Unfair

kiss1

What does it say when paying your rent with a credit card goes mainstream? Lots, obviously. None of it good.

RentMoola has so far signed up landlords with 100,000 apartments, and it looks like thousands more will follow. Of course, they love it. No bounced cheques. No late payments. Just the sweet sound of money gushing into your PayPal. For tenants, there’s the usual cost – fat monthly fees on unpaid balances – plus a 2.75% premium collected by the Moola boys. (They take debit, too. A program to harvest organs is also in development.)

Using revolving credit to pay for shelter is a hugely bad idea – something that shouldn’t even need pointing out. It sucks the last shreds of financial discipline out of people who routinely live beyond their means or just suck at budgeting. When you don’t actually need to have eighteen hundred bucks in your bank account on the first, you probably won’t. Now you can Visa the rent, then make minimum monthly payments on an escalating balance. Yikes. Imagine where that could lead.

The average Canadian now has $3,500 in credit card debt. Half never pay off the balance. Together we have almost $80 billion owing on plastic. And the average bank card interest on unpaid balances is 19.99%.

Meanwhile household debt levels, as you know, have never been higher. There was a time last year the growth in the debt faltered a little, but it’s full throttle again. Household debt here is about 165% of income, while in the US it’s a little over 100%, after peaking at 130% back during the real estate bubble. In Britain, it’s about 150%. In fact in the UK the average total of all debts combined – including mortgages – is just over $90,000 (C$). That won’t buy you a portapotty in east end Toronto.

Simply put, tons of people have no money. They have debt. They also have lots of stuff, like houses.

It’s all getting worse, too. Just look at the Canary District.

This is what developers are calling slabs of new condos being erected on industrial port-area lands at the foot of a big, dirty ditch which used to be a river near the parking lot called the Don Valley Expressway. Here a few thousand athletes will bunk down during the Pan Am Games in 2015, then the units will be hosed off and sold off to hipsters without money.

It’s called MyHome Program, which is being supported by the province of Ontario, and designed to turn renters into massively indebted condo owners in a city where 55,000 new units now under development all but promise declining future values. What could go wrong?

So, to buy a condo all you need is a thousand bucks. Period. Just 0.5% or less of the purchase price. Then you add another $1,000 a month until – maybe in a year or so – you achieve a 5% downpayment on your 405 square foot box. At that point you apply for a 10% downpayment loan from the Province of Ontario, and you receive title – plus 95% financing. And monthly condo fees. And property tax.

To qualify, borrowers must be renters who are buying their first principal residence. Income can’t exceed $82,600 (apparently the new poverty line in Toronto), and you need to pass a breathing test.

Meanwhile in Quebec, 10,000 people within days have signed a petition asking the government there to subsidize home ownership because young buyers have no money and trying to save up 5% is a bitch. Says the industry group behind a spate of slick ads, “Access to property is an issue and downpayments are a problem.”

Yup, that’s true. When you have no money, it’s amazing how many problems crop up. But should the government fix it for you by making debt even easier?

You can see where all of this is headed. Rent on credit cards, extreme housing leverage, supplementary loans – add it on to mounds of student debt and over a trillion in mortgages, and the future looks positively scary. Most of these debts take years to pay off, even decades. As we discussed yesterday, gone are the days when a growing economy and inflating values can make debt shrink. Today we’re closer to deflation, when incomes struggle, and loans bloat.

Hard to believe, but there was a time, kids, when people only bought what they could afford. Many of them used actual money. It was so unfair.

189 comments ↓

#1 Jay in LaSalle on 11.08.13 at 9:57 pm

My question amidst all of this debt insanity is, will the smart people with savings, investments and common sense be dragged down into the gutters with those people who don’t give a second thought to financial planning? If this ship sinks, aren’t we all going down with it?

#2 Soylent Green is People on 11.08.13 at 9:59 pm

I just looked at that website recently.

The advantage is that you get to collect points from your credit cards which off sets the cost of using your credit card and paying the fees.

But, I didn’t think of it from Garth’s scary angle… yoowza.

.

#3 SilverMeridian on 11.08.13 at 10:01 pm

SilverMeridian Greater Ottawa surReal Estate Update

http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

Ottawa Real Estate board published it’s “News Release” celebrating a 2 % sales increase in comparison with the same month last year. Ottawa is apparently “a steady, balanced market.” Here is an abstract:

“Ottawa, November 5, 2013 – Members of the Ottawa Real Estate Board sold 1,090 residential properties in October through the Board’s Multiple Listing Service® system, compared with 1,069 in October 2012, an increase of two per cent.”

What they usually “forget” to mention in the same “News Release” is a 10 % increase in active inventory.

http://creastats.crea.ca/otta/images/otta_chart03_lo-res.png

Same month last year there were approx. 6200 houses for sale in Ottawa, this year we are looking at the approx. 6800 active listings, which is almost twice as much as it was on the market the same month in 2009. If trend continues like that, soon half of the city is going to be for sale with no takers. So much for “a steady, balanced market.”

Speaking of stats revising. Here is an abstract from the official News Release for October 2012:

“Ottawa, November 5, 2012 – As the leaves continue to fall in Ottawa, we are seeing an increase in units sold, as well as an increase in average sale price. Members of the Ottawa Real Estate Board sold 1,073 residential properties in October through the Board’s Multiple Listing Service® system, compared with 1,059 in October 2011, an increase of 1.3 per cent.”

Did you notice the difference? It’s not huge, just 4 houses, but it proves that they are playing with numbers to get people excited. The real question is by how much did they beef up this month’s numbers so they could happily report a 2 % increase?

#4 Smartalox on 11.08.13 at 10:02 pm

Put my rent on my credit card? Where can I make my landlord sign up? I already pay my rent and credit cards in full every month, but all those points I’d collection would be a handsome payback every year!

#5 Dr. Wanker on 11.08.13 at 10:05 pm

Yes! put lots of rent on your credit card. My bank shares will pay even more rewards!

#6 Retired Boomer - WI on 11.08.13 at 10:06 pm

Who pays when the new “RESPONSIBLE” condo owners given a more or less free ride default? What happens when the economies of the world take one of their regular dumps, and jobs really dry up?
What happens when the aged relying on the government for at least a part of their retirement income, are told that their benefits will be shaved?
What happens to the workers, business owners, and the few relatively well off when that same government wants to goose up income / property / and sales taxes?
What happens when that pricey home loses value faster than a 2 year old car with 5 years of notes due?

Can’t happen you say. Stick around, and watch. The turn awaits…

While we teach a lot of crap in schools, where is the course on the dangers of consumer debt? Where are the courses -mandatory ones- telling the young how life is in our respective countries?

Here, we have done one po$$ poor job of really educating the young on the things that matter the most!!

Hope you have done better, but I can’t much statistical differences.

#7 X on 11.08.13 at 10:07 pm

Still disappointed that F sits on the sidelines while sheep are herded into more debt…the economy will need some of this RE debt repayment money to keep its glacial upwards momentum going.

Sadly man have yet to realize that when rates rise they have to sell and cough up money that they don’t have to close, or that they have a RE/mortgage prison sentence for 20+ more years….

#8 Inglorious Investor on 11.08.13 at 10:08 pm

#114 Poorgeoisie on 11.08.13 at 11:17 am
#138 NorthOf49 on 11.08.13 at 1:53 pm

The story of the professor’s experiment may be apocryphal, but the principle behind it is true.

I am fighting to attain greater control over my hard-earned money. Apparently so are the socialist dependants on this blog.

#9 Quebec on 11.08.13 at 10:08 pm

But it’s different in Quebec, everyone is entitled. So the west needs to cough up the down payments.

#10 TheCatFoodLady on 11.08.13 at 10:13 pm

OMG! I heard something about rent on credit card in passing earlier today & thought I was hearing a ‘funny things from the |Internet’ segment – either a report from The Onion or the Beaverton.

That it’s real is utterly appalling. Why? WHY would any sane person do this? Don’t tenants think the landlord will pass on the financing costs to tenants in the form of higher rent? Betcha some rent controlled building owning landlord will try, within the next few years, to justify an above guideline increase using that as an excuse. “Madam, I’m providing an added convenience, a service, an IMPROVEMENT, for my tenants.” And watch it get approved & pass into RTA, (Ontario rental legislation), case law.

Nobody here need to have the reasons why this is a dreadful idea enumerated & Garth has summed it up anyway.

As to ‘The Birdcage’ – the condos eventually offered for sale will be about as solid as bird homes, overpriced & the location…? Instead of being sold with a Beamer, maybe the sellers will offer Zodiacs.

#11 DaleFromCalgary on 11.08.13 at 10:16 pm

I’m old enough to remember when credit cards couldn’t be used in supermarkets.

To follow up from yesterday, price inflation is in fact the most dangerous type. Food, fuel, property taxes (Calgary council is talking 6.1% this year), and utilities all add up. They divert money away from discretionary spending. And, of course, house buying. They also divert money away from investments that financial advisors could earn a fee from.

#12 Toon Town Boomer on 11.08.13 at 10:17 pm

Hard to believe, but there was a time, kids, when people only bought what they could afford. Many of them used actual money. It was so unfair.

Ya, where are those days? I would give anything to go back to that time.

#13 Goldie on 11.08.13 at 10:18 pm

Slaves 4 Life!

#14 Yitzhak Rabin on 11.08.13 at 10:20 pm

This is all thanks to our debt-based monetary system. New money only comes into existence through credit (debt). We have only been off the gold standard since 1971 and it has been a horrific failure. Time to return to sound money.

http://research.stlouisfed.org/fred2/series/AMBSL?cid=124

http://research.stlouisfed.org/fred2/series/CPIAUCSL/

#15 Ronh on 11.08.13 at 10:22 pm

For the economy to grow you need more new debt.
Nothing can go wrong, (sarc).

#16 Babblemaster on 11.08.13 at 10:23 pm

For the time being, it all means even less downward pressure on RE prices.

#17 Patrick P. on 11.08.13 at 10:23 pm

We give younger people the option to pay via direct debit and access our great MoolaPerks program.

We certainly do not advocate credit card debt and many people do use credit responsibility. RentMoola simply provides a paperless and rewarding platform for making a payment easier, convenient and more rewarding

People ask us “why there is a service fee?” Well the main reason the property management industry hasn’t adopted credit card payments is due to their thin margins. A 3% to 5% credit card processing fee is simply not sustainable.

Be sure to check out our MoolaPerks and Rewards Maximizer! We have more awesome partners coming soon. You can also make one-time payments for your rent deposit etc. or set up recurring payments with RentMoola.

We also support Habitat for Humanity via our MoolaGood program :-)

We’re working hard to bring real value to each RentMoola transaction and watch out for some awesome announcements coming soon!

Patrick
RentMoola – Co-Founder & CEO

#18 Snowboid on 11.08.13 at 10:33 pm

#11 DaleFromCalgary on 11.08.13 at 10:16 pm…

Sadly I’m old enough to remember when credit cards didn’t exist – at least in 1960s Calgary.

I did eventually get a ‘Chargex’ card, but it was more of a novelty than anything else. The idea of leaving a balance (and paying interest) at the end of the month has been foreign to us for at least 20 years.

You are certainly correct that inflation may put a damper on ‘discretionary spending’ but then again, how many folks will forego food and fuel to keep the stainless and granite shiny.

#19 Inglorious Investor on 11.08.13 at 10:34 pm

MyHome. Dear Lord, another misguided, market distorting, debt-inflating, socialist experiment. What could possibly go wrong indeed? Well, perhaps it won’t be quite as wasteful as Toronto’s welfare system, where insiders there tell me that 90 percent of our tax dollars are basically just thrown away.

#20 East Van Cheapo on 11.08.13 at 10:38 pm

Good god! I’m not an economist or anything, but I can only imagine that easier access to debt for mortgages or rent will fuel this bubble more. As if housing in this country can stand to get any more expensive! Please tell me I’m an idiot and that I’m totally misunderstanding the implications.

#21 Bikini Bottom on 11.08.13 at 10:40 pm

Whatever. People are getting screwed no matter how you spin it. The savers can’t save enough to ever compete with the debt swallowers on homes. And the credit munchers just go batshit cray with the money that they don’t have.
Don’t mean to sound bitter, but I’ve spent the last five years living super frugally only to find out I’ve been priced out of the TO market. Sure, our starter home seemed like a palace at the time, but now we’re getting squeezed with kid número uno and a set of unexpected twins. Our mortgage is almost paid up in toto, but who cares? We can’t afford to move to a house in the city of the size we need. And we have two decent paying jobs.
Of course, if we were willing to take on the debt loads that other people seem to think is normal, we’d still be in the game. But we’re not those people.
I dunno. Maybe the whole city’s on crack. I’m starting to think that picking up the pipe might make our house look a mite better.

#22 CrackHead Conservative on 11.08.13 at 10:46 pm

Canada is being run by Crackservatives? You have the head of the conservative / crack head party Harper who has allowed CHMC to lend out $600,000,000,000.00 in sub-prime / liar loans to deadbeats. Would you consider Harper to be conservative with taxpayers money or CRACKED OUT on drugs like Conservative Rob Ford? Some Crackservatives will say what does $600,000,000,000.00 mean? It means Harper CONservatives has given the ok for CHMC to loan out $600 B I L L I O N dollars in sub-prime / liar loans to people who would not get approval for the same loan from the bank without the taxpayer backing of CHMC. Crackservatives lol when will they sober up?

#23 BallsofSteel on 11.08.13 at 10:47 pm

So where is this heading?
I have read this blog for a few years now and my take is the world over, it will not end well.
The stand-out to my mind is there will be only two types of people – the haves, and the have-nots.
The have-nots wont take their lot lying down.
Remember, all empires come to an end; some will fizzle out over centuries,some will go out with a bang.
Don’t kid yourselves that the ship wont hit the sand during your lifetime.
My guess is even SM will still be partying when the balloon goes up.

#24 Ralph Cramdown on 11.08.13 at 10:49 pm

#12 Toon Town Boomer — “Hard to believe, but there was a time, kids, when people only bought what they could afford.”

Ain’t never been. It would hardly be an exaggeration to say that writing was invented so people could write IOUs. All through recorded history is a thread of borrowing, lending, interest and debt.

#25 Shawn on 11.08.13 at 10:49 pm

THE MORE THINGS CHANGE…

There is more debt these days. Easier to get into debt.

But it’s always been around.

In fact I recently read from two sources that the original system, before money, was not barter it was credit!

It was not I’ll give you 2 pheasants for a rabbit.

It was I’m starving, I got nothing today or yesterday. Lend me two pheasants to feed my family and I will pay you back with three as soon as I catch some. High interest rates in those days, it would put pay-day loan stores to shame.

50 year ago we had finance companies charging high interest. Anyone remember Household Finance?

For a couple of hundred years at least there have been loan sharks (high interest plus REALLY tough collection methods) and there were pawn shops. Not as many now as credit cards and payday loans have the market now.

We have a friend of a friend here in Alberta who is a repossession man. Has been for decades. It still happens believe me.

Debt has always been used, and often by those least able to pay back. Thing is, it beats starving.

#26 Victor V on 11.08.13 at 10:50 pm

PRICE DROP #? – 80R Crescent Road – ROSEDALE

http://themashcanada.blogspot.ca/2013/11/price-drop-80r-crescent-road-rosedale.html

This 2+1 bedroom, 4 bathroom condo was first listed in March for $3.5 million!!!!

It was soooo overpriced.

It never sold and the price was dropped a few weeks later to $2,990,000.

Still way too high and the price was dropped again a few weeks after that to $2,590,000.

I suggested maybe $2,425,000.

But instead, they RAISED the price a few weeks after that….

To $2,690,000.

To no one’s surprise, it didn’t sell and the price was dropped….

To $2,590,000.

AGAIN, no sale and the price was dropped another time to $2,499,000.

Then 2 weeks later, the neighbour at 78 Crescent Road that had also been listed for ages came back on at the same price.

It was just a matter of time before one of them caved and dropped the price again.

And to my surprise, it was this house.

The new price for this condo is….

$2,399,000.

That’s the lowest price yet!!!!

#27 Inglorious Investor on 11.08.13 at 10:53 pm

Garth, you say that Canadians owe a combined $80 billion in credit card debt. According to The Canadian Press, total consumer credit debt reached $500 billion. I know you were referring specifically to “plastic” but that figure tells only part of the story. Not to mention the $1.1 trillion in mortgage debt.

#28 Godth on 11.08.13 at 10:56 pm

So you’re saying that, as a society, we’re a failure. Is this news?

#29 Jeremy on 11.08.13 at 10:59 pm

I pay for as many expenditures on credit card as possible. It doesn’t mean I carry a balance. I have automatic payment on my credit cards to ensure I never carry a balance. Credit card is the most convenient way to pay, and card transactions are automatically documented, plus you can collect points. Just don’t be dumb enough to carry a balance.

#30 Victor V on 11.08.13 at 10:59 pm

#17 Patrick P. on 11.08.13 at 10:23 pm

Any CEO who uses the word “awesome” twice in one post is unlikely to be taken seriously by anyone with half a brain.

You are going to profit off the debt misery of the financially illiterate. Simple. Don’t purport to be anything other than that.

PS – nice touch throwing in your charitable ‘partner’. You do-gooder you.

#31 Cici on 11.08.13 at 11:02 pm

Yup there was a time like that, and houses were priced commensurate with income. Because people had the brains to deal with basic financials, and wouldn’t pay a cent more than an asset such as a home was worth. Or did they? If I recall, monopoly money wasn’t even an option. Credit was not readily available most people, so they HAD to learn to survive on cash.

I admit, I spent a few years pretending that I had more money than I actually did, and worked hard, and I mean REALLY hard to pay it off, and I’m glad I did. The debt was under $10,000, but with the high-interest credit load, it took serious austerity and months upon months to pay it off. Now I have no credit card debt, am down to the last few months of student loans (will be paying off a year and a half early, which is no remarkable feat, but I’m proud anyways), have two years to go until the car’s paid off, and then I’m finally debt free!
If I can do it, you can do it, and so can your BIL, BBF and GF or BF.
For desperate cases of $10,000 and over in debt: Go to Gail Vaz-Oxlade’s site now and buck up!

#32 Cici on 11.08.13 at 11:08 pm

#1 Jay in LaSalle

Perso, I think that is a non-issue, and you should not let that eventuality put you off from saving now and forever. If the shit hits the fan and you lose your job, you’ll still be better off if you are debt free and have adequate savings to carry you through to better times, or at least the next job or business.

#33 TheCatFoodLady on 11.08.13 at 11:08 pm

I goofed – no cost to the landlord.

I will take exception to a few things said by Patrick – the cofounder of RentMoola. Most large landlords already provide a paperless, effortless system for rent payment – PAD. Some offer direct debit as well.

A cheap rent of $1000/month works out to an annual fee of $330 just so one can save the hour needed to set up PAD or write a year’s worth of post dated cheques.

But fools & their money are soon parted, I suppose.

#34 Quebec is Great on 11.08.13 at 11:08 pm

#19 Inglorious Investor

a study in the Dunning-Kruger effect

so yeah, just f*ck anybody that needs some financial assistance, which basically means about.. uh.. what 90% of all of us at sometime in our lives…

and so what if 90% is wasted… that means 10% of it is keeping kids fed and healthy enough to stay awake in school so the next generation of Canadians have a fair shot in life.

Your words are vile poison, and if you were serious then I urge you to broaden your inputs and get your head out of your butt.

#35 Cici on 11.08.13 at 11:11 pm

#2 Soylent Green is People

I doubt the points would offset the fees, because you have to SPEND more in the process to use up all of those “free” points.

And most of those points are redeemed for things that are wants and not needs, e.g. yearly vacations to exotic sun-filled destinations.

#36 gladiator on 11.08.13 at 11:13 pm

Now the Moola guys are the REAL Smoking Men! Good for them! The simple fact that many people are signing up for their service is proof that they hit Jackpot.
Good for them and I am very glad that this is a Canadian business. Regardless of the fact that yes, paying rent with credit is bad and stuff – I am happy that a lucrative idea was born in Canada, was implemented and took off.
The entrepreneurial spirit is what we all as a society need. Good for Moola guys!

#37 -=jwk=- on 11.08.13 at 11:14 pm

It is amazing the lengths we go through to NOT lower asset prices. The QC story is a good example of the craziness, prices can’t down, ever, so we need more creative finance options. I lived in the USA (L.A.) during their run up (which was the new normal, just before it burst) and the same kind of crazy things were happening there. It’s the last stage of denial.

My last condo flip had a ‘silent second’ mortgage. Basically you put up 5% cash down, a silent second loan gives you 15% and the main bank thinks you are putting 80% down so no insurance and lower rate for you! The 15% is zero payment for a year , maybe interest only, with a bubble payment in one year to pay it off. So you buy, wait 11 months, sell and walk way with 50-150k. no problem. (unless you cant sell. but that will NEVER happen! immigrants! lack of land for sfh, low interest rates,etc)

There was also the triple play – where you put you zero down, borrowed 5, borrowed 15 and your primary was 80%. Sometimes the first 5 was via government programs and give aways for the poor renters! Mortgage broker gets 3x commission.

Finally we had the infamous double closing: you do multiple loans that close the same day. Each loan was approved based on the same projected cash flow. You won’t be able to make the payments, but at 3% rate for 1 year who cares – you just sell one in a year or two and use the profit to pay off the other. (no fees to pay off mortgage in usa – pay as much as you want anytime, penalty free. refi anytime.). Double close was usually used to re-fi primary and buy a investment at the same time.

When we start playing these games because asset prices are too high, we are in real trouble….

#38 Son of Ponzi on 11.08.13 at 11:17 pm

Wake me up when I can by crack on my Credit Card.
RF

#39 Dre from Whistler on 11.08.13 at 11:18 pm

I think that the faith in humanity has been insulted by this article. Really we shouldn’t be blaming the government or some company. We should be looking to education to fix this. Do they even teach finance in schools these days? If they did, people might know that buying an over priced condo and financing 110% of it is a bad idea.

On RentMoola, Do you really think that landlords would really pay 3-5% for credit card acceptance? At 2.75% these guys must be doing some volume if they’re making any money.

As a landlord, there’s no way that I would ever pay credit card fees. As a small business owner, I inflate prices to cover the costs of the credit card fees (fact of life). I pay 5% for some cards… it’s a fact. Due to Rent controls, I can’t raise rents to cover the cost of acceptance.

Really…These guys are now allowing renters to buy time to pay. They could be going down the street to Cash Money and paying 40% per week to pay their rent!!! Plus, my buddy living in London got free cable with no contract…. for paying his rent.

As a landlord, it would help low income housing providers get their rent. Meaning, less evictions for people who get paid a few days late or who might have lost their job and are trying to find a new one.

…Think about it on the bright side.

#17 Patrick, is there a way to pay your condo fees through this? If not, there should be!

#40 Jeff in Victoria on 11.08.13 at 11:21 pm

Great, pay your rent with the credit card, before long the banks with be encouraging people to pay their mortgage payment with the credit card………but just think of all the points one will get!!!

#41 Cici on 11.08.13 at 11:27 pm

#21 Bikini Bottom

Awesome post, I laughed so hard I cried.

But your smart, you’ll figure it out. Sell the twins, or sell the starter home and invest the profits, using the interest to pay part of the rent on a city home? Hint, hint…I’d go for the second option if I were you.

#42 CalgaryRocks on 11.08.13 at 11:30 pm

Wow there are a lot of nerds on the RentMoola about page.

Another idiotic web site. If your tenants need to pay their rent with their CC AND incur a 2.75% extra fee rather than using a simple bill payment or cheque, how long before their CC is maxed and they stop paying all together.

#43 jan on 11.08.13 at 11:31 pm

This is the new reality of never ending debt growth.
Without it there would be a fall of a deflation cliff.
Of all people, I expected you sir to understand that.
Or is this to offensive to post for you mr.T.

#44 western observer on 11.08.13 at 11:33 pm

Brilliant idea – wish I thought of it.

Way to go RentMoola.

I do not know them and I am not being sarcastic.

#45 John in Mtl on 11.08.13 at 11:35 pm

… “Meanwhile in Quebec, 10,000 people within days have signed a petition asking the government there to subsidize home ownership because young buyers have no money and trying to save up 5% is a bitch. Says the industry group behind a spate of slick ads, “Access to property is an issue and downpayments are a problem.” …

The slides & stats on that website are mostly pure B.S. , deliberately misleading. Plus, when you get to the petition page, a small note on the bottom says “confidential but you may receive a follow-up email”.

I smell fishing and ensnaring future slaves.

John

#46 Condo Minion on 11.08.13 at 11:38 pm

Say, isn’t that guy with the moustache Smoking Man?

http://www.youtube.com/watch?v=mTzMf515t-w

I’ve never heard such idiotic comments before about political scandals and idiots as he put on this board yesterday.

Completely wrong and a complete moron you are, SM.

Leave.

#47 DC on 11.08.13 at 11:41 pm

I know a fair bit of people who have the money but would still pay for their rent (and everything else) with their credit cards. Most of these people had enough brains to get a job where I was working so they were semi smart at least. Anyways they had two reasons for their madness… 1) you get points/miles; and 2) you get a paper trail that you can look at sometime (or never).

They always thought I was weird whenever I bought lunch or coffee in cash.

#48 John in Mtl on 11.08.13 at 11:43 pm

Save for a home?

But I’ll have to give up my 100$ a month cell phone, my 200 channel satellite TV, my ultra hi-speed internet, my 5$ a day lattes, friday & saturday nights at the clubs, my 50$ t-shirts, my credit cards, the latest electronic pads, games and computers, and my new car. I’ll have to take the bus (eek!), eat at home (how lowly), and worse of all I’ll have to save money for my dream; I’ll have to sacrifice my entitlements as a modern human being. I can’t live that way, I’ll die! Waaaaa Waaa WAAAAAA Waaaa (cry, scream, kik) life is sooooo unfair.

John

#49 Dwide Schrude on 11.08.13 at 11:43 pm

I am [email protected] and Canadian finances reached a new low the day I had a customer come in and do a cash advance of their VISA to make their RRSP contribution. A little part of me died that day.

#50 Herb on 11.08.13 at 11:46 pm

#3 Silver Meridian,

nicely dug up. It sure is different in Ottawa.

#51 Exurban on 11.08.13 at 11:53 pm

Little-known facts about credit cards:

1. All you have to do to get a so-called discount credit card is ask for one. Phone up BMO MasterCard or whoever it is that is currently dinging you 19%, and ask for the cheapest simplest card, and they’ll switch you and your unpaid balance over to a discount card (with a name like Preferred Rate or such). You’ll still be paying something like 11.9%, but that’s majorly better than 19 or 20%.

2. The San Diego Chargers football team is named after a credit card. Yes, that team with the lightning bolts and electric blue uniforms. They were originally owned by hotel mogul Baron Hilton (that’s a first name, not a title, and yes Paris Hilton is a descendant). They wore powder blue uniforms because that was the color of Hilton Hotels and a of new Hilton credit card that Baron was flogging to upscale travelers.

3. Too late Garth. Agree with everything you say here, but this genie is not going back in the bottle. Young people will go on spending to their credit limit as long as they can. No words from you or me will dissuade them.

#52 Carpe Diem on 11.08.13 at 11:59 pm

#39 Dre from Whistler

I remember this somewhat cool economics teacher in 10th grade teaching us about up/down markets and about economics in general.

In CEGEP (college in Quebec), I remember economics courses saying the same thing.

AT McGill … pretty much the same but the professor was awesome! In Macro-economics, building schools & infrastructure is a good thing when times are bad. I sure see lots of that going around these days in Ottawa.

Its called Keynesian economics.

But that’s when governments get more debt to build a country.

What I’m seeing now is individuals getting in far too much debt to build a community and homes made of plastic with no local corner store or core. Just more homes made with sub-par material.

People are fools, they buy crap – obviously you can’t cure stupid!

#53 lets make things fair to everyone on 11.09.13 at 12:08 am

Yep, life is unfair, in Calgary too…so they are trying to make it better for everyone, starting with the kids:

http://ca.news.yahoo.com/blogs/dailybrew/calgary-school-ends-honour-roll-program-because-hurt-141943605.html

lets f%^$ the successful ones, or the responsible ones, so that everyone else can feel better.

just like lets f^%$ the savers, so everyone somehow owns a home, and feels beeter

life is unfair, but lets try to make it more fair

#54 Robert on 11.09.13 at 12:25 am

#12 Toon Town Boomer on 11.08.13 at 10:17 pm
Hard to believe, but there was a time, kids, when people only bought what they could afford. Many of them used actual money.
Well then Would this kind of advert ever get any takers in Vancouver. That would be the day…

#55 willworkforpickles on 11.09.13 at 12:43 am

Deflation will never affect the rising costs of essentials like food and clothing that are steadily inflating and will continue to do so. Deflation will steadily bring the price of assets down such as real estate and cars and everything else you paid too much for. We then enter a new era of Stagflation …..infinitely worse will/would be the conditions (dog eat dog) in a new era of stagflation now than any gone before – But you already knew that.

#56 T.O. Bubble Boy on 11.09.13 at 12:52 am

Louis CK on being broke:
http://www.youtube.com/watch?v=J0rSXjVuJVg

“You ever get so broke that the bank charges you money for not having enough money?”

#57 willworkforpickles on 11.09.13 at 12:53 am

I should also mention the rising cost of fuel , utilities , rent, and all the rest of the basics that deflation in a world of stagflation will not affect …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..but you already knew that.

#58 Inglorious Investor on 11.09.13 at 1:00 am

#34 Quebec is Great on 11.08.13 at 11:08 pm

How is it that you are able to comprehend the Dunning-Kruger effect, but you can’t understand words on a blog?

Where did I say f*ck anybody that needs financial assistance? What I said was, according to people I know at social services in TO, 90% of the money spent on ‘client’ benefits is wasted. How? you may ask. By doling out funds to people who are fully capable of working, but would rather suck on the public teat.

I never said money should not be given to people who really need it. You just assumed that. I will be the first to say we must support those individuals who, for whatever reason (e.g. disability, unemployment) cannot temporarily or permanently support themselves.

But there are far too many people who game the system (and yes, yes, I know that banks and corporations game the system–it’s wrong no matter who does it). Apparently you don’t care about that. Do you actually pay taxes or just sponge off the taxes paid by others in la belle province?

#59 T.O. Bubble Boy on 11.09.13 at 1:03 am

I just read through most of that “mission generations” site.

What a bunch of crap! It is essentially blaming the rest of Canada for Quebec’s lack of home ownership!

Gotta love the chart that shows the home ownership trend from 1991 to 2011 (chart #3)… if the % of Quebec residents owning homes went from 55.4% to 61.2% (2011 being 110.47% of 1991), and the rest of Canada went from 62.6% to 69.0% (2011 being 110.22% of 1991), that actually means Quebec is gaining FASTER than the rest of Canada.

If the stats show Quebec is gaining homeowners at basically the same rate as the rest of Canada (even slightly faster), why the hell is this program needed then?

#60 Wes Coas on 11.09.13 at 1:09 am

This generation is an embarrassment. First world war we had 16 year Olds faking their age to go and fight for the greater good. Today we have people petitioning the government to fix a problem that was created by interventionist policy in the first place. Entitlement. Handouts. How did we get here? Benjamin Franklin called in long ago. Many things change over time, but not human nature.

“When the people find that they can vote themselves money that will herald the end of the republic.”

― Benjamin Franklin

#61 Alberta Ed on 11.09.13 at 1:17 am

Amazing the lengths people will go to live in a concrete coffin.

#62 Bottoms_Up on 11.09.13 at 1:23 am

#3 SilverMeridian on 11.08.13 at 10:01 pm
———————————————-
The 4 house difference on 1000 is 0.4%, likely not due to manipulation. It’s possible those 4 sales fell through in some fashion (leading to lawsuits perhaps?).

#63 Bottoms_Up on 11.09.13 at 1:27 am

#47 DC on 11.08.13 at 11:41 pm
————————————–
If you pay cash you’re actually in effect spending 2-3% more than you should. Someone that is responsible with their credit card by paying it off monthly, yet uses it to purchase everything, gets cash back/rewards. You get nothing.

It’s a broken system, but in effect merchants have to raise prices to offset the cost of accepting credit cards, thus cash payers end up paying the brunt of these increases.

#64 DUI on Money Road on 11.09.13 at 1:41 am

#21 Bikini Bottom on 11.08.13 at 10:40 pm
————————————————
I feel for you. We got the same unexpected news (identical situation) about 2 yrs ago. But living in Ottawa was an affordable no-brainer to move to the burbs (4 bedroom mcmansion backing onto a park). I strongly suggest you consider relocating to a cheaper city. Perhaps even to somewhere in the USA.

#65 rp1 on 11.09.13 at 1:42 am

Obligatory SNL skit in case you haven’t seen it:

http://www.youtube.com/watch?v=PG_KuCc94JQ

#66 Tony on 11.09.13 at 2:05 am

Sounds like a good idea until you find out ninety percent of the renters were never approved for a credit card with even the minimum amount of a thousand dollars or whatever it is.

#67 JimmyAAA on 11.09.13 at 2:15 am

#19 Inglorious Investor on 11.08.13 at 10:34 pm
MyHome. Dear Lord, another misguided, market distorting, debt-inflating, socialist experiment. What could possibly go wrong indeed? Well, perhaps it won’t be quite as wasteful as Toronto’s welfare system, where insiders there tell me that 90 percent of our tax dollars are basically just thrown away.

====================================
Name your sources. Otherwise it just another piece of BS that you spout daily. Zero facts as usual.

#68 JimmyAAA on 11.09.13 at 2:24 am

#8 Inglorious Investor on 11.08.13 at 10:08 pm
#114 Poorgeoisie on 11.08.13 at 11:17 am
#138 NorthOf49 on 11.08.13 at 1:53 pm

The story of the professor’s experiment may be apocryphal, but the principle behind it is true.

I am fighting to attain greater control over my hard-earned money. Apparently so are the socialist dependants on this blog.
====================================

In what simple minded world do you operate? The professor example has ZERO reflection of the real world. NOTHING is so simple like that in the real world. People are complex irrational people. They would only react like the way described in a lab. NONE of them would act like that in the reality. As well, nowhere in society, do people all start from the same starting point. So again, the experiment is utter crap. Oh BTW – in cased you missed it – the professor example is really stupid. Anybody who is fan of it correlates highly with it.

#69 Freedom First on 11.09.13 at 2:28 am

Everything that a human being chooses in life that is bad/negative for his/her health and/or financial well being is making other people wealthier. Everything.

I enjoy a healthy lifestyle, diversified assets, cash, cash flow, balance in finances/life, liquidity in finances/choices, and 0$ debt. Keeps living life a pleasure and not a struggle. Also, my inner circle includes only like minded people. Negative living people are energy drainers/vampires. I avoid them, and/or if it is relatives or people I meet in business, I severely limit my time around them.

Also, I now do not put my personal thoughts/lifestyle in front of them in person, and you can understand why, just look at some of the comments/abuse that Garth is subject to. And those are just the comments/abuse that Garth can write on his blog without getting his blog banned. (Garth has shared with us however, that some people would do damage to every orifice on his body). Both the unethical profiteers of ignorance, and many of the people bent on their own financial suicide and beyond help, cannot stand being corrected. Makes them real angry.

#70 Investment Virgin on 11.09.13 at 2:32 am

Hi Garth, great post, as usual.

I’ve been taking your investment advice seriously with my pension (I get to self-manage it). I checked it today and my year-to-date return is 12.9%. Thanks for all the advice. I couldn’t have done it without you and your pathetic blog.

#71 Joe on 11.09.13 at 2:38 am

The scary part is that those few of us who don’t live beyond our means will have to foot the bill for this craze someday. We’ll simply be a minority that will have its money taken away by popular vote of a stupid and bankrupt majority…

#72 Bottoms_Up on 11.09.13 at 2:38 am

A new low for the MSM in Ottawa?

Headline: ‘Boomer children SET TO IMPACT housing market.’

Underneath Caption: “home ownership SHOULD start accelerating.”

1st paragraph article: “boomer children GEARING UP for home ownership”

Subsequent paragraph: “home ownership by boomer children CURRENTLY ON HOLD”

Garth, how is it that we go from people that are not buying houses to a headline that indicates they are imminently set to impact the housing market?

http://www.ottawacitizen.com/homes/Echo+boomers+impact+Ottawa+housing+market/9140239/story.html

#73 Bob on 11.09.13 at 3:09 am

Intereting, the Guangdong “businessmen” buying real estate at any price in order to launder their funds may be in trouble.

http://qz.com/143017/beijing-goes-hunting-for-overseas-real-estate-by-corrupt-officials/

#74 AngryMan127 on 11.09.13 at 3:10 am

TFSAs will be the last shelter from the fallout obviously.

Scary stuff Garth.

#75 Blobby on 11.09.13 at 4:29 am

I pay my rent via credit card.. I never spend beyond my means, and pay card off on time fully. Hell, actually, since being a student – i’ve never been in debt – EVER!

I pay by credit card to maximize points – pays for holidays/etc.

#76 :):( Ying Yang on 11.09.13 at 4:57 am

Smoking Man I just won $18,000 on slot here I’m Casino Niagara wish you where here a lot of free drinks for my friends!

#77 erlich on 11.09.13 at 5:03 am

Is it just me or what – why do ‘cheap’ houses in Vankong and Toronto look so hideous. Is it architects, builders or just my perspective??

#78 Blobby on 11.09.13 at 5:41 am

Maybe its because i was bought up in a poor household – where my parents taught me to value money and not spend more than i could afford.

.. But i really REALLY dont get this obsession with owning a home – to a point where people are lobbying government to HELP them get into debt and buy overpriced (lets face it) crap.

The fact this scheme is only available to people earning below 80k.. And that I earn far more than that – and still wouldnt risk buying in this market – worries the crap out of me.

But I talk to people – and they dont get it.. they seem to think that property ownership is a “Right” and that it “always goes up” and you’re “stupid not to own”. Try talking logic to those people, ends up with people hating you and in tears (i’ve found).

People are quick to blame HAM and foreign ownership.. I put the blame squarely at the feet of the idiots who are buying overpriced crap they cant afford.

#79 eddy on 11.09.13 at 6:53 am

rentmoola sounds great for landlords, very bad for tenants, who traditionally don’t pay when they have no money, yet have rights of occupancy. The Landlord Tenant Act is stacked in favor of the Tenant, even if they don’t pay. With rentmoola people with no money can maintain a good credit rating, while piling up debt.
People who have money and want ‘convenience’ just do
Automatic bank payments and an overdraft

#80 Devore on 11.09.13 at 7:50 am

If I could pay rent by CC, I’d be all over that, with 1% cashback. Of course, these guys setup a processing fee that is higher than that. Oh well.

The most amazing thing isn’t that people want to pay their rent with a credit card, but that there actually are landlords who are signing up for this. If your tenants are paying their rent on credit, maybe they shouldn’t be your tenants. Just a thought. I wonder what real, professional landlord and property manager blog dogs think of this apparent idiot scheme.

#81 willworkforpickles on 11.09.13 at 8:28 am

Who might be buying Canadian real estate after the bubble bursts and prices deflate. Americans? Canadians? Multi Billion Dollar Investment Funds?
Seems these major Investment Funds stateside are on a mission to own as many private dwellings as they can get their hands on, starting with all the existing foreclosures and then on to eventually buying and owning everything except the rich …and renting them back out to the middle classes. In this Orwellian nightmare there will be no more home ownership for the masses . Sellers taking reasonable offers from these entities in a falling market may become permanent renters in their own land if this epic transformation begins to snowball.
Would a number of Americans eventually head North to buy up some deflated real estate in Canada by then just to be homeowners again? Or may/will Canada too be eventually thrust into the same potential fate at the mercy of multi billion dollar investment funds in the years ahead coming in to a potential deflationary depression?

#82 detalumis on 11.09.13 at 8:53 am

You act incredulous but giving people huge incentives to buy housing is not new. I bought my first house in the early 80s when the housing market tanked and the feds and province gave you both a forgivable and an interest free loan to use as your down-payment.

The subdivision I live in, in south Oakville, was built in the late 1950s and early 60s and was populated originally by young couples who were bribed to come here from Toronto to create the original urban sprawl, provided with cheap long term 25 year NHA government loans with minimal down-payments by John Diefenbaker. This practice of bribing people to buy housing has been going on since at least 1958.

I’m sure the 78 year olds who bought a house here they couldn’t afford in 1960, bribed by the feds, will be thumbing their noses at the young people today pretending they were oh so responsible. Nobody has been responsible for at least two generations including the silent generation.

#83 Bob Loblaw on 11.09.13 at 9:16 am

Been carrying a CTC Financial credit card for years. Eight years ago wanted a 150K mortgage for five years. Offered it to CTC Financial if they’d let me make bi-weeklies with my CTC credit card. Guy thought it was brilliant and the suits upstairs agreed, but still nixed the plan. Still think about the points I could have had…..free gas for five years.

#84 Johnny D on 11.09.13 at 9:20 am

Garth, you keep referring to deflation as a possible problem. Why? Looks like inflation is most likely with all the changes that are taking place. I didn’t believe it before but now it seems that there is a “new economy” and it’s what people want and none of the old rules apply.

#85 Ralph Cramdown on 11.09.13 at 9:33 am

#55 willworkforpickles — “Deflation will never affect the rising costs of essentials like food and clothing that are steadily inflating and will continue to do so. […] I should also mention the rising cost of fuel , utilities , rent, and all the rest of the basics that deflation in a world of stagflation will not affect “

Clothing prices have been going down for years, so much so that a not insignificant fraction of it has become essentially disposable — the middle class buys it fully expecting to wear it only one season while it is a la mode.

Gasoline is the same price as it was a year ago, so cheaper in real terms.

My rent’s going up by less than one percent next year, and includes utilities. I’m in the process of switching my cable TV and internet provider, after which I’ll get more for less.

I don’t know where you derive your theory that essentials can’t or won’t drop in price. “Can’t pay, won’t pay” is still a valid economic theory and corporations are still going to maximize revenue and profit, even if that means cutting prices and margins. And here’s a riddle for you: If the number of food stamp recipients in the US has gone from 27m to 47m in six years, is the average household spending more of its income from labour on food, or less?

#86 maxx on 11.09.13 at 9:47 am

It’s sad to see so many people piddling away their youth by accumulating debt rather than building wealth. These are the magical years, where a bit of sacrifice pays huge benefits such as being the proud owner of your life’s time….getting up in the morning and unhurriedly savouring your coffee whilst watching the rest of the world head off to work and having to adhere to someone else’s clock.
Time is the ultimate luxury.

#87 Ralph Cramdown on 11.09.13 at 9:55 am

#80 Devore — “The most amazing thing isn’t that people want to pay their rent with a credit card, but that there actually are landlords who are signing up for this. If your tenants are paying their rent on credit, maybe they shouldn’t be your tenants.”

Every landlord wants the quiet tenants with the great credit and great income, but most of those people bought homes. Landlords are stuck with the bottom 30%. Once the tenant is moved in and paying rent, it’s probably better to collect the whole amount every 1st and let the CC company worry about default (especially if the tenant is eating the fee!) than to decide whether to accept partial or late payment, or initiate eviction proceedings.

I find odd that the CC issuers would accept this. Aren’t payers of rent by CC likely to be either “deadbeats” who pay their statement in full every month and generate low profits, or people on their way to default and BK, rather than the profitable middle that carries a balance?

But I don’t know exactly how the CC industry works in this respect. It’s possible that a payment processor can sign up any business as long as it isn’t illegal, and card issuers are then obligated to accept charges from that business. The payment processor figures most charges will be on other issuers’ cards, or maybe doesn’t issue cards itself at all. So maybe its an optimization issue because of how the industry is set up. Or maybe I’m wrong and even people who pay rent on credit are profitable in aggregate. They already allow “cash-like transactions” such as purchase of casino chips…

#88 Squatter on 11.09.13 at 10:03 am

#71 Joe on 11.09.13 at 2:38 am
The scary part is that those few of us who don’t live beyond our means will have to foot the bill for this craze someday. We’ll simply be a minority that will have its money taken away by popular vote of a stupid and bankrupt majority…
————————————————
As Garth said, with a balanced portfolio you should be fine, no matter what the future is.

#89 Stickler on 11.09.13 at 10:07 am

@ #48 John in Mtl on 11.08.13 at 11:43 pm

Save for a home?

But I’ll have to give up my 100$ a month cell phone, my 200 channel satellite TV, my ultra hi-speed internet, my 5$ a day lattes, friday & saturday nights at the clubs, my 50$ t-shirts, my credit cards, the latest electronic pads, games and computers, and my new car. I’ll have to take the bus (eek!), eat at home (how lowly), and worse of all I’ll have to save money for my dream; I’ll have to sacrifice my entitlements as a modern human being. I can’t live that way, I’ll die! Waaaaa Waaa WAAAAAA Waaaa (cry, scream, kik) life is sooooo unfair.

John
————————————-

Good one!

I overheard two old dudes talking at the grocery store the other day just marveling at the young people today…”they all have big trucks, houses, etc”

…they think its all going wrong, they remember a time when people saved money…imagine that.

#90 Julia on 11.09.13 at 10:24 am

#78 Blobby on 11.09.13 at 5:41 am
Exactly. It’s that simple. The whole country is in denial.

#91 Mr. Frugal on 11.09.13 at 10:27 am

Seems pretty odd that Canadians smugly joke about our American cousins living in trailer parks. No we’re far too sophisticated to live in a $30K trailer – we spend $500K to live in a concrete box!!!

#92 Inglorious Investor on 11.09.13 at 10:36 am

#67 JimmyAAA on 11.09.13 at 2:15 am

“Name your sources.”

Name my sources?! This info was disclosed in confidence among trusted friends. You expect me to actually publish the names and put their jobs in jeopardy? Honestly, are you really that dense?

And BTW, have you never heard of the concept of the anonymous source? It’s a fairly basic concept that is one of the cornerstones of journalism. My info comes from people with many years of experience in the field. If you want independent corroboration, do the research yourself. Not that you would ever bother, because who cares about wasting tax payer money, right?

#93 TNT on 11.09.13 at 10:53 am

Couldn’t paying rent on credit decouple the ties of charging rent based on income?

The historical charts pair income to rent where credit distorted the mortgage line.

#94 Ralph Cramdown on 11.09.13 at 11:15 am

#92 Inglorious Investor

The way anonymous-source journalism works is that the journalist and the news organization that backs him both have to have reputations to put on the line. A pseudonym on a blog reporting anonymous hearsay is just a bullshit artist, whether what he says is true or not.

#95 JimmyAAA on 11.09.13 at 11:24 am

#92 Inglorious Investor on 11.09.13 at 10:36 am
#67 JimmyAAA on 11.09.13 at 2:15 am

“Name your sources.”

Name my sources?! This info was disclosed in confidence among trusted friends. You expect me to actually publish the names and put their jobs in jeopardy? Honestly, are you really that dense?

And BTW, have you never heard of the concept of the anonymous source? It’s a fairly basic concept that is one of the cornerstones of journalism. My info comes from people with many years of experience in the field. If you want independent corroboration, do the research yourself. Not that you would ever bother, because who cares about wasting tax payer money, right?

====================================
Oh you are a journalist now. Wow I see the resemblance. You look like a guy who writes inflammatory comments in a blog with nothing to back it up. And when you need a fact you don’t have, you use anonymous sources. Are you writing an expose on fraud in the system now? Or do you just have an axe to grind.

hahahahahahahahahahhahahahahaha

It so funny on so many levels. If you honestly think that 90% of social welfare benefits in Toronto are wasted, my gut feeling is you and your “sources” have a pretty broad definition of waste. Most likely its along the lines – anything that I do not agree with is waste.

Good God, if you don’t think I know that there is waste in the system, you are wrong. But you solution of starving a system to get out the rot is stupid and doesn’t work. Mostly it just kills everything and then eventually, you need twice as much to solve the social ills that you just caused.

Go back to Scarborough and your stupid suburban, semi- tea party mentality that is getting our fucking country down this bankrupt path.

#96 jess on 11.09.13 at 11:26 am

… in foreclosure does the credit card company own the title?
===========
private equity and rental income streams ‘foreclosed rent-backed securities”

http://blogs.reuters.com/breakingviews/2012/07/26/securitizing-rent-has-more-problems-than-promise/

http://www.nakedcapitalism.com/2012/08/new-real-estate-train-wreck-coming-securitized-rentals.html

#97 TurnerNation on 11.09.13 at 11:32 am

Another massive Cityplace-eqsue kando compound planned in Toronto. Sequestered on a sliver between two railway lines. Cut off, an archipelago – but for a lone bridge. A bleak post-industrial ‘living zone’. Factories and jobs be dammed.

Local ‘lefty’ councillor never met a kando he didn’t like.
Heights go uppa uppa UPPA!

http://garrisonpoint.ca/get-the-story/

#98 JimmyAAA on 11.09.13 at 11:36 am

4 years ago before I bought my house here in Edmonton. I rented a townhouse managed by Midwest Property Management (I don’t which REIT they may manage for) and I paid my monthly rent on a CC. I guess they were just happy to not have to worry about monthly cash flow and were willing to eat the merchant costs. i was a big fan of course because hey free points. My co – worker was rather jealous.

#99 Spiltbongwater on 11.09.13 at 11:45 am

I never believed in climate change until I saw how that typhoon hit the Philippines yesterday. If all of us would simply hang our clothes on a line, we could all help prevent this sort of severe climate change related weather. I am going to throw dryer in the garbage, and start washing my dishes by hand now.

#100 willworkforpickles on 11.09.13 at 11:47 am

RC 85 -I convey this is the direction we are headed for. Not already in.

#101 Obvious Truth on 11.09.13 at 11:49 am

#21

There are cheap places to live a little over an hour from Toronto that also have great jobs. Most people in Toronto are nuts. Who would actually want to raise a family in that place. Lived there for 28 years. Not a hater but take a step back here. It’s ugly, smells and there’s nothing to do.

My wife wants me to go in with her tonight. I’m trying to find her a friend to replace me. At least it’s not summer and I won’t be greeted by the brown smog band as I head in. When you leave for a couple years you realize how bad the place smells. But if you leave you’ll have to get used to talking to strangers and letting people in when you drive. Your neighbour will probably invite you for dinner and others around you may bring over baked goods and introduce themselves. You will be asked to help out at community events. And your kids will walk or ride home (no bike locks needed)with friends while someone makes dinner. You then get plenty of time to taxi them and enjoy it. Maybe even drop a canoe in the river if you have an hour. Or go for a walk with a fishing rod.

Save yourself the daily headache. Leave that for the moola guys. You only get one kick at the can. Good luck to you and your family. For those that do move. Rent first! It’s rewarding in more ways than I thought.

I’m looking for the IPO.

Is it just me or is aapl coiled up like the kids in the pic.

#102 Ripped on 11.09.13 at 11:49 am

#91 Mr. Frugal
Seems pretty odd that Canadians smugly joke about our American cousins living in trailer parks. No we’re far too sophisticated to live in a $30K trailer – we spend $500K to live in a concrete box!!!
…………………………………………………………………….

In Fort Mac a 1,100 sq ft pos goes for 1.5M

http://www.realtor.ca/map.aspx#acr:false;ac:false;baths:0-0;beds:0-0;fp:false;gar:false;pmin:0;pmax:0;rmin:0;rmax:0;openh:false;pool:false;stories:0-0;buildingstyle:;buildingtypeid:;viewtypeid:;waterfront:false;forsale:true;forrent:false;orderBy:A;sortBy:1;LisStartDate:;mapZ:14;page:9;mapC:56.71571787622203, -111.35622024536134;curView:;curStyle:r;leftMin:true;rightMin:false;chkSchl:false;chkTran:false;chkPol:false;chkMed:false;chkWrk:false;chkFire:false;chkAll:false

#103 Ripped on 11.09.13 at 11:51 am

#91 Mr. Frugal
Seems pretty odd that Canadians smugly joke about our American cousins living in trailer parks. No we’re far too sophisticated to live in a $30K trailer – we spend $500K to live in a concrete box!!!
…………………………………………………………………….

In Fort Mac a 1,100 sq ft pos goes for 1.5M

http://www.realtor.ca/propertyDetails.aspx?propertyId=13417714&PidKey=-127310939

#104 TurnerNation on 11.09.13 at 11:55 am

It’s good to be a Kanadian.

Each month, the Rogers and Shaw families know they’ll get ~$100 from each household.

The Weston and Sobeys families (Loblaws, Safeway, Sobeys) get $400.

Molson and Labbatt families get ~$100/mo

Big6 Banks get $20/mo in bank fees, each.

Oil oligopoly $400.

Any remaining goes to the Crown (QE).

This what we fight for! A price upon our heads.

#105 CrowdedElevatorfartz on 11.09.13 at 11:57 am

I work with people who are EXACTLY like the financial train wrecks described in Garth’s post.
Credit cards …..Maxed.
$500 Phones(4 of them???)……about to be cut off.
Fridge……..almost empty(with 2 hungry kids).
Power bill…….always 2 months late.
Cable(full package of course)……disconnection looms.
Car(all the bells and whistles)….leased and teetering.
Rent……….perpetually late.
Gas( they rent 135kms from work???)……$500/month.
Cigarettes(2 packs a [email protected]$8.50/pack)….always.
Booze(cheap whiskey)…..almost daily.
Health…….failing( rotten teeth, chronic heartburn, high cholesteral, zero exercise, ALWAYS stressed )
Financial acumen(almost bankrupt but insists on buying a house some day) …. delusional.

And if you try and suggest anything about finances……you are an idiot that doesnt know anything.

I’d say that if a person hasnt figured out how to budget by the age of 30.
They never will.

#106 Yuus bin Haad on 11.09.13 at 12:06 pm

“living within one’s means” is morphing into “forced austerity”.

#107 Daisy Mae on 11.09.13 at 12:15 pm

I believe it was the 70s…when consumers started receiving credit cards in the mail, free to use. And consumers did. However, the credit card companies had a difficult time collecting balances owing…because the consumers had not REQUESTED the cards.

The practice promptly ended. And today consumers must first fill out an application form. They are bound to a signed contract.

Until this all transpired, most of us used cash….

#108 Chickenlittle on 11.09.13 at 12:16 pm

http://fullcomment.nationalpost.com/2011/03/23/david-frum-the-disastrous-legacy-of-pierre-trudeau/

I was having a discussion with my Grandpa about Pierre Trudeau.

We both agreed that there seem to be a lot of mini Trudeaus around not looking to the future and stupidly thinking that things will always be the same.

`Pierre Trudeau was a spending fool.`

That`s a quote from the article. I think we all know what happened next!

OH! about the points earned: don`t think the credit card companies aren`t going to raise the amount you have to spend to get miles or points or whatever. They`ll milk this for whatever it`s worth!!

#109 TurnerNation on 11.09.13 at 12:17 pm

Cdn Watchdog, got this email as a subscriber.
Look who’s being honoured already:

http://tinyurl.com/ny4rrg2

Party Photos: Toronto Life’s Most Influential 2013
Toronto’s chief planner Jennifer Keesmaat

#110 Penny Henny on 11.09.13 at 12:19 pm

#22 CrackHead Conservative

AKA
LaughingCon
Realtors in an all out panic
and others I’m sure

#111 Chickenlittle on 11.09.13 at 12:22 pm

87 Ralph Cramdown:

`Every landlord wants the quiet tenants with the great credit and great income, but most of those people bought homes.`

I disagree. Here in Milton it seems that every loser that mom and dad wanted out of the basement has a house they `own` thanks to the Bank of Mom and Dad. I have never seen so many irresponsible brats that own paper thin townhouses as I have here.

My husband and I are great tenants, but it is so hard to find a good place to live these days!

#112 amazon girl on 11.09.13 at 12:30 pm

Like the picture

#113 save. spend. splurge. on 11.09.13 at 12:34 pm

@Smartalox — I think they charge a 2.75% fee to use your credit card. If you have a credit card that gives you equivalent points or cash back above 2.75%, hook me up because I’m still on 1% cards (PC Mastercard & CIBC Dividend).

I don’t want the government to help these people buy a home. People like me with real money saved, don’t want to buy a place that is overvalued.

I need prices to drop, interest rates to go up, and for me to pay the amount (or below) the city assessment of a home’s value.

Otherwise, I’m just keeping my money banked until something gives.

People in my generation (of which I am sorry to say I am a part of their cohort) who are buying homes they can’t afford, are morons.

Their parents, are also morons. They’re just enabling these kids (bums?) who can’t save even 5%, let alone 20% for a down payment, to “afford” homes that are overpriced up the wazoo.

Talk about flushing your money down the toilet.

If they can’t even save 20% of the home’s purchase price, they have no business buying a home because it means basic saving habits are not there.

What’s so wrong with renting until you’re 40? Or forever?

#114 Cyclist on 11.09.13 at 12:35 pm

Cute trick from the kid in the pic. Here are much more impressive tricks all while riding a racing bike worth 5
figures

http://www.youtube.com/watch?v=7ZmJtYaUTa0

#115 Herb on 11.09.13 at 12:48 pm

#108 Chickenlittle,

yes, John Turner, Brian Mulroney, Kim Campbell etc.

Do you ever evaluate the sources you cite, or is right wing provenance enough for you?

#116 Dogman01 on 11.09.13 at 12:57 pm

#69 Freedom First on 11.09.13 at 2:28 am

Just learning your wisdom. Slowly the financial shackles have loosened and the perspective change that comes with that is stunning.
Harder to play the game when you have a choice; I can see the control mechanisms in place to keep you in line.
But shut up, few others can understand your perspective.

Interesting article on Breaking rules:

http://www.mrmoneymustache.com/2013/10/22/theres-something-you-need-to-know-about-the-rules/

#117 jess on 11.09.13 at 1:04 pm

The reputational back door must have been locked
http://www.euractiv.com/trade/belgian-commissioner-de-gucht-ac-news-531593
=======

#118 Ralph Cramdown on 11.09.13 at 1:39 pm

#107 Daisy Mae — “I believe it was the 70s… […] Until this all transpired, most of us used cash….”

The 1870s?

Sears Catalog as replacement for local merchant credit, 1880s:
http://en.wikipedia.org/wiki/Sears#Mail_order_catalog

Credit in 1900:
http://www.encyclopedia.chicagohistory.org/pages/1747.html

Sears factoring since the ’30s:
http://www.library.hbs.edu/hc/lehman/company.html?company=sears_roebuck_acceptance_corp

Nothing down and no payments until February 1965:
http://news.google.com/newspapers?nid=1310&dat=19641015&id=0PtVAAAAIBAJ&sjid=BuMDAAAAIBAJ&pg=2380,2942067

Your great great aunt Maude had a tab at the grocer’s, and a man came around once a week to collect $1.40 from uncle Harold for the furniture.

#119 bill on 11.09.13 at 2:16 pm

#114 Cyclist on 11.09.13 at 12:35 pm
that was pretty cool- check this one out …
http://www.youtube.com/watch?v=XYKWSRFWebo

#120 Smoking Man on 11.09.13 at 2:29 pm

Congrats Ying Yang

Gladiator I second it, good for the RentMoola guys.

No one forces anyone to use their service. Unlike communist queens park libs. I’m forced by law to get hosed crazy high rates of auto insurance.

See the difference dogs.

#121 Victoria - the Original on 11.09.13 at 2:33 pm

Buying what you can afford …

My Uncle was a produce manager at a small grocery store. My Aunt stayed home. They had two kids (this was the 60s). Not rolling in money but a nice life. They had a cute comfy little house in Winnipeg in a pleasant neighborhood. All was well. My uncle retired and they went on a few trips. It is not like that now.

#122 GsAmazon on 11.09.13 at 2:37 pm

aw, crap. this was a major tenet in my argument against ppl who try to convince me that rents will bubble up like house prices have – um, not while rents still have to be paid with actual money, I says – so……facepalm to you too, rentmoola.

#123 Wolfhead on 11.09.13 at 2:52 pm

#21 Bikini Bottom
I am a twin – our parents weren’t expecting us. There was an older sibling. We lived in a 600 sq ft house. My father renovated part of the basement into 2 bdrms and a 2pc bathroom. One of the 2 main floor bedrooms became a family room. These were the days before the house porn channels on TV. We did not know that we needed granite and stainless. Us kids spent our time outdoors playing street hockey, football, etc with other kids in the neighbourhood. It was a 5 minute walk to grade school and a 20 minute walk to high school. Instead of buying a bigger house we bought a cottage on Garth’s favourite lake – Lake Erie. We all turned out OK. It was the quality of life and not the quality of the house that made the difference.

#124 Julia on 11.09.13 at 2:58 pm

I don’t know if anyone has posted this already, but it will blow your mind. Squatters who have turned an abandoned 45 story condo construction site into home.
http://www.upworthy.com/wow-the-crazy-story-of-how-a-skyscraper-became-a-45-story-slum?c=ufb1

#125 Entrepreneur on 11.09.13 at 3:15 pm

This cc for rent will work for some people but not for the majority. I would be very careful with this one. Garth Turner said in his article that half never pay off the balance.

I would check with a lawyer first to see the pros and cons…consultations are about $20. Even if your a landlord check with a lawyer. The cc people are not doing out of the kindness of their hearts…when it comes to their money you pay one way or other.

Be careful!

#126 Financial Poodle on 11.09.13 at 3:33 pm

MissionGenerations.ca is trying to help people purchase their first new home. They make the statement:
FUTURE GENERATIONS ARE SEEING THEIR DREAM OF HOME OWNERSHIP DISAPPEAR. TOGETHER, WE WANT THE GOVERNMENT TO SHIFT THEIR FOCUS ON ACCESS TO PROPERTY.

This group seems to be partnered up with (if not funded by) the APCHQ group, a sort of home construction consortium?

Why is this not surprising? I’m sure a person could find CREA money behind this if they dig down a little.

#127 Buy? Curious? on 11.09.13 at 5:11 pm

I think more people should go into debt and take advantage of this service. Take as much money as they’re willing to give you. Pay your rent a year in advance! Two if you can! Pay the absolute minimum balance and then Wham! Walk away.

Here’s to Rob Ford getting the help he needs. Nobody should be that Conservative.

http://www.youtube.com/watch?v=1Gtw59wROW8

#128 Canadian Watchdog on 11.09.13 at 5:39 pm

#109 TurnerNation

Of course. They always honour themselves for failure. Poor Jenny is a product of UBC (United Nations masters degree in urban planning) and just another inculcated Agenda 21 muppet like most city planners. What else does one expect other then to promote walkability while subprime auto lending goes through the roof (an attempt to save auto manufacturing jobs and the federal government's GM stake with a result of more cars jamming up the 401, causing more city congestion) and sustainable housing development (while leaky pipes burst and glass windows shatter from shoddy condo buildings). This is what happens when external governments try to run local markets. They don't get it.

The reality is: sustainable development, smart growth, "we're running out of land", "walk more" or whatever you want to name it is sending local governments broke. Nobody is talking about it yet, but there's going to be some serious property tax hikes starting next year in an attempt to pay off local debt. The problem is, local governments don't realize that a x% property tax hike will only eat up x% of household income due to the amount of leverage in property prices while real median wages decline (if one uses a proper CPI deflator). 

So ya, she's a natty fashionista. Nothing more. 

#129 GUY GADBOIS on 11.09.13 at 6:08 pm

” Hard to believe, but there was a time, kids, when people only bought what they could afford. Many of them used actual money. It was so unfair. “…lol

#130 Cyclist on 11.09.13 at 7:17 pm

119 Bill – that’s cheating! He has a motor!

#131 Infused with Opiates on 11.09.13 at 7:22 pm

128 Watchdog – Jenny can walk my cul-de-sac anytime….

#132 Bikini Bottom on 11.09.13 at 7:47 pm

Wolfhead – Much respect. As much as I dream of some 2000 square foot sack of mortar for my kids to get lost in, I know it’s not required. The things I lust after truly for the wees is parking (carrying the twins up the block is no fun, although happily I now have no need for a gym membership) and some green space for them to run around in outside. I admit that both are really first world problems.
Cici, I’ve been reading this blog enough to know the party line off by heart. I’m an investing noob, though, and I’m dreadfully risk adverse. [email protected] and I have tea on Sundays. I delight in cramming fistfuls of moolah in the pockets of the orange guy’s shorts. I know, I know. It’s awful. I’m a greater fool reprobate. Maybe one day I’ll bite the bullet and start ratcheting up the REITs and ETFs and WTFs and gold bullion. (GT’s big on gold, right?JK.) It feels like jumping off a fiscal cliff right now, though.

Or maybe I’ll go rogue and be the next Smoking Lady. I’ll work on my oracle of Delphi mysticism.

DUI on Money Road, We’ve definitely considered packing up and moving on. But we’re both from here, our parents are here, and we’re fortunate enough to have good paying jobs that we both love. The city has definitely changed over the course of my 32 years; it’s a hard city to love.

And thus concludes my whine session for tonight. Sorry, guys. It’s the SAD talking, I swear.

#133 mac on 11.09.13 at 7:55 pm

Garth must be flying somewhere. There are no one-line answers telling posters they are wrong.

I heard that. — Garth

#134 Bill Gable on 11.09.13 at 8:13 pm

One of your earlier posts correctly pointed out that, back in the day, you could NOT buy food on credit.
Now, when I get in line at the local Rip Off Market, most people get out the plastic. OK; so you collect points, but, it’s a mugs game, unless you pay off the balance.

The younger cohort are more comfortable being up to their ears in debt. It gives me the willies.
They all have nicer toys than I have. They all travel more and all on credit.
That can go on for only so long. What happens when [email protected] calls people and asks for their demand loans be topped up. No cash? Use another credit card? What happens when the rates go up? – (albeit, not for a while yet).
Mr. Turner has been warning you and believe me, one bad bump it is going to be a real bloodbath.
Haven’t you wondered why the Stock Market (DOW) makes all time highs, while 49% of people in the States depend on some kind of Government check, to EAT?
Out of balance, it be, says Yoda – it’s a very tricky time.

#135 Ralph Cramdown on 11.09.13 at 8:48 pm

#134 Bill Gable — “That can go on for only so long. What happens when [email protected] calls people and asks for their demand loans be topped up. No cash? Use another credit card? What happens when the rates go up? – (albeit, not for a while yet).”

It happens gradually. Clients who’ve racked up the cards but have lots of home equity are asked if they wouldn’t rather pay those cards off, and the bank converts an unsecured loan to a secured loan.

Clients with less equity and more problems get offered posted minus nada at renewal, in the hope that you’ll either shove off or pay more. It’s a great game of hot potato, with CMHC, the banks, shareholders, bondholders, subprime lenders, responsible borrowers or those with paid off homes, less responsible borrowers and renters all hoping somebody else gets stuck with the bill when the music stops.

#136 Mike T. on 11.09.13 at 9:14 pm

‘Garth must be flying somewhere. There are no one-line answers telling posters they are wrong.’

Maybe we are learning?!

#137 omg on 11.09.13 at 9:18 pm

#133 mac
“Garth must be flying somewhere. There are no one-line answers telling posters they are wrong.”
———-
I am guessing that Turner has somebody he hires to vet this thing some days just for offensive language – those are the days were you do not see any pithy italics.

NOBODY, ABSOLUTELY NOBODY, could read all these wacko comments day in and day out for 5 years and remain sane.

#138 Shawn on 11.09.13 at 10:03 pm

CREDIT HAS BEEN AROUND FOREVER

Bill Gable said:

One of your earlier posts correctly pointed out that, back in the day, you could NOT buy food on credit.

******************************************

NO, I believe the earlier posts said you could not buy food on credit CARDS.

It has ALWAYS been possible to get food on credit

I believe Ralph Cramdown posted demonstrations of this today.

I recall in the late 60’s people had accounts with many stores, grocery store, hardware store, even corner store they were ALL selling on credit.

Credit was invented LONG before credit cards.

Let’s all just grow up and stop blaming the lender when we borrow too much.

#139 Andrew Woburn on 11.09.13 at 10:17 pm

#11 DaleFromCalgary on 11.08.13 at 10:16 pm
I’m old enough to remember when credit cards couldn’t be used in supermarkets.

#12 Toon Town Boomer on 11.08.13 at 10:17 pm
Hard to believe, but there was a time, kids, when people only bought what they could afford

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

I remember when if you didn’t have the money to buy something, you opened a deposit account with the store and you paid so much a week until you had saved the full price. People started saving for family Christmas presents in March. The only consumer debt was for mortgages based on big down payments. People were usually paid in cash and knew exactly how much they were spending. Debtors were seen as gamblers or fools. This wasn’t virtue, thrift was the only choice when there was no social safety net and health care was cash only.

Then TV ads began in the late fifties pushing chrome-laden land yachts greased with easy payment plans from auto makers. Credit approval wasn’t easy so soon after the Depression. Then came Visa but it was hard to get a credit card and easy to lose it.

I think the cancer of debt did not really metastasize until the nineties when banks were allowed to pool the debts they had written and sell them to third parties. With loan default risk dropped to zero, credit standards dropped like a hooker’s shorts. We all know about those dumb Americans and their liar mortgage loans but what about a 21-year-old Canadian with no credit history who gets a $10,000 Visa card and doesn’t lose it when he maxes it out on sports betting and porn sites? What about all the kids who are now selling themselves into bondage for mould and bugspit palaces (in Garth’s immortal phrase).

Isn’t it odd that we have governments that are powerful enough to prevent us from having a truly private phone conversation, riding bicycles bareheaded or drinking unpasteurized milk, but they seem helpless to ward off the mass financial rape of a generation?

#140 45north on 11.09.13 at 10:47 pm

Rent on credit cards, extreme housing leverage, supplementary loans – add it on to mounds of student debt and over a trillion in mortgages, and the future looks positively scary. Most of these debts take years to pay off, even decades.

if interest rates double it’s the end of life as we know it.

so how could rates double when it’s in the interest of political parties and central banks to have low interest rates? In a pronounced Scottish accent, Russell Napier explains . If growth slows in the Emerging Markets then capital comes out of them putting downward pressure on their currency. To protect their currency, they sell their Treasury Bonds pushing up Treasury yields. So regardless of economic activity in the US, Treasury yields go up. In other words unemployment in the US could be going up causing pain and dislocation but interest rates could also go up.

#141 Shawn on 11.09.13 at 11:12 pm

OMG said:

NOBODY, ABSOLUTELY NOBODY, could read all these wacko comments day in and day out for 5 years and remain sane.

*************************

A LOT of us heard that.

#142 Coho on 11.09.13 at 11:30 pm

The Quebec people may as well ask their provincial government for a subsidy to buy houses. Why not? Since its goal appears to be usurping the role of God in peoples’ lives, it may as well placate them in some way.

For you Quebecers, just remember not to wear any clothing or articles of any religious or spiritual nature if you are a government worker. Soon this law will apply to everyone, I am sure. Government wants to manoeuvre itself into the position of being the highest moral authority in every individual’s life and invoking any other God before it will be viewed as extremist if not blasphemy. Sound extreme? Give it time.

What made the USA different than any other country in its foundation is that the Bill of Rights guaranteed its citizens with the basic human rights of life, liberty and the pursuit of happiness. These rights were declared inalienable and self-evident bestowed by God. These God given rights were not for monarchies or other heads of state to give or take away at their whim. Unfortunately, it appears that earthly governments are growing increasingly weary and intolerant of these God given rights because they want more power and control over the people ‘for their protection’, of course. This is just an illusion and pretext to trick people into forfeiting their power to their government, which cannot really protect them from anything, which instead makes policy often to the detriment of its citizenry. Enter cheap money.

Governments, which are mere tools of the ruling class are being directed to make laws to take God out of the equation in the name of equality for all. In effect, the goal is to have a Godless society. This is how people are broken down. First their ability to make their own way is eroded by lack of decent employment opportunities. Then, access to credit is made easy to keep people spending money they don’t have. As time goes on the people become dependent on a nanny state where peanut government handouts are substituted for living wage jobs. And when peoples’ future prospects and self- esteem are at all-time lows, and for those inclined, their faith in a higher authority is the only thing which sustains them and gives them hope, the government comes up with laws to stifle spiritual expression in the workplace and soon to be in public.

It’s not a stretch to think that ultimately people will be persecuted for their belief in a higher moral authority whether they practice it in public or in the privacy of their own home. This is what the surveillance state is all about and that is to profile people and categorize them into groups. This situation could very well turn into the crusades of the past where non-Christians were being persecuted — but in this go round, the difference will be that ANY religious or spiritual belief will be viewed as ‘extremist’ and met with a heavy hand.

People often say, “Don’t bet against America.” But what does this mean? If it is the soul of America and the principles it was founded upon, then I dare say the bet has already been lost. Clearly, America has lost its way and is a mere shell of what it once was, morally, industrially, economically, and spiritually.

#143 Westcdn on 11.09.13 at 11:38 pm

I have been thinking again – it is one of my favorite activities but I need to express it or shut it down (drinking helps). Excessive debts and low interest rates worry the bejesus out of me. Bubbles can exist far longer than people expect. I have to go with the tide as that is where the money is made. I suck at timing and am often wrong – if I was a trader I would have been broke a long time ago. I got a kick out of a story told by Dennis Gartman. http://www.thecrosshairstrader.com/2013/11/dennis-gartman-on-becoming-stinkin-rich-by-being-wrong
DIY investing is not about being right all the time. It is about cutting your losses when you are wrong or as I like to say “managing risk and preserving capital”. A winner allowed to run pays for a lot of losers however I tend to sell half when I get a double. I will never shoot out the lights with my attitude and refuse to offer advice as I do not live in your shoes. I read this article that theorizes economic debt in a simplistic manner because it ignores productivity gains (technology). http://cluborlov.blogspot.ca/2013/11/from-mouths-of-babes.html
That theory brings me back to my concern about easy debt. Why is the Fed still engaging QE as an ongoing policy? My answer – Irving Fisher. I personally want QE to end as I think cheap debt is evil but I will try to benefit from the ride.
“Following the stock market crash of 1929, and in light of the ensuing Great Depression, Fisher developed a theory of economic crises called debt-deflation, which attributed the crises to the bursting of a credit bubble” – Wikipedia
I think the Fed is influenced greatly by Fisher and will actively fight debt deflation (bank failures) and attempt to control the business cycle (boom/bust). I will save my thoughts on excess bank reserves for another day. The Central Bankers appear to be trying to achieve the golden de-levering in the face of spineless politicians who wilfully ignore economic reality that they are the problem and not the solution. A little harsh I know as there are smart and good politicians – the same thing I say about economists. No economist is always right and I think they best serve as back seat drivers. Economics is not a science – it is more an observation and explanation of human behavior in groups (herds). Better stop now before I get into more trouble with my thoughts du jour.

#144 Inglorious Investor on 11.10.13 at 12:02 am

#95 JimmyAAA on 11.09.13 at 11:24 am

It is what it is, whether you like it or not.

You accuse me of not offering proof for information divulged in confidence. I never said it was proven fact. I said it was what I was told by people on the inside. But you’re right. If someone makes a claim, they should be able to back it up, or it’s just hearsay. You can believe it not. Franky, I don’t care what you believe.

At least I’m offering up something for discussion. All you’ve spewed throughout this entire thread is insults, accusations, name-calling, assumptions, presumptions, obfuscation, misdirection, and ideological dribble. Maybe you should try to offer something of substance as a rebuttal for a change. Honestly, if you actually have something substantive to offer I’d be willing to listen.

And BTW, has it ever occurred to you that if so much money wasn’t wasted in various government social assistance programs (and any government program for that matter), that there would be that much more money available for the people who really need it? Or is your hatred for fiscal conservatives so all-consuming that you can’t see the forest for your ideological trees?

#145 Steve French on 11.10.13 at 12:18 am

“NOBODY, ABSOLUTELY NOBODY, could read all these wacko comments day in and day out for 5 years and remain sane.”

RESPONSE DELETED.

#146 D.D. Corkum on 11.10.13 at 12:21 am

#49 Dwide Schrude on 11.08.13 at 11:43 pm

I am [email protected] and Canadian finances reached a new low the day I had a customer come in and do a cash advance of their VISA to make their RRSP contribution. A little part of me died that day.

—-

To be honest, there’s more than one occasion where I’ve considered borrowing money off a c/c to invest since they keep offering absurdly low rates.

However, putting it in an RRSP makes absolutely no sense. You can’t deduct the interest as an investment loan any more.

And I bet someone with this level of financial literacy didn’t have a backup source of cash to cover the loan if things went bad.

#147 Inglorious Investor on 11.10.13 at 12:22 am

#142 Coho on 11.09.13 at 11:30 pm

Well said.

After the secretive Constitutional Conventions of 1787, a Mrs. Powel of Philadelphia asked Benjamin Franklin as he was leaving Independence Hall, “Well, Doctor, what have we got, a republic or a monarchy?” Franklin responded, “A republic, if you can keep it.”

Thomas Jefferson said, “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

In other words: life, liberty, the pursuit of happiness, and good government can only be maintained through constant vigilance and struggle. Perhaps something to remember as November 11 approaches.

#148 Andrew Woburn on 11.10.13 at 12:37 am

#138 Shawn

I recall in the late 60′s people had accounts with many stores, grocery store, hardware store, even corner store they were ALL selling on credit. Credit was invented LONG before credit cards.

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

This is totally true and some of you may recall Tennessee Ernie Ford’s early fifties song, “Sixteen Tons” in which a coal miner laments that he “owes his soul to the company store”. Somebody above referred to Household Finance who used to do small time personal loans. In the forties my family would get midweek grocery purchases “on tick” until payday. When a doctor I knew died in 1956, patients owed him $80K, probably three times what his large house was worth. (He never expected to collect much of this).

The difference was that this kind of credit was a bit seedy and disreputable like today’s payday lenders. Now massive debt is mainstream and middle class. The thrifty Scotsmen who first built this country would soil their Presbyterian kilts if they knew what became of their painstaking patrimony.

#149 SilverMeridian on 11.10.13 at 12:49 am

“#62 Bottoms_Up on 11.09.13 at 1:23 am
#3 SilverMeridian on 11.08.13 at 10:01 pm
———————————————-
The 4 house difference on 1000 is 0.4%, likely not due to manipulation. It’s possible those 4 sales fell through in some fashion (leading to lawsuits perhaps?).”

First of all, it is not 4 house difference on 1000, it is more like 4 houses out of 21 (a difference between houses sold last year and this year). Changes percentage significantly. Second of all, I understand that numbers could be revised over period of time due to the circumstances. What I am trying to demonstrate here is that the way they present statistical data leaves them with a huge room for manipulation and ability to spin numbers in the direction they want. OREB tells consumers what THEY think the situation on the local RE market is, and they always cherry pick what they are willing to disclose and what to hide. Where is the raw stats ? How did they come up with a 2 % increase? Why don’t they ever mention a 10 % increase in the active inventory since last year? If they what to calculate increase/decrease percentages that’s fine, but please show me raw numbers so I could see how they did their calculations and make my own conclusions. At the moment, all I see is that they are desperately fudging numbers so they could make claims like Ottawa is “a steady, balanced market” or something like that. Most other RE boards provide raw numbers in their monthly reports, OREB just releases their pathetic “New Releases” consisting of two paragraphs with arbitrary numbers they could easily make up out of the thin air.

#150 sven on 11.10.13 at 1:49 am

hey Garth.. how about a post on RESPs?

#151 Dave on 11.10.13 at 1:58 am

Here’s our financial situation for a few laughs…

Combined income – $160,000
Mortgage – $520,000 (house value – $520,000
Personal debt – $80,000 ($40,000 on credit cards at 19%)
No savings
Defined contribution pension funds – $60,000
Leased car – $800 per month

Suggestions?

#152 JimmyAAA on 11.10.13 at 2:51 am

#144 Inglorious Investor on 11.10.13 at 12:02 am
#95 JimmyAAA on 11.09.13 at 11:24 am

It is what it is, whether you like it or not.

You accuse me of not offering proof for information divulged in confidence. I never said it was proven fact. I said it was what I was told by people on the inside. But you’re right. If someone makes a claim, they should be able to back it up, or it’s just hearsay. You can believe it not. Franky, I don’t care what you believe.

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

No you didn’t state it was fact. Which is why I refused to let the statement stand as said. Sad to say but the level of facts in this world has badly eroded in the last 30 years. People say things a hundred times and it becomes conventional wisdom. I refuse to allow that and will often call out somebody when I hear it. Its why I asked for sources. Or perhaps you could ask your buddies to provide a little inside information on where they arrived at that number. I don’t doubt somebody, even an insider, said it to you. I do doubt that what they said had much if ANY basis in facts.

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

At least I’m offering up something for discussion. All you’ve spewed throughout this entire thread is insults, accusations, name-calling, assumptions, presumptions, obfuscation, misdirection, and ideological dribble. Maybe you should try to offer something of substance as a rebuttal for a change. Honestly, if you actually have something substantive to offer I’d be willing to listen.

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

I have actually asked you to name me a so called fiscally conservative government that can consistently balance their budget. Crickets. Which of the above is that? Insult, accusation?

I have mentioned the sucessful Northern European socialism states when you stated that socialism fails.

I offered up numerous reasons why your professor example (the very definition of misdirection in a debate)is so simple as to be laughable. I have mentioned several times that humans are extremely irrational and that is biggest reason why simple conservativism, much like simple socialism will always fail.

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

And BTW, has it ever occurred to you that if so much money wasn’t wasted in various government social assistance programs (and any government program for that matter), that there would be that much more money available for the people who really need it?

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

And has it ever occured that governments are HUGE. Like bigger than everything else. And that if you want to get at all that waste, you most likley will have to do it like cancer. Kill a more than a few good cells (programs) along the way, maybe even the patient. Look we can work on waste all you like. And belive me there is always corruption or waste. It is just not the silver bullet. We cannot have our cake and eat it too.

I have very little faith in the private sector as they are currently operated. The profit motive is overreaching there. Shareholder value frankly has gone too far. That leaves governments. The biggest problem I have is that it all so simple to most conservative people – throw the bad people in jail, everybody take care of themselves, run the country like I run my house on my kitchen table and we are right back in 1955 with Dief (another Conservative who couldn’t balance the budget). Its not that simple. It doesn’t matter if you want to the solution to be grade 2 math, it isn’t grade 2 math. Simple solutions solve simple problems, we don’t have simple problems. And frankly politicians like Rob Ford and Mr Harper promise that. In Mr Ford’s case I actually think he can solve everything like it was his kitchen table. For Mr. Harper it is just horribly political and partisan. He just wants to win so bad, he will say anything to apeal to his base.

And that more money thing? Our social programs were well funded and the budget balanced. Then a populist politician promised to and cut the GST by 2% and said he would cut waste to balance the budget. As my 9 YO would say. EPIC, EPIC FAIL.

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

Or is your hatred for fiscal conservatives so all-consuming that you can’t see the forest for your ideological trees?

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

I have absolutely no axe to grind to with any fiscal conservatives. I just can’t find one right now. The last one who ran under a conservative banner was Preston Manning. I voted for him twice. I voted for Paul Martin several times. I often vote NDP as well. The guy running the show right is a populist who cut the GST far too soon and hamstrung this country fiscally for the last 4 years. The only reason we were in such good shape for the great recession was because of liberal fiscal policies prior to the Conservatives. Oh yeah, our strong banks, they would have been the same disaster as the US, but the liberals refused two massive bank mergers in the 90’s.

In the US, same thing Reagan, Bush SR, Bush JR – Deficits, Clinton – Surplus. One of these things is not like the other ones. Thatcher in the UK, another non balancer. I actually have more respect for Mulroney than most, my 20 year mind at the time didn’t, but in hindsite – he did a lot of the heavy lifting (GST, free trade) that laid the foundation for the Liberal surpluses of the 90s).

#153 Herb on 11.10.13 at 9:02 am

#144 Inglorious Investor,

All you’ve spewed throughout this entire thread is insults, accusations, name-calling, assumptions, presumptions, obfuscation, misdirection, and ideological dribble. Maybe you should try to offer something of substance as a rebuttal for a change.

That’s a great summation of right-wing posts, including quite a few of your own! So do take up one of JimmyAAA’s challenges and identify the “Conservative” government that actually was “fiscally conservative” and balanced a budget.

#154 Smoking Man on 11.10.13 at 10:07 am

#132 Bikini Bottom on 11.09.13 at 7:47 pm

260 words of power and brilliance, you my dear should be writer.

Nice.

#155 jess on 11.10.13 at 11:08 am

Saudi Arabia, Qatar, UAE are the world’s best tax collectors ?

World Bank Annual Paying Taxes Report Paying Taxes for 185 countries index/rankings

http://www.governanceanddevelopment.com/2013/07/measuring-performance-of-tax-collectors.html

http://www.dbrpanel.org/sites/dbrpanel/files/doing-business-review-panel-report.pdf

#156 Smoking Man on 11.10.13 at 11:14 am

University’s Finished Product: Stupidity and Arrogance.

Apparently a bunch of students will be disrupting remembrance day buy wearing white poppies, protesting war. The dumbest thing I have ever heard.

Sure war sucks, but you can do other things.

To try and upset 90 year olds at a funeral service is demented, perhaps they all want jobs at The Toronto Star. The love journalists that kick people when they are down.

And I sure hope they don’t run into some young Afghanistan war vets that lost buddies.

Cause unlike them, they can play real call of duty.

#157 jess on 11.10.13 at 11:17 am

.#56 T.O. Bubble Boy

louis ck on “believies”

and then go to rightwingwatch.org and you will learn that yoga is a gateway to satan!

read about david barton

#158 Daisy Mae on 11.10.13 at 11:42 am

#118 Ralph Cramdown: “#107 Daisy Mae — “I believe it was the 70s… […] Until this all transpired, most of us used cash….”

The 1870s?”

********************

Where did I say credit never existed?

#159 frank le skank on 11.10.13 at 11:46 am

I pay rent through a kiosk via Debit card, I would rather collect points using my CC, which always has a balance of zero. If it means increasing my rent then I really would rather not have the points, unless the increase is equal to the points, which it probably isn’t.

#160 Daisy Mae on 11.10.13 at 11:56 am

#136 Mike T.: “Garth must be flying somewhere. There are no one-line answers telling posters they are wrong.

“Maybe we are learning?!’

********************

Maybe he’s just given up. ;-)

#161 Daisy Mae on 11.10.13 at 12:00 pm

#137 OMG: “NOBODY, ABSOLUTELY NOBODY, could read all these wacko comments day in and day out for 5 years and remain sane.”

******************

Some days he’s takes the idiotic comments in stride. Some days he’s less patient….

#162 Daisy Mae on 11.10.13 at 12:06 pm

#138 Shaun: “Credit was invented LONG before credit cards.”

*********************

And that was the point I was making. Credit cards proliferated. And I believe it was in the early ’70s.

#163 OttawaMike on 11.10.13 at 12:07 pm

#132 Bikini Bottom
Your post sounds vaguely familiar for I to was in a similar position in my hometown of T.O.
I had bought and sold 2 modest homes prior to packing it up for dreary little Ottawa 20 years ago.
We had always tried to remain modestly leveraged with manageable debt levels but also felt disenfranchised in that city hence the relocation.

It took a long time to adapt and the winters are still brutal here but life is generally better here in Ottawa.

A now for the requisite Rob Ford content:
The widening income gap between the middle class suburbanites and wealthy core dwellers clearly is how Toronto ended up with His Worship.

#164 Ingloriioius Investor on 11.10.13 at 12:18 pm

#153 Herb on 11.10.13 at 9:02 am

“That’s a great summation of right-wing posts, including quite a few of your own! So do take up one of JimmyAAA’s challenges and identify the “Conservative” government that actually was “fiscally conservative” and balanced a budget.”

JimmyAAA was responding to one of my comments, not the other way around. It was he who tried to frame the discussion in terms of political parties––as you seem to be doing now––not I.

If he wants to provide evidence that Liberal governments are more fiscally conservative than Conservative governments, he can go ahead and knock himself out. Frankly I don’t care.

#165 TurnerNation on 11.10.13 at 12:38 pm

Unfair?
What’s on the Ford Channel today?

Gotta love the Hard Right. They’re all Law & Order/Tough on Crime, until a rich white guy goes down.
Then they break out the Kum-by-ya Sharing Circles/ye-olde-book-of-fairy-tails.

If Robbie were a young black guy in USA he’d have been jailed for life under Three Strikes:

1st: DUI and possession.
2nd: Breach probation order/hang with known drug dealer.
3rd: Possession of drug paraphenalia (even caught on video).

(Don’t kid yourself. They’ve hanged for less down there. For-profit prisons need customers.)

In the news:
“The city is investigating a billboard that supports mayor Ford that has popped up along the QEW in Etobicoke.
The sign uses the city of Toronto logo but the city says its use wasn’t authorized.
It’s still not clear who paid to have the sign put up but the area is home to the Mayor’s hard core supporters.
The sign reads “we support mayor Ford” and “Ford = Fiscal Responsiblity,” with the word responsibility being mispelled.

At the bottom of the billboard is a quote from the Bible (John 8:7) that reads “Let the one who has never sinned throw the first stone.””

#166 dominion on 11.10.13 at 12:49 pm

I had a twitchy girl come in to look at an apartment. Trying to find out what her story was(drugs?) we’re peppering her with questions(about drugs). Turns out she has bad credit. Shocker. Pay day loans.

As her final sales pitch, she tries to make it a good thing by saying that she took the pay day loans to pay her rent.

Needless to say, she did not become a tenant of ours that day.

#167 Shawn on 11.10.13 at 12:58 pm

CREDIT CARD PROLIFERATION

Daisy Mae said:

I believe it was the 70s…when consumers started receiving credit cards in the mail, free to use. And consumers did. However, the credit card companies had a difficult time collecting balances owing…because the consumers had not REQUESTED the cards.

******************************************

Absolutely correct.

In the U.S. it all started in 1958 with a famous “credi card drop” by Bank of America in Fresno California.

See Wikepedia.

There were indeed issues of payment due to the unsolicited nature and a lack of infrastructure to process transactions and billing.

They took years to proliferate.

In Canada it was late 60’s or early 70’s before CHARGEX become popular.

#168 TurnerNation on 11.10.13 at 1:00 pm

Meanwhile in Kommunist Kanada, the Party builds a better secret police to watch over us. Cost overruns, natch.
Any anti-corporate protestors in our new Corporate-Communist state will be investigated. Let’s hope I’m joking. We’re the land of the free, home…no wait I mixed up my memes. We’re a democracy!

http://www.cbc.ca/news/canada/ottawa/canada-s-new-spy-palace-damaged-by-overnight-fire-1.2421654

“The new headquarters will have more floor space than the Air Canada Centre in Toronto and its cost would build several big city hospitals, CBC News has reported.”

..
^ThoughtCrime/leftist alert! CBC mentioned hospitals for people.

#169 lawboy on 11.10.13 at 1:04 pm

#151 Dave
….

Been there.

Your only option is to pay off the personal debt. Paying off the credit card debt gives you a high rate of return. It’s going to be frustrating, but you cannot move forward until the debt is paid off. Of course, if you’re still accumulating debt monthly….

You might need to call the jar lady, Gail Vaz-Oxlade.

#170 Shawn on 11.10.13 at 1:06 pm

CREDIT CARD FUNCTIONS

Credit Cards provide a number of functions. most useful, some dangerous.

1. Take away the need for a merchant to offer credit
2. take a away the need for a merchant to take the risk of accepting personal cheques
3. Provide electronic funds transfer
4. Provide rewards to the user
5. Provide 3 week interest-free period to the user who pays in full monthly
6. Provide loans to those who pay less than the full balance monthly
7. Provide users with the easy ability to shop in foreign countries

I am sure there are more. Most or all of these are needed and vital services in our economy today.

Credit Cards are wonderful but some people will abuse out of poor planning and/or out of desperation

P.S. Visa and MasterCard shares were trading at wonderfully low levels in early 2009. What an opportunity that was.

#171 nonannystateplease on 11.10.13 at 1:10 pm

Whats with the nanny state/ communist clap trap guys? Not being able to pay rent with a credit card is like saying no liquor in grocery stores because Canadians aren’t capable or mature enough of handling the responsibility. Do you need the police state to manage your daily affairs? Does the government make your decisions for you? I think there are a lot of brainwashed Canadians who have been trained like barking seals to expect excessive government interferance in their lives. Whats next…camera’s up your bunghole to make sure you’re eating your vegetables?

I pay for everything on a credit card…manage the debt ( maybe $8000 a month) properly…and enjoy many free airline tickets and hotels etc etc etc all year round because of all the points I get. It’s a huge untaxed bonus. I don’t want another beuraucracy created to manage my personal life!!!

#172 Ingloriioius Investor on 11.10.13 at 1:20 pm

#152 JimmyAAA on 11.10.13 at 2:51 am

“No you didn’t state it was fact. Which is why I refused to let the statement stand as said.”

I applaud your vigilance. Really. However, the only thing I could verify from that statement is whether the people in question actually said it. Which I cannot do without calling then out in public. Which I won’t do. All I can say is, if I didn’t believe them myself, I would not have offered it up here.

Their opinions are based on their experiences working in social services. When they say that 90% is wasted, they are saying that 90% of ‘clients’ don’t really need the money because they have the mental and physical means to work. Keep in mind that by saying such things they are largely invalidating their own jobs. They are part of system that perpetuates the fraud and waste, so this is not an easy thing for divulge.

———————

“I have actually asked you to name me a so called fiscally conservative government that can consistently balance their budget. Crickets. Which of the above is that? Insult, accusation?”

See my response to Herb at 153.

——————————

“I offered up numerous reasons why your professor example (the very definition of misdirection in a debate)is so simple as to be laughable. I have mentioned several times that humans are extremely irrational and that is biggest reason why simple conservativism, much like simple socialism will always fail.”

Here’s my take in a nutshell: Socialism can work as long as EVERYONE who can contribute to society does so as best they can. For example, if “everyone” pays into a public health care system then everyone can benefit. People can get the medical care they need and not worry about going bankrupt because of a serious illness or disease. I use healthcare as an example because I believe that essential healthcare services are a basic human right, if not legally, than at least morally.

—————
“And has it ever occured that governments are HUGE. Like bigger than everything else. […]”

IMO governments have gotten too big. This is largely why there is so much waste and corruption. I don’t agree with your assertion that running a lean and effective government requires a brute force approach that destroys the good with the bad.

Whenever the work of one segment of the population must support the other segment, you have to make sure that the productive members of society reap a commensurate benefit for their work (e.g. healthcare) and that their hard-earned tax dollars are not being wasted on fraudsters and the indolent. This erodes the incentive to contribute, if not to work.

I’ve hired many, many contractors and tradespeople over the years. These days, it is just assumed that you are going to pay them cash so they don’t have to declare the income. This behaviour occurs when productive members of society feel that too much is being taken from away from them in taxes. Tax Freedom Day falls in June. This means that people are paying almost half of their earned income in taxes. Does is really seem fair that almost half of everything you earn goes to the State? Maybe if you saw value for your money people would accept it more. But obviously more and more people are not getting the value.

———————-

“I have very little faith in the private sector as they are currently operated.”

The private sector is not a monolithic group. Most people in the private sector are just hard-working “joes” trying to make a living at work or in business. If you are referring to the big banks and large corporations, I would agree there is a problem there, as they have used their influence to basically buy government. I’ve railed against this many times on this blog.

———————-

“The profit motive is overreaching there.”

The profit motive is what drives a great deal of positive outcomes in our society. It is a basic human drive. Everybody wants wealth, right? There is nothing wrong with that. I believe in free markets, but I also believe those markets should be regulated so the same rules apply to all. It’s never really been this way, but it’s worth the struggle.

—————

“Shareholder value frankly has gone too far.”

If you are suggesting that too many people are trying to use the stock market to benefit from the labours of others, I agree. But there is nothing wrong with investing in companies and expecting a fair return, particularly those companies that are driving innovation. The current situation speaks to the fact that more and more people feel they are not able to keep up. It’s a sort of grasping at straws––the Mrs. Watanabe phenomenon in Japan.

——————–

“That leaves governments.”

Governments have a place. But government cannot replace the private sector, because government does not, in the main, create wealth. All they can really do is create laws and rules that encourage innovation and wealth creation, and redistribute wealth created by the private sector. They can also fund R&D that is difficult to fund in the private sector because of the scale or the risk/return involved. But remember, the money they use to fund R&D comes from the productivity of the private sector.

——————

“The biggest problem I have is that it all so simple to most conservative people […]”

Yes, I’ve met some such minded people. I am not one of them. Being small “c” conservative is not evil.

As for politicians, there are good and bad in every level of government and in every ideological domain. All make promises they can’t or have no intention of keeping. It’s politics no matter what party you belong to.

I do not support the Harper government per se, but they claim to be on track to balance the budget by 2015. We’ll see. But you just watch all the special interests who will be coming out of the woodwork clamoring for their slice of the surplus, when in fact all the government may achieve is balancing the budget. Actual debt reduction? Most people don’t know the difference.

————–

“The only reason we were in such good shape for the great recession was because of liberal fiscal policies prior to the Conservatives. Oh yeah, our strong banks, they would have been the same disaster as the US, but the liberals refused two massive bank mergers in the 90′s.”

I agree there is truth in that, but as you would say, it’s not that simple. How about the massive amounts of money from commodities and energy sold to a hungry and growing Asia? This would have occurred under any government. And BTW, I voted Liberal at the time.

#173 russell olausen on 11.10.13 at 1:38 pm

When law enforcement (public and private) wants something so bad that it throws out risk analysis we have the conditions for a runaway train. Watch the movie with J. Voight and see if people on the N. shore of lake Ontario could learn from it. It is not who’s side your on, its about how far away from the fireball you is.

#174 Ronaldo on 11.10.13 at 2:29 pm

http://money.msn.com/saving-money-tips/post–the-price-of-bitcoin-could-go-to-dollar1-million

The world is awash in bubbles. This one won’t end well.

#175 Julia on 11.10.13 at 2:42 pm

#151 Dave on 11.10.13 at 1:58 am

Wow. Do you really want suggestions? I think you already know the problem and the solution. Good luck.

#176 Ronaldo on 11.10.13 at 2:44 pm

#167 Shawn – ”In Canada it was late 60′s or early 70′s before CHARGEX become popular.”

Exactly. I recall having one mailed to me and carried it around in my wallet not really knowing how to use it. I later found out after returning from vacation and my car blowing its head gaskets. We’d used up all our cash to do the repairs and found ourselves with about 20 dollars and marooned in Edmonton with the car still giving me problems. Decided to go to the CNR station to see what it would cost to get back to Vancouver by train since they offered what was called CAR GO RAIL service where you could take the train and the car would be loaded on a car carrier. As I was talking to the fellow at the CNR wicket I notice a sign on the counter that read CHARGE and enquired as to whether I could use my card for payment and he replied, absolutely. That was the beginning of using charge cards for me. It certainly got me out of a bad situation at the time. Luckily I never allowed it to get me into one.

I also recall the first couple ATM’s in the lower mainland around the same time. One was at a bank of Kingsway and one on Hastings. The Royal I believe.

#177 Ronaldo on 11.10.13 at 2:56 pm

#151 Dave – OMG. You desperately need some financial advice. You need to unload that debt asap. You are working for nothing right now. You are a debt slave. I wonder just how many others are in the same position as you are.

#178 Ronaldo on 11.10.13 at 3:08 pm

#138 Shawn

”I recall in the late 60′s people had accounts with many stores, grocery store, hardware store, even corner store they were ALL selling on credit. Credit was invented LONG before credit cards.”

Very true, at 17 as I was working the equivalent of full time at 45 hrs per week (6 days) and going to high school, I was able to get credit at clothing stores, McCleods hardware, and Finance company (probably HFC) for my car loan. Of course my mother had to co-sign. (she must have had a lot of faith in me). Credit was how people were able to buy stuff back then. There was not much extra money to be had. My mother had a revolving credit at Eatons for over 20 years that she finally got paid off after she got a decent paying job at Woowards. I remember her telling me that she made the last payment on her Eatons account. She was about 45 at the time. She never again used credit, only for the house mortgage.

#179 Ronaldo on 11.10.13 at 3:14 pm

#49 Dwide Schrude on 11.08.13 at 11:43 pm

”I am [email protected] and Canadian finances reached a new low the day I had a customer come in and do a cash advance of their VISA to make their RRSP contribution. A little part of me died that day.”

You can thank your employer for a good job in marketing the RRSP’s as well. Remember the ”Freedom 55” thing that banks and financial institutions used to bombard us with back in the 80’s. Sure worked to sell their mutual funds too didn’t it?

#180 Obvious Truth on 11.10.13 at 3:35 pm

#151 Dave

Not as bad as many. You have a lifestyle problem. If your family can survive a drop in lifestyle you’ll do fine. Sound like you’ll need a second job for a while. At your income you can pay that debt off in 3 years easily. Don’t dig a deeper hole cause you think it’s too late. If you watch Gail you’ll know its about the communication and respect. With that your goals fall into place. Consider yourself lucky we have ridiculously low rates.

Time to enjoy walks.

#181 Ripped on 11.10.13 at 3:39 pm

#151 Dave

You are in trouble, I wonder how many other youngins are in the same boat.

#182 Victor V on 11.10.13 at 3:56 pm

Folks, it is like this re: Rob Ford fiasco, Senate fiasco, Ontario gas plant vote bribing fiasco, etc…there is no war against any one person, but their should be an uprising against political incompetence, political self-servedness, political embarrassment and political stupidity. It impacts us all.

Let’s face it, Toronto is hurt by the Ford fiasco, Ontario is hurt by Wynne et al and the gas plant boondoggle, and the Senate scandal is hurting Canada.

But don’t be shocked, because when we hold our noses and vote for what we know is a risky choice we get what we deserve. Our collective expectations of our politicians is so terribly low that we have become immune to political fiascos. But know that these fiascos erode our democracy, impact our economy and set the stage for future generations of bad leaders.

We have to regain our ability to achieve greatness by encouraging good and competent community and business leaders to become political leaders. We forget more of our politicians than the ones we remember. Why? We should support initiatives, like term limits, that help turn over the rot and let the fresh and new flourish.

We are largely to blame for the political impotence resulting from bad voting decisions. If you want better, demand better. Get engaged. And engage others.

#183 Blacksheep on 11.10.13 at 4:36 pm

Smoking man # 156,

Surprised at you views.

These poor soldiers are / were unfortunate pawns in the ‘SYSTEM’.

War is for profit, period.

I personally know an elder man that has lost his only two children / sons do to the consequences of being both directly / indirectly involved in Canadian Afghani adventure.

The sad part is this wonderful man still clings to his beliefs that his children’s sacrifice was necessary and thus just.

His sons would be alive today if Canada had just told the US, NO.

I agree, no point in upsetting the old guard (WW2 vets) as they will be gone soon enough, but the white poppies time has come as thinking need to change.

#184 live within your means on 11.10.13 at 5:20 pm

Just rec’d a joke. Huge Ford Dealer sign – underneath “No Relation”.

#185 Andrew Woburn on 11.10.13 at 6:17 pm

#182 Victor V

We have to regain our ability to achieve greatness by encouraging good and competent community and business leaders to become political leaders. We forget more of our politicians than the ones we remember. Why? We should support initiatives, like term limits, that help turn over the rot and let the fresh and new flourish.

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

One place to start is to refuse to tolerate candidates who are imposed on a community by a political party organization or by fraudulent nominations involving thousands of bogus new members who have had their memberships paid for by manipulators. We may get to vote every few years but private organizations called political parties set the agenda and, to the extent they are corrupt, we are helpless. How can you be represented by someone who doesn’t need you and is not really accountable to anyone in the community? Why would a prominent businessman or respected municipal politician bother to put his name forward if he knows that community support means nothing in the face of a tide of instant members or someone parachuted in by party headquarters. Making sure that candidates are nominated by a reasonably representative group of adults from that community is the foundation of democracy. The result would make politics more heated and messy but that is democracy.

#186 Keith in Calgary on 11.10.13 at 9:16 pm

What’s wrong with allowing people to pay their rent with a C/C ?

If you have a C/C you get bombarded with the 0-1-2-3% cheques you can use to draw cash out, effectively doing the same thing. Having said that, as we pay our C/C statement off in full each and every month, the extra 20,000 points a year from adding my rent to my C/C would net me a free short haul ticket with my Avion card…..or 7 more lounge Service Air lounge passes if I used my AMEX. I get sweet f_ _ _ all as it is now…….

#187 raider on 11.11.13 at 12:25 pm

So how do your put your savings to use in such an environment.

Are Canadian Preferreds & REITs then a good option as part of a balanced portfolio, if deflation, and declining consumer spending are around the corner?

I get that these things go up, when the interest rates go down, as the value of the cash flow increases (in theory) … but how about context of deflation risk, declining consumer spending, and the possibility of tightened rent controls in such an environment (as wages go down)?

#188 Wizard of Oz on 11.11.13 at 7:57 pm

… the new normal.

http://www.realestate.com.au/property-house-wa-nedlands-115016071

#189 Doug in Toronto (usually in London) on 11.11.13 at 7:57 pm

Hard to believe, but there was a time, kids, when people only bought what they could afford. Many of them used actual money. It was so unfair.
—————————————————-
Wow, I must be an ancient relic of days long gone by, as I still use cash (or debit card) and buy only stuff I can afford. I’ll sign off now and play a few 8 Track audio tapes and VHS video tales through my older vintage CRT television.