Role model

image

Nathan has a problem. “My retired parents are deranged,” he says. “Help.”

Actually this is the second time I’ve heard from the concerned son. The first was when he asked my help in convincing them to bail out of their long-time home and pay down a staggering amount of accumulated debt. “So they sold that North Van dump for a tidy $1.2 million,” he says. “That wiped out all that debt and left them with enough change to buy a vacation home in Arizona.”

Well, a $150,000 shack in the sun is better than a moldy $1.2 million dump across the Ironworkers bridge. But now Nathan has a new problem with his 60-something hornies.

“After 2 years of renting they are chomping at the bit to get back into home ownership. I’m desperately trying to convince them that buying now will be the biggest mistake they’ve ever made, but they’re not listening.”

So here is the financial reality of Nathan’s folks, living proof people can be successful and still be fools. His dad was a judge and maintains a part-time law practice, which gives them a pension income of $120,000. After tax in BC, that’s about $87,000, or $7,250 a month. As for assets, there’s the Arizona house at $150,000, and a paltry $50,000 in cash.

“That’s it,” Nathan says, with a soupcon of disdain in his voice. “With that net income which they consistently overspend on, they’re convinced that their only move is to use that $50k in cash as a down payment for the nicest property they can find in Metro Vancouver (so a dumpy townhome at best), before they blow it on Bordeaux and tropical vacations.  That’s the level of financial management I’m dealing with here.

“They know housing is tanking, they know it won’t recover any time soon, but they’re convinced they can weather a $400k mortgage come hell or high water.  Can they?”

Of course they can. There actually are freehold properties selling for $450,000 or less, in such exotic places as Port Moody or the downtrodden bits of Surrey. Like this one in New West – a one-bathroom, 1911 bung which even the realtor says “needs lots of work.” Or this beauty in Port Coquitlam with a handy mortgage-buster in the basement and so desirable a property the price has just been cut by $50,000.

DUMP

Yup, the judge and his wife could use their $50,000 as a down payment and then take a $410,000 mortgage (including CMHC insurance). Together with property tax, insurance and lots of bear spray to keep the neighbours away, the monthly would be about $2,500. Well within their budget.

But, Nathan, why would they want to? After all, not only would they have to weave the Mercedes home every night between double-parked Silverados and over a carpet of discarded Bud cans and the odd corpse, but they’d be back in the debt soup. That $400,000 mortgage would last the rest of their lives and probably renew every five years at higher rates. The kind of trashy detached housing $450,000 now buys in delusional Vancouver will need constant repairs, and for a few dollars more, they could be leasing a brand new set of digs like this in the burbs or a glassy condo downtown. Besides, they already own a house in Arizona, complete with its own set of costs.

It’s another fine example of the house lust that threatens the personal finances of so many couples – especially those not fortunate enough to have a judge’s defined-benefit pension income. Even without an inevitable and debilitating housing correction, most people are now on the path to a one-asset investment strategy, gambling everything they have that real estate will retain all of its value. Forever.

The realtors continue to feed that, of course. CREA now says May sales across Canada increased by 4.8% from levels of a year ago, taking a big jump over April. Part of that was weather-related, since April was more like November in most places, but a big push came from collapsing mortgage rates, led by the headline-grabbing teaser rate of 1.99% from Investor’s Group (of all places).

There’s nothing like cheap debt to get the juices flowing, of course. And it just worked again. CREA says prices have increased 7.1% in a year – the lion’s share of that coming from just three markets. Yes, Vancouver is one of them. And it’s this houses-can-never-fail mentality which has people like Nathan’s folks itching to jump right into debt after they just crawled out.

The house-humpers who can’t stay away from this pathetic blog say debt-fueled prices are proof our real estate’s immune from correction. In reality, the higher house values travel without wage gains or economic growth, the harder the fall. Debt and desire alone cannot sustain what we now have. The wise among us are those who don’t bet everything on a single horse, or take on unrepayable debt to do so.

Nathan’s parents are privileged society rewarded them with a generous lifetime stipend. But here’s all the proof you need that being important and being unhinged aren’t mutually exclusive.

151 comments ↓

#1 Finally on 06.16.14 at 6:18 pm

Love will tear us apart

#2 Nemesis on 06.16.14 at 6:37 pm

#MakesYouWantToBangYourGavelHeadAgainstTheBar. #HereComeDaJudge.

http://youtu.be/oukujmD3Mck

#3 Mark on 06.16.14 at 6:37 pm

$120 grand a year in pension income, likely fully indexed to inflation, and an obligation of the GOC = net worth in excess of $2-$3M right there.

Who cares if these folks jump back into the housing market? It may very well be one of the only ways that all this crazy amount of wealth can be liberated from the old people and returned to circulation.

#4 crowdedelevatorfartz on 06.16.14 at 6:46 pm

Is there no justice? For the judge……get it?

#5 Shawn on 06.16.14 at 6:47 pm

Teaser rate?

but a big push came from collapsing mortgage rates, led by the headline-grabbing teaser rate of 1.99% from Investor’s Group (of all places).

********************************************
Calling a variable rate a teaser rate does not make it so. It’s simply a variable rate. And one has to qualify in the five year fixed, I believe.

We might well expect the variable rate to be higher than 1.99% over the years. Just as 99% of us thought that that the variable rates of one, two, three, four and five years ago were the low-water marks. We werewromng then. We could be wrong again.

In any case it’s not a teaser rate as that term applied in the U.S. which was a rate that was below market for a while and then rose by contract.

In short, a variable rate is not a teaser rate and saying it is does not make it so. It’s a riskier rate for the borrower but it is not a teaser rate.

For example the borrowers are free to move to another bank after the three years. Mortgages are notoriously portable. Checking accounts stay put, mortages easily move to the best deal in town.

#6 WhiteKat on 06.16.14 at 6:49 pm

I wonder how much of Nathan’s parents’ attitude has to do with the fact that they haven’t experienced financial problems throughout their working careers, so don’t think they ever will – the ‘it happens to other people not me’ mentality?

As someone who first bought into housing in ’89, I know how easy it is to regret a mistake and take years to recover from it. I won’t be as easily duped a second time. Of course there was no internet or Garth Turner’s blog back then, to warn me.

Nathan’s parents should know better, but I guess some people have to live it to get it, no matter that they are older, and supposedly wiser.

#7 Smoking Man on 06.16.14 at 6:50 pm

But here’s all the proof you need that being important and being unhinged aren’t mutually exclusive.

……….

I can vouch for that… Ha so true..

#8 DM in C on 06.16.14 at 6:53 pm

I get why that’s a relevant pic (role models, and lack thereof), but that’s Peaches Geldof, who very recently died of a drug overdose.

#9 FormerSaskie on 06.16.14 at 6:53 pm

Nathan seems much more financially astute and balanced than his parents. A blog edition covering the story about how he came to be financially wiser than his parents would be an interesting read.

#10 jim on 06.16.14 at 6:56 pm

http://www.thespec.com/news-story/4562595-area-real-estate-sales-broke-records-in-may/

Then comes the details;

” But as sales sped up, prices went down.

The average sale price of freehold homes, or homes where the owner also owns the land, decreased 2.3 per cent to $435,440. The average price of condos dipped slightly, down 0.5 per cent to $289,189.

Homes sat on the market for an average of 35 days, a slight decrease from 38 a year ago. “

#11 Ford Prefect on 06.16.14 at 6:58 pm

I practiced law for about 10 years, saved every spare nickel and retired. It was common knowledge that most lawyers could not save a penny regardless of their income. Therefore many took judgeships just to bail themselves out of the financial glue – that way they were salaried employees with a mandatory pension plan. I say mandatory because most of them would spend the pension portion of their salary if it were voluntary.

I also know that several of my former partners who had substantial earnings spent so much that at year end they could not pay their income tax. As far as I can tell there is little connection between education and the ability to manage money.

#12 Smartalox on 06.16.14 at 7:01 pm

That house in the ‘burbs that you suggested that Nathan’s parents rent? It’s in Langley (!).

Talk about having to weave the Benz through double-parked Silverados over streets paved with bud cans, you’d have to do all that, AND avoid the cow patties.

$3200 to rent that in Langley? Totally over-priced. Maybe in North Van (district), or Burquitlam at those prices!

#13 Ralph Cramdown on 06.16.14 at 7:11 pm

Always work for lawyers in Surrey, if he does criminal. None of that alternative dispute resolution stuff, though. ADR in Surrey just means using a .38 instead of a 9mm.

#14 Detalumis on 06.16.14 at 7:12 pm

Nathan sounds like a sociopath. Do you actually believe the judge is an addle brained dolt with no other savings from his entire lifetime but a 150K house and 50k, that they were 1 million in debt before they sold the Vancouver house and that the ex-judge shares all his financial information with his kid? Give your head a shake.

This seems to be a recurring theme in these articles, the 20 and 30 year old oh-so-intelligent kids need to rescue addle-brained Ma and Pa who even though they are capable of running a law practice act like they are senile and need protection.

How about tracking down the retired judge and getting his side of the story. Maybe he has a few million stashed away offshore.

#15 Happy Renting on 06.16.14 at 7:19 pm

Sorry, Nathan. I hope your parents choose wisely. So far their ideas deserve a face-palm.

#16 Godth on 06.16.14 at 7:20 pm

Illusions
http://www.youtube.com/watch?v=sROqdlMyl8E

#17 TurnerNation on 06.16.14 at 7:43 pm

This is a previously used picture. I can tell by the old model. (iPhone).

#18 Cici on 06.16.14 at 7:44 pm

#3 Mark

It may very well be one of the only ways that all this crazy amount of wealth can be liberated from the old people and returned to circulation.

Didn’t you read the full article? When these people sold their last home for $1.2 million, they had a million in debt to pay off, even with the $7,500 in monthly income. The son says they like to blow it all on bordeaux and tropical vacations. These wrinklies have no trouble “liberating” their wealth and returning it into circulation, with or without homeownership.

If I were Nathan, I’d be worried to, because he’s probably going to end up inheriting $1 million in debt. Nathan, ask your parents to give you all the family valuables and heirlooms now…tell them you want to safeguard them from future creditors.

#19 TurnerNation on 06.16.14 at 7:46 pm

Ohh Detalumis aka naikrovek dr.

#20 Mr. Frugal on 06.16.14 at 7:46 pm

I suppose it goes without saying that folks like this don’t deserve a gold plated pension. They should try being a Walmart greeter for a few months to make ends meet. Maybe that would wake them up.

#21 The original dave on 06.16.14 at 7:49 pm

Hi Mark. I like what you have to say. Can you recommend your 5 favourite books???

#22 Cici on 06.16.14 at 7:51 pm

#6 WhiteKat

To be fair, it sounds like his parents are alcoholics. If they were sober, they’d be renting here the number of months required to retain citizenship, and living in Florida the rest of the year.

Why would you need to waste a bundle on tropical vacations if you have a vacation home in Florida. But even still, if you were sober and you absolutely NEEDED to hit other tropical destinations, you’d rent your Florida digs out to pay for your travels.

#23 Nemesis on 06.16.14 at 7:56 pm

#Correct,DMinC #Sadly,TheyDon’tAllHaveHollyWoodEndings #”InEveryDreamHomeAHeartache.”

“In every dream home there is a heartache, and some heartaches blight more than one generation.” – Martin Townsend, Editor, SundayExpress

[Express] – A word from the Editor: Peaches Geldof – in every dream home a heartache.

http://www.express.co.uk/comment/columnists/martin-townsend/470128/A-word-from-the-Editor-Peaches-Geldof-in-every-dream-home-a-heartache

#NotLikeGrandPa&GrannyDidn’tTry #Paula&Bob

http://youtu.be/8drEjcu_pUU

#WhenThingsWereHappierForGrannyPaula

#1.TheBigBreakfast

http://youtu.be/gHlTsDI95Zs

#2.TheTube

http://youtu.be/gHlTsDI95Zs

[NoteToGT: We used to say, “Public faces. Private lives.” I hope RobFord’s paying attention tonight. Really.]

#24 };-) aka Devil's Advocate on 06.16.14 at 7:59 pm

#174 please Mr D.A. on 06.16.14 at 7:12 pm

Forgive them Father for they know not what they do.

};-)

#25 Happy Renting on 06.16.14 at 7:59 pm

#11 Ford Prefect on 06.16.14 at 6:58 pm

What do you think causes most lawyers to spend everything? The need to keep up an image (clothes, car, home, etc.)? Self-medicating to deal with the stress and long hours? Expensive tastes in trophy-spouses? Alimony/child support?

One of the better life strategies I’ve seen is to work the punishing-but-well-paid job for 5-15 years, sock away a bundle, and then walk away to enjoy the rest of your life. Have a family, travel, find a relaxed second career where the stress and hours won’t kill you. You obviously did this right, congrats on your retirement!

#26 Cici on 06.16.14 at 8:05 pm

#9 FormerSaskie,

This is actually a new phenomenon. I’ve been noticing that a lot of seemingly less-than-astute people (please note, I’m trying very seriously to be tactful here, if not outright PC) have very smart kids, and a lot of seemingly smart people have less-than-astute children.

Must be sociological conditioning. Helicopter parents turn their children into zombies, whereas incompetent parents are actually better role models, because their kids aspire and work hard not to be like them. Oh well, at least we know that Peaches’s kids are probably going to turn out alright.

#27 Joe on 06.16.14 at 8:11 pm

Some people still don’t get it….it is new reality and the house prices are real…….
inheritance plays big role in housing market.

You are not going to see houses for $400K anymore.
The new is $1million either you like it or not……….
and inflation on top of that….
Don’t be disillusioned ..THESE prices will stay….
Toronto, Vancouver, Calgary will rule………….as usual

#28 Old Man on 06.16.14 at 8:14 pm

The gal in the caption was used before as have an eye for a nice pose. You could have put up the new and improved model for my viewing pleasure instead :).

#29 Smoking Man on 06.16.14 at 8:17 pm

The is cancer in this world.. Barbarians… Hard to watch the news…

Fantasy about 40 virgins is all it takes…

Is it brain washing or diminished IQs

Time for some radiation therapy…

#30 Nemesis on 06.16.14 at 8:17 pm

#LinkErratum:1.TheBigBreakfast

http://youtu.be/tIIKU7fs-Y0

#31 HD on 06.16.14 at 8:21 pm

#26 Cici on 06.16.14 at 8:05 pm

Christine, right?

You might be on to something….I made the same observation.

My parents are clueless with their money. They simply don’t know what they are doing and won’t listen to anyone.

Meanwhile I’m 30 with 132K invested in a balanced portfolio.

Go figure.

Best,

HD

#32 Habs76-79 on 06.16.14 at 8:25 pm

Living beyond one’s own means will bite you hard in the butt regardless of income.

Once a person, couple or family are able to earn enough income to provide the basics in life, a basic roof over your head, basic utilities, clothing, food and transportation with some hopeful savings, it does not matter how much money one earns, if they choose to then live beyond their means.

If you survive on $25,000 income but spend $30,000 per year, you will be screwed if you don’t stop.

If you live on $75,000 income but spend $100,000 per year, you will be screwed if you don’t stop.

If you live on $150,000 income but spend $200,000 per year, you will be screwed if you don’t stop.

If you live on $500,000 income but spend $750,000 per year, you will be screwed if you don’t stop.

If you live on $1,000,000 income but spend $2,000,000 per year, you will be screwed if you don’t stop.

Living beyond one’s means is NOT economically survivable if intervention is not enacted. This is why I’m certain high income earners to even the millionaire class based on per capita likely go broke near as much as middle and low income earners.

Using your likely over-leveraged house as bank machine only exacerbates the issue.

WAKING UP AND SEEING THAT YOU MAY BE LIVING BEYOND YOUR MEANS REGARDLESS OF INCOME MAY BE WHAT CAN SAVE YOUR FROM UTTER FINANCIAL DESPAIR!

Sorry folks, most things we in the Western world think we may need, can’t live without, must have, deserve etc. are perfectly fine to do without if you do not have the true ability to pay for them. No amount of irrational brainwashing you emotionally do to justify things you really have no business buying will make a silly purchase into a good one.

Buying all too many things out of want and desire on credit can be done in minutes or hours, but will take likely years to pay off if you are not wise.

Living within your means does not mean a life of no rewards nor joys, but means being responsible and to balance life and wants, saving monies earned, growing such savings means you may have cash at hand at times if things are right to enjoy a perk or two or more in life. Patience is a virtue and as such likely may mean an ability to get something you may better value and appreciate more and maybe even for a better price.

#33 Cici on 06.16.14 at 8:26 pm

#28 Old Man

There is no new and improved model…she died recently from an overdose.

#34 Cici on 06.16.14 at 8:27 pm

#28 Old Man

…oh, and that “nice pose” was here dropping her baby while she was on the cellphone.

And we wonder why the human species is devolving.

#35 Toromierda on 06.16.14 at 8:38 pm

CMHC to return to lower-risk roots:

http://www.theglobeandmail.com/report-on-business/economy/housing/cmhc-to-return-to-lower-risk-roots/article19192231/

Not much detail as to what returning to their roots actually means or what timeline this is supposed to happen but there it is.

It better be a return to a certain multiple of income though–like no more than 4x maximum. If CMHC continues to guarantee 100% coverage up to 1 million dollar houses, this bubble will never end.

Lets see how willing banks are to lend to kids with no money if they have to keep large mortgages on their their own books instead of the taxpayers.

#36 Retired WI Boomer on 06.16.14 at 8:42 pm

Yes, I have worked against lawyers for 25 years. Most I knew were ill prepared, made bad arguments, knew little of the area of the law they were representing for their clients, and most lost!

So, judge I guess your learned, and concerned son might have the better idea, based on my past taste of the legal scholars.

Oh well, each choose their own fates. Buy the dam house, your ‘reputation’ as renters might be showing. What do I care if a retired Canadian Judge can’t pay his utilities, and his son inherits the wind?

The first shall be last, and the last shall be first; in keeping with recent ‘religious themes.’

#37 Mister Obvious on 06.16.14 at 8:43 pm

Sooner or later all financial reckoning comes back to the story of the grasshopper (extrovert) and the ant (introvert). Or if you like this one better: the tortoise and the hare

The extravert believes from an early age his world can be moulded via skillful glad-handing and carefully targeted BS. They do not tend to be ‘numbers people’. Indeed, they generally disparage logic and believe events outside their individual control can be ‘wished’ into fruition. They feel praying has power beyond psychological thumb sucking and tend to embrace the gambler’s fallacy. Extroverts make swell artists, actors, musicians, and even politicians but they are usually poor investors. Many successful entertainers have woken up one day to a multimillion dollar tax bill without the slightest idea how it happened.

The introvert realizes from an early age that much of what occurs in his world has a large random component and that wishing ‘really hard’, (while a naturally human thing to do) is quite pointless. They seek out systems that work more often than they don’t and strive to understand the reasons why. The biggest wet blanket at a campfire sing-along will be an introvert. But they tend to keep their heads when the world is going mad. They are happy to get rich slow and know when risk is outpacing reward. Extraverts regard introverts as low achievers lacking in ambition but the onset of old age exposes a field of suffering, bailout seeking grasshoppers that, as usual, have no idea what happened.

#38 Retired WI Boomer on 06.16.14 at 8:45 pm

Headline picture has changed!! Felt guilty, eh Garth?

About what? — Garth

#39 sheane wallace on 06.16.14 at 8:47 pm

stocks are going up.

Central banks shift into shares as low rates hit revenues

http://www.ft.com/intl/cms/s/0/d9dfad02-f462-11e3-a143-00144feabdc0.html?siteedition=intl#axzz34ktExR6g

yep, no market correction. Commodities and energy to the moon.

How is YOUR INFLATION?

#40 Tony on 06.16.14 at 8:50 pm

You always get to see it first-hand how the poor always manages to stay poor. He gets up a couple of bucks and wants to give it all back immediately.

#41 gladiator on 06.16.14 at 8:57 pm

It takes a lot of brains to become a judge. This is no easy job and not every average-schooled citizen can be trusted with such huge responsibility – to decide on people’s fates: who do you throw in prison and who do you release.
But! I guess financial literacy is a completely different animal. One can be a genius in a certain field/profession, but a complete dummy in money matters. I would say the judge should be given an award – something like the “dummy of the year” or so. The saddest story I have read here in the last 12 months. They were about a million dollars in debt – all this while having a very decent income! OMG!

#42 the jaguar on 06.16.14 at 9:16 pm

#41 Gladiator…
It isn’t really so much about financial literacy. More often it is all about a compulsive need to spend and acquire things. Sometimes it’s easy to see who has the problem based on where the money has been spent or what has been acquired. All fields or professions can be guilty of it (although teachers and social workers are in a class of their own). I hope there isn’t going to be a ‘pile on’ for sayin’ that, but it’s so true.

#43 Old Man on 06.16.14 at 9:18 pm

#29 Smoking Man – ISIS is a code word and affiliated with al-Qaeda (C.I.A.). We are told its an elite army which executes an extreme version of Sharia Law, so how is it that they have their own website? Now under Sharia Law they are allowed to only have four wives, and even the Mormons have a better deal. This looks like a sham to me. They march all in black and the brave run away by the hundreds of thousands in fear.

#44 Rob Ford In Rehab on 06.16.14 at 9:19 pm

Hiya Garth!

When I saw tonight’s caption, I just knew I had to drop in, coz this is exactly how I think the voters will see me very soon, a real role model!!

100% Guaranteed! I am comin’ baaa…aaaackk!!

On a more serious note, though, I gotta speak about two politicians in the news today, Joe and Frank.

Frank, out there in Newfieland (I love sayin’ that!), what are you thinkin bro? You’ve quit before taking on the sweetest job in the province. Over a family matter? Well, if it’s anything like mine have been, she’ll forgive you and go down with your ship, so why make such a big deal?

And Joe, dear Joe, wtf are you doing quitting? It’s only one fraud, and only freakin $1700!! Do you have any idea how much the time I’ve stolen from Toronto taxpayers is worth? That’s peanuts! You might not even get sentenced to any time, so take your time, keep your options open!

Believe me dudes, the people love a comeback story.
Don’t quit!

You could still have it all and then some – come see me at the Esso station anytime, we’ll talk, ok?

Please think it over, fellows. If politicians start doing this, all those lefty elitists will have their dreams come true. We can’t let that happen!

#45 Vlad on 06.16.14 at 9:20 pm

Here’s something for anyone thinking about selling their house and putting it all in the stock market.

http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

Maybe the only safe place is in the mattress!

Like central banks are going to tolerate mayhem. Get a grip. — Garth

#46 takla on 06.16.14 at 9:23 pm

Maybe nathans parents don’t give a s_it about being financialy responsible as they are informed and realistic of statistics concerning their longevity??
Maybe just maybe they have buried more than a few of their contemporaries to cancer/diabetes,heart desease and are commited to living well for today and dam the future as none of us knows when our time is up.

Maybe Just maybe its in their plans NOT to leave Nathan a nice nest egg after their gone due to numerous disappointments/beliefs that for whatever reason he wont be a good manager of their hard earned
money;s over their lifetimes.One thing for sure”you cant take it with you” and anyone that says the one who’ dies with the most wins the game is delusional
Far too many varibles here

#47 sheane wallace on 06.16.14 at 9:27 pm

#43 Vlad
…………………………..
It means stock market and commodities are going up.
Get rid of the cash, invest it.

#48 Nemesis on 06.16.14 at 9:36 pm

#HeroesCome&Go. #LegendsNeverDie. #OnlyLove&ArtAreEternal.

http://youtu.be/EzXA6O9pbVU

#49 Smoking Man on 06.16.14 at 9:38 pm

#43 Old Man on 06.16.14 at 9:18 pm#29 Smoking Man – ISIS is a code word and affiliated with al-Qaeda (C.I.A.). We are told its an elite army which executes an extreme version of Sharia Law, so how is it that they have their own website? Now under Sharia Law they are allowed to only have four wives, and even the Mormons have a better deal. This looks like a sham to me. They march all in black and the brave run away by the hundreds of thousands in fear.
……

Maybe is a phyop, deigned to make me rather dislike a certain demographic, it’s working…

Mine you, I hate all humanity that believes in fairy tails.

#50 Godth on 06.16.14 at 9:38 pm

Like central banks are going to tolerate mayhem. Get a grip. — Garth

You really crack me up. Sweet, sweet irony. It’s has a rather bitter aftertaste though.

How long until they own the whole market(s)? 29 trillion in a 60 trillion game in 5 or 6 years, pretty good. lol. Unfortunately they’re not war averse, that will save the game surely. First strike…shields up. Comic book plots.

#51 Teacher's Ass-istant on 06.16.14 at 9:39 pm

“#29 Smoking Man on 06.16.14 at 8:17 pm”

I am so confused! I’m afraid I agree with Smoking Man in this comment.

#52 Fodork on 06.16.14 at 9:43 pm

I am now a greater fool. Had to finally cave in to family pressure and buy last week. Bought a SF detached in Thornhill/Vaughan 5% below asking and 5% below below comparables. Interestingly Realtor posted the selling price as asking price to make MLS look good. 10% down and another 10% guaranteed by my employer (therefore saving the ~15k in CMHC insurance). I am fully cognizant of the risk I have taken but this is a 10 year buy and hopefully will last through a cycle. Worst-case I am prepared to walk away if a US-style crash plays out. Will keep reading your blog to stay connected to the facts versus the RE cartel speak which media puts out.

#53 Bob on 06.16.14 at 9:46 pm

Wow. Judges make north of 200K and a generous pension with mandatory retirement at 75 I believe.

From the bc government:

“British Columbia’s Provincial Court Judges are members of the Public Service Pension Plan (the “Pension Plan”). In 2004, the total annual cost to fund the judges’ pension was 29.2% of their salary. Pursuant to the Act (and consistent with the obligations of other members of the Pension Plan), the judges’ contribution rate was fixed at 7%, with the balance of 22.2% paid by the Government, or a ratio of 24:76.”

And still broke. WOW!

#54 Paul (Toronto) on 06.16.14 at 9:56 pm

I am trying to buy house in Toronto with salary of six figures and I am not able to buy. I feel that everybody is richer than I am. I am just not ready to pay more than ‘right’ price which itself can be questioned. People are just Rich here!

Check this out

http://www.theglobeandmail.com/life/life-video/video-someone-paid-a-quarter-mil-more-than-asking-for-this-riverdale-semi/article19124112/

#55 JSS on 06.16.14 at 9:57 pm

The best lawyer I’ve dealt with is a guy by the name of Harvey Spector. He works for the firm Pearson Hardman (now Pearson Spector).

#56 45north on 06.16.14 at 10:00 pm

Toromierda : from your link : CMHC has an explicit government guarantee, leaving taxpayers on the hook if things go sour. Mr. Siddall said he does not believe the housing market is in dangerous territory, but even so, managing risk for taxpayers is a “sacred obligation.”

sacred obligation!

which it is

#57 Freedom First on 06.16.14 at 10:02 pm

Sharpest retired people I know in their 50’s and 60’s have dumped the house and have assets well into the 7 figures all wisely invested. Every one of them rents a place in Canada year round, goes somewhere warm for the winter, rents a furnished place there just for that winter, and has the home base in Canada if they want to fly home for any reason in the winter. The smart retired, but not as rich people I know, have dumped the house, and either rent here for the summer only, and then rent somewhere warm for the winter, paying only 1 rent at a time. Some other smart, not as rich people will rent a place year round in Canada, and have a nice sized RV that pulls a car, and go south where they can park in the desert for free, and the ones who do this, usually make friends down there and meet up every year. Some will just drive their car down and rent a Mobile Home or a condo for the winter, where most make friends with people they meet who go to the same place every year. ALL of these people have one thing in common. They have found freedom with a lifestyle they love.

#18 Cici

Cici, I enjoy most of your posts and appreciate your comments on Garth’s blog. Just want to let you know, kindly, people do not inherit their parents debt in Canada, unless their name is on the contract. Take care Cici:)

#58 Old Man on 06.16.14 at 10:05 pm

#53 Bob – that’s nothing as almost went for this gig decades ago as an officer because the rank was time dated. We have in Canada untold numbers of Generals sitting around pushing paper earning between 172K to 253K annually. Now when they retire the pensions are huge with benefits that are out of this world. Now to become a General you have to kiss butt or you will never advance in rank.

#59 Nemesis on 06.16.14 at 10:06 pm

#NotToWorry. #HeMakesTheCompanyJumpWhenHePlaysReveille. #YouCan’tKeepABoogieWoogieBoyDownForLong.

http://youtu.be/qafnJ6mRbgk

#60 Western Observer on 06.16.14 at 10:10 pm

This couple are nothing special here in Vancouver.

See examples of them daily. Must keep up the image regardless of consequences. Almost as common as the fat 50 yr old in bike shorts riding a $2000 road bicycle – hilarious!

Use the house as ATM to buy cars, vacations, reno’s , clothes. When you can’t get money out of house – borrow more. Everyone is doing it!

Garth – the area in Surrey you picked for the new rental house- hideous.

Prices are not going down here in Vancouver. Mildest climate in Canada, most attractive city in Canada. Golf & Ski or Go to beach & snowboard all in same day. You can come here from anywhere in the world and find your culture, community, food – fit right in. It is safe, the government is stable and we don’t have USA gun culture.

When I said spring would be a robust market , I sure did get a lot of back lash.

Interest rates are not going up. They will go down in tiny increments to keep people buying. You rent money now with no intention of paying it back.

When you die with huge debt – who cares?

They can’t come after you for it.

#61 Mean Gene on 06.16.14 at 10:13 pm

No inheritance for Nathan and if his mom out lives the old man, that could get ugly.

#62 Sean on 06.16.14 at 10:17 pm

Like central banks are going to tolerate mayhem. Get a grip. — Garth

———-

Ah, the great illusion… the central banks are hard at work to help the good citizens! In fact, as the GFC made crystal clear, central banks are more than happy to close the stable door after the horse has bolted. Central bank response to the GFC has led to the greatest increase in wealth disparity in history… the secret lies in who these boys work for. The naive view (sorry Garth) is that these boys had to do something, and they did the best they could… and at least it was better than nothing. The more realistic view is that these guys aren’t that f-ing stupid… and that the bailouts essentially came out of the pockets of the taxpayers (in fact the general citizenry via inflation) and straight into the pockets of the 0.1%.

While I accept Garth’s premise that stocks will likely fare best in this environment, I think it wise to better understand the motives of central banks… meaning, if and when it suits, they will happily stand by and watch a 50% or more decline in the markets, before orchestrating the next set of bailouts.

Don’t get married to that Greenspan / Bernanke / Yellen put.. it just may let you down when you least expect!

#63 Teacher's Ass-istant on 06.16.14 at 10:24 pm

“#46 takla”

Strange night I find myself agreeing with this also.

You know what they say; Where there’s a will there’s a realtive.

#64 Waterloo Resident on 06.16.14 at 10:28 pm

YOU CAN’T FIX STUPID.

Life is hard. Its even harder when you’re stupid.

#65 X on 06.16.14 at 10:29 pm

Why would they buy, yes they have basically pissed away their money, saving nothing, and investing even less than that, but why buy when they will never pay it off, and when you can rent something better for comparable many per month.

#66 Jack Henning on 06.16.14 at 10:30 pm

The real problem begins when a spouse passes away and they will get maybe 65% and lose 35%.

By that time all prices, costs, expenses, taxes, fees, inflation will be much higher, maybe 60% to 100% higher.

The double financial hit of losing 35% or $42,000 a year or more and paying 60% to 100% higher for mostly everything will wish they were more smarter with their finances.

#67 Joe2.0 on 06.16.14 at 10:31 pm

Never say never.
US sending troops into Bagdad.
Also made some $ on gold this week.
Just saying.

#68 omg on 06.16.14 at 10:32 pm

WOW $120K PER YEAR PENSION means the good judge was raking in over $180 per year when he was working.

And selling his house for $1.2 million in Vancouver means it was likely fairly modest and not a cash sink hole.

Holy crap – where do they piss away that kind of annual income and be left with essentially $50k savings (before they sold the house).

Likely new late model high-end vehicles traded every couple years. Expensive annual family vacations. Paying the full tab for the kids to go away to university. Club memberships, expensive eating out all adds up but that still should leave some pretty good coin to save.

Like they say – the millionaire may be the guy next door driving the 10 year old minivan and living in the paid off bungalow, not the guy with 2 Lexus in the driveway.

#69 sheane wallace on 06.16.14 at 10:39 pm

#50 Godth
…………………………
Yep, owning majority of the market, of the things that matter. somebody printed some money and bought 60-70 % of the world.

When SHTF we will see how much real stuff/commodities cost. And that does not include houses.

Having any shiny stuff? Now you know why the Chinese buy it.

#70 Flawed on 06.16.14 at 10:42 pm

“As far as I can tell there is little connection between education and the ability to manage money.”

Cept they seem to be smart enough to quit struggling and get a cushy high paying 9-5 weekday job as a judge paid for by the taxpayers till they die. HUGE intelligence for that !!

#71 omg on 06.16.14 at 10:45 pm

#60 Western Observer
“You rent money now with no intention of paying it back.”
————
So true. All my nephews and nieces that are piling into RE just worry about the monthly payments.

The idea of paying down the mortgage is not on the radar screen.

Maybe its just that the numbers are so big and the social pressures so great to move up as you get older.

I remember when people would buy maybe two or at most three houses in a lifetime. Now the view is to be flipping to a new house every few years.

#72 Randy Randerson on 06.16.14 at 10:49 pm

Nathan’s parents are smart people, albeit financially castrated if they go ahead and buy a house with their meager $50k.

But if you look at a different angle, like Mark @3, isn’t it great that they’ll spend all their pension money on more toys and meals, thereby keeping people employed in Vancouver, and by extension, the Canadian economy? Without consumers, capitalism will grind to a halt, and us savers would be unable to participate in the growth of publicly listed companies.

Those gold-plated pension will flow back into the economy, so maybe we should encourage public sector retirees with the YOLO slogan, and cheer them on as they spend every single cent that’s under their names.

#73 Old Man on 06.16.14 at 10:51 pm

#67 Joe2.0 – these are not troops but advisors; probably C.I.A. or whatever.

#74 Flawed on 06.16.14 at 10:53 pm

“#45 Vlad on 06.16.14 at 9:20 pm
Here’s something for anyone thinking about selling their house and putting it all in the stock market.

http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

And even more fuel for Bitcoin’s fire.

Maybe the only safe place is in the mattress!

Like central banks are going to tolerate mayhem. Get a grip. — Garth”

#75 sheane wallace on 06.16.14 at 10:53 pm

https://ca.finance.yahoo.com/video/finance-minister-says-housing-market-173800772.html

run for the hills.

#76 Ralph Cramdown on 06.16.14 at 10:56 pm

#5 Shawn — “In any case it’s not a teaser rate as that term applied in the U.S. which was a rate that was below market for a while and then rose by contract.”

Things to note for US ARM loans:
– rates were higher then
– the mortgages were prepayable, sometimes with penalties
– a teaser rate to a subprime borrower still looked crappy compared to what a prime borrower could get
– borrowers usually had to pay ‘points’ (1=1%) in upfront fees, which could be rolled into the loan

Nobody thought they were charging below market interest including fees, whether the loan was prepaid or not. In hindsight, the rates didn’t compensate for the risk.

Some excellent material:
http://www.calculatedriskblog.com/2007/12/subprime-arm-initial-rates.html
http://www.calculatedriskblog.com/2006/12/tanta-on-hybrids-teasers-and-other.html
http://www.calculatedriskblog.com/2007/12/option-arm-tightening.html

Things were different down there, but our market of mortgage insurance that can be added to the loan (like points), 5 year balloon fixed or VRM, and often very high break fees — all on products for which until recently the borrower didn’t have to qualify at a higher-than-current interest rate — makes for some iffy loans. And that’s our ‘prime’ market. We’ve got subprime lenders, too.

#77 Joe2.0 on 06.16.14 at 10:59 pm

Smoking Man
Not 40 virgins that’s old school.
A group of imams upped the booty to 1 million a couple of years ago.

If your going to deceive might as well go big.
The perfect lie, virgins via the only guaranteed route into mecca, martyr.

Deadly combo.

#78 Randy Randerson on 06.16.14 at 11:01 pm

The common denominator between the judge couple and a bank robber (the irony), is that both see money as the world’s most plentiful renewable resource. If they need money, one just waits for another month until the proverbial cheque is in the mail, while the other one goes and robs a bank.

You need water? Just turn the tap on!

Both have completely discounted the probabilities that the tap might get cut off in the future. Unless they have the power of clairvoyance, it’s always possible that the government could cut off existing pension.

#79 Godth on 06.16.14 at 11:04 pm

#69 sheane wallace

I don’t think it will make any difference.

Are you ready for nuclear war?
http://www.presstv.ir/detail/2014/06/03/365401/are-you-ready-for-nuclear-war/

#80 Shawn on 06.16.14 at 11:06 pm

CMHC returning to roots?

Toromierda at 35 says:

It better be a return to a certain multiple of income though–like no more than 4x maximum. If CMHC continues to guarantee 100% coverage up to 1 million dollar houses, this bubble will never end.

****************************************
Dream on, I have been fairly aware of CMHC rules since I avoided their fees in 1989 and 1990 with my first of three house purchases.

I never hear of CMHC having a three or four times income rule. It would make no sense. They always had a 30% of gross income rule or something close to that and 40% counting all debt.

When I bought my present house in 1995, I set a price I was comfortable with and shopped for that price. I had never heard of a tree or four times income rule and instead bought at closer to 1 and half times our two incomes at that time.

I never heard of this so-called rule of thumb until it pooped up on this site back around 2007.

Like the tooth fairy, it never existed and made no sense.

When interest rate were 15% a 30% debt serve ratio would have to be lower than two times income for the mortgage even with an interest-only loan.

At 3% interest the multiple to earnings increases.

This is just about the most basic math of finance, the same way bond prices move inverse to interest rates so do house prices.

And as to lowering the million dollar cap, dream on. By that logic maybe it should have been capped at $100k, since back in the 60’s and early 70’s $100k would have been outlandish.

Really people, you may not like CMHC but it has been around guaranteeing mortgages for some 67 years. It is NOT the prime reason for high house prices.

P.S. What bubble? (Just threw that in, could not resist)

#81 Mister Obvious on 06.16.14 at 11:06 pm

Of course prices are not falling in Vancouver. Where else can you sit in gridlock all morning, be pestered by pan handers at noon and get your car ticketed and keyed at night?

#82 Shawn on 06.16.14 at 11:08 pm

Education and Ability to handle money.

One of my university text books of the early eighties, had a nice quote at the front.

It was something like:

There is no great correlation between learning and wisdom, Francis Bacon

And this was quote was put there by an educator, as some have said, you can’t fix stupid.

#83 Shawn on 06.16.14 at 11:11 pm

I never heard of this so-called rule of thumb until it pooped up on this site back around 2007.

Excuse my unintentional scatological humor. Most unintentional but it made me laugh.

#84 R on 06.16.14 at 11:18 pm

#32 Habs76-79

“Buying all too many things out of want and desire on credit can be done in minutes or hours, but will take likely years to pay off if you are not wise…”

***

But what if you’re in a season of want?

#85 sheane wallace on 06.16.14 at 11:20 pm

this thingy with the central banks buying stocks is significant. it is the story of the decade and could be the story of the century.

i read about it as an option several years ago, it was an article by either chris marthenson or james rickards.

it is so significant and it happened in silence, behind the scenes.

run for the hills/the euro.

#86 Cici on 06.16.14 at 11:21 pm

#57 Freedom First

Thanks, and I enjoy yours. You are technically right that we don’t automatically inherit our parents’ debt, but when valuables are involved, I’m pretty sure that you have to pay up on the debt, otherwise those items go to the creditors. This is true at least in Quebec; when my ex’s father died he owed a lot of money to creditors, and the ex did not have a legal right to claim any of the family heirlooms (watches and other antiques) unless he was willing to pay off the creditors (hundreds of thousands of dollars). I think his father named him as the beneficiary of those items too, but I’d have to check.

#87 Chickenlittle on 06.16.14 at 11:37 pm

Big Al New in september 2012 commented here:
“I have friends that see no problem with commuting 120 km a day stuck in 3 hours of traffic for what. Never mind higher interest rates gas at 1.45-50 would kill the housing market faster than a 1/2 point rise in interest rates. ”

Well we are close to that right now! The housing market zombie just keeps coming no matter what we throw at it.

#68 omg

I agree with you. I had this discussion with my husband last night. Just because someone has nice toys doesnt mean they can afford them.

I think the judge lived life for the present when he was young and didnt think that time would go by so fast.

He probably did what you said: expensive everything.

#88 TheCatFoodLady on 06.16.14 at 11:41 pm

Nathan is not alone in having fiscally challenged parents. Many of us may as well & not know it because our parents don’t share their financial lives with us, just as we may not with them. Easy credit & home equity may give the illusion they’re far better off than is the case.

So what do you do when a parent dies & you learn the other parent is left destitute or next to destitute? What you may have thought was a secure family home for the surviving parent may have to be sold to clear debts & the survivor have very little left to live on. Potentially even worse, this may happen as they enter the medically expensive years, YOUR adult kids may be pressuring you for ‘help’ buying a house/condo & you also need to max out your own retirement savings.

#89 2cntsCdn on 06.16.14 at 11:46 pm

So the judge is your run of the mill idiot … not saying he isn’t a good judge …. just saying he sounds like an idiot about financial matters. But a steady pension will cover lots of payments … and for a long time … so he can probably remain an idiot (and exist at some level) until he gets in the ground. I know several “smart” people who starve and can barely get out of their own way ….. and several people who I would consider below average intelligence who are millionaires and live pretty darned good lives. Book smarts can be taught ….. you either have financial smarts or you don’t.

#90 John Foster on 06.17.14 at 12:08 am

Holy Crap Where’s The Tylenol

I’m sitting on a 1979 Distillers Edition Lagavulin. I’ve got an 87 as well. I can’t bring myself to crack them open at this point…

#91 1 mil is nothing on 06.17.14 at 12:20 am

#41 gladiator on 06.16.14 at 8:57 pm

Yea, judges are the best of the best and deserve the highest respect:

http://www.democracynow.org/2011/2/22/judge_convicted_in_pennsylvania_kids_for

#92 Ford Prefect on 06.17.14 at 12:21 am

#70: Flawed: “Cept they seem to be smart enough to quit struggling and get a cushy high paying 9-5 weekday job as a judge paid for by the taxpayers till they die. HUGE intelligence for that !!”

Judges are paid so much because lawyers are the most boring people in the world but the judge has to listen to them and law the most boring subject (ok maybe behind accounting). Try listening to this stuff for 6 – 8 hours per day and then give us your impression. I doubt “cushy” will be the first adjective.

#93 Andrew Woburn on 06.17.14 at 12:31 am

#81 Mister Obvious on 06.16.14 at 11:06 pm
Of course prices are not falling in Vancouver. Where else can you sit in gridlock all morning, be pestered by pan handers at noon and get your car ticketed and keyed at night?
==============================

And if you are among the fortunate few who avoid the traffic by living downtown, you can enjoy the nightly music of sirens and screaming drunks followed by construction melodies starting at about 6:30 am, even on weekends.

If you are retirement age and dream of downsizing to the fast lane in a downtown Vancouver condo, do yourself a favour. Spend a couple of weekends in a downtown hotel before you shop. The idea of being able to walk to the Symphony sounds really cool, but it’s probably cheaper to take a limo from Burnaby for the half dozen times a year you actually attend a performance.

#94 Ralph Cramdown on 06.17.14 at 12:45 am

#80 Shawn — “I never hear of CMHC having a three or four times income rule. It would make no sense. They always had a 30% of gross income rule or something close to that and 40% counting all debt.”

It’s an old folklore rule of thumb from the US. If you bought at 3x income with a 30 year fixed rate mortgage at interest rates and inflation that prevailed through MOST of the 20th century, you’d be house poor for a few years and then your income would grow and take off some of the pressure.

With the higher rates and inflation around 1979, the rule became useless, thus TDSR and GDSR. They’re not so great either, as they’re based on gross income and take no account of an individual or household’s average tax rate.

But we can’t make things too complicated for home buyers or mortgage floggers, nor stress the difference in tax rates of various households.

Looks like we’re not the only place where elderly cabinet ministers occasionally wander away from their talking points:
http://www.standard.co.uk/news/london/vince-cable-calls-for-london-mortgages-to-be-limited-to-three-times-income-9531587.html

#95 Andrew Woburn on 06.17.14 at 12:50 am

I take it all back. Everybody should live in downtown Vancouver.

“Coyne: Vancouver traffic-congestion plan could be model for the world”

http://www.vancouversun.com/technology/Coyne+Vancouver+traffic+congestion+plan+could+model+world/9944954/story.html

#96 Freedom First on 06.17.14 at 1:06 am

#86 Cici

Thank you, and I don’t doubt at all that your reply is right on the money:) …….as that was something I personally wouldn’t consider unless of course I was to net some money from the estate. Keep in mind Cici, when it comes to heirlooms or any other physical things, I have no emotions. Like a house for example, I have owned in the past, but whether I rent, or I own, to me it is not relevant. Home is where I live, period. This has enabled me to live by Garth’s formula since I was on my own as a teenager, as was my siblings, through fate, and no ones fault. No surprise, as it was sink or swim, we all learned fast and we all started with the shirts on our back. I am doing well, but I am the poorest of all of them, money wise. But I feel the richest, as I have always put “Freedom First”. Take care Cici, thanks.

#97 betamax on 06.17.14 at 1:37 am

#11 Ford Prefect: “I also know that several of my former partners who had substantial earnings spent so much that at year end they could not pay their income tax.”

Sounds like some realtors I know. No joke.

#98 devore on 06.17.14 at 1:48 am

#43 Old Man

ISIS is a code word and affiliated with al-Qaeda (C.I.A.). We are told its an elite army which executes an extreme version of Sharia Law, so how is it that they have their own website?

Can’t tell if very serious, or sorta serious. You have a solid track record here of technology ignorance, based upon which you spin up some of the most bizarre conspiracy theories. Or do you still believe end of support for Windows XP, publicly announced half a decade ago, is a government conspiracy to hack your computer?

Drop me a line, I’ll set up a website for you in 5 minutes, no charge.

#99 RainCity on 06.17.14 at 2:27 am

Garth, I would love to hear your opinion on the crazies who think supporting transgendered kids in Point Grey will affect property values. The same folks who didn’t want a hospice in their neighborhood because it would be “bad luck”

http://www.cbc.ca/news/canada/british-columbia/transgender-policy-adopted-by-vancouver-school-board-1.2676879

#100 Hillbilly on 06.17.14 at 3:22 am

the jaguar – comment # 41

Think about it.

Why would teachers or judges or anyone else that has a guaranteed robust pension not spend all their money?

It is the certainty that they will have a well-funded retirement that generates the free spending habits.

I believe that Western governments long ago figured this out.

It keeps the economy moving while the demographics would normally dictate stagnate or declining spending as people start to save for their retirements.

This “pension” construct liberates that spending power into the economy.

#101 Hillbilly on 06.17.14 at 3:30 am

gladiator – comment # 41

Judges of the Superior court circuit in Alberta have scheduled a total of 12 hours of court time per week.
Of course, they have to pre-read cases, so another 12 to 20 hours of review.
ALL expenses paid, base pay CAD 198,000, full INDEXED pension, travel allowances, per diems, 6 weeks paid vacation.
Requirement only an LLB (bacculaureate degree in law).

A good family friend is one in Edmonton district.
Always grinning, he says can’t beat the lifestyle for lack of work stress.

#102 Hillbilly on 06.17.14 at 3:36 am

Paul – comment # 54

No, they are not all rich.
Some just have access to a lot of credit and are willing to be debt slaves to a house for a very looooonngg time.

#103 Smoking Man on 06.17.14 at 5:33 am

Garth caves under the pressure, changes the pic.

That was a nice pair of jeans shorts… I stared at it for a while…

#104 neo on 06.17.14 at 6:31 am

Like central banks are going to tolerate mayhem. Get a grip. — Garth”

They have “tolerated” mayhem for over 100 years. Credit bubble…bubble pops…deflation…richer get richer…poor get poorer…rinse repeat. The cycles are are only get more and more volatile. Mayhem/volatility creates the most opportunity.

Effectively coordinated central bank monetary and fiscal policy only started after 2008. But nice try. — Garth

#105 Crossbordershopper on 06.17.14 at 7:11 am

why is everyone so judgemental. (sorry about that). He had a great life, cushy job, lived life well and now he is doing the right thing, selling expensive canadian property for an inexpensive one south.
So now he goes south a few months a year, chills, gets some sun, hangs out with his his new buddies, and his costs of booze, gas etc are lower.
He then should not bother with buying a place, what is he going to do fix it up, rent out the basement, he is a judge people. He should stay in Canada for a few months during the summer to see friends etc and rent a nice place.
He can also go to another destination where he can continue to live like a king and queen, which he has become accustomed too. Costa Rica, etc etc. very nice and cheap. come and go as you please no comittment no responsibilities.
You Canadians with your diversified portfolio’s, building equity etc, he is retired, in about 10 years he isnt going to be travelling very much so get it all over now. Who cares if he is financially well off pissing in his diaper and his brain becomes mush.
Most Canadians dont understand, life is to be lived, and enjoyed and then you die. Canadians dont think they will ever die, It looks like his son turned out fine, he can take care of himself, what did you prefer his son gets a couple mill from his dad because he was prudent. His son is pissed off because he has to work and thinks his dad who was a judge should of set him up so he didnt have to work. why doesnt anyone see the obvious. Everyone lives their lives and everyone dies alone.

#106 the jaguar on 06.17.14 at 7:40 am

#100 Hillbilly
Yes, the pension is absolutely the factor in the case of the teachers. Not so much with social workers. I think it has more to do with the personality type that is drawn to that type of work, i.e. people who have their own issues like to dissect or try to fix other people because they have problems themselves. But the point I was making was not with respect to spending their savings, it was about wracking up significant debt in addition to spending their savings.
I would not put judges in this category at all. Most are generally conservative fiscally and stay right off the radar.
All generalizations. Just as one could say airline pilots sometimes carry more debt due to the support and alimony payments they make due to a slightly higher divorce rate. Or many nurses marry police officers.
Call me madcap.

#107 Mr. Frugal on 06.17.14 at 7:57 am

#54 Paul (Toronto) on 06.16.14 at 9:56 pm
I am trying to buy house in Toronto with salary of six figures and I am not able to buy. I feel that everybody is richer than I am. I am just not ready to pay more than ‘right’ price which itself can be questioned. People are just Rich here!

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

Paul,

Do yourself a big favour and read “The Millionaire Next Door”. For the most part, people that drive expensive cars cannot afford them. Someone driving a Ford F-150 is more likely to be rich than a person driving a BMW. The same goes for houses. The people with fancy cars and the big house have a mountain of debt; that’s all. This holds true for people in very high income brackets like lawyers, doctors, company executives, etc.

P.S. I’m also in the six figure range but I would never buy in Toronto. It’s far too expensive for me. I drive a well used Dodge Caravan with duct tape holding the front bumper together.

#108 Grantmi on 06.17.14 at 8:17 am

Mr. Siddall said the Canadian market is “modestly overvalued” but he believes that there will be a soft landing, meaning a gradual petering out as opposed to any crash in prices.

From the G&M piece on CMHC

This is the guy who runs the CMHC…??? “modestly overvalued!!!”

Are u kidding me? (we’re facked!)

#109 Vangrrl on 06.17.14 at 8:54 am

Yay Vancouver School Board!
Real estate agents were concerned about the policy negatively affecting the value of property on the west side?!

http://www.cbc.ca/news/canada/british-columbia/transgender-policy-adopted-by-vancouver-school-board-1.2676879

#110 Woke To The Sounds Of Horking on 06.17.14 at 9:11 am

Been reading this so-called pathetic blog for six months now. I know that some of you dissed my last post, where I declared that Canada REALLY is different compared to the rest of the world, financially speaking.

You can go on and on, all you want, about how housing will ‘correct’ in Canada; truth is, it won’t. Even Garth–as brilliant as his creative writing is–can write reams declaring that what goes up must come down, but he’s wasting keystrokes on predictions that just won’t materialise. Not in Canada.

Won’t happen in Canada. Again–Canada REALLY is different.

Everyone on this blog who disses what’s happening in Canada and who predicts a correction is ignoring two facts:
1) Cargo ships chock full of Asian money flowing into the major cities of Canada–specifically Vancouver.
2) Cheap-as-borsht interest rates for the natives. No signs of slowing down, not in the lifetime of Gen X.

We’re into a new paradigm. Get used to it. The above mentioned two facts show no signs of abating.

The fed gov’t daresn’t adjust the low interest rate–lest igniting the collapse of Canadian society.

And the Asian money thing? Trust me; I’ve been living in Asia for years. Many cities are total shit-holes–hopeless. People would practically volunteer their left nuts just to board a skiff across the Pacific to the New Promised Land, whose name is Canada, where even working at Tim’s for $8 hr beats the crap out of dodging literal bullets and chomping down on chucked-out coconut husks for daily subsistence.

Plus–there is an added bonus of living in Canada: you’re probably not going to get hacked to death by machete in anytime soon.

#111 rosie "moving forward" in the knowledge that, "this won't end well" on 06.17.14 at 9:15 am

#75 Shawn Wallace.

There is nothing the government can do. It’s too late.

http://www.bloomberg.com/news/2014-06-17/consumer-prices-in-u-s-increase-by-most-in-more-than-a-year.html

#112 Bubblicious on 06.17.14 at 9:15 am

I think Nathan’s parent should have a sit down with the jar lady.

#113 Old Man on 06.17.14 at 9:16 am

#98 devore – you obviously don’t know jack about the religious doctrine of Sharia Law, and btw am riding the experimental browser called SeaMonkey which would be too complicated for you.

#114 Rational Optimist on 06.17.14 at 9:35 am

107 Mr. Frugal on 06.17.14 at 7:57 am

“For the most part, people that drive expensive cars cannot afford them. Someone driving a Ford F-150 is more likely to be rich than a person driving a BMW.”

Mr. Frugal, great book recommendation. I’m not quibbling that a BMW is more expensive than an F-150, but an F-150 is not necessarily reasonable. A lot of these guys driving the newer ones have paid $50,000 or more for crew cab extended whatever. Not to mention the fuel you’re burning to haul nothing.

A Dodge Caravan, now that is a millionaire’s vehicle for sure. Especially if it’s got structural duct tape.

#115 RVP on 06.17.14 at 9:53 am

@ RainCity #99: “I would love to hear your opinion on the crazies who think supporting transgendered kids in Point Grey will affect property values.”

This blog isn’t going to talk about that because that would mean admitting to the existence of HAM. We have school trustees saying we can’t enact a policy that protects trans students because that could interrupt the flow of foreign money into Vancouver real estate and it could also reduce the number of international students coming into Vancouver’s public K-12 education system. This is what happens when you sell your province out to foreign money–public policy becomes beholden to it. The whole story is way too Vancouver for this blog. People in the rest of Canada won’t be able to understand. They can’t even admit HAM exists let alone discuss the political implications of HAM on other areas, like schools and rights of transgendered people.

#116 Rob Ford In Rehab on 06.17.14 at 10:16 am

Yesssirrreeee folks!

I am comin’ back, on June 30 :)

1 p.m.

Why work more of a full day than I ever did before? ;)

#117 broadway skytrain on 06.17.14 at 10:16 am

A Dodge Caravan, now that is a millionaire’s vehicle for sure. Especially if it’s got structural duct tape.
———————————————————
does cosmetic duct tape count? what about a mirror attached with construction adhesive?

we drive two useful, reliable, sensible chevrolets, purchased for around 3k each, with closer to 2m in equity.

my parents drive a lexus and a newer mazda,, and have a net worth of around zero.

#118 Hillbilly on 06.17.14 at 10:23 am

Grantmi – comment # 108

Think about it.

What do you expect the guy to say – “.. yeah OECD and IMF and the Economist are right – we are way overvalued…” and cause a crash?

He’s new on the job and has not even officially met with the Finance minister for God’s sake!

However, I believe he was put in place to pull bac the reins substantially on CMHC and his comments foreshadow this.

I hate saying this more than you hate hearing it bud, … patience.

#119 Doug in London on 06.17.14 at 10:33 am

I still don’t understand how someone who’s intelligent enough to get through law school (quite an accomplishment in itself) then become a judge could be so foolish about financial matters. If they plan to spend half the year in Arizona, why would they want the extra work of owning 2 houses? If they absolutely MUST buy a house, why stop at the suburbs? There must be places in BC where they could scoop up a good place for 200 grand.

@Habs76-79, post #32:
You’re quite right, living within your means IS NOT deprivation, but rather a life of less stress and worry. I sleep just fine at night, totally debt free and with a portfolio of investments.

#120 Hillbilly on 06.17.14 at 10:33 am

The Jaguar – comment # 106

Ok, your’re madcap.
All joking aside, notice the % of folks at retirement age who have mortgage debt going into retirement. It has exploded in the past 10 years or so.

I believe it is about 29 % (last data I saw for Canada) so I presume that some of these are civil servants with robust pensions as they continue to service the debt from that funds flow.

So accumulating debt is not that big an issue for them as they have that pension money to help them service it.

#121 Toronto_CA on 06.17.14 at 10:38 am

#110 Woke To The Sounds Of Horking on 06.17.14 at 9:11 am

Sorry so these same people who are feasting on discarded coconut husks, dodging bullets and machete swipes are the same ones coming to Canada with “cargo ships full of money”?

Garth, where do these posters come from? Must be the same gene pool spawn that insists on equating Toronto to Manhattan.

#122 Doug in London on 06.17.14 at 10:43 am

@Mister Obvious, post #37:
That’s a good informative post about introverts and extroverts, sums it up quite well. I’ve heard from different sources that on average introverts make less income than extroverts, but because they aren’t throwing money around chasing status and making a spectacle of themselves, they don’t need as much money.

#123 Hillbilly on 06.17.14 at 10:45 am

broadway skytrain – comment # 117

funny story, related to your post

I was by my brother’s office one day and he was just seeing a client off.

As we entered his office he quips “I guess I should have gone into business instead of becoming a professional”.

I said “Why?”

He says “that guy that just left here came to pick up a cheque for a little over $ 24 million as he just closed on selling a division of his private company to some Americans” and points out the window to the parking lot of his building.

I said ” oh, the guy with Bentley?”

He says “No, that red thing over there!” as he points to a mid-nineties rusted red Dodge Caravan, complete with a duct taped rear tail light, burning oil as it started up.

We both laughed hard.

Absolutely true story, so I was laughing when I read your post.
Thanks, needed that today!

#124 yo on 06.17.14 at 10:49 am

This example is very common. I think because a: that generation for the first time in their lives never experienced interest rates so low, and b: their main asset (property) went up far more they could imagine and c: it is far too easy to get approval for credit lines. Case in point, my parents: they own a $1M house in North york and three rental properties in downtown Toronto, prob worth another $1M each. But with all the debt that has been accumulated on them my dad had problems coming up with $20K paying for something that popped up. Allot of people are living like this.

#125 Ralph Cramdown on 06.17.14 at 11:02 am

#110 Woke To The Sounds Of Horking — “Everyone […] who predicts a correction is ignoring two facts:
1) Cargo ships chock full of Asian money flowing into the major cities of Canada–specifically Vancouver.
2) Cheap-as-borsht interest rates for the natives. No signs of slowing down, not in the lifetime of Gen X.”

I find this fascinating.

To fact one: I think it’s an issue (more than Garth does). I don’t know how much is real, and how much is a result of a Bandwagon effect from Canadians who think it’s real and bigger than it actually is, but that doesn’t really matter. The point is some people want to get their money out of a country growing at 7.5% and into one growing at 2%, into an asset class that produces a low current yield. In normal times, that doesn’t make much sense, so it will stop (and even reverse) if they think times are becoming more ‘normal.’ This could be from a change in fears of assets being confiscated at home, or it could come from an opening of Chinese ‘A’ share investment to foreigners (offshore trusts controlled by domestic Chinese investors), or better perceived opportunities elsewhere than West Coast housing.

Any of those things could effectively cause a reverse of this:
http://en.wikipedia.org/wiki/1997_Asian_financial_crisis
Note especially the difference between increased capital investment and total factor productivity improvement, among other gems. Can you say “Cold Asian Money?”

To point two: This is CLASSIC pre-Minsky moment thinking. “X and Y are relatively stable. If I invest cash based on this, there isn’t much of a return. If I lever up, I’ll make more, and since they’re stable, it’s safe.” If one person does this and he’s right, he’ll make money. But if everybody does it, they’ll all be wrong. Canadians in houses at 4x income are 33% more levered than in a 3x house — in terms of their lifetime human capital — even if their mortgage is paid off. Your reasoning is just a smaller, less sophisticated version of the reasoning that blew up LTCM.
http://en.wikipedia.org/wiki/Long-Term_Capital_Management
That was way back in 1998, and look how tiny the bailout looks (because they were deemed too big to fail) in terms of more recent recapitalizations.

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

Good luck.

#126 WhiteKat on 06.17.14 at 11:03 am

@RationalOptimist re: #114

Hey, quit dissing Dodge Caravans. I love mine…paid a freakin fortune for the darn thing…has all the bells and whistles, except for that feature that helps you not to back up into things. I really could have used that. A few months after purchasing it, and still in that ‘OMG is that a scratch’ mindset, I was in small gas station, and did not notice two huge concrete blocks piled on top of each other backwards (so that the wide part of each block met two feet off the ground directly in line with my back bumper…sigh).

I wasn’t going to fix it, as it was just a long scratch, but a few weeks later, my better half who is not so worried about where or what he parks next to, squished himself into a small parking spot, and came back to discover someone had sideswiped one back corner of the van on their way out.

1K later, its all pretty again.

#127 Ralph Cramdown on 06.17.14 at 11:06 am

#117 broadway skytrain — “we drive two useful, reliable, sensible chevrolets, purchased for around 3k each, with closer to 2m in equity.”

CLASSIC West Coast asset bubble. There’s no way those Chevys would be worth $2 million in normal times. I blame the Fed.

#128 miketheengineer on 06.17.14 at 11:21 am

Garth et al:

This is interesting:

largest NatGas Pipeline in Europe which supplies Germany, France, Italy, Austria, Chek Republic and Hungary just exploded

Here is the link:

http://www.kyivpost.com/content/ukraine/explosion-on-urengoi-pomary-uzhgorod-gas-pipeline-in-ukraines-poltava-region-352249.html

Can’t wait to see what the price of gas is tomorrow.

Mike

#129 Holy Crap Wheres The Tylenol on 06.17.14 at 11:48 am

#29 Smoking Man on 06.16.14 at 8:17 pm
The is cancer in this world.. Barbarians… Hard to watch the news…
Fantasy about 40 virgins is all it takes…
Is it brain washing or diminished IQs
Time for some radiation therapy…

______________________________________________
I think its 72 virgins Smoking Man, and this is the way the world was thousands of years ago and will most likley be for thousands more unless we nuke ourselves.
Now thats radiation therapy.

#130 Holy Crap Wheres The Tylenol on 06.17.14 at 11:51 am

#123 Hillbilly on 06.17.14 at 10:45 am
broadway skytrain – comment # 117
funny story, related to your post
I was by my brother’s office one day and he was just seeing a client off.
As we entered his office he quips “I guess I should have gone into business instead of becoming a professional”.
I said “Why?”
He says “that guy that just left here came to pick up a cheque for a little over $ 24 million as he just closed on selling a division of his private company to some Americans” and points out the window to the parking lot of his building.
I said ” oh, the guy with Bentley?”
He says “No, that red thing over there!” as he points to a mid-nineties rusted red Dodge Caravan, complete with a duct taped rear tail light, burning oil as it started up.
We both laughed hard.
Absolutely true story, so I was laughing when I read your post.
Thanks, needed that today!
_____________________________________________
Thats the way to do it, stay under the radar with your wealth otherwise who knwos what will crawl out of the woodwork to sponge from you. I drive a basic Ford SUV three years old, could I afford a Bentley yep, but why its a car and not an investment.

#131 Godth on 06.17.14 at 12:53 pm

#129 Holy Crap Wheres The Tylenol

Precessional movement of the Earth – the Earth rotates (white arrows) once a day …. moved across the sky at the specific rate of about one degree per 72 years.
http://en.wikipedia.org/wiki/Axial_precession

72 names of god…blah, blah.
I don’t think it’s worth blowing up over.

#132 Rational Optimist on 06.17.14 at 1:04 pm

126 WhiteKat on 06.17.14 at 11:03 am

You misinterpreted the post. My intent wasn’t to “diss” Caravans. I said that was a very sensible choice on the part of Mr. Frugal.

However, I guess it’s true that they’re less of a sensible choice when you buy them new with all of the bells and whistles, and pay for expensive mechanic labour every time it needs something cosmetic or non-essential.

Next time you have some time, you ought to read the book that Mr. Frugal recommended.

#133 Weatern Observer on 06.17.14 at 1:10 pm

#105 Crossbordershopper

“His son is pissed off because he has to work and thinks his dad who was a judge should of set him up so he didnt have to work. why doesnt anyone see the obvious. Everyone lives their lives and everyone dies alone.”

You hit the nail on the head about the Son.

The last sentence is very true.

#134 Exurban on 06.17.14 at 1:26 pm

#114 Rational Optimist: the 1980s book The Millionaire Next Door by Tom Stanley described a survey of American millionaires that found their most popular vehicle was the Ford F-150 pickup truck, although I believe it was the choice of only 9%.

#115 RVP: You’ve got it. Once somebody’s gone into prostitution other career options become limited. And, Torontonians just do not understand anything past Hamilton. That really is one of the constants of Canada.

#135 tkid on 06.17.14 at 1:28 pm

“His son is pissed off because he has to work and thinks his dad who was a judge should of set him up so he didnt have to work. why doesnt anyone see the obvious. Everyone lives their lives and everyone dies alone.”

You hit the nail on the head about the Son.

Uh, no. Judge and wife bring in over $7200 a month AFTER TAXES and they spend MORE THAN THAT every month. I sure hope that pension the judge has will survive him or his wife will have NOTHING to live off. And she’ll probably have a ton of debts to boot.

They could rent a nice place in Van for $2000, still live pretty good, and sock some money away for her for when he’s gone. Instead they’ll increase their debt load, leave nothing for her to live off of when she’s most vulnerable and least able to work.

This is not about the son, this about the mother living only off of cpp and oas when she should have some savings squirrelled away.

#136 Shawn on 06.17.14 at 1:42 pm

CMHC Insurance limits

Imagine if CMHC only insured the first 30% of the loss on a mortage.

Now there would be very little risk left after that. But there would be some risk that losses could be grater than 30%.

And Imagine if the banks wanted to insurre that as well. (ANd bank regulators might insist upon it)

They could go to private insurers for that.

Berkshire Hathaway would provide the insurance if the price was right. Not every insurance company would be in a position to take on this remote but potentially huge risk.

Home buyers would have to pay for this, directly or indirectly.

Same analysis applies if there is a CMHC deductible, banks could get insurance for the deductible from Berkshire Hathway.

#137 };-) aka Devil's Advocate on 06.17.14 at 2:16 pm

#104 neo on 06.17.14 at 6:31 am
Like central banks are going to tolerate mayhem. Get a grip. — Garth”

They have “tolerated” mayhem for over 100 years. Credit bubble…bubble pops…deflation…richer get richer…poor get poorer…rinse repeat. The cycles are are only get more and more volatile. Mayhem/volatility creates the most opportunity.

Effectively coordinated central bank monetary and fiscal policy only started after 2008. But nice try. — Garth

Bullcrap. While not then nor now effectively coordinated, monteary and fiscal policy have been around for decades. They are the tools with which our puppet governments “try” to manipulate the economy to the benefit, whim and fancy of the REAL power brokers. Too often administering too much or to little of either to effectively manage the economy for its true constituents.

Again, wouldn’t we all agree that it was a gross economic policy malpractice that facilitated the financial crisis of 2008?

The competitive nature of our current economic paradigm breeds corruption in all levels of society none the least of which is higher levels of government. It’s the Golden Rule. It’s not wrong. It’s the way THIS economy works.

I can accept that. What I can’t accept is people trying to convince us otherwise. Bullcrap.

Whether you like the economic structure or not is moot. My statement was that central banks have effectively coordinated fiscal and monetary policy since 2008. Prior to that there was far more emphasis on national economic objectives, often exacerbating international disruption. Try not to be a know-it-all. Just embarrassing. — Garth

#138 Pope Nosty666moVlad the JigglySnugglebombed on 06.17.14 at 2:32 pm

#43 Old Man on 06.16.14 at 9:18 pm — “ISIS is a code word and affiliated with al-Qaeda (C.I.A.).”

It appears you are right. The CIA-Mossad pairing generally cause the most trouble thruout the world. Syria’s (then Iran’s) public not-for-profit central banks are what TPTB want, and will stop at nothing to get them. Hence, Iraq provides a platform from where to start, leading to Iran then Syria. It plays into Israel’s hands, as the CIA-Mossad duo continue to destabilize the MEast.

#128 miketheengineer on 06.17.14 at 11:21 am — Good link, and these are the unknowns which can send bonds and stocks to either heaven or hell. Further it leads markets on different paths, such as Negative Int. Rates could lead to higher oil and food prices.

#139 Dual Citizen In Canada on 06.17.14 at 2:53 pm

In other words, his dad gave him a life sentence.

#140 Luigi lickadabricka on 06.17.14 at 2:57 pm

Italian builders at Bathurst and major Mackenzie sold out of 41′ and 50′ product, 200 homes these past few weekends faster than you can say ” when is the bubble going to burst”. 1.3 million and up !

Predominant buyers were Russian according to my insiders.

So far so good as the RE bubble hits Mach 15 with no crash remotely in site

#141 Old Man on 06.17.14 at 3:28 pm

The media is misleading the public by using misnomers as troops mean guards and special forces mean advisors. The US embassy is the largest in the world; some left but many stayed and might be as many as 5000 there. The 275 guards are there to protect the one’s left behind, and the 100 advisors might come to assist with strategy. All are non-combat and they take orders from the Ambassador at the embassy only. This is not to say that things can change over time.

#142 bosco on 06.17.14 at 3:53 pm

House prices might be going up….but so is everything…and well….you can’t eat your house…quite the opposite…it’s eating you.

http://www.cnsnews.com/news/article/ali-meyer/price-index-meats-poultry-fish-eggs-rockets-all-time-high

I keep hearing crazy people yelling about food and gas prices exploding…..bursting out in the grocery isles…as if the nutzo facto has been ramped to 10. The other thing I notice in Vancouver is the number of car crazy incidents….the newest trend in horn honking and the road rage is a symptom of weird things to come.

#143 Holy Crap Wheres The Tylenol on 06.17.14 at 3:56 pm

#131 Godth on 06.17.14 at 12:53 pm
#129 Holy Crap Wheres The Tylenol
Precessional movement of the Earth – the Earth rotates (white arrows) once a day …. moved across the sky at the specific rate of about one degree per 72 years.
http://en.wikipedia.org/wiki/Axial_precession
72 names of god…blah, blah.
I don’t think it’s worth blowing up over.
____________________________________________

Your right, I’m not blowing up again. Not even for 72 virgins. Perhaps for a tiny waffle?
http://www.youtube.com/watch?v=rXH_12QWWg8

#144 Doug in London on 06.17.14 at 4:12 pm

@yo, post #124:
Why don’t they sell the rental properties and pocket a kings ransom of money? They won the lottery, and the Ontario Lottery and Gaming Corporation are going absolutely crazy trying to locate them so they can cash in the winning ticket!

#145 WhiteKat on 06.17.14 at 4:59 pm

@RationalOptimist, re: #132

I am actually more frugal than not, and normally am of the opinion that buying vehicles a couple years old makes more sense than buying new. However when my spouse and I were actively searching for a vehicle for our family of 5 plus 1 dog and 3 cats, we could not find anything a few years old, priced significantly enough less than brand new, that didn’t already have what seemed like a lot of kilometers, and ‘iffy’ maintenance records.

Also, my spouse had a business connection with the dealer, who gave us a good deal. At least I think he did, as you never can tell with these types, but we did bluff and walk out the door, only to have him call us later that night with an even lower price.

Yeah, spending 1k to fix the bumper was a bummer, but the car was only a few months old, and I couldn’t stand to see her like that. Hey even, ‘Mrs Frugal’, has her moments of weakness.

#146 ozy - GET USED to IT on 06.17.14 at 5:10 pm

GET USED to IT – a single detached in 416 area (good area only – obviously) – it’s A LUXURY. It’s a social-class privilege and is not for everyone. Stop dreaming prices will ever drop significantly there. Better assume another 30% in 3 years. All the socialists believe in ENTITLEMENT – and wonder why the GOVT. did not give them a nice house for free. Well, be thankful they gave you a job, with that – everyone in lower social classes can afford a house in 905 area or beyond. of course, the 905 it’s a major risk, too many lower/average income areas and way too many houses… what? you did not expect the 1% to shoulder the risk, did you? Welcome to the new global-colonialism…

#147 };-) aka Devil's Advocate on 06.17.14 at 5:43 pm

Whether you like the economic structure or not is moot. My statement was that central banks have effectively coordinated fiscal and monetary policy since 2008. Prior to that there was far more emphasis on national economic objectives, often exacerbating international disruption. Try not to be a know-it-all. Just embarrassing. — Garth

AWESOME! So then we can expect our governments to better manage our economies such that we will have no repeat of the likes of 2008 then. And if that is the case then why do you continue to preach doom and gloom for some markets as surely our governments, who have apparently at last mastered the art of fiscal and monetary policy, will protect us from such failures.

I agree; whether I like the economic structure or not is moot. There is NOTHING I can do about it either way. I accept that and have learned to work within that structure. My underlying predominant message and intent posting on this blog of yours is that more should do the same. You can’t do anything about it so learn to deal with it.

None of us can forecast the future with pinpoint precision. At best we can anticipate those inevitable SHIFTS I keep referring to and try to stay in the “safe zone” which is neither at the peak nor the bottom of the cycles. It’s all real simple.

Our main business is not to see what lies dimly at a distance, but to do what lies clearly at hand. – Thomas Carlyle

No I don’t know shit really . But I will tell you one thing I do know Garth: I listened to you before 2008 and I agreed with you then. Before the SHIFT hit the fan, in great part due to your influence, I sold personal revenue properties and got rid of all debt. Many thought I had a crystal ball when a few short months later the markets tanked. Today if I could turn back the hands of time I’d undo it all. Those properties are worth more today than they were when I sold them. I couldn’t afford to buy them back even for what I sold them after having paid capital gains on each. Oh and yes I did invest the money and, I guess judging by your boasts it should have been with you because, that invested money has not kept me where I’d be if I hadn’t sold those properties in the first place. That was a harsh lesson and I am sure will not be my last. So clearly; I don’t know it all.

Find a job where you’re paid by the word. Should work out.– Garth

#148 };-) aka Devil's Advocate on 06.17.14 at 6:00 pm

Find a job where you’re paid by the word. Should work out.– Garth

Good advice from someone who has done so himself.

#149 Snowboid on 06.17.14 at 7:25 pm

Post#147 06.17.14

“…in great part due to your influence, I sold personal revenue properties…”

I believe previous posts in 2009 from the golden god of Kelowna RE clearly indicate the decision to sell investment properties was made by him and his wife (mainly his wife).

Also, they were leaving shortly after: “…We too are planning to leave in the not too distant future…”

“…So we are liquidating our assets in preparation for our move toward being, at best, part time residents of Kelowna…”

“…Blow Kelowna off the map and I think the Valley would be better off being able to start with a clean slate in this part of it…”

“…I believe real estate in Keowna (sic) will have dropped another 15 to 20% more by the end of 2009. I believe that there will be no significant upswing in the markets until at least 2016, give or take a year, at best and more probably 2020ish…” (one correct observation).

But for those new to the musings of the great golden god of RE, Chris put it best back in 2010:

How to be just like the Devil’s Advocate,

1. Begin by writing to Garth about how the world is insane, there is no point to Garth educating people, blabber a lot and basically act like an ass. (1 week ago)

2. Follow it up over the next several days with some rather well structured and well thought out posts, that come as a result of it being pointed out he is once again behaving foolishly.

3. Increase the velocity of these posts.

4. Begin to try and take over the direction of the blog by challenging Garth over his strongly held beliefs.

5. When Garth doesn’t take the bait, get angry.

6. Call people names like…asshole. (Yesterday)

7. Then have Garth respond with “Your arguments were more cogent before you became abusive. — Garth”

8. State that “Truth prevails always and can not be manipulated to say anything other than what it is.”

9. Once kindly reprimanded by Garth, revert to the fetal position with “But Garth, come on now, even in that post of mine you just censured you must have sensed the love bro? You know I respect you. And what would this blog be without a Devil’s Advocate. Come on now were good… right?”

10. Completely try to ignore the fact that your poor behaviour is a regular problem that you claim to be willing to clean up, but never do.

11. Talk about integrity.

12. Ignore the fact that you made a public statement of accountability several months ago that you asked people to hold you to.

13. Break your promises.

14. Look like an hypocrite.

15 Repeat the process over many months.

Follow these 15 steps if you want to become as unstable as the Devil’s Advocate.

P.S. – Remember what DA said – “Truth prevails always and can not be manipulated to say anything other than what it is.”

You will be a man of integrity just like him…and very self aware too!

#150 DM in C on 06.17.14 at 7:29 pm

“Good advice from someone who has done so himself.”

Garth, you’re paid for this blog? Who pays you?

#151 Nemesis on 06.17.14 at 8:18 pm

#@OldMan141. #”It’sALittleMoreComplicatedThanThat.” #JustA’Hunch’.

http://youtu.be/ByLMRUskOYc