Mashed in Mississauga

miss-condo1

The doctor is IN. The first patient today is Samuel, who suspects he’s screwed.

“I am writing you in some distress,” he emails me. “I was advised of your blog and began reading some of the articles, postings and comments a few months ago.  Recently I read your book After The Crash.  I have a 2 bedroom condo in south Mississauga,  93,000 mortgage 20 year amort var at 2.3% till 8/10, $550 for condo fee and taxes, and a $4,000 loc at 7% limit 6,500, one year 1,333 loan, 41,000 salary, 25,000 in RRSP/DPSP and no cash.

“In this position I was under the impression that you were talking about other people that were going to be in trouble.  Well at my building there 15 black lockboxes visible outside for an agent to get the key in a 161 unit building, they are listing for around 155K.  They have all been there for 4 months now!!!

“At my church and at the rink layoffs and 4 day work weeks are the norm.  Now it’s about me!!!  My boss confronted us about a possible 20% pay cut as our revenue is off 35% in February.  It’s really great the government allowed 25,000 from the RRSP for first time home buyers in this budget but when bought in ’04 I put down the 20,000 and had to get a loan for $1,333 for the repayment this year as there was nothing for my year end bonus.  To get the Government to waive the repayment for ’09 and allow people that already bought to use their RRSP against their mortgage for at least the 5,000 that new buyers already get, what would a citizen do?  Who do I ask?  How do I come out of this with my good credit rating and roof a over my head.”

Well, Sammy, let’s do some counting. Your mortgage costs you about $500 a month, condo fees are $550, utilities and gas maybe $300, for a total of $1,350 a month. You have assets (including equity) of about $85K and non-mortgage debt of less than $6,000. And no cash.

You make $41,000 a year – which in Ontario after taxes will give you $2,850 a month. Deduct your living costs, utilities and fuel, and you have $1,500 a month left. So, Sammy, where is it? Okay, okay – groceries $500 a month, which still leaves a thousand bucks. LOC payments at prime plus two on $4,000 are peanuts – a hundred bucks a month will pay that down quickly. The other nine bills?

The point here, Sam, is that (a) your chances of selling that concrete box are challenging with 15 others already listed in your building and (b) you’re about to lose 20% of your pay, or five hundred bucks in take-home dollars. The answer to your problem is not whining to the feds to let you siphon another five thousand out of your RRSP, but to live within your means, even if they suck.

So, do a budget, Sam. Every dollar. Balance your income and expenses assuming that pay cut (damn deflation) happens. Then think about what you’d do if your job evaporated. If that’s a serious possibility, do something about it. Should you sell the condo, despite the competition, then rent for about the same amount as your current carrying costs? Well, consider the alternative. If your income does crash, you’ll have to live off your RRSP for a year or so until it vanishes. That will be about the time your mortgage comes to term – which will not be renewed if you’re jobless. In that case you’ll have to sell, no matter what price you get.

Yes, then you’re screwed.

You have $60,000 in that condo, dude, no cash and you’re writing a blog. This shouldn’t be too hard to figure out.

84 comments ↓

#1 Paul Martin Jr - You can buy - but not able to sell this decade on 03.13.09 at 10:19 pm

One reason you can’t get a mortgage
http://money.cnn.com/2009/03/13/real_estate/appraisals_getting_harder/index.htm?postversion=2009031315

Counterfeit coins slip through eBay’s electronic web
http://www.financialpost.com/personal-finance/story.html?id=1313282&p=1

#2 tightwad on 03.13.09 at 10:30 pm

first!

Sammy.. be frugal, very, very frugal!

#3 Bill-Muskoka (NAM) on 03.13.09 at 10:33 pm

Garth,

He sounds like an average person, i.e., Canadian, who is trying to make the best life possible?

He has no control over the market pricing, or the insanity the RE investors have dumped on the general populance.

Are you portraying a Rick Santelli on this honest person?

#4 Da HK Kid on 03.13.09 at 10:34 pm

Yup, Garth is bang on! Kraft Dinner is Kool! Hunker down and keep costs low and ride it out. Condo fees $500 wow.

Anyhow worst case take on a roommate, some are likely available. Do it now to improve cash flow savings and likelihood of worst case scenario…a lay off!

#5 Paul Martin Jr - Ontario: 8.7% UNemployemt on 03.13.09 at 10:34 pm

I am the single one noticing less crowd on Toronto subway line, even at rush hour? HERE’s WHY:

Ontario Unemployemt 8.7% and counting – go buy a house, have fun friendelo! Suckers Wanted!

You have a better chance swimming with the sharks

February unemployment rates by province
http://network.nationalpost.com/np/blogs/fpposted/archive/2009/03/13/february-unemployment-rates-by-province.aspx

#6 Kurt on 03.13.09 at 10:39 pm

Sammy, you’ve listed only your financial resources. Think also about your social resources (usually family, but sometimes friends.) I’m not saying “go hit them up for money”, but people can provide both practical and moral support, everything from care packages to cut down on food costs (thanks, mom!) and transportation (for example: “I’m doing a trip to Ottawa and I know you’ve got family there…”) to sounding boards who know things like your risk tolerance to your ability to self-discipline. Good luck!

#7 Puzzled on 03.13.09 at 11:00 pm

Dude, buy lottery tickets, cause you can’t win if you don’t buy them.

Get a part time job, when i was school age I milked three cows before walking five miles to school every morning.

#8 Glenn on 03.13.09 at 11:02 pm

This guy needs some perspective. Take him to the local homeless tent city, or better yet, a veterans hospital. The amputee ward would be the best place to start.

#9 Cash is King on 03.13.09 at 11:10 pm

2 postings this week of Garth telling someone to “act their Wage!” Budgeting, balance every dollar, cut back on expenses and reduce debt.

Garth Turner and Dave Ramsey – Seperated at Birth?!?!?

#10 Shawn on 03.13.09 at 11:14 pm

Yeah, Sam is okay as long as he budgets hard. Forget putting time into changing a government policy.

Work hard, think about anything you can do to pull in revenue for your company and to retail customers.

Maybe get a second job for a while. Save some money to get breathing room.

After getting loans paid down sign up for night courses, they are cheap. Improve your employability.

Lower prices on the condos in the building are not of any real relevance as long as you do not plan to move.

There will be jobs for people who can work hard and make money for an employer.

#11 Average guy on 03.13.09 at 11:28 pm

Samuel is in a tight spot and unfortunately many more Canadians are about to join him. The time for contemplation has passed. Now is the time for action while there is still something left to salvage. Let’s just hope that the European investor who just purchased 30 homes in Detroit for $150,000. isn’t HERE 2 years from now looking to add to his portfolio in Milton or Windsor.

#12 kc on 03.13.09 at 11:46 pm

here is a 13 minute showing on youtube of how the homeless live in cars or anything that they can feel safe in. The stories of these people are the ones who lost everything in the fall of the housing foreclosures. worth the 13 minutes…. how far are Canadians?? how many are 2-3 paychecks from BUSTED?

Death of the American Dream? – USA

http://www.youtube.com/watch?v=-0y-SWdbGRk&NR=1

#13 Grantmi on 03.13.09 at 11:57 pm

Jump!!

#14 MBS-guru on 03.14.09 at 12:45 am

who’s going to buy a condo with maintenance at $550 a month?. That’s $6000 a year down the drain on a small condo. That’s insane. I don’t think i spend more than $2000 on maintaining my 2200 sq ft house per year.

#15 [email protected] on 03.14.09 at 1:02 am

G&M does good job sometimes…

http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wsubprime14/BNStory/Business/home

Carefull with ur real estate portfolio folks! A tsunami is on the way.

#16 cs on 03.14.09 at 1:13 am

From where I sit, you sound like you are in a pretty good place. Low mortgage, low mortgage %, money in your RRSP’s – as far as the payback goes, it’s not a huge deal. If you can’t pay it, it simply is considered income for that year of your taxes. It doesn’t get treated like a regular bill, it doesn’t hurt your credit rating if you don’t pay, they simply consider it income. Your $1333 will simply be tacked on as income to what you made that year. I found that to be w-a-y less painful than getting a loan for it. What Garth said about ‘where’s the rest’ is bang on – figure out where your cash is going, cause you should have a fair amount left every month. Find it and save it!

#17 dd on 03.14.09 at 1:13 am

Ya … the in thing … living within a budget.

#18 victoria reader on 03.14.09 at 1:26 am

Finally the globe and mail reports on what you’ve been talking about. http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wsubprime14/BNStory/Business/home Where did we as canadians learn to be such bad consumers.

#19 David on 03.14.09 at 1:30 am

More on Canada’s sub prime dity secrets.

http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wsubprime14/BNStory/Business/home

#20 HalifaxFamily on 03.14.09 at 5:10 am

Try some frugal tips. Cut the speed of your internet down and look up frugal living on the internet. Good luck!

frugalistas.blogspot.com could be a place to start!

#21 HalifaxFamily on 03.14.09 at 5:10 am

Try some frugal tips. Cut the speed of your internet down and look up frugal living on the internet. Good luck!

We’ve started such a blog, as our family has been quite frugal and find it quite satisfying. We’d like to share it with the rest of you!

frugalistas.blogspot.com

#22 Jim Cramer on 03.14.09 at 5:52 am

Sell Sell Sell Sell

#23 Riveted on 03.14.09 at 6:23 am

I’m a renter and am feeling pretty lucky these days, but have a sister who owns and is in negative equity – was even before the crash. The more I read this blog, the more I worry about her and her family. Her and her husband are well-paid professionals in fairly secure industries (law and health care). They bought in an inflated market for $300,000, added $60,000 in renovations to their mortgage, and now live pretty close to break-even. Based on other homes that are listed on their street, they might be able to get $260,000 today if anyone’s buying.

When their mortgage comes due, will the decreased value of their home and their negative equity impact the renewal? If they have secure jobs and plan to stay in the house for the next hundred years, will their equity situation matter at all?

#24 canuck on 03.14.09 at 6:52 am

Garth, by my figures he’s not that well off if his employer reduces his earnings by 20% = 41,000 is reduced to $32,800, less 20% fed/provincial taxes from his pay, less: 550 condo/taxes, 345 hydro/gas/telephone/550 groceries including extra milk and bread/500 gas for vehicles, 208.33 home/car insurance, 40 Internet, $150 other loans, credit cards and bills = $143.34 for spending month for the month. He sure as heck better not be a smoker and/or drink more than a couple of cases of 12 of beer/month.

He’s on the fringe of not having enough revenue versus expenses. He doesn’t say whether he’s married. Perhaps he should think about renting a room to a boarder to offset the cost of expenses?

Please provide a breakdown of your figures.

#25 Brian Poncelet, CFP on 03.14.09 at 8:27 am

Hi Garth,

Your readers have put some links today’s (March 14th) Globe & Mail sub prime mess “Made in Canada” (my quotes)

I can tell you as a financial planner helping people with their mortgages the big banks were also easy on people’s credit mortages etc. than they are today. some mortgages that 18 months ago which would have been approved are not today.

The banks may change their ideas of credit worthiness but they (mortgage specialists) have to have their mortgage applications audited often, within in the bank. I don’t know if the mortgage brokers have their applications audited or how often. I believe this would stop or at least slow down problems like this.

regards,

Brian

#26 Toronto C9 Renter on 03.14.09 at 8:51 am

Unremarkable scenario.

Biggest financial risk for “Sam” is job loss, just like 90% of the people on the planet.

Yawn.

P.S., is this typical of condo fees? $550 additional expense for a generic condo in Mississauga seems outrageous — at today’s interest rates that would pay for $100,000 to $150,000 of additional mortgage

#27 Real Estate Deal or No Deal on 03.14.09 at 8:57 am

Sounds like it is an older condo building with such a high condo fee.

The high condo fee and increased mortgage interest rates in the future will kill the resale prices and they will come down significantly leaving many upside down.

I agree with Garth, but honestly on this one … get out now even if you take a bit of a hit … you are gonna take a bigger one later.

#28 David Bakody on 03.14.09 at 8:57 am

#18 victoria reader on 03.14.09 at 1:26 am

#19 David on 03.14.09 at 1:30 am

As posted it now appears that All of Canada and the world know what Danny Williams said about Steve Harper a couple of years ago and why he had ABC plan ……. Harper lies!

I understand and appreciate that governments must take the high road ….. “BUT” to go out and trash people who dare speak the truth with public facts is wrong. If more people were made aware of the true facts of Canada’s mortgage market and pending re-structure to the entire work force they could have weather the storm with more self confidence ….. Harper’s plan of steaming full ahead on the “SS Conservative Titanic ” when given all this notice last fall only to add another course to the menu and extend the bar hours was not only a total lack of leadership in time of need but disgrace to his oath of office to serve the Canadian people. I will suggest that those who continue to champion his cause (s) do so because they are dependant on his purse strings, Fine, but you do so at your own peril, do not blame Paul Martin, he never would have allowed 40 yr mortgages ( with no money down/job) or lowered the GST and the $12B + $3B was real and open for public audit. Where`s the MSM on these fact`s I remember Paul`s words like it was yesterday ” Stephen Harper’s Canada is much different than mine” be careful what you ask for (36% ers) you just might get it! (sad part is we all got the shaft).

Recovery:

There are hundred’s or acre’s full of unsold cars, there warehouse after warehouse full of manufactured item’s and there are going to be millions of people who’s health/diet/exercise/mental state/ and standard of living will be greatly effected …… and what did we hear from he has not passed a mirror he did not like …..”Let’s get tough on Crime” so I ask you already should the government not be thinking about all of the above first! When we snap out of this ( and we will) greed will set in once again as those who lost are now thinking of sneaky ways to recover their looses big time …. and pronto. So please keep us posted Garth, big business and the MSM may have given you the cold shoulder by many more each and every day take in your words …. make notes … and look not only on North American blogs/news but around the world …. speaking of which China now has serious concerns of the true value of American Bonds >>>>>Hello????

#29 David Bakody on 03.14.09 at 9:01 am

above should read: cold shoulder, “but” many more.. in last 5th line.

#30 Real Estate Deal or No Deal on 03.14.09 at 9:07 am

Check out the link to a G & M article today talking about Canada’s Sub Prime Mortgage Mess …

http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wsubprime14/BNStory/Business/home

#31 ThumbsUp on 03.14.09 at 9:28 am

$550 condo fee?
Does not matter how much $ Sam takes home, three words: sell, sell, sell!

#32 Velocette on 03.14.09 at 9:58 am

It is still high, but that Condo Fee most likely includes electric and gas as well as building insurance.. That changes the math a little but this guy will still be living tight if he takes that 20% hit but people need facts before they start giving advice..

#33 Joe Realtor on 03.14.09 at 10:08 am

Garth I seem to recall you attending some meeting with some hot shots at it, including a prominent developer named after an animal. You didn’t come out and say it but I figured it was Brad.

He produced an insert in a newspaper here in Toronto in which he’s claiming that prices are going back up, buy now! and if you don’t buy before the end of the year, you’ll have “missed the boat”.

And they say Madoff is a sleaze. Guess someone has a lot of inventory to move.

#34 DG on 03.14.09 at 10:27 am

To everyone commenting on the high condo fees: these seem to be the norm in the GTA. It’s quite common to see new buildings with lots of facilities that no-one uses (swimming pool, gym, concierge) with fees of $800+ /month. And on the flip side you have new buildings where the fees are artificially low, partly I’m sure to lure buyers in, when they will have to be inflated within a couple of years to ensure a large enough contingency fund.

I’m currently renting a brand new condo in Toronto, and the quality of construction is so bad it defies belief. Without major investment, this building will quite literally be falling down within a decade, so it’s either high condo fees or lots of special assessments. All of which make the arguments about owning vs. renting in the current market all the more specious.

#35 Popeye the sailer man on 03.14.09 at 10:35 am

Condo fees in condos or town homes are the main reason I stay away from that product. Even in 2001 when I bought my first place after my divorce I could not afford a SFH and I knew fees where like a second mortgage payment, I ended up getting a half duplex, where I had control of expences. I have also noted in the last 4 years in Shawnigan lake a housing area with SFHs that shares a common property like waterfront and dock take longer to sell and don’t sell for much more or at par with houses with no such access. There condo fees are really low, but so is there common funds. I personally will shy away from anything that has condo fees, and strata meetings.

Thats my View!

#36 lgre on 03.14.09 at 10:47 am

unfortunately condos are a liability not an asset..as the fees increase the price of the unit decreases.

#37 Calgary37 on 03.14.09 at 10:53 am

NAU Update

Updating The Militarization
And Annexation Of North America
By Stephen Lendman
3-13-9

“The title refers to the Security and Prosperity Partnership of North America (SPP), also known as the North American Union – formerly launched at a March 23, 2005 Waco, Texas meeting attended by George Bush, Mexico’s President Vincente Fox, and Canadian Prime Minister Paul Martin. It’s for a tri-national agreement, below the radar, for greater economic, political, and security integration with secret business and government working groups devising binding policies with no public knowledge or legislative debate.

In short, it’s a military-backed corporate coup d’etat against the sovereignty of three nations, their populations and legislative bodies. It’s a dagger through the heart of democratic freedom in all three, yet the public is largely unaware of what’s happening.

Last April, New Orleans hosted the last SPP summit. Ever since, progress may have stalled given the gravity of the global economic crisis and top priority need to address it. Nonetheless, what’s known to date is updated below plus some related information.”

Read the rest at:

http://www.rense.com/general85/enen.htm

Power to the People. Let the Revolution Begin.

#38 Alberta Ed on 03.14.09 at 11:00 am

Breaking News: The G&M has just discovered Canada’s sub-prime secret!!! I wonder what organ their heads have been up for the last two years.

#39 dd on 03.14.09 at 11:09 am

#34 Popeye the sailer man

“I ended up getting a half duplex”

How has your experience been with the half D?

#40 LS on 03.14.09 at 11:09 am

Everyone is mentioning the high condo fees, but what about the high grocery amount? 500/month just for groceries is insane. In the past 5 years I’ve spent from a low of 180/month when living with more careful roomates, to about 300/month now. And that’s not ramen noodles. That’s real food including fresh fruit and vegetables, etc. Where’s all this money going for groceries? Stop buying ready made frozen meals and learn to cook. You’ll save at least 200/month

#41 Renta on 03.14.09 at 11:10 am

http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wsubprime14/BNStory/Business/home

“A Globe and Mail investigation into more than 10,000 foreclosure proceedings has uncovered a burgeoning subprime mortgage problem that many, including Prime Minister Stephen Harper, have insisted does not exist in Canada.”

#42 dd on 03.14.09 at 11:13 am

#33 DG

“with fees of $800+ /month.”

I rent in downtown Calgary for $1500 (2b and 2b 850 sq feet). The condo fees are in thte 400 plus area. The place was built by West Point … terrible construction for the current market value.

#43 dd on 03.14.09 at 11:16 am

#20 HalifaxFamily

“frugal living”

Ya .. the new in thing. I don’t know what got people to borrow like there was no tomorrow.

#44 dd on 03.14.09 at 11:18 am

#7 Puzzled

“Dude, buy lottery tickets, cause you can’t win if you don’t buy them.”

Excellent retirement plan. What other financial advice do you offer?

#45 SSS on 03.14.09 at 11:23 am

Garth, if Sammy has kids and wants to rent a reasonable place, it may cost him the same as his current monthly payments. I would suggest to Sammy that why are you worried about the devaluation of your property? Why don’t you just do something about increasing your income, like starting a weekend job?

#46 dd on 03.14.09 at 11:35 am

#12 kc

Thanks. No matter how people landed on the street you can see something could and should be done to turn things around. All those vacant houses that will just go to dust if not maintained and all those people in cars or on the street without houses to live in.

I agree with on person interviewed that all should be done to keep people in some form of housing.

#47 Ghost of Tom Joad on 03.14.09 at 11:57 am

If you want to save money and you’re a guy, don’t get married. The reality is that many women live in a fantasy where they believe they need to have kids. But now is not the time to engage is foolish fantasy. Things are going to get worse and fantasy time is over. Guys, don’t commit to a life of hardship. Stay free and single and you’ll survive anything.

#48 kitchener1 on 03.14.09 at 12:03 pm

In the GTA $500 is quite common for a older condo, probely a 1 bedroom.

What a lot of new developers due here is that they originally have a low condo fee to draw thebuyers in after 1-2 years they raise it by $100. Thats the one problem with condo’s. I have friends that have 1 bedroom condos who pay between $385-410- these are 1-3 year old condos. In comparison when averaged over a year I pay approx $70/month for hydro and 80/month for gas.

#49 Jon B on 03.14.09 at 12:07 pm

Thanks for throwing this one out to the “Blog Dogs”. Sam, you’re living beyond your means. Stop now while you’re ahead, get a budget in place, get some real expectations about living within your means and then implement them.

#50 kc on 03.14.09 at 12:40 pm

Here is a good follow up to that G&M article about our growing forclosure probs…. this is proof about why Garth makes the claims that he was run out of office for being truthful about 0/40.. this article shows how Canadian officials rolled to pressure from our southernly buddies… written a couple months back

Special investigation: How high-risk mortgages crept north

http://www.globeinvestor.com/servlet/story/RTGAM.20081212.wmortgage13/GIStory

#51 Misery-saga on 03.14.09 at 12:41 pm

To #57 Lisa from yesterdays post….I too rec’d a letter from CIBC re: my LOC rate going up. Like you, I am pissed. I understand what you’re feeling. It’s more of a moral issue as the overnight rate is 1/2 of one percent. The worst part is they indicated in the letter that they are passing on the higher cost of financing – so much for Monetary Policy and what an insult to the intelligence of the Banks clientele.

I have no idea if there is anything one can do. I called my bank and vented; sent them a note advising them that I am shopping around for another bank – which I have started to do – for all my services. I told them not to contact me unless they are doing so to let me know my rate is being put back down to the original level; otherwise I will become justifiably rude. Every time I see their annoying ads on TV, posters and billboards it ignites my frustration. As if they didn’t learn from the $35 TD inactive fee fiasco earlier this year.

As for Misery-saga, I moved here; renting at this time after owning for 10yrs. They pump the area with all the condos as ‘CityZen’ and luxury-living – what a joke. The building are poorly cared-for, they’re dirty, all the maint. fees are high, they’re cutting services, their are fire alarms in the middle of the night, you can’t control you’re own unit temperature, the common areas are not finished, the parking lots can’t handle the traffic (17mins to get thru the ‘security’ gate last evening). I am waiting for this place to go POP seeing all the BMers making their way to tiny parking spots of these units – not sustainable. There are flyers everyday from the numerous pumpers around here with colourful charts showing how unit prices are still going up. You can see the stress of the people; it’s getting to them. Yelling at each other and confrontations in the parking lot line-ups!

I find comfort that, I don’t own one of these ‘Ghetto Fabulous’ trailer-parks in the sky! (Garth – feel free to use that one)

#52 rory on 03.14.09 at 1:02 pm

My first reaction was not about Sam but how you try to keep your company viable – when income drops one choice is to reduce expenses by making hard choices.
Which brought me to thinking about GM – mgmnt appears not to be making the hard choices and the Unions are basically saying hell no …what would have happened if the Unions were told 20% off on everything including pensions instead of the watered down cuts they did accept …you can argue a good case for Unions in that they got and won watered down concessions but the inflexibility in times like this are a huge liability and taking them down …IMO.

#53 Increasing that 1% on 03.14.09 at 1:24 pm

#46. Ghost of Tom Joad

“Guys, don’t commit to a life of hardship. Stay free and single and you’ll survive anything.”
—————————————————-
Why leave out the ‘Gals’, Ghost, this can definitely apply to them too.

#54 Marc on 03.14.09 at 1:36 pm

#46 Ghost of Tom Joad on 03.14.09 at 11:57 am

My impending divorce is costing me more then the marriage ceremony. Oh the ironing.

My wife had wanted to enter the housing market since we were dating. I told her we had no money for downpayment, so could not look right now. We saved for 4 years, paid off her student loan debt, and had about enough to put 20% down on an average cost house in Lower Mainland. She wanted to use it and buy a place. I told her prices were too high, unaffordable mortgage payments, and we will wait with cash in hand for the illusion of wealth to burst. Her friends had all bought condos, rode the equity balloon up high, and started to spend the equity by taking out home equity loans. Her friends had it all or so she thought. In Sept. 07 she took a job as a corperate cell phone rep. Part of her job was selling cell phones to realtors. We can see where we are going here. In Oct 07 she went behind my back, took half our savings, and bought a condo. I had no idea, but in future I will have better access to my bank accounts. Her downpayment is eaten up as the condo lost value almost the day she closed. She pays her mortgage with her LoC, and pays to LoC with her income. I pointed out to her, she is double paying interest, and is being foolish, as she should use her income to pay the mortgage, and if need be draw on the LoC if she needs it. After I found out, I went to a lawyer to start divorce proceedings. it cost us 3K to get married, not including the rings, that if she gives back I will hauk at the local pawn shop for 20 cents on the dollar.

Now she wants half of the money she left behind. She wants me to pay half the mortgage, yadda yaddda. I told her to pound salt, and will wait to see how this turns out. Epic life fail on my part, but I learned my lesson.

Married life was not all its cracked up to be, but I have found a great woman to spend some time with, but have told her I do not intend to do this dance again so common law or splitsville.

#55 JO on 03.14.09 at 1:45 pm

Condos will be the worst performing sector in RE over the next 5 years…it will get to the point where many will want to sell, but no one will want to buy..or any offers will be for 20-30 c/$…I am just waiting for the hordes of stuck homeowners, most of them who bought with little or no down payment in the last 3-4 years (thanks to government enacted credit ponzi schemes such as CMHC and the funding from CDIC insured deposits), come knocking on the gov’t/taxpayers door for handouts or special treatment…while i do want to see everyone have a home and doing well, renting is the most sensible thing to do…and that is what many of these people ought to do. A 30 % decline in housing is a given by 2012..and 40 % is quickly becoming more and more likely because of the crazy and pathetic “stimulus” and bailout nonsense our leaders are engaged in.

As usual, those homeowners who bought when prices were “normal” (around 3 times income) and made larger downpayments and kept paying their mortages, and also those who were prudent to have rented in order to avoid paying 30-40 % more for shelter will be hurt….people who bought with less than 10 down and lived above their means will probably get most of the taxpayer dough as is the case in the US…go figure…welcome to socialism..fraud that it is..

I am going to start withdrawaing my RRSP as i recently got a new job that pays me almost 30 % less…registered plans contain provisions that allow the gov’t to dictate what you can own in the account..while this is a major risk in the US and a very low risk for now in Canada, US savers need to be wary of the risk that the US gov’t, likley during a panic phase that entails a bond market collapse and flight of foreign investors, will simply force all registered plans to buy only US TBills….bingo..there is the effective seizure of your 401K..they will make it sound like a benefit to the account holders too..risk of this in Canada is very low at this time, but it is not zero.
JO

#56 poorguy on 03.14.09 at 1:50 pm

“Central bank ditches economic rebound prediction”

http://business.theglobeandmail.com/servlet/story/RTGAM.20090314.wg20wrestle0314/BNStory/Business/home

Hee Hee Mark! I knew ,You gonna do it.

#57 JO on 03.14.09 at 1:59 pm

The 401K seizure press release/announcement:

“Mr.Speaker, The people of COUNTRY have been let down by capitalism, let down by the markets. They are right to be angry. Dreams have been taken away, and people want answers. Citizens look to their government to protect the national interest..and protecting retirement assets and savings must and is a priority of the governemnt of COUNTRY. In light of this, the government of COUNTRY will, effective immediately, allow only governemnt TBills/obligations to be held in REGISTERED plans. THis will ensure that our citizens retirement assets are secure and not subject to drastic losses as has been the case until now. And in order to make sure our citizens have access at the time they most need it, an early withdrawal surcharge of 50 % will be included for all account holders under AGE (a surcharge may be left out of this announcement, but added suddenly in a budget under the need for high taxation).”

Something to this effect is entirely possible in the US, and maybe one day in Canada (very low risk at this time). Within 6-12 months of this announcment, the country’s currency will likely be heavily devalued..and high inflation will eat up most of the money over 3-5 years..assuming high inflation (most likely at some point after the deflation) and not hyperinflation..if big brother does this, consider it theft of your savings..savings you were lucky enough to accumulate after paying total taxes/inflation over the years of roughly 50 % of your gross income..welcome to democracy..there is no such thing as true democracy, and free markets in a debt based, fiat money, fractional reserve system where a country’s currency is in the hands of a central bank.
JO

#58 Popeye the sailer man on 03.14.09 at 2:16 pm

#38 dd

The half D was good and I could have started my current new family there, but I meet my new wife and moved into her condo, we later sold both and bught a SFH in Shawnigan lake 6BR 2600sf inc a 1300sf suite which we rented for a bit. It is just sold, closing on April 1st (greater fools day) and we are renting near a school where our daughter can get the help she needs for her Autism. Spruce Grove Alberta. We plan to buy again but we are taking our time for things to at least settle a bit first. Maybe this fall!

#59 Shifty on 03.14.09 at 2:21 pm

Only in Victoria

http://www.timescolonist.com/Health/offers+give+vasectomies+UVic+super+fertile+rabbits/1387961/story.html

#60 Calgary37 on 03.14.09 at 2:27 pm

THE STATE OF THE CBC

On Saturday, March 14, the National Post has published the first of a week-long series that will take stock of the CBC and asks the question: “Where does it go from here?”

For those of you who only have access to their Website, look for articles by Conrad Black, George Jonas and Craig Offman.

I agree with much of what Conrad Black says in regards to the CBC. As it happens, I have a comprehensive plan to restructure the CBC in a way that would make it one of the most watched television networks in Canada at the end of 3 years. If Mr. Black was still operating in the business world and not in prison, I think we could have come up with a suitable plan that he would be willing to help fund.

In addition to the current 1 billion dollars for yearly operating costs, I would need an additional 500 million to use for creating new content. If PM Harper was really concerned about the future welfare of Canadians, he could turn the control of the CBC over to me for a period of 3 years.

In the 1930s Depression, the populace got their entertainment by going to the movies that were very inexpensive at that time. In this current Recession, the populace will be looking for entertainment on their TV sets, but they will find it lacking. Most of the TV networks have been cutting back on their spending for real entertainment shows in favour of reality type crap.

In my proposal, jobs would be created for musicians, singers, dancers, actors and production staff. At the end of 6 months, I could have some musical variety programs ready for viewing. New drama programming will take longer. I will even try to provide a variety of news content from around the world. The many immigrants that have come to Canada over the past 20 years will finally have a reason to watch CBC-TV.

Anybody who is stuck at home watching TV will have something worthwhile to watch on the new CBC.

Enjoy.

Power to the People. Let the Revolution Begin.

#61 Grumpydawgs on 03.14.09 at 2:28 pm

This guy is right on the edge of a precipice. If his employers revenue is down now then in all probablity the recession will make it worse. This guy has a very real chance of losing his job and then his life becomes a house of cards. The depth and duration of this recession will determine his future which is curently tenuous at best. So many people are in the ‘one paycheque away from disaster’ situation. His best move now would be to sell before disaster overtakes him and he loses everything.

#62 Sun Yat-sen suit on 03.14.09 at 2:37 pm

I could not live in Mississauga. It has no character. I think soon it will be back to the 80’s where you had to watch out in public for viscous, paranoid Mississaugans looking to deal out unprovoked violence on your passing personage. There is something in the water or the air there that makes people flip their lids.

Believe me I speak from experience – squirrel bite town.

#63 David Bakody on 03.14.09 at 2:40 pm

From the G&M

Speaking to reporters at the Group of 20 finance ministers meeting in Horsham, Bank of Canada Governor Mark Carney hinted strongly that his last forecast for 3.8 per cent growth in 2010 is no longer valid. “Clearly the risks are breaking to the downside,” he said, referring to the string of grim Canadian and international growth data in recent weeks.

Each and every day we move closer to the fact that not only are Harper and Flaherty’s pants on fire ( poetic Reform justice) there noses have grown to a point they may soon have to sling them over their shoulders.

#64 JO on 03.14.09 at 2:50 pm

Mississauga is a fine city. In fact, it is the best managed city in Canada, maybe even North America. Not saying it is perfect. BTW, check out their financial position, i am no forensic auditor or expert financial analyst, but I read the footnotes and all, and YES, the city of Mississauaga is a debt free city..does not gaurantee anything but long term, it will likely whether the depression much better than most cities..especially socialist Toronto…which will be broke within 2-3 years.
JO

#65 David Bakody on 03.14.09 at 2:53 pm

#59 Calgary37 on 03.14.09 at 2:27 pm

I agree, although many just feel government money saved would go to them ( silly people) the CBC has provided many Canadians with a start to long and fruitful careers and a solid place in our Counbtrie’s history from Wayne and Schuster to Tommy Hunter to sports and documentaries and list goes on. Harper and Co (Reformers) have had them targeted in Lu of Fox TV for years. We can only hope they survive ….. it will be a trick. CBC has and continues to employ and educate Canadians from coast to coast to coast ….. so what in the Sam Hill is wrong with that?

#66 ralph on 03.14.09 at 3:09 pm

“Let us all be happy and live within our means, even if we have to borrow to do it.”

-Artemus Ward

#67 Zoronqueen on 03.14.09 at 3:23 pm

This is the advise I got from a fellow blogger, from Chris in England. I don’t agree with selling, read his advise to me below….

Dear Zoronqueen #56: “I am in shock…. I took Garth’s advise and sold for 18% less than city assessment. Current equity in the new house comes out to be around 48K with the 50K depreciation, as we put 105K down payment, so after all is said and down we have lost 54% in equity. Wow….”

Do not despair, your age is in your favour. 15 years ago we sold our then house (in negative equity) for around £10,000 less than we paid for it but jumped up to a bigger house costing £45,000 more. Obviously we had next to nothing to contribute and had a 100% mortgage plus a loan for at least 7 of the 10,000 shortfall. We also had a young baby and a lot of other expense at the time as we were helping both sets of parents financially.

Fast forward to the present day and our house has more than doubled in value (and I am talking about the current value, not the 150% I could have got a year ago). We bought this house to live in, with no thought about selling it, and it has done us proud. Enjoy your new house and in 15 years time who knows where you will be. It may not double in value but you have something we did not have – awareness. When I think of how much we have paid in mortgage over the years and how little the amount owed has shrunk, it makes me cringe. When I see so many people on here who have paid their mortgage down and become mortgage free in a few years, it makes me realise we have probably paid way over the odds for the measly reduction we see in our mortgage debt.

For us, the fact our house doubled in value is the only saving grace. If we were not leaving the country we would still be faced with a similar debt to the one we took on years ago. We have been lucky, but luck is not reliable. As The Who said: “We won’t get fooled again” (and now I really am showing my age!).

#68 TS on 03.14.09 at 3:40 pm

The following link is for an interesting piece on Canada’s own ‘sub-prime mortgage mess’ that the Harper Conservatives created with their budget in 2006 and tried to fix (when it was too late) in the fall of 2008… and something that continually say does not exist in this country (then why did they bail out our banks to the tune of $75 BILLION you may ask)….

http://www.theglobeandmail.com//servlet/story/LAC.20090314.SUBPRIME14/TPStory/National/

#69 Zoronqueen on 03.14.09 at 3:47 pm

# 24 canuck

I agree with you. Getting a renter would be a good solution. Because if he sold, minus realtor fees, closing ect. He will be in negative equity. Ride it out and when hyper inflation happens, you’ll be ok.

#39

cutting expenses will be a good plan. Such as decreasing grocery bills, maybe selling a car, cutting off a gym membership ect.

#44 SS

Yes, a part time job, or some kind of web based small office job ect. may be the ticket. some kind of trade services idea cash only will be more common as depression/deep recession times….

$46 Ghost of Tom
There may be pro/cons to marriage/children. For instance DINKS can combine income to survive in better times. Children on the other hand are financially good for tax credits, social networking with other parents/family ect in hard times. It is good you already have some support with church, rink (I assume hockey buddies) will come in handy in hard times.

#70 Andrew on 03.14.09 at 4:14 pm

I’d suggest to Sam that he asks some questions of his condo board before going after the government. $550 a month sounds a little much. Perhaps Sam should ask for some documentation regarding where that $’s going or assume a role on the board.

Secondly, he shouldn’t panic. He is much better off than many folks these days. Sam is quite obviously a bright, literate fella (or lady…could be Samantha) and a strong communicator. The fact that he wrote Garth also suggests that he’s resourceful. These are all good things when the going gets tough.

A few things that Sam may want to consider;

A roomate/lodger-Yeah sure, it’s a headache. Just be cautious. Do a credit check and check references. Somebody who’s looking for an interim place to stay would be perfect. Now’s a good time to take on a lodger because it’s very hard to evict in the winter so you’ve got a few months to weed out a problem tenant.

A part time job-Again, it sucks having to spend a day at work and then go to another one. It sucks more to run out of money before the mortgage payment is paid and there’s food in the fridge…or choose between the two. If you can drive a forklift or work in a restaurant you will always be able to find a part time job at night. Make sure that you talk to somebody about your taxation situation though if you’re working two jobs!!!!

The food bank-It’s a last resort but it’s there. My co-workers and I give quite significantly to the food bank. We are lucky enough to live in a society that looks out for each other. I’ve never had to use a foodbank and admit that I’d have a difficult time walking in and holding my hand out but I would if it came down to that or living on the streets. Always pay for the roof over your head first. I know people that have used the foodbank in the past and now make $100 000 plus a year. I sure hope that they give back now that times are good for them. Perhaps I’ll look past social niceties and ask them!

Keep your head up, Sam. You’ll be fine.

#71 HalifaxFamily on 03.14.09 at 4:38 pm

http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wsubprime14/BNStory/Business/home?cid=al_gam_mostview

FYI!!!

#72 Investx on 03.14.09 at 4:44 pm

So the unemployment rates for February came out. It’s odd that the provinces with the greatest unemployment, the Maritimes/eastern provinces, have the most stable real estate. I would have expected different:

Here’s a breakdown of the unemployment rates by province:

Newfoundland and Labrador: 15.1%
Prince Edward Island: 12.3%
Nova Scotia: 8.8%
New Brunswick: 8.8%
Quebec: 7.9%
Ontario: 8.7%
Manitoba: 4.8%
Saskatchewan: 4.7%
Alberta 5.4%
British Columbia: 6.7%

Source: http://network.nationalpost.com/np/blogs/fpposted/archive/2009/03/13/february-unemployment-rates-by-province.aspx

#73 bobs your uncle on 03.14.09 at 4:54 pm

Condos are the yuppie version of a trailerpark.

#74 EJ on 03.14.09 at 5:38 pm

#70:

That article will come as no surprise to most readers of this site, but you only need to take a look at its comments section to see how deeply the denial runs in this country.

There are droves of people who have no trouble believing the government’s, bank’s, and real estate industry’s version of the truth, even when no real evidence is provided or the conclusion isn’t logical. But have someone paint a not-so-rosy picture and they’re all over it, claiming it’s “garbage journalism” or “irrelevant”, even though they can’t really prove otherwise.

Logic and fact is clouded by emotion when it comes to real estate and politics.

#75 Too Old Bob$ on 03.14.09 at 5:46 pm

“#46 Ghost of Tom Joad on 03.14.09 at 11:57 am
If you want to save money and you’re a guy, don’t get married. The reality is that many women live in a fantasy where they believe they need to have kids. But now is not the time to engage is foolish fantasy. Things are going to get worse and fantasy time is over. Guys, don’t commit to a life of hardship. Stay free and single and you’ll survive anything.”

LMAO! you think this is the answer?

I personally know several men who are now in their 40 -50’s who have never been married or had kids.
They spend more than I do going on trips around the world because they are lonely and bored. They also buy the latest cars and gizmo’s (4 computers, 3 sound systems, 40 inch LCD’s in the bedroom, come on!!) $555000 for a house twice the size of mine. One guy goes no where, does nothing and just bitches about everything. The guy is a millionaire a few times over, even after this downturn. They are grumpy and in despair.

I held out as long as I could, but then reality kicked in. I could have married a Teacher, but I thought, why do I need to get smarter, will this help me in the future, probably not. I found a beautiful Nurse. Yes this is what I need for when I get older, not brains. We got married and I already had my 1200 sq/ft house paid off. Yep! we had three beautiful children who cost a hell of alot, but they are worth it, trust me. My wife only worked casual when they were young, just enough hours to keep her registration up. Kids are older now and she can work what ever she wants. With my job and hers we can now enhance our savings and eventually take a holiday (been 14 years since last one). We still live in the original house which is 29 years old. Did a reno to keep her happy. lol Finished the basement doing 90% of the work myself. Plan on living here the rest of our lives. Now the best thing here is insurance. If one of us lose our job or gets ill (hopefully me not the Nurse), we still have the other. Ok! if we both lose or jobs, well that’s alright too. We have saved enough to live comfortably. The point I’m getting at is, that being single isn’t for everyone, yes it’s cheap, sometimes, but if you find the right one (like a lottery ticket) things may work out just fine.
I’m not suggesting Sammy, do this, at least not yet, but getting a roommate or partner may not be a bad idea.

#76 DG on 03.14.09 at 5:54 pm

@Marc (#53): Common-law partners have similar rights to husbands or wives in the event of a separation. If you buy property and then the relationship ends, the other party will have a legitimate claim against at least a portion of the value of that property.

#77 dekethegeek on 03.14.09 at 7:04 pm

#53 Marc
Just be glad you dont have kids or you would be paying for the next 21 years.

#78 anon on 03.14.09 at 7:52 pm

@ghost of tom joad

Yep…I should never have married HIM. Over the course of 21 years, we built up farm, a beautiful McMansion dream home, cars, boats, etc. When things got stressful – he would threaten and hit. I left him but before I could start legal proceedings, he incorporated our farm (house included).

I got blind-sided, and ended up with huge legal debt fighting him and he got everything (approx 8 million).

So yeah, you’re right. I should never have married.

#79 Jeff Smith on 03.14.09 at 8:00 pm

You guys are so easy to be surprised ! $550 is cheap compared to some condos in downtown Toronto along Bay St. Condo fees of $700 to $800 is the norm for a 2 bedroom units. Not joking. Seven years ago, I was going to rent (share) a room off this person from the local university. And the condo owner asked me to fork over $759 a month for the room, because that is to cover the condo fee.

I know of one condo in toronto west end along the lake shore that charge condo fee of $2000/month. But the place has valet parking and all that. Neat! Don’t even need to know where you car is. Wow! I love the idea of that.

**********************************************
#30 ThumbsUp on 03.14.09 at 9:28 am

$550 condo fee?
Does not matter how much $ Sam takes home, three words: sell, sell, sell!

#80 OttawaMike on 03.15.09 at 12:32 am

This new product is surely a sign of the impending apocalypse:
http://tinyurl.com/c8skj5
It’s so far only available in the UK.

#81 Bill-Muskoka (NAM) on 03.15.09 at 9:00 am

#75 Too Old Bob$ on 03.14.09 at 5:46 pm

Well, some would agree with my Father-in-Law who told some gut wretching jokes at our wedding reception. My favourite is still ‘Marriage is a Three Ring Circus’

1. Engagement ring

2. Wedding ring

3. Suffering

LMAO!

Seriously, I am so happy I married my wife. She and I are both individuals still, yet a true team that we know is rock solid.

The fact we were previously married (read that ‘Been through the Grinder’) is a large part of it. There are no delusions, no fantasies, just love and respect between us. We chose each other carefully and wisely. :-) In the process we have healed our families in a quiet and exemplary manner that has produced real functionality for far more than just the two of us.

#82 Marc on 03.15.09 at 3:21 pm

#77 dekethegeek on 03.14.09 at 7:04 pm

No kids is what makes divorce the much better option. I should have done the math before the wedding. A wedding cost $75 for a marriage license, and $125 for marriage commisioner, plus what the couple wants for a ceramoney. Divorce is costing me alot more. The legal proceedings for divorce should cost less then the the legal requirements for marriage in my opinion. I guess someone has figured out how to profit off others miss fortune.

#83 Glenn on 03.15.09 at 10:02 pm

#82 Marc on 03.15.09 at 3:21 pm “The legal proceedings for divorce should cost less then the the legal requirements for marriage in my opinion. I guess someone has figured out how to profit off others miss fortune.”

Divorce should be renamed “relationship tax”. It is a fully planned “fact of life”. But only if you marry a feminist, of which at least 70% of all American and Canadian feminists are.

Imagine for a moment what good you could do within your community and family with that money you are pouring into the family court scam? Before the shock troops of tyranny, feminists, made you a slave that is.

The same loving, caring gov’t that allowed (hoped?) the sub-prime debacle to rear its ugly head also programs the females from birth to hate men and everything men do. The females keep that hatred under wraps till its time to “cash in”…otherwise known as divorce.

We are little more then walking ATM machines to the gov’t, and the feminists. Nothing will change till we stop subsidizing both parties. Good news is, the gov’t is on the verge of collapse and there are 300% more single females in their 30’s then there were in the 1970’s.

You have my honest sympathy. On a good note, my wife has plenty of single friends back in Eastern Europe she could help you meet. So long as you dont drink a litre of vodka a day and never hit them, they will love and cherish you forever.

And, unlike the gov’t and the females, they will actually respect you. What an alien concept in this deranged gynocracy, eh?

#84 Tony on 03.23.09 at 3:50 pm

Our friend from Mississauga better remember the 3 year rule for wirte-offs to do with revenue Canada. If you start showing 3 years or more of losses revenue Canada can send you a letter telling you your losses can’t be tax deducted as the condo can never show a profit. You better hope that never happens.