Tim’s 54 and wants to retire in six years. “I’m one of the lucky guys,” he chortled. “Got a government pension.” And he’s right. Just over 70% of Canadians have no pension – corporate, military or civil service – to look forward to, let along one that guarantees 60% of your salary, indexed to inflation.
But Tim, like so many teachers, cops and government workers I’ve met, has PD. That’s Pension Delusion, which leads him to think this big pot of cash eliminates the need to save or invest his money. As a result, he’s got less than a hundred grand in do-nothing, cost-a-lot mutual funds stuck in RSPs for him and Joan. Got a paid-for house, too, worth about $250,000 a half hour south of Winnipeg.
We crunched a few numbers yesterday. Sixty per cent of his $95,000 salary is $57,000 a year, which is $38,000 less than he lives on now. Add in early CPP, and it’s still a $32,000 shortfall. “But I’ll spend less in retirement,” he argued, which is (of course) a myth. People who retire at 60 don’t stay home all day so they can read, knit and get naked. In most cases, spending goes up, not down.
If he cashed-in the taxable RSP funds and used them to supplement his income, that’d last four years. Then what?
Two choices: live small, or sell the house.
The former sucks. The latter rocks.
By adding $250,000 to his portfolio, cashing in the blood-sucking mutual funds and investing in a balanced and diversified portfolio averaging 7% over a number of years (most earned in low-taxed dividends and capital gains), he’d add $24,000 a year to his income. That would easily rent a nice, 2-bedoorm condo in The Peg ($1,100 a month), eliminate overhead (property taxes, maintenance) and boost his income back to 85% of his former salary. Plus, he’d have a $350,000 liquid nest egg, instead of a $250,000 encumbrance. From KD to soufflé.
In a nutshell, this is another reason why real estate has a troubled future. There are 9,000,000 people like Tim and Joan representing 32% of the Canadian population – and three-quarters of them don’t even have guaranteed pensions. The vast majority of personal net worth for this entire generation of wrinkly, confused hedonists is buried in residential real estate. Personal savings have dropped, debt has risen, RRSPs have plopped, HELOCs have sprouted and most people (as evidenced by this pathetic blog’s comments) don’t trust financial markets and weirdly believe everything [email protected] tells them.
So, they either sell now, while markets are still juiced, invest and prepare. Or, try to sell later when a few million others are doing the same, and discover it’s impossible to unload in a falling market except for far less. But that’s what most will do. Like Tim they’ll underestimate living costs, think keeping the house means cheap living, invest what little they have in the wrong places, be surprised at how cheap CPP is, and be shocked their real estate’s turned illiquid.
Guaranteed. This is the world, post-2015. Boomer bust.
Given the certainty of this outcome (along with all the draconian mortgage changes outlined here over past days), buying a house would seem to be pure risk. Especially in hot markets with bidding wars and fat prices. Odds are that 2012 values may not be seen again for many years. In fact, if even a portion of the Boomer horde dumps their real estate in favour of cash flow and liquidity, prices will be far lower for far longer than most people believe possible.
Already a third of folks going into retirement do so carrying mortgage debt. A BMO survey finds 42% of Boomers regret not having saved or invested enough. In the US, where real estate equity’s all but vanished for millions, the lunacy of thinking a house is a retirement plan has been exposed. The average balance in 401(k) retirement plans (like our RRSPs) at one major fund company is a mere $60,000 for this age group.
And while there are endless comments on this blog from young people trashing Boomers for making houses unaffordable and sucking off all the jobs, the outcome could be steeped in the unexpected. According to a prominent US economic prof, this will be the first generation since the 1930s worse off in retirement than their parents.
“According to our projections, it looks like most middle-class workers, not just low-income workers but most middle-class workers, will be living at or near the poverty level in their old age. This is the first time since the Great Depression we are looking at poverty rates increasing among the elderly.”
Is it a coincidence home ownership is now estimated to be 81% among Canadian Boomers, the highest on record?
Nope. Millions have pinned their entire financial lives on a single asset, failing to understand house prices shot higher when they all clamoured to buy, and will do the opposite when they stampede to sell.
Smart people contemplating retirement will get out now. Most will not. That, in turn, will seal the fate of the young and the horny, so blindly covetous of home ownership.
Irony. She’s a bitch.
223 comments ↓
First!
First!
First! From daytona
Garth: Tim’s house seems pretty modest compared to some of the castles you’ve been railing about.
If he increases his income (and uses all of the excess for rent, as you suggest), might he not be opening himself up for clawbacks? Dividend income is tricky because of the gross-up.
At least he is not paying any income tax at all on his home. And if his mortgage is paid off, and kids (if any) are self-sufficient, he may well need less money.
What to do….what to do….
Don’t care if I am first…………
PD – Pension Delusion – what’s worse, with the markets flat and lifeless – many pensions have lost a ton of money and stand to lose even more – there will be many folks surprised to see how little their pensions have grown and others surprised to see much money their pensions have lost – just look at the 5, 000 americans that turn 50 every day – many who have seen their house values and pension nesteggs evaporate in recent years
2015! I had bets on Fall 2012 for the mainstream to figure out we’re on the real estate Titanic. Just a tragic thought – won’t Retired Boomers with their massive and selfish voting capacity just elect politicians who will keep pandering to this group in their financial delusions at the cost of new generations and the environment?
Is F cutting government pensions in the budget? (especially for appointed senators and similar positions)
If not, how can he justify the OAS cuts and massive layoffs?
(and prisons and planes)
The sunny weekend here in Metro Van must have brought out all the buyers with bundles of cash.
The open houses were bustling in our neighborhood.
Thank God we don’t need to buy a place to live at these prices….and don’t laugh it’s paid for.
Our dollar is still no higher in value than the US dollar
Could it be that owning gold and silver coins is a better long term option for an individual than having money in the bank ?
Preaching to a civil service worker about investments is like talking to a rock. This is not a group that will ever sell their house and invest in the stock market.
This group has held on to their do nothing day gov’t job for 30 years exactly for one reason…they don’t do risk. I have friends working for gov’t and couldn’t even imagine putting $5,000 into the stock market.
After taxes his take home will be about $40,000….take $12,000/yr to keep that house going and another $10,000/yr in incidentals and his discretionary retirement spending each month comes to a paltry $1500. Not too much to look forward to after 30 years in a cubicle.
He11 my father cashed in last year and sold, pushing 90 years old and now rents.
The Local Authorities Board absolutely hate him cause he should have been dead 15 or 20 years ago according to their numbers.
Nope, mom and dad are still cashing in those city pension checks. lol
Now for us boomers, they changed the pension and it all relies on the stock market.
I don’t even have a pension so I’ll work till I drop, where as B-law has contributed to a pension for 31 years and could retire now if he wanted but his pension account sits at 500,000 before tax. He’s good for 10 years maybe?
He knows it and isn’t retiring.
Great picture..LOL
ROFL, here’s a real estate agent hard at work:
http://www.realtylink.org/prop_search/Detail.cfm?MLS=V904147&REBoards=All&From=MLS
See if you can spot what’s wrong with those pictures. I wonder if this is a full time agent, of just doing it on the side like most.
Are my parents screwed even though they could possibly sell an SFH in northeast Oakville, a fast-expanding and highly desirable neighbourhood to live in? They are currently mid- to late fifties and the mortgage is not paid off.
Seems to me like Tim has a pretty good situation. Although the housing market most likely will correct he has a paid for asset, a roof over his head, why should he risk this to potentially generate another 20% in income? What about increasing inflation? Maybe he should just invest the $100000 he has saved into a ‘balanced portfolio’.
Agreed with this post. Larger houses (unaffordable now) will be hit first and will see steeper drops in prices than cheaper units. Our pathetic, decrepit, weak boomers will soon be taking a stroll down poverty lane, and they can only wish upon a star that their homes maintain their value. But let’s not kid ourselves… they won’t
I can’t understand anyone who would buy a house at this point in the game. There are still so many people who think they can turn out a profit by tuning into their favourte shows “House Flippers”. Just watched it the other day and thought both people were douchebags. How many copycats do we have here in Canada?
How so many simple-minded people we have here that think that it’s just a subtraction of the purchase price and selling price without looking at all the costs involved. I try to hold my laughter in when I hear people telling me their “profits”… I’ll usually put them in check by asking them a question like, no realtor fees? no reno fees? They adjust their calculation and all of a suddent things aren’t looking so good anymore
Looking forward to the end of this non-sense and can’t believe that people are still in love with real estate. True consumption without really any benefit to society, all their stainless steel and granite… But my options are all open and I can move anywhere in this country or even another country. Hoping for some harsh rule changes next week as nothing will affect someone like me who has the cash to buy a house straight-up. Well, maybe not in Greater Vancouver… but I don’t live there. Alright I’ll shut up now
Abbott and Costello seek psychiatric help from Dr. Strangelove
*
Q. What is the best birth control method for really old seniors?
A. Nudity.
Q. What’s the most useless thing in Grandma’s house?
A. Grandpa’s thing.
The nice thing about being senile is you can hide your own Easter eggs.
—–
Two old women were sitting on the bench talking, when one asked the other,
“How’s your Paddy holding up in bed these days?”
The second old lady replied,
“He makes me feel like an exercise bike.”
“How’s that?”
“He climbs on and starts pumping away but we never get anywhere!”
—–
Just before the funeral services, the undertaker came up to the very elderly widow and asked,
“How old was your husband?”
“98,” she replied. “Two years older than me.”
“So you’re 96,” the undertaker commented.
“Hardly worth going home, is it?”
*
“Just over 70% of Canadians have no pension – corporate, military or civil service . . .” — Enter the TFSA and Warren Buffett’s advice (free) — buy low, sell high.
If one utilizes some of the the options available, it shouldn’t be too hard to forego some of life’s luxuries now to prepare for a semi-decent (not outlandish) retirement.
RSPs are okay, but not too much — better off loading up with TFSAs, and Garth’s plan of 40 – 60 income.
Tim and Joan can max. out their TFSAs on a never-ending basis, and reap the profits after a number of years.
Does anyone recall how quickly Bre-X and Nortel went up the ladder? Those who got out at the right time made a small fortune; those who didn’t had their asses burnt.
“People who retire at 60 don’t stay home all day so they can read, knit and get naked.” — To each their own! Allowing for weird people alive in the world, this probably happens more often than not!
“In a nutshell, From KD to soufflé.” — Wot about mixing them all together? The nutshell, KD and souffle?
Two years ago, when I sold my SFH I spent a few months investigating options. Should I downsize to a condo or townhouse? Maybe move farther out from the city core? What to do with this lump of cash I never expected to have when I was twenty years younger.
I hadn’t been poking around in the RE market for at least 25 years. What I saw was shocking. The place was, to me, a madhouse. I recoiled in horror. (That was two years ago. It’s become so much more intense since then.)
How many times does a ‘house-sized’ chunk of money come one’s way in a lifetime, I asked myself. There was certainly no shortage of professionals ready to help me “re-invest”. It seems I had just enough scratch to buy two thirds of another home but I would need to act quickly and go back to being mortgaged.
I put it all with the orange guy for a short while and took some time to think. And I thought a lot. About everything. About life, the time available to me, my expectations and the madness of crowds.
I couldn’t go back into the RE market. I saw only risk and heartache going forward. A few months later I discovered this blog and had my suspicions confirmed by a man who seems genuinely concerned for the financial future of Canadians and has the creds to back up what he says.
Now I am properly invested. No, not the orange guy. Real investments that pay me to own them and generate actual, usable cash flow.
Garth would tell all the retired or near-retired people sitting on soon-to-be-deflating home equity to quit being candy-asses and get out now while there’s still time. Today. Don’t waste another minute. But he says it in a gruff no-nonsense way (although very entertaining, I might add). Myself, I appreciate that approach, but many are left shaking in their boots.
I would recommend people do as Garth says but perhaps I might take a kinder, gentler stance in espousing the wisdom of cashing out now. I understand the fear associated with making that leap. I only want to say that it’s incredibly liberating to know that I am out and immune from the melee that now passes for ‘real estate investment’.
I found it was all quite a bit easier done that said.
EVERYONE: please tell me what is the job market like where YOU live?
Let me explain my current experience: 15 years experience in Electrical AND Mechanical Engineering, specializing in robotics and automation engineering and design. I’m currently employed part-time (contract basis) and I’ve applied to 120 jobs, all of them UNDER $14 per hour. All of them stating that they are seeking someone who has skills, abilities, and knowledge in specific areas, all areas that I can do with my eyes closed. Guess what: ZERO replies from these job applications ! I’ve sent out one or two follow-up letters and only one wrote back to me telling me that the job was filled, they had over 14,000 applications for that one job alone ! Can you believe that; 14,000 applications for a job that pays $11.25/hr and requires someone to drive all over Ontario doing maintenance repairs on electronic equipment throughout the province, and the cost of car / insurance / gas is NOT reimbursed by the company, it comes out of YOUR pocket ! over 14,000 people applied for this job, WOW !
Is it that tough where you are living?
Ah, this will not end well. So glad to be house free and liquid.
That is one old picture! Where did an internet porn-surfing cat get a Compaq?
I still dont see where these mortgage changes are even close to being implemented. The way I read it its all talk right now which will only allow the party to continue.
And what are your sources? — Garth
#20 ANONYMOUS
Why would they hire for you for $14/hr when they can hire an immigrant for $12/hr? http://i40.tinypic.com/2w7ok1g.png
That’s Harper’s plan.
Kitty porn.
How low can this blog go?
anon
did you see this
http://www.maven.co/consultant-network
http://images.businessweek.com/slideshows/20110128/twelve-sites-that-will-put-you-to-work-now/
But Garth, when Tim retires, he will not have to make pension contributions (for me this is over $600 a month), he will have a somewhat lower tax rate, and he will no longer have some other deductions that he has when he is working. So his take home pay on a 60% pension would work out to very little difference in take home pay. Or am I just hoping!!!
Yes. — Garth
Garth,
I think this is your best post yet. The logic is clear and simple. I am so glad I found your site. Two thumbs up.
If the housing market can crash, so too can the stock market. I’ll keep my paid-for house and invest what I can in the stock market. I think that’s the best form of diversification. And investing in the stock market includes gold and silver.
Where did I say invest in stocks? — Garth
There are so many people who seem to have such unrealistic expectations about what retirement is, and how to properly prepare for it. A good friend of mine once described retirement for most people as consisting of three phases: go-go, slow-go, and no-go.
Preparation – financial and otherwise – is key to having a reasonably happy (and hopefully, healthy) retirement. Finally, an overestimate of the nest egg needed is preferable, as the additional expenses which pop up unexpectedly can catch us off guard. Most of us will face costs in retirement which never occurred to us when everything was working A-OK: mobility, knees and hips, eyes, mind, ect.
#20 ANONYMOUS
“I’m currently employed part-time (contract basis) and I’ve applied to 120 jobs, all of them UNDER $14 per hour. All of them stating that they are seeking someone who has skills, abilities, and knowledge in specific areas, all areas that I can do with my eyes closed.”
You might want to try South.
http://www.wantedanalytics.com/insight/2011/11/30/hiring-demand-for-engineers-with-robotics-experience-grows-47/
“Millions have pinned their entire financial lives on a single asset, failing to understand house prices shot higher when they all clamoured to buy, and will do the opposite when they stampede to sell.”
Fail to understand? Wrong again Garth. Boomers understand just fine and have witnessed all this before with previous downturns. I have seen four recessions all having euphoric highs and gut-wrenching lows associated with real estate. We are not as stupid as you make us out to be!
and I’m not convinced that once people begin to sell and the rental market gets over saturated, that rents will not begin to skyrocket out of control.
Where would that leave you. A falling stockmarket and rising rental costs. Would not take long to burn through that house money. Just my 2 cents.
And worth every penny. — Garth
I believe that a Reverse Mortgage should be considered before bailing out of your house if your at least 65. Just take out as much funding required to make up any shortfall to cover your total living costs on a yearly basis. Who cares if this means less inheritance for your kids.
You must have no idea how this works. — Garth
Here is a little video that is very telling about how people think about money.,…actually its a little sad.
http://youtu.be/O2oDdidlptI
Boomer Bust! That’s It! I believe in the that big picture play post 2017 however there’s the big pain coming to anyone without 30% in pre 2017.
Even if the government plays you again and we do see a modest 15% drop in RE nationally, with major bubbled locals taking 25-30% hits, the Boomer Bust will double it downward.
Some say 4x income is the magic number however remember, when avg. incomes also drop 10-15% for core earners OR 50%+ for double incomes where one income is under stress or looses a job, how far down do RE values have to go before 3.5x income is found.
Let’s say avg income is 80K, 3.5x is 280K which would be an approx. 25% drop from current national averages.
Lets say the avg. wage drop is 15%, than the 3.5x is 238K thus making this a 37.5% drop in national avg’s.
Overall, what I dont see for the next 10 years is wage increases, better employment based on population growth, increased consumer spending and a Boomer Bust tax base.
GDP will slide off the map especially since demand in the commodity countries will sputter. Even an 80 cent CAD wont help that much.
These drops can all happen pre BOOMER BUST!
Get Ready!
But you don’t understand, in order to buy these $900,000 houses in the GTA, you have to have a minimum family income of around $140,000. That’s $70,000 for the husband AND the wife.
And for that you need to earn a bare MINIMUM of $25/hr , this $12 and $14 per hour stuff just won’t cut it !
Sha la la la live for today
Planning sucks I have forest gumped my way through life and every thing worked
out far beyond my most optomistic expectations. It works.
See kids you need luck. Act on the first inpuls never second guess and have fun. You will make millions
In my local neighbourhood, Many SOLD signs over the last few weeks. (obviously this may or may not be extrapolated to national conditions).
However, based on my area, March should be a blockbuster for sales. Party is no where near dead.
#20 ANONYMOUS
That’s why i’m in the U.S.
Which I don’t mind at all
There’s nothing in the telecom market in Canada unless you want to punch down jumpers on a DAX or pull overhead cable for $15 an hour.
No thanks, not interested.
anonymous: tell me what the job market is where you live?
in Federal Government, they hire young kids on contract, if they hang in they might be offered a “temporary” position in five years. might.
the man came to work on the dishwasher. He said he does a dozen calls a day all over Ottawa. I said you really have to hustle to do dozen in a day.
“According to a prominent US economic prof, this will be the first generation since the 1930s worse off in retirement than their parents.”
Who is this prominent US economic prof, Bozo? I think history will show Boomers had it the best and no other generation will come close. We have the best jobs, benefits, houses and yes, pensions too.
How likely will the gen-whatever group achieve what the Boomers already have. Slim to nothing!
#39 TRT
Rephrase: Party is an indicator of near dead sales. Read 5 steps of a bubble—we’re somewhere around 3-4. http://www.ritholtz.com/blog/2010/06/anatomy-of-a-bubble/
TO Bubble Boy:
Once you’ve been awarded an appointed deck chair, it is permanently affixed. It can only be removed by transfer to another deck chair. Oh, you don’t have a deck chair, do you?
I got over the whole F won’t do anything next week tidbit. If he won’t do anything to go down to 25 years then he also won’t raise the CMHC 600B limit either. This perhaps is why the banks are aggressive until then to use up the last bit of room.
Was a stag on friday. My kids where the show chirping and jokeing with some of the rich and famous of the gta. On dude askes me. How did you bring them you ever hit them, your guys are awsome
Never I said. When wifey was pissed and said diciplne them. I would go up to the room take of my belt. I would make slapping noises with it got the kids to play along.
A fake cry. Mom was happy her scotish tradition was in tacked. Ba hahahaha
Result. Kids that where not affrid to take risks not afraid to pushit
What is sad. 99 precent of you will be obidiabt rule following tax farm slave your whole and not know it
Re: #6
I think that’s a bigger ‘Pension Delusion’: the DB pension scheme is simply not sustainable. If boomers retiring has an impact on RE market, maybe the impact is a lot more direct to the DB pension system.
I keep wondering, what’ll happen when pension fund can’t pay? for sure the eligible retirement age will go up. But what if the fund still doesn’t have money to pay? Will government jump in and give $? will those who are already collecting get less? Will there be a cutoff time that those younger DB pension contributors end up getting a DC pension?
And any guesses about when DB pension will extinct?
“….confused hedonists…”
******************
I know this is serious stuff, but I have to laugh….gotta say I’m glad I have my dictionary close at hand…
Garth, you are educating us in more ways than one! LOL
FOUND: The source of HAM!!!!!!!!!!!!!!!!!
http://www.huffingtonpost.com/2012/03/23/chinese-gangsters-stolen-cell-phone-pictures_n_1376034.html?ref=canada&ir=Canada
#35 ANONYMOUS
“And for that you need to earn a bare MINIMUM of $25/hr , this $12 and $14 per hour stuff just won’t cut it !”
It’s worse than that. 40hrs/wk times 52 weeks equals aprox. 2000 hrs. Minimum $35/hr.
Smart people contemplating retirement will get out now. Most will not. That, in turn, will seal the fate of the young and the horny, so blindly covetous of home ownership.
Considering the access to education and the internet plus the life experience of their parents and grand parents one would expect young people to be scared to death of ever trying to buy a house and starting a family based on the price of real estate since the late 1970s. Youngsters ought to know better than to follow the bad example of their peers. What ever happened to youthfull rebellion? Being seduced into going along with bad economics like the real estate market is not only tragic, its shamefull.
“Guaranteed. This is the world, post-2015. Boomer bust.”
********************
Oh, boy…’2015′ rang a bell.
Just pulled out my copy of ‘2015 – AFTER THE BOOM’ by Garth Turner. (How to prosper through the coming RETIREMENT CRISIS.)
Never seen the cult-like rationale why the vast majority of Canadians feel they have ANY obligation whatsoever to support the Civil Service gravy train pensions.
Useless (redundant) Bureaucracies grow to the point of strangulation….
The “cure” would be that these gravy -sucking parties be dragged down kicking/screaming (or otherwise ) to see how the OTHER 95% live.
Once their eyes are opened…..I can envision a far better society.
From an editorial point of view… putting three, “First[s]!”, first… was a stroke of genius, OldChap.
#20 ANONYMOUS on 03.25.12 at 6:50 pm
I’m sorry but I find this difficult to believe. Where are you located?
15 years experience in Electrical AND Mechanical Engineering, specializing in robotics and automation engineering and design.
Automotive is booming right now, shortage of PLC and mechanical people. Many new body shops being installed, we are short 1000 PLC guys alone.
electronic equipment throughout the province, and the cost of car / insurance / gas is NOT reimbursed by the company, it comes out of YOUR pocket !
Don’t think so as $11.25 would not even cover your gas, come to the GTA, lots of work here. Maybe think about working for the Pharmaceutical companies.
#206 Daisy Mae on 03.25.12 at 9:06 am
#191 SNOWBOID: “Did hear Hydro costs are way up – maybe time for BC to start importing power from Arizona – likely cheaper.”
************************
Costs will increase if you use power during peak periods — dishwashers/washers/dryers — as a result of the ‘smart meters’ presently being installed.
——————————————————————
Front page of the Province today “East Vancouver homeowners get 61% increase in their hydro bill since smart meter installed”
Hooray Christy Clark, another nail in the Liberal coffin.
http://business.financialpost.com/2012/03/23/banks-tighten-condo-lending-amid-bubble-fears/
#33 Mackie on 03.25.12 at 7:56 pm
Falling stock market? Have a look at this list of Consumer Discretionary USA stocks I found posted online.
Scroll down the list and you will be amazed at what you missed,
“The “Resilient Consumer” Rocket Index”
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=73647114
I am just thinking about a couple I know who bought big acreage up-island. The husband who was mid/late-forties said this is going to be my retirement. It was 2 million. He is hoping in the future a builder will buy it and sub-divide it into lots and build houses. This is about 1 hour 1/2 from Victoria.
#22 T.O. Bubble Boy on 03.25.12 at 7:04 pm That is one old picture! Where did an internet porn-surfing cat get a Compaq?
Answer: he sourced it from the litter box!
(In UK, litter = garbage….)
@anonymous/#20…
Don’t despair. It’s very, very bad, ‘out there’.
I’m not an econometrician… but I am qualified [in a way that SmokingMan would thoroughly disapprove of] to express an opinion in these matters.
To paraphrase Robin Williams in, “Good Will Hunting”… “It’s not your fault.”
Hold fast to your friends and loved ones… Stay ‘frosty’ as to the contemporaneous ‘milieu’. There’s going to be a lot of work for engineers in the not terribly ‘distant’ future. Nostra knows…
14 bucks an hour a pan handeler makes about 40 an hour. And pays no tax
Why are people so stupid
Business cards. — Garth
#20 ANONYMOUS
Ironic isn’t it? By doing your job all too well – you’ve priced yourself out of your job. Robots repair other robots – automation at work.
69th
The Boomers and the Gen X crowd will need to continue to work……cause we can’t get enough good immigrants and the Gen Y group is a Total Slacker Socialist Generation who will contribute ‘Nothing’ and want to bleed you all dry…haha…You reap what you sow…
Rule #34 of the Internet: If it exists, there IS porn of it.
#60 Victoria
He badly needs to read this blog. Victoria proper is tanking. Developers won’t be buying up lots an hour and a half from Victoria. The person who sold him that land for 2 million made off like a bandit.
victoria: I am just thinking about a couple who bought big acreage up-island. The husband said this is going to be my retirement.
employer on board charted flight Hong Kong to Namaimo
[email protected]
@ #45 johnny5z
TO Bubble Boy:
Once you’ve been awarded an appointed deck chair, it is permanently affixed. It can only be removed by transfer to another deck chair. Oh, you don’t have a deck chair, do you?
Nope – no deck chair, because I’m not a TV reporter (Pamela Wallin and Patrick Duffy) or a hockey coach (Jaques Demers).
#33 Mackie
Please explain how “rental market gets over saturated” and “rents will skyrocket out of control”? Do not forget to work in how a worse economy, stagnant or falling wages, rising unemployment, gloomy future outlook, falling household formation (with more people living in less space), rising inventory and lower immigration will all conspire to support “skyrocketing rents”. I’m waiting with baited breath. You may also use examples from other busted real estate bubbles, domestic and otherwise, to support your claim.
52 Steven Rowlandson
“What ever happened to youthfull rebellion? Being seduced into going along with bad economics like the real estate market is not only tragic, its shamefull.”
My youthful rebellion may have prevented me from buying an overpriced house. Unfortunately, at the same time, it also prevented me from securing a good paying job. Getting a high paying job involves a lot of arse kissing and conformity, along with a college degree.
The game seemingly comes down to this – if you want to get paid the big bucks, you have to be a “good little consumer” and go into debt.
Does Tim have a skill that he can consult with? I know many former government employees who have retired with good pensions, and went on to consult to their former employers as well as others.
Saw this on another blog – thought it was a great representation of how people view the ups and downs of the housing market:
http://blogs.gartner.com/hypecyclebook/files/2008/09/home-price-hype-cycle.jpg
Clearly, we are already on the way down, and the received wisdom is “no sign of trouble, prices are leveling off…”
Right…
Re. #20 Anonymous
I find this hard to believe.
But if it is so hard to find a job in the Electrical/mech engineering/robotics/PLC field in Ontario, why not try Alberta?
Edmonton Region has some of the lowest unemployment for all folks. They would fall all over you.
Good pay, and lots of jobs.
Good luck.
#63 Smoking Man
“14 bucks an hour a pan handeler makes about 40 an hour. And pays no tax.”
Care to name the city where Canadians are so generous? Can’t be Vancouver, Toronto or Calgary. . .
Turnernation: Didn’t miss a thing. Been in the market all along. But the market can crash just as easily as the housing market. In fact, as boomers stop investing in their RRSPs, and move to “safer” areas to store their money (right or wrong) the markets will be under similar stress that the housing market will be under. All I’m saying is that everything will change as the boomers retire and there is no certainty in either the housing market or the stock/bond market. Both have a certain amount of risk. Take your pick. I like a little diversification.
There sure as hell aren’t 9 million people who have a 56K pension, or equivalent in savings to draw that every year – well, maybe financial planners, but the rest of us folks will be lucky if we save/invest enough to draw $56k a year
Not what was said. — Garth
#20 ANONYMOUS
That is an absolutely lousy story. You would be better off working at the Golden Arches. Not sure if that is less stress, but I would assume so. With your education, you could probably graduate from Burger University. I heard they have one. Don’t dismiss this. Probably better job opportunities there (Manager). And they are not going to go broke. Job security, for sure.
Why would a young person consider the cost of buying and maintaining a $900, 000 house.
I don’t need them, but I would never own this lovely 6 bedroom home if it wasn’t rented out to all my unwed fathers. I live for free and like looking at the young people in the pool.
Also, I don’t have to work, or do yard work. And am not alone. Perfect retirement program for me. Plus the fumes are free. Miss Daisy and I just float around after their parties, just the scent in the air, makes you hungry. LOL.
Living like an old hippie among the young. Retirement is GREAT!!! as Tony the Tiger used to say, is he dead?
But I’ll spend less in retirement,” he argued, which is (of course) a myth. People who retire at 60 don’t stay home all day so they can read, knit and get naked. In most cases, spending goes up, not dow
———————————————
Actually, I think you are perpetuating the real myth, most people end up needing far less then what these financial advisors tell you. Most people who say they want to travel when they retire, and yet never travelled while working, will in fact travel very little. Its He has a paid for house and he can’t live reasonably well, including taking a couple trips a year on his pension, please…..
I am your number 1 fan, Garth, but really, on this issue, I believe you are totally wrong. I’ve read enough of Malcolm Hamilton’s missives where he demonstrates how little retirees can live on (and still maintaining their standard of living).
Yeeesh, soon you will be saying we need 80% of our working income in retirement….along with Fidelity.
Really Garth, I am shocked.
Any retirees out there who can advise on their retirement requirements?
The point of retirement is not to live cheap. Really Ayn. — Garth
Garth, what will happen to rents as the housing market corrects?
Will they decrease as well?
I am a biased renter so I am hoping you will say yes.
Devore: Don’t know why you think rentals can’t get out of hand the same as house prices have got out of hand. If more and more people decide to rent rather than buy, I’m thinking costs are going up. If life was black and white it would be so easy. Unfortunately, there is a lot of grey out there and you have to think before jumping in.
Figured this might be good for a few laughs…
I was apartment hunting today…downtown TO. I’m using a realtor, and my wife made me promise not to bring up our opinion of the market with him.
Turns out the realtor lives in the building he’s showing us, he owns a condo in it. He’s “made” a fortune in just the last little while on it. Suspecting he’s trying to steer me to purchase rather then renting (and thus up his commission) I cracked a bit…”If you’ve done so well why not get out now?”
Here’s his answer, keep in mind this is a professional condo seller, who’s lively hood relies on convincing RE virgins to buy.
“Well there are two other towers coming up next door that are going to be priced at $600/sqft so at $550/sqft I’m thinking I’ve got another $50 and it hasn’t gotten that high yet.”
What? If you own something…say a cupcake shop, and someone opens another cupcake shop next door…yours is now worth less, how could it be worth more?
It took everything I had not to reply…everything.
This is the full video of #35’s post.
nova: Mind over money… its a few years old but the stuff about behavioural economics is pretty interesting
http://www.youtube.com/watch?v=fYXD-_AMstQ
For# 20 ANONYMOUS on 03.25.12 at 6:50 pm
Friendello, how difficult is for U to realize, Kanata is a work-camp, a post-colonial society with no opportunity for plain competent workers?
Learn to kiss ass, back-stab, small talk, take your boss to coffee, learn to waste 1/2 time at work listening to various retards in the office, borrow the bank like there is no tommorow, and you will do well friendello!
Bottom-line, Kanata is a slow-dying former independent country, a thing of the past. Take advantage of aboundant stupidity or get out of here if it’s not for you. Stop sending resumes.
Garth, in keeping with this retirement theme, can you do a bit about reverse mortgages? My father has come to the enlightened conclusion that the best plan for retirement was still owning a house, because no matter what goes wrong you can reverse mortgage it. I was astounded. Didn’t he know that reverse mortgages were essentially stealing the house from old people?
I went on line and found a “reverse mortgage calculator”, and my fears were confirmed. If you own a $500,000 house free and clear, you could get $90,000. And the fine print is they get the house when you sell.
For background, owning the home was a Dog-send for my grandmother, because without rent and with a tenant in the basement (me for a while), she managed to squeak by on CPP with survivor benefits. But she didn’t reverse mortgage it and it was the estate when she did pass on at 86 years young. But she lived like it was still the middle of WWII.
Had she reversed mortgaged it, she would have received a small boost to her income but the estate would have been zero. From what I understand, the children would have been far better off to supplement her income themselves with the understanding the house would stay unencumbered. But she never asked, and they wouldn’t have helped. Bunch of selfish bastards.
But the point being that I think there are a lot of boomers out there who think a reverse mortgage solves the retirement problem, whereas I think it just makes matters worse. If you could pen a piece on your thoughts I would appreciate it.
Thanks,
The most valuable asset you can ever achieve is your own freedom, whether it be freedom from an employer, your kids, the bank…whatever. After you have that, you need very little to be happy and I suspect most boomers will be content to keep their homes, live off whatever income supplement they have, maybe work part time whatever, but they won’t be going back into the stock market at their ages for “more return” Its not worth the risk.
In2008 I was working alongside some contractors who were very close to cashing up and pulling the pin. They watched their investments like hawks every day, until the GFC hit and sank the DOW 40%. Then most of them came to the realization they would have to work 5 more years to recover. Well its almost 5 years later, wonder if the cycle will repeat and knock them back again.
Re:#11 not 1st
I’d take 30 years in a cubicle any day over 30 years in a smelly, noisy industrial plant, or a dusty, noisy construction site
NYC?
TO?
KITS?
TSFA, RRSP, and other “smart gov. products” are not a service to canadians long-term that’s why they don’t instinctivelly use it. Smart old fellas. They appear to be but they are not, just money spreading, wasting time t manage it, and mostly at GOV DISCRETION to INFLATE INFLATE INFLATE INFLATE. Scotia let you use RRSP to buy precious metals, when the orgy is over in 2 y, convert it all or take it out and spend it on the girls while you can!!!!!!!!
#81 Garth
he point of retirement is not to live cheap. Really Ayn. — Garth
Maybe the point of retirement is the same as the point
of winning the lottery.
No more alarm clocks waking you up, no long commute
after brushing snow and ice off your car.
To me that is priceless.
He lives 1/2 hour south of Winnipeg. Probably nice area, prairies, and maybe a little forrest ( I know this area well). So why would he move to an area that is going down? Look at the stats. What does it tell you. P.S. I worked in that area for 32 years. Its not going to cost him 11 hundred a month when he retires where he is. Location , location, location.
Rents?
As I posted yesterday this didn’t happen down south as the US RE market tanked and hundreds of thousands entered the rental market.
Rents went down after 2007- in the last two years they have stayed the same (in some areas) or are still going down (as in Phoenix proper).
As #57 Oceanside on 03.25.12 at 9:01 pm mentioned…
Average home-owners in BC will be affected by Hydro (and other increases) but the owners of ‘power-hungry’ McMansions are in real trouble – it’s time to sell and rent.
As our lease comes up in the Okanagan we are looking around, rents are down and we may move if our landlord doesn’t lower the rent.
We can pay the same for a 5-6 year old luxury condo with most utilities included (e.g. Centuria).
I think we may stay renters for a much longer time than expected!
…at least boomers have a job to retire from.
“The point of retirement is not to live cheap. Really Ayn.” — Garth
The real point of retirement is…? Do tell us as a concerned fellow human, and not as a financial advisor angling/trolling for business.
The point of retirement is to enjoy life to its fullest, sharing with your partner and family, indulging in experiences you had to previously delay and understanding the most valuable commodity is time. The last thing people in the final quarter of their lives should spend their days worrying about is budgets, cash flow and resources. I regret this does not include you. — Garth
partially because the peak renting twenty year-olds are now declining
http://2.bp.blogspot.com/-ha4ViLT3X9U/Tf-_ZIjFFKI/AAAAAAAAAfo/K1dWf825cCY/s1600/demographics.jpg
Another reason is oversupply after a decade of low rates leading to rampant speculation and a whole lot of dark units in the night sky *
#81 Ayn Rand on 03.25.12 at 10:23 pm…
Count us as a couple of who want to enjoy our retirement.
We had originally set a target of 70% of pre-retirement income, and are currently a bit above that. But a relatively large portion went to the costs of maintaining our former Island home.
Now that we plan to keep our home-sale proceeds invested, and with the sage advice of Prof. Turner – we expect to hit 80% by year end.
You may call this excessive, but we are still relative spend-thrifts, and the security of this buffer is well worth it.
And all it took was that relatively tough step – selling our home!
Pete in Barrie
Hey Pete.
You’re on the right track. Disregard the resentful comments and stick to your plan. Garth wasn’t directly helpful to you
and I thought he was a bit short in his response. But if you have been reading and keeping track of his advice, you should act accordingly. You DO need to plan for foreseen and unforeseen contingencies. Study hard. imagine how an alternative future would look, and invest accordingly.
–
#62 Nemesis — “Nostra knows…” — U mean I Know Nothing!
*
Iran says gold is money; Banxters gather in DC. To discover who is about to be turfed, or BRICS May have something to do with the previous link; War on Cash Easy way of disarming sheeple; Wall St.’s gold rush on 4closed homes; Re- and De- Whatever it is we’re in, we’re still in it; Student vs. Prisoner Difference in costs (student loan debt is over US$1 tri. now), and 25% of S.L. are already delinquent; House Affordabilitygoes up, even as home prices decline; Becoming The Bank; Another one calling for the end of the US$; Buffett’s investments are doing nicely; Property Tax Revolution; Trouble at t’mill (Spanish Inquisition); Forget Iran There’s bigger things; Buy Gold Sell when profits are good.
Fire Sale “Europe’s banking sector holds 2½ times as many assets as the U.S. banking sector. It’s huge. And it’s in big trouble. Europe’s banking sector needs cash — mountains of cash.”; Homebuilder Crushed; US$3.6 tri. in cash on balance sheets; Spain could reignite crisis (as if it ever went away); 4:57 clip Japan’s train wreck is accelerating.
*
New day, new ‘quake around Chile, 7.2; Straight to Execution This NDAA Bill is a nasty piece of work; Ireland New privacy bill; Martial Law by Executive Order; 3:29 clip Cancer cured, but is big pharma interested? Soldiers Working hard for their take-home pay; Spring Last year, the Arab Spring. Now, the American Spring; Mali Guess who organized and led the coup? P;us Nigerian War; 17 Years Ago “Global temperatures are lower than 17 years ago.”; Ten Reasons why we’re all being snooped on (hello CSIS and RCMP!); 11:55 clip US and UK revenge on Syria. The Wheel Of The 84 (karma) grinds slowly, but always bites in the ass.
Home Schooling has its drawbacks in a dictatorship; Bacteria We’re all bacteria on the face of the planet; 9:54 clip The Pentagon doesn’t want you to see this, so here it is! Ten Poisonous Foods we enjoy. Short clip.
Went to the Green Bank the other day to withdraw 50k in Japanese Yens. ( about $680 ). I live in BC, not Manitoba. The lady behind me in the line explained to [email protected] “I maxed out the line of credit of my business, as something happened and my Home line of credit as well”. She wanted an extra 15K to her HELOC. She got her loan faster by about 6 minutes that I could withdraw my own cash in a different currency in cash. Scary as a zombie !
I would argue that you could live on much less if you have a plan in place. It will all depend what you are going to do when you retire and how you will spend your time. For example you could volunteer your time and in return obtain perks from the place you would volunteer at.
What if my wife(nurse)and I (firefighter) both have good pensions. We put money in TFSA’s. Should we do RRSP’S as well to supplement?
#18 Nostradamus Le Mad Vlad on 03.25.12 at 6:43 pm
bre-x this and that…
Gen X, is probably more familiar with fox.v…
Gen X, dont know what the bre-x is…
#72 DonDWest
amen.
I hear this all the time from the older generations, that somehow I haven’t lived up to their expectations on what it means to be an adult because I haven’t drowned my sorry ass in mountains of debt.
What a meaningful life that must be, getting up every morning to go work at a job you hate, to payoff shit that you don’t need. No Thanks.
@#34 – Flash.
I’m with Garth – a reverse mortgage is about the worst possible thing you could do with your house. (Sorry, Garth didn’t say that. I am saying it, though) My wife was once dealing with an estate where the mother had taken a reverse mortgage many years earlier (it was a big property). At her death the interest charges were something like $3000 PER MONTH. Forget anything else with regards to the estate – job number one was to unload that house as quickly as humanly possible, just to stop the outflows of cash.
If you plan to live even a few more years and can only stay in your home by getting a reverse mortgage you better plan on obliterating most of the equity you have in your property.
It is not worth it. A few sayings that come to mind include ‘Faustian Bargain’; or ‘Runaway Train’…
Just..Re: member ..
if you ..turn..your gonchies..inside out…like NDP policy…….you employ the UNused portion….thus…………save the planet……via ..less carbon taxes….
No Sh*t !!!!!
We are bailing out of ownership in Saskatoon. I’ve about had it with the noisy redneck way of life out here.
We are just breaking even, I know it’s cruel of me but I’d love to see this market crash.
How about another solution to help all Canadians…
Cut off these public service parasites off their gold-plated super-annuated pension plans…
Let them fend in “Group RSP” jungle like the rest of us…
BTW, I include elected officials (former and present) in that same camp as well…
#20 ANONYMOUS on 03.25.12 at 6:50 pm
Sending resumes want help anyone much, resumes dont work as they did years ago, nice looking resume and everivone make them selves look like SUPERMAN. Now days more chance to lend your self good job is to have work role report. It measure yor strengsts, weakneses and behaviour. Report will get you job, not resume…
it cost around 75$, small price to pay for good job…
after you do test, you just might be described like this
“They tended to be highly creative and good at solving problems in unconventional ways.”
Good Luck to you,
p.s.
I hope that you are not looking for job on grape farms souh ontario, those jobs are alrady taken…
http://i43.tinypic.com/2zei7u9.jpg
2015?
Should we be buying now and riding up the next 3 years of 5%-8% annual gains?
The week ahead and folks it looks great. First we have Gowdy and Geithner confirming BPOE theory that all is not well in the US. Well folks things are getting even more positive for BPOE. Watch Global TV this week for breaking news proving once and for all that BPOE is unstoppable. Breaking news should be released either Monday or Tuesday of this week. Load up folks if you can afford. The global tv piece will once and for all confirm that Vancouver is not for Canadians and thats a FACT. Stay tuned for lower interest rates coming soon!
I also disagree on this one Garth. If you remove, higher taxes, mortgage, pension savings, life insurance, child care, RRSP, car payments, kids college etc from a two incomes family, then you can indeed live on one income and that is the same as two pensions. Most of our big life-time bills are gone now.
We have tried this out to prepare for retirement and it works. This year we lived on one income and saved the other, we are 61 and 57 years old.
After 40 years in a certain comfortable lifestyle most people don’t suddenly become high spending travellers, it is not in their comfort zone.
I also learned from my parents retirement that you have higher bills the first 10 years of retirement because then you have the health to travel. Once health starts to decline then people stay home where they feel safe. Plus of course once something happens, as it always does, travel insurance costs go through the roof!!
So guys don’t put off retirement until you have masses of money as you may not make it. You hit 61 and 57 and friends start dropping like flies all alround you.
Re #58’s post – down in the “Comments” section was this:
“As a Registered Condominium Manager in Toronto, I am seeing a lot of homeowners hard pressed to pay their monthly maintenance fee on time. So yes, the bubble will pop.”
http://www.torontocondomart.co…
Aussie Update
Talk about being BUSTED…
“My husband passed away in hospital on 24th January, 2012. The afternoon of 25th January I caught a real estate agent taking photos of my house,” wrote the widow.
“When I went to approach her to find out why she was taking photos, she ran to her car, jumped in and took off at speed.
http://www.propertyobserver.com.au/industry-news/dodgy-estate-agent-with-heartless-motives-slammed-for-casing-brisbane-widows-home-before-husbands-death-notice/2012031553869
Australia has benefited hugely as the rise of China boosted the value of its commodity exports to stratospheric heights, gifting the country with mountains of cash.
But years of living off the fat of the land have left the economy of the so-called “Lucky Country” flabby and unproductive, ultimately threatening to crimp living standards while fuelling inflation.
http://www.theage.com.au/business/flabby-and-unproductive–economy-fails-fitness-test-20120326-1vtf2.html
Why China Is Going Into A Hard Landing This Year
http://www.businessinsider.com/why-china-is-going-into-a-hard-landing-this-year-2012-3#ixzz1qCnhPpTq
Local Govt acts to stop dodgy building – owners to pay.
http://www.adelaidenow.com.au/real-estate/news/inspections-to-push-rates-through-roof/story-e6frefgc-1226299845036
I’VE been debating for a month whether I should tell you this story.
It involves a family friend who almost certainly will pick that I’m writing about him, and it contains some hard truths. But I’m already pouring it out on a page, so let’s get on with it.
http://www.heraldsun.com.au/business/barefoot-investor/home-ownerships-like-champagne/story-e6frfim6-1226308680684
When doing pension calculations you have compare net incomes, since CPP, EI and pension contributions are all eliminated at retirement. In addition, a planner should consider inflation adjusted returns and inflations effect on the rent vs own scenario. Rents have increased dramatically in the last 20 years. Finally, people enjoy their own homes, money is not everything.
Garth “Harper’s Nemesis” Turner, I’m old and confused so can someone help me out? If old people, like myself, take out monster mortgages and go into debt and I get sick, have to stay in a hospital then die, is the debt gone? I would think old people what be lining up to get credit cards, cash advancing to limit and telling banks to suck it. If my nurse has trouble finding one of my veins to draw blood, I don’t see the banks doing much better trying to get me to pay off my debt.
Oh, Nostral the Mad Vlad, your jokes are stale.
http://www.youtube.com/watch?v=JaXEGLRAWbQ
You’re Welcome, Ladies.
And why does anyone out there expect the prudent will even be allowed to harvest the fruits of their effort without interference? There is CLEAR evidence throughout the Western economies that when it hits the fan, the Government of the day always follows the path of least resistance – which equates to the path least likely to cost them votes.
When (not if) the majority are “doing it tough” those who were careful WILL be clobbered with taxes / “service fees” / inventive means to part them with their “excess” wealth. Happening in the UK, Greece, Ireland, and soon everywhere else.
Of course the “Well Connected” will ALWAYS be excluded from such an asset grab -again as has been seen throughout history – and particularly recent history – “I’m ENTITLED to my bailout cash, you “lesser people”can just suck it up” being a fairly recent quote from one of the US Billionaires, linked to by Nostradamus on this blog some months back.
The “choice” now seems to be a case of “spend it now on something useful that might generate some reduction in your future cost of living” or accept that purely financial investments will be highly attractive to a cash-strapped future Canadian government – and liable to some form or other of “legal confiscation”.
Smoking Man has cheap shoes.
http://www.youtube.com/watch?v=pR8aFDosQBQ&feature=related
#83 Mackie
Rents are based on incomes.
Companies are canceling DB plans for some time now, when public sector switch to DC, market will shoot sky hi.
Let me refrase Garth… Stay Liquid…
Cool analysis: http://blog.lifecourse.com/2012/03/why-young-adults-arent-buying-homes/
Interesting how it’s different on this side of the border yet, we’re just trading one debt for another. Given the wage pressures mentioned it will be interesting to see how this plays out eventually.
Can I get a… this will not end well?
First?????
errrr maybe not
Remember money won’t buy you happiness but it will buy you a much better quality of unhappiness
My tuppence …
I’m not sure if Joan has a great big whopping pension as well but if not then this couple has actually hit pension nirvana. They will find through the power of pension splitting (let’s give tax breaks to those people who need it the least) that they will have almost the same net income in retirement as they did when working. Being able to split your pension and dropping you both into the bottom tax bracket gives you a huge savings in taxes, that and no CPP or UIC deductions. They would likely end up with 90 percent of the amount Tim made when working. When they hit 65 and get the age exemption for being “low income” as well as collect OAS they will likely be at almost 100 percent replacement value. Tim’s 95K salary is only about 66K after tax which he will be able to replace almost completely with pension splitting, CPP and OAS.
Joan stayed at home and has no pension, nor CPP. OAS is only $500 a month – peanuts. And pension-splitting will certainly not restore their pre-retirement income. You are wholly wrong. — Garth
Rents definitely have not “skyrocketed” for comparable properties. Apartments in mid-town Toronto still rent for the same ~$1000/month that they did 20 years ago.
This isn’t to say that the average rent hasn’t gone up – those tens of thousands of new condos built in Toronto over the past 10-15 years have become the new rental stock, and the $1500/month that these types of places get make it seem that the overall rental market is rising (when in reality it is just that there is a broader range of properties on the market – with most recent condos representing the high end).
This is why all of the “poor renter” stereotypes are extremely dated – rental stock is now the exact same as what new buyers get… The idea that all rental properties are run-down student housing is no longer the case. The only difference is that the rental unit costs less per month!
As rule of thumb I’m leaning towards: Age must = liquid net worth, or else doom.
I.e.
At 40 your liquid net worth should be $400,000.
Age 50, your liquid net worth should be $500,000.
At age 65, $650,000 and so on.
A yearly, 5-6% after tax return on $650,000 is $33,000-39,000. Multiply by two for a couple.
Emphasis on ‘liquid’.
(First World problems though, eh! How about the millions of men, women and children who, as we spreak, live their lives picking on garbage dumps. Or disassembling toxic electronic waste. Or festering in a disease ridden refugee camp).
And by death you should spend it all. Especially if you’re a Boomer. Damn, whiny kids. — Garth
To # 101 Dave. Scrap RRSP’s. Sure sounds great getting money back every year, but all your doing is deferrring taxes till later. The GOVERNMENT is going to raise taxes and bleed us dry. Do lots of reading, reading, reading. Don’t believe everything you read here. You will learn alot but everyone has there own opinion. No one cares more about your money than you. Remember that! I am relating from my own personal experience. Why would the guy in the story want to move from a nice serene place to live in a concrete jungle? See what I mean. Do your own investigating and don’t beleive everything you need.
“In most cases, spending [of people who retire] goes up, not down.”
Yes, but that’s because in most cases, people who retire haven’t actually taken the steps to properly prepare their household budget for retiring. They instead just wake up one day and decide they’re tired of working, so they quit. But they still have the mortgage. You yourself admitted this, in this very same post!
“Already a third of folks going into retirement do so carrying mortgage debt”
Amonth those who properly prepare for their retirement, spending does indeed go down, because their two biggest monthly expenses (mortgage and retirement saving) disappear from their budget. But if a third of retirees still have a mortgage, and they weren’t actually saving much for retirement anyway (again, from this very post, in your own words: “Personal savings have dropped”), then of course their spending isn’t going to change when they retire. All they’ve done is cut off the income, without changing any of their budget.
If you spend most of your working life spending 30% of your income on your mortgage (counting the extra principal payments, of course) and saving 15-20% for retirement, then when you retire (mortgage-free), your monthly expenses drop by up to 50% without changing anything else.
There sure is a lot of justifying going on here today – people trying hard to convince themselves they can enjoy a full retirement on half the money they made working, one year prior. You will see otherwise. — Garth
Rents are indeed out of hand presently. They will follow the crash predicted by bubble mechanics.
#84 steev on 03.25.12 at 10:35 pm
Look at this latest sickness (as mentioned over on the twerpy realtor blog). CASA II condos in Yorkville Toronto.
Selling 2 bedrooms as small as 625 sq feet! Parking is $65,000, and there’ a $1000 per-floor height premium.
http://www.casa2condo.com/
Download floorplan, pricing to see this insanity at work.
Essentially, a 550sq foot box, higher up, with parking, closing costs, will run $1/2 million.
Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the Federal Reserve will probably signal it plans to arrange a third round of debt purchases when policy makers meet in April.
”””””””””””””””””””””””””””””””””””””””””””””
And people believe the US govenment officials when they say no more QE. The sad thing is people actually fall for it time and again.
The only dumber ones are those who believe Bill Gross, the manipulator. — Garth
#76 DonDWest on 03.25.12 at 9:41 pm
Nothing to do with city
It’s not about which city you live in, It’s as always marketing.
To get max yield while pan handling do this.
The Look:
Get a pair of dress paints and business shirt one size to small, make sure paints are floods. Were running shoes. One day’s worth of 5 o’clock shadow going. Make sure you never turn your head more than 5 degrees to either left or right.
Props : Get a Cain, and White Bristol board.
Write this very neatly on White Board.
• Crippling Arthritis, Can’t Work.
• This is very humiliating.
• Helping me and my family is very appreciated.
• If you can’t help me today, please give to the
• Arthritis Society and help other sufferers.
Now if you really want to increase your yield, get a 8 year old kid to walk around with the collection cup, you just sit in a wheel chair, tanning and holding the sign. Cha Ching$$$$$$$$$$$$$$
Or get on your hands and kness and beg to be a 14 dollar an hours tax farm slave.
#110 NoName… that was a racist comment and photo link. Shame on you. Garth, I am surprised you let that go… shame on you as well…
I disagree. Say, didn’t you resign? — Garth
#130dd
The only dumber ones are those who believe Bill Gross, the manipulator. — Garth
……………………………………………………………………….
True he is a manipulator. He has quite a few billion in MBS for the goverment to take off his hands. QE through the front, side or back door is on the way. How else could lmid and long rates stay this low until late 2014 unless the government had a hand in it?
The only dumber ones are those who believe Bill Gross, the manipulator. — Garth
Ah, you see it, too… The intentional looting of millions of future retirees… just another bankster puppet. There is no other good explanation for his most recent errors…
“Sixty per cent of his $95,000 salary is $57,000 a year, which is $38,000 less than he lives on now.”
Shouldn’t you compare after tax income, considering 57,000 will be taxed at a lower average rate than 95,000?
After tax income on 95K = $70,119. After tax income on 57K = $45,700. That’s $25,000 less after tax, or a 35% drop, which is a big deal for most people. — Garth
It would appear that individuals are following the government spending example…Spend yourself into oblivion and hope that you can walk away and die early….
According to The Bernank. Interest rate hikes will be suspended indefinitely like Greg Williams. Job Growth is going nowhere even though the rate of firing has slowed. Real GDP growth is tepid because of said weak job growth. In other words, QE 3 is on its way. Stock market rejoices on more keep money/liquidity, dollar weakens in a race to the bottom, Gold gets an erection. Garth’s rosey outlook on the U.S. economy shot down. Four years of money printing will continue another 4 years. Bond yields will be held down by future QE. Central Planned Economy at its best. Everything fixed right? Not really….
Tempus Fugit…
@ #20 Anon:
I see the problem: “15 years experience…”.
I have 20 years in supply chain and am too old, well now the politically correct term is “overqualified” and that’s here or in the US.
Sorry, can’t help you much expect to rant on about buying more silver and avoiding real estate.
survival compensation
(17X’s 50k) +11k/wounded
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/03/22/bloomberg_articlesM1AJI307SXKZ01-M1BNM.DTL
==
India
Tax authorities have identified purchases of gold bullion and jewellery as the second-largest parking space for black money next only to real estate. CBDT member (investigation) K. Madhavan Nair told Mail Today that “huge amounts of gold are imported every year into the country and it then goes into a black hole with no trace”.
==============
…”Reducing the jobless rate further will probably require a quicker expansion of business production and consumer demand, which “can be supported by continued accommodative policies,” he said..
Slow growth in wages was consistent with his belief that weak demand was most responsible for high unemployment.
“There is not much indication of excess pressure” on worker salaries, he said. “Unit labor costs have been quite subdued. Obviously, that suggests wages are not a major concern for inflation.”
omega 3 invasion
redneck fishing contest
http://www.youtube.com/watch?v=SGWiaqGjQaU
The invasive Asian Carp has been detected past the electric barrier on the Chicago Ship and Sanitary Canal, just 6 miles upstream of Lake Michigan. If the fish were to reach the Great Lakes, it would be an ecological disaster. The carp consume enormous amount of food that other fish rely on, muscling out native species. The fish can grow to up to 3 feet long and weigh 100 pounds, and have quickly dominated U.S. waterbodies where they invaded. The fish also pose a risk to people: the silver carp are easily startled and often jump out of the water when startled, making them a hazard to boaters, anglers and water-skiers
First derivatives. Now leaping fish. We’re doomed. — Garth
Rosenberg today:
What housing recovery?
• Despite one of the most favourable Februaries on record in terms of weather impact on the economic data, we just received the third consecutive soft U.S. housing report with new home sales down 1.6% on the month
Jobs, jobs, jobs
• We would not at all be surprised if those 200k+ headline payroll numbers are close to +100k or +125k monthly through the spring and summer
The US is gaining jobs, while we lose. I’d say that is meaningful. — Garth
What does Smoking Man’s post today and James Cameron have in common? Both have sunk to new lows!
After tax income on 57K = $45,700.
Add the wife’s OAS and that’s 52k. You’re insane if you think that’s not enough for a very comfortable retirement for a couple with a paid off house. That’s enough for yearly vacations, a new BMW every 3 years, fine dining, etc.
They spend more than that now, with no vacations or BMW. What a foolish comment. — Garth
#47 Smoking Man on 03.25.12 at 8:23 pm
On this, you are absolutely, unequivocally on the money. Good on you.
#142 Grandpa Simpson on 03.26.12 at 10:45 am
Working for 14 bucks an hour is noble?
Get you Vietamn B12 Gramps.
O and I forgot to mention, when collecting on the street always say God bless, you might get lucky and get some religious wack jobs, who will fork over even more loot. Prase the Lord
ba hahahahahah
s w i f t
The world’s biggest electronic payment system on Saturday will cut off Iranian banks
http://www.reuters.com/article/2012/03/15/us-nuclear-iran-idUSBRE82E15M20120315
#130 dd on 03.26.12 at 8:52 am Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the Federal Reserve will probably signal it plans to arrange a third round of debt purchases when policy makers meet in April.
”””””””””””””””””””””””””””””””””””””””””””””
And people believe the US govenment officials when they say no more QE. The sad thing is people actually fall for it time and again.
The only dumber ones are those who believe Bill Gross, the manipulator. — Garth
———————————————————-
DD is correct. To add it’s only a matter of time before the US dollar loses it’s reserve currency status.
Gold Prices Rally as Bernanke says “Continued” Stimulus Needed, Eurozone to Boost Firewall But “Contagion Risks” Remain – 26 March 2012
The US dollar will be reserve currency at least as long as everyone reading this blog is alive. — Garth
@Grandpa Simpson:
“If old people, like myself, take out monster mortgages and go into debt and I get sick, have to stay in a hospital then die, is the debt gone?”
For any debt that is secured against an asset, the asset is sold and the proceeds of the sale used to settle the debt. If there is insufficient equity in the asset to settle the debt, then the remainder goes into the pile with the rest of the unsecured creditors and a claim is made against the estate. “What you own stands for what you owe.” Your remaining assets are liquidated and used to repay your creditors.
If you have insufficient assets to repay all your creditors (that is, you died with a negative net worth), then indeed, those creditors are out of luck and take a loss. Of course, that also means there is nothing left for any heirs to inherit either, but they’re not responsible for any remaining debt (unless, of course, they were foolish enough to cosign).
However, it may suprise and disappoint you to learn that banks have figured out that people eventually die. Thus, they factor that into decisions regarding interest rates and the amount of debt they’re willing to extend to the elderly and infirm.
Translation: If you think you can wheel your 85-year-old self into the local CIBC and get a signature loan for $25,000 at a point below prime and decline the life insurance premium, you’re dreaming.
In retirement, owning a mortgage free home in a small town (for us) costs about $600 per month which includes taxes, heat/hydro, phone, cable, water and insurance. Add insurance for two cars ($225) gas ($ 300), maintenance ($150)
So basics are $1,275 with 2 cars. With groceries anything over $2,000 is just for recreation (we have health insurance) Activities are walking, bike riding and cross country skiing.
No more “career apparel” for my wife, far less time behind the wheel and not living in Vancouver (expensive) We get by on FAR less than when working. And it’s easy to do.
Canada Banks Tighten Condo Lending Amid Bubble Fear: Mortgages
“Several of the banks have tightened up” after the Office of the Superintendent of Financial Institutions “told the banks to be a little bit more careful on who they are lending to and how they are lending,” said Barry Fenton, chief executive officer of Toronto-based Lanterra Developments, whose condos include WaterParkCity and Ice Condominiums at York Centre.
http://www.bloomberg.com/news/2012-03-23/canada-banks-tighten-condo-lending-amid-bubble-fear-mortgages.html
Here we go.It will not end well.
Nanoose BC (Golf and marina community)
125 active listings.
Sales this month…2
Qualicum Beach BC
242 active listings.
Sales this month…11
City of Vernon BC
145 active listings.
Sales this month…15 (most expensive $445K)
Summerland BC
297 active listings
Sales this month…21
Banks Tighten Condo Lending Amid Bubble Fears: Corporate
Related News:Canada .Banks Tighten Condo Lending Amid Bubble Fears: Corporate
By Andrew Mayeda and Greg Quinn – Mar 23, 2012 12:01 AM ET .LinkedIn Google +1 Print QUEUEQ..Canada’s biggest banks are tightening lending standards for condominium builders at the urging of regulators, requesting higher pre-sales and deposits as policy makers warn the Toronto and Vancouver markets are overheating.
Policy makers including Finance Minister Jim Flaherty have warned about the risks of record consumer debt and soaring housing prices that some investors say may be inflating a condo bubble in Toronto and Vancouver. Housing prices may drop 15 percent as interest rates rise, crimping economic growth and sending Canadian stocks down 10 percent, said Sadiq Adatia, who manages about $9 billion at Sun Life Global Investments Inc.
http://www.bloomberg.com/news/2012-03-23/banks-tighten-condo-lending-amid-bubble-fears-corporate-canada.html
They are openly talking now about 15 percent drop.
“After tax income on 95K = $70,119. After tax income on 57K = $45,700. That’s $25,000 less after tax, or a 35% drop, which is a big deal for most people. — Garth”
I agree it’s a big deal, I just wanted to split hairs and point out 25k is 33% less than the 38k you reported and is less of a hurdle than the original amount. This sounds like number fudging to favour your point. Are you related to any realtors? :)
I gave pre-tax figures. The drop from 95 to 57 is 40%. The drop in after-tax income from 70 to 45 is 35%. This is not a significant difference, and hardly warrants your insult. — Garth
You are right and wrong. Half of Vancouver westside has cashed out but prices are climb higher as SFHs are, as Rennie said, traded like baseball cards. Now let’s see what the Russian speculator will add to this mess.
So for those responsible boomers cashed out, their money doesn’t go very far once they’ve bought a leaky condo for themselves and put in a downpayment for their 2-3 kids.
“The point of retirement is not to live cheap. Really Ayn.” — Garth
The real point of retirement is…? Do tell us as a concerned fellow human, and not as a financial advisor angling/trolling for business.
“The point of retirement is to enjoy life to its fullest, sharing with your partner and family, indulging in experiences you had to previously delay and understanding the most valuable commodity is time. The last thing people in the final quarter of their lives should spend their days worrying about is budgets, cash flow and resources. I regret this does not include you. —” Garth
Thank you for this answer. These are all worthy goals throughout one’s life. If “outgo” exceeds “income”at any time of life, there will be anxiety and stress.
What does it cost to live in retirement? Why, whatever you have.
#147 Oceanside on 03.26.12 at 11:18 am…
While I agree with most of your posts I think your budget is missing a few items.
What about bike maintenance/replacement, charities, clothing/shoes/boots, computer maintenance/supplies, craft supplies, dining out, electronics, movies, travel, gifts, travel insurance, medical expenses (for costs BC and our health insurance doesn’t cover).
Then there are capital expenditures – don’t you budget for replacement items?
How about the maintenance of your home – we had an ‘oceanside’ place and the costs were getting higher every year. We came to realize that exterior items (roof, decks, patios, furniture, BBQ, etc) would only last about half as long as expected because of the salt air, rain, moss, mould and wind damage.
Back in 1952, my father was just starting his military career. He met many guys who were retiring on $50 a month (unindexed) military pensions. They all thought they had died and gone to heaven. Ten years later, many of them were living in dumpsters and hoping the price of canned dog food wouldn’t be raised.
The more I talk to people in Calgary, the more I know we are super boned here, people have been living this entitled life of easy high paying jobs for a long time here, coming from ontario I know what its like to have to work hard for a job, people here have no idea.
My question to you Garth is how much of a fluctuation can oil and gas value take? I’ve been reading that article in Rolling Stone someone posted here a few weeks back http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405?page=6 about speculative trading on Oil, is that something to be affected significantly with construction slowdowns and falling property values? I know inflation is mega high…wheres its all going?
I don’t even want to buy a house for cheap anymore, I just want to keep my job and I hope my moron house porn friends don’t get smashed into a life of servitude and constant overtime and zero fun just to pay the bills.
still hot in east van
930k for a tear down near comm. skytrain sold in under 2 wks
nothing decent stays unsold for more than a week or 2
seems like an endless line up of buyers round here
http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/three-money-myths-about-housing/article2379654/
#103 Dave It is hard for anyone to give you an answer about RRSPs if we don’t know your personal circumstances. How old are both of you? Has your wife worked a long time to get a full pension? Will you go full term on your pension? Has she or will she be taking time off for a family? RRSPs are good investments for retirement if done correctly. Spousal RRSP? Income splitting? Don’t wait until you are in your 50s to figure this out. My husband and I went to our first retirement seminar in our early 30s.
van west vs east
looking at a 15×15 block area comprising about 4-5000 properties
west side 102 houses for sale (macdonald and 23 area)
east side 19 houses for sale (victoria and 1st area)
maybe more westsiders are reading this laborious blog!
#20 Ananymous
I call BS on your situation …. 14$ hr give me a break pal. You are full of fluff just like 50% of the posters on this site!!!
Move away from Canada when you retire.
You can live anywhere in the WORLD! They want you and you pension. Live where it’s warm, rent is cheap, food is cheap, girls are …, ahem.
Seriously, I’ve been living on the island of Penang with a house keeper, in a condo with a pool, starbucks and chili’s downstairs (when I want the comforts of home), etc. for 2k a month.
It’s a wide world, experience it.
RBC raises mortgage rates, signals end to price war
Last updated Monday, Mar. 26, 2012
Royal Bank of Canada, the country’s largest mortgage lender, is increasing its rates.
The move is a sign that the mortgage price war could be drawing to a close as banks seek to reinflate their profit margins.
RBC announced Monday that its special rate on four-year fixed-rate mortgages will be increasing by half a percentage point to 3.49 per cent.
http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/rbc-raises-mortgage-rates-signals-end-to-price-war/article2381478/
As luck would have it Prostitution now legel
A glorious day prase the lord :)
Dear Garth and Blog Dogs,
When the Boomer Horde starts their sell off, will they be searching for houses like mine? 900 sq foot bung, West Oakville, 60 by 120 foot lot. Looking at MLS, prices are hovering around $400,000 for houses like this.
Will single level bungs hold their value during The Great Purge of boomer real estate holdings? Thanks Mel.
#150 Lucky Renter
Asking a bank to “tighten up ‘ their lending practices is like asking a drug addict to ‘cut back ‘ on his drug use. Not going to happen! And yes , It will not end well!
The Apartment REITs are big users of CMHC insurance to lower the interest rates on their financing and facilitate bigger loans to let them continue their binge of buying.
Why do you keep those inane “first ” posts… What is this … grade school… just delete em… it’s infantile and degrades this site.
The US dollar will be reserve currency at least as long as everyone reading this blog is alive. — Garth
It’s amazing that you still have to say this, Garth. It is insanity how people can be convinced that the $US, hate it or love it) will cease to become the reserve currency in this lifetime. Utter lunacy. They should get their heads checked.
Canadians tempt Murphy’s Law: 38% don’t have a savings fund for life’s surprises
5 hours ago
TORONTO, March 26, 2012 /CNW/ – Canadians are playing the odds: 38% of Canadians don’t have any money set aside in case they lose their job, have to cover significant medical bills, out-of the-blue home repairs or other unexpected expenses.
According the 2012 TD Canada Trust Report on Savings, 53% of Canadians admit they have been in a situation where they needed to rely on cash savings to navigate an unexpected life event, yet only 26% of this group had a fund set up. Of those who didn’t have a fund, 49% had to depend on friends or family, 36% used their credit cards, 35% relied on a loan or line of credit, 16% dipped into their savings account and 14% dipped into their RSP.
http://ca.finance.yahoo.com/news/canadians-tempt-murphys-law-38-120000776.html
DD is correct. To add it’s only a matter of time before the US dollar loses it’s reserve currency status.
Gold Prices Rally as Bernanke says “Continued” Stimulus Needed, Eurozone to Boost Firewall But “Contagion Risks” Remain – 26 March 2012
The US dollar will be reserve currency at least as long as everyone reading this blog is alive. — Garth
———————————————————-
Slowly but surely it is happening. And certainly sooner than most think in this life time:
“Brics’ move to unseat US dollar as trade currency”
http://www.citypress.co.za/Business/News/Brics-move-to-unseat-US-dollar-as-trade-currency-20120324
It is not happening at all, slowly or otherwise. — Garth
Under Michigan law, the transfer tax is $8.60 on every $1,000 of the sale price of real estate. Of that amount, $1.10 goes to the county and $7.50 goes to the state’s school aid fund.
The privately owned but federally backed mortgage companies claim in the lawsuit that Oakland County filed last June that their federal charter exempts them from paying all taxes.
But Roberts ruled that Fannie and Freddie are essentially a privately owned mortgage banker and that a transfer tax is an excise tax, rather than a tax on real property.
“In the end, this case turns on a single question: whether a statutory exemption from all taxation includes excise taxes such as the Michigan Transfer Taxes,” she wrote, adding that Fannie and Freddie are not exempt and, therefore, liable
http://www.freep.com/article/20120324/NEWS06/203240371/Fannie-Mae-Freddie-Mac-cheated-Michigan-Oakland-County-in-foreclosure-deals-judge-rules?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE
I recall watching a news story some years ago about seniors in Florida, and how so many of them , particularly women, are being arrested for shop lifting. The problem is that they eventually get fed up with living the life of gentile poverty in the land of eternal sunshine that they thought they would love when they retired.
Where did I say invest in stocks? — Garth
Aren’t REIT’s comparable to stocks?
No. — Garth
“The US dollar will be reserve currency at least
as long as everyone reading this blog is alive.
— Garth”
———————————————
100% disagree. No gold standard, agreed. No
US default, agreed. I know you adamantly
support the system, status quo, but the world
is tiring of the abuse the US dollar spreads
globally. Sovereigns nations are reducing bond
purchases and diversifying out of the US buck.
I won’t get into Iraq or Iran.
I understand the US, being sovereign, has no
mechanical limitations on its ability to print.
As the Global reserve currency, it’s enjoyed
an absorption pool that seemed infinite, but
as we are now seeing, is not the case. For
decades, the world watched as the US lived
beyond its means (to Canada’s benefit via trade).
This is not a bet against the USD, just an
acknowledgement things are changing. The US
will eventually be forced (with out major growth)
to pay its way (keep inflation contained
within it’s borders) by reining in spending or face
the consequences of it’s actions.
The disenfranchisement of Ron Paul tells me no politician/party has the balls to tell the people/
corporations, what they don’t want to hear.
The change has already begun and we both
know what the outcome will be.
take care,
Blacksheep
Iran is thrown out of the SWIFT banking system. US warns India it will do the same.
Gold is taking centre stage.
You are delusional. — Garth
The world’s biggest electronic payment system on Saturday will cut off Iranian banks
Being locked out of SWIFT is an act of War. China and Russian and all others have taken notice. Watch – more and more non-dollar agreements and transactions will take place.
Canada’s biggest bank, the RBC Royal Bank, on Monday raised its posted five-year mortgage rates.
The bank announced it was hiking its special fixed four-year closed offer by 0.50 per cent to 3.49 per cent, its five-year-closed rate by 0.20 to 5.44 per cent, and its five-year variable by 0.10 per cent to prime plus 0.20.
http://tinyurl.com/c2p8t6o
#137 neo
Yes, truer words were never writ!
If America’s central banksters believe they can only “solve” the empire’s ongoing economic ills by printing yet more money, the essential ingredients of QE “programs”, then the system is truly screwed in the long-haul.
The outcome will be easy to predict, based on the results of the first two. QE3 will bring slightly more growth and thousands of low-paid service jobs. CNBC will crow about it, but it’ll be an empty vessel of a “victory.”
Ever since 2008, when our “way of life” all fell apart, so-called stimulus EVERYWHERE in the industrialized world has yielded only tepid growth at a dangerous and incalculable price.
Banksters must never forget that one can’t borrow one’s way to prosperity even if one has the hubris to believe he’she can control the financial universe to impose the “ultimate” outcome.
The 20th century was filled with similar insane central planning ideas some of which lead to famines and wars.
Those brought about human catastrophies and sufferings on horrible scales.
This madness continues but mainly in financial markets and governments. There has been a terrible human toll, more in busted dreams and ongoing nightmares, so far.
More to come is my guess.
In the scenario that I believe is accurately spelled out in this article, hyperinflationary pressures are certain. This means cash and liquidity have very limited power, unless you’re talking about erosion.
Of course if there is huge debt on the house, get the hell out today. Now. But if the house is already paid for? No mortgage is no mortgage. The issue is about debt, not equity. In anything. Especially any kind of paper. Literally anything. All the “doomer” investments plus guns, smokes and whisky is absurd in my opinion, unless you’re looking for a potential wealth preservation strategy. Even that is not guaranteed, because long ago the finance markets were literally turned into a casino. The house always wins. That’s how a casino works. Free shows and 25 dollar breakfasts while you’re vanity and delusion ( and dopamine) is hijacked. But when you can no longer be used, house wins. The big house. Whatever that is.
It’s all just power dynamics, fear and greed. Trying to get something for nothing. As old as the hills.
Nobody seems to be that interested in community, where real solutions always lie.
The notion that numbers crunched today will mean much when the house wins over 9,000,000 all at once, plus the rest of the people in the ponzi scheme…well…at very best that is wishful thinking.
A guy who already has his house might be getting fleeced by taxes, but at least he’s not putting his asset
( current value) in Draghi’s system. It might not be such a wise thing to do. Also, Carney actually has the job Draghi had before they put him in charge of the European Central Bank. These guys know the timing of this.
The power most certainly is not within elected governments. I think that’s abundantly clear now.
There will be no hyper-inflation. That is a huge myth perpetrated by the metalheads. — Garth
Australia – China trade deal in non dollars.
It has started.
http://www.marketwatch.com/story/australia-agrees-to-currency-swap-deal-with-china-2012-03-22
Anonymous, #20,
I sympathise with your frustration, but here are a few tips, you might want to consider:
– You sound to me like you’re a leader in a highly specialized field; there are probably less than 100 people who can describe what you can do, and you can bet that none of them work in H.R.
– you will never find the job you’re looking for online, if the people posting the ads can’t describe it. It is up to you to define the job that you want to do, and find a way to do it.
– if you’re over-qualified to work as a repair technician, how about working at teaching repair technicians?
– if you designed robots for manufacturing, your skills and experience are transferrable to other design or manufacturing engineering positions – even those that may not directly involve robots.
– you may think the things you’ve done in the past should speak for themselves, but don’t count on future employers to think your past achievements are as meaningful to them as they are to you. All a future employer cares about is what you’ll be able to do for them.
And another thing: relax. Your (completely understandable) frustration comes across loud and clear in your posts. If the same tone is evident in your communications with prospective employers, you’ll never get past the first screen in the hiring process.
http://business.financialpost.com/2012/03/26/rbc-axes-2-99-discount-mortgage/
Bye Bye 2.99 at RBC
#132 disciple on 03.26.12 at 9:06 am
Sorry if i offend you, i don’t think that you get a what i tried to show here.
Message is farmer in grimasbi is resorted to import workers because is “hard” find unemployed people willing to within 30min distance from grimasbi…
http://i39.tinypic.com/ta07lz.png
Data from
http://www40.statcan.ca/l01/cst01/lfss04f-eng.htm
I used to be a metalhead, but instead of gold and silver I loved Iron Maiden and Judas Priest :)
podcast-
The housing market is in for years of depression.
http://prn.fm/2012/03/26/podcast-wake-up-call-032612/
There will be no hyper-inflation. That is a huge myth perpetrated by the metalheads. — Garth
There is also another huge myth perpetrated by the ‘kickthecandowntheroadheads’ on how the government will pay its debt back by taxing a shrinking economy. This has yet to be explained.
http://i39.tinypic.com/k4b66p.jpg
http://i39.tinypic.com/24yptn4.jpg
It won’t be hyper-inflation. Guaranteed. — Garth
” Move away from Canada when you retire.
You can live anywhere in the WORLD! They want you and you pension. Live where it’s warm, rent is cheap, food is cheap, girls are …, ahem.
Seriously, I’ve been living on the island of Penang with a house keeper, in a condo with a pool, starbucks and chili’s downstairs (when I want the comforts of home), etc. for 2k a month.
It’s a wide world, experience it.”
Daniel….I love that place! Amazing food …I’m guessing
Langkowi is cheaper though!
Hope to see you when I’m there next!
Cheers!
#164 Daniel on 03.26.12 at 12:52 pm
Nice. But last time I bought a cup of Starbucks coffee in Malaysia, it cost me $4.50 cdn. Here at that time was $1.66.
Your going to love this one, buddys Niece gets knoked up, has a baby, 2 years ago, buddys says “House’s have peaked rent for a while. House Horney, they buy a condo. Hydro slaps a smart meter on the outside of the building, “OH no my baby is going to die” Solution? Buy a house… What about the condo? Oops can’t sell now, owe more on it that the mortgage… how do you spell screwed, how about double screwed…
Garth, these real life number crunching posts are my favourite, just so I can compare my situation to others. Why does no one talk openly about their financial outlook ans stratigies is beyond me ‘cause the sharing of info is enlightening.
Any way I’ve been keeping track of the family’s monies since 2004 and I mean everything from what I spend on reality altering substances to HST to my bad smoking habit and back again.
What we can live on per year is $43,000
Wifey nets $32,000
I net $36,000
Other income, mostly from the orange guy is $9,000
We put away $33,000 per year.
It can be done. it depends on your life style. Oh and we’ve always been a low income family, with 10 acres N/E of twrana.Paid for.
Hungarian real estate
By Edith Balazs – Mar 26, 2012 4:56 AM ET
http://www.bloomberg.com/news/2012-03-25/hungarian-market-collapses-after-forex-loans-debacle-mortgages.html
#166 Smoking Man
“As luck would have it Prostitution now legel”
I believe that prostitution has always been legal — it’s solicitation that was illegal (and remains so). You of all people should know that!
I believe the Ontario Court of Appeals ruled that operation of a brothel/common bawdy house is no longer illegal, because prostitutes have just as much right to safety as every other Canadian. Good decision.
#190 randman on 03.26.12 at 3:35 pm
” Move away from Canada when you retire.
You can live anywhere in the WORLD! They want you and you pension. Live where it’s warm, rent is cheap, food is cheap, girls are …, ahem.
Seriously, I’ve been living on the island of Penang with a house keeper, in a condo with a pool, starbucks and chili’s downstairs (when I want the comforts of home), etc. for 2k a month.
It’s a wide world, experience it.”
Daniel….I love that place! Amazing food …I’m guessing
Langkowi is cheaper though!
Hope to see you when I’m there next!
Cheers!
I think you mean Langkawi!
Penang is nice, all RE is overpriced due to correct and true for China, HK, Sing and KL including Penang but renting, absolutely!
Malaysian My Second Home (MM2H) is a legit program granting you 10 yr VISA for a cool CAD150K investment. You can buy RE but just actually need to secure it locally (protected 100%) and you’ll get it. No income tax to pay, can work 20 hours per week, tax free car once you arrive.
#156 Snowboid on 03.26.12 at 12:05 pm
#147 Oceanside on 03.26.12 at 11:18 am…
While I agree with most of your posts I think your budget is missing a few items.
What about bike maintenance/replacement, charities, clothing/shoes/boots, computer maintenance/supplies, craft supplies, dining out, electronics, movies, travel, gifts, travel insurance, medical expenses (for costs BC and our health insurance doesn’t cover).
____________________________________________
Good points, I was wondering if anybody would pick up on what I didn’t list. Just did the monthly payments that are consistent. I mentioned that we had medical/dental/extended health which covers pretty much everything.
We do have savings and some investments that cover some of these other things you have mentioned. We don’t travel out of the country much and I did overestimate on a few things (rounded up) Didn’t mention motorcycle or boat either. We are people that have never had consistent incomes for most of our working lives, fat some years, lean others so we can adapt pretty easily. We don’t eat out much preferring to entertain at home…Anyway it seems to work for us.
#159 dddd “still hot in east van”
Yep, and interestingly it is not HAM — it’s local greater fools scrambling to get in with their 2.99 mortgage at the top of the market. Enjoy!
An interesting way to present a Canadian RE market, as a Roller Coaster in this particular scenario, BC RE market… but very interesting perspective.. it does allow you to see and feel the whole pricing fluctuation … now that prices are so high… this will be quite a ride…. enjoy.
http://youtu.be/hqOn5XEm86A
*I’m not affiliated with this video or site nor want to promote it, I just like the video.
#20 ANONYMOUS “what is the job market like where YOU live?”
Golden Horseshoe: I am employed in a similar line of work as you but I am full-time. I know of a few others who have been looking for work and yes it’s a $15/hr world now. Lots of people on contract getting pushed around and asked to do unreasonable things. Problem is, there’s always someone willing to step in where truly skilled people won’t.
14,000 respondents means nothing BTW. 13,980 of them are not truly qualified for the field you’re talking about. I once placed an ad for someone to help out taking care of my elderly mother and I couldn’t believe the number of totally unqualified people who responded, despite my listing very specific criteria.
I concur with the other person who said to go south. There is a serious shortage of qualified people in the US, particularly in the robotics and automation areas. However you’ll probably be working in Detroit Michigan. The good news it that housing is cheap…
#148 Kevin
I can just see the wheels in Gramp’s decrepit, scheming brain grinding to a halt after he read your post. Not even a blue pill could revive his lust for avarice after that.
Garth,
First time long time. I appreciate your posts. Just wondering if you can provide any advice on whether or not there is a way to short Canadian real estate (that you don’t own), rather that trying to capture the trend through ETFs, etc. I believe the CME has futures contracts for individual US markets, I’m wondering if there is a way to hedge the risk of a correction here (besides selling and renting). There are put options on commodities and equity indexes for downside protection – what about something similar for real estate, where so many people are exposed?
Thanks,
Condo marketers getting creative. Rennie and Lamb better start paying attention!
http://www.waveliving.ca/
#20 anonymous
This pretty little city of over-puffed baristas and other assorted self-ordained apostles of pointless pettitude
is also home to crappy so-called wages.
Some of it STILL clings to the underside of 12 big ones an hour.
The average private sector employer might be likened to parsimonious characters portrayed in various Dickensian novels that concern themselves with the then 100 years-on Industrial Revolution and its “Dark Satanic Mills.” These vermin are more apt to say to newcomers. “What part of THERE have you come from? Weren’t you about to catch the last boat to the mainland you insufferable peasant? Begone! I’m off to the Union Club!”
Try something in the Alberta or Saskatchewan oil patches. It looks like natural gas may soon find its bottom price in wbhich case drilling rigs will beging ramping up and there are hi-tech jobs always associated with those activites.
I wish you the best, but don’t give up hope. Stay in Canada. It’s not over in the US until the Great Bloated Triple-D Douchbag sings, and my God will THAT be some show-n-tell!!
See you when you get her Rand.
Coffee is 8RM, 2.80, Latte 13RM, 4.5 … too much, like I said, when I’m feeling home sick I go to SB, or Chili’s (at least Chili’s is half price).
Coffee on the street, my fav., $.50, lunch, $1.00, supper, usually around $2.00.
But chunky soup, or sidekicks – $4 – $5! Lucky I don’t like that processed junk.
Real Estate is over valued. I bought in 2007 for 100k CAD, now ‘worth’ $225k CAD. Same thing happening here as Van-city. Places going for 1000RM a sq/ft, condos beside me 1 million CAD+ 90% empty.
Dan.
I can’t agree with you about Tim. I am in a similar situation, only I am 60,not 54, house paid for, military pension, collecting CPP at age 60. My wife also collects CPP at a much reduced rate but she has no pension. I can split my military pension with her for tax purposes. I also have a RRSP, about the same as Tim’s, and am withdrawing $1,000.00 per month to augment my pensions. I find that my take home, after tax monthly income is far more now than what I took home when I was working. No CPP, EI or superannuation payments. No $400 per month gas expense, $200 month parking, daily Tim Hortons etc etc. If Tim and his wife cannot live on say, $5-6K per month after taxes something is definitely wrong. Yes, one could have a great deal more by selling the house but why would one want to live in a rented box at $1,100 per month. My house is my home. And I love it. Yes my RRSP could be gone within 10 years but I’ll be an old fart anyway so who cares!!
Sounds like an exciting life. — Garth
#191 Van guy
No Malay or Thai pays $4.50 for a cup of coffee. Affordable living abroad is all about doing like the locals. You hang out at tourist traps, you pay tourist prices. For $4.50 you can have a great meal.
#206 jaymo on 03.26.12 at 5:26
My house is my home. And I love it. Yes my RRSP could be gone within 10 years but I’ll be an old fart anyway so who cares!!
Sounds like an exciting life. — Garth
Sounds like a nice life if you are happy and busy, some people always want more and to “keep up with the Jones’s”
If that’s how you want to send you time, go for it. Not my choice. — Garth
Grrrrrrrrrrrrr- spent over half a day inputting our tax data into Turbo Tax Premier using their Easystep method. I know I chose Save various times and still lost everything. I imported last year’s data. I usually just use the forms method. Don’t like their Help. Used to be able to read questions and answers. Now, you have to use Skype. Seriously thinking of getting an accountant to do our taxes next year, but no idea how much they charge.
………..
#20 ANONYMOUS on 03.25.12 at 6:50 pm
I feel very bad for you. Understand how frustrating it can be. My husband took a 4 year (40 weeks/yr) Industrial Mechanics course in France after ‘high school’ in France. Moved to Quebec & worked there for many years. None of his training was recognized in NS. He took a one yr. course in Robotics at NSIT and did well. Pratt & Whitney only hired young chaps so they could mold them. Hubby helped out Engineering students attending Dalhousie. In the meantime he worked at odd jobs. Convinced him to take a full time 1 yr. course at ITI. Even though his English was lacking, they accepted him because he did well at NSIT.
Please don’t give up. I know the job market is bad, but maybe you should look at other options. All the very best in your search for a job that pays more than a McJob. I’m sure that others have far better suggestions than I.
Sounds like an exciting life. — Garth
That comment represents a disconnect between high income earners such as yourself and the others such as me. I’ve listened to your reasoning on investing and you are correct. I’m in the process of getting out of the orange guys shorts into higher paying vehicles but some of us need FAR LESS than what others need. For an example in the late 1970’s my buddy was on jury duty and hitched a ride with corporate lawyer. The lawyer could not fathom living on 10 grand a year, buddy could not believe one could spend 60 grand a year. I’m listening to what you say I just need less than the majority. I hope to keep reading what you post long after real estate is done like dinner.
Just to recap. BUYER BEWARE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ACROSS CANADA. NOW IS NOT THE TIME TO BUY A HOUSE (and not for a few years from now at least). BUYER BEWARE.
My take on the Ontario brothel thing is they have found a way to tax a previously invisible business and all of the employees. The price to get laid is going to get expensive and when the other Provinces fiqure this out…
There has been talk of low intrest rates forever just like Japan. This is true, Japanese intrest rates have been EXTREMELY low for decades now. Just like Japan, low intrest rates did nothing to stave off the real estate CRASH, neither did low unemployment, bumper sized exports, and the highest savings rates likely in the entire world. Prices CRASHED and absolutely did not rise and are not rising now. Bubble mechanics call for a horendous blood bath. Good luck with your melting soft landings. BUYER BEWARE. There is no few year storm to weather but rather a few generations storm. Buy and hold but buy 5 years or even 10 out from now. Remember, low rates, low unemployment, expanding American and world markets did nothing for the Japanese Real Estate crash. Do not let your Real Estate Agent tell you otherwise. You do not have enough cash to buy and hold as long as it will take unless your children and grandchildren throw in on the scheme. BUYER BEWARE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ACROSS CANADA. NOW IS NOT THE TIME TO BUY A HOUSE.
#165 Victor on 03.26.12 at 1:08 pm
RBC raises mortgage rates, signals end to price war
Can you not anticipate what’s about to happen.
The thousand of people pre-approved now have less than 3 months to buy before their locked rate expires.
Look for insane bidding wars over the next few months.
“The US dollar will be reserve currency at least as long as everyone reading this blog is alive. — Garth”
Can we have this quote carved into a stone tablet and have someone photograph you holding that bare-chested?
Seriously though, the U.S. Dollar will form a portion of the world reserve into the far distant future, but its sole position is all but over, within the next 10 years the world will be dealing with a reserve currency/commodity basket that will more fairly represent the interests of the world community. U.S. leadership is in question, I’m confident it will re-emerge, but the nations economic role will diminish as sure as day turns to night. The West’s hegemony will be broken over the back of a barrel of oil.
Listen to what James D. Wolfensohn says about the economic landscape of the future, and North America’s fate (disregard the video’s theatrics – the content is good) – http://www.youtube.com/watch?v=mOwZwkhFemQ
With the cost of “Retirement Living” already high (and bound to go higher) in most if not all Western economies, we’re surprised that we’ve NOT seen a massive efflux of retirees to the less expensive parts of the Planet. In the Americas there are great places to live, however the major downside (well, SEEMS to be a much-talked-about MAJOR downside) is the need to learn a “Foreign Language” – Spanish or Portuguese.
Look, we’re BOTH “on the mature side” of 60, and we have BOTH picked up a fully working knowledge of Spanish without too much drama, helped by living in a Spanish speaking community – you learn to say what the locals say, and so your real, working knowledge of the language develops in just the same way as you originally learnt your Native language.
Not saying where we are will suit everyone (Quito, Ecuador) but there are a LARGE number of US and Canadian ex. Pats here and none of them seem keen to return home, except for the occasional vacation “to see just how dear it has all become”.
A “little wet” just now, but warm all the year round – so NO heating costs, NO furnace to repair, maybe an A/C system repair (but a/c hardware seems durable – our rental property has a 25 year old Carrier system that still works just fine), and really it doesn’t take that long to acclimatise to the warmth anyhow.
Cost of living COMFORTABLY and WELL is LOW, and Ecuador is becoming a very vibrant, economically expanding Country.
Try it – you might even like it. We did and we’ll happily stay unless circumstances change (if they do, we’ll simply move on again).
If your retirement income won’t cover your expenses, start learning a foreign language…. and consider moving to a cheaper country. Hey, you might even get by pretty well with the rental income you’ll be getting on your otherwise unsellable house… and still have spare change for after-hours Margaritas. Cheers!
Sharing your home with someone who will help
youwww.firststopcareadvice.org.uk › Housing advice ›
Homesharing is where a younger person lives with an older person and provides daily help and support in return for accommodation
#216 P & T S
“…is the need to learn a “Foreign Language” – Spanish or Portuguese.”
Belize!
http://finance.yahoo.com/news/18-best-places-retire-overseas-200012124.html
#140 JESS: “The carp consume enormous amount of food that other fish rely on, muscling out native species. The fish can grow to up to 3 feet long…”
********************
Are they good eating?
#186 NoName… okay, I accept the possibility that you didn’t intend to offend. But your argument is ignorant. Just because they are wearing quite useful hats for that type of work, doesn’t mean they were “imported”. How does one “import” workers in Canada? Enlighten me… and I’ll forward your comments to the Minister of Immigration, that lunatic Kenney, as he is right up your alley it seems.
#177 Blacksheep… You do know that Ron Paul is an actor, right? You’ve probably seen him as Magneto. A lot of the Congress Critters are actors. It’s all an illusion. Mind control.
#220 Daisy Mae on 03.26.12 at 8:38 pm asked:
Are they good eating?
Delicious!