The hug

hug 3 modified

Being the first week in January, and damn poor riding weather, let’s talk about your finances. For normal people, they suck. But readers of this blog are in a class of their own. This is one giant, furry, warm, womb-like group hug in the middle of a frozen mediocrity. It’s energized by seven million visits a year from people who might otherwise stray from the true path and be lustily consumed by realtors or eviscerated by a mutual funds sales pack.

Face it. We’re on our own. Surrounded by the zombie souls of the mortgaged and the feckless. Like Bruce says, we take care of our own. So let’s get to it.

Here’s Scott in New Brunswick (which I sadly dissed earlier this week):

“I often hear you talking about the magic of a spousal RRSP to finance a mat leave.  My wife (age 27) and myself (a youthful 26) have two children ages 1 and 2. She hopefully will be at home until the nest empties. I make a modest $40,000 a year and currently have around $16,000 invested in a fund in my RRSP. Would it make sense for me to contribute to a spousal RRSP instead of my own and invest the tax refund through my TFSA and then in three years when my wife can draw the money out, put that money in the TFSA as well to fund our retirement tax free?  I am finally realizing the power of the TFSA for retirement investing.

“Is this a magical loophole to keep some money away from the tax man or is there some little tid-bit I am missing that will land me a nice prison stay?”

Although I’m sure you look fetching in orange, no jail time for you in pursuing this strategy. In fact, you understand perfectly. A spousal lets you contribute up to your own RRSP limit and enjoy the same tax refund as if you had put the cash into your own plan. Yes, then slap that baby into your TFSA and smile at the thought of the elfin deity, F, topping up your taxless retirement account.

After three years your wife can withdraw the money at zero tax and use it for more tax-free plan contributions. Yes, Scott, it’s magic.

BTW, I hope all the whiny yuppies and $400,000-per-year doctors with financial problems who are reading this reflect on a 26-year-old guy making forty grand supporting three people who has saved the equivalent of half his salary. Shamed yet?

Okay, Jon in Montreal has a bonds quandry:

“I’m starting to learn about investing, read your blog every day, don’t have or want real estate for now.  I have done some research over last few days about bond funds….  Not sure I understand, thought you could help.

“Basically, is it possible that in a rising interest rate time, bond funds lose a lot of value and that bond funds are not like individual bonds because they don’t really have a maturity term and also if lots of people are selling, the fund manager has to sell some bonds and take a hit ? Is it the same for a bond ETF?”

Unlike men, Jon, bonds mature. That means (assuming the bond is creditworthy) you always get your money back after the term of the bond expires. Plus, interest is paid along the way, determined by the ‘coupon rate’ and usually done semi-annually. So, good bonds are safe. The safest among them are issued by the feds, but that also means rates are abysmal.

Owning a bond mutual  fund does not necessarily mean you own bonds. Instead, you may only own shares in a security based on bond indices. The bond fund will never mature and guarantee you all your principal, and in fact can be massively impacted by moves in interest rates.

When rates rise, bond prices fall. So do bond index funds. So, you might ask, why have millions of risk-averse investors made such funds their No. 1 investment choice where there’s danger of loss as rates normalize?

Because that’s what they were sold.

Finally, Ian is confused in Kelowna, which I completely understand:

“The wife was reading a recent blog and has pointed out to me that TSFA deposits are date sensitive each year.  I had thought that we could go back and use unused previous years.

“Bottom line is we put money into a TFSA (GIC) when they first came out ($5500 each) and have done nothing since.  What should we be doing before the end of 2014.  I can probably come up with funds to make an $11,000 deposit for 2014 or more if we can go back on past missed opportunities. Is it too late?”

Actually, she’s sweet but wrong. The only date you need to be aware of with TFSAs is New Year’s Day. That’s when the annual contribution can first be made which is, as you point out, $5,500 per person. Can you go back and catch up on missed allotments from past years? Absolutely. If you’ve been a Canadian resident for the past six years, and over 18, go ahead and put in the maximum $31,000 that has accumulated.

New year’s is also important because if you withdraw funds at any time for any reason from the TFSA, you must wait until at least the first day of the next year to replace them. Do it sooner and it will earn you a penalty from the stiffs at the CRA.

And Ian, the last thing on earth to place in a TFSA is a GIC. That’s pathetic.

136 comments ↓

#1 raisemyrent on 01.02.14 at 9:43 pm

Garth, how many emails do you get a day? Kudos to you for actually reading them and replying!

#2 Young Father on 01.02.14 at 9:45 pm

What % allocation do you recommend to hold in bonds if you are 30 years old, and 60 years old in this environment where interest rates are destined to rise?

In a balanced 60/40 portfolio bonds might sit well at 15% – and that would be government, corporate and high-yield combined. But why buy now? — Garth

#3 NuisanceBear on 01.02.14 at 9:50 pm

FIRST – AND PROUD OF IT!

#4 Bond Funds on 01.02.14 at 9:51 pm

I still have some bond mutual funds [email protected] sold me. When I now look at them they are actually negative. Do you see an opportunity that they may recover for a brief time or just take my loss and put it to work?

#5 Holy Crap Whers The Tylenol on 01.02.14 at 9:52 pm

Well after a short vacation down south I can’t believe the cold climate I have come home too. Not only the weather but the investment industy. What are we doing wrong here in Canada compared to the US market. After talking with my relatives in the US they are doing south better with their investment funds compared to what I have here. Only a few years ago everyone wrote off the USA as a pariah! Look at Lady Liberty go now!

#6 -=jwk=- on 01.02.14 at 9:52 pm

spousal rrsp also useful for new home buyers plan. And as of jan 1, just 3 years to go before we are ‘new home buyers’ again….

#7 Flamed out in Kitchener on 01.02.14 at 9:54 pm

It’s a Christmas miracle … Okay, not really, but TFSA time is the best opportunity for Gen Y to build for their future … forget RRSPs (I’m drawing mine down in my mid 50’s to fund annual TFSA … want it gone by 71) Can’t believe most Canadians aren’t jumping all over this gift – tax free growth! Guess there’s more important things to do at the mall …

#8 totalinvestor.com on 01.02.14 at 9:55 pm

“seven million visits a year”?
Garth, you’re a rock star.

#9 not 1st on 01.02.14 at 9:57 pm

Bond yields are not that much better than a GIC. Try to get a corporate bond instead, double the return and the same security on the principle.

So permanent residents of Canada cannot hold a TFSA?

#10 Victoria Real Estate Update on 01.02.14 at 9:58 pm

. . . . . .Percentage Price Decline From Peak (MLS HPI). . . . .
. . . . . . . . . .Greater Victoria – Condominiums. . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .0%. . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 0.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 2.0%. . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 2.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 3.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 3.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4.0%. . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 6.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 6.5%. . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 7.0%. . . . . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . .
– 7.5%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . .
– 8.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 8.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 9.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 9.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . .
-12.0%. . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . . . . . . . .
-12.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . .
-13.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——————————————————————————————-
. . . . . . . . . 10. . . . . . . 11. . . . . . . . 12. . . . . . . . 13. . . . .

This is a 6-month price chart for Greater Victoria condos. It was put together using MLS home price index data for Greater Victoria.

Each year has two price points – one for the end of June and one for the end of December. The first price point represents the 2010 price peak of the condo market in Victoria. The last dot is for November 2013 since December data is not available yet.

Based on information from B.C. Assessment, Greater Victoria home values slipped as much as 10.8% (Metchosin) this year (see chart).

Assessed home values for every single area of Greater Victoria decreased this year. Other examples include:

Oak Bay: – 3.47%
Langford: – 4.45%
Saanich (SD61): – 3.49%
Esquimalt: – 4.10%

2014 marks the third consecutive year of lower assessed home values across Greater Victoria.

Girls and guys, Victoria’s price correction is in full swing, but still far from reaching bottom.

At the beginning of the US housing market correction/crash (click on the chart), some US cities started to correct before others (think Victoria). An important thing to learn from this chart is that the big price declines in the US took place only after all US cities were in correction mode (early 2008). Victoria’s housing market will experience its biggest price declines once other Canadian cities are in correction mode. That other Canadian markets will experience major price declines will definitely happen, and probably soon (all housing bubbles burst). Another important thing to know is that the US cities that began to correct first were, in general, the biggest price losers (again, think Victoria). All US cities basically reached bottom at the same time.

There is no need to rush out and buy a property in Victoria right now. Wait for lower prices.
Millions of US families are still experiencing financial distress as a result of buying at or near the peak of the 2006 US housing bubble. Don’t put yourself in that position.

House prices in Victoria will correct a lot more. If you buy now you will be forced to watch the value of your property drop significantly. It will create financial distress for you and your family for many years. You will avoid all of that trouble if you rent for now and wait for the major price declines to be a thing of the past.

Until next time – Cheers!

#11 Ontario's Left Coast on 01.02.14 at 10:00 pm

Just made our 2014 TFSA and RESP contributions today, and booked a March Break trip to NYC – you can never beat a saver.

#12 Obvious Truth on 01.02.14 at 10:12 pm

This is exciting. You gave to read, ask questions and be dedicated to do this stuff. And these guys are young.

No mortgage can do this for you.

Congrats to all of you. Most will never do this kind of work. Smart savers always rule.

We’re here for the dissing Garth. Without it people would wonder if it was really you.

#13 economictsunami on 01.02.14 at 10:15 pm

Interesting read…

Four changes CMHC needs to make to rein in its mortgage market influence:

http://tinyurl.com/mpckb7j

#14 mark on 01.02.14 at 10:17 pm

Probably a good reason not to bother taking any notice of predictions for the year ahead or stock picks in the media.

31 winners up 30% and 35 losers down 43% in a market up 15%.

http://www.idiottax.net/2014/01/the-australians-top-100-picks.html

#15 Tri-Guy on 01.02.14 at 10:18 pm

Woo Ing is giving 2.5 percent rates for tfsa

#16 spousal rsp question on 01.02.14 at 10:19 pm

What if Scott contributes 5000, say, to a spousal rsp in 2012; and, another 5000 in 2013, and another in 2014…and continues to do this.

Can his wife take the ORIGINAL 5000 out of her rsp in 2015 without Scott having to claim this as income–even though he has contributed to the spousal rsp every year, and continues to do so?

Or, would Scott have to stop putting any amount at all into the spousal rsp for three years for the money to then become taxable to wifey?

#17 T.O. Bubble Boy on 01.02.14 at 10:20 pm

off topic, but I saw this via the twitter feed from Canadian Mortgage Trends today… the UK allows 120% Loan-To-Value mortgages!

http://www.money.co.uk/mortgages/100-mortgages.htm

What the hell is Carney doing over there?!?!?

#18 Detalumis on 01.02.14 at 10:29 pm

Um Scott in NB essentially pays almost no income tax with that income and 3 dependents, that’s how he’s able to save. He takes a lot more out of the system and the high tax paying people you disparage, than he ever pays into it.

And why in 2014 would a 26 year old encourage his wife to stay at home until the children “fly the nest” which I take is 18 or 20 years from now when she is now pushing 50 and unemployable. This is the most financially irresponsible move anybody could ever make.

You treat your spouse like a child, 100 percent dependent on you for life and then are so proud of that move, like you live in 1950-land with the I’m-the-big-provider-no-wife-of-mine-needs-to-work syndrome and wow he gets congratulated for it – incredible.

#19 T.O. Bubble Boy on 01.02.14 at 10:30 pm

@ #15 Tri-Guy on 01.02.14 at 10:18 pm
Woo Ing is giving 2.5 percent rates for tfsa
———————————————
Even with $31,000, that is all of $775 you’ll gain in interest for the year… wait 5 years @ 2.5%, and you’re up only about $4k (just over 11% in 5 years). I’d rather just buy the index and assume that the stock market can beat inflation, which that “high interest” account wouldn’t be doing.

#20 Bo Knows on 01.02.14 at 10:37 pm

hi. im 30 years old. been a good saver all my life but just stated investing at 29. I have $31,000 and a questrade account loaded with a margin account and a tfsa account. dont need the money for a couple years. after reading this blog all i know is dont buy mutual funds, dont buy gic and buy etfs.

any opinions on what i should do?

#21 Not 1st on 01.02.14 at 10:38 pm

#18 Detalumis on 01.02.14 at 10:29 pm

—-

Because raising a child is the most important job in the world and nothing can replace a parent at home. I applaud this couple.

#22 Troy on 01.02.14 at 10:41 pm

So if you hold bond funds should you sell? Hold?

#23 Sir Finance on 01.02.14 at 10:41 pm

Hi Garth,
I called a toll free CRA number today to see exactly how much TFSA room I have left available. A message recording said they have not received all updated information from the financial insituitions yet. Do you roughly how soon this info will become available? Thanks

#24 ? on 01.02.14 at 10:43 pm

pimco monthly income buy ,sell or hold ? over the next 6 month 20 % of investment port.

#25 Tri-Guy on 01.02.14 at 10:44 pm

@T.O Bubble. I know pathetic

#26 tkid on 01.02.14 at 10:44 pm

Detalumis, stick your ‘wifey should work’ in a chimney and smoke it.

If you think wifey is looking after 3 children and ‘not working’ you can stick your head in a blender and press puree.

Atta boy Scott. You are doing well!

#27 Calgary Conditional Owner on 01.02.14 at 10:50 pm

Hello Garth, I spoke to a bank today about getting a loan for a contribution into the spousal RRSP I opened for my wife. They would give me a LOC at prime rate if the funds are used on a RRSP investment plan with that bank in particular, do you think this is a good strategy?

Depends on the assets, and the plan. — Garth

#28 Wrapped ETF Man on 01.02.14 at 10:51 pm

Does Turner or the Turnerettes like XTR as an ETF for the 40% as fixed income of a 60/40 portfolio? One ETF to make life easy.

#29 r on 01.02.14 at 10:54 pm

Just for confirmation Garth replied my email within minutes

#30 John on 01.02.14 at 10:58 pm

#18

Gee I don’t know maybe he would like his wife to raise his kids instead of some stranger…?

#31 Smoking Man on 01.02.14 at 11:07 pm

So much for global warming, ah silly me, it’s been re branded as climate change.

So now when we have extream weather events, it’s the fault of Man.

We must tax these people.

How arrogant of us, you can fit side by side every human on earth in the city of LA.

City of LA vs. The mass of the surface of earth. 0.00000002

Guess the sun has no effect on the rest of the planet.

#32 Ralph Cramdown on 01.02.14 at 11:13 pm

#18 Detalumis — “And why in 2014 would a 26 year old encourage his wife to stay at home […]”

One of the funniest things I read in past predictions of the future is famous economists saying that with increased productivity, fifteen hours of work a week should be all that’s required.

How’s that worked out?

As much as the cigar chomping capitalist shareholder in me enjoys the spectacle of a two income family paying for two vehicles, childcare, prepared and restaurant meals, higher income taxes and all the other expenses that two income families bear, thus keeping the hamster wheel of the economy turning at the max, the human being in me applauds those who can make family life work on one salary.

#33 Julia on 01.02.14 at 11:25 pm

“When rates rise, bond prices fall. So do bond funds – and there is no bottom, because no actual bond exists to safeguard investors. So, you might ask, why have millions of risk-averse investors made bond funds their No. 1 investment choice where there’s so much danger of loss as rates normalize?
Because that’s what they were sold. And shame on the sellers.”

Garth, isn’t XRB a bond fund? Or are you saying having it is ok if bond funds are under a certain percentage of the portfolio?

That’s the essence of a balanced portfolio. One never knows exactly what’s coming. — Garth

#34 Cici on 01.02.14 at 11:30 pm

Good info Garth! Thanks for sharing the wealth :-)

#35 Cici on 01.02.14 at 11:31 pm

#32 Ralph Cramdown

Agreed…Good post :-)

#36 piazzi on 01.02.14 at 11:36 pm

Garth,

Regarding bond funds or bond ETFs

Wouldn’t an ETF with short maturity or a laddered ETF with short maturity curb some of the risk of interest rate increases?

#37 Calgary Conditional Owner on 01.02.14 at 11:39 pm

Hello Garth, I spoke to a bank today about getting a loan for a contribution into the spousal RRSP I opened for my wife. They would give me a LOC at prime rate if the funds are used on a RRSP investment plan with that bank in particular, do you think this is a good strategy?

Depends on the assets, and the plan. — Garth

I took note of the funds distribution you recommended a few months ago, so I would follow precisely that (40% safe and 60% growth) and take the handsome tax rebate to invest in a TFSA. The big issue that I face with both is which assets to buy. Is not easy to pick and choose when you have 0 experience with Canadian investing.

#38 KommyKim on 01.02.14 at 11:55 pm

RE: #28 Wrapped ETF Man on 01.02.14 at 10:51 pm
Does Turner or the Turnerettes like XTR as an ETF for the 40% as fixed income of a 60/40 portfolio? One ETF to make life easy

Certainly not as your 40% fixed income portion. XTR contains 46% stocks and 54% bonds already.

#39 Son of Ponzi on 01.02.14 at 11:57 pm

As of noon today, the average CEO in Canada earned as much as the average worker earns in a year.
Well, that’s o.k.
As long as the shareholders are happy.

#40 KommyKim on 01.02.14 at 11:59 pm

RE: #23 Sir Finance on 01.02.14 at 10:41 pm
I called a toll free CRA number today to see exactly how much TFSA room I have left available.

You can check your TFSA & RRSP room here:
http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/qckccss/menu-eng.html

#41 raisemyrent on 01.03.14 at 12:01 am

foreigners and permanent residents can definitely hold TFSAs/RRSPs so long as they file taxes with CRA

TFSA room is earned by Canadian residency. RRSP room is earned by Canadian employment. — Garth

#42 KommyKim on 01.03.14 at 12:01 am

Garth,
I am assuming you are talking about bond mutual funds here and NOT bond ETFs:

Owning a bond fund does not mean you own bonds. Instead, you own shares in a derivative security based on bonds.

Correct?

Depends on the fund, but it is the same principal. — Garth

#43 Son of Ponzi on 01.03.14 at 12:05 am

#32 Ralph.
I remember in the mid 80s when computers were supposed to increase productivity to the point where humans would just show up at work, push a few buttons and than head to the beach.
What ever happened?
Jim Pattison happened.

#44 Dean on 01.03.14 at 12:12 am

Garth has never responded to any of my emails.

I never sent him any, but don’t think that should matter.

#45 Questions on 01.03.14 at 12:28 am

It sounds like you’re suggesting that we not only avoid buying bond etfs, but should go look to sell what we have? If this is true, what is looking appealing for the “40%” portion of one’s portfolio instead?

Having 40% fixed income does not mean 40% in bonds. Far from it. I would hold the line at 15% in a variety of them. An equal amount in preferreds. — Garth

#46 Infused with Opiates on 01.03.14 at 12:29 am

17 TOBB – I didnt know Carney was in charge of that. I thought he ran the central bank while looking cool like he
did here.

#47 Debtfree on 01.03.14 at 12:30 am

BC assessments are in ,van isle and the OK took the biggest dump . Did you get yours eaglesbay parksville guy ? I’d laugh but that would be cruel . Or would it ? Devils advocate where are you now ? Do you guys think Garth was right yet ? Or do you now know? My vulture senses are tingling . Must gain control . I know Garth I lucked out . Geographicly that is . Or did I ?

#48 Bill on 01.03.14 at 12:51 am

BC assessments are out. Many of the assessments are down 15-20% from last year. My house, in West Vancouver, and most of my neighbors being some of them.

Check it out. http://evaluebc.bcassessment.ca/

#49 Dr. Doofenshmirtz on 01.03.14 at 1:01 am

#16: on spousal RRSPs.

It doesn’t work that way … RRSP contributions are treated as last money in, first money out. Once you’ve cleared out the 3 years of $5000 contributions that go back to Scott (based on the rules in Paragraph 9), the remainder of the withdrawals can go back to Scott’s wife.

Don’t take my word for it … read the CRA interpretation bulletin:

http://www.cra-arc.gc.ca/E/pub/tp/it307r4/it307r4-e.txt

Paragraph 11, in particular, deals with your exact question.

#50 Bill on 01.03.14 at 1:36 am

The condo that I sold in West Vancouver in 2010 is now (2014) assessed much less than it was in that same year. It is now assessed 10% less than what I sold it for 3 1/2 years ago.

And, that doesn’t include the real estate fees that I paid.

I’ve felt pretty stupid selling and renting a home for the last few years. Many people (mostly relatives) mocked me. I feel pretty good now.

#51 spousal rsp question on 01.03.14 at 1:57 am

#49 Dr. Doofenshmirtz

So (just to clarify) Scott would have to stop putting any amount at all into the spousal rsp for three years for the money to then become taxable to wifey–and no t back to him?

Thanks for the help and link!

#52 Ludmila on 01.03.14 at 2:31 am

Having 40% fixed income does not mean 40% in bonds. Far from it. I would hold the line at 15% in a variety of them. An equal amount in preferreds. — Garth

In what are the other 10%?

#53 Mike on 01.03.14 at 3:09 am

It sounds like you’re suggesting that we not only avoid buying bond etfs, but should go look to sell what we have? If this is true, what is looking appealing for the “40%” portion of one’s portfolio instead?

Having 40% fixed income does not mean 40% in bonds. Far from it. I would hold the line at 15% in a variety of them. An equal amount in preferreds. — Garth
—————————————————-
What would the other 10% of fixed income be composed of if bonds and preferreds are only 30%?

#54 Son of Ponzi on 01.03.14 at 3:23 am

Wow,
Hang Seng down over 500 points.
Only the beginning.

#55 H&R Blockhead on 01.03.14 at 7:42 am

First in first out?
3 year rule applies to spousal rrsp’s. Any contribution within 3 years of withdrawl taxes back to contributor. It doesn’t matter if the funds went in 10 years ago.
5000 is tfsa room.
Are you mixed up?

As for Scott in NB.
In his tax bracket, do rrsp’s even make sense?
He should be concentrating on maxing both tfsa’s instead. (no attribution, no tax)

#56 Agio on 01.03.14 at 8:54 am

Turner-an email from ‘Scott’, a responsible no head up his ass person as opposed to the usual pretendland millionaire high expectation underachieving fktards?
What are you doing? Trying to increase your readership?

Gee, I wonder which group you belong to. — Garth

#57 Grantmi on 01.03.14 at 9:14 am

Hk.. Holy crap… Devo’s dumping like crazy.

Hong Kong dwellings from one-bedroom apartments to 5,000 square-foot (465 square-meter) houses are on offer at discounts of as much as 20 percent as developers brace for a plunge in prices, which have more than doubled since 2009.

To read the entire article, go to http://bloom.bg/19MssIh

#58 Dr. Doofenshmirtz on 01.03.14 at 9:30 am

#55, read the interpretation bulletin that I linked. It specifically states that only the last three years of contributions go back to the original taxpayer. After that, the other contributions belong to the spouse.

For example, if Scott’s wife attempts to take out $20,000 and only one $1000 deposit was made to the account (in Scott’s name) within the last three years … the other $19,000 (after putting the numbers in the right places) becomes income for her. Any other contributions outside of the 3 year period are not automatically poisoned by the $1000 deposit.

#59 James on 01.03.14 at 9:49 am

#17 T.O. Bubble Boy

There is no bubble obviously.

#60 tb on 01.03.14 at 9:53 am

Good articles comparing bonds & bond funds:
http://canadiancouchpotato.com/2010/03/29/bonds-v-bond-funds/
http://www.cbsnews.com/news/bonds-vs-bond-funds-an-easy-choice/

It’s not such a clear cut choice…

#61 Holy Crap Wheres The Tylenol on 01.03.14 at 10:00 am

It will be slow but some of these jobs are creeping back to North America and north of the border too! Now we just need to get some jobs to creep back further north!

http://www.appliancemagazine.com/editorial.php?article=161

#62 Castaway on 01.03.14 at 10:12 am

#27 Calgary Conditional Owner on 01.02.14 at 10:50 pm

Hello Garth, I spoke to a bank today about getting a loan for a contribution into the spousal RRSP I opened for my wife. They would give me a LOC at prime rate if the funds are used on a RRSP investment plan with that bank in particular, do you think this is a good strategy?

Depends on the assets, and the plan. — Garth

Sounds like tied selling. Unethical at best and possibly illegal at worst! What say you Garth?

Dont buy their investment product. If that is how they sell it almost guaranteed to be uncompetitive with high fees!

#63 Holy Crap Wheres The Tylenol on 01.03.14 at 10:14 am

Scott is old school thinking, but he is correct in his plan of attack. I would really like to know how many of these younger couples would be willing to give up the second BMW and three times a year trip to Mexico in order to raise their own children? I never liked the idea of letting strangers raise and teach my children their own follies foibles. We decided to hunker down pay all of our debts off and then invest whilst one of us stayed home to raise the children. I worked but I have to say that now I am older I greatly appreciate playing with and teaching my grandchildren. Holy Crap what I missed with my own children you can not put a price on. It is priceless. So there it is yuppy puppy, gen Xers or what ever you younger ones call yourselves today.

#64 :):(Ying Yang on 01.03.14 at 10:26 am

#57 Grantmi on 01.03.14 at 9:14 am
Hk.. Holy crap… Devo’s dumping like crazy.
Hong Kong dwellings from one-bedroom apartments to 5,000 square-foot (465 square-meter) houses are on offer at discounts of as much as 20 percent as developers brace for a plunge in prices, which have more than doubled since 2009.

To read the entire article, go to http://bloom.bg/19MssIh

……………………………………………………………………….

My brother is a Manager of programing for a large bank in Hong Kong. His rental condo is going for around $1M USD. He just gave the landlord notice that he is leaving in 6 weeks as he is taking a new job position in Singapore. The landlord isn’t selling but he just raised the rent and the new tenant will pay around 10% more than my brother did. That’s what they do over there. The investors will hold onto their property believe me this is the way it is done in Hong Kong.

#65 prairie person on 01.03.14 at 10:27 am

I currently have my retirement income being managed for a yearly fee. However, my manager has left and the account transferred to someone I don’t know. I’ll meet with him to discuss the account and his strategy. However, how do I go about getting another opinion on the account? Can I pay someone to look at it and assess it and, if so, how much is it likely to cost?

The person managing your finances is way more critical than the company holding the accounts, so your strategy is sound. A fee-for-service advisor (charging by the hour, maybe $150 per) will give you a paid opinion, but they are scarce, simply because they do not usually manage money and have limited functionality. A fee-based advisor (typically paid via a small percentage – around 1% – of the portfolo) will do the same, in which case there should be no cost. — Garth

#66 kitchener on 01.03.14 at 10:47 am

Garth will you be making available to your blog the year end report for 2013? Or will we be able to access it by googling “turner tomenson model portfolio”?

http://www.turnertomenson.ca/pdfs/YEAR_END_REPORT.pdf

As an aside, for anyone looking for etfs to hold in your own portfolio, this would be a good place to start (but be aware that this report is now a year old…)

Yes, this will happen. — Garth

#67 Life's a supermartingale on 01.03.14 at 10:59 am

Garth, you do not do better by owning individual bonds rather than owning a bond fund in the same credit rating. If it were so, we would have true arbitrage opportunities in the market (short the ETF, go long the bond portfolio).

I did not claim you do better with a bond than a fund. I said bonds mature and index funds do not. — Garth

#68 Retributor on 01.03.14 at 11:04 am

Garth, I love your blog but I have to call you out a bit for leading people away from bonds. While it is fine to be a little concerned given the low rate environment in which we find ourselves, long-term investors need not drive themselves into fits of existential angst over duration risk.

Yes bond funds maintain constant duration. Yes individual bonds (bought at par) will redeem at par. Yet such a bond will still have interest rate and reinvestment risk. Put simply, unless duration is constantly being lowered, coupons and principle will have to be reinvested (and become subject to the same forces affecting bond index fund NAVs). Meanwhile, the bond fund does not mature, but the downward adjustment in principle is compensated for with higher coupon payments. Total fund returns should closely match the yield to maturity at time of purchase over the period of the fund’s weighted average duration. Over the long-term, the differences between a bond index fund and a diversified bond portfolio of similar credit quality and duration will be pretty much the same (Vanguard has a paper on the topic).

Investors should match the duration of their bond investments to their cash needs. An investor with a time horizon longer than the duration of their bond fund need not overly worry about losing money to market fluctuations.

#69 Happy Renting on 01.03.14 at 11:21 am

#18 – Detalumis

Because inadequate insurance should the sole family income earner die or become disabled, demand drying up for his skill set, and marital breakdown are not things that happen in the real world. There are always well-paid jobs for middle-aged people who have been out of the workforce for decades, don’t you know?

They may well have a back-up financial plan that isn’t social assistance (family money, bigger nest egg, wife has professional credentials at lower risk of obsolescence, etc.) Otherwise, I agree it’s a bit risky to depend entirely on one income, as nice as it is to have one parent at home full-time. Maybe they haven’t considered the risk, or don’t think anything bad will ever happen to them, or think the risks are worth not having their kids being “raised by strangers”.

#70 Daisy Mae on 01.03.14 at 11:23 am

#63 Holy Crap: “Holy Crap what I missed with my own children you can not put a price on. It is priceless…..”

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

Unfortunately, the ‘yuppy puppies’ won’t understand this until they themselves are grandparents.

#71 gladiator on 01.03.14 at 11:23 am

Wooo hoo! America is coming back!

GM sales in December down 6.3% from Dec 2012 while they were expected to grow by 1.5%.
Toyota sales down 1.7% while expected to grow by 3.1%.
Ford sales are up 1.7% while expected to be up by 4.3%.

That’s some very slow recovery…

#72 Happy Renting on 01.03.14 at 11:37 am

#15, 25 Tri-Guy

It gets worse. The 2.5% is only on new deposits and only until April 30. If you’ve been on top of your TFSA that adds up to about $20 extra on what you would have earned with ING on 2014’s $5500, anyway. It’s appealing marketing, though.

#73 Kevin on 01.03.14 at 11:48 am

@Not 1st (#21)

Because raising a child is the most important job in the world and nothing can replace a parent at home.

Right. Parents are heroes, every child is a special and precious gift, blah blah blah.

There’s a difference between taking a few years off until the child is school-aged, then dipping your toe back into the workforce part-time, and completely exiting the workforce for the full 18 years.

It amazes me to see young women spending 4 years in university, racking up tens of thousands of dollars in student loans for an education they only use for 2-3 years, until they get pregnant then quit before they’ve even finished paying back their student loans. What was the point of that expensive education if you’re not even going to use it?

I actually agree somewhat with Detalumis. The world has changed, it’s not 1950 anymore. There are risks. It just makes sense for both parents to keep their skills fresh, lest an unexpected job loss necessitates the other to pick up the slack and effectively “switching roles.” People can work part-time without having their kids “raised by strangers.” School eats up a big part of each day, plus a couple of hours at a friend’s house or caretaker’s until one parent comes home, or even adjusting their schedules to minimize overlap (Dad goes to work at 7, Mom stays back to get the kids off to school, Dad gets home at 4 to greet the kids, Mom works till 6). Maybe working from home, starting a home business, freelance work, part-time consulting, a Mary-Kaye style MLM, whatever. She can do SOMETHING besides just being an anachronistic housewife.

#74 Shortymac on 01.03.14 at 12:09 pm

I have a question about RRSPs, I’m a US citizen and Canadian PR.

I have a Canadian pension from an old job I need to roll-over, can I roll it over into my Canadian hubby’s RRSP to avoid US tax implications down the road?

Moreover, from this article is sounds like I can contribute to my hubby-owned RRSPs and TFSAs, take the Canadian deductions and avoid the US tax implications (Hubby is not a US citizen).

The pension cannot roll into your husband’s registered plan. But you can contribute to his spousal, plus gift him money for the TFSA. — Garth

#75 Ralph Cramdown on 01.03.14 at 12:13 pm

#73 Kevin — “It amazes me to see young women spending 4 years in university, racking up tens of thousands of dollars in student loans for an education they only use for 2-3 years, until they get pregnant then quit before they’ve even finished paying back their student loans. What was the point of that expensive education if you’re not even going to use it?”

Assuming that the cad that knocked her up has a professional degree and prospects, and he married her, she got full value out of that degree. Assortative mating, dude.

#76 HD on 01.03.14 at 12:19 pm

@ #73 Kevin on 01.03.14 at 11:48 am

Woaw Kevin,

You made some valid points but my prediction is that you’ll get some heat for that post.

Just a whisper, I hear it in my Ghost ;)

Best,

HD

#77 Smoking Man on 01.03.14 at 12:28 pm

58,742,758,520………… Sqaure miles of the sun
196,940,400…………….. Sq Miles Earth
27,878,400……………… Sq Ft in Sq Mile
2,787,840………………… Amount People per 10 Sq FT in Sq Mile
8,000,000,000…………… # of People in world
2,870………………………. Sq Miles  required for all people
54…………………………… 54 miles x 54 miles to  fit all people in.

0.000015% off people occupining 10 Sq feet of the earth

So looks like sun has a bigger shot at impacting the climate than All the people of the world, 57 × 57 miles. Deep.

#78 No debt on 01.03.14 at 12:51 pm

#73 Kevin

Pull your head out of your ass!

#79 No debt on 01.03.14 at 12:54 pm

#73 Kevin

Sorry I meant to pull your head out
Of Detalumis ass!!!!

#80 Daisy Mae on 01.03.14 at 12:57 pm

#73 Kevin: “School eats up a big part of each day, plus She can do SOMETHING besides just being an anachronistic housewife.”

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

Well, that’s important — ‘eating up the day at school’. And parents running themselves ragged as in ‘ships passing in the night’. LOL

#81 Shortymac on 01.03.14 at 1:01 pm

@ #63 Holy Crap Wheres The Tylenol

As someone who is a member of the younger generation, trust me none of us has a BMW.

The vast majority of young couples need both working to cover the higher costs of rent, college/university, decent food, and depressed wages.

Most young families are barely scraping by unless they are subsidized by their parents, the hipsters you see in the condo developments aren’t average.

#82 Valleyboy on 01.03.14 at 1:33 pm

Great articles lately Garth. Man allot of bashers yesterday. Anyway have a great new year and thanks for all you do. Now ill go back to mining my litecoin. Btw one of the best investments of 2013. Lets hope for 2014 also.

#83 Peter Anderson on 01.03.14 at 1:35 pm

Any more ‘jokes’ making fun of people who care about animal suffering? How about a few racist ‘jokes’ to alienate even more people?

#84 T.O. Bubble Boy on 01.03.14 at 1:36 pm

@ #46 Infused with Opiates on 01.03.14 at 12:29 am
17 TOBB – I didnt know Carney was in charge of that. I thought he ran the central bank while looking cool like he
did here.
————————
Agreed – he is head of The Bank of England vs. Finance Minister… but they are tied at the hip like Flaherty and Carney were back here in Canada.

I guess my point is: he is overseeing a serious housing bubble in the UK, and is in the middle of lending standards that seem (at first glance) far more extreme than here in Canada.

#85 Oceanside on 01.03.14 at 1:41 pm

I have known many families like “Scott’s” over the years, most make more like $50,000+ per year but managed to raise children and have nice, quality lives. We alternated jobs and managed to raise our daughters with very little daycare outside the home. I suspect that a lot more “Scotts” read this blog than the seemingly successful millionaire investors that comment here daily.

#86 Tony on 01.03.14 at 1:41 pm

Thee elusive “Furst Poast”. Not this time.

#87 Deckard on 01.03.14 at 1:44 pm

@ 77 Smoking Man

What about Fossil Fuels impacting the planet?
According to the Hurbert Oil production Curve, the world presently consumes roughly 1 cubic mile of crude oil per year. Since the beginning of the industrial revolution, the world has consumed roughly 50 Cubic miles of oil. Lake Nippigon contains 59 Cu mi of water. Go to Google maps and locate Nippigon and the zoom out as much as you can.

#88 Suede on 01.03.14 at 1:48 pm

Smokey, you fail to realize the power of herd thinking that you have awakened people to. The climate activists actually are CONVINCED they are right about it!

Wonder what they’re going to say when football players get hypothermia in Green Bay on Sunday. Carbon Factories must have been shut down or their cause has already done it’s job and cooled the worlds temperatures lol. **Pats on the back all around**

http://cnsnews.com/news/article/patrick-goodenough/americans-spent-745b-3-years-helping-other-countries-deal-climate#

#89 Tony on 01.03.14 at 1:48 pm

Re: #65 prairie person on 01.03.14 at 10:27 am

Being from the prairies you should know about oil. Oil leads stocks downwards. There are no positives for stocks nor for oil. Just short oil then you can hire someone that charges a lot more to manage your money.

#90 Renter's Revenge! on 01.03.14 at 1:52 pm

Ralph (#32) and Son of Ponzi (#43):

Two quotes from the same writer that seemed to fit your discussion:

“The future is already here — it’s just not very evenly distributed.”

and

“the exceedingly rich were no longer even remotely human”

– William Gibson

#91 OttawaMike on 01.03.14 at 1:53 pm

#77 Smoking Man on 01.03.14 at 12:28 pm

Hey Smokey,
97% of the engineers say the bridge is going to collapse and 3% say it is OK. I am not willing to drive over that bridge.
https://en.wikipedia.org/wiki/File:Climate_science_opinion2.png

http://climaterealityproject.org/

I notice you consistently fail to mention the hidden subsidies and tax breaks the carbon fuel industry enjoys while decrying green energy alternatives and carbon tax schemes.

Even ignoring the GHG perils, why should we continue to burn fuels from the industrial revolution such as coal?
Is it not time to move forward?

For a smart guy you sure sound like an old white male dinosaur sometimes.

#92 mortgagebrokeron on 01.03.14 at 1:55 pm

What about floating rate funds, don’t they seem like a good play for a rising rate environment?

#93 Smartalox on 01.03.14 at 2:02 pm

This has been the greatest negative side-effect of two-income families – that now, two incomes are required in order to keep current. Instead of individual incomes rising to keep pace with rising costs of living (or if incomes are not not rising, then keeping fixed cost inflation under control), incomes have remained stagnant, but with close to twice the number of people earning income to cover close to twice the costs.

Also, with more people owing money, it’s probably why this generation sees interest rates around 3% to 5% instead of 6% to 10%.

This may also explain why income inequality has become so extreme in this past generation: two people in a family owing debts lose money at twice the rate of a two-income household with no debt, and gain far less over time than a two-income household with investments.

I’ve always wondered about the figures for income inequality. Sure there are the extreme cases of billionaire CEOs and impoverished service workers, but I could never reconcile the relatively small number in each category with the size of the gap, and why those figures continued to diverge. Now I think that I get it:

The key to inequality is not in terms of income, but in terms of debt. Someone with a high income, but also high debt is losing wealth at a greater a rate as someone with a lower income an declining debts.

#94 Pr on 01.03.14 at 2:04 pm

Look at the price of real estate across Canada. Its now a real nightmare! Nobody seams to care.

#95 jess on 01.03.14 at 2:15 pm

“We’re in a completely different context today” because of the Offshore Leaks revelations, Belgium’s secretary of state said. “It’s a new world.”

REALLY ???

Grantor Retained Annuity Trust (GRAT), as an e.g. Sheldon Adelson
http://www.bloomberg.com/news/2013-12-17/accidental-tax-break-saves-wealthiest-americans-100-billion.html
===============
Singapore-based Portcullis TrustNet
According to ICIJ’s investigation, Deutsche Bank’s Singapore branch, for instance, is found to have helped create or manage 309 offshore companies and trusts in the British Virgin Islands and other tax havens by registering them with Portcullis TrustNet. Public records do not show any business activities for most of these offshore entities. Portcullis TrustNet is also implicated in various offshore accounts scandals of public officials and wealthy individuals and families based in Indonesia, Thailand and the Philippines. ..”

Friday, January 03, 2014
Singapore: The Rise and Rise of Asia’s Switzerland
http://taxjustice.blogspot.ca/
——————————————————-

“De offshorization”
http://www.themoscowtimes.com/business/article/deputy-prime-minister-liquidates-offshore-assets/492020.htm

…”The assets were originally registered abroad, he said, to ensure their full inheritance by his children, which he said they had found impossible to do in Russia. ”

Read more: http://www.themoscowtimes.com/business/article/deputy-prime-minister-liquidates-offshore-assets/492020.html#ixzz2pMOCxrRA

The Moscow Times
•The Deputy Prime Minister of Russia, Igor Shuvalov, has repatriated his and his wife’s offshore assets to comply with a Russian law prohibiting state officials from holding their wealth abroad. An offshore company belonging to Shuvalov’s wife, Olga Shuvalov, was revealed in April by ICIJ. Shuvalov, a close ally of President Vladimir Putin, had pledged to return the assets to Russia soon after they were exposed.

The move comes during a broad crackdown on offshore tax avoidance by Putin. Last week, Putin announced that Russian-owned companies registered in offshore jurisdictions would be forced to pay Russian taxes, and that companies registered abroad would be barred from getting funding from the budget or from state banks
http://www.icij.org/blog/2013/04/release-offshore-records-draws-worldwide-response

#96 gladiator on 01.03.14 at 3:19 pm

On this normal thing called “climate change”:

1. Earth’s atmosphere weighs 5.15 * 10^18 kg or 5.15 * 10^15 tonnes (source: http://en.wikipedia.org/wiki/Atmosphere_of_Earth)

2. The world CO2 emissions in 2012 were estimated at 34.5 million thousand tonnes, which is 34.5 * 10^9 tonnes (source: http://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissions)

3. The percentage of CO2 released in 2012 is (using the numbers above) equal to 0.000669903%. That means that is we keep emitting the same amount of CO2 into the atmosphere as we did in 2012, in 1500 years we will emit exactly 1% of the weight of the atmosphere.

Make your own conclusions and when TPTB impose a carbon tax on you think why they do that. Al Gore’s house was lit like a Christmas tree during Earth Hour last year – pics are online, find them yourselves.

#97 Canadian Watchdog on 01.03.14 at 3:24 pm

#77 Smoking Man

So looks like sun has a bigger shot at impacting the climate than All the people of the world

Right you are Smoking Man chart. But the tree huggers will still insist they're right because the real agenda behind it, as we know it, has nothing to do with climate and has everything to do with sustainable profit and control.

But they're failing big time. Ever since Copenhagen when the elite proposed a global environmental tribunal body to punish those who harm the earth, it's all gone downhill from there as the BRIC nations sensed a trap and pretty much told them where shove their climate change theory.

Everything we're seeing today is explained in this book written in 1944 by Karl Polanyi, stating there would be a clash of movements that ended up with no winners, resulting in an era of social and economic turbulence.

#98 Jeremy on 01.03.14 at 3:26 pm

Garth, you write frequently about REITs, ETFs, GICs, and bonds. It’s time you devote a paragraph to MICs.

#99 James on 01.03.14 at 3:27 pm

#94 Pr on 01.03.14 at 2:04 pm

It’s the new normal. And if Canadians don’t buy, there will always be people from other countries wanting to park their money here. It’s no secret that Toronto and Vancouver core is a hot market. QE from the past few years also made it easier too. There is no turning back, stable price moving forward.

#100 angela on 01.03.14 at 3:29 pm

Most people believe that when inflation hits, prices have to go higher. This is true, but higher prices can be manifested in multiple ways. Firms usually do not simply raise prices in nominal terms as price elasticity can kill revenues because it would hurt sales.

Instead, companies resort to a number of strategies to maintain profit margins without hurting their sales. One of them is to simply leave part of a package EMPTY, thereby selling LESS product for the SAME price (a hidden price hike).

In many packaged products, as much as 50% of the contents is just empty space, an investigation by Consumer Reports reveals. And we consumers are buying that nothingness every day.

clever ain’t it ?
http://www.dailyfinance.com/2009/12/08/how-much-for-the-air-as-much-as-half-of-food-packaging-is-empty/

#101 gladiator on 01.03.14 at 3:35 pm

My kid is brainwashed at school about climate and reduction of CO2 emissions and recycling etc. While I agree with reduce reuse recycle, I just don’t like the aggressive way that all this is shoved down the kids’ throats. So, to counterbalance it a bit I tell my kid that if we didn’t emit CO2 into the atmosphere, the trees that need it to exist would die off. So, by emitting CO2 we take good care of trees and other vegetation and they are good with us as well by consuming it and releasing oxygen that we need to breathe. It’s a win-win!

#102 Smoking Man on 01.03.14 at 3:45 pm

#91 OttawaMike on 01.03.14 at 1:53 pm

My post was inspired by the polar bear pic. Up top.

And those scientist from England that went down to Antarctica to prove ice was melting and got swallowed up by an Ice Monster.

If the engineering people evaluating the bridge where funded and reward for coming to a conclusion mandated in the interest of the funders, Carbon Tax.

I would drive over the bridge. After a quick look at what
University of Google says, Also the 93% to 3% is a bit off.

More like 50-50.

But ya cleaner air better, but not at expense of giving competition advantage to our trading partners.

#103 Knosty in Tax Grab Land on 01.03.14 at 3:48 pm

#77 Smoking Man on 01.03.14 at 12:28 pm — “Deep.”

Spot on. Too deep for simpletons like moi. BTW, how the hell are I? You’re in pretty good shape! In keeping with this straight, albeit circular line (CC + big pharma), the following is neat:

THOUGHT FOR THE DAY! — “There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution.” — Aldous Huxley, Tavistock Group, California Medical School, 1961

Keeping in context, this — Carbon Tax (Must be good, ‘coz it’s a tax.) Cheers!

#101 gladiator on 01.03.14 at 3:35 pm — “So, to counterbalance it a bit I tell my kid that if we didn’t emit CO2 into the atmosphere, the trees that need it to exist would die off.” — Ssshhh, you may be right on that, but don’t shout it out too much — all those namby-pambies (stuck in the ice at Antarctica) will cry foul and demand more taxes!

#104 Holy Crap Wheres The Tylenol on 01.03.14 at 4:01 pm

#91 OttawaMike on 01.03.14 at 1:53 pm
#77 Smoking Man on 01.03.14 at 12:28 pm
Hey Smokey,
97% of the engineers say the bridge is going to collapse and 3% say it is OK. I am not willing to drive over that bridge.
https://en.wikipedia.org/wiki/File:Climate_science_opinion2.png

http://climaterealityproject.org/
I notice you consistently fail to mention the hidden subsidies and tax breaks the carbon fuel industry enjoys while decrying green energy alternatives and carbon tax schemes.
Even ignoring the GHG perils, why should we continue to burn fuels from the industrial revolution such as coal?
Is it not time to move forward?
For a smart guy you sure sound like an old white male dinosaur sometimes.

Hello Ottawa Mike,

Having worked on a huge solar project down in Arizona back about ten years ago I can tell you that moving forward will never happen until we run out of easy, cheap fuel. I worked on a program with the Sterling Engine at S.E.S. It was perfect, clean, renewable, non-impacting on the land and water, but it was expensive to get the initial systems going. These power plants were absolutely astounding. Then something called the economy got in the way. So I came to the resolution that I still need to drive a car, I still need to heat my home, I still require electricity as we all do. So when the tree huggers heat their homes with a wood stove and solar panel, get a horse and buggy to drive to work, or take a hot air balloon to attend their global warming conferences, then and only then will I join them. Until then we will burn baby burn……….oil that is!

#105 Agio on 01.03.14 at 4:05 pm

Turner-an email from ‘Scott’, a responsible no head up his ass person as opposed to the usual pretendland millionaire high expectation underachieving fktards?
What are you doing? Trying to increase your readership?

Gee, I wonder which group you belong to. — Garth

—————————————————————–
Yup, led with my face for that one….

#106 Mister Obvious on 01.03.14 at 4:10 pm

#100 Angela

I bought a huge plastic container of protein powder a while back. Imagine my disappointment when I got it home and found it to be just over half full.

Next time I was in the store I complained. Their response was that the product is sold by weight, not volume and I got exactly the weight I paid for.

Of course, there was no mention of the extra shipping volume and packaging material costs that must be included in the price.

Shady marketing. Reminds me of another industry we often complain about here.

#107 Andrew Woburn on 01.03.14 at 4:16 pm

#13 economictsunami on 01.02.14 at 10:15 pm
Interesting read…

Four changes CMHC needs to make to rein in its mortgage market influence: http://tinyurl.com/mpckb7j
============================

Interesting? How about terrifying?

Quote – a borrower can obtain a prime, CMHC-insured mortgage with as little as a pay stub and a job letter, which would make it a low-documentation Alt-A mortgage by U.S. standards

Quote – one highly respected Canadian mortgage website suggested that it [“soft fraud”] is “one of the most widespread and under-reported problems in mortgage lending” and that it is “surprisingly common these days.”

Quote – Prior to 2003, CMHC had a regional mortgage cap that set a maximum dollar amount on the size of mortgage they would insure. … In what can only be described as a massive policy blunder, this cap was eliminated in 2003.

Quote – CMHC currently has a program that allows buyers to purchase a second home with as little as 5 per cent down.

And on and on. So we are all on the hook for an insane and totally unnecessary debt binge that will inevitably financially cripple thousands of young Canadians. We pay government officials big bucks to do that? No wonder Carney got out of town.

#108 45north on 01.03.14 at 4:17 pm

Happy Renting: I agree it’s a bit risky to depend entirely on one income

Kevin: It just makes sense for both parents to keep their skills fresh, lest an unexpected job loss necessitates the other to pick up the slack and effectively “switching roles.”

Elizabeth Warren compares the present day family where both husband and wife work to the 1960’s family where only the husband worked. The present day family has to have 104 paychecks to make the mortgage whereas the 1960’s only needed 52 paychecks. Moreover in case the father was unemployed the wife could go to work.

http://www.youtube.com/watch?v=akVL7QY0S8A
(57 minutes)

As far as keeping your skill sets current, it’s very much a moving target. More enduring is a stable personality.

#109 TEMPLE on 01.03.14 at 4:20 pm

#101 gladiator on 01.03.14 at 3:35 pm

So, to counterbalance it a bit I tell my kid that if we didn’t emit CO2 into the atmosphere, the trees that need it to exist would die off. So, by emitting CO2 we take good care of trees and other vegetation and they are good with us as well by consuming it and releasing oxygen that we need to breathe.

That is pretty stupid. Trees and other vegetation were here a long time before us gracious humans started providing our precious CO2. I hope your kid is smart enough to see through your preposterous logic.

TEMPLE

#110 Penny Henny on 01.03.14 at 4:21 pm

re climate change-
There has been a great social experiment going on for years and it is all in the name of how to control the people and to make them followers.
Now maybe I’m not old enough to know better but I started to notice it with the exploitation of political correctness. Now PC started out innocently enough and I guess there was good reason. You know, stuff like getting rid of the use of the N word and so on. But then it took off and then there was a politically correct term for everything.
That when I realized it is easier to brainwash a large group of people than it was to convince an individual.
So now that those with the agenda know the formula they will continue to fight to control the minds of the weak. All in the name of a greater good.
Climate change, also known as Global warming with intermittent Global wetting and for good measure let’s include some Global cooling.
As Count Floyd would say, that’s scary kids.
Oooooooooowwwwwwwwww

#111 Penny Henny on 01.03.14 at 4:22 pm

Time to re-read George Orwell’s 1984.

#112 not 1st on 01.03.14 at 4:33 pm

Regarding borrowing to invest, to get a prime plus one deal you would have to use your house. The CMHC backing allows for this extra discount. Any other asset put up like a piece of raw land or something probably going to earn you a 4-4.5% rate.

Its too much risk to get the return from capital gain so now you have to find an ETF with a 1.5-2% dividend spread and there aren’t a lot.

Unsecured LOCs for people of good credit are routinely available at prime plus one. — Garth

#113 John on 01.03.14 at 4:35 pm

#85 Oceanside

I agree. I also take with a grain of salt those on this blog that say they are part of the “1 percent”. In my experience I have found the more people mention they have money the less likely it is to be so.

#114 Mister Obvious on 01.03.14 at 4:39 pm

#99 James

“It’s no secret that Toronto and Vancouver core is a hot market.”
—————————————

Toronto perhaps. I’m not so sure about Vancouver. Average prices seem to be falling slightly and sales are way down.

I know one person who finally sold on the west side last summer. After many months on the market he ended up taking a 17% haircut from what was supposed to be ‘demonstrated market value’. So much for the hot core market.

Others I know in outlying Vancouver municipalities have given up trying to sell after similar lengthy listing periods.

The ‘hotness’ of the market that you speak of is not strikingly apparent to me these days.

But… when I sold my SFH in 2010, my agent had no trouble organizing a bidding war. Today he would laugh at that suggestion.

#115 Penny Henny on 01.03.14 at 4:44 pm

Climate change. I blame that Al Nino guy.

#116 1950 on 01.03.14 at 4:49 pm

Well detalumis, Scott here. You know, the 1950’s, fedora wearing, tax evading, low life with the wife slave.
In light of your insightful comments I went out to the stove (where you apparently think my barefoot, pregnant, very childish 28 year old wife is chained) and we talked it over devising a plan to leech even more money out of the “system”. Obviously in this modern age of 2014 no wife of mine is getting a free pass suckling the teet of my hard work. I unlocked the shackles and she ran to the bedroom to retrieve her pant suit. We are going to sell the house cash in the accounts and head to Jamaica for four months (the weather out here has been terrible as of late) when we get back (broke) we’re financing a new carivan, moving into government housing and taking up two seasonal jobs to ensure we get the most Employment insurance possible. We’ll piss and moan about how the little guy can’t get ahead for 40 years and subsequently retire on every form of social assistance you can imagine. But to throw you a bone I’m going to take up smoking, to ensure I pay just a little sales tax…but not too much.
Ok, not really but…
I usually just sit back and take all the comments in but I thought since you were on such a roll I’d give you a little more insight into my financially irresponsible life. Two years ago we bought a 1500 square foot two story house from two pleasant ladies, delighted to cash in on daddy’s estate, for around 65% of value. We placed 20% down. I own a paid for 6 year old vehicle and my wife stays at home because it’s a lifestyle choice we BOTH enjoy. And just because I think it will really annoy you I’ll let you in on a little secret…my “unemployable” wife will probably never re-enter the work force because we both like it this way.
I’d like to thank you for your comments because it makes us low income losers more powerful than you’ll ever know. Since I am making the worst financial mistakes ever I’ll enjoy life down here at what you perceive to be the bottom of the food chain. I’m sure in some magical way your very proud of yourself for making the world a better place with you near sighted, closed minded (and likely liberal) opinion.

#117 1950 on 01.03.14 at 4:51 pm

Sorry for the long comment…I’ve been cursed from birth with a brain and a backbone.

#118 gladiator on 01.03.14 at 5:04 pm

@102 TEMPLE:
I see you didn’t catch the humour in my post. Of course, I could tell the kid about an agenda pushed on us all (yourself included) to suck more taxes out of our pockets to make the rich and powerful even richer and even more powerful, but she won’t understand that. I will explain it all to her later.
Relax, TEMPLE, have some fun. There are cooler things than calling others stupid, eh?

#119 Grooby on 01.03.14 at 5:22 pm

Interesting how the language of those who post here who disagree with climate science is always full of bluster and fake machismo. As if believing in scientific consensus is somehow ‘weak’ and unmanly.

I think having your heading stuck in the ground the unmanly play, nor wanting to leave the world in a better place for your kids than when you arrived.

Recent US studies show that those who believe climate science is hoax on average have lower IQ’s than the general population. There’s also a strong correlation between climate change denial and believing in creationism and intelligent(!) design.

They also typically vote Republican and probably watch Duck Dynasty. Go figure.

#120 Nobody on 01.03.14 at 5:46 pm

Garth,

I didn’t contribute to my TFSA last year. Can I make contributions of $1000 per month for 11 months for 2013 and 2014.

Thanks and keep up the good work.

Yes. — Garth

#121 Iconoclast on 01.03.14 at 6:13 pm

Re: #61 Tylenol

> http://www.appliancemagazine.com/editorial.php?article=161

Dude, that article is ten years old!

#122 Spiltbongwater on 01.03.14 at 6:29 pm

Unsecured LOCs for people of good credit are routinely available at prime plus one. — Garth

Even if I slept with [email protected] I don’t think I could get that rate for unsecured LOC.

Of course not. She wants something more substantial. — Garth

#123 old geezer on 01.03.14 at 6:29 pm

I may be missing something here with Scott’s scenario. It is my understand that all RRSP moneies, spousal or not , are taxable upon withdrawal. I realize that his wife is apparently not working (therefore no income), and with the approx. $11000 personal exemption, would pay no tax on any income less than that amount. However, without the RRSP income, Scott can fully claim her as a dependent in addition to his own personal exemption. As soon as she earns income from the RRSP withdrawal, Scoot loses the ability to claim the amount she earned as a deduction. It seems to me that more tax might be paid when all is said and done, since Scott is in a higher tax bracket. Probably I missed something obvious. Help….

#124 Iconoclast on 01.03.14 at 6:33 pm

Regarding the science of climate change… it seems to me that if the models they’ve been pushing are accurate, the die is cast.

By that I mean that so much CO2 has been pumped out already that the climate will inexorably change, and there’s nothing we can do about it now. So turning our society upside-down to reduce output by 10% or 20% would be a tremendous misuse of resources.

Instead we should be focusing on making our society less brittle when disasters occur and on handling the ongoing situations as, for example, low-lying countries are flooded.

To that end, I myself will be opening a camp for naive Dutch teenage girls who are displaced by the advancing North Sea.

I await the call from Rideau Hall on my Order of Canada…

#125 Smoking Man on 01.03.14 at 7:36 pm

#119 Grooby on 01.03.14 at 5:22 pm

What’s wrong with duck dynasty, and Republicans.

I hear they give out man
purses and bycical pumps out at climate conventions.
……………..

Now if we drew a line, from say pickering across the lake to USA. We could fit the entire population of the world in the lake going West.

Look up to the sky, that’s a big ass sun.

Why is it you climate alarmists can’t do basic deductive
reasoning.
Obviously some loot to be made pushing your, the science is settled fantasy. Let me in on it, I will back you.

But if you believe that a 1/4 of Lake Ontario full of people has more influence on climate than a big burning bull in the sky, 100 time the size of this blue marble, I suggest you have your marble examined

#126 BillyBob on 01.03.14 at 7:42 pm

Hmmm, was home visiting the folks in Victoria while on holiday from Dubai, where I live. They just received their property tax assessment and it’s down by a full $100,000 from the year prior – 20%! Prime location in Saanich (Victoria suburb).

I may be able to afford to move home yet!

#127 Smoking Man on 01.03.14 at 7:47 pm

On more thing Groovy..

It’s just made the headlines, those British alleged scientist who’s ship got swallowed up by an ice monster, well there rescue ship has encountered yet another ice monster an are trapped again

Ba Hahaha.

You guys kill me. Yup the ice cap is melting…….. The only think melting is the junk science…

If they where real scientists they would have encrypted there emails.

You know, hide the decline…

#128 Smoking Man on 01.03.14 at 8:15 pm

Garth you read G&M that Vancouver sales up 71%

Is that even posable?

December of 2012 was a disaster. Sales this year were 800 units higher. — Garth

#129 Tony on 01.03.14 at 8:55 pm

Man, I need stop making all these predictions. For some reason, none of them are coming through.

#130 Daisy Mae on 01.03.14 at 8:57 pm

#108 45North: “Elizabeth Warren compares the present day family where both husband and wife work to the 1960′s family where only the husband worked. The present day family has to have 104 paychecks to make the mortgage whereas the 1960′s only needed 52 paychecks.”

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

There were many, many changes in the sixties — hippies, ‘free love’, Woodstock. Wages and costs began to leap ahead….

So which came first, the chicken or the egg?

#131 Daisy Mae on 01.03.14 at 9:31 pm

#100 Angela: “One of them is to simply leave part of a package EMPTY, thereby selling LESS product for the SAME price (a hidden price hike).”

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

The product initially takes up all the space in the package. It settles. Result? Empty space. It’s priced by weight. Nothing sinister about it.

#132 Daisy Mae on 01.03.14 at 9:39 pm

#100 Angela, what’s more interesting is the switch to metric. Prices remained constant, sizes of everything diminished. A neighbour recently commented: “Isn’t this can smaller?” So, maybe the deception is still happening. I’ll have to check it out someday….

#133 jeffrey on 01.03.14 at 10:40 pm

so garth when is the day of house prices to drop im tired of renting !

#134 Cici on 01.04.14 at 6:48 pm

#119 Grooby

Thank you…finally some lucidity.

Climate tax or no climate tax, the average joe will still get fucked and the mega rich will continue to exploit both the tree huggers and the macho-duck climate-change deniers who think they are smarter than the rest.

#135 Cici on 01.04.14 at 7:00 pm

#125 Smoking Man,

If you seriously think that human bodies alone are responsible for co2 emissions, I’d suggest you are the one with missing marbles.

To go back to your theory, for a fair comparison, try dumping the world’s population, their SUVs, their sewage, all of their worldly goods, and all of the industrial fumes, chemicals and oils and factories associated with producing those goods.

I would just love to see what that lake would look like. I doubt you’d be able to sail on it.

#136 Peter on 01.05.14 at 2:10 am

I’ve been reading your blog for a long time. You seem like an intelligent, rational, somewhat compassionate guy who calls it like it is. Thank you for that. I would have voted for you no matter which party you had represented.