Nine lives

FLU modified

Maria and her husband are kidless with two cats and a small townhouse. “We’re DINKs,” she says, “and that’s the way it’ll stay.” True, I guess at 45 years old. So now they’re focused on what happens in retirement. At least Maria is. “My husband thinks investments are baloney,” she explains. “His whole strategy is just to live below your means. And hope.”

When you’re a worried, middle-aged, suburban cat-owning working woman needing to cattle-prod hubs into action, who ya gonna call?

“So, Garth, our townhouse is freehold and mortgage-free – yippee! – and we bring in $120k.  Thankfully, the only major debt we currently have is less than $15K.  We have about $110K in a regular investment account and $40K in RRSPs between the two of us; no TFSAs.  All our funds are in a ‘medium-to-high risk, growth with capital preservation’ fund that includes 36% domestic equities, 35% domestic fixed, 18.5% foreign equities, 7% foreign fixed and 3.5% cash/cash equivalents.

It’s taken us while to save – layoffs from previous jobs slowed us down; thankfully, I’ve missed the ‘chopping block’ numerous times (perhaps I have nine lives like my cats).

We have thought about selling our townhouse and then investing what we come out clean with (I’m guessing $400k), but then we’d be back to paying $1,500 for renting anything decent (and having to deal with landlords).  My husband has entertained the thought of purchasing either residential or commercial properties and then renting them out, but my stomach churns at the thought of that.  Increasing monthly contributions to our existing investments will help, but again, you can still lose or gain – no guarantees.

According to your Rule of 90 (90 – 45 = 45% allocated to real estate), seems we’re too heavy on the home equity.  Do you have any suggestions for improvement?  Our situation isn’t complex and we’re not wealthy, but I think we need your ideas or recommendations for improvement.”

How typical are Maria & her squeeze? They have $135,000 in liquid net worth and $400,000 in real estate equity, for a total of $535,000 – of which the house accounts for almost 75%. She also tells me their pensions are minimal, and according to our new GenX PM, they’re solidly ‘middle class’ in terms of income. That means they might save a thousand in income tax next year after the new budget passes, but will eventually lose it all to increased CPP premiums.

In short, they’re emblematic of most people. In fact, maybe better. The surveys and polls tell us half of Canadians could not survive one missed paycheque, that a third retire with mortgages and a majority would be moderately or severely screwed if their loan payments swelled by $500 a month. The bulk of that financial risk is self-inflicted because, like Maria and her beast, most net worth has been shoveled into a single, sometimes-illiquid, asset.

What are they doing wrong?

First, the portfolio. It sucks, is expensive, and tax-inefficient. There’s no justification for putting all of your liquid wealth into mutual funds. A single fund cannot provide enough diversification or balance, no matter what [email protected] tells you. Moreover, bank clients never actually get holistic advice, since they deal with a commission-driven salesguy, not an advisor. Funds usually trigger capital distributions which can burden you with unexpected tax. And lastly, they cost too damn much. A typical balanced fund can sting with a fee of 2% – twice what you’d pay to a fee-based advisor to build a customized portfolio – and it’s not even tax-deductible, the way an advisor’s charge is.

Second, Maria, this fund sounds like a loser. Having 36% of your equity in maple and just 18% in US and international is the mirror opposite of a proper allocation, given the state of things. You have no real estate investments trusts, which are steady income-earners and not correlated to the stock market. No preferred shares with their juicy 5% yields, either. I’m sure the returns from this have been abysmal, since even after the TSX recovery of late the Canadian market’s in negative numbers for the past year. You’re far better off getting into low-cost ETFs with the kind of balance and diversification this pathetic blog has yammered on about for years. It works.

And what’s this no-TFSA thing? You and Hunk have more than $80,000 in contribution room between you – enough to suck up the bulk of your non-registered investment account. Why on earth would you maintain a taxed portfolio when you can turn it into a taxless one? Do it, now. Before the kid starts mucking around with the rules.

As for the house, try to separate emotion from logic. A small townhouse in a distant GTA burb is not the same as a detached property within the Kingdom of 416. There could be zero capital gains in the future, especially since your area’s bristling with new construction, which is what the bulk of buyers want.

So the $400,000 in equity is costing you more than $25,000 a year in opportunity cost (money it could be earning if invested correctly), plus property tax, insurance and maintenance. All-in, that little townhouse sucks almost $3,000 a month – or double the expense of renting. So how, exactly, does it make any financial sense, given your age and the composition of your net worth, not to sell at the market peak?

If that $535,000 were all liberated, invested, managed for tax avoidance, cared for over the years – and gave you the same market performance as during the last stormy decade – you’d have over $1 million by your mid-fifties and two million by age 65. A 7% return on that in retirement would yield income of $140,000 for the rest of your life, and keep most of the principle intact for your cats’ inheritance.

Or, you could stay in the townhouse, make 2% net on your funds and retire with about $230,000, possibly running out of money in five years. If hubs thinks it’s cool to live cheap, he’ll love that.

Good luck with the marriage.

219 comments ↓

#1 TurnerNation on 10.25.15 at 1:28 pm

Blog dogs are never sleeping.

I’m enjoying abnormal excess returns or is it excess abnormal returns?

#2 TurnerNation on 10.25.15 at 1:34 pm

If you own a detached SFH in Leslieville or Riverdale areas of Toronto you are a millionaire!
Search for this, exclude the few units under 900k, and the remaining are 900k+
Add a bidding war and there’s a cool mil.

But to put 5.5k in TFSA into the “stock market” is risssky right?
Ask most an they’ll say ‘I wish I knew more about stocks”. There’s no balanced ports. in their world, only everyone buying into a house.

‘Millionaire’ homeowners are only millionaires when they sell. — Garth

#3 ALBERTASTROPHE on 10.25.15 at 1:40 pm

The death knell for Alberta’s tarsands is less than two months away, at the Paris summit.

More evidence today that we are heading towards cataclysmic social upheaval due to climate change, within as little as about 15 years says this expert.

http://www.thestar.com/news/world/2015/10/25/why-400-us-cities-will-one-day-be-under-water.html?utm_medium=twitter&utm_source=twitterfeed

Whatever happens, we will not be turning back to the Harper era of wilful blindness.

Alberta must adapt, or wither.

Albertans will be very lucky if their homes only decline by about 50% in value over the next two to three years.

It could be much worse.

#4 DB on 10.25.15 at 1:44 pm

“By now we should recognize that failed experimental monetary management was the leading culprit in the so-called “worst financial crisis since the Great Depression.” So what’s at risk today from much more egregious monetary experimentation? With runaway Bubbles at risk or faltering around the globe, central bankers are left with a choice of pushing ever forward with monetary inflation and market manipulation – or coming clean. Clearly they believe they have no choice at all.”

Hobson’s Choice

http://creditbubblebulletin.blogspot.ca/2015/10/weekly-commentary-hobsons-choice.html

#5 Fuzzy Camel on 10.25.15 at 1:47 pm

The people buying homes right now look at one thing, can they make the monthly payments? So as interest rates drop, the monthly payment stays the same, but the quantity of money they can borrow increases. Voila, you now understand why real estate prices are going up.

With interest rates at 0.5%, 0% is the lowest it can go, we know the maximum profit of buying a home right now is the spread of 0.5% if rates go to 0%. So buying right now is almost certainly a bad idea, because once we hit 0% interest rates, and we slide into recession, the BoC is out of ammo and the ponzi scheme collapses.

This process might take 1-2 years, but at some point the ability of the general public to absorb debt will be hit.

#6 SamIam on 10.25.15 at 2:02 pm

Given the topsy turvey markets ahead – they would be well advised to preserve their home and just gamble whatever they save in whatever “balanced chips” their adviser persuades them to – no point loosing your shirt at this stage of life

Why would anyone ‘lose their shirt’? The cost of the house is a greater financial drag, and running out of money is the primary risk this couple faces. — Garth

#7 Lalaland on 10.25.15 at 2:12 pm

#5 fuzzy camel

You forgot negative interest rates. Also they can raise the mortgage to 40 years… 50 years…. 60 years.

The minute there is a tiny downturn you will see these things happen… And real estate will continue going up up up while the monthly payment stays the same

You think it’s crazy? 0% interest was what was crazy not that long ago. Now we have had it for 7years and it is the new normal.

Zirp will one day be the new normal

#8 Sherry Danson on 10.25.15 at 2:16 pm

We are both retired and have no pension plans from work and we don’t work and never worked for the government.

This year was our first income tax return as a retired, senior couple and we paid almost no income taxes.

It was $875 in Ontario health taxes and some Ontario income taxes.

We received $38,800 in C.P.P., OAS in 2014 and $2,000 in Ontario tax credits. We are among the few getting maximum C.P.P. and paying almost no income taxes.

We live quite well as we have no debts of any kind and a paid off house worth $450,000. We spend $2,500 a month and have $830 a month left over.

This is going into TFSA’s every year unless they disappear completely.

We are basically letting our RRSP’s and TFSA’s grow which is $500,000 but will be $700,000 by RRIF time, 71 to 72 years old and our TFSA’s which is $88,000 and will be $123,000 by that time too.

We have $200,000 for each of us in a paid up life insurance policy by age 100 so this will help with the financial loss of OAS, 45% cut to C.P.P. when one spouse passes away hopefully not in the near future.

Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth

#9 For those about to flop... on 10.25.15 at 2:35 pm

I agree with your advice on their portfolio and not having a TSFA seems crazy when these are the type of people that could benefit the most.
I know that you are allergic to them but I would rather have my money in mutual funds than gics.
As for ETF’s for some people they stand for…
Easy To F***-up!

#10 Rosina on 10.25.15 at 2:44 pm

Please sing the petition: Keep the annual TFSA contribution limit at $10,000
https://www.change.org/p/justin-trudeau-keep-the-annual-tfsa-contribution-limit-at-10-000?recruiter=410029060&utm_campaign=signature_receipt&utm_medium=email&utm_source=share_petition
Thanks

#11 Sherry Danson on 10.25.15 at 2:51 pm

Is that supposed to make me feel bad. We enjoyed our life going on many vacations with the kids and them having no debts, student loans, paid off houses, many investments, RRSP’s, TFSA’s etc.

One is a doctor, the other two are successful business owners and are all debt free, married, many grandchildren for us etc.

Over indulging with debt is a fool’s game and is what Canadians have become.

Is frugality the goal of retirement? — Garth

#12 Rosina on 10.25.15 at 2:54 pm

Mistake, Sign or sing

#13 For those about to flop... on 10.25.15 at 3:17 pm

#11 Sherry Danson on 10.25.15 at 2:51 pm
Is that supposed to make me feel bad. We enjoyed our life going on many vacations with the kids and them having no debts, student loans, paid off houses, many investments, RRSP’s, TFSA’s etc.

One is a doctor, the other two are successful business owners and are all debt free, married, many grandchildren for us etc.

Over indulging with debt is a fool’s game and is what Canadians have become.

Is frugality the goal of retirement? — Garth

///////////////////////////////////////////
How much is enough? That is the $2500 a month question .
For Sherry it obviously is and good on her for being a responsible role model for her children.
I would take 2500 a month in a heartbeat but there is no ” one size fits all” retirement plan.
I find it hard to believe that someone who has been finically responsible until they are 65 is going to suddenly start pissing money up against a wall without some terminal illness or other life changing news.
I wish there was more “Sherry’s” in the world we wouldn’t be in the mess we are now.

#14 TurnerNation on 10.25.15 at 3:19 pm

Of course: those sellers at 1m point are moving up to 1.5m – with associated new mortgage.

Or, everybody’s smoking but no one’s getting high.
Strange days indeed.

#15 The Great Canadian Bubble Co. on 10.25.15 at 3:22 pm

Sherry Danson, sounds like you have done well and are enjoying your retirement. Good for you. Here’s hoping we will be in a similar situation. My mom lives on less and is happy.

#16 Justin on 10.25.15 at 3:26 pm

Man I sure wished there was nice places to rent for cheap where I live. Garth keeps talking about these unicorns, but i’ve never seen them.

#17 jean on 10.25.15 at 3:31 pm

Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth

****

Wow, that was really cruel. Why the hate, Garth? They are retired and have no housing costs. What, pray tell, do they need to spend money on exactly?

I am a single person and I spend more than this but only because I love to travel, and I travel several months a year. If I didn’t travel I could easily spend way less. Not sure exactly what you expect people to spend their money on to meet your standard of an acceptable life? Just curious?

Hate? What hate? I just don’t see the bragging rights in hoarding money when in the final decades of your life, — Garth

#18 Retired WI Boomer on 10.25.15 at 3:38 pm

$2500 a month…. to exist on? Well, there are plenty of people out there on much less. Still, my belief has always been “Poverty Sucks” and is best avoided.

Marie & spouse haver the choice to become much better off, and liquid, and free.

As an investor (with never a terribly high income), I can tell you it is much better to have double that in retirement.
It is called “choices” they are yours free to make now, and then as well. You have no choice when you will hit room temperature, someday that is a guaranteed event!

As for “fear” of the markets, yeah sure, they are a reality.
Still with people eating, wiping their bum, and driving there will always be a need for consumption, replenishing, and profits. A balanced approach does work out just spiffy keen, & fine, and delivers more than inflation.

I am not a big fan of ‘owning’ a home, and will probably be selling ours within a few years. Why, with age comes life style changes, and those choices discussed.

Marie, get the old coot to explore the possibilities here. As one who is there, it is working fine, enjoy the cats, and shelter from the ravenous tax guy all that you can. Keep it working for you as hard as you guys worked for it.

Nobody likes “lazy money” make it earn its keep!

#19 jean on 10.25.15 at 3:38 pm

Great Canadian Bubble…agreed. My 81 year old mum is in the same spot. Sold her house and car, rents in a mid size Ontario city and travels whenever she likes. Loving life without the house ball and chain, spends far less than her income and is happy.

#20 Retired WI Boomer on 10.25.15 at 3:50 pm

#8 and #11 Sherry Dawson

Sounds like you have done well. Agree, NO DEBT is the best debt. We have been debt free for about a decade.

Yes, best to let the RRSP and TFSA grow. When you need something, hit up the RRSP first, it reduces your mandatory withdrawal later on.

Welcome to retirement, and enjoy now what you have worked so hard to get. Let the kids earn their own.

#21 Julia on 10.25.15 at 3:55 pm

#2 TurnerNation
“If you own a detached SFH in Leslieville or Riverdale areas of Toronto you are a millionaire!
Search for this, exclude the few units under 900k, and the remaining are 900k+
Add a bidding war and there’s a cool mil.”

As Garth said, millionaires when they sell and after paying off the mortgage.

I don’t consider a millionaire someone who has a million dollars worth of assets, only one who has a million dollars of net worth.

#22 Victoria Real Estate Update on 10.25.15 at 3:57 pm

# 7 Lalaland

You are probably a realtor who wants others to feel safe about buying a house in Canada right now for your own self-serving reasons.

There have been 48 national housing bubbles throughout the world in recent decades (second chart). In each case, there was a significant price correction.

Canada’s housing bubble is, perhaps, the biggest the world has seen.

No country with a housing bubble has willingly allowed house prices to go through a major price correction. To do so would be to choose to allow something to take place that would be sure to chill its economy and the household finances of its citizens.

Instead, countries generally throw whatever they can at housing bubbles to keep them inflated. This is what Canada has done.

It’s impossible to predict when a housing bubble will begin to deflate. However, at some point they all do.

In the US, house prices began to fall approximately two years before the GFC. Americans didn’t see it coming. Canadians won’t either.

Canada avoided a major (country-wide) price correction in 08-09 by bringing in emergency interest rates as stimulus, however, the bubble has grown significantly since then. This time, Canada will be without any comparable source of stimulus to throw at its housing market to avoid the inevitable – a deep, economy-chilling (not slow) housing price correction.

What’s worse is that interest rates will be rising as house prices fall in Canada. This will deepen Canada’s price correction.

Canada’s price correction could end up being significantly deeper than the US correction. As prices were in the process of correcting in the US, interest rates were suddenly dropped from near-normal to emergency levels, limiting the depth of their correction. Canada won’t have that option.

Most Canadians will be shocked with Canada’s coming price correction and everything about it.

#23 Stuart big on 10.25.15 at 4:08 pm

Sherry Danson – “bragging” about your financial situation in response to the letter from the 45 year old dinks is very unhelpful. If they continue on the same course as you they too might get to live on $2500 a month too. You have no reason to pass down your money to your successful kids, you could drop dead any day if you’re of retirement age, and you suggest that upping your standard if living is akin to going into debt? Leave the advice for the next generation to Garth.

#24 conan on 10.25.15 at 4:26 pm

#3 ALBERTASTROPHE on 10.25.15 at 1:40 pm

“The death knell for Alberta’s tarsands is less than two months away, at the Paris summit.”

Doubt it. We will be pumping (oil) like dogs to repay investors. Oil has 15 to 25 years before it is replaced as the dominant source of fuel.

Doubt we will see oil plus 100 dollars again. Too many countries (USA) are also pumping (oil) like cats on their ninth life.

I guess it is possible that the Suez canal could be blocked and ME oil disrupted in a bad (atomic) way but that will lead to problems more suited for Mad Max to figure out.

https://www.youtube.com/watch?v=hEJnMQG9ev8

#25 Horse Shit! on 10.25.15 at 4:27 pm

#13 on 10.25.15 at 1:40 pm

More evidence today that we are heading towards cataclysmic social upheaval due to climate change, within as little as about 15 years says this expert.

What a load of crap!

When I was in high school we were taught the next ice age was coming, 3 years later in 1985 we were hearing that we only had a few years before we reach the point of no return on global warming.

30 years later they are still trying to peddle the same shit, use your head do some research and stop believing everything your told.

No global warming for the past 18 years, the computer models were all wrong.

It’s no wonder we elected the kid for prime minister.

#26 Gentleman prefers bonds on 10.25.15 at 4:39 pm

RE:#8 Sherry Danson on 10.25.15 at 2:16 pm

“Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth”

C’mon Garth, cut her some slack…
Are they supposed to spend money they don’t have, on things they don’t need, to impress people they don’t like?

#27 213 fool on 10.25.15 at 4:45 pm

I get the 60/40 split and the distribution between CDN/US/World. But there was an advice a while back on keeping bond duration short…for now.

Is the duration a thing you can control through bond ETF purchases? Or is it for specific individual bonds?

#28 willworkforpickles on 10.25.15 at 4:50 pm

….North America as we know it won’t even exist in 20 plus years….We are falling so far behind the technological eight ball that nuclear annihilation is virtually guaranteed .

#29 waiting on the westcoast on 10.25.15 at 4:57 pm

Hate? What hate? I just don’t see the bragging rights in hoarding money when in the final decades of your life, — Garth

My parents are in the same boat. Asset rich (one home worth $1.3M now) but would rather scrimp than sell and buy a smaller home or rent and put the rest of the money to work.

I think as people age, they need to feel grounded and avoid changes, etc. This is not good logically but I think like Sherry… it is what makes them happy.

#30 JB on 10.25.15 at 4:59 pm

Garth,

If you think living of $2500.00 with a paid down house, and no debt is living in poverty, you’re doing it wrong. I don’t care how wealthy I become, I will always make sure I don’t over pay for stuff.

I’d be willing to bet that Sherry Danson and her hubby are not wanting for anything.

Where did I use the word ‘poverty’? Self-flagellation might be closer. — Garth

#31 AlbertaGuy on 10.25.15 at 5:03 pm

They earn 120 k and they ” live below their means” which implies they should be able to put away at least 20 k after tax each year (maybe more if both working) enough to be worth at least 500 k in 10 years. Might be pushing the panic button to say they need to sell.

#32 EarlySpring on 10.25.15 at 5:09 pm

I have 80K with an advisor for Raymond James. Anytime I suggest getting out of the RSP mutual fund stud and into balanced ETF stuff he seems hesitant, does he make more off the mutuals’ than he would off a balanced portfolio? Do I need to bring him more money?? I plan on moving my TFSA over to him in 2016 that is maxed out and will hold 25K cash in if to build s portfolio that Garth suggests, otherwise he won’t get it.
What should I do about the RSP stuff?? I am 28 with a company pension around 45K, company contributes 7.5% and I do 5%. Thanks for the help

Get a new advisor. — Garth

#33 Strong American Recovery on 10.25.15 at 5:10 pm

A Global Chill in Commodity Demand Hits America’s Heartland http://nyti.ms/1PGwHhe

#34 Freedom First on 10.25.15 at 5:12 pm

I just got mu flu shot yesterday. Been getting them since they came available. Sometimes I go 4 years at a time without getting sick, and when I do get something it is rarely as severe as it used to be. It’s what it’s supposed to be like. Never had any arm pain or allergic reaction either.

Maria and hubby are doing better than most. They will be fine. With a little refinement Garth mentioned, they will be doing great. Never get married to a house or any asset. Always follow the formula. It is idiot proof. I know.

Sherry Danson.Congrats! You and hubby have lived a good life. Don’t be afraid to live a little. You 2 are level headed, don’t let fear hold you back.

#22 Victoria Real Estate Update

Perfect! Great Post and reply to another insane comment from lalalalalaland. Must be a house pervert.

People who engage in high risk activities lose their nutz. Already many neutered truck owners in Alberta. We ain’t seen mothing yet in Canada, and it ain’t over til it’s over, and we have just begun. Governments can not stop housing corrections, but they can sure facilitate the housing bubbles until they pop. And they did, and still are. The outcome will be bloody epic.

#35 Mc on 10.25.15 at 5:25 pm

“Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth”

You sound like a person who has never taken a hike in the mountains.

That was deep. — Garth

#36 EarlySpring on 10.25.15 at 5:30 pm

Even if #8/#11 Sherry Danson had HER name as Mike Bob you could tell this was a woman. I obviously love women and need them in my life lol, but who comes here to a blog run by GT just to spew the garbage she just did, she ain’t here for advice nor to advise, just to post a thread patting herself on the back and try to brag to others here, lame.

#37 For those about to flop... on 10.25.15 at 5:39 pm

I just don’t see the bragging rights in hoarding money when in the final decades of your life, — Garth
//////////////////////////////////////////
Boss ,I get what you are saying but if they go too hard too early then they bring one of your other no-no’s into play.
Outliving their cash.
Maybe 2500 hundred can be loosened to 3k in a year or so.Who knows ,their race to run.

#38 Steerage bilge on 10.25.15 at 5:48 pm

Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — GartH
——
See no need to chirp these fine folks. What the heck!

#39 Hardin McVeer on 10.25.15 at 5:50 pm

“No preferred shares with their juicy 5% yields, either.”

With rates pegged to stay low for the foreseeable future and Prefs sagging in value ( some as much as 30% the past year) because of the continued ZIRP…..when is a good time to vultch on prefs…..the ZPR for ex…keeps sinking? Prefs can only continue to suffer capital losses under the Trudeau Plan to Borrow Low and Stimulate.

I’m like your subject….have a place I keep to live in…rather than sell to ‘invest’….based on the fact that I’ll always need a secure place to live for family needs …and renting is akin to living in a hotel. It’s an imperfect world….but so is renting.

What happens if you take a job overseas…..do you put all your stuff in a storage locker and rent a hotel room upon return? It’s not always possible to have all four feet in the water. And….given todays uncertainty I would suggest people keep more cash available than ever before.

Today one of the lame stream media Hate Harper outlets suggested that Trudy let Obama use Canada ‘to do great things on climate change’ before he leaves office in a few months.

In other words…the media that voted Liberal wants to abandon Canadian sovereignty so that Obama can use us to build his legacy and book tour status. This further exacerbates the risk to all Canadians. If Trudeau is ready to give away the store to a foreign impresario for the sake of ‘better relations’…..everybody’s job is at risk.

#40 Hardin McVeer on 10.25.15 at 5:58 pm

BTW Garth….FYI

“Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth”

You can live like king/queen in Thailand, Malaysia or Philippines on $2500…easily. You’ll get a beautiful 2500 sq ft suburban home that you can bbq in the sunshine all year ling…when you not cycling around the lakes, golfing, shopping, swimming, lounging under tropical trees… etc etc etc …..for less than half that.

#41 Victor V on 10.25.15 at 5:59 pm

NDP to table largest deficit budget in Alberta history as provincial revenues plummet with oil prices

http://news.nationalpost.com/news/canada/canadian-politics/ndp-to-table-largest-deficit-budget-in-alberta-history-as-provincial-revenues-plummet-with-oil-prices

#42 Alberta wing-nuts on 10.25.15 at 6:14 pm

It’s not Canada’s housing bubble anymore but rather Toronto’s & Vancouver’s… The Vancouver market is lifting all prices around it… http://www.theglobeandmail.com/life/home-and-garden/real-estate/rising-tide-of-vancouver-house-prices-lifting-values-throughout-region/article26957992/
And TO is surely doing the same. People coming from all over Canada, from all over the world to build these points into jewels, shining cities… I’ve lived in TO my whole some-many years and the last decade has seen much transformation… Many areas once lost to abuse are now cleaned up… I’d say we are entering a phase of International City status… I’m proud to own a TO property… Finally, I’d say rents will be climbing higher & higher quite soon,,, just you watch… Sorry G but I disagree with your 2-city bubble babble…

#43 A Yank in BC on 10.25.15 at 6:28 pm

Purchased my first indexed ETF in the U.S. in 1993. (SPY) Became a fan right away. They have revolutionized investing in the U.S. by helping to bring the cost of investing way-way down. There has since been explosive growth in the ETF industry, which has allowed investors to keep far more of what is theirs.. and out of the pocketbooks of exceedingly well-paid Mutual Fund managers. The savings realized then compound into further gains, which makes a huge difference over time. This same revolution will happen in Canada as more and more people become educated about cheap indexed-investing (via people like Garth) and real competitive pressures are finally brought to bear upon the big-five piggy’s.

#44 WW2 on 10.25.15 at 6:36 pm

“A 7% return on that in retirement would yield income of $140,000 for the rest of your life, and keep most of the principle intact for your cats’ inheritance.”

Where, oh where, do I go to sign up for a 7% return for life? I’d be happy with a guaranteed 4% return. Or even 3% …

The average annualized return for a 60/40 balanced portfolio over the last five years is 7.8%. Over the last decade it is 7.2%. The TSX has averaged 7% over the last thirty years. — Garth

#45 Londoner on 10.25.15 at 6:46 pm

I disagreed with the last case study but this one seems spot on.

Btw – when did $120k/yr income become “solidly middle class”? Maybe lower middle.

That is 2 incomes. The Libs say MC is between mid-40s and 90K, individual earnings. — Garth

#46 JB on 10.25.15 at 7:22 pm

Point taken. But, not everyone needs to rent a 2 million dollar Toronto house, and own an ocean side home in a Unesco World Heritage town in Nova Scotia.

I want what you have, but not everybody does.

I don’t actually need my Harley, either. Was there a point point in there somewhere? Would I make a better financial advisor if I were penurious?– Garth

#47 Tony on 10.25.15 at 7:24 pm

I’d move to all cash and rent. The same $400,000 townhouse sells for $40,000 in America and cash will certainly outperform stocks for at least the next decade. The future for the two of them with current bad choices is the food bank and working well into their 80’s.

#48 When will they raise rates? on 10.25.15 at 7:24 pm

If the Canadian government sees the housing bubble starting to pop, are they more likely to:

A ) Allow the correction to take place, thereby plunging Canada into a deep recession for possibly a decade,

or

B ) Add additional fuel to the bubble to prevent the crash, by enacting 40 or 50 year mortgages, etc..?

I think we all know the answer. We are screwed.

#49 Tony on 10.25.15 at 7:31 pm

Re: #44 WW2 on 10.25.15 at 6:36 pm

You have to move (only true way) and convert your currency to a country that pays at least 7 percent a year in interest. The problem being you don’t want to move to a country that will take everything you own. To obtain a 7 percent or more return in Canada it’s looking more and more like doing the opposite of what the U.S. FED and bankers tell you to do will product the highest returns. In other words sell stocks short and buy gold silver and bitcoins. If you can hold out long enough you will be guaranteed a big winner.

#50 Mark on 10.25.15 at 7:34 pm

“The minute there is a tiny downturn you will see these things happen… And real estate will continue going up up up while the monthly payment stays the same”

Doubtful. The period of prolonged interest rates and high house prices has stimulated the production of so much additional supply that prices are falling on account of too much supply existing relative to consumer demand. Over 70% of Canadians already own their own home, up from a number in the low 60s at the beginning of the inflation of this RE bubble. As the industry has largely satiated all potential buyers with a pulse that could realistically buy, even lowering interest rates further and tinkering with amortization periods is unlikely to inflate RE or arrest the downturn in housing prices seen over the past 2 and a half years.

Lower interest rates at this point likely imply a weakening economy, and a weakening economy would inhibit housing price expansion on account of weakening/declining personal income. Additionally, the lenders themselves are demanding increasing compensation for the risk they take in lending money into a declining housing price environment as we see today. Lowering policy rates further, which is almost certain to come as the economy continues to weaken, will likely have little to no impact on retail mortgage rate offerings.

#51 omg the original on 10.25.15 at 7:34 pm

“My husband thinks investments are baloney,” she explains. “His whole strategy is just to live below your means. And hope.”
—————-

Sadly, we middle agers are a generation conditioned to invest in exactly the wrong things.

With the exception of the eastern provinces, real estate has been a SPECTACULAR investment over the past decade. So your brain says stick with the winner even thought its well past its due date. After all, Canadian real estate just never goes down (that’s sarcasm for you literalists).

The stock market from the late 1990s onward has produced nothing but grief for most. And since most people invest in high load mutual funds even when the market was going up the returns were muted. Then most people sold out at some point when the market tanked during the GFC and never had the balls to get back in. Brain says very risky, especially since markets are up so far from their lows.

So now we sit with a one asset strategy (a house) that will likely face a negative real return over the next decade. So no wonder we balk at investing in other stuff – who needs it.

As usually we do the exact opposite of what we should be doing. Just human nature, but its going to result in a lot of seniors having to staying in the work force long beyond what they had expected.

#52 Basil Fawlty on 10.25.15 at 7:36 pm

Garth, on the one hand you say that millionaire homeowners are only such, when they sell. Then you say, that the TSX has averaged 7% over the last 30 years. Would one not also have to sell their TSX investments to realize the 7% return?

The return was just that – profit. Not the original capital. Try carving 7% out of your house every year and you end up with debt. — Garth

#53 BG on 10.25.15 at 7:37 pm

“Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth”

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

That’s very subjective.
The same subjectivity could make people say “saving during these working decades only to (maybe) enjoy retirement years?”

#54 betamax on 10.25.15 at 7:39 pm

Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth

Whatever your intent, the sarcasm just sounds nasty, which is why several people are calling you on it.

The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth

#55 omg the original on 10.25.15 at 7:40 pm

ALBERTASTROPHE on 10.25.15 at 1:40 pm
The death knell for Alberta’s tarsands is less than two months away, at the Paris summit.
————

Hopefully JT will remember what damage his father ill conceived energy policy had on Canada for the last 40 years. You can trace the roots to the Harper government to the rage generated by the NEP.

I am hopeful that a desire to have health care for our children, and a strong military to send into UN peace keeping missions will persuade Liberals that the economic activity from a environmental sustainable oil sands is positive.

That and a lot of Liberal bagmen make millions from oil and gas.

#56 Oceanside on 10.25.15 at 7:40 pm

http://news.nationalpost.com/news/canada/canadian-politics/ndp-to-table-largest-deficit-budget-in-alberta-history-as-provincial-revenues-plummet-with-oil-prices

They don’t have a choice in considering what they have inherited from the long Con rule, I’m sure the redneck/right will heap all the blame on Notley…..

#57 Bobs ur uncle on 10.25.15 at 7:41 pm

#11 Sherry Danson

As they say, haters gonna hate. Don’t pay them any mind. If you are happy without the need to spend lavishly on things you don’t need, then good for you. So what if the things you enjoy are cheap or free. IMO, the people who spend and flaunt the most are the ones trying to fill a large hole on the inside, compensating for something…

#58 BC Guy on 10.25.15 at 7:43 pm

So we’re all agreed that ETFs are the way to go to mitigate the risk of owning equity in a single company.

Then it occurred to me that if I bought an ETF from say Blackrock or a similar ETF company, wouldn’t I be exposing myself to some of the same type of single-company risks?

That is, what if the company that sells and manages the ETF is rocked by an Enron or Valeant-type accounting or management scandal? Wouldn’t there be a sudden rush by investors to sell their ETFs and wouldn’t that cause the ETFs to crash in price and/or trading halted on the stock exchange, and the assets frozen by a regulator? These days, fraud and corruption appear just about everywhere. Why then, not an ETF company?

And even though ETFs contain a basket of company equities, the company that manages the ETF is a potential single point of failure. Just sayin’.

Sayin’ nothing. Learn what an ETF is. — Garth

#59 For those about to flop... on 10.25.15 at 7:45 pm

#36 EarlySpring on 10.25.15 at 5:30 pm
Even if #8/#11 Sherry Danson had HER name as Mike Bob you could tell this was a woman. I obviously love women and need them in my life lol, but who comes here to a blog run by GT just to spew the garbage she just did, she ain’t here for advice nor to advise, just to post a thread patting herself on the back and try to brag to others here, lame.

/////////////////////////////////////////////
Geez Garth does case studies all the time where the women wants it all and poor old Sherry comes along and tells her story(being proud is not a crime ) and there are people on this blog that want to back the bus over her.
So which one is it fella’s ? Do we want our partners spending all our cash or do we want someone with self restraint that knows how to have a good time without taking the mickey.
This woman should not be vilified for being a good life partner/ wife.
No wonder my wife won’t read this blog.
I love this blog , there are some great people on here but sometimes it is to much of a sausage party.

#60 common sense on 10.25.15 at 7:50 pm

$2500 to live on?

Love ya Garth but that was Stephen Harper low…

Life is all about choices.. you have yours, they have theirs..

Just back from a funeral this weekend..Uni friend who dies at 56 due to complications of Diabetes over 20 years…

Funny no one asked what his net worth was or how much he was taking with him. Not a soul.

The ONLY thing that mattered was that the 200 plus people who interacted with over his 56 years that showed up, knew he was a fun guy and help you whenever he could.

Money is nice to have better choices but my choice between making more and missing a beautiful fall day like today…no choice at all.

Let’s just RESPECT others.

You managed to miss my point entirely. But nice sanctimony. — Garth

#61 not 1st on 10.25.15 at 7:53 pm

Clearly Maria is unsatisfied, with her investments of course.

#62 When will they raise rates? on 10.25.15 at 7:53 pm

Isn’t it possible that the Canadian government’s agenda is to allow the real estate bubble to fund the retirement of the boomers?

If so, what makes anyone think that they won’t take any and all actions necessary to prevent the crash? GenX-ers and Millennials be damned?

Negative interest rates, 50 year mortgages, zero down, currency devaluation, foreign buyer incentives, no proof of income, etc.., what makes anyone think that the bastards in Ottawa won’t use any or all of the above to keep the party going?

#63 omg the original on 10.25.15 at 7:56 pm

Alberta Wing Nuts

I’d say we are entering a phase of International City status… I’m proud to own a TO property… Finally, I’d say rents will be climbing higher & higher quite soon,,, just you watch…
——————–

1) Oh, please, please, please, start calling Toronto a “WORLD CLASS CITY” – I am so nostalgic for the 1990s. (And PS if you have to call yourself a World Class City you are not one).

2) Rents going up – this is the true barometer of how out of whack real estate prices are. People pay rents with income and income has just not moved in the cities and won’t be anytime soon – so its not like the average renter can support your $1 million Leslieville teardown. TO/Van house prices are simply a fiction caused by low interest rates – they will ramp down as rates ramp up.

#64 Daisy Mae on 10.25.15 at 7:59 pm

#26: “C’mon Garth, cut her some slack…
Are they supposed to spend money they don’t have, on things they don’t need, to impress people they don’t like?”

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

No.

#65 omg the original on 10.25.15 at 7:59 pm

Tony on 10.25.15 at 7:24 pm
I’d move to all cash and rent……and cash will certainly outperform stocks for at least the next decade.
——————————

Yep, investing is all about playing the odds…..

…..and with that strategy you are betting against the odds of the last 120 years.

#66 Daisy Mae on 10.25.15 at 8:04 pm

#29: “I think as people age, they need to feel grounded and avoid changes, etc. This is not good logically but I think like Sherry… it is what makes them happy.”

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

A feeling of security can not be underestimated.

#67 omg the original on 10.25.15 at 8:05 pm

When will they raise rates? on 10.25.15 at 7:24 pm
If the Canadian government sees the housing bubble starting to pop, are they more likely to:

A ) Allow the correction to take place, thereby plunging Canada into a deep recession for possibly a decade,

or

B ) Add additional fuel to the bubble to prevent the crash, by enacting 40 or 50 year mortgages, etc..?
———————

The government will do everything they can to shore up prices.

And since the Canadian correction will be local (that is it will to threaten global of even Canadian financial systems ) it will work for a time.

That is why the correction is likely to be a long and grinding affair lasting 7 to 10 years – but in the end it will grind off 40-50% value or more.

Over the long run the market always has its way.

#68 Kreditanstalt on 10.25.15 at 8:13 pm

I wonder how ANYONE could “run out of money in five years” with no mortgage and $230,000.

They could be frugal and last eight, I guess. — Garth

#69 Tbone Elliott on 10.25.15 at 8:16 pm

Sherry Danson is doing just fine by me Garth.

I see the low expectations crowd is having a convention here tonight. — Garth

#70 Mark on 10.25.15 at 8:20 pm

“Negative interest rates, 50 year mortgages, zero down, currency devaluation, foreign buyer incentives, no proof of income, etc.., what makes anyone think that the bastards in Ottawa won’t use any or all of the above to keep the party going?”

Because it simply won’t work, perhaps? The US tried throwing everything but the kitchen sink at their RE market, and it didn’t stop a massive loss of value from occurring. RE, at best, over the long term, will only be a derivative of income, and truncated investment in the non-RE sector can only lead to, over time, a collapse in RE values as incomes collapse. At 70%+ ownership rates, the Canadian RE Ponzi ran out of scheme over 2 years ago and prices have been on the decline ever since.

Negative interest rates, for instance, as I explained in yesterday’s post, cause lenders to actually slow/stop their lending. Foreign buyer incentives aren’t likely to be of any use as foreigners with money are generally smart enough not to invest it in severely overpriced assets. And income isn’t all that relevant especially since the lack of income will very quickly be noticed by the marketplace and/or show up as a CMHC default.

As another poster here frequently points out, the longer the RE bubble remains at such elevated heights (albeit down slightly from the peak), the more severe and prolonged the downturn will be. On account of the oversupply and overcapacity that high prices induces. If I were advising Trudeau at this point, I’d advise him to take steps to crash the housing market ASAP (ie: start reducing CMHC’s subprime guarantee authority!) so that he actually has a chance of presiding over a rebuilding economy come the next election in 4 years.

#71 common sense on 10.25.15 at 8:22 pm

Love ya still Garth but it’s their money and their choice…

Did I make her post here? She bragged about being clever. I questioned the choices. Fair game. — Garth

#72 Mark on 10.25.15 at 8:26 pm

“And even though ETFs contain a basket of company equities, the company that manages the ETF is a potential single point of failure. “

Actually ETFs are themselves mutual fund trusts under the Income Tax Act, separate free-standing entities. The “sponsor” or “manager” of an ETF is actually hired by the fund, but does not hold or own the ETF itself. Any ETF can, with the majority vote of its beneficiaries, change its manager/sponsor. This is exactly what would happen if the ETF’s manager were to fail or otherwise be rendered unable to perform the duties.

That’s not to say that there wouldn’t be a lot of potential turbulence, but when you buy, say, a BlackRock or a Vanguard ETF — you are not buying an obligation of BlackRock or Vanguard which relies upon their solvency — you are buying an ownership/beneficiary interest in a mutual fund trust they just happen to have been appointed to manage.

#73 Entrepreneur on 10.25.15 at 8:27 pm

I think #8 Sherry Danson is point is that they never worked for the government. Just luck as many are not as lucky as individual lives take many roller-coater rides.

#10 Rosina…signed the petition but did you know about the “Climate Welcome” that is around.

#25 HorseShit…you might eat your words. Humans have a brain but are not using it. I think you should look up “Climate Welcome” and get educated!!!

#41 Victor V as for Alberta NDP’s largest deficit in history, you should look at the B.C. Liberals deficit…One Of The Largest In History!!!

On Vancouver Island we voted for the NDP and proud of it. We will stand to protect our rivers, lakes, and oceans. The Liberals and the Conservatives have failed us; we know the lies.

#74 common sense on 10.25.15 at 8:28 pm

And sanctimonious? Please. I guess you have all the answers…

Yes it’s your blog and you can say anything you want….

Your in control…enjoy your net worth 6 feet under as i assume that’s fully under your control as well…I’ll have my last cheque bounce. “Kinky Friedman”

I still love ya baby….xoxoxo

#75 common sense on 10.25.15 at 8:32 pm

Fair game? Yes fully

She thinks she’s clever and if it makes her happy? Why not? Her choice, her life, their cash to do whatever in this world they wish with it be….it really has zero effect on anyone else.

And thank you for allowing fair and balanced comments.

Sincerely much appreciated. Always.

#76 Ray Skunk on 10.25.15 at 8:35 pm

I’d say we are entering a phase of International City status… I’m proud to own a TO property… Finally, I’d say rents will be climbing higher & higher quite soon,,, just you watch… Sorry G but I disagree with your 2-city bubble babble…

Absolute bollocks.
You may be able to borrow your way to increased house prices, but renters can’t get a mortgage to pay the rent. Only incomes determine rent – and those renters who work the drive-thru at your local Timmies can’t and won’t be paying >$1500 for a one-bed anytime soon. Increased cost of buying =/= increased rents, sorry pal.

As Garth posted just the other day:

http://www.greaterfool.ca/wp-content/uploads/2015/10/SUBWAYS-modified1.jpg?8f4c78

The only things world-class about Toronto are the gridlock and the amount of self-fellatio that goes on.

We’ll see how well your world-class label stands up in a few years when the weight of the mothership Ontario’s corruption and debt load come crashing down.

#77 For those about to flop... on 10.25.15 at 8:38 pm

Mark # 70
” If I was advising Trudeau….”
Oh hell no!

#78 Paul on 10.25.15 at 8:40 pm

#69 Tbone Elliott on 10.25.15 at 8:16 pm

Sherry Danson is doing just fine by me Garth.

I see the low expectations crowd is having a convention here tonight. — Garth
———————————————————-
That way there are disappointments.
You know how much Canadians Hate them.

you know how much Canadians hate them!

#79 Ivec on 10.25.15 at 8:47 pm

Guys, i know Garth feels bad about roasting Sherry. But remember his advice from earlier posts, never admit you are wrong. Let’s allow him to save face and let’s call it a night

#80 Paul on 10.25.15 at 8:50 pm

#77 For those about to flop… on 10.25.15 at 8:38 pm

Mark # 70
” If I was advising Trudeau….”
Oh hell no!
————————————————————-I tried , the Man er Kid just won’t listen!
I don’t get it!

#81 Love my Kia on 10.25.15 at 8:51 pm

Sayin’ nothing. Learn what an ETF is. — Garth
****************************************
Please educate us then.

All your advice seems sound, but try finding a fee-based advisor anywhere in any city in northwestern Ontario (a massive geographic area in case you aren’t aware). If you can, what are the odds they are any good?

That being said, it would be nice to know how one can start to do their own investing from scratch. Where do you begin?

#82 When will they raise rates? on 10.25.15 at 8:51 pm

Mark on 10.25.15 at 8:20 pm

“Negative interest rates, 50 year mortgages, zero down, currency devaluation, foreign buyer incentives, no proof of income, etc.., what makes anyone think that the bastards in Ottawa won’t use any or all of the above to keep the party going?”

Because it simply won’t work, perhaps? The US tried throwing everything but the kitchen sink at their RE market, and it didn’t stop a massive loss of value from occurring.

————————————

Austrians understand this. How many Austrian economists are in the Liberal Party of Canada?

#83 When will they raise rates? on 10.25.15 at 8:52 pm

… and besides, they don’t need to keep it going forever, just long enough to let the boomers cash out comfortably, and leave future generations holding the bag.

And that was my point.

#84 Love my Kia on 10.25.15 at 8:53 pm

I see the low expectations crowd is having a convention here tonight. — Garth
*****************************
Just apologize so we can move on.

For reminding people that the accumulation of wealth is no substitute for relishing in full the final years of one’s life? That hoarding is no virtue? I think not. — Garth

#85 JB on 10.25.15 at 8:58 pm

“I see the low expectations crowd is having a convention here tonight. — Garth”

My parents are in a similar situation as sherry Garth. Although they do also have a modest rental income to subsidize their income. They have a beautiful home, which is paid off. They actually have a rental income attached to their home, which also brings in income, and they have a modest rental property about a kilometer away(also paid off).

They have a paid off motorhome. And, also two paid off Harlies (waste of money IMHO).

They travel the continent visiting their grandchildren, and taking in country music concerts (gag me), and living life.

We should all be so lucky!

#86 boonerator on 10.25.15 at 8:58 pm

The case of Sherry not spending to their monthly income has unknown elements.
They are doing well but are there things on their bucket list that their frugality is blocking?

Years ago on CBC, we heard a story about a family who had bought some IBM stock in the 1920’s and had a dividend reinvestment plan so never saw any money from the growth. The family mantra was “Whatever you do, don’t sell the stock”. This message carried on through the generations.
You can imagine the cash value of the stock after 50 or 60 years of growth and DRIP. According to the story (quite possibly apocryphal), the heirs were living just above the poverty line but would not sell any stock.

I remind myself of that story when I want to spend on something more than food and shelter. I’m selling the stock.

#87 young & foolish on 10.25.15 at 8:58 pm

People need regular cash flow …. equity returns are anything but regular. It’s why you need stable yields as well, like rents, dividends, or ROI in your portfolio.

Most people will need professional help in structuring these financial products …. good luck with that 7%

#88 JB on 10.25.15 at 9:02 pm

“I don’t actually need my Harley, either. Was there a point point in there somewhere? Would I make a better financial advisor if I were penurious?– Garth”

Not at all Garth, and for the record, I think you’re the “cat’s ass”. But maybe the client want’s to own a paid off Hyundai, and live on the beach in PEI, or on the lake in Manitoba.

#89 Mark on 10.25.15 at 9:05 pm

“People need regular cash flow …. equity returns are anything but regular. It’s why you need stable yields as well, like rents, dividends, or ROI in your portfolio.”

The irony these days is that the dividend return of a typical equity index fund is actually greater than the dividend return of even fixed income. Expectations are so firmly embedded that equities will continue to underperform amongst the investing public that any reversal of such expectations could be explosive to the upside.

Despite the very weak economy since the apex of the tech bubble circa 1998-2001, earnings have continue to grow, and its not too hard to go look at XIU’s payouts and see they’ve roughly tripled in the same interval as well. Slowly but surely, corporate balance sheets have been repaired and equities have gone from being spectacularly overpriced, to actually being underpriced at this point. P/E = 15 (which is beneath long-term averages) with most of the cyclicals not even contributing has substantial upside once enthusiasm dissipates from housing and returns to other asset classes such as equities.

#90 Leo Trollstoy on 10.25.15 at 9:10 pm

Maria must live in one of those crusty overpriced town homes in Toronto. Maybe even Mississauga.

http://www.chpc.biz/toronto-housing.html

As you can see from the linked Sept chart, Toronto town home prices are inceasing just like single fam and condos despite sales mix, which is creating an unsustainable bubble in the housing sector.

If Maria liquidates today, she and hubby-to-be will be in prime position to vulch tomorrow!

#91 Freedom First on 10.25.15 at 9:10 pm

#59 For those about to flop

What? no thank you for my post, but you had to find someone to rag on didn’t you, Mr. Mangina.

#92 Leo Trollstoy on 10.25.15 at 9:13 pm

We spend $2,500 a month and have $830 a month left over.

Are you growing your own crops? Where do you live??

#93 young & foolish on 10.25.15 at 9:13 pm

“We’ll see how well your world-class label stands up in a few years when the weight of the mothership Ontario’s corruption and debt load come crashing down.”

Yeah, like there’s no corruption and debt load in Paris, London, or Tokyo. World Class label is NOT the issue around affordability. It’s a reflection of demand. If our large cities continue to draw people, prices and rents will remain high. The last time I checked, the world continues to urbanize (usually around larger cities).

#94 vb on 10.25.15 at 9:13 pm

I think it depends what makes you happy and where you live. In a big city like TO where I live 6-8k a month is my target in retirement. ETF’s, Prefs, Reits and maybe a 10 bagger in Bombardier!! lol… either way more is better than less!

#95 Macrath on 10.25.15 at 9:14 pm

#81 Love my Kia ~~~~Where do you begin?

http://canadiancouchpotato.com/
http://www.financialwisdomforum.org/forum/
http://www.taxtips.ca
http://www.getsmarteraboutmoney.ca
——————————————————————-

#96 Freedom First on 10.25.15 at 9:14 pm

#62 When will they raise rates?

I am a Boomer. Sucks to be you.

#97 Love my Kia on 10.25.15 at 9:15 pm

I see the low expectations crowd is having a convention here tonight. — Garth
*****************************
Just apologize so we can move on.

For reminding people that the accumulation of wealth is no substitute for relishing in full the final years of one’s life? That hoarding is no virtue? I think not. — Garth
********************************

Your letter of the day is reflective of many middle class income readers of your blog. This comment would hit a nerve with many of them which is a good indicator of how the average Canadian lives nowadays, with low expectations. Very commonplace.

#98 Leo Trollstoy on 10.25.15 at 9:16 pm

I wish there was more “Sherry’s” in the world we wouldn’t be in the mess we are now.

This is somewhat true.

We would have different problems.

I’m not sure our society would be ‘better’. Just different. I wouldn’t want to live there anyway.

#99 Linda on 10.25.15 at 9:16 pm

One person’s frugality is another person’s luxury lifestyle. Sherry D & spouse appear to be enjoying their retirement. As for frugality, maybe it isn’t all that frugal. From the initial post, it appears this couple has no debts or other financial obligations. Also at least age 65, since otherwise they’d not be getting OAS. Thing I’ve noticed as I too grow older is that my purchases have slowed/stopped, because I already have all the stuff I want. If that is the case, other than the occasional necessary replacement expense what would I be spending money on? I neither need or want a Rolex/high end sports car/fancy digs all over the world etc. that some people seem to consider essential for happiness. Seems to me that Shelly & spouse could spend more if they wanted to – money isn’t the issue – it is just that they have already got all they want & spending time with family/friends is what makes them happy.

#100 Leo Trollstoy on 10.25.15 at 9:18 pm

#29 waiting on the westcoast on 10.25.15 at 4:57 pm

My parents are like this. Doesn’t make sense to me.

I would never want to have a $1.3m anchor during my twilight years.

Can’t take it with you.

#101 Love my Kia on 10.25.15 at 9:20 pm

#95 Macrath,

#81 Love my Kia ~~~~Where do you begin?

http://canadiancouchpotato.com/
http://www.financialwisdomforum.org/forum/
http://www.taxtips.ca
http://www.getsmarteraboutmoney.ca
**********************
Thanks for that! I was hoping Garth would elaborate a bit more as well. Much appreciated.

I do that six days a week, even for Kia drivers. — Garth

#102 Interstellar Old Yeller on 10.25.15 at 9:29 pm

The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth

Unless that $2500/m buys them everything their hearts desire, I can see how Sherry & husband continuing to save $10k a year in retirement may be too conservative, given their existing assets. I’m wondering if de-registering some of their RRSP investments would be optimal, since they’ve only got CPP income to pay taxes on, right now (use the RRSP withdrawals to stuff the TFSA.)

Running out of money would be the worst thing, but dying with tons leftover would come in second (unless leaving a large estate behind is a goal.) Running out seems to be an outsized worry, at times. The money hoarding is driven by fear and insecurity that are hard to address because financial conservatism is seen as a virtue. Depending on how deep-rooted it is the best approach may be to just let the saving continue. The money accumulated will be buying peace of mind, if nothing else (in that lifetime.)

#103 When will they raise rates? on 10.25.15 at 9:30 pm

#96 Freedom First on 10.25.15 at 9:14 pm

#62 When will they raise rates?

I am a Boomer. Sucks to be you.
—————————————-

Renting, saving, stacking and enjoying life… When the crash happens, it won’t be me holding the bag. I’ll be vultching cheap assets in the aftermath.

It doesn’t suck to be me, but it does suck to be others of my generation who get sucked into the boomer retirement RE ponzi scheme. It is they who will be left holding the bag.

#104 Leo Trollstoy on 10.25.15 at 9:31 pm

Your in control…enjoy your net worth 6 feet under as i assume that’s fully under your control as well…I’ll have my last cheque bounce. “Kinky Friedman”

Hm Garth, like most wealthy individuals, don’t board money like that. We spend on things that we want. As he said himself, he bought a Hummer that he doesn’t need.

Those who scrimp and scrounge in the twilight years will take it all to their graves. Having spent nothing.

Like you said, you can’t take it with you.

#105 Timmy on 10.25.15 at 9:31 pm

http://news.nationalpost.com/news/canada/canadian-politics/ndp-to-table-largest-deficit-budget-in-alberta-history-as-provincial-revenues-plummet-with-oil-prices

They don’t have a choice in considering what they have inherited from the long Con rule, I’m sure the redneck/right will heap all the blame on Notley…

They are too stupid to understand this. Many don’t even realize that Alberta is in bad shape mainly because of decades of ineptitude ad mis management of the Conservative government.

#106 For those about to flop... on 10.25.15 at 9:34 pm

#91 Freedom First on 10.25.15 at 9:10 pm
#59 For those about to flop

What? no thank you for my post, but you had to find someone to rag on didn’t you, Mr. Mangina.
///////////////////////////////////

Only in your world is it all about you.
In the real world no one gives a crap about a little twerp like you.
You are but a pimple on my butt.

#107 running down to zero on 10.25.15 at 9:38 pm

#100 Leo Trollstoy on 10.25.15 at 9:18 pm

My parents are like this. Doesn’t make sense to me.

I would never want to have a $1.3m anchor during my twilight years.

Can’t take it with you.

You never know when the exit comes today or ten years from now.

#108 Timmy on 10.25.15 at 9:42 pm

RE: #81 Love my Kia

1. Determine asset allocation (mix between stocks and fixed income. 60/40 very conservative, 70/30 aggressive).
2. Either buy ETFs: 1 CDN, 1 US and 1 fixed income; or buy individual blue chip dividend paying stocks, must have 15-20 for diversification. If you go this route, subscribe to a reputable investment letter such as THe Money Reporter, or The Successful Investor, both have been around for years and have done at least as well as actively managed funds–if not better.

It is that simple. Don’t waste your money on a financial advisor, most active portfolios have failed to beat the index over time, so they add little to no value. It is really that simple. Financial Advisors tend to overcomplicate things so they can make more on commissions. I have over half a million after 7 years of buying blue chip stocks.

#109 espressobob on 10.25.15 at 9:45 pm

It’s the 25k opportunity cost that’s at risk.

Any pension? 135k in mutual funds, yeesh. And 120k income between them in income. Tough call?

Flu shot anyone?

#110 Joe on 10.25.15 at 9:46 pm

#63 omg the original

Though I agree with you that housing will crash, you are missing one part of the equation: in big cities the rental stock has not kept pace with population inceases, as politicians such as dickhead Gregor Robertson would rather see his developer buddies who got him elected get rich by putting up all those shoddy condos, instead of building rental apartments. This has put pressure on rents–supply and demand…

#111 White Crock BC on 10.25.15 at 9:46 pm

No predictions on where the Fed rate will be four days from now?

#112 Leo Trollstoy on 10.25.15 at 9:48 pm

I would never want to have a $1.3m anchor during my twilight years.

Can’t take it with you.

You never know when the exit comes today or ten years from now.

Totally understand. That’s why I don’t want a $1.3m anchor.

What am I going to do? Scramble to liquidate once I’m dying? That’s silly.

#113 Lee bow on 10.25.15 at 9:49 pm

Garth, some people just like to be frugal. That’s what they enjoy. I know somebody who measures how long of an extension cord he needs for Xmas lights: 4 feet or 4.5. But if that’s what gives him bliss, sure. In fact, I am totally planning to do a circumference on a sail boat when I retire. Gonna be hard to spend 2500 that way.

#114 Leo Trollstoy on 10.25.15 at 9:51 pm

The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth

Bingo.

Dunno why this is hard to understand.

Why scrimp and save during the twilight years is beyond me. What’s the point? Death doesn’t care.

#115 meslippery on 10.25.15 at 9:53 pm

Garth yesterday(Wages haven’t increased for years).
Today (I see the low expectations crowd is having a convention here tonight. — Garth)
High expectations have been beaten out of us after years
of stagnate wage growth.

#116 Love my Kia on 10.25.15 at 9:58 pm

#108 Timmy
*******************
I will look into The Money Reporter and Successful Investor, thanks! Fee based financial advisors are not in my city, and if they were it would be difficult to know who to trust. My bank advisor I’ve known personally for decades and do trust him with my life, however, he does work for the bank. I guess friendship costs…

#117 Lee bow on 10.25.15 at 10:01 pm

Shoots. Garth got some feedback on the 2500 comment (2500-gate).

Garth, if I may suggest a survey whether one should take everything to the grave or owes to leave something behind (and if yes, then what %)

#118 ALBERTASTROPHE on 10.25.15 at 10:03 pm

I heard from some close friends today desperately worried about layoffs for their jobs in Calgary, financial services and retail. They had hoped any bad news might wait until the new year but now it looks like it will be pre-Christmas. They at least plan to be pro-active, put their house up for sale this week and take whatever they can get quickly.

On that note, the last window of reasonable return for Alberta real estate is about to close. Not just due to our lousy winters, either.

The Paris climate conference goes from November 30 to December 11. Trudeau is taking everyone with him. The UN is seeking a “binding and universal agreement” on action to keep temperature below 2 degrees C from pre-industrial levels. This is big.

“There are no jobs on a dead planet.” Just a taste of what the world will be hearing, and the Pope and others are already calling attention to.

Even if the summit ends in chaos, no one will ever look at oil and Alberta the same way again. Alberta oil extraction is absolutely doomed; it’s going to make the province and Canada a pariah with countries that matter, if it continues.

I have been quietly telling all my Alberta friends to sell if they even remotely think they may need to in the next few years.

Now it’s down to the crunch. The summit ends in 47 days. The worm will be turning by December 11. So sell your Alberta home, take any reasonable offer, I say, and get the contract signed by then.

47 days. It can be done, if the seller is realistic.

After that? Expect another 20% loss by next spring/summer.

So whatever you can get for your Alberta home, grab it now. Don’t be greedy or delusional. The ship is going down – you don’t have to go with it.

The next 47 days will change everything, Alberta.

#119 stage1dave on 10.25.15 at 10:06 pm

I don’t see any Seagram’s VO or Crown Royal in that grab bag…

#120 Lee bow on 10.25.15 at 10:20 pm

White crock bc: I believe that it will stay the same. Now reasoning is that (I trust) fed is now more concerned with market indices than inflation. Things seem to be going as they are goingm. Don’t touch them. Changing rates now would be a curve ball

#121 Nagraj on 10.25.15 at 10:23 pm

“I see the low expectations crowd is having a convention here tonight.”

I myself have very low expectations re dentists. I once went to a dentist to get this tooth pulled out. The damn tooth wouldn’t just come out. So the dentist stood on my left thigh with his left leg, braced his right foot against my forehead, and yanked as powerfully as he could. (He swore and perspired a lot too.) Still wouldn’t come out. So he says we’re gonna have to cut the gum (“we”!). So he cuts my gum. BUCKETS OF BLOOD. Of course he’s got the radio on, Golden Oldies, Doris Day singing “Que sera sera”. His assistant is waltzing with the mop. Finally he wriggles the tooth out and proudly shows it to me.

All suffering is as pointless as it is redemptive, and low expectations signify humility. Surely.

Nobody wants to be old, sick and poor all at the same time. But truth to tell, there’s worse in life to be afraid of.

#122 Brian Zeebeck on 10.25.15 at 10:24 pm

I read your blog every day. I retired 2 years ago after being in business for 28 years. I have no company pension and have $1.1 MIL rrsp along with a maxed TFSA. Along with other substantial funds left over from the business I need to live off my proceeds. I have a problem with the 7% safe return. It apppears that we are in a low return rate environment for the foreseeable future. I am budgetting at 4% return on a 80equity/20 fixed fund balanced portfolio. Fixed returns @2% and equity @3.6%(div with no real cap gain). We are flirting with deflation so therefore I can’t see a higher average return over the next five years.

Sounds like bad choices. — Garth

#123 Sheane Wallace on 10.25.15 at 10:34 pm

#50 Mark
……………………………..
ZURICH (Reuters) – Switzerland’s low interest rate environment could last years or possibly decades, the country’s financial regulatory chief told a Swiss newspaper on Sunday.

https://ca.finance.yahoo.com/news/swiss-low-rates-could-last-decades-financial-regulator-123944145–finance.html

It is time to run for the hills. It is going to get really ugly.

Keep you house, if paid outright, do not sell, get something that you cash flow will allow you to pay out or just put your money in the stock market + maybe some gold but for your children’s sake just get rid of any cash that you hold, the same for bonds.

stupid idiots!

#124 The American on 10.25.15 at 10:40 pm

At #47: Tony, you idiot… you said, “I’d move to all cash and rent. The same $400,000 townhouse sells for $40,000 in America and cash will certainly outperform stocks for at least the next decade. ”

Will you please provide an example of this? We’re all dying to see the same $40,000 townhouse here in the U.S.

#125 saskatoon on 10.25.15 at 10:41 pm

#73 Entrepreneur

socialism is wrong–both morally and logically.

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

#126 Macrath on 10.25.15 at 10:45 pm

All this raises an interesting question. Scrimp and saved most of our lives, now too conditioned to part with the cash.
When your already loaded down with all the material crap you can handle, how do you spend the dough before you go ?

Do you need to up your life style and hob knob with the rich and famous ? That certainly wouldn`t make me any happier.

#127 Charity on 10.25.15 at 10:48 pm

Hey Garth
How does the 90% rule work if one spouse is 45 yrs old and the other 35?

I see the low expectations crowd is having a convention here tonight. — Garth
As for your feedback to the crowd, perhaps they need to go talk to their therapist maybe they will feel more heard after a good session, instead of trying to find it on a blog.
Just sayin

#128 Ontario's Left Coast on 10.25.15 at 10:52 pm

My favorite line of the night… Freedom First, you little twerp, are nothing more than a pimple on my butt!

Bahaaahaa! Sums it up perfectly… Nobody’s gives a crap that you’ve lived in four provinces or that you hate women, maybe it’s time to move on.

#129 When will they raise rates? on 10.25.15 at 10:52 pm

#118 ALBERTASTROPHE on 10.25.15 at 10:03 pm

Informative post, thanks for sharing!

I can totally see JT’s handlers advising him to sign away Canada’s sovereignty with a “universal and binding” agreement, irrespective of Canada’s economic best interests in the name of “climate change”, and him being foolish enough to follow through… After all, his father signed away Canada’s sovereignty to foreign bankers… Like father, like son.

It seems he is wasting no time…

#130 NotAGreaterFool on 10.25.15 at 10:52 pm

Wonder what Trudeau will do with housing? More like Oliver? More like Flaherty?

What’s his plan? One only wonders..

http://www.canadianbusiness.com/economy/how-the-party-leaders-could-cool-the-housing-market-and-why-they-wont/

#131 Shadow McNight on 10.25.15 at 10:53 pm

Sort of in agreement

“The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth ”

Most people don’t understand that time is the most valuable commodity of all. My wife and I always took the time off in lieu of pay…at first the bosses and the coworkers couldn’t understand…..they thought we were stupid…until we came back from two month long holidays….grinning ear to ear….poorer…but richer in so many ways.

Once we sold the house..put everything in a storage locker and traveled for two years…came back…and the people we knew were still the miserable a-holes we’d left behind.

#132 For those about to flop... on 10.25.15 at 11:18 pm

#128 Ontario’s Left Coast on 10.25.15 at 10:52 pm
My favorite line of the night… Freedom First, you little twerp, are nothing more than a pimple on my butt!

Bahaaahaa! Sums it up perfectly… Nobody’s gives a crap that you’ve lived in four provinces or that you hate women, maybe it’s time to move on.

///////////////////////////////////////

Hey OLC I’m glad you liked it.
I took offence because the guy trolled me for trying to encourage guys to be more welcoming to females on the blog.
If a woman states something you disagree with ,fair enough argue the point not the person.
Only a small amount of people who read the blog bother to post a comment and so if someone new makes an effort especially a female ,I just don’t think it is fair to pile on when she was just stating what works for her.

#133 kommykim on 10.25.15 at 11:22 pm

RE:

#8 Sherry Danson on 10.25.15 at 2:16 pm
Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth
#11 Sherry Danson on 10.25.15 at 2:51 pm
Is frugality the goal of retirement? — Garth

Some people don’t need to spend money to feel happy. As long as someone is happy and content with their life, does it really matter how cheaply they live?

#134 George S on 10.25.15 at 11:30 pm

Some people make it their hobby to save money and get by with the least money possible. One of my aunts and uncles would listen to the radio in the dark rather than watch television or have the lights on so that they could save money on power. They would not eat new potatoes but instead eat last year’s potatoes until the end of august after breaking 3 foot long sprouts off of them because they felt that it was wasteful to eat new potatoes. Then she would wash and re-use depends when he needed them. The stories go on and on. Bat shit crazy? I certainly thought so, but that was what they liked to do. He got a defined benefit pension and they banked it all. They only used CPP and OAS for their living expenses and I think they even banked the CPP. No kids either. Ended up blowing it all out to some fundamentalist church missionaries that used to come and visit them and beg for money.

#135 kommykim on 10.25.15 at 11:32 pm

RE:

#27 213 fool on 10.25.15 at 4:45 pm
Is the duration a thing you can control through bond ETF purchases? Or is it for specific individual bonds?

There are short duration bond ETFs like VSB available. Pretty much all the large ETF providers have short duration bond ETFs available.

#136 Sheane Wallace on 10.25.15 at 11:37 pm

#130 NotAGreaterFool

It does not matter any more, since 2009 we have passed the point of no return. The can do anything they want. No repair to the damage caused by the cons is even remotely possible. loonie is toastl

#137 Mark on 10.25.15 at 11:50 pm

“Wonder what Trudeau will do with housing? More like Oliver? More like Flaherty?”

I suspect there isn’t an explicit ‘plan’, but rather, it will be management by crisis. I highly doubt that there will be any government measures to expand the CMHC though. After all, the government has another competing goal, and that is, reviving the non-FIRE segments of the Canadian economy. If anything, it may be politically convenient for Trudeau to pop the housing bubble quickly, and blame it on the previous Harper administration while enjoying the upside of better economic growth through capital allocation to non-FIRE sectors of the economy.

Remember that Trudeau is/was a renter. And certainly not for lack of access to money, that’s for sure. He may be smarter on this file than he lets on publicly. Just like he had some fairly sophisticated beliefs on small business taxation which unfortunately riled the Conservative simpletons.

#138 For those about to flop... on 10.25.15 at 11:58 pm

Where in bloody hell is Lenderby when I need her!

#139 Greyhelm on 10.26.15 at 12:03 am

hey Garth

Generally agree that most mutual funds are a rip-off. My dental hygienist told me how much she loves [email protected] and could never leave her. I wanted to tell her that she might have to work an extra year or two to retire to pay her fees (have a reference if you need one) but my mouth was full of stuff. I’ll tell her next time.

But not ALL mutual funds are bad. My wife’s entire RRSP ($300K+) is in Mawer Balanced. Mine is with PH&N (best fixed income house in Canada). We’re 50/50 until the next crash when we will go 60/40.

Total MER less than 1%. And either is available for advice whenever.

The major point is that with a conservative asset mix, YTD we are up 4% compared to your balanced ETF portfolio of -2%. And still 1.5% after withdrawals (we’re retired). That’s mainly due to Mawer.

MoneySense just reported that Mawer Balanced outperformed the CPP over the last decade (8% vs 7.6). But it still reported that there were several other good balanced mutual funds that did well (Beutal Goodman 6.2%, Leith Wheeler 5.6%, and PH&N 5.4 %). That’s vs a passive portfolio of ETFs at 5.2%. (I know Garth could do better, but better than 8%? Doubt it.)

I know most mutual funds suck. But not all.

And lay off Sherry. The goal of life is happiness. And many people get it from family, music, art (creating, not buying), or whatever. And some get it from things that cost money, such as travelling. I’m in the middle. But each to their own. Be happy Sherry (but spend if it will make you happy).

#140 Blacksheep on 10.26.15 at 12:11 am

Speaking of “Nine lives”

Glen’s not dead.

He’s under the dumpster, chillin.

#141 Greyhelm on 10.26.15 at 12:15 am

Sherry

Have you been to Paris? Or St. John’s NL? Both are great. And SO many other places. Sounds like you did your kids well. Time to enjoy.

#142 kommykim on 10.26.15 at 12:40 am

RE:

#81 Love my Kia on 10.25.15 at 8:51 pm
That being said, it would be nice to know how one can start to do their own investing from scratch. Where do you begin?

This is a good place to start:
http://canadiancouchpotato.com/about/

#143 Kinkalgary on 10.26.15 at 1:23 am

I heard from some close friends today desperately worried about layoffs for their jobs in Calgary, financial services and retail. They had hoped any bad news might wait until the new year but now it looks like it will be pre-Christmas. They at least plan to be pro-active, put their house up for sale this week and take whatever they can get quickly.

On that note, the last window of reasonable return for Alberta real estate is about to close. Not just due to our lousy winters, either.

The Paris climate conference goes from November 30 to December 11. Trudeau is taking everyone with him. The UN is seeking a “binding and universal agreement” on action to keep temperature below 2 degrees C from pre-industrial levels. This is big.

“There are no jobs on a dead planet.” Just a taste of what the world will be hearing, and the Pope and others are already calling attention to.

Even if the summit ends in chaos, no one will ever look at oil and Alberta the same way again. Alberta oil extraction is absolutely doomed; it’s going to make the province and Canada a pariah with countries that matter, if it continues.

I have been quietly telling all my Alberta friends to sell if they even remotely think they may need to in the next few years.

Now it’s down to the crunch. The summit ends in 47 days. The worm will be turning by December 11. So sell your Alberta home, take any reasonable offer, I say, and get the contract signed by then.

47 days. It can be done, if the seller is realistic.

After that? Expect another 20% loss by next spring/summer.

So whatever you can get for your Alberta home, grab it now. Don’t be greedy or delusional. The ship is going down – you don’t have to go with it.

The next 47 days will change everything, Alberta.

Dude whats up with the drama, tar sands will be around
As long as you drive or take transportation everyday, heat your house, heck most household products have oil or oil by products in them.
Alberta will be around for many yrs!!

#144 BadMagpie on 10.26.15 at 1:25 am

#124
Here’s three of them in the 35-50K range.

http://www.zillow.com/homedetails/1155-Old-Monrovia-Rd-NW-Huntsville-AL-35806/91813703_zpid/
http://www.zillow.com/homedetails/238-Calicoe-Dr-238-Akron-OH-44307/35448907_zpid/
http://www.zillow.com/homedetails/10601-South-Dr-APT-93-Houston-TX-77099/28346810_zpid/

#145 Freedom First on 10.26.15 at 1:46 am

#103 When will they raise rates?

I am a Boomer. As for your constant political and media provoked generational warfare-FU .

#146 Freedom First on 10.26.15 at 1:50 am

#106 for those about to flop

Man up.

#147 Freedom First on 10.26.15 at 2:00 am

#128 Ontario’s Left Coast

Stop lying. I love women. I just don’t want to live with one. A$$hole.

#148 BC Guy on 10.26.15 at 2:02 am

“Sayin’ nothing. Learn what an ETF is. — Garth”

Boy, that was deep.

Can you ever give a decent answer or do you always have to give a sneering one-liner?

I know what a friggin ETF is. And I know that their basket of equity assets are managed by companies that charge fees. And I know that companies are fraught with corruption and scandals. So, a company like say Blackrock that sells ETFs, for example, could have an accounting/fraud/corruption scandal that could negatively affect the ETF funds.

#149 Ralph Cramdown on 10.26.15 at 2:08 am

All y’all need to get a little more Zen in your outlook. It isn’t about creating great piles of money so as to enjoy expensive stuff when you’re old and wrinkly. Nor is it about self-denial so you can be old and wrinkly without a great pile and without being a burden. And anyone who thinks that time is their most valuable commodity hasn’t, I think, made peace with their own mortality.

True freedom comes in taking pleasure from the simple things, in coming to terms with one’s mortality early in life rather than battling it later, in managing one’s finances AND one’s desires such that there’s no worry about being able to ‘afford’ things, and in letting one’s fellow man shoulder the burden of driving the consumer economy forward.

#150 The Great Canadian Bubble Co. on 10.26.15 at 2:15 am

Garth must really hate the likes of Mr Money Mustache.

#151 Vangrrl on 10.26.15 at 2:19 am

I see the low expectations crowd is having a convention here tonight. — Garth

That was hilarious! What a good thread tonight, laughed my way through it. For the record I’m on the side of those who applaud Sherry and her ‘frugal’ ways (highly subjective). As for hoarding money, they have kids and grandkids, so they can leave it to them.
Or maybe, Garth, they plan to leave it all to a dog shelter… !

#152 BS on 10.26.15 at 2:22 am

The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth

Retirees like this baffle me.

Sherry has $500K in liquid assets, a $450K paid for house and a guaranteed $40K per year indexed pension for life yet continues to save $830 every month after retirement. What is she saving for? Is she waiting until she is 85 to have some fun? She could easily spend double the $2500 per month she is currently spending for the rest of her life and not touch the principle of the $500K.

What was the point of saving all those years if she doesn’t want to spend it now in the prime of retirement when she is still able to enjoy it?

#153 Leo Trollstoy on 10.26.15 at 2:39 am

Nobody’s gives a crap that you’ve lived in four provinces or that you hate women, maybe it’s time to move on.

Apparently you care enough to comment.

Bahaahaa!

#154 Leo Trollstoy on 10.26.15 at 2:47 am

When your already loaded down with all the material crap you can handle, how do you spend the dough before you go ?

Easy. Spend it on experiences for your loved ones.

One of my friends has an annual trip for his kids and grandchildren. Last year was a cruise. This year was Scottland. Tons of fun and memories.

He knows that they don’t take cash in the afterlife.

#155 Dave in Kincardine on 10.26.15 at 6:57 am

#8 S Dawson, You are doing fine. Garth is grumpy today.

Bravo and congratulations. The true goal in retirement now is to try and keep your health. The average NA person gets a major illness about 11 -13 years before the plug is pulled. Who wants 11 years of fighting diabetes, or heart or cancer or stroke. Good Luck and DLTBGYD.

Grumpy? I heard that. — Garth

#156 Ronaldo on 10.26.15 at 7:11 am

154 Leo Trollstoy on 10.26.15 at 2:47 am

”When your already loaded down with all the material crap you can handle, how do you spend the dough before you go ?”

”Easy. Spend it on experiences for your loved ones.

One of my friends has an annual trip for his kids and grandchildren. Last year was a cruise. This year was Scottland. Tons of fun and memories.

He knows that they don’t take cash in the afterlife.”

Makes more sense than the guy who was teed off at his wife so he stated in his will that when he died he wanted all his money burried with him. So when he keeled over she wrote him a cheque.

#157 Loving life in Alberta on 10.26.15 at 7:48 am

#118 ALBERTASTROPHE

Alberta will be just fine. Global warming is a total hoax and a fraud. The earth has always warmed and cooled. Science proves this. You have allowed the wool to be pulled over your eyes.

Albertas economy is in a temporary dip and thats all.
Oil prices will rise and jobs will return. Anyone selling a house here now will be crying within a year for the equity they could have built.

Politicians will never come together on some big deal like this. Just wont happen.

Your drinking the koolaid buddy. There are no good options to oil and wont be for probably a century. Buy the dips and make money is the best plan.

#158 Bottoms_Up on 10.26.15 at 8:16 am

#157 Loving life in Alberta on 10.26.15 at 7:48 am
————————————–
That’s not an argument against climate change by the way.
Check the facts, and get back to us with a better attempt to refute the now proven fact that humans are dumping more carbon into the atmosphere than any other source, and that the earth has never warmed faster over such a short time period.

#159 Millmech on 10.26.15 at 8:20 am

People like Sherry will always save it’s a lifelong habit,that’s how she is where she is.If she wasn’t a saver she would probably have a bigger house and mortgage and would be in big debt.Its not something that is just switched on and off and hopefully more people will be like this and realize that stuff doesn’t make you happy.

#160 TurnerNation on 10.26.15 at 8:31 am

ALBERTASTROPHE is on to something.

As others have pointed out the Industrial Age has ended.
We’ve entered a new age, one of technology and envinronment worship.

The pope came here to sell that, not religion. The Vatican is a ultra rich private fifedom. Now you know why.

Your news gods are the techno people you follow on facebook for daily manna: Apple, Tesla, Facebook gods.

– Soon, questioning this new environmental religion will bring severe penalities, as questioners of the church found in middle ages.

– You will lose your right to buy/sell, do business, or even family home.
– Using a woodstove to heat your home? Banned.
Freedom to travel via airplane? Curtailed. Only for elites.

Trees will be assigned rights as persons.

We have a zero tolerance policy at home. But overseas, let’s drop 500lb! And destroy their infrastructure and take over.It’s democratic.

#161 Craig on 10.26.15 at 8:42 am

Detached home in kingdom 416. #winning

#162 TurnerNation on 10.26.15 at 8:42 am

Predictions: carbon taxes coming to everything.

Remember when you had to give 10% of it income to the church? Or else? Now it will be toward the environmental religion. New age is upon us.
They will have salesman for every demographic. Obama. Oprah. Apple and Fb and tech gods.
Hunky rock star Pms. It’s a done deal.

#163 busman7 on 10.26.15 at 8:46 am

Spending $2,500 a month? Wow. The high life. Is that what you worked decades for? — Garth

Strange statement, I spent a year travelling the world for only $3,000 a month.

Where I am retired, living a block away from the beach in a paid for house, I couldn’t spend $2,500 a month, unless I through free parties for the whole community every weekend!

Typical Canadian urban house & lifestyle – $5,000 property tax (2 months), car insurance $2,500 (1 month), life insurance, two people annual (1 month), property maintenance (2 months), food yearly (2 months), utilities (1 month), psychotherapy (3 months). Yes, the high life! — Garth

#164 The American on 10.26.15 at 8:50 am

At #28: Willworkforpickles, oh my God. Get a grip. Speak for yourselves. North America isn’t falling behind the technological eight ball. The U.S. sets the bar. Period. Canada is falling behind the eight ball, but that’s nothing new. Luckily for you, we’re here to protect you at American tax payers’ expense – not canadians. Your military, consisting of six row boats, 11,426 rocks, 172 sling shots, a handful of bottle rockets, 43 rolls of duct tape, 3 Smart cars, 1 taser, and 9 shih tzu puppies, won’t suffice to protect yourselves.

#165 Enough with the Entitlements on 10.26.15 at 8:57 am

#148 BC Guy

“Can you ever give a decent answer or do you always have to give a sneering one-liner?”

Really? How much are you paying for all this free advice that is owed to you?

#166 Bottoms_Up on 10.26.15 at 9:11 am

#162 TurnerNation on 10.26.15 at 8:42 am
————————————-
Or, the tax and cap is going to a cause that will see welfare and safety benefits for billions of humans. You do realize we are tracking on a path for +9 degree warming by 2100. Beachfront Halifax….I’m picturing Jamaica. Location, location, location.

#167 Bottoms_Up on 10.26.15 at 9:16 am

#160 TurnerNation on 10.26.15 at 8:31 am
——————————-
No really, it should be polluter pay. No one will ban firewood burning. The major sectors for carbon output are coal burning, petroleum industry, autimobiles/airplanes, agriculture, livestock. Home fireplaces is small potatoes.

#168 Bottoms_Up on 10.26.15 at 9:20 am

#148 BC Guy on 10.26.15 at 2:02 am
———————————
That doesn’t make sense. An ETF tracks the value of the underlying stocks. The issuer of the ETF cannot impact the value of the ETF other than changing their management fee, which is very low to begin with.

#169 Nora Lenderby on 10.26.15 at 9:44 am

$$2,500 … psychotherapy (3 months). Yes, the high life! — Garth

Well played, sir, well played!

Or they can come here and bare all to the assembled herd of rag-pickers…see? This is a frugality blog!

#170 Nora Lenderby on 10.26.15 at 9:46 am

#138 For those about to flop… on 10.25.15 at 11:58 pm
Where in bloody hell is Lenderby when I need her!

Asleep. You chaps all seem to be holding your own as usual, I see.

#171 Paul on 10.26.15 at 9:46 am

#164 The American on 10.26.15 at 8:50 am
At #28: Willworkforpickles, oh my God. Get a grip. Speak for yourselves. North America isn’t falling behind the technological eight ball. The U.S. sets the bar. Period. Canada is falling behind the eight ball, but that’s nothing new. Luckily for you, we’re here to protect you at American tax payers’ expense – not canadians. Your military, consisting of six row boats, 11,426 rocks, 172 sling shots, a handful of bottle rockets, 43 rolls of duct tape, 3 Smart cars, 1 taser, and 9 shih tzu puppies, won’t suffice to protect yourselves.
——————————————————————–
I’LL HAVE YOU KNOW, BOTTLE ROCKETS ARE ILLEGAL IN CANADA!

#172 Nora Lenderby on 10.26.15 at 9:59 am

#131 Shadow McNight on 10.25.15 at 10:53 pm
“The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth ”

Most people don’t understand that time is the most valuable commodity of all. … Once we sold the house..put everything in a storage locker and traveled for two years…came back…and the people we knew were still the miserable a-holes we’d left behind.

Oh, they do understand, but they are trapped in their dependence and know it, sorry to say. We did this too and ran away to sea for a couple of years.

When we came back, nearly all our colleagues and “friends” hated us. It was quite remarkable. One silly woman (senior developer and a bit weird anyway) had a breakdown over it. Presumably we proved that they were choosing to live the way they did.

And when we went off to early retardment (sic) only the few sensible ones kept in touch.

However, friends are to be found everywhere :-)

#173 Rational Optimist on 10.26.15 at 10:10 am

Maria and her husband got lucky. She neglects to mention when they bought the townhouse, but if they’re 45 maybe they bought it as long as 15 years ago, and have benefited from illogical price appreciation. My first thought was: why weren’t they saving instead of paying the mortgage down? but of course their mortgage was modest back when they bought. I guess they resisted the temptation to pull a Mulcair and refinance every 18 months, so that’s an accomplishment.

If she thinks that someone will give them $400,000 to take the townhouse of the hands, and also thinks that it will cost $1,500 to rent something similar, she definitely answered her own question. That’s a no-brainer and, without kids, they don’t even have a lot of the emotional arguments people make in favour of purchasing.

I wonder how many people are in this exact situation. Once they all wise to the fact that they have to sell, almost no one will be able to.

#174 saskatoon on 10.26.15 at 10:28 am

#166 Bottoms_Up

dude…if you are that worried:

how ’bout you start reducing your carbon footprint on this blog?

#175 Daisy Mae on 10.26.15 at 10:29 am

#85: “They travel the continent visiting their grandchildren, and taking in country music concerts (gag me), and living life.”

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

We have those who prefer (‘Live and Let Die’) wearing skins and sporting dreadlocks…camping in lean-tos, roasting rodents over an open fire. To each, his own. Ugh….

#176 Daisy Mae on 10.26.15 at 10:32 am

…and one of them is a divorced ex-realtor! LOL

#177 Holy Crap Wheres The Tylenol on 10.26.15 at 10:46 am

#164 The American on 10.26.15 at 8:50 am

At #28: Willworkforpickles, oh my God. Get a grip. Speak for yourselves. North America isn’t falling behind the technological eight ball. The U.S. sets the bar. Period. Canada is falling behind the eight ball, but that’s nothing new. Luckily for you, we’re here to protect you at American tax payers’ expense – not canadians. Your military, consisting of six row boats, 11,426 rocks, 172 sling shots, a handful of bottle rockets, 43 rolls of duct tape, 3 Smart cars, 1 taser, and 9 shih tzu puppies, won’t suffice to protect yourselves.
_____________________________________________
Careful now America, don’t insult Canada’s navy. My uncle was on Corvettes and then doing escorts running to Murmansk. Many brave men died in the Canadian Navy while the USA was still trying to figure out its own isolationist policies re WWII. The notorious Murmansk Run to northern Russia claimed the most ships and men, there were no safe havens anywhere for merchant seamen. Whether in the coastal waters of North America, the North or South Atlantic, the Mediterranean, the Indian Ocean or the Pacific, all the waters were dangerous and Canadian ships with Canadian crews traversed them all for 3 years before the USA fired a shot from one of their ships. Because the United States, the source of much of the supplies for Britain, was now in the war, in the summer of 1942 the HX convoys shifted to New York. The United States Navy, however, was not yet in a position to defend these convoys, so Halifax-based Canadian warships shepherded them between New York and Newfoundland, and then brought westbound convoys from Newfoundland to New York. These tasks were in addition to the comprehensive network of coastal convoys between Canadian and northern US ports. At the same time, Canadian escort vessels still formed a major part of the mid-ocean force that took convoys between Newfoundland and British waters and, during the summer and autumn of 1942, these corvettes and destroyers faced a new German ‘wolfpack’ offensive that was stronger still than the assault in 1941.
I recall when I took my early grade school history in Florida we were taught the United States war of Independence could only be won on the ground as the
US Navy was non-existent. Thus Rule Britannia! For example, Britain was able to blockade France during the Napoleonic Wars, the United States during the War of 1812, and Germany during World War I. It wasn’t until the post-World War II period, that the United States has had command of the sea. I’m not disagreeing that our Navel power has become a joke. Post war politicians such as Pierre Trudeau decimated our armed forces. Just keep in mind people like my late uncle served in the RCN and many brave souls died serving that Navy. They were proud, brave men try not to insult that Navy that they served under.

#178 Holy Crap Wheres The Tylenol on 10.26.15 at 10:51 am

Maria and her husband are kidless with two cats and a small townhouse. “We’re DINKs,”
______________________________________________
Yep that pretty much sums it up!

#179 Holy Crap Wheres The Tylenol on 10.26.15 at 10:53 am

Sent the photo to my Irish wife. She sent back a note saying, “Absolutely, so whats your point.”

#180 JimH on 10.26.15 at 10:54 am

#148 BC Guy on 10.26.15 at 2:02 am
“I know what a friggin ETF is. And I know that their basket of equity assets are managed by companies that charge fees. And I know that companies are fraught with corruption and scandals. So, a company like say Blackrock that sells ETFs, for example, could have an accounting/fraud/corruption scandal that could negatively affect the ETF funds.”
==================================
Yes, companies like Blackrock, Vanguard, iShares &etc could have scandals like the ones you describe.

The impact on the individual ETF’s they sell would be marginal if at all. The failure of Lehman Brothers several years ago might be helpful. At that time, Lehman Indexes were the basis for over 50 ETF’s (mainly lower liquidity fixed-income). Many holders of ETF’s carrying the Lehman name (iShares TIP, SHY, AGG for example) were concerned. Yet those ETF’s weathered the storm quite well.

There have been many ETF’s that have been liquidated for a variety of reasons, some scandalous, most simply due to poor performance. But as ETF’s actually hold assets, any fund liquidation results in redemptions to holders.

There was also great concern back in 2008-early 2009 that waves of redemptions would result in a liquidity crisis, and there were ETF’s that limited redemptions. But by and large, ETF’s weathered the storm very well. (ETN’s on the other hand did not)

The exceptions are 2x and 3x leveraged inverse ETF’s which depend on splits these days to keep from generating NAV’s approaching zero.

Investing and/or trading really boils down to managing risk. As most ETF’s worth considering hold hundreds of equities and securities, they represent an outstanding method for diversification and balance. The issuing company may have a scandal, but the underlying holdings are likely to be unaffected.

No investment is risk-free. But in the hands of a prudent investor, high-volume ETF’s come very close.

#181 Bose on 10.26.15 at 10:55 am

We spend $2,500 a month and have $830 a month left over.

I would also like to know how and where do you survive in so less a budget breakup would be appreciated, It will be educational for me as I am trying to figure out my future needs, so far your numbers are less than half of what I have and I was being conservative.

Thanks in advance

#182 SWL1976 on 10.26.15 at 11:02 am

#164 The American

Your military, consisting of six row boats, 11,426 rocks, 172 sling shots, a handful of bottle rockets, 43 rolls of duct tape, 3 Smart cars, 1 taser, and 9 shih tzu puppies, won’t suffice to protect yourselves.

Protect us from who???

The fabricated boogy man created by the American government after the crime of the century

Hint – 9/11

I’m more concerned with the psycho’s behind the scenes in Washington then I am about a ‘terrorist group’ half a world away.

The war on terror is your governments war and it is a war with no clearly defined enemy. By design it is a perpetual war with a dynamic enemy that can purposely be redefined to suit the needs of the perpetrator.

Hint – the central bankers and many branches of the US government

Hypnotized from the day you were born

#183 Holy Crap Wheres The Tylenol on 10.26.15 at 11:06 am

#172 Nora Lenderby on 10.26.15 at 9:59 am

#131 Shadow McNight on 10.25.15 at 10:53 pm
“The point of having money (which she does) is to make time more valuable. It is not to hoard the cash. Seems simple to me. — Garth ”
Most people don’t understand that time is the most valuable commodity of all. … Once we sold the house..put everything in a storage locker and traveled for two years…came back…and the people we knew were still the miserable a-holes we’d left behind.
Oh, they do understand, but they are trapped in their dependence and know it, sorry to say. We did this too and ran away to sea for a couple of years.

When we came back, nearly all our colleagues and “friends” hated us. It was quite remarkable. One silly woman (senior developer and a bit weird anyway) had a breakdown over it. Presumably we proved that they were choosing to live the way they did.
And when we went off to early retardment (sic) only the few sensible ones kept in touch.
However, friends are to be found everywhere :-)
____________________________________________

I have just started this idea of semi retirement, uuugh! Only checking into the office once or twice a week. One of our sons is running the company now, and quite well I might add. Since I sort of left I sailed the great lakes all summer. Took the grandchildren to Great Wolf Lodge, Wonderland, downtown to Ripley’s aquarium, Blue Jays Games, a weekend in New York City and so on. Now the grandchildren are back in school we are heading to our place in the Bahamas but coming back at
Christmas. You are correct though, friends are to be made everywhere. Good friends however are hard to come by. Unfortunately as we retire some of our good friends retire permanently 6 ft under! So yes time is the most precious commodity and it can not be bought or sold at any price.

#184 Smoking Man on 10.26.15 at 11:13 am

Canada is fkg DOOMED

Meet Justin’s right hand man…..
https://en.m.wikipedia.org/wiki/Gerald_Butts

#185 Mike in Edm on 10.26.15 at 11:53 am

#56 Oceanside on 10.25.15 at 7:40 pm
http://news.nationalpost.com/news/canada/canadian-politics/ndp-to-table-largest-deficit-budget-in-alberta-history-as-provincial-revenues-plummet-with-oil-prices

They don’t have a choice in considering what they have inherited from the long Con rule, I’m sure the redneck/right will heap all the blame on Notley…..
******************************************
Notley has a bunch of choices… Stop spending so damn much for one? I’m predicting they say “$7billion”, but will post some voodoo economics +/or say that relies on $60oil (which ain’t happening), and in reality that $7billion will be more like $10billion.

#186 kommykim on 10.26.15 at 11:53 am

RE:

#172 Nora Lenderby on 10.26.15 at 9:59 am
We did this too and ran away to sea for a couple of years.

I was 16 when my family did the same thing from 1981-1984. South Pacific.
When and where did you sail off to, if you don’t mind me asking?

#187 White Crock BC on 10.26.15 at 12:08 pm

For: The American:

I guess if we borrowed $20 TRILLION dollars, we could afford some pretty cool hardware too.

#188 Ronaldo on 10.26.15 at 12:19 pm

#183 – Holy Crap

”So yes time is the most precious commodity and it can not be bought or sold at any price.”

For sure. And as you get older you realize this more and more. Life is precious. Don’t waste it. All the wealth in the world cannot replace good health.

#189 Dave on 10.26.15 at 12:34 pm

SherryGate….love it.

Look, Sherry and her husband are much like my parents…

They didn’t have the advantage of having a blog like Garth’s to hone their financial prowess and thus live on much more than $2,500/month.

So, Sherry and her husband have made Their situation work…and they are seemingly happy, which is commendable. Great…good for them.

Remember, this is Garth’s blog….the way Sherry and her husband are living their lives is not at all in line with the main theme of Garth’s blog.

While Sherry and her husband are happy fine dining on fish sticks and coleslaw, Garth is trying to teach us ways to live/invest our money, so that we might have an opportunity to dine on filets with fois gras on top (if that’s your thing).

Like Garth said, noone forced Sherry to come on here and share her secrets to success…so she’s open to critique…seemingly positive and negative, depending on what side of the aisle you sit on.

My two cents….stick that in an ETF ;)

#190 fancy_pants on 10.26.15 at 1:14 pm

http://www.dailymail.co.uk/news/article-3289264/The-shortage-properties-market-led-skyrocketed-costs-families-struggling-property-ladder.html

mass immigration into Canada has potential to offer similar results here. and oil wont stay cheap forever. Other than Vancouver and Toronto, if you are going long on RE, and keep it fiscally manageable, you should be fine. although I don’t work here so mere speculation.

But we don’t have ‘mass immigration.’ It has remained stable at 0.8% of the population. — Garth

#191 Saskatchewanite on 10.26.15 at 1:19 pm

It is sad when a person lives unhappily and in a mental state of perpetual lack and then keels over leaving behind a large pile of unspent cash he broke his back to earn throughout his lifetime. It is honourable when a person lives simply yet happily and ends up leaving behind that same large pile of unspent cash as part of his plan to ‘give back’. It’s less about the pile of cash as it is about the mental state we’re in while accumulating and spending it. I guess it’s about balance. On the other hand, moderation in all things – including moderation! We’ve all got to go a little nuts sometimes, otherwise life is just boring! My husband and I are trying to save for early retirement and also enjoy life with our young kids as it is happening right now – we’re figuring it out – we’re not always ‘on track’. Sometimes I feel like we’re stuck in the rat race – just funnelling all our money into the future – consciously choosing misery because “what if something happened”. And other times, like a few weekends ago when we spent $160 on a powered parachute ride for all of us, I feel like we are striking that balance. I think when people have lived through what it is like to have nothing, you understand the importance of saving for the future, but we need to remind ourselves to enjoy life a little too, otherwise, what’s the point of it all? The trick is to not get addicted to luxuries, otherwise, our definition of happiness becomes unsustainably narrow or we retire in misery. Here’s a fresh approach from Mr. Money Mustache: http://www.mrmoneymustache.com/2013/08/29/luxury-is-just-another-weakness/

Selfish perspective. Money spent on luxuries is cash flow to all of the families engaged in the business of providing them. — Garth

#192 fancy_pants on 10.26.15 at 1:20 pm

#10 Rosina on 10.25.15 at 2:44 pm

why? to pay for your sins for voting liberal. um. no. I wouldn’t stuff your extra $ in there anyways, the govt will need it.

#193 Bottoms_Up on 10.26.15 at 1:21 pm

#25 Horse Shit! on 10.25.15 at 4:27 pm
—————————–
Yes, and humans once believed the sun rotated around the earth, the earth is flat, and stars are little holes in the sky revealing the presence of God. So your historical argument carries no weight. If you care to learn about the future of our planet, here is the research:
http://www.ipcc.ch/report/ar5/syr/mindex.shtml

#194 SunShowers on 10.26.15 at 1:25 pm

“Prime Minister Harper yelled at me a lot and made me practice over and over saying ‘that the economy’s not in the crapper’. The whole balanced budget thing? Smoke and two-way mirrors…don’t tell him I said that, please.” – Joe Oliver to Canada AM.

Priceless.

#195 SunShowers on 10.26.15 at 1:26 pm

Satire sometimes has the most truth to it, I find.

#196 Patrick on 10.26.15 at 1:39 pm

#184 Smoking Man on 10.26.15 at 11:13 am

are you just realizing this now?

Gerald Butts is the man behind ‘cut the TFSA & increase CPP because people aren’t saving enough for retirement’. Other illogical Butts trademarks include ‘increase hydro costs to drive ontario manufacturing’. It doesn’t matter if it works, it gets votes.

#197 kommykim on 10.26.15 at 1:47 pm

RE:

Selfish perspective. Money spent on luxuries is cash flow to all of the families engaged in the business of providing them. — Garth

Wow. What flavour of KoolAid is that you’re drinking?
Does it make me a bad person because I don’t want to buy someone’s overpriced product?

That’s a stretch. The comment merely underscores that wealthy people who spend a lot are good for the economic well-being of many others. We could use more of them. — Garth

#198 Sheane Wallace on 10.26.15 at 1:58 pm

Typical Canadian urban house & lifestyle – $5,000 property tax (2 months), car insurance $2,500 (1 month), life insurance, two people annual (1 month), property maintenance (2 months), food yearly (2 months), utilities (1 month), psychotherapy (3 months). Yes, the high life! — Garth
…………………………………………………….
lol.
The psychotherapy bill for me is much higher than 3 months.

‘One Flew Over the Cuckoo’s Nest’ is my daily experience lately.

#199 saskatoon on 10.26.15 at 2:02 pm

#197 kommykim

garth is accurate here.

take the proliferation of cell phones:

if wealthy people didn’t buy/support them initially…

#200 gut check on 10.26.15 at 2:35 pm

Maria,
If you are happy where you are living you should stay put.
SERIOUSLY
The rental market is insane.
Go and look at it first – I mean GO and look at some of them. Think about noise & construction projects (road work, adjacent buildings or units, etc) consider access to laundry, parking, outdoor space. I don’t know if you smoke or have pets but people hate those two things. I mean they really, really hate them in potential tenants.

You are comfortable and doing okay – don’t trade that for a chance at the stock market casino. Instead, try and figure out how you can BRING IN more $$ – it’s not as difficult as you think, and it does not mean getting another job. The extra money you bring in should not be in CDN.

Put your thinking cap on and keep the homestead. I cannot tell you how gross it is to smell other people’s fish and chips, have to get fully dressed to go put more $$ into a clothes dryer, Not be able to grow so much as a tomato plant, deal with ‘maintenance’ by landlords, and all the while to STILL get no return on all the $$ in the bank.

#201 kommykim on 10.26.15 at 2:41 pm

RE:

#199 saskatoon on 10.26.15 at 2:02 pm
#197 kommykim
garth is accurate here.
take the proliferation of cell phones:
if wealthy people didn’t buy/support them initially…

Actually, these threads started with Garth criticizing Sherry Danson (#8) for only spending $2,500 a month and NOT spending ALL of her retirement income stream. I don’t consider Sherry Danson to be wealthy.

As for cellphones, they are still overpriced gadgets. $769.00 to $1,029.00 for an iphone6? The monthly $$ spent on a dataplan? You’ve got to be kidding me!
Yea, you can get a cheaper phone/plan but we were talking about luxury here.
The old analog cell tower infrastructure that the rich supported/built is long gone now. The new systems are totally supported by the middle class phone addicts. The rich just provide venture capital and represent only ~2% of the subscriber base.

#202 The American on 10.26.15 at 2:51 pm

At #187: White Crock BC, my apologies. I forgot to add to the canadian military’s arsenal 3 pair of finger nail clippers and 14 can of Aquanet. Sad.

#203 The American on 10.26.15 at 2:53 pm

Holy Crap WTT, I respect the cut and paste.

#204 Rainclouds on 10.26.15 at 3:07 pm

#164 American…….

Was taking a tour of the Missouri at Pearl Harbour couple of years ago. Got to the spot on the deck where the Japanese surrendered.

The “tour guide” went ON and ON about how ” OF COURSE the CANADIAN signed on the wrong line”

Well yes, he was correct, BUT neglected to mention this gentleman was awarded two distinguished cross 1916/18 and one French medal. One of the crosses was due to having his eye shot out ………..

#205 ARP on 10.26.15 at 3:10 pm

CMHC on the rise in unsold homes and admitting “Canada’s house price changes are uneven, with rapid increases in Toronto and Vancouver offset by a slowdown in Calgary.”

http://www.cbc.ca/news/business/cmhc-housing-outlook-1.3289131

#206 saskatoon on 10.26.15 at 3:13 pm

#201 kommykim

“The old analog cell tower infrastructure that the rich supported/built is long gone now.”

this is exactly the point.

#207 Smoking Man on 10.26.15 at 3:38 pm

#184 Smoking Man on 10.26.15 at 11:13 am

are you just realizing this now?

Gerald Butts is the man behind ‘cut the TFSA & increase CPP because people aren’t saving enough for retirement’. Other illogical Butts trademarks include ‘increase hydro costs to drive ontario manufacturing’. It doesn’t matter if it works, it gets votes.
……..

Wow he was Daltons boy too…….Look how that turned out.

I’ll wait and see. But!!!!!

I think I may have to move everything to the USA including my fat ass.

#208 Smoking Man on 10.26.15 at 3:44 pm

#193 Bottoms_Up on 10.26.15 at 1:21 pm
#25 Horse Shit! on 10.25.15 at 4:27 pm
—————————–
Yes, and humans once believed the sun rotated around the earth, the earth is flat, and stars are little holes in the sky revealing the presence of God. So your historical argument carries no weight. If you care to learn about the future of our planet, here is the research:
http://www.ipcc.ch/report/ar5/syr/mindex.shtml
………………….

Your an Idiot..
But so is your new Prime Minister and his back door man..

Your going to get everything you dreamed of, except the truth. Let me know poverty works for you in a few years from now.

Fk Idiolog Stupid Tree Huggers.

They can’t tell the axis of the earth in relation to the sun is what gives us Heat in the summer and cold in the winter.

I kind of like it……

They will learn the hard way

#209 kommykim on 10.26.15 at 4:03 pm

RE:

#206 saskatoon on 10.26.15 at 3:13 pm
#201 kommykim
“The old analog cell tower infrastructure that the rich supported/built is long gone now.”
this is exactly the point.

Very little additional new technology was required for the first analog cell system. An analog cell phone was little more than a 2 way radio interfaced to a microprocessor, both of which existed in the pre cellphone era. Mountain top repeater systems already existed. Trunked telephone systems already existed. It was simply another wave in the evolution of technology produced for our consumer driven economy.
The fools (gotta have the latest) and the rich simply rode that wave, although slightly ahead, along with the rest of us.

#210 Retired WI Boomer on 10.26.15 at 4:03 pm

#182 SWL1976

Best lines of the day.

We here are just beginning to wake up, and I think the rulers are keenly aware of it….

#211 TurnerNation on 10.26.15 at 4:38 pm

Berman’s take. Mr. Etf.

Click on my name…can’t seem to paste here.

#212 kommykim on 10.26.15 at 4:46 pm

RE:

#208 Smoking Man on 10.26.15 at 3:44 pm
Your going to get everything you dreamed of, except the truth.

That was very prophetic considering the remainder of your post.

#213 Receive a Steinway Piano and Rolls Royce Car when you purchase a Penthouse at Trump Residences Toronto on 10.26.15 at 4:49 pm

Receive a Steinway Piano and Rolls Royce Car when you purchase a Penthouse at Trump Residences Toronto

#214 Koolaid on 10.26.15 at 4:50 pm

Receive a Steinway Piano and Rolls Royce Car when you purchase a Penthouse at Trump Residences Toronto.

What a deal!!!! Get it before it’s sold out.. LOL

#215 espressobob on 10.26.15 at 5:00 pm

Maria and her husband have a paid for asset, and no clue investing wise. They’re mid forties and have oodles of time to work on their weakness.

Why not learn the subject or hire a fee based advisor to get the job done?

Mutual funds sold by commissioned “salespeople” suffer two levels of outrageous fees!

First, is the commission the friendly broker enjoys. When you trade, 2% or $200, whichever is higher. Maybe $150 to buy into a mutual fund “front load” or worse, with a no fee “rear loaded” jail cell. Suck that up for seven years.

Second the dreaded fund manager and their take, and most partake in the profession of incompetence. Don’t get me started!

ETF’s alleviate the crap by just tracking major indices (benchmark) at very low cost.

Those “sparkplugs” in the pic above come in handy when dealing with [email protected] or wood gundy.

#216 conan on 10.26.15 at 5:31 pm

#208 Smoking Man on 10.26.15 at 3:44 pm

There is a cost to climate change but it sounds like you do not want to listen to the scientists.

Property insurance companies have been warning about this for years. They study the claims and compare it to previous experience.

Insurance is the “canary in the coal mine” for the economy and health indexes . Always has been and always will be.

No offense but if I compare data to :

“Your an Idiot..
But so is your new Prime Minister and his back door man..”

I am going to go with the data.

#217 Jerry Greenblatt on 10.26.15 at 6:04 pm

Climate Change Fraud….”They tortured the statistics until they came up with what they wanted”.

Line up for tickets to the Obama book tour gang.

http://theweek.com/articles/584216/why-climate-justice-india-west-each-others-throats

Justin…being widely called “not the brightest guy in the room” has suggested that Canada get behind Obama….I think it’s the other way around.

#218 earthboundmisfit on 10.26.15 at 6:13 pm

Somebody piss on your cornflakes this morning, Mr.T. ?

#219 s;ick on 10.26.15 at 10:11 pm

‘Millionaire’ homeowners are only millionaires when they sell.
does that mean if I own a million bucks worth of BCE, and have no debt, that I’m not a millionaire?
slick