Family planning

GARAGE modified

Lorne and Jan had an ugly one a few weeks ago. She sees no reason whatsoever why they shouldn’t give their 22-year-old daughter (Krista) a cheque for $30,000 so she can buy a condo in downtown Vancouver. He sees tons of them.

“Well, where’s she going to get the money?” Jan asked, loudly. “The girl makes peanuts, and houses cost unbelievably more than they used to. It’s like we’re all trying to crush the kids. Besides, we have the cash, so why’re you being so cheap?” Lorne wasn’t buying it. “Nobody helped us buy our first home, and mortgages cost 12% then. If she can’t make it when they’re 3%, why are we doing this? Besides, you know I want to retire in a few years and we need every buck we can get. Mostly, why the hell does she need to buy a condo when she rents one?”

They asked me to get involved. I told them I recently died in a tragic dog-walking incident, and was sadly unavailable.

This kind of debate is everywhere. But often, it’s no debate at all. Still house-horny after all these years, misunderstanding the epic scale of their own retirement needs, and being the most interventionist, hovering, smothering parentals of all time, lots of Boomers just hand over the cash. Like they’re expected to do. A survey months ago found about a third of all first-time buyers in the country think the Bank of Mom should step up and throw them a free down payment.

Realtors, naturally, do too. There are claims that 50% of newbie buyers in the GTA, and up to 75% in Vancouver, get some or all of their starting cash from the wrinklies. In fact, without the flow of inter-generational money, real estate markets might now be in a nice correction – that would, ironically, do more than anything to get those extra-special, snowflake Millennials into their own little boxes at prices they could afford.

Some people think, correctly, the same Boomer mentality which helped goose real estate values almost 85% in the past decade is now further bloating and extending the bubble. The free-money-from-Mom not only fuels demand when price increases should have dampened it, but actually helps increase valuations. Worse, it may have a serious economic blow-back in a few years when the Snowflakes find the equity vanished as their condo values tank, move back into the basement, and help ensure their parents’ retirement spending is minimized.

Of course, the debate would also not exist if real estate values and mortgage rates had not travelled in opposite directions. Today houses are impossible to buy, but almost affordable to carry. The barrier to entry – even in a world where 5% downs and 95% loans are standard – is the minimalist deposit. Which begs a few good questions: if Junior was unable to put together twenty grand, why does he deserve a house? Is a free down payment a positive reinforcement of failure in a generation where you get a gold star for showing up? And why are we encouraging young people to trade in their mobility, freedom and career flexibility in exchange for mortgage payments and condo fees? Is this Mom’s way of ensuring Snowflake will never actually leave town?

Anyway, here are a few points to bear in mind when your kid bangs on you for money:

First, this is all about you, not your children. Most Boomers today only look affluent. Start scratching away at their net worth statements, and a far different story emerges – insufficient pensions, too much illiquid real estate wealth, few investments, financial illiteracy, no tax strategy, no plan. Many of them are peeling off precious money they simply can’t afford to part with, to children they have never been honest with about family finances.

Second, this could be the worst decision ever for your family. All your kids will (and should) expect equal treatment. The real estate market is not going to rise without end and by encouraging a child into a highly-leveraged situation you are setting her up for an unknown, but growing, amount of risk. Are you prepared to deal with job loss, rising mortgage rates or a kid who doesn’t understand what property taxes and strata fees are, let alone a Special Assessment? It never, ever ends with the first cheque.

Third, what about the shacking-up factor? If Snowflake has the BF move in for a few years, he becomes a common-law spouse with property rights under family law provisions. Suddenly the equity does not belong just to your child, but in the event of a break-up, all the debt might. This is why a gifted down payment is a bad idea. Make it a loan, which can be reclaimed against proceeds of a sale.

Finally, cutting a cheque sure doesn’t mean you won’t be asked to co-sign the mortgage. Any lender will want to know exactly where the funds came from. Your declaration that the money was a gift just underscores that Snowflake has zero assets and is probably a pretty crappy credit risk. Figure that one out before you do anything.

I’m so glad I was unable to address this topic.  Been on an empathy role lately.

294 comments ↓

#1 Oh no! on 02.07.14 at 6:56 pm

My condolences, so sorry to hear you expired!

#2 Derek R on 02.07.14 at 6:58 pm

Handing over a down payment is so not a good idea. I would hope that the children of such parents can see that for themselves and would refuse to accept one.

#3 Suede on 02.07.14 at 7:05 pm

Came here to read the comments from last night..
…Sees a brand new post.

The pathetic little joys in life.

This should be a meme. (C)

#4 Fzzzz on 02.07.14 at 7:14 pm

Great reply.

#5 zamman on 02.07.14 at 7:25 pm

Trying hard to get my 30 yr.old kids to open up a TFSA to invest. I think they prefer Banff on the weekends.
Wish me luck.

#6 xman on 02.07.14 at 7:32 pm

Hello Garth hope ur felling better
I understand what ur sayin and it makes sense.
I have kids (grown up and on their own) we assist but with limitations they have to be prepared to go it alone
I am just curious, do u have any children?
If not which im only guessing-What a waste of equity if u know what i mean.

#7 Ryan Perich on 02.07.14 at 7:35 pm

Garth wrote : This is why a gifted down payment is a bad idea. Make it a loan, which can be reclaimed against proceeds of a sale.

Ryan response : sometimes you don’t have a choice as a child of a boomer, as per your next paragraph

Garth wrote : Any lender will want to know exactly where the funds came from. Your declaration that the money was a gift just underscores that Snowflake has zero assets and is probably a pretty crappy credit risk.

the lender is not concerned with that, just concerned that there are no additional monthly debt fees not declared – and if it’s not a gift, the mortgage may be a non-starter.

#8 Randy Randerson on 02.07.14 at 7:36 pm

Moral of the story? Don’t procreate, and don’t treat your children as snowflakes.

#9 Mrs Riverview on 02.07.14 at 7:45 pm

Like the empathy role, Garth, always thought you were driven to help people, hence the blog.

A nice lady at the Credit Union told us that she routinely lends money to retirees, 40 to 100 K, secured by a mortgage on their house, long amortization. The cash is given to adult children, who use it as a downpayment on a house. I wonder what percentage of down payments are funded this way. It’s too bad this is all legal.

#10 Greed is God on 02.07.14 at 7:48 pm

Since you’re feeling generous, how about some advice on rebalancing an equity-heavy portfolio in the current climate? You said recently that no one should by bonds at the moment, but how to rebalance (or balance) if the fixed income stuff is currently a no-go? Cash out some equities and wait?

Freezing my ass off in Victoria :)

#11 recharts on 02.07.14 at 7:49 pm

#159 Realtor # 1 GTA on 02.07.14 at 2:51 pm
My buyers are willing to put more of their disposable income towards their mortgage.

They think “after 5, 10 years my mortgage will be cheaper”
and then I will be able to save or pay down dept. Also They believe that after 30 years they will have a million dollar home to sell and live off the profits.
——————-
I am with you bro. People should invest in Real Estate. The stock market and any other derivative products will never provide a ROI like below:

MLSnumber Address SoldPrice MLSContractDate SoldDate PublishedAsSoldDate
E2746452 39 Medway Cres 305000 24/09/2013 01/10/2013 04/10/2013
E2806242 39 Medway Cres 450000 06/01/2014 06/01/2014 14/01/2014

MLSnumber Address SoldPrice MLSContractDate SoldDate PublishedAsSoldDate
W2812005 473 Old Weston Rd 477500 15/01/2014 31/01/2014 04/02/2014
473 Old Weston Rd 345000 18/01/2013 28/02/2013 03/03/2013

MLSnumber Address SoldPrice MLSContractDate SoldDate PublishedAsSoldDate
W2787993 56 Greendale Ave 490000 18/11/2013 30/01/2014 31/01/2014
56 Greendale Ave 330000 07/05/2013 21/05/2013 23/05/2013

#12 jan on 02.07.14 at 7:54 pm

This is why a gifted down payment is a bad idea. Make it a loan, which can be reclaimed against proceeds of a sale.

Yes but in that case if its a loan the bank will not advance the mortgage monies hence the necessity to lie is always there.

#13 Help_us_Obi_Garth on 02.07.14 at 7:59 pm

Garth, I need advice quickly before the window closes.

Flow thru shares. Sprott has a product and I need to know if it’s worth buying to offset my taxes cause:

1) I only have a little room for my rrsp (apprx. $2000)
2) my spousal rrsp will not cover it all.
3) my accountant doesn’t really know either
4)my financial advsr is saying I have only 2 weeks to make up my mind!

Help!!!

Why buy anything with so much risk the government has to bribe you to do it? — Garth

#14 Smoking Man on 02.07.14 at 8:00 pm

#5 zamman on 02.07.14 at 7:25 pm
Trying hard to get my 30 yr.old kids to open up a TFSA to invest. I think they prefer Banff on the weekends.
Wish me luck.
….

Consider yourself lucky, your kid could have been an aspiring gentlemen, athlete, who got seriously injured, then hocked on oxy pain killers.

Stoll to feed the beast…
You decide, only one way to save him. Fake poverty, let the well
run dry.. Let him see you suffer.
it worked.

Good news is after rehab, and
forming a great relationship with Howe. X leaf….
He’s saved, going to school to save others, has sponsored several. And thrives on helping
other addicts. It’s the only thing keeping him sobar.

He’s dad keeper his sanity by transforming into a

Ready for this.

A SMOKING MAN..

#15 T.O. Bubble Boy on 02.07.14 at 8:03 pm

oops!

Bitcoin falls from $960 to $684 in a couple of days:
http://bitcointicker.co/

http://ca.finance.yahoo.com/blogs/dashboard/bitcoin-fatal-flaws-210031947.html

#16 Linda Mulligan on 02.07.14 at 8:03 pm

Right on, Garth. The children feel entitled but who gave them that feeling? They didn’t get it by accident, but by a possibly life long habit of asking & getting what they asked for. Now, I can totally understand wanting to help your children have a good life. What totally blows my mind are the number of parents who think that in order to be a ‘good’ parent, that means ensuring your child lives a lifestyle equal to or superior to your own. It’s like the ultimate boast – what used to be ‘my little John or Jane graduated top of their class, makes X thousand per year’ seems to have morphed into ‘my child lives better than your child ever could, because I/We can afford to set them up better than you can set up your pathetic spawn’. Or maybe the parents really do think they are doing the right thing, because naturally the children will take care of them when they are too old to take care of themselves – hope for their sake they are correct, but I wouldn’t bet on it. Saw lots of people in hospital long term care & old age homes too who never had ‘the children’ visit. I have my doubts they were all of them horrible parents who deserved nothing better from the kids.
Thing about the loan or gift though – got to say Dad is who I side with here. If the child in question can’t come up with the downpayment on her own, what happens if she can’t pay the monthly condo fees, or the property taxes, or the mortgage, or the special assessment if one comes along? At least if she rents the overall debt load isn’t overwhelming & she can presumably couch surf at the parents abode should she lose her rental digs due to lack of funds. If Mom is determined to pass funds to her daughter she can always set up her will to ensure it. Her daughter isn’t a child anymore, her responsibility is to herself & her husband first. The only way I could see it being otherwise is if the child in question is disabled & can’t take care of themselves, which I gather is not the case in this instance.

#17 Help_us_Obi_Garth on 02.07.14 at 8:20 pm

re: flow thrus

But Darth Pecker and his evil empire will collect on the taxes. What else can I put it into?

#18 jan on 02.07.14 at 8:22 pm

Btw Garth, just got some Canadian Western Bank prefferds yielding 7.15 today.
Also,do you think Dundee reit is safe at current levels ?

Thanks a bunch and heal well.

#19 Devore on 02.07.14 at 8:28 pm

#5 zamman

Trying hard to get my 30 yr.old kids to open up a TFSA to invest. I think they prefer Banff on the weekends.

They should check out Okanagan. Buy a Sun Peaks ski pass for a few days, stay in hotel for free. Oh heck, in a year they might start throwing in free condos with lift passes.

#20 Devore on 02.07.14 at 8:34 pm

#7 Ryan Perich

the lender is not concerned with that, just concerned that there are no additional monthly debt fees not declared – and if it’s not a gift, the mortgage may be a non-starter.

Sounds like they cannot afford to buy.

Ryan response : sometimes you don’t have a choice as a child of a boomer, as per your next paragraph

Yeah they have a choice. I realize banks don’t care, their mortgages are guaranteed by the government, as long as you can keep making the monthly nut, they’re happy. But parents should have enough sense to recognize their offspring is buying something they cannot afford. But like most parents, they are either blinded by their financial ignorance, or believe they are being good parents by throwing money at their children. It’s parental guilt.

#21 Smoking Man on 02.07.14 at 8:38 pm

But then again I lie a lot.. Story teller dude.

The above post was a fake..

#22 Randy Macho Man Savage on 02.07.14 at 8:38 pm

Perhaps the government will make historical price data more accessible.

http://www.thestar.com/business/real_estate/2014/02/07/battle_over_mls_system_comes_down_to_one_word_sold.html

#23 jan on 02.07.14 at 8:41 pm

Also I asked you this a few time now but to no avail.
Would it make sense to me to put money into rrsp to claim a refund considering that i am single and am not working due to certain disability for which i don;t qualify for benefits.

In other words, I have no income but do have a little bit of savings……thanks again to you or any other blog dog who might offer me b bit of an advice.

Refunds are based on your marginal tax rate. Shouldn’t be hard for you to answer this question. — Garth

#24 Randy Macho Man Savage on 02.07.14 at 8:45 pm

What’s the deal with the pic of the house – why would the garage be built way above the driveway?

Planning. — Garth

#25 Son of Ponzi on 02.07.14 at 8:46 pm

#18
Canadian Western Bank’s loan book is mostly made up Commercial lending which is about twice as risky as residential.
That’s why the nice payout.
Remember you get what you pay for.

#26 Devore on 02.07.14 at 8:48 pm

#15 T.O. Bubble Boy

http://ca.finance.yahoo.com/blogs/dashboard/bitcoin-fatal-flaws-210031947.html

The fatal flaw in Bitcoin is that while there is a limited amount of bitcoins possible, there is an UNlimited amount of bitcoin systems possible. Nothing is stopping someone from starting up a Kitcoin or a Zitcoin, in fact, with the limited acceptance of Bitcoin, diminishing returns on bitcoin mining means an alternate cryptocurrency platform offers more attractive returns potential to producers. Turns out money also needs to be a currency, after all. It has to be widely and readily accepted as payment for taxes, goods and services, not just a store of value, which Bitcoin performed poorly at anyways. I wouldn’t take well to losing 20% of my savings in a few hours, with nothing in exchange. Payments and micropayments in a real currency are still easier and more convenient for 99% of consumers and businesses.

Lacking legitimacy, Bitcoin is just a medium of exchange, with highly unstable exchange rates.

#27 Smoking Man on 02.07.14 at 8:53 pm

Well I never got my free ticket to pipers yet. Seems my novo rich, mortgaged to the nines, who I chirped on Facebook at Xmas has been working the back room.
Bungalow boy, driving a roll down window, Ford Ranger just gets no respect, the herd idolizes perception of rich. If they only knew..

How do you explain your actions. The poverty thing. Oh my kid was 30 min away from signing a NHL deal then became a drug addict after the list edge, then the boards.

Do you tell these people, who would judge your kid, label him for ever the truth.

I’ve changed all my friends.. I only hang out with people that are willing participants to a farting contest.

Despise anyone else…..

#28 Julia on 02.07.14 at 8:53 pm

Garth makes a statement about common law property rights that is indeed true in BC but not necessarily elsewhere in Canada including Ontario. This Toronto article addresses these provincial variations.
http://www.cbc.ca/news/canada/4-myths-about-common-law-relationships-1.1315129
That said, laws like this can change without warning, as they did recently in BC. Pity the poor home owner who went into her relationship knowing the law said her home was 100% hers as long as they didn’t marry, only to wake up wake up one morning to find out the house is suddenly now only half hers.

#29 Bob on 02.07.14 at 8:57 pm

My friend was in this exact situation. His parents offering him some seed money. He was hesitant. Thanks to your blog and showing him the math he is stress free and renting. He didn’t even have a permanent position at work.

The best thing my parents did was not cosign for a student line of credit. I worked FT studied PT….I never appreciated it until my mid twenties as I watched my fellow gen y’s struggle with huge debt loads after university.

On another note through a work DC pension plan I have access to a mawer balanced target date retirement mutual fund with management fees at .5 %. Should I max the non matched contributions? I have enough $$ in a self directed RRSP (etf’s) if I want to access the home buyers or life long learning programs. TFSA is also maxed out.

To the realtors on this site – yes, it happened my landlord tried to jack my rent up over 30%. I moved :) it was wonderful. My new rental is managed much better. Old unit is still vacant.

#30 Victor V on 02.07.14 at 9:01 pm

http://themashcanada.blogspot.ca/2014/02/relisted-2-94-summerhill-avenue.html

This is a 5 bedroom, 3 bathroom detached (though it doesn’t look like it) house on an 18 x 120 foot lot at 94 Macpherson Avenue in Summerhill.

It is listed at $1,259,000.

Thing is, this isn’t the first time the house has been listed in the last year.

Actually, it has been listed (and sold) 2 times in the past 13 months!

It was first listed in January 2012 for $1,200,000.

I thought it would sell around $995,000…maybe $1,050,000.

It sold a few days later to an agent for $1,082,250 though MLS had it listed at $1,110,000 (it’s the difference of the 2.5% commission).

Then a few months passed and it was on the market again by the agent buyer…

For $1,150,000.

It sold in 2 weeks for $1,150,000.

It’s now on the market AGAIN…

For $1,259,000.

#31 Alero01 on 02.07.14 at 9:03 pm

Perhaps a compromise for these parents? They agree to dollar-match their daughter’s down payment up to a limit of $30K. The daughter gets $1 from Mom & Dad for every $2 that contributes. In this way, Mom gets to help her daughter buy a home and Dad gets the assurance he needs that his daughter has made the sacrifices necessary to pursue a goal as expensive as home ownership. Dad also gets a few more years of investing that $30K for retirement. The daughter benefits by being forced to do the legwork of prioritizing whether buying real estate outweighs other uses for her money. Of course, this doesn’t solve the problem of parents not having enough to retire. It’s fascinating to me how this couple’s priorities for their future are so un-aligned…

#32 research on 02.07.14 at 9:04 pm

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=0

Handy rent vs buying calculator (though it is designed around American real estate rules…)

#33 A Yank in BC on 02.07.14 at 9:11 pm

The irony, of course, is that the Mother cannot see how much she would be harming her own daughter by giving her the money, thereby teaching her little darling exactly the wrong lesson in life. Hopefully.. Dad will prevail.

#34 AACI home-dog on 02.07.14 at 9:20 pm

Re: photo…loading dock for growshow or chemlab ? Haha

#35 Smoking Man on 02.07.14 at 9:32 pm

Not talking about the posters, the 99% who read this blog and offer nothing.

You suck people, you seek wealth and ideas, because you want your things to talk for you.

Cowards, afraid to risk the
judgement or a negative opinion, afraid to defend your Hill.

You guys will be the first to by my book in spite of me spitting in your face.

Herdonomics 101

Afraid to be the fat kid looking out the window dreaming about being a pilot, while the teacher centers you out, and the herd fearing for there marks support the teacher.

#36 willdaman on 02.07.14 at 9:35 pm

#18
“Btw Garth, just got some Canadian Western Bank prefferds yielding 7.15 today.”

These are probably going to get bought back by the bank on April 30, 2014…on that date, the rate is supposed to reset at 5yr Canada Bond + 5%…no way the bank is going to let this reset and pay out sweet divies for the next 5 years at this rate when cheaper money is available, these prefs will likely be bought back at $25 (read the share terms).

If they don’t redeem these on April 30 then these will be pretty sweet…but at this stage you’re going to be lucky to break even.

#37 Smoking Man on 02.07.14 at 9:35 pm

Garth it’s Friday, turning my phone off, into the jack….

Delete every post here on in.

Thanks, and please go easy on the oxy….

#38 First World Problems on 02.07.14 at 9:40 pm

Ah geez…we are doing it proper having rented till 35 almost 36 – have a solid down payment of ~$100k. If it is parents down payment keeping the pricing high – making our decision hard. We are in Ottawa, can get a solid place for about $500k but would love to pay less.

#39 Shawn on 02.07.14 at 9:44 pm

Canadian Western Bank Pref Shares

Jan at 18 said:

Btw Garth, just got some Canadian Western Bank prefferds yielding 7.15 today.

*************************************
I don’t think you did, actually. Canadian Western Bank had some series 3 rate rest prefs issued at 7.25% in 2009.

They have not traded close to that yield since 2009. (They traded above $25 which lowered the yield to maturity.)

These shares will be redeemed by the bank on April 30 at $25. You have not found an investment yielding 7.15%

CWB issued new rate reset prefs this week at 4.4%.

As to Ponzi who views CWB as risky. Perhaps so. Their common share price is up 638% since I first started following the shares in August of 1999. That excludes dividends. Risk has been amply rewarded here.

Who’d a thunk a bank would make money for its owners? This is how the rich stay rich.

#40 Kurt on 02.07.14 at 9:45 pm

The photo makes perfect sense if you think of the garage as a warehouse, and the driveway as a loading dock. It makes moving junior’s stuff out easier, which I think is Garth’s point: plan on sending the kids away.

#41 First World Problems on 02.07.14 at 9:45 pm

Smoking man take it easy; Internet forums are a non starter for a lot of people with good reason. And coming here just to glean well edited financial insight is fine.

You get your place to play in the sandbox too.

Join me in a day of non-judging. We can do it!

Coming from a long time reader and occasional poster who changed my handle to be from parts unknown.

#42 Randy on 02.07.14 at 9:50 pm

Garth…I always thought that you looked extinguished….even before the dog-walking incident.

#43 DonDWest on 02.07.14 at 9:55 pm

“Nobody helped us buy our first home, and mortgages cost 12% then. If she can’t make it when they’re 3%, why are we doing this?”

Overall, I agree with the father, but when baby boomers present such faulty math, it makes my eyes roll. The father has the audacity to argue his daughter faces equivalent challenges in buying a first home due to his higher interest rates making up the difference in housing costs. This couldn’t be further from the truth.

For example, adjusted for inflation, the average home in Halifax in 1984 was approximately $100,000 at 12% interest. Today, that same home is close to $300,000 at 3% interest. When we do the math, the 1984 home costs $826 per month; while the 2014 home costs $1386 per month. This is all adjusted for inflation and the difference is quite significant. The only case the 1984 home is more expensive is in the required down payment. This is only made possible because in 1984 you had to pay 20% down versus 5% down today. The difference is roughly $5000 adjusted for inflation. Although, I could argue this is a wash considering dad back in the 1980’s could save better for a down payment due to much better interest rates in his bank account.

However, let’s for the sake of argument, assume the father is correct and that his daughter pays the equivalent monthly carrying costs. The father in the end still gets a much better deal. In this scenario, the father’s mortgage costs can only go down because interest rates can only go down. The daughter, on the other hand, her costs can only go up because interest rates can only go up.

Another reason why young people would take the real estate environment of that of our fathers is because the interest rates, quite frankly, wouldn’t be a factor for someone like me who already has close to 200K saved up in the bank. If house prices were to lower to 1984 levels, adjusted for inflation, I could buy one house (maybe two) with cash.

That being said, the father is right to not hand the daughter the money, despite the fact his reasoning and mathematics are wrong.

#44 omg on 02.07.14 at 9:56 pm

And I thought the federal Conservatives were conservative.
——————
Opinion piece in the Globe and Mail today about federal pensions. According to the article the average pay packet for federal government employees has gone from $68K in 2002 to $125K in 2013.

Absolutely nuts – that’s the average! So for your average federal guy making $80K per year the entire pay package would be something like $140K.

Most of that is defined benefit pension plan largess which will be a legacy obligation for all of us tax payers for the next 50 years.

….and the pension plans are etched in stone and will never be changed by any future politician. It would be political suicide.

#45 Nosty's Vladioli on 02.07.14 at 9:57 pm

Garth — Meet Snuffles. Don’t know what the immigration rules are for dogs, but he might be a good companion for Bandit.

Snuffles would be a lot cheaper to keep than this gentleman, who has a tail growing out of his back.

Then again, it takes all sorts.

#46 DaleFromCalgary on 02.07.14 at 10:04 pm

#13 – Re: flow-through shares. They’re not always bad investments. I have had a number of them over the years with junior petes who lay off drilling expenses as a tax deduction for their shareholders. However this requires careful consideration of the likelihood of income to the company. Junior mines use flow-throughs to finance exploration but never seem to go into production. With oil wells, production is easier and faster, so the company is more likely to pay off.

If someone is pressuring you to buy flow-through shares, walk away. A good project doesn’t have to use the tactics of a Toronto condo developer. You have to know something about the economics of an industry. A conventional well next to a pipeline in central Alberta is considerably different than an unproven hard-rock mine in the boonies of northern Ontario, even though both offer flow-through shares at the same price.

If you’re not sure, avoid the offer. Better to pay a few dollars extra in taxes than to lose thousands in a bad investment.

#47 omg on 02.07.14 at 10:04 pm

#30 Victor V

I wonder if the RE agents report at tax time that he/she made $60 from the flip of the house.

Although if they paid commissions and held it for a few months it would be less than that.

Further, the gain may not be considered capital gains but employment income if the agent does flips on a regular basis.

#48 Cici on 02.07.14 at 10:06 pm

#27 Smoking Man

I’ve changed all my friends.. I only hang out with people that are willing participants to a farting contest.

Despise anyone else…..
______________________________________________

Good call. I can’t stand fake, pretentious and insecure people. Although you can’t just trust anyone who can fart shamelessly either.

Nevertheless, if that is a true story, and you faked poverty for the sake of your son, you must be a pretty good parent.

#49 Infused with Opiates on 02.07.14 at 10:11 pm

28 Julia – from the article:

” “We use the law of constructed trust to protect people’s property rights, so if you’ve been living common law and you’ve been contributing to a home that the other party owns – either because you paid for renovations or because you were the one maintaining it – you can make a claim for property.”

Brownstone added that this is not in any way based on the same kind of principles as being married. Rather, he said, “It’s based on the law of resulting trust. We use trust law to protect common law property rights.”

This is why the recent B.C. ruling is unique, because now, couples who have been living together for two years are entitled to a 50/50 split of shared debts and assets — excluding any pre-relationship property or inheritances.”

I’m not sure how you are interpreting this. I read it that if I own a home free and clear worth 200K and you move in with me, then we break up in 5 years when the house is worth $300k you are entitled to half of the $100k appreciation.

#50 rhw on 02.07.14 at 10:11 pm

Back when a gallon of gasoline cost fifty cents I asked dad if he would co-sign on a car loan. Tell you what he says, when you save up for half, then I’ll do it.

I got the car anyway, without his help. For that important lesson thanks, Dad.

#51 quebec economist on 02.07.14 at 10:23 pm

DFN offers over 10% dividend yields for the past 4 years, 8% prior to 2008. Not very risky. If you hold till 2019 you are assured 8%.

#52 Randy Randerson on 02.07.14 at 10:23 pm

#50

That’s tough love, your dad gave you a lesson that you’ll never forget, he knew that it was a teachable moment that’ll forever shape your view of money.

Nowadays, parents just want to coddle their children, possibly from cradle to grave. A single-mother friend with a two year old, once told me that every children should get a reward in school, because they’re all special. Made me puked a little bit. Whatever, he’s not my boy and I’m not interested in debating logically with female hormone.

#53 TurnerNation on 02.07.14 at 10:23 pm

SM no, not planning for Deletes.
After all I have beer tastes on a champagne budget…

In other news Loblaws is soon opening what is likely a ‘category killer’ their first ‘Nutshell’ health food store on King West.

(Placards and effigies at the ready.)

#54 economictsunami on 02.07.14 at 10:28 pm

It never ceases to amaze me how some family members can change their demeanor, when you really need to tell them no.

You may initially say no to staking them but what happens when they proceed with the purchase and their liquidity situation changes; especially if the whole transaction was predicated on dual income?

It gets harder to say no when your kid is flailing their arms looking for you to toss them a line…

Interesting reads:

MacInnes & Spiiker: Public Policy’s Senior Moment:

http://tinyurl.com/o2jhudb

(Bullard – President St Louis Fed) Some Perspectives on the Notorious Summer of 2008…

http://www.stlouisfed.org/publications/re/articles/?id=2472&utm_source=Twitter&utm_medium=SM&utm_campaign=Twitter

#55 raisemyrent on 02.07.14 at 10:28 pm

not all Boomers are the same. some are less equal than others.
best friend’s parents are well-educated (whatever, Smokey) boomers (like mine, I guess). we were both put through school by our parents (they had RESPs though). we both also worked through school as possible to pay for a portion of tuition and for toys we didn’t have the face to ask our parents for (like our house band instruments and the beer we used to buy by the keg), and the moment we graduated, we stopped receiving any money from them. By choice. Period. Not everyone can say this.
His parents have a portfolio in the 7 figures, a paid-off house, and a solid financial adviser. Mine too, sort of (they live abroad).
My buddy has known even since before me that the thing to do in downtown Vancouver is to rent. neither of us has a car loan or ANY other kind of debt. If he went to his parents to borrow for a down, they would probably slap him. Mine asked ages ago what the market was like (not to help, but wondering if I was snoozing) and then they laughed and it never came up again.
The catch, he has not ever put any money away for retirement. Nobody is perfect I guess…

p.s. Smokey why don’t you just set-up something like parental controls on your computer and block this website when you gonna be undisposed? You can make the password something terribly difficult to type….

#56 Drill Baby Drill on 02.07.14 at 10:32 pm

Dear Pathetic Blog : you have hit on the number one guilt trip reasoning that realtors and those parents who have not the economic intelligence to see that by giving to your kids a down payment in this market is absolute folly ! Reators are relying on this type of arrangement for probably 50% of their condo sales. You are right also on the fact that many parents do not want their kids to move away so they make sure they are indensured servants to the banks thereby restricting their options to move. I know this because I have several friends who have done just this type of thing. I am 59 yrs old and I have not given my kids money for a downpayment. You are not helping them by doing this. You are restricting their economic problem solving skills. Also any bleeding hearts out there please consider that I first came to Calgary and slept under the centre street bridge for at least a week or more. I am now a VP for a large engineering firm.

#57 DonDWest on 02.07.14 at 10:35 pm

“If Snowflake has the BF move in for a few years, he becomes a common-law spouse with property rights under family law provisions. . .”

And for the record, if the nation ever comes to it’s senses and elects me as supreme dictator, that will be the first law to go.

The government has no business forcing marriage on young men who have no desire to get married. If the government wants young men to “man up” and form families, the government needs to provide incentives to do so. . . Currently, there are no incentives for young men to get married, and using passive-aggressive laws such as “common law” declaring people married at the barrel of a gun isn’t a solution.

#58 Cow Man on 02.07.14 at 10:38 pm

Amigos:
What ever parents put up needs to be supported as a second mortgage. Gets rid of the problem of communal property rights of the boy toy.

#59 Mark on 02.07.14 at 10:48 pm

“markets might be in a correction”????

More like, markets are in a correction. Prices have been falling for at least the past half year across most of Canada. Only disguised by the statistical mirage of a changing sales mix. Flaherty’s CMHC changes were absolutely deadly to the entry-level.

#60 Ronaldo on 02.07.14 at 10:54 pm

#13 Help_us_Obi_Garth on 02.07.14 at 7:59 pm

”Why buy anything with so much risk the government has to bribe you to do it? — Garth”

Absolutely true. Highly speculative. HEP would be less risky and at least you get a dividend. But only if you can handle risk and only if it’s money you can afford to lose.

#61 Sean on 02.07.14 at 11:00 pm

#13 Help_us_Obi_Garth on 02.07.14 at 7:59 pm

————-

Agree with Garth on this one.. at the ripe old age of 42, I have invested in my last flow thru.. they are BS. Stay away!

#62 Sean on 02.07.14 at 11:06 pm

The irony being, if the boomer parents didn’t perpetuate the myth of endless wealth thru real estate.. and thus denied their children the needed downpayment… then demand for real estate would cease (of mathematical necessity).. and the apparent wealth would evaporate. That is to stay, the boomers cannot afford, intellectually or emotionally, to let the dream die.

#63 Julia on 02.07.14 at 11:10 pm

#49 Infused with Opiates on 02.07.14 at 10:11 pm

Yes, that’s right, like being married. But what if you paid all the expenses and we decided to not get married based on the understanding that being common law the property is all yours, and we worked out our financial situation fairly based on this mutual understanding, and then poof! the rules change over night and all of a sudden I’m entitled to a hundred thousand bucks from you when i walk out. Sounds to me like more money for lawyers.

#64 DR on 02.07.14 at 11:12 pm

“markets might be in a correction”????

More like, markets are in a correction. Prices have been falling for at least the past half year across most of Canada. Only disguised by the statistical mirage of a changing sales mix. Flaherty’s CMHC changes were absolutely deadly to the entry-level.

Falling..ok then. Let me know when I can buy a bungalow in Leaside for 350K again please, will ya?

Oh right the one that just sold will “fall” to 750K which is a 25 percent drop right?

#65 Harry Wilson on 02.07.14 at 11:22 pm

re #49 Infused with Opiates:
“I’m not sure how you are interpreting this. I read it that if I own a home free and clear worth 200K and you move in with me, then we break up in 5 years when the house is worth $300k you are entitled to half of the $100k appreciation.”

———————————————-

I sincerely hope that’s not how it works; what would happen in the event of a serious price correction?

1 – I move in with you, into your house that is worth $300K.
2 – Five years later, I can’t stand the sight of you.
3 – In the interim, we have seen a real estate price correction, and your $300K house is now only worth $200K.
4 – Considering the ‘debt’ side of “a 50/50 split of shared debts and assets”, would this mean that if I dump you, I would have to pay you $50,000?

P.S. From Mr. Turner’s fourth-to-last paragraph:
“It never, ever ends with the first cheque.”

Funny, that’s how blackmail works too.

#66 CalgaryHappyRenter on 02.07.14 at 11:32 pm

#5 zamman on 02.07.14 at 7:25 pm
Trying hard to get my 30 yr.old kids to open up a TFSA to invest. I think they prefer Banff on the weekends.
Wish me luck.

Simple Recipe:
Offer to give them $100 to fund their initial TFSA account and $200 for RRSP.
3 months to accept or refuse the deal.

Results:
My 18 year old son opened both accounts, took $300 and contributed $1700 himself.
My 20 year old daughter opened a TFSA: $100 gift.
My 22 year old daughter got $200 to fund her initial RRSP account; she added $800.

Financial stuff is not learned in classroom.
Lead by example.
Live below your means.
I am renting and top % by the way.

#67 bentoverpayingtaxes on 02.07.14 at 11:35 pm

It’s too bad, Garth, that you didn’t get the amputation.

DELETED. And you are now banned. — Garth

#68 jan on 02.07.14 at 11:47 pm

#23 jan on 02.07.14 at 8:41 pm
Also I asked you this a few time now but to no avail.
Would it make sense to me to put money into rrsp to claim a refund considering that i am single and am not working due to certain disability for which i don;t qualify for benefits.

In other words, I have no income but do have a little bit of savings……thanks again to you or any other blog dog who might offer me b bit of an advice.

Refunds are based on your marginal tax rate. Shouldn’t be hard for you to answer this question. — Garth

Me – in other words since i have no income i do not qualify right ??

#69 Susan Pigg just washed away all her sins on 02.07.14 at 11:57 pm

http://www.thestar.com/business/real_estate/2014/02/07/battle_over_mls_system_comes_down_to_one_word_sold.html

Speaking of the data leaked by Dale

That’s of limited value in a hot market like Toronto’s where buyers are growing increasingly confused and frustrated by a shortage of listings and realtors who are underlisting properties on purpose to fuel bidding wars that drive prices to irrational heights.

She basically admits what I posted here http://i.imgur.com/KcFD1ix.jpg I posted the above chart in response to one of her older articles

#70 recharts on 02.07.14 at 11:59 pm

#59 Mark on 02.07.14 at 10:48 pm
“markets might be in a correction”????

More like, markets are in a correction. Prices have been falling for at least the past half year across most of Canada. Only disguised by the statistical mirage of a changing sales mix. Flaherty’s CMHC changes were absolutely deadly to the entry-level.

Above I am talking with this Mark

#71 Waterloo Resident on 02.08.14 at 12:00 am

Quote: ((“I told them I recently died in a tragic dog-walking incident, and was sadly unavailable.”))

Ha-ha, that’s a good one Garth !

When I read about how Jan is just giving the family’s much needed money away, that reminded me of the saying: “YOU CAN’T FIX STUPID”.

And John Wayne’s old saying:
“LIFE IS HARD,,,,, IT’S EVEN HARDER WHEN YOU’RE STUPID.”

#72 Happy Renting on 02.08.14 at 12:14 am

#49 Infused with Opiates on 02.07.14 at 10:11 pm

In Ontario (and perhaps in other provinces) the marital home is treated differently than other assets. The entire home can be a pre-marital asset of one person but if it’s the primary residence of the married couple it’s split upon divorce. The marital residence is also excluded from conditions in marriage contracts (so you can’t enforce a pre-nup clause that takes away a spouse’s rights to the marital home in the case of a divorce.)

#73 bentoverpayingtaxes on 02.08.14 at 12:24 am

A highlight of Vancouver culture

http://news.nationalpost.com/2014/02/07/that-is-f-ed-up-vancouver-police-hunting-man-who-paid-strangers-to-be-kicked-in-the-groin-in-disturbing-video/

says it all about ‘the crappiest place on Earth’. The drunken horror show takes place every night in Vancouver’s ‘entertainment district’.

#74 Doug in London on 02.08.14 at 12:35 am

What? Giving your kid 30 grand toward buying a condo? Hell would be at least a billion degrees below absolute zero before my parents would give me 30 grand towards a condo, and that’s fine with me as I wouldn’t expect them to.

#75 Happy Renting on 02.08.14 at 12:36 am

Garth, another chance to feel “like a serial homewrecker ringing up to tell them I’d just run over their puppy. Twice.” and you passed? I mean, hey, getting in the middle of that fight sounded like quite the fun party.

A while ago I read a real estate article that introduced a term realtors use: PhD. It’s short for “papa has dough”. The mechanics of just receiving a big cheque from your parents make it hard to really appreciate the value of that money. Throw in irrational house horniness in this bubble environment and it’s a recipe for financial disaster.

Admirable than Jan wants to help her daughter, but if her daughter doesn’t have the education or skills to earn a decent living, that’s the starting point for assistance, not home ownership.

#76 Spectacle on 02.08.14 at 12:38 am

Thanks Garth.

#24 Randy Macho Man Savage on 02.07.14 at 8:45 pm
What’s the deal with the pic of the house – why would the garage be built way above the driveway?

Planning. — Garth

Way back in Psych training we learn a simple fact: We invest more time “planning ” the birthday parties in our life, than our life itself.

Planning: Garth consistently illustrates how little financial/business education our society permits.

Re #55…raisemyrent
p.s. Smokey why don’t you just set-up something like parental controls….and block this website….You can make the password something terribly difficult to type….

Um password…like racecar ? : )

#77 4 AM Sunrise on 02.08.14 at 12:43 am

#29 Bob on 02.07.14 at 8:57 pm

I remember the days when I had a DC plan at work. I scanned the list of mutual funds available to me – only 5! – and muttered “garbage…high MER garbage…garbage…slightly not-so-garbage…” So I held my nose and picked the least offensive candidate. Then one day, the plan announced that they closed this one fund I had and redistributed the $20 I had in there into 4 new funds that supposedly replicated the asset mix in the closed fund. My statement looked ridiculous. The first thing I did when I lost my job was cash out my pension and stick it in my TFSA.

At least your fund as a low MER. I don’t know the details of your plan, but I hear that the typical plan reserves the right to close funds and redistribute your money to new funds. You’ve been warned.

I don’t know anything about putting money into non-matched contributions. Do you get some kind of tax break? If you don’t, you’re probably better off putting the rest into your non-registered account. That depends on your taxation heebie-jeebie level, of course.

#78 4 AM Sunrise on 02.08.14 at 12:56 am

Garth asked, “is this Mom’s way of ensuring Snowflake will never actually leave town?”

For some wrinklies, yes. They’re so accustomed to micromanaging their children’s lives that they can’t bear the thought of breaking that habit. Even more so if they’re from a culture where micromanaging the lives of adult children is a millennia-old practice. And the current batch of wrinklies is struggling harder with aging and empty nest syndrome than previous batches.

#79 experienced.optimist on 02.08.14 at 1:41 am

Probably a bit off topic here, but as one wrinklie(boomer) working out a budget for their more wrinklie parent for the year, I needed to find out what the increases for CPP and OAS were coming up. What I found was very sad indeed. CPP benefits will increase by 0.9 percent for the year and OAS will increase by 0.1 percent but is reviewed quarterly. These are based on changes over a 12-month period in the Consumer Price Index (CPI), which is the cost-of-living measure used by Statistics Canada.

No wonder Flaherty has the Bank of Canada talking about Disinflation, just brings down the CPI numbers, which has no semblance of what it actually costs for a senior senior to maintain any independence. They still need power, gas, phone, pay taxes or rent and/or condo fees and/or property taxes and car insurances if still driving or if not those, maybe long term care. They do not need or want that new 80” LED TV with 9.2 Surround Sound or that 10 Terabyte HD and do not suffer from Granite Counter Top Envy (GCTE).

Yes it affects me too(boomer), (small prairie town, no debt, kids live in cities, biggest expense is driving, choices) but I suspect it affects a lot of other seniors that are not as well off as me/us. It is almost bizarre the things that Flaherty is reducing or cutting to get his election budget in place for 2015.

For any that want to comment on boomers or older running the country out of money, just remember that the changes made to CPP in the 1990’s , agreed to by all the provinces, has made it one of the most actuarial sound Defined Pension Plans in the world (it is not a tax as some would have you believe). As for the OAS there are claw back provisions and even I will admit they could have probably been reduced rather than moving the date forward before being eligible.

http://www.newswire.ca/en/story/1283431/canada-pension-plan-and-old-age-security-benefit-rates-effective-january-1-2014

http://www.theguardian.pe.ca/News/Local/2013-12-22/article-3552168/Canada-Pension-Plan-increases-by-0.9-per-cent-Jan.-1/1

http://www.osfi-bsif.gc.ca/Eng/oca-bac/ar-ra/cpp-rpc/Pages/cpp26.aspx

#80 TakingResponsibility on 02.08.14 at 1:51 am

Awww, I sorta’ feel for the momma.

It’s hard for the boomer mommas. We don’t know who we are and so we need mega External Validation. As in, we are our houses. We are our purses. We are our granite and stainless. We are our vacays. We are our Beemers. Etc.

And, most of all, we Are Our Children.

If our child does not Own a house, what does that say about Us? Omg.

#81 Diggstown on 02.08.14 at 1:55 am

Aside from real estate investing and the lack therof of planning for retirement, it seems many Canadians are now extending themselves on one of the worst investment possible:

http://globalnews.ca/news/1133080/the-rise-of-the-8-year-car-loan/

Now it makes sense why I see so many Bmers and Benz’s racing around the burbs of the Valley.

#82 Help_us_Obi_Garth on 02.08.14 at 2:13 am

re: flo thru

Thanks to all posters for your feed-back. I will read through their package with a highly skeptical eye.

HEP – you say? Oh my…that is an absolute slaughter!

#83 Bo Xilai on 02.08.14 at 2:15 am

Hey Garth, I thought you said Mainland Chinese money wasn’t pumping up Vancouver’s real estate bubble…

The South China Morning Post would seem to disagree…

Exclusive: Vancouver facing an influx of 45,000 more rich Chinese

http://www.scmp.com/news/world/article/1423370/exclusive-vancouver-facing-influx-45000-more-rich-chinese

#84 Ralph Cramdown on 02.08.14 at 2:36 am

I notice that there are still many comments on this blog about “artificially manipulated” interest rates and asset prices, mainly blaming the US Fed.

My thesis is that the Fed has been manipulating interest rates to the benefit of the average person, and getting better at it, since before I was born. You may disagree.

Be that as it may, how long are YOU going to keep whining about “financial repression” etc.? This is the environment you’re investing in. It has been going on long enough that, for most of us, it represents 20% or more of the entire time we’ve been investing. There’s no point pretending it’s a brief, transient phenomenon. This is the environment that you have to invest in, that you have to best figure out how to grow and preserve wealth in. Whining isn’t going to do it.

#85 Hmmm on 02.08.14 at 2:42 am

#49 Infused with opiates
I guess that it doesn’t follow that if, after five years, your assets have declined by $100K, your ex is on the hook for half of that loss?

#86 Freedom First on 02.08.14 at 3:07 am

Right on Garth! I have seen this acted out in my life for a while, parents either giving down payments, or fighting about doing it. Seen divorces over it. One of the parents wants to keep wheelbarrowing the cash to kid/kids, and the other parent disagrees, as never had they envisioned that the kids would be siphoning off them in their adulthood. And they shouldn’t be. The apron strings must be cut from the kids when they leave the nest, or it is a tragic disservice to them. I see the adult kids who do this, and they are not men and women, they are still boys and girls. No self-respect, only entitlement.

#87 World According To Garth on 02.08.14 at 3:25 am

Me thinks the ex-pat movement is going to explode.

http://armstrongeconomics.com/2014/02/07/g20-to-cordinate-to-hunt-down-taxes-worldwide/

#88 Bob Rice on 02.08.14 at 3:40 am

http://www.forbes.com/sites/kathycaprino/2014/01/16/7-crippling-parenting-behaviors-that-keep-children-from-growing-into-leaders/

#89 Bob Rice on 02.08.14 at 3:42 am

# 59 – “Flaherty’s CMHC changes were absolutely deadly to the entry-level.”

What proof do you have? I haven’t noticed this…

#90 jane 24 on 02.08.14 at 3:52 am

My Aunt has lost two deposits by gifting them to her son, who then had two marriage breakdowns and since he walked out, then the wife got the house each time.

Wisely Aunty declined to give him a third pot.

We are considering getting our youngest on the housing ladder by going in thirds with her on a handyman special . She will mortgage her third and her and her handyman boyfriend will do the work with her. Once re-sold she will retain her third of the profit and hopefully can then go it alone.

Please note that in England live-in boy/girl friends have no legal rights. No ring, then no shared house. Always a shock to those who watch too many American TV chat shows.

English house prices are going up swiftly since you lent us Mark Carney as Governor of the Bank of England.

Thank you for your generosity here.

#91 Buy? Curious? on 02.08.14 at 6:29 am

Garth, these down payments provided by Mom and Dad, Dad and Dad and/or Mom and Mom to their adult children is more or less an advancement on their inheritence. Nothing wrong with that, is there? And depending if you’re daddy is a movie director, has a similar name to the main character in Toy Story, and up for an Oscar this year, isn;t it in line with your rule about never buying property with someone you haven’t slept with?

http://www.youtube.com/watch?v=JgOxqwVd5Z8

Rob Ford 2014 because calling in sick is cool.

#92 yorel on 02.08.14 at 8:42 am

#88
“Please note that in England live-in boy/girl friends have no legal rights. No ring, then no shared house. Always a shock to those who watch too many American TV chat shows”
Ditto in Ontario and several other provinces.
Just watched a friend’s son find that out the hard way when the cops showed up to throw him out.
He can “claim” whatever money he put into the house, but get half the house because of “common law marriage”?
Not in Ontario.

#93 Squad on 02.08.14 at 9:09 am

If only people would stop participating in this nonsense, then prices would fall and become affordable again.

Trouble is, people are still under the belief that if they don’t buy now, then they will be priced out forever. Amazing. So, they find new ways to buy into this real estate nightmare and keep this overpriced real estate gasbag going.

When will people wake up and see that it isn’t such a great idea – I’ve thought it’s been overpriced since 2006.

#94 Steven on 02.08.14 at 9:15 am

Family planning Garth? Are you joking?
You don’t seriously believe that given the crappy pay earned by young men getting out of high school and college and the insanely hyperinflated cost of homes that there will be any families being formed do you?
From an economic and demographic stand point Canada is dead and gone. People just don’t believe it yet.

#95 economictsunami on 02.08.14 at 9:19 am

There are those who would dearly love for fellow posters to not talk about nor complain about financial repression and manipulated markets.

They put their full blind faith in the very institution(s) that supposedly never saw nor participated in actively blowing asset bubbles.

What perhaps they fail to fully comprehend is such actions cause the Fed to actively pick winners and losers. Quite often it is the unsophisticated retail investor that is left holding the bag.

The real problem lies with the fact that many other CB’s have taken a page right out of the Fed’s playbook and are becoming not only highly interventionist but financially experimental as well.

When too many CBs bend/ distort both historical relationships and natural laws it is for their own myopic self interest and at times at cross purposes to each other.

Their track records from a trail of disasters speaks for itself…

A Long-Term Look at Inflation:

http://www.advisorperspectives.com/dshort/updates/Inflation-Since-1872.php

(For informational purposes only.)

#96 Ronaldo on 02.08.14 at 9:50 am

#81 Help_us_Obi_Garth on 02.08.14 at 2:13 am
re: flo thru

”Thanks to all posters for your feed-back. I will read through their package with a highly skeptical eye.

HEP – you say? Oh my…that is an absolute slaughter!”

Slaughter is absolutely correct. It, along with all the other precious metals stocks since the spring of 2011. The problem with HEP was that it was lauched just prior to the slaughter of the pm stocks back on April 27, 2011. ABX (Barrick) for example was trading at $53.07 on April 21, 2011 and hit a low of $14.52 on July 8, 2013 and is now trading at $20.88. Many other pm stocks have had similar gains. You can imagine what would have happened to flow thru shares that would have become tradeable back in the spring of 2011 after the pm stocks got slaughtered. The problem with flow thru shares is that there is a hold period (sometimes up to one year) where they are not tradeable. Very serious when a market goes sour. My own opinion is that the pm stocks have seen their bottom and their future looks much brighter. As a contrarian and a speculator, I would say that HEP would be a good speculative buy right now along with many other pm stocks.

#97 Eaglebay on 02.08.14 at 9:57 am

#9 Mrs Riverview on 02.07.14 at 7:45 pm
“A nice lady at the Credit Union told us that she routinely lends money to retirees, 40 to 100 K, secured by a mortgage on their house, long amortization. The cash is given to adult children, who use it as a downpayment on a house. I wonder what percentage of down payments are funded this way. It’s too bad this is all legal.”

I’m with you. We need more government in our lives. We should legislate to have more laws against stupid people.
Duh…

#98 Victor V on 02.08.14 at 10:13 am

http://themashcanada.blogspot.ca/2014/02/price-drop-6-87-summerhill-avenue.html

This is a 3 bedroom, 3 bathroom row house on a 15.67 x 85 foot lot with no parking at 87 Summerhill Avenue in Summerhill.

It was first listed in October 2012 for $1,995,000.

I thought it was a typo and they actually meant to list it at $1,199,500, but I was wrong.

The house didn’t sell (surprise!) and the price was dropped in January 2013 to $1,949,000…

In April 2013 to $1,874,000…

Then in May to $1,775,000…

And in July to $1,725,000…

And October to $1,624,000.

It has been dropped again.

The new price is….

$1,595,000.

So, what do I think of the new price?

#99 H&R Blockhead on 02.08.14 at 10:23 am

Jan #23 on 02.07.14 at 8:41 pm

Also I asked you this a few time now but to no avail.
Would it make sense to me to put money into rrsp to claim a refund considering that i am single and am not working due to certain disability for which i don;t qualify for benefits.

In other words, I have no income but do have a little bit of savings……thanks again to you or any other blog dog who might offer me b bit of an advice.

————————————————————–

In order to get a tax “refund”, you must have paid the taxes in the first place, either on income from employment, interest, capital gains, investment etc.

No income but a “little bit” of savings?
A non-qualifying disability?

Kind of important details.

#100 -=jwk=- on 02.08.14 at 10:28 am

@recharts:
am with you bro. People should invest in Real Estate. The stock market and any other derivative products will never provide a ROI like below:

MLSnumber Address SoldPrice MLSContractDate SoldDate PublishedAsSoldDate
E2746452 39 Medway Cres 305000 24/09/2013 01/10/2013 04/10/2013
E2806242 39 Medway Cres 450000 06/01/2014 06/01/2014 14/01/2014

MLSnumber Address SoldPrice MLSContractDate SoldDate PublishedAsSoldDate
W2812005 473 Old Weston Rd 477500 15/01/2014 31/01/2014 04/02/2014
473 Old Weston Rd 345000 18/01/2013 28/02/2013 03/03/2013

MLSnumber Address SoldPrice MLSContractDate SoldDate PublishedAsSoldDate
W2787993 56 Greendale Ave 490000 18/11/2013 30/01/2014 31/01/2014
56 Greendale Ave 330000 07/05/2013 21/05/2013 23/05/2013

Do you know how much the flippers put into these homes? Buy for 305, invest 150, sell 450 doesn’t work out too well….

#101 Cowpoke on 02.08.14 at 10:31 am

Classic usury dudes! ‘People’ are the only species on this planet that are required to pay for their own existence. An oppressive situation is not intolerable in itself, but once regarded as such by those who feel oppressed the situation becomes intolerable.

#102 Kylie meyer on 02.08.14 at 10:40 am

Why shouldn’t our parents help my generation out? My parents live in a house worth probably a million dollars. It makes sense to have them make their kids lives a bit easier now then wait until they die where they can’t take part. It seems many of you want to punish our generation. We didn’t choose to be born in the 90’s, our parents made the choice. What happened to parents taking responsibility for helping with their kids success in life?

If everyone helped one another, the world would be a better place. It seems pointless to die with all this money and then watch kids struggle until they’re 30. I’m glad my parents understand this.

#103 RVP on 02.08.14 at 10:49 am

Regarding parents gifting down payments to their children:

It’s not really a matter of parental guilt or an inability to say no or an example of helicopter parenting. I think it comes down to the fact that many baby boomer parents truly have bought into the line: “Buy now or be priced out forever”. They also truly believe that real estate can only ever go up in price over the long term and it will never go down. I have seen many examples of this among people I know. Baby boomers are giving down payments to their adult kids because they are afraid that if their kids don’t get their foot in the door in the real estate market in Vancouver then their kids will never be able to own real estate. They see how renters have been treated with mass renovictions with entire buildings of renters being evicted for renovations. There is a really strong sense that if you don’t own then you can be pushed out of your community. These baby boomers have a real fear that if they don’t help their kids buy real estate, then their kids will end up homeless or being pushed around from slummy rental to slummy rental or being pushed right out of the province of BC. I think a lot of it has to do with baby boomers are trying to buy themselves peace of mind for when they go to their graves they will know their kids will be alright after they are dead and that their kids will always have a home in Vancouver no matter how many millions a condo might cost in Vancouver by 2035.

#104 Ralph Cramdown on 02.08.14 at 10:53 am

#94 economictsunami — “There are those who would dearly love for fellow posters to not talk about nor complain about financial repression and manipulated markets.”

I just don’t see the point. The US Fed has a dual mandate: Attempt to maintain low inflation and full employment. The Bank of Canada’s mandate is low inflation. Nothing there about preventing asset bubbles. If you think something is too expensive, don’t buy it, and if you already own some, sell it. If you think everything’s too expensive, you need to adjust your mindset.

Ben Graham’s “Mr. Market,” who alternatively offers to sell you assets at low prices and buy them from you at high ones, and who you can always ignore, dates from 1949. The markets have always fluctuated. Your capital is not naturally entitled to a safe return. It is but one factor of production, and right now it isn’t the scarce one.

#105 Daisy Mae on 02.08.14 at 11:00 am

#12 Jan: “Yes but in that case if its a loan the bank will not advance the mortgage monies…”

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

And so, another Snowflake saved.

#106 bingo0000 on 02.08.14 at 11:20 am

Is that a garage or a truck loading dock ? Is that a house or a warehouse ? haha. Good planing ahead.

#107 Obvious Truth on 02.08.14 at 11:23 am

Still have my eye on the big six. Believe they will tell the story. Earnings and guidance coming up quick.

Who doesn’t love a good story.

Go Canada. Medal number one. The girls hockey team looks ready.

We’ve still got some kids as tough as Garth. And Dorothy.

#108 };-) aka Devil's Advocate on 02.08.14 at 12:03 pm

#29 Bob on 02.07.14 at 8:57 pm
To the realtors on this site – yes, it happened my landlord tried to jack my rent up over 30%. I moved :) it was wonderful. My new rental is managed much better. Old unit is still vacant.

Bob: As long as we subscribe to this monetary based economy dependant on growth rest assured, you can run but you cannot hide. Higher rents are coming to a neighbourhood near you.

And isn’t that what this blog is about at the very foundation of it; the preservation and accumulation of wealth?

Deny it all you want, you are the very people who feed that which you most oppose.

#109 Dogman01 on 02.08.14 at 12:20 pm

94 Steven on 02.08.14 at 9:15 am

A MacLean’s article a few months ago regarding demographics had this interesting observation buried in it;
– high education levels needed to get a “decent job”
– decent jobs don’t pay much
– contact, temp and insecure jobs; the “precariat” class
– longer time spent in school
– large student load
– sky high house prices

The author noted; “if you wanted to design a environment to encourage not having kids ; this is what you would present 20 something’s with”.
Based on “man values” there is no way I would ever start a family with those odds stacked against me.

Traditional social units (family) can be broken with the right blends of economic pressure; and you are observing the right blend.

#110 heineken on 02.08.14 at 12:20 pm

I agree with garth. the economy in the usa is recovering. unemployment has improved and the financial markets are reaching new highs weekly.
Obama has done magic. along with the new fed boss janet yellen, the us should rocket to new heights.

Canada is slowing down, When the usa picks up to full speed, Canada will strongly recover. there is all sorts of investment strategies in place for Ontario that will benefit the kids of the future. new mining initiatives and manufacturing has picked up.

people should not purchase real estate at the moment. especially since the interest rates are going lower (which will stimulate the economy further).
keep renting and reading this blog. it will steer everyone in the right direction.

#111 Infused with Opiates on 02.08.14 at 12:31 pm

Lots of responses to the common-law breakup.

85 Hmmm 65 Harry – I had thought of that, dont have
an answer, but I bet the courts have already dealt with
this situation and have a precedent.

72 Happy – the original discussion was for commonlaw relationships, for which Ontario doesnt seem to have legislation. All the wiser for newlyweds to have a small “starter” home!

63 Julia – definitely more money for lawyers. I bet they
would argue that the arrangement was equivlalent to a
pre-nup, and that gains made up til the date of any
new legislation were as per that agreement.

Full disclosure – married 28 years.

#112 Vangrrl on 02.08.14 at 12:41 pm

#30:
That was cute… ‘struggle until they’re 30’. Hehe… That’s what your 20s are for, and struggling is relative, those of us born here will never know real hardship. You make your way, your parents help you and advise you and when you reach 30 you find you’ve developed the skills to be a strong, indep woman. Here’s an idea- take the downpayment, but as a loan. Pay it back. That way you learn the value of it. Cdns (of all ages) seem to have lost all perspective of the actual value of money. The fact that you’re reading about investments at your age is great, though.

#113 Stickler on 02.08.14 at 12:45 pm

“if Junior was unable to put together twenty grand, why does he deserve a house?”

He doesn’t…and can’t afford one in the first place.

The relatively new expectation that a parent is required to buy trendy expensive clothes & electronics for their pre-teen, pay 100% for university & now gift them a down payment is crazy.

Don’t get me started on $100 haircuts for 12 year olds…and those $1000 strollers. Madness!

Parents should laugh at the notion. It is ridiculous.

#114 TheCatFoodLady on 02.08.14 at 12:50 pm

#102:Kylie meyer –

kylie, kylie… is that a whiff of entitled resentment I’m sensing. No you didn’t choose when you were going to be born, none of us did. Neither did we choose when recessions would hit, when asset bubbles would form then pop, when economies would change or anything else… that’s called LIFE.

Yes, parents have a responsibility to get their kids off to a good start in life. The owe them good prenatal care, the best birth they can manage, proper nutrition & healthy habits growing up. They owe them the best primary & secondary education they can manage. And over & above anything else, they absolutely owe them a sense that as adults, they & they alone, (adult children) are responsible for their own economic independence, their own choices & the consequences thereof.

Maybe your parents & others live in ‘a million dollar house’. Perhaps they can leverage some of that to cobble together a full or partial down payment for their adult children. The question becomes – should they? What on earth is wrong with struggling? It won’t kill you – trust me. The majority of those who have come before you have struggled one way or another & surprise!… they survived & if they were smart – learned something.

IF parents are in a position to help – great. But if they have to borrow money themselves to help their kids put together a down payment, they’re robbing themselves. If it throws off their asset allocation for retirement – bad move.

There’s an interesting concept known as age of majority. That means the law & society considers you an adult & you’re treated that way. It’s not an adulthood of convenience where 29 year olds can run whining to Mommy because they waaaaaaaaaaaaant something.

Nobody, NOBODY needs to own a house. They most certainly don’t need to own one they can’t afford & anyone who can’t cough up a down payment above minimum, as well as all the associated fees can’t afford a house. A surprisingly large percentage of children are raised in rented homes. They don’t seem to have suffered any trauma from it.

Yes, times are hard. So what? Define hard. If you can keep any kind of roof over your head, feed yourself, pay your bills & get some enjoyment out of life, you’re miles ahead of much of the world.

A number of interesting studies have shown, (Millionaire Next Door has plenty), that adults whose lives are subsidized by Mommy & Daddy end up never learning the crucial lessons required to truly make adults fiscally responsible.

I’m not calling for newly fledged adults at 18 to be completely cut off – it takes longer than that to get fitted out to earn a living for most. We provided needed essentials as required to our 3. The oldest was independent by 19 & at 27, has an attitude & portfolio that would make Garth snivel with pride. Second one took longer – wrong degree. But he got work as a lowly intern & a diet of hot dogs, crap dinner & other nasties didn’t kill him. He’s fully self supporting at 23 & in actively working on a career change. The step daughter was over indulged by a single dad for too long. She’s been on her own a year now & the parental wallet snapped closed. She’s up to her eyeballs in debt, not living the life she’d like & not happy. We offer lots of empathy, advice IF ASKED & not a penny to help. She’s slowly figuring out it’s about choices.

Of course we’re available in emergencies – always. By emergency, I mean EMERGENCY. Medical catastrophes or a partner buggering off in the middle of the night with all the money would qualify. Very little else would.

Yeah, I’m a bitch. But it’s a lot more interesting speaking to adult kids as adults. NOW we can have a ‘friend’ type relationship. That wouldn’t work if they were still dipping into our bank accounts.

#115 Infused with Opiates on 02.08.14 at 12:51 pm

102 Kylie – if I win $1M on the lottery, and give jr. $100K, is he now “successful”? You are measuring success by acquisitions, rather than accomplishments.

Would you feel better if they gave you $100K for a university degree? Or have they already done that?

Would your parents have to sell or mortgage their
house to get you that money? Why should they do that? Is this good parenting, or are you entitled?

#116 Doug in London on 02.08.14 at 12:59 pm

@RVP, post #103:
How could so many boomers buy into the line: “Buy now or be priced out forever”? I’m a 53 year old boomer and clearly remember seeing corrections in the real estate market in the early 1980s and early 1990s. Why don’t more boomers remember these corrections and advise their kids it could happen again?

#117 Paul on 02.08.14 at 1:02 pm

#102 Kylie meyer on 02.08.14 at 10:40 am

Why shouldn’t our parents help my generation out? My parents live in a house worth probably a million dollars. It makes sense to have them make their kids lives a bit easier now then wait until they die where they can’t take part. It seems many of you want to punish our generation. We didn’t choose to be born in the 90′s, our parents made the choice. What happened to parents taking responsibility for helping with their kids success in life?

If everyone helped one another, the world would be a better place. It seems pointless to die with all this money and then watch kids struggle until they’re 30. I’m glad my parents understand this.
———————————————————-
Who are you HELPING?other than your self

#118 4 AM Sunrise on 02.08.14 at 1:15 pm

#102 Kylie meyer on 02.08.14 at 10:40 am

“My parent live in a house worth probably a million dollars”

Yeah, Kylie, and when you were a kid, there were parents who elbowed their way through eBay to pay $200 for a Tickle Me Elmo doll. (How much is it worth now?)

Just because your parents’ house is worth a million dollars doesn’t mean that they have $1 million cashola. It’s worth whatever a buyer is willing to pay for it. It probably is worth a million if you’re in West Vancouver, not so much if you’re in Windsor.

You wouldn’t be talking like this if you learned a thing or two about markets and finance. This blog is a great place to start.

People, let’s give Kylie the benefit of the doubt – maybe she’s more misinformed than entitled.

#119 fred on 02.08.14 at 1:16 pm

Garth is correct when he says “Second, this could be the worst decision ever for your family. All your kids will (and should) expect equal treatment.”

How about an uncle who says to his nephews, “I’m giving my farm to my one favorite nephew, and you other guys get a kick in the rear.”

It’s not fun.

#120 Stickler on 02.08.14 at 1:17 pm

@ #102 Kylie meyer on 02.08.14 at 10:40 am

“Why shouldn’t our parents help my generation out? My parents live in a house worth probably a million dollars. It makes sense to have them make their kids lives a bit easier now then wait until they die where they can’t take part. ”

—————————————–

>> From your narrative it appears that you believe that you are entitled to your parents hard work and savings. They owe you a large chunk of their life’s work.

How about this instead -> your parents enjoy their own wealth and leave you $0. All the while they teach and encourage you to stand on your own 2 feet?

#121 Kylie meyer on 02.08.14 at 1:18 pm

I’m not saying parents should give everything to us kids. I pay for my own phone. When I have kids I will do the same as my parents did. I’ll help them through school and help them with their house. That’s part of parents responsibility to their kids. They even tell us that! I’m not making things up. I’ve done as they asked like get good grades and go to university.

Doesn’t it seem strange to you if you had your kids suffer and struggle with no money and then you died with lots of it. Wouldn’t you parents feel better seeing your kids have a better life while you are alive to see it?

My best friend’s dad always says that he wants to die owing as much as possible. He bought cars for his kids and helped them buy a condo. He is happy knowing that his kids are not struggling. It’s win-win.

I don’t understand why everyone here gets upset with this. The 2000’s are not the same as the 1900’s. There is more money around. My parents even say that when they were my age they didn’t have new cars and their own phones. Now everyone does – all my friends have new cars. Are people jealous of our generation?

I sometimes think the older generation has lost touch with how things have evolved so fast in the past decade.

OMG — Garth

#122 Tipping Point on 02.08.14 at 1:20 pm

At Work:

Lately I have started to notice their is no real estate talk and those who once thought they were smart by taking on huge debt loads have been silenced and people are starting to turn to the commonsense ones for direction. Too Late!

How about this one: You buy a house thinking you can renovate the basement suite (thanks to HGTV) only to find out that you can’t due to building code, now you are stuck in a house that will cost you more than you initially thought. What’s up with people! By the way these are so called educated people. Apparently they can read but comprehension is toddler level.

“You couldn’t have seen this coming” – LOL whatever makes you feel better. Freakin hilarious when greedy and stupid finally get the wake up call.

I wonder is things can go up forever equates to the opposite where things can go down forever also.

MOM and DAD. I always thought that with age people could only get smarter having experiences a bit of everything or at least hearing about it – GUESS NOT!

#123 DonDWest on 02.08.14 at 1:23 pm

#116 Doug in London

Because for an entire generation real estate has gone up, up, up and never down. The 1990’s were over 20 years ago. How long must something last until it is considered a permanent trend/culture in our finite human lives? Truth be told, nothing is permanent, if we look back far enough, there are booms and busts for almost every resource. However, what good is analyzing a bell curve of 100 years when you only live to be 75 years old?

The fact of the matter is, if you want to buy a house for the first time, the window to do so is quite small. I would say it’s from age 20 to 40. That’s only 20 years to work with. I shouldn’t have to explain why it’s stupid for someone over the age of 40 to take out a 25 year long mortgage.

Many who waited for a correction simply waited too long for a correction that never came. There’s now an entire generation of renters. This is the first time this has happened in Canada and it’s unknown as to what the implications of this will be, especially when this generation nears retirement and must continue to pay rent during retirement. . .

#124 Ronaldo on 02.08.14 at 1:25 pm

#116 – Doug In London

Keep in mind that when you talk “Boomers”, there is a 20 year gap between the trailing end and the leading edge. And let’s not forget the RE crash of the mid 70’s as well. You were only 4 yrs old then. A 20% drop overnite. The tail end boomers were still in high school in 1980 so most probably don’t remember that one much either. You obviously did. There is a big difference in the thinking and the way things are done between the tail end and leading edge boomers. My guess is that the helicopter parents we talk about are in the tail end of that generation and

the one following. I see it in my own very large family. This current correction would have been over and done with in 08/09 had the government not meddled with it. Now we will all pay dearly for it. Young people choking in debt and slaves to the banks with no mobility. We will see lots of labor problems, strikes, etc. in the months ahead.

#125 Dogs playing poker on 02.08.14 at 1:38 pm

For those that would complain about Canadian Federal Super-Annuated employees.

Technically, their pensions are fully funded.

However, the Liberal govt., under the direction of Paul Martin (I think), appropriated the pension plan surplus of 30 billion dollars, to balance some budget, that no longer matters.

Every succeeding govt. of Canada is obligated to fund FSA pensioners until hell freezes over from current taxes and contributions.

Promises made, promises kept.

#126 DonDWest on 02.08.14 at 1:46 pm

115 Infused with Opiates

‘102 Kylie – if I win $1M on the lottery, and give jr. $100K, is he now “successful”?’

In today’s twisted society were money is everything – I would say yes. The truth of the matter is people with money are much better respected, regardless of how they received it, then those without. This creates a “snowball effect” were the person who already has money gets faster promotions, better job offers, better education, etc. In the end, this is what’s causing the huge disparities in income that you see.

There’s no easy solution to this problem – it’s a cultural phenomenon. The best people can do is to stop either worshipping or loathing the wealthy and to shut off their televisions were the wealthy spout their toxic propaganda. Hopefully, if enough people do as I suggest, people will get ahead due to their individual merit (hard skills as the corporates call it) rather than their bling/image (soft skills as the corporates call it).

#127 DonDWest on 02.08.14 at 1:52 pm

#121 Kylie meyer on 02.08.14 at 1:18 pm

“I’m not saying parents should give everything to us kids. I pay for my own phone. . .”

OMG, now I know you’re a baby boomer troll role playing an entitled Gen-Yer. This girl can’t be real, can she? So you’re all grown up because you pay your phone bill while your parents pay for everything else?

Looks like a troll, acts like a troll, is a troll. . .

#128 Vamanos Pest on 02.08.14 at 2:10 pm

pinstripe,

Is a bunch of questions an argument? Does it say anything or is it just rhetoric? If we have something to say, shouldn’t we just say it? Is this the behaviour of someone who has abandoned productive discourse in favour of antagonism?

#129 unbalanced on 02.08.14 at 2:15 pm

Me thinks Klyie M needs an intervention! With his limited knowledge about experience, he’s IN for a rude awakening!!!!! I tell my kids everyday at the supper table, when they turn 65 and get their 1st cheque they have to leave.

#130 4 AM Sunrise on 02.08.14 at 2:19 pm

#121 Kylie meyer on 02.08.14 at 1:18 pm

We could split society into 3 tiers: the Have’s, the Pretenders, and the Have-Not’s.

There IS a cohort of Have’s. They’re not just the 1%. They’re the Boomers with good jobs, generous pensions, and NO DEBT who bankroll their kid’s indie band’s video shoots $10,000 at a time. If you best friend’s dad has the cash to pay for his kids’ cars and condos (in full), well, that’s his choice. It’s good to die broke. You can’t take it with you.

The Pretenders are the ones whose lifestyles make then look like Have’s but are funded by dangerous amounts of debt. These are the ones who borrow against their houses to “help” their kids. This is a Bad Thing.

And the Have-Not’s, well, we know about those. 65-year-old Wal-Mart greeters who aren’t doing it by choice.

When you say “there is more money around”, you’re absolutely right. But it also LOOKS like there’s more money around because there is also way more DEBT. Again, I think you’re misinformed, so keep reading, and don’t mind the dogs who are doggin’ ya.

So I don’t know if your parents are one of the Have’s or the Pretenders. If they have the means to buy you a condo in full, in cash, well, count your blessings.

The original point of Garth’s post is that Boomer parents giving their kids down payments for real estate in an overpriced market is like buying them a ticket to a concert, but when they get to the bar, they realize that the band won’t play and the drinks won’t pour unless THEY pony up extra money.

Are the children of these Boomers properly anticipating and budgeting for the expenses that come AFTER the down payment? Or will these parents be on the hook for more?

#131 John Locke on 02.08.14 at 2:28 pm

To jan (#18), willdaman (#36), and Shawn (#39)

I was intrigued by the possibility of a CWB preferred share yielding 7.15%, so I did a little research as willdaman suggested.

Jan is correct that the cash yield at this moment is 7.15%, given the annual dividend of $1.8125, and Friday’s closing price on the TSX at $25.35 (http://web.tmxmoney.com/quote.php?qm_symbol=CWB.PR.A).

But note on the TSX graph how the share price has trended lower and lower over the past 3 years as we get closer and closer to April 30, 2014? (the 1st Redemption date opportunity for CWB)

Therefore, it is very likely that this $65M issue of Preferred’s will be redeemed in their entirety on April 30, 2014, per page 7 of the Prospectus (http://www.cwbankgroup.com/investor_relations/other_pdfs/Pref_prospectus.pdf), partly because the Reset Rate for the Preferred’s will be around 6.41% on that date (see page 6) based on the fact that the Govt Canada 5 Year Bond is trading at 1.41% at present (per Bloomberg.com) and then CWB adds 5% to that yield to get the next 5-year Rate (which would be a very high yield for a bank stock), but the other reason, as Shawn pointed out, is that CWB just issued $100M of Rate Reset Preferred’s with a yield of 4.4% (http://www.cwbankgroup.com/press_releases/docs/20140131_PressRelease_PreferredShareOfferring.pdf), so these funds will almost certainly be used to redeem all of the 7.15% Preferred’s that jan bought. CWB also have about $90M in cash on hand at any one time, per their Q3 2013 Balance Sheet, plus easy access to the bond markets, so these various funds could be dipped into as well.

So unfortunately, jan’s yield to April 30 will likely include one dividend of $0.453125 per share (payable April 30), less $0.35 per share (the difference between the likely price jan paid and the redemption price), less brokerage costs (say one percent, or $0.25 per share, or be generous and say it was a penny a share via a discount broker?), so the overall Yield to Maturity may be under 1.8% (annualized) or even negative over the next 2.6 months (unless jan bought before the Shareholder of Record date for January’s dividend, and thus received one more dividend)

But I’ll be watching on April 30 to see what happens, because if by some miracle the Preferred’s are not Redeemed, then they’ll be a nice buy, assuming Mr. Market doesn’t jack the price up before I can dive in…but there will probably be an advance News Release from CWB regarding their intentions, and not everybody gets the news at the same time…

#132 DM in C on 02.08.14 at 2:28 pm

/rant

Meanwhile my boomer parents (dad, actually) — had this great thought – HEY why don’t you buy our house and we can rent from you. They live in HFX, we live in YYC.

Sorry, but I am not responsible for your bad financial decisions (and there are many of them) — if you won’t sell and cash out of your place now, and prefer the head in the sand approach until you lose your house, not my problem. Sell and rent with the proceeds, I tell them. SELL AND RENT.

Do they listen? No, they want me to rescue them. As soon as we bought our house “oh good, you can finish the basement for us”. Um NO. You decided you didn’t want to work any more, and ‘retired on disability’ in collusion with a doctor who signed anything.

How about stop smoking (reason they won’t go to a rental), and use that $ to pay your mortgage down.

What the hell is with some people’s parents. Ay yi yi.

/end rant

#133 Old Man on 02.08.14 at 2:30 pm

I agree in helping one’s kids to buy a home, but the timing is not right, and have no clue about the market in Van. Decades ago in Toronto parents would gift the money with a letter to CMHC; pass the cash in the black; bring in a hidden second mortgage; or borrow the money on Bay Street as no credit check would ever show up.

The world has changed, and if I had a daughter to help would do such, as via genetics it is helping myself as she becomes one with me; it matters not if she is good or bad would never deny money for her. Now, might step this up a bit and cut her a check to join a golf and country club, as this is where she can pick out a future mate with an established career; money; and perhaps a nice home as well.

I don’t want a contingent liability forever, so let her hoop a man who can carry the load, and will gladly spring for the wedding with a smile on my face, as its over and done with forever.

#134 Moe on 02.08.14 at 2:31 pm

Suppose the housing market tanks 30%.
What’s gonna happen to all these preferred bank stocks / convertibles? You gonna get creamed, that’s for sure.


(slightly off topic, thoughts on German wrinklies)
I actually like the idea of wrinklies handing over their dough to my generation. Inter-generational distribution of wealth is out of whack at present, since the wrinklies lived through decades of high, positive interest rates. My in-laws jumped into long-term German government bonds in the early nineties (9% nominal, maybe 5% after inflation), time for them to share the gains. Plus, all their dividend income is tax-free!!! For everyone who bought stocks after ’09, he has to hand over 26.5% of all gains to the government.
The wrinklies have taken over society, I’m afraid.
Compounding interest at 9%, capital gains tax only for the younger generation, this is all insane.

You obviously do not understand bank preferred shares, and own none. — Garth

#135 Ihavenosenseofhumor on 02.08.14 at 2:47 pm

BANNED

#136 Stickler on 02.08.14 at 2:50 pm

@ #121 Kylie meyer on 02.08.14 at 1:18 pm

” I’m not saying parents should give everything to us kids. I pay for my own phone. ”

>>> Adorable. Another university ADULT with the mind of a child.

” Doesn’t it seem strange to you if you had your kids suffer and struggle with no money and then you died with lots of it. ”

>>> Replace “suffer and struggle” with “work hard and save”

Who says they have to die with lots of money? According to you their only options are:

1. Give $ to our adorable snowflake or

2. Die with lots of $ left over.

Amaze balls!

#137 rainclouds on 02.08.14 at 2:58 pm

121# Ahh yes, the perspective of a snot nosed brat………….those of us who didnt rely on the bank of mommy and daddy and actually WORKED for whatever we have ….oh never mind …..pointless……. give up…. am probably stuck behind you in traffic while you text mommy to find out what’s for dinner. Good luck with life…..your gonna need it!

Back to the reason we drop in on Garth’s cyber clinic

http://vancouverpricedrop.wordpress.com/

#138 not 1st on 02.08.14 at 3:02 pm

So the boomers and wrinklies suck the economy dry after two generations and then they still want to lash out at someone like Kylie. What a bunch of hypocrites.

You guys are the ones who voted for people to underfund our institutions. You guys are the ones who opted for endless inflationary stimulus instead of letting the economy correct naturally. You guys are the ones who sat in your cushy 9-5 jobs for 35 years and blocked everyone below you from getting ahead. You guys are the ones who borrowed from the next generation to fund your stupid over consumption and you guys are the ones who blocked new technologies that would have made a difference real difference in our world by now.

So it surprises you that gen Y has taken notice of what was done to them. I feel for that generation more than any other. They are a bit narcissistic but only because of the generation that preceded them.

#139 Aggregator on 02.08.14 at 3:12 pm

Craigslist GTA Average Rental Price Index – Chart

Note: Data is based aggregate listing information, including basement and furnished rentals.

Jan 2014 vs Jan 2013 (YoY% Average Rental Offer)
1 Bed 3.4%
2 Beds 11.1%
3 Beds 14.7%

Q4 2013 vs Q4 2012 (YoY% Average Rental Offer)  Chart

All Beds (including 4 beds) 11.83% ($1,886)
1 Bed 7.6% ($1,521)
2 Beds 15.8% ($2,107)
3 Beds 19.3% ($2,390)

It's no coincidence that rental prices are on the same trajectory path as the Bank of Canada's balance sheet. Chart As long as Poloz keeps printing (accommodating speculators who are cornering home buyers and renters) along with annual increases in foreign-born migration stock, rental prices will keep soaring.

Worry about inflation and stop believing the BoC and StatsCan's inflation rate. They lie because they have to. Find new sources for inflation data because you're going to need it to know how much risk to take in order to keep pace with the rising cost of living. And don't be surprised when that chop of organic meat is priced at over $30/kg in a few months.

#140 Old Man on 02.08.14 at 3:21 pm

Imao, as one can established a portfolio between a husband and wife in retirement with a gross income of $100,000 and pay no taxation; this can also be done along the way with a good financial fee based advisor, more of less. There is capital gains that are taxed at 50%, and the rest is a free ride, but the key is the dividend tax credit which is a hard deduction against tax payable; get enough of those and poof no taxes are legally payable.

#141 Daisy Mae on 02.08.14 at 3:36 pm

#114 TheCatFoodLady….to #102 Kylie: “Yes, parents have a responsibility to get their kids off to a good start in life. The owe them good prenatal care, the best birth they can manage, proper nutrition & healthy habits growing up. They owe them the best primary & secondary education they can manage. And over & above anything else, they absolutely owe them a sense that as adults, they & they alone, (adult children) are responsible for their own economic independence, their own choices & the consequences thereof.”

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

Are your listening, Kylie?

#142 Linda Mulligan on 02.08.14 at 3:41 pm

Re: #102 – Kylie: Hate to break it to you but paying for your own phone is not taking full responsibility for yourself. As for parents, have to ask – do you really think your parents will be dead by the time you are 30? Is their health that bad? Have you considered that your parents might well still be alive when you are 50 or even 60? Have you thought about the fact that their ‘maybe worth a million dollars’ house might be required to cover the cost of your parents care in their old age? Check out what long term care costs. Even IF the parental home is paid for in full (if not, that putative million bucks might be paid to the bank – not to your parents & certainly not inherited by you) a million bucks won’t go far, especially if the parents linger for a decade or three. BTW, it is against the law to finish them off so you can get your hands on the parental assets. IF your parents can help you & want to help you, that is like you winning the lottery but don’t think that you are owed anything just because you didn’t ‘choose to be born’. None of us chose to be born & consider the alternatives: miscarriage or abortion. In short, no life at all.

#143 Shawn on 02.08.14 at 3:43 pm

CWB Preferred shares

John Locke at 131.. excellent research

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

As you concluded, those 7.25% prefs will be redeemed on April 30.

CWB indicated its intention (subject to approvals) to redeem. This was indicated in its Q4 release in December. Since then it has taken the step is ussinung th new rate-rest prefs which replace these 7.25% puppies, that will be redeemed.

From CWB Q4, at page 7…

“On April 30, 2014, unless the outstanding Series 3 preferred shares are redeemed by CWB, subject to approval of the Office of the Superintendent of Financial Institutions Canada (OSFI), the corresponding dividend yield will reset to a rate of 500 basis points over the yield on the applicable Government of Canada benchmark security. In consideration of the current capital market environment and CWB’s investment grade credit rating, management and the Board of Directors believe it is in the best interests of common shareholders to redeem these shares. However, in order to maintain CWB’s Tier 1 regulatory capital ratio above internal thresholds, the issuance of qualifying replacement capital will be required prior to the anticipated redemption date.”

#144 Old Man on 02.08.14 at 3:44 pm

Now do not overlook the benefits of establishing a holding company to park assets as a separate legal entity, as lots of tricks can be done. Case in point, as most Dentists are incorporated – why? They have established the wife sitting at home who becomes the agent with a salary as the bookeeper; hiring agent; and the purchasing agent with paid benefits that can be written off.

#145 Victor V on 02.08.14 at 3:50 pm

http://www.torontorealtyblog.com/archives/timing-the-market/10589

I was in a house earlier this week – call it my “dream house, circa 2019,” that was listed for sale at $2,895,000. I marvelled at this home, and thought about the colossal mortgage I hoped to be saddled with one day, and then wondered what the owner paid for it back in October of 2007.

I told my colleague, “I bet he paid, like, $1.9M, or something.” She said, “Oh, I bet it was less.”

When I got back to the office, I was absolutely astonished to see that he had paid $2,650,000, and thus he wasn’t going to make any money after acquisition and disposal fees.

Imagine – owning this house for 6 years, 4 months, and listing for $245,000 more than you paid for it – a 9.2% increase, or a paltry 1.46% per year.

Did this person overpay in 2007?

Or has the market for luxury homes just not risen nearly as much as that of the market average?

#146 John Mc on 02.08.14 at 3:54 pm

#144

The ONLY benefits of a holding company are deferring taxes and depending on circumstances, perhaps splitting some income. In the end, you pay the same tax rate.
There are no ‘tricks’.

#147 Victor V on 02.08.14 at 4:03 pm

Kim speaks with Craig Alexander, Chief Economist, TD Bank Group about how much home prices are really overvalued and why.

https://www.tdwaterhouse.ca/video/index.jsp?language=english&playlist=1&portal=1&video=200&referral=webbroker-eng

#148 PoltawaDiva on 02.08.14 at 4:06 pm

#12 Jan: “Yes but in that case if its a loan the bank will not advance the mortgage monies…”

Not true. We gave our son a second mortgage (as the “down payment” Refused to sign any kind of gifting declaration. On top of that, he had two “blemishes”on his credit report (unpaid/disputed cable charges). ING coughed up the mortgage.

#149 4 AM Sunrise on 02.08.14 at 4:12 pm

#139 Aggregator on 02.08.14 at 3:12 pm

Good to know I’m not imagining things when I opened up Craiglist just yesterday and said, “holy %[email protected]& rents are up this year! A studio in my building is renting for 5.88% more than what I’m paying right now!”

What’s going on? A wave of downsizers increasing demand for rentals? Greedy landlords trying to recoup their mortgage costs? My fault for living in the BPOE? ;-)

#150 dosouth on 02.08.14 at 4:17 pm

#102- Kylie – Nice trolling, see you caught a couple though….

#151 Chris L. on 02.08.14 at 4:20 pm

#121 Kylie meyer on 02.08.14 at 1:18 pm

Make sure you are upfront with your boyfriend about your expectation to be cared for and nurtured from cradle to grave. Some poor sap is going to be in for a shocker. Hope Daddy has deep pockets because hubby sure as heck wont.

#152 Keith in Calgary on 02.08.14 at 4:22 pm

She’s a troll for sure.

Today’s gen x and y are mentally dysfunctional for the most part, but, they are also not intelligent enough to put together a coherent trolling argument either.

I left the parental house when I was 17…….of my own accord. Never been back. The process is defined as maturing and “growing a pair”. Something that today’s helicopter parents won’t let their kids do on their own.

#153 Chris L. on 02.08.14 at 4:24 pm

#102 Kylie meyer on 02.08.14 at 10:40 am

“Why shouldn’t our parents help my generation out? My parents live in a house worth probably a million dollars. It makes sense to have them make their kids lives a bit easier now then wait until they die where they can’t take part. It seems many of you want to punish our generation. We didn’t choose to be born in the 90′s, our parents made the choice. What happened to parents taking responsibility for helping with their kids success in life?”

So what exactly will you be passing along to your kids? Mommy and daddy’s hard earned money? The money you don’t squander on yourself?

#154 Bailing in BC on 02.08.14 at 4:26 pm

Sorry no time to read all the comments today, so my apologies if this has already been posted and or discussed.

http://business.financialpost.com/2014/02/06/illness-and-bad-investments-wreck-couples-plans-but-recovery-possible/

Let’s play a game. Who can hazard a guess as to which building they bought in. For the record I have no clue, but I would guess it’s in Kelowna.

#155 frank le skank on 02.08.14 at 4:29 pm

#108 };-) aka Devil’s Advocate on 02.08.14 at 12:03 pm

#29 Bob on 02.07.14 at 8:57 pm
To the realtors on this site – yes, it happened my landlord tried to jack my rent up over 30%. I moved :) it was wonderful. My new rental is managed much better. Old unit is still vacant.

Bob: As long as we subscribe to this monetary based economy dependant on growth rest assured, you can run but you cannot hide. Higher rents are coming to a neighbourhood near you.

And isn’t that what this blog is about at the very foundation of it; the preservation and accumulation of wealth?

Deny it all you want, you are the very people who feed that which you most oppose.
====================

Welcome back from Exile DA. When did inflation hit 30%? I see your conflict of interest still blinds you.

#156 Casual Observer on 02.08.14 at 4:36 pm

As a middle-aged person, I’ve always tried to learn from the older generations “wisdom”. Recently I’ve had conversations with several people either close to retirement, or in retirement, but their wisdom seems to be tainted by the fact they appear to be lacking in math skills.

They can’t seem to understand our family’s decision to wait until the numbers work in our favor before purchasing again (we sold a few years back and are currently renting). The general consensus is that it’s always been expensive to buy and that things are the same as they’ve always been.

I asked one of the older retirees what he paid for his first house. He said $5000, but then he added that he was only making $1/hr. I said let’s do some math…

I said if you were making $1/hr. working full time (2000 hrs. /yr.), then your first house (not condo) cost you 2.5 times your salary (one income, not two).

I reminded him that houses today cost between 5-10 times the average person’s income. I also said that if he could show me a reasonable house in a good location for 2.5 times the average income of one person, then I would be happy to buy it right now.

He didn’t have anything to say, other than the fact that houses back then didn’t have all the modern features that today’s homes have, and that it’s always been expensive.

These seniors I was speaking with also don’t realize that most people these days have to take responsibility for funding their own retirement since they all have good, guaranteed, indexed pensions.

There seems to be a disconnect between the way boomers and seniors remember things being in the 50’s, 60’s, and 70’s, and the way things are today.

They think they are the same, or at least similar, but they are vastly different, and this is reflected in the advice and opinions that they are passing along to their kids and grandkids.

This is not meant to be a “generational envy” rant or anything like that. Every generation has to go through it’s own challenges and hardships.

Some of these people have made huge sacrifices in their lifetimes and they have my deepest respect. They earned everything they’ve got, and don’t owe me or anyone else anything, but in my opinion, they are doing younger generations more harm than good by giving them outdated advice and by not being able to do the math.

#157 not 1st on 02.08.14 at 4:46 pm

…one can established a portfolio between a husband and wife in retirement with a gross income of $100,000 and pay no taxation

At an average dividend payout of 4-5%, this would mean you need $2 million invested to get that return. Thats a stretch for even the most ardent savers and investors.

#158 LS in Arbutus on 02.08.14 at 4:52 pm

#23 Jan – The below numbers are assuming you live in BC and are using the following calculator:

http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2014-Personal-Tax

To be really clear what Garth and HR&R Blockhead are trying to say is that you have to have taxes payable (on your tax return) in order to get any benefit from an RRSP deduction.

An RRSP deduction allows you to reduce your CURRENT year taxable income. So, for example, if you have $20,000 in taxable income you would owe approx $1,491 in taxes. (Per the above calculator, assuming you live in BC.)

If you made an RRSP contribution of $5,000, it would reduce your taxable income to $15,000 and you would owe $579 in tax.

That is, a $5,000 contribution would save you $912 in taxes. This is because you are paying taxes at a low rate.

RRSPs are really only valuable when you have higher taxable income and are paying taxes at higher tax rates. For example if you had $150,000 on the last $1 of taxable income you are paying tax at a 43.7% marginal tax rate. A $5,000 RRSP deduction would save you $5,000 * 43.70% = $2,185.

Because you are saying you don’t have much income, there is not much point in making an RRSP contribution if you aren’t paying much tax because it won’t generate a very big tax refund (if any.)

Finally, you can make an RRSP contribution (if you have contribution room) and you can decide not to take the deduction until a future year. That is you can put $5,000 into an RRSP this year and save the deduction for sometime in the future when your income is higher.

So…. long story long, you can make the contribution to your RRSP, you can decide to deduct it or not deduct it until a future year, but there is no real reason to make a contribution and deduction if your taxable income is quite low.

#159 Happy Renting on 02.08.14 at 4:55 pm

#92 yorel on 02.08.14 at 8:42 am
You do have legal standing if you achieve common law status (not just short-term, shacked-up boyfriend). Three years or one year with the union having produced a child and your friend’s son would have the right to continue living in the marital home, even if the relationship has broken down (Opiates – the term applies even for common law relationships). So either he hadn’t achieved legal common law status or he/the cops didn’t know his rights.

Even without being legally common law he could still make a claim against monies paid into the home.

#160 Andrew Woburn on 02.08.14 at 4:55 pm

#76 Spectacle on 02.08.14 at 12:38 am

Planning: Garth consistently illustrates how little financial/business education our society permits.
=================================

A business associate once said, “Why would you want to unionize your customers?” (by putting them in touch with each other). I guess the government doesn’t want to unionize voters by educating them on things that matter.

#161 Happy Renting on 02.08.14 at 4:57 pm

Kylie (benefit of the doubt that you’re not a troll), the parents in the blog post can’t afford it. Not sure what else there is to consider after that.

#162 rainclouds on 02.08.14 at 4:59 pm

#138

The reality? The world doesn’t care. There are many successful Gen X and Y’s. Presumably they think, act differently and are far less reliant on excuses.

Every generation of successful people have the discipline to set priorities, sacrifice. All had to overcome mistakes and significant challenges but perservered in achieving their goals. Consequently have little time for the blame game.

The unsuccessful in every generation seem to have a different mindset……………….

#163 Infused with Opiates on 02.08.14 at 5:11 pm

148 Diva – my experience was similar to Jans. That was a long time ago.

145 Victor – homes where I live are cheaper than they were 6-7 years ago. I also recall selling my last house for less than it appraised for 7 years before that. Long slow melts both times.

#164 -=jwk=- on 02.08.14 at 5:16 pm

#131 John Locke

this type of calculation is called Yield to Worst. We’re going to see a lot of pref bank shares at 5.5-6.5% roll over in the net few years to 3-4%.

Only if you buy rate resets. I don’t. — Garth

#165 Andrew Woburn on 02.08.14 at 5:44 pm

#94 Steven on 02.08.14 at 9:15 am
Family planning Garth? Are you joking?
#109 Dogman01 on 02.08.14 at 12:20 pm
“if you wanted to design a environment to encourage not having kids ; this is what you would present 20 something’s with”.
======================= =============

If nothing else solves Canada’s house pricing problem, eventually this will.

“Scientists are testing a contraceptive pill on hundreds of males in Indonesia. So far, the results are promising.”

http://thediplomat.com/2013/09/a-male-contraceptive-pill-for-indonesia/

#166 DR on 02.08.14 at 5:45 pm

Do you know how much the flippers put into these homes? Buy for 305, invest 150, sell 450 doesn’t work out too well….

hmm all junk locations…I think I see the problem.

#167 Andrew Woburn on 02.08.14 at 5:49 pm

#123 DonDWest on 02.08.14 at 1:23 pm

Many who waited for a correction simply waited too long for a correction that never came. There’s now an entire generation of renters.

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

You mean the 30% of people who still don’t own a house, possibly the lowest percentage of renters for several generations?

#168 Doug in London on 02.08.14 at 5:49 pm

@Ronaldo, post #124:
I was a teenager, not a 4 year old when the 1970s real estate correction occured. I don’t remember it, but do recall talk of how the economy had fallen on hard times during this period. By the way I finished high school in 1980 and CLEARLY remember the recession of 1982 (followed by high interest rates) and the effect it had on real estate. I remember it like it was yesterday, complete with movies of that year like E.T. and Poltergeist, and music like Nova Heart by The Spoons, that first album by Asia, and For Those About To Rock by AC/DC. 1982 was also the year 8 track tapes stopped being made. If a younger trailing edge boomer like me can remember that, as well as the real estate bust of the early 1990s, other late (or early) boomers should remember it also. By the way, what’s wrong with renting? I’ve been doing so for many years and love the freedom and flexibility. I can pack up and leave on short notice for a job out of town, or a 4 week vacation. If the need to move a long distance arises, I can pack up and leave without having to sell a house. By the way, I actually am a property owner. have you ever heard of CAP REIT? How about XRE, CWT.UN, RMM.UN (which I learned about on this blog) or STWD on the NYSE, have you heard of any of those real estate investments? And now the punch line, they’ve been on sale for the last 7 months.

@not 1st, post #138:
You’re WRONG with your assesment of boomers. I never voted to underfund educational institutions. That was the idea of Conservatives, a party I have NEVER voted for and NEVER will. In the provincial election of 1995 I voted NDP. Why? I liked Bob Rae’s idea of reducing work hours rather than ruthlessly cutting everything in sight, including education. I didn’t actually vote for economic stimulus, any other party in power would have done the same. As for the part about staying in a cushy job for 35 years you are WRONG AGAIN!!!!!! I left a full time permanent job with a buyout in 1995 and have been working on and off in temporary assignments since. I LOVE it, despite the volatility I have more time off, more variety rather than being bored sick at one place (and becoming a boring mid life crises) for 35 years. If everyone worked less hours as I have done for the last 19 years, there would be enough jobs for EVERYONE, including younger people. I feel good about what I’ve done, and I am a boomer. before you criticize we boomers, try doing some serious research about us.

#169 eddy on 02.08.14 at 6:09 pm

#64 DR on 02.07.14 at 11:12 pm

“markets might be in a correction”????

More like, markets are in a correction. Prices have been falling for at least the past half year across most of Canada. Only disguised by the statistical mirage of a changing sales mix. Flaherty’s CMHC changes were absolutely deadly to the entry-level.

Falling..ok then. Let me know when I can buy a bungalow in Leaside for 350K again please, will ya?

Oh right the one that just sold will “fall” to 750K which is a 25 percent drop right

—-

Please don’t get me started on Leadide. One bungalow just sold for 1,050,000. on a 29 ft frontage, right of way drive

#170 Infused with Opiates on 02.08.14 at 6:10 pm

159 Happy – I found this in a quick google search for “matrimonial home definition ontario”

“It must be noted that the protection of the
entitlement to the matrimonial home under Part II of
the Family Law Act in Ontario is only given to married
spouses and not common law spouses.”

Further reading showed that you cannot have a prenup
to exlude a spouse from the matrimonial home but you
can have an agreement for recognizing the value at the
time of marriage as belonging to the one spouse. So you cant kick ’em out but you own more of it!
(Whatever good that does…..)

#171 DR on 02.08.14 at 6:24 pm

Please don’t get me started on Leaside. One bungalow just sold for 1,050,000. on a 29 ft frontage, right of way drive
——

second one this week that sold over a million.

And yes I saw that in person…no private drive.

Did you have a chance to buy one in Leaside?

#172 Bob Copeland on 02.08.14 at 6:53 pm

Do you predict a major (20-30%) correction in the American stock market?

#173 Victor V on 02.08.14 at 6:55 pm

http://www.torontolife.com/informer/toronto-real-estate/2014/02/07/february-2014-the-chase/

The buyers: Michelle Iceruk, a 28-year-old graphic designer, her sister, Leanne Iceruk, a 31-year-old social worker, and Leanne’s husband, Richard Laszlo, a 34-year-old energy analyst.

The story: Michelle and Leanne’s parents are ­custom-home builders who schooled their daughters on the merits of owning property. But, at almost 30, Michelle was struggling to save enough for a down payment. She turned to Leanne and her husband, Richard, who were already owners and were thinking of buying a second property as an investment. The trio pooled their resources and set a maximum budget of $700,000, including the cost of renovating a house into multiple suites. Then they set their sights on the Bloor and Lansdowne area and started the hunt.

THE BUY: Campbell Avenue (near Lansdowne and Dupont). Listed at $569,900, sold for $626,000.

After touring nearly a dozen more duds, the trio found a house that was ideal for a triplex. The upper-level apartment, where Michelle would live, even had an attic with a roughed-in kitchen. The clincher: the basement had seven- and eight-foot ceilings. They offered $46,100 over asking—and still lost to one of three other bidders. When the winning buyer backed out, they upped their offer by another 10 grand to scare off any remaining suitors and got the house. The renovation should be done in time for Michelle to move in next month.

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

Another bidding war “winner”…

#174 DonDWest on 02.08.14 at 6:57 pm

#156 Casual Observer

True enough, I have ZERO respect for the older generations because they can’t do basic mathematics.

Math doesn’t lie, and the math is clear, it is indeed much harder for our generation in comparison to their own.

Taking “life advice” from the older generations is like taking advice from a kid who beat Tetris level one while you’re struggling on level nine. All around, horrible mentors. For the sake of my sanity I’ve kept far away from pompous baby boomers and seniors. I found life for me slowly but surely got better the day I decided not to listen to these arrogant morons.

There’s nothing useful you can learn from seniors and they just piss you off the moment you attempt to listen to them. . . They’re nothing but a generation of old fools; there’s no wisdom to be found.

#175 rusty venture on 02.08.14 at 6:58 pm

Thanks Garth! Very timely blog, as I was thinking of buying a house and putting my kid on the title, but living in it myself when I retire…

http://www.realtor.ca/propertyDetails.aspx?propertyId=13587009&PidKey=1512844340

#176 Old Man on 02.08.14 at 7:00 pm

The Family Reform Act from the 1970’s is nothing to mess around with, as in the 1990’s was at a high end law firm to transfer capital into a Trust Fund. The first question the senior partner asked me is if I had ever messed with a woman in the past, and said many, so he wanted all the details of my sordid life to ascertain a future claim. He was shocked by it all, but nothing material was there, so got a pass.

#177 Andrew Woburn on 02.08.14 at 7:13 pm

#156 Casual Observer on 02.08.14 at 4:36 pm
As a middle-aged person, I’ve always tried to learn from the older generations “wisdom”. Recently I’ve had conversations with several people either close to retirement, or in retirement, but their wisdom seems to be tainted by the fact they appear to be lacking in math skills.
=======================================

It is hard for older people to grasp that Canada’s population has doubled since the Fifties and also the extent to which population has concentrated in urban areas. It seems to have happened so slowly. It is only in or near cities that residential land is so expensive but that is where 80% or more of us now live. Few people including the elderly really get the relationship between cheap money and high house prices or they wouldn’t be taking such insane risks for themselves and their children. It is this geographic concentration plus inflation plus cheap money that has driven urban price levels.

The pundits claim we are in for decades of low interest but the Third World is full of bright young people who want stuff and they are going to get it. Bill Gates thinks there won’t be any really poor countries left by 2035. Finance is essentially about old people lending money to young people who can work to pay it back. Demand for debt will be generated in emerging markets and Canadian interest rates will have to follow. I think Kylie’s parents will be lucky to get $650K for their $1MM pad when investors stop accepting crap interest rates.

#178 John Locke on 02.08.14 at 7:22 pm

CWB Preferred Shares
……………………………………………………………………

Shawn @ 143: Nice catch – it didn’t occur to me that CWB would have announced their intentions so far in advance of a Redemption Date, as many Issuers don’t. So odds are almost 100% that this ship has sailed, given the Notice to Redeem in the Q4 news release.

But I like your idea re CWB common shares as a possible alternative investment, so I’ll run them thru my financial model and see what comes out the other side.

#179 Bailing in BC on 02.08.14 at 7:26 pm

Devil’s Advocate, I know I shouldn’t encourage you but do you happen to know which property these people bought in?

http://business.financialpost.com/2014/02/06/illness-and-bad-investments-wreck-couples-plans-but-recovery-possible/

I’m thinking it’s Kelowna

#180 kitchener on 02.08.14 at 7:56 pm

Garth, I have noticed that Vancouver prices have been dropping lately. Do you think the correction is over and it is okay to buy there again?

#181 Daisy Mae on 02.08.14 at 8:20 pm

#121 Kylie: “I sometimes think the older generation has lost touch with how things have evolved so fast in the past decade.”

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

Kylie, you have alot to learn. And you will.

#182 Old Man on 02.08.14 at 8:23 pm

#175 rusty venture – know the city and the subject property has been renovated; location is fair; nice established neighbourhood; an inferior property compared to others which supports value; but the asking price is way too high. Get on the internet and shop around for a better location at a much cheaper price for equal value. This is one I would never buy at that asking price.

#183 John Mc on 02.08.14 at 8:30 pm

#174
There’s nothing useful you can learn from seniors and they just piss you off the moment you attempt to listen to them. . . They’re nothing but a generation of old fools; there’s no wisdom to be found.

Ah if only to be as wise and smart as you….

#184 Happy Renting on 02.08.14 at 8:37 pm

#170 Infused with Opiates on 02.08.14 at 6:10 pm

Makes it cheaper to buy your ex out of the house when divorcing.

God, family law is depressing.

(Thank you for the house pre-nup tip. I stand corrected!)

#185 Daisy Mae on 02.08.14 at 8:38 pm

#129 Unbalanced: “I tell my kids everyday at the supper table, when they turn 65 and get their 1st cheque they have to leave.”

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

That is so funny! LOL

#186 NFN_NLN on 02.08.14 at 8:45 pm

#180 kitchener on 02.08.14 at 7:56 pm
Garth, I have noticed that Vancouver prices have been dropping lately. Do you think the correction is over and it is okay to buy there again?

———–

Hahah, this is the last post in the forum right now. I wonder if Garth, OK’d everything, read this post and then had a self induced brain aneurysm?

#187 Andrew Woburn on 02.08.14 at 8:51 pm

#83 Bo Xilai on 02.08.14 at 2:15 am
Hey Garth, I thought you said Mainland Chinese money wasn’t pumping up Vancouver’s real estate bubble…

The South China Morning Post would seem to disagree…
=================================

Before Vancouver realtors run out for champagne they should also read this.

“Canada floats new citizenship rules that could affect thousands of Chinese”

http://www.scmp.com/news/china/article/1423485/canada-floats-new-citizenship-rules-could-affect-thousands-chinese

#188 Daisy Mae on 02.08.14 at 8:51 pm

#132 DM of C: “What the hell is with some people’s parents….”

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

Stick to your guns, DM of C.

#189 Linda Pearson on 02.08.14 at 8:55 pm

Let’s all hope that DonDWest and Kylie never get together and reproduce.

#190 eddy on 02.08.14 at 9:09 pm

#171 DR on 02.08.14 at 6:24 pm

Please don’t get me started on Leaside. One bungalow just sold for 1,050,000. on a 29 ft frontage, right of way drive
——

second one this week that sold over a million.

And yes I saw that in person…no private drive.

Did you have a chance to buy one in Leaside?

Second in a week over a million? Let’s agree that this is collective insanity. And no, I am presently not looking to buy.
One just sold at Royal York and Bloor, a bungalow for $852,000. same MO, hold off offers, get in line, 100K over list. There were two others nearby (Islington Bloor) that sold last week , both for …$852,000. I’m curious if its the same 10 buyers going form house to house. These type of houses were going for 650,000 three years ago, like Leaside. I call it debasement of the currency.

#191 DocInWaitingRoom on 02.08.14 at 9:17 pm

100% of my parents “wealth” is in realestate. Mine is 0% so lead by example only works if you are leading idiots.
Maybe will be 5% after make a few mill being student for 2 to 3 decades…

Sure I cut my own hair and my kids (father bought first trimmer), make my own espresso and do my own diy but my father was right most money goes to mortgages and loans.

Saving a few bucks shopping around or cutting own hair are drops in a big bucket but those people who are spending big loans, paying large interest amounts over 40 years (most earning life) and spending money on material things to fill a home and 7 buck coffees (or 100 dollar haircuts) will have issues when they are at peak earnings for a family. Ive seen hundreds of patients in economic hell and shambles as they didnt expect a loved one to get sick or in an accident. Shit happens often. Whos going to take care of you or that loved one when they cant even toilet themselves?

At least I am in the hole to get a great salary not in a growing hole for a property or homes.

My dad had quite the time to sell one of his property for several years with court issues and more headaches. Ive told him he can keep it all too many headaches for me. He was happy but I calculated property growth and it was basically inflation there are some nice calculators online. Great!

#192 Hillbilly on 02.08.14 at 9:22 pm

comment at # 156 Casual Observer

The best comment of this thread.

Absolutely agree and this has been my experience as well.

#193 Blobby on 02.08.14 at 9:22 pm

I dont get it.

When i was a kid, i was determined to do it my way without any help from my folks at all.

Where’s the pride nowadays?

#194 Infused with Opiates on 02.08.14 at 9:24 pm

165 Andrew

https://www.youtube.com/watch?v=eJEU8UKMXTs

#195 Ronaldo on 02.08.14 at 9:30 pm

#174 Don DWest –

”There’s nothing useful you can learn from seniors and they just piss you off the moment you attempt to listen to them. . . They’re nothing but a generation of old fools; there’s no wisdom to be found.”

How’s the job hunting going?

A few words of wisdom from one of those old fools:

”If you listen to a fool and you don’t learn anything, who is the real fool?”

You can learn something from everyone.

#196 Devore on 02.08.14 at 9:39 pm

#68 jan

Me – in other words since i have no income i do not qualify right ??

Low income earners who have money to invest are better off with TFSA than RRSP. If you have no income, or fall into low tax bracket, you barely get any tax refund, while paying potentially much higher taxes when you take money out of RRSP later.

#197 Happy Renting on 02.08.14 at 9:44 pm

#174 DonDWest on 02.08.14 at 6:57 pm
“There’s nothing useful you can learn from seniors and they just piss you off the moment you attempt to listen to them. . . They’re nothing but a generation of old fools; there’s no wisdom to be found.”
=====================================

Don’t know if I’d go that far. I know some Depression-era/pre-boomer retirees who could teach “kids these days” a whole lot about thrift, hard work, courtesy, and humility. (If there are any Millennial blog dogs, speak up now or Kylie will end up being your default representative!)

Like all advice, you need to evaluate the suitability and wisdom of what’s being dispensed.

“Work hard and save money.” Yup.

“Get [email protected] to manage your investments, like we do.” NOPE.

#198 Devore on 02.08.14 at 9:46 pm

#84 Ralph Cramdown

That’s the bottom line, isn’t it? Investors make money in any environment. Whiners, academics, theorycrafters and those with no investable assets keep complaining about manipulated markets which refuse to behave according to their pet economic theory. Best economic theory is the one that makes you money, not the one that tells you what should happen.

#199 Pulp Faction on 02.08.14 at 9:52 pm

Sorry to hear of your untimely demise.
I have warrior’s blood in my veins, I’ll send you a pint.
Not only will it give you life once again, but it will heal your leg, cure cancer and baldness, make your dangler grow bigger, and make you an allstar in bed.
No warranty.

#200 Victor V on 02.08.14 at 10:28 pm

http://www.bnn.ca/News/2014/2/3/In-hot-Canadian-market-parents-hold-keys-to-homeownership.aspx

The overall effect of parental aid on the economy is unclear, he said. While it has helped fuel demand for housing and kept upward pressure on prices, it could dampen consumption if it means the parents have to cut back on their own spending to help their kids.

Most important, Tal said, the wealth of the baby boomers and their willingness to help their offspring likely provide a cushion in case of economic shock that might otherwise prompt a wave of mortgage defaults, and even a housing collapse.

“The increased share of this kind of activity is giving the housing market some more room to maneuver in case of an economic shock,” he said.

#201 Ronaldo on 02.08.14 at 10:39 pm

#189 Linda Pearson – way too funny.

#202 Ronaldo on 02.08.14 at 10:44 pm

#198 – Devore –

”Best economic theory is the one that makes you money, not the one that tells you what should happen.”

I like that line, can I borrow it?

#203 April on 02.08.14 at 10:52 pm

#186 Where have you been. The correction is only beginning. Don’t be led astray by RE industry spin.

#204 Casual Observer on 02.08.14 at 10:58 pm

DonDWest on 02.08.14 at 6:57 pm
There’s nothing useful you can learn from seniors and they just piss you off the moment you attempt to listen to them. . . They’re nothing but a generation of old fools; there’s no wisdom to be found.

I disagree. I think there are many lessons that can be learned from the older generations. If younger generations dismiss them as fools, they are missing out on a lifetime of experience and wisdom.

I just think that some of their advice is tainted by poor math skills, and a refusal to think that the circumstances young people are facing today might be more challenging than the circumstances they faced.

Having said that, following their advice has been richly rewarded over the last 20 years, and for the most part, over the last 50 years, but as they say, past performance is no guarantee of future returns.

#205 45north on 02.08.14 at 11:12 pm

T.O. Bubble Boy Bitcoin falls from $960 to $684 in a couple of days

$632 right now

RVP Regarding parents gifting down payments to their children:

They also truly believe that real estate can only ever go up in price over the long term and it will never go down.

that is true, for many people their core belief is that real estate doesn’t go down. They are the ones who will be hurt the most when it does.

Tipping Point Lately I have started to notice there is no real estate talk and those who once thought they were smart by taking on huge debt loads have been silenced

funny you don’t hear “look at me, I paid $500,000 for a house that’s only worth $450,000, plus if I sold right now I would have to bring a cheque to the table”

Dogs Playing Poker Every succeeding govt. is obligated to fund FSA pensioners

well there is that

4 AM Sunrise We could split society into 3 tiers: the Have’s, the Pretenders, and the Have-Not’s.

you see I like the CatFoodLady because she’s not a Pretender

#206 Snowboid on 02.08.14 at 11:18 pm

#154 Bailing in BC on 02.08.14 at 4:26 pm…

Sounds like most of the owners who rent out their units in our luxury complex.

Except they forgot to add in maintenance, repairs, special assessments – and the strata fees seem a tad low for a property they paid over $ 700K for.

And we rent a similar valued condo, but pay much less rent than they are getting.

Of course, if you are a gold-standard realtor trying to sell sand in Kelowna, math is but a minor annoyance in the big picture.

#207 Happy Renting on 02.08.14 at 11:50 pm

#175 rusty venture on 02.08.14 at 6:58 pm

I clicked on the link, saw the asking was only five figures, and first thought was: “this is probably for a parking space.”

I did actually read to see it’s in Windsor. But talk about having screwed up expectations after being conditioned by the Toronto RE market.

#208 joseph on 02.09.14 at 12:00 am

A family acquaintance purchased each of his two children a condo when they graduated university a few years ago. He paid each condo with cash – no remaining debt. He was smart and told the kids he would take care of the paperwork. The oldest child saw his marriage collapse shortly afterwards due to an affair. The cheating spouse demanded half the value of the paid-for condo. It was then they learned that the father who paid for the condo kept the property under his name, in the event that such a scenario unfolded. She got zilch.

#209 Ralph Cramdown on 02.09.14 at 12:10 am

I think the key to learning from our elders is to pick the right ones to learn from. The library is full of worthy books (though Sturgeon’s Law still applies). Whereas if you just listen to your average old fart, or the ones you know personally, well, George Carlin said “Think of how stupid the average person is, and realize half of them are stupider than that.’

Any time a youth-challenged person starts a lecture with “Interest rates were 11% when I bought my first house,” I know he’s confusing a decades-long bull market in bonds and real estate with brains.

#210 Rockstar on 02.09.14 at 12:23 am

Anecdotal story followed by rant against realtors/government/etc followed by still-wrong forecast of real estate future.

Rinse and repeat for 5 years.

Profit.

#211 Andrew Woburn on 02.09.14 at 12:34 am

#189 Linda Pearson on 02.08.14 at 8:55 pm
Let’s all hope that DonDWest and Kylie never get together and reproduce.
===============================

Not much risk of that. Products of a virgin birth are usually sterile, like mules. He’s cute though. Reminds me of when we didn’t trust anyone over thirty.

#212 Andrew Woburn on 02.09.14 at 12:44 am

#194 Infused with Opiates on 02.08.14 at 9:24 pm
===========================

Thanks. That’s definitely what gandarusa is for.

#213 recharts on 02.09.14 at 12:53 am

#139 Aggregator on 02.08.14 at 3:12 pm
Craigslist GTA Average Rental Price Index – Chart

Note: Data is based aggregate listing information, including basement and furnished rentals.

Jan 2014 vs Jan 2013 (YoY% Average Rental Offer)
1 Bed 3.4%
2 Beds 11.1%
3 Beds 14.7%

Q4 2013 vs Q4 2012 (YoY% Average Rental Offer) Chart

All Beds (including 4 beds) 11.83% ($1,886)
1 Bed 7.6% ($1,521)
2 Beds 15.8% ($2,107)
3 Beds 19.3% ($2,390)

It’s no coincidence that rental prices are on the same trajectory path as the Bank of Canada’s balance sheet. Chart As long as Poloz keeps printing (accommodating speculators who are cornering home buyers and renters) along with annual increases in foreign-born migration stock, rental prices will keep soaring.

Worry about inflation and stop believing the BoC and StatsCan’s inflation rate. They lie because they have to. Find new sources for inflation data because you’re going to need it to know how much risk to take in order to keep pace with the rising cost of living. And don’t be surprised when that chop of organic meat is priced at over $30/kg in a few months.

The MLS view of the same market shows that the rents went down

#214 Buy? Curious? on 02.09.14 at 3:39 am

Hey Jerk-Faces! Leave Kylie alone! Do you hear me? LEAVE KYLIE ALONE!

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

Rob Ford 2014! Because nobody likes to drink alone.

#215 many people on 02.09.14 at 4:25 am

Many people know that making money won’t make them happy. They don’t want to gamble on stock markets, they don;t want to chase the financial dragon. Success seems to only be defined by more and more money. To me working all the time is not success. We need to simplify.

We need more equality. Ban the bmw, rid society of wasteful status symbols and the vanities of the elite. Tax them all to fund education and 10 dollar a day daycare. It is possible to change the country and the laws. We don’t need to wait for a crash or emergency, start taxing the rich today!

Buy low sell high ads nothing to society. We need to stop rewarding the middlemen.

#216 Observer on 02.09.14 at 5:32 am

Looking at vancouver price drop recently. It looks like price declines are starting to set in. Like Garth said, there will be a long period of price declines. Which will be a psychological killer for people wanting to buy.

There will probably be a dead cat’s bounce but then with a large population going broke due to the lost in house prices. Not only will the young and dumb be kaboshed, but some with the wrinkly who would sponsor them. That adds to the selling pressure of two households instead of one.

The domino’s effects can easily spiral out of control

#217 Paul on 02.09.14 at 9:41 am

#215 many people on 02.09.14 at 4:25 am

Many people know that making money won’t make them happy. They don’t want to gamble on stock markets, they don;t want to chase the financial dragon. Success seems to only be defined by more and more money. To me working all the time is not success. We need to simplify.

We need more equality. Ban the bmw, rid society of wasteful status symbols and the vanities of the elite. Tax them all to fund education and 10 dollar a day daycare. It is possible to change the country and the laws. We don’t need to wait for a crash or emergency, start taxing the rich today!

Buy low sell high ads nothing to society. We need to stop rewarding the middlemen.
———————————————————-

I guess you would be first in line with you hand out? oh wait you are there already!

#218 economictsunami on 02.09.14 at 9:43 am

#104 Ralph Cramdown

“I just don’t see the point.”

With the Fed being the largest and one of the most actively internationally interventionist CBs (and the U$D being the WRC) we must keep well informed and strive to understand the actions/ implications of their monetary policy has on various markets.

What they do is infinitely more important then what they say. (How many meetings has the BOC done absolutely nothing? Perhaps this rule should not apply to them.)

Their mandate is PR for the masses. As with any institution, it is their policy regulations and how they are interpreted/ applied (and many market’s reaction to those policies) that matters.

What matters most right now is not just the Fed ‘s actions but also that of the BOJ (highly experimentally interventionist) the PBOC and the ECB; who early on in the crisis were working cooperatively and now appear to be moving at cross purposes to one another.

I would have thought any sophisticated/ suave international investor (such as yourself) would want a well rounded knowledge of the macro monetary policy coming out of a CB that controls the WRC.

Well, that and also debt, deleveraging, demographics…

Bank Of Canada’s Macklem: We Won’t Cut Rates To Counter Retail Competition…

https://businessincanada.com/2014/02/07/macklem-disinflation-retail-competition-inflation-rate-cut-bank-of-canada/

#219 maxx on 02.09.14 at 10:40 am

#29 Bob on 02.07.14 at 8:57 pm

“To the realtors on this site – yes, it happened my landlord tried to jack my rent up over 30%. I moved :) it was wonderful. My new rental is managed much better. Old unit is still vacant.”

Bravo Bob. Many more should realize that as consumers, we really can dictate our own terms far more often than we think. Especially now. Success on this front is an incomparable high and gets easier with practice.

Good job!

#220 Obvious Truth on 02.09.14 at 10:56 am

C’mon younger folk. Your problems of today make older people laugh. They know young people like to have a few bucks to go out and enjoy themselves. They are just humouring you.

Most of your ancestors came to this country with a bit of clothing and worked from meal to meal. They hated debt. They built this nation for their descendants. Most probably never saw the inside of a restaurant their entire working lives.

They organized went on strike and protested. Stood up for themselves. Created education and healthcare. Your biggest problem is that you can’t buy something. And 25 or 30 isn’t young enough to need a few bucks to go out.

You have the internet. The greatest tool for individuals ever invented.

What are you shaping or making.

Not buying or posting.

#221 Daisy Mae on 02.09.14 at 10:56 am

#173 Victor: “Another bidding war “winner”…”

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

…and let’s hope this relationship between the three remains intact.

#222 Ralph Cramdown on 02.09.14 at 10:57 am

#218 economictsunami — “With the Fed being the largest and one of the most actively internationally interventionist CBs (and the U$D being the WRC) we must keep well informed and strive to understand the actions/ implications of their monetary policy has on various markets.”

Of course. But the Fed doesn’t meet very often, and has been breathtakingly clear in setting expectations of where they’re going to set short rates for the foreseeable future.

Most people probably spend either too much time analyzing central banks’ moves, or not enough. Five or ten minutes a month is probably about right. The web has allowed us to read minutes of past meetings, analyze hawks versus doves and who’ll be voting this year and next, etcetera. Waste of time.

I don’t understand the “financial repression” complaints on two levels. First, it isn’t the 1950s. capital is globally mobile at the click of a mouse, so you can invest your money anywhere in the world that you feel you get the best terms. There’s this much money in the world, that many investment opportunities, and you’re competing with every other investor to do the best you can. If the Fed is repressing certain segments or markets, you don’t have to invest there, unless you’re managing a treasury bond fund, in which case all you have to do is try to beat the index. If you think the Fed is inflating, to a greater or lesser degree, all asset prices in all markets, well, I think there’s a lot of capital looking for a return in a world of depressed demand. Either way, this is the environment we’re in.

Second, I don’t see the point in complaining. It’s like complaining about how gravity distorts celestial mechanics. I see the Fed as a useful organization whose leaders, in the main, try to learn from the mistakes of their predecessors and do better. I understand that there’s a faction of very rich people who would rather have higher interest rates on safe domestic assets and perhaps even outright deflation at the expense of the unemployed and those who earn most of their income from labour and have mortgages to pay. I’m not that rich; I still need to build wealth by buying profitable things, rather than merely protect it with a safe yield above inflation.

#223 Daisy Mae on 02.09.14 at 11:03 am

#174 DonDWest: “I decided not to listen to these arrogant morons.

There’s nothing useful you can learn from seniors and they just piss you off the moment you attempt to listen to them. . . They’re nothing but a generation of old fools; there’s no wisdom to be found.”

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

Then why are you reading this blog?

#224 Eaglebay on 02.09.14 at 11:10 am

#174 DonDWest on 02.08.14 at 6:57 pm

You have the biggest “chip” on your shoulders that I have ever seen.
Defeatism and pessimism are eating you alive. What a sore looser.
Without the boomers there wouldn’t be any little Donnie.

#225 Willdaman on 02.09.14 at 11:11 am

Garth, you said you don’t buy rate reset prefs, does thisean you favour fixed perpetuals (or at least etfs that are skewed towards fixed perpetual prefs)?

Can you give us insight as to why? If interest are destined to go up (which they surely will at some point), then the perpetual share prices will surely go down to increase the yield…and will keep going down every time there is a rate hike. Doesn’t make sense to me to buy perpetuals in this environment.

Thanks

#226 DonDWest on 02.09.14 at 11:21 am

#204 Casual Observer

“I just think that some of their advice is tainted by poor math skills, and a refusal to think that the circumstances young people are facing today might be more challenging than the circumstances they faced.”

I used to think like this when I was younger. Then I realized that mathematics is a useful tool that humans invented to test the implication of such knowledge. What good is knowledge without the ability to apply it mathematically in the current era? I only have so much time on planet Earth and I already suffer from information overload. The last thing I need is wasting my time and energy listening to a pile of crazy old kooks dispensing advice that I can’t use.

Trust me, my life infinitely improved the day I STOPPED listening to my elders. I was pleasantly surprised with the results. This certainly goes against the grain of what we’re taught by society, but I can’t deny the facts.

In my early to mid 20’s I would always listen to my elders, often against my better judgement, only to end up in failure. The failure was so deliberate and punishing that at one time I believed they even set me up for failure.

Then I realized they were old fools; and I was a greater fool for listening to them. . .

#227 Happy Renting on 02.09.14 at 11:42 am

#208 joseph on 02.09.14 at 12:00 am

I’ll bet dad called that one before it happened, too. “My son married a total train wreck. I give it five years, tops.” Hope the divorce wasn’t too expensive and junior chooses wisely if he ever pairs up again.

#228 Eaglebay on 02.09.14 at 11:45 am

#215 many people on 02.09.14 at 4:25 am
“Buy low sell high ads nothing to society. We need to stop rewarding the middlemen.”

You mean steal from the producers and reward the entitled losers?
You immigrated to the wrong country.

#229 Westcdn on 02.09.14 at 11:49 am

I got a kick out of this story – Bill Gate’s 1st day on the job. http://www.newyorker.com/online/blogs/borowitzreport/2014/02/gates-spends-entire-first-day-back-in-office-trying-to-install-windows-81.html
He probably didn’t want his own software to spy on him.
Thank you to the comments on CWB preferred shares – it improved my knowledge. Honestly, I don’t care much for debt instruments but apparently that is where the smart money resides. I would be a fool to ignore what is happening there. As side note – my mother used to say “parents think they are raising pets rather than adults”. I hope my 2 daughters will forgive me for being cheap.

#230 800 RMK on 02.09.14 at 11:49 am

To number 79 above. I am 29 years old. CPP and EI are taxes, nothing more. My past contributions and my employers contributions to CPP and my future 36 years of contributions indicate I should be getting a pension at a minimum three times what the current CPP pays. This calculation has all been inflation adjusted. CPP is 100 percent a tax. A tax on my generation to pay for people who didn’t save a damn dime in there life.

#231 DonDWest on 02.09.14 at 11:52 am

#197 Happy Renting

“If there are any Millennial blog dogs, speak up now or Kylie will end up being your default representative!”

I already called her a troll, but apparently this was misinterpreted as a marriage proposal or a sexual advance.

“Work hard and save money.”

The day I stopped listen to this piece of advice from my elders; the better. Saving money? Stupid in a world of low interest rates. Working hard? The only thing working 50-70 hours a week for the company ever accomplished for me was getting a nice severance package. Working hard is for suckers. Politics and manipulation is the true name of the game.

#232 Renter's Revenge! on 02.09.14 at 12:10 pm

@DonDWest

“Working hard is for suckers. Politics and manipulation is the true name of the game.”

That’s weird, man. I had the exact same thought recently!

#233 Kylie meyer on 02.09.14 at 12:11 pm

When I said that I pay for my own phone, it was because most of my friends have theirs paid for by their parents. It is good to see that quite a few also agree that the older generation is out of touch with today’s way of living. My parents taught me that I should pay as little interest as possible in my life because interest is just throwing money away.

I’ll do the same for my kids so that they don’t have to struggle either. My mom has MS and we have been taught that life is too short to spend years struggling when you don’t have to.

If everyone did this there would be many more happy people.

#234 William Myers on 02.09.14 at 12:12 pm

>>I told them I recently died in a tragic dog-walking incident

Why do you get people’s hopes up with claims like this?

#235 4 AM Sunrise on 02.09.14 at 12:20 pm

#208 joseph on 02.09.14 at 12:00 am

This story is hilarious and sitcom-worthy. Thanks for making my day. I credit that one to the “wisdom of elders”.

#236 4 AM Sunrise on 02.09.14 at 12:24 pm

#208 joseph on 02.09.14 at 12:00 am

On the flip side, I’ve heard of stories where people put their kid’s name on the title of their own house/accounts in a misguided attempt to avoid capital gains/estate taxes. Then Junior’s marriage blows up and the ex demands a piece of that pie. Or Junior run into debt and the collectors demanded their share.

#237 Infused with Opiates on 02.09.14 at 12:42 pm

230 RMK – I’ve calc’d that CPP should yield about 2/3 salary for 25 years after 35 years of contributions assuming 5% return but not adjusted for inflation. Its
easy to do on any financial calculator or website by
using the investment tool to arrive at a total value at retirement then a mortgage calculator to draw it down over 25 years. Can you provide a link to the calculation with inflation?

#238 Obvious Truth on 02.09.14 at 12:46 pm

#222

Agreed. I would add that fed meetings and minutes are largely a synopsis of what is happening in various districts. There are other reports which can also be easily obtained which can give you insight into fed direction if you know their mandate and how they will react.

It’s up to investors to then profit in the current environment. And there are probably many ways that can be done. But you can’t have an all or nothing mentality and think you will know how it will end.

There won’t be an end. Just a different set of investing parameters.

#239 live within your means on 02.09.14 at 1:05 pm

#234 William Myers on 02.09.14 at 12:12 pm

>>I told them I recently died in a tragic dog-walking incident

Why do you get people’s hopes up with claims like this?
……………..

What a despicable comment.

#240 pinstripe on 02.09.14 at 1:12 pm

I agree with DonDWest posts.

I am a member from the Silent Generation. I made my money by doing what had to be done at the time. Today I am living a very comfortable lifestyle and I don’t give a HOOT about any of the younger generations. The advice I give them is to work harder and pay the taxes, and a bit more for any possible under contribution, because I will be demanding each and every benefit promised made by all levels of government.

Today, I am being punished for saving and now is the time for pay back.

Life is too short to be FAIR.

#241 Kaganovich on 02.09.14 at 1:14 pm

Don D West, Not 1st, Economic Tsunami

Your so-called ‘whining’ about unprecedented central bank intervention is simply running into those in the TINA camp. They (Ralph Cramdown, Devore, Eaglebay etc.) set out to naturalize the situation we are in, and thereyby dissuade those who think it is amenable to change by political means (albeit, formal political channels look futile right now). They are simply part of a dwindling few who benefit from this system we are all in.

Here are some resources for you to read if you haven’t read them yet:
http://newleftreview.org/II/71/wolfgang-streeck-the-crises-of-democratic-capitalism

http://vimeo.com/29620959

http://newleftreview.org/II/73/wolfgang-streeck-markets-and-peoples

#242 Doug in London on 02.09.14 at 1:20 pm

@many people, post #215:
You have some valid ideas, but the world you envision aint going to happen over here in western society. Will money make people happy? If you are poverty stricken money can make you very happy. If you have enough money to retire, or at least have enough for a buffer against unexpected difficulties like job loss money CAN bring happiness. It’s not until a person gets quite wealthy does money not bring happiness anymore. For example, if Warren Buffet won the lottery and made another $1 million would he be happier? Not likely. As for status symbols they are wasteful, no argument there. I figure the rich people who want them can blow their money on that kind of thing, while I prefer to do without such useless stuff and save my money (and invest it) instead. I’m lower income but by saving and investing, and accumulating wealth I am doing my part to help level out those obscene wealth disparities we see in society.

#243 Old Man on 02.09.14 at 1:22 pm

I am amused by those figuring out their CPP to ascertain their pot of gold, as you might get the shock of your life. Now pay attention for those who are divorced as the decree is never final guys, so you may not be off the hook. Its all about this new law in 1982, whereby a woman divorced for years can file a form against her ex husbands CPP with a lien for 50%. I got a call from this gal in Stats Canada who not only did such but held the approval form, and at that time the ex husband would not be informed. She said he will get a big surprise one day, as half will be issued to me, and was laughing her head off.

#244 };-) aka Devil's Advocate on 02.09.14 at 1:23 pm

#155 frank le skank on 02.08.14 at 4:29 pm

Rents have been oppressed for more than a decade. During that time values have doubled. They (rents) are bound to catch up. While the Residential Tenancy Act (BC) prohibits such increases during a tenancy there is nothing stopping a landlord from raising them to as high as the market will bear between tenancies and so it shall be.

#245 Casual Observer on 02.09.14 at 1:28 pm

#226 DonDWest on 02.09.14 at 11:21 am
The last thing I need is wasting my time and energy listening to a pile of crazy old kooks dispensing advice that I can’t use.

What I’m saying is that we should listen to what older generations have to say, because they do have a lifetime of experience and often some wisdom that we can benefit from.

I’m also saying that we need to be able to think for ourselves in order to discern whether the advice we are getting from them (or anybody else) is useful advice or outdated.

If I’m understanding you correctly, you are saying that we should not listen to them at all, regardless of what they have to say, because your time is limited and they are all fools in your opinion anyway.

This may be your personal experience, but painting an entire generation with such broad strokes is an overreaction in my opinion.

While some people (regardless of generation) may be foolish, the person who believes that all people of that group are fools, is being a bit naïve. Even people who offer terrible advice on one topic, can possess a wealth of useful knowledge about other things.

Writing off people because they hold an opinion different from mine is a good way for me to only hear what I want to hear.

I make better decisions when I hear many sides to an argument. Most people would tell you the same thing.

When we (or our leaders) try to shut out people who disagree with us, history has shown that our (and their) decisions suffer for it.

#246 };-) aka Devil's Advocate on 02.09.14 at 1:32 pm

#155 frank le skank on 02.08.14 at 4:29 pm
#155 frank le skank on 02.08.14 at 4:29 pm

Oh and “SHIFT” happens, always has, always will. There’s another every 7 +/- years. Currently we (Kelowna) are in a “balanced market” (6 months inventory). You know what a “balanced market” is don’t you Frank? It’s that all too brief a period of time between a buyers’ and a sellers’ market and back again. Guess which direction we are headed this time…

But really I’m just passin’ through Frank, leaving a few nuggets behind as I do. };-)

#247 World Traveller on 02.09.14 at 1:33 pm

#73 bentoverpayingtaxes on 02.08.14 at 12:24 am
A highlight of Vancouver culture

http://news.nationalpost.com/2014/02/07/that-is-f-ed-up-vancouver-police-hunting-man-who-paid-strangers-to-be-kicked-in-the-groin-in-disturbing-video/

says it all about ‘the crappiest place on Earth’. The drunken horror show takes place every night in Vancouver’s ‘entertainment district’.

*****

To be fair this kind of Nonsense is happening all over, NYC has a neat little game called “knockout” where innocent bystanders are punched just for kicks, nice game eh?
So as much as I don’t think Van is all that, the crappiest place on earth is LOT to be honest.

#248 economictsunami on 02.09.14 at 1:45 pm

“Second, I don’t see the point in complaining. It’s like complaining about how gravity distorts celestial mechanics.”

Really? The Laws of Gravity? Although I appreciate the celestial mechanics/ astronomy part.

(Perhaps alchemy to be more precise.)

I find little to be incorrect about expressing one’s dissatisfaction with the Fed’s stated (many times incongruent) goals and having to remain indifferent to the very real consequences.

I don’t put too much faith into “the Fed neither inflates nor see bubbles.” Distortions from misplaced incentives.

Their tools may work well with regards to garden variety recessions but their present effects on the economy and it’s lack of demand this time around, should tell anyone that this is (as Richard Koo understands) a very different beast…

#249 DON on 02.09.14 at 2:20 pm

I’m not saying parents should give everything to us kids. I pay for my own phone. When I have kids I will do the same as my parents did. I’ll help them through school and help them with their house. That’s part of parents responsibility to their kids. They even tell us that! I’m not making things up. I’ve done as they asked like get good grades and go to university.

Doesn’t it seem strange to you if you had your kids suffer and struggle with no money and then you died with lots of it. Wouldn’t you parents feel better seeing your kids have a better life while you are alive to see it?

My best friend’s dad always says that he wants to die owing as much as possible. He bought cars for his kids and helped them buy a condo. He is happy knowing that his kids are not struggling. It’s win-win.

I don’t understand why everyone here gets upset with this. The 2000′s are not the same as the 1900′s. There is more money around. My parents even say that when they were my age they didn’t have new cars and their own phones. Now everyone does – all my friends have new cars. Are people jealous of our generation?

I sometimes think the older generation has lost touch with how things have evolved so fast in the past decade.

OMG — Garth
****************************

OMG is right! God help us all.

No Kylie things are not different – human nature transcends all time periods. Things are been in boom mode for half your life, now it is time to experience the opposite. University teaches you theory…and real life teaches you well real life.

Your parents million dollar house is not yet sold and is about to take a tumble. You need to recognize that you don’t know everything and have not been on this planet long enough to do so. Hopefully looking back on your life when you are truly older you will see that you knew very little.

I am glad my kids will not be raised like you were. I want them to have the potential to be self made. I am glad you are paying for your phone though, try using the internet for research as social media is a waste of time unless you use it in some form for gain.

Blog dogs….I hope K is just pulling our collective leg… if not God help us all. Kylie just hasn’t come face to face with reality yet, but we all do sooner or later.

#250 DonDWest on 02.09.14 at 2:28 pm

#245 Casual Observer

Maybe I haven’t explained where I’m coming from the best, but (#240 pinstripe) explained it a little better. Whenever I ask for advice from the older generations, 99% of the time, I’m fed faulty math and illiteracy.

Whether this faulty math is due to incompetence, stupidity, cruelty, or because they simply don’t care (most likely a combination of all the above) – it doesn’t matter. Your time is your most valuable resource. You can’t afford to waste your time on people who will never care about you. Get it? The older generations don’t give a s*** about us – they view us with contempt. I suggest all of my generation return the favour.

You can make it your life’s mission to seek out the few in the older generations who do care and may dispense valuable advice. You can search for that needle in a haystack. If you’re lucky, by the time you’re an elder yourself you may even write an award winning “self help” book.

I, on the other hand, have come to the conclusion there are better opportunities with your time. I make it a point NOT to help the old lady cross the street.

Would you help a disabled 28-year-old? Or is it all about you? — Garth

#251 not 1st on 02.09.14 at 2:50 pm

Kylie, if you are really a GenYer, then the best advice was given a few posts ago. Don’t listen to boomer and wrinklie fools.

Here is why. The wrinklies were needed to help build this country, and they did that no doubt, but the govt absolutely bent over backwards for this crowd and still do. The large boomer generation was a result of stupid politics and economic decisions that led to a bunch of useless wars, then that group was recruited to expand the manufacturing sector and settle cities. These groups are large demographically and they vote and whine and they get heard especially when its time for excesses in the economy to be purged which is now never allowed. So the govt built inflationary response to give them the illusion the economy is strong.

Your generation is an afterthought to them and the politicians from those eras and until some of you and GenX get into those positions, nothing will change.

Don’t listen to them, but don’t get in over your head either. Your parents may have a million dollar house, but dollars to donuts they are probably riding a substantial mortgage into their retirement.

#252 espressobob on 02.09.14 at 3:08 pm

A word to the youngsters from a boomer! Get over yourselves! Education is the key to your future just like it was back in our time! Cry me a river!

#253 DonDWest on 02.09.14 at 3:22 pm

“#233 Kylie meyer on 02.09.14 at 12:11 pm

When I said that I pay for my own phone, it was because most of my friends have theirs paid for by their parents.”

When I was 13, I asked my father for a pedal bike so I could bike to school. He told me to get a job. I then explained to my clueless father that it’s not 1960 anymore and it’s illegal for 13 year olds to work. My father considered this “an excuse” and told me to shut up. He didn’t even bother to verify whether I was telling the truth or not in regards to employment legalities.

I then attempted to get a job at age 15, which was still legal in the 1990’s provided I had parental consent. Eventually I was offered a job, but when I brought the paperwork to my dad in order to get parental consent, he simply crossed his arms and started lecturing about “personal responsibility” and other nonsense. He kept on babbling how I shouldn’t need his help to get a job. Of course, I tried to explain to him that I need his signature for legality purposes, and he expectedly refused to listen.

At 16 I was finally able to get a job legally by my own accord. I did a lot of work, and as such, my school grades suffered a little. My charming dad then thought it would be a clever idea that I pay for household expenses as “punishment” for getting B’s instead of A’s in school. His reaction was something along the lines, “well, seeing that the job is now more important to you than school – you can get the privilege of paying the bills.” At the time, both my father and mother were extremely wealthy. They owned a total of three houses. It’s not like we were a poor family growing up who needed teenagers to work to pay the bills.

My father would always rant how “kids have it easy these days.” He would always accuse me of being entitled. As a little experiment, I decided to pay a little visit to grandma to see if what father was saying had any truth. My grandmother explained that jobs came to kids easily back then – there was less government and less legal ramifications. Not only did my father get offered jobs, for the longest time he actually refused many job offers because he thought he was “too good for them.” Imagine a 15 year old refusing jobs on the spot because they believe they’re “too good for them”? Well, that was my father, and that was the economy at the time he grew up.

When my father did eventually get a job, did he help out with household expenses? No. He spent all of his money on a 1967 Ford Mustang. At first I didn’t believe this until my grandmother showed me a photograph. My daddy, once he turned 18, then went to university for FREE in that 1967 Mustang.

So Kylie, your father isn’t evil to make you pay for your cell phone.

That being said, nobody in the world is possibly more selfish and entitled than my baby boomer/silent generation cusp father. I remember when I was 17 and caught him shifting through resumes for a certain job position. He then violently threw his desk over and yelled at me, “son, can you believe it? 72 applicants and they’re all crap?!” He then started babbling on how people shouldn’t be demanding anything from him and how it should be a privilege to work for him – for free.

#254 Daisy Mae on 02.09.14 at 3:25 pm

#204 Casual Observer: “I just think that some of their advice is tainted by poor math skills, and a refusal to think that the circumstances young people are facing today might be more challenging than the circumstances they faced.”

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

Any senior who remembers the ‘Dirty Thirties’ would not agree. Every generation has had its challenges. Why all the complaining? Is blaming past generations easier than actually doing something about present situations?

#255 old man doesn't like DonDWest on 02.09.14 at 3:27 pm

DONDWEST 250 – time to see a psychologist buddy.

#256 DonDWest on 02.09.14 at 3:30 pm

“Would you help a disabled 28-year-old? Or is it all about you? — Garth”

As a formally disabled young person, I certainly would.

I often advocate for young people with disabilities because I feel they’re the most overlooked group. They’re not given enough money to live on through no fault of their own, and I feel they should get priority in our welfare system over some 65 year old able bodied baby boomer who didn’t save up for retirement after a lifetime of working.

Interesting. You’d help a young disabled but not a person disabled by age. That makes you an ageist, every bit as noble as a racist. — Garth

#257 Harry Wilson on 02.09.14 at 3:35 pm

DISCLAIMER: Yes, I know it’s annoying when people post links to irrelevant video clips.

—————————————————-

Why Bill Cosby Once Mattered

For all the folks who like to engage in the typical, and tired, inter-generational, inter-gender, or inter-racial whining and moaning, here’s a mirror:
https://archive.org/details/BillCosbyOnPrejudice

For anyone else, it’s an interesting spoken word piece from a master, and a nice way to spend twenty-three minutes on a Sunday afternoon.

Peace, y’all.

#258 DonDWest on 02.09.14 at 3:39 pm

#254 Daisy Mae

“Is blaming past generations easier than actually doing something about present situations?”

I’m a bit confused here, where did he blame previous generations? Simply stating previous generations lack mathematical aptitude isn’t blaming anyone for anything.

As for doing something to fix the present situation. I couldn’t agree more, so when, prey tell, will you baby boomers kindly step aside and allow us to take the mantle of leadership positions in order to do so? If you want us to take charge of the situation – please move over a let us take charge.

#259 Dan in Victoria on 02.09.14 at 3:53 pm

Don’t comment much anymore, just too damn busy, lots of opportunitys out there right now. But I read most days……
Get well Garth.
Kylie @ 233
My parents taught me to pay as little interest as possible because that is just throwing money away.
Really?
You have a tremendous amount to learn, interest is a tool, it can be made to work for you in many wonderful ways.
Think of a tradesman who has a van full of the latest and greatest electric tools but only uses hand tools because electricity costs money.

Good to see you around Kagnovich.

#260 espressobob on 02.09.14 at 3:54 pm

This entitlement thing is getting stupid! Hard work and continuing education will save many! Thats how it works, deal with it ! When your on the other side of the equation things happen.

#261 Herb on 02.09.14 at 4:26 pm

#253 DonDWest,

kind of explains your grudge against older people.

I thought some posts ago that you had adopted Smoking Man’s ‘Golden Rule for Blog Comments’ – “It doesn’t matter what they say about me as long as they don’t ignore me!” – but now I see that you come by your attitude naturally.

Smoky was shaped by his negative experience in school, and you were shaped by your negative experience with your father. But don’t follow Smoky into the error of generalizing on the basis of your individual experience. It does not follow that all older people are incompetent turds because your father happened to be one.

#262 pinstripe on 02.09.14 at 4:36 pm

It makes a lot of sense to take the young and stupid to the cleaners as soon as possible and as hard as possible. Teaching them a darn good lesson about real life does cost money too. I do not plan to use any of my hard earned money to educate them whatsoever. OTOH, I am willing to exercise my financial wisdom to remove any amount of money they can get their hands on because of their access to easy money sources, it is fair game. When they seek wisdom, I will give them wisdom for a price. Nothing is FREE. In my senior years, I need a Life too.

We are in an era now that everyone knows everything about everything because they picked it up on twitter, or better yet, they have an app that gives them the plan for success.

Anyone interested in learning how the ethics and values are enhanced only need to watch the politicians, at all levels, in action. Each doing whatever it takes to make themselves electable. The drama provided by the Red Chamber, the pillars of out society, is outstanding too.

Anyone expecting someone else to make them rich need to pull their head out of the sand.

#263 Old Man on 02.09.14 at 4:42 pm

Look at all the whiners complaining about the baby boomers and how easy it was for us; utter nonsense to a point. I had my first job at age 11 working every Saturday at a national chainstore receiving shipments in the basement; ticketing merchandise; taking it to departments; and sweeping the floors for 25 cents an hour. During the crop seasons worked from 7:00 AM
to 5 PM picking beans for $5.00 a day. I wanted to buy a CCM bike, and my dad said had to pay for half, and it cost $52.00, but bought it in time. Our parents taught us a work ethic, and some of you believe in a free lunch, so dream on; there is no free lunch except at the Salvation Army.

#264 experienced.optimist on 02.09.14 at 4:45 pm

Just to clarify some things from my previous post 79. Yes the CPP and OAS low increases are irksome. Enough said on that . I want to point out that this middle 60’s boomer has hopefully done alright getting our kid’s out and on their own ,albeit with some bumps along the way. But some of us are also helping out our parents, the ones in their 90’s who did go through the depression of the 1930’s and WW2 and actually raised us so called boomers. I think we owe both sides to a point. Not too much and not too little. Choices.

#265 Realtor # 1 on 02.09.14 at 4:52 pm

I have a couple that are both teacher (ontario) they make after taxes 4200 each (8400$) a month.

They are willing to have a 700K mortgage which is 3150$
a month – less than half their take home pay. Do the math and they have over 5k left over.

Until Lenders say– NO — buyers are willing to put more of their take home pay towards a house.

#266 LS in Arbutus on 02.09.14 at 4:53 pm

Financially speaking, the Silent Generation is the Lucky Generation

http://www.stltoday.com/business/columns/david-nicklaus/financially-speaking-the-silent-generation-is-the-lucky-generation/article_10a81c5a-bbe3-59af-8618-6dca77b758a3.html

This article was interesting. The Silent Generation is the generation born between 1925 and 1942.

#267 Detalumis on 02.09.14 at 5:03 pm

#142 waiting until 50 or 60 to inherit, that’s a good one. My 84 neighbour told me he had to fly to South Carolina for a funeral, I said oh is it your friend, he said no it’s my mother, she was 103. So Kylie could be in LTC herself before she inherits.

#268 John Mc on 02.09.14 at 5:03 pm

DonDWest

You ever consider therapy?

#269 juno on 02.09.14 at 5:04 pm

#79 experienced.optimist on 02.08.14 at 1:41 am

Yes they agreed (the politicians) to make the seniors happy to get the VOTES. But soon the Seniors Vote will become the Minority

And the Majority will not want to support the wrinkles. So enjoy while you can until 2017- 2020. When the wrinklies start to die off and the new generation will have its revenge.

#270 Tamsen on 02.09.14 at 5:23 pm

Re: Bo Xilai on 02.08.14 at 2:15 am Hey Garth, I thought you said Mainland Chinese money wasn’t pumping up Vancouver’s real estate bubble…

The South China Morning Post would seem to disagree…

Exclusive: Vancouver facing an influx of 45,000 more rich Chinese

http://www.scmp.com/news/world/article/1423370/exclusive-vancouver-facing-influx-45000-more-rich-chinese

So right! Validates our observations of what’s been happening over the last couple decades in Greater Vancouver and what we’ve been saying repeatedly.
It’s very obvious that HAM is taking over!

#271 triplenet on 02.09.14 at 5:25 pm

244 – DA

Rents have been oppressed?
You mean like the peasants in Monty Python?

#272 bguy1 on 02.09.14 at 5:42 pm

@#254 Daisy Mae

Nobody knows

#273 Casual Observer on 02.09.14 at 5:42 pm

#254 Daisy Mae on 02.09.14 at 3:25 pm
Any senior who remembers the ‘Dirty Thirties’ would not agree. Every generation has had its challenges. Why all the complaining? Is blaming past generations easier than actually doing something about present situations?

If you read my post #156 from earlier, I think you’ll find I agree with what you are saying.

#274 zamman on 02.09.14 at 6:06 pm

#66 CalgaryHappyRenter on 02.07.14 at 11:32 pm
thanks for the advise to get the kids started in a TFSA.
I will do that. zamman

#275 };-) aka Devil's Advocate on 02.09.14 at 6:10 pm

#263 triplenet on 02.09.14 at 5:25 pm

Yup “oppressed” is exactly what I mean to say. Conveys more the mood of the situation. Despite your Grammar Nazi demeanour I think you get it.

Other market conditions have held well deserved rent increases in abeyance for a time while we struggled with the general economic climate subsequent to 2008. Rents are now catching up and in consequence more renters are turning to home ownership as a viable option which is, in turn by virtue of the increased demand amid a stagnant supply, causing real estate prices to rise.

SHIFT happens, always has, always will.

Don’t worry though as it goes both ways in 7 to 10 year cycles.

#276 Kaganovich on 02.09.14 at 6:14 pm

259 Dan in Victoria

Glad to hear from you. If I knew you were going to start posting more comment I would pay more attention to the thread.

#277 Detalumis on 02.09.14 at 6:20 pm

#243 Old Man, yes you must be very old because it’s just as easy for a man to file for half his ex-wife’s CPP now. I don’t know a single housewife under the age of 65 so can’t think of anyone who would benefit, everybody I know would get the miniscule CPP on their own.

I also think people who say it’s stupid to listen to seniors are the real imbeciles. I sat on the Go-train commuting for many years and the best thing I did was sit near old men, the ones with the good suits and shoes, you know vee-pees, some even read that salmon pink newspaper what was it, the Financial Times i think. I learned how to read upside down and I would eavesdrop a lot.

That’s how I learned to avoid mutual funds and invest in bank stocks – lots of them.

#278 Denise#1 on 02.09.14 at 6:29 pm

Kylie Meyer, Not 1st, DonDWest:

I feel so sorry for you, I feel so sorry for your parents. You’re all so incredibly screwed up – it’s sad, sad, sad.
The selfishness, greed, bitteress & self-entitlement just must emanate from you in waves.
OMG…

#279 Nosty in Apprenticeship Days on 02.09.14 at 6:34 pm

#263 Old Man on 02.09.14 at 4:42 pm — “Look at all the whiners complaining about the baby boomers and how easy it was for us; utter nonsense to a point. I had my first job at age 11 working every Saturday . . .”

Roughly ditto, as I got my first job at 11, working Friday nights from 6-8 then all day Saturday. I was paid two pounds for hours worked in a garage, cleaning and polishing cars.

Mom would lend me one pound to go to the movies and have some fun, on the proviso that I pay her back the following week plus bank the other pound. Too young for sex, drugs and rock ‘n’ roll!

It worked well for both of us. Started an apprenticeship at 15 — great trade (printing) and plenty of money (investments) coming in.

Didn’t need a Ph.D or a university degree for that.

#280 HD on 02.09.14 at 6:37 pm

@ Don West

“I then attempted to get a job at age 15, which was still legal in the 1990′s provided I had parental consent. Eventually I was offered a job, but when I brought the paperwork to my dad in order to get parental consent, he simply crossed his arms and started lecturing about “personal responsibility” and other nonsense. He kept on babbling how I shouldn’t need his help to get a job. Of course, I tried to explain to him that I need his signature for legality purposes, and he expectedly refused to listen.”

——————————————–

LMAO

Your father totally reminds me of my old man.

Sigh…but that’s a story for another day ;)

Best,

HD

#281 Obvious Truth on 02.09.14 at 6:57 pm

Kylie, my best to you and your family. Please don’t let your current situation guide your whole life perspective because it may change over time.

#282 Exurban on 02.09.14 at 6:57 pm

#270 Tamsen … yes, great stuff in the South China Morning Post. Don’t expect to see any of it in our servile media. Here’s another highly informative piece from them:

Exclusive: How mainland Chinese millionaires overwhelmed Canada’s visa scheme

It’s pathetic that a foreign newspaper has to do the job that Canadians need done. It reminds me of how a small-town Massachusetts newspaper exposed Alan Eagleson as a crook while our slimy scribes were still praising him as a hero.

#283 Victor V on 02.09.14 at 7:11 pm

#265 Realtor # 1

I have a couple that are both teacher (ontario) they make after taxes 4200 each (8400$) a month.

They are willing to have a 700K mortgage which is 3150$ a month – less than half their take home pay. Do the math and they have over 5k left over.

=========

They will not have over $5K left over after they pay the “other” costs of home ownership: utilities, maintenance fees, insurance and property taxes.

#284 Aggregator on 02.09.14 at 7:19 pm

#244 };-) aka Devil's Advocate

Rents have been oppressed for more than a decade. During that time values have doubled. They (rents) are bound to catch up.

Not without wages rising. One might be able to borrow to buy a home, but they can't borrow to pay their rent. Home price to income and rent to home price are negatively correlated, meaning, only one will move higher at a time, not both. Chart

The more rent consumes income, then less spending and more job losses there will be. That's a negative for home prices. One would assume a landloard's rental income would have a multiplier effect, that is, someone's rent is another persons spending money. Not quite. Because with cap rates nearly flat and just about every speculator out there betting on higher home prices, most of that money is going towards debt service on levered mortgages. Not to mention most of the ecnomic benifits (e.g. construction jobs) have already been received.

I don't know what's with you Realtors who still can't parse the difference between income spending and borrowing: one is existant cash/savings, the other is debt or borrowed future wages.

#285 };-) aka Devil's Advocate on 02.09.14 at 8:03 pm

#244 };-) aka Devil’s Advocate

You put forward a plausible argument but for one thing… that which you are arguing against, what I said, is happening. Of course, in due time, it will overshoot and eventually retract only to repeat the cycle once again some 7 to 10 years from now.

Shift happens };-)

Well I think I’ve been here long enough time to move on.

#286 Daisy Mae on 02.09.14 at 8:35 pm

#258 DonDWest: “If you want us to take charge of the situation – please move over a let us take charge.”

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

We will, when we’re damn well ready. Just like all previous generations.

#287 Daisy Mae on 02.09.14 at 8:45 pm

#258 DonDWest: Further to last…make your own way thru life. No one on this earth owes you a single thing. No one needs to sacrifice anything to make your life easier.

#288 Daisy Mae on 02.09.14 at 8:51 pm

#269 Juno: “When the wrinklies start to die off and the new generation will have its revenge.”

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

Aren’t you delightful?

#289 DonDWest on 02.09.14 at 9:54 pm

#287 Daisy Mae

The only people being asked to make sacrifices in these tough economic times are young people. Tell me, what sacrifices have the boomers made? None at all. You wouldn’t know the meaning of the word if it hit you on the head! You’re without a doubt a selfish excuse for a generation!

#290 Snowboid on 02.09.14 at 11:18 pm

#284 Aggregator on 02.09.14 at 7:19 pm…

Superb post!

#291 espressobob on 02.09.14 at 11:54 pm

#289 DonDWest

Your financial situation is your own doing! How is it that us boomers are somehow responsible for that? DUH!!!!

Get a brain dude!

#292 Jon on 02.10.14 at 1:47 am

Dondwest how are the younger generation making sacrifices? They eat out for meals buy fancy cars an d waste money on clothes, of course this is a ridiculous generalization like the ones you are making. Saying the elderly are mathematica laymen’s is the most absurd comment i have ever seen on this forum ever.

#293 yorel on 02.10.14 at 10:38 am

Ontario Justice Harvey Brownstone said there is no registration in his home province. In fact, as he points out, in Ontario, “common law” is more of a vernacular term.

“There is no such thing as ‘common law’ in Ontario law — that term doesn’t exist,” he said.

#294 Angry But Not Unhappy Twenty Something on 02.11.14 at 4:35 pm

RE: Boomers vs. Millenials – I am not naive to believe that there aren’t lazy, lucky and entitled people in both these age groups.