Aspirations

As mentioned recently, this blog has an archive of 3,410 posts. That’s 2.5 million words, or the same as 42 books (remember those things?). Those posts have attracted over 610,000 comments – another 80 million words. And that doesn’t include the DELETED, the trashed or the ones telling me what to do with my orifices.

For a decade this pathetic site has yammered on about current affairs, housing, the economy, investing, canines and successful marital strategies. Someday it will end. Not quite yet.

No matter how often nor closely the topic is dealt with, there’s one eternal question: should I buy a house? Given the fact real estate is grossly inflated and Canadians have become the most indebted people in the world trying to own some, the best answer is ‘no.’ But alas, few listen. The property cult is too strong. The nesting instinct indomitable. Especially when people hook up and have kids. All of a sudden it’s Norman Rockwell-Brady Bunch-Leave it to Beaver-Little House on the Prairie time. And almost always, there are consequences.

So, here we go again.

Earlier today some dude named Dan asked me his special version of the very same question. It is presented here in the spirit of (a) education and (b) to irritate everyone over 45 without enough money.

Reader of your blog and wanted to get your thoughts on my situation. My fiancee and I are 30 years old currently renting in Toronto for a reasonable price ($2400 for a 2 bedroom). I am a software engineer making $200k and she is an analyst making $70k. Combined, we have assets worth over $700k. It is currently invested in maxed out TFSAs, RRSPs, and overflowing into non-registered investment accounts. We are currently on track to save approximately ~80-90k per year excluding investment growth.

We are getting married next year and I would expect to start having children in the next 2 years. I’m looking at property in Toronto and it makes me sick to my stomach. On one hand I am perfectly content with renting and investing, but on the other some piece of me wants to purchase a home (probably in the suburbs) and build equity. I have aspirations to retire early (at 40 or so).

Wondering if you have advice for someone in my situation. Should we sit out the market and continue saving/investing? Or jump in now?

There you go. Kids making $270,000 a year with $700,000 saved wanting to retire at 40. What should they do?

Simple. Decide what they desire most. Is it marriage, kids, mat leaves and a house? Or to retire in a decade (and do what?). Or have it all?

If they buy a typical detached for $1 million in 905 and put 20% down, the $800,000 mortgage and house costs will total $4,500 a month, and in five years debt will still be $735,000. So they’ll have doubled their occupancy costs, reduced their portfolio by two hundred grand and added over $700,000 in debt. If the goal is to be debt-free five years later for retirement (with two small children), then a big whack of the liquid nestegg would have to be thrown at the house debt.

But, after buying the house they’d still have $500,000 left. If new contributions were to total $80,000 annually for five years, in a balanced portfolio kicking out about 6%, the kids would have $1 million. Upon mortgage renewal they could reduce the debt by half, leaving $650,000. Five years later that would have grown to $1.1 million (if the big cash flow continued), allowing them to cash out the remaining mortgage amount of $320,000. Status: no mortgage and about $700,000. No pensions, either. So income from investments: about $45,000.

Can you live from age 40 to age 85 on forty-five grand a year, putting kids through uni and not go insane? Good luck.

So, if Dan & squeeze went another route – no house, yet luxury rentals – what might be the story?

Hmm. Let’s upgrade that $2,400 a bit – say, to $5,200. That would be enough to rent this pile of bricks in tony Oakville, arguably the jewel in the shapely navel of the 905.

That extra rent would come off the annual savings, reducing it to a little over $46,000. But, of course, the $700,000 portfolio would not be raided and no debt would be added to service. If the same investment returns were assumed as above, then after ten years the kids (now facing retirement) would have no real estate, but a liquid portfolio just shy of $2 million. That should yield an annual income of about ten grand a month, while maintaining the principal amount.

Under the second scenario, not only do these people have three times the amount of money by age 40 (yet no real estate) and three times the income, but they get to live in a house four times grander than the one they could reasonably afford to buy. Their kids get to look down on other children (a big plus) and they can bowl in the foyer. What’s not to love?

Well, as stated here yesterday – life’s about choices. Just stop asking me to make them for you.

137 comments ↓

#1 Leo Trollstoy on 06.12.19 at 3:59 pm

Warren Buffett: US deficits don’t matter

https://www.axios.com/warren-buffett-national-debt-6fa22c24-bc40-4cda-8895-973605ea465a.html

Blog dogs should stop crying about it

#2 AGuyInVancouver on 06.12.19 at 4:13 pm

It’s been asked before, but why hasn’t there been a study on why house prices in Canada are so much higher than the USA?

#3 Yuus bin Haad on 06.12.19 at 4:21 pm

Hi Garth. Sorry, I missed the point – could you repeat that?

#4 dakkie on 06.12.19 at 4:32 pm

Vancouver Real Estate So Bad They Offer AVOCADO TOAST As An Incentive To Buy! (Not A Joke)

https://www.investmentwatchblog.com/vancouver-real-estate-so-bad-they-offer-avocado-toast-as-an-incentive-to-buy-not-a-joke/

#5 Millenial CTO on 06.12.19 at 4:33 pm

P/E of the place I rent in YVR is 44. Living expenses are 8% of my income, all in. Save another 32% of my pre tax income. If SHTF in Canada, I will laugh for a long, long time, since I’ve been calling this crazy for years.

Was glad to hear BOC push back against the real estate lobby wrt. the stress test.

#6 NotLegalAdvice on 06.12.19 at 4:34 pm

“Hmm. Let’s upgrade that $2,400 a bit – say, to $5,200. That would be enough to rent this pile of bricks in tony Oakville”. – G.T.

___________________________

This property is now rented at $5k a month. It was on rent for $4.2k a month last year. What does that say about our rental market? Yes, still cheaper than buying a house and probably a smarter option for most, but still so expensive. What is going on!

#7 N. Dynamite on 06.12.19 at 4:48 pm

They should do whatever they want but I live with my grandma so I don’t pay any rent. My favorite animal is a liger. It’s pretty much my favorite animal. It’s like a lion and a tiger mixed… bred for its skills in magic.

#8 Marc Roger on 06.12.19 at 4:54 pm

Garth, one of my fav things about your posts is your articulation / illustration of opportunity cost. Thanks for what you do.

#9 Joan on 06.12.19 at 4:56 pm

Love your blog and have written to you before! I have to say though that there is one downside to renting – crazy landlords. Especially in 416 where the best rental options are luxury condos owned by private citizens.

My one piece of advice to anyone thinking about doing a long-term rental is: don’t rent from a condo owner, rent from a property service company instead.

Our family’s lucky. We’re financially prudent and very comfortable because we’re well paid, work hard and have simple needs. We grew up middle class and live with the lifestyle we know. But… we just bought a house for a $$$$ because of our landlord. We made the mistake of renting a condo from an individual. While the law is on our side, it’s a huge inconvenience to deal with someone who is mentally unstable. Life’s short. Not worth fighting about your home. So, we bit the bullet and bought a detached in a prime neighbourhood. Hope it’s our forever home, but you can’t predict forever. What we do know is that we value privacy and control in our lives. Sometimes it’s just worth it, even if it’s not a great time to buy!

#10 not 1st on 06.12.19 at 4:58 pm

Yesterday Trudeau banned plastics because Canadians are bad people and are destroying the world.

That same afternoon he gave $35M to NovaChem. What does NovaChem do? Well they make plastics!!! Hmmmm. Oh well he has the nicest hair in the commons.

Only in the upside down progressive world could this make any sense. If you are thinking of voting Liberal please check yourself into nearest mental ward for deprogramming.

#11 Juve101 on 06.12.19 at 5:07 pm

Emotionally speaking, there’s a lot to be said for owning your own place and shaping it to be your cozy home and place of refuge. You don’t get that with rental.
Know yourself. If you’re a family guy and if you can buy a place without committing financial suicide, you should do it.

The emotion is illusory yet the responsibility you have to support your family is real. – Garth

#12 active on 06.12.19 at 5:11 pm

why do these kids write in asking such dumb questions….if they continue to rent at $2400/month and save $80K year, in 10 years they could easily have 2.5M in financial assets….at 50, they could have around 5.5M in assets….all they need to do is keep doing what they’re doing! it’s almost as if they know this already, but want Garth to write about it so they can brag to all the readers how wealthy they are compared to the rest of us peasants.

#13 Cj on 06.12.19 at 5:11 pm

Get a prenup

#14 That dog ... on 06.12.19 at 5:15 pm

better watch out … he may be getting fattened up for a reason.

#15 Bob on 06.12.19 at 5:19 pm

“Someday it will end. Not quite yet.”

At first glance, you seemed to be tired….

Step over here and say that. – Garth

#16 Dolce Vita on 06.12.19 at 5:23 pm

Besides 420, Justin wants to give Cdn’s free drugs (as in your local pharmacy). Here is that rather colorful text Tweet :

https://twitter.com/JustinTrudeau/status/1138889593628106757

Cannot wait to see what stupid things he’ll say about this. As usual, Cdn’s have a comedic sardonic talent to say the least, some selected Replies to that Tweet:

“I propose instead we get rid of our single use Prime Minister.”

“Resign, traitor. Paper water bottle plastic thingy.”

“Ah yes, the election time promises which you’re known to keep.”

“#Liar!”

————————————

They’re going to buy the house Garth. Still, good you gave it your best shot at convincing them otherwise.

You know, ’cause 2X occupancy cost, a -$200K drop in their portfolio + $700,000 in new debt IS ALWAYS trumped by EGO and HOUSE LUST.

Buonanotte.

#17 Shawn Allen on 06.12.19 at 5:23 pm

Some Pipelines would be nice to have. The delayed Trans Mountain pipeline would be great to have as would the canceled Energy East pipeline.

So would an actual Trans Canada road worthy of being called a highway.

There is (very) roughly a 1000 km of the Trans Canada highway that is not a twinned / divided road. From personal experience, driving those sections in Summer will include a good number of stops of 10 to 20 minutes as the two directions share one lane for construction purposes. This is not worthy of being called a highway. The standard for highways in the U.S. and increasingly around the globe has been divided highways and that has been the case for many years.

The pathetic non-divided stretches of the Trans Canada are not so bad as a scenic tourist route. But imagine the lost productivity for trucking and the reduction it must impose on east west trade and business.

After all these years why not twin the thing even if it means a Toll road to pay for it?

New Brunswick twinned 100% some years ago. Why can’t Ontario do so? B.C. has more excuse given the mountains but still it can be done.

#18 Stan Brooks on 06.12.19 at 5:27 pm

https://ca.yahoo.com/news/cra-raids-15-locations-ontario-173809890.html

The sheeple should pay. One way or another.

No tax agent raids for price fixing oligopolies, offshore heavens of french villa owners, just for the stuuuuuuuuuuuuupid sheeple.

#19 Stan Brooks on 06.12.19 at 5:29 pm

Buy hey, Drake has $ 1 million watch

https://ca.style.yahoo.com/drake-watch-raptors-game-195641635.html

#20 Bob Dog on 06.12.19 at 5:32 pm

Show me a software engineer job posting that pays $200K. I may even be willing to move back to Ontario if it’s true.

#21 Matt Tannous on 06.12.19 at 5:36 pm

Garth, houses are definitely expensive in Toronto, when you compare it to the average annual family income.

However, how can one determine whether the price is expensive based on the long term average appreciation of 5% per year? (Ie #standard deviations above the mean).

A house may be expensive, but if it’s worth it, shouldn’t one consider it keeping in mind your rule of 90?

#22 Dolce Vita on 06.12.19 at 5:40 pm

#15 Bob

Try it some time.

I did, once.

How “O Captain! My Captain!” does it day and day out, I’ll never know.

Besides being ever so relevant over these years, Garth has the energy of at least a 100 The Energizer Bunnies…or more AND here’s hoping his:

“Fearful trip is NEVER done”.

Viva Garth.

#23 JSS on 06.12.19 at 5:42 pm

That home is a steal at $5K a month.

#24 Catalyst on 06.12.19 at 5:42 pm

What about the part where they have a paid off 1MM house? They could sell it and be about the same in liquid assets. Plus they get to know they aren’t getting evicted. Buy the burb house!

#25 Jason on 06.12.19 at 5:55 pm

I’m curious how a software engineer makes 200k (at only 30 no less). I’m a software engineer, older than him, 14 years experience, currently a team lead working for a large company in Toronto, and make about 90k. I’m guessing he’s some kind of contractor who juggles multiple short term contract gigs simultaneously, in which case his salary is not very secure and could vary greatly year to year.

#26 yvr_lurker on 06.12.19 at 6:11 pm

Garth, your argument looks sound except for one key omission. You are assuming that the rent charged for this mega-home remains fixed over time or at least slowly changing in line with income. In YVR this has proved to be wildly inaccurate. Rental rates have zoomed forward in recent years far outpacing salary increases. The additional hassle of moving every few years due to sales, renovictions, and whatever, is not to be underestimated. If I was in his shoes I think they are perfectly safe to buy a place and have stability. If this couple can’t afford it, then the rest of the masses are doomed..

#27 Sail away on 06.12.19 at 6:12 pm

I’m a 23 year old techie, married with 3 kids, earning $450K self-employed, and my 21 yo wife earns $160K selling homemade clay figurines on Etsy. Our net worth is $6.7M with average annual portfolio returns for the last ten years of 28%. We rent a 4,000 s.f. mansion for $2,600/mo. on a 10 year lease.

Are we ok? I’m wondering if we should sell all our investments, put it into a house and live off our savings, or keep doing what we’re doing? Just can’t seem to figure it out. Thanks…

#28 HH on 06.12.19 at 6:15 pm

@ 20 and 25

My bet is this guy is a contractor rather than permanent full time employee. I’ve contracted in Toronto financial sector IT for last half a dozen years (as business analyst rather than developer). From my experience of half dozen contracts yearly take in the range of $120K to $200K is totally possible. (Though typical I’ve seen with those contracting for big banks would be closer to $150K. $200K would be a faaat rare outlier at the upper end.)

Yes $80K to low $100-sh at most would be more typical for non-management full timer permanent employee. (And most typical folks I’ve seen in first 2 layers of management make not much more than a typical contractor either.) Which is why I quit that and will never go back.

#29 yorkville renter on 06.12.19 at 6:16 pm

#20 & #25 – I agree… unless he owns the software firm, I’m calling shenanigans.

#19 – as for Drizzy’s watch, its BEAUTIFUL and I would absolutely step over you to get my hands on a Richard Mille watch

#30 Pride Month on 06.12.19 at 6:16 pm

DELETED

#31 not 1st on 06.12.19 at 6:28 pm

As soon as any software engineer starts making 6 figures, the calls go out to India for a quarter price replacement who lives outside of Canada and doesn’t need a pension.

#32 Penny Henny on 06.12.19 at 6:31 pm

#130 TurnerNation on 06.12.19 at 1:42 pm
#50 Keith a burger on the street for 2.75? In Van?
Sounds unlikely when a street hot dog is $4 in Toronto.
///////////////

I think I know the place it’s called ‘Wildcat Burgers’

#33 not 1st on 06.12.19 at 6:41 pm

Carbon tax is working….

https://twitter.com/Carbongate/status/1136863345863249920

#34 HH on 06.12.19 at 6:53 pm

And thinking more on what #25 said about security and stability of contractor pay. My feelings on that are: yes and no… It depends…

Not all contractors survive on multiple short term gigs. In my own experience in my sector (financial) it’s been contracts of working full time 1-2 years with one client a time. Those banking clients tend to go for huge multi-year programs / projects. So it’s fairly steady. More so than most imagine. In my experience you can always count on finding your next gig if you look hard enough.

Then again, given his 200K number is at the upper end of anything I’ve seen, maybe he’s having a spectacular above average fat year, which may be hard to repeat in future.

But heck, what do I know… That’s just my sector/experience. Maybe there other fields in this town where grass is greener.

#35 He Is Right on 06.12.19 at 6:58 pm

#25 Jason – Yep, 90K for 2019 hits the mark for the City of Toronto that surprised me. The solution at hand in your case is to move elsewhere. The salary will be about the same, and your cost of living could be less by 40% in some cases. The quality of life would greatly improve, so what are you waiting for?

#36 Keith on 06.12.19 at 7:05 pm

#32 I was wrong, it’s 2.85.

Wakwak burger.

https://streetfoodapp.com/vancouver/yokabai-burger

#37 What about real incomes? on 06.12.19 at 7:17 pm

How about poorer people who only make around 70k where the rent is close to 2k per month?

Pretty sure that describes most of Vancouver millennial.

The result: housing costs, food, nothing left over for anything else.

Dream life.

#38 bellend on 06.12.19 at 7:18 pm

so software and analyst jobs are permanent? mmm?sandeep is gunna eat software engineers lunch

#39 Flop... on 06.12.19 at 7:20 pm

Was talking to the air conditioning guy at work today.

Stated he charges himself out at $100 an hour.

The things you learn when you’re gasbagging…

M44BC

#40 TorontoSux on 06.12.19 at 7:21 pm

Sure this looks good on paper. But good luck a) finding a rental that suits you and your family needs b) actually get approved to live in the residence as you are competing with others with the same idea that Garth recommends c) having a sane landlord who will actually fix things when needed I not give you a hard time about it d) let you stay in the property and not boot you out because he wants to sell it or move back in himself

#41 Vancouver on 06.12.19 at 7:25 pm

I trade penny stocks by day and play video games for cash wins at night. My spouse sells trinkets at Kits beach out of the wicker basket on the front of her bike. My current income is 378k per year and my spouse is doing about 98k per year. We have a total cash savings of 900k at age 27 now.

We rent a 1 bedroom in a Kitsalano social housing complex to keep things on the cheap. Should we buy an East Vancouver special for 1.6M? Thanks.

#42 Reality is stark on 06.12.19 at 7:30 pm

Just got my property tax bill. Up another 10%. Pure insanity.
Doesn’t matter what the problem is, the solution is always more taxes. Inflation rate is irrelevant.
No growth for the last two quarters and these imbeciles want 10% more.
When the boss says you better find a way to reduce costs by 5% because the market is slowing is your answer to bill your customers 10% more and see what happens?
Customers leave and you get fired so you don’t try that trick.
Politicians are arrogant drunks.

#43 Flop... on 06.12.19 at 7:32 pm

Bit of a long one but it the sort of topic that gets discussed on here all the time so we will do the whole hog…

M44BC

“Visualizing the State of Health Around the World.

No two countries are the same when it comes to healthcare spending and outcomes. Our newest visualizations illustrate three key measures of health in each country: healthy life expectancy at birth, current health expenditure (CHE) per capita, and current health expenditure (CHE) as a percentage of gross domestic product (GDP). All monetary values are expressed in USD.

In creating these visualizations, we analyzed data from the World Health Organization’s (WHO) Global Health Expenditure Database and the World Health Statistics report for Healthy Life Expectancy. Here’s what we found region by region.

The visualizations show all the countries that have data available for healthy life expectancy and current health expenditures. The x-axis shows the healthy life expectancy at birth, while the y-axis shows CHE per capita. Each individual country is represented as a flag in a circle, and the shade of the outline of each circle indicates health expenditures as a percentage of GDP (with darker shades of pink representing higher CHE as a percentage of GDP).

Top 3 Countries by Healthy Life Expectancy in the Americas

1. Canada – 73.2 years
2. Costa Rica – 70.9 years
3. Cuba – 69.9 years

In the Americas, the U.S. has the highest health expenditures when measured per capita ($9,870) and by GDP (17.1%). The Americas also have the greatest variation in CHE per capita, ranging from $38 in Haiti to $9,870 in the U.S. With rising premiums and more than 27 million Americans living without health insurance, concerns about healthcare are growing stronger. As a result, some educational institutions, policymakers, and media outlets are taking a closer look at the state of healthcare in other countries to see how the U.S. measures up.

Top 3 European Countries by Healthy Life Expectancy

1. Spain – 73.8 years
2. Switzerland – 73.5 years
3. France – 73.4 years

In general, countries in Western Europe have higher healthy life expectancies and higher healthcare expenditures per capita than countries in Eastern Europe. According to the World Health Organization data, Switzerland has the highest healthcare expenditures in Europe, at $9,836 CHE per capita and 12.3% CHE as a percentage of GDP. Europe is also the only continent in which healthy life expectancy in each country is age 60 or older. While most countries have similar statistics for CHE per capita and CHE as a percentage of GDP, a few countries buck this trend. For example, Luxembourg has a high CHE per capita at $6,271, but the CHE as a percentage of GDP is only 6.2%. Conversely, Moldova has a low CHE per capita at $171, but a high CHE as a percentage of GDP at 9%.

Top 3 Asian Countries by Healthy Life Expectancy

1. Singapore – 76.2 years
2. Japan – 74.8 years
3. Republic of Korea – 73 years

Highly industrialized east Asian countries like Japan and South Korea have high healthy life expectancies and high healthcare expenditures per capita and by GDP. By contrast, countries in south Asia and central Asia tend to have lower life expectancies and lower health expenditures per capita. Countries in the Middle East, like Qatar and the United Arab Emirates, have high health expenditures when measured per capita, but lower when measured by GDP.

Top 3 African Countries by Healthy Life Expectancy

1. Tunisia – 66.3 years
2. Mauritius – 65.8 years
3. Seychelles – 65.7 years

Most African countries have a life expectancy under the age of 60. Factors such as the prevalence of the AIDS epidemic negatively affects life expectancy rates in east and sub-Saharan Africa. The African countries with the highest life expectancy tend to be located in the north or off the coast.

Top 3 Australian/Oceania Countries by Healthy Life Expectancy

1. Australia – 73 years
2. New Zealand – 72.8 years
3. Samoa – 66 years

Australia spends about as much on CHE per capita than all other countries in the region combined. Most countries in Oceania spend less than $400 on CHE per capita and have a CHE as a percentage of GDP under 6%. Papua New Guinea only spends $55 on CHE per capita, less than 3% by GDP.”

Visualization

https://howmuch.net/articles/the-state-of-worlds-health

#44 IT Contractor on 06.12.19 at 7:34 pm

200k? Obviously not FT, not likely even for a contractor, bs imo

#45 Please advise on 06.12.19 at 7:47 pm

I’m a 29 year old fund manager earning $950k plus bonuses. My wife is 28 and runs a dog walking business netting $175k. We are currently renting a bachelor apartment for $900/m.

We have $5.5M saved, plan on having our second child next year (first one currently sleeping in the renovated closet space) and are thinking about moving out of the bachelor apartment, perhaps buying something in the burbs.

We think it might get too crowded after our second child if we stay in the bachelor apartment, but we think it might be worth it in order retire at 35. Please advise.

#46 Bob Dog on 06.12.19 at 7:48 pm

Checked Glass Door. Google max salary for engineer in Toronto is 204K + ~30K annual bonus.

I interviewed at google once and face planted from stress.. Not many can clear the bar.

Try this one.

Write an algorithm to travers a binary tree (Not BST) and modify leaf node values so that all root to leaf paths add up to a given value.

You have 15 mins.

#47 Mean Gene on 06.12.19 at 7:56 pm

Hypergamy worked out well for someone, so much for the concept of equal partners.

#48 FreeBird on 06.12.19 at 8:00 pm

#38 bellend on 06.12.19 at 7:18 pm
Agreed (albeit minus the name). If one loses a job they may get another but what if it takes months and what if it’s during mat leave? Also Im not sure maintenance, insurance, and any updates (new hardwood etc) were factored in or micro unexpected medical/health issues. All of this plus much more could/would eat into the planned annual feeding of the nest egg. We know a couple same age who’s first is due Sept. They earn maybe $70K combined and have fairly secure jobs they both like. Unlike the email couple they did the math and saw renting was far better. They found a great townhome, updated pre move in, fenced in back yard, close to a park, free parking, and good area. It’s managed professionally. They’re also finding great deals online where and when they can for the new potat. They’re ignoring pressure to buy a house and lots of new things. They can become new parents minus money stress just long nights and lots of laundry! We’ve helped with some money advice and numbers. Gives me hope.

#49 just a dude on 06.12.19 at 8:23 pm

Sir Garth, you have the patience of a saint.

I can’t believe how many times you’ve repeated your sound message re: life choices and implications. On occasion I attempt to share the same message in my tiny circle of influence (even if i’m 1/1000 the wordsmith you are) yet I’m always met with blanks stares. I keep trying though …

Thank you for what you do.

#50 Must Be Nice on 06.12.19 at 8:28 pm

The House just approved a Parental Leave Program whereby the MP gets a year off with full pay for having a newborn. Men were not left off the gravy train either, because there must be equality. They can just adopt a child, and then we have no discrimination. Sounds all normal to me.

#51 Captain Uppa on 06.12.19 at 8:29 pm

LOL @ all the “please advise” letters in this comment section.

#52 Captain S’Uppa on 06.12.19 at 8:36 pm

Sup.

I really need some help yo. I make dope beats on my Dell laptop and take in about 400K a year. My wife runs a successful pyramid scheme business that nets her about 300K per year. We’re looking to start a family and wondering if we should buy a pad in the GTA.

Through right budgeting and saving our topped up TFSAs and RRSPs are worth about 11.2 Billion.

My wife is nesting hard yo! But every time I look at the home prices in the GTA I wanna barf.

Can we afford to buy a home in the GTA?

Much respect. Peace!

#53 Leo Trollstoy on 06.12.19 at 8:37 pm

So many blog dogs so jelly

Salty tears taste so good lol

#54 Capt. Serious on 06.12.19 at 8:47 pm

#20 Bob Dog on 06.12.19 at 5:32 pm
Show me a software engineer job posting that pays $200K. I may even be willing to move back to Ontario if it’s true.

He’s probably Amazon or Google. They would pay in that range. It’s a freaking bargain for them compared to Bay Area and Seattle compensation.

#55 Vampire Studies (doctoral thesis) on 06.12.19 at 8:51 pm

Enjoying the comments @27, 41 etc….

25 Jason – consider some of the advice being given.
It’s not worth it. You are doing it wrong.

#56 Where's The Money Hidden Greedeau, France? on 06.12.19 at 8:54 pm

Re: #2 AGuyInVancouver on 06.12.19 at 4:13 pm
It’s been asked before, but why hasn’t there been a study on why house prices in Canada are so much higher than the USA?
+++++++++++++++
Because they go to jail for a long time when they’re caught being a criminal. Not here, especially white collar crimes.
Bought and paid for by the Triads, Mexican cartel.

#57 Remembrancer on 06.12.19 at 8:56 pm

#44, #31, #29, #28, #25, #20 and whoever else…

Guys, go back to Fortnite. You need to be more than a WordPress slinger or doing dev ops at a bank (not that there’s anything wrong with either) to get to $200K territory…

First one’s free…

https://www.amazon.jobs/en/jobs/816165/software-development-engineer-iii

posted on indeed.ca with ranges between $121K – $200K for a hire, do your own searches after that…

Let’s talk more about why any GTA housing posts ignore the East Lakeshore corridor, sure $1M & up+ houses there too, but many under that? Or is Oakville / Richmond Hill McMansions the only aspirational RE in GTA worth talking about?

#58 Tony on 06.12.19 at 8:59 pm

Those outcomes only happen in a perfect world. As true inflation outpaces wages by a 4 to 1 ratio less and less people will have money even to buy a car let alone a house. Every next generation will be smaller than the last and much poorer. Soon the rich will become the new poor as the tax man will only have the rich to go after.

#59 Where's The Money Hidden Greedeau, NovaChem? on 06.12.19 at 9:16 pm

Re: #18 Stan Brooks on 06.12.19 at 5:27 pm
https://ca.yahoo.com/news/cra-raids-15-locations-ontario-173809890.html

The sheeple should pay. One way or another.

No tax agent raids for price fixing oligopolies, offshore heavens of french villa owners, just for the stuuuuuuuuuuuuupid sheeple.
+++++++++++++++++
For the price fixing oligopolies you must mean Galen Weston and the $385 MM he owes us taxpayers that he was found guilty in CRA court last August, that was mysteriously whittled down from $480 MM.
He’s appealing.
History: caught setting up a bank in Barbados and writing off huge expenses etc., but the catch was he was the only customer!
https://taxinterpretations.com/content/505040

#60 Tony on 06.12.19 at 9:17 pm

Re: #43 Flop… on 06.12.19 at 7:32 pm

The article is about 40 to 50 years behind on the life expectancy rates. It’s dated 2019 but these life expectancy rates are from the 1960’s or 1970’s.

#61 Millennial Mayday on 06.12.19 at 9:21 pm

Thanks for the comments Remembrancer and IHCTD9.

Garth, the situation in today’s post is borderline comical. Very few software developers are making 200k in Toronto. Considering even Payscale says the salary range is 50-90k with a median of 69k.

I know a lot of Developers and do not know any cracking 100k. Not even close.

#62 reynolds531 on 06.12.19 at 9:23 pm

Want to thank all the commenters tonight for the Pepsi in my nose.

#63 David on 06.12.19 at 9:37 pm

If you must absolutely own, the smart thing would be to buy a multi unit rental. Buying a single family house in Toronto with this type of nest egg is insane. The nest egg will appreciate. The house will not (at least not nearly as much especially after carrying costs and Land Transfer Tax). And kids destroy free cash flow.

#64 Linda on 06.12.19 at 9:45 pm

For sure, the blog example of the day can have it all – just rent the tony Oakville digs, continue to build the assets & be set to retire at the desired age. As for property, as mentioned in earlier blog posts there are places in Canada where housing is much more reasonable in price. So the newly retired can still be home owners. Whether they buy now or wait until actual retirement is up to them. Heck, they may even choose to retire abroad to warmer climes. With the type of money mentioned, one of those 1 Euro properties for sale in Europe would be well within their budget.

#65 James on 06.12.19 at 9:55 pm

Did I miss something, or did we forget to add the value of the home into scenario 1? If the home is sold for even $1M (assuming zero appreciation), then they have $1.7M.

I know this is less than the $2M in scenario 2, but still comparable. If the house appreciates even 10% over the time frame, it’s exactly the same.

#66 Out Of Work CEO, Will Travel on 06.12.19 at 9:57 pm

Comments from Sail Away; Vancouver and Please Advise totally rock. Had no idea how fun this blog would morph into? Yeah the dog photos are cutsey and silly but these fund managers making $950k and their wife dog walkers making $175k living in a bachelor for $900 a month with the baby in the closet….It’s hard to stat depressed if you read this blog. Thanks. Mr. T.

#67 cramar on 06.12.19 at 10:02 pm

A good software engineer has to have a logical mind. He says he “wants to purchase a home to build equity.” What in the name of sanity do you call having a $700k portfolio and increasing yearly savings by over $80k? Not building equity?

#68 John on 06.12.19 at 10:07 pm

@Garth: you often write phrases like “yield an annual income of about ten grand a month, while maintaining the principal amount“. Which is lovely, but what about inflation? Surely inflation will slowly but surely erode the buying power of the principal?

Thx!

#69 MF on 06.12.19 at 10:07 pm

56 Where’s The Money Hidden Greedeau, France? on 06.12.19 at 8:54 pm

Or, alternatively, in a much less cynical and paranoid view: we didn’t have a big reset in 2008 like the US did.

We also don’t have as many cities, meaning more of our population lives in the main big cities, which drives up demand.

Finally, ZIRP/NIRP/40 year mortgages/CHMC/FOMO/bank of mom and dad/TNLATB.

It’s pretty obvious.

MF

#70 crowdedelevatorfartz on 06.12.19 at 10:16 pm

@#23 Sail away
“Im a 23 year old techie, married with 3 kids, earning $450K self-employed, and my 21 yo wife earns $160K selling homemade clay figurines on Etsy. Our net worth is $6.7M with average annual portfolio returns for the last ten years of 28%.
+++++

Ahahahaha Good one.
How’s the “leagalization thing” workin out?
Reminds me of the letters to the Editor in the 1980’s

“Dear Penthouse,
You’re not going to believe this but one night when I was riding the elevator…….”

#71 akashic record on 06.12.19 at 10:49 pm

What will be the rent on the pile of brick in 10 years?

#72 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.12.19 at 10:58 pm

Blues 4 – Bruins 1

Pity the sobbing Toronturds and GTAholes tonight, as St. Louis shows what it takes to overcome a 50 year Stanley Cup drought, something Toronto just cannot do.

Toronto fans are bewildered and distressed. Yet again.

Face it Toronturds, the Rapt Whores really don’t matter to you. They are just a frat party distraction from your miserable mediocrity in all things. Especially Canada’s national treasure, hockey. They are a 905 phenom at best, exposing and exemplifying the cultural divides in your crappy fifth rate city that you try not to acknowledge.

The Make Believes are what matters to you.

And they suck. Like everything about your city, your region.

You embarrass Canada and the game of hockey itself.

You are pathetic losers.

Now go waste some money on a slanty semi or a flimsy glass-walled condo and tell yourselves how smart you are, you idiots.

#73 Y m of 3 on 06.12.19 at 11:02 pm

But safe withdrawal rate of 4% on $2mil would be $80k/yr, how does one get $120k/yr, right?

#74 crowdedelevatorfartz on 06.12.19 at 11:03 pm

@#45 Please Please Please

“We think it might get too crowded ……”

++++++

Its never too crowded……

https://www.youtube.com/watch?v=vruy2GRUsV8

#75 Smoking Man on 06.13.19 at 12:42 am

The jinx, when the millenials cheered when Durant hurt his foot.

Talk about lighting a fire under your opponents ass.

Dr Smoking Man
PhD Herdonomics

#76 Stan Brooks on 06.13.19 at 12:50 am

#46 Bob Dog on 06.12.19 at 7:48 pm
Checked Glass Door. Google max salary for engineer in Toronto is 204K + ~30K annual bonus.

I interviewed at google once and face planted from stress.. Not many can clear the bar.

Try this one.

Write an algorithm to travers a binary tree (Not BST) and modify leaf node values so that all root to leaf paths add up to a given value.

Traverse all possible paths and write them down as individual lists.

https://www.geeksforgeeks.org/given-a-binary-tree-print-all-root-to-leaf-paths/

i.e.
A–>B–>C–>D–>E (E is leaf node)
A–>B–>F (F is leaf node)

for each list calculate the sum of all non-leaf nodes (if list size is n, these are n-1 in number, i.e A+B+C+D in the 1st list), assign to each leaf node a value that is: magic total number (S) – that sum (i.e E=S-(A+B+C+D))

repeat for all lists.

1st grade IT student task.

You have 15 mins.

——————————————–

Traverse all possible paths and write them down as individual lists.

https://www.geeksforgeeks.org/given-a-binary-tree-print-all-root-to-leaf-paths/

iterate through lists and for each create a vector that contains 1 if a node is present, 0 if it is not.

create a matrix from those vectors that multiplied by the vector of the (variable) values of the nodes gives a vector of the desired magic numbers.

dimensions of the matrix: m x n with n being the size of the longest list, m – total number of (distinct) nodes.

i.e.

A B C D E F x a = S(magic total number)
1 1 0 0 0 0 b S
1 0 0 0 1 1 c S

…….

resolve it.
(it becomes matrix of m rows, n variables, n being the length of the larger list), m = number of nodes.

One simple solution would be all non leafs nodes zeroes, all leaf – containing the value of the magic number.

1st grade student IT task.

Interview question for 45 k starting salary job.

#77 Stan Brooks on 06.13.19 at 12:51 am

The second part was for the case where you can change non leaf nodes.

#78 Spectacle on 06.13.19 at 12:56 am

#46 Bob Dog on 06.12.19 at 7:48 pm
Checked Glass Door. Google max salary for engineer in Toronto is 204K + ~30K annual bonus.

I interviewed at google once and face planted from stress.. Not many can clear the bar.

Try this one.

Write an algorithm to travers a binary tree (Not BST) and modify leaf node values so that all root to leaf paths add up to a given value.

////////////////// ugh ///////////////////

Plan your work & work your plan::

If you are doing interviews with tech giants like Amazon, or Google, It is good that you take a look at Algorithm Design Manual by Steven Skiena, that will help you to develop a solution for new algorithmic problems based on your knowledge of them.
Prepare & plan, why we come here! : ) soo sleepy after reading this one.

( my total plageurism, copy paste here)

#79 Al on 06.13.19 at 1:03 am

They have an after tax income of 186k a year. 29k is rent. They save 80k. They’re planning to spend 77k a year after rent? They could’ve been FI by now or very soon with that take home pay if they didn’t plan to spend like drunken sailors.

#80 Smoking Man on 06.13.19 at 1:17 am

Son number 1 , best closing ratio in history of a multi national company. Yet he cant get over a broken heart.

He married a 3rd wave man hating lunatic that was after my loot. Wasent going to happen.. I have a degree in Herdonomics

He’s got talent. Hes at rock bottom right now, only in his mind.

Let’s see if he can make a come back..

Before the bitch stopped his singing and creativity , these are some if his songs.

Enjoy

https://youtu.be/R3iX0SUQpPg

Go Ryan, figure it out. Or no trophy for you.

#81 Fortune500 on 06.13.19 at 3:11 am

They say they are ‘on track’ to save $80,000 – 90,000 per year. This suggests that before that, they were not saving this figure. We also presume that they went to university. The average graduation age from undergad in Canada is 22.

Unless they were both super early graduates and went immediately in to high paying jobs, where did the $700,000 come from? Yes, it is possible they saved and invested it, but there are missing pieces here.

Garth often puts these stories up and never asks the obvious question. We are all trying to learn something so we can better ourselves. So how was that possible? Was it a big real estate play? Family money? Bitcoin? All equities early?

Enquiring mines want to know. That, and I think it often dissuades some readers from the idea that they can reach financial success themselves. Whatever is going on here, it seems odd.

As one Millionaire reader to the non-millionaire reading, it is HARD to get here. It takes a LOT of sacrifice for most people, a lot more time than suggested here regularly, and a little luck. This is not typical, and you can do it. If we know how they did it, maybe you could get there sooner.

#82 The Great Gordonski on 06.13.19 at 4:14 am

Laugh when I say “Software” and Engineer” on the same sentence. Real engineers get pissed after taking on a real education.

https://business.financialpost.com/opinion/the-plot-to-murder-canadas-resource-sector-is-one-script-hollywood-wont-touch

Meanwhile, reading commentary about violent revolution across the social. Canada made up of Quebec and Newfie would be a joke. Let’s all welcome the separation of Western Canada from the eastern albatross.

#83 Howard on 06.13.19 at 6:28 am

#12 active on 06.12.19 at 5:11 pm
why do these kids write in asking such dumb questions….if they continue to rent at $2400/month and save $80K year, in 10 years they could easily have 2.5M in financial assets….at 50, they could have around 5.5M in assets….all they need to do is keep doing what they’re doing! it’s almost as if they know this already, but want Garth to write about it so they can brag to all the readers how wealthy they are compared to the rest of us peasants.

——————————————

This.

THIS.

100% this.

That is exactly the motivation behind most of these 0.5% letter writers.

#84 Howard on 06.13.19 at 6:38 am

#31 not 1st on 06.12.19 at 6:28 pm
As soon as any software engineer starts making 6 figures, the calls go out to India for a quarter price replacement who lives outside of Canada and doesn’t need a pension.

—————————————-

Isn’t globalism great? Still waiting to see the much vaunted “benefits” trickle down to native-born Canadians. 40 years of globalism and still waiting.

Seriously? Your whole standard of life depends on trade, the free flow of capital and technology. That’s called ‘globalism’. – Garth

#85 jess on 06.13.19 at 7:36 am

“This study illustrates the state of housing affordability for younger Canadians, in every province and the major cities within them.It shows that Canadians between the ages of 25 and 34 continue to straddle a massive gap between housing prices that remain at near-historic levels in key parts of the country, and earnings for this age group that have been relatively flat, if not down, for several decades. Despite recent nominal declines in housing prices compared to previous years, the gap between the cost of owning a home and the ability of younger Canadians to afford it is still dramatic. Data in this report show that average home prices would need to drop by nearly 50% for a typical person aged 25-34 to afford an 80% mortgage on average-priced homes. Alternatively, earnings would need to double for this generation to afford the same home.”

….in ontario
Average home prices would need to fall $307,000 – over half of the current value – to make it affordable for a typical young person to manage an 80% mortgage at current interest rates. • Or typical full-time earnings would need to increase to $109,000/year – more than double current levels. Based on the last decade, actual earnings are expected to be flat. • It takes 15 years of full-time work for the typical young person to save a 20% down payment on an average priced home – 10 more years than when today’s aging population started out as young people.

The study, called Straddling the Gap, looked at the state of housing affordability in every Canadian province and their major cities.

https://d3n8a8pro7vhmx.cloudfront.net/gensqueeze/pages/5293/attachments/original/1560279096/Straddling-the-Gap-2019_final.pdf?1560279096

#86 NYCer on 06.13.19 at 7:43 am

I assume we simplified the math a bit not including potential taxes? Or Real estate gain/loss or value after 10 years or even longer if they plan to stay there post-retirement (for kicks).

The salt in the comments about income is hilarious. There are people who make lots of money out there, deal with it. As for their savings, $80k-$90k is pretty low so they must be spending quite a bit but hey, as long as they can reach their goal, they should live too while they are young.

We save about $80k a year but don’t make as much as them, but we def spend a lot less than them ~$4.8k a month all in.

#87 MF on 06.13.19 at 7:45 am

#82 The Great Gordonski on 06.13.19 at 4:14 am

Lets see. This poster:

1) Enjoys the benefits of Canada, it’s peace/prosperity and opportunity (dependent on trade) to amass a nest egg

2) Enjoys the free movement of people by leaving for a third world country 100% dependent on trade and the free flow of people in the form of tourism to survive

3) Trades stocks of companies 100% dependent on the free flow of trade and people for profit as a job

4) now comes on here to post about the destruction of our borders

Someone please tell this poster he is the biggest globalist of all. The fact he continues to “warn” us about globalism is a hilarious joke.

MF

#88 Remembrancer on 06.13.19 at 7:50 am

#82 The Great Gordonski on 06.13.19 at 4:14 am
Laugh when I say “Software” and Engineer” on the same sentence. Real engineers get pissed after taking on a real education.
——————————–
I take it you are neither? Do you ever have anything interesting to say?

#89 Tater on 06.13.19 at 8:06 am

#21 Matt Tannous on 06.12.19 at 5:36 pm
Garth, houses are definitely expensive in Toronto, when you compare it to the average annual family income.

However, how can one determine whether the price is expensive based on the long term average appreciation of 5% per year? (Ie #standard deviations above the mean).

A house may be expensive, but if it’s worth it, shouldn’t one consider it keeping in mind your rule of 90?
—————————————————————

So if you assume 5% annual price appreciation (seems high to me, but fine) and start in 1973 in the GTA, and project each year to today, you get a low of 360k and a high of 1.1m(based on extrapolating the ’89 peak) with an average of 640k and sd of 150k. So, you could make a case that anything between 340k and 950k is reasonable.

This gives an upside of 20% with downside risk of 57%.

So, with leverage greater than 2 to 1, this trade has the potential to be a 100% loss.

At the much more typical 4 or 5 to 1 leverage, could be an absolute widow maker.

But, either of those extremes seems unlikely. I’d expect a return to that 640k average area. Which would be a peak to trough of 25% or prices back to 2007 levels. I’ll be quite happy if I’m wrong, though.

#90 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.13.19 at 8:11 am

Reality check.

Toronturds have woken up, trembling in fear and doubt this morning.

Another Stanley Cup without them. Soon the word Toronto will be removed from that trophy entirely.

And complete, paralyzing worry has now taken hold of Rapt Whore fans. Karma is not on their side.

It does not matter, either way. Your city has been exposed for what it is.

Get out while you can. Move to livable, affordable, social and reasonable Canada.

Toronto is going down the toilet. Leave.

Life’s about choices, like our host says.

#91 Remembrancer on 06.13.19 at 8:12 am

#81 Fortune500 on 06.13.19 at 3:11 am
They say they are ‘on track’ to save $80,000 – 90,000 per year. This suggests that before that, they were not saving this figure. We also presume that they went to university. The average graduation age from undergad in Canada is 22.

Unless they were both super early graduates and went immediately in to high paying jobs, where did the $700,000 come from? Yes, it is possible they saved and invested it, but there are missing pieces here.

Garth often puts these stories up and never asks the obvious question. We are all trying to learn something so we can better ourselves. So how was that possible? Was it a big real estate play? Family money? Bitcoin? All equities early?
———————————————–
True, these lack the back story most of the times, but baring serious family money, in which case why the hell are they posting to this blog and not talking to the family trust advisor who’s making boatloads off great grandma’s money, the boost may have been insurance payouts for untimely parental deaths, inheritance in a small family without relatives or siblings sucking up the proceeds or you know, plain good old hard work, a bit of luck and not spending every last dime they make…

1) Outside of a silver spoon growing in the womb as part of conception or a windfall, education (what kind and what you do with it) is still the greatest differentiator other than some incredible genetic talent lottery win such as athletic ability, performing arts or sci-tech genius with a side helping of entrepreneurship.

2) It wasn’t Bitcoin or 2019 house flipping or jet boring gold mining for that matter, unless you get a cable TV show and can use your production company for all your expenses…

#92 Tater on 06.13.19 at 8:20 am

#47 Mean Gene on 06.12.19 at 7:56 pm
Hypergamy worked out well for someone, so much for the concept of equal partners.
————————————————————-

Best part about people who talk about hypergamy is you immediately know they are some combination of dumb, fat, broke and entitled.

#93 The Great Gordonski on 06.13.19 at 8:22 am

#84 Howard….the “software engineer” making $200K in Canada is a myth….doesn’t happen….ask the City of Vancouver who splashed out the very real statistic provided by employers that the average income for such was just below $57,000. The cities package written for Amazon showed that BC tech workers were the lowest paid in North America. They bragged about it.

The “Bangalore” phenom is exactly why globalism us evil and provides nothing for Canadians.

But even when salaries eclipse the $100k level in the US the position is quickly ‘Bangalored’ where a similar position is paid $30K, a good middle class salary in India.

#94 crowdedelevatorfartz on 06.13.19 at 8:27 am

@#82 the great gorgonski
“Let’s all welcome the separation of Western Canada from the eastern albatross.”
*****
If I may paraphrase former Premier Ralph Klein in one of his more sober moments.

After you “send all the creeps and bums” back East…..who will do all the work….?

#95 Sail Away on 06.13.19 at 8:32 am

#84 Howard on 06.13.19 at 6:38 am

Isn’t globalism great? Still waiting to see the much vaunted “benefits” trickle down to native-born Canadians. 40 years of globalism and still waiting.

————————————————–

“Neither a wise man nor a brave man lies down on the tracks of history and waits for the future to run over him”

Maybe you should stop waiting. Just saying.

#96 crowdedelevatorfartz on 06.13.19 at 8:41 am

@#145 Just a Rebel Rebel( your face is a mess)
“Lots of people seriously discussing which swath of land we will take across BC to get our resources to the coast. The difference, were spoiling for a fight, Trudeau thinks we won’t. Just watch.”

+++++
You oil pumping, gopher eating, stubble jumpers are amusing in a school yard kinda way.
You actually believed electing Jason Kenny would make a difference.

After you declare “War” on BC and invade ( Like BC could tell the difference with all the Albertan trucks driving around here now).
You wouldnt know who to fight because half the population would welcome you and the other half would want to get you in a tent a la Broke Back Mountain…

Just keep working here (paying our socialist taxes) and sending home those cheques to pay the mortgage and the truck payments…..

#97 Howard on 06.13.19 at 8:53 am

Seriously? Your whole standard of life depends on trade, the free flow of capital and technology. That’s called ‘globalism’. – Garth

——————————————-

It is? According to what study?

Standard of living, not to mention happiness, for the middle class was higher in the 60s and 70s before globalism took off.

Globalism is good for neo-stateless oligarchs seeking cheap labour. It is not good for the vast majority of citizens in developed countries. I can see how it is favourable to the 3rd world, but why should Canadians care about them? I mean no malice in saying that, but their problems are not our problems.

#98 6% on 06.13.19 at 8:55 am

You would have to check the math but my guess is 6%.

#73 Y m of 3 on 06.12.19 at 11:02 pm

But safe withdrawal rate of 4% on $2mil would be $80k/yr, how does one get $120k/yr, right?

Why 4%? That is hardly the portfolio return a 40-year-old should expect. – Garth

#99 go away already on 06.13.19 at 9:25 am

@#72 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.12.19 at 10:58 pm
Blues 4 – Bruins 1

Pity the sobbing Toronturds and GTAholes tonight, as St. Louis shows what it takes to overcome a 50 year Stanley Cup drought, something Toronto just cannot do.

Toronto fans are bewildered and distressed. Yet again.

Face it Toronturds, the Rapt Whores really don’t matter to you. They are just a frat party distraction from your miserable mediocrity in all things. Especially Canada’s national treasure, hockey. They are a 905 phenom at best, exposing and exemplifying the cultural divides in your crappy fifth rate city that you try not to acknowledge.

The Make Believes are what matters to you.

And they suck. Like everything about your city, your region.

You embarrass Canada and the game of hockey itself.

You are pathetic losers.

Now go waste some money on a slanty semi or a flimsy glass-walled condo and tell yourselves how smart you are, you idiots.\
____________________________

quit acting like a child.
You are a blight on this blog.

#100 Donna Quintal on 06.13.19 at 9:39 am

I am working in a restaurant for 20 years from just out of high school. My uncle owns it and sold to another investor 3 years ago. I never made much more than minimum wage, usually 10% higher, $14.40 currently. I don’t get to keep tips but get 55 hours a week plus overtime after 40 hours and a $50 a week bonus pay. I make a decent living of $50,000 to $51,000 a year.

I am not jealous of others and do not believe in this entitlement mentality. I am very grateful for what I have and have achieved and continue to achieve. An affordable 650 square foot rental above the restaurant for $900 a month+ utilities and own a paid for car 8 years old, no debts and socked away a pretty good chunk of money in 20 years.

My RRSPs’ and TFSA’s combined total balance is nearing $411,000 in the next few weeks. Canadians and Canadian governments need to start taking more responsibility with their lives especially when it comes to debt levels.

#101 PoorEngineer on 06.13.19 at 9:54 am

Dear Garth,

Can we please ban “50 YEARS OF MAPLE LEAF INCOMPETENCE!”? I’m sure I can get a lot of blogdogs to back me up.

He brings nothing to this blog. Every time a Toronto team loses, he comes here and trashes Toronto. While I’m not an avid Toronto supporter (not my cup of tea), I do realize that is my personal choice and there are people who actually love living in Toronto. Good for them. But this person is ridiculous. Judging by his sadistic comments, my guess is his crush/gf/wife ended up leaving him for somebody from Toronto. I don’t think he realizes he is the problem….

Also, on today’s topic. This guy is playing you Garth. I’ve been working around hundreds of SW engineers for a decade. Few make 100K, and those are Firmware / FPGA engineers. I would say the cut-off for SW engineers is around 80K…. once that limit is reached, the job gets shipped to India. On top of that, SW engineers are a dying breed as eventually AI will take over, who would be able to write code way faster, 24/7, and with no bugs. So even if this guy makes over 100K, his days are numbered. Yes, he will probably retire by 40, but it won’t be his choice.

#102 The Great and Wonderfully Rich and Handsome Gordonski on 06.13.19 at 10:38 am

If you’re not already rich in this country you likely qualify as a low IQ moron. Did you not get an education of any kind? Is it so hard to use a device or go to a public library and learn the skills you don’t have? Good Lord people, wake up or stop breeding. What are you doing with your life? Morning and bitching won’t help. Questioning someone else’s earning success or lifestyle won’t help you out of the hole you’ve dug for yourself. I hear living in your vehicle is cool again. Seriously, stop being such a loser. When I discovered that no job or profession outside finance would make me rich I focused on finance. If you’re too lazy and stupid to read the signs all around you then seriously, stop kvetching about those that do. Of course there’s the rate developer or coder that cracks $200 grand….you’re job is to identify the failings in you’re life that stop you from doing the same. Wake up…stop being a loser.

https://www.zerohedge.com/news/2019-06-12/countless-americans-living-their-vehicles-has-become-new-normal

#103 S.BBY on 06.13.19 at 11:04 am

reported by flop’s cousin

$1,637,000 loss (+ expenses)…

3868 W 23rd Avenue, Vancouver

Bought 2017 $4,475,000

Just sold for $2,838,000

2018 Assessed: $3,660,000
2017 Assessed: $4,317,000

And, ower/flipper is a financial advisor…..with a mortgage of prime plus 10% from Scotia

#104 IHCTD9 on 06.13.19 at 11:22 am

#97 Howard on 06.13.19 at 8:53 am
Seriously? Your whole standard of life depends on trade, the free flow of capital and technology. That’s called ‘globalism’. – Garth

——————————————-

It is? According to what study?

Standard of living, not to mention happiness, for the middle class was higher in the 60s and 70s before globalism took off.

Globalism is good for neo-stateless oligarchs seeking cheap labour. It is not good for the vast majority of citizens in developed countries. I can see how it is favourable to the 3rd world, but why should Canadians care about them? I mean no malice in saying that, but their problems are not our problems.
___

All those slaves working for a dollar a day, are working for YOU. Every consumer good you purchase is 1/5 the cost that it would be if it had been made in the West. You are likely too young to appreciate this, but I am just old enough to have worked and been a consumer in the 80’s when everyone in the ‘hood mowed their 1-2 acres with a single 20″ push mower.

Trust me – all the middle men in the supply chain between China and you have beaten their competition into the ground – the big winner is the end user who buys 3rd world made goods at big box stores for a price so low it should make you laugh.

How can a 230 pc. Ti coated drill set cross 1 Ocean, and 1 Continent, have made 3-4 organizations some profit, and your price off the shelf is 30.00? It’s mind blowing to those who remember what it used to be like.

#105 crowdedelevatorfartz on 06.13.19 at 11:59 am

@#101 Poor Engineer
” I’m sure I can get a lot of blogdogs to back me up….”

++++

Only the ones that live in Toronto….

#106 jess on 06.13.19 at 12:21 pm

Lenders’ exposure to an eventual downturn may be increasing. According to the Office of the Superintendent of Financial Institutions, the Canadian bank regulator, the ratio of uninsured over insured mortgages has jumped to the highest since 1997.

At the end of March, the volume of uninsured mortgages surged 14 per cent from a year ago, accounting for about 59 per cent of the $1.17 trillion of home loans at Canada’s federally regulated banks, while insured home loans fell 7.8 per cent from a year ago, according to data from OSFI. On Tuesday, the regulator announced it was increasing a domestic stability buffer for systemically important banks to 2 per cent of their risk weighted assets from 1.75 per cent, effective Oct. 31, citing vulnerabilities that include household indebtedness.
===
risk sharing?

“To be clear, the system is not broken — it has served Canadians and financial institutions well,” said Poloz in a May 6 speech in Winnipeg. “We should not stop looking for improvement.”

https://www.bankofcanada.ca/2019/05/risk-sharing-flexibility-future-mortgages/

Fragile corporate debt funding emerging as a vulnerability

https://www.bankofcanada.ca/core-functions/financial-system/financial-system-hub/

#107 Pfft on 06.13.19 at 12:32 pm

@#105 crowdedelevatorfartz on 06.13.19 at 11:59 am
@#101 Poor Engineer
” I’m sure I can get a lot of blogdogs to back me up….”

++++

Only the ones that live in Toronto….
_________________________

nah, trash like that needs to stick to sports blogs

#108 meslippery on 06.13.19 at 12:49 pm

#104 IHCTD9
How can a 230 pc. Ti coated drill set cross 1 Ocean, and 1 Continent, have made 3-4 organizations some profit, and your price off the shelf is 30.00? It’s mind blowing to those who remember what it used to be like.
————–
In the 80s the middle class had basements and garages.
You don,t need a drill set or much of anything in a 400
square foot condo.

#109 IHCTD9 on 06.13.19 at 12:53 pm

#100 Donna Quintal on 06.13.19 at 9:39 am
I am working in a restaurant for 20 years from just out of high school. My uncle owns it and sold to another investor 3 years ago. I never made much more than minimum wage, usually 10% higher, $14.40 currently. I don’t get to keep tips but get 55 hours a week plus overtime after 40 hours and a $50 a week bonus pay. I make a decent living of $50,000 to $51,000 a year.

I am not jealous of others and do not believe in this entitlement mentality. I am very grateful for what I have and have achieved and continue to achieve. An affordable 650 square foot rental above the restaurant for $900 a month+ utilities and own a paid for car 8 years old, no debts and socked away a pretty good chunk of money in 20 years.

My RRSPs’ and TFSA’s combined total balance is nearing $411,000 in the next few weeks. Canadians and Canadian governments need to start taking more responsibility with their lives especially when it comes to debt levels.

______

Impressive, excellent job!

#110 Deol on 06.13.19 at 1:06 pm

I work as a Software Engineer (not management) at a top company and have a package which is comfortably over 300K. All the friends I have make over 200 as Software Engineer. Why is it so hard to believe that people are making good money in big cities (I’m in Vancouver)? Even the no-name, new startups are offering 180-250K for folks who are good and have good experience. I guess it is easy to bash people rather than getting out of your comfort zone, getting quality education, working super hard toward building the set of skills that are rare and market values and then excelling at them.

#111 crowdedelevatorfartz on 06.13.19 at 1:27 pm

@#107 Pfft
“nah, trash like that needs to stick to sports blogs”
+++++

Fair enough

#112 JB on 06.13.19 at 1:27 pm

#99 go away already on 06.13.19 at 9:25 am

@#72 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.12.19 at 10:58 pm
Blues 4 – Bruins 1

Pity the sobbing Toronturds and GTAholes tonight, as St. Louis shows what it takes to overcome a 50 year Stanley Cup drought, something Toronto just cannot do.

Toronto fans are bewildered and distressed. Yet again.

Face it Toronturds, the Rapt Whores really don’t matter to you. They are just a frat party distraction from your miserable mediocrity in all things. Especially Canada’s national treasure, hockey. They are a 905 phenom at best, exposing and exemplifying the cultural divides in your crappy fifth rate city that you try not to acknowledge.

The Make Believes are what matters to you.

And they suck. Like everything about your city, your region.

You embarrass Canada and the game of hockey itself.

You are pathetic losers.

Now go waste some money on a slanty semi or a flimsy glass-walled condo and tell yourselves how smart you are, you idiots.\
____________________________

quit acting like a child.
You are a blight on this blog
…………………………………………………………….
Wow the leafs were in the cup finals? Man did miss that one! Well he is correct about one thing. Yes I did once own own slanty semi after I owned a flimsy glass-walled condo. Owned the condo first sold it a pretty much break even and bought a semi in the city. That was a disaster with our brand new condo, two years in and we had a special assessment due to problems with the balconies and the glass. My 80 year old semi came with every problem you could think of. The great news was my neighbours all had redone their semis in a hood and it brought our unfinished one up in price. Sold that one at a hefty profit and viola I’m now in a remodeled single downtown. No glass balconies falling out and no sinking foundation.

#113 Shawn Allen on 06.13.19 at 1:40 pm

Inflation and Deflation

#104 IHCTD9 on 06.13.19 at 11:22 am said:

How can a 230 pc. Ti coated drill set cross 1 Ocean, and 1 Continent, have made 3-4 organizations some profit, and your price off the shelf is 30.00? It’s mind blowing to those who remember what it used to be like.

***********************************
Agreed 100%. Most are too young to remember or they simply choose to have selective memories.

Apparently, full time whining and excuse making is the new black. Very fashionable.

#114 Carl Mojanzski on 06.13.19 at 1:57 pm

IHCTD9, I agree. We need more Donna Quintal’s in this world. People like Donna should be even more rewarded than today. We should not incentivize bad behavior as we do today in the world.

#115 oh bouy on 06.13.19 at 1:58 pm

@#110 Deol on 06.13.19 at 1:06 pm
I work as a Software Engineer (not management) at a top company and have a package which is comfortably over 300K. All the friends I have make over 200 as Software Engineer. Why is it so hard to believe that people are making good money in big cities (I’m in Vancouver)? Even the no-name, new startups are offering 180-250K for folks who are good and have good experience. I guess it is easy to bash people rather than getting out of your comfort zone, getting quality education, working super hard toward building the set of skills that are rare and market values and then excelling at them.
_______________________________

average human absolute hates seeing their fellow human succeed. especially if fellow human is more successful than they are.

#116 James on 06.13.19 at 2:04 pm

#80 Smoking Man on 06.13.19 at 1:17 am

Son number 1 , best closing ratio in history of a multi national company. Yet he cant get over a broken heart.
He married a 3rd wave man hating lunatic that was after my loot. Wasent going to happen.. I have a degree in Herdonomics
He’s got talent. Hes at rock bottom right now, only in his mind.
Let’s see if he can make a come back..
Before the bitch stopped his singing and creativity , these are some if his songs.
Enjoy

https://youtu.be/R3iX0SUQpPg

Go Ryan, figure it out. Or no trophy for you.
_________________________________________
I feel sorry for your son Old Man but RAP? Really?
Tell him to stick to the multinational company so he can support you when you cannot afford “Adult Diapers” any more.

#117 Damifino on 06.13.19 at 2:14 pm

#101 PoorEngineer

I’ve been working around hundreds of SW engineers for a decade. Few make 100K, and those are Firmware / FPGA engineers. I would say the cut-off for SW engineers is around 80K…
————————————

A data point for you. I was a firmware engineer with 20 years experience in real time coding. I retired in 2007.

I earned $95K in 2006, my last full year on the job. According to the Bank of Canada inflation calculator that translates into about $118K today.

#118 jess on 06.13.19 at 2:29 pm

Explain your wealth rule:

transfer vehicles:
the once wife and the once again wife

The Once-Again Wife: $19 million

In Russia, the phrase “loyal” or “systemic” opposition is often used to describe such parties, which give the appearance of a functioning democracy but in fact serve as place-holders for genuine opposition movements.

The LDPR strikes a personalized tone in large part due to the character of its leader, who is well-known for his provocative and eccentric behavior. Zhirinovsky has poured juice on politician Boris Nemtsov during a debate, cursed at presidential candidate Ksenia Sobchak in a live broadcast, and on one occasion even ordered a security guard to rape a pregnant journalist.
read more @ https://www.occrp.org/en/investigations/family-of-eccentric-russian-loyal-opposition-leader-owns-millions-in-undeclared-property
=======================
“The California representative blamed his wife in August for misusing campaign funds, saying that she was the campaign manager and managed his finances while he was serving in the military and as an elected official. Court records show that the Hunter’s personal accounts were overdrawn or empty during their spending sprees.

However, the charges filed against him claim that he was repeatedly warned about his wife’s misuse of funds by other campaign staff, which he ignored.

Federal Election Commission reports show that Hunter repaid tens of thousands of dollars back to the campaign in 2017, but did not repay all of the alleged $250,000.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9956-congressman-s-wife-changes-plea-to-guilty-in-funds-misuse-case

===
Sara Netanyahu: Israeli PM’s wife ‘agrees plea bargain’ – BBC News
https://www.bbc.com/news/world-middle-east-48449679

A year ago, Sara Netanyahu and Ezra Saidoff, a former caretaker at the Prime Minister’s Residence, were charged with fraud and breach of trust for spending $100,000 of state funds on catered meals while there was a full-time chef on staff.

#119 Vanessa on 06.13.19 at 2:35 pm

To the couple in today’s post: we are you but a few years down the line Congrats on doing such a good job of saving! Some thoughts as we’ve been in your shoes:

– it’s hard to forecast going out a decade. You have no idea how you’ll feel after having a child. You may want to stay home with your child in the short and precious early years. Could you put off trying for a baby for a year or two to get closer to your goal and give yourself more options once the baby comes?
– You can totally live in a 2 bed apartment with one young child. Ideally near a park.
– Keep renting and live near your job. You may run out of steam if you add a huge commute which could reduce your ability to maintain your high earnings.
– What are you retiring from? Do you really need to go from 120% to 0% overnight and not until your kids are already in school 6 hours a day? For us, once closer to our goal, dropping to one income for 4 days a week and buying more vacation time works well. Would working less but for longer be more appealing?
– I wouldn’t count on $10k/month from $2M! You need to subtract inflation, fees and tax. $60k-$70 from $2M might be more realistic and conservative, especially longer term…

Good luck and make sure you are enjoying the journey!

#120 Blacksheep on 06.13.19 at 2:36 pm

IHCTD9 # 104,

Globalism & Crappy drill bits:

Those Cambo Tire drill bits are made from HCS and are great for the back yard guy.

But don’t confuse them with actual, HSS drill bits that are made with molybdenum to hold an edge, even drilling steel, can be re-sharpened until too short to use and last many times longer.

The discussion about globalism is over.

The horses left the barn back in the 90’s under Clintons watch (he actually promoted it) There is no denying the catastrophic impact its had and continues to have on the western middle class, sure you may have a job but it pays like shit, just look at the explosion of homeless in North America.

LA is tuning into a rats nest.

But how could we have ever known the consequences?

https://www.youtube.com/watch?v=wwmOkaKh3-s&t=182s

Because this guy warned anyone who’d listen…

#121 JP82 on 06.13.19 at 2:44 pm

Okay am I little lost here on this one, assuming he gets paid 200k on salary. He will lose close to half to tax which means essentially they are saving his salary. Which means that his spouse whom makes 70k nets out around 1900 every pay cheque roughly. They need to pay $2400 in rent so that leaves $1400 a month in living expenses. Isn’t that low? Or is it just me…

#122 Deol on 06.13.19 at 2:54 pm

#101 PoorEngineer

I’ve been working around hundreds of SW engineers for a decade. Few make 100K, and those are Firmware / FPGA engineers. I would say the cut-off for SW engineers is around 80K…
————————————

You also mentioned about jobs shipping to India. Have you really looked at Indian market? I’m from India and can offer perspective. Good quality software engineers in top companies with ~10ish year of experience (Microsoft, Amazon, Uber, LinkedIn) make around 1 crore+, which is ~200K CAD per year. Plus, the taxes in India are lower. So, it is not really easy to ship jobs that require real talent to offshore location.

That said, of course majority of SWE in India will not make this kind of money. But that is not because there aren’t opportunities, it is just that the candidates doesn’t have skillset to qualify for those jobs. Same is true for Canada and US.

#123 not 1st on 06.13.19 at 3:04 pm

Oh oh Trudeau, Albertas stock just rose. Get used to those gas prices coming your way.

https://www.bbc.com/news/world-middle-east-48630374

#124 PastThePeak on 06.13.19 at 3:13 pm

Software engineer salary
================
Some perspective from someone employed in a multi-national telecom software & h/w company. Information for Canada:
– $200K/yr in Canada is definitely a high upper bound, and will only be reached by a small % (senior architects).
– Lots of people though (with many years in) make over $100K. These are more senior, project leaders, etc.
– There is a difference between a software engineer / architect and a developer/coder in some companies. Our company does outsource items like pure app development and testing to lower cost countries, but almost all senior engineers are in high cost countries (Canada, US, northern Europe).

The turnover in tech companies in the lower cost countries (e.g. India) is huge – often 20% per year – and this means you can’t outsource everything.

** And as others note, this guy at 30 is most likely a contractor doing multiple gigs. That $200K might be a best year, and needs to note that it does not include vacation time, benefits, or any retirement plan.

#125 Reddy on 06.13.19 at 3:20 pm

Another suggestion perhaps, which i didt see discussed. Dont buy a 1m house… buy a more reasonably priced house. The house i bought doesnt have granite countertops, neither does it have 10′ ceilings. The carpet is worn in a few spots, but it was reasonably priced, low dp, and carries for cheaper than rent. The opty cost of the dp has been more than offset by the savings in rent.

Not everything needs to be hardwood and granite.

#126 PastThePeak on 06.13.19 at 3:24 pm

#110 Deol on 06.13.19 at 1:06 pm
I work as a Software Engineer (not management) at a top company and have a package which is comfortably over 300K. All the friends I have make over 200 as Software Engineer.
++++++++++++++++++++++++++++++++++++

Hmm…I have been in the business for a long time, and those figures are very outlier unless in the ‘Valley (and for top tier talent). I realize by the term “package” you likely include the full value of benefits, bonus potential, stock option potential, and retirement plan (matching contribution). Still very uncommon though, in my experience.

…unless you are in sales now but started as s/w engineer. Sales in tech/industry are the highest paid non-management positions.

#127 T on 06.13.19 at 3:45 pm

#87 MF on 06.13.19 at 7:45 am
#82 The Great Gordonski on 06.13.19 at 4:14 am

—–

Excellent points.

Globalism is good for all, but all can’t see the good. Not many bright people around these days.

As much as I like to call you out on your love for the mess that is now Toronto (as you remind me of many of my friends), you always seem intelligent. Keep it up! Just don’t buy a condo – I say this from experience. That train left a long time ago.

#128 entropy on 06.13.19 at 3:57 pm

SWE in Toronto making 200k? lol

#129 Renter's Revenge! on 06.13.19 at 4:00 pm

#92 Tater on 06.13.19 at 8:20 am
#47 Mean Gene on 06.12.19 at 7:56 pm
Hypergamy worked out well for someone, so much for the concept of equal partners.
————————————————————-

Best part about people who talk about hypergamy is you immediately know they are some combination of dumb, fat, broke and entitled.

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

Hypergamy

“They don’t want someone better than themselves, they just want someone better than you.”

#130 entropy on 06.13.19 at 4:02 pm

#121
It is low because its a made up example. It gets the point of the post across nicely though.

I assure you nothing on this blog is made up. That would be too sweet. – Garth

#131 James on 06.13.19 at 4:24 pm

#110 Deol on 06.13.19 at 1:06 pm

I work as a Software Engineer (not management) at a top company and have a package which is comfortably over 300K. All the friends I have make over 200 as Software Engineer. Why is it so hard to believe that people are making good money in big cities (I’m in Vancouver)? Even the no-name, new startups are offering 180-250K for folks who are good and have good experience. I guess it is easy to bash people rather than getting out of your comfort zone, getting quality education, working super hard toward building the set of skills that are rare and market values and then excelling at them.
________________________________________
Tell that to the Old Smoking Man. Ha, ha

#132 entropy on 06.13.19 at 4:41 pm

#124 very good points.

Just look at levels.fyi for Silicon Valley salaries from the top players. Lots of salary chatter on reddit too.

Toronto(Canada in general) has much much lower salaries.

I personally dont know any senior swe as a FT salaried employee in Toronto making that. 100-130k seems to be par for the course.

#133 Cristian on 06.13.19 at 5:07 pm

“some piece of me wants to purchase a home (probably in the suburbs) and build equity. I have aspirations to retire early (at 40 or so).”

I wonder if all “moisters” are as naive (I’m trying to be nice here) as this one…
What is the $700,000 saved so far? It’s not equity?… Why do you need to build equity in a crappy wooden box?
As for retiring at 40 with the amount of money you saved so far and what you plan to save in the future… good luck with that! Any retirement calculator will tell you that you’ll run out of money by 60-65, which is not quite the right age to be rejoining the workforce.
Or, you can make your money last for another 15-20 years but live in abject poverty most of your life.

#134 Deol on 06.13.19 at 5:32 pm

It is really surprising to see how folks find it so hard to believe that people are making good money. Maybe this brittleness to change/new data is the reason they are not making more money. So let me list down some average salaries. These are based on real data and considering that you are a solid Software engineer with around 7-10 year of experience. The number include Base Salary + Stocks + Bonus.

1. Google/Facebook – In SFO – A E6, L6 makes between 400-650K USD.
2. Amazon L6 – Seattle – 275-375 USD.
3. Microsoft – Senior SWE – Redmond – 240-330 USD.
4. Amazon Vancouver – L6 – 290-390 K CAD.
5. Indeed Vancouver – Staff Engineer – 280-330K CAD.

All new SWE that join Amazon (level 4) get 120-150 K CAD package right out of College. Level 5 (SWE 2) makes anywhere between 140-230K CAD.

#135 Remembrancer on 06.13.19 at 6:39 pm

#134 Deol on 06.13.19 at 5:32 pm
It is really surprising to see how folks find it so hard to believe that people are making good money.
————————————
Save your breath, there’s a disconnect here between web dev / corp IT types and more lucrative software R&D opportunities…

#136 Changeemall on 06.14.19 at 12:38 am

30 year old software engineer in Canada making 200k a year? Right… I’m very close to industry and that isn’t a realistic salary unless you are a CTO or a senior system architect. Industry average in Toronto is 90k a year. A superstar Dev can pull that in Silicon valley but not in Canada… That’s why it you are that good you move South immediately.

I’ve noticed you have many people writing to you that are just hot air. Maybe you just make these up yourself to make it interesting.

#137 Mio on 06.14.19 at 6:12 am

” Can you live from age 40 to age 85 on forty-five grand a year, putting kids through uni and not go insane? Good luck. ”

What is with the obsession about paying for your kids’ uni tuition. By the time they go to uni, they are adults. Why can’t we expect them then to pay their own way.