The mortgage that eats

BURRITO modified

Ever noticed how this blog sinks into generational warfare? The wrinklies think the young are gonzo for lusting after property, trading freedom and mobility for debt and obligation. The kids think the geezers are selfish and hectoring, saying they can never have what their parents got so easily.

Average houses that cost a million are screwing up social values and personal goals. When most people should be striving for life-long financial security for their families, instead they’re obsessed with getting real estate. This strategy never ends well. We can see that already.

Frank and Faye own a bung in the west end of Toronto, which their two adult children covet. “Isn’t gonna happen,” says Frank. “It’s all we’ve got, basically.” They paid $680,000 for it ten years ago, and figure it’s worth about a million now, mostly land value. Frank retired two years ago, not his idea, at age 61 and his defined-contribution company pension plan had a grand total of $220,000 in it. They were unable to save any money in RRSPs or TFSAs because Faye stayed at home to look after the kids, and Frank worked his tail off to pay down the mortgage. That happened the year before he was punted from Loblaws.

“That was always the thing for me. Get rid of that debt, and I thought we’d be fine. Now, honestly, I’m not so sure.”

You bet. The $220,000 is already being depleted (it’s taxable), and besides that they have only $1,100 a month between them in CPP. It’s ironic. On paper they’re millionaires, thanks to a seven-figure house and a market windfall. In real life, they can hardly afford gas, groceries and property taxes, and worry every single day about what happens when the cash runs out. After all, twenty or thirty years of life lie ahead.

Frank wonders what things might have been like if he’d saved or invested some of the money he put into the mortgage (it totalled over $800,000 during those ten years, plus the hundred they put down), then just sold the house when he lost his job. He thinks about selling it now, but Faye won’t abide it. So he wrote me.

“I always worry if we have enough to survive. So here is my question, I see a lot of advertising about reverse mortgages for retired couples like us who own their home mortgage free. What is your opinion on these mortgages if retired couples run short? Are they a good option?”

Some people think reverse mortgages are about to explode in popularity. They’re probably right. In fact, a whole new generation of savings-poor, house-rich people is rapidly approaching middle age in an era when corporate pensions are fading and real estate has never been such a burden. What, exactly, do these people think will be financing their decades-long retirement, once they pay off those epic mortgages?

If they believe the house will support them, I sure hope they know the facts.

A reverse mortgage sounds idyllic, the way the happy, white-haired, affluent people on the TV commercials tell it. If you’re over 55 you get to cash in 50% of your equity, as a lump sum or as income, pay no tax on the proceeds, and never pay off the debt so long as you continue to live in the place and don’t croak.

CHIP modified

You can use the money to renovate, to travel, to invest, to pay bills or to shower on your deadbeat offspring. The cash received is not reportable income, so it won’t result in a clawback of your government pogey. If interest rates rise or the house value falls, it’s not your problem – there’s no repayment required. Besides, houses always go up, right? So surely over a few years the added appreciation will just balance off the equity you sucked out.

Sounds appealing to many people. For some of them, it’s a solution. For many others, a trap.

Here’s why. A reverse mortgage is just that – a debt that grows and eats your equity, instead of one you pay off, increasing equity. The longer it’s in place (and most people take one out for their remaining lifetimes), the bigger is swells – since interest is steadily accumulating – and the more that will have to be repaid when you sell the house or depart this vail of tears.

Reverse mortgages have interest rates significantly higher than conventional ones (almost double in some cases) plus big set-up fees – money deducted from the cash amount you receive (and yet which is amortized up over the years ahead). There can also be a hefty penalty if you decide to retire the debt early. Worse, if you decide to up and die, it can often take longer for your kids to settle the estate, sell the house and get the cash than the reverse mortgage company gives you to repay the loan and accumulated interest. It’s also possible the estate may owe more money to the reverse mortgage dudes than the house is worth – leaving the heirs ziltch.

Remember that every month a reverse mortgage is in place, regardless of how much you borrowed, your equity is falling and your debt is rising. So if after a decade or so you decide you want to sell and downsize, you might not have enough equity left to do so. Or if house prices correct and the market value of the home fades, people with reverse mortgages could easily be trapped in those properties forever, unable to sell and move, while seeing their only asset robbed of value.

There are better options. For example, Frank and Faye could sell, take their million, invest it prudently and add $70,000 a year to their income – more than enough to rent a better place. They could use their equity to secure a HELOC, which will not grow in size so long as they make interest-only payments. They can sell and downsize to a $400,000 condo, investing the remainder. They could sell the home to their children on condition they get to stay there in a suite.

The reverse mortgage? The last option they should consider. Unless they hate their kids.

216 comments ↓

#1 AACI Home-Dog on 03.22.15 at 11:58 am

I imagine that when the equity is all vaporized, the mortgage company can kick out the wrinklies & sell the house ?

#2 Drill Baby Drill on 03.22.15 at 12:01 pm

When interest rates begin to rise and home prices fall with more and more geritol swilling boomers wanting to offload their homes supply and demand tells me that the terms for reverse mortgages will only get more stringent. What happens to these homes if the elderly tenants do not keep up with maintenance ?

#3 Johnny D on 03.22.15 at 12:03 pm

Off the topic of this article but I have a friend who is about to take the plunge and buy a house (with pretty much no money to put down)… his sexy realtress pulled all the stops, bragging how much she sold this month so far and convincing my friend that this one house will sell in two days if he doesn’t pull the trigger… Anyhow I asked him if he signed a BRA ( buyer representation agreement) and even though he said he did not yet, he also said his realtress was boasting about how they were going to make it MANDATORY TO SIGN BRA’S in the coming year. What do you know of this? Who is making it mandatory? Certain agencies such as remax etc etc. or can they actually pass a law that makes it a must?

#4 LTL_FTC on 03.22.15 at 12:06 pm

Often wondered whether, as more Boomere face this decision, if reverse mortgage vendors might need to make their offerings more palatable. Seems like too sweet a deal for the vendors right now and that competition might make the reverse mortgage option less of a sucker play.

Wishful thinking?

#5 Chickenlittle on 03.22.15 at 12:11 pm

A million $ is not a lot of money anymore. At least they have that. My generation will probably OWE a million at 61.

#6 Nora Lenderby on 03.22.15 at 12:14 pm

These people definitely need your Rule-of-90, Mt. T.

Or, being unkind: “Sure, why not let the finance hyenas in the door just to renovate the property in question?”

Renovate the property to the ultimate benefit of the hyenas, that is.

Another discussion here:
http://www.theguardian.com/money/2014/aug/02/equity-release-retirement-property-pros-cons

There seems to be no end to the “financial innovations” that are contrived to part people from their money. True, some are useful and contribute to progress (e.g. stock markets and ETFs) but the best, from the finance company’s POV, are the ones that prey on the somewhat lazy.

It’s a pain, selling up and moving. But a house is a machine for living not a life. If you aren’t working, living in a large city is not really a necessity and for someone of limited income is probably ruinous.

Advice? Cash out the house and move somewhere less expensive. Before the market moves down, which it could well do.

#7 waiting on the westcoast on 03.22.15 at 12:21 pm

My parents are in this same boat… they have a 7 figure acreage that takes up ~ 3-4 hours a day in the spring/fall to keep up. They love it but live on the CPP/OAS train and a small line of credit for certain extras. My sister/I pay for the odd trip for them and they live a pretty frugal life otherwise.

I have told them to downsize to a regular house/lot (or even 1/2 to 1 acre) or even just live a totally mobile life (rent in Italy, visit sister in Phoenix, rent in Argentina, stay in Van with us). They could invest the monies and basically travel the world without cost. But it is their “castle” and they cannot be parted from it…

I know they have been blessed with having their asset rise in an environment of the lowest interest rates and increasing house horniness but they cannot take advantage of it for the somewhat similar reasons that moist house virgins have to participate (their “castle”).

They will never sell (unless forced due to ability to care for home/themselves)… even as the market declines and they lose value with the property.

See – house horniness abides

#8 We the Sheeple on 03.22.15 at 12:24 pm

Reverse Mortgages: You’re richer than your think.

#9 mdm on 03.22.15 at 12:25 pm

First! House rich won’t pay the bills for sure. Thank you Garth for your wisdom and advice, of which I am starting to follow.

#10 JSS on 03.22.15 at 12:37 pm

The stories here are so interesting, such an addictive blog.

So I’m guessing the banks profit out of reverse mortgages? If so – how? When you get a reverse mortgage, does the bank now own the house?

Lenders make interest on the funds advanced, which accumulates rapidly. Yes, they also hold a first mortgage on the property. — Garth

#11 Randy on 03.22.15 at 12:40 pm

Reverse Equity Mortgage.

#12 Fort Mac Flatlander on 03.22.15 at 12:44 pm

Good afternoon Garth and fellow blog dogs,

This predatory lending will lead many into a trap that they will be unable to escape. Is there any regulations on maximum interest rates or maximum percentage of value of the home these can accumulate to?

#13 Simplyput7 on 03.22.15 at 12:45 pm

They should sell their home and RENT a condo, since most of the condos built in the last 5 years in the GTA won’t be around for another 15 – 20 years because they are already starting to fall apart and have maintenance fees that are almost as high as rent. They could also buy a freehold townhouse preferably an older townhouse without too many levels and avoid the maintenance fees.

#14 Squirrel meat on 03.22.15 at 12:47 pm

Reverse mortgages are going to explode in popularity. Boomers will hang onto their houses at all costs….but spend the equity any which way they can reliving those good times from years ago. Big potential to end up underwater… tough cookies kidults.

#15 rosie "moving forward" in the knowledge that, "this won't end well" on 03.22.15 at 12:48 pm

Johnny D

According to this, the bra is already mandatory. I read this and I would never sign one, unless I was the agent of course.

http://www.torontorealestateboard.com/buying/plain_language_forms/pdf/300_PL.pdf

No, it is not mandatory. And never sign one unless you have altered it to cover only one property you are offering on. — Garth

#16 Doc on 03.22.15 at 12:48 pm

Would this older couple not be assuming too much risk with the 60% growth and 40% fixed income balanced portfolio? They won’t be making 70K a year if they’re in the 60% fixed income and 40% growth camp. What ratio of growth stuff vs fixed income is appropriate as age increases ie. do you have something like “the rule of 90” pertaining to non real estate investments?

Being in your early 60s is hardly too old for a balanced and diversified portfolio. The more that people load up on fixed income in a low-rate world the less income they’ll have. Anyone with decades to invest (as these people) must consider a portfolio with a reasonable growth component. The days of clipping coupons are over. — Garth

#17 Fort Mac Flatlander on 03.22.15 at 12:49 pm

News from the Mac. There are many layoffs that are going unreported or are contract positions that are not being renewed. I’ve been pricing out condo’s and so far we have seen a 15% drop in comparable units since last spring.

Now there is news of ever increasing oil inventories south of the line and a tax incentive in the Dakotas that will see a rapid increase in production in June. Bad days ahead for the C$ and Alberta house prices.

#18 Obvious Truth on 03.22.15 at 12:51 pm

Faye. People are always afraid of what they don’t know. They take comfort in doing what most others do.

Advertising is often your worst enemy. Somebody Selling you something that makes other people money. Not you.

Buying a bond will make you money. Buying equities that have dividends and grow will again send money your way. No cost or sales pitch. Perhaps just an advisor like garth looking to give you the best outcome for your investable dollar.

And you now know that a house is a cost. Teach that to your kids. Show then that they too have other options. Make them part of the process. It a chance for you to teach because ckearly nobody is doing that anywhere other than this blog.

The money will always yours. The freedom to do what you want with it. And then it goes to your kids. Why give that away. So much of the income you generate could be made tax free it’s crazy. Actually it’s exciting. And you kids knowing what to do with the money when it becomes theirs is ckearly priceless.

#19 Moses71 on 03.22.15 at 12:53 pm

You’re correct in saying this couple getting a reverse mortgage is a point if they hate their kids, but please remember this is the stance from your financially educated perspective. No brainer for you.
However, they may opt for this path for reasons opposite of hating those offspringsers. They will get the reverse mortgage so they can bounce the grandkids on their knees and be close to their gene passers so the king and queen can remain close to them in their perceived look at ma and pa in their McMansion. Look at how well they did and how far they came. My oh my! The stay at home wife will get her way. Just an opinion

You reap what you sow. — Garth

#20 Mean Gene on 03.22.15 at 12:57 pm

Dump the house and move somewhere else that’s more affordable, pretty simple choice.

6 months a year somewhere warm and the other in an Ontario township sounds idyllic to me.

Work is done, time to enjoy life before the lights go out.

#21 Retired Boomer - WI on 03.22.15 at 12:57 pm

Look at the CHIP advertisement.

See the smiling man. What the wife doesn’t realize (as she won’t hear of ‘selling’ their home) is that the old man has laced her coffee…

Soon, he will be able to unload the place, live well on the proceeds, and who knows what for his kids.

Assuming the new toots he finds doesn’t cause a myocardial infarction leading to his own quick demise.

Oh, the possibilities of a “perverse mortgage.”

#22 whitey on 03.22.15 at 1:01 pm

Ditch the house (if his wife’s name isn’t on the title) , pay her out and send her packing if necessary, invest the rest and live happily ever after.

Something tells me she might change her views once the millstone is lifted from her neck and they can both breathe easier. She could take a well deserved vacation after devoting a lifetime to the home and brood.

Life will be better once they crush those parasite children’s hopes of taking over the house as well, as long as they don’t come sniffing around for a down payment!

We live in a strange culture where so many of the young people feel like the world and their parents owe them something. Mom and dad could have done them all a service by extinguishing that attitude during the rearing years.

#5 chickenlittle: A million bucks is ~ 70k per year in passive income which is plenty if you don’t have sponging adult children or a drug/real estate problem.

#23 Condos are Apartments on 03.22.15 at 1:07 pm

I disagree with buy a condo because if they think their life is miserable now move into a condo a fancy name for apartment and be really screwed! Condos are first to depreciate in a down market and in the meantime while waiting to unload it you can listen to your neighbor take a crap, argue whatever and go crazy! Pay condo fees what a joke you cant even choose to paint your door a different color add anything without asking permission and people actually buy into this … Really? My friend couldnt even add a tasteful security door because it didnt fit the property … Really? At least in a house you need a repair you can make do it needs a coat of paint well … Condo fees pay now there is no wait on those fees. Condos are the biggest scam going and i believe only suckers buy into that rediculous apartment scam!

#24 OnceWasMoistButNowIsee on 03.22.15 at 1:11 pm

http://deals.victoriahomes.com/foreclosures-victoriabc/

Here we go. Starting to see these ads pop up around the interwebs.

#25 David on 03.22.15 at 1:12 pm

How can people seriously entertain getting a reverse mortgage right after paying off the initial one? People are loath to rent and mortified by investing.

#26 Jib Halyard on 03.22.15 at 1:14 pm

You left out the most attractive option: Move to a smaller town, and get a massively increased quality of life for a fraction of the real estate price. I have never understood why anyone in this country would willingly choose to live in Toronto…

#27 Andrewski on 03.22.15 at 1:18 pm

Here’s a link to provide a snippet of info on the reverse mortgage. Run away from this product, unless you’ve no offspring:

http://www.fcac-acfc.gc.ca/eng/forConsumers/topics/mortgages/Pages/Understa-Comprend.aspx

#28 JayP on 03.22.15 at 1:22 pm

Hello …Below is my current financial position, I wonder what bloggers think about it.

Me(Pr.Engineer) and wife(retail job) : Both age 40
Location: Central Alberta
Yearly family income : 200K..stable
Kids: 15 and 10

Bought a house 3 years ago 430K, currently owing 300K,paying down as fast as I can.Biweekly payment, put down $400 per month extra and additional lumpsum payment of about 12K every year.Mortgage rate 3.04 % fixed.Target is to finish mortgage before I turn 47.

RRSP: none

TFSA: Self trade account with 15K in it, 5 year average return 5 %.I did some risky trades and lost some money.

Defined contribution pension plan(Sunlife): currently 90 K in it with last 8 years average return of 10.7 %,again self managed ,no cost of financial advisor.Balanced portfolio of foreign equity,bonds and Canadian equity.

RESP: 50K

No car loans..always drive used cars bought in cash.

#29 Musty Basement Dweller on 03.22.15 at 1:32 pm

“They can sell and downsize to a $400,000 condo investing the remainder …”

big OUCH on the first part of that sentence. I hope the investment part would offset the financial mistake of buying a condo now.

Some condos are fine. Others are a disaster in the making. And you must recognize some people cannot abide renting. — Garth

#30 Rexx Rock on 03.22.15 at 1:39 pm

Families buying a house should do a simple calculation.If they put 20% down and can’t get cash flow on the house then its not viable option to buy.For any reason you need rent it out and it doesn’t pay for it self then you forget about it.This logical rule will have saved many Canadian families severe economic hardship in the future.

#31 Freedom First on 03.22.15 at 1:45 pm

Faye and Frank, take the money and run. Ger the money sucking monster off your back while you still can. It’s a no-brainer, anything else is ultra-high risk. Think with your brains not your emotions. No charge.

#32 Joseph R. on 03.22.15 at 1:52 pm

#3 Johnny D on 03.22.15 at 12:03 pm

Alberta made BRAs mandatory for any real estate transactions involving a realtor:

http://www.reca.ca/consumers/information/written-service-agreements.htm

That is only for a ‘client relationship.’ You can still deal without a BRA. — Garth

#33 Squirrel meat on 03.22.15 at 1:52 pm

#26 JayP on 03.22.15 at 1:22 pm

Hello …Below is my current financial position, I wonder what bloggers think about it.
——————————————–
Chill a bit on the mortgage and get $$ into your TFSAs ASAP.

#34 JacqueShellacque on 03.22.15 at 1:56 pm

Ah, the joys of Millstone Manor, or Albatross Avenue House if you prefer, that building the boomers thought would be their be all, their end all, their everything. Big Mme Shellacque (the mother, not the wife) won’t leave hers (crappy, dying former single industry town now with no industries) to live intergenerationally with the younger Shellacques in a more civilized locale (Golden Horseshoe) – not because we’re witless companions, or greedy CPP-cheque-craving golddiggers, or diaper-wearing droolers – but because she’d have to *give up the house*. It generates no income and keeps her stuck in a location that literally offers nothing in terms of services or enjoyment and is 8 hours away from her immediate descendants. But it’s *her house*. “At least I can live in it!”, she’ll say. I think that will have to be the epitaph of a huge swath of that generation. I believe big Mme Shellacque, and most of her cohorts, will choose to go down with the ship.

#35 Last of the boomers on 03.22.15 at 2:09 pm

I have a question I am hoping some of you very knowledgeable people can help me with.

If you hold a particular ETF or REIT in you TFSA, and you are not happy with it’s performance, how do you get rid of it and replace it with something else? Should you wait until year end to sell it, and then buy something new to fill the contribution room? How does it work?

Thank you for you suggestions.

TFSAs are completely tradable accounts. Buy and sell what you want, when you want. — Garth

#36 Fuzzy Camel on 03.22.15 at 2:12 pm

My issue is the perversion of the purpose of housing.
Housing is shelter from the elements, a place to keep warm and live when not working or travelling. I think of them as an over-glorified cave for the Paleo minded.

But now, those caves are being used for endless finance and get rich quick schemes. Those caves keep rising in price, people use their caves to secure borrowed money, they buy caves as investments hoping to score a profit. Caves are the new economy.

This isn’t what the intent is, it is friggin’ shelter!

#37 AB Boxster on 03.22.15 at 2:15 pm

Garth,

Final question on the topic of self directed mortgages .
(Holding your mortgage in your rrsp)

A while back you mentioned that this strategy was not a great idea right now given the extremely low mortgage rates.

However, these rates all apply to ‘closed’ mortgages.

Can I not write myself an ‘Open’ mortgage in my RRSP and charge myself market open rates as opposed to having a ‘Closed’ mortgage where rate are 2.5%?

For example, TD 1 year Open Mortgage is 6.3%.

Why could I not hold a 1 year ‘Open’ Mortgage in my RRSP with a rate of 6.3% rather than having a 1 year ‘Closed’ Rate with the posted rate of 2.89%.

It is possible, but you could be challenged by the CRA, since RRSP mortgages are supposed to be at ‘market’ rates and that is hardly commonplace today. In addition, you would face an annual renewal, and all the attendant costs. In general an RRSP mortgage is not worth the struggle at this time. — Garth

#38 Nora Lenderby on 03.22.15 at 2:24 pm

#24 Jib Halyard on 03.22.15 at 1:14 pm
You left out the most attractive option: Move to a smaller town, and get a massively increased quality of life for a fraction of the real estate price. I have never understood why anyone in this country would willingly choose to live in Toronto…

Agree with this. Massively increased quality of life and I can afford to keep the yacht in the manner to which she has become accustomed.

And then there’s the story of my step-son’s ex-mother-in-law; they retired and stayed in Toronto. She was run down at a cross walk and her life was miserably shortened.

It’s just an anecdote though. I could get run down while riding my bicycle in my small village in Ontario by a 90-year old lady driving her late husband’s Buick – but it would happen more slowly.

#39 Don on 03.22.15 at 2:37 pm

(By the way my comments are not directed at Garth, but the reality he speaks to)

“Some people think reverse mortgages are about to explode in popularity. They’re probably right.”

The Bank always has an angle on what will be the downside for every person who needs the money. ‘hands in your pockets…hands in your pockets’ on the way out also. Remember…’you are richer than you think’. Thanks Scotia bank. It must be true if you said it.

******************************************
“In fact, a whole new generation of savings-poor, house-rich people is rapidly approaching middle age in an era when corporate pensions are fading and real estate has never been such a burden. What, exactly, do these people think will be financing their decades-long retirement, once they pay off those epic mortgages?”

With corporate profits at an all time high, one would think that they could pass on a little of the moola to create pensions for their staff. Corporations are doing great and still not sharing…I guess this is how it will be. I take it until people get smart and start boycotting on mass. Think it won’t happen! It is definitely a strategy in the public’s tool box.
******************************************

“The reverse mortgage? The last option they should consider. Unless they hate their kids.”

Yup…all that wealth being intercepted before the children can benefit. Guess the children should consider a plan B. I see lots of generational households in the future. If you have one house – divide it into share spaces – trust me on this one.

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

One more thing – a poster about a week ago stated while visiting Victoria he/she saw a lot of Albertan licence plates. I betcha most are not looking for houses but are returning home with their vehicles. You have a defined period to switch your insurance back to BC insurance.

A coworker who listed a house in a desirable area in Vic had 4 showings no bids, recently dropped the price 15 k, 5 showings no offers. The house is priced in the low 400Ks now. Went for a waterfront house yesterday and low and behold 4 houses for sale right beside each other, 2 on the ocean and 2 right across the street. Signs everywhere, one might think it was election time.

#40 The mortgage that eats | Realties.ca on 03.22.15 at 2:48 pm

[…] Source: http://www.greaterfool.ca/2015/03/22/the-mortgage-that-eats/ […]

#41 Nagraj on 03.22.15 at 2:55 pm

” . . . they can hardly afford gas, groceries . . . and worry every single day . . . ”

I stopped reading at that sentence, took a coffee break, fed the birds (strangely cold out today) and cat, made another cup of coffee, read some other news, and then got back to the post. I do understand the thrust of this post is also to take down predatory lending – but nothing really moved me again until I got to the Biblical “You reap what you sow” retort, to which I’d like to respond that undoubtedly the Canadian establishment will, too, reap what it has sown.

I don’t know that this is the most impressive post Turner’s written but it surely comes close.
I recall a post-war Italian (Fellini?) film in which pensioners are demonstrating in Rome; the police brutally break up the old folks’ march.

Accident, illness, old age and death stalk all of us, as well as disappointment and betrayal. If honest people can hardly afford gas and groceries on top of that –

#42 Diversified in Oakville on 03.22.15 at 2:57 pm

#26 Jay,

1) MINIMUM payments only on your mortgage.
2) ANY additional money goes to your TFSA until it is topped up 100%. Many growth ETF’s to choose from. Remember that your TFSA is all about Growth as it will not be taxed, EVER.
3) AFTER your TFSA is topped up, money goes into your RSP.
It is simply a fool’s game to pay off mortgage debt at 3.04%.

#43 Debtfree on 03.22.15 at 2:59 pm

The sheeple are going to build one heck of a monster house on top of birch hill , don’t ya think ? Or maybe they are going to rent too . Some times I think I was better off before you opened my eyes to so many other levels . Cheers , thanks a lot Garth .

#44 bigtown on 03.22.15 at 3:13 pm

There are places like Chatham in Ontario where homes can be bought for under $100k. You can go to many areas in the Maritimes like Moncton or Saint John and buy for $100k. Go north of Barrie or the Kawarthas for some very good deals and the towns are full of people from the GTA.

Once you get out of Toronto life improves as much as the air quality and the society as well as lower cost of housing.

#45 Sheane Wallace on 03.22.15 at 3:13 pm

while Poloz parties

https://ca.finance.yahoo.com/news/pricey-bank-canada-meeting-included-090000520.html

#46 Mark on 03.22.15 at 3:32 pm

Ditch the house (if his wife’s name isn’t on the title) , pay her out and send her packing if necessary, invest the rest and live happily ever after.

Easier said than done. In most provinces, the consent of the spouse not on the title is required to sell a principal residence. And “significant others” very often represent quite a bit of resistance to change on matters such as these.

So I’m guessing the banks profit out of reverse mortgages? If so – how? When you get a reverse mortgage, does the bank now own the house?

They ‘own’ the house just as much as they own a house of anyone else who has granted them a mortgage to support a promissory note. Most reverse mortgage contracts include a form of life insurance, but there are ample clauses giving a lender the right to foreclose on a reverse mortgage significantly at their discretion.

For instance, in every reverse mortgage contract is the obligation that an owner fully maintain the property. Certainly an elderly person, who already had to resort to taking out a reverse mortgage, probably won’t be in a position to maintain the property fully. In fact, where I live, most properties that are ultimately sold by the elderly (upon going into a home, upon death, etc.) are known as “fix-er-uppers” requiring extensive repair. Reverse mortgage lenders have effectively entered into contracts which pretty much give them the ability, if an elderly person lives so long that the debt accumulates to an extent that a reverse mortgage goes into negative equity, to foreclose. Additionally, they charge such a risk premium embedded into the interest rate on the reverse mortgage itself, that the implied cost of life insurance is more than paid several times over. Its a very lucrative business to say the least.

#47 pinstripe on 03.22.15 at 3:46 pm

It does not make sense why this blog is working towards educaeting the readers.

People need to make their own decisions. leading the horse to the water trough does not mean the horse will drink water. it comes down to Buyer Beware.

I have been buying stuff when people told me straight point blank that I was stupid. when someone yells BUY there is always someone yelling SELL. people are not designed to tell the truth, there is more money in BS.

I always bought houses, farms, etc for cash. no cash no buy. in the 1950s and 1960s a bank managaer helped me with some of my decisions. since the 1980s I don’t trust anyone who claims to be a financial expert. the milleniuls today are too stupid to learn the light and dark side of investing. their solution is an app for this or that.

All debt is BAD. Paying interest is BAD. The debate between rent vs buy is not worth the time. It is too bad that savers are ;punished these days and borrowers are rewarded.

leave these milleniems alone, they will learn their lesson, hopefully sooner than later.

anyone wanting to retire with one mil in the bank should contine working. a multi million dollar house in retirement is a liability. Cash is King.

#48 Squirrel Meat on 03.22.15 at 3:51 pm

Kirk, has excellent lettering skills.

#49 Randy Randerson on 03.22.15 at 3:53 pm

Stay-at-home-wife will get her way. No way she’ll allow Frank to sell her house when she can pretend they’re still doing well financially. Gotta put up a good front for all her friends and family.

Frank might be a number’s man, he needs to seriously sit down with his kids and wife to talk finance and money to them, let them know they will be broke if they continue this path. Let them know A) sell the house and live independently, B) reverse mortgage and kids might never see the house when they pass, C) continue this path and go broke, or D) the kids chip in to help their aging parents so Frank doesn’t have to sell and live the house in the kids’ names.

Then comes to hard part, how to split the house for the kids after the parents are gone.

#50 Oceanside on 03.22.15 at 3:55 pm

#3 Johnny D on 03.22.15 at 12:03 pm
Off the topic of this article but I have a friend who is about to take the plunge and buy a house (with pretty much no money to put down)… his sexy realtress pulled all the stops, bragging how much she sold this month so far and convincing my friend that this one house will sell in two days if he doesn’t pull the trigger… Anyhow I asked him if he signed a BRA ( buyer representation agreement) and even though he said he did not yet, he also said his realtress was boasting about how they were going to make it MANDATORY TO SIGN BRA’S in the coming year. What do you know of this? Who is making it mandatory? Certain agencies such as remax etc etc. or can they actually pass a law that makes it a must?

If your friend is planning on buying a house based on the realtor being sexy and selling a lot of homes he should have his head examined, this is the classic “it was the realtor’s fault, they made me buy at the wrong time or at the wrong price”

People have to take responsibilities for their own financial well being.

#51 OttawaMike on 03.22.15 at 4:00 pm

Sell and reap the gains. Bob and Fate will miss out on future price gains in Toronto as rates stay low but the investments should mitigate that.

Here is an Ottawa Realtor who dares speak the truth about it being a buyers market here.
I would hire him : http://www.oasisrealtyottawa.com/Ottawa_home_seller_tips/page_2634973.html

#52 Randy Randerson on 03.22.15 at 4:01 pm

[B] #25 Andrewski on 03.22.15 at 1:18 pm [/B]

Thanks, that was an interesting site, didn’t know Gov has such a place to educate people on financial matter.

So what would happen when the reverse mortgage exceeds the price of the house after the parents pass. Does the offspring have to pay the difference now?

#53 AfterTheHouseSold on 03.22.15 at 4:03 pm

#20 Retired Boomer – WI
“See the smiling man. What the wife doesn’t realize (as she won’t hear of ‘selling’ their home) is that the old man has laced her coffee…”

Thanks lol

#54 Smoking Man on 03.22.15 at 4:11 pm

Obviously Kirk’s parents had a reversible mortgage. Left him with nothing.

#55 Nemesis on 03.22.15 at 4:16 pm

#FunnyAuldWorld… #CouldBeWorse… #CannibalNuns&RapaciousTigerWives…

#HuWooedWhoOrWuFangFang’sDongWuDebacle…

[SCMP] – ‘Tiger Wife’ who wooed doomed major general

http://www.scmp.com/news/china/article/1744133/tiger-wife-who-wooed-doomed-major-general

#PapalPaparazzi&TheNeapolitanAdoration…

[Telegraph] – ‘They are going to eat him!’: nuns stun Pope: Pope Francis is mobbed in Naples by a superfluity of overexcited nuns

http://www.telegraph.co.uk/news/worldnews/the-pope/11488383/They-are-going-to-eat-him-nuns-stun-Pope.html

#56 Joseph R. on 03.22.15 at 4:18 pm

That is only for a ‘client relationship.’ You can still deal without a BRA. — Garth

Isn’t using the service of a Realtor automatically entering a ‘client relationship’ ?

If anyone that clear it up, it’ll be appreciated.

#57 LS in Arbutus on 03.22.15 at 4:18 pm

Where I work in Vancouver the boomers are starting to retire. Many are downsizing (selling their expensive homes in the ‘burbs and looking outside of the lower mainland.) And these are the “wealthier” boomers. They are smart enough to realize sitting on a house worth $500,000 + is a stupid waste of their net worth and buying in lower mainland again equally stupid.

#58 MTVmademedoit on 03.22.15 at 4:19 pm

The Banks always come out on top don’t they? Making money off mortgages but shouldering zero risk With CHMC, . CHMC made sense directly after wartimes- now it should be scrapped.
Speaking of which, Maybe I should go buy some stocks in the big 5.

#59 Mike on 03.22.15 at 4:32 pm

I really see reverse mortgage’s exploding in popularity with boomer’s over the next few years… They’ll have absolutely no choice unless they want to work as a Walmart greater till they’re 90.

That means that the bank (and not their kids) are going to ‘inherit’ their houses once they croak. So what happens when the bank owns a bunch of extra houses that they don’t want? Would they hold on to them or dump them at a discount?

#60 Interstellar Old Yeller on 03.22.15 at 4:35 pm

We know there will be lots of Frank & Faye stories out there… Enlightening to hear a specific, real one, though.

I suspect being a homeowner is an outsized part of their (especially Faye’s) identity. They need to see that the wrong move could make poverty an unwanted, outsized part of their life.

LOL @ “shower on your deadbeat offspring”.

#61 Hawk on 03.22.15 at 4:50 pm

Frank and Faye should use a little common sense, in a world where it seems increasingly scarce and consider a simple solution.

Sell the house for $1 million and buy a $250K house outside the GTA that will provide the psychological “security” that Faye needs. Use the remaining $750K in a portfolio and spend the returns on renting in Toronto.
Problem solved, they own both a nice house and get to live in the heart of the “happening place” and the double caramel Macchiato with the whipped cream on top available right across the street :-)

#62 NorthOF49 on 03.22.15 at 5:01 pm

Frank’s gotta get that house sold pronto, before he misses the boat. Start dropping Quaaludes in Faye’s Shreddies if he has to. Unless he wants a diet of Meow Mix when he’s 80, he’s gotta get outta TO now. Try Tilsonburg…dirt cheap housing and only 30 minutes to the Costco in London. I know, Costco yeesh, but the country bumpkins, they all do it.

#63 TJ on 03.22.15 at 5:01 pm

220K to live on for the next +20 years in Toronto? Is this guy crazy? Sell the house before the bubble bursts my man. Yikes this poor guy doesn’t see what’s coming

#64 Mark on 03.22.15 at 5:03 pm

“That means that the bank (and not their kids) are going to ‘inherit’ their houses once they croak. So what happens when the bank owns a bunch of extra houses that they don’t want? Would they hold on to them or dump them at a discount?”

Of course the banks will dump them at fair market value. Their shareholders demand dividends in cash and bankers for the most part don’t want to be in the real property management business (shareholders can buy REITs if they so desire!).

Actually the foreclosure process pretty much requires a sale for the purposes of valuing any deficiency (or excess) in equity that must be paid or recovered from the borrower. So it really wouldn’t even be an option for a bank to inventory the properties.

#65 Finland is FINNISH on 03.22.15 at 5:04 pm

“Once you get out of Toronto life improves as much as the air quality”

Maybe Saint John wasn’t the ideal example for this argument :).

#66 HD on 03.22.15 at 5:07 pm

@ #193 TRT on 03.22.15 at 4:07 am

“The Fermi paradox tells us that this is all an illusion. The numbers just don’t add up.”

———————–

Are you suggesting that we might be living in a simulation/virtual reality engineered by another more intelligent being?

After reading Nick Bostrom, I have to admit that this theory is very plausible. Interesting stuff indeed.

Best,

HD

#67 cd on 03.22.15 at 5:19 pm

this is a repeat from other people’s posts, but sell the place, and move to a smaller town. If you are willing to move 2-3 hours away you can get some type of cheap/ok waterfront property for 200-300K (like in essex county).

Like this… http://www.realtor.ca/propertyDetails.aspx?PropertyId=15310761

#68 Retired Boomer - WI on 03.22.15 at 5:29 pm

OK, I had my ‘fun’ with my post at #20.

The best answer for Frank & Faye is to list and sell rthe home now, while values ARE high, and a borrower can finance it low.

When rates move up their home value will likely move down. Trees never grow to the heavens.

If you relocate out of TO to any of the less costly wonderful towns in southern Ontario, you could still buy a place for about 20% of what you will gain from the sale. You might also just choose to rent.

Don’t wait until a sale might be forced!

You ‘wait’ a few years, Frank tips over, the market has retreated, and now Faye has only HALF the income.
Now, she must sell into a crappy market for a much lower price.

Never say “that can’t happen here, we’re different.”

#69 april on 03.22.15 at 5:48 pm

#12 – Is there such a place as a free hold townhouse? non strata? Not in the lowermainland BC

#70 Squirrel Meat on 03.22.15 at 5:59 pm

Alberta’s greatest export……….

http://www.newyorker.com/humor/borowitz-report/disturbed-man-tries-to-get-into-white-house?intcid=mod-latest

WASHINGTON (The Borowitz Report) – A disturbed Canadian man wants to try to get into the White House, according to reports.

The man, who was born in Calgary before drifting to Texas, has been spotted in Washington, D.C. in recent years exhibiting erratic behavior, sources said.

In 2013, he gained entry to the United States Senate and was heard quoting incoherently from a children’s book before he was finally subdued.

More recently, he was heard ranting about a plan to dismantle large components of the federal government, such as the Internal Revenue Service and the nation’s health-care program.

Despite a record of such bizarre episodes and unhinged utterances, observers expressed little concern about his plans to get into the White House, calling them “delusional.”

#71 Victor V on 03.22.15 at 6:10 pm

Rob Carrick: The case for reverse mortgages

http://www.theglobeandmail.com/report-on-business/video/video-carrick-talks-money-the-case-for-reverse-mortgages/article22424043/?click=sf_rob

#72 Obvious Truth on 03.22.15 at 6:17 pm

Frank and Faye. House prices are likely headed lower.

If you had a mil in the bank you probably still sell the house.

Leaky basement and roof and 40 k gone in an instant.

Even wealthy people don’t want to spend that. Nobody wants to spend money on that shit.

Remind yourself that garths readers are mostly the one percent always talked about. You can join them.

You’ve worked hard. You’ve got to the top believe it or not. An unexpected housing lottery win. Don’t blow it. Walk away. Both of you deserve to smile brightly for the rest of your lives.

#73 A Yank in BC on 03.22.15 at 6:25 pm

Unless they get jobs, or plan on winning a lottery, they must sell the home. A no brainer.

Then, moving to a cheaper part of Canada would be hugely beneficial. 400K isn’t going to buy much of a condo in Toronto. Basically.. the city is too expensive for them to retire in.

#74 Prairieboy43 on 03.22.15 at 6:26 pm

Garth is that you? Start smoking?Where are the glasses, Loose a finger? At least he is telling the Truth?
As for moving into Country. It easy for a country person to adapt to city life. However difficult for the Urbanite to move to the country and adapt.
Less amenities, you will need to purchase a freezer, and fill it up. No going out every day for dinner. Likely you will meet your neighbor. If your home catches fire, watch it burn to the ground. Learn to shoot a gun. Pros/Cons. Decide how you want to live. Then Live it. 4H Motto ” Learn to do by Doing”.

#75 Victor V on 03.22.15 at 6:31 pm

Reverse mortgages may not seem so obscene when you consider that a third of Canadians expect to fund their retirement by winning the lottery.

http://www.canadianbusiness.com/blogs-and-comment/retirement-lottery/

#76 DisgustMadeMePost on 03.22.15 at 6:37 pm

The answer for these folks seems so clear and simple. Sell the house and move a little further from the city where they can still own if they want since that’s important psychologically.

I agree with #69 Obvious Truth.

These choices always seem easier when looking at others.

#77 devore on 03.22.15 at 6:39 pm

Although a reverse mortgage is objectively very poor financial value, it has very high emotional value. You get to keep your house, and carry on as if nothing ever happened. You will never have to face up to your friends and family, and admit you have no money and had to sell the house. At least, not until you die, and leave a big pile of nothing behind.

#78 Bill Gable on 03.22.15 at 6:40 pm

One timely and brilliant, post, Mr. Turner.

I have been going insane trying to help a friend understand that he is unwise to follow the ‘reverse mortgage trail’. This will seal the deal. THANK YOU.

I just got off the phone with a friend who writes about commodities and the Stock Market. He sent me some Stats.

I wonder if they reflect what is happening in Canada, or perhaps, likely to:

“The following figures come directly from the US Social Security Administration…

-39 percent of American workers make less than $20,000 a year.

-52 percent of American workers make less than $30,000 a year.

-63 percent of American workers make less than $40,000 a year.

-72 percent of American workers make less than $50,000 a year”.

Holy Cow.

This is a Recovery, right?

#79 fausto on 03.22.15 at 6:41 pm

buy another rental property in Hamilton with $500/m positive cash flow or a new townhouse in ancaster that will be breaking even this month? tfsa maxed out with the orange guys equity growth fund. or use my extra monies to buy mawer funds?

#80 Victor V on 03.22.15 at 6:47 pm

http://www.homequitybank.ca/homequity-bank-reports-record-annual-originations/

TORONTO, Jan. 13, 2015 /CNW/ – HomEquity Bank announced today its 2014 originations grew by 23% YOY and reached $309MM. As of Dec. 31, 2014, the HomEquity Bank portfolio of reverse mortgages has surpassed $1.7 billion.

The strong YOY growth can be attributed to an increase in direct inquiries from consumers as well as continued growth through referral partners including banks and mortgage brokers.

“With the current demographic trends and extended life expectancy we project reverse mortgage originations to grow at 25–30% annually over the next few years” said Steven Ranson, President and CEO, HomEquity Bank.

#81 Moses71 on 03.22.15 at 6:50 pm

“Prairie Boy”–nice analogy of country life to city living. Except the part about “no going out every day for dinner”, if this is concerning this blog’s subject man. Doesn’t sound to me this pair are going out for dinner any time soon. Lol not as long as the anchor half of that relationship has a vote

#82 Squirrel meat on 03.22.15 at 6:52 pm

The kidults are getting pissed.

http://montrealgazette.com/news/local-news/students-protest-in-montreal-over-government-austerity-measures

http://www.truthdig.com/avbooth/item/police_cars_on_fire_thousands_call_on_eurozone_to_dismantle_20150320

http://www.telegraph.co.uk/news/worldnews/big-question-kcl/11479439/Why-is-Brazil-so-angry.html

#83 TS on 03.22.15 at 7:02 pm

Oh man,

Do I hear a lot of GenX / GenY talking about inheritance these days.

It’s so morbid. Trying to figure out how much you’re gonna get or basing life decisions on the death of your parents?

So weird….

#84 Linda on 03.22.15 at 7:11 pm

As others have mentioned, one of the features of a reverse mortgage is the rule that the property be fully maintained by the occupant(s). Which presumably would take some of the cash of the equity the homeowner(s) were expecting to have available to live on. Maybe one heck of a lot of it. A new roof, depending on size & style, could set one back $20,000 or more. Ditto items like new siding, windows, doors, furnace, plumbing repairs & general home maintenance including yard care.

Given the sheer numbers of Boomers whose only real asset is their home, one wonders just how many reverse mortgages any financial institution would be willing or able to take on, especially if the value of said asset is dropping due to deflation, market correction or whatever the heck happens next. Add in the fact many Boomers may have no company pension plan & that the average payout for CPP is less than $600 per month BEFORE taxes. Yet the Boomer generation is considered to have had it the easiest of any generation & is supposed to have the most access to wealth due to inheritances & good jobs.

As for the generational thing, oh yes. The younger generations have their challenges for sure but so too do the Boomers. One of the challenges Boomers faced was competition with fellow Boomers. Companies had plenty of workers to choose from & not everyone got plum positions that paid well & had a company pension & benefits to boot. Plus Boomers got to deal with all those market downturns & interest rates that in the 80’s had soared to 22% for mortgages before the market imploded. Now throw in the ‘sandwich’ generation where the ‘lucky’ Boomers got to care for aging parents AND take care of their adult or nearly adult children too. Even those who had money found that to be a challenge & hey, just imagine what years of long term care did to the pots of cash the Boomers were supposed to be inheriting from their parents…..

A lot of Boomers wanted to retire but the 2008 meltdown put paid to Freedom 55 for most. Now most are hoping to make it to age 65 & be able to retire & not still be supporting parents & children when they do. Good luck with that…..

#85 Mountain Man on 03.22.15 at 7:21 pm

Sell the house, move to small town Ontario and buy a house for $200k, invest the rest. Case closed. Next.

#86 Cici on 03.22.15 at 7:29 pm

If I was in this situation, I would tell wifey that if she wants to keep the house, time for her to get a full-time job and either kick the kidults to the curb, or ask them to contribute rent.

If she refused, I would turn to divorce, take my half of the house proceeds, invest them, rent or buy a cheap place outside of the big city, and work another four years doing anything possible that would pay for living expenses allowing the investement money to grow indisturbed.

Maybe I’m cold and callous, but you only live once and it doesn’t seem fair that the one person in this couple who didn’t actually work at a salaried position contributing to the family’s wealth is the one calling all the financial shots. I also think the stay-at-home mother role is only valuable to the family unit until the kids are old enough to go to school. Being a stay-at-home mom to teenagers who are probably hardly ever around anyways seems even more ridiculous. And definitely, when it comes to kidults, if you are letting them live at home it’s time to stop doing all the cooking and laundry, and get yourself a part-time or full-time job if your family welfare depends on it. Oh, and if the kids don’t do their own cooking, cleaning and laundry, under no circumstances should they deserve to live at home for free.

Am I too hard-ass or reasonable?

#87 Nora Lenderby on 03.22.15 at 7:29 pm

#56 Mike on 03.22.15 at 4:32 pm
I really see reverse mortgage’s exploding in popularity with boomer’s over the next few years… They’ll have absolutely no choice unless they want to work as a Walmart greater till they’re 90.

Unfortunately for that plan, Walmart no longer employs greeters in their stores in Eastern Ontario or upstate New York. Please note this y’all!

#88 Nora Lenderby on 03.22.15 at 7:34 pm

#71 Prairieboy43 on 03.22.15 at 6:26 pm
…However difficult for the Urbanite to move to the country and adapt. Less amenities, you will need to purchase a freezer, and fill it up. No going out every day for dinner. Likely you will meet your neighbor. If your home catches fire, watch it burn to the ground. Learn to shoot a gun. Pros/Cons. Decide how you want to live. Then Live it. 4H Motto ” Learn to do by Doing”.

Sorry sir, that may be true if you live off the beaten track somewhere, but I retired to a small community on the St. Lawrence. I have never lived so close (2 mins walking distance) to a Post Office, cafe, several restaurants and bars (OK, not fine dining), library, fire station, supermarket, several discount stores, Chinese Tire, hardware stores, car dealerships (new and used), several car repair shops, doctors’ offices etc. etc.. Twenty minute drive to a hospital Emergency Unit with not much waiting around. Forty minute drive to the outskirts of three large towns and Ottawa airport. Twenty minute drive to the U.S. and airport. Admittedly no public transportation apart from a taxi service, but taxes are low as are house prices (relatively).

Not to mention the Legion with cheap beer, Friday lunches and Steak Nights. And on the river…good fishing and boating. Golf for those who like whacking their balls around. And the he’p is grateful and inexpensive.

#89 Victor V on 03.22.15 at 7:37 pm

#83 TS on 03.22.15 at 7:02 pm
Oh man,

Do I hear a lot of GenX / GenY talking about inheritance these days.

It’s so morbid. Trying to figure out how much you’re gonna get or basing life decisions on the death of your parents?

So weird….

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

http://business.financialpost.com/2013/10/25/are-you-betting-on-an-inheritance-to-solve-your-money-problems/

For the younger generation, he says inheritance can often play a part in financial difficulty. “They are banking on this,” said Mr. Bolduc, who cautions that that money may not be there at the end of the day. “There are things that will mitigate that inheritance. People are living longer, costs are going up and we are seeing more and more seniors retiring with debt like mortgage obligations.”

Walter Pela, a partner with accounting firm KPMG, said there are some good tax reasons to give money to your children early. Transferring assets to children will trigger a capital gains tax because the gift of those assets is considered at fair market value. However, the children assume future tax obligations.

#90 pinstripe on 03.22.15 at 7:41 pm

anyone needing a reverse mortgage is living beyond their means.

if cash flow is an issue. sell the property and move to a small town where 100 grand will get a good house. put the ego aside and start enjoying living today. life is too short to worry abut money in the aging years.

anyone who uses a reverse mortgage deserves that sales pitch. Many old geezers and many milleniels have a lot in common………..Stupid applies to all ages.

#91 Squirrel meat on 03.22.15 at 7:50 pm

#87 Nora Lenderby on 03.22.15 at 7:29 pm

#56 Mike on 03.22.15 at 4:32 pm
I really see reverse mortgage’s exploding in popularity with boomer’s over the next few years… They’ll have absolutely no choice unless they want to work as a Walmart greater till they’re 90.

Unfortunately for that plan, Walmart no longer employs greeters in their stores in Eastern Ontario or upstate New York. Please note this y’all!

—————————–
Shit.. really?? I’m totally farcked…

#92 Andrew Woburn on 03.22.15 at 7:53 pm

54 LS in Arbutus on 03.22.15 at 4:18 pm
Where I work in Vancouver the boomers are starting to retire. Many are downsizing (selling their expensive homes in the ‘burbs and looking outside of the lower mainland.)
—————————
Moving from your long term home is a huge psychological wrench. Many people may resist it because it makes them feel their life is over.

However, like the Vancouverites you mention, we realized that the math for staying there made no sense. There are so many beautiful, peaceful places within a two-hour travel time that you can buy for a third of what you can sell for. If you really miss Vancouver you can easily afford to spend a weekend a month in a nice hotel and do the urban thing and then come home and watch the whales and the eagles. Two days ago we went to see the sea lions playing near the shore and then drove ten minutes to all the shopping you could ever want.

The other benefit of smaller places is you simply pay less for many things like auto insurance. I always had my hand in my pocket for parking in Vancouver and I doubt I spent more than $10 last year except for ferry parking. One thing my wife noticed when she shopped in Yaletown with her adult daughter is how much more groceries cost there.

My guess is the majority of urban boomers live in suburbs and hardly ever go downtown. I know we still do as much in downtown Vancouver as we ever did in our last ten years of living there.

#93 Andrew Woburn on 03.22.15 at 8:04 pm

#62 NorthOF49 on 03.22.15 at 5:01 pm
I know, Costco yeesh, but the country bumpkins, they all do it.
======================

I totally get why you feel this way because I wouldn’t have been caught dead in Costco or Walmart when I was younger. However retiring has an interesting way of changing your perspective on costs and prestige. Once we woke up to the fact that big box stores offer many brand name items for maybe 20% less, we got right in touch with our inner bumpkin.

#94 Godth on 03.22.15 at 8:04 pm

#41 Nagraj on 03.22.15 at 2:55 pm

Die Kommenden Tage – The Coming Days
http://www.alluc.com/l/The-Coming-Days-2010-mp4/0wyhspq

#95 Bytor the Snow Dog on 03.22.15 at 8:05 pm

Cici at 86-

Not harsh at all. That’s exactly what I’d do.

I bet Frank is wishing he’d have put his “freedom first” now.

#96 Linda on 03.22.15 at 8:18 pm

#86 Cici: I agree that adult ‘children’ still living at home should do their own laundry, help with household tasks & pay rent that at least covers the cost of groceries & utilities consumed by said occupants, plus a storage fee for their stuff.

Regarding the stay at home parent, keep in mind that if that person did the cooking, household cleaning & so forth that a value should be assigned to said work & not lowest possible wage either. Child care costs alone would have eaten a considerable chunk of income that the stay at home parent provided. Most parents today are lucky if they pay ‘only’ $1,500 a month per child for child care expenses (Quebec always being the exception due to government having made inexpensive child care a reality for parents – I think the rate was at one point $7 per child, per day). And don’t think that the fact the child is attending school at age five means child care expenses vanish. They don’t, as most schools send children home hours before parents work day ends. Plus no child is supposed to be left without adult supervision for hours on end prior to age 10 or maybe it is age 12. So figure child care costs run to at least age 10 & even a couple of hours per day will add up over time.

And this is for healthy children. What if they aren’t healthy & need extensive additional care? What if there is an aged parent living at home who needs care? That burden too will likely fall to the stay at home parent & if you think taking care of child is hard work, try taking care of an adult full time. Yes, homes are available at a considerable cost, depending on level of care. Some provinces cap the amount that can be charged, but others have more flexible rules. Full care homes for those adults who can no longer care for themselves could cost $6,000 per month so again, if that cost is being covered by the stay at home parent would you not agree they earn their keep & add value? And don’t even get me started on ‘duty’. Lot of pious talk to cover up the fact no one wants to grant value to the work being done & will in fact do all they can to run the value down – I notice the most vociferous of the naysayers are usually those who just can’t ‘manage’ to take on said task, even though the adult in question is their Mom or Dad too…..

#97 Daisy Mae on 03.22.15 at 8:21 pm

POSTER: “Ditch the house (if his wife’s name isn’t on the title) , pay her out and send her packing if necessary, invest the rest and live happily ever after.”

MARK: “Easier said than done. In most provinces, the consent of the spouse not on the title is required to sell a principal residence. And “significant others” very often represent quite a bit of resistance to change on matters such as these….”

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

Love you guys! Such charmers….not.

#98 april on 03.22.15 at 8:35 pm

#29 – Garth how does on know if a condo is a “disaster in the making” before one moves in and then it’s too late.

#99 Smoking Man on 03.22.15 at 8:39 pm

I just can’t get over reading the comments here.. Everybody fixated on only on way of making money..

Trade time for wages, you then retire, you must cut back bla bla bla.

Millions of ways to make money other that tax farming.

Colonel Saunders dident start KFC till he retired.

Amazing how our perfect school system produces so many obedient slaves, very few owners..

And you all think that’s an accident.

#100 Trojan House on 03.22.15 at 8:40 pm

#56 Joseph R. on 03.22.15 at 4:18 pm

Once a realturd starts providing advice, then yes, there is a client relationship being established. The other thing is that a contract does not have to be signed to have this relationship. It is rooted in simple contract law but it is very hard to draw lines at where a client relationship began. So be very careful when dealing with a realturd, especially if you feel the need to start asking them more questions about the market, etc, etc.

Sure, you can sign a BRA for one property but I’ll bet dollars to donuts that an agent could argue that you established a relationship with them regardless and charge you the commission that you promised to pay in the BRA.

In Ontario, real estate is governed by the Real Estate Council of Ontario (RECO), a quasi-governmental agency. Here’s their website: http://www.reco.on.ca/

People should read the information that is on the website first before starting any real estate transactions (but I bet most people don’t know they exist). You can even see what agents have been convicted or face penalties for shady dealings. I’m sure other provinces have the same thing.

#101 james on 03.22.15 at 8:58 pm

#99 Smoking Man

“Amazing how our perfect school system produces so many obedient slaves, very few owners..”

Indeed, the North American school system is set up for socialization, not for such superfluous purposes as teaching students. It is instructive to read Dewey and other early architects.

However, aren’t we drifting off the topic?

#102 ulsterman on 03.22.15 at 9:01 pm

I think the generational “who had/has it tougher” between Millennials and Boomers is highlighted by the case of Frank and his wife.

Frank & Faye found life challenging enough from the mid 70’s to their retirement that they were only able to save a relatively small amount in their RRSP’s after paying their mortgage. However, they’ve been rescued by a soaring property martket. They also lived in an era with relatively cheap university, housing, bettter job security, more unionized work, and generally fewer fees/taxes on everyday life. Theirs was not the world of contract working and unpaid internships lasting a year.

Where I think the Millennials get frustrated is that if THESE people couldn’t make it, what chance to they have. Millennials can’t afford houses, have heavy student debts, insecure contract McJobs, no pensions, every service that used to be free now comes with a charge or tax, and every-increasing tax burden etc etc. AND they are unlikely to experience the lottery-win sized appreciation in real estate that bailed out their parents.

I’m guessing most Millennials (I’m not one) would love to have the dilemna of how to extract the $1m+ of cash from there real estate. Sure selling the family home is painful, but the $1m will certainly soften the blow I think. Imagine facing the uncertain future many Millennials do?

#103 rainclouds on 03.22.15 at 9:08 pm

#74 Prairie43

Thanks for the visual:

I believe you are describing “the sticks” not “country living”. Holed up in some isolated backwater with a party line, gun, instant coffee, and freezer is probably not what the average urbanite is envisioning……

unless suicide is the end game.

#104 Victor V on 03.22.15 at 9:15 pm

https://ca.finance.yahoo.com/news/weak-oil-prices-keep-attention-canadas-economy-poloz-140008240.html

“Oil prices seem poised to dip further and housing risks are growing as demand in Alberta’s hot real estate markets appears to be plummeting,” said Alexander Lowy, an associate economist at Moody’s Analytics in a note.

“People are still trying to get a handle on what these falling oil prices really mean for inflation and monetary policy,” Colin Cieszynski, senior markets analyst at CMC Markets Canada added in an interview.

Moody’s has revised its forecast for real GDP growth in Canada to 2.2 per cent in 2015, down from 2.4 per cent in January.

On Thursday, Bank of Canada governor Stephen Poloz will speak at the Chamber of Commerce in the U.K. where he may offer some insight into the timing of another interest rate move.

#105 Karma on 03.22.15 at 9:39 pm

“Sounds appealing to many people. For some of them, it’s a solution. For many others, a trap.

Here’s why. A reverse mortgage is just that – a debt that grows and eats your equity, instead of one you pay off, increasing equity. The longer it’s in place (and most people take one out for their remaining lifetimes), the bigger is swells – since interest is steadily accumulating – and the more that will have to be repaid when you sell the house or depart this vail of tears.”
—————————————————————-

Anyone who would rather take out a reverse mortgage over the option of selling and downsizing deserves the consequences of their choices. And the children should be a part of the discussion/decision-making.

Frank, sell the bung. If you are the one who paid for the house singlehanded, it should be your call at the end of the day. Obviously, you need to consult the wife to understand her concerns. But chances are your gut decision to sell the place and invest is not only in your long-term best interest, but also hers! She will likely outlive you (no offence) and will be entirely dependent on the equity released from the sale of the house.

But if you don’t sell, and continue as is… you will, unfortunately, suffer the consequences. And you won’t be the only boomers to suffer…

#106 Millmech on 03.22.15 at 9:40 pm

Cici,
Not a good plan,ex would likely get spousal support after not working for all those years.Yes they would split assets but she would get spousal for as long as he lived or until she remarried which probably wouldn’t happen.Knock off another 500-1000 mth from his earnings to pay her,cheaper to stay together as a lot of people are going to find out.

#107 The real Kip on 03.22.15 at 9:45 pm

Take the reverse mortgage. Run out of money and breath at the exact same moment and let the kids figure it out. They’ll just sell it and take the cash anyway.

#108 Funky on 03.22.15 at 9:47 pm

#70 Squirrel meat

Thank you. That’s hilarious. Did he look like Kirk at all?

Regardless, we’ll look for him in the fall.

#109 Chickenlittle on 03.22.15 at 9:48 pm

#101 James re Smoking Man:
“It is instructive to read Dewey and other early architects.

However, aren’t we drifting off the topic.”

…………

You must be new to this blog. He is on something, just not on topic.

#110 Andrew Woburn on 03.22.15 at 9:54 pm

Looks to me like rural trailer parks are going to be a growth industry. Beats the Downtown Eastside though.

#111 Mark on 03.22.15 at 9:56 pm

“they are unlikely to experience the lottery-win sized appreciation in real estate that bailed out their parents. “

The sun is likely to shine on millenials in other ways though. Every generation or cohort has an opportunity to make lots of money in some way or another.

I’d argue that the contemporary stock market, the contemporary precious metal market, and the labour market are going to be the real superstars of future outperformance. And the elderly and almost-retiring boomers are very underweight in all three categories (ie: their labour is almost depleted, they own almost no precious metals, and even stocks are relatively underweight fixed income).

Basically put, if you want an idea of what the future might be like, figure out who the big winners, asset-class-wise are when both fixed income and houses deliver a few decades of negative real returns. Invest accordingly. The model of heavily weighting bonds going into retirement, and Boomers/seniors’ obsession with RE ownership will probably prove disastrous.

#112 lala on 03.22.15 at 9:59 pm

Sunday post are painfully because Garth knows tomorrow is Monday. Mr.Turner you cannot trick “lala” as I don’t have to wake up early tomorrow..:.:..but I remember the feeling.

#113 mr pepsi on 03.22.15 at 10:01 pm

Garth… roughly speaking how much tax would these people have to pay a year based on their $70,000 investment income?

Very little, as dividends and capital gains are taxed at a fraction of the rate employment income attracts. — Garth

#114 Smoking Man on 03.22.15 at 10:01 pm

#101 james on 03.22.15 at 8:58 pm
#99 Smoking Man
“Amazing how our perfect school system produces so many obedient slaves, very few owners..”
Indeed, the North American school system is set up for socialization, not for such superfluous purposes as teaching students. It is instructive to read Dewey and other early architects.
However, aren’t we drifting off the topic?
……..

Ha, you ain’t seen nothing yet, I must be making the big leagues, got a scathing, profanity laced death threat emailed to me over a post I put out here the other day…

Well scum bag, you have lit a fire under my ass. You shouldn’t do that.

I’m going to take my time with the rebuttal, but some time this week, I’m going too, using perfectly spelt words, I’m going to rip off your head.

It’s going to be my most epic post ever on here, hope it makes it past the moderator.

#115 Squirrel meat on 03.22.15 at 10:06 pm

Actually it’s the Germans that owe the Greeks………..

http://www.washingtonpost.com/world/europe/in-germany-vs-greece-who-owes-who/2015/03/21/e5872e18-cd7a-11e4-8730-4f473416e759_story.html?hpid=z11

“A Greek auditing office estimated could run as high as $340 billion, coincidentally enough to wipe out Greek debt.”

#116 OttawaMike on 03.22.15 at 10:22 pm

#88 Nora Lenderby on 03.22.15 at 7:34 pm

And others..

———————————————-

I really wish people would tell their stories with a little bit of information such as the name of their town.
It would make the narrative relevant and more useful.

Don’t worry people. The internet will not send assassins to ring your door bell and kill you if you include your town’s name. Sheesh.

#117 Karma on 03.22.15 at 10:26 pm

#69 april on 03.22.15 at 5:48 pm
“#12 – Is there such a place as a free hold townhouse? non strata? Not in the lowermainland BC”

‘Freehold’ doesn’t mean non-strata…

#118 Karma on 03.22.15 at 10:37 pm

#77 devore on 03.22.15 at 6:39 pm
“Although a reverse mortgage is objectively very poor financial value, it has very high emotional value. You get to keep your house, and carry on as if nothing ever happened. You will never have to face up to your friends and family, and admit you have no money and had to sell the house. At least, not until you die, and leave a big pile of nothing behind.”

You’re right about the emotional aspect. However, emotions are for the weak. Hiding behind a veil of lies is also a sign of weakness. At the end of the day, their friends don’t care about what they do or how little money they have. It could even help others see that it’s a normal thing to capitalize on house appreciation and downsize.

#119 Moses71 on 03.22.15 at 10:43 pm

Alimony, etc., etc. not a conversation. A man who justified probably 40yrs of why to support another individual will probably never leave. Even though the diapers’s stage was over decades ago. And nope, he never mentioned supporting a disabling, so pft on that argument. You’re running off on the hip in the wrong forum. Millions of women do the stay at home work and work. Don’t go there
Why bother Mr. Garth for advice when only needing to follow his blogs for a week will arm you with your financial questions. Sounds more like a cry for help from a whipped person who’s seeking justification to follow the non-contributor to society’s wishes.
Dr. Nathaniel Branden has 20 books on self -esteem. Wouldn’t hurt to grab a copy (any one!) for the anchor half or better, for yourself. Trying to help
Maybe the anchor half with much t
Seems

#120 april on 03.22.15 at 10:48 pm

#117 – I understand that. It was #13[not #12] that got me going. As far as I know there are no freehold townhouses in the lowermainland that don’t include strata fees but maybe I’m just confused……….

#121 Nagraj on 03.22.15 at 10:50 pm

#94 Godth: “Die Kommenden Tage”

Wie koennten Sie wissen dass Deutsch eigentlich doch meine Muttersprache ist?
Translation: How you knowink zat ze Deutsch ist my muzzer tonk?
Auch: Do you knowink all ze ferds to “Ach Du Lieber Augustin”? That’s a medieval PLAGUE ditty, but not at all unsuitable to the real estate (and oil) carnage to come.

#122 meslippery on 03.22.15 at 10:51 pm

Blog dogs I am told that natural gas hot water heating is
cheaper than electric hot water heating.
So I ask a friend who is in the business what about a
natural gas generator and get off hydro?
He says no hydro is cheaper. Seems to fly in the face visa/ vee the hot water thingy. Any thoughts?

#123 Karma on 03.22.15 at 10:52 pm

#86 Cici on 03.22.15 at 7:29 pm

“Am I too hard-ass or reasonable?”

Reasonable for the most part. It does have nuances though. If the kids are still in uni or college, then it might not be fair to charge them. But if they are working full or part time with nothing stopping them from moving out except for inertia, then they should be forced to pay rent.

#124 april on 03.22.15 at 10:55 pm

#110 Why do you think that? I’ve thought the same thing but only if they’re on their own land…pad rentals in the range of $7/900 per month in the lowermainland BC, unless way out of town, like Aldergrove or Chiliwack. Problem is these mobile homes are usually very old. As far as I know their life span is about 30 yrs??

#125 Interstellar Old Yeller on 03.22.15 at 11:01 pm

#86 Cici on 03.22.15 at 7:29 pm

I wouldn’t say Faye is calling all the financial shots. In a partnership, both partners should agree on major decisions. Either Faye needs to convince Frank that her plan (whatever it is) is the way to go, or Frank needs to convince Faye that his plan is the best idea. Frank, work hard to convey that the million bucks is far more security than the house can offer. Once infirmity creeps up and you can’t keep up the yard work and maintenance or manage the stairs like you used to, the house becomes a prison and a burden, not your security.

#126 millenial1982 on 03.22.15 at 11:06 pm

#114 Smoking Man on 03.22.15 at 10:01 pm

#101 james on 03.22.15 at 8:58 pm
#99 Smoking Man

Ha, you ain’t seen nothing yet, I must be making the big leagues, got a scathing, profanity laced death threat emailed to me over a post I put out here the other day… m going to take my time with the rebuttal, but some time this week, I’m going too, using perfectly spelt words, I’m going to rip off your head.

It’s going to be my most epic post ever on here, hope it makes it past the moderator
———

SMOKING MAN 2.0. Double the Wine and JD. You will be skewled!!

#127 Wildnutter on 03.22.15 at 11:12 pm

Garth, you need to stay up later approving these things….. I know you have hit retirement age and what not, but it is rather unfair to us westerners to get cut-off so early… it’s like elections .. everything decided before we even vote.

#128 Interstellar Old Yeller on 03.22.15 at 11:12 pm

#111 Mark on 03.22.15 at 9:56 pm

The sun is likely to shine on millenials in other ways though. Every generation or cohort has an opportunity to make lots of money in some way or another.

Appreciate your optimism. I don’t entirely disagree when Millennials forecast a collectively gloomy future, but there are always those who can profit by assuming the solitude of being contrarian and the risk of ignoring conventional “wisdom”.

#129 devore on 03.22.15 at 11:13 pm

#78 Bill Gable

Holy Cow.

This is a Recovery, right?

As you’re comparing this information to literally nothing, this is context-free data that you cannot draw any conclusions from.

#130 TurnerNation on 03.22.15 at 11:16 pm

I had another Realtor-cum-Uber driver experience.

Brother can you spare a dime.

#131 devore on 03.22.15 at 11:29 pm

#101 james

Indeed, the North American school system is set up for socialization, not for such superfluous purposes as teaching students.

If schools were for socialization, they would mix students and adults of various ages and backgrounds. But they do not; it’s basically Lord of the Flies, with $100 jeans. School is just glorified day care while parents are at work slaving away to pay the mortgage.

#132 mdm on 03.22.15 at 11:36 pm

great comment to#92 Andrew…and otherwise mentioned on here is about buying property 1-2 hours away as more affordable…that is the case, for now…House prices in the burbs or small towns are getting out of reach as well in price for many. What is next? Burbs will be 3 hours away? People renting during the week then driving HOME for the weekends? Most can’t afford to support 2 homes. This is why I’ll be buying land for $50,000 about 45 minutes out of the city and then, upon retirement, building my modular home on it (today’s cost to build about $120/sq.ft. all in. No McMansion, no condo from hell, just my simple 1/2 acre land with my 1000 sq.ft. abode. AND thanks to Garth, I will have cash to retire with from my investments!

#133 Andrew Woburn on 03.22.15 at 11:46 pm

#124 april on 03.22.15 at 10:55 pm
#110 Why do you think that? I’ve thought the same thing but only if they’re on their own land…pad rentals in the range of $7/900 per month in the lowermainland BC, unless way out of town, like Aldergrove or Chiliwack. Problem is these mobile homes are usually very old. As far as I know their life span is about 30 yrs??
==================

Why do you think that?

Don’t know much about the economics of TP’s. It’s just I’ve noticed some fairly presentable ones around Nanaimo and assumed that they would be a reasonable choice for people on a limited budget compared to renting a tiny condo. I hear pad rentals here are about $500-600 pm. As you say this would only really work if you had a relatively new unit.

One downside could be that the landowner is just waiting for an indecent offer from a developer. That happened in the area a couple of years ago and many of the trailers were too decrepit to even move to another location. Not what you want to hear when you’re 80.

#134 B Riding on 03.22.15 at 11:54 pm

I would give the guy in the photo my pocket change. Beggar with honesty, but I would prefer a joint and chicken strips.

#135 Randy Randerson on 03.23.15 at 1:00 am

#125 Interstellar Old Yeller on 03.22.15 at 11:01 pm

That’s what happens when people wrongly thinks any relationship is a partnership and that people need to compromise. I’d say NO! You cannot always have two people agree on something, especially when it comes to something as emotional as a house. Frank needs to be the strong one and take the lead.

When you fly, do you trust that your plane has two captains? When you’re on a cruise, do you trust the ship has two captains? The chief officer/captain is there to lead, the second-in-command is to follow C.O.’s lead and guide him.

#136 Mister Obvious on 03.23.15 at 1:17 am

#116 OttawaMike

“I really wish people would tell their stories with a little bit of information such as the name of their town. It would make the narrative relevant and more useful.”
—————————

Except, of course, in the case of Vancouver. The stuff that happens in this town is so telltale vacuous that reporting the locale is entirely redundant.

#137 NoOneOfConsequence on 03.23.15 at 1:38 am

I find it sad that so many people from tiny, go nowhere, do nothing towns brag about their “quality of life”…yawn – give me a break!

I think you spend so much time telling yourselves how good it is because there’s nothing else to do!

No amenities, no culture, dwindling stores and health opportunities, no future for your children.

There’s a reason that the entire world is urbanizing…it’s because small towns are a dead end.

I couldn’t leave the small town I grew up in fast enough…got tired of my parents telling me about how great “our quality of life” was when there was no jobs, nothing to do, the mill and the last department store closed and the doctor left town because it was impossible to make any real money.

“Quality of life”….yeah right. I pity you all in your delusions.

#138 ulsterman on 03.23.15 at 2:30 am

Mark, good points but I’d say that the Millennials are in a tricky position because many will never have the after-tax savings available to invest a worthwhile amount. Housing is unaffordable, renting fairly expensive, student loans onerous, and quality jobs not in abundance.

You say eacch generation has some opportunity to make lots of money. The Boomers didn’t have to think too hard about their investment decisions. They bought houses to live in and even if that was the extent of their financial planning they have done extremely well. Many will have defined benefit pensions, CPP, OAS, and a paid off house.

Now if they live in the boonies with a house worth only a couple of hundred grand, then OK, it’s not such a cash cow if you have nothing else. But if you are a boomer in Van, Tor, Calgary etc you’re sitting on a fat asset. Sell it or yake out a huge HELOC and use it to supplement your income.

#139 PeterfromCalgary on 03.23.15 at 3:12 am

A lot people are going to keep working until they can’t. Forget about freedom 55. The new reality is freedom 95 when you drop dead on the job.

#140 LP on 03.23.15 at 3:35 am

#86 Cici on 03.22.15 at 7:29 pm

…I also think the stay-at-home mother role is only valuable to the family unit until the kids are old enough to go to school. Being a stay-at-home mom to teenagers who are probably hardly ever around anyways seems even more ridiculous.
***************************

I may be being presumptious when I think that you have not (yet) raised teenagers. Most of the parents I know will agree with me that a stay-at-home parent is perhaps more important when your kid is a teen than when they are infants or toddlers.

It’s true that a working Mom or Dad might miss the first steps or the first word and maybe won’t have much to do with toilet training.

However, working parents miss a great deal with teens too. Like the late afternoon conversations about who is doing drugs at school, the teacher who makes inappropriate comments, the opportunity – or not – to take a ride from that cute guy who drives too fast or who takes the occasional drink from his Dad’s liquor cabinet.

Please don’t be so quick to discount the value of a stay-at-home parent be it Mom or Dad. They do valuable service to the family unit while, nowadays anyway, doing themselves the disservice of becoming almost useless, even unemployable, to the modern work force. And then to be dismissed with a sniff like you did…

#141 Lobster Man on 03.23.15 at 4:02 am

#122- meslippery

First of all, natural gas hot water heater are generally more economical to own and to operate. Comparing these two can be quite involved, and could be site-specific. An example would be the need to add new wiring and circuit breaker, or even a new electrical panel for the electrical option if you are dealing with an older house. But assuming all things being more or less equal (no major retrofits for either method), then the main reason for choosing natural gas for your hot water tank is because of its superior “recovery rate”. This is the rate a certain amount of water can be heated to a predetermined temperature rise. Here, the natural gas hot water heater wins hands down. To compensate for a poorer recovery rate, an electric hot water heater is usually larger, say 60 gallons, compare to a usual 40-gallon natural gas hot water tank, thus requiring a larger real estate space etc.

As for your idea of running your own natural gas generator to displace your Hydro, your friend is correct. It won’t cost you less. It is a matter of economics of scales. Hydro generates huge amounts of electricity, and their costs, including all their delivery infrastructure costs, are far lower than yours on a PER UNIT basis. You can get your friend to give you a per kilowatt cost of a natural gas generator (of sufficient size) installation at your place, add to it your fuel costs, maintenance costs etc. And you can easily compare that with the average cost of your Hydro bill. Beyond that, you have to talk about service reliability.

#142 sean on 03.23.15 at 5:00 am

#122 meslippery

Consider that:

– A large (i.e. electric utility) combined cycle gas generating plant can be up to 60% efficient.
– A typical small natural gas reciprocating engine genset is typically less than 25% efficient (on a good day)
– Conversion from electricity to heat in an electric hot water is 100% efficient (ignoring trivial line losses between meter and tank).
– Conversion from gas to heat in a gas fired water heater is typically 85% efficient

So, consider three cases:

1) home conversion of gas direct to hot water: 85% efficient.

2) utility conversion of gas -> electricity -> hot water: 65% * 100% = 65% efficient

3) home conversion of gas -> electricty -> hot water is 25% * 100% = 25% efficient

This is before one considers that the electric utility can get a better deal on bulk purchases of gas than you can, or that the utility might be using cheaper coal or nuclear generation.

The laws of thermodynamics dictate that gas->heat will always be more efficient than gas->electricity; the laws of economics dictate that utility generator efficiencies will always be greater than home generator efficiencies.

#143 Squad on 03.23.15 at 5:47 am

Garth, another fellow writer sounding the alarm about the Canadian housing market (he’s predicting this spring or summer).

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/richardson-gmps-hilliard-macbeth-sounds-the-housing-crash-warning/article20750421/

#144 rosie "moving forward" in the knowledge that, "this won't end well" on 03.23.15 at 7:53 am

Meep Meep!

https://www.linkedin.com/pulse/crazy-canadian-credit-confronts-crude-eh-vikram-mansharamani

#145 Karma on 03.23.15 at 8:46 am

This is on “Carrick’s Best Reads”… I wonder how many people actually read this list on a daily basis…

https://www.linkedin.com/pulse/crazy-canadian-credit-confronts-crude-eh-vikram-mansharamani

#146 Detalumis on 03.23.15 at 9:00 am

#96 and #140 Nobody more “self-righteous” than a stay at home mom is there. I doubt Faye there, is Mrs. Mother Theresa looking after disabled kids and elderly parents, not a person who encourages a 53 year old man to work harder and buy a new house. The guy fell for her story hook line and sinker and he has no options.

You can never dump a Faye, not ever, you will be hit with spousal for life because you enabled and encouraged her to be childlike and dependent her entire life. It made you feel like Mr. Big Provider, an ego-boost. Nobody needs Mom around 24-7, look daughter, see me quit my career and live my life through my kids, a great message to give them particularly girls who can never be stay-at-homes themselves.

Do you really think Hillary Clinton was a bad mom and a bad example, where is the Kool-Aid. Nobody should ever be financially dependent on another person, it’s the worst thing you can do.

#147 Nora Lenderby on 03.23.15 at 9:12 am

#116 OttawaMike on 03.22.15 at 10:22 pm
I really wish people would tell their stories with a little bit of information such as the name of their town.
It would make the narrative relevant and more useful.
Don’t worry people. The internet will not send assassins to ring your door bell and kill you if you include your town’s name. Sheesh.

I didn’t particularly see the place name as relevant information, since there are so many small towns and villages with excellent facilities in Canada.

However, since you ask, the village is Morrisburg in South Dundas, Ontario, (affectionately called South Dumbass by my louche friends). I think it should be called Dogburg, judging by the number of dog owners and the pet-friendly facilities.

As for ninja assassins; I invented the internet, grasshopper, I fear it not.

You are welcome to press my bell, anytime.

#148 Incubus on 03.23.15 at 9:16 am

They should sell the house, move out of Ontario to a poor city like Montreal, or in the Maritimes and rent a nice appartement for few hundred dollars.

The money should be invested in stocks with ~ 4% yield.

#149 Berniebee on 03.23.15 at 9:19 am

#122 meslippery

“So I ask a friend who is in the business what about a
natural gas generator and get off hydro?”

If you were to cut off hydro and run a natural gas generator, you would be buying VERY expensive electricity.
That’s because generators, even those fueled by natural gas, waste about three quarters of the fuel to produce heat instead of electricity. And that’s in the best case, when you match the generator size to the load.

So it’s actually worse than that. You would need a large capacity generator to power say, an electric clothes dryer and stove.
A generator’s efficiency is at peak when it is powering a heavy load. But most of the time, that large generator would just be idling while it supplied juice to electricity sippers like laptops and lighting. So the overall efficiency would be even less.

And remember, a generator requires oil and spark plug changes and other maintenance, space to install it, and sound proofing.
Running 24/7, they wear out pretty quickly, unless you buy a commercial unit…for a lot of money.

That’s why generators are usually only used for emergency backup or on construction sites in remote locations.

Solar energy, over the long run, is much cheaper than a generator.

#150 Julia on 03.23.15 at 9:22 am

#75 Victor V
“Reverse mortgages may not seem so obscene when you consider that a third of Canadians expect to fund their retirement by winning the lottery.”

Funny, I was thinking about reading these stats few years ago as being 15%. I thought that was insane.

#151 Jib Halyard on 03.23.15 at 9:27 am

#137 “I find it sad that so many people from tiny, go nowhere, do nothing towns brag about their “quality of life”…yawn – give me a break!”

I have lived in a fly-in sub-arctic hamlet of 400 souls, in an Asian megalopolis and in everything in between. I know what I am talking about when I say that the cost-benefit sweet spot is decidedly not Toronto or Vancouver. Small to mid-sized Canadian cities are not suffering from “dwindling stores and health opportunities”. You seem to suffer from the delusion that places like Barrie or Orillia are dying Newfoundland fishing villages.

#152 Stan Colimore on 03.23.15 at 9:43 am

http://pentodpost.com/Business/Home/Filter?ProfileId=5&Category=0&Date=5&Objective=0&SortBy=2&QueryString=canada%20housing

#153 Bottoms_Up on 03.23.15 at 9:52 am

HELOCs probably the best way to go (and use Garth to invest the proceeds).

$800,000 HELOC on a million dollar home, equals monthly tax deductible interest payments of $1333 (at 2% interest), but monthly cash flow of $4000 (at 6% dividends/market gains), less Garth’s fee of 1% ($667 monthly) thus a roughly net increase in monthly income of $2000. Not bad, plus get to stay in your house, and still have an investment nut of $800,000, while retaining any future increases in the value of your home when time come to actually sell.

#154 Holy Crap Wheres The Tylenol on 03.23.15 at 9:52 am

Frank and Faye own a bung in the west end of Toronto, which their two adult children covet. “Isn’t gonna happen,” says Frank. “It’s all we’ve got, basically.” They paid $680,000 for it ten years ago, and figure it’s worth about a million now, mostly land value.
______________________________________________
Unfortunately they only have two real choices.
A. Punch out now on a high, take the $1M invest and rent!
B. Punch out now on a high, take the $1M purchase a smaller place, condo, town-home or go somewhere outside of the GTA where homes are much more affordable.

Given my druthers if I was attached to the idea of owning a home I would get the hell out of Dodge and go say down to the Niagara Peninsula where the homes are much more reasonable.
My wife and I have just recently sold our home in Oakville. It was a little bit disconcerting but what the hell was I going to do with 1/4 acre with a 2000 sq ft bungalow when I’m old and wrinkly. Well mid sixties I would guess is old so half way there! Anyway we have seen a few people in our area who were lifers out here in the hinterland of Oakville in the same situation. They had worked hard to pay off the family home but little in savings. Quite a few have done the BC thing out to Parksville, Cant say for sure if its super cheap but it is beautiful. Problem being getting there is a pain in the ass and if you want your grandchildren to visit good luck.

#155 Holy Crap Wheres The Tylenol on 03.23.15 at 9:57 am

Frank and Faye own a bung in the west end of Toronto, which their two adult children covet.
Should sell ASAP anything over $1M is going to take the hardest hit when things go south. If your in the $600K range its still affordable. Not saying there are a lot of $600K home out there but they are open to a wider demographic range of buyers.

#156 OttawaMike on 03.23.15 at 9:58 am

147 Nora Lenderby

As for ninja assassins; I invented the internet, grasshopper, I fear it not.

You are welcome to press my bell, anytime.

————————————————–

I’m 45 minutes up hwy. 31. Call me if you need backup against the Ninjas. My 1200cc Ninja will get me there fast.

Although here in the Idiot Valley, more chance of running into an well..

#157 Bottoms_Up on 03.23.15 at 10:03 am

#140 LP on 03.23.15 at 3:35 am
——————————————
Agreed, parents need to be more involved in their children’s lives, not less involved. And it takes the equivalent of 3 full working days per week to run a household (cleaning, shopping, cooking etc.). Plus there’s the added costs of daycare/childcare when both parents are working. Before and after school care for children runs $500/mo….you have 3 kids in this, and the stay-at-home parent is saving the family unit $1500/mo.

#158 NoName on 03.23.15 at 10:07 am

#122 meslippery

most efficient ICE is formula one engine if I remember well, only 25-30% of used energy goes to propelling a vehicle and rest is “useless” heat.
small engines are the most inefficient engines out there, does lawnmower rings a bell?

#159 Holy Crap Wheres The Tylenol on 03.23.15 at 10:08 am

#114 Smoking Man on 03.22.15 at 10:01 pm
#101 james on 03.22.15 at 8:58 pm
#99 Smoking Man
“Amazing how our perfect school system produces so many obedient slaves, very few owners..”
Indeed, the North American school system is set up for socialization, not for such superfluous purposes as teaching students. It is instructive to read Dewey and other early architects.
However, aren’t we drifting off the topic?
……..
Ha, you ain’t seen nothing yet, I must be making the big leagues, got a scathing, profanity laced death threat emailed to me over a post I put out here the other day…

Well scum bag, you have lit a fire under my ass. You shouldn’t do that.
I’m going to take my time with the rebuttal, but some time this week, I’m going too, using perfectly spelt words, I’m going to rip off your head.
It’s going to be my most epic post ever on here, hope it makes it past the moderator.
_____________________________________________
This should be an interesting read. Please make sure the spelling is correct. Looking forward to a rebuttal.
BTW read that you killed your dogs opportunity of procreation? Don’t you want a home full of puppies? They are great!

#160 DisgustMadeMePost on 03.23.15 at 10:21 am

#146 Detalumis on 03.23.15 at 9:00 am

Just what I’d want to do .. Work my * off at two fulltime jobs in a losing effort to prove MY value to a spouse like you.

I can only imagine the values you could instill in a teenage boy.

#161 Broke Dick on 03.23.15 at 10:25 am

Re- A case for a Reverse Mortgage

Now if you are the type to believe that RE in your neck of the woods is about to drop by 30-50% then the best thing you could possible do is take out a reverse mortgage before the fall.

Think about, you receive 50% of your homes value up front and you get to live there til death do you part.

Sort of getting you cake and eating it too.

But of course we all know that is not going to happen in Toronto.

#162 saskatoon on 03.23.15 at 10:25 am

#86 Cici

yay!

let the state raise your kids!

yay!!!!!!!!

(cue smoking man)

#163 David Hawke on 03.23.15 at 10:29 am

They could do the smart thing, unload the house, invest $900,000 of the million, move to a country with a decent climate, live well and still leave an inheritance to the kids!

#164 cramar on 03.23.15 at 10:30 am

Frank and Faye have a gold mine and they just don’t realize it. Sell the stupid house, invest the money as Garth suggests, move out of the big city, and rent a nice apartment or small house. I would suggest moving to an area like the Niagara Region if they want to be near kids. Now they are REAL millionaires, with no financial worries. Why are people in Toronto who are income strapped, cash poor, yet sit on million dollar properties so financially illiterate?

#165 DisgusMadeMePost on 03.23.15 at 10:57 am

143 Squad

Also watch

http://www.cbc.ca/player/News/Business/ID/2659327058/

Thought I hit the post button already, apologies if its a duplicate

#166 Retired Boomer - WI on 03.23.15 at 11:00 am

Frank & Faye have a higher net worth than I do (on paper).

Trouble is it is mostly wrapped up in a single asset that costs much to keep, throws off no cash, and they have diddley-squat to live on.

Frank & Faye you need to change that now while the getting price for that asset is still good.

Lot’s of options, but staying in place is not one of them.

#167 Obvious Truth on 03.23.15 at 11:02 am

Men trashing women, young trashing old, people from various parts of the workd getting trashed and now a husband and wife getting trashed for raising a family and not knowing what to do with $1M.

How do we always sink to these depths?

#168 rosie "moving forward" in the knowledge that, "this won't end well" on 03.23.15 at 11:05 am

Children are doing everything but writing the check.

http://www.nytimes.com/2015/03/22/realestate/when-new-york-kids-help-find-the-family-home.html?_r=1

#169 Daisy Mae on 03.23.15 at 11:13 am

#146: “….encouraged her to be childlike and dependent her entire life.”

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

‘Childlike’? Wow. Anyway, I’d never recommend todays’ women be stay-at-home moms. I was one…and it is ideal. However, 50% of todays marriages go up in smoke….and where would that leave her? She’s gotta protect herself. As for earnings, it’s never the amount of money earned but rather the management of that money which determines how well couples do. And most Canadians don’t do so well….

#170 20something on 03.23.15 at 11:22 am

They should sell their home and buy something in a less expensive part of the GTA/southern Ontario. They can invest the difference and use the income to offset their living expenses. Barrie is a nice community and for 350k they could get a nice little property close to cottage country, golfing, fishing, but with nearby amenities such as hospitals, shopping, etc.

#171 Bottoms_Up on 03.23.15 at 11:32 am

#28 JayP on 03.22.15 at 1:22 pm
————————————————
A while back many posters on here disclosed income and assets and debt. Believe it or not you’d rank near the bottom for net wealth (assuming everyone was telling the truth).

Instead of paying down your 3% mortgage (which you could refinance at about 2% today), why don’t you take that extra $12,000/yr and invest it for your future. You can reasonably grow that money 6% per year (you have self-proclaimed gains of 5% even with losses). Instead of paying down what is likely a depreciating asset over the next few years, focusing on wealth accumulation might be a better play.

#172 HAM Shrinkage on 03.23.15 at 11:35 am

They’re leaving, according to Urban Futures:

Q4 2014 Population Estimates
Published on Mar 21, 2015

For more details on how the population in each province and territory changed in Q4 2014, follow this link: http://www.urbanfutures.com/qds-q42014

As expected, Canada’s population grew through the final quarter of 2014, reaching 37.7 million people by the end of last year. What was unexpected, however, was the pace of growth: in adding only 27,000 new residents, Canada posted its smallest three-month gain since quarterly estimates were first published by Statistics Canada back in 1972. To put this into further perspective, the national population has added an average of 46,000 people in the fourth quarter over the past five years (2009 through 2013).

The primary factor driving this slow-down was the net loss of people through international migration. This decline was driven by a net loss of 40,000 non-permanent residents in Q4 2014, as the four-year window originally made available for temporary foreign workers to stay in Canada comes to a close on April 1, 2015. In light of this, we should expect further declines in the number of non-permanent residents through Q1 2015.

The loss of non-permanent residents was not helped much by the slow pace of immigration, with the 52,175 immigrants in Q4 2014 being ten percent below the Q4 average for the past five years. Meanwhile, emigration remained relatively unchanged from the same period a year ago, at 12,700.

Here in BC, our population growth was relatively flat, with the province adding only 1,325 people in Q4. While natural increase (the difference between births and deaths) added 1,900 people, and net interprovincial migration added another 2,500–BC’s largest Q4 addition since 2007–the province lost 3,150 people through net international migration. As was the case for Canada as a whole, this was driven by the loss of non-permanent residents (to the tune of a net outflow of 6,950 people in Q4).

What about Alberta, you ask? Well, this was another surprise: even in the face of the most significant oil price shock since the depths of the 2009 recession, the Statistics Canada data show that Alberta still managed to add 14,000 people–4,200 of which came through interprovincial migration.

#173 SWL1976 on 03.23.15 at 11:40 am

#137 NoOneOfConsequence

There’s a reason that the entire world is urbanizing…it’s because small towns are a dead end.

————————————-

Actually it’s called ‘Agenda 21’ and all you fresh ‘cultured’ city folk might want to read up on the subject between sipping latte’s and talking about the latest trends.

It’s too bad small communities and family farms are on the hit list as they are great places to live.

Don’t be fooled by the ones behind the conception of this plan with their talk of ‘sustainable’ and ‘SMART’

I would rather put my trust with a realtor in a hot condo market in the city complete with a BRA in hand

Seriously everyone should understand the trap we are walking into

#174 Squirrel meat on 03.23.15 at 11:53 am

Generation screwed.
“We were raised with the fable that university is the ticket to success. Many of us bowed to it, an we’re now serving coffee”

http://news.nationalpost.com/2015/03/23/perez-pereira-meet-the-millennials-generation-screwed/

#175 Alberta is FINISHED on 03.23.15 at 12:00 pm

http://business.financialpost.com/2015/03/23/oilsands-producers-face-harsh-reality-of-todays-rout-theres-no-one-to-save-them-this-time/?__lsa=9980-8ab4

#176 cramar on 03.23.15 at 12:07 pm

28 JayP on 03.22.15 at 1:22 pm
Hello …Below is my current financial position, I wonder what bloggers think about it.

———————

Not much! With $200k income what the heck do you do with all your money? According to Thomas J. Stanley’s Wealth Index you should have a net worth of $800k at your age and income. You are a gross underachiever! You have high income, but little wealth. Try living on a $100k income and invest the remainder.

#177 Bottoms_Up on 03.23.15 at 12:57 pm

So, reverse mortgages, in other words:

You are taking out a ‘1st mortgage’ on your home, at an interest rate that gives you nightmares, and allowed to not make monthly payments against it for years while interest accumulates, and interest on interest accumulates.

Come to think of it, these products should be illegal. It really is a ‘mortgage that eats’.

#178 BlackDog on 03.23.15 at 1:05 pm

If I was Faye or Frank, I would sell the house ASAP, invest the money, and rent in a smaller city or town outside of Toronto. That way if they find out they really love TO as much as they think they do or hate the place they move to, they can easily move again. To jump in and buy something right after selling, whether they leave TO or not would be risky. They need to take time to figure out what they really want.

GOOD for them that they have a decent net worth, yet managed to have Faye dedicate herself to taking care of everyone (Frank included), so that Frank could come home from work and maybe have a chance to relax – something two working couples with children rarely get to do. Lets hope they do the right thing and sell while the market is still hot.

#179 Mark on 03.23.15 at 1:19 pm

As if buying a ‘condo’ in a long-term assisted living seniors complex wasn’t an expensive enough proposition:

http://www.cbc.ca/news/canada/british-columbia/retirement-home-fees-of-1k-per-month-continue-after-seniors-die-or-move-out-1.3003411

“Last year, Jack Harris was asked to move out of his independent living complex by the company, which runs the building, because his dementia had caused him to start wandering.
..
“[Jack] is being charged a thousand dollars a month — and getting nothing,” said Rohaly, who wants to warn seniors and their families. “We cannot fight it. It’s a legal agreement.”

Read that fine print….very carefully.

#180 Snowboid on 03.23.15 at 1:32 pm

The steady flow of Albertan relatives and friends visiting the Valley of the Sun has finally diminished.

Based on discussions about their finances, reverse mortgages aren’t in their future even if they wanted them.

How do you explain a mid-60s recent divorcee who just purchased a new home with a $ 500K mortgage. Limited savings, no investments. Retirement at 68 was the goal, now admitting it may never happen.

Or a recently bankrupt one, who still has a taste for fine food, wine and parties.

Another one, also divorced, who admitted living paycheque to paycheque, bragging about the new $ 70K luxury car (and complaining about the Alberta spring mud they have to wash off it).

Actually, if the consumption of booze has an inverse relationship to finances, our Albertan visitors are proof that planning for the future has slipped their minds.

All the time telling how wonderful it is to live in Alberta, and b*tching about the hot weather here.

We thank our ‘lucky stars’ that we listened to the wise professor, and finances are no longer a concern.

Next year it’s likely going to be our close relatives that can visit, at least they appreciate the sun and sand!

P.S. Reverse mortgages are as risky as buying a condo!

Especially if you bought into ‘retirement’ properties as the CBC outlines:

http://tinyurl.com/retirehomehell

#181 John Prine on 03.23.15 at 1:33 pm

I totally get why you feel this way because I wouldn’t have been caught dead in Costco or Walmart when I was younger. However retiring has an interesting way of changing your perspective on costs and prestige. Once we woke up to the fact that big box stores offer many brand name items for maybe 20% less, we got right in touch with our inner bumpkin.
+++++++++++++++++++++++++++++++++++++

We live north of Nanaimo in the country and have a Costco 20 minutes away, being retired, we save a considerable amount shopping there, they provide a lot of employment, source a plenty of regional products, a real aid on getting good prices on a lot of items…Still can’t and won’t do Wal Mart.

#182 4 AM Sunrise on 03.23.15 at 1:39 pm

#111 Mark on 03.22.15 at 9:56 pm

The sun is likely to shine on millenials in other ways though. Every generation or cohort has an opportunity to make lots of money in some way or another.

https://www.youtube.com/user/EvanTubeHD

This 8 year old is pulling in child-actor money (by doing toy reviews!) without suffering the dysfunctions of child-stardom. There is no way that I would have been able to do that at his age in the world that I grew up in. Technology (i.e. Youtube’s advertising revenue mechanism!) makes this sort of thing possible.

Most people won’t be social media millionaires, but with some persistence and know-how they can generate (a small) income with a blog or Youtube channel.

#183 OMG on 03.23.15 at 2:10 pm

Hello, My name is “S ********N“and I’m a massive pot head. I want you to give me some money so that I can get stoned and eat a burrito. Thank you.

Fill in the blank.

I think we know who this person is.
Great photo Garth, never ceases to amaze us where you get these.

#184 Godth on 03.23.15 at 2:20 pm

Civic Literacy and the Assault on Canadian Democracy
Terrorizing Canada With Stephen Harper
http://www.counterpunch.org/2015/03/20/terrorizing-canada-with-stephen-harper/

22 Minutes: Connie – Anti-Terror Legislation

#185 Godth on 03.23.15 at 2:21 pm

22 Minutes: Connie – Anti-Terror Legislation

https://www.youtube.com/watch?v=I1IliGODznk&app=desktop

#186 devore on 03.23.15 at 2:35 pm

#174 Squirrel meat

“We were raised with the fable that university is the ticket to success. Many of us bowed to it, an we’re now serving coffee”

A degree (of the useful kind) is the new high school diploma. It’s a ticket to a pile of entry-level resumes, nothing more. It’s been this way for at least 15 years, since I went there, how is this a surprise to anyone? Overeducation and delayed onset of adulthood have been the generational trends for a century. I thought these millennials are supposed to be the clever ones who figure this stuff out.

#187 Holy Crap Wheres The Tylenol on 03.23.15 at 2:36 pm

#178 BlackDog on 03.23.15 at 1:05 pm

If I was Faye or Frank, I would sell the house ASAP, invest the money, and rent in a smaller city or town outside of Toronto. That way if they find out they really love TO as much as they think they do or hate the place they move to, they can easily move again. To jump in and buy something right after selling, whether they leave TO or not would be risky. They need to take time to figure out what they really want.

GOOD for them that they have a decent net worth, yet managed to have Faye dedicate herself to taking care of everyone (Frank included), so that Frank could come home from work and maybe have a chance to relax – something two working couples with children rarely get to do. Lets hope they do the right thing and sell while the market is still hot.
____________________________________________
Totally agree the idea of a one income household is foreign to all younger ones today. They did it right in spite of the fact their resources are limited. As for selling strike while the iron is hot I always say.
I may be a bit cynical but Faye will most likely win the jackpot as us wrinkly men are always as good as dead just after we retire! Thats just the way it is!
No on second thought I am probably correct on the men croaking thing!

#188 JunkieMan on 03.23.15 at 2:46 pm

http://www.reddit.com/r/PersonalFinanceCanada/comments/301cr6/how_big_a_down_payment_should_i_put_down_on_a/ this guy needs some advice asap!

#189 CD on 03.23.15 at 2:49 pm

#148 Incubis

A poor city like Montreal? Seriously. You sound like an idiot.

#190 Entrepreneur on 03.23.15 at 2:53 pm

#86 Cici…You are too hard-ass. Where is the love? (The love bug has not hit Freedom First but one day it will.) The stay-at-home mom should get a reward as that is a tough job, even when they are teens. A mom has to be on top of everything plus keep drug dealers and other unwanted misfits away (they know when to pounce when adults are not at home). Different times now, not when there were more stay-at-home moms awhile back, no back-up protection. They actually help maintain a healthy environment at home and surrounding area. Are you just kidding, Cici? Are you in the real world?

#149 4 AM Sunrise…”All governments know that money laundering is a problem. I’ve seen with my own eyes blacklists of names with their countries of origin, too.” As long as you have the information of where the money came from on paper, signed and witness, to put the blame on the customer and not the business. If one suspects laundering, one should be very careful of the consequences. And that is another topic.

#191 zudnic on 03.23.15 at 2:57 pm

I know of an elderly Women in the states, she took out a reverse mortgage with her husband. Since they could get a bigger loan with just her husband, they took her off the deed. The husband died and now she needs to repay the loan or sell the house. She can’t repay the loan and selling leaves her little to no equity to live on. She is now basically homeless. Although it was her fault taking her off the deed for more money. Still a lesson on how these reverse mortgages can be nightmares.

#192 will on 03.23.15 at 3:25 pm

https://www.youtube.com/watch?v=P9-GYE6q-sI

Look to celebrities

#193 Nemesis on 03.23.15 at 3:40 pm

#MondayMonday,Or… #WhereTheRubberHitsTheRoad?…

#AndYouThoughtTheyWereItalian… #Arrivederci,DiabloRossoCorsa?

[SCMP] – Pirelli brand and technology core to ChemChina takeover: Proposed €7.1b deal will give the state-backed mainland firm access to Italian tyre maker’s technology, production capacity and sales network

http://www.scmp.com/business/companies/article/1745539/pirelli-brand-and-technology-core-chemchina-takeover

#WeAreNotAmused… #NoMoreCouttsForYou!..

[Independent] – Barbados plans to remove the Queen as head of state almost 400 years after British colonisation

http://www.independent.co.uk/news/world/americas/barbados-plans-to-remove-the-queen-as-head-of-state-almost-400-years-after-british-colonisation-10128601.html

#WhenDownSizingCouldSaveYourLife,Or… #HogTown’sBonfireOfTheVanities… #IronicallyFuelledByAnArchiveOf… #RealEstateLitigation…

[Salon] – Your stuff can kill you: How hoarding creates death traps

…”Usually, a stray cigarette wouldn’t have mattered so much, except this apartment, from the front door right through to the balcony, was piled high with possessions. Mostly the piles contained the legal papers and books which the inhabitant, Stephen Vassilev, had been using to fight a lawsuit over some townhouses he had once owned. From a certain point of view, unit 2424 was less an apartment, and more a 560-square-foot, one-bedroom tinderbox.”…

http://www.salon.com/2015/03/22/your_stuff_can_kill_you_how_hoarding_creates_death_traps/

#HardTimes,Or… #NoCountryForOldBlueNosers…

[G&M] – How the Maritimes became Canada’s incredible shrinking region

“Everyone knows what the problem is,” says Peter McKenna, head of political science at UPEI. “It’s just that no one knows what to do about it.”

http://www.theglobeandmail.com/news/national/how-the-maritimes-became-canadas-incredible-shrinking-region/article23554298/

#EssentialComicRelief,Or… #Thar’sGoldInThemThar…

[Guardian] – Gold in faeces ‘is worth millions and could save the environment’: Geologist suggests extracting precious metals from human waste would keep harmful substances out of the ground – and recover valuable objects

http://www.theguardian.com/science/2015/mar/23/gold-in-faeces-worth-millions-save-environment

#194 Mister Obvious on 03.23.15 at 3:42 pm

#187 Holy Crap Wheres The Tylenol

“…us wrinkly men are always as good as dead just after we retire! Thats just the way it is!”
————————–

Not this wrinkly. I was just about dead before I retired at 56. After retiring, I came alive again. It been 8 years now and I haven’t looked back for a second.

No more idiotic, pointless meetings where 8 managers argue over who gets the resources of one hands-on person to get some actual work done.

No more bogus deadlines, team building exercises, mission statements, core competencies, product evangelism, stakeholders, paradigm shifts and ‘bottom line at the end of the day’ rhetoric.

I’m so done with that. Once retired you have much more time and inclination to nurture both your mental and physical health.

If you’ve invested wisely you also have the resources to live comfortably as you go about reinventing yourself in your second, wiser life.

#195 jess on 03.23.15 at 3:45 pm

http://www.waterloochronicle.ca/news/northdale-design-overhauled/

Wednesday, March, 18, 2015 – 1:01:42 PM
Input needed for strong neighbourhoods

Editorial:
http://www.kitchenerpost.ca/opinion/input-needed-for-strong-neighbourhoods/

Dismantling the Towers
Saturday, 21 March 2015 00:00 By Jonah Newman, Chicago Reporter | Op-Ed
http://www.truth-out.org/opinion/item/29734-dismantling-the-towers

What It’s Like To Be In Hell – NYTimes.com
http://www.nytimes.com/1987/12/04/opinion/what-it-s-like-to-be-in-hell.html
Dec 4, 1987 – Here are the Henry Horner Homes, 19 10-story buildings, red brick outside and cinder block inside, erected with Federal public housing money ..

http://areachicago.org/the-horner-model/
1957 -1991
A redevelopment project, referred to as the Plan for Transformation, is currently in progress to rehabilitate the buildings and create mixed-income housing.[2] The new neighborhood will be called “West Haven”.[3] Phase I of the project, which involved the building of 461 replacement housing units, was completed in 2001. Phase II will be worked on in three stages: public housing, affordable housing and market rate housing.[4] The last high-rise building was demolished in June 2005. The last building in the original projects, a mid-rise, was demolished in 2008.

CHA mixed-income building has class clash
Poor renters and condo owners at odds, but experts say results of the experiment are mixed
June 30, 2009|By Sara Olkon, Tribune reporter
Low-income apartment dwellers and middle-class condo owners have shared Westhaven Park Tower since the building opened in 2006 — an innovative setup that the city hoped would unite residents and exemplify Chicago’s $1.6 billion overhaul of public housing.

#196 Bottoms_Up on 03.23.15 at 3:51 pm

#186 devore on 03.23.15 at 2:35 pm
———————————————
Actually 15 years ago an undergraduate degree in commerce or engineering (from a good school) was basically a ticket to a job.

#197 kommykim on 03.23.15 at 4:02 pm

If you thought reverse mortgages were a “steal”, you love this:
http://www.bloomberg.com/news/articles/2015-02-25/russian-atm-spits-out-loans

#198 Squad on 03.23.15 at 4:13 pm

165 DisgusMadeMePost

Thanks for the link.

#199 Joseph R. on 03.23.15 at 4:19 pm

#100 Trojan House on 03.22.15 at 8:40 pm

Thanks for the detailed answer! In sum, we are screwed then. I doubt any Realtors will inform their perspective clients about that and will show up with a BRA at the first meeting.

#200 Holy Crap Wheres The Tylenol on 03.23.15 at 4:22 pm

#194 Mister Obvious on 03.23.15 at 3:42 pm
#187 Holy Crap Wheres The Tylenol

“…us wrinkly men are always as good as dead just after we retire! Thats just the way it is!”
————————–
Not this wrinkly. I was just about dead before I retired at 56. After retiring, I came alive again. It been 8 years now and I haven’t looked back for a second.
No more idiotic, pointless meetings where 8 managers argue over who gets the resources of one hands-on person to get some actual work done.
No more bogus deadlines, team building exercises, mission statements, core competencies, product evangelism, stakeholders, paradigm shifts and ‘bottom line at the end of the day’ rhetoric.
I’m so done with that. Once retired you have much more time and inclination to nurture both your mental and physical health.
If you’ve invested wisely you also have the resources to live comfortably as you go about reinventing yourself in your second, wiser life.
_____________________________________________
Glad to hear Mr. Obvious, you are one of the lucky ones. I have seen way too many friends retire, then @#% drop dead only months to year after the golden handshake. Tougher for me as I own my company with 90 employees. Just last year convinced son number two to take over the company if he wanted, otherwise I was going to float it on the market. He gave up his career at a great company to take over. I officially am now his employee. Now I am decompressing slowly over the next two years. Hope to do more sailing in the Caribbean. Wife has been down there in the Bahamas looking for a town home or condo to rent for a few years to try out. Would love to have a warm water port 24/7/365.

#201 Smoking Man's Old Man on 03.23.15 at 4:23 pm

#194 Mister Obvious

My sentiments exactly.

Retired at 40, divorced shortly after that, end of the drama that people in this society seemed to be so addicted to.

Daily activities include reading, exercise, including a one hour hard bike ride, and a nice retired flight attendant for company 2 or 3 times a week (that is OK with her as well.)

Just shake my head at the striving and nonsense of the majority of the population.

Glad you found the secret to a life worth living.

#202 meslippery on 03.23.15 at 4:27 pm

Lobster man, Sean thanks.
BernieBee, I would run gas clothes dryer, stove and oven range. No need for 240 volt.
No name,
Small natural gas inverter generator.

(Inverter generators are a relatively recent development, made possible by advanced electronic circuitry and high-tech magnets. These are generally 3-phase generators that output AC current like most traditional generators, but that current is then converted to DC, and then “inverted” back to clean AC power that maintains a single phase, pure sine wave at the required voltage and frequency.)

#203 Mark on 03.23.15 at 4:49 pm

“Actually 15 years ago an undergraduate degree in commerce or engineering (from a good school) was basically a ticket to a job.”

Absolutely. Then the tech wreck started in 2001, and hoardes were laid off. When the 2002-2003 recession finally was over, most of the new hires were not of domestic grads, but rather, their work was outsourced aggressively or foreign workers were brought in to do it. Tons of grads from that era, and even more recently, still unemployed or underemployed. The OSPE tells us that 2/3rds of Canada’s engineering talent today is underemployed or unemployed which is an absolute travesty.

I recall, in the tech boom era, technology firms were so in need of people that they were willing to hire “out of discipline”. For instance, civil engineering grads, were hired for limited coding and project management tasks. The oilsands, in comparison, has demanded quite a few engineers, but not really the type of engineers who were trained for the technology sector of the late 1990s. Most employers weren’t very interested in transferrable skillsets either.

#204 Leo Trollstoy on 03.23.15 at 5:08 pm

#194 Mister Obvious on 03.23.15 at 3:42 pm

Amen.

#205 betamax on 03.23.15 at 5:22 pm

#137 NoOneOfConsequence: “I couldn’t leave the small town I grew up in fast enough…the mill and the last department store closed and the doctor left town”

You’re extrapolating from your own limited experience. No one is advocating moving to a dying mill town that wasn’t much even its heyday. There are plenty of small cities in Canada with ample amenities, culture, etc. and housing prices at a fraction of Vancouver/Toronto.

#206 omg the original on 03.23.15 at 5:28 pm

According to this, the bra is already mandatory. I read this and I would never sign one, unless I was the agent of course.

No, it is not mandatory. And never sign one unless you have altered it to cover only one property you are offering on. — Garth
————————–

And if a RE agent refuses to limit your BRA to the one property you are interested in, get the name of the seller, call them and let them know there RE agent refused to take your offer.

#207 betamax on 03.23.15 at 5:43 pm

#203 Mark: ” “Actually 15 years ago an undergraduate degree in commerce or engineering (from a good school) was basically a ticket to a job.”

Absolutely. Then the tech wreck started in 2001…”

Tech has been booming again for years, so bringing up the bubble bursting in 2001 seems hardly relevant re. tech jobs today.

Aside from outsourcing, yadda yadda, the truth is that most people who go to university, particularly in ‘practical’ disciplines like commerce, engineering, comp sci, etc. do not enroll because they are passionate about their chosen field but merely because they see it as a fast track to a paycheque.

If 2/3 of engineering grad are un/underemployed, it’s because no one wants to hire the bottom 2/3 of grads. They’re a bunch of drones who hopped on a perceived gravy train and now they’re astonished that they’re not snapped up after getting B’s for four years.

I’ve interviewed hundreds of people with graduate degrees, and most of them were awful. Talentless hacks with expectations of a six-figure income. When someone really good walked in the door after days of excruciating interviews, it was like a miracle.

I have no patience for empty stats about grads not getting hired. Most of them suck, pure and simple.

#208 JSS on 03.23.15 at 5:43 pm

#194 Mister Obvious on 03.23.15 at 3:42 pm

Thank you.

#209 aL Pacino on 03.23.15 at 5:52 pm

I fail to see any real connection between the photo and the article.
Do you have something against pot smokers?.

#210 kilby on 03.23.15 at 6:03 pm

ot this wrinkly. I was just about dead before I retired at 56. After retiring, I came alive again. It been 8 years now and I haven’t looked back for a second.
No more idiotic, pointless meetings where 8 managers argue over who gets the resources of one hands-on person to get some actual work done.

I’m 64, retired for 4 years and couldn’t agree more, well said! And it is true that ones days seem to be so busy that one wonders how all the work was done while at a job. All this being said, we have a house, big yard, gardens, kayaks, bicycles, motorcycle and a ‘hobby” car.

#211 AfterTheHouseSold on 03.23.15 at 6:12 pm

#194 Mister Obvious
“After retiring, I came alive again.”

Well said, I couldn’t agree more!

#212 Bybgardener on 03.23.15 at 6:21 pm

205 Betamax
#137 NoOneOfConsequence: “I couldn’t leave the small town I grew up in fast enough…the mill and the last department store closed and the doctor left town”

You’re extrapolating from your own limited experience. No one is advocating moving to a dying mill town that wasn’t much even its heyday. There are plenty of small cities in Canada with ample amenities, culture, etc. and housing prices at a fraction of Vancouver/Toronto.
………
Please name some of these small cities in B.C.

#213 Daisy Mae on 03.23.15 at 8:44 pm

#191: “I know of an elderly Women in the states, she took out a reverse mortgage with her husband. Since they could get a bigger loan with just her husband, they took her off the deed…”

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

And the logic behind this would be….WHAT?

#214 betamax on 03.23.15 at 8:53 pm

#212 Bybgardener: “Please name some of these small cities in B.C.”

Off the top of my head: Victoria, Kelowna, Nelson. Perhaps Courtney and Parksville also.

Argue if you like, but I wrote “plenty of small cities in Canada” – not just BC.

I live in Vancouver because my job requires it, but I could happily live in a smaller town (and have done so). Especially now, as I stay connected and likely experience more ‘culture’ via the internet than in person. Once in a while I’ll see a play or opera, but I could just as easily travel to Van, Toronto or NY with the money saved living elsewhere.

#215 Nemesis on 03.23.15 at 10:02 pm

#@BetaMax… #NelsonÉ… #DefinitelyWorthALookSee…

https://youtu.be/Fo6aKnRnBxM

#216 Financial Planner Dude on 03.24.15 at 3:53 am

Did they not apply for OAS? That would bump them up to 2 grand a month, still not a lot!