Choices

SELFIE modified

Do you have financial regrets? Other than reading this blog, of course? Are there fundamental things you’d change about how you’ve handled money, if you could go back in time? Should you have married the geeky guy who went on to become a millionaire (geeky) dentist? Or bought that 1970, 7-litre Hemi-Cuda when it was new? Or avoided your first wife? Or not dumped your bank stock in the winter of 2009? Or actually learned something about investing before you turned 45?

Most people regret a lot. A survey last week in the States found three-quarters of people moan about past money decisions. The greatest shortcoming is what you might imagine – not saving for retirement early enough. So, Yanks are like Canucks. More live paycheque-to-paycheque, have the bulk of their net worth in non-financial assets, don’t have juicy pensions and are massively unprepared for the WTF moment when they turn 60.

The biggest enemies we have are emotion and ignorance. At least one of those is fixable.

Not a day of mine passes without hearing from some poor schlep whose parents are basket cases. It’s astonishing how many Canadians (at last count, more than half) believe that CPP and OAS pay enough to scrape by on in retirement. They don’t. Get over it. The average public monthly pension cheque is just over $600, while the old age supplement pays $563. That’s $14,000 a year, so even a couple collecting both would have a retirement income of less than thirty grand. If you live in a cabin outside Tatamagouche and really like foraging and insects, that might be okay. Otherwise, it sucks.

The crap really hits the retirement fan when you start needing some help – which most people do at some point. Thus, it’s important not just to save (and consume your money over time) but to invest (so the investments help pay ongoing expenses). This means most people are off the mark getting more conservative as they age, locking away their meagre amounts in GICs, bonds or high-interest bank accounts instead of having that money working for them. Always remember what the greatest risk is. Uh-huh. Running out of money, not losing it.

Well, it may be too late for mom & pop. But not for you. Remember these few rules.

  • The first place to put money is in a TFSA. Fill it to the limit before investing anywhere else. These are turning into serious little financial weapons, with a couple now eligible to stash almost $100,000 between them. Why the TFSA first, instead of a retirement plan or non-registered account? Simple. All of the income generated thusly in retirement is not reportable. It won’t boot you into a higher tax bracket nor erode a dime of your public pogey pension money. Nothing else will yield this result.
  • TFSAs, I should add, are not for saving, but investing. Put a hundred a week in there for three decades at an average of 6% and you will retire with $407,000 (or which $308,000 is growth). This should yield about $25,000 a year in income – so added to your government cheques, it means cash flow of about forty grand – and no tax.
  • Take CPP at age 60. No exceptions.
  • RRSPs are good for lots of things, but retirement saving isn’t one of them unless you’re (a) self-employed with no pension or (b) planning on being poor after you stop working. For most others, when these change into RRIFs (age 71) they’ll convert into a cash stream, and can kick you into that higher bracket – a potential bomb, especially if politicians like T2 keep hiking taxes. So, TFSAs first, non-registered accounts second – which can give you capital gains and dividend income at a seriously reduced tax rate.
  • However, those RRSPs are good for tax-shifting. Contribute when working so you can cash it in when laid-off. Or on maternity leave. Or going back to school (withdrawals can be tax-free then). They also work for income-splitting with a less-taxed spouse, with the higher-earner taking the deduction and the other person getting the money. Plus you can use one to shelter part of a severance package. Or leverage up a down payment through the Home Buyer’s Plan (money put in there for just 60 days nets a refund cheque). And by using a ‘contribution in kind’ you don’t need cash to contribute. For selling yourself assets you already own the government will send you money.
  • Never watch BNN. Ever. Or HGTV. Or, God help us, W.
  • Remember how stuff is taxed. Interest on GICs, bonds or savings accounts, along with rental income is all lumped on top of earned (or pension) income and taxed at your marginal rate. Ouch. Dividend income (such as from preferreds) allows you to claim the dividend tax credit, while capital gains (from ETFs that rise in value, for example) get a 50% tax break. Interest paid on a residential mortgage comes from after-tax dollars. Interest on money borrowed to earn money is a 100% write-off. Mutual fund fees are not deductible. Advisor fees are.
  • Also bear in mind that gains made on residential real estate are untaxed if it’s your principal residence. Housing values are at record levels. Even CREA says they’ve ‘topped-out.’ If you ever wanted to feel like a genius about something, this is it. Sell, downsize or rent, then invest and diversify.
  • Stay married. Kick your kids out. Don’t buy universal life. Lease your car. Never buy penny stocks. Be balanced. Diversified. And liquid.

Regret what you can’t change. Fix the rest. Send me a selfie.

185 comments ↓

#1 bdy sktrn on 05.17.16 at 6:30 pm

Union Gas estimates that heating by electricity instead of gas will inflate the average homeowner’s heating bill by about 600 per cent.

————————–
wynnie the witch says no problem, just pay more taxes to subsidize the diff.

#2 hope & ruin on 05.17.16 at 6:34 pm

If somebody gets a tattoo that says “no regrets” and then ends of regretting it…..well, the irony of that would make my head explode.

Anyone want to chime in on the lease vs buy a vehicle thing? I’ve always bought my cars cash but I’ve been leaning towards leasing my next one. I put a good bit of mileage on my vehicles 25-30k km’s a year.

#3 nonplused on 05.17.16 at 6:34 pm

Leasing your car is a good idea if you tend to be one of those people who gets a new one every 2 years. But I drive them until the wheels fall off so I find it’s cheaper to by a 2-3 year old vehicle (maybe a lease back) and then drive it until it’s done. I’ve got a 99 jeep that is still going strong for my kids to drive, way cheaper than leasing them something. At this point it doesn’t owe me anything it’s been solid and reliable for so long but it could go another 50-100,000 k before it dies. Besides, it’s a jeep so the “cool” factor is there no matter how old it gets.

#4 hope & ruin on 05.17.16 at 6:36 pm

Regret what you can’t change. Fix the rest. Send me a selfie.
__________________________________

Garth, speaking of regrets…you may seriously regret asking the internet to send you selfies.

#5 Goldie on 05.17.16 at 6:37 pm

In regards to BNN, it was one of their guests on a show who was the first (that I had heard) predict the anticipated effect of the US fracking boom on the CAD. After a little more research, I was convinced to convert a significant amount of my Canadian savings to USD, which led to the single most profitable “investment” of my life thus far. I will always be grateful to that channel for initially pointing me in the right direction.

#6 Vundo on 05.17.16 at 6:38 pm

For what reason should we believe that the TFSA rules won’t change as more and more of those accounts get larger and larger? I would think that the same people who loved the idea of slashing the contribution limit could come up with some kind of claw back scheme for those hoping to collect all the benefits while sitting on a mountain of treasure in their TFSA.

#7 Boland Green on 05.17.16 at 6:41 pm

First!!

#8 George on 05.17.16 at 6:49 pm

Why lease your car over buying a car and keeping it for a long time (8+ years) and selling?

#9 Hotdogs from Heaven on 05.17.16 at 6:49 pm

“Plus you can use one to shelter part of a severance package.”

Okay, I’ve seen this mentioned a couple of times in the past, but without any details. And googling only brings me to the ability to deposit an untaxed severance package into an RRSP that the government ended in the 1990’s.

So what is now available that is any different than using after tax dollars to contribute to an RRSP and get a refund for it the following year?

#10 Brazil ex-pat on 05.17.16 at 6:49 pm

Yup. People are so mad about being out bid by foreign buyers they are even taking to Reddit asking T2 to do something about it…..

https://www.reddit.com/r/canada/comments/4jo0op/dear_trudeau_please_tax_the_shit_out_of_foreign/

#11 Ben on 05.17.16 at 6:53 pm

Hmmm, if the number 1 risk is running out of money, wouldn’t deferring CPP (and OAS fit that matter) until 70 make more sense than collecting at 60? In exchange for drawing on investments for an additional 10 years ‘early’ in retirement one receives a larger fixed pension indexed to inflation.

#12 tatamagouche on 05.17.16 at 6:56 pm

Living in a cabin outside of Tatamagouche. Hee, hee. I like it. Right on the water though?

#13 Ultraman on 05.17.16 at 6:57 pm

What you should regrets are things that you can’t put in the bank. Take orgasms for example, the one you save today, you won’t have twice tomorrow.

#14 MSM-Free Zone on 05.17.16 at 6:58 pm

Excellent advice, except you left out the part about the Hardly Dangerous.

Everyone should crash at least one in their lifetime.

#15 Mean Gene on 05.17.16 at 6:59 pm

In regards to CPP and OAS, the survivor benefits are not all that lucrative.

#16 Fausto on 05.17.16 at 6:59 pm

Fausto just keeps buying new build townhouses in Ancaster and rental properties in Hamilton. Fausto keeps on winning

#17 Larry Laffer on 05.17.16 at 7:01 pm

I would advise stuffing the RESP even before the TFSA. And for those of us who can contribute to a group RRSP with the employer matching our own contribution, this is free money that is hard to ignore, even if this means some mutual funds and potential taxation later.

#18 Cdn Flyer on 05.17.16 at 7:05 pm

Why lease your car? Isn’t I conventional wisdom to buy a one-two year old vehicle and drive it into the ground?

#19 Fitgeek on 05.17.16 at 7:06 pm

I get all of that except for leasing a car. Why not buy a lightly used car instead?

#20 Boyd German on 05.17.16 at 7:07 pm

First!

#21 Fluorine on 05.17.16 at 7:08 pm

While I like the personal stories, and the advice offered, most of them seem to be rich people’s problems.

I, for one, heartily welcome the return of free tax and investment advice!

#22 Coopoiler on 05.17.16 at 7:09 pm

Two questions come to mind after reading this
1 take CPP at 60 no exceptions?
What about the 36% reduction you take doing that? I am bridged until age 65 then pension reduces by half of CPP max planned. To wait for pension!
2 lease car ?
First time I have heard that to be a good idea. Unless you can write of the payments?

#23 crowdedelevatorfartz on 05.17.16 at 7:13 pm

My only financial regret was not punting my lousy financial advisor to the curb 10 years ago…..
Oh well. Better late than never.

#24 Greatest Guelph Fan on 05.17.16 at 7:13 pm

Awesome summary of the rules Garth. These are financial rules to live by and belong on the fridge door of every Canadian family as a reminder of how to invest!

#25 CJ on 05.17.16 at 7:14 pm

Wondering why taking CPP at 60 makes sense? Aren’t we all living longer?

#26 westvan on 05.17.16 at 7:14 pm

“this is the top”

is this blog on repeat?

#27 Smart cookie on 05.17.16 at 7:15 pm

You said: “Take CPP at age 60. No exceptions.”

Those on ‘early’ CPP disability will get less after age 60-65 than they do now, right Garth?

#28 acdel on 05.17.16 at 7:16 pm

Great Advice!

#29 Greg on 05.17.16 at 7:17 pm

Lease your car? Crazy talk!

#30 salonist on 05.17.16 at 7:19 pm

my daughter leased a kia,stick $150.00/monthly
picks it up friday

#31 hope & ruin on 05.17.16 at 7:19 pm

@ cdn flyer

driving a car into the ground is not a good idea. I try to drive a car from 40k-120k km’s. Try to sell around 120k and get another. I think it’s the sweet spot between operating and maintenance costs vs price.

Who wants to be driving a car that requires a ton of work and isn’t reliable when you can sell earlier and move on.

#32 RG on 05.17.16 at 7:20 pm

Thank you Garth. Helpful as always!
Why lease the car though? Isn’t buying 3-5 year old car and driving it into the ground, the golden standard for “fools”?

#33 Bonhomme Carnaval on 05.17.16 at 7:21 pm

Thank you for the valuable advice Mr. Turner. However, none of the above-mentioned rules has any ‘status value.’ How can you make people envious at the next neighborhood BBQ or office happy hours by bragging about your $ 100./week TSFA contributions?

Just not sexy.

Keep fighting the good fight Mr T.!

#34 Bytor the Snow Dog on 05.17.16 at 7:25 pm

Still sorting out the numbers on my “commute or not commute” question. Numbers aren’t adding up unless I can shelter more of the lump sum payout.

#35 Berniebee on 05.17.16 at 7:29 pm

“Lease your car” No.
Renting is paying for shelter, leasing a car is paying for the dealer’s kids education at Stanford. There’s a reason that leasing is the first option discussed at a new car dealer. Hint: It’s not for your benefit.

Buy a 3 to 5 year old car, drive it for 7 years.
Repeat.
Cars these days run easily for 12 -15 years with no major repairs.
And forget the crusty old saw: “Don’t buy other people’s problems”. You know a new car dealer came up with that nugget.

Full disclosure: I don’t do this. I buy 7 year old vehicles and drive them for 5 years. The most expensive repair on my current vehicle? ($3,000 cash purchase, four years in.) A starter motor. The tow, parts and labour were about one monthly lease payment.
I WAS late for supper though.

#36 Mean Gene on 05.17.16 at 7:30 pm

CPP early at 60 or 65? Google it, the break even point is in your mid 70’s.

#37 Cottingham a bargain on 05.17.16 at 7:31 pm

I regret not buying more real estate but sure glad I bought enough.

#38 the Jaguar on 05.17.16 at 7:32 pm

CJ #25
I don’t think we are living longer. Chronic diseases like diabetes, obesity, high blood pressure are through the roof. Our chemical infused diet is killing us as is our sedentary lifestyle. It will be worse for the fat kids glued to their smartphones as the years go on. Just because your grandfather lived to 80 doesn’t mean you will. There have been advances in medicine, but cancer is still an epidemic. Sorry to sound negative, but it’s what I see all around me. Thank goodness I remain an incredible specimen. Garth is right. Take CPP at 60,

#39 Grey Dog on 05.17.16 at 7:38 pm

See, the wisdom here today is why we peasants need you to keep the blog operating.

My family believe in driving the car into the ground, paid for immediately or within 3 years. My inlaws were into the lease trap, always gotcha traps, in the end were paying $1500. a month for an ugly HUGE Van! Leasing in my books is allowed if one is self employed, otherwise once it’s paid off, it’s a free vehicle plus maintenance.

Are you really asking for a selfie? Are you creating Wanted Posters or what? A Canada Day Wall of Dogs?

#40 Post on 05.17.16 at 7:38 pm

So, Cramer now thinks rising oil is going increase inflation to the point, where the Fed has to increase rates. Probably at least 2 times this year. Maybe the call for the peak in housing by the CREA was correct. But it points to the peak for stock markets as well, so says Cramer.

http://www.cnbc.com/2016/05/17/cramer-oil-could-be-pushing-the-fed-to-raise-rates-a-bear-collision-disaster.html

#41 Smoking Man on 05.17.16 at 7:40 pm

Regrets. Ha. Never ever.

Soul of an entrepreneur. …. regrets; its not in our vocabulary. Everything is a learning experience.

It ain’t about the money. It’s all about ideas. Execution. And what ever happens, happens. Win some lose some.

It’s about the game. The rush of the gamble.

A real entrepreneur will be just as happy broke as filthy rich so long as he don’t run out of ideas to try.

No money is not an obstacle. It’s a challange that is easy to slay.

99% don’t understand.

#42 boonerator on 05.17.16 at 7:43 pm

Hey Garth and blog dogs,
What about Guaranteed Income Supplement as an add on to the CPP and OAS?

I thought if you had only CPP & OAS, then your income was low enough for GIS to kick in. It’s a not a lot but it would help.

#43 BOOM! on 05.17.16 at 7:46 pm

You might be on the money in most of these….

EXCEPT:

1. Lease your car… never have I seen this be more cost-effective than buying a several year old in decent shape reliable brand name, and driving it into the ground.

2. RRSP (or 401-K in my land of the USA)… fund the TAX-FREE fund let only if:

A. You will have more than $700K in taxable accounts
at retirement. Anything more puts you into a higher
tax bracket.

B. Your employer offers a “FREE” match, than fund the
account up to the limit of the match, then go to the
TAX FREE account for the balance. (Keep the upper
limit in view for total taxable amount).

Other than those two minor items. adjusted for the Eagle readers, I agree. I am contemplating a NEW car purchase only because, I can buy ion the factory A plan, I will drive the bitch to no value, and I usually keep a car a decade whether bought new, abused ,or otherwise.

Cars are always a losing purchase. I would know I’ve had an unbelievable number over my life…

M64WI

#44 Yuus bin Haad on 05.17.16 at 7:46 pm

“How’s that hopey changey thing workin’ out for ya?” (Sarah Palin, 2010) – hehe, I love that one.

#45 Doug t on 05.17.16 at 7:49 pm

Realize none of this matters an iota if the world doesn’t unite over this

http://www.cbc.ca/news/canada/british-columbia/programs/bcalmanac/peace-activist-says-it-s-time-to-speak-up-about-nuclear-disarmament-1.3586768

#46 Gregor Samsa on 05.17.16 at 7:54 pm

Garth, literally nothing I invest in gets me 6%. Not ETFs, not bonds, not mutual funds, certainly not GICs (I have them all).

I think you are confusing people who have hundreds of thousands of dollars and pay professionals to manage their money on a daily basis vs. regular people who can’t afford to fill their TFSAs and are stuck buying investments on their own.

Your advice seems geared towards the former.

#47 Joe on 05.17.16 at 7:55 pm

No penny stocks? Boo.

I can’t outpace the real estate market any other way then investing in penny stocks.

#48 Robbie on 05.17.16 at 8:02 pm

I think there’s a problem with your math, Garth. 3 decades of $100 a month is $156,000, not $99,000 ($407,000 minus the $308,000 of growth you mention). The higher principal amount will of course result in a higher end amount….makes the result even better!

#49 Life among the stars on 05.17.16 at 8:11 pm

Leasing! Get serious. Buy secondhand Kijji. Drive into the ground. Fix yer own brakes.

#50 PeterfromCalgary on 05.17.16 at 8:18 pm

I have to disagree on leasing your car. Buying a used car that checks out mechanically is a better deal.

#51 Andrew Woburn on 05.17.16 at 8:26 pm

If the US experience is anything to go by, when real estate finally rolls over in Canada, there is going to be a huge demand for rental accommodation.

Here’s what one guy found when he looked at years of for-rent ads in San Francisco.

“That, my friends, is 70 years of San Francisco housing prices. There are some ups and downs, but for the most part there is a very simple trend: 6.6 percent.

That’s the amount the rent has gone up every year, on average, since 1956. It was true before rent control; it was true after rent control. It wasn’t entirely true during the 2000 tech bubble, but it was still sort of true and it became true again afterward.

6.6 percent is 2.5 percentage points faster than inflation, which doesn’t seem like a lot but when you do it for 60 years in a row it means housing prices quadruple compared to everything else you have to buy.”

https://medium.com/newco/a-guy-just-transcribed-30-years-of-for-rent-ads-heres-what-it-taught-us-about-sf-housing-prices-bd61fd0e4ef9#.uuuks5pbi

#52 tundra pete on 05.17.16 at 8:28 pm

Lease it and drive it like you stole it.

#53 Scumop on 05.17.16 at 8:30 pm

“Take CPP at age 60. No exceptions.”

Pretty sure CPP is considered “income” against EI benefits. This might be a good exception:

If you get roasted out of employment at 60+ and apply for EI, any CPP you get is deducted off the top. Collect the EI first, then the CPP when the EI runs out.

#54 Andrew Woburn on 05.17.16 at 8:32 pm

Here’s another reason for a shortage of rental apartments.

– Vacancy solution for Vancouver? Tear down old rental buildings

“While many Vancouver renters live in privately owned condos or suites in houses, dedicated rental buildings are seen as offering long term security and better protection from rising rents.

It’s why there are growing calls from both sides of the political spectrum for city hall to re-think its policy on preserving existing rental stock — at all costs.”

http://www.cbc.ca/news/canada/british-columbia/vacancy-rate-rentals-buildings-old-1.3566362

#55 conan on 05.17.16 at 8:35 pm

I think universal life is good in certain situations. To just say don’t buy it is kind of Meh.

#56 Gardenmaven on 05.17.16 at 8:41 pm

I would love to hear more about taking CPP at 60. With a ton of investments (more than 2.1-million — we sold our house and are renting), I’m paying a lot of tax in retirement. (Some of my income is from working for hubby part-time and there is also income-splitting from his pension.) If I were to take CPP at now at 61, wouldn’t it all disappear in taxes?

#57 Jack Hammond on 05.17.16 at 8:51 pm

To Gregor Samsa

You should of bought some Canadian provincial strip bonds back in 2000.

We have many of them at 6.61% but after compound interest semi-annually 3.305% they mature in 2030-June-2 so 30 years it is 20.1175% per year interest.

Our $250,000 RRSP’s will mature worth $1,758,816. We will be 70 when they mature.

Our rental properties generates 6.5% for all of our 8 units, apartments we rent out. We own them and that is our business and livelihood.

We net about $10,000 a month on our $1.85 million property. This helped us build our TFSA’s to $105,000 and our reserve fund to $65,000.

We are not all depending on our 8 rental units for income and cash flow as we have another $750,000 in corporate bonds, government bonds, dividend paying stocks paying us $3,000 a month plus staggered bonds and GIC’s of $10,000 per year from 2021 to 2030 so$100,000+ interest over the next 10 years for supplemental purposes.

#58 Metaxa on 05.17.16 at 8:52 pm

Anyone want to chime in on the lease vs buy a vehicle thing? I’ve always bought my cars cash but I’ve been leaning towards leasing my next one. I put a good bit of mileage on my vehicles 25-30k km’s a year.

If you have a business reason to drive then a lease is writable at tax time. Otherwise its an expensive way made to look cheap to get into a vehicle you might not be able to afford otherwise. (opinion only, not fact perhaps?)
I’m not talking MLM but everyone should have as many streams of income as possible, you simply struggle trading your hours for dollars if you only have one income.
Hopefully one of those income streams allows a vehicle deduction?

My in retirement job while waiting for my wife to decide she has had enough has me averaging over 50,000 km per year over the past six. Plus my Co-op gas bar gives me 4.5 cents per liter rebate annually, plus I collect zero GST but claim every cent I pay…gas, oil, tires, wiper blades.

I only have three forms of income going now (will be 4 if and when we start taking income from investments), haven’t really worked in the general sense for 15 years and while not uber wealthy we are well into the comfort zone…still with the ability to write off auto expenses, depreciate same and get rebate cheques.

#59 For those about to flop... on 05.17.16 at 8:53 pm

WULLY,I did you proud today.
It was a rainy day here in Virginia so I took the wife to the Chrysler museum of art.
Outstanding collection of art from around the world with better presentation than some of the museums I went to in Europe and the Middle East.

I saw a Monet and some Tiffany pieces ,but most of it was wasted on a bum like me.

Across the street they have a glass studio and I watched a guy make from scratch a fish sculpture which took him about an hour with an assistant.Pretty cool the see an original piece of art made before your eyes.

Maybe I should google it,but I can’t imagine how much this collection would be worth,quite possibly as much as an East Van bung one day if they play their cards right.

There must be someone on this blog who has invested in art or was left a valuable piece as an inheritance?

I’ve been reading this week but not writing, it sounds like some parents are going to leave their kids with a headache…

M41BC

#60 Love My Kia on 05.17.16 at 8:54 pm

This is sage advice and hard for me to argue with it even if I wanted to.

Thanks Garth for bringing it all back to basics.

#61 Janet Yelling on 05.17.16 at 8:57 pm

DELETED

#62 White Crock BC on 05.17.16 at 9:04 pm

Life among the stars on 05.17.16 at 8:11 pm

Leasing! Get serious. Buy secondhand Kijji. Drive into the ground. Fix yer own brakes.
========================

Yeah, those drum brakes are such a treat to work on in order to save $150…(amortized over what..4 years?)

Some things may not make sense financially… like flying business class… but damn it sure feels good…

like leasing…fixed monthly payment (never put a dime down) never, ever have to worry about brakes, muffler, tires, belts etc.

Car is always under warranty.

#63 Stuart on 05.17.16 at 9:11 pm

Retired 14 years took CPP @ 65, I bleed off 200K$ from RRSP over those years but more than replaced it.
TFSA now at 90K$ partners is @ over 60K$.
Partner did same with her RRSP but we bought DRIP stocks which went up 3X+ which we used for taxes, TFSA, and all winter get away trips.
Mostly neglected the portfolios of stocks but did not have big losses and had cash to do some buying during the GFC of 2008 which juiced returns on the recovery. 30% fixed income is all you need but was down to 20% sometimes. Read the G&Mail and get one investment letter. I do have some ETF’s too. Just a few speculative stocks but not gold ones or O&G stuff now.
If had more time would do better off but not complaining. Beating the TSX in total return seems routine or I’m just lucky but not sleeping or trigger happy.
Only realestate is the house of 28 years which is updated and REITS in the portfolios or the ETF in the RRSP.

like SmokingMan know what you are doing so the odds are tilted in your favor. then you can roll the dice more often for fun.
if you can’t get it working or lack the confidence go the GarthT or an independent advisor.

#64 Tony on 05.17.16 at 9:21 pm

My greatest or most profitable returns for amounts quote invested or gambled on were all on penny stocks. They don’t write this in books but at least for the Canadian exchanges only buy penny stocks that trade at either one cent or one-half a cent. Many companies will go bankrupt but the ones that don’t can go a hundred or more fold.

Better advice: buy lottery tickets. — Garth

#65 Metaxa on 05.17.16 at 9:21 pm

There must be someone on this blog who has invested in art or was left a valuable piece as an inheritance?

If you like it, it’s valuable, eh?
Buy one piece a year, pottery, sculpture, First Nations, art, photography…our “theme” is it has to have a leaf or leaves in it, on it or about it.

after a bit all your Wal Mart prints and Winners wall art is replaced by real stuff and you have to grab an insurance rider to cover it.

#66 Matt on 05.17.16 at 9:24 pm

“Don’t buy universal life”

Garth, when does it make sense to buy universal life? Are you still against it, if buying it through a corporation that you own?

You bet. Thoroughly bad idea for almost everybody. — Garth

#67 WIN on 05.17.16 at 9:26 pm

#58 Metaxa and others on leasing vs buying.

==========

If you own your own business, leasing is the best option.
There is a right and wrong way to lease however.

The wrong way? A car dealership or leasing company.

The right way? Buy the car yourself – new or off lease, 1 yr old etc like suggested.

Then lease it to yourself, or your business. Reasonable figures. $300-$400 (check similar commercial lease rates)

Your business pays the lease TO YOU (you own the vehicle, remember). Make sure you have a simple lease agreement and make a monthly payment by cheque to yourself.

The lease payments to you as owner of the car are not considered income and are not taxable.

(If financing, your owner’s payment might be $200 but you could lease it to your business for $300)

I am not an accountant or tax lawyer but we were taught this by a Rev Can auditor in a biz seminar.

I believe I just saved some people money.

PS Even most accountants are unaware of this

#68 gumboot princess on 05.17.16 at 9:26 pm

Oh, Lord. Your comments read like a litany of my past mistakes. I loved the bit about not watching BNN ever. It is so true! I did take CPP at 60, though. Some glimmer of hope for me yet!

#69 TurnerNation on 05.17.16 at 9:28 pm

7 litres – yeah! (So this is a car blog.)

There’s No Replacement for Displacement. Drove a new Jetta turbo which Zipcar had. Keep the turbo ‘on the boil’ (3k rpm+) and it was very tractable in the midrange hwy pull. Excellent throttle tip-in response and good returnability-of-steering-to center*. Rare in a front wheel drive car channeling that much power. I almost curbed an Audi A4 turbo (Zipcar) due to torque steer when turbo kicked in.
Never buy a used Zipcar…always trying to pull 1G in those things ;-)

Today’s budding lefties will get Wynne’s Peoples’ Wagon. Everything old is new again.

*http://www.hendersonslineup.com/steering-returnability

#70 For those about to flop... on 05.17.16 at 9:30 pm

Tonight’s post was a good break from the real estate madness, but it’s too bad that there is always a few guys who decide it is a good opportunity to toot their own horn.

Instead of talking about the past,how about your thoughts on future investments?

I suppose you guys dream about cars too, but only wake up with horns…

M41BC

#71 Matt on 05.17.16 at 9:31 pm

“You bet. Thoroughly bad idea for almost everybody. — Garth”

Can you elaborate please? Or dedicate a post to life insurance pros and cons?

I thought universal insurance was another way to legally tax shelter your money. Done via a CDA account being credited the benefit or cash value.

If you really want to benefit from UL then sell a few policies. As an investor there are better uses for the huge premiums. — Garth

#72 Smoking Man on 05.17.16 at 9:34 pm

Go ford. I ment Donald.

CSIS backing the wrong horse. But nothing like a pay check where your grand kids pay the bill.

Click my name bitches. I’m truly back.

#73 Tony on 05.17.16 at 9:38 pm

Re: #36 Mean Gene on 05.17.16 at 7:30 pm

You missed the point, you take CPP as soon as you can get it because it may not exist or only partially exist if you wait too long.

#74 jean on 05.17.16 at 9:41 pm

Excellent interactive tool that lets you play with various assumptions to work out if it is better to rent or buy. It’s also a useful summary of all the costs involved in both renting and buying.

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?ref=realestate&_r=0

#75 tundra pete on 05.17.16 at 9:42 pm

Keep it simple with CPP. Take it at 60 or you may get to room temperature before 65 then no one would have gotten any of it.

#76 LifeXpert on 05.17.16 at 9:46 pm

The time to buy UL ended when the rates reached all time lows. It doesn’t make sense to do so anymore unless you you are going with the quick pay option on some more advanced tax advantaged scenarios. For most it is 80% term and a small portion for final expenses in case you screw yourself financially towards the end.

Biggest regret??

Not going all in to oil/metals in January and second regret, selling out way to quickly. Still hoping for a revisit of those lows, this time I will be ready!

#77 WalMark of Sadkatoon on 05.17.16 at 9:50 pm

gartho sometimes has those awesome bookmarkable moments

this is one of them

#78 MF on 05.17.16 at 9:52 pm

#121 jane 24

Yeah look at all these boring Canadians going to work every single day, raising families, making sure the country functions.. so that the lights go on, the water runs and there is food in the supermarket. How pathetic are we!

It’s the rest of the world that is a piece of crap. People crave that stability that you make out to be a negative.

MF

#79 TurnerNation on 05.17.16 at 9:56 pm

Yep this blog still has work to do: The best HP per $ is a 2008-2010 Mustang GT (V8). Now, I never was a fan of domestic or RWD but this car has looks too. Only rented one.
Just drop in a shorter (numerically higher gear ratio) rear differential, as these US cars are geared toward highway loping. No moping.

Today’s Kids need to learn essential skills like heel-and-toe shifting, trailing braking, power-on oversteer/understeer. And to find the nadir or zenith of an apex.

#80 will on 05.17.16 at 9:59 pm

#64

“Better advice: buy lottery tickets. — Garth”

Or better better advice: buy shares in the company that makes those lottery tickets. I lecture people at work about this all the time. Hahahahaha.

#81 WalMark of Sadkatoon on 05.17.16 at 10:00 pm

Instead of talking about the past,how about your thoughts on future investments?

US real estate

4th inning

#82 Ole Doberman on 05.17.16 at 10:01 pm

#64 Tony on 05.17.16 at 9:21 pm

My greatest or most profitable returns for amounts quote invested or gambled on were all on penny stocks. They don’t write this in books but at least for the Canadian exchanges only buy penny stocks that trade at either one cent or one-half a cent. Many companies will go bankrupt but the ones that don’t can go a hundred or more fold.

Better advice: buy lottery tickets. — Garth
——————————————————-
I’m with Tony on this one – if a company has money in the bank, good mgt, very little to no debt and a proven business plan then a penny stock like this can change your life forever – and all your future generations
Best feeling in the world is paying for a nice house up front in cash and not having a mortgage.
HAM knows all about that.

Until you arrive at this you have no choice but to take bigger risks. When you arrive then you can look at diversifying.

#83 Ret on 05.17.16 at 10:03 pm

There may be certain unique circumstances where taking CPP early doesn’t benefit you in your situation.

However, many more people would benefit from taking CPP early but can’t get their head around the penalty for doing so.

Maybe this table will be of use for those in that whole decision making process.

https://www.ssa.gov/oact/STATS/table4c6.html

(Note the male/ female differences as well. As a male who is expected to live fewer years on pension, should I not get a bigger pension when I am alive and collecting? Structural pension discrimination by gender?)

#84 Love My Kia on 05.17.16 at 10:04 pm

Lease? Buy a Kia! Reliable as heck and reasonably priced.

I’m still waiting for the first recall on my 2 year old Sorento, while my friends’ 1 year old Chevy Cruze already has 1/2 a dozen recalls on it.

Garth, if you want to mock a vehicle brand, GMC is your animal. Kia rules!

http://wwwapps.tc.gc.ca/Saf-Sec-Sur/7/VRDB-BDRV/search-recherche/results-resultats.aspx?lang=eng&mk=11122!4802!3231!5001!5620!1899!4860&md=SIERRA&fy=2015&ty=2015&ft=&ls=0&sy=0

#85 just say no on 05.17.16 at 10:09 pm

Ragrets…..like rugrats? she has none so that must be a good thing?

#86 AK on 05.17.16 at 10:14 pm

“Never watch BNN. Ever.”
============================
I find loud Touts and Pumpers very entertaining…

#87 Walter Safety on 05.17.16 at 10:16 pm

No secrets to car leasing , cost of the car , cost of the money, profit for the leasing company.
You can usually buy the car at the same price the leasing company pays . If you lease they add their profit $60-100+ a month.
Your money cost (0r opportunity cost) is almost always less than the leasing company charges.
Even tax deductibility is only slightly larger than tax deductibility with owning but it costs more to lease.
Most people in the leasing business are rich , cars,equipment, tools, chairs, tents,audio etc.
You’re poor that’s why you lease.

#88 conan on 05.17.16 at 10:17 pm

“You bet. Thoroughly bad idea for almost everybody.” — Garth

I can think of at least 3 occurrences where it is good.

1) When it is free: Wealthy people can have revenue Canada pay the premiums for them.

2) The better universals have the best Term to 100 prices. Term to 100 is useful for insuring pensions.

3) joint last to dies where a blended insurance rate is used. Policy can be structured so that cash value is paid out as a tax free insurance benefit on the first death.

Always stick with permanent policies that are guaranteed level insurance charges…….never go yearly renewable term.

#89 zenra on 05.17.16 at 10:18 pm

I regret that my parents sold their High Park home for $200k in the early 90s when the same home right now sells for $2 million.

My life would be so different right now.

#90 Ontario's Left Coast on 05.17.16 at 10:22 pm

Not likely to change your position but leasing can often be a sucker’s game for payment junkies. I was a rep in the 90’s and saw all the horror stories. Me, I buy about a year old with 《 20k and drive it for 5-7 years, saving thousands in depreciation.

#91 OttawaGuyRenting on 05.17.16 at 10:24 pm

I have a crush on her
Love this blog

I regret not reading it 10 years Ago

#92 Weedeater on 05.17.16 at 10:30 pm

Excellent advice! Everything one needs to know for financial security. Another thing: ditch the FOMO. Go ahead & Google it.

#93 MF on 05.17.16 at 10:42 pm

89 zenra on 05.17.16 at 10:18 pm

Don’t feel bad. We sold my grandparents’ downtown toronto homes in the late 90’s for similar price points. That was a healthy market. What we have now is an utter joke on the brink of complete collapse. Interest rates fell and fell over the 2000’s and 2008 brought them to zero. Now they are at rock bottom. During the next economic collapse, which is on the way, what are the “leaders” going to do? The can has been kicked to the wall already and the next collapse will be epic. GTA real estate should fall 50% as all the indebted morons rush for the exits. Garth is just being nice with his “slow melt” prediction.

MF

#94 Garth Addict on 05.17.16 at 10:43 pm

Fantastic post today with a wealth of information. Thanks so much Garth. Copied it for myself and sent it to some friends.
I’m one more person who’s made big changes since I discovered this blog, both in reducing the spending and investing.
Greatly appreciated. You do a great thing.

#95 Smartalox on 05.17.16 at 11:01 pm

@Andrew Woburn;

I don’t know about SF rents, but in Toronto, I recall my parents renting a 5br house in North York in the 90s, for $2400/mo. Just about the same a house rents for in the same neighbourhood today.

Seems to me that the net gain is close to 0%!

#96 TurnerNation on 05.17.16 at 11:04 pm

A dire *warning* prediction for those living in rural or northerly parts of Ontario province.

I believe your homes may become relatively worthless or un-saleable due to one of both following reasons:

1. Ontario declares austerity/bankruptcy.

We see with this new 7b economic suicide plans Ontario is set to become the first ‘green’ state, as California was; and in turn will go BK as Cali. did. (They’d elected a popularist actor, we have a popular drama teacher. Close enough).

During this all, the first cuts will come to rural areas – all those expensive outliers with their full government services.
Insurance premiums will skyrocket, as they know your home or life will become a total loss by the time stripped services reach you.

– Northerly places tend to have older homes which will fail ‘energy audits’ and making retrofits uber costly.

– As propane and Nat Gas will be phased out/banned, too the sagging northern electrical grid will fall into disrepair under austerity measures. Open houses and rolling blackouts don’t mix well.

2. Or/And, the plan I keep hammering home to keep us concentrated and confined into cities by laws against transportation is taking place. Now you pile the dog, kids, supplies into a SUV and head to the cottage, gassing up along the way, your 3-5 hour drive.
In the new mandated (expensive) electric cars this type of range and load will become a impossibility. Forget queuing for the few slow public charging stations.

(The rich may afford ultra long range electric cars or pay for private air shuttles out of Toronto’s downtown island airport. See you at the cottage, Kevin O’Dreary.)

– Ontario canned the long standing Northland passenger/freight train line a few years – going all the way up north. A clear sign of abandonment of the north. So much for a communual enviro friendly method.

The next few years in ON will see 1001 hellish laws. Get ready for the stone age. Serfdom. They’ll stone you just like they said they would.
Mods pin this post…

#97 Berniebee on 05.17.16 at 11:22 pm

@ #62 White Crock BC

“never, ever have to worry about brakes, muffler, tires, belts etc.”

Another dealerism.

Don’t get me wrong, I love looking at new cars. Makes my day knowing that I paid less for my vehicle than the HST on that Honda Civic in the next lane.

The Honda driver has no worries about brakes, muffler, tires, belts etc.

I have no worries about money.

#98 cramar on 05.17.16 at 11:31 pm

Related to Garth’s comment, the #1 regret of older Americans is they didn’t start their retirement saving earlier:

http://www.marketwatch.com/story/this-is-no-1-financial-regret-of-older-americans-2016-05-17

Wonder what the #1 regret will be in future of today’s Millennials?

———–

Garth’s recommendations on this blog apply generally for typical Canadians. Being someone who values sage advice, but analyze it in light of my circumstance and experiences, I did (and do) several things just the opposite.

1) Never leased (or will) a car. Far too expensive. We buy a good late-model used (predominately Honda) vehicle and keep it for at least another 10 years. Cost of ownership/maintenance per year is low. NO regrets!

2) Both wife and I took CPP fully at 65. NO regrets! Would do the same thing again.

3) Our cost of living is low enough that family CPP/OAS can provide all the living expenses we need. We can live comfortable on this and mostly do. Private pensions and investment income mostly just get reinvested anyway. It is amazing how good you can live if you live within modest means and curtail consumer spending on more “stuff”. Learn to value things that cost little and worth much. Such as a walk in the woods, relaxing in the sun, reading lots of books. Bicycling. Exercising. Eating real food. Being greeted with excitement by all the neighbourhood dogs. The list is endless!

#99 macroman on 05.17.16 at 11:32 pm

Never buy penny stocks… Garth, I’m up 300% on precious miners in 3 months….

I think I bought Van RE in the last millenia.

Smart money is in hard assets, real wealth not subject to the mascinations of defunct western .gov

Your housing advice is sound, your wealth preservation is lacking. By the time your housing call is right, you will wish you suggested real money.

#100 Linda on 05.17.16 at 11:41 pm

Take CPP @ age 60, no exceptions. What if CPP is your only pension income, other than OAS or (heaven help you) GIS? Though the revised rules do allow you to start collecting even if you are still working. So you can collect even as you pay in & at age 65 if you are still working you can opt to stop paying into CPP. I’m not sure if the amount you would collect would be worth the higher taxes you might be paying due to working & collecting CPP.

#101 Frank Blood on 05.17.16 at 11:57 pm

One more….don’t listen to Jim Cramer of CNN.

#102 CCP RRSP on 05.18.16 at 12:00 am

If you start taking CCP at 60 and continue to work, can you still contribute to RRSP? How long?

#103 Sam the Sham on 05.18.16 at 12:02 am

“Regrets I’ve had a few, but then again too few to mention…” – Frank Sinatra

I can’t say I had too many financial regrets, made some mistakes and moved on. It all turned out well in end. Women, well that’s another story. Lots of regrets there!

#104 Jay on 05.18.16 at 12:02 am

the condos garth was talking about a few weeks ago, that were lined up in Langley sold out in 5 and half the real estate guy said on Monday when he came and talked to us

#105 tiger1960 on 05.18.16 at 12:06 am

Walter safety I like your style I like your style I myself never leased vehicle it’s crazy to do so I know most people in Canada don’t have money or credit to buy but I like the fact when I buy I can do whatever I want with that girl back up the car I went to the wrong bank to cash $7500 check I want to cash it was my bank he said you want cash and a real dickhead about it it took 20 minutes to get the money and he was very arrogant and ignorant and treated me like not as advertise on TV . When someone comments that you should only lease a vehicle I think they should put some balls before the rooster leasing in my opinion is for people that have poor credit no credit huge mortgage not good with her money or have other motives,Hell is a lease hell why would I want to ever Do that !
What’s going on!! Walter safety I like your style I like your style I myself never leased vehicle it’s crazy to do so I know most people in Canada don’t have money or credit to buy but I like the fact when I buy I can do whatever I want with that girl back up the car I went to the wrong bank to cash $7500 check I want to cash it was my bank he said you want cash and a real dickhead about it it took 20 minutes to get the money and he was very arrogant and ignorant and treated me like not as advertise on TV . When someone comments that you should only lease a vehicle I think they should put some balls before the rooster leasing in my opinion is for people that have poor credit no credit huge mortgage not good with her money or have other motives,Hell is a lease hell why would I want to ever Do that !
What’s going on!! Walter safety I like your style I like your style I myself never leased vehicle it’s crazy to do so I know most people in Canada don’t have money or credit to buy but I like the fact when I buy I can do whatever I want with that girl back up the car I went to the wrong bank to cash $7500 check I want to cash it was my bank he said you want cash and a real dickhead about it it took 20 minutes to get the money and he was very arrogant and ignorant and treated me like not as advertise on TV . When someone comments that you should only lease a vehicle I think they should put some balls before the rooster leasing in my opinion is for people that have poor credit no credit huge mortgage not good with her money or have other motives,Hell is a lease hell why would I want to ever Do that !
What’s going on!!http://www.youtube.com/watch?v=QyKnXebSz-s&sns=em

#106 Get on the trump train on 05.18.16 at 12:09 am

Billary can barely beat the crazy commie.

#107 Entrepreneur on 05.18.16 at 12:17 am

Made a lot of mistakes but what I know now they are not without experimenting. Like #41 Smoking Man said “Soul of an entrepreneur…its not in our vocabulary…everything is a learning experience.” Thanks Smoking Man, so true!

What I have learned through my mistakes are not because of what I did wrong but what the system did wrong. What I have been taught and do is dying.

We are not needed anymore as it is cheaper to buy from another country; the people of that land should have come first (people buy cheaper products). Next robots, it never ends.

Bring back the entrepreneur spirit of the sixties and early seventies, the last ones.

#108 tiger1960 on 05.18.16 at 12:29 am

This whear I’m going no western woman!
Hey I do like western woman don’t get me going my mom was awestren
Women!http://youtu.be/ZeDRhBVBXzw

#109 Fortune500 on 05.18.16 at 12:33 am

Anyone being watching Reddit Canada over the last 24 hours? This really does appear to be reaching a tipping point in regards to the MSM and the average Canadian now …

https://www.reddit.com/r/canada/

#110 Cici on 05.18.16 at 12:34 am

Awesome post Garth…that’s the kick in the butt that I need to get down to it!

#111 tiger1960 on 05.18.16 at 12:41 am

Yeah my mom is gone so she is now in the creator hands
Life is simple but so cruel!

#112 Listening carefully on 05.18.16 at 1:14 am

Thanks for all your advice Garth. Much appreciated. Listening very carefully to all your words.
Could you comment why not buy universal life?
Is this the same as “permanent whole life policy”?
Thanks and please keep up the excellent job

#113 bdwy sktrn on 05.18.16 at 1:59 am

oil bitches.

40 may be history for ever

#114 jane 24 on 05.18.16 at 2:41 am

Unless you are self-employed and can deduct a car, never lease. Buy a 2 year old one with about 10,000 miles on the clock. Drive it for 3 years or 90,000 miles, whichever comes first. I do a lot of mileage as I drive in Europe for pleasure a lot. Sell it, rinse and repeat.

Never ever get a car to the repairs stage as this is truly a suckers game and you are paying out more than the car is worth. Plus old cars have low fuel efficiency, you only think you are saving money by driving them until the wheels drop off. It is actually costing you every day. Plus in a climate like Canada old cars are unsafe, they fall apart in a crash. Never drive car that is more than 7 years old – too dangerous.

Play the game this way and you can afford some great loaded cars especially as they are built better today with manufacturing guantees that transfer to the second owner. Plenty of fools out there who must have a new car.

Re elderly parents. They either need to have a lot of money or no money. Falling into the middle ground means that the health system gets it off you for the nursing home. My parents were grasshoppers and not ants and have been in a nursing home for 10 years now on the taxpayer. Could be there for many more. The neighbouring roommates are paying huge amounts for care as they were ants. Now what does that tell us about life? Answer – the system rewards the ants.

#115 They won't listen Garth... on 05.18.16 at 3:04 am

Great advice, did what you recommend on my own long before retirement. Result is that I am sitting here in Italy, North of Venice, in a nice condo that I own, have 2 pensions (incl. early CPP) with investments and liquidity I never need touch. Travel EU 3/4 weeks every month. Neighbors ask if I live here at all. Pensions fund all this.

But they won’t listen Garth. The stats you gave prove the point. Recent post about parents going on vacation with few funds left is a case in point.

People love to give themselves the life they feel they so richly deserve on borrowed money, that will never change. Keeping up with the Joneses comes home to roost at retirement.

Keep the faith G, someone has to speak up and the best is you.

#116 Mike in th UK on 05.18.16 at 6:16 am

Skip the car fleece. The rest is good!

#117 Son of a Gun on 05.18.16 at 6:51 am

Not sure if Montreal’s RE situation has been discussed here, but what’s the market like there? Moving there shortly so was just curious. Tnx.

#118 Kevin on 05.18.16 at 7:08 am

$28,000/year is $2,300/month. If a couple is retired, in a paid-for house, in a low cost of living area, why wouldn’t $2,300/month be enough? At that age, you (should) no longer have a mortgage, you don’t need life insurance, you’re not saving for retirement (because you’re already retired), you only need one car, you have no kids to feed… $2,300/month should be more than enough.

Besides, that’s the *average*. The maximum CPP amount for 2016 is $1,100/month. Combined with $570/month in OAS, and for a married couple, that’s $40,000/year, virtually all tax-free. $3,300/month isn’t enough for groceries for 2, plus a cat? Maybe cable, some natural gas, and a couple cell phones?

#119 BB King on 05.18.16 at 7:28 am

Garth, I’m in my early thirties and have been following the couch potato mantra of TFSA first, RRSP second, then non registered. Are you saying I should be skipping RRSP altogether if I don’t plan to use home buyer plan/may leave etc…? At this point TFSAs are maxed with equal amounts in the RRSPs.

#120 pBrasseur on 05.18.16 at 7:31 am

#117 Son of a Gun

Either way to drive get a Hummer or something very old or with a heavy duty suspention, the roads in and around Mtl are crap, as are most things managed by the public sector, don’t count on having a family doctor.

RE is slow and cheaper because the economy is bad, the parasite government sucking all the life out of it.

#121 maxx on 05.18.16 at 8:03 am

Garth – you’ve done more to promote financial literacy than anyone or any organization. Certainly more than mom and pop, more than uncle Fred, more than silly cocktail circuit show-offs, more than banks and probably more than many “institutions of higher learning”…..but you will never know the vast number who took your advice but don’t talk about it.

Building wealth is a choice, backed by deep desire to succeed. It must near the top of the priority list of how to spend life energy coupled with unwavering dedication to achievement.

Many of us know couples earning absolute boatloads of cash who piddle it away, people in the financial industry who just can’t get their fiscal house in order and those who couldn’t give a rat’s behind about finances until it’s too late. By then it’s not only a WTF moment, it’s deep, lifelong regret.

It blows my mind how much harder it is today to find (and keep) a decent job and especially preserve wealth as compared to just 15 years ago. We’re living in a completely different world now and it’s getting tougher and riskier. Those who’ve not harvested the advantages offered them will never know the “Golden Years”. They’re not called Golden for nothing. These are meant to be years of fulfilling dreams conjured up whilst being a working stiff. Magic time.

IMHO, it’s already too late for a majority. A few may claw their way to a half-decent retirement, however those stuck in debt or a one asset strategy will simply have to accept what comes.

There is not a single day that I don’t thank the heavens for having seen this scenario coming 20-odd years ago.

Those who planned for tomorrow’s world will live a glorious retirement, but those who didn’t will regret the other (and painless) road not taken whilst watching successful peers enjoy their lives.

Few or no choices is one of the worst things imaginable.

#122 Millmech on 05.18.16 at 8:17 am

#98 Cramar
Spot on about living within your means and being able to reinvest the extras.I also keep my cost of living under $2000/mth and invest the difference.My boss has to keep working until 65+,sad because between him and his wife they make almost 200,000 and live cheque to cheque.

#123 MF on 05.18.16 at 8:19 am

99 macroman on 05.17.16 at 11:32 p

Miners and precious metals are only up because the USD is down. Not because of “smart money”. I think smart money is in cash waiting for the next big stock collapse. The heavily manipulated stock market hasn’t made new highs since 2015 spring, and a lot of people think the bull is old or was artificially pumped from the start. In a complete collapse i think gold will have no value. Food/water will. The gold hedge is just a comfort thought similar to a child’s blanket or stuffed animal.

I also think Trump is correct And Yellen should go. She looks like she is holding off for Obama the lame duck? Isnt the FOMC “supposed” to be free of political bias? I read on Bloomberg that trading volume is down for the SPY as people lose faith.

MF

#124 Johnny on 05.18.16 at 8:22 am

According to the Bible, the God given human lifespan is around 70 years. Yeah, most of what the Bible says is hogwash, but the holy book was on the ball in a few aspects. Even a broken clock is right twice a day.

We are not living longer; it’s just that fewer of us die young, which brings the life expectancy up (think that 100 years ago there was no anaesthesia and no antibiotics; 200 years ago there were no vaccines). The odds are that YOU ARE NOT GOING TO LIVE TO SEE 70. Yes, YOU, the person reading these lines. I know, you still don’t believe me. “But I don’t drink, I don’t smoke, I eat healthy and play tennis every week!” Yeah, my dad also did all that. Result: acute myeloid leukemia right as he turned 60. Contributed to the pension plan for 40 years and didn’t get the chance to spend one cent of his pension like he imagined. After 60, the odds of developing a cancer are through the roof. The least of your worries should be what happens to your RRSP when you turn 71, because you most likely won’t (yes, YOU). You wouldn’t want to, anyway. For most people older than 70 the quality of life is terrible, and not due to lack of money. The body is failing them. Basic tasks are a challenge. They need to be careful not to mix up the 15 types of pills that keep them going. It’s really not a fun time, no matter how much you have stashed away.

But one mustn’t live in constant fear. Not fear of running out of money and certainly not fear of death.

Save 10% (or more) and invest it in anything but individual stocks (yes, mutual funds are fine; the ones I have beat the crap out of the returns I manage to get on my own). Live below your means. Don’t buy overpriced shit you don’t need. Pay special attention to cars and houses. Bad decisions on these these can bankrupt you in a hurry.

Enjoy your limited time on this earth. The fact that it’s limited only makes it more valuable. And by “enjoy” I don’t mean “blow all your dough on a lease for that shiny new Audi”. “Enjoy” as in “go out and DO things instead of BUYING things”. And do the things you want to do sooner rather than later. ‘Cause you never know. My father certainly didn’t.

#125 Internal Auditor on 05.18.16 at 8:28 am

Leasing a car is a great way to avoid hassle’s that arise after the warranty expires. It also depends on the type of vehicle you want. We leased a 3series BMW and our payment fits well within our budget and acts as an incredibly safe ride for transporting our family across the city etc. For us it made sense, we wanted excellent handling and safety so for us it was a good fit. I also find value in purchasing a used vehicle 2-3yrs old but again it depends on the type of make and your reason for buying it. All else aside, I think we will lease again once our term us up…we’re 1.5yrs in and it’s been a good experience so far.

#126 busman7 on 05.18.16 at 8:34 am

This time Smoking man has it spot on!

Regrets. Ha. Never ever.

Soul of an entrepreneur. …. regrets; its not in our vocabulary. Everything is a learning experience.

It ain’t about the money. It’s all about ideas. Execution. And what ever happens, happens. Win some lose some.

It’s about the game. The rush of the gamble.

A real entrepreneur will be just as happy broke as filthy rich so long as he don’t run out of ideas to try.

No money is not an obstacle. It’s a challange that is easy to slay.

99% don’t understand.

#127 BOOM! on 05.18.16 at 8:38 am

Amazing! I missed the young lady’s spelling ability in tonight’s picture.

Surely the young lass has no ‘ragrets, or rugrats, or regrets’ either. Still time to…well develop, ideas about what the future should be comprised.

Since we spend more time picking out clothes than our careers, loves, life decisions, and planning, is there ever a wonder at how slap-stick so many peoples lives appear?

Yup, got to put in some time seeing what the realities are, what can be changed, and how to do it. Not easy, hardly impossible.

Enjoyed seeing what I overlooked upon first reading… sort of like life…youth got in the way.

M64WI

#128 Toronto_CA on 05.18.16 at 8:49 am

Parents who are basket cases?
Yep.
My mother is constantly borrowing money from me and has no hope of retiring as she keeps spending like a drunken sailor on shore leave.
My father called me the other day and moaned he had $16 in his bank account. Also still working while pushing 70. (they’re divorced since I was 3 years old)

#129 Brett in Calgary on 05.18.16 at 9:09 am

#46 Gregor Samsa

https://www.amazon.ca/Random-Walk-Down-Wall-Street/dp/0393352242/ref=dp_ob_title_bk

This book changed how I view the markets. Remember no one can predict the future. Unless you pick very risky ETFs or individual stocks, you’ll be fine with a balanced portfolio– like Garth always says.

#130 Brett in Calgary on 05.18.16 at 9:24 am

#124 Johnny

I couldn’t agree more. My mom is 63 and has been battling cancer for 3 years. She didn’t smoke, never drank, ate healthy, was active, etc. Some of us just strike out in the luck department. Its her experience that has me staying a renter in this insane market. I couldn’t imagine buying a million dollar set of 2×4’s and then keeling over as the last payment is made. Screw that.

#131 maxx on 05.18.16 at 9:32 am

#3 nonplused on 05.17.16 at 6:34 pm

“Besides, it’s a jeep so the “cool” factor is there no matter how old it gets.”

The Jeep has the cool factor, but you, fellow dawg, are way cooler.
Cold, hard cash is uber cool. Eschewing retail designer labels, thus creating a “designer” bank balance by buying second-hand does it for me.
Rock on, Jeep man.

#132 BillyBob on 05.18.16 at 9:43 am

Looks like CAD is trying to break back down through the .77 mark again…awesome. Where’s Mark to tell us again about how the loonie is poised to soar? It broke above 80 cents for what, three hours? lol

I don’t know how serious our host is about giving up, but I surely hope he doesn’t. His advice has been a godsend to me, as I was once on the edge of the RE precipice and ready to jump in. Now I have my hard-earned offshore earnings working far harder in instruments far more liquid and diversified. I couldn’t always strictly follow ALL of his strategies, as I am non-resident to Canada I am not in the same situation as most of his readers with regards to things like registered accounts and tax issues. But the general principles of diversity, balanced, low fee, broad-based investment instruments have basically ensured a comfortable early retirement. For this I will always be grateful and I hope his writings will long continue.

#133 Capt. Serious on 05.18.16 at 9:43 am

The odds are that YOU ARE NOT GOING TO LIVE TO SEE 70. Yes, YOU, the person reading these lines.

I see you don’t believe in statistics or actuary science. Blessed. Actually as you get older the conditional probability of you living longer improves. You’re not dead, someone else took your place in the mortality table. Numbers and stuff.

#134 Calgary Rip Off on 05.18.16 at 9:51 am

No more pictures of dumb young people please. The self entitlement attitude of 20’s and younger people is pathetic.

No regrets ever about anything financial.

Left USA 2003. Havent filed a 1040 since. Paid all Canadian taxes since. Bought place 2011. Make a six figure income.

Then again, it isnt the money that matters. What matters most is the availability of time. All the money in the world is useless unless you determine how you spend your time. And that is available to everyone, even those in prison.

Something to consider.

#135 IHCTD9 on 05.18.16 at 9:51 am

If you are a dunce with cars, buy a new one. Less popular models are going out the door for thousands off list, 0% down, 0%/72 months with a warrantee.

If you can do the basic maintenance of wear items – buy a 3 year old car with higher mileage for the year. It’ll look and drive like new, but be half price. Just about every car out there can do 500K on the motor/trans these days. Even Hyundais and Kias

If you’re good with cars like me – buy an older, but low mileage quality car with good history, but with a major problem. I bought my current ride 3-4 years ago 1999, 137K on it looked like new. Didn’t run, offered 1300.00 and took it home. Fuel pump was shot, I adapted a 99.00 Walbro pump into the SAAB canister and it’s still in there now. Car has 185K on it now with no problems other than a dead DIC, and I scored a NOS replacement off KIJIJI for 50.00 :). I expect to get 200K more out of it without any major issues outside my ability to fix.

#136 CJBob on 05.18.16 at 9:54 am

It’s nice to see people questioning some of the advice. Buying used cars and keeping them for a long time is definitely cheaper than leasing.

The CPP at 60 argument next made any sense to me either. The gov’t might change the rules is something to consider, but not enough to make a blanket statement like always take it at 60. Others in the comments have given good examples on when it makes sense to wait.

And remember the sunscreen…

#137 MF on 05.18.16 at 10:06 am

#124 Johnny on 05.18.16 at 8:22 am

Incredible post. I encourage everyone to read it.

MF

#138 WalMark of Sadkatoon on 05.18.16 at 10:08 am

If a couple is retired, in a paid-for house, in a low cost of living area, why wouldn’t $2,300/month be enough?

depends where there living

#139 paulo on 05.18.16 at 10:10 am

Hi Garth Great Blog been a student for some time
I am told that there are ways to purchase “blue Chip” stocks directly from the issuers thous avoiding having to pay a third party
am getting ready to deploy myself’s and the bosses TFSA accounts and have figured that a mix of blue chip stocks that pay steady yields is the way to go here 20% maple 40% Eagles 20% Euros 10% Asian 10% cash for adding on the dips with dividends all returned to the tfsa -of course to maximum legal limits no banks in panama here

The question is: is there a list or resource out there that
lists the company’s that sell shares directly to investors?

Signed the smarter greater fool renting and saving for our thirsty underwear days… cheers

#140 jess on 05.18.16 at 10:12 am

The Dublin-listed firm is backed by Canada’s CapReit,
Most IRES shareholders are overseas investment firms.
===========
The angry irish : “we have foreign vultures like CAPREIT picking up fire sale priced property subsidised by the tax payer”

Revealed: The players who have made huge profits on the back of the Irish property crash
Peter Flanagan
http://www.independent.ie/business/personal-finance/property-mortgages/revealed-the-players-who-have-made-huge-profits-on-the-back-of-the-irish-property-crash-34652880.html
Families squeezed out as investors snap up homes
(The National Asset Management Agency (NAMA; Irish: Gníomhaireacht Náisiúnta um Bhainistíocht Sócmhainní Eilliú) is a body created by the government of Ireland in late 2009, in response to the Irish financial crisis and the deflation of the Irish property bubble.)Speculators have bought almost 9,000 homes in nearly every county for as little as €6,000 each

http://www.intallaght.ie/15319-2/
=
Booming Airbnb adding to Dublin’s rent squeeze
all these years later and many still in arrears
Mortgage wars: Row erupts as Fine Gael’s Michael Noonan accused of being ‘vulture fund lover’
Frank Money
http://www.independent.ie/business/personal-finance/property-mortgages/new-mortgage-lender-to-shake-up-market-34425862.html

#141 TnT on 05.18.16 at 10:14 am

#124 Johnny on 05.18.16 at 8:22 am

Nice post Johnny – taking youngest kid for another week long camp trip. Life is great :)

#142 Prairieboy43 on 05.18.16 at 10:14 am

Buy cars/trucks that Appreciate (old camaro’s, old vette, old ford/chev 1940-70 trucks). Fix em yourself (easy, fun). Sell if someone wants it (right price), repeat. My opinion, you should not be driving if 1) Do not know where to check oil in vehicle. 2) If you are uncomfortable driving.
I see people driving with two hands on the steering wheel, with the death grip. These people are scared. Dangerous to themselves and others.
Not that people care an opinion.
PB43

#143 IHCTD9 on 05.18.16 at 10:14 am

#114 jane 24 on 05.18.16 at 2:41 am

Plus old cars have low fuel efficiency, you only think you are saving money by driving them until the wheels drop off. It is actually costing you every day. Plus in a climate like Canada old cars are unsafe, they fall apart in a crash. Never drive car that is more than 7 years old – too dangerous.

_______

No offense, but this is colossal hogwash. Some of the most fuel efficient cars ever built were made from the mid 80’s to the mid 90’s. OBD2 management and tighter and tighter emissions and safety requirements have cars burning more fuel and weighing more. A gas powered smart car can’t break 40mpg, while a gas powered 1st gen sprint with a carb from the 80’s does 55+ mpg.

The safety thing is debatable as well. Drive your Fiat 500 headlong into my 1985 Caprice Estate Wagon at 50 kph and lets count bruises…

#144 Lillooet, BC on 05.18.16 at 10:19 am

I guess many in Vancouver and Toronto probably say they should have bought that “hxxxx”!

#145 maxx on 05.18.16 at 10:36 am

#25 CJ on 05.17.16 at 7:14 pm

“Wondering why taking CPP at 60 makes sense? Aren’t we all living longer?”

When we all begin to really slow down at 60, 70, 80?…later?, we won’t be spending as much, in fact far less, except, not surprisingly, on our own maintenance and repair.

Time is priceless. Irreplaceable. Not saveable. Not for purchase. When time’s up, it almost always comes without warning. It’s absolutely impossible to prepare for the descent to the end of life. The ride is over. Many have seen it close up, and it’s the loneliest of experiences for the person at the end of the road.

For everything else within that remaining time, there’s (hopefully) a varied income stream, including CPP. It’s a choice based upon individual circumstances. Take it early for more years or later for fewer.

I’m getting out to explore and soak up the global sunshine rather than letting this portion of retirement income “grow”. This carrot’s just not enticing enough, even with indexing.

The TFSA, on the other hand, should be maxed to the hilt and not be touched.

I’d rather have fun, fun fun ’til a killjoy takes the TFSA awaaaay!

#146 pBrasseur on 05.18.16 at 10:47 am

#124 Johnny

Great post, one of the best I ever read on this blog!

My mom passed away at 75 from her third cancer, her first diagnostics war in her late 60s. She had been a nurse working with war veterans, she used to say that getting old was crap, she knew what she was talking about, she witnessed it every day and lived it later.

At 57, having managed well my financial assets, I’m now in a position to retire and it is a very tough decision to make, conventional wisdom tells me to keep working but I figure by doing so I’ll be sure to lose a good year that I’ll never get back. I do take care of myself but as you say the odds are against us.

You are right sir, financial independence is not about buying things, it is about freedom.

#147 maxx on 05.18.16 at 10:49 am

#31 hope & ruin on 05.17.16 at 7:19 pm

@ cdn flyer

“driving a car into the ground is not a good idea. I try to drive a car from 40k-120k km’s. Try to sell around 120k and get another. I think it’s the sweet spot between operating and maintenance costs vs price.

Who wants to be driving a car that requires a ton of work and isn’t reliable when you can sell earlier and move on.”

Depends on other factors than simply transportation. When it comes to cars, I don’t care what the hunk looks like, I want reliability. Period. I buy new and drive them into the ground. First car, 16 years of really hard labour and high mileage (300K km). Second car, on it’s 13th year, repeat the hard labour (200K km) and it (amazingly) probably has 10 years left. In both cases almost no maintenance, but we’re religious about oil changes and rust-proofing. Who could ask for anything more? :-)

Besides, dolts in supermarket parking lots scratch and dent other people’s cars and couldn’t care less.

#148 Bottoms_Up on 05.18.16 at 11:04 am

#134 Calgary Rip Off on 05.18.16 at 9:51 am
——————————————————-
You have thought that perhaps it is washable marker? Half of Garth’s pictures are likely staged photos….

#149 Bottoms_Up on 05.18.16 at 11:12 am

Financial selfie (of regrets):

1) Shouldn’t have opened an RRSP at the age of 18.

2) Shouldn’t have started saving while pursuing higher education (opening accounts, inactivity fees, and closing accounts costs money).

3) Shouldn’t have dabbled in options trading.

4) Should have pursued less education and entered the workforce earlier.

5) Should have delayed having kids 2-3 years (in current situation). Had I followed #4, could likely have had kids earlier.

#150 Bottoms_Up on 05.18.16 at 11:22 am

#109 Fortune500 on 05.18.16 at 12:33 am
—————————————————-
Fairly bad no? A southern Ontarian ranting about not being able to afford a house fresh out of university, with his friends being outbid by Chinese?

The moderator should have left the post deleted.

#151 lee on 05.18.16 at 11:25 am

Equities to remain crappy for rest of year – Goldman Sacks. Looks like an opportunity to deposit some cash in cheap etfs.

#152 Bottoms_Up on 05.18.16 at 11:31 am

#84 Love My Kia on 05.17.16 at 10:04 pm
———————————————–
Kia Rio = first in class for ‘mini’ car death rate, at 149 deaths per 260,000 registered vehicle years.

Kia Forte = mid-pack in the small car class, with 46 deaths per 190,000 registered vehicle years.

http://www.iihs.org/iihs/topics/driver-death-rates

#153 Farsyd on 05.18.16 at 11:33 am

I would add a rule, don’t lend money to family and friends. If you do give them money in any fashion, consider it a gift and don’t expect it back (though you may be able to write it off for tax purposes).

#154 cramar on 05.18.16 at 11:37 am

Intergenerational consulting is the latest booming employment field. Someone has to advise companies that Millennials want meaningful employment.

http://www.marketwatch.com/story/intergenerational-consulting-is-the-latest-booming-employment-field-2016-05-18

Just talking the other day to a fellow that runs a concrete-pouring business. He gets business by referrals only and has more work than he can handle.

He says youngsters want a career today, and don’t want to work. He says they stand around and look at their phones for text messages. So he collects all phones in the morning, and locks them in the glove box for the day.

Welcome to the Millennial generation.

#155 fancy_pants on 05.18.16 at 11:42 am

back just before the dot com craze I bought a boatload of something.com penny stock at 4¢ and sold at 10¢ maybe a month later. Wow, great return. Dagnamit, the thing spiked to $2 before the party ended. wah. but hey, no ragrets, anything in the black is a win. Penny stocks are high high risk but also offer potential high return.

Never bought a new car or leased a car. The sweet spot is a 2 yr old car until about year 7 (ideally a make with a 7 year warranty). Loosely, after about year 7ish you start to reach a tipping point were repair costs would have been better put up front towards that next 2 yr old car.

Also, best thing you can do if you keep your cars longer (I do anyways) is rustproof them every year or every other year (I do Krown). Best to start this early as it is preventative, not corrective.

I put about 15-20k on a vehicle each year though. your mileage may vary

#156 Ole Doberman on 05.18.16 at 12:20 pm

#155 fancy_pants on 05.18.16 at 11:42 am

back just before the dot com craze I bought a boatload of something.com penny stock at 4¢ and sold at 10¢ maybe a month later. Wow, great return. Dagnamit, the thing spiked to $2 before the party ended. wah. but hey, no ragrets, anything in the black is a win. Penny stocks are high high risk but also offer potential high return.
———————————————————-
ya deep regrets – those are the things that can change your life and all your future generations life forever.

#157 TheSpangler on 05.18.16 at 12:28 pm

#67 WIN “The lease payments to you as owner of the car are not considered income and are not taxable.”

False lease payments would have to be declared as income on your personal tax return,you would be able to deduct offsetting expenses against it.

#158 Ogopogo on 05.18.16 at 12:35 pm

#41 Smoking Man on 05.17.16 at 7:40 pm
A real entrepreneur will be just as happy broke as filthy rich so long as he don’t run out of ideas to try.

This may just be one of the best quotables I’ve ever read. Kudos SM!

#159 ottawamale on 05.18.16 at 12:47 pm

I’d challenge the “always lease a car”. A lot of motor magazines have looked at the “buy vs lease argument” over the years and generally buying new comes out on top, as long as these two conditions apply:
– you have a large down payment on the vehicle, say $12-15k; and
– you keep the vehicle for 8-10 years, and sell it privately when it’s time.

One is even further ahead if you by a 2-3 year old car (ex-lease?) than it is to lease all the time.

It’s not about saving money, but making the best long-term use of your capital. Cars are inherently depreciating assets so committing a “large down payment” to one – money which could be invested for significant long-term growth – is just dumb. You are looking at the trees, not the forest. — Garth

#160 Johnny on 05.18.16 at 12:57 pm

@#133 Capt. Serious

Funny that you’d bring up statistics and actuaries, as I actually have a degree in Statistics and my wife is an Actuary! What you got from that Wikipedia article – where your knowledge of conditional probability likely comes from – is the fact that if you get old, then it’s likely that you’ll get even older. This is counter-intuitive and you thought would be a good counter-argument to my “you won’t live to see 70” statement. What you didn’t get, though, is that in the context of the golden age, “old” means something like 75. So if you DO reach 75, then you’ll likely live another 5-10 years (not a life I’d personally want to live, but anyhow). And that is true PRECISELY BECAUSE you survived the 60-75 period, when most people bail out!

So you can either take the low odds of living a very long life, or the overwhelming odds of having an average or even less than average lifespan. If we could predict the future, then our decision-making will be perfect. Unfortunately, my crystal ball is in the repair shop, along with my used Mazda. So at this point I’ll take the higher odds and bet that YOU won’t live to see 70.

And one last thing about actuaries… For the life insurance policy in my company (150+ people) the death benefit is reduced by 50% after one turns 65 and is completely cancelled after one turns 70. I wonder what kind of mortality tables those actuaries were using?…

#161 Dan on 05.18.16 at 1:04 pm

Turdonto is the capital of the world. Buy a condo now, live your life In fullest and sell it in retirement and live rich. Turdonto is your beacon of light.

#162 Keith in Calgary on 05.18.16 at 1:06 pm

IHTCD9

I am on my third Smart car in the last 9 years. I easily get 55 MPG or more on the highway…

And as for safety I’ll happily run into the guy in his 95 Caprice Wagon…….at 60 mph no less and in a head on offset crash…….the most dangerous type of accident. While my left knee will damaged the rest of me will be fine. ……I doubt he’d fare anywhere close to that.

#163 Mixed Bag on 05.18.16 at 1:38 pm

#159 ottawamale on 05.18.16 at 12:47 pm

I’d challenge the “always lease a car”. A lot of motor magazines have looked at the “buy vs lease argument” over the years and generally buying new comes out on top, as long as these two conditions apply:
– you have a large down payment on the vehicle, say $12-15k; and
– you keep the vehicle for 8-10 years, and sell it privately when it’s time.

One is even further ahead if you by a 2-3 year old car (ex-lease?) than it is to lease all the time.

It’s not about saving money, but making the best long-term use of your capital. Cars are inherently depreciating assets so committing a “large down payment” to one – money which could be invested for significant long-term growth – is just dumb. You are looking at the trees, not the forest. — Garth

———————

Interesting. A more thorough “Buy vs. Lease” argument would include the cost of lost investment growth. On a higher end vehicle, the argument might make more sense – lease that Ferrari! Does it make much difference on 30 or 40 K?

#164 Ogopogo on 05.18.16 at 2:19 pm

Yipee!

“The odds of rate hikes this year have risen broadly this week, as several Fed officials delivered hawkish remarks.”

http://www.cnbc.com/2016/05/18/rate-hike-odds-spike-across-the-board-after-fed-minutes.html

Fingers crossed.

#165 family beagle on 05.18.16 at 2:23 pm

Canada has two different societies: rural and urban. They have different priorities and needs. This blog deals with urban concerns. It’s difficult for my urban relatives to comprehend that once I leave asphalt, I need no fiduciary plan.

Aside, most cures are within 500 steps of where you are standing. No one I know personally in the boonies has died of cancer. An eighty year old running a chainsaw is not uncommon.

Rural writers perpetuate the myth of hardship to suppress urban curiosity. In reality, life in the backwoods is filled with laze, music, firelit u-brew parties, and wanton swinger sex. Basically, a lot of stuff they won’t allow you to post on facebook. So, sorry, no selfie.

#166 Choices on 05.18.16 at 2:47 pm

The girl in the photo isn’t schooled as Smoking Man says.
She went to the Smoking Man Tattoo Parlor for her tattoo. I hope she has a money back guarantee?

#167 Joe2.0 on 05.18.16 at 2:51 pm

Rent vs Own
Had a RE agent knock on our door 2 months ago.
They wanted to speak to the home owner(Chinese and in China)of our house.
Sold, new buyers never even saw it.
Guess where they are from…
Gotta move out in 3 months.

#168 reader on 05.18.16 at 2:54 pm

Study in QC pointing condo resales is bad business

http://www.tvanouvelles.ca/2016/05/18/30-des-condos-revendus-sans-profits-ou-avec-perte

#169 WalMark of Sadkatoon on 05.18.16 at 2:55 pm

For the life insurance policy in my company (150+ people) the death benefit is reduced by 50% after one turns 65 and is completely cancelled after one turns 70. I wonder what kind of mortality tables those actuaries were using?…

copies from the Department of Capitalism and Profit

#170 WalMark of Sadkatoon on 05.18.16 at 2:56 pm

i regrat not buying more US real estate in 2009. easiest money ever

good ol days

#171 Game of Crones on 05.18.16 at 4:21 pm

#160 Johnny — “Funny that you’d bring up statistics and actuaries, as I actually have a degree in Statistics and my wife is an Actuary! “

The University of Phoenix called: They want you to mail your degree back. Maybe you could deduce the basics of actuarial probabilities from the two first principles of the science, as alluded to by #133 Capt. Serious.

1) What is dead cannot die.
2) What is still alive hasn’t died yet.

“So you can either take the low odds of living a very long life, or the overwhelming odds of having an average or even less than average lifespan.”

Your odds of living for shorter or longer than “average” are each 50%, given your year of birth. Nobody alive in Canada today, on average, has a greater than 50% chance of dying before seventy, male or female, infant or 69 years old. You offer to take bad bets. You’d make a poor underwriter, and a poor undertaker. Ask your wife.

#172 IM in C on 05.18.16 at 4:35 pm

Garth. If you are entitled to a –federal or provincial — government pension, never, ever, take the lump sum. Take the monthly cheque. The pension will be indexed and will be there forever.
True, if it is a corporate pension, which could disappear next week, take the lump sum and conservatively invest it

Disagree. I explained why. — Garth

#173 Bottoms_Up on 05.18.16 at 5:00 pm

#171 Game of Crones on 05.18.16 at 4:21 pm
————————-
Untrue? An infant alive today will no doubt experience advances in medicine that will keep them alive (on average) longer than today’s 69 year old.

Yes average age at death is a snapshot in time. But the reality is that as each year goes by, the average age at death goes up.

#174 cramar on 05.18.16 at 5:05 pm

#124 Johnny on 05.18.16 at 8:22 am
#160 Johnny on 05.18.16 at 12:57 pm

First, let me say I’m sorry to hear about your father. My father did not live to see 70 either. He died of a massive heart attack at 62. Then again, my mother died prematurely of influenza just weeks shy of her 98th birthday. She was still very sharp mentally, and her hearing and eyesight a wonder to behold. I remember at about 93 she said she didn’t like being in a retirement home. “Too many old people,” she said.

I told her she was one of the oldest there, and her reply was “I know that, but I don’t think of myself as being old!”

I find your comments extremely cynical and lacking in knowledge. We largely conquered infectious diseases in our modern western world, only to replace it with people dying of chronic diseases. According to the CDC, 7 out of 10 Americans now die prematurely from chronic diseases which are largely lifestyle related. Our modern society is killing us! Fake food and inactivity. Do some research on longevity. One good place to start is Dan Buettner’s books, “The Blue Zones,” and the “Blue Zones Solution”.

Most people who reach 70 in poor health do so because of violating natural laws that would ensure good health. Ignorance will kill you. I’m not there yet (less than a year to go), but so far I’m on track. No pills needed. Just fitness, energy, & health as a result of a deliberate plan.

Too many people have incredibly low standards of what living and aging is like—and live up to them! You are willing to accept the poor life you mentioned. You are as old as you feel. I feel like 40. I want to do something on my 70th that I haven’t done since a teenager. One arm push-ups. I’m almost there now. I did 12 at age 17. We’ll see at 70.

Believe me, I am enjoying my time on earth. Even though there are no guarantees, I want to do everything in my power to stack the odds in my favour. So far it is working. Time will tell.

#175 bdwy sktrn on 05.18.16 at 5:06 pm

Also, best thing you can do if you keep your cars longer (I do anyways) is rustproof them every year or every other year (I do Krown)
—————————–
rustproofing? what’s that?

why not just drive where road salt in never used – the 604

my current truck i got at 20yr old. (auto expert here)

leather, loaded, 4wd for 2k and change. hauls big stuff, boat, trailer, gear, gravel etc.
wouldn’t hesisitate to drive it to panama and back
over 2.5 yrs now runs great, 100% reliable, will obliterate any new bmw in a head on. if anything serious blows now i can give it a big kiss and say goodbye on the side of the road with a smile on my face. (but it’s a GM. but for all their issues, still make the very best trannies and engines for trucks (vortec) so it will likely keep running for another 20yrs)

i will never pay for tires again, for a set of suv/truck tires i’ll just replace the whole vehicle with another that has decent tread.

costs less than a cell phone plan per month
works like a rented mule.
heck you can skip ALL oil changes for the last 2 years too.
what’s not to like?

#176 Well Said on 05.18.16 at 5:06 pm

#124 Johnny on 05.18.16 at 8:22 am

According to the Bible, the God given human lifespan is around 70 years. Yeah, most of what the Bible says is hogwash, but the holy book was on the ball in a few aspects. Even a broken clock is right twice a day.

We are not living longer; it’s just that fewer of us die young, which brings the life expectancy up (think that 100 years ago there was no anaesthesia and no antibiotics; 200 years ago there were no vaccines). The odds are that YOU ARE NOT GOING TO LIVE TO SEE 70. Yes, YOU, the person reading these lines. I know, you still don’t believe me. “But I don’t drink, I don’t smoke, I eat healthy and play tennis every week!” Yeah, my dad also did all that. Result: acute myeloid leukemia right as he turned 60. Contributed to the pension plan for 40 years and didn’t get the chance to spend one cent of his pension like he imagined. After 60, the odds of developing a cancer are through the roof. The least of your worries should be what happens to your RRSP when you turn 71, because you most likely won’t (yes, YOU). You wouldn’t want to, anyway. For most people older than 70 the quality of life is terrible, and not due to lack of money. The body is failing them. Basic tasks are a challenge. They need to be careful not to mix up the 15 types of pills that keep them going. It’s really not a fun time, no matter how much you have stashed away.

But one mustn’t live in constant fear. Not fear of running out of money and certainly not fear of death.

Save 10% (or more) and invest it in anything but individual stocks (yes, mutual funds are fine; the ones I have beat the crap out of the returns I manage to get on my own). Live below your means. Don’t buy overpriced shit you don’t need. Pay special attention to cars and houses. Bad decisions on these these can bankrupt you in a hurry.

Enjoy your limited time on this earth. The fact that it’s limited only makes it more valuable. And by “enjoy” I don’t mean “blow all your dough on a lease for that shiny new Audi”. “Enjoy” as in “go out and DO things instead of BUYING things”. And do the things you want to do sooner rather than later. ‘Cause you never know. My father certainly didn’t.

___ ______ —- —–

Well Said. We die. One of the greatest deceptions of our time is the notion that we don’t die. People are always “shocked” when someone they know or famous dies, as though they didn’t see it coming. When on a person’s death bed, people reflect on their relationships that were of value, not their trinkets.

#177 jay on 05.18.16 at 5:07 pm

The s%6# starting to hit the fan in Van. http://bc.ctvnews.ca/baby-s-crib-in-the-bathroom-campaign-highlights-vancouver-housing-crisis-1.2907552

#178 The Truth Shall Set You Free on 05.18.16 at 5:15 pm

To Jack Hammond:

Parable of the Rich Fool. Jesus told them a parable.

“There was a rich man whose land produced a bountiful harvest. He asked himself, ‘What shall I do, for I do not have space to store my harvest?’ And he said, ‘This is what I shall do: I shall tear down my barns and build larger ones. There I shall store all my grain and other goods and I shall say to myself, “Now as for you, you have so many good things stored up for many years, rest, eat, drink, be merry!”’ But God said to him, ‘You fool, this night your life will be demanded of you; and the things you have prepared, to whom will they belong?’ Thus will it be for the one who stores up treasure for himself but is not rich in what matters to God.”

-Luke 12:13-21

#179 maxx on 05.18.16 at 5:34 pm

Today’s chuckle – for dawgs who haven’t already seen this Tommy Tiernan gem.
It’s side-splittingly hysterical. Start at the “debt” segment at 2:47 minutes.
https://www.youtube.com/watch?v=CqaTjnP58dI

#180 jess on 05.18.16 at 5:44 pm

David Cay Johnston :

…”it’s all about tax rules that require you to depreciate, or reduce, the value of buildings over time, even if the market value of the structures is going up. If your depreciation is greater than your traditional income from work and businesses, Congress lets you report negative income. If these paper losses are just a dollar more than traditional income, it wipes out your income taxes for the year.”

http://www.usatoday.com/story/opinion/2016/03/08/real-trump-tax-scandal-david-cay-johnston/81436212/

If Trump’s returns show he has paid no income taxes in some years, that could be a reason he has not yet released details.

Congress says most Americans can deduct no more than $25,000 of real estate depreciation against their income. But if you work two days a week managing real estate and own enough that the depreciation exceeds your salary and other income, Congress lets you live income-tax-free. And for as long as you keep buying buildings and depreciating them, the tax does not come due.”

#181 bdwy sktrn on 05.18.16 at 6:12 pm

#178 The Truth Shall Set You Free on 05.18.16 at 5:15 pm
To Jack Hammond:

Parable of the Rich Fool. Jesus told them a parable.

“There was a rich man whose land produced a bountiful harvest. …. …. eat, drink, be merry!”’ But God said to him, ‘You fool, this night your life will be demanded of you; and the things you have prepared, to whom will they belong?’

———————
is this an advertisement for some sort of will preparation service? is there another message in here?

fairy tales have no place in investing.

#182 nonplused on 05.18.16 at 8:12 pm

#131 Maxx

Thanks, and I am betting you have a jeep yourself because you seem to understand. Older jeeps are so cool that if you get rust and spray it with rust paint it is even more cool.

They don’t appeal to the Land Rover crowd at all, but they have a strong and loyal following. My oldest daughter takes it out to Victoria for school (dropping my younger daughter in Vancouver where owning a car or leasing one is pointless, you can walk faster) and it has been renamed by her friends: It is now the “adventure jeep”.

The 4 liter inline 6 is a lifetime engine in a vehicle that size. It’s been all over the island now carrying gear, bikes, passengers, etc. The 4 wheel isn’t as good as some newer traction control systems but she’s never got stuck. Ground clearance is exceptional for the style of vehicle no lift.

People here have complained about the mileage of older vehicles, but it’s only about 2 liters per hundred k behind my wife’s 2006 Ford Explorer 4.6. And it’s a trustier and easier to repair vehicle.

PS lots of complaints about the Explorer, for some reason nobody like them and we have had the usual Ford problems like the gear shifter falling apart, But again we bought it lease-back and have put 120,000 on it with no major problems. Biggest reason we bought it was well half price after 2 years and 40,000k, and 10,000 lbs towing capacity. You won’t find that on a new Explorer.

#183 john on 05.19.16 at 12:30 pm

So my accountant counseled me to take CPP at 60. I would have got about $575.00 maybe slightly more. I didn’t do that. In fact I didn’t take it at 65. I am still working so I paid into it after 65.i finally took just shy of 68. It comes to 1225.00. I am self employed with no pension and I split income with my wife out of the office income.i expect in a year or so she will get something over 1400.00 a month CPP and OAS. So we will get about 38,000.00 to 39,000.00 a year from the Govt.you can live on that if the house is paid for and you have no debt.Not a extravagant life,and it shouldn’t be its Govt money,but an interesting life if you have the wit to live one.Just saying

You left $55,200 on the table, which could have grown by now to more than $70,000. If you die within a decade, you lose. Actually, you don’t have seventy grand right now you cold have had otherwise. Lose-lose. — Garth

#184 Jens on 05.19.16 at 1:27 pm

Garth, can you expand on your advice to lease a car? I’ve always considered financing and holding for 10 yrs as the right move (obviously depending on maintenance costs).

Thanks.

#185 Barb on 05.19.16 at 4:51 pm

Leasing? Jeez, paying a lot of GST each and every month, none of which I can claim as an expense?