Freaking

MIRROR modified

I seem to hear most loudly from two kinds of people on this blog. The Garth-is-an-idiot crowd is always popular, reminding us how much money you’d have made buying a house in 1996, arguing that mortgage rates will never rise and renters smell. Then there’s the we’re-all-going-to-die school, convinced I’m also an idiot for telling people to invest in financial assets, because the world’s a giant Ponzi scheme, markets are rigged and everyone else is sheeple.

In between are most of us. Logically, we know houses cost too much, the economy sucks a bit and not having all your eggs in a single basket is smart. But people still want houses, are lured by cheap debt and overwhelmed by investing. As a result, paralysis.

I’m not actually surprised 80% of TFSA money is in bank accounts or GICs or that almost half the people over 50 figure they’ll run out of money. This situation will get a lot worse once housing’s no longer an out-performing asset, and grows illiquid. As a society, our choices are awful, but very human. We’d rather have a happy spouse now than fret over security later.

In truth, life’s not that easy for most working people – especially those who eschew gobs of debt. If you make a middle-class income and try to live within your means, you get Marcel. He wrote me on the eve of the Canada Day weekend, and I’ve decided to share this with you. Here’s a guy who dwells in a place where houses cost less than garages in Yaletown or Leslieville. And he’s scared.

Read it. Then tell me how you would answer the question.

I have been a long time reader of yours…getting advice back when newspapers were all the rage. I am now freaking out.  I am 39, have a university degree, a job in information technology, but I have been unable to get ahead.  Every year seems to be worse than the last.  My wife and I make about 115K per year, but have not had a pay raise in years.  Meanwhile the taxes we pay in New Brunswick (gasp) have increased, the amount we have to contribute to our pensions has increased, and the cost of everything has increased.

We live in a small 2 bedroom house, with a mortgage of about 100K remaining, with a monthly mortgage including property taxes of $850.  My life insurance agent told me that we were doing it right when he came to our house one night.  I asked him what he meant, and he replied “you are actually going to pay off your mortgage before you retire.”

I feel like my situation is better than most, but I also feel like I am falling behind.  I don’t understand why everyone around me seems to be living in a house that is 3X the size, driving an SUV, taking trips south, etc., etc., etc.  According to the stats, our household income is at the top of the scale for New Brunswick, almost twice the median income.  So, if we make twice the median, and our home is less than the average for the province, how are other people doing it?

I have a government pension, which has been converted to a shared risk from defined benefit, and I am worried.  In fact, I am worried sick.  All around me are signs of imminent collapse.  I see subdivisions with dozens of houses for sale that sit there month after month.  Our population is aging at an alarming rate, and the ones who are not aging are actually leaving because there is nothing for them to do.

But while houses are languishing on the market, even more are being built.  Isn’t New Brunswick a leading indicator of what the rest of the country faces?  We have an aging population, with a resource based economy, that is going nowhere?  I have heard musings that Ottawa likely has a plan in place for what to do once New Brunswick goes bankrupt, and I would not be surprised if it happens in the next 5 to 10 years.

So here I am, someone who lives in a province where you can get a house for 150K that is quite nice, earns twice the median income, has a government pension, and is freaking out.  Why aren’t other people freaking out?

197 comments ↓

#1 calgaryPhantom on 06.27.14 at 5:18 pm

He said he has been reading your blog for years.

That is his problem, see Garth, what happens when your pathetic blog is read for a longer period of time?

You have money but always scared.

( LOL )

#2 shawnG on 06.27.14 at 5:20 pm

what can I say? Ignorance is a bliss… until retirement time.
Congrads Marcel. You are doing alright.

#3 Shawn on 06.27.14 at 5:23 pm

There’s Three Kinds of People on The Blog?

I seem to hear most loudly from two kinds of people on this blog. The Garth-is-an-idiot crowd is always popular…. Then there’s the we’re-all-going-to-die school… In between are most of us.

*******************************************
And let’s not forget about the smaller I-know-it-all crowd. THOSE people are REALLY annoying are they not?

#4 Not an economist on 06.27.14 at 5:28 pm

Early post today, Garth? Trying to duck out early for the weekend? Hehe.

Happy Canada Day!

#5 Shawn on 06.27.14 at 5:30 pm

Aging at an Alarming Rate

Marcel says:

Our population is aging at an alarming rate

**************************************
I resemble that remark and it is indeed alarming!

But seriously, I saw a stats Can chart a few years ago whereby the median or average age of a Canadian was rising by almost a year every two years. That is rapid aging.

It’s also an interesting statictics lesson. Each of us as individual Canadians tend to age one year per year… unless we die.

On average we as a population age six months per year or thereabouts on average and yet not a single one of use ages at that rate, though we might like to.

Shows you how silly it can be to assume that average always means typical. Typical can be FAR from average and far from median in some cases.

#6 Joe Anderson on 06.27.14 at 5:32 pm

First of all, it isn’t always helpful to compare your life to others who seem to be farther ahead. Better to look at what is going well in your life and being grateful for it. That said, to answer your question, you are freaking out because you are honest and realistic. The people who are seemingly happy and living large either don’t understand the risks they are taking (the unrealistic ones) or they are going deep into debt that they have no intention of paying back if things go sideways like losing a job or suffering investment losses (the dishonest ones). The unrealistic people assume they will have large income gains or house appreciation in later years even if there is no rational basis for that belief. The dishonest ones won’t admit they are dishonest, but they will walk away from their obligations and declare bankruptcy in a heartbeat if it suits them. Don’t believe that? Look at all the people who had subprime mortgages in SoCal, Las Vegas, or Arizona in 2006 and look at what they did when housing crashed. Society will end up holding the bag, but they will have had quite the party. Sorry, that probably doesn’t make you feel better, I know.

#7 Debtfree on 06.27.14 at 5:32 pm

Dear freaked out . Don’t forget that the birth rate in North America is falling like a stone .

#8 J-Edmonton on 06.27.14 at 5:39 pm

Interesting anecdote. I can’t even imagine how bad New Brunswick is compared to where I’m situated in Edmonton. Everyone thinks Alberta is the bastion of high income and readily availabe jobs (to an extent it is), but I’ve noticed a slow here recently too. There have been few job postings lately, even in hotbed areas like Fort Mac. And what jobs are offered are snatched up by over educated, over qualified persons from other provinces. I think the labour market has finally caught up to the demand here, as people migrate to Alberta for the only jobs being offered up anywhere in Canada. Globe and Mail states that 9 out of 10 jobs created in the past year have been in Alberta. Talk about skewed. And Unstable.

http://www.theglobeandmail.com/report-on-business/economy/jobs/canada-sheds-7000-jobs-unemployment-stuck-at-7-per-cent/article17366654/

Oil might be the only thing propping up Canada’s economy right now. If (when) oil slows down I think things might go south pretty quickly for the whole country. I don’t see the new pipeline really helping too much in the near future, and with our neighbors to the south fracking everything in sight, demand for our oil is in decline. Could be that this is what sets things off.

But maybe then I can buy a house. And get out of Mom’s basement.

#9 Speaking of wich on 06.27.14 at 5:54 pm

A well known expert in stocks and stuff was saying that 8% is the average that you can expect from the stock market

JP Morgan is saying 4%-6%

J.P. Morgan Funds: Dr. Kelly expects the stock market to have 4% – 6% total returns per year, over next 5 years on.barrons.com/1qg32z5
pic.twitter.com/tmtN0Uey0z

Not sure who we should believe but 4% sucks considering that inflation is knocking the door these day

So ..waht is your point Garth?

#10 NetCentric on 06.27.14 at 5:59 pm

I have to say I feel a lot of empathy with Marcel. I started out as a natural history buff in my childhood (a bona fide member of the Victoria Natural History Society who learned at the knee of Freeman King) then developed an interest in other sciences (Farley Mowat gave way to Arthur C. Clarke) and finally finance and economics (John Kenneth Galbraith was a wonderful teacher but then so was Milton Friedman). My earlier interests taught me to look at the long term numbers, the numbers that matter over decades: overfishing, fresh water supplies, demographics, that sort of thing.

The long term numbers with regards to natural resources were bad enough but when I got to learning about economics and finance and saw what a house of cards it was I have never been the same since. It now seems to me we live in some kind of fantasy world where SOMEHOW it will all just go on with our population growth and GDP growth etc. as if there are no limits to growth and exponential math somehow will not apply in our case. I understand all too well how human nature accounts for this, we simply are not designed for the ecological niche we find ourselves in, but I still find it hard to accept as every day reality.

At age sixty, I console myself by looking out over Victoria’s harbor from my top floor corner suite and saying to myself, there must have been many such days in Rome, Luxor and Byzantium, in the last days of the empire. Today is a lovely day and the city a jewel in the crown.

I have lived through one of the greatest periods of prosperity in human history but my advice to Marcel is not to ignore the cognitive dissonance he feels but instead to prepare himself and his family for a very different future.

#11 earthbound misfit on 06.27.14 at 6:03 pm

Marcel, mon ami, you are well along the road to having it made. Chill bro. Accelerate your mortgage payments, get rid oft that puppy by 45. Resist the urge on vehicle(s). Drive it/them into the ground. 10-12 years. Contribute all you can to your company pension. Try and max your RRSPs and TFSA with low cost ETFs. Enjoy your lady, breed a couple of little ones …. enjoy your life.
And for God’s sake don’t move to Ontario. We’re absolutely f***** here.

#12 Mr. Zipper on 06.27.14 at 6:04 pm

Garth…you’re an idiot…….condo prices need to go up….not down say the experts….you’ve failed us again.

http://www.bnn.ca/News/2014/6/26/An-urban-planner-warns-Beware-of-the-too-cheap-Toronto-condo-.aspx

#13 kommykim on 06.27.14 at 6:08 pm

The guy from New Brunswick is doing it right. He is stressing out and worrying alot which will reduce his life span and therefore he will die before he runs out of money.

#14 Basil Fawlty on 06.27.14 at 6:13 pm

I believe the stock market is overvalued due to the unprecedented money printing by central banks, however it may not be life threatening.

#15 KWkid on 06.27.14 at 6:18 pm

Most people pay no mind to tomorrow, they can only think about what they want now. The YOLO fad fuels excessive debt binges.

#16 Smoking Man on 06.27.14 at 6:26 pm

Category, hum… I don’t fit in any of the above described.

Let me load up on some booze… I’ll get back to you all.

Smoking Man, broadcasting live from Atlantic City, NJ

#17 cash hater on 06.27.14 at 6:40 pm

Don’t be scared my boy.
You’re 39 now and in a bit you’ll be 59 than 69 and caboom, you’re DEAD.
Show’s is over.

#18 Essie on 06.27.14 at 6:40 pm

Its totally acceptable to be freaking out. I’m quasi-freaking out also.
I’m in a pretty good spot, but I feel I can only plan properly if I keep doing what I’m doing.

I’m 41. Own a mortgage free house in Toronto. No kids. Including the company match, I contribute 3300 a month to the nest-egg, which sees appropriate growth. I earn just over 100. Sounds pretty good.

But I realize that without a company pension, I will need to have a crazy pile of money at the end of the ride. Age 65 to 85 is twenty years. Perhaps retirement will be 25 years.
Health care costs and assisted living scares the $&^@ out of me. People can burn through a million bucks in a decade if they become old enough. I’ve seen it.
Just to live comfortably for 20 or 25 years, I think I need a retirement fund of a paid-for house, plus 2M. That’s what a pension which “pays till you die” is worth if you live long enough.

So despite being in a good spot today – I have more than 1.8M to invest and grow over 20 odd years to get to that 2M mark.
I’ll get there if I keep doing what I’m doing, which is contributing 3300 a month, and seeing growth. But I know that I’m an exception.
I have no idea how lower wage earners or those with multiple kids do it. The reality is, they don’t. And live a retirement in poverty. And use the wisdom they accumulate with age to maintain poise during their senior years, saying proudly “I don’t need much”. There is the image of the senior who sits on the sofa and watches the tv etc and doesn’t do all that much. That’s rooted in the fact that they’re poor in retiremement! Not because they have nothing to do. Its often because they can’t afford to!

#19 Michael on 06.27.14 at 6:41 pm

Marcel, other people aren’t freaking out because:

1. The Finance Minister tells them there isn’t a problem, but they are watching closely and will take necessary action if a problem ever appears.

2. The media (which gets big $$ from the RE industry) says there isn’t a problem and that the Canadian financial system is the envy of the world.

3. Most people are under the impression that the US housing bust was a uniquely American problem and we don’t those same irresponsible lending practices. (Of course, this is a false impression)

BTW, I’ll bet your CEO’s pay and your company’s profits have gone up a lot more than your salary and benefits have recently.

#20 not 1st on 06.27.14 at 6:41 pm

“…because the world’s a giant Ponzi scheme, markets are rigged and everyone else is sheeple”

Yeah Garth did you happen to notice that one of the major market indices was driven higher today by a camera you wear on your head?

#21 Hillbilly on 06.27.14 at 6:42 pm

Marcel, you live in an age of and surrounded by fools.
Do not be one of them and listen to your instincts for they are right.

#22 devore on 06.27.14 at 6:46 pm

#5 Shawn

No person is average, no house is benchmark, no couple is typical, and no household is reflected in the CPI basket of goods.

And yet, far from being silly, these are all incredibly useful (and accurate) statistics that can be used to predict any number of things.

#23 I agree on 06.27.14 at 6:48 pm

You’re not alone, Marcel. I wholeheartedly agree and I wonder myself what others are thinking.

I think we find ourselves surrounded by people going deeper and deeper into debt just to maintain their lavish (and sometimes, as you note of yourself, not even lavish) lifestyles. I chalk it up to broad financial illiteracy. However, I suspect the day of reckoning approaches.

#24 devore on 06.27.14 at 6:50 pm

#6 Joe Anderson

Ignorance is bliss. With knowledge, comes the responsibility of taking precautions and making preparations. If you recognize your retirement will not be a government sponsored golf vacation, you burden yourself with the need to save money for your non-productive years, instead of blowing it on toys and $300 jeans. It would take a very special kind of person to just stick your head in the sand.

#25 Yogi Bear on 06.27.14 at 6:53 pm

If you are eating cat food and you are borderline homeless, I will entertain your pity party. Until you reach that point, man up.

#26 Habs76-79 on 06.27.14 at 7:03 pm

First off to Marcel, looking at others’ lives around you without knowing all the details of their lives in reference to yours is not a wise thing to do. Many a person today lives an illusion. An illusion that David Copperfield would be hard pressed at pulling off.

One can look well off, credit today is given to most anyone with a warm body temp. Hell, I’ve now seen credit lenders who now advertise that you can get something like credit from $1,500 to $40,000 by using your car as collateral. It’s not bad enough that most every commercial break on radio and t.v. runs either Capital Direct or Alpine Credit commercials saying one can borrow $30,000- $40,000-$400,000 (they use to say up to $300,000 but now bumped it up to $400,000) by using their home as collateral. But to now see ads saying you can use your fastly depreciating car to secure loans of up to $40,000. MY GOD!

So Marcel don’t bother to look at how others around you are living. Oh some were and are smart and achieved such by being prudent with money and careful with debt, maybe beginning many years ago. But, IMO most under 40 somethings are likely NOT doing it that way but are RACKING UP DEBT TO OBSCENE LEVELS!

Look, I’m not saying I’ve always been smart with money, investing and debts. I’d be a liar to say that I have. But critical thinking and time with experience both good and bad has allowed me to see through much more of this BULL FLOP! today.

If I may? In life we all have obligations. We need to provide for ourselves and families. There is little in escaping such. BUT! once you figure out the essential necessities of life, living and such obligations, all after such are choices and all choices have consequences.

Having cash in hand equals freedoms. Enough cash to be able to fund daily living and cash to properly invest for the long term helps keep you at a level of freedoms.

Acquired debt is exchanging the ability to spend such debt for freedoms. Every dollar you spend via debt is another obligation you have and that equals much less freedom.

I’m not saying to never use credit. But a wiser person better learns when and where to use credit. Credit for a necessity may be a fair exchange. Credit to fund a business venture may be acceptable given you doing all the footwork and brainwork to better see if said business venture is worthy of such use of credit. Credit to buy things that are not necessities but are from your wants, may not be a good use of credit. You need to really think if you really want that “whatever it is” so much that you will exchange freedoms for new acquired obligations.

Living beyond your means for too long or to get in too deep is imprisoning yourself and your future. If such is to buy things and generally get rid of said things to buy more things you have no real need nor appreciation for can be very hurtful to your future well being.

Try this folks, if you are ones who regularly charge up life’s things and wants on your credit cards or lines of credit. Hopefully you have files to look back on. Go back 5-7-10 years. Add up the debts acquired on these and the interest paid. Add up your total repayments. Minus the repayments from the total purchases paid using this credit+ interest and see where you are at. Now if you can look at the line items of purchases and see the stuff you may have bought on credit that you may likely not even have today after 5-7-10 years. You may be surprised at how much your buying using credit over the last 5-7-10 years of your life is to exchanging freedoms for obligations from debt for what may very well have been a lot of needless, not really appreciated, stuff n crap!

Every dollar used via credit is taking from your future income and is tying you to a new and/or increasing obligation. Every dollar of cash you have saved to use in daily life for not just necessities but prudently for wants along with hopefully some cash invested well, is FREEDOM! Freedom to choose or not to spend money that you already have on hand. Once you see and understand this you may feel a proverbial breath of fresh air and you also begin to lift the fog of never ending drivel of a society today built trying put you more and more into debt!

Who is richer/better off?

A family who may earn only $50,000.00 but live well enough in their means spending only $45,000.00 but can save/invest $5,000 per year?

A family who many earn $100,000.00 per year but live beyond their means by going $10,000.00 more per year in debt and have little or no money saved?

Suitable use of credit has its place. Sometimes we each may need to use credit. Sometimes we each may want something and may not want to wait until we get the cash acquired. But remember credit used is always an exchange of freedom for obligation.

#27 FormerSaskie on 06.27.14 at 7:06 pm

Marcel, you do have the advantage of reading this blog which puts you way ahead of all of the people buying shiny things they cannot afford. HELOC is how many people are “buying” their toys and experiences.

You do need to save and develop an investment strategy, as I am sure some of the sensible commentors will outline for you. The shared risk pension is a future flow of income for you, but you will need your own non-registered investments in retirement so that you will have flexibility around withdrawal rates as you age.

I have benefitted using the information Garth provides here as have many others. You just need to make a start and let the Jones’ do what they will.

#28 Ryan on 06.27.14 at 7:08 pm

Cry me a river..

#29 cash hater on 06.27.14 at 7:11 pm

Spanish billionaire buying up Toronto commercial real estate………..boom continues it seems indefinitely !
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQqQIwAA&url=http%3A%2F%2Fbusiness.financialpost.com%2F2014%2F06%2F26%2Fzara-founder-amancio-ortega-gaona-buying-first-canadian-property-in-toronto-for-255-million-sources-say%2F&ei=1PmtU9zgBsjhoAS204HACA&usg=AFQjCNFCmZqVMMPurVAuIflKrqtMteJ0Wg&sig2=Pp8fqoAOtZI9OOZip3WQcg&bvm=bv.69837884,d.cGU

#30 shawnG on 06.27.14 at 7:15 pm

Looks like the haters are out in force today.

RE:bnn article. The expert said the condo prices should be higher, because they are crap right now. “These buildings, within 10 or a maximum of 20 years, will need major renovations.” So, owners of the shoe box in the sky, you have underpaid for your condo. I hope you have a large rainy day fund ready.

RE: JP Morgan. funny thing Speaking, your pants are on fire. The title of the article is “Why Stocks Remain the Best Bet” and right off the bat, the author said “Don’t give up on stocks, especially when you consider the alternatives, such as cash and bonds.”

#31 Spectacle on 06.27.14 at 7:16 pm

Hmmm, to easy Garth . Thanks for blogging again today!

#10 NetCentric on 06.27.14 at 5:59 pm
“I have to say I feel a lot of empathy with Marcel. ……there must have been many such days in Rome, Luxor and Byzantium, in the last days of the empire. Today is a lovely day and the city a jewel in the crown.

I have lived through one of the greatest periods of prosperity in human history but my advice to Marcel is not to ignore the cognitive dissonance he feels but instead to prepare himself and his family for a very different future.”

My reply: well written #10 Net Centric ! I appreciate your perspective , and my advice would be research what fundamentals are really important.

Also,
1) sell that House already ( if possible).
2) hire a professional to get the finances maxed , with a plan. You will feel no stress then.

Re: kommykim from last night. Thanks for sourcing my backstory on the bankruptcy. Any interest in sourcing the story of the day, “cars being considered being banned from vanity central , if they have a lone occupant! ? “. Remember , they started with bike lanes, closed off roads, now banning single occupancy vehicles and next, tearing up the road to your cottage because it’s not environmentally sound…..

Agenda-21, but it’s about clean water and the environment, right? Right? Thanks KKim.

Regards All

#32 waiting on 06.27.14 at 7:17 pm

Focus on the positive Marcel.
Every day you wake up in a country where you are free to express your opinion, move around with freedom, vote for the least reprehensible politician and breathe clean air.
Enjoy the every day things – a good meal, the great outdoors, family, love and good health.
Do the best you can with what you have and know that you are not sinking yourself into a massive pile of debt like many Canadian households have done.

#33 lucyj on 06.27.14 at 7:17 pm

Just by looking around and seeing what is going on is a good first step. Please don’t buy into the dream of bigger, better, newer and must have to be a somebody. You are doing just fine, no one knows what the future will bring so maybe slow down and give yourself some credit for accomplishments to date. Enjoy life and family, remain employed and you will be fine.

#34 Luis Suarez on 06.27.14 at 7:20 pm

Marcel, Amigo :)=

In my country, we say that when fate bites you….

Bite Back!!

It has worked muy bien for me. Up until this week :(

Senor Garth, I have some unexpected free time and will be spending it with you and your blog Chihuahuas for a few months, comprende?

Growwwwll!! :)=

#35 cash hater on 06.27.14 at 7:20 pm

People from China, USA,Iran buying up luxury homes in Canada.
The luxury segment has doubled in the last two years.

Boom expected to continue into the foreseeable future according to a guest at Amanda O’leary show.

#36 Tony on 06.27.14 at 7:20 pm

In the real world a negative fifty percent return in the next five years would be a miracle. Trend lines point to a 80 percent fall from present valuations.

#37 cash hater on 06.27.14 at 7:23 pm

The luxury segment has doubled in the last 5 years…sorry

#38 Waterloo Resident on 06.27.14 at 7:29 pm

In 2007, just before the GFC hit, I went to Florida on vacation and drove around the Clearwater area. The thing that hit me was no matter where I went, no matter which side street I went down, there was ALWAYS a ‘FOR-SALE’ sign somewhere to be seen. That alone told me that something was not right.

So if you ever go for a drive and you notice that as you look around, there is somewhere a ‘For Sale’ sign to be seen, either close by or even out in the distance, THAT IS ABOUT THE TIME A CRASH in Canadian Real Estate is about to occur.
So far here in K-W its nowhere near that bad, I only see a few signs each day, quite seldom. I from that I reason that falling prices here are still a LONG WAYS OFF.

#39 saskatoon on 06.27.14 at 7:33 pm

the answer is simple:

DENIAL.

the many, all too many, can avoid reality–but they cannot avoid the consequences of reality.

#40 saskatoon on 06.27.14 at 7:35 pm

incidentally:

http://www.cbc.ca/news/canada/new-brunswick/new-brunswick-cautioned-to-make-cuts-now-to-avoid-bankruptcy-1.2639531

#41 omg on 06.27.14 at 7:44 pm

Marcel don’t worry man, you got a government job.

Let the world around you implode, you will be OK, the number of warm government bodies that actually ever hit the street are extremely low.

You are only 39, you cannot possibly fret about what will happen 10, 20 or 30 years out. Trust me.

A provincial government going bankrupt – never, its just fear mongering.

As an old friend of mine once told me (when he was 87) “The things you worry about never seem to get you, the stuff that hits you is totally unexpected from out of left field. So no use in worrying about things.”

After all the thing I have lost sleep over that new come to pass, I think he might be right.

#42 Detalumis on 06.27.14 at 7:49 pm

#18 you need to get a life and not obsess about having 2 million at age 80. I was “lucky” to have bought a house in my 30s by accident in an area populated almost exclusively by retirees so I got to see the hidden of getting old.

Almost nobody makes it to 90 and the ones that do are the losers not the winners. They don’t care what LTC home they are put in, having your a.s.s. wiped 7 times a day instead of 6 is meaningless when you don’t remember how to do it yourself or what is the purpose.

The average age of widowhood is 60 not 80 so fully half of all couples have no retirement together. Almost no couple makes it to 75 without major life threatening illness in one or both that stops traveling in its tracks. It’s better to travel at 35 or 40 and have memories than save up to cram it in on the other end.

I have 3 work colleagues that are widowers before age 60, the women are dropping of cancer like flies before retirement while their 80+ mothers are alive and ticking. Who says people will live longer, I don’t see it in my circle of friends.

Cultivate a relationship with the bottom feeders in your area and when the time comes instead of forking out 1 million for LTC just chase the dragon instead. You will be out like a light and it’s a hell of a lot cheaper.

#43 Daisy Mae on 06.27.14 at 8:03 pm

“So here I am, someone who lives in a province where you can get a house for 150K that is quite nice, earns twice the median income, has a government pension, and is freaking out. Why aren’t other people freaking out?”

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

Stay the course, Marcel. You will be fine. Keep things in perspective. Most others won’t know what hit them when TSHTF.

#44 Mean Gene on 06.27.14 at 8:15 pm

http://en.m.wikipedia.org/wiki/Keeping_up_with_the_Joneses

#45 Retired WI Boomer on 06.27.14 at 8:16 pm

Marcel,

You have every right to be fearful, but do not let it over power you. Life can turn ugly, so can governments.
You live in an area where seafood is plentiful.

From the description, sounds like you are doing “OK.”

I would accelerate my house payment to dump the mortgage. Drive the vehicles into the ground! 12-15 years if the bottom stays on them. Make sure you are getting the maximum match from your employer on the contributory retirement. Stay out of expensive DEBT! The debt world is how ‘the others’ are appearing to do better, they are not!

Your Life Insurance Man said you were doing the right thing?
Exactly what was this guy trying to sell? Whole Life, or an Annuity? At 39 you might wish to look at a 20 year term policies for you and the wife, for like 15 times your annual income, and invest the difference in cost between what you may have in a whole life policies. (The cash value ideas are a joke).

Oh, right – PRAY!!

May do no good, but it does make me feel better, try it.

#46 rainclouds on 06.27.14 at 8:23 pm

Here in the P5 Garage in Yaletown:

Saunter to my 5 yr old paid off Pickup, aprox 15 spots from elevator to vehicle.

I pass a Maseratti, several Audi’s, 3 Lexus, 4 Mercedes 2 Beemers, then ME.

Either a lot of money in Yaletown OR Leasing is the norm. The upside? nobody parks close to me!

#47 Shawn on 06.27.14 at 8:25 pm

Average versus typical

Devore responded to me:

#5 Shawn

No person is average, no house is benchmark, no couple is typical, and no household is reflected in the CPI basket of goods.

And yet, far from being silly, these are all incredibly useful (and accurate) statistics that can be used to predict any number of things.

*****************************************
Agreed, I have no argument with that.

It’s just that 93.4% of the population seem to think that average means typical and also can’t recognize an obviously bogus statistic when they see one.

#48 Drill Baby Drill on 06.27.14 at 8:26 pm

#12 Mr. Zipper
The point of the article is that the current batch of condos being built in the GTA are of the cheap materials kind. In order to get a longer lasting and higher quality build you will need to spend much more.

#49 Daisy Mae on 06.27.14 at 8:27 pm

#32 Waiting: “Every day you wake up in a country where you are free to express your opinion, move around with freedom, vote for the least reprehensible politician and breathe clean air.”

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

Well said. We must not forget what a great country this is in spite of our ‘reprehensible politicians’. Not perfect — but the best there is.

#50 Drill Baby Drill on 06.27.14 at 8:29 pm

To thos on this pathetic blog that wax eloquently about Ontario being “screwed” you are right!! The mainstay and past competitive advantage of Ontario was it’s cheap electricity rates. Ontario’s electricity rates have climbed 130% in 10 years. Goodbye competitive advantage say hello to more incompetent government coming your way.

#51 catalyst on 06.27.14 at 8:30 pm

you make double the average wage and enjoy a low mortgage (lower than 1 years gross salary) and a future government pension that dwarfs the investment returns 95% of private workers will be able to attain with diligent saving.

It’s people like you who give public sector workers a bad name. Crazy entitled.

He said his DB pension was no longer in place. Read harder. Prejudice less. — Garth

#52 FinancialPoodle on 06.27.14 at 8:31 pm

GAWD! I wish I had only a 100k mortgage!
Get aggressive and pay it off damn fast! Then start socking away the money in your TFSA etc. Don’t worry about your neighbours. I would almost guarantee they are digging a deep hole by borrowing for cars, trip, and the like.
Stay the course but kill that mortgage asap!

#53 Steve on 06.27.14 at 8:35 pm

Don’t envy them. They are insane and they use debt to make themselves look awesome to each other. Ignore everything other people are doing and focus on being intelligent. Eventually all of these family’s will have to answer for their activities. That’s when you can sit back and go “I figured there was something amiss there!” I know all about this because I have lived in the brokanagan valley for forty years. Home of the blow ass, the big wheel, the self made man! They talk big, they live big, they spend bigger! Then they quietly implode and crawl their filth off to some other community to start all over again. All the while my little family has been nobody’s. Can’t afford to keep up with the high balls… I’m still here in the valley enjoying paradise on my small time budget. Lol!!

#54 Blair on 06.27.14 at 8:37 pm

Garth, Good posting. More postings like this one, please.

……..
Hello Marcel,

You are right to ask yourself all of those questions. I can relate to that when I am surrounded by friends with much larger homes, better vehicles who take big vacations, etc., etc.

They don’t see what could happen regarding our economy and the state of housing. As a former Maritimer living in Ottawa, the MLS listings are at an all time high, so are prices and there is a bubble that will no doubt burst.

Leave money at the end of the month for the TFSAs and get an Advisor (after interviewing several) who believes in a balance of income and equities that are low cost. An earlier comment tonight was to drive your car into the ground. I agree with that.

You are living within your means. That is good. There’s not many of us with that discipline. They’ll someday learn what we already know.

That 2 bedroom you live in will one day be sought after and grow in value as people get old and want to dump their huge homes with high taxes for something easier to maintain. And as they age further, the wrinklies will increasingly expect the gov’t to “do something” when they finally come to the conclusion that they are screwed.

Everyone else is not “freaking out” because they listen to the media, who writes articles and publishes reports relying solely on the banks and real estate companies that have a vested interest to state what ultimately suits them. Watching HGTV doesn’t help either. Neither does listening to our co-workers who talk with the same herd mentality about investing and real estate that make you and I cringe.

But we’ll be prepared.

#55 eviee1973 on 06.27.14 at 8:39 pm

Was in the Superstore last night in Sackville, NS. Next cash over was a guy from Fredericton who came here to get work as there was nothing in Fredericton area and was staying in a campground. Seemed to feel the economy in Halifax and area was a lot better off than Fredericton.

#56 Smoking Man on 06.27.14 at 8:43 pm

Of late reading these posts are as painful as reading a technical manual on spark plugs….

Boring,

MARK in no way do I want to turn you off to posting.. But dude.

Put a story in between your sales pitch, tell us about Mark.

It’s cool how you do that bolding in you posts.. It’s not enough if you want the great Smoking Man to read your shit.

God I miss beach girl, even you old man….

You to busy being a coat boy for Wynnee and her partner…

#57 Daisy Mae on 06.27.14 at 8:44 pm

#26 Habs: “A family who may earn only $50,000.00 but live well enough in their means spending only $45,000.00 but can save/invest $5,000 per year?

A family who many earn $100,000.00 per year but live beyond their means by going $10,000.00 more per year in debt and have little or no money saved?”

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

This is a very good point. Many do not know how to manage money. It’s often not WHAT you make but HOW you manage it.

Life can throw you a curve and eschew your plans, of course. In that case you pick yourself up, dust yourself off…and start anew.

#58 kILlaBoY50 on 06.27.14 at 8:48 pm

I don’t get his point. He is worried sick that “imminent collapse” is going to happen in “the next 5 -10 years”? That doesn’t sound “imminent” and what does he think this “collapse” will look like? If he really is a long time reader, then he would have already sold his house years ago and invested with a balanced portfolio. Anyway, if you own a house and everything collapses, you are screwed. If you are renting and everything collapses, then you are screwed. Unless you can move into your retired parents’ basement.

#59 catalyst on 06.27.14 at 8:57 pm

“He said his DB pension was no longer in place. Read harder. Prejudice less. — Garth”

It’s a pension plan with 100% indexing to inflation. I stand by my comments.

http://www2.gnb.ca/content/dam/gnb/Corporate/pdf/Pension/PensionReform.PDF

#60 TimV on 06.27.14 at 8:57 pm

Is Marcel looking to hear how “screwed” everyone else is?

The other people, with bigger SUVs, bigger houses, and trips to Florida, will be fine. You make your own choices with your money; most likely, you would be miserable with their choices anyways.

Are their choices responsible and good stewardship of their money? Well, perhaps not. But you should celebrate with them over that big SUV, since it’s likely not cheap.

In the event of an outbreak of highly lethal, contagious, bird flu, we are screwed. In the event of a domestic nuclear terrorist attack in your city, you are screwed. In the event of a quick-acting terminal illness, you are screwed. In the event of mis-allocating your retirement savings into your house and paying more in debt interest than earning in investments … well, in that event, it is just unfortunate. But if you take joy out of mis-optimizing your household, then feel free to do so — at least, if that will make you happy.

Having your money outlive you will make you no more happy than outliving your money, I suspect. But optimizing it … well, that’s a different matter, and a much greater one (in a global sense).

My thoughts.

#61 JSS on 06.27.14 at 8:58 pm

I am the same age as Marcel.

I feel the same way as he does, but here’s what I say might help:

– Get a gym pass
– Pay off the house by age 45
– Use money that was spent paying mortgage, and buy some ETF’s, and whatever’s been said by others here
– Don’t rely on solely the company pension. Set up a TFSA and fill it up with some goodies, and set a non-registered investment account that spits out a monthly income, dividend, etc…
– Try to avoid buying another house
– Get out of the rat race before 60
– Take the wife out for dinner, and happily fornicate
– Spend time playing with kiddies

And the best advice…
– Stay off this pathetic blog.

#62 Happy Renting on 06.27.14 at 9:02 pm

Marcel, if you have half a brain and any ability to earn above-average wages (check mark for both), your long-term career ambition is to become a rentier. The main purpose of employment income is to keep you afloat and fuel your wealth-building until you reach that stage.

Other than ownership and management, most jobs can be offshored, mechanized, or farmed out to cheap TFW labour. But businesses will always require capital. So expect your job to get squeezed out of existence and plan ahead.

Also, stop focusing on consumption. Consumerism is bad for you, and if you spent everything you earned, everything you had saved or invested or could sell, and everything lenders would let you borrow, you could buy all sorts of luxuries you really don’t need.

#63 Linda Mulligan on 06.27.14 at 9:04 pm

Marcel, don’t worry, you are doing fine. Way back my husband & I could not understand how it was that we could not see our way clear to scrape together a downpayment, let alone afford a mortgage in our neighborhood where we were renting. Both of us employed, no debt, no kids. All around, young families with big homes, new cars, new furniture, one or more children etc. What was wrong with us?

Turns out, nothing. All the lavish lifestyle around us was 100% financed. The boom (we are in Alberta) busted & for two years nothing but solid, back to back daily sales of repossessed homes. Once the jobs in oil & gas disappeared, so too did the neighbours as their homes were repossessed, their cars were repossessed, their furniture was repossessed etc.

We bought our current home in the early 80’s. Interest rates were ‘only’ around 16.75% (down from 22%). We are still in that home, which we paid off in full in less than 15 years. Plus we renovated it so it is neither dated nor falling apart due to lack of maintenance. Having lived in the area for over a year we knew we liked it here & fortunately we have been able employment so income has always been available. Not to say that at times every dollar of that income was required to cover the bills – for about a 5 year period I had a princely $10 of ‘left over’ spending spree money from my biweekly pay – but it did not mean I didn’t have fun, it just meant I had to be creative about said fun & ensure that my fun didn’t cost more than $5 per week:)

Your main concern is to stay the course & grow accustomed to people who could have what you have but who choose to disparage your choice of career, your ‘luck’ & so on rather than buckle down & make the choices that would give them what you have. They are grasshoppers, you are an ant & in their eyes, the only reason you have what you have is because you have somehow gypped them out of what they rightly deserve. Funny how they never thought to share their own good fortune with you & yours while you went without & they partied hearty…..

#64 Vangrrl on 06.27.14 at 9:06 pm

#42 Detalimus:

‘Almost no couple makes it to 75 without major life threatening illness in one or both that stops traveling in its tracks. It’s better to travel at 35 or 40 and have memories than save up to cram it in on the other end.’

I agree. Though my parents, at 76 and almost 77, still travel once a year to Europe. That is what freaks me out- that one of them will be widowed and utterly lost without the other. My brother and I have this conversation quite often- that our parents are in a bit of denial and not fully prepared for an inevitable change. We’re pressing them to sell their Ontario home now and move permanently to Europe where they have property (my brother lives abroad as well) but they keep on like they’re 30-something with no worries in the world. They need to be more like Marcel and he like them!

#65 Mr Zipper on 06.27.14 at 9:08 pm

“Drill Baby Drill on 06.27.14 at 8:26 pm
#12 Mr. Zipper
The point of the article is that the current batch of condos being built in the GTA are of the cheap materials kind. In order to get a longer lasting and higher quality build you will need to spend much more.”

Build them out of gold……..they’ll last forever. Just kidding… I know you mean that we build everything to an architects masturbatory fantasy quality nothing will ever fail……like the cost of replacing your electric cars battery being more than the car is worth?

The writer of the article is an idiot. In appraisal there is a compenent we call ‘economic life’…….a place where sane people assume due to a variety of many varied assumptions that nothing will last forever…..even if they are built with platinum gold and titanium……shit breaks down…it wears out…..rain gets in and rots the rebar from the inside out…..

The idea is starting to hit the brainiacs in the ivory tower that these condo towers are going to fail long before people ever pay them off. But look at the example of the leaky condo’s in Swamp Couver…..Owners are so far underwater ( scuse the pun) that many are working on their third resurface after water intrusion……they have major special assessments….and now under the new law must start again. To say that ‘quality materials’ was the cause of the leaky crisis is naive to an extreme. TO’s building have all been built to fail….why doesn’t everyone know this before they spend more than they can ever pay back?

Seriously though…….70% of the cost of building anything in Canada in the development fee’s and taxes. Get rid of shitty halls fecal finger and costs would come down dramatically.

And double seriously….gold gold baby gold…..I see Toronto condo prices rising like a mythical lost city….impermeable….forever……it’s really different here. Like gold….Toronto prices will last forever.

#66 brainsail on 06.27.14 at 9:10 pm

“My wife and I make about 115K per year, but have not had a pay raise in years.”

That is sad because many years ago the wife and I ended up working for high tech companies in the US. There were yearly performance reviews. If you made expectations you at least got a got a raise that met the past years inflation rate and more if you did better. If you did not meet expectations you did not get an increase which was a clear indication for you to find an other job.

Looking back after all these years when I worked in Alberta in the seventies with a professional degree and realizing today that inflation for a couple of those years reached 12% and I was not given a raise to make up the difference leaves me shivering. I did not understand at the time why I had much less spending power.

#67 Freedom First on 06.27.14 at 9:11 pm

Marcel, I tell you this to try to help you, not to pick on you.

First, you have been a long time reader of Garth, and yet you are in this predicament. Sooo….. from what you have revealed to us, I can only surmise that you are driving a boat that has a number of long term leaks and have been bailing the water out to keep the boat afloat, but have failed to plug the holes for whatever reason.

Which only means that though you have been reading what Garth is writing, you have not been following his advice.

Marcel. Give up. I can see you are a smart guy when it comes to common sense, but financial management is not your talent. Time to hire someone to do it for you. Hiring Garth is great, but if you can’t hire him for whatever reason, find someone with as close to his expertise as you can afford. It is money very well spent. Good luck Marcel. Freedom First. Oh, lastly, I focus on what I am doing, and I could care less about what others think of me.

#68 Totalchaos on 06.27.14 at 9:34 pm

Marcel,

You don’t know who’s swimming without a suit until the tide is out.

Last year, we were at a neighbour’s barbeque/pool party. She’s a teacher, he’s an “entrepeneur”, but he never seems to be doing much. She drives a mercedese convertable and they paid over a million for their place a couple of years ago (lower mainland). We got the grand tour of the place, saw the new renos, the mock up for the kitchen project and saw the swatches for the silk drapes and custom sofas due to arrive a couple of weeks later.

I got to talking to the wife who said they were in Hawaii the previous year and Mexico the year before that. After a couple more drinks, it comes up that her parents paid for the holidays.

Later we got to talking about university in a couple of years for the kids. She mentions that her parents give them money each year for the kids RESPs.

How do you justify a million dollar house, newly renovated and redecorated and fancy cars when you don’t have the cash to put into RESPs? On the surface, it looks like we live in a very affluent neighbourhood. Everyone has nicer cars than us, bigger houses, more elaborate holidays, trendier clothes. There is no way all of these people are spending cash – most of it must be on credit. I worry about the future because even though I haven’t any debt and have a healthy nest egg, we will all be affected when the tide goes out.

#69 T.O. Bubble Boy on 06.27.14 at 9:43 pm

Marcel is doing ok – if he stays in a low-cost region like NB, and employment is stable.

$100k left on a mortgage in a area where a “nice house” costs $150k is a bit odd to me… does this mean they’ve barely paid off anything on the mortgage? With a bit of planning, they’ll have the house paid off before 50, and hopefully they get diversified in other investments at the same time.

#70 Son of Ponzi on 06.27.14 at 9:48 pm

Marcel.
Sell the house while it’s still worth something.
And then make an appointment with Garth.

#71 CoW Man on 06.27.14 at 9:52 pm

Others are not freaking out because they can’t think past the next encounter with the Jones they are trying to keep up with.

#72 Patrick on 06.27.14 at 9:55 pm

Marcel is worried, because he sees the bigger picture that not too many people see. Ignorance is not bliss; once you start down the rabbit hole, there is no going back. It’s the inter-connectedness of everything that people don’t see; once you understand this, you see the bigger picture, and what’s actually at stake. Welcome to the desert of the real.

#73 Martin on 06.27.14 at 9:57 pm

YOLO… BRO…

#74 AK on 06.27.14 at 9:58 pm

Marcel,

Dont’ worry, be happy.

But whatever you do, do not listen to Tony….

#75 Keith in Calgary on 06.27.14 at 10:04 pm

Today I stood in line at the Canada Passport office for the last time………ever.

It felt great………knowing that I wouldn’t be doing this again for the rest of my life. My very last Canadian passport is going to be ready for pickup in 2 weeks……..I am now financially, emotionally, and psychologically, ready to emigrate, the legal footprint is in place for citizenship somewhere much better, and the paperwork is on the way. I’m never looking back……..

Next step…….?? Have a party when I renounce Soviet Kanuckistan in 36 months time of my permanent residence visa being stamped and my new citizenship being granted.

I am going to watch North America and Europe implode from the beach……..and at the same time over the balance of my estimated remaining physical life, legally deprive the Canadian government of over $1MM of tax revenue I will no longer have to pay up here.

What RE bubble…..who cares…..

Cue the music please………..

https://www.youtube.com/watch?v=d-diB65scQU&feature=kp

#76 SamIam on 06.27.14 at 10:05 pm

Hello Freaking Guy

Stop Freaking, because there is no tomorrow

No one has ever seen it.

Buy Buy Buy and then say Bye Bye Bye !

#77 Grammer police on 06.27.14 at 10:06 pm

My advice would be that the benefits of “etc.” are that you only have to use one.

In all seriousness, it sounds like your simply a lone person who actually has taken stock of the situation and gets it.

#78 Smoking Man on 06.27.14 at 10:09 pm

Marcel, hurry, rent a convertible, drive across the country, head west. Head to the Golden Gate Bridge before the needing goes up..

Seriously….

Humans….

#79 Nemesis on 06.27.14 at 10:10 pm

#NoWorries,Marcel! #NowWhatWouldDr.FrankenfurterDo? #AhYes! #Here’sALittleSomething. #IWhippedTogetherEarlierToday!

http://youtu.be/S8Y77efFW-I

#Afterwards… #It’sMandatoryToGloat. #RubYourHandsTogether. #AndOpine,”It’sAlive!” #ThenYouTakeOverTheInterWebs.

http://youtu.be/1qNeGSJaQ9Q

[NoteToGT: Assembly goes so much faster when you have an army of ‘Igors’. Regrettably, mine is a SoloOperation. Nevertheless… “It’s alive!”]

#80 Mr. Frugal on 06.27.14 at 10:22 pm

My advice – Love many, trust few and always paddle your own canoe.

On a more serious note:

1. Remain calm
2. Read “The Millionaire Next Door” and John Bogle’s books on index investing.
3. Setup a budget and stick to it.
4. Save as much as you can.
5. Invest wisely.
6. Be thankful.

#81 Smoking Man on 06.27.14 at 10:27 pm

needing

Should have read, netting,,

Everyone worries, frightened of your own God damn shadows.

Why, you’re all the gatherers now, only the few hunt.

I’m a hunter, I don’t always make the kill every day, but, when I do, enough meat to last a season

Where am I going with this post, not sure, but a brunet at the bar, with the biggest, most humungest, blue eyes I’ve ever seen…

I m like, not sure, but many jugs deep…

#82 2or3orsometimes7 on 06.27.14 at 10:30 pm

#23 I agree

…’I chalk it up to broad financial illiteracy. ‘…

————————————————–
Yes! Financial advice should not be confused with sales of financial products!

TV/advertisements have put people into zombie mode, and believing what they see is true.

Thinking goes like this ‘The banks know about finances; hey, the bank CEOs make lots of money. And they tell me that I’m richer than I think. They must be right! I *should* go to them for financial advice – RRSPs/GICs for investing, HELOCs for cottage. They have everything I need!’

#83 Sheane Wallace on 06.27.14 at 10:31 pm

GDP in the states was revised to -2.9 down for the first quarter. With understated inflation it is probably down at least 5-6 % on yearly bases.

Free fall economy due to outsourcing or just temporarily ‘harsh winter’ conditions? The truth is probably in between but I bet on significant inflation coming.

Canadian dollar strengthens due to commodities going up. When CMHC blows up it will go down.

The amount of signs for sale in Toronto is huge, almost no sold signs.

The dive in the sh.t hole continues. The bad news is: we are almost out of air. And soon would need to open our mouth…

#84 Dm in c on 06.27.14 at 10:42 pm

“Was in the Superstore last night in Sackville, NS.”

Wow that’s a flash from the past. I worked there when it first opened …. We trained on cash in a warehouse in Burnside on plastic produce. Me and my friends from SHS. Lol.

Marcel, stop worrying and live. You are doing ok. Worry about what you can control. The rest? Fuggedaboutit.

#85 Smoking Man on 06.27.14 at 10:48 pm

Do you bastards know, there is an alien race, here on earth. They are on a ten year mission. Almost complete.

They know your close to tapping the secret of inter stellar hyper speed.

They are worried you demented bastards will spread your cancer in the universe..

They are here to evaluate you, make call weather to kill you all.

And you are writing technical manuals about spark plugs.

Only Smokey can save you.. Thank God for JD

#86 KommyKim on 06.27.14 at 10:54 pm

RE: #31 Spectacle on 06.27.14 at 7:16 pm
Re: kommykim from last night. Thanks for sourcing my backstory on the bankruptcy.

It was a story I had already been following closely since a friend of mine unfortunately had invested with League. It did not end well.

RE: Any interest in sourcing the story of the day, “cars being considered being banned from vanity central , if they have a lone occupant! ?

Vanity Central? You mean downtown Victoria? I haven’t heard that rumour yet, but I wouldn’t put it past those wacky Victoria councilors.

#87 Smoking Mans Med Checker on 06.27.14 at 10:59 pm

#85 Smoking Man on 06.27.14 at 10:48 pm:

Do you bastards know, there is an alien race, here on earth. They are on a ten year mission. Almost complete.
+++++++++++++++++++++++++++++++++++++
So much work…. so little time….

Anyway, worked with this guy a while ago. Big house, fancy trucks, new ‘vette, boats, quads, Harley’s , holidays. I thought he was swimmin’ in it even though he made less $$ than me. I asked one of the other guys about him and if he won the lotto or something. The guy replied: “Nah. He and his wife are so far gone that they know they can never pay it all back, so they decided to live large until the fat lady sings. After that, the price is the same, so who cares”.

#88 Andrew Woburn on 06.27.14 at 11:30 pm

Dear Marcel

Why aren’t other people freaking out?

How do you know they are not? Most people will never admit they are wrong to other people or even to themselves. They refuse the bad news but only psychopaths can escape the constant undertone of doom when there is always more month than money.

Reading your letter it is not clear to me whether you are mainly afraid

– that you are a social failure because you don’t have a big house and SUV,or,

– that the economic downturn will cost you your job,or,

– you won’t have enough to retire on.

It is unlikely that, even in NB, you could rent an acceptable house for much less than you are now paying in a mortgage but on the other hand, you probably wouldn’t pay a lot more to rent a particle board palace so selling and renting is worth a look especially if your job is at risk.

I assume you bring in most of the bucks so why not try to save and invest your wife’s income? If you can’t live comfortably in NB on your net income, you are either doing something wrong or you really aren’t all that freaked out about the future after all.

I lived through the brutal real estate crash in Victoria in the early 80’s and have friends that survived similar debacles in Calgary. Eventually green shoots return to the parched earth. Meanwhile, for guys with good jobs and credit, there are investment bargains everywhere.

#89 Al Fornicato on 06.27.14 at 11:39 pm

Marcel…You are one sad person and it’s clear that you are a “glass half-empty” person. You’re suffering from “Paralysis by Analysis.” As well, you lack self-confidence and self-esteem. No cure for that. You’ll be freaking out for the remainder of your life regardless of your finances. Some people are never happy.

#90 devore on 06.27.14 at 11:40 pm

#29 cash hater

1. Learn to link. It’s 2014, shouldn’t be rocket science.

2. How do you get “buying up” from that?

#91 Andrew Woburn on 06.27.14 at 11:43 pm

The nerdier blog dogs may enjoy this weekend read.

The Left-Right Political Spectrum Is Bogus

“The familiar notion is that when you reduce the power of the state, you increase the power of capital, and vice versa. To put it mildly, this claim is non-empirical. The rise of capital, its consolidation into a few hands, and the enduring structures of monopoly or gigantism to which it gives rise are inconceivable without the state.”

http://www.theatlantic.com/politics/archive/2014/06/the-left-right-political-spectrum-is-bogus/373139/

#92 barnz0rz on 06.27.14 at 11:51 pm

Marcel,

You have 100K to go on your mortgage, making 115K, and you’re worried???

My gf and I make about 80K combined, rent in North Van, will never own here, and we save money….

What are you spending all your money on bro?? My rent is more that your monthly payment….

#93 Randol on 06.27.14 at 11:53 pm

Hillbilly
Seriously, GoPro is going to keep you out of the stock market? You are the reason I have made such high returns on investment year over year. Please keep spreading your ponzi scheme doom, I love it.

Keith in Calgary
Your last 10 year passport? I call BS. If you plan to renounce why not do it now? You are still in Calgary and a pussy.

#94 Yuus bin Haad on 06.27.14 at 11:59 pm

Chill Marcel (and stop having your insurance agent over so often).

#95 Randol on 06.28.14 at 12:00 am

SM
You desperately need to get out of LB/Miserysauga. Let’s have a beer somewhere interesting such as The Beach in Hamilton.

#96 Andrew Woburn on 06.28.14 at 12:10 am

#120 Mark on 06.27.14 at 3:28 pm
Housing going down and domestic deflation is very positive for the CAD$.
========================

I’m still having problems with this concept. I get that shrinking the Canadian money supply should make each remaining dollar worth more in exchange markets. On the other hand, declining domestic demand should discourage foreigners from buying as much CDN to invest here. Potentially it seems like a wash.

#97 ss on 06.28.14 at 12:13 am

First Brentwood Tower’s 247 units sells out in under 5 hours, buyers camp out for 3 days

http://www.vancitybuzz.com/2014/06/brentwood-tower-sells-out-buyers-camp-three-days/

#98 Andrew Woburn on 06.28.14 at 12:40 am

THEN:

Updated: Thu, 30 Jan 2014

TORONTO – Watch for the loonie to lose more of its luster this year, according to two well-known bank economists.

Craig Alexander, chief economist for TD Economics, warned Thursday that consumers could see the Canadian dollar slide as low as 85 cents US by mid-year

NOW:

Updated: Fri, 27 Jun 2014

TORONTO – The Canadian dollar closed higher Friday, while an index measuring price changes for major commodities sold by manufacturers in Canada dipped last month.

The loonie was up 0.28 of a cent at 93.8 cents US

CONCLUSION

Prediction is very difficult, especially if it’s about the future.

Niels Bohr

#99 Ulsterman on 06.28.14 at 12:53 am

Marcel, relax, it’s very easy to start obsessing over the little things and not see the big picture. You are in a fabulous position.

You gross 115k and take home, what? 75k? 10k on mortgage, 8k on food? Gov pension? 100k left on the mortgage? That’s a rounding error on a mortgage here in BC.

If it makes you feel better crush that 2.75% mortgage in a few years and then invest in a Garth-approved portfolio.

Or if you have the stomach pay the minimum on the mortgage and invest the rest now. The mortgage money is the cheapest debt you’ll ever have.

Either way, you could be living mortgage free in 5 years with 75k of after tax income. I know you ARE nervous but you have absolutely NO reason to be.

There are people here in BC in your position EXCEPT they don’t have a pension, don’t have savings, and have a 750k mortgage (or more). Now they have cause to be terrified, whether they realise it or not.

#100 young & foolish on 06.28.14 at 12:56 am

So much negativity and fear of this blog …. inflation coming, deflation around the corner, the USA/Europe will implode, we are all “screwed” …. blah, blah, blah …

We seem to be in a transitional phase, where a new economy is about to spring from the ashes of the old. No wonder people are so spooked and are beckoning for the “End is Nigh”.

Besides, if it wasn’t for all those bid spenders going into debt over the last 20-30 years where would our economy be now? Where would the growth have come from? Would your balanced portfolio be dishing out capital growth and dividends? Don’t be a hypocrite!

#101 Son of Ponzi on 06.28.14 at 1:18 am

Let’s welcome our Philloppino friends.
——
From the Richmond News
————
This July 1 will be more than just a Canada Day holiday for Richmond’s Maricel Cabral. It will mark a new beginning in her adopted country as she joins 40 or so others at Steveston Park to be sworn in as new Canadian citizens.
While she arrived here in late 2005 from the Philippines on a working visa as a care aid, the opportunity to officially affirm her allegiance to Canada will be an emotional one, replete with gratitude for the chance at a better life.

Cabral is now busy helping prepare applications for her mother and two siblings – a brother and sister – so they can all reunite in Canada.

#102 Cici on 06.28.14 at 1:19 am

Well Marcel, to put it kindly, “ignorance is bliss.”

Or at least it is until it blows up in your face and you awake from your stupor.

My advice to you: Worry less about your neighbours, and definitely don’t try to be like them (but do try to relax a bit and enjoy life all the same). Keep saving, living minimally and investing. And, have a Plan B ready whenever Garth finally tells us to go about doing so…;-)

#103 Cici on 06.28.14 at 1:20 am

Oops, meant “have a Plan B ready when Garth finally tells us how to go about implementing one, or what that entails”

#104 Cici on 06.28.14 at 1:28 am

#80 Mr. Frugal

“Love many, trust few and always paddle your own canoe.”

Great advice! Hope you don’t mind, but I’m going to borrow that line from you. But I’ll of course give credit to the source: Frugal®

#105 Mr Zipper on 06.28.14 at 1:29 am

“Just to live comfortably for 20 or 25 years, I think I need a retirement fund of a paid-for house, plus 2M. ”

No freaking way 2Mil is going to make a 41 yr old comfortable. In 24 years your 2 mill will be today’s 50 grand….have you been to the grocery store lately….meat, milk, eggs, bread, processed foods, fruit, candy….you name it is going up 20% a year. Now howz about your property taxes, carbon, taxes, transit taxes, school taxes, fee’s snot-rags, diapers, douchebags, booze….gas….clothing….parking…heat , light, insurance, flights….you name it..prices for every other freaking thing…..are picking up speed faster than a $3 dollar Taco Bell meal through my lower colon.

My advice is to do like an Edmonton mechanic did recently…at 60 he brought home a nice 19 year Philipino girl he met on the internet ( immigration Canada fought him 10 months because they said it wasn’t true love) . If he puts her through nursing school she be 24 and earning indexed civil service money….he’ll have his retirement package firmed up and serving him breakfast.

#106 valleyrenter on 06.28.14 at 1:36 am

#26 Habs76-79

Out here on the wet coast those same equity commercials tout “up to $600,000″…. yikes!

#107 Cici on 06.28.14 at 1:45 am

#10 NetCentric

Awesome post, thanks for the read ;-)

#108 Flawed on 06.28.14 at 1:46 am

Garth I was wondering why so many of the people you profile seem to be public sector workers. Are they the only ones that seem to have any money much of the time? It’s going to be interesting to see how public sector workers continue to get funded when the private sector peters out and tax revenue declines precipitously.

#109 Ontario's Left Coast on 06.28.14 at 2:02 am

#42 Detalumis on 06.27.14 at 7:49 pm

I’m sorry, but this is the most depressing post I’ve ever read. Not judging but – wow – should we jump off a cliff now or later?

Anyway, do what I did. Save. Start saving early and make sure you’ve got something left over to put away after every week, month and year. If you can’t do that, you’re just spinning your wheels. Max out every opportunity for registered, tax-sheltered savings and live within your means. I’m still in my starter home and may never trade up. Do I care? No. I just laugh at all the posers and wannabe’s around me, content in the knowledge that I could buy and sell most of them 10 times over without even blinking. Not bragging, but quietly amassing a small fortune and continuously investing in a liquid, balanced portfolio (i.e. getting richer every month) is a truly great feeling. The best feeling is not having to worry about money at all. Just saying.

#110 Longterm on 06.28.14 at 2:11 am

#18 Essie on 06.27.14 at 6:40 pm

Whoa man, you need to take a pill.

You are way off base in your future requirements and what you think retirees, let alone younger people, need.

Life is about experience, not stuff and you don’t need much money to have incredible experiences.

I’m 43, wife is 43 and we have a 3 year old. We have a house under construciton and some land with a small mortgage in BC and about $310,000 the portfolio, chucking off about $22,000 a year.

We both work part time, leaving lots of time for experiences. Total expenses this past year were about $28,000. Over the past ten years we travelled to 43 countries and even during a 14 month epic round the world travel session in 2009-10 we only spent $29,000.

Hell, as soon as our investment income reaches about $40k pa we won’t need to work for money and can spend all of our time adding to those experiences [hiking, climbing, sailing, writing, community building, reading, studying, travelling etc.]

By the sounds of it, you are likely to be so stressed out about needing enough money that you are likely to shorten your life and die rich.

#111 Ontario's Left Coast on 06.28.14 at 2:15 am

By the way, I’m pulling a bit of a Smokey and writing after a few beers. So sue me. Tired of all the angst and wanting to urge people to get back to basics and take control of their financial lives. Spend < than what you make, whatever that is. Save and invest wisely. Good luck to all.

#112 Edmontonian on 06.28.14 at 2:46 am

H-U-G-E Slowdown happening around developments here in Edmonton since the CMHC took away speculative financing.

One guy who used to work with me at a Hotel finally quit his P/t job with us as he was selling 3-4 “units a week” in a new huge condo development. At the Same time I have an old girlfriend selling houses-she’s so busy was was pulling her hair out.

Now, in the past months sales have collapsed. The guy who used to work with me sold 14 condos in May, and only 1 in June, his begging for his p/t job back. My ex well she bought a new BMW two months ago as business was soaring and hasn’t sold a house in three weeks, she was selling at least one a week.

Just a bad month? Should we blame it on the weather like we did with consumer spending down last winter… Target doing so badly… and the Sobey’s is even closing around the corner from my condo-that I am renting.

Let’s face it, consumers are tapped out. This low interest rates couldn’t even fuel a long lasting housing bubble. It’s popping. It will effect many more jobs than we know, asked any HONEST economist.

#113 Jane24 on 06.28.14 at 2:48 am

Marcel if you and your family have your health and love each other then you have indeed won the lottery of life.

Anything else is small stuff.

#114 Exurban on 06.28.14 at 4:15 am

Why do people tell him to sell the house? It’s New Brunswick – he wrote that new houses for sale nearby don’t sell. They’re paying $850 a month on the mortgage! Could they actually rent for less? They could maybe accelerate the payments while rates are low, but otherwise just chill baby.

#115 4 AM Sunrise on 06.28.14 at 4:58 am

#14 Basil Fawlty on 06.27.14 at 6:13 pm
I believe the stock market is overvalued due to the unprecedented money printing by central banks, however it may not be life threatening.
——————————————–

What fascinates me the most is that we’re at all-time highs but nobody is partying like it’s 1999. Maybe the GFC is still recent enough to scare everybody.

I figure that capitalism isn’t perfect, and the markets aren’t perfect, but things will chug along. It’s sort of people. How many of us, outside of the kale-chomping soy-swilling crowd, are in 100% perfect health? We all have weird tics and ailments that may require daily time and attention. That doesn’t derail our lives. We do what needs to be done. Same with the markets. Yes, Japan is sitting on a debt bomb. Yes, the US owes a huge ton of money. But there are too many stakeholders to let the entire system fail. Humans will scramble and stretch in all directions to protect their interests. Question now is if that scrambling is enough, and good for how long.

#116 Biff_ on 06.28.14 at 6:31 am

Here I am on a coastal road in Croatia on a local bus with WIFI, posting pictures on the net and getting caught up on Greater Fool entries . What an amazing world. Cheers Garth, keep my money safe. Bill H

#117 betamax on 06.28.14 at 7:07 am

#63 Linda Mulligan: “What was wrong with us? Turns out, nothing. All the lavish lifestyle around us was 100% financed”

Bingo. It’s a credit bubble at heart.

#118 Martha on 06.28.14 at 7:15 am

Marcel ~ You say; “I don’t understand why everyone around me seems to be living in a house that is 3X the size, driving an SUV, taking trips south, etc., etc., etc.

And they do all of that by being in debt up to their eyeballs… If you aren’t then by happy and proud! Don’t envy them…pity them.

Like lemmings, they have followed the crowd into the consumer trap… a pit few are able to climb out of.

Please don’t follow them over the cliff. Be happy with what you have! Damn man, you have less to worry about than all of those people you seem to envy.

I’m almost 60…I have seen it all…and the truth is…all of their trips, all of their possessions, do not make them truly happy. It only makes them want more…

THINGS don’t make you happy…the way you live your life does.

#119 Stickler on 06.28.14 at 7:30 am

The people who are not concerned either:

1. Are set financially or
2. Don’t have a clue

That being said, Marcel is doing right.

Bonus question:
Prior to this year, have equity markets ever before hit all time highs in a quarter when GDP growth was -1% or less?

#120 rosie "moving forward" in the knowledge that, "this won't end well" on 06.28.14 at 7:37 am

Consumers in Ontario pay an eco-fee of $39.50 when they buy a T.V. It’s meant to pay for disposal down the line. Meanwhile high school kids set up disposal bins to collect old electronics and sell them by the ton to the third world. Then I read this about asbestos use. Canadians are smart.

http://www.theglobeandmail.com/report-on-business/pipes-with-asbestos-still-used-in-new-buildings/article19357158/

#121 Courage and poo on 06.28.14 at 7:51 am

People think the world is benevolent because a transistor was invented. If there is one thing more certain than a correcting housing market, it’s the depravity and cruelty of humanity. We’ve butchered ourselves before, and we will continue to do so forever. Garth is not an idiot for naysaing dormers, just a bit naive.

But I like dormers. — Garth

#122 Courage and poo on 06.28.14 at 7:51 am

Doomers*

#123 Jerry on 06.28.14 at 8:35 am

DELETED

#124 OttawaMike on 06.28.14 at 8:59 am

#116 Biff_ on 06.28.14 at 6:31 am

Biff. Seriously dude. Look at the scenery. you are on the Mediterranean coast and your nose is in your phone posting here?
WTF??

#125 eddy on 06.28.14 at 9:43 am

#116 Biff_ on 06.28.14 at 6:31 am

Here I am on a coastal road in Croatia on a local bus with WIFI, posting pictures on the net and getting caught up on Greater Fool entries . What an amazing world.
=

In 2008 drove from Poland to Greece. I stayed a week in Croatia . My rental car (PL plates) didn’t have daytime running lights, cop pulls me over, i don’t speak Croatian, he couldn’t speak a word of English (except passport and ATM), he gave me a ticket, said pay me now,took my passport, made my wife wait with him while he sent me to the ATM to get him 60 euros,What an amazing world.

#126 Wonderful skit on 06.28.14 at 10:15 am

Monty Python’s “Four Yorkshiremen”skit puts materialism into perspective. Enjoy.

https://www.youtube.com/watch?v=Xe1a1wHxTyo

Alwyn

#127 Patricia on 06.28.14 at 10:19 am

Stop comparing yourself with anyone. Be an individual. Be yourself. It is an interesting exercise.

#128 Happy Renting on 06.28.14 at 10:20 am

#105 Mr Zipper on 06.28.14 at 1:29 am

Immigration is trying to protect the dude from fraud. They’re worried his mail-order bride will get her PR card and nursing degree, then ditch him.

It’s a good plan for her, actually.

#129 DreamingInTechnicolour on 06.28.14 at 10:31 am

http://blogs.vancouversun.com/2014/06/27/why-vancouver-housing-is-unaffordable-and-what-to-do-about-it/

#130 Dual Citizen In Canada on 06.28.14 at 10:49 am

Marcel, you need to be humbled. Go live in a third world country to understand the basics of survival. People have lost the understanding of the value of a dollar. Let’s go through a little of life’s checklist:
1. You have a place to live? Check
2. You have food on the table? Check
3. You have a roof over your head? Check
4. You have clothes on your back? Check

Everything else is gravy. Never fall prey to material temptations or think everyone else lives better than you.
Now go enjoy a beer and make love to your wife. Life is good!

#131 Gavrilo Princip on 06.28.14 at 11:32 am

Happy anniversary to me – and worldwide chaos :)

Yep, 100 years ago today, the world started to unravel thanks to me, and took two world wars just to hit the pause button.

Today? A global debt bubble, crisis throughout the Mideast, environmental calamities every month…could there be another trigger?

I say yes.

Garth – anybody you want me to “take care of”, if you know what I mean? (some of your trolls I would do for free, as a public service)

#132 John Prine on 06.28.14 at 12:01 pm

5 cash hater on 06.27.14 at 7:20 pm
People from China, USA,Iran buying up luxury homes in Canada.
The luxury segment has doubled in the last two years.

Boom expected to continue into the foreseeable future according to a guest at Amanda O’leary show.

I wonder who the “guest” was representing ?

#133 Moi on 06.28.14 at 12:03 pm

Marcel, why aren’t others freaking out? They can see what is coming, but they are willfully blind. And if you try to be the Oracle of Truth you’ll only get sacrificed on the Altar of Wrath when everything goes kaput under the theory that you caused the problems because you spoke of them.

Don’t ask me why Dude, this is just how it is. All you can do is get yourself into a position where you can weather it the best you can.

Have you tried to grow a garden? I hear tending vegetables is soothing …

#134 SWL1976 on 06.28.14 at 12:04 pm

Great post as always Garth. Thanks for all that you do, providing interesting topics of discussion for all us blog dogs.

With the current state of everything in our world, if you are not concerned or worried for the future you either…

a) have your head in the sand and don’t want to know, cause that is comforting to you

b) too ignorant to care

c) gonna be both surprised and devistated when we do finally hit that formittable wall we are careening towards at alarming speed

Ignorant is bliss, but it’s still ignorant

The further a society drifts from the truth, the more it will hate those that speak it – George Orwell

#135 LL on 06.28.14 at 12:30 pm

…”Why aren’t other people freaking out?”…

Probably because they think this crazy real estate market will continue to go higher and higher all their live (ignorance)!
Compare to you, they probably have full debts(credit…credit..credit…)!!!

Those who are really rich doesn’t look to be rich.
Does playing to be rich are – in fact – … poor!

#136 Longterm on 06.28.14 at 12:37 pm

#75 Keith in Calgary on 06.27.14 at 10:04 pm

Sounds like a dubious plan. Why bother renouncing your Canadian citizenship? Canada doesn’t tax non-residents and you can’t get citizenship back easily so the smart move is to keep the citizenship and become a resident elsewhere leaving you with future options.

#137 Banjopete on 06.28.14 at 1:15 pm

Maybe it’s all a little less dramatic than we think. A slow death by ever increasing debt loads, less and less money left at the end of the month and governments saying we need to look out for those who didn’t for themselves.

Hey if nothing else it’s terribly fascinating to see play out. I love hearing friends tell me how stupid leasing a car is, then justify why buying the same car with all cash is much smarter just like they did. I think they really believe themselves which is fun to watch.

#138 courage and poo on 06.28.14 at 1:31 pm

Who doesn’t like dormers? They’re a nice architectural feature.

#139 Shawn on 06.28.14 at 1:53 pm

Money Supply and the Value of a Dollar and Diversity of Thought

Andrew Woburn at 96:

I get that shrinking the Canadian money supply should make each remaining dollar worth more in exchange markets.

*******************************************
You may think you “get” that but it may not be true and may not be that simple as you go on to indicate; other factors may offset.

The value of money is determined by many things and certainly not just the quantity of it much less the quantity “printed” by a central bank. There is the quantity created by banks and their customers, there is the velocity of spending there is interest rates there is international money flows, there is the outlook for all these factors.

Many times in this blog we see examples of people taking one little fact and making it into a conclusion that sounds correct but that may be dead wrong. (Not suggesting Andrew did so).

Usually this involves a prediction of great gloom. Later when it turns out wrong they lash out at the manipulation of government or whatever that prevented the great gloom they had (very logically in their mind) predicted and which would have happened if not for this or that interference.

Basically, a little knowledge is a dangerous thing. Even with great knowledge the future is always unpredictable.

Hanging our hats on making bets that something will happen in the future and calling it a certainty has been proven to be financially dangerous over and over again.

Diversification of who we listen to may be as important as diversification of investments. (But don’t take my word for that!)

#140 Chinese try.... and fail on 06.28.14 at 1:55 pm

http://www.theglobeandmail.com/news/british-columbia/chinese-investors-immigration-cases-fail/article19383810/

#141 BailinginBC on 06.28.14 at 2:00 pm

#105 Mr Zipper
Do you really believe that a woman who is willing to marry a man who is 40 years older than her in order to obtain a better life, would not be willing to dump his wrinkly old arse for a even better life? Good grief, he’s not even rich. The second her citizenship is confirmed and he has paid for her schooling she will be out of there. That is of course, if she doesn’t plan on keeping him locked up so she can collect his CPP. Frankly he would deserve it for being so vile and niave.

#142 Shawn on 06.28.14 at 2:10 pm

Logic Errors and Non Sequitors

A Non Sequitor is a conclusion not justified by the premise. That’s a fun concept and the world abounds with non sequitors.

An example:

Premise and observations:

Widely accepted fact: Index investing is best, it offers the best combination of risk and return unless one has special or inside knowledge.

Observation: The Toronto market has an index that can easily be invested in.

Conclusion: The best way to invest in the Toronto stock market is to simply buy an index fund of the Toronto composite index.

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

Problem is this is probably a non sequitor because it omits the fact that the Toronto index is not a decent representation of the Canadian economy much less a representation of a diversified modern economy.

The Toronto index occasionally has been severely dominated by one or two firms. Nortel together with Bell that was holding a lot of Nortel, at one time represented over 35% of the index. In no way was it diversified at that time.

Today, the Toronto index is over-represented by a handful of banks and large energy companies.

Financials are 34% of the index, Energy is 27%, materials are 12%.

Meanwhile Information technology is 2%, Consumer staples are 3%.

http://web.tmxmoney.com/indices.php?section=tsx&index=^TSX#indexInfo

In no way is this a diversified index. Therefore for Canada to get a better representation you might need to try to select ETFs from each of ten sectors (if they exist) and reduce the weight on financials and energy and increase the weight on other things.

In conclusion beware the non sequitor and beware the Toronto Stock Index as a representation of much of anything useful.

#143 Twilight of the dogs on 06.28.14 at 2:16 pm

As we approach the day of reckoning where the indebted will be swallowed whole in the yawning chasm of the great debt monster that gnaws at the very roots of our modern world, we will see arising a new order of haves and have nots. The term “doomed” will finally be revealed to be the misnomer it always has been and it shall be revealed to all as drummers who beat out the sound of our doom in the coming apocalypse. And Garth shall also be revealed to be God’s Wrath and he shall wield his mighty sword (formerly his pen) and the Harperites shall have their heads handed to them on a plate of their own cheap imported china.

As I sit here in the bright noon sun, a few pints under my belt (and perhaps more to come), I survey the passers by as they scurry about, on their way to feed the great credit monster. I see no hint of comprehension, I smell no fear, I do not sense they know anything of their impending doom. Like pigs eating bacon, they are oblivious to the horror that they are part of or that awaits them. Their doom will be writ large in their own blood. First born will become the new currency; change issued in arms and legs.

So Marcel, gird yourself. Prepare for the end of days. Abandon all hope.

#144 Shawn on 06.28.14 at 2:19 pm

Citizenship and Renouncement thereof

Keith at 75 said this would be the last renewal of his passport which he just renewed for ten years.

My very last Canadian passport is going to be ready for pickup in 2 weeks……..I am now financially, emotionally, and psychologically, ready to emigrate, the legal footprint is in place for citizenship somewhere much better, and the paperwork is on the way. I’m never looking back……..

******************************************
A few people have now posted that he will be renouncing his citizenship. Failing to renew a passport and even getting citizenship in a different country does not necessarily involve renouncing Canadian citizenship.

He may just let the passport lapse, that is all his comment says

Also he may plan to die before 10 years, though he certainly never said that.

Constantly people say one thing and then someone claims they said something else. He never mentioned any renouncement. I can read some denouncement of Canada into this certainly but not renouncement of citizenship.

Only a fool would renounce unless he had to. Ask Conrad Black about the costs of such renouncement.

#145 Mr. Reality on 06.28.14 at 2:25 pm

Garth

This homie lives in one the cheapest places to live in the country. And he’s worried?

Spend some time researching what the idiots do in BC (bring cash) and you will forever have restive nights.

PS – I live in BC and its hilarious how stupid people are here gorging on debt.

Mr. R.

#146 4 AM Sunrise on 06.28.14 at 3:02 pm

#110 Longterm on 06.28.14 at 2:11 am

I agree that #18 Essie’s post is a needlessly doomertastic read. It reminds me of those depressing Millennials who talking about saving for retirement. Saving is good, but not at the expense of living a life and doing what feeds your soul.

Having said that, should we be worried about the cost of long term care? Is it a boogeyman that the insurance industry uses to scare us into buying their long term care insurance?

There are a handful of care homes in my town. The nicer ones charge some $3000/month and sound like an all-inclusive in Mexico – gourmet food, activities, field trips, wheeeee! Then there’s the subsidized Kiwanis place for low-income seniors ($1000/month, maybe?) The cost doesn’t sound exorbitant.

We’re lucky enough to live in a country where, for example, cancer treatment is 100% paid for.

Am I missing something here?

#147 Oceanside on 06.28.14 at 3:09 pm

#129 DreamingInTechnicolour on 06.28.14 at 10:31 am
http://blogs.vancouversun.com/2014/06/27/why-vancouver-housing-is-unaffordable-and-what-to-do-about-it/

Everybody in Vancouver should read this, gets away from the “racism” whiners and shows what other jurisdictions are doing.

#148 Mr Zipper on 06.28.14 at 3:18 pm

“Happy Renting on 06.28.14 at 10:20 am

#105 Mr Zipper on 06.28.14 at 1:29 am

Immigration is trying to protect the dude from fraud. They’re worried his mail-order bride will get her PR card and nursing degree, then ditch him. ”

There’s no romantics left in the world. Of course this relationship is going to work. It happened on the internet…so it must be true. At least the guy is going to have a fine time while the necessary act of consummation is going on. And seriously guys….how many people do you know in Canada that are getting no poon from the spouses….and left high and dry when anything goes wrong? Where’s the love people……this guy stands to fail only as often as every other Canadian marriage.

This girl might have a thing for older guys……I get that all the time.

#149 Andrew Woburn on 06.28.14 at 4:24 pm

#105 Mr Zipper on 06.28.14 at 1:29 am
If he puts her through nursing school she be 24 and earning indexed civil service money….he’ll have his retirement package firmed up and serving him breakfast.
=============================

Its more likely she’ll be serving him a lawsuit – in divorce court.

#150 4 AM Sunrise on 06.28.14 at 4:45 pm

#148 Mr Zipper on 06.28.14 at 3:18 pm

Did you catch “My Thai Bride” on The Passionate Eye?

http://www.cbc.ca/player/Shows/Shows/The+Passionate+Eye/ID/2335966475/

The love was real in the beginning – she was devoted and passionate. Then when the 60-year-old gringo helped her build a house and start a business, she gave him the cold shoulder.

It could work out, though. Anything is possible. The odds are against him, and Immigration was just acting on those odds. If things go bad and she applies for welfare, he gets the bill. And nobody wants to see that happen.

#151 Andrew Woburn on 06.28.14 at 4:46 pm

If I were a millennial, I would worry about this a lot more than I would worry about housing

Get ready for the Googlebot: Search giant to start selling humanoid robot after pulling out of military ‘robo olympics’

http://www.dailymail.co.uk/sciencetech/article-2672636/Get-ready-Googlebot-Search-giant-start-selling-humanoid-robo-firefighter-winning-military-robo-olympics-contest.html#ixzz35y8LOiSz

#152 Happy Renting on 06.28.14 at 4:52 pm

#148 Mr Zipper on 06.28.14 at 3:18 pm

As long as he realizes he may need to lather-rinse-repeat every five years, no problemo. But young girls tend to have grand hopes and high expectations. He might have a better shot at marital longevity if he picks one who’s a bit more grown up and realizes that romance is leaving the toilet seat down.

Besides, if it’s mainly about the poon, there’s a section on Craigslist for that, no danger of divorce court.

#153 Mister Obvious on 06.28.14 at 5:13 pm

#151 Andrew Woburn

If I make it to my eighties and even beyond, I expect that at least some of my care (if and when I need it) will be provided by one or more specialized robots.

It has to happen. There will simply not be enough young nurses arriving from the Philippines to deal with the imminent tsunami of geriatric boomers.

Perhaps we should look at it as a great investment opportunity?

#154 Mister Obvious on 06.28.14 at 5:26 pm

#152 Happy Renting

“Besides, if it’s mainly about the poon, there’s a section on Craigslist for that,…”
——————————-

Not if the conservatives get their way.

#155 Son of Ponzi on 06.28.14 at 6:23 pm

Smoking Man,
Read post 143 and weep.

#156 Humpty Dumpty on 06.28.14 at 7:06 pm

Fifa is more important right now…

Collapse of Democracy in Europe

http://armstrongeconomics.com/2014/06/28/collapse-of-democracy-in-europe/

This is why more people believe Martin is a greater Idiot than The Oracle.

#157 Shawn on 06.28.14 at 7:14 pm

I recant and renounce my post at 144 since I now realize Keith at 75 did indeed say he would renounce Canada. Good luck with that. If true, that would seem a serious mistake.

Perhaps he can enlighten us on the reasons to renounce citizenship as opposed to merely leave and also where he intends to live and get citizenship.

#158 cynically on 06.28.14 at 8:23 pm

#129 DreamingInTechnicolour – I wish your post had been submitted much earlier so that it had been slotted in the first twenty or so postings, thereby letting most of us, including our genial(?) host read this Vancouver Sun article. The article’s writer is a man with legitimate credentials who along with some other supporters believe the foreign money argument as to our extremely high home realty prices at least in Vancouver and probably Toronto to a lesser extent. It is not a racist argument but a factual one!

I saw precious few facts in there. — Garth

#159 Andrew Woburn on 06.28.14 at 8:26 pm

Am I the only one surprised by this?

Atlas Van Lines – Where people are moving to and from

https://twitter.com/prchovanec/status/481865888375644161

#160 sean on 06.28.14 at 8:34 pm

Worry about this: the vast majority of Canadian mortgage are full recourse loans. Whereas in the States a home buyer who incurs mortgage debt can walk away from an “under water” mortgage and the lender’s only remedy is to foreclose on the home and sell it, in Canada the owner remains liable for any shortfall. This is because in Canada Mortgages are personal loans, supported by the home as security. A home owner in Canada is obligated to pay back the lender under almost all circumstances. Handing the house keys to the bank does NOT relieve the debt or end the liability. Even if the mortgage is insured (thus solving the bank’s problem – it’s good to be the bank!), the owner can be pursued in the courts by the insurer.

This may come as a rude shock to many Canadians who are currently living high off the hog with huge, low-rate mortgages and who have a cut-and-run strategy planned as a result of watching the mortgage mess unfold in the U.S. after 2008.

#161 Andrew Woburn on 06.28.14 at 8:43 pm

#153 Mister Obvious on 06.28.14 at 5:13 pm
#151 Andrew Woburn

If I make it to my eighties and even beyond, I expect that at least some of my care (if and when I need it) will be provided by one or more specialized robots.

It has to happen. There will simply not be enough young nurses arriving from the Philippines to deal with the imminent tsunami of geriatric boomers.

Perhaps we should look at it as a great investment opportunity?
============================

Probably like you, I am a great fan of the cheerful, competent Filipinas that looked after my parents so well.

I agree that the eldercare robots being developed in Japan will probably be a good investment but I prefer the Filipinas.

My greatest fear is that, by the time I need them, geriatric services will instead be provided by embittered poli sci and gender studies B.A.’s who couldn’t make the cut for the handful of positions still available at Walmart.

#162 Nemesis on 06.28.14 at 9:04 pm

#WhatDreamsMayCome. #SaturdayNightEthanolFueled. #’Techno’Mix. #ForNetCentricSaltierDogzOverlookingInnerHarbours. #&OtherFuturologists. #WhoEnjoySpeculativeFiction.

#1-ChillaxTwilightOfTheDogz. #It’sBeenGamedBefore. #AlwaysEndsTheSameWay. #HowAboutANiceGameOfChess,Instead?

http://youtu.be/NHWjlCaIrQo

#2-WhoNeedsMailOrderBrides? #WhenYou’veGotReplicants?

http://youtu.be/yWPyRSURYFQ

#Writer’sWorkshopForSmokingMinds. #WhatDoesItMeanToBeHuman? #ThereIsOnlyOneBasicPlot… #”WhoAmI?” #Chillax,SmokingMan. #It’sJustPinocchio. #UpgradedForThe21stCentury.

http://youtu.be/ECGnWoQgz6Q

#BonusZen! #IfYouRememberTheMoves. #You’reDefinitelyNotMillenial.

http://youtu.be/yQ2KBILIu-4

#163 Smoking Man on 06.28.14 at 9:05 pm

#155 Son of Ponzi on 06.28.14 at 6:23 pm

Holly crap, 143 can write…..

I’m seriously considering rehab, just need to find a place that deals with.

Gambling
Drinking
Smoking
Hill Billy pops
And short term rental addiction.

#164 Smoking Man on 06.28.14 at 9:14 pm

At the lady Gaga concert her in Atlantic City… Listen to two songs, said to wife… UCC, AK little voice in one’s head said…

Go north young man.. Play Mississippi Stud…

Bye lady Gaga, you suck,

#165 Nemesis on 06.28.14 at 9:36 pm

#BonusBonusZen! #Mr.Roboto. #GleeStyle. #BetterThanRehab,SM!. #CountingStars. #IsALotLikeCountingYourBlessings,Marcel.

http://youtu.be/zfAwpVxnSYI

#166 Pope Sexsixpackkitten Snugglebums the 666aq (aka Nosty) on 06.28.14 at 9:41 pm

Cracker of a goal today by Columbia’s James Rodriguez in their win over Uruguay, equal to Robin Van Persie’s diving header in Holland’s first game against Spain.

#156 Humpty Dumpty on 06.28.14 at 7:06 pm — “Collapse of Democracy in Europe” Sounds similar to what is happening here — three separate links joined by one sentence from the first link — UN Agenda 21, Trigger Event (coming) and UN GoM Oil Spill. Sentence: “Peter Sutherland is not just the architect of the Gulf Oil Spill, as you will soon note, he will be behind what is coming with the United Nations take down of the United States.”

What do all these immigrants do? Having Riots in Sweden is one option (not recommended), or possibly this would go with the preceding and above. Kinda sad that most sheeple cannot see the forest for the trees, and it’s getting to be a real nasty world out there. Meanwhile, the US (and Mossad) are cleaning up nicely.

Auctioning Bitcoins Guess they must be legal tender now. BTW, guess where this is. The answer’s on the pic.

#167 Nemesis on 06.28.14 at 10:13 pm

#TripleBonusZen. #Tonight’sLast. #ForDisillusionmentPlotSmokingMen. #GaGaGoesRodgersYVR. #JustDance.

http://youtu.be/tG6gnNnpRAI

#168 bigtown on 06.28.14 at 10:29 pm

I grew up in Northern New Brunswick in the late 50’s and 60’s and my dad worked six days a week and paid cash for everything and he NEVER HAD A DEBT OR CREDIT CARD. Of course, we lived way below our means but most of the town lived like us. Church was recreation and because it was free…you went. All the kids went to some church catholic or protestant.

Today I spent driving around my neck of the woods REXDALE AND VAUGHAN doing my shopping and the roads were totally empty like it was a big snow storm. I mean it’s only Saturday and you would imagine that up on 7 where it’s always bumper to bumper in Vaughan that folks would be out shopping but it was so creepy like those action movies Tom Cruise is doing now. Anyway I got to the Chapters and the STARBUCKS which usually has a line to kingdom com had 7 barristas and I was the only one there and there was no line at the Chapters cash. People are not driving at $1.41 per litre they are staying in their backyard and BBQing.

#169 Smoking Man on 06.28.14 at 10:43 pm

At the bar, a bond, sexy, medium sized.

Her boy friend, pink shirt, man purse.

Got Johnny Cash on the buds…

I decide, I’m going to grab one, not from the perspective of a thrill, wanted to know what pink shirt would do.

My hand is in motion, corner of the eye, Mis smoking man.

I abort the experiment…

I Could handle pink shirt.. My wife, hell
That’s the next book.

#170 Tom from Mississauga on 06.28.14 at 10:49 pm

First, breath and relax. People that worry too much will make bad reactionary decisions. List the pad and load up on financial assets in TFSA and non-registered accounts. Need a place to stay? Try this. Then stop worrying. Its gonna be what its gonna be.
http://www.kijiji.ca/v-house-rental/moncton/new-start-5mintrinity-center-nbcc-udem-utilities-can-be-inc/1000637515?enableSearchNavigationFlag=true

#171 BRands on 06.28.14 at 11:14 pm

#10 Net centric – great post. I often reflect on the same thought. We are, and have been, quite fortunate, indeed – as many great civilizations were in their prime.

Prepare for the worst and enjoy the awesome that we currently have.

#172 Smoking Man on 06.28.14 at 11:25 pm

She goes where you from, I say Canada,

She says “I hope you’re not driving.”

Man purse is slight anoid

Do these Americans even know goggle maps…

I’m thinking I’m working two PHD

#173 Shawn on 06.28.14 at 11:35 pm

No Credit Card in the 50’s and 60’s?

Bigtown at 169:

I grew up in Northern New Brunswick in the late 50′s and 60′s and my dad worked six days a week and paid cash for everything and he NEVER HAD A DEBT OR CREDIT CARD.

******************************************
Well, bank credit cards were only invented in 1958 with a big unsolicited credit card mail out by Bank of America in Fresno California and surely had not reached Northern New Brunswick by the 60’s, let alone the 50’s. Chargex (now Visa) arrived in Canada in the late 60’s as I recall.

Not sure when gasoline credit cards came out, they were credit only for one type of gas station and came before general purpose credit cards.

AMEX was around but it was a charge card to be paid at the end of the month, not a revolving debt card.

If Dad never had a debt he was very unusual. In fact people tended to have little charge accounts all over town in the 50’s and 60’s. Every retailer sold on credit in those days. Debt has been a fact of life for the entirety of modern human existence.

100,000 years ago you borrowed food from a fellow hunter and you paid him back (Or no doubt he paid you back for not paying and did so in an unpleasant way).

In the beginning debt was a way to keep from starving on weeks when your own hunt was unsuccessful.

Today, the wise use of debt can mean borrowing for a car (perhaps needed for a job) or borrowing for a house at age 30, rather than saving up and getting one only at age 55.

Debt and credit are the great grease of the economy. If you think debt is bad, try living someplace where credit and debt are absent. You won’t like it.

If in fact debt was rare in Northern New Brunswick in the 50’s and 60’s that was not necessarily a good thing. Might have should have borrowed some money and replaced that “two holer” out back with an indoor toilet a bit earlier.

I suspect the Irvings and the McCains used debt from the start to grow their empires in New Brunswick.

#174 Basil Fawlty on 06.28.14 at 11:45 pm

Rexx Rock #99 “every one should read Market for Liberty,its free on the internet.”

I read it in paperback tweny years ago and still think their premise that free markets can police themselves, is nonsense. In my opinion, the achilles heal of the Libertarian, self policed capitalism argument, is global climate change. Of course, the “Market for Liberty” true believers take the easy way out and just deny climate change is occuring.

Then again, I think Ayn Rand was a ding dong, so what could I know?

#175 4 AM Sunrise on 06.28.14 at 11:58 pm

Vancity has an escalating rate term deposit promising 3.05% in year 3, and a 5-year mortgage at 2.99%. I see other fixed-rate mortgages going for 3% and up, so I guess that’s how they’re playing this shell game. It looks weird to me. When I was growing up, mortgage rates were higher than deposit rates, and the bank pocketed the spread. That made sense. They must have some kind of interest rate collar or something going on to cover their ass on this one.

https://www.vancity.com/Rates/

#176 Nemesis on 06.28.14 at 11:58 pm

#GoodMornin’,SaltierDogz. #YourMission… #ShouldYouDecideToAcceptIt… #DreamBigLikeDr.Frankenstein. #WhileYourDoin’That. #LiveHumble,LikeIgor. #InBetween… #TryToShagInga[TeriGarr]. #Also,BeSureToInstallTheRightBrain.

http://youtu.be/yH97lImrr0Q

#177 Longterm on 06.29.14 at 1:05 am

#147 4 AM Sunrise on 06.28.14 at 3:02 pm

You aren’t missing anything except fear.

On long term care, not everyone ends up needing it – not one of my relatives has ever been in long term care. I’d like to see stats on the % of oldies who end up in a care facility and for how long.

In any event, if you reach that point in your life then you’d better have had all of your experiences as long term care is really just a stopping point on the the way to the grave.

More likely you’ll die before you need it or only need it for the final year or two. Or alternatively do like everyone else in the world does and has through history before the commodified old age. Live with your kids. Or if you don’t want to burden them, move into care in a more affordable country.

The basic point is that anyone who lives their life in fear of the final few months or years isn’t going to have much of a life.

Think about how much quality prime life is wasted getting ready for work, commuting, working, coming home and de-stressing, most to buy stuff to fill a void or to banish fear. The key is to separate wants from needs, minimize your material needs and as quickly as possible build up a portfolio to cover these through passive income and then slow down or stop the work and associated wasted time. Then use those precious, reclaimed prime time hours to really live and experience rather than trade them for rump hours at the end of your life or for more money so you can waste away in a bed and have your diaper changed and then die with money in the bank.

#178 Nemesis on 06.29.14 at 1:10 am

#BonusBreakfastZen #”AllOrNothing” #Season4:22 #TheInterview #BrittanyMakesM.I.T. #6.62606957 × 10-34 m2 kg / s #DreamBigSaltyDogz

http://youtu.be/krVFjZpND8s

#179 Nemesis on 06.29.14 at 1:38 am

#BonusBonusBreakFastFootieZen #JustForNosty #SheffieldUnited #WhenSaturdayComes #BonusPlotPointsForSmokin’MenWithPens

http://youtu.be/LxrrOxvVHF0

[NoteToGT: Just between the two of us… I’m more of an Arsenal supporter. A proximal thang. Something to do with its roots. BelmarshSuperMax. Woolwich.]

#180 Cha Ching on 06.29.14 at 1:56 am

Poor New Brunswick reader. He could have taken advantage of the rise in Canadian real estate prices across the board to buy a bigger home and would have ended up with a $100k gain instead of a $100k mortgage.

Everybody knows that it’s impossible to make money by depending on salary and raises.

How are they doing it? Easy. They bought bigger and better homes that have appreciated by a larger margin while your old shack and flatline salary have been left behind.

#181 juno on 06.29.14 at 4:46 am

Just read a comment from I believe #160 about the difference between US and canada default mortgages.
Its interest me so I did some searching.

Yes US you can walk away, I was surprise that you can’t do the same in Canada. Ouch, so if things go south
your life is over, mind as well throw in the towel and collect social service cheques for the rest of your life cause you will be burden with debt for the reminder of your life. Wow that is what I call blind risk

http://www.financialpost.com/personal-finance/Underwater+mortgages+When+just+walk+away/4576374/story.html

#182 Tiger on 06.29.14 at 9:06 am

Fracking, not cracking!

#183 jess on 06.29.14 at 9:07 am

gate keepers

…”We are building the exchange of the future using a bold new blueprint that offers a common sense approach to trading and raising capital; that uses technology to empower and unlock rather than discriminate and deceive; and that rewards those who capitalize and invest based on sound strategy rather than those who exploit structural loopholes,” said Jos Schmitt, president and chief executive officer at Aequitas Innovations Inc.

Aequitas was proposed by Royal Bank (TSX:RY), BCE Inc. (TSX:BCE), Barclays Corp. Ltd., Canadian pension fund PSP Investments, and a number of Canadian and international brokerages in June 2013 as a rival to the Toronto Stock Exchange and other markets owned by the TMX Group (TSX:X).

…”It also argues for a “hybrid book” which allows some bid and ask prices not be shown to the public, with access to trades restricted in some cases…” (cbc)

#184 Rob Ford In Rehab on 06.29.14 at 9:09 am

I’m comin’ baaa-aacccckk!!

Hello Ford Nation!!!

I have fired the conductor of my personal gravy train and lost over 35 lbs!!

Who says I can’t do the same with Tronna?

By the way, anybody notice the forecast today for the pride-thingy parade? Showers and lightning!
Downtown latte-sippers get soaked and electrocuted, ROTFLMAO!!!!

For my return tomorrow? Sunny skies :)

Talk about raining on your parade, eh, Kathleen!

God is a dues-paying member of Ford Nation!

Tronna, here I come!!!!!! Wooooohooooo!!!!!!

#185 Doug in London on 06.29.14 at 11:17 am

I don’t know what Marcel’s complaining about, with a generous salary of 115 grand in a place where housing’s quite cheap. A lot of people would love to have his “troubles” if you want to call it that. He’s actually not doing too bad. For example, the Heinz plant in Leamington has scaled back its operations, and of the 250 or so employees left they are making a lower wage than before. The other 500 or so people are out of a job, and who knows if or when they will find another job, almost certainly at lower pay. Would Marcel rather be in their shoes? Man up, save more of your income, get that mortgage paid off, build up a portfolio of investments and don’t worry about “everyone else” with their big houses and expensive SUVs.

#186 ah you know on 06.29.14 at 1:07 pm

115k – 40% (taxes) = 69k = 5700/mo – 850 = $4900

100,000 / 3000 = 33months = 2.7years

using a $1900/mo budget for luxuries, food, home repairs, hydro, i have paid off your mortgage in 3 years.

perhaps i am off with the taxes, but at 50% taxes a year, and a 1500 budget, it would take only 3.4 years of dedicated saving to pay off your mortgage.

That is why many people here, i think, have no sympathy. I never have had and most likely never will have any sort of pension. This persons fears, everyone has them because of the age we live in. I would happily trade positions with him economically.

#187 Mister Obvious on 06.29.14 at 1:40 pm

#178 Longterm

Even thought your comment is slightly less than uplifting there is little in what you’re saying that I could disagree with. Except the part about the option of living with your kids in the very last years.

If dementia is involved, I would strongly disagree. You can’t ‘live’ with someone who has severe dementia. And dementia usually does progress to the severe stage.

Dealing with dementia is a full time job. It needs to be handled by shift-working professionals in a safe and proper environment. It needs to be handled by people who can go home after a hard day’s work and think about something else.

Having relatives attempt this job while simultaneously attending to all their other life responsibilities is a recipe for disaster. I’ve been a witness. It’s not pretty.

#188 Entrepreneur on 06.29.14 at 2:35 pm

A comment from a private sector employee that was in the local newspaper:

“We would all like to have ideal staffing levels, and more operating funding and better pay. But we have to deal with our employer’s limits. (talking about BC Teachers strike)

As a taxpayer, I am at my limit. I can not afford for this government to bring any more money to the table for you.

Don’t you ever stop to think about where your paycheque really comes from. Hint, that would be all the rest of the working people in this province.”

Well said. Marcel needs to know where his paycheque is coming from.

#189 Andrew Woburn on 06.29.14 at 2:59 pm

#182 juno on 06.29.14 at 4:46 am
Yes US you can walk away, I was surprise that you can’t do the same in Canada. Ouch, so if things go south
your life is over, mind as well throw in the towel and collect social service cheques for the rest of your life cause you will be burden with debt for the reminder of your life.
======================

Or you can leave the country. People used to come to the “Colonies” to leave debt behind. Now they will probably move to Asia.

#190 Habs76-79 on 06.29.14 at 3:12 pm

#173 Shawn.

It’s not that credit and the debt it leaves is right or wrong. It’s how one uses credit. I said in a post the other day that credit and its debt incurred is an exchange of freedom for obligation. There are things where one may really need or feel a need to use extended credit for in life. As you said maybe an automobile, which is for most today a real necessity in life. But that does no mean one buys more auto than their income truly can support repayment of said debt. Ie: 6-7-8 year car loans to get whatever “lust mobile” you allow your emotional side to sell you. But assessing the value of auto ownership to needs and yes wants and thus borrowing a more appropriate amount if you feel you need a car that requires a loan. One can often buy a used car cheap enough with cash at hand if they have some.

Credit to fund a business venture, to help bank roll your own business is a wise use of credit. But that does not mean one does not follow due diligence in the funding and operation of said business.

Credit to purchase housing can be acceptable in a proper market conditions and where you do the math to see if what you are buying on credit is affordable even in the future if say your home income were to suffer. Buying housing to speculate is a dangerous game and in a market where the prices have exploded well above inflation and are thought by many above top of the market will probably hurt you badly later on.

Credit used to say perform a required house repair oh, roof repair or a foundation repair may be acceptable because you are using it on something you already have a lot of money and credit invested in.

But using credit to buy all too many things you do not need, may not truly afford and may not really think through before putting on credit. ie: buying a various lot of electronics gear, fashions, fancy crap for bling on your home, etc. you really could not afford but have the credit available to buy is likely a bad exchange of freedom for obligation.

This is the problem with easy credit, many use it too much and without true thinking. Wants and desires can really hurt your future and even bankrupt you if you allow your emotional mind to shut up your logical mind. Exchange of freedom for obligation as such may not be one that you enjoy tomorrow.

No, credit and the debt incurred is not of itself a problem, but what you use credit for and how you use credit, including piling it on thick will likely kick you in the proverbial teeth. This exchange of freedom for obligation can become a stress maker, a relationship killer and one that may not be worth the bother to carry as all too often the crap bought on credit is, once the novelty wears off, is not really valued nor appreciated but soon dumped to buy more crap on credit.

#191 Jimbo on 06.29.14 at 3:22 pm

Hi Marcel,

e-mail this to your friends when the time comes.

http://dontloseyourhome.ca/prevent-or-stop-foreclosure-in-canada-and-stay-in-your-home.pdf

#192 Mark on 06.29.14 at 3:28 pm

“Vancity has an escalating rate term deposit promising 3.05% in year 3, and a 5-year mortgage at 2.99%. I “

From your link: year 1, 2, 3 = 1.55, 1.70, 3.05%
Which is 2.10%/annum.

Lots of people won’t even qualify for the 2.99% rate on their 5-year mortgage, but for those that do, if they fund that with 3-year money, they’re still earning quite a healthy spread (ie: 0.89).

Lots of GICs don’t even get carried till maturity either, and those that do, often people will forget to renew them so they sit matured but collecting no interest. Same deal with mortgages, especially at a Credit Union which doesn’t have nation-wide opportunities to ‘port’ such a mortgage (unlike, dealing with, say, RBC, which operates coast to coast!).

#193 Mark on 06.29.14 at 3:33 pm

“Worry about this: the vast majority of Canadian mortgage are full recourse loans. Whereas in the States a home buyer who incurs mortgage debt can walk away from an “under water” mortgage and the lender’s only remedy is to foreclose on the home and sell it, in Canada the owner remains liable for any shortfall. “

Nearly all loans in the USA were full recourse as well. The criteria for “non-recourse” was extremely limited in the USA and applied only to purchase money loans (ie: not refinances). And applied only to the first mortgage.

The consequences in the USA were the same as in Canada for non-recourse loans — personal liability.

I have not seen any evidence that suggests that true non-recourse “walk-aways” were even the slightest bit of a factor in the US RE crash.

Technically non-recourse applies in Alberta, but just like in the USA, the criteria for such is so very narrow that its mostly a triviality we’re talking about.

#194 Maggie the Tech Writer on 06.29.14 at 4:24 pm

I really must object to the rather hasty and rather harsh responses to Marcel’s situation.

For one thing, he reported his household income as $115. As he and his wife both work, this does not suggest to me that either of them is earning the “rather generous salary” on which one blog dog commented.

For another, he cited a situation that the doom boys here regularly wail about: costs are going up while family income is not. (Many of you complain about rising costs and taxes very tediously.)

While the lavish spending he sees around him is leaving him doubtful about how well he is doing, he is also concerned about what it says about New Brunswick (and Canadian) society. Looking at the bigger picture and being concerned for one’s homeland is not a bad thing to do, as long as it doesn’t result in depression and paralysis.

I’ve read that people are unhappiest in their 40s, and Marcel is approaching that dangerous decade, so that may have something to do with his tendency to worry.

I’d suggest that he analyse his household spending to make sure that he and his wife are making the best use of their income…and, by that, I mean spending on things that make them happy and that last. (A concert, a play, a trip all last; a refrigerator doesn’t.)

I would also suggest that he take a deep breath and think about the good things in his life, including his and his wife’s shared-risk pension, to which their employer still contributes, even if their own required contribution has risen.

Then I would second the blog dog who urged him to have a beer and make love to his wife. That’s what it’s all about in the end.

#195 SHELTER THE MONEY NOT THE PEOPLE on 06.30.14 at 4:26 am

Marcel:
Maybe you are suffering from a bit of “Facebook Crafting”.
This is where everybody you see is putting their best face out there and you see none of their problems and pain.

#196 Doug in London on 06.30.14 at 11:59 am

@Maggie the Tech Writer, post #195:
I for one said 115 grand was a generous salary and still believe it. Oh sure, that’s total with both working, but a couple living under the same roof have economies of scale that a single person like me doesn’t, and I’ve NEVER made 115 grand but still managed to build up a portfolio. Also, why would age in the 40s be unhappy? I found youth to be more stressful, but by my 40s had a more stable career, had built up a portfolio, and was happier than ever before. Life may not begin at 40, but gets into high gear by that age. Again, Marcel is really not doing that bad.

#197 Doug in London on 06.30.14 at 12:20 pm

further to my comment #197, look at this link:
http://www.mrmoneymustache.com/2014/04/06/frugal_living_in_manhattan/
If someone can live on 65 grand a year in outrageously pricey Manhattan, it shouldn’t be that hard to live comfortably on 115 grand in New Brunswick.