;

1. I don’t care what you think
2. I don’t care what you do
3. I don’t care what the market does
4. I don’t know what the market will do
5. I do know what the market has done and IS doing
6. I don’t need or want your business, not trolling at all.
7. I post information I think some might want to consider.
8. I have absolutely nothing to gain by telling you something that just is not true
9. If you grow weary of my posts just pass on by
10. Hope it works out for the three of you as, really, I have nothing to lose either way. I don’t make or influence the market I report what it is.

#137 Bottoms_Up on 08.13.14 at 12:56 pm

#23 Detalumis on 08.12.14 at 8:23 pm
—————————————–
agree, with only having to cover property taxes, household utilities and maintenance, food, car and miscellaneous expenses, could likely be ok at 60% income. But Garth builds in a fun factor, what good is retirement if you can’t spoil your grandkids, or see the world, or do those things you couldn’t do while working???

#138 Bottoms_Up on 08.13.14 at 1:02 pm

#118 Doug in London on 08.13.14 at 11:01 am
—————————————–
That’s called cherry-picking data. On average, for that 35-44 cohort, freedom 55 is but pie-in-the-sky. I believe that’s what poster #3 was getting at.

#139 Bottoms_Up on 08.13.14 at 1:05 pm

You bet. Qualifying age of 70, or income-testing, here we come. — Garth
——————————————-
As it should. However, any changes to reduce CPP should be fought tooth and nail, and I hope boomers and/or gen X’ers are up to the challenge if the time ever comes.

That would be called ‘stealing’ in any other situation. You give me money, I keep and grow your money, and promise to return it to you, and then decide that no, you don’t get it have it all back.

#140 Italians love real estate on 08.13.14 at 1:16 pm

#111 dupcheck

Most Italian Cdn have a better understanding about by laws than others , since it is they and there many construction companies that built most of The GTA ( and became wealthy beyond their wildest dreams doing so to add). They choose to ignore some

#115 Tony .

They came with nothing and now pretty much have risen to the top of the food chain. Just run a list of the wealthiest families in the country and see for yourself how many are Italian. As for your “D” and “w” I would have said “D” and ” M”

#141 TO Renter on 08.13.14 at 1:16 pm

#104 };-) aka Devil’s Advocate on 08.13.14 at 9:29 am
#72 Bobby on 08.13.14 at 12:06 am

Good luck finding that condo you are looking for “that has depreciated significantly over the last few years”. Let us know how that works out for you.

+++++
I got a few for you ! Top floors in our luxury low-rise, top notch neighbourhood. The prices have plummeted from the old glossy printed brochures sitting high up in the empty closets, now the website reads – clearance – make an offer! Then again multi-thousand square foot penthouses are not everyone’s game. The developer has been waiting 5 years so far… agents come in regularly, stage them, then give up… we super low-balled an offer and were almost accepted… thankfully glad we dodged that bullet. So there is some buyer sanity in the condo market after all.

#142 Lost in the great alaskan bush on 08.13.14 at 1:17 pm

my tax-advantaged investments …..

Many here are sitting on 1m or more of
RE gains which are taxed at exactly zero.

Advantage who?

#143 Big Ed on 08.13.14 at 1:51 pm

Since we are on the topic of retirement and money. Here is a link to a fantastic retirement calculator. Hope that some have a look and play with it, you might be already there in terms of cash required.
Good luck.
Big Ed

#144 Big Ed on 08.13.14 at 1:51 pm

forgot the link.
http://financialmentor.com/calculator/best-retirement-calculator

#145 Enthalpy on 08.13.14 at 1:56 pm

wow #124 makes like $540k/yr.

obvious brag post.

#146 old phartz on 08.13.14 at 1:57 pm

Anson # 107

You are exactly the type of person people in rural areas will welcome to their community.

Lot of disrespect on this forum for working blue collar folks in general. Maybe some of you dogs need to come out and partake in the real world where you are judged on what you do and not on what you say or the size of your wallet.

If you think about it…you can have all the money in the world but if you can’t look after your own personal needs you are at the mercy of the individual you hire.

So much for the money gives you control idea.

#147 Mort Gage on 08.13.14 at 2:03 pm

“It may seem obvious, with today’s low interest rates, high rents and a strong housing market: If you’ve got the money, buy now.” – This is the opening line of a Globe and Mail article today which is entitled ‘Five signs you are ready to take the home-buying plunge’. If you have a downpayment, buy now! Typical article you would read in Ireland a few years back before the bubble burst. It’s coming!!

#148 Bottoms_Up on 08.13.14 at 2:06 pm

#131 Seems Reasonable on 08.13.14 at 12:18 pm
——————————————————
Why does it always have to be referred to as “poor choices”? I chance it to say that many, many people and families are in dire straights out of circumstances beyond their control (back luck, greedy corporations, born into poverty, disease/disabled etc.). That’s why we live in a socialized society so that the less fortunate can have a reasonable standard of living.

I bet you there are a similar number of people in the top 20% as well as the bottom 20% who have made ‘poor choices’. It’s just that those in the top 20% either were more lucky, had better support and/or attributes to keep them there.

For the record, I think the Ontario pension plan is a good thing. It forces EMPLOYERS who do not have a benefit plan in place for their EMPLOYEES, to have one. This is the people, the government, rising up against greedy corporations. Note that people that already have a substantial pension plan offered through their employer will not be contributing to this plan.

#149 OMG on 08.13.14 at 2:08 pm

#36 Smoking Man on 08.12.14 at 9:05 pm
If you’re underpaid. Or not working.. Stop sending out your slavery manifest (Resume)
Drive to an industrial area, with a business card that reads entrepreneur, your name and cell. Wear an expensive suit to get you past reception..
Demand to speak the president, you want to business..
Once you get into his/her office…
Tell them your starting up a supply company, but you haven’t figured out what you are going to supply.
Ask, what vendors or suppliers are you not happy with and would switch if the right company came along…
99% of CEO’S will see a young version of them in you.
———————————————————-

I don’t think so, 99% of CEO’s wouldn’t have time for a person with no plan in hand. A person with an idea and a plan perhaps.

It would go something like this.
Entrepreneur: Hello I have no idea what I want to sell you but tell me what you need and I will start selling it!

CEO: We need missile safety triggers.

Entrepreneur: I’ll get back to you on that, as they run out of the office thinking WTF are missile safety triggers. Crap I should have had a plan!

CEO: Dumbass…………..

#150 bill on 08.13.14 at 2:13 pm

#134 Snowboid on 08.13.14 at 12:50 pm
Yes he does seem to be entering a ‘manic’ phase again.
if only he would keep his word eh? whats this now 2 or three times he has promised to ‘never’ return?

#151 };-) aka Devil's Advocate on 08.13.14 at 2:14 pm

#134 Snowboid on 08.13.14 at 12:50 pm

You are wrong on every point and I can prove it. What’s your address, the foot of Leon? Give me some addresses. You can’t can you.

#140 TO Renter on 08.13.14 at 1:16 pm

Same goes for you

Put up or shut up boys.

};-)

#152 Nattie on 08.13.14 at 2:18 pm

I’m with Devil’s Advocate. I personally would much rather keep working until I am no longer healthy enough to do so, but in a semi-retired way – maybe that means taking work with significant gaps in between contracts, maybe that means working fewer hours, or maybe that means working a job I prefer that happens to pay less.

To me, this sounds much more stimulating than dropping out of the workforce for 20 years. It was tough enough for me going from full time uni+full time work to just full time work. Still haven’t quite adjusted (thankful for the gym and volunteer opportunities to keep me busy.)

Any ideas on how to convince house-rich, cash-poor older boomer parents to downsize (or at least take a reverse mortgage?)

#153 .charles@ on 08.13.14 at 2:19 pm

yeahh baby, I am ok. My home today cost 780K in 10 years will cost 2.3 Millions…. ;) homes always go up, right? right?

#154 Sheane Wallace on 08.13.14 at 2:21 pm

Ca condo market is doing great. Because Gen worth said so.

https://ca.finance.yahoo.com/blogs/balance-sheet/expect-soft-landing-canada-condo-market-report-165335485.html

#155 Montellino on 08.13.14 at 2:25 pm

Why is it that people always pay attention to the wrong statistic – oohh Sales are up – yes [email protected] but prices are down.. here it is in a MSM chart just published. GTA turned the corner as Garth was saying. So no jobs, rates may be going up sooner due to americans, sales are higher but price is not going up anyomore – in a booming market! Why should I fork over $800K now?? Oh yes the “other” buyers… good luck with that…

http://www.cbc.ca/news2/interactives/housing-canada/

#156 Sheane Wallace on 08.13.14 at 2:29 pm

Friend of mine is trying to flip small house in the suburbs for 800 k, I asked him: how much would you pay to live there? He said: no more than 450.
Why do you think, I asked him, will somebody pay then 800 k for this substandard (advertised as high end) piece of crap?
Because people are stupid and have access to easy credit and because these are the real prices was the answer. (well at least were as they have declined at least 5 % since the early spring)

And the government is actually enabling this insanity through CMHC instead of fighting it. Just look at the finance minister, oh my, I would not hire him on any position, the guy needs care, I saw recently and can recommend an old age home with special memory exercise program.

#157 Financial Freedom at 40 on 08.13.14 at 2:29 pm

Misery week? And we’re only half way through! Praying for Friday.

#158 Victor V on 08.13.14 at 2:39 pm

Soft Landing Still Likely for Canadian Condo Market

http://genworth.ca/en/about-us/news-releases.aspx

#159 Retail Investor on 08.13.14 at 2:43 pm

Yes, lets use some numbers. The average single wage is now about 45,000 and the average household wage something like 75,000 (so the lower spouse earns 30,000.

Use this spreadsheet http://www.retailinvestor.org/SaveInRRSPorTFSA.xls Click the third tab at the bottom for the most pessimistic assumption (that RRSP excess draws go into a taxable account). Change these input variables.
$45,000 wages
10% savings
6% RofReturn
$450,000 RRSP balance at age 65 will not get depleted.

$30,000 wages
same savings rate and profits rate
$250,000 RRSP balance will not get depleted.

So the average household needs only 450+260 = $700,000 of RRSP savings. Not $1,400,000.

#160 Stickler on 08.13.14 at 2:52 pm

A different kind of retirement calculator:
http://firecalc.com/

#161 kommykim on 08.13.14 at 2:56 pm

RE:#118 Doug in London on 08.13.14 at 11:01 am
@totalinvestor.com, post #3:
Freedom 55 is dead you say? Don’t tell that to Derek Foster (www.stopworking.ca) who has a wife and 4 kids and retired at 35, or http://www.mrmoneymustache.com who retired in his thirties

I have to agree. If people just lived well within their means and saved a generous portion of their income, they could retire early with no reduction in spending. ie: If you get used to living on 60% of your currnet income, then that is all you’ll need in retirement and it won’t take you long to accumulate it:
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

#162 Mark on 08.13.14 at 3:01 pm

Canada’s big banks posting stagnant growth in insured mortgages?
Risky business!

Of course. CMHC is no longer expanding its subprime mortgage guarantees, having hit the $600B limit effectively last year. And housing prices haven’t grown in over a year. Makes perfect sense.

#163 Vamanos Pest on 08.13.14 at 3:02 pm

Nope, actually just pointing out a shortcoming of the formula Garth was suggesting given what we know about his readers (as in, they’re mostly rich).

BTW-Subtle brag post maybe, but “obvious”? You literally had to do algebra to figure that out. Hardly obvious.

#WhatsNotToBragAbout

#164 rainclouds on 08.13.14 at 3:09 pm

Devil dude

Please provide credible data for your assertions.

pretty sure someone who spends all day, every day .scribbling the same thing ain’t too busy doing what they say they do.

Kinda repetitive bud………….

#165 HD on 08.13.14 at 3:23 pm

I apologize because this is off topic but some of you might find it interesting:

http://www.smh.com.au/national/fast-money-20140804-3d2x4.html?&utm_source=facebook&utm_medium=cpc&utm_campaign=social&eid=socialn:fac-14omn0583-optim-nnn:paid-25/06/2014-social_traffic-all-postprom-nnn-ebaby-o

Best,

HD

#166 GreaterGenius on 08.13.14 at 3:40 pm

Funny post, but that 1.4 million is completely unrealistic. It is back to the drawing board for GreaterFool.

Statistically speaking most people will never get to that number, especially in a society that is based on consumption.

Exactly. Since when is this blog for ‘most people’? — Garth

#167 happity on 08.13.14 at 3:40 pm

Housing mortgage apps at 14 year low.

But don’t worry, some think the USA economic renaissance is still strong.

Those apps are overwhelmingly for refis, which naturally fall when mortgage rates rise. It says zip about the economy. — Garth

#168 Smoking Man on 08.13.14 at 4:10 pm

#148 OMG on 08.13.14 at 2:08 pmIf you’re underpaid. Or not working.. Stop sending out your slavery manifest (Resume)
Drive to an industrial area, with a business card that reads entrepreneur, your name and cell. Wear an expensive suit to get you past reception..
Demand to speak the president, you want to business..
Once you get into his/her office…
Tell them your starting up a supply company, but you haven’t figured out what you are going to supply.
Ask, what vendors or suppliers are you not happy with and would switch if the right company came along…
99% of CEO’S will see a young version of them in you.
———————————————————-

I don’t think so, 99% of CEO’s wouldn’t have time for a person with no plan in hand. A person with an idea and a plan perhaps.

It would go something like this.
Entrepreneur: Hello I have no idea what I want to sell you but tell me what you need and I will start selling it!

CEO: We need missile safety triggers.

Entrepreneur: I’ll get back to you on that, as they run out of the office thinking WTF are missile safety triggers. Crap I should have had a plan!

CEO: Dumbass……………
…………..

OMG Obviously you’ve never started a company… Every successfull CEO is an opportunist..

You get a monkey, chasing down new suppliers for you free of charge, no cost to there company, they will jump on it…

That’s exactly how I started my first company…. And when sold it 5 years after I started, my sales where 12 million…. Not only that, but my first client was going to invest huge in building a Mexican factory when I showed up…

He didn’t need to.

#169 devore on 08.13.14 at 4:13 pm

#165 GreaterGenius

Statistically speaking most people will never get to that number, especially in a society that is based on consumption.

Statistically speaking, many people will easily exceed that amount on their house, considering purchase price, interest, insurance, property taxes, maintenance of house and grounds, etc.

Consume less. Start with smaller house, less furniture and less empty rooms. There, I just saved you $200k at least.

#170 Snowboid on 08.13.14 at 4:17 pm

#163 rainclouds on 08.13.14 at 3:09 pm…

The GG of RE asks for my address “… the foot of Leon…” – full well knowing there aren’t any ‘luxury’ condos there. I am in a building where units that sold for $ 589K were recently listed at $ 434K; $ 829K at $ 619K; $ 2.9 million at $ 1.995 million.

We looked at condos on Sunset Drive, Sarsons, Bernard — all down 15-20% from 2007-8. To my thinking those are substantial differences.

I will post my address if the golden god posts his!

#171 OMG on 08.13.14 at 4:26 pm

#167 Smoking Man on 08.13.14 at 4:10 pm

Been there done that. I do run my own company! Employ more than 40 people. What does your company do? Company of one? two? three? My understanding is you are a self employed computer guy or something to that effect. Still great to have your own business kudos.
However, No business plan is absolutely prone to failure.
End of topic!

#172 FHS on 08.13.14 at 4:41 pm

Garth, you’re scaremongering to the choir but that’s besides my point as I do enjoy it daily. Please don’t call CPP and OAS pogey as I have been paying into CPP and federal taxes my entire career. As have many of your readers. Those retirement funds are a partial return of confiscated funds at worst.

#173 Capt. Obvious on 08.13.14 at 4:55 pm

#162 “BTW-Subtle brag post maybe, but “obvious”? You literally had to do algebra to figure that out. Hardly obvious.”

Not to state the obvious: the problem, in general, with the housing market (and indeed retirement planning) is too many people can’t do the algebra. They literally cannot work out how much things cost.

#174 Still seems reasonable on 08.13.14 at 5:07 pm

#147 Bottoms_up

I have heard similar comments before. While I recognize that life is a crap shoot, and that some people are dealt a bad hand, I have also seen that some people will often make the worst possible choices regardless of their socioeconomic background. There is ample evidence of people living beyond their means, making poor investment choices (oftentimes through buying too expensive real estate), and generally not taking responsibility for themselves.

Mistakes are repeated rather than lessons being learned. Blame is portioned out and no responsibility is taken. I believe Einstein had something to say about repeating mistakes.

As to greedy corporations, a corporation exists to make a profit. If one understands this going into any relationship, such as employment with them, it is a lot easier to predict how they will act and how to avoid getting bitten.

I support the social programs that are in place, although I have my reservations as to how well they are administered and if they are cost effective, but I also believe that placing an ever increasing tax burden on those who are well off is not going to generate enough tax revenue to provide all the things that some might like the general population to have.

I am in favour of anything that gives kids a leg up, keeps their bellies full, and helps them to further their education with an eye towards being useful and productive members of society. As to rescuing people with underwater mortgages, or proposing to add questionable pension plans (looking at you Ontario), I very much doubt that any such measures will help in the long run.

#175 coastal on 08.13.14 at 5:22 pm

I’m sure all the forest fire smoke is making devil boy delusional. I just checked at a familiar hood in West Kelowna and it’s the same price as a few years ago but totally reno’d for at least $30K worth so prices are going no where in the real world.

#176 Nomad on 08.13.14 at 5:32 pm

Less boomers than expected will stop working.
My dad and his colleagues are 65-68 and still working, even if they could retire. Same with my friends’ parents. People are healthier and many like their jobs.

Those boomers will keep offering to help their kids out. Why not, when your house is paid off and you can’t or don’t want to travel anymore, but you still have passion for work. This will help keep prices up for the next 5 years. Sure it could change after that but don’t rent waiting for a sale. Also look at the rest of the world. Millions want to come to Canada. Even the french move to Montreal.

I was wrong to forecast a price drop.

And read this:
“Continued growth in immigration, affordability pressures in major cities, and aging baby-boomers looking to downsize are all factors that support continued demand for condominiums in urban centres,” – -Genworth

#177 TakingResponsibility on 08.13.14 at 5:37 pm

Ahhhh, just love measuring out my life as a hyperrational Homo Economicus.

#178 Mike S on 08.13.14 at 5:45 pm

Not related to this post, but given that many markets are in correction mode already. Does this going to affect the Canadian banks and especially employment in the finance/mortgage sector?

#179 Son of Ponzi on 08.13.14 at 6:09 pm

#87
My point is the shoe does not always fit everyone, seek professional advice.
——————–
that’s why I always ask my trusted shoemaker before making financial decisions.

#180 espressobob on 08.13.14 at 6:11 pm

#171 FHS

When it comes to CPP or OAS, good luck! Maybe that’s why Garth is trying to help you. You should be scared!

Financial literacy? Pogey is what it is!

#181 DM in C on 08.13.14 at 7:00 pm

Oh DA HAHAHAHA

“6. I don’t need or want your business, not trolling at all.”

AHAHAHAH that’s not what they (nor I meant yesterday) mean by TROLL. You are either obtuse (history proves that point well) or willfully dense.

troll
One who posts a deliberately provocative message to a newsgroup or message board with the intention of causing maximum disruption and argument

By that definition, sir, you are the penultimate TROLL. And everyone reading this knows thus.

#182 };-) aka Devil's advocate on 08.13.14 at 7:01 pm

#163 rainclouds on 08.13.14 at 3:09 pm

I’m on vacation Dude };-)

Yup even in this busy market

#169 Snowboid on 08.13.14 at 4:17 pm

No prob bird man. Just tell me what you’d like me to prove or disprove with the verifiable facts I have at my disposal.

#183 };-) aka Devil's Advocate on 08.13.14 at 8:36 pm

#180 DM in C on 08.13.14 at 7:00 pm
Oh DA HAHAHAHA

“6. I don’t need or want your business, not trolling at all.”

AHAHAHAH that’s not what they (nor I meant yesterday) mean by TROLL. You are either obtuse (history proves that point well) or willfully dense.

troll
One who posts a deliberately provocative message to a newsgroup or message board with the intention of causing maximum disruption and argument

By that definition, sir, you are the penultimate TROLL. And everyone reading this knows thus.

Wasn’t familiar with the term quite honestly. But that said I can accept your name calling as appropriate to a degree. What matters most is maybe, just maybe, My “trolling” will get you thinking. Because my inflammatory comments are truthful.

#184 };-) aka Devil's Advocate on 08.13.14 at 8:37 pm

#180 DM in C on 08.13.14 at 7:00 pm
Oh DA HAHAHAHA

“6. I don’t need or want your business, not trolling at all.”

AHAHAHAH that’s not what they (nor I meant yesterday) mean by TROLL. You are either obtuse (history proves that point well) or willfully dense.

troll
One who posts a deliberately provocative message to a newsgroup or message board with the intention of causing maximum disruption and argument

By that definition, sir, you are the penultimate TROLL. And everyone reading this knows thus.

Wasn’t familiar with the term quite honestly. But that said I can accept your name calling as appropriate to a degree. What matters most is maybe, just maybe, My “trolling” will get you thinking. Because my inflammatory comments are truthful.

#185 };-) aka Devil's Advocate on 08.13.14 at 9:03 pm

#180 DM in C on 08.13.14 at 7:00 pm

Sometimes the truth hurts. I’m not out to make any friends here. I’m here to tell you what you need to know not what you want to hear.

#186 bill on 08.13.14 at 9:05 pm

snowboid -you seem to have struck a nerve! da is dissembling [again]
why would anyone trust you? you cant keep the simplest of promises.

#187 };-) aka Devil's Advocate on 08.13.14 at 9:11 pm

#169 Snowboid on 08.13.14 at 4:17 pm

I will post my address if the golden god posts his!

Not your address Snowboy, the addresses of specific properties which have been on the market and support your claim. Give me the addresses and I will research and report back to you and the readers their historical MLS activities and record of sale (MLS and/or private).

#188 };-) aka Devil's Advocate on 08.13.14 at 9:56 pm

#185 bill on 08.13.14 at 9:05 pm

Ya I sense too that I am losing my patience with the Pups and Poodles (is Snowboid a Pup or a Poodle I wonder? Little too effeminate a handle for a guy). Oops there I go being a Troll again.

Hey Snow??? whatever you do realize sales volumes in the Central Okanagan are up over 30% and that price follows volume, always… up or down but that, right here, right now volumes are UP.

The narcissistic troll known simply as };-)

#189 bill on 08.13.14 at 10:21 pm

#187 };-) aka Devil’s Advocate on 08.13.14 at 9:56 pm
well up the meds or seek professional help .

#190 Snowboid on 08.14.14 at 12:55 pm

88 bill on 08.13.14 at 10:21 pm…

You notice the GG of Kelowna RE has (as I predicted) has reverted to personal insults.

It’s like after shoveling the SHIFT from his latest RE read, he can’t cope with the truth about property values in the Okanagan.

He suggests he will do research on properties I have been following and will report back.

He forgets I know who he is and how full of SHIFT he is. Maybe he should spend more time working on making a living, rather than hoarding all the troll rewards on this blog!

#191 David Hawke on 08.14.14 at 1:44 pm

Or you can do the intelligent thing, LEAVE Canuckistan for a country with decent weather and live well on less than 1/4 of what is required to live in the cold country!

#192 Doug in London on 08.14.14 at 2:08 pm

@Bottoms_Up, post #137:
Call it cherry picking or whatever you like, but I used that example to show that Freedom 55 (or earlier) is actually possible if you manage your money sensibly.

@kommykim, post #160:
You have the right idea. I see you also read http://www.mrmoneymustache.com. I found out about that blog here on this blog and read it regularly. Anyone here who thinks retiring at age 55 or earlier is a pie in the sky dream should read this highly informative blog.

#193 bill on 08.14.14 at 3:11 pm

#189 Snowboid on 08.14.14 at 12:55 pm
oh yes! clearly he has a problem. I have trouble juggling his self avowed success storey with his demeanor around this blog . cant really see it to be honest.unless he is a ‘snake in a suit’ and has dropped the facade here as it gives a certain amount of anonymity .