This blog

Just who’s this blog for, anyway?

Days ago I wrote a boring piece about how to use non-registered investment accounts (it’s hard to make them sexy), prompting a few comments in this vein: ‘who the hell has enough money to fill their RRSP or a TFSA, let alone use one of those?’ And from Vancouver (where else?) came this: “The blog post reads like a guy who is trying to dig further into the pockets of current investors. Now that you’ve maxxed out you sheltered account, just give me the rest! Commission, commission, commission…”

In my day job I don’t collect commission, of course. It’s banned at Turner Investments as a total conflict of interest. (If your advisor’s taking money from some company whose products are in your portfolio, then who can you trust?)

But that’s not the point. Let’s ask it again – who’s this site for? Why do I come here six days a week to leave 750 pathetic words? I read with interest this comment posted yesterday from a guy in Nanaimo:

“Been reading this blog for a very long time. I agree with most of the advice given here. However, I have often wondered given the fact that so many Canadians do not have savings nor pensions and buy a single asset and live pay check to pay check. Why you insist on a balanced portfolio and rent. Who can afford that? Should your advice not be for the millions in trouble rather than the few with balanced portfolios?

On another note I do find this blog disheartening at times, you keep,saying the world has faced many crises in the past and we have survived. And yet you continue to write about a housing melt down. I think one post you indicated up to 30% of Canadians will be underwater as housing declines. And you wrote 60 or 70% of Canadians live pay check to pay check.
In conclusion can this really end well? The world has more debt then anytime in history. We have no collective savings, the housing market in Canada has more debt than our GDP. And yet you call us vain in worrying about today and focus on long term?

I am not saying run out and buy gold nor keep thousands in the mattress but the debt can never be paid off without a default or run away inflation.

Every newsletter I read except yours predicts a recession in a year maybe delayed because of the election how deep no one can predict, but will throwing money out of a helicopter save us next time?”

Doug Rowat answered this correctly by stating corrections are brief and bull markets are long. History is certainly a guide, showing us that investors who think short-term, rush into rising assets, bail out in a storm or fail to be balanced and diversified usually get squished. The lesson we preach here may be pedantic and hectoring but, dammit, it’s correct. Recessions are forgettable interludes in the sweep of a lifetime. Don’t get bent out of shape, or ever think it’s different this time. It isn’t.

The larger question is the nature of this blog. Elitist? First worldish? Written for the 1%ers?

Maybe so, at times. Guilty as charged. In order to successfully invest money, after all, you’ve gotta have some. To use RRSPs for tax-shifting, to earn dividends or capital gains, stuff TFSAs with the best assets, or slice taxes and income-split with a non-reg account, yeah, it takes capital. And the Nanaimo dude’s right – most people don’t have any. The stats oft quoted here don’t change much. Half of us would be screwed if we missed one paycheque. A third of folks 60ish have zero retirement savings. Household debt is off the charts and still rising since the majority of Canadians are borrowing from the future and living beyond their means.

But stop to think. Why is that?

One reason is real estate. That’s why it’s so often a topic here. Canadians have adopted a one-asset investment/financial/retirement strategy laden with risk. They leverage themselves incredibly to buy what they cannot really afford. They fall for the cult of ownership, when renting might be a far better option. People think paying off a mortgage is the Holy Grail even when that means retiring without enough cash flow to live on. It’s an obsession. Housing is a drug. And many people should never own any. A property correction – destined to come – will be an ugly event for countless families who put all their eggs in a single basket.

Second, money illiteracy. They don’t teach kids how to finance a life. Parents pass on their own loser bad habits. [email protected] preys on naiveté and misplaced trust. Mutual fund, RESP and insurance salesguys (the ones who thrive on commission) sell high-cost products and slip away into the void. This blog tries to open eyes, lay out options, and does it for free.

Third, most people confuse investing with gambling. It’s fatal. They get a few extra bucks, flip a few stocks, get crushed and never invest again. They know nothing about balance, diversification, exchange-traded funds, or investment vehicles like real estate trusts, corporate bonds or preferred shares. Tax knowledge is even more abysmal. And, sadly, Millennials – the most uber-schooled gen ever – are total rubes. The two assets of choice for moisters are GICs and condos. Say no more.

So there’s a reason this blog does what it does. It isn’t to rationalize bad behaviour, or give tummy rubs for just showing up. Sure, some rich people come here, leave insufferable, entitled comments and pretend they’re geniuses. But ignore that. They still put on their pants one leg at a time.

The point here is to help those who want it. Who need it. Nobody made you click. But you did. Well, okay then. Roll over.

213 comments ↓

#1 not 1st on 04.07.19 at 3:17 pm

How about taxes, cost of living and stealth inflation? Good reasons as well. Canadians are hit with something new every day. Now its the carbon tax which you support. And higher interest rates. Both will cause people to simply pay down debt or put it against some new unexpected cost. But few will ever invest it now.

And some of the reasons people don’t invest are right in the G&M today. Contradicting advice. One article says go 100% maple. People just tune out after a while and stick it into their house.

#2 Rob h on 04.07.19 at 3:24 pm

Hi Garth I really enjoyed your column today. I couldn’t agree more. I’m a fellow in my late 50s who’s never owned the house because they always seem too expensive. And even though I’ve never made a big income I have invested and will have what I hope is a moderately comfortable retirement. Everyday when I go to work I’m passed by a lot of people in fancy Vehicles who pull into Tim Hortons to spend $5 for a cup of coffee. And these are the people that I think are complaining that they have no money. Keep up the good work

#3 Stone on 04.07.19 at 3:28 pm

There is only one question anyone needs to think about:

Where is my income coming from if not from having a job?

If you have an answer and it is sufficient to provide you with the lifestyle you desire or you are on the path to accomplish it, great! If not, take a moment (or two) and think harder.

#4 Ustabe on 04.07.19 at 3:31 pm

I’ll not be returning to Greece again but I still read quite a few Greek writers.

I long ago built my last deck but I still read every article on deck building that Fine Homebuilding comes out with.

I long ago perfected my mother’s potato salad but I still look for ways to make it better. (Long, low and slow pork side ribs out of the smoker really help).

#5 Retief on 04.07.19 at 3:32 pm

Nice article. You might want to fix the second sentence from “sue” to “use”. I appreciate all your efforts. And it is all for free without any annoying click baiting advertising. Can we go one time without any ST or JT mentions? Be nice everyone.

#6 Retief on 04.07.19 at 3:34 pm

I meant DT not ST. Darn spell check.

#7 Richard on 04.07.19 at 3:34 pm

I don’t get. You simply state, in a humorous manner,
the financial picture as you see it. No one who comes
here on a regular basis cannot say they are better
informed about the economy. The fact that you have
a definite viewpoint I find refreshing in the financial
world. It’s a tough crowd who find fault with free.

#8 tkid on 04.07.19 at 3:36 pm

Who is this blog for? Anyone who has money leftover after doing the Jar Lady thing, that’s who.

People like me, who went from having frak-all saved for retirement and only knew what a “balanced-portfolio” was if it bit me on the ankle.

I now know what a balanced-portfolio is, I’ve got a balanced-portfolio thanks to this blog, and I’m working on having a net worth that’s 4x frak-all.

And I’m an average person, with an average salary. No 1%-er here.

#9 fwttg on 04.07.19 at 3:37 pm

Hi Garth,

This blog is for me! I enjoy the writing and appreciate the message.

Your dedication and perseverance is astounding. How you make time to write the blog and then read some of the inane, unappreciative comments is beyond me. I am sorry that (as I interpreted it) you will no longer be sharing asset allocations. That was valuable info for a DIY investor but I certainly understand it.

Please keep up the valuable work!

#10 jimbo on 04.07.19 at 3:51 pm

right on Garth….been a follower of this blog for a number of years and find it interesting, informative and the comments entertaining.From a comfortable position of a retiree about to due the rrif thing next year(72) and a DB,I can t seem to get motivated passed the brain dead gic’s and that [email protected] selling those conservative type portfolios(please forgive me,Garth).Anything left over after shuffling off this mortal coil is left overs anyway.I consider myself and family to be greatly blessed.Thanks for your dedication on this blog and your service to the people of this good land.

#11 Pat on 04.07.19 at 3:54 pm

Who is this blog for?

It’s for someone like me – a recent immigrant to Canada, who’s lucky to have a moderately well paying job and is looking for sane agenda-free investing advice.

Garth, your insights on RRSP, TFSA and other investments are phenomenal. I seriously doubt I could get the in depth advice I get here anywhere else, even if I paid for it. Heck, Friday’s article on non-registered investments was such an eye-opener for me, I think it should be mandatory reading for every adult in Canada. Thanks to this blog, I haven’t sunk my money into GTA real estate despite tremendous peer pressure from friends and family. I continue to rent modestly and enjoy a life that’s a trifle less stress free than folks I know who are up to their eyeballs in mortgage debt.

You and this blog are a national treasure Garth – keep rocking on!

#12 Lisa Power on 04.07.19 at 3:54 pm

Thanks for all the great advice. I started reading over a year ago and knew nothing about proper investing – you are correct that it’s knowledge that unfortunately isn’t passed down (you can’t pass down what you don’t know). I still have a long way to go but can no longer plead ignorance of how to go about it now.

#13 Andino on 04.07.19 at 3:55 pm

This blog is for me. I come, read, learn, and apply the knowledge imparted. I agree with the concepts presented here so it is a natural fit.

It has helped me greatly to organize myself and to put real effort into learning to control my financial life for a better future.

Thank you Garth.

#14 theoryAndPractice on 04.07.19 at 4:01 pm

I have learned very interesting stuff from this blog, and from some commentators as well (excluding the junk). That triggered further investigation, learning and validation of the information, in my side.

I couldn’t agree more:
>Second, money illiteracy. They don’t teach kids how to finance a life. -GT

Thank you Garth and all.

#15 Interstellar Old Yeller on 04.07.19 at 4:03 pm

The moneyed get the most out of your blog advice but I do think there’s something here for everyone. Avoid consumer debt, avoid predatory financial products, understand what shelter you can(‘t) afford, use your TFSA to whatever extent possible (and how). I still read it every day after discovering it 5.5 years ago. Thanks for keeping it going, Garth.

#16 Mr. White on 04.07.19 at 4:14 pm

Pay yourself first. If you earn $100.00 per week, save $5 to $10 bucks. Put it in a savings account. At 2% in one year you will have $265 for your $5 bucks in savings and $530 for you $10 bucks in savings.

Now you have a little capital. If you take that $530.00 and buy 14 shares of XEF, which is an ETF that follows the TSX 60 and has a very low management fee. If that fund follows its history, you will be earning around 7% on your dough. In 30 years that is about $4,000.00. If you did the same thing every year you would have invested $16,430 and have $57,000 at that point.

That is if you earn $100 per week and save 10% of that.

Anyone can find ways to spend 10 bucks a week on coffee, so quit drinking coffee and make an investment.

Now put in your real salary. See what happens.

It is really hard to do, but with not much real effort, you will have a milion or so bucks kicking around before you know it.

So pay yourself first.

#17 The Great Gazoo on 04.07.19 at 4:18 pm

Appreciate this blog. It’s like a good friend who knows the business well and understands the political environment sharing the real story when it comes to investing, current events, politics – and what to anticipate with respect to policy changes or the economy. Understood these are informed insight and forecasts and not to expect perfection.

The advice and insight all make good sense to me – plus Garth is one of the more entertaining writers. Some of his colleagues no so much.

This blog has made a positive difference in my life and I’m thankful for the contribution you make.

#18 Mean Gene on 04.07.19 at 4:22 pm

Nanaimo is a Mill Town with fuel guzzeling trucks and other money wasting pursuits, like smoking and excessive drinking.

Hypergamy also plays a role in the household financial mess.

#19 Davebo on 04.07.19 at 4:27 pm

Garth!

I’ve been reading you for years and this is your best post yet! Thanks…

#20 Richie on 04.07.19 at 4:35 pm

I came here to make a comment, then noticed Pat had succinctly summed up my feelings and circumstances.

#11 Pat on 04.07.19 at 3:54 pm
Who is this blog for?

It’s for someone like me – a recent immigrant to Canada, who’s lucky to have a moderately well paying job and is looking for sane agenda-free investing advice.

Garth, your insights on RRSP, TFSA and other investments are phenomenal. I seriously doubt I could get the in depth advice I get here anywhere else, even if I paid for it. Heck, Friday’s article on non-registered investments was such an eye-opener for me, I think it should be mandatory reading for every adult in Canada. Thanks to this blog, I haven’t sunk my money into GTA real estate despite tremendous peer pressure from friends and family. I continue to rent modestly and enjoy a life that’s a trifle less stress free than folks I know who are up to their eyeballs in mortgage debt.

You and this blog are a national treasure Garth – keep rocking on!

#21 TFS on 04.07.19 at 4:38 pm

Hi

Been reading, seldom commenting for about 4 years now. Sure some of Garth’s post are repetitive and some of material dry….but that’s the point of building wealth….it’s pretty simple but for most…not easy. I ignore the financial media and feel Garth + MMM has it pretty much covered.

Keep up the good work

#22 Lost...but not leased on 04.07.19 at 4:41 pm

RE versus Stocks…etc.

Having Federal Reserve, fractional reserve banking and other voodoo economics….the markets do well because trillions were swindled out of the legal economy and compounded via injection by money laundering. Its a rigged game wherever and whatever you invest in, the rug can be pulled at any moment, but the game of fiscal musical chairs must be kept going which is why things appear so rosy.

Nobody seems to remember all the derivatives and other toxic assets generated before the 2008 crash…why haven’t these blown up yet ?..the fact they haven’t yet leads one to conclude the game is rigged with layers of duct tape.

#23 DrinkDiveDance on 04.07.19 at 4:49 pm

Garth’s advices have helped me build wealth starting from $50k to where I am now. I was one of the earliest readers from year 1. Just 2~3 years after graduating with almost nothing and eating ramen.

Though, I didn’t take most of his advices for actual wealth building (that requires risk). I learned which assets belongs in which accounts and how to properly setup the “safe” part of my life which allows me to pursue all the risk I need.

One of the examples is actually buying a condo and then a house, even though Garth has been crying the housing market is going to collapse the whole time.

No collapse, but a correction is inevitable, and will hurt the overly-leveraged. – Garth

#24 Sigmund Sreud on 04.07.19 at 4:49 pm

Just who’s this blog for, anyway?
___________________________________

Well, … it’s primarily for all those who are challenged to discern a difference between egoism and egotism. So it seems… [Hint: Mac Davis c. 1974]

Best,

F.S. – Calgary, Alberta.

#25 Remembrancer on 04.07.19 at 4:51 pm

#22 Lost…but not leased on 04.07.19 at 4:41 pm
Nobody seems to remember all the derivatives and other toxic assets generated before the 2008 crash…why haven’t these blown up yet ?
————————————————-
Huh?

What do you think crashed in 2008 if not toxic asset derivatives based on subprime mortgages?

#26 Ben on 04.07.19 at 4:53 pm

This blog is for me. I’m not a 1%, but I’m starting to build a balanced portfolio that will augment a DB pension when I retire several decades from now, and I convinced my wife to move her RRSP’s from mutual funds that never grew or shrank into a balanced portfolio of ETF’s, and then start a TFSA. I didn’t think Fridays post was for the 1%, rather it made me think about how a non reg account may fit into my financial picture a few years down the road. For now a TFSA and RRSP is fine, but you raised some valuable points I hadn’t thought of before, and I’m glad you did. Maybe I’ll be just slightly more comfortable in retirement because of it.

I don’t think you’re infallible Garth, I disagree with you from time to time. However, I always find the read entertaining, and usually quite educational; I’ve learned a lot from this blog. My financial future is stronger for having read this daily for several years. Thank you for that.

#27 Watcher on 04.07.19 at 4:53 pm

Thanks for daily sharing your thoughts Garth.

I appreciate it.

#28 Juve101 on 04.07.19 at 4:54 pm

This blog is for me!
Must read some days, fun read most days, and free every day! Can’t thank you enough.

#29 Luke Clarke on 04.07.19 at 4:56 pm

Garth, I learned about you about 15 years ago when you wrote some of your books about 2015, 2020 from a co-worker. I created my balance sheet like you said to do and that was the best financial advice I have ever received. I’ve made some investment mistakes but thankfully nothing fatal. I read your blog everyday and love it and Thank-you for doing this for free!

#30 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 04.07.19 at 4:57 pm

This blog is definitely not for Toronturds and GTAholes, most are just way too house horny and delusional to get it.

But today, let’s pause to salute the career of Bob Cole, who broadcast his last NHL game last night.

https://www.cbc.ca/sports/hockey/nhl/legendary-play-by-play-man-bob-cole-makes-final-call-1.5088019

And of course the disrespectful and incompetent Make Believes choked again for him, pathetically closing off their regular season with three straight losses and a 6-5 defeat at the hands of the Montreal Canadiens, Canada’s true hockey team.

Bob smartly saw this in the cards, and decided to get out now rather than being on the scene when Toronto chokes and gasps its way out of the playoffs in the next weeks. Poor Bob spent 50 years broadcasting, desperately hoping for a Leafs win. Maybe next lifetime, Bob. Oh Baby!!

On a lighter note, you may enjoy this debate from yesterday, about whether the Make Believes are the worst hockey franchise in the world (in the worst city in Canada).

https://www.cbc.ca/radio/thedebaters/april-6-2019-the-toronto-maple-leafs-let-yourself-go-1.5087062

#31 Danforth on 04.07.19 at 4:59 pm

Re: unregistered investments

Garth, a question for you re: tax strategy:

Is it common or best practice to hold in one’s cash account only assets where the investment proceeds are taxed as Dividend or Capital Gains?
Ie, avoiding anything which is taxed at 100% of marginal rate.

or….is having some stuff taxed at 100% of the marginal rate an unavoidable byproduct of being diversified in one’s Unregistered account?

Try to keep assets paying interest, and fully taxed, in a registered account. – Garth

#32 3s on 04.07.19 at 4:59 pm

Hey Garth, I want it, thanks to you need it less and less and love it. Thanks for great advice over the years that turned into the fin literacy growth I never got from the folks!
You’re rock star legend!

#33 ts on 04.07.19 at 4:59 pm

Great post today, Garth. I’ve been reading this blog for years and have learned so much. It does truly “open one’s eyes” to what true financial investing really is, the risks involved, and what’s required to have a diversified, balanced portfolio. It also teaches you what it isn’t -gambling in the stock market. You’ve brought such clarity and a wealth of financial knowledge that I just can’t understand how people can complain and how you put up with it. Thanks for all the free and invaluable financial advice that is so scarce in the world today. It has really made a positive difference in my family’s life.

#34 Nonplused on 04.07.19 at 5:09 pm

I fail to see how this blog isn’t for everyone. Garth, you cover advice for people at all points along their adult journey, from moisters just entering the work force with condo lust right through to retirement planning and even the 1% who lucked out and now have some extra money to invest.

People who have a defeatist attitude and say they don’t need to think about money because they don’t have any take a pretty bleak view of the future and their own potential. When I graduated university I didn’t have a pot to piss in and some pretty substantial student loans. 30 odd years of hard work and some good luck and I have enough financial security that I can work when I want. Now I did enter the housing market basically as soon as the student loans were under control but back then the numbers looked a lot better, you could buy a house for 3-4 times a decent income and the most CMHC would cover was $170,000 or so, which coincidentally was about the same as a decent house cost.

Anyway, somebody out there must have some money because this time of year I see a lot of skidoos riding around on the back of big pickup trucks. Sometimes I see whole trailers full of them, one for each member of the family. Considering what those things cost this is a substantial investment for something you can only use on the weekends when there is snow and depreciates like crazy. Skidooing is probably a lot more fun than an RRSP though, I’ll admit. Maybe they have enough money for both.

#35 yorkville renter on 04.07.19 at 5:12 pm

“Sure, some rich people come here, leave insufferable, entitled comments and pretend they’re geniuses. ”

yep… pretty much. I’m sometimes that guy

#36 Linda on 04.07.19 at 5:13 pm

Saving can be done by anyone. It consists of setting aside funds that could be spent ‘somewhere else’. I’ve heard lots of people say they have nothing left over to save. However, I see those selfsame people spending money on items that are not necessities. Woe betide anyone who says so, however.

This blog offers free financial advice. I for one am grateful for the gift. The rest is up to me. Thank you Garth for sharing. It is appreciated!

#37 SunShowers on 04.07.19 at 5:13 pm

Fourth, wages have barely even kept up with inflation for the past few decades, much less cost of living. Everything from food to rent to utilities costs more, while we make the same or less.

#38 John Foster on 04.07.19 at 5:16 pm

Garth, are you saying I’m putting my pants on wrong???

https://youtu.be/pShf2VuAu_Q

#39 @careeraftschool on 04.07.19 at 5:18 pm

Great info Garth!

The Financial Consumer Agency of Canada created the Financial Basics PowerPoint presentation to help young adults learn about budgeting, saving, credit, investing, fraud prevention and financial planning. Unbiased info and easy to read. About 90 slides. Check out the site for more info.

This is a must read for anyone between the ages of 18 and 30.

https://www.canada.ca/en/financial-consumer-agency/services/financial-basics/financial-basics-presentation.html

#40 ifriend on 04.07.19 at 5:26 pm

Hi Garth,
Please do not stop educating us. The more people are well aware of other living styles the better for all of us.
I will share some information how this blog changed my life.
I’m a software consultant. I started reading this blog back in somewhere 2009(It was many years ago). I had a lot of debt back then and I knew nothing about investment at all. Because of this blog I have figured out what other life styles can be and since then I love my new style of my life a lot. No debt, but no more real estate, solid investment with a possibility to retire much earlier. Even better thing I have now is freedom. When I go to bed every night I have zero worries about tomorrow. I have 2 kids, and my oldest son is a big fan of this blog as well. The point is, somebody(in our case it’s Garth) provides more options/choices for you. Even if you can’t afford the other option/choice now, does not mean you can’t afford it later. We all live and learn every day. Garth is my teacher when it comes to a life styles and he does it for free. I think I would not be able to thank him enough, but no matter what I will be the biggest supporter of this blog.

#41 Habbit on 04.07.19 at 5:38 pm

I’m not in the 1% not even close. However we are better prepared than may in large part because of this great blog. Mercy Garth

#42 Retired in Kelowna on 04.07.19 at 5:42 pm

Thank you for all your hard work and advice Garth. It has worked very well for us for many years. My wife and I thank you.

#43 Bob on 04.07.19 at 5:43 pm

“The lesson we preach here maybe be pedantic and hectoring but, dammit, it’s correct. Recessions are forgettable interludes in the sweep of a lifetime. Don’t get bent out of shape, or ever think it’s different this time. It isn’t.The lesson we preach here maybe be pedantic and hectoring but, dammit, it’s correct. Recessions are forgettable interludes in the sweep of a lifetime. Don’t get bent out of shape, or ever think it’s different this time. It isn’t.”

Amen…Reverend Garth.

#44 AK on 04.07.19 at 5:49 pm

“A third of folks 60ish have zero retirement savings.”
=====================================

This is very sad.

#45 T-Rev on 04.07.19 at 5:50 pm

Aimed at the 1% my arse Gartho. Sure, you gotta have money to invest, but anyone in the top half of earners would if they’d stop blowing it on overpriced crap they don’t need, and that includes granite and stainless. This blog has probably done more for the financial literacy of the writhing Beaver masses than any other resource I can name, including the Spud (and that’s high praise). If it wasn’t for my coming here some 10+ (12+?) years ago, I’d put my kids’ RESPs in the hands of some overdressed self-important fund huckster skimming 2-3% a year on a trailing commission, and doubled down on my already over-weighted real estate holdings that I thought I was such a genius for having in boom-era Alberta. Not that this blog taught me HOW to do it; it certainly didn’t (That’s what the rest of the internet is for). But the details are less important than the strategy or from the philosophical answer to “how do I get ahead?”. This blogged piqued my interest enough I began googling things like “WTF is an ETF?” and “balanced portfolio” and “index investing” and “asset classes” and “management expense ratio”. Years later, still reading on a regular basis I’ve taught many friends who certainly aren’t 1%ers to google those same things and learn for themselves. And now I get a thrill out of posts on TFSAs vs RRSPs (and what RRSPs are really good for: Hint, it’s not retirement) vs non-registered accounts, and much of my googling now is in Sheets where I run various scenarios and tax optimization strategies. I’m still turgidly stimulated by bricks and mortar, but it’s a genetic condition of my being born Canadian and I’ve learned to control my hormones where it comes to money.

Anyway, hope that cheers you up old pal- Your blog is for the 70% who want to make it into the 50%, and for the 50% who want to be something besides mindless debt slaves. You’ve done a great public service with this work, saved this one lowly beaver from a life of financial ignorance, and hopefully had some fun and made a few shekels for yourself along the way.

#46 SoggyShorts on 04.07.19 at 5:55 pm

Balanced and diversified it great advice, and I’ve certainly benefited from it, but the best so far has been about how much you should pay on your investments.
1. not over 3% like a mutual fund.
2. not 2% like some advisors charge
3. somewhere around 1%
Well… that and “Ignore the noise”

I started investing in 2008, just a few grand from savings and a big tax return. So basically I only know bull markets.
I’m constantly a little on edge waiting for a crash that surely must come someday, but every time I think “oh man is this the start of a crash or a slow 10-year melt of my nest-egg?” I come here and Garth is saying “It’s nothing, all indications are that it’ll bounce back, and if it doesn’t happen right away, it will soon”
Greece, Brexit vote, 2015, Q4 last year- All of them sucked as an investor, but staying the course was the right move every time.

Thank you Garth.

#47 SilentPoet on 04.07.19 at 5:56 pm

I’m listening. Keep up the good work, Garth.

#48 will on 04.07.19 at 5:56 pm

must see! dog video:

https://www.youtube.com/watch?v=6zUc-mpMGrs

#49 crowdedelevatorfartz on 04.07.19 at 6:02 pm

Total agreement as to the financial illiteracy that runs rampant through all walks of life.
Uneducated or educated means nothing when people are too lazy, too stubborn or too angry to bother looking in the mirror to find out where all their money is going.

It took me turning 30 with zero in the bank and no assets to realize….Something had to change….

Choices vs priorities people.
Do you NEED that new phone, car, vacation or do you just WANT it?
Its up to you.
Always broke by the end of the pay period?
Figure it out.
Brown bag & thermos vs Tim’s coffee and Tim’s lunches….

Garth, Doug and Ryan are giving out free advice AND answering your questions on their own time….

Would you do the same year in and year out?

Don’t shoot the messenger because you either don’t like the message or are too stubborn and stupid to change your life for the better.

#50 Samantha on 04.07.19 at 6:03 pm

“Second, money illiteracy.”

This is the main problem, but financial institutions make lots of money because of the widespread financial illiteracy, so I don’t expect this to change anytime soon.

#51 Blue angel on 04.07.19 at 6:09 pm

this blog is a national treasure and it is free. a jewel. most of the time agree with mr.turner apart from the fact that he does not like gold too much as a part of a balanced portfolio. but to be balanced appropriately, up to a maximum of 5% invested in gold with an ETF like XGD, or MNT, a stock, the Royal Canadian Mint, can be part of any good portfolio …

#52 Wvanrenter on 04.07.19 at 6:09 pm

How to lose a cool mill in West Van ?

Bet you this failed flip wont make the mainstream press

Purchased: $3,300,000 in 2016
Sold (March): $2,185,000

https://www.rew.ca/insights/59011/1305-kings-avenue-west-vancouver-bc

#53 Long-Time Lurker on 04.07.19 at 6:11 pm

Thank you, Garth, for continuing your blog. I’ve learned a lot from you, your minions, and the commentators. The Greater Fool is like a sober pub. (Except for Smokey!)

#54 Two-thirds on 04.07.19 at 6:11 pm

Why come here if I am not a 1 percenter?

Because I want to get closer to that than to the middle class. Simple as that.

Learning from others, and from Garth’s practical advice, for free: what is wrong with that?

Sure, it is easier to be fatalistic or pass judgement on those who have more, but in the end, nobody owes me anything and I want my success to be my own.

Thank you Garth for giving those who aim to better themselves a place to learn and discuss, and for the dog pics as well!

#55 Shawn Allen on 04.07.19 at 6:16 pm

Arcane RRSP Math

#56 Remembrancer on 04.07.19 at 3:49 pm
#47 Shawn Allen on 04.07.19 at 11:45 am

This is not a very interesting discussion and I typically don’t engage with a “there are many who…” argument, but there is no hidden trick here as this is literally what RRSPs are advertised for – you contribute and defer taxes from the 48% bracket and withdraw and pay taxes at say the 24% bracket – no accounting hocus pocus, no trick…

So what is the point of this socratic exercise?

*************************************
Thank you to you and others who responded.

I believe RRSPs work FAR better than advertised.

My example yesterday was trying to show negative tax on the gain.

An RRSP does not need a lower tax bracket in retirement to work out very well. That is a pure myth.

If you contribute at a 40% marginal tax rate than the government will have funded 40% of your RRSP and you should think of it as 60% yours and 40% owned by the government as your equity partner.

Years later if the RRSP has doubled and you are in a 40% tax bracket, the government simply takes back its 40% equity share. Your 60% share grew effectively completely tax free.

That is the substance of the math.

But one does not need to really understand the math. Most Middle and all high income people can benefit from RRSP investing. If they invest in an RRSP and put it into a good portfolio, they will benefit even if they gripe about the supposed taxes – which in substance is mostly just the government taking back its original 40% or so share. If you are in a lower tax bracket in retirement the government takes back less than the percentage that it effectively contributed to your RRSP. That becomes negative tax on the gain in your share of the RRSP.

Unfortunately, this is simply not obvious.

The big mental mistake people are making is to consider their RRSP to be all theirs. In effect the government funded usually at least 30% of your RRSP and you need to think of it as more like 60 or 70% yours.

#56 the ryguy - In cabo on 04.07.19 at 6:16 pm

“Why you insist on a balanced portfolio and rent. Who can afford that? Should your advice not be for the millions in trouble rather than the few with balanced portfolios?”

Being financially literate is for EVERYONE. I would bet there are more than a few people that were heavily invested in RE and deleveraged themselves because of this blog. I know at least one person, my sister, that decided a couple years back to not buy a townhouse because I made her read & bookmark this site.

This year was the first time she contributed to her TFSA, guess what, she’s already up 3% and absolutely thrilled about it. Those financial decision making seeds were planted from big brother and this blog. If my sister knows what an ETF is then it’s safe to say this blog can help anyone.

Garth has said it so many times I bet he just uses cut and paste now..if you can afford it, buy a house, if you can’t, don’t. If the “millions” would have listened they wouldn’t be in trouble would they?

#57 Sold Out on 04.07.19 at 6:23 pm

I think we see a lot of negative commenters here who are offended by Garth’s views on DT, as well as his insistence that the PM be accorded a modicum of respect for his accomplishments. Political division and hyper-partisanship should not get in the way of one’s financial education, but too many people are willing to cut off their own noses to spite their faces. You don’t have to agree with our convivial host to benefit from the sound advice this blog offers. The political banter that pops up in the comments shouldn’t be taken seriously, but too many people have fallen into the us-and-them trap set for low-information voters of all stripes.

#58 KM on 04.07.19 at 6:26 pm

Garth,

Long time reader (2012?) first time posting. This blog has helped myself and family tremendously. From zero investing knowledge to fully maxed out TFSAs and RRSPs. The portfolios are set and continue to grow. Our culture of RE obsession has faded to one of renting and travelling. Our futures seem brighter than the average and for that we are blessed and grateful.

We originally started reading because of the RE property comparisons you used to do. It helped to change our view of what ‘normal’ is. Friends in our age group continue to drink the kool-aid and justify spending 1.6 mil on a 100yr old semi. This is our culture. I think your blog and advice has helped to shift that for many people.

Keep up the good work. Forever thankful.

#59 The Awakend One on 04.07.19 at 6:38 pm

Wait… that really looks like the Queen’s corgis !!

Your Majesty, what are you doing here in shorts, snappin’ your beloved beast a tummy rub pic??!

And sent it to Garth??!

#60 Penny Henny on 04.07.19 at 6:39 pm

Sure, some rich people come here, leave insufferable, entitled comments and pretend they’re geniuses. -GT

/////////

Hey Ace!! You made it to the comments!!!
You are in Smoking Man category now

#61 dakkie on 04.07.19 at 6:39 pm

Update on the Deepening Housing Bust in Vancouver, Canada
https://www.investmentwatchblog.com/update-on-the-deepening-housing-bust-in-vancouver-canada/

#62 I'm pretty shure on 04.07.19 at 6:39 pm

Garth has helped all the regular dawgs on here in one way or another over the years. Maybe just to brighten their day with his witty prose. But sounds like he really put’s up with a lot of crap to bring this to us. We thank you for that. It’s a beauty out here on the west coast today … pretty much full on flowering cherry tree season. Best to spend your time outside today out here.

#63 Parksville Prankster on 04.07.19 at 6:41 pm

… I just come here for the beers, babes, and biker talk…

#64 paracho on 04.07.19 at 6:43 pm

A well written retort to a pessimist .
I come here daily for many of the reasons you mentioned.
Keep up the good work !

#65 Short Commons on 04.07.19 at 6:45 pm

There was a time when the average people-per-house was about 5. Now I see single people and childless couples residing in 4 bedroom houses.

Instead of the attitude that everyone with a pulse deserves a single-family dwelling of their own, perhaps we should all be looking to do more with less.

This goes for all the other crap we buy. Cars, clothes, electronics, and so on.

I just watched the documentary “Minimalism”. It’s inspiring.

https://www.shortcommons.com/2019/04/minimalism-full-documentary.html

#66 Tccontrarian on 04.07.19 at 6:47 pm

I come here for a few reasons:
1. Funny pictures
2. Good information on various financial topics
3. Some interesting comments

I appreciate them all
TCC

#67 Balanced from Nanaimo on 04.07.19 at 6:48 pm

Thanks for posting my letter

So you honestly say not to worry about world debt? Or the epic levels Canadians have leveraged to buy houses and student debt.

I think the volume of letters today indicate you are doing a great public service for the regular folk.

And for the record I have learned as well.

Cheers!

#68 Fairmont emp on 04.07.19 at 6:48 pm

I came here and you helped a bunch, and when the portfolio gets bigger I’ll be ringing you up.

Thank you

#69 AGuyInVancouver on 04.07.19 at 6:52 pm

Who’s the blog for? I see the average RRSP contribution is $3,500 and the average TFSA contribution is $4,800. How about a post tailored to that kind of money?

Like AK #44 I find it sad (and scary) a third of Canadians in their sixties have no retirement savings!

#70 Sydneysider on 04.07.19 at 6:52 pm

#55 Shawn Allen

There are a few more twists and turns in the RRSP. People need to model these effects in a spreadsheet for their own situations.

(1) When the RRSP is converted to an RRIF, you can extract $2000 each year free of tax. For this reason alone, everybody should have about $40K minimum in an RRSP at age 65.

(2) All RRSP growth is taxed like income, whereas the tax rate for the same money in a taxable account is about half as great. (GT dealt with this the other day.)

(3) Unless you buy US-listed securities, your RRSP return from US dividends will be 15% lower than in a taxable account due to withholding tax than in a taxable account since you can’t claim a foreign tax credit.

#71 Hana on 04.07.19 at 6:54 pm

Discovered this blog in 2012 and haven’t missed a post since then. Best financial blog and only one I really trust for advice. Learned so much here about investing.
Please keep this blog Garth. Many of us are willing to learn. Thanks to you I have non-registered as well as tfsa and rrsp. All in etfs and balanced and diversified. Also thanks to Ryan an Doug.

#72 Keen Reader on 04.07.19 at 6:59 pm

This blog (and your books) is definitely for me, having made a huge difference in my finances. I love the info, the advice, the wit, and even enjoy some of the comments! Every person I know, from fresh grads to CEOs, would benefit from it. Thanks a million or two!!

#73 Vision on 04.07.19 at 7:02 pm

I love your blogs for the excellent advice given here in a well written ,clever and humorous way. I totally enjoy reading these daily. ( I must confess, Saturdays blogs tend to have good advice, but more dry, and I don’t always read them) Yours, I never miss.
I thank you very much for taking the time to write them.
I am sure most people here appreciate them.
Please continue, as I value this blog immensely.

#74 Loonie Doctor on 04.07.19 at 7:03 pm

The internet is peppered with plenty of personal finance blogs that talk about being happy with living beneath your means. This blog does try to talk about keeping perspective. An important principle regardless of income and we are ALL wealthy in Canada if you compare us to most of the world.

Many blogs focus on ways to “coupon clip”, expend effort to get more credit card points, a few fractions of percent more on a HISA etc. This blog is different. It has much better advice about what to do with the saved money to grow it for the future. Big picture. The absence of clicky ads for all of those products also sets this blog apart and speaks to its mission. Thanks.

We lived with very little money when we were starting out and literally counted and pinched every penny. We were still happy and free, but one of the best things about being wealthy is not having to do that anymore. It would have sucked if we did not get off on the right financial foot and then were stuck on the hedonistic treadmill for the rest of our lives. I am also glad we did that while young. I still put on my pants one leg at a time, but now I sit down to do it without falling over.
-LD

#75 mountain guy on 04.07.19 at 7:08 pm

Thank you Garth for your commitment to offering words of wisdom 6 days a week for years and years. This blog has helped me get back on track after some pretty colossal financial screw ups (divorce, …) all too near retirement.
It has also helped my partner gain a good perspective about long-term investment in Canada. Profoundly different than her country of origin where corruption and cycles of rampant hyperinflation destroyed any investments, bank savings, etc. Everything wiped out except Real Estate. Several times in her lifetime. It is different here with good government, rule of law, regulated banking, etc. It was hard for her to believe that until reading this blog. Thank you.

#76 SmarterSquirrel on 04.07.19 at 7:09 pm

Garth,

I’ve got a request for you to cover a topic, Alternative Minimum Tax.

Last year I didn’t work having lost a job and considered early retirement. But I made a fair amount in dividend income and capital gains. A bonus from the company I worked for the year before came in. And I had some minimal EI. Now as I’m filing my taxes thinking life was grand, the rude awakening of the Alternative Minimum Tax hit me.

It’s too late for my 2018 taxes but I plan to learn strategies to calibrate income to avoid getting hit with Alt Min Tax in 2019. I’ve never seen your blog discuss AMT and I’m guessing others would benefit from hearing your thoughts on it and how to avoid getting hit by it.

Thanks for your blog.

#77 Dolce Vita on 04.07.19 at 7:11 pm

YES, but were yours and Rowat’s stats Seasonally Adjusted?

#78 the ryguy - In cabo on 04.07.19 at 7:13 pm

#57 Sold Out on 04.07.19 at 6:23 pm
——————————————
Convivial (of a person) cheerful and friendly; jovial.
“she was relaxed and convivial”

Learned a new word, I thought it was a typo, thanks!

#79 Michael Caligiuri on 04.07.19 at 7:40 pm

Garth, I have been reading everything you have been putting out since the days of your Rrsp books. I am comfortably retired because I took heed of what you were saying. I am by no means rich. I am comfortable, thanks to your teachings. So what I say to all young people today is learn from this blog. The teachings are free and valuable. You will be thankful you did take heed decades from now; when you retire comfortably. Thanks Garth

#80 Dolce Vita on 04.07.19 at 7:44 pm

THIS Blog is a 750 word Twitter post with brains, humour and a well healed readership that, on occasion, mutiny’s with either its author or among themselves.

Mutiny of the Bountiful.

Repulse of the Nation.

Garth, never stop being you or unsinkable. You are loved by far too many to do so.

———————————————-

Buonanotte d’Italia.

#81 Retired on a Gulf Island on 04.07.19 at 7:46 pm

Thanks for the blog Garth.

I have read your blog faithfully for about 7 years now, since I retired, and I have learned way more about investing from you than I have from my investment advisor, to whom I have paid more than $200,000 over that same period.

I have approximately $4 million invested in the market in a variety of RRSPs, TFSAs and non registered accounts on behalf of myself, my wife and my two adult children.

With the knowledge I have learned in large part from reading your blog, I had the confidence to last year move 3/4 of my portfolio to self administered accounts that cost almost nothing to maintain. My infrequent trades there cost me less than [email protected] and most of my self administered investments are in ETFs with annual fees of about 0.2% or less.

I still paid about $18,000 to my advisor for fees in 2018 in connection with the remaining $1,000,000 under his administration, but I hope to reduce that further.

Thanks again – your advice is worth a lot more than I had to pay for it.

#82 Just turned 18 yay!! on 04.07.19 at 7:47 pm

Hi peeps, just turned 18 other day. I have 4400 in my rrsp and putting 5k into my tfsa next week. My grandpa sat me down and told me to invest it ASAP, he says 4 stocks with the 4400 & another 4 with the 5500, financial, utilities, pipelines and high growth. Any recommendations? He also told me to read Garth’s blog like the bible. Thx
Jenny

#83 Sask to AB on 04.07.19 at 7:51 pm

Garth, as many have stated, you are a NATIONAL treasure!! We appreciate the blog so much…..

F56AB

#84 Tony on 04.07.19 at 7:53 pm

To whomever this guy is investing used to be investing back before 1993 but things have drastically changed since then. Today everything is a niche ponzi inside of one gigantic ponzi. All the rules of past economics mean nothing. This is why investing is now gambling.

#85 not 1st on 04.07.19 at 7:57 pm

Garths biggest lesson on this blog is the one that’s missed the most and that’s when he highlights people who have their lives cut short suddenly.

That immediately makes me think of people sitting in too much house in too expensive of an area spending it all to keep up a image, or the other group saving every dime as time passes on them. Neither are a solution.

#86 Tony on 04.07.19 at 7:58 pm

Re: #82 Just turned 18 yay!! on 04.07.19 at 7:47 pm

Avoid financial stocks and insurance stocks like the plague beginning in June 2020.

#87 Marie on 04.07.19 at 8:02 pm

Your advice has worked very well for me. Thanks for taking the time to write your blog day after day.

#88 The Real Mark on 04.07.19 at 8:05 pm

The fact is Canadians have been losing nominal value in their property investments since the peak of real estate values in late 2013.

I write here, often, as a service to all my fellow Canadians whom are now awakening to the very real challenge of deflation in our economy.

I know mostly everything. So while I do appreciate your insight, Garth, I believe you could learn and benefit from my vast experience in all things related to finance. But more specifically, how someone can amass many thousands from their parents basement before they hit 40. I did it, and now I’m on to tens of thousands by 50.

Garth, feel free to reach out if you ever want an outside source to take on posts once a week.

Love your blog.

#89 Shawn Allen on 04.07.19 at 8:11 pm

RRSP… Advantage and Supposed Disadvantage

#70 Sydneysider on 04.07.19 at 6:52 pm
#55 Shawn Allen

There are a few more twists and turns in the RRSP. People need to model these effects in a spreadsheet for their own situations.

(1) When the RRSP is converted to an RRIF, you can extract $2000 each year free of tax. For this reason alone, everybody should have about $40K minimum in an RRSP at age 65.

(2) All RRSP growth is taxed like income, whereas the tax rate for the same money in a taxable account is about half as great. (GT dealt with this the other day.)

(3) Unless you buy US-listed securities, your RRSP return from US dividends will be 15% lower than in a taxable account due to withholding tax than in a taxable account since you can’t claim a foreign tax credit.

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

Thank you.
1 The pension income tax credit is a good point.

2. I disagree with that. Here’s why. The error is in assuming the same money in both the RRSP and the taxable account. Given the refund you can afford to put up to about double in the RRSP with same dollars out of your own pocket. Imagine a high income earner in a 50% tax bracket. He has $5k to invest. Option 1 Invest the $5k plus another short-term borrowed $5k in RRSP for total $10k. Use $5k refund to repay loan Now you have $10 k in RRSP but it cost you only net $5k of your own money.

Option 2, Put $5k in taxable account.

If both are invested in the same assets, both will double or quadruple in exactly the same time. The RRSP will always be double in size on the taxable account assuming that any tax on the margin account was paid from outside the account. After considering any tax paid along the way the taxable account is less than half the size of the RRSP account.

If the tax on RRSP withdrawals are at 50% the owner gets back half the RRSP. But that will be equal to the taxable account before any tax on the taxable account.

If the margin account faces any tax whatsoever on growth (and it will) it trails the RRSP approach.

Do you follow?

3) As I think you are saying the 15% U.S. witholding tax does not apply to RRPSs in most cases. It is not withheld.

In summary, yes you are quite right $10k in a taxable account beats $10k in an RRSP account. But if you have $10k to invest you can get $20k in the RRSP considering the refund and a 50% tax rate. $20k in an RRSP will beat that $10k in a taxable account in any realistic scenario. Similar logic applies for marginal tax rates down to about 30%, below that and you might face a higher marginal tax rate in retirement so RRSP not the best route.

#90 yorkville renter on 04.07.19 at 8:11 pm

Is Tony #84 the same as Tony #86? The two posts seem at odds.

#82 – my advice? dont listen to anonymous people on the internet (I see the irony, that I am one). Think about a time frame for the $$$ then decide. If you’re 18, you have LOTS of time so dont worry too much – consistently save, time is on your side

#91 JS on 04.07.19 at 8:23 pm

You mention the “cult” of teal estate. And what a cult it is! Most certainly life in Canada is structured around having a principle residence. Once you have that all of the pieces of the puzzle seem to magically fall into place! You borrow money to get a mortgage, pay off some of the loan, prices edge up and voila you somehow have equity that you can take out and invest over and then repeat the process and by the time you know it. You are a self made millionaire! People have no problem with this scheme! Pretty straightforward, right? All other investments seem complicated and somehow shady as if inaccessible to the average Joe! Go figure! Why is the German rate of ownership that low (less than 50%)? Are they somehow dumber? No, it’s entirely the way society hD been made to look upon the class of real estate as “safe haven”. Very favourable treatment of RE equals CULT!

#92 T Nascou on 04.07.19 at 8:25 pm

After a couple years of following this blog I finally did a search to find out what [email protected] means: “The nice Lady at the bank.”
Mr Turner, perhaps you could post a list of all the common acronyms you use in your posts? I would sound so much smarter when I talk finances with my BIL.
Thanks

#93 Robert Ash on 04.07.19 at 8:26 pm

I really enjoy the Dog pics, and the comments, and links.. but I also recognize how important this Blog is for many people, since our Lives, and financial challenges, are more difficult than ever.
Given the Stats of Financial health for many in Canada, this type of Financial discourse is more important than at any time in the past. I can see you are helping many folks, with improving their lives.. That is powerful, important and I hope personally rewarding.

#94 Chris on 04.07.19 at 8:32 pm

Please keep writing this blog, Garth! I’ve learned a lot from you over the past few years, and I’ve taught my adult children the basic principles you keep hammering away on. Much appreciated! Thanks.

#95 Chopping Broccoli on 04.07.19 at 8:44 pm

This blog rocks !!!
I’ve been following for about 5 years, I’ve learned so much and thank you for all your free advice !!! I’m personally in a way better financial place now then I was before !!!

#96 SoggyShorts on 04.07.19 at 8:45 pm

#82 Just turned 18 yay!! on 04.07.19 at 7:47 pm
Hi peeps, just turned 18 other day. I have 4400 in my rrsp and putting 5k into my tfsa next week. My grandpa sat me down and told me to invest it ASAP, he says 4 stocks with the 4400 & another 4 with the 5500, financial, utilities, pipelines and high growth. Any recommendations? He also told me to read Garth’s blog like the bible. Thx
Jenny

*************************************
Honestly, Jenny, until you hit over 50K, invested just open a Questrade self-directed account and buy VGRO.TO
Simple simple

Don’t try and pick 8 stocks, even while still in your teens having one crap out on you would be upsetting. VGRO balances you across 7 ETFs each of which holds hundreds of stocks.

Your biggest advantage is TIME, no need to be a cowgirl.

#97 Kent on 04.07.19 at 8:45 pm

Love this article and all the others. Ignore the noise from those who read your on point, free advice and then have the audacity to criticize you. You speak the truth, aim to help, and strive to make a difference. I have learned so much from this blog. So, (because you likely don’t hear it enough) Thank You!

#98 FromVanwithLove on 04.07.19 at 8:51 pm

Dear Garth,
Thank you for all your efforts and time devoted to educate the public.
I for one was following the same pattern my parents did and bought a house back in 2010 with my spouse. One day she started telling me about “this blog that talks about real state”. I first ignored, two year later I started to read, and in 2016 we decided to sell, invest the proceedings following the premises described here, and rent. And we still do.
Thank you kindly

#99 Mikeshouse on 04.07.19 at 8:52 pm

Your writing yesterday about the differences between un registered and registered accounts was a real eye opener for my financially illiterate self now 60 years.Thank You Garth.

#100 Dolce Vita on 04.07.19 at 8:57 pm

Off topic.

News to me in the last hour or so that:

Trudeau wants to sue Scheer for libel over the SNC-Lavalin scandal.

HOLE. DIG DEEPER.

Justin is that unique gift that just keeps on giving.

Of course, the Twitter reaction is swift and decisive, as usual (people always talk tough on the Internet), with Tweets that begin as follows:

@JustinTrudeau #FakeFeminist #SueMeTooYouCrook

+ [insert derisive text here and/or childish GIFs or animations].

Say what you will about Justin, he sure has spruced up your usual boring, as watching paint dry, Canadian Politics. He’ll be missed after October…NOT (and I’m a Liberal, nobody’s perfect).

#101 Erock on 04.07.19 at 9:03 pm

Thank you for your perspective. I’ve learned a lot through this blog over the past few years.

#102 William R Drury on 04.07.19 at 9:16 pm

Your comments today are true and unlike some other articles I have disagreed with, what you said was needed. Personal responsibility is key and unfortunately the prevailing attitude does not instil common sense financial realism and ownership of choices. Presently everyone wants the government to do everything for them not realising where the loss of personal freedoms will lead.

#103 Al on 04.07.19 at 9:19 pm

Garth. Been a ready for I don’t know 11 or 12 years or so.

I like your witty writing. You are dunny and no one can match. You are not boring.

So keep it up

#104 Matt on 04.07.19 at 9:21 pm

Garth taught me the value of independence. We bought near the bottom of the RE market and sold near the top. Took our money and ran. It’s changed our outlook. It really is a counterintuitive way at looking at wealth and life especially prior to trying this philosophy out as lived experience. Minimizing taxation and maximizing cash flow goes a long way to providing stability and future prosperity. It’s nice to have banks pay me rather than the other way around. It’s great having some money work for us rather than the other way around. By renting we have more money at the end of the year….a lot more. Sometimes I can’t even make the math work to explain it all. Know that maintenance, insurance, taxation, interest, all add up in intangible yet (over long periods) significant figures. A house at this point in time for people in our situation is not an asset, it’s a ball and chain. If I need to buy a car tomorrow I can, with a loan from myself. Interest free and on terms of repayment tailored to my personal needs. Think of the poor guy with the massive mortgage who either can only stomach a punishing 84 month loan or dip into a LOC. Think of the madness of the LOC for a moment–you are being treated no better than a dude off the street by the bank–re-borrowing funds that you took great time and effort to pay off ONCE before but with no appreciable benefit of having paid it off the first time. In essence, unlike my situation, you take your own money out at the bank’s interest and on their terms as a just another loan. Who wants to go through life like that, particularly with nothing but debt serfdom staring back at them for decades to come? This is a blog for the shrinking middle class—a radical call to looking at how wealth is defined means and how it can be attained in an age gone mad with chasing inflated housing prices. As Garth saud, never go with the herd. As George Carlin said “never underestimate the power of stupid people in large crowds”. That is all the inflated Canadian R/E cargo cult is and why this blog has helped folks like me. Thanks again.

#105 Dolce Vita on 04.07.19 at 9:25 pm

PS on:

Trudeau wants to sue Scheer for libel over the SNC-Lavalin scandal.

Looking for a bad dog pic on this (GIF animation)?

Here it is, Jack’s Proletariat Twitter in all its splendor:

https://twitter.com/MattGre39376314/status/1115057161170706432

Those on Twitter, go to*:

#suemetooyoucrook

for some of the worst GIFs and animations on the Internet (and scathing remarks about our PM). Poor Justin. He really cannot win for losing.

——————————————————

*The hashtag started by former Harper lawyer and Retired Righty insurrectionist at large @manny_ottawa.

#106 Jon on 04.07.19 at 9:27 pm

Like many others, this blog is for me.

About two years ago I wanted to to get into investing. Garth, your blog gave the the advice needed to do just that. Now I have a maxed out TFSA, RRSP and a non-registered account(not maxed out, yet). Filled em up with the good stuff. All at an age where I should be able to see it double a few times before retirement.

Thank you Mr. Turner!

#107 Calgary Gen X Moister on 04.07.19 at 9:28 pm

What you do here, Garth, is nothing short of altruism. I graduated high school the same year as Dead Poets Society came out and the message was crystal clear: Carpe Diem.

30 years later and enough liberal arts degrees to send Jordan Peterson into a homicidal rage, I’ve finally got a good salary and thanks to you, a realistic plan for retirement.

I discovered you about a year and a half when I was about to put an offer on a condo in downtown Calgary. Thanks to you I didn’t. I read you everyday and follow your advice to a T.

You’ve turned my life around. Hope that doesn’t sound too weird but it’s true. This is info. I couldn’t get anywhere else. Disregard at your own peril. This blog does more to ensure the well-being of Canadians than ever government has.

Thank you for your service.

#108 Scruffy on 04.07.19 at 9:35 pm

Thank you Garth for your words of wisdom, chiseled abs and sage advice. Been a follower for many years. Required reading nightly before bed, no matter where I am on this planet. I’ve shared your views with many friends to help them live within their means and raise their financial acumen. Thanks for all you do. It’s life changing for many people. The amount of financial illiteracy I come across is staggering. I wish more people would focus on this part of their lives and take responsibility for their life decisions.

#109 45north on 04.07.19 at 9:37 pm

The point here is to help those who want it.

I think it’s a little more than that. Let’s go back to that night on the open prairie:

Hours later I was relieved the rental car lady in the Regina airport had shoved me into a bruising Ford instead of some metrosexual urban candyass eco-box like a Prius. Because here I was last night, hurtling through the prairie blackness, as the wind and snow gathered force against the hulking grille, trying to find Weyburn.

http://www.greaterfool.ca/2010/11/17/no-rescue/

You went there to tell people something they didn’t know. Something you thought they should know.

There’s a lot of players in the housing market. Real estate agents, banks, CMHC, governments. Billions of dollars. Yet nobody tells people what they should know. Now and then, the truth slips out but not too often. It’s April, 2019, and it looks like the housing market is in for serious trouble. Recession. I say recession because we’ve no idea how serious it’s going to be. People’s life savings wiped out. At a minimum, lots of people suffer serious financial reversal. So the question becomes:
Who said anything? Why didn’t the government do something?

Garth did do something. All he could. Day after day. No charge.

#110 Demetan on 04.07.19 at 9:42 pm

Hi there,
Managed to have full TFSAs, each RRSPs, one spousal RRSP and a well garnished non reg account.
We earned barely 100 000$ this year for the first time between the 2 of us, raised a child and own a full paid house (we are not from Toronto or Vancouver).
So this blog is for us and everyone who wants to get ahead.

#111 B Don on 04.07.19 at 9:51 pm

Was brought to Greaterfool via “After the Crash”. Was 24. Learned a lot from this blog then and continue to learn today. I aspired to catch up to the topics discussed, never felt they were elitist. Solid education and motivation.

Thanks for all the free advice.

#112 Bytor the Snow Dog on 04.07.19 at 9:56 pm

I don’t come here for the financial advice. I come here for the acerbic wit, the biting social commentary, and the Steerage Section.

Keep up the good work.

#113 tf on 04.07.19 at 10:00 pm

Information, information, information; and the dog photos!
It’s hard to get personal advice and I think you do a good job in communicating to us in a way that’s understandable.
I have learned so much since I started following your blog many years ago and I don’t understand why people get angry at you for writing. If I don’t like what I read, why don’t I just stop reading?
Thanks for your ongoing humour and continued financial posts.

#114 Sydneysider on 04.07.19 at 10:02 pm

#89 Shawn Allen on 04.07.19 at 8:11 pm

RRSP… Advantage and Supposed Disadvantage

#70 Sydneysider on 04.07.19 at 6:52 pm
#55 Shawn Allen

There are a few more twists and turns in the RRSP. People need to model these effects in a spreadsheet for their own situations.

(1) When the RRSP is converted to an RRIF, you can extract $2000 each year free of tax. For this reason alone, everybody should have about $40K minimum in an RRSP at age 65.

(2) All RRSP growth is taxed like income, whereas the tax rate for the same money in a taxable account is about half as great. (GT dealt with this the other day.)

(3) Unless you buy US-listed securities, your RRSP return from US dividends will be 15% lower than in a taxable account due to withholding tax than in a taxable account since you can’t claim a foreign tax credit.

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

Thank you.
1 The pension income tax credit is a good point.

2. I disagree with that…Do you follow?

Thanks. Your logic is correct (and does not depend on tax or growth rates) if the tax rebate is deposited into the RRSP. I did not look at the more likely case (due to contribution room limits) of depositing it elsewhere.

3) As I think you are saying the 15% U.S. witholding tax does not apply to RRPSs in most cases.

As far as I know, the US does withhold tax from ETFs that are listed on non-US exchanges, even for RRSP accounts.

https://www.moneysense.ca/save/investing/is-it-worth-it-to-buy-etfs-on-an-american-exchange/

#115 Randy Michelcomb on 04.07.19 at 10:09 pm

Are those who are saying they have no money left over at the end of the month the same ones I saw 20 deep at the Tim Horton’s Drive thru today idling their vehicles with the New Carbon Tax in all its glory, draining their bank accounts that much further?

#116 raisemyrent on 04.07.19 at 10:11 pm

Garth! Don’t get discouraged! You have your regulars. It’s like product reviews, most people don’t bother and mostly it’s the people that want to whinge that go on spouting off. But everyone is still consuming the product.

#117 n1tro on 04.07.19 at 10:12 pm

Here’s a related property that will be on the market soon. Forced sell by the courts. Read the article first and I will tell you the insider story below.

https://nationalpost.com/news/accountant-buys-6-million-in-apple-iphones-and-ipads-on-company-credit-cards-and-nobody-notices-for-five-years

^ Funny right? I use to work for PointClickCare during this time. While I was busy adding $50M in recurring revenue over 3 years for the company which probably triggered the thoughts of IPOing thus requiring external audit of the books, the accounting manager was selling $6M of Apple product on Kijiji. Guess it’s all my fault at being so damn good at operations or the scam could have gone on longer. :)

#118 OffshoreObserver on 04.07.19 at 10:18 pm

Kudos, Garth

And thank you for your service.

Avid reader since 2008.

GT follower since early 1990s. (I actually saw you in the Hotel Vancouver lobby once and, I think, Michael Wilson.)

I am anticipating your contributions to the subject of expatriation.

Live in Southeast Asia with 32 year old GF. I bought her a house and live rent-free.

She has now opened a restaurant and real estate sales office. She operates the house as a “Homestay.”

3 dogs, no kids; she wants; I don’t.

(No common law in Vietnam.)

Keep up the excellent pro bono work.

[Idea: claim the maximum allowable charitable deduction for “donating” your blog work. Value it by posting a form with which people say how much they would pay you for an annual subscription.]

BTW, I met with accountants to assess my business and personal situation in March, 2016. The initial consultation is “free,” of course.

They quoted me $100,000 to set up an unarticulated scheme to create and operate new businesses.

My wholly-owned holdco owns my non-reg’d $4.5M portfolio, including the land assessed at $600K

Registered = $106K

I laughed and set-up a US non-profit corporation. So far all my expenses are business-related.

Still have land in B.C.’s Interior. It’s zoned residential and has room for 26 lots. [They are being absorbed albeit, slowly. Last price was $91K

I am doing an experiment here in Vietnam with growing microgreens in a shipping container and using another one suitable for living. Solar panels on both roofs.

I plan on using the Vietnam model to transpose B.C. – side, once proven.

Stick-built house around $300K, ex-land.

https://www.youtube.com/results?search_query=tiny+house

#119 Ponnaps on 04.07.19 at 10:22 pm

Informative
Engaging
Educational
Free

This blog is for me.

#120 Russ on 04.07.19 at 10:27 pm

T Nascou on 04.07.19 at 8:25 pm

After a couple years of following this blog I finally did a search to find out what [email protected] means: “The nice Lady at the bank.”
Mr Turner, perhaps you could post a list of all the common acronyms you use in your posts? I would sound so much smarter when I talk finances with my BIL.
Thanks
===========================

Hey Nassy,

Try this link courtesy of Derek. A little outdated but still a gem… kinda like the host himself :)

https://docs.google.com/document/pub?id=1EVlDhkf7qkUsihOM5HdNfECc6sahkF2iOn7G8vXqiL4

#121 not 1st on 04.07.19 at 10:33 pm

A trip to Weyburn Sk in the middle of a prairie blizzard is a teachable moment about carbon taxation.

There are hundreds of thousand of people that have to navigate the distance and the harshness of this country to put food on the table and when an out of touch elitist juvenile govt punishes them twice (carbon tax and blocking resource projects), you can easily see why people get their hackles up.

#122 Lillooet, BC on 04.07.19 at 10:39 pm

The diversified portfolio strategy is aimed for low risk investing, in exchange of low gain.

None of the billionaires became one with diversified portfolio, it would require multiple lifetime.

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

but since when this blog has taken a mission to create a few billionaires?

#123 45north on 04.07.19 at 10:52 pm

Wolf Richter: Update on the Deepening Housing Bust in Vancouver, Canada

https://www.howestreet.com/2019/04/07/update-on-the-deepening-housing-bust-in-vancouver-canada/

look at Steve Saretsky’s chart: City of Vancouver Detached House Sales in March

This is collapse. Which will hit the British Columbia economy. And its people.

#124 The Most Interesting West Coast Conspiracy Theorist in the World on 04.07.19 at 10:57 pm

This blog is for financial strategy and wealth generation ideas.

Which is at major risk due to the real estate insanity in Canada.

The series on money laundering and its impacts on Canada is one of the biggest stories of our time.

There are still dirty money flows happening in BC, but we have turned a corner.

#125 Blutterfy on 04.07.19 at 11:07 pm

As a Millennials who by happen-chance found this blog, have been rescued from buying overpriced RE, now knows what a tfsa, rrsp, and non registered accounts are; what a balanced portfolio is (I literally thought it was a file folder with just the right amount of paper in it to fit the staple as to not fall out everywhere before this blog – laugh at me if you want – I think it shows how uneducated financially my generation is). Our house now has a budget, is almost finished paying off dumb debt (high interest and student loans), we are now 2-3 paycheques away from catastrophe instead of 1 (counting the baby steps), and actually have a financial plan and some savings rather than just blowing our extra cash when we got it.

Didn’t learn anything from parents excepts that overdraft is bad and grandparents might bail you out if you need it, and might as well spend all your money now since you’ll probably get cancer and die before retirement (rip grandpa).

So a deepest heartfelt thank you Garth (and Doug and Ryan) for actually caring about financial education for those who want it.

#126 GrandSport on 04.07.19 at 11:09 pm

This blog is for those who understand life’s most valuable assets: time and relationships.
This blog is for those wish for balance in life.
This blog is those those willing to work hard to become successful having learned here the true definition of success and happiness.
This blog is for those who want to change their future by preparing for it.
This blog is not anti-house, it is anti-one asset strategy.
This blog is has humor, whit and intellect.
This blog is consistent, dependable and available.
This blog is an inspiriation and a light.
If that sounds good, this blog is for you.

It is not for the 1% or the elite. Its principles are simple, scaleable and applicable. Everyone has a means, by knowing it you can live below it. Do that for a long time. It requires choices. It can be done in the GTA, it can be done on 1 average income, it can be done supporting a family. Your choices will look different than those around you. That’s okay. Your kids will be happy, they will learn what is trulely important in life. When money is not the center of everthing, you will have more of it to give, spend and save. There will be no debts and there will be true freedom.

This blog changed our family. Forever thankful.

#127 Mattl on 04.07.19 at 11:11 pm

What people need to realize is Garth posts everyday.
It’s pretty incredible and the peaheads need to understand the underlying themes; balance, buy what you can afford, multi asset strategy. He will never be right every day on these topics. But the underlying message is rock solid. Balance, patience, risk management.

Personally, this blog has been a god send. Literally changed my financial life and I’m grateful.
And plan on repaying my debt when I get to a mil to invest.

#128 Adam on 04.07.19 at 11:20 pm

Daily reader.

Garth’s blog has been a lifesaver. I was a typical spendthrift millennial.

Now have my financial house in order, live well with in our means, invest diligently and sensibly. I am a new Dad.

This place has helped us build for our future and may well be the most valuable education I’ve ever received. My family thanks you.

#129 A Sho on 04.07.19 at 11:30 pm

Thank you Garth for the invaluable learning that school for some reason does not provide. I wanted to let you know that I actively read but never post. As you alluded to in past posts, I am certain there are many passive thankful readers. Thank you again. You provided me the confidence I needed to start investing.

#130 Bob Dog on 04.07.19 at 11:39 pm

This European documentary was enlightening. Bankers will end civilization.

Well worth 42 mins of your life

Why the rich get richer – crazy low interest rates for eternity

https://youtu.be/t6m49vNjEGs

#131 Old Dog New Tricks on 04.07.19 at 11:44 pm

Garth does a fine job writing this blog daily. It takes effort to be consistent with something like this. The fact he does it for free is amazing. I read daily and I too have learned a lot over the years. Thank you Garth – much appreciated.

#132 Lead Paint on 04.07.19 at 11:53 pm

I found this blog about a decade ago. I was self-employed and bowing to societal pressure to by a condo. This blog convinced me otherwise.

I’m now a multimillionaire and still rent. Thank you Garth.

#133 Moses71 on 04.08.19 at 12:01 am

Thank you Garth for speaking about investment vehicles which may benefit those of us who are single and wish to make it easier and less costly to pass onto offspring and others.
Not sure how much of the population are in my shoes but it is necessary info for the rest of us with assets

#134 John Carino on 04.08.19 at 12:16 am

I have never been on this blog but I am tired of hearing the comments that there are higher interest rates. Interest rates are pitiful and very low. I have been saving money, working in Canada and lived in Canada coming from the Philippines since the early mid 1960’s and never have seen such low, disgustingly low rates.

However, credit cards, lines of credit personal loans, car loans etc. are not that low 4.5% to 6.5% what i have seen.

Canada is at almost the bottom with interest rates and don’t tell me about low inflation, gas, food, property taxes, rents, housing prices, water, utility, electricity, insurance rates etc. are all high.

Back home in the Philippines, I have found there around 5% to 6% ban deposit rates. Many other countries are in the 4% to 9% rates.

1% or 1.75% for a savings account, 2.5% to 3.2% for a GIC at 5 years. People don’t want to admit it but they got snookered.

You are now paying a house with 30 years of interest in advance. A $800,000 to $1.2 million house in Vancouver, Toronto. I remember mortgage rates at 7% and a house costing $30,000 to $50,000. The fact is everyone got ripped off.

What happened to Canadians since I have lived here over 45 years. Amazing!

#135 Tony Scotts on 04.08.19 at 12:24 am

There are not higher interest rates today. Just back in 2000, 7% to 8% mortgages. Now, at 2.5% to 3.5% mortgages and $1,000,000 homes you guys got ripped off.

Pay all that interest upfront guys.

#136 AACI Homedog on 04.08.19 at 12:28 am

Re: world debt…indeed all countries seem to be in debt. Who is the big creditor ? We owe China billions, but China is also in debt. Is the World Bank in debt ? Just asking…

#137 Lost...but not leased on 04.08.19 at 12:42 am

#25 Remembrancer

Do some homework….the “too big to fail” banks etc. got a “bandaid” bailout….the can was simply kicked down the road…the toxic mess still lingers and compounds.

#138 Danny Sutton on 04.08.19 at 12:49 am

My 61 year old cousin took all his RRSP, $1.5 million and converted it to a 30 year term certain annuity with 3 insurance companies through a broker.

He also gets another $8,100 a month from early C.P.P. just retired 2 months ago. He gets $78,000 a year in annual income from these 3 insurance companies annuities. It does not look that bad but in 30 years he will have no principal either. I guess he is tired of getting 2% to 2.75% on GIC’s over the years.

#139 AACI Homedog on 04.08.19 at 1:14 am

# 106 jon
You can’t max out a non registered account.
Duh…

#140 Rob on 04.08.19 at 1:15 am

Thanks, Garth!

#141 Smoking Man on 04.08.19 at 1:15 am

Ya’ll getting ready.

https://www.coasttocoastam.com/article/watch-flying-saucer-filmed-over-lake-tahoe/

#142 Dolce Vita on 04.08.19 at 1:36 am

You know Garth, on days like today and from afar when I read what’s going on in Ottawa and the brutalization of our PM (no one deserves to be savaged as he has been today by the Right) I raise my Caffè Corretto to you and this Blog for the sanity, common sense, great advice and good nature you provide us all on a daily basis (and the steerage section where I can, on occasion, rabble-rouse and incite sedition).

Grazie Garth for temperance from the vagaries that as you say, come and go and in the end, not much changes and better to have stayed the course.

Buona Mattina d’Italia.

#143 dickrickulous on 04.08.19 at 2:39 am

Tributes to the great bearded one for your efforts to educate the unwashed masses of Horton swilling Canadians. I have been a fan forever. Haven’t made much money but thanks to you I know why I’m broke.
Bless you big guy.

#144 Reality is stark on 04.08.19 at 2:39 am

Most people are broke due to divorce.
You want to be wealthy, don’t get married or have children.
Work 7 days a week.
It’s not rocket science.

#145 F55F on 04.08.19 at 4:16 am

I tend to only leave comments when I feel you’re down. You do a great job educating those who visit your blog and for free. I’m a financial advisor myself (10 years) and got referred to this blog by a financial advisor. Read your blog every day and agree with most of your investment philosophy. Educate my clients about market volatility and they rarely panic. In fact they call to invest more when the market takes a beating. I do believe in active portfolio managers vs ETFs but there is no reason to not have both in your portfolio. We can agree to disagree and you make a valid point to hold ETFs vs Mutual Funds.
I’m a millenial, rent and do not own. Make a low 6 figure income and have about 5K/month to spare. I’ll probably end up buying a house outright once the prices become reasonable.
I come to this blog for market/political updates and your witty banter. Please do not let the negative comments discourage you in any way whatsoever – let the delete button do the work.

And I am a dog lover like yourself.

Keep up the great blog!

#146 LP on 04.08.19 at 5:22 am

#62 I’m pretty shure on 04.07.19 at 6:39 pm

It’s a beauty out here on the west coast today … pretty much full on flowering cherry tree season. Best to spend your time outside today out here.
*********************************

I’ll see your flowering cherry trees and raise you: 2 ospreys returned to a nest from last year; 1 ground hog; several hundred robins (and counting); 1 red winged blackbird; and a bunch of wussy pillows (my then 4-year old son’s name for them) at the grocery store yesterday.

When you live in a challenging region like Ontario, you learn to seek out signs of spring where you can. They might not be as flashy as cherry blossoms but they’re reliable and just as welcome.

F71ON

#147 Captain Uppa on 04.08.19 at 6:41 am

Wow, a lot of butt smooching going on. I will only say this; your blog is adequate.

>>No collapse, but a correction is inevitable, and will hurt the overly-leveraged. – Garth>>

My “rich” neighbour is like this. He has so many properties on the go and he still thinks he will get peak 2017 prices.

Anyways, I have a question:

Upon sale of my home, I will be removing equity and only putting 20% on the new one. I want to keep that equity for 12-18 months in a safe place as my wife will be on maternity leave. Should I just keep it as cash or is there a safe investing vehicle that isn’t as brain dead as a GIC (which I can’t also peck at if I needed to)?

#148 expat on 04.08.19 at 7:04 am

IMHO this blog is for everyone. At some point in one’s life they will have a small amount of extra money. Maybe throughout their work life they have a few more “extra Dollar moments”

Then they change jobs or get raise and they have a little more money. All the while their Balanced investment strategy has returned a decent percentage

Then they get married and now they 2 incomes and some more extra money.

Its how most of us became wealthy unlike today where everyone is a real estate genius…..

My father always said. It’s easy to make a million in your life if you save your money.

Its really f’in hard to keep it.

#149 James on 04.08.19 at 7:15 am

Just another note of thanks to Garth and his team for this blog, their thoughts & writings everyday.
I also enjoyed your books too, Garth. Thanks.

#150 thebarold on 04.08.19 at 7:41 am

Internet comments are like votes. They most certainly do not reflect the majority of the population. For those who complained, maybe they need to evaluate what they choose to spend their money on instead of saving or investing it. I’m sure in almost every household budget there is inefficient or wasted spend. (Again I’m talking about the majority of households here, not the few who truly don’t have enough to make ends meet).

#151 Tater on 04.08.19 at 8:03 am

#18 Mean Gene on 04.07.19 at 4:22 pm

Hypergamy also plays a role in the household financial mess.
—————————————————————-
Theory: Any guy who references hypergamy, is 2 of the following 3: ugly, fat, broke.

#152 Remembrancer on 04.08.19 at 8:16 am

#147 Captain Uppa on 04.08.19 at 6:41 am
Upon sale of my home, I will be removing equity and only putting 20% on the new one. I want to keep that equity for 12-18 months in a safe place as my wife will be on maternity leave. Should I just keep it as cash or is there a safe investing vehicle that isn’t as brain dead as a GIC (which I can’t also peck at if I needed to)?
——————————–
The irony of keep it in cash or calling a GIC braindead in comparision I’ll leave on the table…

Why not break it in tranches? Put some aside in easy to reach cash for emergencies, but not enough that you’ll do something foolish – say a % of your wife’s take home for the period she’s off? You don’t mention what happens in 12-18 months (presumably mom goes back to work but how is that impacting your investment window if you have take home covered?), but maybe stage the timing of something brain dead into 1 month, 3 month etc if you’re talking a lot of cash from the sale and have a specific plan at the end of mat leave or start now and spread between long term and short term investments – after topping up TFSAs of course…

Again, you’re missing a few variables and YMMV but you don’t have to make it an either / or proposition…

#153 Steven Rowlandson on 04.08.19 at 8:18 am

“Household debt is off the charts and still rising since the majority of Canadians are borrowing from the future and living beyond their means.

But stop to think. Why is that?

One reason is real estate. That’s why it’s so often a topic here. Canadians have adopted a one-asset investment/financial/retirement strategy laden with risk. They leverage themselves incredibly to buy what they cannot really afford. They fall for the cult of ownership, when renting might be a far better option. People think paying off a mortgage is the Holy Grail even when that means retiring without enough cash flow to live on. It’s an obsession. Housing is a drug. And many people should never own any. A property correction – destined to come – will be an ugly event for countless families who put all their eggs in a single basket.”

Having hearth and home, wife and children by virtue of the real estate and job market plus some social engineering has made life in Canada a luxury that no working man can afford. That has got to change.

#154 crowdedelevatorfartz on 04.08.19 at 8:22 am

The YVR Real estate meltdown Part Three

Got call from a friend of mine last night who rents a house in YVR.
The hot water tank is leaking and what should he do?
“Is it electric or a Natural Gas tank?”
“Gas”
“Call your landlord and tell him to get a plumber or you’ll get a plumber.”
“I did, he’s sending a friend over tomorrow am”
“A friend who’s a plumber?”
“No, he cant afford a plumber…..”

Apparently the “landlord” mortgages three houses side by side all on the same block. He bought all three in 2017 and planned on flipping them to a condo developer who has built a multi unit complex across the street…

The condo complex that has been completed for 6 months.
3 units out of 20 have been sold….

Its going to be a long, hot, summer when speculators and developers finally realize…..no one is buying….

Flame on!

#155 Remembrancer on 04.08.19 at 8:24 am

#150 thebarold on 04.08.19 at 7:41 am
Internet comments are like votes. They most certainly do not reflect the majority of the population.
—————————————–
Except votes literally reflect the majority of the population, that voted. Didn’t vote, then it is like most internet comments – uninformed pseudo-intellectual opining about something someone takes no responsibility for or did nothing to create themselves.

#156 crowdedelevatorfartz on 04.08.19 at 8:28 am

@#147 Uppa Uppa Uppa
“Upon sale of my home, I will be removing equity and only putting 20% on the new one. I want to keep that equity for 12-18 months in a safe place as my wife will be on maternity leave. Should I just keep it as cash or is there a safe investing vehicle that isn’t as brain dead as a GIC (which I can’t also peck at if I needed to)?”

+++++
Speaking of brain dead.
You should just let it sit in cash or gold bullion so you can stare at it, roll around in it, rearrange it, toss it in the air while screaming “Uppa, Uppa, Uppa!”
OR give it all to your wife now as it will be cheaper in the long run……

#157 crowdedelevatorfartz on 04.08.19 at 8:35 am

@#84 YAY!
“Hi peeps, just turned 18 other day. I have 4400 in my rrsp and putting 5k into my tfsa next week. My grandpa sat me down and told me to invest it ASAP, he says 4 stocks with the 4400 & another 4 with the 5500, financial, utilities, pipelines and high growth. Any recommendations?”

++++

You’re 18 and are investing already?
Is your grandpa’s last name Buffet?
Keep doing what you’re doing.

#158 cropgrower on 04.08.19 at 8:41 am

Reading your blog has been a morning ritual for 10 plus years I would say. Why? I find your writing style humorous. Do I follow your financial advise? Not really, but do pass on some of your information to my kids to check out. I’m semi- retired and comfortable financially, and will continue to enjoy your blog for it’s entertainment value. Keep your sense of humour……it’s a gift.

#159 Captain Uppa on 04.08.19 at 8:43 am

“Brain dead” I believe is a term Garth has used.

Remembrancer has a good point. I’ll top up my 60/40 TFSA and hold some cash for emergency.

Also, what type of person farts in a crowded elevator?

#160 Rick Danger on 04.08.19 at 9:11 am

Hi Garth;

Just wanted to say thank you. The last 10 years (post divorce) I’ve saved and stashed and put my self first (after my kids) and managed to max a TFSA, build my RRSP, and this year finally took the plunge and started a non-reg with balanced ETFs and stocks. All this and I still have some left tucked in a HISA for a rainy day (and bike parts).

If a guy making a modest salary, paying child support (still) with a motorcycle addiction can do it – anyone can. I’m probably 12-15 years from ‘retirement’ but for the first time can see light at the end of the tunnel.

The advice here that’s continually hammered to us daily is a gift. A free gift. The hardest part? Starting.

My only regret is not taking Mr. Turner’s advice earlier.

Rick

#161 unbalanced on 04.08.19 at 9:14 am

Captain Uppa… With your kind of attitude, you seem to know it all. Why bother? adequate Enough said

#162 Simon on 04.08.19 at 9:46 am

Garth,

Your main purpose here is to raise financial literacy and it works. I’ve been reading your blog for some years and used many of the strategies I’ve learned here, though not all as I don’t yet have the means to max out my RRSP and TFSA. It is still a goal, however.

You’ve also helped many of those around me as I passed on some posts pertinent to their situation, and they were grateful as well.

My wife and I are also teaching our 12 and 10 year old sons about budgeting and soon about investing.

So thanks and keep it up, your contribution to financial literacy is appreciated.

Cheers,

Simon

#163 Nosferatu on 04.08.19 at 9:51 am

Money illiteracy – BANG ON. That is the single biggest reason why so many of us are in such sad shape. I was a super student straight As writing out triple derivative equations on quantum physics when I was 18 and went to an Ivy league school for grads – but did not comprehend the implications of compounding, taxes, investing, and all the stuff you talk about until 2 years or so ago – at the age of about 45. And that is only because I sought out this info proactively in books and on sites like this. The school system is appallingly deficient in teaching kids about practical matters. I am assuredly no idiot – but I have been a financial illiterate for most of my productive earning years, and would not have been so if the school system or my immediate environment (who were schooled similarly) had taught me better. Thank you for this blog it is really as indispensable for me every morning as much my espressos – I could not imagine starting my day without it.

#164 Captain Uppa on 04.08.19 at 9:59 am

>>#161 unbalanced on 04.08.19 at 9:14 am
Captain Uppa… With your kind of attitude, you seem to know it all. Why bother? adequate Enough said>>

Oh it was a joke. Too many sticks up people’s rear around here.

#165 Chris Jardine on 04.08.19 at 10:06 am

It’s a sad day when you have to write a post justifying what you write on your own blog.

#166 Investwise on 04.08.19 at 10:07 am

Why do I write this blog you ask.
So I get up in the morning to look forward to some humour and insight.
Please keep on blogging!!

#167 maxx on 04.08.19 at 10:09 am

@ #16

Absolutely the way it works in the early days….and beyond.

The magic begins when it becomes a habit, you simply ignore it and let father time take over.

Then one day, near to or at retirement age, you reap a fabulous harvest of possibilities.

#168 Kyle on 04.08.19 at 10:21 am

GARTH!!! Long time reader, never commented. I am not a 1%er but am working hard to keep a balanced life. I live by the biblical truth of: Give some, Save some, Spend some. You have really helped me keep cool and level headed on the “Save\Invest some”. You keep things in perspective for me so I don’t make any rash decisions. Please keep writing! Plus it is very entertaining and it fits my budget!

#169 KLNR on 04.08.19 at 10:25 am

@#144 Reality is stark on 04.08.19 at 2:39 am
You want to be wealthy, don’t get married or have children.
Work 7 days a week.
It’s not rocket science.
____________________

now there’s a recipe for a potentially miserable life.

#170 unbalanced on 04.08.19 at 10:26 am

To the Captain….apology accepted. CHEERS!!!!!

#171 Figure it Out on 04.08.19 at 10:27 am

“[…] $1.5 million and converted it to a 30 year term certain annuity with 3 insurance companies through a broker.

He gets $78,000 a year in annual income from these 3 insurance companies annuities. I guess he is tired of getting 2% to 2.75% on GIC’s over the years.”

$1.5mm invested at 2.99% gets you $78k/year for 30 years, with $0 at the end of it. If you die early, pfffft. If you die late, pfffft.

$1.5mm in Bell Canada common gets you $79,650/year, with a 4% annual cost of living adjustment, forever. But the insurance broker doesn’t get that trip to Antigua.

not intended as investment advice diversification is the only free lunch consult your registered advisor past returns not indicative of future results your mileage may vary not to be taken internally be the cowboy

#172 maxx on 04.08.19 at 10:28 am

This rag-tag bunch of blog dawgs is a kaleidoscopic mixed bag of traits, quirks and assorted weirdness.

You do more good than you may know Garth, but as with so many educators, you just can’t predict when the lights will go on. But they do.

Thousands upon thousands will be better off because of your blog. They wade through their investment phobias and lack of financial acumen to absorb the good that you put out every day.

The rest love the humour and perspective. Rare forum.

#173 dharma bum on 04.08.19 at 10:43 am

It is unfortunate that the people who most need help in any given area, are the ones most likely to summarily dismiss the advice they are given with respect to whatever problem they are seeking to resolve.

I have often heard family doctors (what they used to call “general practitioners”) tell me that their most hopeless patients are the ones that come crying to them about how crappy they feel, lamenting the ailments they are suffering from, and want the doc to “fix it”.

When told that there is a solution to their problems, but it involves patient participation in the form of:

Quitting smoking,
Quitting boozing,
Quitting junk food,
Exercising,
Eating healthy foods,
Eating less,
Making positive lifestyle changes,

…the patients don’t want to hear it. They don’t want to expend any effort whatsoever or take any responsibility for the rectification of their ills. They just want to complain and blame others.

So it is, I find, with those that are financially ill.
They complain that they have no money. They complain that they lose money when they invest. They complain that they can’t save a penny. They whine, bitch, and moan.

But they do not listen.

They dismiss the advice of those that would help them help themselves.

Sustaining good health and fitness requires discipline.
So too does achieving, sustaining, and improving good financial health.

I read the commentators (fellow blog dogs) that love to criticize and disparage Garth’s advice, or dismiss it outright as having ulterior motives or being ineffective, or being for the “elites”.

Nonsense.
Those people are ultimately weak in the sense that they lack the discipline and patience and mental fortitude required to stick it out for the long haul.
Sooner or later they invariably cave in to the temptation of purchasing things that they cannot really afford.

The overpriced house or condo.
The new overpriced inappropriate car.
The luxurious vacation.
The new toy – whatever form that may take.

Instead of sticking to a long term disciplined structured saving and investment plan, they just go for the immediate gratification, and inevitably fall further and further behind.
These people just don’t listen.
In their minds, “everybody else” is getting ahead, and they somehow can’t make it.

Like my old dad used to say: You can lead a horse to water, but you can’t make it drink.

This is the best financial blog on the internet.
No hidden agenda.
No bogus ads.
Just good, sound advice.
And a solid dose of wry humour.
Not to mention, a lot of pretty wild and fun to read comments.
If people can’t see that, no wonder they have problems.

People really need to take the road less travelled if they want to get ahead, financially, and otherwise.

https://www.goodreads.com/book/show/347852.The_Road_Less_Traveled

#174 Eks dee Siple on 04.08.19 at 10:56 am

Garth, the fact that you let your blog hobby affect you on a personal emotional level just proves that you pour your heart and soul into this every day. Thanks for that. It’s inspiring still. – XD

#175 mike from mtl on 04.08.19 at 11:03 am

#114 Sydneysider on 04.07.19 at 10:02 pm

….As far as I know, the US does withhold tax from ETFs that are listed on non-US exchanges, even for RRSP accounts.
///////////////////////////////////////////////////////////////////

Not in my experience, VOO (in RSP) paid me last month the full 1.445 $US per sh.

#176 PoorEngineer on 04.08.19 at 11:31 am

The comments section often pisses me off.

My wife is a RN working in the hospital and I’m a computer engineer working in a tech company. We both went to UofT. While the mortgage (and little left on OSAP) is our only debt, we don’t have much left to invest. We invest the child benefit into diversified RESP index funds for both kids (both under 5), so they will have money for school. We are early 30s. We drive beater cars. We live 1 hr away from downtown TO. Wife works part time now as our kids are still small, and it’s way cheaper than day care. We use the grandparents for the days we both work. We do go on vacation once per year as our jobs are stressful, but that is our sole unnecessary expense. We don’t use our HELOC. Wife never buys anything; super savvy.

I’m often pissed off by people stating “early 30s, don’t own property but have 1.5 mil invested in a diversified portfolio.” Like how the hell can you come into so much money so early into your career? It has to be inheritance….

We’ve bought our house 6 months after we finished school and recently I’ve calculated what our networth would have been if we didn’t buy our house, but instead rented an apartment and invested into a diversified portfolio. Buying the house was the much better scenario, even more so realizing the gains are tax-free.

In two years we need to renew our mortgage. I’m wondering if it’s smart to remortgage for 30 yrs (monthly mortgage would therefore equal the rent of a much much smaller house) and have money left over which we can start investing. I’m also hoping my wife to return to work full time.

So my problem is: we are both properly educated, yet we live almost paycheck to paycheck. I don’t get these 30s yrs old millionaires that posted here a few days ago when Garth asked us if we’re ready.

Yes Garth, I know how I need to invest. But I don’t have anything left over. If I would sell and rent, rent would be almost as much as the mortgage, and it’s not worth the trouble as we love our place and it’s in an amazing location. Unfortunately, our parents are not rich as they came to Canada when they were middle aged and with no funds, so we won’t have any inheritances; actually we are taking care of them as they are aging (main reason for keeping the house; that and wife’s feel of security). If we would rent, we would probably save $1,000 per month ( property taxes + mortgage difference; house is new and doesn’t require maintenance, and I’m also pretty handy).

So yeah, I don’t believe any of these people who are 30s and have a boat load of money already. Either they had huge inheritances, or parents paid for their schooling, or live/d at home for free all their lives, or all of the above. The ones like us (that went to school, had kids, paid for everything ourselves, pay taxes – as we don’t work for cash like some of my friends), are struggling since we have to pay the 40% who are either lazy or good at hiding money. I honestly don’t see a future for us in Canada. We would earn more in US and pay little or no taxes. Also, housing is a fraction of the cost there. It’s really difficult to (honestly) accumulate wealth in Canada. And with the government becoming more and more socialist/communist, I think it will get even worse…

And Garth, I’m not alone in my thinking. More and more of my educated friends / coworkers / acquaintances are thinking the same; some have already moved down south. Which makes me wonder who will be left in this country, other than the lazy and the 1%-ers; who will be left to pay taxes? You know it’s messed up when a drywaller or a painter makes significantly more than an engineer… ohh, and they also work a lot on cash… Canada is not a country for the honest individual.

#177 Brett in Calgary on 04.08.19 at 11:52 am

This blog is sanity. I am not in the 1% (not a by a lot) but I read this blog everyday to remind myself I am not alone. Chances are if you’re also reading this blog you’ve had to endure family/friends/colleagues living the Canadian dream and looking down on you for not “housing”. Looking strictly at the numbers (which most Canadians struggle to do) can only lead to one conclusion. If you buy a house it must be for reasons besides “it is a good investment”. The other great debate is freedom v.s. stuff – I prefer freedom.

#178 Captain Uppa on 04.08.19 at 12:00 pm

>>#176 PoorEngineer on 04.08.19 at 11:31 am>>

Apart from the Canada bashing, I applaud you for revealing the truth. I think A LOT of people are in that position.

#179 Sunshine on 04.08.19 at 12:05 pm

Hi Charles,
Just wondering if you would consider doing a post on what happens when people with debt pass away. Given that it is so prevalent (death and debt) – who is on the hook for the money owed? The kids? The surviving partner? The banks? No one? Having been an executor for my parents – who had been life-long savers and diligent about all things financial – I’m curious about how an executor would manage a financial mess. Thanks – you are my daily dose of common sense and humour.

#180 CB on 04.08.19 at 12:23 pm

I’m sitting on $300k of liquid assets, built from nothing only over the past seven years. On an annual income of $80k.

Please don’t be dissuaded by the trolls who choose not to heed your advice by making the necessary sacrifices to achieve financial freedom. I continue to learn from your daily posts, and will impart such knowledge on my children, so they too may live a financially sound and prudent life.

Thanks for your continued advice and guidance.

#181 Remembrancer on 04.08.19 at 12:54 pm

#176 PoorEngineer on 04.08.19 at 11:31 am

I’m often pissed off by people stating “early 30s, don’t own property but have 1.5 mil invested in a diversified portfolio.” Like how the hell can you come into so much money so early into your career? It has to be inheritance….
———————————————————-
Why? Need aura fluffing?

First off its the internet bro, not every dating site profile that claims to be a bikini model is an actual bikini model and not every 30-something with $1.5M diversified ETF portfolio and no debt on a finance blog comments page is an actual 30-something with a $1.5M diversified ETF portfolio and no debt.

Second, lets recap, within, what, <10 years of graduating from a respected Ontario school you've managed to land 2 good gigs, qualified for a house 6 mo after grad (and bought, so stable shelter, check) (which puts you way ahead in RE then most of us mooks here) and were comfortable income-wise enough to have multiple kids. Elder care is a reality and not easy, but they got you here so kinda owed… I hope they weren't the ones who made you think you were entitled to new cars though, beaters get the job done too…

You didn't say what the vacation is but there's whole range between beers and candle light in the backyard with tunes, tenting in Algonquin to scuba diving in Bali – happiness (should at least) comes down to living within your means and not worrying so much about what others are doing or convincing yourself you "deserve" something… Or the other side of the coin, choices were made, build on what you have, make new choices, not be envious of other's stories…

Finally, sure, move if you can land better gigs with a better quality of life, but look before you leap – you might want to research more that "pay no taxes" in the US trope, depending on the jurisdiction it may be hidden in layers and layers of taxes too. This 40% of Canadians tax thing is getting twisted too – first that's income tax – sure there's some cheats but most are b/c THEY AREN"T MAKING THE MINIMUM INCOME TO BE TAXED… The dry wallers aren't just buying groceries or ATVs tax free and the money they were paid with was likely taxed (not an excuse, but its not like the drywaller making cash only hires drywallers who get paid in cash for everything they buy either).

P.S. there's no rule that says a great trades person deserves to or will actually always makes less than an engineer or a nurse for that matter – so reset your thermostat buddy and concentrate on what you can control / influence…

#182 not 1st on 04.08.19 at 12:54 pm

More of your progressive Liberal govt at work. $12m funding to a another corrupt corporation.

https://twitter.com/ec_minister/status/1115238106976931841

#183 Blog Dog Steve on 04.08.19 at 12:56 pm

12 years ago I became severely ill. Enough that I couldn’t work anymore. My income was slashed. Same bills. A pile of debt to boot. I faced the wall and at that point had to sink or swim. I decided the latter and rolled up my sleeves.

3 years ago my debt dragon was slayed. It took hard work and hundreds of little choices that in total added up to big things. It wasn’t easy. I didn’t take the trips every year that everyone around me was taking. I drove and still drive an old, but reliable vehicle. I didn’t believe that there was any such thing as good or bad debt. Any debt results in interest and all interest was giving money away for something today.

Over time, living simply and within my means put me on the side of the fence where “You get things done by doing and not complaining.” Garth, your blog has changed my life. It is a daily read and I rarely wade into the comment section. Sometimes you have to speak up when people complain about something, instead of doing something about it.

#184 Remembrancer on 04.08.19 at 1:09 pm

#179 Sunshine on 04.08.19 at 12:05 pm
Just wondering if you would consider doing a post on what happens when people with debt pass away. Given that it is so prevalent (death and debt) – who is on the hook for the money owed?
———————————————
Short answer is the estate, which may indeed be bankrupt. Longer answer, an amateur executor (oldest daughter, son-in-law, old buddy Bill from the golf club etc) needs to walk, don’t run, to nearest exit and gracefully evacuate from the estate if liabilities exceed assets. This is a matter for a professional trustee.

Gets more complicated if there is a surviving partner as well ie joint assets? co-signed loans etc etc…

This is one of those things, like brain surgery, which are best not DIY, but left to professionals…

#185 Shawn Allen on 04.08.19 at 1:12 pm

Interesting Witholdoing Tax Fact

#114 Sydneysider on 04.07.19 at 10:02 pm

….As far as I know, the US does withhold tax from ETFs that are listed on non-US exchanges, even for RRSP accounts.

**********************************
To my surprise from your link it looks like it is U.S. ETFs traded in Toronto that get hit with the withholding tax.

“If you hold U.S. or international stocks using a Canadian-listed ETF, these withholding taxes are lost in an RRSP. However, U.S. securities held in an RRSP are exempt from withholding taxes, thanks to a tax treaty between the two countries. So if you use U.S.-listed ETFs for your foreign equities in an RRSP you may be able to reduce or eliminate this tax drag.”

**********************************
So the link is saying use the U.S. listed ETFs directly rather than the Canadian listed ETFs that hold U.S. stocks.

#186 Shawn Allen on 04.08.19 at 1:16 pm

SydneySider is right

#114 Sydneysider on 04.07.19 at 10:02 pm

….As far as I know, the US does withhold tax from ETFs that are listed on non-US exchanges, even for RRSP accounts.

************************
Sorry, I read that wrong, as you are saying it is the Canadian listed U.S. ETFs that get hit. That is a good point and probably not at all well known.

#187 Garth for Prime Minister! on 04.08.19 at 1:16 pm

Garth, if you were prime minister in a majority government, what key economic and fiscal reforms would you pursue in order to help Canada, and whay do you think these critical measures would work?

#188 Damifino on 04.08.19 at 1:27 pm

#187 Garth for Prime Minister!

Garth is a thousand times more useful to Canadians in his current occupation.

#189 Sam on 04.08.19 at 1:29 pm

This country has dramatically changed. It is much more to create wealth

My parents landed immigrants, raised 5 kids. Dad was a janitor , mother cleaned houses during the day .We never felt poor , had plenty . All could afford University.

Raise 5 kids today? It’s no wonder mental disease runs amok

#190 Shawn Allen on 04.08.19 at 1:30 pm

RRSP agreement

SydneySider at 114:

2. I disagree with that…Do you follow?

Thanks. Your logic is correct (and does not depend on tax or growth rates) if the tax rebate is deposited into the RRSP. I did not look at the more likely case (due to contribution room limits) of depositing it elsewhere.

***********************
Thank you. I appreciate that you were willing to follow my logic.

You are right my analysis assumes that the refund is considered to sort of subsidize the RRSP. It is looking at net after tax dollars in and net after tax dollars out.

$1000 deposited into an RRSP simply costs us a lot less net out of pocket than $1000 into a taxable account and that fact should be taken into account.

#191 T Nascou on 04.08.19 at 1:31 pm

#120 Russ on 04.07.19 at 10:27 pm
T Nascou on 04.07.19 at 8:25 pm

After a couple years of following this blog I finally did a search to find out what [email protected] means: “The nice Lady at the bank.”
Mr Turner, perhaps you could post a list of all the common acronyms you use in your posts? I would sound so much smarter when I talk finances with my BIL.
Thanks
===========================

Hey Nassy,

Try this link courtesy of Derek. A little outdated but still a gem… kinda like the host himself :)

https://docs.google.com/document/pub?id=1EVlDhkf7qkUsihOM5HdNfECc6sahkF2iOn7G8vXqiL4

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

Thanks Russ.
Just what I was looking for.

#192 Ms. Fool on 04.08.19 at 1:31 pm

My income doesn’t allow me to save a cent, but I’m working hard to change it in the short term. So, Friday post was highly appreciated.

#193 Eks dee Siple on 04.08.19 at 1:32 pm

#176 Poor Engineer: “Canada is not a country for the honest individual.” You sound a little heavily burdened and down today, allow me to help if I can:

Step one is realizing there is a problem. So far so good.

Step two: admitting that you and your wife are wage slaves, no matter how much you earn, you will never be free of your slavery, until that moment comes, when you allow yourself to see the brutal honest truth: your employment income depends on someone else buying something from someone else. Why would you put your life in jeopardy like that? Because you have been lied to… And then think that you can “afford” a house, when really, you cannot. You need to be that party selling that something to someone else. Get it? The alternative is to work for the government. But that is a destination for the already dead, and you don’t really want to go there.

Step three: Add value to the world, the whole world, not just your evil employer. You are here on this blog, so that’s a good start. Invest in yourself, not just in your kids’ RESPs. Sell that dead weight you call your house. Now is the perfect time. It is not an asset. Extract that value out of it. And take that wealth and put into a real asset, something that spits out money for you and your family. Take big risks because YOLO.

Step four: Hash out your master plan, read more than just fake news (I created that meme), grind it out, FAIL a lot, then fail again, and again, for it is the best teacher. Lose money, lose friends, prepare to lose everything. Don’t just become a slumlord like Leo Trollstoy and hate on poor people while boasting of a 70K gain on a condo. Keep your wage slave job as long as you need to, but don’t plan on being there for the rest of your youth. If that is your plan, you have already failed.

Step five: Just when you think you have lost it all, … then bam! it all works out. Because you have poured all of your heart and soul into it (like Garth), and the universe or whatever you believe in, rewards you for your passion with real profit. And REAL happiness.

And stop using your parents for babysitting (unless you gift them a surprise vacation to Cuba). I’m sure they didn’t come to this country all those years ago, just so they could one day end up supporting yet another generation. Come on, man.

#194 SoggyShorts on 04.08.19 at 1:50 pm

#185 Shawn Allen on 04.08.19 at 1:12 pm

That’s why My RRSP is all USD and holds VIG and VOO not XUU and VGG

#195 NoName on 04.08.19 at 1:58 pm

#176 PoorEngineer on 04.08.19 at 11:31 am

Interesting points you make but you are missing an obvious, if you are.so strongly convinced that down south is a way better aks you self why you are not leaving, what is holding you here.

If its a money that you are after make a spred sheet and just do cost benefit analysis, it wont take a long to realize that grandparents are worh between 700-1500 a month, and ohip anothern 700-1500, probability more because deductible is per person. (Ya we pay for ohip thru payroll taxes)

I have neighbor that works just over the border, similar line of work to yours, comutes he would drop dead before he would move over. Hes situation is somewhat similar to yours minus a grand parents pais for babysitting.

I know, worked and met quite of few forign born people from all continents, ill tell you many got complesant, complaints all the time this i bad that not good, many .of them brought old peple placed them on welfare to babysit kids, i wont go in a to many deetails.

When i tell them just pack up and live if is so bad and horrible here conversation get very heated from that point. Yes there is lots of room for improvement in canada but i can guarantee many times canada beats those greener pastures by mile.

As for growing a net wort with house or woithnout remember one thing, every one makes money in raising market, we bought our house in 05 with 5% down and i can tell you we bought it on a peak, houses (plural) on a same street went for for sale over next few yers for lot less money that we paid for ours, and as a icing on a cake GFC came… When you live thu few of those years you get bit better perspective. At a sme time many of my friends in us watched tjeir house sheds 35-40% of what they paid for, and just as of recently those that managed to keep theirs are at slight gain at this poit, 10 yrs later. Let that sink in.

Off you go for greener pastures, and in a few yrs report to us how it worked out.

#196 islandgirl on 04.08.19 at 1:58 pm

This blog is for me! Yes, we’re one of the many that does not have enough for retirement, and did buy a house with a lot of leverage, but this blog also helped us ensure that we did not over leverage ourselves and that we treated a house as it should be, a shelter, not an investment. Yes, we should be putting more money away, but on the flip side, we are setting money aside for RESP’s so that our kids can have a start without us having to leverage even more debt to help them, and we have taught them that a house is not the goal in life.

#197 Remembrancer on 04.08.19 at 2:09 pm

#192 Ms. Fool on 04.08.19 at 1:31 pm
My income doesn’t allow me to save a cent, but I’m working hard to change it in the short term. So, Friday post was highly appreciated.
———————————
Good. Next step is to reorient to “my spending doesn’t allow me to save a cent” – otherwise you run the risk that you’ll be in the same boat, only making and spending more…

#198 not 1st on 04.08.19 at 2:10 pm

#193 Eks dee Siple on 04.08.19 at 1:32 pm

—-

The guy has young kids and a wife and you want him to roll the dice on his future. That’s a pretty tall order.

Best advice though is ditch TO.

#199 MF on 04.08.19 at 2:16 pm

176 PoorEngineer on 04.08.19

Wow.

Just wow.

Do we have to remind this guy who went to U of T that not everything you read on the internet is true? Or that the grass is not always greener?

Mistake: buying a house/going in debt 6 months after school ended.

There’s your problem.

Also, have fun in the US. It’s a country of extremes. Extreme wealth and extreme poverty. Extreme business cycles too. Ask the Americans how they did in 2008 while you are there.

MF

#200 SoggyShorts on 04.08.19 at 2:20 pm

#176 PoorEngineer on 04.08.19 at 11:31 am

I’m often pissed off by people stating “early 30s, don’t own property but have 1.5 mil invested in a diversified portfolio.” Like how the hell can you come into so much money so early into your career? It has to be inheritance….
You know it’s messed up when a drywaller or a painter makes significantly more than an engineer
*******************************

1. $36/h is not much of a stretch for a skilled tradesmen(in AB anyways I pay my subs $40)
2. Trades work a lot of overtime
3. 10h days works out to $400/day
4. That’s 100K/year
5. Pay yourself 50K in dividends to live on (45 take home)
6. Leave 50K in the company to invest(45K after tax)
7. TFSA 5K plus that 45K is 50K invested per year.
8. Yes, 40K after tax is enough to live on outside LM/TO without kids.
9. 50K invested per year = about 1m in the past decade.
10. Add in a spouse who earns half as much as you and poof, 1.5m in your early 30s.

#201 Ron Derosier on 04.08.19 at 2:20 pm

The blog comment from the person from the Philippines makes alot of common sense most people don’t have these days or are not expressing it.

Inflation at even 2% these days but I don’t see how low it really is that way with taxes, cost of living going up and up and up, it is relentless.

Anyway taking into account even 2% inflation a year, it should mean a minimum 3.5% to 4.5% GIC rate. They got almost everyone addicted to high debt levels and convinced Canadians, Americans etc. that it is normal. Sorry to say but the really did a number on all of us.

#202 Polecat on 04.08.19 at 2:53 pm

I thoroughly enjoy your reflections and musings on investing, the economy and politics.

I was originally skeptical about an investment fellow writing about investing who would not have a self-serving view. After reading a week’s posts, it becomes clear you are promoting an approach (along with sound, basic advice) that people can challenge, take or leave.

I, among many here leaving comments, hope you keep pen to paper and continue doing what you are doing

#203 crowdedelevatorfartz on 04.08.19 at 3:03 pm

@#159 Capt Uppa
“what type of person farts in a crowded elevator?”
++++

A person who doesnt want to listen to idle conversation from strangers…..

#204 MaxtheTax on 04.08.19 at 3:05 pm

Unreal writing talent Garth!

If you ever retire, you could take up teaching writing skills at a local University just for fun

#205 TurnerNation on 04.08.19 at 3:10 pm

Unreal in Toronto Kanadian Kommunists protest the rich. A structured and approved event vs. A ramshackle homeless encampment.

We should all be poor.

https://www.blogto.com/eat_drink/2019/04/hundreds-people-showed-protest-dome-dining-under-gardiner/

#206 thebarold on 04.08.19 at 3:15 pm

Remembrancer on 04.08.19 at 8:24 am

—————————————–
Except votes literally reflect the majority of the population, that voted. Didn’t vote, then it is like most internet comments – uninformed pseudo-intellectual opining about something someone takes no responsibility for or did nothing to create themselves.

Agree with your point re: people who do not vote/comment – imagine how much more insufferable these comments would be if everyone commented “I agree with the foregoing.”

Perhaps I chose my words poorly. (Votes >> Elections) rarely reflect the majority. Ontario recently saw that with 40% of the votes resulting in 60% of the seats going to one party. Proportional representation would go some ways to fixing that (and open some new problems) From 1940 to 2016, in only 5 elections (out of 24) did the resulting government win 50% or higher of the popular vote. Four of them were from 1940 to 1958.
So I concede and adjust my comment – the outcome of elections rarely reflect the majority and internet comments that are made do not reflect the views of the majority.

#207 Overheardyou on 04.08.19 at 4:05 pm

I discovered this blog in late 2017, when I was house horny. You have saved me from quite possibly making the worst financial decision of my life. Since then I have filled my TFSA and built a basket of ETFs. Just wanted to say, thank you Mr. Garth. Your advice is invaluable.

#208 Penny Henny on 04.08.19 at 4:21 pm

#193 Eks dee Siple on 04.08.19 at 1:32 pm

And stop using your parents for babysitting (unless you gift them a surprise vacation to Cuba). I’m sure they didn’t come to this country all those years ago, just so they could one day end up supporting yet another generation. Come on, man.
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Some people love their Grandkids and others would rather love their gin n tonic.

#209 Remembrancer on 04.08.19 at 4:29 pm

#205 TurnerNation on 04.08.19 at 3:10 pm
Unreal in Toronto Kanadian Kommunists protest the rich. A structured and approved event vs. A ramshackle homeless encampment.

We should all be poor.

https://www.blogto.com/eat_drink/2019/04/hundreds-people-showed-protest-dome-dining-under-gardiner/
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The protesting masses simply add to the iconic urban experience – maybe the diners were Hunger Games cosplayers?

Seriously though, Dinner-with-a-View of the underside of a 6-lane elevated highway is as much a marketing triumph in separating cash from the excessive disposable income crowd as it is “an obscene spectacle of opulence”…

#210 Mexican Mommy on 04.08.19 at 6:02 pm

SW Pensioner—I’d be lost without you

#211 Mean Gene on 04.08.19 at 8:15 pm

The simple folk who have an eat the rich attitude, forget the professional hocky players they idolize are part of the same group.

#212 Blacklab on 04.08.19 at 10:17 pm

I have been renting for all the time I have lived in Toronto. Salary has doubled during the time, but still can’t afford to move into a 1bdrm apt with the # I want to put into savings. The rent has skyrocket to the point I think it’s ridiculous. 1700 for a tiny bachelor + utilities in an apartment. Sure, its at a very nice and convenient location, but really?!

#213 Jenn on 04.09.19 at 4:20 pm

I think you’re missing another part of the equation. Childcare. People do have children, and it’s a fact of life that’s not going anywhere, nor should it (obviously some portion of any population needs to procreate to make society chug along). What changes is how many children people have and the age they have them, and this is largely a financial consideration.

Let’s look at what it means to have a child in today’s two-earner households earning that average 70k.

1. Housing is expensive. Even two-bedroom apartments cost an arm and a leg in most large cities. And let’s not pretend everyone can up and move. Anyone with a partner would have to move in tandem with someone who’s not willing or able to move. Your field of work may not exist elsewhere or in large numbers. Moving is no so simple, so housing costs in the cities matters a lot.
2. Childcare is a cost on par with housing if you have two kids (which is not a big family). Infants are upwards of $70/in Toronto. Toddlers could be $65, preschoolers $60, and even before and after school care for kindergarteners can run you $35/day. Do the math.
3. So, let’s say in Toronto you find a 2-bedroom unit somewhere for $1800 (it’s very hard, but can be done) and you have one small child whose childcare costs you $1300, you’re already spending $3100 a month and you haven’t even eaten anything or taken the bus. For that average family income of 70k, you’re looking at take-home pay of what? Depending on various employment type factors, maybe $5000/month. That’s less than 2k a month for everything in life (food, public transit– $150/person in TO–, insurance, clothing –growing kids and don’t forget shoes–, pets, medical misc, utilities, etc) if you have just one 3-year-old child. That’s not a ton of wiggle room.

There’s no car in that budget. There’s no vacations. Who’s trying to get the better house than mom and dad? If you’re earning this sort of household income in a big city and trying to raise a small family, you’re looking at making ends meet.

Mostly the information in this blog is useful, but I’d like to gently point out you may be out of touch with the realities of young working families. Not all fields of work exist everywhere, couples can’t be expected to live in separate cities while they raise families and thus moving isn’t always a realistic suggestion, and childcare is very expensive and average wages don’t allow for generous savings once the bills are paid.

So, I’m not concerned about very high earners. Unless they’re experiencing an income shock from taxes that’ll cause them genuine hardship rather than the emotion of irritation, I need to save my energy for those who are working just as hard to provide for their families but not being compensated well enough to get ahead, or are in need of government assistance despite working full time hours.