Why I suck

DOOR modified

When I lost my mind and went into politics, a quick lesson was learned. Never, ever listen to what people say about you. Those who think well of you rarely articulate it. People who think you’re a threat and worthy of castration with pinking shears, never get tired of talking about it.

It’s always easier to be anonymous, of course, to shut up and keep your head down. But that’s not me. So critics abound. In fact there are whole web sites devoted to tracing my lineage from doofus to dickhead, authored by people who sure need to get out more. But I ignore them.

Lately CREA’s tried to clip my wings, as you know. And yesterday I stumbled into a spirited discussion on my inadequacies and lethal tendencies on some site about red flags. Go figure. It’s always a surprise when I see people getting flummoxed over a blog like this – free, selling nothing. Is it heresy to write things not conforming to the mainstream view?

Guess so. But somebody has to. The media’s given up.

These days (as this pathetic blog chronicles) most people are in lousy financial shape. They believe there are three choices when it comes to investing money: GICs (and other banky stuff); stocks; or real estate. In time they learn bank products are self-serving and mostly inadequate. Stocks are just scary. And your parents want you to buy a house, because they did.

As a result, 80% of TFSAs are now ‘invested’ in cash and seven of ten people own houses. When it comes to couples, 82% own a house. For Boomers, it’s 85%. This stunning over-investment in one asset and resulting lack of diversification is a consistent theme of this blog. It’s dangerous. Especially now, when the average SFH in 416 just cracked the $900,000 level, and in light of US interest rates poised to increase in the Spring (says Fed boss Yellen).

Owning property is fine. Having all your money there is suicidal. It’s like throwing everything in a single stock, then borrowing twenty times that amount to buy more. So many middle-class people in so many countries have learned exactly this, and yet Canadians think they’re immune. So some of them hate me for stating the obvious.

Now, here’s a small example of what I’m up against.

PROVINCE modified

The article plastered on the front business page of the Vancouver daily this week said this:

VANCOUVER — A trillion-dollar transfer of wealth as baby boomers come into their inheritances will help Vancouver’s real-estate market, a new study finds. Sotheby’s International Realty Canada’s Housing and Economic Outlook predicts prices will improve in Canada in part because postwar babies are now coming into their inheritances. “Another important influence on Canada’s housing market is the unprecedented wealth currently being transferred between generations, with $1 trillion estimated inheritance to be received by baby boomers in Canada over the next 20 years,” the report reads. “According to the latest figures, Canadian baby boomers make up 42.4 per cent of the population and will individually average $56,000 in inherited capital.”

Wow. A report. And a headline that’s definitive: “Analysts bullish about Vancouver real estate market as massive transfer of baby boomer wealth looms.” Of course, it’s a sham. The ‘report’ is a marketing piece generated by a real estate company, based not on original research but mostly on Googling.

Here’s the methodology: “The information contained in this report references data from Statistics Canada, the Bank of Canada, the Canadian Real Estate Association, Canada Mortgage and Housing Corporation, MLS boards across Canada and other secondary sources…This report is published for general information only and not to be relied upon in any way.”

In fact the only ‘analyst’ the reporter could find to validate the report was a credit union economist who said, “It is plausible that they (Boomers) will spend it on real estate. That could support real estate values, provided that is where the new wealth is spent.”

Huh? It’s ‘plausible’ the massive inheritance thingy ‘could’ support real estate? And this earns a Dewey-defeats-Truman headline?

Well, as I said, a small example of the daily shamming that’s reduced critical thinking to tapioca. The people around you – at work, at the bus stop, on the subway, in traffic, at school – they want simple. A one-step financial plan that’s eternal and constantly reinforced by their friends, parents and media. It’s bred a society in which almost everybody’s invested in the same thing. So how can it possibly be risky?

So, if you think I suck, be comforted that you’re not alone. Beyond that, I’d be alarmed.

242 comments ↓

#1 World According To Garth on 03.21.14 at 6:15 pm

1 degree Celcius overnight here in Global Warming Carbon Tax BC

Keep drinking the Govt Worker Kool-Aid sheeple. BAAAHAHAHAHAHHAA

Then there is the founder of Green Peace saying its BS:

http://www.globalclimatescam.com/2014/02/greenpeace-co-founder-no-scientific-evidence-of-man-made-global-warming/

#2 Alberta Ed on 03.21.14 at 6:21 pm

That story proves that the Province (and the Calgary Herald, and most other MSM) is no longer a real newspaper. Ditto the freebie tabloids stuffed with fliers that land on your porch. Most ‘reporters’ (and few qualify for that designation these days) don’t have the business background, the interest or the editorial support to dig into the RE fairy tales that come across their desks. Sad.

#3 Lala on 03.21.14 at 6:24 pm

First…..for today, it feels good….maybe

#4 Greg in Oakville on 03.21.14 at 6:25 pm

Hi Garth, re: “When I lost my mind”

Thanks for trying!

With luck more good people will give it a try, to help others too.

#5 Derek R on 03.21.14 at 6:29 pm

If I want to see cheerleaders, I’ll go to a game. If I want to know what’s going on in the Canadian economy I’ll come here. Keep on doing what you’re doing. It’s appreciated.

#6 Coho on 03.21.14 at 6:29 pm

Garth you have nothing on Harper in regards to sucking. :)

This link is a definition of what sucks. Our PM declaring that Canada, the Canadian Government, and Canadians are in support of Ukraine’s new government.

These characters have been described as neo-nazis. Their hatred of ethnic Russians (who make up a big portion of the population of Ukraine) is clearly evident. This can’t end well!

Are we to believe that this party which currently holds only 40 seats out of about 450in the Ukrainian parliament was somehow swept into power by a grass roots movement? Do we think Ukrainians of Russian heritage which make up a large part of the population clamoured for these people to lord over them?

The Crimean vote of 97% in favour to separate and become part of Russia tells the story of how warm and fuzzy they feel about this western sponsored group which overthrew an elected sitting government. Cripes what devil will the West not sleep with if the former says it’ll serve its interests. There are consequences to making deals with the devil.

As for Harper, maybe he should speak for himself.

http://www.euronews.com/2014/03/19/ukranian-tv-boss-assaulted-and-forced-to-resign-by-far-right-svoboda-mps/

#7 First on 03.21.14 at 6:36 pm

First

#8 Linda Mulligan on 03.21.14 at 6:36 pm

That massive transfer of wealth thingy – I think it is limited to the 1% or at best, the top 10%. I know I’m not getting any ‘massive’ transfer of wealth (yep, my parents are deceased which is how I know!) & just out of curiosity, since people are living longer does it not follow that a considerable chunk of said ‘massive’ transfer might be swallowed by equally ‘massive’ long term care costs for those who potentially leave an inheritance to their children? Plus, when did an inheritance become a sure thing? My thought is, counting on receiving an inheritance is just a way to set yourself up for disappointment & maybe prevent you from scratching up your own long term cash flow. Be a lot of long faces as the will is read & you find out the parents spent THEIR money. Key word that – it properly defines whose money it is & those who think they are entitled may find those thoughts less than comforting in the end.

#9 Second on 03.21.14 at 6:37 pm

Second

#10 Dr. Sex U Al Intellect on 03.21.14 at 6:37 pm

I am a bit skeptical that there are almost 18,000,000 inhertitances worth 56,000. I know my own situation is exactly the opposite having subsidized my living parent for about twenty-five years now and can’t see how that’s going to change. It will be me on the hook for the final expenses also and I’m quite sure I’m not the only one in this unwanted and draining position.

#11 hohoho on 03.21.14 at 6:40 pm

it’s more like a trillion dollar worth of RE being transferred as boomers inherit 100 year old houses, with associated property tax and maintenance costs etc

#12 Dorothy on 03.21.14 at 6:41 pm

If most of the Boomers already own Real Estate, why on earth would they (at this stage of their lives) use an inheritance to buy even more Real Estate? It makes no sense.
Most Boomers (of which I am one) plan on either staying in place, or downsizing when they retire. Neither of which involve using an inheritance. Any inheritance Boomers do come into, will most likely be tucked away for use in their upcoming retirement, NOT used to buy more Real Estate.

#13 Steve French on 03.21.14 at 6:42 pm

First!

ohhh yaaaaa!!!

https://www.facebook.com/pages/I-Hate-when-people-comment-on-popular-groups-posts-and-say-First-Second/230980778058

#14 Eh? on 03.21.14 at 6:42 pm

Baby boomers are just coming into inheritance now???
Boomers are what, 50-68 years old now (based on being born 1946-64) and their post war parents started families, on average, at the age of 25?
Boomers parents are therefor currently 75-93. Or aka, mostly already dead and already passed on their inheritance years ago.
This report is complete rubbish.

#15 rodster on 03.21.14 at 6:44 pm

INDEXING FUNDS WITH A BALANCED BOND MARKET IS WHERE IT’S AT
N’ EST-CE PAS?

#16 Shawn on 03.21.14 at 6:47 pm

Independence

With financial independence can come the freedom to speak the truth as one sees it.

Very few people have both the desire and the freedom to speak thier mind.

Keep at it.

#17 Eh? on 03.21.14 at 6:50 pm

Had to follow up regarding the stupidity of this article…
My dad is a boomer, born in ’51. Both his parents lived approximately the average Canadian life expectancy.

He received his inheritance in 1997…
This report is out of touch by nearly 2 decades.
I can only presume it was intended to refer to when GenX will be receiving its inheritances over the next 20 years, not the Baby Boomers.

Incompetent writing regardless…

#18 hohoho on 03.21.14 at 6:52 pm

in other news, SCC handed out a 6-1 bombshell decision today, the Harper government is “genuinely surprised” that anyone dares to say No.

#19 DV8 on 03.21.14 at 6:56 pm

my Father in -law just sold his condo for 319k .he paid 317k 3 years ago then pumped 35k to finish the basement ,bummer

#20 DR. WAYNE on 03.21.14 at 7:03 pm

There otta be a law against this kind of bull sh+t … uh, not you Mr. Turner …

#21 johnny d on 03.21.14 at 7:04 pm

Heard some guy on BNN today saying the Canadian dollar is gonna get as low as 70 cents in the next couple years or so. Any thoughts on that?

#22 Cici on 03.21.14 at 7:04 pm

Garth you are the man!

Thank you for being the most lucid and honest voice in Canada in terms of real estate analysis, politics and wealth building.

You deserve your “Top Canadian Finance Blog” certification.

And we all love, so no one else matters ;-)

#23 Cici on 03.21.14 at 7:09 pm

Oops, meant “we all love YOU…”

In any case, your detractors are lewd and discreditable:

http://www.ctvnews.ca/politics/harper-government-genuinely-surprised-by-nadon-decision-1.1739280

#24 Buy? Curious? on 03.21.14 at 7:18 pm

Yes Garth! I knew there was a reason I gave up going Brampton Couples Social Night *wink wink*. I love hearing stories about how the establishment scurries under the spotlight.

Listen, I wish you the best. You’ve helped lots of people and brought beards back into fashion but get out, man, while you can. You know how CREA rolls. Small pee-pee mafia. They’ll mess you up via legal channels and “leaked” press releases.

You don’t suck.

https://www.youtube.com/watch?v=HYU47cfNayA

Please vote Rob Ford. Not for me, but for the children.

#25 AisA on 03.21.14 at 7:19 pm

Anyone that has never been run over by a market just can’t comprehend the warnings. Apparently that is around seven out of ten people in this country.

You and I and quite a few of the frequenters of this blog will know them by the sight of their jaws dragging on the pavement and the the frozen look on their faces, not unlike what happens when the hot water runs out in the shower.

Beyond the real estate horror show, there is another travesty befalling this nation that it may not be able to recover from. The middle class is quickly being replaced by the government class. This is what happened to Greece.

#26 Retired Boomer - WI on 03.21.14 at 7:21 pm

This pathetic blog has given you all golden advice for the price of your time to read it, understand it, and act upon it.

There are a few posters who rather obviously knew beforehand, or absorbed, and changed their investing ideas. Thanks for being here.

Even The Cat Food Lady, who has stated her road is not an easy one has learned here, and is better off for it by her own admission.

We live in an interesting world of instant access to ideas, facts, and opinions, yet so few seem able to discern between those categories.

Maybe that is no longer discussed, or taught in public education? Ditto for basic economics, investing, and debt.
It’s simple – only when you understand it.

#27 Buy? Curious? on 03.21.14 at 7:22 pm

Damnit! I hate when I leave verbs out! How does Smokie write so many posts without any sense of embarrassment?

If my wife knew how poorly I expressed myself, espescially on this god-forsaken blog, she’d be pissed.

#28 GUnit on 03.21.14 at 7:22 pm

You don’t suck Garth, you ROCK!

#29 A Yank in BC on 03.21.14 at 7:23 pm

Somebody can’t add. Most baby-boomers have already seen their inheritances. Mine was 15 years ago.

#30 Van Isle Renter on 03.21.14 at 7:24 pm

#1 World According To Garth on 03.21.14 at 6:15 pm
1 degree Celcius overnight here in Global Warming Carbon Tax BC

Keep drinking the Govt Worker Kool-Aid sheeple. BAAAHAHAHAHAHHAA

Then there is the founder of Green Peace saying its BS:

http://www.globalclimatescam.com/2014/02/greenpeace-co-founder-no-scientific-evidence-of-man-made-global-warming/

+++++++++++++++++++++++++++++++++++

You’re spot on. A couple of days ago the American Association for the Advancement of Science published a report stating that Global Warming was as certain as the tie between tobacco and cancer. The MSM ran with it and Alarmists all over the world pee’d themselves with glee as Apocalypse was nigh. The report was shredded as being idiotic and unsupported by several knowledgeable researchers within minutes of it’s release, but by then the MSM did it’s job and spread the garbage thick and deep.

Now the story is coming out that the “report” was written by a bunch of paid for hardcore greenie media spin doctors. They must be taking lessons from CREA. And the BC government, likely the same eco-jihadists that collect and dole out BC’s carbon tax lucre to whoever fits the eco-jihadists pistol. Science to welcome, only ideology.

I swear to God people are nuts out here. Good thing I’m liquid and I can ignore them.

#31 Cici on 03.21.14 at 7:31 pm

#1 World According to Garth

Sorry honey, but it’s YOU who drank the Kool-Aid – From the official Greenpeace website:

“While it is true that Patrick Moore was a member of Greenpeace in the 1970s, in 1986 he abruptly turned his back on the very issues he once passionately defended. He claims he “saw the light” but what Moore really saw was an opportunity for financial gain. Since then he has gone from defender of the planet to a paid representative of corporate polluters.”

http://www.greenpeace.org/usa/en/media-center/news-releases/greenpeace-statement-on-patric/

Patrick Moore is not unique or special: most of the so-called ecologist hippies in the 70s morphed into profiteer capitalists. He’s not an environmentalist either; he’s a paid spokesperson backed by big-business monkeys.

#32 Daisy Mae on 03.21.14 at 7:32 pm

“Lately CREA’s tried to clip my wings, as you know. And yesterday I stumbled into a spirited discussion on my inadequacies and lethal tendencies on some site about red flags. Go figure.”

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

Their insecurities are showing. They feel threatened ’cause you’re such a bad hombre….

#33 saskatoon on 03.21.14 at 7:32 pm

#17 Eh?

This is not incompetent writing.

It is extremely competent propaganda.

You just have to look at it the other way around.

#34 Freedom First on 03.21.14 at 7:35 pm

One of the “4 Agreements” is “Don’t take anything personally” (just google: “thefouragreements”). It is easy to see that how Garth has lived is life, and continues to lead his life, he has mastered the 4 Agreements. In trying to live the 4 agreements myself and being aware of what they are it is very easy to see who is devoid of character. It is the same thing as being aware of the sound financial principles that Garth teaches, and then being able to see who are the: financially insane, financially illiterate, financially bullied, financially bankrupt, financially entitled, and, the biggest one of all……”The financially unethical”, who I just absolutely love to see Garth give a public pulling back of the curtain of deceit they all hide behind. Garth, I am glad you have your mind back, and may your bionic ankle and your leg be even more kick a$$ than before the dog walk.

#35 frank el skanko on 03.21.14 at 7:37 pm

The article did exactly what it was supposed to do; to temporarily perpetuate the myth that housing will continue its assent by using somewhat possible, poorly researched, hypothetical situations.

#36 DaleFromCalgary on 03.21.14 at 7:38 pm

The major fallacy is that us Boomers are about to be blessed with $1 trillion of inheritance, when in fact the Greater Generation has mostly already passed on their wealth to us. The GenX kids are in for a disappointment since the Boomers mostly blew the inheritances.

I was executor for my mother and an uncle. When you die, your estate is “deemed disposed of” and taxed as income. There are ways around it such as trusts, but very few people use them. So let’s be small-c conservative and assume that as the Boomers die off, the taxmen get about 10% to 20% of that $1 trillion.

#37 2CntsCdn on 03.21.14 at 7:47 pm

I agree with most bloggers here …. that most of the inheritance cross-over has already happened ….. I’m guessing 2/3 to 3/4 … by the definition of a “boomer” and the avg. life expectancy of men and women from the 1920’s to the 30’s (boomer parents birth years).

And why does the RE machine think this will automatically be pumped into more and higher priced home purchases? And even if it does …. how is that good? Delaying the inevitable down turn another year or two? And how would evaporating Boomers last chance at retirement (real live cash) be a good thing? A pointless article. But something to put in the paper between the advertisements. And some water cooler or bar chatter for idiots.

#38 coastal on 03.21.14 at 7:49 pm

“It’s always a surprise when I see people getting flummoxed over a blog like this – free, selling nothing. Is it heresy to write things not conforming to the mainstream view?”

Free ? Selling nothing ? But Garth, I always read on the Victoria Housing blog when your name pops up that you’re the equivalent of JK Rowlings multi millionaire with all those mega book sales you make on imaginary hocus-pocus built on 5 years (or even 10 years by some) of consistently wrong predictions.

Oh yeah, and you run a financial adviser business to boot ! What is Canada coming to to allow such a scoundrel to get away with such larceny ? How despicable…. especially when I read this from a….. real estate agent. Aren’t those guys “salesmen” with a three month course ? Thank heavens there’s no bias on THAT blog. ;)

#39 Daisy Mae on 03.21.14 at 7:53 pm

You really ARE a ‘David’ taking on ‘Goliath’ — just keep it up. People do value honesty which is scarce these days. However, people are scared and confused. And, unfortunately, influenced by the self-serving. Ya know — government, banks, CREA, realtors….

#40 nonplused on 03.21.14 at 7:55 pm

Won’t most of that inheritance be coming out of real-estate as well?

When my grandmother died, there wasn’t much besides the house and tons and tons and tons of junk in it. (She was greatly influenced by the war and tended to hoard things. Her and grandpa even bought spare small appliances so they wouldn’t need to buy say a toaster after he retired.) Sure, it was a nice payday for the children when the house sold for more than I would have ever imagined, but hardly life altering. And the house had to be sold first.

Same with my other grandparents. He had a modest pension and a house, that was about it. Not quite as much junk but still impressive. But they sold the house and moved into an old age home before the boom really got going. And of course that wasn’t cheap so it burnt a lot of the proceeds from the sale of the house.

I got an apartment size freezer full of rotten meat out of the deal. Probably should have thrown it out but instead I took it to the car wash and pressure sprayed it. I was young and broke, so it seemed like a good idea to at least try. It worked. Pressure sprayers are awesome. I even have my own now, but not the freezer. I think my ex-wife got it but I doubt she still has it either.

Anyway, back to the subject. Most boomers already have real estate, probably don’t need to upsize, and don’t have sufficient retirement funds. I see the money they get when their parents move on going to Wal-Mart and depressing real estate as the homes are sold.

My idea is that the only thing that can really create new real estate demand is the family formation rate. Well and low interest rates. Real estate has got a double kick from the number of divorced or single people pushing up the single adult household rate, but that can’t go on for ever. Once we are all single the household demand stops rising except as the population does, which isn’t scary fast either. And as Garth is fond of reminding us, interest rates can’t do much from here either.

#41 Nemesis on 03.21.14 at 7:57 pm

TskTsk… Everyone knows there is only one RedFlag, AuldPol… and this is what it looks like:

http://youtu.be/kld6hWwSWZc

http://youtu.be/szuCBlplKlU

…although – strictly speaking – the Navy typically has, like, way more fun…

http://youtu.be/2wOJBjpLTBA

[NoteToGT: There’s no excuse for bad manners – shall I organize an educational StrikePackage?]

#42 Cici on 03.21.14 at 8:00 pm

#33 Saskatoon

Actually, it’s pretty bad writing and bad propaganda, because they can’t even make their case by building a logical and solid argument.

The title says it’s baby boomers’ wealth that is in the process of being transferred, meanwhile the rest of the article states that baby boomers will be receiving wealth transferred from their parents (boomers).

Of course, there’s also the very important oversight in calculations and numbers, which some of the baby boomers on this blog have already pointed out: most have already received their inheritances, as the majority of boomers have already transferred their remaining wealth, through the process of death or gifting.

#43 Daisy Mae on 03.21.14 at 8:03 pm

“This report is published for general information only and not to be relied upon in any way.”

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

“…not to be relied upon in any way”? In other words, it’s crap? LOL

#44 Oceanside on 03.21.14 at 8:04 pm

This is the funniest post in weeks, like watching “Global Vancouver” news. I’m 63, my wife is 7 years younger, all our parents passed away and we inherited but certainly did not have enough to buy a home…..I have a few friends that inherited a large sum of money but they were already well off themselves and not in the market for something Sotheby’s like to peddle.

Funny this timing with the recent news that HAM are repatriating their cash from their foreign real estate investments…

#45 mitzerboy on 03.21.14 at 8:04 pm

spring has sprung……have fun everybody

#46 Daisy Mae on 03.21.14 at 8:07 pm

“The people around you – at work, at the bus stop, on the subway, in traffic, at school – they want simple.”

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

Yes, they do — want ‘simple’. They’ve got their heads in the sand, can’t handle the truth. In other words, they want ‘simple’.

#47 UTSBLUE on 03.21.14 at 8:10 pm

Garth, Thank you very much for your daily thoughts. It’s the only thing I read every single day. In time, you will be proven right about pretty much everything… Keep up the great work and to hell with the naysayers.

One thing though – the home ownership rate in Canada is not 70%. It’s more like 20% because the other 50% don’t own their homes – the Banks do.

#48 Daisy Mae on 03.21.14 at 8:12 pm

#8 Linda: “Be a lot of long faces as the will is read & you find out the parents spent THEIR money.”

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

Parents DO NOT owe their kids an inheritance.

#49 nonplused on 03.21.14 at 8:14 pm

I feel like talking about my theory that the divorce rate and general lack of interest in marriage (for good reason guys!) is driving up demand more. With a personal story.

Between my ex-wife and I we own 2 houses where we used to own one. She never remarried, but I did (with a prenup this time! Guys, never marry without one unless your bride is basically just as hard working as you are. Actually I don’t mean to dis my ex-wife too much because she is hard working and our financial arrangement was amicable. We had nothing going in and split what we had going out, so it was all fair. But I know lots of guys who got screwed big time by a stay-at-home mom. They are to be avoided at all costs. If she hasn’t got a job, she doesn’t get a ring. And where possible she should be close to your pay grade. But I digress. It was an important digression, but a digression none the less. Never marry outside your pay grade without a prenup. Never. You have to be fair, or they will throw it out, but the exit should be clearly understood by everyone.)

Anyway back to the increased divorce rate and declining marriage rate influencing housing. My kid sister is getting a divorce, and since she has no money other than child support, my dad bought her a house! Nice! So I suppose some of that inheritance did go into real estate. He never bought me a house or even a pair of shoes since I was 12, but girls get different treatment I guess. Oh well it is definitely better than her and her kids living in my basement. I think I’d buy her a house before I’d put up with that again.

#50 Kurt on 03.21.14 at 8:18 pm

#31 Cici – I actually followed the link, which was to an article that linked to testimony for a congressional hearing. Mr. Moore’s introduction featured a couple of standard denier dodges – the rest of it was a chapter from his book “Confessions of a Greenpeace Dropout”. I haven’t finished reading it yet, but it seems he’s actually read the literature so I’ll give it a try. I concur that there is a high likelyhood that Mr. Moore believes whatever will make him the most money.

#51 Dan on 03.21.14 at 8:18 pm

I follow the red flag personal finance forum and that specific thread was keeping me entertained all day. I don’t post or even have a username for that matter but I assure you that the spirited discussion that you walked into has less to do with you than the bull/bear hostilities between certain members of the forum.

To the RFD BULL crowd, ignorance is bliss but talking absolute BULLshit behind the safety of your screens is obviously better.

#52 joey joe joe on 03.21.14 at 8:26 pm

I think this video illustrates exactly what Garth has been saying about deflation and the debt cycle https://www.youtube.com/watch?v=PHe0bXAIuk0#t=1381

#53 Mrs Riverview on 03.21.14 at 8:27 pm

Garth – agree with your comments re: threat. I infer that is what took you out of politics and share that is what happens in the corporate world, too. Brains + ability to lead + liked by those who would be lead is a threatening combination and individuals with those talents risk getting thrown out of the office tower in the game of Survivor that is the race to a C-suite office.

Re: the Red Flag discussion. Took a look at it and that was just weird. People with way too much time on their hands. It’s a free country and people can disagree with your economic predictions and that’s great ‘cuz they can take the opposite side of the bets you will eventually win on. Why they feel so emotional about disagreeing with you is just strange.

Don’t take it personally.

#54 economictsunami on 03.21.14 at 8:28 pm

As I always say G, I’m too old a cat to worry what the kittens think. I know deep down inside you may feel the same way.

We unfortunately live in a hurt feelings society and some just don’t want anyone to burst their insular ideologically built bubble.

Speaking of property bubble, it appears our former BOC rock star and The Chancellor are loved by the City but the rest of the country is catching on to the fact that, very little has changed.

The Chancellor said he was going to be different. So what’s changed in our debt-fuelled, manufacturing-lite economy?:

“More tellingly, it’s striking that Mr Osborne feels able, for example, to pump yet more taxpayer money into his Help to Buy scheme. Since that initiative has done precious little to encourage new housing starts, and since new construction limps well below actual demand, Help to Buy is in essence just a pump inflating prices in an already overheated market. In other words, your money is being channelled via banks into the pockets of existing homeowners.

Isn’t that exactly the economy we were meant to be leaving behind?”

http://tinyurl.com/nr54pgo

Therein lies the problem, we are so addicted to the very same failed policies that got us into this mess, even when they no longer produce our long awaited economic outcomes, we still cling so desperately to them…

#55 s3ssg3 on 03.21.14 at 8:28 pm

It seems like there are TWO Canada’s when it comes to RE. Urban and the rest. I suppose 416 and Van are the ones reading these articles due to the silliness in those markets, therefore the topics always seem focused there. but in The Rest, there is little risk to putting most of your savings into sensible, well constructed housing. Those of modest income and little education about investing, can still use the model of previous generations. A $900,000 house out here would be acres with stables and an indoor pool.

#56 doomsday prepper on 03.21.14 at 8:31 pm

well, I’m 48 and my siblings and I just split the proceeds from mom’s house…one sis traveled a bit, other payed down his mtg a bit…me? I was thinking of building a small cabin for when TSHTF…that’s real estate…I will put a small portion onto my mtg too…only 9 years left on that sucker!

#57 jess on 03.21.14 at 8:40 pm

The “king’s ” city

Dying Memphis Neighborhood Foretells Next U.S. Crisis: Mortgages
By Bob Ivry Mar 21, 2014 12:00 AM ET

http://www.bloomberg.com/news/2014-03-21/dying-memphis-neighborhood-foretells-next-u-s-crisis-mortgages.html
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and then there is the guy who thought he was a king

http://www.pbs.org/wgbh/pages/frontline/to-catch-a-trader/

#58 Retired Boomer - WI on 03.21.14 at 8:50 pm

Consensus indicates most of the Boomer’s parents have turned to dust.

About 4% of Boomers have turned to dust as well.

Few Boomers will inherit, it has already happened if it was going to happen. Take me, no inheritance when the last hit room temp in 1986. Just lived my life as expected to mostly. Can my kid “count” on an inheritance? Well, I wouldn’t “count” on it.

As for Garth, you don’t suck. Some people think you suck, but some people always have, deal with it. Your job is to heal that bionic ankle now that spring has officially arrived!
That means summer will arrive on schedule, as always.
There bike will wait for you, but not wait forever. Heal Well

#59 takla on 03.21.14 at 9:09 pm

Inheritance thru wills been getting a fair amount of hype lately it seems.Those looking in from the outside figure the grass is always greener$$tons of free cash for those lucky enough to have affluent parents…yahoo…More often than not there are family disagreement issues that can tie things up,then the other bloodsuckers out there{no I don’t mean realtors}lawyers will get their share after the gov takes their pound of flesh off the top.All this at a time when we should be reduceing hypertention and keeping more pepper than salt in the hair-do.
Hopefully those that get to harvest an inheritance in this housing market have the common sense to pay down their debt and don’t get suckered by a hungry realtor

#60 Kylie meyer on 03.21.14 at 9:11 pm

I’m looking forward to my inheritance as it is a good safety net. Parents owe it to their kids to leave them something to help them out. Helping your kids is one of the main jobs of being a parent. Finally nice to see most agreeing with this now that Garth backed up my general idea.

#61 crowdedelevatorfartz on 03.21.14 at 9:18 pm

A “boomer” friend of mine had both elderly parents pass away within a few months of each other about 10 years ago.
The parents were frugal pensioners that lived very Spartan lives in subsidized veterans housing due to their meager pensions.
My friend was on the “call list” at the old folks home where his parents had spent their final years. He received a call from the “Home” late on a Sunday night that his father had passed away in his sleep and he should come over to deal with his deceased parents personal effects.
He arrived several hours later to find that his unemployed brother and sister had already been there and had ransacked the apartment. Jewelry, cash, silverware, ANYTHING of value, was gone……..
He contacted his parents bank and notified the manager that his father was deceased and that all monies should be held until the executor could award any cash according to the Will.
The bank manager thanked him and informed him that both siblings were there demanding access to the account . Denied.
Seems that “boomer” children living beyond their means has been a problem for at least a decade…..

#62 Smoking Man on 03.21.14 at 9:19 pm

You suck Garth. We all suck.

The world sucks, suck it up…

Anyone who gives a crap on what people thing of them is weak. Easy to manipulate. And a down right loser.

Far better to be looking down to idiots than looking up.

It’s code of some kind.

#63 Son of Ponzi on 03.21.14 at 9:28 pm

According to the latest figures, Canadian baby boomers make up 42.4 per cent of the population and will individually average $56,000 in inherited capital.”
—————————–
Wow, 56k will come in handy buying a 1.3 million starter home in Vancouver.

#64 joseph on 03.21.14 at 9:29 pm

The trillion dollar transfer of wealth article is dead-on. This is exactly what will happen. This trillion dollar transfer of wealth are coming from immigrant parents who were savers their entire lives and valued real estate above all else. Their children bought into the hype of “investing” in stocks in the 1990s and lost large amounts of money and will never revert back to this course (e.g. rigged stock market) despite Garth’s countless pleadings to do so. Real estate will continue to be a solid investment in Canada.

How is the TSX, or the bond market rigged? — Garth

#65 Waterloo Resident on 03.21.14 at 9:29 pm

For more than half of the Baby Boomers; their old parents have ALREADY DIED. They died a long time ago.

Over the next 10 years it is going to be the BOOMERS who are going to be doing the dying, not their parents.

#66 Panhead on 03.21.14 at 9:31 pm

I believe most out here on the Left Coast lap that kind of article up as my dog does his supper. Come back for plenty more too … Province has plenty more where that came from. As noted many times before they just want the $$$. Keep up the good work Garth and we’ll keep learning.

#67 Macrath on 03.21.14 at 9:37 pm

mainstream view?

I went for a ride through southern Ontario to get one last run in before the snow melts at Boomer Blue Mountain (actually a modest hillside). What we have here is a particleboard cult, developments in every direction as far as the eye can see. Every community expanding into the surrounding fields. No new factories or jobs just an expanding glut of housing.
It`s a extraordinary marketing brain wash of the mindless masses and you are the only one in the country who can see a huge problem. F has already abandoned the sinking ship of debt slaves.
They eventually are going to get a lot more upset than they are now.

#68 notagreaterfool on 03.21.14 at 9:38 pm

CREA already has got to your comrade, Ross Kay

#69 charles on 03.21.14 at 9:45 pm

http://www.zerohedge.com/news/2014-03-21/all-aboard-bus-home-ownership

#70 Smoking Man on 03.21.14 at 9:53 pm

If watching a red head work the brass pole at Stir at Seneca is bad enough, had a beauty blond just assault my elbow with a large mushy yes firm piece of her anatomy..

See turned and softly said, I’m sorry..

That’s it, I have my attorney on speed dial…… :=) ~

#71 Inglorious Investor on 03.21.14 at 10:03 pm

This is completely tangential, but I appreciate the obscure reference to the preemptive headline by The Chicago Tribune written for the 1948 US presidential election, which Truman won. Have you been to the Little White House on Key West?

#72 4 AM Sunrise on 03.21.14 at 10:07 pm

These desperate condo floggers rely on the same “news” articles as well:

http://www.seylynn.ca/news

They also sent me an e-mail saying that a “savy investor” would buy one of their units because a “savy investor” (it’s so nice they used it twice) would know that vacancy rates on Vancouver’s North Shore are quite low. I guess they blew their budget on those shiny gold keys that represent entries in their draw for a free condo (I have a 1 in a million chance!) so now they can’t afford a spellchecker.

#73 Nemesis on 03.21.14 at 10:08 pm

#BonusZen #RememberWhen? #HollywoodHistory #ColorCity #BeautifulDowntownBurbank #ComcastUniversalNBC

http://tinyurl.com/ok5w443

[NoteToSM: Beware of PoleDancingRedHeads… LoveLurks in the strangest places, you know: http://youtu.be/rZuHQ94ES6U ]

#74 Linda Mulligan on 03.21.14 at 10:10 pm

#48 Daisy Mae – you misinterpreted my comments – in no way did I state parents owed their children an inheritance. In fact, I pointed out that the money was the parents (THEIR) money & the kids should not in any way expect they should be entitled to that money. I will also note that a number of years ago (don’t know if this still goes on or not) people who were totting up their net worth were told to include expected inheritances. My point is to NOT expect an inheritance & make your own wealth, not rely on someone dying & leaving you a bundle.

#75 Josh in Calagry on 03.21.14 at 10:11 pm

Garth, if you’re guilty of anything it’s beating a dead horse. You’re correct in what you say and you’re probably even correct in the fact that most people need to be hit over the head with it daily before they “get it”.

#76 JL on 03.21.14 at 10:21 pm

I agree with most of Garth’s argument about balance and diversification, but its not really correct to factor your house into your asset mix when evaluating your investments. The house is your shelter, its not part of your investment portfolio.

I’m 30 years old and I own a house that has gone up in value by about $100,000 in the past few years, the whole time I have continued to contribute to my RRSP and TFSA accounts, but because of the huge increase in the house “value” if you look at all my assets combined then of course I am not diversified as over half my net worth is in one piece of real estate.

So what, I’m supposed to sell my house now because the value has shot up?? “Hey family and pets, we’re moving because now the house is up in value and we’re not diversified anymore.”

My house has nothing to do with my investment portfolio nor my financial plan, they are unrelated.

Garth should be advocating for much higher savings and investments, not telling a person like myself that they should sell their house now. The house has nothing to do with my investment portfolio and I don’t factor it into our family’s balance sheet. (Like I don’t put our cars, my girlfriend’s jewellery or our clothes, because they are consumables and are not part of our assets for financial planning).

And I completely reject Garth’s notion that I somehow can’t invest and save because I’m being sucked dry by our house. We paid $420,000 for it several years ago, the mortgage payment is $1600, taxes are $300 per month and insurance is $100, for $2000 per month plus maintenance. The comparable houses in my neighbourhood IF I could find one that allows for our dog and cat are $2200-$2400 per month.

So sure I could sell it and invest the capital that’s sitting there and pay the rent and be ahead a little bit per month, but it’s not like I can’t make investments and contribute the max to my RRSP and TFSA because I own a house.

Garth should be advocating for a far higher savings rate and more investing. But this does not mean you have to sell your house to do it.

#77 Linda Mulligan on 03.21.14 at 10:24 pm

#49 Non Plused – I find it interesting you place little or no value on the stay at home parent (I say parent since it isn’t ‘always’ a woman). So IF this stay at home parent keeps the house clean, does the laundry, makes the meals, does the grocery shopping, takes care of any children/family pets etc. this has no value? Have you checked out the cost of child care or weekly housekeeping services? How about the cost of preparing meals or do you only eat in restaurants? Dry cleaners also do laundry & iron – for a price. I remember reading one study where the researchers took average weekly household tasks & priced them out based on quotes from businesses providing said services – your average ‘stay at home’ housewife was estimated to be providing services that would cost between $32,000 (low end) to over $56,000 (high end) & that way waaaay back in the 80’s. Guess it is true what people don’t pay for they do not value….

#78 WhiteKat on 03.21.14 at 10:26 pm

You don’t suck Garth. You’ve been saying the same thing for some time now, and many hear and get your message. That is an accomplishment!

Do you miss politics?

#79 AACI Home-dog on 03.21.14 at 10:26 pm

Good posts lately. Garth ! Thanks.
I have a fairly big portfolio, but even when it was baby size, my advisor had me into equities, strip bonds (which were sexy in the day), etc.
Now, a very diversified portfolio stocks & REIT’s with healthy dividends are doing great. Enough to live off.
Never had a preferred share, but fine anyway without.
Cheers !

#80 Ralph Cramdown on 03.21.14 at 10:34 pm

#44 Oceanside — “I have a few friends that inherited a large sum of money but they were already well off themselves […]”

#48 Daisy Mae — “Parents DO NOT owe their kids an inheritance.”

I think there’s probably a big overlap between parents who best educate their children and teach them about money, and those who will have money to leave at death.

There will be some who teach well but leave little, by design or by chance, and others who teach little but leave much (most likely by chance). But the smart money is betting on the smart money propagating.

#81 HD on 03.21.14 at 10:37 pm

@ Retired Boomer – WI

I truly enjoy your posts and suspect that I’m not the only one.

Some of us are listening and paying attention.

Please keep posting.

Thank you.

Best,

HD

#82 Linda Mulligan on 03.21.14 at 10:38 pm

#49 Nonplused – out of curiosity I did a quick check – Investorpedia did a more recent (2012) calculation of the value of a home maker & used only the lowest costs for those tasks which were commercially available. By their calculations, the average homemaker provides services worth at least $96,261 per year IF they were being provided by someone who charged a fee. Remember, this is using only the lowest price estimates & only included commercially available services.

#83 TheCatFoodLady on 03.21.14 at 10:52 pm

TheCatFoodLady could sure have it a whole lot worse. No debt, needs taken care of & cheap, easy to satisfy wants. Today was a perfect example – got to ‘play hooky’ for 3 hours this afternoon. I walked through a golf course, fed ducks, chickadees & cardinals out on a point & listened to ice cracking on the river. I made a snowman, threw balls for other walkers’ dogs & chatted to some very nice people out there. Nobody was watching so I jumped on some ice covered puddles, just to watch them go SPLAT! I managed to stay mud free – more or less.

I’d like to think any boomers’ parents still alive are using the money they worked so hard to save on themselves – be it the care they need or simply enjoying their remaining years. If the amount quoted as an ‘average’ inheritance is anything close to reality, that money will be swallowed up paying consumer credit, perhaps helping kids with school, extra mortgage payments…

It’s not going to be a pot filled with gold for eager real estate agents or any other purveyors of product meant to separate folks from their money – however acquired.

At least I hope not.

#84 Linda Mulligan on 03.21.14 at 10:56 pm

Further to homemaker costs – the hourly wage of a homemaker service in the US started at $17.95 per hour. Cost went up quickly if medical assistance or round the clock care was required. Using only a 35 hour work week that means it would cost $32,669 per year for ‘basic’ home care. The 24/7 care ran $210 per day or $76,650 per year….

#85 45north on 03.21.14 at 11:00 pm

AisA ( A is A )

Anyone that has never been run over by a market just can’t comprehend the warnings. Apparently that is around seven out of ten people in this country.

You and I and quite a few of the frequenters of this blog will know them by the sight of their jaws dragging on the pavement and the frozen look on their faces

there is a big expectation that the government will bail them out. Government cannot bail them out because it doesn’t have the money. Ontario is seriously in debt

A sign of the seriousness of Ontario’s debt problem is evidenced by comparisons with California

http://www.ottawacitizen.com/opinion/op-ed/Ontario+usurps+California+role+poster+child+fiscal+management/9642262/story.html

I don’t think we can imagine the political environment if there is a 30% drop in housing prices. 30% is what the US experienced between 2006-2008. You can look it up, right now. It’s all on-line. I think we have already seen what’s coming – politicians are going to promise jobs not higher housing prices.

#86 saskatoon on 03.21.14 at 11:04 pm

#42 Cici

it is “bad writing and propaganda” for YOU.

in other words, it isn’t designed for YOU–or many others here on this pathetic blog.

sigh.

SM…help me out here! :)

#87 what bubble on 03.21.14 at 11:23 pm

#6 Coho

+1000000

#88 Steve on 03.21.14 at 11:37 pm

You suck? You’re already a hero in my household.
Thanks to your free advice we are out of debt, investing actual money, and have a coherent plan moving forward. One day I hope people say I suck.

#89 nonplused on 03.21.14 at 11:38 pm

#60 Kylie meyer

OMG. Until recently kids were expected to look after their old age parents. Try sticking that in your viewpoint and smoking it, with whatever else you are smoking.

.#61 crowdedelevatorfartz

Yep. It’s hard to admit, but no mugger will ever do to you what your own kin plan to. Family is the worst of all enemies, because they think they have the right to take what is yours. They understand taking someone else’s property is bad, say like stealing a car they might go to jail. Take your car and wreck it, well they don’t see the property line. It’s their car too. Family sucks worse than any mugger. The mugger just wants your wallet. Your sister wants everything you’ve got.

#90 devore on 03.21.14 at 11:38 pm

Canadian baby boomers make up 42.4 per cent of the population and will individually average $56,000 in inherited capital.

Average.

Av-er-age.

Because in the great socialist republic of Canadia, wealth is distributed equally. Of course. If $56k is average, the median will barely cover funeral expenses.

#91 KC on 03.21.14 at 11:49 pm

#49- It’s inappropriate to slam and make generalizations about stay-at-home moms. (Same applies to stay-at-home dads for that matter). It’s a personal choice and often requires sacrifice/compromise for families who choose to do this. Do you want to start a discussion about the lack of licensed day cares currently available in the province or a quick recap on the number of children dying and/or abused in unlicensed day cares? Take your pick. I can share a few anecdotal horror stories with you if you’d like…

#92 Exurban on 03.21.14 at 11:59 pm

There is no chance of The Province running a seriously negative story about real estate because the RE industry is, by far, their largest source of advertising revenue. Your colleagues at work can regularly discuss decrepit condos and demented strata councils, but nary a word will appear in the Province or the Vancouver Sun or, most laughably, the”alternative” Georgia Straightwhich nowadays consists primarily of ads for condos and “urban” home furnishings. The legacy media have completely abandoned investigative journalism.

#93 KC on 03.22.14 at 12:01 am

#49-An interesting read…

http://www.thestar.com/news/gta/2014/02/28/no_one_is_tracking_unregulated_daycare_deaths_in_ontario.html

#94 nonplused on 03.22.14 at 12:04 am

I’m going to muse a bit now about why you should almost never trust or do business with your siblings, or indeed any family member.

It’s a little like Garth’s point not to own real estate with anyone you aren’t sleeping with. While I think that statement makes sense in context there are business transactions through corporations that make sense, the best being a REIT, but let’s get back to the point.

Family sucks. Here’s why.

When we are young, our parents raise us and we come more or less to think we are part of a unit. When one kid does well in school he/she gets praise but not in front of a child who isn’t doing well (unless the parents are crazy). If one kid plays sports they all do if they want, or take piano or whatever (unless the parents are crazy). So the kids all think to expect equal outcomes.

This gets really difficult once the kids turn adult and well and behold suffer different successes and failures. One goes to school and gets a good job. The other lazes around or nowadays plays video games and goes to late night raves. Low and behold, they don’t have the same success!!!

Do you think the raving gamer thinks he/she should accept less material reward than his MD or P.Eng. brother or sister is getting? No way! They come for your stuff. And if they can, they abuse your parents. All that stuff you earned and your parents have is theirs, family and all, and they deserve the same lifestyle as you, is what they think. Always been that way in childhood.

Now I know properly raised children don’t necessarily have this problem. Sometimes parents succeed in raising all independent children. Exempt them from this rant.

Point is, of all the people who will ever cheat you, family is the most likely. Your business partner won’t, you’ll sue his ass and he knows it. Your plumber might over charge a bit, but he knows if you find out you might not pay at all. Yes there are scammers out there, but your own family is number one. Don’t trust them. They will take your stuff and they don’t even see it as a crime because they think it’s common property.

As for the inheritance thing, it’s a mess. Assume you aren’t getting anything. What makes me mad in my case is that my siblings are blowing through what money my parents have to live like I can and have. What happens when they run out of money? I am the only one who could support them. But at this point I would have to ask why. Am I my brother’s keeper? His financier?

#95 Tony on 03.22.14 at 12:14 am

Re: #12 Dorothy on 03.21.14 at 6:41 pm

Only idiots downsize meanwhile the smart people move to cities where housing won’t fall in value. That includes cities outside of Canada.

#96 In Van on 03.22.14 at 12:29 am

It seems that until higher interest rates come, nothing will change, and those seem a long ways away.

#97 Tony on 03.22.14 at 12:33 am

Re: #59 takla on 03.21.14 at 9:09 pm

The government takes nothing, parents that are clued in have already given almost everything away to their siblings as there’s no gift tax in Canada. Anything under about 50 grand won’t go into probate so the idea is for the parents to keep on giving everything away to their children and to keep the figure below 50 thousand dollars.

#98 chapter 9 on 03.22.14 at 12:43 am

It is the responsibility of intellectuals to speak the truth and expose lies!

#99 wallflower on 03.22.14 at 12:46 am

#38 coastal on 03.21.14 at 7:49 pm

actually, coastal, they are REALTORS©

#100 DocInWaitingRoom on 03.22.14 at 12:49 am

Garth its good not to take shit, we both have balls but you can’t please everyone. Be at peace you don’t need to concern yourself with non ideal beings.

Try working as a doctor, its the same as politician or truth champion. You know this. You cant win every lost sheep of the herd. Some are just retarded. They either want the vaccination or like a crack seller are championing to sell their crazy $hit to everyone they can beyond any logic and bring the ship down with the captain.

#101 Charles Ponzi on 03.22.14 at 12:50 am

Is it heresy to write things not conforming to the mainstream view? Yes, when it comes money.

#102 will on 03.22.14 at 12:50 am

Yeah I was born in ’57, so I am a lower end baby boomer and I already got my inheritance too. Big picture, I don’t think there are too many boomers behind me. The article is rubbish. The authors are obviously trying to convince people that it’s normal to shovel all extra cash into RE. Why isn’t there a law against this type of misleading garbage?

#103 Ronaldo on 03.22.14 at 12:52 am

Inheritance? For a large part of the population, what the casinos don’t already have, the extended care facilities will gobble up. If you’ve walked through a casino lately, you will get my drift.

#104 KWkid on 03.22.14 at 12:54 am

#60 Kylie meyer

“I’m looking forward to my inheritance as it is a good safety net. Parents owe it to their kids to leave them something to help them out. Helping your kids is one of the main jobs of being a parent. Finally nice to see most agreeing with this now that Garth backed up my general idea.”

I hope i missed the sarcasm in there otherwise; wow entitled much?

A parents job is to provide you with the necessities of life until you reach 18. Once that milestone has passed all bets are off. There is a difference between helping and enabling dependence. As an adult your parents owe you nothing. The best job a parent can do is to teach their children that the world owes them nothing. You have to learn to stand on your own two feet.

“You are not special. You’re not a beautiful and unique snowflake. You’re the same decaying organic matter as everything else. We’re all part of the same compost heap. We’re all singing, all dancing crap of the world.” Chuck Palahniuk, Fight Club

#105 wallflower on 03.22.14 at 1:20 am

have to agree there with
#63 Son of Ponzi on 03.21.14 at 9:28 pm

It’s the used car salesmen who should be getting all excited about The Transfer of Wealth.
Not so good for the REALTORS© (until AFTER the crash).

I have to say, once again, that I come here for the comedy and tonight’s “reading” and comments have me in stitches.
I just LOVE this one:
#65 Waterloo Resident on 03.21.14 at 9:29 pm
Over the next 10 years it is going to be the BOOMERS who are going to be doing the dying, not their parents.

And I AM a boomer, and it’s hilarious. And, true. But semantically, these words are poetic. The fact that I am going to be doing the dying, … I can’t just die, or get dead, nope. I have to be doing it. That is SO boomer. We did it all. We had it all. And, now, I can look forward to doing the dying.

#106 stage1dave on 03.22.14 at 1:49 am

Oh great, so now I get to lose sleep wondering where my $56,000.00 is, and/or do I have to wait another 20 years for it? Hahaha…

Just goes to show what a wonderful source of useless information most newspapers have become; or maybe most of ’em finally figured out it’s better to worry about the advertising, & fill up the space in between with…well…something…

Why can’t Ozzy bite the head off of another bat & give us something worth reading about? All this RE cheerleading is making me nostalgic for the 80’s…

#107 mousy on 03.22.14 at 1:56 am

Bad few weeks for Harper: 1) Nadon given the thumbs down as Supreme Court of Canada appointment (only one of a dozen justices who didn’t chastise feds in Kadar case); Supreme Court of Canada says retroactive criminal sentences (taking away parole rights in place already) was just not on – seriously nobody told them about this basic rule before they went ahead with the legislation????; Flaherty resigning – well was he pushed to go????; gee whiz, maybe the economy really does suck – oops there goes the dollar! Don’t even get me started on the Putin debacle.

#108 mousy on 03.22.14 at 2:05 am

Regarding the inheritance: I will be exceedingly pleased if my parents die with a bank balance of zero. Children should look to their parents for inspiration – that is enough.

#109 Turtle on 03.22.14 at 2:16 am

The article tells us a story with positive outcome for RE market. It is not that simple as they say.

There are three groups of people: “Parents” (80+ y.o.), “Boomers” (55-65 y.o.), “Kids” (30-40 y.o.). “Parents” leave their inheritance to “Boomers”. What is inheritance? It is probably the house.

“Boomers” have two realistic options: 1) Sell the house, 2) Rent the house to “Kids”. In the first case we have a new house on a market. More supply – price is coming down. In the second case we have a house hunting couple off the market. Less demand – price is coming down.

Let’s assume “Parents” have money instead of a house. Now that money is in a hands of “Boomers”. If their house has mortgage on it – they will pay off mortgage first (classic approach). If their house is paid off – they will do a catch up on retirement savings. There is no way they will buy another house when cash starvation is a real danger for them.

#110 scib on 03.22.14 at 2:21 am

#64 joseph on 03.21.14 at 9:29 pm
Their children bought into the hype of “investing” in stocks in the 1990s and lost large amounts of money and will never revert back to this course (e.g. rigged stock market)
How is the TSX, or the bond market rigged? — Garth

Come on Garth.
The TSX or any stock market is not a church! Here is where the greedy call their friends and get the inside track. Then they ask a close friend or relative to buy the stock they have some edge or advance knowledge on.
Because these brokers and anyone in and around the industry have some connections to insiders. They all are shaving a few points ahead of the retail investor.
Like you say an average retail investor should make 7% a year. Lets face it, the average broker does much better than that. Maybe 15% or in some cases they hit home runs.
It doesn’t mean we can’t make some money in the market but the real gravy is reserved for the insiders. They are shaving off the points we would normally make in an honest and properly regulated market.

Remember the guy who tried to warn the SEC about Madoff for years?

“The SEC is also captive to the industry it regulates and it is afraid of bringing big cases against the largest most powerful firms,” said Harry Markopolos, an independent financial fraud investigator. “Clearly the SEC was afraid of Mr. Madoff.”

They ignored him while Madoff was raping the investors blind. Should we be trusting that our markets are safe after that?

http://money.cnn.com/2009/02/04/news/newsmakers/madoff_whistleblower/

Sad. — Garth

#111 Fortune500 on 03.22.14 at 3:15 am

I follow RFD and a number of other finance sites because I like balance and perspective. What seems odd to me is that someone would find the need to create a thread basically bashing a person and their ideas. If u disagree, great, but how insecure in your own position do you need to be to make that kind of effort. Oh well, 177 replies in less than 24 hours sure says you are relevant. And seeing how the bulls there believe you are calling for a crash just shows they haven’t bothered to read this blog.

As for inheritances, we may not be representative, but my wife and I are in our early 30s and both sets of parents will struggle in retirement. No inheritances on the horizon that won’t be used up in nursing homes first. All 4 plan to rely on CPP, Oas and GIS. Some minor equity from their modest homes which one set is currently using for travel. We are very well aware that we will be looking after and supplementing all four. That is our reality. No complaints, but I am sure we are not alone.

#112 Thoughts on 03.22.14 at 4:26 am

http://www.dailymail.co.uk/news/article-2586619/Its-housing-hysteria-Eight-buyers-chasing-home-prices-50-000-month-property-market-reaching-new-levels-insanity.html
Good job mark carney …. Looks like its England’s turn
GTA is just as nuts… Bring your own agent, multiple offers… Craziness

#113 Happy Renting on 03.22.14 at 4:36 am

For kicks, I read the RFD thread. They ridiculed us blog dogs, too. Hmph. ;-)

#114 juno on 03.22.14 at 4:40 am

Interesting article Garth.

Yeah the wrinklies will die and leave their inheritance to something/someone. But most of their freakin inheritance is a house. Some are free and clear, but I bet alot of them were reversed mortgaged over the years and has a nice chunk of mortgage left to the next generation.

So does the thing that lived in the basement (probably working close to miminum wages) take on the financial responsibility. Or does he sell it and PARTY-ON-GARTH

yeah Party on Wayne!!!

#115 economictsunami on 03.22.14 at 7:55 am

Much has been written/ read about the Crimean situation and it’s international implications.

This is an article from earlier in the week and is one of the most balanced I have read to date.

Why China is right on the future of Ukraine:

http://www.telegraph.co.uk/finance/comment/10700292/Why-China-is-right-on-the-future-of-Ukraine.html

Also, an article essentially about financial market addiction…

The bitter medicine of quantitative easing:

http://soberlook.com/2014/03/the-bitter-medicine-of-quantitative.html

#116 One observer on 03.22.14 at 8:12 am

#85 KWkid —

Ignore this Kylie person. She / he is a troll. And if not a troll, then yes this is a highly entitled person who only comes on here to post inflammatory content :)

#117 T.O. Bubble Boy on 03.22.14 at 8:29 am

Here’s a fun fact — the total market capitalization for the TSX is about $2 Trillion:
http://en.wikipedia.org/wiki/List_of_stock_exchanges

So, if there is (apparently) $1 Trillion in inheritance coming, it certainly isn’t from equity holdings… it is all invested in houses and GICs/savings accounts, like Garth has noted many times.

My point: all generations in this country apparently share the same investing brain!

If Poloz is wondering why Canada can’t grow like other countries – that is part of it… our money isn’t investing in productive businesses, but rather sitting idle in houses and “high interest” accounts. That’s also why the big banks continue to do well: all roads lead to them!

#118 Detalumis on 03.22.14 at 8:34 am

#77 Linda those housewifely arguments went bye, bye back in 1965. I agree 100 percent with the poster, any man or woman who enables their spouse to checkout of the paid workforce is an idiot. You will need to support them for life not 18 years like you would even a disabled child, but forever.

Most “housewifely” tasks are make-work, I did them commuting 12 hours a day, I only vacuumed once a week quelle horreur. Gee my counter has dust, don’t look at it so closely. It takes 1 hour a day to keep a small house spotless, 2 hours more you have gourmet meals and home baking, that leaves 9 hours.

Now with 1 year mat leaves and junior kindergarten you can’t use the excuse that the kiddies need mommy for 20 years until you are 50 and unemployable.

If your husband fell for the story and decided to support you forever good for you. My mother taught me to be independent, without that you have no security no matter what you think.

#119 Stickler on 03.22.14 at 8:38 am

@ #60 Kylie meyer on 03.21.14 at 9:11 pm

I’m looking forward to my inheritance as it is a good safety net. Parents owe it to their kids to leave them something to help them out. Helping your kids is one of the main jobs of being a parent. Finally nice to see most agreeing with this now that Garth backed up my general idea.

———————————————-
LOL! good one.

I especially love:

“I’m looking forward to my inheritance”
…like it’s an entitlement.

And the classic:

“Helping your kids is one of the main jobs of being a parent.”
…even though an inheritance would likely go to their ADULT children.

Thanks for that!

#120 Big Sexy on 03.22.14 at 8:44 am

Morning Garth, Big Sexy here.

I would like to thank you for sucking hard. Indeed, you’ve had a profound impact on my life, and I’d like to share it with you and the readers.

Last night, my wife and I had our offer on our first home accepted. We close April 30th, and are very excited. Because of you, Garth:
1) We looked at houses in the 25-30k range less than we had been pre-approved. It means an easier mortgage to hold, and better montly cash flow, which means I’ll be able to max out the TFSA every year with a bit extra for RRSPs.
2) We decided to put less money down, so as to have a 10 month’s expenses cushion, and to have money for potential small renos that may be needed in the next 5 years. That “10 months”, of course, will be invested in a diversified portfolio. At the purchase price, the CMHC insurance premium is small, but also serves as priceless insurance for our family.
3) We stuck to our guns and our max price when we entered, unknowingly, a bidding war for a stale listing (a year on market), and walked away with our heads high when the question came: Should we offer more than we want?
4) I used the great resource that is your past post “How to buy” for tips, which paid off.
5) We used many calculators, including your recently posted rent vs buy calculator, to find out that on the long run, it was extremely advantageous to buy, even at 8% interest rate. And it helps that we were looking in a non-RE crazy prices area already.
6) The rule of 90 states that as 26 year-olds, we should have no more than 64% of our net worth in RE. We’ll be south of 50% when the deal closes. And that feels good!

For all of this, my dear Garth, I think you suck.

And my family and I are deeply grateful.

Big Sexy

#121 bigM on 03.22.14 at 8:53 am

#36 ..as the Boomers die off, the taxmen get about 10% to 20% of that $1 trillion.

When my mother passed, there was about 200k in RRSP money sitting.
Of course, it was deemed cashed in, and taxed, a lot of it at 43%.

10-20% is a rather low number I think.

#122 Stickler on 03.22.14 at 8:58 am

@ #82 Linda Mulligan on 03.21.14 at 10:38 pm

#49 Nonplused – out of curiosity I did a quick check – Investorpedia did a more recent (2012) calculation of the value of a home maker & used only the lowest costs for those tasks which were commercially available. By their calculations, the average homemaker provides services worth at least $96,261 per year IF they were being provided by someone who charged a fee. Remember, this is using only the lowest price estimates & only included commercially available services.

——————————————

LOL! Use your critical mind.

Here is how it was determined:

$200 – $500 per day ->Private chef
$118 per week -> house cleaner
$600 to $950 per week -> private nanny
$4,168 total per year -> driver
$936 total per year -> laundry
$30 per week -> lawn care

…..What pops out at you here? $52,000 to $130,000 of the cost is for a private chef!

If you think comparing a typical homemaker’s meals to a private chef charging $200 – $500 per day ($52,000 to $130,000 per year) is somehow a valid measure…well, what ever.

#123 Tiger on 03.22.14 at 9:01 am

#108 mousy!
Tottaly agree , my daughter thinks different, a mind f$$$ from her anti all I hear now a days is early inheritance.
What a bunch of shit ,my money is going to the phillipeans

#124 Ret on 03.22.14 at 10:07 am

#121
“When my mother passed, there was about 200k in RRSP money sitting.
Of course, it was deemed cashed in, and taxed, a lot of it at 43%.”

[email protected] and Rev. Canada both bonussed. I went through the same situation with MIL. The bank terrified her that she would have to pay taxes if she cashed some money out of that RRSP. Meanwhile she is sending a tax form in every year with unused tax credits. FIL did the same when he was alive. How smart was that?

A December or later in the year passing also means a whole year or whatever of pension checks get added into that final taxable income along with the RRSP’s.

Have money, but just get it out of RRSP’s before the final spouse dies. This can take a few years if the goal is to keep income below a certain tax threshold or not lose an entitlement.

Check out the TOTAL column in the Ontario Tax Pain Schedule:

http://www.desjardins.com/ressources/pdf/table-impot-p-ontario-2014-e.pdf?resVer=1391438380000

Other provincial tax structures have different thresholds but have similar escalating %’s of total tax.

#125 Ralph Cramdown on 03.22.14 at 10:20 am

#110 scib — “Come on Garth. The TSX or any stock market is not a church! Here is where the greedy call their friends and get the inside track. Then they ask a close friend or relative to buy the stock they have some edge or advance knowledge on.
Because these brokers and anyone in and around the industry have some connections to insiders. They all are shaving a few points ahead of the retail investor.
Like you say an average retail investor should make 7% a year. Lets face it, the average broker does much better than that. Maybe 15% or in some cases they hit home runs.
It doesn’t mean we can’t make some money in the market but the real gravy is reserved for the insiders. They are shaving off the points we would normally make in an honest and properly regulated market.”

You HAVE to stop thinking about “the market” and start thinking about the companies you can own. The brokers don’t get too many opportunities to shave a point from me, because I don’t buy or sell very often at all. They send me annual reports and monthly statements and credit my account with my dividends, all for free, and they lend me money at a competitive rate. When I do trade, they make $10, and a little bit more for options.

The REAL money is being made every day by the companies that I own. They’re digging, drilling, dealing and billing, generating billions in wealth every year, and sending some of it my way.

What do I care if, every business day, there’s some clown in a suit with a shiny ass staring at a screen and hoping to take a quarter point should I decide to buy or sell? He’s having his lunch eaten by a roomful of nerds that are hoping to take a penny or two from him should HE decide to buy or sell. But all the while, the millionaires and billionaires who control the companies I own bits of are making real money doing real business. Who cares about the sideshow?

#126 Bruce on 03.22.14 at 10:20 am

Just wondering where the Baby Boomer wealth is stashed. Is it in Real Estate? Wouldn’t the inheritors have to sell this inheritance first? Would that put pressure on house prices? Just wondering!

#127 Daisy Mae on 03.22.14 at 10:42 am

#61 Crowded: “He arrived several hours later to find that his unemployed brother and sister had already been there and had ransacked the apartment. Jewelry, cash, silverware, ANYTHING of value, was gone……..”

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

This story is not unique. We really begin to see the beneficiaries’ true colors — most notably, greedy siblings — when parents pass away. It can and does destroy family relationships. However, they can’t run away from themselves….maybe at some point, their conscience kicks in.

#128 X on 03.22.14 at 10:43 am

I hope the Fed begins raising rates next spring, even if it is in .10 point increments. It would give the markets a good indicator.

And how much will the baby boomer tax bill be for the gov’t as the money is passed on to the next generaltion? Will this make an impact on gov’t debt/funds?

#129 Raven on 03.22.14 at 10:56 am

In business, or writing R.E./financial blogs, you want a friend……buy a dog.

No. Adopt one. — Garth

#130 Daisy Mae on 03.22.14 at 11:10 am

“According to Salary.com, the average stay-at-home mom’s task load equates to a 95-hour work week. This breaks down to 40 hours at base pay and 54.7 hours of overtime on their “mom duties.”

This is good for an annual salary of $112,940.45, or $17.80 an hour.”

#131 Penny Henny on 03.22.14 at 11:16 am

Knowing you suck is half the battle.

#132 rosie "moving forward" in the knowledge that, "this won't end well" on 03.22.14 at 11:19 am

The Star has a full insert called Insight today about “Toronto’s hottest street, Rhodes Ave., a nondescript Danforth block.” Buy now or else.
Not to be out done the Globe waxes eloquent on the house horniness, you deserve it meme.

Even though it doesn’t quite feel like it, Spring Is Here.

http://www.theglobeandmail.com/life/home-and-garden/where-the-heart-is-what-it-means-to-buy-a-home/article17622056/

#133 killaboy49 on 03.22.14 at 11:40 am

So I shouldn’t have investments in GICs and other banky stuff, stocks, real estate, or left in cash. What’s left? Gold?

#134 Infused with Opiates on 03.22.14 at 11:48 am

117 TOBB – dont be too quick to judge business investment (or lack thereof). The TSX lists publicly traded companies. There is also wealth in smaller privately held enterprises. Ironically, these are often financed through mortgages.

#135 The Man From Nantucket on 03.22.14 at 11:51 am

125, Cramdown,

Thanks for that perspective.

Usually really enjoy your posts. You’ve helped me approach a few things differently, and for the better.

#136 Son of Ponzi on 03.22.14 at 11:51 am

I’ll take it all with me.
I hear that prices for a starter home in the “Best Place in Heaven” are astronomical.

#137 Stickler on 03.22.14 at 11:53 am

@ #130 Daisy Mae on 03.22.14 at 11:10 am

“According to Salary.com, the average stay-at-home mom’s task load equates to a 95-hour work week. This breaks down to 40 hours at base pay and 54.7 hours of overtime on their “mom duties.”

———————————-

Overtime!? what, is housework unionized?

PS Moms that work outside the home still have mom duties too.

The idea is to determine the cost / value,

…not make stay at home moms think they are bay street executives.

Don’t forget to add in if a working Dad spent his weekends doing yard work and house maintenance, and car repair & maintenance:

$40 hr for house maintenance (remember he also has to buy the tools)

$60 hr for car maintenance (remember he also has to buy the tools)

…and since it is the weekend he gets “overtime” so that 16hrs @ time and a half ($75/hr) = That is $4,800 per month ($57,600 /yr)

#138 Linda Mulligan on 03.22.14 at 11:53 am

#118 Detalumis: check those assumptions at the door regarding work – I will pass 38 years of full time employment in the workforce this May & am looking at at least another 4-5 years to go before retirement. My mom taught us (all 7 of us) the value of hard work & especially taught us girls the value of financial independence.
As for 1 hour a day to keep a small house spotless – only if you have no one else living with you & no pets, plus I am pretty sure having visible dust on the counters & vacuuming once per week does not qualify as ‘spotless’ in most housekeepers eyes. Or that small house is like 500 square feet & is covered with tile inside so all you need do is hose it down once per week. Of course, a 12 hour daily commute pretty much ensures the house is basically used as a bedroom – can’t see you having much free time to do anything else in it:)
#122 Stickler: why is it that people go to high end restaurants & pay $100 – $200 or more for a single meal including wine & think that is worth while but a gourmet meal served on freshly laundered linen & wine at home is somehow not comparable? The costs for a ‘private’ chef included shopping for groceries & the skilled knowledge to properly prepare the food. Yet when a homemaker does the same thing (with the likely exception that they did not make a fancy pattern with some reduction & place a cute sculptured vegetable rose or chocolate/spun sugar frou-frou on top of the plate) it is somehow worth the amount chefs are paid & they don’t usually go it alone – they have an entire staff of sous chefs, dishwashers, wait staff & a wine steward to support their efforts in the kitchen. So it does compare, given that plain ‘home cooked’ food – also supported by X number of additional bodies – costs $8 to $10 per plate, per meal at an inexpensive diner. Don’t know about you, but there are only so many times having the exact same meal becomes less than thrilling & the lack of food variety could have health effects, too. Happily, I’ve always enjoyed cooking – began messing around in the kitchen at age 4 & by age 8 was baking & preparing simple meals (was too short to safely reach the stove top prior to age 8) & am happy to report that my husband & I dine like a fine restaurant every day. Coworkers always amazed by our lunches – in the past week we had bison tenderloin with organic veggies; roast organic lamb with veggies; organic BBQ chicken with baby potato salad laced with fresh dill; baked wild salmon with prawns & fresh dill on basmati rice etc. Today I’ll likely take the leftover chicken & make a nice chicken waldorf salad for lunch….. Thanks Mom for teaching me how to cook:)

#139 Linda Mulligan on 03.22.14 at 11:57 am

Oops, missed one word – I meant to say that what a homemaker cooks is somehow NOT considered in the same value range as a private chef – but of course, a homemaker IS a private chef by definition unless they have a staff on hand to assist them in the kitchen.

#140 NoName on 03.22.14 at 12:01 pm

#123 Tiger on 03.22.14 at 9:01 am

No one in right mind with lots of money wants to take its money there and live. Especially when you factor in fault line, that have yearly re ocuring typhoons flods, mud slides, houses many active vulcanos, and owning a chainsaw is criminal ofence. I am not gonna mention coruption and red tape… but having few months vacation there is amazing.

#141 Linda Pearson on 03.22.14 at 12:22 pm

#60 Kylie meyer on 03.21.14 at 9:11 pm
**************************

Kylie, Kylie, Kylie…still playing the entitlement card I see. Several weeks ago you wrote here about how your parents owed you house-buying help because things have “evolved”. (Actually, it sounds in your case more like an instance of mutation.)

Now that you’ve got old enough and responsible enough to pay for your own phone and with the house thingy likely taken care of, you must be waiting with bated breath for the old folks to pop off so you can get down to the real business of living.

If I were one of your parents – though I wouldn’t be since I don’t buy into your particular brand of family dynamics – I’d be walking pretty gingerly around you in the expectation of the coup de grace.

#142 Jimers on 03.22.14 at 12:45 pm

Garth – You are invaluable in this world, a man with his own opinion.

#143 Ontario's Left Coast on 03.22.14 at 12:50 pm

G.T., you most definitely do not suck. Thanks very much from all the blog dogs for being a sole voice of reason in a wilderness of mindlessness.

#144 Old Man on 03.22.14 at 12:55 pm

Why did I never see this stock before? I was surfing for a hotel room in Mexico City on the Reforma and with the new google mapping found a beauty beside the Metro subway stop on the blue line at Hidalgo. I kept seeing this store name everywhere on my drive arounds; who would have known that an investment in this holding company of $25,000 9 years ago would have returned me massive returns. They have three investments that pale anything in Canada. FMX NYSE

#145 Just some guy on 03.22.14 at 1:03 pm

Recognizing that we are all slaves to our own self-interest, I have to say that a cursory read of the “other” forum in which some of the denizens of that far realm attempted to hoist you on a petard of their devising has led me to believe that there is absolutely nothing false about your claims that a lot of people are just plain stupid about real estate. I think you found their mothership. Hopefully they will be able to make the journey back to their home planet when the SHTF.

All this to say that denial can be a powerful, blinding force and that your tagline (this will not end well) is taking on a new and more terrifying meaning by the hour.

#146 Penny Henny on 03.22.14 at 1:12 pm

#82 Linda Mulligan on 03.21.14 at 10:38 pm
Investorpedia did a more recent (2012) calculation of the value of a home maker & used only the lowest costs for those tasks which were commercially available. By their calculations, the average homemaker provides services worth at least $96,261 per year
—————————————————
I can start Monday, I’ll even wear my french maid’s costume.

#147 Aggregator on 03.22.14 at 1:13 pm

Below is a table showing recent Willowdale listing activity (Jan-Feb 2014) along with average price history. The average listing prices per year are calculated by averaging total listing by address within a given year. So if a property was listed two times in 2011 for $900k and $1mil., then the average for 2011 is $950k. The decrease and increase is 2014 average list price minus 2011-2013 average list price and does not reflect actual gains or losses on properties sold, rather listing activity. Also some averages may be skewed from multiple condo listings at one address and renovation effects, so consider there is added value to some price gains.

Willowdale Listing Actvity

#148 Randman on 03.22.14 at 1:17 pm

BOE paper comes clean…..loans(money) is created from nothing …..banks are robbing you…..Karl Denninger explains….No wonder they want the mortgage game to continue!

Yet there is a statement right here, by the Bank of England, that banks create “money” out of literal nothing by making a new loan.

It is a basic principle of mathematics that when you have an equation and modify a term that exists on both sides of the equal sign that adjustment must be made to both sides!

If the economy produces 100 bushels of corn (and only that) and there are 100 “dollars” (units of currency), and those are the only two items in the economy, the natural clearing price of a bushel of corn will be approximately one of the dollars.

Now here’s the problem — if a bank comes along and issues 100 new dollars that are indistinguishable from the old ones, simply because someone asked for a loan, how much is a bushel of corn assuming the same 100 exist?

That ought to be obvious.

That would be where the problem lies with so-called “mainstream” economics when it comes to monetary mechanics, and it is a central point I made both in Leverage and in calling for a One Dollar of Capital standard for lending.

I find this paper ground-breaking and surprisingly frank. I wonder exactly why the BOE decided to “come clean” with it at this time, but no matter — the fact is that they did so and once you are given to understand this then you also wind up understanding how both commercial banks and central banks (when they engage in “QE” and similar schemes) are in fact robbing you.”

http://market-ticker.org/akcs-www?post=228869

#149 Randman on 03.22.14 at 1:21 pm

Linda

People go to high end restaurants …for atmosphere…to see and be seen…..and social reasons …..and to be catered to…it’s not really about the money or food

Starbucks create that …using coffee

#150 airhead princess on 03.22.14 at 1:32 pm

DELETED

#151 World According To Garth on 03.22.14 at 1:41 pm

#31 Cici on 03.21.14 at 7:31 pm
#1 World According to Garth

Sorry honey, but it’s YOU who drank the Kool-Aid – From the official Greenpeace website:
——————————————

Yes your right. RECORD cold temperatures around the world for several YEARS now is all a fantasy.

Oh and how abooot that north west passage that all the ships will be going through this summer. Oh wait !! It’s full of ice.

Sorry…..FAIL

All taxes are about keeping Govt afloat. That’s it and that’s all. So until they start firing a major portion of their workforce we are all going to drown in taxes.

#152 Steven on 03.22.14 at 1:51 pm

Yes indeed any statement about real estate being too expensive or being a crime against humanity is apt to be recieved as heresy or an attack on real estate cultists. I run into this when I express my views about real estate with my brother. As you point out real estate is where people have a big chunk of their life savings and emotional capital. For them it is more than just a place to live. That way of thinking however puts the less afluent and well paid in a position where they might have no place to live. This is where the crime against humanity idea comes in. Deprivation of decent habitat due excessive greed and speculation.

#153 Bottom Feeder on 03.22.14 at 1:54 pm

Comments on US oil imports
I just watched the video on Rex Tillerson, CEO of Exxon Mobil discussing energy self sufficiency. He is not talking about oil production equaling oil consumption. He is talking about general energy production which includes natural gas. http://www.cnbc.com/id/101321945. From government reports, oil production will hit 9.2 million bbls/day in 2015 thanks mostly to North Dakota production which has hit 1 million bbls/day. US oil consumption is expected to hit 19 million bbls per day in 2015. Some reports for 2014 say the US produces half of it’s requirements. So Garth, oil exports to the US from Canada (mainly from Alberta) will be just fine. You have-not provinces have no reason to fear because Alberta be sending you equalization payments for some time, derived mostly from the Oil Sands royalties, and Calgary house prices will benefit from it.

#154 Linda Mulligan on 03.22.14 at 2:15 pm

Thing about retiring to another country that the stories don’t seem to focus on is the tax on your income. Canada has reciprocal tax agreements with just about every country it seems & most of those retirement paradises tax your retirement income – up to 25% of it depending on where you end up. Medical care is not free either. Of course, many of those countries have such a low median income level compared to Canada that even with taxation & paying for medical care you can live a pretty good life – for now.

#155 truth seeker on 03.22.14 at 2:17 pm

“So critics abound. In fact there are whole web sites devoted to tracing my lineage from doofus to dickhead, authored by people who sure need to get out more. But I ignore them.”

Your critics are afraid of being exposed by their fraud and disinformation. They simply feel threatened by your honesty in helping people see the truth about real estate today and helping them find other ways to become financially secure.

“Any fool can criticize, condemn and complain – and most fools do.”
Benjamin Franklin

#156 Nemesis on 03.22.14 at 2:21 pm

#TheTechtopus #SideShows #RevengeOfTheNerds

@Ralph/#125

“But all the while, the millionaires and billionaires who control the companies I own bits of are making real money doing real business. Who cares about the sideshow?” – RC

For more than a few Gazillionaires… business just got ‘realer’, Ralp… so to speak.

On the BrighterSide, it’s going to be a fascinating SideShow…

[PandoDaily] – Revealed: Apple and Google’s wage-fixing cartel involved dozens more companies, over one million employees

…”Back in January, I wrote about “The Techtopus” — an illegal agreement between seven tech giants, including Apple, Google, and Intel, to suppress wages for tens of thousands of tech employees. The agreement prompted a Department of Justice investigation, resulting in a settlement in which the companies agreed to curb their restricting hiring deals. The same companies were then hit with a civil suit by employees affected by the agreements.

This week, as the final summary judgement for the resulting class action suit looms, and several of the companies mentioned (Intuit, Pixar and Lucasfilm) scramble to settle out of court, Pando has obtained court documents (embedded below) which show shocking evidence of a much larger conspiracy, reaching far beyond Silicon Valley.

Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.”…

http://pando.com/2014/03/22/revealed-apple-and-googles-wage-fixing-cartel-involved-dozens-more-companies-over-one-million-employees/

#BonusZen:

http://youtu.be/Hw6zrInbtQE

#157 Words of Wisdom on 03.22.14 at 2:42 pm

I am reminded of these words from your post Mr. Turner,

I would rather be right than popular.

#158 espressobob on 03.22.14 at 3:01 pm

#133 Killaboy49

GIC’s, so called high interest accounts, individual stocks, and yes, Gold. Bad idea dude.

Index investing might be better? The learning curve is up to you!

#159 Republic_of_Western_Canada on 03.22.14 at 3:03 pm

#133 killaboy49 on 03.22.14 at 11:40 am

So I shouldn’t have investments in GICs and other banky stuff, stocks, real estate, or left in cash. What’s left? Gold?

Who said no investments in stocks? Of course you should have investments in the right stocks. Diversified, of course.

Start off with going into preferred shares which have a decent dividend payment. They don’t jump around nearly as much as common shares. Concentrate on the dividend payout and rating on the share. Typical is about 5% dividend yield and rating of Pfd-2L on up.

Identify a couple dozen different stocks in different industries – banking, pipelines, energy, food, agriculture; as well as some REITs. Maybe some from the US and Europe too. Look at their charts over the last couple of years and find something that’s gone down, but has levelled out and is starting to go back up a bit. Read up on each of them to see what things look like for them over the next couple of years. All this homework should take several hours a week.

Spread half your money over the best dozen of them, over the different industries. Wait a few weeks and put the other half of your money into those, but a little more into the better ones and a little less into the ones that haven’t moved yet.

DON’T DUMP ANY OF THEM LATER JUST BECAUSE THEY’VE GONE DOWN 3 OR 4%. You mostly don’t care about their share prices over the short term, because you’re really interested in the dividend over the next few years. Prices go up and down always, take advantage of that when you buy and sell, but don’t get freaked out over it in the meantime. Then check them once a month, not every day.

#160 Totalchaos on 03.22.14 at 3:04 pm

I am an “at home parent” of four kids. I prepare all of our food from scratch, patch jeans, ferry children, shop specials, grow veggies and the like. My partner and I worked out that I would need to earn $80,000/year for us to be ahead financially as our food and clothing costs would spike, we would need a nanny, increased transportation costs (second car,insurance, repairs, gas). Home maintenance would be farmed off as we wouldn’t have the time or inclanation to tackle them after a “full work week”. We may have nicer, newer stuff, but we would have less family time. Grocery shopping takes half the time on a tuesday morning compared to a saturday!

Now the kids are getting older, we wouldn’t have the same childcare costs, but for me to work full time the costs would be significant to our free time. My spouse would need to rush home to make dinner on “their night” so kids could make soccer practice on time. Weekends would be spent mowing the lawn, grocery shopping and doing laundry. Anyone who thinks cleaning up after a family of 6 can be done in one hour a week has shockingly low standards.

Some people think pride of ownership with a house is worth the financial sacrifice. We believe free weekends and evenings with our kids and each other are worth the financial sacrifice.

#161 SRV on 03.22.14 at 3:11 pm

pretty short piece for topic with seeming endless possibilities GT… just sayin’

#162 Stickler on 03.22.14 at 3:34 pm

@ #138 Linda Mulligan on 03.22.14 at 11:53 am

You forgot that:

1. chefs have RESTAURANTS that have to be paid for, and utilities too….you are looking at meal ingredients & prep only.

2. Wine at a restaurant is double or more the price of retail.

If you are a homemaker and feel that your skills are that great, maybe you should consider opening a fine restaurant.

According to your logic you will easily make 4 trillion per year!

#163 Waterloo Resident on 03.22.14 at 3:40 pm

In this economy where high-paying jobs for young grads are so hard to find, would a man have to be Nuts to just give away half of his life savings in the name of love, especially if his inheritance he just received is in the millions?

I was listening to some co-workers argue over lunch; the women were supporting the institution of marriage while almost all of the guys were badmouthing marriage, saying that there is nothing in it for guys these days. I was trying to read the paper, but one guy said something that really caught my attention. He said that he 3 sons; all of them have either been divorced or are in the stages of getting divorced, and all of the ex’s will be getting huge windfalls from those marriages, none of them lasted more than 5 years each. He said that for a woman marriage is like winning the lottery because she gets half of whatever savings the guy has. I was looking at some new car ads in the paper and thinking about how it would be nice if i had some extra savings to buy a nice new ride, and that is when it hit me that if a lady is married to a guy for only 2 or 3 years, a really rich guy, with lots of money, then she divorced him, she would get half of his stuff and she wouldn’t have to worry about the price of new cars like i was doing right there at that moment.

Then I spun that whole situation around and I wondered to myself; If I was the guy, and i had a ton of money, wouldn’t it be sort of NUTS for me to risk giving half of my money away on someone who could change their mind about me in a heartbeat, especially when you consider that it is not particularly easy to find $100,000 per year jobs these days?

#164 Stickler on 03.22.14 at 3:42 pm

@ #153 Bottom Feeder on 03.22.14 at 1:54 pm

You have-not provinces have no reason to fear because Alberta be sending you equalization payments for some time, derived mostly from the Oil Sands royalties, and Calgary house prices will benefit from it.

———————————————-

Yes, thank got for Alberta’s massive talent for having a massive tar sands deposit located in its boundaries.

Nova Scotia’s off shore resources were going to help them…but then the Feds came in a said that it was far enough offshore that it belonged to Canada….not Nova Scotia.

Many people think resources in CANADA should benefit CANADA. Imagine that…

#165 Stickler on 03.22.14 at 3:52 pm

#162 Stickler on 03.22.14 at 3:34 pm

@ #138 Linda Mulligan on 03.22.14 at 11:53 am

You forgot that:

1. chefs have RESTAURANTS that have to be paid for, and utilities too….you are looking at meal ingredients & prep only.

2. Wine at a restaurant is double or more the price of retail.

If you are a homemaker and feel that your skills are that great, maybe you should consider opening a fine restaurant.

According to your logic you will easily make 4 trillion per year!

——————————-

I said you are looking at meal ingredients & prep only.
and forgot the total other obvious

#3…the restaurant pays for the ingredients too…the house wife does not.

Don’t get me wrong. I love housewives, and support that decision…but I have to call shenanigans on the notion that the work the typical housewife does is valued at $90K – $150K or more per year.

You could hire someone full time for 8 hrs per day at min wage for well under 25K per year….

Give them room and board (and a car & car insurance) and you can pay them much less.

Buy them clothes & take them on vacation with you and well…you get the picture.

#166 gmc on 03.22.14 at 4:11 pm

one reason only that Garth sucks, his Keynesian view.

#167 saskatoon on 03.22.14 at 4:18 pm

#31 Cici

so much dogma…rhetoric…emotion…both sides.

so little fact, depth of knowledge.

#168 Stickler on 03.22.14 at 5:20 pm

@ #160 Totalchaos on 03.22.14 at 3:04 pm

I am an “at home parent” of four kids. I prepare all of our food from scratch, patch jeans, ferry children, shop specials, grow veggies and the like. My partner and I worked out that I would need to earn $80,000/year for us to be ahead financially

—————————————–

Please do us all a favor and detail it out for all of us.

I would love to see how you calculate that….I will be checking back often to see your details.

#169 Stickler on 03.22.14 at 5:29 pm

@ #160 Totalchaos on 03.22.14 at 3:04 pm

I am an “at home parent” of four kids. I prepare all of our food from scratch, patch jeans, ferry children, shop specials, grow veggies and the like. My partner and I worked out that I would need to earn $80,000/year for us to be ahead financially

———————————————

If you imagine the tasks that your situation would have in common with supporting 2 housebound seniors -> cooking, basic household assistance (chores & small maintenance), laundry, shopping, dr appointments (there are many), sewing, etc.

Now tell them you need to charge them $80,000 per year….and then you can clean their adult diapers.

I love this discussion, because I live in reality, and the comments here are so elite It makes me want to vomit. So out of touch you all are.

#170 Old Man on 03.22.14 at 5:44 pm

#163 Waterloo Resident: The problem of anticipating a divorce can be negated for all men with my simple formula in life. Hey just marry a wealthy woman, relax, and live the good life ^o^.

#171 Stickler on 03.22.14 at 5:45 pm

And worth mentioning -> the future of house ownership will not only face liquidation by struggling (or warmth seeking) seniors (Most of the Seniors I know are trying to sell or planning to sell) but also:

– higher interest rates

– higher property taxes (dude, the infrastructure IE water mains, are like totally gnarly, and need replacement, add in more transit -> that $hit ain’t cheap)

– General user fees and transfer (BS) taxes are always on the rise

– utilities are never going down.

#172 espressobob on 03.22.14 at 5:53 pm

Sticker & Linda Mulligan

The foodservice industry is more volatile than those who work in it are aware!

#173 bdy sktrn on 03.22.14 at 6:00 pm

stay at home dad here – we figure the first 50-60k of my earnings would be needed to cover the lost services if i went to work.

a single soon to be teenage kid – so no daycare, but there is value to being around to raise your kids yourself.

the breakdown
meals – add 85/day for eating out/pre made meals/coffee – 30k/yr
housework – 120/wk for a maid 6k/yr
yardwork – 2k/yr
home mtce – 5k/yr
car mtce – 4k/yr (2 cars _2 motorbikes)
wood heating 1.5k/ yr
capital improvments house/cottage 8k/yr
having the time to find sales/craigslist deals vs full retail 4k\yr

60k after tax – or 80k before – hey i think i need a raise!

plus i get to know my kids friends, drive and referee for school sports teams , attend field trips to help out, etc

#174 Debtfree on 03.22.14 at 6:00 pm

There is hope for real journalism . Vice . On HBO . And the laughing idiot retired from global bc . Now if they could only get off the remax teet . Do they really think that remax has a weather sattilite ?

#175 economictsunami on 03.22.14 at 6:13 pm

Three interesting reads:

Living beyond our means:

http://www.macleans.ca/economy/money-economy/living-beyond-our-means/

David Stockman: Fisher Outs Bubbles Ben: QE Was A Massive Intended Gift To The 1%:

http://davidstockmanscontracorner.com/2014/03/22/fisher-outs-bubbles-ben-qe-was-a-massive-intended-gift-to-the-1/

EL-ERIAN: The State Of ‘The New Normal’

http://www.businessinsider.com/el-erian-state-of-the-new-normal-2014-3

Go Habs…

#176 Kylie meyer on 03.22.14 at 6:27 pm

My parents have been clear that they want to leave me money in their will and that they expect the same from me with my kids (when I have them).

I read a couple posts where people get angry because some parents leave their kids some money, I did my part by getting good grades through school. I didn’t CHOOSE to be born. My parents did that and have accepted the responsibility.

If everyone does get $56,000 in their wills then why do people complain about it? Everybody gains from it.

I think some of you make things more complicated than things really are.

#177 DM in C on 03.22.14 at 6:49 pm

” Yet when a homemaker does the same thing (with the likely exception that they did not make a fancy pattern with some reduction & place a cute sculptured vegetable rose or chocolate/spun sugar frou-frou on top of the plate) it is somehow worth the amount chefs are paid & they don’t usually go it alone – they have an entire staff of sous chefs, dishwashers, wait staff & a wine steward to support their efforts in the kitchen. ”

There’s a HUGE difference between a homemaker and a chef. Chefs are trained and educated. Any one can stay at home and throw on hamburger helper at the end of the day.

Asinine comparison.

#178 jess on 03.22.14 at 7:05 pm

… inheritance money will be needed for that annuity to pay for those ridiculous “assisted” living centers

although…
Pension shakeup in budget leaves £14bn annuities industry reeling
The Guardian – 1 day agoPension shakeup in budget leaves £14bn annuities industry reeling … and could deal a devastating blow for the UK’s £14bn annuity business.Annuities: What now for retirement income?
BBC News – 23 hours ago150000 in rush to cancel annuity buying
Telegraph.co.uk – 1 day ago

=============
Caterpillar said to be focus of Senate committee tax probe
Panel investigating whether the Peoria-based company improperly moved profit outside the United States
http://www.chicagotribune.com/business/breaking/chi-caterpillar-tax-probe-20140321,0,51873.story
=
May 10, 2011
territorial tax system /country by country reporting
http://ctj.org/taxjusticedigest/archive/2011/05/speaker_boehner_calls_for_terr.php

tax extenders
The most costly of the tax extenders is the research credit, which is supposed to encourage research but actually subsidizes activities no one would call research, e.g. (a new label ?)and activities that companies would do in the absence of any subsidy.
http://www.ctj.org/taxjusticedigest/
The general rule is that American corporations are allowed to “defer” U.S. taxes on offshore profits that take the form of “active” income (what most of us think of as payment for selling a good or service) as long as those profits are officially offshore. The general rule also is that American corporations cannot defer U.S. taxes on “passive” income like dividends or interest on loans, because passive income is extremely easy to shift from one country to another for the purpose of tax avoidance.

#179 Waterloo Resident on 03.22.14 at 7:05 pm

To #170 ‘Old Man’
You said: “The problem of anticipating a divorce can be negated for all men with my simple formula in life. Hey just marry a wealthy woman, relax, and live the good life ^o^.”

My answer: REALLY? SORRY BUT NOT ON THIS PLANET, not unless you are insanely lucky. When a woman has a ton of cash herself, she realizes that she doesn’t need a man and thus trying to marry a woman who is rich is nearly impossible unless you are a famous Hollywood actor or some famous sports star yourself.

Just go to any single lady who has $1 Million in savings and ask her if she would even consider marrying a man who is ‘BELOW HER’ financially. She will kick you to the curb so fast you won’t know what hit you.

So please, be serious here.

Anyways, it’s been shown that men earn about 25% more than women so I guess it’s sort of fair that the women expect the man to have at least 25% more than they do. The problem lies in the fact that even rich women don’t want ANYTHING to do with a guy unless he has at least DOUBLE OR TRIPLE of what she has. That’s the truth in the real world.
So when that happens, and a $3 Million guy gets his butt divorced by a lady worth $1 Million, she still ends up leaving him with a couple of million added to her purse, not a bad haul for living with him for only a few months eh?

I have a lady friend who is very successful and with quite assets, who was thinking of marrying a guy who has absolutely NOTHING. I showed her the legal implications that a divorce would have for her, and after seeing the truth of divorce today, her face turned WHITE with fear. She quickly back-tracked and cancelled the engagement and marriage to that guy. Now they are only just seeing each other but not living together. At least i was able to save one person from the hardship that a nasty divorce would have caused.

#180 Daisy Mae on 03.22.14 at 7:32 pm

#74 Linda: “In fact, I pointed out that the money was the parents (THEIR) money & the kids should not in any way expect they should be entitled to that money.”

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

I was simply reiterating your statement.

#181 Totalchaos on 03.22.14 at 7:33 pm

# 168, 169 Stickler

Eldercare for 2 seniors would cost $20/h for 7.5 hours per day. It isn’t cheap, as many people will find out when the inheritance they were counting on is spent by mum and dad on nursing homes and care aides.

My spouse works 10 hours per day plus commute time (self employed) so 11 hours minimum per day works out to almost 60k (one week holiday as self employed). Noticed how I said “get ahead financially”? If I was earning 60k per year, I’d be working for free and my spouse and I would be giving up our evenings and weekends.

#173 bdy sktrn did a great breakdown, but each household will have different numbers. My food savings is huge as my family is large and very active but car maintanence savings is nil as I don’t do that.

Being an at-home parent isn’t for everyone, as not everyone has the skill set or is a single parent (or married to a jerk). To suggest that bdy and I are lazy (and elitist!) and not contributing to our respective household finances is rediculous.

#182 Aggregator on 03.22.14 at 7:41 pm

Craiglist one bedroom GTA rentals just keep shrinking. Chart

#183 gladiator on 03.22.14 at 7:43 pm

Why fear losses from marriages? Just get a prenup.

#184 gladiator on 03.22.14 at 7:43 pm

from divorces, that is.

#185 bdy sktrn on 03.22.14 at 7:46 pm

“throw on hamburger helper”

——–
well yes , if you want to eat junk.

a very wide variety of fresh and healthy real food (3+fresh vegorfruit/meal min), tailored specifically to tastes and dietary requirments of each diner , prepared to perfection takes a bit more time ;) just like the chefs.

only hy’s does a better steak than me, at 200for dinner. ouch.

#186 TurnerNation on 03.22.14 at 7:54 pm

I guess the “Anti-Garth” portfolio would include those risky hotel ballroom 8% return mortgage funds (for poor souls who borrow at prime +5%) and 2% GICs (I piss a better return sometimes than this!).

Where were those “market-linked” GICs when markets were at their generational lows, 5 years ago.
Answer: The house (banks) always win.

#187 Happy Renting on 03.22.14 at 7:58 pm

#179 Waterloo Resident on 03.22.14 at 7:05 pm

“When a woman has a ton of cash herself, she realizes that she doesn’t need a man”

So how come women with money realize this but men with money don’t realize they don’t need a woman?

#188 Daisy Mae on 03.22.14 at 8:04 pm

#129 Raven: “In business, or writing R.E./financial blogs, you want a friend……buy a dog.

No. Adopt one. — Garth”

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

Adopting a cat at the SPCA will cost about $125. And that’s a 2004 price…

#189 Freedom First on 03.22.14 at 8:24 pm

#82 Linda Mulligan

Thank you for the $96,261.00 figure. Now, subtract the cost of me having to put up with a live-in wife/common law wife, plus the financial burden of all of her expenses.
Wow, having a girl friend I don’t have to live with=*****Priceless*****

#190 Old Man on 03.22.14 at 10:26 pm

#179 Waterloo Resident: – I am sorry that you are missing out as the women under 40 are everywhere with sheltered fortunes. They are not waiting for an inheritance from their parents as the grandfather left them a big trust fund; nor do they give a hoot for a man with money. They have lived the good life since birth and they are looking for a husband with common interests, love, and perhaps starting a family. A simple life like everyone else which is down to earth as that becomes the agenda as money has no value without the other. Yes they are out there as have met them.

#191 ChaChing on 03.22.14 at 10:37 pm

#75 Josh

The horse has been dead for many many years.

#192 Hawk on 03.22.14 at 11:11 pm

#163 Waterloo Resident on 03.22.14 at 3:40 pm

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

The law in Canada grants a spouse half of all future income upon divorce, not half of their wealth. This also assumes the spouse has no income of their own, otherwise the two incomes are added together and then divided by two with a 50/50 split.

An exception is if an individual owned a house in which they lived together (considered a matrimonial home) than the spouse gets 50% automatic ownership in the house.

Ofcourse if the rich spouse became rich after marriage, the the wealth is also split 50/50.

#193 Hawk on 03.22.14 at 11:20 pm

#163 Waterloo Resident on 03.22.14 at 3:40 pm
===================

There is also the option of having a pre-nuptial agreement for the rich spouse (however that is binding for up-to only 10 years)

#194 Scully on 03.22.14 at 11:22 pm

#82 Linda Mulligan
Wow, 96K as a stay at home mom?! Does this include “snuggling?” Wait till I show this figure to my husband. I have a feeling i’m getting poor performance review, especially on my last quarter. ;-)

#195 Future Expatriate on 03.22.14 at 11:33 pm

The CREA are like conservatives; no matter how impossible or absurd or just plain stupid a concept is, they believe:

1. What they say is truth just because they say it.
2. That they create reality if they say something long enough.
3. That they’re never wrong.

Which is why it’s so much fun to see them consistently and continually shocked out of their minds.

Until the next asinine notion.

#196 Linda Mulligan on 03.23.14 at 12:00 am

Chef’s are trained/educated – so are homemakers as school is something children are required to attend. Chef’s have restaurant expenses to cover – maybe, depends if they own or are working for someone else. Seems to me to be considerable resistance to accepting that homemakers time/efforts are worth anything by some. #189 – you have a girlfriend? That’s priceless!

#197 Cici on 03.23.14 at 12:00 am

Oops, watch out flippers…Revenue Condo, ahem, I mean Revenue Canada, is coming after you ;-)

http://ca.news.yahoo.com/revenue-canada-cracking-down-condo-sales-023421464.html

#198 farm wife on 03.23.14 at 12:17 am

Stickler #169″I love this discussion, because I live in reality, and the comments here are so elite It makes me want to vomit. So out of touch you all are.”

I would have to agree as a lot of us rural gals manage to have an outside job of some sort ,look after the kids,cook and keep the house,garden , help during harvest,seeding and haying plus look after the livestock while our husbands have a job off the farm.

If we were to put a price on our work load I think it would still be shy of 80k.

#199 espressobob on 03.23.14 at 12:26 am

#176 Kylie meyer

When it comes to an inheritance, don’t hold your breath! Parents live on, need cash flow and won’t croak in a timely way!

Your financial future might likely become your own problem?

#200 Chris on 03.23.14 at 12:43 am

Don’t you love realtors? No matter how loudly they yelp, how much banks like RBC play the media, how desperate lenders become, how far prices ascend in this final stage, this housing bubble is now gushing air from every seam. Asking prices are falling from the South Shore of Nova Scotia to the streets of Vancouver. Sales are plunging in some markets, even as prices rise. And it’s all the more remarkable because money’s never been so cheap and available.

#201 Castaway on 03.23.14 at 12:54 am

Garth – Not too many comments from you on tonight’s posts. Assume you are tucked into a nice Scotch or red wine. I am polishing off a quality Merlot myself.

The fact I got down this far in comment section gives credence to your blog. Hell, I have ADD, among other things! While I don’t always agree with you and have called you out before, overall your blog rocks. Critical analysis, abstract thought and Smoking
Man. Who could ask for more (: Keep it coming.

#202 Kingarthur on 03.23.14 at 1:13 am

Garth is right about most of the topics covered here except the presence of HAM in the Vancouver market:

http://www.vancouversun.com/fight+vanishing+Vancouver/9647882/story.html

#203 Derek R on 03.23.14 at 1:18 am

#148 Randman on 03.22.14 at 1:17 pm wrote:
If the economy produces 100 bushels of corn (and only that) and there are 100 “dollars” (units of currency), and those are the only two items in the economy, the natural clearing price of a bushel of corn will be approximately one of the dollars.

The only two items in the economy? In that case, if I were the owner of the 100 bushels, I’d just wait for a few months until you died of starvation. Then I’d own my 100 bushels and your 100 dollars. If I were feeling really kind-hearted, I might wait until you were absolutely starving and then sell you a bushel for 50 dollars.

The point here is that I hold the whip hand because you need my corn but I don’t need your dollars. And that means that you will pay whatever price I set.

#204 4 AM Sunrise on 03.23.14 at 1:24 am

#186 TurnerNation on 03.22.14 at 7:54 pm

Where were those “market-linked” GICs when markets were at their generational lows, 5 years ago.
———————————————————

Ask my mom. She’s thrilled that hers returned 20% over 5 years. Me, I just nod and acknowledge, and nod and acknowledge some more. As long as my Freedom 55, debt-free Boomer parents live spartan lives, well below their means (they and the dogs live on even less now that I moved out), they will never understand how badly they were ripped off. And who am I to say anything? It’s just money, and it’s not my money. I’m not an inheritance-grubber. As Asians they’ll probably live long healthy lives, and when they’re older they’ll save on nursing home costs because I’ll be moving back in.

#205 Turtle on 03.23.14 at 2:40 am

#163 Waterloo Resident

“He said that for a woman marriage is like winning the lottery because she gets half of whatever savings the guy has…”

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

So for the guy to win a lottery is to get a wife, who will take care of him till he dies.

That is why the couple’s homeownership rate in Canada is so high, because of divorce scare on men’s side. You, Garth, don’t talk about it, but maybe if women stop playing hard ball in marriage, everything will be different… and easy.

It is a women’s game – “Marriage, House, Kids”. And the men’s game is “Please your wife and Stay out of divorce”. I don’t think I spilled the secret.

#206 tim toddle on 03.23.14 at 6:07 am

#176 Keylie meyer

“I didn’t CHOOSE to be born. My parents did that and have accepted the responsibility.”
————————————————————–

Wow. The saddest statement i have ever read on this blog.

Talk about sense of entitlement .

#207 Bottoms_Up on 03.23.14 at 8:15 am

#173 bdy sktrn on 03.22.14 at 6:00 pm
—————————————–
Congrats on your choice of lifestyle and making it work.

But I think your analysis is flawed in how much your ‘services’ at home are worth. You have to factor in the DIFFERENCE in what your costs would be working vs. costs not working.

So yes there is a food savings but likely not as much as you think (especially if you made an effort to pack lunches). I find it hard to believe that your ‘at work food costs’ would be $1700/mo higher than what you pay to eat at home. Also, if you held down a job you would also likely still be able to do some of the other things that you factor into your worth (some house/yard work, some cottage/car maintenance, some deal searching on-line etc.). So those estimates could realistically be cut in half.

Also, you could likely have maid service at 1/2 your estimate.

So your actual ‘worth’ being at home may be more on the order of 30k.

And you have to compare that to what your occupation would have been, how likely it would have been for you to move up and earn more money, and offset that with the intangible value of knowing your family and their friends better, less family stress etc.

#208 Bottoms_Up on 03.23.14 at 8:28 am

#163 Waterloo Resident on 03.22.14 at 3:40 pm
————————————————–
The thing about marriage is that it shouldn’t be a decision that can be changed in a ‘heartbeat’. Marriage is suppose to be a commitment between two people to do everything reasonably possible in order to make it work (i.e., stick it out unless the circumstances are very dire).

I think sometimes people think the ‘grass is greener’ and that they made a poor choice in mate, but in many cases they will have other or similar problems with someone else. Commitment, and trying your absolute best to work it out needs to always be first and foremost in both party’s minds.

We have lost our way as a society with a divorce rate of 50%.

#209 Bottoms_Up on 03.23.14 at 8:31 am

#160 Totalchaos on 03.22.14 at 3:04 pm
———————————————-
At least you recognize there is a financial sacrifice.

But a nanny is not a ‘need’, it is a want.

And your costs wouldn’t be that significantly greater for you to work than to stay home (you could easily get by on a $200/mo clothes and increased food budget).

You’d be surprised how empty the shopping places are early Saturday morning.

And by eating leftovers or setting up a morning slowcooker, you can still get to your kids soccer game on time.

#210 gut check on 03.23.14 at 8:45 am

Wow, the comments today are like.. the twilight zone.

My life experience is quite opposite from the consensus on almost every topic that many posters tonight are so emphatically “sure of!!!”

My Boomer parents are still waiting for their inheritance and I expect after it is divvied up between the siblings, used by them all to go from buffet to buffet on cruise ships the world over, and then doled out to the step kids here and there that I likely won’t see a dime. (which is fine.)

I was a working mom (still am, but my daughter is grown now) and childcare / clothing / transportation / food costs DO, in actual fact, make the take home monetary benefit from full time work almost pointless. I suppose if I had have become a doctor that might be different, but I was *stupid* and took a soft degree. (yes, that was sarcasm… we cannot all be doctors, lawyers or engineers.)

I was also a non working mom for a few years and I’m very glad I was. There most certainly is value in it.

Finally, it is not my experience that all men eschew marriage and all women crave it. It is not my experience that all women are waiting for some dupe of a man so she can take him money. It is, however, my experience that way too many men are absolutely paranoid that this is the case.

#211 Chillin' in the 'peg on 03.23.14 at 8:49 am

Polar Vortex Scuppers Sales

http://www.winnipegrealtors.ca/Resources/Article/?sysid=2131

#212 T.O. Bubble Boy on 03.23.14 at 9:18 am

@ #186 TurnerNation on 03.22.14 at 7:54 pm
I guess the “Anti-Garth” portfolio would include those risky hotel ballroom 8% return mortgage funds (for poor souls who borrow at prime +5%) and 2% GICs (I piss a better return sometimes than this!).

Where were those “market-linked” GICs when markets were at their generational lows, 5 years ago.
Answer: The house (banks) always win.
——————————–

Market-linked GICs have been out there since At LEAST 1998-1999.

I actually owned some pre-DotCom bubble exploding… definitely did not get the market “upside” on those ones.

The thing is: even if the market has recovered 150% over the past 5 years (S&P 500 up 142% on a 5-yr chart I looked at this morning), all of those market-linked GICs are capped. i.e. there is some max gain (usually sub-10% per year) that you can obtain, regardless of what the market does.

#213 T.O. Bubble Boy on 03.23.14 at 9:32 am

It’s TAX TIME! (boo)

For all you condo “investors” out there: Revenue Canada cracking down on condo sales…
http://ca.news.yahoo.com/revenue-canada-cracking-down-condo-sales-023421464.html

The sob story in the article is just stupid: some women who bought a condo for her mother, and then had to sell it AT A PROFIT because the mother took ill and couldn’t live there. Why would anyone think this isn’t an investment gain? Was it a primary residence for anyone?

#214 Smoking Man on 03.23.14 at 9:38 am

This long winter has made insane. I don’t remember any like this.

Driving back last night I swear I saw flying pigs dressed as ballerinas. Nearly ran me of the road.

Note to self. Grow up, not the 60s anymore. Stop trying it experience a Hunter S Thompson day.

Eat better, drink less and stop smoking and trying to experiment with things 20 somethings might try.

#215 meslippery on 03.23.14 at 10:15 am

My take away from Red Flags.
Your really pissing people off Garth, with your constant
calls for 70% real estate crash.
They really think its all about add revenue.

I hear most people also believe in angels. — Garth

#216 Ralph Cramdown on 03.23.14 at 10:29 am

#213 T.O. Bubble Boy — “The sob story in the article is just stupid: some women who bought a condo for her mother, and then had to sell it AT A PROFIT because the mother took ill and couldn’t live there.”

Some woman?
– Accountant Fairgate Custom Homes
– President, Board of Directors CAPS Property Management – [York Condominium Corporation] #512
– Internal Operations Manager / Accounting Manager
Toronto Decorating Corporation. Managed day to day activities of a leading Toronto renovations company.

http://ca.linkedin.com/pub/dana-malczyk/32/21a/436

I think it’s fair to say she knew exactly what she was doing, and figured she’d get away with it because everyone else was.

With Harper axing many auditors at the CRA, most people WILL get away with it, but a few stories like this will end up in the media to warn away those who can’t figure the odds.

#217 meslippery on 03.23.14 at 10:47 am

I like Guardian Angels.
(A guardian angel is an angel assigned to protect and guide a particular person or group.)
Charlie’s Too.

#218 Macrath on 03.23.14 at 10:49 am

Eau de Condo:
A Whiff of ‘Welcome Home’
Forget the loaf of bread in the oven. Developers are using custom scents to get buyers to warm to a home

http://online.wsj.com/news/articles/SB10001424052702304185104579437590964522278

#219 Aggregator on 03.23.14 at 10:52 am

#213 T.O. Bubble Boy

Dana Malczyk of Toronto says she tried to buy a condo for her mother so she could be closer to her family.

But by the time it was constructed three years later, her mom’s health had taken a turn for the worse. She instead moved into a retirement home, having never lived in the condo.

Dana Malczyk Linkedin Current Job: Accountant at Fairgate Custom Homes

Obviously this was an assignment sale where no title is transferred until a unit is assigned just before occupancy. This is the center of CRA's campaign against presale flippers who claim their purchase is a primary residence. The problem is, because no title is transferred, there is no record of ownership, therefore CRA sees it as a regular asset sale that can be fully taxed.

#220 DM in C on 03.23.14 at 10:57 am

“Chef’s are trained/educated – so are homemakers as school is something children are required to attend.”

HAHAHA I don’t know what school you went to, but I am pretty sure kids don’t go, required or not, with the expectation to be homemakers, let alone is it a training ground for them. Oh my.

Required K-12 attendance is not even on the same level as training a chef takes. You’re comparing apples to lug nuts.

Cripes there’s a lot of cognitive dissonance on this board.

#221 Linda Mulligan on 03.23.14 at 11:02 am

Regarding divorce – the comments here are so 60’s. The man gets zip, the woman gets it all mantra has to include children & child custody, though I concede there may well be a number of cases where the woman has never worked, is well past youth & if a homemaker be given at least half the assets. However unless I’ve been misinformed the law splits assets down the middle where the couple is childless or if the wife is the higher income earner (shocking, but it does happen) the wife is the one who can & does get sued for support. Plus, if for some reason the husband gets child custody the wife again is on the hook for support, just the same as a man would be. Again however the fact is most women still make less than most men, though in another generation or two that difference may pretty much vanish as many more women are choosing to become doctors, lawyers, engineers, chemists etc.
#198 Farm Wife – your comments on your work load & the fact you also work off the farm just proves my point that your work has value. Yet you yourself understate that value – why? From the sound of it you are working at least 8 & more likely 10-12 hours a day – even at minimum wage (round to $10 for ease of calculation) & using only 8 hours (as sticklers will say you had to do some of that work as a basic part of living so the extra 2-4 hours a day is stuff you would have done anyway) your time is worth at a Canadian minimum $29,200 per annum. Given that living assistance aide get at least $17.95 per hour in the USA your actual labor value should be more properly placed $52,414. And I can guarantee that those aides are NOT feeding or mucking out livestock unless you consider their elderly charges ‘livestock’.

#222 Daisy Mae on 03.23.14 at 11:09 am

#195 Future Expatriate
“The CREA are like conservatives; no matter how impossible or absurd or just plain stupid a concept is, they believe:

1. What they say is truth just because they say it.”

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

I know alot of people who think that way re politics, religion…. :-)

#223 Squatter on 03.23.14 at 11:12 am

When I lost my mind and went into politics…. – Garth
————————
You are an independent thinker like me Garth.
Maybe working in a group doesn’t suit you much, just like me.

#224 Daisy Mae on 03.23.14 at 11:29 am

#203 Derek R: “The point here is that I hold the whip hand because you need my corn but I don’t need your dollars. And that means that you will pay whatever price I set.”

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

You will get what the market will bear. And no more. Your corn will rot in the fields…

#225 Daisy Mae on 03.23.14 at 11:34 am

#206 tim toddle
#176 Keylie meyer

“I didn’t CHOOSE to be born. My parents did that and have accepted the responsibility.”
————————————————————–

Wow. The saddest statement i have ever read on this blog. Talk about sense of entitlement .

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

This kid has alot of growing up to do…..

#226 T.O. Bubble Boy on 03.23.14 at 11:42 am

@ #216 Ralph Cramdown & # 219 Aggregator

Nice catch — I was offended by the basic premise of the article, and didn’t even bother to look further.

This is COMPLETELY offensive – Real Estate professional gets caught flipping pre-build assignment and tries to weasel out of it by pulling sick mother into it.

#227 Daisy Mae on 03.23.14 at 11:42 am

#210 Gut Check: “…. in actual fact, make the take home monetary benefit from full time work almost pointless.”

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

Exactly. She has to be earning very good pay to realize benefits to her working outside the home after you factor in daycare costs, transportation, wardrobe, convenience meals…the list goes on and on.

Stickler and others feel threatened and argue the point for the sake of arguing….

#228 geogar on 03.23.14 at 11:44 am

Inheritance if any will evaporate into the vacuous abyss of my retirement account. The plethora of head lines warning us of the anemic state of boomers retirement plans must hold some significance. Garth your claim to mindlessness is “mindless” in contrast to the cranium casualty you present above in the Province VD.

#229 T.O. Bubble Boy on 03.23.14 at 11:45 am

More proof that everything in Toronto under $1M CMHC cutoff is is being bid up to $999k:

http://www.realtor.ca/propertyDetails.aspx?propertyId=14200215&PidKey=-1769968690

30.92×50.00 ft, semi-detached, $959k.

what bubble?

#230 Steven on 03.23.14 at 11:47 am

A massive transfer of Baby Boomer wealth looms?
The realtors are having fantasies again.
Boomer wealth is largely their real estate and that requires a buyer if it isn’t being signed over to their homeless children to live in. Getting a portion of an estate might be less rewarding than just inheriting a place to live. A place to live is really all a residential property is supposed to be. Going beyond that could be considered a crime against humanity by some.
For what it is worth Thomas Jefferson was correct when he stated the following,”If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation,
the banks and corporations that will
grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”
If he was alive now and witnessed what the FIRE economy has done in all countries I have no doubt his warning would be almost the same.

#231 Jl on 03.23.14 at 12:04 pm

#173 bdy sktrn

That’s just pathetic. You have a teenage son and you’re too lazy to go get a job so you justify it by finding deals on Craigslist?

Wow.

#232 Old Man on 03.23.14 at 12:19 pm

Those of Ukrainian background in Canada do not be deceived by Caesar as always remember the others who were pandered for election votes in the past – why were you left out then? Better yet why have they been pushed to the back of the bus; its your turn now. A group of old Bolsheviks and neo Nazis backed by Caesar executed a coup on the Ukraine, and he grandstands this operation with impunity. Now for the economics and investments of it all, as there is something afoot as have seen something which is being done in Germany; the plating of new money to replace the Hryvna with new notes. Now if such takes place you know what that means – discount and chaos.

#233 Ontario's Left Coast on 03.23.14 at 12:28 pm

Kylie meyer #60

Please, I find it really hard to believe you’re not a dude posing as an entitled female millennial, because even a real specimen couldn’t come off so blissfully naïve and ignorant as to the realities of human existence. Nice try playing devil’s advocate. On the off chance I’m wrong, boy do I feel sorry for you, girl – time to grab a life.

#234 Andrew Woburn on 03.23.14 at 1:10 pm

#171 Stickler on 03.22.14 at 5:45 pm
And worth mentioning -> the future of house ownership will not only face liquidation by struggling (or warmth seeking) seniors

– utilities are never going down.
============================

You are right. Provincial governments are increasingly taking “fees” out of electric utilities which amount to disguised taxes. BC is a “leader” in this field. I see no reason this trend will not increase. Governments like to tax energy because you have to use it.

I am starting to think that an investment in home energy savings is roughly equivalent to a quality preferred share in that it pays an annual savings “dividend”, mitigates inflation and hedges against the taxman. Roof-top solar electricity generation is growing in the US. Does anyone here have any thoughts on or experience with roof-top solar in Canada?

#235 Smoking Man on 03.23.14 at 1:40 pm

#232 Old Man on 03.23.14 at 12:19 pm

Mark Dice YouTube channel shut down.

Alternative media kicking crap out of MSM

The herd in the West linking Putin was more than our own leaders.

Big boys are taking notice.

Bye bye free speech..

#236 Chickenlittle on 03.23.14 at 1:44 pm

#118 detalumis:

Please don’t have kids.

Kids are a full time job, not an accessory to show off.

They need their parents!

#237 Chickenlittle on 03.23.14 at 2:03 pm

Stickler:

So what you want is a Filipino to clean your house, watch your kids, etc. Hey, you would be paying them minimum wage so at least they could send home $20 a month to support their kids back in the Philippines.

You are so generous!

I’m glad there is someone out there that values the hard work that you are so obviously too good to do yourself.

#238 Daisy Mae on 03.23.14 at 2:32 pm

RED FLAGS poster: “Have you read his blogs? Go take a look. Then read the comments.”

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

Well, I’d never heard of Red Flags but finally checked it out. I didn’t stay long…and that sums up my impression.

Not worth anyones’ time….least of all, Garths’.

#239 Daisy Mae on 03.23.14 at 2:56 pm

#236 Chickenlittle
#118 detalumis:

Please don’t have kids. Kids are a full time job, not an accessory to show off.

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

Exactly. Our kids are our future. They need their parents. They don’t need to be farmed out to daycares, they don’t need to be foisted off on grandparents…just so you can make a buck. They are YOUR responsibility.

#240 gladiator on 03.23.14 at 3:03 pm

Garth, by the number of comments to your blog posts, greaterfool.ca is wildly popular.
I did my share of research in it and even built a web 2.0 company and site (it flopped, but I learned a lot) and know what I’m talking about.
Congrats!

#241 Macrath on 03.23.14 at 3:20 pm

#234 Andrew Woburn

For-sure, any monthly billing that can be eliminated or reduced is immediate $ in your pocket and reduced inflation later on. TV antenna, setback thermostat, efficient lighting, timing appliances for of peak hours and reducing phantom loads all pay handsome dividends.
I`m experimenting with a small solar setup where I`m running my communications equipment (answering machine, cable modem, router, etc ) from solar panels and a deep cycle battery. It also functions as a UPS during power failures . I`ve calculated ROI at 6 years. and will save a hundred a year thereafter.

If I were younger I would seriously consider a large solar investment it`s currently down to about 1$ a watt.

Garth also dabbled as an alternative energy entrepreneur and could surely enlighten us with a post on the subject.

#242 Expat in NC on 03.24.14 at 7:56 am

Here is what I don’t get. When they say this: “…predicts prices will improve in Canada…”, why do they use the word “improve” to mean higher? To me, an improvement in price would be a lower price. I think it is a play on words to make people believe a price increase is always a good thing. The brainwashing continues.