First up, a note from Allison. I think she saw my name and email addy scrawled on a washroom wall in one of those sleazy Queen Street West hip-hop joints:
“Hi Garth: I see that you are highly recommended. I’m 33 and I have about 10-15k I want to invest. I don’t know anything about anything, but I would really love to have financial freedom in my 40s. Interested in helping me?”
Sigh. There are no words. Financial freedom in a decade, starting with ten grand. And I bet she has two degrees. Advice for this lost chick in a few minutes. First, the big news…
The Canadian dollar’s been beavered again as the US currency surges. Nope, it wasn’t solely that workmanlike speech by Trump, but rather electrifying remarks by Federal Reserve dudes with a simple message: get ready. Rates are going up. Like, immediately.
A week ago the odds of a pre-emptive Fed strike on March 15th were a forgettable 20%. By mid-day Monday they’d surged to 50%. By the time Trump took the podium in Congress, they were approaching 70%. So what looked like a long shot days ago now appears a virtual certainty (at least markets believe it to be so). And if the central bank jacks the cost of money in two weeks, just three months after the last one, then the odds of three rate hikes in 2017 is a decided possibility.
Remember what this pathetic blog has said about having a fifth of your portfolio in US$-denominated assets? Hope you listened.
So what’s going on? Why the sudden rush in monetary policy?
In a few words, Trump’s changed everything. Look at the triple-digit, all-you-can-eat romp for stocks on Wednesday. Gone are the last eight years of low-rate, low-inflation, low-growth, low-T, slow recovery plodding, replaced now with hyperventilating, braggadocio, alpha-male swagger. Tax cuts, infrastructure spending, military surge, border tariffs, America-first – it’s all catnip to investors who see more growth, more profits, more jobs and wealth. (The Dow just blew past 21,000 for the first time.) For the central bankers, it spells stimulus, expansion and inflation, which means they feel compelled to control it.
And they will. Starting, it seems, March 15th.
Says NY Fed boss William Dudley: a rate hike soon “has become a lot more compelling,” since Trump. Says SF Fed head John Williams: “I personally don’t see any need to delay raising rates. In my view, a rate increase is very much on the table for serious consideration at our March meeting.” Says Phill Fed chief Patrick Harker: “Three rate hikes this year.” This is about as definitive as these guys get. So in response there’s been big selling in the bond market, with prices falling and yields rising. Meanwhile stocks are swelling at the same time, since rising rates mean economic strength – a fact being reflected in the muscular greenback.
So where are we in this vat of Yankee testosterone?
The Bank of Canada on Wednesday left interest rates pat, citing economic headwinds, fears of Trump-induced trade barriers and tepid growth. The loonie slumped beneath the 75-cent mark, even as Bay Street stocks rocked higher. Lying ahead (in two weeks) you can probably count on a sliding Canadian currency, rising bond yields and upward pressure on fixed-rate mortgages. If the POTUS follows through with his rhetoric of Tuesday night, then we might also be staring at the dreaded Border Adjustment Tax in the months ahead, seriously bad news for the vital export sector.
And what are the people around you doing in the face of rising rates, a falling dollar, trade tussles, torpid growth and tougher taxes? Collecting windfall gains from inflated real estate and shifting prudently into strengthening financial assets? Nah, not a chance. They’re addicted to the little blue dots on realtor.ca, dreaming of elephantine mortgages and seductive caesarstone counters or, like Allison, looking forward to financial freedom because she’s, well, special.
Did I ever mention this won’t end well?
Listen, kid, you’ve a better chance of landing Evan Spiegel than you do of retiring in your forties (although that would solve everything). Investing and wealth accumulation takes decades, not years. The best chance any young person with ten or 15 thousand has of sustained success is to dump it all into a TFSA, then find $100 a week more to add into the plan, investing it in the GreaterFool Approved ® mix of exchange-traded funds. That means a 60% growth component (by thirds, in Canada US and international, including some REITs) and 40% safe stuff (half in preferreds, the rest divided between government & corporate bonds).
Invest it. Forget it. Add more faithfully. Touch nothing. By your mid-forties you should have $136,000.
If that’s not enough, try this: [email protected]
152 comments ↓
You were definitely right Garth, people are using their homes like ATMs:
“1.91 Million Canadians Are Borrowing Against Their Home Equity” That’s a butt load.
https://betterdwelling.com/1-91-million-canadians-are-borrowing-against-their-home-equity/
Remember what this pathetic blog has said about having a fifth of your portfolio in US$-denominated assets? Hope you listened.
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I didn’t listen Garth. In July and August I transferred 80% of my assets to US equities when I knew through my research Trump was the winner. It’s paying but even more so (relative to the TSX) in the long run.
First Allison has to remove Miranda May Kerr, a Victoria’s Secret Model!
Possible, the Millenial Revolution did it. But be ready to bump your savings rate to about 65%. That’s the tough part.
The MR couple did it – but they started it with $500K, not 10K. Small difference. — Garth
Kicking up the dirt for my grave I’m on the retire mode. Trying to make sense of all the crap out there is not helping me sleep at night. I need that dividend income along with my OAS and CPP. A million bucks invested safely should generate 80K a year? Maybe? Maybe not. So uncertain now.
Garth, I have never posted before but here is some information for some of the blog readers to check out.
To all the people on the blog who believe house prices in Toronto will continue going up up up:
Actual numbers:
Toronto house: 250,000 deposit, 5 year 2.89 % mortgage, 200,000 income and just for fun: 0 debt, 0 personal expenses .
Maximum house price the affordability calculator spits out: 1,286,000.
There is a whopping $ 127 left per month for food, clothing, investing and anything else you do in your life.
https://tools.td.com/mortgage-affordability-calculator/
Average detached house in Toronto: 1,350,000
http://globalnews.ca/news/3102085/average-price-for-detached-home-in-toronto-hits-1-35m-as-prices-soar-real-estate-board/
Average Toronto household income: 98,033 (btw – half the income needed for the average house). This income with 250 k deposit means you can buy a house for 732,000 and still have 156 / month for all of life’s pleasures!
https://www.thestar.com/news/city_hall/2017/02/25/a-close-look-at-property-taxes-shows-why-toronto-council-is-slow-to-raise-rates-james.html
Total 1% Income earners in Canada : 268, 500 people (earning 191,000 + 2016 data)
Total 1% income earners in Ontario : 107,131 (39.9 % of the total)
http://www.financialpost.com/personal-finance/taxes/much+canadians+make/4497362/story.html
https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011003_2-eng.cfm
Conclusion: In terms of income level, there are about 268,000 people in Canada who can afford to buy the average 1.35 million house in Toronto. That drops to 107,000 people in Ontario who can afford to buy that same house (assuming they have 250k deposit).
Number of detached homes in Toronto: as of 2011: drumroll please… 820,895
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil124c-eng.htm
Enter the bank of mom, third party loans for down payments etc… what if personal debt were at record levels and interest rates rise (that could never happen right?) ?
Sir Garth:
It was the best of times, it was the worst of times!
I have been waiting all day for Garth’s blog after Trump’s speech. Nothing is official until Garth talks about it.
My Greater Fool portfolio is up big today.
Thanks Garth!
Canada is looking a lot like Spain right before the crisis.
This video helps to understand:
https://www.youtube.com/watch?v=PSGp2Hh1jQ4&t=0s I really recommend!
Another great post Garth. The lack of financial literacy in Canada continues to amaze me.
The next federal budget will be interesting. It would seem Mr Trudeau and company will try to tax us into prosperity.
What about the rising sales in Calgary?
Has this market bottomed?
A RE buddy wrote on facebook he got an offer 25k over asking and it wasnt enough.
You wanna make quick money, Snapchat starts trading tomorrow, it will easily double in this market in a week or so, go all in
They’re addicted to the little blue dots on realtor.ca-GT
………
You have blue dots? Mine are red.
The best chance any young person with ten or 15 thousand has of sustained success is to dump it all into a TFSA, then find $100 a week more to add into the plan, investing it in the GreaterFool Approved ® mix of exchange-traded funds-GT
………………………….
Or do what I did. Transport yourself back to 1995 and buy in the Toronto market and the retire at 48. Oh, and pay down that mortgage quick!
Meanwhile my family members are still jumping into condos around Vancouver telling me I missed the boat…..rock on family….rock on!
Some time ago, I gave my broker a big chunk of American cash with instructions to buy stocks paying dividends in American dollars. I hope it was the right thing to do. Maybe I should have bought zlotys or dinars. Gone radical emerging economies. With the song and dance team, Donald and Vladimir doing the tango together, maybe I should have bought stock on the RSX. Or what about the NSE, one of those companies that keep sending out letters representing a wealthy person desperate to get his money out of Nigeria. Diversify Garth says.
When the 5 year crosses above 4% it is the start of lights out for many a Canuck
Watch 2 numbers: 5 year Canada yield and the 10 year US treasury
Dow trending up will keep the pressure on yields as trillions of dollars has slowly started to flow out of euro zone and soon Japan and EM into US
Housing is RIP once mortgage rates rise a little more than 1% from where they are now
Little that Poloz can do but he will try to keep the illusion and try to placate the masses
When the 5 year fixed mortgage crises 4% trouble starts
“workmanlike speech by Trump”
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That low energy smear, hinting pedestrian “incompetence” (the latest “resistance” effort to try on Trump, hoping something, somehow eventually can stick) is quite an improvement from the usual, worn out “racist, xenophobic, misogynist ” label.
If only Trump was socialized on the lingo spoken by career politicians, MSM media workers, social activists, lobbyists, network television comedians and other political “experts”…
They all failed spectacularly to predict president Trump, because they simply could not translate his boardroom, CEO lingo as a valid political platform.
Workmanlike (def): “showing efficient competence.” Try not to be such a dickhead next time. — Garth
Yup, Go US dollar!
And just to back up what Garth has said elsewhere. Buying gold is A Really Bad Idea.
And the retarded app Snap Chat is going to raise 20 billion dollars by the time all is said and done. SIGH…..
Anyone check out phakebook lately? LOADED with ads. Its ads ads ads ads And they wonder why so many people are dropping the phakebook account.
Hi Garth
I was wondering if I should even have a non reg account until yesterday when I transferred half my earnings into an RRSP account I recently opened.(Have another one at work I am stuffing but still have lots of room.) Boom, no tax worries and what’s left in the non reg is tax free. Now I get it. Sweeet.
Thanks. Stay mellow
#7 Jason
Your “actual” numbers are nonsense. In your example monthly income is 11k after taxes and mortgage payment is less than 5k. There’s plenty left over to live.
Finally, just because the average price of a detached house is 1.35M doesn’t mean the average piece of real estate in Toronto is 1.35M.
If wishes were horses, beggars would ride.
I like seeing the portfolio going up, but can’t help thinking we are just planting the seeds for the next financial pop at some point in future. Can’t let emotion blind your faculties. Just cause it’s good now, that’s not the new normal that is going to last forever. Thankfully, the same applies when it’s bad. Enjoy the ride…
You can have a Canadian dollar traded etf like vun and your still exposed to USA currency.
That was explained to me still can’t wrap head around it.
Can you explain garth?
that picture is priceless.
250 million $ house
http://www.msn.com/en-ca/money/homeandproperty/inside-the-most-expensive-house-in-america/ss-AAnxt2y?li=AAggNb9&ocid=mailsignout#image=1
Garth. You have given great advice over the years. However people are like sheep,hence one shepperd ,1000 sheep. People don’t want to face reality. Life is emotional,not logical.Now the movie is going to be fun to watch.
Never bet against America.
They are the biggest, baddest dog on the block. They have a true union (unlike the EU riddled with economic problems trying to emulate the USA who has had a centuries head start). The Americans write the rules of commerce. When times are great, capital flies to America. When there is doubt or chaos, capital flies to America. Most any country will take the USD in lieu or their currency. Never bet against America. Ever. If America ever fails, it will be game over for the rest of the world’s economies, too. I’ve changed my portfolio mix in regards to Canadian equities, emerging markets, Asian markets, China, European bluechips etc. but I don’t diddle with my US equities. America is not a country, it’s a business.
Garth you mention holding US denominated assets but how is the best way to do that?
A rather addictive Twitter feed chronicling the utter blow-off top insanity currently taking place in Toronto.
Worth a peek just for the pictures of these “homes”.
https://mobile.twitter.com/RobynUrback/status/835533894111932417
The MR couple did it – but they started it with $500K, not 10K. Small difference. — Garth
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Please dont bring those two up again. I just had lunch.
Garth- moderator #22. Please. Also can we add “retard” to the list of unacceptable language? Blog dogs are creative- they’ll come up with another way of expressing themselves.
Thanks Garth
Begin in your 30’s with maybe 15K, retire in your 40’s? Maybe if she purchased a lottery ticket that won a major prize. Or somehow got a Bre-X kind of deal going & got out before it collapsed. Otherwise best to adjust her expectations…..
workmanlike speech by Trump
_________________________________
Well, … not a surprise. Trump is finally getting it that his superiors are in charge. Period.
It’s true, … I read all about it in The New York Times:
“This New York-iest of politicians, now an idiosyncratic, write-your-own-rules president, has stumbled into the most conventional of Warshington traps: believing he can master an entrenched political press corps with far deeper connections to the permanent government of federal law enforcement and executive department officials than he has. ….
“[Trump] is being force-fed lessons all presidents eventually learn – that the iron triangle of the Warshington press corps, West Wing staff and federal bureaucracy is simply too powerful to bully.”
[ … bold added for emphasis.]
Trump Ruled the Tabloid Media. Warshington Is a Different Story.
https://www.nytimes.com/2017/02/25/us/politics/trump-press-conflict.html?_r=0
F.S. – Comox, BC.
Suggest Alison watch 50 shades of grey and its sequal a few times.
Dear Garth, what advice would you give to a man with gambling and drinking addictions who has a house in southern Etobicoke? Sell or invest in a typewriter?
Do you think smoking more could help with longevity risks?
What does Allison look like? Is she hot?
I’m a male in my forties, possibly going through a midlife crisis.
Lie to me if you have to.
Anyone know any wealthy foreign (or local) investors that want to invest in prime Oakville residential real estate in the 1.5 million range? If I can convince my better half we would sign a long term lease to stay and rent it back. 1.3 million invested at 6% sure does help cover the rent!!
Only a few hundred times :)
Except now it has started, but everyone is busy blaming something else (take a pick, the choices are endless). This narrative is so convoluted, the cognitive dissonance so monstrous, that even Cassandra would not get recognition for seeing the inevitable.
136K by your forties? Hope you like catfood…
How do you ever expect a generation who want everything ‘right now’ to ever have the patience to accumulate what they need to retire. As one financial advisor told me many years ago when I first started to save. He said, “slow and steady wins the race”. He told me he had many senior accounts with people who had never had large earnings with very large portfolios. These people knew the time it took to save. Boring but effective. I’m not sure this generation is up to the task.
#10 Greater Fool on 03.01.17 at 6:07 pm
I dated two spanish speaking girls back in a day, one was from Guatemala and second was from Columbia, I did my best to learn as much of Spanish as I could because when chica colombiana would fly of the handle she would switch to Spanish in an instant. I new how long tonto was mentioned I was safe, no need to run for my life, no phone call to uncle Pablo. But when I first heard mayor tonto I knew…
What brings me to my point, how about you find us that video on inglés?!.
https://www.youtube.com/shared?ci=hcIiZ1LUp5A
Well I haven’t watched Trump’s full speech, but from what I’ve seen and read he’s moving from “campaigning” (which in the US is nasty business) to “trying to build a consensus”. Will he succeed? I don’t know. But if he does, maybe the Trumpocalypse won’t be so bad after all.
As for Allison I have a way she can achieve her financial objectives: Marry a rich older guy and drop 2 kids. But hurry! You only have 3 years before you become “high risk” in the pregnancy department.
When I was in my 30’s I accumulated a lot of money. There were 2 sources, or I should say 2 ways from the same source. First I was getting paid a lot in salary and bonuses and I never spent a penny from the bonuses except to pay down debt. Second, we had stock options in those glorious days and I always asked for more options rather than more bonuses and held them to near expiry. It was at that time a brilliant strategy, although it wouldn’t be now and outright stock options are no longer really available like they were handing them out then. And to be fair I didn’t know how well it would work out I just thought they offered more leverage with no downside than I could get anywhere else.
So then an interesting thing happened. Many of my friends and relatives started asking me for investment advice. They wanted to know how I got so far ahead so fast. What was I to say? Accumulating thousands of free stock options was not an option for them. They didn’t understand that though and thought I was just being an ass because I wouldn’t tell them the secret. I would say things like “well the first thing you have to do is spend less than you make so you can save and invest”. They thought this was just stupid and I was holding back my secret. Some of them actually got quite mad at me because I wouldn’t give them “the secret”. I rode a temporary trend that isn’t available today or to most people even at the time.
I still get paid pretty well when I work but not like that. The world has changed. Companies liked stock options in the day because their stock prices never went anywhere, so it was viewed as a low cost incentive. Once they started having to pay out they quickly revised the programs to be more guaranteed but with much less upside potential.
So my real advice to Allison is to get money quickly you have to somehow be in the right place at the right time where you can take advantage of a trend not many other people see. Garth’s method works too, and that’s what I am doing now because I don’t have an opportunity currently that I can see. I’m still looking though. But I’ll take 6% until I find it.
So then back to the part of spending less than you earn. For this part, it was easier for me than some people because my parents weren’t doing so well when I was a kid. They married young and had babies right away, before they could even afford to move out of a basement suite. I was raised on used stuff and thought it was normal. My dad then went broke in the ’82 collapse and we had to move twice in a year because they couldn’t pay the bills, finally being saved by a “loan” from my grandmother. (That was probably ok, my dad saved my parents when he was young and my grandfather got sick. He was the only child of 7 that got to drive the car because as my grandfather said, “he paid for it”.)
But I went to University (which was unheard of in my family at that time) because I got a scholarship and thought I may as well check it out. I then eventually started earning 3 times what my siblings were earning but living much more modestly. I didn’t buy my first new car until I was 44 and at that time it was less than 2% of my net worth (and it wasn’t cheap). Whereas my sister was leasing a new van every 2 years but couldn’t scrape the money together to save a dime.
So anyway that is a long backstory, but here is the summary of how you build wealth: Spend less than you make, and invest the difference. If you happen upon a low risk high leverage opportunity, seize it. And don’t spend it like income they don’t come along every day. Invest it.
The Queen W place http://brooklynnbar.com/
Guest hiphop DJs on Tues w/$4 Jamesons. Nuff said.
My foil to the overhyped and plastique King St W party strip.
As the other Garth (B.) sang: “‘Cause I’ve got friends in low places…”
…
– A credit card tip, people tell me use Amazon.ca’s Chase Visa – card with next to no FX conversion fees on it.
Sigh, is right! Allison, at 33 with under $15k, and wanting to retire in her 40s!? [trying to keep from laughing] Sunny ways, Allison, sunny ways.
Great advice Garth, except that you could have added a bit more “By your mid-forties you should have $136,000, and by your mid-sixties you should be able to comfortably retire. Look on the bright side. At least you will not have to eat dog food and work until 75.”
Hi Garth, Is your 20% USD rec based on a particular logic? We’re at 45% in our RRSP due to a USD income. Should we pare down to 20% if the loonie ship sinks? Originally we were on the fence about which country to retire in. Now pretty sure Canada. Thanks.
“dump it all into a TFSA”.
Allison, only $5,500 a year (otherwise there’s a penalty).
But always put the maximum amount into your TFSA annually.
You’ll thank Garth when you’re 50 or so.
Because you’ll keep doing that annually.
Indeed, we got a 4% jump in the 10-year interest rates.
I don’t feel this Fed guy said much. And the market just priced it at a TNX of 2.46%. Apparently people with mortgages should start sweating when it breaks-up above 2.80%. That’s the real event.
When it happens, we’ll still need much patience. Banks will slowly raise their rates. Waiting for prices to fall will be like watching paint dry.
Hypergamy should be Alison’s game plan.
I miss Boom :(
I’ve be growing a Canadian Couch Potato portfolio for 4 or 5 years now and the 25% Canadian bonds portion have been very disappointing so far.
It’s the only portion in red at this point.
I find it hard to keep throwing money at bonds. Especially when I’m 34 and retirement is far, far away.
The potato guy got it wrong. Been said here often. — Garth
#26 Bobs ur uncle on 03.01.17 at 7:04 pm
I like seeing the portfolio going up, but can’t help thinking we are just planting the seeds for the next financial pop at some point in future.
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Indeed, feels very 1999. Everything is cool… until it isn’t.
Better I guess to make paper gains now than rotting in GICs so less to fall back to in 2019-20. Still keeping bonds because diversity and I still don’t trust all this bravado.
Also, NEVER, EVER hedge on poloz peso, I make most gains off simple currency offsets. in fact once the gobberbment starts going after dividends I’ll drop all moose and beaver, forget this.
Garth had it right a few months back to scale back on maple to max 17%, very glad I did so might go to 15% on next rebalance.
A question for the blog dogs/Garth. US denominated assets – does that include Canadian ETFs like iShares XWD? That ETF is not currency hedged. If the dollar looses 1%, the ETF goes up 1%. Does this count as having “US denominated assets”? Do I need to actually have real USD in my investment portfolio?
Real Rates plunged this month (FEB data) with the spike in total CPI to 2.1% (previous month was 1.5%, the BoC target is of course 2%).
My chart: http://www.chpc.biz/real-10yr-rate.html
The real 10 year is back in Nirp-o-Nomic territory where it has been for 10 of the last 14 prints.
Zero Hedge noted today that U.S. 3 month Libor is back up to eight year ago highs.
http://www.zerohedge.com/news/2017-03-01/libor-spikes-most-15-months-8-year-highs
Canada continues to stubbornly bet on inflation and I just peeked at the new earnings data across Canada which is up across the map (I will get the chart up tomorrow) – so that’s a good thing for the inflationistas. Bad for housing prices though if nominal market yields continue to tick up and force the Bank of Canada to follow suit.
Canada accidentally released un-redacted classified documents on its counterterrorism plans.
The plans detailed Canada’s procedures for responding to a “9/11-style” terrorist attack. One of the safety measures allowed fighter jets to shoot down a hijacked commercial airliner to protect the CN Tower, one of Canada’s largest buildings.
http://www.businessinsider.com/canada-united-states-combined-defense-plan-2017-3
“Remember what this pathetic blog has said about having a fifth of your portfolio in US$-denominated assets? Hope you listened.”
Yes I did …………. Thanks Garth! Ka-Ching!
“In a few words, Trump’s changed everything. Look at the triple-digit, all-you-can-eat romp for stocks on Wednesday.”
Excellent writing Garth! I’ll bet you have 3 degrees? LOL
“Investing and wealth accumulation takes decades, not years.”
Slow and steady wins the race Garth. I’ve been investing for 35 years now. Once you get to the bigger numbers then it really starts to turn into a waterfall. Ka-Ching!
your advice is for her to go without the little things in life, to save and when she is in her mid 40’s she will have a hundred grand. Why? Why would anyone do that? Do you know i see a millionaire and a popper having coffee at tim’s every morning, no difference, one worked his but off, the other did nothing, both there having a coffee. working and saving is for suckers, just vote left, and wait for your government cheque. or sweat and toil for a little bit, but it wont change your life. so why sacrafice the little things that make you happy every day, a lunch, odd dinner out, a movie, that dress you like, sacrafice for what, no one cares about you, and we all die alone, one box a person, no exceptions. so why? millionaires and billionaires watching stocks and bonds go up and down, 99% of people are irrelevent in the game, tomorrow morning like every morning you will be stick in traffic at 8am on the 401 like every other day, regadless of the Dow or interest rates or anything.
#39 Leebow on 03.01.17 at 7:45 pm
Dear Garth, what advice would you give to a man with gambling and drinking addictions who has a house in southern Etobicoke? Sell or invest in a typewriter?
Do you think smoking more could help with longevity risks?
…..
Cute…..my advice would be both and quit smoking. Since when do I listen to anyone.
So long dogs….. my post have sucked for the longest time. Use to be good. Going dark. Of the web. Clear my head. Become more posative and be nice to lefties lunatics again.
When Im feeling better.
I’ll be starting up a you tube channel, planning a 2 month road trip in a winobago to heart of the American dream.
Now that I’ve made up my mind to offiicaly retire from code smithing, those ungrateful pricks. Just kidding. I’m a mess and I know it.
No need to mask my identity anymore. I’ll be reporting from all the states that have an ocean. Provided I can successgully slay my friend Jack Daniels over the next month or so.
My Gonzo Experiment back fired huge.
Once Gambler always a Gambler.
Pease Out…..
” One of the safety measures allowed fighter jets to shoot down a hijacked commercial airliner to protect the CN Tower, one of Canada’s largest buildings.”
Shoot down 200+ Canadians on a commercial aircraft to save the CN Tower. You are joking, right? The CN Tower is not exactly the World Trade Center or the Pentagon.
If this was Plan A, let’s move on to Plan B.
All this growth! How exciting! If only I could get invested already…
‘Canada accidentally released un-redacted classified documents on its counterterrorism plans.’
————————————————–
Don’t be so naive. If it were a truly ‘confidential’ document it would never see the light of day. There are publication bans on every such thing in this country and there are even publication bans on there being a publication ban. And, there is not one journalist or newspaper with the stones to break the bans even if they knew it was for the greater good. Also, every news organization has on its staff someone who’s sole job it is to ensure that no such restricted thing ever gets into print.
And here I thought that only having 100k at 30 was “too little”…
Allison, go read mrmoneymustache from start to finish, then invest according to Garth’s asset allocation. Based on your starting point, investing cannot get you there alone. You need a lifestyle change so you can put 50%+ of your income towards investments each month.
#54 BG on 03.01.17 at 9:40 pm
I’ve be growing a Canadian Couch Potato portfolio for 4 or 5 years now and the 25% Canadian bonds portion have been very disappointing so far.
It’s the only portion in red at this point.
I find it hard to keep throwing money at bonds. Especially when I’m 34 and retirement is far, far away.
The potato guy got it wrong. Been said here often. — Garth
—
You’ll know the day when those bonds matter, I wouldn’t worry too much. 25% is not too much. I have 20%, I’m 25.
Couch potato portfolio is the way to go if you don’t want to mess around with 7 different ETFs with higher fees aka Garth’s style. Or you can pay him to do it. That’s cool too.
You can alternatively substitute your bond holding for shorter term or investment grade corporate bonds. Although it’s not worth much IMO for long periods of time. I think Garth’s portfolio is for old folks who want income and stability. It’s very balanced.
Potato is the way to go for the young folks who don’t want to lose money to fees, and keep it simple. 3 ETFs and you’re good for a while. Your equity will grow, your bonds will dampen volatility and help you stomach it.
If you want more from bonds, consider corporate or shorter term bonds. Or as you should know from being around here, preferreds. Although I don’t know what I’d need those for at my age, unless I’m trying to play interest rates which I’m not about to attempt or worry about
I try to set it and forget it, I don’t want to fiddle around at risk of attempting more than that..
Learn more, kid. — Garth
Workmanlike (def): “showing efficient competence.” Try not to be such a dickhead next time. — Garth
….
Oh, that’s awesome!
Excuse my recency bias… Who would have thought that you make a leap from “racist, xenophobic, misogynist” to “efficient competence” in a matter of days?
Congrats!
It’s obviously a fake claim that old dogs can’t learn new tricks…
Notice something strange between 8000BC and 5000BC? A problem was solved in line with the available resources. Which means promises DO matter. Quite A LOT, it would seem, as the apple stricken guy post post migh suggest. When they are seen for what they are, well… backtrack a bit to see what happens. Or look at the media headlines one of these days.
I do believe “Allison” types got Trump to where he is. Dismissed…now can you see how a person in her position would look at RE as a last hope? Ironically most of Trumps book are about financial literacy. Actually Garth, these people are the ones that need the most help, but are dismissed..giggle all you want…they are living lives of quiet desperation. In your defense you do provide incredible info to us that are reasonable financially literate. If I were in her shoes I would shoot it all in a TFSA…get your divis to pays some bills…
On that point rate are still insanely emergency low.YAWN YAWN…AND YAWN…
The US a Corporatocracy…enough said..Trump Bump!
Wealth may take decades…but If your cashflow is greater than your outlay….you can buy your freedom month by month Allison..
My very last post on GF if I can murder Jack Daniels
https://www.youtube.com/shared?ci=lQe-0pS8SjU
#58 opposes:
Hardly state secrets. On 9/11 many fighter jets scrambled before they could be armed. The pilots knew they might receive orders to crash into a commercial passenger aircraft.
Now, trading a big loss of life to save the CN Tower? That is an embarrassing revelation.
The MR couple did it – but they started it with $500K, not 10K. Small difference. — Garth
And that they started their portfolios in 2009 nearly at the bottom of the gfc so they got to a million within 3 years not typical of a balanced portfolio. The MR couple preaching about anyone being able to do it is like a lottery winner saying it’s easy to win the Lottery and they moved to a third world country to retire because a million is not even close to retire in Canada. For the rest of us it’s a grind. Increasing net worth year over year over long term. $5 million by 50 is enough to have wonderful retirement.
#67 Braj on 03.01.17 at 10:40 pm
You can alternatively substitute your bond holding for shorter term or investment grade corporate bonds
/////////////////////////////////////////////////
In my option both are right, potato is right in the long term (5+ years), garth in the short term (<3 years). Long Can bonds like VAB as potato have nowhere to go but down which is clear.
However if you where in since mid 2000s, this is not a big issue as long bonds have been up and down levelling around even in value (positive if of course including interest).
This silly Trump rally will go down and you'll be thankful for bonds in rebalancing and peace of mind.
Personally I own VSC and VSB for Can bonds.
Alison, if you want financial freedom in a decade, you need to save $100,000 a year. If you can only save $50,000 it will take 20 years, $2000 a month will take 40 years.
Once you have a serious figure saved up, say $250,000, go back to Garth and ask him to invest it for you (while you continue to save).
Good luck!
Pension solution
first 3300$ of an 18 year olds earning confiscated(taxed) and is invested for 50yrs…no more contributions necessary….
For those looking to save tens, hundreds or millions of dollars in extra taxes read this:
http://www.theglobeandmail.com/report-on-business/small-business/any-hike-in-capital-gains-tax-could-spur-sales/article34179484/
My guess is valuation day will be the day of the budget. My guess is two-thirds this year then three-quarters as of January 01, 2018.
If you have illiquid assets like Alberta real estate try to sell to a family member as selling property before the budget and closing will be next to impossible.
Investors looking to unload assets such as stocks, bonds or investment properties are considering selling – soon – based not just on the recent run-up in value, but also the threat of a potential increase in taxes paid on the capital gains in the upcoming federal budget.
Today, capital gains on investments outside of a registered account are taxed at 50 per cent. There is speculation across the financial services industry that the Liberal government might increase the amount taxed to two-thirds or even 75 per cent, where it has been in the past, to try to raise billions in new revenue. The Liberal government has been reviewing tax credits in recent months, with a focus on Canada’s highest income-earners.
If a change is made in the upcoming budget, it’s unclear if it would be effective immediately, be retroactive or start at a future date. That has some investors and small-business owners reviewing their portfolios with money managers, financial advisers and tax experts to see if it makes sense to sell some assets now, before the budget is tabled in the coming weeks.
“We aren’t running around triggering everyone’s capital gains in anticipation of this, but at the same time, we have to be mindful that there could be this change in the budget,” says Ross McShane, vice-president of financial planning at Doherty & Associates, an investment management firm in Ottawa.
“In certain situations … given that markets have been on a pretty good roll and there are accrued gains – and in some cases a need to rebalance portfolios – we’re considering potential changes to the inclusion rate when we are rebalancing, whereas in the past we may not have.”
The so-called capital-gains inclusion rate fell to 50 per cent in 2000, which is the same rate as where it started when it was first put into effect in 1972. The rate rose to 66.67 per cent in 1988 and was at 75 per cent during the 1990s.
For example, today, if an investor in the top tax bracket in Ontario sold $100,000 worth of shares and it triggered a $50,000 capital gain, they would pay about an extra $6,700 in tax if the capital-gains inclusion rate were to rise to 75 per cent from 50 per cent, or about $20,000 in taxes, up from $13,300.
Mr. McShane says selling some investments now is a consideration largely for investors who need the funds in the near term.
For instance, he’s working on a financial plan for a couple with assets in various registered and non-registered accounts, and is considering selling some of the non-registered assets now to rebalance the portfolio, given the recent uptick in markets and the possibility that there could be an increase in capital-gains taxes.
“We may well want to trigger those gains sooner rather than later knowing we are going to use that money over the next couple of years anyway,” he says. The thinking is, “Let’s take the gains now just in case the tax is higher later.”
Selling an investment now might not be a bad move for some investors, even if the government does nothing, given that stock markets in North America are trading near record highs and house prices in most cities across Canada have appreciated significantly over the years, especially in the Greater Toronto Area and Metro Vancouver. Some investors, especially the wealthier baby boomers, are looking for opportunities to divest assets to raise money for retirement, as well as transfer money to the next generation.
Dino Infanti, a tax partner and national leader of the enterprise tax practice at KPMG LLP, says investors thinking of selling investment assets need to consider the amount of the gain and other costs of selling beyond taxes, to ensure it makes sense.
That includes legal fees and real estate commissions when unloading an investment property, as well as tripping taxes such as GST or HST, depending on what province you’re in. With securities, there may be selling commissions.
“No doubt there’s the potential for the tax save [if the capital-gains inclusion were to go up], but you want to be careful about any other types of costs that can start to chew away at that … potential save,” Mr. Infanti says.
“I think the discussions need to be had, but all aspects need to be considered,” says Mr. Infanti, adding that investors “never want to do transactions solely for tax purposes.”
#40 JSS on 03.01.17 at 7:46 pm
What does Allison look like? Is she hot?
I’m a male in my forties, possibly going through a midlife crisis.
Lie to me if you have
***
Ha! Thanks for the chuckle…
#72
You are missing the point here: if its hijacked in 911 fashion the passengers and crew are dead anyway.
do what damage control you can, shoot it down before it can cause additional loss of life and property
Hey, this chick was paying rent with credit cards at 30, but now at 42 has 600 hundred grand in potato-ish index ETFs. It’s *very* doable; the only cat food has gone to the furbabies that love it.
For SM & Goodbye Blue Sky.
You are a farm kid in Cambodia. Anywhere near Viet Nam was the Ho Chi Min trail.. You see white steaks far up in the air. American bombers flying at 22000 feet. You hear metal banging like freight trains coupling overhead. Metal canisters released 18 miles before the target banging into each other. You examine impact area & see torn up earth & bodies. Also dead people without a mark on them. Concussion reaches out hundreds of yards.. You survive years of daily no American bombing in Cambodia.
You come down south on a soviet armoured personal carrier. The capital is bursting with urban, educated, wealthy liberal elites. A giant herring school compacting to escape the dangerous periphery. Its killing time!
#46 Nonplused on 03.01.17 at 8:19 pm
“So my real advice to Allison is to get money quickly you have to somehow be in the right place at the right time where you can take advantage of a trend not many other people see. Garth’s method works too, and that’s what I am doing now because I don’t have an opportunity currently that I can see. I’m still looking though. But I’ll take 6% until I find it.”
—————-
You are definitely on to something. That is exactly what I am currently attempting based on my analysis on how it can be done. I have yet to find my lucky break though….patience is a virtue.
32 yrs old…..I estimate that I will hit 300k portfolio sometime this summer if everything goes well. 200k to 300k is (was) effing hard. I want more though…it is going too slow and I’m too hungry.
700K more to go…..can’t wait.
Don’t post much anymore…can’t add more to the conversation but I’ve been lurking.
Just a whisper. I hear it in my ghost.
See you at the finish line dawns.
Best,
HD
Poloz listened to my advice!
Time for him to cut interest rates to o.00% to prevent money laundering by sexist rich men who invest in Global Equities.
We need a 60 cent Loonie, and there is nothing you can do about it.
We need a 60 cent Loonie to boost clients in the escort industry in Toronto. American men will be flocking to Toronto to be entertained by a real woman.
We will get a 60 cent Loonie. I know Poloz personally. He wants a 50 cent loonie to increase exports from Canada.
Poloz also told someone that when the Euro goes to parity or to the 90-95 cent range to the US dollar, he will have to lower the value of the Loonie to boost exports. This will lead to a 40 cent Loonie.
When Brexit lowers the Sterling Pound to 1.10 and even to par with the US dollar, Poloz will have to cut the value of the Canadian dollar to 30 cents.
If both the Euro and Sterling pound end up lower than the US Dollar Poloz will have to cut the value of the Loonie to 15 or 10, or even 5 cents.
We need to be competitive in the global economy. Our Loonie is way overvalued. Even a 62 cent Loonie in 2002 was overvalued.
dawgs*
What beats the $C blues, the Poloz Swoon, the Trudeau Hustle and Trump Team is a good portfolio of swaggering Growth. My little Tims went from $14 to $ 92 in the Burger King takeout. On this blog I touted CAE at $ 18 a week ago and it’s up 10% this week. I opened your eyes to bank earnings bonanzas two weeks ahead of time and personally backed up the truck on TD and BMO…and watched TD, BNS, RY and BMO shoot the lights out.
Recently Buffet said ” Buying bonds is a stupid thing to do” . …. couldn’t agree more. Yes, thanks for the heads up on CPD….but cmon ….waiting 15 years for a TFSA to turn into 6 figures? I’ll do multiples of that with a few simple stocks….wink wink….QSR…..PCLN…. ? It ain’t that hard to get rich….stay sober…..youll see.
U.S. Journalist Investigating “Migrant Crime” In [redacted] Has To Leave Under “Police Escort” For His Own Safety
http://www.zerohedge.com/news/2017-03-01/us-journalist-investigating-migrant-crime-sweden-has-leave-under-police-escort-his-o
^ note *independent* US journalist, ie, not being reported on MSM
#fakenews
Stock markets are over valued and are beginning to resemble another “tech” bubble. A recent IPO in the tech sector gave a company, whose purpose is to allow “teenagers and people under 30 to apply bunny faces and vomiting rainbows onto selfies” even though this company has never made a profit and loses almost six hundred million US dollars per year, and has warned it may “never be profitable”.
Still, the IPO was over subscribed and everyone is rushing to grab a piece.
Over valued tech markets lead to market crashes. Which are a good thing, for people who understand how to value a company. Do you?
Oh, the valuation of the company I mentioned above?
$24 Billion US dollars.
Never made money. Unlikely it ever will. Loses more than half a billion every year.
But it can make bunny faces!
#86 Stock Picker on 03.02.17 at 2:40 am
What beats the $C blues, the Poloz Swoon, the Trudeau Hustle and Trump Team is a good portfolio of swaggering Growth. My little Tims went from $14 to $ 92 in the Burger King takeout. On this blog I touted CAE at $ 18 a week ago and it’s up 10% this week. I opened your eyes to bank earnings bonanzas two weeks ahead of time and personally backed up the truck on TD and BMO…and watched TD, BNS, RY and BMO shoot the lights out.
Recently Buffet said ” Buying bonds is a stupid thing to do” . …. couldn’t agree more. Yes, thanks for the heads up on CPD….but cmon ….waiting 15 years for a TFSA to turn into 6 figures? I’ll do multiples of that with a few simple stocks….wink wink….QSR…..PCLN…. ? It ain’t that hard to get rich….stay sober…..youll see.
Hey bro.
Im kinda new to stocks after losing a whole bunch of money a while back.
It destroyed me mentally but i guess id’ better try to get back because i got nothing else going on.
What would you recommend to me to start with.
I only got 10 geez or so.
Thanks stock picker man.
#87 Police there denies they escorted that journalist. In fact he followed them. The good folks wearing a hood were gathered for a ‘night of poetry’. I’m not making this up! The poet in question must have been Easy-E.
#7 Jason
Good stuff! Nice to see someone put some effort into actual number crunching. (Along with the blog writers of course)
Everyone (sort of) knows that the current scenario is unsustainable, but it’s always nice to see some actual numbers to put it in perspective.
“Investing and wealth accumulation takes decades, not years.”
Barring a lotto win, huge inheritance, a boffo business, marrying into money or an extremely lucky shot in the markets, there is no easy, romantic way to accumulate enough wealth to arrive at owning your life’s time.
The power of time and commitment and/or building a successful business are far more likely to produce the desired result.
I “retired” in my 40s, then built a small business with my spouse, doing what we enjoy. We couldn’t be happier. There’s no feeling quite like having succeeded in building a solid foundation for the rest of your life so that you can do whatever your heart desires, however, you really, TRULY have to want it, have a vision, and work (hard) towards it.
For all of the inescapable sweating and toiling you’ll have to do at work over the years, you may as well save some of that sweat equity and grow it whilst hoping for that grand score.
When most fools have debt , being in the black is a great place to be- and actually becoming wealthy feels like sitting on a mountain top with options spanning as far as the eye can see. Euphoric.
However. It takes guts, stamina and will to wind your current life’s energy into getting there.
@#40 JSS
“I’m a male in my forties, possibly going through a midlife crisis.
Lie to me if you have to.”
********************************************
Ok.
You’re a real catch…….
#62 Ret on 03.01.17 at 10:10 pm
” One of the safety measures allowed fighter jets to shoot down a hijacked commercial airliner to protect the CN Tower, one of Canada’s largest buildings.”
Shoot down 200+ Canadians on a commercial aircraft to save the CN Tower. You are joking, right? The CN Tower is not exactly the World Trade Center or the Pentagon.
…………………………….
Hey Ret, you’re not thinking right.
Shoot them down and they’re dead.
Let them fly into the CN Tower and they’re still dead.
@#62 ret
“Shoot down 200+ Canadians on a commercial aircraft to save the CN Tower.”
********************************************
Admittedly the CN Tower is looked upon by the rest of Canada as a “finger” directed at them…..
The ram-ifications(pun intended) of an airplane strike would be several other buildings in the immediate vicinity being damaged or destroyed with even larger loss of life. A la 9 11
Is it justified to kill 200 innocents to save 2000?
The eternal question that most politicians are glad they will never have to make…..
@#73 Im Stupid
” a million is not even close to retire in Canada. For the rest of us it’s a grind. Increasing net worth year over year over long term. $5 million by 50 is enough to have wonderful retirement.”
********************************************
It’s refreshing to meet someone who’s name is brutally honest…….like mine.
Allison,
Are you with a significant other, and are both of you gainfully employed?
If not, you may as well just forget about earning your financial freedom through savings and investments. You need to start very early to get anywhere as a single earner, and you’d still need a decent 6 figure income. Even if this is you, Trudeau has “rich” folks in his crosshairs, so keeping you earnings and gains will only get harder from here on in.
Best to be frank about your situation. I’d save and invest, plan to work till 75, and hope a rich hubby comes along someday.
I doubt Alison is living a life of quiet desperation especially when she stated she wanted to retire in her 40s, sounds like she lives on a unicorn farm.
Alison, live way way below your means, get another job if you need to. Get to the library and start reading books on SAVING first, then INVESTING.
Alison, I was a little like you, always living frugally I thought, but when husband was shown the exit at age 57 and we looked at the ?investments? made with [email protected], I choked when I divided that number by .04 OUCH!
Good news though, we really turned this boat around, and now looking at a healthy retirement. Please note, we NEEDED an investment advisor, and I did a lot of reading. Also google compound interest calculator, that will help you get back to reality and realize the value of time.
For Smoking Man and others who question the media.
https://www.youtube.com/watch?v=eHDDQVZ-A98&t=3s
Check out Stephen Harper at the 10min mark read off the same speech as Australian PM to urge war on Iraq. I guess one can still be a pawn at the highest level.
#56 #EasyD on 03.01.17 at 9:44 pm
A question for the blog dogs/Garth. US denominated assets – does that include Canadian ETFs like iShares XWD? That ETF is not currency hedged. If the dollar looses 1%, the ETF goes up 1%. Does this count as having “US denominated assets”? Do I need to actually have real USD in my investment portfolio?
======
If you have USD, then buy VV in US funds.
If you don’t have USD, but VFV in Canadian dollars and it will benefit should the USD continue to appreciate against the CAD.
#61 Smoking Man
The light that burns twice as bright burns half as long – and you have burned so very, very brightly…
Rates going up? Really? I still get email from Zoocassa for 2% mortgage money. It’s no problem to get 5-year closed from one of the mainstream lenders for under 3%.
Donny can do nothing as POTUS without borrowing every dollar. Look for US debt ceiling to go up to $30-billion very soon. Party on, the Ponzi continues!
Sorry, should read $30-trillion.
#44 Ronaldo on 03.01.17 at 8:09 pm
How do you ever expect a generation who want everything ‘right now’ to ever have the patience to accumulate what they need to retire. As one financial advisor told me many years ago when I first started to save. He said, “slow and steady wins the race”. He told me he had many senior accounts with people who had never had large earnings with very large portfolios. These people knew the time it took to save. Boring but effective. I’m not sure this generation is up to the task.
______________________________________
Millennials are a touchy bunch, don’t take advice or constructive criticism too well either. They already know the best way to go about things, so it’s best to just let Darwin do the teaching.
I will admit though, at this point the deck is really starting to get stacked against them, too bad they are voting for even more financial strife in their future.
My own Gen Z kids hear the virtues of moderate living and saving/investing on the regular. I also hint to them that things are tough out there, and may still be when the time comes for them to start looking for work. Both of them are smart as whips, and I think they’ll be ok, but it sure won’t be as easy for them as it was for Mom and Dad.
At least so far, the Gen Z’ers look to be doing a lot better now than the Millennials were doing at the same age.
BEST IDEA ever and it should be implemented in major cities world wide especially Toronto and Vancouver. Will never happen because politicians are in bed with the real estate boards and happy selling out our housing stock to foreign (usually Chinese) investors looking to park legit or illegal money (just look at Christy Clark). It’s been going on for 20 years and look where it’s got Canadians. A 2 Trillion debt load but who cares, as long as you can make the monthly:-)
https://betterdwelling.com/vacant-homes-global-epidemic-paris-fighting-60-tax/?utm_medium=pushnotification
Housing should not be used as a speculative asset- somewhere to simply park your money and restrict options for local people. Vacant homes should be taxed heavily.
Or be used as rental stock at a reasonable rate. Do that and lets see how many new condos, houses, apartment hit the market. I would love to know how many realtors are holding numerous properties just to flip or restrict supply in hot markets.
I know it’s not simply realtors, it’s free money from the banks (loaned by them with zero risks- thanks CMHC) loaned to anyone with a heart beat, foreign money, and average Canadians speculating but but I suspect a lot of realtors own more than a primary residence.
Odds of a Fed rate hike in March are now at 90%…a week ago it was 20%
Now there is something to see here.
RISK TOLERANCE
In investing, people forget that everyone has a different risk tolerance, comfort level and market understanding. Just because something is RIGHT for YOU, doesn’t mean it is RIGHT for another.
Can you handle a -15% drop in your capital?
Can you handle a -25% drop in your capital?
Can you handle a -55% drop in your capital?
A BALANCED fund (60% stock/40% bond) is that top one. Add in preferred shares and it is more risky, add more stock, more risky. Want to play with 1-10 stocks? Most risky.
Before you put down your money, do a RISK ASSESSMENT TEST.
And, NEVER, EVER, EVER invest in something you do not understand and did not do RESEARCH into.
I’ve be growing a Canadian Couch Potato portfolio for 4 or 5 years now and the 25% Canadian bonds portion have been very disappointing so far.
It’s the only portion in red at this point.
A) Need to understand why you hold bonds. Hint: It’s not for return. Double hint: After inflation short term bonds (the only kind you should be holding) will likely return negative over the next 10 years. The best indicator of future returns from bonds is the present yield.
B) Couch potato holds bond funds/ETFs that have relatively high duration. Which is stupid.
The markets haven’t gone barking mad on the downside for going on 8 years, so people are starting to forget why they hold bonds.
Canada’s economy blows away forecasts with 2.6% GDP growth
http://business.financialpost.com/news/economy/canadas-economy-blows-away-forecasts-with-2-6-gdp-growth
If you have not been contributing to a T.F.S. Can you top it up any time?
Yes. — Garth
One more sleep before revilation.
Smoking Man, the great troll of gf coments section is finally coming out from hiding behind veil of “anonymity”.
Few things that I have observed and learnd about “him” over last five and a half years that I’ve been reading this blog and, SM comments.
The body of comments of smoking, easy accessible yet acutely personal, is a corse blend of spirits, nicotine, emotional rage and unbelievable forward sight all tightly wrapt in almost devine awareness of heard dynamics, market timing and occasional hint how to make $#!7 loads of many on fore ex, by being leraged up to an eye balls by whoping 400-1.
In his comments, he writes about his personal gambling and drinking endeavors , offspring hickups, and most importantly eccentricisam that accompanied him to the unexplored depths of 38oz JD bottle while hiding in and typing from his gazibo. Gassed up coments are best, very crude and borderline insulting, themed with imagery from his gambeling adventures in Las Vegas or Seneca, broken down Ford pickup truck, or not from this world orange plasma flyer, will be forever imprinted in memory of readers.
Post often heavily criticize heard way of living, condem culture of compliance in the region of southern Ontario, Canada and world wide in general, where over the last little while looser is winner, and opposite. Critizazing whole world where subdued individualism is becoming norm, and often he describes melancholy of watching his fellow man suffer under tirany of teachers and liberal and tyrannical governments, from point of south slavic national.
By being born to the right parents, at right place and at right time at the crossroads of two centuries, self taught codesmith who probably learned machine language on his abacus, mastering Basic, Fortran, COBOL buy his teens, transition to c, c++, vb, and later to Java and ultimately to Python to mine the $#!7 out of Twitters twits, to accurately predict future events and directional movement of heard of overschooled underachievers.
As an alien who embraced the human form and the sentiment of the traditional human with flaws: drinking, smoking and sinful lifestyle, he is probably very first alien who successfully pioneer in bridging human and alien race with their offspring.
Someone once on this blog sad that his writing style was influenced mostly by the Gonzo guy Hunter, but I tend to disagree with that, in my opinion his biggest inspiration and influence came from that Hemingway guy who wrote old man and the see.
SM as a made up person is full of emotion, pain of love and defiance of social and national disempowered people whom he himself never belonged, but devoted lots of his free time to reise humanity to more human level, to bring back old dog eat dog paradigm of living.
Topics ranged from market commentary, to world wide social injustice and nostalgic good old days when you could smoke and drink at work, to be honest many of us are missing those days too…
Truth to be told, me being illiterate, my favorite SM posts are his exchanges with grammar nazis. So the question on my mind, or what ever was left if, will “real” smoking man worthy to hold the candle to real smoking man?
“The MR couple did it – but they started it with $500K, not 10K. Small difference. — Garth”
If they stopped working at 30, Im assuming they worked for about 10 years total (and accumulated/saved the 500K with which they gave to you in the 5 years prior), unless they earned engineering degrees before 20.
My assumption is true, she started saving in 2006: http://www.millennial-revolution.com/invest/the-breakdown-part-1-god-we-were-spendy-back-then/
But its true, no one can have financial freedom in 10 years, or in their 40’s (much less attempt to do it in their 30s).
A couple of teachers, early thirties , 8 years:
http://www.adventuringalong.com/our-story/,
http://www.madfientist.com/adventuring-along-interview/
http://www.businessinsider.com/teachers-early-retirement-traveling-the-world-2017-1
Canadian couple, early thirties:
http://globalnews.ca/news/2394255/two-canadian-millionaires-share-how-they-retired-in-their-early-30s/
Early mid/thirties:
http://rootofgood.com/about/
Late thirties:
https://livingafi.com/personal-info/
Late thirties:
http://www.gocurrycracker.com/about/
Vancouver couple on route to having financial freedom at 35:
http://www.fi35.com/about-freedom-35/
Single high income lawyer, 33 (5 years work) with huge school debt to match.
http://thepowerofthrift.com/well-hello-there-2/
https://www.forbes.com/sites/laurabegleybloom/2016/06/29/want-to-retire-in-your-30s-and-travel-the-world-this-woman-did-it/#5c14a94e722f
Probably the most well known:
http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/
Please note that you’ll have to live off crushed leaves collected from the gutter however as noted by the people above. Also don’t forage for berries as Garth has suggested in the past, they’re too expensive , you’re better of selling them for profit.
Cue excuses…how everyone’s particular situation is not identical to any one above and thus it all can be completely, confidently and safely ignored. I’ll grab the popcorn.
Handy calculator for determining when you can retire:
http://networthify.com/calculator/earlyretirement?income=50000&initialBalance=0&expenses=20000&annualPct=5&withdrawalRate=4
Great writing on this one! With the market continuing to go nutso, way past any pewny market controls (after all, what is an extra 20k when your friends are making 200k over a few years of sitting on a rathole in Van or TO) something has got to prick the bubble right? Calgary still has buy and sell going on, prices aren’t that much lower despite massive rental inventory, and plunging rents. How long can you live on a Heloc? 50$ oil isn’t enough to get new projects rolling, not by a long shot with superb consumer cost electric cars already here, Frak happy Trump, Russian deals for higher volume to compensate for lower prices. City of Calgary has a full hiring freeze on now, and they’re usually way behind the times. Most friends I know with jobs still are being squeezed to do more work for less, or still under threat of layoff.
Its been crazy bananas hard to predict this one, I’m at a loss, keep up the good work, put out the data, flog some investments, and we hope for the best, predictions on this….pretty tough!!
http://www.theglobeandmail.com/real-estate/vancouver/vancouver-home-sales-start-2017-below-average/article34183531/
It says residential sales in Metro Vancouver totalled 1,523 last month, a 39.5-per-cent plunge from January 2016 and an 11-per cent decrease since December when 1,714 homes were sold.
There is a slanty semi
http://www.cbc.ca/news/canada/toronto/house-blown-over-1.4006173
#112 NoName on 03.02.17 at 11:40 am
One more sleep before revilation.
Smoking Man, the great troll of gf coments section is finally coming out from hiding behind veil of “anonymity”.
Few things that I have observed and learnd about “him” over last five and a half years that I’ve been reading this blog and, SM comments.
—
It takes two seconds to look up his real name.. but yeah SM is mostly a fictional troll
He used to be in charge on engineering at dehaviland – look him up on linkedin….lol
#112 NoName on 03.02.17 at 11:40 am
One more sleep before revilation.
Smoking Man, the great troll of gf coments section is finally coming out from hiding behind veil of “anonymity”.
Few things that I have observed and learnd about “him” over last five and a half years that I’ve been reading this blog and, SM comments.
The body of comments of smoking, easy accessible yet acutely personal, is a corse blend of spirits, nicotine, emotional rage and unbelievable forward sight all tightly wrapt in almost devine awareness of heard dynamics, market timing and occasional hint how to make $#!7 loads of many on fore ex, by being leraged up to an eye balls by whoping 400-1.
In his comments, he writes about his personal gambling and drinking endeavors , offspring hickups, and most importantly eccentricisam that accompanied him to the unexplored depths of 38oz JD bottle while hiding in and typing from his gazibo. Gassed up coments are best, very crude and borderline insulting, themed with imagery from his gambeling adventures in Las Vegas or Seneca, broken down Ford pickup truck, or not from this world orange plasma flyer, will be forever imprinted in memory of readers.
Post often heavily criticize heard way of living, condem culture of compliance in the region of southern Ontario, Canada and world wide in general, where over the last little while looser is winner, and opposite. Critizazing whole world where subdued individualism is becoming norm, and often he describes melancholy of watching his fellow man suffer under tirany of teachers and liberal and tyrannical governments, from point of south slavic national.
By being born to the right parents, at right place and at right time at the crossroads of two centuries, self taught codesmith who probably learned machine language on his abacus, mastering Basic, Fortran, COBOL buy his teens, transition to c, c++, vb, and later to Java and ultimately to Python to mine the $#!7 out of Twitters twits, to accurately predict future events and directional movement of heard of overschooled underachievers.
As an alien who embraced the human form and the sentiment of the traditional human with flaws: drinking, smoking and sinful lifestyle, he is probably very first alien who successfully pioneer in bridging human and alien race with their offspring.
Someone once on this blog sad that his writing style was influenced mostly by the Gonzo guy Hunter, but I tend to disagree with that, in my opinion his biggest inspiration and influence came from that Hemingway guy who wrote old man and the see.
SM as a made up person is full of emotion, pain of love and defiance of social and national disempowered people whom he himself never belonged, but devoted lots of his free time to reise humanity to more human level, to bring back old dog eat dog paradigm of living.
Topics ranged from market commentary, to world wide social injustice and nostalgic good old days when you could smoke and drink at work, to be honest many of us are missing those days too…
Truth to be told, me being illiterate, my favorite SM posts are his exchanges with grammar nazis. So the question on my mind, or what ever was left if, will “real” smoking man worthy to hold the candle to real smoking man?
____________________________________________
I am so apologetic for communicating in a language that was an effective and precise. It does however make my communiqués with other inhabitants of this third rock from the sun much more stress-free. As a rehabilitated Grammar Nazis I would like to apologize.
BTW Thanks so much to the sons of Smoking Man for writing this dissertation on his legacy.
https://www.youtube.com/watch?v=K7D8A7e4TEY&list=RDK7D8A7e4TEY#t=1
Learn more, kid. — Garth
That’s the goal, is it not? Some constructive criticism could be helpful though. I admit to not knowing what I’m doing which is exactly why I resort to potato-like strategy. What’s the harm in that?
#108 The Technical Analyst, CSTA, CPD
RISK TOLERANCE
There is no shortage of risk tolerance evaluation IMO, it’s the first think they do at the banks when you go to take your first RRSP, it gives those clerks something to talk about I suppose before that start selling you the bank’s mutual funds…
What is missing I believe is risk understanding. Despite Garth often rambling about it the risk of seeing a drop in your next monthly statement (volatility) is not a true risk if you don’t need the money right away, specially not if you own quality assets with a good intrinsic value. Far more important is the risk of A) losing money and B) not having enough money when you actually need it.
So before you try to determine how tolerant you are to risk you should try to understand what the risk consist of. In this day and age people are very risk adverse, they prefer to keep cash or collect interests lower than inflation, worse they contract huge loans to put everything on the one thing they believe is solid, housing. They hate risk yet they A) lose money and B) are very likely to run out of money . Strange world indeed.
As far as I’m concerned, when it comes to money, I figured quite a while ago that the safest to be is as close as possible to the best wealth creators you can find.
just heard a radio ad from rbc about employee rate gic.
employee price trucks ads are already gimmicky. employee rate gics are just pathetic.
re slanted semis blowing in leslieville
the real shame is the Ontario building code
even plywood would hold that structure better in wind
but particle (wafer) board is minimum code
I’ve seen particle board used for rood decking, yes is sags very soon etc
The code it’s industry driven ( tamper resistant receptacles, and dens glass gold (exterior drywall) which is supposed to be covered with stucco, but I’ve seen were its just painted with finish coat- no stucco, yep it’ll be colder inside
another scandal is charging HST on that structure which will be hundreds of thousands, the governments can make more that the builder,
i was in one new townhouse development, and noticed it had an indoor sprinkler system, unheard of in SFD, you guessed it – no fire wall. Insulation and sprinklers are cheaper than 2.5 stories of concrete block for each unit
#110 Victor V on 03.02.17 at 11:24 am
Canada’s economy blows away forecasts with 2.6% GDP growth
http://business.financialpost.com/news/economy/canadas-economy-blows-away-forecasts-with-2-6-gdp-growth
******************************************
If you believe Canada has 2.6% GDP right now I have a bridge in the middle of the Bootes Constellation to sell you.
SNAP being bought at $24/share. Revenue of $400M, net profit -$500M. Bubbly. Feels very similar to Y2K.
#60 crossbordershopper on 03.01.17 at 10:00 pm
your advice is for her to go without the little things in life, to save and when she is in her mid 40’s she will have a hundred grand. Why? Why would anyone do that? Do you know i see a millionaire and a popper having coffee at tim’s every morning, no difference, one worked his but off, the other did nothing, both there having a coffee. working and saving is for suckers, just vote left, and wait for your government cheque. or sweat and toil for a little bit, but it wont change your life. so why sacrafice the little things that make you happy every day, a lunch, odd dinner out, a movie, that dress you like, sacrafice for what, no one cares about you, and we all die alone, one box a person, no exceptions. so why? millionaires and billionaires watching stocks and bonds go up and down, 99% of people are irrelevent in the game, tomorrow morning like every morning you will be stick in traffic at 8am on the 401 like every other day, regadless of the Dow or interest rates or anything.
——————
Solomon said about three thousand years ago that there is nothing new under the sun! He also said exactly what you stated that there is no difference between the popper and millionaire, or a fool and a wise man. They both end up in the grave. Because of this, Solomon started to hate life—it seemed pointless. (Eccle. 1:9; 2:14-17)
I believe that you see no difference between the millionaire and popper at Tim’s because they both have no purpose to their lives. I like what writer Leo Rosten said back in the 1960s:
“I cannot believe that the purpose of life is to be happy. I think the purpose of life is to be useful, to be responsible, to be compassionate. It is, above all to matter, to count, to stand for something, to have made some difference that you lived at all.”
The millionaire has more potential and opportunity to made a difference in the world than the popper. If he doesn’t seize the opportunity, then as you said, he goes to his grave no different than the poor guy.
FIRST A BMO Warning
THEN A Scotia Warning
THEN the star lets CBRE try to convince us that there’s no problem here #movealong
Jason #7 –
Conclusion: In terms of income level, there are about 268,000 people in Canada who can afford to buy the average 1.35 million house in Toronto. That drops to 107,000 people in Ontario who can afford to buy that same house (assuming they have 250k deposit).
Number of detached homes in Toronto: as of 2011: drumroll please… 820,895
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil124c-eng.htm
Enter the bank of mom, third party loans for down payments etc… what if personal debt were at record levels and interest rates rise (that could never happen right?) ?
————————————————–
You are ignoring existing homeowners who bought cheap in your analysis. I don’t think all buyers have to come from the 1% you point to.
My neighbour is not in the 1%, but she bought when it was cheap and house is now worth millions. Could she sell and buy a couple of million dollar houses, you bet.
In Vancouver, lots of folks with mortgage free houses.
Inbound Rate Hike!
Look at the yield spiking on the 3 month US T-bill:
https://i.imgur.com/aChdmKu.jpg
^ Remember, the Fed has followed the 3 month T-bill TO A TEE since 2000:
https://i.imgur.com/JNiQvOc.gif
https://i.imgur.com/rQvlivn.gif
“Learn more, kid. — Garth”
That was petty.
For small portfolios or people that are learning about investing, CCP is MUCH better than [email protected]
Last year the Vanguard returns were 6.7% on a 60/40 split.
What was the Garth portfolio return? I assume it was better.
But for the added complexity and trading costs when re-balancing — is it really better for everyone?
The potato strategy has some fundamental flaws. Stop defending it. — Garth
Wow, we just might get 3 rate hikes this year after all…
Idiots piling into GTA RE right now are so screwed.
The potato strategy has some fundamental flaws. Stop defending it. — Garth
OK. What are they? Anywhere to read up on this? Refer to maybe a few of your blog posts?
#113 El on 03.02.17 at 11:43 am
___________________________________________
Along with easting leaves and grass clippings, another vital necessity to retire in your thirties is two great incomes, and in a lot of cases no kids, and no house.
The vast majority of folks do not have the two great incomes, so they’re euchred right there. Done, not a chance.
Following the MR’s and Mr MM’s of the world is a waste of time if the idea is to retire at 40 and you work at Timmies.
Hi Garth,
When you say hold “a fifth of your portfolio in US$-denominated assets” do you mean US Equities and it doesn’t matter which dollar, or US Equities in USD?
I follow the CCP portfolio, currently have 33% in US Equities BUT it is in a CAD wrapper through Vanguard. Does that count or should I be trying to hold my US Equities in USD?
The Real Estate Board of Greater Vancouver is blaming bad weather and reluctant sellers for another double-digit decline in home sales.
http://www.bnn.ca/vancouver-home-sales-plunge-41-9-as-sellers-balk-at-listing-1.685869
#126 soost on 03.02.17 at 1:56 pm
FIRST A BMO Warning
THEN A Scotia Warning
THEN the star lets CBRE try to convince us that there’s no problem here #movealong
=====
You forgot RBC.
http://business.financialpost.com/news/fp-street/rbc-boost-dividend-after-24-profit-growth-to-3-billion-beats-expectations
http://www.vancouversun.com/news/world/wife+killed+husband+after+fight+over+burned+casserole+texted+photo/13028879/story.html
hey, look, it’s FF’s ex girlfriend!
The potato strategy has some fundamental flaws. Stop defending it. — Garth
OK. What are they? Anywhere to read up on this? Refer to maybe a few of your blog posts?
I think a post on these fundamental flaws would be very illuminating. Maybe by one of your associates?
#125 cramar on 03.02.17 at 1:53 pm
“I think the purpose of life is to be useful, to be responsible, to be compassionate. It is, above all to matter, to count, to stand for something, to have made some difference that you lived at all.
The millionaire has more potential and opportunity to made a difference in the world than the popper. If he doesn’t seize the opportunity, then as you said, he goes to his grave no different than the poor guy.”
Here, here. Very well said, sir.
#132
Basically why most millenials give up and buy a house. When your household income is 60k, and student debt 80k freedom 30 or 40 is impossible.
“Following the MR’s and Mr MM’s of the world is a waste of time if the idea is to retire at 40 and you work at Timmies.”
Financial freedom very doable for a couple with average salaries and offspring. Just take these peoples average spend (many of them have offspring) and subtract from the average/median household salary and
then use this to get the number of years:
http://networthify.com/calculator/earlyretirement?income=50000&initialBalance=0&expenses=20000&annualPct=5&withdrawalRate=4
Thankfully most of the Canadian population does not work at minimum wage (“timmies”) for their entire lives.
Simply because there are some people whom this goal (“financial freedom” in 30’s , 40’s) may not be achievable does not mean it now can be completely ignored by everyone of average or above income, which according to the blog polls, is almost everyone reading this.
#123 Cheap Houses on 03.02.17 at 1:27 pm
#110 Victor V on 03.02.17 at 11:24 am
Canada’s economy blows away forecasts with 2.6% GDP growth
http://business.financialpost.com/news/economy/canadas-economy-blows-away-forecasts-with-2-6-gdp-growth
******************************************
If you believe Canada has 2.6% GDP right now I have a bridge in the middle of the Bootes Constellation to sell you.
—————————
The count increase in credit fueled spending as ‘growth’.
Not counting that it has to be repaid.
As i have sadi countles times – stay away from the Cad pesso.
any investing strategy should be customisez to your individual needs.
For example, I have determined that I need to have 400K in cash or cash equivalents available at all times. As an emergency fund for my family and another 200K to invest right away if needed. That’s a quarter of my liquid money.
I do not see why anyone would buy some VAB today as dictated by the CCP model.
SHort term gov and corp bonds, maybe.
preferred shares, maybe.
but basically, you aint going to get rich with that portion of your portfolio.
The 60/40 split is too generic and can’t apply to anyone.
If you have a million bucks portfolio, are you really going to park 400K in VAB while you know you re going to lose money in the next decade ?
What’s so bad about the 60/40 Couch Potato portfolio? I’ve been reading your blog for years and I don’t recall you ever mentioning the “potato guy”.
#143 emanon
What’s so bad about the 60/40 Couch Potato portfolio?
Hi , I`d say there is nothing really bad there for a beginner investor,
but with buying broad indexes you are buying all the deadbeat companies
available that haven`t ever paid their share holders a nickle and in many circumstances are downright abusive. Like Air Canada bankrupt upteen times and still has the same CEO, Bombardier an investor money pit par excel lance and plenty more that you will own with the S&PTSX Index.
Successful investing requires more work than snoozing on the couch .
#123 Cheap Houses
Believe any GDP is going upwards in today’s times is just a great big “WARNING” as to what is going to happen. It’s sad actually!
I am not the brightest guy out there but seriously?? The average person out there knows exactly on how much everything has increased as well as how many have lost their jobs..
What we have to accept and adjust to; is the technological advances out there, this recent post about the person who would like to retire at her forties, well, HA, all the best to you; especially in the future.
Holy Sh8t!!! Where has the common sense gone to????
Garth, man, we are are lucky to have someone like you to keep pushing forward the message, not always right, nor are we; but the balance sure is better then what is out there. I appreciate it, thanks!
@ #142 alex on 03.02.17 at 4:42 pm
You have $200k in liquid capital reserved for future investments? You need to talk to a professional if you have less than a $20M net-worth and have that much money on the sidelines.
Yeap 200K ready to take a new position or to add to an existing one. Every year, I add also around 200K of new money to my portfolio. So in any year, I could double that amount. Cash is king in case of market downturns.
#146. There’s alot of bullcrap in the world, even more on financial blogs.
Allie baby has the possibility to find herself a decent loaded guy in his mid to late 40s. Of course for this , she needs to do the housewife gig which in her generation is a disaster zone. Financial independence comes with a price :)
They could hardly believe it, after a year and a half of failure their offer had been accepted. Sure it was $400k over asking, but whoes wasn’t?
They suddenly had a $2.5 million mortgage. “How,” they asked, “can we afford not to do this?”
Garth,
We recently sold our home and will not be purchasing a new home for at least one year. We’re shopping one year GIC’s ($1M). We can get 1.5% from CIBC with $100k limit on CDIC insurance, or 1.4% from Van. City credit union that is backed by province of BC for the full $1M.
Thoughts on what would be the better choice?
#144 Doghouse Dweller on 03.02.17 at 5:56 pm
#143 emanon
What’s so bad about the 60/40 Couch Potato portfolio?
Hi , I`d say there is nothing really bad there for a beginner investor,
but with buying broad indexes you are buying all the deadbeat companies
available that haven`t ever paid their share holders a nickle and in many circumstances are downright abusive. Like Air Canada bankrupt upteen times and still has the same CEO, Bombardier an investor money pit par excel lance and plenty more that you will own with the S&PTSX Index.
Successful investing requires more work than snoozing on the couch .
—
But you’re also buying all the winners. I think successful investing for average people with average knowledge requires exactly that. ‘snoozing on the couch’. buy and holding indexes is better than picking and choosing for 99% of people. It’s definitely better than mutual funds at the bank. Jack Bogle and Warren Buffet are both huge proponents of this strategy, and for good reason too. Low involvement, low cost and hopefully low stress. It’s not the investments that’ll mess the return up..it’s you!
I keep telling myself half a million, a million, a million and a half. These are the type of numbers you aim for when retiring at 65. Who in their right mind pays half a million for a semi-detached and a million for an average detached house in the suburbs. A million use to buy a mansion with a pool in the back and 1-2 acres of land. Last time I checked, my fellow Canadians didn’t double their average income. Who is seriously paying a million to live in the suburbs? Go buy a lakefront property up north or move out east with that kind of money.