Let’s go

For the past nine years this blog has been rolling history. Every day it sticks its pink little proboscis into the breeze and sniffs for change. So far there has been 2,695 posts containing more than two million words. That’s 33 books.

In response, the people who come here have posted 490,000 comments. That works out to less than 1% of each day’s visitors. The other 99.2% know better. The average time people spend reading this is three minutes and forty seconds which, as pointed out in the past, is exactly 120 seconds less than the average love-making session. But the latter doesn’t require having an Internet provider, or hand-held device. I hope.

Google Analytics, if it can be believed, shows 7.4 million sessions occur here per year. And, I’m happy to say, my file of DELETED comments has shrunk drastically in the last 18 months, since a bunch of dipsticks and ne’er-do-wells were punted from this site.

Anyway, this context is just to remind you we’re all on a voyage together into the unknown, and those two thousand-plus posts amount to an attempt to look a little further down the road, in real time. So don’t bother coming here a year (or five) later to say the observations were wrong. If you don’t like what this pathetic blog has to say, leave. Anybody can look backwards and be a genius. I think they’re called Conservatives.

Well, what’s next?

Pretty much what we’ve been expecting. Record debt and historic house prices have trapped the middle class in a snare of their own making. Income disparity is epic, as wealthy people with more liquidity and diversification make out as never before. Despite universal access to wisdom, financial illiteracy is rampant. A regrettable experiment with populist politics is starting to go badly all over. And, like Sears retirees, many people will suffer in the clash between a globalist, tech-driven, free-trade online world and their own bad assumptions.

So this blog, highly imperfect as it is (but with glistening abs and a six-pack torso) adds a little each day to that map. Maybe people are starting to get it. I see in Toronto, for example, a third of all homeowners now say they’re considering selling. Given that there are two million households, 821,000 detached houses and about 400,000 condos, with the market poised to decline and rates set to rise, this’ll be interesting. Much may be about to change as supply overwhelms demand after years of exactly the opposite.

Anyway, personal real estate is just a symbol of the past – an expensive, inefficient, antique way to live, and an emotional, unpredictable, costly way to invest. It’s amazing how many of us think the goal of life is a house. It isn’t.

The purpose is to enjoy the single asset you cannot earn, borrow or steal. Thus time is the measure. Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.

175 comments ↓

#1 Andrewski on 06.23.17 at 6:43 pm

Your last paragraph today nails it on the head Garth!

#2 ILoveCharts on 06.23.17 at 6:46 pm

http://globalnews.ca/news/3550519/vancouver-realtor-concerned-with-prices-in-new-joyce-development/

#3 crowdedelevatorfartz on 06.23.17 at 6:52 pm

Speaking of time…….
ITS MILLER TIME!
BEER O’CLOCK!

#4 Mike on 06.23.17 at 6:52 pm

.
Still no RE crash in Vancouver. It’s only only up and up.

#5 For those about to flop... on 06.23.17 at 6:53 pm

Pink Lemonade being sipped in Vancouver.

These guys spent 5.39 on this vacant block of land ,when the Westside of Vancouver was an easier target.

They purchased it in April 2016 and the listing made no mention of plans drawn up or anything,so just buy and hold seemed like the play.
The assessment lags behind their number at 4.74 ,so mind the gap.

Nice area,I have worked on a house a few doors down and some of the developers I work for are candidates to buy this at the suitable price.

I went back to work last week and managed a massive 12.5 hours.

I ran my b-grade math, I still came out better doing my trade than picking up a less physical ,full time minimum wage job ,which means I will continue to rehab and work part time until something else goes wrong.

At first glance not much has changed,it will take me a few weeks to hear all the stories I missed out on the last 6 months or so,the house I am working on will probably go for 6/7 million,I have yet to check to see how much they sold the last one I did for them before the wheels got wobbly last Spring.

Everyone working on the house is Chinese,except for me and HAM will be the target audience.

I was worried about my ankle and back ,but now that has turned to concern for second hand lung cancer as 10 guys chain smoke in the house all day long.

There is definitely a language barrier ,mistakes are made ,but I lived and worked in France for nine months on Paul Allen’s Villa and don’t speak French so I treat this as a similar challenge.

On the positive side,they make me listen to the Chinese radio station all day and I am now fluent in Celine Dion…

M43BC

1650 Waterloo Street, Vancouver

Jan 12:$5,900,000
Jun 20: $5,698,000
Change: – 202000.00 -3%

https://www.zolo.ca/vancouver-real-estate/1650-waterloo-street

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMDVEWA==

#6 For those about to flop... on 06.23.17 at 6:54 pm

Pink Lemonade being sipped in West Vancouver.

I have 4 or 5 listings like this one ,all trying to play up the view of the Lions Gate bridge to take your attention away from what type of house you are getting for this type of money.

These guys coughed up 3.68 and a fur-ball in Feb 2016 for a house built in 1938.

The assessment got carried away at 4.5m and I’m pretty sure I saw on the bc assessment website this morning them boasting to have claimed 7,000,000,000 in property taxes last year so these guys did their part in overpaying.

Their assessment jumped up the best part of two million.

If you look at it the other way they paid 3.68 when the current assessment was only 2.7

I’m sure they expected to be rewarded for such risk…

M43BC

2592 Nelson Avenue, West Vancouver

Apr 19:$4,098,000
Jun 21: $3,598,000
Change: – 500000.00 -12%

https://www.zolo.ca/index.php?sarea=2592%20Nelson%20Avenue,%20West%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyOTRKVA==

#7 S.Bby on 06.23.17 at 6:55 pm

Here is one for Flop to watch:
4735 Shepard Street Burnaby BC.
Sold June 22/16 $2,100,000
Now for sale $2,188,000

https://www.realtor.ca/Residential/Single-Family/18107051/4735-SHEPHERD-STREET-Burnaby-British-Columbia-V5H1L6

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzVzczUA==

#8 For those about to flop... on 06.23.17 at 6:55 pm

Pink Lemonade being sipped in Vancouver.

These guys are into it 1.57 which they signed on for in Feb 2016.

Shaped like a townhome,perhaps that’s what they should have spent half their money on…

M43BC

2786 E 46th Avenue, Vancouver

Mar 7:$1,750,000
Jun 20: $1,599,000
Change: – 151000.00 -9%

https://www.zolo.ca/index.php?sarea=2786%20E%2046th%20Avenue,%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwM0JLMg==

#9 For those about to flop... on 06.23.17 at 6:56 pm

Pink Lemonade being sipped in Vancouver.

These guys are trying to wipe out the other lemonade stands in the area with this rope- a-dope maneuver Muhummad Ali would’ve been proud of.

They paid 3.6 in May 2016 overshooting the assessment which came in at 3.48

There was no need for this tactic last year ,but they have been at it since last Christmas and so they obviously never got close to their number and now they are hoping someone drops the best part of 3.5million on the way to the Summer Shack.

I’ll check the glovebox…

M43BC

1384 W 57th Avenue, Vancouver

Dec 18:$4,388,000
Jun 21: $2,688,000
Change: – 1700000.00 -39%

https://www.zolo.ca/index.php?sarea=1384%20W%2057th%20Avenue,%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMUNNSA==

#10 peter slattery aka peteinto on 06.23.17 at 6:56 pm

Amen.

#11 AK on 06.23.17 at 6:57 pm

“Anybody can look backwards and be a genius.”
——————————————————————–
It’s an easy call against the Pumpers who have been saying Gold will hit $10,000.00 since 1980.

Also, against Marc Faber, who is always preparing for some kind of an apocalypse.

#12 Saint John on 06.23.17 at 6:58 pm

Props on the MMM callout http://www.mrmoneymustache.com/2017/06/20/next-recession/

#13 Yaroslav on 06.23.17 at 6:59 pm

No, not a dog. A dog is not required to provide meaning to life.

A true contrarian knows that cats are where it is at.

Cats are a contrarian’s best friend. I thought we already had this discussion before Garth, when I ranted about it in a 3 page post just days before you broke your leg, while out walking your dog.

That post added considerably to your blog’s word count.
Yaroslav

#14 JustMe on 06.23.17 at 6:59 pm

#58 Adrian on 06.22.17 at 8:35 pm

The following article by Professor Steve Keen explains how real estate prices depend on the acceleration of mortgage debt. When new debt as a percentage of GDP falls and turns negative, unemployment rises and sparks a deflationary recession. (Canada is shown about half-way down the article.)

https://www.macrobusiness.com.au/2017/06/steve-keen-on-the-secret-source-of-eternal-australian-growth/

——————————————————————–

I noticed in Figure 10 that Canada exceeds Australia in private debt as a percentage of GDP.

I like this quote. I think it also applies to Canada.

“Australia can’t avoid a crisis by merely stabilising its level of private debt to GDP: to avoid a crisis—or rather to delay it even further—Australia’s private debt has to keep growing faster than GDP forever. This can’t happen”

I also noticed that the orange line in Figure 10 parallels Vancouver house prices.

#15 MF on 06.23.17 at 7:01 pm

#204 Munich vs. Vancouver on 06.23

It’s called political stability, and it means everything.
It’s amazing how people can miss this. Nobody cares about the price of a cappuccino when there is political instability or corruption.

Europe is a disaster waiting to happen and is basically on borrowed time. The issues facing that continent will get worse not better and the EU will eventually collapse.

MF

#16 LH on 06.23.17 at 7:03 pm

Today’s required reading:

How to live on 24 hours a day:

http://www.gutenberg.org/ebooks/2274

As an aside, I checked what my “partnership” interest in the new HCG standby agreement was…

About a quarter a day undrawn, and a buck twenty five fully drawn! Enough for a cheap coffee a day for life!

#17 Anna on 06.23.17 at 7:07 pm

“I see in Toronto, for example, a third of all homeowners now say they’re considering selling.”

What? That’s insane. Are you hearing this from the real estate industry?

#18 TnT on 06.23.17 at 7:07 pm

Beautiful post Garth

Thank you…

#19 Sanjay on 06.23.17 at 7:07 pm

Family, success, love and a dog (2 in fact) check, check, check, and check!!

Nailed it and …….

First

#20 dangeresque2 on 06.23.17 at 7:08 pm

This reads like an epic, milestone post. Great work Garth!

#21 I'M NOT POLOZ on 06.23.17 at 7:08 pm

Only Bill Morneau wants every Canadian to own Real Estate, because he will ask you where you live when you interview him at his Bilderberg meeting…He even asked Dan Dicks of Press for Truth in Vancouver in which condo unit and condo building he was living in Toronto.

I’ll say it again:- Poloz wants a 50-cent Loonie & Bill Morneau wants every Canadian to work for free in an SJW Gulag while he takes fancy plane rides to Bilderberg meetings in a conspiracy to lower the Loonie for Warren Buffett so that Buffett can purchase Canadian Real Estate and REITS at a “cheaper” Loonie.

These bureaucrats you have in Canada will want every Canadian to work for free under a 50-cent loonie while fooling every Canadian that “inflation” is below 2%, including house prices.

So while Morneau, Poloz and Wilkins use Louis Vuitton paper material as their toliet paper, Canadians will be working for free under a 5-cent Loonie while Morneau wants to find out where you live…Is this Canada the free, impartial, polite country that everyone wanted to live in back in the 1970s-early 1980s?

Don’t even get me started with Mike Harris. He cuts welfare by 40% yet demand increase of his crony salaries by over 50% in the early to late 1990s in Ontario.

#22 Anna on 06.23.17 at 7:08 pm

Also, the Chinese super-villains that bought the office building I work with absolutely no resistance from Trudeau may have been lying about their assets to secure it. If this goes down, I wonder how many people with ghost assets won’t be able to pay their Canadian loans.

https://betterdwelling.com/one-chinas-largest-real-estate-buyers-lot-splainin/

#23 Millennial falcon on 06.23.17 at 7:12 pm

Well said Garth. I agree completely. The goal of life isn’t buying a house and paying it off. It’s too enjoy the time with friends and family.
Keep up the good work.

#24 tim of trees on 06.23.17 at 7:13 pm

Great post Garth. Perspective. Love the General Store, btw, nice location between home and Nana’s, and the little dudes can’t get enough of the creek out back. You give alot- that’s the way to do it. Thanks.

#25 Comment no. 490,001 on 06.23.17 at 7:14 pm

First, 490,001st

#26 TWO FINGERS WATSON on 06.23.17 at 7:15 pm

What’s next ? Pretty much the same as the last 9 years. Rising house prices, low interest rates, easy financing, tax free capital gains for everyone, more pissing and moaning. Carry on everyone, it’s all gonna be ok. Your government has got your back.

#27 Fish on 06.23.17 at 7:18 pm

#186 Nemesis on 06.23.17 at 2:44 pm
#IfYouCan’tBeat’Em… #BuyEm…

[Reuters] – Harley-Davidson enters race to buy Italian rival Ducati: sources

…”U.S. motorcycle maker Harley-Davidson (HOG.N) is lining up a takeover bid for Italian rival Ducati, potentially bringing together two of the most famous names in motorcycling in a deal that could be worth up to 1.5 billion euros ($1.67 billion), sources told Reuters…

…Milwaukee-based Harley-Davidson has hired Goldman Sachs to work on the deal, one source familiar with the matter said, adding tentative bids were expected in July.
Volkswagen, whose Audi division controls Ducati – maker of the iconic Monster motorbike – is working with investment boutique Evercore on the sale which will help it fund a strategic overhaul following its emissions scandal.”…

https://www.reuters.com/article/us-volkswagen-ducati-m-a-idUSKBN19C1XX

Thankyou

#28 prairiedenial on 06.23.17 at 7:19 pm

51 years old next week….like the country songs of old have been working odd/part-time jobs for last 15 years. hours cut, no hours, too old, overqualified with university degree, too friendly, not friendly enough….you name it…. out of job market to raise 2 sons as a single parent in the 1990s. back in the ‘good ‘ol days… no job reference, no job, no call back….forgetaboutit….have Bachelor of Arts from University of Winnipeg, 1992 , typing speed 61wpm, Fluent in French written and oral…but **knew my most valuable commodity was attitude, openness and gratitude that I still had my kids, my health and my pets, all 4 of them 3 cats and a dog,…. mother and sister(perms) who work for fed department since mid 90s thought I was a loser in my 1 bedroom, dog and 3 cat/2 kid apartment. been here 3 years, switched to a month to month lease last year, managed to keep up computer skills on 19k a year with all free resources on the internet. never gave up because I knew somehow I would get one more shot…. leaving in August 2017 from Winnipeg to take government term in north of Quebec at the Tax Centre in Saguenay, term yes, but this will lead to a recent job reference and more money in 4 months than I made last year. All the testing is free in this new merit based Fed civil service, you print off certificate and have proof of skills in 2017….not 1997. could not have done this if I had believed as sister, mother and extended family do that** ‘things will never change….Canada is special….” ** this thinking will be a financial death spriral. not ashamed to say I cried yesterday when I read the blog that the world will belong to **those who are flexible, mobile and adaptable.** yes like Cinderella I am about to find out. Thank you Garth.:)

#29 InvestorsFriend on 06.23.17 at 7:19 pm

RRSP Agreement and some more Math and observations

A Reply to #151 InvestorsFriend on 06.23.17 at 3:43 pm said:

The discussion was whether it made sense to put tax-advantaged investments into registered (rather than non-registered) accounts.

You made the following point: “That RRSP refund is no gift. It does not increase your net worth by a dime.”

I took umbrage with your assertion. The tax refund is a gift. An investment (whether tax-advantaged or not) in an RRSP will have a higher valuation after several decades than one made in a non-registered account, regardless of tax rates. And the explanation is the power of tax-free compounding.

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

I agree totally with your observations that “An investment (whether tax-advantaged or not) in an RRSP will have a higher valuation after several decades than one made in a non-registered account, regardless of tax rates. And the explanation is the power of tax-free compounding.”

Some people don’t get that and would waste the tax free compounding and not use it, preferring to pay say 20% in capital gains tax in a margin account as opposed to 0% on all gains on your net share of the RRSP (see below) (Yes, I mean you, living large)

Surprisingly, the best and most mathematically sound way to think of the tax refund is that it pays for a portion of the RRSP and the tax man becomes your partner and basically owns always about 40% of “your” RRSP. I have gone over the example too many times as have others.

Okay one more time. You have $6k to invest. If you go TFSA that obviously grows tax free. Say it goes up ten times to $60k in 30 years. Yeah.

Or take the $6k and borrow 4k more and put $10k in the RRSP. Repay the loan almost immediately with a tax refund which I assume is 40% in this case. Your net cost and net investment in the RRSP is $6k, same as TFSA. If the return is the same the $10k grows to $100k in 30 years. Let’s say the tax on withdrawal is 40%. You net $60k. Exactly the same as the TFSA. The inescapable conclusion is that your net $6k investment grew completely tax free. The big $40k tax bill is best thought of as the taxman simply taking back his 40% share of “your” RRSP that he funded in the first place.

Yes, I know the tax on withdrawal will differ somewhat and no you won’t take it all out at once. The point is to get people to understand.

“Your” RRSP is pre-tax money. Always assume about 40% will be paid in taxes. But that’s okay as the refund funded about 40%. Your net 60% share of the RRSP grows completely tax free. THAT is the gift. The math does not lie and neither do I.

Interestingly, the math of the matter is that when you put $10k into an investment in a TFSA, your net after tax exposure is of course $10k. But every investment in an RRSP should be thought of as 60% yours and 40% the taxman’s. If you lose $10k in an RRSP your net loss is $6k after considering the tax savings on the lost money that can no longer be withdrawn. Sadly, if you make $10k in an RRSP you only make net $6k after taxes. But it’s all fair since the taxman is your 40% or so partner.

My math is correct but I can’t keep stating it. Some already know this, some will learn from it and some refuse to learn. Such is life.

But the bottom line is: If you are in more than about a 35% and certainly a 40% marginal tax rate then max out the RRSP if you can. You can do TFSA first and also RESP. But logically you should max the RRSP before putting a dollar into a taxable account. This does not apply if your marginal tax rate is very low. Even those in clawback will find the RRSP was superior to margin account if they care to do the math and if they care to remember that they never would have had that $10k to put in the RRSP without the $4k refund. Or they forget they got the refund.

Another HUGE advantage of the RRSP that some consider a disadvantage is that (the idiocy of home buyers plan aside) most people think of it as untouchable money. It tends to remain in place and grow. Money in TFSA and margin is often too accessible and is spent.

If any advisor ever mentions melting down an RRSP to invest with him or her, RUN! That would make sense in only very unusual circumstances. Leave that money in place as long as legally allowed to compound for your retirement.

#30 Russ on 06.23.17 at 7:20 pm

Thanks for the check up.

I’ve got two out of three. Ain’t bad.

Found out I don’t need family after all and the sailboat is not a bad substitute for a dog.
The motorcycles are for a sense of speed.

I’ll look forward to keeping busy in retirement once work is no longer fun.

Thanks again Garth for being a reassuring sense of reason and balance in our little world.

#31 MSM-Free Zone on 06.23.17 at 7:24 pm

Be careful when calculating your personal contribution room to your TFSA. The CRA website is notoriously slow in updating your TFSA contribution room with updates from your notoriously slow financial institutions.

Myself, for the 2016 taxation year, I accidentally over-contributed a year ago in March to my TFSA, based upon outdated information in my CRA personal account, only to discover to my horror later in November my mistake. I quickly withdrew the over-contribution and waited patiently over the last seven months for the inevitable body-slam penalty from the CRA.

Well today that day arrived, not in the form of a totally expected CRA penalty, but in the form of a “TFSA educational letter”, advising me of my mistake, and that it would be a good idea to withdraw the over-contribution lest I become subject to a penalty in the very near future.

A kindler and gentler CRA? Who knew…..?

#32 prairiedenial on 06.23.17 at 7:28 pm

@#31 thank you for posting… people always mention the bad…. but rarely the other side…:) #28

#33 The end is near on 06.23.17 at 7:31 pm

“The purpose is to enjoy the single asset you cannot earn, borrow or steal.”

————————————

It’s called salvation through the savior Jesus Christ. Once we have this, time doesn’t matter either. I’m ready to go.

Ephesians 2:8
8 For by grace are ye saved through faith; and that not of yourselves: it is the gift of God

#34 Howard on 06.23.17 at 7:37 pm

Hard to interpret the stat that a third of Toronto homeowners are thinking of selling without knowing what the percentage would be in a balanced or “normal” market. A third doesn’t actually seem THAT high.

#35 Almost 10 on 06.23.17 at 7:42 pm

I must have been one of your first readers. And still a bear after 17 years in Vancouver. Made a killing in the home lottery though … sold out in June last year and bought some waterfront far away for 1/3 the price.

What are we doing for the 10th anniversary?

#36 For those about to flop... on 06.23.17 at 7:42 pm

#7 S.Bby on 06.23.17 at 6:55 pm
Here is one for Flop to watch:
4735 Shepard Street Burnaby BC.
Sold June 22/16 $2,100,000
Now for sale $2,188,000

https://www.realtor.ca/Residential/Single-Family/18107051/4735-SHEPHERD-STREET-Burnaby-British-Columbia-V5H1L6

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzVzczUA==

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

Hey Sobby, thanks .I put it in the Pink Folder.

I left a message with another one for you a couple of days back.

Plenty of Pink Lemonade stands in Burnaby…

M43BC

#37 Linda on 06.23.17 at 7:49 pm

The puppy of the day is so cute:) Seriously, that is the face that makes for a stellar model/film career.

Regarding Sears pensioners – ack. This nasty little side effect of companies going belly up (think Nortel) is not new, so why the heck have we not set up some rules to protect pensioners from the fallout? Seriously, if the economy is going to tank the last thing we need is more bodies lining up to find the best dumpster to dive in.

#38 Disgruntled Millennial on 06.23.17 at 7:52 pm

Garth, what I think you fail to address (or perhaps it’s understand) is a need for stability. I want to own a home. Not a 4000 sq ft granite counter top HGTV extravaganza. I want a place I know I’m not going to be kicked out of when my landlord wants to raise rates.

I have two kids, one in school one in daycare. Finding before/after school care and daycare has been a total pain in the ass. One place I’ve been wait-listed for 3.5 years to be told we may have a spot. If my landlord renovicts me I know have to find new care-which is almost impossible.

This is the reason I want a home. I’m not house horny. I don’t own a home because I don’t want to be saddled with a massive mortgage (even a condo in Van) will do that.

But when you discuss how owning a home is passe consider the consequences for us lazy millennials when we need to move our kids and all the difficulties that entails.

#39 Victor V on 06.23.17 at 7:54 pm

#17 Anna on 06.23.17 at 7:07

“I see in Toronto, for example, a third of all homeowners now say they’re considering selling.”

What? That’s insane. Are you hearing this from the real estate industry?

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

http://www.bnn.ca/30-of-toronto-households-plan-to-list-homes-amid-government-intervention-survey-1.787064

#40 crowdedelevatorfartz on 06.23.17 at 7:57 pm

@#35 Almost 10
“What are we doing for the 10th anniversary?”
******

Well, since this is a National Blog and Winnipeg is about as close to the geographic center of Canada( as much as Torontonians will beg to differ).
We can ride the rails while singing socialist songs about political correctness,…”Oooooon to Winnipeg in August for finaaaancial freeeeeedom’
Or something like it.
Anywho
I think we should all crowdfund and rent an abandoned Remax Office for a weekend of mosquito infested debauchery.
Somking Man can regale us with his stories of Carribean bliss via Skype while Mark corrects all statements with mistakes.
Wrk.dover can bring Lobster from Nova Scotia.
Floppy can bring some Fosters ( if his game leg will “stand up”)
Everyone can bring their dogs……

I with sit in the corner sulking because there is no elevator.

#41 TurnerNation on 06.23.17 at 8:01 pm

Toronto..walking around and dodge the clouds of weed on the sidewalk. Like we need more stoner zombies.
Stepping outside or beside an condo and inhale the fermenting dog pee – from those little condo dogs which cannot make to the nearby or non-existing green space.
Densification = open air minimum security prison?

Leftism vs. Capitalism:

Daily ‘carbon tax’ scare story from the globalist-controlled media says we might lose what we fight for.
Things like coffee:

http://www.cbc.ca/news/technology/coffee-climate-change-1.4169021

WHEREAS…capitalism says What shortage of coffee?
Prices are near 20-year lows!:

http://finviz.com/futures_charts.ashx?t=KC&p=m1


Toss your tee-vee.
Tune out, turn off and stay in (touch).

#42 WUL on 06.23.17 at 8:01 pm

FLOPPERINO:

I’m happy to hear you are back at the coal face swinging the pick. Keep us posted about that and the supply of lemonade.

You’ll remember those maps we saw over the last few years which showed the $1MM line marching eastward toward Princeton, BC. Keep an eye on it as it recedes back to Granville.

M(#olderbutnotwiser)FtMac

#43 espressobob on 06.23.17 at 8:05 pm

Financial responsibility is one of those things in life that can provide freedom for those that were diligent, to do the things they want.

How do you measure that?

#44 Pepito on 06.23.17 at 8:07 pm

#15 MF on 06.23.17 at 7:01 pm
“Europe is a disaster waiting to happen and is basically on borrowed time. The issues facing that continent will get worse not better and the EU will eventually collapse.”
_______________

Opinions are like assholes. Everybody has one. Regardless of the value of yours, the food and drink here on the Med coast is inarguably better, the cost of living considerably cheaper, and life generally more pleasant than you will ever know unless you’ve lived here. Pity you.

#45 Pillboy on 06.23.17 at 8:10 pm

Time is definitely the most important aspect of ones life. As my parents told me growing up when the school workload was getting to me, “would you rather have an easy time now and a hard time in the future, or would you have a harder time now, but an easier future”. An easier time in the future means more time to do the things that brings one joy.

The second most important asset is health. There’s no guarantee that all of us will make it to retirement, so don’t plan all life’s decisions around it. Best take advantage of time and health to make the most of what we’ve got. Instead of over spending to “get into the market”, I’m taking the lady on real vacations (no all inclusive) every year, treating her to dinners out for no reason, and being a good son to my parents who doled out the best advice on working hard.

#46 Fake News on 06.23.17 at 8:11 pm

#21 I’M NOT POLOZ on 06.23.17 at 7:08 pm
Only Bill Morneau wants every Canadian to own Real Estate, because he will ask you where you live when you interview him at his Bilderberg meeting…He even asked Dan Dicks of Press for Truth in Vancouver in which condo unit and condo building he was living in Toronto.

I’ll say it again:- Poloz wants a 50-cent Loonie & Bill Morneau wants every Canadian to work for free in an SJW Gulag while he takes fancy plane rides to Bilderberg meetings in a conspiracy to lower the Loonie for Warren Buffett so that Buffett can purchase Canadian Real Estate and REITS at a “cheaper” Loonie.

_____________________________________

Where did you hear this? The Bilderberg Meeting that Billy attended? You know….the “private meeting” that your tax payer dollars paid for. The “private meeting” not one Canadian News outlet talked about……

#47 Vancouver Troy on 06.23.17 at 8:12 pm

Why insult conservatives?

I thought this was a non-partisan blog where all were welcome to learn?

Except those with no sense of humour. — Garth

#48 Bob Dog on 06.23.17 at 8:14 pm

@#2 I cant understand why people paid so little for condos and homes in Vancouver 10 years ago. I moved here Aug 1 2007. The biggest mistake of my life but thats another story.

Why did people 10 years ago think Vancouver was worth so little?

#49 bigtowne on 06.23.17 at 8:14 pm

Most millineals spend hours on their smart phones. There are so many financial sites giving away free tutorials and market news and information to reach the most money unaware person on the planet. When our family sold our first house back in the 80’s there was so little available information on investing so the go to investment was a GIC.

Young people are so fortunate to have at their fingertips massive amounts of money education at no cost and easy to understand. Apple Pay; Paypal; Finteck; tap and go; pay with your smart phone…lots of ways to spend….

#50 WUL on 06.23.17 at 8:19 pm

Re: This Blawg

By Sept. 1 I have to file my Continuing Professional Development Plan or risk suspension by the Law Society.

For Chrissakes, a Manitoba lawyer of ~ 50 years experience found himself in the glue over his refusal to submit to this charade.

Mine will consist of one line:

1. On a daily basis I read Greater Fool by Hon. Buckaroo, M.P., P.C.

If I encounter pushback, I’ll take it to the highest court in the land, which according to the map is in Nunavut.

#51 akashic record on 06.23.17 at 8:21 pm

The purpose is to enjoy the single asset you cannot earn, borrow or steal. Thus time is the measure. Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.

It’s a progress to get here.

Or just the result of getting old and accepting that you will go to the other side with empty hands, all by yourself.

When you are young you don’t care about time, you just want to conquer the world, everything it can offer.

Whatever meaningless those goals may be, they are way more exciting than the wisdom of letting go and enjoying the time that’s left, searching for what all of this is supposed to mean.

#52 viorelli on 06.23.17 at 8:25 pm

The commercial property is smoking in Vancouver, all the triple net increases tied into rents are now forcing many small business to close or move further away from the city core. Furthermore, new commercial developments are increasingly not for sale but for lease only as developers want to cash in themselves rather than sell stratas. The cost of doing business is just getting too high with all the property tax, hydro, fair living wage to the city employees every time you need a sever connection, tons of red tape, wcb, etc, etc. Another business man who supplies all his glass for new towers just closed the shop in Langley an moved the whole operation to Mazatlán, Mexico. Cheaper labor, way less taxes, direct shipment line to Vancouver, over 30 people on the street now due to “smart” government policies. He moved the head office into his White Rock home now, that way part of expenses could be written off, his wife and daughter are all the employees he now needs. This country has not seen anything yet. This is just a tip of the iceberg

#53 paul on 06.23.17 at 8:31 pm

Yes the housing market is slowing !
I think the one point everyone here is missing.
It’s the weather with cold temperatures and all the rain, who wants to go look at a new house just wait till the warm sunny days show up.

#54 Daveyboy on 06.23.17 at 8:37 pm

How do u do it Garth?

Great job!!!

#55 Mark on 06.23.17 at 8:37 pm

“Mark corrects all statements with mistakes.”

What mistakes do you think I’ve made?

#56 no more fake news on 06.23.17 at 8:41 pm

#21 I’M NOT POLOZ on 06.23.17 at 7:08 pm
Only Bill Morneau wants every Canadian to own Real Estate, because he will ask you where you live when you interview him at his Bilderberg meeting…He even asked Dan Dicks of Press for Truth in Vancouver in which condo unit and condo building he was living in Toronto.

—-

He made it harder for people to buy, while saying something to the contrary. All of these big shots like Morneau don’t answer questions, if they hear a hard or uncomfortable question they just talk without answering it. I snooped around Dan Dicks site – he is 100% controlled opposition (He thinks Alex Jones is legit). Try and get close to Morneau with your video camera.

#57 Howard on 06.23.17 at 8:43 pm

#40 crowdedelevatorfartz on 06.23.17 at 7:57 pm
@#35 Almost 10
“What are we doing for the 10th anniversary?”
******

Well, since this is a National Blog and Winnipeg is about as close to the geographic center of Canada( as much as Torontonians will beg to differ).
We can ride the rails while singing socialist songs about political correctness,…”Oooooon to Winnipeg in August for finaaaancial freeeeeedom’

————————-

Winnipeg is a very under-rated city.

Good arts and music scene for a city its size. Great variety of ethnic restaurants. Friendly people and fairly open. Respectable universities. Beautiful lake beaches within close proximity. And of course, very cheap housing stock.

Shame about the winter, the “dry cold’ notwithstanding.

#58 n1tro on 06.23.17 at 8:44 pm

@Disgruntled Millennial

I read what you wrote but all I hear in my head is….

Waaah….I want a house….wash…having kids is hard work….waaah, waah, waaah.

Garth has said many times, if you can afford a house, then go ahead and buy one. If you got the money for an inflated house in the GTA or GVA, buy asap! As for using your kids as justification for your desire for “stability”… News flash…kids don’t care where they live or if the place is owned or rented. And they definitely don’t care about some snooty wait list daycare.

#59 Andrew Woburn on 06.23.17 at 8:49 pm

If you’re looking for one man to blame, here he is.

Frank McNamara

“In 1949, Frank McNamara ran out of cash at a business dinner…and struck gold.

As the story goes, McNamara was dining out at Major Cabin’s Grill right across from the Empire State Building. He forgot his wallet and his wife had to come downtown to pay the tab.

Wanting to avoid this in the future, ol’ Franky had an idea.

One year later, McNamara returned to Major Cabin’s Grill with a cardboard charge card (aka the first credit card) in his hand and a twinkle in his eye. Alas, the Diner’s Club was born.

For $3 a year (roughly $30 nowadays) members of the Diner’s Club got their very own credit card and could finally pay the bill at the end of the month.

But the real money? That came from charging merchants 7% interest on each purchase. Frank and Co. were movin’ and groovin’, convincing every restaurant in town to get in on the action.

And it worked. By 1951, the Diner’s Club had 10,000 members and was offered at 28 locations.

Fast forward to 2013 and Frank’s little idea led to 1.6 billion credit cards in circulation.

So the next time you go to swipe, or even sign up for a new card, remember our dear pal, Frank McNamara.”

-from Morning Brew

#60 chopstix on 06.23.17 at 8:50 pm

nothing like a builder creating a stir (Westbank) by allegedly setting aside about 20% of their condos for overseas Singaporeans…and charging outrageous prices to boot, on the van/burnaby border …500sq ft condo for $725,000
”$725,000 for one-bedroom condo at Joyce Station raises red flags”
http://www.metronews.ca/news/vancouver/2017/06/22/725000-for-one-bedroom-condo-at-humble-joyce-station.html

#61 Howard on 06.23.17 at 8:51 pm

#15 MF on 06.23.17 at 7:01 pm
#204 Munich vs. Vancouver on 06.23

Europe is a disaster waiting to happen and is basically on borrowed time. The issues facing that continent will get worse not better and the EU will eventually collapse.

MF

——————————-

Rubbish. I’m currently hunkering down in Europe, a refugee from Toronto’s housing bubble. I won’t move back until sanity is restored because, let’s face it, what does Canada offer? It might be heaven for the much-glorified “new Canadians” that Liberals seem to worship so much, but for anyone born and raised there, the grass is often greener on the other side.

#62 chopstix on 06.23.17 at 8:53 pm

nah, Scamcouver doesn’t have any speculators or nefarious money coming in…”it’s different here…”
CBC: “British Columbia
Number of empty homes in Vancouver hits record high
Data shows 98% increase in empty homes since 2001”
http://www.cbc.ca/amp/1.4175999

CBC News

#63 Fish on 06.23.17 at 8:56 pm

I thankyou nothing golden stays,, I’m afraid but i

#64 For those about to flop... on 06.23.17 at 8:57 pm

06.23.17 at 8:01 pm
FLOPPERINO:

I’m happy to hear you are back at the coal face swinging the pick. Keep us posted about that and the supply of lemonade.

You’ll remember those maps we saw over the last few years which showed the $1MM line marching eastward toward Princeton, BC. Keep an eye on it as it recedes back to Granville.

M(#olderbutnotwiser)FtMac

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

Hey WULLY,you just reminded me to put down the jug of Pink Lemonade and thank you for noticing that I took a break last week.

Which I will use as a segway to thank Smartie for wishing a happy birthday the other day.

I’m not a big birthday person but the GAP code puts it out there.

I visited St Augustine once and went looking for the fountain of youth ,but alas when I arrived at the place it was after hours.

Went out for Mexican instead and had a few beers and suddenly felt younger…

M43BC

#65 rainclouds on 06.23.17 at 9:01 pm

#50 WUL

So. your dues go to creating an audit position within the bowels of the Law Society of AB. Nice. How parisitic of them.you must be proud to support such high minded admin warriors ……

#66 FISH on 06.23.17 at 9:03 pm

I meant to say

Sorry, I want Ed to say You are Best

Thankyou

#67 Smoking Man on 06.23.17 at 9:08 pm

The universe is 13 billion years old so they say. I don’t believe them.

Life for a human 100 if your lucky. And the last 20 years not worth it, I’ve seen it with my own eyes.

Why are you bastards not at Seneca living it up, you can’t take it with you.

@smokingman on twitter for more ridiculous stupid videos. Need to get in the zone first. These pricks are watering down the JD im thinking.

#68 Randy on 06.23.17 at 9:11 pm

And two dogs.

#69 Millennial905er on 06.23.17 at 9:12 pm

@#38 Disgruntled Millennial

Interestingly, I made the same point in an earlier post. Here’s the quote:
“Renting is fine and good if you’re outside child rearing age (i.e. a university student or wearing “thirsty underwear” as Garth likes to put it). In Laura’s situation, however, renting is the pits. Imagine getting your child into a daycare or in a good school only to have the owners decide THEY want to sell and invest. Now you’re pooched. Good luck scrambling to find alternate accommodations, especially if you want to rent a house. The rental market isn’t always a great one, particularly in big cities like TO and VAN.”
Source: http://www.greaterfool.ca/2017/03/15/choices-13/#comment-505679

Crickets from Garth.

You want to indebt yourself for decades so you don’t have to move occasionally? Weird. — Garth

#70 Free Bird on 06.23.17 at 9:13 pm

“The purpose is to enjoy the single asset you cannot earn, borrow or steal. Thus time is the measure. Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.”
—————–
Amen. Learned the hard way but hopefully not too late. Working on the dog.

@#45 Disagree on health. Some of us learned its the most valuable asset. Yours and those closest. Including dogs (and cats.)

Great post. Well said.

#71 Millennial905er on 06.23.17 at 9:18 pm

Incidentally, GTFO of Van. I’m north of Toronto and the minute one of us gets a similar (lateral) job outside this vortex of doom, we’re booking it.

#72 Howard on 06.23.17 at 9:24 pm

#60 chopstix on 06.23.17 at 8:50 pm
nothing like a builder creating a stir (Westbank) by allegedly setting aside about 20% of their condos for overseas Singaporeans…and charging outrageous prices to boot, on the van/burnaby border …500sq ft condo for $725,000
”$725,000 for one-bedroom condo at Joyce Station raises red flags”
http://www.metronews.ca/news/vancouver/2017/06/22/725000-for-one-bedroom-condo-at-humble-joyce-station.html

———————————–

To be honest I don’t really consider Vancouver to be a part of Canada anymore.

Singapore would be a good model for Vancouver’s future. Although it would have to create a real economy there for that to happen, something beyond selling houses to eachother and Lululemon.

#73 I thinks I know something on 06.23.17 at 9:24 pm

“Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.” – Garth

————————————————————-

Meaning in life? For most people, only one or two generations after you’re gone, you’re forgotten.

It won’t take you that long. — Garth

#74 WUL on 06.23.17 at 9:26 pm

Garth:

If I may, coupled with a promise to shuddup and return to the Stamps vs. Redblacks. To you and by Pres. T. Roosevelt in 1910 and for your efforts:

The Man in the Arena

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.
The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood;who strives valiantly;who errs, who comes short again and again, because there is no effort without error and shortcoming;but who does actually strive to do the deeds;who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

#75 Smoking Man on 06.23.17 at 9:30 pm

All you you guys sweat the small stuff. You can’t see the big picture because your connection to the UCC is not strong.

Years ago at the tax farm, they spent millions tosed phds at the problem. Reconsile 24 derivative systems to the GL. Could not do it. I took a shoot, took me 3 months and I was hung over every single day. That what kind of brain I have. See the big stuff but refuse to wear pink shirts.

If you have daughters send em to school. That wonder girl on wall street, she will become. I love it.

If you have sons, home school them. The only thing standing in the way of global communism are masculine males.

Schools now get them at 4 years old. Wynee had a law that if your kid is gendar confused, your son says” mom, dad I want to be a girl” and you say ah, no.

The Ontario govt now has the right to take your kid away.

Don’t let them teachers make your sons into girls.

Gobalism is only doable when we evolove to read each others mind.

What if under a one world govt, Hitler got steering wheel.

#76 MF on 06.23.17 at 9:35 pm

#61 Howard

Laughable someone in Europe would mention Canada’s refugee situation when Europe itself is grappling with its own refugee disaster that is far far worse? The social unrest it’s causing will no doubt eventually lead to the inevitable collapse of the EU (along with the failed EU economy).

Btw, I know some of those new Canadians you mentioned. Sri Lanka said, Filipinos, Persians. They are sacrificing everything to get that citizenship you take for granted.

Good riddance and don’t let the door hit you on the way out I say.

MF

#77 MF on 06.23.17 at 9:42 pm

#4 Pepito on 06.23

Sorry but The socialist lazy lifestyle you mention is unsustainable.

The next Greek crisis should be due soon. Then we can all watch the arrogant European elite try to patch it all together for another 2 years until the next “crisis”.

MF

#78 ALFRED E. NEUMAN on 06.23.17 at 9:44 pm

I just read this post as I do all of them, and I gotta say Garth: YOU SIR, are one helluva writer ..!!

MIGHT I RECOMMEND ITS NIGH TIME, TO:

Kiss this blog and the financial industry “good-bye” .. you’ve very likely done well enough collecting sheckels enuf, to live well and buy whatever joys you.

Find your quiet corner and an old Olivetti, bring out your favorite java mug and line up your sharpened pencils. Write those stories you feel the urge to write.

Do your Hemingway thing and worry no more about anything. (Okay, heck, worry if you want to GT, but only as a hobby, okay?) Cause YOU’VE earned it ..!!

“Thanks for all you do and done” for those of us who’ve given some attention and paid some heed to your themes. Many have and are certainly the better for it.

#79 DON on 06.23.17 at 9:48 pm

Hey Flop, Pink Pollen post #9 was a severe belly flop. I couldn’t believe my eyes. Like WUL said you should see a creep from the outer limits of the GVRD back to Dunbar area. Would be interesting. Glad you are back at work!

#80 Leo Trollstoy on 06.23.17 at 9:51 pm

Mark corrects all statements with mistakes

Mark corrects all statements wth a 50 year time horizon lol

#81 Contrarian Coyote on 06.23.17 at 9:52 pm

#28 prairiedenial on 06.23.17 at 7:19 pm

could not have done this if I had believed as sister, mother and extended family do that** ‘things will never change….Canada is special….” ** this thinking will be a financial death spriral. not ashamed to say I cried yesterday when I read the blog that the world will belong to **those who are flexible, mobile and adaptable.** yes like Cinderella I am about to find out. Thank you Garth.:)

===

Good stuff Prairiedenial and congrats on the fed role in Northern Quebec. It’s a great lesson that you’ve already learned about being flexible, mobile, and adaptable in today’s labour market. It took me a few tries at it as well but it’s a lesson I’ve learned as well. Best of luck and keep is updated how everything goes!

#82 DON on 06.23.17 at 9:55 pm

#28 prairiedenial on 06.23.17 at 7:19 pm

By the sounds of your post you are already ‘rich’ in so many ways. Good for you…money will come. Got your foot in the door and are mobile…nice. NWT is also hiring – got a friend up there – would be happy to help.

#83 DON on 06.23.17 at 9:59 pm

#74 I thinks I know something on 06.23.17 at 9:24 pm

“Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.” – Garth

————————————————————-

Meaning in life? For most people, only one or two generations after you’re gone, you’re forgotten.

It won’t take you that long. — Garth

*******************
Garth’s rebuttal – LMAO…nice!

I thinks…of course you are forgotten by other generations of family members…cause you didn’t spend any time with them because you were dead. No one is remembered forrr ever, except those who have Pet Rocks!

#84 Howard on 06.23.17 at 9:59 pm

#77 MF on 06.23.17 at 9:35 pm
#61 Howard

Laughable someone in Europe would mention Canada’s refugee situation when Europe itself is grappling with its own refugee disaster that is far far worse? The social unrest it’s causing will no doubt eventually lead to the inevitable collapse of the EU (along with the failed EU economy).

——————————

Uh, I didn’t say anything about refugees to Canada.

I said that I am a refugee from Toronto’s housing insanity. I guess tongue-in-cheek doesn’t register with you?

This “collapse” of the EU, if it ever occurs, is 50+ years away. I think I’ll chance it.

#85 For those about to flop... on 06.23.17 at 10:02 pm

Hey WULLY,I forgot to reply to your post about the NHL’s newest team The Vegas Vagabonds.

Not real thrilled with the outfits.

Elvis jumpsuits would have been better.

Maybe they weren’t allowed as the flairs possibly could be seen as a workplace hazard…

M43BC

#86 For those about to flop... on 06.23.17 at 10:06 pm

Pink Lemonade being sipped in Vancouver.

These guys are still going for double digit gain and its probably Orange Lemonade anyway as this is an attempted flip in the Orange Octopuses Trump Tower in downtown Van.

In Feb 2015 ,they paid 2.4 and the assessment that came in 2016 while close did not meet their number at 2.37

If it goes for this number they will pocket around 5/6 % after expenses.

Or as Betsy DeVos would tell you,they made millions…

M43BC

5305 1151 W Georgia Street, Vancouver

Mar 17:$2,780,000
Jun 21: $2,680,000
Change: – 100000.00 -4%

https://evaluebc.bcassessment.ca/property.aspx?_oa=RDAwMDExMEI1RQ==

#87 AACI Home-Dog on 06.23.17 at 10:09 pm

Great post. My favorite piece of real estate is my cabin on an interior BC lake. Will be passed down; I will never see that coin again. I am good with that though.
M61BC

#88 Lifexpert on 06.23.17 at 10:10 pm

Smoking Man

Post 76 is bang on

#89 Atlantic Coast on 06.23.17 at 10:12 pm

Thanks a million Garth , actually Thanks 2 million !

#90 Mark on 06.23.17 at 10:13 pm

So a little back-of-the-envelope math here. Follow along.

XIU, a TSX index tracking ETF currently pays a $0.157/quarter dividend and is priced at $22.64, for an annual cash yield of 2.77%. There is no return of capital associated with these distributions.

One can borrow a million Canadian dollars at Interactive Brokers for 1.57%.

Should the TSX, ie: XIU, not reach yield equivalency with the cost of credit at some point in the not so distance future?

What does this put the TSX at? 2.77% / 1.57% = 176%.

TSX Composite Index is currently 15,319, a level similar to that of 9 years ago.

Simple math implies that the TSX belongs at a level closer to 176% of 15,319, or 26,961.44.

The cheapness of the TSX becomes even more absurd when you consider that most of its dividends are tax-advantaged by virtue of being Eligible Dividends. And that the financing expense for money borrowed to invest is tax deductible. Adding yet further to the sheer absurdity of the present valuation is the fact that dividends paid by TSX60 constituent companies are only approximately 40% of the underlying earnings of the firms. Remember that ‘earnings’ are after all the taxes have been paid, depreciation accounted for, and managers/employees compensated.

Its absolutely and utterly amazing that anyone would even consider holding, let alone buy cash-flow neutral or cash-flow negative real estate.

#91 mitzerboy aka queencitykidd on 06.23.17 at 10:16 pm

happy long days everybody
get out and run naked and make luv in a forest
have fun ….
thats what we are here for

#92 Asterix1 on 06.23.17 at 10:17 pm

For some people living in King City, a massive real estate crash is already happening.

June 2016 = 1.27M$ (average price)
Oct 2016 = 1.75M$
Mar 2017 = 1.75M$
Mid- June = 1.09M$

That is -15% in 1 year!
That is -37% in a few months.

Richmond Hill (and other areas) -20% in a few weeks.

Some people are losing their shirts! They are the first victims of the crash. This will be epic!

#93 Jr on 06.23.17 at 10:27 pm

Please more stats Garth.

How many posts were from Smoking Man?

How many bottles of JD has he found the bottom of?

#94 Nonplused on 06.23.17 at 10:28 pm

I think I’ve left 2695 replies under one name or another, mostly this one. Sad. Oh well I enjoy the topics.

#33 The end is near

Most religious people I know are hedging their bets by trying to enjoy this life first.

#95 Mistakes on 06.23.17 at 10:28 pm

#55 Mark
What mistakes do you think I’ve made?

Each and every day post nonsensical comments on a blog, where you could be doing something useful with yourself instead?

No wonder people think you are a robot.

#96 Ed on 06.23.17 at 10:30 pm

Its not just time….its quality time that counts.By that measure I have had more than my fair share as have most Canadians.

#97 Pete from St. Cesaire on 06.23.17 at 10:47 pm

Happy St. Jean Baptiste day everyone!

#98 WUL on 06.23.17 at 10:50 pm

Smoking Man:

I continue to learn from you. Above, in an earlier comment while sucking up to Garth I intimated that I would not comment again tonight. I lied.

I take it you are a fan of Cash. Try the great John Hiatt. For me it is Adios to Fort McMurray when I board a bus next week for a 9 hour trip to Cowtown, back home.

Anyhow, here’s Adios To California:

https://m.youtube.com/watch?v=Ju_PxpV00Wg

#99 liquidincalgary on 06.23.17 at 10:54 pm

“glistening abs” ??

———————————————————————-

that’s it…no more oil rub-downs from smoking man.

now we know why he’s at the general store so often

#100 OttawaMike on 06.23.17 at 10:58 pm

Is it Christmas already?
You usually save these types of posts for then.

Nice column to end the week with.

#101 WUL on 06.23.17 at 11:03 pm

Garth, when is closing time?

Smokey, better yet, try “Memphis In The Meantime”

Night all.

https://m.youtube.com/watch?v=OwhLdr01c6U

#102 Auld Lang Syne on 06.23.17 at 11:06 pm

You’ve been great Garth.

Just 1 beef:

When do I get to see an English Springer Spaniel?

#103 Livin Large on 06.23.17 at 11:07 pm

“An investment (whether tax-advantaged or not) in an RRSP will have a higher valuation after several decades than one made in a non-registered account, regardless of tax rates.” Right here, right out of the gate you make the fundamental error made by every zealot. You start from a preconceived notion that is false and work on from it.

The only valid issue to consider with any investment is when you finally convert that instrument into cash, just how much cash do you get to keep. Regardless of how you arrive at the cashout point, all that matters is how much you keep.

An RRSP is not one type of instrument but many and since capital gains is only payable on the disposal of the property or your death, the same equities in either registered or non registered for the same period will grow at the same rate.

Dismissing taxation rates is a second fatal error. The only thing that matters is what you get to keep at the end of the term and that same basket of equities in a non registered account has half the tax hit of the equities taken out of a registered account. That’s always open to goverments messing with the advantage of capital gains but still a decent gamble that capital gains aren’t likely ever going to be taxed at earned income rates.

#104 Chico on 06.23.17 at 11:13 pm

#74 I thinks I know something on 06.23.17 at 9:24 pm

“Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.” – Garth

————————————————————-

Meaning in life? For most people, only one or two generations after you’re gone, you’re forgotten.

It won’t take you that long. — Garth

—— – – – – – – –

Nice! :)

#105 rental property math on 06.23.17 at 11:28 pm

if you guys think its easy to just keep getting mortgages it sure as hell ain’t.
i’m sweating it out here trying to get my last one.
goodbye to equity based lending.. doesn’t matter that I can pay for the place in full if I cash out my registered and non-reg funds. doesn’t matter that the purchase price is 450K (preconstruction) and could be appraised at 625K and i’m looking for a loan of 275K. doesn’t matter that all my rentals are cash flow positive SFH and duplexes. also doesn’t matter that the amount of the loan I require is only a fraction of my net worth. I’ve been offered 12% and 7% mortgages so far. still waiting on one bank to get back to me. if you think it’s the people who have multiple properties under their belt that are going to crash the real estate market. ..afraid not.. once you go over 5 mortgages though, it’s near impossible to get another one. i’m getting treated like a bum

#106 Ponzius Pilatus on 06.23.17 at 11:33 pm

#15 MF on 06.23.17 at 7:01 pm
#204 Munich vs. Vancouver on 06.23

It’s called political stability, and it means everything.
It’s amazing how people can miss this. Nobody cares about the price of a cappuccino when there is political instability or corruption.
Europe is a disaster waiting to happen and is basically on borrowed time. The issues facing that continent will get worse not better and the EU will eventually collapse.
————
Not sure what your problem is.
The EU has 31 member nations.
Some of them like Greece and Spain are in trouble.
But the core, Germany, France , Austria, holland, Begium and some of Scandinavia are in perfect shape.
Even Ryan in his last post recommended exposure to Europe.
Buddy, you gotta let go.
Canada is not what it used to be.

#107 Ponzius Pilatus on 06.23.17 at 11:49 pm

Something strange is happening:
I skip all of SM’s comments.
I think he’s selling out and does not make sense any more.

#108 crossbordershopper on 06.23.17 at 11:57 pm

after going on and on daily about real estate, real estate, interest rates interest rates the occasional derivative discussion about the economy or personal investment and taxation. Garth finally gets soft and took the right road and finally talks about the ONLY thing that matters. TIME. do a google search for a twilight zone for the episode where the rich guy buys youngsters time. Good episode.
so, why do people waste their time driving up and down the 401/403 to go back and forth to work to pay some banker and blood money to keep this fake money world spinning. the sad part is people spend all their time at work and travelling etc. to make money to have a life but never enjoy it. people laugh at the bumb but they are free. free of lifetime worldly assets, but they have time, something i think we will all gladly pay for more of like the twillight episode, but it will be too late by then.
garth’s best post, he should talk more about enjoying life, he would raise his standing many fold, and sprinkle a little financial literacy along the way.
time. and health, its all we got and we need.

#109 Ponzius Pilatus on 06.24.17 at 12:01 am

I can’t understand why people worship Buffet.
Like Jim Pattison, he’s sucking the working man dry, so he can make another Billion.
Pretty sick, if you ask me.
Cheating hard working Sear’s employees out their pensions is as low as it get’s.
No wonder people in the west are voting left.

#110 FLHTK on 06.24.17 at 12:03 am

That last paragraph was bang on! Nothing more precious than time. Real wealth is measured in health, family and love. Not dollars.

#111 Mark on 06.24.17 at 12:09 am

“if you think it’s the people who have multiple properties under their belt that are going to crash the real estate market. ..afraid not.. “

Actually it is precisely the sort of person with your profile that is at very high risk of default as prices continue to go lower. An owner of a single SFH, they probably will work their proverbial rear end off to keep “their” house as financing costs rise due to rising risk premia.

But for those who have rentals, there’s no doubt that they’ll walk away without hesitation if the financing costs get to be too much for them relative to income.

“Cash flow positive” isn’t good enough in real estate as RE is, over the long term, a wasting asset and part of the cash flow received from RE is actually a return of capital in reflection of long-term depletion of the asset.

With the rapidly deteriorating RE market these days, it is also rather likely that you are exaggerating your apparent equity position in the property. I distinctly remember the mid 1990s, when properties that were contracted in 1991 in the $500k range in Mississauga ended up actually being delivered for half of that in 1993. Far exceeding the average price decline for Mississauga generally at the time.

So shop around, but I don’t think the banks are ‘wrong’ for being very reluctant to lend to you given your extreme exposure to the RE market and the amount of debt people with your profile tend to have on their balance sheets. Perhaps also use this opportunity to give serious thought to lightening and balancing out your portfolio, since even with the limited amount of information you’ve given, its trivial for us to determine that it is quite unbalanced.

#112 Ontario's Left Coast on 06.24.17 at 12:24 am

Garth, this post sums it all up… So well put!

#113 John on 06.24.17 at 12:43 am

paul on 06.23.17 at 8:31 pm
Yes the housing market is slowing !
I think the one point everyone here is missing.
It’s the weather with cold temperatures and all the rain, who wants to go look at a new house just wait till the warm sunny days show up.

You poor realtors will say anything no matter how stupid you sound. Housing is crashing. For sale signs everywhere in the GTA and very little if anything selling. When market hot rain or shine they sold. Now they are sitting for months and no sale while prices are crashing. Prices down over $110,000.00 in just 8 weeks which is crashing faster then the last HOUSING crash in 1990.

#114 Tony on 06.24.17 at 12:53 am

I bought USA Video Interactive on the Vancouver Stock Exchange long before Netflix ever existed. I wonder where Netflix got their idea from?

#115 A Reply to #210 Livin Large on 06.24.17 at 12:55 am

Assume the following facts: (a) your marginal tax rate is 40% at age 20 and 60% at age 71, (b) you purchase a $1,000 tax-advantaged investment at age 20 and cash it at age 71, (c) you earn annual investment income of 7% pretax and 6.3% after tax (tax rate: 10%), (d) there’s no inflation.

(A) Net worth at age 71 if investment is in a non-registered account: $1,000 x (1 + 0.063) ^ 51 ~ $22,553.

(B) Net worth at age 71 if investment is in a RRSP account: $1,000 x (1 + 0.07) ^ 51 ~ $31,519. Add tax refund’s worth at age 71, received at age 20, and put into a TFSA: $400 x (1 + 0.07) ^ 51 ~ $12,607. Less tax on RRSP withdrawal at age 71: $31,519 x 0.6 ~ $18,911. Grand total: $31,519 + $12,607 – $18,911= $25,215.

#116 Tony on 06.24.17 at 1:07 am

Re: #106 rental property math on 06.23.17 at 11:28 pm

Think about rental properties in Alberta where the owner has no mortgage yet is cash flow negative now that most of the renters have left the province. It could be worst.

#117 Freedom First on 06.24.17 at 1:31 am

#76 Smoking Man

*****star post.

————————————————————–

Great post Garth. My life, my way=Freedom. Fact.

Freedom First
Master of Freedomonics

#118 cmj on 06.24.17 at 1:57 am

Great post, Garth. Hind sight is 20/20 when it comes to real estate and when it will eventually correct.

I think what we all learned from this blog is diversify through ETFs. Whether people sold their homes and created a balanced portfolio or else took on a line of credit against their home. I never sold my home but my portfolio is now diversified with ETFs. Thanks, Garth

#119 Learner on 06.24.17 at 2:01 am

#164 IHCTD9 on 06.23.17 at 11:51 am
There is always a powerful argument for commuting a pension, when you are able. — Garth
___

This should be a no brainer if you work in the private sector. I think Stelco/US Steel retirees are learning this lesson right now. Essar/Algoma may be next up.

——————

So if vested in provincial defined benefit pension, can we consider the pension is safe and no need to commute when reaching 55 year old? Let’s say we have investment outside the DB pension following 60/40 rule. Or it is still a good idea to commute the pension out.
thoughts?

#120 BillyBob on 06.24.17 at 3:10 am

#44 Pepito on 06.23.17 at 8:07 pm
#15 MF on 06.23.17 at 7:01 pm
“Europe is a disaster waiting to happen and is basically on borrowed time. The issues facing that continent will get worse not better and the EU will eventually collapse.”

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

MF’s comments on Europe remind of a teenager who thinks they know more than their parents. Amusing to read, in their ignorance and obvious total lack of knowledge of much outside the Canadian borders. You can’t correct, you just have to wait for the painful reality to actually sink in later. Perhaps actually traveling to Europe would help enlighten him.

Newsflash: “Europe” is not really a single thing, EU or not, and will survive, EU or not. Canada is a tiny nation with a large landmass (and some large mouths and attitudes to match, apparently).

And superb snipers. Awesome. I love the way the JTF2 boys have temporarily destroyed the happy-clappy vomit-inducong image of the nation Trudeau tries desperately to project. Well done. 3,450 metres. Suck on that, cowering liberals.

Apparently there still are a FEW men left, Smoking Man.

#121 JWD on 06.24.17 at 3:41 am

I’m sure when you typed “Well, what’s next?” there was a collective big gulp, like me that feared – you better not be saying good-bye buddy!! I’ll throw this laptop across the room. I live for this pathetic damb blog! Collective relief. Thank you.

#122 Karma on 06.24.17 at 4:23 am

#81 Leo Trollstoy on 06.23.17 at 9:51 pm
“Mark corrects all statements with mistakes

Mark corrects all statements wth a 50 year time horizon lol”

Like the Canucks: snatching defeat from the jaws of victory.

#123 Dan.t on 06.24.17 at 5:00 am

DELETED

#124 The End Is Near on 06.24.17 at 5:16 am

#95 Nonplused

You just said it, Religious. Religion is mans attempt to reach God through ones own life. True Christianity was God’s attempt to reach man through Christ because Man will never be good enough. When we realize the debt paid on our behalf and the gift that cannot be earned, its life changing.

#125 Whaaaa on 06.24.17 at 6:18 am

#106 rental property math on 06.23.17 at 11:28 pm

if you guys think its easy to just keep getting mortgages it sure as hell ain’t.
i’m sweating it out here trying to get my last one.
goodbye to equity based lending.. doesn’t matter that I can pay for the place in full if I cash out my registered and non-reg funds. doesn’t matter that the purchase price is 450K (preconstruction) and could be appraised at 625K and i’m looking for a loan of 275K. doesn’t matter that all my rentals are cash flow positive SFH and duplexes. also doesn’t matter that the amount of the loan I require is only a fraction of my net worth. I’ve been offered 12% and 7% mortgages so far. still waiting on one bank to get back to me. if you think it’s the people who have multiple properties under their belt that are going to crash the real estate market. ..afraid not.. once you go over 5 mortgages though, it’s near impossible to get another one. i’m getting treated like a bum

—-
boo hoo. All that cheap money from Poloz was meant to be invested in companies that produce products and jobs, you know, those things that make an economy. It wasn’t meant to be used to sit dead in a house. Take the hint from your bankers, quite borrowing money and go get yourself a real job.

#126 maxx on 06.24.17 at 7:02 am

One of your best, Garth.

I’ve been blessed with enough ability to buy freedom at an early age. It was then I realized that time is far more important than money and that there is precious little of it. Some might argue that there is enough, but there it is. Life seems to snap like an elastic band to the realization that huge amounts of time have been allocated to occupations not of our choosing.

Time is many things to many people, but one constant is that it is silent – and it slips by relentlessly. If you net out sleep, working and the necessary operational details of life, there’s not much of it left. Puppy knows it’s time to get out there and have some fun.

We only get one shot, no one really gets to do everything they’d like to, but “no regrets” is one of my goals. A bit macabre, but every day, I look up at the sky and marvel its beauty and being alive to appreciate it. Then I look down at the ground and imagine the inevitable……never again able to see the beauty above and around me.

Since I slipped the bonds of outside employment (still work, but at our own business), I look at the world differently. I feel far more inclined to help the needy.

The little pooch in the pic says it all….don’t put off having fun, sniffing the roses, anticipating the mystery, looking at the world in a brand new day and most of all, sharing what you can.

It strikes me that dogs are born guides that always seem to be pointing us towards the good stuff.

Life is such an incredible, miraculous lottery.

How is it that we drew the winning tickets?

#127 maxx on 06.24.17 at 7:16 am

#28 prairiedenial on 06.23.17 at 7:19 pm

All the very best!

#128 Dharma Bum on 06.24.17 at 7:31 am

#13 Yaroslav

“A true contrarian knows that cats are where it is at.”
——————————————————————-

Not to mention that they make excellent Chinese food.

#129 Freedumb on 06.24.17 at 7:32 am

Money can make it pass with more pleasure, but not more meaning. For that you likely need family, success or love. And a dog.

——————————————————-

You are so right. Me, myself and I.

#130 Wrk.dover on 06.24.17 at 8:17 am

Interesting post, to say the very least! Very profound conclusion. All of those monthly payments have not lead to nirvana in the GTA!

Driving westbound from afar, through the Annapolis Valley yesterday evening on the 101 (main highway), no cars ahead, none behind for an hour, met an eastbound car or two every few minutes, until even fewer as I got closer to home. I put the car away, went indoors, Lights! TV! Kitchen! Bathroom! Just like in the GTA, but grossly undervalued and surrounded by quiet fresh air!

A small house can be symbiotic with the dwellers, if the price of the land it stands on costs a months pay, the water below it is fit to drink, the soil around it will feed you and the surrounding trees are plentiful enough to heat into perpetuity.

GTA…yes the goal line got blurry. And soon that shopping you live there for has to be done from home!

So, the world’s population is migrating to urban centres…

#131 Bonhomme Carnaval on 06.24.17 at 8:17 am

Bonne fête nationale du Québec !

Big party on The Plains of Abraham tonight!

#132 John on 06.24.17 at 8:25 am

I miss my Dog.

#133 TheoryAndPractice on 06.24.17 at 8:30 am

Hey Garth,
I don’t post pretty much anything on internet but this is the day : Thank you very much for sharing your thoughts.

#134 Courage and Poo on 06.24.17 at 8:52 am

Thank you for your time Garth!

#135 IHCTD9 on 06.24.17 at 9:13 am

#181 Stan Broock on 06.23.17 at 2:18 pm
#160 IHCTD9 on 06.23.17 at 11:44 am

You are arbitrarily selecting time periods to compare to support your view.

wrong on food, we are eating GM crap vs. real food 30 years ago, despite significant food inflation.

important stuff – education, housing, health costs much more today than 20-30 years ago.

——–

I was pointing out that things go up and down, but the key statement to keep in mind is that I was speaking costs of consumer items compared to incomes. Of course everything is more expensive just looking at the price sticker.

I’m actually right about food, it is less expensive today compared to incomes than it was in the past. It makes perfect sense and you can google it. Just about every single apple grower in my area went out of business 2 decades ago because they could no longer live off of the proceeds of their orchards when forced to compete with foreign growers.

I did not comment on things like housing, education, health care etc… and on this point I agree with you 100%. Anything the government has its fingers in, or even fiddles with is going to blow up in price, always been, always will be. That’s why I take action to avoid or offset these costs, they come every year, death and taxes…

Back in the mid 90’s, I paid over 800.00 for a good Sony 27″ Tube TV. Today, 800.00 will get you a bigger, better TV by every measure. Plus, I make way more now than I did in the 90’s. This TV is a great example of the huge one-two punch of technology combining with globalization to drive prices way down. There are many more products the same.

IMHO, we still haven’t seen near the bottom of price on goods. Not even close. Wait until China/India muscles its way into the North American Auto Market….

#136 jess on 06.24.17 at 9:20 am

trump speaks the few and not the many

http://channel.nationalgeographic.com/from-the-ashes/videos/coal-minings-environmental-impact/

#137 Sarah Dodds on 06.24.17 at 9:39 am

Love the blog, really appreciate the effort put into it! Thanks!

#138 MF on 06.24.17 at 9:50 am

#107 Ponzius Pilatus on 06.23.17 at 11:33 pm

Just tired of hearing people complain about how bad Canada is from afar. Canadians like to complain, me included, but when we start comparing the country to other areas with real problems (refugees, failed economies) it’s a little too much.

#121 BillyBob on 06.24.17 at 3:10 am

Come on BillyBob no need to make this personal. It’s tiring hearing people complain about “how bad it is” in Canada when other parts of the world are teetering on collapse. THAT is more like your example of a teenager in your post.

Britain voted to leave the EU. La Penne (whose main goal was to separate from the EU) was a front runner in France’s last election, and the economy is bad, yet you are trying to tell me everything is well there?

Anyways back to the sniper. Look at this idiot:

http://www.cbc.ca/news/politics/sniper-iraq-combat-mission-mulcair-1.4175799

MF

#139 Ole Doberman on 06.24.17 at 9:53 am

Gartho’s a true iron man with the work he’s done on this blog (shows in his 6 pack). I know I can’t wait to sit down and read daily at 4pm sharp.

I know people are tough on him here sometimes, but we know he’s the man!

#140 IHCTD9 on 06.24.17 at 10:07 am

#72 Millennial905er on 06.23.17 at 9:18 pm
Incidentally, GTFO of Van. I’m north of Toronto and the minute one of us gets a similar (lateral) job outside this vortex of doom, we’re booking it.
—–

My thoughts exactly. DM should be scanning the job ads every single day until a decent job outside YVR is landed.

YVR/GTA are not places to get ahead in 2017. Those that moved in 20 years ago were the last to do that. From here on in, you’ve got to have rocks in your head to voluntarily move in to these cities.

Make it a priority, gtfo asap.

#141 crowdedelevatorfartz on 06.24.17 at 10:09 am

@#107 Ponzi P
“But the core, Germany, France , Austria, holland, Begium and some of Scandinavia are in perfect shape….”
*******
Yes Europe is special and more interesting than Canada
But I wouldnt be too smug about that “core”.
France AND the EU dodged a bullet with the election of Macron.
Britain leaving.
Terrorism attacks popping up on a continuous basis. Bank failures and a sluggish economy everywhere except Germany, whose voters tire of paying for everyone else’s fiscal impudence.
Angry voters everywhere that are sick of the status quo and vote “against” the current govt rather than “for” a new govt.
It doesnt foster a great deal of hope for a long term EU……
If Ceasar, Napoleon, Hitler failed to “unify” europe….and it survived…..a bunch of Brussels beaurocrats dont stand a chance

#142 chopstix on 06.24.17 at 10:09 am

#131 Wrk.dover on 06.24.17 at 8:17 am
Interesting post, to say the very least! Very profound conclusion. All of those monthly payments have not lead to nirvana in the GTA!

Driving westbound from afar, through the Annapolis Valley yesterday evening on the 101 (main highway), no cars ahead, none behind for an hour, met an eastbound car or two every few minutes, until even fewer as I got closer to home. I put the car away, went indoors, Lights! TV! Kitchen! Bathroom! Just like in the GTA, but grossly undervalued and surrounded by quiet fresh air!

A small house can be symbiotic with the dwellers, if the price of the land it stands on costs a months pay, the water below it is fit to drink, the soil around it will feed you and the surrounding trees are plentiful enough to heat into perpetuity.

GTA…yes the goal line got blurry. And soon that shopping you live there for has to be done from home!

So, the world’s population is migrating to urban centres…
————————————————–

i’d like to hear more from people who’ve given up on BC and Ontario (golden horseshoe) and have moved to the Maritimes….i know one co-worker here who did…she and hubby couldn’t find anything worthwhile in lower mainland vancouver, even out to coquitlam…so they pulled up stakes and moved to New Brunswick.
sure the climate is not as nice as the west coast, but imo there is a far greater sense of community and unpretentiousness out there.
i always said: if Vancouver had the class/culture of Toronto/Montreal with the down to earthness and sense of community of those from the prairies and maritimes, then it’d make for one rocking city.

#143 Jacque Shellacque on 06.24.17 at 10:30 am

Sifting through listings in Hamilton and Burlington, and I don’t get it. (I’m a long time, committed renter, with a modest but growing portfolio Garth would mostly approve – not interested in a house, just checking). All over the place, 5, 6, 700,000 houses for sale. Median income in this area is about $80,000. Who is buying these? Who can afford them? Townhouse 2 doors down from the one I’m renting listed for 499,900 – current and previous owners have spent the last 5+ years that I’ve been here renovating. Who would spend that kind of money? Who has it? What am I missing here?

#144 crowdedelevatorfartz on 06.24.17 at 10:32 am

@#132 Bonhomme Carnaval
“Bonne fête nationale du Québec !”

Should be a fun night.
Just askin.
Exactly when did the PQ Seperatists change
St. John the Baptist celebrations into a Quebec “National” celebration party?
Jacques Parizeau wasnt smart enough to think it up.
Was that a Rene Levesque thing or Benedict Bouchard idea?
And the main celebration is being held in the same field where Montcalms French forces were defeated by
Wolfe’s battle hardened and universally feared Prussian mercenaries….how ironic.
The german troops forcing the french to surrender a “nation” almost 150 years before WWI

Either way one hopes that the Canadian Flag will be flapping over the fort built by the Brits after the Battle of the Plains of Abraham and now looms over that field…..occupied by that venerable Canadian Forces regiment the Royal 22nd ‘Van Doos”

#145 LP on 06.24.17 at 10:48 am

#139 MF on 06.24.17 at 9:50 am

Lost in all the discussion of the sniper’s record shot (and I’m not for one minute minimizing what a shot it was) is the fact that the target – the “kill” – wasn’t a mountain goat, a grizzly or some other prey, but a real, live human being. Yes, s/he was an enemy combatant; yes that person was a member of a deadly force for evil. Nevertheless, by reducing that person to the level of a painted bulls-eye we also diminish ourselves.

Through science and technology we manage to distance ourselves from the fact of a human life snuffed out in the blink of an eye. And congratulating ourselves…rah, rah, Canada…doesn’t seem to me to be the way to go.

And M.F., I’m not holding you responsible for this issue. I began to read from the bottom and came upon your post first.

#146 jay on 06.24.17 at 10:51 am

The Oracle of Omaha knows where the future of real estate is http://www.businessinsider.com/warren-buffett-berkshire-hathaway-us-homes-china-2017-4

#147 A Reply to #104 Livin Large on 06.24.17 at 11:09 am

“Right here, right out of the gate you make the fundamental error made by every zealot. You start from a preconceived notion that is false and work on from it.

“The only valid issue to consider with any investment is when you finally convert that instrument into cash, just how much cash do you get to keep … all that matters is how much you keep.

“Dismissing taxation rates is a second fatal error….”

See #116 A Reply to #210 Livin Large on 06.24.17 at 12:55 am.

I hope that all of your concerns have been addressed and resolved to your satisfaction (with my analysis above).

After some further thought, I have learned that my earlier blanket statements do, in fact, need to be modified as follows: If a taxpayer does not have any sources of income other than dividends, then a specified* amount of dividends can be earned tax-free, and therefore should not be put into a RRSP.

If anyone else spots anything else that might have been overlooked, please feel free to comment. Thanks.

*2016: BC, $45,282; AB, $45,282; SK, $44,601; MB, $0; ON, $45,282; NB, $40,492; NS, $29,590; PE, $31,984; NL, $0.

http://www.creditcardnerd.ca/tax-rates/2016/federal.htm

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

#148 Invictus on 06.24.17 at 11:13 am

#122 JWD on 06.24.17 at 3:41 am

My thoughts to. It does read like a fair well tonight.
It sounds like the Capo is tired and ready to leave.

Hopefully not.

#149 Livin Large on 06.24.17 at 11:15 am

1HCTD9, your TV purchase example is an interesting one. In the 90s the Sony Trinitron was easily the most expensive TV on the consumer market and it had an effective lifespan of about 15-17 years. The larger flat screen TV today indeed a much better picture but at that price point you’re talking a supermarket off brand on sale and that unit doesn’t have an effective lifespan anywhere near 15 years so, you’re going to replace it maybe twice as often. At least the Sony tube unit could be repaired, no one repairs flat screen off brand TVs today. Also, the sales tax was likely less on that Sony. So at best that flat screen is going to cost you twice as much in the end. Better picture yes, better over all not in the least.

When you look at food it gets even more ugly. Food is an after tax disposable income purchase and disposable incomes in general in the G20 nations have simply not kept pace with cost of living inflation. Unlike consumer durables that have significant retail margins and are therefor rather stable in pricing over a year, food fluxuates on a daily basis and has a serious FOREX vulnerability. Yes a falling $C makes a US produced head of lettuce more expensive on Monday.

In the end though, as China and India grow their middle classes the demand for things like meat increases and you know how demand effects price. India and rice are one great example. India froze all exports a couple of years back due to fears of food riots caused by shortages and price inflation. That really put the boots to rice prices around the non rice producing nations.

So, as a % of disposable income, same item to same item food prices have actually increased substantially in the last decade alone. Just look at the price of a loaf of supermarket bread produced here in ON. It almost doubled in 10 years. Has your disposable income doubled since 2007? Mine hasn’t and as far as I am aware it hasn’t anywhere in the G20.

#150 InvestorsFriend on 06.24.17 at 11:56 am

STUDY his response on RRSP vs margin account and learn

#116 A Reply to #210 Livin Large on 06.24.17 at 12:55 am PROVED that an RRSP with 40% tax on contribution and 60% on withdrawal still beat a margin account that had only 10% tax.

The math is surprising, even stunning but true.

And in the vast majority of cases you won’t get hit with quite 60% on withdrawal. Many people actually will have a lower marginal tax rate in retirement (not a goal to strive for by the way if it is because income is lower).

Mr. “A Reply” should use his real name or at least a screen name so that we may know an intelligent post is to follow from someone who actually does the math. Math matters.

Study his math, grab a calculator and replicate it. Learn.

Also the assumption of no inflation is not needed. Inflation would reduce the value of the final amount in either the margin account or the RRSP.

#151 Felix on 06.24.17 at 12:05 pm

“For that you likely need family, success or love. And a dog.”

Agreed, Mr. Turner. There are many delicious recipes for dogs, and I heartily recommend the lower fat alternative this provides for pork.

When it comes to good company and high IQ, of course, a cat is where it’s at.

#152 jess on 06.24.17 at 12:09 pm

ECB deemed Veneto Banca and Banca Popolare di Vicenza failing or likely to fail

23 June 2017

Decision a result of lack of capital
SRB concluded that conditions for a resolution action were not fulfilled
Banks to be wound up under Italian insolvency procedures

On 23 June, the European Central Bank (ECB) determined that Veneto Banca S.p.A. and Banca Popolare di Vicenza S.p.A. were failing or likely to fail as the two banks repeatedly breached supervisory capital requirements. The determination was made in accordance with Articles 18(1a) and 18(4a) of the Single Resolution Mechanism Regulation….”

https://www.bankingsupervision.europa.eu/press/pr/date/2017/html/ssm.pr170623.en.html

#153 crowdedelevatorfartz on 06.24.17 at 12:11 pm

Fete nationale brought to you “officially” by…..
Rene Levesque.

“In Quebec, June 24 (Saint-Jean-Baptiste Day), or National Holiday, is officially a paid statutory public holiday covered under the Act Respecting Labour Standards.[3][4][5] In 1977, an Order in Council by Lieutenant Governor Hugues Lapointe, on the advice of René Lévesque, declared June 24 the national holiday in Quebec…..”

Eventually, a generation or two from now, after 50-75 years of telling themselves they are a Nation ….the PQ propaganda machine will win the day and the Province of Quebec will seperate….. only to be marginalized, divided and eventually happily swallowed up by the USA.
Hence the US military “upgrades” at New York’s Artillery and Tank training ground, Ft. Drum, right on the Quebec border and only a half day M1 Abram tank ride from any strategic occupational military position in a new ‘foreign” country……..

But enjoy the party for now.

#154 InvestorsFriend on 06.24.17 at 12:21 pm

RRSP Math question

When I assume the 40% tax refund funds the tax at the end I do not get the RRSP beating the 10% tax margin account (but how did the margin tax get quite that low?) if my tax on withdrawal is as high as 60% (which hopefully would be rare).

I am not sure why my example would not work the same as the idea of putting the refund into the TFSA as “A Reply” did.

If I assume I only really own 40% of the RRSP due to a hefty 60% tax rate then my net tax on the 60% share of the RRSP that I funded works out to 33% (The 20% increment from 40% up to 60% divided by my 60% net contribution). I am not sure why “A Reply’s” scenario got the tax rate down below 10% but his math looks correct.

Perhaps this can be bait for Mark to go off and solve it or someone else interested in the math.

#155 crowdedelevatorfartz on 06.24.17 at 12:22 pm

@3143 chopstix

I personally know of 3 couples that have either pulled up stakes in the Lowerbrainland and moved to the East coast or are planning on it.
One to Newfoundland( sold their North Van House for 900k and built a new house on 5 acres for 250k) and are able to work from home(she e-works for a national firm. He is working part time)
Another couple sold their home and business(2 million) and moved to a 40 acre farm outside Lunenburg Nova Scotia and paid 500k for it. They both retired at 50
Third couple sold their house in Surrey (800k)are quitting their jobs here and moving to St John’s New Brunswick. Looking at house for 200k and he has a job waiting at the shipyard.

None are from the East and they all are very happy with their decision.

i plan on doing the same in the next 5 years or less.
I’ll miss a city full of elevators but I wont miss the gridlocked traffic, the incredibally stupid politicians and the LululemonStarbucksPCpainintheasspretentiousposercrowd

#156 InvestorsFriend on 06.24.17 at 12:35 pm

Math is Hard

I now notice that in Mr. A Reply’s example of 10% tax, that reduces the amount available at the end by 29%. So in comparison to tax paid a the end it’s really a 29% tax. A tax paid year by year is FAR more onerous than one paid at the end due to loss of funds compounded.

Anyhow my RRSP 60% withdrawal tax example still loses out to the margin account 29% equivalent tax since I am getting 33% tax so I have still not resolved why assuming the refund into TFSA beat my example of just assuming the refund reduced my net contribution to the RRSP.

Someone will have an explanation?

#157 Bill on 06.24.17 at 12:47 pm

Are people retarded or what!?
I bought a huge mixed industrial office for 2.275mil cash flow 170k.
Ocean view condos on top…. Replacement prolly 2.8mil
I look at Van and laugh my ass off…

#158 For those about to flop... on 06.24.17 at 12:58 pm

Pink Lemonade being sipped in Vancouver.

This one we thought was done and dusted,but the deal must have fallen through.

A poster named Colin, who has access to the Mls confirmed for me that they had reached a deal for 3.65 after shelling out 3.4. for this house in March 2016,which would have left them with a loss after expenses.

Anyway, when I went to pour Pink lemonade on my corn flakes this morning I saw an address that I recognized and there she is back up fighting to get their money back again.

There is a fair chance that it could still be on the market come October this year unless they are prepared to take a hit for a couple of hundred thousand and get on with their lives…

M43BC

5830 Alma Street, Vancouver

Oct 15:$4,398,000
Apr 1: $3,500,000
Change: – 898,000 -20%

5830 Alma Street, Vancouver

Oct 15:$4,398,000
Jun 22: $3,780,000
Change: – 618000.00 –

https://www.zolo.ca/index.php?sarea=5830%20Alma%20Street,%20Vancouver&ptype_condo=1&ptype_house=1&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMFQ1WQ==

#159 Mark on 06.24.17 at 1:08 pm

“Perhaps this can be bait for Mark to go off and solve it or someone else interested in the math.”

I’ve done the math. It mostly agrees with what you’re saying on the topic. You have to assume some pretty high returns on a leveraged margin account investment (versus assuming leverage is prohibited in a RRSP, which technically it is not — call options can be used!!) in order for the margin account to come out ahead.

A 10% tax rate on a long-term non-registered investment assumes a very long buy and hold period. Might be realistic for some, but not all.

#160 Wrk.dover on 06.24.17 at 1:09 pm

Many that land in this area of NS, buy the best of the virgin waterfront land for quadruple the cost of across the road from that but with a great elevated view land, and build big honking houses for the two of them.

They always build way over budget, and have nuts architectural ideas, that appeal to no one.

Soon they miss the grand kids, sell at a huge loss and go back to from where they came.

Others buy a used modest home and assimilate.

The smart thing is to listen to Garth and rent. No reason to FOMO here.

#161 Fake News on 06.24.17 at 1:11 pm

#156 crowdedelevatorfartz on 06.24.17 at 12:22 pm
@3143 chopstix

None are from the East and they all are very happy with their decision.

i plan on doing the same in the next 5 years or less.
I’ll miss a city full of elevators but I wont miss the gridlocked traffic, the incredibally stupid politicians and the LululemonStarbucksPCpainintheasspretentiousposercrowd

________________________________________

Great last word. We feel the same way. I have never seen a city where so many locals and newcomers feel “their poop does not stink” and everyone acts like the own the place. Good luck and good riddance. We will be gone in the next 12 months.

#162 Chico on 06.24.17 at 1:44 pm

#143 chopstix on 06.24.17 at 10:09 am

i’d like to hear more from people who’ve given up on BC and Ontario (golden horseshoe) and have moved to the Maritimes….i know one co-worker here who did…she and hubby couldn’t find anything worthwhile in lower mainland vancouver, even out to coquitlam…so they pulled up stakes and moved to New Brunswick.
sure the climate is not as nice as the west coast, but imo there is a far greater sense of community and unpretentiousness out there.
i always said: if Vancouver had the class/culture of Toronto/Montreal with the down to earthness and sense of community of those from the prairies and maritimes, then it’d make for one rocking city.

——————————————————————

We moved from Langley 15 months ago. We moved to northern Nova Scotia and the change has been fabulous for all involved. We are a family of 5. My wife’s work as a nurse provides her way more opportunities than in BC. My eldest son is entering auto tech. in Sept. and there are lots of jobs options for him. He’s already had job offers.

Shortly after we got here, my 19 year old had a friend from BC drive out here and they went to visit a fellow in Fredericton who had just moved out east from Langley with his family.

When we told our midwife, a year and a half ago or so, that we were moving to Nova Scotia, she guesstimated that at least 10 families she knew were in the process of moving here.

We moved here without knowing a soul, which many people here found hard to believe, until we told them what little future there was for our kids in the lower mainland.

I have started to consider ourselves “refugees” from BC, escaping slavery to greed/debt/stupidity.

We now live in a 2600 sq. foot home, brick, that has a replacement cost of 500 thousand in materials, that is in excellent shape, that we paid 150 for.

#163 Livin Large on 06.24.17 at 1:45 pm

I finally see the problem here and either I’m flat out wrong about how cap gains taxes are calculated or some of you are.

As I understand it, cap gains are your full marginal rate on approx 1/2 of just the gains. If this isn’t correct then I’ve screwed the pooch.

So, for one example that’s closer to my reality. A 20 something has $7000 to invest and buys simple equities or an RRSP…only an RRSP. Personally I think TFSAs are the greatest creation since sliced bread but the reality in Canada is that very very few 20 somethings actually have TFSAs. Silly but still true.

So, the 20 something is most likely to be in the 30% bracket starting out but slides up to 45% over time. Again, real life not hypothetical life.

The guy lays down his $7000 in an RRSP and gets $2,100 return which he naturally throws right into the same equities. Most likely spent it on some toy but let’s presume he isn’t totally naive.

The equities take about 10 years to double in share price and by then the guy has moved up at work and is now in the 45% bracket. After those 10 years he needs the coin in the RRSP and his equities are now worth $18,200 ($7000+ $2100) X 2. In his 45 % bracket, he’s netting out $10,010. Likely less because the withdrawl actually pushed his bracket but let’s just ignore that detail. It’s reality but it adds an unneeded varialble.

Or he put the original $7000 into the equities and waited the same doubling period and grossed $14,000. His original $7K isn’t taxable but his $7K in gains are but only $3,500 are taxed at 45% leaving him $1925 + $3500 + $7000 or $12,425 clear.

So, am I wrong?

I am presuming that the only material factor here is the individual’s marginal rate at the start and finish. Whether he’s 25 and 35 or 50 the arithmetic is still realistic considering what the vast majority of Canadians do.

I have no doubt that this 20 something could and maybe should have known better but the reality of the real world is that folks normally don’t act perfectly.

#164 For those about to flop... on 06.24.17 at 2:12 pm

Don on 06.23.17 at 9:48 pm
Hey Flop, Pink Pollen post #9 was a severe belly flop. I couldn’t believe my eyes. Like WUL said you should see a creep from the outer limits of the GVRD back to Dunbar area. Would be interesting. Glad you are back at work!

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

Hey Don,how you been buddy?
I forgot to thank you for checking up on me a couple of times but I am ready to reward you by hopefully helping you have a laugh at this one.

They paid 7m in Feb 2016 and a billionaire that gets a mention on here occasionally gets a mention in the listing.

It is only assessed at 4.6 and that is after the bumper 2016 one that added millions to a lot of other properties in the area.

As I stated last night this is another older house that plays up the view of the Lions Gate bridge and anyone who has deep enough pockets to be shopping in this price range is spoiled for choice at the moment.

The guy next door is probably having a laugh…

M43BC

775 King Georges Way, West Vancouver

Oct 26:$8,780,000
Jun 22: $8,488,000
Change: – 292000.00 -3%

https://www.zolo.ca/west-vancouver-real-estate/775-king-georges-way

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyOUFUSw==

#165 souvereigninternational on 06.24.17 at 2:19 pm

Excellent Post. I decided to enjoy a little hiatus from daily reading probably about 18 months ago :) . Pop in once in a while but have not read comments. Everything seems to be going right on track with my previous predictions of real estate decline in Toronto. This blog will be busy saying I told you so 2019-21 when decline will really rear it’s ugly head. Average suburban houses in Mississauga should not be selling for 1-1.3M. Store looks great on Instagram Garth. Greetings.

#166 InvestorsFriend on 06.24.17 at 2:24 pm

RRSP Math is hard

Okay in my scenario of assuming the refund funds part of the RRSP I only have $600 per thousand of my own money tied up. In that scenario an RRSP does NOT beat the $600 in margin account if RRSP withdrawal tax is 60%. My scenario leaves me with 7% less money than the 10% tax on margin account paid annually scenario.

Most of the time it will beat but not when the withdrawal tax gets to 60%.

“A Response” gets it to beat by having that extra $400 in a TFSA. He is right his scenario beats the $1000 in margin at his 10% tax rate. He beats by about 12% as he proved.

My analysis did not depend on existence of TFSA. I can show that RRSP beats margin account unless tax on withdrawal is significantly higher. Using the 10% margin tax example, RRSP with 40% refund ties the margin result at 57% RRSP withdrawal tax and beats it below that. I am not using TFSA in my example as let’s say I assume I already maxed that out with other money or we are talking years it never existed.

This was an interesting math test this morning.

Thank you to “A Reply” who really got me thinking here and who at bottom line proves that RRSP investing beats margin investing for most people. Beats it hands down in most cases. Beats TFSA when the withdrawal tax rate is less than the refund rate.

#167 InvestorsFriend on 06.24.17 at 2:32 pm

Livin Large at 164

Your post looks correct. Do not do RRSP for a 30% refund if you expect to be in 45% tax band at withdrawal in ten years. Things work better if withdrawal is 40 years away.

Never do RRSP for like a 25% or 20% refund.

The thing is do the math, the answers can often surprise.

RRSP is for retirement money. Treat it as UNTOUCHABLE until age 71 if you want to get the full benefit.

#168 Rexx Rock on 06.24.17 at 2:34 pm

Check out The Road to Ruin by Jim Rickards.You think again about diversified balanced portfolio.Nothing is safe,the central banks can cause bank runs like Cypruss and Greece.Scary stuff that is possible can happen here.Bail in or bail outs.Good times!

#169 Cez on 06.24.17 at 2:59 pm

Dental mortages. Dr. Handa’s Burlington clinic health fiasco with unsterilized equipment linked to his uncle Khanna (Metro Financal) the disgraced mortgage broker. https://www.fsco.gov.on.ca/en/about/enforcement/enforcement-online/Documents/2015-dec-1058-Khanna-Metro.html

#170 45north on 06.24.17 at 3:05 pm

Asterix: For some people living in King City, a massive real estate crash is already happening.
June 2016 = 1.27M$ (average price)
Oct 2016 = 1.75M$
Mar 2017 = 1.75M$
Mid- June = 1.09M$

that got my attention. So the time to sell was October 2016 to March 2017. You can commute to Toronto ( 44 minutes to 215 Huron Street, Saturday at 15:00 ). If you can work from home one or two days a week then it’s quite doable.

#171 waiting on the westcoast on 06.24.17 at 3:11 pm

#126 Whaaaa on 06.24.17 at 6:18 am says “boo hoo. All that cheap money from Poloz was meant to be invested in companies that produce products and jobs, you know, those things that make an economy. It wasn’t meant to be used to sit dead in a house. Take the hint from your bankers, quite borrowing money and go get yourself a real job.”

The emergency rates were provided and people did what they have seen best use for. The fact that people invest in real estate is more to do with government policy that favors it. If the government had not given so many benefits to invest in real estate, more people would invest in companies.

No need to attack a guy who is trying to make it (even in real estate).

#172 waiting on the westcoast on 06.24.17 at 3:16 pm

Realtors are our friends, family, and neighbours.

I have seen a lot of frustration directed at Realtors on this blog. Never understood why people begrudge others’ success.

I missed taking advantage of the run on housing because I witnessed the carnage in the US firsthand and assumed it would happen here soon after as well. I was wrong. Others made good money over these years. Kudos to them. I hope they sell and take profits.

I still believe the market is overvalued and will wait for a correction. I could still be wrong. Don’t think so but it’s been a long wait so far…

#173 Livin Large on 06.24.17 at 3:22 pm

Thanks, IF. If I was off then a lot of my planning was screwed.

BTW, margin accounts are a terrible baseline to use when calculating “what if’s”.

I have never tried to claim that RRSPs were necessarily a bad instrument, just that the sales pitch on RRSPs from the [email protected] has always used the “start early” starting point and the real financial strength of RRSPs depends on the spread of the marginal bracket between deposit and withdrawal being rather small. That spread isn’t what 25 million Canadians can expect nor want from a career.

In most instances of real life in Canada capital gains and in some instances dividends will deliver a better after tax living in the end.

If you’re starting from scratch at age 45 like sooooo many Canadians then I’d likely agree with the idea of maxing RRSP contributions and borrowing to do so,if needed…which it almost certainly will be if your lifestyle leading to 45 didn’t leave savings room.

#174 Livin Large on 06.24.17 at 3:33 pm

Thanks, IF. If I was off then a lot of my planning was screwed.

BTW, margin accounts are a terrible baseline to use when calculating “what if’s”.

I have never tried to claim that RRSPs were necessarily a bad instrument, just that the sales pitch on RRSPs from the [email protected] has always used the “start early” starting point and the real financial strength of RRSPs depends on the spread of the marginal bracket between deposit and withdrawal being rather small. That spread isn’t what 25 million Canadians can expect nor want from a career.

In most instances of real life in Canada capital gains and in some instances dividends will deliver a better after tax living in the end.

If you’re starting from scratch at age 45 like sooooo many Canadians then I’d likely agree with the idea of maxing RRSP contributions and borrowing to do so,if needed…which it almost certainly will be if your lifestyle leading to 45 didn’t leave savings room.

One of the myths I mentioned yesterday is that at retirement suddenly your income needs drop and so your marginal rate. It just doesn’t happen except in very rare cases. Nobody I know has ever seen a real drop in their retirement income requirement. The mortgage is usually gone in the past but that too looks like it might no longer be the case. Other spending drops but most people still need cars and just about everything else they consumed in their working lives and those just cost many times what they cost 40 years ago and not likely going to drop in price any time soon. A used Carolla was $1,200 in 1980 but try to find one under $15K today.

Inflation has pushed the cost of living far faster than the basic personal exemption has risen so I doubt any average Canadian will choose to live on an income that is going to deliver a much lower marginal rate than the day they earned their last employment dollar.

#175 Waiting4TheCrash on 06.26.17 at 9:54 am

Garth,

Started reading your blog about 1.5 years ago as my husband and I felt like we were the only one’s not buying into real estate because my hubby thought pricing in Toronto was ridiculous. Many times we felt stupid for not buying in 2012 when we first got engaged and were not willing to spend our entire savings on a sh*tty bungalow in Scarborough. Your blog kept my spirits up and drove us to keep waiting for either a house we loved and didn’t mind living in for the next 20 years or a correction. Instead of investing in a home we invested in our family and now have 2 beautiful boys aged 3 and 1. Whereas our friends invested in houses and waited to have babies and a lot of them are struggling with trying to conceive now.

Your last paragraph sums it up for me! We can always find housing (We have been renting out a 4+2 bedroom 2 story detached house right by the Scarborough Bluffs for $1800/month since 2012) but can’t easily have kids. We are both 32 years old now and make $200K combined. So we have been able to save a lot and invest a good amount. Let’s just say we invested a good chunk into FB when it was $22/share and basically have our down payment with that stock alone. We feel free and happy being debt free. So so happy we weren’t the last fools to buy. Every other house on our street is up for sale and this past weekend drove around to see empty open houses.

Thank you for your blog! Yes we could have made a ton of money if we flipped houses but hindsight. My supervisor at work was doing this and probably made a ton as he was flipping 5-7 houses a year but right now currently has 8 properties and is sh*tty bricks. So at the end who knows how much he will actually have made or lost. Not even sure how you get 8 mortgages….

This was my first comment on your blog and just wanted to say thank you for your advise and keep it coming. When everyone and their mom was telling us that we had to spend min 1 million on a sh*tty house because it was just up and up from here, You kept us grounded!