The trouble with humans

Let’s start off this post with a picture, below. You know, a thousand words.

In this case, those words say, ‘well, this was inevitable.’ Two years ago the mushy bits outside of Vancouver were hot with speculation, greed and house lust. Ground Zero could well have been Richmond, where non-descript suburban houses that wouldn’t garner a second glance in, say, Saskabush became multi-million-dollar palaces.

That started to change in early 2017 with soggy sales and sticky prices. Interest rates headed north, making it obvious the market must correct. And it began. Then the coup happened in Victoria, as the Dippers and Greens overthrew the party with the most votes and launched a campaign to destroy the market instead of letting it unwind.

So here we are. Extra taxes for those in nice hoods, with business-use condos, with second homes, cabins or cottages and a special dose for non-residents, whether they’re from China, Chicago or Cowtown. The result was predictable, and predicted. And that brings us to the picture, courtesy of Zolo.

Yes, prices are down. Seriously. But look at sales. Also tumbling.

Remember all that political claptrap about making houses ‘more affordable’? Well, here you go. Prices off 20% in a month and almost 30% in a quarter. And where are the buyers? Afraid to offer, of course, for fear of loss. It’s human nature. We crave what rises. We shun what falls. Meanwhile government collects more, recent buyers go underwater, and the province gains a rep as somewhere reasonable people… rent.

Prices tumble, but buyers don't rush in

Click graphic to enlarge

Okay, it’s dark and cold now and November sucks. But here are five things to warm your cockles – year-end tax strategies! I feel aroused just writing about them.

Adios bow-wows.
The end of the year brings an opportunity to sell all those dog equities your BIL told you were sure things. You know the ones – junior mining stocks, Peruvian gold miners and cannabis cookie frachises.

Remember that 100% of the losses on this junk can be deducted from the gains made holding quality ETFs. But the deal needs to be done by the end of the year, which means a sale must occur by December 27th. Do not make the classic Guy Mistake of holding onto one of these pooches waiting for it to rise and erase your sin. The odds are at least 50% that it’ll get worse and she will never forgive you. So, cleanse.

Raid the TFSA, if you must
The benefits of having a fat, swelling TFSA have been spelled out here with stultifying regularity. You know, tax-free growth, retirement income without reducing government pogey, total flexibility, no withholding tax. But sometimes life happens and you must dip into the cookie jar. If that looks likely, do it by the end of the year. Then all of the TFSA withdrawal can be replaced during 2019, plus the new contribution of $6,000. If you wait until after December 31st to remove the funds, they cannot be put back until 2020. We will be angry with you.

Use your spouse
A proven strategy to slice tax in a household where one person makes more than the other is the spousal loan. When you give a less-taxed spouse money to invest the gains are attributed back to you, taxed at your rate. But if you loan him/her the funds, no attribution. So always try to make the person who earns the least the main investor.

The rate you must charge is a ridiculously low 2%, and the interest is deductible in your spouse’s hands. So, it’s like free money. But with interest rates on the rise in 2019, it’s highly likely this minimum will increase. Therefore, do it now. The crazy-low rate will be locked in for the duration of the loans. Unlike your HELOC.

Use your kid
The easiest 20% your family will ever earn is by putting money into an RESP – a registered education savings plan. That comes in the form of a federal grant on the first $2,500 you contribute annually. So do it by the end of the year to collect the windfall. Then do it again in early 2019 to collect more.

Delay the raid
Thinking of buying a house and using the $25,000 tax-free withdrawal from your RRSP? Because this needs to repaid into your retirement plan in 15 equal annual installments, if you wait until January you’ll gain a full extra year before any repayments are due. Also remember if you want to employ the Home Buyer’s Plan in a few months, dump the funds into an RRSP now, wait for the tax refund to materialize, then use both for the down payment. Bigger deposit, less mortgage.

By the way, I hear Richmond’s a bargain. Man up.

119 comments ↓

#1 Howard on 11.12.18 at 2:34 pm

Garth I’d be a bit weary about using Zolo’s numbers as they sometimes fluctuate significantly from day to day. I don’t think they update it at a set, regular time every day, and they might get the odd data dump for several days all at once.

Still, they get the general trend right and yes the West Coast is looking hideous.

#2 Ustabe on 11.12.18 at 2:37 pm

Sterling, workable, sound advice.

Thanks, forwarding this to the (adult) kids.

#3 bob on 11.12.18 at 2:50 pm

By the way, I hear Richmond’s a bargain. Man up.

Seriously? A 3-bedroom detached house clocks in at $1.2 million. While it has dropped 24% since last year, it is still ludicrously unaffordable, by any measure. Furthermore, 4 bedroom houses are actually up since last year and clock in at 1.8 million. It seems this cataclysmic “drop” is driven mainly by a change in inventory. Many detached houses leaving the market and being replaced by 1 or 2 bedroom condos.

#4 Shawn Allen on 11.12.18 at 3:08 pm

Raid the TFSA?

If so, yes, do it before year end.

The easy ability to raid the TFSA is what will ruin it as a retirement savings vehicle for a chunk of the population.

Most who raid will never find the money to catch up. (New saying… “Savers save, and spenders spend” … trade mark pending)

Meanwhile RRSP money, at least aside from Home buyer withdrawals, is generally treated as untouchable. In most cases whatever goes in stays in.

And thank the Nice Lady at the Bank for making that happen for a lot of people, She does not get a lot of thanks on this blog.

Money actually invested even with an outrageous 2% fee always buys a lot more comfort in retirement than does money never ever saved. Just because there may be better choices than the [email protected] the bank does not mean that those putting money in RRSPs at the bank should be insulted as many here are wont to do.

#5 MoneyDriven on 11.12.18 at 3:23 pm

Garth,

There is correction happening for sure but that graph is bigly misleading!

The AVERAGE price on the left is dropping because of the sales mix is changing on the right. Notice there is a lot less houses in the market as oppose to previous months!

#6 AGuyInVancouver on 11.12.18 at 3:28 pm

I’d be curious Garth how you rationalize your denial that Foreign Buyers were a problem in Metro Vancouver, with your gloating over Richmond’s (ground zero for foreign buyers) falling prices?

#7 crowdedelevatorfartz on 11.12.18 at 4:03 pm

It will be interesting to see how the Real Estate industry tries to put a positive spin on a slowly sinking ship over the next 6 – 12 months of interest rate increases and NDP ( Dipper) taxes.
“The Titanic isn’t really sinking….Its just found a new place to dock at the bottom of the ocean….”

All while the citizens of BC cheer on the latest NDP imposed rules.
“Horgy Porgy pudding and pie. Kissed the Realtors and made them die…..”.

Methinks a BC Provincial election will be an option in the not too distant future once the referendum results are in for changing how votes are tallied and the Greens figure they can do better than supporting an NDP minority coalition…..in a slowly unwinding economy.

God help us all

#8 ex-Van on 11.12.18 at 4:07 pm

Well something is wrong with the foreign buyer narrative isn’t there? I mean the narrative has always been that there is an unlimited horde of wealthy Chinese out there ready to vacuum up every bit of available real estate. It was never “the Chinese will buy until the price goes up 15%, and then they’re done”. The ravenous Chinese are always supposed to be out there, taking up any available supply — and yet, sales are down. Hmm. Something is not right.

#9 mj on 11.12.18 at 4:18 pm

hi Garth, how old do you have to be to start a tfsa

Old enough to buy weed, but smarter. – Garth

#10 Steven Rowlandson on 11.12.18 at 4:31 pm

Richmond home prices are no bargains and a real man does not live beyond his means. This requires good judgment and discipline. Home prices still have a long way to drop before they are affordable.

#11 Paul on 11.12.18 at 4:35 pm

Quick poll:

What’s in your TFSA?

Full disclosure: I’m 67% XAW and 33% XIC.

It would be interesting (and educational) to hear what some of the veteran investors that frequent this site hold.

#12 mike from mtl on 11.12.18 at 4:39 pm

Remember that 100% of the losses on this junk can be deducted from the gains made holding quality ETFs.
//////////////////////////////////////////////////////////////////

Only if held in taxable non-reg.

Assumed. – Garth

#13 dakkie on 11.12.18 at 4:41 pm

California Real Estate Sales Slump Due to Rising Prices and Rising Interest Rates as US Housing Bubble Nationwide Gets Closer to Popping

http://www.investmentwatchblog.com/california-real-estate-sales-slump-due-to-rising-prices-and-rising-interest-rates-as-us-housing-bubble-nationwide-gets-closer-to-popping/

#14 Kilt on 11.12.18 at 4:51 pm

#5 MoneyDriven

Yes the chart is misleading. You will see the price drop significantly when your average sees a larger proportion of condo sales. But….
Factoring that in, sales in Richmond were horrible. If you go to REBGV, you can find that sales of condos are off 30% YTD from 2017. For detached it is above 40%.

https://www.rebgv.org/sites/default/files/REBGV-Stats-Pkg-October-2018.pdf%20

Prices are sticky. Demand is there, but it won’t kick in until prices drop to the affordable level. BC is stagnant. And in some hoods, prices are dropping to the point where you are starting to see a bit of value (Not in Greater Vancouver). If you continue to see prices come off 10 to 20% from here, you may see an uptick in sales. This will make the realtors happy.

I see another great day in the market. Be interesting if we flat line here for a while or drop below our October lows.

Kilt.

#15 Linda on 11.12.18 at 5:08 pm

The ‘cone of shame’ looks like it was transformed into a short term rental by the cat:)

Lower prices there may be, but does one truly wish to live in Richmond? Is it possible some of the house lusty are awaiting lower prices in more desirable locations before they make their move? Even if that is the case, trying to qualify for a mortgage may prevent some who would like to buy from doing so.

Garth, I know you advocate taking CPP asap. However, for those who have RRSP’s but whose only DB pension would be CPP, would it not be better to draw down the RRSP to age 65 & then start unreduced CPP? I’ve read articles suggesting that this is a good retirement strategy. Many of those articles suggest waiting to age 71 to maximize the benefit. Given that people are living longer, do you still think taking CPP asap is the best choice?

#16 Dave on 11.12.18 at 5:12 pm

I live in Richmond and real estate is going down hard, with no bottom in sight. Crack shakes peaked at $1.8 to $2M, now are available at $1.2 and still no sale. We are headed below $1M, just need time and interest rates to increase.

#17 Frank The Tank on 11.12.18 at 5:14 pm

I love me some TFSA. It’s my fsmily’s saving vehicle of choice, especially considering my wife and I have solid DB pensions with our employers.

Oh and I just might “man up”. Considering an upgrade. I like what’s going on, especially for a long, long term view.

#18 Damifino on 11.12.18 at 5:21 pm

#7 crowdedelevatorfartz

About 2 weeks to go until the BC ‘mail-in’ referendum is over (in the midst of rotating postal strikes). So far only a pittance of ballots have been returned.

They say in this type of voting, the majority of ballots come in sooner rather than later. Thanks to rounding, some communities are so far reporting returns of 0%.

Isn’t that swell? The dippers didn’t specify a minimum return rate so it looks like this one could be decided by perhaps 3% of the voters. Just pathetic.

We worry so much about making the votes of BC residents “count” and they respond in turn by showing themselves too lazy to answer two question and drop their “preference” in a mailbox.

#19 Deplorable Dude on 11.12.18 at 5:21 pm

#9 ‘hi Garth, how old do you have to be to start a tfsa’

Old enough to buy weed, but smarter. – Garth

——————-

Depends on the province. My 18 yr old son tried to open one here in BC in August.

No can do….he has to wait another year until he is the ‘age of majority’, 19 in BC…..which really sucks as he is gonna miss this recent market drop.

Sometimes random rule differences between provinces really get my goat…..

#20 Where's The Money Greedeau? on 11.12.18 at 5:36 pm

Missed yesterday’s post and want to add some bedtime reading:
http://www.free21.org/the-presidents-company-worlds-largest-war-industry/?lang=en
All about the money……

#21 Albertaguy in AB on 11.12.18 at 5:38 pm

Heres what 399 (asking) gets you in YYC…

https://goo.gl/5YZKmz

#22 Adam on 11.12.18 at 5:40 pm

#19 Deplorable Dude on 11.12.18 at 5:21 pm

No can do….he has to wait another year until he is the ‘age of majority’, 19 in BC…..which really sucks as he is gonna miss this recent market drop.

Sometimes random rule differences between provinces really get my goat…..

——

You’re misinformed. The TFSA is a federal program – it’s 19 years old everywhere.

#23 Where's The Money Greedeau? on 11.12.18 at 5:42 pm

Developers see the writing on the wall:
https://vancouversun.com/news/local-news/free-mortgage-deal-attracts-buyers-to-langley-development-despite-condo-glut

Trying to find suckers….
Read some of the comments of this poorly built development…..

#24 FOUR FINGERS WATSON on 11.12.18 at 5:59 pm

#11 Paul on 11.12.18 at 4:35 pm
Quick poll:

What’s in your TFSA?

Full disclosure: I’m 67% XAW and 33% XIC.

It would be interesting (and educational) to hear what some of the veteran investors that frequent this site hold.
………………………………

CM, BNS, NA, and CPG. All dividend payers,4.5-5%, all purchased on sale, all dividends dripped quarterly. No fear.

#25 Steven Rowlandson on 11.12.18 at 6:04 pm

Trying to find suckers….

That is the big problem isn’t it. Suckers may be born every minute but eventually people smarten up, face reality or the supply of suckers gets too small to gratify the cravings of those who try playing a real life monopoly game… There are real serious consequences to playing such a game.

#26 Cdn Mom on 11.12.18 at 6:08 pm

#22 Adam on 11.12.18 at 5:40 pm

#19 Deplorable Dude on 11.12.18 at 5:21 pm
No can do….he has to wait another year until he is the ‘age of majority’, 19 in BC…..which really sucks as he is gonna miss this recent market drop.
Sometimes random rule differences between provinces really get my goat…..
——
You’re misinformed. The TFSA is a federal program – it’s 19 years old everywhere.

***********
Incorrect. I took both of my kids to open TFSAs in Ontario when they turned 18.

#27 Capt. Serious on 11.12.18 at 6:22 pm

#11 Paul on 11.12.18 at 4:35 pm
Quick poll:

What’s in your TFSA?

Full disclosure: I’m 67% XAW and 33% XIC.

Mine is 20% emerging markets equities, 70% world developed markets equities, 10% fixed income (mainly for rebalancing purposes). This is part of a portfolio that also includes a non-registered account and an RRSP account, so the TFSA tends to be for non-Canadian equities. And no, I don’t have a total exposure to emerging markets that is > 20% of my equities — EM is 15% of the equities overall.
Anyway, I don’t think there is one right answer for what to have in your TFSA, because that depends on your other accounts, your goals, tax situation, and time horizon.

#28 Deplorable Dude on 11.12.18 at 6:22 pm

#22 Adam……You’re misinformed. The TFSA is a federal program – it’s 19 years old everywhere.

—————

Nope….depends on ‘Age of Majority’ which varies across Canada.

https://www.ratehub.ca/investing/tfsa-rules

#29 Shawn Allen on 11.12.18 at 6:32 pm

Sharing the Pain With the Tax Man

#12 mike from mtl on 11.12.18 at 4:39 pm
Remember that 100% of the losses on this junk can be deducted from the gains made holding quality ETFs.
//////////////////////////////////////////////////////////////////

Only if held in taxable non-reg.

Assumed. – Garth

***************************************
A dollar gained or lost in A TFSA is a dollar lost or gained after taxes. No sharing with tax man.

In Taxabel account, Taxman shares some of the gain or loss.

In RRSP taxman is, in substance, your silent partner. He bought-in via those refunds. Example $100k in RRSP might be worth $70k after tax. Lose it all and you lost $70k not $100k and the government effectively lost $30k. Rejoice, you can lose money for the tax man. Math.

#30 Tbone on 11.12.18 at 6:38 pm

#19

Why not just open a brokerage account and buy up those bargains
now . You need to be 18 years old to open one up .

Not everything has to be in a tsfa . Don’t know if you can flip them into a tfsa later . The boss can advise on this .

#31 Wrk.dover on 11.12.18 at 6:52 pm

#102 Keen Reader on 11.12.18 at 8:37 am

————————————

You missed my point about cannon fodder and big money, far behind the line of fire.

#32 millmech on 11.12.18 at 6:57 pm

Went out home hunting Saturday, over 200 open houses to choose from in the Fraser Valley, one nice place priced just over 520 brand new everything, bigger unit not as new stuff priced to move at under 400k. No offers on either lots of price reductions.
Realtor showed a new build condo to me and the guy selling has four others for sale in the same building.
Going to wait a while as 50% price drops by next spring my realtor says, only suckers buying now to catch a falling knife.

#33 PastThePeak on 11.12.18 at 7:15 pm

#22 Adam on 11.12.18 at 5:40 pm
#19 Deplorable Dude on 11.12.18 at 5:21 pm

No can do….he has to wait another year until he is the ‘age of majority’, 19 in BC…..which really sucks as he is gonna miss this recent market drop.

Sometimes random rule differences between provinces really get my goat…..

——

You’re misinformed. The TFSA is a federal program – it’s 19 years old everywhere.
+++++++++++++++++++++

It only takes 5s of searching to find the right answer.

Access to a vast amount of information is at people’s fingertips but they would rather just make stuff up “cause they think so”…

#34 BC_Doc on 11.12.18 at 7:16 pm

#19 Deplorable Dude on 11.12.18 at 5:21 pm
#9 ‘hi Garth, how old do you have to be to start a tfsa’

Old enough to buy weed, but smarter. – Garth

——————-

Depends on the province. My 18 yr old son tried to open one here in BC in August.

No can do….he has to wait another year until he is the ‘age of majority’, 19 in BC…..which really sucks as he is gonna miss this recent market drop.

Sometimes random rule differences between provinces really get my goat…..

-//////////////////////////////////////////////

When my teenagers had money from employment they wanted to invest, we opened an investment account “In Trust For” them. I helped them with setup and oversight. At age 19, we moved everything over “in kind” to a TFSA. I believe a small amount of taxes from the ITF account may have been attributed back to me as their parent, but this wasn’t a big deal— just the cost of teaching them to fish.

Cheers,

BC Doc

#35 baloney Sandwitch on 11.12.18 at 7:33 pm

Use your HELOC’s wisely. Take out couple of hundred K’s and buy equal amounts of enbridge, transcanada, bell, royal and scotia. The divy will cover the interest plus interest is deductible and you get the dividend tax credit. Surprised you did not mention this Garth. A little bit of wise leverage goes a long way.

#36 windsor guy on 11.12.18 at 7:39 pm

Has the TFSA contribution jumped to $6000 for 2019?

#37 crowdedelevatorfartz on 11.12.18 at 7:41 pm

@#18 Damfino
“We worry so much about making the votes of BC residents “count” and they respond in turn by showing themselves too lazy to answer two question and drop their “preference” in a mailbox.”
++++

True enough.
And…..you only have to answer one question if you pick

“First Past the Post”

:)

#38 acdel on 11.12.18 at 7:48 pm

Anybody out there willing to answer this or have gone through this before.

Is it worth dumping a LIRA into an RRSP?

Thanks.

#39 acdel on 11.12.18 at 7:49 pm

Felix, you are torturing that poor dog!

#40 Sebee on 11.12.18 at 7:57 pm

Plenty more left to go down, at least another 25%. We’re back now to what…2016 levels? If memory serves me right the ratios to average earnings were out to lunch even back then.

#41 yvrmc on 11.12.18 at 8:25 pm

Haha wow , I just did Zolo listings for Calgary. The first condo listing for the least expensive condo was $90,000 built in 2002… in North Van its a hunk of junk for $349,000 built in 1972 ….. something reallllllllly wrong here …..

Stopped snowing there yet? – Garth

#42 Lower Mainland Condo Price Realities on 11.12.18 at 8:50 pm

Boom and Bust Market Conditions Have Returned – YAHOO!!

25 years ago it was hard to sell a 2br 2 bth 1, 200 sq. ft condo in the $ 120, 000’s in the Fraser Valley

20 years ago it was hard to sell a 3 br 1.5 1, 300 sq. ft townhome in the 130, 000’s

15 years ago it was hard to sell a 1 br+den condo 750 sq. ft condo in the 130, 000’s

Today the market is being oversupplied with new condos of every size everywhere you look,i nterest rates are climbing daily and buying power is eroding daily. Financing is being shoveled off the back of trucks to try to entice fools to buy in.

During past boom and busts – these things become deadweight AND eat a hole in people’s finances – whether owned by investors or occupants.

Condos are the easiest things to buy – AND THE HARDEST THINGS TO SELL….

#43 Shawn Allen on 11.12.18 at 8:50 pm

Just Don’t Tell the wife

#35 baloney Sandwitch on 11.12.18 at 7:33 pm advises:

Use your HELOC’s wisely. Take out couple of hundred K’s and buy equal amounts of enbridge, transcanada, bell, royal and scotia. The divy will cover the interest plus interest is deductible and you get the dividend tax credit. Surprised you did not mention this Garth. A little bit of wise leverage goes a long way.

************************************
That probably would work out. But I find the thought of borrowing $200k to be most uncomfortable. And I am in a position to do.

Most men, if they ask their wife what she thinks will soon be disabused of this little idea.

Dividend stocks can certainly go down, especially as rates rise. It’s one thing to be down 20% on your own money. I don’t want to find out what being down 20% on borrowed money feels like.

I don’t like the risk reward. The return on anything safe enough to put large amounts of borrowed money into seems too small to justify the risk.

#44 mike from mtl on 11.12.18 at 8:59 pm

#29 Shawn Allen on 11.12.18 at 6:32 pm

In RRSP taxman is, in substance, your silent partner. He bought-in via those refunds. Example $100k in RRSP might be worth $70k after tax. Lose it all and you lost $70k not $100k and the government effectively lost $30k.

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

I know that, just pointing out in case it wasn’t clear that claiming capital loss(es) only applies to taxable accounts, not RRSP, RESP, TFSA or like stuff.

btw, that example, 100k is still your own (most likely) after tax income from saving. A 100% loss of your own dollars regardless of account is still a 100% loss gooberment or not.

Most of my personal portfolio is in non-reg because for me the taxation of RRSP doesn’t make sense. Also I favour that sort of flexibility.

#45 Debtslavecreator on 11.12.18 at 9:13 pm

38-you cannot roll a vested lira / commuted values from a lira to rsp
If you have an ontario lira you might qualify for wothdrawing with standard taxes /T4 slips certain amounts each year from an ontario lira
If u are 55 or older and your previous ontario DB or DC pension allowed pensions at 55, you should be allowed to do a one time 50% unlocking which means you can take the lira and split 50% in a LIF with required min and max taxable withdrawals required , and the other 50 % can be put into your personal RSP
So your age if 55 or older and if your lira is an ontario plan you might qualify
Check FSCO pension forms section
Look at all angles before doing anything and run it by your CPA

#46 millmech on 11.12.18 at 9:16 pm

#8 Ex Van
Time for another Helicopter full of “foreign” buyers to fly over and hype up the market again.
Another little tidbit my realtor let out on Saturday was that the smart realtors do not put prices on the glossy brochures due to the rapidly changing(down) prices on listings. This would require new brochures every week, it is dropping that fast.

#47 Felix on 11.12.18 at 9:22 pm

This pic is a great example of a high IQ cat attempting to go even further than in the photo from Nov 7 to detect any semblance of brain activity in a canine, this time using an echo chamber to magnify any signals and at least give the mutt the benefit of the doubt that it might be slightly smarter than a centipede.

Alas, there is once again no sign of any animal intellect. So the bright cat is making use of the mutt as best he can, as a scratching post.

A fine scientific deduction of what dogs are actually good for.

#48 young & foolish on 11.12.18 at 9:27 pm

“I don’t want to find out what being down 20% on borrowed money feels like.” — Allen

I’m afraid plenty of people will find out soon enough.

On mortgages, for sure. – Garth

#49 Shawn Allen on 11.12.18 at 10:01 pm

Oh Dear, RRSP Tax Math

Mike from Montreal said:

btw, that example, 100k is still your own (most likely) after tax income from saving. A 100% loss of your own dollars regardless of account is still a 100% loss gooberment or not.

Most of my personal portfolio is in non-reg because for me the taxation of RRSP doesn’t make sense. Also I favour that sort of flexibility.

********************************
With greatest respect RRSP tax is much different than it appears.

$100k in an RRSP usually costs $60 to at most $70k of your own savings after deducting the refund. Consider the refund to be the government buying in to own 30 to 40% of “your” RRSP which they will usually get back eventually as tax on withdrawal. They don’t just get back the refund. They take back usually close to their 30% share or more.

I have explained this so many times already… If you are interested and willing to look at the math google my past comments on this blog.

RRSPs (like all assets) should really be valued on an after tax basis which means on a proper net worth statement you should shave off 30 to 40% for tax. RRSP investors are poorer than they think. But then they invested way less after tax dollars into the RRSP than they think as well.

#50 MF on 11.12.18 at 10:33 pm

I came across this chilling video depicting the casualty rates of ww2 through the use of charts:

https://www.youtube.com/watch?v=DwKPFT-RioU&t=989s

I know remembrance day has passed, but this video really shows the level of death and destruction of ww2 (and war in general).

Lest we forget.

MF

#51 err.. zolo? on 11.12.18 at 11:11 pm

I can typically follow your arguments, and I am often in agreement.

But if you put in a graph from zolo, all my confidence in what you are saying flies out of the window.

The nonsense stats I have seen come from that site, made me disregard everything from there, a long long time ago.

I’m pretty sure I’ve seen that site report -90% price changes, and +800% price changes as well. Completely off the chart, more like a random number generator.

#52 Ponzius Pilatus on 11.12.18 at 11:15 pm

DELETED

#53 Long-Time Lurker on 11.12.18 at 11:29 pm

#41 Bottoms_Up on 11.10.18 at 4:17 pm
We may actually be thinking ahead with this small nuclear reactor program:

https://www.nrcan.gc.ca/energy/uranium-nuclear/21183

>That was interesting. Thanks for posting it.

#9 Inheritance on 11.10.18 at 2:05 pm
I need some help, my gramma just left me 125k with a note attached that said the money is to be invested for your retirement don’t blow it cause I’m watching from above. I’m 26 and my tfsa is maxed with all bank stocks. Garth says only buy etfs, so I’m thinking do I buy 4-5 different ones, can someone please recommend the 4-5 to buy Tuesday am
Thanks
Dylan

>Learn more or find a pro to help you. You’re going to trust anonymous commentors on a blog? Garth is with Raymond James.

https://www.greaterfool.ca/about-garth-turner/

Here’s a clue for you:

https://cdn.canadiancouchpotato.com/wp-content/uploads/2018/01/CCP-Model-Portfolios-ETFs-2017.pdf

Hey, Smokey. San Diego UFOs. Chariots of fire?

UFO sighting in San Diego 10/27/18
Chris Wilson
Published on Oct 28, 2018

https://www.youtube.com/watch?v=4g5gwSyiE_0&feature=youtu.be

#83 45north on 11.11.18 at 10:54 pm

And it’s going to get even worse. The housing market moves slowly, but by the spring, 2019 it’s going to be evident that detached house sales are the lowest, ever. People that own property are going to realize they cannot sell it. Like the sorcerer’s apprentice, the Dippers will look to fix the problem. They’ll fiddle with the taxes but it will be too late. Interest rates will continue to rise and credit will continue to be tightened. The BC Dippers are going to be booted out. Like the Ontario Liberals.

>”We have seen the enemy and he is us.”

#54 Ponzius Pilatus on 11.12.18 at 11:31 pm

#13 dakkie on 11.12.18 at 4:41 pm
California Real Estate Sales Slump Due to Rising Prices and Rising Interest Rates as US Housing Bubble Nationwide Gets Closer to Popping

http://www.investmentwatchblog.com/california-real-estate-sales-slump-due-to-rising-prices-and-rising-interest-rates-as-us-housing-bubble-nationwide-gets-closer-to-popping/
———-
Wild fires are getting worse every year.
Maybe in 20years, California as we know it may be part of Mexico again.

#55 Ponzius Pilatus on 11.12.18 at 11:39 pm

#50 MF on 11.12.18 at 10:33 pm
I came across this chilling video depicting the casualty rates of ww2 through the use of charts:

https://www.youtube.com/watch?v=DwKPFT-RioU&t=989s

I know remembrance day has passed, but this video really shows the level of death and destruction of ww2 (and war in general).

Lest we forget.

MF
————
Typical Canadian ignoramus.
Getting history lessons from YouTube and Hollywood movies.

#56 SoggyShorts on 11.12.18 at 11:43 pm

#49 Shawn Allen on 11.12.18 at 10:01 pm

Isn’t the idea that you feed your RRSP in your highest tax years and withdraw in lowest?
If you do that, then the government isn’t getting its 30% back, right?

In retirement, you are using a combination of eligible dividends, return of capital, TFSA, and capital gains, so your rate really should be much better than as an employee if you do it right.

#57 Smoking Man on 11.13.18 at 12:09 am

Trouble with humans.

They believe in the wrong shit.
Disclosure is near. There was a reason long shot Trump was elected.

https://youtu.be/6kIprgAaWbo

Q

#58 Jessica on 11.13.18 at 12:33 am

Single parents, contribute to RRSP to the max amount allowed by your contribution room, aiming to get your taxable income down to $30k = full Canada child benefit for the following year. Then take your tax refund & whatever you need from the Canada child benefit to contribute to RESP the max & the make up for one year. Do this until you run out of RRSP contribution room. Someone else can do the calculations for the child benefit, but for the RRSP tax refund to RESP, you’re already looking at insta 35%.

#59 Stan Brooks on 11.13.18 at 12:43 am

The slump is just starting.

60-70 % to go down from the top (at least for GTA and BC), based on income and the real state of the economy.

You can keep afloat a sinking ship only for a limited time.

Bombardier cutting 5 000 jobs

https://ca.finance.yahoo.com/news/bombardier-defends-ceo-apos-absence-164509302.html

Economic cost of Canadian oil price discounts counted in billions of dollars

https://ca.finance.yahoo.com/news/economic-cost-canadian-oil-price-150004658.html

Keystone and BC Extension pipelines stopped by judge/incompetent government.

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

Extremely valuable advice on tax planning (I am sure soon to be made illegal) GT, thank you.

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

#43 Shawn Allen on 11.12.18 at 8:50 pm

(from somebody you want banned:)

Have you considered US REITs/I am collecting 8 % + annual cash flow from mine or European beaten down stocks (VGK yielding 4 %?).

#60 Rentin on 11.13.18 at 12:45 am

The elevation of Richmond is about 2m above sea level. It sits, along with the City of Delta on unconsolidated sand that will liquify during a shaker of large enough magnitude, swallowing houses in the process.

But if you want to ignore that, and only focus on prices, then I think a drop of 50% from the highs is probably when buyers will start to materialize.

One can see the double it – 50% drop pattern in all asset markets.

#61 Smoking Man on 11.13.18 at 1:43 am

The shit I taught people with good marketing skills. Not jealous. Proud.

https://youtu.be/15IWB9-r07M

#62 Ace Muddlestone on 11.13.18 at 1:49 am

#11 Paul. If your time frame is a year from now, two, five years from now, set it and forget it. Everything else is just noise. Remember the famous “sell everything” call by RBS? That wasn’t wise. Time heals all, even communists love the fruits of capitalism. But what’s on sale that’s pays dividends in the five main sectors of the economy. If all you’d bought in the last year was Canadian bank stocks you’d have averaged 25%. It’s a market of stocks not a casino. Where are you going to get another CN or ENB? A BNS share is already an international ETF in itself, but with fat dividends and far better mgmt. Stop tuning into “the business news” shows. If I could turn the clock back thirty years I would buy only one stock, TD Bank, what a no brainer that stock turned out to be. And, don’t take risk, buy no bonds or marijuana. Good solid companies that have a 30% payout ratio like CN and keep hiking the dividend double digits every year ensure safe dividends forever, far outperform balanced funds, a strategy born of the seventies and should have been buried in the eighties.

#63 Tony on 11.13.18 at 2:01 am

DELETED

#64 Smoking Man on 11.13.18 at 2:04 am

If you are lucky enough to make it past 50 years old, the truth. Everything is down hill from there. I know salad eaters and cyclists will beg to differ. They are only making the suffering worse.

Your goal in life should be to be rich enough to walk through the front door of a rub and tug when ever you want.. Purly for prostate cancer prevention. If you are a known celebrity at this stage of life. Eat bullet.

Dr Smoking Man
PhD herdinomics.

Blood pressure test today.

205
100

Why am I still alive?…

#65 Dr.Oz on 11.13.18 at 6:17 am

#64 Smoking Man

“Blood pressure test today.
205
100”

Buddy, go see a doc and get yourself some blood pressure medication. You are playing with fire there….
What will this blog be without you?

#66 Stan Brooks on 11.13.18 at 6:48 am


#55 Ponzius Pilatus on 11.12.18 at 11:39 pm

————

Typical Canadian ignoramus.
Getting history lessons from YouTube and Hollywood movies.

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

I think ignorantus is more proper, maybe even use the derivative from latin (inscius = ignorant): īnscius (M) īnscia (F) īnscium (N). Not sure about the other 49 genders, will ask Justin/Justina/Justinious,…. on how he/she/zer proposes to handle that in the traditional latin.

You have to excuse our intellectual flaws, life here is simple – all you need is: hi, bye, buy the house, renter (bad, bad word).

#67 Frank The Tank on 11.13.18 at 6:52 am

The Economist making a case for foreign influence on real estate markets such as Toronto. Reason?

“Demand from emerging markets such as China and Russia has been growing. Buyers are willing to pay steeply to secure a safe place for their savings—or a bolthole for themselves.”

And “…when taxes were levied on foreign homebuyers in Vancouver in 2016, the market cooled, but Toronto took off. ”

Link: https://www.economist.com/finance-and-economics/2018/11/08/why-house-prices-in-global-cities-are-falling

#68 Frank The Tank on 11.13.18 at 6:54 am

Condos alone withstood the correction, says The Star.

Garth, any chance the kids just love condos … because they HAVE to be in the areas that are chic? Could this be the new coveted housing?

Story: https://www.thestar.com/business/real_estate/2018/11/13/condos-alone-withstood-housing-correction-remax-says.html

#69 MF on 11.13.18 at 7:05 am

#55 Ponzius Pilatus on 11.12.18 at 11:39 pm

-73 years or so after the end of ww2, a neutral video depicting the staggering levels of human casualties from all theaters (soldiers and civilians) is made to remind us how violent war is. The final message is of hope, showing how since ww2 wars have become less frequent and much less violent.

Maybe we are learning our lesson.

….

Then this is the response:

“Typical Canadian ignoramus.
Getting history lessons from YouTube and Hollywood movies”

-I’ve read your stupid comments on here for a while. Aren’t you German? Did you see how many of Germany’s soldiers and civilians perished needlessly?

I’m guessing not. Pity. This is why history often repeats.

MF

#70 Stan Brooks on 11.13.18 at 7:07 am

#64 Smoking Man on 11.13.18 at 2:04 am

Get well soon young man.

My doctor/banker/broker recommends in such cases a 35 years mortgage so you can stay fit and focused until your 90-es/diaper time, this way you won’t have time for stupidities and libertarian BS/god forbid booze/.

MJ is OK.

#71 Keen Reader on 11.13.18 at 7:24 am

@#31 Wrk.dover

So obscure powers dictate your own MP’s vote?? Even so, we get the government we elected, so let’s not distance ourselves too much…

Cheers

#72 Lee on 11.13.18 at 7:29 am

According to the Star, Remax says condos have successfully withstood the housing correction. Great. Housing correction is over.

#73 NoName on 11.13.18 at 7:38 am

So if you are speaking with an accent, and you are fat ugly bastard, and happend to be high school dropout like me, you should buy book written by jonathan tepper titled The Myth of Capitalism, you should read that book.
If you are opposite click ing on link and listening to podcasts should be good enough.

And on a side note if you hapend to be in mid forties who is after plastic gold diggers, i recomen changig venue and going places where milfs frequent, they can siriusly sitmulate mans mind. But again what do i know…

https://thefelderreport.com/2018/11/08/jonathan-tepper-on-the-single-most-important-question-investors-should-be-asking-right-now/

#74 crowdedelevatorfartz on 11.13.18 at 7:47 am

@#57 Smoky
“Silly Hu-mans”
++++

Trump is an alien? It would explain a great deal.

#75 Elcheapo on 11.13.18 at 8:25 am

Lord Mr Turner, enough with the ‘most votes’ crap. There was no single provincial election, there were 87 of them. The results were indecisive- no single party won a majority. It then fell to Parliament to work out a deal amongst themselves to see who could enjoy the confidence of the house. This is how our system of Westminster parliamentary democracy works. If you don’t like it, work to change it, but stop giving us this disingenuous crap about the illegitimacy of coalitions. I say this as a card carrying member of the Conservative Party who actually resigned my membership when Stephen Harper spread his insidious lies about ‘stealing an election’ in 2008 (I later rejoined to vote on the leadership campaign). It was not pretty then, its not particularly pretty now, but it is playing by the rules and it is legitimate. I wouldn’t vote NDP to save my life and I think taxing ones way to prosperity and cheaper homes is utter poppycock, but they are a legitimate government. Period. End of story. Now, lets work to get rid of them! (at least from afar- I’m in Ontario)

I will continue to point out that BC did not elect an NDP government. They appointed themselves. – Garth

#76 TurnerNation on 11.13.18 at 8:40 am

#50 MF it was on purpose. Nothing is left to chance. The strongest and bravest farm boys of a country were given bolt action riles and went over the top to face superior machine gun fire and poison gas.

They landed onto beaches and faced the same. Our elite could have ordered airplane bombers onto those same dug in positions, or floated tanks across on barges to blast them. Instead they sent flesh and small arms.

The trend is clear: Getting people off their land and self sufficiency. No more farm boys.

In Vietnam they destroyed farms using WMD (Agent orange) and carpet bombed helpless Laos, rending its land still today a dangerous field of mines. Why…to get people off their land. They are herded into cities to face the drug dealers and pimps. That is south east asia today and us. I understand depleted uranium is being used to poison the land in the M.E.
A distasteful topic on any blog but bears a mention.

The condos will continue, peple are being bussed in just to fulfull this purpose. Get em off their land and into cities.

Electric cars – The Peoples’ Car – will have a ~200-400km range and good luck getting a public charging station, meaning trips will be limited. Stuck in a 200km radius we are. Tax farm

#77 Stan Brooks on 11.13.18 at 9:24 am

#76 TurnerNation on 11.13.18 at 8:40 am

The condos will continue, people are being bussed in just to fulfill this purpose. Get em off their land and into cities.

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

I think it is a voluntary concentration by the sheeple, which works great for the shepherds as well as concentrated sheeple is easier to control.

Milking a mountain goat is not easy. (good luck in milking Smoking Man for example….).

It is interesting what these people will do in these small, cold, noisy, quickly amortizing condos with the disappearance of jobs and increase in maintenance, utilities, energy, etc.

Plus it is shared ownership, you own pretty much nothing but are liable for a lot.

It is interesting why they don’t build here European style low rise freehold apartments, people have been living in such for centuries with almost no maintenance. That maintenance part is truly enslaving (as of course are the property taxes and the mortgage)

#78 Remembrancer on 11.13.18 at 9:57 am

#56 SoggyShorts on 11.12.18 at 11:43 pm
#49 Shawn Allen on 11.12.18 at 10:01 pm

Soggy, that’s the idea – contribute the higher taxed $$, grow, withdraw at a lower taxed rate, and profit!

Mileage may vary depending on your rate etc etc though – hence the more egalitarian TFSA and its late lamented $10000 limit with tax free withdrawals…

#79 Tater on 11.13.18 at 10:19 am

#65 Dr.Oz on 11.13.18 at 6:17 am
#64 Smoking Man

“Blood pressure test today.
205
100”

Buddy, go see a doc and get yourself some blood pressure medication. You are playing with fire there….
What will this blog be without you?
————————————————————–
Or don’t. Whatever

#80 dharma bum on 11.13.18 at 10:25 am

Re: Todays Photo

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

#81 KLNR on 11.13.18 at 10:27 am

some folks on here may find this link interesting

https://www.fastcompany.com/90266261/the-out-of-control-price-of-american-homes-in-a-single-map?utm_source=postup&utm_medium=email&utm_campaign=Co.Design%20Daily&position=1&partner=newsletter&campaign_date=11132018

#82 dharma bum on 11.13.18 at 10:45 am

#77 Stan Brooks

It is interesting what these people will do in these small, cold, noisy, quickly amortizing condos with the disappearance of jobs and increase in maintenance, utilities, energy, etc.
——————————————————————-

Future Inner City Slums

https://qph.fs.quoracdn.net/main-qimg-2219e98b689945ee62b1a4405c984f6b-c

#83 Shawn Allen on 11.13.18 at 10:59 am

RRSP Tax Math

#56 SoggyShorts on 11.12.18 at 11:43 pm asked:
#49 Shawn Allen on 11.12.18 at 10:01 pm

Isn’t the idea that you feed your RRSP in your highest tax years and withdraw in lowest?
If you do that, then the government isn’t getting its 30% back, right?

***************************
Yes, agreed, absolutely, the ideal is to contribute when your marginal tax rate is say 40% and get it out at 30% or less.

But that is a bonus. Even if you take it out at 40% tax your 60% portion has actually grown tax free iff you consider the 40% effectively funded by the refund has gown to pay the taxes. This actually equals TFSA and is a huge benefit over decades even if your tax rate in withdrawal did not go down.

But absolutely correct, try to take it out at a lower tax rate. Looking at marginal tax rates and considering that as a successful investor you still probably have a fairly high income in retirement, I don’t see much chance of getting much of it out at less than 30%. Not for those with pension income at least. And if you have no pension but manage to grow a large RRSP you pretty soon get back to that 30% or so marginal tax rate due to size of withdrawals. When you can get RRSP money out at less than the tax rate at refund time you basically got negative tax since the refund funded share of “your” RRSP more than covered the tax. This is the surprising math.

There are cases though where total tax impact of withdrawals is very high. RRSP is not best for the very low income (Though it’s hard to argue that it was still a good thing to save money and the TFSA did not exist years ago). RRSP faces high withdrawal tax if in old age clawback range… Still probably better to have saved than blown the money.

#84 Doug in London on 11.13.18 at 11:13 am

House prices in Vancouver area will never go down? I don’t believe it, here are some comments from well informed readers of this blog:

1)Real estate values in most parts of Canada will never drop, and in many areas, will only keep rising. Why?
– Canada is the “best country in the world”
– Canada has a generous immigration and refugee policy – they all gotta live somewhere
– the crisis in Syria, Iraq and Afghanistan will only accelerate the number of people wanted to migrate to Canada, and with a new Liberal PM, the numbers allowed in will increase
– interest rates will stay low for a long, long time, maybe rise a 1/4% this year, maybe 1/2% next year – maybe
– Boomers and other wrinklies are hanging on to their real estate for much longer
– many wealthy Canadians are speculating on real estate, buying up condos, multi-unit rental accomodations, houses, cottages, some wealthy people own 5 properties or more
– the rich foreign investors (China, US, Russia, UK) are buying up houses and large plots of land for development
– there have been many young Canadians shut out of the housing market, wanting to start families and are desperate to buy a place they can afford
– all levels of government are not releasing land for development
– all levels of government, including the banks, real estate agents and developers are making it easier to borrow money, giving incentives to buy homes, renovate them, flip, repeat
A perfect storm to drive up the price of real estate for decades to come.
Average house price Vancouver 2015 – 1 million
2017 1.5 million
2020 2.0 million
2022 2.5 million
The sky’s the limit.

2) No interest rate increase in Canada, real estate will continue rising.

3)Housing in major cities in Canada will do fine. Foreign money inflows from China need a place to invest and that place is real estate. Stock markets can fall rapidly (see Shanghai) and be manipulated so billions of people wont invest there. The real question then becomes when will Vancouver prices catch up to Hong Kong, Shanghai, and Beijing prices.
Another few million $$ to go. The positive for Vancouver is you have the rich moving there for the better air, education, and way of life.

4)Nothing will crash, or even soft land ‘on year by year basis’. This is Canadian RE.
GTA – will rise again
GVA – year by year up and up and up….. July 21/17

Nor do I believe that a drop in prices will scare buyers away, as in this comment:

“And why do I still think real estate prices will continue to shoot up in Vancouver and Toronto defying all logic for eternity?”
cause if any ‘dip’ occurs the pent up buyers will come out of the woodwork to buy…rinse and repeat…
maybe not ‘eternity’ but much longer than anyone can imagine….

#85 Frank The Tank on 11.13.18 at 11:18 am

From John Pasalis: “So I hear that agents can’t keep up with the number of buyers eager to spend $1600 psf for a pre-construction condo on King. Worth noting that $1600 psf is significantly higher than low-rise single family homes in the area. These investors are making a pretty big bet!”

What the heck is going on?! Are condos really the new “it” RE asset? Garth?

#86 AGuyInVancouver on 11.13.18 at 12:15 pm

I will continue to point out that BC did not elect an NDP government. They appointed themselves. – Garth
_ _ _
Not true. The Queen’s Representative, the Lieutenant Governor, invited the NDP to form a government. Nobody held a gun to her head. All part and parcel of the legal workings of a Westminster democracy.

Since when did you ever care about the L-G? – Garth

#87 FOUR FINGERS WATSON on 11.13.18 at 12:23 pm

I will continue to point out that BC did not elect an NDP government. They appointed themselves. – Garth
………………………….

As per the rule of law. Serious question : what would your solution be to ensure that a sitting government was elected by 50+% of the electorate?…..Would you consider referendums on major issues like pipelines ?

Of course not. We elect people to make informed decisions, which the electorate is largely incapable of doing. The appropriate course of action in BC would be to have a minority Liberal government that could only function with the support of enough oppo members. Thusly compromise, not dogma, is born. – Garth

#88 Shawn Allen on 11.13.18 at 12:36 pm

Jessica has good RRSP advice

#58 Jessica on 11.13.18 at 12:33 am
Single parents, contribute to RRSP to the max amount allowed by your contribution room, aiming to get your taxable income down to $30k = full Canada child benefit for the following year. Then take your tax refund & whatever you need from the Canada child benefit to contribute to RESP the max & the make up for one year. Do this until you run out of RRSP contribution room. Someone else can do the calculations for the child benefit, but for the RRSP tax refund to RESP, you’re already looking at insta 35%.

********************************
Sounds very wise. And it goes to show there can be a lot of complicated interactions in the tax system.

Ideally use a tax program and try different RRSP contributions and calculate your marginal taxx rate. But taking into account impacts on the following years child tax credit or GST and whatever else is difficult but well worth the effort.

Sadly though most single parents probably can’t spare anything for RRSP. Some can, most probably not.

It is very unfortunate that so many people are not in a position to benefit from free money like the RESP grant.

#89 Shawn Allen on 11.13.18 at 12:39 pm

Income Tax Unfairness

A good argument could be made that the present system favors the higher middle class and especially the wealthy. Loads of tax breaks for those in a position to use them. (You’d “almost” think it was the richer people that make the rules).

A Royal Commission with a view to a complete and total overhaul of the tax and social benefit system is long over due.

#90 Kreditanstalt on 11.13.18 at 12:43 pm

People who borrow to buy rising-price assets (housing is an “asset”??) at market highs should bear the risks. They’ve been protected by governments and central bankers for too long.

More affordable housing is needed, but the best way to get it would be letting the free market set interest rates, while ending government debt issuance and deficit spending.

Monkeying with the housing market is NOT the best way to return risk awareness to reality.

#91 SimplyPut7 on 11.13.18 at 12:52 pm

#85 Frank The Tank on 11.13.18 at 11:18 am

Buy for $1600 psf
Resell back for $800 psf.
That makes sense.

Resale is only $800 – $850 psf
At 22:40 min. – 29:55 min.
At 12:05 min. – 12:50 min. is also a good reminder.

https://soundcloud.com/simply-real-estate/november-10-2018

A fool and his money are soon parted.

#92 Francois Labelle on 11.13.18 at 1:05 pm

How come the price of the ETF HEJ is so low? It pays 7.65% in dividend and sells at 11.1 times the profits. The dividend payment has been stable for a few years and yet the price remains very low. Do you have an idea of the fundamental reasons that explain this price?

#93 FOUR FINGERS WATSON on 11.13.18 at 1:13 pm

Of course not. We elect people to make informed decisions, which the electorate is largely incapable of doing. The appropriate course of action in BC would be to have a minority Liberal government that could only function with the support of enough oppo members. Thusly compromise, not dogma, is born. – Garth.
……………………………..

I think I get it now. The electorate is largely incapable, is too stupid, uneducated, and uninformed to make a major decision like having a pipeline or not. Only higher purpose people and holders of the high moral ground like politicians and yourself are qualified to to make those decisions for us. Thanks for clearing that up for me.

You’re welcome. You may stand at ease now. – Garth

#94 J on 11.13.18 at 1:41 pm

Hi Garth, regarding your info about the Home Buyer’s Plan:
——–
Thinking of buying a house and using the $25,000 tax-free withdrawal from your RRSP? Because this needs to repaid into your retirement plan in 15 equal annual installments, if you wait until January you’ll gain a full extra year before any repayments are due. Also remember if you want to employ the Home Buyer’s Plan in a few months, dump the funds into an RRSP now, wait for the tax refund to materialize, then use both for the down payment. Bigger deposit, less mortgage.
——–

My questions is: as you’re paying back the loan from your RRSP in future years, do you again get tax incentives (larger tax returns) on account of paying back the loan? i.e. Do these repayments count the same as other RRSP contributions?

Thanks!

#95 mike from mtl on 11.13.18 at 1:52 pm

#92 Francois Labelle on 11.13.18 at 1:05 pm

How come the price of the ETF HEJ is so low? It pays 7.65% in dividend and sells at 11.1 times the profits
//////////////////////////////////////////////////////////////////

There’s never a free ride with these things, if you count being almost -18% YTD, okay -11 inc. div, and charging 0.8% it’s pretty crappy.

It’s also one of those ‘actively managed’ ETFs, like mutuals good luck there.

#96 Lorne on 11.13.18 at 2:17 pm

#87 FOUR FINGERS WATSON on 11.13.18 at 12:23 pm
I will continue to point out that BC did not elect an NDP government. They appointed themselves. – Garth
………………………….

As per the rule of law. Serious question : what would your solution be to ensure that a sitting government was elected by 50+% of the electorate?…..Would you consider referendums on major issues like pipelines ?

Of course not. We elect people to make informed decisions, which the electorate is largely incapable of doing. The appropriate course of action in BC would be to have a minority Liberal government that could only function with the support of enough oppo members. Thusly compromise, not dogma, is born. – Garth
……….
Tried that….didn’t get past the throne speech as there is no trust from the other side…for many obvious historical reasons.

#97 young & foolish on 11.13.18 at 2:19 pm

“You have to excuse our intellectual flaws, life here is simple – all you need is: hi, bye, buy the house, renter (bad, bad word).” — Brooks

you forgot to mention … Stocks good, Real Estate bad

#98 whiplash on 11.13.18 at 2:19 pm

#87 FOUR FINGERS WATSON

………would you consider referendums on major issues like pipelines?

Speaking of pipelines, bill c-69 contains a number of provisions that will greatly delay if not out right kill any development.
Under the current rules, in order to have a standing before the NEB, one must be directly impacted by the energy project. This new bill, “any random member of the public”, without even the need to be from Canada, can now make submissions to the NEB and the minister can kill a project before any analysis is done.

The only holes in the ground are going to be by gophers!!

#99 Habbit on 11.13.18 at 2:40 pm

Great blog again. Thanks

#100 Francois Labelle on 11.13.18 at 2:49 pm

Mike from Mtl:

I’m not sure I understand your answer correctly, can you give more details please? What does Garth think about it?

#101 SoggyShorts on 11.13.18 at 3:11 pm

#93 FOUR FINGERS WATSON on 11.13.18 at 1:13 pm

You said it rather tongue in cheek, but it’s true, the electorate is simply too uninformed to make referendums a good thing.
Look at Brexit or closer to home the Quebec ref. The interviews with voters before and after are terrifying.
Even if we assume that the media cherry picked the dumbest most uninformed people to show us, the fact remains that those people voted. People are so uninformed that some didn’t even know if a “Yes” vote meant “yes we want to leave” or “yes we want to stay”

A referendum with a qualifying 10 question multiple choice exam could work, but would never be implemented. Even a 5 question True or False quiz on the issue would probably eliminate an embarrassing percentage of voters.

#102 mogulrider on 11.13.18 at 3:14 pm

Richmond prices are now affordable…

#103 jojo on 11.13.18 at 3:17 pm

Brent oil has just collapsed and now Western Canadian Heavy has crashed into the basement…

Boy

Socialist Alberta is in deep trouble

#104 Remembrancer on 11.13.18 at 3:19 pm

#94 J on 11.13.18 at 1:41 pm
My questions is: as you’re paying back the loan from your RRSP in future years, do you again get tax incentives (larger tax returns) on account of paying back the loan? i.e. Do these repayments count the same as other RRSP contributions?
————————————————————
Fuller details in link below – bottom line, since you aren’t taxed on the way out you don’t get a tax refund on the way back in…

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/repay-funds-withdrawn-rrsp-s-under-home-buyers-plan.html

#105 mogulrider on 11.13.18 at 3:23 pm

We’ve always used a simple formula for buying any asset

At your local kitchen party you mention you are considering buying a rental property – everyone laughs at you

Buy signal..
____________

At your local kitchen party you mention that you are considering selling your property portfolio – everyone laughs a you

Sell signal

#106 Renter's Revenge! on 11.13.18 at 3:34 pm

#94 J on 11.13.18 at 1:41 pm

My questions is: as you’re paying back the loan from your RRSP in future years, do you again get tax incentives (larger tax returns) on account of paying back the loan? i.e. Do these repayments count the same as other RRSP contributions?

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No.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/repay-funds-withdrawn-rrsp-s-under-home-buyers-plan.html

#107 When Will They Raise Rates? on 11.13.18 at 3:42 pm

Crude oil is crashing… 54 handle as I write this.

#108 JB on 11.13.18 at 4:08 pm

#79 Tater on 11.13.18 at 10:19 am

#65 Dr.Oz on 11.13.18 at 6:17 am
#64 Smoking Man

“Blood pressure test today.
205
100”

Buddy, go see a doc and get yourself some blood pressure medication. You are playing with fire there….
What will this blog be without you?
————————————————————–
Or don’t. Whatever
………………………………………………
205 over 100 shouldn’t he be dead?
Actually Ive answered my own question.

#109 Steven Rowlandson on 11.13.18 at 4:13 pm

#84

Just where are people going to get the income to buy homes at these hyper inflated prices? Welfare? Part time or full time minimum or near minimum wage skilled or unskilled jobs? No jobs? Just the ability to fog a mirror?
Get real and wake up and smell the coffee! Homeless people and employers are not made of money!

#110 jess on 11.13.18 at 4:18 pm

UPDATE 4-Spain to change law to force banks to pay mortgage stamp duty
Jesús Aguado
Published 12:12 PM ET Wed, 7 Nov 2018
https://www.cnbc.com/2018/11/07/reuters-america-update-4-spain-to-change-law-to-force-banks-to-pay-mortgage-stamp-duty.html

#111 FOUR FINGERS WATSON on 11.13.18 at 4:22 pm

#101 SoggyShorts on 11.13.18 at 3:11 pm
#93 FOUR FINGERS WATSON on 11.13.18 at 1:13 pm

You said it rather tongue in cheek, but it’s true, the electorate is simply too uninformed to make referendums a good thing.
Look at Brexit or closer to home the Quebec ref. The interviews with voters before and after are terrifying.
Even if we assume that the media cherry picked the dumbest most uninformed people to show us, the fact remains that those people voted. People are so uninformed that some didn’t even know if a “Yes” vote meant “yes we want to leave” or “yes we want to stay”

A referendum with a qualifying 10 question multiple choice exam could work, but would never be implemented. Even a 5 question True or False quiz on the issue would probably eliminate an embarrassing percentage of voters.
…………………………….

People start paying attention around campaign time. We are educated enough and informed enough to make rational decisions. This isn’t the 18th century. One simple question, pipeline yes or no ? would probably do the trick.

#112 FOUR FINGERS WATSON on 11.13.18 at 4:50 pm

#93 FOUR FINGERS WATSON on 11.13.18 at 1:13 pm
Of course not. We elect people to make informed decisions, which the electorate is largely incapable of doing. The appropriate course of action in BC would be to have a minority Liberal government that could only function with the support of enough oppo members. Thusly compromise, not dogma, is born. – Garth.
……………………………..

I think I get it now. The electorate is largely incapable, is too stupid, uneducated, and uninformed to make a major decision like having a pipeline or not. Only higher purpose people and holders of the high moral ground like politicians and yourself are qualified to to make those decisions for us. Thanks for clearing that up for me.

You’re welcome. You may stand at ease now. – Garth
……………….
Thank you sir. I am off to the House of Commons to scrub the floors. How is the weather up there in the House of Lords?

#113 VanGuy on 11.13.18 at 5:35 pm

#38 acdel on 11.12.18 at 7:48 pm
Anybody out there willing to answer this or have gone through this before.

Is it worth dumping a LIRA into an RRSP?

Thanks.
—————————————————————–
I’m not sure I understand your question, but here is what I know about the two. hopefully the information is of some use to you.
LIRA will need to be converted into a LIF the same way an RRSP must be converted into a RRIF. the growth in either account is tax sheltered until you withdraw from it. A LIRA works similarly to an RRSP so I’m not sure what the idea would be behind trying to move money from one to the other. maybe speak to a professional

#114 Bob Dog on 11.13.18 at 6:00 pm

Average family income in Canadian cities. Funny how Vancouver near the bottom of the list way below even Hamilton.

Pretty strong evidence that your government has been compromised at all levels.

In a legit country the average home would cost 3-4 times the average income.

Can we dissolve our expensive, useless armed forces now. Clearly the country is for sale.

1 Calgary $104,410
2 Edmonton $101,870
3 Regina $97,940
4 St John’s $96,320
5 Ottawa $96,135
6 Saskatoon $94,580
7 Oshawa $92,080
9 Victoria $89,640
10 Hamilton $87,590
11 Québec $87,570
13 Kingston $86,870
15 Halifax $85,940
16 Winnipeg $81,880
18 Vancouver $72,662
20 Toronto $78,373
21 Saint John $77,730
22 Montréal $76,950

#115 Atrate on 11.14.18 at 1:33 pm

I would really like to see some tips and pointers for folks who do not have a spouse or significant other. So much tax strategy is aimed at couples with children, but there must be people out there who, like myself, are singletons without children or dependents (cats and dogs don’t count, unfortunately). Is there anything we can do to avoid giving too much money to CRA?

#116 KS on 11.14.18 at 2:00 pm

#11 Paul

ZPR 21%
XIU 34%
XAW 23%
XEM 22%

But looking to exchange the preferreds for XAW to keep the growth based equity in the TFSA. I keep bonds and more US equity in the RRSP

#117 Babs on 11.14.18 at 3:46 pm

Re: Use your spouse

Looking for some guidance here…

1. Do you need a lawyer /accountant to write up the contract with loaned amount, 2% interest and payment terms?

2. Is there a template available online somewhere?

3. How long can the payment terms be (e.g 5 years?)

4. Can the contract be termed such that it auto-renews yearly?

Thanks in advance,

Babs

#118 acdel on 11.14.18 at 7:35 pm

#113 VanGuy

Thank you for your response; I am not sure if I understand my question as well. I was once told that one should dissolve a LIRA, take the hit, and invest the proceeds into an RRSP. I could not understand as to why?

I am glad there are others out there that are as confused as me. Thank you.

#119 Kasra on 11.14.18 at 9:42 pm

You don’t think people have access to internet and can check Solo website? why you misleading people. plz check below link.

https://www.zolo.ca/richmond-real-estate/trends