Zero

Do you save? Monthly?

Most don’t. It’s shocking, in fact. The savings rate just hit 0.8%. So the average household spends 99.2% of what comes in. That compares with savings of 1.4% over the last year, which was already the worst in 13 years.

How does this compare with history and others?

It sucks. In 1982 (when interest rates were high) we saved 20% of take-home pay. In 1993 it was 14%. Six years ago it was 5.5%. Now, at 0.8%, it’s basically zero. The worst. Ever. So four in ten households say they’d be pooched if one paycheque were missed.

Canadians also hold an embarrassing place in the world. At the bottom, circling the drain. The savings rate in the States is 6.2%, in Britain it’s 4.5% while in Europe the Germans save almost 11%, the French 14% and Italians 8.6%. The Japanese tuck away 12.5% and it’s only the Australians – house horny like us – who spend most of what they make. Savings there equal 1%.

Down, down, down she goes. Savings almost zero.

So what?

It puts Canada closer to recession since families without savings have lost the ability to withstand shocks (like GM closing, oil plunging or interest rates rising). It throws into question increased consumer spending (which hurts retailers) and along with tighter mortgage regs is bad news for housing. Says TD: “It’s concerning that households aren’t building up buffers and prepping for retirement like they used to. The extent to which Canadians turn around their priorities when it comes to their financial situation could also mean less money for consumer spending.” Says the National Bank: “It doesn’t bode well for consumption spending moving forward.”

Real estate did this. Families owe more than $2 trillion, almost 70% in mortgages. They’ll all renew at higher rates over the next few years, since the Bank of Canada has already increased five times. Because people rolled the dice on a single asset, embraced epic debt, and convinced each other buying something with 20x leverage was okay – ‘because everyone is doing it and the government would never let things go down’ – we’ve got huge systemic risk.

Compared to this threat, a five or ten per cent temporary plop in stock markets is hardly worth discussing. Real estate in urban centres will decline, in some places seriously, and a shocking amount of net worth will be erased. Whether this causes a made-in-Canada recession or not is unknown, but the impact on many households will be palpable. The corollary of that – scant savings and overexposure to housing – is a growing retirement crisis. If you’re not adhering to my Rule of 90, this probably includes you.

Well, here comes Joseph the young doctor, to furnish us with an excellent example.

At least he knows how to suck-up, and be humble: “You really should be required reading in school for financial education,” he writes. “ Having read a number of your posts on the Canadian housing market and financial decisions I felt like I should throw my analysis to you to point out our obvious mistake for others to learn from.”

Here’s the story:

“Working professional couple in healthcare, early/mid 30s both with long education requirements leading to high education costs (and no company pensions), and a two-year old.  Gross income around 180-200k now, will increase to 350-400k in two years.  Highly insured for life/disability.

“No significant savings, about15k in liquid cash appropriated for future expenses and an emergency fund and debt of 60k student loans remaining.

“Due to (choose your favourite – moisting/FOMO/nest instinct/too much rum) we bought a house in Victoria for 750k in 2016 with a family loan for the DP, serviced at our mortgage rate of 2.59% at 30yr amort (we only had savings for the closing costs).  Essentially, we got lucky and within two years it was worth 925k.  Then we had to move for the last part of our training to a snowy prairie city for two years.  No guarantee there’d be a job upon finishing.  We debating selling/renting for a long time.  The mistake, as you can guess, is we opted to rent it.

“Rent is cash neutral covering all costs including mortgage, taxes, utilities, and the income tax costs except for 4k. But we’re over-extended, still in debt, and the housing market has probably dropped 75k already which eliminated our upside of principle gained.  I feel we made a 100k mistake – and extrapolated over 30 years likely cost ourselves almost 1 million in “retirement money”. Thoughts on righting the ship?”

Few on this viper-infested blog will shed tears for a doc and his squeeze on their way to a $400,000 income. But that’s not the point. Rather it’s about the debilitating impact of real estate ownership. They bought when they couldn’t afford it, borrowed the deposit, have saved nothing, owe their family a big debt, are seeing windfall equity being rolled back and could face negative net worth in a year or two as the process gains speed.

The obvious mistake was not cashing in their chips in Victoria, collecting the hundred grand unearned gain and moving on – using that cash to pay down debt and repay relatives. The doc is right. This could make a heap of difference down the road to professionals who lack pensions (and common sense).

Joe should sell, of course. Instead of subsidizing tenants, carrying debt, suffering negative cash flow and – despite a growing income – saving nothing, it’s time to zero the borrowings and start building up liquid assets. There’s no assurance where employment will be, and FOMO is so 2016. Surely on two hundred grand a year they can brim their TFSAs, start building RRSPs plus collect the 20% grant for a fully-funded RESP. Houses are easy to get. Retirement funds are not.

The morals: the goal of life is not a house. Leverage isn’t normal. Never ask your doctor for investment advice. And the stock market’s the least of our worries.

About the picture

Sue writes: “Thought you would find this picture interesting from our neighborhood in Burnaby where we rent a house. These just went up today and sadly it appears to be a sign of things to come. The recently built house is located on the corner of 12th Avenue and 1st Street. As you can see they are having a fire sale. Maybe they think they will get a bidding war but I think they are in for a rude awakening. Is this what we will be seeing in the future? Fire sales, auctions, etc. Likely yes.”

147 comments ↓

#1 Caledondave on 12.02.18 at 4:14 pm

Garth. ….interest rate announcement coming up on Wednesday. What is your prognostication?

#2 crowdedelevatorfartz on 12.02.18 at 4:18 pm

“Is this what we will be seeing in the future? Fire sales, auctions, etc…..”

+++++

Well, if the meltdown in the early ’80’s was any indication…..
It wont be “Fire Sales” …… just fires.

#3 reynolds531 on 12.02.18 at 4:26 pm

I can tell you why the savings rate is zero. Spend some time looking at the job market.

#4 Oakville Sucks on 12.02.18 at 4:30 pm

Canadians don’t save on average because we make the least on average (after taxes) in the G7 while our living expenses are the highest. There is simply nothing left to save.

What’s worse is the products we buy in Canada are the worst quality in the world. Planned obsolescence has Canadians buying the same stuff over and over again with what little money is left while other parts of the world save that money instead of replacing. How else do we keep the consumers spending and the economy going.

Canadian are just docile overworked tax payers…another words SLAVES!

…and that’s the reality.

#5 Raging Ranter on 12.02.18 at 4:33 pm

Says TD: “It’s concerning that households aren’t building up buffers and prepping for retirement like they used to. The extent to which Canadians turn around their priorities when it comes to their financial situation could also mean less money for consumer spending.”

My wife worked at TD from 2010 to 2012. She was appalled at how aggressively she was expected to flog HELOCs to all her customers. Whenever someone came in to do some banking, she would bring them up on the system, and if TD had calculated that they now had more equity on their home (based on how much principle they had repaid vs. their most recent assessed value), the client was flagged automatically. Whenever she saw that flag, she was required to inform them that they now had enough equity in their home to increase their Home Equity Line of Credit limit. “Would you like to meet with a personal banking advicor to increase your limit?”

In the two years she was there, never once did a client say refuse the referral. It just never happened. Invariably, they acted all happy and giddy, as though she had just told them they won the lottery. This was 2010 to 2012! 6 to 8 years ago!!! How much worse did it get since then before the big banks finally started reducing their HELOC exposure in the last year or so?

TD can express all the “concern” they want about the low savings rate. For the past decade, they’ve been doing everything possible to coax people into more debt, and grind that savings rate down to zero.

None of this is to excuse over-indebted fools from their own poor decisions. But it takes two fools to create an excessive debt load – a borrower and a lender. Neither TD nor any other big lender can wash their hands of this.

#6 dakkie on 12.02.18 at 4:35 pm

Update on the Housing Bust in Sydney & Melbourne, Australia

http://www.investmentwatchblog.com/update-on-the-housing-bust-in-sydney-melbourne-australia/

#7 TRUMP on 12.02.18 at 4:42 pm

Don’t waste your time on thess fool!!

I saved and invested….I need more stock pick ideas……

Real Estate is a bore that makes everyone poor.

If you want to help these FOOLS then stop talking about it.

#8 Harry on 12.02.18 at 4:42 pm

Maybe you can help by removing things not related to personal finance in these comments section.

#9 SW on 12.02.18 at 4:43 pm

#72 Phylis on 12.02.18 at 2:01 pm
“… A boat is a hole in the water you throw money into.”

Believe me, my young friend, there is nothing — absolutely nothing — half so much worth doing as simply messing about in boats.

#10 The Doctor on 12.02.18 at 4:47 pm

He had me laughing because he made a critical error. His gross income means nothing to me, because after all his expenses what is his net income?

#11 For those about to flop... on 12.02.18 at 4:52 pm

Since I have absolutely no clue what is happening with Vancouver real estate, to ensure my spot on the Useful Idiots 2018 List, I will submit this recent howmuch article instead…

M44BC

“Visualizing Countries with the Highest Household Wealth.

We all know it costs money to make money, but is there a direct correlation between income and overall personal wealth? If there is, we would expect to see the relationship in our new visualization comparing accumulated wealth and disposable income at the household level across the OECD.

We got our numbers directly from the OECD. Our visualization roughly corresponds to the geographic location of each country on the map—the U.S. is furthest “west” and Japan is further “east.” The size of each bubble represents average household wealth for each country, or assets minus liabilities. This takes into account things like savings, securities, stocks and loans (but not real estate). We then color-coded each bubble based on the average disposable income for each household, which equates to the amount of income left over after taxes and transfers have been taken out. Basically, it’s how much you can spend on living expenses and other discretionary purchases.
These are the top ten countries among the OECD with the highest household wealth, together with the average disposable income.

1. United States: $176,076 with $44,049 in disposable income

2. Switzerland: $128,415 with $36,378 in disposable income

3. Belgium: $104,084 with $29,968 in disposable income

4. Japan: $97,595 with $28,641 in disposable income

5. Sweden: $90,708 with $30,553 in disposable income

6. Netherlands: $90,002 with $28,783 in disposable income

7. Canada: $85,758 with $29,850 in disposable income

8. United Kingdom: $83,405 with $28,408 in disposable income

9. Luxembourg: $74,141 with $41,317 in disposable income

10. Denmark: $73,543 with $28,950 in disposable income

Our visualization reveals several key insights about personal wealth accumulation across the OECD. First off, the U.S. clearly dominates the rankings with over $170k on average per household. The other standout on our list, Switzerland, is far behind the U.S. with $128k of accumulated household wealth on average. The rankings then become much tighter further down the list with countries grouped together in the $70-90k range. There are also a few countries in the OECD for obvious political reasons. It is hard to see why Russia should be counted with only $16,657 in disposable income and $2,260 in net financial wealth.

Now take a look at the color of each bubble, which corresponds to the average disposable income for each country. You might think that having a higher disposable income is directly associated with building household wealth, but clearly there are other factors involved. Granted, Americans enjoy both the most disposable income on average ($44,049), but this only partly explains their lead in household wealth. For example, Luxembourgers have only $3,000 less in disposable income ($41,317), but over a $100,000 less in average household wealth. And take a look at the Norwegians who have $35,739 in disposable income but only $20,347 in household wealth. Clearly all that extra money is going somewhere, and it’s not to a savings account.

One obvious assumption behind our numbers is the longstanding decline of defined benefit pension systems in the U.S. Whereas European countries maintain social programs that provide for a secure retirement, many workers are largely left alone in the U.S. to save for their golden years. Another factor is wealth inequality. Since we are only looking at average figures, a small number of millionaires and billionaires in the U.S. inflate average wealth figures, when in reality most people are barely getting by.

All these caveats aside, clearly the U.S. enjoys a leg up in wealth accumulation within the OECD. Also keep in mind that owning your own home is closely associated with building personal wealth, but the OECD excluded the value of land and dwellings from its analysis. This means that in all likelihood, our visualization actually understates the real value of American accumulated wealth.”

https://howmuch.net/articles/household-net-financial-wealth-around-the-world

#12 Eddie McOates on 12.02.18 at 4:52 pm

When [email protected] asks if you want a heloc, should you say yes and plug all that money into shares of that bank?

#13 young & foolish on 12.02.18 at 4:56 pm

So, many people will need financial aid in retirement … I suppose higher taxes to help “spread the wealth” and maintain public order. Already the gap between the haves and have nots is attracting the attention of policy makers and politicians concerned about keeping the peace. The current trajectory seems unsustainable. Public debts are already very high. How long before another Obama comes along and says: “you didn’t build that all by yourself”

#14 red_falcon on 12.02.18 at 5:06 pm

Savings is only 1 part of the financial puzzle. You have to Save to invest, and then to reap the profits!

If you can’t save, then you can’t even start anything. No wonder people these days are worrying about their retirement and FIRE… it never even started for them.

Red.

#15 Negative on 12.02.18 at 5:09 pm

Not gonna lie, spending more than earning at the moment, so negative saving.

However the bulk of my spending is principle repayment on mortgage, so the house is a piggy bank? A piggy bank with side effect of being able to live in it.

I just hope it will have kept value in real terms, when it is sold after kids leave home.

#16 Crazyfox on 12.02.18 at 5:13 pm

Trump has put a pause on Chinese tariffs bumped to 25%:

https://www.cnbc.com/2018/12/01/us-china-wont-impose-additional-tariffs-after-january-1-report.html

Trudeau signs NAFTA II even with tariffs still in place. Who knows whether congress will ratify the new NAFTA within 6 months but tariffs will remain. This delays Canadian recession projection to Q4 of 2019 and U.S. recession to Q2 of 2020.

#17 Glengarry Girl on 12.02.18 at 5:16 pm

They learned a very valuable lesson at a reasonably young age without loosing very much money relative to their potential earnings. I expect that they will be just fine if they put this knowledge to good use. The best thing they can do now is budget and live below their income. They should be able to pay off their debt quickly. Continue to save, decide what to do with every dollar earned. Save 25% in whatever way you are comfortable. For some that is no Risk GICs. Some pay off the mortgage and others follow the advice of financial planners. Some do all of this, go with whatever risk you are comfortable taking. Always bake into the cake a possible loss, because you now know, it can happen. Their income going forward is high, but so will be the stress. Use your money to create a life that rewards you throughout your busy years raising kids. Buy a Sailboat or Travel regularly. People like these two have it made in the shade, no worries at all.

#18 J on 12.02.18 at 5:24 pm

Let us know what the result is for the fire (sale).

#19 Shawn Allen on 12.02.18 at 5:28 pm

Why the Low Savings Rate?

#3 reynolds531 on 12.02.18 at 4:26 pm said:

I can tell you why the savings rate is zero. Spend some time looking at the job market.

**************************************
Without even looking, I will guarantee that the national unemployment rate was higher than today in 1982 when the savings rate was apparently at a record high.

Most adults in 1982 had a job and a mortgage. Mortgage rates had sky rocketed. So people were madly paying down mortgages as fast as possible. I believe that counts as “saving” in these figures.

This savings rate of 0.8 % is an average and is clearly a netting, some save and some borrow.

In 1982 there was simply not the ability for the unemployed or even the well employed to borrow like they can today.

So, lots of things explain the low net average savings rate today. Monster mortgages today, super easy access to credit, job or not… (Today you can lose your job and spend away on your line of credit, the bank computers don’t seem to notice to my understanding).

The job market was very poor indeed in 1982 and yet the net average savings rate was apparently higher than today.

Also around 1982 there was a wave of forclosures on houses in Alberta and Ontario. The wiping out of existence of this mortgage debt may also be getting counted as “savings” in 1982.

#20 Tim on 12.02.18 at 5:31 pm

I’m sure the median monthly savings is much higher. I rent and I save $4k a month including my RSP contribution.

#21 Remembrancer on 12.02.18 at 5:35 pm

#4 Oakville Sucks on 12.02.18 at 4:30 pm
What’s worse is the products we buy in Canada are the worst quality in the world. Planned obsolescence has Canadians buying the same stuff over and over again with what little money is left while other parts of the world save that money instead of replacing.
———————————————————–
Oakville may indeed suck, but what are we barred from buying from the world market as a for instance that leaves Canada overall unable to save money or its more fancy term, deferred consumption?

#22 Cristian on 12.02.18 at 5:35 pm

“Never ask your doctor for investment advice.”

Not completely true. I have some patients consult me not only for their bodily ailments but sometimes for a second opinion on financial issues. And of course, having read your blog on-again off-again over the years, plus having read lots of other financial stuff over the years, I advise them about balanced portfolios, etc.
But it is also true that most of the colleagues I have speaking with in the last few years seem not to have much of an idea about investing other than owning a bunch of mutual funds or giving all their money to MD Financial…

#23 Ace Goodheart on 12.02.18 at 5:39 pm

RE: #6: actually might be a good time to move to Australia (Brisbane, anyone?) considering all the ridiculous “carbon taxation” our governments are about to dump on us.

If you think real estate taxes in BC are wealth transfer taxes, you haven’t seen anything until you see carbon tax.

Right now Paris is getting destroyed by rioters who can no longer afford to heat their homes or drive their cars due to escalating “fuel taxes” designed to stop people from using fossil fuels for heat and motive power.

This stuff is coming here. T2 is going to do it very soon, and Dougie won’t be able to stop him from doing it in Ontario.

The idea is, tax the crap out of anyone who purchases and uses gasoline, natural gas, diesel, home heating oil, kerosene, basically anything other than electricity that heats a house, drives a vehicle or provides motive power.

This of course leaves most of Canada with a bit of a problem. It is below freezing in Ontario for five months each year. How do they expect us to heat our houses, once they make natural gas and home heating oil un-affordable through carbon taxation?

Electricity? I used an electric heater to heat one 150 square foot room of my cottage last winter, for a few weekends. The electricity bill was unbelievable. If I had wanted to heat the entire, insulated, winterized 700 square foot cottage with electric heat for the six month heating season, I would have had to remortgage it to pay the bill.

People in Canada, at least in Ontario, are not going to heat their houses with electricity.

We are also not going to drive electric cars (which cost an average $60,000 CDN and are useless in the winter as the cold reduces the range to about 1/2 what you get in the summer).

Protests against carbon taxation are just going to get worse in the Northern hemisphere. Why? People have no options. You can’t survive at sub zero temperatures without heat. People die of cold exposure in Canada every year. If you can’t heat your house, because of carbon taxes, what do you do?

Go march on Parliament and burn things in the streets. There is nothing else to do.

Except move to Brisbane. Average annual temperature is 26 degrees. Coldest day of the year has a high of 21 and a low of 11. You’ll still need to drive a car. But you can drive an electric one (no range issues, though it will be expensive), and A/C is optional (and electric).

#24 Cristian on 12.02.18 at 5:39 pm

Raging Ranter:

“But it takes two fools to create an excessive debt load – a borrower and a lender.”

You are kidding, aren’t you?!
Are banks the fools for lending money to fools? I doubt it. Banks are in the business of making money, and that is what they do. It takes one fool only to create an excessive debt load, and that is the borrower.

#25 TAX AND SPEND on 12.02.18 at 5:40 pm

We have to much government. Most working stiffs give up
more than halve of there labour to taxes when you consider all of them and it still isn’t enough they have to borrow more in the taxpayers name. Maybe this has something to do with people having no money. We have no leadership on financial matters.

#26 Dolce Vita on 12.02.18 at 5:43 pm

People buy stuff and bank using $ and not %’s.

Household net saving (millions of dollars, 0.84%, 3rd Qtr 2018):

10,372

Number of Households (2016, latest I could find):

14.1 MM

$ Saved per Household/year on average:

= $10,372MM/14.1MM

= about $736/year

The $10,372MM is ESTIMATED AND REVISED down from 4%. Your basic add insult to accident.

A 4% household savings rate would be (based on Disposable Income of $1,230,932MM, 3rd Qtr 2018):

$49,237.4MM

Per household = about $3,495/yr (a long country mile from $736).

Could not find ANYWHERE from Statistics Canada the rationale for revising the estimated savings rate down by so much.

I do not believe the 0.8% number with disposable income rising over the same period and insolvency rates at 7 year lows.

And no one, including YOU MY LIEGE, has questioned that big a revised drop (4%/0.8% = 5 fold drop).

Of course, this is counter to what I have been preaching for at least a year now that we are headed for a recession, 1st Qtr 2019.

Maybe Statistics Canada suspects this and has changed their number accordingly so they can say “we warned you”.

Source numbers (sans pretty % charts you can’t deposit at your local branch):

https://www150.statcan.gc.ca/n1/daily-quotidien/181130/t005a-eng.htm

Ya I know My Liege, Buonanotte.

#27 paul on 12.02.18 at 5:45 pm

Do you save? Monthly?

Most don’t. It’s shocking, in fact. The savings rate just hit 0.8%. So the average household spends 99.2% of what comes in.
——————————————————————–The fact is that .8% saving is negative when you factor H. E.L.O.C’s and sub prime mortgages. Calls almost everyday from brokers looking for private money to lend out at 12% or higher.

#28 JSS on 12.02.18 at 5:49 pm

Just came back from Canadian Tire. Family trip.
Bought over $100 of Christmas tree ornaments.

God damn it, why can’t people understand their priorities.

#29 A Yank in BC on 12.02.18 at 5:53 pm

Easy solution for the Doc and his squeeze. Buy that place in Burnaby. The 500k they have “saved” will be a whole lot more when they retire. Gosh.. easy peasy.

#30 JSS on 12.02.18 at 5:56 pm

Other reasons why families were saving more money in 1982:

– raises (non existent today)
– ET came out
– Michael Jackson- thriller
– Gandhi movie
– magnum Pi
– eye of the tiger song
– Commodore 64

Based on the above list, is it a surprise that people saved money back then?

#31 crowdedelevatorfartz on 12.02.18 at 6:10 pm

@#5 Raging ranter
“TD can express all the “concern” they want about the low savings rate. For the past decade, they’ve been doing everything possible to coax people into more debt, and grind that savings rate down to zero.

None of this is to excuse over-indebted fools from their own poor decisions. But it takes two fools to create an excessive debt load – a borrower and a lender. Neither TD nor any other big lender can wash their hands of this.”
+++++++

100% agreement.
Its way way way too easy to get credit.

#32 crowdedelevatorfartz on 12.02.18 at 6:18 pm

@ akasic record
“A boat is like everything else in your life, what you make out of it….”
+++++

Unless your boat is your principal residence or you earn a living from it fishing or touring……. its an expensive toy.

#33 crowdedelevatorfartz on 12.02.18 at 6:23 pm

@#30 JSS
“Other reasons why families were saving more money in 1982:

No cellphone “plans” costing $1000/year
No internet “plans” costing $1000/year.
Loans were , on average, 15% interest.
Banks were tight with their money.
The 70’s recession and unemployment was still on everyones mind.
Trudeau was deficit spending.
A house in Vancouver cost $80k.
Car Insurance was affordable.

#34 For those about to flop... on 12.02.18 at 6:25 pm

Detective Flop on the case…

For those interested, I believe this is the house that was being talked about in the photo.

It was removed from the market a few days ago, but I could find no sale in the system as yet

Look at this photo and the Vancouver Special in the background of the photo in the above post.

Case closed.

Sort of…

M44BC

https://www.zolo.ca/burnaby-real-estate/7777-1st-street

#35 El presidente trumpster on 12.02.18 at 6:28 pm

I was clearing a quarter mil by age 4… millionaire by 8. Saving!!….pfft .. get yerself a sugar daddy!

#36 Aunt And Uncle on 12.02.18 at 6:28 pm

They saved 10% of their gross earnings from the day they were married. Furthermore, were exempt from paying any taxes, and had a free home and car with a servant. Those days are gone now!

#37 Sideshow Rob on 12.02.18 at 6:30 pm

The low savings rate is due to a number of things. First off people in general are much less debt averse than they were in the past. Our ancestors were wise people. Us? Not so much. We have managed to financialize everything from vehicles to university. Debt was something to be used as a last resort. Like many things it’s far easier to get into debt than out of it.
Next we are governed beyond all reason. Total taxes are well over 50% of income. Traditionally that had led to, ahem “adjustments”. The parasite is truly killing the host. The host will soon have to shake it off.
Both of these factors are unsustainable. A reckoning of sorts is going to happen eventually. Hopefully it’s not the really painful kind.

#38 Remembrancer on 12.02.18 at 6:30 pm

#15 Negative on 12.02.18 at 5:09 pm
Not gonna lie, spending more than earning at the moment, so negative saving.
———————————————————–
Huh? Trying to understand the benefit of borrowing more to pay off your existing loan(mortgage), especially a long term one with what should be the most favourable terms of anything you can ever get short of a 0% car loan floated by any year end “clearances” being pushed by manufacturers looking to clear depreciating inventory…

#39 Dolce Vita on 12.02.18 at 6:37 pm

The savings rate numbers are misleading, estimated (inc. revisionist history as you will see below) and will depress people for some unknown reason.

The REAL STORY here is the COLOSSAL BLUNDER that Statistics Canada has committed in calculating household savings rates (and Trudeau wants us to trust them with our private data from the bank, fat chance, snowballs hope in hell).

The evidence:

1st Qtr 2018 Report:

4th Qtr 2017 Rate = 4.5%
1st Qtr Rate = 4.4%

2nd Qtr 2018 Report:

4th Qtr 2017 Rate = 4.5%
1st Qtr Rate = 3.9%
2nd Qtr Rate = 3.4%

3rd Qtr 2018 Report:

4th Qtr 2017 Rate = 2.3%
1st Qtr Rate = 1.3%
2nd Qtr Rate = 1.0%
3rd Qtr Rate = 0.8%

Our National Statistics agency has become K-Mart and an ardent HISTORY REVISIONIST.

I ASK YOU PEOPLE (and My Liege), how does a “done deal” savings rate for 4th Qtr 2017 change from 4.5% to 2.3%? Or the 1st Qtr 2018 Rate: 4.4% to 3.9% to 1.3%…going, going…gone.

Statistics Canada needs to explain its narrative here. The above number revisions, including the past, are unbelievable. The data has been cooked to suit a narrative.

Source Data (1st, 2nd and 3rd Qtr “Canadian economic accounts key indicators” Reports):

https://www150.statcan.gc.ca/n1/daily-quotidien/180531/t005a-eng.htm

https://www150.statcan.gc.ca/n1/daily-quotidien/180830/t005a-eng.htm

https://www150.statcan.gc.ca/n1/daily-quotidien/181130/t005a-eng.htm

The REAL Buonanotte.

#40 espressobob on 12.02.18 at 6:42 pm

Sacrifice. That’s the penalty you pay if you want to get ahead. Portfolios are built that way.

Do you need the latest and greatest of stuff? Probably not.

There is no one to impress down the road other than your well being.

Being a good saver is the first step to being a good investor. Why is that so bad? What will all that freedom be worth?

#41 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 12.02.18 at 6:44 pm

People in Toronto can’t save, they need to keep taking money out of HELOCS to buy tickets for their pathetic imitation hockey franchise!!

And just yesterday, the Make Believes management made another epic fail, signing William Nylander when they just don’t have the cap room to carry that forward.

Sounds like the Kessel trade all over again, LOL! (or dumping Lanny or Sittler, you name it, the list is sooo long of mgmt. fails)

Here’s a great analysis, written before the fact, that points out what the team just did will be a disaster.

https://www.theglobeandmail.com/sports/article-why-william-nylander-will-play-for-someone-other-than-the-leafs-next/

“The napkin math doesn’t work. The Leafs have become your poorly-thought-out auction-draft fantasy team. You take who you like for the first couple of spots, and that makes completing the roster impossible.”

“The Leafs are feeling the pressure so acutely not just because they’re oversupplied with young talent, but because they’re the Leafs. The expectation based on history is that they will find a way to get all their Sophie’s roster choices wrong.”

and:

“In business terms, it would be called premature scaling – spending too much on one aspect of what you do, to the detriment of others. It kills more start-ups than any other single cause. What are the Leafs right now but a century-old start-up?”

“In short order, this stops being a problem of tactics and becomes one of messaging. From now on, every stumble the Leafs take is put through the lens of how they handled the Nylander thing. It’s the first hard choice this management group has had to make. If everything goes wrong, this will be looked back upon as the initial mistake.”

What a deplorable city full of management morons who just cannot make good decisions. Your sports teams, your mayor and provincial politicians all just can’t see the forest for the trees.

And fools in the thousands have stopped saving and paying down debt, and gambled everything on crappy shacks and condos, just like their awful 52-year loser hockey franchise has gambled everything on a player who won’t fit in. Getting Nylander signed is like getting a new loan for the ‘investment condo’ that’s supposed to fix the balance sheet of an overindebted house-horny young couple. Same result is on the way, bwaahaahaahaaaaaa!!

Maybe there’s something in the water that lowers the average IQ in the GTA so dramatically…?

#42 Glengarry Girl on 12.02.18 at 6:48 pm

https://www.google.com/amp/s/www.theglobeandmail.com/amp/real-estate/article-townhouses-remain-a-big-missing-piece-in-torontos-affordability/

“The average family with two kids can afford $700,000,” Mr. Sokolowski said. “At today’s interest rates and qualifications levels, they need a combined income of $200,000 to afford that.”

Does anyone else read these articles and think this is such Delusion. Am I that out of touch or is the average Canadian Family able to afford a $700,000 house? MADNESS

#43 Dolce Vita on 12.02.18 at 6:57 pm

Parting shot:

THANK GOD Justin wasn’t tempted to tour outside of Buenos Aires dressed in his tickle trunk Gaucho outfit dancing with a set of Maraca’s in his hands and Chrystia at his side in her Prairie muchacha de la granja ensemble.

Ya My Liege, let the bullets fly.

Ciao d’Italia. I should not visit Spain quite so often…

#44 A box in the sky on 12.02.18 at 7:01 pm

Garth,
Can you clarify what goes into the savings rate calculation?

Does money invested into stocks/bonds count? Does money going into an RRSP (including a company match) count?

Basically wondering if this 0.8% is cash only or also investments

#45 SmarterSquirrel on 12.02.18 at 7:08 pm

How do people sleep at night with no savings?

By my math (https://smartersquirrel.com/how-much-do-you-need-to-retire) a 30 year old who makes $100,000 salary and wants to have similar income in retirement would need to save about $960/month to stop working at 65 and have enough money to live to 100 (assuming 2% annual inflation). That’s an 11.5% savings rate needed on gross income! A savings rate of 0.8%… what are people thinking?

CPP may be around by then but it doesn’t pay that much, and I doubt there’ll be much left for OAS or GIS, especially given the deficits being added to the debt these days! I hope people wake up and start preparing for their retirement, or for an unexpected job loss!

Time for folks to stop buying more and more stuff, and to start saving more and more instead. I was trying to find the amount of interest the average Canadian pays on their consumer debt every year. I wonder how it compares to how much the average Canadian saves every year. I think I’m afraid to know the answer!

#46 KLNR on 12.02.18 at 7:09 pm

@#37 Sideshow Rob on 12.02.18 at 6:30 pm
The low savings rate is due to a number of things. First off people in general are much less debt averse than they were in the past. Our ancestors were wise people. Us? Not so much. We have managed to financialize everything from vehicles to university. Debt was something to be used as a last resort. Like many things it’s far easier to get into debt than out of it.
Next we are governed beyond all reason. Total taxes are well over 50% of income. Traditionally that had led to, ahem “adjustments”. The parasite is truly killing the host. The host will soon have to shake it off.
Both of these factors are unsustainable. A reckoning of sorts is going to happen eventually. Hopefully it’s not the really painful kind.
________________________________

ah no.
one reason, easy credit.
simple as that.

oh, and history says our ancestors weren’t as wise as you might think.

#47 Moses71 on 12.02.18 at 7:10 pm

Being very young in the 80’s I remember hearing about adults saving in “safe” GICs, CSBs, etc. and talking about the interest rate workign to their benefit. Borrowing excessively would have been an act discouraged due to the astronomical rates.
With cheap rates and prices probably alot higher for the same relative purchases, would have discouraged the excessive borrwoing, non? Just a supposation

#48 KLNR on 12.02.18 at 7:11 pm

@#41 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 12.02.18 at 6:44 pm
People in Toronto can’t save, they need to keep taking money out of HELOCS to buy tickets for their pathetic imitation hockey franchise!!

And just yesterday, the Make Believes management made another epic fail, signing William Nylander when they just don’t have the cap room to carry that forward.
_______________________________

wrong blog loser/stan

#49 Vision on 12.02.18 at 7:15 pm

Not gonna lie, spending more than earning at the moment, so negative saving.

However the bulk of my spending is principle repayment on mortgage, so the house is a piggy bank? A piggy bank with side effect of being able to live in it.

I just hope it will have kept value in real terms, when it is sold after kids leave home.
———
Lol. Does this guy ever read your blog? I think he will find his piggy bank had a hole in it and his money dropped out of it.

#50 Leo Trollstoy on 12.02.18 at 7:27 pm

Just goes to show you that “educated” doesn’t necessarily mean “intelligent”

Can’t teach money smarts in school

#51 OttawaMike on 12.02.18 at 7:28 pm

Sadly this Tweet is not from the Beaverton:

Check out @JustinTrudeau’s Tweet: https://twitter.com/JustinTrudeau/status/1069214653169844227?s=09

#52 Sold Out on 12.02.18 at 7:39 pm

Real wages have flatlined since the 80’s, but the cost of living has gone nowhere but uppa,uppa,uppa. Nobody wants to voluntarily drop their standard of living, ergo the rise of credit. After 24 years in a union job, I was injured out of my well-paying job; the wages offered for jobs that I was retrained for equaled what I earned in the 80’s. Needless to say, I sold my grossly inflated GVA sfh and retired.

#53 Smoking Man on 12.02.18 at 7:40 pm

The last standup for globalism.

Merkel toast

The macaroni man from France, the giloteen is getting sharpend. Fire fighters refuse to put out fires and the cops take off their helmets after the dwarf calls on marshal law.

T2 oblivious to what is going on around him. 2019 is going to be fun. Hope can make it to the end of next year to give you ungreatfull dogs the news before it happens.

#54 Stan Brooks on 12.02.18 at 7:40 pm

Hm, that statistics.

A statement that Canadians save 0.8 % and spend 99.2 % of their income to live is actually an understatement.

True they save 0.8 % of total income but that is like 5 % of the population.

The spending part is the problem as Canadians continue to grow their public and private debt so they spend like 102 % with only private debt counted, 105-106 % with counting also the public debt.

So the picture is much more dire here.

What it/the picture tells us is what a Colossal Failure these policies of cheap money maintained for waaaaaaaaaaaaay too long proved to be to the society, economy and the cost of living.

1. We feature the biggest ever in the recorded history of (peoplekind) mankind credit bubble in housing with housing overpriced 3-4 times in GTA and Vancouver, perhaps more.

2. This drove insane inflation and increase in cost of living to the degree that even people with paid for houses can not now make ends meet.

3. Due to increases cost of living people can not retire and that situation will get worse and worse by the year.

4. Due to ridicules liberal tax policies people have less and less money to spend as any increases (if any) are taxed at marginal tax rates that do not change to reflect inflation.

5. Extensive outsourcing and abuse of temporary foreign labour due to the ‘demand of the big business’ that mister horse face/wild bill likes very much (as opposing to his dislike for the small business that is being killed by his ideologically failing policies is additionally demising the labour market.

6. Total failure in foreign policies and trade to a degree that T2 has to ‘invent’ fake initiatives not called by the corrupt and paid for media for what it truly is: lies and scam.

https://ca.yahoo.com/news/ex-ambassador-sums-u-s-canada-relationship-bad-163952071.html

7. Failure to address the opioids crises at federal level which makes the federal government look like a joke (instead of dealing with the criminals T2 is inventing fake contacts with China (probably to complain for the fentanyl inflow instead of addressing it by prosecuting the criminals responsible for it)).

https://www.canada.ca/en/health-canada/services/substance-use/problematic-prescription-drug-use/opioids/data-surveillance-research/harms-deaths.html

When people do not want to address an issue, they talk about it (sometimes it it a fake, self-talk).

8. Lack of savings and overall indebtedness makes TSX nonperforming, what can 0.8 % sitting in GICs do to stimulate investment, when foreign investments (not just in the oil patch) is leaving?

To sum it up: artificial economic ‘activities ‘that we enjoyed in the past 15 years were primarily driven by consumption; cheap credit drove cost of living sky high, incentives to ‘invest’ in housing drove severe capital miss allocations, our economy became fake, hollow and non competitive and now we face a severe decline in standard of living as capital flows out and credit normalizes that will drive with a 101 % percent certainty a (most likely inflationary) depression at the current debt levels and the hostile international protectionism environment. So these 15 years were the good years, the bad are straight ahead with the most obvious collateral damage: the non retirement of entire generations and lack of jobs for another few.

The attempts to blame somebody else/external evil forces as contemplated by banks and by the paid for media (another 600+ millions to the private media in addition to the billions for CBC) will be futile.

This (the slaughter of the herd) was a calculated strategy, the result of a set of policies, a conscious choice made by our elite, which speaks volumes about it’s leadership and qualities.

It is time for the owners of the herd to pay some attention to it as clearly the idea that the herd (suppressed to the degree of inability to breed and reproduce) can be easily replaced with quality educated cheap labour from abroad is failing miserably.

Who in their right mind will come to an extremely expensive place (with unattractive weather) in order to compete openly with the cheap labour of the world while paying ridiculous taxes?
(including T2’s carbon tax idiocies).

Legalizing idiocies like the Cardon tax and MJ’s use do not make it less idiotic.

#55 Phylis on 12.02.18 at 7:41 pm

Futures up >400 at the moment…..

#56 Linda on 12.02.18 at 7:42 pm

I had wondered about the picture of the day. Nice to know location & also that it is a house – I was thinking duplex or maybe condo based on the photo.

Regarding savings: always have done & continue to do so. When one has only oneself to rely on to provide life’s necessities, having that little cushion to fall back on in times of crisis makes the difference between gnawing at the fingernails to the tips or chewing them right down to the quick. Plus being able to sleep at night. Over the years, circumstances changed but the habit remains. Doesn’t matter if I’ve a workplace pension – just ask former employees of Nortel & Sears or talk to folks who worked or work for Air Canada if a reminder is needed on how that ‘sure thing’ could suddenly diminish or outright disappear. Besides savings, I also maximized what RRSP room I was permitted under pension rules & the moment a TFSA came along took care to top that to the limit right from the get go.

So I completely agree with Garth – dump the Victoria place unless you are absolutely sure (as in, you have a signed offer of employment) you will be returning there to practice in the near future. Get rid of the debt & since you are responsible for your own futures, get thee to a decent advisor & start loading up a balanced portfolio asap. Plus maximize both the TFSA & the RRSP contributions. Retirement may sound a long way off, but it is truly astonishing how fast those decades fly by. Just remember, you snooze, you lose & one thing you can not get back is time. You are already in your 30’s – time to put that financial pedal to the metal.

#57 crowdedelevatorfartz on 12.02.18 at 7:46 pm

@#34 Detective Flopster

I believe you have found the same place.
Well done.

#58 Victor V on 12.02.18 at 7:55 pm

Dow Jones Futures Skyrocket After Trump-Xi Meeting Ends With China Trade War Cease-Fire

https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-trump-xi-meeting-china-trade-war-truce-apple-stock/

Dow Jones futures skyrocketed Sunday, along with S&P 500 futures and Nasdaq futures following a tariff truce at the Trump-Xi meeting. President Donald Trump and Chinese President Xi Jinping on Saturday agreed to halt new tariffs and avoid escalating the China trade war. The Trump-Xi meeting outcome puts on hold higher Trump tariffs on Chinese goods, including possible duties on the Apple (AAPL) iPhone. A China trade war cease-fire could be good news for Apple stock, Tesla (TSLA), Deere (DE) and U.S.-listed Chinese stocks such as Alibaba (BABA). Chipmakers, perhaps notably Qualcomm (QCOM) and NXP Semiconductors (NXPI), also could benefit.

The positive Trump-Xi meeting comes after dovish comments by Fed Chairman Jerome Powell fueled the best weekly gains of 2018 for the Dow Jones, S&P 500 index and Nasdaq composite. Fed Chairman Powell said late Wednesday that interest rates are “just below” neutral.

#59 mogulrider on 12.02.18 at 8:00 pm

Here’s why no one saves IMHO

I recently bought a new truck and replaced my old one. I sold it privately for 7K more than the dealer would give on trade.

I bought the vehicle. No financing or lease becuase we keep our behicles typically 7-10 years. We save and have resources to do this..

The dealer salesperson said to me ” umm. Are you buying the truck? I said yup. Well uh I’ll have to check to see how we take a certified cheque….

I said what? He said yeah he’s worked here 8 years and never seen anyone buy a car…..

“All the customer asks is – what’s the payment? he said..

I thought for a minute and said – do they go overboard if the payment is low? He said every person he deals with takes leases for what they can get – not what they need. They match the car to the available lease money.

Ladies and gentlemen – I’ll let you in on a little secret if your parents never taught you…

You don’t max out your car payment to what give you.
You also don’t get mortgages for what they give you as well. A good measure is buying a property on one income so if one of you gets nuked you can still make the payment..

Has the world gone crazy?

BTW it took him 24 hours to figure out how to do the paperwork on a purchase.

In fact accounting did it… they didn’t want him doing it…

Not becuase he was stupid but becuase they didn’t want him selling vehicles without a lease….

Teh world has forgotten 7-10% interest rates. And boy are you in for a surprise

#60 Stan Brooks on 12.02.18 at 8:00 pm

https://twitter.com/JustinTrudeau/status/1069214653169844227?s=09
#51 OttawaMike on 12.02.18 at 7:28 pm
Sadly this Tweet is not from the Beaverton:

Check out @JustinTrudeau’s Tweet:

https://twitter.com/JustinTrudeau/status/1069214653169844227?s=09

Hey @Trevornoah – thanks for everything you’re doing to celebrate Nelson Mandela’s legacy at the @GlblCtzn festival. Sorry I can’t be with you – but how about Canada pledges $50M to @EduCannotWait to support education for women & girls around the world? Work for you? Let’s do it.

No worries, wild bill will invent some new taxes, as these handouts, including media buyouts, other worthy international causes has to be paid for.

T2 is acting like Nero, handing out massive amounts of (our tax) money while his treasury is empty. Nero was arguably more intelligent.

Wondering whether his Carbon tax will make ROME burning as currently Paris is.

#61 crossbordershopper on 12.02.18 at 8:01 pm

if people could write off their home mortgage like they can in the usa, and property tax(yes seniors in ontario bla bla bla subject to limits) and live in a nice warm state like florida with no state income tax you could easily save 10% of your income, its basically the tax differential you didnt have to change anything in your lifestyle.
poor tax planning in Canada, morneau offering higher cca rates to business buying equipment is great, the problem is that 70 percent of the economy is service, a lot less equip is needed as well the spin off is low, most of the equip is made in germany japan or usa. well the good stuff anyway.
tax code, high barrier costs here to operate, few customers, cheap customers, etc. all lead to lousy life, so people supplement it with debt. the leverage gets them a little farther down the road. over 30 years your stress level becomes accomodated to the new normal of having a huge debt over your head.
because debt is a drug.

#62 mogulrider on 12.02.18 at 8:12 pm

It took my wife and I buying and selling 8 houses to have the equity to build our final house in Canada.

No today boy

gotta have that granite right now and the seven sink ensuite…

My mommy said I was special………

Little princess and prince who were told they were speical all their lives demand the lifestyle and goodies to go with it…

It doesn’t take much of a village idiot to see whre this will go..

Some parents here can take some responsibility for raising your kids this way…

You wrecked them and now they will pay dearly becuase of it with underwater mortgages and bankruptcy…

#63 mogulrider on 12.02.18 at 8:14 pm

What’s the payment?

That is why they are broke with little savings

#64 Our Leader on 12.02.18 at 8:15 pm

The PM is working hard for the betterment of Canada, and under his leadership a lot has been done. Just ignore the Smoking Man for his unkind words, because he is an ex-patriot in love with Trump, and has no respect for Canada anymore. I heard he even bought a CAT while in California, so need I say more!

#65 Tony on 12.02.18 at 8:18 pm

Re: #16 Crazyfox on 12.02.18 at 5:13 pm

Trump realizes America is going to lose the trade war to China. China will never lower their tariffs on American goods.

#66 NoName on 12.02.18 at 8:18 pm

#45 SmarterSquirrel on 12.02.18 at 7:08 pm

Hey squierl why did you left out cpp and ei in your calculations? It is kind of tax, not that is huge money but adds up to around 310cad a month, for employees and double that 620cad for self employed?

#67 yvr_lurker on 12.02.18 at 8:23 pm

It certainly did not make much sense to buy a place in Victoria when they are in the middle of residency and do not have permanent job that ensures they will remain in the same city. Not much sympathy here on my end with this move. If the Gov’t did not pour gas by reducing the interest rates to all-time lows, at the same time as not curbing foreign speculation which has been rampant in our major cities, the savings rate of locals would be in better shape. People do need places to live after all, and it has been a much tougher situation in recent years than in the past…

#68 Linda on 12.02.18 at 8:33 pm

Blame the taxes, blame the banks, blame anyone & anything other than ourselves for not saving. Anyone can save, but it requires 1) not buying stuff you don’t need; 2) not buying stuff you can’t afford; 3) actually setting money aside before you spend it. Paying yourself first via an automated deduction from your pay is one way to do it. The tricky part for most is not dipping into the savings any time you see 1) stuff you want, regardless of whether you need it & 2) stuff that you want, regardless of the price tag because ‘oh, I’ve that money in my savings account’.

As for credit cards, HELOC’s, loans et al: just because you qualify for them doesn’t mean you are required to sign up for them. Purchasing something is a choice. ‘But I NEED somewhere to live!’. Indeed you do – but do you ‘need’ that penthouse suite with the concierge, or would sharing a modest apartment with or without a buddy suit your budget better? ‘But I NEED clothes for work!’ Depends on the job – some provide uniforms & for those that don’t, business professional does not mean you ‘must’ wear designer labels from exclusive shops. ‘But I NEED to eat!’. Indeed, so learn to cook if your tastes run to filet mignon six nights out of seven. Trust me when I say you can eat high on the hog on a beer budget if you know how to cook.

Living within your means used to be something to be proud of. When did it become a sign of shame, poverty & deprivation? Who is it you are trying to impress & why?

#69 Reality is stark on 12.02.18 at 8:37 pm

How many times do I need to repeat the obvious? People in this country are deluded.
They are educated by Marxists who extort what is left of the private sector. In the last 10 years public sector wealth growth vs. the private sector is obscene and unsustainable.
We are hewers of wood and drawers of water, no more and no less. Future GM type employment is history.
People who made money on housing will have it all taxed back as subsequent governments rape those who found one of the few angles left to make profits. The government will not rest until it has stolen that money back.
Canadians main concern in life is to find a government agency that owes them. They expect the Family Court to provide an income for life. If it is not enough there is always another program that they must be eligible to collect what is rightfully theirs.
This indoctrination is systemic, HELOC’s are just a byproduct of a populace that is financially illiterate. A marriage certificate is the ultimate goal, it absolves you of any financial restraint. The courts will make you whole.
The Vancouver real estate devastation has affected a couple doctors who don’t deserve any sympathy, imagine the pain for other millennials that don’t have a $300,000 family income.
GDP in this country is about to go negative as the real estate party ends and the divorce party begins. The country is a farce and the people’s expectations are based on Kardashian fantasy. The lunatics you see shopping in the malls have no idea what is about to hit them.

#70 Smoking Man on 12.02.18 at 8:38 pm

#64 Our Leader on 12.02.18 at 8:15 pm
The PM is working hard for the betterment of Canada, and under his leadership a lot has been done. Just ignore the Smoking Man for his unkind words, because he is an ex-patriot in love with Trump, and has no respect for Canada anymore. I heard he even bought a CAT while in California, so need I say more!
……

A Cat. Dear God. I love Canada with all my heart, you don’t even know me and why I had to go.. If I bought anytime it would be a pussy. And just for writing inspirational ideas

What’s in a word or two.

#71 X on 12.02.18 at 8:43 pm

The current federal funds rate is 2.25% from teh September 26, 2018 meeting. I believe the Federal Reserve indicated it would raise rates to 2.5 percent in December 2018, 3.0 percent in 2019, and 3.5 percent in 2020.

So maybe up at the Dec 19th meeting and 2 more rate hikes in 2019???

For Canada….one would wonder if we would have 3 rte hikes in 2019 on one hand, as we are behind that of the US in raising, however our economy seems to be like our personal finances, one paycheque away from folding……

#72 Loonie Doctor on 12.02.18 at 8:49 pm

Medical school is 3-4 years. Residency is 2-6 years for most doctors. They may not be in the same place. A job when finished is usually elsewhere also. Buying a house with a few year time frame before moving is generally speculative/gambling. Throw in student loans and a mortgage and it is like gambling with leverage! Dumb, but I still hear otherwise smart medical trainees talk about buying a place as an “investment” frequently. Scary.

#73 LP on 12.02.18 at 9:01 pm

#9 SW on 12.02.18 at 4:43 pm

Believe me, my young friend, there is nothing — absolutely nothing — half so much worth doing as simply messing about in boats.
********************************
Attribution:
from “The Wind in the Willows”, by Kenneth Grahame.

#74 yorkville renter on 12.02.18 at 9:01 pm

Drs are notoriously bad with money.

#75 will on 12.02.18 at 9:06 pm

sigh. yeah, no tears for the doc.

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

#76 Raging Ranter on 12.02.18 at 9:09 pm

Cristian, say today I lent money to someone I know I probably shouldn’t have. Am I a fool or not? Why apply a different standard to a bank? Banks don’t exist in a vacuum. Sooner or later all that debt is going to start hurting their bottom line. Foreclosures and bankruptcies hurt bank profits. That was true in the early 80s, true again in the early 90s, and will be true again in the next recession. Banks wouldn’t have been clamouring for stricter OSFI rules last year to save them from themselves if they were such responsible lenders.

#77 Viorelli on 12.02.18 at 9:12 pm

My advice to the doctors: move down south and get a green card, many states fully recognize our educational criteria and you will not be reexamined. My son’s friend who is an anastasiologist is in northern Nevada, no income tax, writes off his mortgage, huge house in a gated community with a swimming pool and 3 car garage, $600. Or two years of after tax income, cheaper gas, car insurance, house insurance, and groceries. Must spend a little on medical, but it’s too notch without waiting lists and services in broken English. Good hiking, camping, and skiing in Utah is not that far away. Many professionals here in Vancouver cannot even afford to ski in Whistler or secure a campground anymore as the place is overrun with international elite who drive Ferrari SUVs with L stickers. If you want to have a good quality of life and raise happy kids I advise you to leave BC as its getting really delusional here, unless you’re from a affluent family you have no chances to get ahead, the North American dream is dying here and it’s a fact. I had it much better than my kids or grandchildren will ever be.

#78 Rexx Rock on 12.02.18 at 9:17 pm

#54 Right on Stan Brooks.Well written and explained.I wish Garth would come out and say the real truth of the NWO evil agenda.

That would be a waste. There isn’t one. – Garth

#79 Sebee on 12.02.18 at 9:25 pm

Everyone watching Garth: Live from Notre Dame!

…on CBS?

#80 the ryguy on 12.02.18 at 9:27 pm

#59 mogulrider on 12.02.18 at 8:00 pm
———————————————–

I had almost the exact same experience. I considered trading in when I sold a company and no longer needed such a big truck. So I took into the dealership for a power polish as it had the company logo on it. While waiting I looked around the lot, I found a nice one I liked, test drive etc etc..ok whats the damage? Dude gives me a piece of paper with a monthly payment..ok not what I asked for but I do some quick math and just start laughing at them. “No thanks” and I went back to the waiting area to play candy crush.

10 minutes later the “sales manager” comes over, gives me another piece of paper with a different number..but over 7 years. I said Ill pay the difference in cash if you give me a reasonable number..he couldnt give me answer that day, called me the next day and said $42k..again I laugh.

The “GM” called me a couple days later..$38k, no. Couple days later $35K.. I said $30k, he said no…he called back a couple days later and said he “worked” the owner and they would take $30k..ok deal.

Had I taken the other “deal” at $42k I would have payed over $6200 in interest. I can only imagine how many suckers are driving around and having no clue what their vehicle will actually cost them when/if they ever fully pay for it. A little financial literacy can go a long way. Also..be willing to just say no.

#81 Unhinged Trader on 12.02.18 at 10:10 pm

If no one saves, where the hell do these 20% downpayments on million-dollar OBS/gypsum/ply monster homes come from?

Speaking of McMansions, check out this blog:

http://mcmansionhell.com/

Baby Boomers were a mistake.

#82 Boats on 12.02.18 at 10:15 pm

#73 LP – Canadian Tire has the best dinghy of all called the Water Tender made in USA. The price with the exchange rate is equal too. The best motor for a 2.6 or 5 HP is made by Coleman which was a big surprise too, and the price for both looks very attractive – reviews were very high. One guy complained that the motor didn’t work too well high in the mountains lol.

#83 Happens all the time ... on 12.02.18 at 10:15 pm

#80 the ryguy on 12.02.18 at 9:27 pm

#59 mogulrider on 12.02.18 at 8:00 pm
———————————————–

I had almost the exact same experience. I considered trading in when I sold a company and no longer needed such a big truck. So I took into the dealership for a power polish as it had the company logo on it. While waiting I looked around the lot, I found a nice one I liked, test drive etc etc..ok whats the damage? Dude gives me a piece of paper with a monthly payment..ok not what I asked for but I do some quick math and just start laughing at them. “No thanks” and I went back to the waiting area to play candy crush.

10 minutes later the “sales manager” comes over, gives me another piece of paper with a different number..but over 7 years. I said Ill pay the difference in cash if you give me a reasonable number..he couldnt give me answer that day, called me the next day and said $42k..again I laugh.

The “GM” called me a couple days later..$38k, no. Couple days later $35K.. I said $30k, he said no…he called back a couple days later and said he “worked” the owner and they would take $30k..ok deal.

Had I taken the other “deal” at $42k I would have payed over $6200 in interest. I can only imagine how many suckers are driving around and having no clue what their vehicle will actually cost them when/if they ever fully pay for it. A little financial literacy can go a long way. Also..be willing to just say no.
—————————————————————-
I walked into Lordco looking for a set of airbags for my truck after looking online and seeing I could buy them for $200.00. Lordco wanted $700.00 so I said no thanks and started walking but the nice sales lady at the counter ([email protected]) called me back and said she would look them up in her book for her “better customers.” … $400.00. “No thanks” again I said so she offered to look them up in another book for “our very best customers” … $220.00. So I asked “what is the difference between the $700.00 ones and the $220.00 ones? Her reply was “there is no difference.”
Just a bigger sucker I figure. I walked …

#84 The Great Gazoo on 12.02.18 at 10:40 pm

Should be a good day tomorrow for the TSX and energy stocks in particular. Excellent move by Premier Notely.

JT socks wasn’t doing anything to help with a short or medium solution and the we’ll see if his government can actually get approval to expand Trans mountain pipeline?

Premier Rachel Notley moves to restrict oilsands production in face of oil price crisis

https://nationalpost.com/news/politics/we-need-to-do-more-notley-to-announce-plan-to-reduce-oil-price-differential/wcm/9e82216e-0183-4781-88bd-52b5b99b95d5?video_autoplay=true

#85 crowdedelevatorfartz on 12.02.18 at 11:03 pm

Apparently Trudeau’s tweet is gaining some legs in the twitterverse.
Amateur Hour by a politician heading into an election year……. the spin doctors will be workin OT in the PMO’s bunker tonight to ‘splain this childish tweet.

Hard to believe but Trudeau’s “um ah err ah um” speaking style is losing ground to his inane tweeting……

#86 Hamsterwheelie on 12.02.18 at 11:06 pm

My goodness ya’ll don’t know how to live within yer means?
Never in all my years have I made anything like that kind of money.
Didn’t have a credit card until I was in my thirties & have never once carried a balance. When we bought our first house I was 40 & payments were less than rent.
I have a rule on ‘large’ (over $1000) purchases – will it make me money?
This rule applies to our houses too – each one duplexed or 4plexed and I really have trouble with the concept of buying a ‘nice’ (very expensive home that costs a lot of money to maintain at the top of the market in a city famous for overblown RE prices) But hey, I feel exactly the same way about cars – which is why I no longer have one. Between Uber, walking, bikeshare and renting the newest car off the lot for any road trips I’m thrilled to never own a depreciating, insurance sucking, maintenance beast again.
Who taught you this was the way to live a life? Working yourself silly for things?

#87 Tom from Mississauga on 12.02.18 at 11:14 pm

Hey Garth, can you do a post on where all these variable rate mortgage are at? With the 5 BoC hikes are these people paying any mortgage principle? Remember all the talk of negative rates in 2015/6? What is a 2020 renewal look like?

#88 People watching people on 12.02.18 at 11:19 pm

I suspected the savings rate was in the toilet. Banks ads wanting your cash for savings have been very prominent the last year, after being basically non-existent for the last 15 years.

I’ve been commuting on the TTC for 5 years now, same route, same time and I’ve never seen random riders in their business attire arguing, let alone coming to blows over space, but it’s happening weekly right in front of my eyes. People get testy during the holidays when they can’t afford the things they think their family should have, at least that’s what my better half thinks and I tend to agree.

#89 TurnerNation on 12.02.18 at 11:29 pm

A double-digit IQ means you accumulate money slower but lose it faster.

With a triple-digit IQ you get your money faster then blow lots of it , but more slowly.

I shall consider this theory when I take a Masters of Herdonomics at SMU. (Two drink minimum)

#90 Fortune500 on 12.02.18 at 11:31 pm

I don’t know, this kind of ‘savings’ numbers can deceiving. Most people have seen the massive incentives given to put money into housing instead of other investments and have done so and been rewarded massively.

I know many boomers and even some Gen-x types who have been downsizing and securing their retirements over the last two years. From here it looks like they made the correct retirement ‘savings’ approach that was being signaled by the market and the government. Your house IS your retirement now in Canada.

#91 Ustabe on 12.02.18 at 11:38 pm

@mogulrider: The dealer salesperson said to me ” umm. Are you buying the truck? I said yup. Well uh I’ll have to check to see how we take a certified cheque….

I said what? He said yeah he’s worked here 8 years and never seen anyone buy a car…..

While I admire your story telling expertise I have to tell you that isn’t how it works. I currently have an adult son who is in management for a significant auto dealership group and have been, in the reasonably recent past, a silent partner in two different dealerships.

Finance has zero to do with sales and vice versa and any dealer ship is well aware of how to take your money no matter in what form.

Hell, I recall phoning around finding grain storage space during the late 70’s, early 80’s because we were allowing farmers to use grain as the down stroke on new trucks.

Trust me, auto dealers will take your money and it doesn’t take them long to figure it out. Again, trust me, folks pay cash every week, folks use AMEX weekly, folks finance daily. And how do you have a cert cheque for the exact amount before you have gone through finance?

But good story anyway.

#92 barnz0rz on 12.02.18 at 11:42 pm

Paying interest is for chumps. People don’t get it. It doesn’t matter how low the payment is, if you are paying interest, your getting played. Never buy a new vehicle on payments unless you are getting zero interest. Buying a home “oh I got a great rate and I can afford the payment”… Yeah, even on a modest condo or townhouse these days you’re still spending at least $200k on interest over amortization… And the days of doubling your home value quick are over. People are dumb with money. I fear for what retirement will look like in 30 years for a lot of people.

#93 Ronaldo on 12.02.18 at 11:49 pm

#34 For those about to flop… on 12.02.18 at 6:25 pm
Detective Flop on the case…

For those interested, I believe this is the house that was being talked about in the photo.

It was removed from the market a few days ago, but I could find no sale in the system as yet

Look at this photo and the Vancouver Special in the background of the photo in the above post.

Case closed.

Sort of…

M44BC

https://www.zolo.ca/burnaby-real-estate/7777-1st-street
————————————————————–

Flop, I did some further detective work on this one. Originally sold for 1.095 million and torn down. Rebuild in 2018. Open house Sept. 29th. Asking 1.783. Current assessment 1.505.

http://adamlloyd.ca/property/7777-1st-street-burnaby-bc-v3n-3v1/

#94 SunShowers on 12.02.18 at 11:49 pm

#33 crowdedelevatorfartz on 12.02.18 at 6:23 pm

No cellphone “plans” costing $1000/year
No internet “plans” costing $1000/year.

———————-

Spoken like an out of touch curmudgeon who hasn’t had to search for a job since the late 80s.

You can’t even get a job at McDonalds without being able to get your schedule online at any time, not to mention the multitude of other jobs that require you to be able to respond to emails at a moment’s notice no matter where you happen to be.

And yes, old timer, data plans actually do cost that much.

#95 Ronaldo on 12.03.18 at 12:03 am

#57 crowdedelevatorfartz on 12.02.18 at 7:46 pm
@#34 Detective Flopster

I believe you have found the same place.
Well done.
————————————————————–
The house in the photo is 8187 12th avenue next door to the one at 7777 1st street which was a rebuild in 2018 and currently listed for 1.783 mil. There is no current listing for the one in the above photo. See my reply to Flop. Something doesn’t seem right here. Are you a realtor Sue?

#96 Fish on 12.03.18 at 12:19 am

Ontario Retirement Pension Plan
Actuarial Funding Report as at January 1, 2018

https://www.fin.gov.on.ca/en/pension/orpp/actuarial-funding-report.html

#97 Ronaldo on 12.03.18 at 12:40 am

#34 For those about to flop… on 12.02.18 at 6:25 pm
Detective Flop on the case…

For those interested, I believe this is the house that was being talked about in the photo.

It was removed from the market a few days ago, but I could find no sale in the system as yet

Look at this photo and the Vancouver Special in the background of the photo in the above post.

Case closed.

Sort of…

M44BC

https://www.zolo.ca/burnaby-real-estate/7777-1st-street
————————————————————-
Flop, upon checking the company on the for sale sign Arcane Developments, I see that they had a one day fire sale on 6 other places they are trying to flog to some greater fool. You can go on facebook and check that out under that name. One of the others on that one day fire sale was 8450 15th Avenue, Burnaby. This place was also originally purchased as a tear down. The asking price was 1.295 and it sold on May 20, 2016 for 1.355. The place was torn down and a monster of a place was built. It had been listed for 2.399 and listing taken off the market. The current assessment is 1.815. Here it is.
I don’t think they will break even on this one. Like why would you have a one day fire sale. How goofy is that? Shows how desperate these dudes are to dump these places. Like people are going to come stampeding to buy them. How yesterday is that? Keep an eye on those 7 listings Flop. They should be a good measure of what is happening out there. Here are the other 5.

825 Lillian St., 933 Jarvis St., 809 Crestwood Dr., 682 Porter St., 686 Porter St., all in Coquitlam.

https://www.buzzbuzzhome.com/ca/8450-15th-ave-burnaby

#98 David Driven on 12.03.18 at 1:20 am

It’s crazy how universities force kids who want to Master or Post Grad to leave their, home, job, families, security and move across the country where they have no job, no security, no support system and no home, crazy. Why a student can’t Undergrad, Master and Post in the same institution is really assinine, and extremely hard for young people who are trying to become successful.

The young couple did everything right until the decided to keep the anchor baby in Victoria, given the odds of employment being low there post Grad, they made a huge mistake.Residencies are as rare as a winning lottery ticket and very much a political game called “diversity”. Canada’s treatment of it’s own in that regard is shameful. The blame lays squarely on the shoulders of Chancellor’s and Boards of Regents who upon appointment suddenly think they’ve become global citizen adhersts to any flavour of the month UN boondoggle. Seats are sold, allocated and grants proffered, just not to Canadians.

My friends girl is a PhD candidate removed from McGill to UVIC , her poor generous Dad bought his brilliant neurosurgeon daughter a condo to reside in, to reside in some small comfort vs the moldy , dangerous, bedbug infested rental stock.. Not only has the market fallen 25% but the ” foreign ownership tax” hit this Canadian with a whopping extra $10,000 p/a non residents slap in the face. Why are we doing this to our fellow Canadians and finest talent? He’s out well over a hundred grand.

My advice to this young couple and all like them is to move to the United States where they will be welcomed with open arms. Getting out of Canada is the best long term financial plan for these grads anyone could ever advise. In Trump we Trust.

Prices are falling elsewhere for similar reasons.

https://www.smh.com.au/business/the-economy/house-prices-falling-at-fastest-pace-since-the-gfc-20181203-p50jtf.html

#99 yvrmc on 12.03.18 at 1:22 am

#64 Our Leader…. is working for everyone else in the world…. nice , but not his freakin job….I want selfie boy to take care of OUR girls, OUR homeless, OUR mentally ill , OUR seniors, OUR soldiers , OUR businesses ,OUR national debt, OUR national budget which will not balance itself no matter how much he fantasizes that it will ..working for the betterment of Canada ???.. I think even your delusional mind might get the picture….

#100 Stan Brooks on 12.03.18 at 2:39 am

What is interesting is the bank’s stand on this debt crisis:


https://ca.finance.yahoo.com/news/unimpressive-capital-u-slower-growth-troubling-sign-canadian-economy-193251479.html

Avery Shenfeld, CIBC’s chief economist, says Canada needs to do better.

“The Bank of Canada was hoping that business capital spending would emerge as a
replacement for housing as a growth driver, and in Q3 it went the other way, as companies
reduced equipment and structures,” says Shenfeld.

They/the owners basically said: we gave you in excess credit/money, we transferred the risk to CHMC/the taxpayer and now we, the most prudent banks in the world want our money back and are displeased by the performance of the shepple who can’t pay it.

Any chance of transferring back all the over 1 trillions in mortgage insurance back to the banks?
After all, remember, these are all prudent loans, no sub-primes here, it is very unfair for the government/CMHC to benefit though mortgage insurance from the exemplary work of our banks.

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


That would be a waste. There isn’t one. – Garth

Agree, this is local stuff.

#101 Howard on 12.03.18 at 4:20 am

I thought savers were a reviled, hated species in Canada upon whom the Bank of Canada has been waging war for the past decade?

#102 mogulrider on 12.03.18 at 5:32 am

#80 Its amazing.

I should qualify my previous statement, it’s not that making payments is totally bad if that is what you have to do.

Its taking that first offer.

Everyone needs a vehicle today I get that. I made 7K selling hte vehicle myself. Mot people just trade them in for what they give them…

But your deal is exactly what I was driving too.

You saved $12,000! translated into lower payments and lower obligations even for those who need to go monthly…

BTW great deal!

#103 Under the radar on 12.03.18 at 6:08 am

“Owning ” real estate is ingrained in people’s psyche, it means security, stability and a storehouse of value. The entry cost of owning in Toronto requires extreme leverage and a disproportionate amount of income to service the debt or fairly significant amounts of capital as a down payment and or an income that relatively few have. The cost of living in Toronto is very high, especially if you are not self reliant and depend on everybody else to do things for you , or your circumstances in life are such that you make just enough to get by. I suspect a significant amount of people, maybe four in 10 are in this latter category.This is why people have nothing left at the end of the month.

#104 Howard on 12.03.18 at 6:28 am

#52 Sold Out on 12.02.18 at 7:39 pm

Real wages have flatlined since the 80’s, but the cost of living has gone nowhere but uppa,uppa,uppa. Nobody wants to voluntarily drop their standard of living, ergo the rise of credit. After 24 years in a union job, I was injured out of my well-paying job; the wages offered for jobs that I was retrained for equaled what I earned in the 80’s. Needless to say, I sold my grossly inflated GVA sfh and retired.

—————————————

At least you’re not one of those Boomers that stayed on the job well past retirement age, blocking the advancements of everyone younger.

I’m convinced many such Boomers just hang on out of spite, not wanting to see their younger colleagues attain the executives posts that the Boomers were handed on a silver platter.

#105 Howard on 12.03.18 at 6:36 am

#94 SunShowers on 12.02.18 at 11:49 pm

#33 crowdedelevatorfartz on 12.02.18 at 6:23 pm

No cellphone “plans” costing $1000/year
No internet “plans” costing $1000/year.

———————-

Spoken like an out of touch curmudgeon who hasn’t had to search for a job since the late 80s.

You can’t even get a job at McDonalds without being able to get your schedule online at any time, not to mention the multitude of other jobs that require you to be able to respond to emails at a moment’s notice no matter where you happen to be.

And yes, old timer, data plans actually do cost that much.

————————————-

Do they STILL cost that much? Have they not come down at all? I haven’t lived in Canada in several years.

In France, where I now live, my cellphone plan is 10€ a month (~$15 CAD), and includes unlimited texting and calls within the EU (cheap long distance options are available for a supplement), and 50 GB of data.

I realize Canadians are screwed little sheep when it comes to internet/mobile, but I was under the impression it was improving with a bit more competition compared to a few years ago.

#106 MF on 12.03.18 at 7:09 am

“Real estate did this. Families owe more than $2 trillion, almost 70% in mortgages.”

-You bet it did. The flip side of this is that those who tried to be prudent, do the right thing, save and invest, and who are renting, are paying high rents to “landlords” who overextended themselves. Now their savings rate dwindles too as money is flushed down the toilet paying rent.

What a vicious cycle.

Let’s all remember the Bank of Canada governors telling us about worrisome debt levels while they kept interest rates at “emergency levels” years after the emergency ended. Stellar move. The policy worked out well obviously.

MF

#107 Frank The Tank on 12.03.18 at 7:10 am

With all due respect, I don’t see how renting would spur people to save.

Rent prices are just as high as mortgage payments and are increasing YOY. Now you could argue saving on carrying costs (i.e. prop taxes), but does that REALLY move the needle that much further? Would most renters have the discipline to take that “extra money” and save it?

No matter what an old curmudgeon says on this forum, the cost of living is very high these days. Hell, they are burning Paris down over that exact reason. Wages need to increase – that’s #1.

#108 jess on 12.03.18 at 7:11 am

personal saving rate
https://fred.stlouisfed.org/series/PSAVERT

https://en.wikipedia.org/wiki/Savings_and_loan_crisis#Major_causes_and_lessons_learned

#109 Howard on 12.03.18 at 7:34 am

Was Justin in Buenos Aires dressed as Eva Peron?

#110 BillyBob on 12.03.18 at 7:43 am

#80 the ryguy on 12.02.18 at 9:27 pm
———————————————–

Had I taken the other “deal” at $42k I would have payed over $6200 in interest. I can only imagine how many suckers are driving around and having no clue what their vehicle will actually cost them when/if they ever fully pay for it. A little financial literacy can go a long way. Also..be willing to just say no.

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

Love it.

First rule of negotiation: always, ALWAYS be ready and able to walk away.

Meanwhile, just trying to figure out what to stuff in my ISA here in the UK. (Roughly equivalent to TFSA in Canada.) It’s a little harder, the adult limit for 2018-19 is £20,000 (about $33,000 CAD).

A tad nicer than $6,000 for tax-free growth. Could be one of many reasons Brits apparently save more than 5X what Canadians do.

#111 Doctors on 12.03.18 at 7:43 am

$400,000?

White coat investor , head there doc

DIY and saving 20%/yr (both easy to do) and you’re set for life come age 60.

Do not use an advisor – unless you like to throw money away and/or need your hand held

#112 jess on 12.03.18 at 7:46 am

draining the swamp

HR 1, = The idea driving HR 1 is to fight and end the dominance of big money in politics
https://theintercept.com/2018/12/02/public-campaign-finance-hr1/

https://www.darkmoneyfilm.com/

======
shrugging man-made disaster…

The United States Senate voted Wednesday afternoon to advance a resolution withdrawing all unauthorized U.S. military support for the Saudi-led war on Yemen, which has created, according to the UN, the world’s worst humanitarian catastrophe

#113 dharma bum on 12.03.18 at 8:22 am

#4 Oakville Sucks

Canadian are just docile overworked tax payers…another words SLAVES!

…and that’s the reality.
——————————————————————-

Yes it’s true.

As a society, we are underpaid, overworked, overtaxed and overcharged for everything.

It does not make any sense.

We are brainwashed into thinking that we live in such a great country and should be so thankful for that while we’re slowly bled to death financially.

Yes, there are definitely worse places in the world to live, to be sure, however, there are also better places where you get a bigger bang for your buck on everything from housing to consumer goods, and get to save more cash for that inevitable day coming when you will no longer be working.

I feel sorry for the ignorant masses.

#114 David Driven on 12.03.18 at 8:23 am

RCMP will be further publicly embarrassed when they have to give millions of hot money back to the alleged Chinese gangsters who laundered it in our casinos. The bones of the case are well known to everyone , no need to regurgitate.

Shameful and disgusting that irregular travellers from ISIS war camps and blatant corrupt foreign nationals didn’t get the manpower needed to close these cases and seal the lid on the scum.

Is it PC politics that keeps the cops from arresting ‘some’ people and not others? Sadly, I’m thinking that’s got to be the case. Nothing else makes sense. It certainly seemed to be that when not a single person got arrested in Canada when 380 innocent people were murdered on an Air India plane after a weapons caches was discovered in a Punjabi temple.

Surely we don’t spend half a million to train an officer just to handle baggage at illegal crossings? But, that appears to be the case.

https://vancouversun.com/news/crime/former-accused-in-money-laundering-case-try-to-get-cash-returned

#115 crowdedelevatorfartz on 12.03.18 at 8:28 am

@#97 Ronaldo
“Shows how desperate these dudes are to dump these places.”
+++++
A developer who’s very worried?

The beginning of the stampede to the exit……..

#116 Tater on 12.03.18 at 8:38 am

Back in university I worked at a discount broker just after the .com bubble burst. By a massively wide margin, doctors and dentists were the worst investors.

#117 Alistair McLaughlin on 12.03.18 at 8:43 am

@#94 Sunshowers, Crowded was simply citing some significant costs that exist today that did not exist back in the 80s and early 90s when savings rates were higher. He never suggested people go without those things. Duh. Read what’s there instead of jumping to conclusions.

#118 abros on 12.03.18 at 8:43 am

I am confused about this young doctors real estate assessment in Victoria. Did he / she purchase a home for $750K in 2016 and now think it’s worth $925K in 2018? Not likely most real estate folks (even the cartel) say that things have slowed way off since 2016. 2016 was the peak in Victoria. Things are on the market longer, no more multiple bid offers and homes selling in 2 days. Prices have dropped in certain areas. Good luck getting that new price if you sell.

#119 crowdedelevatorfartz on 12.03.18 at 8:59 am

@#94 Glass half Empty
“And yes, old timer, data plans actually do cost that much…”
++++

Uhhh, yeah, I know.
Thats why I mentioned it but apparently irony , deductive reasoning and budgeting were’t taught in Millenial High School between finger painting , positive empowerment reinforcement classes and surreptious texting skills.

I’d say the main reason Canadians today have the saving skills of a Hillbillie Lottery winner are ….. debt is to be embraced rather than avoided at all costs.
That simple lesson has been lost on most ( not just Mils)over the past few decades.
I have no Debt, for the simple reason I learned many years ago that you should pay your debts first and everything else second….
And if you think “life is hard” wait til the interest rates start climbing in lock step with unemployment rates. Uppa upppa UPPA.
But what do I know.
Keep doing what your doing, and start the day looking in the mirror and saying , “Good Job!”

#120 jane24 on 12.03.18 at 9:06 am

One of my goals for 2018 was to try to buy more stuff used/second hand rather than new. I have done so and was and am still shocked at how little anything costs once it is re-sold. Most items lose most of their value once opened. Try it. I have saved a lot this year and intend to save even more next year. Easy win in life. Better things to do with my money than buy new.

#121 Tater on 12.03.18 at 9:07 am

#92 barnz0rz on 12.02.18 at 11:42 pm
Paying interest is for chumps. People don’t get it. It doesn’t matter how low the payment is, if you are paying interest, your getting played. Never buy a new vehicle on payments unless you are getting zero interest. Buying a home “oh I got a great rate and I can afford the payment”… Yeah, even on a modest condo or townhouse these days you’re still spending at least $200k on interest over amortization… And the days of doubling your home value quick are over. People are dumb with money. I fear for what retirement will look like in 30 years for a lot of people.
—————————————————————–
Borrowing at 2% to invest at 8% sounds like a good idea to me. Quite happy with lease payments at 1.9% while the cash that could have bought the car is invested.

#122 young & foolish on 12.03.18 at 9:27 am

Granda’s take on the last 15 years (as an example).

S/P 500 ——- 2004 ($1120) 2018 ($2760)

Dow Jones—— 2004 ($10,488) 2018 ($25,538)

Yellow Relic —- 2004 ($410) 2018 ($1230)

* Dividends excluded since taxes, trading, and adviser
fees will eat them up

#123 yorkville renter on 12.03.18 at 9:54 am

#92 – what about inflation?

$100k in 1998 isn’t $100k in 2018.

#124 PastThePeak on 12.03.18 at 9:58 am

Extremely high debt. Very low savings. RE through the roof. Sounds like US of A a little over a decade ago. The US savings rate quoted by Garth in the article is a result of them having to deleverage and fix their finances due to the Great Recession. The US savings rate was dismal before the GR.

In Canada, the GR didn’t have nearly the impact as south of the border. Our housing market only took a slight and short drop, while theirs cratered. Our unemployment never went as high, and gov’t deficits were not the same. To Americans, it truly was a huge recession, the biggest since the Depression.

However, next time it will be Canada’s turn. A Canuck recession will not be like the GR – will not trigger a financial crisis – but it will greatly impact a population that has grown so complacent it can’t seem to recall bad times. It will be pretty severe, due both to the over leveraged debt and low savings mentioned here, but also due to government policies that have severely weakened our private sector and increased taxes.

A significant, deep, and painful made-in-Canada recession is a guarantee. There is no policy available that can prevent it. It took a couple of decades to develop, and it will be a doozy when it arrives.

#125 Mark on 12.03.18 at 10:05 am

@#95 Renaldo

The house in the photo is 8187 12th avenue next door to the one at 7777 1st street which was a rebuild in 2018 and currently listed for 1.783 mil. There is no current listing for the one in the above photo. See my reply to Flop. Something doesn’t seem right here. Are you a realtor Sue?

————————————————
No, Sue is not a realtor. I should know, I’m married to her. She took that photo from the car as we stopped on the road just in front of the house. Due to the angle required to get a good shot of the sign, the house in the background ended up being the one beside the house that was for sale. It actually is 7777 1st street.
Nice researching. We didn’t have any more detail than this pic.

#126 SimplyPut7 on 12.03.18 at 10:40 am

I knew the savings rate was bad but I didn’t know it was that bad. There’s no room in household budgets for error, emergencies or recessions.

#127 Penny Henny on 12.03.18 at 11:04 am

DELETED

#128 mogulrider on 12.03.18 at 12:33 pm

Just heard from a friend that Halifax is gonna raise property taxes by 2.9% next year and 2.5% the next

As socialism fails in Canada because of entitlements in the public sector, one of the worse things you can own is real estate.

Its immovable, its sitting there with a target on its roof and politicians will never do whats necessary to balance their books.

T2 is almost a 100 billion and counting in budget deficits in 3 years!!!.

No one understands or cares it seems that at some point – some Sunday afternoon – they will default or the the bond buyers say – Nah!

The Age of Public Sector(socialism) is ending and only the private sector will be a place to invest. All those Guaranteed Government Bonds won’t be worth the toilet paper they are written on…

One will have to be very careful where they put their money…

I am amazed how people believe that government debts are never defaulted.

Canada is now a 3rd world country
Damn shame

#129 Ronaldo on 12.03.18 at 12:33 pm

#125 Mark on 12.03.18 at 10:05 am

That explains it. Thanks Mark. Sorry Sue.

#130 Sold Out on 12.03.18 at 12:44 pm

#104 Howard

I’m not even a boomer. I would have liked to keep my well-paying union job for a few more years. Nobody gave up their job for me, why the hell would anyone expect me to be so altruistic?

#131 Guy in Calgary on 12.03.18 at 1:00 pm

“Save up to $500,000!”

How can anyone say no to that?

#132 Ronaldo on 12.03.18 at 1:04 pm

#115 crowdedelevatorfartz on 12.03.18 at 8:28 am
@#97 Ronaldo
“Shows how desperate these dudes are to dump these places.”
+++++
A developer who’s very worried?

The beginning of the stampede to the exit……..

—————————————————————
You are absolutely right there. The days of buying a tear down, rebuilding and walking away with a $500g profit are down and over with. They will be lucky to come out even on these places. The party is over. They and others like them have been partly to blame for the extreme prices in the lower mainland. Saw a lot of this happening in an area I am familiar with, the Mount Pleasant area. A lot of buyers going to be seriously hurting.

#133 Shawn Allen on 12.03.18 at 1:24 pm

Average is Not EveryOne Nor is it Even Typical

#81 Unhinged Trader on 12.02.18 at 10:10 pm asked:

If no one saves, where the hell do these 20% downpayments on million-dollar OBS/gypsum/ply monster homes come from?

********************************
Shocking fact: Fully half the people save more than the average (okay median), half save less and none are precisely at the average savings level (well except those with 1.4 kids maybe).

#134 PastThePeak on 12.03.18 at 1:35 pm

#85 crowdedelevatorfartz on 12.02.18 at 11:03 pm
Apparently Trudeau’s tweet is gaining some legs in the twitterverse.
Amateur Hour by a politician heading into an election year……. the spin doctors will be workin OT in the PMO’s bunker tonight to ‘splain this childish tweet.

Hard to believe but Trudeau’s “um ah err ah um” speaking style is losing ground to his inane tweeting……
++++++++++++++++++++++++++++++++++

While I still expect that T2 and the Libs will win the next election, really stupid moves like that tweet can take on a life of their own (we can only hope).

#135 Good Point on 12.03.18 at 1:44 pm

#120 jane24 – There was a time that bought antiques at auctions to furnish my residence. Just five years later sold all because was moving, and needed new stuff again. Even after the auction commissions still made a small profit by trucking all to the Milton auction house.

#136 Guy in Calgary on 12.03.18 at 1:45 pm

Does the savings rate include group RSP’s and DB pension contributions through employment?

#137 KLNR on 12.03.18 at 1:54 pm

@#132 Ronaldo on 12.03.18 at 1:04 pm
#115 crowdedelevatorfartz on 12.03.18 at 8:28 am
@#97 Ronaldo
“Shows how desperate these dudes are to dump these places.”
+++++
A developer who’s very worried?

The beginning of the stampede to the exit……..

—————————————————————
You are absolutely right there. The days of buying a tear down, rebuilding and walking away with a $500g profit are down and over with. They will be lucky to come out even on these places. The party is over. They and others like them have been partly to blame for the extreme prices in the lower mainland. Saw a lot of this happening in an area I am familiar with, the Mount Pleasant area. A lot of buyers going to be seriously hurting.
_____________
Nah.
Nobody is being forced to buy.

#138 KLNR on 12.03.18 at 1:57 pm

@#120 jane24 on 12.03.18 at 9:06 am
One of my goals for 2018 was to try to buy more stuff used/second hand rather than new. I have done so and was and am still shocked at how little anything costs once it is re-sold. Most items lose most of their value once opened. Try it. I have saved a lot this year and intend to save even more next year. Easy win in life. Better things to do with my money than buy new.
________________________
or just quit buying shit entirely.
save even more

#139 here's The Money Greedeau? on 12.03.18 at 2:06 pm

Re; #94 SunShowers on 12.02.18 at 11:49 pm
#33 crowdedelevatorfartz on 12.02.18 at 6:23 pm

No cellphone “plans” costing $1000/year
No internet “plans” costing $1000/year.
And yes, old timer, data plans actually do cost that much.
+++++++++++++++++++++++
Hehe
My son got a free calling all of North America/ 8 GB data plan
$38 per month
You sound like the guys who pay leases for vehicles and only look at the monthly as described by former bloggers…..
Another thing, I looked at 0% deal that was offered to me on a truck purchase a couple years ago and found hidden in the fine print at the end of the contract a little blurb that noted I would pay ~$4000 less if I paid cash on a $35k purchase instead of the 0%. Not a word from anyone at the dealership ever on paying cash. Had to sit for an hour going over the contract (all 15 small type pages).
Another item in the contract was Ford Credit is allowed to do anything to you including bodily harm to you to retrieve their vehicle if you default. I was aghast at this. So take that into consideration when you sign that lease/loan!
Oh yeah, the dealership wanted $45k from me originally.
So with 0% you are still paying 10% more baked into the deal.
I don’t know who’s worse-realtors, car dealerships or the gov’t overseers of these two shyster orgs. that allow this to happen.

#140 Glengarry Girl on 12.03.18 at 3:06 pm

#65 Tony

I agree, Trump looked disheveled and worried at the G20, he is in way over his head and is backpedaling. The USA is no longer in such a dominant position and some Leaders even celebrated in front of camera with a high five. Unfortunately the surge in the Dow will be short lived. Don The Con has created a lot of chaos and false hope, just like all Cons do.The negative results won’t be seen until after the next stimulus wears off…and it will.

#141 Shawn Allen on 12.03.18 at 3:07 pm

Can ever politicians do the right thing:

Mogulrider at 128 ranted:

“politicians will never do whats necessary to balance their books.”

*******************
Except maybe in Quebec which just announced a big surplus.

Credit where credit is due?

#142 Car Leasing on 12.03.18 at 3:37 pm

I brought in my service file, and made GMC choke on what I wanted for my trade in to make a discounted deal for $7,000 off the list. Then switched the buy to a 3 year lease with a buyback done through GMAC. I bought the car, and did all the complex things needed to transfer the title myself. Got a great deal in the end by leasing, because set aside a bit of money at a high interest rate to cover the lease payments on my new Pontiac Grand Am.

#143 Eh? on 12.03.18 at 6:56 pm

How do you figure tax loss selling equates to a bump up in markets? It creates selling pressure, not buying pressure?

#144 David Paquette on 12.03.18 at 8:17 pm

I have been taken down by the market. I grind my teeth watching my decisions play out. Thank God my grandchildren like me. It is tough to impress after you fail – they give me resolve.

My income producing assets are taking a hit which I despise. I smell opportunity but I can’t afford many losses. I am targeting and will wait. I am not smart enough to beat the world. I remember a quote – the best way to get back on your feet is to get off your ass.

#145 SmarterSquirrel on 12.03.18 at 10:52 pm

#66 NoName on 12.02.18 at 8:18 pm
#45 SmarterSquirrel on 12.02.18 at 7:08 pm

Hey squierl why did you left out cpp and ei in your calculations?
——————

As I wrote on the site… “Remember it would vary depending on your personal deductions, but this is a good ball park estimate.”

So you’re right you can do more calculations to get a more precise picture but I was trying to give a ball park estimate. Life can be planned somewhat but it’s rarely precise anyway. I figure if I can encourage people to save more and prepare better for their retirement, then I’ve had a positive impact.

#146 Joblo on 12.04.18 at 10:08 am

Justin Trudeau, is he ready yet?

#147 IHCTD9 on 12.04.18 at 11:58 am

#141 Shawn Allen on 12.03.18 at 3:07 pm
Can ever politicians do the right thing:

Mogulrider at 128 ranted:

“politicians will never do whats necessary to balance their books.”

*******************
Except maybe in Quebec which just announced a big surplus.

Credit where credit is due?
_____________________

Depends on how they arrived at that surplus.

If they just cranked taxes up higher than needed – no credit.