Eggs

It’s fair to say yesterday’s comment section convo unscored a theme: resentment. A whole generation of people genuinely feel short-strawed. They’re anti-corporate iconoclasts believing Boomers won the birth lottery, then fashioned an economic and financial system rigged in their favour.

Pensions are gone. Careers are now gigs. Houses nobody can afford. Surely life was simpler when real estate cost three times what you make in a year (not 10 or 12 times), when people stayed in lifelong linear careers, saving nothing and could still retire with a monthly cheque.

Well, if that was ever actually the case a whole mess of Boomers have royally screwed up. It’s getting ugly out there among the sixtysomethings. They put too many eggs in one basket. And there’s a lesson here.

This week a big financial company reported that nearly half (46%) of Boomers getting ready to retire will still be carrying a whack of mortgage debt when they do. This is historic. Like two feet of snow in Colorado in June. Something’s changing. In fact, 70% of people now say they won’t actually stop work when they ‘retire.’ They can’t.

Plus, that ‘freedom 55’ thingy is largely toast. Fewer than 40% say they’ll retire before hitting 65. No surprise. Over 70% of people on the cusp of leaving their jobs have no financial plan. Not much to be proud of here, or for the moisters to be hostile about.

And it gets a little more depressing when you look at what a slew of the old farts are doing with the real estate they lucked into. Reverse mortgages are now the fastest-growing source of debt. Up more than 28% in the past year, to an outstanding balance that’s approaching $4 billion. No coincidence that Old People’s TV (CBC News Network, BNN) is riddled with CHIP HomeEquity Bank commercials. Lots of old fogeys have houses, yes, but they don’t have enough money to live on.

A reverse mortgage is just that. You get a bag of money from the lender who gets to place a lien on your house in return. However that’s just the start. The mortgage has an interest rate attached to it, so the debt grows in size every year. The wrinklies are sucked in with the promise of ‘tax-free cash’ and ‘no monthly payments.’ It just seems so…free.

But, alas, it’s a trap.

The prevailing reverse mortgage rate this week is 6.3% – or more than twice the cost of a conventional mortgage. Added to that are closing and administrative fees which are tcked onto the principal, amortized, put through a blender and a spin cycle and result in an effective rate of 6.63%

So a reverse mortgage of $150,000 becomes a debt of $210,000 five years later. Imagine if the naïve seniors burn through that amount of cash during the term – thirty grand a year – only to find that they owe 30% more than was borrowed. The only way out is to sell the house and pay off the debt or borrow more (up to 55% of the equity in a home can be siphoned off by the blood-sucking proboscis of the bank). Of course, the bigger the reverse mortgage the less money that’s available for the kids when the Boomers croak. And therein lies the true tragedy. Maybe there’s an app…

There are options to the reverse mortgage. A home equity line of credit can be had in the 4% range, requires interest-only payments, and the debt doesn’t get any bigger over time. The money can be invested to produce income (making the interest tax-deductible), used to pay off higher-cost debt or frittered away on having a good life. Most HELOCs are variable-rate, but that’s okay given the potential for a reduction in the cost of money.

Or, better, you can sell the house. The market is generally okay (outside of Vancouver), mortgage rates have plunged, the stress test rate is about to be reduced, the RRSP home buyer limit was just goosed and the weather finally improved. This is a powerful mix. If central bankers are correct and economies cool off in 2020 and beyond, conditions later might be less favourable. Think about it. Take the pile of dough, invest it and let the portfolio pay your rent.

As for the kids, watch and learn. If a mess of Boomers couldn’t turn real estate into financial security even given their favoured lives, how can you expect a different outcome? Houses are costly, inflated, omnivorous assets. Become your parents at your peril.

126 comments ↓

#1 NotLegalAdvice on 06.25.19 at 4:41 pm

Okay, fair point on renting vs buying. If our rents had favourable conditions and couldn’t do it, how can we?

BUT, do you think we need something to cool off rent prices? They are out of control, Garth!

I know you’re against government intervention and want Mr. Market to fix all, but that could take some time. Not enough people reading this blog…I think that’s the issue!

FIRSTTTTTTTTTT

FIRST COME FIRST SERVE AT ANY MANDARIN IN ONTARIO July 1st…. FREEEEE! ENJOY

#2 Flop... on 06.25.19 at 4:46 pm

I saw part one of a five part Global News look into Vancouver housing.

Nothing explosive…

M45BC

#3 NotLegalAdvice on 06.25.19 at 4:49 pm

“Take the pile of dough, invest it and let the portfolio pay your rent”. – Garth

__________________

Another great suggestion for individuals not wanting to leave their home. Sell your home, but input a lease-back clause. If you want to stay there for the next 10 years, add this in. This is great for buyers that are looking for long term renters and also great for the seller that doesn’t want to move.

WIN WIN.

#4 Leftover on 06.25.19 at 4:52 pm

We looked at a house on Vancouver Island last month.

Nice place, needs a little work, built in the 1980’s and still occupied by the original owners who are now ready to go into assisted living. They built it for about $350K and it’s now worth a tidy $1,200K.

Guess what? It has an $800K mortgage.

So virtually every nickel of increased value has been borrowed against, no idea whether that was to fund grandma’s gambling habit or to “help the kids” buy a place, whatever, it’s gone.

According to the realtor it’s a very common thing.

Who knew?

#5 Stone on 06.25.19 at 4:58 pm

This week a big financial company reported that nearly half (46%) of Boomers getting ready to retire will still be carrying a whack of mortgage debt when they do. This is historic. Like two feet of snow in Colorado in June. Something’s changing. In fact, 70% of people now say they won’t actually stop work when they ‘retire.’ They can’t.

———

Really? The percentage is that low? I thought it was actually more in the range of 99%.

#6 Brett Simms on 06.25.19 at 4:59 pm

Just think of the financial mess that’s coming and most Canadians have absolutely no idea. Scary.

#7 Simon on 06.25.19 at 5:00 pm

They’re anti-corporate iconoclasts believing Boomers won the birth lottery, then fashioned an economic and financial system rigged in their favour.
——–
But that is what you told us about boomers the other week – they were born into it.

#8 Stan Brooks on 06.25.19 at 5:01 pm

Debt slaves need no assets. The system will ensure they sell it in order to maintain ‘high standard of living’.

6.3 % on reverse mortgages? Not enough, it should be 20 %.

We should also introduce diapers debt, insured and guaranteed by government with 15 % interest so young people can buy diapers for their kids. Banks will help finance it.

And garage and basement living assistance debt, also insured by governments as people have to live (affordable) somewhere.

And ‘right of access to garbage bins’ debt so you can purchase a license to collect valuable things from garbage bins which of course will be regulated and paid for, similar to taxi medallions and licenses (cities need revenue, you know…).

There will be an app for it, backed by artificial intelligence.

Voila, all problems solved. GDP up. Pass me the smoke.

#9 The Wet One on 06.25.19 at 5:01 pm

Man…

Those eggs!!!!

LOLOLOLOLOLOLOLOLOL!!!!

As for the Boomers, weren’t they the ones who elected Trump? Or was an even older cohort of ignorant fools?

If it was (and I understand that it was), well, they deserve all the rude gestures they’ll get.

I used to work with a young boomer (about 10 years my senior) and she disliked the boomers as she missed out on all the goodies they got too.

Me, I resent them not at all. I expect a kick in the face, a pauper’s grave and a tax bill to boot. I’ve governed myself accordingly and I’m doing, eh, alright I guess.

Low expectations plus moderate success result happiness.

High expectations plus moderate success result unhappiness.

So it goes.

#10 Howard on 06.25.19 at 5:06 pm

So what on earth did the Boomers spend all the money on that wasn’t going towards paying off the mortgage, aside from gifting Junior a down payment? Food dehydrators, spray-on toupées, and whatever else Ron Popeil was selling late at night in the 90s?

#11 Dissident on 06.25.19 at 5:11 pm

A fellow Xennial friend’s Boomer dad recently exclaimed to her, “Hey, nobody can actually afford trips annually or fancy cars, or homes, etc, that’s what debt is for!” It was exactly this sense of entitlement that drove him to try swindling his daughter and her husband out of money (they were rooming in his mortgaged condo, paying part of his mortgage) by trying to convince them to buy his condo from him. Meanwhile, he didn’t reveal a second mortgage or line of credit that he’d taken for an ‘investment loan’ – well, can’t sell the property with a lean on it, sorry bud. (Never found out what the ‘investment loan’ was for).

Thankfully, they came to their senses, moved out, and now live in a rental mid-town. Dad is stuck with his condo he can’t really afford on his own, and the second loan. Unfortunately, his lackadaisical attitude towards entitlement and spending money you don’t have was inherited – they recently purchased a $5,000 custom-made leather couch for their rental. With the monthly stain insurance fee (seriously, who gets that). Why? Because the shop was in a tony part of town. And they felt like it. (Me: “But what’s wrong with Ikea!?”) *facepalm*. At least they are not paying their dad’s mortgage.

Some people have very different priorities. And clearly, financial attitudes are inherited.

#12 expat on 06.25.19 at 5:18 pm

It’s called bourgeoisie
Except this lifestyle of the last 2 decades has wiped out the “Ze”

They are now bourgeois without the ability to pay for it.

Chickens always come home to roost

#13 Bob Dog on 06.25.19 at 5:20 pm

Physical slavery requires that people be housed and fed. Financial slavery requires that people feed and house themselves.

If only Canadians could band together and form some sort of union that would regulated banks and protected the average person from greed. I propose calling this brilliant idea “Government”. We are all seriously in need of such an organization.

#14 expat on 06.25.19 at 5:22 pm

I can’t for someone on the LEFT this election to say the taxpayer needs to pay reparations to broken boomers and millenials who were forced to take big fat mortgages by the banks…..

#15 expat on 06.25.19 at 5:24 pm

I think the Feds, The Provinces, the Cities should pay reparations to taxpayers for the decades of mismangement of their tax revenues…

Who is with me?

If the 6 of us band together who aren’t on the dole in some way- band together I think we can win this….

#16 Pete from St. Cesaire on 06.25.19 at 5:25 pm

Garth, I think you misread the current generation. Except for the SJW types, they’re not angry at boomers nor are they jealous. They are tired of a system that regulates them to death while lying about absolutely everything all the time. They can see that the gig is up; that it’s a race to the bottom from here on in. These people know that the only way to ‘win’ is to ‘not play’. Therefore they desire to side-step the whole thing by dealing directly with AirBNB or UBER or Bitcoin or Fiverr or whatever. If it appears to be unregulated it is seen as in keeping with their social philosophy.

#17 Shawn Allen on 06.25.19 at 5:30 pm

Reverse Mortage?

A reverse mortgage is just that. You get a bag of money from the lender who gets to place a lien on your house in return. However that’s just the start. The mortgage has an interest rate attached to it, so the debt grows in size every year. The wrinklies are sucked in with the promise of ‘tax-free cash’ and ‘no monthly payments.’ It just seems so…free.

****************************
Reverse?. Normal mortgages also give you the same bag of money up front. The difference with a “reverse” mortgage” is no payments and interest accrues and the balance owing grows. So I guess reverse in that sense. Amount owing grows instead of declining.

What about the other kind of reverse mortgage where there is no bag of money up front but rather monthly payments to the homeowner? This is where the reverse name comes in? The debt starts out small and accrues over time.

The ONLY thing I have “against” reverse mortgage is that the interest rate is far higher. With a low interest rate and with full understanding that the balance owed grows it look fine to me. Free country.

If people did not pile so much hate onto reverse mortgage there would be more competitors and cheaper interest rates. And why should CMHC not insure these up to say half the property value or pick a safe number.

#18 Some of those ... on 06.25.19 at 5:36 pm

retired Boomers with mortgages can easily handle them with their DB pensions. Can’t paint them all with one brush.

#19 Pete from St. Cesaire on 06.25.19 at 5:39 pm

As for those who plan on using their home as their retirement fund; my advice to buyers is to not reward them for their stupidity. Since you have a choice of house to buy, try to determine which seller is flush with money and which is relying on some buyer to bail them out of their stupid approach towards retirement planning. Buy from the seller that ISN’T depending on the sale of their house save them from a retirement of Meow-Mix and KD. To do otherwise is to reward their lack of fore-site and perpetuate that form of financial planning amongst their peers.

#20 Yukon Elvis on 06.25.19 at 5:48 pm

If you are old and broke and tired of the rat race and dog food here is the plan. Get your affairs in order and go to the bank. Pretend to have something in your pocket and demand cash. Wait outside for the cops to arrive. Don’t resist, tell them u have angina and a bad back. They will take you downtown, feed you and give u a warm place to sleep. Remind them that u need your meds and might be having chest pains.They will take care of you, feed you, keep you safe etc while you wait to see a judge. You can play billiards, ping pong, read, and wrestle the other inmates for the channel changer. If the judge decides that u are demented you can take a rest at the hospital for a while. When the judge decides to release u on bail tell him you are broke and must stay in jail where it is warm and you get fed. When the judge releases you on your own recognizance go back to the bank and pull another stickup. If the cops refuse to arrest you throw a brick thru the window and proclaim yourself to be a menace to society. Clutch your chest, look skyward, and tell Elizabeth that you are coming. You will never freeze or starve to death in this country. After being taxed mercilessly and relentlessly all your working life you deserve a comfortable retirement, free health and dental, 3 squares meals a day, and cable tv.

#21 Shawn Allen on 06.25.19 at 6:00 pm

Remember this rule for predicting success of people and businesses:

Winners Win, and Losers Lose.

That is people and companies that win in one year or one aspect of their life tend to keep doing so. With exceptions of course. But it is the way to bet.

The opposite applies for companies and people that disappoint themselves and/or others in one year or one aspect of their life. The pattern tends to repeat.

As Buffett has said, turn around companies seldom actually turn around.

This is very harsh and not politically correct to to say. But it is the way to bet.

I might add a corollary. Those who win really big tend to do it again. Those who win small probably continue to win only small.

#22 AGuyInVancouver on 06.25.19 at 6:07 pm

“Or, better, you can sell the house. The market is generally okay (outside of Vancouver), mortgage rates have plunged, the stress test rate is about to be reduced, the RRSP home buyer limit was just goosed and the weather finally improved..”
_ _ _
Any Boomer in Vancouver could likely still sell their house for vast multiples over what they originally paid for it. They just need to realize there’s no longer any offshore millionaires willing to vastly overpay them for it. Suck it up, cut the price and sell.

#23 paracho on 06.25.19 at 6:09 pm

Many already are in deep water . Many never planned for this and will only get worse with time !

So unfortunate . But so realistic!

My parents had old school
Values and had it all paid off well before turning 65. Mom never worked and dad worked till 64. The were conservative and are the only ones on the street to still fave a garden .
Just recently I was getting quotes to change the windows on their 28 year old house .I called around and had numerous sales people come .
Two were ultra expensive without any real value . Really young sales reps who could not look you in the eye. Spoke really quick and domineering to folks in their 80s.
Weird thing about these two reps from the 2 most expensive companies ( both double the price of the mean prices of the 12 other companies ) was they both asked smugly if the house was “paid off”. Then they both gave the unsolicited advice of how we could get a home equity line of credit if we had good credit ratings or “ better yet , a reverse mortgage”….. both of these late somethings used this exact line with such confidence .
I was amused in the correlation between these two sales reps . Do they have some incentives to push reverse mortgages ? Home equity lines of credit ? If it did not happen from 2 sales reps two days apart … I would find the correlation quite creepy !
I wonder how many older folks are actually doing regular maintenance in their paid off properties via varioysdebt instruments … via reverse mortgages ?
Very scary !

#24 Dolce Vita on 06.25.19 at 6:15 pm

Excellent but sad Blog today Garth.

Warned a lot of friends and acquaintances decades ago that this day would come. And here we are. A lot worse than even I thought back then (a good 20 years ago).

Time to make amends and Pay the Piper.

Far too many were worried about keeping up appearances and giving themselves the life they believed they so richly deserved using the money of others…and still doing it I read.

Thank God I practiced what I preached.

Why I love the advice you give Garth, day in, day out.

It is SO, SO TRUE.

#25 not 1st on 06.25.19 at 6:15 pm

Disruption? Well that’s nothing compared to the scorched earth policies of Trudeau and his gang of misfits.

Canada reduced to a shadow of itself.

https://www.ctvnews.ca/politics/china-says-it-has-banned-all-canadian-meat-imports-1.4482411

#26 Rage Against the Machine on 06.25.19 at 6:15 pm

Just look at Boomers in the Okanagan to what they spend on.

The boomers dine out 14x per week. Often found feasting up on the fine foods at Urban Fare Cafe, have ride on lawn mowers for their massive lawns they can barely keep up with, pay additional for landscaping, buy tons of roundup, an RV, Boat, Truck, Car, Second Car on the driveway, 3500sqft home with no stairs for 2 people who occupy one room max, air conditioner the 3500sqft home at 17C in the Spring and Summer, and heat the 3500sqft home at 26C in the Fall and Winter when not even home, spending time down South as a Snow Bird.

You wonder why they are broke?

Don’t trust anyone over the age of 55.

#27 BlogDog123 on 06.25.19 at 6:16 pm

Garth,
You forgot about the cottage. The boomers and their parents have a cottage, so we gotta have our own lakefront cottage.

Pile that onto the debt: Fancy car, cottage in Muskoka, house in downtown Trahnna, Caribbean vacation for March Break or bust!

Keeping up with the Joneses and dropping that line: “We’re heading up early to the cottage” at work is everything…

#28 "Lefty" PETA activist on 06.25.19 at 6:19 pm

Who shoved those choking hazards into the pooch’s mouth?

How would you like if I shoved eggs into your mouth?

#29 Shamus on 06.25.19 at 6:20 pm

I’m 47.

I think the moisters do indeed have a reason to be hostile.

#30 Jay Currie on 06.25.19 at 6:24 pm

I am always astonished at the willingness of people to take on non-productive debt. In one of my businesses we actually tax ourselves 20% to build a reserve to avoid ever having to take on debt.

At the same time, I am astonished and amazed at what you can buy, for pennies on the dollar at garage sales or on Craigslist. Just got a wonderful, modern design, floor lamp for $2.00 at a garage sale. It retailed at $140. Unworn clothes, unread books, unused tool – you pay cash and no tax.

Renting is a no-brainer with current house prices. It is not just the capital outlay, it is the maintenance, property tax, transfer tax and little surprises like basement leaks. If you want (or need) to move, a month’s notice and you’re done.

While I like to focus on increasing the revenue side of my budget, paying close attention to reducing expenses lets us live well but frugally with only basic monthly bills. (But that cell bill is a killer.)

#31 CRA - wake up on 06.25.19 at 6:29 pm

The tax system was invented to raise revenue under the old business system.

Airbnb, uber, dover, online everything etc is the new economy.

maybe time to consider transaction based tax versus fiscal period reporting.

time to level playing field as businesses that employee pay all kinds of taxes from workers comp to ei to corp tax and hst.

update and simplify the tax code – its prehistoric.

#32 not 1st on 06.25.19 at 6:37 pm

The millennials are going to waste a decade voting for socialism only to get a nasty surprise at the end that they will be 10 yrs older and still no further ahead.

Notice the elites on the left endorse socialism for you, but they continue to dip their toes into the system for big gains. Bernie Sanders has multiple homes and is a millionaire. Some how Pelosi amassed a $275M fortune on a speakers salary.

#33 Bill Grable on 06.25.19 at 6:37 pm

*Full Disclosure – Mr. Turner and his team have taken care of my Family, and my Sisters’, for nearly a decade.

We’re lifers.

Why?

Because I get to not only make sure my Family is taken care of, but Mr. Turner, and Ryan, and Douglas actually explain, in ENGLISH, what the portfolio is doing – so even an old weezer like I can understand what’s happening.

I am saying this, because I will echo a few posts – about the total LACK of financial literacy among my Boomer coterie.

I keep begging them to call you Mr. Turner, or at least make an attempt at learning something.

Nada.

Credit cards and lines of credit, big cars, trips to Maui and Europe…..debt up the yang, no pension, kids in college, and don’t have a FIG saved – and they think all is just peachy.

Can you say “Waterloo”?

#34 the ryguy on 06.25.19 at 6:43 pm

Houses are costly, inflated, omnivorous assets.
————————————————————

I’d say real estate in general fit this description. I’ve noticed a huge uptick in Canadians trying to sell their “business”, with real estate attached, seriously good luck. No one is gonna pay 15-20X cash flow to acquire depreciating and heavily taxed land. Wonder if that land is leveraged up to the nuts too?

There’s a lovely little towing company with great financials I would buy, but of course they also want to flip the RE. Takes the payback time from 4 years to 15, no thanks.

#35 red_falcon on 06.25.19 at 7:02 pm

What’s there to resent about? Every generation has it’s ups and downs. You deal with what cards are dealt to you. If you get lemons, make ice lemon tea.

In any case, in every sense of the word, the key is income… multiple sources of it. And you start with dividends… that is the key!

People who say buying a house and buy anytime is hogwash… if it costs too much don’t buy it. how simple can it get? Punks! Punks I say!!!

#36 Cal on 06.25.19 at 7:02 pm

People do not have money because of the high taxes in Canada.

When you pay 45% of your total income in taxes, it is over. That is why most people cannot get ahead.

Of course the people that work for the government, or is on their gravy train, disagrees, but go join the real workforce, and find out.

#37 Nonplused on 06.25.19 at 7:12 pm

You’d think that if the boomers had it so good they’d all be living in paid off houses and drinking margaritas on the porch all afternoon. Instead they are working at Wall Mart.

Instead what happened over their lives is their cost of living went up-Up-UP! while their incomes stayed same-same-same (inflation adjusted). Many of them may have bought a house for 3 times income, but 20 years later still owed 3 times income on it or more. “Home equity” became a source of desperately needed ready cash. Remember the “Home ATM” commercials? That meme was no joke.

So the boomer frogs are just as screwed as everyone else, they just got thrown in the pot before the water was boiling and didn’t notice the temperature rising. The millennial frogs got thrown in after the water was boiling and they are trying to jump back out. In any case frog soup is for dinner and everyone is in the pot.

#38 Chimingin on 06.25.19 at 7:13 pm

This stat-based article from The Atlantic references the US, but would be interesting to use Canadian data to see if the impact was the same here:

https://www.theatlantic.com/ideas/archive/2019/06/boomers-are-blame-aging-america/592336/

#39 Dave on 06.25.19 at 7:15 pm

China to stop all meat product imports from Canada.

Its only going to get worse – exponentially worse. Canada will fall into Depression.

#40 acdel on 06.25.19 at 7:32 pm

#20 Yukon Elvis

Hey, many are catching on to what you wrote; could be the norm in the future.

I have to say many great comments this evening; the figure that one posted about Boomers debts is truly astounding considering they had everything going for them (well, many did).

There is no great surprise why the world is going the way it is; I cannot knock the mills, gen-x and especially the newcomers (young ones) for doing what they must.

We all know where this is leading!

Excellent article Garth!

#41 A thought while you ponder? on 06.25.19 at 7:40 pm

Anybody live within there means anymore? So…give a man to his trade that is not made. Swords to fling and catch again. Coins to ring and snatch again. Men to harm and cure again. Snakes to charm and lure again. He’ll be hurt by his own blade. By his serpents he betrayed. By his clumsyness he displayed. By the people lost to scorn so ‘‘tis not the tradesman born…..nor are would be millennials hoping to imulate the reality life style of care free spending selling them tomorrow’s security away for today’s good times!

#42 Yukon Elvis on 06.25.19 at 7:51 pm

#40 acdel on 06.25.19 at 7:32 pm

#20 Yukon Elvis
Hey, many are catching on to what you wrote; could be the norm in the future.
……………………
I’m as old as dirt and I’ve had 2 heart attacks, 2 surgeries, and i am on daily maintenance meds, one of which is BC super skunk bud #3. The constitution says i must have my prescribed meds twice a day or i get aggressive and unpredictable so they give it to me. I am so old and feeble they put me in the low security wing. They don’t even lock the door anymore cuz i have to get up 10 times a night to pee. The inmates are interesting, always someone new to talk to. The jailers call me pops and i give them investment advice. Nobody listens but who cares it is someone to talk to.

#43 akashic record on 06.25.19 at 7:52 pm

Everybody should just have billions or at least millions of $s and we could finally switch from low energy penny pinching to discuss interesting things, that really matter in this big holographic universe.

#44 Flop... on 06.25.19 at 8:00 pm

Look at this tragedy unfolding in Richmond.

Featured them a few times in my Pink Snow days.

Paid 1.7 May 2017

Asking 999k after starting at 1.81

Assessment 1.89

Been at it for 15 months.

It won’t go for ask but the desperation meter just fell off the wall…

M45BC

https://www.zolo.ca/richmond-real-estate/7840-malahat-avenue

#45 DuhBoomers on 06.25.19 at 8:03 pm

DELETED

#46 Old Dog New Tricks on 06.25.19 at 8:12 pm

The reverse mortgage is a terrible idea but I could see how it would appeal to someone. Same old problem, instant gratification. Instant money, bad terms – no worries, let your future self deal with it.

#47 Shawn Allen on 06.25.19 at 8:16 pm

the ryguy said:

There’s a lovely little towing company with great financials I would buy, but of course they also want to flip the RE. Takes the payback time from 4 years to 15, no thanks.

**********************************
So see if they will sell the towing company with an X year lease on the land and building. If the lease rate is okay then you might agree to a ten year lease.

With a towing company they are probably not too worried that you would beat up the building or something.

A guy I met had a huge “yellow equipment” leasing business that he had built up in California. He sold the business but kept the land. He charged a reasonable rent and and did not increase it to the max that he could. He keeps on eye on his land and buildings. The result I met him on a cruise as he has no worries and travels frequently now.

Another guy did a similar thing with a trucking business in Edmonton. Basically retired at about 50 based on the income from leasing the land and building to the new owners of his trucking company.

What was that I was saying about winners winning serially? They win because they make good decisions and do the things they need to do and they have vision and they do things.

#48 Millennial Realist on 06.25.19 at 8:27 pm

DELETED

#49 Fiendish Thingy on 06.25.19 at 8:33 pm

I’m retiring this August at the ripe old age of 62. Moving to an ocean view home in Nanaimo, with a tiny 3.0% mortgage that will be paid off in 5 years.

Will be drawing 90% of pre-retirement income from a balanced, diversified collection of about 8-10 income streams, including a couple of govt pensions.

Best of all, we plan to get a dog next spring (had to hold off due to renting the past 9 years).

Now if we could only get a couple of grandkids…

#50 Dave on 06.25.19 at 8:47 pm

When we extradite the CFO, China will declare Canada inhumane and limit travel and investment to Canada.

China needs to show the world their Power, sadly they will smash Canadas economy to demonstrate what happens when you cross them.

#51 technical analysis?? on 06.25.19 at 8:48 pm

Seven times in the last 50 years, the three month-yield has exceeded the 10-year yield for 10 straight trading days. In each instance, recession followed.

we are now 28 days continuous and counting.

And those recessions occur 18 to 24 months later, of varying depths and durations. Maintain a balanced portfolio and stop listening to people like you. Good advice. – Garth

#52 Millennial Realist on 06.25.19 at 9:00 pm

Sorry Garth, but your delete of my comment was totally unreasonable and completely humorless.

Nothing I said, in good jest and a satirical spirit, was even close to the constant and offensive whinging coming from you and the Boomer comrades here complaining about the younger generation.

Calling us “moisters” is an offensive put down, but apparently okay for you, as you repeatedly toss it at us.

Pushing back at your actual generational bullying, though, is simply not to be tolerated.

Thanks for making that so crystal clear.

Any time. – Garth

#53 Millennial Realist on 06.25.19 at 9:18 pm

Undelete my comment.

Or just be a generational Boomer Bully.

(With no sense of humour but a willingness to tolerate putdowns of younger people, women and others who are not part of your club)

#54 Flop... on 06.25.19 at 9:26 pm

#52 Millennial Realist on 06.25.19 at 9:00 pm
Sorry Garth, but your delete of my comment was totally unreasonable and completely humorless.

Nothing I said, in good jest and a satirical spirit, was even close to the constant and offensive whinging coming from you and the Boomer comrades here complaining about the younger generation.

Calling us “moisters” is an offensive put down, but apparently okay for you, as you repeatedly toss it at us.

Pushing back at your actual generational bullying, though, is simply not to be tolerated.

Thanks for making that so crystal clear.

Any time. – Garth

////////////////

It’s every man for himself.

I’m not concerned about someone being wet behind the ears.

I can’t even get a good pee or poop joke published…

M45BC

#55 Puffle on 06.25.19 at 9:33 pm

Another huge issue the boomers will face is healthcare. I don’t think the government will be able to provide the type of quality healthcare that the boomers are expecting to receive. The hallways of hospitals will be full of old people on cots, there will be huge wait lists for surgeries, sick people will be discharged home with more prescription drugs instead of actual treatment, etc. A lot of this is already happening, but it will get much worse as the boomers age and demand more “free” health services.

Boomers didn’t think they had to save anything for healthcare (or pensions) because they were counting on the government to do it for them. Big mistake. The Boomers who actually saved will end up buying their own healthcare from the US or from private clinics here. The Boomers who didn’t save aren’t going to have many options.

The bottom line is that the government bought Boomer votes over the last few decades by promising them all sorts of future benefits that they will be unable to afford to deliver. The coming housing crash and recession will reduce government revenue and make it even more difficult for them to fulfill their promises.

#56 Let's see ... on 06.25.19 at 9:40 pm

#39 Dave on 06.25.19 at 7:15 pm
China to stop all meat product imports from Canada.

if they ever refuse our seafood. The world market has driven the price of our wild caught up so high we have to eat their “farm” raised crap.

#57 Smokanagan on 06.25.19 at 9:44 pm

#26 Rage Against the Machine

And your statements came from where? Can you provide your sources for the claims you make? Really, 14*?

#58 MF on 06.25.19 at 9:51 pm

I guess I’m lucky in this regard.

My boomer Parents always owner our home flat out and never had any mortgage. “Worth” about 1 mil.

They also have about 2 mil fully invested that they don’t have to touch because one parent has a good pension.

They don’t live lavishly, but enjoy the little important things (eating out with family, having people stay over, watching plays, going to the gym etc.)

I’m very proud of them. It can be done but requires hard work and sacrifice.

MF

#59 DON on 06.25.19 at 9:56 pm

Bad boys, bad boys
Whatcha gonna do, whatcha gonna do
When they come for you

https://biv.com/article/2019/06/potential-cases-tax-evasion-bc-real-estate-rising

Recent tax audits of the B.C. real estate sector are now resulting in average assessments of more than $200,000, as the Canada Revenue Agency sharpens its aim at some of the most egregious instances of tax avoidance and evasion.

#60 Blacksheep on 06.25.19 at 9:58 pm

Dave # 39,50,

“China to stop all meat product imports from Canada.”

“When we extradite the CFO, China will declare Canada inhumane and limit travel and investment to Canada.”
—————————–
We are a country of Dudley Do Rights.

But the USA, China and Russia, bend the rules a bit when required, in the best interest of their citizens.

CFO Mung, a real corporate princess in China, should have been detained for two weeks. T2 should have called China up immediately via back channels and told them she will be released soon and the whole exercise was optics to pacify Trump.

Then follow through and do it.

Nope…that wouldn’t be right.

What an embarrassing bunch of bloody pussies…

Now look whats happening.

#61 The Great Gordonski on 06.25.19 at 10:01 pm

https://www.cnbc.com/2019/06/25/barclays-likelihood-of-stock-market-meltup-rally-increasing.html

Yeah yeah, market melt up, yawn. Didn’t I tell you this a month ago, and the MSM is finally getting a grip on it. This is why you don’t listen to MSM for investment advice, entertainment at best, if you’re as twisted and cynical as me.

Yes, it’s contingent on a million things battling for relavance simultaneously. But who ever said getting rich was easy. As a strategist I choose the most likely outcomes. Investing in the right stocks is the foundation, profits come later, like renovating the master bathroom with a flush toilet so you longer pee in your shoes during the inevitable night terrors if having millions on the table in a card game that never ends.

#62 Al on 06.25.19 at 10:04 pm

There is no stress test with reverse mortgages, and retirees will not qualify for a home equity LoC or a new mortgage at market rates. Hence, the popularity of reverse mortgages

#63 crowdedelevatorfartz on 06.25.19 at 10:07 pm

@#42 Yukon Elvis
“I am so old and feeble they put me in the low security wing. They don’t even lock the door anymore cuz i have to get up 10 times a night to pee. The inmates are interesting, always someone new to talk to. The jailers call me pops and i give them investment advice. Nobody listens but who cares it is someone to talk to.’

*****

When did you change your name from Smoking Man?

#64 crowdedelevatorfartz on 06.25.19 at 10:15 pm

@ Millennial Surrealist
“#52 Millennial Realist on 06.25.19 at 9:00 pm
Sorry Garth, but your delete of my comment was totally unreasonable and completely humorless.”

+++++

Lets be honest.
It wasnt WHAT you said.
Or HOW you said it.
We just enjoy tormenting you.
Because we’re ….. Boomer Bullies!
Break out the Pink Shirts!

#65 DON on 06.25.19 at 10:17 pm

“Maybe there’s a app…”

We can call it ‘Pooched’

Meanwhile in Retirement mecca Parksville/Qualicum, two houses sit for sale across from each other. Both on sale as one Partner has past on.

Same kind of houses, one is selling for $699K and the other nicely landscaped house, gardens, shrubs, putting green for a lawn is listed for $799K.

Lots more listings in the area due to natural attrition. The young people in the area can’t afford these family homes. What happens when the mainlanders stop coming.

#66 Linda on 06.25.19 at 10:17 pm

#18 ‘Some of those’ – yes, some Boomers have DB work place pensions. CPP is also a DB pension plan & is indexed to inflation. However, the number of people who have a DB pension plan other than CPP has decreased over the decades. Even the much vaunted ‘government employee’ has seen their DB pension plan be converted into a DC plan in some cases (vide Saskatchewan provincial employees as an example). Note that many pension plan beneficiaries have seen benefits be sharply reduced or cease altogether (vide Nortel; Enron: Air Canada; Sears for examples). The assumption that all Boomers are rolling in DB lucre is simply not true & as today’s post points out, a sizable chunk of the Boomer cohort is in fact indebted & frankly can’t afford to stop working. This despite the plethora of advantages they had to accumulate & build wealth.

It isn’t Boomers vs. Moisters or age vs. youth. It is more those who were able to accumulate wealth or at least end up debt free vs. those who could not save a dime no matter how many chances they might have had. I saw that with my own parents. Dad had a good job his whole life. Unfortunately he could not save money & always spent more than he made. Even with the much vaunted DB workplace pension, there wasn’t enough money left in his bank account to cover his funeral expenses. Mom, on the other hand, did not have a high paying job all her life. There were breaks in employment & many of the jobs she worked were barely more than minimum wage. No workplace pension – her retiree income was CPP/OAS/GIS. Despite the much lower working income & very low retiree income, upon her demise all funeral expenses were paid from funds she’d set aside & insurance policies she had taken out. In addition there was a small legacy to each of her 7 children. The difference between my Mom & Dad was that Dad could not save; Mom on the other hand could make a penny go around twice & pay interest to boot. She was a saver while he was a spender & frankly that is what I see as the true ‘them vs. us’ divide. Garth provides for free advice on how to build financial assets & financial security. However, his advice only has value if the people reading this blog actually follow it. Sitting around bitching about how you got a raw deal & how those privileged rich should be made to pay for everything is easy; doing the work to build financial assets takes time & you actually have to work at it. Apparently a lot of people would rather bitch & moan about getting a raw deal – obviously it is easier to blame others for not getting ahead than actually doing the work to do so. Fun fact: most Boomers & other ‘rich’ folk didn’t get handed a trust fund/inheritance from their folks. They had to work for everything they have & no, it wasn’t ‘easy’.

#67 crowdedelevatorfartz on 06.25.19 at 10:18 pm

@#59 DON
“Recent tax audits of the B.C. real estate sector are now resulting in average assessments of more than $200,000, as the Canada Revenue Agency sharpens its aim at some of the most egregious instances of tax avoidance and evasion….”
*****

I think a few Flippers, Specc’ers and Realtors reading this just had a painful tightening of the chest…… :)

#68 PastThePeak on 06.25.19 at 10:20 pm

#10 Howard on 06.25.19 at 5:06 pm
So what on earth did the Boomers spend all the money on …

++++++++++++++++++++++++++++++++++++

Their (apparently ungrateful) Millennial children…

#69 Doug t on 06.25.19 at 10:31 pm

#54 Flop

Welcome to the club lmao

#70 Paul on 06.25.19 at 10:38 pm

#62 Al on 06.25.19 at 10:04 pm
There is no stress test with reverse mortgages, and retirees will not qualify for a home equity LoC or a new mortgage at market rates. Hence, the popularity of reverse mortgages
————————————————————————————————
Private mortgages are the new H.E.L.O.C. 65% advance interest only.

#71 PastThePeak on 06.25.19 at 10:48 pm

#39 Dave on 06.25.19 at 7:15 pm
China to stop all meat product imports from Canada.

Its only going to get worse – exponentially worse. Canada will fall into Depression.
++++++++++++++++++++++++++++++++++

Dictatorships only respect strength and actions. Endless talking about “working things out” means nothing. Unfortunately, our current leadership is the opposite of strong (unless you are in the way in the House of Commons, or a Justice Minister not following orders)…

Canada has to play hardball to get anyone in the Chinese Communist Party to pay attention:
– Publicly announce the intention to extradite Meng to the USA as soon as possible.
– Publicly state that Huawei has been determined to be an unacceptable security risk and will be banned from sales in Canada.
– The quality of “X, Y, Z” products from China (where there is competitive products available from other sources) will be very closely inspected for safety issues going forward.
– Publicly declare support for the trade issues the USA has raised in regards to China.

Guarantee the CCP will start to pay attention.

They are already detaining our citizens, and stopping the import of many of our products. What do we have to lose with a display of some backbone?

#72 Doug in Londinium on 06.25.19 at 10:56 pm

Well look on the bright side. Hardly a day goes by that some demographics “expert” tells us that when all the Boomers retire there will be labour shortages. Really? If it’s true that fewer than 40% say they’ll retire before hitting 65 it looks like the so called “problem” will solve itself.

#73 the ryguy on 06.25.19 at 10:59 pm

#47 Shawn Allen on 06.25.19 at 8:16 pm
————————————————-

I did that with my last two acquisitions, and both times I ended up buying the land from them once the leases were up. I knew going into those purchases that me eventually buying the land would be a possibility, and I priced that into my evaluations.

With this deal though, and frankly most that have come across my desk recently, the cash flow from the business is completely disjointed from the price of the land. Like I said Ive noticed this a lot lately, it seems to me that people are trying to cash out on the huge increases in RE over the last 10-12 years.

#74 the Jaguar on 06.25.19 at 11:06 pm

Sometimes people are running so fast that the world and reality are just passing them by. They don’t understand the cost of a throw-away society that preaches ‘more, bigger, better’, versus renovating and repairing the things that have served them well and added meaning to their lives. We could be talking about your car, your house or maybe even your spouse. They are all expensive to displace. ‘Madison Avenue’ and it’s modern day social media spawn are soul sucking, emotional and financial dead ends. Less will always be more for those who can see the real things in life that matter. Those who cannot will crowd themselves out on to the edge of a financial limb. Maybe an emotional one, too.
They get into debt when they should be almost out of it. They make the mistake of believing that giving or doing everything for their children will help those kids succeed in life instead of teaching them the valuable lessons on how to persevere, work hard and appreciate the value in waiting for things. The tangible meaningful things, which cannot be bought on Amazon.

Why are people still in debt in their sixties? They had to buy that ‘move up’ home when they should have been downsizing. They were helping their kids who should have been adjusting their own expectations and implementing their own savings and wealth plan. They avoided thinking about their own mortality, future health and financials requirements because they cannot bear to stare in the mirror of their own past errors.
A judgement? Maybe. You decide.

#75 Ronaldo on 06.25.19 at 11:20 pm

#63 crowdedelevatorfartz on 06.25.19 at 10:07 pm

When did you change your name from Smoking Man?

——————————————————————

My exact thoughts.

#76 Ponzius Pilatus on 06.25.19 at 11:52 pm

#39 Dave on 06.25.19 at 7:15 pm
China to stop all meat product imports from Canada.

Its only going to get worse – exponentially worse. Canada will fall into Depression.
————
We can Crispy and Harpo blame for this for sucking up to the Chinese.
LNG and oil will be next.
At least, in BC we have tourism to fall back on.
Alberta will surely be toast.
Sell your F-150 before it’s too late.

#77 DON on 06.26.19 at 12:00 am

#10 Howard on 06.25.19 at 5:06 pm

So what on earth did the Boomers spend all the money on that wasn’t going towards paying off the mortgage, aside from gifting Junior a down payment? Food dehydrators, spray-on toupées, and whatever else Ron Popeil was selling late at night in the 90s?

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

As I remember it…they weathered a recessions and big time down sizing, early automation, coupled with of course life.

A good thing to remember going forward.

Have you ever seen a full blown recession Billy. Captain High-liner did.

#78 Ponzius Pilatus on 06.26.19 at 12:01 am

Yukon Elvis.
Best handle ever.
You are one hell of a funny guy.
May you never leave this building (blog)

#79 DON on 06.26.19 at 12:08 am

#13 Bob Dog on 06.25.19 at 5:20 pm

Physical slavery requires that people be housed and fed. Financial slavery requires that people feed and house themselves.

If only Canadians could band together and form some sort of union that would regulated banks and protected the average person from greed. I propose calling this brilliant idea “Government”. We are all seriously in need of such an organization.
*************

I’ll second that. Great idea!

The foundation will be ‘A duty to represent the constituents’. We can even implement the rule of law for both poor AND rich.

#80 Stan Brooks on 06.26.19 at 12:13 am

People were taught to love debt with ‘policy makers’ incentivizing it with unfair advantages (which horse face billionaire in marriage/the french villa boy who wants to screw everybody conveniently misses in his crusade for ‘fair’ (in his ethically challenged delusional mind) taxes), a lot of debt junkies made it like bandits with tax free ‘gains’ along with real estate scam artists cartel members and the banks oligopoly, due to idiotic monetary and lending policies and NOW when it is all rolling over we suddenly are worried about it/the debt, while looking for idiots to pay the bill?

Good luck.

——————————–

China apparently has higher standards for food/meat than us/who knew?

https://ca.finance.yahoo.com/news/report-china-bans-canadian-meat-213601401.html

They surely don’t live in basements.

————————————–

Your quality of life is pretty much determined by your (debt) owners and their servants/shepherds in governments.
When they are stingy, greedy, incompetent, with provincial mentality, small balls and superiority attitude but brown behinds, see (look around) what happens.

Only an absolute idiot or completely brainwashed individual would buy in into this loser’s proposition for the young generation (under 30), where you have nothing to gain but everything, including your time and health to lose for the benefits of some inferior imbeciles, turning yourself into a debt slave, have no kids, spending your life on substandard housing in a place with no quality of life whatsoever, born but not fed to work to death….
….. well, you pretty much can guess the road ahead from now on.

#81 Stan Brooks on 06.26.19 at 12:38 am

What they feed the herd… Cheap stuff…

https://ca.finance.yahoo.com/news/report-china-bans-canadian-meat-213601401.html

a top comment from the link/verbatim:


Here’s the deal….this is a made in Canada problem. Ractopamine is a banned additive in over 160 countries. It is used in Canadian animal feed for cows, chickens, turkeys and pork products in the last 60 days before slaughter to reduce fat levels in animals and promote weight gain. The product is an beta antagonist that was discovered to produce weight gain. It remains in the meat after slaughter, most countries have banned it on humane grounds, safety grounds (it is a suspected carcinogen and the #1 side effect in animals is death), the negative impacts are significant and so most countries, including the EU, refuse to touch ractopamine fed protein with a 10 foot pole.

Not Canada……in order to export to China, any meat must be free of ractopamine, which requires that export animals be fed separately with ractopamine free feed. So, Canadian exporters feed protein destined for china separately from the herd that will be used for Canadian markets. This brings about the realization that Canadians are all eating meat that IS full of ractopamine..

In a Canadian study with monkey given ractopamine “developed daily tachycardia” rapid heartbeat—and rats fed
ractopamine developed cleft palates, protruding tongues, short limbs, missing digits, open eyelids and enlarged hearts. In addition to the mutations, some rat pups were born dead or died soon after.

Canada also uses clenbuterol in animal feed as well as Zilmax, which is considered about 100X more concentrated than ractopamine.

Here is the important question you should be asking your Minister of Parliament right now….why is it that Canadians are eating beef, pork, chicken and turkey that contains these harmful feed additives, when most of the rest of the world has banned the stuff.

You should all google ractopamine, zilmax and clenbuterol, specifically for animal feed. You’ll understand why China is banning all Canadian meat.

And then you wonder why people have Shawn Allen’s brains…

#82 Leo Trollstoy on 06.26.19 at 12:47 am

#4 Leftover on 06.25.19 at 4:52 pm
We looked at a house on Vancouver Island last month.

Nice place, needs a little work, built in the 1980’s and still occupied by the original owners who are now ready to go into assisted living. They built it for about $350K and it’s now worth a tidy $1,200K.

Guess what? It has an $800K mortgage.

So virtually every nickel of increased value has been borrowed against, no idea whether that was to fund grandma’s gambling habit or to “help the kids” buy a place, whatever, it’s gone.

At least they used the $ when they didn’t need “assisted living”

Too many die without touching the equity in their homes

What’s the point of that?

You can’t take it with you

#83 Dolce Vita on 06.26.19 at 12:58 am

#52 Millennial Realist

Snowflake.

—————————-

#53 Millennial Realist

Snowflake.

—————————-

#48 Millennial Realist

Snowflake?

#84 Nonplused on 06.26.19 at 1:28 am

People knew there was something wrong a long time ago.

https://www.youtube.com/watch?v=r_GH6M7cUq4

Let’s stop the “generations war”.

#85 Upenuff on 06.26.19 at 1:57 am

#49 Fiendish Thingy on 06.25.19 at 8:33 pm
I’m retiring this August at the ripe old age of 62. Moving to an ocean view home in Nanaimo, with a tiny 3.0% mortgage that will be paid off in 5 years.

Will be drawing 90% of pre-retirement income from a balanced, diversified collection of about 8-10 income streams, including a couple of govt pensions.

Best of all, we plan to get a dog next spring (had to hold off due to renting the past 9 years).

Now if we could only get a couple of grandkids…

Good for you! I guess we did everything right and retired 2 years ago at 60, paying ourselves $7500 cash per month through all of our investments…. two brand new grand kids bring a bounce back to your step… just saying

#86 Oh Canada, I weep. on 06.26.19 at 2:18 am

Now there is no doubt. When the culprits admit thier guilt, only distraction techniques and politically correct albiet false charges of racism dampen the truth.

https://www.scmp.com/news/china/money-wealth/article/3016074/unimpeachable-study-calls-foreign-ownership-primary-culprit

While we,’re at it, the phony climate war against Canada by American hate groups like Rockefeller Brothers I’d proven in tax records and corporate communications that the attack on Canada “tar sands” is not about climate at all….yet Canadian media refuses to tell Canadians the truth.

It seems that truth is not a valuable commodity in Canada….
Sad.

#87 NoName on 06.26.19 at 2:43 am

Interesting read, loneliness in Canada.

http://angusreid.org/social-isolation-loneliness-canada/

#88 Smoking Man on 06.26.19 at 3:08 am

99% of you when your hit with a hard time of sorts you will cut buck on spending. Scarafice your life style. Crawl, beg and steal.

Me I dont live in a box of I cant. Living in that box is a teachers lessons that destroyed your ingenuity and the ability to think outside the I cant box.

I’m not schooled, I dont live in a box. I’m a let’s do it, roll dice win or lose is just a game, I don’t make the result part of my identity. That’s crazy.

I just figure out more ways to make more loot. Serender is not an option.

I’m the 1% let that sink in Smoking Man Derangement Syndrome freaks.

#89 Smoking Man on 06.26.19 at 3:23 am

There are millions of ways to make millions a year. Did your teacher ever tell you that.

Probably not. Safe space losers that think getting a paid summer off is the holy grail of success.

They followed the rules. They Obay, They take the test. Earn that obidance certificate to please a Smoking Man , begging he will hire you. Make sure you wag your tail every morning for your milk bone.

I’m never going to get to cultist freaks that believe the cowards that never made a good bet.

I’ll keep trying.

Dr Smoking Man
PhD Herdonomics

#90 Howard on 06.26.19 at 4:11 am

#55 Puffle on 06.25.19 at 9:33 pm
Another huge issue the boomers will face is healthcare. I don’t think the government will be able to provide the type of quality healthcare that the boomers are expecting to receive. The hallways of hospitals will be full of old people on cots, there will be huge wait lists for surgeries, sick people will be discharged home with more prescription drugs instead of actual treatment, etc. A lot of this is already happening, but it will get much worse as the boomers age and demand more “free” health services.

———————————–

Makes you wonder if perhaps there should be a tax credit for anyone pledging to be euthanized at a certain time. There was a news report 4 or 5 years ago about a healthy, affluent 75-year old American woman who decided she didn’t want to sink into decrepitude and ended it all on a high note. I forget where exactly she had the euthanasia done, certainly not in the US as it’s illegal. Neither her husband nor her children could stop her, so they had no choice but to support her decision.

The healthcare crunch will subside after the Boomer bulge. Due to far more stressful and relatively impoverished lives, the Millennials are unlikely to live as long as their parents. Most will croak before dementia sets in and this will be a huge savings for the government.

#91 Andrew on 06.26.19 at 5:35 am

Remember that time tulips rebounded over and over again.

#92 Howard on 06.26.19 at 5:54 am

#77 DON on 06.26.19 at 12:00 am
#10 Howard on 06.25.19 at 5:06 pm

So what on earth did the Boomers spend all the money on that wasn’t going towards paying off the mortgage, aside from gifting Junior a down payment? Food dehydrators, spray-on toupées, and whatever else Ron Popeil was selling late at night in the 90s?

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

As I remember it…they weathered a recessions and big time down sizing, early automation, coupled with of course life.

A good thing to remember going forward.

Have you ever seen a full blown recession Billy. Captain High-liner did.

—————————————

Weathered recessions? You mean like the 2008 recession of which the employment effects fell almost entirely on YOUNG workers (unpaid internships anyone?), not Boomers? And anyway the 2008 recession was piddly in Canada.

Or the 1991 recession? Yes that was bad but again I believe the effects were most pronounced among older and entry-level workers, compared to the mid-career 35-45 year-old Boomers of the era. And the roaring mid/late-90s more than made up for it. Did I mention that one could buy a McMansion in the mid-90s for the price of Leafs season tickets? Interest rates weren’t even high anymore at that time, prime rate dropped to 3% in the mid-90s before rebounding slightly. So they had the best of both worlds : low prices AND low (by the standards of the day) interest rates.

Sorry but there is no excuse for Boomers not to be mortgage free at this point in their lives.

#93 Lizard Man on 06.26.19 at 6:12 am

#89 Smoke. Yer right, possibilities are endless. But why not narrow it down a bit? Why go through 15 years of medical school or take 20 years building a dry cleaning chain when in fact all the money is being manufactured on Wall St? Why not simply forego the time wasting activities of striving and advanced diverse education that life throws at you and jump on the back of the money machine? Only a great fool would allow themselves to be diverted. Stock picking is the shorter route to wealth creation.

Why do I buy stock in companies like CP Rail? It’s because the logic is so simple. You don’t have to think about it. As long as people procreate they’ll be a need for a railway. I bought CP at $80, it’s over $300 today. It’s as easy as pie. I love pie. I eat it while I’m not working.

https://marketrealist.com/2019/06/canadian-pacific-intermodal-volumes-boosted-its-rail-traffic-2/

#94 Howard on 06.26.19 at 6:13 am

#75 Ronaldo on 06.25.19 at 11:20 pm
#63 crowdedelevatorfartz on 06.25.19 at 10:07 pm

When did you change your name from Smoking Man?

——————————————————————

My exact thoughts.

——————————-

x3. I was going to leave almost the exact same comment as Fartz.

#95 Another Deckchair on 06.26.19 at 8:02 am

Howard asked what boomers spent their money on.

It’s actually a *really* good question.

As a young boomer, I’ll try to answer from what I’ve seen from my childhood to what I observe now.

– organized sports. (no more playing outside with the other kids, now you need $$$ and a car) (building lots were a lot of fun to play in)

– flying for vacations. (no more car-camping trips)

– child care. We went from 1 person looking after the kids to both parents working. (what is the $$ gain for paying for child care??)

– big houses. (the ’50s house I live in has had prior families, but around where I live, many of the small houses have been “supersized” over the last decade or two)

———

That’s just off the top of my head.

Unfortunately, if you get your kids into (e.g. Europe for a vacation) then they expect it, because “that’s the way it’s always been”. So, we’ve upped the game, and now it’s coming back to bite the boomers, AND their children.

Anyway, just some thoughts.

#96 maxx on 06.26.19 at 8:04 am

@ #30

Brilliant! It’s not just what you save, it’s how you spend that continually gushes cash into what you save.

There is no downside to buying stuff for pennies on the dollar. With no tax. Just bought a glass hall table for $20 – retail over $200. Savings = $180 + original retail tax approx. $30 = $210. $210 X gross-up on marginal tax rate = an obscene amount of savings on a single item.

Saving is an invaluable business tool and you are making great use of it. There is a long list of benefits: recycles good stuff, money goes to people who need it more urgently than big business, employs people to help turn their lives around, encourages volunteerism, is non judgmental and is huge fun (thrill of the hunt).

Our home is filled to the brim with antiques (the really good stuff, not cottage crap) and designer goods at a tiny fraction of retail. Picked up two pristine condition Chanel chain-link belts from a huge jumble bin at $1.00 each. A sterling Tiffany & Co. 925 cuff bracelet for, again from a jumble box for $1.00. It is insane what people either throw out or give away.

Congrats. Next time you’re scouting for bargains, check out the cars out front. Tons of luxury vehicles and very likely interesting stories.

#97 Figus Makum on 06.26.19 at 8:12 am

#66 Linda
Very well said.
Spend in haste, repent at leisure.

#98 Remembrancer on 06.26.19 at 8:16 am

#62 Al on 06.25.19 at 10:04 pm
There is no stress test with reverse mortgages, and retirees will not qualify for a home equity LoC or a new mortgage at market rates. Hence, the popularity of reverse mortgages
——————————
Just sell the damn house then live off the proceeds and stop spending more than you have. Reverse mortgages are to home ownership the way payday loans are to a pay cheques.

#99 dharma bum on 06.26.19 at 8:51 am

#23 Paracho

Really young sales reps who could not look you in the eye. Spoke really quick and domineering to folks in their 80s.
——————————————————————–

Reverse mortgage salespeople today are like the aluminum siding salesmen of yesteryear.

Tin Men.

Ripoff artistes extraordinaire!

Tin Men was a great movie, depicting the slimeball antics of these bloodsucking door to door bible salesmen types.

https://www.youtube.com/watch?v=cMMw35DfDdw

#100 dharma bum on 06.26.19 at 8:54 am

#90 Howard

Due to far more stressful and relatively impoverished lives, the Millennials are unlikely to live as long as their parents. Most will croak before dementia sets in and this will be a huge savings for the government.
——————————————————————-

Ahhhhhhhh!

Just like the good ol’ days!

#101 Headhunter on 06.26.19 at 9:12 am

#49 Fiendish Thingy on 06.25.19 at 8:33 pm
I’m retiring this August at the ripe old age of 62. Moving to an ocean view home in Nanaimo, with a tiny 3.0% mortgage that will be paid off in 5 years.

Will be drawing 90% of pre-retirement income from a balanced, diversified collection of about 8-10 income streams, including a couple of govt pensions.

Best of all, we plan to get a dog next spring (had to hold off due to renting the past 9 years).

Now if we could only get a couple of grandkids

_____________________________________

did you not read the memo? Kids are way too expensive and they have to prop up ur gov’t pension to the tune of 22 billion a year..

Boomers which I am a part of are the most selfish gen ever.. posters sayin how hard we had it are right is was kinda hard but nowhere near how hard it is now.

Good frind of mine is sick to his stomach when he passes not one of his kids or nieces or nephews can afford the 3rd gen family cottage.. house car cottage one income.. yes we had it real hard.

#102 Sandy Thompson on 06.26.19 at 9:12 am

You see all you people that thought low interest rates were for you. Now 6.3% or 6.63% compounding rate doubles in less than 11 years. Reverse mortgages are the credit card for property, houses. This is why they don’t want you to save your money and have an illiquid asset called physical real estate, primary residence.

Nobody asks what’s the catch anymore?

#103 Captain Uppa on 06.26.19 at 9:17 am

My parents came as Eastern European immigrants to this country with nothing. Escaping communism left them determined to make the most of their new opportunity in Canada (a lesson we can look to given today’s hate for immigration).

They were young and mostly uneducated, but hard working. Both of my parents found factory jobs, my dad with a good company (DB pension) because he had sheet metal skills.

Financial literacy wasn’t exactly something they really could concern themselves with or knew of, but they had street smarts. They bought a house, lived modestly but
also enjoyed life and gave us a fun childhood (I have great memories of summer trips and my first Nintendo at Christmas).

Their bulk asset was the house. Some minor investments on the side, even owned a side condo way back when in the 90s, but sold for not much gain (well before the “boom”).

Anyways, my point is this; all these Boomers who are apparently pennies away from financial oblivion did something really wrong and I don’t believe it’s because of home ownership as their single major asset.

My parents are very happy in their retirement. They do what they enjoy which means Cuba a few times a year and having family over for dinner.

It’s really about modesty. If you need big shiny things and luxurious cars all the time, then you’ll be broke regardless of where your assets are.

#104 JB on 06.26.19 at 10:06 am

#88 Smoking Man on 06.26.19 at 3:08 am

99% of you when your hit with a hard time of sorts you will cut buck on spending. Scarafice your life style. Crawl, beg and steal.

Me I dont live in a box of I cant. Living in that box is a teachers lessons that destroyed your ingenuity and the ability to think outside the I cant box.

I’m not schooled, I dont live in a box. I’m a let’s do it, roll dice win or lose is just a game, I don’t make the result part of my identity. That’s crazy.

I just figure out more ways to make more loot. Serender is not an option.

I’m the 1% let that sink in Smoking Man Derangement Syndrome freaks.
#89 Smoking Man on 06.26.19 at 3:23 am

There are millions of ways to make millions a year. Did your teacher ever tell you that.

Probably not. Safe space losers that think getting a paid summer off is the holy grail of success.

They followed the rules. They Obay, They take the test. Earn that obidance certificate to please a Smoking Man , begging he will hire you. Make sure you wag your tail every morning for your milk bone.

I’m never going to get to cultist freaks that believe the cowards that never made a good bet.

I’ll keep trying.

Dr Smoking Man
PhD Herdonomics
…………………………………………..
#89 Smoking Man on 06.26.19 at 3:23 am

There are millions of ways to make millions a year. Did your teacher ever tell you that.

Probably not. Safe space losers that think getting a paid summer off is the holy grail of success.

They followed the rules. They Obay, They take the test. Earn that obidance certificate to please a Smoking Man , begging he will hire you. Make sure you wag your tail every morning for your milk bone.

I’m never going to get to cultist freaks that believe the cowards that never made a good bet.

I’ll keep trying.

Dr Smoking Man
PhD Herdonomics
……………………………………………………..
Hey Smoking guy I can not understand why you did not flourish in school? Your spelling and grammar is impeccable! Is this why you have such a triggered thing for the education system?
My wife got the biggest laugh out of your comments, she believes with your $hit attitude you should definitely go into comedy! lmao

#105 Gravy Train on 06.26.19 at 10:28 am

#62 Al on 06.25.19 at 10:04 pm
There is no stress test with reverse mortgages, and retirees will not qualify for a home equity LoC or a new mortgage at market rates. Hence, the popularity of reverse mortgages.

#98 Remembrancer on 06.26.19 at 8:16 am
“Just sell the damn house then live off the proceeds and stop spending more than you have. Reverse mortgages are to home ownership the way payday loans are to a pay cheques.” Correct. The basic message to the innumerate is that compounding and its exponential nature is working against you. If we could pound the concept of compounding into people’s heads, personal finance would be a snap. I believe compounding is a central theme to Garth’s writings. :P

#106 Brett in Calgary on 06.26.19 at 10:37 am

#103 Captain Uppa

“Anyways, my point is this; all these Boomers who are apparently pennies away from financial oblivion did something really wrong and I don’t believe it’s because of home ownership as their single major asset.”

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

Exactly. My wife’s family escaped the Czech republic and started in Canada at 35 (minimal English). They are comfortably retired now while folks that have lived in Canada their entire lives cannot.

#107 Ronaldo on 06.26.19 at 10:40 am

#103 Captain Uppa on 06.26.19 at 9:17 am

Anyways, my point is this; all these Boomers who are apparently pennies away from financial oblivion did something really wrong and I don’t believe it’s because of home ownership as their single major asset.
——————————————————————-
I don’t believe that most boomers are in such bad financial shape as we are led to believe. If it wasn’t for home ownership most people would not have the wealth they have today. For most, it was a forced savings. The boomer generation spans 18 years. Which ones are people referring to? I am oldest of the boomers and have many younger boomer nieces and nephews and they are all doing just fine. I think a lot of this is made up gobbledeegoop. Like the Freedom 55 thingy that was being shoved down our throats by the financial industry back in the 80’s.

#108 Captain Uppa on 06.26.19 at 11:16 am

>>#107 Ronaldo on 06.26.19 at 10:40 am
#103 Captain Uppa on 06.26.19 at 9:17 am

Anyways, my point is this; all these Boomers who are apparently pennies away from financial oblivion did something really wrong and I don’t believe it’s because of home ownership as their single major asset.
——————————————————————-
I don’t believe that most boomers are in such bad financial shape as we are led to believe. If it wasn’t for home ownership most people would not have the wealth they have today. For most, it was a forced savings. The boomer generation spans 18 years. Which ones are people referring to? I am oldest of the boomers and have many younger boomer nieces and nephews and they are all doing just fine. I think a lot of this is made up gobbledeegoop. Like the Freedom 55 thingy that was being shoved down our throats by the financial industry back in the 80’s.>>

I tend to agree. The suggested apocalyptic state of Boomer financial affairs does seem exaggerated to me.

#109 Captain Uppa on 06.26.19 at 11:23 am

>> #106 Brett in Calgary on 06.26.19 at 10:37 am
#103 Captain Uppa

“Anyways, my point is this; all these Boomers who are apparently pennies away from financial oblivion did something really wrong and I don’t believe it’s because of home ownership as their single major asset.”

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

Exactly. My wife’s family escaped the Czech republic and started in Canada at 35 (minimal English). They are comfortably retired now while folks that have lived in Canada their entire lives cannot. >>

This is where immigrants have the edge; they know what real pain and poverty look like and they want no part of it. Financially speaking, they tend to be more disciplined and you can’t simply teach that.

I would wager the majority do not posses said self-restraint. Which is why no matter what your assets and their allocations are, discipline is always the main ingredient for success.

#110 IHCTD9 on 06.26.19 at 11:51 am

#96 maxx on 06.26.19 at 8:04 am
@ #30

Brilliant! It’s not just what you save, it’s how you spend that continually gushes cash into what you save.

There is no downside to buying stuff for pennies on the dollar. With no tax. Just bought a glass hall table for $20 – retail over $200. Savings = $180 + original retail tax approx. $30 = $210. $210 X gross-up on marginal tax rate = an obscene amount of savings on a single item.
______

With the advent of the http://WWW., E-bay and Kijiji etc… there has never been a better day for getting just about anything used for cheap and no tax. There is a veritable mountain of used stuff out there in excellent condition for peanuts.

#111 millmech on 06.26.19 at 12:33 pm

#92 Howard
Gen-X that watches boomers paying for multiple degrees for the millennial bedbugs, many friends of mine are paying for 6-10 years of schooling now at around 20k/year for expenses for each child,200k per child times two to three children. Do not forget that these children also need vehicles and insurance and even gas, also the much needed spring break and Christmas break vacations since everyone else gets those and it is not fair that they get left out. Last but not least the constant borrowing of cash for the weekends.

Once the little bugs are out of school they now need the immediate gratification of $100,000+ gift for the down payment for the brand new house, and it has to be furnished with top end stuff just like their friends have.

I am surprised that the boomers have anything left to their names at all, you look and see that it costs $400k to just get those pesky kids to be “independent” after graduation.

#112 Boombust on 06.26.19 at 12:59 pm

#86

Do you actually believe in half the the nonsense SCMP reporter writes?

That guy doesn’t know which end is up.

#113 Damifino on 06.26.19 at 1:10 pm

#107 Ronaldo

Like the Freedom 55 thingy that was being shoved down our throats by the financial industry back in the 80’s.
——————————

Yep, for me ‘Freedom 55’ was a myth. I didn’t retire until I was 56. That extra year was a real drag.

#114 Remembrancer on 06.26.19 at 1:19 pm

#105 Gravy Train on 06.26.19 at 10:28 am
————————
Yep, and to this treatise on financial ills, I’d add the siren lure of looking at your expenses only as a portfolio of monthly payments. Sure, avoiding more month than money still applies, but not considering what something, like actually costs is a bad habit – 84 month car payments, I’m looking at you…

#115 TheDood on 06.26.19 at 1:23 pm

#60 Blacksheep on 06.25.19 at 9:58 pm
Dave # 39,50,

“China to stop all meat product imports from Canada.”

“When we extradite the CFO, China will declare Canada inhumane and limit travel and investment to Canada.”
—————————–
We are a country of Dudley Do Rights.

But the USA, China and Russia, bend the rules a bit when required, in the best interest of their citizens.

CFO Mung, a real corporate princess in China, should have been detained for two weeks. T2 should have called China up immediately via back channels and told them she will be released soon and the whole exercise was optics to pacify Trump.

Then follow through and do it.

Nope…that wouldn’t be right.

What an embarrassing bunch of bloody pussies…

Now look whats happening.
_____________________________

Totally predictable what is happening. We could have (and should have) put her on a plane to her next destination and called Trump while she was in US airspace …….”She’s all yours….”

Instead, our gutless, fairy good boy politicians took their typical “rule of law” stance and the consequence is we’re now China’s enemy. What a bunch of buffoons!

#116 not 1st on 06.26.19 at 2:25 pm

My accountant is a real SOB. Not only did he get me a big fat GST refund, he clawed back my carbon tax big time. Now I have a nice little donation package to give to Mr Sheer paid for by the govt and envirowhackos.

#117 James on 06.26.19 at 2:42 pm

#115 TheDood on 06.26.19 at 1:23 pm

#60 Blacksheep on 06.25.19 at 9:58 pm
Dave # 39,50,

“China to stop all meat product imports from Canada.”

“When we extradite the CFO, China will declare Canada inhumane and limit travel and investment to Canada.”
—————————–
We are a country of Dudley Do Rights.

But the USA, China and Russia, bend the rules a bit when required, in the best interest of their citizens.

CFO Mung, a real corporate princess in China, should have been detained for two weeks. T2 should have called China up immediately via back channels and told them she will be released soon and the whole exercise was optics to pacify Trump.

Then follow through and do it.

Nope…that wouldn’t be right.

What an embarrassing bunch of bloody pussies…

Now look whats happening.
_____________________________

Totally predictable what is happening. We could have (and should have) put her on a plane to her next destination and called Trump while she was in US airspace …….”She’s all yours….”

Instead, our gutless, fairy good boy politicians took their typical “rule of law” stance and the consequence is we’re now China’s enemy. What a bunch of buffoons!
__________________________________________
Hell no, should drive her to the Peace Arch in Surrey and walk her into Blaine. Good riddance! Here is your package Donny baby.

#118 45north on 06.26.19 at 2:57 pm

Leftover: We looked at a house on Vancouver Island last month.
Nice place, needs a little work, built in the 1980’s and still occupied by the original owners who are now ready to go into assisted living. They built it for about $350 K and it’s now worth $1,200 K.
Guess what? It has an $800K mortgage.

So virtually every nickel of increased value has been borrowed

they’re asking $1,200 K

Metro Vancouver lost $90 billion in real estate equity, last year.

https://www.greaterfool.ca/2019/06/18/suck-blow-fail/

Vancouver Island is heavily influenced by Metro Vancouver. I’m thinking, this is an example where lost real estate equity translates into a devastating personnel loss.

#119 IHCTD9 on 06.26.19 at 3:16 pm

I remember years ago when Ms. IH and I were meeting with [email protected] to change things up after paying off the house. TNL said back then even that many older folks were heading into retirement with a mortgage. I believe her too, several of the older guys at work retired (against their will) at ~70 – and still owed on their house.

One guy was so financially screwed he essentially faked a “work related injury” trying to get on the WSIB pension plan…

#120 Gored on 06.26.19 at 3:33 pm

Ironic , you think?

https://vancouversun.com/news/local-news/two-dogs-rescued-from-a-butcher-in-china-have-arrived-in-vancouver-for-adoption

#121 The Princess on 06.26.19 at 3:45 pm

#117 James – Upon her landing she had a 12 hour layover for the connecting flight to Mexico. I recall she simply went to one of her homes. This indicates to me there was no arrest scheduled, and doesn’t add up.

#122 IHCTD9 on 06.26.19 at 3:53 pm

#29 Shamus on 06.25.19 at 6:20 pm
I’m 47.

I think the moisters do indeed have a reason to be hostile.
__

I’m 46, I think it depends on the moisters’ sense of entitlement .

When I got out of school and started the job hunt – I too looked to the GTA for a leg up. I soon found out that SFD’s out there cost almost 300K!

I said **** that and found a local job, wife, house. Never though twice about it. Best decision I could have made as it turns out. I didn’t waste a minute.

By the time I was 29, I had a career, wife, kid, and mortgage. By 41 everything was paid for. Since then, we have let the reins which for years restrained lifestyle inflation slowly start slipping. It’s down hill from here on in (hopefully).

Naturally, when the Mills ask what they are supposed to do when houses cost a Million bucks – I tell them: “just say **** that ****! , and just go find a different place to live. Same thing so many others have done before them. Some who even crossed Oceans in a mighty display of “******* that ****!”).

Guess what I hear after that suggestion?

#123 crazyfox on 06.26.19 at 4:09 pm

I can’t help but think that today’s millennial angst toward boomers isn’t just from being priced out of real estate, its everything! Millennial’s get to hear about a wrecked planet daily, whether its pollution or degrading environments or deforestation or war and nuclear proliferation to biodiversity loss and climate change, its not just the fact that banks, realtors, developers, flippers and homeowners of all ages wanted a real estate bubble to cash in on for the young, inexperienced and uneducated to pay for it all, its all the rest of it. Right?

Millennial’s have to tune into the next resource war in support of a petrol dollar that creates more money velocity in support of a stronger U.S. dollar so that Americans can buy more stuff, a resource war that is provoked by another nation wanting to trade in a different currency with oil trade or nationalize its assets provoking the U.S. to cook up a regime change or war in the disguise of “human rights” or similar ugly lies like “we are doing them a favor” to “they are the enemy of mankind” (today’s current line with Iraq).

What I’m trying to say here is that it wears on you to watch greedy empires and “self interests” make war to burn more oil that wrecks the planet and shortens the lives of the young the most and then lie to them bald faced over and over, as to why.

And its not like we can’t see a war with Iran coming. The congress has to declare war constitutionally? Not according to Mitch O’ connel. Republicans are itching for war and have been for some time. They just don’t tell the truth as to why. They never do. The truth is too amoral and hideous (for some) but really, do people really care all that much? As long as we can buy more stuff right?

If I said it once, I’ll say it again. Civilization’s greatest problem or threat is a lack morality. If we had it, if more of us did right than wrong, we would be facing the world’s greatest issues head on. Debt, failing carbon based energy models, failing economic models, climate change, biodiversity loss (polite expression for rapidly increasing extinction rates), overpopulation, crowding, pollution etc. if we practiced right from wrong we would be tackling these issues head on. Instead, we run away from them towards our self interests and let the next generation deal with our shitty karma, just like the days of Soddom with most everyone acting in their own self interests 24/7/365. Our ancestors wanted a better life for their children then they had for themselves. This generation… not so much.

The young sense it. The older and wiser understand it. The cause of all war, of all conflict is inequality fed by superior/inferior, hatred, grudges, division and for those who practice such ideals, they will not know peace, only the practices of discrimination of which all offenses are born. They are easy to spot, as they are either beating themselves up or looking for a fight.

The cause of all peace is through equality, by valuing all other human beings as equal to one’s self regardless of our differences, through love, forgiveness and oneness, through the connection to the divine. War can follow peace but it does not come from peace. War does not begin with peace but is ended by peace. How many here reading these words now, are in a state of conflict as we speak?

Do you smell that “moral rot” as we throw right from wrong out the window for our own self interests at the expense of others, can you smell it? Did boomers have it easy, they had it easier than the previous generation. Will the generation of tomorrow have it easier than today? When we wake up to the reality that its a dying world that even the distraction of smartphones can’t cure, then we will know the answer to that question, cut the young some slack and face our shortcomings… or won’t but it will reveal to us the nature of who we are.

#124 acdel on 06.26.19 at 10:09 pm

#66 Linda

A really good explanation what many do not understand or realize; thanks for your post.

#125 acdel on 06.26.19 at 10:31 pm

#42 Yukon Elvis

Ha! But hey, there is alot of truth to that.

#126 Prince Polo on 06.29.19 at 9:56 am

#53 Millennial Realist on 06.25.19 at 9:18 pm
Undelete my comment.

Or just be a generational Boomer Bully.

(With no sense of humour but a willingness to tolerate putdowns of younger people, women and others who are not part of your club)

============================
Garth, may you please delete all “Millennial Realist” comments going forward? Thanks.