Plan B

PLAN B modified

While I have nothing against owning real estate (I do), what this obsession has done to personal finances is epic. That little tale on the weekend from Carl was a good example. Two people whose existence is now centred around trying to finance a semi, without savings or investments, but with a motherlode of debt.

Happy lives don’t come from owning a house. They come from financial security. In big cities, the two are often mutually exclusive. As real estate prices seep higher, they suck off more income leaving owners with no Plan B. And trust me, you’ll need one.

That brings us to Monday night.

When the banks close and the advisors go home, RRSP season is over. The moment will have passed for people to take $20,000 out of the orange guy’s shorts, put it into a taxless self-directed plan in great ETFs, get a tax refund of $6,000 and then shove that into a TFSA also invested in growth assets. Why would folks not want to turn twenty grand into $26,000, and gain tax-free growth instead of having taxable savings paying almost nothing?

Simple. Most people don’t have $20,000. But they have a house.

A Scotiabank survey days ago concluded that 70% of people won’t make any RRSP contribution this year. The reason was overwhelming – 74% said they lack the funds to invest.

It gets worse. Of those people who already have RRSPs, a staggering 40% confess they have sucked money out over the past year – an all-time high. (The previous record was the year before, when 36% withdrew savings.) The top two reasons people are snorfling their investments? (a) To buy a house, and (b) to pay down debt.

Now, of those who will actually contribute to a retirement fund, RBC tells us the grand total will be $4,600. Only 23% of people investing will contribute the maximum allowable (18% of earned income, with a cap of about $24,000). Sadly 75% of RRSP contributors on the cusp of retirement (over 55) will not shelter the max.

Only half of people have an RRSP, and the average amount in there is under $50,000. This is consistent with TFSA numbers, since just a fraction of us actually hold investments in them. Meanwhile almost 70% of people have no corporate pension, and the CPP is birdseed. It’s just like Carl told us after he bought his $640,000 semi on a dodgy street – he was left with $20,000 in liquid investments, $15,000 in debt and a half-million-dollar mortgage. I fear this describes millions of people across this hormonal land.

Yeah, yeah, I know RRSPs are out of favour and as sexy as a cold sore. In the long-run, TFSAs are a far superior vehicle for actually financing a retirement, even given the low threshold for contributions (so long, of course, as they are not used for saving). But an RRSP can be a damn useful thing for tax-shifting. As a consequence, everybody should have one.

As I’ve mentioned before, smart people cut income tax by dumping funds into an RRSP while they’re working so they can retrieve the money with little or no tax when they take time off, trek to Tibet to find themselves, get punted for a washroom dalliance, or go through a maternity leave. Other smart people income-split by putting everything possible into a spousal plan, which your stay-at-home partner can extract later. The higher-income-earner gets to slice the annual tax payable, deducting the contribution, while the partner gets the cash after a three-year hold period. Or, as mentioned above, you can take assets you have now, move them into an RRSP and get a refund for selling yourself stuff you already own – which can then fund the TFSA.

At least one or two of these strategies would work for most people. So, RRSPs are not essentially for retirement, but rather a tool to move taxation around in your life. Why would you not want to do this?

Sadly, RRSPs are seen by most young people now as some kind of special gimmick to help finance real estate through the Home Buyers’ Plan, which is absurd. Similarly, TFSAs are viewed by most as nouveau savings accounts to be used for buying engineered hardwood flooring.  The net effect of all this is a nation with an off-the-chart home ownership rate, and a crisis in personal liquidity.

It all gets a little worse Monday night. You’ll see.

199 comments ↓

#1 TurnerNation on 03.02.14 at 6:25 pm

Reminds me, as the other Garth sings: “‘Cause I’ve got friends in low places where the whiskey drowns..,”

#2 Jimmy on 03.02.14 at 6:27 pm

First to say Smoking Man’s recommendation to watch True Religion on HBO was excellent!

#3 Drill Baby Drill on 03.02.14 at 6:28 pm

Dear pathetic blog, what is expected to happen Monday night ? I have been out of the loop lately.

#4 T.O. Bubble Boy on 03.02.14 at 6:36 pm

Garth – the Post City Magazine “Real Estate Roundtable” came out this weekend, and you were noticeably absent… did the realtors get sick of having you bring reality to their marketing fluff conversation?

Mike Eppel (business reporter from 680 News) was the only realist in the bunch… Brad J Lamb and others just debated whether the Toronto market was HOT or SUPER HOT.

I purposefully bowed out. Sure you know why. — Garth

#5 T.O. Bubble Boy on 03.02.14 at 6:40 pm

It all gets a little worse Monday night. You’ll see.

Wow – that’s a strong statement… I’m intrigued!

Any blog dogs have guesses as to what Garth is threatening us with here?

#6 World According To Garth on 03.02.14 at 6:48 pm

Yeah? And what job would that be? Shooting unarmed people and kids on trains and invading foreign countries then calling the patriots defending their homeland terrorists? I’ve met some of these so called “Cdn Heroes”. They joined up for the sole purpose of ” killing themselves some carpet riders”. They’ve told me that. But you don’t hear that part on the slime controlled media.

World Fail

—————————

#265 KommyKim on 03.02.14 at 2:34 pm
RE: #254 World According To Garth on 03.02.14 at 1:39 pm
Your right…..they should disarm the vpd and RCMP right now with all the people they have been executing with guns and tasers lately.
FAIL

The police and the military have a JOB to do.
Gun hobbyists do not.

TRIPLE FAIL

#7 rosie "moving forward" in the knowledge that, "this won't end well" on 03.02.14 at 6:51 pm

Gotta love the Red Star.

http://www.thestar.com/opinion/commentary/2014/03/02/closer_reading_of_statscan_report_troubling_for_middle_class.html

#8 airhead princess on 03.02.14 at 6:53 pm

The RRSP gets to compoumd tax free until you hit 71 ( when apparently the risk analysts at the CRA say you’re too stupid to know better and closer to death than ever) and you have to begin to wothdraw. I don’t know about you all….but more people die before 71 than live…and the acturial scientists know this. Beginning an RRSP account early and maximizing the deposits every year will allow you to retire years early and enjoy what you have left.

Lets face it…after 71 you can’t chew a steak anymore…let alone digest it. The chances are that you won’t feel like backpacking across Europe either. Retirement is for the young……after that you’re just waiting to die. Start young…. forget the new car….the tiny condo. I don’t often agree with Gartyh except on the diversification away from real estate meme.

I’m glad that the smarmy civil sevants now have to wait and not allowed to collect full pensions at 55. It simply isn’t fair to let such a small percentage of elite earners retire on the tax payers dime and get to enjoy a life the people who support them never can….finally some justice. Next we will claw bacl all civil service subsidies and let the elite retire on the CPP like every one else……don’t choke…it’s coming…..the current system can’t afford the facade any longer.

And….Bwahahahahahahaha….Obozo bows down to Putin saying….Ukriane isn’t part of NATO so we’re not obligated to defend them………OMG… I’m doubled over……I’ve never seen an a-hole run backwards before. We’ll all wish George Bush would come back when the Russians, Chinese, Iranians, N.Koreans and who knows who else come streaming into the west knowing Obozo can’t life a finger out of fear of messing up his fund raising schedule.

#9 World According To Garth on 03.02.14 at 6:57 pm

I would suggest that if you take all the useless govt workers out of the mix and that includes all of King Hippos Action Plan workers building crap we don’t need that number would be closer to 80% as the average boob who is taxed to death to keep govt workers fat and happy have no money left for RRSPs.

-2 and snowing in the Global Warming Wet Moldy coast. Hows that phony carbon tax working for you Christy? Glad that extra money is there so you can keep those govt worker pensions filled up while most BCers are broke (HAM does not count as they work in china and hong kong and funnel the money through the dirty banks into Slimecouver).

A Scotiabank survey days ago concluded that 70% of people won’t make any RRSP contribution this year. The reason was overwhelming – 74% said they lack the funds to invest.

#10 mitzerboy on 03.02.14 at 7:06 pm

I love it…… Saskatchewan will be waitin for the news monday

#11 Ex-Pat 'Murrican on 03.02.14 at 7:08 pm

Barack Obama phones Vladimir Putin. Obama says “Vladimir, I hear that you want to invade Ukraine. Let me tell you that there will be costs”.

Putin says “meh… here’s a dime call someone who cares.”

Obama stamps his feet and says “I’m a Nobel Prize Peace Winner! You can’t talk to me like that”.

Putin says “You’re right. Let me put this in language that you understand. If you like Ukraine, you can keep Ukraine…. Period.”

#12 recharts on 03.02.14 at 7:12 pm

#5 T.O. Bubble Boy on 03.02.14 at 6:40 pm
It all gets a little worse Monday night. You’ll see.

Wow – that’s a strong statement… I’m intrigued!

Any blog dogs have guesses as to what Garth is threatening us with here?

The announcement of an announcement what else ??

#13 Jimmy on 03.02.14 at 7:15 pm

True Detective I mean.

#14 Bob Loblaw on 03.02.14 at 7:16 pm

$36,000 (spouse and self) CPP/OAS is hardly birdseed, my friend. Hope you’re on the mend.

The average is $1,100 per month. Birdseed. — Garth

#15 Jimmy on 03.02.14 at 7:17 pm

If you google search True Religion you’ll know why this was stuck in my mind from walking around at the mall.

#16 Hicksville Alberta on 03.02.14 at 7:20 pm

A little late to Carl’s “party” but perhaps later is better than never.

In any event my message to Carl is that if you change the way you look at things, the things you look at change.

Carl and his wife have great marketable skils at this time.

So why choose to live in an expensive shithole like Toronto or any other expensive city like Vancouver, Calgary, etc. which firmly sucks you in and will consume your soul and vitality over your prime earning and especially living years? You should be planning your future together under a much less stressful environment. Your center of your universe is you and your life and not some overly populated shithole that is designed to suck the lifeblood out of you just so you can live together with a bunch of strangers.

There are dozens of great places in Ontario where you and your family can live much simpler, more peacefully and very much cheaper and more fulfilled than where you are now.

As an outsider and as a matter of interest i spent a couple of nights last week looking at real estate in some of the other areas outside of Toronto and there are great places and great houses all over the place at $ 200K to $ 300K and i am sure with your marketable skills you could easily just get out of what you have now and re-establish yourself firmly and have a better handle on your current and future life.

Think about it.

It does work and it is really worthwhile.

#17 KommyKim on 03.02.14 at 7:37 pm

RE: #8 airhead princess on 03.02.14 at 6:53 pm
I’m glad that the smarmy civil sevants now have to wait and not allowed to collect full pensions at 55.

That is sort of correct. Only new pencil pusher hires (2013 and onwards) have to wait till 60 to collect their pensions.
Any fed govt worker hired before 2013 can still retire at 55 if they have enough time in. Boomers win again.

#18 Darryl on 03.02.14 at 7:43 pm

“Any blog dogs have guesses as to what Garth is threatening us with here?”

I guess how many people will contribute and how much.

#19 ILoveCharts on 03.02.14 at 7:48 pm

Garth:
How much money do I need in my TFSA and RRSP before it makes sense to have someone else manage them?

I get the basics of diversification but let’s face it: That takes time and skill.

Should it be DIY until I reach $100k? $500k? more?

#20 Jen on 03.02.14 at 7:51 pm

“Only 23% of people investing will contribute the maximum allowable (18% of earned income, with a cap of about $24,000).”

Garth,

If one has a defined benefit pension plan such that about 11% of my pensionable earnings are put toward it and the employer matches by 112% (amounts to about $16.5K per year all in this year) would you still advocate saving through RRSP? Will I just end up getting dinged with a higher tax bracket come retirement?

Thanks in advance.

#21 omg on 03.02.14 at 7:51 pm

Remember when we thought all the baby boomers were going to retire and make room for the next generations.

HA – the way its looking financially for the boomers, they will be taken out of their workplace on a stretcher before they willingly retire. Even my friends in government that can retire with a fat pension are hanging in, what with the annually Maui vacation, two luxury cars, and grown kids living at home.

So those under 30 can look forward to another 10 years or so of dim job and advancement prospects. Best advice is to get into something the boomers cannot possibly understand – don’t see too many boomers coding these days.

#22 torontorocks on 03.02.14 at 7:56 pm

Garth when you say shovel assets you already own into the rrsp do you mean i can take a mutual fund or etf or whatever, inckuding a gic i already own in say a cash account plunk that into the rrsp and get the deduction? Thanks

Yup. — Garth

#23 Obvious Truth on 03.02.14 at 7:58 pm

Monthly RE stats?

#24 REIT on 03.02.14 at 8:03 pm

Ok this was funny…
“get punted for a washroom dalliance”

#25 grasshopper on 03.02.14 at 8:09 pm

First:

Followed Ross Kay’s revelations last week.

http://www.rosskay.com/exposure-of-national-misreporting.html

32, 411 reported in MLS, versus 28,296 audited. This is a 12-13% discrepency.

Is this significant?

Second:

I fear that the situation in Ukraine/Russia is going to negatively impact the markets in the upcoming days … especially tomorrow.

#26 Obvious Truth on 03.02.14 at 8:10 pm

Carls story and the pic tonight illustrate how this will be a story about societal impacts.

A teacher and accountant can make the same wage in London. Better beach an hour away and no odour.

Can even afford a couple of seadoos and a pickup.

#27 KommyKim on 03.02.14 at 8:13 pm

RE: Garth, “Yeah, yeah, I know RRSPs are out of favour and as sexy as a cold sore.”

It is interesting to compare RRSP returns to TFSA returns. I’ve run some numbers:

$10,000 to invest.
Total tax rate at investment time: 32%
Put $10,000 in TFSA and earn 75% over 10 years = $17,500 at end tax free.

OR

Put $14,705.88 into an RRSP. (The extra $4,705.88 comes from the tax refund a short time L8R so your NET contribution is still 10K) and earn 75% over 10 years = $25,735.29 before tax. Since it is 10 years later, you are now retired and in a 20% tax bracket so you only pay $5147.06 in tax yielding $20,588.24 after tax.
So it would seem that the RRSP is the better vehicle for retirement saving as long as your income drops in retirement. If the tax rate is the same it is a wash and the RRSP would yield the same as the TFSA.

Thoughts?

Are you prepared to tell a 30-year-old that personal tax rates won’t rise over the next three decades? — Garth

#28 unbalanced on 03.02.14 at 8:14 pm

For the Airhead Princess. Nice name you have. Something like mine. Whoa is mee, whoa is mee! I just love it when people complain about everything. Maybe you should try and do something about it. Did you want some whine with your cheese.

#29 Smoking Man on 03.02.14 at 8:16 pm

Just went into a hysterical fit of laughter

Kerry lecturing Putin on invading sovern countries.

Vietman
Afghanistan
Iraq
Libya.

What those don’t count…

#30 Victor V on 03.02.14 at 8:18 pm

#22 torontorocks on 03.02.14 at 7:56 pm

You can get more info on in-kind contributions here:

http://www.rbcds.com/rsp-contributions.html#5

#31 West Vanner on 03.02.14 at 8:19 pm

I remember when I was one of those people, contribute one year pull it out the next. Not any more, just netfiled my return for a $12K refund, most of which is already contributed. Why wait another year.
I have been where the people are you talk about Garth I get it, they don’t have any money, every cent goes into the house, the kids, the commuter and family cars. It is a path of financial self destruction that I opted out of five short years ago. I am already recovering nicely. Thanks for all the good advice on this blog.

#32 Debtfree on 03.02.14 at 8:23 pm

You got nothing to worry about grasshopper . Russia’s GDP is the same size as Italy’s and Ukrainian is smaller than Ireland’s . If the world gets serious with Russia we could crush their economy like a bug and not even feel it .

#33 Mean Gene on 03.02.14 at 8:23 pm

I don’t recall seeing a lot of RRSP advertising on the idiot box this year, now I know why.

#34 Smoking Man on 03.02.14 at 8:24 pm

#2 Jimmy on 03.02.14 at 6:27 pm

It’s true detective, not true religion…

#35 KommyKim on 03.02.14 at 8:34 pm

RE:Are you prepared to tell a 30-year-old that personal tax rates won’t rise over the next three decades? — Garth

No, but don’t you think it’s unlikely that the threshold for the 32.5% rate (Fed & BC for example) would be lowered to where the 20.06% is today considering that the brackets are continually adjusted upward for inflation?
I guess anything is possible. The TFSA tax exemption could eventually be capped also. After 30 years the Gov could turn around and say, “Everything over the accumulated contribution amount of $165K will now be taxed at x%”

Obviously, in a nation of unprepared citizens, that will not occur. — Garth

#36 T.O. Bubble Boy on 03.02.14 at 8:35 pm

I purposefully bowed out. Sure you know why. — Garth

Ah – the roundtable was *after* the ice incident… sorry to remind you.

Ah, I resigned from the publication in December. — Garth

#37 Cici on 03.02.14 at 8:36 pm

Ahh, the tension…why are you doing this to us Garth?
What is going to happen Monday night?

Is it going to be a no-brainer, totally obvious CMHC-type announcement confirming that this year, for the tenth year (or something like that) in a row, RRSP contributions in this nation have again spiralled downwards?

Two teasers within one week…it’s just to much excitement for this blog dog.

#38 HDJ on 03.02.14 at 8:44 pm

Everyone who visits his blog has repeatedly been informed that it’s wrong to believe their city is different when it comes to real estate values. However, have a look at this picture (link below) and you’ll see why good old Victoria, in a very positive real estate way, just ain’t like any other part of the country.

http://stevengoddard.files.wordpress.com/2014/01/screenhunter_1153-jan-01-05-02.gif

#39 Freedom First on 03.02.14 at 8:54 pm

I really enjoy the truth and the wit with which you deliver your free and valuable financial advice Garth.

It has come in handy at times when I am in a room of financial illiterates mouthing off and suddenly, and unexplainably, I feel like I have to feel the pleasure of calmly revealing their ignorance in a sane humourous Garthism like way, to which their reaction is like I have committed Blasphemy to their ideal of the Canadian Dream. I usually say nothing, but when this mood strikes me, I am able to clear the room in a matter of minutes. Insanity can not stand Sanity.

RRSP’s and TFSA’s. Both of them, used properly as Garth has shown how to use both many many times on his free blog, are to used to their maximum benefit for every healthy working Canadian. No exception.

#40 Old Man on 03.02.14 at 8:55 pm

I am monitoring a situation in Ontario of a town with a population of 22,000. It appears that a long term fraud may have taken place; the money has disappeared; the mayor has skipped town; funds to buy A were paid for B; and the citizens are afraid that their homes and businesses are worthless. This is hard to believe and the province has been contacted; an investigation is ongoing and there is panic in the air. I am sure there is an explanation so stay tuned.

#41 KommyKim on 03.02.14 at 8:56 pm

RE: #35 KommyKim on 03.02.14 at 8:34 pm
Obviously, in a nation of unprepared citizens, that will not occur. — Garth

Yes, it is unlikely. Especially since so few are taking advantage of TFSAs so the amount of money to grab will be relatively small compared to GDP.
What I think what will happen is that there will be more cutting of transfers to provincial govs who will off load to municipalities, who will soak homeowners with more property taxes.

#42 Freedom First on 03.02.14 at 8:56 pm

oops…..are to be used…..

#43 visorman30 on 03.02.14 at 8:57 pm

I wonder how the quoted stats change when figuring in pensions? I mean, RBC could hardly exactly know how much pension adjustment a customer would have. Personally, I do have a defined benefit plan and therefore have very little in contribution room.

I still agree with the message however, but I just think there is a limitation on the information.

#44 TnT on 03.02.14 at 8:58 pm

#16 Hicksville Alberta

Your names says it all…

With all the extra money you save living out in the “sticks” I am sure your ventures into Walmart are lucrative .

#45 Detalumis on 03.02.14 at 8:58 pm

#8 airhead princess is actually right about one thing, people overestimate longevity. If the average age of widowhood hovers at around age 60 it’s actually a minority of people that retire as a couple.

If you made it to age 65 in 1950 before they had any treatment for heart attacks and only rudimentary cancer care, you only lived on average 4 years less than you do today – so much for living oh so much longer. I made the “mistake” of buying a house in my 30s in an area full of retired people so I have spent the last 20 years observing their so-called lives.

The best thing to do is enjoy your life and travel when you are young not pile up your dough for a time when people don’t do all that much actual living otherwise it’s your heirs that will do your living for you.

#46 Just some guy on 03.02.14 at 9:00 pm

To add to the reasons that one will need the RRSPs, although not as much fun as the washroom dalliance, there is the “invisible man” phenomenon that starts to take hold after age 50. We start to become invisible to hiring managers, recruiters, HR managers, and the like. Maybe all those wrinkles effectively scatter the light thus turning us into stealth boomers.

To offset this “hollowing out” effect, we have that glorious moment to look forward to when we realize that our investments finally start to return more in a year than our work earnings. What Garth recommends is the only way I have found to hit that sweet spot.

#47 Smudgekin on 03.02.14 at 9:00 pm

British Government Intelligence (the one that counts,) gives a shit about the Ukraine. They’ll be looking for pressure tactics to strong-arm Putin into helping with Gibraltar Rock & Scottish independence issues etc. While publicly decrying the occupation of Ukraine.

#48 the jaguar on 03.02.14 at 9:00 pm

“It all get’s worse Monday night…you’ll see”
What’s that teaser all about, Garth? What’s coming down Monday night? You’re a tease, Garth

#49 Bottoms_Up on 03.02.14 at 9:05 pm

#9 World According To Garth on 03.02.14 at 6:57 pm
—————————————————
You have no clue what you get for your tax dollars do you? Unwashed.

You have never backed up your useless drivel with facts or reliable studies or surveys etc. This undermines the useless, unproductive, baseless and severely uneducated ‘points’ you try to make.

#50 Mishuko on 03.02.14 at 9:27 pm

Just to build a bit on RRSP contributions, if I have securities in a TSFA, could I do a straight transfer of the securities from the TSFA into the RRSP and still get the tax deductions/refund for this contribution?

And yes, I will be one of those 74% not contributing this calender year but saving for when I am in a higher brackey.

Thanks!

#51 Daisy Mae on 03.02.14 at 9:27 pm

#4 T.O. Bubble Boy: “Mike Eppel (business reporter from 680 News) was the only realist in the bunch… Brad J Lamb and others just debated whether the Toronto market was HOT or SUPER HOT.”

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

WHY would Garth waste his time with this panel?

#52 Here we go again on 03.02.14 at 9:27 pm

Why rinse, just repeat: take The Molotov–Ribbentrop Pact, and insert Ukraine.

Note to whoever said Nazis wanted to take over the world. (and I am not pro German) In 1933 Judea declared war on Germany, and in 1939 England declared war on Germany, after Hitler invaded Poland, but Stalin invaded it too! The original plan was for Stalin to take over Europe (Stalin got lazy), the Hitler project was Plan B. Hitler invaded all his neighbors except…Switzerland (insert your own joke here), he plundered Euro gold and deposited it in Switzerland. So invading Switzerland would be like robing your own bank. Switzerland was German heavy- it would have been a cakewalk on a red carpet with a welcome wagon serving schnaps

#53 Exurban on 03.02.14 at 9:34 pm

#33 MeanGene

I don’t recall seeing a lot of RRSP advertising on the idiot box this year, now I know why.

Hell, you used to see seasonal RRSP advertising on billboards, bank windows, lots of places. Definitely a change.

#54 Nemesis on 03.02.14 at 9:34 pm

@HonkyTonkNostyMan/#87PriorThread…

Indeed.

Here’s another one that will doubtless terrify HommeDuTabagisme [that would be: Teachers who GravitatedTowards PopStardom – and MadeIt/DidIt, as guitarists are wont to say, “FingerStyle”. BonusZen: Sting’s on BackUpVocals]…

http://youtu.be/ZL2Yo2GcLkQ

[NoteToNosty: Mark studied EngLit @ Leeds and lectured at Loughton College in Essex… Just imagine what our MagnanimousHost could do if he put his mind to it. For some inscrutable reason, I see him on the Pedal Steel Guitar. For the MusicalRecord, & WellPrior to moonlighting as a CoverageConcocter for the nascent MTVIndustry, ‘N’ was a percussionist – so to speak. Hardly in BuddyRich/GeneKrupa territory… but a solid SandyNelson KnockOff nevertheless.]

#55 Ford Prefect on 03.02.14 at 9:37 pm

#49, Bottoms Up: unfortunately “World According to Garth” epitomizes the mindless knee jerk anti-tax attitude that is destroying Canada. As has been well stated “taxes are the price we pay for civilization”.

The biggest problem most workers have, and I was one for years, is that most of them just refuse to save anything. Then they blame taxes for their poverty. I paid taxes, willingly, and I am now very comfortable in retirement. But of course I also saved.

#56 World According To Garth on 03.02.14 at 9:41 pm

How WRONG you are Govt Troll. And I used to be a front line worker who left to be a stay at home mom and raise her kids correctly (MY opinion). So when I see 1:1 ratio of useless pencil pushing admins to we front line workers I know with which I speak. And I have posted a plethora of links Mr Troll. Here are a few:

http://www.cbc.ca/news/business/canada-post-opg-highlight-public-pensions-problem-1.2459995

http://www.cfib-fcei.ca/english/article/5039-public-sector-pensions-unsustainable-and-unfair-canada-s-pension-tension.html
(Add in Prov and Municipal Shovel Leaners and you get 600 BILLION unfunded pensions)

http://www.theglobeandmail.com/globe-debate/cowed-bloated-bureaucracy-needs-renewal/article16211338/

http://www.rclbr197.org/news/item.asp?T=0&NID=1240438321
(dead people – not just Cdn Soldiers – and WASTED billions that could have gone to tax relief)

I could put in 100 links but I’m not going to waste my time. GOOGLE them up yourself.

#49 Bottoms_Up on 03.02.14 at 9:05 pm

#9 World According To Garth on 03.02.14 at 6:57 pm
—————————————————
You have no clue what you get for your tax dollars do you? Unwashed.

You have never backed up your useless drivel with facts or reliable studies or surveys etc. This undermines the useless, unproductive, baseless and severely uneducated ‘points’ you try to make.

#57 torontorocks on 03.02.14 at 9:41 pm

Thank you Garth, Victor V….

#58 pinstripe on 03.02.14 at 9:44 pm

Many young people have no desire to save money for retirement. Their view is that they will either be taxed hard or the money in retirement savings will be gone. They are referring to many examples where the retirement savings money (pension) was raided by US companies in takeover bids. Others examples are where their boomer parents saved and are now losing their government promised benefits because they are in a higher income level.

Real estate is most favourable to the young people. Nobody is making more land these days.

#59 Daisy Mae on 03.02.14 at 9:45 pm

#36 T.O. Bubble Boy: “I purposefully bowed out. Sure you know why. — Garth

Ah – the roundtable was *after* the ice incident… sorry to remind you.

Ah, I resigned from the publication in December. — Garth”

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

IF Garth WANTED to be there, he’d have been there. A broken leg wouldn’t stop him.

#60 BCD on 03.02.14 at 9:56 pm

I have a good pension coming to me…rrsp’s are a great idea for someone without a pension, but if you have a pension relying on withdrawing additional rrsp’ s will only raise your tax bracket. People need money when they are young, a pension is enough when you are old. For me, maxing the tfsa is a better idea. No taxes. It’s like savings with a little interest that’s tax free.

“A little interest that’s tax-free”? Seriously? — Garth

#61 tim on 03.02.14 at 9:56 pm

I always max out my TFSA. I have a cash account and an RRSP account, but as I keep shoveling more into the RRSP, I will squirrel enough to end up paying a lot of it in tax. Real estate is overpriced so I have no other choice. It sucks not being able to benefit from the tax free capital gain. Sure I’ll have a lot of money in RRSPs but I’ll pay a lot of it in tax when I eventually draw it down…

#62 Nemesis on 03.02.14 at 10:03 pm

#BonusZen

SandyNelson: “WipeOut”

http://youtu.be/C2fNtUAPjC0

[NoteToGT: Yes, MoneyForNothing and WipeOut are thematically apropos. Well, mostly. At least now you understand my weakness for CA SurfBunnies.]

#63 Tom from Misondaysissauga on 03.02.14 at 10:19 pm

Monday night? I’m going with the price of a litre of gas exploding higher, maybe 10%. Russia is the largest oil producer in the world now, right?

#64 Tripp on 03.02.14 at 10:32 pm

Very interesting article about Athens and how they got from 250,000 to 3,600 sales/year:

http://www.theguardian.com/world/2014/feb/28/home-ownership-greece-property-market#

“The joke now doing the rounds is: if you want to punish your child, you threaten to pass on property to them,”

#65 General Parrote on 03.02.14 at 10:36 pm

Is that the dog from Finding Neverland?

#66 Laura on 03.02.14 at 10:37 pm

While I generally agree with most things you say, Garth, I think there are bigger problems than housing behind low RRSPs and TFSA contributions. Median individual Canadian income in 2010: $29,878. Yes, certainly you’ve had blog dogs who are inspiring who save for RRSPs even on that kind of wage, it’s just tough. In Toronto, 50% of the population are renters (2006 stats, maybe higher now), and they’re not richer than you think. About 3/5ths of Canada’s low income earners live in Toronto. I can understand how an RRSP or a TFSA would be considered a truly discretionary luxury not just for the “house-poor” but for the truly poor.

#67 april on 03.02.14 at 10:44 pm

#58 – sounds like realtor spin……..

#68 grasshopper on 03.02.14 at 10:44 pm

Guess there is no point worrying about Crimea. The Ukraine and Russia issue is no longer the top headline.

It’s Oscar night.

#69 economictsunami on 03.02.14 at 10:57 pm

It will be interesting to see what opportunistic quid pro quo, either America, Israel, or China is about to unleash; as so many eyes focus on Russia’s transgressions…

It’s Going To Be Huge Week For Economic Data — Here’s Your Complete Preview

http://www.businessinsider.com/monday-scouting-report-mar-3-2014-2014-2#ixzz2urT1UlAl

#70 zee on 03.02.14 at 10:58 pm

hi

How much money does a person need in retirement.
I hear 80% of your working income. Do you agree with this. It seems high to me.

#71 Infused with Opiates on 03.02.14 at 11:00 pm

50 Mish – I dont know if you can consider it “straight” but I dont see a reason you couldnt sell the investment in your TFSA, withdraw the funds, then deposit in an RRSP, and re-buy the investment. You could use the refund to re-contribute to TFSA the same year if you have room, or the next if you dont.

The better question to ask is if its actually worth it, depending on whether the RRSP is the better savings
vehicle for you.

#72 Bob on 03.02.14 at 11:06 pm

@Mishuko #50

Contribute to your RRSP today. You can carry forward the tax deduction until you make more money. This way your money will grow tax free….Then when you make more start writing off you RRSP contributions from 5 – 10 years earlier.

My prior contributions are getting me an 8K refund from the CRA this year :) My TFSA is also maxed :)

I don’t see a Harley in the picture this year but I do see a new (to me) bike this year.

Life’s rough as a lowly renter ;)

#73 BCD on 03.02.14 at 11:15 pm

#60 BCD on 03.02.14 at 9:56 pm
I have a good pension coming to me…rrsp’s are a great idea for someone without a pension, but if you have a pension relying on withdrawing additional rrsp’ s will only raise your tax bracket. People need money when they are young, a pension is enough when you are old. For me, maxing the tfsa is a better idea. No taxes. It’s like savings with a little interest that’s tax free.

“A little interest that’s tax-free”? Seriously? — Garth

————————–

Yes, the interest in a TFSA is free money on top of the savings in there. Gic at 2.25%. Better then a kick in the ass with a frozen boot. Not as much as you 1%’ers are drawing…but then again you guys aren’t nearly as popular with the ladies as I am. Women take more time then investing, and they provide better returns too :)

#74 Smartalox on 03.02.14 at 11:19 pm

Backing away from the Russia – Ukraine speculation (which scares me in how it parallels the events that of precipitated the first world war 100 years ago) and heading back onto this evening’s topic of choice,

Garth, what strategy do you recommend for someone who has more than $100k in unused RRSP contribution room? The missus and I each contribute over 20% of our earnings to our RRSPs, but we barely make a dent in our reserve of contribution room.

This is a huge potential asset, we feel that we leave sitting on the table year after year. It’s actually prevented us from exploring career options outside of Canada, for fear of forfeiting it.

I know, most will say ‘first world problems’ but I’d really like to make the most of this.

#75 Happy Renting on 03.02.14 at 11:22 pm

“Happy lives don’t come from owning a house. They come from financial security. In big cities, the two are often mutually exclusive.”

Is that ever the truth. We opted for the latter, and have survived various curveballs thrown by life in the past year. In those moments the money doesn’t make you happy so much as save you from a mountain of misery, worry, and perhaps poverty (which, under the circumstances, I consider to be just as good as happiness.)

To anyone whose life is exciting enough to get fired for a washroom dalliance, I salute you!

#76 Z on 03.02.14 at 11:31 pm

#58 pinstripe: “Their view is that they will either be taxed hard or the money in retirement savings will be gone”.

So, mainly you are saying that young people need to be educated on how to save for retirement? It’s sure that planning retirement from money coming from a pension plan is starting to be more and more risky, but that cover only 30% of the current work force.

Anyway, it’s simple, if you don’t save, you will have to work until you die or taking more debt and don’t leave anything behind to your children.

Also, for the real estate part, my understanding of what Garth is saying in all his posts is not that owning RE is bad, but owning ONLY RE is bad.

Btw, my guess for Monday night news is that the actual numbers about RRSP will be worst than what the surveys have shown.

#77 Andrew Woburn on 03.02.14 at 11:47 pm

#8 airhead princess on 03.02.14 at 6:53 pm

Lets face it…after 71 you can’t chew a steak anymore…let alone digest it. The chances are that you won’t feel like backpacking across Europe either. Retirement is for the young……after that you’re just waiting to die.
===========================

Actually it’s not necessarily that bad. I’m 70 and I will be eating steak next year. I won’t be backpacking across Europe but we will rent a camper van to travel there for a few months. I agree that it is a good idea to set yourself up to retire early because you have no guarantee whatever. I lost two good friends to cancer in their early sixties. However, based on what I can see in my circle of friends and acquaintances, the only ones who are the kind of basket cases you describe basically started deteriorating in their forties. The rest of us have active lives and many interests and are hoping to keep going into our eighties. My parents did.

#78 Piccaso on 03.02.14 at 11:48 pm

Don’t forget 50% of your RRSP isn’t yours.

#79 shemo on 03.03.14 at 12:01 am

just one question:

hows that short on gold doing for you?

Geo politics – Garth thinks its a nicey nice world out there.

Reality bites don’t it? Go mother Russia!!!

#80 Whinepegger on 03.03.14 at 12:18 am

@ #20 – Jen

I’m in a similar situation to yours. My spouse has no pension plan through employment so it makes sense for me to invest in spousal RRSPs. Lower my tax load and reduce the taxes when the money is taken out of the spousal RRSP, or income-split during retirement. But I also try to max-out our TFSAs. If you have no spouse or a spouse with a significant pension you might be better off investing primarily in TFSAs.
Each situation is unique. For accurate info you would be well-advised to let a few precious pennies slip out of your hand into Garth’s for the best advice.

#81 Pope Snugglebums the 666st (aka Nosty) on 03.03.14 at 12:19 am

#62 Nemesis on 03.02.14 at 10:03 pm — “#BonusZen — SandyNelson: “WipeOut”

Yo Nem, as per Crocodile Dundee’s (slightly adjusted) line: “Now THIS is a wipeout!” — Sooper Wave

#29 Smoking Man on 03.02.14 at 8:16 pm — “Kerry lecturing Putin on invading sovern countries.” or more to the point: “Whom the gods would destroy, they first make mad” (spoken by Prometheus in Longfellow’s poem The Masque of Pandora).

Hah! The west is fast turning into a pathetic joke, such as this clown. Maybe this has a little more to do with it than one realizes! More bark than bite.

Also, Putin vs. Rothschilds, China vs. Japan (another flashpoint), Flashback, S-400 air defense system on way to Ukraine, Backers not Bankers and Future Shock.

#82 Happy Renting on 03.03.14 at 12:20 am

#19 ILoveCharts on 03.02.14 at 7:48 pm

I recall Garth saying somewhere that anyone with six figures should get an advisor. So, $100k+.
——————–
#39 Freedom First on 03.02.14 at 8:54 pm

I would LOVE to witness your room-clearing sometime. :) For me, once I deduce someone is not financially-literate and rational I don’t try to discuss anything of the sort with them. Generally not confrontational enough to try to clear a room, and for anonymity’s sake prefer not to reveal to others that my level of consumption is lower than theirs by choice, not because of lesser means or access to credit. Contact with dumb people tires me out.

————————-

#45 Detalumis on 03.02.14 at 8:58 pm
If the average age of widowhood hovers at around age 60 it’s actually a minority of people that retire as a couple.

That’s a sad thought. My parents and my in-laws (both sets married ~40 years) are enjoying their golden years with some light travel, volunteering, socializing, grandchildren-doting. Hoping for the same, someday.

————————

#46 Just some guy on 03.02.14 at 9:00 pm

Your 50s used to be the best earning years that would fund your retirement. I truly feel bad for the people who counted on this and now find themselves downsized and unable to secure comparable employment. Perhaps the new paradigm is earn retirement money in your 20s and 30s, raise children in your late 40s-50s (if you can still have/adopt them?)

#83 Rexx Rock on 03.03.14 at 12:33 am

Most people who have provincial or federal pension don’t save for retirement.Thats what I hear when I ask people who have them.Like myself.
I have a great Idea to pay down the debt.Any job opening that gives you a provincial or a fedral pension, you must meet the qualifacations and bid for the job.Lets say a 28 year old will pay $25,000 for the full time job or to the highest bidder.Why not,I know I would and tens of thousands would also do the same.Think about it ,a chance to pay for a nice pension and pay down the national debt at the same time.Its a no brainer.

#84 Julia on 03.03.14 at 12:33 am

A friend of mine with a decent job in her mid 50’s just withdrew her entire RRSPs to pay down her debt. She’s still got some credit card debt and has no realestate or investments. Sigh…

#85 cK in AB on 03.03.14 at 1:08 am

Don’t spend more than 30% on housing… So says Jimmy McMillan.

http://www.salon.com/2014/03/01/why_this_man_was_prescient_hint_it_has_to_do_with_your_rent/

Maybe he doesn’t know the 100 rule..?

#86 think again on 03.03.14 at 1:16 am

Unique new investment vehicle just introduced in Canada…Single Premium Life Insurance held in your RRSP using existing funds or new $…beneficiaries receive up to 2.5X the amount you commit. (health & age are factors)
http://www.kofc.org/un/en/insurance/news/detail/new-product-available-canada.html

#87 Andrew Woburn on 03.03.14 at 1:21 am

Rolls-Royce Is Designing Giant Drone Ships to Sail the High Seas

http://gizmodo.com/rolls-royce-is-designing-giant-drone-ships-to-sail-the-1530534477

No problem, all the sailors can become truck drivers. Oh, wait…

#88 Unwashed on 03.03.14 at 2:34 am

#31 West Vanner

Ouch! I’m sorry that you gave the government a $12k interest-free loan. That sucks.

But I guess that pales compared to losing out on $120k in profits from being out of the RE market over the last 5 years.

I hope your luck turns around soon.

#89 Steve French on 03.03.14 at 5:41 am

Take a picture of this:

The fields are empty, abandoned ’59 Chevy

Laying in the back seat listening to Little Willie John

Yeah, that’s when time stood still

You know, I think I’m gonna go down to Madam X

And let her read my mind

She said, “That voodoo stuff don’t do nothing for me”

#90 Steve French on 03.03.14 at 5:45 am

Smoking Man:

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

#91 Buy? Curious? on 03.03.14 at 5:45 am

Garth, what gives? Why did you back out of the Real Estate RoundTable? That almost sounds like a UFC battle of economists where instead of leg kicks and arm bars, Dudes be dropping stats and theories! Kaboom! Please tell me you didn’t pass on that opportunity because you’ve got some OB1/Jedi plan to spank those guys and not because you’re afraid Brad “I’m bald by choice” Lamb? I can you just imagine you coming into the room like Celine Dion at her wedding and eloquntly waxing on about the unsustainability of the Canadian economy.

We’ve seen what has happened to property crashes in Ireland and the US, they seem to have bounced back. I don’t hear much of Greece, problem solved. And other that the Ukranine that with sort itself out with a bit of posturing and lots of cash, the world is Eh OK.

http://www.youtube.com/watch?v=nV59cxMsFnU

Rob Ford on Jimmy Kimel? gawddamn he’s a handsome guy! Let’s all vote for him! Rob Ford 2014!

#92 Fortune500 on 03.03.14 at 6:32 am

Looks like I wasn’t the only one that came to this conclusion …

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/canadas-under-35s-are-also-rans-in-the-wealth-race/article17164161/

#93 Ray Skunk on 03.03.14 at 8:40 am

#33 I don’t recall seeing a lot of RRSP advertising on the idiot box this year, now I know why.
———————————————-

You’re spot on.

Took in a certain awards show last night, its rare I spend an entire evening watching the shitpump, but it just happened that way.

Couldn’t believe the commercials…

– Dominion Mortgages using kids to show that owning RE is some kind of parental responsibility
– The Feds “Economic Action Plan” boasting how its made Canadian paper-wealthy on the back of crippling debts and made housing a pipe dream for many
– Moen faucets trying to pitch themselves as being in the same bracket as Tiffany
– The Working Families using my recycled tax dollars to portray Tim Hudak as the antichrist, using a string of half-truths and exaggerations
– Numerous car ads for when you feel that HELOC itch

…and nothing regarding RRSPs was observed.

What an absolute state.

#94 T.O. Bubble Boy on 03.03.14 at 8:42 am

@ #51 Daisy Mae on 03.02.14 at 9:27 pm
#4 T.O. Bubble Boy: “Mike Eppel (business reporter from 680 News) was the only realist in the bunch… Brad J Lamb and others just debated whether the Toronto market was HOT or SUPER HOT.”

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

WHY would Garth waste his time with this panel?
——————–

He’s been the voice of sanity on that panel for several years. But, it looks like Post City Magazine has now gone back to its purist form — 100% real estate, restaurant, and private school advertisements. Garth did stick out a bit too much as someone trying to help people think vs. sell them something.

#95 World Traveller on 03.03.14 at 8:46 am

I have to agree with others here, as much as we hear about people buying Iphones, leasing Bimmers and engaging in house horny activities. There is a large subset of working people that are living frugally and still can’t manage to put significant money away.
I know a couple friends who are unemployed and have moved back to their mother, the house is like a rooming house now. Like you said before, who are the boomers going to sell to when their children are shacking back up with them in their 40’s and 50’s?

#96 jess on 03.03.14 at 8:49 am

price inflation?

New
How ‘synthetic’ identity fraud costs Canada $1B a year
‘Server Froze’ among list of implausible fake ID names
By Rick MacInnes-Rae and Mark Gollom, CBC News Posted: Mar 03, 2014 5:00 AM ET| Last Updated: Mar 03, 2014 7:21 AM ET

#97 Steve on 03.03.14 at 8:49 am

I’m a big believer in RRSPs and TFSAs. But after watching the “Show Me the Money” episode of Marketplace on Friday night, I feel sorry for the average investor. Most people have no idea how to invest, and no idea how much bad advice is being given by the investment industry. They aren’t even aware that there are pitfalls to avoid. As a DIY investor, I realize there are limitations to my expertise. But I totally understand the concepts of balancing, diversification, risk, etc. And I can clearly explain how mutual fund fees work, and why we should avoid them. The “advisors” who were recorded by Marketplace deserve to be tarred and feathered. The industry is a disgrace. Garth, I appreciate all your efforts to educate people. But it seems to be a losing battle.

Those ‘advisors’ are actually salespeople. Never invest with anyone who collects a commission. — Garth

#98 Dana on 03.03.14 at 9:13 am

I’d love to buy some ETFs but I’ve noticed a lot of the big banks are selling Mutual Funds masquerading as ETFs. For example BMO has the following MFs: BMO Target Yield ETF Portfolio, BMO Target Enhanced Yield ETF Portfolio, BMO Target Yield ETF Portfolio Series T6, BMO Canadian Equity ETF Fund, BMO U.S. Equity ETF Fund, BMO International Equity ETF Fund, BMO Canadian Tactical ETF Class, BMO Tactical Dividend ETF Fund, etc.

Also I’ve noticed ETFs have a lower MER vs the MER of MFs buuuuut ETFs tend to carry a lot of hidden fees. At BMO, they charge you $9.95 (NOT including the MER or HST) just to buy an ETF, and then another $9.95 to sell — not so with the MFs.

So it seems like a wash, for us poor lichen with very little to invest, most profits will end up in the banks pocket through insidious fees.

#99 Castaway on 03.03.14 at 9:16 am

#29 Smoking Man on 03.02.14 at 8:16 pm
Just went into a hysterical fit of laughter

Kerry lecturing Putin on invading sovern countries.

Vietman
Afghanistan
Iraq
Libya.

What those don’t count…
————————————————–

SM, don’t forget Panama and Grenada. Panama because Bush 1 had to show the world he was tough like his predecessor (and the economics of a certain canal) and Grenada because they had to finally pick one they could win!

#100 Brutus on 03.03.14 at 9:32 am

Markets jittery, plunging in Russia. Gold and silver up.

It took 37 days from the assassination of Archduke Ferdinand in 1914 to the outbreak of the Great War. That was in an era without instant communications, television, or social media.

Expect the economic harm that Russia will face to harden its approaches to the crisis, something else that the west in its disorganized denial will not expect.

This is so worrying.

#101 TSL on 03.03.14 at 9:55 am

Those without savings will simply outnumber and outvote those with savings.

Undeniably and irrevocably we will see a mass, and maybe violent, transfer of assets from those with to those without.

no democracy or popular government can survive an institutionalized decline in a standard of living for such large numbers of people. Remember the Depression and the looming and gathering threat of mass civil insurrection resulting. Same for Weimar Germany.

Love the blog, Garth, but the average person in Canada cannot manage an investment portfolio on top of all else in their lives. They simply cannot make that a function of their future. They will require that be done for them with guarantees on the security of future income. The greatest flaw in the investor-class model is its reliance on the assumption that all people can join this class. When that is exposed as a failure, the mass transfer of assets will not only be necessary, it will have begun.

#102 Unreal City on 03.03.14 at 9:55 am

#81 Pope Snugglebums the 666st (aka Nosty) on 03.03.14 at 12:19 am


That site you linked, political veilcraft, is interesting but disino.

100 yrs ago two big countries were stolen- Russia was taken over by terror, USA by stealth. Any notion that Russia has been freed from the thieves by KGB agent Putin because he paid off some fictional loans is fiction. Every world leader is controlled, including Mahmoud Ahmadinejad and Putin

All the world’s a stage,
And all the men and women merely players;
They have their exits and their entrances,
And one man in his time plays many parts,
His acts being seven ages.

– Edward de Vere

#103 Aggregator on 03.03.14 at 10:30 am

*FEDEX UNIT TO RAISE SHIPPING RATES BY AN AVERAGE 3.9 PCT, EFFECTIVE MARCH 31

Where's all this deflation that everyone was expecting?

#104 Daisy Maea on 03.03.14 at 10:34 am

#82 Happy Renting: “Contact with dumb people tires me out.”

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

Then Garth must be totally exhausted….

Anyway, I agree — I don’t bother trying to discuss the economic situation we face, with people. They just don’t get it and probably never will. Waste of time.

#105 Daisy Mae on 03.03.14 at 10:39 am

#82 Happy Renting: “…raise children in your late 40s-50s (if you can still have/adopt them?)”

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

Nope! You will not have the same level of patience and stamina. Period.

#106 -=jwk=- on 03.03.14 at 10:41 am

@ #56 Hey world according to garth

“The facts are, for every $1 that a retiree gets from the Ontario Teachers Pension plan, 11 cents comes from the taxpayer, 11 cents came from the teachers themselves and 78 cents came from the investment returns from the plan. It’s a very effective vehicle and by far the most efficient way to provide for the financial future.”

so from the article you linked, I guess you can take teachers off your hit list eh ?

#107 :):(Ying Yang on 03.03.14 at 10:48 am

#81 Pope Snugglebums the 666st (aka Nosty) on 03.03.14 at 12:19 am
Also, Putin vs. Rothschilds, China vs. Japan (another flashpoint), Flashback, S-400 air defense system on way to Ukraine, Backers not Bankers and Future Shock.

……………………………………………………………………….
Nosty I just returned from Hong Kong and while I was there visited some old relatives on the mainland. China is flexing their muscles and want to be the new leader of the world. Their ambitions are far to great compared to their capabilities. Some of the people in charge believe that the way to control the world is through economic power. Which is correct! Others over there believe that the economic power that they currently have has empowered them with enough monetary freedom to spend on military budgets that’s would create a military power. The problem with the military aspect is that China is creating crap military equipment. The money spent is wasted. China is a formidable adversary with military power and financial power but they lack a central focus on how to achieve a superior advantage and then act on it. They want to show the world that they have power. They would not likely want to start a war over four small rocks. But then again there was the Falklands!!!!!

#108 Infused with Opiates on 03.03.14 at 10:58 am

98 Dana – suggest you just invest in some low-cost no-load index MFs regularly until you have enough saved to make it worthwhile to switch. TD e-series has lowest MER but there are others with less than 1%
MER. Also expect more banks to offer ETFs in the
future.

#109 Daisy Mae on 03.03.14 at 11:12 am

#95 World Traveller: “…people buying iPhones…”

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

If people relinquish their land lines — more and more are doing just that — the increased cost is minimal considering all that an iPhone can do. Ask anyone who has one.

#110 felonious assault on 03.03.14 at 11:29 am

Some people have a fear of flying because they don’t understand how a plane can sty up in the sky. I have a fear of buying because I can’t figure out how Vancouver real estate price stay so high.

#111 rosie "moving forward" in the knowledge that, "this won't end well" on 03.03.14 at 11:48 am

#102 Unreal City

You can even get the t-shirt.

http://rlv.zcache.com/conspiracy_realist_t_shirt-r2cf7f5554c504970bf07e170df00389a_804gn_512.jpg

#112 Condo Minion on 03.03.14 at 11:50 am

Front page news this hour, PIMCO does not like what it sees in Cdn RE:

http://www.theglobeandmail.com/report-on-business/top-business-stories/pimco-sees-30-slump-in-canadas-housing-market-in-time-cuts-holdings/article17194498/

#113 Smoking Man on 03.03.14 at 12:07 pm

John Baird is ruling out military intervention…

Ha no kidding, would me like Woody Allen asking Hulk Hogan to step outside…

#114 High Plains Drifter on 03.03.14 at 12:12 pm

Get ready for the refugee rush Toronto. Who knows, maybe people fond of the north shore of the Black sea can become fond of the north shore of Lake Ontario. Meanwhile back in frozen Alberta, news of war is going to make our anemic pulse start to pound. Let us remember how profitable the public hanging of Saddam Hussein was to the cognizant.

#115 fixie guy on 03.03.14 at 12:17 pm

#17 KommyKim : “Any fed govt worker hired before 2013 can still retire at 55 if they have enough time in. Boomers win again.”

A twenty year old who started with the fed in 2010 becomes a boomer? Or 2000? 1990? 1980? That’s some fine (paranoid) alchemy there, Kim.

#116 airhead princess on 03.03.14 at 12:19 pm

“unbalanced on 03.02.14 at 8:14 pm
For the Airhead Princess. Nice name you have. Something like mine. Whoa is mee, whoa is mee! I just love it when people complain about everything. Maybe you should try and do something about it.”

The fact is that something is being ‘done about it’….albeit slower than we’d like. It has taken several elections and a whole lot of grief to pry the Liberal bandits out of their holes and get Canada back from the brink of a civil service elite dictatorship.

We see progress every year as our government claws back the privelages that union/civil service Liberal elite had carved out for themselves on the backs of everyone else. We still need to uproot Trudeaus Charter of Tears and rip away the 1970’s appointed Liberal judiciary and fire all the Liberal university professor professional Liberal activists…..and get rid of the Liberal mentality all together so that this country might progress.

I believe this will happen in the next election cycle when Harper takes his victory lap and becomes Canada’s laongest serving PM. His legacy will be to have taken Canada out of the nightmare of the civil service dictatorship. We will see all civil service pensions cancelled and they will collect CPP like everyone else.

#117 kommykim on 03.03.14 at 12:38 pm

RE:ETFs tend to carry a lot of hidden fees. At BMO, they charge you $9.95 (NOT including the MER or HST) just to buy an ETF, and then another $9.95 to sell

Those are the trading fees at BMO Investorline. It is the same fee they charge to buy/sell stocks. Pretty much all the big bank discount brokerages charge the same trading fees, though some have lower fees. Other brokerages such as Qtrade give you free trades on some ETFs (With conditions).
But, yes, if you use ETFs in a small account you need to avoid trading too much. Otherwise the fees start to exceed that of a mutual fund. ie: Buying $100 worth of an ETF is just dumb because $9.95/$100 = 9.95% fee.

#118 Yo on 03.03.14 at 12:39 pm

PIMCO, one of the largest funds in the world, just cut their exposure to canada by 50% in their $250B fund (from 4% to 2%) because of concerns of a housing bust. That kind of move just doesn’t happen without allot of thought and analysis.

So for people to leverage up and change their whole lives just to own a house, is really just financial suicide.

#119 kommykim on 03.03.14 at 12:40 pm

RE:#115 fixie guy on 03.03.14 at 12:17 pm
#17 KommyKim : “Any fed govt worker hired before 2013 can still retire at 55 if they have enough time in. Boomers win again.”
A twenty year old who started with the fed in 2010 becomes a boomer? Or 2000? 1990? 1980? That’s some fine (paranoid) alchemy there, Kim.

You are correct. I was just piling on the bandwagon of bashing the boomers. It is a popular past time on this blog and I got carried away.

#120 World Traveller on 03.03.14 at 12:50 pm

109 Daisy Mae on 03.03.14 at 11:12 am
#95 World Traveller: “…people buying iPhones…”

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

If people relinquish their land lines — more and more are doing just that — the increased cost is minimal considering all that an iPhone can do. Ask anyone who has one.

****

True that is a component, but our communication costs have gone up in the last 20 years. We used to have a landline for about $20 and cable for about $30. Now we have internet for about $40 p/m, cell phone for $30-$50 p/m or more and cable which can easily hit $100 p/m.

That is an increase of over 100%, which wages have not kept up and that is just one item in the basket. Food, gas, other living expenses have all exploded exponentially.

#121 Brutus on 03.03.14 at 12:52 pm

We are being overtaken by events. Kerry was planning to be in Kiev tomorrow afternoon.

Russia has just said it is prepared to attack Crimea at 0300 GMT Tuesday.

That is 10 p.m. tonight in Toronto.

http://www.bbc.com/news/world-europe-26424738

I believe the game changing event that will shake up everything, including our economy and real estate (which seems so trivial now by comparison) will shortly be upon us. Could be hours, days or even weeks, but that will make little difference.

Hug your kids.

#122 PJ on 03.03.14 at 12:54 pm

Gold 1500 CA$ … Too bad, I was hoping for GT’s 1000$ days prediction.

Back to the bunker I go.
PJ

I made no gold prediction. Obviously this is knee-jerk, and as temporary as the equity dip. — Garth

#123 airhead princess on 03.03.14 at 12:55 pm

After decades of liberal government where civil servants were no more than gluttons in the public trough Greece went broke……Now the government has raised property taxes so much to keep swill the pigs that property prices have collapsed as people hand over their real estate in lieu of taxes unpaid. This is the final ooutcome of a civil service dictatorship run amok…..get ready Canada if the socialists aren’t finally put in their place…..Remember…you can go beyond 100% taxation…eventually the greedy dictators will want your home as well. Greece and Spain and the rest of the PIIGS should be a lesson to everyone.

http://www.theguardian.com/world/2014/feb/28/home-ownership-greece-property-market

#124 Dupcheck on 03.03.14 at 12:56 pm

Stocks got a hit today from the news of Russia trying to invade Ukraine.

#125 BCD on 03.03.14 at 12:56 pm

#45 Detalumis on 03.02.14 at 8:58 pm

If you made it to age 65 in 1950 before they had any treatment for heart attacks and only rudimentary cancer care, you only lived on average 4 years less than you do today – so much for living oh so much longer. I made the “mistake” of buying a house in my 30s in an area full of retired people so I have spent the last 20 years observing their so-called lives.

The best thing to do is enjoy your life and travel when you are young not pile up your dough for a time when people don’t do all that much actual living otherwise it’s your heirs that will do your living for you.
_________________________________________

My dad dropped dead at 75. Healthy as a horse until his final days. He was not overweight, exercised regularly. Everyone said he was “too young to die”, but a look at longevity charts would suggest otherwise. The average age of men’s lives is 77-79. Needless to say the whole thing affected me profoundly. I used to worry about my bad habits, now I realize that life is for living. We hear about people dying every year taking down Christmas lights and falling off a ladder. If you enjoy investing and making money that’s great. . .but if it’s at the price of your emotional freedom then why bother.

#126 Son of Ponzi on 03.03.14 at 12:59 pm

SM

John Baird is ruling out military intervention…

Ha no kidding, would me like Woody Allen asking Hulk Hogan to step outside…
—————
But Woody Allen had a gun (gum).
“Take the money and run”

#127 Ottawa on 03.03.14 at 1:02 pm

Morning Briefing

Pimco sees 30% slump in Canada’s housing market in time, cuts holdings
These are stories Report on Business is following Monday, March 3, 2014.

Follow Michael Babad and The Globe’s Business Briefing on Twitter.

Pimco cuts Canadian holdings
The world’s biggest bond fund is taking a decidedly grim view of Canada’s housing market, projecting a marked decline over the next few years and slashing its holdings in the country.

http://www.theglobeandmail.com/report-on-business/top-business-stories/pimco-sees-30-slump-in-canadas-housing-market-in-time-cuts-holdings/article17194498/

#128 BCD on 03.03.14 at 1:09 pm

@#75
To anyone whose life is exciting enough to get fired for a washroom dalliance, I salute you!
_________________________________________

Come on. . .are there that many experience-deprived nerds on this blog?

#129 World According To Garth on 03.03.14 at 1:10 pm

USS Amerika – coming to a Kanaduhhhh near you !!

http://armstrongeconomics.com/2014/03/03/us-does-not-tolerate-free-speech-either/

#130 World According To Garth on 03.03.14 at 1:14 pm

First of all thanks for cherry picking one group of Govt Workers in one province. And once it is 100% funded by teachers you would be correct. Off the lst.

#106 -=jwk=- on 03.03.14 at 10:41 am
@ #56 Hey world according to garth

“The facts are, for every $1 that a retiree gets from the Ontario Teachers Pension plan, 11 cents comes from the taxpayer, 11 cents came from the teachers themselves and 78 cents came from the investment returns from the plan. It’s a very effective vehicle and by far the most efficient way to provide for the financial future.”

so from the article you linked, I guess you can take teachers off your hit list eh ?

#131 Bottoms_Up on 03.03.14 at 1:16 pm

#83 Rexx Rock on 03.03.14 at 12:33 am
——————————————
If you have a defined benefit pension, why would you save on top of that?

7.5% — represents proportion of employee gross pay that goes to DBP.

12%–the same amount, relative to net income.

Add in CPP contributions, and the contributions are 12% of gross pay, and 19% of net pay.

If 19% of your money (that otherwise would be in your bank account) is being put aside to fund your retirement, why would you (and how could you) save more?

#132 Hillbilly on 03.03.14 at 1:21 pm

comment # 32 Debt free

Don’t think so.

Russia pumps almost 10 million barrels a day of the most important traded commodity in the world and 45 % of Europe’s nat gas (where fracking is outlawed).

No one is going to agitate Mr. Putin into pulling that lever.

#133 cramar on 03.03.14 at 1:26 pm

Major Ford says TO is boomin’ and there are 150 cranes in the air!

http://www.citynews.ca/2014/03/03/toronto-mayor-ford-makes-late-night-cameo-on-kimmel-special-after-oscars/

Too bad reporters are not savvy enough to ask, “What happens when the boom ends with an inevitable bust?” I can just see the crackerjack major’s reply now, “You don’t understand it’s different in Toronto!”

#134 BCD on 03.03.14 at 1:31 pm

The fans have voted, the votes have been counted. Your American Troll Idol finalists are:

Airhead Princess
World According to Garth

#135 TEMPLE on 03.03.14 at 1:32 pm

#124 Dupcheck on 03.03.14 at 12:56 pm

Stocks got a hit today from the news of Russia trying to invade Ukraine.

Thanks for that incisive and timely bit of news.

#136 Joe_M on 03.03.14 at 1:34 pm

World according to Garth/Airhead princess…..if I want to read your crap I’d go to the “Fairpensionsforall website!

#137 Just some guy on 03.03.14 at 1:39 pm

Ref #82 – Happy Renting

I think that the idea of hitting one’s maximum earnings in the 50s may still be true in some types of work but I think that for most, this widely-held belief started to unravel in the late 80s. This may have been covered in earlier blog entries but my observation was that in large tranches of the manufacturing sector, automation was more and more widely used thus requiring fewer workers albeit more highly skilled and also requiring more education.

Simply put, not only can it be more cost-effective to automate, you also reduce your dependence on a highly trained workforce. This is not unique in history as we see if we consider the impetus for the use of firearms versus the use of longbow archers in the middle ages. It took a lifetime to train a longbow archer whereas any fool off of a farm could be trained in a matter of minutes to load and point a musket even though the earlier firearms were no match for the range and accuracy of a long bow. Economics dictated the use of technology and it became easier to assemble armies if you had a wider pool of people to draw from.

And of course, as we have seen in the fields of IT, law, finance, and others, more and more of the work can be off shored or even handled in this country by foreign workers. Even though we see the rise of a service economy, it is in no way sheltered from competitive forces that will dictate who will do the work and for how much. I am not against any of this as my portfolio includes some of the companies who chose to adopt these cost-saving methods and to reap the benefits as shown by increased profits.

For me, after I completed my engineering studies, it dawned on me one day as I looked up from my log tables and slide rule that what I was doing was not any less subject to market forces than any other type of job. It seemed to me that the only people who would be more or less immune would be tradespeople (and I was wrong about that as evidenced by the influx of foreign millwrights and other trades) and doctors (and most other healthcare professionals). So, from early on, my wife and I decided to make regular and substantial savings part of our financial plan. We could not accept the risk of waiting until our 50s.

And so, when Brother Garth talks about the need to save and invest, and to ignore the siren call of real estate, I say Amen. Indeed, I wonder sometimes if one of unspoken but deeply held beliefs of most real estate buyers is that if they can cling to this symbol from the past of prosperity that they will somehow be immune from the forces that are currently shaping our world. Good luck with that.

#138 Calgary Rip Off on 03.03.14 at 1:50 pm

“Happy lives don’t come from owning a house. They come from financial security.”

Having money helps with being happy yes. There is no direct correlation or causation with finances equalling happiness. x+y doesnt always = z.

And most people dont own a house. They own a mortgage. The difference being that when you dont rent you have more freedom and responsibilities. And especially in Calgary that likely is a good thing. I trust the bank more than I trust that some guy will arbitrarily decide to raise my rent.

Take note: Unrest in the Ukraine upsets the stock markets. That is also a headache for investors. So this idea that being liquid(does that mean that you need Imodium stat?) is nonsense. Yes you need finances should there be a crisis. Other than that, “liquidity” is overrated.

Now for the latest from the Herald: http://www.calgaryherald.com/business/real-estate/Calgary+housing+market+sets+time+price+records/9571808/story.html :“Even at high prices, homes are still relatively affordable, because people are making more money. It all adds up to confidence: confidence in the city, confidence in the market.”

A person being confident doesnt mean that they are happy! Bottom line is that the Calgary housing market is cutthroat and a disaster! The real problem is lack of land. And then there are these large spaces that were poorly planned, NoseHill “Park” with kilometers of blowing cold wind and all the “productive” farmland south and north of Calgary. That is the real reason why houses are so costly, there simply isnt enough space.

Best to just find a place, figure if you want the hassle of renting for prices same as a mortgage or buy one of the overpriced shacks if you can afford it.

This blog should be in the face of the Herald writers.

#139 Aj on 03.03.14 at 1:53 pm

I was quick to make my annual RRSP contribution this year for the same tax reduction purposes Garth listed. As someone under 30, I too am seeing this as an attrative means to reduce my income tax while allowing for extra cash for property ownership. My situation might be a touch different however, as a public servant with a guarenteed pension who intends to use this extra cash to purchase a stable, local business to help further diversify. But the key thing I took away today that should be one that everyone in my age braket should be flocking to RRSP’s for “or go through a maternity leave.” I will inevitably have a wife taking maternity leave probably in the next 5-10 years…..why shouldn’t we be planning for this by putting RRSP’s in place today to draw from during this time? If only they taught this in school….Thanks Garth

BTW #124 – Best advice I have is to look at investing in things like uranium – the Russians have a heavy control of the worlds supply…supply that could be impacted once the sanctions start flying. Suddenly that Sask. uranium junior play could be a whole lot more valuable.

#140 :):(Ying Yang on 03.03.14 at 2:00 pm

Another provocation, is everyone on steroids lately?

http://www.buenosairesherald.com/article/153510/britains-new-governor-of-the-falkland-islands-is-a-provocation

#141 World According To Garth on 03.03.14 at 2:26 pm

Was this a convention of the Govt Worker Troll Guild? I would dare you to do a poll across Canada and ask “which one of us trolls” would be more popular with their comments.

Fail

#134 BCD on 03.03.14 at 1:31 pm

The fans have voted, the votes have been counted. Your American Troll Idol finalists are:

Airhead Princess
World According to Garth

#142 Holy Crap Wheres The Tylenol on 03.03.14 at 2:36 pm

#214 Smoking Man on 03.01.14 at 10:48 pm

Holy Crap, Smoking Man I would have never have thought you were a fan of alternative country music or Americana folk. Well there’s hope for you after all. Have some of your JD, relax ease your seat back and put on the headphones.
P.S. Did you ever look into Carlos Castañeda?

#143 Junius on 03.03.14 at 2:37 pm

#123 Airhead princess,

Interesting that you use this article on Greece to assert that all of the causes of their collapse had to do with civil servant salaries and socialism. The article has no connection to your statement. Typical ideological drivel.

Clearly you have no idea why Greece, Italy, Spain, Portugal and Ireland have all been suffering. It has nothing to do with civil servants and socialism.

You did pick a good name though.

#144 Rational Optimist on 03.03.14 at 2:41 pm

132 Hillbilly on 03.03.14 at 1:21 pm

Debt Free is correct. Canada is comparatively more important than Russia, and we also enjoy the benefit of not shrinking in size.

You’re right that Europe depends on Russia for its natural gas, but Russia depends on Europe for a market for its gas. Who suffers more when one of Russia’s few sources of revenue is cut off? It’s springtime soon in Europe and, while it is painful for gas prices to go up, it’s not the end of the world. European demand for heat goes down in April, but the same cannot be said for the Russian demand for (for instance) food.

#145 Milkman on 03.03.14 at 2:45 pm

If you folks can’t figure out the Monday night “mystery” from what GT wrote already, you need more help than you’ll find here.

#146 BCD on 03.03.14 at 2:52 pm

This is American Troll Idol I am talking about. . .not Olympic Troll Gold Medal finalist. That honour was already announced a week ago on the Sochi podium–in case you are wondering, yes, you placed first. . .clearly you forgot about it. . .not surprising seeing as you spent so much time banging your head against the keyboard practicing for the main event.

BTW. . .no need to do a poll across all of Canada. Look back at this thread and a few others and you can see how “popular” you are with your comments.

Fail is right. You win at failing everytime.
____________________________________________
#141 World According To Garth on 03.03.14 at 2:26 pm
Was this a convention of the Govt Worker Troll Guild? I would dare you to do a poll across Canada and ask “which one of us trolls” would be more popular with their comments.

Fail

#134 BCD on 03.03.14 at 1:31 pm

The fans have voted, the votes have been counted. Your American Troll Idol finalists are:

Airhead Princess
World According to Garth

#147 happity on 03.03.14 at 2:55 pm

Meanwhile in the USA rent is the highest since 2008, the biggest component of cpi, so much for selling your home and renting.

#148 Holy Crap Wheres The Tylenol on 03.03.14 at 2:58 pm

#126 Son of Ponzi on 03.03.14 at 12:59 pm
SM
John Baird is ruling out military intervention…
Ha no kidding, would me like Woody Allen asking Hulk Hogan to step outside…
—————
But Woody Allen had a gun (gum).
“Take the money and run”

_____________________________________________

Its all talk, talk, talk. When the sky glows red, yellow and then finally white at night and our chilly March cold suddenly goes up 3000 degrees then the talking has stopped!

#149 airhead princess on 03.03.14 at 3:03 pm

“Clearly you have no idea why Greece, Italy, Spain, Portugal and Ireland have all been suffering. It has nothing to do with civil servants and socialism. ”

So tell us genius…..where did all the money go? Wasn’t it clearly stated in the European media that the main reason for the collapse of the PIIGS was profligate spending on the public service? Apparently the CBC is a bit out of synch with the mainstream. Oh right…the well known liberal mouthpiece has got another agenda…..and thats why so many CBC bobble heads got plum posts and got to act all ‘imperial’. I mean c’mon….how many millions did we get billed for Clarkson and the other politically correct ranter? How many food banks could have been stuffed with what it costs to support just those two CBC success stories?

#150 Son of Ponzi on 03.03.14 at 3:06 pm

# 144
Russia needs food.
———–
Exactamente. That’s why they need the Ukraine.

#151 reasonfirst on 03.03.14 at 3:06 pm

#38 HDJ on 03.02.14 at 8:44 pm

Victoria is one of the worst performing markets in the country….are you a realtor or just being silly.

#152 Josh in Calgary on 03.03.14 at 3:25 pm

#139 AJ,
I think you have a slight misunderstanding on how the whole spousal RRSP thing works. If you pile your money into an RRSP now it does nothing for income splitting as it will still go against your income when you take it out. You need to get the wife first. Then you set up a spousal RRSP and after 3 years she can take it out against her income, which will be low if she’s on maternity leave. Keep in mind that if she has RRSPs of her own then those come out first. If you don’t get all of this then you need to talk to a tax advisor. I’m fortunate in the fact that my tax advisor has known me since birth and still invites me over for Sunday dinner to see her grandkids.

#153 lurker on 03.03.14 at 3:34 pm

My game plan is simple, I pay down housing debt as fast as I can all year long. Come RRSP time, I borrow 20k back from the debt I paid down (much less than the total extra I paid). When I get my tax return I pay a good chunk of the 20k off with it and keep going.

Downtown Toronto house will be paid off in just over 2 years from now (by the time I’m 38). Then everything I was paying toward a house goes into investments to increase my cash-flow.

#154 Bottoms_Up on 03.03.14 at 3:35 pm

#130 World According To Garth on 03.03.14 at 1:14 pm
——————————————————-
You make absolutely no sense. Teachers work in the public sector and are therefore paid with tax dollars.

Instead of crapping on some of the greatest people in the world (Canadian teachers, doctors, nurses, police, firefighters, researchers etc.) why don’t you take a long hard cold look at yourself in the mirror and ask:

“why am I so bitter at life?”

#155 Smoking Man on 03.03.14 at 3:47 pm

#142 Holy Crap Wheres The Tylenol on 03.03.14 at 2:36 pm

#214 Smoking Man on 03.01.14 at 10:48 pm

Holy Crap, Smoking Man I would have never have thought you were a fan of alternative country music or Americana folk. Well there’s hope for you after all. Have some of your JD, relax ease your seat back and put on the headphones.
P.S. Did you ever look into Carlos Castañeda?
…….

Not yet, Carlos on to do list…

Trying to get my head around bottomless hole. The tune where there’s a hole behind the barn, he throws tractors, dead catle down the hole but never hears them it the bottom.

Goes down the hole with rope, not long enough. So he cuts his rope, has got to see what’s at the bottom.
………..

Interesting metaphor, so the question remains, how many out there have cut there own rope.

I’ve been free failing since the tender age of 4

It’s in the book.

#156 Nemesis on 03.03.14 at 3:48 pm

BusinessAsUsual in all the UsualPlaces as confirmed by today’s RoundUp of… yes, SaltyDogz – the UsualSuspects:

[SCMP] – Olá Lisboa! Chinese millionaires hog Portugal’s golden visas

…”Eight out of 10 golden visas were given to Chinese nationals, according to APEMIP, the country’s professional association of real estate agents. Chinese nationals received 433 out of 542 approved golden visas so far, followed by 23 for Russians, and 28 for Brazilian and Angolan citizens combined.

Introduced in October 2012, the golden visa programme offered a Portuguese residence permit to the immediate family of anyone who could invest one million euros in the country or create 30 jobs there.

Applicants could also qualify if they bought 500,000 euros worth of local real estate.”…

http://www.scmp.com/news/china-insider/article/1439337/chinas-millionaires-hoard-portugals-golden-visas

[NYT] – Ukraine Turns to Its Oligarchs for Political Help

…”It was a plan for stabilization,” an aide to one of the leaders, who was not authorized to discuss it publicly, said of the decision.

The ultra-wealthy industrialists wield such power in Ukraine that they form what amounts to a shadow government, with empires of steel and coal, telecoms and media, and armies of workers. Persuading some to serve as governors in the east was a small victory for the new government in Kiev.

A spokeswoman for Ms. Tymoshenko declined to discuss her role in devising the strategy.”…

http://www.nytimes.com/2014/03/03/world/europe/ukraine-turns-to-its-oligarchs-for-political-help.html?hpw&rref=world&_r=0

[UK Independent] – Exclusive: The Duke’s Lodge: The apartment block, the Candy brothers, and another chapter in the expulsion of Londoners

…”When the uniformed security men arrived – posted at the main entrance, along the corridors and outside apartment doors – some of the residents thought something terrible had happened. A siege, a kidnap, or a terrorist attack.

“We knew it was coming, but never thought it would be so over the top. This has been my home for 20 years. I’ve been happy here. But the security operation told me how much things are going to change. I’ve already said goodbye in my heart.”

There was no siege or attack. The description is from a 24-hour period late last summer when a 1930s block of flats in Holland Park, west London, was in the process of being bought by the luxury developers behind One Hyde Park, the Knightsbridge towers that have come to symbolise “lights out London”.

The capital’s most expensive apartment block is the most visible example of how the high-end property has become a global reserve currency rather than a place to live. Similarly, what has happened to Duke’s Lodge at 80 Holland Park encapsulates the residential hyper-inflation that is already turning boroughs into no-go areas for even the wealthy middle-class.”…

http://www.independent.co.uk/news/uk/home-news/exclusive-the-dukes-lodge-the-apartment-block-the-candy-brothers-and-another-chapter-in-the-expulsion-of-londoners-9164054.html

#157 Ralph Cramdown on 03.03.14 at 4:03 pm

#144 Rational Optimist — “Debt Free is correct. Canada is comparatively more important than Russia[…]”

Dude, we won the gold in hockey, but that didn’t come with the permanent seat at the UN Security Council, the veto, the space program, the blue water navy, the nukes, the land mass spanning ten time zones or the empire of satellite/vassal states.

#158 Mark on 03.03.14 at 4:04 pm

“A person being confident doesnt mean that they are happy! Bottom line is that the Calgary housing market is cutthroat and a disaster! The real problem is lack of land. And then there are these large spaces that were poorly planned, NoseHill “Park” with kilometers of blowing cold wind and all the “productive” farmland south and north of Calgary. That is the real reason why houses are so costly, there simply isnt enough space.

Sorry dude, your credibility went to zero when you claimed that there are somehow land shortages in the Calgary area.

#159 blase on 03.03.14 at 4:08 pm

For shits and giggles, check out zillow.com and type in Warren Buffett’s address, 5505 Farnam Street
Omaha, NE 68132
United States of America .

Fun to see what you can buy in the states, it’s absolutely astounding.

Then check out this chart: https://www.google.ca/search?q=canada+housing+prices+and+us+housing+prices+chart&tbm=isch&imgil=PttjaSmwFDRhNM%253A%253Bhttps%253A%252F%252Fencrypted-tbn3.gstatic.com%252Fimages%253Fq%253Dtbn%253AANd9GcQHlPNSRzKP1RXNFCDEPaftDEfposq99JnLIKBhxFoJZkOcdfKmiw%253B1590%253B1320%253BmRDUbgraHNFadM%253Bhttp%25253A%25252F%25252Fmjperry.blogspot.com%25252F2011%25252F08%25252Fchart-of-day-home-prices-usa-vs-canada.html&source=iu&usg=__Lp4tW2o2zlD0pKtxQDihsphnESA%3D&sa=X&ei=BuEUU4G5FMfqkAX-_oDgCg&ved=0CDIQ9QEwAw&biw=1680&bih=936#facrc=_&imgdii=_&imgrc=ZdKiySffW7u6fM%253A%3BLZqQQTU3gXAInM%3Bhttp%253A%252F%252Fwww.doctorhousingbubble.com%252Fwp-content%252Fuploads%252F2012%252F01%252Fcanada-us-price-composite.jpg%3Bhttp%253A%252F%252Fwww.doctorhousingbubble.com%252Fcanada-housing-bubble-ripe-for-popping-vancouver-housing-bubble-2012-pop-real-estate-canada%252F%3B800%3B558

#160 TurnerNation on 03.03.14 at 4:13 pm

It’s revenue season. OPP breathlessly release that distracted driving is public enemy #1. (After such fines were last week just doubled.)

75 die each year they say. Let’s see, 75 divided by Ontario’s pop – 7,000,000 say – is a tiny rounding error.
Tens of millions in fine money is not.

See the higher pyramid levels demand more of our money and the franternals oblige.

#161 West Vanner on 03.03.14 at 4:16 pm

#88 Unwashed

In the last 5 years I have accumulated $150K all of it liquid. You can keep your house and your Kia’s.

#162 Aggregator on 03.03.14 at 4:21 pm

There it is, the peak student loan bubble is in.

WSJ: Some people seek out low-cost student loans to pay the rent, rather than pay for a degree

#163 Rational Optimist on 03.03.14 at 4:27 pm

157 Ralph Cramdown on 03.03.14 at 4:03 pm

Okay, so maybe Russia isn’t quite as lowly as Canada. But it’s hardly a superpower. Last I checked, Russia’s president was promising that they might actually have a population increase for the first time in a couple of decades. A huge land mass can be a huge liability without the population to occupy it. Likewise vast quantities of 1970s-era military equipment can really come in handy, but less so when no youngsters are around to operate it.

Debt Free’s initial assertion stands: Russia’s economy is roughly the size of Italy’s (or Canada’s), and removing them from the global economy is not the end of the world.

#164 happity on 03.03.14 at 4:31 pm

Isn’t cowtown the largest city in N America by square feet? And still expanding?

Cowtown has blowing cold wind? No, really?

#165 DM in C on 03.03.14 at 4:32 pm

Anyone see this story? It’s about BMO, but could likely happen to any of the big banks in Canada.

http://www.cbc.ca/news/canada/british-columbia/bmo-customer-s-account-emptied-of-87k-as-bank-falls-for-scam-1.2555647

#166 PJ on 03.03.14 at 4:35 pm

Ah yes… I forget. Bloomberg and Goldman had made that prediction. Sorry.

#167 Holy Crap Wheres The Tylenol on 03.03.14 at 4:53 pm

#155 Smoking Man on 03.03.14 at 3:47 pm
#142 l on 03.03.14 at 2:36 pm
#214 Smoking Man on 03.01.14 at 10:48 pm
Holy Crap, Smoking Man I would have never have thought you were a fan of alternative country music or Americana folk. Well there’s hope for you after all. Have some of your JD, relax ease your seat back and put on the headphones.
P.S. Did you ever look into Carlos Castañeda?
…….
Not yet, Carlos on to do list…
Trying to get my head around bottomless hole. The tune where there’s a hole behind the barn, he throws tractors, dead catle down the hole but never hears them it the bottom.
———————————————————-

Sorry Smoking Man I’m an engineer so here is the answer to the physics of a bottomless pit. Enjoy!

http://scienceblogs.com/startswithabang/2013/02/27/the-physics-of-a-bottomless-pit/

#168 Holy Crap Wheres The Tylenol on 03.03.14 at 4:59 pm

#157 Ralph Cramdown on 03.03.14 at 4:03 pm

#144 Rational Optimist — “Debt Free is correct. Canada is comparatively more important than Russia[…]“

Dude, we won the gold in hockey, but that didn’t come with the permanent seat at the UN Security Council, the veto, the space program, the blue water navy, the nukes, the land mass spanning ten time zones or the empire of satellite/vassal states.
———————————————————-

But we have good beer, eh! That has to count for something in this crazy world!

#169 jess on 03.03.14 at 5:12 pm

what % of euros does the russian central bank hold?
41%?

#170 Debtfree on 03.03.14 at 5:24 pm

Russia’s invasion . The big winners are oil exporters . Do you think Putin didn’t know that he would drive up oil and gold prices . Harper must also be laughing out the other side of his face while rubbing his oily hands . As for being wrong about Russia’s insignificance look it up . Russia’s GDP is the same as Italy’s .

#171 Smartalox on 03.03.14 at 5:24 pm

@ Airhead Princess #149

Where did all the Euro money go in countries like Portugal, Ireland, Italy Greece and Spain? Well a large portion of it went to pay for massive urban renewal and infrastructure investments. The 2004 Olympics in Greece, paid for by Euro bonds. Sports complexes and mass transit in Spain and Portugal – paid for by Euro Bonds. The modernization of anything called a UNESCO world heritage site – paid for by Euro bonds. The tax breaks that made Ireland the ‘Celtic Tiger’ – paid for by Euro bonds.

All these countries with moribund economies and growth mortgaged their futures by borrowing against the debt carrying capacity of the European Union to pay for these marquee programs that none of them could afford individually, and that if left up to their own devices, they never would have embarked upon had it not been for the cheap money enabled by their participation in the EU.

The money was available, and as a result, the motivation to spend it followed. Was a portion of the money lost to graft and corruption? Probably. Were costs inflated due to mismanagement, and low productivity? Almost certainly. But the bulk of the value remains in those countries in the form of the infrastructure or policies that were paid for by those loans.

#172 jess on 03.03.14 at 5:33 pm

Who Is Provoking the Unrest in Ukraine? A Debate on Role of Russia, United States in Regional Crisis
democracy now
http://www.democracynow.org/
=
Klitschko the next pres.of ukraine?

#173 Blobby on 03.03.14 at 6:06 pm

@#73 : “Yes, the interest in a TFSA is free money on top of the savings in there. Gic at 2.25%”

2.25%?!?!

You ARE aware that’s LOSING you money arent you?

#174 Nemesis on 03.03.14 at 6:06 pm

#BusinessAsUsual #ToldYaSo

…”Meanwhile, an official document says the UK government will not curb trade with Russia or close London’s financial centre to Russians as part of any possible package of sanctions against Moscow.

The document, which was photographed as a senior official carried it into a meeting in Downing Street, says “the UK should not support for now trade sanctions or close London’s financial centre to Russians”.”…

http://www.bbc.co.uk/news/uk-politics-26415789

#175 Son of Ponzi on 03.03.14 at 6:10 pm

My vote is for Hunky Bill.
Best perogies at the PNE.

#176 World According To Garth on 03.03.14 at 6:12 pm

You wonder why Govt Works WASTE so much money. Repeat. Meeting. Repeat. Meeting. Repeat. Meeting.

I have said REPEATEDLY STOP CHERRY PICKING FRONT LINE WORKERS (of which I used to be).

You MUST be a admin/bureaucrat with me having to repeat this over and over.

154 Bottoms_Up on 03.03.14 at 3:35 pm

#130 World According To Garth on 03.03.14 at 1:14 pm
——————————————————-
You make absolutely no sense. Teachers work in the public sector and are therefore paid with tax dollars.

Instead of crapping on some of the greatest people in the world (Canadian teachers, doctors, nurses, police, firefighters, researchers etc.) why don’t you take a long hard cold look at yourself in the mirror and ask:

“why am I so bitter at life?”

#177 Smoking Man on 03.03.14 at 6:17 pm

My crystal ball is saying, gatho will talk about Pimco’s bet Canada Real Estate over by 20% in his tonight post.

Pimco had got a lot wrong recently..

And they have no metrics in there algos for herd dynamics…

But at least LaughingCon will have some hope….

#178 Russel on 03.03.14 at 6:24 pm

So, if I am stupid enough to buy in this market in Oakville. What should I do to minimize my losses. A semi with quick access to QEW, close to shopping and schools would be my guess. Will that work?

#179 Cici on 03.03.14 at 6:26 pm

Just in…time for Monday night:

http://www.cbc.ca/news/canada/toronto/canadian-real-estate-most-overvalued-in-world-study-says-1.2462374

#180 heineken on 03.03.14 at 6:32 pm

if this blog is a average of how knowledgeable Canadians are in world politics; we are doomed.

wakeup from the propaganda AMERICAN.
The true aggressor is Obama and his criminal regime.

Russia is a peaceful nation protecting its own interests.

#181 Son of Ponzi on 03.03.14 at 6:33 pm

Garth,
Almost nightfall.
Waiting.

#182 World According To Garth on 03.03.14 at 6:35 pm

And they DONT pay taxes. You can’t pay taxes with taxes and say you are “contributing” to the economy. Its recycled money.

I make 1000 bucks. The govt steals 60% after fees, taxes, not free Medical here in BC, property taxes, garbage, phony carbon tax and on and on and on.

I have 400 bucks left (which is why Kanaduuuuhhhhins are so poor). I SPEND that after tax dollars into the economy.

If a govt worker is paid with 100% tax money…….its just money they took out of MY POCKET that I would have spent into the economy had the govt not stolen it.

Govt does not Make or Earn money……they only steal it to benefit themselves with the exception of TEEEEENNNNNN PEEEEERRRRCEEEENNNNNTTTTT 10% of the workforce that are front line workers.

GOT IT ON THE FRONT LINE WORKER SHIT NOW?

jeeeeeeeez

Your rants are absurd. Worse, they’re boring. Happily, they’re over. — Garth

#183 Brutus on 03.03.14 at 6:36 pm

Can Ukraine call for, and expect, help from the west?

Did you know this………

Ukraine is a signatory to the 1994 Partnership for Peace Framework Document.

This specifically provides that if its territorial integrity is at risk it can call on NATO for military assistance.

This creates a binding obligation on the part of NATO.

Source:

George Joulwan, NATO Supreme Allied Commander, Europe, 1993-1997

(as confirmed today in his interview on CNN)

#184 Shawn on 03.03.14 at 7:04 pm

World According to NOT Garth

I wonder why you do your posts backwards putting items you respond to at the end rather than at the start like everyone else?

P.S.

My my, you really are a bitter and jealous one. I am sorry for whatever has happened to make you feel that way.

How will bitter attacks against government workers make you any better off? There are certainly some grains of truth in what you say about government workers but much of it is off-base and in any case what does being so bitter and jealous about it get you?

It’s not the fault of any particular government worker that society decided to compensate them rather nicely.

#185 4 AM Sunrise on 03.03.14 at 7:08 pm

#28 unbalanced on 03.02.14 at 8:14 pm
For the Airhead Princess. Nice name you have. Something like mine. Whoa is mee, whoa is mee! I just love it when people
—————————————————–

I held out for a long time on this, but I can’t help myself:

“Whoa Is Me” is a Down With Webster song:

http://www.youtube.com/watch?v=71S9ou2gcqE

You probably meant “woe is me”.

#186 Junius on 03.03.14 at 7:19 pm

#149 airhead princess,

First of all, the policies that got the Eurozone into trouble had nothing to do with socialism or civil servants. If that was the case Denmark, Sweden and Norway would have been the problem states.

The policies are those of Neoliberalism which is the word used to describe policies like free trade, deregulation and all the other economic policies starting with Milton Friedman and their like in the 80s (and earlier) popularized by Reagan and Conservative governments along with multi-national corporations. However whenever these policies fail instead of acknowledging the flaw in their ideology they usual blame someone in the government like civil servants – which is what you did.

The fundamental problem in Europe is that it is a shotgun marriage of unequal economies in terms of productivity and scale AND is a monetary union. The first two conditions are not unusual but usually currency fluctuations address the imbalances in the long run. In the case of the European Union there cannot be a currency fluctuation because they are all tied to the Euro.

The other reason the PIIGS are in such crap is that when they started running trade deficits instead of adjusting in other ways they simply took on more and more debt. However (as in the housing booms) this was encouraged by the main exporter Germany who actually financed the debt. And I should also mentioned that these countries were encouraged to fudge economic data for EU admission, loans, etc. and helped by such firms as Goldman Sachs (Greece). Does this sound familiar? Same, same.

Yes, there is corruption. Sure, there were overpaid people in governments, corporations, etc. However all of that is nothing compared to the underlying causes.

My issue with your comment is that Conservatives always want to blame government workers or the CBC or something for our debt woes. This is crap when it is a small part of the issue.

Look at the US. The Afgan and Iraq wars combined are no estimated to cost the US somewhere between 3-5 Trillion dollars before all costs are done. You could have paid all government workers a million a year and still spent less. Now the Cons (Republicans) won’t raise the minimum wage and want to cut Social Security.

The reality is that our so-called Conservative governments are ideologically bankrupt and responsible for this mess.

#187 Junius on 03.03.14 at 7:21 pm

#171 Smartalox,

I don’t buy the infrastructure argument. Remember that one of the worst is Italy and they haven’t had anything since Turin in 1992.

These are complex issues and they can’t be distilled down to simple answers but I still think the problematic nature of the economic union has simply been exposed by the debt crisis.

#188 Bill Gable on 03.03.14 at 7:22 pm

Pimco cuts Canadian holdings:

The world’s biggest bond fund is taking a downbeat view of Canada’s housing market, projecting a decline over the next few years and slashing its holdings in the country.

Ed Devlin, who heads up Canadian investing for Pimco, told The Globe and Mail’s Tara Perkins that the company expects a decline in house prices of possibly 10 per cent to 20 per cent in real terms in about three to five years.

Link: http://tinyurl.com/mp3sthw

#189 mitzerboy on 03.03.14 at 7:28 pm

It all gets a little worse Monday night….. You’ll see.

I can see now Garth….it took me a re-read

#190 TurnerNation on 03.03.14 at 7:29 pm

D’oh, over on the Least Coast.

http://www.cbc.ca/news/canada/nova-scotia/michelin-job-cuts-at-granton-plant-devastating-1.2557903

“Michelin, he said, is one of the largest corporate taxpayers in the region. There’s also a fear that if workers and their families leave the area, a glut of homes will be put on the market, leading to plummeting housing prices and assessment values”

#191 Ralph Cramdown on 03.03.14 at 7:36 pm

#183 Brutus — “This creates a binding obligation on the part of NATO.”

You’re dreaming in Technicolor. No state that isn’t a full member of the alliance gets THAT benefit… Oh, you meant just an obligation to consult? Yeah, sure, whatever.

Article 8:

http://www.nato.int/docu/comm/49-95/c940110b.htm

Two to three weeks of blowhardism (finally, something John Baird is good at), and it’s back to the way we were. Russia may be poor-ish, but income inequality is vast, meaning there’s a lot of rich Russians with friends, property and business everywhere important, and a lot of European luxury suppliers (and other large companies) selling into Russia. 2.8% of the world’s GDP and a critical supplier of energy to Europe isn’t going to get shut out of anything big for long. The paralympics boycott and a temporary freeze-out at the G7/8 will be about it.

Gold up 2.5%, Moscow exchange down 10%. The market shrugs.

#192 HDJ on 03.03.14 at 7:49 pm

#38 HDJ on 03.02.14 at 8:44 pm:
Everyone who visits his blog has repeatedly been informed that it’s wrong to believe their city is different when it comes to real estate values. However, have a look at this picture (link below) and you’ll see why good old Victoria, in a very positive real estate way, just ain’t like any other part of the country.

http://stevengoddard.files.wordpress.com/2014/01/screenhunter_1153-jan-01-05-02.gif

#151 reasonfirst on 03.03.14 at 3:06 pm: Victoria is one of the worst performing markets in the country….are you a realtor or just being silly.

#193 Nemesis on 03.03.14 at 7:51 pm

@SonOfPonzi/#175

HunkyBill’s! Egads, I’d forgotten about those!

TotallyTheBest.

#194 HDJ on 03.03.14 at 7:57 pm

Sorry – in comment #184 I omitted my response to “reasonfirst”.

Mild weather has a lot to do with the high cost of realestate in Victoria. This winter’s extreme low temperatures across the rest of country have surely made countless Canadians wish they were living on the West Coast. Continued migration to this relatively balmy neck of the woods is inevitable.

#195 Nemesis on 03.03.14 at 8:08 pm

I know I’ll be punished for this… one way or another…

But was it just Nemesis snickering like Beavis&Butt-head during last night’s AMPAS 2014 ‘commercial breaks’…

JCP CampaignSlogan: “When it fits… you feel it!”

Pepsi CampaignSlogan: “Say hello to my little friend!”

Samsung CampaignSlogan: “From big to small… the most incredible things happen on a SamSung.”

Perhaps it was just the juxtaposition?

SmokingMan would do well to heed RobertDeNiro’s introduction to the scribblers’ Oscars, though:

“The mind of a writer can be a truly terrifying thing. Isolated, neurotic, caffeine addled, crippled by procrastination and consumed by feelings of panic, self-loathing and soul-crushing inadequacy. And that’s on a good day.”

#196 Victor V on 03.03.14 at 8:13 pm

#179 Cici on 03.03.14 at 6:26 pm

Just in…time for Monday night:

http://www.cbc.ca/news/canada/toronto/canadian-real-estate-most-overvalued-in-world-study-says-1.2462374

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

Just in? That news is months old…

#197 Brutus on 03.03.14 at 9:25 pm

Ralph #191

“The market shrugs”

Check your history. The response was very similar in the days after June 28, 1914.

37 days later, much different.

How did that all work out?

Those who don’t learn from history are doomed to repeat it.

Thanks, but I’ll take the Supreme Allied Commander’s interpretation over yours, since he was directly involved and knows better what the accord actually means.

You seem like someone who likes the comfort of playing a nice linear game of checkers, the way you line up your neat little factoids.

Except the geopolitical game here is chess.

Oops on your kind of thinking!

I am watching out especially for what is being communicated by the neighbouring states, some in NATO, about how this affects them. Multiple possibilities exist there, lots of lateral pressures that cannot be underestimated on the large powers and the bigger picture.

Tonight’s news is getting worse.

http://www.thetimes.co.uk/tto/news/world/europe/article4022301.ece

#198 one_of_the_fools on 03.04.14 at 11:27 am

Yes I am one of those. Half fool/first time home buyer. Bought at the peak of the market in Ottawa (2012) partly motivated by my Canadian wife (she is great but we have very different expectations). Paid 385K for a bungalow with a 170K down. Yes I know we are far from being the average first timers but don’t feel good about our financial decision. Today mortgage is down to 178K but I am being terminated at work next month. Wife job is stable earning ~90K. Not looking for anyone’s pittty. Will put myself together and move on. Yet trying to share my experience with others out there. Be wise investing your money. A house is just a box to live in that actually costs a lot to run. Do not sacrifice your freedom for a non-liquid asset that anchors you tight. Better learn how to invest more wisely. Will keep your brain and relationship in a much more healthy state.

#199 Aj on 03.04.14 at 1:46 pm

@Josh #152 – I appreciate the point of reference and your advice on getting an advisor – which is something that shouldn’t be understated. While I don’t have a wife yet, I am planning to get married in the next couple of years and we are planning on our end within that idea of a spousal RRSP.