Ooops.

retired1

Every time I give a talk on personal finances, and mention an RRSP mortgage, the energy in the room rises. Invariably I’m asked how it’s possible to put a mortgage inside an RRSP, then make mortgage payments to your own retirement plan, instead of the bank.

It’s not hard, of course. Nor is it that tough to make your mortgage payments tax-deductible. Either strategy has the potential to radically improve your financial life.

But what makes the RRSP-mortgage thing so sexy goes to the very nature of our biggest honking financial problem: When it comes to retirement, most Canadians are screwed.

About half of us have no dedicated or substantial retirement savings. The average RRSP owner in Canada is now in his or her mid-forties. And of those people who have got money stashed, the median amount is about $50,000. Meanwhile over 70% of Canadians have no corporate pension plan, and the public plan (CPP) was designed to provide just a quarter of the cash seniors need to live on (it pays an average of $6K a year).

Ergo, screwed.

At this rate, the majority of the adult population will suffer a bungee-style drop in income when they stop working. Especially now – after market mayhem and crashing interest rates have gutted or capped savings. The situation’s made more dire by all those damn Boomers – 9,000,000 of them in Canada, comprising 32% of the population. On average, they are between five and ten years from retirement, and that has been pushed forward dramatically by the Great Recession. Lots of laid-off Boomers will never work again. Except in Wal-Mart.

This is a good explanation of why real estate’s turned into an obsession. For people with equity, but no savings (most homeowners), appreciating real estate prices are the only hope. Conversely, if house prices drop, then flatline, these people will lose years of wealth accumulation as well as a chunk of their expected nestegg.

And then there’s liquidity to worry about. Real estate is easy to move when buyers swarm, but it can be totally illiquid in a languishing market – like the one which lies ahead. As the economy recovers, interest rates rise and unemployment lingers, housing is likely to stay tepid until 2014 or beyond. That’s just in time for millions of Boomers to realize the mess they’re in and flood the market with new listings. Supply and demand is still a bitch.

Oh, and did I mention that the current economic disaster has highlighted the chronic underfunding of existing pension plans? GM alone owes retirees billions which will likely never be paid out. More houses for sale.

Some people, like TD economist Don Drummond are calling on the feds to overhaul the CPP, jacking premiums skyward so people are forced to save. That ain’t going to happen, at least not for a few years. And even if it does, the benefits won’t come for two decades. In fact, with the country sinking into more debt at the current rate of $30 billion a year, there is no government bailout possible.

This means if you are, say, 40 and don’t have net worth of $500K, or if you are 60 without net worth of twice that, you walk with risk. Given average life expectancy of 85+ today, a jobless, pensionless senior at 65 wanting an income of $50,000 and something to pass on will need a mill. And not in real estate equity. Liquid.

If you think an income of fifty thousand is excessive, feel free to live on half that. Once oil is back to $100 a barrel, that should be lots of fun.

Which is why, I guess, the idea of building up an RRSP packed with growth stocks at the same time you make mortgage payments is such a turn-on.

Feel the love?

131 comments ↓

#1 Dave on 05.06.09 at 10:47 pm

you got me here. What’s an RRSP mortgage?

#2 john on 05.06.09 at 10:55 pm

Garth,

What is the probability that interest rates will stay low for years and that negative rates are on the horizon?

Unprecedented but…

#3 TJMikey on 05.06.09 at 11:06 pm

Given the FACTS as presented by garth, we can expect to became a very large Denmark in the near future.

All forms of tax will have to be increased across the board to meet the shortfalls in society, economic and otherwise.

50% could become the new personal marginal rate before we know it. Business and sin taxes will follow.

The cash has to come from somewhere.

Or, we could elect Obama and have him create one of those fancy $1 trillion emails.

I used to look forward to the future.

#4 Charles T. on 05.06.09 at 11:08 pm

I think all financial news junkies should add the following financial blog to their list of blogs to read.

Nathan’s Economic Edge

#5 Fool me once... on 05.06.09 at 11:21 pm

Garth,
For those of us who are financially challenged and looking for guidance from those with insight such as yourself yourself, could you please explain what exactly you mean by a “RRSP Mortgage?
Thanks in advance

#6 nonplused on 05.06.09 at 11:42 pm

A bungee jump where the kid operating the ride forgot to attach one end of the cord maybe. And if these lay offs don’t let up it could come sooner than later.

What could be worse? How about hyper inflation too? If you invest right you might keep up with it but it’s all taxable. The more likely outcome is that those who saved are screwed too.

If they handle the GM bankruptcy the same as they are trying to do with Chrysler then they will turn the company over to the employees to deal with the pension shortfall. Assuming the employees can make the company function again but it’ll be their problem now. And that is assuming the senior debt holders can be made to take a voluntary hit because the current Obama plan is basically property seizure and might not hold up in court. It is, after all, unconstitutional in the US (but not in Canada where there are no property rights in the constitution or bill of rights).

I agree with much that Garth says but am still not convinced a big stock market rally is going to save the day. I just can’t see how rising unemployment, a disaster in pensions and housing, and bourgeoning government debt leads to a sustained stock rally. Normal math would say it doesn’t work that way. More likely the lack of consumer spending, rising taxes, rising input costs including energy, and down the road rising interest rates will be the final 4 nails in the econocoffin.

#7 Davinci on 05.06.09 at 11:55 pm

Gold is money, it’s so hard to see that truth when your whole life you have seen it work and have not felt the real pain fiat money can inflict.

If you think you will retire on RRSP or CPP you can forget it, the increase in the money supply will steal any value, but you will not notice. You will be happy with millions of dollars that can’t buy what it could 10 years ago. Always forgetting it’s not the number that counts but what you can buy.

I understand your reluctance towards gold I was like you, buying stocks, bonds and doing everything the Main Stream Media told me to do.

It took me a year of study to have the conviction I have today. So I don’t expect much from people reading this. Though I want it to be out there as no one mentioned to me to research gold until I met Ron Paul.

I hope I save just one person, that’s enough for me.

Got gold or silver?

#8 nonplused on 05.07.09 at 12:03 am

PS I forgot to mention, front page news in the Calgary Sheep Herder, oops Herald, the real estate market is rebounding! They base this on sales in April which were down 5% y/y and prices which were down 10% y/y, but they are up over March! April is always higher than March, but hey. At least it’s only down 5 and 10 from last year, which was by all measures a collapse.

Declines always lesson as you near the bottom but the bottom isn’t in until the declines end. It’s like calling the statistically irrelevant change in new jobless claims from 630,000 to 615,000 a hopeful sign. The number is still dreadful, and new jobless claims have to fall as we run out of jobs to cut. Unemployment is still up, and up large. You only go into new jobless claims once until you find work again. It’s only a measure of the rate of change, which is still hard down. Same with real estate prices in Calgary.

But I did overhear a youngster talking about how great a time to by it was due to 4% – 5 year mortgages at lunch today. There still are greater fools. To bad his budget was only $250,000 and he only had $10,000 towards his 10% down he wanted. That might save him. But it won’t help the average house still selling at $430,000 in Calgary, clearly well over his budget.

#9 nonplused on 05.07.09 at 12:07 am

PPS the Wall Street blogs like CalculatedRisk and Dealbreaker are all over the story that FDIC actually thinks they won’t have enough cash to get through this and Congress has now increased their line of credit. Yikes!

http://www.dealbreaker.com

http://www.calculatedriskblog.com

#10 nonplused on 05.07.09 at 12:12 am

PPPS http://housingdoom.com/ is all off on how legislation might be coming to force cramdowns on lenders. This would be the end of private mortgage origination if it happens, and, incidentally, be another abrogation of property rights.

#11 canuck99 on 05.07.09 at 12:47 am

This is off topic but a fantastic feel-good. Check out this amazing, world-wide talent version of Stand By Me. If this doesn’t make one ‘feel the love’ nothing will… enjoy:

http://gizmodo.com/5231112/best-video-ive-seen-today-will-make-you-smile

#12 Grumpydawgs on 05.07.09 at 1:05 am

Garth, call me paranoid but I’m always thinking to myself ” Hey if I can dream that up so can any bankster or Fed shyster”, so heres my thoughts on the bottled up equity of the average CDN homeowner.

1) The fed sees all the dough tied up in seniors savings and dumps intrest rates to below the price of cat food and forces liquidation and draw down of life savings because no one can live on bond rate returns or T-Bills anymore. Tax revenue on all the newly freed up cash gets the governmet coffers juiced up and wanting more. Like Richard Pryor said ” Cocaine makes me a new man, but then he wants some too”. Government spending goes through the roof on the back of the new revenue and the fed doesn’t want to climb down.

2) Theres too much equity tied up in real estate and too much reliance on long term savings so with the intrest rates crushed they start to liquidate the equity in real estate to get more cash pumping through the system. the reverse mortgage scam wasn’t draining the savings pool fast enough.

3) Create a ‘coordinated global recession” ( keyword coordinated) and shock losers into cashing out and crystallizing capital gains to pay massive taxes on. Like wise create giant pools of suddenly cashed up consumers too afraid to go back into the stock market and knowing that cash burns a hole in most peoples pockets project another mass injection of cash through increased saes taxes into the coffers.

it’s a game of divide and conquer, fed bankster style.

4) Jerk the marketplace back and forth and create a whipsaw enviornment where no security seems to exist with stupid knee jerk policy and with false economic reports, really gloom it up one day and declare a glorious end tomorrow so that the sheeple set thier hair on fire becaus eof the perpetual anxiety and drop any remaining cash into stupid investments like condos to bail out the banksters therefore saving them millions before having to foreclose on bankrupt developers and sucking up new cash downpayments, creating new tax revenues from PPT’s etc., and driving the herd into a pen which is surrounded by giant flashing signs that say ” Higher Intrest Rates Coming soon, but because of the craze few see the signs and end up blowing thier brains out anyway.

Or…..am I just paranoid?

How am I doing so far?

#13 . . . fried eggs and spam . . . on 05.07.09 at 1:09 am

Elvis in a Spandex / Latex outfit. Kinda cute and funky, doncha think?!

“If you think an income of fifty thousand is excessive, feel free to live on half that. Once oil is back to $100 a barrel, that should be lots of fun.”

When a person retires or loses their job and has little or no chance of getting another one, a car becomes a luxury, a ‘want’, and ‘wants’ are not necessary now — survival of the fittest is.

It is quite easy to forego driving when there isn’t enough loose change to fill the gas tank. One can always give up driving altogether, take public transit and / or taxis — in the long run, it’s a good way to cut costs and live in a reasonable manner.

Besides, http://www.bnn.ca/news/9159.html
——
Could be linked to the insider equity trading stuff. — http://tinyurl.com/5b55j
——
These links can be compared to triplets, and the second half of the year is supposedly when things begin sliding downward at a quicker pace with wars, and rumours of wars becoming ever more prevalent.

With the rhetoric heating up in AfPak, Georgia crying foul against Russia more and more frequently, mebbe China preparing themselves for something. — http://tinyurl.com/cxpyoy /\ http://tinyurl.com/d58r55 /\ http://tinyurl.com/cvw55a

Pakistan and India both have nukes, and if they end up fighting for the umpteenth time with each other, it would be a fairly good bet to say our troops will continue touring forever and a day in that vicinity. — http://tinyurl.com/cmusw3

#14 Sean in E-Town on 05.07.09 at 2:40 am

[i]Given average life expectancy of 85+ today, a jobless, pensionless senior at 65 wanting an income of $50,000 and something to pass on will need a mill. And not in real estate equity. Liquid.

-Garth[/i]

It’s at times like these I’m reminded of Thoreau: “That man is richest whose pleasures are the cheapest.” And I feel comfort that, in today’s dollars, I’d be living like a king on 18K… even richer when, when this market shakes herself out, and I own a place and rent is no longer a factor, I have a home; probably with something approaching 50% down, given my propensity to save over a thousand a month and hold off sinking my money into any illiquid income investments.

I spent today with my dad, fed him some ridiculously spicy turkey chili, and showed him some huge places that he could get from selling his current sandwich cookie of a townhouse, and moving to Winnipeg from Edmonton, with a few thousand to spare. More house, more cash, and a place where energy shocks won’t be as acutely felt, what with Manitoba Hydro instead of private, yield-inflating, underfunded, unsustainable, Alberta utility companies.

In summation: Short on Edmonton, and looking to get long on Winnipeg.

#15 Da HK Kid on 05.07.09 at 4:31 am

Okay, lets face it, the DOW is up 37% from lows and earnings down 37%. How does this insiders trading continue without damage!

As for the boomers, only a handful will get the timing right in bear market rallies leaving their already demolished RRSP vehicles hammered and to the unsuspecting when the DOW hits new lows because none of this senseless activity will be allowed to continue – BOOMERS will be demolished!

Think about what an overall slow recovery looks like over ten years with unemployment maybe reversing in 4 years and everyone mind blown from not being able to retire as they thought.

With all the boomers looking for those jobs and only a handful available, its going to get real messy in the GDP and Consumer spending department.

A decade or more of saving will not only be needed but deemed trendy and the fat cats will be stoned (yes with rocks). By then most will come to grips with the biggest Ponzi scheme in history playing out!

I’m sorry but you have to see what has happened over the last 30 years of drunken spending on cheap credit and how to exactly this day we are still in stage 3 denial.

The sooner you come to grips with the reality of time, chart your coarse carefully for the next X or Y years, you will see how extremely key making the right moves here and now are going to play out!

For me I will be on the right side of the fence but may have to fly under the radar on the other side to avoid the flying granite.

Just my two cents, get back to what living should be so its not forced on you. If you dont feel taking this free advise Garth has to offer along with others here,,,,

than my 82 year old Dad in Burlington can tell you what the depression was all about and how to play it for $1.99 per minute.

Step back kids! Take a deep one and be bigger than the scam!

#16 Lily on 05.07.09 at 5:03 am

And what might these growth stocks be? As Individual stocks or mutualfunds?

#17 David Bakody on 05.07.09 at 6:22 am

The coming of the: “The Senior Boomers” the sad part is these people thought they were invincible and too many thought that Liberal savings plans were hogwash and the Neo Cons could make life better by spending like a bunch of drunken cowboys home from the range …..well the only people who got rich were the oil guys and the owners of the rifle clubs national defence contractors. So hang on the real down turn is yet to come …. who can head them off at the pass, heaven only knows? But we do know who it ain’t!

#18 Joe on 05.07.09 at 6:46 am

What’s wrong with a Walmart job you get comradeship (each morning) and benefits. Also you get to meet all your ex co-workers who are trying to survive. According to BNN the markets are recovering and the banks are sound so all our losses will be recouped. I’m not counting on this happening and thus have mixed feelings about the useful business shows are in a downturn.

#19 Madame Guillotine on 05.07.09 at 8:09 am

Dear Grumpydogs,
Most attempts to explain have not borne the fruit of enlightenment but as we boomers used to say, “RIGHT ON BROTHER.”

#20 David Bakody on 05.07.09 at 8:19 am

Not sure of the details of Garth’s RRSP mortgage but mine was to put the RRSP returns directly on the mortgage balance each year …… save for retirement and save big time on a mortgage amortization. Taking the tax savings and spending it was governments plan in the first place ….. hello? Quite simple, do the math and you will be shocked.

#21 D from London, ON on 05.07.09 at 8:23 am

Today’s topic is one that has always made my blood boil – Boomers! I am a true Gen Xer (born in the mid 1960’s) and I have spent my entire life coming late to the party, following the Boomers like the street sweepers following elephants in the parade – all I see are piles of crap and a lot of jumbo-sized assholes ahead of me. And behind me are legions of younger, more recently credentialed people who will do it cheaper and faster.

Naturally this has led me to a deep and abiding resentment of Boomers and their echo generation offspring. Of course most Boomers reading this are already thinking “Get over it”, and their equally me-generation spawn are thinking “Sucks to be you, …loser”. I have heard these refrains for decades and I don’t appreciate the Privileged heaping scorn on the Underclass. It’s bad form.

Reading Garth’s post and similar warnings of Boomer Karma coming home to roost makes me smile and feel all warm inside…until I look a little bit ahead at the similar fate awaiting Gen Xers, combined with 20 years of crappy, uncertain, high-tax-low-service times before we start “retiring” (read “getting dumped from our jobs”) too.

People born during the time that essentially parallels the Vietnam War have known from adolescence that
– no CPP awaits us (despite decades of premiums);
– RRSPs are a diversionary scam that inflation will surely destroy;
– no universal health care beyond basic public health will be available when we are aged and need it most; and worst of all,
– our Lost Generation has the privilege of paying for the externalized, postponed costs of decades of Boomer excesses.

We do this through:
– ever higher taxes and user fees, especially for things Boomers don’t need any longer like childcare and sports & rec programs for kids;
– lower levels of government service (e.g. one third or so of our taxes go to pay interest on money borrowed to finance past Boomer needs);
– inflation that destroys any attempt to accumulate wealth;
– “outsourcing” and the myth of self-employment that has transferred risk to individuals and away from organizations; and
– endless delays to our careers and personal income growth caused by lack of opportunities for advancement. One need only to look at the current age demographics for nurses, police, teachers, principals, etc. to see that hiring freezes in the 1980s prevented a representative number of us from even entering these professions, never mind mid-career advancement.

I have absolutely no sympathy for the pampered Boomers. Compared to previous and following generations Boomers have had it very, very well (Dear Boomer: I know on the individual level you have had your share of tragedies, so please don’t post your personal sob story in response to my rant). But everyone, including Boomers, has to say that the past 60 years have been pretty good times for Boomers as a generation. Since they now control the strings of power in every sphere of public and private life there is no doubt that they will do everything they possibly can to keep the party going and keep deferring the costs of the party as long as they can.

The thought of the party ending scares Boomers more than anything else. It is the Dark Knight that stalks them in their dreams.

#22 dd on 05.07.09 at 8:27 am

#14 Sean

… where energy shocks won’t be as acutely felt, what with Manitoba Hydro instead of private, yield-inflating, underfunded, unsustainable, Alberta utility companies…

Hate to tell you this but Man Hydro sells into the North American market. When high prices return to the elec market, people in Manitoba will pay for it too.

#23 pbrasseur on 05.07.09 at 8:33 am

Interesting discussion, it is true that retirement finance is probably one of the worst time bomb ahead, obviously this is true all over the developed world. This problem has been made worse by the real estate bubble which lead people to consider their home as a nest egg, as a consequence they wasted precious time and resources on their homes and neglected more appropriate financial assets.

But at the same time this will force a great number of people to keep working much longer which is too bad for them but likely a good think for the economy which could suffer a lot from a shrinking work force (just take a look at Japan for a preview…).

Either way real estate will be a mess as it is sure to become less and less of a priority in years to come.

#24 $fromA$ia on 05.07.09 at 8:52 am

Davincici,

Got Gold, Silver, how about squirels?

What can shiny gold do that nice furry pelts cant?

#25 ritenote on 05.07.09 at 9:04 am

To #11 – Canuck99

Thanks for a little sun, amongst all the gray clouds…worth a smile indeed! Makes one almost able to forget about the Gary Bettmans of the world…

#26 sutluc on 05.07.09 at 9:18 am

Smith manoeuvre.
http://www.canadiancapitalist.com/the-smith-manoeuvre-debate/

#27 Bill-Muskoka (NAM) on 05.07.09 at 9:35 am

Lots of laid-off Boomers will never work again. Except in Wal-Mart.

True Garth, and that is because WalMart is one of the best run companies who treats people based on merit and performance. They have three major profit sharing plans, benefits, and a pleasant work environment with no tolerance for the usual ‘antics’ permitted by most employers. Their training programs put most corporations to shame. They are the real ‘free-market’ example people thought they were getting with other companies and the world’s most successful retailer as a result. Oh, and here is a concept…REAL CUSTOMER SERVICE with a :-)!

I have a several friends who works for them and they love their job because everyone pulls together as a team, unlike most companies with a herd of back-biting arseholes trying to get ahead at someone else’s expense.

All we Boomers with decades of real experience have been cast out to enhance the profits of a few elite wannabes. That’s okay, because we will still be there greeting you with a smile. Bring your wallet when you come. LOL

#28 ally ally oxycontin free on 05.07.09 at 9:39 am

I saw Elvis at the Wal-Mart, Garth. He was lookin’ fer an upper.

No good news today, folks.

Ottawa is still wearing the rose-coloured glasses!

GM posts loss; burns through $10 billion

GM concerned about sale losses in bankruptcy: CFO

Kevin Krolicki and David Bailey

Thu May 7, 2009 8:40am EDT

http://www.reuters.com/article/ousiv/idUSTRE5462J520090507

Opiates—barbiturates—where’d the money go, “stress tests?”

Spread the black crepe … No good news today, except for O’Flairity, Carney, and Mikey ( of Let-Mikey-Eat-It monthly lies contribution ) They’re all saying, “we can now see a dark tunnel at the end of the light.”

Chrysler may not repay government loans: Flaherty
KEVIN CARMICHAEL—Globe & Mail—Tuesday, May 5, 2009

http://www.theglobeandmail.com/servlet/story/RTGAM.20090505.wautoflaherty0505/BNStory/Business/home/

“OTTAWA — Finance Minister Jim O’Flairity conceded Tuesday that there’s a chance the government’s loans to Chrysler LLC will never be repaid.”

That means a total wipe of $1.5 Billion, followed by a total wipe of $2.42 equity position. Oh well, O’Flairity did say, “Mistakes will happen.” Cumulative negative involvement will be $3.775 Billion, according to Gravy-Boat Clement.

#29 Live Within Your Means on 05.07.09 at 9:41 am

Here’s one explanation of an RRSP Mortgage by Garth himself

Why Not Make Mortgage Payments To Yourself?

http://www.thecareguide.com/Resources/ResourceDetails.aspx?section=FinancialMatters&itemid=122

I recall reading about this type of mortgage years ago in either the Globe or the NP.

#30 Iam on 05.07.09 at 9:43 am

For people with equity, but no savings (most homeowners), appreciating real estate prices are the only hope. Conversely, if house prices drop, then flatline, these people will lose years of wealth accumulation as well as a chunk of their expected nestegg

With the emphasis on “if and than” what happened to “when” Are we seeing the dawn of a flip flop here.

#31 CalgaryRocks on 05.07.09 at 9:43 am

#14 Sean, I like the way you think but for me Winterpeg is not somewhere I would enjoy living.

There are lots of cheap yet warmer places that would fit me better.

Anyways, back from a month long vacation in Eastern Europe. A beautiful place that has gone through hell and back several times through history. I’ve seen houses in sea side resorts for 50k Euros, built with brick not wood.

#32 CalgaryRocks on 05.07.09 at 9:49 am

Garth, what happens 20 years from now when the government is strapped for cash and you have all that money in your rrsp, just sitting there.

Maybe they will decide that because you are so rich you won’t need your cpp or oas and maybe you’ll also have to kick in some extra bucks in taxes on your mandatory withdrawals.

#33 PTDBD on 05.07.09 at 9:54 am

@Grumpydawgs:

I likes that post I do.
Call me paranoid two.

:-) going forward :-)

#34 cowgirl kiss on 05.07.09 at 10:27 am

#11 Canuck99

Loved the video – just the thing to start my day …

#35 hagbard on 05.07.09 at 10:29 am

The answer isn’t more government, its no government. Few will accept that answer, reality will force it.

#36 PTDBD on 05.07.09 at 10:30 am

If you invested in GE, and the American Financials at the low, congratulations! You’ve made a bundle. Huge!

Now, just consider…

If you were someone connected to upper levels of government…

If you knew for certain that all these entities would be backstopped with tax money, or digital money creation….

If you knew that the politicians would never, under any circumstances, let them fail, even though the entire capitalist fabric of the investing world had to be turned topsy turvy….

Just imagine what you could have borrowed, mortgaged and invested in the comfort of such absolute certainty. Just imagine.

Then, there is the rest of us.

#37 Sphinx on 05.07.09 at 10:37 am

Garth,
You insist oil going to $100!!, I don’t see it happening in our lifetime. Only speculation pushed it to last year’s highs same happened with RE, no real increase in demand yet, even with China/India coming to the consumption party with their micro cars, more hybrid and efficient cars are build in NA and Japan that saves gas….Buffet just invested in a Chinese co. building electric cars.

Add to that, the death of the “Great American Consumer”, all manufactured items based on petroleum will have no demand.

Governments around the world are trying to delay the inevitable, and they’re praying that throwing money on the problem will fix it, all what they can do is pray.

In the coming years, expect riots, social unrest, and higher crime rates in Canada and US as the financial problems grow more un-controllable, and more people without the means to get by every month specially the boomers.

Housing will be the least of all worries.

#38 Ultraman on 05.07.09 at 10:46 am

Thanks canuck99, that did put a smile on my face indeed.

#39 Bailing in BC on 05.07.09 at 10:49 am

What Garth is referring to with his RRSP mortgage is the ability to use the money in your RRSP to fund your own mortgage. For example if you have $100k in your RRSP you can “lend” it to yourself buy taking out a $100K mortgage and then repay your RRSP back with market interest. To do this you need to have an independent third party to set it up and administer it. You also have to pay it back to your RRSP just like you would to the bank, otherwise the administer would have to start proceedings and you would end up in the unenviable position of having to foreclose on yourself! The nice thing about it is that it doesn’t matter what interest rates are doing. Interest rates low? Great you have a really low mortgage repayment! Interest rates high? Great! you’re getting an excellent return on your RRSP. I had forgotten about this little trick and may investigate doing it myself. My only debt is an RRSP loan on a line of credit. So I borrow money on a line of credit to put into my RRSP then I, borrow the money from my RRSP to pay off the line of credit, then I pay back my RRSP over time earning interest as I go! This may solve the problem that I have been having with the decision to go fixed or variable. I try to listen to Garth and stay on my smokingly low line of credit, but a little voice in the back of my mind says “when are you going to get a 5 year fixed at 3.7% again” This could well be the answer :)

With an RRSP mortgage you want the highest possible mortgage rate, not the lowest. — Garth

#40 Smart on 05.07.09 at 10:50 am

GARTH,

would you please explain in more details what is ” RRSP mortgage” and how to make your mortgage taxable?
You have mentioned about those benefits many times but I still can’t understand how to do this or where to find information about it.

#41 No Fool.... on 05.07.09 at 11:11 am

Ya, but $50K can buy a lot of squirrel, based on your theories.

#42 rory on 05.07.09 at 11:11 am

Hi all…reading the 20 comments so far seems we are all still ducking the central theme here …boomers have no money for retirement.

This is pretty basic, and easy way to get your number …use the 4% or 5% rule …figure out your gross income you would like to retire on and multiply it by 20 or 25 …easy …so how close are you to that magic number.

Use 50% (not the 70% often touted) of your existing gross as a start number.

Example: 80K/2=40K*25=$1,000,000 to retire w/o CPP or OAS.

Of course, assumptions on RE downsizing, CPP and OAS can be factored in (if you believe they will be around in the present amounts)…but the main point is you need lots and lots of money to retire on.

The “number” is staggering for many and trying to hit that number on GIC income after inflation is going to be pretty near impossible. Now one has to learn how to deal with risk. It does not get easier…IMO.

P.S. – better hope the gov’t can keep delivering on CPP and OAS.

P.S.2- This is basic and does not factor in return rates, inflation variances, etc …but is a real good indicator of where you need to be.

#43 betamax on 05.07.09 at 11:19 am

Tough times and vastly reduced lifestyles ahead for the profligate masses. Unfortunately, the savers amongst us will no doubt have to subsidize some of that profligacy through greatly increased taxes.

As Yogi Berra said, “The future ain’t what it used to be.”

#44 Dan in Victoria on 05.07.09 at 11:26 am

Heres a link my accountant sent me last year regarding the rrsp mortgages Hope that can help someone http://en.50plus.com/money/browseallarticles/index.cfm?documentid=6659

#45 Jason on 05.07.09 at 11:29 am

#7 – Davinci
“Gold is money, it’s so hard to see that truth when your whole life you have seen it work and have not felt the real pain fiat money can inflict.

If you think you will retire on RRSP or CPP you can forget it, the increase in the money supply will steal any value, but you will not notice.”

I agree with everything you have to say except for the RRSP comment. Don’t underestimate the power of a Self Directed RRSP. 100% of my RRSP investments are now Gold and Silver stocks ;-) The majority being Silver due to it’s disconnect with Gold.

#46 tuldok on 05.07.09 at 11:34 am

RRSP Mortgage?

http://www.thecareguide.com/Resources/ResourceDetails.aspx?section=FinancialMatters&itemid=122

#47 JoeCalgary on 05.07.09 at 11:38 am

canuck 99, Thank you so much!!! It’s simply great. :)

#48 Marc on 05.07.09 at 11:53 am

#27 Bill-Muskoka (NAM) on 05.07.09 at 9:35 am

Does Wal-Mart actually provide benifits for all their employees now? I worked for them about 13 years ago, when I was a young buck. I was earning below poverty level, so my healthcare premiums were being subsidized by taxpayers. Imagine a multi billion dollar corperation having taxpayers subsidize its employees. Management was happy to give me a 10 cent per year raise, 25 cents would have needed a recomendation from the general manager. I figured at best after 10 years I would be making less then $11 per hour if I got the 25 cents annually. I learned a trade, and haven’t looked back since. Now my raises are usually at least $1 per year, sometimes more. I am surprised to see people I used to work with still working there when I go to buy toothpaste and other necessaties. Nice place to work, but the pay really sucked.

#49 PTDBD on 05.07.09 at 12:00 pm

@D from London, ON – great rant! Do not go gently into that Dark Knight.

Consider perhaps, that you are using a much too broad a brush when you paint a population majority as “controlling the strings of power in every sphere of public and private life”.

Boomers are not in control.

#50 Dodged-A-Bullit-In Alberta on 05.07.09 at 12:11 pm

Greetings: The local Goodyear plant where I live just announced 70 more lay offs, effective June 1, due to the bankruptcy of Chrysler. They make the small spare tires for Chrysler, very exclusive product line. The downward spiral continues. Peak Oil is now making main stream media, watch for oil prices to rise.

#51 David Bakody on 05.07.09 at 12:24 pm

#39 Bailing in BC on 05.07.09 at 10:49 am

You are right as is Garth , but Sir/Madame it takes years to accumulate $100K while my simple plan starts at year one of a mortgage and 25 yr mortgage could be paid off in less than 15 years leaving a much greater cash flow and a lot of good night sleeps. But different strokes for different people.

#52 David Bakody on 05.07.09 at 12:31 pm

On another note note ….. GM lost $6B last quarter that would be $6B from the $15B we gave them …… now they …. oops we, are back where we started ….. in thezzse tank no? So what is all this brouhaha the great recession is going to end in 2009 …… could it based on cheap mortgage rates? I am no wizard but I think the banks are not as solid as is being let on. ( could they have been forced to lend money to less than good creditors once again?) Oh well the money printing presses are working fine ….. for now eh!

#53 Alex on 05.07.09 at 12:49 pm

you have a point Grumpydog!

#54 dbg on 05.07.09 at 1:04 pm

Gold Bugs

Why do all the gold bugs link their website or youtube video.

Shameless promoters.

#55 dbg on 05.07.09 at 1:08 pm

Double speak

http://www.winnipegsun.com/money/2009/05/07/9378006-sun.html

Are you ready for the next economic wave. Get a surf board and ride the Tsunami. The next ones coming more opportunities on the way. Lots of cash sloshing around and as long as the countries don’t get into over regulation we are back to the boom.

Fiat it’s great as everyone can make a dollar not just the miners and the slimey promoters.

#56 CM on 05.07.09 at 1:16 pm

Sorry, but I just could not resist having a go at this one.

PM goes off base during surprise Afghanistan visit

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20090507/harper_trip_090507/20090507?hub=TopStories

In my experience, Harper is always way off base, no matter where he is.

#57 D from London, ON on 05.07.09 at 1:41 pm

#48 PTDBD

Thanks for the compliment.

If the boomers aren’t in control, who is? Boomers are as old as 64 y.o. today – are you saying the post-65 y.o. crowd are still in charge? I would have thought they were winding things down, passing power to their kids by now and ensuring their legacies.

#58 The Coming Depression on 05.07.09 at 1:48 pm

Very simple folks. Forget real estate, RRSP, reversed mortgages blah blah blah. You young people should be taking out LIFE INSURANCE on your parents. Take it on Anyone under the age of 65, (Relative) Make the payments regularly, just like those DUMB RRSP’S. HERE IS THE KICKER-Its TAX FREE when the pass away. Best investment money can buy. PERIOD. Yeah its morbid but so is life..

#59 905er & Spouse on 05.07.09 at 2:07 pm

Forget the boomers. They are sitting pretty compared to the next few generations- X, Y and echo-boom who have paid 4-6X their income for the same house, and will have even less savings for retirement. They are also less likely to have a pension.

In response to postings wailing on younger generations with their ‘screw them’ attitude. Remember, they learned from the best: their parents the boomers.
(I wasn’t parented by baby boomers)

I’ve noticed where I work that the group in the 20s and 30s where I work bust their butts to get things done and are helpful and professional. It is obvious to all and especially to management at my organization. I wish I could say the same about the boomers.

#60 Got A Watch on 05.07.09 at 3:12 pm

The era of low interest rates may be ending, right now.

Today at 1 PM we almost had an outright failure of a USA Treasury Bond auction. They attempted to sell $14.88 Billion US $ worth of 30 Year Bonds, and it seems not enough buyers showed up.

The Primary Dealers (16 large Banks) are required to “take up” the auction (buy the Bonds) and the Fed will no doubt buy them back. Without that paper exercise, an outright failure would have probably resulted, as note enough real buyers showed up.

This is a warning shot right across the bow of Obama and his plans to run large deficits forever. That”Plan” is now dead in the water. Interest rates will have to rise to attract Bond buyers, or the budget will have to be balanced or cut severely – which do you think is more likely?

It they attempt to auction more long Bonds and a similar result occurs, long-term interest rates will spike markedly higher. Today’s result has pushed up rates on the long end already, mortgage rates in the US are based on this, and they have likely already risen today.

This is probably a very significant inflection point, and you will note the absence of any coverage of this at all in the MSM that I can see. The “Bond market vigilantes” have woken up, and they don’t like what they see. An end to talk of “green shoots” and “recovery” will be one effect, as things will go south rapidly with higher interest rates.

#61 Happyplace on 05.07.09 at 3:22 pm

D from London – Stop generalizing about ‘pampered boomers’. In the time it took to write your whiny diatribe you could have done something productive.

#62 jess on 05.07.09 at 3:30 pm

boiling blood,

sigh of the future?
http://www.flashreport.org/featured-columns-library0b.php?faID=2009042908422871

#63 bryan35 on 05.07.09 at 3:34 pm

Does a RRSP Mortgage make sense for someone with a company pension.

#64 David Bakody on 05.07.09 at 3:36 pm

I was in for some service advice at my local Honda dealer where upon I was speaking with my salesman. I looked at the new Insight …. great car 50 mpg in the city! good price, great warranty, poor sales! Why? …. small back seat …. hello? does the public really know what they want. But this he told me ….. Honda is not worried because they know gas is going up “Big Time`and these cars will sell out fast and there will be a waiting list ….. Soooooh ….. does that mean the good times will roll …. I think not because only those who once worked in the oil industry will win as others will see no wage increase nor will all those manufacturing jobs return AND it is safe to say the competition for jobs will be furious as those senior baby boomers flock to the oil fields with good skills and good working habits driving down wages and overtime as oil companies seek to recover lost profits and more all coupled with higher costs for other workers and we the consumers.

#65 Jan on 05.07.09 at 3:40 pm

You need a million? You need $50,000 a year to live on?
Get real Garth. I am 54 with no debt and my house is paid for. My kids are on their own now. I am currently living on only $25,000 a year and have been doing so for the last 4 years!.
What the heck are you spending YOUR money on that you need so much ? I gotta know.

Motorcycles. — Garth

#66 Chris in England at the moment on 05.07.09 at 3:57 pm

As a foreigner, I have trouble in working out these gimmicky generation labels. I do know that Boomers relate to the baby boom after WWII, but what is the echo generation and Gen-Xers, and why are they so named? If I am going to be a Canadian I will have to learn the language.

#67 Flip on 05.07.09 at 4:10 pm

You need a million? You need $50,000 a year to live on?
Get real Garth. I am 54 with no debt and my house is paid for. My kids are on their own now. I am currently living on only $25,000 a year and have been doing so for the last 4 years!.
What the heck are you spending YOUR money on that you need so much ? I gotta know.

Motorcycles. — Garth

That’s because it’s a Harley… should have gotten a Bimmer (or even a Honda….)
http://toronto.kijiji.ca/c-cars-vehicles-motorcycles-BMW-R1200C-2004-W0QQAdIdZ117834818

#68 MenWithHats on 05.07.09 at 4:27 pm

Diversification of the portfolio is the only answer to some what safe investing .
A house is a lousy investment as it ties up huge amounts of capital that could be invested in real return instruments/assets .
A home can be a reasonable hedge against inflation. If we ever experience double digit inflation in Canada again your stocks and bonds will crash, while your home will tend to maintain its value. There are also substantial tax breaks on home ownership–if you do turn a profit on your primary residence you won’t have to pay any capital gains tax. These advantages make up a bit for the fact that a home is a fundamentally poor investment from an asset allocation point of view.

Various files

#69 MenWithHats on 05.07.09 at 4:37 pm

Liquid asset vs. home ownership

http://tinyurl.com/d3jarn

#70 dd on 05.07.09 at 4:53 pm

#57 The Coming Depression
>> young people should be taking out LIFE INSURANCE on your parents<<

Nothing is free. This is more like a lottery.

#71 Calgary_police_state on 05.07.09 at 4:56 pm

Garth you are effectively saying that it is in the best interest of young homebuyers to compete against the baby boomers. Their house equity and “built” up value should go down in order for young people to start up. This is a fair assessment. There are laws though protecting the old from the young and strong. Otherwise we would take it all away from the old people who are slower, weaker, and oftentimes havent learned from experience. Civilization currently favors a stupid mentality that a person should buy a house and rest assured that their pumping money into it means something. There will come a day when house equity is irrelevant in Canada. Bottom line is can you make your payments over the long term? I certainly dont expect to gain anything from home ownership and also expect to work until the day I die, irregardless of pension of not. “Retirement” is for fools that dont know how to enjoy themselves in free time and work, now.

#72 LS on 05.07.09 at 5:03 pm

Motorcycles. — Garth

Hear hear. What’s retirement for if not to enjoy life? Garth is still buying the wrong bikes though :)

#73 rory on 05.07.09 at 5:28 pm

#64 Jan,

I think your missing the point…if you are retired and want a 50K income you need to have $1M (lots of other factors involved, obviously).

In your case if you are retired at 54, can get by on 25K/yr, live to 90, and collect $12K per year in inflation adjusted CPP and OAS at 65 you need to have in the neighborhood of $500K* in real money to have a high probablity of not out living your money.

If you got that much $$ then good on you, if not time to either downsize, keep working, risk more for higher returns, or hope the more gov’t gives out more pension money, or just stay married and collect more gov’t pension or the last hope of many – 6/49 baby.

If I am stating the obvious I apologize but many just do not seem or are able to comprehend the large quantities of money that is required to not have to live hand to mouth.

Of, course we can all live on less and may have to do so …but again the point is if you want X then you need to have Y.

* rates of return assumed are 4% and inflation of 3%.

#74 Flip That Bus on 05.07.09 at 5:35 pm

#65 Chris in England at the moment –

That’s taken from one particular novel written by Douglas Coupland, which was mostly a whiney manuscript documenting the sorrows and tribulations of a post-war population demographic.
http://en.wikipedia.org/wiki/Generation_X

Other demographics have since launched similar, ‘more sorrowful than thou’ initiatives and acronyms to identify by.

#75 dbg on 05.07.09 at 5:54 pm

#63 David Bakody

Wow……..all from a visit to a Honda dealership. Why read when you can get all that info at the dealership.

Funny stuff David.

When it was booming in Alberta about a year back they couldn’t find enough people to work.

Money flows……..if goes.

Cheers……..get your surfboard out for the next wave.

#76 dbg on 05.07.09 at 5:55 pm

Money flows…….if oil goes.

#77 Flip That Bus on 05.07.09 at 6:16 pm

#71 LS –
Bingo.

Better to have something that holds together foreever and doesn’t rattle the fillings out of an old head.
http://www.swotti.com/tmp/swotti/cacheAG9UZGEGZ29SZCB3AW5NQXV0B21VDGLVBI1NB3RVCMJPA2VZ/imgHonda%20Gold%20Wing1.jpg

#78 Toronto C9 Renter on 05.07.09 at 6:16 pm

#21 D from London, ON …

There are limitless ways to get ahead in this world, financially, professionally, socially etc etc.

Getting worked about how you were/are victimized by the boomer generation isn’t one of them!

Pathetic!

#79 Alan Pater on 05.07.09 at 6:24 pm

There are lots of places in the world where the cost of living is a fraction of the cost of living in Canada. And one can live in a walkable town, so the price of gas is not relevant. CPP is enough for that.

#80 Da HK Kid on 05.07.09 at 6:37 pm

If it wasnt for the recession Walmart was on the brink as their business model relies on physical expansion into new markets. How do you think they keep costs lower than the rest of the discount retailers.

Why do you think they are now entering into the supermarket model big time. They failed in expanding into Europe and Asia.

The one big buying team in Asia has dumped a whack of staff already. The top procurement guy (the head) who had 3000 buyers has left the building.

Costco, Sams Club, BJ’s all toughing it out. Target getting slammed. Retail is up because it only has one place to go after everyone ONLY PURCHASED ESSENTIALS. Lowe’s and Home Depot shelves trying to keep looking full.

Where do laid-off retail people go, to healthier retailers like Walmart WHO themselves are at capacity and still have that business model to support through expansion.

NOT GOING TO HAPPEN FOR THEM, NOT GOING TO HAPPEN FOR PROVIDING BOOMERS WITH JOBS!

#81 CalgaryRocks on 05.07.09 at 6:52 pm

The Last Hurrah and Seven Lean Years

http://www.gmo.com/websitecontent/JGLetter_1Q09.pdf

#82 Vancouver_Renter on 05.07.09 at 7:10 pm

#21 D from London, ON said, “Boomers! I am a true Gen Xer (born in the mid 1960’s) and I have spent my entire life coming late to the party…”

Excellent post. I instantly completely related to everything you had to say. Why? Because I was born in 1964. It makes me angry read condescending responses from posters like Happyplace.

I think there is a Generation-X “sweet spot” right around the year of birth 1964/65 where getting screwed throughout your life has been maximized. The further away an individual is from this sweet spot, the more likely he/she just won’t “get it” and will look at you as if you are just a whiner out for sympathy for your own personal failings.

In various social and business circles, I’ve found my conversation has drifted to the Gen-X topic. Quite regularly someone’s eyes light up and they say, “Yes! Exactly! That’s what I’ve experienced! Oh my gosh!” They go on to describe how they followed the examples set by their older Baby Boomer siblings but, instead of winning, they lost every step of the way. The jobs weren’t there, there was no room to be promoted, they were the first to be laid off, the home buyer’s grants were gone, employment benefits were cut back, the houses they bought fell in value, the vacation properties were out of reach, etc.

And then you ask them when they were born and almost always the answer will be 1963-1966, with 1964 and 1965 being the most common response.

I’ve even noticed that there is a disproportionately high number of men, born in 1964/65, who never did marry. Why? Because the birth rate plunged in the late 1960s, resulting in 6 girls for every 10 guys born in the mid-1960s (statistically, the average man marries a woman 5 years younger than himself). That’s the opposite for men born in the 1940s and 1950s, who had 14 women for every 10 men at social outings because of the rising birth rates.

So to the rest of you who don’t understand – and never will be able to understand – here’s how it is. If you were born in that Gen-X sweet spot, FAILURE was the default in everything you did in life. It was completely the opposite to the Boomer experience where you WON as long as you went with the flow and did what the rest of your generation did. Imagine, dear Baby Boomer, that every bright idea you ever had… buying your first home, following a career path, etc, lead to failure. That was the reality of my friends and I.

By the way, just because I’m ranting doesn’t mean that I, personally, failed in the end. Unlike my older siblings who didn’t attend university, easily found safe, secure unionized government jobs with generous benefits, bought inexpensive houses, and ended up with comfortable lives, for me those opportunities were not there. Instead, I had to travel a more difficult and challenging path to success. I put myself through university and, after discovering the impenetrable corporate wall of Baby Boomers which allowed for no promotion, I started my own businesses – 4 in fact. Three failed. One succeeded. And now I’m doing fine. My point? I had to take way more risks and, in my view, work that much harder to achieve what a Baby Boomer achieved through default.

So why aren’t we Gen-Xers, born in the mid 1960s allowed to be a little bitter? Women are allowed to complain about not having equality with men. Visible minorities are allowed to fight for their rights. Seniors are allowed to lobby for their group. And yet Gen-Xers are told to sit down and shut up… even though we know that the rest of our lives we’ll continue to get the short end of the stick as described in post #21.

#83 rory on 05.07.09 at 7:13 pm

#70 Calgary_police_state you said:
“Retirement” is for fools that don’t know how to enjoy themselves in free time and work, now.”

I will take the bait …

Retirement is freedom.

Retirement can be anything you wish it to be …sitting on a beach drinking umbrella drinks, hiking any trail you wish when you wish, volunteering at shelters or work until you drop or shop until you drop or any combination of the above.

Besides who says we all did not have any fun getting to this stage in life…an over the top generalization from yourself.

If I have taken your post out of context well …oopps sorry …but I think not.

…and irregardless is not a word – regardless works just as well …just so ya know I haven’t been wasting all my time sipping drinks or being stupid …stupid. Besides my Dad can beat up your Dad.

From Dictionary.com…
“Irregardless is a word that many mistakenly believe to be correct usage in formal style, when in fact it is used chiefly in nonstandard speech or casual writing. Coined in the United States in the early 20th century, it has met with a blizzard of condemnation for being an improper yoking of irrespective and regardless and for the logical absurdity of combining the negative ir- prefix and -less suffix in a single term. Although one might reasonably argue that it is no different from words with redundant affixes like debone and unravel, it has been considered a blunder for decades and will probably continue to be so.”

#84 Chris in England at the moment on 05.07.09 at 8:29 pm

Flip that Bus #73

“That’s taken from one particular novel written by Douglas Coupland, which was mostly a whiney manuscript documenting the sorrows and tribulations of a post-war population demographic.”

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

Thanks for that. Well speaking as a weird hybrid (Boomer-X?) when I see “Generation X” I immediately think of Billy Idol. No wonder I didn’t understand, as here in England we simply don’t have trials and tribulations and are always unfailingly happy with our lot …

===============
There is nothin’ fair in this world
There is nothin’ safe in this world
And there’s nothin’ sure in this world
And there’s nothin’ pure in this world
Look for something left in this world
Start again ….

(Billy Idol comments on the global recession)

but,

It’s a nice day for a White Wedding!

#85 David Bakody on 05.07.09 at 8:34 pm

DANIEL WAGNER AND JEANNINE AVERSA

The Associated Press

May 7, 2009 at 5:48 PM EDT

WASHINGTON — The U.S. government’s long-awaited stress-test results have found that 10 of the nation’s 19 largest banks need a total of about $75-billion (U.S.) in new capital to withstand losses should the recession worsen.

The Federal Reserve Board’s findings, released Thursday, show the financial system, like the overall economy, is healing but not yet healed.

But not to worry Canada’s Economy is as strong as the Canadian Shield —–Harper/Flaherty

#86 D from London, ON on 05.07.09 at 8:57 pm

# 65 Flip that bus – No living generation is whinier than the Boomers. Beleive me, the rest of us 2/3 of the population live amongst this constant background noise and it ain’t pretty. Take the log out of your own eye before you comment on the sliver in mine.

# 60 Happyplace – You appear have poor reading skills – you must be a Boomer who skated through school and got the diploma just for showing up. I repeat (please follow along, take your time and sound it out if you need to):

“Of course most Boomers reading this are already thinking “Get over it”, …. I have heard these refrains for decades and I don’t appreciate the Privileged heaping scorn on the Underclass. It’s bad form. ”

As Garth often responds to posters like you “PLEASE TRY TO KEEP UP”.

#87 Chris L. on 05.07.09 at 9:25 pm

I’m trying to spread the word for you Garth, but it’s not well received!

http://www.guelphblog.ca/guelph-real-estate-news-views/2009/5/1/market-update.html#comments

Guelph defies gravity!

http://www.homesinguelph.ca/cs/web/blogs/guelph_real_estate_blog/archive/2009/05/07/guelph-real-estate-statistics-april-2009-residential.aspx#1538

I guess my work is paying off, because now at least this agent sees that the numbers no longer make sense. Why are fools so willing to pay high prices in a BUYERS market? Are they nuts or have they missed the memo?

#88 Jordan on 05.07.09 at 9:35 pm

One has to wonder where the hell they found B of C governor Mark Carney. The guy comes off as slick as a used car salesman. Give me David Dodge anytime. At least he had a good grasp of what was really going on. I’ve never seen so much baloney and horseshit in my life. And just today, we have helicopter Ben at the Fed telling us that that most banks are OK and won’t need anymore money, yet now I’m reading where they are indeed going to need another $75-100 BILLION in capital…

For crying out loud, how much longer can this clown show continue before we/they finally pull the plug? I’ll tell you one thing: Get Bernanke, Paulson and Geithner before a Grand Jury and I’ll be damn impressed. The whole lot of them should be arrested IMO.

Which brings me to the crisis at GM now. WHERE did all THAT money go? Men who paid into pension funds and paid their dues, only to end up with absolutely NOTHING? Utter nonsense. Someone once asked me what the point was of even working? I have to admit that I really couldn’t give them a straight answer. You do have to wonder sometimes. The harder you try, the more you get shit on. Or so it seems.

I feel especially bad for Generations X and Y who will likely get shafted the most. What does their future hold?

As for my own predicament, I’m currently worth more dead than alive, but as far as my funeral and burial go, they can put me with out with the trash for all I care. I’m gonna decompose either way, and it’s true what they say: you can’t take your money with you… What am I trying to get at here? The cold, hard truth: We come into this world with nothing, and we’re gonna leave with nothing. Last time I checked, 0+0 still equaled 0. Sucks to be alive I guess… You’re right, Garth. I still don’t think people grasp the concept of how big and deep this thing is… That is until it’s gonna be too late.

Cheers nonetheless!

#89 D from London, ON on 05.07.09 at 9:40 pm

#81 Vancouver_Renter

Excellent post! Everything you write is my experience exactly (I was born in late 1963). I don’t expect many Boomers to react positively to your comments – the thought that they might have received many or even most of their “wins’ due to their place in the birth year lottery is offensive to them in the same manner as the dose of reality Garth gives the Vancouverites (and others) who have been quick to pat themselves on the back for their real estate accumen as their house values rose during the recent bubble. No one wants to be told that their wins have a great deal to do with simply being in the right place at the right time, completely by chance.

And as you can see from posts like typical #77 Toronto Renter C9, Boomers can be very, very touchy about the subject.

Maybe I am wrong about what their Dark Knight is – maybe it’s not a fear that the party will end, rather it is a fear of having to reassess their lives and admit to themselves that many of what they see as their hard-won wins might have more to do with when they were born and less to do with hard work and smarts. This would be a bitter pill for anyone to swallow.

#90 eddy on 05.07.09 at 9:41 pm

people with cash have taken a big hit thanks to very low interests rates. the bank gives you nothing, the same cash can generate rental income and equity appreciation with well chosen real estate. with an interventionist government like ours, we are being played like a piano: if Mark Carney holds up four fingers and says there are only two fingers- we are dealing with two fingers. high is low, because Mark Carney says so. ‘how many fingers Winston?’ Carney is telling everyone who cares to listen that he wants to create inflation by printing money, so kiss your cash savings good bye. mtg rates are half what they were 2 years ago= dubble bubble, but no comic strip

#91 taxpayer like you on 05.07.09 at 9:43 pm

“With an RRSP mortgage you want the highest possible
mortgage rate, not the lowest. — Garth”

I investigated this a few years back, and found the following:

1) CRA sets strict limits on the interest

2) You pay it back to your RRSP with after-tax dollars including the interest

Assuming that an existing mortgage was what was paid out by the RRSP. The idea was to make it like any other arms-length mortgage.

So if you pick a high rate you may be paying say $1200 per month after tax. Keep in mind your RRSP is not
making X%, you are simply re-contributing to it at that rate. You then must re-invest the paid back funds at the market rate.

Pick a lower rate and say pay $1000 per mo. That frees up $200 after tax or $250-300 before tax, which could then be contributed to another RRSP (not used to pay mortgage). Garth – has something changed with these?
Thanks.

You need to learn a few things about amortization. And, yes, you want the highest rate. That’s why I’d make the RRSP mortgage a second. — Garth

#92 taxpayer like you on 05.07.09 at 9:50 pm

D from London

The root of your ills is not that you are genX, it is that you consider yourself underclass.

VCR – dont hang out with this guy…….

#93 Bailing in BC on 05.07.09 at 9:59 pm

#50 David Bakody on 05.07.09

Agreed, your plan has a certain elegant simplicity. Quite often the best things to do are the simplest and it only takes a few good moves to make a huge difference in your finances. Unfortunately many (most?) people don’t do the simple math. It always amazes me how otherwise intelligent people don’t get compound interest and amortization’s effect on it.

I could pay off the entire amount in 4 years however since Garth suggests maximising the amount of interest paid into the RRSP I think I’ll extend the amortization out as far as practical and use the cash flow savings to maximise my RRSP contribution and increase my tax refund. This way, hopefully I won’t end up working with Elvis in my old age.

#94 Flip That Bus on 05.07.09 at 10:02 pm

#21 D from London, ON –

Lots of people had it rough over the years bro. You can either nail yourself to the cross over it, or look at the flip side and see what you have now that you can use.

For example, all the poor bastards driving to work before 1990 were doing it in cars equipped with fiendish devices called carburetors and absolutely shitty vehicle construction. The damn things would freeze up, vapour-lock in hot weather, shut down if turning right, and needed adjustment every month. On a new car. Then they’d gum up and wear out.

Need to phone the guy you’re driving to because you’re lost? Better spend the next 45 minutes driving around for a public phone booth that didn’t have the headset torn off. If you were in an urban area at all that is.

Ever hear of having 20 of your own friends shot on campus with automatic rifle fire by troops of your own government for trying to make a political point? (Yes in North America). How about plugging in an appliance and being blown backwards on your ass from a major short (no 3rd-pole receptacle grounding – or double insulation). Asbestos fibers up the yin-yang in every public building?

Smallpox deaths? Wonderful bright red-orange sunsets from nuclear-test debris floating in the upper atmosphere? Cancer from all sorts of nifty things like PCBs and trichloroethane solvent used everywhere? Prohibitions on all broadcast music except classical and country&western? The wonderful static and distortion of AM radio? No radio at all after midnight? No stores open after 6pm? No air-conditioning in nearly every commercial or farm vehicle in mid-August heat, 20-hour cross-Atlantic flights in piston-engined propeller airplanes, impossibly high long-distance phone charges?

And everyone’s favourite – mandatory separate, back entrances into all bars for ‘ladies or escorts’, as well as government-run ‘liquor stores’ (sorry no refrigeration or late hours). Beer strikes by Labatts unions in mid-August, usually just before the first heat wave of the year? Constant use of ‘the strap’ in grade school?

Ever hear of having to ‘block’ up your skis and tennis racket to keep camber and not twist up so that it would be usable at all next week? Shoe polishing every morning before school or work? Boiling your shirts in starch and actually having to *iron* them? Running heavy empty glass milk bottles back to the creamery?

All this shit was still going on in the ’60’s, in major cities in North America, not to mention all the nonsense behind the iron curtain (steam/coal trains, stinky 2-cycle plastic Trabant vehicles, KGB and other government terror, etc.)

That was day-to-day life for over 99% of the population. So give me a major fuckin break.

#95 .rj sumadartsoN on 05.07.09 at 10:11 pm

Almost finished my next book, “Predicting the Future is a Piece of Cake”…

…and Vancouver will become the next Financial/Trade/Culture/Leisure capital of the North America, heck, maybe the world.

#96 taxpayer like you on 05.07.09 at 10:23 pm

Garth – amortization would be the same in either case. You wouldnt use the “xtra” money to pay off the mortgage any sooner. Same number of payments, just slightly more money in each payment with the lower rate.

And we’re still paying back with after tax dollars right?

What would you propose to do with the proceeds from the second mortgage? If I buy stocks can I then pay the interest before tax and effectively “double dip”?

Thanks again

#97 Nostradamus jr. on 05.07.09 at 10:29 pm

Based on Garth’s germane essays…Ontario won’t be a very good place to live in the not too distant future…whether you live in a house, cave or bunker.

…You heard it here first…

#98 Sun Yat-sen suit on 05.07.09 at 11:13 pm

Flip That Bus

You forgot to mention hippies – smelly, unwashed, free-lovin, mud-rollin, bare-footed, drug-induced hippies.

Okay Corgi & Dinky are crude crap by today’s Xbox standards – but boy do they ever hold their value if you kept the boxes…

#99 dbg on 05.07.09 at 11:37 pm

#89 Eddy – “Carney is telling everyone who cares to listen that he wants to create inflation by printing money”

What are you talking about????

Read this

http://www.winnipegsun.com/money/2009/05/07/9378006-sun.html

There is so much info out there why do we have to shovel around hearsay.

#100 dbg on 05.07.09 at 11:40 pm

#94

A ghost writer I hope……. named Betty.

#101 Vancouver_Renter on 05.08.09 at 1:21 am

#93…

Let me dig out my violin out so we can both shed a tear over the beer strikes, twisted skis, shoe polishing, and other tragic and unjust inconveniences experienced by the Boomers. What hardship you faced!

In the mean time, let’s consider a few other facts. While you had carefree free-love and drugs, Gen-Xers stepped out into our single lives just in time for AIDS and the associated fear. That certainly set the tone for the rest of our life experiences. While you had jobs and opportunity upon graduation, we had “not hiring” and a wall of Boomers blocking any career advancement. But, most importantly, your group bought houses for cheap.

Those inexpensive homes put the Baby Boomers years ahead of our generation. Do you appreciate just how significant that tax-free gift was for your group? My older siblings (all born in the mid to late 1950s) bought new houses in the Vancouver suburbs for around $80K in the 1980s. That fast-tracked their path to prosperity. Their mortgages were small and quickly paid off.

Within a few short years, the price of those same houses appreciated to $250K. I had to pay 3x more even though my income was less. It was a huge hit for our generation that set us back, relative to our older siblings. It added a good decade or two in my efforts to catch up to my siblings’ standard of living.

In order to appreciate that setback, imagine the impact on Baby Boomers if they lost 2/3 of their retirement savings or pension benefits today. Wait a minute, that just might be happening! Losing isn’t fun, is it?

One other interesting observation I’ve noted is that most Gen-Xers I know, born around the mid 1960s, grew up learning that “unless you are very clever and strategize, you lose”. As a consequence, many Gen-Xers I know are now much more diversified in their investments than are Boomers. Most of my Gen-X friends have very large cash contingency funds, live well below their means, have no debt, and have hedged themselves for financial hardships ahead. Compare that to the Baby Boomers I know who have 85% of their net worth in real estate and the balance in mutual funds that they don’t understand and that “will hopefully recover soon”!

#102 Chris in England at the moment on 05.08.09 at 6:19 am

Dear Gen-Xers, I am reading the “bitter” posts with some amazement here. I have never heard anyone here in the UK go on like this, even if they were born in 1964-65. Was this inequality only happening in Canada? One thing jumps out at me – how following the herd worked for the Boomers but the Gen-Xers got screwed. Are we all to jump off the cliff just because a large crowd did 10 minutes ago and landed on a luxury yacht that happened to be sailing by?

It is not thinking for ourselves that results in our lives being buffeted about on the whims and trends of the world. I have never done something just because everyone else does, and in fact what I am doing now sets me completely apart from everyone I know! How will it end? Who knows, but I’m going to do it anyway.

If we follow the crowd because it looks an easy route sometimes things may fall our way, sometimes not, but there is no substitute for thinking for ourselves, which is what Vancouver_Renter did by putting him/herself through university and starting up a successful business instead of just getting a job.

We must work with the times we find ourselves living in, not mourn what we perceive as a denied opportunity. Of course it’s not fair that I didn’t get the chance to be Queen because that cushy job had been taken by someone older, but I found other employment.

I really don’t think we can look at the apparently glittering lives of the despised Boomers and sum them up with accuracy today as though “THE END” has already flashed up on the screen and nothing further will occur. Their lives are about to change as so many here point out. The good years may turn into lean years, and I don’t know about anyone else, but I prefer my lean years to have been back in the days when I was young and energetic than to be faced with them at a time when I might be unemployable, ailing in health and with no opportunity to rake the losses back again.

So, Gen-Xers, celebrate your youth -the wheel has turned and the Boomers are heading to the bottom. Dry your tears and look for an opportunity. If you cry too hard you won’t hear the fat lady sing!

#103 CalgaryRocks on 05.08.09 at 7:21 am

#100 Vancouver Renter

Don’t forget that the new generations also need advanced education for which they pay dearly. Young people have tens of thousands in debt even before they land their first job.

Whith that job, which is more often than not, a contract, they need to pay for their basic needs, reimburse student loans, save for a home and pay increased taxes used by governments to support baby boomer pension plan shortages.

But what surprise! Retiring boomers can now split their pension income thus contribute even less to cleaning up their own mess.

#104 D from London, ON on 05.08.09 at 8:15 am

# 100 Vancouver Renter – excellent post, again. I too laughed at FTB and his/her trivial trials (most of which we faced too – we are in our 40s not our 20s as FTB seems to think). Having to use a wood block to keep your tennis racket straight hardly compares to lack of jobs and a tripling of real estate costs.

Like most people our age I agree that we are far more flexible, forward planning and risk adverse than our Boomer siblings. If I am not mistaken, it was one of the intentions of Garth’s original post to point out that the inflexible, poorly planned and risk-heavy strategies of the Boomers that is going to lead them to have to work at Wal-Mart in their golden years.

# 101 Chris – Most Gen Xers would agree with the contents of your post, save for the last paragraph. We are in our early & mid forties, and sadly that is hardly youth. Despite what marketers say, 40 is not the new 20. We spent our youth making our own opportunities out of very lean times. Do not make the mistake of thinking we sit around crying in our beer. Vancouver Renter’s experiences are the rule, not the exception.

You keep mentioning that the world is not parsed this way in England. The 20 years after WWII were experienced very differently in North America than the UK. You mentioned that you plan to move to Canada. I suggest you spend some idle time investigating the impact of birth demographics on our experience. A good place to start wrt the effects of the Baby Boom from a Canadian perspective are the books of Dr. David Foot (born in England, which you should appreciate!), :

http://www.footwork.com/book.asp#21c

Free articles by Dr. Foot are available at:

http://www.footwork.com/index.asp

#105 PTDBD on 05.08.09 at 9:48 am

It’s interesting that some are sowing the seeds of an age gap hate fest on this and other Blogs. We form generational gangs and squabble amongst ourselves on the trickle down garbage heap for the choicest leavings and berate the elders for having feasted when the goods were less rancid.

Meanwhile, we ignore the huge disparity of the high and mighty wealth gap which increases every year with every government. The latter is the true source of our condition and the only one that we can control should we dare to exercise our rights.

#106 Bill-Muskoka (NAM) on 05.08.09 at 9:52 am

#93 Flip That Bus

Hear! hear! They are two fundamental clicks short in the making of a clue!

We have seen more innovations and a lot of simply unnecessary gadgety crap in the past 60 years than one can recall. Nowadays we hear about ‘Peak Oil’ but how many realize all the plastic China is pumpin out is made from that very same oil?

I keep saying our grandkids have half of the Tar Sands in their basement as plastic toys. LOL

Then we have the landfill problem from all the disposable junk that is fostered on us. Companies constantly changing products, especially electronics like cell phones, just for the sake of change with no real improvement in functionality.

Yes, ‘Wall-e’ will be our future. It used to be we kept things for decades and they remained quite usable. Not today!

Technological progress is nice, but societal progress is the key. We are techo trend slaves to mindless marketeers. Talk about living in the Matrix? Most are doing just that! Baaaaaaaaaaaaaa!

#107 Bill-Muskoka (NAM) on 05.08.09 at 10:00 am

#103 D from London, ON

The main reason Boomers will be working at WalMart can be readily traced back to arseholes like Dim Jim Flaherty and the destruction of their life savings by the IT scandal. Add to that the completely insane markets created by the younger generation of greed working as ‘Traders’, and piss poor management of corporations, together with corrupt politicians.

Yeah, we worked, we saved, we were tsunamied by those behind us. Worst mistake we made was to trust anyone.

Well, we will be leaving soon, and you created the current world as you spinelessly sucked up to your ‘Boss’ throwing out the ethics we lived by for the ‘Fast Tracked’ ladder climbing. Enjoy the Brave New World you created. Soon we will be saying ‘I’m outta here!’

#108 Chris in England at the moment on 05.08.09 at 10:01 am

D from London #103

While I am not about to buy a book (I’m bringing about a thousand of them with me) I will read the free articles with interest. I am old enough to have kept a wooden tennis racket in a block, but agree that it hardly blighted my life. Obviously different countries were (once upon a time) different and now they are not, so as we can all share the current global turmoil, our experiences from 30-40 years ago are probably quite contrary.

England is well known for its moaners (whinging poms as the Aussies call us) though they are generally moans about the weather or dark mutterings about “them”, whoever “they” happen to be at any given time. Maybe our old-fashioned class divide occupied us more than any notion of what Boomers sucked out of thin air to deprive those following behind.
Perhaps Boomers didn’t really exist in this country to the same extent. The explosion in home ownership only began in Thatcher’s reign (yet another who managed to find a toe-hold having been barred from Queendom). Before that, I can honestly say most of the families I knew did not own their own home and lived from one pay check to the next.

Bearing this in mind, heaven knows how I managed to buy a house myself, as not only am I too young to benefit from being a Boomer, my very young parents were just that bit too old – so two generations fell through the cracks and were cruelly deprived of Boomerism!

Still, I shall dust myself down and soldier on. All you Gen-Xers sound like you are doing OK to me. If I can see that, then surely you can too. Forget what others may have been showered with in the past. It really doesn’t matter. It only goes to show what damage labels can do. Do not be doomed by your designated label! As Patrick McGoohan said in the cult TV series ‘The Prisoner’ … “I am not a number, I AM A FREE MAN!” (Did you get that in Canada?)

We are not labels, we have free will. [Comes over all teary while typing such inspirational words]

“Despite what marketers say, 40 is not the new 20. We spent our youth making our own opportunities out of very lean times.”

My point exactly, and now you are 40[ish], having weathered the lean times, and like all action heroes, the experience has made you leaner, meaner, stronger, faster.

I simply don’t know anyone here that didn’t have to work hard in their early adult years to get along. That’s what I would call normal in fact – though as I remember the 60s very well, and all the inconveniences named in FTB’s post – perhaps I am psychologically damaged after all and refusing to admit it (who do I sue for that?).

Life is what we make it. It is no-one’s fault what decade they were born in, nor the letter of the alphabet their generation is classified under. Resenting the circumstances we were required to operate in as younsters is a waste of time. You did it, you survived, and I did it and survived too, even though I didn’t know I was doing it. (Those Damned Boomers).

#109 Bill-Muskoka (NAM) on 05.08.09 at 10:18 am

#101 Chris in England at the moment

Maybe the reason is the music (what they call music) the Gen-X’rs listen to? They are protesting everything just to have something to say. They live to party, yet most seem to be enthralled playing some form of legend in their own minds.

Sadly, every generation has its own good, bad, and ugly. Boomers were subordinated to their parents generation who came from the Great Depression I and WWII. God, I am soooooooooo sick and tired of hearing about WWII!

The U.S., especially, glorified that period as their HeyDay of greatness. I put it in the same category as Christopher Columbus and his band of profiteers, the original cast of Lost! Nice legends, but the facts are a real pisser.

I, for one, have sat and watched in utter shock at how people, of all generations, seem to have forgetten that there are generations following behind them. The key thing being housing prices.

Now, why did so much money go into real estate to begin with? Tax Laws. That is the plain and simple TRUTH! The reason it has happened the way it has in North America is because the American Right abhors social anything. Therefore, they wrote tax laws that protected the greedy and unethical, and left the masses to fend for themselves. Now, that is being unravelled on a global scale.

Europe understands the true costs of not having some socialism and therefore has gone down a separate path. Unfortunately, too many bought into the American Dream. Note: the key word is DREAM!

We barely have a country left, just factions in conflict with each other.

#110 PTDBD on 05.08.09 at 10:27 am

Green Shoot News Prestidigitized from Cow Patties:

– Molly the Cow escaped from the slaughterhouse by boldly running down the street. As a reward for her audacity, she will reside on a farm with her friends and feed contentedly.

– The Chairman of the Board of the Federal Reserve Bank of New York, Stephen Friedman, resigned from his position. It was reported that he had made sizable, but pefectly legal, purchases in Goldman Sachs.

– Fannie Mae is going to the Treasury for more paper. They lost 23.2 billion. (that was much less than expected…expectations of loss will be increased, so the news will be even better next time, going forward)

– U.S. unemployment was much less than expected with public payrolls rising by 72,000. More than 1.4 million people will be hired for census over the next year. Perhaps the cesnsus should be done every year.

– Canada adds 35900 self-employed …(Blog posters? Book writers?)

– oh, and the Stress Tests…take a pill and call da Fed in the morning

#111 Bill-Muskoka (NAM) on 05.08.09 at 11:51 am

#107 Chris in England at the moment

Yes, we got ‘The Prisoner’ in North America. Also ‘Monty Python’ (Gawd, how I love that show…Still!), ‘Benny Hill’, ‘As Time Goes By’ (My wife loves it and has the entire show on DVD’s), ‘Fawlty Towers’, ‘Yes, Minister’, and the classic ‘The Avengers’ which I have the movie remake of. What class they had. None of the typical Rogue Machismo that America is so infamous for.

As to ‘who’ ‘They’ and ‘Them’ are. Well, it has been well established that ‘They’ are ‘Us’ as Pogo said ‘We has found the enemy and they is us!’

Personally, I prefer the explaination proffered by Tommy Lee Jones ‘We are ‘Them’, we are ‘They’, we are the Men in Black!’ LOL I also love his line ‘We at the FBI have no sense of humour we are aware of!’

Regarding the origin of the Boomer Generation. well, I am one of the Original Boomers. Now, I date the start to the first births following the end of WWII in the States. August 15, 1945. Everyone was so ecstatic the war was over they copulated madly. The first births of that meelee of joy occurred in the Spring of 1946.

People were not thinking ‘Oh, we have to replace all the people lost in the War!’ No, they were simply being human and celebrating, not to mention a helluva lot of really horney soldiers who came home. It produced one of the largest recorded birth rates in history and became known as the ‘Boomer Generation.’ Probably because of the first use of the Atomic Bombs. Even the nuclear subs that carried the missiles became known as ‘Boomers.’ The name was the creation of the MSM, as usual.

The Cold War that followed, along with the Korean and VietNam ‘wars’ (actually Police Actions) created a generation that grew up in fear and uncertainty. We were somewhat different than our parents generation because we asked ‘Why?’ The denials that were fed to us caused us to ask ‘Why?’ even more.

Some dropped out, the Hippies, but they were a small minority of the populance, and would have gone unnoticed had it not been for two things, their protesting of the Viet Nam War, and the MSM who found them to be a great diversion to keep the American people focused and inert on fighting Communism.

Many Americans referred to Canada as a ‘Pinko-Commie Nation’ because Canada instituted a National Healthcare Program.

That battle continues on today and Americans are not buying it anymore. They want to become a member of the truly civilized nations of the Western World who care for their own. No one should be forced to choose between life and bankruptcy.

Here is an article in today’s news illustrating the very fact, albeit to the shame of most Canadians.

Canadians star in U.S. ads decrying health care

Not surprisingly, it appears in one of our most Far Right Conswervative rags, pretty much like Fox (Faux) News in print.

Have to run. Have a good day.

#112 Vancouver_Renter on 05.08.09 at 1:43 pm

I can’t speak for all Gen-Xers, but I can speak for myself and my immediate friends who were born in the mid 1960s. Do you know WHY we are bitter? It’s not because I long for the “success by default” lifestyles of the Boomers.

I’m bitter because society equates success with intelligence and hard work. While failure is assumed to come from foolishness and lack of effort.

So in my group of friends, our older Boomer siblings enjoy fancy houses, big incomes, and plenty of wealth – and achieved all this at an early age. On the other hand, all of us Gen-Xers have always been the black sheep of our respective families. We’re the ones who struggled, failed, and repeated changed directions in response to that failure. We always seemed to be spinning our wheels.

So within our families there has always been underlying suspicion that we are less intelligent or not as hard working. Like Rodney Dangerfield, “we don’t get no respect”. The wealthy Baby Boomer siblings and cousins enjoy tremendous respect in the family, while the Gen-Xers, living in a rental houses and decades behind their siblings financially, are considered to be underachievers.

I’ve heard countless stories from Gen-Xer friends on the pressure they’ve encounted to “go do what your brother/sister did”! It’s frustrating for us.

#113 Chris in England IG-AZ at the moment on 05.08.09 at 2:03 pm

During my journey into work this afternoon I thought long and hard about the fact I have no label, unlike the Boomers (spit, curse) and the Gen-Xers. As I have been living label-free in a purely alphabetical way, I thought it was time to join the masses. Anyone born in 1957 is welcome to join me as an Inter-Generational A-Z, (“IG-AZ”) as we neatly encompass many experiences from the past 50 years.

This label is for anyone who made do with a wooden tennis racket; watched their childhood TV programmes in black and white; bought hundreds of vinyl LPs, only to buy them again on cassette tape and then again on CD. This makes me wonder if the Boomers (curse, spit) might have genuinely needed all that money and big houses for their music collections, but then again they could probably afford it more easily than I could (damn their eyes).

The IG-AZs are, as befits the modern world, “inclusive”, so we praise and condemn all generations in equal measure (motto: “Go on, you know you want to”).

Bil-Muskoka (NAM) #108: “Maybe the reason is the music (what they call music) the Gen-X’rs listen to?”

Yes, narrow genres of music never did anyone any good, but what can you expect from people with mainly lower case labels? Bearing this in mind, on my way to work today I ranged through the decades, listening to the Chemical Brothers, Euro trance music and the Mamas and the Papas, though not at the same time obviously.

“We barely have a country left, just factions in conflict with each other.”

Same here. The European socialist dream is also just a DREAM. There is always someone at the top dictating to the masses.

We should all be nicer to each other.

#114 Sean in E-Town on 05.08.09 at 2:43 pm

“If you think an income of fifty thousand is excessive, feel free to live on half that. Once oil is back to $100 a barrel, that should be lots of fun.”

Oh, it’s quite true that there won’t be a car in every garage, once again an incentive to reduce your exposure to energy prices now with public transit. Plus how many Toronto car commuters can do Sudoku on their way to work? Or read the paper? (Though I’m sure to many it seems that they do.)

#115 Bill-Muskoka (NAM) on 05.08.09 at 5:14 pm

So in my group of friends, our older Boomer siblings enjoy fancy houses, big incomes, and plenty of wealth – and achieved all this at an early age. On the other hand, all of us Gen-Xers have always been the black sheep of our respective families. We’re the ones who struggled, failed, and repeated changed directions in response to that failure. We always seemed to be spinning our wheels.

#111 Vancouver_Renter

Where did you get that propaganda from? Talk about a whiney generation? You are it!

We struggled through no labour laws, and all types of changes your generation is now benefiting from. That’s OK, you will learn reality.

Do you think WE did not live through all your life’s changes? We surely did, and the greed that followed behind us has devoured much of what we struggled for.

We had prosperity at times and devastation at other times. Welcome to the Real World! We just kept getting back up and gave your generation their start. Then you want more and more. Well, sorry Kid, wallet’s empty!

Try watching ‘The World’s Worst Jobs’ and get an appreciation of how easy you actually have it nowadays.

You have been spinning your wheels mostly because you refused to learn to think critically. You just blame everyone else. Like a Street Racer burning the rubber off their expensive tires and caring less about others, then wondering why the rest of society shuns some of your antics? Get a clue!

That is to you, not the fine members of your generation who face reality. If you live in Vancouver that alone says a lot about your lifestyle philosophy.

#116 Bill-Muskoka (NAM) on 05.08.09 at 5:15 pm

#112 Chris in England IG-AZ at the moment

So, what is your opnion of Sweden?

#117 Chris in England IG-AZ at the moment on 05.08.09 at 5:35 pm

Vancouver_Renter #111: “On the other hand, all of us Gen-Xers have always been the black sheep of our respective families.”

Maybe it was all that terrible music Muskoka-Bill mentioned. If you had been playing Perry Como it might have been OK.

My mother spent years screaming at me to turn the music down, and now my 13 year old son yells at me the same way. Families criticise, they think it is their job. In order not to hear any more unhelpful criticisms I suggest your herd turns the music up louder.

#118 Dan in Victoria on 05.08.09 at 6:03 pm

Post#112 Chris,what no T Rex?Post#110 Bill those are great shows!My parents couldn’t understand Monty Python,We’re getting repeats of On the Buses here right now.

#119 Chris in England IG-AZ at the moment on 05.08.09 at 6:05 pm

Bill-Muskoka (NAM) #110:

“Everyone was so ecstatic the war was over they copulated madly.”

Perhaps we should all do this when the current recession/depression is over.

#120 Vancouver_Renter on 05.08.09 at 7:00 pm

114… You said, “You have been spinning your wheels mostly because you refused to learn to think critically. You just blame everyone else.” You also claim our generation “lives to party” and we “protesting everything”.

Like I said previously, the further away an individual is from being born in the 1964/1965 Gen-X sweet spot, the more likely he/she just won’t “get it” and will look at you as if you are just a whiner out for sympathy for your own personal failings.

You are CLEARLY a front-end privileged Baby Boomer who has little or no clue what our group experienced relative to our older siblings. It would be the equivalent of me pretending to intimately understand the socioeconomic challenges of my 20 year old nephews and nieces. I don’t. At least, unlike you, I can admit to that fact.

#121 taxpayer like you on 05.08.09 at 8:03 pm

118 Chris

Why wait??

#122 Chris in England IG-AZ at the moment on 05.08.09 at 8:53 pm

Bill-Muskoka (NAM) #115: “So, what is your opnion of Sweden?”

I have never been to Sweden, though I’ve been to Finland a couple of times. My husband’s friend married a Finn and they live up above the Arctic Circle in Sweden where she is a doctor at the hospital in some remote place. As far as I am aware, the Swedes pay a fortune in tax, but they see a return on it from a social point of view, and think it well worthwhile. I’m not sure of the exact figures, but though we pay less it is probably not a lot less (some of it raked out of our pockets in stealth taxes) but the big difference is we don’t see a return on it, our country is a shambles, nothing works properly and we are less than satisfied. If our public services were efficient and well run I doubt we would mind paying for them. Is Sweden in the EU? I seem to recall finding Swedish Kroner somewhere in the house last week so I don’t think they use the euro. One of the biggest rants it is possible to get out of me is my Rant on the European Union, which is steam-rollering and standardising all member states. Does anyone really want to visit Europe and find there is little difference between one country and another? I don’t!

Dan in Victoria #117: “Chris,what no T Rex?”

Bugger! I missed a musical decade on the way to London – very remiss of me. Led Zeppelin tomorrow then (don’t have any T-Rex, though I once worked in an office with someone who knew Marc Bolan’s aunt).

#123 Chris in England IG-AZ at the moment on 05.08.09 at 9:08 pm

taxpayer like you #120: “Chris Why wait??”

Well I don’t think the recession/depression will be over before I leave the UK, and I’m not sure if this kind of thing is permissible in public in Canada. I am already having a problem with the alcohol situation, and the fact I can’t just buy it anywhere and drink it anywhere, so copulation restrictions would have a serious inhibiting effect on my spontaneity. I’ll have to think about it. I might buy a house when it’s over, I might copulate madly – we’ll see.

#124 Bill-Muskoka (NAM) on 05.09.09 at 8:21 am

#119 Vancouver_Renter

LMAO! Who were your parents? Were they conscious through your youth? I have children from your age group, actuall;y a little younger, who now have children. Do I understand their situation? Absolutely. In fact, it greatly saddens me when I look at the cost of things today compared to back when you were born. Inflation has been the greatest destructive force in my lifetime.

Today we get all excited over a $10/hour Minimum Wage. Well, back in the 1960’s Minimum Wage was more like $1 per hour. $5 per hour was a livable wage, and $10 per hour was Fat City.

Granted there are those who have greedily taken all they could get, but I am not one of those. In fact, I stand firm that wages have not even come close to keeping up with costs for all of us.

The moronic MSM thinks everyone is making $100,000 a year. They are NOT, except managers working for a government body, and not all of them either!

BTW, if you were born in 1964 you would be 45 today. It sure was not we Boomers who deprived you of anything, but yourself. Bad marriage perhaps? Rebel mindset that people reject? You are no kid, but you sound like one. You should be so lucky to have the youth you do. Wait another 15-20 years and find out was life is like. You are in your Prime right now! Enjoy it.

Sounds to me like you have a lot of hatred towards those who are older thinking all we older people are uncaring and in a conspiracy against your generation. Hell, we gave you birth. Maybe you need to clean up your act some and listen to sound advice? That is the true mark of a mature person. Like I said to my son when he was 16 ‘Why don;t you go out, get a job, rent an apartment, by a car while you still know everything?’ Pretty much as my father tried to get the poijt across to me. In fact It was almost an Einsteinian Revelation how smart my dad became between my age of 18 to 21. Wow! Suddenly reality was upon me and the Old Man’s advice was TRUE!

Your view that all Boomers had it easy is based on ignorance and propaganda. We did not, not even close. Perhaps some did, but a few does make a whole generation. In fact, we faced the same problems your generation has only back then it was just Tough Shit because there were few laws to protect people against discrimination and unfairness. We demanded a lot of those things be changed so you would not have to experience the same demeaning treatment. Maybe we should have left things as they were and just let Natural Selection do its thing?

Try getting to actually know some Boomers. We have a lot of wisdom we accumulated over the past 60+ years. BTW, psychology has found that people tend to enter the Age of Generativity at 40. That is when they start having a need to transfer their experiential knowledge to the generations behind them. The difference from my parents generation and my own is my attitude is I will share what I know, and if you choose to use it fine. If not, then that too is fine. I have no delusions I am going to force another to change. I can merely share experience and then they have to take responsibility for their own choices. Not my problem at that point.

#125 Stretch from over yonder on 05.09.09 at 9:38 am

What Garth talks about is very true. I can think of two sets of close family friends who have had ‘the carpet pulled out from under them’. The first example is an accountant who is only given the crappiest auditing jobs in odd locations that nobody else wants to do after he was laid off from a big bank. The pay is poor and is travelling more now in his mid 60s then he ever did before.

Then there is a couple in their 70s, who never saved a dime, spoiled their kids and now have had to sell their home and all their belongings just to survive. One is now in failing health and cannot work.

These people were a big part in my life growing up and its awful seeing what has happening to them today. These people have worked all their lives and deserve a rest but it is not going to happen.

Sadly I am pretty sure these are not the only ones this sort of thing is happening too. Just walk into Walmart and you’ll see exactly what Garth is talking about. The concept of retirement is changing radically.

#126 Pat G on 05.09.09 at 9:21 pm

#27 Bill Muskoka (NAM)

Hi Bill.

Only drop in now and then because there’s still a bit of the addiction left but I have a different impression of how Wal-Mart treats its employees.

We had a young girl live with us for a while.Her mother was in very poor circumstances and she had never met her dad. She got a job at Wal-Mart and was a very faithful, hard-working employee. She worked extra shifts whenever they called her and especially at Christmas time, she just about made herself sick trying to work long, long hours and extra shifts. One could see that they took advantage of her. She never turned them down.

Wal-Mart held a collection of things to be given to some charitable organization and she brought the stuff home every night and sorted it and got it ready for the day it would all be turned over to the charity. Guess whose picture was in the Mississauga News with the reps fom the charity? Well, it wasn’t the little girl who did all the work on her own time. It was senior store personnel. And how did they repay this little girl? Well, she was dropped right after Christmas. I could have cried for her. This left a really terrible taste in my mouth and I do not patronize Wal-Mart — especially after all the other stuff I’ve read and heard about how they squeeze their suppliers who have to cut wages for their employees to keep the Wal-Mart accounts. Just not fair!

Cheers, Bill. Hope you are well.

#127 Vancouver_Renter on 05.10.09 at 4:56 am

#123… Bill, Bill, Bill… Why does it always come back to the assumption that I personally must be a failure to cite the hardships of my Generation? Not the case… happily married, wonderful kids, and a net-worth that would surprise you.

I am simply speaking for all my friends and colleagues, born in that 1963-1965 Gen-X sweet-spot who discovered, like me, that the simple formulas that worked easily for their older Boomer siblings did not work for them. Boomers like yourself, who won the birth-year lottery, pat yourself on the back and tell us that all we needed was your work ethic and intelligence to realize the same success. That is EXACTLY what we’ve been hearing all of our lives, and many of us are fed up with that fallacy.

I don’t think that you will ever understand (because you appear to do a lot of talking and little listening) that your “sound advice” DID NOT WORK for our generation. The only reason I personally succeeded and was able to sell my business interests and retire at age 37 was because I figured out that I had to be a contrarian. I did the exact OPPOSITE of what all my Boomers siblings and their friend advised me to do.

#128 Bill-Muskoka (NAM) on 05.10.09 at 9:22 am

#126 Vancouver_Renter

So you made a lot of money fast did you? Who is the problem?

Now that you’ve ‘retired’ what will you do with the rest of your life?

#129 Bill-Muskoka (NAM) on 05.10.09 at 9:29 am

#125 Pat G

Did she choose to work all those hours? Unfortunately, sometimes people do get laid off, and often for reasons they do not share.

As to the charity thing. If recognition was the goal, then I would say that would be the wrong reason for contributing. It is natural that the company reps are given the credit on behalf of all the employees who contributed.

Just to keep a fair balance to it all.

We have all gotten the shaft in employment if we have worked any length of time for others, or even for ourselves.

Regardless, good story. Thanks

#130 Vancouver_Renter on 05.10.09 at 12:15 pm

#127… “So you made a lot of money fast did you? Who is the problem? Now that you’ve ‘retired’ what will you do with the rest of your life?”

Since when is starting 4 businesses, working 60 hour weeks continually for 2 decades to build equity (that’s no exaggeration – ask my wife), strategizing, creating jobs for many people, risking all of my own capital, , etc “a problem”? My accounting records show that I’ve already contributed over $1M in income taxes in my lifetime so Boomers could enjoy various benefits that won’t be available to Gen-X.

I cashed out when a private equity fund bought us out. Since retiring, I started another engineering business to keep me occupied. Business is VERY SLOW since late last year, so I spend 1/2 my time enjoying outdoor activities with my wife and kids and the other 1/2 of my time managing my portfolio – and watching in amazement at how most Baby Boomers don’t recognize nor prepare for the financial train wreck that is coming.

#131 Bill-Muskoka (NAM) on 05.10.09 at 5:11 pm

#129 Vancouver_Renter

Good for you. Seriously, I hope your family is happy and has had the time to know Mr. Achievement?

BTW, how would all those employees rate you?