The better way

Why does T2 think it’s okay to gut TFSAs, create a new tax bracket and whack business owners? Because, politically, it is. The federal Libs are out to destroy the NDP (currently trying to pick a leader), so they can suck off the soft socialists and rule Canada forever.

It’s a plan. So far, it’s working. Step One is to create class warfare. The steerage section of this pathetic blog will attest to how great that’s going. Drenched in debt, laden with house and swimming in their own bad decisions, the deplorables among us believe the way they can get more is to ensure everyone else has less. And why not? It’s exactly the message of Bill Morneau.

“Too many people still feel as though the system is stacked against them. They work hard. When it comes to paying their taxes, they pay on time and in full. But there is a sense that some may be getting a better deal than others. It’s time for the next steps in our plan to bolster the confidence Canadians have in their Government and in their economy. And it starts by making sure that we all pay our fair share of taxes—with no exceptions.”

When asked what a ‘fair’ tax is, the answer’s always the same – one that somebody else pays. If they have more than you, it’s ever fairer. Now that home ownership has risen to 70%, people have borrowed $1.3 trillion in mortgages, and the savings rate has plunged, our leaders know the time is right to cause division and stoke envy. After spending nine years in the House of Commons and the backrooms on Parliament Hill, I know. Power comes first. Responsibility second.

But, despair not. This blog is here to empower you, not induce suicidal thoughts. That’s what Costco and Drake are for. So instead of thinking you can build yourself up by knocking someone else down (the Lib-NDP-Screwed-Millennial way), why not just advance? One great way of doing that is to invest.

On Tuesday the Fruit People, formerly known as Orange Guy’s Shorts, released the results of a survey showing just how beaten down most Canadians have become. Incredibly (it says) only 4% of Canadians have ever seriously considered opening an investment account. Why? Not because they fear losses, but rather since 70% of all these dispirited beavers believe they don’t have enough money to invest.

And here’s another report proving what a mess children make of people’s brains. Just out, it shows 53% of parents think their adult kids are dependent on them. Almost 40% will hand over house money to their spawn or finance college even when it means kissing off retirement.  “According to the results,” says the Financial Planning Standards Council, “assisting their ‘big kids’ with post-secondary costs will postpone the retirement of 45% of respondents and prevent 46% from paying off their debt.” By the way, guys (at 44%) are way more willing to put their kids into real estate than women (32%). So much for the nesting myth.

So why would having offspring – which people have apparently done for some time – be putting a “financial strain” on almost half of all parents? Why can’t people manage to have a job, raise a family and still have enough loot saved after six decades of life to stop working?

You already know.

Years ago when I was traveling the country speaking on behalf of financial dudes, banks and fund companies, the gigs took me everywhere. Glittery ballrooms. Church basements. One night I walked into a hall in a remote, dusty burg in southern Saskatchewan to talk to a few hundred dour-looking locals. The advisor sponsoring the event told me how much money she looked after. A staggering amount. “Huh?” I said, meaningfully. And she explained – in a place where real estate was cheap and debt sparse, people gave their money to her (after buying some new cows, of course). No retirement crisis there.

The cost of a one-strategy strategy is incalculable. Debt’s off the chart. House prices inflated. Families stressed. And if property values don’t hold, millions of wrinklies will be pooched. People who have relied on real estate only to build net worth must liquidate it at some point to survive. What a crap shoot that can be – as we’re learning. Without balance, diversification or (often) liquidity, risk ignites.

The sooner you stop fawning over house, believing politicians or caving to your kids, the better the outcome. Tomorrow, a small refresher course on the better way.



Steve’s a baby realtor. Hey, it’s hard enough living on commish in a market nobody actually understands. So why is the industry actually making it harder?

“So Garth,” he says, sarcasm building, “thought you might like this little nugget of transparency from my local real estate board, TREB.  Just saw this on the newswire.  Very happy as a new realtor to have such easy access to valuable market data…certainly nothing to do with catastrophic sales figures…”

Here’s the news – on a Monday when 45,000 local agents always used to get a snapshot of how the market was doing, so they could properly guide their clients. No more. Shhhhh. It’s a secret.

As you know, days ago financial analyst Shafquat Arefeen was spanked by realtor lawyers for using MLS data to create a visual of delusional Toronto real estate on his site. Fearing a law suit, he folded. Shaf was the latest citizen to be bullied and silenced. Meanwhile GTA realtors continue to fight the federal government over making its data publicly accessible (the way Viewpoint does down east). Ottawa says it is anti-competitive and not in the public interest. And now, because they might be “susceptible to volatility” the local cartel has punted mid-month stats, robbing agents and buyers of one more tool to ascertain market trends.

Meanwhile the results of keeping consumers ignorant and house horny continue to pile up. Last week it was StatsCan showing we’d achieved new levels of household debt. Then the payroll dudes showed up to report half of us live paycheque-to-paycheque, thanks to insane debt service costs. Now the Bank of International Settlements (BIS) has a new warning – that along with China and Hong Kong we’re at risk of a financial crisis, thanks to real estate. Great. Just great.

The amount of credit relative to the economy is indicating “stress on the banking system, which can lead to a financial crisis” thanks to “property price ratios above critical threshholds.” And as all this bleating goes on, we stare at higher interest rates. The US Fed won’t move this week, but economists figure there are three more increases coming in the next year, with rates peaking in 2019. As we now know, our central bank has turned hawkish and it’s expected a full 2% will be added to its current rate – tripling it within two years.

And did I ever mention the universal 2% mortgage stress test coming this autumn? Or the slaughter of two million small business owners planned by T2 and Wild Bill?

Well, there is a role for realtors to play these days, and it’s not to shield citizens (or agents) from information. Real estate is not only the largest outlay most people ever make, but also the most emotional. Scores of buyers overbid in late 2016 and early 2017 because the industry breathlessly report romping price gains and suggested they’d continue. Now it is silent on an epidemic of failed deals, tens of thousands of price reductions, a collapse in offers and the rapidly changing sales mix. Fearing the truth will propel things further into the dust, industry leaders maintain a fiction. Makes you wonder how many poor moisters will get stuck on the web of deceit.

Maybe Steve should go into something more secure. Like Audi repos.

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Before the following is posted on the usual employment and financial sites, you can let me know if you’re interested.

We’re looking for an ace assistant. The work is detail-oriented with careful attention required to documentation, client service and regulatory processes. You need a heart as well as a brain, since we often deal with the life savings of people who look to us for care and support. This is one of the top-ranked financial practices in North America, so there’s ample opportunity as well as responsibility. The position is entry-level, but essential. Best suited to someone with ambition, financial literacy and formal training or experience in the money business. Turner Investments is part of Raymond James, the country’s largest independent financial institution. Full-time position, in the heart of Toronto’s financial district. Extra points if you like dogs.

Send me your stuff: [email protected]