Won’t end well

tat

In the last year gold has lost 9% of its value, and a detached home in Vancouver has declined 6%. Condos in Toronto are about 3% less, and falling. Median home prices in Victoria are down 8%. Silver has tumbled 14% in the twelve months. Of course real estate sales in most cities have fallen substantially recently, suggesting more price weakness ahead.

Meanwhile, the Dow is up 8% in a year, the S&P 500 has gained 11.6% and the laggard TSX is ahead 2%. Spot a trend here? Hope so. It’s what I told you more than a year ago to expect, as we enter a new era your mom never warned you about.

Real assets are flatlining or, in many cases, declining. Financial assets are going in the opposite direction. In simple terms this means you’re better to have more of your net worth in a nice rotund little portfolio, and less in your house. Yup, those days of buying a home, just paying down the mortgage and feeling smug are over. It’s a shifting of the financial tectonic plates most people will not even feel or realize until then end up like Vince. Poor Vince.

“I bought this house for $895,000 five years ago,” he says, when everybody thought it was different in Victoria. Not long ago he got his assessment notice, for $810,000. Not that it matters much. Five months on the market now, and two price reductions. “If I could get an offer for eight, I’d be delirious.” After commission and moving costs, and repaying a $585,000 mortgage, he’d walk with $265,000, which is $30,000 less than his down payment was in 2008.

And in those five years he made $170,000 in mortgage payments, paid $38,000 in property taxes and insurance and put in a new main floor washroom. The cost of owning, then, was $208,000 plus the asset loss, or $238,000. That’s $4,000 a month. Houses similar to his rent for about a grand less, which means the whole thing just drained his net worth (not even including closing costs when he bought or the expense of the new john). Not something a 58-year-old yearning for retirement can easily swallow.

The days of houses inflating all on their own are over. With a slowing economy and an aging population the demand for income will far outstrip the demand for real estate. Already billions of dollars sitting on the sidelines or idling inside properties is finding its way back into growth assets. And why not? It’s patently clear the doomers were wrong. There is no 2008 on the horizon. The greatest risk is not losing money, but once again running out of it.

How obvious is this? Even Mark Carney gets it. In a weekend interview the departing Bank of Canada czar warned a moist, cold nation that houses will continue to correct (for two more years) and people should stop confusing their homes with a financial plan.

“Real wealth is built through innovation, and it’s gained through hard work. It’s not through some magical asset inflation.”

This is crushing news to all those young hornies who bought condos and GTA townhouses made of pressed corn flakes with 5% down, thinking profits were guaranteed. It’s misery for thousands of sad Vancouverites who shoulder massive mortgages and suffer pale, blinking people living in their basements. It’s especially brutal on the wrinklies. Scores of house-rich, portfolio-poor Boomers thought paying off a mortgage was all they needed to worry about, prior to selling their energy-sucking, suburban McMansions to dumb thirtysomethings for an obscene capital gain.

But the shift spells an end to that. With mortgages available for about the inflation rate and diversified, balanced portfolios turning out predictable returns, why would you pay off a 2.8% debt on a depreciating asset when you can get three times more elsewhere? How does it make any sense shoveling cash into your home’s equity when, like Vince, you end up poorer than when you started? And why it’s such a bad thing to “throw your money away on rent” when you throw more away owning?

The realization of this is spreading, despite the realtor misinformation and marketing deception you’ve read about on this pathetic blog. But most people won’t get it.

So we have a spectacle ahead. This won’t end well.

But the way, I sure hope you voted for this blog. The last time I looked, the potatoes and jar people were gaining on me.

206 comments ↓

#1 Zoostation on 02.17.13 at 5:46 pm

first

#2 Scott in Gibsons on 02.17.13 at 5:49 pm

Just saying….

By William L. Watts FRANKFURT (MarketWatch) — The world’s central banks last year bought 534.6 tons of gold in 2012, the most since 1964, as global gold demand hit a record value level, the World Gold Council said Thursday in a quarterly report. Purchases by central banks for the full year rose 17% compared with 2011, while fourth-quarter purchases of 145 tons marked a 29% rise from the same period a year earlier. “Central banks’ move from net sellers of gold to net buyers that we have seen in recent years has continued apace,” with official sector purchases across the world now at their highest level for almost half a century, said Marcus Grubb, managing director for investment at the World Gold Council. In value terms, total gold demand in 2012 was $236.4 billion, an all-time high, the council said.

Metalheads routinely ridicule central banks and lionize them when it supports their fetish. Hilarious. — Garth

#3 sickofbc on 02.17.13 at 5:54 pm

“Real wealth is built through innovation, and it’s gained through hard work,” Mr. Carney explained in an interview taped before this weekend’s G20 finance ministers and central bankers meeting in Moscow. “It’s not through some magical asset inflation.”

http://www.theglobeandmail.com/report-on-business/economy/real-wealth-comes-through-innovation-not-home-prices-carney/article8776308/

#4 Good authority on 02.17.13 at 5:54 pm

Your snap shot is fine for this moment. I suspect that that as soon as the masses are sucked into the market, the banksters will move back in and doom will prevail once again. No snapshot will be discussed then as the drop in housing will be the dominant matter at hand. Nonetheless, you are righter today than wronger. I watch and wait, not sharing your confidence that printing money endlessly will solve the universal depth problems.

#5 mel in victoria on 02.17.13 at 5:57 pm

DEVORE…

In yesterday’s post where you were critical of my use of the terms weak and strong hands,I referred to you as a lady. Sorry, my mistake…

Perhaps I can explain what I meant by weak and strong hands. As you know, when someone sells something in a market, someone else buys it and vice versa. Furthermore, I didn’t intend to use the expression ‘weak” as a pejorative but there’s ample evidence that human emotion being what it is, many people get scared and panic when something they hold drops to a price when they find the loss unbearably painful and they sell…..and history shows it’s often at or near a bottom. That’s human nature. Fear and greed are often factored into decisions we make and make us do dumb things which we later regret. Like sell at the bottom and buy at the top. Truth be known we’ve all done this.Very common behavior. One could also say it’s the smart or lucky people who sell at the top and dumb or unlucky ones who sell at the bottom. In any event, no one really knows when the top is reached or the bottom. Yep, a lot of luck along with some skill and expertise learned over decades of investing helps but nothing is infallible.

If we look back to what happened with the stock markets as well as with the precious metals from mid 2008 to early 2009 there were huge drops in prices and so many people sold at the bottom because of their risk tolerance and the pain of their losses was overwhelming. Were they the weak hands.. the unlucky, the dumb? …and the people who bought at or near the bottom,were they the strong, the smart the lucky ones? I know so many very smart people who sold their portfolios fractions of percentages from the bottom. And they never got back in and the markets have doubled and trebled since then. Successful business people, PhD’s and they succumbed to their emotions..Sold at the bottom only to see their portfolios recover with huge profits had they stayed in…and they lament their actions and their emotions to this day… And the ones who bought their stocks, their gold at the bottom, the strong hands(?), well they profited immensely.

Currently, many of the global stock markets are doing very well with some reaching new highs. Can they go higher. Of course. If they do go higher and then inevitably correct does anyone know the magnitude of that correction? Who are the folks who will sell or lighten up at what will actually be the top? Who will be buying their shares at the top? Someone will .

This is a RE blog and our host Garth has been correct with respect to real-estate prices eroding and facing further declines and has provided convincing reasons why RE is/has topped out in so many areas and will continue to decline possibly for many years. Were the homeowners who took his advice and sold at or near the top of the market when he said it was time to sell ,or at least not to buy, were they the smart ones, the lucky….the strong hands? …..I leave that to you to determine…….

#6 Mark W on 02.17.13 at 5:57 pm

Narcissism central on the left coast.

http://www.news1130.com/2013/02/15/funeral-home-says-relocation-controversy-is-a-positive/comment-page-1/#comments

After all it might have an impact on their condo prices.

#7 Keith in Calgary on 02.17.13 at 5:58 pm

In answer to yrou question. Of course I see the trend here.

The governemnt which is printing the paper is instructing the banksters receiving it to keep the stock market afloat.

Dooouuhhh……

I actually feel sorry for people like you. — Garth

#8 Saskatoon-Living on 02.17.13 at 6:00 pm

Housing cooling here like the weather:

http://www.thestarphoenix.com/business/Housing+market+expected+cool+2013/7968747/story.html

#9 afraidit allmightend on 02.17.13 at 6:11 pm

Garth…..please….you’re getting a head ful of your own petard to make such a claim as to have nailed down a macro pattern out of a few months data……the fact remains that gold has increased each and every year for 12 years running….a real analyst would proclaim that a trend….not few months trade around a political season. Fundamentally we have only inflation to look forward to…how can it be otherwise when the increase in money supply is ramped up 15++% every year for the past 12 years..with more to come and a currency war just breaking out again with Japan firing off the next QE-infinity and public debt skyrocketing. If you don’t mind my saying so…you’re making rookie mistake by looking at the tree’s and not seeing the forest….which is fine for a short term trade position…but if I had a nickel for every daytrader I’ve met that went broke……I’d have plenty more than I do……just sayin….and buddy…your cock a doodle dooin like a kid that got lucky once and thinks he’s got it all figured out…..timing a macro is the worst enemy of the young and cocky.

#10 jwkimba on 02.17.13 at 6:16 pm

Just went to a local openhouse. Semi, backsplit with 2bed up 2down and basement all the way down.

Really nicely done, but much smaller than our $1500 /mo side split SFH rental around the corner with all 3beds up and a den down. Price was $499k. Can someone explain why renting is bad again? I keep forgetting.

#11 Smartalox on 02.17.13 at 6:22 pm

Carney should modify his statement: “Real wealth is built through innovation and gained through hard work, not by RIDING THE COATTAILS of some magical asset inflation”

These recent stories of shills and fraudsters faking HAM and colluding with media, that’s not “innovation”. Getting a percentage of the proceeds for being able to fill out forms, is not “hard work”. Foregoing due diligence in favour of a get-rich quick scheme flipping properties or condo-assignments is neither “hard work”, nor is it “innovative”.

Proceeds from any of these activities is therefore not real wealth, it is merely income. Whereas wealth lasts generations, income is a lot less stable, less predictable, and more likely to run out.

#12 Buy? Curious? on 02.17.13 at 6:22 pm

Ah-right Garth, the hot and sweaty stuff that brings people back for more! Fear is starting to set in. We’ll see everyone’s poker face soon enough.

Hey, if you don’t mind, I found some articles for the Baby Boomers out there. Do you mind if I post them? One is from the Washington Post.

http://www.washingtonpost.com/business/economy/fiscal-trouble-ahead-for-most-future-retirees/2013/02/16/ae8c7350-5905-11e2-88d0-c4cf65c3ad15_story.html?hpid=z1

And another is from the New York Times.

http://www.nytimes.com/2013/02/17/world/asia/in-korea-changes-in-society-and-family-dynamics-drive-rise-in-elderly-suicides.html?hp&_r=1&

Oh, one more thing, I went to a couple of Open houses over the weekend. I said I wanted to film the dimensions but really I was filming other people and their conversations about their chances of buying in this market. Here’s the video.

http://www.youtube.com/watch?v=K8SXdOjZeyk&feature=player_embedded#!

#13 Good authority on 02.17.13 at 6:29 pm

Your response to keith -7 as “feeling sorry” for him leaves me wondering if you really do not see a bigger picture whereby the printing of money does not equate to a rise in the market.

I see the market, stock and Re, as being on a coiled spring ready to snap for those who are “all in”.

I view Keith as prudent, skeptical and cautious. I do not “feel sorry” for him.

Then I include you. — Garth

#14 TurnerNation on 02.17.13 at 6:36 pm

Attn. new blog dogs. The following usernames are still available; reserve yours today.

Devil’s Advocate (newly free)

Tune in, Turn On, LOC out.

Flaherty’s Mixture

Burn your BRAs

How to talk to a Track6er (if you must).

Creepy Uncle Stephen

Joe Howmuchamonth

Garthospherian

Dr. Wane

Mattamy_Swooner

Reserved:
Sir Blog Dog Carney

#15 Top Canadian Finance Blogs 2013 on 02.17.13 at 6:51 pm

Dear Garth:

The others in the “Top Blog ” contest refuse to concede.

In fact, they are thinking of consolidating all their votes and blogs to mount a final challenge.

That said,( and assuming you can stave off this mob’s last gasp attempt), what precious metal would you like your trophy made out of ?

#16 DocInWaitingRoom on 02.17.13 at 7:06 pm

Funny some guy called Wiseman (no seriously) was saying on 640 news radio he and some other Wiseman (his son?) was selling “natural” diamonds, gold and silver to people as insurance for countries printing money like Canada. A Real investment he said.They can even keep it safe in their vault, and sell part of your “real” investment to others, for a small profit of about 20% per transaction. Sounds like another society positive realtor cashing in on this bubble of debt….

Too bad I don’t have $40k to buy a yellow diamond or a few ounces of gold and silver just in case when people are on the streets I can trade this stuff in for food, clean water, and shelter.

#17 economictsunami on 02.17.13 at 7:17 pm

The economy, wage levels from lost jobs and wage levels which take their place, will be a key indicator to watch going forward.

Myths of commodity super cycles, The Great Rotation, the impact of HAM and an organic US Housing Recovery are being exposed as shallow narratives and are dying off rather quickly.

With our consumer driven economy about to hit a wall due to flat inflation adjusted wages, scant savings and high debt levels, just what exactly will be driving demand?…

#18 Mike Stewart on 02.17.13 at 7:25 pm

Nothing like twisting the story. If you were in Richmond yesterday for the sale of Concord Gardens, you’ll definitely notice things are turning around in the condo market. Things aren’t as bad as descibed.

#19 Oakvillian on 02.17.13 at 7:26 pm

I thought you said the tsunami of listing coming in Jan. We are in feb now..!?!?!?!

Nope. Not me. — Garth

#20 TurnerNation on 02.17.13 at 7:29 pm

Of the other blogs in the poll, how many are so pathetic as to have people posting “first”?
I suspect none.

#21 jan on 02.17.13 at 7:30 pm

It seem here in Van;whore city our local government has no intention of controlling foreign land ownership here.
Seems to me the term PROSTITUTE SHOULD BE REINTERPRETIED to fit our politicians as number1 followed by realtors and hookers at the end !!!!!!

http://cityhallwatch.wordpress.com/

#22 jake on 02.17.13 at 7:40 pm

Garth – do you have any advice for my coworker? He bought a condo in Toronto few years ago (under development, to be completed in about 8 months), and they said he would have to pay 5% at the time. But due to government mortgage changes, he has to pay a much larger down payment, which he simply doesn’t have.

Does he have any recourse, as the rules changes _after_ he bought?

Yeah. Lawyer. — Garth

#23 SurreyRenter on 02.17.13 at 7:40 pm

Hello!
-I have started to put cash in my RRSP ( my idea was to save for a downpayment) Sadly, I have only about 10 000 in it
-My plan was to pay off a mortgage, in about 15 years ( on a condo, max price 150000) so that in my retirement I would only have to pay strata and taxes
-My rent now is 650/month
-Income, about 50k
-I’m 45
-No dept, even have my car paid off

The other day, my bank called, and said I could have a 15000 loan for any unsecured purpose, or a 22000 loan to invest.

Any thoughts?

#24 Smoking Man on 02.17.13 at 7:45 pm

Garth obviously you killed the pole…… Brager

When you brag its cool, when I do it… The hounds are after me..

Mind you my fans are silent…… It’s like a family breakfast, the Toronto sun passed around, the guys all wana look at the sunshine girl, but dare not say she’s awesome in front of others. Your fans are the ones that wana look… Like what they see, but say that’s disgusting…..

Your hero worshipers are loyal… A testament to what I speak of.

My hero worshipers know that if I ever caught them worshipping me.

I would loss all respect for them

#25 Jeff on 02.17.13 at 7:48 pm

Don’t worry, Garth, a bunch of us are holding back our votes in case you need a ‘secret weapon’ boost.

BTW….do we get a piece of the hundy, or what? It could be tough, now that pennies aren’t freely available.

#26 rob on 02.17.13 at 7:51 pm

Well done Garth. Your blog is very informing!

#27 Jaguar on 02.17.13 at 7:51 pm

I voted for your blog, Garth. I read it every day. I think you would be an interesting person to know.
‘Beware the Ides of March’. Maybe there is something to that. Debt ceiling will be re-visited, Alberta budget released, US decision on the Keystone Pipeline. We’ll how many listings hit the MLS. March could be an interesting month.

#28 Keith in Calgary on 02.17.13 at 7:52 pm

Rather than feeling sorry for me………after all, I’ve been getting an average of 11% each year since 2003 in soveraign bonds and forex trading.

You can just tell us where the trillions of dollars went instead.

#29 AK on 02.17.13 at 7:53 pm

#1 Zoostation on 02.17.13 at 5:46 pm

“first”

——————————————————————

Yes, you are the “first” ultimate loser. Congratulations, you did it!!

#30 rainclouds on 02.17.13 at 8:04 pm

#18 Mike Stewart

“things arent as bad as described”

Actually worse, Here in DTVan I now have to avoid panhandlers AND Realtors as they try and make eye contact …….open house! somebody come to my open house!

Yea. Richmond is on fire………….please.

#31 ReginaBOB on 02.17.13 at 8:05 pm

I live in Regina and the entire thing is discouraging. I am 35, single and have about $400k in networth (in Garth approved funds). I earn about $80k a year and would love to buy a house so I can do with it as I please, but when I look around here, there is no way I can justify the costs, and we have some of the lower prices when compared to the bigger cities.

I just don’t get how people can do this and still sleep at night. I just don’t understand how this has not imploded yet. Almost everybody I know who owns a house is basically broke but they keep spending.

Sigh.

#32 buy hi on 02.17.13 at 8:16 pm

Gail is NOT happy about her pole status. She has something special up her sleeve to move up the pole. She may have full jars but she knows how to use them. Do not get on her bad side when there’s a pole involved.

You can concede and save any embarrassment watching her at the top of the pole. Your call Mr. Tuner.

#33 claudius emperor on 02.17.13 at 8:21 pm

I did vote for this blog.

My dividend paying stocks did spectacular.

But you are deadly wrong on physical silver in long term. I am not talking about paper/fractional reserve silver here

Good move. Your silver losses cancelled the dividend gains. — Garth

#34 richmond bc on 02.17.13 at 8:23 pm

Garth, have you been following the China-Japan showdown of the diayou islands? It is the 11th hour and they are waiting for someone to flinch. The US has pledged support of Japan, threatening sanctions against China who is a global economic power (joke), and don’t forget a trigger happy North Korean in the background just looking for a reason to press the button.

#35 prairie person on 02.17.13 at 8:32 pm

Did my walkabout and was surprised to see that only one of the four properties pulled off the market during the winter have a for sale sign back up. I was expecting all four to be up plus many more. Maybe people really are hunkering down and with the music stopped, people are going to stay in their houses instead of playing the musical chairs flipping game. To make a flip worthwhile a house price has to go up more than the cost of the flip. Houses don’t have to go down to create a loss. They just have to not go up. Went for a drive last week and saw more one percent signs up. From what I see, it may take until the fall to establish the situation. Might see some pain then.

#36 Shawn Allen on 02.17.13 at 8:34 pm

REAL WEALTH

I don’t disagree with Carney that innovation can create (more) real wealth.

But it might be good to ponder what real wealth is:

In this context we can exclude some very valuable things that we take for granted like the air we breath and our health and water in the lakes and our families.

Financially speaking real wealth includes land and especially serviced and improved land.

In this context we also generally exclude public real wealth like roads and bridges and school buildings.

We focus on private real wealth.

Private real wealth includes things like houses, cars, furniture, clothing, and appliances of all kinds.

Another category is shares of profitable businesses.

Financial receivables like ownership of bonds is a category of real wealth.

Valuable collectibles including diamonds, gems, gold, rare paintings and such are also a type of real wealth since they can easily be traded to others for money and then the money used to buy goods and services.

Money is another category. Paper money it is often pointed out has no intrinsic value in its paper. But it has great value because it represents claim checks that allow us to purchase real goods and services.

At its simplest real wealth can be created by a person digging a garden or building a fence, or painting fence. Here the application of physical labor creates an increase in some valuable asset like food or a fence. No innovation required here. But innovations is usually helpful.

#37 claudius emperor on 02.17.13 at 8:41 pm

Good move. Your silver losses cancelled the dividend gains. — Garth
—————————–
Not really. As I said my silver, platinum, mining stocks is less than 10 % of my total portfolio.

Platinum did great lately and did offset any silver losses. I am passive investor never looking at short term.

The time will come but I am afraid might wipe out my stocks…

#38 GTA Engineer on 02.17.13 at 8:43 pm

#13 Good authority on 02.17.13 at 6:29 pm
Your response to keith -7 as “feeling sorry” for him leaves me wondering if you really do not see a bigger picture whereby the printing of money does not equate to a rise in the market.

I see the market, stock and Re, as being on a coiled spring ready to snap for those who are “all in”.

I view Keith as prudent, skeptical and cautious. I do not “feel sorry” for him.

Then I include you. — Garth

——————-

Good authority,

The more educated among us, along with the less married to the beliefs they may have had as early as yesterday, see exactly what you’re saying. The markets are being driven up via central back liquidity injections. The forward corporate earnings projections do not support the PE’s we’re seeing in the markets. Markets are a ticking time bomb.. I’ve stopped harping on about this as Garth very clearly does not agree with our thesis, but even without these crazy financial stimulus actions, we’re 4 years into a bull run, where employment growth is barely limping along at rate of population growth, Europe is in recession, Japan and Venezuela have kicked off currency wars, industrial production is rolling over, and debt crises in Europe and the USA are far from resolved. On top of that, the bull/bear ratio is trending ever skyward -> you know what that means (if you don’t, read Buffet -> be fearful when others are greedy, and greedy when others are fearful).

For Garth to say to stay in equities because the last year has proven this to be a good idea is going directly against his previously stated mantra of investing where risk is low. At these levels, risk in the stock markets is extremely high. Stay in cash friends.. the time to buy will come..

Nowhere have I counseled buying individual equities, and everywhere I have suggested a balanced, diversified portfolio with a strong fixed income component, plus active management. That has yielded perfectly nice returns for the past decade, including the financial meltdown. Your argument limps. Extreme statements and suggestions you’re the smartest guy in the room render it flaccid. — Garth

#39 Spiltbongwater on 02.17.13 at 8:53 pm

“There is no 2008 on the horizon.”

Was 2008 on the horizon in 2006 or 2007? What makes you think 2015 won’t be worse then 2008? Economists make educated wild ass guesses, but really, nobody knows what will happen in the next few years, and anybody who claims to with any sort of certainty, is a nutbar like psyics and natural health Drs

#40 claudius emperor on 02.17.13 at 8:56 pm

Gain or loss is if you sell.

Otherwise it is the same as the people feeling ‘wealthy’ when their houses rise in price.

#41 garthknowsnothing on 02.17.13 at 8:59 pm

all i kniw that i seen morttgages rates are not offered at 2.69% this market will keep going up till they raise rates …el gartho!

#42 bigrider on 02.17.13 at 9:01 pm

Im no gold bug for sure as a 5% position is all I got(now about 3% do to decline ) but wow Garth you have a plethora of individuals and institutions who have a completely different view than you as evidenced by their respective buying as well as wealth and power. Listing just a handful, Eric Sprott, Bill Gross of Pimco, Jon Paulson, central banks all over the world.

Your call to take profits last year , well I have already congratulated you on , but to keep your point of view against with such steadfast conviction( and in view of your book in 2008 where you were bullish on gold, no need to quote you) is surprising. This after such a severe correction in gold equities to boot? I would think you would see the technical/strategic benefit of adding /initiating a position at this juncture in the space, nes pas?

#43 Chester on 02.17.13 at 9:06 pm

On my way home from work tonight I was listening to CNBC. Interviewer brought up F at the G20 talking about dropping protectionism at the same time Canadian manufacturing is falling off. The fellow from the National Bank in Australia mentioned F has bigger problems namely the Real Estate Bubble popping due to leaving interest rates too low. Wonder what happens to our $ as this plays out.

#44 Shawn Allen on 02.17.13 at 9:06 pm

REAL WEALTH

Most real wealth today is created by various systems that bring people, machinery and information technology together to create valuable products and services.

An average wage these days is probably close to $25 per hour, $50,000 per year based on 2000 hours per year (40 hours times 50 weeks).

I saw a full size fridge on sale today for $500. That’s 10 hours (pre-tax). Even aftr tax most people would need to work no more than two days to buya full size fridge.

When you think about it that is incredible. No man tinkering in a shop could make a fridge from raw material, and if he could it would take weeks. It is systems that allow the amazing productivity that allows an average Joe to earn a large appliance like that in under two days of work.

And oh yes, maybe the fridge was made in China but the point is you can still earn one in very little time working in Canada.

When you think about it, the way our economy works and the systems and the division of labour, it is like magic. All hail Adam Smith.

#45 Smoking Man on 02.17.13 at 9:07 pm

I’m on a slot machine, this huge chic sits next to me, her fat toe broke threw her nylons. Sexy is all I can say.

I need help….. Wtf

#46 Gunboat denier on 02.17.13 at 9:09 pm

32 buy hi – I’m having a visual of Gail on the pole – ewwww……not my cup of tea…..

#47 Smoking Man on 02.17.13 at 9:25 pm

Why do all you dogs all want loot, investments, strategy, Bla Bla Bla.

Truth is, what is the underling motivation, a new peace of strange. Who are you kidding… Dogs.

Money and wealth are just an aid to the non creative..

When your a smoking Man….. Don’t need it, even if you got it.

.

#48 Shawn Allen on 02.17.13 at 9:27 pm

REAL WEALTH IS CREATED BY GOVERNMENT WORKERS TOO?

It’s often said that ALL real wealth is created by the private sector and none by government workers.

It is clearly and blatantly false.

Yes, many government programs are wasteful and inefficient. Some are even downright destructive.

But certainly a government mail carrier is creating real wealth, a government policeman and a government fire fighter are all part of the system that creates and maintains real wealth. Same for public prosecutors and government health care workers and those at the department of motor vehicles too.

Blanket statements like the government creates no real wealth are just plain wrong and those who say it should know better.

#49 Mic D'angelo on 02.17.13 at 9:32 pm

People believe that a house is an investment. It is just a place to live. It is an asset you can sell but it does not mean it is like an ATM machine that you borrow against and think it’s your money or sell it in future because you think you will become rich.

Interest rates were kept low and pushed down to trick people because they forgot like with bonds, some safer type equities or any investment you should be getting paid while you wait. Equities, you should be getting dividends, bonds interest.

I don’t like,don’t feel comfortable and never had a good experience with mutual funds,stocks, etf’s, reits. I bulit a large enough portfolio since 1994 a 6.50%+ return from my government bonds,strips. Interest rates are low and will stay low for about another 4 to 5 years and than rise. I predict a mid to long term 5.00% for Canada,provincial bonds by 2022-2023 and 5.50% for strips in 2023-2024.

I hold all my bonds to maturity and my interest income is more than enough to live off. I have a small portion of investments coming due every year and have enough short term investments as a big expense may come. My average return will be still 6.00% on my total investments even if bond yields stay or drop a 0.50% from here, so I’m fine.

I can get 3.70% to 3.91% depending on the term of my bonds,strips. People forget that property/ real estate have many large expenses every year (maintenance,property taxes,repairs,gas,electricity,telephone,water, H.S.T. on all annual expenses etc.) and when buying and selling real estate legal fees,land transfer taxes, H.S.T., financial fees from mortgage companies, banks etc. that can be 5% to 10% of the total value depending on circumstances.

I put away about $35,000 to $40,000 a year in new investments every year. I save the most I could living a decent life and within my means. I don’t need a big house and have no debts of any kind. It is not difficult. The problem is that you just have to do it, stick to a plan and be disciplined and don’t get freaked out by large numbers because once you get going you will see the progress and your savings,investments build up.

I can give an example, you can start by investing $5,500 maximum TFSA every year and you get say 3.90% in strips over the next 35 years from 30 to 65 years old, you will have $397,048.87. The income it would spin off is $15,484.90 at the same 3.90% interest rate.

You can say anything you want about inflation, it’s a low return etc. but it is better than the debt binge and real estate obsession we have today.If you have all your money in an so called asset that every year will cost you more and more it is almost impossible to have a better life for yourself and your family. Home ownership is not for everyone and renting does not mean you are a loser. You having little or no money and being in debt to your eyeballs does. People need to grow up and be adults and stop living in this fantasy land like children. Give yourself and your family a better future.

#50 Fed-up on 02.17.13 at 9:49 pm

@#47 Shawn Allen

—————————————————————-

Are you a member of our Senate? :p

#51 Badger on 02.17.13 at 9:55 pm

Garth, the “Great Rotation” into stocks — and “Money-On-The-Sidelines” thesis is a myth. Greenspan even admits that the only reason equity markets are going up is the Fed’s printing — and they HOPE that fundamentals will catch up to the inflated value of the S&P 500…. If they’re wrong (and they so could be) — we’ll have much worse than 2008. This market is an EXPERIMENT. Do you want to invest in an EXPERIMENT? Trade it, sure — but invest? Madness.

Over 70% of S&P companies have earnings that beat expectations in Q4 and 66% surpassed sales projections. That only happens in a growing consumer economy. Next. — Garth

#52 led on 02.17.13 at 9:55 pm

Stocks are going to make a correction soon, we are still pointed up, but we are overbought. wait for a pullback coming this week or next

I heard that at Christmas. Amateurs worry about market timing. Pros worry about strategy. — Garth

#53 shopper on 02.17.13 at 10:02 pm

In Nanaimo, the rental vacancy rate has doubled in the last year. Lots of good deals out there and opportunities to become a pale, blinking, musty, mouldy basement dweller with lotso room. But lots of good luxury places too for good prices. Seems like a lot of people need that “Mortgage helper” to try and keep them above water at these “crazy” interest rates that are “going to stay low for a long time” or so many think.

#54 Richard and Zeus on 02.17.13 at 10:02 pm

In answer to yrou question. Of course I see the trend here.

The governemnt which is printing the paper is instructing the banksters receiving it to keep the stock market afloat.

Dooouuhhh……

I actually feel sorry for people like you. — Garth
———————————————————-

Actually its the private banks that print the paper out of thin air and charge interest to it in the form of a debt obligation (same as printing money). They do this with the govt’s blessing. Its probably the largest conspiracy to “hurt’ people on the planet. Someday the people will wise up. I am glad I am not a govt worker or a banker when this happens.

Banks do not print money. God, this is tedious… — Garth

#55 Canadian Watchdog on 02.17.13 at 10:07 pm

Transition measures support new-home buyers, builders

VICTORIA – Government is announcing new relief measures that will benefit purchasers and builders of new homes. The B.C. new housing rebate threshold will be increased to $850,000, effective April 1, 2012, meaning more than 90 per cent of newly built homes will now be eligible for a provincial HST rebate of up to $42,500. It is important to note that the HST does not apply to resale housing.

Yep. It's election season.

#56 Richard and Zeus on 02.17.13 at 10:10 pm

Garth, the “Great Rotation” into stocks — and “Money-On-The-Sidelines” thesis is a myth. Greenspan even admits that the only reason equity markets are going up is the Fed’s printing — and they HOPE that fundamentals will catch up to the inflated value of the S&P 500…. If they’re wrong (and they so could be) — we’ll have much worse than 2008. This market is an EXPERIMENT. Do you want to invest in an EXPERIMENT? Trade it, sure — but invest? Madness.

Over 70% of S&P companies have earnings that beat expectations in Q4 and 66% surpassed sales projections. That only happens in a growing consumer economy. Next. — Garth

————————————————————–

Almost 50 million Americans are on food stamps. Billions are made making “bombs and baby killing machines” for the US Military. GOVT contracts do not add to the GDP but rather contract it. You can’t eat one end of the taxpayer “private sector” in order to feed the other end “Military and Food Stamps”. Military contract companies like Raytheon, Lockheed Martin and Boeing are “GOVT WORKERS”. The GOVT is where their money comes from. The snake eating its tail…..will eventually kill the snake ….not make its belly full.

So much mis-information (disinformation). Its sad….

#57 Freedom First on 02.17.13 at 10:12 pm

#24 smoking man

Speak for yourself.

#58 Richard and Zeus on 02.17.13 at 10:15 pm

But certainly a government mail carrier is creating real wealth, a government policeman and a government fire fighter are all part of the system that creates and maintains real wealth. Same for public prosecutors and government health care workers and those at the department of motor vehicles too.
——————————————————–

ABSOLUTELY CORRECT. My wife is a front line worker.

Unfortunately……..that is the worst type of cherry picking because if you add up ALL the govt workers on the payroll……less than 15% of them are front line workers. Most are useless pencil pushers wasting money. I have had managers I know who are “ethical” tell me that personally.

#59 JSS on 02.17.13 at 10:18 pm

Garth, I voted for your blog – because it’s not as gay as the other blogs.

#60 AK on 02.17.13 at 10:22 pm

A lot of stock market bears tonight.

I love it.

#61 Dr. WAYNE on 02.17.13 at 10:26 pm

#1 Zoostation on 02.17.13 at 5:46 pm

first

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

Looks like you may be a neophyte here. So … I’ll go easy on you. Your compulsion to get ‘first’, renders you a consummate, idiotic a$$hole for not stifling your desires and following the wishes of the venerable Mr. Turner, who also, by the way, categorizes you as a moronic a$$hole, but is much too refined to express so directly … I am not so hindered.

#62 Grant on 02.17.13 at 10:27 pm

“and suffer pale, blinking people living in their basements.”

LMAO! Now that’s funny!

#63 Badger on 02.17.13 at 10:27 pm

Garth, the only reason 70% of the S&P beat expectations is because analysts SLASHED estimates 40%!! Oh, and companies FIRED like crazy to lower costs….
Maybe all the bullshit WILL work — and all will be well; I’m just saying that the “market” and the economy are in uncharted territory. All this central-bank intervention better work PERFECTLY, or wealth will evaporate like never before. Hopefully it works PERFECTLY.

#64 Freedom First on 02.17.13 at 10:29 pm

Garth. Thank you for editing my two references to smoking man. Better judgement than me:)

#65 Inglorious Investor on 02.17.13 at 10:33 pm

Greenspan (the so-called ‘Maestro’) says, that while the Sequester will negatively impact the economy, what REALLY matters is how the Sequester will affect the STOCK MARKET.

http://www.zerohedge.com/news/2013-02-15/greenspan-ignore-economy-only-stock-market-matters

Got that, my American friends? You may lose your job, but as long as the stock market keeps going up, it’s OK.

He also says the stock prices are a major cause of economic activity. How major? Well, he says that statistics indicate that 6% of the change in GDP results from changes in the market values (i.e. prices) of stocks and homes. So, in Mr. Greenspan’s world, 6% is considered “major.” I’d like to hear his definition of “minor.”

So… 94% of the change in GDP is NOT because of changes in prices for stocks and homes. And because he lumps together stocks and homes, he does not provide the data for stocks themselves. Nice trick, Mr. G.

He further goes on to say that the ‘wealth effect’ is probably why the consumer is spending as much as they are. So you see, we don’t need actual money; we simply need to FEEL like we have money.

Like the man who discovered bank credit said: “Yesterday I didn’t have two nickels to rub together. Today I owe millions!”

#66 claudius emperor on 02.17.13 at 10:36 pm

That rebate of HST in BC for new home buyers is disgussing.

This is coming out of your health care and services!

delusional province…

#67 Basil Fawlty on 02.17.13 at 10:37 pm

“Metalheads routinely ridicule central banks and lionize them when it supports their fetish. Hilarious. — Garth”

So, did the central banks purchase the gold, or not? Whose fetish is this?

#68 claudius emperor on 02.17.13 at 10:44 pm

Next step would be to proclame everyone renting as an enemy of the delusional BC.

This is beyound socialism and comunism, it is an outright crime.

#69 Chickenlittle on 02.17.13 at 10:45 pm

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/how-to-become-an-rrsp-millionaire/article8782160/

Who wants to be an RRSP millionaire?!? HUH?!? ANYONE?!?

#59JSS on 02.17.13 at 10:18 pm
Garth, I voted for your blog – because it’s not as gay as the other blogs.

You’re right…it isn’t. It’s metro.

#70 neo on 02.17.13 at 10:46 pm

“There is no 2008 on the horizon.” Ok. So we are in recovery right? We are near Dow/S&P Oct. 9th, 2007 all-time highs right? Let’s revisit the landscape of that glorious time.

-unemployment was 4.7% then 7.9% now
-4.14% 2 year bond then 0.27% now
-4.38% 5 year bond then 0.86% now
-4.65% 10 year bond then 2.01% now
-Gold $743.10 then $1,616.10 now
-Silver $13.58 then $30.10 now
-Oil $80.26 then $95.70 now
-23 million on food stamps then 46 million now
-Dow Jones 14,164 then 13,981 now
-S&P 500 1,565 then 1,519 now
-Nasdaq 2,803 then 3,192 now

“Real assets are flatlining or, in many cases, declining. Financial assets are going in the opposite direction.”

I know. I know. I’m cherry picking.

So are you.

#71 Fortunate Fool on 02.17.13 at 11:01 pm

Over 70% of S&P companies have earnings that beat expectations in Q4 and 66% surpassed sales projections. That only happens in a growing consumer economy. Next. — Garth

I’m so happy my son got a D in finance as I was expecting him to get an E. I’m so disappointed my daughter got a B+ in economics as I was expecting her to get an A.

I guess it’s all about expectations. Keep them low and you’ll never be disappointed… When I look at the macro, I don’t see a lot of reasons to be overly optimistic. But it’s just me, what do I know?

#72 TORONTO_GET_REAL on 02.17.13 at 11:09 pm

So two more years of RE corrections? Back to a bull run in no time.

#73 Min in Mission on 02.17.13 at 11:09 pm

I got some advice from a financial adviser this weekend.

I think I am going to change my name to “poor Vince”.

#74 Devore on 02.17.13 at 11:17 pm

#18 Mike Stewart

Yawn… let me guess, another pre-construction “sells out”? Still waiting for the results of the supposed “increased activity” you told us about…. or how about you save the self-serving spiel for your witless clients.

#75 Grim Reaper/Crypt Speculator on 02.17.13 at 11:17 pm

I really want to apologize…

We thought we had Dr. Wayne “secured”.

However, as per usual, he manouvered his way through the legal system and was given an audience with Senator Pamela Wallin.

http://www.youtube.com/watch?v=G1IayQ9MAl4

#76 Smoking Man on 02.17.13 at 11:19 pm

This will not end well.

GOD is going to get his ass kicked if he don’t smarten up.

Just saing

#77 DA why don't you mention all the foreclosures in Kelowna too! on 02.17.13 at 11:21 pm

Like I’ve said before if you want to buy property, buy in the US. So far on “paper” I’ve made $75,000 on my house, since I bought it.

#78 Angela on 02.17.13 at 11:22 pm

That picture made me laugh out loud. Thanks!

#79 TORONTO_GET_REAL on 02.17.13 at 11:23 pm

Garth quite deliberatly left out a key comment made by Carney. He doesn’t expect any RE crash….move along.

I don’t either. Just a really lousy place to put money. — Garth

#80 DA why don't you mention all the foreclosures in Kelowna too! on 02.17.13 at 11:27 pm

But like Garth says in Canada, start buying stocks, wait for the bonds to fall in price and then buy them. It’s a little more difficult than that, but basically 60% stocks, 40% bonds, indexed and well diversified. And with what you have left over buy US real estate, location, location, location… its the cheapest its been in 40 years! You’ll do well.

#81 NotaGreaterFool on 02.17.13 at 11:27 pm

Garth – I thought there was a new book coming.

#82 sm_yyc on 02.17.13 at 11:31 pm

Garth – i notice that td e series funds pay distribution instead of dividends. Are distributions eligible for dividend tax credit or are they treated as Income?

#83 Christopher Lackey on 02.17.13 at 11:32 pm

Friends over for dinner last night told me friends of theirs bought a condo in Hochelaga Maisonneuve thinking they were going to sell in 3-5 years and make a huge profit. Then the big local cornflakes condo developer of the project, Samcon built another condo across the street with cheaper units than the ones these guys bought. But they were just following common knowledge advice that continues to be advocated by people like that guy you had on yesterday from the KFC brokerage or whatever

#84 Inglorious Investor on 02.17.13 at 11:33 pm

#70 neo on 02.17.13 at 10:46 pm

Stop clouding the issue with facts.

#85 Chickenlittle on 02.17.13 at 11:44 pm

I voted! Twice…

#86 love_depends on 02.17.13 at 11:45 pm

Garth you really piss me off…make up you mind.
Tonight right on your blog:
“Real wealth is built through innovation, and it’s gained through hard work. It’s not through some magical asset inflation.”

and yet ,you say nothing of THE Fed printing their FAKE money, dishonest money (so much for hard work) and manipulating the economy and the stock market.
You are right this will not end well !!!

#87 Austrian school on 02.17.13 at 11:52 pm

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig Von Mises

#88 David on 02.17.13 at 11:52 pm

@49 Mic

Do you think $15k a year will be enough to live on by 2048 and beyond? Granted it will be tax-free in your scenario but still?

If you can sock away half the average household income into bonds surely you live on more than $15k a year now.

#89 timmy on 02.17.13 at 11:56 pm

[email protected] Jan,
Gregor is either a whore to the developers, or a simpleton. This city is being ruined by endless ugly grey glass characterless hi rises, packed up against one another, destroying character homes and blocking the mountain views. Developers have committed a huge chunk of change to Gregor Robinson’s campaign and they are paving over as much of this city as they can under the bullshit guise of “eco density, which has nothing to do with sustainable development. Vancouver should get an award for the ugliest architecture in Canada.

#90 Richard and Zeus on 02.17.13 at 11:57 pm

Actually its the private banks that print the paper out of thin air and charge interest to it in the form of a debt obligation (same as printing money). They do this with the govt’s blessing. Its probably the largest conspiracy to “hurt’ people on the planet. Someday the people will wise up. I am glad I am not a govt worker or a banker when this happens.

Banks do not print money. God, this is tedious… — Garth
——————————————————

In all sincerity Garth…..the money supply obviously goes up or the price of RE, stuff, stocks etc would not.

Please tell us HOW the money supply goes up then?

#91 Inglorious Investor on 02.18.13 at 12:08 am

I can understand why money managers deride gold. It does not generate an income, only holding costs. Therefore, it does not contribute to ‘alpha.’ Fair enough, from their perspective.

But while gold bugs often vociferously exalt the virtues of the yellow metal, those who deride gold are often even more vehement in their ridicule of it. I wonder why.

In some ways it’s similar to the Romans’ persecution of the Christians. Sure, the followers of Christus may have been annoying sometimes, but who did they hurt, really? What threat did they represent?

Why are central banks, such as the Bundesbank wanting to hold their own gold again? I mean, Russia has long-since stopped being a threat to Germany. Why ask for it back now? And why is the Fed taking so long to ship it back to the Fatherland?

What are gold’s detractors so afraid of? I mean, it’s only a ‘barbarous relic’, right?

#92 Patient in Richmond on 02.18.13 at 12:10 am

Went to a few open houses in Richmond today . Not busy at all , in one house i was the only person .Compared to last 2 years where people were running around this is a BIG change .

Went to 4 open houses and saw maybe 5 other people in total .

Realtors looked perplexed .

Concord Gardens ? i can only laugh at that , who in their right mind would even consider buying there ? But then again who is buying ? Really ?

#93 TEMPLE on 02.18.13 at 12:18 am

#58 Richard and Zeus on 02.17.13 at 10:15 pm

if you add up ALL the govt workers on the payroll……less than 15% of them are front line workers. Most are useless pencil pushers wasting money. I have had managers I know who are “ethical” tell me that personally.

You embarrass yourself. Made up percentages, hearsay and ideology. Try some actual facts next time and maybe you could have a shred of credibility.

TEMPLE

#94 Hurricane Sandy on 02.18.13 at 12:21 am

Over the last couple of weeks the Calgary Herald there has been editorials on the 25th anniversary of the Calgary Olympics in 1988. One day there was a comparison of prices of 10 items i.e. gas, food, family income, house prices. The two main items that I recall vividly was the family income and house prices. In 1988 the average house price in Calgary was 110,000 with family income of 45,000. Today in 2013 the average house price is 440,000 while the average household family income is 90,000. The math just does not work out in comparison; perhaps this explains how Albertans are one of the most debted provinces in Canada. Any downturn, – look out below is all I can say.

#95 TEMPLE on 02.18.13 at 12:22 am

#36 Shawn Allen on 02.17.13 at 8:34 pm
#44 Shawn Allen on 02.17.13 at 9:06 pm
#48 Shawn Allen on 02.17.13 at 9:27 pm

Investor’s Friend is back? How did he survive the banhammer? Does this mean that Devil’s Advocate might get to come back, too? Please say yes.

TEMPLE

#96 charles on 02.18.13 at 12:31 am

Regarding your analysis of the 12 month performance of the prcious metals market, please note that stacking is not about avarice or greed. It is a rejection of fraud, usury and deceit. Real inflation, economies now drowning in liquidity and banking ethics steeped in criminality is what stackng is about, not get rich quick schemes .
People measuring their savings in ounces are holdling the real thing. The 14 precent you quote for silver is paper price. The physical price is not as volatile as the theives printing paper bets you report on. If you can buy any physical for 14 percent less than a year ago back up the truck and load up.

#97 45north on 02.18.13 at 12:32 am

shawn allen: I saw a full size fridge on sale today for $500.

refrigerators used to be scarcer. I remember the man coming in the house with a block of ice that he put in the cooler

here’s an episode from The Waltons about refrigerators
http://www.youtube.com/watch?v=vX9Lgxnmrek

consumer appliances are now common place and cheap

#98 Wizar on 02.18.13 at 1:06 am

Interesting Post. I guess we all have an opinion but somehow, over long enough a period, these market segments move in the same direction. Short term – yes they may go in opposite directions.
Get your timing right and benefit from all segments.
Easier said than done.

#99 Red Deer Cave Man on 02.18.13 at 1:07 am

holy [email protected]#$ .youre so far ahead I didnt realize the above bar was yours. I could have felt pity but…nah!! one more vote G

#100 Nostradamus Le Mad Vlad on 02.18.13 at 1:09 am


“It’s a shifting of the financial tectonic plates most people will not even feel or realize until then end up like Vince. The days of houses inflating all on their own are over. But most people won’t get it. So we have a spectacle ahead.” — Speaking of tectonic plates, it appears we’re in a Financial Fukushima, but only a few will be able to ride the storm.

Most will be caught flat footed with their pants down, and these are the greater fools. Anyone with their eyes open, the info. on how to protect oneself has always been available.

Garth, out of interest, what is your take on this?
*
#231 Smoking Man on 02.16.13 at 11:29 pm — “Creativity, thinking on your feet, problem solving and taking risks is how to succeed.” — Agreed. Creative, spontaneous thinking, acting on the spur of the moment and knowing all possibilities exist is the best way to live.

Richard Branson was a mlnaire. at 16, broke at 18, a mlnaire. again at 20 but he learnt from his mistakes. One of his early coups was signing Mike Oldfield to a five year deal, and Tubular Bells, Hergest Ridge and Ommadawn came forth.

#278 Shawn Allen on 02.17.13 at 3:34 pm — “But Buffett took whatever advantages he was born with and worked with them.” — See response to SMan above.
*
Thought For The Day! (wrh.com) — “No nation ever taxed itself into prosperity.” — Ronald Reagan
*
Global Economy has seen better days; Bilateral Trade China and Russia stop using the US$; Blind Missed another bailout; Scandals Pity poor Spain. They have more liars and cheats in govt. than most; NAmerican Retail Apocalypse; Frozen Food Tycoon Makes plenty of dough selling it, but wouldn’t eat it; Goodwill Gold Rush Whether this is a social or financial thing is unclear at the moment; Naked Capitalism links; Spa↑ is rebalancing (not); Hostess selling its brands.
*
Pope Benny the Rat Whoowouldathunkedit? Pakistan This time, it’s US and SArabian sowing the seeds of discontent; Zilmax Why beef is becoming more like chicken; Turmeric and Medicine Cabinet in the kitchen; DOA Obomba’s new immigration plan; Magdalene Laundries FEMA camps in Ireland? dubya scammed the US into the Iraq war; 1:17 clip The majority of women don’t like being beaten up, and the movement is growing; Obomba’s depop. agenda; Missiles, not Meteors Good questions; The Exorcist The Vatican will certainly be cleansed on Feb. 28; Iran – China Navies co-operating; Decent Society Politicos certainly are not making life easy for citizens; The Shark Whisperer The lady either has a lotta guts or is nuts.
*
Death SMan and Nemesis, are you two up to something? Wait for the rest of us!

#101 Richard and Zeus on 02.18.13 at 1:50 am

Garth is a total psychic when it comes to RE. I mean that. I found this pathetic blog……put my house up for sale and sold it to the first person that came along with a really low bid. We met in the middle. It was still twice what I paid for it in 2009 so who cares.

However…….sorry…..just not seeing this stock market thing happening over the next 5 years.

Balanced portfolio? Of what? Its all paper? Mutuals – paper. Bonds – paper. Equities – paper. Prefereds – paper. Its ALL paper.

I don’t trust paper anymore. In 2014 I will start to vulture the RE market and my health care worker wife and I will rent to the wave of grey’s coming and I don’t mean in space ships and offer assisted living on top of rent in a nice little business.

But other than cash flow RE and CASH in the bank….what else is there that is not paper?

#102 Riding the Pine on 02.18.13 at 1:53 am

Hmmm, having hard time correlating Carney’s statement To your previous points (“Real wealth is built through innovation, and it’s gained through hard work. It’s not through some magical asset inflation.”)

A trend in upward markets can’t be what he’s talking about here. The “trend” up will be followed by a “trend” downward soon enough!

#103 Babblemaster on 02.18.13 at 2:11 am

“Real wealth is built through innovation, and it’s gained through hard work. It’s not through some magical asset inflation.” Carney

He should talk. He’s one of the ones responsible for this unsustainable inflation in housing prices. He’s also been printing money like crazy.

Yeah. He’s certainly demonstrated real innovation.

#104 Lost Soul on 02.18.13 at 2:27 am

Badger on 02.17.13 at 9:55 pm

Garth, the “Great Rotation” into stocks — and “Money-On-The-Sidelines” thesis is a myth. Greenspan even admits that the only reason equity markets are going up is the Fed’s printing — and they HOPE that fundamentals will catch up to the inflated value of the S&P 500…. If they’re wrong (and they so could be) — we’ll have much worse than 2008. This market is an EXPERIMENT. Do you want to invest in an EXPERIMENT? Trade it, sure — but invest? Madness.

Over 70% of S&P companies have earnings that beat expectations in Q4 and 66% surpassed sales projections. That only happens in a growing consumer economy. Next. — Garth

http://www.huffingtonpost.com/2013/02/15/walmart-sales-disaster_n_2696883.html

#105 kansai92 on 02.18.13 at 2:36 am

AWESOME. But do tell me… how the hell did you get a picture of Brad Lamb at a tattoo parlour?

#106 Devore on 02.18.13 at 2:37 am

#67 Basil Fawlty

So, did the central banks purchase the gold, or not? Whose fetish is this?

They also bought some toxic assets. And government bonds. … same difference, eh? With all that green toxic sludge sloshing around, someone should have superpowers by now.

#107 Dr. WAYNE's Doctor on 02.18.13 at 2:38 am

RE: #61 Dr. WAYNE on 02.17.13 at 10:26 pm

Dr. WAYNE, get back in there!
And once again: Who left the gate open?

P.S. The Greater Fool (84%, 2,366 Votes)

#108 Moldy on 02.18.13 at 2:40 am

Hey Garth,

If you win that hundred bucks in the web contest, I wonder if you may have to spruce up your website? Maybe one of the Amazons could take a new web course or something with that prize money.

I’m not being critical, I like your sites simplicity but has it been a while since you changed the look? Just thinking that award might put you in a new league.

But then again you could possibly have a revolt of us basement dwellers on your hands if too many people didn’t like any design changes that were made, and that could get ugly. Just a thought..

#109 new canadian on 02.18.13 at 2:44 am

Buying gold is long-run investment, not speculation. I am happy these days. Fake people in US are selling virtual paper gold and pushing prices down. Then I can accumulate further.
US Mint can’t find enough silver to make eagles but silver price does not move. That is how fake and manipulated the market is. FED is giving out free money to keep stocks pumped. Stock gains won’t mean anything when value of currency deteriorates.

#110 Richman Pooramanda on 02.18.13 at 2:48 am

#18, Hmmm so the big sale at Concord this weekend was a success?? I saw that same Girl Amanda there looking for a man to hug and kiss….

Lol it too was full of fakes

#111 Mike on 02.18.13 at 3:09 am

Wise Words for All Y’all

“There are two ways to be fooled. One is to believe what isn’t true; the other is to refuse to believe what is true.” –Soren Kierkegaard

#112 Dr. WAYNE's Doctor on 02.18.13 at 3:15 am

RE: #20 TurnerNation on 02.17.13 at 7:29 pm

“Of the other blogs in the poll, how many are so pathetic as to have people posting “first”? I suspect none.”

Garth, as a Host, has accepted all these “first” jokers to the party… and so should we. No reason to be rude. Acceptance is the key. Be happy.

#113 Buy? Curious? on 02.18.13 at 3:16 am

Have you seen The Globe and Mail this morning? There’s a couple of articles talking about the housing market going down like a fat kid in the deep end with one water wing. Sure they didn’t use those terms. They said things like “home price adjustment” or “buyers are choosing to wait on the sidelines”, but we all know what that means. The panic is about to begin! All the people that bought condos and McMansions are trapped! Bahahaha! Fools! Greater fools! Fools left holding the bag! Fools! Those stories that we in ‘Merica are going to happening here. Over the next few years, we’ll see who your friends are.

#114 Babblemaster on 02.18.13 at 3:18 am

#61 Dr. WAYNE

Looks like you may be a neophyte here. So … I’ll go easy on you. Your compulsion to get ‘first’, renders you a consummate, idiotic a$$hole for not stifling your desires and following the wishes of the venerable Mr. Turner, who also, by the way, categorizes you as a moronic a$$hole, but is much too refined to express so directly … I am not so hindered.

———————–

Consummate idiotic a-hole? He’s definitely childish and perhaps idiotic, but imho it’s a little harsh to label him consummately so. I’ve seen a lot worse on this blog.

Moronic a-hole? If Garth really felt that way, why would he bother to post these useless comments instead of deleting them? He’s supposed to be moderating.

Regardless, I’m also bothered by these useless and mindless “fursssst” comments, but I don’t think you’re helping the situation by lambasting them so. Some of these folks seem to enjoy baiting you. So, perhaps your highly critical comments are actually counterproductive in terms of reducing blog idiocy. Just saying.

#115 AprilNewwest on 02.18.13 at 3:22 am

#292 Shopper – The Candidate. Friday’s posting.Feb 15.
I wouldn’t believe the Real Estate people. Prices have already been dropping in Van. The Real Estate cartel won’t reveal what’s really going on and Carney is playing it down with his “10%”.

#116 Beach Girl on 02.18.13 at 3:42 am

#152 a prairie dawg on 02.16.13 at 12:54 pm

#60 Beach Girl

When are you going to discourse on why everyone is trying to buy everyones’ debt.

– — –

It’s all about market share.

With credit standards being so loose, for so many years now, every idiot with a pulse has taken on more debt than most of them can handle.

So when you get to the point we’re at now where 70% of Canadians own a home, and the average personal debt level has reached record breaking proportions, it’s hard to convince more NEW idiots to jump into the ‘deep end’ of the debt pool.

So they are all trying to steal existing idiots from their competition.

It’s also a very telling sign about where we are in the current credit market cycle.

The next few years should be pretty interesting.

___

Yes, you are a man of intellect. Hard to find. And Slippery thank you for the nice comments.

Like the pulse comment. But sweetness, I have no debt, why are these Buggers phoning me?

#117 Beach Girl on 02.18.13 at 3:46 am

Oh, the facial surgery went really well. Thanks for all your concern out there.

#118 Won’t end well — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 02.18.13 at 4:17 am

[…] via Won’t end well — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estat…. […]

#119 happy renter on 02.18.13 at 5:05 am

The Fed prints the money and the banks use it to buy up the bank stock shares in turn pushes up the market.Want to know where the markets are going use a chart for xlf, smh,iwm and spy.With 85 billion a month buying mortage backed securities the stock market is going to go up until other countries want out of this make believe charade and get out of the us dollar.Until then make a killing on this ponzi scheme.

#120 Ralph Cramdown on 02.18.13 at 6:28 am

“Japan and Venezuela have kicked off currency wars”

Have you analyzed this much? Countries devalue to boost their exports and decrease imports. Except that basically the only thing Venezuela exports is oil, which is priced in dollars and for which Venezuela will get the same amount no matter how much or how often they adjust their currency peg. Nobody outside Venezuela cares.

“So, did the central banks purchase the gold, or not?”

Are central banks historically savvy gold investors? Do they buy low and sell high? Should I follow their lead?

“Fundamentally we have only inflation to look forward to…how can it be otherwise when the increase in money supply is ramped up 15++% every year for the past 12 years.”

Have you got a timetable on when that inflation will be arriving? Because I’ve been hearing this song for about half a decade now. Everybody knows how much the central banks are printing. Bonds aren’t pricing inflation in. Doesn’t your theory say inflation should be raging by now? Why isn’t it?

#121 Ralph Cramdown on 02.18.13 at 6:42 am

A confession. My Telefonica shares just dropped 2% on, um, Venezuela’s devaluation. Happy trading, folks.

#122 Bob Copeland on 02.18.13 at 7:50 am

I feel like an American democrat. I voted for you twice.

#123 The American on 02.18.13 at 8:10 am

At #88: Timmy, you said, “Vancouver should get an award for the ugliest architecture in Canada.”

Ummmmmm, I would agree with you if you change your statement to real “all of North America.” Seriously, Vancouver is one busted looking place in consideration of its “architecture.” Sooooooooooooo dated looking.

#124 basement dweller on 02.18.13 at 8:44 am

Question – should I purchase etf’s that are hedged to the Canadian dollar?

#125 Ronaldo on 02.18.13 at 8:57 am

Smoking Man = Beach Girl = Slippery Multiple personalities and all with the same writing style…lol

#126 Good authority on 02.18.13 at 9:03 am

#99 Nostradamous Le Mad Vlad

“Whoowouldathunkedit?”
Sinead O’Connor was right all along.

Keep up your extraordinary posts!

#127 Ronaldo on 02.18.13 at 9:07 am

#100 Richard and Zeus =

”But other than cash flow RE and CASH in the bank….what else is there that is not paper?”

Silver Eagles

#128 HalifaxEd on 02.18.13 at 9:15 am

Despite attempts to whip up the froth while breathlessly panting about ship-building contracts and the economic opportunities that are (always) just around the corner, it appears the correction is well underway in NS:

http://www.thechronicleherald.ca/business/697377-data-ns-home-prices-sliding

“…the average home price in the province fell 3.1 per cent from the same three-month period the previous year.”

“Sales volumes also plummeted 20.9 per cent provincewide…”

And it appears the traditionally desirable South Shore has been the hardest hit, with prices down 17.5 per cent from 2011.

#129 maxx on 02.18.13 at 9:18 am

The jar lady most definitely has a solid place in the world and does huge amounts of good. This is where the world needs to start BEFORE coming to the land of the blog dawgs. It was a tough one, but TGF won out.

Garth and Gail completely corner the market in terms of financial common sense.

#130 claudius emperor on 02.18.13 at 9:18 am

# Inglorious Investor
What are gold’s detractors so afraid of? I mean, it’s only a ‘barbarous relic’, right?
——————————————————–
Not according to Alan Greenspan in his 1966 publication on the topic, google it.

You have posted more than 12 times in the last few hours. Give it a rest. We get it. — Garth

#131 claudius emperor on 02.18.13 at 9:23 am

# 119 Ralph Crampdown
Have you got a timetable on when that inflation will be arriving? Because I’ve been hearing this song for about half a decade now. Everybody knows how much the central banks are printing. Bonds aren’t pricing inflation in. Doesn’t your theory say inflation should be raging by now? Why isn’t it?
——————————–

CPI seems significantly understated. This is what is being reported as inflation.

There is actually some very serious inflation on food and gas, energy, drugs and tuitions.

Bonds? I thought only central banks buy bonds in countries with heavy printing. And government regulated bodies.

#132 claudius emperor on 02.18.13 at 9:38 am

You have posted more than 12 times in the last few hours. Give it a rest. We get it. — Garth
——————————-
I know you do, but as half of my messages were not posted (seems deemed inappropriate) I had to find the corect form to work around the filters here.
Otherwise I am not a big poster, I only post on certain topics.

#133 fancy_pants on 02.18.13 at 9:40 am

as long as currency wars remain with the race for nations to devalue their $ , this will be the norm… except the gold falling. That one is back asswards.

#134 jess on 02.18.13 at 10:00 am

perhaps mr Carney was directing his comment at bankers bonuses

comparing like : like it “modest”

The chairman of the Royal Bank of Scotland on Monday described the pay of the bailed out bank’s chief executive Stephen Hester as “modest”,
http://www.guardian.co.uk/business/stephen-hester

but in relation to this letter from a ambulance medic
A banker’s millions won’t save a life
The Guardian, Tuesday 12 February 2013 20.11 GMT

#135 ballingsford on 02.18.13 at 10:16 am

Potatoes and Jar people gaining? That’s hilarious! They aren’t even close. I had trouble posting my link the other day, but I was able to it today without any trouble.

#136 Lead Paint on 02.18.13 at 10:20 am

I voted for you Garth. Twice. I feel cheap and dirty.

Did I mention I’m also running for Pontiff? — Garth

#137 jess on 02.18.13 at 10:22 am

Under the European Union’s freedom of movement laws

migrant backlash- benefit tourism and the dream providers?

European Union’s freedom of movement laws

http://www.dailymail.co.uk/news/article-2280294/The-mafia-bosses-wait-flood-Britain-beggars-While-politicians-dither-new-wave-immigration-Eastern-Europe-ruthless-gangmasters-rubbing-hands-glee.html

=

Freedom of Information requests show that 90 per cent of severance agreements between health trusts and doctors have gagging clauses. They stop frontline staff revealing their concerns about patient safety and hospital standards. Health Secretary Jeremy Hunt says he will write to all health trusts, urging them to drop the clauses or face ‘the consequences’ if they don’t…

An investigation revealed that at least 170 hospital doctors in England and Wales had been handed gagging orders backed up by taxpayer-funded payoffs of millions of pounds when they quit. The doctors had signed severance deals with 71 NHS trusts. Fifty-five of the 64 contracts supplied by trusts – 90 per cent – had gagging clauses. Mr Parker, a laparoscopy and colorectal surgeon who has recently retired, said this approach had failed and that tough legal powers were needed to stop whistleblowers being ‘prosecuted or persecuted’.

Read more: http://www.dailymail.co.uk/news/article-2280244/Now-gag-doctors-nurses-Hundreds-prevented-exposing-poor-care-hospitals-Stalinist-rules.html#ixzz2LGDbbQcs
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Read more: http://www.dailymail.co.uk/news/article-2280244/Now-gag-doctors-nurses-Hundreds-prevented-exposing-poor-care-hospitals-Stalinist-rules.html#ixzz2LGDI7lA1
Follow us: @MailOnline on Twitter | DailyMail on Facebook

#138 ballingsford on 02.18.13 at 10:23 am

One question from a previous post you made about RESP’s.

If my son becomes a rock star and doesn’t need the RESP, why should I transfer it to a RRSP.

Let me use this example to see if I understand it correctly. Assume I contributed $10,000. Feds gave me $2,000, so now it’s worth $12,000.

Son doesn’t need the RESP when he’s older.

Do I pay the gov’t back the $2,000?

Can I put the $10,000 in a TFSA if I have room? (I’m assuming I don’t pay any taxes or anything on the $10,000 amount.)

Do I pay tax on the gains or interest that the RESP made and keep the rest?

Repay the grant. Keep your contributions. Roll tax-free gains into an RRSP if you have the room. If not, they’re taxable. In that case, borrow money from billionaire kid. — Garth

#139 Bottoms_Up on 02.18.13 at 10:44 am

You rock Gartho, you’ve currently 85% of the total vote.

And I have email addresses for the other 15%. They are doomed. — Garth

#140 AK on 02.18.13 at 10:45 am

‘Inevitable’ Web Gambling Could Boost Casino Profits

Do any of you believe that the US will ever approve online gaming?

http://news.investors.com/business/021813-644827-las-vegas-sands-mgm-wynn-part-of-online-gaming-revolution.htm?ven=yahoocp,yahoo

#141 Steven Rowlandson on 02.18.13 at 10:51 am

“So we have a spectacle ahead. This won’t end well.”
Damned right it won’t end well Garth. All those ten and fifteen dollar an hour workers that should be buying a house and starting a family won’t be. The boomers and their fellow cultists might snag a few suckers but for the most part they will be left holding the bag and die a financial death of a thousand cuts. Fifty to sixty dollars an hour is minimum wage for buying a house and living in Canada. If you are not getting that you don’t live in Canada. At best you are faking it and going with out.

#142 ballingsford on 02.18.13 at 10:52 am

#136 Lead Paint on 02.18.13 at 10:20 am

I voted for you Garth. Twice. I feel cheap and dirty.

Did I mention I’m also running for Pontiff? — Garth
*********************
Garth, all the best for the Pontiff position, but on the outside chance you don’t get it, I hope you submitted your application and resume for Mark Carney’s job!!!

If you haven’t submitted it yet, include the poll results in your cover letter.

#143 afraidit allmightend on 02.18.13 at 11:12 am

Shawn Allen…how can government workers create wealth when all they do is leach off the taxpayer….real wealth entails the creation of capital…and exchange of goods for services….service for goods….government does none of that….they take..they spend..the capital is evaporated…..plus the fact the civic workers pay zero income tax….effectively wiping out even thier own false perception of being part of the economic cycle…..the DB pension strategy has all the paid money going back to the individual. These ideas about civic workers supporting their communities is just union propaganda to trick the uneducated with obfuscation and misdirection. Ipso Facto the government as it organized is a is a net drag on the people.

Sure….Garth is going to say the streetlamps are going to go dark and the zombies will emerge…children will go uneducated and the sky will fall…..what crap-o-la…..we can replace every civil service in days with a structural reform of our guest worker program and open hiring calls for regular Canadians who want the jobs at market rates. There is 50% unemployment among people under 30….does anyone think there are no responsible people in the population who will gladly do these jobs for less?

What we have is a continuation of false propaganda…we saw decades of boards and TV ads proclaiming one parties ideology…the party in power today hasn’t given the citizen any credit either and keeps using taxpayers dollars to spew out their own ideological nonsense….this is what the problem is…ignorance of the facts among a majority of Canadians.

Yes, leaches: Soldiers, paramedics, teachers, doctors, coast guard, nurses, border patrol, food inspectors, fire fighters, search-and-rescue techs, nuclear regulators, public health, cops. Fire ’em all and give the jobs to unemployed youth. You are brilliant. — Garth

#144 Myth Buster on 02.18.13 at 11:12 am

Prices in GTA are going up…MORON

#145 M I K E in Ajax on 02.18.13 at 11:15 am

Garth

What do you think of this analysis plz?

http://hussmanfunds.com/wmc/wmc130204.htm

He has a consistent track record. Always wrong. And he’s a salesguy. — Garth

#146 Moldy on 02.18.13 at 11:33 am

While the “Furrsstt!!” posters are obsessively refreshing their screens waiting for the daily posting maybe they could vote for Garth (Obsessively if you wish) to win him that hundred bucks.

#147 Ralph Cramdown on 02.18.13 at 11:38 am

I can’t speak for why others dislike ‘bugs so much. For me, they’re like the old guy on the street corner with the sign saying “The End is NIGH,” the guy who buys a behind-the-dugout ticket to the ballgame just so he can hold up a “John 3:16” sign on TV, or the Westboro Baptist Church feebs. They’re the consummate Eeyores. They don’t add much useful to the discussion because, to many of them, every asset class is rigged, there’s conspiracies everywhere, all will turn to dust… Once a discussion gets infected with ’em, it’s like the John Belushi Cheeseburger skit.

#148 HogtownIndebted on 02.18.13 at 11:47 am

#129 maxx re: blog votes

I’ll have to disagree with you on the jar lady. That schtick is all borrowed from others who have done it better. She has no financial credentials or even advanced education on her resume that I have seen, and neither does she have any credentials or experience as the ‘life coach’ she purports to be. Her own example is less than compelling.

Her shows are currently out of production with little on offer for the future, and her website offers an excuse about why she never does follow-ups with guests (i.e. to see if any of her platitudes actually work).

Being on Canadian cable tv is no guarantee that you actually are making $, btw. Even a book that is a Canadian “bestseller” is also a pretty subjective thing (see BookNet for a discussion of this) Used to be thought that 5,000-8,000 copies made you a Cdn bestseller; today it could be as simple as being on one newspaper’s bestseller list one week. It’s no guarantee of income to the author, or profit to the publisher to be called a ‘bestseller’ these days.

She can currently be heard on late night radio one night a week, in what I imagine is some kind of contra deal and not a real income generating job. She lives in the godforsaken 905 commuter oblivion even though all her work is in Toronto. I can’t imagine a successful and monied person would choose to do that if they had better choices. I hope for her sake she is not living paycheque to paycheque like those she often so meanly criticizes on her re-runs.

The jar lady probably needs to get a real job; mostly she seems to be working so desperately to build a brand based on so many recycled ideas other have done better.

Financial stuff like that is as bad as those non-informational articles on Yahoo. Nothing original there. Garth, on the other hand, at least offers some gutsy and informed counter-propaganda.

And I only use a jar during a Lady Gaga ticket line-up. — Garth

#149 The Prophet Elijah on 02.18.13 at 11:48 am

My good friend putin from russia keeps stackin gold, but garth wont let me post that

Yes, such an enlightened leader. — Garth

#150 Inglorious Investor on 02.18.13 at 12:07 pm

Governments do not create wealth.

But they can and should facilitate the creation of wealth by the private sector via infrastructure, the rule of law, security, research, etc.

Governments should not, as a general rule, get involved in the markets except to establish the laws and regulations by which the markets are intended to function. And those rules should not change in order to help special interests, or goose the economy. This always causes distortions, false signals, and unintended consequences.

Generally speaking, the less government does outside of its core functions the better.

Government should be “small” and efficient. Unnecessarily large and inefficient governments drain wealth, threaten freedoms and distort the economy.

Government representatives should never be allowed to make politics a life-long career. The danger of this is that representatives can become detached from the real world; their interests can become detached from the interests of the people they are supposed to serve, because working in government has the tendency to isolate people from the larger reality.

As just a very tiny example of what can happen when governments become irresponsible, we get politicians who can say such idiotic statement as, “But we have to pass the bill so that you can find out what’s in it….” –Nancy Pelosi on the passing of “Obamacare.”

And when government gets too arrogant they start selling our resources to the highest bidder and enact legislation that threatens one of our most precious resources, such as the Harper government’s recent gutting of the Navigable Waters Protection Act.

Government can be a blessing. But it too easily can turn into a curse. As so many peoples throughout history have discovered time and time and time again.

#151 Charlie on 02.18.13 at 12:11 pm

I don’t understand how people can be bearish on Canadian real estate but bullish on the US. If housing here is in trouble because of excessive price elevation due to low interest rates, speculation & over indebtedness, why would they not also rate the US on the same merits? If stimulus is not pumping the US system over what it would otherwise be, then why have it? Even with record low interest rates that should have any economy roaring ahead, last quarter the US shrank. GDP would have had a sharper retraction if it was not for the lower than actual inflation in the calculation. Show me 500K good jobs a month and I’ll believe in a recovery. Jobs = revenue and wealth; without them, it’s not going to happen.

The US corrected 32%. We have just started. How hard is that to figure out? — Garth

#152 Uwinsome on 02.18.13 at 12:17 pm

This Financial Post financial makeover sounds good, except it’s missing one element. What happens if their property values fall and they become illiquid? Better sell QUICK!

http://business.financialpost.com/2013/02/11/high-income-couple-has-to-deal-with-some-real-estate-headaches/

#153 Ralph Cramdown on 02.18.13 at 12:18 pm

I’m with maxx. You don’t need a finance degree or relevant experience to tell people “earn more, spend less, pay off the high rate debt.” A lot of people need to hear that message, over and over again, with examples they can relate to. It’s positively a public service compared to most of the finance related stuff on TV. And that Jamaican accent!

#154 rob on 02.18.13 at 12:18 pm

ANOTHER (THOUGHTS!)

[…] In this modern world, the current value of every asset is formed by a relationship of gold/currencies/oil. This cross relationship is the “very basis of our modern world banking system”!

Through this basis, all currencies are given value as the local government treasuries hold US$ as reserves. The US$ is given backing as it’s government is guaranteed, that all crude oil, worldwide, will be settled in dollars. An oil reserve backing, if you will. And, the “value” that the “future supply of “currency traded “oil” imparts to the world economy, is guaranteed by an “INTERBANK paper gold MARKET” that values “physical bullion” in the Thousands!

I’ll let Another explain:

But, how can this be, you ask? It is done, “right before your eyes” and we see it not! I ask you, if you have one ounce of gold, and sell it on the market for $300, it is worth $300, yes? Now, what if CB hold one ounce of gold, and sell it twenty times, that one ounce is now worth $6,000, no? The difference between you and CB? The persons that hold “interbank” IOU for gold, value it at the multiple of leases/sales made against reserves. This leverage, it is held for performance on bank part. The BIS, it force performance, on any economy! You ask Korea about gold, yes?

This is why oil can take a small amount of physical gold out of world supply, at current “freely traded”, “managed prices”, and hold it at a many times valuation. That is what gives this “new world gold market” much value in trade at high levels.

You see, “physical gold is of much greater value than public traders can move it for”! In your world, this cannot be, but it is, and will show for all to see in your time.

Golds current price in the interbank world is 28,000 per toz

#155 lawboy on 02.18.13 at 12:19 pm

@22 jake

your friend hasn’t bought anything – he’s committed to buy at a point in the future. when the deal actually closes (maybe six months to one year after the currest estimates), if he needs financing, he’ll have to enter the market and obtain it at prevailing rates, and with existng govt and industry rules and regs.

he better think about unloading that contract asap if he doesn’t think he can come up with the 20% or whatever the min dp now is for investment properties.

#156 Stickler on 02.18.13 at 12:22 pm

Central Banks huh…how about replacing the term “printing money” with “digitizing money”?

Like this…

Digitizing of units creates a different result in the markets. Since there is no real ‘printing’ today, the new money units are NOT getting to the consumers to SPEND.

All this ‘digitizing’ or creation of money units via the computer merely creates new liquidity in the System (without creating any real ‘price’ inflation).

There is ‘no’ velocity (via credit/loan creation) today as borrowers are not borrowing and lenders are not lending. Also, all this new QE liquidity tends to increase the accounts of the large TBTF institutions who then invest these funds in ‘safe’ assets (which do not help our economy grow). GDP is not growing in ‘real’ terms.

#157 Herb on 02.18.13 at 12:26 pm

#143 afraidit allmightend,

is that you, Truth Hammerer, flogging your old sour grapes under a new label?

#158 rosie "moving forward" on 02.18.13 at 12:26 pm

# 137

The daily Mail is good for a laugh, at best. To quote it for hard news is pointless. Moving forward, always consider your source.

#159 Uwinsome on 02.18.13 at 12:27 pm

Trump Tower Vancouver. Good idea!

http://www.cbc.ca/news/canada/british-columbia/story/2013/02/15/bc-trump-tower-vancouver.html

#160 Stickler on 02.18.13 at 12:27 pm

@ #71 Fortunate Fool on 02.17.13 at 11:01 pm
>> Good one!

#161 Taco Bell on 02.18.13 at 12:37 pm

Garth and gang, here an update on the Willowdale McMansion:

http://www.realtor.ca/propertyDetails.aspx?propertyId=12812235&PidKey=603901303

This “investor” has again lowered the price to $1,698,000

Sep-12 C2457853 88 OTONABEE AVE $1,988,888
Nov-12 C2517537 88 OTONABEE AVE $1,988,888 0.0%
Dec-12 C2517537 88 OTONABEE AVE $1,888,888 -5.0%
Jan-13 C2528940 88 OTONABEE AVE $1,798,000 -9.6%
Feb 18 C2553067 88 OTONABEE AVE $1,698,000

Funny part is, the realtor is the chinese broker who said this a while ago:

“I tell you, the appreciation is better than Apple (stock),” joked Thom, whose smiling face — cellphone pressed up to his ear — is plastered on signs throughout North York. “I don’t think it’s the end.”

http://toronto.ctvnews.ca/what-s-driving-up-house-prices-in-north-toronto-1.782319

So, the rock star Real Estate broker cannot sell quickly a Corn flakes McMansion in Willowdale. This only means one thing: No HAM, No Chinese greater fools anymore in this part of the woods.

#162 Mike on 02.18.13 at 12:52 pm

Thank you for the link, there are many good sites I found that I did not know about before.

Also, I know you advocate a balanced portfolio over paying off one’s mortgage, which may be wise, but this is just a risk/reward trade off. So while you can definitely earn more than 3% (which you’d receive from paying your mortgage) on any other investment, you would certainly have to accept more risk to get it. I don’t argue whether its worth the risk, but the fact is a guaranteed 3% after-tax return would be better than a more risky long-term bond that provides 2% before taxes.

Pay attention. There is infinitely arguably risk in owning a house in Vancouver or Edmonton, Montreal, Halifax or Brampton than possessing preferred shares in a major Canadian bank. — Garth

#163 furst on 02.18.13 at 1:10 pm

#24 Smoking Man on 02.17.13 at 7:45 pm
My hero worshipers know that if I ever caught them worshipping me.
___________________________________________
Face it Smoking Man, you’ve got to work through some things in your life :). To say you have worshipers is an extreme stretch of the imagination to all save maybe those too hopped up on some wonder drug to discern reality from hallucinations.
But I digress, the only one person who may be your follower would be Dr. Wayne but I wouldn’t announce that publicly or be proud of it. In the meantime, enjoy the ladies of the larger variety with ripped nylons.

#164 Bottoms_Up on 02.18.13 at 1:12 pm

#10 jwkimba on 02.17.13 at 6:16 pm
—————————————-
You can actually make the case to buy in certain cities.

I think Ottawa is one of them.

High prices yes, but also very high rents.

If I could rent a $499,000 place for $1500/mo I would rent it the rest of my life.

In Ottawa rent for a place like that would run ~$2500/mo.

$1500/mo rent in Ottawa gets you a 2 or 3 bedroom townhouse in the burbs (which you can buy for ~$250-280,000).

#165 Pr on 02.18.13 at 1:24 pm

If you are a Canadian in a search for a good, usa realestate,deal, you may have to wait a will, or at least until the american gouvernement fix this litle gun ban law. 300 Sheriffs told the government : NO you will not take the guns from the American people. If those guys dont come to a agreement: Won’t end well.

PS: house hunting may have 2 sense.

#166 PERPLEXED on 02.18.13 at 1:36 pm

LOL – YOU MIGHT GET 100 BUCKS FOR WINNING. PLEASE USE IT SARCASTICALLY.

#167 Reasonfirst on 02.18.13 at 1:50 pm

#18 Mike Stewart on 02.17.13 at 7:25 pm

LOL

#168 Grim Reaper/Crypt Speculator on 02.18.13 at 1:57 pm

Yes, leaches: Soldiers, paramedics, teachers, doctors, coast guard, nurses, border patrol, food inspectors, fire fighters, search-and-rescue techs, nuclear regulators, public health, cops. Fire ‘em all and give the jobs to unemployed youth. You are brilliant. — Garth

======

Soldiers ? Yeah, those talibans are at our shores. Review imperialism

Teachers? Public schooling was a socialist model imported from Britain. More into PC and cultural marxixm, aka good little “global citizens” and wimps.

Doctors….Big Pharma salesmen

Food Inspectors: Made in China…no lookee in a packagee.

Border Patrol: LOL if you want to get into the country you can…..simply exist for revenue extortion and ot compete with CIA drug running

Fire Fighters: Overpaid Playgirl model wannabees. 90% have a and job, depriving others of a first job.

Search and rescue: Sick of seeing morons not obey signs and venture out of bounds… lobotomize them after rescue

Coast Guard? Sell yer boat.

Cops….maybe test donuts for food safety.

You are an idiot. — Garth

#169 Beach Girl on 02.18.13 at 2:07 pm

Will read most of this ???. But, when the Pope throws in towel, things are bad. Laughing. I am Beach Girl, not Smokin Man or Slippery, stop. Already.

#170 jess on 02.18.13 at 2:11 pm

… a water drop hollows a stone…..

cuiusvis hominis est errare, nullius nisi insipientis in errore perseverare

silence WAS consent

#171 Stew on 02.18.13 at 2:20 pm

As Bespoke Investments points out, Berkshire has far underperformed gold since the turn of the century and not by a small margin:

“Buffett certainly has a point. An ounce of gold 12 years ago is still an ounce of gold today. But isn’t the same thing true of stock in Berkshire Hathaway (BRK/A)? Given the fact that BRK/A does not pay a dividend, no matter how much a holder ‘fondles’ or looks at their holdings, one share of BRK/A stock purchased twelve years ago is still one share today. Sure, you can sell it for more now than you bought it then, but the same is true of gold. In fact, your gain on gold is considerably more than your gain would be on BRK/A. Looking at the performance of the two assets since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold’s gain has been nearly four times the return of BKR/A (466% vs 120%).”

#172 Ralph Cramdown on 02.18.13 at 2:21 pm

Ah, Smoking Man, you were doing so well with your online persona.

But playing the slots?!? Completely shattered my suspension of disbelief. ‘The Machine,’ indeed!

#173 LazyJason on 02.18.13 at 2:23 pm

#162 Mike

Also, I know you advocate a balanced portfolio over paying off one’s mortgage, which may be wise, but this is just a risk/reward trade off. So while you can definitely earn more than 3% (which you’d receive from paying your mortgage) on any other investment, you would certainly have to accept more risk to get it. I don’t argue whether its worth the risk, but the fact is a guaranteed 3% after-tax return would be better than a more risky long-term bond that provides 2% before taxes.

Someone please correct me if my math is wrong on this but here’s how I see it:

For every $100 paid toward a mortgage at 3%, $97 will go toward principal and $3 to pay the interest. Yet $100 into an investment that pays you 3% will get you a $3 return.

So the $100 either gets you $97 or $103. That’s a 6% swing. Why do it?

Obviously you have never heard of an amortizations schedule. — Garth

#174 John S on 02.18.13 at 2:35 pm

A Secret Neat Trick

Vote from home and vote from your office (when your boss is not around..ofcourse)

Make your vote count..twice!

#175 StocksRHot2013 on 02.18.13 at 2:44 pm

Real estate is toast for the next 3-5 years…. Anyone who bought 2012 is dead money… S&P 1500 and Dow 15000 end of year…massive gains so far this year and will keep coming….. Buy tech…. BlackBerry will rock in the USA…. Great phones the Z10 and Q10…. Americans love new gadgets….. Also buy Zyngastock …. Major rush to online gambling…. States need the money bad…… Thank me in a year folks!
http://mobile.nytimes.com/2013/02/18/technology/tech-industry-sets-its-sights-on-gambling.xml

#176 Shawn Allen on 02.18.13 at 2:51 pm

Stew at 171 compared Berkshire to Gold since the year 2000.

Presumably this is because the world started with the stock peak of 2000? For evermore we will measure stock returns against that one peak?

Stew, Berkshire is up just over 1 million percent from 1965 to today. (From under $15 to $150,000, that’s 10,000 fold, one million percent).

Stew, gold went from about $35 to about $1850 (or whatever the current price is) in the same period. That’s 53 fold or 5,300%. Gold is eating Buffett’s dust big time.

Stew, a share of Berkshire in 1965 was a small share of a textile company. Today each same share represents assets worth about 600,000% more in book value.

Stew, I told this Board already, the winning way of life is to learn from Buffett and other winners and to copy him, not to doubt his obvious success.

#177 Seven Stars and Orion on 02.18.13 at 2:52 pm

#164 Bottoms_Up on 02.18.13 at 1:12 pm

I rent a modest 3bdrm semi in Hintonburg for 1400, which would likely fetch north of 4k if the hipsters caught wind of it.

#178 Rabbit-One on 02.18.13 at 2:55 pm

What Garth is saying about not aggressively paying down the mortgage is all about asset allocation.

Instead of all cash available goes towards fixed assets, allocate to your liquid assets. Simple.

Who owns million dollars house (although with big debts) feeling wealthy, don’t mind putting more cash into fixed assets. feeling more wealthy.

Houseless, feeling poor although they are making good wage, no or close to none debts.

I also found many BC home owners give a incredible credit towards their real estate agent.
They treated them as good as great investment advisors who made them secured wealth.

Although real estate agents have very limited exclusive information (in old days, MLS info was on their agent’s book only), not regulated.

#179 Innovation on 02.18.13 at 3:04 pm

“Real wealth is built through innovation, and it’s gained through hard work. It’s not through some magical asset inflation.”

Love that quote…

#180 Dwilly on 02.18.13 at 3:26 pm

This site poses a weird conundrum for me. Generally, I have found there exists some correlation between the quality of the material posted and the quality of the comments thereafter. Post sophisticated content, and you get intelligent, engaged readers & comments. Post junk, and you get the same.

And then there’s this site. Economics, finance, generally sophisticated concepts and material (and okay, the odd bit of comic relief) – but whew, scroll to the comments section and it’s like someone left the gate to the looney bin wide open! What gives? Garth, I’m curious of this is just an internet thing, or do you find yourself in real life approached by nutbars w/ unusually high frequency? Might wanna start carrying or something.

#181 Ralph Cramdown on 02.18.13 at 3:26 pm

#171 Stew — “As Bespoke Investments points out, Berkshire has far underperformed gold since the turn of the century and not by a small margin”

What’s significant about the turn of the century that you’d use it as a starting point? Gold is timeless, right? And inflation ever-present? We went through some serious inflation in the ’70s, so that should be more to gold’s advantage. So let’s compare Berkshire’s performance to gold’s from 1971 on (I don’t need to tell you why I picked that date, do I?). At the end of 1971, BRK.A was $72, so it has increased 2083x to gold’s 46x.

Even a simple consumer staples company like George Weston has substantially outperformed gold since 1971. Ask me how I know.

Gold is DEAD MONEY.

#182 Mike on 02.18.13 at 3:48 pm

“Pay attention. There is infinitely arguably risk in owning a house in Vancouver or Edmonton, Montreal, Halifax or Brampton than possessing preferred shares in a major Canadian bank. — Garth”

I’m not advocating purchasing a house, but asset depreciation will occur regardless of the rate of paying off one’s mortgage. Given one has a mortgage, and has no intention to sell, there will be no net benefit in paying off the mortgage when the house appreciates over when it depreciates. the only reduction in risk one achieves by having the minimum amount invested in their house is if they were able to declare bankruptcy, which you can’t.

#183 smartalox on 02.18.13 at 3:58 pm

In addition to creating wealth through innovation, there’s a case to be made for wealth creation via manufacturing, where the sum of the parts is worth more than the individual components. For example, a fully assembled tractor is worth more than a set of tractor parts.

There are also people who add value by reducing losses, or increasing revenue. The question then becomes, does your work result in a net increase in value, for the people who pay your wages? For most service sector employees, I’d wager that yes, they do, though some workers may be less effective at adding value than others, and some have to work harder to compensate for inefficiencies and losses that are built into the work by others.

#184 Fortunate Fool on 02.18.13 at 3:59 pm

Over 70% of S&P companies have earnings that beat expectations in Q4 and 66% surpassed sales projections. That only happens in a growing consumer economy. Next. — Garth

It looks like, at least in the eyes of Wal Mart executives, the consumer economy is not growing, and may even be shrinking. Could it be that the financial markets and the real economy are getting more and more disconnected (or decorellated as some would say)?

“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
(…)
Murray’s comments about February sales follow disappointing results from January, a month that Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, said he was relieved to see end
(…)
Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”

A bit of skepticism regarding the current performance of the stock market in general would go a long way to prevent anyone from doing costly mistakes.

Signs that the fundamentals of the economy are pretty weak are all over the place, but you’re not even acknowledging them. This remains the greatest mystery of this blog for me, in what is otherwise a source of decent financial advice (diversification, asset allocation, etc.).

http://www.bloomberg.com/news/2013-02-15/wal-mart-executives-sweat-slow-february-start-in-e-mails.html

#185 ozy -voted on 02.18.13 at 4:08 pm

Voted, I appreciate a different voice (even not on perfect course) in kanatian brainwashed post-colonial system

#186 Frank le skank on 02.18.13 at 4:08 pm

#91 Inglorious Investor on 02.18.13 at 12:08 am
The followers of Christus preached equality for all, glorified the poor while condeming the rich. This ideology was a potential threat to Roman power so they had every reason to be worried. As it turned out, they eventually took over Rome, terrorized the known world for centuries and continue to have a lot of influence on a global scale.

I don’t think gold bugs will ever rule the world however their gloom and doom profecies are extreme and could influence people into making big mistakes.

#187 neo on 02.18.13 at 4:16 pm

At #175StocksRHot2013

You work for Goldman Sachs?

#188 Ralph Cramdown on 02.18.13 at 4:24 pm

#184 Fortunate Fool — Signs that the fundamentals of the economy are pretty weak are all over the place

I’ll acknowledge them. And I anticipate that Canadian housing starts are going to go down markedly, dragging this country into a recession. An ugly consumer debt deleveraging recession similar to the US one, save that corporate balance sheets here will be in better shape and our trading partners will be doing comparatively better. So my Canadian portfolio is heavy on exporters and light on consumer discretionary and finance, heavy on sustainable cash flow and light on growth. But I’m an optimist — I think Germany is going to eventually pony up and help Greece and Spain, the US will continue its gradual, bumpy expansion, the Republicans will pull their arm out of the running garburator of sequester after not too long. Another poster here said “Show me 500K good jobs a month and I’ll believe in a recovery.” Well, you don’t make much money in the stock market by waiting for those numbers to invest — by that time, Mr. Market is already starting to anticipate the next recession.

http://research.stlouisfed.org/fred2/series/PAYEMS?cid=32305

#189 mortgagebrokeron on 02.18.13 at 4:26 pm

I rent for $1200/month just outside of ancaster ON in the country.

this house is “worth” $400000. If I were to buy put down 20% ($80000) and carry a $320000 mortgage its 1500 plus/month plus property tax 400 / month. Plus fixups and improvement $300 / month….

cost of housing would be $2200 / month.

I have tfsa’s rrsp’s and cash invested in some balanced portfolio’s.

Thanks Garth for confirming what i thought all along.

stay liquid my friends!!

#190 Herb on 02.18.13 at 4:30 pm

Gold is DEAD MONEY.

That’s our quote of the day, Ralph Cramdown!

#191 TurnerNation on 02.18.13 at 4:31 pm

Whistler Commerical.

This was at 1.9 mill, now at 1.8 mill.
Watch it sink.

It’s empty, the last few tenants couldn’t make it so why would you?
10 years of continual tax hikes there until last year.

http://www.icx.ca/propertyDetails.aspx?propertyId=12294090&PidKey=1675161114

#192 Buy? Curious? on 02.18.13 at 4:36 pm

Garth, why don’t you run for liberal leader against Stevie H and the PC crew? I don’t think the Liberal leadership convention will be any type of obstacle. You’ve got got an astronaught and a space cadet fighting for the top job. Before that, you had a brainiac who lived outside the country for 25 years hold the position and before him, some guy who lived in France for most of his adult life try to run for office. Besides this poll, has anyone from your inner circle advised you to run again for office? You’ve got the looks (Oh, have you got the looks!) You’ve got the brains! And Gawddamnit Garth, you’ve got the followers! Time to start thinking of bigger things, my man.

I’d donate the maximum amount legally allowed then encourage my Harem of MILF’s to do the same.

http://www.youtube.com/watch?v=fSlTGjeFkz4

#193 Rob in TO on 02.18.13 at 4:48 pm

What are your favourite Canadian personal finance blogs?

The Greater Fool (86%, 2,821 Votes)

As of 3:45 PM EST

No Contest – heheh

#194 Rob in TO on 02.18.13 at 5:00 pm

Oh, by the way, I voted for you on the day it was first posted – ONCE – no need to cheat. This blog (pathetic?) is where it’s at.

I went to lunch today with a few friends, topics ranged from politics to religion (no nasty arguements, nice surprise) to a little about a lot of things. Main topic talked about was RE. There was some disagreement there, no big surprise. Some of them are ‘house rich’ and cash poor, getting any of them to admit it is another thing, smug idiots that they are. It is a good thing, nevertheless, people are talking, just wish the MSM would just do some honest reporting, but then, they would be taken off the payroll of the powers that be.

Good afternoon everyone.

#195 Dr. WAYNE on 02.18.13 at 5:07 pm

#114 Babblemaster on 02.18.13 at 3:18 am

#61 Dr. WAYNE

Regardless, I’m also bothered by these useless and mindless “fursssst” comments, but I don’t think you’re helping the situation by lambasting them so. Some of these folks seem to enjoy baiting you. So, perhaps your highly critical comments are actually counterproductive in terms of reducing blog idiocy. Just saying.

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

Yes, perhaps I would agree with you IF we were dealing with people who could actually multitask in a washroom without seeking help. However, as you undoubtedly have noted, many contributors here appear intellectually challenged and, in my ‘professional’ opinion, require some form of intervention and/or counseling. Consequently, continual/regular negative ‘reinforcement’ may overtake the primordial mammalian instinct to succeed regardless of relevance of the act in question … it’s something like training a Rhesus monkey … although much more difficult.

#196 Dr. WAYNE on 02.18.13 at 5:09 pm

#168 Grim Reaper/Crypt Speculator on 02.18.13 at 1:57 pm

You are an idiot. — Garth

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

I rest my case …

#197 mel in victoria on 02.18.13 at 5:57 pm

#190 HERB 02.18.13 at 4:30 pm
Gold is DEAD MONEY.

That’s our quote of the day, Ralph Cramdown!

Ya, let’s put a stake through gold’s heart and be done with the damn thing once and for all!!

#198 Mic D'angelo on 02.18.13 at 6:17 pm

To David #88 i was just giving an example of maxing out a person’s annual TFSA. Surely, if someone is serious about saving and investing and can live within their means the financial outcome is much greater. I read somewhere that the average household income is $73,000 a year in Canada. You said to save half of this amount but this is for most people difficult.

A couple who puts their maximum RRSP’s of $73,000 would be $13,140 and in their income tax bracket it would get them about a $4,000 back in annual income tax refunds. This means that they really need to save $9,140 annually as a household. Also, they both put the maximum $5,500 TFSA’s so a combined $11,000 contributions. They take the total RRSP,TFSA contributions($13,140+$11,000)=$24,140 and invest them in provincial strips at 3.90% for 35 years from 30 to 65 years old it would be worth $1,742,682.65.

Remember this is assuming no wage increases for 35 years and interest rates don’t rise to a normal interest rate environment of 5.00%. The $1,742,682.65 at 3.90% would spin off $67,964.62 in income per year. If it was at 5.00% it would spin off $87,134.13 of income per year. The net after tax household income is about $61,000 a year taking the RRSP refund into account. So $24,140/$61,000=39.57% savings rate of net household income not gross household income. This leaves $36,860 per year to pay all living expenses.

This is why you have to watch debts from piling up, pay cash and don’t buy a big house you can’t afford. Most people today can’t do basic math calculations or don’t want to believe the numbers and say it will work out. I never imagined my family could accumulate the assets I have. It took hard work,discipline, and being an adult buying things when we had the money and not going into debt and raising all my expenses,taxes from a large house purchase I knew was too big and unaffordable.

Even if someone can achieve 65% of this financial amount it would still be great. I said last time, don’t be scared by numbers.Just stick to a financial plan as best you can.

#199 Inglorious Investor on 02.18.13 at 6:52 pm

#186 Frank le skank on 02.18.13 at 4:08 pm

DELETED

#200 Century Park Renter on 02.18.13 at 8:06 pm

I voted, only because you’ve saved me a fortune Garth and a lot of heartache…and well you’ve given me something good to read during lunch!

#201 Willy2 on 02.18.13 at 10:36 pm

Well, then there’s a disconnect between the financial stocks and the real estate world. Not only the homeowners are going to get hit big time but the banks will get hit too. Banks will be forced to write off mortgage loans. Highly deflationary. Because deflation equals the destruction of credit & debt.

Wrong. High-ratio mortgages are CMHC-insured. — Garth

#202 Steven Rowlandson on 02.18.13 at 11:00 pm

In the grand scheme of things that drop in the price of gold and silver doesn’t matter. What matters is having the goods. Also the market price is fake because it is manipulated and that is just the way it is. Just get the ounces or grams and squirrel them away.
If you wait by the river long enough you will see the body of your enemy float by. It is always good to be ready to take advantage of situations like that.

#203 Susan on 02.18.13 at 11:04 pm

Hello Garth

I haven’t made a 6% gain the past year on the market. what am I doing wrong?

Since you support not paying off the mortgage as a good option can you be more specific and tell us what you are holding?

#204 Derky on 02.19.13 at 12:55 am

So paper assests are worth more and real assests are worth less? There is your first clue the system is broken. The only reason paper assets are ‘worth more’ is that the American dollar is ‘worth less’ AKA worthless. When fictional paper is worth more than hard assests you know the system is screwed.

#205 spaceman on 02.19.13 at 2:33 pm

#23 SurreyRenter

Sure…

10,000 is a good start, you now have 2 years of renting to get to 25,000. in that time the full blown correction (which has started in the lower mainland) will be in full swing, and possibly a recession or partial melt down will have occured. Interest rates will still be low… and RE prices will most likely have corrected the most.

(15-20%)

Your 10,000 should be in a balanced portfolio, 60% Equity, split between US, and CAN. And 40% Bonds. Balance this fund every 3-4 months. you should be able to achieve a 7-8% return on investment, and minimize risk.

By then, you may also have obtained a raise, or a new job prospect that pays higher, or (god forbid) be married and have a second income to help.

cheeers

#206 Money News | Canadian Performer's Money on 02.20.13 at 5:14 am

[…] Turner’s latest blog lists some interesting numbers for the past […]