Bad planning

Jasmine and her husband pull in $250k and worry about money. Ironically, the more people earn (or have in net worth) the more they fret about financial stuff. There’s a lesson in there somewhere.

Anyway, the Calgary house is worth $570,000 with $270,000 left on the mortgage, sub 3%. “We’re on track to pay that off in five years,” she says. Two kids under ten. Sadly, no pooch. “We’re both in IT,” Jas adds, “both early 40s, and most of our investments were in mutual funds at the bank. High fees, so we cashed them out and move to Questrade. But now we’re stuck.”

So they have $150,000 in RRSPs, a total of $30,000 in TFSAs and fifty grand in an RESP (the right kind – a family plan. Make sure yours is, if you have an heir & a spare). That means the bulk of their net worth is in real estate, in a difficult market – which makes you wonder why they’re aggressive about paying for the home loan. Being in IT probably means no corporate pensions. So as time goes on they’ll need a fat financial portfolio more than a paid-off house.

Here comes the question:

“We find ourselves with about 100K in these new RRSP accounts that is ready to be invested. And another 50K ready to be invested from within an RESP account. But the markets seem like they are at all-time highs. How do you recommend we invest this 150K? We’ll not need the RRSP savings for 20 years and will not need the RESP savings for the 10 years. Investing it 10K a month over the next year into a low cost ETFs seems like one of the options. We welcome you opinion or criticism. We do want to save more money going forward, and hopefully retire sooner than later, in the next 10 years. Thanks for your blog for the knowledge as well as the humor.”

Wow, well. Retirement in a decade? Fuggedaboutit. Ten years from now the urchins will be highly costly teens going into expensive education. You’ll still have no pensions, and be a decade away from sopping up the public old people’s dole. If the investments have doubled by then, after pulling about 7% a year, the nestegg will be only $300,000. Are you seriously thinking you can go from a gross of $20,000 a month to two grand and not kill each other or start selling meth?

Nope. Your problem is not being afraid to invest now in case markets temporarily fall 10% (in the sweep of things that is utterly irrelevant, so just do it), but your screwed-up financial priorities. First, do a budget. Figure out where that $250,000 a year is going. Nip, tuck and massage enough to find at least two grand a month to chunk into your TFSAs and start a joint non-registered investment account.

Second, stop messing around with the mortgage. The rate is barely more than inflation, which means the bank is subsidizing you. Why pay off a loan in the 2% range when financial assets can earn three times that? Why waste half of the working years left paying down a cheap loan on an asset that might be worth less later? The major challenge is accumulating enough liquid assets to replace your employment income later while also saving/investing aggressively for the kids. A paid-off house is irrelevant to both of those goals. Don’t spend this critical half-decade shoveling money into one wobbly asset instead of establishing a fund that will support you for a lifetime.

So, Jas, act logically, not emotionally. Isolate the big goals (kids, retirement) and focus on achieving them. Financing other stuff along the way – a house, a car, vacations – is peripheral to what really matters. Odds are the cost of money will be staying historically low as economic growth sputters along, and Alberta may be a long ways from the next boom – no matter who wins this week. That house is a place to live. It’s not an investment.

So, finding $270,000 in after-tax income over the next five years to erase the mortgage is nuts. You will save nothing. You’ll become dangerously undiversified. You’ll have missed five years of portfolio growth. You’ll risk having too much in a single asset. And there’s no reason to expect tax-free capital gains for a long time, in a city that politicians have helped hollow out.

And there, in a simple example, is what this pathetic blog is all about. Don’t think with your pants. Never let the cult of real estate divert you from what really needs accomplishing in your life. If you choose to have a family, understand the consequences. Kids don’t care if you own or lease, but they sure get it when you can’t cough up their tuition or move into their basement when you’re 70 and scrabbling.

The goal is not a house. In a future blog I will explain the meaning of life. Try not to miss it.

114 comments ↓

#1 pay your taxes on 04.11.19 at 4:58 pm

We’ll not need the RRSP savings for 20 years and will not need the RESP savings for the 10 years”

Garth, the rrsp isn’t needed for 20 years, it was the resp that they will need in 10 so they’re well aware of how expensive kids can be.

#2 Captain Uppa on 04.11.19 at 4:59 pm

I love the point about not rushing to pay off the mortgage when rates are so low, it makes total sense. I am looking forward to becoming more diversified in my asset allocation when I buy my next house.

Luckily my wife and I have solid pension plans, but am considering that a bonus; need to start buffing up the TFSAs and RRSPs.

#3 The real Kip (Ret) on 04.11.19 at 5:03 pm

Wow. I can’t believe you didn’t tell them to sell the house and live in their Dodge Caravan.

#4 Blogdog123 on 04.11.19 at 5:10 pm

The meaning of life:

Wired in your brains since the stone ages…
Continuance of the species/sex drive, acquire things to keep you alive/food shelter, perhaps some laughter to keep you from going crazy…
,

#5 conan on 04.11.19 at 5:17 pm

Garth Turner’s meaning of Life………….. you will get a nasty letter from Spam a lot and just a scratch barristers.

#6 NorthOf49 on 04.11.19 at 5:23 pm

“Are you seriously thinking you can go from a gross of $20,000 a month to two grand and not kill each other or start selling meth?”

Omg, I LOL’d, everyone looked. Ok I lie, I work from home, only the cat looked, still funny as heck!

#7 Jimmy on 04.11.19 at 5:25 pm

Don’t think with your pants!!

#8 yvr_lurker on 04.11.19 at 5:27 pm

Must admit that my wife and I did the same thing; it took us only 9 years to pay off a 450K mortgage balance on a place we bought in YVR in 2003. By Xmas 2012 we were done with it. It worked for us, because we drew up a tight budget and pumped those double payments and baloon payments. It was a good forced savings plan (all the while still managing a good 3 week holiday every year to somewhere cheap and off the beaten path). For us, I am not sure if we would have been as disciplined with trying to pump the extra $$$ into investments all the while making minimum monthly payments on our place…. to each their own……

#9 Dave on 04.11.19 at 5:27 pm

The numbers do not lie, my balanced portfolio in 2018 was down 3%. Thats right minus 3%. -3

The TSX lost 12% so your balanced portfolio did its job. So far this year you are up 7%, right? Stop moaning. – Garth

#10 Pat on 04.11.19 at 5:38 pm

Hey Garth,

Pardon my lack of reading comprehension skills, but I’m not sure what your thoughts were on Jas’ question on investing the 150K she has – do you recommend putting in 10K a month in a low cost ETF given that the markets are near an all time high, or do you recommend another approach?

I’m in a similar boat myself – Some cash on hand, ready to invest – no house or family however

Once again, the wisdom you pass on via this blog is wonderful, and really appreciated by folks like myself.

Stop analyzing. Invest correctly and forget about it. – Garth

#11 dosouth on 04.11.19 at 5:48 pm

Good on you on this one. What is it with paying off mortgages? Make sure you have some equity above the falling markets and use your available cash to invest in long term return.

…and IT. Good luck, Calgary’s economy is still a falling knife. Do they have an emergency fund. Questrade made me smile. IT people think they are pro’s until they’re not and write to you. Go figure…

#12 N1 on 04.11.19 at 5:50 pm

Garth you made a really great point about paying down the mortgage vs stuffing TFSA/RSP. My main goal was to get rid of the mortgage asap so cash flow is freed up. But I have a 2.39% mortgage locked for 5 yrs. You’re right I need to stuff my registered accounts instead of making prepayments to the mortgage. Thanks Garth!

#13 Penny Henny on 04.11.19 at 5:55 pm

That’s not a teacup Poodle

#14 Paddy twinkle toes on 04.11.19 at 5:57 pm

Sometimes I think you make these stories up Garth….”we wanna retire 10 years from now”…well might I suggest you start saving 50% of your salary???…”well we could never live on 125k a year”

#15 Another Deckchair on 04.11.19 at 6:01 pm

Jasmine – Listen to Garth. We are you in 15 years.

My story – for what it’s worth:
– paid off the house about 15 years ago;
– kids have now vacated;
– our salary is in the same ballpark as yours.

However:
– we should NOT have paid off the house first;
– we should HAVE looked at the fees paid for “retirement investments” earlier;
– we DO live on less than 1 salary, and have for a number of years now.

That last line should be read twice. It’s key.

How do we do it? We simply watched what we spent. Plug the holes in the bucket, and you’ll find it filling up fast.

There’s lots of ways to save; we found that by tracking our spending (down to the last cent) and figuring out the amount spent on certain items an eye-opener. (e.g. was the 2nd beater car worth about $1,000/month??)

And, for the curious, now that we don’t have to work, we still do – we are “retired”, but enjoy the intellectual challenge and interactions, so, for now, we still “work”.

#16 David on 04.11.19 at 6:02 pm

Zero chance of retirement in 10 years. Paying down debt is not a bad idea when the rates are low. My advice would be to make the regular mortgage payments, max TSFAs and RSPs and RESP. Save as much as they can and see what they have after a year and then pay a lump on the mortgage if they want. But don’t forget to have a life too.

#17 DJ on 04.11.19 at 6:02 pm

Curious, why do you recommend a family RESP plan over individual RESP plans? They seem functionally the same (still have to designated each beneficiary even within the family plan).

When one kid becomes a rockstar the other can use the accumulated funds. – Garth

#18 GreaterFool on 04.11.19 at 6:07 pm

250k family income and worried about money in Alberta…
I guess everyone in Bring Cashcolumbia is screwed!

#19 Canuckystan on 04.11.19 at 6:16 pm

Not sure this is so cut and dry. How many years left on the mortgage? They say they can pay it off in 5 years, compared to what if they weren’t so aggressive?

Assuming there is maybe 15 years left, that’s $63k in interest at 2.9%. Paying in 5 years means about $20K interest, saving about $40k in interest guaranteed. If they stick with paying it out over the remaining years (again, assuming 15 years), they still have those payments and a $63K interest bill, so they would have to take whatever is left after making those continued mortgage payments to invest enough to generate more than $63K in returns in order to justify not paying off the house earlier.

Bird in the hand + huge psychological benefit of paid off house (yes we are not all Spock) = not the worst thing to pay it off as quick as possible.

A psychological benefit won’t pay you retirement income. – Garth

#20 Yukon Elvis on 04.11.19 at 6:35 pm

Almost five years ago, in May 2014, when he was setting the scene for the biggest asset bubble trap in history – trap because his own policies made it impossible to undo the Fed’s monetary policies without bringing the entire financial system crashing down – Bernanke uttered what was very unwitting gallows humor, when he said that he does not expect the Fed’s interest rate to rise back to its 4% average during his lifetime.

In retrospect, he was right because just a few years later, with the Fed Funds rate at 2.50%, the Fed realized that any further hikes would crash the market, which was already on the verge of a bear market, and as a result Fed Chair Powell put the Fed’s rate hike strategy on hold.

Now, five years after Bernanke’s infamous statement, Trump’s top economic advisor Larry Kudlow has done Bernanke one better, and during an event in Washington, said that he does not think that rates will go up ever again, “maybe never again in my lifetime”, effectively admitting that the US economy is on the verge, if not in, a recession (either that, or giving a pretty dire prognosis of his own health).

#21 My Gawd on 04.11.19 at 6:41 pm

I didn’t realize you could pay that much for a house in Calgary.

#22 Dolce Vita on 04.11.19 at 6:46 pm

Something more cheery tomorrow Garth.

2 nights of sad stories. Of course, points well made.

Having said that, you make me feel a lot better about my financial situation and life decisions that got me to this point (retired).

#23 Nonplused on 04.11.19 at 6:47 pm

I can handle the meaning of life: There is no “meaning of life, save for what you create yourself”. People attach meanings to things, life does not.

The universe is a strange, strange place. What we think of as matter is mostly empty space with a bunch of tiny electrons whirling around in tiny orbits around a bunch of electrons. We can’t see all that space even with a microscope because the electrons are about the same size as the photons that we would be using to see them. It’s a bit like trying to image a basketball by throwing tennis balls at it. Only tiny. And you don’t know where the basketball is. And it’s moving really fast. But if we could see at his level matter would look a lot like what we see when we look at the solar system. Pretty neat, but it lacks meaning. It lacks, for me, even a fundamental conceptualization. Who on earth would think to make a universe this way? And it’s made entirely of energy. E=mc^2 explains how they convert. Or I guess how we observe they convert, I am not sure anybody actually knows how a proton becomes energy but we know they can. That’s how a nuclear reactor works. And a nuclear bomb.

Why on earth are there so many stars? Why is space so vast? Are there millions of planets like earth with some sort of life on them? Dinosaurs maybe? Maybe they didn’t get hit by a meteor so the dinosaurs never went extinct? Imagine when you look up that there are a million planets up there with dinosaurs or some other such life on them all eating each other for 100,000,000 years because it never crosses their minds to determine the meaning of it all. What sort of a universe is that? But it is more likely than not the one we live in. Unless you entertain the “simulation hypothesis” but that one is even weirder and requires a reality outside our own that is doing the simulating. Maybe that is where the idea of “heaven” comes in but I find trying to imagine that even weirder than our current universe.

Even the concept of “meaning” is a strange one, and may be a biological accident. Words have meanings, but it is a stretch to think anything else does. Does a bee have an innate sense of the meaning of her life? Does she need one to go about her business collecting pollen and stinging joggers? What about ants? By weight they make up more of the earth’s animals than any other species. An alien would probably consider them to be earth’s dominant life form. Instead they are just a product of natural selection just like anything else. The design happened to work well so it survived and prospered. They’ve been on this earth a lot longer than we have, and I mean a LOT longer, so it could be that “meaning” is a biological exception, not the norm. A relative flash in the pan so far.

Natural selection or “survival of the fittest” appears to be a universal law that applies to a lot of things besides life. It seems to apply to free markets, technology, politics, sports, corporate hierarchies, even religions. But that doesn’t imply there is any “meaning” to it.

But the bright side to this rather depressing reality is that it means that “meaning” in your life is wherever you chose to find it, and it is as personal and unique to you as you chose to make it. It’s anything you love and believe in. It can be any combination you chose, family, friends, God, work, skiing, your dog, your country, your favorite sports team, whatever you chose. It is as unique as you are. It will die when you die. But for now it’s yours and nobody can take it away from you unless you let them.

* For those who want the abbreviated version, as Douglas Adams discovered, the meaning of life is 42, but we misunderstood the question.

** I’m viewing things from the commonly accepted scientific view of the earth and the universe. None of this precludes the possibility of a God or Gods existing. In fact, the “simulation hypothesis” pretty much demands the existence of something we would call God, as the creator of the simulation. And if it is a simulation, it would look the same whether it was turned on 13 billion years ago, 6,000 years ago, the moment you were born, or just now.

*** The “simulation hypothesis” presents an interesting but disturbing possibility that René Descartes explained already in 1637 when he said “I think, therefore I am”. There is actually no way to prove in philosophy that anything other than yourself exists. He went on to explain that God is also proven because Descartes did not create himself, but this argument was considered weak. His critics went even further to say that the “I” could not be proven, only that thinking was occurring. Most of the rest of us came to the conclusion that these people had too much time on their hands.

#24 Tony on 04.11.19 at 6:51 pm

They think their house is worth $570,000 until they list it and find out they’d be lucky to get $400,000 for it. Trump knows the only way he can avoid the stock market imploding is to destroy the U.S. dollar.

#25 red_falcon on 04.11.19 at 6:51 pm

Priority is always to FI… as the lifeguard instructor says, if a person is drowning in the pool, worry about yourself and figure a way to access the situation before assisting and helping. Otherwise you’ll end up with two people drowning. In otherwords, pay yourself first!!!

#26 Dogman01 on 04.11.19 at 6:59 pm

87 Smoking Man on 04.09.19 at 8:48 pm

Apparently YouTube has decided to mark the Candace Owens congress testimony as “Restricted”.

Wow …don’t want that type of speech circulating to much do they.

I saw our Fearless leader PM attempting to deflect Scheer with the same garbage tactics she was calling out:

At the one minute mark:

https://www.citynews1130.com/video/2019/04/10/war-of-words-between-scheer-and-trudeau-over-snc-lavalin/

#27 PGer on 04.11.19 at 6:59 pm

Hate to sound too much like a curmudgeon (but I guess I do). When did it become an unalienable right of children to expect their parents to now pay for their post-secondary education (RESPs).

In my day (late 70s to 80s), we all saved and/or took out loans to go to university. You worked your ass off in the summer to save whatever you could, and had already saved a good amount by the time you started university. I don’t remember any parents from where I came from (except the very rich ones) having the ability to pay for this stuff (even if they wanted to, which they generally didn’t).

My wife and I both went to university, paid for by ourselves, and our parents didn’t contribute anything. I went for a longer time and had some student loans which we paid off ASAP.

I think this made us independent right away (starting at 18) and much better savers in the long run. (BTW, in university we never had a car, didn’t go on any “vacation”, rarely went out to eat, and basically lived very frugally, as was necessary to live within a very tight budget).

There’s my curmudgeon minute (cue the commenters saying it’s different, and more expensive for kids now).

#28 expat on 04.11.19 at 7:04 pm

I’m always amazed when people financially engineer things these days…

“Your house is your retirement fund” was the motto for generations. Inflation and the odd bubble gave you 3-10% return annualized on your house every year on average.

Now most people have homes bought at or near top of cycle. More importantly they have mortgages that astronomical.

Inflation is not a factor here imho.

We will not see appreciation in home prices like we have in the last 30 years

thus your house is a liability – not an asset.

Houses are now depreciating assets.

I’d sell the damn thing and rent and then invest your salaries…

Buy back the house for 30 cents on the dollar and by then your equity will pay for the house outright

TOOO MANY PEOPLE ARE ON THE WRONG SIDE OF THIS PLAY!!!

#29 Tony on 04.11.19 at 7:06 pm

Re: #19 Canuckystan on 04.11.19 at 6:16 pm

Any sane person would pay the mortgage off in full after the 5 year mortgage term elapsed. Unless his equity is too low and he’s going to walk away from his house with the keys in the door. In retrospect he should of course just walked away from the house and mortgage the day he bought it.

#30 Al on 04.11.19 at 7:06 pm

If you have a net worth of almost half million ( like today’s protagonist) and are current grossing a 1/4 million, and can’t be FI in ten years you’re doing it wrong. Really wrong. Teenagers, yes they eat more. But guess what, they can also work if they want to spend frivously. Not that it matters too much at 250k unless you want to raise Paris Hilton. Track your spending and evaluate your priorities

#31 VanIsle Retiree on 04.11.19 at 7:06 pm

With $270K left on the mortgage, at a bit over 2%, could you do an interest-only mortgage? Because the other thing that most people don’t recognize is that the $270K actually decreases in real terms with inflation – let the bank take the hit on this one. (Oops, not the banks I hold stocks and bonds with, though).

And your investments in RRSPs and TFSAs are backwards – younger people should be funding the TFSA first 1) because of the tax advantage when they withdraw it (you pay tax on all the accumulated cash in the RRSP when you start withdrawing it) and 2) because the income tax rebate on the RRSP contributions will be greater when earnings are higher.

And Jas has lots of contribution room left in the TFSA, so stuff it (the TFSA, that is).

#32 Lawnboy on 04.11.19 at 7:07 pm

Just thinking that in the past 24 hrs we have seen an image of a black hole and the legal equivalent of another one in the arrest of J. Assonge. This is going to be wild.

LB

#33 avocado latte on 04.11.19 at 7:08 pm

I wish I had a house I could heloc; instead all I have is a lousy margin account.

#34 Wallflower on 04.11.19 at 7:10 pm

holeeee cow wow
yes … just finished putting single/solo child through uni and it was about $32K per year (Canada, another province)
5 years X 32 = 160K for one child

#35 Tony on 04.11.19 at 7:15 pm

Re: #11 dosouth on 04.11.19 at 5:48 pm

The resale apartment and resale townhouse market in Calgary is bottoming out now. The resale apartment and resale townhouse market in Edmonton has just bottomed out a few weeks ago. The resale housing market single detached in both cities should put in a bottom about 4 to 6 months from now.

#36 crowdedelevatorfartz on 04.11.19 at 7:26 pm

Gas in Vancouver is $1.65.9 and expected to go uppa uppa uppa before the long weekend……

:)

#37 CRV on 04.11.19 at 7:30 pm

Hi Garth, long time reader of your blog since 2013?? When you advised people to buy USD. I listened to you…but parked into cash account for vacation purpose.

Anyway, we moved from Vancouver to Calgary in 2017 as I found a better job here. I am in early 40s with 2 kids. I never owned a home in Vancouver and even now, still ‘homeless’ in Calgary.

I understand you said that there are approximately 5% home purchaser were foreign buyer. But I also agree with the Vancouver Sun article 100%. Because of my background (immigrated in Canada since I was 12 from Hong Kong), I know this is true and there are lots of ‘satellite families’ in Vancouver.

It is not fair when middle class here pay 40% income tax and the billionaires in Hong Kong pay only 15% max in taxes. How can average Canadian locals compete with the world for living in the great city.

https://vancouversun.com/opinion/columnists/douglas-todd-why-we-need-to-stop-subsidizing-foreign-ownership-of-metro-housing

#38 crowdedelevatorfartz on 04.11.19 at 7:38 pm

@#26 Tony

“The resale apartment and resale townhouse market in Calgary is bottoming out now. The resale apartment and resale townhouse market in Edmonton has just bottomed out a few weeks ago….”

+++++

I dunno.
Kenny seems to be quite a slimeball and if Notley gets re-elected next week……

#39 BlogDog123 on 04.11.19 at 7:42 pm

Hey, what kind of wages do 20-something university students make today if they work May through August? I made $15/hr about 27 years ago. Want to know in relation to the cost of going to university and if a summer of work can fund a year of university….

#40 Andrewski on 04.11.19 at 7:46 pm

“When I was 5 years old, my mother always told me that happiness was the key to life. When I went to school, they asked me what I wanted to be when I grew up. I wrote down ‘happy’. They told me I didn’t understand the assignment, and I told them they didn’t understand life.”

John Lennon

#41 SmarterSquirrel on 04.11.19 at 7:55 pm

Totally agree. House is not the goal. I have a lovely home. I rent. Renting let me spend less per month on a roof over my head than buying would have, letting me save more. Saving more let me invest more. My portfolio grew and grew over the many years to a point where I know have passive income that can pay for all of my non discretionary and discretionary expenses. Essentially my passive income now pays for my rent. I no longer need to work if I choose not to. Heed Garth’s advice. Build your investment portfolio. Never know when you might lose a job or when you might suddenly desire to stop working. Good to have the option.

#42 Ustabe on 04.11.19 at 8:06 pm

Bread and Circuses…

The new Ontario budget mentions alcohol or beer 46 times.

It mentions teacher or teachers 25 times.

Gotta have priorities and when your governing party is bereft of a meaningful platform this is what you get.

Have fun over the next while, maybe a Costco run to stock up on Metamucil is in order

#43 House horny on 04.11.19 at 8:43 pm

I’m so house horny right now… all I think about are houses all different sizes, price’s and shapes! I’m so house horny… yes I am a realtor

#44 PastThePeak on 04.11.19 at 8:46 pm

Jas, you and family are doing quite well, so don’t lose faith with some of the rabble here. The rent vs. buy in some markets (much of BC, and GTA now) is heavily on the rent side because purchasing is just crazy. But most other markets in the country it is not so black and white. And the rent vs. buy when a family is involved is completely different when single/couple (with all due respect to our esteemed host and Smarter Squirrel). You will not regret buying.

That said, with interest rates likely to head lower, you should be doing more investing and less aggressive on paying down house. Perhaps target 10 years for closing that out.

On the question of what to do with your money, I would *not* be putting it all into the market today. Dollar cost average in. Do your research on where you want it to go, so if there is a significant decline you can be more aggressive. There are all the signs that this is near the market top (market peaks were back in 2018 is far) for this cycle.

Also, don’t forget to build up some kind an emergency fund – don’t rely on HELOC / LOC for that – no guarantee it will be there. You guys have the income to make progress on this & your retirement + RESP.

Finally, don’t listen to the advice to be financially independent at the earliest possible age by saving everything. You have to live a little too (balance in all things).

#45 crowdedelevatorfartz on 04.11.19 at 8:46 pm

#37 Honda CRV
“How can average Canadian locals compete with the world for living in the great city.”

*****
keep voting NDP?

#46 Figure it Out on 04.11.19 at 8:50 pm

“In my day (late 70s to 80s), we all saved and/or took out loans to go to university.”

Well, I just looked up today’s tuition fees for the program I started in 1987. A little over 10x what I paid then.

#47 paul on 04.11.19 at 9:07 pm

interesting budget in Ontario looks like the provincial wing of the party PC put there agenda aside to support the federal side in October what do you think?
i bet the federal liberal camp is looking at it closely

#48 Nonplused on 04.11.19 at 9:09 pm

#32 Lawnboy on 04.11.19 at 7:07 pm
Just thinking that in the past 24 hrs we have seen an image of a black hole and the legal equivalent of another one in the arrest of J. Assonge. This is going to be wild.

LB

The arrest of Assange and the results are going to be huge. This is the moment freedom of the press either gets reaffirmed or destroyed.

It is not clear that Assange was ever involved in any espionage or ever did anything but publish information that was given to him by “sources”. And it is also interesting that Wikileaks has never had to retract an article. They are truth tellers. The problem is the truth they are telling. It wasn’t meant to see the light of day.

All cockroaches scurry away from the light. What we didn’t know was just how many cockroaches there were.

Assange will be made an example, he will be treated horribly but kept alive. After this event, freedom of the press is dead. Well it was already 7 years ago when he was first imprisoned. After today, there is no freedom of the press. Tucker Carlson could go to jail. Tomorrow, your Facebook and Twitter posts could land you in jail. We are quickly approaching a point where you can say nothing, and Garth could go to jail if he criticizes Trudeau, or even realtors. Trudeau is already trying to censor Scheer through the courts. Where this ends is in badness unless we stop it. Trudeau must go to jail and Assange must be freed or we are all doomed to a life of not being able to say anything that the politburo has not approved.

#49 Brett in Calgary on 04.11.19 at 9:16 pm

Sure, whatever you say. There may be a bottom coming soon, but there isn’t much of an upside either.

===========================
35 Tony on 04.11.19 at 7:15 pm
Re: #11 dosouth on 04.11.19 at 5:48 pm

The resale apartment and resale townhouse market in Calgary is bottoming out now. The resale apartment and resale townhouse market in Edmonton has just bottomed out a few weeks ago. The resale housing market single detached in both cities should put in a bottom about 4 to 6 months from now.

#50 SoggyShorts on 04.11.19 at 9:22 pm

Sweet Jeebus, just how expensive are kids?
Me & the squeeze are in the same income range as today’s couple and we are going from zero to retired in under 10 years.
We live really nicely in AB on 20k rent 20k food&stuff, 20k play/vacations

Are diapers 100k per year?

#51 NoName on 04.11.19 at 9:24 pm

#153 Remembrancer on 04.11.19 at 5:38 pm

That’s eggsactly what i sad buyer is one with the mullah.

As for deposit on my house we placed princely sum of 3k, that was around 1% what aksing price was. Reading about those people putting 100k down as deposit, and lossing it because someone told them to look sirius before they did all other nessesery steps makes my head spin…

#52 Remembrancer on 04.11.19 at 9:35 pm

#39 BlogDog123 on 04.11.19 at 7:42 pm
Hey, what kind of wages do 20-something university students make today if they work May through August? I made $15/hr about 27 years ago. Want to know in relation to the cost of going to university and if a summer of work can fund a year of university….
————————————–
Depends on your provinces’ minimum wage, assume its that or say $15ish if lucky. May til August is still prime, but expect a ramp down in hours in August in a lot of seasonal type jobs but even say its May 1 – Aug 31 (122 days total), you are not going to get 40 hrs or more / week in most jobs as full time gigs are rare…

Assume a STEM program + books / fees + on campus residence/food plan is roughly $25K/ year for a fair to middling school…

#53 Toronto Rocks!!!!!!!! on 04.11.19 at 9:41 pm

The Leafs win 4-1 against their arch rivals the Bruins!!!!

The Leafs rock!!!!!!!!!!!!!!!

Next up, the Raptors!!!

#54 TurnerNation on 04.11.19 at 9:55 pm

Toronto pricing is out of whack. Just West of Downtown new build kandos at 600 square feet run $600,000.
That’ll costs you $1000 for a place to set your pair of shoes…!!

Yet nearby of them this grand old brick semi hulker (provenance unknown, Raccoons may be on its title) may be had for a “mere” extra stick . (1.5m it is)

https://toronto.craigslist.org/tor/reb/d/toronto-164-beaconsfield-avenue-little/6862975147.html

Trends:
– If you doubt our elite tax farm owners are controlling our breeding and feeding…from 2001 a mainstream paper source:
https://archive.is/qKjkp
“Scientists have created the ultimate GM crop: contraceptive corn. Waiving fields of maize may one day save the world from overpopulation.”

#55 ImGonnaBeSick on 04.11.19 at 10:02 pm

#10 Pat on 04.11.19 at 5:38 pm

There are a lot of studies on how to invest lump sums… They all show that you should invest the entire amount over dollar cost averaging. Even at the top of markets. This is the logical thing to do… However, you have to not go bananas when the market literally drops out from under you, could happen at any moment. That’s where dollar cost averaging supposedly helps, as long as you continue to make regular purchases. You still run a good chance of freaking out when the market drops after a couple months of purchases though… And that’s when you start trying to time your purchases and all kinds of nutty stuff.

So, I’d say just drop it all in a balanced mix of ETFs and try to hold your sh** together when the market inevitable gives up some gains… Might as well go with logic if you’re going to have the feelings regardless.

I got over the dips when I realized that no matter when I buy, it always goes down immediately after purchase. :)

Don’t worry, it recovers.

As for Jas paying off the house, definitely don’t lump sum payment .. that’s nuts. You can always accelerate and even double the payment if you want the house paid off. I believe a mortgage can be paid off in 7 years if you do this. Lump sum should be dropped into your investment accounts. If you then still feel you need to pay it off, you can do it from your fat investment account at renewal… Just think, dropping the 27,000 lump sum payment each year into investments over 5 years would grow to 190,000 at 6.25%…

And you you 50 Years of Maple Leafs Incompetence – suck it! 4-1 tonight over Boston. Marner’s penalty shot is going to be shown on every highlight reel for the rest of the playoffs…

#56 young & foolish on 04.11.19 at 10:14 pm

Hmmmm ……… I have another question …….

If you live in a big city (and 40% do, right?) then property and rents are already very high. Can we expect this to change over the next 10-15 years?

#57 Doug in London on 04.11.19 at 10:16 pm

Jasmine and her husband pull in $250k and worry about money.
———————————————————–
Looks to me like a nice problem to have.

#58 Two-thirds on 04.11.19 at 10:29 pm

Similar dilemma here. Same bias, perhaps. :(

Will be getting a modest inheritance sum soon. First priority, top up RESPs, for the offspring. 20% “ROI”, who can say no to that?

Second priority is undefined: make a lump-sum payment on the mortgage, OR repay an HBP RRSP withdrawal, OR invest in a TFSA 60/40 portfolio

Although current mortgage rates are laughable by historical standards, interest charges over the life of the loan are so massive, that the motivation to avoid forking out 80% of loan value in interest charges is very strong.

I h-a-t-e debt.

A 60/40 portfolio is a no-brainer, but should it be inside the RRSP or in a TFSA? Took out $ from the RRSP for the HBP, could repay it, or else lose the room and pay the income tax on it, if opting for the TFSA instead.

What to do? Mortgage calculator shows a reduction of almost 3 years in mortgage payments with a lump sum payment now, and tens of thousands of dollars saved in interest charges. That is appealing.

On the other hand, adding to currently lean TFSA funds in a 60/40 portfolio is also appealing, but its returns seem less certain. The savings in mortgage interest were estimated assuming today’s low rates over the life of the loan, so if interest rates were to raise to the 5% level in the next decade, annual lump-sum payments would bring savings that are comparable to TFSA returns over a similar period…

Suggestions welcome!

#59 AisA on 04.11.19 at 10:49 pm

Future blog totally = 42

#60 Funky on 04.11.19 at 10:59 pm

The meaning of life?? Wow, won’t miss it. You’re the man!

#61 dosouth on 04.11.19 at 11:26 pm

#35 Tony on 04.11.19 at 7:15 pm
Re: #11 dosouth on 04.11.19 at 5:48 pm

The resale apartment and resale townhouse market in Calgary is bottoming out now. The resale apartment and resale townhouse market in Edmonton has just bottomed out a few weeks ago. The resale housing market single detached in both cities should put in a bottom about 4 to 6 months from now.
—————————————————–

Unfortunately Tony,

Calgary doesn’t know when they will see the bottom of any of this. Nothing will change until after your election and then the federal election and then the market correction…..if you get my drift.

#62 VicPaul on 04.11.19 at 11:49 pm

#41 SmarterSquirrel
My portfolio grew and grew over the many years to a point where I know have passive income that can pay for all of my non discretionary and discretionary expenses. Essentially my passive income now pays for my rent. I no longer need to work if I choose not to.

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

The above statement – combined with a deep friendship with a fine woman, three adult children, of whom I could not be more proud and a chinese water dragon…I know (we loved Haillie for 17 years when the family was young but, all dogs go to heaven)
– these things are the meaning of my life.

…and golf.

A self-sustaining stream of income, a loving partner, children, pets (you too Felix – be open-minded Garth) and golf (three-five rounds/week).
These things are the meaning of my life.

….and travel.

A self-sustaining stream of income …

#63 Millmech on 04.12.19 at 12:15 am

#42
That should be great for the teachers pension plan since they bought the Canadian wine portfolio from Constellations Brands a couple of years ago.

#64 Smoking Man on 04.12.19 at 12:50 am

DELETED

#65 Smoking Man on 04.12.19 at 12:59 am

There was cock roach in our room the other day. The wife said kill it.

I did not.
https://youtu.be/kijpcUv-b8M

#66 The Great Gordonski on 04.12.19 at 1:07 am

First point, a house is not a fungible asset, due to market volitility, you could lose half overnight regardless of interest rates. Don’t fool yourself.

Stories about a few short term gamblers making money are in reality few and far between. That first letter from the CRA about paying your Flip Tax is a deflator , for sure. Don’t count real estate as an asset until your looking at a cheque from your lawyer after the sale is closed.

Second Point: $250,000 p/a is not $250 p/a., Not after you’ve paid your 51% direct income tax and mandatory indirect deductions. CPP and OAS take another 11% +/-? Off the gross?. Then you’ve got expenses, two car leases that gut your nut likely another $1500 ++ a month for 90 months?

Property taxes, municipal, utility, school fees, gas, electric, home maintenance. I paid $20 Grand a year for private school, not deductible.

I’ll wager this couple has little cash and a fat Visa bill every month. If they’re on contract the net is even worse.

Retire in ten , with two kids not yet in University which will cost another $25000 with residence p/a, more if you have to send them away.

Lol, welcome to Trudeau’s hell suckers. Canada isn’t designed to let working people get rich off of their labor. You either make a lot more money or get the hell out.

$250,000 is nothing to brag about, it’s chicken feed these days.

#67 Smoking Man on 04.12.19 at 1:24 am

DELETED

#68 chump on 04.12.19 at 6:12 am

That was fantastic Garth.

#69 Gravy Train on 04.12.19 at 7:00 am

#45 Figure it Out on 04.11.19 at 8:50 pm
“Well, I just looked up today’s tuition fees for the program I started in 1987. A little over 10x what I paid then.” I just figured it out: The imputed annual inflation rate in program costs is 7.46% ((1+0.0746)^32 = 10). Yikes!

#70 IHCTD9 on 04.12.19 at 7:18 am

#36 crowdedelevatorfartz on 04.11.19 at 7:26 pm
Gas in Vancouver is $1.65.9 and expected to go uppa uppa uppa before the long weekend……

:)
________

That’s just nuts, more than I’ve ever paid for gas anywhere. I filled the wife’s car up on the rez a couple weeks ago for 1.02/l :)

It’s about 1.17 right now off the rez.

#71 Mattl on 04.12.19 at 7:21 am

#49 SoggyShorts on 04.11.19 at 9:22 pm
Sweet Jeebus, just how expensive are kids?
Me & the squeeze are in the same income range as today’s couple and we are going from zero to retired in under 10 years.
We live really nicely in AB on 20k rent 20k food&stuff, 20k play/vacations

Are diapers 100k per year?

————————-

Diapers, no. But all in a kid that requires daycare, sports, dance, RESP, legacy, plus everything else can run you 2-3k a month which, depending on your bracket is 40-60 gross.

Worth every penny, but doing the kid thing the right way is not cheap

#72 crowdedelevatorfartz on 04.12.19 at 8:14 am

@#69 IHCTD9
“That’s just nuts, more than I’ve ever paid for gas anywhere.”

++++
Yep.
Carbon tax, Transit Levy, local taxes, etc….oh and every year the oil co’s announce that a refinery of one sort or another is “down for maintenance”.
I expect some sort of “emergency” at another refinery some time in the near future so they can bump the price to $1.75 -1.85.
A friend just bought a 3/4 ton diesel pickup to haul the trailer, dirt bikes and camper around.
That’ll be minimum $150 to fill for what 500kms/tank?

Dont get me started on my govt car insurance.
I renew next week. $1950/year with my 42% safe driving “discount”.
The ICBC fiscal “dumpster fire” that just keeps on sucking money into the vortex of over staffed, over paid slothful, lazy govt employees.

#73 Tater on 04.12.19 at 8:15 am

#28 expat on 04.11.19 at 7:04 pm
I’m always amazed when people financially engineer things these days…

“Your house is your retirement fund” was the motto for generations. Inflation and the odd bubble gave you 3-10% return annualized on your house every year on average.
—————————————————————
Might want to check your return assumptions there. Seems just a touch high.

#74 thebarold on 04.12.19 at 8:33 am

Timely. Here’s an different perspective. We took the conservative route early last year and paid off the mortgage balance with a chunk of change I had accumulated but not invested. Yes the market returns more, _on_average_, over the long term. Since then, living with no mortgage, keeping expenses low and seeing the option of ditching this job for one that I actually enjoy or feel good about, is now the priority. It changes your perspective. Employers Hate It! Mortgage payments are good in that they force discipline and keep you motivated to stay employed.

#75 Why You Need Professionals on 04.12.19 at 8:35 am

I remember during the run up to the bursting of the the dot.com bubble the mania (aka FOMO) that seemed to sweep up a lot of otherwise intelligent people. Some borrowed huge amounts of money against their houses to purchase stock that essentially became worthless. As a consultant in the various technology sectors I worked in, I made it a point to never buy stocks in the companies I worked for.

If the doofuses who lost their shirts (after they lost their minds) had enlisted an advisor with wavy hair, who could wax eloquent about beautiful bottoms (meaning yield curves), and possessed of chiselled abs (and even sharper insights) then self-same doofuses would be in much better shape.

I have not worked on the brakes of any car I have owned in the last 20 years and I do not take similar chances with electrical equipment or anything else that could kill me. I pay people who know what they are doing and in whom I can trust they will not do things that will get me and my loved ones killed. Typically, these people have regulations to comply with. I apply the same logic to having good financial management (and I am embarrassed to say how long it took me to realize this). Why do we even have these discussions?

#76 Remembrancer on 04.12.19 at 8:40 am

#65 The Great Gordonski on 04.12.19 at 1:07 am

CPP and OAS take another 11% +/-? Off the gross?.

I paid $20 Grand a year for private school, not deductible.

—————
Huh? The CPP ($2,749) and EI ($1,205) are paid to the limits, just like everybody else making over the $57K and $53K cutoffs except likely in April-June timeframe not November. Do you even know what you’re talking about?

And its Trudeau’s fault you are $20K poorer / year for private school? That’s a choice sunshine. Get a clue, half the time in running to keep up with the Jones’ you don’t realize you are the Jones’.

#77 crowdedelevatorfartz on 04.12.19 at 8:41 am

Oops .
Spoke too soon.
Gas prices jumped again last night.. $168.9

https://www.citynews1130.com/2019/04/12/price-pump-metro-vancouver-jumps/

#78 In Garth We Trust on 04.12.19 at 8:41 am

“In a future blog I will explain the meaning of life. Try not to miss it.”

The bearded mystic sage, all knowing, all wise, former Minister of National Revenue, denouncer of fake politicians, financial oracle without peer, lone voice of reason in the financial wasteland of Canada will explain in a future blog the great question of the ages. The meaning of life. Blog dogs who miss his sagacious words will do so at their own peril!

#79 maxx on 04.12.19 at 8:43 am

@ #26

Here’s a second curmudgeon minute:

Someone was telling me recently that on the outbound flight she boarded for a recent vacay, a group of Mils were talking about their NEXT trip to the sunny locale. Note that this was on the way down….they hadn’t even arrived!

Talk about first world, excess everything entitlement. Small wonder there is so much consumer debt.

I think that there is an inverse relationship between spending and enjoyment past a certain point, and that point doesn’t require much money.

I’m also with you in terms of shouldering your own life’s costs.

Few know the true value of money any longer…..

If they did, they wouldn’t stand for obscene government waste of our hard-earned taxes, but that’s another moment.

#80 IHCTD9 on 04.12.19 at 8:43 am

Kids can add up – but I think it’s a flash in the pan for most folks. I put 11K into 2 rounds of braces last year. We sent the boys thru private schooling and that is at 150K and counting thus far. Outside of education, braces and possibly sports, it’s not really very expensive.

Plus, once they get old enough to do real work and get their drivers licenses, then they can pay you back some. My kids do chores every Saturday, they rake and mow outside in the summer, they’ll be helping me re-shingle the roof this spring along with a few other bigger jobs.

3 more years and the costs start going down, and the work load starts growing again.

#81 maxx on 04.12.19 at 8:46 am

Sorry dawgs, last post meant @ #27

#82 n1tro on 04.12.19 at 9:01 am

#26 Dogman01 on 04.11.19 at 6:59 pm

Apparently YouTube has decided to mark the Candace Owens congress testimony as “Restricted”.

Wow …don’t want that type of speech circulating to much do they.
——————————–
Probably offended too many snowflakes how Candace called out a blatant smear attempt by Nader and Lieu. Candace is such a breath of fresh air because if for not the fact that she is black and a female, anyone else saying what she says would be labelled a racist or a bigot.

Owens for 2024 if the Republicans are awake.

#83 Remembrancer on 04.12.19 at 9:07 am

#72 Tater on 04.12.19 at 8:15 am
#28 expat on 04.11.19 at 7:04 pm
I’m always amazed when people financially engineer things these days…

“Your house is your retirement fund” was the motto for generations. Inflation and the odd bubble gave you 3-10% return annualized on your house every year on average.
—————————————————————
Might want to check your return assumptions there. Seems just a touch high.
——————————————–
Traditionally in normal parts of the country, residential RE was an inflation hedge and in normal markets no crazy bubbles / deflates unless you have a real black swan event, something like a major new factory being opened in a formerly rural area or a mine being closed…

#84 not 1st on 04.12.19 at 9:36 am

A family of 4 needs $150k min in this country to survive and that’s even living in the boondocks, so add another $100k to it for most major cities.

That’s if you want to properly invest for your own future and your kids educations. $40k in before tax income is needed just to put in RRSP, TFSAs and RESPs.

Canada whole high tax regime will fail because most of us live within a stones throw of a real economy. We aren’t cut off like Iceland or Hawaii. The day trips for milk, booze and gas are already starting especially in BC. Even with the currency hit, lots of stuff cheaper in trumpland.

The US is going to rock so hard. There is so much money coming into that place its just staggering. Investors moving to US stocks, companies relocating, super huge trade deals, CBs buying the US stock exchange.

#85 Debtless on 04.12.19 at 9:43 am

For real live human beings, get out of debt, pay off the mortgage. Don’t borrow for vehicles. No lines of credit Full stop.

Let’s admit most of us are weak and attracted to shiny bobbles (Garth Turner types are the exception not the rule). All the great intentions to not pay the mortgage and divert cash to investments, or to rent and put housing savings into investments goes out the window pretty fast when that deal to Maui pops up, or the new model car that prevents rear enders is released, or that new restaurant opens that people rave about.

For most actual flawed human beings, hanging onto debt (no matter the interest rate) does not lead to increased investment and savings, it leads to increased discretionary spending. I’m sorry but you just can’t dispute that in the real world.

#86 Penny Henny on 04.12.19 at 10:09 am

#45 Figure it Out on 04.11.19 at 8:50 pm
“In my day (late 70s to 80s), we all saved and/or took out loans to go to university.”

Well, I just looked up today’s tuition fees for the program I started in 1987. A little over 10x what I paid then.
/////////////////////////

Hey fun a math problem.
‘Figure it out’ mentions that tuition fees are 10X greater for the same program than 22 years ago.
Well 22 years ago minimum wage was about $3.50 and now it is $14.00.
So these days an ambitious wanna be Uni student can save 4X more because the rise in minimum wage.
Hmmm, that still means that it is 2.5X more expensive today than 22 years ago.

The solution. Simple. Work 2.5X harder.

#87 Penny Henny on 04.12.19 at 10:11 am

#46 paul on 04.11.19 at 9:07 pm
interesting budget in Ontario looks like the provincial wing of the party PC put there agenda aside to support the federal side in October what do you think?
i bet the federal liberal camp is looking at it closely
///////////

very interesting theory

#88 dharma bum on 04.12.19 at 10:23 am

#23 Nonplused

But the bright side to this rather depressing reality is that it means that “meaning” in your life is wherever you chose to find it, and it is as personal and unique to you as you chose to make it.
——————————————————————-

…skiing…YES!

Mmmmmmmmm…….skiiiiiiiiing.

https://www.youtube.com/watch?v=Zw2t3tRUA84

#89 dharma bum on 04.12.19 at 10:37 am

The Meaning of Life:

https://www.youtube.com/watch?v=veE1pGEaJig

That was disgusting. – Garth

#90 No lag on 04.12.19 at 10:51 am

conundrum for Mark:

Teranet:
“it was the first March decline in the 20 years of index history.”

If Teranet hpi lags sooooo much, how come it is always up in the spring market?

#91 Chris on 04.12.19 at 11:01 am

Or – you could put 12 G’s into TSFA, figure out how much RRSP you can put in to get a nice deduction and pay the mortgage off over a little longer period. True balance. Most importantly, realize you make pretty good money and should be able to reduce debt and increase investments pretty considerably every year. Do that and you’ll be just fine.

#92 Lolainthebunker on 04.12.19 at 11:14 am

#15 Another Deckchair et al.
And what advice would one have for the ones doing it on their own to begin with already on a single income? Already pooched?

#93 Sovavia on 04.12.19 at 11:15 am

Fear of loss is much greater than desire for gain.

For some, it may be two times greater; for others, it may be ten times.

Just buy a global dividend ETF – exposure to Canada is proportionate there.

#94 Gravy Train on 04.12.19 at 11:17 am

#85 Penny Henny on 04.12.19 at 10:09 am
“Hey fun a math problem. ‘Figure it out’ mentions that tuition fees are 10X greater for the same program than 22 years ago.” Er, um, don’t you mean 32 years ago? I think you lost a decade! As Garth is fond of saying, math is hard! :P

#95 Garth is a Financial Rock Star on 04.12.19 at 11:31 am

04.10.19 at 6:42 pm

“Never sign a BRA. – Garth”

Unless of course it is from one of your adoring fans Captain Garth…

#96 Lost...but not leased on 04.12.19 at 12:14 pm

US Lumber..etc

Someone in an earlier post dicsussed US lumber in Southern uS

We are currently in the aforementioned area…
Going through Alabama, Mississippi, Tennessee and Louisiana etc.
All I can see is harvest of literal toothpicks…the trees are harvested

Logging trucks with loads of softwood..ie pine have bizarre looks.the base of the trees are maybe 10 inches…tapering to zero at top…so you have a fat load at back..skinny load at front. I am assuming these harvested trees end up in pulp mills.

Pine trees don’t achieve much in the way of harvestable volume..the largest I see are in parks, private homes etc

Point is…from what I can see, there is not much in the way of suitable trees to even make 2 X 4’s…hence they need to source good lumber elsewhere…(.which then leads to softwood lumber tradewar?)

#97 Penny Henny on 04.12.19 at 12:27 pm

#71 crowdedelevatorfartz on 04.12.19 at 8:14 am
@#69 IHCTD9
“That’s just nuts, more than I’ve ever paid for gas anywhere.”

++++
Yep.
Carbon tax, Transit Levy, local taxes, etc….oh and every year the oil co’s announce that a refinery of one sort or another is “down for maintenance”.
I expect some sort of “emergency” at another refinery some time in the near future so they can bump the price to $1.75 -1.85.
A friend just bought a 3/4 ton diesel pickup to haul the trailer, dirt bikes and camper around.
That’ll be minimum $150 to fill for what 500kms/tank?

Dont get me started on my govt car insurance.
I renew next week. $1950/year with my 42% safe driving “discount”.
The ICBC fiscal “dumpster fire” that just keeps on sucking money into the vortex of over staffed, over paid slothful, lazy govt employees.
XXXXXXXXXXXXXXX

MOVE

#98 AGuyInVancouver on 04.12.19 at 12:30 pm

#28 expat on 04.11.19 at 7:04 pm
I’m always amazed when people financially engineer things these days…

“Your house is your retirement fund” was the motto for generations. Inflation and the odd bubble gave you 3-10% return annualized on your house every year on average.

Now most people have homes bought at or near top of cycle. More importantly they have mortgages that astronomical…
_ _ _
No, not really. If you look at the two biggest markets, Vancouver and Toronto, prices went nuts at the end of 2014. So that’s only five years of buyers who would be hooped if prices collapse. What percentage of total Canadian homeowners is that? Maybe Garth knows…

#99 Penny Henny on 04.12.19 at 12:36 pm

#92 Gravy Train on 04.12.19 at 11:17 am
#85 Penny Henny on 04.12.19 at 10:09 am
“Hey fun a math problem. ‘Figure it out’ mentions that tuition fees are 10X greater for the same program than 22 years ago.” Er, um, don’t you mean 32 years ago? I think you lost a decade! As Garth is fond of saying, math is hard! :P
???????????????

My calculator is at the shop, they gave me a loaner.

I guess I better check the rest of my math too.

#100 Another Perspective on 04.12.19 at 1:02 pm

Considering they make $250K, If they just fill their RRSP it will be 45K per year. Add 11K for TFSA that brings it to 56K per year. Starting at 180K (RRSP and TFSA) plus annual addition of 56K per year at 7% will be 597K in 5 years and 1.18 million in 10 Years.
Although they bring close to 12-13K take home pay, doesn’t necessarily means they spend it all. They can retire in 10 years if they can bring the spending down to 4K. With a paid off house in 10 years instead of 5, that’s a generous amount to live off of. Also that 50K in RESP with annual addition of 6 K turns into 187K in 10 years. All that is needed is some discipline.

#101 crowdedelevatorfartz on 04.12.19 at 2:23 pm

@#95 Penny Henny
“MOVE”

++++

Thank you for that well though out advice that must have taken you hours to think out.

It never occurred to me……..

I have every intention of moving after I retire.

But thats a few years away yet.

So I’ll just stay here and keep pulling in a six figure salary with excellent performance bonuses ( Bonus was half a years salary last year).

Enough pennies to sink a battleship…… :)

#102 crowdedelevatorfartz on 04.12.19 at 2:31 pm

Gas is at $1.68.9
I put $100 in the work van.
$100 gets you 59.2 liters

#103 Tater on 04.12.19 at 2:36 pm

#89 No lag on 04.12.19 at 10:51 am
conundrum for Mark:

Teranet:
“it was the first March decline in the 20 years of index history.”

If Teranet hpi lags sooooo much, how come it is always up in the spring market?
—————————————————————

It definitely lags. By definition it has to. HPI uses closed sales, the realtor boards report sales agreed to in the month. Thats on average a 60 day lag. HPI also averages over a three month period, another lag.

All of this is by design, and you can see the effect looking at price increase by month on the HPI. Going back to 2009, in the GTA, the average March increase is .28%. May is 1.7% and June is 2.1%.

#104 espressobob on 04.12.19 at 2:52 pm

Jasmine and her husband might consider professional management for their financial affairs?

Just a thought.

#105 How Does It Feel Being Poor ? on 04.12.19 at 3:32 pm

We don’t always get what we deserve – but we often deserve what we get!

#106 Kelsey on 04.12.19 at 3:41 pm

Some games as Vancouver detached house inventory starts following below $1M in the past few weeks. 749 39th Avenue East was originally listed at I believe $1.2M if I remember correctly, then was reduced to $999K. It was now pulled and re-listed at $938K with MacDonald Realty. I wonder how that sort of maneuver impacts reported Real Estate stats?

https://www.zolo.ca/vancouver-real-estate/749-east-39th-avenue

#107 SoggyShorts on 04.12.19 at 3:55 pm

#98 Another Perspective on 04.12.19 at 1:02 pm
Although they bring close to 12-13K take home pay,
*******************************
125K
18% RRSP
22.5K RRSP
no other writeoffs
97K takehome
x2 people
——–
16K per month.

Average Canadian household income:
6K per month

I mean even if each kid is 3K extra per month they are still 4k per month ahead of the average household.

#108 NoName on 04.12.19 at 4:24 pm

#94 Lost…but not leased on 04.12.19 at 12:14 pm
US Lumber..etc

Someone in an earlier post dicsussed US lumber in Southern uS

We are currently in the aforementioned area…
Going through Alabama, Mississippi, Tennessee and Louisiana etc.
All I can see is harvest of literal toothpicks…the trees are harvested

Logging trucks with loads of softwood..ie pine have bizarre looks.the base of the trees are maybe 10 inches…tapering to zero at top…so you have a fat load at back..skinny load at front. I am assuming these harvested trees end up in pulp mills.

Pine trees don’t achieve much in the way of harvestable volume..the largest I see are in parks, private homes etc

Point is…from what I can see, there is not much in the way of suitable trees to even make 2 X 4’s…hence they need to source good lumber elsewhere…(.which then leads to softwood lumber tradewar?)

No trade ware there.

https://www.vox.com/science-and-health/2019/3/4/18216045/renewable-energy-wood-pellets-biomass

#109 The Wet One on 04.12.19 at 4:29 pm

Woo hoo!

Condo sold!

Now, just gotta collect that money!

#110 expat on 04.12.19 at 4:37 pm

The comments about gas prices here is a great discussion.

What most folks don’t realize is that rising gas prices eventually create recessions or worse.

Rising gas prices are the absolute worst immediate hit to the economy there is. There is no hiding, there is no rationing, there is no escape.

People commute, businesses deliver, governments tax.

I guarantee you all one thing. Purchasing power will collapse at this rate and may be the final trigger to collapse retail sales and real estate.

When the middle class stops spending, the economy suffers greatly.

With consumers accounting for 60-70% of G7 economies – any slowing in spending is deadly….

Expect massive restaurant closures, retail bricks and mortar closures, etc.

Those of us old enough to remember know rough things get.

The pillars of your economy are wobbling friends….
Everything is related and when people stop spending…..

well kiss real estate goodbye.

#111 Where's The Money Greed-Morn-eau-? on 04.12.19 at 10:19 pm

1.68.9/L = 7.69 Gallon C$. 57 cents/L is tax in BC. $1.15 in AB.
If you old dogs remember Canadian gallons, can you believe this cost?
Canada is hooped and they’re raping us for everything before TSHTF.
I remember when we were amazed that Europe was paying this amount, now we’re getting it good.
I can see 70’s stagflation coming big time. We’re going to be taxed into oblivion…….What a dire time in MY life it was!
Time for a revolution! Smack those [email protected]#%$es while we still have a pot to piss in.
Otherwise the endless sorrow of 20 years of nuttin’, just survivin’, believe me it’s comin’.
Might as well smoke dope, cuz there’ll be nuttin’ left for the regular worker, toilin’ 2-3 jobs to make rent and food..
And fudge movin’, it’ll come there too. TPTB will see to it.
Viva la revolucion!!!!!!

#112 The Great Gordonski on 04.13.19 at 12:55 am

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#113 Adam on 04.13.19 at 9:11 am

Okay, smart guys on this blog you know that the market is flat from a year ago right? Those “gains” are just a retracement from the correction in the fall. Also historically recessions lag yield curve inversions by 1-2 years so don’t get too excited yet, and in the US the track record is nearly perfect. Im not saying dont be invested in the market but that market hasn’t delivered long term investors any real return in the past year.

Silly comment. A balanced portfolio has given investors a 24% three-year return. If you think in terms of months, you will make stupid decisions. – Garth

#114 meslippery on 04.13.19 at 10:16 pm

#19 Canuckystan on 04.11.19 at 6:16 pm

Not sure this is so cut and dry. How many years left on the mortgage? They say they can pay it off in 5 years, compared to what if they weren’t so aggressive?

Assuming there is maybe 15 years left, that’s $63k in interest at 2.9%. Paying in 5 years means about $20K interest, saving about $40k in interest guaranteed. If they stick with paying it out over the remaining years (again, assuming 15 years), they still have those payments and a $63K interest bill, so they would have to take whatever is left after making those continued mortgage payments to invest enough to generate more than $63K in returns in order to justify not paying off the house earlier.

Bird in the hand + huge psychological benefit of paid off house (yes we are not all Spock) = not the worst thing to pay it off as quick as possible.

A psychological benefit won’t pay you retirement income. – Garth
———–

But borrow against the paid off house..
Interest is tax deductible No??