Survivor

CAGED modified

Why do people watch trash like Entertainment Tonight, or the mind-numbing house porn on HGTV? Because we love to compare how we’re doing with everyone else. Reality television lets us safely cut up other people’s lives, denigrate their disturbing choices and dis the junk they own. It’s therapeutic.

So, it’s time for a reality blog. Break out the bad attitude.

Here’s Gerald, who scored buying a place in one of Toronto’s demand hoods in 2007 for $400,000 he now figures is worth at least six. Since that time he’s made some intense decisions, like acquiring a girlfriend and $200,000 in gold. The 37-year-old also has a $300,000 RRSP, mostly doing nothing. “I got cold feet in the first part of the year and now my RRSP is sitting in cash anticipating a downturn in the markets and a chance to buy back in.”

“With regards to the house; we love living here. It’s a wonderful home in one of the most sought after parts of the Beaches.  I’ve done a lot of work to it to make it really lovely and the thought of selling is heartbreaking.  I know owning a home is luxury rather than a real investment.  However, a market drop of 30% would be far more heartbreaking and I am wondering if I’d be better to take my money out of the market for a year or two and if there is a drop I can then come back in to get another property at a discount. My thought is I may even be able to buy something outright as the downturn would get me a discount and I could finally beat those blood thirsty bankers.

“Everyone thinks I’m crazy to consider this, but I feel like no one else is really paying attention to anything but bogus realtor “market updates” and not really examining the true state of our economy.  I on the other hard have taken a crash course on economics since the 2008 downturn, and fear that all that’s been done is to shove the problems under a rug and that these problems will come back to bite us hard , which will be sooner rather than later. What would you do?”

Well, Gerrie has a great set of assets – more than a million in net worth – but virtually every dollar is making him nothing. The gold is dead money while the RRSP cash is earning diddly. And the capital gains within the real estate are likewise yielding no income, with peak pricing meaning there’s little more to come.

What should he do? Mostly, stop overthinking things or tying to time markets. The precious metals have been a disaster since 2011, and by going to cash inside his retirement funds he’s missed a few years in which double-digit returns were the norm for balanced portfolios. There’s not another 2008 coming, so no need to stock up on gold wafer and toilet paper or hide in cash.

Now he’s trying to time real estate, planning on selling and then buying again a year or two later. Another bad idea. Toronto real estate prices will have to drop 10% almost immediately for him to recover commission, double land transfer tax and other closing costs. That could well happen, but there are easier ways to build wealth that don’t involve blowing up your girlfriend. Besides, the real property damage will be happening in 905. Not the Beach.

You have an investing problem, Gerrie, not a real estate one.

In suburban Vancouver, Marie is 49 with two teenagers and a husband who dangerously reads this blog.

“One day I sat down and reviewed the numbers and our mortgage and realized the insanity and that we would really never or very late in our lives be mortgage-free. We sold our house – the best thing we ever have done so far. We were not left with much after debts/mortgage were paid off however now we do not have any debt except a small car loan.  We are currently renting a home. All in all, we have about $100,000 invested in RESP, RRSP and TFSA, that’s it.”

Marie says they earn about $170,000 and now she’s feeling house horny again.

“We have entertained the idea of buying a smaller home outside the lower mainland, perhaps buying land and or a cabin/ cottage. Yes, and that is not a great idea at the moment.. Looking at where we are now 5 years later I’m seriously thinking that we will not be owning our own home ever, not at least in BC. My husband and I have not had a salary increase in years, the property/utility taxes are going up every year (this year that cost our landlord $7000), commodities are going up so it seems impossible to get ahead. My husband and I are the same age, have good salaries, municipal pensions, healthy but still wanting to be able to have our own home one day.”

“I am confused,” he says. “Your thoughts?”

My thought is that at 49 they’re way behind the curve – with net worth of just a hundred grand, despite an income double the Vancouver average. Obviously they had little equity in the house, and at least now have some liquidity and no debts. Sounds like the biggest problem is setting a budget and living by it, so at least TFSAs can be topped up and properly invested.

As for buying real estate, Marie, forget it. If it was threatening to crush youwith debt before, this time it’d finish you off, sucking away all your wealth and saddling you with a lifetime indenture. Buy land or a cabin in the woods? Oh, please. Then you’d have useless real estate and no money. Get a grip.

Miles away (3,600 of them, actually), lives Stephen. He and his wife don’t earn $170,000. In fact, the household income is just $45,000. But on Grand Manan Island, an idyllic bump in the Bay of Fundy on the NB/Maine border, that’s enough to accomplish what Marie only dreams of.

“I am 27 years old and my wife and I have two children, ages 1 and 2.  We drive a paid for car and have 11 years left on our mortgage (which was originally 15 years after placing 20% down). We also have 6 months emergency savings. My wife and I live a financially responsible, frugal lifestyle.  Currently I have 25% taxes withheld from my pay, then CPP and EI are taken out, leaving me with around 69% of my income to live on.  My wife and I believe in giving 10% to our church (religious or not, all financial experts believe that giving is part of a healthy financial plan) and we put 10% of our income into a retirement plan.”

Why did Stephen write me?

“I believe the modern consumer age has inflated our lifestyle to the point where young people will never save adequately.  And that this is the major financial issue my generation is facing. After taxes and giving I am left with around 49% of my income to pay for life.  This leaves us with very little disposable income.  My wife and I have decided that we are staying the course and continuing to save and give no matter what.

“I would be interested to read an article on how financial responsibility is effected by things like taxes and housing costs and the financial irresponsibility of everyone around us.  I believe as time goes on the staggering cost of living suppresses people’s (especially young people’s) ability to live a financially responsible lifestyle and save while enjoying a few other pleasures our modern age affords. This may even come off as sounding like I’m whining but these are the major financial issues facing my generation.”

A Toronto millionaire doomer. The high-income, no-assets Van losers. And the NB kid making forty grand who supports three, is paying off a house, and worries about our values.

I hope you feel better now. Or worse.

161 comments ↓

#1 So..... on 05.29.14 at 7:22 pm

So…there is going to be no correction now in 416 SFD?

Confused and renting.

Where did you read that? — Garth

#2 cdd on 05.29.14 at 7:29 pm

First!

#3 Dean on 05.29.14 at 7:29 pm

Spend less than you make—- what a radical concept.

#4 Smoking Man on 05.29.14 at 7:32 pm

2-1

#5 T.O. Bubble Boy on 05.29.14 at 7:34 pm

Crap – I’m the same age as the 37-yr-old paper millionaire, but my RRSP is slightly less than $300k. AND, I don’t have $200k in gold!

Time to speculate and catch up!

#6 Big Al on 05.29.14 at 7:34 pm

First and mortgage free at 40

#7 gladiator on 05.29.14 at 7:36 pm

The Toronto doomer’s situation is fixable – he just has to decide to start working on it.
The NB kid’s situation is good: he knows how to do many things with little money, has a lifetime ahead of him and his family, and will be very well coming retirement.
The BC couple, though. Well. They are beyond screwed and itching to get their arses burnt very-very badly and stay that way until they croak. 170k in income and, even if this is before tax, just 100k in net worth at the age of 49? Wow! They should worry a million times more about their wrinkly years than about the comfort of a house that will not be theirs for 10-20 years until after they’ve paid off the mort-gage. It’s going to be a “gage” until they “mort”.

#8 HD on 05.29.14 at 7:38 pm

“religious or not, all financial experts believe that giving is part of a healthy financial plan”

Say wut?

Best,

HD

#9 spoonfed on 05.29.14 at 7:42 pm

What makes you so sure RE & Stock prices will play out in Canada like they did in the US and not like they did in Japan? Your strategy might not change much, but expectations of future returns sure would…. Having some cash on hands starts to look pretty appealing if you think a ‘lost decade’ is coming….

You can lose the decade if you want. — Garth

#10 Steve on 05.29.14 at 7:42 pm

Different streaks for different freaks. I
Like the last guy.

#11 Nemesis on 05.29.14 at 7:43 pm

#FrankieSangIt. #JackLovedIt. #’FirstAct’CouldHaveEndedBetter. #WorkingOnTheWowFinish. #SillyOldRams.

http://youtu.be/4-bD0ZG5_2w

#12 Victoria Real Estate Update on 05.29.14 at 7:43 pm

The price decline continues in Victoria. The beginning of the deflation of Victoria’s housing bubble (which began in 2010) has been slow but steady, which isn‘t uncommon for housing bubbles. This has happened while house prices across the rest of Canada have reacted positively to the excess housing market stimulus and moved higher.

Assessed values of single family homes across Greater Victoria have declined in three consecutive years. There are several examples of above average homes in above average areas (priced well below assessed value) that have been sitting on the market with no buyers. For example:

4260 Springridge Cres. (West Saanich):
(4 beds + den, 2 baths, 0.4 acre lot that backs onto a park)
Asking price: $499,000 ($56 K below assessed value)

Grange Road in West Saanich:
(5 beds, 2 baths, large, private lot, water views, water access nearby)
Asking price: $549,000 ($82 K below assessed value)

That prices have declined in Victoria (since 2010) despite all of the excess housing market stimulus that remains in place points to the obvious – that Victoria’s housing market is extremely weak. Victoria’s price decline will continue.

There is a lot to learn from the US experience. Consider the markets in the US that experienced the biggest price gains (Los Angeles, San Diego, Las Vegas, Phoenix and Miami). These cities were among the first to experience falling prices in the US (think Victoria). As well, these (southern, warm cities) experienced the biggest overall price corrections in the US (again, think Victoria).

House prices in bubbly Victoria are not supported by economic fundamentals (incomes and rents). In contrast, house prices in most US cities are close to being supported by incomes and rents. Let’s take a look at house prices in Fort Worth, Texas.

House criteria:
* min. 3 bed, 2 bath
* min. 1800 sq. ft. of above ground primary (main) living space
* 2004 or newer
* attached double garage

In Victoria, a house like this would probably cost $700 K or more.

In Fort Worth , the combined value of these 6 houses (that fit the above criteria) is about 720 K.

$ 114 K ( 3 beds, 2 baths, 1801 sq. ft.)
$ 118 K ( 4 beds, 2.5 baths, 2380 sq. ft.)
$ 119 K ( 4 beds, 2.5 baths, 2033 sq. ft.)
$ 121 K ( 3 beds, 2 baths, 1881 sq. ft.)
$ 122 K ( 3 beds, 2 baths, 1864 sq. ft.)
$ 126 K ( 3 beds, 2 baths, 1823 sq. ft.)

Girls and guys, if you are considering buying a property in Victoria right now, I urge you to consider the big picture and hold off from buying for now. Don‘t take the (buy now) advice of those who make a living from the sale of houses. Victoria’s housing bubble is deflating and prices are falling. In the US, the price decline was stuck in low gear until the household debt to income ratio began to decrease (in 08-09) and then it kicked into high gear. The same will happen in Canada. Renting for now (while you wait for lower prices) will result in a much stronger financial future for you and your family.

Until next time – Cheers!

#13 Pope SnugglyJigglyBombed the 666ed (aka Nosty) on 05.29.14 at 7:44 pm

“Why do people watch trash like Entertainment Tonight, or the mind-numbing house porn on HGTV? So, it’s time for a reality blog. Break out the bad attitude.”

Speaking of horsefeathers and bullshit, fancy an ice cold Elephant Dung Beer? Further on down the list.

Put these two together and know why DC is lying again about troop withdrawal. Soros is smart — dumps bank stocks, invests in gold miners for his tax free retirement account.

Look East, Young Man, because these three and Armenia are hooking up due to this.

Remember Smart Meters? Yup, they’re spying on us and let’s not forget Venezuela.

#14 jas on 05.29.14 at 7:46 pm

Garth is god.

You still can’t borrow the bike. — Garth

#15 LJ on 05.29.14 at 7:46 pm

Stephen wins!!! I respect his position and choices. Although, he is not very representative of the population in general.

The rest of the much richer “candidates” will probably sink.

#16 Vancouverite on 05.29.14 at 7:47 pm

Yet, in Vancouver, we get “news” the virgins are still buying in a “rising” market.

Housing prices still rising, but it’s not scaring off first-time buyers: report

http://www.news1130.com/2014/05/29/housing-prices-still-rising-but-its-not-scaring-off-first-time-buyers-report/

#17 David Lee on 05.29.14 at 7:47 pm

If the people who pay for the adverts have their way, heads are going to roll at the Province (especially with a headline like “Vancouver Real Estate: is the bubble about to burst?”):

http://www.theprovince.com/business/Will+cancellation+Immigrant+Investor+Program+spark+flight/9886021/story.html

#18 Mic on 05.29.14 at 7:48 pm

Garth,

I thought for sure you would write about the millennial interview aired on CBC this morning. She purchased a 700 square foot condo with a $70,000 down payment provided by boomer parents. Not only is she getting help from her parents (“because the banks wouldn’t touch” her otherwise), she has to share the condo with a stranger who is living in her ‘den’ so that she can make the mortgage payments. I look forward to hearing an interview three years from now.

Let me indulge in a totally unconstructive comment/question: boomer parent, millennial …how clueless can you be?

#19 CPG on 05.29.14 at 7:48 pm

Commercial banks and other financial institutions provide most of the assets used as money through loans made to individuals and businesses. In that sense, financial institutions create, or can create money.

http://www.bankofcanada.ca/wp-content/uploads/2010/11/canada_money_supply.pdf

Frederick Soddy on Endogenous Money & Debt-Deflation

http://monetaryrealism.com/frederick-soddy-on-endogenous-money-debt-deflation/

#20 Italians love real estate on 05.29.14 at 7:51 pm

“Besides , the real property damage will be happening in the 905 not the beaches”

Maybe some 905 areas but definitely not Markham or especially richmond hill.

Take a look at rate of recent price increases . RH rocks !!

#21 wallflower on 05.29.14 at 7:55 pm

Why do people have cable/satellite television?
There’s a better life out there.

Loving all the dawgs…………..

#22 rower on 05.29.14 at 7:55 pm

Great job, Stephen and family!

Unfortunately, we were not as wise as you at that age. We are coming late to the save for the future party, but at least we are trying.

It is a sad reflection of society when those who live within their means are a minority who are looked down upon by the must-have-mores.

#23 Setting the Record Straight on 05.29.14 at 7:59 pm

#58 Retired Boomer – WI on 05.28.14 at 8:40 pm
————————————————–
@82 may 28

Climate change/global warming IS real.

96 of 100 scientists agree that humans are responsible for over half of the change.

Just clarifying.

*****

It’s really monkeys that are responsible. Ninety six out of one hundred scientists say they evolved into humans.

Save Mother Earth. Exterminate monkeys!

#24 sheane wallace on 05.29.14 at 8:01 pm

Hold that gold and do not sell no matter what.

In 6 months to a year buy 50 k in GDXJ.
Then retire in 3-5 years.

#25 Shawn on 05.29.14 at 8:01 pm

Banking Facts

Forgive more discussion on banking.

Garth told us yesterday:
So, they put money on sale. Margins are cut so thin between the cost of funds and loan rates that the bankers make nothing. (On these 2.97% mortgages)

***************************************
Garth is of course correct, banks have a cost of funds. They do not loan out money that they print at zero cost.

Here are the latest published 2013 costs of funds from the Royal Bank of Canada:

Average cost of funding (deposits and similar)
1.15%

Earned on loans: 3.27%

Gross spread 2.12%

http://www.cba.ca/contents/files/statistics/stat_banksann_db251_en.pdf

Scroll to the last page at the link here and the figures are there for all the big banks.

So you see there is the proof that banks have a cost of funds that they lend out.

Yes there is fractional reserve and multiplier.

Yes banks and their customers create money.

No, they can’t create money at zero cost.

The idea that fractional reserve means that banks can lend money that they create at no cost is patently absurd. If they could do that why are their profits not trillions instead of a mere 15% return on equity or so (you can check their ROEs at the link as well).

#26 Detalumis on 05.29.14 at 8:04 pm

The NB kid who supports 3 dependents actually is a net drain on the economy, he may have 25% taxes deducted but he is getting a great big tax refund, he wouldn’t owe anywhere near that amount, more like 5K or even less. His income taxes wouldn’t even pay the health care bills on a family of 4 with two small kids. His kids will swallow up 10K each in education costs when they hit primary school.

His wife gets subsidies like a 60% survivor benefit for CPP which a working spouse would not receive so he gets more for his premiums than other people would. If everybody lived like this hard working frugal couple we would be in a depression with not enough money to fund health care let alone education and everything else.

So basically the despised Vancouver no-assets losers’ taxes allow the frugal couple to be so self-satisfied, they are living on the backs of the people whose lifestyle everybody seems to denigrate.

#27 Dean Mason on 05.29.14 at 8:07 pm

Putting all your money in a big black hole called a house, condo that costs $350,000 to $500,000 to $1,000,000 will be all you own if your lucky after 30 to 35 years of working.

Most Canadians are copying the Americans by using their real estate especially primary residence as an ATM machine and being in more debt as they are or near retirement in their 60’s.

They are fooled by the cheap 3.00% or lower mortgage rates but have no idea that the $800,000 to $1,000,000 at the minimum it will cost them in total mortgage payments and interest, CMHC premiums, property taxes, utilities, H.S.T., insurance, maintenance and repairs etc. over the next 30 to 35 years.

People are financially illiterate no matter how high of an income they earn and want to become rich by a one trick pony which they believe is real estate today.

Why save and invest maximizing TFSA’s, RRSP’s, RESP’s, non-registered accounts etc. when real estate will make you rich. Good luck with that!

#28 Dean Mason on 05.29.14 at 8:10 pm

Correction to my last post above, the mortgage payments are excluded from the $800,000 to $1,000,000 in total taxes, fees, expenses, costs it will cost most Canadians over the next 30 to 35 years.

#29 pinstripe on 05.29.14 at 8:12 pm

http://www.theprovince.com/business/Will+cancellation+Immigrant+Investor+Program+spark+flight/9886021/story.html

#30 Millenial on 05.29.14 at 8:21 pm

Guy has 1/5th of his net worth in physical gold?

#31 Observer on 05.29.14 at 8:27 pm

Mr Poloz at Bilderberg 2014 according to this attendee list….

http://rt.com/news/162128-bilderberg-attendee-list-released/

#32 OttawaMike on 05.29.14 at 8:27 pm

Grand Manan, beautiful rugged little island but a little like Village of the Damned with everybody connected and knowing each others business. That was my impression from the time I spent there. You want to see whales, porpoises and seabirds(when the fog horns are not blowing), this is the place.

They also have a different tack on dealing with crack heads than Toronto does:

http://www.theglobeandmail.com/news/national/grand-manans-war-on-crack/article1076141/?page=all

#33 Freedom First on 05.29.14 at 8:32 pm

Awesome post Garth.

I like how Stephen is living. Where did he find that wife of his? They are both Blessed. It is rare to find either a man or a woman who have those values and fiscal responsibility. I believe that is why so many people are not happy today. The Herd is insane.

#34 Smoking Man on 05.29.14 at 8:39 pm

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Sucks to be a basement dweller these days. I told you bastards last Sept.

I nearly fell of my chair tonight watching Lang and Oleary

Keven said, with gas up, meat up, that’s inflation rates may may go up….

If have loot invested with this guy I would think twice.
He doesn’t know that rates are pegged to the labor market.

Who would have known.

Unbelievable !!!!!

Oh and my call to unload equities was not based on any charts, inside info.

100% UCC that little feeling in your guy, tells you when to push all in or fold.

You all have it, but it’s suppressed by your programmed belief system.

To enjoy it’s full power, you got to lose your mind..

#35 BigD on 05.29.14 at 8:41 pm

Garth, last week you told a guy not to wait and not invest in the markets right now, as you said everything was too expensive right now! (Bonds/REITS/equities ).
Today you are telling a guy not to try to time the market?
I’m confused

#36 JO on 05.29.14 at 8:45 pm

# 26 – You are wrong. The no assets BC couple both work for municipal gov’t and hence do not pay any taxes. They are not net taxpayers. Every dollar of income to them comes from our tax money.The NB couple are not net taxpayers after accounting for gov’t services used. In fact, only a minority of private sector individuals actually pay tax monies. The tax donkeys are the professional wage/earners/salaried people and highly skilled trades. They pay the highest effective tax rates. On the other hand, you have a small but important number of well off people who pay very low effective tax rates but pay a large amount of the overall tax dollars. Examples: People whose incomes consist mostly of dividends, capital gains and rents. I meet them all the time and lend money to them. They typically claim only $ 25-35 K in line 150 income and pay about $ 1800-2500 in taxes. But they are worth $ 1.5 – 4 M and drive a BMW.

#37 Jsan on 05.29.14 at 8:47 pm

” #18 Mic on 05.29.14 at 7:48 pm

Garth,

I thought for sure you would write about the millennial interview aired on CBC this morning. She purchased a 700 square foot condo with a $70,000 down payment provided by boomer parents. Not only is she getting help from her parents (“because the banks wouldn’t touch” her otherwise), she has to share the condo with a stranger who is living in her ‘den’ so that she can make the mortgage payments. I look forward to hearing an interview three years from now.

Let me indulge in a totally unconstructive comment/question: boomer parent, millennial …how clueless can you be?”

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

Yeah, I heard that interview too. And of course the Mortgage “expert” from BMO went on about how it was such a “WONDERFUL” way for parents to help instill good financial lessons for their children and enable them to start building equity which in her own words will be around 10% per year.

Here’s the interview:

http://www.cbc.ca/thecurrent/episode/2014/05/29/parents-of-millennials-may-be-helping-to-skew-housing-prices-1/#

#38 Nemesis on 05.29.14 at 8:48 pm

#BonusZen. #OldShowTune. #NewTwist.

http://youtu.be/fdsCGm4bP3E

[NoteToGT: This one is just for you: http://youtu.be/QgY8qWAdTpo ]

#39 TheCatFoodLady on 05.29.14 at 8:51 pm

I’ll take the gentleman from NB who seems to understand the notion of living well within one’s means. He’s a sterling example that not all the younger generation are entitlement attitude whiners & I would LIKE to believe most are not. For every moldy slacker I know still lurking on a stained couch in Mom’s basement, immersed in Halo or WoW, there are 9 or 10 doing their damnedest to make it on their own.

It’s often not pretty but who says the younger decades of one’s life are meant to be sunshine & unicorns shitting Skittles?

What’s concerning though is the nature of the hard times. As the radio program referenced yesterday pointed out, far too many younger people are not only helped with down payments, their NORMAL costs of living require subsidies from Mom & Dad. I’d be curious to know what they consider normal costs of living. If it’s truly only the basics, we’ve got a problem or ten.

And the increasing number of people my age, (mid 50s), still metaphorically nursing kids while increasingly having to care for parents while trying to handle their own bills, including mortgage debt is worrisome.

What’s the next reality show going to be if it reflects true reality? BrokeBank Mortgage – “I Just Can’t Quit You”? Hope not.

#40 Flawed on 05.29.14 at 9:01 pm

I keep reading on this blog that there is a US recovery and we should be invested in US assets.

WHOOPS !!

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

75% of S&P companies beat profit expectations and 50% exceeded revenue goals. The recovery continues. — Garth

#41 Old Man on 05.29.14 at 9:06 pm

#31 Observer – never heard of this group before but thanks for the link. Probably just a reunion of old friends taking a break to relax and watch a few dancing girls.

#42 Kreditanstalt on 05.29.14 at 9:08 pm

“The precious metals have been a disaster since 2011”

All the more reason to place one’s savings in them now.

The fundamentals for owning gold are better than they ever were plus the paper gold market price manipulations have tanked the dollar price.

Usually, don’t intelligent investors buy something when no one loves it and sell when everyone wants it?

#43 Alex Quebec on 05.29.14 at 9:16 pm

Excellent. I’ll take sunshine & unicorns shitting Skittles for a thousand.

#44 AisA on 05.29.14 at 9:22 pm

Stop asking Garth for market times and directions. The whole point of this blog is to educate and warn against casino behaviour masquerading as investing. It’s not here to tell you when to go all in or all out, in fact it’s kinda saying you never really have to do either.

#45 level hed on 05.29.14 at 9:25 pm

“My husband and I are the same age, have good salaries, municipal pensions”

Entitled civic servants with no incentive to save….because they will be bailed out by the taxpayer…these people should be ashamed of themselves.

#46 Retired Boomer - WI on 05.29.14 at 9:29 pm

It’s a maggoty Thursday here in the land of cow poop & Beer farts. Time for the weekly drawing at the only pub in town! Didn’t win, but it is an excuse for a few cocktails!
When you are retired, with a small pension, wife on social security, you can piss away a few bucks frivolously every week. (Hic). You really don’t giver a dam about the young who have bought into the notion of “buy now, or newer” you have seen that lie before. You don’t give a shit about your fellow boomers who pissed away they years without saving a friggin’ dime, oh yes, there are those through disability etc. that couldn’t save much, those you try to help.
So, HD that’s why this retired Boomer still gives 10% of his income to the people who he thinks needs it. Whether that’s through formal channels, or the $20 spot to the beggar is simply MY choice! (thanks, smoking man nice touch!)
Time here is limited, no matter what we say, do, or think. Have some fun, invest well, give away some loot, and be the best “you” that you know how to be. Not every body’s circumstances are the same, or even close! I am enjoying my time, making more dam money than I really have a need for right now, so who should complain?

No debts, money in the bank, investments, time to enjoy the fruits of that labor. Read the posts, gain a bit of wisdom, and let her rip on “Thirsty Thursday” in WI.

#47 TakingResponsibility on 05.29.14 at 9:30 pm

“Why do people watch trash like Entertainment Tonight, or the mind-numbing house porn on HGTV? Because we love to compare how we’re doing with everyone else…”

BwaHaha! Some of the Commentators on This Reality Blog certainly do react that way. Comparing, Belittling, Disdaining, Bragging, Pontificating…..anything that makes one feel better.

Keep the comments coming!

Disclaimer: I do learn a lot from a few commentators as not all are necessarily reacting with mental masturbation (perhaps, narcissism is a better term?) or comparisons.

#48 Smoking Man on 05.29.14 at 9:32 pm

75% of S&P companies beat profit expectations and 50% exceeded revenue goals. The recovery continues. — Garth
…………
Hope you’re right, Vegas was packed few weeks ago.

But that little thing called the Bond Markets….

Tells an other story….

#49 James Kitchener on 05.29.14 at 9:41 pm

Millenial whats wrong with 20% in gold?

You should read Garths other Book….
“After the Crash”
Basically depending on your worry level you should hold gold bullion the more you worry about inflation or economic collapse the more gold you should own.

Unless you trade it like a stock

Anyway its a great book because it gives advice on all different kinds of financial scenarios.

Cash is King page 88.
Page 106, In a depression the 100 things that disappear first, like number 42 – matches.

Its a good read. I do not stress it, but I like to be prepared

To Big D timing the market
It is very confusing and same goes for Garth advice on Real state.
My understanding if you have been an investor for many years, then do not try and time the market.
Buy Dividend paying ETF and when the market declines buy more. Think of it this way, You lock in a GIC for 5 years at 2%, why would you not buy an ETF and not look at it for five years?????

If you are a new investor, do not invest 100% of everything you got into individual stocks, average your cost in ETFs. for example buy $1,000 a month for the next 12 months, do not invest $12,000 now.

As for owning a house I think Garth is trying to tell everyone, Housing is very high and will pull back eventually, so first choice is to sell or not buy.

But like many Canadians who will not sell because of emotion, then you better make sure you can weather the storm.

PAY off all Debt as quickly as possible.
Do not incur more Debt
Live within your means.
When you do sell in a bad market expect your house to be up to 30% less than today.

I get confused on Garths buying points, but basically do not buy. But what if you are horny????

Then in my opinion have a large down payment so your mortgage costs are less than the rent. And make sure your liquid investments are greater than the value of your house.

Thanks my take on this blog.

#50 john in Mtl on 05.29.14 at 9:41 pm

“75% of S&P companies beat profit expectations and 50% exceeded revenue goals. The recovery continues. — Garth”…

Sure they look good but that’s only because they buy back their own stocks by the truckload these days, making it seem they are profitable. Numbers get fudged every day.

http://www.bloomberg.com/news/2014-05-29/u-s-economy-shrank-early-this-year-for-first-time-since-2011.html

So much for a recovery… as # 40 (Flawed) also pointed out.

Current data is unmistakeable. The recovery continues. — Garth

#51 souvereigninternational on 05.29.14 at 9:49 pm

#26 Detalumis on 05.29.14 at 8:04 pm

good point my friend. Things are rarely one dimensional. How long the Vancouver couple have been making 170K a year? How much do they clear after all the deductions?

#36 JO on 05.29.14 at 8:45 pm wrote

” # 26 – You are wrong. The no assets BC couple both work for municipal gov’t and hence do not pay any taxes. They are not net taxpayers. Every dollar of income to them comes from our tax money.The NB couple are not net taxpayers after accounting for gov’t services used”

No you are wrong! everybody in “government” pays taxes and everyone’s income even in private enterprise is in some way subsidized by taxes even if not directly. That Vancouver couple obviously spent the 125K they cleared after taxes and deductions. They therefore subsidized a whole slew of private businesses.

The guy in the beaches to be consistent with his beliefs should convert the cash to precious metals and related vehicles.Unless of course he is waiting for further dip in prices. Garth is probably right on the house though.

read the link I posted yesterday:

http://www.gold-eagle.com/article/gold-forecast-versus-real-estate-forecast

#52 Internal Auditor on 05.29.14 at 9:51 pm

Garth,
Interesting article, well balanced just like your Gen Y portfolio! I’m curious to know your thoughts on the Big 5 Q2 earnings? Lot’s of attention in the investor slides on the mortgage market here in Canada. Most banks presented data on the insured and uninsured mix on their books. Also, some banks disclosed the loan to value ratio which appeared to be between 55-65.

Also, I read a good quote…something along the lines of not confusing volatility as risk. Equities are fairly calm as things keep chugging along. Would you recommend people start adding some puts to their portfolios or simply rebalance?

#53 Retired Boomer - WI on 05.29.14 at 9:54 pm

Stephen – the man after me own heart! Keep on the high-road there. A 15 year mortgage (I had one). Giving 10% still do. Retired now about 2.5 years. Have more than I deserve, or need. What’s wrong with that?
Sometimes, it seems there is not enough, but you know there is always a way through it. Drive that relic another year or, two. That TV will last beyond your wildest thoughts! Saving, and giving is the real key here, in my short unread, and unheralded book. But then, I don’t really give a dam what others might think. I live my life the way it best suits MY values, no one else’s.
I wish you the VERY BEST, and yes the ‘consumer idea’ is not the best plan for your long-term happiness.

#54 Happy Renting on 05.29.14 at 10:02 pm

Depending on the details of the Vancouver couple’s municipal pensions, they might not be that screwed. If they’re gold-plated, indexed government pensions that can more than cover their living expenses, they don’t need the huge retirement fund most of us are gunning for. If they go on a serious financial diet ($170k/yr is an awesome family income), they’ll be okay. But for goodness sake, realize your net worth is tiny and you can’t blow it on recreational real estate. Hopefully the verbal kick in the butt Garth delivered is taken seriously.

#55 Kris on 05.29.14 at 10:05 pm

Everyone in Vancouver i speak to believes real estate prices here will go up without end.
Every asian person i speak to always asks me if i am an owner of a house.
Its gets pretty tiring after a while.

#56 Tony on 05.29.14 at 10:09 pm

Re: #12 Victoria Real Estate Update on 05.29.14 at 7:43 pm

American real estate will plunge and never recover. There’s no middle class and the rich Americans already have one step out the door meaning all their wealth will be pulled out of the country forever. The rich didn’t get rich by being stupid and only stupid people are holding U.S. dollars. The rich will figure this out quite soon.

#57 Shirley on 05.29.14 at 10:14 pm

I disagree that there is a housing bubble in Canada. Emphasizing the need for gated communities in Toronto to protect women from street harassment.

Independent Canadian women like myself need to live in a condominium in Toronto because most condo facilities provide measures to protect our person
from perverted men, aggressive pick-up artists and misogynist psychopaths like that cold-blooded racist and sexist mass killer Elliot Rodger.

I have a right to post belfies without any sexist male treating me like an object. FYI, I’m satisfied in investing $450,000 for a unit with ample security and recreational facilities. Living in a gated community is expensive in Toronto.

Condominiums are not going to go down in price just because hundreds of anonymous unemployed 18-30 male posters are worthless and unemployable. Get a job and respect women! You will meet
far in life and maybe you can move out from your parents basement at age 50.

#58 TheCatFoodLady on 05.29.14 at 10:21 pm

Giving, giving back is a vital part of life, contributing to ‘the continuity of community’. Perhaps no man is an island but it can feel that way in cultures that increasingly interact via social media rather than face to face.

Not having money is no reason not to give back. We just make it month to month & heave massive sighs of relief when we don’t have to tap our little cushion. In the winter we can help elderly neighbours keep cars shovelled out. This time of year, all you need is a pair of rubber dish gloves & depending how much time you have, a few grocery bags or a garbage bag. Go to your nearest park, pick up litter. you can spend 15 minutes or two hours. Adopt a section of roadway by your home or apartment… or a bus stop you use. Wander down once a week or two – it’s amazing the difference it can make. Bring your kids. It may not be safe to have little ones handle the trash but they can spot it for you.

Offer to look after an exhausted single mom’s kids for an hour or two. Help a neighbour’s child with homework or give them a bit of your time. No effort has to be formal, official or organized. It needn’t take much time. And you may notice over time, the example you set is taken up by others.

#59 Aggregator on 05.29.14 at 10:25 pm

First Italy, now UK.

Drugs and prostitution to be included in UK national accounts

George Osborne famously declared "we are all in this together" when it comes to Britain's prosperity. The Office for National Statistics has now taken him at his word, adding up the contribution made by prostitutes and drug dealers.

For the first time official statisticians are measuring the value to the UK economy of sex work and drug dealing – and they have discovered these unsavoury hidden-economy trades make roughly the same contribution as farming – and only slightly less than book and newspaper publishers added together.

Illegal drugs and prostitution boosted the economy by £9.7bn – equal to 0.7% of gross domestic product – in 2009, according to the ONS's first official estimate.

A breakdown of the data shows sex work generated £5.3bn for the economy that year, with another £4.4bn lift from a combination of cannabis, heroin, powder cocaine, crack cocaine, ecstasy and amphetamines.

According to the estimates there were 60,879 prostitutes in the UK in 2009, who had an average of 25 clients per week – each paying on average £67.16 per visit.

You know how this goes: If Italy and UK did it, every other developing nation will follow. So perhaps Rob Ford should have stayed on board as a contributor of 0.00000001% of GDP.

#60 Smoking Man on 05.29.14 at 10:30 pm

Last week I was out to dinner with some wheels from Bloomberg..

I naturaly order a few lbs of Carb, it was on their dime, picking my brain.

One of the dudes orders a steak, it’s not even cooked, if I wasn’t so hammered by the time the food showed up I would have puked.

The thing was still alive, arteries squirting.. Gross..

The bastard sickened to watch me savagely rip apart the shells to get to the crab meat and rapidly inhale it like someone was going to steel it from me.

We are all programmed differently..

#61 Flawed on 05.29.14 at 10:33 pm

Current data is unmistakeable. The recovery continues. — Garth

US Commerce Dept says -1% …..a negative recovery?

http://armstrongeconomics.com/2014/05/29/commerce-department-1st-quarter-numbers/

I said current. That was winter. — Garth

#62 Mrs Riverview on 05.29.14 at 10:35 pm

#26 Detalumis is right on the money.

Nothing against the NB resident, he is good at managing the money he has. We need people like that to run the country.

THAT said, Canada is a great place to live because of our generous social programs.

I was working in a corporation earning $100 K. A colleague (originally from the U.S.) saw a news story about a local family of 11 children whose parents were killed in a car crash. It was very sad – thankfully family took the children in – bless them. Colleague asked me how anyone could afford 11 kids in Canada. So I showed her an online child tax credit calculator. News story said what the deceased did for a living so we guessed his income. The monthly benefit payable to that family was more than our net pay. Raising 11 kids is very challenging so no criticism of the program. HOWEVER, it sure made each of us think about our priorities, choices and ideologies.

#63 takla on 05.29.14 at 10:35 pm

re Millenial#30,sure when you look around and see billionairs such as George Soros and other billionairs divesting themselves of stock and buying Au and Au miners makes one wonder just what these life time stock market elites really know about whats comeing down the line for precious metals.

#64 Tony on 05.29.14 at 10:36 pm

Well you can certainly see how the poor stay poor. Buy back in when the Toronto market falls. Not only will he give everything back he made he’ll also lose everything and likely never recover. Akin to someone who just hit a slot machine big and well I’ll just wait a couple of hours then get back on the exact same slot machine and try to “break the bank” again. I have no idea where these people get these crazy thoughts.

#65 dosouth on 05.29.14 at 10:37 pm

Big Al on 05.29.14 at 7:34 pm said:

First and mortgage free at 40…

—————————————

Been mortgage free for years! We rent………

#66 Keep Giving on 05.29.14 at 10:41 pm

Well done Stephen, keep on your path! Living just outside of the greater Van area, we as a young family of 5 with pre tax income of 100k have also decided to keep saving and giving. Renting has been a significant part of making this plan work under our income in our region. Unfortunately our congregation has been sliding away from meeting our meager ministry budgets due to falling giving, at a time when one young family after another make home purchases for over half a mil. Times will change, but values shouldn’t always follow suit.

#67 Cici on 05.29.14 at 10:45 pm

Great advice to Gerald and Marie. As for Stephen, I appreciate his values and efforts, but before he gets too high and mighty, he should perhaps take into consideration that the cost of living in his chosen area is much more affordable than Vancouver or Toronto (especially in terms of real estate), and he’s not subjected to the same pressures in terms of gadgets, trinkets and bling than those big city folk are. Also, kids that are 1 and 2 respectively cost a heck of a lot less than teenagers.

That said, if Marie really wants a house that bad, she should perhaps move in next door to Stephen. Her cost of living would go down, her teenagers could make money babysitting and pay for some of their own social activities, wants and needs, and Marie could learn a lot about finacial and moral values from her friendly neighbours.

#68 OttawaMike on 05.29.14 at 10:47 pm

#59 Aggregator on 05.29.14 at 10:25 pm
Another cogent argument for the end on prohibition of illegal drugs.

Legalize it, tax it and educate the populace on the risks.
Use the tax revenue to pay for the harm reduction and health care associated costs. Stop padding law enforcement budgets with eradication funding. Take profits out of the hands of organized crime and put it into the public domain

Reporting the GDP contribution is a step in the right direction.

#69 Yuus bin Haad on 05.29.14 at 10:58 pm

This was a tough one, but I have to go with Stephen. How do we vote again?

#70 High Plains Drifter on 05.29.14 at 10:59 pm

Nobody goes wrong pitching for Toronto so get used to it you other suka”s. I can not jinx the greatest baseball team in the universe so I will not go further. I am also not cutting my toenails till this thing is done. Blue Jay”s goin on up the mountain with it:s people.

#71 fred on 05.29.14 at 11:10 pm

Gerald…do not sell, keep living the way you do, and wait for investment opportunities. I’m sure you don’t want to be a just another depressed moronic angry Turner groupie

#72 Bottoms_Up on 05.29.14 at 11:12 pm

Of the 3, I’d choose to be the millionaire doomer.

As an aside, it’s great to see big names (Melinda Gate and Stephen Harper) put their voices behind vaccination. It’s irresponsible to not get your children vaccinated.

#73 Don Derc on 05.29.14 at 11:19 pm

Tdy’s headlines in the bus section of the Calgary Herald:

“Lower mortgage costs expected to stoke market” – “it can actually help mitigate some of the increases in pricing that we’ve seen in Calgary’s market” belches Ann-Marie Lurie of the CERB.

“Credit agency warns homeowners of interest rate shock scenario” – “we really do believe rates will go up, it’s just a question of when” says DBRS.

I say soft decline soft landing – don’t want the consumers to panic.

#74 Frustrated Kiwi on 05.29.14 at 11:32 pm

#120 Kevin from yesterday (sorry, late back)

You say: “Banks do not create money out of thin air. Banks cannot lend out money they do not already have in their vaults.”

The Bank of England publication I linked to says “This article explains how the majority of money in the modern economy is created by commercial banks making loans”

I think I’ll trust the Bank of England over some random guy Kevin I’ve never met. I suggest you read the article – it’s a great tutorial. It also explains the checks and balances provided by central banks.

#75 souvereigninternational on 05.29.14 at 11:35 pm

to #57 Shirley on 05.29.14 at 10:14pm

You are as sexist as it gets.You are reason#16:

http://www.rooshv.com/15-reasons-why-toronto-is-the-worst-city-in-north-america-for-men

and Jack Nicholson has some words about you here:

http://www.youtube.com/watch?v=6Y9BukEBI9c

#76 not 1st on 05.29.14 at 11:39 pm

A person goes and buys a condo and rents it out and is likely underwater after fees, strata and the mortgage. As Garth says, they are subsidizing the renter.

Yet a REIT can go do the same thing and somehow make it cash flow positive enough to pay a dividend and have enough cash flow left over to leverage into the next property.

HOW??

#77 Mack on 05.29.14 at 11:41 pm

Could this possibly be true
http://www.theprovince.com/business/Will+cancellation+Immigrant+Investor+Program+spark+flight/9886021/story.html

#78 I'm Afraid of Shirley on 05.29.14 at 11:51 pm

Uh……….Ok Shirley. Put the spoon down and step away from the Hagen Daz and turn off CNN.

#79 KommyKim on 05.29.14 at 11:57 pm

RE: #40 Flawed on 05.29.14 at 9:01 pm
McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

The above line is a fine example of how Flawed the article you cut and pasted is. McDonalds earned 28 BILLION last year and earned 6.7 BILLION in total revenue in the first quarter of 2014.

#80 asinha on 05.30.14 at 12:12 am

After condominiums its the townhomes that are crawling. Realtors are not accepting and painting rosy pictures. None of the townhomes I have been following are going above asking. Some real gorgeous ones not bought even after prices reduced 5-10%. If this is at the peak of selling season what will follows in the coming months.

#81 Basil Fawlty on 05.30.14 at 12:23 am

“75% of S&P companies beat profit expectations and 50% exceeded revenue goals. The recovery continues. — Garth”

US GDP fell at a 1% annual rate in the first quarter. The labor particpation rate is at the 1978 level. These S&P companies are not creating much employment. The recovery is a sham.

#82 darth on 05.30.14 at 12:58 am

2008 will happen again, except on a much larger scale… can you say China Bomb? It’ll make Lehman look like a campfire.

#83 ozy - TRUE or False? on 05.30.14 at 1:02 am

Garth you said, some days ago: ” Margins are cut so thin between the cost of funds and then loan rates that the bankers make nothing.”

But I think in this post-colonial fractured banking system, banks are allowed by gov. to loan money they do not have. So they charge you annual interest 3% but pay NOTHING to anyone – as they do not borrow the money….

OK, maybe they borrow 1% or maximum 10% of it at 3% of their AA-bond rating. So – their COST is 0.3% but you pay 3.00% So mortgage rates can go as low as zero.five a year…and still make lenders a killing profit.
That’s why they race to the bottom.

So, once you clarify this True/False dilemma Garth, I know where house prices are headed….. Up or Down!

THANKS IN ADVANCE!

#84 ozy - to #57 Shirley on 05.30.14 at 1:14 am

Shirley dear, all few condo buildings I sampled went down in price, like I said $20000 or so (5% in last 2 years).

It’s going to be a slow grind down, but do not panic, that is NORMAL. Condos do depreciate due to new projects that come with no wear &tear.

the predators will always be here in this “amazing” city, aren’t there any night butler services being offered in TO? google it

sleep tight, do not let Bugatti bite

#85 China gets desperate on 05.30.14 at 1:44 am

If China catches a cold, Canada will too and perhaps suffer more

http://blogs.wsj.com/chinarealtime/2014/05/29/zero-down-payment-chinas-developers-get-desperate/

#86 bread and wine on 05.30.14 at 1:46 am

I’m with Stephen. 2 kids, modest income, no debt, give lots of money away. Its not that hard, even in Victoria (although we can’t afford a house). You just can’t go out to eat all the time. And you can’t go to Hawaii every year. Living simply is liberating.

#87 Nemesis on 05.30.14 at 2:18 am

#ShirleyDoesn’tGetOutMuchTheseDays

http://youtu.be/ADl0wC_cAbk

#88 Oceanside on 05.30.14 at 2:19 am

#54 Happy Renting on 05.29.14 at 10:02 pm
Depending on the details of the Vancouver couple’s municipal pensions, they might not be that screwed. If they’re gold-plated, indexed government pensions
_________________________________________
Most municipal pensions are partially indexed and not guaranteed like federal ones, not near as great as people like to believe.

#89 Exurban on 05.30.14 at 3:55 am

The Vancouver couple have municipal pensions. I am very familiar with the B.C. Municipal Pension Plan because I’m in it. It’s administered by BC Pensions so anyone who likes can check for themselves.

Let’s go straight to the numbers. They are both in the Municipal Plan and their total income is $170,000, so we’ll figure out their total combined pension income. The formula is (total number of years they paid premiums) multiplied by 2% multiplied by (the average of their five highest years of income). An employee starts paying premiums after six months employment and then continues paying them for 33 years maximum. The employer “matches” their premiums, paying the same amount into the plan that the employee does. An employee can retire and draw pension at age 55, but full pension is not available until age 60. To estimate their pension income, we have to make some assumptions about the couple.

First, let’s assume they work to age 60. Then let’s assume how many years they paid premiums. I’m going to assume they will have paid premiums for 30 years. Then, I’m going to assume that their pay rises slightly over the next 11 years to retirement (Marie says she is 49). That gives us 30 x 2% x $180,000 = $108,000 a year.

Now, they’re also going to be eligible for CPP at age 60. Garth likes to warn us that few people max out on CPP, but 30-year municipal employees will have paid the maximum CPP amount at least 30 times. Surely they will each collect $10,000 a year, and when they turn 65 they will each get another $6,400 a year in OAS. These two will not be on the sidewalk in front of the liquor store.

But, I hear some doomers cry, pensions are all going bust. Always possible, but in the case of the B.C. plans, unlikely. Reasons are 1. a lot of money gets put in by the employee and employer (unlike plans in Illinois and Wisconsin) 2. the multiplier is 2% (not 3% like the law enforcement pensions in California) 3. it’s the average of your best five years (not two years like in Florida, where BTW the legislature simply raised that to 10 years overnight) and 4. overtime doesn’t count (so you can’t pump up your last couple years of income the way police and firemen do in California). The plan is indexed “if funds are sufficient” and I know there was a raise last year because my wife got one.

The real problem this couple has is that they’re living in the Lower Mainland, which massive immigration will have turned into one continuous metropolis from UBC to Harrison by the time this couple retires. They will have to move someplace like Vernon or Parksville if they stay in B.C.

#90 Buy? Curious? on 05.30.14 at 5:23 am

That’s awesome! I say the dude from the beaches should sell. Go on, do it! It’s the top of the market wait two years and buy back in when it’s cheaper. Pfft. 2 years? I’d wait 5. Has anyone told you that’s a smart move? And you’re good-looking?

https://www.youtube.com/watch?v=3iyfdXZEqB4

Dude from New Brunswick, that’s great that you donate to such a honourable cause such as your church. I’m sure they’re doing some great things over there.

http://www.cbc.ca/news/canada/new-brunswick/church-abuse-report-delayed-by-more-allegations-1.1331809

And the couple in BC, make sure you go far, far, FAR into the interior. If you’re not growing pot, I hope you do well out there. All the best!

https://www.youtube.com/watch?v=pTt9GSyW184

Who’s ready to party this weekend? I’m going to a fantastic dinner party on Saturday.

#91 eddy on 05.30.14 at 5:25 am

There must be a few rocket scientists on this blog.
This guy says that the international space station is a hoax:

http://www.youtube.com/watch?v=mt_qySI10VI

#92 Big Al (New) on 05.30.14 at 6:18 am

Hey Shirley, I’m guessing your single.

#93 OttawaMike on 05.30.14 at 6:57 am

Shirley the Troll chummed the waters here at GF and the sharks came circling right on schedule..

#94 Kevin on 05.30.14 at 7:23 am

Toronto real estate prices will have to drop 10% almost immediately for him to recover commission, double land transfer tax and other closing costs

Why would he have to pay the land transfer tax twice? Once as a seller, and again as a buyer? Isn’t the rule that only the buyer pays it, meaning Gerald would only pay it once, when he buys back into the market?

In Toronto it is double tax on purchases. — Garth

#95 Ralph Cramdown on 05.30.14 at 7:23 am

Shirley is viral marketing for organized real estate’s new campaign. We’ve seen them tout buying for singles, and urging parents to buy property for their kids while at university, even if the kid is only eight now. Then there was the shared mortgage pioneered on the wet coast for friends who couldn’t each scrape up a down payment, and wanted something really big in the future to end their friendship about.

But these haven’t been increasing penetration of late, so Shirley’s message is clear: Buy a condo, all you single girls, or you could get objectified, molested… or worse.

P.S. Your building’s concierge is not rating you. He has no opinion, really. Just thinks you’re a nice girl.

#96 Mark on 05.30.14 at 7:36 am

“OK, maybe they borrow 1% or maximum 10% of it at 3% of their AA-bond rating. So – their COST is 0.3% but you pay 3.00% So mortgage rates can go as low as zero.five a year…and still make lenders a killing profit”

Nope.

http://www.rbc.com/investorrelations/subordinated-debt.html

The most recent issue RBC did was in 2012, paying 2.99% until 2019, and then CDOR + 110bp for 5 years thereafter.

So RBC is not obtaining their funding for free. Garth is right, mortgage margins aren’t all that wide at the moment.

#97 Kevin on 05.30.14 at 8:14 am

@Frustrated Kiwi

The Bank of England publication I linked to says

Newsflash: We’re not in England.

#98 Sorry cannot post my name on 05.30.14 at 8:27 am

Shirley
Your post is most unusual
From the sounds of your post you have been harassed by men. I can offer no suggestions other than seek professional help. The reason it appears to me you need to move on from your past. I have been harassed and bullied for 18 months and know what it like to be attacked by a serpent. Your post sounded like a cry for help. Most medical plans cover EAP. Give someone a call and talk it out. Your future well being depends on it.

There are many wired people on here, bottom line do what’s best for yourself.

Garth lives in a perfect world of sell your house and by back after the crash. But for the majority of us it just cannot be done, whether it be emotional, stupidity or blind faith, does not matter
For those that can pay heed to his advice do it, but if I followed his advice four years ago, I would be renting, rather my mortgage free house went up in value 30%
So if prices fall 30% who cares. Yes Papa Garth would say I could have invested the money and lived rent free and be liquid, and made 10% per year. But I am going to enjoy my property and have no regrets

Shirley for you enjoy your condo and safety with no regrets

This is getting past weird. — Garth

#99 Smoking Man on 05.30.14 at 8:41 am

#93 OttawaMike on 05.30.14 at 6:57 am

My note to Shirley was toxic the editor and chief reached into the monitor, tore the post by its roots, stomped on it and flushed
it.

All I wanted was her measurements.. For a new line of smoking man, ladies wear.

#100 No money in Canada on 05.30.14 at 8:56 am

https://ca.finance.yahoo.com/news/canada-economy-slows-1-2-percent-growth-first-123419669–business.html

#101 Ray Skunk on 05.30.14 at 8:58 am

Oh Gerald.

What a life he must lead, constantly stressing and second-guessing himself trying to time everything chasing the dollars.

His attitude is indicative of the mess we find ourselves in… he has a beautiful house in a wonderful area which, by his own admission, is perfect for him. It’s not as if he urgently needs to liquidate everything because he’s about to retire with nothing to show for it, he’s more than comfortable.

Whatever happened to buying a house and – crazy concept here – having it as your home and enjoying it?
What’s wrong with just relaxing with what he has – which is still a lot more than some, and checking out of the real estate rat-race, having already scored highly?

Oh to go back to the days when home ownership was all about having a nice roof over your head rather than trying to squeeze every last possible cent.

#102 Rational Optimist on 05.30.14 at 8:58 am

62 Mrs Riverview on 05.29.14 at 10:35 pm

Mrs. Riverview, trust me when I say that our biggest problem in Canada is not that so many families are soaking the system by having too many kids…

#103 Ralph Cramdown on 05.30.14 at 9:24 am

Green real estate agent lets his clients get rolled for $9,000 by wily veteran, but earns enough extra commission for a steak dinner.

http://www.torontorealtyblog.com/archives/being-prepared-is-it-a-double-edged-sword

Who had the stronger hand? The weaker? Who bluffed? Bonus points: Spot the RECO violation.

#104 Joe on 05.30.14 at 9:29 am

If American economy is recovering so is Canadian …
and house owners are winners..
inflation will wipe out housing debts…

Realtor economics. Love it. — Garth

#105 Ralph Cramdown on 05.30.14 at 9:33 am

#40 Flawed — “I keep reading on this blog that there is a US recovery and we should be invested in US assets.”

Spot the recovery.

Bonus question for keeners: What’s that blip in August 2009?

#106 Joe on 05.30.14 at 9:39 am

https://ca.finance.yahoo.com/blogs/pay-day-/canadian-cities-where-real-estate-prices-actually-falling-184722537.html

There a some cities where prices are actually falling…

But there is no way that Toronto, Calgary, Vancouver will see substantial price reduction…

If you bought with 5% down, then ‘substantial’ is 5%. Many consequences for all. — Garth

#107 OttawaMike on 05.30.14 at 9:42 am

#99 Smoking Man on 05.30.14 at 8:41 am

All I wanted was her measurements.. For a new line of smoking man, ladies wear.
_____________________________________

Never mind that diversion. I want you to tell us when the S&P and Dow are going to correct. That’s your only purpose these days.

#108 Ralph Cramdown on 05.30.14 at 9:49 am

The above link shows it from the corporate point of view, which is what I’m concerned about as a shareholder. But, anticipating the thoughts of critics, I thought what about per capita? After all, the population’s grown. Are people really better off, on average?

FRED rocks!

http://research.stlouisfed.org/fred2/graph/?g=C2v

And ironically, with a smaller fraction of the population in the workforce (more retired, in school and yes, unemployed), the news is even better, because people with jobs have expenses that students/retirees/the unemployed don’t.

Anybody wants to get all Piketty on me and talk about different effects by income, they have to bring their own data.

Answer to bonus question: sɹǝʞunʃɔ ɹoɟ ɥsɐɔ

#109 OttawaMike on 05.30.14 at 9:51 am

103 Ralph Cramdown on 05.30.14 at 9:24 am

I have to go take a shower after reading that.

Another reason not to own real estate, dealing with the wild west of used house salesmen.

Can’t somebody get fined there for revealing their buyer’s confidential offer information?

#110 Big Brother on 05.30.14 at 9:58 am

#34 Smoking Man on 05.29.14 at 8:39 pm
http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/
Sucks to be a basement dweller these days. I told you bastards last Sept.
I nearly fell of my chair tonight watching Lang and Oleary Keven said, with gas up, meat up, that’s inflation rates may may go up….
If have loot invested with this guy I would think twice.
He doesn’t know that rates are pegged to the labor market. Who would have known.
Unbelievable !!!!!
Oh and my call to unload equities was not based on any charts, inside info.
100% UCC that little feeling in your guy, tells you when to push all in or fold.
You all have it, but it’s suppressed by your programmed belief system.
To enjoy it’s full power, you got to lose your mind..

……………………………………………………………………..
MKULTRA says Smoking Man you are programmed to BS now we all know you work for RBC Capitol Markets so thats where your inside info comes from.
You are programmed!

#111 Londoner on 05.30.14 at 10:11 am

GDP 1.2% + Core inflation 1.4% = no change to the BOC overnight rate (for a while)

It’s not the BoC that determines fixed mortgage rates. — Garth

#112 Old Man on 05.30.14 at 10:12 am

#110 Big Brother – is the Smoking Man a member of the Royal Circle?

#113 Joe on 05.30.14 at 10:19 am

Whoever procrastinated with purchase of the house in Vancouver, Toronto is a looser anyway…
New normal reality came into the play and can’t go against those forces any more….either you can afford it or not…
Is not a matter of waiting for a crash that never comes…
It is matter of affordability….

Too many have been lured into an inflated market with extreme leverage. The goal of financial life is solvency, security and cash flow, not a house. — Garth

#114 DreamingInTechnicolour on 05.30.14 at 10:37 am

How soon they all forget- late 1989 early 1990 prices cratered first in Toronto and about 6 months later in Vancouver. Worst type of home to own at the time as it was the hardest to sell – a new condo. Next worst types were townhomes and older houses – what was the net effect ? – everything dropped in price across the board, especially homes the further out you went. Too many fools have never seen the market go down from thousands of sales per month to dozens per month and have no idea what it is like when the mortgage is underwater, job losses are looming and credit bills are piling up. Welcome to reality. It BITES!

#115 Daisy Mae on 05.30.14 at 10:39 am

#67 Cici: “….her teenagers could make money babysitting and pay for some of their own social activities, wants and needs…”

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

The teens will leave the island first chance they get. Grand Manan Island would not be for everyone…

#116 Eatin' Bonbons on 05.30.14 at 10:45 am

Great post and comments today. Had a few good chuckles with some of the comments-what more could I ask for!

CatFoodLady – You are the voice of reason and humility in a world going mad! Bless you for that!

#117 Yo on 05.30.14 at 10:45 am

My gut feeling the feds are going to introduce more housing restrictions once the election next year. It would be political suicide to introduce anything now and perhaps induce the economy into a full blown recession before an election.

Whoever wins the election can then introduce new policy and know that they have a full mandate (unless we get a minority gov’t) to ride out the consequences.

I would not be surprised the CHMC insurance thereshold would be brought down to something more reasonable, such as $500K. It is complete insanity to have the gov’t insure mortgages for houses up to $999k.

#118 Smoking Man on 05.30.14 at 10:51 am

Nice try big brother.
Your always close but no cigar..

No old man, I’m not in the Royal Circle…

#119 Smoking Man on 05.30.14 at 10:55 am

OttawaMike on 05.30.14 at 9:42 amNever mind that diversion. I want you to tell us when the S&P and Dow are going to correct. That’s your only purpose these days.
….
Should have corrected by now.
When central banks stop proping up the markets.

12 weeks of inflows to the US treasures, should be a warning to equity holders..

#120 Old Man on 05.30.14 at 11:00 am

I made a prediction that Alberta was going down, as its a one horse town fueled with gas and oil. There is gas and oil everywhere and the bell tolls for Alberta as it lacks costing and a proper delivery system to markets. I have lost track of the $billions that have been parked, but Total just shelved a $11 billion oil sands mine. Time to sell Real Estate in Alberta as jobs will disappear in time. Caesar’s energy policy for Canada was a joke, as the man is loco.

#121 Londoner on 05.30.14 at 11:03 am

It’s not the BoC that determines fixed mortgage rates. — Garth

I wasn’t talking about fixed mortgage rates, I was commenting on your interpretation of the current economic environment in Canada. I believe you have previously stated that the BoC’s next move will be to raise the overnight rate. I don’t see that happening the way things are going.

#122 Dupcheck on 05.30.14 at 11:37 am

When the church came up with the ~10% giving rule there were no 25-30% or more government taxes. Church was pretty much the government back then. That is one of the reasons I do not go to church any longer. I can not afford it. I would love to go, but I should be the one deciding how much to give without being looked at differently.

#123 Old Man on 05.30.14 at 11:41 am

Beware of who holds the power base in the next election because Caesar has nothing to run upon. The economy has been destroyed – Energy, Real Estate, Healthcare, Military, Immigration, and the list is long. Caesar allocates $3.5 billion for the women and children in the third world, and starting in 2016, $21 billion will be taken away from us year by year. The Military plan will cost $490 billion, and must be a contingent liability as nothing has been done. In the past 9 years what has been accomplished? Lets us look carefully at the Healthcare, as a man without this portfolio within the party was the driving force; a man that needs to be watched.

#124 Mixed Bag on 05.30.14 at 11:43 am

#26 Detalumis on 05.29.14 at 8:04 pm

There’s another way to look at the NB kid’s situation. Canada’s birth rate is not high enough to keep our population numbers up, so Canada imports people (immigration). How much does it cost the government to teach the parents and kids English? How long is the family on social assistance until the parents’ or kids’ generation earns a living wage?

I’ll bet the NB kid pays his share of gas tax, property tax, sales tax, HST, and other taxes I’m not aware of. Those who drink and smoke pay large tax. Lotteries are another form of tax.

Seeing as he’s living responsibly, he’s likely to not go on welfare, and who knows, might not need the OAS the BC couple likely will when retired.

He and his wife believe in giving 10% – how do you not factor in that societal benefit? What about the benefits of any volunteering (not mentioned, but possible)?

I wouldn’t automatically assume this family is a financial drain to the government, as their behaviour could very well be a net contribution that is not immediately quantifiable as a dollar value.

And BTW, the BC couple are municipal employees – aren’t they an automatic net drain on the economy? Made worse by the fact they squandered their earnings.

#125 maxx on 05.30.14 at 11:59 am

“A Toronto millionaire doomer.”

Wastes a huge amount of time and money attempting to cover all eventualities. Net result at retirement will likely be very average, given original potential. Many blue collar could pass and out-pace him.

Not sure a “crash course” in economics was a good thing. Scared his own pants off.

“The high-income, no-assets Van losers.”

Lost cause?

“And the NB kid making forty grand who supports three, is paying off a house, and worries about our values.”

Outstanding. Well done…..but keep the 10 percent cash gift and grow it. Donate gently used goods and source as much of what you need from second hand shops instead. Both of these actions go directly to people in need, is green and really helps your bottom line. You are not a millionaire- yet.

#126 chapter 9 on 05.30.14 at 11:59 am

The housing disease has claimed another victim! Former co-worker renting a two bedroom apartment for $1175.00 a month includes water/parking married two kids one car both he and wife making $18.00 an hour plus. Kids can walk to school they can walk to work or bike in the summer walk to the grocery store and recreational facilities. Quality of life ideal but we don’t own a house!!!
Yup bought a house in the big city took on $500k mortgage had to buy a second car and kiddies take public transit to school drive every where now cause they live in the burbs. Both are working full time plus his wife picked up a part time job working 4 hours a week cause with the new job makes less money.
But we are home owners now!!!

#127 Bottoms_Up on 05.30.14 at 12:10 pm

#76 not 1st on 05.29.14 at 11:39 pm
————————————
I’m quite certain a condo REIT is only purchasing cash-flow positive properties. Easy to do — look at what market rents are, and avoid cash-flow negative properties?

#128 Bottoms_Up on 05.30.14 at 12:13 pm

#75 souvereigninternational on 05.29.14 at 11:35 pm
—————————————————
I wouldn’t classify her post as sexist; perhaps paranoid, likely based on a few bad experiences she has had with men. I hope she realizes the odds of a psychopath knocking on her door are slim to none.

One bad apple don’t spoil the whole bunch girl…

#129 pinstripe on 05.30.14 at 12:13 pm

#120 Old Man

I made a prediction that Alberta was going down, as its a one horse town fueled with gas and oil. There is gas and oil everywhere and the bell tolls for Alberta as it lacks costing and a proper delivery system to markets. I have lost track of the $billions that have been parked, but Total just shelved a $11 billion oil sands mine. Time to sell Real Estate in Alberta as jobs will disappear in time. Caesar’s energy policy for Canada was a joke, as the man is loco.

———————————————————–

the 11 billion shelved by one player is absorbed by many other players fighting to get in on the future of Alberta.

When you want to see a one horse, come on down to the Calgary Stampede. World Class.

#130 Bottoms_Up on 05.30.14 at 12:17 pm

#125 maxx on 05.30.14 at 11:59 am
————————————–
I agree with the donation of used goods thing; why the heck would a family with dependents donate hard cash?

That extra money could:

1) provide more nutritious meals or,

2) provide for more extracurriculars or,

3) be saved for a plethora of things (birthdays, RESP, wedding, future down payment etc.)

#131 kILLabOY49 on 05.30.14 at 12:33 pm

Yes, I do feel better.

#132 Suede on 05.30.14 at 12:47 pm

#25 Shawn

Where do you find this info? Teach me your ways

#133 Mr. Frugal on 05.30.14 at 12:53 pm

Gerrie:

A bull market is referred to as climbing a wall of worry for a reason. If you have faith in the future then spread that money around a little. You should be able to sleep at night with a couple total market ETFs. We’re not going to go up in a puff of smoke.

Marie:

If you’re pulling in $170K per year you should probably have a seven figure net worth by now. Read the Millionaire Next Door by Thomas J. Stanley.

Stephen:

You’re on the right track. Just keep doin’ what you’re doin’.

#134 Old Man on 05.30.14 at 12:59 pm

#129 pinstripe – thanks for the invitation as have no time for horses. It is the start of beaver season here in Ontario and have enough to watch for now.

#135 Capt. Obvious on 05.30.14 at 1:10 pm

I wonder how many people in the general public understand that if something goes up in value by 25%, but subsequently falls in value by 25% from that point, that the value is actually below the initial value?

#136 Tony on 05.30.14 at 1:34 pm

Off topic: Kane Biotech Inc on the venture exchange is at it again today. Friday is always their favourite day. Remember I told everyone on this blog about this company? I sent in the formal complaint about swapping shares inside the company to push up the share price about an hour ago. Maybe one of the topics on this blog should be stock market manipulation.

#137 Ralph Cramdown on 05.30.14 at 1:52 pm

#135 Tony — “Kane Biotech Inc on the venture exchange is at it again today.”

I’m shocked … SHOCKED that you’d suggest manipulation on a stock with a market cap of 8.5M trading on the CVE. Isn’t there a dog track you could be losing your money at instead?

#138 Daisy Mae on 05.30.14 at 2:06 pm

#94 Kevin: “Why would he have to pay the land transfer tax twice? Once as a seller, and again as a buyer? Isn’t the rule that only the buyer pays it, meaning Gerald would only pay it once, when he buys back into the market?

In Toronto it is double tax on purchases. — Garth”

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

This means the seller AND the buyer pay ‘land transfer taxes’ on the same piece of property? Amazing…

No, the buyer pays two land transfer taxes, provincial and municipal. Close to $50,000 on the average $1 million home. — Garth

#139 Daisy Mae on 05.30.14 at 2:15 pm

…and if the seller purchases another property, he pays land transfer taxes on it, as well? And most buyers roll the cost over into their new mortgages? If this is the way it works, we are not only stupid but such suckers…

#140 Oceanside on 05.30.14 at 2:36 pm

Another reason not to own real estate, dealing with the wild west of used house salesmen.

———————————————————————–

We have to use due diligence when buying anything, homes, stocks, cars, boats. Nobody is forcing us to buy a bad or overpriced home, it’s time Canadians took responsibility for their own financial situations, easy to blame banks and realtors but in the end it is your own decision whether to spend or not

#141 Nemesis on 05.30.14 at 2:52 pm

#BeaverSeasonPointers. #WobbleBeforeYouPrime. #Mandatory15MinuteTicklePriorToTakeoff.

http://youtu.be/LkOKJzqf9QU

#142 Shawn on 05.30.14 at 2:53 pm

I Could Tell You But Then I’D Have To…

Suede at kindly asked

#25 Shawn

Where do you find this info? Teach me your ways

****************************************
For the last 15 years I have spent 10 to 15 hours per week on these matters. I book marked many useful sites that I came across over the years and I check in with the Bankers Association site perodically

#143 NotAGreaterFool on 05.30.14 at 2:56 pm

Garth – Regarding the race to the bottom by the lending intuitions, will Joe O just stand pat and allow this? Without more intervention by OSFI/CMHC, this would be a 180 reversal/turn by the Harper Government. What do your moles in the Ottawa describe?

#144 45north on 05.30.14 at 3:21 pm

Victoria Real Estate Update : talking about houses : priced well below assessed value

in Ottawa, nobody lists below assessed value

Mic : She purchased a 700 square foot condo with a $70,000 down payment provided by parents.

that got my attention

pinstripe : from your link:

Young noted that in March 2014, just weeks after the federal government announced cancellation of the Immigrant Investor Program (IIP), average prices for detached homes in Greater Vancouver dropped by a monthly record of 11 per cent from February 2014.

The fear among Chinese realtors is that people will just liquidate their assets,

I said the same thing, someone who pays cash just to get in will take cash just to get out. Liquidate doesn’t mean to list 10% below comparables, it means list 50% below. If some people liquidate then other people will be left holding the bag.

Sam Cooper wrote the article. It’s très important.

Mack : you had the same link but get second prize

#145 Doug in London on 05.30.14 at 3:23 pm

I figure governments give incentives like grants or tax breaks to TV stations to put on trash like Entertainment Tonight, or the mind-numbing house porn on HGTV. Why? So more people will leave the TV off, go outside and get more exercise, be healthier, and ultimately put less strain on the health care system. Hey, it works for me!

#146 Happy Renting on 05.30.14 at 3:29 pm

#72 Bottoms_Up on 05.29.14 at 11:12 pm

No way, millionaire doomer is my second choice. Stephen in NB is clearly the winner. He has the most valuable “asset”: a spouse who’s not a money moron. No unaffordable house horniness, out of control consumerism, or gross financial irresponsibility that may ruin him. With her they can pay off debt and save with 45k/yr; if they had 170k/yr they would be rich in no time. The BC couple who can’t get it going at 170k/yr would be totally f-ed if hard times brought them down to 45k/yr. And millionaire doomer’s $1M may not last long if the wrong girlfriend got her hooks into him (we don’t know in his case, but the amount some people can spend or waste is truly astounding.)

#147 Frugal King on 05.30.14 at 3:33 pm

#86–

Liberating indeed.

After doing the math, we decided to continue renting and not live paycheque-to-paycheque with a 25-year mortgage (in the Big Smoke).

20s now, below-average salaries, 6-figures saved, and a diversified portfolio that is beginning to pay off– merely the result of objective retirement planning and the realization that one doesn’t need to join the herd to achieve financial freedom.

#148 Old Man on 05.30.14 at 3:40 pm

#142 NotAGreaterFool – the Olive Man is not a free thinker, and will follow orders from above. Do you really believe in your wildest dreams that the Minister of Finance knows what to do?

#149 Habs76-79 on 05.30.14 at 4:10 pm

#117 Yo,

I would not be surprised the CHMC insurance thereshold would be brought down to something more reasonable, such as $500K. It is complete insanity to have the gov’t insure mortgages for houses up to $999k.
———————————-

If CMHC and its handler the Federal Govt. were acting as responsible partners to the citizenry of Canada CMHC rules on insurable mortgage amounts should NOT be in exact $$$ figures but based on % of gross household income. Ie: 33% of the declared household gross income will base the max. insurable mortgage under CMHC rules.

This would encourage people from going over their financial heads on buying housing they may have no business looking at, it would encourage sound principles among lenders and would create a more STABLE housing market. Bubbles would be much harder to begin and inflate.

#150 45north on 05.30.14 at 4:16 pm

old man: Do you really believe in your wildest dreams that the Minister of Finance knows what to do?

pretty funny

#151 Blacksheep on 05.30.14 at 4:17 pm

“For the last 15 years I have spent 10 to 15 hours per week on these matters. I book marked many useful sites that I came across over the years and I check in with the Bankers Association site perodically”

So now I use my mad knowledge to run internet defence for the banking system. That’s why I post redundant information, no body asked for on a regular basis. Sometimes I post 10 times a day, it’s a blast.

The money is actually better than you’d think, maybe cause it involves the blog voted best economic think tank in the country. Whatever, it pays the bills.

http://en.wikipedia.org/wiki/Operation_Earnest_Voice

#152 derek on 05.30.14 at 4:42 pm

If you bought with 5% down, then ‘substantial’ is 5%. Many consequences for all. — Garth

Why would anyone care if they own a detach in Toronto ?

Wait and see. — Garth

#153 Old Man on 05.30.14 at 5:15 pm

#150 – 45north: The Olive Man is too old for the Senate so they give him scripts to read instead. I laughed at the time he addressed a business meeting preaching about the need for the provinces to centralize the investment watchdog authority to Ottawa as it needed to be REFORMED. I knew then that the Olive Man had lost his pit.

#154 Butch on 05.30.14 at 6:11 pm

#152

Ominous Garth – how long should we wait though? It’s been quite awhile already.

#155 isleme on 05.30.14 at 6:58 pm

My wife is into city life, other than that, I love the idea of an island life, but its probably quite hard to find someone to pay you in your given field on a small island. The only problem I had with that anecdote was the church. I would be in favour of taxing all churches, because what the hell makes them so special? Use the tax money to fund cultless organizations please!

170k is madeness for this city. I have two kids and a wife renting a 2 bedroom for 1200 in burnaby. My wife is a student and I make 45k. We buy almost zero luxury items (except car), have not much savings, but survive fine. I drool at the possibilities @ 170k. I bet they waste it on a brand new car or two. Taking a loan on a car, when there are plenty of decent cars for 1000 bucks is just madness.

Other than that, I have no idea how you waste 170k a year between 4 people. Eat out once a week? once a day? fancy electronics? vacations? its crazy

#156 devore on 05.30.14 at 7:18 pm

That NB guy has his head screwed on straight. He’s got he right idea: spend less than you make. Consider that your 30-35 years of productive employment has to fund not just your current spending, but potentially 30 or more years of retirement with minimal productive income. Many elderly, even if healthy, are not able to earn much money, certainly not through “traditional” employment.

#157 Tony on 05.30.14 at 8:10 pm

Re: #137 Ralph Cramdown on 05.30.14 at 1:52 pm

They’ve (Kane Biotech Inc) been trying to lure quote “the big fish” for years but it hasn’t happened yet. Today was so bad it was a joke. They try to represent a great story with all their inside trades and always on the Fridays. No nibbles yet.

#158 Scully on 05.31.14 at 8:36 pm

Universities now “teaching financial responsibilty” to new grads? Smoking Man, you are right. Manipulate the herd. Look at the email I got from my alma mater University:
The SFU Alumni Association, along with our affinity partner Dreyer Group Mortgages Inc., are pleased to offer three 30-minute webinars at no cost, to help you build your financial knowledge and expertise regarding mortgage financing. The webinars will be from 12:15pm – 12:45pm on June 16, 23 and 30. Each webinar will be hosted by Jared Dreyer, the president of Dreyer Group Mortgages Inc., and information shared will be based on the Canadian real estate market.
Mortgages for First Time Home Buyers
Learn about:
o Programs available to the first time home buyer
o The mortgage approval process and approval guidelines
Buying an Income Property
Learn about:
o Costs associated with owning a rental property
o Rental income qualifications
Refinancing your Existing Mortgage
Learn about:
o When refinancing makes sense
o Who should refinance
o New guidelines governing refinancing
o Pros/cons of HELOCS (Home Equity Lines of Credit)
About Jared Dreyer:
Delivering superior mortgage financing solutions to satisfied clients during the past 18 years, Jared has built his business based on a passion and commitment for delivering exceptional client service and the very best mortgage options. He is in the top 10 mortgage brokers in Canada and has thousands of satisfied customers

#159 Scully on 05.31.14 at 8:40 pm

Regarding my post above, I find it very dangerous to go after university grads, who are already heavily indebted, and “educate” them on investing via more debt. When is this going to stop?!

#160 Larry1 on 05.31.14 at 11:35 pm

The only good debt has tax-deductible interest and is invested in productive assets.

#161 shawn on 06.01.14 at 1:23 pm

“Usually, don’t intelligent investors buy something when no one loves it and sell when everyone wants it?”

Of course not. You should buy gold, stocks, and real estate when they are at an all time high then sell it after the price drops 50%. Buy high and sell low; that’s the way my money goes.