Horny no more

BOAT COFFIN modified copy

“I was a bit house-horny before finding Greater Fool,” Christina admits, “but that has definitely changed. My husband and I are so thankful we found it.”

See? Some people are actually happy they come here, unlike the nimrods who want me to promote gold, trash the Chinese, praise Norway, pity the Americans, stroke realtors, forgive Kia and Costco, or pretend that Dippers are not evil. The world needs more Christinas, as naïve as she may be.

“I am wondering if you could give us some advice about where to park our money,” she says. “Also, I contacted an independent financial advisor – would you recommend one? Do I need someone like this?

“We’re both 31, debt free and are both self-employed.  I have RRSP mutual fund with $12,000 in it; a TFSA mutual fund with $17,000; and together we have $11,000 in Tangerine account for emergencies Our financial goals right now include: in 1-2 years, subsidizing a mat leave for me (having 6 months of living costs saved); replacing my husband’s car; and putting money away for retirement. Can you help?”

Of course. Personalized financial service is included in the hefty annual fee you pay to read this pathetic blog.

First, explain this house-horny thing to me. Your total assets amount to just forty thousand bucks, so unless you live in Timmins or god-forsaken Lillooet how would you propose buying a house, financing closing costs and have any money left? Just because you can score a five-year mortgage for 2.4% doesn’t mean you should. House prices are historically high while the economy is fading fast, imbuing real estate with risk. Glad you’re taking a pass.

Where to put your money? Not in mutual funds, for a start. The MERs (management expense ratios) are likely far higher than equivalent ETFs, or exchange-traded funds because you’re paying some manager you’ll never meet to try and beat the market. It rarely happens. So just buy an index using an ETF. I’ve given sample portfolios here in the past, so look ’em up. Sixty per cent growth and 40% safe stuff is a good mix, with two-thirds of the equity funds being US and international. Go light on maple.

You can’t do this at the bank, Chris. So open a discount brokerage account, transfer your funds over and make the changes. Also, why do you have $11,000 in a silly savings account with the fruit people instead of invested in growth assets inside a TFSA? Not only are you earning peanuts, but it’s all taxable. Bad idea.

If you want money for an emergency, go to the bank and arrange a line of credit. The interest rate isn’t really relevant, since you’ll only draw on this in the event of a calamitous event – then quickly pay it off from savings. LOCs cost nothing to set up or keep in place, letting you access thousands of dollars just by writing a cheque. Every person with a pulse should have one.

Your financial goals are modest, now that Greater Fool has fixed you. Regarding the potential mat leave in a couple of years, don’t hoard money in a savings account but rather chunk it into your RRSP, reinvest the tax refund in your TFSA, and put it into those large-cap ETFs. When you take time off you’ll be in a lower tax bracket and can collapse your plan. Take it out in hunks of $5,000 or less to minimize the withholding tax.

And if you can wait three years to have a kid, have your husband open a spousal plan now and contribute to it. He enjoys the deduction, but after three years the money is yours, presumably taxed at a rock-bottom rate. The car? It’s the last thing you should raid your accounts to purchase. Cars depreciate. They’re tools, not investments. Lease one or take advantage of existing cheapo dealer financing. Never, ever pay with cash which you could grow.

Finally, retirement is a long way off, so it’s cool you’re thinking about it 30 years in advance. If you started with $23,000 in your combined TFSAs today and maxed them for thirty years ($1,600 a month – learn to live on KD), investing in a portfolio giving 7%, by 61 you’d have $2.2 million, with $1.6 million in pure, untaxed growth. That would provide an annual income of $150,000, also tax-free – still allowing you to collect full government pension benefits.

Yes, rich. Millionaires.

Or, you can buy a house, ending up with no cash, a mortgage and babies. Tough choice.

200 comments ↓

#1 Steerage Bilge on 08.17.15 at 5:42 pm

Raw meat for the steerage section…

“unlike the nimrods who want me to promote gold, trash the Chinese, praise Norway, pity the Americans, stroke realtors, forgive Kia and Costco, or pretend that Dippers are not evil”

#2 TurnerNation on 08.17.15 at 5:47 pm

Typical Toronto Sun newspaper headline around election time, double bylined:

Seagull defecates on WWII war memorial.
– Veterans group express outrage.
– Local police to probe possible IS inspiration.

#3 Danforth on 08.17.15 at 5:57 pm

“Orange Guy’s Shorts” has been replaced by “the fruit people”.

Good one!!

(…and despite all the ING Direct / Tangerine bashing that goes on here, I keep a wee stash in there to float me through incidentals, and keep my chequing account at just above zero. It *is* better than keeping a few K in a regular bank, by a few bucks interest a year)

#4 MEANWHILE IN FRANCE on 08.17.15 at 6:01 pm

You are right, why keep this Blog empty of any and all money making options? I could be your agent!
Let’s get some ads on here, links to strip clubs in Vegas and so on.

#5 VoteABC on 08.17.15 at 6:01 pm

Garth, you say LOC’s cost nothing to set up, everyone should have one. I agree, they’re good to have.

I was looking at a HELOC, and [email protected] told me there is a $485 fee to set it up. This is due to some legal stuff given that its against title on the house. Does this fee sound normal?

Shop around. — Garth

#6 Ride the Dip on 08.17.15 at 6:06 pm

“Lease one or take advantage of existing cheapo dealer financing. Never, ever pay with cash which you could grow.”

You can’t be serious. You’d have to be insane to recommend leasing a vehicle. And were supposed to take your criticism of the NDP seriously?

I said lease or dealer-finance – whichever is the better deal. Rent what depreciates. Buy what appreciates. — Garth

#7 Pamela Velos on 08.17.15 at 6:08 pm

Disagree about the line of credit. Any Self employed person needs at least 3 preferably 6 months of income available as cash because if they become disabled, or their business isn’t doing well they need to pay the rent and put food on the table without going into debt

A LOC is cash. — Garth

#8 new aristocrary on 08.17.15 at 6:12 pm

They used to throw ashes into the sea…

Is this some new fancy way how wealthy boomers leave these days, sheltering their TFSA from sudden dips?

#9 Rapier Wit on 08.17.15 at 6:15 pm

The 3rd paragraph from the end is truly inspired – I’m copying it my kids. Really nicely done.

#10 BobC on 08.17.15 at 6:18 pm

I cringe when Garth mentions those that have a fear of loss that’s greater then the desire for gain. I’m guilty. I’m getting old.
Using round numbers let’s say you have $100,000 invested perfectly in a balanced portfolio of 6 investments.
Everywhere, I mean everywhere, I read about the coming correction in the markets. How it’s way past due and how a 10% to 15% correction is even healthy. They all seem to agree it’s coming this fall.
It costs what? $10 bucks to sell and $10 bucks to buy back? I know trying to time the markets is for losers but give me a minute.
Let’s say you sell those 6 investments for a cost of $60 bucks. You stay cash for 4 months. It costs $60 bucks to sell and $60 bucks to buy them back 4 months from now. Also if wrong, you lose .33% of the possible 7% gain on the investment or about $2400. That’s a $2500 loss due to unfounded fear.
But if your right and there’s a 15% correction your loss is $15,000 bucks! I know, I know, you should believe in the balanced portfolio and take it like a man. It will come back in a year or so.
I also understand you can’t time the market.
I read both sides. The doom and gloom side that says stocks and real estate is going down and the ones that believe stocks and real estate will always go up.
But when you compare $2500 to $15,000 when does common sense come into play? When does a sense of fear become your friend?

If your portfolio went down 15%, why would you sell and create a loss that did not physically exist prior to the sale? Amateur mistake. Just invest properly and stay invested. Unless you need a specific amount of money on a certain day, fluctuations are largely irrelevant. They certainly were in 2008. — Garth

#11 LH on 08.17.15 at 6:27 pm

Babies are the best. I have four of them. Don’t mind that each one is going to cost a million to educate. Freedom is great but a bit empty without a legacy.

There are seven billion people in the world. In my lifetime, human population has doubled. — Garth

#12 Suede on 08.17.15 at 6:32 pm

I read this blog to learn new words like “imbuing”

It makes me sound smarter when I talk to other big shots and need to impress them with my 3rd rate education and first class bs skills.

#13 Danforth on 08.17.15 at 6:38 pm

#10 BobC on 08.17.15 at 6:18 pm

History’s lesson here is to *stay invested*. Stay the course.
Remember that Time In the market is more important than Timing the market.

#14 j0n on 08.17.15 at 6:42 pm

If I transfer 20k from my RRSP into my wife’s RRSP tomorrow, can she pull it out in 3 years to the date (Aug 18 2018), or 3 years + EoY (Jan 1, 2019)?

Makes a difference here as she’ll be in school until June 2018 with significantly lower income that fiscal year as opposed to the following.

You cannot transfer between the RRSPs of separate individuals. — Garth

#15 Ray Skunk on 08.17.15 at 6:44 pm

Hey, the fruit people have their place.

Currently on a 3% interest promo for the next couple of months, so have 5% of my portfolio sitting in there as cash. If/when we get a correction I can have it over to my advisor next day so we can go shopping.

The free chequing account ain’t bad either. Annoying about the lack of wire, but hey ho.

Don’t get suckered in to crappy GICs and the like and everything is golden.

#16 On to The Great Campground in the Sky on 08.17.15 at 6:49 pm

It looks like someone wants all their toys in the afterlife too, just the Pharaohs.

(I don’t see any truck balls dangling)

#17 Steve in B.C on 08.17.15 at 6:52 pm

I sold it! Finally, after three years of trying. How’s that for liquidity? Offloaded the time and money sucking pile of lumber to some greater fools. I am so glad to be homeless.
TFSA’s are maxed with Garth stuff, bank accounts are full. Working on what best to invest it in. That is a bit of a chore but will figure it out.
No debt, no kids, no job, and lotsa time to play with my toys. Doesn’t get much better than that.
We rent a tidy house in the Fraser Valley with a huge workshop and a garden for 1200/month. Can’t buy it for that and why would you want to?
Educate yourself, read Garth every day.

#18 Retired Boomer - WI on 08.17.15 at 6:52 pm

Sound Advice, but that’s what we seasoned readers expect from this pathetic blog’s voice of reason.

Best to find these nuggets of wisdom than do the herd expectations which have not produced much these last few years. Sure, that house you bought three years ago might have gone up in value, but the carry and taxes have diddled any gain. That TAX FREE stuff in your portfolio that has done well has it not?
Didn’t start then too bad for you, funky.
As for the Geezer here, not to much to sweat here in the land of water, corn,beer, and cows.
If oil would recover a bit, sand might start moving again. It’s only a matter of time, and we know that already! Summer doldrums here in flyover country. The dividends are being paid. (sigh)

#19 mitzerboy aka queencity kid on 08.17.15 at 6:53 pm

great pic garth

and horny no more how true
after u cross the rainbow bridge

#20 name dropping on 08.17.15 at 7:00 pm

Let’s drop some current sexy ETF names/tickers to Christina.

#21 Frank on 08.17.15 at 7:03 pm

Personalized financial service is included in the hefty annual fee you pay to read this pathetic blog.

I lol’d. And yet Garth writes it every day. He’s as messed up as the lot of us.

#22 Smoking Man on 08.17.15 at 7:07 pm

Lots of rich millennial. And lots soon to be.

The ones that understand the degree means nothing if you trade time for wages. Even a Dr is a bitch. We don’t work he don’t get paid.

The ones that make it, trade things. Not time. And they hire fools to do the grunt work.

Happy Capitalism.

#23 Bytor the Snow Dog on 08.17.15 at 7:08 pm

Live on KD for 30 years to save $1600 a month? Seriously Garth, there has to be balance.

Living for tomorrow is great, but keep in mind not everybody gets there.

#24 Why care about the witholding tax? on 08.17.15 at 7:09 pm

– “Take it out in hunks of $5,000 or less to minimize the withholding tax”

Why? If it was not or only partly due in the final income calculation on your tax returns, you will get a refund check in the mail six months later. For instance, if husband and wife were to have no income at all in a particular year, it would be foolish for both of them to not take out a total of around 21kCAD from their RRSPs before december 26th of that year; in their tax returns come next april they can claim back the full tax amount that was withheld. Correct, right Garth?

#25 saskatoon on 08.17.15 at 7:14 pm

garth,

wouldn’t it be better to get the cheapo loan from a bank, rather than a dealer?

What bank offers 0.9%? — Garth

#26 peace of mind - pay cash on 08.17.15 at 7:16 pm

I disagree with you about the pay cash for a car.
If you have cash to pay for the car,
Yes, you could take out, e.g. a 4% or more loan and invest the rest hoping to make 7%.

Factor in taxes, and downpayment… and the actual dollar difference is so little for the risk taken (at this point in time – e.g. expected correction in the near future).

Just paying it off gives you a sense of calmness – no extra bills and invoices to pay, no need for record keeping and filing, etc.

Plus, paying in full lets you appreciate the true cost… oh, this is going to cost me $30K. versus $349/month…

#27 That other guy on 08.17.15 at 7:20 pm

The problem BobC is after 6 months the market gains 5% you buy back in and miss out n a 5% gain.

Then the market decides to correct by 15% so you’re actually out 20%.

The efficient market hypothesis is a decent approximation for the average (and vast majority) of investors.

Buy, hold, rebalance -> prosper. That’s all that really works.

#28 Dave in Kincardine on 08.17.15 at 7:20 pm

How secure are their jobs (one determinate of risk)
What is their health like (different time horizons of money)
Can they handle investments going down (loser syndrome).
Are they Canadian.
What is their past experience with money.
Are they savers vs spenders.
Do they live in an expensive city or rural.
What is there ideal retirement
How much of their children’s education do they want to fund.
How many children
Drive much. Cars are a huge drain on income.
Are they handyman or do they get someone else to fix it.
Do they have government pension vs a private if any.

Just a few questions a good adviser will ask.

#29 Lana Faessler on 08.17.15 at 7:26 pm

Garth…I just wanted to express my gratitude for the free advice you offer, when you don’t have to. Because of you, I sold my house, invested the profits (through a reliable financial advisor), and now rent. As a single grandmother raising a teenager, and working full-time, it was the smartest move to make. I lease my vehicle…free road-side service, planned maintenance and because it is fairly new, no surprise car repairs.

I also appreciate your sense of humour. I have purchased and read all of your books, and would listen to you ahead of just about anyone else I can think of. Thanks again.

#30 matt on 08.17.15 at 7:26 pm

Finally…. some real people with real #’s…

#31 Linda on 08.17.15 at 7:31 pm

Garth, good advice to Christina except the ‘learn to live on KD’. Better by far to learn to cook – you can eat like the wealthy while paying peanuts. Plus you’ll know if you do the from scratch cooking just what it is you are eating. Pay the premium to buy certified organic produce or even – gasp – grow your own. Lots of community gardens about & even a half barrel on the balcony of your rental can yield more veggies than two people can eat during the summer months. Good food usually goes hand in hand with good health. You don’t have to be super chef with magic knife skills to cook, either. Basic stuff can be mastered by anyone & you don’t have to spend hours doing it either.

#32 LH on 08.17.15 at 7:32 pm

Re:

There are seven billion people in the world. In my lifetime, human population has doubled. — Garth

Malthus was wrong. Human ingenuity and this blessed planet can easily provide for many tens of billions more. Thanks to folks like Freedom First most developed countries (and many developing countries too) are failing to replace their population (fertility < 2.1). For the sake of your pensions, somebody needs to make more kids. Now if I could somehow convince my wife to go for #5…

#33 Love my Kia on 08.17.15 at 7:32 pm

#24 Saskatoon,
wouldn’t it be better to get the cheapo loan from a bank, rather than a dealer?
————————————–
You just gave yourself away as an idealist high schooler (funded by public monies). lol

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

I said lease or dealer-finance – whichever is the better deal. Rent what depreciates. Buy what appreciates. — Garth
————————————-
Got my KIA 72/.9

I love my KIA because I would rather put $ into investments than a whole lot more into something that depreciates. 28 grand including tax for a decently equipped Sorento that still has no recalls on it. If I had all the $ in the world, a Mercedes, but I’m working on it.

#34 Internal Auditor on 08.17.15 at 7:34 pm

We leased our car after tryig to buy used. Payments are very reasonable on our 3 series and insurance is actually much lower on these types of cars. Got a demo model with only 1,100km’s and had 90% of the warranty left.

Also seen our portfolio hold up and even eek out some gains over the past ~2 months. Finding the thin line between buying on the low (XGD for example) and staying the course (SHY, ZWU) has been a great way to evaluate risk appetite.

We used the LOC because at these low rates it makes little sense to not use some of your cash to buy equities and bonds. It’s about balance, in all things.

Great post Garth.

#35 Nagraj on 08.17.15 at 7:36 pm

Oh brother.
Another “Dear Mr. Garth Landers” post. Ick.
(And there’s not even any unzipped cabana boys in this one like there was in the answer to the letter from that hot little Dr. Louise.) (This “Christiana” is all mom&apple pie. White bread-ish.) (I bet her philosopher king husband never came up with “coxbox” in a scrabble game.) Oh well. (Prolly a hacky fan.)

BUT BUT BUT the (slightly distasteful) photo does pose a fascinating question: WHO IS IN THE COFFIN?
[Don’t look like the trashy Cons who brought it to the cemetery woulda paid for it, they woulda gone the cheap (cardboard) urn route,]

And where’s the priest and mourners, pray tell? Like is the coffin arriving too early or way too late for the service?
You know what? I suspect there IS NO BODY in that coffin . . . just bags and bags and bags of gold Maple Leaf coins . . .

” – and the evening comes, and the busy world is hushed, and the fever of life is over.”

#36 Smoking Man on 08.17.15 at 7:40 pm

#11 LH on 08.17.15 at 6:27 pm
Babies are the best. I have four of them. Don’t mind that each one is going to cost a million to educate. Freedom is great but a bit empty without a legacy.
……..

I know your line of business, love your cockeness. Refreshing, tired of all the commies on here. Don’t share the secret sauce with IT people. Especially if they smoke..

They can make you redundant over night.

#37 Ponzius Pilatus on 08.17.15 at 7:40 pm

#227 Cramar

I love Dr. Thomas Stanley’s book Stop Acting Rich — And Start Living Like a Real Millionaire. People that want to appear rich drive new and expensive cars that are financed. He found the average millionaire drives a Toyota or Ford that is several years old.
———
Where’s the fun in that?
Driving an old beater when you can afford ten Ferraris.
Maybe, the rich get their kicks from diving into their gold coin pools, like Scrooge McDuck did.
But I don’t think our host would approve of this.

#38 Chaddywack on 08.17.15 at 7:40 pm

Hey don’t knock Lillooet the housing there is HOT HOT HOT……literally!

#39 My Life is a Pile of Shit on 08.17.15 at 7:41 pm

“LOCs cost nothing to set up or keep in place, letting you access thousands of dollars just by writing a cheque. Every person with a pulse should have one.”

LOC? That’s what savings are for! The biggest problem with LOC is that you have to pay interest, and even worse, pay back the principal eventually! Even HELOC isn’t exactly cheap, and unsecured LOC is expensive. [email protected] tells me to use HELOC to turn my home into an ATM, and Garth backs that by saying LOC = cash! Who am I to argue? I guess the only thing better than one’s own cash is someone else’s! Thank god I came here for that wisdom and enlightenment!

I said a LOC is an emergency-savings alternative. Why would you pay interest on money you do not utilize? — Garth

#40 Josh in Calgary on 08.17.15 at 7:49 pm

Garth,
Time to raise your game when it comes to car buying advice. Leasing is almost ALWAYS more expensive and comes with milage restrictions. Then you’re at the mercy of the car dealer at trade in time. They adjust their buy back price if it’s excessively worn. They are great for businesses who have to maintain fleets, and for people who fear selling a used car, but other than that financing is better. BUT the “cheap-o” rates that the dealer offers aren’t cheap, they’re a shell game. They will typically offer 5 to 10% off the minute you tell them you’re paying cash (really close to the value gained by accepting their cheap-o rates). So you buy the car in “cash” and open up that line of credit at the bank so you can keep your investments. That way you are borrowing to invest and can write off the interest against gains.

Better yet you can go get that 2 to 4 year old used car with low miles (where no cheap-o rates are available) for a great deal, rather than buying brand new and seeing 25% go poof the second you drive it off the lot.

#41 mark on 08.17.15 at 7:55 pm

If you lived on KD there’s no point saving or investing cause you won’t make it to 61.

#42 JimH on 08.17.15 at 8:02 pm

#32 LH on 08.17.15 at 7:32 pm
Re: There are seven billion people in the world. In my lifetime, human population has doubled. — Garth

You write, “Malthus was wrong. Human ingenuity and this blessed planet can easily provide for many tens of billions more. Thanks to folks like Freedom First most developed countries (and many developing countries too) are failing to replace their population (fertility < 2.1). For the sake of your pensions, somebody needs to make more kids. Now if I could somehow convince my wife to go for #5…"
================================
Forget about it! You'll never convince her to 'go for #5'.

Obviously, she's about 10x smarter than you are!

#43 Freedom First on 08.17.15 at 8:04 pm

#1 LH

……………………………………………………………………………….

There are seven billion people in the world. In my lifetime, human population has doubled. – Garth.

Great reply by our Sage.

It is a wonder that there is so many intelligent people in the world, and yet, as a species, human beings are insane.

I am so grateful for the Freedom First lifestyle I have achieved and enjoyed for decades, and for the fact I have decades of life to look forward to with such a happy attitude. Slavery to anything was never an option.

#44 Smoking Man on 08.17.15 at 8:04 pm

http://m.viralands.com/aliens-abduction-paintings
…..

This poor bastard was abducted, now painting images.
What he don’t realize is the eyes are shades. Worn by bald big headed Nectonites.

Boones you listing… Much bigger Markets…

#45 Balmuto on 08.17.15 at 8:10 pm

LOCs are not cash, but they sure do feel like cash when you’re itching to buy things you can’t afford. If you can be disciplined to never use it except for emergencies, great. Most people can’t resist the temptation. Of course, if you are carrying a credit card balance that you can’t pay off right away, by all means transfer the balance to a line of credit. That’s a no-brainer. Otherwise, keep your LOC balance at zero. If you can’t do that, you have a spending problem. Like most Canadians.

#46 Timing is Everything on 08.17.15 at 8:12 pm

#23 Bytor the Snow Dog – Living for tomorrow is great, but keep in mind not everybody gets there.

https://vimeo.com/21037121

#47 JimH on 08.17.15 at 8:19 pm

Annie was in the Scottish fertilized egg business.
She had several hundred young ‘pullets’ and ten roosters to fertilize the eggs.
She kept records, and any rooster not performing went into the soup pot and was replaced. This took a lot of time, so she bought some tiny bells and attached them to her roosters. Each bell had a different tone, so she could tell from a distance, which rooster was performing. Now, she could sit on the back door step and fill out an efficiency report by just listening to the bells.
Annie’s favorite rooster, old Butch, was a very fine specimen, but this morning she noticed old Butch’s bell hadn’t rung at all!
When she went to investigate, she saw the other roosters were busy chasing pullets, bells-a-ringing, but the pullets, hearing the roosters coming, would run for cover.
To Annie’s amazement, old Butch had his bell in his beak, so it couldn’t ring. He’d sneak up on a pullet, do his job and walk on to the next one.
Annie was so proud of old Butch, she entered him in the “Glasgow Farm Show” and he became an overnight sensation among the judges.
The result was the judges not only awarded old Butch the “No Bell Piece Prize,” but they also awarded him the “Pulletsurprise” as well.
Clearly old Butch was a politician in the making. Who else but a politician could figure out how to win two of the most coveted awards on our planet by being the best at sneaking up on the unsuspecting populace and screwing them when they weren’t paying attention.
Vote carefully in the next election, you can’t always hear the bells.

#48 Interstellar Old Yeller on 08.17.15 at 8:25 pm

#32 LH on 08.17.15 at 7:32 pm

Dude. She’s had four kids already. Give her a medal and a killer pension!

#49 Leo Trollstoy on 08.17.15 at 8:25 pm

Babies are the best. I have four of them. Don’t mind that each one is going to cost a million to educate. Freedom is great but a bit empty without a legacy.

‘Legacy’ is a creation of the narcissistic ego. Completely overrated.

#50 omg the original on 08.17.15 at 8:27 pm

Victoria Real Estate Update on 08.16.15 at 10:02 pm
# 121 omg the original

Major housing bubbles don’t correct in a slow, grinding manner as you suggest will happen in Canada. Are you a realtor?

Wolf Richter (Wall Street) knows a thing or two about housing bubbles. Quoting:

“Bubbles don’t land softly. They implode. It’s a brutal process. The longer bubbles are maintained, the more brutal their implosion.”
———————–

Calling ME a REALTOR??? – no need to get NASTY.

I have been posting on the comment section this same theme of slow/grinding correction since 2009.

Let us both agree that Victoria’s housing market is grossly overvalued.

You of all people should recognize that in the Canadian environment the slow and grinding is what will likely happen. You’ve been reporting on the start of it here in Victoria for the past few years with your updates.

Now for Wolf Richer’s opinion on the rapidity of housing corrections which he does not back up with any data – it fits in the category of pure blogger opinion. If I had $5 for every financial blogger’s opinion that turned out to be wrong I would be a rich guy.

Consider the last major housing correction to hit Canada – it was in Ontario in the 1990s. From the early 1990s to the late 1990s the average price of housing in Toronto dropped 27% in nominal terms and almost 50% in INFLATION adjusted terms.

The correction in areas like London and Windsor went on for another 10 years – some towns in that area have seen inflation adjusted prices drop 60% from 1990 to 2010.

It all looks pretty slow and grinding to me.

Consider the correction now going on it Calgary – its almost non-existent. Prices down by a measly few percentage points in a market that is up 100% in the past 8 years. Any meaningful correction there will require time for thing to unravel – it hasn’t and won’t happen overnight.

Again as I have been saying for years now – the correction will be slow and grinding and mainly in terms of losing ground to inflation. And it will likely shave about 60% off the real value of housing in today “hot” markets like YVR, YYJ and TO.

#51 Interstellar Old Yeller on 08.17.15 at 8:27 pm

#47 JimH on 08.17.15 at 8:19 pm

That… Was GREAT!

#52 Bruce MacLean on 08.17.15 at 8:33 pm

ROTFLMAO
Guess he’s been reading this pathetic blog. Maybe he’ll offer you a job in the new Government.
http://www.huffingtonpost.ca/2015/08/17/tom-mulcair-housing-canada-terrible-surprise_n_7999130.html

#53 LH on 08.17.15 at 8:54 pm

#36 Smoking Man

When it comes to my little corner of the market I’m the biggest Luddite ever. I don’t even open any of the many electric trading screens.

LH
……..

I know your line of business, love your cockeness. Refreshing, tired of all the commies on here. Don’t share the secret sauce with IT people. Especially if they smoke..

They can make you redundant over night.

#54 MSM-Free Zone on 08.17.15 at 8:54 pm

Still trying to figure out the whole ‘Costco’ thing.

There’s got to be a story in there somewhere.

#55 bigtown on 08.17.15 at 8:57 pm

The only grocery store in Sonoma Heights subdivision is gone. This little hamlet of high end homes just south of Kleinberg has shuttered the old METRO store and in this pristine hood and spic and span strip mall…a ghostly vacancy portends less disposable income.

Folks in that far reaching area of Vaughan will need to drive a few clicks for food. Vaughan was the wild west of Toronto North so the city planning sort of reverted to a casebook study of some perfect suburb of the states not the cold tundra of Canada.

We are fortunate that Ontario is large enough to repair and transform big government’s well-meaning errors.

#56 gut check on 08.17.15 at 9:00 pm

I’ve just seen google’s humanoid robot and suddenly nothing else matters.

#57 Diversified in Oakville on 08.17.15 at 9:01 pm

Couldn’t agree more about how to buy a car!
Last year the dealer offered me 0.0% on a 3 year purchase. No hidden fee’s, a true 0%. Took the money and invested in diversified ETF’s. Interest free for 36 months.

#58 IHCTD9 on 08.17.15 at 9:11 pm

You’re all wrong about car buying. Get one 2-3 years old with 100k or less on the clock, it’ll be half or less than the cost of new. Cars these days can go about 350K before a major repair crops up. Use the Internet to learn how to replace the brakes and wheel bearings that you will eat up en-route to 350K, they are an easy job on many vehicles, and you can get parts on the net for peanuts.

By the time you hit 350K, 12-13 years will have passed by, if not more. You will have driven over a decade for less than 65.00 a month, including the cost of the car, and all the regular maintenance. Part out the old girl, and send her off to auto-Valhalla with a smile as she didn’t owe you a dime. Repeat.

If you buy parts on the Internet and fix your own brakes, in 12-13 years you will be a fatality. — Garth

#59 Joseph R. on 08.17.15 at 9:19 pm

“I said a LOC is an emergency-savings alternative. Why would you pay interest on money you do not utilize? — Garth”

One problem I can see with that advise is that the bank can cancel your credit if they believe you can’t repay it: Loss of job, serious illness, …

Then cash in some ETFs and hug the money. Sheesh. — Garth

#60 Steerage bilge on 08.17.15 at 9:21 pm

If you buy parts on the Internet and fix your own brakes, in 12-13 years you will be a fatality. — Garth
——–
Ridiculous. Not true at all.

#61 young & foolish on 08.17.15 at 9:29 pm

Being rich, and living rich are two different things ……

#62 Smoking Man on 08.17.15 at 9:29 pm

#53 LH on 08.17.15 at 8:54 pm
#36 Smoking Man

When it comes to my little corner of the market I’m the biggest Luddite ever. I don’t even open any of the many electric trading screens.

LH
……..

I know your line of business, love your cockeness. Refreshing, tired of all the commies on here. Don’t share the secret sauce with IT people. Especially if they smoke..

They can make you redundant over night.
……

Lesson 1 millennials, LH makes a shit load of loot… I emphasize the word Trade…

Nor job.

I would never use the word Luddite in my book. Using 10 dollar words wears down the reader.

I would go with. “For no good reason the man with the glass eye they took a sledge hammer to the computer.”

Increase your word count, and keeps the story fluid.

#63 omg the original on 08.17.15 at 9:30 pm

WHY WE WILL NEVER SEE A HOUSING CORRECTION LIKE THE USA DEBACLE

Oh, mark my words, the housing market will correct in Canada and correct big time – maybe 60 to 70% in inflation adjusted terms in YVR and TO. BUT IT WILL BE SLOW AND GRINDING not sudden and sharp like in the USA.

Let me tell you why…….

The biggest reason behind the 2008/09 US housing correction was the financial armageddon that was caused by mortgage back securities – which just about brought the entire world economy to the brink.

It was not just that people were losing their houses, BUT that almost all major world financial institutions were on the brink of default. Sure people in the US were worried about their houses, BUT more than that they were worried about whether the world economy would collapse sending us into a 1930s style Great Depression.

A housing correction in Canada, a minor pimple on the butt of the global economy, will have no impact on the world finances. It will be a made in Canada problem – Canadians will be worried, but will not be reduced to the level of stocking up on canned tuna and dehydrated foods.

The second biggest reason we are immune to a US style housing meltdown is that governments and banks in Canada have significant policy tools at hand to combat any signs of weakness. We could see a return to longer term amortizations and interest only payments. Banks in Canada are healthy enough to negotiate new payment schedules with in-trouble home owners – the added cost to banks – they can just jack up fees (note to myself buy more CDN banks).

Thirdly we still have a lot of fat in the system. Many of the Millennials with massive mortgages also have $180/m cable/internet packages, $150/m cell phone plans, two Subarus in the driveway, twice a week eating out habits and parents with nice fat inheritances. Lots of fat there to cut before things get serious.

So settle in for a 10 to 20 year ride down.

#64 Josh in Calgary on 08.17.15 at 9:38 pm

With regards to having a LOC in case of emergency as opposed to carrying 6 months of cash in a savings account. Garth is saying that rather than having your cash in a savings account making SFA you can have it working for you at 5 to 7% in a balanced portfolio. If an emergency comes up you hit up the LOC for the immediate cash and then cash out the investments required to pay back the LOC before any serious interest accrues. Of course this assumes your portfolio is large enough to cover the debt should you be forced to cash in during an off market. I’ve had a LOC for over a decade and have yet to charge one single thing to it … but it’s there just in case.

#65 espressobob on 08.17.15 at 9:40 pm

#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.

#66 kommykim on 08.17.15 at 9:40 pm

RE: #20 name dropping on 08.17.15 at 7:00 pm
Let’s drop some current sexy ETF names/tickers to Christina.

ZLB, VXC & VSB

#67 Nora Lenderby on 08.17.15 at 9:45 pm

#56 gut check on 08.17.15 at 9:00 pm
I’ve just seen google’s humanoid robot and suddenly nothing else matters.

Yes, Google bought Boston Dynamics. Their animal-like robots are very interesting as well:

Spot

#68 kommykim on 08.17.15 at 9:45 pm

RE: #24 Why care about the witholding tax? on 08.17.15 at 7:09 pm
it would be foolish for both of them to not take out a total of around 21kCAD from their RRSPs before december 26th of that year; in their tax returns come next april they can claim back the full tax amount that was withheld. Correct, right Garth?

But like he said: Smaller hunks ( Less than 5K) means that you get more of your money sooner rather than waiting to do your taxes and getting the remainder the following year.

#69 omg the original on 08.17.15 at 9:45 pm

Why care about the witholding tax? on 08.17.15 at 7:09 pm
– “Take it out in hunks of $5,000 or less to minimize the withholding tax”

Why? If it was not or only partly due in the final income calculation on your tax returns, you will get a refund check in the mail six months later.
——————

Maybe somebody has answered this already…..

The reason you do $5000 withdrawals is that it only triggers a 10% withholding. For withdrawls over $5k its 20%, and over $15k its 30%.

And true its not gone money, it counts towards income taxes payable for the year so you may get some or all back depending on your total taxes payable.

But if you take $15k out in three $5K chunks CRA only gets $1500 upfront ($500 each withdrawal). If you take it all out at once CRA gets $5,000 upfront.

BUT do be aware that financial institutions may charge you a fee each time you make a withdrawal – so three withdrawals = 3 fees. At RBC its $50/withdrawl unless you have over a certain amount in RRSPs.

And finally be aware that RRSP withdrawal tax rates are different in Quebec.

#70 Scott the confused car guy on 08.17.15 at 9:59 pm

Ok. I love this blog but please explain to me why borrowing money for a car that drops in value like a rock is a good idea.
This couple should save up and pay cash for a $6000 car which will hold it’s value way better than A new one. They can upgrade the vehicle as their net worth grows. They are self employed meaning their jobs are probably a bit subject to volatility they don’t need a liability car lease/payment on the books hanging over their head.

Most importantly of all they are debt free…don’t trade that for anything!

#71 omg the original on 08.17.15 at 10:00 pm

BobC on 08.17.15 at 6:18 pm
I cringe when Garth mentions those that have a fear of loss that’s greater then the desire for gain. I’m guilty. I’m getting old.
Using round numbers let’s say you have $100,000 invested perfectly in a balanced portfolio of 6 investments.
Everywhere, I mean everywhere, I read about the coming correction in the markets. How it’s way past due and how a 10% to 15% correction is even healthy. They all seem to agree it’s coming this fall.
————————————-

Let me start off by saying ALL financial commentators are full of BS – numerous studies show that you could do better doing the opposite of what they say.

YOU are not a trader, YOU cannot time the market.

Stay in and do NOT EVEN THINK of SELLING.

The biggest problem with selling is…….

– if you are wrong and the market keeps going up you will miss out and be afraid to buy back in at the higher levels as things will seem set for that drop.

– if you are right and the market does drop, will you have the BALLS to buy back in when every WING-NUT CNBC has on is calling for a further drop of 30%. NOPE – YOU WILL NOT – and the market will start back up leaving you behind.

I know this because I have made both MISTAKES.

So since 2000 I just let it ride and watch the returns compound over the years.

#72 Forzudo on 08.17.15 at 10:01 pm

#55 Bigtown

You cold always walk/drive 300 metres south, and shop at Longos.

#73 The American on 08.17.15 at 10:09 pm

Although satyrical (and also one of my all-time favorite publications), The Onion presents a grand take on what indeed happened during the U.S. recession… Also guaranteed behavior coming to Canada in its recession.

http://www.theonion.com/video/onion-explains-rise-china-50855

http://www.theonion.com/article/nation-not-about-to-start-giving-a-shit-about-cana-34471

http://www.theonion.com/article/area-man-thinks-he-was-fired-because-of-recession-6608

http://www.theonion.com/graphic/how-are-we-preparing-for-a-recession-7541

http://www.theonion.com/americanvoices/us-loses-4000-jobs-15298

http://www.theonion.com/americanvoices/bernanke-says-recession-possible-15435

http://www.theonion.com/article/flight-attendant-quietly-informs-first-class-passe-35661

#74 45north on 08.17.15 at 10:10 pm

Liquidator takes ownership of Plasco assets for pennies on the dollar

http://ottawacitizen.com/news/local-news/liquidator-takes-ownership-of-plasco-assets-for-pennies-on-the-dollar

there never was a good explanation but there is this from the article:

But Plasco was unable to secure financing for its commercial plant by the end of 2014, missing its third and final deadline under the 20-year contract

so I’m guessing it didn’t get secure financing because it couldn’t convince investors that it really worked

#75 The American on 08.17.15 at 10:13 pm

And I do love Last Week Tonight with John Oliver.

https://www.youtube.com/watch?v=XfpWZRTd0ik

#76 bill on 08.17.15 at 10:23 pm

#65 espressobob on 08.17.15 at 9:40 pm
could you elaborate?
putting in new pads etc is not exactly rocket science…
in BC there is no fault insurance – would this be a factor?

#77 ETF FAN on 08.17.15 at 10:24 pm

Question:

I have a home equity line of credit with a moderate balance from house renovations, etc….

Can I have a seperate heloc account to be used for investment purposes…i.e. 2 accounts against 1 house? This makes it easier to track interest paid for tax purposes.

I can’t find an answer to this. Thanks.

Yes. They cannot exceed 65% of equity, unless amortized. — Garth

#78 Shawn on 08.17.15 at 10:27 pm

Narcissistic or Confident?

Leo Trollstoy said:

‘Legacy’ is a creation of the narcissistic ego. Completely overrated.

************************************
What have you got against having a narcissistic ego?

Many or most men have that condition. And enjoy it.

And the ladies are attracted to it in most cases. Especially where it is justified. Garth and his troupe of Amazonian groupees can confirm, I am sure.

#79 BS on 08.17.15 at 10:31 pm

One problem I can see with that advise is that the bank can cancel your credit if they believe you can’t repay it: Loss of job, serious illness, …

How would the bank know you lost your job or were ill? At least short term they wouldn’t know. I recall my bank asking me if I was still working at a job I left over 3 years ago at one time. They are not keeping tabs on credit worthy people. In any case banks usually have no problem giving a LOC to people with liquid assets even with a job loss.

#80 TurnerNation on 08.17.15 at 10:38 pm

Take a look around as you walk down a crowded street. Every one of ’em. They’d like you to buy their house in a +50k bidding war. Admit it. They want to stick it to you. Zero sum game.
This is what we’ve become. Economic totalitarianism.
This era there’s no need for them to snitch on you to the Party. This time they know they’ve got you.

#81 IHCTD9 on 08.17.15 at 10:43 pm

#65 espressobob on 08.17.15 at 9:40 pm
#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.
—————————-
Is that so? I’ve been maintaining and modifying my daily drivers for 27 years and never had any policy cancellations. Anyone can swap out a pair of pads and a disc, not like it’s rocket science. I haven’t had my personal cars to a garage in a couple decades, and I always get 350K plus before they’re sent off to be made into toaster ovens.

Re Garth, true, there are alot of junk parts out there online, but quality is there as well. There are plenty of shade tree mechanics out there (enthusiasts mainly) who thru the love of racing, restoring, or modifying cars become very competent mechanics, just like me. Brakes are easy, put some name brand or OEM parts on and drive till something truly expensive blows.

FWIW, I am also a damn good bulldozer mechanic these days as well, although I am not licensed to work on those things either… :)

I have prevented the expenditure of tens of thousands of wasted dollars on purchasing and maintaining our vehicles, money that probably in part ended up in our investments somewhere down the line.

#82 Steerage Bilge on 08.17.15 at 10:44 pm

#67 Nora Lenderby on 08.17.15 at 9:45 pm

#56 gut check on 08.17.15 at 9:00 pm
I’ve just seen google’s humanoid robot and suddenly nothing else matters.

Yes, Google bought Boston Dynamics. Their animal-like robots are very interesting as well:

Spot
———————–

Bigdog is awesome.. What a great toy to have!

#83 Carpe Diem on 08.17.15 at 10:50 pm

I have an LOC with a major bank. I think the interest rate is to high for me to use it. I keep it around to pay off credit cards when I need a couple months to pay off emergency expenses.

What should be a reasonable interest rate for an LOC these days.

#84 Godth on 08.17.15 at 10:50 pm

#78 Shawn on 08.17.15 at 10:27 pm

World War 1 in Colour – Ep. 1 – Catastrophe
https://www.youtube.com/watch?v=fEcGLYsMODY

#85 Ronaldo on 08.17.15 at 10:59 pm

#81 IHCTD9

”I have prevented the expenditure of tens of thousands of wasted dollars on purchasing and maintaining our vehicles, money that probably in part ended up in our investments somewhere down the line.”

Good for you IH. I have done similar as well. My last 3 vehicles all had near to 300K and I did a lot of the work myself. I bet that you are pretty handy at a lot of other trades as well.

#86 Charles on 08.17.15 at 11:01 pm

So your advice to Christina is to never buy a house and rent her whole life? Does that mean there is never a good time to buy a house since a balanced portfolio will always beat it over the long run?

#87 Estrella on 08.17.15 at 11:02 pm

Your blog picture today reminds me of a saying one of my priests had..” you’ve never seen a hearse hauling a uhaul.” That one stuck with me.

This interview was kevin o’leary description of Canadian housing . For the most part he is on point I think. .

http://www.theglobeandmail.com/report-on-business/video/video-oleary-no-cracks-in-canadas-housing-condos-show-insatiable-demand/article25958592/?cmpid=rss1&click=sf_globe&service=mobile

#88 jane 24 on 08.17.15 at 11:02 pm

Having reached the age of 61 and now being financially secure, I realise that the best thing in life is your children and grandchildren. They are the end game.

We have friends who chose not to have children or left it too late to try and their lives in their 60’s are very different from ours. Our lives are full with our children and their own families.

I am sorry now that we only had three children as a couple more would not have really changed our expenses and life game plan but we felt pressured by friends to stop at just three.

You can always make more money in life, that part is easy, but not more children at our age!!

#89 young & foolish on 08.17.15 at 11:04 pm

Why do some financial advisors shun preferreds?

#90 mechanic on 08.17.15 at 11:07 pm

Hmm mm let me think safer me changing brakes or the young puck hungover teenager at Canadian Tire? I wouldn’t let them fix my wheelbarrow

#91 A Canadian Abroad on 08.17.15 at 11:07 pm

#20 name dropping on 08.17.15 at 7:00 pm
Let’s drop some current sexy ETF names/tickers to Christina.

AOR

.30 MER

17 USD ETF’s

iShares S&P Growth Allocation Fund (ETF)
(NYSEARCA:AOR)

(Note, I am invested heavy in this ETF fund).

ATB Compass Portfolios:
MER 1.1 or less if you go with ATB Investor Direct
http://www.compassportfolios.com/Performance/Pages/Compareportfolios.aspx

Remember, don’t time the market!

#92 Smoking Man on 08.17.15 at 11:28 pm

#67 Nora Lenderby on 08.17.15 at 9:45 pm
#56 gut check on 08.17.15 at 9:00 pm
I’ve just seen google’s humanoid robot and suddenly nothing else matters.

Yes, Google bought Boston Dynamics. Their animal-like robots are very interesting as well:

Spot
…….

Sky net…. Life imitating art.

#93 Carpe Diem on 08.17.15 at 11:38 pm

Hi Christina,

You don’t have enough to engage an adviser.

As Garth says, get a TD or RBC Direct online brokerage account and do it yourself.

Here are some good links:

http://canadiancouchpotato.com
http://www.blackrock.com/ca/individual/en/learning-centre/model-portfolios-overview

If you are investing in RRSPs and ETFs inside your RRSP or TSFA, things are simple. If you ever invest outside these, then you need to learn about things like your Adjusted Cost base and that gets more complicated when in comes to Income Tax Returns.

I know with RBC, you can open a demo account and test things out before you do.

Remember, don’t panic if a correction happens. Buy more.

#94 Bob on 08.17.15 at 11:45 pm

If you buy parts on the Internet and fix your own brakes, in 12-13 years you will be a fatality. — Garth

#65 espressobob on 08.17.15 at 9:40 pm
#59 Steerage bilge
Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.
———————

Patently false. Like #81 IHCTD9, I’ve been buying and maintaining used vehicles myself for over a quarter century. I’ve never paid more than $4k for a vehicle, and there have been some real beauties (current ride is an E-Class Benz… love this car). Ever wonder why the Canadian Tire flyers are full of brake pads, batteries, and mechanic tools? Yep, it’s ’cause there are still some real DIY mensches out there who know how to turn a screwdriver and don’t buy into the “outsource everything and become useless” fallacy. I’ve also seen some truly scary parts & labour come back on friends’ vehicles after visiting “licensed” shops. When it comes to safety for my family, I’ll do it myself and do it right, thanks.

Btw, I order all my genuine Mercedes parts online from reputable dealers at deep discount from local dealers & parts suppliers, and the parts are identical. Don’t buy into the myth that you can’t DIY, anyone who tells you different is trying to sell you something (kinda like RE and [email protected]!).

#95 NoName on 08.17.15 at 11:46 pm

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.

To work on other people’s car brakes you have to be licensed, you can work on your vehicle, just buy oem parts.

#96 Oceanside on 08.17.15 at 11:51 pm

Don’t know about living on KD ‘s to have a wealthy old age, pretty depressing thought. Drove through Lillooet yesterday….Not a lot going on there

#97 Oceanside on 08.17.15 at 11:53 pm

#65 espressobob on 08.17.15 at 9:40 pm
#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.

Maybe in Botswana but not here.

NO…………..

#98 NoName on 08.18.15 at 12:08 am

Robots…
https://youtu.be/3RBSkq-_St8

#99 bdy sktrn on 08.18.15 at 12:10 am

#81 IHCTD9 on 08.17.15 at 10:43 pm
#65 espressobob on 08.17.15 at 9:40 pm
#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.
—————————-
about the dumbest thing i’ve read on the internet this year (and i read a LOT)
——————————-

Is that so? I’ve been maintaining and modifying my daily drivers for 27 years and never had any policy cancellations. Anyone can swap out a pair of pads and a disc, not like it’s rocket science. I haven’t had my personal cars to a garage in a couple decades, and I always get 350K plus before they’re sent off to be made into toaster ovens.
————————-
Re cheap parts – I would say that the fatality rate caused by ‘poor quality’ pads is 0.00000000000000000000000001% of fatal crashes – meaning it’s never happened.
(they just wear out sooner)

FWIW, I am also a damn good bulldozer mechanic these days as well, although I am not licensed to work on those things either… :)
———————————–
a few yrs back I pulled a big JD diesel backhoe/loader (1960) which was dead and totally overgrown after 10 yrs rusting in the bush – fires up like a honda civic every time and handy when you have 2 ton logs to throw around (starting is jamming a big wrench across the starter terminals!)

purchasing a kubota loader/tractor tomm, for me it’s showroom new , it’s a 2009. low book is 16k usd
also from the same seller a 34′ high end 5th wheel older ’95 – value maybe 8k usd

here’s where the savings really come in – just met these new neighbours, they are moving out, but we got on well and they offered both for 10k, or about 40% of true value. – score.
———————-

I have prevented the expenditure of tens of thousands of wasted dollars on purchasing and maintaining our vehicles, money that probably in part ended up in our investments somewhere down the line.
————————-
BINGO – even better for your boat,motorcycle, Rv etc.

#100 BH on 08.18.15 at 12:12 am

#65 expresso bob

Fixing own brakes voids insurance policy.

Rubbish, you wont find an exclusion for this anywhere in any Canadian auto insurance policy.

#101 name dropping on 08.18.15 at 12:14 am

#66 kommykim

RE: #20 name dropping
Let’s drop some current sexy ETF names/tickers to Christina.

ZLB, VXC & VSB

Thank you kommykim!

#102 Investx on 08.18.15 at 12:16 am

#66 kommykim:
RE: #20 name dropping on 08.17.15 at 7:00 pm
Let’s drop some current sexy ETF names/tickers to Christina.

ZLB, VXC & VSB
——————–

Hmmmm…the first two have yields less than 2%, hardly better than some savings accounts. The third is just over 2%.
Surely there are ETFs that yield more with the same low risk?

#103 Musty Basement Dweller on 08.18.15 at 12:19 am

After reading this attached article I think today is the day I start to feel ok with this guy not getting back in. I think he is truly in this game for the power and not the people although I didn’t fully believe that before.
From The Globe and Mail:
http://www.theglobeandmail.com/news/politics/economists-caution-against-harpers-focus-on-rising-home-ownership-rate/article25996780/

Via The Globe and Mail’s Android app

#104 anotherstabbinginsaskatoon on 08.18.15 at 12:35 am

Ricotta cheese for my manicotti! Mm-mmm. Every day is a death. A sweet embrace.

#105 Rich Young on 08.18.15 at 12:41 am

HERE IT STARTS … Calgary

I’ve been reading this blog for some time waiting for the truth to unfold. Hit a show home in SE Calgary recently. Only soul in the trap.

Realtor tells me about a spec property they have for the low low price of … OVER HALF A MILLION. Simple family home, by today’s standard. The typical home that most families would lust for. $535,000 he says. I tell him that is a bit high and he quickly tells me he thinks it can go for $500,000 even. Tell him to run the numbers and payments. He gives me a $2000 payment and I suggest we need something closer to $1500. Have anything else?

Well, he doesn’t. He has another $25,000 discount in minutes. This in less than a 10min converstation we have gone from $535,000 to $475,000 …

My house horny wife needs to hold off a bit longer as this is just the beginning I’m sure. We are renting a half duplex with 1 bathroom for $1100. My 2 girls, wife and me are surviving just fine. The greed I see around me makes me feel sick. Who NEEDS 4 bathrooms in a family home? If you listen to a Realtor, everyone. However, we make out just fine and will hang on and keep stuffing cash into our TFSA.

Cheers GARTH!

#106 Karl hungus on 08.18.15 at 1:22 am

Garth you are a sucker if you believe in the 0.9% financing. The dealership will just jack up the price of the car to make up the difference in interest vs 5%

#107 Vicpaul on 08.18.15 at 2:05 am

Hmm, contrarian thinking…reversing course when the tide’s flowing out.
Everyone (~70%) and there dog has been buying and pouring reno dollars into RE for over a decade – pushing prices (and the facade of value) ever higher. Mainstream message congealing into….ug, housing toxic.
But – what if a guy had a few too many sheckles in an rrsp and would like somehow to convert those Canpesos into TFSA dollars in the future (20 ans). Couldn’t a guy borrow 35k from said taxable account buy an inexpensive ($250,000ish) rental (with an eye for the property orientation for future redevelopment – you know, 65 year-old’s bachelor pad….I was thinking a Turkel/Lindal design, but I digress). If he skipped this year’s contri (5k taxable, 10k TFSA) and put 50k down, no CMHC – in chunkable pieces, wouldn’t it be good to use some cheap money……geez, it’s a nebulous world out there.
By the by, Garth and Smokes will recall, I called a Liberal three-ring about five months ago. It’s in the archive.

#108 Dean on 08.18.15 at 2:09 am

#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.

On your own passenger vehicle?
Bullshit.

#109 Victoria Real Estate Update on 08.18.15 at 2:32 am

# 50 omg the original

You failed to provide us with an example of a housing bubble that deflated in a slow, grinding manner.

Don’t waste your time looking, you won’t find one.

Canada’s housing bubble is much larger than the 2006 US housing bubble, but you think it is different in Canada and that Canada’s bubble will deflate slowly.

You’ve made it clear that you are looking to buy a rental property. You’ve convinced yourself that prices will fall slowly over time and that buying now is safe.

You may not be a realtor, but you are motivated to convince others that it is safe to buy a house right now.

The problem is that you don’t provide any proof to back your claims.

Housing crashes have happened in the 80s in BC and AB. Toronto went through a nasty price correction in the early 90s. I know someone who sold their Toronto house in 1993 for a 50% haircut, 3 years after buying it.
The yearly average price doesn’t give an accurate picture of how deep individual home prices fall during a major price correction. It always understates the actual depth of the correction. This is why realtors love to use average prices.

Past price declines can’t be used to predict what will happen in the future. The US experience taught us that. Americans hadn’t experienced a major national housing market crash until recently. It wasn’t supposed to happen, but it did.

If Canada has had a housing bubble in the past, it would have been only a fraction of the size of the one that exists now.

The fact of the matter is that Canada’s housing bubble is much larger than the 2006 US bubble. All metrics point to this fact.

You discount everything that points to something different than what you think. Wolf Richter’s experienced and expert analysis is a good example of this.

No two housing bubbles inflate in the exact same way. However, history has shown that all housing bubbles correct and that prices don’t stay flat and wait for incomes to catch up.

Housing bubbles don’t deflate slowly and safely. Prices fall in such a manner that people end up selling their home, for example, 5 years after buying it for 30 to 60% less than what they paid. Tons of people lost their homes in Alberta and BC in the early 80s.

Canada’s magnificent housing bubble has inflated with liar loans (mortgage fraud), subprime loans, etc. In the US, the minimum down payment is 20%. In Canada it is 5%. And so on… These things don’t help a housing bubble land softly. On top of it all, interest rates will begin rising soon. House prices fall as rates rise.

Incomes generally stagnate or fall during a recession or when a housing bubble is in deflation mode. Falling house prices have a crushing effect on an economy which is bad for house prices.

There’s just nothing safe about buying a house in Canada right now when the important facts are considered (and not ignored).

#110 Leo Trollstoy on 08.18.15 at 2:57 am

#78 Shawn on 08.17.15 at 10:27 pm
Leo Trollstoy said:

‘Legacy’ is a creation of the narcissistic ego. Completely overrated

Not sure if the best reason for having children is to satisfy one’s narcissistic ego for ‘legacy’.

#111 Leo Trollstoy on 08.18.15 at 3:00 am

If you buy parts on the Internet and fix your own brakes, in 12-13 years you will be a fatality. — Garth

LOL!

Poor sheeple really go to great lengths to save a buck.

#112 Nagraj on 08.18.15 at 4:29 am

[ ” . . . when churchyards yawn and Hell itself breathes out contagion to the world . . . ” ]

Dear Mr. Money,
I am visiting your beautiful country. I am from Siebenbuergen (Rumania) where I own land, and an old castle high up on a mountaintop. I am looking to invest in Toronto condos as I have been given to understand that many will become available cheaply. Many of my friends will be happy to hang out high up in Toronto. What do you think? Should I buy now or wait? Waiting poses no difficulty.
Yours truly, Draco Graf Nosferatu

PS: How much does that coffin in your photo cost? Can coffins in Canada be rented or leased? If so, which is preferable?

PPS: I might tell you I have two little friends in Ottawa close to your Prime Minister who in his last exchange with reporters looked nervous and very pale. May I say I hope his health improves – anemia is quite common in Siebenbuergen as well.

#113 Londoner on 08.18.15 at 4:41 am

1. You’re both self-employed? Lease the car through your business.

2. To fund your mat leave, keep some retained earnings in the corporation. Open up a trading account for your business and then draw it down when you’re not working.

3. You’re 31 and you’re not planning to start having kids for another 1-2 years? Ummm… depending on how many you want to have you might want to reconsider your timelines. People have varying degrees of success.

I offer no advice… just my 2 pence. Cheers.

#114 nobody on 08.18.15 at 5:56 am

Counting on a 7% average annual return for the next 30+ years is assuming a lot. Not quite as bad as the math the realturds selling condos use but, still, more hope than anything else. Even with your oft stated reminder about the return in the last ten years, the claim that in today’s world, such earnings from ETFs, a financial product which has been around for about only a decade, will remain the same in the next 30-40 years is really grasping at straws.

That is the average long-term track record of financial markets. Got a better yardstick? — Garth

#115 nobody on 08.18.15 at 6:26 am

#13 Danforth on 08.17.15 at 6:38 pm
#10 BobC on 08.17.15 at 6:18 pm

History’s lesson here is to *stay invested*. Stay the course.
Remember that Time In the market is more important than Timing the market.
_________________________________

Tell it to the Japanese investors who 20 years later are still 50% down on the Nikkei. Yes, it’s a different world of ETF diversified investing now, but to believe that all is good and will remain so forever as long as one remains invested in the market is to be willfully blind to geopolitics and macro-economic shifts.

#116 maxx on 08.18.15 at 7:24 am

#31 Linda on 08.17.15 at 7:31 pm

Kudos. Health is life’s most precious asset.

#117 nutty squirrel on 08.18.15 at 7:43 am

Does anyone know of the cheapest place to get a HELOC. Right now the RBC wants $250 as a fee plus around $500 for legal cost. I found that PC Financial will do it for only $150 and no legal feel but want the person to carry $15000 balance at all time.

#118 nobody on 08.18.15 at 8:04 am

That is the average long-term track record of financial markets. Got a better yardstick? — Garth
____________________________________

Past performance should not be seen as a guarantee of future results, especially in today’s world. Your claim for a continued rosy investment picture over the next 30-40 years based on the historical trend is a huge leap of faith in the face of unprecedented global challenges.

There is no guarantee implied, of course. It is what I stated – a yardstick. Got a better one? — Garth

#119 cropgrower on 08.18.15 at 8:21 am

Was sat beside a retired car sales manager at a wedding. Got along fine. Asked, since he was retired, what was the secret to buying a vehicle. Don’t lease, and never buy new……

#120 Llewelyn on 08.18.15 at 8:41 am

In this corner we have realtors pointing to flip charts that illustrate the appreciation of real estate assets since the 1950’s. Dips in market value over the years are dismissed with a wave of the hand and attention is refocused on the impact of leverage where an investment of 5.0% opens the door to a tax-free capital gain on the total market value.

In the other corner we have investment advisors pointing to more impressive variety of charts that illustrate the appreciation of equities and other investment products since the 1950’s. Dips in market value over the years are dismissed with a wave of the hand and attention is refocused on the impact of compounding an average ROI until retirement.

No one can dispute that looking through a rear view mirror provides a very accurate description of what happened over the past fifty years or so. However I am pretty sure that if we replayed the tapes from the early 1980’s we would not find a single realtor or financial advisor that anticipated interest rates below 1.0% in the foreseeable future.

My point is that change is very unpredictable and while basing the prediction of the future on past performance a useful guide it is really nothing better than a guess.

Everyone has a right to express their opinion but unless you firmly believe that the past will have a significant bearing on the future view all opinions with a measure of scepticism.

Current rates are as much an anomaly as 19% mortgages were. Over time, it matters little. — Garth

#121 IHCTD9 on 08.18.15 at 8:42 am

#85 Ronaldo on 08.17.15 at 10:59 pm
#81 IHCTD9

”I have prevented the expenditure of tens of thousands of wasted dollars on purchasing and maintaining our vehicles, money that probably in part ended up in our investments somewhere down the line.”

Good for you IH. I have done similar as well. My last 3 vehicles all had near to 300K and I did a lot of the work myself. I bet that you are pretty handy at a lot of other trades as well.
____________________________________________

Thanks Ronaldo. My work experience in my youth (construction, landscaping, and agricultural work), and my lifelong automotive hobby has turned out to be a big $ saver these days. Along with vehicle repairs, I do 90% of the repairs on house/property as well. With my recent interest in antique heavy equipment spurred by my need for a low cost way to remove the concrete foundation from the old barn, I now own some pretty serious machinery that will keep paying for itself with various projects.

#122 Londoner on 08.18.15 at 8:43 am

#117 nutty squirrel

Go find a sleepy branch somewhere in a not so great neighborhood. Then pester the branch manager until they waive the setup fees for you. Don’t try it with telephone banking staff.

#123 raider on 08.18.15 at 8:46 am

“Counting on a 7% average annual return for the next 30+ years is assuming a lot.”

Well, you could just go a little speculative and buy Barrick Gold Long-term debt for 80 cents to the dollar. The long-term issues maturing in 20+ years now pay more than that. Best of all if they go belly-up (and I’m sure a lot of doomers will think this will never happen), you own the f***ing mining rights rather than being left with nothing in the event of a stock meltdown. If you look at their chart the stock decline is quite appalling as opposed to the income from their bonds. If you dig deep there are many more opportunities like this, probably more after US interest rates rise. Don’t believe what the guy with the pin at the bank tells you to invest in; you’re better off doing your own homework.

http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=abx

Also publicly-traded USD bonds don’t attract any US withholding tax under the portfolio-interest exception. This, some growth, and some less-speculative fixed-income pays for my kids daycare…

#124 Berniebee on 08.18.15 at 8:49 am

#65 expressbob
“Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.”

Right. And replacing your kitchen light bulb voids your fire insurance. Where do you get this nonsense from? Was it your Audi dealer?

#125 BobC on 08.18.15 at 8:58 am

#71 OMG
Excellent advice. Its exactly what I see me doing. It’s like you know me. Your right and I’ll hang in there and see what happens.
Thanks

#126 NoName on 08.18.15 at 9:02 am

@musty bsmnt dweller

When post write something like this in mid campaign you know you have a problem.

http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com//news/canada/canadian-politics/the-secret-side-of-stephen-harper-the-staid-prime-ministers-quick-wit-is-lauded-by-friends-and-foes-alike

http://www.probit.ca/recent-developments/midsummer-haze-clouds-voter-outlook/

#127 IHCTD9 on 08.18.15 at 9:14 am

#99 bdy sktrn on 08.18.15 at 12:10 am
#81 IHCTD9 on 08.17.15 at 10:43 pm
#65 espressobob on 08.17.15 at 9:40 pm
#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.
—————————-
about the dumbest thing i’ve read on the internet this year (and i read a LOT)
——————————-

————————-
Re cheap parts – I would say that the fatality rate caused by ‘poor quality’ pads is 0.00000000000000000000000001% of fatal crashes – meaning it’s never happened.
(they just wear out sooner)

———————————–
a few yrs back I pulled a big JD diesel backhoe/loader (1960) which was dead and totally overgrown after 10 yrs rusting in the bush – fires up like a honda civic every time and handy when you have 2 ton logs to throw around (starting is jamming a big wrench across the starter terminals!)

purchasing a kubota loader/tractor tomm, for me it’s showroom new , it’s a 2009. low book is 16k usd
also from the same seller a 34′ high end 5th wheel older ’95 – value maybe 8k usd

here’s where the savings really come in – just met these new neighbours, they are moving out, but we got on well and they offered both for 10k, or about 40% of true value. – score.
———————-

————————-
BINGO – even better for your boat,motorcycle, Rv etc.
____________________________________________

We would probably enjoy sharing a beer bdy sktrn, ahh the joys of rusty old equipment as old or older than yourself :)!

I have a 1959 IHC TD9-91 Track loader in awesome condition. 70 HP, 20,000 lbs, 14,000 lift capacity, 16,000 lb breakout force on the bucket. Starts on gasoline, warm it up, then switch over to diesel. Has a distributor and carb on one side, and an injection pump and injectors on the other – really sends guys for a loop LOL!

I also own and have 80% restored to better than new (so far) a 1952 ATC Terratrac GT30 track loader. Cool as heck little machine – 6000 lbs, 30 HP, 3800 lb lift, 2000lb break out on the bucket. Wet clutch machine so it can sit for years and not seize up, diff steer makes it real easy to operate – my youngest snow plowed the driveway a couple times with it back when he was 8!

I also have a 1967 Bombardier JW67 (old yellow tracked sidewalk plow). 5500 lbs, 120 HP.

These old machines keep me busy enough that I don’t have the time to look at the MLS :)

#128 Elmer on 08.18.15 at 9:17 am

A LOC as your only emergency fund is risky. The bank can revoke your LOC at any time. Imagine you lose your job, and the bank revokes it. You should have a few months worth of living expenses in a HISA just in case.

Also, your comment about never paying cash for a car is dumb. Leasing is never a good option unless you can write it off as a business expense. As for 0% financing, there is actually no such thing. Whenever you see a car with a 0% financing option, there is always a cash purchase price which is several thousand dollars less than the financing price. Ideally I would buy a car 3-4 yrs old and pay cash, but if you intend to hold on to it for 20 years and drive it into the ground, it’s not much worse buying new.

#129 Rene on 08.18.15 at 9:20 am

“Every person with a pulse should have one.” Sorry Garth, I strongly disagree here. You should have said “Every person with a brain should have one.” This means the morons who can’ t manage their personal finances should not take on a loc that becomes un-repayable. To go from “spending more than what you make” to “spending less than what you make to account for a new debt payment” is a complicated concept for too many people.

#130 Lana Faessler on 08.18.15 at 9:31 am

Buying vs leasing…old cars vs new…probably depends on your life circumstances. If you are mechanically inclined and can fix and maintain your car, lucky you. If you need a reliable vehicle for work, can’t afford surprise expenses (unbudgeted repairs) and have two left thumbs when it comes to anything mechanical, then leasing a car may work for you. It works for me.

#131 Hot Albertan Money on 08.18.15 at 9:32 am

Isn’t $40k a little small to be doing ETFs? I’ve always heard you don’t usually want to go into ETFs until you have at least $50k

#132 IHCTD9 on 08.18.15 at 9:32 am

#111 Leo Trollstoy on 08.18.15 at 3:00 am
If you buy parts on the Internet and fix your own brakes, in 12-13 years you will be a fatality. — Garth

LOL!

Poor sheeple really go to great lengths to save a buck.
____________________________________________

You probably would not believe how fast a good guy could do a set of front disks and pads. Like, less time than it takes to read a GF post and the typical 200-300 comments. They are primary wear items and are designed to swap out fast and easy – ask any mechanic. In some vehicles, changing out the spark plugs is 2X more work than doing the brakes.

Rebuilding a couple final drives yourself on a machine for which the manufacturer has been out of business for 58 years is going to great lengths.

A bit of brake work gets done in between arriving home from work and supper time.

#133 Axehead on 08.18.15 at 9:44 am

Christina,

Having bought ‘many’ cars in my lifetime; here’s some advice regarding the 2nd most expensive purchase you will probably make beyond a house (hopefully in the future now that you have been converted by Garth):

Cars suck money, they depreciate fast, and are poor investments SO go as cheap as you can without risking high maintenance costs, therefore:

1 – buy Japanese, specifically Honda or Toyota as they are reliable and well built; stay away from German (quirky and high repair costs) or domestic (poor quality) and I still don’t trust Korean (ugly anyways).

2 – buy used and try to buy a car around 3-4 years old. You can usually get it at 1/2 original purchase price. Get as low KM as you can (est. 25k/year max).

3 – buy from owner vs dealer. Dealers usually have ‘problem’ cars and their motive is profit. I usually get a better price from owners. And you can forget the warrenty that a dealer offers – not worth the paper it’s printed on.

4 – Do your research (Kijiji) and know what you need (car, truck or SUV and features needed vs wanted) and the expected price, KM for the year.

5 – Always ask: orignal owner? – preferred, service records? – at dealer preferred, and accident?- none.

6 – Finance with LOC or buy outright and borrow for the money you wished to invest as Garth suggests since it will be now tax deductable.

7 – Find someone who knows cars to help (i.e. spouse, father, friend) and run everything by him.

8 – Never pay asking price, unless it’s reasonable. All list prices were meant to be negotiated down.

9 – Always pay to have the vehicle inspected by a licensed mechanic prior to signing a Bill of Sale and especially passing over any money (once the $’s leave your hands, you will not ever get it back) and you can check about accidents via car fax or other providers.

10 – Everything in writing, including Bill of Sale, inspection, etc. and multiple signed copies. Make sure your mentore (in #8 above) is with you at all times.

#134 cramar on 08.18.15 at 9:51 am

31 Linda on 08.17.15 at 7:31 pm

Garth, good advice to Christina except the ‘learn to live on KD’. Better by far to learn to cook – you can eat like the wealthy while paying peanuts. [snip]

———–

Two thumbs up! Spoken like Jamie Oliver!

#135 LH on 08.18.15 at 9:55 am

Re 110 Leo Trollstoy

Not sure if the best reason for having children is to satisfy one’s narcissistic ego for ‘legacy’.

………

The best reason for having children is that they’re *really fun to make*

It also helps that babies are the cutest thing when they’re sleeping next to you.

Kids look and act like their parents, and are capable of extraordinary feats of learning. My eldest (age 6) has perfect squares up to 23, and can do factorials, exponents, logs, etc.

Children are the closest we can get to immortality in our brief lives. Other than writing a book (go smoking man!) that is.

Nobody on their deathbed wishes they had spent more time at the wage farm, and nor will I trade kids for any number of BRK.A shares.

That said I will leave them each at least one A share.
And a paid off SFH in C01 or C02 :)

But far more valuable than that, is a good education, not just formally but also a Smoking Man sense of inner confidence. In the words of Hume:

“to see the favorable than unfavorable side of things; a turn of mind which it is more happy to possess, than to be born to an estate of ten thousand a year”

Millennials: class dismissed.

#136 Steerage bilge on 08.18.15 at 9:58 am

#65 espressobob on 08.17.15 at 9:40 pm

#59 Steerage bilge

Only a licensed mechanic can legally fix your brakes on a motorized vehicle. Doing it yourself voids ones insurance policy.
———————————————
My whole live is a void! DIYers rule in the steerage section. And we don’t let fruit people take care of our money either.

#137 Broke Dick on 08.18.15 at 10:02 am

RRSP question re spousal contribution.

Me retired, common law wife still working.
I currently am drawing down my rrsps from TD bank.
Suppose my wife was to contribute to an rrsp in my name but at a different financial institution at which point I could withdraw it in 3 years and be counted as my taxable income.
Does this strategy work even though I am currently drawing down my own rrsps?

#138 Vlad on 08.18.15 at 10:09 am

Mr. Harper promises to curb Chinese speculators? Why so late?

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/harper-promises-closer-look-at-foreign-investment-in-canadian-homes-condos/article25941040/

#139 Nora Lenderby on 08.18.15 at 10:09 am

Ah, Mr T. you have disturbed the wasp’s nest of True Canadian values* with your jibe at the man who fixes his own brakes. (Anyway, as you may realise, far more drivers are killed by mobile phones than faulty brakes.)

I am an advocate for do-it-yourself work when you can and if you must. It leads to self-reliance and self-confidence (sometimes a little too much, but that’s another story).

You have huge expertise in your area (finance, public affairs, being sardonic about the foibles of humanity) but there is fun, money saving, and satisfaction in doing some things for oneself.

*Self-reliance, squeezing nickels, complaining.

Your self-satisfaction is not equal to jeopardizing the safety of others. Amateur mechanics are a scourge. Take up watercolours instead. — Garth

#140 };-) aka Devil's Advocate on 08.18.15 at 10:11 am

There are seven billion people in the world. In my lifetime, human population has doubled. — Garth

And they all need shelter. Rented or owned it’s paid for one way or another.

#141 Axehead on 08.18.15 at 10:13 am

#133 Correction

Tip # 10 should refer to tip #7.

Also, about KD, it will make you fat and sick. For cheap food, even though Garth makes fun of the place, Costco is your best bet. E.g. Buy a roast and cut it into steaks – viola, half price! Quality is usually very good for meat, fish, poultry – watch produce though, reach around the back to get the most fresh stuff and always check the dates.

#142 cramar on 08.18.15 at 10:31 am

#81 IHCTD9 on 08.17.15 at 10:43 pm
#65 espressobob on 08.17.15 at 9:40 pm
#59 Steerage bilge

Re Garth, true, there are alot of junk parts out there online, but quality is there as well. There are plenty of shade tree mechanics out there (enthusiasts mainly) who thru the love of racing, restoring, or modifying cars become very competent mechanics, just like me. Brakes are easy, put some name brand or OEM parts on and drive till something truly expensive blows.

FWIW, I am also a damn good bulldozer mechanic these days as well, although I am not licensed to work on those things either… :)

———–

Back circa 1980s, a buddy in Mississauga who drove a cement truck was an amateur mechanic who specialized in VW Rabbits (especially diesels). Several of us had them and he serviced them in his home garage. One Sunday evening another friend from Barrie limped in with brakes shot on a Dodge Omni. My friend was out of brake pads and fabricated a set of pads out of a hardwood broom handle to get him home. Told him to get proper pads on Monday. Later the guy calls from home and tells my buddy that he got home safely, the brakes worked great, but every time he went to stop, “It smells like burning wood!”

ROFL!!!!

#143 Shawn on 08.18.15 at 10:50 am

Car Dealers 0% and 0.9% Interest Option is Illusion?

#106 Karl hungus on 08.18.15 at 1:22 am said:

Garth you are a sucker if you believe in the 0.9% financing. The dealership will just jack up the price of the car to make up the difference in interest vs 5%

And Elmer at 128 said:

Whenever you see a car with a 0% financing option, there is always a cash purchase price which is several thousand dollars less than the financing price.

*****************************************
What you are saying SHOULD be true in theory.

In practice however the 0.9% and 0% deals are clearly not offered by the dealer but by the manufacturer.

And it may be that the dealer has no power offer a better cash price if you refuse the low-interest deal.

Another example, Volvo offers the option of picking up the car in Sweden and driving it there and with your airfare paid and then the car shipped. This is a Volvo marketing deal and I understand that there is no credit given if you don’t want the trip.

With several parties involved in an auto deal (manufactures, dealer, financial institution) you may find that there are marketing deals that are take it or leave it. If you don’t want the deal offered by the manufacturer the dealer may have no ability to credit you for that.

I stand to be corrected if we have a car dealer on this blog.

#144 bdy sktn on 08.18.15 at 10:54 am

1 – buy Japanese, specifically Honda or Toyota as they are reliable and well built;
__________
Well sort of but parts can be much higher . Small Honda muffler/rad etc is 2x the cost of big Chevrolet truck part.

stay away from German (quirky and high repair cost
_________
Agreed but many have a lust for these and I was shocked when the Benz pads were less than Honda
________

or domestic (poor quality)
_____
I have seen too many ford eng/Trans die way early
The gm vortec engine may be the best quality engine ever produced . To get to 500k you need 2 spark plug swaps and zero Trans fluid changes.
My last truck was abused beaten saltwatered and overloaded for 20 yrs till the body was dieing fast.
Sold it in one day for 500 as the powertrain only had 250k . Low for a vortec.
Bought the same truck same year 200k with a babied body for 2500bucks. Been 2 years and has been more reliable than any new car I have ever seen. If something bad goes I can replace it with pocket change.

Other savings of extremely reliable older cars?
No expensive additional insurance required. 2 cars × 20 years × 1000/yr =40,000
Compounded at 7% = about 100k
Leveraged into 604 re = about 400k

When driving I don’t need a bag over my head, I need it to hold fat stacks

#145 Shawn on 08.18.15 at 11:02 am

Car Dealer Profits?

Dealer profits have generally been something of a secret. Who knows what volume incentives a dealer has that lower the apparent cost that he can show you as his invoice cost?

With the advent of publicly traded dealer groups like AutoCanda we now have some better facts.

For AutoCanda (with about 50 dealers) the gross margin on vehicles in 2014 was as follows:

New vehicles sold at retail: 10.1%
New vehicles sold to fleets 0.9% (almost nothing!)

Used vehicles sold at retail 7.7%
Used vehicles sold to wholesalers 1.3%

Out of this gross profit must come the expenses of the dealership building and sales staff.

Financing and parts / service are separate profit centers.

The above figures may be useful in making an offer on a car.

Keep in mind that the above are averages. The whole idea of non-transparent prices is to charge say 15% gross margin to the person who does not shop around to make up for the guys who squeeze you down to 2%.

#146 IHCTD9 on 08.18.15 at 11:06 am

#130 Lana Faessler on 08.18.15 at 9:31 am
Buying vs leasing…old cars vs new…probably depends on your life circumstances. If you are mechanically inclined and can fix and maintain your car, lucky you. If you need a reliable vehicle for work, can’t afford surprise expenses (unbudgeted repairs) and have two left thumbs when it comes to anything mechanical, then leasing a car may work for you. It works for me.
____________________________________________

My wife has to keep reminding me that folks who can’t, and will never be able to do brakes and wheel bearings actually exist. These people without a doubt would be better served with a newer lower mileage vehicle, or leasing like you say.

Buddy of mine had a brake job and some A/C work done to his old mini van to the tune of 1K. Doesn’t take anything to decimate a paycheque at crappy tire these days.

#147 Josh in Calgary on 08.18.15 at 11:06 am

#133 Axehead,
Great advice on buying cars … except for number 1. I use to have the same bias towards Japanese cars, but I just don’t think it holds true anymore. They have had to cut corners to remain competative, but still charge a bit of a premium based on their past quality. They’re still great cars, but I wouldn’t rule out domestic (Have caught back up again) or Korean (the new Japanese) so quickly. German cars are great too, but too expensive for what you get, especially when it comes time to service.

Much better to go to a car review site like USNEWS (which aggregates reviews from other sites) to determine which cars ranked well in the class you’re looking for. Any in the top 5 or 10 are usually pretty good. Go test drive most of them. Don’t get fixated on one particular car, rather wait for a good deal on one of your top 3 or 4. As you suggested you can usually get a 3 or 4 year old car with low milage for cheap compared to new. Buy from a private owner if you can find one selling such a car.

The final piece of advice is consider which dealer you’re taking it to for service. Ask around and find out if the local Honda/Toyota/Ford/etc dealer is good or if it’s run by a bunch of crooks. That can make a huge difference. It’s also nice to have one close to home, but that’s more of a tie breaker.

#148 Mf on 08.18.15 at 11:11 am

Cpd still dropping like a rock. Rough. With renewed rates at 4% ish this thing really isn’t attractive to me at all. Anyone think cpd will actually recover?

Mf

#149 Rainclouds on 08.18.15 at 11:29 am

#75 American

“Yippy Ki Yay Mother F#cker”……………

https://www.youtube.com/watch?v=BjrR_AX76-M

#150 Steerage Bilge on 08.18.15 at 11:37 am

#139 Nora Lenderby on 08.18.15 at 10:09 am

Ah, Mr T. you have disturbed the wasp’s nest of True Canadian values* with your jibe at the man who fixes his own brakes. (Anyway, as you may realise, far more drivers are killed by mobile phones than faulty brakes.)

I am an advocate for do-it-yourself work when you can and if you must. It leads to self-reliance and self-confidence (sometimes a little too much, but that’s another story).

You have huge expertise in your area (finance, public affairs, being sardonic about the foibles of humanity) but there is fun, money saving, and satisfaction in doing some things for oneself.

*Self-reliance, squeezing nickels, complaining.

Your self-satisfaction is not equal to jeopardizing the safety of others. Amateur mechanics are a scourge. Take up watercolours instead. — Garth
———————————————–
True for many for sure. But there are thousands upon thousands of us DIYers out there that can fix anything…. Self reliance.

#151 Leo Trollstoy on 08.18.15 at 11:47 am

#135 LH on 08.18.15 at 9:55 am

Reminds me of a joke.

How can you tell if someone is a parent?

They’ll tell you!

#152 Smartalox on 08.18.15 at 11:50 am

Fixing your own brakes will void your insurance?!?

I can’t tell you how much money i’ve saved, and fun i’ve had fixing my own vehicles. Bikes, boats, cars, whatever. There are times when I recognize that I don’t have the time or skills or tools to do a job myself, and take my baby to a trusted, old-school mechanic, but for the most part, my wife understands my late night internet addictions, and the gleam I get in my eye when i’m ready to do filthy, filthy things to my 26-year old German model.

#153 Ponzius Pilatus on 08.18.15 at 11:53 am

Jim Pattison used to do his own car repair (he’s too old now) rather than take it to one of dealerships.

#154 Daisy Mae on 08.18.15 at 11:55 am

Wow, $4.42 (divided by 365 days) spent at Tim Hortons = $1600.00?

#155 NoName on 08.18.15 at 11:58 am

My take on used cars and car maintenance

1.
Buy consumer report magazine and pick cars that rated better than average that you like. No need for V6 or v8 now days unless you are wealthy, i4 and 6spd auto or cvt works just fine. So if parking is not an issue buy midsize vs compact.
2.
Unless you are buying a used car from person that you or your friends know, private vs dealer sale makes no big difference, private sale will make to depart with your money on a spot, dealer can finance used car around 2-2.5% for 36-48m. Have a bridge insurance just in case if car gets totaled!
3.
Dealer service record are sham., everyone is complaining how dealer are doing lousy job but very same people ask for the records anyways. figure that one out.
(once I took my old honad to dealership to fix dent on the door, next dat I went there to take car seats out that told me that car was being repaired fodr dealership one city over, that was funny!)
4.
Our both cars had an one small accident, recorded!, both cars have great millage, look good and drive strait, some minor cosmetic issues on both cars, but that doesn’t meant that car is neglected and not good. No accident record doesn’t mean that car was not involved in one.
5.
Always put synthetic oil and premium oil filter (I use filter that brand is German and starts with B good for 12k milles), oil 1st choice one that start with Q, 2nd one that starts with M and have number one at the end. look at a flyers once in a while.
I drive min 12k on oil change and but not more 15k. 5k oil change is money grab !!!
5a.
Transmission flush not before 100k, if you are buying used car around that milage ask dealer for transmission flush make sure to see flush with you eyes, have safety boots and safety glasses ready and don’t take no for an answer, if they tell you that you cant go to garage to see it.
6.
if you drive a lot change cabin filter as often as you can.
7.
Hit a car repair forums to find common problems with model that you like!
8.
Buying a used car boils down to the luck.

#156 John on 08.18.15 at 12:04 pm

Would be nice to have this kind of posts somewhere easy accessible on the website, like a menu on the right, like there are “Garth’s recent postings”. Any advise here on greaterfool, that has to do with investments is golden. I think it would be very nice to have them fast accessible. I know I would greatly appreciate it!

#157 Pre-Retiree on 08.18.15 at 12:06 pm

To #40 Josh in Calgary:

Truer words have not been spoken.
I have been sold on the idea of buying used high-quality cars with low mileage for years now. But somehow not everyone can see the truth in what you say. Let the others buy the depreciation, literally as they drive off the lot, as you say.

#158 MF on 08.18.15 at 12:23 pm

#88 jane 24 on 08.17.15 at 11:02 pm

Just because it worked out well for you doesn’t mean it’s the same situation for everyone.

There are lots of kids born into families that can’t provide properly for them.

There are also lots of folks in their 60’s whose kids are not close with them at all. Worse a lot of these kids are just waiting for them to pass on so they can get the inheritance.

Having kids is a personal choice, religious reasons aside. Like Garth said, there is 7 billion of us on the planet and it’s debatable whether we need or can handle more. One thing is for sure, we don’t need manual labour like we used to and we live longer lives.

I see it a lot at my workplace. Families come in, kids are obnoxious and unruly, and the parents try to justify it all by saying how much joy the kids are. My female co workers who are late 20’s early 30’s without kids constantly feel pressured by these types. It’s laughable because watching these obnoxious kids and stressed parents pushes them further away from the whole things. For you to say that it’s those that have kids are happy (whatever age) and those that do not are miserable is flat out wrong.

MF

#159 Nora Lenderby on 08.18.15 at 12:29 pm

#139 Nora Lenderby on 08.18.15 at 10:09 am
“Ah, Mr T. you have disturbed the wasp’s nest of True Canadian values* with your jibe at the man who fixes his own brakes….”
Your self-satisfaction is not equal to jeopardizing the safety of others. Amateur mechanics are a scourge. Take up watercolours instead. — Garth

It is more efficient in economic theory (I’m told) if everyone specializes in their own business and pays others for services that they need. If we all choose to perform all our own services, there would be no economy and we would probably be living in mud huts and fearing the return of a warlord.

It is about judgement of ones own individual abilities, the potential supplier’s abilities and the costs (including time and risks) and benefits (including alternative means of spending time).

This Robert Heinlein quote, I like (although some of his opinions were, frankly, silly):

“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”

Perhaps the problem is knowing ones limitations? I know I’m a pompous git with much to be humble about but I do strive to improve :-)

#160 family beagle on 08.18.15 at 12:29 pm

“Your self-satisfaction is not equal to jeopardizing the safety of others. Amateur mechanics are a scourge. Take up watercolours instead. — Garth”

As an actual artist commissioned by business, agencies and institutions to produce artworks for publication, I’ll have you know that you’re dismissing the hazards of amateurs in fine art with a disturbingly cavalier attitude, Mr. Turner. At best, your protoge will confine their offense to craft sales and flea markets, leaving the arena of cadence and tone to the guild. Tsk, tsk. Snoot. Tsk.

Ps. Mr. Turner, any stats on deaths by backyard mechanic vs factory recalls? Methinks, airbag mishaps offed more souls than all the nut wrenching Biff and Larrys combined, ever. In the auto industry, deaths per ‘000s is a line on a spreadsheet. Didn’t Italian sports cars just set the new standard for mall parking lot fires? Those rattling death traps should be governed, banned, and sunk at sea.

#161 MF on 08.18.15 at 12:33 pm

#135 LH on 08.18.15 at 9:55 am

Yeah right. Most of us want kids. But when working jobs that are low paying, insecure, and with zero pension and retirement savings you recommend we just go ahead and have multiple children? What about the quality of life these kids might get?

From longer school, to longer time finding viable employment, to longer time buying a home and starting life, most of us have no choice but to think about the idea.

Lol as for this idea that education is worthless here. Ignore smoking man’s posts and realize the reality is you are royally screwed without some secondary education at least. What we got wrong was the fact we thought it was a guarantee route to a good job (actually we were told it was).

MF

MF

#162 Lea on 08.18.15 at 12:35 pm

#109 Victoria

You are right, the same irrational exuberance that creates a real estate bubble also causes credit hubris. Add on to your home, sell, buy a larger home, larger tv, minivan and vacation. No problem as long as housing prices rise and you can refinance at a low interest rate.

House value decreases, interest rates rise, can’t make payments. You have to sell quickly if you hope to save any of your equity. This is what happens with regular credit, the sub-prime folks walk away with nothing. Glut of properties on the market causes a crash of price. It is fast and ugly.

#163 MF on 08.18.15 at 12:36 pm

#150 Leo Trollstoy on 08.18.15 at 11:47 am

LOL exactly.

MF

#164 BUY MY VOTE on 08.18.15 at 12:46 pm

Shame on you Garth!

Sounds like you are pumping LOC’s for the bank!

Encouraging anybody but the most disciplined person to access credit is like offering a drink to a recovering alcoholic.

You know that 80% of the people who take your advice are going to waste it on something like a home reno or a new car or vacation!

I offer sound advice, not brain transplants. — Garth

#165 Rosie on 08.18.15 at 1:13 pm

Not using cash to buy a car was an eye opener. I always thought I was smart by doing so. But we could use the dealership low rates to finance one – even though we have the cash – and invest our money to make more. Why didn’t I think of this? I wished I’d read this column years ago!

#166 victory on 08.18.15 at 1:35 pm

Re: comment #78 – typical narcissistic attitude, thinking that everyone loves the narcissist. Want to know the only character who missed Narcissus after he drowned in the original myth? The Echo.

#167 gut check on 08.18.15 at 1:42 pm

direct connection bewteen Harper and an ISIS recruiter (his former chief of security who was hand picked by Harper to be the ambassador to turey)

https://www.youtube.com/watch?v=IlDDpt65Tuo&feature=youtu.be

You’d think more of this would have been on the news, but it got buried pretty fast. I’m posting in case you missed it the first time.

#168 Nora Lenderby on 08.18.15 at 1:49 pm

#159 family beagle on 08.18.15 at 12:29 pm
As an actual artist commissioned by business, agencies and institutions to produce artworks for publication, I’ll have you know that you’re dismissing the hazards of amateurs in fine art with a disturbingly cavalier attitude, Mr. Turner. At best, your protoge will confine their offense to craft sales and flea markets, leaving the arena of cadence and tone to the guild. Tsk, tsk. Snoot. Tsk.

Oh jeez, now you’ve upset the artists. You should have said needlepoint, Mr. T.

Ps. Mr. Turner, any stats on deaths by backyard mechanic vs factory recalls? Methinks, airbag mishaps offed more souls than all the nut wrenching Biff and Larrys combined, ever. In the auto industry, deaths per ‘000s is a line on a spreadsheet. Didn’t Italian sports cars just set the new standard for mall parking lot fires? Those rattling death traps should be governed, banned, and sunk at sea.

The problem isn’t the actual car, it’s usually between the steering wheel and the pedals. I’m in favour of public transportation and self-driving cars…

#169 Republic_of_Western_Canada on 08.18.15 at 1:53 pm

Your self-satisfaction is not equal to jeopardizing the safety of others. Amateur mechanics are a scourge. Take up watercolours instead. — Garth

Normally I wouldn’t waste my valuable coffee time responding to such bilge, but you do a serious disservice to both individuals and society at large with that attitude.

Mechanical competence, especially for something as simple as the majority of car and truck systems, is a cornerstone of healthy existence in this society. Just like financial competence, physical health, and overall mental discipline.

Failure to become competent in those things leads to obesity, the twisted indebtedness you’ve been harping on for years, and a general helplessness and societal decay now most evident in southern ontario and the lower mainland.

Part of mechanical competance is caring enough and getting training and experience enough to do the job. Used to be, the average 12-year-old farm kid knew enough to do basic vehicle maintenance like oil changes, fanbelt and pulley replacements, air and gasline filter and sparkplug changes, paint touchups, rad hoses, muffler replacements (even running a decent single bead on mild steel with a welding machine) on common vehicles and diesel equipment. By 16 he’s doing timing adjustments, shock and brake pad replacements, and carb adjustments. By 18, he’s pulling engines. And he’s also studying matric. courses nights and on the school bus like everybody else.

Discouraging that build of knowledge is incomprehensible. Everyone should have some kind of professional trade early in life, in addition to whatever CFA or engineering or management or pharmacology education he decides to chase. Failure to do so leads to a very warped view of the world with little appreciation of physical realities. The same applies to awareness of and competence with firearms, even.

Being mechanical and being a dick are, I see, not mutually exclusive. Thanks for clearing that up. – Garth

#170 IHCTD9 on 08.18.15 at 1:59 pm

#154 NoName on 08.18.15 at 11:58 am
My take on used cars and car maintenance

8. Buying a used car boils down to the luck.
____________________________________________

Depends how much you know. My current beater is a ’99 SAAB 9-3, the only year you could get both the bombproof SAAB H Block engine in the updated 9-3 chassis. In 2000 you got the ECOTEC from GM.

I bought this car 3 years ago from a Doctor in Toronto who bought it new. It would not run at times, and his mechanic was burning through the good Dr.’s cash trying to figure out what the problem was to no avail. He told me what was going on, and I figured I’d take a gamble on it. The car had 130K on it, a brand new clutch, 4 brand new Michelin tires came with it, and it looked like new inside and out. I paid the Dr. 1300.00 for it as is.

I figured it was the fuel pump, I was right. A drop in FP assembly was $700.00 from GM/SAAB. I bought a 99.00 generic Walbro, and fit it into the SAAB Canister myself. Works good to this day.

Don’t say I was lucky I was right about the fuel pump, it was original, and the source of many oddball problems many mechanics can’t figure out. I’ve been doing this for a long time. If I was wrong about the FP – I still would have figured it out anyway.

I then did the brakes all around (horrors!), and have not done anything else since. I’m 3 years in with an on the road price of about 1500.00.

This was knowledge not luck, and I could tell you stories about other guys I know getting perfectly good vehicles for peanuts just because they know some very esoteric information about engines and computers.

#171 bdy sktrn on 08.18.15 at 2:02 pm

Ps. Mr. Turner, any stats on deaths by backyard mechanic vs factory recalls? Methinks, airbag mishaps offed more souls than all the nut wrenching Biff and Larrys combined, ever.
——————————–
ever see a ‘real’ mech use a torque wrench?

thought so.
most of them couldn’t spell nor properly define torque.

a very few do , but most are the eq of the [email protected] with regard to investing.

#172 bdy sktrn on 08.18.15 at 2:10 pm

The car had 130K on it, a brand new clutch, 4 brand new Michelin tires came with it, and it looked like new inside and out. I paid the Dr. 1300.00 for it as is.
————————-
sweet! yes , smart, not luck.

good for you, you scourge!

how dare you not be a helpless victim begging your dealership to ream you out for a filter change.

#173 Ronaldo on 08.18.15 at 2:31 pm

#102 Investx on 08.18.15 at 12:16 am
#66 kommykim:
RE: #20 name dropping on 08.17.15 at 7:00 pm
Let’s drop some current sexy ETF names/tickers to Christina.

ZLB, VXC & VSB
——————–

Hmmmm…the first two have yields less than 2%, hardly better than some savings accounts. The third is just over 2%.
Surely there are ET
Fs that yield more with the same low risk?
——————————————————————-
XTR trading near its 52 week low…..6.36%

#174 Rana on 08.18.15 at 2:36 pm

more babies, thats what we need….they also fix relationships.

#175 Nora Lenderby on 08.18.15 at 2:49 pm

#167 Republic_of_Western_Canada on 08.18.15 at 1:53 pm
“Normally I wouldn’t waste my valuable coffee time responding to such bilge, but you do a serious disservice to both individuals and society at large with that attitude.”

Being mechanical and being a dick are, I see, not mutually exclusive. Thanks for clearing that up. – Garth

Gentlemen! Please!

But who knew that there was such a large area of agreement between me (the proverbial soft-hearted, soft-headed, feminist, pinko), and Mr. ROWC (notorious for his gruff manly Canadian ways)?

Vive la différence!

#176 Axehead on 08.18.15 at 2:53 pm

Some additional clarification regarding cars (sorry Garth, I know this is an investment blog … but a car is a ‘bad’ investment everyone should carefully consider):

Maintenance: If you can afford a car, you should be able to budget for professional maintenance for safety and reliability reasons. Research the garage and make sure they are competent and have good ratings by customers. Save DIY stuff for cosmetics and simple maintenance items. Extra: I always use full synthetics and OEM parts and can brag about that to the next owner and demand a good price, besides being more confident regarding reliability.

Service records: besides the vehicle manufacturer/model, the most important factor regarding reliability is the maintenance of the vehicle. Was service done by a professional or DIY? Was proper oil/filters/other parts used? Was it serviced as per manufacturer requirements? Were all recalls installed? In essence, did the previous owner ‘cheap out’. Records are one good way to get an idea of what was done or not done.

What car to buy? My bias is towards Japanese but specifically Honda/Toyota and their performance/luxury cousins Acura/Lexus but also consider Subaru. The other Japanese (Mazda, Nissan, Suzuki) have quality ratings that I would place at same level of domestics. That said, there are models within those manufacturers that vary in quality. Do your research and read online reviews from real drivers – they will freely and openly share when they have been ‘burned’ by a crappy car. IMO: German:be prepared for fuel pump and electrical problems after 3 years and good luck with parts/dealer. Domestic: trucks good, Chrysler the worst, Ford better than most, GM just OK unless you go high end/luxury. Korean: they are OK but I don’t buy all the quality rhetoric, real life shows otherwise after 5 years of use, and besides they are weird looking and everybody’s grandmother drives one, and Garth consistantly makes fun of them.

Buying used or from owner is Luck? Really?…unless you buy a reliable manufacturer/model that doesn’t depend on the warrenty, buting a new car from a dealer is a crap shoot as well. Go ahead and buy the cheap Chrysler minivan and say hello to the shop when the transmission fails at 60k or go ahead and buy that cute VW Cabriolet and watch the fuel pump give up the ghost or buy that Mercedes SUV (older, so it’s on the dealer ‘death row’ er pre-owned lot and learn that it was really built by Chrysler and brakes need replacing every 20k. It’s research and learning from others that matters, not luck.

#177 jess on 08.18.15 at 2:54 pm

re:
Why is Joe Oliver seeking economic advice from a scandal-plagued corporate honcho?
By Bruce Livesey in News | August 17th 2015

Good question! Reading that made me all itchy and scratchy.

#178 bdy sktrn on 08.18.15 at 3:16 pm

Maintenance: If you can afford a car, you should be able to budget for professional maintenance
——————–
or learn that bolts go in clockwise and , amazingly, come out counterclockwise.

had a guy come to tow a 5th wheel last week, with his new tires put on by a big name ‘professional’ shop, on the way over he was towing a 30 footer when one of his new ‘pro’ installed wheels comes off at 100km/h.

the only benefit for him was he got new rims from them
for nearly free.

DIY’ers remember to tighten wheel bolts!

#179 Smoking Man on 08.18.15 at 3:20 pm

#160 MF on 08.18.15 at 12:33 pm
#135 LH on 08.18.15 at 9:55 am

Yeah right. Most of us want kids. But when working jobs that are low paying, insecure, and with zero pension and retirement savings you recommend we just go ahead and have multiple children? What about the quality of life these kids might get?

From longer school, to longer time finding viable employment, to longer time buying a home and starting life, most of us have no choice but to think about the idea.

Lol as for this idea that education is worthless here. Ignore smoking man’s posts and realize the reality is you are royally screwed without some secondary education at least. What we got wrong was the fact we thought it was a guarantee route to a good job (actually we were told it was).

MF

MF
……
Post secondary education is a Rediculos waste of money now that everything is free on google.

Yesterday I was trying to pick off a deal. The moron thought I was applying for a job and made me wait 15 fking minutes…

The respeptionist was confused too. I was there to offer my consulting services, save them a fortune with an alternative to Python.

The manager finaly shows up.. I went in to his office. Sat down and said nothing. Let him do his alpha kiss my ring show.

I said, you wasted 15 minutes of my valuable time, can’t you read a simple email. I’m not here for a job. I was going to show you how to save a fortune. But I have another appointment with someone that can read email and manage his time. Then stormed out.

He’s emailed me 3 times wanting to re schedule. Screw him now.

In the mean time, I need Senica loot with out touching my reserves and books

Went out yesterday afternoon, sold 2 of my auto shop productivity tools and two today. At discount mind you, been in a good mood lately.

6500 with a total 6 hour effort, not bad for a high schooler… Not even adding in the monthly support fees.

#180 Smoking Man on 08.18.15 at 3:26 pm

Oh, and made the sales wearing shorts and flip flops…

I’M ampped bastards…I dont need to loot, but that need to hunt and kill what you eat is on my blood.

It’s more of a sport now.

#181 jess on 08.18.15 at 3:31 pm

…”An SEC investigation found that the Citigroup affiliates made false and misleading representations to investors in the ASTA/MAT fund and the Falcon fund, which collectively raised nearly $3 billion in capital from approximately 4,000 investors before collapsing. In talking with investors, they did not disclose the very real risks of the funds. Even as the funds began to collapse and CAI accepted nearly $110 million in additional investments, the Citigroup affiliates did not disclose the dire condition of the funds and continued to assure investors that they were low-risk, well-capitalized investments with adequate liquidity. Many of the misleading representations made by Citigroup employees were at odds with disclosures made in marketing documents and written materials provided to investors.

“Firms cannot insulate themselves from liability for their employees’ misrepresentations by invoking the fine print contained in written disclosures,” said Andrew Ceresney, Director of the SEC’s Enforcement Division. “Advisers at these Citigroup affiliates were supposed to be looking out for investors’ best interests, but falsely assured them they were making safe investments even when the funds were on the brink of disaster.” http://www.sec.gov/news/pressrelease/2015-168.html

=

http://www.breakingnews.ie/business/revenue-can-check-credit-card-spending-to-catch-tax-evasion-691140.html
============================
Good Jobs First today lauded the Governmental Accounting Standards Board (GASB) for the issuance of its first-ever rule requiring state and local governments to report how much revenue they lose to corporate tax breaks given for economic development.
Good Jobs First executive director Greg LeRoy. “We have long criticized GASB for being MIA on corporate welfare; now the debate will turn to implementation of this landmark accounting rule.”

States and cities spend an estimated $70 billion a year for economic development, most of it through tax expenditures. But we could only estimate because GASB has never before called for standardized reporting,” explained LeRoy. “That’s the historic value of this new standard: taxpayers and policymakers will finally see the true price tag for economic development.”…
http://www.taxjustice.net/2015/08/17/tracking-corporate-tax-breaks-a-welcome-new-form-of-transparency-emerges-in-the-u-s/

Tracking corporate tax breaks: a welcome new form of transparency emerges in the U.S. (19 Aug 2015)

#182 OttawaMike on 08.18.15 at 3:41 pm

167 Republic_of_Western_Canada on 08.18.15 at 1:53 pm
173 Nora Lenderby on 08.18.15 at 2:49 pm

I have to agree with this ROWC dick head this one time. He said it right.

#183 Lillooet, BC on 08.18.15 at 3:45 pm

Greater fool Christina:
Look no further. Garth T is one of the best financial advisor. Hire him!

or moving to Lillooet BC!
Shaw is on the way …

#184 OttawaMike on 08.18.15 at 3:50 pm

#168 IHCTD9 on 08.18.15 at 1:59 pm

Me to. Have saved thousands over my nearly 40 years of driving.
I do have some advanced technical skills that allow me to select the right vehicles at the right price. I farm out much of the larger work now as I get older but still pay very little towards vehicle ownership.

Mr. Turner has a degree in English Lit., does anybody seriously think he has ever worked on his own machines?
We do what we are good at, qualified for and enjoy.

#185 kommykim on 08.18.15 at 4:08 pm

RE:#102 Investx on 08.18.15 at 12:16 am #66 kommykim: RE: #20 name dropping on 08.17.15 at 7:00 pm Let’s drop some current sexy ETF names/tickers to Christina. ZLB, VXC & VSB ——————– Hmmmm…the first two have yields less than 2%, hardly better than some savings accounts. The third is just over 2%. Surely there are ETFs that yield more with the same low risk?

Ever heard of capital gains?

#186 Rexx Rock on 08.18.15 at 4:36 pm

Like Vancouver and Toronto ,Victoria real estate was like the lottery.You know $1000 a week for life.Why do you see so many smiling faces because the central bank wants everyone to make money the easy way.Good times baby!!!

#187 SWL1976 on 08.18.15 at 4:39 pm

#165 gut check

direct connection bewteen Harper and an ISIS recruiter

Great link posted by Nosty the other day as well. Sad but true tales of our ‘leadership’

Unfortunately it will not get any big media coverage and most of the sheep will dismiss it as they are just not ready to accept how messed up things really are.

Most will simply find it easier to look the other way and get back to their regularly scheduled programming.

MF this quote is for you

“The most erroneous assumption is to the effect that the aim of public education is to fill the young of the species with knowledge and awaken their intelligence, and so make them fit to discharge the duties of citizenship in an enlightened and independent manner. Nothing could be further from the truth. The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to put down dissent and originality. That is its aim in the United States, whatever the pretensions of politicians, pedagogues and other such mountebanks, and that is its aim everywhere else.” – H.L. Mencken

I want to chime in on the auto repair as I am a human wrench but I will leave it alone.

ROWC I was that 12 year old kid

#188 GrannyAnnie on 08.18.15 at 4:48 pm

Couldn’t resist adding to the fuel/discussion about car maintenance and all round “life know how” vs specialization. The Germans (much admired here) have a word for it – Fachidiot – someone who is excellent in his very narrow field of specialization, but not very knowledgeable beyond that. And there are a lot of them in Germany, esp at universities. The term, incidentally, is uses derogatively.

#189 The Truth Always Wins on 08.18.15 at 4:48 pm

Finally…Obama’s biggest cash donor is getting a taste of his own medicine. Tom Steyer has funded native groups, green blob wack jobs in groups of three, aged out of touch rock stars, documentary producers and fringe loons of all kinds to attack Canada’s energy industry by tying our own legal system up in knots and using our democratic principles against us. Steyer alone has cost Canada hundreds of billions in tax revenue by persuading greedy greens to front for him in the courts and protest parties. All so his own interests in energy could advance.

http://business.financialpost.com/news/energy/big-oils-shadow-war-on-hedge-fund-founder-turned-activist-tom-steyer-they-are-going-to-dirty-him-up

What Canadians have had to face for years…but get no where because of a complacent media of elite unions and civil servants fighting against progress more because they Hate Harper rather than understanding the issues.

http://www.albertaoilmagazine.com/2014/07/vivian-krause-great-green-trade-barrier/

#190 Leo Trollstoy on 08.18.15 at 5:12 pm

I know people who are proud that they can save a few bucks fixing their cars but can’t fix their relationship with their spouse or kids.

Go figure.

Priorities I guess.

#191 JSS on 08.18.15 at 5:22 pm

#160 MF on 08.18.15 at 12:33 pm
#135 LH on 08.18.15 at 9:55 am

Yeah right. Most of us want kids. But when working jobs that are low paying, insecure, and with zero pension and retirement savings you recommend we just go ahead and have multiple children? What about the quality of life these kids might get?

———–

What quality of life these kids might get???

The same quality of life kids got 30-40 years ago:
– 1,250 square foot house, detached garage
– Basement complete with 4th bedroom, 3 piece bathroom, wet bar, rec room with a woodstove and a dart board
– Used bicycles for kids
– 1 TV (in the living room)
– Dining room used for homework
– Take em to the park nearby to play
– Have kids get summer jobs to part-pay their tuition
– Send kids to trades school or applied university degrees, instead of useless degrees

Are you not going to have kids because of fear of losing a job? Get used to the fact that a job is not guaranteed for life.

Scared of not having enough money in old age? Read this blog for tips.

Scared of multiple children? Have only one kid.

There is simply no price to having children. Best thing that ever happened to me. I’d give my life for them.

#192 Bytor the Snow Dog on 08.18.15 at 5:23 pm

@168 IHTCD9-

Enough of your SAAB stories!

#193 Bytor the Snow Dog on 08.18.15 at 5:26 pm

Horrid software. That is all.

#194 Dean on 08.18.15 at 5:35 pm

Dear Mr Turner,

I am deeply offended by both the language and tone of this most recent comments section.

Steerage, scourge, and dick are not what I expect to be called when displaying the ingenuity to replace the tie rod ends on my Pontiac Aztec.

I much prefer, knuckle dragging troglodyte, mouth breather and Hillbilly.

Please cancel my subscription.

#195 Steerage Bilge on 08.18.15 at 5:47 pm

#188 Leo Trollstoy on 08.18.15 at 5:12 pm

I know people who are proud that they can save a few bucks fixing their cars but can’t fix their relationship with their spouse or kids.

Go figure.

Priorities I guess.
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If you only do it to save some $.. then quite possible, but if yeah do it for self reliance, satisfaction, craftsmanship, pure joy.. then yer probably a stellar spouse, parent and rolling in dough as a side-effect.

#196 bdy sktn on 08.18.15 at 6:16 pm

You drive an aztec?

All of those words are too good for you!

We’ll at least I have someone to look down at while driving around in an 07 cavalier!

#197 Bytor the Snow Dog on 08.18.15 at 6:35 pm

Have I been “deleted”? I’m hurt.

#198 Nagraj on 08.18.15 at 6:55 pm

odds & ends

“git” as used by Nora Lenderby is a Britishism roughly comparable to “stupid bastard”

“Biff and Larry” as used by one commenter: would that be from “Death of a Salesman”?

“Fachidiot” noted by GrannyAnnie, defies simple translation, how about “one note Johnny”?

“troglodyte” is a fancy way of saying “cave man”

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The internal combustion engine is the root of all evil. With electricity a close second.

#199 Vangrrl on 08.19.15 at 3:42 am

#88 Jane:
That was a typical condescending comment, as if you can judge whether your life is more fulfilling than another person’s based on such important personal choices as whether to have children or not. I encourage you to read this: http://www.salon.com/2015/05/08/sorry_about_mothers_day_my_childfree_girlfriends_moms_arent_any_more_special_or_unselfish_than_you/

Luckily I have friends like the woman who wrote this article. Too bad you aren’t that person to your child free friends, rather than being unable to see what makes them happy!

#200 Larry1 on 08.19.15 at 4:50 pm

Take it out in hunks of $5,000 or less to minimize the withholding tax.

That makes sense if your discount brokerage doesn’t charge transaction fee for each “chunk.” (are there any that don’t?) Generally you’ll get part of the money back come tax return, so you could do it at the end of the year and give the Gov less of a tax free loan.