It’s not working

VETTE modified

Every year the feds spend $13 million on financial literacy. We have a Financial Literacy Leader (bureaucrat Jane Rooney). We’ve got a federal Task Force on Financial Literacy. Last week Joe Owe gave a speech pushing the now-in-development National Strategy for Financial Literacy. There’s a national financial literacy department, called the Financial Consumer Agency of Canada. It has 75 staff. The salaries cost $7.5 million.

And yet 51% of Canadians say they’d be screwed if their paycheque was a week late. Seven in ten own houses carrying $1 .2 trillion in mortgages. Half of near-retirees have saved peanuts. The bulk of TFSAs are in cash. Most people think RRSPs are products you buy. Four in ten have trouble paying the monthly. And the savings rate – which was 20% a generation ago – is a piteous 3%.

Obviously something’s broken. The bulk of Canadians appear to be financial dolts. Household debt is off the charts. The average house down payment is just 7%. Half of Boomers figure they’ll run out of money. And Ottawa’s solution is videos on how to finance a flat-screen TV or earn interest in a tax-free savings account. Sheesh.

Of course, indebted, budget-challenged, investment-poor, house-fat, stressed-out consumers mean the economy’s kinda screwed, too. That’s what central banker Stevie Poloz worries about – because when the credit bubble pops and our lines of credit are maxed, it’s bad news in a country where 65% of the GDP comes out of your wallet.

JANE modified  So what’s Jane Rooney doing about it? Well, she has 263 LinedIn connections. She’s a member of the OECD’s International Financial Education Network. She sits on the Advisory Board on Financial Education, and she chairs the Canadian Interdepartmental Committee on Financial Literacy. So there. If you’re still a financial heathen, suck it up. Jane’s busy.

Meanwhile there is another approach, which is one reason his pathetic blog exists. Yes, I admit I started this site just to flog books and impress women, but that got tired fast. So now it’s here to yak about stuff that affects all our lives, impart some of the things I’ve learned and, especially, to irritate realtors, mutual funds salesguys, bank employees and bullion-lickers.

Rabi gets it. If you can believe this, he’s just read all of the 1,808 posts published here. That’s about 1.3 million words, or the equivalent of 23 full-length books. And that doesn’t include the comments, as no human alive could actually get through them (304,584 at the moment), at least without surgery.

“I have now completed your blog from its start in March 2008 to the present,” the poor boy writes me, “and feel I have obtained a superb education in real estate and personal finance. However it is easy to get all the numbers confused.”

Of course it is, Rabi. Numbers are hard. Ask Jane. But he has an idea for us all.

“I was wondering if it is possible to ask your dogs to submit one multiple choice question at random with the (correct) answer. I would attempt it all myself, but It would be a lot of work for one person. Kind of like when the dogs submitted their financial profiles and the CRA used your office as a campground. This idea might only attract the CBC who would diss you for trying to steal their thunder with their new quiz show.

“The new CBC show “The Smartest Canadian” kicks off Sunday nights — there may be a bit of room left over for “The Smartest Financial/Real Estate Blog Dog.” —where answers could be found somewhere in your blog.”

Well, let’s go one better. Let’s chip in and design a financial literacy multiple-choice, fun-filled quiz that Jane and Joe can use to school the teeming masses of GIC and granite-swilling, house-horny grunts. Gratis. Our little contribution to saving the nation.

Rabi has an example:

“I would submit a question such as:

1. In Canada, the national savings rate has dropped from about 13% a decade ago to about 3% today, with the exception of one province, where the savings rate is actually negative. That province is:

a. Ontario
b. Quebec
c. BC
d. PEI.

Correct answer is:

c. BC – the savings rate is actually around minus 7%. That means they have to borrow just to make ends meet!  BC really does stand for please “Bring Cash”.

I like it. So over to you for some Q&As. Ms. Rooney needs you. Bad.

208 comments ↓

#1 Danforth on 09.30.14 at 5:08 pm

Q: Is an RRSP used for tax avoidance or tax shifting

a) Tax avoidance, as you get money back at the end of the year
b) Tax shifting, as you pay income tax when you withdraw the money later in life.

answer
b)

#2 FLAWED on 09.30.14 at 5:12 pm

Correct answer is:

c. BC – the savings rate is actually around minus 7%. That means they have to borrow just to make ends meet! BC really does stand for please “Bring Cash”.

I like it. So over to you for some Q&As. Ms. Rooney needs you. Bad

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

It certainly does not help that there are thousands and thousands of part time earners who park their money overseas, never pay taxes on it while their wives and kids are busy sucking on the public teat with healthcare, education, public roads, public parks, public pools and rinks and many other public services.

These services are paid with INCOME TAXES. Not 7.5% PST like what they pay when the husband sends back 100K for wifey to buy a “not made in Canada” BMW, Mercedes or Lexus.

No….those services are paid for with people who LIVE and WORK in BC outside of HAMcouver. I live here, know high net worth bankers and see it everyday……

Just sayin……..

#3 Danforth on 09.30.14 at 5:13 pm

Q: Can I spend my RRSP tax return and go to Cuba?

a) You can spend it, after all you invested your contribution and it will grow with time.

b) No, in order for RRSP investments to compete against TFSA (untaxed growth) or non-Registered (lower taxed for cap-gain) investments, the tax return must be invested as part of the principle for the following year.

answer b)

#4 FLAWED on 09.30.14 at 5:15 pm

Meanwhile the phony global warming scam continues….

http://armstrongeconomics.com/2014/09/30/australian-scientists-caught-rigging-climate-number-to-fake-global-warming/

#5 Sign of the Times on 09.30.14 at 5:19 pm

For those of us looking to improve our financial literacy with a career change look at all of the reasons this Realtor loves their profession! http://dinani.ca/blog/78866-3+reasons+i+love+my+profession.html

Will be interesting to see what happens to these “used home salesmen” when the prices and volume of sales drop to more representative levels. Will this fellow still love it then?

#6 LadyInWaiting on 09.30.14 at 5:21 pm

If I remember correctly, one of your other comment contributors came up with an excellent financial literacy tutorial. It would be great if you could include a direct link to it so we can use it the next time our province and teachers go on strike.

On another topic, and from a naive perspective, I wonder if this emphasis on investing for wealth (targeted more over the last 30 years or so) to the middle class is actually counterproductive to the middle class. For instance, companies make strategic decisions to reduce their workforce, change locations for cheaper labor (+outsourcing), acquisitions, with the primary purpose of being more competitive and increasing their stock share price. However, the consequences of these decisions fall disproportionately to the working poor and middle class in the form of job losses and lower salaries. Does this coincide with the erosion of wages, pensions and jobs that we have seen over the past few decades? How should it feel to try to capitalize on these company decisions by investing our retirement accounts for (face it) a pittance while at the same time suffering from low wages, non-existent pensions and fewer jobs, which (face it) have a much larger impact over a working lifetime. I would be interested in your thoughts. To me it seems like self-sabotage.

#7 crossbordershopper on 09.30.14 at 5:25 pm

a client named steve came in today, needed to do a return to get his papers up to date before he filed his consumer proposal. i said why not just stick all the card companies instead of 30 cents on the dollar, he said he felt sorry he borrowed the money and pissed it away. i laughed, steve, your a noboddy, you know that and i know that, no one cares about you, you should pay the extra amount and write off the entire debt.
to give you millionaires a little background this is hamilton, no one has money, and everyone is in debt. the people on odsp, assistance, the bounce around boys- (my definition of young guys who job is to impregnate young stupid girls in hamilton and never meet their responsibilities, never really work and smoke weed) which there are a tone.
steve is just a stat for hamilton, no job, no education, no prospects, no money and poor health.
he should of gone backrupt.

#8 Ray Skunk on 09.30.14 at 5:39 pm

As long as the teaching unions have a say in curriculum, there will never be any meaningful financial literacy taught in schools.

It goes against their best interests to have a generation able to study the numbers and realize where the money is going. Ignorance is their ally.

Needless to say, the bankers don’t want people to be financially astute, hence this Jane no-mark heading up a group nobody has ever heard of until today.

That said, this financial literacy department sounds like a good gig – I assume it comes with full freedom 55 pension rights in addition to the $100k salary. Nice work if you can get it.

#9 earthboundmisfit on 09.30.14 at 5:39 pm

Yes, but if you ignore the inane ramblings of the doofus who calls himself “Smoking Man” (BTW Champix works) the number becomes a much more manageable 100k or so.

#10 Nemesis on 09.30.14 at 5:40 pm

“Yes, I admit I started this site just to flog books and impress women, but that got tired fast.” – HonGT

Q: Who said, “Why, Sir, you find no man, at all intellectual, who is willing to leave Kelowna. No, Sir, when a man is tired of Kelowna, he is tired of life; for there is in Kelowna all that life can afford.”?

a) Garth Turner

b) Rob Ford

c) Stephen Harper

d) Dr. Samuel Johnson

e) Devil’sAdvocate

[Answer: e]

#11 Liquid on 09.30.14 at 5:45 pm

Great idea Rabi. Here’s an easy one.

What is the maximum TFSA contribution limit for 2014?

a. $5,000
b. $5,500
c. $6,000
d. $6,500

Correct answer is:
b. $5,500

It can be difficult to teach young people about financial literacy, but it’s important for the future generation to know this stuff because they will inherit this world some day.

#12 Mixed Bag on 09.30.14 at 5:46 pm

I don’t have the answers to these questions, but think these would be worthwhile questions. Off the top of my head:

– How do I find a financial advisor who will look out for my best interests?
(a) I am just starting out, what are my options?
(b) I have accumulated some considerable savings, what are my options?

– When young and just starting out as an adult with my first job, how should I invest to build my savings? For example, I can afford to save $500/month.

– I have been working for several years now, and have accumulated savings of $100,000. How should I invest?

– At what point is it financially responsible to buy a home?

– What should I include in my buy vs. rent calculations?

– I’m thinking of purchasing a home. The real estate agent has presented me with all this paperwork to sign. I’m not familiar with any of it. Do I have to sign everything they’ve presented? What am I obligated to sign? What are my obligations as a buyer?

– How do I find a real estate lawyer to represent me?

– Do I need a home inspection?

– What is fair value for compensation for the real estate agent?

– How do I find an agent who will look out for my best interests?

– I’m thinking of selling my home, the first and only one I’ve ever owned. This is my first time selling, and the real estate agent has presented me with all sorts of paperwork to fill out. Do I have to sign everything they’ve presented? What am I obligated to sign? What are my obligations as a seller?

– How do I figure out which bank account plan is best for me? (Or a better question regarding navigating bank fees).

#13 Stomper on 09.30.14 at 5:52 pm

What is the reason for land prices in Canada being amongst the highest in the world?

a Increased bank leverage
b Irrational house hornyness
c CMHC
d ZIP
e All of the above

#14 Entrepreneur on 09.30.14 at 6:00 pm

What sector moves the economy, gets the money flowing, turns the economy around?

a. big companies
b. public workers
c. small business
d. unions

Clue: Support small business!!!

b.
c.

#15 Mark on 09.30.14 at 6:00 pm

“It certainly does not help that there are thousands and thousands of part time earners who park their money overseas, never pay taxes on it while their wives and kids are busy sucking on the public teat with healthcare, education, public roads, public parks, public pools and rinks and many other public services.”

That would still be creating a positive savings rate, if saving is done by Canadians but parked overseas.

#16 Entrepreneur on 09.30.14 at 6:01 pm

The answer is “c” small business.

#17 NostyVlad the Snugglebombed on 09.30.14 at 6:03 pm

Most Cdns. are meat-heads when it comes to money. Can’t be helped.
*
#130 joblo on 09.30.14 at 10:09 am — “Geopolitical map shifting. Now that is something to watch.”

17 1/2 min. podcast “I am sure that Hillary will see this as revenge on China for standing up for Assad, but I think the primary agenda is to wreck BRICS before it fully activates in January!” wrh.com.

#95 Wicked as it seems on 09.29.14 at 11:03 pm — “. . . deflation is hugely because of inequality, banksters, corporate ceo’s, governments corrupt, wall st hucksters are sucking us dryer than ever before…”
— and —
#6 LadyInWaiting on 09.30.14 at 5:21 pm — “However, the consequences of these decisions fall disproportionately to the working poor and middle class in the form of job losses and lower salaries.”

Here are some individuals who might have something to say about these transgressions — The Removal of Money from the system plays a role here.

#18 Habs76-79 on 09.30.14 at 6:06 pm

As time passed me and I hopefully have grown more mature, I have tried to better understand, money, credit, banking, economics, politics and bureaucracy.

Finding Garth’s blog about 5 years ago now has really given me the light to want to learn more and understand more, not just from Garth’s words but often from posters here, both ones whom I have grown to respect and from the caudry of IMO idiots, blind dolts and other money morons, mostly them due to the fallacy that they believe real estate is a SURE BET all the time.

Though I do not agree with Garth on all things and at all times, I see his effort to be thoughtful, frank and wisdom-like. His blog has helped me to reshape parts of my life and finances. Though I’m not perfect (far from it LOL) nor have I not made financial and spending blunders, I do try to learn from my mistakes now. I also really enjoy the lessons and debates learned here at as Garth says his pathetic blog.

I’m in a position in my life with all of life’s pit falls to really be much wiser about (MY) money, credit, banking and financial markets including the corrupted politics and bureaucracy of it all.

I enjoy knowing things now that I once did not know or believed they were not so.

I will keep checking in here a long as Garth is kind enough to continue his blog and share his knowledge, experiences and even at times hard nosed words with us all.

#19 calgaryPhantom on 09.30.14 at 6:18 pm

Q) Which province will lead the growth for Canada in next 5 years.

a) Alberta
b) British Columbia
c) Ontario
d) New Brunswick

Answer c – Alberta will suffer with low commodities and lower Lonnie will help Ontario.

#20 I'm stupid on 09.30.14 at 6:19 pm

Here Rabi

What is the best way to use a TFSA?

A: Save the maximum amount and keep the account in the bank.

B: Save the maximum amount and invest it in Canada Savings Bonds.

C: Save the maximum amount and invest it in growth assets as part of a diversified portfolio.

D: Save the maximum amount and use the money for a down payment on a house.

Correct answer d… Just joking its C

#21 calgaryPhantom on 09.30.14 at 6:20 pm

Q) Where to invest in 2015?

a) Bonds
b) Stocks (ETFs)
c) REIT
d) Garth please tell.

Answer: D

#22 Macrath on 09.30.14 at 6:21 pm

What is money.

1) Cash – banknotes and coins.

2) Central bank reserves – reserves held by commercial banks at the Bank of Canada.

3) Commercial bank money – bank deposits created either when commercial banks lend money, thereby crediting credit borrowers’ deposit accounts, make payments on behalf of customers using their overdraft facilities, or when they purchase assets from the private sector and make payments on their own account (such as salary or bonus payments).

Answer; all of the above


This article explains how the majority of money in the modern economy is created by commercial
banks making loans.

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf

#23 Londoner on 09.30.14 at 6:23 pm

People need a video to teach them how to create a budget and you want to create a financial literacy quiz? Yeah, good luck with that.

“…indebted, budget-challenged, investment-poor, house-fat, stressed-out…

Yep, that’s how we want to keep them.

#24 chapter 9 on 09.30.14 at 6:23 pm

Ebola in the USA! That’s just swell. Maybe the clowns in Washington/Ottawa should take this a little bit more serious!!! This is not some mickey mouse virus that you feel better after having chicken soup and watching movies on the sofa for a few days.

#25 Kenchie on 09.30.14 at 6:24 pm

#144 Smoking Man on 09.30.14 at 12:50 pm

“#137 Kenchie on 09.30.14 at 11:35 amEveryone should read this:

http://www.bloombergview.com/articles/2014-09-30/carbon-taxes-don-t-kill-jobs
……….

Niavaty at its finest…. Anytime you increase the cost of running a business you lose jobs period.

In the passed when economy was to hot, BOC raised rates which caused layoffs.. To weak they drop the rate, making the cost of business cheaper resulting in hiring..

What you newly schooled don’t understand all this save the planet, tree hugging religion is a distraction from the real problem..

In the sixties a man could work a simple job, stay at home wife would rase 4 kids, have a cottage and a nice car.

The machine has you fooled thinking, 300 sqft condo is cool, I don’t need a car, that’s bad I’ll get a bycle.

Truth today the young couple can not afford kids, a car forget a house.

It’s no accident, it was planned.

But let’s go get big bad oil…idiots…”
—————
Lol. Stick to your day job… whatever that truly is.

The point of the article is that there is no evidence to suggest carbon taxes destroy jobs. In other words: one job destroyed can be another job created in another form. You’re probably feeling sorry for those humble unionized printing press workers that produce the Yellow Pages phonebook, while chastising the guy who invented apps like Yelp, Urbanspoon, and others that render unionized jobs (i.e. the one you describe in the 60s) obsolete. Just like Stelco, the 60s lifestyle you speak fondly of is no longer relevant to this world.

PS: Oil isn’t the only carbon-producing energy source.

#26 Jon on 09.30.14 at 6:24 pm

Given seasonality and market volatility, you should buy the VIX (VXX) in:

a)January-Feb
b) March-April
c) Sept-october
d)Nov-Dec

15% and counting this month suckas!

Long USD/CAD helps the trade too.

#27 Alberta Ed on 09.30.14 at 6:26 pm

Well, gosh, since we now have the Task Force on Financial Literacy and the Financial Consumer Agency of Canada, I guess there’s no need to regulate the real estate industry.

#28 Roman on 09.30.14 at 6:51 pm

How is 5-Year Variable mortgage rate is defined in Canada?
1. Queen Elizabeth II fixes it every Monday
2. Rate is voted during winter parliament session
3. Canadian government sets the rate in a yearly budget plan
4. Broker shops best rate on the street

How many houses can you buy in equivalent US location after selling one in Canada?
1. One semidetached
2. Four
3. Five
4. Zero – Canadians are allowed to buy houses only in Canada

#29 Shawn on 09.30.14 at 6:59 pm

Dogman01’s list with a bit more color

I saved an old quote from you several years ago:

1960 Dad worked, Mom stayed home, 5 Kids, no debt.
some added detail…

*** House was 1000 square feet tops, one bathroom and often drafty, a fire trap. Mom worked like a dog cooking, cleaning and mending. Mom was stuck at home – no car. No dishwasher. Wringer washer, hang cloths on the line. (less fun than it sounds) By age 50 Mom looked like today’s 75 year old woman. Mom was driven insane by no contact outside the house. Smoking and tranquilizers got real popular. The car was a clunker. No one went on vacations except maybe in a tent. Staying in a Hotel was unheard of. Eating in restaurants was unheard of Fast food was almost non-existent in Canada. TV consisted of two channels. Bingo was real popular. They would have gladly borrowed more money but there were few lenders. They did in fact have a mortgage though.

1970 Dad worked, Mom worked part time, 4 Kids, no debt.
1980 Dad worked, Mom worked full time , 3 Kids, a little debt.
1990 Dad worked, Mom worked full time , 2 Kids, more debt.
2000 Dad works 2 jobs, Mom worked full time , 1 Kid, tons of debt.
2010 Dad works 2 jobs, Mom works 2 jobs, No Kids, absolutely broke and in debt.
Today why is it that with our great educational system, and with all the kids with degrees why can’t they see they have been shafted? – Smoking Man

************************
Yeah back in 1960 just like today there were winners and there were losers. The losers whined a lot.

If anyone wants to go back to 1960 be my guest.

I guarantee that while Dad might be okay with it, Mom ain’t going near it. Women today don’t have four kids because they simply don’t want to it’s too much work. In 1960 there was no pill and no abortion and generally not much choice. If you think stay-at-home Mom in the 60’s or 70’s was a life of leisure, you don’t know what you are talking about.

#30 james on 09.30.14 at 7:02 pm

#2 FLAWED

Point taken, as the lack of income tax does mean that they are not paying for certain services.

Many municipal services are paid for by property taxes, however. Offshore income earners (e.g., the guy working in Hong Kong and keeping the kids in Vancouver) will still pay property tax on their dwelling.

My father, an education psychologist for a lower mainland school board who was born in Hong Kong (and speaks Cantonese) knows that this is not uncommon. Why? Because he has to assess kids all the time, and that involves learning about their family situation and influence in the home. The other entertaining story (not related to taxes) concerns the sheer number of children whose parents are doctors, lawyers (etc) who never spend time with their children.

#31 Setting the Record Straight on 09.30.14 at 7:03 pm

Yessterday Garth wrote

Worst, lower incomes make debt harder to pay – so it’s the people with big mortgages and the countries with fat national debts – who take it in the gut.

and

#19 protea on 09.29.14 at 6:39 pm
Scary business , a banks nightmare, each dollar becomes worth more in purchasing power, the cost of carrying debt increases, putting more pressure on borrowers and governments. Meantime the value of real assets drops. Lets hope it never cames to that, having nightmares already.

******
So the theory is lets reward people and countries with
excessive debt by promoting inflation. Encourage moral hazard because the central bank will bail you out.

The cost of carrying debt — does it increase? If yourincome and interest rate are unchanged, while consumer prices have declined, you have more purchasing power.

If interest rates are the sum of the real rate and the inflation rate, then if the inflation rate declines or turns negative, then the nominal rate for new debt should fall.
So with everything else constant, on refinancing, we would exepct the consumer to be better off.

Of course we are ignoring the efforts of central banks to distort and repress interest rates to stimulate economies.

Remember, Keynes proposed inflation to conceal real wage declines from the stupid working class who would be unable to decipher and understand the implications of setting their wage rate in nominal rather than real terms. Inflation for Keynes was about reducing the standard of living of workers.

So what is the issue? An economic cycle of producing unemployment, lower profits and falling incomes. And central banks in the US have been trying constantly stimulate economies until we reach the point where the medicine is worse than the disease.

#32 Danforth on 09.30.14 at 7:03 pm

How much money do I need to retire.
Assume retire at 65, live to 85. Currently earn 50K a year. House is paid off, invest 10K a year.

a) CPP and OAS will cover my bills, after all – I have the house
b) I will keep a part time job in retirement at 16 hours at $10 buck an hour to augment CPP and OAS
c) $200K
d) 50% of current income x 20 = 500K
e) 80% my current income x 20 = 800K
f) 100% my current income x 20 = 1M

answer e) is likely closest to reality
Most retirees spend MORE money in retirement than during working life.
The subject currently lives off 80% of income, which he/she doesn’t need to invest post retirement.

answer f) will give a bit more buffer for higher life expenses due to healthcare.

#33 Ripped on 09.30.14 at 7:06 pm

Save?

Saving used to get a BB something when he was young, but it won’t get you squat nowdays.

#34 james on 09.30.14 at 7:07 pm

#19 calgaryPhantom

Who is this ‘Lonnie’ fellow and how is he going to help Ontario recover from ballooning deficits and a government run by narcissistic, thieving incompetents?

I have no hope for Ontario. Much of the ‘economic’ activity in Toronto centers around housing, retail, finance, insurance and government. Much of that depends on inputs from natural resource production and housing, both of which could be in trouble. And that’s not even taking into account the lunatics that are ruining the province financially.

#35 Dead Fall Market on 09.30.14 at 7:08 pm

Spoke to a few veteran realtors and mortgage brokers, the market is DEAD. They say it is really slow and listings are sitting forever…. its quite obvious now that the top is in and buyers are not willing to plunk $700,000 for a beat up semi-detached in Toronto.

Can’t wait to see how CREA and TREB try to fudge their numbers on the next report…

#36 Danforth on 09.30.14 at 7:18 pm

When should I start using an RRSP as an investment vehicle?

a) Its always a good time to put money in a RRSP
b) If your company has a RSP matching program
c) Only use an RRSP if you can reasonably predict that at a future stage of life you will be in a lower tax bracket (or 2 brackets lower) than today.

answer, b and c.

b) Never give up free money. Even if you are in a lower income bracket, the fact that the money is free offsets that. Take it!
c) A person early in their working life at 12$ an hour, managing to save 100 a month, should not be doing a penny in RRSP – but purely TFSA. This person is in a low tax bracket, and will ONLY end up in higher brackets.
RSPs are for tax shifting from high-bracket years to low bracket years.

#37 Roman on 09.30.14 at 7:22 pm

If you buy 10 Years US Treasury Note with a coupon 2% and the rate goes up to 3% percent, how much would you make on your investment?

a) I like Tim Hortons and going to make 5% (2%+3%)
b) I like hockey and going to make 2.5% (average of 2%+3%)
c) I like maple syrup and going to make 23% percent over next 2 years since I just bought a house
d) Canadians are allowed to buy only Treasury Notes from Canadian Government

#38 crowdedelevatorfartz on 09.30.14 at 7:22 pm

When discussing money, budgeting, and retirement investing with financially illiterate friends, coworkers or relatives is it better to:
a) Drool and feign a slight stroke.
b) Impress them with your intellect and knowledge.
c) Recommend the Greater Fool and Garth’s books
d) Silently pass wind and chase them away.

I must admit I’m a tad biased.
“d” no “c” no “d” no…… well you’re all smart people if you still come here and read Garth’s sage advice so I’d have to say “c”.
Humour and financial advice all in one package is a win win.
Keep up the good work Garth.

#39 David Lee on 09.30.14 at 7:23 pm

Seems like the handle “Joe Owe” is going to stick to our current Finance Minister.

Can we give “Deceivin’ Stephen” a try?

#40 Ripped on 09.30.14 at 7:23 pm

I’ve been driving around the suburbs in Edmonton the last 3 months going to the public schools and upgrading the Alberta Supernet

http://www.servicealberta.ca/AlbertaSuperNet.cfm

I’m seeing more For Sale signs without SOLD stuck on them in Edmonton suburbia. It’s quite noticeable in row housing/town houses where you’ll get 3 For Sale signs grouped together.

It’s the bottom end, but they’re the first to feel any trouble in the labour market.

#41 Danforth on 09.30.14 at 7:27 pm

What should I do with the tax return money I receive from an RRSP contribution?

a) Hookers and blow!
b) Credit card bills and other consumer debt
c) Roll into next year’s investment contribution immediately
d) Mortgage repayment

Answer:
If you have consumer debt, then b) comes first.
However, you shouldn’t have any consumer debt. Consumer debt is for losers (extenuating circumstances aside)

Option c) comes second, roll it into next year’s investment. RRSP tax returns is the tax you have already paid on money, and you will be taxed AGAIN on that same money later in life, including on all the growth. You must reinvest the return – ie: the tax you already paid – to not be taxed twice on that income.

d) While mortgage repayment is tempting, your investment portfolio should grow faster than your mortgage rate. In the long run, you’re better off carrying that mortgage.

a) If no one knows that you got the return, then no one will tell what you got up to! Or, simply find a nice girlfriend/boyfriend and a good bottle of scotch!

#42 Brian Ripley on 09.30.14 at 7:29 pm

I mashed up the latest U.S. Case-Shiller 20 city housing index here:

http://www.chpc.biz/history-readings/seasonal-cyclical-secular

It’s definitely slump time into the winter. But is it more than just the seasonal shift or will what appears to be cyclical turn into a secular bear that began to stir way back in 2004? In any event, housing desire momentum is dropping there and in Canada.

On the weekend I was in a few open house townhouses on the west side of Vancouver and the listings looked tired especially at the current asking prices and especially with equities being sold on the downdraft.

Markets are connected.

#43 Roman on 09.30.14 at 7:29 pm

If you considering buying company stock for an investment, the best way to do it is:
a) call your trusted™ certified RE© agent ®
b) sell put
c) call you trusted™ certified Financial© Advisor ®
d) call your buddy and go for a beer

#44 Anson on 09.30.14 at 7:30 pm

51 % of Canadians would have trouble paying bills if paycheque was a week late means……
A. 51% of people have no savings
B. 51% of people are living paycheck to paychek
C. 51% of people are basically scraping by
D. All Of The Above
ANSWER : D …. The economy has changed drastically over the last few decades. Due to inflation, lifestyle has been declining since 1950’s, 60’s. Debt and the ability to carry debt has enabled us to hang on to what little most have left. Most middle class lifestyles are being supported by debt….Take away the debt and you take away the middle class lifestyle.

#45 hamish 42 on 09.30.14 at 7:31 pm

Spoke to a neighbour who runs a house inspection agency in the GTA, he is getting busier since the multiple offer feeding frenzies are becoming rarer. So people are actually making offers then inspecting the house, rather than plonking in an unconditional offer.
Another sign we have passed the peak methinks.

#46 Danforth on 09.30.14 at 7:36 pm

Q: Are Saving and Investing the same thing?

a) They are the same thing.
b) Saving is for “saving up” for a purchase an expense, whereas Investing is targeting growth.

answer b)
This is analogous to the difference between “exercising” and “training”.
Athletes don’t exercise. Athletes train!

#47 Andrewski on 09.30.14 at 7:37 pm

#25 Kenchie…

Niavaty?! Did you mean Naivety?

#48 crowdedelevatorfartz on 09.30.14 at 7:39 pm

Declaring bankruptcy the 1st time is easy because you only have to do which of the following:
a)Surrender all of your credit cards.
b) Hand over control of your finances to a bankruptcy trustee.
c) Report all income to your bankruptcy trustee.
d)Any money over $1000 that is borrowed. You must declare your bankruptcy proceeding to the creditor.
e) All of the above

Answer: e.
Bankruptcy isnt easy.

#49 Casual Observer on 09.30.14 at 7:40 pm

Here’s a good quiz (with answers) to help educate people who think it’s different here.

http://macleans.polldaddy.com/s/who-said-it-canada-u-s-housing-bubble-edition

When you click “Finish Quiz” at the bottom, it reveals the answers.

#50 Teacher's Ass-istant on 09.30.14 at 7:42 pm

#6 LadyInWaiting on 09.30.14 at 5:21 pm
Here you go. You can bookmark it now.

http://www.getsmarteraboutmoney.ca/en/Pages/default.aspx

#51 Mr. Nihilist on 09.30.14 at 7:43 pm

Which of the following best describes the benefit of a preferred share, as opposed to a GIC?

a) you pay tax on interest earned at the end of every fiscal year, regardless of whether you actually have access to the funds.
b) the return earned is a “dividend”, rather than “interest” and so is taxed at a lower rate.
c) you can use the interest earned to buy a pair of low hanging metal ‘balls’ for your pickup truck.

Answer: b).

#52 crowdedelevatorfartz on 09.30.14 at 7:45 pm

Bankruptcy part deux. ( FYI fellow blog dogs…No I’ve never been bankrupt! But I have several friends that either have or are considering it!)

Which of the following can be seized after declaring bankruptcy(baring in mind Canadian jurisdictions do vary).
a) All assets( bank accounts, vehicles, furniture, etc)
b) Home
c) RRSP’s, Pensions, etc.

Answer:
a and b

RRSP’s and Pensions are exempt.

#53 Bottoms_Up on 09.30.14 at 7:49 pm

Q1) If yearly inflation in the economy is 2%, and you have $1000 in a GIC or bank account paying you 1%, what is the real value (ie, purchasing power) of your money after 1 year?

a) $1000
b) $1010
c) $1001
d) $990

Answer: d). When inflation is higher than interest earned on your money, you’re losing money.

#54 Snowboid on 09.30.14 at 7:52 pm

#10 Nemesis on 09.30.14 at 5:40 pm…

Good one, of the 75,000 comments from the golden RE god how ever did you choose?

My question:

When investing what should you look for in a financial advisor?

a) No commission basis, 1% or less annual fees, builds balanced portfolios
b) Hires TAWs (Temporary Amazon Workers)
c) Sports a beard, has a wolf for a pet and owns HD stock
d) Experience as Minister of National Revenue
e) All of the above

Answer: Professor Turner

Or if you can do without b through d, a local equivalent who fills answer a!

#55 Mister Obvious on 09.30.14 at 7:55 pm

Which of the following forms of income does the Canada Revenue Agency treat the same as employment income?

a. interest
b. dividends paid by Canadian corporations
c. capital gains

Answer is a. Interest income involves no capital risk therefore the government gives you no tax break. Canadian corporation dividends get a healthy tax credit and only 50% of capital gains are exposed to tax.

It’s amazing to me how few Canadians are aware of this.

#56 Dead fall market on 09.30.14 at 7:56 pm

#45 I’ve spoken to many friends in the re industry and they say it’s very slow right now…. This bubble is starting to pop…

#57 TEMPORARY® Foreign Prime Minister on 09.30.14 at 7:59 pm

Your better half (or better third, if you’re a polygamist) has threatened you with matrimonial hell should you procrastinate any further and delay the purchase of every Canadian’s dream: a half-million dollar cube of pressed cornflakes adjacent to a patch of grass the size of a front door mat.

To satisfy your need to play hide the submarine in the near future, you take out a $500,000 mortgage financed over 25 years at the current two-year fixed rate of 3.04% yielding a monthly mortgage payment of just $2,376.51.

Q. Should that current interest rate of 3.04% double to 6.08% anytime in the near future, your monthly mortgage payment will increase by:

a) $211.56
b) $282.11
c) $423.17
d) $846.34

A: Of course, the answer is (d:), about the hourly rate of a good divorce lawyer.

#58 Mister Obvious on 09.30.14 at 8:00 pm

Further to my previous post, Canadian corporation dividends and capital gains that occur inside of an RRSP are also 100% exposed to tax. I’m also surprised by how few Canadians are aware or even seem to care about that.

#59 Flabbergasted on 09.30.14 at 8:01 pm

I was in a pre-sales office last week, checking what was being added to the neighbourhood, and I was flipping through the bumf to see what the numbers were like.

I saw: Strata fees from $3

So I asked what that line referred to, and was told that is the monthly strata fee. “Three Dollars per month?”
Bubblee: “per square foot monthly.”
me: “so a 800 sq ft unit would pay $2400 per month in strata fees?”
Bubblee: “yes” … “ummmm no, maybe that’s annually”… “umm let me check”

unheard discussion between bubblee and other person.

Bubblee: “that supposed to be three cents, not three dollars”
me: “so a 800 sq ft unit would pay $24 per month in strata fees? Isn’t that quite low?”
Bubblee: “ummmm I’m not sure, maybe that’s ann ….” … “umm Just a moment while I see”

more unheard discussion between bubblee and a different person, pointing through the page

Bubblee: “that is supposed to be thirty cents per foot, not three dollars”

I had to laugh, since their staff believes that $3 is either three dollars, three cents or 30 cents, depending on who is giving the answer.

I doubt the strata will keep their monthly fees at 30 cents/ft (or $0.30/sq ft) after the first year.

#60 raisemyrent on 09.30.14 at 8:02 pm

When deciding to buy or rent, what should be considered?
a) The final difference between monthly payment and rent cost
b) A time value of money calculation
c) The quality of the finishes in both units
d) The current value of local real estate

correct answer is b)

In other news, met up with a former co-worker. He’s 30, like me. He was fired because he didn’t really work, and he couldn’t get it around his head that he wasn’t CEO yet after 2 years of (he thought) hard work.
So he’s been messing about for almost a year now (parents help). He says to me ‘I’m so glad I don’t have to wake up early anymore’.
This is the guy who bought a condo in Port Coquitlam (read: NOT Vancouver) for $260k and is unable to sell for $200k because some guy owned a few units and never paid the strata fees so the building is broke. So the unit is rented at a monthly loss.
He also co-owns (parents) a condo in Surrey and rents it for $1,000/m (mortgage costs are $1,500/m). So you’d think he’d learn.
Nope. He cashed out his RRSPs ($10k), and used that to buy a condo in a new building in downtown Vancouver (by the Granville bridge). 1 bedroom. Name now escapes me. Looks like jenga.

Real estate always goes up, right?

So catching up, he tells me, oh yeah, I got my realtor licence… silence… then a fake smile, oh yeah? How hard was that? Oh not that bad, just interviewing brokers now (made it sound so important). OK. I changed the subject.

This guy has a Bachelor’s and a Master’s in Engineering from UBC. I didn’t go to UBC, but I presume that they teach time value of money, investing, etc in at least 1 class in 4th year.

Financial Literacy FAIL (he’d pick d above).

#61 Mike T. on 09.30.14 at 8:03 pm

Q
The government:
a) has your best interest at heart
b) works hard to make sure your world is fair
c) work in conjunction with banks, oil companies, and other large corporations to design policies to maximize their benefit, and minimize yours
d) make sure that the financial information most readily available is of the poorest quality imaginable
e) a and b
f) c and d

maybe H will come and tuck you in tonight in between his rehearsals about ISIS air strikes

#62 Daisy Mae on 09.30.14 at 8:06 pm

#8 Ray Skunk: “….hence this Jane no-mark heading up a group nobody has ever heard of until today.

That said, this financial literacy department sounds like a good gig – I assume it comes with full freedom 55 pension rights in addition to the $100k salary. Nice work if you can get it.”

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

My sentiments exactly.

#63 4 AM Sunrise on 09.30.14 at 8:06 pm

#36 Danforth on 09.30.14 at 7:18 pm

I love how a lot of advice regarding RRSPs assumes that a young person will end up in a higher tax bracket later in life. Today’s Millennials are pooched and may stay in that low tax bracket a looooong time. The only reason why I’m in a higher tax bracket after 10 years of dead-end entry-level jobs is because I ditched the “we’re not allowed to promote you until you’ve been with us for 3 years, no matter how capable you are” treadmill and became self-employed.

#64 Redditor on 09.30.14 at 8:11 pm

Garth–

I stumbled across this gem of a story on r/Toronto and immediately thought of your blog. You’re welcome:

“The cost of cable, phone, internet, alongside just general inflation has been squeezing my (single) mother for the past ten years. It’s very saddening for me to watch. That, combined with the disgusting bottom-line driven attitude of her employer, have worn her down.

She is in her late 50’s working at Scotiabank with a long career (25+ yrs) in banking. She makes ~100k a year and has a BA and MBA. Debts and crap from a bad marriage has us a bit weighed down. She has a line of credit that keeps us afloat. We live around Yonge/Lawrence area (which I love), and it’s a lifestyle that is increasingly out of our means to maintain.

She hasn’t gotten a single cost of living/inflation adjusted raise in six years since the 2008 crisis. Despite working 10 hour, sometimes 12 hour days, she is even subject to humiliating performance reviews to keep her own job.

They tell her she is lucky to have a job.

In reality, they want her to quit. She is starting to get health problems with her age, and they want to show her she has absolutely nothing to look forward to for the next ten years of her life at Scotiabank. Every year her salary is worth less against inflation, she works longer hours with more stress, and comes home more depressed.

She is softspoken woman, and this also contributes to the company and her superiors continually taking advantage of her. It makes me sick to my stomach.

Luckily, the real estate market’s growth (assuming it stays) will be her retirement plan. She will sell what equity she has left in her home, which has been rising in value, and use that to pay off her remaining line of credit and mortgage. Then she will move to a very modest condo. She is also counting on her children to support her financially in her old age.

What a foul world we live in. I feel like the Canada I was taught about in school doesn’t exist anymore. I feel like nobody is looking out for us, and every year it’s a struggle just to survive.”

#65 Mark on 09.30.14 at 8:11 pm

“Answer c – Alberta will suffer with low commodities and lower Lonnie will help Ontario.”

Good luck with that “lower Loonie” with all the housing-driven deflation in the pipeline. USD$ rally won’t last forever and looks extremely overbought at this point.

#66 Arfmooocat on 09.30.14 at 8:14 pm

#40
I’m seeing more For Sale signs without SOLD stuck on them in Edmonton suburbia. It’s quite noticeable in row housing/town houses where you’ll get 3 For Sale signs grouped together.

———————————————————

Volatile multiple unit starts increasing by 104.3% doesn’t help

http://economicdashboard.albertacanada.com/Housingstart

#67 4 AM Sunrise on 09.30.14 at 8:17 pm

Wasn’t the Jar Lady and her show “Til Debt Do Us Part” supposed to scare everybody away from debt and into responsibility? How come that didn’t work? Consumer debt has ballooned since its first airing in 2005. Where did we go wrong?

#68 prairieboy43 on 09.30.14 at 8:18 pm

What does deflation mean to you?
1) value of money goes up.
2) value of money goes down
3) opposite of inflation.
4) lower wages.
5) low air pressure.

Answer: 1,3,4.

#69 Lack of affordable housing Calgary on 09.30.14 at 8:26 pm

What a joke, one real substantial article about Calgary housing market and the link doesn’t even work:

http://www.calgaryherald.com/news/alberta/Lack+affordable+housing+undermines+Calgary+prosperity+agencies+caution/10247066/story.html

What’s the reason for it:

a). The newspapers are run by real estate
b). There is so much traffic to it by disgruntled young Calgarians, that it crashes the server
c). Both a and b
d). ________________ fill in the blank

#70 Grantmi on 09.30.14 at 8:30 pm

Rabi gets it. If you can believe this, he’s just read all of the 1,808 posts published here. That’s about 1.3 million words, or the equivalent of 23 full-length books. And that doesn’t include the comments, as no human alive could actually get through them (304,584 at the moment), at least without surgery.

….and 301,000 of them are by Smoking Man! (the other – Mark)

#71 Sheane Wallace on 09.30.14 at 8:31 pm

you don’t need all comments, just read mine

#72 Flamed out in Kitchener on 09.30.14 at 8:31 pm

If you invest $1000 into a traded trust (like EIT.UN) and you get a $100 return as a Return of Capital per year, … and you sell after 3 full years, for even money, what do you report to Rev Can? (assume no trading costs)

a) Every year for the 3 years, you would report earnings of $100.

b) You would report interest earned of $300.

c) You would report a capital gain of $300.

d) You would report a loss, as you’d only have $700 left of your investment.

Answer: C

Since your ACB (adjusted cost base) is now $700, and you are selling for even money ($1000) … you’ve made a capital gain of $300. Of course the best part is that only $150 of that gain is actually taxable.

You’re welcome.

#73 saskatoon on 09.30.14 at 8:35 pm

garth,

i thought you might appreciate this one:

http://www.psychologytoday.com/blog/your-online-secrets/201409/internet-trolls-are-narcissists-psychopaths-and-sadists?tr=MostViewed

(not that you didn’t already assume as much :))

#74 Shawn on 09.30.14 at 8:47 pm

Danforth’s Advice on RRSP at 36

RSPs are for tax shifting from high-bracket years to low bracket years.

***************************************
Danforth I agree with you that low income people should use TFSA and not RRSP.

But you are completely wrong to suggest that RSP is about tax shifting.

Myself and others here have gone through the math many times that shows that if you consider your share of the RRSP to be your net cost after the refund then there is ZERO tax on that growth as long as the tax rate is unchanged from contribution to retirement. If you get in a lower tax bracket in retirement, RRSP is actually Negative tax on your share. That is simply the math.

RRSPs provide decades of tax free compounding on your share of it, the amount it cost you net after the refund.

Even if tax rates rise it still works out well.

Also there are not likely to be any low tax years once you get a good job.

In Alberta the lowest tax rate on taxable income is 25% on first 44k of table income. Then 32% up to 88k and then 36% to $136k and 39% above that. See, relatively flat tax rates.

Let’s say my marginal is 36% or 32%. The best I can hope for is to get down to 25% and then only if I have no other income for a year and then I can only get $44k out of the RRSP. Plus about $14 k in the basic deduction at 0%

I would be nuts to take the $44k out of my RRSP just to save 7% or 11% and then give up years and years of tax free compounding in the bargain.

Also I have to be unemployed to get down that low.

Plus I could barely get by on $58 k (44 plus the 14) .

I conclude RRSP is about tax free compounding on my share of the RRSP. A full 39% of my RRSP was basically contributed through refunds and will go back to the tax man. The remaining 61% will compound tax free and every dollar contributed will be over $10 by the time I extract it tax free. (Again the 39% going for taxes is just repayment of the 39% of so of the RRSP that the government funded in the first place).

And maybe with pension splitting and such my marginal tax rate in retirement will be 36%, 32% or 25%. Or maybe I need to add 15% for claw back.

Anyway I look at it my advantage is to leave RRSP funds to grow as my share grows tax free (or maybe 15% tax if claw back applies).

Anyhow all of this is for the ADVANCED financial literacy class and I know many of you will never “get” this.

#75 Steve on 09.30.14 at 8:48 pm

#10 nemesis

kelowna bashing! My favorite pastime!

I love that city because you can get curb stomped for accidentally making eye contact with nearly anyone. I’ve been all over to many different places and I have to say I feel more at risk physically in kelowna than anywhere I’ve been. It all started to go to hell after the riots.

If anyone wants to hang around here, be warned. Everything will be fine and you will wonder what all the hype is. Then one day you’ll be tying to merge into traffic, hold the door open for the wrong woman, look at the wrong juice monkey, and Boom! You’re in the news.

Other than Hein rd and Leon street there are no real “bad areas” as such. You stand an above average chance of being a victim throughout the whole area. The crack heads aren’t the issue, it’s the roid monkeys and Barbie combo in the global warming trucks. Avoid these prawls at all cost. Cross the bridge into westbank at twice the posted speed limit and all of a sudden your chances of being assaulted diminish to almost nothing. No idea why that is. In one month I have had two encounters with vicious glam-necks in lifted trucks. Both in kelowna. I’ve lived here for 39 years and during that time logged many many violent encounters with totally unhinged people.

So be advised, come enjoy the three hundred wineries, the drunken sailors on the lake, and the silicone fest, but keep your self to your self. :)

#76 Macrath on 09.30.14 at 8:49 pm

Spending $13 million on financial literacy with videos, They are worse than the people they are trying to educate.

These Brits do better for Free, Silt-ch, Nada

http://www.positivemoney.org/videos/

#77 Retired Boomer - WI on 09.30.14 at 8:55 pm

Garth-

Isn’t it a LITTLE LATE for Canada to develop a “Financial Literacy Task Force” headed by an OCD named Jane Rooney? Excuse me, that’s an OECD person in the form on Jane Rooney.

It wasn’t last year, or even 5 years ago that financial literacy was stalled north of the 49th parallel. We here in the US hardly the bastion of financial literacy ourselves, got the ‘school of hard knocks’ shoved up our kazoo’s via the 2008 GFC.

That’s when the greater part of 300 million said “holy F#%^” what just happened? Yes, there were the small minority of people who saw the stats lining up with liar loans, and sub prime mortgages, but a DAM slim minority.
Some even made a killing on the GFC betting against certain financial products.

You assert “every year the government spends 13 million on financial literacy”… well, this blog is here to tell you, your tax dollars are going down a rat hole on THAT score.

Perhaps the government might be better to spend their 13 million holding a lottery every DAY giving away $35,000 a DAY to some lucky Canuck who paid a $1 a day for a chance to answer a multiple choice financial literacy question.

Assuming my math is correct, That leaves a mere $616.43 per day for overhead, but you could fire all but 3 people of the 74 staff, and save the entire 7.5 MILLION now spent.
I will assume 616.43 X 7 = $4,315.00 a week could pay THREE salaries & fringes for 3 government stooges?

Hey, it would be more fun than the dry, boring government crap most programs consist of, and you might actually teach somebody something useful. Should you need more money, cut the salaries and fringes, or use part time help.

After all, you got a lot of decent questions here already.

#78 Shawn on 09.30.14 at 9:07 pm

For the following, what is your net worth?

You are in a 40% marginal tax bracket (20% on capital gains)

Assets:
House Equity $300k
RRSP $400k
Manulife shares $100k (received at zero cost at demutualization)
TFSA $50k
Debt is Zero and , no other assets

a) 850k (just add ’em up the normal approach)
b) 690k (deducted 40% of the RRSP because 40% will eventually go for taxes)
c) $670k (as in b but deduct $20k for 20% tax on the capital gain on the zero cot Manulife shares)
d) $335k because your wife just divorced you after finding out that your net worth was $670 instead of the $850k

Correct anser is c.

RRSPs should only be counted for around 60% of the indicated amount. All assets should after tax before being added together. If you were a corporation with audited statements you HAVE to present your net worth that way.

Again the bad news on RRSP is you only own 60% of it net. But the government funded the other 40% AND your 60% will grow approximately tax free, maybe even with small negative tax. I already said that? yes, but it bears repeating.

#79 not 1st on 09.30.14 at 9:07 pm

This blog boggles the mind. There are numerous economic shocks going on all over the world and Garth dedicates todays post to the multiple choice financial education of some newbie named Rabi.

How about digging in to todays headlines a bit. I am sure there is educational value there.

You mean like we do every other day? You are free to go and suck on the HuffPost. Shoo. — Garth

#80 The Professor on 09.30.14 at 9:14 pm

Why are ETFs a better investment choice than individual stocks and mutual funds?
1- lower management costs
2- liquid in minutes
3- less volatile than stocks
4- all of the above
Answer: All of the above.

#81 500 Days on 09.30.14 at 9:15 pm

I have enjoyed reading this board and Garth’s and many poster comments. Now it’s time to share mine.

Looking at many indicators, real estate and otherwise, has given me a very strong sense of the troubles that lie ahead. I will be posting more about those, and of course learning from and appreciating those that are posted by others here and our host.

Suffice to say, for now, late September 2014, it is clear to me we are headed for major economic, political, social and environmental trouble. Starting with real estate in Canada.

The market is now softening into winter. I believe 2015 will be the last dead cat bounce for Canadian RE, and a weak one at that. Many regions will be suffering mightily already by next year.

By the time we mark 500 days from now, February 2016, and the start of what should be the spring market, it will be very clear that most, if not all, parts of Canada’s real estate will be in dire straits.

Plus there will be a host of other local, regional, national and international problems.

Starting now.

500 days and counting.

#82 joblo on 09.30.14 at 9:16 pm

When you have to go to fight wars in Iran & Ukraine you are?
a) Fighting for Freedum and Dumbocracy
b) Helping tourism prospects in the area
c) Supporting Keilbasa and Kabab industries
d) paving the way for US banks billion $ infrastructure and oil investments

Answer: Duh

#83 TEMPORARY® Foreign Prime Minister on 09.30.14 at 9:19 pm

#74 Steve on 09.30.14 at 8:48 pm
=========================

Excellent post. Too funny…

#84 Alice Borg on 09.30.14 at 9:26 pm

DELETED

#85 economictsunami on 09.30.14 at 9:27 pm

Russell Oliver is:

a) Finance Minister of Canada
b) A dead former thespian in the UK
c) The Cash Man

Rising debt threatens to plunge world back into financial crisis, top economists warn:

“The UK remains the fourth most highly indebted major economy in the world after Japan, Sweden and Canada, with total non financial debt of 276% of GDP. The US is not far behind with debt of 264% of GDP.

However, the real stand-out is China, which since the crisis began has seen debt spiral from a very manageable 140% of GDP to 220% and rising. This is obviously still lower than many developed economies, but the speed of the increase, combined with the fact that it is largely private sector debt, makes a hard landing virtually inevitable.

The only way the world can keep growing, it would appear, is by piling on debt. Not good, not good at all.”

http://business.financialpost.com/2014/09/30/rising-debt-threatens-to-plunge-world-back-into-financial-crisis-top-economists-warn/

I have seen steady growth in Food Banks, Dollar Stores, Pawn Shops and Pay Day Loan Services in my life time.

Once exclusively for the poor and working poor, but no more…

#86 retired Boomer - WI on 09.30.14 at 9:39 pm

Q Which has the greatest chance of returning to you – the buyer – the most money less your account fee?
Assume you are young just starting to invest for your retirement.

A. An advisor selected fund or ETF?

B. A Guaranteed Investment Contract (GIC)?

C. A broad based total market index fund or ETF?

D. A weekly investment into Lottery Tickets?

Answer C .

unless you get incredibly lucky, then D.

#87 Kenchie on 09.30.14 at 9:41 pm

#47 Andrewski on 09.30.14 at 7:37 pm
“#25 Kenchie…

Niavaty?! Did you mean Naivety?”

It was Smoking Man who wrote it…

#88 Bottoms_Up on 09.30.14 at 9:42 pm

#159 FLAWED on 09.30.14 at 3:20 p
——————————————-
Seriously?

20% inflation over 8 years is pretty darn close to 2% per year. Nothing wrong with that calculation, and that rate is, in fact, quite normal. Therefore, a 20% raise over 8 yrs in a 2% inflationary environment is not much of a raise at all.

#89 Metrotown Mike on 09.30.14 at 9:46 pm

More speculation in Van-Kerrisdale:

http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-kerrisdale-block-listed-for-28m-1.2782656

#90 Bottoms_Up on 09.30.14 at 9:47 pm

#150 Shawn on 09.30.14 at 2:06 pm
————————————————
Thanks for the info. on who the net lenders are in this world, very interesting.

#91 jess on 09.30.14 at 9:52 pm

ya think those auditors need a education tune up

Sino-Forest Corp.

Audit firm Ernst & Young to pay $8 million to settle with Ontario regulator
Waterloo Region Record
By David Friend

http://www.forbes.com/sites/francinemckenna/2013/06/18/where-should-sec-start-a-fraud-crack-down-maybe-look-at-fake-restatements/

#92 Bottoms_Up on 09.30.14 at 9:53 pm

#79 The Professor on 09.30.14 at 9:14 pm
————————————————-
I would argue your correct answer is #3 (less volatility).

Individual stocks can have zero management fee (i.e., self-directed), and also can be liquidated in minutes (seconds).

#93 Joe on 09.30.14 at 9:54 pm

How much impact is the Canadian real estate sector having on Canada’s GDP?

a) about the same as all of the banking sector
b) about the same as all of the manufacturing sector
c) about the same as all of the natural resources sector
d) more than all of the manufacturing and natural resources sectors combined

Correct answer:
d)

#94 Keith on 09.30.14 at 9:58 pm

@Shawn #29 I’ll take 1967 when they were so desperate for teachers in Victoria they waived the degree requirement and took people with three years of university. Gotta love a job market with four percent unemployment, haven’t seen that in most parts of Canada since um…the sixties?

#95 Harbour on 09.30.14 at 10:01 pm

Oil took a good hit today

#96 -=jwk=- on 09.30.14 at 10:04 pm

Interest paid to the bank is a throw away, like rent. Over the lifetime of you mortgage, how much do you pay in interest?

a) 18%
b) 4%
c) about the price of the house
d) none, it is an investment

c)

#97 CREIT on 09.30.14 at 10:07 pm

@#2 Flawed

If you knew what you were talking about, then you would know that 85% of the services you mentioned are paid for by property tax (with the exception of health care).

#98 Bottoms_Up on 09.30.14 at 10:08 pm

Q2) In what Canadian city does one million dollars buy you a crack shack?

a) Vancouver
b) Toronto
c) Calgary
d) all of the above

#99 Carlos El Magnifico on 09.30.14 at 10:11 pm

In the equity method of accounting for a subsidiary’s operations, the parent company’s share of the subsidiary’s adjusted net income not distributed as dividends is credited in a closing entry to the following ledger account:
A) Intercompany Investment Income
B) Retained Earnings of Subsidiary
C) Retained Earnings
D) Investment in Subsidiary Common Stock

#100 Smoking Man on 09.30.14 at 10:12 pm

What should be the number one priority of a 20 year old today be never worry about money by age 30

A) Go to University earn an obedience certificate.

B) Try and master a video game, and complete in million in dollar tournaments

C) Start a sex slave business, with a little dope selling on the side.

D) Take advantage of the tree hugging schooled , start a business with virtually free obedient Labour.

#101 D.D. Corkum on 09.30.14 at 10:15 pm

If 40-year-old Bob opens his first Tax Free Savings Account (TFSA) in 2014, how much can he deposit into the account?

a) 5500, the personal limit for 2014;

b) 11000, the combined limit because he is married;

c) 31000, the personal limit for every year since 2009; or

d) 62000, because of b (married) and c (since 2009)?

Correct Answer: C.

If you said “A”: Contribution room increased by $5500 on Jan 1st 2014 for all adults (18+), but this is on top of increases from previous years.

If you said “B” or “D”: TFSAs are personal only. Unlike RRSPs or normal bank accounts, you cannot have a “spousal” or “joint” TFSA.

—————

Bob uses all of his contribution room on 30 Sep 2014. He is very lucky and invests all of his money in a company that announces a new miracle invention the following day. He smugly withdraws a million dollars a week later on 8 Oct 2014 to buy a house.

A month later on 8 Nov 2014, he wants to put some money back into the TFSA. When can he do it, and how much?

A) He can immediately deposit $1 million, the amount he withdrew, because it balances out at year end;

B) He can immediately deposit $5500, the personal limit for 2014, because withdrawing so much money reset the limit for the rest of the year;

C) He must wait until 1 Jan 2015 before depositing up to $5500, the forecast personal limit for 2015; or

D) He must wait until 1 Jan 2015 before depositing up to $1 million and $5500, the withdrawn amount plus the forecast personal limit for 2015.

Correct Answer: D

If you answered A or B: This is a serious mistake impacting lots of Canadians. You only ever gain additional contribution room once per year (ie, 1 Jan 2015). You will be penalized severely for not waiting.

If you answered C: At the start of the new year, you get both the annual increase PLUS an extra increase to match withdrawn amounts in the previous year.

#102 Bottoms_Up on 09.30.14 at 10:19 pm

Q3) If you owe a bank $200,000 at 4% interest (ie, you’ve secured a 4% mortgage rate), and have to pay that back over 25 years (with repeating 5 yr amortization periods), approximately how much interest will be paid to the bank over 25 years, assuming rates don’t change?

a) $400
b) $4,000
C) $40,000
d) $112,000

Answer: d). You will owe 4% interest to the bank on the entire (or remaining) balance, per year. So in the first year alone you will pay the bank $8,000 in interest.

#103 Tom from Mississauga on 09.30.14 at 10:24 pm

Number of Canadians that understand what can be purchased inside a TFSA?
A 11%
B 33%
C 77%
D 99%

Answer A – Little known but anything can be purchased through a TFSA including stocks, bonds, mutual funds, ETFs or GICs.

#104 Terry on 09.30.14 at 10:26 pm

You have contacted a Realtor to begin your house search. While talking with the Realtor he presents you with a Buyer Representation Agreement (BRA) for you to sign. What is your best course of action?

A) Sign the agreement as this will ensure that the Realtor will look out for your best interests during any negotiations with sellers.

B) Refuse to sign and immediately report the incident to you local police department as this is illegal.

C) Refuse to sign and by doing so protects you from the possibility of having to pay the Realtor the commission due on the sale of the sellers property.

D) Sign the agreement and amend it by stroking out and then initialing the changes to all reference’s to any payment of commission by the buyer.

D) Tell the Realtor you want to take the unsigned agreement to your lawyer so that you can be properly advised on the agreements purpose.

Correct answer:

D

#105 jess on 09.30.14 at 10:26 pm

Deleveraging? What deleveraging?

InternatIonal CenterFor Monetaryand BankIng StudIeS

http://www.icmb.ch/ICMB/Home_files/Geneva16.pdf

#106 Ronaldo on 09.30.14 at 10:28 pm

Using the Rule of 72, how long would it take to double your investment if you invested in a GIC at 2% per year?

a) 6 years
b) 25 years
c) 36 years

Answer: c) 36 years

#107 Tom from Mississauga on 09.30.14 at 10:32 pm

Number of Canadians that know the contribution rules of a TFSA?
A 19%
B 39%
C 59%
D 79%

Answer A – $5,500 can be contributed for 2014, unused room is carried forward next year. 1 in 10 contributors have got in trouble with Canada Revenue Agency since inception.

#108 Smoking Man on 09.30.14 at 10:33 pm

What should a 55 year old do to ensure you never end up as a living corpse in a nursing home.

A) Exercise and eat healthy

B) Try and work less, pace your self and avoid stress

C) Go with Chinese urban myth, do who and what ever it takes to keep you libido and see drive alive.

D) Eat burgers, Drink, Smoke, Gamble, live for today, and fk tomorrow, cause tomorrow is worse than today. Write a
book about your fun so others may follow.

#109 45north on 09.30.14 at 10:40 pm

if you have a 25 year mortgage, then the interest rate is fixed for 25 years

a) true

b) false

answer false. 25 years means you would pay it off in 25 years. The interest rate can be fixed or variable. Fixed mortgages can be fixed (generally) for up to five years during which time the interest rate is fixed. Variable mortgages are continuously variable with the interest rate going up or down according to market conditions.

#110 Inottawa on 09.30.14 at 10:43 pm

I just sold my rental condo in Ottawa thanks to you. Closed today and comps are 20K lower than my deal. So doomed. Thank you for saving me in time to get out with some profit and no loss!!

#111 Smoking Man on 09.30.14 at 11:06 pm

What!!!!! what!!!!

A guy had Ebola in Texas, came from Liberia..

The authorities, are only going to watch the people he was in contact with… Watch?

Why aren’t they isolated….

Martial law coming soon to a USA state near you..

#112 };-) aka Devil's Advocate on 09.30.14 at 11:07 pm

#10 Nemesis on 09.30.14 at 5:40 pm
“Yes, I admit I started this site just to flog books and impress women, but that got tired fast.” – HonGT
Q: Who said, “Why, Sir, you find no man, at all intellectual, who is willing to leave Kelowna. No, Sir, when a man is tired of Kelowna, he is tired of life; for there is in Kelowna all that life can afford.”?
a) Garth Turner
b) Rob Ford
c) Stephen Harper
d) Dr. Samuel Johnson
e) Devil’sAdvocate
[Answer: e]

I never said that. I may have said something quite similar and I most certainly may have thought as much. But there is no way I’d have said it with quite so highbrow grammar.

Straight out; Kelowna is friggin awesome! I’ll admit there are a hell of a lotta nice places out there to visit, many if only to see what some fools are willing to tolerate. Seriously Winnipeg may be a beautiful city but live there? And then Toronto? Come on now. Sure there might be good reason to go there once in a while… maybe even recreationally, but well come on…

Then there is Kelowna… there is nothin’ quite so nice to come home to as Kelowna.

#113 Cici on 09.30.14 at 11:10 pm

#29 Shawn,

I would have had four kids no problem if I could have afforded to have been a stay-at-home mom.

But having even having one kid while having to work full-time outside the home frightens me.

I don’t see the point of being a slave all day and all night. Call me selfish, but I need free time.

Oh, and for the questions, here’s a really basic one that most people don’t get:

What percentage of your income should be allotted to housing expenses?

a) Up to 50% for mortgage/rental costs
b) 80% or more for mortgage/rental costs
c) Up to 35% for mortgage/rental costs
d) Up to 35% for mortgage/rental costs, and including all associated utilities

Answer = d

If the kids could figure this out (get room-mates and furnish with freebies!), they’d be way ahead. If they hit that one on the nail AND realize that they should have NO DEBT and be saving 10% to 15% of their salary (even if only in a cruddy GIC), they’d be much further ahead.

It makes no sense at this point to talk to the youth about investing, because in many provinces mom and pop are teaching the kids first-hand that 80% of salary should be sunk into housing, 20% on food, 35% on transportation, 15% on vacations, and another 15% on random luxury items, all financed via credit and debt. This cycle needs to be broken before we can move on to the more exciting subject of investing.

#114 JPN on 09.30.14 at 11:11 pm

# 74 Steve.. It’s unfortunate reading irresponsible posts such as yours. You have no concept of the culture and history of Kelowna to report.. Look outside of the bars and pubs and find the true valley we are all proud of..
It’s not all about traffic.. 39 years? What a sorry existence.. Why do you stay? Ive been her for 49 and traveled the world.. Its near the top of the list..

#115 Mister Obvious on 09.30.14 at 11:12 pm

304,584 comments since this blog’s inception.

The break down:

117,417 posts by tedious single-issue hijackers without the drive or skill to start their own blogs. (examples of a few historical pests: realpaul, Westernman, daystar, and several variations of the ‘Nostradamus’ handle)

65,913 ad hominem attacks against Garth

46,137 ad hominem attacks against commenters

33,828 goldbug & doomsayer rantings

24,736 utterly unintelligible diatribes against something

16,553 articulate, carefully considered, on topic, thought provoking comments and/or links to other useful data & commentary.

In addition to the above (but not included in the final count) are 15,295 comments so viscous they went beyond a simple “DELETED” notice and never in fact saw light of day. These are waiting in the RCMP folder should they be needed for future reference, God forbid.

#116 young & foolish on 09.30.14 at 11:13 pm

God still loves renters ……..

#117 Smoking Man on 09.30.14 at 11:28 pm

#115 young & foolish on 09.30.14 at 11:13 pmGod still loves renters ……..

The only God in the universe is the one that stares back at you on the mirror….

Don’t feel bad about that…

#118 Christopher Lackey on 09.30.14 at 11:51 pm

What is the most important thing to look for when deciding to invest in a company?
a)market cap
b)earnings
c)dividend
d)price to book
e)positive media coverage

Answer: all and none of the above. Picking stocks is hard! Don’t try unless you know what you are doing. Most people should just learn everything they can about ETFs

#119 Here is a Question on 09.30.14 at 11:54 pm

Without CHMC would the housing bubble crash in Canada?

1)Yes or 2)No

Answer 1

The housing bubble in Canada is built on cheap easy credit/sub-prime loans . If you take that away the house of cards would crumble .

#120 Niko The Dog on 10.01.14 at 12:00 am

Best Financial Advice: Live below your means!

#121 Sideline Sitter on 10.01.14 at 12:00 am

263 Linked In Connections?

PFFT!! Over 1000 here… and I say “beat it” to plenty of invites. More than I say yes to, that’s for sure.

#122 raisemyrent on 10.01.14 at 12:16 am

Smokey’s on fire tonight! Love it.
Ps I already wrote my question but #95 jwk wrote what I wanted for a second one

#123 Ronaldo on 10.01.14 at 12:33 am

#111 };-) aka Devil’s Advocate on 09.30.14 at 11:07 pm

”Straight out; Kelowna is friggin awesome! I’ll admit there are a hell of a lotta nice places out there to visit, many if only to see what some fools are willing to tolerate. Seriously Winnipeg may be a beautiful city but live there? And then Toronto? Come on now. Sure there might be good reason to go there once in a while… maybe even recreationally, but well come on…

Then there is Kelowna… there is nothin’ quite so nice to come home to as Kelowna.”
———————————————————-

Wow, something must have changed since this post:

Post by Devil’s Advocate » Dec 31st, 2007, 9:24 am

”As a long time resident of Kelowna, my own experience has been that Kelowna does indeed SUCK! People here are jerks by and large. Even nice people who move here become jerks. I don’t know what it is… maybe something in the water… everyone says they LOVE this town but none of them really do. It’s a strange phenomena really. We brag about what a great place this is, and it once was although still then inhabited by jerks, and we continue to make it worse and worse and worse. I’d like to leave but I can’t. I hate it… I really do. I love what it could be… but I hate what it is and each day more so.”

I know many people living in Kelowna and I think they are very fine people.

#124 Steve on 10.01.14 at 12:55 am

# 74 Steve.. It’s unfortunate reading irresponsible posts such as yours. You have no concept of the culture and history of Kelowna to report.. Look outside of the bars and pubs and find the true valley we are all proud of..
It’s not all about traffic.. 39 years? What a sorry existence.. Why do you stay? Ive been her for 49 and traveled the world.. Its near the top of the list..

Ooooooh! That rascally steve! Always stirring up trouble on the greater fool. I don’t go to bars and pubs to get “cultured” in kelowna. Nope. The last two cultural events I attended were in the costco parking lot and at the intersection before the bridge. My terrified wife can attest to the totally unprovoked aggression that almost sent an innocent motorbiker to the Davy Jones locker for innocent motorcycle riders. She can also tell you how we nearly got cut in half by a jacked up truck at Costco that was doing eighty through the parking lot. That was my favorite because of all the classical language the actors used.

Stuff the pretense and hand wringing. The prettiest princess of all the towns is a hog in a dress by a pretty lake. Oink

#125 Spaccone on 10.01.14 at 12:56 am

By possibly how much could greaterfool have quashed/delayed poor financial decisions by hormonal house hunters and in turn housing turnover/bank loan books:

(a) $5,000,000
(b) $1,000,000,000
(c) $2,000,000,000
(d) $5,000,000,000

[Opinion – no wrong answer]

By possibly how much have bureaucrats quashed poor financial decisions by hormonal house hunters:
(a) What? My granite countertops are now going out of style?
(b) Omg where is all the money going
(c) Honey you’re going to need to get a 2nd job
(d) How am I supposed to survive on this “pension”?
(e) Let’s totally buy that condo and make money renting it out, we can flip it for a huge profit in a couple of years. Everybody’s doing it even the neighbour’s kid and people at the office.

#126 Ronaldo on 10.01.14 at 12:58 am

Q: If you had purchased silver bullion on June 27/13 for $18.61 u.s. when the Cdn dollar was 95.17 cents and sold on Sept. 30 for 17.03 u.s. when the Cdn dollar was 87.86 cents, what would be your percentage loss on the sale in Cdn dollars?

a) 8.5%
b) 11.2%
c) 2.1%

Answer: c) 2.1%

#127 Tony on 10.01.14 at 1:22 am

Question: Why don’t Canadians sell second or third properties to someone paid off to live free in that property that has been paid for 100 percent cash by someone else but at less than 50 percent below market value to avoid any capital gains tax from the original owner?

Answer: They never learned how to avoid paying tax on a larger scale by taking the cue from the used car market before any bluebook value was set and you could virtually sell a used car for nothing. The average person just doesn’t think and pays hundred of thousand or millions of dollars in capital gains tax needlessly on Canadian real estate.

#128 Tony on 10.01.14 at 1:36 am

Re: #19 calgaryPhantom on 09.30.14 at 6:18 pm

I’d bet it would be none of the above and will actually be Prince Edward island. Best of the worst PEI may be the only province with positive growth in the next 5 years.

#129 Fortune500 on 10.01.14 at 1:45 am

What percentage does a Federal/Provincial worker pay towards the total value of their defined benefit pension (indexed to inflation) over the course of their working years?

How much is the shortfall and who pays the remainder?

How much would a private worker need to save in order to generate a similar pension using the traditional 3% rule and assuming an average life expectancy?

#130 devore on 10.01.14 at 2:03 am

#110 Smoking Man

A guy had Ebola in Texas, came from Liberia..

The authorities, are only going to watch the people he was in contact with… Watch?

Why aren’t they isolated….

It’s ebola, not the flu. Read a book, learn about it.

#131 bankrupt on 10.01.14 at 2:16 am

@#52, pending what province and who’s owed $ to, your RRSP and pensions are vulnerable, for example if you owe the CRA or and sort of taxes, they will rape your savings in a xxx fashion

#132 Blacksheep on 10.01.14 at 2:31 am

Shawn # 166,

Shawn, I sincerely apologise for accusing you of posting lies for $’s, in regards to bank lending.

I’ve personally supplied the BOE link, (accepted as fact) on multiple occasions. It explains in basic language, how the worlds modern money system works, yet you repeatedly fail to display understanding.

Unfortunately, because we’ve now established your not intentionally, deceiving readers, Only one explanation remains (Occam’s Razor). You simply lack the intelligence (too indoctrinated?) to wrap your head around, this admittedly, unconventional thinking.

Your statement below, yet again confirms your basic inability to comprehend the information supplied. Going forward, I will no longer point out your mental deficiencies, as I feel it would be in poor taste.
—————————————————
“Fractional reserve creates money because loans flow back to the banks as deposits. When it comes back and is loaned out again it still belongs to the depositor not the bank.”
—————————————————
But don’t feel bad, your beliefs mirror those of the working class, but then again, most of them have never been exposed to this insider information. (and never will, right?)

#133 Blacksheep on 10.01.14 at 2:41 am

Macrath # 22,

Good post.

#134 TomOfMilton on 10.01.14 at 4:59 am

Q: Confusion between investments and investment programs makes it difficult for people to plan properly. Which of the following is not an investment program?
A) RESP
B) TFSA
C) Mutual funds
D) RRSP
(probably a better way to phrase the question but the answer is C. Many people think tfsa is a bank account and rrsp is mutual funds. Thanks to [email protected])

#135 Harry Wilson on 10.01.14 at 5:15 am

Here are two for Rabi, and congratulations on completing the most gruelling marathon of our time.

Disclaimer 1: The second question is about a term deposit that may start with G and end with IC. This is not an endorsement; I simply found the arithmetic interesting. (Don’t beat me again, Mr. Turner; I still have the welts from last time!)

Disclaimer 2: Yes, it’s a very long post.

———-

#1 – A set of twins, Harry and Larry, will turn sixty in 2016. They have earned the same wage all their life, and both will be eligible for $600/month in CPP at age sixty-five. Harry has decided to take his CPP at age sixty, while Larry will wait until the more traditional age of sixty-five to take his.

At what age will they have collected the same amount of cash from CPP?

A – 68

B – 72

C – 76

D – 80

Answer: C

Harry will be earning 64% ($412.16) of what Larry will be earning ($600), but he will collect CPP for five years before Larry sees a penny. This means that at age 65, Harry has already collected $24,729.60. ($412.16 x 60 months = $24,729.60)

After 65, Larry will collect $187.84 more than Harry every month, and will make up the difference in their totals in 132 months ($24,729.60 / $187.84 = 131.65 months), or eleven years after their sixty-fifth birthdays.

Some variables to consider are that there will likely be a higher marginal tax rate on Harry’s first five years, if both twins work until sixty-five; that tilts the scales in Larry’s favour. However, if Harry could stuff his CPP into some otherwise unused RRSP contribution room, and pull it out after retirement, it would effectively be a wash.

The fact that the CPP that Harry receives for the first five years could be increased through investment, while Larry is playing catch-up, tilts the scales in Harry’s favour.

I used a basic taken-at-sixty-five CPP monthly of $600; the average as of March 2013 was actually $596.66. Since the answer is based strictly on percentages of their eligible amount, the age when they would have collected the same total remains the same regardless of the actual amount collected.

———-

#2 – Harry and Larry go to the bank, each with $5,000, intending to put it into a one-year GIC :flinch: Harry buys one with simple interest, calculated and paid after one year, at 2%. Larry has heard that compound interest is freaking awesome, and gets one with the interest compounded monthly, at the same 2%.

Harry will earn $100 in interest. What will Larry be able to buy with the extra money that he has earned after one year, as compared to Harry’s earnings?

A – a chocolate bar.

B – a Justin Bieber CD.

C – a quarter-ounce.

D – the new Batman (Adam West) box set.

Answer: A (if they’re on sale)

I believe chocolate bars are a dollar now, and Larry’s total interest would amount to $100.92, ninety-two cents more than Harry’s. The kicker is that most banks reduce the interest rate by 0.25% if you want it compounded monthly. How they can do their job and keep a straight face is beyond me.

Even [email protected] couldn’t believe this one when I told her, but on my next visit, she admitted that it was true. If you still have doubts, here’s a handy-dandy compound interest calculator from the S.E.C. (United States Securities and Exchange Commision):
http://investor.gov/tools/calculators/compound-interest-calculator

—————————————————

re #48 and #52 crowdedelevatorfartz

Thank you for raising the issue of bankruptcy. Too many people are starting to consider this a viable plan ‘B’, thinking that it’s a simple wiping clean of the slate and starting fresh. We need to re-stigmatize this procedure.

re your #39 comment, don’t underestimate ‘a) Drool and feign a slight stroke.’ This is a very effective tool when dealing with laypeople (although I’ve learned that most cops are on to this trick).

P.S. regarding the hot topic of the last week, given your screen name, if anyone should be worried about deflation, you should be. (God, I need sleep.)

#136 Spiltbongwater on 10.01.14 at 5:30 am

Why is B.C. savings rate at -7%?

A) Because we spend it all on pot and 7/11 slurpees.
B) Because our housing is so expensive because HAM is coming in and laundering their ill gotten money in our housing market.
C) Because we keep building social housing for all the free house freeloaders who move to Van because the weather sucks 8 months of the year in their own province and B.C. and the cities will pay for your free loading ass to come here and camp in our parks and do your drugs, with no threat of us sending your ass back to where you came from, so your own people to pay for your ass.

If you answered C you are correct.

#137 CdnFlyer on 10.01.14 at 6:47 am

At the tax farm, pushing paper like a good slave. Here’s another file for you sir. Please sign the budget sir……Do these androids know they have a genius sitting beside them. Probly not. They couldn’t recognise genius. They’ve been programmed since grade one. Good thing I was homeschooled by my dislexic alcoholic father.

#138 nubbers on 10.01.14 at 6:55 am

Here’s one for my cousin in Vancouver.

You should buy now because:
a) House prices always go up
b) The government can’t afford to let house prices drop
c) If you don’t, some HAM will snap it up
d) Its cheaper than renting
e) Your wife will leave you if you don’t
f) You still have a foreign passport and can skip the country when in negative equity

I am not going to dignify this with an answer.

#139 Cato the Elder on 10.01.14 at 7:00 am

We are quickly devolving into:

a) A free-market constitutional democracy
b) A pseudo-communist fascist/corporate state

Answer: b

Think all the people dependent on government are suddenly going to have a change of heart and recognize it’s unsustainable AND immoral? Nope. They are going to DEMAND MORE government power. Say goodbye to your remaining liberties when high voting turnout retirees and their entitlements vastly outnumber the productive workforce.

#140 Bottoms_Up on 10.01.14 at 7:00 am

preets been lurking here.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/beware-of-investment-condo-ads-that-promise-hefty-returns/article20857337/

#141 JL on 10.01.14 at 8:08 am

i like the idea of questions, but how about those which help us with our financial literacy. knowing what province has the lowest personal savings rate doesn’t help me be ‘better’ or more knowledgable about my finances. and wouldn’t that be the goal? but a great idea!

#142 Waterloo Resident on 10.01.14 at 8:42 am

Ebola in Texas?
http://www.bloomberg.com/video/u-s-ebola-case-how-can-cdc-be-sure-of-containment-0YDghEDoT1Goq6OWDDSuJw.html

Ebola is out of control?
http://www.bloomberg.com/video/ebola-out-of-control-u-s-case-was-inevitable-garrett-YNxmrxQ3SFSD3KtOSzsthA.html

That’s funny, a few months ago I said that all this would soon happen and everyone was telling me I was a nut-bar and it would never happen in a million years.

Oh well. In 4 years from now when 10% of the population is dropping dead like flies, I think that will have a bit of an impact on housing prices, don’t you think?

#143 mike p on 10.01.14 at 8:43 am

What is the most important rule of having a credit card?
A) find the best travel/points or cashback reward system
B) always make your monthly minimum payments
C) never carry a balance and therefore never pay any interest, while also collecting reward points
D) find the card with the lowest interest rate

Answer C

#144 Italians love real estate on 10.01.14 at 8:44 am

My question would be : is it better financially in the long run to buy:

A) paper

B) gold

C) dirt

#145 };-) aka Devil's Advocate on 10.01.14 at 9:05 am

#122 Ronaldo on 10.01.14 at 12:33 am

09.30.14 at 11:07 pm??? Seriously?

If I wrote that it must have been a dark moment. To be honest, there are times I feel that way. There are few long-time residents who remember and respect the way this town used to be. Yes progress is good on many fronts but I think we can all agree there is much about today that isn’t so good. While we are more “connected” than ever we are more disconnected than ever.

I’m sure everyone has seen a table full of young ladies eyes affixed their smartphones with hardly any recognition of those others at the table. I understand texting allows you to be involved in multiple conversations at a time but in doing so are we really ever paying attention to any one of those relationships, the attention they deserve.

But I digress.

Kelowna is an attractive place to live. Many want to be here. Many move here. Many still want what they had in Toronto for example to be here for them when they move here. Hence we have the big box stores which, like texting is to personal relationships, are a inpersonal shopping experience and costly to the local merchants who provided a level of service the big box stores do not.

But there is another phenomena taking place in Kelowna that causes people to lose themselves.

Many move to Kelowna not ready to retire. They think they will come here and teach us local yokels a thing or two about how to do business. But the fact is business here is tough. I have helped many move here who could not eke out a living quite so handily as they thought they could and I have had to help too good a portion of them fold and move back to from where they came.

We’re not a bunch of country bumpkins. You wanna live, work and play in Kelowna you’d best be ready to pay the price of admission because it’s a competitive town. A LOT of people want to be here… a lot of talented people.

Just the other day I learned that a REALTOR® who had moved here from the “Big City” who is quoted as saying “I’m going to teach you boys how to do this business” etc, etc, etc has folded shop and moved back. He moved here to play more than work and learned that he had to work hard, very hard to complete and ultimately couldn’t. He left silently in the night with his tail between his legs.

What this does to those who move here for the “lifestyle” thinking business will be “a cake walk” is it makes them bitter. They cannot see any longer what it is they came here for in the first place as they lose, lose, lose and lose again on that front they thought they had a competitive advantage. They do indeed become jerks as they have a short fuse such that interaction with them is as such.

I am quite sure they might be very nice people. Unfortunately with their back up against the wall in a corner they tend to get nasty.

Abraham Lincoln once said “I do not like that man. I must get to know him better.” Unfortunately too often there is little opportunity to do so.

I’ve helped many nice people move here and I’ve, unfortunately helped many of them move away. Their disposition between when they arrived and when they left is quite different.

There are a lot of frowns in this town on the faces of those who are ready to leave not because they want to but because they must as they found a side of Kelowna that is not as they expected.

I was once afforded the opportunity to be included in a business venture with a very prominent couple of long time Kelowna business people. I had the idea, they had the money. I very much respect how honest they were with me about what would happen if the going got tough and how they would exercise their options to my detriment if they had to.

Moral of the story is; We are not a bunch of fools here. Come here if you want but be prepared because the ensuing chip on your shoulder if you are not is only going to make it worse for you. It’s a tough town full of very sophisticated competitors who have learned to ply their trade well while maintaining a balance between business and personal like no other place on earth. Why else are we here if not to enjoy our surroundings.

Yes there are jerks we must interact with in life. Too often we don’t take pause to think what might be the cause of their attitude. Unfortunately there is little we can do about it in the case of the preceding.

Kelowna is a tough town, very tough town. The cost of admission and residence is high on many fronts. If you can’t afford it STAY AWAY because like the aforementioned two business people I had opportunity to be involved with told me that day “You are most welcome to be in, but be forewarned, if the going gets tough we are going to do what may not be in your best interests.” It’s a high stakes game my friends… but if you can afford the opportunity to be in the game… if you have to money… if you have the skills… WHAT A FRIGGIN’ AWESOME SETTING in which to live, work and play.

Care to dance?

#146 };-) aka Devil's Advocate on 10.01.14 at 9:21 am

#122 Ronaldo on 10.01.14 at 12:33 am

I meant Dec 31st, 2007, 9:24 am??? Seriously?NOT 09.30.14 at 11:07 pm??? Seriously?

Oh and December, 2007 was a very turbulent time in Kelowna. We were at the very peak of the SHIFT then. It was UGLY. Competitive bids like no other time I have ever witnessed. I knew it was about to crash. It was UGLY man, real ugly then.

I saw a lot of hurt comin’ down the pike in 2007. Fortunately not nearly so much as I though would come then and even far less than Mr. Turner then though was about to take place. And so too will this next capitulation be A LOT less than the doom and gloom predicted on this blog.

But I would not worry for if you life long enough you will see a time when the wrath of this Ponzi scheme economy comes back to roost. But that will be a long, long, long time from now for we (humans) are the masters of retroactive reparation – Not so good at preventative maintenance but damn good at fixing things after we break ’em. Seriously, do you realize how close to the edge we were in 2008? But we fixed it and we will next time too. But eventually there will be more bubble gum and Band Aids® than substance and it will ultimately fail.

#147 Shawn on 10.01.14 at 9:25 am

BlackSheep at 131 respectfully concluded that I lack intelligence when it comes to fractional reserve banks.

***************************************
Dude, you are entitled to your conclusion. It’s fine with me. I am here for two reasons. To teach others and for the entertainment. I feel you give entertainment and need education.

You take issue with my statement that:

“Fractional reserve creates money because loans flow back to the banks as deposits. When it comes back and is loaned out again it still belongs to the depositor not the bank.”

Let’s be even more basic. A bank loans me a million by creating a deposit of a million for me and marking that I now owe the bank the same million.

They have loaned me money that a moment ago did not exist. (the horrors!)

I owe the loan and I own the deposit.

Next I buy a house. If the seller is at a different bank my bank needs to use its cash reserves at the central bank to honor my cheque.

If the seller is at the same bank then my loan is now financed by the sellers deposit.

I can go on with the story…

Read Wells Fargo’s quarterly reports and pay attention to the schedules where they show interest earned on loans and what they pay on deposits and other forms of funding.

Have you taken a basic accounting class?

You have been misled by your partial and alarmist understanding of fractional reserve.

Is it not really ultimately preposterous to think that banks are some kind of machines that generate profits at will from thin air?

What percent of your investments in bank shares? Surely close to 100% given your belief?

For me its roughly 15% in bank common shares.

Keep reading and keep thinking for yourself. Be skeptical and think. Then think some more.

#148 pinstripe on 10.01.14 at 10:04 am

I wonder how much harpo government grant money is available to anyone taking part in this survey?

#149 What about CMHC? on 10.01.14 at 10:05 am

Q: House prices have doubled since 2004, that’s 100% rise. By what % the house price must to drop to come back to 2004 levels?

(a) 100%
(b) 50%
(c) 33%
(d) $200,000

#150 sentry on 10.01.14 at 10:23 am

Any follow-up on Nancy Taza,flogger extrordinaire??

#151 Dogman01 on 10.01.14 at 10:23 am

I know some do not like CBC but I see no quality in any other Canadian MSM outlet.
I watched CTV Question Period last week; only the questions Government wants to be asked, all on target to further the agenda.
Don Pitts and Neil Macdonald; good thoughtful stuff.

US Recovery Impact:
http://www.cbc.ca/news/business/the-perils-of-a-recovering-u-s-economy-don-pittis-1.2779333

No Jobs:
http://www.cbc.ca/news/business/are-robotic-smart-machines-behind-the-jobless-recovery-1.2326104

Minimum income as jobs become obsolete
http://www.cbc.ca/news/business/free-money-for-all-could-jumpstart-the-economy-don-pittis-1.2775647

#152 Randis on 10.01.14 at 10:42 am

1) Which of the following is the most tax-efficient investment return?

a. Interest income; b. Dividend, c. Capital Gains (Ans: c)

2) Which of the following is the excess return in relative to a benchmark index on a given risk level?

a. Alpha; b. Beta; c. Ciabatta ; d. Dakota; e. Ebola (Ans: a)

#153 Daisy Mae on 10.01.14 at 10:48 am

#82 TEMPORARY® Foreign Prime Minister: “#74 Steve”

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

Excellent post. Too funny…

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

Hardly accurate, however. What is ‘Steve’ doing to trigger such bad experiences?

#154 Rational Optimist on 10.01.14 at 10:48 am

112 Cici on 09.30.14 at 11:10 pm

“I would have had four kids no problem if I could have afforded to have been a stay-at-home mom.

But having even having one kid while having to work full-time outside the home frightens me.”

Just to clarify, you would like kids, would have four if you could stay at home, but will have zero since you can’t? I can see the logic, a little. I wonder how many people feel this way.

I wouldn’t go back to the 1960s, as Shawn asserts, but I don’t understand why so many people choose the two-income trap instead of doing something different? Generally, things are cheaper and better now: my parents had to scrimp and save to get a flight back to Europe every couple of years (they were immigrants and thus had little choice but to prioritize this). Now, I can find one for the equivalent of sixty minimum wage hours. Cars used to be death traps that cost a fortune: now, they are safe and efficient and affordable. There’s also a lot more tolerance for things if you’re clever enough to suggest they are a unique “life choice.” For instance, if the father is the one who earns less, he can stay at home, and no one is allowed to be judgmental (actually, they have to praise you nowadays).

Best of all, if you have been fortunate enough to land a middle-class-paying job, you have the benefit of any number of examples of how to continue to run on the consumer treadmill without ever getting ahead. Do the opposite of everything your coworkers do, and I think affording a stay-at-home parent will be a cinch.

#141 Waterloo Resident

“a few months ago … everyone was telling me I was a nut-bar…”

You are a nut-bar.

#155 Shawn on 10.01.14 at 10:59 am

Blacksheep an Money creation

Sorry for another post on this

Blacksheep I have read the bank of England links some time ago.

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Can you remind us if there is any sentence or clear conclusion in there stating that the money creation process by banks process is in way bad, evil, or immoral.

You present the link as if it exposes some evil. Is that just your own conclusion or does the article conclude that?

#156 AfterTheHouseSold on 10.01.14 at 11:12 am

#146 Shawn
“Fractional reserve creates money because…”

Nooooooooooo!!!!! Not again!

“I can go on with the story…”

Nooooooooooo!!!!! I’ll be good. Honest! Just. Make. Him. Stop. (Head between hands, rocking side to side)

#157 Italians love real estate on 10.01.14 at 11:22 am

#145 devils advocate.

Are all you kelowna people as up tight and long winded as you?

If so, I think you Kelowna people need a colonic cleansing.

#158 Detalumis on 10.01.14 at 11:33 am

#153 instability is the reason people don’t become single income families anymore. Unless you work for the public sector you cannot predict that your job will last until retirement. Even being married to a public sector worker you can’t predict that your marriage won’t end in divorce. The best buffer towards divorce, job loss or illness is to stay with two incomes.

#159 Long Time Lurker on Here on 10.01.14 at 11:44 am

@#64 Redditor

Don’t be sad dude. Your mom is already doing better than most of the people out there. I bet that most of the single mom out there don’t even make half what your mom is making. Plus you have a house at yonge/lawrence. You are way richer than you think.

#160 Holy Crap Wheres The Tylenol on 10.01.14 at 11:51 am

#107 Smoking Man on 09.30.14 at 10:33 pm
What should a 55 year old do to ensure you never end up as a living corpse in a nursing home.
A) Exercise and eat healthy
B) Try and work less, pace your self and avoid stress
C) Go with Chinese urban myth, do who and what ever it takes to keep you libido and see drive alive.
D) Eat burgers, Drink, Smoke, Gamble, live for today, and fk tomorrow, cause tomorrow is worse than today. Write a book about your fun so others may follow.
____________________________________________
Smoking Man I thought you gave up smoking for E-cigs? Is this a compromise on the smoking portion of your personality’s vice? If you are only 55 then you’ve still got a lot of years ahead of you my friend. So the A,B, C, portion of your mantra appear logical however the D portion appears a little cynical. Live for today was a mantra for my generation backs in the sixties. It did not however encompass such cynicism, lighten up dude life aint so bad! Your not dead yet!
http://www.youtube.com/watch?v=grbSQ6O6kbs

#161 45north on 10.01.14 at 11:55 am

Every year the feds spend $13 million on financial literacy. We have a Financial Literacy Leader (bureaucrat Jane Rooney).

let me explain how this works. From my 39 years in the Federal Government. The web site has to be bilingual which it is. Not only that all information must be accessible to the visually handicapped. Including the videos. I checked the videos are available as power point presentations in both English and French. Contrast that to Garth Turner who throws up a post a day I’m guessing for an hour of his time. Such spontaneity is just not possible in the civil service.

#162 Mixed Bag on 10.01.14 at 12:10 pm

You (or your wife) are pregnant, and you now plan to stay home for one year to raise the baby and collect EI. If you were a double-income household with both of you earning similar pay, or especially if you are a single parent, the household income for the 12 months after the baby is born will take a significant hit. You review your budget for the upcoming year, and see that you will need to dip into your savings to make ends meet.

From which of the following savings vehicles can you withdraw, so as not to incur a clawback of your EI:

(a) unregistered (or open) funds
(b) TFSA
(c) RRSP
(d) all of the above.

(d) All of the above. While withdrawals from the RRSP are treated as earnings income for income tax purposes, they are not treated as earned income in the eyes of EI. EI contributions were paid in the year the money was earned, and you did not get an EI refund when you made your RRSP contribution, like you did an income tax refund, hence, money taken out of an RRSP is not considered earned income.

Note that withdrawals from your RRSP will be treated as income, and this may reduce the amount of Canada child tax benefit (CCTB) to be calculated for the following year. RDSP may be treated similarly. Withdrawals from TFSA or unregistered savings should not affect the CCTB calculation.

#163 Realitybytes on 10.01.14 at 12:26 pm

Felt bad for Jane, so I sent her a LinkedIn invite.

#164 LL on 10.01.14 at 12:37 pm

In deflation time, how stock market will perform if anything else lost value?

A) The same as today’s market
B) Higher then today’s market
C) The bubble could deflate (deflation)

#165 Flawed on 10.01.14 at 12:42 pm

#96 CREIT on 09.30.14 at 10:07 pm
@#2 Flawed

If you knew what you were talking about, then you would know that 85% of the services you mentioned are paid for by property tax (with the exception of health care).
***************************************

Then perhaps you should tell us why we need to pay 40% in federal and provincial income taxes professor? Unless your telling us:

1. Immigrant families should be paying cash for healthcare
2. Healthcare eats up 100% of provincial and federal taxes

#166 Flawed on 10.01.14 at 12:49 pm

#157 Detalumis on 10.01.14 at 11:33 am
#153 instability is the reason people don’t become single income families anymore. Unless you work for the public sector you cannot predict that your job will last until retirement. Even being married to a public sector worker you can’t predict that your marriage won’t end in divorce. The best buffer towards divorce, job loss or illness is to stay with two incomes.

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

Funny how people are continually saying “unless you win the Public Sector” lottery job.

In the “olden days” Public Service was SERVICE to the country. Not stealing away everyone’s paycheck in the form of a winning the GUARANTEED JOB making tons of money and pension . Real Estate will end badly? Just wait till the country is uber broke, the Public Sector wants its wages and pensions and the govt has to decide Higher Taxes or Lower Public Sector wages/pensions.

It’s going to make the BC Teachers strike look like a 1 hour walkout by comparison. And it’s coming.

#167 Flawed on 10.01.14 at 12:54 pm

#135 Spiltbongwater on 10.01.14 at 5:30 am
Why is B.C. savings rate at -7%?

A) Because we spend it all on pot and 7/11 slurpees.
B) Because our housing is so expensive because HAM is coming in and laundering their ill gotten money in our housing market.
C) Because we keep building social housing for all the free house freeloaders who move to Van because the weather sucks 8 months of the year in their own province and B.C. and the cities will pay for your free loading ass to come here and camp in our parks and do your drugs, with no threat of us sending your ass back to where you came from, so your own people to pay for your ass.
D) All of the above

if you answered D you would be correct.

#168 DM in C on 10.01.14 at 12:57 pm

Cici:

“I don’t see the point of being a slave all day and all night. Call me selfish, but I need free time.”

So given that, you would choose/not choose single motherhood? Otherwise, unless you are married to a moron drooling Neanderthal, I don’t understand why would you be a slave day and night?

#169 Macrath on 10.01.14 at 1:00 pm

#154 Shawn
Are banks is in a way bad, evil, or immoral ? No more than the people gorging down debt playing the leverage RE game.

The chickens will come home to roost and it could be devastating for society in general . The Big D as per yesterdays post. The point being that there is little actual money (savings, cash, pensions, etc) in the system its all debt and ponzi paper wealth that will evaporate in a Minsky moment.

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

#170 Renter's Revenge! on 10.01.14 at 1:04 pm

@164 Flawed:

In Manitoba, the provincial government budget is something like:

Revenues: +$10B
Federal Wealth Transfers: +$4B
Health Care: -$5B
Social Services: -$5B
Everything Else: -$4B

So yeah, lots of money spent on sick and poor people. Probably overseas workers aren’t benefitting much from those services (their families living here, yes, to some extent). But CREIT’s comment (#96) is inaccurate. Most of things you listed (in comment #2) are paid for by provincial governments.

Hope that helps. I’m guessing it doesn’t, but whatever.

#171 Flawed on 10.01.14 at 1:08 pm

Let’s be even more basic. A bank loans me a million by creating a deposit of a million for me and marking that I now owe the bank the same million.

They have loaned me money that a moment ago did not exist. (the horrors!)

I owe the loan and I own the deposit.

Next I buy a house. If the seller is at a different bank my bank needs to use its cash reserves at the central bank to honor my cheque.

If the seller is at the same bank then my loan is now financed by the sellers deposit.

I can go on with the story…

Read Wells Fargo’s quarterly reports and pay attention to the schedules where they show interest earned on loans and what they pay on deposits and other forms of funding.

Have you taken a basic accounting class?

You have been misled by your partial and alarmist understanding of fractional reserve.

Is it not really ultimately preposterous to think that banks are some kind of machines that generate profits at will from thin air?

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

No it’s not preposterous. Banks do not make anything and provide the least value of any business. This is well documented.

And thank you for showing how you believe in this as well as the criminality of “printing money at interest”.

Accounting? Yes please go take a course Shawn. Because I have yet to have anyone tell me how EVERYONE (people, all levels of govt etc) in the world can have such gargantuan debt if everything is supposed to be a simple “accounting” zero sum game.

Its easy. It’s not. Banks/Govt create money/credit out of thin air and charge interest on said “thin air money” effectively charging money for money that does not exist (the interest money which does not exist).

You always read “The interest alone in the debt is blah blah blah”. Yes of course it’s high. And it’s an accounting illusion. That interest money never existed in the first place.

But hey…..I have bank shares…..so while the rest of the world melts in a sea of created out of thin air liquidity which the average person never sees (unless its a loan) I’ll be JUST FINE with my bank shares…….

#172 not 1st on 10.01.14 at 1:14 pm

Kelowna is simply a trap for transient people and tourists caught between calgary and vancouver. The money lives on the hill and only part time.

#173 bigtown on 10.01.14 at 1:22 pm

In how many U.S. states is gas under $3.00 a gallon?

a) five
b) one
c) 26

ANSWER: C in TWENTY-SIX state gas is under $3.00 a gallon.

It will be very challenging in Canada to go up against our American friends in manufacturing when oil is factored into the equation.

#174 Blacksheep on 10.01.14 at 1:23 pm

I was going to leave this issue alone, but since you asked.

You’ve repeatedly posted incorrect information on this issue, for what ever reason. When cornered and unable to explain why, you attempt to shift focus, using adjectives describing your assumptions, as to ‘how I feel’ about these facts, as stated by the BOE.
—————————————–
“Can you remind us if there is any sentence or clear conclusion in there stating that the money creation process by banks process is in way bad, evil, or immoral.”

“You present the link as if it exposes some evil. Is that just your own conclusion or does the article conclude that?”
—————————————–
I have no ‘feelings’ on this subject. I’m simply quoting the BOE so others can learn how the money system, actually works. While you’ve made repeated efforts to conceal this information, I…want people to read this document and draw their own conclusions.

I’m only a messenger. If you disagree with the BOE, take it up with them.

#175 Shawn on 10.01.14 at 1:48 pm

Blacksheep has accused me of posting incorrect information.

Blacksheep, to borrow a phrase from Richard Nixon:

If the Shawn says something, it is correct

Actually one time I thought I was incorrect but it turned out I was wrong.

#176 None on 10.01.14 at 2:03 pm

#57 WhiteKat on 09.27.14 at 12:20 am
Keep on living the Canadian dream. I used to think I was Canadian. Now I discover I am …cough…a ‘US person’, which trumps my Canadian citizenship from birth,

——-

Sure, you were born on American soil, therefore you became an American at birth by being born physically in the US! You were a Canadian after the fact really by virtue of your parent’s citizenship. Your parents should have educated themselves on the citizenship rules of the country they had you in. Why is it you think your parent’s ignorance about US citizenship laws means the US is screwing you? I admit it is crappy to find out so late in life you are a US citizen but frankly, get mad at your parents, not the US. Plus, I assume you knew you were born in the US, so why didn’t you ever stop to think, ‘hey maybe I should check into that?’ I don’t like the way US taxes by citizenship vs. location but ultimately, that’s why they give you the ability to give up your US citizenship. The fact that your parents never knew the ramifications of having you in the US is not fault of the US gov’t. In the end, if you are a dual US-Canadian citizen and you don’t like the way the US handles taxation, give up your US citizenship, but yes, there is a cost to doing so. Again, nothing to do with the Canadian government, and more to do with your parents never properly checking into things.

#177 Italians love real rstate on 10.01.14 at 2:11 pm

Quite honestly , it’s days like this , regarding the financial markets, and the recent ones that have preceded it, that keep me from investing in them.

I’m sure I will draw a ton of condemnation for this comment but so be it. It’s honest.

I love my dirt and bricks firmly on solid ground

Days like this provide the opportunity of investing in assets when they cost less. If you appraised your house every day it would be the same ride. — Garth

#178 Vermithrax on 10.01.14 at 2:11 pm

I need to restore my credit score in order to:

a) Get a new credit card.
b) Get a loan for a down payment on house.
c) Upgrade my SUV with a new lease.
d) No, you don’t–you need to forget about credit, save money *first* this time, and stop wasting all your cash on junk from Wal-Mart.

Answer: No brainer.

#179 joe schmoe on 10.01.14 at 2:12 pm

Interesting read.

The xenophobic/blame the government posts make me chuckle.

It’s Harpers fault I over paid for a TV and used a credit card that I can’t pay down.

#180 Rational Optimist on 10.01.14 at 2:44 pm

#157 Detalumis

“Even being married to a public sector worker you can’t predict that your marriage won’t end in divorce. The best buffer towards divorce, job loss or illness is to stay with two incomes.”

I can understand the desire to maintain job skills for after a divorce. Single-income households actually do have lower divorce rates, however (I’ll search for link…). Not hard to see why- many (but not all) of those people would be religious, meaning certain values and maybe strong social connections. But, also, the two-income rat race is a stressful exercise that causes tension in marriages, and can lead to their failure.

I’m not suggesting that we should return to the bad old days where one parent (and we know which one) had to stay at home and raise kids, whether she wanted to or not. I’m talking to the people who “wish” one parent could stay at home- it’s possible. Of course, it would mean approaching things from a different angle than everyone else does.

As for job loss- I fail to see how a two-income household with a savings rate of anything less than 50% of net income is in a better position in the case of a job loss or illness than a single-income household. In the case of the single-income household, the second parent can take a job while the primary breadwinner is looking. That’s obviously not the case for the two income family.

#181 Kenchie on 10.01.14 at 2:57 pm

New ways to screen out deadbeats in loan applications.

http://www.bloomberg.com/news/2014-10-01/lender-charging-390-uses-data-to-screen-out-deadbeats.html

#182 Vancouver/Toronto R.E BULL on 10.01.14 at 3:02 pm

China says ‘mind your own business’.
Well folks, a time of another bull-run is nigh.

Who is with me.??

#183 Setting the Record Straight on 10.01.14 at 3:05 pm

@77
RRSPs should only be counted for around 60% of the indicated amount. All assets should after tax before being added together.

I understand your logic. But there is also some value to the insurance option. If your other income declined and lowered your tax rate, the after tax value of the RRSP increases.

#184 Italians love real estate on 10.01.14 at 3:14 pm

#176 Italians love real rstate on 10.01.14 at 2:11 pm
Quite honestly , it’s days like this , regarding the financial markets, and the recent ones that have preceded it, that keep me from investing in them.

I’m sure I will draw a ton of condemnation for this comment but so be it. It’s honest.

I love my dirt and bricks firmly on solid ground

Days like this provide the opportunity of investing in assets when they cost less. If you appraised your house every day it would be the same ride. — Garth
——————-

I do not doubt that you are right about the opportunity to buy assets when they cost less but question that the same volatity would exist if I appraised my house everyday.

I remember a post from Bigrider about a red and green sign on front lawns telling people what their homes are worth second by second . Seem to be same line as your comment Garth.

The truth however is homes are not appraised day to day and are much more illiquid. You cite illiquidity as a disadvantage but , because human nature being what it is ( sell low by high) I see it as an advantage that RE enjoys.

To each their own I guess

#185 Son of Ponzi on 10.01.14 at 3:19 pm

Protests in HongKong.
———-
Black Swan?

#186 Blacksheep on 10.01.14 at 3:29 pm

“If the Shawn says something, it is correct”
————————————
This is how, abject failure to defend one’s platform, looks.

#187 Toronto_CA on 10.01.14 at 3:51 pm

Two near identical mutual funds are available from your employer’s defined contribution (DC) plan. One has a Management Expense Ratio (MER) of 2.75% and the other is 0.75%. After 30 years, assuming both funds earn 8% per year before the MER is applied, what is the difference in the ending value if you contribute $10,000 each year?

a) Less than $2500
b) Around $10,000
c) More than $10,000 but less than $100,000
d) More than $300,000

The answer is (d), worth noting because so many Canadians pay the highest MERs in the world and don’t even know we’re doing it.

Sidenote, rough time for the stock markets lately. Is this the correction we’re due for?

#188 Victor V on 10.01.14 at 3:56 pm

Pimco says Poloz could be forced to renew rate hike warnings

http://www.theglobeandmail.com/report-on-business/economy/pimco-says-poloz-could-be-forced-to-renew-rate-hike-warnings/article20874849/

The Bank of Canada will be forced to renew warnings of the possibility for higher interest rates in order to halt a “bubble” from forming in the housing market, according to Pacific Investment Management Co.’s Ed Devlin.

Governor Stephen Poloz’s removal of language about the potential need to raise rates from the central bank’s policy statements has helped to weaken the currency, spurred inflation and contributed to a pickup in exports. At the same time, the rising home prices and debt levels that caused Poloz’s predecessor Mark Carney to insert a “hawkish bias” into official statements have continued to climb.

#189 Cici on 10.01.14 at 3:58 pm

# 153
# 167

Well, it all comes down to workload. My boyfriend and I are DINKs (double-income no kids), educated with good salaries, but still find the pace of life in general to be quite hectic even without kids. We both work full-time, are by no means rich (cost of living is exorbitant, from food to shelter to services to clothes and activities).

The 9-to-5 thing leaves just enough time to go home, cook, clean and do laundry. By the time the lunches are prepped and the kitchen is clean, it’s pretty much time for one TV show or a one chapter of a book, and then in to bed we go (and usually quite late at that). If there were kids in the picture, we’d be getting up even earlier, going to bed even later, saving less money, never sleeping in and the house workload would double.

Having kids would mean I’d have to completely give up this blog, pay a bundle in after-school or nursery care, feed my family take-out and pre-made crap, give up free-time activities like sailing and tennis (the boyfriend doesn’t like either so they couldn’t be “family activities”), live in a tiny, dinky apartment (if we were on one income only), and/or go majorly in debt.

Personally, I don’t understand how people do it. Or why they feel the need. I’d only have a family if I could afford to be a stay-at-home mom in a decent-sized rental or house, or to just work part-time a couple of days a week. Not the case in most Canadian cities.

#190 TheManwhoStaresatSheeple on 10.01.14 at 4:03 pm

If the industrial powerhouse Germany has a population of 80.5M+ and is served by 4.6 Million public servants (three levels of government) how many public servants Canada (with population of 35.3 Million as of Q1,2014) has:

a) many more than needed;
b) way more than needed;
c) 1,711,200 more than needed;
d) 3,732,200 as of June 2014;
e) all of the above.

Cookie for the winner.

#191 Victor V on 10.01.14 at 4:07 pm

Housing bubble will force Bank of Canada to renew rate hike warnings soon, Pimco says

http://business.financialpost.com/2014/10/01/housing-bubble-will-force-bank-of-canada-to-renew-rate-hike-warnings-soon-pimco-says/

The Bank of Canada has frozen its key lending rate since September 2010, the longest pause since the 1950s. The central bank’s key interest rate will probably remain at 1% until the second half of next year, according to economists surveyed by Bloomberg News.

Devlin said Canadian housing prices may be 10% to 20% overvalued and low interest rates may spur price levels to as much as 30% when adjusted for inflation, opening the door to a sharp decline.

“Then you have a swathe of people with negative equity on their house,” Devlin said. “You have all the kinds of problems we have down here in the U.S.”

#192 Shawn on 10.01.14 at 4:27 pm

Baa Baa Blacksheep

“If the Shawn says something, it is correct”
————————————
This is how, abject failure to defend one’s platform, looks.

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

That was just a little joke to make your head explode.

You accused me of providing incorrect information.

Quote something I have said and explain why it is incorrect.

Bank of England has not notified me that I said anything incorrect.

I agree with your statement that

I…want people to read this document and draw their own conclusions.

Certainly they should not follow your conclusions, among which were:

Most borrowed money comes from individuals, corporations”

“Everyone with money in the bank is a lender.”
————————————————–
Shawn. Please stop lying. Here is the BOE link, I’ve supplied to you for the forth time?

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

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

Nothing in that link refutes my observation that deposits are owned by individuals and corporations.

Banks create money (deposits) but the deposits are owned by individuals and corporations. Banks cannot create money without customers and that is also explained in your link.

Nothing in the article refutes the plain fact that for a bank loans are funded mostly by deposits which are owned by (owed to) individuals and corporations.

I explained how a bank can create a deposit by giving me a loan. I then owe the loan and own the deposit. When I spend the deposit on a house someone else owns the deposit. I still owe the loan. The bank does not own the deposit even though it created it. The bank owns the loan.

I am trying to educate you and others. You are badly out gunned here my friend.

Anyhow, one does not need to know anything about fractional reserve banking in order to make money. Go forth and make some money. Thinking that banks are evil is detrimental to wealth. Banks are a tool to use. And make a handy investment too.

Have you ever had any money in the bank?

#193 Bill Gable on 10.01.14 at 4:45 pm

“The UK remains the fourth most highly indebted major economy in the world after Japan, Sweden and Canada, with total non financial debt of 276pc of GDP. The US is not far behind with debt of 264pc of GDP.

However, the real stand-out is China, which since the crisis began has seen debt spiral from a very manageable 140pc of GDP to 220pc and rising.

This is obviously still lower than many developed economies, but the speed of the increase, combined with the fact that it is largely private sector debt, makes a hard landing virtually inevitable.”

Link: http://tinyurl.com/nfetwkl

#194 Montellino on 10.01.14 at 4:48 pm

Guys you are going about this the wrong way. The target audience is the avg Joe and as soon as you start throwing big terms around and adding financial products to the mix the are just going to glaze away and and disregard your input as one would shun the goofey accountant wearing that stupid green visor..

The question to ask is:

Your buddy drives a UPS delivery truck making about 20 bucks an hour. He just bought a $650K house with 5% down. Will he be able to pay it off?

a) Yes
b) Hell no

#195 Westcdn on 10.01.14 at 5:02 pm

The questionnaire that sticks in my mind:
An alien from another world gives you (male) a device that it says will answer and solve any problem of mankind. As a guy, do you –
A: immediately turn it over to the government for the benefit of all
B: contact various oligarchs and offer it for sale (with a royalty)
C: keep it to yourself and try to become an oligarch
D: play around with it for a while then take it apart to see how it works
If you are Joe average like me, “D” has appeal. I like this dissertation: http://www.acting-man.com/?p=33237

#196 Vancouver/Toronto R.E BULL on 10.01.14 at 5:07 pm

#189 TheManwhoStaresatSheeple on 10.01.14 at 4:03 pm
If the industrial powerhouse Germany has a population of 80.5M+ and is served by 4.6 Million public servants (three levels of government) how many public servants Canada (with population of 35.3 Million as of Q1,2014) has:

a) many more than needed;
b) way more than needed;
c) 1,711,200 more than needed;
d) 3,732,200 as of June 2014;
e) all of the above.

Cookie for the winner.

E…..?

#197 Happy Renting on 10.01.14 at 5:07 pm

#179 Rational Optimist on 10.01.14 at 2:44 pm

A stay-at-home-parent (anything longer than 12-18 months) will have a hard time re-entering the workforce. Employers only want to hire people who already have a job (or, second choice, have been unemployed three months or less. And very few employers consider child-rearing to be relevant “work”.)

#198 bigtown on 10.01.14 at 5:09 pm

WHAT HAPPENS IF PEOPLE DON’T SAVE ANY OF THEIR INCOME?

a) they buy really fancy condos with lots of stainless steel appliances and hardwood floors and granite counters
b) they must put their children to work at either Burger King or Tim Horton’s
c) the economy is de-capitalized and living standards are eroded to poor country levels

ANSWER: C) the economy is de-capitalized and living standards are eroded to poor country levels

#199 Nomad on 10.01.14 at 5:10 pm

Today stocks fell a little more.

I armed up myself with shortbread, a coffee, a banana bread, placed along and right below my keyboard, and set market limit orders. Notifications started trickling in. I smiled of satisfaction. Now amongst other things, I own some A&W income fund that yields 5.7%. I’m hungry.

But colleagues are telling me “You see you show buy a house. Over two months your stocks will be down 5% while a house would be up 5%”.

People don’t get it.

I’m starting to think the one thing that’ll get them to invest is fear. Realtors employ fear-tactics, financial media maybe should start to. Something like:

1- your cash is loosing value
2- you will have a terrible retirement
3- you neighbor get 10x more post-tax income than you
4- tell them to list their condo, that they’ll have to take it off the market after it doesn’t attract interest for 30 days.

#200 DM in C on 10.01.14 at 5:18 pm

Cici:

“Having kids would mean I’d have to completely give up this blog, pay a bundle in after-school or nursery care, feed my family take-out and pre-made crap, give up free-time activities like sailing and tennis (the boyfriend doesn’t like either so they couldn’t be “family activities”), live in a tiny, dinky apartment (if we were on one income only), and/or go majorly in debt.”

You don’t say where you live. But I am a female exec and have two kids, a spouse — and we don’t feed the kids pre-made crap, we have a beautiful house (after renting the same for 10 years), had them in after school care, activities, etc. And made room for friends, family, movies, dinners, etc. You may not know how it happens, but it just does.

When the first was little, hubby worked backshift, watched the kid, went to university during the day, and I worked, and had the rugrat at night. You make time. I’m not trying to convince you one way or another – you make decisions based on your own life and experience.

It can be done, on your own terms. Without slavery.

#201 Habs76-79 on 10.01.14 at 5:31 pm

With sky high mortgages (even based to relative incomes) and all sorts of other debts, I could not stomach such. The future is NOT KNOWN! I was in a previous marriage that I and my then wife were all feeling WOULD BE TILL DEATH DO US PART! It felt great for awhile but the bottom fell out in time and soon we split, WITH A MORTGAGE that neither her nor my income alone could fund. She packed up and moved out. Left me holding the bag of all our debts accrued together. I tried to cover these costs for a few months. But it was proving fruitless. I told my ex that I was going to have to declare bankruptcy and she being on the title of the mortgage and other debts would suffer too. Her reply “I DO NOT CARE!” She was shacked up with another guy by then.

Thankfully I as able to sell the place and make enough money to pay off most of our debts including the mortgage. IT WAS THE MOST STRESSFUL THING I EVER HAD TO GO THROUGH!

The financial worries ate me alive, adding the emotional mess of dealing with a separation and divorce was only more fuel on the fire.

My point here, is that going into such stratospheric levels of debt that I read, hear and see all too many people do today is utterly nuts and nothing in life, not any pie in the sky wants, nor desires, nor any toys are worth the possible bottom falling out, in any way life can kick you in the proverbial face!

Accepting that one can live nicely within their means and have much less stress for such, is worth more to me and my household today than any of the CRAP PEDDLED TO US AND THE NEVER ENDING OFFERING AND FILLING UP OF DEBT!

Nobody here knows what good or bad can happen tomorrow. If lucky none of you/us will have to deal with the crappolla hitting you. But some or many of you/us may. Too many wants (most needless), too many entitlements all equals too much accrued debt. IT IS NOT WORTH IT ANYMORE AT LEAST FOR ME!

I’m not suffering, I ain’t rich and that’s ok. I have some nice things, able to live nicely and yes I too have things I dream about but no longer lust for. It’s all ATTITUDE! Getting kicked in the proverbial teeth of life especially financially helps adjust one’s attitude.

Peace Out!

#202 Blacksheep on 10.01.14 at 5:36 pm

Shawn # 191, on Oct/1/14

“Certainly they should not follow your conclusions, among which were:”

“Most borrowed money comes from individuals, corporations”

“Everyone with money in the bank is a lender.”
—————————————
Yo….Smart guy, your criticising your own words!
—————————————
Shawn # 150, on Sept/30/14 copy and pasted, with relevant portions in {……….}

“But almost all countries (the governments) are net borrowers. {Most borrowed money comes from individuals, corporations} and pension funds.”

“{Everyone with money in the bank is a lender.} Everyone with RRSPs that include bonds and fixed income is a lender. Pension plans are usually effectively lending 40% of their money.”
—————————————
Do you even understand what your typing? I’m done trying to have an adult conversation with someone, this ignorant. The BOE message is out there and that’s all I wanted.
————————————-
“I am trying to educate you and others. You are badly out gunned here my friend.”
————————————-
Not to day dude, not…to…day.

#203 };-) aka Devil's Advocate on 10.01.14 at 5:43 pm

“Realtors employ fear-tactics” – NOMAD @ #198

LOL… yup sometimes all it takes is a casual brushing back of my jacket to reveal the shiny blue steel of my glock… };-)

#204 bob on 10.01.14 at 5:46 pm

So now it’s here to yak about stuff that affects all our lives, impart some of the things I’ve learned and, especially, to irritate realtors, mutual funds salesguys, bank employees and bullion-lickers.

Garth, this is why I read your blog for the humor. Bullion-lickers, nice!

#205 Snowboid on 10.01.14 at 5:59 pm

#122 Ronaldo on 10.01.14 at 12:33 am…

I like this one, also from Castanet…

Post by Devil’s Advocate » Feb 24th, 2008, 1:33 pm…

“…So we are liquidating our assets in preparation for our move toward being, at best, part time residents of Kelowna. We just don’t want to put up with the B.S. anymore…”

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

“…After close to 40 years here it is a shame that we have to say “our city sucks!”

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

Note to Nemesis…

Forgot to mention, I don’t think the GG of Kelowna real estate was around in 1777!

#206 bdy sktrn on 10.01.14 at 6:26 pm

#196 Happy Renting on 10.01.14 at 5:07 pm
#179 Rational Optimist on 10.01.14 at 2:44 pm

A stay-at-home-parent (anything longer than 12-18 months) will have a hard time re-entering the workforce.
—————————-
jeeeeees, man, really?

so i guess 15 yrs is a tad too long?

i went out in 1999 and i figure 3-4 more years until the kid and wife don’t need me so much.
it will be almost 20yrs for me. ack!

but if you can sell there is always a job/s for the choosing, specifically if you can sell tech/robotics/industrial etc

personally i’m hoping for a smooth coast into early retirement for both of us.

it’s amazing what control of spending can accomplish.

#207 shawn on 10.01.14 at 6:39 pm

Blacksheep

I would rather be somewhat ignorant to you than ignorant of finance and banking.

Though I never accused you of lying as you did me so not sure I am the ruder one here.

Bank of England document explains things. Fractional reserve alarmists interpret it all wrong.

But do buy bank shares.

#208 Saturday Link Roundup: An Update On Automodular - Financial Uproar on 10.04.14 at 11:00 am

[…] something I’ve been saying for years now. We’re throwing all sorts of resources towards teaching people financial literacy (including, according to Turner, $20 million per year from the feds) with very little to show for […]