Zero

He’s an anaesthesiologist. She teaches yoga. Household income this year, “a little under five hundred,” says Trevor (85% of it is his). Savings and investments? “I’m a little embarrassed to tell you this,” he says, “but we don’t have any.”

How could this be?

Herewith are the excuses: (a) Trevor’s income comes through personal fees, not a professional corporation and he is now (thanks to T2) in a 54% tax bracket. (b) They bought a $2 million house in Oakville – “which is by far not the best house on the street, so gimme a break.” The mortgage is $1.5 million. Properties taxes this year will be almost $30,000. (c) The nanny’s paid $3,000 a month, in after-tax income. (d) Two car leases. Big insurance policies. Two vacations a year. It adds up. Once the kids head off to private school, tack on sixty grand.

So when a 1%er couple (in terms of income) has stuff and lifestyle but no cash (and no pensions), what does this say about society’s priorities? Too much, sadly. Over-spending and under-saving are twin reasons many people will face retirement shocks, unable to replace their incomes or support their habits.

That consumption has replaced saving is evident. In 1982 people saved (on average) 19% of what they earned, and socked it into high-paying cash assets (mortgages were 21% and term deposits paid 15%) . Over the last quarter-century we managed to save an average of 7.3% of income. And in the last few months, that has collapsed to 0.8%. In fact, in BC (home of the highest house prices and most new taxes) the savings rate is negative. The average family spends 8% more than is earned, using debt to fill in the rest.

As interest rates fell, borrowing and spending rose and savings plummeted. Without reward in the form of high interest rates, people seem to lose all discipline to put money aside. As rates hit historic lows, houses hit historic highs. So did debt. Now a massive amount of family income is diverted into servicing $2 trillion in accumulated borrowing, while the cost of living inches up. At the end of the month, nothing. No wonder every year a new survey finds 40% or more of people could not survive even one missed paycheque. No wonder there’s over $100 billion in HELOCs on which no debt repayment’s being made.

So a nation of house-rich, debt-pickled and savings-poor people every day edges closer to the end of working careers. As this pathetic blog has tried to show, there’s no pot of government money waiting to look after you. CPP is grocery money. OAS is gas money. Neither were ever intended to support people after they finished working, but are rather supplements to a corporate pension and/or personal savings – usually in the form of RRSPs or TFSAs.

How much do you need to save? Sure, 19% is excessive unless you enjoy feeding your kids bugs. But 0.8% is a complete joke. So something closer to the long term average of 7-8% may be about right for most people. Obviously the sooner you get into this habit, the better.

Trevor, of course, thinks he’s okay. Ten years from his desired retirement age he hasn’t really given a lot of thought to income replacement. We did the math. Unless he blackmails Tony Clement online, it’s statistically impossible for him, at age 46 to prevent an income drop of about 80% at age 55. Hell, he’ll have a tough time even affording his property tax and Lululemon Tight Stuff yoga pants on a gross take of a hundred grand. He has simply spent too much and saved too little. The only way out of a retirement jam is to dump the house, and hope the real estate market doesn’t fade between now and then.

How many other people are there with cars, a house, obligations, kids, overhead and expectations, but no actual money? For them, bank account deposits every month turn into debits, and success means they balanced. No surplus. At the end of the day, it doesn’t matter what you make, but what you keep.

If this is you, change things. At a minimum, find $500 a month to stuff your TFSA – then don’t bury it in a GIC. If your company has a pension plan, sign up for it, even if it’s a crappy group RSP. If you have a cheap mortgage, don’t be too anxious to pay it off. Invest instead and diversify your life rather than pumping all your net worth into a single asset. Do a budget, a plan, for your household. Get free government money with an RESP for your kids. Throttle back on holiday trips – your spawn will love you more for helping with university tuition when she’s 20 than a beach trip when she’s six. Consider leasing a car rather than throwing forty grand at a machine which will eventually be worth zero. Invest the money instead. Income-split. Use RRSPs. Get out of high-fee mutual funds. If you have to, lease your basement. Or move into one.

Seriously. Forget more stuff or more debt. Focus on financial assets. When work’s done, you need an income stream. One that can last two decades, and replace much of what they used to pay you. Most people will fail. So, start now.

About the picture...

After that post, you may need a hug.

194 comments ↓

#1 JSS on 01.20.19 at 4:11 pm

Is the 19% savings rate figure based on gross income or after tax income?

#2 The real Kip (Ret) on 01.20.19 at 4:17 pm

“Household income this year, “a little under five hundred,” says Trevor (85% of it is his).”

The above would mean 15% of the $500k is hers. Let’s see, that’s, 5 times 15, carry the one and, holy cow Batman, she makes almost $75,000 teaching Yoga! Good gig! It really is better in Oakville.

She owns the studio. Seems reasonable. – Garth

#3 Derek R on 01.20.19 at 4:19 pm

Ouch! That is not good.

#4 Bob on 01.20.19 at 4:24 pm

I made $120K last year. Above average, I know, but pretty pitiful by the standards of the profligate snobs who come here to whine about their “problems.” On my take home income, I supported a stay-at-home-wife and three kids. I also saved 35% after taxes. And no, I didn’t feed the kids bugs, thanks. The numbers in this post just boggle my mind. How do you people earn so much with such a complete lack of intelligence and self discipline? Needless to say, I won’t shed any tears for poor Trevor “scraping by” on a mere 100K in his retirement.

#5 BC_Doc on 01.20.19 at 4:26 pm

Too many physicians act like the party will never end. Then they buy expensive cars, vacation real estate, take too many pricey trips. If the marriage garden isn’t tended to, divide by two and add another decade of slogging through patients to semi-recover.

To my medical colleagues who ask me, I advise mentally dividing what they earn into three equal piles— 1/3 goes to the CRA, 1/3 is to spend now, and 1/3 is to save and invest for retirement. No vacation properties. Love the one your with. Invest using ETFs— in Vanguard we trust.

#6 Nothing Surprises on 01.20.19 at 4:29 pm

Here is what is happening and the course we are on. Very shameful for a country like ours!

https://ca.yahoo.com/finance/news/canadian-wealth-fall-highest-g7-195300187.html

#7 crowdedelevatorfartz on 01.20.19 at 4:31 pm

@#2 The Real Kip.
“The above would mean 15% of the $500k is hers.”
++++

hahahaha talk to a divorce lawyer……..HALF the 500k is hers.

$3000/month for a “nanny”.
Yeesh.
Time for mom to bring the kids into the yoga class and ditch the $36k per year nanny?
2 vacations per year? Seriously?
Yoga’s that stressful?
Do they have to take the nanny too?
500k a year … and zero savings…. and he expects to retire in 10 years……
Denial is not just a river……
Unbelievable.

#8 expat on 01.20.19 at 4:31 pm

drop yoga teaching and take 3 grand back and use that to start your savings.

At least thats what my generation did….

WOW

Sad actually….

#9 expat on 01.20.19 at 4:34 pm

The unintended consequence of legalizing dope ( cause that is whta it is) Is this.

At election time those 30% of Canadians who are now legal stoners will be too stoned to vote Liberal and NDP. Or even better scratch Conservative down cause they can’t read the election chit.

There you go…

Balance will be restored and the horror of Liberalism will be taken out by their own stupidity.

#10 BC_Doc on 01.20.19 at 4:35 pm

Re: savings rate—

I think the 18% allowance under RRSPs is the ideal rate for those working from age 20-60. If using TFSAs, use 18% of after-tax income. If invested well (low cost diversified portfolio), this savings rate should allow individuals to retire in a similar style to which they spent their working years.

#11 Financial Orchid on 01.20.19 at 4:37 pm

Old ppl don’t want to move. With fixed income, retirees/elderly have to move whenever rent surges esp in HCOL cities, or if area becomes a boomtown. This scenario can throw a retiree’s budget out of whack. Thus, it’s a better opt to just sit and let the equity grow if one can afford with age.

#12 expat on 01.20.19 at 4:38 pm

#5

At our high school 7 teachers drive Porsche Cayennes,,,

Used to be public sector folks made 20-30% less than private sector now they make triple and still take home gold pensions.

Reversion to the mean means that the public sector entitlements will be wiped out at some point as the private sector calves from taxes at all levels.

At some point this gross travesty will correct itself when no one can pay taxes or like I and my friends we just leave the country and say to hell with socialism…

Some are more equal than others –

for now

#13 Doc on 01.20.19 at 4:40 pm

Trevor likely suffered from years of delayed gratification and splurged when he finally got his FRCP. Quite understandable but as Garth points out not wise. I spent 14 years doing post secondary endeavours and switched specialties(tired of 100 hour weeks as a paediatric resident)which added to time in the trenches, ending up in psychiatry but eventually downsized my life to save for retirement. Took 20 years to save 1mill. by 65. It can be done but being a doc does not mean you rich. Tell the kids to get jobs in nursing-way better in the long run with Pensions!

#14 Shawn Allen on 01.20.19 at 4:42 pm

That mythical 19% savings rate?

#1 JSS on 01.20.19 at 4:11 pm asked:

Is the 19% savings rate figure based on gross income or after tax income?

*********************************
Neither because as anyone old enough to follow the news in 1982 knows, the country was in recession and both unemployment and inflation were high.

That figure is some kind of statistical artifact. Complete nonsense. There is no way that was “savings”.

Now the so called savings rate may have been high by counting debt repayment (people were scrambling to pay off mortgages that had renewed at high rates) but it was not 19%.

People then had more kids and two incomes were less common. People in Ontario were losing their homes in droves. Was writing off their mortgages counted as savings?

That 19% savings rate is utter nonsense.

Tell it to StatsCan. – Garth

#15 akashic record on 01.20.19 at 4:56 pm

Over-spending and under-saving are twin reasons many people will face retirement shocks, unable to replace their incomes or support their habits.

Comes hand in hand with under-earning.

The least talked about member of the personal finance trinity, which impacts the most under-saving and over-spending.

Poor earners face most likely over-spending and under-saving.

The continuous spread of poor earning vs. growing cost of living is the least addressed financial topic.

As this gap grows, over-spending comes with it and under-saving follows.

#16 not 1st on 01.20.19 at 5:02 pm

I don’t know whats worse, a 1%er with zero equity or the fact that people actually pay to get contorted in stretchy pants. Cant wait for the reckoning coming to the GTA. Gonna be glorious.

#17 Ronaldo on 01.20.19 at 5:05 pm

#5 BC_Doc on 01.20.19 at 4:26 pm

Great advice Doc.

#18 dakkie on 01.20.19 at 5:15 pm

Canada’s Debt Problem Will Create the Worst Crisis In A Lifetime.

https://www.investmentwatchblog.com/canadas-debt-problem-will-create-the-worst-crisis-in-a-lifetime/

#19 Chaddywack on 01.20.19 at 5:18 pm

I don’t understand why Trevor needs both private school and a nanny for his kids. If his kids are old enough to be in school he could get much cheaper after school care instead of a nanny

Secondly public schools in Canada on the whole are relatively good and presumably he bought his expensive house in a nice neighbourhood because it had good schools. $60k a year? There is your retirement savings.

It boggles my mind how many parents buy houses in expensive areas because they are in “good school districts,” but then they send their kids to private schools. Essentially these people are paying the premium and not reaping the benefits.

#20 Nanny paid $3000? on 01.20.19 at 5:21 pm

A month ?

Cmon Garth he’s pulling your chain . That’s bs

Full time in the GTA. You live in Gananoque? – Garth

#21 Pareto on 01.20.19 at 5:25 pm

Bob
Good numbers my friend, I gross about 95k and starting this year going to set aside 40k(this includes employer matching RRSP). Looking to semi retire in 5yrs at 55,with a 7 figure nest egg, do not own, rent and am looking at a LCOL area to live for 5-6 months of the year after 55. It can be done, it has taken 25yrs of diligent investing to get there, well worth the small sacrifices.
Portfolio returns more than what I will be adding to it every year, feels nice.

#22 crowdedelevatorfartz on 01.20.19 at 5:27 pm

@#14 Shawn Allen
“That 19% savings rate is utter nonsense.”
+++++

Perhaps but its an “average”…but it IS do-able.
At 30 I was living pay cheque to pay cheque and had no savings. Nothing.
Something had to change.
Started saving when I was 30.
Separated “wants” vs “needs”.
I max out on RRSP’s every year.
Used the tax refunds to reinvest
I have no unused contribution room.
Ditto for my TFSA’s.
And am also currently invested in other non govt portfolio’s.
I also have a 4 year old truck paid off.
I look after it. Probably be the last vehicle I ever have to buy.( unless I get too old to drive and buy a self driving car in 25 years)
I digress.
Zero debt.
Probably save/invest 30% of my take home pay.
I will easily retire at 65 with over $1 million invested/ banked/ saved.
But lets not forget “average” savings because MY 30% is negatively “balanced” by………
ALL my co -workers living pay cheque to pay cheque …or worse.
One spends more than he makes…every month. Has creditors hounding him. he has nothing. He’s 53. He’ll die on the job.
Another 64 year old coworker just cashed in all their remaining RRSP’s to……buy a motorcycle…..they will work until they’re asked to retire.
Another worker “retired” at 65 and lasted one month before coming back to work. His union pension, CPP and OAS covers his rent/internet/cable.
He has to work to afford car insurance, gas, cigarettes, lotto tix, booze,food…..vacations? Bwahahahaha.
If you want to relax now and mock “savers”…no problem….in 10, 20, 30 years……Wal Mart beckons.

#23 Terry on 01.20.19 at 5:29 pm

“He’s an anesthesiologist. She teaches yoga. Household income this year, “a little under five hundred,” says Trevor (85% of it is his).”

85% of roughly $ 500,000 is an income of around $425,000 just to be an anesthesiologist? Seriously? I think Mr. Ford could find some serious cost cutting with our medical profession starting with salaries! I’m also wondering when Canada will start public sector job cuts? We need to get all costs down down down!

#24 The real Kip (Ret) on 01.20.19 at 5:30 pm

You guys are right! If they ditch the $36,000 nanny they could save, let’s see, 36/500 is ah, um, 7.2% right there. So mom should be one stay at home, cut out 2 vacays, return the Mercedes and voila. We’re back in the black.

#25 Jacques on 01.20.19 at 5:42 pm

# 8. Expat.

drop yoga teaching and take 3 grand back and use that to start your savings.
At least thats what my generation did….
WOW
Sad actually….

———————————————

At some point in the not too distant future the kids will be more independent and maybe out of the house. The family can drop the nanny expense and the mrs will still have her yoga studio business.

I’m in the same situation. Wife’s part time work only covers the nanny expense after tax, but she now gets out of the house, gets to interact with adults, and keeps her workforce skills relevant for the day she is ready to take on something full time.

#26 Mean Gene on 01.20.19 at 5:42 pm

Hypergamy worked out well for somebody.

#27 under the radar on 01.20.19 at 5:49 pm

Let me guess, they eat out take out most weeknights and go out for $300.00 meals with wine on Saturday night.

#28 Stan Brooks is a Kook on 01.20.19 at 5:52 pm

#55 Stan Brooks on 01.20.19 at 12:17 pm

#13 Toronto Hater is not me. BTW I am a huge Raptors fan, watched more games life than your IQ.”

So nice to hear Stanley! Nice to know you are cheering on the Raptors. As for IQ, you demonstrate your lack of any on a daily basis. Keep it up cowboy, you provide great comic relief.

#29 DON on 01.20.19 at 5:53 pm

#14 Shawn Allen on 01.20.19 at 4:42 pm

That mythical 19% savings rate?

#1 JSS on 01.20.19 at 4:11 pm asked:

Is the 19% savings rate figure based on gross income or after tax income?

*********************************
Neither because as anyone old enough to follow the news in 1982 knows, the country was in recession and both unemployment and inflation were high.

That figure is some kind of statistical artifact. Complete nonsense. There is no way that was “savings”.

Now the so called savings rate may have been high by counting debt repayment (people were scrambling to pay off mortgages that had renewed at high rates) but it was not 19%.

People then had more kids and two incomes were less common. People in Ontario were losing their homes in droves. Was writing off their mortgages counted as savings?

That 19% savings rate is utter nonsense.

Tell it to StatsCan. – Garth
****************

Back then people saved before they bought things they really really wanted. Less use of credit cards etc. We were taught as kids to open up savings account…cause they made you a return and it did. Different context different generation.

Now you buy when you want as credit has/is available all over the place.

The kids that witnessed the great depression learned a life lesson for later use, unfortunately most of their parents experienced a grim immediate reality.

Are we at the height of our debt cycle. Is there more room to go, if so how? (without it becoming a joke).

The low end (fatty) package of bacon is now $6-8. We must be sending the pigs to China for processing and they send back the finished product?

Times are changing again. Rinse and Repeat…thanks human nature.

We need to book human nature a one-way ticket to evolution. lol

#30 WUL on 01.20.19 at 5:58 pm

Today’s blog is a “feel good” story in the sense that it makes me feel better. Not because I lack empathy. More because I thought I was hopeless financially. Soothing.

I have said before that a lot of rich folk are just broke on a grander scale. I’ve seen it many times first hand.

And who are the middle class? Just a bunch of poor people trying to act like they are rich.

“Born a slave, in the town of [Oakville] *
Traded for a chestnut mare….”

* Vicksburg – Apologies to Bob McDill and Allen Reynolds
– “Catfish John” – A nice version is that of Alison Krauss and Nitty Gritty Dirt Band

#31 Eleanor Shellstrop on 01.20.19 at 6:00 pm

“How many other people are there with cars, a house, obligations, kids, overhead and expectations, but no actual money?”

Sadly, way too many. It boggles the mind, but it’s way more common to have wealthy pretence than to actually BE wealthy.

Trevor – take your embarrassment and turn it into positive action like Garth has recommended. It’s not too late to get out of this so that your kids aren’t left holding the bag.

My father was a physician for over 40 years, but my parents lived below their means. My siblings and I had great childhoods with plenty of fun and love. We didn’t care that my parents drove old cheap cars. We had fun on inexpensive road trips. We went to public school and turned out fine (all white-collar high-earning professionals).

What I did not appreciate at the time, and what I wish to pass onto you for the sake of your kids, is that my mother saved and invested my father’s earnings such that they are living in a paid-off house with enough cash to do anything they want. And they don’t ask their kids for handouts, although we would all gladly help them.

So do your kids a favour. Start saving and investing your money.

Also – the happiest and coincidentally the most money-savvy person I know of earns $5 million USD per year and lives in a 500 sq ft rental. He lives, eats, vacations and dresses modestly. It’s a little extreme, but his happiness doesn’t depend on material things or impressing anyone with outward appearances. Unlike most people who earn even 1/10 of his salary…

#32 El Joko on 01.20.19 at 6:00 pm

>The nanny’s paid $3,000 a month, in after-tax income.

WTF for? What kind of income is the yoga instructor bringing home?

#33 El Joko on 01.20.19 at 6:01 pm

>85% of roughly $ 500,000 is an income of around $425,000 just to be an anesthesiologist? Seriously? I think Mr. Ford could find some serious cost cutting with our medical profession starting with salaries!

Hope you like your open cavity surgery with nothing but rum to ease the pain.

#34 not 1st on 01.20.19 at 6:02 pm

Once you factor in the costs of the nanny, the studios operating costs and taxes on that income, it makes no sense for both parents to work.

Close down the studio, give some part time classes to metrosexual dudes in the basement, fire the nanny and raise your kids yourself. Try not to make them insufferable.

#35 Shawn Allen on 01.20.19 at 6:02 pm

Stat’s Can’s 19% 1982 Savings rate

That 19% savings rate is utter nonsense.

Tell it to StatsCan. – Garth

************************************
I am sure they read this blog. You would think they would learn to check with me to see if some of their outlier data makes any sense.

#36 Sold Out on 01.20.19 at 6:04 pm

Trevor,

First off, thank you for staying in Canada and paying more in income tax than I earned in my entire working life; if you’d gone to the Excited States, our gov’t would be poorer, but at least you’d be able to retire at a reasonable age. Next, sell the house and rent. You aren’t going to see the kind of price appreciation that justifies hanging on to it. That ship has sailed, sorry you were born at the wrong time. If your wife is happy to effectively earn $39,000/yr after paying the nanny, by all means carry on. Lots of hard choices coming at you; you’ve worked very hard to get where you are professionally, but you can’t keep rewarding yourselves at this rate if you ever want to retire. Learn to live on half of your after tax earnings for a decade while investing the rest, and plan to spend your golden years living modestly. It’s not too late, but it’s pretty close.

#37 SW on 01.20.19 at 6:11 pm

I dunno. It makes you shake your head. I feel sorry for the man, but even if there were no taxes at all (on income or property) this family would still be in the same situation.
My parents were exactly like this. Didn’t end well.

#38 Joe on 01.20.19 at 6:12 pm

let me guess his neighbours last name is “Jones”?

#39 crowdedelevatorfartz on 01.20.19 at 6:14 pm

@#23 Terry
“I think Mr. Ford could find some serious cost cutting with our medical profession starting with salaries!”
+++
Well.
As much as I think many medical salaries are a tad high….
Do you really want to be “under the gas” and totally helpless letting a “cut rate” anesthesiologist hold your life in his “salary reduced ” hands…?

#40 paul on 01.20.19 at 6:14 pm

20 Nanny paid $3000? on 01.20.19 at 5:21 pm

A month ?

Cmon Garth he’s pulling your chain . That’s bs

Full time in the GTA. You live in Gananoque? – Garth
—————————————————————–
Yes, My Daughter pays $160 a day x five = $800 x four =$3200 I guess Trevor rounded down.
And not on 500k a year.

#41 Sold Out on 01.20.19 at 6:34 pm

Imagine how few doctors there would be in Canada if they weren’t generally so financially obtunded. It’s only because docs are bad at financial math that they have to keep working late into life. If all the Canuck docs were savvy investors, a good number of them would retire at 46, dooming the rest of us to the futile search for a gp.

#42 Interstellar Old Yeller on 01.20.19 at 6:37 pm

I’m also impressed a yoga teacher makes $75k! Is that taken as salary (and the studio breaks even)?

$3k/month for the FT nanny seems on the low end. Good deal if that’s the real number.

Two earners in the family gives them a little income security (what happens when a sole breadwinner can’t work and the SAHP has no recent, marketable skills)? Possibly the spouse enjoys her work. And it sounds like they spend everything they bring in. They need to cut expenditures before cutting income.

Lululemon Tight Stuff yoga pants

As funny as ever, Garth. :)

#43 Frugalista on 01.20.19 at 6:43 pm

I don’t understand how he has no savings. Not even in his professional corporation? By no savings, does Trevor mean he has nothing saved in RESP’s? If so, I don’t see what is the point of spending $60,000 in elementary or high school tuition when he has nothing saved for RESP’s. Shouldn’t that be a priority? Tuition is crazy expensive nowadays. Even if a parent maxed out the $50,000.00 for RESP’s, that would be JUST enough for the tuition + book expenses on a 4 year undergrad degree (no residence and living expenses).

#44 NoName on 01.20.19 at 6:44 pm

#7 crowdedelevatorfartz on 01.20.19 at 4:31 pm

Yoga’s that stressful?

It is if you are attending a classes.
https://i.chzbgr.com/full/9046703104/h51B72EF5/

#45 Hey doc !? on 01.20.19 at 6:51 pm

You’re only with a household income of $500,000

The past is the past , power is always in the present

Sit down with the wife , get on the same page . You can save 20% of that EASY if not more yearly . Compounded at a Conservative 6% and in 10 years you have over $1 mill liquid

I was in your shoes . Also a health professional , 10 years ago I changed my life . Had to . Saved 30% a year (income not quite as high as yours ) , today at 52 am on pace to retire /slow down by 55ish . Financial independence my friend , tremendous mental value . Health care is a grind…you know this well :)

#46 Reality is stark on 01.20.19 at 6:52 pm

Drop the nanny?
That’s a joke.
If he suggests that, it’s straight to divorce court.
This society is a mess as it is based on entitlement.
The country has to import it’s work ethic.
As housing and oil fall apart so will marriages.
Socialism and family court, what a country of fools.

#47 Out Of Work CEO, Will Travel on 01.20.19 at 6:59 pm

Two siblings in my family have reached the 1% …the retired academic went through a good college in New Brunswick then rose to the top in “Manitoba”(no private shchool) and the other (most hated profession on this blog realtor) sibling swung into Ontario in the late 70’s and never looked back. The realtor sibling has “street smarts” and absolutely no private school. Trevor can succeed if he mellows out and cools off that wallet. Namaste Trevor. Oakville is bliss.

#48 Alba on 01.20.19 at 7:01 pm

Let’s do the math. “Under $500K, taxed at 54%.” Let’s call it $475K which leaves them roughly $220K after taxes.
They bought a too-expensive house. Sorry it’s not the nicest on the block – but a $1.5M mortgage with a $220K income equates to an actual-income to mortgage-debt (plus insurance, property taxes, maintenance) of about 9-to-1. Yeah, better than the poor people trying to buy a home making $75K after taxes…
Seriously. If these two aren’t the Poster Couple of Dysfunctional Toronto/Vancouver Housing – well, can’t imagine who is.

#49 not 1st on 01.20.19 at 7:21 pm

Garth, at least the anesthesiologist is providing a critical service, but who the hell are the divas spending big cash on stretching lessons. That’s another telling sign.

Maybe these two haven’t saved but probably the people attending that yoga studio are starbucks millennials who are in the red and still spending.

#50 Fish on 01.20.19 at 7:21 pm

Ontario Trillium Foundation $15M cut to make ‘significant difference’ to non-profit organization, charities

The Ford government announced a $15M reduction to the OTF at the beginning of January 2019

According to the media relations officer with the Ministry of Tourism, Culture and Sport, in 2018-19, the OTF invested $68 million in local community programs across the province. (Ontario Trillium Foundation / Facebook)

Christina Jung · CBC News · Posted: Jan 20, 2019 10:00 AM ET | Last Updated: 9 hours ago

https://www.cbc.ca/news/canada/thunder-bay/ontario-trillium-foundation-cut-1.4980764

#51 yvr_lurker on 01.20.19 at 7:22 pm

Indeed they should be saving something substantial for sure. However, one key issue is the 54% marginal bracket; If the doctor pulls in 410K per year gross (and has no office staff to pay), his total tax remittance for Ontario (once one has included CPP and EI) at 54% marginal is about 185K according to the online tax calculator. Leaving him with 225K per year take home. Of course there is personal exceptions to reduce this tax amount, but also malpractice insurance tied to his job. He might bring in a little more, but this is a decent estimate.

Although that is a large amount to many of us, but with all the hefty expenses (1.5M mortgage, fancy cars, etc…) it would go fast. Point is that at 54% marginal which kicks in around 220K per year gross, it really eats into the apparently uber-high salaries. Bottom line is that it is much more difficult to start with zero (no inheritance, no family plan etc..) and build wealth from scratch through being the top performer in a company to get top salary increases etc….. because once you get over 220K per year much of the extra effort is just seized away…. However, if you are a part-time yoga teacher who just happened to inherit a whack of cash, or a drama teacher turned PM with big trust funds from the family plan, you can shelter your investment gains, dividend tax credits, and all sorts of legal devices, etc…. and nowhere are you paying anywhere near 54% marginal.

I agree with Davidoff at UBC that income tax should be reduced at all levels, to be replaced by increases on property taxes, land taxes, inheritance taxes, etc. If one is instead working in Hong Kong with a flat 15% tax rate, or living in Dubai like a friend I know who became a pilot with Emirates, a very ambitious high performer can actually get much further ahead through a high paying job than in Canada. Here the very high income tax is a real damper on killing yourself at your job to get big raises etc….when the gov’t grabs 54cents on every extra dollar, what is the point?….

#52 Vb_1978 on 01.20.19 at 7:23 pm

#20 Nanny paid $3000? on 01.20.19 at 5:21 pm

Yes. Don’t forget to include the employers share of cpp, ei, as well as wcb. And sometimes cell phone and in BC, paying for their MSP.

#53 Downward dog Garth on 01.20.19 at 7:25 pm

Sounds like Garth’s been shopping for new yoga tights for his new found hobby with his finance buds.

#54 mathman on 01.20.19 at 7:30 pm

this is by no means an isolated case – for every Trevor at 500k with a $1.5 Million dollar mortgage – there are 100 Jane/Bobs with 250k gross household incomes with 750k mortgages

the challenge is both sets are treading water, likely pretending to be rich with tow leased cars and living millionaire lifestyles on social media.

Yes – full time live out nanny’s in the GTA are at least 3k/month – which in many cases is cheaper than 2 kids in daycare.

#55 Barb on 01.20.19 at 7:30 pm

Trevor’s name should be Tremor.

Who raised this guy?

#56 markeroon on 01.20.19 at 7:40 pm

> 85% of roughly $ 500,000 is an income of around $425,000 just to be an anesthesiologist? Seriously? I think Mr. Ford could find some serious cost cutting with our medical profession starting with salaries!

And they went to university for ~12 years, likely accruing $200k in debt along the way. Your envy is unbecoming, and I’m shocked, *shocked* that you voted for Ford. Let me guess, you live in the burbs in the GTA and you hate downtown “elites.”

#57 Bottoms_Up on 01.20.19 at 7:41 pm

#12 expat on 01.20.19 at 4:38 pm
——————————–
The average job in the public sector does not equal the average job in the private sector.

The public sector contributes heavily into their pensions (15% of net pay). This is typically matched by the government. And the money invested by a board of financial experts.

The benefits are not simply going to disappear.

There are still some decent pension gigs to be had in the private sector.

#58 Heather Hallam on 01.20.19 at 8:00 pm

On the car leasing I wouldn’t be able to meet the km/year which I think is around 20,000. I paid cash – no loan – for my new SUV – $51,000. It included extended warranty and undercoating. That was in 2013. I pay myself every month – $500 – towards my next car whenever that will be so I have a chunk saved. I avoid car debt. It’s a good feeling.

#59 The real Kip (Ret) on 01.20.19 at 8:00 pm

“Once the kids head off to private school, tack on sixty grand.”

Give the kids to Children’s Aid and save the 60 grand.

I’m 60 and a recently retired Boomer. Guess how much the ol man gave me for education? That’s right. Same as most other Boomers, $0. Get a trade!

#60 Fish on 01.20.19 at 8:02 pm

Lunar eclipse to darken Canadian skies this weekend —

here’s how you can see it   Moon could turn a coppery-

reddish colour that some are calling the ‘super blood wolf moon’ 

Nicole Mortillaro · CBC News · Posted: Jan 18, 2019 4:00 AM ET | Last Updated: January 18

https://www.cbc.ca/news/technology/total-lunar-eclipse-1.4932126

#61 reynolds531 on 01.20.19 at 8:05 pm

Those saying public sector high performers are worth the salary and shouldn’t see pay reductions are missing what’s happened in the private sector. Hard workers and high performers have seen reductions over the years. Ask a bank employee. Ask the $16 an hour truck driver next to you on the 401.

It’s simple math. If the private sector wages are dropping they can’t support public sector wages.

#62 reynolds531 on 01.20.19 at 8:08 pm

#57

Please name a private sector gold plated pension with open enrollment.

#63 MF on 01.20.19 at 8:09 pm

#12 expat on 01.20.19 at 4:38 pm

“Used to be public sector folks made 20-30% less than private sector now they make triple and still take home gold pensions.”

-Close family member works for the public sector (federal government). She works a part time job to make ends meet here in the GTA. A lot of her coworkers do the same.

This story is about a Dr (the 1% of the public sector), not the average public sector worker who makes 50k/year (35k after deductions).

Time to wake up.

MF

#64 acdel on 01.20.19 at 8:10 pm

This article is beyond my comprehension. I cannot even imagine of the riches as this person/s claim, and yet so irresponsible.

Maybe I am getting too old for this; there are many younger ones’ on here that are responsible and get it, doing well, and that is awesome; but these people are so far out of touch that I have no words.

#65 Greg on 01.20.19 at 8:15 pm

“Consider leasing a car rather than throwing forty grand at a machine which will eventually be worth zero.”

Great post, Garth, but this one is still a bit iffy IMHO. I won’t buy new, but will buy 2-3 years old, and I think that’s the best bang for value. Lease is great too, but never ending monthly payments can be a pain, and major cash drain. If you can find a good 2-3 used car (not a beater) it can be amazing, from a safety, comfort, and financial perspective. Don’t know the used car approach too much, Garth!

#66 MF on 01.20.19 at 8:17 pm

#20 Nanny paid $3000? on 01.20.19 at 5:21 pm

“Full time in the GTA. You live in Gananoque? – Garth”

Good. They should make more as well. Most nannies get “paid” for 8 hours a day and often work 10-12. They usually treat the children as their own and are better parents than the actual parents. It’s also a legitimate path to permanent residency and citizenship.

If you can afford it, the nanny is a huge positive.

MF

#67 Lost...but not leased on 01.20.19 at 8:19 pm

Today’s token “Greater Fool” couple:

Anaethesiologist versus Yoga teacher !?!

Whats the difference?

They both involve keeping people in maximized inanimate positions whilst minimizing pulses.

aka recruiting potential Liberal MP’s for next century.

#68 Ardy on 01.20.19 at 8:24 pm

Garth,

If all those overspending and undersaving had a brain fart tomorrow and corrected to a reasonable 7-8% savings rate, wouldn’t spending nosedive and take equities with them. Your future, and mine, is stacked on these delusional beings. Should they smarten up, or worse, go bankrupt when all that debt comes due, it is we that take it on the chin as well. This is what scares me. I save 40% and my kids don’t eat bugs. But even 60/40 balanced portfolio will not survive the tumble once society hits that debt ceiling.

I don’t think one can hedge against something like that, but I’d like to hear your thoughts should you care to shares.

-RD

#69 Should be fine on 01.20.19 at 8:30 pm

Sadly it appears for a number of years the BC economy was driven almost exclusively by our frantic real estate situation which had a nitro injection by what had become an international money laundering industry. All to the detriment of regular taxpaying folks.

#70 Thanks from the "Need Help" poster on 01.20.19 at 8:42 pm

Thank you Gravy Train and reynolds531, really appreciate your tipps! And thanks to Garth for allowing me to post this item – you guys/girls are awesome!

#71 steerage steward on 01.20.19 at 8:43 pm

Never ceases to amaze how well educated, well paid people fail to grasp basic concepts of financial planning.

Spoke with a fee only financial adviser and developed a budget, saving rate, home ownership plan? No of course not, that would cost $2k that we need for the new couch.

#72 Figmund Sreud on 01.20.19 at 8:44 pm

How could this be?
______________________

M.O. … we have created a manic, nauseous world with the uncontrollable penchant for “stuff” and a sense of well being. Hence, tranquilising ourselves with over-consumption is a result.

F.S. – Calgary, Alberta.

#73 Long-Time Lurker on 01.20.19 at 8:44 pm

Flop’s still posting on Pink Snow but not here.

Flop, why’d ya stop?

#74 Loonie Doctor on 01.20.19 at 8:50 pm

I have known many Trevors. What it really highlights to me is that people can make tonnes of money yet still feel poor if they hang out or live with people who make much more (or spend like they do). He probably feels having the $2M “not-the-best-house-on-the-street” is frugal and that the nanny, trips, and vehicles are just normal basic living expenses. Same with private school if they go that route. Because that is what he is surrounded by.

People often peg their expectations against what others have and lose sight of the fact that they actually have choices. They can examine what is actually important to them and prioritize that while sacrificing things that don’t. Right now, the only thing that they seem to be sacrificing is the vague concept of their future.
-LD

#75 Terry on 01.20.19 at 8:51 pm

“85% of roughly $ 500,000 is an income of around $425,000 just to be an anesthesiologist? Seriously? I think Mr. Ford could find some serious cost cutting with our medical profession starting with salaries!”

“And they went to university for ~12 years, likely accruing $200k in debt along the way. Your envy is unbecoming, and I’m shocked, *shocked* that you voted for Ford. Let me guess, you live in the burbs in the GTA and you hate downtown “elites.”

I’ll take the bait……….Envy???? way off base here. I’ve been retired since 47 and became a millionaire investor at age 50. I did vote for Ford and wifey, (American), voted for Trump. I would never even consider living in the GTA………too many leftist Liberals there. About those “downtown elites”, they don’t exist anywhere. You’ve been reading too many Zero Hedge articles my millennial friend.

#76 Ace Goodheart on 01.20.19 at 8:53 pm

Sounds like the usual Canadian doctor lifestyle. He’s actually fairly restrained spending wise.

I know a number of doctors.

They spend extravagantly. Their monthly outlays would make many princes and princesses of small countries blush.

One recently bought an island in the Caribbean. There are apparently many islands for sale there. This one was 2.2 million US dollars. It has its own power generation station, a massive Villa and a staff of five full time employees. From what I can gather, one cooks, two clean, one performs a form of butler service and the fifth seems to be a mechanic/ Jack of all trades type who is in charge of repairs.

This stuff is really happening. When the Dr down the street says she is going on vacation ask her where. Chances are the answer will make you wish you went to med school.

And their obsession with private schools. Don’t they know the teachers who work there couldn’t get into the better paid, full pension and benefits union jobs in the public sector? You are paying 30k per year to have your kids taught by the rejects of the faculties of education. The ones who couldn’t get in. They took the crappy private school jobs as a last resort. They all applied to the public boards first.

At any rate, moral of the story Is, go to med school. Just go. Or law school. It is like a mountain of cash just pouring into your bank account each month, over and over again. It gets tiresome figuring out how to spend it all.

Just ask an anesthesiologist……

#77 The Fat Lady on 01.20.19 at 8:55 pm

THE PROBLEM…..

How do rich people make out with RRSP and TFSA accounts?

They don’t………

Those are meant for poor people.

I had to tell the doctor and his model companion but they need to visit the RICH PEOPLE’s BLOG.

GOT any in mind GARTH???

#78 deciBel on 01.20.19 at 9:00 pm

Hey Garth,
It would be interesting if you could also compare charitable contributions in 1982 versus today. I’ll bet the percentage of total income that Canadians donate has plummeted along with their savings rate. There are lots of charities that do good work and they should be a priority for our society as well.

I was in church this morning and noticed few people put money on the collection plate when it came around. I realize it’s January and people have credit card bills to pay but still…

#79 Mark on 01.20.19 at 9:08 pm

Garth or anybody else,

I just turned 34 and have a DC pension that is at about 100k with an average return of 7%. Also have about 15k in TFSA. I temporarily suspended my TFSA and ESP(company stocks…I do 6% and they do 2%) contributions to pay off a couple other obligations but plan on resuming in a year or less. My DC pension is 10% a year so about 8500(I do 4%, company 6%).

House has 150k left on the mortgage and the “value” would be around 400 now. Thankfully only paid 200 for it…
Being single income and all I’m definitely concerned as to if I am saving enough. Given what my pension contributions currently are, how much should I attempt to save in addition??

Thanks!

#80 dosouth on 01.20.19 at 9:12 pm

This is one of the most unbelievable posts of financial ignorance you have posted in a while. I note you stated 85% his until the roof falls in on their future and then it will be her’s …..just unbelievable.

We should all be in such a poor financial position. Gheez…

Our daughter, who on her own accord and with the cooperation of her banking empire, on her own time, teaches financial education courses to senior highs, adult education and professional groups. She is 35 and I give her all the credit, she recognized this at an early age….this couple needed someone in their lives to do the same.

#81 -=jwk=- on 01.20.19 at 9:18 pm

@2400/mo is minimum wage ($15 *40 *4). $3000 a month is barely above that – and you need to work 10 hour days to cover drop off and pick up. And this is what people harp about? What would you expect to pay?

#82 SP on 01.20.19 at 9:26 pm

I work in healthcare – Radiology as a technologist.

Radiologists are one of the highest paid professions. It boggles my mind the amount of wealth some of these MDs have. Vacation homes, cars, designer clothing.

While they gave up some of the best years of their lives to become physicians I also have found that many of them come from affluent backgrounds. Private schools, didn’t have to work through university etc. There are a few that came from nothing but from anecdotal evidence it appears wealth begets wealth with regards to this speciality.

Despite their income they’re just like any other profession, some are just fantastic co-workers, others assholes. They always tell me how lucky I am to have a DB pension and I honestly have to bite my tongue, wanting tell them I could set myself up for life after ten years on your salary.

#83 Shawn Allen on 01.20.19 at 9:30 pm

It Costs a Lot of Money to Be Rich

They bought a $2 million house in Oakville – “which is by far not the best house on the street, so gimme a break.” The mortgage is $1.5 million. Properties taxes this year will be almost $30,000. (c) The nanny’s paid $3,000 a month, in after-tax income. (d) Two car leases. Big insurance policies. Two vacations a year. It adds up. Once the kids head off to private school, tack on sixty grand.

********************************
Sure and the furniture for a $2 million house is not cheap. Nor the cars suitable for such a family. You throw a party and it’s not BYOB. Actually, it is often catered.

Yes, it really does cost a lot of money to be rich.

#84 SimplyPut7 on 01.20.19 at 9:31 pm

Properties taxes this year will be almost $30,000.

————————-

Property taxes seem a bit high for Oakville, there are a lot of people in homes that have drastically gone up in value over the years because of our crazy housing market, that may not be able to pay that amount in taxes every year.

I do like the story, sounds like something coming out of an HGTV episode. I guess they can put the private school on the HELOC like everyone else in their area do when they are trying to keep up with the Joneses.

#85 yorkville renter on 01.20.19 at 9:31 pm

my kids’ nanny has a better car then I do… including her husband, 2 cars nicer than mine.

#86 Al on 01.20.19 at 9:33 pm

Our protagonist today could save 75% and not feed his kids bugs. 7-8% savings rate is a joke unless you enjoy indentured service for 40 years and all the life quality restrictions that come along with it.

#87 MD fact checker on 01.20.19 at 9:35 pm

Always hard for MDs not to be seen as overpaid (posts #23, #33, #56, likely many more to come) – and admittedly our financial mismanagement and living above our means does not do us any favours with public perception. This is due primarily to:
1) Large lifestyles with no savings (the example of this anesthesiologist is a very common MD scenario sadly) – look pretty well off to those on the outside
2) Confusion of ‘salary’ with gross clinical payments. Most MDs are small businesses. The Toronto Star and the previous ON govt loved the inability of the public to diferentiate the two – this is a PR battle that MDs will never win.

For those interested – fact checker:
Average gross clinical payments to anesthesiologists in Canada as per CIHI data – https://secure.cihi.ca/free_products/Physicians_in_Canada_2016.pdf
$415k. Estimate of business expenses would be 40-50 k/year (although do not run an office as per other MD small business owners – anesthesia would still have medical liability, disability insurance, professional dues, mandatory CME, billing and accounting etc.). So the average ‘take home’ is $365k pretax and if unincorporated $170k after tax. Then there is all of the additional expenses to pay that some others enjoy as part of being an employee (benefits, pension/savings) which could be estimated at 40-50k/year. An additional consideration of course is that after 12-17 years of post secondary training (undergrad, ?grad school, med school, residency, ?fellowship) starts true income earning years at age 30-35. Substantial ‘opportunity cost’ of lost compounding interest on savings. Add on that usually MDs start with 150-200k of student debt.
Relative to other MDs anesthesia is a pretty good gig financially – no office to run, have done pretty well in past negotiations, particularly in ON. In current ON binding arbitration anesthesia is identified as a relatively ‘overpaid’ specialty relative to others – primarily due to the much lower overhead than other specialties and primary care.

My own situation:
Surgical specialist. 17 years post secondary training. Had $150k student debt at start. Work 70-80 hours a week (about a 100 if you include ‘call’ hours when not busy clinically – just available to drop everything and cut someone open at a moments notice). ‘Gross income’ $450k/year. After office and practice expenses (about $150k/year) estimated take home pretax and pre-benefits and savings $300k/year. Live in an average home in a nice neighbourhood. No second properties. Drive a 10 year old minivan that I plan on driving into the ground. Took a substantial ‘home town discount’ to work in ON and have seen my salary reduced about 25% in the last 5 years from unilateral govt cuts (tho have been working more every year). For what I do ON is the least financially advantageous place to practice in North America. When I work it out on an hourly basis over the course of my career I am paid about what a high school principal would earn. Is that too little or too much – I dunno?

Am on track financially to retire well – have been grateful to be helped by Garth’s blog, Benjamin Graham, James Dahle, and others. Have been blessed to have a spouse on the same page with regards to our lifestyle and savings. Feel fortunate every day for financial security in my chosen occupation – I know I never have to worry about being out of a job.

Love what I do – but if I were in it for the money I either would have picked a different career or would have left ON for greener pastures years ago.

#88 PastThePeak on 01.20.19 at 9:46 pm

The 54% tax bracket kicks in (in Ontario) at a little over $220K. I am not belittling the amount, as any value over 50% is ridiculous (it basically screams – better not to work more, or live here). But he is not paying 54% of total gross salary – probably upper 30s. Still quite high of course.

What this family needs is to remember the old financial saying – pay yourself first. Meaning setup your savings deduction to come right out of the paycheque (or automatically each month if self employed), so you never even see it. Then you live with what you have left.

I did this on the first year of my first job (we have only ever had group RRSPs as savings options at the tech companies I have worked at). I have never missed the money, but maxed out my RRSPs each year. Also started RESPs when each of the kids was born.

We make a lot less than Trevor, but we will be retired at a younger age when all is said and done (no private school or nannies though, so perhaps he has led a fully life…).

#89 PastThePeak on 01.20.19 at 9:58 pm

#82 SP on 01.20.19 at 9:26 pm
I work in healthcare – Radiology as a technologist.

Radiologists are one of the highest paid professions. It boggles my mind the amount of wealth some of these MDs have. Vacation homes, cars, designer clothing.
++++++++++++++++++++++++++++++++++++

I have read that the radiologist is one of the higher paid white collar professions that will be significantly impacted through machine learning / automation in the not too distant future. Even in the high end jobs, you have to set money aside as circumstances can change…

#90 Brandon Koepke on 01.20.19 at 10:05 pm

The home itself is more than 40% of their after-tax income if you only consider direct costs and not principal payment.

$480,000 * (100% – 46% (Ontario effective tax rate)) = $260,000.

$2,000,000 * 3.5% (interest only) + $30,000 (property tax) + $2,000,000 * 1% (maintenance) = $120,000.

$120,000 / $260,000 = ~46% of after-tax income.

If you include principal payments and insurance it’s almost 60%. (Which is un-affordable on any income…)

#91 WUL on 01.20.19 at 10:08 pm

Arizona??

Cue “50 Years of Leafs Incompetence”.

#92 MF on 01.20.19 at 10:09 pm

#82 SP on 01.20.19 at 9:26 pm

“While they gave up some of the best years of their lives to become physicians”

-Since about 1990, almost everyone “gives up the best years of their life” studying. We have PHd’s working at McDonalds.

Time in school means zero, and hasn’t since we older milennials were in huggies.

MF

#93 Al on 01.20.19 at 10:10 pm

Trevor is tonight’s pinata it seems.

#94 Doc on 01.20.19 at 10:11 pm

Do remember that not all doctors earn as much as radiologists or anesthetists. Pediatics and psychiatry are more like 250K a year and the length of training is the same for all specialists. People should do what they love but I for one would be very happy with a nurses pension.The main thing is to live within you means. I laugh every time I see the beautiful offices of TV psychiatrists and their homes. No wonder expectations of the 1% lifestyle are so common in MD’s. Been there and done that myself but I woke up and smelled the coffee 20 yeas ago. I live in a small old house and drive a 12 year old car. In retirement I tend a large garden and keep chickens and am entirely content with what was a normal life in the 50’s. Wake up Trevor!

#95 NoName on 01.20.19 at 10:27 pm

#83 Shawn Allen on 01.20.19 at 9:30 pm
It Costs a Lot of Money to Be Rich

They bought a $2 million house in Oakville – “which is by far not the best house on the street, so gimme a break.” The mortgage is $1.5 million. Properties taxes this year will be almost $30,000. (c) The nanny’s paid $3,000 a month, in after-tax income. (d) Two car leases. Big insurance policies. Two vacations a year. It adds up. Once the kids head off to private school, tack on sixty grand.

********************************
Sure and the furniture for a $2 million house is not cheap. Nor the cars suitable for such a family. You throw a party and it’s not BYOB. Actually, it is often catered.

Yes, it really does cost a lot of money to be rich.

Household income this year, “a little under five hundred,” says Trevor (85% of it is his). Savings and investments? “I’m a little embarrassed to tell you this,” he says, “but we don’t have any.”

Now i wonder know how “you people” define rich…

#96 MR LEO ZHANG on 01.20.19 at 10:38 pm

In oakville , property tax for 2M house is around 10K rather than 30K , if I’m not wrong.

You are. ~ Garth

#97 Ken M. on 01.20.19 at 10:38 pm

They need to use that new yoga move called The Income Split.

#98 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 01.20.19 at 10:44 pm

“Zero”

That could be code for, ‘Today’s blog is dedicated to loser Toronturds and GTAholes, and the quality of life and sports in the GTA’.

The pathetic Make Believes have choked yet again, destroyed 4-2 by Arizona tonight, a sad team under 500. At home. In front of fanatics who also can’t put money into savings or anywhere intelligent, just waste it on Loser Leafs tickets. 4 out of the last 5 games, utterly wiped out by their opponents. “But it’s different here. This is Toronto”, they say, “hockey is just like our real estate market. We’re special.”

Bwahaahaahaahaaa!

These deluded fans won’t be using CPP for groceries or OAS for gas. They’ll be throwing it away on “Leafs memorabilia” to mark the 52nd, then 60th, then 75th, then 100th anniversary of their last Cup! Hey, maybe soon Dave Keon bobbleheads can be bought with Bitcoin, a reminder of the days when the city won something that Canadians care about, and make you all rich, Toronturds!!

Debt pickled forever, watching their real estate bubble implode, desperately hoping for a distraction from their self-imposed financial misery if only their horrifically incompetent hockey franchise could win something someday.

Ain’t. Gonna. Happen.

#99 Kelowna on 01.20.19 at 10:50 pm

Great post Garth and a clear reminder that smart people in one part of their life (a Doctor) and not even average in financial literacy.

Always seems to me that people like this figure it out backward. They start by telling you about all their “must haves” – big house, cars, nanny, cottage etc. etc. while those of us that have successfully retired early figured out that you need to first figure out what CRA wants, then secondly, set a percentage to save each month and only then figure out what you want to spend your remaining dollars on based on what you can afford! Not complicated – just setting priorities!!

#100 Where's The Money Greedeau-io? on 01.20.19 at 10:57 pm

Not related to present topics, but I just watched 2 of the most bought and paid for football NFL games in my life, and I’ve seen a bunch, I’m a senior. I’m ambivalent to the NFL teams playing as neither one in either game is my team.
I quit watching Canadian football because the officiating was the worst and I figured it was all fake. One down.
I now give that distinction to the NFL OVER the corrupt FIFA.
Those 2 games I saw today were the most blatant fixes I have ever seen.
The way the league slowed down the game so they figure out the outcome and the brutal calls just sealed it for me.
With all the video showing calls that were incorrect, the NFL brass insist with their stupid rules some calls cannot be reviewed. I guess using refs on the field gives them an out for fixing the game.
I guess that’s it for sports watching for me, unless I guess it’s Little League baseball series, the only thing you can’t bet on, or can you? Cherry is wearing thin, and NHL was bought and paid for years ago when Bettman took over and wrecked the game so I quit watching years ago along with the CFL.
The NHL game on the weekend between the game’s newest phenomenon McDavid in Edmonton and Calgary was hilarious as I only watched the hi-lites and saw a second high stick on him that should have been a 5 minute major only given 2 minors.
How can anyone pay any money for a ticket or a subscription when all these blatant calls are obviously tampered with?
Let’s hear it from the proponents of the deep sate of sports now!

Sports networks, you’re shooting yourself in the foot if you don’t believe you’ll lose viewers after that blatant display of obvious, imo, criminal dealings.
How come the NFL has never been investigated for corruption like FIFA?
How do you justify not reversing calls on the field when the cameras see the play so well, just because some effin’ ref on the field was watching another game being played or was told what to rule in his headphones. I will never subscribe to another sports channel ever again!

AFAIK it’s all bought and paid for, like our gov’ts.

#101 Stan Brookss on 01.20.19 at 11:07 pm

People had 19 % saving rates at the time, plus defined benefits corporate or nice government pensions were the norm.

In my calculations you need to save at least 35 % of your income (short of having defined benefit pension that are pretty much gone today) and invest it to have a proper pension.
Aligns with what people used to do with that 19 % savings rates.

Today governments prefer to leave the money with the people so they can compete in purchase of houses enriching the banks, pay more for utilities and services, enriching the oligopolies holding it. Paying nothing on deposits/that 1.75 % that BoC defines as ‘trend-setting interest rates’ that breaks BoC governor’s heart as it ‘hurts the economy’ will soon be reduced again.

Responsible governments implement reasonable pension strategies. Irresponsible incentivize ‘spending it all’ and excessive debt, which of course hurts the savers as it drives inflation up. Which enriches their already rich big business friends.

Nobody will help you in retirement, you are on your own, that’s for sure. Good luck with that CPP indexed by 1 % annually while cost of living goes up 8 + % and rents increase in double digits in 17/24 big cities.
It won’t cover grocery money even if maxed, that is for sure. Rent? Forget about it, look for a tent or an old caravan.

The lies about inflation and the skyrocketing cost of living accompanies with low or negative interest rates is going to last for a veeeeeeeeeeery long time.

————————————————

#36 Sold Out on 01.20.19 at 6:04 pm

Pretty much in line with your advice.
Move on to better places while you still can.

People chase the wind (it is like waiting for a Maple Leafs title or for the arrival of Gogot), wasting their lives only to find out they are screwed when it is too late.

I am sure there will be millions of qualified immigrants from around the world dying to fill in the void and work their behind for 30 k salaries (on average for new immigrants) and 1.5 million homes in the big cities (as is the wet dream of the owners of this place) in order to enjoy our lifestyle, great weather (how is that polar vortex outside?) and most of all – our free speech and democracy.

#102 Smoking Man on 01.20.19 at 11:09 pm

Hey puppies if an over schooled Dr told you five years ago, your done. Six months at the most. Come for treatment. And said your full of shit. What would you do?

Eat a salad?

I upped my consumption of gambling, tobacco and alcohol. Still here.

I know the bill will be due some. Till then…

https://youtu.be/e5MAg_yWsq8

#103 Ronaldo on 01.20.19 at 11:27 pm

It is very expensive to maintain a particular image. From what I have experienced from watching members of my own family with large incomes, I could have retired on what they waste each month. The more you make, the more you spend. It’s all relative.

#104 Smoking Man on 01.20.19 at 11:30 pm

Millennials. https://youtu.be/4XvI__yHNow

There are no safe spaces. Enjoy the ride.

#105 MARK POETSCH on 01.20.19 at 11:31 pm

https://www.zerohedge.com/news/2019-01-16/mortgage-stress-test-blamed-25-collapse-british-columbia-home-sales

Bet you didn’t know how much international news we make ??

#106 Ustabe on 01.20.19 at 11:39 pm

I’ve been retired since 47 and became a millionaire investor at age 50

Whoa! That is a definite 3 pointer. Garth, anymore room in the VIP section for this humble person?

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

On other matters: both my wife and I took up yoga a number of years ago. Between that and swimming it allows us to carry on like teenagers. Wouldn’t want to break a hip during matters conjugal.

I brought up an alternate solution, that of hiring a third person to oversee things and lend a helping hand as needed, but after a rational discussion we go to yoga.

#107 Yuus bin Haad on 01.20.19 at 11:56 pm

I would have saved more too, but I crumpled up most of my cash and threw it in the fireplace in order to keep warm and with the rest, I bought some fireworks to celebrate Canada Day.

#108 yvr_lurker on 01.21.19 at 12:39 am

A little off-topic for sure, but just watched the CBC interview with Jagmeet Singh. Holly shit, he doesn’t hold a candle to Jack Layton. No way I can vote for this dude…. ancient proverb “talk does not cook rice”. One could ask this dude sharp penetrative questions, and it would be like putting your hand through plasterboard… no depth of understanding at any level….. Wish there was a Chretein/Martin team for the next election…. Borth were middle-of-the-road, wiley and savvy, and did not bow down to the U.S…..

#109 Raging Ranter on 01.21.19 at 1:30 am

For those of you questing the 19% savigs figure, it is % of “disposable income” (i.e. after tax), as per StatsCan Household Indicators table. It is not an average, but an aggregate for the entire country, which works out to the same thing.

Yes, 1982 was a severe recession year, with unemployment peaking at over 13% (also from StatsCan). But what happens during a severe recession? 1) Disposable income goes way down 2) Those who still have income are afraid to spend it, so savings go way up. This is especially true when interest rates are sky high as they were in 1982. Hell, that’s almost textbook recession – people terrified to spend their money. Economists call it the paradox of thrift.

The savings rate fell through the rest of the 1980s and spiked again in the early 90s when we had yet another recession, once again with relatively high interest rates. This isn’t rocket science. It’s basic human behaviour and arithmetic.

#110 diharv on 01.21.19 at 1:56 am

Geez , high flying Drs and their spouses . I guess if you earn elite wages there is pressure to live an elitist lifestyle. I prefer the millionaire next door approach.

#111 CDM on 01.21.19 at 2:23 am

#78 deci-Bel

The parishioners are members of the church and their donations come directly from their bank accounts, they haven’t used cash on the plate for decades.

#112 Stan Brooks on 01.21.19 at 2:24 am


#28 Stan Brooks is a Kook on 01.20.19 at 5:52 pm
#55 Stan Brooks on 01.20.19 at 12:17 pm

#13 Toronto Hater is not me. BTW I am a huge Raptors fan, watched more games life than your IQ.”

So nice to hear Stanley! Nice to know you are cheering on the Raptors. As for IQ, you demonstrate your lack of any on a daily basis. Keep it up cowboy, you provide great comic relief.

You are welcome.

I had to return the favour.

Since you are owner of a private school in Toronto:
Recently I had a great laugh with a friend of mine/at his expense/ who spent 350 k on each of his kids to go through a ‘great’ private school, you know those where they re-test the kids twice so they get feel good scores; not a great income, no savings, no retirement plans, spent all the money on kids, only for them to end up in second grade universities among with the plebs/got rejected by all US universities they applied to.

So I now have a greater respect for private educators, ranking them second only after the great real estate scam artists in selling hope to the sheeple.

And hey, pay some more to those private teachers please, I am hearing they earn twice less than the public sector teachers.

#113 Stan Brooks on 01.21.19 at 2:47 am


https://ca.finance.yahoo.com/news/gap-between-rich-poor-growing-001915611.html

…and when governments fail to tax the wealthy, they pass the tax burden on to poor people through consumer levies like value added tax, …
carbon tax, higher CPP contributions, improperly-indexed CPP and OAS…. you name it.

Do I smell higher HST as the first post-election T2 present? Shh, that was supposed to be a (pleasant) surprise from the french villa guy.

#114 Sasquatch on 01.21.19 at 4:40 am

#4 Bob on 01.20.19 at 4:24 pm
I made $120K last year. … . I also saved 35% after taxes. And no, I didn’t feed the kids bugs, thanks.

*******

My wife and I take home about $110K together. We save close to 50%, no kids yet so that will change. I agree completely with your post, we do live extremely comfortably.

So many people on this planet live with less, a lot lot less. Anyone in this country can live decently on $30k per year. Anyone can live comfortably on combined $60k. If you live in an area where you can’t, move away. There are so many places to live, this country is huge. I have no sympathy for the Trevors of the world.

#115 Howard on 01.21.19 at 5:23 am

#76 Ace Goodheart on 01.20.19 at 8:53 pm

At any rate, moral of the story Is, go to med school. Just go. Or law school. It is like a mountain of cash just pouring into your bank account each month, over and over again. It gets tiresome figuring out how to spend it all.

———————————-

Is that really still the case with lawyers? I was under the impression that there is a massive oversupply of them. Major shortage of articling positions for students, let alone positions in large firms for graduates.

Of course the ones that DO make it to the big firms will be rolling in it, but I believe that comprises a fast shrinking proportion of lawyers.

#116 I'm stupid on 01.21.19 at 6:21 am

#113 Stan Brooks

That article you referenced is complete garbage. Remember one thing, rich people can only get that way if poor people give them their money. The good doctor in Garth’s post is a perfect example of this. He spends all his money, guess where that money goes? It pools and creates wealth.

The gap between rich and poor is widening because the savings rate collapsed. If the world returned to a 7 or 8% savings average all that money would come from the bottom lines of the wealthy.

#117 MF on 01.21.19 at 7:00 am

#101 Stan Brookss on 01.20.19 at 11:07 pm

Actually you forgot most immigrants come here for a better life not only for themselves but for their family. They may start off making 30k/year but their children are in our school system, growing up here, and have all the opportunity in the world.

Most immigrants I know also eventually move on make more.

More proof you don’t actually know any new immigrants and that you are just a troll.

MF

#118 BillyBob on 01.21.19 at 7:16 am

#51 yvr_lurker on 01.20.19 at 7:22 pm

I agree with Davidoff at UBC that income tax should be reduced at all levels, to be replaced by increases on property taxes, land taxes, inheritance taxes, etc. If one is instead working in Hong Kong with a flat 15% tax rate, or living in Dubai like a friend I know who became a pilot with Emirates, a very ambitious high performer can actually get much further ahead through a high paying job than in Canada. Here the very high income tax is a real damper on killing yourself at your job to get big raises etc….when the gov’t grabs 54cents on every extra dollar, what is the point?….

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

Yep. You’re describing me, right down to the “pilot” and “Dubai”. Been there done that. It’s not what you make, it’s what you keep. At one point I played with the Ernst & Young tax calculator to see what I’d have to make in Canada to equal what I put in my pocket overseas. I would have had to gross close to half a mil.

I’m not against taxed per se, but at some point they do become…egregious. That ship sailed long ago in Canada. Too busy trying to make sure everyone’s “equal”. Equally poor.

——-

#76 Ace Goodheart on 01.20.19 at 8:53 pm

And their obsession with private schools. Don’t they know the teachers who work there couldn’t get into the better paid, full pension and benefits union jobs in the public sector? You are paying 30k per year to have your kids taught by the rejects of the faculties of education. The ones who couldn’t get in. They took the crappy private school jobs as a last resort. They all applied to the public boards first.

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

It seems you have zero grasp on the actual reasons the wealthy put their kids into private schools. It has nothing to do with the quality of education, it’s making sure their progeny bond, mate, network with the offspring of other wealthy, powerful people. It’s how the best internships, inside tracks, and connections are forged. Thus helping to continue their own position in society.

This is the true “value” of those ridiculous tuitions, and why top-tier schools are always difficult and incredibly expensive to get into. Nothing to do with the education.

Surprised you didn’t know this, it’s hardly a secret.

#119 Figure it Out on 01.21.19 at 7:26 am

“Neither because as anyone old enough to follow the news in 1982 knows, the country was in recession and both unemployment and inflation were high.

That figure is some kind of statistical artifact. That 19% savings rate is utter nonsense.”

Tell it to StatsCan. – Garth

Shawn Allen is right. Nonsense. And you, Garth, are old enough to have been there, and to know it. The same loopy stuff happened to the statistics in the US:

https://fred.stlouisfed.org/graph/fredgraph.png?g=mJ61

Think people got religion and started saving more even as unemployment and foreclosures were skyrocketing? Um, no. Say you live on a street with ten houses. Poor Fred can’t make his nut and the bank forecloses on his, with a $200,000 mortgage. Now the statistics man comes along and sees that Fred formerly had $200k in debt and now has none — Fred has “saved” $200k! The average for your street is an extra $20k “saved” per household that year. This says more about the change in household balance sheets than it does about the change in household frugality or profligacy.

And that huge pop at the end of 2013 in the Fred chart? Rich folk crystallising cap gains ahead of a tax change. Which shows that the actions of a comparatively small number of really rich people can skew the national household savings statistics, in no way reflecting the activities of the “average” or “median” household.

The Fed has zero to do with this, but nice obfuscation. When GICs paid 15% there was a panic to buy them, and huge amounts of capital were diverted from equities, real estate and other assets, into fixed-income. That helps explain a ballooning in the savings rate. Of greater importance is why the 25-year average of over 7% has turned into less than 1% now. Focus on what matters.- Garth

#120 NYCer on 01.21.19 at 7:28 am

This goes all the way back to the book I read Millionaire Next Door. Living beyond means, keeping up with Jones and just thinking with higher incomes, lifestyle increases as well.

We save >50% of our net income and we don’t feel deprived and I am pretty sure we make less than this couple does in the story. Then again, if we were all like this, the economy would have some trouble no?

#121 NYCer on 01.21.19 at 7:34 am

Ugh to add my point, I also misread.

Wow $500k, ok so we make much less than they do.

Also I feel like it’s more than >50% savings on our side because this is net income; after RRSP contributions, stock options and corporate pension contributions.

Do pension contributions count as savings as well?

#122 Headhunter on 01.21.19 at 7:48 am

Re NFL games pro sports in general think WWF Wrestling. “ALL MATCHES ARE PRE-DETERMINED” Lots of people tried suing for game fixes but not one has ever won.

Pension Crisis Public Vs Private there will be a huge backlash, blowback, whathave you in a few years. Heed these words. Tax payer will just stop working, or just work the minimum.

County of Simcoe top 10 gov’t employers employ 27000 people. Top 10 private employers employ about 12500. No matter the province I bet dollars to donuts that the Gov’t is by far the largest employer. Math wont work. Pensions WILL be hit.. maybe they will just up the age to 100 before you can collect.

#123 TurnerNation on 01.21.19 at 8:07 am

Blog dogs yelping at the Doc, a bitter pillory to swallow.

Say what’s the monthly heating cost in a Oakville McMansion in this frigid -20 month?

#124 Tater on 01.21.19 at 8:07 am

Great googly moogly. My wife and I are in a similar situation (except we rent, and save). Earnings are a bit higher, and the split is more like 70/30. And we’d NEVER consider taking out a 1.5mio mortgage! That’s nuts.

And if your lower earning spouse is only making 75k, you’d be better off having them stay home rather than pay a nanny 3k a month. After tax and nanny cost, you’re bringing in less than 20k.

If you’re household income is greater than 300k and you aren’t maxing your RRSP and TFSA every year, you’re doing it wrong.

I like asking people what they’d do if they lost their job and had to make do on 75% less. Most people can figure out a plan. I then point out that eventually you retire and your income goes to 0. The fear in their eyes is pretty amazing.

#125 not 1st on 01.21.19 at 8:09 am

Garth, this message about never sell an asset class, you do know a lot of people got stopped out in the last correction basically forced out.

You don’t advise hard stops? Risky don’t you think?

#126 not 1st on 01.21.19 at 8:14 am

Its not hard to find geriatric doctors and lawyers still working. Its well known they don’t know how to balance a chequebook. Some of the least savvy people with money.

#127 crowdedelevatorfartz on 01.21.19 at 8:27 am

@#60 Fish.
“that some are calling the ‘super blood wolf moon’ ”
++++
I’ll just stick with “Lunar eclipse” instead of the ridiculous “Hollywood version”

#128 Tater on 01.21.19 at 8:27 am

#41 Sold Out on 01.20.19 at 6:34 pm
Imagine how few doctors there would be in Canada if they weren’t generally so financially obtunded. It’s only because docs are bad at financial math that they have to keep working late into life. If all the Canuck docs were savvy investors, a good number of them would retire at 46, dooming the rest of us to the futile search for a gp.
—————————————————————-

Sure I’ve said this before, but in university I worked at a discount brokerage. By far, the worst investors were Drs.

#129 Mr Pragmatic on 01.21.19 at 8:32 am

If the guy is making 425k a year I think he should be able to save more than 7 or 8% of his salary a year lol.

Heck just live like your making 300 k lmao .

First world problems

#130 Tater on 01.21.19 at 8:33 am

#77 The Fat Lady on 01.20.19 at 8:55 pm
THE PROBLEM…..

How do rich people make out with RRSP and TFSA accounts?

They don’t………

Those are meant for poor people.

I had to tell the doctor and his model companion but they need to visit the RICH PEOPLE’s BLOG.

GOT any in mind GARTH???
—————————————————————
I’ll point this out to my wife. Apparently all the UHNWs she works with who have maxed out TFSAs and RRSPs are anomalies.

#131 crowdedelevatorfartz on 01.21.19 at 8:38 am

@# 105 Mark Poetsch
“Bet you didn’t know how much international news we make ??”
++++

Spoke to a friend the other day.
His coworkers (husband and wife) just bought a 2 bedroom condo.
Apparently the hoops they had to jump through to “qualify” for 400k (after dumping 200k cash down) was unbelievable.
Greaterfools and their money…….
The banks know what’s coming….. even if the idiots that are still buying in an obviously falling market….dont…..

#132 crowdedelevatorfartz on 01.21.19 at 8:43 am

@#108 yvr lurker
“just watched the CBC interview with Jagmeet Singh. Holly shit, he doesn’t hold a candle to Jack Layton. No way I can vote for this dude…. . One could ask this dude sharp penetrative questions, and it would be like putting your hand through plasterboard… no depth of understanding at any level…..”

+++++
Total agreement.
Politicians spew out a few politically correct banalities and the sheeple fawn all over them…. but hey…… it got Trudeau elected….once.

Singh will not be elected in Burnaby South.

#133 crowdedelevatorfartz on 01.21.19 at 8:48 am

@#118 BillyBob
“Surprised you didn’t know this, it’s hardly a secret.”
++++

It’s because we’re mercifully devoid of the ravages of intelligence….unlike you.

Please ….just be patient .

#134 Dezzie McDredge on 01.21.19 at 8:49 am

Garth, Is this the trickle down effect they talk about from the rich to the working class?

#135 dharma bum on 01.21.19 at 8:50 am

#23 Terry

I think Mr. Ford could find some serious cost cutting with our medical profession starting with salaries!
——————————————————————–

Until it’s you lying in the O.R. with your chest pried wide open while you’re on a respirator.

Goof.

#136 Most insightful on 01.21.19 at 8:54 am

#87 MD fact checker on 01.20.19 at 9:35 pm

“Have been blessed to have a spouse on the same page with regards to our lifestyle and savings.”

Garth – a golden star please.

#137 Raging Ranter on 01.21.19 at 9:06 am

@119 Figure it out, you should try to live up to your screen name. The savings rate spiked during the early 80s and again in the early 90s precisely because those times were severe recessions with massive unemployment. This is classic recessionary behaviour, especially when recessions accompanied by high interest rates. In recessions, disposable income drops, and those who still have decent incomes are afraid to spend it, thus they save more. That high savings rate is indicative of the plunging aggregate demand that characterizes a recession.

It’s also grade 4 arithmetic. When you express the savings rate as a percentage of disposable income, you have your denominator dropping while your numerator rises. What do you suppose that does to the aggregate savings rate? HINT: A larger numerator (i.e. more savings) and a smaller denominator (i.e. less disposable income) means a HIGHER PERCENTAGE OF SAVINGS VS. DISPOSABLE INCOME. Basic arithmetic.

Now, does that mean we want recessions all the time just so savings are higher? Of course not. That’s why Garth stated that 19% is likely excessive, and somewhere around 8% is probably the sweet spot. But to argue that savings can’t be high in a recession demonstrates a total lack understanding of what a recession is.

#138 dharma bum on 01.21.19 at 9:13 am

Today’s post was amazing.

As far as “case studies” go, to illustrate the importance of saving, this was just a great example of how truth is stranger than fiction.

It is quite common, in our weak minded, easily influenced, brainwashed, consumercentric society, that people spend everything they make and more.

This is the fallacy of our economic system. It’s designed to keep the masses poor and indebted. Imagine if everyone heeded the sage advice to save, and be frugal.
The economy would collapse. It’s called the “Paradox of Thrift”. Economics 101 students learn about it in week 1.

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

Saving money is the first step to personal long term wealth.
For the 99%, it’s the ONLY way.

People constantly ask me for investment advice. They ask how I could retire so early. They want to know my “secret”. As if I’m some type of financial wizard. Hah!

I always tell them that you must learn how to SAVE before you even think about investing. If you can SAVE your money, the rest is easy. Saving is the “secret”. Saving is the key to wealth. Saving + Investing are the keys to freedom.

The trick is to start saving early, and be consistent.

The trouble is that most people are mentally weak. Wet noodles. Influenced by trends, advertising, peer pressure, fads, desires, urges, cravings, short term gratification.

Undisciplined slobs, all of them.

Heed Garth’s advice. Go back to the archives. Read his many, many books from decades ago. The message is always the same.

If you are too lazy, just read the most simply written book in the world called “The Wealthy Barber” by David Chilton. It’ll give you the basic method of how to save your money.

Also, as a daily discipline, after reading Garth’e blog, read
http://www.mrmoneymustache.com.

Stop spending. Curb desire. Start Saving. Free yourself.

From the Dhammapada, verse 39:

“There is no fear for one whose mind is not filled with desires.”

-The Buddha

#139 M.T. on 01.21.19 at 9:14 am

Darn lot of fine comments here today, but my favourite is from Sold Out, #41:

If all the Canuck docs were savvy investors, a good number of them would retire at 46, dooming the rest of us to the futile search for a gp.

Truth, sir, you are right. I say that speaking as a young (late 30s) GP who feels very, very fortunate to have learned from other people’s mistakes. The commenters are right about doctors being the worst with their money! I have a deep fascination with the way that money plays on one’s mind, and the ubiquitous inability to use money wisely; to see it as a means rather than an end.

I appreciate the comment from SP, #82, as well:

I also have found that many of them come from affluent backgrounds. Private schools, didn’t have to work through university etc.

Yes, without a doubt this is true, and factors into the whole phenomenon. I didn’t come from that background, and so when I finished my training and began making Real Money, I found myself astonished at just how much money was coming in. I save a lot, because I didn’t grow up with this kind of money, and I think to myself, I don’t need this to be happy! But so many people think they do.

#140 Raging Ranter on 01.21.19 at 9:15 am

I am curious how a guy who complains about a 54% marginal tax rate also has zero dollars in his RRSP. Would not the first way of reducing that tax rate be to max out his RRSP, and use up his unused contribution room?

That’s especially important for this guy, because clearly he is only going to enjoy a tiny fraction of the income he enjoys today, thus making the tax deferral nature of the RRSP even more important. He can then use his giant tax return to max out their TFSAs.

But nah, that would mean only one vacation this year, and would also mean driving those ostentatious vehicles a few more years, rather than trading them in for new ostentatious vehicles every 3 years or so. What would the girls down at the yoga studio think? What would our friends at the golf and country club think if we kept showing up in the same vehicles year after year?! What would the neighbours think?!!!! We already live in a house “which is by far not the best house on the street, so gimme a break.”

#141 M.T. on 01.21.19 at 9:18 am

Doc #94’s comment is outta the park. Yeah, this is the kind of thing I’m glad to have learned in my 30s, while my kids are still young.

#142 Stan Brooks on 01.21.19 at 9:27 am

#117 MF on 01.21.19 at 7:00 am

Let’s hope that trend continues.

#143 PastThePeak on 01.21.19 at 9:40 am

If more Canadian doctors were savvy financially, they might realize how much more they would make in the States and move…

#144 not 1st on 01.21.19 at 9:45 am

@#108 yvr lurker
—-

The fact you even tuned into hear any NDP candidate is a sad statement. Have you read their bible called Leap Manifesto. Try it out for some late night horror. Comrade Horgan probably has a copy under his pillow.

#145 milly on 01.21.19 at 9:47 am

Husband and I (26) pull in 110k and save $35k a year currently with a balanced portfolio of $200k with maxed TFSAs. It can absolutely be done, you just have to not care about keeping up with the Joneses. We also travel the world, but travel cheap (hostels, planning ourselves etc). It boggles my mind how people with so much more waste it. Private school is probably the one I shake my head the most at, why do most rich people think this is necessary at all? Best way to milk the rich out of money ever. They will buy into this even if they went to public school themselves.

#146 Mattl on 01.21.19 at 9:53 am

Wow Trevor is an idiot. The way high income earners are taxed versus say, a Realtor that has a Personal Realty Corp is a crime but come on. With that level of income he should be, at minimum, loading up RRSP’s. Assuming he is 35-40 between him and the wife they would have 200-300K in room. Of which 100-150 would be returned via tax credits. Roll that back into TFSA. Would be insanely easy to load up registered accounts.

With his income and job security he will be fine, but what a waste. That level of income should allow for a fine lifestyle, fully loaded TFSA, RRSP and a decent cash balance, and the real prize early retirement. He isn’t going broke anytime soon, his takehome is 20K a month, but damn what a wasteful way to live.

#147 NoName on 01.21.19 at 9:57 am

Now that nannys were mentioned, when i meet my wifi she nanny for some rich dude/family, i think they had 3 factories one here and two states side, and also i think she told me once he was on cover page of some financial magazine twice if i got it correctly.

What was interesting about that family they owned cars, husban was driving older up accura and his wifi had older lexus. No yoga pants and keeping up with apirances with them. I am sure that they could afford bigger house and better cars.

#148 Lee on 01.21.19 at 9:58 am

Howard #115,

The more important statistic with the legal profession is it has a very high attrition rate. The law society does not keep good statistics on this but I would say that about 40% of lawyers in Ontario who are called to the bar leave the profession within 5 years. That is not a good thing for the people who wasted their lives getting educated in the law. These are usually very capable people who would have likely done very well in other professions or callings, be it IT, construction, etc. By the time they leave law they are usually about 35. Not too old to try something else but a big waste of talent and money.

#149 LL on 01.21.19 at 9:59 am

…”The mortgage is $1.5 million. Properties taxes this year will be almost $30,000.”…

And the winners are: big bonus for bankers and increase in salary for municipalities staff!

#150 LL on 01.21.19 at 10:05 am

…|If this keeps up, Canada will lose its status as wealthiest G7 country to Japan within five years, and will be near the bottom by the end of the 2030s, the IISD report predicts”…

Finally, Japan is doing well!

https://ca.finance.yahoo.com/news/canadian-wealth-fall-highest-g7-195300187.html

#151 Brett in Calgary on 01.21.19 at 10:16 am

Yep. Great point. My best friend is a doctor (we went to post secondary together) and he’s a moderately paid pediatric ED doc… he believes whatever you see other docs do for the finances – do the opposite!

#99 Kelowna on 01.20.19 at 10:50 pm

” While those of us that have successfully retired early figured out that you need to first figure out what CRA wants, then secondly, set a percentage to save each month and only then figure out what you want to spend your remaining dollars on based on what you can afford! “

#152 Remembrancer on 01.21.19 at 10:24 am

#145 milly on 01.21.19 at 9:47 am
Private school is probably the one I shake my head the most at, why do most rich people think this is necessary at all? Best way to milk the rich out of money ever. They will buy into this even if they went to public school themselves.
———————————————————-
Based on a small sample of contemporaries who have kids go to private schools its 1) as others stated to be able to rub shoulders with “elites” and “wanta-be elites” to establish relationships for the future – ie. the pre-adult country club golf membership argument set, 2) noveau riche high salaried and likely highly leveraged status symbol seekers renting a life style for whom this is a “necessary” accessory who were likely public school attendees themselves, or 3) those w/ enough cash and a strong opinion on something or other that they don’t want their kids mixing with the unwashed public regarding or exposed to some sort of teaching that a private school promises to quietly erase from the curriculum and never speak of further based on the name on the side of the main building. There is a 4th type, but Canada seems to have less of a private military school tradition for rich troublemakers; maybe I’m just not mixing with the right crowd to make it worth mentioning is all…

Know more people with enough money that stay in public schools as well, though the funding for extras in those schools is dramatic compared to much less affluent areas… The US popular culture refers to it as the “good” school districts, in large urban Canada its school by school…

#153 NoName on 01.21.19 at 10:24 am

#145 milly on 01.21.19 at 9:47 am
Husband and I (26) pull in 110k and save $35k a year currently with a balanced portfolio of $200k with maxed TFSAs. It can absolutely be done, you just have to not care about keeping up with the Joneses. We also travel the world, but travel cheap (hostels, planning ourselves etc). It boggles my mind how people with so much more waste it. Private school is probably the one I shake my head the most at, why do most rich people think this is necessary at all? Best way to milk the rich out of money ever. They will buy into this even if they went to public school themselves.

You dont send kids to private school because science is better over public school. Sometimes after graveyard shift i’ll pull over to sturbaks to get coffee to get me home. What i noticed lots of potential yoga participants also stop buy to get their fix before dropping kiks to apellbuy college. Mr. anesthesia dude, keep nanny and tell wifi to focus on yoga business, i heard hot yoga is a thing now.

Now days every one needs some serenity.
https://youtu.be/LW_s6EqOxqY

#154 Figure it Out on 01.21.19 at 10:29 am

“When GICs paid 15% there was a panic to buy them, and huge amounts of capital were diverted from equities, real estate and other assets, into fixed-income.”

Sure, I remember that. Guys were going into the bank and saying “Here’s the keys, we can’t afford the mortgage anymore. And while I’m here, what are your rates on a 3 year GIC?”

Reallocating net savings between real estate, equities and fixed income doesn’t change the household savings rate, of course.

Huh? – Garth

#155 SunShowers on 01.21.19 at 10:40 am

“In 1982 people saved (on average) 19% of what they earned” – Garth, today, wondering why people don’t save as much as they used to

“Wage growth over the last year was less than the inflation rate.” – Garth, in at least a dozen blog posts, over the past few years.

#156 IHCTD9 on 01.21.19 at 10:43 am

Man, this couple is really getting pounded into the ground with taxes.

If they make 485K, they probably have about 280K left after taxes.

Trevor and wife make a mighty 4X our gross income, but reap only about 2.7X our net.

Sitting on a 1.5 mil mortgage at age 46 is a real kick in the @rse too. Even though the mortgage is huge – it’s still only 4.1X their income, so there is little excuse for not nuking it quick (unless they just bought the thing (heaven forbid). Hopefully it’s a bloody nice house.

The worst thing of all though – is the years of investing squandered. This is made really ugly due to the huge potential this couple had to pound it in there. Time+big incomes could have had spectacular results.

Now – even if Trevor pile-drove TEN THOUSAND PER MONTH into investments – he’ll still only develop 63K in annual portfolio income by 55 (tax sheltered/preserving the principal).

If they keep on going at 10k/mo. right till 65 – it’s still a $307,000.00/yr gross pay cut.

I’d be maxing out all tax shelters, pounding it in there like crazy, working till 60, and expecting to unload the house and downsize huge. Or, prepare your mind for joining us common folk in a small town somewhere. Maybe both.

Trevor – it’s investing crazy time for you.

PS. Stay on good terms with your wife.

#157 Howard on 01.21.19 at 10:47 am

#118 BillyBob on 01.21.19 at 7:16 am

It seems you have zero grasp on the actual reasons the wealthy put their kids into private schools. It has nothing to do with the quality of education, it’s making sure their progeny bond, mate, network with the offspring of other wealthy, powerful people. It’s how the best internships, inside tracks, and connections are forged. Thus helping to continue their own position in society.

This is the true “value” of those ridiculous tuitions, and why top-tier schools are always difficult and incredibly expensive to get into. Nothing to do with the education.

Surprised you didn’t know this, it’s hardly a secret.

————————————

Oh please.

How many highschool peers does the average person keep in touch with following graduation? In my case it’s a grand total of ONE. Now it’s true that I’m not exactly the most sociable person, but I’d be surprised if the total for most people were more than 4 or 5 on average.

And private school pedigree isn’t always a plus. My boss at my first “real” job following undergrad 15 years ago told me that he flatly refuses to hire any young person who attended a private school (at that time, it was more common for new graduates to put the name of their highschool on their resumé). His experience was that they are obnoxious and entitled. Their CVs went straight into the trash.

#158 IHCTD9 on 01.21.19 at 10:50 am

#145 milly on 01.21.19 at 9:47 am
Husband and I (26) pull in 110k and save $35k a year currently with a balanced portfolio of $200k with maxed TFSAs. It can absolutely be done, you just have to not care about keeping up with the Joneses.
____

Holy Macaroni! 200K indabank at 26? I started from $0.00 at the same age. That’s a 5.5 mil portfolio at 65, so more than double your current income in retirement without touching the principal.

Sweet!

#159 Sideshow Rob on 01.21.19 at 11:00 am

#77 The Fat Lady on 01.20.19 at 8:55 pm
THE PROBLEM…..

How do rich people make out with RRSP and TFSA accounts?

They don’t………

Those are meant for poor people.

I had to tell the doctor and his model companion but they need to visit the RICH PEOPLE’s BLOG.

GOT any in mind GARTH???”

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

RRSPs and TFSAs are not meant for poor people. They are meant for everyone and are used by smart people of every pay level.

#160 IHCTD9 on 01.21.19 at 11:05 am

#148 Lee on 01.21.19 at 9:58 am
Howard #115,

The more important statistic with the legal profession is it has a very high attrition rate. The law society does not keep good statistics on this but I would say that about 40% of lawyers in Ontario who are called to the bar leave the profession within 5 years. That is not a good thing for the people who wasted their lives getting educated in the law. These are usually very capable people who would have likely done very well in other professions or callings, be it IT, construction, etc. By the time they leave law they are usually about 35. Not too old to try something else but a big waste of talent and money.
———

…and they are too expensive. In some Ontario courts, at least 40% of litigants in family cases and more than 70% of litigants in civil cases are self-represented. Folks can’t afford them any more.

Canadian Lawyers are already having to find other ways to be involved in the Justice system outside of the courtroom – like providing advice to self-litigants for a fee.

As long as Lawyer fees, immigration numbers, and Law School grads continue to increase, the rewards for a Law Degree in Canada will continue to drop.

#161 Sold Out on 01.21.19 at 11:07 am

While we are enjoying ourselves, raking Trevor over the financial coals of his net worth dumpster fire, he’s probably getting the last laugh. Very few docs of his age come from middle class backgrounds; I bet Trevor is in line to inherit more than enough to finance a very comfortable retirement. Which can work for some, but really, wouldn’t you rather have your fiscal house in order now? Waiting for parents to kick off to cement one’s future is a pretty risky strategy.

#162 IHCTD9 on 01.21.19 at 11:14 am

#147 NoName on 01.21.19 at 9:57 am

What was interesting about that family they owned cars, husban was driving older up accura and his wifi had older lexus.
__

The company I used to work for had an owner that built the company, and an owner that bought 51%. The latter was a well past retirement old-school businessman whom I was told was a Billionaire.

You’d never know it. Dressed like an old Man, was cordial with everyone, checked out the floor and the yard in person a couple times a year. Most times he’d show up in an old 5 Series.

Every once and a while though, he’d show up in a Bentley Continental GT – just to dispel any rumors.

#163 45north on 01.21.19 at 11:47 am

passengers kept on plane 16 hours

https://www.cbc.ca/news/canada/newfoundland-labrador/united-179-goose-bay-1.4985858

Passengers were not able to leave the aircraft because customs officers were not available overnight, United said.

okay so what if the customs officers were available – what would they do?

check everybody’s passport?

how come there isn’t any common sense?

#164 IHCTD9 on 01.21.19 at 12:00 pm

#76 Ace Goodheart on 01.20.19 at 8:53 pm

And their obsession with private schools. Don’t they know the teachers who work there couldn’t get into the better paid, full pension and benefits union jobs in the public sector? You are paying 30k per year to have your kids taught by the rejects of the faculties of education. The ones who couldn’t get in. They took the crappy private school jobs as a last resort. They all applied to the public boards first.

______

Ah, well, that doesn’t jive too well in my experience.

My kids never got into hockey, they got into Chess/math/spelling/etc.. competitions. So while they were in grades 1-8, I went to many spelling bees, and saw the results of many Match competitions.

No offense, the the public school kids never won – not even once. If it wasn’t a private school taking the #1 spot, it was a home schooled kid.

Those private school teachers seem to be doing just fine.

Full disclosure: I send my kids to a private school.

Interesting Fact from the inside: There were no less than 8 public school system teachers who sent their kids to this same private school when my kids went there.

#165 Renter's Revenge! on 01.21.19 at 12:27 pm

Wow, this post really shows the importance of not wasting time when you’re young!

Making $500k/year means nothing if you do the wrong things with it.

I know a dentist and engineer duo who retired at 43 and 47, respectively, with a paid off house and two kids, but that was because they had a plan.

#166 TurnerNation on 01.21.19 at 12:28 pm

$30,000 yearly kinds proves that taxation is theft. A $500k house down the road might pay say $6000.
Is this bigger house using 5x more city services?
No, that’s all seperately billed as Utilities.
Is his family 5x larger? No.

Property Taxation should be based upon the # of persons in that property. As they are using these services.

Maybe this is why some families live, 2, 3 generations at once in a house? Getting 2-3x more benefits than a neighbour.

#167 Nicolas on 01.21.19 at 12:32 pm

Trevor is very successful– no doubt about that.
But he’s not Warren Buffett-successful.
Yet he lives in a house that’s worth more than 3X the one Buffett inhabits.
It’s very hard to build wealth in these conditions.

#168 Stan Brooks on 01.21.19 at 12:52 pm

Rich…. in debt.

https://ca.finance.yahoo.com/news/nearly-half-canadians-come-within-200-bankruptcy-survey-151450215.html

More Canadians feel they are on the brink of bankruptcy, according to a new survey highlighting the toll of increasingly hefty debt loads.

The Ipsos poll conducted by MNP Ltd. found 46 per cent of respondents come within $200 of insolvency every month, a six per cent jump from the previous survey by the chartered accountancy and business advisory firm in September.

Nearly half (45 per cent) said they will not be able to cover all of their living and family expenses in the next year without piling on more debt. Less than four-in-ten said they are confident they can financially cope with an unexpected life-changing event.

#150 LL on 01.21.19 at 10:05 am
…|If this keeps up, Canada will lose its status as wealthiest G7 …

You have to be very heavily medicated to believe that BS. That ‘net worth’ is bases on housing supper bubble valuations.

#169 NoName on 01.21.19 at 12:58 pm

@IHCTD9

people with money older cars and lavyers

Another dude who i worked for also had older lexus and decent collection of veri expensive porsches. Older i get more and more i like dude, in a mentor kind of way.

I do fix stuff for leaving, i am very good at it, although some would like to jump in and argue that, but thats story for another day… Thing about fixing stuf, is observing and training yourself to see wrongs, it that way of thinking tends to be opsticle in day to day life, but it is what it is…

I am not making this stuf up.
Back to the story, ( i was young and stoopid back then, now to, stoopid part) this one time i was sent to his office to fix fluorescent light above his desk. When i walked in things i noticed was: that stepladder that i brought with me were short but not to short, yahoo finance some chart was open and big blue print of something on his table.
While i was doing my job i can hear the talking about redisaining part and adding lots of holes on a part, so they dont affect function and integrity of part but save him a money because he is paying for parts by weight not by pcs.
That chart he was looking at on his laptop looked very good, probably intraday chary, i remember seeing 1day, but i could be wrong on that one.

And on a side note, you just have to look down south to see that your statement in action, and how is 100% correct. more lawyers than specific sector, factory working stiff…

“As long as Lawyer fees, immigration numbers, and Law School grads continue to increase, the rewards for a Law Degree in Canada will continue to drop.”

All employees, thousands, motor vehicles and parts, seasonally adjusted
(most likely direct auto manufacturing jobs, default chart 2008-2018)
https://data.bls.gov/timeseries/CES3133600101?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

Chart: Employment in the legal services industry and in total nonfarm industries, 2000-14, seasonally adjusted (in thousands) (scroll half way down)
https://www.bls.gov/careeroutlook/2014/article/careers-in-law-firms.htm

One more thing if somone poses good social skills i’ve heard that legal secretaries are making very good money.

#170 also in cowtown on 01.21.19 at 1:08 pm

This article is a perfect example of “It ain’t how much you make, but how much you keep”.

Personally, I have supported a family of four and never made more than this gentleman’s yoga instructor spouse.

Recently turned 60 with $1.8 M in a diversified portfolio, and a house worth $650K.

Live within your means, and pay attention to Garth’s words….

#171 Shawn Allen on 01.21.19 at 1:08 pm

Figure It Out Has it Figured Out

#119 Figure it Out on 01.21.19 at 7:26 am quoted me and responded

Neither because as anyone old enough to follow the news in 1982 knows, the country was in recession and both unemployment and inflation were high.

That figure is some kind of statistical artifact. That 19% savings rate is nonsense.

****

Shawn Allen is right. Nonsense. And you, Garth, are old enough to have been there, and to know it. The same loopy stuff happened to the statistics in the US:

https://fred.stlouisfed.org/graph/fredgraph.png?g=mJ61

*****************************
Figure It Out is obviously someone to be listened to.

People were scrambling to pay off debt. Few had anything to save which is why banks had to offer a whopping 15% to entice savers.

Oviously some smart people did save.

But I agree with Garth that the big picture is 7% average historical saving rate turned into 1%.

Part of the reason for that is a lot more retired households these days. They are drawing down savings as they should. Demographics would explain part of the lower saving rate.

Anyhow thank goodness there is not much “we” in economics. Joe’s lack of savings won’t affect frugal Frank very much at all.

#172 Ace Goodheart on 01.21.19 at 1:19 pm

RE: #115 Howard on 01.21.19 at 5:23 am

“Is that really still the case with lawyers? I was under the impression that there is a massive oversupply of them. Major shortage of articling positions for students, let alone positions in large firms for graduates.

Of course the ones that DO make it to the big firms will be rolling in it, but I believe that comprises a fast shrinking proportion of lawyers.”

This, once again, is more of a millennial problem.

Talk to a mature law student as to what they did when they graduated and were looking to article. They will tell you they articled for very little pay, or sometimes for free entirely.

As soon as they got their ticket, they would start taking clients.

Within a few years they are successful practitioners, often with associates and staff of their own.

Millennials, don’t do that. What they do, is they decide that they are entitled to jobs for life, at high rates of pay, and that these jobs should be just waiting for them, with no competition and as their birthright for being born on planet earth.

If this is not the case, they complain.

The result is a lot of unemployed former law students, who cannot find articling positions.

The millennial entitlement myth is a disease that our society has to get cured of. I continue to hope that the generation coming up is more prepared for the realities of life on planet earth (ie, it is not just a place where you are given everything, everything is guaranteed and all you have to do is demand stuff and it will come to you).

Otherwise, we are not going to do very well. I guess for me anyway it’s not huge ’cause I made myself rich quite early in life and I can pay my bills without working. But for society in general it’s kind of epic. There is this entire cohort of us that is convinced that they are entitled to stuff without doing anything at all to deserve it.

#173 My Big Sister Told Me on 01.21.19 at 1:21 pm

So this happened at my son’s school the other day…Walking out of practice with my son and 2 friends. Friend #1 is carrying new brandname sneakers which his parents sacrificed to pay for. Friend #2 notices the shoes and expreses envy to his mom standing right behind him… who quietly reminds him he got new sneakers at xmas, also brandname, just not the same ones… the look on her face was sheer devastation that the crazy amount of borrowed money spent on the brandname sneakers at xmas are not the coolest.

So my kid gets in the car with me. I ask him about his sneakers (not brandname). He quietly tells me not to worry… he does not want to wear sneakers so expensive he is going to have to worry about them while playing…

Which kid are you?

#174 Steven Rowlandson on 01.21.19 at 1:36 pm

The only way one could save is to have a job and live on far less than one earns. That is of course if you are not rich to begin with. Given a job your first challenge is living some where…Lots of luck as there is no affordable places to buy or rent in Canada unless you have a serious 6 figure income or are some kind of multimillionaire or better. As Garth has pointed out inflation is deemed to be caused by wage increases so kiss good bye to asking for a living wage unless you are part of the privilegensia and then may be. Inflation is believed to cause interest rates to rise and this would cause governments and real estate debtors to pay more money to service their debts.. Totally unacceptable indeed… from their point of view. So as a wage slave you are getting equal to or slightly better than what the law allows employers to pay you or it might cause inflation, it might damage the finances of governments and home owners and worst of all you might be able to live in Canada and have a family because you can have the non zero chance of paying for it if you could only get 6 to 7 times what you are earning. With or without a job you will never live in Canada… But if you save and invest is it possible? Seriously? You would need honest markets and no chance of losing money on anything. No chance of that happening anytime soon.
If we had that I would not have lost $49,000 to stock market hanky panky and would have done better with the PMs. Hell I might have achieved my financial goals by now and bought a home and started looking for a wife and scared the crap out of the leftists by being a father of children that look a bit like me. I would not be sleeping in my car or sleeping in a homeless shelter with drunks, drug addicts or the good the bad and the ugly. Considering the skills and assets that I do have I find it rather ironic.
Something out side of me is totally screwed up. That something is just like the Wiemar republic. For all its sins and crimes it was hailed as being a ideal democracy even in Canadian history classes. Everything going on today happened back then between 1919 and 1933. One damned thing for sure is too many people don’t learn from history and that is why history either rhymes or repeats. Here is something to remember. It is a truth and a law of physics. Every action triggers an equal and opposite reaction. What do you all suppose would be a reaction to what has happened since the 1950’s in Europe and North America? Think about that.

#175 The New Normal on 01.21.19 at 1:56 pm

This is when two NATO countries are fighting each other in battle. Could this possibly be happening in a normal world? Its happening now.

#176 LL on 01.21.19 at 2:02 pm

CELI question:

If you max your CELI (let’s say 50K or more) and one day you need the full amount, how do you withdraw the money in 1 shot? You have to close the CELI?

#177 Generation Why on 01.21.19 at 2:09 pm

Garth spelled it out in the second comment box, $75,000 a year she must own the yoga studio.

I’ll pay myself on the back for figuring that out ahead of time. She should pay herself minimum wage, income split, and carry a fat universal life policy structures under the Corp.

You must sell insurance. Otherwise that’s just funny. – Garth

#178 LL on 01.21.19 at 2:16 pm

In fact it is not CELI, I mean TSFA.
Can you withdraw the full amount and do you have to close the account?

#179 MF on 01.21.19 at 2:17 pm

#164 IHCTD9 on 01.21

I’ve got family members who are dentists and lawyers. Friends who are doctors, engineers and accountants..all of whom went to the public system.

It depends on the kid..not the system.

MF

#180 Howard on 01.21.19 at 2:24 pm

#172 Ace Goodheart on 01.21.19 at 1:19 pm
RE: #115 Howard on 01.21.19 at 5:23 am

“Is that really still the case with lawyers? I was under the impression that there is a massive oversupply of them. Major shortage of articling positions for students, let alone positions in large firms for graduates.

Of course the ones that DO make it to the big firms will be rolling in it, but I believe that comprises a fast shrinking proportion of lawyers.”

This, once again, is more of a millennial problem.

Talk to a mature law student as to what they did when they graduated and were looking to article. They will tell you they articled for very little pay, or sometimes for free entirely.

———————————————-

Quite frankly, I think this is pure BS. I don’t have stats to back up my opinion, but then again neither do you I assume.

Nobody expects to get rich while still an articling student. But the fact is there is a shortage of positions available at ANY salary. The same issue exists, albeit to a lesser degree, for residency posts for young doctors. No, despite what you’ve said, Boomer or GenX lawyers and doctors never once had to deal with such shortages.

Why don’t you also ask the hypothetical grey-haired lawyer how much he or she paid in tuition 30 years ago.

#181 active on 01.21.19 at 2:27 pm

New headline in G&M today:

“Nearly half of Canadians are within $200 of financial insolvency: poll”

Congratulations, Canada! keep up the good work!

#182 Lee on 01.21.19 at 3:26 pm

30 years ago tuition was about 1500.

And salaries? – Garth

#183 espressobob on 01.21.19 at 3:31 pm

Hard to believe many fail to look over the horizon. But, we all live by the decisions we make.

#184 jess on 01.21.19 at 3:32 pm

69 Should be fine on 01.20.19 at 8:30 pm

“hot money” market ;)

one would think with all the tech in china they could locate these accounts and especially faces!

https://www.cbsnews.com/news/60-minutes-ai-facial-and-emotional-recognition-how-one-man-is-advancing-artificial-intelligence/

#185 mike from mtl on 01.21.19 at 3:54 pm

#178 LL on 01.21.19 at 2:16 pm

Can you withdraw the full amount and do you have to close the account?
///////////////////////////////////////////////////////////////////

Yes of course, for TFSA withdrawals (even total) are totally fine and count towards contribution room. But be aware some institutions charge close-out fees and sometimes withdrawal to another institution (ex. orange people).

You can have multiple TFSA accounts at different places no problem so long as you don’t exceed your contribution limits when adding to any of them.

#186 Tater on 01.21.19 at 3:56 pm

#182 Lee on 01.21.19 at 3:26 pm
30 years ago tuition was about 1500.

And salaries? – Garth
—————————————————————-
In 1990 you could work 300 hours to pay for 1 year’s tuition, at minimum wage.

Now, you’d need to work 500 hours.

The cost of university tuition has gone up 5.5% per year since 1990 while wage growth has been less than 1%. Education is definitely getting more expensive.

#187 jess on 01.21.19 at 4:00 pm

siemans scandal connections

The main questions were left unanswered. Investigators then concluded that sending a second letter rogatory wouldn’t make sense.

As a consequence, Siemens’ links to Mossfon – and with them Kohldorf’s links –remained in the dark for nine years, until now. On June 10, 2008, Kohlsdorf testified for three hours at the state prosecutor’s office, and investigators were still unaware of the link to Mossfon afterwards. As the documents reveal, on the very same day as his testimony, Kohlsdorf’s contact person at Mossack Fonseca sent an email to an internal distribution list stating that he had just received “bad news”. It was possible that the Siemens millions would have to be transferred back to Germany. This meant that “we will lose this money and our client Gillard”.

https://panamapapers.sueddeutsche.de/articles/570e7bb4a1bb8d3c3495bb08/

==========
Dirk Brauer, a German investment banker who worked for Mossack Fonseca’s Asset Management Department, was arrested in November 2018 at a Paris airport. He was subsequently indicted in absentia by United States prosecutors for helping a number of his clients defraud American tax authorities for over a decade.

According to U.S. prosecutors, Brauer and his conspirators assisted Mossack Fonseca clients in hiding the full extent of their wealth through “fraudulent, deceitful, and dishonest means,” including a string of bogus offshore companies complete with falsified documents.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9138-former-mossack-fonseca-employee-extradited-to-germany

dirk brauer was extradited to Germany on Wednesday in connection to the sprawling international tax scheme exposed by the investigation, German media reported.

https://offshoreleaks.icij.org/nodes/11005026

========
from By Dailymail uk 9 May 2016

Hundreds of economists urged world leaders Monday to end the era of tax havens, arguing they only benefit rich individuals and multinational corporations and serve to increase inequality.

The 300 economists, in a letter coordinated by activist group Oxfam, say poorer countries are hit hardest by tax dodging.

What has changed?

#188 IHCTD9 on 01.21.19 at 4:13 pm

#179 MF on 01.21.19 at 2:17 pm
#164 IHCTD9 on 01.21

I’ve got family members who are dentists and lawyers. Friends who are doctors, engineers and accountants..all of whom went to the public system.

It depends on the kid..not the system.

MF
_____

Have you no memories of receiving a bit of wisdom, some good advice, or some great insight, from a teacher in your past?

Did your teachers not challenge you, and push you to go where you would not have gone on your own? Has not at least one of them along the way become a role model of sorts? Aren’t there 1 or 2 teachers who you look back on with respect, now understanding why they said what they said, or did what they did?

I thought everyone did.

I know what you’re saying and you’re right – some kids are better at some things than others. Teachers are only part of the equation, and I don’t think good grades are all you need to succeed in life – or that this is all an education is. Nevertheless, it IS true that the teachers, the policies, the resources, the demographics, and the environment ALL play a role. This stuff has been studied to death.

#189 jess on 01.21.19 at 4:22 pm

general data protection regulation. –gdpr

For the first time, the company was fined using new terms laid out in the pan-European general data protection regulation. The maximum fine for large companies under the new law is 4% of annual turnover,

…”Dr Lukasz Olejnik, an independent privacy researcher and adviser, said the ruling was the world’s largest data protection fine. “This is a milestone in privacy enforcement, and the history of privacy. The whole European Union should welcome the fine. It loudly announced the advent of GDPR decade,” he said.

https://www.theguardian.com/technology/2019/jan/21/google-fined-record-44m-by-french-data-protection-watchdog

#190 Lee on 01.21.19 at 4:38 pm

#182,

Tuition has gone up at a much higher rate each year than salaries and fees in the last 30 years, even in the legal profession.

#191 PastThePeak on 01.21.19 at 4:56 pm

#179 MF on 01.21.19 at 2:17 pm
#164 IHCTD9 on 01.21

I’ve got family members who are dentists and lawyers. Friends who are doctors, engineers and accountants..all of whom went to the public system.

It depends on the kid..not the system.

MF
+++++++++++++++++++++++++++++++++

It is a logical fallacy if you believe your examples (which are of course true) also mean that there is no benefit to a private school.

The elementary middle school my kids went/go to is a joke. The school building is crap, the equipment is crap, and the teaching approach is…erratic…to say the least. My daughter has had 6 teachers for the english topics side (of French immersion) over the last 1.5 years. The kids only get by with help from parents or tutoring. They are not well prepared for high school (an experience I had from my first born).

I used to think the same as you MF, until I had actual kids in the system to see how far the public system (Ontario) has fallen. For us in the beginning, the cost/benefit did not weigh to private schools at the time (spend a smaller amount on tutoring), but I am much more open about it now.

#192 BK on 01.21.19 at 5:30 pm

7-8% seems skimpy to me even, though admittedly it would be a good start for most. I estimate I need to save 25% to replace my current non-saved income, after adjusting for future inflation and not counting on CPP or OAS to be around for me. Doesn’t make me much fun at parties, but I just don’t understand where a guy like this pisses away 400k every year.

#193 Dean on 01.21.19 at 10:48 pm

Re: #12 expat on 01.20.19 at 4:38 pm

At our high school 7 teachers drive Porsche Cayennes,,,

Used to be public sector folks made 20-30% less than private sector now they make triple and still take home gold pensions.

Reversion to the mean means that the public sector entitlements will be wiped out at some point as the private sector calves from taxes at all levels.

At some point this gross travesty will correct itself when no one can pay taxes or like I and my friends we just leave the country and say to hell with socialism…

Some are more equal than others –

for now

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1) Which school? What do their spouses do for living? Do you have proof (i.e. picture)? Is it a private or public school?

2) Re: entitlements…sure maybe…then again there goes CPP, OAS and GIS as well then.

3) your name is ‘expat’ and you said you left the country…sooo back to #1…what school?

Nice try.

#194 Doug in London on 01.22.19 at 12:21 pm

Making 500 grand and no savings? Yes, Oakville is an expensive place to live and it’s easy to see how someone making 100 grand or less would be struggling to pay the bills and have no savings, but making 500 grand? there’s something seriously wrong with this picture if they have no savings.

A lot of concern has been voiced over the new Ontario government cancelling the revised 2015 health and sex education program. While that concern is understandable, a bigger deficiency in the school system is a lack of financial education. It’s not just due, but long, long, long overdue. It should have been part of the education system when John G. Simcoe became Governor of Upper Canada, way back in 1791.