Planning

In a week we come full circle. Almost half a decade after deciding unbridled real estate speculation was a good thing, the government’s now terrified of it. After telling people they could buy houses with no money down and spread the payments over 40 years, and the feds would back them, we’re just days away from returning to where we were in 2007.

The intervening years have brought the highest debt and prices in history. So the trip back down will be rocky. But worse, we’ve collectively lost our perspective. I’ll let Jeremy explain. He came here for a spanking.

Hello Garth, thanks for taking the time to read this email – I was recently pointed to your blog and thought: whoa this guy might tell me something painful and blunt. Literally on the cusp of selling the home (ball is in our court to make a move) – and trying to make sense of the numbers.

We (lovely wife and myself, 35) bought in spring 08 for $419,000, put basically nothing down and crapped our pants. We now owe $325,000 and hope to sell for $500,000.

We have three options –
1 – buy a house that is larger (we have a 5 year old and a newborn).
2 – rent the identical house we have now for $1800 monthly
3 – stay put, shut up and thank goodness for decent gov’t jobs (can I even say that anymore?!?)

With each having “OK” pensions (OTPP) and little in savings should we be trying to side step the market by selling the house and renting- or as they say – “never try to time the market, just ride it out”.  With an appreciation of roughly 80,000, will the future housing markets move down more than 20% (break even number)? Should I care about this – or is it not worth stressing over?

First, let’s figure out the numbers. If you sell for five hundred, the net (after 5% commission, mortgage discharge and penalty, legals and moving) will be about $135,000. If you covet a larger house, then presumably it will cost more. So let’s budget $700,000. To avoid mortgage insurance you’ll have to put down more than you squeezed out of your sale – about $19,000 more, including the usual closing costs.

So now you have $19,000 less in savings than you did before, and a mortgage of $560,000 – or 72% more debt. All for a bigger house. Oh yeah, and a wife (on mat leave) and two kids. At age 35, I’d say the rest of your natural life is pretty much accounted for. Hope you like it.

But if that scares you (it scares me), then scratch Option 1. As for the second choice, you’d presumably be doing this to harvest the capital gain in your home (less than $80,000) and wait for prices to take a dump so you could jump in later and buy the big house for less. That might work. Unfortunately with just $135,000 to invest for rent-busting cash flow, you’d still have a net monthly outflow of about $1,200, and an expectant spouse who wants to nest. What happens if it takes three years for the big $700,000 houses to erode to $500,000? Also scary.
So Option 3 wins, sort of. But sounds like it’s time to review the choices you’ve made. You (a) got married, (b) had a kid within months, (c) bought a house with no money, (d) had another kid and (e) managed to save nothing, despite two government jobs. Now you’re vexing and writing a pathetic blog for advice on whether or not to buy a bigger house and leap into more debt.

See a pattern here?

You’re courting risk, making hormonal decisions and failing to understand future obligations. Without savings, what’s the plan to help pay for your kids’ education? How screwed will you be if your spouse decides to stay at home with two small kids, rather than returning to work? What happens when you mortgage renews at 3% more in three years? If you haven’t been able to save any money with two incomes and one kid, what’s the plan with two of them? And are you sure those public pensions will be firing on all cylinders in 25 years?

For example, the Ontario Teachers’ Pension Plan will run a $9.6 billion deficit this year, thanks to an army of retirees and shrinking revenues. Plan administrators are mulling over “reducing pension benefits members will earn in the future” by 2014. Did you consider this before you and your wife went shopping for a McMansion?

If you can afford to sell your house and rent, as you pondered, then you can afford to stuff $1,200 a month into your TFSAs. Get the money into an ETF medley, and when you hit the limit (it will be $50,000 between you next year), start shoveling cash into a joint investment account. That will allow you to do some income-splitting if she decides to stay home (in which case throw some bucks into a spousal RSP as well). No stocks. No mutual funds. Once you hit a hundred or more in investments, get a fee-based guy to help you.

Finally, if real estate chokes 20%, then your existing house is worth $400,000 and you have $80,000 in equity. If you buy the $700,000 place, its value drops to $560,000 and your equity plunges to zero.

And you’re a teacher?

152 comments ↓

#1 Rental Monkey on 07.01.12 at 6:38 pm

First!! Woo hoo! Seriously though, HAPPY CANADA DAY, to all my fellow Canadians, at home and abroad. Thanks Garth for your continued effort with this blog. A true Canadian hero IMO.
Now, I will go back and read the post before I hit the celebrations in BC’s capital. And the sun has finally come out!!!
Happy Canada EVERYONE!!

#2 Toronto Real Estate Agent on 07.01.12 at 6:44 pm

Smart advice! And I am Real estate agent who agrees with Garth ! go figure

#3 Loom on 07.01.12 at 6:46 pm

Happy Canada Day!

#4 vancouverite on 07.01.12 at 6:47 pm

“Planning”? I think most buyers in Vancouver today are “Dreamers” and living off the “paper profits” in the homes.

#5 Randy on 07.01.12 at 6:54 pm

Don’t worry….McGuinty will top up the Teachers Pension Plan,,,,haha

#6 Tripp on 07.01.12 at 7:00 pm

Happy Canada Day everyone!

Garth, thank you for your time and efforts dedicated to make this country a better place.

#7 AlanC on 07.01.12 at 7:11 pm

Stick it to him.

It never ceases to amaze that people think of the here and now and never in 20 yeras time.
Something wrong with the education system, I think!

AlanC

#8 Leggendario on 07.01.12 at 7:12 pm

First to read this post…

Happy Canada Day Everyone!

#9 Paul Bronfman on 07.01.12 at 7:14 pm

Trending On Twitter –

Canadians are using the hashtag #DenounceHarper to voice dissatisfaction with the Harper Gov.™, or just the man himself.

http://www.huffingtonpost.ca/2012/07/01/denounce-harper-twitter-canada-day_n_1641094.html?utm_hp_ref=fb&src=sp&comm_ref=false

…………….

#DenounceHarper tag has 1,500 tweets generated – 1,553,514 impressions reached an aud of 353,668 followers w/i 24 hrs! #cpc #cdnpoli

.
.
.

#10 Mean Gene on 07.01.12 at 7:16 pm

Maybe getting a job for the summer would make the financial situation better.

#11 thinker on 07.01.12 at 7:19 pm

Garth I want to explain some confusion. These news are very bullish condos – the 30>25 year change is a 150$ a month on the average condo. HOWEVER, CMHC is not turned off and you can still get the fancy leverage. Housing on the other hand will only be bought by strong hands. Read between the lines, this is going to push more people into condo’ and less into SFH. F said he wanted to cool the Toronto condo market??? These measure will keep more people in it and we will see price increase into the year end.

It will hurt home prices for sure >1M But that weak buyer will now enter the condo market.

Think about it.

#12 Piccaso on 07.01.12 at 7:31 pm

No HAPPY CANADA DAY here.

#13 live within your means on 07.01.12 at 7:36 pm

For example, the Ontario Teachers’ Pension Plan will run a $9.6 billion deficit this year, thanks to an army of retirees and shrinking revenues. Plan administrators are mulling over “reducing pension benefits members will earn in the future” by 2014.
……………….

I retired with a DBP with our prov. govt & 2 years ago we were informed we’d only receive 1.25% for the next 5 years and then they’d look at it. Doubt it will be indexed to the CPI after. So yeah, don’t count on it.

#14 DonDWest on 07.01.12 at 7:50 pm

What leaves me scratching my head with this couple is what exactly are they spending their money on? A teacher couple, nice paying government jobs and put nothing into retirement assuming they’ll have pensions. Although the house is pricey at $325,000 left to pay off, based on the salaries teachers earn today that’s around 3 to 4 times their total income. Not the outrageous amounts we sometimes see at anywhere from 5-10 times income.

They bought this house with nothing down? Again, with double income good government jobs, what did they spend their money on before they bought the house?

Yes, I realize they have a kid, and while kids are certainly not cheap, a single tot can’t be this expensive. They’re hiding something, what is the money possibly being spent on? Someone has a gambling or drinking problem?

#15 Grim Reaper/Crypt speculator on 07.01.12 at 8:00 pm

Where’s Smoking Man…..testing his Volvo’s brakes ?

bwahahahahahahaha….

PS there is no Canada Day….it is “Canuck Daze”….you are all still a colon-knee of the Crown

#16 CoreyMc on 07.01.12 at 8:09 pm

#11 thinker

Garth I want to explain some confusion. These news are very bullish condos – the 30>25 year change is a 150$ a month on the average condo. HOWEVER, CMHC is not turned off and you can still get the fancy leverage. Housing on the other hand will only be bought by strong hands. Read between the lines, this is going to push more people into condo’ and less into SFH. F said he wanted to cool the Toronto condo market??? These measure will keep more people in it and we will see price increase into the year end.

It will hurt home prices for sure >1M But that weak buyer will now enter the condo market.

Think about it.
——————————————————————————-

OMFG! When less peo[le can qualify for expensive homes what do you think happens daaaaaaaaaa! Wow your a good thinker!

#17 Aaron - Melbourne on 07.01.12 at 8:11 pm

From Melbourne: “The Block” reality TV show auctions were screened last night.

http://www.theage.com.au/entertainment/tv-and-radio/teams-buck-market-trend-as-hammer-drops-on-the-block-20120701-21az5.html

The Auction results defy my belief.

As the contestants watch the bidders throwing around $10,000 bids like confetti and running HUNDREDS OF THOUSANDS OVER RESERVE one would be excused from thinking there was any form of a recession happening in Melbourne.

But then again, its a TV show and one must suspend reality. The top end of town must know a bargain when they see it, no?

#18 Dan from Richmond Hill on 07.01.12 at 8:12 pm

– educated people,
– 35 years old,
– 2 good incomes,
– no savings,
– large mortgage,
– 2 small children
Don’t worry, be happy!

#19 Off the River on 07.01.12 at 8:13 pm

Thanks for your hard work Garth. You are a great Canadian.

#20 AprilNewwest on 07.01.12 at 8:22 pm

#13
Can you explain what does DBP stand for? Also 1.25% of what?

Garth when I tried to submit this I get a message saying “duplicate comment”. I was trying to reword the comment.
Thanks

#21 Mark on 07.01.12 at 8:30 pm

Pretty ridiculous that the ‘market’ has basically given them $80,000 in completely unearned, “free” equity. On an inanimate object no less.

#22 Tim on 07.01.12 at 8:36 pm

Denounce Harper trended on Twitter higher than Happy Canada Day

http://www.huffingtonpost.ca/2012/07/01/denounce-harper-twitter-canada-day_n_1641094.html?utm_hp_ref=fb&src=sp&comm_ref=false

Shows where Canadians are at…

#23 teachers are dumb on 07.01.12 at 8:40 pm

#14 DonDWest

hmmm…maxed out 2 teachers make $190,000 a year.

they must have a crack addiction.

#24 Toronto_CA on 07.01.12 at 8:42 pm

I saw on RedFlag Forums some early June Vancouver numbers, and the number of sales is the lowest since 2000 (lower than June 2008). Listings are the highest they’ve been in a decade. So we have extremely low sales with extremely high inventory…BEFORE the changes to the CMHC take place and with record low mortgage interest rates.

Month of June sales all properties in Van:

2000 = 1,985
2001 = 2,831
2002 = 2,689
2003 = 3,525
2004 = 3,501
2005 = 4,333
2006 = 3,951
2007 = 4,244
2008 = 2,425
2009 = 4,259
2010 = 2,972
2011 = 3,262
2012 = 2,422 (Lowest since 2000!)

#25 T.O. Bubble Boy on 07.01.12 at 8:46 pm

The fact that the wife is on mat leave may not matter all that much – don’t teacher’s get ridiculously generous mat leave benefits?

Good to see tax dollars propping up another household… How many teachers are in this situation (no savings and highly leveraged house)? Do teachers think that they can spend spend spend because there is that giant pension plan waiting for them?

#26 DonDWest on 07.01.12 at 9:11 pm

I’m often left wondering who out of the professions is the absolute worst with money: Doctors or teachers? It’s tough to decide. Recently, I’m leaning more towards teachers. . . Now you know why we can’t teach financial education to our children. . .

#27 Toronto real estate bubble on 07.01.12 at 9:12 pm

Keep the good work Garth!

Happy Canada Day!

#28 Randy on 07.01.12 at 9:22 pm

Maybe financial planning should be a subject taught in school…..except these liberal boob teachers and profs would bastardize it…..everyone would have negative equity and a degree….

Liberalism will destroy everything….

#29 John on 07.01.12 at 9:24 pm

Nostrodamos Le Mad Vlad is a links master. A lot of great information from a lot of solid sources. I thought of that while reading the absurd post of AlanC. Check it out:

“It never ceases to amaze that people think of the here and now and never in 20 yeras time.
Something wrong with the education system, I think!

AlanC”
——–
Let’s hope AlanC posts some of his alternative education experience and suggestions ( like those posted by Nostradamos Le Mad Vlad). My bet? His “20 year planning” will be based on fantasy. Complete fantasy. No different than the guy marrying his only girlfriend, following whatever society offers and giving away all his power.

It should be made very clear that AlanC’s plan is a no-go for sure…while he looks down on a neutered male following his wife’s whims.

The “planning” I’ve been reading on here as an alternative has been really shaky. Non-existent and based on delusion. In outright defiance of reality.

All the while? All the information about what is going on in our society and the world is freely available.

The “twenty year planner” excludes reality? That behavior is as much a pattern as the trained sheepdog writing in to consider “options”.

Everything is forgiveable and we all make mistakes, but what’s up with the reverse gear?

#30 Jim on 07.01.12 at 9:25 pm

Oh lord, my parents are former teachers who become school psychs. They put absolutely NOTHING into any form of investment save buying larger and larger houses. Right now they are a retired couple (65 and 70) sitting in a 6 bedroom house in richmond that I told them to sell last fall. It isn’t selling. Small pensions and no other financial assets. Not one. Not a single ETF, preferred share or stock.

I curse being born into a family of teachers. Sure, you read to learn at an early age, but the financial literacy… my lord. My chinese friends are horrified to hear about their way with money.

#31 I'm stupid on 07.01.12 at 9:28 pm

Wow Garth, you kicked the shit out of Jeremy.

People let me teach you a tric regarding affordability. It’s easy and simple to remember. Here goes

Take your income and divide it in half (as taxes paid don’t count in net income)

Every time you buy something multiple by 2 (the amount of money you must earn pre-tax in order to net the price)

If you buy something on credit multiply by 4 ( the amount of money you must make pre-tax in order to net price plus interest that will surely double the original price)

So 700k is actually 2.8million pre-tax income.

Two teachers earning 80-90k per year each is 160-180k total.

How long will it take to be mortgage free?

#32 I'm stupid on 07.01.12 at 9:30 pm

700k 25 year amortization becomes 1.4million

#33 DonDWest on 07.01.12 at 9:41 pm

Speak of the devil, geeez, do you think this is a bidding war being set up? *Laughs*

http://www.realtor.ca/propertyDetails.aspx?propertyId=12158318&PidKey=-2087549008

Listed at $315 for a 2379 sqft home, all stainless appliances, luxury house next to a large park on a quiet cul-de-sac. Goodness, the house is even built out of slate and has very little wood. Close to my region too! I’m going to have some fun!

#34 Western Observer on 07.01.12 at 9:59 pm

As #15 Gream Reaper said “Where is smoking man?”

I would like to hear what he has to say about this one.

Sure says alot about our so called education system.

Looks like having an education doesn’t necessarily make you smart.

#35 John G. Young on 07.01.12 at 9:59 pm

Happy Canada Day to Garth and the Blog Dogs!

And as always, thank you Garth for your great posts.

And as for Jeremy, who wrote “We bought… for $419,000, put basically nothing down and crapped our pants…” — it’s comforting to know that professionals can always be counted on to raise the level of discourse.

John

#36 West of the Grand on 07.01.12 at 10:05 pm

#25 – T.O. Bubble Boy

“…don’t teacher’s get ridiculously generous mat leave benefits?”
——————————————-

Is your head up your a** or something? Teachers on mat leave get nothing, just like most of the rest of us. They are welcome to apply for EI payments, just like the rest of us.

You must be one of those whiners who think that teachers get everything that you don’t get. Take off your blinders and research the facts before you fire up your next uninformed whine.

P.S. – I am not a teacher.

#37 OlderbutWiser on 07.01.12 at 10:08 pm

#20 AprilNewwest – “dbp” refers to defined benefit pension plan. One of those gilded retirement plans where the employer (or the taxpayer in this instance since the employer is the gov’t) takes all of the investment risk. The 1.25% the poster is refering to is the inflation index that the plan is providing. Since this is less than the rate of the CPI (consumer price index), the original poster is concerned that the plan will no longer be indexed to inflation going forward.

Also, for what it is worth, I do not think that teachers are any worse than the average Joe for not planning for the future. I think it must be human nature since it is so very common. I see so much of the “keeping up with Jones” style of spending that it truely boggles my mind.

#38 espressobob on 07.01.12 at 10:13 pm

The best part of stories lke this one is the simple fact that so many FOOLS are borrowing beyond their means. Thankyou CMHC! The rest of US who work, pay our taxes, & invest our money, and stay out of debt are the poor SOB’s who will foot the bill when this overinflated RE bubble explodes, like the fireworks. Happy Canada Day?

#39 LH on 07.01.12 at 10:16 pm

can’t wait for SMOKING MAN to teach this teacher a lesson :)

#40 OlderbutWiser on 07.01.12 at 10:19 pm

ummm…West of the Grand….I think perhaps tis you who should gather a few facts as many companies do indeed “top up” maternity leave EI benefits to a certain percentage of the employees salary. 70% to 90% is not unheard of. Although I do not know first hand what teachers receive, it would not be farfetched to assume they do receive a generous top up.

#41 T.O. Bubble Boy on 07.01.12 at 10:30 pm

@ #36 West of the Grand on 07.01.12 at 10:05 pm
#25 – T.O. Bubble Boy

“…don’t teacher’s get ridiculously generous mat leave benefits?”
——————————————-

Is your head up your a** or something? Teachers on mat leave get nothing, just like most of the rest of us. They are welcome to apply for EI payments, just like the rest of us.

You must be one of those whiners who think that teachers get everything that you don’t get. Take off your blinders and research the facts before you fire up your next uninformed whine.

P.S. – I am not a teacher.
———-

Ok buddy – maybe try doing some research before your uninformed whine… teachers definitely receive a generous “top up” (in other words, salary topped up to a level far higher than EI – something like 75%-80% I believe)

What happened to you on Canada Day to piss you off? Fireworks accidentally go off in your pocket?

#42 a prairie dawg on 07.01.12 at 10:32 pm

#20 AprilNewwest
#13
Can you explain what does DBP stand for? Also 1.25% of what?

– — –

Defined benefit pension. (fixed payments for life)

Probably 1.25% annual cost of living increases.

#43 Grim Reaper/Crypt speculator on 07.01.12 at 10:33 pm

Geez..I feel like a realtor..

Nobody wants to buy a condo/time share in the sky.

I may have to lower my high standards and go the .01% commission route.

Pssst: Greater Fool Blog Commenters and High School Counsellers get to be at front of the line…(No Beelzebubs SVP)

#44 a prairie dawg on 07.01.12 at 10:42 pm

#39 LH

And I can’t wait for God to win.

#45 Nostradamus Le Mad Vlad on 07.01.12 at 11:16 pm


“Planning (such as here). In a week we come full circle.” — Actually, the fiscal takedown of the west is almost complete, which is why wars are rampant. There will be a few who profit (the BdBs, etc.) but how much remains to be seen.

The rest of the stuff, such as nine mln. boomers retiring in 2015 and beyond here, Odg knows what in the US (throw in ObombaCare) and a bunch of other goodies, we’re pretty much toast.
*
#172 cynically — “Traders sent to US for prosecution where they’ll get off scot free.” — Such as this — Govt. by banks for the banks.

Hmmm. I realize that Connie Black is no more than a two-bit gigolo, prowling the streets hoping that he can show a woman a few tricks of his.

The US prosecuted and jailed him? Well they have to show the world they’re good at some things. Yes, Connie is a convenient scapegoat, just as Bernie MadoffWithAllYourMoney was. What about these yahoos? Sure they’ve been fired, but will they be prosecuted? Spend time in solitary? Probably not.

These links (and many others) show how Wall St., in particular GS (Mark Carney, Lloyd Blankfein — doing oDg’s work, no less — Hank Paulson etc.) first tried to screw Iceland, then Greece. Failed with Iceland, but now the people of Greece have nothing left to lose, so they can toss the BdBs as well.

At similar time frames, Jamie Dimon was busy groveling a meek, half-hearted apology for having a US$9 bln. trading loss, along with their derivatives, silver and copper fiascos they’ve been involved in.

Have either of these two been sent to jail? No, but the paid-for and controlled m$m ignores them and focuses on made-up garbage about Iran’s non-existent WMD, whereas Israel’s Dimona nuke plant could wipe out the world (incl. Israel).

I know I’m centuries old (called evolution), and I won’t be around for too long. Further, I’m having a blast posting here.

#194 Grim Reaper/crypt speculator — “I got BPOE trying to sell me a time share…what should I do ? Smoking Man outbid me.” — Have BPOE sell it to Mikey the Realtor, then the two of them can live happily ever after!
*
China Signs Preparing for something; US$80 Tri. That’s how much a fiat dollar is worth; Cesspool This blog or London; Libor “The rigging of the critical Libor bank lending rate may have prompted the financial crisis which cost taxpayers billions of pounds in bailouts, a former senior executive at Barclays has claimed.”; 2:05 clip Are banxters human? Spain 12 months ago, life was quite different; Six Ways Back door bailouts; Modern Tech Moguls “Steve Jobs, who was worth about $9bn when he died, doesn’t even figure.”; Bre-X Remember them?
*
7:18 clip E.O. allows Obomba to bring back slavery, and Obomba and Fukushima “Want to know why Obama is ignoring Fukushima? The largest nuclear operator in America owns a piece of him.”; ObombaCare Not in Fla. or Louisiana; Avoid Becoming a target; Monsanto Skip the ad (top right); More Wars Strangely, this is not about Obomba, as he is a puppet. This is about the cycle change, the TPTB and using war as an excuse for completing the fiscal takedown; Colombia decriminalizes coke and weed. The CIA will NOT be pleased! Electric Paint New gimmick; 5:29 clip Eric Holder incident used to destabilize Mexico? Japan Nice find of rare earths; 0:43 clip Taking an Easter Island statue for a walk; Meteor in Perth Oz; Large Blimp Memories of The Alan Parsons Project song “Eye In The Sky”.

#46 eddy on 07.01.12 at 11:17 pm

Canada is still a colony –

http://www.youtube.com/watch?v=7ehe4HMEhHU

#47 So sad on 07.01.12 at 11:18 pm

The video, in the previous post, of the house being demolished is extremely sad.

Imagine how you would feel if you were left suddenly homeless. The effect of the physical destruction of one’s home is no different to financial destruction.

Those chortling with glee on this blog at the prospect of others misery will not escape unscathed, either

#48 tundrapete on 07.01.12 at 11:25 pm

There is a reason none of us have ever been taught any monetary policy in Canadian schools. We would have all figured it out at an early age how we are being manipulated tax slaves for a very few controlling fraudsters. Canadian policy is simple. Treat us like mushrooms, keep us in the dark and feed us bullshit. Effective and simple has worked for years.

#49 Toronto_CA on 07.01.12 at 11:44 pm

I read this article tonight:

http://www.thestar.com/news/gta/article/1220096–deadbeat-dad-flees-to-philippines-leaving-four-kids-without-support

And because of Garth’s blog, all I could think of is what role the house plays in all of this. It’s about to go in foreclosure, huge mortgage and huge value. After it’s gone this woman will be on welfare more than she already is.

Can’t say I really blame the guy for saying adios to Canada. Paying $4k a month in support payments on $100k income would be impossible, he’d have to live on about $20k a year after tax if he was able to keep that income up. But those poor kids.

#50 AprilNewwest on 07.01.12 at 11:49 pm

#42 Prairie Dawg
Thanks you.

#51 a prairie dawg on 07.01.12 at 11:51 pm

Asia down sharply. More to follow overnight. Tomorrow we ‘wake up’ to the results.

http://www.businessinsider.com/june-global-pmi-2012-7

#52 daystar on 07.01.12 at 11:51 pm

Lol, lets bash the teachers, they are civil servants after all, working for the govy and they make oh, so much! Why, we have a couple regulars who bleat on and on about how we should get rid of them all and everything will be just fine. Truthhammer, er, uh, I mean Randy, I won’t tell anyone who you were (That heavy use of periods lol, you just feel so complused to use them don’t you, each point is oh…. so….. important…. lol. Don’t worry, I won’t tell anyone, your secret’s safe with me)

It matters not that Ontario teachers are counted among the top 3 provinces of Canada placing 6th in the world among education in 2010 (1st is hard to achieve, we are competing with superior communist/capitalist asia and socialist Finland after all).

Lets see now, how did our resident teacher bashers do in “knowing” how much teachers make in Ontario… hmmm.. here we are:

http://www.etfo.ca/bargainingandagreements/comparingagreements/pages/default.aspx

Is the max too much? If your good at what you do…

http://www.thestar.com/opinion/editorialopinion/article/1138938–ontario-teachers-deserve-to-be-paid-more

For the lazies who don’t read links, Teachers max out in Ontario at $93 G’s and it takes most of them 10 to 12 years to get there. Most teachers begin salaries between $48 to 52 G’s. This of course, is after 4 years or more of school and roughly 25 to 50 G’s of debt depending on how much one could work through college. Oh, this is big money!!!! So much dough… a good chunk of entry level jobs in labor pay that or more, but I digress. And those mean Liberals are suggesting a 2 year freeze in pay. Ouch!

http://www.thestar.com/news/canada/politics/article/1160752–ontario-budget-liberals-warn-teachers-doctors-over-pay

So lets put things in perspective. In 2008, Jeremy was pulling in $72 gross and this assumes he’s been teaching for 7 years prior, at the age of 30. His wife, likely 3 to 5 years younger, would have made 60 G’s or so clocking them both in at 130 G’s gross in 08′ between the two of them and growing by 8 G’s a year. They’ve got between 50 to 100 G’s of student loans that have kept them broke until 08′ (as evidenced with a 40 year nothing down loan, likely their only alternative to own a house) with their first kid in the world and spent their last four years paying off debt. The last of the student loans and 94 G’s worth of mortgage plus interest have come out of the kitty after taxes and some of us still wonder where it all went like they hang around crack houses.

Yeah… perspective. I really feel for the poor fellows who have to belittle others to build themselves up. The things some folks feel the need to do to prop up their low self esteem, my heart goes out to them. Many of them are victims, having been abused and abandoned. For the rest, its learned. They are now dramatically lowering the value of the rest of us in a desperate bid to reinflate themselves. They have my sypmathies, my heart goes out to them.

But again, I digress. :)

Jeremy, we live in a difficult world. We are either with Harper or were with the terrorists. And the pediphiles. And the Nazi sympathizers. And the socialist unions. And that means innocent civil servants like yourself I guess. How can one consider finances when we have such distractions? How can we consider investing when we are swimming in debt? These are difficult questions, the signs of our time.

Nevertheless, Garth is no fool. ETF’s are the place for the novice investor to start and speaking of starts, start making a move towards socking ETF’s into your gains free TSFA’s like Garth says. Shortages of oil at $150 will come. A cold winter and Nat gas at 10 bucks will come. Patience is the winner and at 35, you’ve got lots of time ahead of you so… do it!

As far as the house goes, the wise monetary choice is to take the capital gain and rent for 3 years. If you can flip it for a half mil, do it. If the MIL/FIL and wife needs the talking point/status and social security, well… some things are really more important than dough because it doesn’t make any sense financially and then explain to them what tighter credit will do to valuations. Make sure they know that it really is more important than dough because it makes much more sense to rent than own in most urban markets at present values. Remember, all things revert to the mean including the value of your house (and most everyone elses).

Now lets shoot for “furst” in the world of education, best of luck and happy birthday Canada!

#53 Fisc on 07.02.12 at 12:00 am

@Toronto_CA (#24).

“I saw on RedFlag Forums some early June Vancouver numbers, and the number of sales is the lowest since 2000…”

So, 3 months in a row with number of sales at the lowest since 2000 or 2001 in Vancouver:

May 2012:

“The group says there were 2,853 sales through the Multiple Listing Service in May, 15.5% decline from a year earlier. May sales were the lowest for the month since 2001 and 21.1% below the 10-year May sales average.”

http://business.financialpost.com/2012/06/04/fewer-homes-selling-in-vancouver/

April 2012:

“Vancouver home sales fall to lowest in April since 2001, real estate board says”

http://business.financialpost.com/2012/05/02/vancouver-home-sales-fall/

Vancouver Real Estate speculators must sell RIGHT NOW!!

#54 Casey on 07.02.12 at 12:04 am

Okay, I don’t usually post comments but I wanted to clarify a few things as the maternity benefits of teachers seems to be a hot topic tonight…

1) Each school board negotiates separate collective agreements with their members. This means the health/dental and maternity benefits teachers receive depends on the collective agreement agreed upon and varies greatly between school boards.

2) The largest public school board in Canada offers the following SEB (Supplemental Employee Benefits) for maternity leaves in addition to E.I. as follows:

“Seventy-five dollars ($75.00) per week will be paid for up to 15 weeks following the two-week EI waiting period, provided the teacher continues to receive EI benefits.”

If the teacher has the child in the summer, no SEB. If the teacher chooses not to return to teaching the SEB must be repaid.

———————————————————————-

Garth,

I love your blog, thank you for all that you do!

#55 Charles Ponzi on 07.02.12 at 12:12 am

We haven’t had a recession for so long that young couples have become complacent. Short frequent recessions would have kept Jeremy on his toes.

The banks were guilty of irresponsible lending when they provided a mortgage to Jeremy without requiring a significant deposit. The government and the banks have together created a debt trap for thousands of Canadians by making debt cheap and easy for too long.

Will the government and the banks take responsibility for the real estate property bubble? Savers and financially prudent individuals who have resisted the debt trap and lived within our means are furious as interest rates are kept artificially low while the true cost of living continues to rise along with higher taxes.

Savers have every right to feel angry and betrayed by bankers and politicians who are ultimately responsible for the real estate property bubble in Canada.

I hope Jeremy is teaching his students how to recognise and benefit from future Ponzi schemes.

#56 When will it end? on 07.02.12 at 12:34 am

#41 and #36

In BC it’s hardly generous. Teachers receive 17 weeks supplemental top up. Mostly at a rate of 75% of their regular salary. Better than a kick in the face but not generous…

#57 if you have nothing, bet it all!... (?) on 07.02.12 at 12:39 am

He may be courting risk, but did it ever pay off big time.

If at age 30 he had nothing, paid 0 down. and now 4 years later (if he sells), he will earned 80K on that property. Remember, spring of 2008 was not a particularly great time to buy either.

I’m not saying he made a good decision, only he was lucky.

My question to you fine readers — if you have nothing, what is wrong to bet it all? The downside is you declare bankruptcy… but alternatively, if you _do nothing_, your downside is you get priced out of the market and never own a house. Am I missing any logic here?

#58 Tony on 07.02.12 at 1:16 am

Jeremy could relocate to a place where real estate won’t fall then wait for a 40 percent correction and move back and buy-in. Back in 1987 you could sell and move to Elliot Lake make some money and move back after a 20 percent decline. This time around no place will go up in value so he only has two options sell and rent or move to a place that won’t fall in value then move back after a 40 percent correction and buy back in.

#59 Smoking Man on 07.02.12 at 1:20 am

Happy Canada day . You fks are such lossers. From the day your born you are bar coded indicatating who your 46 precent of your income gets allicated too. I say screw the machine go off the radar cash only put it all in your pocket. Less of cource you have something to lose.

Canada is the land of wimps in 1786 or close the yanks said we aint paying no tax . Sadly the machine waited for the brains to die off. And in stelth bent them over and did the deed. Atleased the yanks way back when said I anit going on track six.

So happoy tax farm slave canada day. lossers

#60 Tony on 07.02.12 at 1:27 am

#24 Toronto_CA on 07.01.12 at 8:42 pm

When you see the figures with a decimal point shaved off of it them that’s when they should worry. June 2012 looked very healthy meaning the clueless still abound out west.

#61 boomorbust on 07.02.12 at 1:35 am

Ah, everybody don’t be so hard on the teacher couple. They took the time to read the blog, more than once I assume, wrote Garth expecting a spanking and a thorough lashing from the comment section. And got one. I think there is hope for them, the lights are now on.

I think they should thank whomever (is that correct, should ask a english teacher) pointed them to this blog.

It most likely will change there lives for the better.

#62 Gunboat Denier on 07.02.12 at 1:53 am

30 Jim – can you tell us exactly how “small” their teachers pensions are? Keep in mind they should both
get close to max CPP and OAS as well. In total, my bet
would be they are close to 70% of pre-retirement
income, with none of the work-related expenses.

The house in Richmond I cant help ya with.

#63 Smoking Man on 07.02.12 at 1:55 am

TEacher are idiots. I am to shit faced to read some think about teacher. I came to atlantic city to thow lot away and god sends a lighting bolt not few feet away. God Bahahaahha. Teaches inTelecuals

Why becuse you can see the obvious you bought to cool aid in jones town you would have said more sir. Tommorow went I can underd stand whast was said her tonight I might say something. Till then

Tonight. We are young set the world on fire I can get higher tan the sun. Bla bla bla

#64 Devore on 07.02.12 at 2:08 am

#28 Randy

Maybe financial planning should be a subject taught in school…..except these liberal boob teachers and profs would bastardize it…..everyone would have negative equity and a degree….

I’m all for financial literacy, and school would seem like the logical place to teach it, but then I am terrified at who will be setting the curriculum and teaching it. No doubt home ownership will form the cornerstone of the household wealth chapter. I can already guess the guest speakers will be “professionals” from our real estate industry. “Sponsored by …!” you know it’s coming.

#65 DaBull on 07.02.12 at 2:31 am

#32 I’m stupid on 07.01.12 at 9:30 pm

700k 25 year amortization becomes 1.4million

Using the Bank of Canada inflation calculator $700k in 1987 (25 years ago) would cost you $1,251,390.92 in today’s dollars.

#66 daystar on 07.02.12 at 3:41 am

#41 T.O. Bubble Boy on 07.01.12 at 10:30 pm

The link below was for 09′ and I assume this is part of the teachers union four year package so its current from what I can tell:

http://home.sourcecable.net/~osstfd21/parentalleave.pdf

Highlights (beginning on section 14) are:
– EI for up to 17 weeks prior to expected birth.
– can use accumulated sick leave days (full pay) during this time.
– EI for 15 weeks after 2 week waiting period.
– Teachers board pays 100% salary top up of EI for the 2 week waiting period after beginning from day of birth and for the following 6 weeks thereafter. The next 7 weeks are EI only.

The link below is dated but current, but gives the detail on what the teachers board will cover.

http://www.osstf.on.ca/adx/aspx/adxGetMedia.aspx?DocID=3952,3949,580,442,365,Documents&MediaID=686&Filename=wheretoteach-Nov-2006.pdf

I also stand to correct myself, minimum salaries start at $46 G’s and finish at a max of $97 G’s depending on the category and district for 2012. It looks like teachers are without a contract this summer and can legally strike Sept 1st:

http://www.thespec.com/news/ontario/article/749134–province-working-hard-to-get-deal-with-teachers-before-sept-1-mcguinty-says

A wife on mat leave and a potential teacher’s strike. Hmmm. I doubt that #1 is an option, especially with tighter credit poised to lower RE values.

#67 Superman on 07.02.12 at 4:12 am

June stats just released for Vancouver. Hot off the press:

Detached = Down 14.1% from high (Feb 2012)
Apartment = Down 10.3% from high (Apr 2012)
Attached = Down 4.5% from high (Mar 2012)

Notes:
– Detached prices down 4 months straight. That hasn’t happened since 1996.
– Condo prices plunged 6% in 1 month from May.
– Detached sales down 37% from last June
– Detached listings up 27% from last June

Enjoy.

#68 Superman on 07.02.12 at 4:12 am

*Correction: Above should read:

“Apartment = Down 10.3% from high (Apr 2011)”

2011 not 2012. Apartments peaked in April 2011.

#69 betamax on 07.02.12 at 5:38 am

#13 LWYM: “I retired with a DBP with our prov. govt & 2 years ago we were informed we’d only receive 1.25% for the next 5 years and then they’d look at it. Doubt it will be indexed to the CPI after. So yeah, don’t count on it.”

I’ve heard of other DBP’s being changed so that they’re no longer indexed for inflation. Seems like a sneaky way to let reduce future payouts, and I’m surprised the unions aren’t howling, but this move seems to have slid under their radar.

I know several teachers and none seem to have any savings; they spend all their money living a lifestyle they can’t afford. Their retirement plan seems to consist entirely of a home and pension. At least one stated that he deliberately had no intention of saving, as his pension would cover his retirement needs, so why not live the good life now? Well, good luck with that.

Then again, most of the other people I know aren’t saving anything either, and they have no work-funded pension whatsoever; their retirement plan seems to consist of working till they’re seventy — which requires a blind leap of faith in their ability to do, let alone their unexamined assumption that an extra five years will somehow produce sufficient savings to subsidize their intended retirement lifestyle.

I can’t help but think there are going to be a lot of currently middle-class people who are going to be paupers in retirement. I hope their memories of leased luxury vehicles and multiple trips to Europe will sustain them amidst their poverty, but I doubt it.

#70 Chiquita Banana on 07.02.12 at 6:58 am

#41 and Friends….

Painting maternity top-up as some kind of cush ride is ridiculous. The purpose of it is to provide a short term benefit that actually encourages a return to work, (if you don’t go back, you have to pay back the top-up as a lump sum). It usually only applies to a portion of the allowed maternity leave. And teachers aren’t the only ones to receive it – private companies offer it as well.

The reality is that anyone who decides to have children in this country is going to take a financial hit, even with taxpayer and employer support.

#71 Linda Pearson on 07.02.12 at 7:05 am

Re the maternity leave top-up…Can we all agree that clause would be a contract issue and might be different among school boards? Speaking for my daughter and daughter-in-law, both of whom work for the same board, neither of them got a top-up of any kind for any of their combined 4 pregnancies.

Boy, the mood on this blog today is combative and snarly.

#72 timbo on 07.02.12 at 7:08 am

http://www.bloomberg.com/news/2012-07-02/euro-area-unemployment-climbs-to-record-on-spanish-cuts-1-.html

“The jobless rate in the 17-nation euro area rose to 11.1 percent in May from 11 percent in April, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995. ”

More and more people with time on their hands ……

http://in.reuters.com/article/2012/07/02/china-economy-hsbc-pmi-idINB9E8FA02420120702

“China’s factory activity shrank in June at the fastest pace in seven months as new export orders tumbled to depths last seen in March 2009, a private sector survey showed, underlining the risk of a lurch lower for the Chinese economy.”

I can just smell expansion in the air……………..

#73 Beach Girl on 07.02.12 at 7:26 am

I have to agree with Smoking Man. But he is largely irradical (sic). Have spent more than a few moments with teachers, regarding my 2 sons. Who, in my mind are brain dead.

In my day, being a teacher , garbage man, postal worker where lower forms of work. Now these jobs are coveted.

Not getting married. Has bummer written all over that. And not mine.

#74 yorel on 07.02.12 at 7:32 am

To all you people whining about what teachers get. Why didn’t you become teachers?

#75 I'm stupid on 07.02.12 at 7:38 am

#65 DaBull on 07.02.12 at 2:31 am

I don’t understand what inflation has to do with amortization of a mortgage?

My point was regarding total price including interest. 700k plus interest over a 25 year period will surely be double the price. Inflation is a different argument entirely. Wage increases are always 1/2 the rate of inflation. The reason being is because even if wages increase at the rate of inflation taxes do not decrease. So if inflation runs at 2-3% annually and you get an equal wage increase 50% of that new income becomes taxable thereby making the real wage increase half the rate of inflation.

My numbers are not perfect I can admit that but try to run complex calculations regarding purchases on the spot when someone is trying to sell you a new car or in the middle of a bidding war.

Shopping malls are designed for impulse shopping. Thinking real wages eliminates the impulse. For example you see a nice tv on sale for $700, well to earn $700 you must make $1000 pay taxes then you have $700. But wait that $700 tv has 13% taxes so the total becomes approx. double the sticker price.

I bet you would think twice if the price was $1300.

#76 House Horny Housewife on 07.02.12 at 7:53 am

#14 & #26 Don D West

I agree with you on most of your excellent points. I do not think that this couple should have a problem affording this place with two teachers’ incomes.

If the wife “decides” to stay home to take care of the children, she needs to be made to understand that there are difficult choices to be made and that it is either the house or the job. If they keep the house, she needs to work … I would assume the job would bring in more than they would need to shovel out for daycare (for now with the two kids anyway .. with more, perhaps not).

In life we sometimes have a choice and we sometimes don’t. Once one has decided to have children, there is a new responsibility to financially support more than just themselves and they have to do what they have to do, including remaining in the work force to keep money coming into the household.

Don, I disagree with you about teachers or doctors. I have seen some doctors with good salaries do some very stupid financial things. Many (although not all) of them think they are millionaires and have the nice house, the nice cottage, the fancy boat, the flashy car, the exotic vacations etc.. not saving a cent, going into debt (bankers LOVE doctors) not realizing that a doctor’s job is extremely stressful and cannot be kept up indefinitely. Jobs like that take a toll on your health (stress, long hours, lack of sleep, poor diet .. it all adds up) and I have seen many physicians get struck down with a sudden illness at relatively young ages. Not to mention the 60 year old physician who decides to trade up to the younger sexier model (because he thinks she’s pursuing him for his handsome looks and not for his cash) and then gets stuck with a young new wife who wants babies and everything the previous one wanted when they were both 30 years old .. so the guy keeps working to the age of 100 or until he collapses, whichever comes first.

So no, Don, I think doctors beat teachers on their inability to see past today, hands down.

Jeremy and his wife need to stay put in their current home. They need to review their budget so that they can pay off their expenses AND start to save money for their future. Quite honestly this should be do-able on the salary of two teachers (unless they have some other looming debt they have not mentioned).

If they “crapped their pants” with the $419,000.00 purchase, then why on earth are they even considering buying an even bigger house ?! HELLO, bigger house, bigger diapers needed !

Renting is not an option because if they sell and then rent, you can bet your bottom dollar that they will end up buying a bigger, more expensive house in a very short period of time. Some people are simply not happy renting, for whatever reason (what Garth calls “nesting” I suppose .. I am one of those people). Of course, for some it is not a choice and they must rent. But for this couple, I think they can afford this house on their salaries, IF and only if they learn to budget and spend wisely.

This is true for any income bracket .. you can rake in a ton of money but if you cannot budget and spend wisely, you are worse off than someone working at Walmart who is in control of their finances. Income does not determine wealth .. not one teeny bit.

HHHW

#77 Steven Rowlandson on 07.02.12 at 7:54 am

We (lovely wife and myself, 35) bought in spring 08 for $419,000, put basically nothing down and crapped our pants. We now owe $325,000 and hope to sell for $500,000.

Some people really do live in a fantasy world and expect a greater fool to rescue them.
Now for the reality check.
That $419,000 home is going to get radicaly cheaper as global and domestic financial and political conditions continue to change and not for the better. Government and corperate jobs that pay 6 figure incomes are not the rule, they are an anomally and one that will become increasingly rare. The number of lottery jack pot winners are rare and government is intent on cutting down spending on science and technology spending. Add all this to continuing debt and deficit problems you are going to see a shrinkage of the the high end of the government payrolls and possibly pay roll backs across the board and the elimination of government jobs as tasks and obligations are repudiated. Spendaholic governments will not find enough greater fools to buy their junk bonds. All government bonds are junk bonds are junk bonds even if they are rated AAA and the reason for this is that there is no political will to pay down government debt. Debts are so big that any serious increase in interest rates will cause serious financial problems for debtors which will then cause serious problems for creditors. This will have a big impact on the real estate market. Right now only the rich and elite or near elite wage earners can afford real estate.
Everyone else is taking a giant gamble. Right now entry level industrial jobs in central ontario are in the minimum wage to the teens area and given the mentality of employers and the future of the economy and world politics those pay rates will be lucky to stay put and will likely fall. That means a fully employed man will be lucky to pay rent, taxes and eat. For many buying a house and starting a family will be out of the question if property prices don’t collapse to about 5 or 10 cents on the dollar and stay there. That $419,000 house could fall to $20,950 to $41,900 before the industrial worker of today could afford to buy it and live in Canada at the same time. Good news for young working men , bad news for existing home owners, banks, governments and realtors who see real estate as an investment and a no lose asset. The alternative to a massive real estate deflation is to raise minimum wages to the 50 to 70 dollar an hour range. This would send most jobs to India and China and that would really muck up the works.
As for the political hazzards lets think about WW3. This is something western governments and banks have a fervent desire to start and are in the process of trying to trigger it as we have been reading and commenting on this blog. In short the banksters and politicos are war criminals plain and simple. Once they achieve their goal most of you people will be at greater risk from nuclear and biowar attack than in the cuban missile crisis and the cold war. Your precious banks and governments will get you killed and your house destroyed. Their attacks on soveriegn independant nations and the SCO in the service of creating a zio masonic slave world and global government will trigger a nuclear and biological war. All because banks and governments in the west have a chronic and criminal inability to mind their own business and maintain the peace. When the nukes start flying and billions start dying of radiation and plague I guarrantee you all real estate values won’t mean a damned thing. Only survival will be important.

#78 T.O. Bubble Boy on 07.02.12 at 8:18 am

RE the teachers’ benefits: I agree that we should all move on… Having a bunch of banked sick days and/or mat leave top up pay doesn’t change the story. I was only trying to make the point that a teacher on mat leave may not be living off of EI only like the average job.

There are far greater scams on the public payroll – like pensions for MPs/Senators that they don’t even have to pay in to.

There are no federal political pensions that the beneficiaries do not pay in to. To compare, there are 308 MPs, and 690,000 teachers and administrators. You might wish to look at this. — Garth

#79 housedoc on 07.02.12 at 8:32 am

#74 yorel on 07.02.12 at 7:32 am

To all you people whining about what teachers get. Why didn’t you become teachers?
___________________________________________

The only thing worse than being around teachers as a kid, is having to be around them as an adult.

#80 John on 07.02.12 at 8:51 am

If you have nothing, bet it all wrote:

” if you _do nothing_, your downside is you get priced out of the market and never own a house. Am I missing any logic here?”
——–

Don’t forget that the ponzi scheme actually runs on thisvel of powerlessness, desperation and isolation. It’s not even a joke…as much as it appears so.

The aptly named “Track 6er” isn’t thinking…”I’ve got nothing, I’ll bet it all”, he’s not thinking at all. It’s an identity play that goes like this:

“I am nothing, I might as well bet it all.”

Priced out of the market? What market? Unsustainable ponzi schemes with entire population cohorts left out
( anyone being born today up to the age of 25) are called third world countries….although this term is now meaningless.

A neutered male teacher doesn’t make decisions. That’s absurd. Decision-making requires a will, and that has clearly been broken.

A man in his 20’s who is unable to compete in natural selection must drink the koolaid. He might as well
“lock in” with a female or “forever be priced out of the market”. The female then becomes “the wife” in a dismal and lifeless degeneration that governments love. Nice place for kids eh?

See a pattern? How you do anything is how you do everything.

On the bright side, today we have information. But information is not will. And you’ve got to have both in order to have judgment.

A lot of people are talking about “planning” but are not mentioning judgment. Judgement is measurable. It’s not pie-in-the-sky.

“The wife” won’t help you as you bellyflop, give away your power and fall into utter irresponsibility. And when the consequences of “not choosing” over and over again unfold, she will judge you…YOU ( rightly so) will be holding the bag.

Why not start with looking at the world ponzi and your house…and work backwards. The women aren’t going to ask you to do it. Anymore than your mother asks you to leave home ( physically and emotionally) and be a man.

#81 Ret on 07.02.12 at 8:53 am

Let’s get off the teacher thang and talk about municipal firefighter contracts and benefits. That should liven things up around here!

#82 jess on 07.02.12 at 8:54 am

why go outside ?

Winnipeg Construction Association to start looking around the world for help.

…The association has put together a task force to lobby the province to bring in skilled temporary foreign workers.”

http://www.cbc.ca/news/business/story/2012/06/29/mb-construction-boom-labour-shortage-winnipeg.html

===
Employment in construction also declined by 27,000 in May
http://www.statcan.gc.ca/daily-quotidien/120608/t120608a002-eng.htm

#83 T.O. Bubble Boy on 07.02.12 at 9:34 am

Garth – Are you saying that MPs pay into this:
http://taxpayer.com/federal/ctf-slams-23-million-payday-mp-pension-plan

Of course. Don’t believe everything you read. Except here. — Garth

#84 truth hammer on 07.02.12 at 9:46 am

It’s fact that teachers come from the bottom 10% of UNI graduates in Canada…………….as opposed to Finland that recruits from the top 10%. Teaching in Canada is the default option for the flunkies who couldn’t develop the work ethic to succeed in anything else………..this is also the base case with lawyers……low end BA’s without a hope of an actual profession. So don’t look for quality thinking from a Canadian teacher.

As I have often pointed out…..teaching grads in India graduate with far more impressive final marks in every subject except labour history. We should be excercising some sense and bring in the best teachers from India as guest workers for a fraction of what we pay the unionized help here. Our kids would get a better quality education without all the labour propaganda and the taxpayer would benefit by reducing costs.

#85 cramar on 07.02.12 at 9:47 am

“I touch the future. I teach.”
– Christa McAuliffe

#86 DDCorkum on 07.02.12 at 10:01 am

#51 a prairie dawg on 07.01.12 at 11:51 pm

Asia down sharply. More to follow overnight. Tomorrow we ‘wake up’ to the results.

——————————

What are you talking about? Hong Kong’s market is closed for a holiday, and Japan was sitting at slightly above Friday’s closing at the time you wrote your post. By the end of the day it had moved a couple points down, resulting in a total loss of -0.04% for the whole day.

Perhaps you should actually look at how Asian markets are doing before you declare that they are down “sharply”.

#87 TurnerNation on 07.02.12 at 10:19 am

#49Toronto_CA on 07.01.12 at 11:44 pm

Interesting case. Two wrongs sometimes make a right? How much are any of us willing to give up for our own justice?
The kid’s cancer is a non starter; OHIP public health care will cover all costs.

I do believe this man should begin sending cheques to each of his kids, in their own name, when they are legally able to hold their own bank accounts in-name
Contributing to their education, too. Close to a win-win. But the emotional burden…I dunno. Men often go away during times of war, never to return. Perhaps that time is now.

#88 Casey on 07.02.12 at 10:23 am

#84 Truth Hammer

“It’s fact that teachers come from the bottom 10% of UNI graduates in Canada”

Source?

#89 Toronto_CA on 07.02.12 at 10:28 am

Agree Turner Nation, he should be helping the kids out with full child support as originally ordered. I don’t believe he owes his ex wife any support at this point (she did take the house).

The ex wife sounds like a real idiot, I have zero sympathy for someone who signs a divorce agreement without reading it??? Really? That’s your defense. What a fool.

#90 timbo on 07.02.12 at 10:28 am

“http://www.sacbee.com/2012/07/02/4604686/group-blasts-barricades-around.html”

“* Output, new orders decline weakest in eight months

* Factories cut jobs for third straight month”

It gets better……..

http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

“Manufacturing contracted in June as the PMI registered 49.7 percent, a decrease of 3.8 percentage points when compared to May’s reading of 53.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.”

Flat trajectory’s cannot inflate away debt and will hold wages in check. If thinking about loading up on debt you had better think long and hard………………………….

#91 eaglebay - Parksville on 07.02.12 at 10:30 am

#77 Steven Rowlandson on 07.02.12 at 7:54 am

You wouldn’t be a doomer by any chance?
Stop the nonsense or you’ll give yourself a heart attack.
Boy oh boy, some people.

#92 Aussie Roy on 07.02.12 at 10:37 am

Aussie Headlines

Aussie TV porn “The Block” sets auctions reserves just above the original cost of purchase.

No doubt the producers of the TV show did not want a repeat of last years failed auctions, so instead of reserve prices reflecting the cost of purchase plus renovation, they simply used the purchase price.

Reserve prices were set at $600k-$700k below cost price (excluding Stamp Duty). The winning property lost $50k + stamp duty + costs.

The four terraces were bought by the production company for $3.8 million last year, reflecting a $950,000 cost before stamp duty.

The report by BMT Tax Depreciation on 405 Dorcas gave the total cost of expenditure at $721,803, totalling $1.67 million after expenditure, excluding stamp duty.

From behind the terrace’s green door, Karl Gillon from Buxton Albert Park, which sold Channel 9 the four terraces for $3.8 million in 2010 – noted when bidding neared $1.6 million that “we are still at below cost.”

http://bubblepedia.net.au/forums/viewtopic.php?f=4&t=634

House price index up 1% for the month.

http://www.propertyobserver.com.au/residential/recovering-house-prices-across-most-australian-capitals-buck-the-typically-weak-june-trend-christopher-joye/2012070255373

House price index questioned.

“I do not believe for a moment that house prices are now rising in Sydney or Melbourne as RP Data/Rismark have claimed today. Their daily hedonic index, for which these claims are based on, is an unreliable index as it is based on a miniscule proportion of actual sales that happen on a daily basis. Effectively on a day to day basis, the index misses out on over 95% of sales”.

http://www.macrobusiness.com.au/2012/07/sqm-challenges-inaccurate-rp-data-daily-index/

Yesterday marked the halfway point for the 2012 property market and considering conditions on the ground it’s become clear that forecasts of an impending recovery have amounted to little more than wishful thinking.

http://theage.domain.com.au/no-signs-yet-of-recovery-20120630-21a01.html

Australia’s chronically weak house prices: Is the crash upon us or a long-term flat trend?: Shane Oliver

http://www.propertyobserver.com.au/residential/australia-s-chronically-weak-house-prices-is-the-crash-upon-us-or-a-long-term-flat-trend-shane-oliver/2012062855322

#93 Casey on 07.02.12 at 10:41 am

#84 Truth Hammer

“teaching grads in India graduate with far more impressive final marks in every subject except labour history. We should be excercising some sense and bring in the best teachers from India as guest workers..”

Here’s an interesting article revealing the true state of India’s education system. Perhaps the “best teachers in India” should stay there to help improve India’s failing education system…

http://timesofindia.indiatimes.com/home/education/news/Indian-students-rank-2nd-last-in-global-test/articleshow/11492508.cms

#94 CrowdedElevatorfartz on 07.02.12 at 10:55 am

@ #85 cramar
Puh-leez.
So Christa McAuliffe is ‘martyred’ in a space shuttle explosion because of lowest bid, low budget parts and we’re supposed to be inspired by a 5 second quote some NASA pr hack probably handed to her just before a press conference?

Read #63 Smoking Man. He makes more sense than that drivel.

#95 Regan on 07.02.12 at 10:55 am

Wow, so much irrational teacher bashing! So uninformed, and also irrelevant as usual.
I thought there were a several salient points missing in the letter – like their net income, the rental cost of properties comparable to the one they want to buy, the monthly carrying cost of their house, and the state of their local RE market.
Also, I’m impressed with this couple. You guys bought a home when you were 31, were lucky enough to grab it in 2008 and have seen it appreciate hugely. If you put nothing down and paid closing costs etc., then you’ve also managed to pay off $100K or so in the first 4 years of your mortgage, while having a baby. I don’t know why the clueless commenters think you don’t save, you are obviously amazing savers who have been hammering that mortgage away.
I like Garth’s advice to diversify, you don’t sound like you need income, but some long term equity growth that you probably won’t get from your house. However, I’m not completely certain about the advice to stay put. I can see the point that renting may just expose you to the urge to move again, since you’ve said your place is too small. I think you should consider some long-term planning. Are you having more kids? Is your place really too small, or it is ‘I need my man cave’ too small? Is your current mortgage easy to carry or killing you? Think about where you want to be in 5, 10, 20 and 35 years (that covers growing kids, kid departure and retirement) and then make a long term housing plan. If you really, in the long run, want to move to a bigger place, then not selling now doesn’t avoid those costs, it just postpones them. You should consider more options. Your current home is a vehicle to get you to that future place, that’s all. Explore the cost of renting versus buying your target home, a $700K guess is not meaningful and you don’t know the rental cost. Would the home you want cost more, or just be in a different neighbourhood? Would the proceeds from your current sale make a difference in your budget, lifestyle, savings behaviour? If you expect RE prices to fall, will higher priced homes fall by the same proportion? If so, then the gap in price closes, a big advantage for you and good reason to wait and take a small loss on your current place. It’s really important to compare total item costs – for example, if you sell and buy again you have the costs of selling the current place AND the future costs of selling the next one. And be sure to compare apples to apples – so don’t compare living in a cheap rental in a great neighbourhood with buying a 5 star home in the distant burbs.
Good luck!

#96 TurnerNation on 07.02.12 at 10:55 am

#80John on 07.02.12 at 8:51 am

LOL buddy you surely are not pulling any punches.

I have noticed one thing in my age group (30-40). Recall a time, maybe 40-50 years ago – when men were men – looking at old pictues you’ll notice men of any social class wearing jackets and hats. Presumably this hat was tipped in recognition of passing women. Making an effort to be civil.

Today: kids raised on crass hip hop videos, collecting their ‘bitchez and hos’. Nice.

Men in my age group essentialy are overgrown self-indulgent, passive kids; I cannot count the number of the same, who while away their hours, drinking, watching sports, and playing video games. Their standard uniform is one of flip flops, shorts, ironic/slacker slogan t-shirt (from this weblog’s etymologic journey: the anthropomorphic
Sunglass-on-head-durango-driving-blackberry-on-hip character).

In short: followers. Track6ers? The path of least resistance! Get the peice of paper, be one of the boys at work, put in minmums, follow others into housing and marriage traps. Works well, being a cog in the system.

Until said system skips a beat – layoff, market crash, housing bubble, divorce, etc. Now what. Your social system – one of following – no longer works. Time to Lead. But where is your role model?

#97 Dave on 07.02.12 at 11:05 am

Hey Garth,

You’ve mentioned that you can open up the wrong type of TSFA (depending on what the bank pushes), can you provide some recommendations on where / what type of TFSA to open up? I do all of my banking with TD at the moment and I have a good chunk I’d like to stick into a TFSA (for ETFs).

#98 CrowdedElevatorfartz on 07.02.12 at 11:07 am

and in case anyone cares……

Its still raining in Vancouver today July 2nd.
Expected high temp today 16 deg C.

One of the wettest, coldest months of June on record!
Yup, Best Place on Erf alright.

Where is that little Richmond rodent BPOE anyway? Havent heard from him in a while.
Must be “manning” the dikes.
Since “sales” are down too!
:)

#99 Harry Palms on 07.02.12 at 11:08 am

#52 daystar, Re Teachers’ max salaries

$93K per year for a professional with one year of post-grad, who is good at what they do is maybe not unreasonable.

One key point remember though is that teachers typically only work 3/4 of a year.

If you prorate the $93K to a full year’s work (12 months, less four weeks vacation), we’re actually paying the brainwashers the equivalent of about $109K………..plus a fairly nice DB pension plan featuring maybe 3 or more taxpayer dollars contributed for every one contributed by the plan member.

Bottom line is that teachers are compensated very well for their training, and “market value” IMHO.

#100 Jamaican_Gal on 07.02.12 at 11:10 am

“I think they should thank whomever (is that correct, should ask a english teacher) pointed them to this blog.

It most likely will change there lives for the better.”

Haha, that “who/whomever” thing gets me too. I can, however, tell you with certainty that it’s “their” lives.

#101 a prairie dawg on 07.02.12 at 11:17 am

#86 DDCorkum

What are you talking about?

– — –

Perhaps you should understand a topic before replying.

I’m talking about the global PMI numbers being released, indicating how global growth is slowing.

The Asian numbers came up first later last night. Now here is the whole list.

http://www.businessinsider.com/june-pmi-global-roundup-2012-7

#102 Harry Palms on 07.02.12 at 11:20 am

Garth’s response to #78:

I love the sunshine list.

There’s a $164K secondary school teacher hidden there!

Guessing night school, summer school, and/or some kind of massive benefits cash-out played into this.

Still, that salary will carry a Leaside mortgage….not bad for a teacher.

#103 PoorgEoisie on 07.02.12 at 11:40 am

Anybody who has something that I don’t have doesn’t deserve it. Everybody that does a job that I don’t should get paid less. Everyone else is greedy but me and as such I should have all their stuff.

#104 cops vs. teachers on 07.02.12 at 11:49 am

why doesn’t anyone hate on police like they do on teachers?

in toronto alone, cops cost the city over A BILLION dollars EVERY year!!!

it is a fact that cops are by far the #1 expense of the city of toronto.

that’s why there are so many of them (armed) standing around construction sites.

people hate on teachers because they are easy targets.

they don’t have guns.

appeasement happens with cops (and thusly cop salaries) because of fear.

rob ford wanted cops to cut their budget significantly…

cops said no…”we want an increase”

they got it.

surprise surprise.

#105 teachers don't get paid for summer on 07.02.12 at 11:54 am

#99 Harry Palms

basically, you are an idiot.

even though teachers may work 3/4 of the year…they do not get paid for summer “vacation”.

they get paid for the days they work…and this is spread out over the entire year.

stop spreading lies, please.

#106 bill on 07.02.12 at 11:56 am

”The only thing worse than being around teachers as a kid, is having to be around them as an adult.”

I agree. it was a two way street though. the various teachers I had were not thrilled to get me as a student,I am sure.

#107 CrowdedElevatorfartz on 07.02.12 at 12:00 pm

It isnt just Ontario teachers that are overpaid, generously pensioned, self promoting, semi professional windbags.

Follow the exploits of BC’s teachers….. 30 years of antagonistic contract negotiations with no end in site…

But when ever they are questioned about their 15% salary demands ( in a 0% wage incease world)they respond with the fail safe non answer, ” Its about the KIDS !”

ri-i-i-i-i-ght……..

Its ALL about the childrens future. I guess thats why for the past school year the teachers “worked to rule” . No extra curricular duties allowed, No sports, no drama, no grad preparations……
Yeah, its all about the kids! Salary and benefits have nothing to do with it.

I’m just curious, when 100% ( instead of the 80% currently allocated) of the taxpayers money has been allocated to the teachers, the nurses and all the other generously paid govt workers….Who will they bitch to then for their next “deserved” raise?

Take a look at Europe folks.
Greece, Spain, Italy, Portugal, Ireland,……The shite is hitting the fan due to spineless govts never saying ENOUGH to the unsustainable wages,pensions and benefits paid to the lucky that have jobs in govt.

And when I see the link that Garth provided (in #78) to the Ontario Teachers salaries…. I realize ….. we are so screwed.

#108 NeW PaRaDIGM on 07.02.12 at 12:11 pm

China’s Housing Boom Has Ended

In the July 1st Epoch Times english edition Jian Tianlun, Ph.D notes the following:

“In sum, the correction in China’s housing market will continue, and the soaring prices in Beijing, Shanghai, and other large cities will drop significantly. It is only a matter of time. A hard landing will speed up this process.”

How will this effect the movers and shakers in Asia that also have interests (holdings) in Canada?

The metrics are unclear. However, It appears difficult to view this scenario in a positive light for those owning homes in Vancouver, Toronto, etc.

#109 Grim Reaper/Crypt speculator on 07.02.12 at 12:18 pm

Smoking Man….

BTW: That Lightning was no accident

US Army to smite enemies with Tesla-like lightning bolts?

http://www.thetruthseeker.co.uk/?p=51546

In the era of remote-controlled drones, invisible planes and microwave guns, no military innovation should come as a surprise. But among the array of new weapons none are more satisfying than a cannon that allows you to unleash bolts of lightning.

The Laser-Induced Plasma Channel (LIPC) cannon is currently being tested at Picatinny Arsenal, a key US Army research complex in New Jersey.

“If a laser puts out a pulse with modest energy, but the time is incredibly tiny, the power can be huge,” says Fischer. “During the duration of the laser pulse, it can be putting out more power than a large city needs, but the pulse only lasts for two-trillionths of a second.”

But the laser isn’t just the source of energy, it is the aiming mechanism as well. Lightning travels down the path of least resistance, and the laser forms just such a channel. This means that the operator can change aim simply by retargeting the laser beam.
===================================

Next time quit bending over for pennies and empties, dammit.

#110 CrowdedElevatorfartz on 07.02.12 at 12:25 pm

Speaking of taxes….. :)
An interesting footnote to the Greek financial debacle
Greeks are now paying taxes !
Unlike in previous years where the Greek govt. of the day( of which there have been many in the past 30 years) would order the tax collector to “ease off” collecting taxes in the 6 months leading up to federal elections. OR the tax collector was open to bribery….

And now the taxman in Greece is actually doing their appointed job. Collecting taxes.

What have the citizens of Greece decided to do?

Barter.

No exchange of money. Work exchange, IOU’s, etc. are become more and more predominant.

German voters are fed up being the “go to guy” in this ridiculous merry-go-round. And since Angela Merkel is hanging on to her majority govt by her fingernails she isnt in a hurry to piss off voters.

This summer/fall is gonna get interesting.

Totally off subject… I wonder what Washington DC is gonna smell like after another 3 days without power in 30 + heat……

#111 Toronto_CA on 07.02.12 at 12:35 pm

Like the paradox of thrift, I’m split on this issue because it is better to live in a society where most people have good salaries and benefits even if they don’t contribute as much as others. Even if it is not totally fair.

But as a person who currently at least uses very little social services (healthy, child free for life) yet pays massive income tax (highest bracket) it irks me to see people in a union threaten to strike when their bankrupt employer (like Ontario) wants them to halt raises for a while until things look better—which is what almost every private company did in 2008/9 by the way and what is likely down the pipeline.

To me, if you don’t like your job or wages or benefist, you go find a better job that has what you want. You don’t hold the public hostage when they have no alternative for services and your fees are extracted from their pay without choice.

Grr. Let’s all discuss housing instead of public sector union workers! It gets people too riled up and it’s a beautiful day in most of Canada.

#112 Westcoaster on 07.02.12 at 12:37 pm

#76 – House Horny Housewife
Full points for power of observation – bullseye.
As a member of the profession I have seen what you suggest played out many times. A couple of examples. When I finished my residency we had a party at our place (we were renting on 10 acres). I can recall at least three peers who showed up with new cars (this is the day after our program finished!) including one with a Mercedes 350SL convertible.
I have also seen (many times) in the past in the doctor’s lounge the following scenario (with variations on the theme):
Dr. J. – “so, my bro-in-law is working for a small mining co. in Ft. St. Nowhere and says the company is going to explode in their gold findings and the stock is going to rocket”
Dr. K (and L, M, X are listening in) – “really? What co. is he working for?”
etc. etc. – the scene ends with Drs. K,L,M and X writing down “hot contacts” and tips with their chequebooks out on the table with large numbers written out beside their signature.
You know how this ends. I have seen the fall-out many times, resulting in physicians changing their retirement plans (often resulting in exceeding their “best before” date).
Thankfully, doctors no longer gather in the doctor’s lounge (so 1980’s) – I imagine this has resulted in many 100’s of thousands of $$ not being poured into penny stock coffers.
In other words, doctors are as susceptible to greed as any other group. In fact, my experience has been that (sadly) the wealthier people are, the greedier they become. For doctors (cf. many other professions/jobs) the numbers are just bigger.

#113 daystar on 07.02.12 at 12:40 pm

Interesting link, Garth. The numbers you provided with teachers salaries are post secondary I take it? Professors need a masters degree and will make more than regular teachers.

For some reason I didn’t post the links I looked into last night. I stumbled on two, can only find one but this one gives the breakdown of category and district salaries:

http://www.osstf.on.ca/adx/aspx/adxGetMedia.aspx?DocID=3952,3949,580,442,365,Documents&MediaID=686&Filename=wheretoteach-Nov-2006.pdf

Ontario teachers had their contracts negotiated in the spring of 08′, leaving them 3% salary increases for 09′ to 2012. They won’t be so lucky this time ’round. McGuinty needs to make an honest attempt to balance the fiscal budget. Public sector salary freezes for 2 to 3 years is just the start. Programs need to be cut, taxes need to be raised and he has to think about opening up the north for development. Programs like $1500 home improvement grants shouldn’t have been considered never mind attempted, there are other priorities here.

#114 daystar on 07.02.12 at 1:06 pm

#107 CrowdedElevatorfartz on 07.02.12 at 12:00 pm

I knew someone would come out with a comment like yours. The link Garth provided is showing salaries of teachers, principals and superintendants at the top of their game. The numbers you see are the highest paid educators in the system. Its not reflective of teachers salaries in general. Haha, he’s trying to stir things up! (that scoundrel) You should acquaint yourself with the teachers salary grid:

http://www.osstf.on.ca/adx/aspx/adxGetMedia.aspx?DocID=3952,3949,580,442,365,Documents&MediaID=686&Filename=wheretoteach-Nov-2006.pdf

…to acquaint yourself with the collective bargaining agreements that are coming up.

http://www.theglobeandmail.com/news/politics/ontario-teachers-salary-grid-the-true-test-of-mcguintys-mettle/article552857/

then links like this one:

http://www.thestar.com/news/ontario/article/1138862–teachers-unions-decry-ontario-s-opening-offer-no-raises-no-retirement-payouts

…will have more meaning and they should have more meaning to Jeremy as well. His income and that of his wife could be frozen for the next 3 years. Personally, I think thats what the government needs to do and if teachers strike and Jeremy sits, legislate them back to work. Jeremy should also consider tax hikes come income tax time. All of Ontario should, but thats just me.

#115 Realtors , Mortgage Brokers and Bankers in an ALL OUT PANIC! on 07.02.12 at 1:24 pm

The new rules haven’t kicked in yet and bankers are all ready crying that the new rules will CRASH Canada’s housing ponzi. Yes Canada has the BIGGEST HOUSING PONZI in the world. In Toronto CONDO’s are exploding on the market as flippers and gamblers are trying to get out before the ponzi comes crashing to the ground.

http://www.theglobeandmail.com/report-on-business/banks-warn-ottawa-over-lending-rules/article4384451/

Bankers , realtors and mortgage brokers hate the tiny taste of the free markets. Canada is in a monster of a housing bubble that needs to crash over 50% to get back to the NORMAL ratio of 3-3.5 times income.

#116 daystar on 07.02.12 at 1:24 pm

#110 CrowdedElevatorfartz on 07.02.12 at 12:25 pm

Canada ranks 6th in the world according to OCED:

https://docs.google.com/spreadsheet/ccc?key=0AonYZs4MzlZbdEMzTjN5cHY1MmlJOHI3cmZCamRQWEE&hl=en#gid=1

We didn’t get there by accident. Perhaps its something we should learn to more fully appreciate instead of take for granted?

http://www.thestar.com/opinion/editorialopinion/article/928064–canada-s-culture-of-excellence-in-education

#117 $$$BPOE#1 on 07.02.12 at 2:01 pm

Crane Envy. The latest trend in BPOE now spreading from the West side to West Van. Looking Great folks. Get some land get a crane and start building. 25 years from now this will be THEE standard way to build your home in BPOE. Check out Point Grey Road for all the latest Cranes. Coming to your neighbourhood in BPOE soon. Granite and stainless is out Cranes are in.

#118 TREM News | Get ready for a “rocky” Toronto real estate market? on 07.02.12 at 2:12 pm

[…] out that with the government’s recent crackdown on mortgage eligibility criteria, “we’re just days away from returning to where we were in 2007.” In the meantime, Canadians have accumulated more debt than ever and real estate markets in […]

#119 Grim Reaper/Crypt speculator on 07.02.12 at 2:13 pm

Geez..some days I just wanna kill myself !!!!

I don’t get a pension, mostly benefits. Sick of MDs blaming me….all they are are overrated Big Pharma salesmen

Public Pensions….are a privelege not a right. Stupid politicians (all going to hell BTW….in a windowless condos) simply want labour peace….felt Golden Goose never end.

Oops….SHTF….sorry Public Sector..you bet wrong….review Stockton California….

Cops? lots of nasty evidence if screw with them..you gave them the tools and toys to do so.

#120 CrowdedElevatorfartz on 07.02.12 at 2:16 pm

@ daystar.

All the stats in the world that you “link” me to still wont change the fact that there isnt any more money in the taxpayers “kitty”.

You avoid the arguement. The central point is. Taxpayers must subsidize the generous public sector pension plans because they are Defined Benefit pensions.

We are reaching a “tipping point” where govts will take too much in taxes and the average person will either hide their earnings or pay cash to a contractor for services rendered….

Know anyone thats ever done that?

WE ALL AS CANADIANS PAY FAR TOO MUCH IN TAXES !

And while I again must belabour the point.

Teachers, nurses, police, and ALL other government workers, be they municipal, provincial or federal their unsustainable salaries, benefits and pensions that must be “topped up” by private sector, non union taxpaying people like me.

We are fed up.

When I hear of another tax increase, user fee, rate hike, etc,etc,etc foisted upon me by another spineless politican that is unable to say, ” There is no more money ! Period!” I want to scream.

When I speak to friends in govt here in Vancouver about their future pension plan possibly being “clawed back” through reduced benefits, reduced payments, etc. The absolute outrage is quite something to behold.

And when I ask them,
“Why should I subsidize your govt pension when you dont subsidize mine?”

Zero reply, nada.

Like it or not Daystar, a fiscal pension “rekoning” for govt workers of all stripes is coming…….and it isnt going to be pretty.

#121 down and out on 07.02.12 at 2:18 pm

Smoking man sober up these kids think this couples mortgage is going to cost 1.2 million over 25 years ,they do not understand interest rates reset on the mortgage every 5 years there fore no one can say how much they will pay .Talk about your tax slaves ,Garth can not educate them alone.

#122 Gunboat Denier on 07.02.12 at 3:00 pm

105 Teachers – You’ve failed to grasp Harry’s straightforword point, so I guess that makes you the idiot.

#123 Victor on 07.02.12 at 3:19 pm

http://www.theglobeandmail.com/report-on-business/banks-warn-ottawa-over-lending-rules/article4384451/

Mr. Flaherty says the government is aware of the potential economic problems that could result from trying to slow the housing market, but said Ottawa is more concerned about avoiding a crash in housing prices.

“We are prepared to take that risk, quite frankly, because of the greater risk of the development over time of a housing bubble,” Mr. Flaherty said on a conference call with reporters Friday. “I realize it may have some dampening effect on the economy and I realize it may have some dampening effect in the residential real estate market,” he said.

Among the government’s main concerns is the rise in average household debt in Canada to 152 per cent of income. Though it’s not known what impact such record levels of household debt will ultimately have in Canada, some economists note that the housing markets in the United States and Great Britain ran into problems when figures reached similar heights.

“You know money is cheap these days. Mortgage rates are low, the banks are lending money at low rates and some people can’t resist that temptation,” Mr. Flaherty said. “So we are making it more difficult to obtain insured mortgages at low monthly payments by going to the 25-year amortization in particular.”

#124 Ret on 07.02.12 at 3:20 pm

If the the Ontario civil service, municipal, university, OPP, hospital workers, doctors and politicians take 3 years of 0% salary increases, then teachers, I am sure, would do the same. Maybe Dalton and his MPP’s could show some leadership in the salary negotiations and walk the talk.

The finances in Ontario are not great even if teachers get 0% for the next 3 years, but who really cares?

At last count, there were 11 people including moi in the province that would take $100 less a year in wages, benefits or welfare payments to keep the province afloat.

It is really not hard to see how the government and the people of Greece got into a life altering financial crisis. The Greek people got exactly the leadership that they voted for and so are Ontarians.

#125 cramar on 07.02.12 at 3:22 pm

#98 CrowdedElevatorfartz on 07.02.12 at 11:07 am
and in case anyone cares……

Its still raining in Vancouver today July 2nd.
Expected high temp today 16 deg C.

One of the wettest, coldest months of June on record!
Yup, Best Place on Erf alright.

Where is that little Richmond rodent BPOE anyway? Havent heard from him in a while.
Must be “manning” the dikes.
Since “sales” are down too!
:)

—————————–

Low to mid 30s and sunny yet again in S. Ont.! Projected temps the same all week. Gotta luv summer! Perhaps we can compromise and meet in the middle. I can live with 24c and twice as much rain.

#126 Blacksheep on 07.02.12 at 3:29 pm

teachers don’t get paid for summer #105,

Dear god, I hope YOU are not a teacher.

take care
Blacksheep

#127 bubble head on 07.02.12 at 4:11 pm

i have a teacher in the family

teachers start off around 58k-60k and after 11 years of work and about three additional course ($600 each) they will hit 94k. (the increment is about 3K per year).

Teacher work 192 days in a school year.

Their take home pay at 94k a year is $4100 per month

Their pension if they worked about 27 years is $3,200 per month.

Sub teacher make $220 a day before taxes (average substitute teacher makes $42000 per year before taxes.

On a side note, it is very difficult to get a teaching job (permanent contract) it takes the average graduate 4-6 years to land this contract position.

#128 CrowdedElevatorfartz on 07.02.12 at 4:14 pm

@#125 cramar
You’re on ! I’ll send twice the rain for half your sunny weather and temps….. :)

#129 CrowdedElevatorfartz on 07.02.12 at 4:25 pm

@#124 Ret
Total agreement.
And it isnt just Greece and Ontario voters getting what they voted for……
Vancouver City “Clowncil’ expenditures are a lesson in fiscal buffoonery.
This followed by a Provincial “premier” that was appointed by her own party , not elected, over a year ago because the previous premier resigned under a cloud of controversy. ( Google BC Rail sale)
We voters have another 11 months before we can punt her out of office. That will make 2 years as an unelected premier of a Province. So much for democracy.

And who will become the newly elected Premier? Why an NDP stooge of course! The NDP, with its nose so far up the govt employees Unions’ butts they could perform proctological examinations without a flashlight.

Yup, we get what we deserve.

PS. Its still raining…………..

#130 Toronto_CA on 07.02.12 at 4:29 pm

Omg just read #105 too – are you for real or a troll to make us think teachers are that stupid?

Please be a troll and not a real teacher. Please.

#131 betamax on 07.02.12 at 4:29 pm

#84 TH: “It’s fact that teachers come from the bottom 10% of UNI graduates in Canada”

Not true, as the large number of applicants for teacher training programs allows those programs to require a reasonable bachelor GPA. However, such wasn’t always the case, so there was a lot of dead wood allowed into those programs in decades previous.

My ex was a teacher for a few years, and when she told colleagues that she was quitting to do a grad degree, many were dumfounded and a few old-timers told her that they hated university and coudn’t understand why anyone would go back for more. Yes, that’s literally what they said.

#132 CrowdedElevatorfartz on 07.02.12 at 4:36 pm

@#129 Timing
Jeez! The weather man is saying its gonna be sunny!!!!!
….and they’re NEVER wrong ! :)-

Thats ok, first 3 consecutive days of sun since when? October?

#133 John on 07.02.12 at 4:48 pm

Down and out wrote:

“Smoking man sober up these kids think this couples mortgage is going to cost 1.2 million over 25 years ,they do not understand interest rates reset on the mortgage every 5 years there fore no one can say how much they will pay .Talk about your tax slaves ,Garth can not educate them alone.”
———

How about requesting a dot-connect here? Like bringing forward any argument of any kind that says housing prices won’t drop at least 60-80% as the derivatives ponzi unravels.

Why is this point so unclear? I don’t get it. If you’re talking about “re-setting of interest rates every five years”, it means you’re in denial about the effects of a Global-Canadian real estate market.

The tax farm slaves aren’t working for their “government”, or do you think that’s so? Where would you get that idea from?

On one end you have the neutered male walking into Track 6er debtors prison 1835 style, on the other end you have people “in the know” talking about “interest rates”.

Huh? I’m really scratching my head on the logic. Do you know about what drives the Canadian economy and who’s in charge? It is way beyond “debate”. Evidently so.

#134 Grim Reaper/Crypt speculator on 07.02.12 at 4:50 pm

The Public School system has always been an indoctrination venue…the create good little socialists and new age morons.

I can’t see how any decent person could stay in the system without selling their souls ..which of course includes a nice paycheque and pension.

BTW…didn’t someone post the the Ontario Teachers Pension fund is $ 9 Billion in the red …so far? Who pays for that?

#135 TRT on 07.02.12 at 5:04 pm

#88 Casey:

At UBC in Vancouver a few years ago, there were more seats for the program than there were actual applicants!
———————————————————-

#84 Truth Hammer

“It’s fact that teachers come from the bottom 10% of UNI graduates in Canada”

Source?

#136 Van grrl on 07.02.12 at 5:29 pm

#71 Linda:
“Boy, the mood on this blog today is combative and snarly.”

Today??? haha…

#137 CrowdedElevatorfartz on 07.02.12 at 5:33 pm

@#117 BPOE
Didnt you post that “crane envy” song and dance a few weeks back?

Are you suffering memory loss from lack of food and sleep? Being mortgaged to the max in BPOE must really SUCK!

#138 DaBull on 07.02.12 at 5:38 pm

#75 I’m stupid on 07.02.12 at 7:38 am

I don’t understand what inflation has to do with amortization of a mortgage?
—————————————————————-
Inflation makes things more expensive the longer you wait. So if you wait 25 years to buy a 700k house, you will be buying a currently priced 700k house in 25 years for 1.25 million. The same as taking a 700K mortgage at %5.25 for 25 years.

PS: The principal of the debt is locked in at time you borrow, the only thing that may change is the interest rate you pay.

#139 daystar on 07.02.12 at 5:59 pm

#120 CrowdedElevatorfartz on 07.02.12 at 2:16 pm @ daystar.

All the stats in the world that you “link” me to still wont change the fact that there isnt any more money in the taxpayers “kitty”.

True.

You avoid the arguement. The central point is. Taxpayers must subsidize the generous public sector pension plans because they are Defined Benefit pensions. – CE

I don’t believe I did avoid it. Freeze for 3 years, cut spending with other programs, start looking at some layoffs through new contracts if needed and raise taxes.

We are reaching a “tipping point” where govts will take too much in taxes and the average person will either hide their earnings or pay cash to a contractor for services rendered…. – CE

I assume taxes have gone down in Ontario since 96′. Here’s what Ontario pays now:

http://www.settlement.org/sys/faqs_detail.asp?faq_id=4000128

… and this is what the rest of the provinces pay:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

In case readers think Quebec is getting a free ride with their high debtload and socialist program spending that pays for tuitions and such:

http://www.revenuquebec.ca/en/citoyen/impots/rens_comp/taux.aspx

WE ALL AS CANADIANS PAY FAR TOO MUCH IN TAXES ! – CE

We also like to borrow too much money and I truly believe we have to ask what we are getting for these taxes just like you. Some of what we get is the reason why we like Canada so much. Some of it is underappreciated and some of it is mis-spent, granted. (oh, the humanity).

And while I again must belabour the point. – CE

At least you do so politely.

Teachers, nurses, police, and ALL other government workers, be they municipal, provincial or federal their unsustainable salaries, benefits and pensions that must be “topped up” by private sector, non union taxpaying people like me. – CE

If you really think the money is so much better being a teacher, nurse, cop or any other civil servant, what’s stopping you from becoming one? Do nurses make too much? Check the grid and ask yourself if you think its too much to care for the sick and elderly.

http://www.ona.org/faqs.html#f18

Same with cops (but I believe some of these jobs are private):

http://www.indeed.com/salary/q-Police-Officer-l-Ontario,-OH-44862.html

RCMP pay grids are much steeper:

http://www.rcmp-grc.gc.ca/recruiting-recrutement/rm-mr/salary-avantages-eng.htm

We should keep in mind that there are less than 20,000 RCMP in Canada.

http://en.wikipedia.org/wiki/RCMP_recruitment

We are fed up. – CE

I believe that you are.

When I hear of another tax increase, user fee, rate hike, etc, etc, etc foisted upon me by another spineless politican that is unable to say, ” There is no more money ! Period!” I want to scream. – CE

I get your angst, I truly do. There are, however, 3 things to consider when you look at public salaries ok?

Cost of education. A bachelors degree to teach is 4 years minimum. A masters is 5 and a doctorate is 6 or more. Please note that 40% of all students that walk through college doors drop out within the first year. After two years of college they move on to university and 30% of these students drop out. Some comments talk about “dumb teachers” but the system for the most part weeds out the ones that aren’t up to it. Once they graduate, there is a chance that too many will have worked through the system as is now the case in Alta. In Alta, teachers are being laid off in favor of larger class loads and more is expected with contracts coming up for renewal. Its not a lock that you face employment straight out of the gate. Consider the cost just to get there.

Secondly, consider the stress and responsibilities that go with it. Nurses and cops have high stress occupations. Not all patients and criminals are warm and fuzzy. Add the hours that you are expected to put in that you don’t get paid for. All the extracurricular activities and homework marking grades and essays, you think they are on the dole for that? Right…

Factor in the case precisely like Jeremy’s where he’s doing what F & H and the system and media and MIL/FIL and Jones and bank and realtor and whoever else is coaxing him all along the way taking as slice as he signs up for that fat mortgage wise boomers and seniors are cashing in on with the sale and good thing because thats pretty much all they’ve got.

Lets have some perspective, are we going to ask civil servants to roll back salaries 10% at a time when the private sector isn’t? Is that stable for financials or at all wise? I don’t think so. Salary freeze is the best choice here and yes, tax increases on top meaning future teachers net incomes under that equation go negative surprising guys like Jeremy who somehow thought his net income would contiue to rise when he signed off on debt and kids.

Is that fair enough for you? Oh wait, you don’t want to pay more in taxes, it has to be on the backs of the public sector, y’know that 8.5% of incomes in Canada, somehow thats fair. But is it?

Thirdly, unions give this nation a benchmark in terms of salaries and service. Without that benchmark, the private sector compares only unto itself and that can be a bad thing when we see corporate boards and shareholders in this nation making choices not on fairness or equality but on maximizing profit. Y’know… for the shareholder. Not for the student or the citizen or anyone else. We might not like unions, we might not like the way they organize for their interests but we have to consider what it would be like without them.

Read the comments and see for yourself. We’ve got folks who say teachers are dumb with money and yet we have other folks who believe they don’t need someone to negotiate their salaries. We’ve got comments that believe we should get untrained foreign workers in to do the job teachers are doing here now with 4+ years of training and somehow the expectation is that the services will be the same. Can you imagine the level of service provided if teaching was run by corporations with CEO’s or leaders of governments who had such low standards with the authority to lower them to such a level especially with “for profit” in mind?

And lets talk about paygrade. Again, it comes back to the students that walk through the doors of college and university. There’s a competition for that talent. We want intelligent, socially developed individuals doing these jobs readers and lets be more realistic, half the labour out there in trades pays as much if not more than first year teachers. I’m guessing but thats what I think it is.

Let me expand on this (as always, I’m opinionated). Some of us have a huge problem with equality. In nihilistic fashion, some write off the teachings of Jesus and Buddha’s way as “irrelevant”, regardless of what they had to say about how to keep the mind healthy. As some flocks gather to “educate” and “listen”, the tendacy to be “superior” to those who “aren’t” because they “now know something others don’t” is no less than before and as such, the mind misses the message of equality, its thats distracting.

The same can be said for business mind and the status and prestige that money and “owing things” can buy. There too, we see that some adopt full force the belief that we are worthless simply because we are “worth less” or superior because we possess more than the have nots because its at the root of what we believe.

Our beliefs shape us, shape our values, shape our egos, shape our identities, shape our self esteem, most importantly… shape our health. Our parents shape us the most, then the world… and then we shape ourselves (fully aware if we’re smart), its mostly environmental and all along the way, the health of our self esteem is formed. It’s to high, its too low, the ego is too large, too small, do we want systems to be designed right down to paygrades by folks who have to deflate others to inflate themselves? Do we want systems to be designed, managed and delivered by folks who can’t put themselves in the shoes of others, to see it from the perspective of others besides their own? Do we want greeders, egocentrics and control freaks running the show?

The numbers floating around narcissistic behaviors alone (to various degrees) are 14% of the population with narcissistic disorders around 4% or more. This is coming out of professors at Berkelely, arguably within the top five universities of the world, ranked #2 with this link and #1 with the field of phycology worldwide.

http://en.wikipedia.org/wiki/Academic_Ranking_of_World_Universities

Who do you trust? The nihilist who dismisses all phycology as “irrelevant” or the the one who diagnoses the nihilist?

A quick survey here gets you more than one in 10 comments running down occupations or people here on this site alone and its not isolated, likely more frequent because comments are anonymous so the freedom to express is here and we get to see these issues come out. Low self esteem, inferiority, it wants to be higher, more superior but look how it manifests in its struggle to balance that more often than not does not come.

How widespread can mental disorders get in the general public? Ask the instigators and their supporters of WWII. Some of it originates from abuse and neglect but… the rest is learned. Who are our teachers and how healthy are they?

Our systems of education are the first and best defence against these disorders and disfunctionalities ok? My point is… you quite simply don’t want “the patients” running the show. The numbers should intimidate us. Look at the list:

http://en.wikipedia.org/wiki/List_of_mental_disorders_as_defined_by_the_DSM_and_ICD

… and the traits.

Again…. we place 6th in the world in 2010 according to OECD. It didn’t just come through the system design or the administration of that design. Its an investment in manpower. It came through the civil servants who worked with that design and if people think they can get something for nothing? Expect the cream of the crop to show up for peanuts like some believe will happen, lets think again. Please? We’ve got a good thing going here, we really do. Lets not mess it up.

Like it or not Daystar, a fiscal pension “rekoning” for govt workers of all stripes is coming…….and it isnt going to be pretty. – CE

Yeah, pensions. Thats why folks like Jeremy have to take what is given. TSFA’s, good investment advice… y’know? Thanks for your feedback, it generates a good debate!

#140 a fan on 07.02.12 at 6:16 pm

I’m always amused when I see people beating up on teachers and complaining that they are not doing more for kids but scream murder that they don’t make as much as a teacher. Simple. Become a teacher if you’re so jealous of the work you claim they don’t do. You’ll find that it’s a terrible job on a day-to-day basis.

#141 Willy H on 07.02.12 at 6:20 pm

Always amazed at folks with government jobs whether they be teachers, fire fighters, police or administration. They seem to believe that their post-retirement benefits are rock solid, enshrined in collective agreements, guaranteed, fully backed by governments (the tax-payer), one of the Ten Commandments!

Nothing could be further from the truth in these uncertain times. 1.2 teachers retired in Ontario for every one working by 2014 = benefit reduction. Emergency services workers fund barely 10% of their post-retirement benefits out of their own pocket over their working years. We currently have Walmart Associates paying income tax to fund post-retirement benefits for these workers, benefits they can’t even afford to dream about!

The divide between the public and private sector has become a chasm.

Interesting times ahead folks.

#142 Frank le skank on 07.02.12 at 6:55 pm

I definitely don’t agree with most of the comments about teachers. I am not a teacher and you couldn’t pay me enough to do that job, hats of to them. People want to cheap out on the people that spend 8 hours with their kids and will be the first to complain when the quality of education sinks even lower. Personally, I am discouraged with the publics attitude towards each others earnings. When Air Canada threatened to strike everyone shit on them. One of the biggest problems with our economy is stagnant wages and outsourcing and we don’t support each other when it comes to fighting for our rights and jobs. Instead, our jealousy takes over and we bitch and complain about it. Companies have done an excellent job in brainwashing people and turning them against each other to justify their cheapness.

#143 armpit on 07.02.12 at 7:13 pm

Garth…great blog, but alot of today’s feedback is out of line. Too much bashing. Is today’s pathetic blog done yet?

#144 Blue Monster Lover of Meats and Vegetables on 07.02.12 at 7:50 pm

#144 Frank le skank on 07.02.12 at 6:55 pm
Frank, the problem with public sector wages is we don’t know what they’re truly worth because the money we pay them is not voluntary in exchange for value, it’s forced from the private sector at gun point if necessary.

No one can complain about a business man who gets rich or is greedy if all his customers happily buy his product(s) by their own free will. The public sector services of every type are a totally different matter. This is why costs continue to rise while quality falls.

Our grade K-12 education in Canada is essentially a public sector day care system that caters to imbeciles and teachers pets at the expense of the gifted.

#145 Frank le skank on 07.02.12 at 8:05 pm

BMLMV

I know what your saying, but like every other job there’s good and bad workers. Some people are useless, but there’s a lot of good teachers. I think you put every teacher under the same umbrella which is not fair to the good ones. I work for a telecom company and our problem is that the useless employees are allowed to be that way due to lack of leadership.

Let’s continue to cut back wages and benefits for everyone and see how this country does.

#146 Casey on 07.02.12 at 8:38 pm

#136

“At UBC in Vancouver a few years ago, there were more seats for the program than there were actual applicants!”

Wow, I ask for a source for one ridiculous statement and get another. Which year? Which program? Source? Do you work at admissions at UBC… yeah, I didn’t think so. If this is public knowledge source it.

#147 CrowdedElevatorfartz on 07.02.12 at 8:44 pm

@#140
Wholy Cow! That reply would have taken me a week to type !
Fair enough.
We agree to disagree on several items.
Happy Canada Day !

#148 cynically on 07.03.12 at 3:15 am

Amusing musings – #46 is right, Canada is still a colony.Go back and click on. #92 is giving us the Aussie housing market and we don’t even understand our own. Anyone got figures on Burkina Faso? CrowdedElevatorfartz in #s 120 and 130 got it right – taxes far too high for what we get, particularly in the political area – OVERTAXED – OVERGOVERNED! #120, Daystar must have started typing this morning. Anyway a belated happy Canada Day.

#149 xyz on 07.03.12 at 9:41 am

That picture has got to be Vancouver… I don’t know anywhere else where people are weird enough to wash the car in the rain.

#150 disciple on 07.03.12 at 11:12 am

Report: General activity in the cottages and on the roads out in east Ontario was pretty quiet for a Canada Day long weekend. A surprising start for the summer IMHO…

#151 Erlenmeyer on 07.03.12 at 1:07 pm

Garth your previous too blog entries have been great. Thanks for your constant work. And when are you gonna do a blog entry about Saskatoon/Regina !?!?

#152 Lupo on 07.05.12 at 12:38 pm

Isn’t it just simple math?

If you’re upgrading a declining market always helps more than it hurts. In a market where the decline is 20%, Jeremy may “lose” $100k on his $500k house, but the $700k house that the wants to buy will come down $160k. That’s $40k less that he has to finance.

As for timing the market, that’s tough. $1800 per month is $21 600 per year. I’d say there’s no point in throwing away that much in rent. Far better to keep putting that towards the mortgage and paying it down. It’ll be a wash between losing some equity and paying away that much in rent. He’ll also save his family a move.